Syntex (U.S.A.) L.L.C. v. Canada (Minister of Health)

Syntex (U.S.A.) L.L.C. v. Canada (Minister of Health) Court (s) Database Federal Court of Appeal Decisions Date 2002-07-08 Neutral citation 2002 FCA 289 File numbers A-654-01 Notes Digest Decision Content Date: 20020708 Docket: A-654-01 Neutral citation: 2002 FCA 289 CORAM: LINDEN J.A. ROTHSTEIN J.A. SHARLOW J.A. BETWEEN: SYNTEX (U.S.A.) L.L.C., HOFFMANN-LA ROCHE LIMITED, ALLERGAN, INC, and ALLERGAN INC. Appellants (Applicants) and THE MINISTER OF HEALTH and APOTEX INC. Respondents (Respondents) Heard at Toronto, Ontario, on June 12, 2002. Judgment delivered at Ottawa, Ontario, on July 8, 2002. REASONS FOR JUDGMENT BY: ROTHSTEIN J.A. CONCURRED IN BY: LINDEN J.A. SHARLOW J.A. Date: 20020708 Docket: A-654-01 Neutral citation: 2002 FCA 289 CORAM: LINDEN J.A. ROTHSTEIN J.A. SHARLOW J.A. BETWEEN: SYNTEX (U.S.A.) L.L.C., HOFFMANN-LA ROCHE LIMITED, ALLERGAN, INC, and ALLERGAN INC. Appellants (Applicants) and THE MINISTER OF HEALTH and APOTEX INC. Respondents (Respondents) REASONS FOR JUDGMENT ROTHSTEIN J.A. [1] This is an appeal from an order of Kelen J. striking out the appellants' application for judicial review on the grounds that it did not disclose any possibility of success and is an abuse of the process of the Court. [2] The facts may be briefly stated. On February 28, 2001, the respondent Apotex Inc. sent a notice of allegation under the Patented Medicines (Notice of Compliance) Regulations, SOR/93-133 as amended by SOR/98-166 and SOR/99-379, for apoketorolac solution for ophthalmic application. The appellants did not apply for an order of prohibition within the forty-five days provided under subsection 6(1) of the Regulations. [3] The appellants say that after the expiry of the forty-five day period, it came to their attention that the notice of allegation originally served on them was deceptive and misleading. They say that had they not been deceived and misled, they would have realized that Apotex's product infringed their 1,328,614 Patent and they would have filed an application for an order of prohibition within the required time. [4] On June 29, 2001, the appellants, being out of time under the Regulations, brought an application for judicial review under sections 18 and 18.1 of the Federal Court Act seeking to prohibit the Minister from issuing a notice of compliance to Apotex for apoketorolac solution. In essence, their argument is that they were entitled to do so and obtain the relief they sought because the Regulations were never engaged. In other words, they are saying that a deceptive or misleading notice of allegation is tantamount to no notice of allegation at all, that the Regulations were never engaged and that the Minister of Health has no jurisdiction to issue a notice of compliance to Apotex. [5] Kelen J. rejected that argument and, at paragraph 21 of his reasons, concluded that the appellants' application for judicial review was so clearly improper as to be "bereft of any possibility of success". I am of the opinion that this Court must reach the same result. I am in agreement with Kelen J.'s reasoning. [6] It is common ground that where a generic producer wishes to obtain a notice of compliance for a drug by comparing it to an existing drug for which a notice of compliance has already been issued, and in respect of which there is a patent on the patent register, the generic producer must comply with section 5 of the Regulations, failing which the Minister has no authority to issue the notice of compliance to the generic producer. Section 5 requires that the generic producer serve a notice of allegation on the patent holder. If the Minister issues a notice of compliance in circumstances where the generic producer has not complied with section 5, for example, by not serving a notice of allegation, the Regulations are not engaged and the notice of compliance may be quashed on judicial review under subsection 18.1(3) of the Federal Court Act. See Merck & Co. v. Nu-Pharm Inc. (2000), 5 C.P.R. (4th) 138 (F.C.A.). [7] The issue here is whether a deceptive or misleading notice of allegation is tantamount to no notice of allegation at all. [8] In my opinion, the Regulations are engaged by serving a notice of allegation on the patentee, even if that notice of allegation is deceptive or misleading. Once it is served on the patentee, the patentee must decide whether or not to seek prohibition. If the patentee fails to do so within the prescribed time, it cannot later resurrect its rights under the Regulations by bringing an application for judicial review under section 18.1 of the Federal Court Act to seek an order prohibiting the issuance of a notice of compliance or quashing any notice of compliance that might have been issued. [9] I think any other interpretation is not in accord with the scheme of the Regulations. As counsel for the Minister has pointed out, the Minister's decision to issue a notice of compliance is guided by the interplay between the parties in the notice of allegation and writ of prohibition proceedings under the Regulations. If the Minister sees that a notice of allegation satisfying the formal requirements of section 5 has been served and that no order of prohibition has been applied for within the forty-five day period, the Minister must be able to proceed on the basis that no patentee is challenging the right of the generic producer that served the notice of allegation to produce and market its drug. The Minister is not required to assess whether a notice of allegation might deceive or mislead a patentee. If a notice of allegation that satisfies the formal requirements of section 5 has been served, the Regulations are engaged and it is up to the patentee to take steps to protect its rights. I agree with counsel for Apotex that, once such a notice of allegation has been served, all proceedings must be under and within the Regulations and in accordance with the time limits provided in the Regulations. Whether the notice is deceptive or misleading or is otherwise deficient in substance, is to be determined by the Court in the prohibition proceedings commenced by the patentee. [10] The appellants say that a deceptive or misleading notice of allegation served by a generic producer is intended to place a patentee in the invidious position of incorrectly believing that the generic producer's drug will not infringe its patent and that it should not be forced to apply for an order of prohibition just to ascertain whether the generic producer's drug really will not infringe. The appellants argue that there are serious consequences to a patentee under section 8 of the Regulations if it applies for an order of prohibition that it later discontinues or withdraws. [11] I think there are two answers to this concern. The first is that there is ample discretion in a motions judge under subsection 8(5) to take into account the deceptive, ambiguous or uninformative nature of a notice of allegation that forced the patentee to apply unnecessarily for an order of prohibition. The second is that, as a practical matter, a generic producer that files a deceptive or misleading notice of allegation risks serious consequences. Such consequences may arise pursuant to prohibition proceedings under the Regulations or pursuant to an action for patent infringement. Under the Regulations, a deceptive or misleading notice of allegation may be found to be defective with the result that the allegation of non-infringement will be determined not to be justified by the generic producer, in which case, an order of prohibition will be granted. See, for example, Genpharm Inc. v. The Minister of Health and Procter & Gamble Pharmaceuticals Canada, Inc. and The Procter & Gamble Company, 2002 FCA 290. [12] If a patentee does not apply for an order of prohibition under the Regulations because of a deceptive or misleading notice of allegation, the patentee may seek punitive damages or solicitor-client costs in a patent infringement action (per Evans J.A., at page 441 of Eli Lilly & Co. v. Apotex Inc. (2000), 9 C.P.R. (4th) 439). As a result, a generic producer should be discouraged from serving a deceptive or misleading notice of allegation. [13] Apotex and the Minister argued that this appeal was moot in that the Minister recently issued a notice of compliance for Apotex's drug. It is not necessary to decide the mootness issue. [14] The appeal should be dismissed with costs. "Marshall Rothstein" J.A. "I agree A.M. Linden" "I agree K. Sharlow J.A." FEDERAL COURT OF CANADA Names of Counsel and Solicitors of Record DOCKET: A-654-01 STYLE OF CAUSE: SYNTEX (U.S.A.) L.L.C., HOFFMANN-LA ROCHE LIMITED, ALLERGAN, INC, and ALLERGAN INC. Appellants (Applicants) - and - THE MINISTER OF HEALTH and APOTEX INC. Respondents (Respondents) DATE OF HEARING: WEDNESDAY, JUNE 12, 2002 PLACE OF HEARING: TORONTO, ONTARIO REASONS FOR JUDGMENT BY: ROTHSTEIN J.A. CONCURRED IN BY: LINDEN J.A. SHARLOW J.A. DATED: JULY 7, 2002 APPEARANCES BY: Mr. Anthony George Creber Mr. Patrick Smith For the Appellants (Applicants) Mr. Frederick B. Woyiwada For the Respondent (The Minister of Health) Mr. Andrew R. Brodkin Ms. Julie M. Perrin For the Respondent (Apotex Inc.) SOLICITORS OF RECORD:GOWLING LAFLEUR HENDERSON LLP 2600-160 Elgin Street, P.O. Box 466 Stn. D Ottawa, Ontario K1P 1C3 For the Appellants (Applicants) Morris Rosenberg Deputy Attorney General of Canada For the Respondent (The Minister of Health) GOODMANS LLP Barristers & Solicitors 250 Yonge Street, Suite 2400 Toronto, Ontario M5B 2M6 For the Respondent (Apotex Inc.) FEDERAL COURT OF APPEAL Date: 20020708 Docket: A-654-01 BETWEEN: SYNTEX (U.S.A.) L.L.C., HOFFMANN-LA ROCHE LIMITED, ALLERGAN, INC, and ALLERGAN INC. Appellants (Applicants) - and - THE MINISTER OF HEALTH and APOTEX INC. Respondents (Respondents) REASONS FOR JUDGMENT OF THE COURT