Date: 20011101
Docket: T-1167-01
Neutral Citation: 2001 FCT 1185
BETWEEN:
SYNTEX (U.S.A.) L.L.C., HOFFMANN-LA ROCHE LIMITED,
ALLERGAN, INC. and ALLERGAN INC.
Applicants
-and-
MINISTER OF HEALTH and
APOTEX INC.
Respondents
REASONS FOR ORDER AND ORDER
KELEN J.
[1] This is a motion by the respondent Apotex Inc. ("Apotex") to strike out the applicants' application for judicial review ("the application") pursuant to sections 18 and 18.1 of the Federal Court Act for a writ of prohibition and a declaration on the ground that the application discloses no reasonable cause of action, is scandalous, frivolous, vexatious, and redundant, and is an abuse of the process of the Court.
[2] The applicants seek a writ of prohibition prohibiting the respondent Minister of Health from granting a Notice of Compliance ("NOC") to Apotex for the medicine Apo-Ketorolac on the ground that Apotex has served a Notice of Allegation which contains "deceptive and misleading" information.
[3] The applicants also seek a declaration that the respondent Apotex must "fully comply" with the Patented Medicines (Notice of Compliance) Regulations ("Regulations") before a Notice of Compliance for Apo-Ketorolac can be granted by the respondent Minister of Health.
[4] The application is pursuant to sections 18 and 18.1 of the Federal Court Act, and not pursuant to the Regulations, because the applicants' right to proceed under the Regulations is barred by the forty-five (45) day limitation period under section 6 of the Regulations.
Position of the Applicants
[5] The applicants state that Apotex' Notice of Allegation served pursuant to the Regulations in this matter contains "deceptive and misleading information". The Notice of Allegation is a letter from Apotex dated February 28th, 2001 which states that its Apo-Keterolac does not contain one of the main components of the applicant's patented medicine, patented under Canadian letters patent No.1,328,614. The applicants state that this is inconsistent with the new drug submission filed in the U.S. for the same medicine.
[6] The applicants' evidence is that the information about the "misleading and deceptive" information only came to their attention after the forty-five (45) day time period under the Regulations had expired. The applicants do not seek an extension of time under the Regulations because the jurisprudence establishes that such extensions will not be granted.
Position of Apotex
[7] Apotex objected to this characterization of its allegation. In a letter from Apotex dated May 30, 2001 it is stated:
"We object to your suggestion that our Notice of Allegation dated February 28, 2001 was intentionally deceiving.
Our Notice of Allegation is clear in its terms. It specifically provides that our "formulation does not comprise component (b)[...]"
[8] At the hearing of this motion Apotex submitted that:
i. the applicants' position is based upon the faulty assumption that the Canadian medicine will be the same as the U.S. medicine; and,
2. that the record does not disclose any "deception" or inconsistency.
Apotex submitted that the medicine in Canada need not be the same as in the U.S. The products can be different in the two countries. At the hearing Apotex repeated that its Canadian medicine would not contain "component (b)".
[9] Apotex submits that the Regulations provide a complete code with respect to a submission for an order of prohibition pursuant to the Regulations. Under the Regulations, the applicants can,
in accordance with subsection 6(1), apply to this Court for an order prohibiting the Minister from
issuing the NOC, but this right to prohibition must be exercised within forty-five (45) days after being served with a Notice of Allegation. In this case, the applicants have not acted within the forty-five day limitation. It is urged by Apotex that the applicants may not now bring their application for prohibition pursuant to sections 18 and 18.1 of the Federal Court Act.
Position of the Minister of Health
[10] The Minister of Health supported Apotex. The Minister submitted that an untrue Notice of Allegation does not mean that a patentee can avoid the time limitations in the Regulations by commencing an application for prohibition or certiorari under section 18 and 18.1 of the Federal Court Act. The Minister urges that if a patentee is unsure whether a new drug submission will infringe its patent, it must file an application for prohibition within forty-five (45) day period under the Regulations. The purpose of the Regulations would be rendered nugatory if a party were permitted to question an NOC by submitting that it was obtained upon false information.
Legal Analysis
[11] In Merck Frosst Canada Inc. v. Apotex Inc. (1997), 72 C.P.R. (3d) 170 (FCA) the Court held that the Regulations are a complete code, that the Regulations establish the rights of the patentee to prohibition, and that the Regulations "override" any other Act or Regulation including the Federal Court Act. However, the applicants have the rights of a patentee to sue for infringement of the patent, for an interlocutory injunction, and for possibly for punitive damages if Apotex has
misrepresented the medicine for the purpose of the Regulations. The Court held in that decision that if a party misses a time period under the Regulations, that party is obliged to commence an ordinary action for patent infringement if it wishes to protect its interests.
[13] That decision of the Court of Appeal was followed in Merck Frosst Canada Inc. v. Canada (Minister of National Health and Welfare) (1997),72 C.P.R. (3d) 453 (F.C.T.D.) by Rothstein J. (as he then was) who stated at page 459:
"[...] the Regulations provide an extraordinary means of protection for pharmaceutical patentees in respect of infringement beyond an infringement action, which remains for the patentees to invoke. Except for the Regulations, the fact that a generic competitor may be infringing a patent would not confer on the patentee the right to prevent the Minister from issuing a NOC, because a NOC is simply a ministerial approval for the purposes of the Food & Drugs Act, R.S.C., 1985, c. F-27."
Mr. Justice Rothstein refused to order certiorari to quash an NOC based on false information. In that case, the Court considered availability of certiorari,which like prohibition, arises as a result of judicial review.
[14] In Hoffmann-La Roche Ltd. v. Canada (Minister of National Health and Welfare) (1998), 85 C.P.R. (3d) 50 (F.C.T.D.) the applicants sought prohibition with respect to a Notice of Allegation which contained false information regarding the ingredients of the medicine. Rothstein, J. (as he then was) said at page 55:
"Certainly, if Pro Doc's ticlopidine hydrochloride reaches the market, the applicants will have an opportunity to analyse it. If it were shown to contain one of the acids listed in claim 1, contrary to Pro Doc's notice of allegation, the consequences for Pro Doc could be very serious indeed. In the circumstances here, as in the prior cases involving the '170 patent, I accept that Pro Doc intends its notice of allegation to be accurate."
In this case, if the drug does contain an ingredient which Apotex stated in its Notice of Allegation was not in the Apo-Ketorolac drug, then the applicants may bring an action for infringement of patent, and as Mr. Justice Rothstein said; "the consequences ... could be very serious indeed".
[15] In Eli Lilly and Co. v. Apotex Inc. (2000), 9 P.R. (4th) 439 (F.C.A.), the Federal Court of Appeal refused to order certiorari to quash a NOC under the Regulations because there were discrepancies between the detailed statement provided by Apotex in its Notice of Allegation and the content of the new drug submission (NDS) filed by Apotex with the Minister in support of its application for an NOC. In that case, the appellant alleged that the Notice of Allegation was misleading. Evans J. A. delivering the reasons for the Court, stated at page 442:
"Suffice it to say that certiorari is an extraordinary remedy granted in the discretion of the Court. It will not normally issue, even when administrative action can be shown to have been vitiated by error, if there is an adequate alternative remedy available to the appellant."
In the case at bar, prohibition is similarly an extraordinary remedy. Evans, J.A. continued:
"In our view, even if, as Lilly alleges, the Minister issued the NOC when Apotex had not served a complete and accurate detailed statement in accordance with the Regulations, it was appropriate for the Motions Judge to conclude that Lilly should be left to resort to the private law rights and remedies available to it as a patent holder."
Here, the Minister has not issued a Notice of Compliance and Apotex' product in issue is not on the market. If and when it is on the market, it may be tested. If it is found to contain "component b", then the applicants may bring an action for patent infringement, an injunction, and punitive damages.
[16] Eli Lilly (supra.) considered fraud. Counsel for the applicants was careful not to use the word "fraud" when characterising Apotex' Notice of Allegation, and the alleged inconsistency. Upon questioning counsel for the applicants it is clear that the applicants are not alleging fraud. Upon reviewing the affidavit evidence and documents, it is unclear whether the Canadian description of the medicine and the U.S. description of the medicine are consistent. However, it is clear that Apotex states that it does not intend to sell the medicine in Canada with "component b". Accordingly, in the case at bar, I do not need to decide whether the Court has jurisdiction if a party has used fraud to obtain a Notice of Compliance. In Eli Lilly (supra.), Evans, J.A. held at page 443, paragraph 14:
"We also note that Lilly does not allege that Apotex was guilty of fraud or deception. Such an allegation, if proved, might justify the grant of certiorari when a first person or the Minister has been deceived. However, the facts of the case before us do not require that the NOC be quashed in Order, either to maintain the integrity of the statutory scheme created by the Regulations, or to remedy any injustice that Lilly might have suffered."
[17] In Hoffman-Laroche Ltd. v. Canada (Minister of National Health & Welfare) (1996), 70 C.P.R. (3d) 206 the applicants brought a motion for prohibition under the Regulations. A similar issue was raised as the issue at bar. In that case, the respondent claimed that it does not use one of the assets listed in the patent. Stone J.A., delivering reasons for the Court, said at page 213:
"I have no doubt, nevertheless, that such an allegation is intended to be accurate. Once a second person's product reaches the market the first person is in a position to test the accuracy of the detailed statement; if it were shown to be inaccurate, the consequences for a second person could well be very grave indeed."
Conclusion
[18] The cases show a pattern where the patentee alleges that the generic drug company's new drug submission contains inaccurate or misleading information. The Federal Court of Appeal has
repeatedly held that a patentee is in a position to test the accuracy of a generic drug manufacturer's statements with respect to the drug after the product reaches the market, and if these statements are shown to be inaccurate, the consequences for the generic drug company "could well be very grave indeed". The patentee has a common law action for an infringement of the patent, an injunction and
punitive damages may lie in such cases.
[19] The jurisprudence establishes that applications under under sections 18 and 18.1 of the Federal Court Act for prohibition or a declaration do not normally lie with respect to a Notice of Allegation under the Regulations. In any event, an application for a declaration that a party must comply with the law is redundant and unnecessary. There is no application for a declaration that a party must comply with the law.
Motion to Strike
[20] There are no Federal Court rules pertaining to motions to strike applications for judicial review. In David Bull Laboratories (Canada Inc.) v. Pharmacia Inc. [1995] 1 F.C. 588 (C.A.) the Court held that there is an inherent jurisdiction:
" ... to dismiss in a summary manner a notice of motion which is so clearly improper as to be bereft of any possibility of success. Such cases must be very exceptional and cannot include cases such as the present where there is simply a debatable issue as to the adequacy of the allegations in the notice of motion."
[21] In the case at bar I am satisfied that the applicants' application for prohibition and a declaration is bereft of any possibility of success. If the patentee is unsure whether the Notice of
Allegation describes a new drug or describes a new drug in sufficient detail for the patentee to know whether or not the patent will be infringed, then the patentee seeking to protect its patent interests is obliged to take action within forty-five (45) days under section 6 of the Regulations. Thereafter the patentee must wait until the new drug enters the market, test the new drug, and then commence appropriate legal action for infringement of its patent if the new drug does in fact contravene the patent. If the generic drug manufacturer has misrepresented the new drug in a Notice of Allegation under the Regulations, then the patentee has a cause of action. The purpose of the Regulations is to provide for an expeditious procedure for new drugs, while protecting the rights of patentees. If an issue arises outside the time periods provided for in the Regulations, the patentee must use its common law rights.
ORDER
[22] Accordingly, this application for judicial review is struck out on the grounds that it does not disclose any possibility of success and is an abuse of the process of this Court. This motion to strike is allowed with costs.
"Michael A. Kelen" ____________________
JUDGE
OTTAWA, ONTARIO
NOVEMBER 1, 2001