Date: 20041122
Docket: T-74-03
Citation: 2004 FC 1633
BETWEEN:
PFIZER CANADA INC. and
PFIZER INC.
Applicants
and
NOVOPHARM LIMITED and
THE MINISTER OF HEALTH
Respondents
INTRODUCTION
[1] By Notice of Application filed the 17th of January, 2003, Pfizer Canada Inc. ("Pfizer Canada") and Pfizer Inc. ("Pfizer U.S."), (collectively, the "Applicants") seek the following relief:
1) An Order in accordance with subsection 6(1) of the Patented Medicines (Notice of Compliance) Regulations[1] (the "Regulations") prohibiting the Minister of Health from issuing a notice or notices under section C.08.004 of the Food and Drug Regulations[2] (a "notice of compliance") to the Respondent Novopharm Limited ("Novopharm") in connection with 250 mg tablets for oral administration of the drug azithromycin until after the expiration of Canadian Letters Patent No. 1,314,876 (the " '876 Patent");
2) Their costs of the Application; and
3) Such further and other relief as to this Court seems just.
[2] In the Memorandum of Fact and Law filed on behalf of the Applicants, the Applicants indicate that they seek, in the alternative to the first relief recited above, a "grave consequences order".
[3] The Applicants' Application is responsive to a Notice of Allegation by Novopharm provided to Pfizer Canada pursuant to section 5 of the Regulations, by letter dated the 30th of November, 2002. The substance of the Notice of Allegation is in the following terms:
1.0 NOTICE OF ALLEGATION
Canadian Patent no. 1,314,876 (the " '876 Patent") has been listed by the Minister of National Health and Welfare (the "Minister"), at Pfizer's request, on the Patent Register (the "Register") with respect to Pfizer's ZITHROMAX® azithromycin product in 250 mg tablet strength and with respect to other products.
Pursuant to subparagraph 5(1)(b)(iv) of the Regulations, Novopharm alleges that product claim 1 and composition claim 5 of the'876 patent will not be infringed by the making, constructing, using or selling by Novopharm of the Novopharm Product.
Claims 2 through 4 of the '876 Patent, being process claims, are not eligible subject matter for the Register.
The legal and factual basis for the above noted allegations is as follows.
2.0 DETAILED STATEMENT OF THE LEGAL AND FACTUAL BASIS OF THE ALLEGATION
The '876 Patent issued to Pfizer Inc. on March 23, 1993 with 5 claims, from an application filed on July 7, 1988. The application from which the '876 Patent issued claims priority from International Patent Application No. PCT/US87/01612, filed July 9, 1987. Therefore, the earliest possible relevant date for the '876 Patent is July 7, 1987.
2.1 Subparagraph 5(1)(b)(iv)
2.1.1 Claims 2 to 4
Claims 2 to 4 of the '876 Patent cover methods and/or processes. As such, claims 2 to 4 cannot be included on the Register, or be the subject of a proceeding under the Regulations.
2.1.2. Claims 1 and 5
Claims 1 and 5 are product and composition claims, respectively, directed to crystalline azithromycin dihydrate and pharmaceutical compositions comprising an antibiotic effective amount of non-hygroscopic crystalline azithromycin dihydrate.
Claim 1
Claim 1 is directed to "crystalline azithromycin dihydrate".
The Novopharm Product is free of crystalline azithromycin dihydrate. More specifically, Novopharm Azithromycin is azithromycin monohydrate. The Novopharm Product is formulated with Novopharm Azithromycin. The Novopharm Product therefore, contains azithromycin monohydrate, which is stable and does not convert to azithromycin dihydrate. As they are free of crystalline azithromycin dihydrate, neither Novopharm Azithromycin nor the Novopharm Product could be found to infringe claim 1.
Claim 5
Claim 5 is directed to a "pharmaceutical composition comprising an antibiotic effective amount of non-hygroscopic crystalline azithromycin dihydrate in admixture with a pharmaceutically acceptable diluent or carrier."
For the reasons noted above with respect to claim 1, the Novopharm Product could not be found to infringe claim 5.
3.0 CONCLUSION
In conclusion, Novopharm does not believe that there is any reasonable basis upon which Pfizer can apply for an order of prohibition pursuant to Section 6 of the Regulations.
Novopharm respectfully submits that the detailed statement of the legal and factual basis for the allegations provided herein complies with the requirements of paragraph 5(3) of the Regulations. All of the facts upon which Novopharm relies in support of its allegations pursuant to paragraph 5(1)(b) of the Regulations are provided herein so as to make Pfizer fully aware of the grounds upon which it is alleged that the claims for the medicine itself in the '876 Patent will not be infringed.
Further particulars to support Novopharm's statements of fact contained in the detailed statement provided herein will be provided as part of Novopharm's response to any prohibition application filed in the Federal Court in accordance with the Regulations. In addition, Novopharm will disclose further details relating to its tablets once a suitable confidentiality order is in place.[3]
THE PARTIES
[4] According to the Application instituting this proceeding and the photocopy of a certified copy of the '876 Patent included in the Applicants' Record, Pfizer U.S. is the owner of the '876 Patent. It is joined as a party in this proceeding in accordance with subsection 6(4) of the Regulations.
[5] The '876 Patent is included in the patent register maintained by the Minister of Health pursuant to subsection 4(1) of the Regulations in connection with Notices of Compliance in the name of Pfizer Canada for 250 mg tablets of the medicine azithromycin dihydrate. Presumably under licence or equivalent arrangement with Pfizer U.S., Pfizer Canada markets azithromycin dihydrate tablets in Canada under the name ZITHROMAX®, in accordance with the Notices of Compliance.[4]
[6] While there was no evidence before the Court in this regard, I am satisfied that Novopharm is a "generic drug company", that is to say, a manufacturer and marketer of drugs in Canada which, in the words of Justice Nadon, in Merck Frosst Canada Inc. v. Canada (Minister of National Health and Welfare)[5] "...market[s] a drug without having to independently establish the safety and effectiveness of the drug...". As earlier noted, Novopharm seeks a Notice of Compliance from the Minister to enable it to market its own azithromycin product.
[7] The Minister of Health is the Minister charged with the administration of the Patented Medicines (Notice of Compliance) Regulations. No material filed on behalf of the Minister was before the Court at the hearing of this application. Further, the Minister was not represented at the hearing.
THE PATENT IN SUIT
[8] As noted in the portion of Novopharm's Notice of Allegation quoted earlier in these reasons, the application giving rise to the '876 Patent was filed on the 7th of July, 1988, giving rise to an earliest possible relevant date, for the purposes of this application, of the 7th of July, 1987. The '876 Patent is entitled "Azithromycin Dihydrate". The opening sentences of the disclosure read as follows:
The present invention is directed to a valuable new form of azithromycin (9-deoxo-9a-aza-9a-methyl-9a-homoerythromycin A), viz., a non-hygroscopic dihydrate form thereof.
Azithromycin is the U.S.A.N. (generic name) for 9-deoxo-9a-aza-9a-methyl-9a-homoerythromycin A, a broad spectrum antibacterial compound derived from erythromycin A. ...
[9] The Patent contains only five (5) claims. The claims that are relevant for the purposes of this matter are 1 and 5. Those claims read as follows:
1. Crystalline azithromycin dihydrate.
...
5. A pharmaceutical composition comprising an antibiotic effective amount of non-hygroscopic crystalline azithromycin dihydrate in admixture with a pharmaceutically acceptable diluent or carrier.
[10] Claim 1 claims a composition of matter and is a product per se claim which covers crystalline azithromycin dihydrate, regardless of how it is made.
[11] Claim 5 is alleged in the Notice of Allegation to be a composition claim. In the same document, claims 2, 3 and 4 are described as "process claims" and, in the result, are alleged to be "not eligible subject matter for the [Patent] Register" maintained by the Minister.
THE NOVOPHARM PRODUCT
[12] Earlier in these reasons, a substantial portion of Novopharm's Notice of Allegation is quoted. For ease of reference, I repeat here one paragraph from that quotation:
The Novopharm Product is free of crystalline azithromycin dihydrate. More specifically, Novopharm Azithromycin is azithromycin monohydrate. The Novopharm Product is formulated with Novopharm Azithromycin. The Novopharm Product therefore, contains azithromycin monohydrate, which is stable and does not convert to azithromycin dihydrate. As they are free of crystalline azithromycin dihydrate, neither Novopharm Azithromycin nor the Novopharm Product could be found to infringe claim 1.
For the same reasons, Novopharm alleges that its "Novopharm Product" could not be found to infringe Claim 5.
[13] The Applicants dispute the allegations that Novopharm's Azithromycin is "free of crystalline azithromycin dihydrate" and that it "...is stable and does not convert to azithromycin dihydrate." The Applicants further contend that Novopharm has simply failed to allege and to establish that its Novopharm Azithromycin is not manufactured in Canada by a process, or imported in a manner, that infringes the '876 Patent.
[14] Evidence before the Court discloses that Novopharm does not propose to manufacture or have manufactured for it in Canada its "Novopharm Azithromycin", but rather proposes to import it, in bulk, into Canada and to formulate its "Novopharm Product" in Canada from the imported Novopharm Azithromycin.
THE EVIDENCE BEFORE THE COURT
[15] The Applicants relied on the affidavit of a single expert, who was cross-examined, with a transcript of the cross-examinations being before the Court. The following is a brief description of the qualifications of the Applicants' expert.
[16] Dr. Eric Munson holds a B.S. Chemistry degree which he received in 1987 from Augustana College in Sioux Falls, South Dakota. He was awarded a Ph.D. degree in 1993 from Texas A & M University. He is an Associate Professor at the University of Kansas. He attests:
My area of research includes solid-state NMR spectroscopy, powder X-ray diffraction, and other techniques to characterize solid pharmaceuticals. Some of my specific research areas include the investigation of the structure and reactivity of pharmaceutical agents in polymer matrices; correlation of solid-state NMR chemical shifts with molecular structure; investigation of the transformations between crystalline and amorphous forms of pharmaceutical solids; effect of processing upon drug structure and stability; investigation of peptide and protein stability in formulations; and the effects of freeze drying upon drug stability.
Based on my experience, in particular, my expertise in spectroscopic and other analytical techniques and through extensive collaborations with experts in the field of polymorphism, I have developed considerable expertise in the analysis of active pharmaceutical ingredients. More specifically, I have expertise in using spectroscopic and other analytical techniques to differentiate and identify different polymorphs, hydrates, solvates and pseudopolymorphs of an active pharmaceutical ingredient, as well as formulated products including tablets of such active pharmaceutical ingredients. I have published over a dozen papers on the analysis of different polymorphs of pharmaceutical compounds using solid-state NMR.
I have also consulted with several drug companies, both brand name and generic, on solid-state characterization of pharmaceuticals and in addition, I have assisted both brand name and generic companies in litigation relating to form changes in solid pharmaceutical compounds.[6]
[17] No challenge was recorded to Dr. Munson's claim of expertise.
[18] Novopharm relied on the expert opinions of two (2) affiants and the additional evidence of one of its employees. Their qualifications can be briefly summarized as follows.
[19] Dr. Leslie Evans received his B.Sc. in chemistry in 1967 from Southampton University, England. He was awarded a Ph. D. degree in soil chemistry in 1974 from the University College of Wales. He was a Post-Doctoral Fellow at University College, Dublin, Ireland from 1973 to 1975. Since then, he has served successively as Assistant Professor, Associate Professor and Professor at the University of Guelph, Ontario where he is currently a professor in the Department of Land Resources. Dr. Evans has published extensively and has delivered many papers at various conferences.
[20] Dr. Evans attests:
My area of research includes mineralogical characterization of soils and sediments and computer modeling of metal retention and mobility in soils, sediments and waters. My area of research frequently involves the analysis of x-ray diffraction patterns. As a result, I have developed considerable expertise in the area of x-ray diffraction pattern analysis.[7]
[21] Dr. Evans' expert qualifications in x-ray diffraction pattern analysis were not challenged.
[22] Ms. Valerie J. Robertson graduated with a B.Sc. Honours Degree in chemistry from Dalhousie University, Nova Scotia. From 1969 to 1993 she was employed, first as an operator and later in management, in NMR spectroscopy. Since 1993, Ms. Robertson has been employed at the University of Guelph, College of Physical and Engineering Science, in the management of the University's Chemistry and Food & Soft Material NMR Centers. Ms. Robertson has made a range of presentations on subjects within her field of endeavour and has an extensive range of publications to her credit. She attests:
I have operated NMR spectrometers and analysed results from NMR spectroscopy for over 30 years. Over this period of time, I have published numerous articles in the area of NMR spectroscopy and have made a number of presentations on various issues relating to this field of science. ...
As a result of such experience, I have developed considerable expertise in the operation of NMR spectrometers and the analysis of results from NMR spectroscopy.[8]
[23] Ms. Robertson's expert qualifications in NMR spectroscopy were not challenged.
[24] Dr. François Chouinard was, at the time he swore his affidavit which is before the Court in this matter, Director, Pharmaceutical Development, at Novopharm. He attests that, as such, he is:
...responsible for supervising the development of over 20 products per year for the Canadian and U.S. markets covering all development phases from project selection to project launch.
Dr. Chouinard received a B. Pharm, in Pharmacy from the Université de Montréal in 1986. He was awarded a M.Sc. in Pharmaceutics from the same university in 1989 and a Ph. D. in Pharmaceutics, again from the same university, in 1993. Dr. Chouinard has an extensive range of publications to his credit. He was employed as a research scientist in the pharmaceutical field and later as a Director of Pharmaceutical Research from 1993 to 2001. He was first employed in the position that he occupied at the time he swore his affidavit in 2002.
THE EVIDENCE OF THE AFFIANTS
[25] Dr. Munson was requested by counsel for the Applicants to conduct experiments to determine if azithromycin dihydrate was present in bulk powder azithromycin and tablet formulations. He was provided with the bulk powder and tablet formulations by counsel and understood that each was a sample provided by Novopharm in support of Novopharm's allegation of non-infringement. He was further requested:
...to conduct a stability study to determine if the form of azithromycin in the material provided partially or completely converted to azithromycin dihydrate over time.[9]
[26] Dr. Munson used both solid-state NMR spectroscopy and powder X-ray diffraction techniques in his experimentation to determine whether or not azithromycin dihydrate was present in the samples provided to him. He performed accelerated stability studies on both the bulk powder and tablet samples provided to him to determine if the material partially or completely converted to azithromycin dihydrate over time. In support of his decision to use "accelerated" stability studies he wrote:
Because of the time-sensitive nature of this case, a choice was made to perform accelerated stability studies on both the tablet and the bulk powder. The [appropriate] guidelines suggest that the product should not fail accelerated stability studies within a 6 month period of time.[10]
[27] Dr. Munson detected no azithromycin dihydrate in the bulk powder sample provided to him. The same would appear to be true with respect to the tablet samples provided to him. However, Dr. Munson reached a conclusion less satisfactory to Novopharm following his stability studies. He wrote:
Based on my results, there is a conversion of the original form of azithromycin found in the Novopharm tablets to the dihydrate. There is nothing surprising in the fact that the tablets have shown conversion, but there is no conversion in the bulk powder. There are several processes that occur during the tableting process, e.g. milling, roller compaction, and compression, which could cause either a disordered crystal lattice or the formation of amorphous azithromycin. Both azithromycin containing a disordered crystal lattice or amorphous azithromycin would likely be more susceptible to convert into azithromycin dihydrate compared to a highly crystalline form of azithromycin. We have observed in my laboratory that aspirin which is ground will have a faster chemical decomposition rate than unground aspirin. Additionally, upon my review of the Novopharm formulation which was set out in the portion of the ANDS provided, it is clear that ... and ... are present at significant levels as excipients in the formulation. Both of these excipients either contain water or are readily hygroscopic, and could likely promote the conversion to azithromycin dihydrate in the tablets.
Based on my initial work, I strongly believe that the quantity of azithromycin dihydrate in the tablets will continue to increase over time.[11]
[28] More succinctly, Dr. Munson concludes:
"The Novopharm Product is NOT stable, because it DOES convert to azithromycin dihydrate. As such, it clearly DOES infringe upon claim 1, as the tablet formulation, upon accelerated storage conditions, does show that it will convert to the dihydrate.[12]
[29] Perhaps more importantly in the final analysis, based on the limited information available to him, Dr. Munson provided the following opinion on the process to manufacture the bulk arithromycin monohydrate that Novopharm proposes to import. He attests:
Additionally, I have reviewed the process information provided in the Novopharm ANDS materials. The desired end product from the final crystallization step is a crystalline form of azithromycin which contains ethanol and water, i.e. the form described in the [Novopharm's supplier's] patent application. However, there are likely several steps during the synthesis of crude azithromycin from desmethylazithromycin that are not detailed in the ANDA[sic]. More specifically, there are likely a series of recrystallization steps in which the crude azithromycin is purified. It is unclear which solvents are used during the purification recrystallization steps PRIOR TO the final recrystallization step. There is a strong possibility that azithromycin dihydrate may be formed during these purification recrystallization steps. It may also be possible that azithromycin dihydrate is the only form which adequately excludes from the crystal lattice impurities produced during the synthesis process. This statement is supported by the [Novopharm's supplier's] patent '426. If so, azithromycin dihydrate would be an essential intermediate in this synthesis process.
Without a better understanding of the synthesis and recrystallization process, and without having material to test after each purification recrystallization, I cannot eliminate the possibility of azithromycin dihydrate playing an important intermediate role during the synthesis, and indeed would not be surprised if this were true, considering that azithromycin dihydrate is a stable form and would be a good starting point for making the intended final product.
...sufficient information has not been provided to show that there will not be azithromycin dihydrate formed in the intermediate steps of making Novopharm's bulk azithromycin.[13]
[30] While Dr. Munson was cross-examined at some length, with particular emphasis on his accelerated conversion studies, he was not challenged with respect to his opinion expressed in the immediately foregoing quotation.
[31] Dr. Evans attests that he was provided with a sealed bottle of tablets described as the Novopharm Product and an unsealed bottle of Pfizer's ZITHROMAX® azithromycin tablets. He had been asked by counsel for Novopharm "...to conduct an x-ray diffraction test to determine if azithromycin dihydrate is present in the Novopharm tablet formulation." Dr. Evans arranged for a senior lab technician, with extensive experience operating x-ray diffraction spectrometers, to conduct x-ray diffraction tests on the two (2) samples. The senior lab technician's results were then entered by him into "our" software and a "Form A Peak Profile" was generated. Apparently Dr. Evans analyzed the result. He concludes:
Based on my review of the x-ray diffraction patterns, I conclude that there are no detectable amounts of dihydrate in the Novopharm tablet formulation.[14]
[32] While Dr. Evans was reasonably extensively cross-examined on his brief affidavit, counsel for the Applicants took the Court to only one aspect of that cross-examination, that aspect being a comparison of the results that Dr. Evans obtained from his testing and analysis with that obtained from the testing and analysis conducted by Ms. Robertson. Counsel for the Applicants suggested during the cross-examination that the samples provided to Dr. Evans and to Ms. Robertson might be from different batches and from different lots. The following exchange took place between counsel and Dr. Evans:
...
A. I don't know the history of where the samples came from.
Q. Neither do I. That is why I am asking the question.
Certainly, if they are different lots, it is a possibility that they could be different forms.
A. It could be. Again, we were provided with one batch from one lot.
Q. Fair enough.
Certainly, to have a completely positive identification, the C-13 NMR solid state and the x-ray powder diffraction should be consistent if it is the same material?
A. They should be consistent.[15]
[33] Counsel also established on cross-examination of Dr. Evans that there was at least a possibility, based upon the x-ray powder diffractogram, that the bulk material provided to Dr. Munson was a different material from the tableted material provided to Dr. Evans.[16]
[34] Ms. Robertson was cross-examined on her evidence on two occasions, the first being immediately prior to the cross-examination of Dr. Evans and the second occasion being some two months after the cross-examination of Dr. Evans. Neither counsel took me to the transcript of the cross-examination of Ms. Robertson although I note from the transcript of the second cross-examination of Ms. Robertson that the disposition of some of the tablets provided by Novopharm to her is put into doubt.
[35] Dr. Chouinard was cross-examined on his affidavit on three separate occasions, the first being the 5th of September, 2003, the second being the 18th of February, 2004 and the third being the 29th of March, 2004.
[36] Dr. Chouinard acknowledged that he had very little involvement at Novopharm with the azithromycin "project" because that "project" was well advanced by the time he joined Novopharm and "...was going well...".[17]
[37] Dr. Chouinard professed no knowledge of whether or not azithromycin dihydrate might be made during the manufacture of the bulk material used to produce Novopharm's azithromycin monohydrate tablets.[18] He remained steadfast in this position[19] to the point that counsel for the Applicants characterized his position as one of "willful blindness".
[38] The Applicants filed no responding evidence.
THE ISSUES
[39] In the Memorandum of Fact and Law filed on behalf of the Applicants, they allege that there are three (3) issues before the Court on this application. They state those issues in the following terms:
a) Whether Novopharm's allegation [that is to say, the Notice of Allegation] provides a sufficient legal and factual basis to justify its allegation of non-infringement;
b) Whether Novopharm has an evidential burden to introduce some evidence that the manufacture of its azithromycin product will not infringe the '876 Patent, and if so, whether Novopharm has met its evidential burden; and
c) Whether the samples provided by Novopharm are representative of the product it proposes to sell, considering the defects in the evidence relating to these samples.[20]
[40] In elaboration on the foregoing statement of issues, and more particularly with regard to Novopharm's allegation of non-infringement, counsel for the Applicants urges at paragraph 11 of the Applicants' Memorandum of Fact and Law:
Based on the evidence in this case, infringement may occur at a number of points in the manufacture, use and sale of the Novopharm product namely:
(a) if the dihydrate is made during the purification process during the manufacture of the bulk azithromycin;
(b) if the bulk azithromycin employed by Novopharm in making its tablets contain[s], in whole or in part, any dihydrate;
(c) if the tablets of azithromycin as made or sold by Novopharm contain in whole or in part the dihydrate; and
(d) if after manufacture of the tablets, the tablets convert to the dihydrate, in whole or in part.[21]
[41] Counsel for Novopharm described the issues somewhat differently in the following terms:
a) whether there is any evidence that dihydrate is made during the purification process during the manufacture of the bulk azithromycin;
b) whether the bulk azithromycin employed by Novopharm in making its tablets contains, in whole or in part, any dihydrate;
c) whether the tablet of azithromycin as made or sold by Novopharm contain in whole or in part the dihydrate; and
d) whether after manufacture of the tablets, the tablets convert to the dihydrate, in whole or in part.[22]
[42] Early on during the hearing of the application, Novopharm abandoned certain elements of its argument which counsel for the Applicants, and the Court agrees with counsel for the Applicants in this, interrelates with Novopharm's issue (a). In paragraphs 16 and 17 of its Memorandum of Fact and Law and in the last sentence of paragraph 18 of that memorandum, the following appears:
16. Since claim 1 covers the product itself, namely the dihydrate, it is irrelevant if dihydrate is formed or used during the manufacturing of the bulk azithromycin overseas. The evidence of Novopharm's employee, Dr. Chouinard, is that Novopharm will acquire its bulk azithromycin monohydrate from [Novopharm's supplier] ... . This bulk azithromycin monohydrate will not be manufactured in Canada. Thus, if any dihydrate is used or formed during manufacture (which is denied by Novopharm), this occurs outside Canada.
...
17. "In matters of importation, a Canadian patent cannot be infringed except by acts done in Canada, and the rights conferred by the Canadian Patent Act are limited territorially to Canada. Therefore, a person who beyond Canada, makes constructs, uses or sells the invention commits no breach of a Canadian Patent."
...
18. ... Where a process is carried out overseas, it is irrelevant if the claimed compound is made or used in that process.[23]
[43] The foregoing arguments were not pursued by counsel for Novopharm at the hearing. Nonetheless, the rebuttal to those arguments will be briefly addressed in the "analysis" portion of these reasons that follows.
[44] In the analysis that follows, these reasons will essentially follow the issues as outlined on behalf of the Applicants, except that the first two (2) issues will, to some extent, be dealt with together.
ANALYSIS
a) Sufficiency of Novopharm's Notice of Allegation and Evidential Burden
[45] As previously noted in these reasons, Novopharm's Notice of Allegation alleges that claims 1 and 5 of the '876 Patent will not be infringed by the making, constructing, using or selling by Novopharm of the Novopharm Product, that is to say Novopharm's 250 mg strength tablets for oral administration. The Notice of Allegation says absolutely nothing about the "use" by Novopharm in Canada of the bulk azithromycin monohydrate that will be imported by Novopharm, which is critical to its making, constructing, using or selling of the "Novopharm Product" and which might, during the course of manufacture, involve in an infringement of the '876 patent, if the manufacturing were done in Canada. That silence extends to the "detailed statement of the legal and factual basis of the allegation" that is included in the Notice of Allegation.
[46] Counsel for the Applicants urges that Novopharm's Notice of Allegation is insufficient. To be sufficient, counsel urges, it must speak to the manufacture of the bulk azithromycin monohydrate notwithstanding that the manufacturing is done off-shore and by another. For this proposition, counsel relies on what he refers to as the "Saccharin Doctrine", adopted from United Kingdom jurisprudence into Canadian law in American Cyanamide Co. v. Charles E Frosst & Co.[24] In American Cyanamide, Justice Noël, wrote at pages 232 and 233:
... there would appear to be some justification to find infringement where the product used as an intermediary is of importance such as we have here. As a matter of fact, infringement was found in a situation very similar to the present case, in Saccharin Corp. Ltd. v. Anglo-Continental Chemical Works, Ltd. ..., where Mr. Justice Buckley stated:
Now the grant in Letters Patent is a grant to a Patentee to make, use, exercise, and vend the invention, to have and enjoy the whole profit and advantage by reason of the invention; and to the end that he may have and enjoy the sole use and exercise and the full benefit of the invention all others are precluded from, either directly and indirectly, making use of or putting in practice the said invention, or any part of the same, or in anywise imitating the same.
And further down he added:
Does it make it any the less an infringement that the article produced and sold is manufactured by the use of the patented process which is subjected to certain other processes? In my opinion it does not. By the sale of saccharin, in the course of the production of which the patented process is used, the Patentee is deprived of some part of the whole profit and advantage of the invention, and the importer is indirectly making use of the invention.
[citation omitted]
[47] The "Saccharin Doctrine" was recently endorsed by the Supreme Court of Canada in Monsanto Canada Inc. et al v. Percy Schmeiser et al[25] where the Chief Justice and Justice Fish, for the majority, wrote at paragraph [30]:
Infringement is generally a question of fact ... . In most patent infringement cases, once the claim has been construed it is clear on the facts whether infringement has taken place: one need only compare the thing made or sold by the defendant with the claims as construed. Patent infringement cases that turn on "use" are more unusual. In those rare cases where a dispute arises on this issue, as in this case, judicial interpretation of the meaning of "use" in s. 42 of the [Patent] Act may be required. [citation omitted]
[48] The Chief Justice and Justice Fish go on at some length to determine the meaning of "use" in section 42 of the Patent Act. They cite with approval the following passage from Professor D. Vaver in Intellectual Property Law: Copyright, Patents, Trademarks (1997):
"Use" applies both to patented products and processes, and also to their output. A patent that covers a zipper-making machine or method extends to zippers made by the machine or method. Each zipper sold without authority infringes the patent, even if the zippers themselves are unpatented. This expansive doctrine applies, however, only if the patent plays an important part in production.
[49] The Chief Justice and Justice Fish continue, following the foregoing:
By analogy, then, the law holds that a defendant infringes a patent when the defendant manufactures, seeks to use, or uses a patented part that is contained within something that is not patented, provided the patented part is significant or important. In the case at bar, the patented genes and cells are not merely a "part" of the plant; rather, the patented genes are present throughout the genetically modified plant and the patented cells compose its entire physical structure. In that sense, the cells are somewhat analogous to Lego blocks: if an infringing use were alleged in building a structure with patented Lego blocks, it would be no bar to a finding of infringement that only the blocks were patented and not the entire structure. If anything, the fact that the Lego structure could not exist independently of the patented blocks would strengthen the claim, underlining the significance of the patented invention to the whole product, object, or process.
Infringement through use is thus possible even where the patented invention is part of, or composes, a broader unpatented structure or process. This is, as Professor Vaver states, an expansive rule. It is, however, firmly rooted in the principle that the main purpose of patent protection is to prevent others from depriving the inventor, even in part and even indirectly, of the monopoly that the law intends to be theirs: only the inventor is entitled, by virtue of the patent and as a matter of law, to the full enjoyment of the monopoly conferred.
Thus, in Saccharin Corp. v. Anglo-Continental Chemical Works Ld. ..., the court stated, at p. 319:
By the sale of saccharin, in the course of the production of which the patented process is used, the Patentee is deprived of some part of the whole profit and advantage of the invention, and the importer is indirectly making use of the invention.
This confirms the centrality of the question that flows from a purposive interpretation of the Patent Act: did the defendant by his acts or conduct, deprive the inventor, in whole or in part, directly or indirectly, of the advantage of the patented invention? [emphasis in the original, citation omitted]
[50] The question posed in the latter part of the final paragraph of the foregoing quotation is, counsel for the Applicants submits, directly applicable here, paraphrased, that question being whether Novopharm, if it were granted approval to market its azithromycin tablets, would, by its acts or conduct, deprive the Applicants, in whole or in part, directly or indirectly, of the advantage of the '876 Patent? Counsel submits that this issue is simply not addressed by Novopharm's Notice of Allegation.
[51] Novopharm was put on notice of this concern on behalf of the Applicants when, in the Notice of Application commencing this proceeding, it was advised:
...the detailed statement is defective in that Novopharm did not provide process information as to how its bulk azithromycin will be crystallized, ... . As part of its purification process, it is likely that azithromycin dihydrate will be made.
...
The process for the manufacture of monohydrate forms can result in the formation of some dihydrate. ...
...
In this regard, Novopharm was asked ...to provide information from its ANDS as to the process for making its azithromycin. To date, Novopharm has not provided any tablets of its proposed product nor any bulk unformulated azithromycin. Novopharm must have such bulk azithromycin and must have produced tablets in order to do its studies submitted as part of its drug submission.
...
Additionally, Novopharm has not ...provided Pfizer its manufacturing process, including the process for the manufacture of its bulk and its tableting process. In the absence of this information being provided, it should be presumed that this information would also reveal that dihydrate would be formed.
Consequently, Novopharm's allegation is not justified in that they have not ...established that the dihydrate is not made at any time in the manufacturing process. [sic] and Novopharm's allegation of non-infringement of claims 1 and 5 is not justified.
In addition, without the provision of details of its crystallization procedure, the allegation of non-infringement of claims 2 to 4 is not justified. ...[26]
[52] The foregoing concerns on behalf of the Applicants were supported by paragraphs 25 to 27 of the affidavit of Dr. Munson, which paragraphs are quoted earlier in these reasons. In Pfizer Canada Inc. v. Apotex Inc.,[27] dealing with an application similar to this in relation to the same patent, my colleague Justice Snider wrote at paragraph [32]:
In assessing the adequacy of the NOA, the following guidance can be taken from a number of decisions of the Federal Court of Appeal, including Bayer AG v. Canada (Minister of National Health and Welfare) ...; Glaxo Group Ltd. v. Canada (Minister of National Health and Welfare) ...;
- A bald assertion of non-infringement is insufficient.
- It is permissible for the second person to withhold certain information regarding its formulation until subsequent to a confidentiality order being in place.
- The NOA will be adequate if further disclosure elaborates on the basis for which the allegation of non-infringement was made such that there is sufficient evidence upon which to evaluate the allegation. [citations omitted]
[53] On the face of the Notice of Allegation underlying this proceeding, it is arguable that not even a bald assertion of non-infringement through use of Novopharm's bulk azithromycin monohydrate made outside Canada is made. Without, for the moment, stopping to rely on that alleged deficiency in the NOA alone, assuming for the moment that the NOA impliedly contains such an allegation, I will go on and look at the second and third principle derived by Justice Snider.
[54] It goes without saying, that at the time the NOA was served on Pfizer Canada, there was no confidentiality order in place. In the result, it was entirely open to Novopharm to withhold information regarding the formulation of its arithromycin monohydrate and the process of its manufacture until a confidentiality order in this matter was in place. A confidentiality order was granted by the Court. Novopharm continued to resist provision of information regarding the production outside of Canada of its azithromycin monohydrate.
[55] The Applicants applied to this Court for an Order:
...requiring Novopharm's witness, Dr. Francis Chouinard to re-attend at his own expense on the cross-examination of his affidavits [sic] dated July 15, 2003, and to produce at the said re-attendance, all relevant portions of its abbreviated new drug submission ("ANDS") for 250 mg tablets of azithromycin including the closed portions of the drug master file referred to [in the] ANDS, which is filed with the Minister of Health and which set out:
(i) The process to make bulk azithromycin; and
(ii) The pages X-X of Novopharm's parent company['s] ...drug master file referred to and incorporated by reference in the Drug Substance section of Novopharm's ANDS.[28]
[56] The Court granted the foregoing relief "... so that the Applicants may consider whether dihydrate is used or formed in the manufacture of Novopharm's azithromycin product."[29]
[57] In paragraph [18] of his reasons in support of the disclosure order, my colleague Justice Martineau wrote:
At this stage, I cannot accept Novopharm's argument to the effect that the process by which the bulk material is manufactured by a related third party ..., should not be relevant in determining whether Novopharm's allegation of non-infringement is justified. Clearly this is an issue raised in the present proceeding and it will have to be addressed and determined by the Court on its merit[s] upon a proper examination of the principles of applicable law ... . I accept the arguments brought forward by Pfizer. I consider the requested information necessary to establish the evidentiary foundation in order to allow this Court to assess the allegation of non- infringement. ...[30] [citation omitted]
[58] Novopharm complied with the Court's order to produce the relevant material, albeit it would appear from the face of the material before the Court, quite reluctantly. Dr. Chouinard re-attended on cross-examination in relation to the material produced. The record of his cross-examination on re-attendance demonstrates that he had no knowledge of the process by which Novopharm's supplier produced the bulk azithromycin monohydrate supplied to Novopharm. Indeed, the record of his cross-examination would demonstrate that, if he attempted to inform himself, he either was, or would have been, frustrated in that attempt.
[59] In Pfizer Canada Inc. v. Apotex Inc.[31], my colleague Justice Snider wrote at paragraphs [8] to [10] of her reasons:
There are two burdens of proof in legal proceedings ...:
The first is commonly referred to as the "persuasive burden" or the "legal burden". In a civil case, it is the burden of establishing a case to the civil standard of proof. The other is commonly referred to as the "evidential burden". It is the burden of putting an issue in play and means that a party has the responsibility to ensure that there is sufficient evidence of the existence or non-existence of a fact or an issue on the record to pass the threshold for that particular fact or issue.
It is well established that, in a proceeding under subsection 6(2) of the Regulations, the party who has carriage of the litigation, has the burden of proving on a balance of probabilities that a NOA is not justified ... . Further, the facts contained in the NOA and detailed statement are presumed to be true ... . For these reasons, it is clear that Pfizer bears the legal burden in these proceedings and "cannot expect to be able to make his case out of the mouth of the Respondent" ... . Pfizer, however, argues that it can succeed in these proceedings if it can demonstrate that Apotex's failure to put forward the requested samples is a failure of Apotex to meet its evidential burden.
In Pharmacia Inc. v. Canada (Minister of National Health and Welfare), ..., Justice Strayer held that the generic Respondent or second person does have an evidential burden in NOC proceedings. Justice Strayer described this burden as follows:
The generic is required, by virtue of s. 5(1), to make an allegation. The allegation made by the generic must be supported by a detailed statement of the legal and factual basis for that allegation. This allows the patentee to determine if an order for prohibition should be sought, either because the facts as set out in the detailed statement are deficient, or because the legal conclusion as to non-infringement is unsupported by the facts. At this stage, since a further and better statement cannot be compelled, concerns with the detailed statement should be highlighted. Moreover, the grounds that the patentee has for challenging the generic's notice of allegation should be advanced in the originating notice of motion filed pursuant to s. 6(1) of the Regulations. This approach flows from the dual requirements of the Federal Court Rules, Part V.1, and the legal burden on the applicants. The patentee should also present evidence to support its grounds whether such grounds are based on fact, law, mixed fact and law or opinion evidence. The generic may then be informed as to what vexes the patentee and why a prohibition order barring entry should be issued. Initially, i.e., before the Minister, the generic has raised the issue of non-infringement. At this stage, before the court, the generic now has the opportunity to file evidence supporting its detailed statement. In essence, this is the evidential burden on a respondent.
It is clear that Apotex has an evidential burden to 'put into play' the issue of non-infringement by issuing a NOA and detailed statement to Pfizer and the Minister. ... [citations omitted]
[60] To paraphrase the last sentence of the foregoing quotation, it is clear on the facts of this matter that Novopharm had an evidential burden to 'put into play' all aspects of the issue of non-infringement flowing from its issuance of a NOA and detailed statement to the Applicants and to the Minister.
[61] On the issue of adequacy or inadequacy of Novopharm's Notice of Allegation that led to the institution of this proceeding, I conclude that the Applicants must succeed and Novopharm must fail. I am satisfied that the Notice of Allegation is, on its face, inadequate or insufficient. It simply does not address the issue of infringement by Novopharm by the mere use of bulk azithromycin monohydrate that might have been produced by a process that, if it had been conducted in Canada, would be infringed the '876 Patent.
[62] To paraphrase portions of the quotation from Schmeiser[32], here Novopharm seeks to use what may well be a patented part that will be contained within something that is not patented, that is to say, Novopharm's 250 mg tablets strength azithromycin monohydrate product. The bulk azithromycin monohydrate that Novopharm proposes to import and to use would be a significant or important part of Novopharm's end product; indeed, it would appear that it would be by far the central part of that product. If this were allowed to happen, and if azithromycin dihydrate is formed in the intermediate steps for making Novopharm's bulk azithromycin, the Applicants would be deprived, indirectly, of the monopoly that the grant of the '876 Patent intends to be theirs. Its full enjoyment of the monopoly conferred would be substantially impaired.
[63] Further, and if I were found to be wrong in the foregoing conclusion, I am satisfied that Novopharm simply failed to meet the "evidential burden" on it to "put into play" the issue of non-infringement during the process of manufacture outside of Canada of the bulk azithromycin monohydrate proposed to be utilized by it.
b) Adequacy of the Samples provided for Analysis by Novopharm and Conclusions regarding Inclusion of Azithromycin Dihydrate and Conversion
[64] Counsel for the Applicants noted the uncertainty expressed in the evidence before the Court regarding the samples of bulk azithromycin monohydrate and the tableted samples provided by Novopharm to the Applicants for testing by their expert and the samples provided by Novopharm to its own experts. Based upon x-ray diffractograms of tableted material provided to Dr. Evans, of the bulk material made available to Dr. Munson, Novopharm's expert, Dr. Evans, acknowledged on cross-examination that the materials provided to Dr. Munson and to Novopharm's experts were different materials.[33] This acknowledgment, combined with the fact that Dr. Munson's testing for conversion over time of the materials provided to him was done by accelerated stability studies with the tableted materials removed from their packaging, a basis of testing that was likely the only alternative available to Dr. Munson given the timing of the delivery of the samples to him for testing, casts into doubt, at least in the mind of the Court, the evidentiary value of the testing evidence that is before the Court.
[65] Counsel for the Applicants urged that, given the limited evidentiary value of the testing evidence, when, counsel urged, the responsibility for that limited value lay clearly at the feet of Novopharm and its supplier of bulk material, I should draw a negative inference against Novopharm and reject its allegation of non-infringement. I decline to do so in light of my earlier conclusions in these reasons and in light of my conclusion that the issue of whether Novopharm's tableted material will convert over time, in whole or in part, to azithromycin dihydrate, is an issue for another day.
[66] I turn once again to the reasons of my colleague Justice Snider in Pfizer Canada Inc. v. Apotex Inc.[34] where she wrote at paragraph [71]:
Absent evidence that Apotex intends to use an inferior form of packaging for its product, it cannot be said that Pfizer has proven on a balance of probabilities that conversion will occur upon storage of Apotex's azithromycin. In this regard, I note that Apotex, in its detailed statement of December 4, 2001, stated that its product should be stored in "tight containers". Assertions by Pfizer that storage would be inadequate are not substantiated.
[67] While there was no such assertion in Novopharm's detailed statement, Dr. Chouinard, in his affidavit, describes at some length the packaging and storage conditions proposed for the Novopharm azithromycin monohydrate tablets. He concludes at paragraph 28 at his affidavit:
As set out above, the packaging and proposed storage conditions of the Novopharm product are important to a determination of how much moisture (if any) will permeate the container over the course of its shelf life and how much of that moisture will come in contact with the tablets. Therefore, the packaging and proposed storage conditions of the product are important to any determination of whether the product converts from the monohydrate to dihydrate.[35]
[68] Counsel for the Applicants urges that, if the Court is unprepared to grant the Applicants' application on the basis of the evidence of conversion or risk of conversion, it should nonetheless grant or provide a "grave consequence order" as provided in SmithKline Beecham Inc. v. Apotex Inc.[36] where Justice McGillis wrote at paragraph [40]:
I have therefore concluded that Apotex should not be prevented from taking its anhydrate tablets to market on the basis of a potential conversion to hemihydrate at some undisclosed and imprecise time in the future. In the event that Apotex's anhydrate tablets do convert to hemihydrate, in whole or in part, it will face "very grave" consequences at that point in time. ... [citations omitted]
[69] I decline to reiterate Justice McGillis's statement here. I am satisfied it goes without saying.
[70] I find, on the evidence before the Court, that Novopharm's allegation with respect to the bulk azithromycin monohydrate that it proposes to utilize stands and that the Applicants have failed to meet the persuasive or legal burden on them to establish, on a balance of probalibities, that the bulk azithromycin monohydrate contains or converts, in whole or in part to, azithromycin dihydrate.
[71] I make no finding regarding whether or not Novopharm's azithromycin monohydrate tablets will contain or will convert, during their normal shelf life, and in whole or in part, to azithromycin dihydrate. As I have said, that is an issue of another day, if indeed it will be required to be determined.
CONCLUSION
[72] In summary, I conclude that the Applicants have demonstrated that Novopharm's Notice of Allegation was inadequate and that the inadequacy was fully addressed in the Notice of Application that initiated this proceeding. While I am satisfied that it was not open to Novopharm to "patch up" its Notice of Allegation by evidence filed in this proceeding, if it was open, Novopharm failed to provide an adequate "patch", through evidence. In the result, an Order will go prohibiting the Respondent, the Minister of Health, from issuing Novopharm a Notice of Compliance in connection with 250 mg tablets for oral administration of the drug azithromycin monohydrate until after the expiration of Canadian Letters Patent No. 1,314,876.
[73] As between the Applicants and Novopharm, except where otherwise provided by an Order of this Court, the Applicants are entitled to their costs, to be calculated on the ordinary scale. If, within fourteen (14) days from the date of the Order herein, the Applicants apply to the Court for an Order that their costs be determined on a different basis, Novopharm will be entitled to serve and file a response thereto, and the Applicants to serve and file a reply to any such response, all in accordance with the Rules of this Court. Any such application may be made under Rule 369 or may be made returnable at a location and on a date and at a time satisfactory to the Court and to counsel.
[74] There will be no order as to costs either in favour of or against the Respondent, the Minister of Health.
____________________________
J.F.C.
Ottawa, Ontario
November 22, 2004
FEDERAL COURT OF CANADA
TRIAL DIVISION
NAMES OF COUNSEL AND SOLICITORS OF RECORD
COURT FILE NO.: T-74-03
STYLE OF CAUSE: PFIZER CANADA INC., and PFIZER INC. v. NOVOPHARM LIMITED and
THE MINISTER OF HEALTH
PLACE OF HEARING: Vancouver, British Columbia
DATE OF HEARING: September 22 and 23, 2004
REASONS FOR ORDER: The Honourable Mr. Justice Gibson
DATED: November 22, 2004
APPEARANCES:
Mr. Anthony Greber for the Applicant
Ms. Jennifer Wilkie
Mr. Robert Staley for the Respondent
Ms. Ruth Promislow
SOLICITORS OF RECORD:
Gowling Lafleur Henderson LLP for the Applicant
Ottawa, Ontario
Bennett Jones LLP for the Respondent
Toronto, Ontario
[1] SOR/93-133.
[2] C.R.C., c. 870.
[3] Applicants' Application Record, Volume IV, Tab 74, pages 0969 to 0971.
[4] To the same effect as the statements in this paragraph, see Pfizer Canada Inc. v. Apotex Inc. [2004] F.C. J. No. 326 (F.C.)(Q.L.) at paragraph 1; Notice of Appeal, A-119-04 filed the 7th day of March, 2004.
[5] (1997), 74 C.P.R. (3d) 307 (F.C.T.D.) at 314.
[6] Applicants' Application Record, Volume 1, Tab 3, pages 0023 and 0024.
[7] Applicants' Application Record, Volume II, Tab 18, page 0201.
[8] Applicants' Application Record, Volume II, Tab 25, pages 0225 and 0226.
[9] Applicants' Application Record, Volume 1, Tab 3, page 0025.
[10] Applicants' Application Record, Volume 1, Tab 12, page 0160.
[11] Applicants' Application Record, Volume 1, Tab 3, page 0030. Counsel for Novopharm was provided with an opportunity to comment on any issues of confidentiality raised by an unsigned version of these reasons. Counsel advised: "... The portions of the Affidavit of Eric Munson that are quoted at paragraphs [27] and [29] of the reasons for order include information regarding Novopharm's manufacturing process. Pursuant to the terms of the Protective Order, such information is to be treated confidentially". Counsel therefore submits that the quoted portions of Dr. Munson's affidavit should be "treated confidentially". Two deletions have been made from the quotation in paragraph [27]. With those deletions, the Court is satisfied that the quotations reflect no breach of the relevant confidentiality order. Rather, they reflect Dr. Munson's opinions and speculations based on his expertise and knowledge of published materials.
[12] Applicants' Application Record, Volume 1, Tab 3, page 0031.
[13] Applicants' Application Record, Volume 1, Tab 3, pages 0031 and 0032.
[14] Applicants' Application Record, Volume II, Tab 18, page 0202.
[15] Applicants' Application Record, Volume III, Tab 44, page 0397.
[16] Applicants' Application Record, Volume III, Tab 44, pages 0408 to 0410.
[17] Applicants' Application Record, Volume IV, Tab 61, page 0648.
[18] Applicants' Application Record, Volume IV, Tab 61, pages 0684 and 0685.
[19] Applicants' Application Record, Volume IV, Tab 64, page 0841 and Tab 72, page 0955 to 0960.
[20] Applicants' Application Record, Volume V, Tab 77, page 0997.
[21] Applicants' Application Record, Volume V, Tab 77, page 0999.
[22] Novopharm's Application Record, Tab 1, page 3.
[23] Novopharm's Application Record, Tab 1, page 4.
[24] (1965), 47 C.P.R. 215 (Ex. Ct.).
[25] (2004), 31 C.P.R. (4th) 16; and 2004 SCC 34.
[26] Applicants' Application Record, Volume 1, Tab 1, pages 0006 to 0008.
[27] Supra, note 4.
[28] Applicants' Application Record, Volume IV, Tab 75, page 0973.
[29] Applicants' Application Record, Volume IV, Tab 75, page 0975.
[30] Applicants' Application Record, Volume IV, Tab 75, page 0986.
[31] Supra, note 4.
[32] Supra, note 25.
[33] Applicants' Application Record, Volume III, Tab 44, pages 0408 to 0410, questions 191 to 200.
[34] Supra, note 4.
[35] Applicants' Application Record, Volume II, Tab 28, pages 0242 and 0243.
[36] (1999), 1 C.P.R. (4th) 99 (F.C.T.D.).