Date: 20000110
Docket: A-473-98
CORAM: STONE, J.A.
LINDEN, J.A.
ROTHSTEIN, J.A.
BETWEEN:
APOTEX INC., and
NOVOPHARM LIMITED
Appellants
- and -
THE MINISTER OF NATIONAL HEALTH AND WELFARE, and
THE ATTORNEY GENERAL FOR CANADA
Respondents
Heard at Toronto, Ontario, Thursday, December 16, 1999
Judgment delivered from the Bench at Toronto, Ontario
on Thursday, December 16, 1999
REASONS FOR JUDGMENT OF THE COURT BY: ROTHSTEIN J.A.
Date: 20000110
Docket: A-473-98
CORAM: STONE J.A.
LINDEN J.A.
ROTHSTEIN J.A.
BETWEEN:
APOTEX INC., and
NOVOPHARM LIMITED
Appellants
- and -
THE MINISTER OF NATIONAL HEALTH AND WELFARE, and
THE ATTORNEY GENERAL FOR CANADA
Respondents
REASONS FOR JUDGMENT OF THE COURT
(Delivered from the Bench at Toronto, Ontario
on Thursday, December 16, 1999, as edited)
ROTHSTEIN J.A.
OVERVIEW
[1] These reasons apply to Court File A-473-98 and Court File A-474-98 which are appeals from two decisions of the Trial Division, both dated July 29, 1998. They concern the Patented Medicines (Notice of Compliance) Regulations1.
[2] The appellants, who are generic drug manufacturers, say that the Patent List Register (Register) maintained by the Minister of National Health and Welfare (Minister) under subsection 3(1) of the Regulations contains patents that are not eligible for inclusion on the Register because they are for processes, intermediates or for otherwise ineligible claims and not for medicine or the use of medicine as required by paragraph 4(2)(b) of the Regulations. The appellants say that the inclusion of these ineligible patents on the Register results in unnecessary litigation under the Regulations. Such inclusion also delays their access to the market because, based on an ineligible patent, the patent holder may apply to the Federal Court to prohibit a generic manufacturer from acquiring a Notice of Compliance for its product. Once the prohibition application is filed, a statutory stay is imposed2, precluding the Minister from issuing a Notice of Compliance until the generic manufacturer can obtain from the Court an order dismissing an unmeritorious prohibition application.
[3] The appellants say that the Minister is under a duty to refuse to add or to delete ineligible patents from the Register. Accordingly, they sought mandamus and injunctive relief in the judicial review application in the Trial Division leading to Court of Appeal File A-473-98, asking the Court to order the Minister to maintain the Register in accordance with the Regulations, to enjoin the Minister from adding patents to the Register unless fully satisfied that the patent complies with the Regulations, and to order the Minister to delete ineligible patents from the Register.
[4] In the judicial review application in the Trial Division leading to Court File A-474-98, the appellants identified a specific patent, Canadian Patent 2,069,063 (the 063 patent) which they said was ineligible. In this application, they asked the Court to set aside the decision of the Minister to add the 063 patent to the Register, to require the Minister to remove the 063 patent from the Register and to require the Minister to maintain the Register in accordance with the law. They also sought a declaration that the Minister's decision to include the 063 patent on the Register was ultra vires.
DECISIONS OF THE TRIAL DIVISION
[5] In the judicial review leading to the appeal in Court File A-473-98, the learned Motions Judge found that the application before him was not a "matter" within the meaning of that term in subsection 18.1(1) of the Federal Court Act3, and that the appellants lacked standing to bring the application. On this basis, he denied the judicial review application. However, he then found, based on an adverse inference he drew from the Minister not filing evidence on the application, that had this been a "matter", and had the appellants had standing, they would have been entitled to relief in the nature of a declaration that the Minister was not maintaining the Register in accordance with law. However, he was not satisfied that mandamus or injunctive relief would have been available, and would not have granted such remedies.
[6] In the judicial review leading to the appeal in Court File A-474-98, the learned Judge found that the application did constitute a "matter", but still found that the applicants lacked standing. He declined to decide whether the 063 patent was ineligible for inclusion on the Register as the matter was not fully argued. This judicial review was also dismissed.
THE ISSUE ON THE APPEALS
[7] On these appeals, the appellants, with the consent of the respondents, amended the relief they were seeking in Court File A-473-98 to include a claim for a declaration that the Minister"s decisions to include on the Register patents containing claims to processes, intermediates, and otherwise irrelevant claims, are ultra vires .
[8] In deciding these appeals, we proceed on the basis that the question of whether or not a patent is lawfully on the Register is a "matter" within the meaning of that term in subsection 18.1(1) of the Federal Court Act. See Krause v. Canada (1999), 236 N.R. 317, at para. 21 per Stone J.A. We also will assume, without deciding, that the appellants have standing to bring the applications. The only issue then is whether they are entitled to the mandamus, injunctive or declaratory relief they seek.
NATURE OF THE MINISTER'S AUTHORITY UNDER SUBSECTION 3(1)
[9] Under subsections 3(1) and 4(1), the Minister appears to have a prima facie obligation to include on the Register a patent list submitted by a patent holder. There is then authority for the Minister to refuse to add or to delete a patent from the Register if it does not meet the requirements of section 4. Subsections 3(1) and 4(1) provide, in relevant part:
| 3. (1) The Minister shall maintain a register of any information submitted under section 4. To maintain it, the Minister may refuse to add or may delete any information that does not meet the requirements of that section. ... 4. (1) A person who files or has filed a submission for, or has been issued, a notice of compliance in respect of a drug that contains a medicine may submit to the Minister a patent list certified in accordance with subsection (7) in respect of the drug. ... |
3. (1) Le ministre tient un registre des renseignements fournis aux termes de l'article 4. À cette fin, il peut refuser d'y ajouter ou en supprimer tout renseignement qui n'est pas conforme aux exigences de cet article. 4. (1) La personne qui dépose ou a déposé une demande d'avis de conformité pour une drogue contenant un médicament ou qui a obtenu un tel avis peut soumettre au ministre une liste de brevets à l'égard de la drogue, accompagnée de l'attestation visée au paragraphe (7). |
[10] Paragraph 4(2)(b) provides that a patent submitted in respect of a drug must contain a claim for the medicine itself or a claim for the use of the medicine. The appellants' complaint is that the Minister has added patents to the Register that contain only process claims, claims for intermediates or irrelevant claims, none of which meet the requirements of paragraph 4(2)(b). Paragraph 4(2)(b) of the Regulations provides:
| 4. (2) A patent list submitted in respect of a drug must ... (b) set out any Canadian patent that is owned by the person, or in respect of which the person has an exclusive licence or has obtained the consent of the owner of the patent for the inclusion of the patent on the patent list, that contains a claim for the medicine itself or a claim for the use of the medicine and that the person wishes to have included on the register ... |
4. (2) La liste de brevets au sujet de la drogue doit contenir les renseignements suivants : ... b) tout brevet canadien dont la personne est propriétaire ou à l'égard duquel elle détient une licence exclusive ou a obtenu le consentement du propriétaire pour l'inclure dans la liste, qui comporte une revendication pour le médicament en soi ou une revendication pour l'utilisation du médicament, et qu'elle souhaite voir inscrit au registre ... |
The appellants rely on Deprenyl Research Ltd. v. Apotex Inc. (1995), 60 C.P.R. (3d) 501 (F.C.A.) that process claims are not eligible for inclusion on the Register as they are not claims for the medicine itself or the use of the medicine in accordance with paragraph 4(2)(b) of the Regulations. They also rely on Eli Lilly and Co. v. Apotex Inc. (1996), 68 C.P.R. (3d) 126 (F.C.A.) that intermediate claims are not claims for the medicine itself or for the use of the medicine. They say the Minister is under a duty to refuse to add or to delete such patents from the Register.
[11] The Minister is under a mandatory duty under subsection 3(1) to maintain the Register. However, by reason of the term "may refuse to add or may delete" in subsection 3(1), the Minister's authority to refuse to add or to delete a patent is discretionary. It is clear that the Governor in Council did not impose a mandatory duty on the Minister under subsection 3(1) to refuse to add or to delete patents. The Minister says this was because of the prima facie obligation placed on him under subsection 3(1) to maintain a Register of information submitted under subsection 4(1), i.e. a patent list submitted under subsection 4(1). Whether or not a patent was eligible for inclusion on the Register could, in some cases, be difficult to determine and the Minister was thought by the Governor in Council to require flexibility in dealing with when and whether he should refuse to add or to delete such patents. Without addressing, at this point, the validity of the Minister's argument, it is clear that the Minister's authority to refuse to add or to delete patents from the Register under subsection 3(1) is discretionary.
[12] There being no mandatory duty on the Minister to refuse to add or to delete patents from the Register under subsection 3(1), there is no basis for the mandamus, injunctive or declaratory relief as sought by the appellants. See Apotex Inc. v. Canada (Attorney General) (C.A.), [1994] 1 F.C. 742, at 766 per Robertson J.A.4
[13] What this then leaves is the question of whether the Minister was unlawfully exercising or declining to exercise his discretion to refuse to add or to delete patents from the Register. Arguably, mandamus, injunctive or even declaratory relief might be available in such circumstances. In Baker v. Canada (M.C.I.) (1999), 174 D.L.R. (4th) 193, at para. 53, L'Heureux-Dubé J. observes that traditionally, discretionary decisions can only be reviewed on limited grounds such as the bad faith of the decision-maker, the exercise of discretion for an improper purpose or the use of irrelevant considerations. A general doctrine of unreasonableness had also sometimes been applied to discretionary decisions. She continues that discretionary decisions must be made within the bounds of jurisdiction conferred by the statute but that considerable deference will be afforded to decision-makers by the courts in reviewing the exercise of that discretion and the scope of the decision-makers' jurisdiction.
[14] We are not satisfied that there are grounds in this case for the Court interfering with the exercise of discretion by the Minister. There are two reasons for our coming to this conclusion. The first is based on the evidence and the second relates to the scheme of the Regulations.
1. Evidence
[15] First, there was evidence that with respect to process patents or other irrelevant patents not eligible for inclusion on the Register and which were easy to identify, the Minister had sent letters to the patent holders and had taken steps to remove such ineligible patents and continues to do so. However, the eligibility of patents for intermediates, in respect of which justification for deletion from the Register may not be as obvious as with process or irrelevant patents, would appear to require more significant analysis. The Minister says that to determine whether a patent for an intermediate is ineligible for inclusion on the Register, the patent must be examined to determine if it only claims an intermediate. He then says that it must be determined if the intermediate has therapeutic value, and if so, the relevance of any therapeutic value it may have.
[16] The Minister refers to Eli Lilly and Co. v. Apotex Inc. (1996), 68 C.P.R. (3d) 126, in which Hugessen J.A. (as he then was) stated at page 128:
| Since there is no question that the intermediates here in issue are neither intended nor capable of being used for diagnosis, treatment, etc., it follows that they are not medicines and that the appeal must be dismissed with costs. |
The Minister says that the inference to be drawn from the comments of Hugessen J.A. is that if an intermediate is capable of being used for diagnosis or treatment, it may be a medicine within the meaning of paragraph 4(2)(b) of the Regulations and be entitled to be included on the Register.
[17] The Appellants say that whether or not an intermediate has therapeutic value is irrelevant. As an intermediate, it does not meet the requirements of paragraph 4(2)(b). They rely upon Hoffmann-La Roche v. Canada (Minister of National Health and Welfare) (1994), 79 C.P.R. (3d) 486, at para. 3, per Jerome A.C.J., affd. (1999) 86 C.P.R. (3d) 187, at para. 12, per Strayer J.A. The reasons of Strayer J.A. state in part:
| We think it sufficient to conclude that in our view, the learned Motions Judge was entitled to so find, and was correct in so finding, on the evidence before him. |
The finding of the Motions Judge to which Strayer J.A. was referring was that the claims in certain patents before him were claims to intermediates or processes and not claims for the medicine itself. This finding was apparently based on the evidence before the Motions Judge. Neither the Motions Judge nor Strayer J.A. decided that, as a matter of law, an intermediate does not meet the requirements of paragraph 4(2)(b).
[18] For the purpose of this appeal, it is sufficient that there is no definitive finding that intermediates cannot, in any circumstances, meet the requirements of paragraph 4(2)(b). It is certainly arguable that an intermediate with therapeutic value might be a medicine. Accordingly, the Minister cannot be faulted for having the view that taking into account the therapeutic value of intermediates is a relevant consideration as to whether a patent meets the requirements of paragraph 4(2)(b) and for not summarily deleting patents for intermediates from the Register under subsection 3(1).
[19] In this respect, the learned Motions Judge inferred from the evidence before him that cost and difficulty could not be major considerations in determining whether patents were ineligible for inclusion on the Register and that therefore, the Minister was not maintaining the Register in accordance with the Regulations. However, it seems to us that unless and until it is decided that the therapeutic value of intermediates is irrelevant for purposes of eligibility of the intermediate patent for inclusion on the Register, the assessment of intermediate patents for eligibility is a more significant undertaking than with respect to process or other irrelevant patents.
[20] In Court File A-474-98, the Motions Judge declined to decide whether the 063 patent was or was not eligible for inclusion on the Register because the matter was not fully argued. The matter was not argued at all before this Court, and we too decline to determine whether or not that patent is eligible.
[21] On the evidence in both appeals, we are not satisfied the Minister has unlawfully refused to exercise his discretion to delete intermediate or other patents from the Register.
2. Scheme of the Regulations
[22] Our second reason for not interfering with the discretion exercised by the Minister in this case relates to the scheme of the Regulations themselves. The Regulations expressly provide a process by which generic manufacturers may obtain relief in the event they are prejudiced by reason of ineligible patents being included on the Register. Subsection 6(1) and paragraph 6(5)(a) provide in relevant part:
| 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. ... (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 ... |
6. (1) La première personne peut, dans les 45 jours après avoir reçu signification d'un avis d'allégation aux termes des alinéas 5(3)b) ou c), demander au tribunal de rendre une ordonnance interdisant au ministre de délivrer un avis de conformité avant l'expiration du brevet visé par l'allégation. ... (5) Lors de l'instance relative à la demande visée au paragraphe (1), le tribunal peut, sur requête de la seconde personne, rejeter la demande si, selon le cas: a) il estime que les brevets en cause ne sont pas admissibles à l'inscription au registre ou ne sont pas pertinents quant à la forme posologique, la concentration et la voie d'administration de la drogue pour laquelle la seconde personne a déposé une demande d'avis de conformité ... |
[23] It is apparent that in enacting paragraph 6(5)(a) of the Regulations, the Governor in Council was aware of, and allowed for, the possibility that ineligible patents may find their way onto the Register and may not be readily capable of being deleted under subsection 3(1). Paragraph 6(5)(a) provides generic drug manufacturers with the opportunity, if and when prohibition proceedings are commenced by a patent holder in respect of a Notice of Allegation served by the generic, to apply to the Court to dismiss the prohibition application because it is based on an ineligible patent included on the Register.
[24] This form of relief may not be a perfect solution for the generic manufacturers because, as appellants" counsel pointed out, the prohibition application will only be dismissed if all the patents at issue are not eligible for inclusion on the Register and because the proceeding does not provide for a court order requiring the Minister to purge the Register of ineligible patents. However, the remedy provided by paragraph 6(5)(a) does directly address the problem of a generic manufacturer having to compare its product with the drug of a patent holder whose drug is based on an ineligible patent. It provides a judicial forum in which the eligibility of the specific patent or patents at issue can be decided by the Court after hearing from the patent holder and the generic competitor.
[25] Paragraph 6(10)(b) of the Regulations provides:
| 6(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: ... (b) the inclusion on the certified patent list of a patent that should not have been included under section 4 ... |
6(10) Lorsque le tribunal rend une ordonnance relative aux dépens, il peut tenir compte notamment des facteurs suivants : ... b) l'inscription, sur la liste de brevets qui fait l'objet d'une attestation, de tout brevet qui n'aurait pas dû y être inclus aux termes de l'article 4 ... |
Again, it is apparent that the Regulations contemplate that ineligible patents may be included on the Register and a remedy in costs is provided when unnecessary proceedings have taken place on the basis of an ineligible patent.
[26] Section 8 of the Regulations provides:
| 8. (1) If an application made under subsection 6(1) is withdrawn or discontinued by the first person or is dismissed by the court hearing the application or if an order preventing the Minister from issuing a notice of compliance, made pursuant to that subsection, is reversed on appeal, the first person is liable to the second person for any loss suffered during the period (a) beginning on the date, as certified by the Minister, on which a notice of compliance would have been issued in the absence of these Regulations, unless the court is satisfied on the evidence that another date is more appropriate; and (b) ending on the date of the withdrawal, the discontinuance, the dismissal or the reversal. (2) A second person may, by action against a first person, apply to the court for an order requiring the first person to compensate the second person for the loss referred to in subsection (1). (3) The court may make an order under this section without regard to whether the first person has commenced an action for the infringement of a patent that is the subject matter of the application. (4) The court may make such order for relief by way of damages or profits as the circumstances require in respect of any loss referred to in subsection (1). (5) In assessing the amount of compensation the court shall take into account all matters that it considers relevant to the assessment of the amount, including any conduct of the first or second person which contributed to delay the disposition of the application under subsection 6(1). |
8. (1) Si la demande présentée aux termes du paragraphe 6(1) est retirée ou fait l'objet d'un désistement par la première personne ou est rejetée par le tribunal qui en est saisi, ou si l'ordonnance interdisant au ministre de délivrer un avis de conformité, rendue aux termes de ce paragraphe, est annulée lors d'un appel, la première personne est responsable envers la seconde personne de toute perte subie au cours de la période: a) débutant à la date, attestée par le ministre, à laquelle un avis de conformité aurait été délivré en l'absence du présent règlement, sauf si le tribunal estime d'après la preuve qu'une autre date est plus appropriée; b) se terminant à la date du retrait, du désistement ou du rejet de la demande ou de l'annulation de l'ordonnance. (2) La seconde personne peut, par voie d'action contre la première personne, demander au tribunal de rendre une ordonnance enjoignant à cette dernière de lui verser une indemnité pour la perte visée au paragraphe (1). (3) Le tribunal peut rendre une ordonnance aux termes du présent article sans tenir compte du fait que la première personne a institué ou non une action pour contrefaçon du brevet visé par la demande. (4) Le tribunal peut rendre l'ordonnance qu'il juge indiquée pour accorder réparation par recouvrement de dommages-intérêts ou de profits à l'égard de la perte visée au paragraphe (1). (5) Pour déterminer le montant de l'indemnité à accorder, le tribunal tient compte des facteurs qu'il juge pertinents à cette fin, y compris, le cas échéant, la conduite de la première personne ou de la seconde personne qui a contribué à retarder le règlement de la demande visée au paragraphe 6(1). |
[27] Paragraph 8(1)(a) specifically provides that a patent holder whose prohibition application is dismissed is liable for the loss suffered by a generic manufacturer for the delay incurred in the issuance of a Notice of Compliance to the generic by reason of the prohibition application. Under subsection 8(4), the Court has been given jurisdiction to make an award of damages or lost profits. Section 8 of the Regulations makes it apparent that the Governor in Council recognized that generic manufacturers could be subject to unjustified prohibition applications, including applications based upon ineligible patents on the Register and provided a remedy in the form of an award of damages or lost profits in such circumstances.
[28] In sum, there is a comprehensive scheme provided in the Regulations which specifically addresses ineligible patents on the Register and the costs, loss and damage suffered by generic manufacturers arising from such ineligible patents being included on the Register. Having regard to the scheme and its recognition that ineligible patents may be included on the Register, it follows that there is no unlawful refusal to exercise discretion by the Minister in not deleting such patents from the Register under subsection 3(1).
CONCLUSION
[29] Although ineligible patents may be included on the Register, there is no duty on the Minister to delete such patents and no unlawful refusal to exercise discretion by the Minister in not deleting such patents under subsection 3(1) and, therefore, no basis for mandamus or injunctive relief. Nor is there a basis for a declaration that decisions by the Minister to include the 063 patent or other allegedly ineligible patents on the Register are ultra vires.
[30] In coming to this conclusion, we are not unmindful of prior jurisprudence which might be interpreted to place upon the Minister a mandatory duty to delete ineligible patents from the Register under subsection 3(1) of the Regulations as it read prior to the amendments to the Regulations brought into force on March 12, 1998. See, for example Merck Frosst Canada Inc. v. Canada (Minister of National Health and Welfare), [1997] 3 F.C. 752, at 779, per Nadon J., Novopharm Ltd. v. Canada (Minister of National Health and Welfare) (1998), 78 C.P.R. (3d) 54, at para. 19 and 20, per Hugessen J. However, the March 12, 1998 Regulations have clarified the discretionary nature of the Minister's authority under subsection 3(1). In our respectful opinion, the March 12, 1998 Regulations have superseded those prior decisions.
[31] The appeals in Court Files A-473-98 and A-474-98 will be dismissed with costs.
"Marshall Rothstein"
J.A.
__________________1 The Regulations were first enacted March 12, 1993 by P.C. 1993-502, SOR/93-133. They were amended March 12, 1998 by P.C. 1998-366, SOR/98-166. Although the applications for judicial review were filed prior to March 12, 1998, the Motions Judge considered the amendments to the Regulations enacted March 12, 1998. It was agreed that the appeals would be argued on the basis of the Regulations as amended March 12, 1998.
2 Under paragraph 7(1)(e) of the Regulations, of up to 24 months.
3 R.S.C. 1985, c. F-7 as amended. Subsection 18.1(1) provides: 18.1 (1) An application for judicial review may be made by the Attorney General of Canada or by anyone directly affected by the matter in respect of which relief is sought. 18.1 (1) Une demande de contrôle judiciaire peut être présentée par le procureur général du Canada ou par quiconque est directement touché par l'objet de la demande.