Date: 20010525
Docket: T-1747-00
Neutral Citation: 2001 FCT 530
BETWEEN:
AB HASSLE, ASTRAZENECA AB and
ASTRAZENECA CANADA INC.
Applicants
- and -
APOTEX and THE MINISTER OF HEALTH
Respondents
[1] This is a motion for:
1. An order setting aside the order of the Prothonotary, dated November 29, 2000 which granted a motion by Apotex Inc. for an order pursuant to s.6(5)(b) of the Patented Medicines (Notice of Compliance) Regulations ("Regulations") dismissing the within application as frivolous, vexatious and an abuse of process;
2. An order setting aside the order of Prothonotary dated November 29, 2000 which dismissed the applicants' motion for an order requiring Drs. Sherman and Sefton to re-attend to answer certain questions refused on cross-examination;
3. An order extending the time for filing the applicants' evidence on the merits until thirty (30) days following the disposition of the applicants' motion for disclosure under subsection 6(7) of the Regulations.
FACTS
[2] The applicants commenced an application for an order prohibiting the respondent the Minister of Health ("Minister"), from issuing a notice of compliance ("notice of compliance") to the respondent Apotex in respect of omeprazole and/or omeprazole magnesium tablets, 10mg, 20 mg and 40 mg until after the expiration of Canadian Patents 1,292,693 ("‘693"), 1,302,891("‘891") and 2,166,486("‘483") (the "Patents"). The application is also for a declaration that Apotex' letter of August 1, 2000 does not comply with and does not constitute a notice of allegation under the Regulations.
[3] By letter dated August 1, 2000, Apotex provided a notice of allegation pursuant to the Regulations in respect of Apo-Omeprazole tablets for oral administration in strengths of 10, 20 and 40 mg ("notice of allegation"). In the notice of allegation, Apotex stated that no claim for the medicine itself and no claim for the use of the medicine in the Patents would be infringed by the making, constructing, using or selling by Apotex of its Apo-Omeprazole tablets.
[4] In its notice of allegation, Apotex explained that the Patents cover pharmaceutical compositions comprising three elements, namely: a core containing a medicine, an inert subcoating, and an outer enteric coating. The disclosures of the Patents teach that the inert subcoating is applied to the core before the enteric coating is applied in order to separate the core from the enteric coating to prevent degradation.
[5] In its notice of allegation, Apotex asserted that its Apo-Omeprazole tablets do not fall within the scope of the Patents because they are comprised of a core containing the drug, and an enteric coating applied directly to the cores without any subcoating between the cores and the enteric coating. Apotex asserted that its tablets will not infringe by reason of there being no subcoating between the cores and the enteric coating.
[6] In response to the notice of allegation, the applicants commenced the within proceeding.
[7] By notice of motion dated October 6, 2000, Apotex brought a motion seeking to dismiss the proceeding as being frivolous, vexatious and an abuse of process. Also by notice of motion dated October 6, 2000, the applicants brought a motion seeking production of portions of Apotex' new drug submission.
[8] According to Apotex, the applicants sought to have their motion heard prior to the hearing of Apotex' motion to dismiss the proceeding. Regarding the applicants' motion, the Prothonotary, by order dated October 16, 2000, ordered that the times for completion of the various steps stated in the order be extended to a date to be fixed at a hearing on November 10, 2000. It was also ordered that the applicants' motion be otherwise adjourned sine die to be spoken to on November 10, 2000.
[9] By order dated October 17, 2000, the Prothonotary ordered that Apotex' motion for dismissal of the applicants' application be adjourned and set down for hearing on November 10, 2000.
[10] On November 10, 2000, the applicants brought a motion seeking an order requiring Apotex' affiants to re-attend for further cross-examination to answer the questions refused.
DECISIONS OF THE PROTHONOTARY
[11] By order dated November 29, 2000, the Prothonotary dismissed the applicants' motion for re-attendance of Apotex' affiants. The Prothonotary observed that the questions that Dr. Sherman refused to answer referred to his statements that when the previous letters of allegation were withdrawn he was having difficulties with formulation.
[12] The Prothonotary found that answers to such questions would not be relevant because the reasons for the withdrawal of the notices of application were not relevant as they never proceeded to a hearing on the merits and res judicata would not be involved.
[13] As for the questions asked of Dr. Sefton, the Prothonotary noted that they were relevant to the interpretation of certain words in the Patents such as "coating", "covering", and "disposing". The Prothonotary found that because it would not be necessary to decide the meaning of such words for the purpose of deciding a motion to strike in connection with which the affidavit was filed, the answers to the questions were not considered relevant and re-attendance was not ordered.
[14] As for Apotex' motion to dismiss the application, the Prothonotary considered the applicants' reasons why Apotex' motion should not succeed.
[15] Regarding the applicants' allegation that the drug was not identified in the letter of allegations, the Prothonotary noted that the Patents refer to two drugs and its magnesium salt. The Prothonotary further observed that it had been pointed out in the cases that it is not necessary to identify which drug is the subject of the allegations and that the regulations themselves do not require it. The Prothonotary noted that the reason given by Apotex, namely two steps instead of three, applies to both drugs referred to in the Patents.
[16] As for the allegation that the issue had already been the subject of litigation, the Prothonotary concluded that the matter was not res judicata since proceedings were commenced some years ago but were withdrawn on consent without being tried on the merits and no conditions were then imposed.
[17] The applicants maintained that Apotex' allegations were inaccurate because the reaction of the enteric outer layer with the substances in the core layer results in an intervening or third layer. The Prothonotary concluded that the allegations themselves were the substance of the issue to be decided and that inaccuracy would result in penalties if the allegations were untrue. A decision in this scenario would also depend on the construction of the patent, a matter that the Prothonotary dealt with later.
[18] The Prothonotary did not accept the applicants' submission that disposition of the motion should be delayed until the contents of the new drug submission were known to the applicants since the allegations with respect to Apotex' new drug was the determining factor.
[19] The Prothonotary concluded that it was quite plain that the two steps procedure could not infringe the three steps procedure as it would not end up with a centre layer deployed before the outer layer was added.
[20] The Prothonotary granted Apotex' motion to dismiss the applicants' application as frivolous, vexatious and abusive.
ISSUES
1. Is it beyond doubt that the applicants cannot possibly succeed on the issue of whether the notice of allegation complies with the Regulations on the basis that:
(a) the notice of allegation must identify the drug; and
(b) the notice of allegation is an abuse of process
2. Is it beyond doubt that the applicants cannot possibly succeed on any of the following issues relating to whether Apotex' allegation of non-infringement is justified:
(a) whether the allegation can be justified on the specific legal and factual basis detailed in the notice of allegation;
(b) does the applicants' pending motion for disclosure preclude a motion for summary dismissal;
(c) with respect to the construction of patent:
(i) is the patent construction argued by Apotex detailed in the notice of allegation;
(ii) if so, should the question of construction be left for a hearing on the merits;
(iii) if not, does construction require consideration of expert evidence;
(iv) if so, what is the proper construction; and
(v) if the claims as construed are process-dependent composition claims, does the presumption of infringement apply.
ANALYSIS
Standard of review
[21] The standard of review of a prothonotary's order was set out as follows by the Federal Court of Appeal in Canada v. Aqua-Gem Investments Ltd., [1993] 2 F.C. 425 (F.C.A.):
I also agree with the Chief Justice in part as to the standard of review to be applied by a motions judge to a discretionary decision of a prothonotary. Following in particular Lord Wright in Evans v. Bartlam, [1937] A.C. 473 (H.L.) at page 484, and Lacourciere J.A. in Stoicevski v. Casement (1983), 43 O.R. (2d) 436 (Div. Ct.), discretionary orders of prothonotaries ought not to be disturbed on appeal to a judge unless:
(a) they are clearly wrong, in the sense that the exercise of discretion by the prothonotary was based upon a wrong principle or upon a misapprehension of the facts, or
(b) they raise questions vital to the final issue of the case.
Where such discretionary orders are clearly wrong in that the prothonotary has fallen into error of law (a concept in which I include a discretion based upon a wrong principle or upon a misapprehension of the facts), or where they raise questions vital to the final issue of the case, a judge ought to exercise his own discretion de novo.
Regulatory regime
[22] Pursuant to section 5 of the Regulations, a generic manufacturer ("second person") that wishes to compare its drug product to that of a patentee ("first person") must serve a notice of allegation alleging either that the patent has expired, is not valid, or will not be infringed by the second person. Section 5 of the Regulations provides:
5. (1) Where a person files or has filed a submission for a notice of compliance in respect of a drug and compares that drug with, or makes reference to, another drug for the purpose of demonstrating bioequivalence on the basis of pharmaceutical and, where applicable, bioavailability characteristics and that other drug has been marketed in Canada pursuant to a notice of compliance issued to a first person and in respect of which a patent list has been submitted, the person shall, in the submission, with respect to each patent on the register in respect of the other drug,
(a) state that the person accepts that the notice of compliance will not issue until the patent expires; or
(b) allege that
(i) the statement made by the first person pursuant to paragraph 4(2)(c) is false,
(ii) the patent has expired,
(iii) the patent is not valid, or
(iv) no claim for the medicine itself and no claim for the use of the medicine would be infringed by the making, constructing, using or selling by that person of the drug for which the submission for the notice of compliance is filed.
(1.1) Subject to subsection (1.2), where subsection (1) does not apply and where a person files or has filed a submission for a notice of compliance in respect of a drug that contains a medicine found in another drug that has been marketed in Canada pursuant to a notice of compliance issued to a first person and in respect of which a patent list has been submitted, the person shall, in the submission, with respect to each patent included on the register in respect of the other drug containing the medicine, where the drug has the same route of administration and a comparable strength and dosage form,
(a) state that the person accepts that the notice of compliance will not issue until the patent expires; or
(b) allege that
(i) the statement made by the first person pursuant to paragraph 4(2)(c) is false,
(ii) the patent has expired,
(iii) the patent is not valid, or
(iv) no claim for the medicine itself and no claim for the use of the medicine would be infringed by the making, constructing, using or selling by that person of the drug for which the submission for the notice of compliance is filed.
[...]
(3) Where a person makes an allegation pursuant to paragraph (1)(b) or (1.1)(b) or subsection (2), the person shall
a) provide a detailed statement of the legal and factual basis for the allegation;
(b) if the allegation is made under any of subparagraphs (1)(b)(i) to (iii) or (1.1)(b)(i) to (iii), serve a notice of the allegation on the first person;
(c) if the allegation is made under subparagraph (1)(b)(iv) or (1.1)(b)(iv),
(i) serve on the first person a notice of the allegation relating to the submission filed under subsection (1) or (1.1) at the time that the person files the submission or at any time thereafter, and
(ii) include in the notice of allegation a description of the dosage form, strength and route of administration of the drug in respect of which the submission has been filed; and
(d) serve proof of service of the information referred to in paragraph (b) or (c) on the Minister.
[23] Section 6 of the Regulations provides that, in response to a notice of allegation, a first person may commence a proceeding seeking to prohibit the issuance of a notice of compliance to the second person. Section 6 of the Regulations reads as follows:
6. (1) A first person may, within 45 days after being served with a notice of an allegation pursuant to paragraph 5(3)(b) or (c), apply to a court for an order prohibiting the Minister from issuing a notice of compliance until after the expiration of a patent that is the subject of the allegation.
(2) The court shall make an order pursuant to subsection (1) in respect of a patent that is the subject of one or more allegations if it finds that none of those allegations is justified.
(3) The first person shall, within the 45 days referred to in subsection (1), serve the Minister with proof that an application referred to in that subsection has been made.
(4) Where the first person is not the owner of each patent that is the subject of an application referred to in subsection (1), the owner of each such patent shall be made a party to the application.
(5) In a proceeding in respect of an application under subsection (1), the court may, on the motion of a second person, dismiss the application
(a) if the court is satisfied that the patents at issue are not eligible for inclusion on the register or are irrelevant to the dosage form, strength and route of administration of the drug for which the second person has filed a submission for a notice of compliance; or
(b) on the ground that the application is redundant, scandalous, frivolous or vexatious or is otherwise an abuse of process.
(6) For the purposes of an application referred to in subsection (1), where a second person has made an allegation under subparagraph 5(1)(b)(iv) or (1.1)(b)(iv) in respect of a patent and where that patent was granted for the medicine itself when prepared or produced by the methods or processes of manufacture particularly described and claimed or by their obvious chemical equivalents, it shall be considered that the drug proposed to be produced by the second person is, in the absence of proof to the contrary, prepared or produced by those methods or processes.
(7) On the motion of a first person, the court may, at any time during a proceeding,
(a) order a second person to produce any portion of the submission for a notice of compliance filed by the second person relevant to the disposition of the issues in the proceeding and may order that any change made to the portion during the proceeding be produced by the second person as it is made; and
(b) order the Minister to verify that any portion produced corresponds fully to the information in the submission.
(8) A document produced under subsection (7) shall be treated confidentially.
(9) In a proceeding in respect of an application under subsection (1), a court may make any order in respect of costs, including on a solicitor-and-client basis, in accordance with the rules of the court.
(10) In addition to any other matter that the court may take into account in making an order as to costs, it may consider the following factors:
(a) the diligence with which the parties have pursued the application;
(b) the inclusion on the certified patent list of a patent that should not have been included under section 4; and
(c) the failure of the first person to keep the patent list up to date in accordance with subsection 4(6).
[24] The prohibition proceedings provided by section 6 of the Regulations are considered a draconian remedy. In Apotex Inc v. Bristol-Myers Squibb Canada Inc., [2001] F.C.J. No. 16 (F.C.A.), the Federal Court of Appeal stated:
When a patent holder commences a prohibition application under the Regulations, the Minister's authority to issue the notice of compliance for the new drug is automatically stayed pending the determination of the prohibition proceedings. This automatic stay is in place for a maximum of 24 months, unless extended pursuant to Regulation 7(5). The automatic stay prescribed by the Regulations has been described as draconian because it permits a patent holder to delay the entry of competitors into the market without having to establish even a prima facie case of patent infringement: Apotex v. Merck Frosst Canada Inc., [1998] 2 S.C.R. 193, (1998) 80 C.P.R. (3d) 368.
[25] Subsection 6(5) of the Regulations provides for a second person to bring a motion for dismissal of an application brought under subsection 6(1) of the Regulations. The Court may dismiss the application if it is satisfied that the patents at issue are not eligible for inclusion on the register or are irrelevant to the dosage form, strength and route of administration of the drug for which the second person has filed a submission for a notice of compliance or on the ground that the application is redundant, scandalous, frivolous or vexatious or is otherwise an abuse of process.
Burden of proof and standard on a motion pursuant to subsection 6(5)(b) of the Regulations
[26] In Bayer Inc. v. Apotex Inc, (1998) 85 C.P.R. (3d) 334 (F.C.T.D.), Joyal J. held:
The Court, in the context of the evidence and arguments advanced by the parties, must keep in mind that this proceeding is more iffy than the dispute respecting the adequacy or otherwise of Bayer's response to Apotex's NOA. The application is for an order dismissing Bayer's prohibition proceedings on grounds that they are redundant, scandalous, frivolous or vexatious or otherwise an abuse of process, whole, as is now specifically provided in paragraph 6(5)(b) of the Regulations.
In that respect, Bayer alleges that to succeed under the procedure, Apotex must establish that all six reasons it advanced in its prohibition application meet the characteristics imposed above.
Firstly, Bayer relies on this particular provision of the Regulations. The principle involved is nothing new. It simply gives the Court explicit jurisdiction to consider a motion to dismiss where earlier, the Court had to rely on the old Rule 419 or the old (gap) Rule 5 of the Federal Court Rules. The case of Pharmacia Inc. v. Canada (1994), 58 C.P.R. (3d) 209 (F.C.A.) deals with this. At p. 217, the Court of Appeal observed that it is within the Court's jurisdiction to dismiss in a summary manner a notice of motion which is clearly improper as to be bereft of any possibility of success." "Such cases" said the Court, "must be very exceptional and cannot include cases such as the present where there is simply a debatable issue as to the adequacy of the allegations in the notice of motion".
In short, says Bayer, the rule being as restrictive as it is, it should only be applied in the clearest of cases. As was stated in Hunt v. Carey Canada Inc., [1990] 2 S.C.R. 959 at 980:
Thus, the test in Canada governing the application of provisions like Rule 19(24)(a) of the British Columbia Rules of Court is the same as the one that governs an application under R.S.C. 0.18, r. 19: assuming that the facts as stated in the statement of claim can be proved, is it "plain and obvious" that the plaintiff's statement of claim discloses no reasonable cause of action? As in England, if there is a chance that the plaintiff might succeed, then the plaintiff should not be "driven from the judgment seat". Neither the length and complexity of the issues, the novelty of the cause of action, nor the potential for the defendant to present a strong defence should prevent the plaintiff from proceeding with his or her case. Only if the action is certain to fail because it contains a radical defect ranking with the others listed in Rule 19(24) of the British Columbia Rules of Court should the relevant portions of a plaintiff's statement of claim be struck out under Rule 19(24)(a).
Finally, in David Creaghen v. Canada, [1972] F.C.R. 732 (F.C.T.D.). Pratte J., as he then was, stated:
Finally, in my view, a statement of claim should not be ordered to be struck out on the ground that it is vexatious, frivolous or an abuse of the process of the court, for the sole reason that in the opinion of the presiding judge, plaintiff's action should be dismissed. In my opinion, a presiding judge should not make such an order unless it be obvious that the plaintiff action is so clearly futile that it has not the slightest chance of succeeding, whoever the judge may be before whom the case could be tried. It is only in such a situation that the plaintiff should be deprived of the opportunity of having his day in court.
First of all, I should find that the burden on Apotex of convincing the Court that Bayer should be cut off at the pass is quite high. Cases cited by Bayer on the application of para. 6(5)(b) of the Amended Regulations mirror pretty adequately the stringent circumstances under which it may be used.
In that respect, I note that Bayer had before it a clear allegation by Apotex that its proposed drug would not be an osmotic device but would nonetheless meet the function and purposeful characteristics of the Adalat XL as described in the '950 Patent. In the context of the underlying Regulations, is this assertion sufficient to shift the evidentiary burden from the respondent to the applicant? As Madame Justice Reed suggested in Hoffmann-LaRoche Ltd. v. Canada (Minister of National Health and Welfare) (1996), 67 C.P.R. (3d) 484, the conflicts between a public safety-driven statute such as the Food and Drug Act and a proprietary-driven statute such as the Patent Act are not easily reconciled. Nevertheless, Reed J. rationalized in the following manner the judicial hurdle which had been overcome since the Regulations came into force: (1) the burden of proof is on the applicant responding to a NOA to prove, on a balance of probabilities, that one or more allegations in the NOA are not justified; (2) the Court had no authority, during the effective currency of the proceedings, to compel production of evidence and there was no oral or documentary discovery; (3) the Court cannot require that samples of the drug proposed to be marketed be provided to the applicant; (4) the Court has no jurisdiction to order the filing and service of a detailed statement or a further and better detailed statement; and (5) jurisprudence has established that the facts asserted in a NOA are to be taken as true until disproved.
At p. 503 of the above decision, Reed J. states:
These proceedings are not infringement actions, nor are they actions for declarations of non-infringement. In keeping with the summary nature of the proceedings, ... if the facts asserted by a respondent justify an allegation of non-infringement, insofar as the text of the relevant claim is concerned, then, the allegation is justified. The proceeding is a summary one not designed to replace an action between the parties.
On appeal of Reed J.'s decision to the Federal Court of Appeal (Hoffmann-LaRoche Ltd. v. Canada (Minister of National Health and Welfare) (1997), 70 C.P.R. (3d) 206, Stone J.A. adds gloss to doctrine when he suggests as follows at p. 213:
The first major point taken by the Appellants centres on the Respondent's alleged failure to disclose facts sufficient to justify its allegation of non-infringement. The Appellants submit that the conclusion that sufficient facts were disclosed cannot be correct because the only reasonable way the Appellants could know whether the Respondent's product would infringe the Patent - and, accordingly, for them to decide whether to institute a section 6 proceeding - would be if the Respondent's composition had been disclosed in full so as to allow the Appellants to compare that composition with their own.
As is clear from subsection 55.2(4) of the Patent Act, R.S.C. 1985, c. P-4, as amended by the Patent Act Amendment Act, 1992, S.C. 1993, c. 2, the purpose of the Regulations is for "preventing the infringement of a patent by any person who makes, constructs, uses or sells a patented invention". Section 6 proceedings do not amount to an infringement action (Merck Frosst, supra at page 319; Nu-Pharm, supra, at page 218 [p. 14]). The obligation of the Respondent under the Regulations was to faithfully comply with the requirements of subsections 5(1) and (3). With reference to subparagraphs 5(3)(a) this meant the providing of a detailed statement of the "legal and factual basis for the allegation" (emphasis added). As has been pointed out by this Court in Merck Frosst, supra, and Bayer AG, supra, there is no requirement under the governing Part V.1 procedural rules that a sub-paragraph 5(1)(b) allegation be supported with any affidavit evidence or for testing such assertion on cross-examination. I have no doubt, nevertheless, that such an allegation is intended to be accurate. Once a second person's product reaches the market the first person is in a position to test the accuracy of the detailed statement; if it were shown to be inaccurate, the consequences for a second person could well be very grave indeed.
The foregoing observations of Stone J.A. bring me back to the main issue before the Court. The principles found in law, in doctrine or in precedents, all these together impose on a party a very heavy burden to convince the Court that an order of dismissal is warranted.
[27] In AB Hassle v. Canada (Minister of National Health and Welfare), [2000] F.C.J. No. 1428 (F.C.T.D.), McKeown J. stated:
The burden of proof and standard is very high on a motion to dismiss pursuant to paragraph 6(5)(b) of the Regulations. In considering such a motion, any doubt must be left for resolution by the trial judge. A proceeding should not be summarily dismissed unless it is without doubt or obvious that the application is so clearly futile that there is not the slightest chance of succeeding. The Federal Court of Appeal in Pharmacia Inc. v. Canada (Minister of National Health and Welfare) (1995), 58 C.P.R. (3d) 209 (F.C.A.), on a motion to strike an originating notice of motion pursuant to old Rule 419, confirmed that the Court may dismiss judicial review proceedings only in exceptional cases. At page 217:
For these reasons we are satisfied that the trial judge properly declined to make an order striking out, under Rule 419 or by means of the gap rule, as if this were an action. This is not to say that there is no jurisdiction in this court either inherent or through Rule 5, by analogy to other rules, to dismiss in a summary manner a notice of motion which is so clearly improper so as to be bereft of any possibility of success ... Such cases must be very exceptional and cannot include cases such as the present where there is simply a debatable issue as to the adequacy of the allegations in the notice of motion.
In deciding whether to dismiss a proceeding pursuant to paragraph 6(5)(b) of the Regulations, I should take into account some of the following considerations. First, the issue on the motion is not the determination of the merits of the proceeding, but rather a determination of whether a proceeding is frivolous, vexatious or an abuse of process. I should avoid converting a motion under paragraph 6(5)(b) into a motion for judgment or for the determination of a question of law where all the facts are not in agreement before me. In considering motions pursuant to paragraph 6(5)(b), courts have repeatedly refused to decide issues of law or facts where the law is not well established, indicating the determination of such contentious issues are matters properly for the trial judge hearing the matter on the merits. For example, in Pfizer Canada Inc. v. Apotex Inc.(2000), 1 C.P.R. (4th) 358 (F.C.T.D.), Lemieux J. stated at pages 369 to 370:
In the context of issues relating to statutory interpretation, Reed J. in Amway of Canada Ltd. v. Canada, [1986] 2 F.C. 312 (T.D.) at 326, was of the view that where there exists a contentious legal issue of statutory interpretation to be resolved, that issue, not being clear and obvious, should be left for argument at trial and should not be disposed by a motions judge in a preliminary proceeding.
...
In my view all of these issues of statutory interpretation raise genuine questions which are required to be determined on the merits and not on a motion to strike.
Second, I also must consider whether Apotex is in effect receiving a "sneak preview" of the details of the Applicant's case on the merits. It is particularly prejudicial to the Applicants when Apotex has not yet filed its evidence on the merits. Finally, I must be convinced that the Applicants' case cannot succeed. It is essentially the same test as on a motion to strike out a statement of claim.
I must also take into account that on a paragraph 6(5)(b) motion, the disposition of the motion is in the discretion of the Court.
[28] In light of the above jurisprudence, it seems that "a proceeding should not be summarily dismissed unless it is without doubt or obvious that the application is so clearly futile that there is not the slightest chance of succeeding". See AB Hassle v. Canada (Minister of National Health and Welfare), supra.
[29] As for the burden of proof, it seems that the applicant has to establish on a balance of probabilities, that the allegation in the notice of allegation before the Court is not justified. If the facts asserted by a respondent justify an allegation of non-infringement, insofar as the text of the relevant claim is concerned, then, the allegation of non-infringement is justified. SeeBayer Inc. v. Apotex Inc., supra. and Hoffmann-LaRoche Ltd. v. Canada (Minister of National Health and Welfare) (1996), 67 C.P.R. (3d) 484.
1. Is it beyond doubt that the applicants cannot possibly succeed on the issue of whether the notice of allegation complies with the Regulations on the basis that:
(a) the notice of allegation must identify the drug;
[30] The applicant submits that the notice of allegation does not identify the drug or active ingredient for which Apotex seeks approval and is therefore not consistent with the Regulations.
[31] Apotex submits that the notice of allegation must include a description of the dosage form, strength and route of administration of the drug in respect of which the submission has been filed and that there are no further requirements.
[32] The Prothonotary found that the Regulations did not require Apotex to identify which drug is the subject of the allegation.
[33] In Merck & Co. v. Canada (Attorney General) (1999) 176 F.T.R. 21 (F.C.T.D.), affirmed by the Federal Court of Appeal (2000), 254 N. R. 68 F.C.A., McGillis J. explained the principles of statutory interpretation:
In order to determine the proper construction of subsection 5(1) of the Patented Medicines (Notice of Compliance) Regulations, the principles of statutory interpretation outlined in the leading case Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27 must be applied. In that decision, Iacobucci J., writing for the Court, outlined the following framework for statutory interpretation, at pages 40-41:
At the heart of this conflict is an issue of statutory interpretation. Consistent with the findings of the Court of Appeal, the plain meaning of the words of the provisions here in question appears to restrict the obligation to pay termination and severance pay to those employers who have actively terminated the employment of their employees. At first blush, bankruptcy does not fit comfortably into this interpretation. However, with respect, I believe this analysis is incomplete.
Although much has been written about the interpretation of legislation (see, e.g. Ruth Sullivan, Statutory Interpretation (1997); Ruth Sullivan, Driedger on the Construction of Statutes (3rd ed. 1994) (hereinafter "Construction of Statutes"); Pierre-André Côté, The Interpretation of Legislation in Canada (2nd ed. 1991)), Elmer Driedger in Construction of Statutes (2nd ed. 1983) best encapsulates the approach upon which I prefer to rely. He recognizes that statutory interpretation cannot be founded on the wording of the legislation alone. At p. 87 he states:
Today there is only one principle or approach, namely, the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament.
Recent cases which have cited the above passage with approval include: R. v. Hydro-Québec, [1997] 3 S.C.R. 213; Royal Bank of Canada v. Sparrow Electric Corp., [1997] 1 S.C.R. 411; Verdun v. Toronto-Dominion Bank, [1996] 3 S.C.R. 550; Friesen v. Canada, [1995] 3 S.C.R. 103.
I also rely upon s. 10 of the Interpretation Act, R.S.O. 1980, c. 219, which provides that every Act "shall be deemed to be remedial" and directs that every Act shall "receive such fair, large and liberal construction and interpretation as will best ensure the attainment of the object of the Act according to its true intent, meaning and spirit".
Although the Court of Appeal looked to the plain meaning of the specific provisions in question in the present case, with respect, I believe that the court did not pay sufficient attention to the scheme of the ESA, its object or the intention of the legislature; nor was the context of the words in issue appropriately recognized. I now turn to a discussion of these issues.
The purposive approach to statutory interpretation adopted in Rizzo & Rizzo Shoes Ltd. (Re), supra has been applied by the Supreme Court of Canada in many cases. [See, for example, Chartier v. Chartier, [1999] 1 S.C.R. 242 at 252; R. v. Gladue, [1999] 1 S.C.R. 688 at 704; Novak v. Bond, [1999] 1 S.C.R. 808 at 839; M & D Farm Ltd. v. Manitoba Agricultural Credit Corp. (1999), 176 D.L.R. (4th) 585 at 597-598 (S.C.C.); Baker v. Canada (Minister of Citizenship and Immigration) (1999), 174 D.L.R. (4th) 193 at 230 (S.C.C.); Best v. Best (1999), 174 D.L.R. (4th) 235 at 291 (S.C.C.); Winters v. Legal Services Society (1999), 177 D.L.R. (4th) 94 at 112-113 (S.C.C.); and, Francis v. Baker (1999), 177 D.L.R. (4th) 1 at 14 (S.C.C.).
In applying the principles enunciated in Rizzo & Rizzo Shoes Ltd. (Re), supra in several of its recent cases, the Supreme Court of Canada has provided further guidance concerning the proper approach to statutory interpretation. With respect to the evidence to be considered in determining the purpose of an enactment, Cory and Iacobucci JJ., writing for the Court in R. v. Gladue, supra, a case concerning the interpretation of the sentencing provision in paragraph 718.2(e) of the Criminal Code, noted, at page 704, that "[t]he purpose of the statute and the intention of Parliament, in particular, are to be determined on the basis of intrinsic and admissible extrinsic sources regarding the Act's legislative history and the context of its enactment...". In Francis v. Baker, supra, a case concerning the interpretation of the Federal Child Support Guidelines, Bastarache J., writing for the Court, noted, at page 14, that "[p]roper statutory interpretation principles...require that all evidence of legislative intent must be considered, provided that it is relevant and reliable". Finally, in relation to the overall approach to be taken, Cory and Iacobucci JJ. emphasized in R. v. Gladue, supra, at page 704, the importance of section 12 of the Interpretation Act, R.S.C. 1985, c. I-21, in interpreting federal legislation. Section 12 of the Interpretation Act provides as follows:
| 12. Every enactment is deemed remedial, and shall be given such fair, large and liberal construction and interpretation as best ensures the attainment of its objects.
|
12. Tout texte est censé apporter une solution de droit et s'interprète de la manière la plus équitable et la plus large qui soit compatible avec la réalisation de son objet. |
|
In determining the proper construction of subsection 5(1), I must therefore apply the interpretative principles in the case Rizzo & Rizzo Shoes Ltd. (Re), supra and identify the interpretation of subsection 5(1) that best furthers the goals of the Patented Medicines (Notice of Compliance) Regulations. [See the approach taken in Novak v. Bond, supra, at page 839].
[34] I agree with the Prothonotary's interpretation that the Regulations do not require that the drug or active ingredient be identified in a notice of allegation.
[35] Furthermore, as stated by Apotex, there is no conceivable consequence relevant to this application which turns on the identity of the active ingredient and whether it is Omeprazole or an Omeprazole salt. Therefore, the allegation of non-infringement and the reasons why Apotex' product will not infringe the Patents applies to both Omeprazole and Omeprazole salts.
[36] As was stated in Hoffmann-LaRoche v. Canada (1999), 87 C.P.R. (3d) 251 (F.C.T.D.), by Sharlow J.:
It follows that where a party proposes to manufacture a medicine that contains none of those acids and files a notice of allegation saying so, a patent holder cannot possibly succeed in an application to prohibit the issuance of a notice of compliance on the basis that the notice of allegation is not sufficiently detailed, or that the allegation of non-infringement is not justified. In this case Hoffmann makes three additional arguments, which are considered below.
(b) the notice of allegation is an abuse of process
[37] The applicants submit that the notice of allegation is an abuse of process since Apotex made the same allegations in respect of the Patents and omeprazole and omeprazole magnesium tablets in Court Files 179-98 and 180-98.
[38] Apotex alleges that there is no abuse of process since the only evidence in the record is that the allegations were withdrawn solely on the basis of difficulties encountered by Apotex. By reason of these difficulties, Apotex' counsel and counsel for the applicants concluded an agreement whereby the notices of allegation were withdrawn. This agreement was eventually embodied in an order of the Court dated May 18, 1999. At the time the agreement was reached, the applicants did not request and clearly did not make it a term of the orders that Apotex would be barred from serving a subsequent notice of allegation based upon any grounds that Apotex might choose to pursue after resolving the difficulties encountered with respect to its first allegations.
[39] The Prothonotary observed that no conditions were imposed when the proceedings were withdrawn on consent and considered that the matter was not res judicata and that there was no abuse of process since the issues were never tried on the merits.
[40] In Lifeview Emergency Services Ltd. v. Alberta Ambulance Operators' Assn. (1995), 64 C.P.R. (3d) 157 (F.C.T.D.), Rothstein held:
As to the question of res judicata in respect of dismissals for want of prosecution, the law in Alberta was recently canvassed by Master Funduk in a July 27, 1995 decision in Sinclair Timber Industries Ltd. v. Metis Assn. Regional Council -- Zone No. 1, Court File No. 9303 13799 [now reported 39 C.P.C. (3d) 27, [1995] 10 W.W.R. 141, 31 Alta. L.R. (3d) 279]. Although Master Funduk was not dealing with an order for dismissal under rule 244.1(1), I see no reason why the principles are different in respect of discretionary versus non- discretionary dismissal orders for want of prosecution.
Master Funduk concluded that a second action is not an abuse of the process if a prior lawsuit for the same cause of action is dismissed for want of prosecution and that res judicata does not apply. I quote from his reasons at p. 4 [pp. 29-30 C.P.C.]:
Birkett v. James, [1978] A.C. 297 (H.L.), and Department of Transport v. Chris Smaller (Transport) Ltd., [1989] 2 W.L.R. 578 (H.L.), say that if a first lawsuit is dismissed for want of prosecution the plaintiff can sue again. The dismissal of the first lawsuit for want of prosecution is not a bar to a second lawsuit. Res judicata does not apply.
Birkett and Department of Transport were accepted in Alberta Government Telephones v. Arrow Excavators & Trenchers (1972) Ltd. (1989), 69 Alta. L.R. (2d) 332 (C.A.) ("A.G.T."). In that case there was inordinate delay, the delay was inexcusable and the defendant was likely to be seriously prejudiced by the delay. Without more, the lawsuit should have been dismissed. It was not because the court said that the plaintiff could just sue again. The result would have been different if the plaintiff could not have sued again.
Birkettaddresses the issue whether it is an abuse of process to start a second lawsuit if the first lawsuit is dismissed for want of prosecution. It says that it is not. Department of Transport refused to depart from Birkett in any way and the second case has been followed by A.G.T.
There is no point in a defendant asking me to depart from A.G.T.
This ground has no merit.
There is ample authority to the effect that res judicata cannot be argued when there has not been an adjudication of the merits of the first action: see for example, Merritt v. Brisson (1979), 10 B.C.L.R. 139 (B.C.S.C.), per Macfarlane J. Res judicata does not apply in the instant case.
As to whether this action is a means of circumventing rule 244.1(1), I note that rule 244.1(1) does not state or imply that a second action may not be brought if an earlier action is dismissed thereunder. Master Funduk's reasons in Sinclair to which I have referred, are also apt. If a second action may be brought in the Alberta Court of Queen's Bench after an initial action is dismissed for want of prosecution, I see no reason why, if the Federal Court has concurrent jurisdiction, that a second action in this court could not also be brought. Again, although he was dealing with a dismissal for want of prosecution that was made by discretionary order and not an order under rule 244.1(1), I see no reason that his finding on this point would not be equally applicable in respect of a dismissal under rule 244.1(1).
[41] I agree with the Prothonotary that the matter is not res judicata nor that it is an abuse of process.
2. Is it beyond doubt that the applicants cannot possibly succeed on any of the following issues relating to whether Apotex' allegation of non-infringement is justified:
(a) whether the allegation can be justified on the specific legal and factual basis detailed in the notice of allegation;
[42] The applicants allege that the issue that requires determination at a hearing on the merits is whether Apotex' tablets will have a subcoating. The applicants contend that Apotex' assertion that its tablets will not infringe the Patents since its "tablets comprise cores containing the drug, and an enteric coating applied directly to the cores without any subcoating between the cores and the enteric coating" is in issue since the evidence on Apotex' motion establishes, on a balance of probabilities, the likely presence of a subcoating in the Apo-Omeprazole tablets. Therefore, given the evidence on the motion suggesting the presence of a subcoating, there is at least a serious question as to whether Apotex' allegation of non-infringement is justified.
[43] The applicants rely on AB Hassle v. Canada (Minister of Health and Welfare) (2000), 10 C.P.R. (4th) 38 (F.C.T.D.) ("RhoxalPharma case"), which was an application by the applicants in the case at bar for an Order prohibiting the Minister from issuing a notice of compliance to RhoxalPharma.
[44] In that case, RhoxalPharma alleged that no claim for the medicine itself and no claim for the use of the medicine would be infringed by the making constructing, using or selling by them of tablets containing omeprazole. The legal and factual basis for RohxalPharma allegation was that the applicants' patent was directed to and claimed pharmaceutical preparations containing omeprazole and featuring a core region containing the active ingredient, an inert subcoating on the core region, and an outer enteric coating layer. RohxalPharma contended that their omeprazole tablets did not contain a core region nor an inert subcoating. Accordingly, since at least one essential feature of each claim would not be found in their product, RhoxalPharma was of the view that the patent would not be infringed. Furthermore, RoxalPharma claimed that the "omeprazole patents could not possibly cover what was disclosed as prior art– and specifically acknowledge in the introductory portion of these patents as constituting prior art – ie. a core containing Omeprazole to which is applied an enteric coating".
[45] On the issue whether RhoxalPharma's allegation of non-infringement in respect of the ‘693 and ‘891 patents was justified, Tremblay-Lamer J. held:
Considering Dr. Cartilier's admission in his second affidavit that the tablets contain a "core region", I agree with the Applicant the only remaining substantive issue in this proceeding is whether RhoxalPharma proposed tablets will contain an inert subcoating. In my opinion, this is a narrow issue which does not raise a validity issue nor the possibility of the presence of any subcoating which would not be covered by the patents.
Considering the recent decision of the Federal Court of Appeal in Ab Hassle v. Canada, it is clear that the Court is limited to consider only factual and legal basis relied upon in the detailed statement.
In that decision, the respondent served on the appellant a NOC and a detailed statement pursuant to paragraph 5(3)(a) of the Regulations in which it denied infringement of the patent and alleged the claims of the patent were not valid for anticipation or obviousness in view of listed prior art references.
The appellant commenced a proceeding pursuant to section 6 of the Regulations seeking an order prohibiting the Minister of Health from issuing a NOC to the respondent.
The respondent filed expert evidence on the issue of obviousness which relied on prior art references, the majority of which were not listed in the detailed statement.
The Federal Court of Appeal concluded that the detailed statement should be sufficiently complete to enable the patentee to assess its course of action in response to the allegation. As pointed out by Stone J., speaking for the Court, the intent appears to be that the entire factual basis be set forth in the statement rather than be revealed piecemeal when some need happens to arise in a proceeding pursuant to section 6 of the Regulations.
That is exactly what is happening in the case at bar. RhoxalPharma is trying to introduce new matters based on an elaborate construction of the patents and on prior art which was not considered in the detailed statement. Further, I agree with the applicants that RhoxalPharma initially argued that the composition of its tablets was novel and inventive and obtained a protective order on that basis. As such, it is now estopped from asserting that it is prior art.
For these reasons, I am not ready to consider these new matters. I am unable to read the Court of Appeal's decision in AB Hassle to allow any exception.
[...]
Has Astra shown that RhoxalPharma's notice of allegation is not justified? In other words, does the evidence support on a balance of probabilities that its tablets will not contain an inert subcoating which would be water soluble?
[...]
I give great weight to the evidence of Dr. Lindquist. He has impressive qualifications as an analytical chemist.
First, I am satisfied with his conclusion that, based on his experience, the technique used by Dr. Cartilier (SEM) is not determinative and that it is not one which would be used by an analytical chemist.
I am satisfied that the evidence, on a balance of probabilities, supports his findings that there is an inert subcoating comprised on a Substance X -HPMCP HP-55 salt. He came to that conclusion prior to being shown the Exhibit B list of ingredients which makes his evidence more persuasive. I have reviewed carefully his extensive cross-examination and did not find any inconsistencies.
Further, I do not agree with RhoxalPharma's assertion that the sub-layer, if any, is composed of degraded omeprazole. I accept Dr. Lindquist's evidence on that point that the absence of discolouration and the presence of peaks in the spectra showing a carboxylate confirm that the subcoat layer is not degraded omeprazole.
With respect to RhoxalPharma's argument that there is no evidence that the Substance X - HPMCP HP-55 completely surrounds the core, I disagree. Dr. Lindquist's evidence indicates clearly that he observed a continuous subcoating. I didn't find evidence to the contrary.
Finally, RhoxalPharma argues that there is no evidence that the salt is inert or that it will rapidly dissolve or disintegrate in water, again I disagree. I am satisfied that Dr. Lindquist has experience with Substance X salts and accept his conclusion that it is likely to be water soluble, given the conic nature of salts.
In summary, I find that the evidence of Dr. Lindquist established on a balance of probabilities that RhoxalPharma's tablets will include an inert subcoating.
As a result, the Applicants have established that the allegation of non-infringement, on the factual and legal basis provided in the detailed statement, cannot be justified.
The application for judicial review is allowed. The Minister of National Health and Welfare is prohibited from issuing a notice of compliance to RhoxalPharma in respect of omeprazole tablets until after the expiration of Canadian patents '693 and '891. The whole with costs.
(Footnotes omitted)
[46] Apotex submits that the RhoxalPharma case is irrelevant to the within application since the Court determined only a narrow issue in particular circumstances. Apotex submits that it is not trying in the case at bar, to argue that a spontaneously generated subcoat was covered by prior art as was argued by RhoxalPharma arguing in the case before Tremblay-Lamer J.
[47] Furthermore, Apotex argues that it is not attempting to rely on any issue or argument over what is set forth in the allegation. As noted above, the burden of persuading the Court with respect to patent construction rests with the patentee. The issue of the spontaneous generation of a subcoat is an issue which was raised by the applicants, and not by Apotex.
[48] In alternative, Apotex submits that even if a subcoating was present, this hypothetical subcoating would not be within the claims of the Patents and accordingly would not infringe.
[49] The Prothonotary considered that this issue also depended on the construction of the patent and dealt with this matter later in his reasons in the paragraph dealing with the construction of the patent.
[50] I agree with Apotex that it did not attempt to rely on issues not set forth in the notice of allegation and that the issue of subcoating was raised by the applicants.
[51] As to Tremblay-Lamer J.'s decision in RhoxalPharma case, I do have questions as to whether the issue of subcoating in the case at bar could raise a serious question as to whether Apotex' allegation of non-infringement is justified. However, as the Prothonotary stated, this issue relates to the construction of the patent. Since the issue to this question depends on the conclusions on the construction of the patent, I believe the answer to question 2(c) which relates to construction of the patent should be answered first.
(b) does the applicants' pending motion for disclosure preclude a motion for summary dismissal;
[52] The applicants allege that if the motion for production of information and samples was granted, the information and appropriate testing would permit to determine if a subcoating is present in the Apo-Omeprazole tablets and whether the tablets infringe the Patents. Therefore, since there is an outstanding issue, summary dismissal of the application is premature.
[53] Apotex submits that since it is clear that its formulation cannot possibly infringe the Patents, any disclosure which could potentially be obtained by the applicants' motion pursuant to subsection 6(7) of the Regulations is therefore irrelevant to the determination of infringement to be made.
[54] The Prothonotary concluded that since the allegations with respect to Apotex' new drug was the determining factor, it was not necessary to delay the disposition of Apotex' motion.
[55] The conclusions on this issue will also depend on the conclusions relating to the construction of the patent.
(c) with respect to the construction of patent:
(i) is the patent construction argued by Apotex detailed in the notice of allegation;
[56] The applicants submit that the Prothonotary considered and decided issues of construction raised by Apotex even though such issues were not in the notice of allegation.
[57] The applicants' allegation is that Apotex advanced patent construction not set out in its detailed statement. As I stated earlier, the allegations relating to the presence of a subcoating in Apotex' tablets or that a subcoating layer may be generated during the process used to make the formulation were raised by the applicants.
[58] In the Prothonotary's decision, he stated that Apotex alleged that it will have a two step procedure and will cover the core with an enteric covering which will partially react on contact with the substances in the core, to precipitate an intervening neutral layer between the core with the medicine and the enteric layer which had the potential to damage the core.
[59] In its notice of allegation, Apotex stated that in its tablets there would not be subcoating between the cores and the enteric coating. It did not specifically state that the enteric covering which will cover the core would partially react on contact with the substances in the core, to precipitate an intervening neutral layer between the core with the medicine and the enteric layer.
[60] I am not sure if Apotex had to explain this in its notice of allegation. Although it has been held in the RhoxalPharma case that there cannot be new matters not considered in the notice of allegation, I do not think Apotex is adding a new matter since it is still stating that there is a two step procedure and that there would not be any subcoating layer between the cores and the enteric layers. Nevertheless, we should admit that at the end of the process, Apotex' tablet has a subcoating, even if it pretends that it is a spontaneously generated subcoating.
[61] In any event, the applicants submit that if the Court concludes that Apotex can advance patent construction not set out in its detailed statement, the issues of construction should be left for a hearing on the merits.
(ii) if so, should the question of construction be left for a hearing on the merits;
[62] Apotex submits that construction of a patent is always engaged by an assertion of non-infringement in any proceeding.
[63] In Whirlpool Corp. v. Camco Inc., [2000] S.C.C. 67, the Supreme Court stated:
The first step in a patent suit is therefore to construe the claims. Claims construction is antecedent to consideration of both validity and infringement issues. The appellants' argument is that these two inquiries -- validity and infringement -- are distinct, and that if the principles of "purposive construction" derived from Catnic are to be adopted at all, they should properly be confined to infringement issues only. The principle of "purposive construction", they say, has no role to play in the determination of validity, and its misapplication is fatal to the judgment under appeal.
...
As stated, the Federal Court of Appeal applied the "purposive construction" approach to claims construction in O'Hara, supra, and, with respect, I think it was correct to do so. The appellants' argument that the principle of purposive construction is wrong or applies only to infringement issues must be rejected for a number of reasons:
(a) While Catnic, supra, dealt with infringement, the court had first to determine the scope and content of the plaintiff's invention. Lord Diplock was careful to relate his discussion of the "essential" features to the wording of the claims. It was these essential features considered without reference to specific issues of validity or infringement that constituted the "pith and marrow of the claim". He canvassed the possible existence of "any variant" of a "particular descriptive word or phrase appearing in a claim" but was careful not to link his discussion of claims construction to the particular variant in the defendant's allegedly infringing lintel. Indeed, for emphasis, he italicized the word "any" in "any variant". A patent must not of course be construed with an eye on the allegedly infringing device in respect of infringement or with an eye to the prior art in respect of validity to avoid its effect: Dableh v. Ontario Hydro, [1996] 3 F.C. 751 (C.A.), at pp. 773-74. Claims construction cannot be allowed to become a results-oriented interpretation, but there is nothing in Lord Diplock's speech that would support such an erroneous approach.
(b) Acceptance of the appellants' argument could result in a different claims construction for the purpose of validity than for the purpose of infringement (assuming purposeful construction is retained for infringement issues). However, it has always been a fundamental rule of claims construction that the claims receive one and the same interpretation for all purposes.
[64] In Glaxo Group Ltd. v. Canada (Minister of National Health and Welfare), [2000] F.C.J. No. 585, O'Keefe J. held:
In order to determine whether the Apotex allegations are not justified, the '313 and '331 patents must be constructed and the scope of the monopoly claimed by the patents determined. To this end, reference will be made to well-established principles of patent construction. These principles of patent construction apply in this case even though this is not a patent infringement action per se--for if I determine from the construction of the patent that the making or marketing of the Apotex formulation, as described in the evidence before me, would infringe Glaxo's '313 and '331 patents, the Apotex allegations of non-infringement would necessarily not be justified.
The principles of patent construction are well settled and without apparent controversy. According to leading textbook writers [See Note 9 below], the patent should be constructed in a purposive way, in order to give effect to the purpose of the invention, without the Court being either benevolent nor unduly harsh. The claims are to be read from the perspective of a person skilled in the art in question, with a mind willing to understand.
More specifically stated, the following canons of construction must be followed [See Note 10 below]:
(a) The claims are to be construed with reference to the entire specification.
(b) The claims are to be construed without reference to the prior art.
(c) Each claim is, if possible, to be given a distinct meaning.
(d) What is not claimed is disclaimed.
Finally and importantly, the patent is to be constructed before determining the question of infringement of the patent and separate from any determination in that regard.
[65] In light of the above, I agree with Apotex that construction of a patent is always engaged by an assertion of non-infringement in any proceeding. Furthermore, as was pointed out by Apotex, the applicants had the opportunity to file expert evidence as to the construction of the Patents. I do not believe that the Prothonotary erred in making a determination about patent construction on a motion for summary dismissal.
(iii) if not, does construction require consideration of expert evidence?
[66] The Prothonotary concluded that it did not need expert evidence as to the meaning of coating, disposing or covering for pharmaceutical purposes.
[67] As was stated in Nekoosa Packaging Corp. v. AMCA International Ltd. (1994), 56 C.P.R. (3d) 470 (F.C.A.):
Second, I would note that no argument was made with respect to the admissibility of expert evidence on the ultimate issue of patent construction. It is important to recognize that it is one matter for an expert to provide assistance in interpreting technical terms and quite another for him or her to proffer an opinion on the very issue to be decided by the trial judge. Yet this is precisely what experts for both sides did.
[68] However, the applicants submit that where a dispute among experts exists on a relevant issue, the matter should properly be left for trial. In Apotex Inc v. Syntex Pharmaceuticals International Ltd, (1998), 81 C.P.R. (3d) 188 (F.C.T.D.), Noël J. held:
Second, while patent infringement issues are not by definition excluded from the ambit of summary judgements, they tend to raise complex issues of fact and law which are usually better left for trial. This case is no exception.
The construction of a patent is ultimately a matter for the Court to decide. However, patents must be construed in the eyes of persons skilled in the art, and when dealing with patents relating to medicine, this usually compels the Court to place reliance on expert opinions. When this occurs, the credibility of the experts becomes relevant first in the sense that contradictory opinions on the same issue cannot all be right, and the Court must determine which are to be preferred, and second because, in some instances, the desire or capability of the experts to objectively inform the Court is put into question. Obviously, when issues of credibility arise, particularly issues of the second kind, it is difficult to conceive how the Court could render justice without the benefit of viva voce evidence.
Here credibility issues of the second type abound with respect to each of the four experts which have been put forth by the parties to assist the Court. The plaintiff argues that Drs. Banker and Yum did not draft the affidavit which they signed and specifically attacks their credibility on this basis. Therein lies a suggestion that the experts in question lent their credibility to an opinion that was not their own. This allegation is followed by numerous others which suggests that these witnesses failed to inform themselves of facts essential to the issuance of the opinion which they gave.
The defendants on the other hand allege that the opinion expressed by Dr. Sherman is not credible because he does not possess the required objectivity. It is alleged that he has personally made a patent application related to the medicine in issue. Dr. Niebergall is said to be a "routine" witness who "has been involved in so many cases on behalf of Apotex that he could not specify the number", the suggestion being that he is an expert who tends to respond to his client's needs.
Keeping in mind the nature of these attacks, I do not believe that I have to refer to any of the extensive authorities quoted by counsel to support the conclusion that in this instance, it would be preferable for the Court to hear the witnesses themselves in the context of normal trial proceedings.
(Footnotes omitted)
[69] In my view, a trial judge, with the help of experts, would be better to determine the real meaning of coating, disposing or covering for pharmaceutical purposes. I think that the Prothonotary made a mistake in making his own decision without the advice of experts.
(iv) if so, what is the proper construction?
[70] The applicants submit that the claims of the Patents do not limit the manner in which a subcoating may be formed.
[71] Apotex argues that the applicants must convince the Court that the scope of the Patents extends to a composition in which a subcoat is spontaneously generated as a result of the application of the enteric coating directly to the core and that such spontaneously generated subcoat actually separates the enteric coating from the core.
[72] The Prothonotary found that "the patent makes it clear that the invention is the coating of the core with the neutral layer before the enteric layer is added." He concluded that it was quite plain that the two step procedure could not infringe the three step procedure as it would not end up with a centre layer deployed before the outer layer was added.
[73] In light of my conclusion with respect to question 2(c)(iii) to the effect that expert evidence is required in order to properly construe the Patents, this question as to the proper construction of the Patents should be left to the trial judge hearing the case on the merits.
(v) if the claims as construed are process-dependent composition claims, does the presumption of infringement apply.
[74] The applicants submit that if the Patents claims cover compositions when made by a certain process. Therefore, pursuant to subsection 6(6) of the Regulations, there is a presumption that Apotex' tablets are prepared by such process and hence infringe the Patents.
[75] Subsection 6(6) of the Regulations provides:
(6) For the purposes of an application referred to in subsection (1), where a second person has made an allegation under subparagraph 5(1)(b)(iv) or (1.1)(b)(iv) in respect of a patent and where that patent was granted for the medicine itself when prepared or produced by the methods or processes of manufacture particularly described and claimed or by their obvious chemical equivalents, it shall be considered that the drug proposed to be produced by the second person is, in the absence of proof to the contrary, prepared or produced by those methods or processes.
[76] I am not sure whether the reactions that could occur in Apotex' tablets is obvious chemical equivalent.
[77] However, Apotex argues that the applicants must do more then raise a mere speculative possibility of infringement, and must establish that, if a notice of compliance is granted, infringement will occur.
[78] As was stated in SmithKline Beecham Inc. v. Apotex Inc., [1999] F.C.J. No. 533 (F.C.T.D.), by McGillis J.:
Apotex has alleged in its notice of allegation that its tablets will not infringe the '060 patent. That allegation is presumed to be true, "...except to the extent that the contrary has been shown..." by SmithKline. [See Merck Frosst Canada Inc. v. Canada (1994), 55 C.P.R. (3d) 302 at 319 (F.C.A.)]. In my opinion, the evidence adduced by SmithKline, including the two experiments, raises no more than a possibility of infringement by Apotex, and does not establish, on a balance of probabilities, that Apotex's allegation of non-infringement is not justified. I am also satisfied that the evidence of Apotex's witness Mr. Petrov does not advance the case for SmithKline, as suggested by its counsel. In my opinion, Mr. Petrov simply confirmed that he agreed with the conclusions of Dr. Apperley and Mr. Ward in the context of the experiments conducted by them.
[79] In my view, the Prothonotary went too far and the questions whether construction argued by Apotex, and whether Apotex' tablets will avoid infringement of the Patents as construed should be left for determination by a judge hearing the case on the merits.
[80] Therefore, the motion is granted. The decision of the Prothonotary dated November 29, 2000 dismissing the within application is set aside.
[81] As for the decision of the Prothonotary also dated November 29, 2000 dismissing the motion for an order requiring Dr. Sherman and Dr. Sefton to re-attend to answer certain questions, the decision relating to Dr. Sefton is set aside and this Court orders that Dr. Sefton re-attend to answer certain questions refused on cross-examination no later than June 29, 2001.
[82] With respect to the applicants' motion for an order requiring Apotex to produce to the applicants the documents described in the applicants' notice of motion dated October 6, 2000 (see tab 4 of the applicants' motion record, volume I of III, filed on February 19, 2001), which was never decided by the Prothonotary, this Court orders that the applicants be allowed an extension of time of thirty days to bring this motion before the Court.
[83] Costs in favour of the applicants.
Pierre Blais
Judge
OTTAWA, ONTARIO
May 25, 2001