Eli Lilly Canada Inc. v. Canada (Minister of Health)

Eli Lilly Canada Inc. v. Canada (Minister of Health) Court (s) Database Federal Court of Appeal Decisions Date 2003-01-22 Neutral citation 2003 FCA 24 File numbers A-64-02 Notes Reported Decision Decision Content Federal Court Reports Eli Lilly Canada Inc. v. Canada (Minister of Health) (C.A.) [2003] 3 F.C. 140 Date: 20030122 Docket: A-64-02 Neutral citation: 2003 FCA 24 CORAM: ISAAC J.A. SHARLOW J.A. MALONE J.A. BETWEEN: ELI LILLY CANADA INC. Appellant (Applicant) and THE MINISTER OF HEALTH Respondent (Respondent) Heard at Ottawa, Ontario on October 15, 2002. Judgment delivered at Ottawa, Ontario on January 22, 2003 REASONS FOR JUDGMENT BY: SHARLOW J.A. CONCURRED IN BY: MALONE J.A. DISSENTING REASONS BY: ISAAC J.A. Date: 20030122 Docket: A-64-02 Neutral citation: 2003 FCA 24 CORAM: ISAAC J.A. SHARLOW J.A. MALONE J.A. BETWEEN: ELI LILLY CANADA INC. Appellant (Applicant) and THE MINISTER OF HEALTH Respondent (Respondent) REASONS FOR JUDGMENT SHARLOW J.A. [1] This is an appeal from an order of a Judge dismissing an application by Eli Lilly Canada Inc. for judicial review of the decision of the Minister of Health to remove Canadian Patent No. 1,249,969 (the 969 patent) from the patent register maintained under section 3 of the Patented Medicines (Notice of Compliance) Regulations, SOR/93-133 (PMNOC Regulations). The 969 patent will expire on February 14, 2006. [2] All of the claims of the 969 patent are for ceftazidime pentahydrate in combination with amorphous lactose. Ceftazidime is an antibiotic. According to the disclosure in the 969 patent, ceftazidime pentahydrate is a useful form of ceftazidime for pharmaceutical formulations. Prior to the disclosure in the 969 patent, the known formulations of ceftazidime pentahydrate tended to degrade, leading to the formation of high molecular weight polymers, which results in toxicity. The invention disclosed by the 969 patent provides a formulation of ceftazidime pentahydrate with amorphous lactose. The incorporation of amorphous lactose avoids the toxicity problem by suppressing the formation of polymers. [3] Eli Lilly has found an alternative solution to the toxicity problem presented by the degradation of ceftazidime pentahydrate. Its alternative solution is not the subject of a patent. Rather, Eli Lilly is guarding it as a trade secret. Using that alternative solution, Eli Lilly developed six ceftazidime drugs. In 1990 and 1992, Eli Lilly obtained notices of compliance for those six drugs pursuant to the Food and Drug Regulations, C.R.C. 1978, c. 870. Four of the drugs are sold in various dosages under the trade name Tazidime and two are sold in various dosages under the trade name Tazidime Add-Vantage (collectively, "Tazidime"). All of these products are soluble powders, intended to be reconstituted as a solution to be administered by injection. [4] On April 8, 1993, Eli Lilly submitted a patent list under subsection 4(1) of the PMNOC Regulations for each of its Tazidime products. Each patent list names several patents, including the 969 patent. The 969 patent was included on the patent register when the patent lists were filed. However, it was removed on July 6, 2000 pursuant to a decision of the Minister recorded in a letter to Eli Lilly dated June 8, 2000. The appellant sought judicial review of the Minister's decision. Its application was dismissed, and the appellant now appeals to this Court. [5] It is undisputed that the standard of review of the Minister's decision is correctness: Merck & Co. v.Canada (Attorney General), (1999) 176 F.T.R. 21 (T.D.), at paragraph 68, affirmed without comment on the standard of review (2000), 254 N.R. 68, 5 C.P.R. (4th) 138 (F.C.A.). The only dispute is the interpretation of the Patented Medicines (Notices of Compliance) Regulations. The Court is as well placed as the Minister to interpret those regulations. [6] The proper approach to the interpretation of the PMNOC Regulations is well established. It has recently been summarized by this Court in Parke Davis Division v. Apotex Inc. and Canada (Minister of Health), 2002 FCA 454, at paragraphs 30-33: [30] . . . The basic principle to be applied is stated as follows in Driedger, Construction of Statutes (2nd ed. 1983), at page 87: Today there is only one principle or approach, namely, the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament. [31] This principle has been applied in numerous statutory contexts: Bell ExpressVu Limited Partnership v. Rex, 2002 SCC 42. In that case Iacobucci J., writing for the court, also noted that Driedger's approach to statutory interpretation is buttressed by section 12 of the Interpretation Act, R.S.C. 1985, c. I-21, which provides that every enactment "is deemed remedial, and shall be given such fair, large and liberal construction and interpretation as best ensures the attainment of its objects". [32] The PMNOC Regulations were enacted in 1993 when the compulsory licensing system for patented medicines was repealed. Their purpose is explained as follows in the Regulatory Impact Analysis Statement, Canada Gazette Part II, Vol. 127, No. 6, page 1388: ... As a general rule, judicial remedies are sufficient to address patent infringement. However, with the enactment of Bill C-91 [S.C. 1993, c. 2] the government has created an exception to patent infringement allowing generic competitors to undertake any activities necessary to work up a submission to obtain regulatory approval of a product. This removes a patent right that might have otherwise been available to patentees to prevent generic competitors from obtaining such regulatory approval of their products. These Regulations are needed to ensure that this new exception to patent infringement is not abused by generic drug applicants seeking to sell their product in Canada during the term of their competitor's patent while nonetheless allowing generic competitors to undertake their regulatory approval work necessary to ensure they are in a position to market their products immediately after the expiry of any relevant patents. [33] Consistent with this quotation is the statement of the Supreme Court of Canada that the purpose of the PMNOC Regulations is to prevent patent infringement by delaying the issuance of notices of compliance for generic drugs until such time as their implementation will not result in the infringement of a patent: Merck Frosst Canada v. Canada, [1998] 2 S.C.R. 193, 227 N.R. 299, 80 C.P.R. (3d) 368, at paragraph 30. [7] The mechanics of the PMNOC Regulations may be summarized as follows. A drug manufacturer that files or has filed a new drug submission for a patented medicine, or to whom a notice of compliance has been issued for a patented medicine, may submit a patent list in respect of the drug pursuant to section 4 of the PMNOC Regulations. It thus becomes the "first person" in relation to the listed patents. [8] The Minister may not issue a notice of compliance for a drug that is comparable in specified respects 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, unless the provision of section 5 of the PMNOC Regulations are met. The requisite comparability includes, for example, bioequivalence. A drug manufacturer (referred to as a "second person") proposing to market a drug that is bioequivalent or otherwise comparable to another drug must, in its new drug submission, include one of a number of allegations that, if true, will establish that the new drug will not be authorized for marketing in Canada until there is no further risk of infringement of the listed patents. The second person must also provide a detailed statement of the legal and factual basis for the allegation and must serve the notice of allegation on the first person. [9] If the first person takes the position that the allegations in the notice of allegation are not justified, the first person may commence an application under subsection 6(1) of the PMNOC Regulations for an order prohibiting the Minister of Health from issuing a notice of compliance to the second person until the patent referred to in the notice of allegation has expired. The first person then has the burden of establishing that the allegations in the notice of allegation are not justified. [10] If the first person provides the Minister of Health with a notice of the commencement of subsection 6(1) proceedings, the Minister is precluded from issuing a notice of compliance to the second person for a certain period of time. The period of this statutory stay runs for 24 months unless terminated earlier by the expiry of the patent, by a declaration by the court that the patent is not valid or that a non-infringement allegation is justified, or by the withdrawal, discontinuance or dismissal of the prohibition proceedings. The period may also be shortened or lengthened by the court in certain circumstances. In Merck Frosst, supra, the statutory stay was characterized as "draconian" because it permits a first person to delay the entry of generic competitors into the market without having to establish even a prima facie case of infringement. [11] If prohibition proceedings are not successful, the second person may claim damages against the first person to compensate for the delay in the issuance of the notice of compliance. [12] One of the issues raised in this case is the scope of the Minister's authority to determine what is added to the patent list, or what is permitted to remain there. Subsection 3(1) of the PMNOC Regulations originally read as follows: 3(1) On the 30th day after the coming into force of these Regulations, the Minister shall open and thereafter maintain a register of any information submitted pursuant to section 4. 3(1) Le 30e jour suivant la date d'entrée en vigueur du présent règlement, le ministre ouvre en registre de tout renseignement soumis aux termes de l'article 4 et le tient à jour. [13] In my view, this provision implicitly gave the Minister the authority to ensure that all patents on the patent list conformed to the PMNOC Regulations, and to refuse to list, or to remove, any patent that does not conform. If there was ever any doubt about the scope of the Minister's authority in that regard, it was removed by the enactment of the Regulations Amending the Patented Medicines (Notice of Compliance Regulations), SOR/98-166 (the 1998 amendments). The 1998 amendments, among other things, replaced former subsection 3(1) of the Regulations. Subsection 3(1) now reads as follows: 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. 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. [14] The 1998 amendments came into effect on March 11, 1998 (section 10, SOR/98-166, subject to certain transitional rules in section 9 that have no application in this case). [15] The 1998 amendments also made some changes to section 4 which narrowed the scope of information that is eligible for inclusion on the patent register. Counsel for Eli Lilly argued that the eligibility of any patent lists it submitted prior to the 1998 amendments should not be assessed under the narrower rules. I do not agree. In my view, the 1998 amendments entitle the Minister to delete from the patent register any information that does not meet the requirements of the PMNOC Regulations, as they are established from time to time by the Governor in Council. Thus, a patent that qualified for inclusion on a patent list in 1993, but does not qualify under the 1998 amendments, may be removed at any time after March 11, 1998. [16] I see no merit in the submission of counsel for Eli Lilly that this offends any right or presumptive right on the part of Eli Lilly not to be subject to retroactive legislation. The 1998 amendments are not retroactive. The 1998 amendments speak only from March 11, 1998. The fact that they properly may apply to cause the removal from the patent list of a patent that was accepted for listing in 1993 does not make the 1998 amendments retroactive. Thus, the next question is whether the 969 patent was eligible for inclusion on the patent register under the PMNOC Regulations as amended in 1998. [17] The relevant parts of the PMNOC Regulations read as follows after the 1998 amendments: 2. In these Regulations, "claim for the medicine itself" includes a claim in the patent for the medicine itself when prepared or produced by the methods or process of manufacture particularly described and claimed or by their obvious chemical equivalents (revendication pour le médicament en soi) . . . 2. Les définitions qui suivent s'appliquent au présent règlement « revendication pour le médicament en soi » S'entend notamment d'une revendication, dans le brevet, pour le médicament en soi préparé ou produit selon les modes du procédé de fabrication décrits en détail et revendiqués ou selon leurs équivalents chimiques manifestes. (claim for the medicine itself) . . . "medicine" means a substance intended or capable of being used for the diagnosis, treatment, mitigation or prevention of a disease, disorder or abnormal physical state, or the symptoms thereof; (médicament) « médicament » Substance destinée à servir ou pouvant servir au diagnostic, au traitement, à l'atténuation ou à la prévention d'une maladie, d'un désordre, d'un état physique anormal, ou de leurs symptômes. (medicine) 3(3) No information submitted pursuant to section 4 shall be included on the register until after the issuance of the notice of compliance in respect of which the information was submitted. 3(3) Aucun renseignement soumis aux termes de l'article 4 n'est consigné au registre avant la délivrance de l'avis de conformité à l'égard duquel il a été soumis. 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. 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). 4(2) A patent list submitted in respect of a drug must (a) indicate the dosage form, strength and route of administration of the drug; (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 . . . (2) La liste de brevets au sujet de la drogue doit contenir les renseignements suivants : a) la forme posologique, la concentration et la voie d'administration de la drogue; 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;. . . 4(7) A person who submits a patent list or an amendment to an existing patent list under subsection (1) or (4) must certify that (a) the information submitted is accurate; and 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 : (a) the information submitted is accurate; and a) les renseignements fournis sont exacts; (b) the patents set out on the patent register ... are eligible for inclusion on the register and are relevant to the dosage, form, strength and route of administration of the drug in respect of which the submission for a notice of compliance has been filed. b) les brevets mentionnés dans la liste ... sont admissibles à l'inscription au registre et sont pertinents quant à la forme posologique, la concentration et la voie d'administration de la drogue visée par la demande d'avis de conformité. [18] For the purposes of the PMNOC Regulations, the word "drug" must bear the same meaning as in the Food and Drug Regulations. The definition is found in section 2 of the Food and Drugs Act, R.S.C. 1985, c. F-27: 2. In this Act ... "drug" includes any substance or mixture of substances manufactured, sold or represented for use in 2. Les définitions qui suivent s'appliquent à la présente loi. « drogue » Sont compris parmi les drogues les substances ou mélanges de substances fabriqués, vendus ou présentés comme pouvant servir_: (a) the diagnosis, treatment, mitigation or prevention of a disease, disorder, abnormal physical state, or the symptoms thereof, in human beings or animals ... a) au diagnostic, au traitement, à l'atténuation ou à la prévention d'une maladie, d'un désordre, d'un état physique anormal ou de leurs symptômes, chez l'être humain ou les animaux; [19] I will begin with what seems to me to be the interpretation of these provisions based on their ordinary and grammatical meaning. The Minister, in exercising the authority under subsection 3(1), must consider whether the patent list meets the requirements of subsection 3(3), 4(1), 4(2) and 4(7) of the PMNOC Regulations. [20] The Minister's task is facilitated by the form of the patent list. A separate patent list is submitted for each drug product. The form requires the following information about the drug: the name of the medicine in the drug, the brand name, the drug identification number set out on the notice of compliance, the intended use (human or veterinary), the route of administration, the pharmaceutical dosage form, and the dosage. There follows a section in which the patents sought to be included on the patent register are listed by patent number, date of grant and expiration date. Each patent is marked by a code indicating the status of the applicant as owner, exclusive licensee, or person with the consent of the owner. The remainder of the form identifies the person submitting the patent list and gives an address for service. The form also includes the required certification. [21] Subsection 3(3) is intended to ensure that the Minister does not give effect to a patent list submitted in relation to a particular drug product until a notice of compliance has been issued for that product. In this case it is common ground that the requirements of subsection 3(3) are met. [22] Subsection 4(1) tells the Minister who is entitled to file a patent list. That entitlement is given to a person who files or has filed a new drug submission to obtain a notice of compliance in respect of a "drug that contains a medicine", or a person who has been issued a notice of compliance in respect of a "drug that contains a medicine". [23] In the context of this case, it is common ground that Tazidime is a drug containing ceftazidime, and that Tazidime is a drug in respect of which Eli Lilly has been issued a notice of compliance. There was some dispute in the court below as to whether ceftazidime is a medicine. [24] The evidence is that ceftazidime is an antibiotic. Amorphous lactose has no medicinal qualities but prevents ceftazidime from degrading to toxicity. A formulation of ceftazidime and amorphous lactose that is the subject of one of the claims of the 969 patent would be considered to be a "medicine" as that term is defined in section 2 of the PMNOC Regulations: Hoffmann-La Roche Ltd. v. Canada (Minister of National Health and Welfare) (1995), 62 C.P.R. (3d) 58 (F.C.T.D.), affirmed (1996), 67 C.P.R. (3d) 25 (F.C.A.). However, it seems to me that ceftazidime alone also meets the definition of "medicine". [25] The Judge reasoned that, because ceftazidime by itself is toxic, it is not intended to be used for the treatment of a disease or disorder, and is not capable of being so used. I must respectfully disagree with that conclusion. An antibiotic does not cease to be an antibiotic merely because it cannot function safely in the human body until it is combined with a substance that prevents it from degrading to toxicity. It would follow that for the purposes of the PMNOC Regulations, ceftazidime is a medicine whether or not it is formulated with amorphous lactose. [26] It would also follow, paraphrasing the words of subsection 4(1), that because Eli Lilly has been issued a notice of compliance in respect of a drug, Tazidime, that contains a medicine, ceftazidime, Eli Lilly is permitted to submit a patent list in respect of the drug Tazidime. However, subsection 4(1) does not specify what patents Eli Lilly is entitled to include on the patent list. That question is determined on the basis of paragraphs 4(2)(b) and 4(7)(b). [27] Pursuant to paragraph 4(2)(b), the patent list submitted in respect of Tazidime may include any patent that contains "a claim for the medicine itself". The word "medicine" in paragraph 4(2)(b) must have the same meaning in that provision as it does in subsection 4(1). If that is so, then in the case of a patent list submitted for Tazidime, any patent that contains a claim for ceftazidime itself, or that contains a claim for a formulation in which ceftazidime is the active medicinal ingredient, is within the scope of paragraph 4(2)(b). [28] I need not analyze the requirements of paragraph 4(7)(b) in any detail. I understand that counsel for the Minister has not taken the position that the 969 patent is not "relevant to the dosage form, strength and route of administration" of Tazidime. [29] Based on the foregoing ordinary and grammatical reading of the PMNOC Regulations, the 969 patent should be eligible for inclusion on the patent lists for Tazidime. That is the interpretation that should be adopted unless the words of the PMNOC Regulations can reasonably bear a different meaning that would accord better with the purpose of the PMNOC Regulations. [30] Counsel for the Minister argued that the PMNOC Regulations require a relationship, which he referred to as "relevance", between the drug named in the notice of compliance and the patent sought to be included in the patent register. He submitted that the requisite relationship does not exist if the invention disclosed in the patent is not somehow included or embodied in the drug. In this case, for example, it is undisputed that Tazidime makes no use of the invention disclosed in the 969 patent. It is in this sense that counsel for the Minister argues that the 969 patent is not "relevant" to the notice of compliance for Tazidime. [31] That argument was accepted inWarner-Lambert Canada Inc. v. Canada (Minister of Health) (2001), 206 F.T.R. 177, 12 C.P.R. (4th) 129 (F.C.T.D.). The facts of that case are not distinguishable from the facts of this case. The conclusions of the Judge in that case are summarized in paragraphs 17 to 19 of his reasons: 17. To me, the language of subsections 4(1), (2) and (7) of the Regulations is clear : for a patent set out on a patent list to be eligible for inclusion on the register, it must be relevant to a drug for which a submission for a notice of compliance has been filed. This requirement obviously contributes to ensuring a "product-specific" patent list, which is an objective clearly stated in the Regulatory Impact Analysis Statement accompanying the amendments to section 4 of the Regulations in 1998: Patentees are required to certify that the patents submitted on the list for a drug are relevant to that particular version of the drug. This will ensure that patents that do not apply to the particular version of the drug will not impede the generic's market entry. 18. In the case at bar, the evidence shows that the '023 and '024 patents contain claims for pharmaceutical compositions which are considered, within the meaning of the Regulations, drugs that contain claims for a medicine (see Hoffman-La Roche Ltd. v. Canada (Minister of National Health and Welfare) (1995), 62 C.P.R. (3d) 58 (F.C.T.D.); aff'd (1995), 67 C.P.R. (3d) 25 (F.C.A.); application for leave to appeal to Supreme Court of Canada denied [1996] S.C.C.A. No. 65 (S.C.C.) (QL)). 19. However, the evidence also shows that the specific drugs covered by the '023 and '024 patents have never been the subject of a drug submission (NOC) under the Food and Drug Regulations, C.R.C., c. 870, as amended. Further, the evidence shows that the ACCUPRIL and ACCURETIC drug products for which drug submissions have been filed and approved by the Minister do not contain an ascorbic acid containing stabilizer, ascorbic acid or sodium ascorbate, which are the stabilizers found in the pharmaceutical compositions covered by the '023 and '024 patents. As such, the later patents are not relevant to the drug products for which a submission for a notice of compliance has been filed. As a result, they do not meet the eligibility requirements contained in subsections 4(1), (2) and (7) of the Regulations. Consequently, it was correct for the Minister to conclude that the '023 and '024 patents were ineligible for inclusion on the register. [32] A review of the 1998 Regulatory Impact Analysis Statement as a whole indicates that the passage cited in Warner Lambert refers specifically to paragraph 4(7)(b) of the PMNOC Regulations. From that I infer that the "relevance" mentioned in the quoted passage from the 1998 Regulatory Impact Analysis Statement relates to the new requirement for a certification of relevance as to dosage form, strength and route of administration. If that is so, then the desired "product specific patent list" will be achieved by ensuring compliance with paragraph 4(7)(b). I am not persuaded that the quoted passage has the broader significance for which the Minister has argued. [33] More importantly, however, a Regulatory Impact Analysis Statement can do no more than explain in very general terms the objective of the Regulations to which they relate. The question, it seems to me, is whether there are words in the PMNOC Regulations that can fairly be read as imposing the "relevance" test propounded by the Minister. The Minister relies on the words of section 4, specifically the words highlighted below: 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. 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). 4(7) A person who submits a patent list ... must certify that . . . 7) pLa personne qui soumet une liste de brevets ... doit remettre une attestation portant que : ... (b) the patents set out on the patent register ... are eligible for inclusion on the register and are relevant to the dosage, form, strength and route of administration of the drug in respect of which the submission for a notice of compliance has been filed. b) les brevets mentionnés dans la liste ou dans la modification sont admissibles à l'inscription au registre et sont pertinents quant à la forme posologique, la concentration et la voie d'administration de la drogue visée par la demande d'avis de conformité. [34] I am unable to read those words as the Minister argues they should be read. Subsection 4(1) addresses the question of who may submit a patent list, not the permitted contents of the patent list. Similarly, the emphasized words in subsection 4(7)(b) do not describe any relationship between the drug named in the notice of compliance and the patents that may be included on the patent list. Rather, "the drug in respect of which the submission for a notice of compliance has been filed" is, simply, Tazidime. [35] According to Eli Lilly, the Minister's interpretation would tend to defeat the objectives of the PMNOC Regulations. It is theoretically possible that a generic drug manufacturer could produce a drug consisting of a formulation of ceftazidime and amorphous lactose that is bioequivalent to Tazidime (even though it would not be exactly the same as Tazidime because Tazidime does not contain amorphous lactose). Such a product could infringe the 969 patent. If the 969 patent is not permitted to stay on the patent lists for Tazidime, Eli Lilly will be deprived of its right to apply to stop the issuance of a notice of compliance for the new drug until after the expiry of the 969 patent. If that happens, the PMNOC Regulations will not have been permitted to operate as intended. I note that a similar argument was accepted in Apotex Inc. v. Canada (Minister of Health) (1999), 87 C.P.R. (3d) 271 (F.C.T.D.), but only in obiter dicta, in the context of the PMNOC Regulations before the 1998 amendments. [36] On balance, it seems to me that the interpretation propounded by Eli Lilly should be favoured over the interpretation propounded by the Minister, for two reasons. First, it is more consistent with the words of the PMNOC Regulations. Second, it has at least the potential of preventing infringement of the 969 patent, while the Minister's interpretation cannot possibly have that result. [37] For these reasons, I would allow the appeal with costs here and in the Trial Division, set aside the decision of the Judge, quash the decision of the Minister to remove the 969 patent from the patent register, and direct the Minister to reinstate the 969 patent to the patent register for all Tazidime products that are the subject of this proceeding. "K. Sharlow" J.A. "I agree B. Malone J.A. " ISAAC J.A. (Dissenting) [38] I have had the privilege of reading, in draft, the reasons for judgment which my colleague, Sharlow J.A., has circulated in this appeal. Unfortunately, I am unable to agree with her proposed disposition of the appeal and with some of the reasons she has given to support it. For the reasons that follow I would dismiss the appeal with costs. [39] I am in complete agreement with my colleague when she states in paragraphs 15 and 16 of her reasons: [15] ... In my view, the 1998 amendments entitle the Minister to delete from the patent register any information that does not meet the requirements of the PMNOC Regulations, as they are established from time to time by the Governor in Council. Thus, a patent that qualified for inclusion on a patent list in 1993, but does not qualify under the 1998 amendments, may be removed at any time after March 11, 1998. [16] I see no merit in the submission of counsel for Eli Lilly that this offends any right or presumptive right on the part of Eli Lilly not to be subject to retroactive legislation. The 1998 amendments are not retroactive. The 1998 amendments speak only from March 11, 1998. The fact that they properly may apply to cause the removal from the patent list of a patent that was accepted for listing in 1993 does not make the 1998 amendments retroactive. [40] On the issue of standard of review I am of the opinion that the test applicable in a case such as this, where the relief sought is in the nature of certiorari and mandamus, is that which was laid down by the Supreme Court of Canada in Reza v. Canada, [1994] 2 S.C.R. 394 where La Forest J., in delivering the unanimous judgment of the Court, stated at paragraph 20 that: ... the test for appellate review of the exercise of judicial discretion is whether the judge at first instance has given sufficient weight to all relevant considerations... See also: Manitoba (Attorney General) v. Metropolitan Stores Ltd., [1987], 1 S.C.R. 110, at 154-55; Friends of the Oldman River Society v. Canada (Minister of Transport), [1992] 1 S.C.R. 3, at 76-77. [41] As I understand these proceedings, the appellant appealed from the order of a Motions Judge in the Trial Division on its application for judicial review in respect of a decision of the Minister of Health. The relief which the appellant sought were orders quashing the decision of the Minister removing the 969 patent from the patent register and directing the Minister to reinstate the 969 patent on the patent register. Both orders that the appellant sought were discretionary. In my opinion, the learned Motions Judge canvassed the evidence and applied the law correctly. I, therefore, see no reason to interfere with her decision to dismiss the application under section 18.1 of the Federal Court Act, R.S.C. 1985, c. F-7. [42] In paragraph 21 of her reasons, my colleague states that the requirements of subsection 3(3) of the 1998 Patented Medicines (Notice of Compliance) Regulations, SOR/93-133 (PM(NOC) Regulations), have been met. Respectfully, I am unable to accept that conclusion. For ease of reference I reproduce here the text of subsection 3(3): 3. (3) No information submitted pursuant to section 4 shall be included on the register until after the issuance of the notice of compliance in respect of which the information was submitted. 3. (3) Aucun renseignement soumis aux termes de l'article 4 n'est consigné au registre avant la délivrance de l'avis de conformité à l'égard duquel il a été soumis. [43] A key requirement of subsection 3(3) is that no information respecting the submission of a patent list in respect of a drug should be included in the register until after a notice of compliance for that drug has issued. [44] Accordingly, it is necessary for me to name the drug in respect of which the patent list information was provided, and for which the notice of compliance was issued. [45] Denise Maher, Acting Director of Regulatory Affairs for the appellant, deposed in paragraphs 2 and 3 of the affidavit which she filed in support of the appellant's judicial review application as follows: 2. In August 1990, Lilly Canada received a Notice of Compliance for 1g, 2g/vial powder for solution for IV or IM administration for TAZIDIME ADD-VANTAGE ceftazidime. In April 1992 Lilly Canada received a Notice of Compliance for 500mg, 1g and 6g/vial powder for solution for IV or IM administration in relation to TAZIDIME ceftazidime. Attached as Exhibit "A" is a copy of the Notices of Compliance issued to Lilly Canada for TAZIDIME and TAZIDIME ADD-VANTAGE. 3. On or about April 8, 1993, and with the permission of Eli Lilly and Company, Lilly Canada submitted Form IV Patent Lists listing Canadian Letters Patent 1,249,969 (the "'969 Patent") in relation to TAZIDIME and TAZIDIME ADD-VANTAGE in accordance with the Patented Medicines (Notice of Compliance) Regulations in force in 1993. Shortly thereafter the '969 Patent was included by the Minister of Health on the Patent Register for 500mg, 1g and 6g/vial powder for solution for IV or IM administration in relation to TAZIDIME ceftazidime and 1g, 2g/vial powder for solution for IV or IM administration for TAZIDIME ADD-VANTAGE ceftazidime. Attached as Exhibit "B" is a copy of a letter dated April 8, 1993 attaching the relevant Form IV patent lists to the Minister for TAZIDIME and TAZIDIME ADD-VANTAGE. [46] Furthermore, in paragraph 4 she deposed as follows: 4. Attached as Exhibit "C" is a copy of the relevant portion of the patent register from January 16, 1996 indicating that the '969 Patent was included by the Minister of Health on the Patent Register for 500mg, 1g and 6g/vial powder for solution for IV and IM administration in relation to TAZIDIME ceftazidime and 1g, 2g/vial powder for solution for IV or IM administration for TAZIDIME ADD-VANTAGE ceftazidime. [47] It should be noticed, though, that the submissions and notices of compliance to which Ms. Maher refers were made and issued under the Food and Drug Regulations, C.R.C. 1978 c. 870, and the Food and Drugs Act, R.S.C. 1985, c. F-27, as they stood in 1990 and 1992 respectively. [48] Ms._Anne Bowes, Patent Officer - Science in the Submission and Information Policy Division, Bureau of Policy and Coordination, Therapeutic Products Programme, Health Products and Food Branch, Department of Health, filed an affidavit in support of the respondent's position. In paragraphs 16 to 23 she described the circumstances under which submissions were made, notices of compliance issued, and patent lists added to the patent register. In paragraph 18, she described the circumstances surrounding the creation of the patent register as follows: 18. The patent lists submitted by Eli Lilly Canada were added to the Patent Register when the PM(NOC) Regulations first came into force in 1993. At the time of coming into force, the Minister was given thirty (30) days in which to establish the Patent Register. Hundreds of patent lists were received by the Minister within those thirty (30) days. No determinations of eligibility were made. It was expected that the Patent Register would be maintained on a clerical basis. The original Patent Register was therefore comprised of whichever patent lists were submitted by manufacturers. [49] In paragraph 34, Ms. Bowes clarified that the drugs referred to by Ms. Maher do not use the formulation claimed in the 969 patent: ... However, it is important to note that she is not speaking of a drug which includes the composition covered in the '969 patent. That composition has not been approved by Health Canada and cannot presently be marketed. [50] I have read the cross-examination on the affidavit of Ms. Bowes and I find nothing in it that contradicts the statements she made at paragraphs 41 and 42 of her affidavit where she stated that the decision to remove the 969 patent from the patent register was based on the requirements of section 4 of the PM(NOC) Regulations and that the 969 patent is ineligible for listing on the patent register in respect of Tazidime and Tazidime Add-Vantage. [51] I, therefore, conclude, contrary to what my colleague has asserted, that the requirements of subsection 3(3) have not been met. [52] I disagree respectfully with the conclusion, stated in paragraph 25 of the reasons of my colleague, that for the purposes of the PM(NOC) Regulations ceftazidime is a medicine whether or not it is formulated with amorphous lactose. I also disagree with the conclusion she reached in paragraph 26 that because the appellant has been issued a notice of compliance in respect of Tazidime, that contains a ceftazidime, it is permitted to submit a patent list in respect of the drug Tazidime. [53] In reaching those conclusions my colleague appears to be responding to the following paragraphs in the reasons for judgment of the Motions Judge: [31] The applicant argues that the amorphous lactose is a non-medicinal or inactive ingredient. As such, its deletion from the formulation of the drug should not affect the eligibility of the '969 patent for inclusion on the register. Given the polymerization problem, however, it seems clear that without the amorphous lactose, the ceftazidime would not meet the definition of a medicine. The adverse effects of the ceftazidime absent the amorphous lactose would make it impossible for it to be considered "a substance intended or capable of being used for the diagnosis, treatment, mitigation or prevention of a disease, disorder or abnormal physical state, or the symptoms thereof" as defined in section 2 of the NOC Regulations. Furthermore, the '969 patent does not contain a claim to the "medicine" ceftazidime. It contains only a claim to ceftazidime when combined with amorphous lactose and a pharmaceutically acceptable base. [my emphasis] [32] Therefore, I am not persuaded by the applicant's argument that it is sufficient for inclusion of the '969 patent on the Patent Register that TAZIDIME and TAZIDIME ADD-VANTAGE contain ceftazidime, even though they are formulated without the amorphous lactose. Section 2 of the Regulations provides that a patent making a "claim for the medicine itself" includes: "the claim in the patent for the medicine itself when prepared or produced by the methods or processes of manufacture particularly described or by their obvious chemical equivalents". In my opinion, therefore, TAZIDIME and TAZIDIME ADD-VANTAGE do not contain "the medicine itself" as described in the '969 patent. TAZIDIME and TAZIDIME ADD-VANTAGE are manufactured by what one can only surmise is a different process or formulation, detailed in a confidential New Drug Submission filed with the Minister. No Notice of Compliance has issued for the claim in the '969 patent: ceftazidime, amorphous lactose, and a pharmaceutically acceptable base. [54] In order to understand the differing opinions between my colleague and the Motions Judge on this issue, it is necessary to consider first the definition of "medicine" in section 2 of the PM(NOC) Regulations and the definition of a "drug" as given in section 2 of the Food and Drugs Act. For ease of reference I reproduce these provisions. PM(NOC) Regulations 2. In these Regulations, "claim for the medicine itself" includes a claim in the patent 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; "claim for the use of the medicine" means a claim for the use of the medicine for the diagnosis, treatment, mitigation or prevention of a disease, disorder or abnormal physical state, or the symptoms thereof; 2. Les définitions qui suivent s'appliquent au présent règlement. « médicament » Substance destinée à servir ou pouvant servir au diagnostic, au traitement, à l'atténuation ou à la prévention d'une maladie, d'un désordre, d'un état physique anormal, ou de leurs symptômes.(medicine) ... « revendication pour le médicament en soi » S'entend notamment d'une revendication, dans le brevet, pour le médicament en soi préparé ou produit selon les modes du procédé de fabrication décrits en détail et revendiqués ou selon leurs équivalents chimiques manifestes. (claim for the medicine itself) ... "medicine" means a substance intended or capable of being used for the diagnosis, treatment, mitigation or prevention of a disease, disorder or abnormal physical state, or the symptoms thereof; « revendication pour l'utilisation du médicament » Revendication pour l'utilisation du médicament aux fins du diagnostic, du traitement, de l'atténuation ou de la prévention d'une maladie, d'un désordre, d'un état physique anormal, ou de leurs symptômes. (claim for the use of the medicine) Food and Drugs Act 2. In this Act, ... "drug" includes any substance or mixture of substances manufactured, sold or represented for use in (a) the diagnosis, treatment, mitigation or prevention of a disease, disorder or abnormal physical state, or its symptoms, in human beings or animals, (b) restoring, correcting or modifying organic functions in human beings or animals, or (c) disinfection in premises in which food is manufactured, prepared or kept; 2. Les définitions qui suivent s'appliquent à la présente loi. « drogue » Sont compris parmi les drogues les substances ou mélanges de substances fabriqués, vendus ou présentés comme pouvant servir_: a) au diagnostic, au traitement, à l'atténuation ou à la prévention d'une maladie, d'un désordre, d'un état physique anormal ou de leurs symptômes, chez l'être humain ou les animaux; b) à la restauration, à la correction ou à la modification des fonctions organiques chez l'être humain ou les animaux; c) à la désinfection des locaux où des aliments sont gardés. [55] It is also necessary to review some of the evidence which witnesses gave in support of the respective positions of the parties. [56] The affidavit of Dr. David D. Wirth, filed in support of the appellant's judicial review application, is instructive as to whether or not ceftazidime, by itself, is a medicine as defined in section 2 of the PM(NOC) Regulations. For that reason I will now refer extensively to his evidence. In paragraph 7 of his affidavit, Dr. Wirth deposes that: Ceftazidime "is the least stable drug substance I have ever worked with. As such, ceftazidime reacts more quickly and at lower temperatures than some other types of antibiotics. [57] In paragraph 8 he says: During initial testing with ceftazidime on rabbits, toxicity problems arose. After much consideration, it was discovered that the toxicity was related to the polymerization of ceftazidime or its degradation products. [58] In paragraph 12 he states, speaking of a paper he wrote on the degradation problem, that: This paper also demonstrates that the ceftazidime polymer impurity has some biological activity. A drug manufacturer does not want drug impurities to have biological activity since it will produce some biological result apart from the primary active ingredient. To avoid the adverse toxicological problems and to ensure that the polymer impurity does not result in some unwanted physiological effect, it is important to control the polymerization of ceftazidime when preparing ceftazidime for use in humans. [59] In paragraph 13 he deposes: In other words, it is necessary to ensure that the polymeric impurities are controlled in commercial formulations of ceftazidime to be used on humans otherwise the product will not be predictable and stable. [60] In paragraphs 14 he says: The formulations claimed in the '969 Patent overcome the polymerization problem by retarding the degradation of ceftazidime and hence its tendency to form polymers. [61] And finally in paragraph 15 he deposes, in part, as follows: A company seeking to sell ceftazidime will have to overcome the polymerization problem. [my emphasis] [62] It is my opinion, based on the affidavit of Dr. Wirth alone, that the Motions Judge was correct to say that ceftazidime, by itself, is not a medicine as that word is defined in section 2 of the PM(NOC) Regulations. [63] My colleague relies heavily on the analysis of Noël J., as he then was, in Hoffmann-LaRoche Ltd. v. Canada (Minister of National Health & Welfare) (1995),62 C.P.R. (3d) 58 (F.C.T.D.), aff'd sub.nom. Nu-Pharm Inc. v. Hoffmann LaRoche, et al. (1996), 67 C.P.R. (3d) 25 (F.C.A.) in reaching her conclusion that ceftazidime, by itself, is a medicine. In my opinion, the Motions Judge was correct to reject the argument advanced by the appellant based on Hoffmann-LaRoche, because, in that case, there is no evidence in the reported record that the toxicity problem did exist. [64] Dr. Wirth does not appear to have been cross-examined on his affidavit. Consequently, the statements of fact which he made in the affidavit remains uncontradicted. From his statement, in paragraph 15 of his affidavit, that: ...a company seeking to sell ceftazidime will have to overcome the polymerization problem... I draw the inference that ceftazidime, by itself, cannot by definition in the PM(NOC) Regulations be a medicine. The reasons for this conclusion are that it is not a substance intended or capable of being used for the diagnosis, treatment, mitigation or prevention of a disease, disorder or abnormal physical state, or the symptoms thereof. In the words of Noël J. in Hoffmann-LaRoche, "in common parlance", ceftazidime, by itself, has no "therapeutic value". [65] Equally, it is my view that it is not a drug as defined in section 2 of the Food and Drugs Act since it does not meet the requirements enumerated in paragraphs a and b of the definition. [66] Furthermore, in my opinion, it is doubtful that ceftazidime, by itself, fits the definition of "claim for the medicine itself", since that phrase is defined as including a "claim in the patent 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". The method described and claimed in the 969 patent is ceftazidime, a pharmaceutically acceptable base and amorphous lactose. In cross-examination on her affidavit, Ms. Maher was asked whether the method used by the appellant in their commercial formulation of ceftazidime is that claimed in the patent. She answered in the negative. The relevant portions of her testimony, found at pages 252 and 266, read as follows: Q: ... I am suggesting to you that the only components of those two drugs are ceftazidime and sodium carbonate. Would you agree with that or not agree with that? A: Yes, I would agree with that. ... Q: You would agree with me that the statement there reads "Tazidime vials contains [sic] a mixture of ceftazidime and sodium carbonate." Correct? A: That is correct. Q: And that is a true statement. Correct? A: Yes. [67] Dealing with the "relevance" test propounded by the Minister, my colleague makes the following statement about the utility of a Regulatory Impact Analysis Statement, in paragraph 33 of her reasons: More importantly, however, a Regulatory Impact Analysis Statement can do no more than explain in very general terms the objective of the Regulations to which they relate. [68] As a consequence, she downplayed the usefulness of the 1998 Regulatory Impact Analysis Statement for discerning the purpose of the PM(NOC) Regulations. In so doing, she appears to have accepted the argument advanced by the appellant that the PM(NOC) Regulations were designed to prevent patent infringement, specifically, in this case, the 969 patent. [69] I am in respectful disagreement with that approach on principle and authority. The Regulatory Impact Analysis Statement has been held to indicate the government's purpose and intention in promulgating regulations, including the PM(NOC) Regulations. [70] In RJR McDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311, the Supreme Court of Canada considered the Regulatory Impact Analysis Statement accompanying the Tobacco Products Control Regulations, SOR/93-389. Sopinka and Cory JJ., writing for the Court, made the following statement in relation to the Regulatory Impact Analysis Statement. After quoting from the Statement, they continue at page 353: These are clear indications that the government passed the regulations with the intention of protecting public health and thereby furthering the public good. [71] Similarly, in Friesen v. Canada, [1995] 3 S.C.R. 103 at 139, Major J., writing for the Court, made the following observation with respect to the Regulatory Impact Analysis Statement accompanying the Income Tax Regulations, SOR/89-419: The 1989 amendment removed from the taxpayer the option of choosing to value inventory at historical cost and left only the more conservative methods of fair market value or the lower of cost or market value. The practical effect of this amendment is that in years following 1989 the taxpayer must declare a loss for taxation purposes in any year in which the fair market value of inventory falls below historical cost. The taxpayer no longer has the option of postponing this loss until the taxation year in which the loss is actually realized upon sale of the inventory. This is made clear in the "Regulatory Impact Analysis Statement" published along with the amended regulation, SOR/89-419: This change, which is part of the measures announced by the Minister of Finance on January 15, 1987 relating to the application of losses and other deductions, will prevent a corporation from maintaining at cost inventories which have declined in value and thereby deferring the recognition of a loss by postponing the write-down to fair market value until after a change in control. [72] In this Court the Regulatory Impact Analysis Statement has been held to evidence the purpose for which regulations were promulgated. In Bayer Inc. v. Canada (Attorney General), [1999] 87 C.P.R. (3d) 293 (F.C.A.) Rothstein J.A., considered the Regulatory Impact Analysis Statement accompanying the Food and Drug Regulations, C.R.C. 1978 c. 870. At pages 296 to 297, he makes the following observation: The Regulatory Impact Analysis Statement accompanying the amended regulations at issue provides a further indication that the intention of the regulation is that the confidential information filed by the innovator may or may not be examined and relied upon. The statement reads in part: In the case where the Drugs Directorate intends to rely on the data of the innovator to support safety and efficacy claims, and this would result in a delay in the issuance of the NOC, the Drugs Directorate will notify the second-entry manufacturer in advance of the review. The Drugs Directorate will give the second-entry manufacturer the option of supplying additional information to [page297] support the claim without relying on the data previously submitted by the innovator. If the manufacturer wishes to supply the required information directly, in accordance with the policy on management of information, the manufacturer will avoid the application of this provision. The government's policy appears to be that where the Minister intends to rely on data of the innovator to support the safety and efficacy claims of the generic manufacturer, thereby giving rise to the minimum five-year protection from competition for the innovator, the generic manufacturer will be given the option of supplying additional information in order to avoid the Minister relying on information supplied by the innovator. If the generic manufacturer takes this option and satisfies the Minister, there will be no examination or reliance on the innovator's information and the minimum five-year protection from competition will not apply. The appellant's interpretation would preclude this option to the generic manufacturer. [73] In paragraphs 34 and 35 of her reasons, as a result of her statement that a: Regulatory Impact Analysis Statement can do no more than explain in very general terms the objective of the Regulations to which they relate... my colleague has rejected the argument of counsel for the Minister that the PM(NOC) Regulations require a relationship of "relevance" between the drug named in the notice of compliance and the patent included in the register, and, by implication, the reasons of Pinard J., in Warner- Lambert Canada Inc. v. Canada (Minister of Health), [2001] 206 F.T.R. 177, 12 C.P.R. (4th ) 129 (F.C.T.D.). In accepting, in paragraphs 34 and 35 of her reasons, that the sole purpose of the PM(NOC) Regulations is to prevent patent infringement, my colleague gives no weight to the following statement, contained in the 1998 Regulatory Impact Analysis Statement that accompanied the amended PM(NOC) Regulations, which demonstrates its dual purpose: The link between the patent status of a drug and approval for a generic version of the drug is being maintained, to provide effective enforcement of patent rights, while at the same time ensuring that generic drugs can enter the market as soon as possible; either as soon as it is determined that they are not covered by a patent, or, where they are covered by a patent, immediately after the expiry of the patent... The amendments reinforce the balance between providing a mechanism for the effective enforcement of patent rights and ensuring that generic drug products enter the market as soon as possible. [74] In my respectful opinion, my colleague's decision ignores the dual purpose of the 1998 regulatory scheme which seeks to balance the right of patentees with the intent of facilitating the entry of generic products into the market. My colleague's decision also has the effect of extending the right of the appellant under the 969 patent. [75] For all these reasons, as I have indicated earlier, I would dismiss the appeal with costs. "Julius A. Isaac" J.A. FEDERAL COURT OF APPEAL NAMES OF COUNSEL AND SOLICITORS OF RECORD DOCKET: A-64-02 STYLE OF CAUSE: Eli Lilly Canada Inc. v. The Minister of Health PLACE OF HEARING: Ottawa, Ontario DATE OF HEARING: October 15, 2002 REASONS FOR JUDGMENT BY: Sharlow J.A. CONCURRED IN BY: Malone J.A. DISSENTING REASONS BY: Isaac J.A. DATED: January 22, 2003 APPEARANCES: Mr. Anthony Creber and FOR THE APPELLANT Mr. Patrick Smith Mr. F.B. Woyiwada and FOR THE RESPONDENT Ms. Marie Crowley SOLICITORS OF RECORD: Gowling Lafleur Henderson LLP FOR THE APPELLANT Ottawa, Ontario Mr. Morris Rosenberg FOR THE RESPONDENT Deputy Attorney General of Canada Ottawa, Ontario