Date: 20021202
Docket: T-660-02
Neutral citation: 2002 FCT 1250
BETWEEN:
ASTRAZENECA CANADA INC.,
Applicant
- and -
APOTEX INC., TAKEDA CHEMICAL INDUSTRIES LTD.
and THE MINISTER OF HEALTH,
Respondents.
[1] The respondent Apotex Inc. (Apotex) brings this motion for an order setting aside the order of a prothonotary dated August 27, 2002 dismissing the motion of Apotex to dismiss the application of the applicant Astrazeneca AB and Astrazeneca Canada Inc. (Astrazeneca). Apotex asks that the Court, pursuant to paragraph 6(5)(b) of the Patented Medicines (Notice of Compliance) Regulations, SOR/93-133 amended by SOR/98-166 and SOR/99-397 (the Regulations), dismiss Astrazeneca's application on the ground that the application is redundant, scandalous, frivolous, vexatious or an abuse of process.
[2] Astrazeneca's application is for an order prohibiting the Minister of Health (the Minister) from issuing a Notice of Compliance (NOC) to Apotex regarding its Apo-Omeprazole tablets for the full term of Canadian Patent No. 1,338,377 (the '377 patent).
[3] The '377 patent claims a composition comprising a benzimidazole compound, a basic inorganic salt stabilizing agent selected from potassium, sodium and aluminum salts, and an enteric coating. Apotex, on March 4, 2002, provided a Notice of Allegation (NOA) in respect of tablets for oral administration containing omeprazole in 10, 20 and 40 mg strengths and alleged that no claim for the medicine itself and no claim for the use of the medicine in the '377 patent would be infringed by the making, constructing, using or selling by Apotex of its omeprazole tablets. More specifically, Apotex asserted that its tablets will not fall within the scope of any claim of the '377 patent and particularly that its tablets will not contain any of the specified stabilizing agents.
[4] Astrazeneca commenced its application seeking an order of prohibition on April 23, 2002. Astrazeneca asserted four grounds in support of its request: first, that the Apotex product would contain one of the specified stabilizing agents; second, that Apotex did not have a New Drug Submission (NDS) pending with the Minister at the relevant material time as required by the Regulations; third that the NOA does not comply with the Regulations because Apotex failed to identify the drug or active ingredient contained in its tablets, and fourth, that Apotex is precluded from relying upon the NOA by reason of the doctrines of res judicata, abuse of process and estoppel. Astrazeneca filed two affidavits in support of its application.
[5] Apotex, in response, filed the affidavit of its chair, Dr. Bernard Sherman, deposing that Apotex' NDS was filed prior to service of the NOA and that any similar previous allegations served by Apotex were withdrawn due to regulatory difficulties. The affiant attached to his affidavit prior testimony and documents regarding prior regulatory difficulties. Finally, he deposed that the Apotex tablets will not contain a stabilizing agent as claimed in the '377 patent.
[6] By notice of motion dated June 24, 2002, Apotex sought summary dismissal of the Astrazeneca application. The motion was heard by the prothonotary on August 12, 2002. The prothonotary determined that the motion could not succeed. The crux of his reasoning is contained in the following paragraph of his order dated August 27th:
Although Apotex's submissions regarding the first three grounds listed above are persuasive, I am unable to conclude, on the basis of the evidence before me, that the Applicant cannot possibly succeed on the last ground, namely that the Notice of Allegation constitutes an abuse of process. The Applicant alleges that the Notice of Allegation is neither separate nor distinct from prior allegations made by Apotex in Court files T-180-98 and 179-98 that its tablets would not contain a salt specified in the '377 patent. In my view, the facts in the present proceeding, in which the credibility of Apotex's deponent is at issue, are distinguishable from those before Blais, J., in T-1747-00 and McKeown, J., in T-2026-99, where both judges were able to conclude that prior proceedings brought by Apotex were withdrawn solely on the basis of certain difficulties encountered by Apotex.
[7] The parties agree that the decision of a prothonotary to dismiss, or not to dismiss, a proceeding pursuant to paragraph 6(5)(b) of the Regulations is vital to the final issue in the proceeding, as such a decision has the potential to finally determine the proceeding. Accordingly, the standard of review is that of correctness and the reviewing judge ought to assess the issues on the appeal de novo: Canada v. Aqua-Gem Investments Ltd., [1993] 2 F.C. 425 (C.A.).
[8] A notice of application will be struck out only in very exceptional circumstances when the application is so clearly improper as to be bereft of any possibility of success: David Bull Laboratories (Canada) Inc. v. Pharmacia Inc. et al., [1995] 1 F.C. 588 (C.A.). Apotex must therefore demonstrate that each of the grounds advanced by Astrazeneca is futile.
[9] I propose to examine first, the ground upon which the prothonotary based his decision, i.e., whether the applicant cannot possibly succeed on the basis that the NOA constitutes an abuse of process. This ground alleges that Apotex should not be permitted to rely upon the NOA in light of previous NOAs which gave rise to proceedings in Court File Nos. T-179-98 and
T-180-98.
[10] On December 17, 1997 and December 18, 1997, Apotex served two NOAs in respect of omeprazole tablets and omeprazole magnesium tablets, respectively. In response to these NOAs, prohibition proceedings were commenced under the above-noted Court file numbers. Following the commencement of these two proceedings, Apotex alleges that it encountered difficulties with respect to complying with the health and safety requirements of the Food and Drugs Act and the Food and Drug Regulations. Apotex's counsel approached the applicants' counsel and ultimately, an agreement was reached whereby the two NOAs were withdrawn. By order of the Federal Court of Canada dated May 18, 1999, the NOAs giving rise to the proceedings were deemed to be withdrawn and the applications were deemed to be discontinued. It is noteworthy that while Astrazeneca acknowledges that Dr. Sherman gave evidence that the prior proceedings were withdrawn because of formulation difficulties, it maintains that, on cross-examination, Dr. Sherman was unable or unprepared to provide any details relating to when such difficulties were encountered, other than to indicate that there are always difficulties in formulation until a product is submittable to the Minister.
[11] At the time the agreement was reached, Astrazeneca did not request and did not make it a term of the Order that Apotex would be precluded from serving a subsequent NOA in relation to the '377 patent. Similarly Astrazeneca did not provide any assurances to Apotex that, should Apotex file a subsequent NOA, Astrazeneca would not plead abuse of process on the basis that a generic may not re-litigate an allegation based upon the same legal and factual basis asserted in a previous proceeding, or that the generic is precluded from raising matters which could have been previously raised. In short, Astrazeneca alleges that the NOA is an abuse of process as it is not separate and distinct from the prior allegations. In the previously noted proceedings, Astrazeneca argues that Apotex made the exact same allegation that its tablets will not contain a salt specified in the '377 patent. The present NOA is, therefore, not an allegation contemplated by the Regulations.
[12] Apotex submits that it is settled law that it is not an abuse of process to re-serve the same NOA where the NOA was previously withdrawn due to regulatory difficulties. It argues that in three separate decisions involving the same parties, the same drug and the same counsel as here, the Federal Court has held that there was no abuse on the part of Apotex in re-serving the NOAs that were withdraw. Apotex strenuously insists that there is nothing in the factual record in this proceeding, which differs from the record in the prior proceedings; that the prior proceedings are precisely the same, and that the evidence in respect of those prior proceedings is precisely the same. Therefore, Apotex says that it is clear that this issue is bereft of merit and that the prothonotary erred in law in concluding that it was not.
[13] Astrazeneca argues contra and says that the prior proceedings referred to by Apotex were not the same. One of the prior proceedings involved different patents and different facts. The other proceeding involved an agreement between the parties related to filing a further allegation in respect of capsules (as opposed to tablets) and the agreement placed certain limitations on Astrazeneca's right to advance an argument on abuse. That is not the case here. Moreover, Astrazeneca submits that the determination on the merits was based on the factual record that was significantly different than the record in this case. Specifically, the evidence of Dr. Sherman related to capsules, not tablets and his evidence was not challenged by cross-examination as it has been here.
[14] Astrazeneca challenges the credibility of Dr. Sherman and argues that, to the extent that his evidence supports the Apotex position, it ought to be disregarded because: he has a personal interest in the outcome of this proceeding; he does not have the knowledge or expertise to construe the "salts" referred to in the '377 patent; his assertion that the tablets will not contain a salt specified in the '377 patent is not credible and was directly contradicted by Apotex' own product monograph; his present position that the presence of a stabilizing agent in the enteric coating is not relevant and is not consistent with the assertion made in the prior allegation; his evidence in another related proceeding regarding the absence of any reference to the concomitant administration of omeprazole and an antibiotic was directly contradicted by the contents of an Apotex document subsequently produced; he admitted that he could not confirm that all of his evidence is necessarily correct, and his evidence has been previously rejected as lacking credibility. Astrazeneca submits that there is a serious issue as to the credibility of Dr. Sherman's evidence and that the issue requires a finding of fact, which can and should only be made by the judge hearing the application because determination of credibility, on a motion for summary dismissal, is inappropriate.
[15] A motion to dismiss pursuant to paragraph 6(5)(b) of the Regulations is not a forum for a determination of the merits of an application. The task of the motions judge is to determine whether the application is so clearly improper as to be bereft of any possibility of success. Here, with respect to the ground of whether the NOA is an abuse of process, much will turn on the evidence of Dr. Sherman. His credibility is important because it is directly relevant to several issues, not the least of which is whether the previous NOAs were withdrawn due to regulatory difficulties. Astrazeneca has enumerated a number of differences that exist between the previous proceedings and this one, the cross-examination of Dr. Sherman and the resulting concern with credibility being, in my view, the most significant. I cannot conclude, on a summary application, notwithstanding that the argument was in excess of four hours on a general sittings day, that this ground is so clearly improper as to be bereft of any possibility of success. Apotex has failed to persuade me that this is the case. Having so concluded, I need not address the other grounds argued.
[16] The motion is dismissed. Costs will be costs in the cause.
___________________________________
Judge
Ottawa, Ontario
December 2, 2002
FEDERAL COURT OF CANADA
Names of Counsel and Solicitors of Record
DOCKET: T-660-02
STYLE OF CAUSE: ASTRAZENECA CANADA INC.
Applicant
- and -
APOTEX INC., TAKEDA CHEMICAL
INDUSTRIES LTD. and
THE MINISTER OF HEALTH,
Respondents
PLACE OF HEARING: TORONTO, ONTARIO
DATE OF HEARING: OCTOBER 28, 2002
REASONS FOR ORDER
BY: LAYDEN-STEVENSON J.
APPEARANCES BY: Mr. Gaikis
For the Applicant
Mr. Brodkin
For the Respondent
SOLICITORS OF RECORD: Gunars Gaikis
Smart and Biggar
Toronto, Ontario
For the Applicant
Andrew Brodkin
Goodmans LLP
Toronto, Ontario
For the Respondent