Date: 20000612
Docket: A-692-99
OTTAWA, Ontario, Monday, June 12, 2000.
CORAM: STONE J.A.
ROTHSTEIN J.A.
EVANS J.A.
BETWEEN:
AB HASSLE and ASTRA PHARMA INC.
Appellants
(Applicants)
- and -
THE MINISTER OF NATIONAL HEALTH AND WELFARE,
GENPHARM INC. and TAKEDA CHEMICAL INDUSTRIES, LTD.
Respondents
(Respondents)
JUDGMENT
The appeal is allowed, the judgment of the Trial Division of October 25, 1999 is set aside and it is ordered that the respondent shall not rely on any of the prior art listed or otherwise identified in the affidavit of James Steven Rowe sworn the 9th day of September 1999 in arguing in this proceeding that the "693 and "891 Patents are invalid for obviousness.
"A.J. Stone"
J.A.
Date: 20000612
Docket: A-692-99
CORAM: STONE J.A.
ROTHSTEIN J.A.
EVANS J.A.
BETWEEN:
AB HASSLE and ASTRA PHARMA INC.
Appellants
(Applicants)
- and -
THE MINISTER OF NATIONAL HEALTH AND WELFARE,
GENPHARM INC. and TAKEDA CHEMICAL INDUSTRIES, LTD.
Respondents
(Respondents)
Heard at Toronto, Ontario, on Tuesday, May 16, 2000.
Judgment rendered at Ottawa, Ontario, on Monday, June 12, 2000.
REASONS FOR JUDGMENT BY: STONE J.A.
CONCURRED IN: ROTHSTEIN J.A.
EVANS J.A.
Date: 20000612
Docket: A-692-99
CORAM: STONE J.A.
ROTHSTEIN J.A.
EVANS J.A.
BETWEEN:
AB HASSLE and ASTRA PHARMA INC.
Appellants
(Applicants)
- and -
THE MINISTER OF NATIONAL HEALTH AND WELFARE,
GENPHARM INC. and TAKEDA CHEMICAL INDUSTRIES, LTD.
Respondents
(Respondents)
REASONS FOR JUDGMENT
STONE J.A.
[1] This is an appeal from an order of the Trial Division of October 25, 1999, dismissing the appellants" motion for an order that in responding to the appellants" application for prohibition under section 6 of the Patented Medicines (Notice of Compliance) Regulations adopted March 12, 1993 (P.C. 1993-502) and amended March 12, 1998 (P.C. 1998-366) (the "Regulations") pursuant to the Patent Act Amendment Act, 1992 , S.C. 1993, c. 2, the respondent Genpharm Inc. (the "respondent") be limited to relying on those documents of prior art as are listed in its detailed statement made pursuant to paragraph 5(3)(a ) of the Regulations in support of its allegation that Canadian Patent No. 1,292,693 (the ""693 Patent") and Canadian Patent No. 1,302,891 (the ""891 Patent") are invalid for anticipation and/or obviousness.
[2] The issue to be determined in this appeal involves the interpretation of certain of the provisions of the Regulations. Those provisions become relevant whenever a person wishes to secure from the Minister of National Health and Welfare a Notice of Compliance ("NOC") under section C.08.004 of the Food and Drug Regulations , C.R.C. 1978, c. 870. The NOC allows the person who possesses it to make, construct, use or sell a drug that contains a medicine in Canada. The Regulations lay down a procedure whereby a patentee faced with the filing of a submission for an NOC by another person may seek to prevent the Minister from issuing the NOC to that person.
[3] The underlying purpose of the 1993 legislation was aptly described by Mahoney J.A. in Bayer AG v. Canada (Minister of National Health and Welfare) (1993), 51 C.P.R. (3d) 329, at 331-332:
| It introduced a new regime whereby, with exceptions for the development of information for regulatory purposes and stockpiling in anticipation of the expiration of a patent, the monopoly rights of a patentee of a medicine are preserved. A medicine cannot be marketed in Canada without a NOC issued by the respondent Minister. If an applicant for a NOC wishes to rely on the previous issuance of an NOC to another, the question whether or not the making or marketing of the medicine under authority of the second NOC would infringe patent rights of the holder of the earlier NOC must now be resolved before the second issues. |
Relevant regulatory provisions
[4] It will be useful at this point to make more detailed reference to such of the provisions of the Regulations as are relevant. In the present case, the appellants are a "first person" and the respondent a "second person" as defined in section 2 of the Regulations by reference to the persons referred to in subsections 4(1) and 5(1), respectively. Sections 4, 5, 6 and 7 of the Regulations come into play. They read:
| 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. (2) A patent list submitted in respect of a drug must
(3) Subject to subsection (4), a person who submits a patent list must do so at the time the person files a submission for a notice of compliance. (4) A first person may, after the date of filing of a submission for a notice of compliance and within 30 days after the issuance of a patent that was issued on the basis of an application that has a filing date that precedes the date of filing of the submission, submit a patent list, or an amendment to an existing patent list, that includes the information referred to in subsection (2). (5) When a first person submits a patent list or an amendment to an existing patent list in accordance with subsection (4), the first person must identify the submission to which the patent list or the amendment relates, including the date on which the submission was filed. (6) A person who submits a patent list must keep the list up to date but may not add a patent to an existing patent list except in accordance with subsection (4). |
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| (7) A person who submits a patent list or an amendment to an existing patent list under subsection (1) or (4) must certify that
5. (1) Where a person files or has filed a submission for a notice of compliance in respect of a drug and wishes to compare that drug with, or make reference to, 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 on the register in respect of the other drug,
(2) Where, after a second person files a submission for a notice of compliance, but before the notice of compliance is issued, a patent list or an amendment to a patent list is submitted in respect of a patent pursuant to subsection 4(4), the second person shall amend the submission to include, in respect of that patent, the statement or allegation that is required by subsection (1). (3) Where a person makes an allegation pursuant to paragraph (1)(b) or subsection (2) the person shall
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
(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) 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,
(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:
7. (1) The Minister shall not issue a notice of compliance to a second person before the latest of
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(2) Paragraph (1)(e) does not apply if at any time, in respect of each patent that is the subject of an application pursuant to subsection 6(1),
(3) Paragraphs (1)(c), (d) and (e) do not apply in respect of a patent if the owner of the patent has consented to the making, constructing, using or selling of the drug in Canada by the second person. (4) Paragraph (1)(e) ceases to apply in respect of an application under subsection 6(1) if the application is withdrawn or discontinued by the first person or is dismissed by the court hearing the application. (5) If the court has not yet made an order under subsection 6(1) in respect of an application, the court may
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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). (2) La liste de brevets au sujet de la drogue doit contenir les renseignements suivants :
(3) Sous réserve du paragraphe (4), la personne qui soumet une liste de brevets doit le faire au moment du dépôt de la demande d'avis de conformité. (4) La première personne peut, après la date de dépôt de la demande d'avis de conformité et dans les 30 jours suivant la délivrance d'un brevet qui est fondée sur une demande de brevet dont la date de dépôt est antérieure à celle de la demande d'avis de conformité, soumettre une liste de brevets, ou toute modification apportée à une liste de brevets, qui contient les renseignements visés au paragraphe (2). (5) Lorsque la première personne soumet, conformément au paragraphe (4), une liste de brevets ou une modification apportée à une liste de brevets, elle doit indiquer la demande d'avis de conformité à laquelle se rapporte la liste ou la modification, en précisant notamment la date de dépôt de la demande. (6) La personne qui soumet une liste de brevets doit la tenir à jour mais ne peut ajouter de brevets à une liste que si elle le fait en conformité avec le paragraphe (4). (7) La personne qui soumet une liste de brevets ou une modification apportée à une liste de brevets aux termes des paragraphes (1) ou (4) doit remettre une attestation portant que :
5. (1) Lorsqu'une personne dépose ou a déposé une demande d'avis de conformité pour une drogue et souhaite en faire la comparaison, ou faire renvoi, à une autre drogue qui a été commercialisée au Canada aux termes d'un avis de conformité délivré à la première personne et à l'égard de laquelle une liste de brevets a été soumise, elle doit inclure dans la demande, à l'égard de chaque brevet inscrit au registre qui se rapporte à cette autre drogue :
(2) Lorsque, après le dépôt par la seconde personne d'une demande d'avis de conformité mais avant la délivrance de cet avis, une liste de brevets ou une modification apportée à une liste de brevets est soumise à l'égard d'un brevet aux termes du paragraphe 4(4), la seconde personne doit modifier la demande pour y inclure, à l'égard de ce brevet, la déclaration ou l'allégation exigée par le paragraphe (1). (3) Lorsqu'une personne fait une allégation visée à l'alinéa (1)b) ou au paragraphe (2), elle doit :
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. (2) Le tribunal rend une ordonnance en vertu du paragraphe (1) à l'égard du brevet visé par une ou plusieurs allégations si elle conclut qu'aucune des allégations n'est fondée. (3) La première personne signifie au ministre, dans la période de 45 jours visée au paragraphe (1), la preuve que la demande visée à ce paragraphe a été faite. (4) Lorsque la première personne n'est pas le propriétaire de chaque brevet visé dans la demande mentionnée au paragraphe (1), le propriétaire de chaque brevet est une partie à la demande.
(6) Aux fins de la demande visée au paragraphe (1), lorsque la seconde personne a fait une allégation aux termes du sous-alinéa 5(1)b)(iv) à l'égard d'un brevet et que ce brevet a été accordé pour le médicament en soi préparé ou produit selon les modes ou procédés de fabrication décrits en détail et revendiqués ou selon leurs équivalents chimiques manifestes, la drogue que la seconde personne projette de produire est, en l'absence d'une preuve contraire, réputée préparée ou produite selon ces modes ou procédés. (7) Sur requête de la première personne, le tribunal peut, au cours de l'instance :
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| (8) Tout document produit aux termes du paragraphe (7) est considéré comme confidentiel.
(10) Lorsque le tribunal rend une ordonnance relative aux dépens, il peut tenir compte notamment des facteurs suivants :
7. (1) Le ministre ne peut délivrer un avis de conformité à la seconde personne avant la plus tardive des dates suivantes :
(2) L'alinéa (1)e) ne s'applique pas si, à l'égard de chaque brevet visé par une demande au tribunal aux termes du paragraphe 6(1) :
(3) Les alinéas (1)c), d) et e) ne s'appliquent pas à l'égard d'un brevet si le propriétaire de celui-ci a consenti à ce que la seconde personne utilise, fabrique, construise ou vende la drogue au Canada. (4) L'alinéa (1)e) cesse de s'appliquer à l'égard de la demande visée au paragraphe 6(1) si celle-ci est retirée ou fait l'objet d'un désistement par la première personne ou est rejetée par le tribunal qui en est saisi. (5) Lorsque le tribunal n'a pas encore rendu d'ordonnance aux termes du paragraphe 6(1) à l'égard d'une demande, il peut :
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[5] Section 8 of the Regulations renders a first person liable to compensate a second person for loss suffered by that person in the circumstances described in that section. The section reads:
| 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
(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 :
(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). |
Factual background
[6] The background of the present dispute may be briefly summarized.
[7] By letter of March 26, 1999, expressly stated to be a "Notice of Allegation & Detailed Statement Pursuant to Section 5(3)(a) of the Patented Medicines (Notice of Compliance) Regulations", the respondent wrote to the appellant Astra Pharma Inc. in the following terms:
| Re: New Drug Submission for Omeprazole Capsules, 10mg and 20mg |
| This constitutes Genpharm Inc."s ("Genpharm") Notice of Allegation and Detailed Statement of the legal and factual basis for the allegations appearing in Genpharm"s Declarations Re: Patent List (Form V"s) which we are filing with respect to the above identified drug, as required by the Patented Medicines (Notice of Compliance) Regulations. |
| The Allegation |
| The following patents are listed by you with respect of the drug Omeprazole Magnesium: |
| Patent No. Expiry Date |
| ... ... |
| 1292693 Dec. 03, 2008 |
| 1302891 Jun. 09, 2009 |
| ... ... |
| Legal and Factual Basis for the Allegation |
| ... |
| 5) Canadian Patent No. 1,292,693 |
| Canadian Patent No. 1,292,693 (the "693 patent) is directed to and claims pharmaceutical preparations containing omeprazole. The claims in the "693 patent require that the core contain the active ingredient. The patent also specifies that an inert subcoating be applied to the core and that an enteric coating be applied to the subcoated core. Genpharm"s capsules contain multiple pellets, each of which has a core. The active compound in Genpharm"s capsules is sprayed onto the inert pellet cores. A protective layer is then added to the coated cores. An enteric layer is then added to the protective layer. Therefore, Genpharm"s capsules do not have a core as recited in the claims of the "693 patent. Instead, the core is inert and simply provides a vehicle onto which layers are applied. Therefore, the patent would not be infringed by the making, constructing, using or selling by Genpharm of the drug for which the submission for Notice of Compliance is filed. |
| Further, all claims of the "693 patent are either anticipated or obvious having regard to the prior art, including that listed and described below. |
| (1) EP 124 495 by Aktiebolget Hassle, published on November 11, 1984 (the "495 patent); |
| (2) A. Pilbrant and C. Cederberg, Scand. J. of Gastroenterology, vol. 20, supplement 108, pp. 113-120 (1985) ("Pilbrant"); |
| (3) G. Rackur et al, Biochemical and Biophysical Research Communications, vol. 108, no. 1, pp. 477-484 (1985) ("Rackur"); |
| (4) "The Production of Pharmaceuticals", vol. 1, K. Tsuda and H. Nogami (eds.) (1971) ("Tsuda"); |
| (5) Brochure on "Hydroxypropyl Methylcellulose TC-5", Shin-Etsu Chemical Co. (1975) (English translation) ("Shin-Etsu"); |
| (6) "Up-to-Date Pharmaceutical Technology Series No. 1: Coating of Drugs", K. Kakemi (ed.), Jiji Printing Co. Ltd. (1969) (English translation) ("Kakemi"); |
| (7) FMC Aqueric" brochure (1986); |
| (8) DE 32 33 764 by Scherer GmbH, published March 15, 1984 (English abstract) (the "764 patent); |
| (9) G.B. 1,499,078 to Green Cross, issued January 25, 1978 (the "078 patent); |
| (10) U.S. Patent No. 4,150,111 to A. Warren and W.H. Davis, issued April 17, 1979 (the "111 patent); and |
| (11) U.S. Patent No. 4,255,431 to Junggren et al., issued March 10, 1981 (the "431 patent). |
| The "495 patent discloses formulations with alkaline salts of omeprazole wherein the cations include lithium, sodium, potassium, magnesium calcium, titanium and quaternary ammonium ions. The "495 patent indicates that the alkaline salt form of omeprazole exhibits improved stability during storage and that the magnesium and calcium salts are especially preferred when preparing tablets. The formulations of the "495 patent are used for the prevention and treatment of gastrointestinal diseases in mammals such as man by inhibiting gastric acid secretion. |
| The "495 patent recognizes the problem of administering omeprazole. Since omeprazole is susceptible to degradation in acid-to-neutral media, the "495 patent recommends enterically coating granules or tablets to prevent omeprazole from being degraded in the stomach. |
| Example 12 of the "495 patent relates to an enterically coated tablet containing the magnesium salt of omeprazole. In this example, the magnesium salt is mixed with lactose and granulated with methyl collulose. After drying, the granulate is mixed with polyvinylpyrrolidone and magnesium stearate. The granulate is then pressed into a tablet, and the tablet is sprayed with a solution of cellulose acetate phthalate and cetyl alcohol in isopropanol/methylene chloride. |
| The "495 patent discloses a pharmaceutical preparation in which omeprazole salt is contained in a core. A subcoating is applied to the core, and an enteric coating is later applied. Moreover, the "495 patent states that its formulations may be used to treat gastric diseases. |
| Any claims of the "693 patent that are not anticipated by the "495 patent are rendered obvious by it, taken alone or in combination with other prior art. For instance, Pilbrant notes that omeprazole is acid labile and teaches, associating omeprazole with a pH buffering substance, such as sodium bicarbonate. Pilbrant recommends administering omeprazole in a controlled-released (enterically coated) pellet formulation. Accordingly, a person having ordinary skill in the art would realize that omeprazole could the stabilized not only by formulating the compound in its base form, as taught by the "495 patent, but also by adding an alkaline reacting compound, such as sodium bicarbonate. |
| In view of the problem associated with using omeprazole, a person having ordinary skill in the art would recognize that adding an intermediate layer between an enteric layer and an active core would reduce the probabillity of omeprazole reacting with acidic groups in the enteric coat. The "495 patent teaches coating the active ingredients with polyvinyl pyrolidone before applying the enteric coat. The disclosures of Tsuda, Shin-Etsu, FMC and Kakemi demonstrate that separating an acid-labile or alkaline-containing core from an enteric coat with a polymer such as HPMC was well known in the art. |
| For at least these reasons, the claims of the "693 patent are invalid due to anticipation and/or obviousness. |
| 6) Canadian Patent No. 1,302,891 |
| Canadian Patent No. 1,302,891 (the "891 patent) describes a pharmaceutical pareparation similar to that disclosed in the "693 patent. The claims in the "891 patent requires that the core contain the active ingredient. The claims specify that an inert subcoating be applied to the core and that an enteric coating be applied to the subcoated core. For the same reasons as stated with respect to the "693 patent, the medicine would not be infringed by the making, constructing, using or selling by Genpharm of the drug for which the submission for Notice of Compliance is filed. |
| Further, for the same reasons as expressed with respect to the "693 patent, the patent is invalid. |
...
[8] As will be seen from that letter, the respondent alleged in accordance with paragraph 5(1)(b) of the Regulations that the making, constructing, using or selling of the drug by it would not infringe either the "693 or "891 Patent or, further, that both of those patents are not valid for anticipation or obviousness. Paragraph 5(3)(a ) of the Regulations required the respondent to set forth in its detailed statement "the legal and factual basis for the allegation" made pursuant to paragraph 5(1)(b ). The respondent"s letter of March 26, 1999 purports to comply with that requirement. The appellants had then to decide within the 45 day time limit imposed by subsection 6(1) of the Regulations whether to resist the issuance of the NOC or to raise no objection.
[9] On May 10, 1999, the appellants filed a Notice of Application in the Trial Division pursuant to section 6 of the Regulations seeking to prohibit the Minister from issuing the NOC to the respondent. Such an application is regulated by the rules of practice and procedure governing applications contained in Part 5 of the Federal Court Rules, 1998. On June 7, 1999, the Prothonotary at Toronto made an order on consent setting a schedule for completion of the interlocutory steps in the section 6 proceeding. The schedule called for the appellants to file their evidence on the issue of non-infringement, for the respondent to then file its evidence with respect to its allegations of invalidity and non-infringement and, finally, for the respondent to file its evidence on the issue of invalidity.
[10] The appellants filed their evidence of non-infringement on July 20, 1999. On September 14, 1999, the respondent provided the appellants with two affidavits including that of Dr. G.S. Rowe, sworn September 9, 1999. Among the issues addressed by Dr. Rowe in his affidavit is the issue of invalidity of the "693 and "891 Patents for obviousness. With respect to that issue, Dr. Rowe attached to his affidavit a list of 28 prior art references the vast majority of which were not listed in the respondent"s letter of March 26, 1999. Other like references are identified in the body of the Rowe affidavit including that of the Abbott Patent (1956) which is entitled "Improvements in and relating to enteric coatings". Nowhere in his lengthy affidavit does Dr. Rowe refer to the EP 124 495 Patent, which is the item of prior art first listed in the respondent"s March 26, 1999 letter containing its detailed statement and much relied upon in that statement. Instead, Dr. Rowe expresses the opinion in paragraph 46 of his affidavit that the formulation claimed by the appellants "are contained in the Abbott Patent (1956) which would have been revealed by a patent search...", and goes on in paragraph 105 to opine that neither the "693 nor the "891 Patent "disclose anything about the process of formulating a drug that would have been new or not obvious to me" before their priority dates.
[11] The appellants" motion is dated October 13, 1999. Its avowed purpose is to limit the respondent in the section 6 proceeding to that of relying on the items of prior art listed in the respondent"s detailed statement to support the legal and factual basis of the allegation of invalidity made pursuant to paragraph 5(2)(a ) of the Regulations and thus prevent the respondent from relying on any new items of prior art that are listed, or otherwise identified, in Dr. Rowe"s affidavit of September 9, 1999.
The judgment below
[12] In dismissing the motion, the learned Motions Judge noted that both anticipation and obviousness in patent law are questions of fact and that proof of any obviousness is to be "derived from a consideration of the cumulative effect of the prior art as disclosed by any number of sources, including prior patents and technical and scientific publications". She then concluded:
| [11] In this case, while both anticipation and obviousness are alleged, Dr. Rowe"s affidavit appears to be aimed primarily at obviousness. Given the nature of an allegation of obviousness, it seems likely that different experts in a particular art might approach the factual question of obviousness in different ways or by reference to different documents. Therefore, there may be merit to the argument of counsel for Genpharm that the documents referred to by Dr. Rowe are merely evidence of the state of the art at the relevant time which support the factual allegation of obviousness. While I appreciate that it was Genpharm"s obligation to give a complete account of the facts on which it intends to rely in these proceedings, it seems to me unduly restrictive, at this preliminary stage, to preclude Genpharm"s reliance on the 25 documents cited by Dr. Rowe in support of his opinion. |
| [12] However, this motion was necessary argued without the benefit of a full explanation of Dr. Rowe"s analysis. I find it impossible to determine from merely reading Dr. Rowe"s affidavit whether Genpharm is adding a new factual basis for its allegation or merely expanding its body of evidence. That is a question that is best answered by the judge who hears Astra"s application for prohibition. |
The issues
[13] The principal issue in this appeal is whether the Motions Judge erred in making the order of October 25, 1999 by opening the possibility, should the Trial Judge so rule, that the respondent may rely on the documents of prior art that are listed in the Rowe affidavit in addition to those listed in its detailed statement of March 26, 1999. The appellants contend that the Motions Judge failed to appreciate that under the Regulations a detailed statement provided by a second person pursuant to paragraph 5(3(a) frames the issues and facts that a party may raise in a section 6 proceeding brought by a first person and that a party may only adduce evidence in that proceeding to support the specific factual basis asserted in the second person"s detailed statement. Moreover, the appellants argue that the Motions Judge erred in leaving to the Trial Judge the determination of whether the Rowe affidavit adds a new factual basis for the allegation of invalidity or merely expands its body of evidence.
The parties" submissions
[14] The appellants contend that the respondent is obliged by paragraph 5(3)(a) of the Regulations to set forth in its detailed statement of the paragraph 5(1)(b) allegations all of the facts on which it intends to rely in support of those allegations so as to enable the appellants to decide whether or not to seek an order of prohibition pursuant to section 6. Any fact that is not contained in the detailed statement including the documents listed therein cannot be relied upon by the respondent in the subsequent prohibition proceeding. Once that proceeding is commenced the respondent has an opportunity to file evidence in support of its detailed statement, but not to rely on facts that are not contained in that statement. Accordingly, the facts that prove invalidity of the "693 and "891 Patents for obviousness must be derived from a consideration of that statement. While the respondent may not rely on new facts it may, if it chooses, make a further and different allegation pursuant to paragraph 5(1)(a ) or, alternatively, initiate an action with a view to having the patents in issue declared invalid for obviousness.
[15] The respondent cautions against viewing the detailed statement in the way that a pleading might be viewed. It maintains that the detailed statement is not normally prepared by or with the assistance of legal counsel and, therefore, some latitude must be allowed to a second person of supplementing the factual basis of its allegation so that the Court hearing the section 6 application will be better able to determine whether the allegation is justified. The use of the word "including" in the detailed statement itself indicates that the facts relied upon were not intended to be exhaustive and that additional facts might be relied upon in a section 6 proceeding. In any event, the new documents of prior art listed, or otherwise identified, in the Rowe affidavit do not constitute new facts but are merely evidence in support of facts relied upon in the detailed statement. Finally the Prothonotary"s order of June 7, 1999 has had the effect of protecting the appellants by permitting them to file evidence of the invalidity allegations after the respondent has done so.
Analysis
[16] It seems to me that a key to the determination of this appeal is an appreciation of the role played by a detailed statement within the scheme of the Regulations. As has been indicated, that statement is to be provided before a section 6 prohibition proceeding can be contemplated by the affected patentee. It serves the purpose of notifying the patentee that, in the view of a second person, a patent listed by the first person pursuant to section 4 of the Regulations will not be infringed or, alternatively, that the patent is invalid. This accords with the views of Marceau J.A. in Apotex Inc. v. Canada (Minister of National Health and Welfare) (1997), 76 C.P.R. (3d) 1 (F.C.A.), at 11:
| The basic purpose of the Regulations is to provide a means by which patents are noted and protected from possible infringement at the instance of the patent-holder. The Regulations thus ensure that an NOC is not issued without a patent-holder having the opportunity to defend its patent. This opportunity is not diminished by the fact that the notice of allegation is given first, if, as here, it contains sufficient information for the patent-holder to determine whether to seek a prohibition order and the Court can immediately proceed to determine its justification. |
[17] Indeed, this Court has recognized that the detailed statement must be such as to make the patentee fully aware of the grounds for claiming that the issuance of an NOC would not lead to infringement of a listed patent for, otherwise, the patentee would be unable to decide whether or not to initiate a section 6 proceeding. Thus in Bayer AG, supra, at 337-338, Mahoney J.A. stated:
| One further matter warrants comment. Section 5(3)(a) of the Regulations requires that the applicant for the NOC provide a detailed statement of the basis in fact and law of his statement of allegation. It seems intended that the patentee be fully aware of the grounds on which the applicant says issuance of a NOC will not lead to infringement of the patent before the patentee decides whether or not to apply to a court for a determination. Such disclosure would define the issues at a very early stage. |
[18] From the point of view of the patentee, the opportunity to initiate a section 6 proceeding presents advantages and disadvantages. The main advantage is that by paragraph 7(1)(e) the Minister of National Health and Welfare is not to issue the NOC for up to 24 months after receipt of proof of the making of the application for prohibition pursuant to section 6 of the Regulations. The effect, as was pointed out by Mahoney J.A. in Bayer AG, supra, at 337 "is tantamount to an interlocutory injunction" for up to the now reduced period of 24 months. This advantage, while significant, is short term. The principal disadvantage is that where the section 6 proceeding is withdrawn, discontinued or dismissed the patentee is liable to compensate the second person for its loss incurred during the period described in subsection 8(1) of the Regulations. Hence the patentee would have less reason than formerly to be tardy in prosecuting a section 6 proceeding. On the other hand, the assurance that compensation must be paid to a second person at the end of an unsuccessful section 6 proceeding is no guarantee that the second person will act with despatch in that proceeding.
[19] The detailed statement is not a pleading per se but represents a pivotal step in the process leading up to the issuance of an NOC. By taking that step the second person puts the patentee on notice of the grounds on which he or she considers that the making, constructing, using or selling of the drug will not infringe the second person"s patent rights during the unexpired term of the patent. In theory, this procedure ought to enable the patentee to confidently decide within the 45 day time limit whether to resist the issuance of an NOC. It is to be noted that, subject to business exigencies, the second person had no obligation to make its allegation and provide its detailed statement by an imposed deadline. As much time as the second person deems necessary is available under the scheme of the Regulations.
[20] While it is true that the detailed statement is not filed in a section 6 proceeding, it nevertheless casts a long shadow over that proceeding. Indeed, it is upon the content of that statement that the patentee must decide whether or not to commence a section 6 proceeding and to assess its chances of success or failure. In this sense the allegation and detailed statement assist in an important way in framing the issues and facts to be determined in the section 6 proceedings for in seeking prohibition the patentee is obliged to show that, contrary to what is stated in the detailed statement, the patentee"s patent right will be infringed if an NOC for the drug is issued prior to the expiration of the listed patent.
[21] In my view, all of these considerations suggest that a second person must do what, in fact, paragraph 5(3)(a) requires, i.e. set forth in the detailed statement "the legal and factual basis" for the paragraph 5(1)(b ) allegation and to do so in a sufficiently complete manner as to enable the patentee to assess its course of action in response to the allegation. See Pharmacia Inc. v. Canada (Minister of National Health and Welfare) (1994), 58 C.P.R. (3d) 209 (F.C.A.), per Strayer J.A. at 216. An examination of the detailed statement in issue is thus required in order to determine whether it measures up to this requirement with respect to the allegation that the "693 and "891 Patents are not valid for obviousness.
[22] As I read the detailed statement of March 26, 1999, the factual basis for the allegation of invalidity is established by the prior art relied upon in that statement, particularly the "495 patent. This is made even plainer in the portion of the letter that follows after the listing of the several items of prior art relied upon by the respondent. There we find an elaboration of the factual basis for the allegation of invalidity, i.e. that patent "495 "discloses formulations", or "recognizes the problem of administering omeprazole", or "relates to an enterically coated tablet", or "discloses a pharmaceutical preparation", or "teaches coating the active ingredients". These assertions of fact remained to be made out in the section 6 proceeding but that is a matter of adducing the relevant evidence.
[23] The respondent suggests that the list of prior art in the detailed statement was not intended to be exhaustive, hence the presence of the word "including", so that the way was left open to add to that list in the section 6 proceeding. I am of the view, however, that paragraph 5(3)(a ) does not contemplate such possibility. 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 section 6 proceeding. This Court has cautioned persons in the position of the respondent that they assume a risk that a particular allegation may not be in compliance with the Regulations and that the deficiency cannot be cured by the Court in a section 6 proceeding. In Bayer AG v. Canada (Minister of National Health and Welfare) (1995), 60 C.P.R. (3d) 129 (F.C.A.), Strayer J.A. stated, at 133-134, in reference to the decision of this Court in Pharmacia Inc. v. Canada (Minister of National Health and Welfare) (1994), 58 C.P.R. (3d) 207:
The order appealed from here was made before this court had had occasion to clarify certain issues arising out of the Regulations. In particular, this court in Pharmacia Inc. v. Canada (Minister of National Health and Welfare)...[since reported at 58 C.P.R. (3d) 207]...stated the following [at p. 209]:
| It seems to us that while a notice of allegation does play an important role in the ultimate outcome of litigation of this nature, it is not a document by which the judicial review application may be launched under s. 6 of the regulations. That document was put in as a piece of evidence by the appellants; it originated with the application filed before the Minister. Because it is not a document that was filed with the court but with the Minister, in our view the notice of allegation is beyond the reach of the court"s jurisdiction in a judicial review proceeding. That being so, the court, in our opinion, lacks jurisdiction to strike out the notice of allegation. |
This clearly means that the court has no jurisdiction to make orders concerning the filing of notices of allegation or requiring them to be perfected in some way. The principle is that, by the scheme of the Regulations, the notice of allegation precedes the institution of prohibition proceedings in this court. It forms part of the background to that proceeding, perhaps what one might loosely refer to as part of the "cause of action". A court cannot order that a cause of action be created, or that it be created at a certain time, or in a certain way. It can only deal with it after it is created or allegedly created. Those who fail to file notices of allegation, or adequate notices of allegation, must assume their own risk when it comes to attacks on the adequacy of such allegations once prohibition proceedings are commenced before the court.
[24] In my view this reasoning applies equally to a deficiency in a detailed statement of a second person. This Court decided in Hoffmann-LaRoche Ltd. v. Canada (Minister of National Health and Welfare) (1996), 70 C.P.R. (3d) 1, that a second person could not in a section 6 proceeding add to the facts that were set forth in its detailed statement. I stated at page 6 of that decision:
...there cannot be any doubt that a second person in the position of the Cross-Appellant was under a clear obligation, imposed by subsection 5(3)(a) of the Regulations, to "provide a detailed statement of the legal and factual basis for the allegation" (emphasis added). I am not persuaded, therefore, that the Motions Judge erred in refusing leave to file further evidence when it was apparent that the purpose was simply to supply a deficiency of the Cross-Appellant"s own making in failing to do what was required of it in its detailed statement i.e. providing all of the facts it intended to rely upon...
[25] Further, the respondent contends that the list of prior art attached to Dr. Rowe"s affidavit and the other items of prior art otherwise referred to in that affidavit, do not constitute new facts but only evidence of the factual basis set forth in the detailed statement. I have difficulty in viewing the new material in that way. It would appear that the prior art relied upon in the Rowe affidavit to support the allegation of invalidity for obviousness is not evidence of the facts contained in the detailed statement but rather new facts. Indeed, counsel candidly conceded during argument that, in tendering his evidence as to obviousness, Dr. Rowe preferred to rely on the Abbott Patent (1956) rather than on the "495 Patent listed in the detailed statement, even though counsel maintained that it was proper for Dr. Rowe to do so and, in any event, that the new references involved no new facts but merely evidence of the factual basis for the respondent"s allegations.
[26] Finally, the respondent attempted to make much of the Prothonotary"s consent order of April 6, 1999, as representing a sensible approach to section 6 litigation in that the appellants thereby gain the advantage of knowing the respondent"s evidence on the issue of invalidity in advance of filing their own evidence on that issue. Although the sequence for filing evidence set by that order does offer this advantage, I do not really see how it can affect the issue under consideration. In my view, the inherent advantage for the appellants from the consent order procedure fails to answer the question of whether or not, in the first place, the respondent is free to rely on the new facts. If the respondent were not permitted to add to the factual basis of its allegations, the order in which the new facts is to be made known would not matter. The question would remain whether, given the scheme of the Regulations and the decided cases, it is proper to raise and rely upon new facts in the section 6 proceeding in addition to those relied upon in the paragraph 5(3)(a ) detailed statement filed in support of the paragraph 5(1)(b) allegation.
[27] I would mention a few additional considerations. The fact that the section 6 proceeding is generally to be completed within 24 months and that an award of damages awaits an unsuccessful patentee at the end of that process, should not be ignored. If a second person is always free to supplement its detailed statement in a section 6 proceeding, the proceeding itself is bound to be delayed, which could only redound to the detriment of the first person. That a longer period than the period of 24 months specified in paragraph 7(1)(e) [reduced from 30 months] may be allowed in a particular case seems to be contemplated in paragraph 7(5)(b). This Court has recognized, however, that a section 6 proceeding should be dealt with under the Rules of the Court as expeditiously as possible in order that both sides to the dispute will have their rights determined sooner rather than later. Thus in Bayer AG, supra, Mahoney J.A. stated, at 337:
The court has a clear duty to deal with an application expeditiously. Given that, in the scheme of the Regulations, it is the patentee who has both the carriage of the proceeding and the interest in its dilatory prosecution, departures from the schedule imposed by the Part V.1 rules [now Part 5 of the 1998 Rules] ought not to be routine.
The ability of the Court to order payment of damages for which an unsuccessful patentee is rendered liable under section 8 of the Regulations suggests, however, that the patentee no longer has an exclusive interest in delaying the progress of a section 6 proceeding. Moreover, the relatively short time period specified in paragraph 7(1)(e) of the Regulations and the language contained in subsection 7(5) of the Regulations, has been rightly viewed as a further indication that a section 6 proceeding should proceed expeditiously to final determination by the Court. The point was made clear in Pharmacia Inc., supra, at 215, where Strayer J.A. stated:
The Patented Medicines (Notice of Compliance) Regulations further indicate an intention that this particular kind of application for judicial review should be disposed of expeditiously. Section 7(1) of the regulations provides that normally a notice of compliance should not be issued until 30 months have elapsed from the filing of the application for prohibition, unless the court has in the meantime dismissed the application. Section 7(5), however, authorizes the court to abbreviate or extend the 30-month period where it has not yet reached a decision on the application but where it finds that a party to the application "failed to reasonably cooperate in expediting the application". Thus if, for example, the applicant unduly delays in bringing the matter on for hearing on the merits, the respondent can move to have the court shorten the time-limit for the issue of a notice of compliance.
It is be noted as well that not only will an unsuccessful patentee in a section 6 proceeding be visited with a Court order to compensate the second person, but the patentee may also be required to pay legal costs pursuant to subsection 6(9) of the Regulations including costs "on a solicitor-and-client basis". Indeed, as provided in subsection 6(10), a factor which the Court may consider in its order as to costs is "the diligence with which the parties pursued the application". This again suggests that a section 6 proceeding was intended to be proceeded with as expeditiously as possible and not be unduly delayed by a party.
[28] If the foregoing analysis be correct, a second person may be well advised to draw on the assistance of legal counsel prior to submitting and serving the allegation and the detailed statement rather than wait until after the patentee initiates a section 6 proceeding.
[29] For the foregoing reasons, I would allow the appeal with costs, set aside the order of the Trial Division and order that the respondent not rely on any of the prior art listed or otherwise identified in the Rowe affidavit in arguing that the "693 and "891 Patents are invalid for obviousness.
"A.J. Stone"
J.A.
"I agree.
Marshall Rothstein, J.A."
"I agree.
John M. Evans, J.A."