Hassle v. Apotex Inc.

Hassle v. Apotex Inc.
Court (s) Database
Federal Court Decisions
Date
2001-05-25
Neutral citation
2001 FCT 530
File numbers
T-1747-00
Notes
Digest
Decision Content
Date: 20010525
Docket: T-1747-00
Neutral Citation: 2001 FCT 530
BETWEEN:
AB HASSLE, ASTRAZENECA AB and
ASTRAZENECA CANADA INC.
Applicants
- and -
APOTEX and THE MINISTER OF HEALTH
Respondents
REASONS FOR ORDER AND ORDER
BLAIS J.
[1] This is a motion for:
1. An order setting aside the order of the Prothonotary, dated November 29, 2000 which granted a motion by Apotex Inc. for an order pursuant to s.6(5)(b) of the Patented Medicines (Notice of Compliance) Regulations ("Regulations") dismissing the within application as frivolous, vexatious and an abuse of process;
2. An order setting aside the order of Prothonotary dated November 29, 2000 which dismissed the applicants' motion for an order requiring Drs. Sherman and Sefton to re-attend to answer certain questions refused on cross-examination;
3. An order extending the time for filing the applicants' evidence on the merits until thirty (30) days following the disposition of the applicants' motion for disclosure under subsection 6(7) of the Regulations.
FACTS
[2] The applicants commenced an application for an order prohibiting the respondent the Minister of Health ("Minister"), from issuing a notice of compliance ("notice of compliance") to the respondent Apotex in respect of omeprazole and/or omeprazole magnesium tablets, 10mg, 20 mg and 40 mg until after the expiration of Canadian Patents 1,292,693 ("‘693"), 1,302,891("‘891") and 2,166,486("‘483") (the "Patents"). The application is also for a declaration that Apotex' letter of August 1, 2000 does not comply with and does not constitute a notice of allegation under the Regulations.
[3] By letter dated August 1, 2000, Apotex provided a notice of allegation pursuant to the Regulations in respect of Apo-Omeprazole tablets for oral administration in strengths of 10, 20 and 40 mg ("notice of allegation"). In the notice of allegation, Apotex stated that no claim for the medicine itself and no claim for the use of the medicine in the Patents would be infringed by the making, constructing, using or selling by Apotex of its Apo-Omeprazole tablets.
[4] In its notice of allegation, Apotex explained that the Patents cover pharmaceutical compositions comprising three elements, namely: a core containing a medicine, an inert subcoating, and an outer enteric coating. The disclosures of the Patents teach that the inert subcoating is applied to the core before the enteric coating is applied in order to separate the core from the enteric coating to prevent degradation.
[5] In its notice of allegation, Apotex asserted that its Apo-Omeprazole tablets do not fall within the scope of the Patents because they are comprised of a core containing the drug, and an enteric coating applied directly to the cores without any subcoating between the cores and the enteric coating. Apotex asserted that its tablets will not infringe by reason of there being no subcoating between the cores and the enteric coating.
[6] In response to the notice of allegation, the applicants commenced the within proceeding.
[7] By notice of motion dated October 6, 2000, Apotex brought a motion seeking to dismiss the proceeding as being frivolous, vexatious and an abuse of process. Also by notice of motion dated October 6, 2000, the applicants brought a motion seeking production of portions of Apotex' new drug submission.
[8] According to Apotex, the applicants sought to have their motion heard prior to the hearing of Apotex' motion to dismiss the proceeding. Regarding the applicants' motion, the Prothonotary, by order dated October 16, 2000, ordered that the times for completion of the various steps stated in the order be extended to a date to be fixed at a hearing on November 10, 2000. It was also ordered that the applicants' motion be otherwise adjourned sine die to be spoken to on November 10, 2000.
[9] By order dated October 17, 2000, the Prothonotary ordered that Apotex' motion for dismissal of the applicants' application be adjourned and set down for hearing on November 10, 2000.
[10] On November 10, 2000, the applicants brought a motion seeking an order requiring Apotex' affiants to re-attend for further cross-examination to answer the questions refused.
DECISIONS OF THE PROTHONOTARY
[11] By order dated November 29, 2000, the Prothonotary dismissed the applicants' motion for re-attendance of Apotex' affiants. The Prothonotary observed that the questions that Dr. Sherman refused to answer referred to his statements that when the previous letters of allegation were withdrawn he was having difficulties with formulation.
[12] The Prothonotary found that answers to such questions would not be relevant because the reasons for the withdrawal of the notices of application were not relevant as they never proceeded to a hearing on the merits and res judicata would not be involved.
[13] As for the questions asked of Dr. Sefton, the Prothonotary noted that they were relevant to the interpretation of certain words in the Patents such as "coating", "covering", and "disposing". The Prothonotary found that because it would not be necessary to decide the meaning of such words for the purpose of deciding a motion to strike in connection with which the affidavit was filed, the answers to the questions were not considered relevant and re-attendance was not ordered.
[14] As for Apotex' motion to dismiss the application, the Prothonotary considered the applicants' reasons why Apotex' motion should not succeed.
[15] Regarding the applicants' allegation that the drug was not identified in the letter of allegations, the Prothonotary noted that the Patents refer to two drugs and its magnesium salt. The Prothonotary further observed that it had been pointed out in the cases that it is not necessary to identify which drug is the subject of the allegations and that the regulations themselves do not require it. The Prothonotary noted that the reason given by Apotex, namely two steps instead of three, applies to both drugs referred to in the Patents.
[16] As for the allegation that the issue had already been the subject of litigation, the Prothonotary concluded that the matter was not res judicata since proceedings were commenced some years ago but were withdrawn on consent without being tried on the merits and no conditions were then imposed.
[17] The applicants maintained that Apotex' allegations were inaccurate because the reaction of the enteric outer layer with the substances in the core layer results in an intervening or third layer. The Prothonotary concluded that the allegations themselves were the substance of the issue to be decided and that inaccuracy would result in penalties if the allegations were untrue. A decision in this scenario would also depend on the construction of the patent, a matter that the Prothonotary dealt with later.
[18] The Prothonotary did not accept the applicants' submission that disposition of the motion should be delayed until the contents of the new drug submission were known to the applicants since the allegations with respect to Apotex' new drug was the determining factor.
[19] The Prothonotary concluded that it was quite plain that the two steps procedure could not infringe the three steps procedure as it would not end up with a centre layer deployed before the outer layer was added.
[20] The Prothonotary granted Apotex' motion to dismiss the applicants' application as frivolous, vexatious and abusive.
ISSUES
1. Is it beyond doubt that the applicants cannot possibly succeed on the issue of whether the notice of allegation complies with the Regulations on the basis that:
(a) the notice of allegation must identify the drug; and
(b) the notice of allegation is an abuse of process
2. Is it beyond doubt that the applicants cannot possibly succeed on any of the following issues relating to whether Apotex' allegation of non-infringement is justified:
(a) whether the allegation can be justified on the specific legal and factual basis detailed in the notice of allegation;
(b) does the applicants' pending motion for disclosure preclude a motion for summary dismissal;
(c) with respect to the construction of patent:
(i) is the patent construction argued by Apotex detailed in the notice of allegation;
(ii) if so, should the question of construction be left for a hearing on the merits;
(iii) if not, does construction require consideration of expert evidence;
(iv) if so, what is the proper construction; and
(v) if the claims as construed are process-dependent composition claims, does the presumption of infringement apply.
ANALYSIS
Standard of review
[21] The standard of review of a prothonotary's order was set out as follows by the Federal Court of Appeal in Canada v. Aqua-Gem Investments Ltd., [1993] 2 F.C. 425 (F.C.A.):
I also agree with the Chief Justice in part as to the standard of review to be applied by a motions judge to a discretionary decision of a prothonotary. Following in particular Lord Wright in Evans v. Bartlam, [1937] A.C. 473 (H.L.) at page 484, and Lacourciere J.A. in Stoicevski v. Casement (1983), 43 O.R. (2d) 436 (Div. Ct.), discretionary orders of prothonotaries ought not to be disturbed on appeal to a judge unless:
(a) they are clearly wrong, in the sense that the exercise of discretion by the prothonotary was based upon a wrong principle or upon a misapprehension of the facts, or
(b) they raise questions vital to the final issue of the case.
Where such discretionary orders are clearly wrong in that the prothonotary has fallen into error of law (a concept in which I include a discretion based upon a wrong principle or upon a misapprehension of the facts), or where they raise questions vital to the final issue of the case, a judge ought to exercise his own discretion de novo.
Regulatory regime
[22] Pursuant to section 5 of the Regulations, a generic manufacturer ("second person") that wishes to compare its drug product to that of a patentee ("first person") must serve a notice of allegation alleging either that the patent has expired, is not valid, or will not be infringed by the second person. Section 5 of the Regulations provides:
5. (1) Where a person files or has filed a submission for a notice of compliance in respect of a drug and compares that drug with, or makes reference to, another drug for the purpose of demonstrating bioequivalence on the basis of pharmaceutical and, where applicable, bioavailability characteristics and that other drug has been marketed in Canada pursuant to a notice of compliance issued to a first person and in respect of which a patent list has been submitted, the person shall, in the submission, with respect to each patent on the register in respect of the other drug,
(a) state that the person accepts that the notice of compliance will not issue until the patent expires; or
(b) allege that
(i) the statement made by the first person pursuant to paragraph 4(2)(c) is false,
(ii) the patent has expired,
(iii) the patent is not valid, or
(iv) no claim for the medicine itself and no claim for the use of the medicine would be infringed by the making, constructing, using or selling by that person of the drug for which the submission for the notice of compliance is filed.
(1.1) Subject to subsection (1.2), where subsection (1) does not apply and where a person files or has filed a submission for a notice of compliance in respect of a drug that contains a medicine found in another drug that has been marketed in Canada pursuant to a notice of compliance issued to a first person and in respect of which a patent list has been submitted, the person shall, in the submission, with respect to each patent included on the register in respect of the other drug containing the medicine, where the drug has the same route of administration and a comparable strength and dosage form,
(a) state that the person accepts that the notice of compliance will not issue until the patent expires; or
(b) allege that
(i) the statement made by the first person pursuant to paragraph 4(2)(c) is false,
(ii) the patent has expired,
(iii) the patent is not valid, or
(iv) no claim for the medicine itself and no claim for the use of the medicine would be infringed by the making, constructing, using or selling by that person of the drug for which the submission for the notice of compliance is filed.
[...]
(3) Where a person makes an allegation pursuant to paragraph (1)(b) or (1.1)(b) or subsection (2), the person shall
a) provide a detailed statement of the legal and factual basis for the allegation;
(b) if the allegation is made under any of subparagraphs (1)(b)(i) to (iii) or (1.1)(b)(i) to (iii), serve a notice of the allegation on the first person;
(c) if the allegation is made under subparagraph (1)(b)(iv) or (1.1)(b)(iv),
(i) serve on the first person a notice of the allegation relating to the submission filed under subsection (1) or (1.1) at the time that the person files the submission or at any time thereafter, and
(ii) include in the notice of allegation a description of the dosage form, strength and route of administration of the drug in respect of which the submission has been filed; and
(d) serve proof of service of the information referred to in paragraph (b) or (c) on the Minister.
[23] Section 6 of the Regulations provides that, in response to a notice of allegation, a first person may commence a proceeding seeking to prohibit the issuance of a notice of compliance to the second person. Section 6 of the Regulations reads as follows:
6. (1) A first person may, within 45 days after being served with a notice of an allegation pursuant to paragraph 5(3)(b) or (c), apply to a court for an order prohibiting the Minister from issuing a notice of compliance until after the expiration of a patent that is the subject of the allegation.
(2) The court shall make an order pursuant to subsection (1) in respect of a patent that is the subject of one or more allegations if it finds that none of those allegations is justified.
(3) The first person shall, within the 45 days referred to in subsection (1), serve the Minister with proof that an application referred to in that subsection has been made.
(4) Where the first person is not the owner of each patent that is the subject of an application referred to in subsection (1), the owner of each such patent shall be made a party to the application.
(5) In a proceeding in respect of an application under subsection (1), the court may, on the motion of a second person, dismiss the application
(a) if the court is satisfied that the patents at issue are not eligible for inclusion on the register or are irrelevant to the dosage form, strength and route of administration of the drug for which the second person has filed a submission for a notice of compliance; or
(b) on the ground that the application is redundant, scandalous, frivolous or vexatious or is otherwise an abuse of process.
(6) For the purposes of an application referred to in subsection (1), where a second person has made an allegation under subparagraph 5(1)(b)(iv) or (1.1)(b)(iv) in respect of a patent and where that patent was granted for the medicine itself when prepared or produced by the methods or processes of manufacture particularly described and claimed or by their obvious chemical equivalents, it shall be considered that the drug proposed to be produced by the second person is, in the absence of proof to the contrary, prepared or produced by those methods or processes.
(7) On the motion of a first person, the court may, at any time during a proceeding,
(a) order a second person to produce any portion of the submission for a notice of compliance filed by the second person relevant to the disposition of the issues in the proceeding and may order that any change made to the portion during the proceeding be produced by the second person as it is made; and
(b) order the Minister to verify that any portion produced corresponds fully to the information in the submission.
(8) A document produced under subsection (7) shall be treated confidentially.
(9) In a proceeding in respect of an application under subsection (1), a court may make any order in respect of costs, including on a solicitor-and-client basis, in accordance with the rules of the court.
(10) In addition to any other matter that the court may take into account in making an order as to costs, it may consider the following factors:
(a) the diligence with which the parties have pursued the application;
(b) the inclusion on the certified patent list of a patent that should not have been included under section 4; and
(c) the failure of the first person to keep the patent list up to date in accordance with subsection 4(6).
[24] The prohibition proceedings provided by section 6 of the Regulations are considered a draconian remedy. In Apotex Inc v. Bristol-Myers Squibb Canada Inc., [2001] F.C.J. No. 16 (F.C.A.), the Federal Court of Appeal stated:
When a patent holder commences a prohibition application under the Regulations, the Minister's authority to issue the notice of compliance for the new drug is automatically stayed pending the determination of the prohibition proceedings. This automatic stay is in place for a maximum of 24 months, unless extended pursuant to Regulation 7(5). The automatic stay prescribed by the Regulations has been described as draconian because it permits a patent holder to delay the entry of competitors into the market without having to establish even a prima facie case of patent infringement: Apotex v. Merck Frosst Canada Inc., [1998] 2 S.C.R. 193, (1998) 80 C.P.R. (3d) 368.
[25] Subsection 6(5) of the Regulations provides for a second person to bring a motion for dismissal of an application brought under subsection 6(1) of the Regulations. The Court may dismiss the application if it is satisfied that the patents at issue are not eligible for inclusion on the register or are irrelevant to the dosage form, strength and route of administration of the drug for which the second person has filed a submission for a notice of compliance or on the ground that the application is redundant, scandalous, frivolous or vexatious or is otherwise an abuse of process.
Burden of proof and standard on a motion pursuant to subsection 6(5)(b) of the Regulations
[26] In Bayer Inc. v. Apotex Inc, (1998) 85 C.P.R. (3d) 334 (F.C.T.D.), Joyal J. held:
The Court, in the context of the evidence and arguments advanced by the parties, must keep in mind that this proceeding is more iffy than the dispute respecting the adequacy or otherwise of Bayer's response to Apotex's NOA. The application is for an order dismissing Bayer's prohibition proceedings on grounds that they are redundant, scandalous, frivolous or vexatious or otherwise an abuse of process, whole, as is now specifically provided in paragraph 6(5)(b) of the Regulations.
In that respect, Bayer alleges that to succeed under the procedure, Apotex must establish that all six reasons it advanced in its prohibition application meet the characteristics imposed above.
Firstly, Bayer relies on this particular provision of the Regulations. The principle involved is nothing new. It simply gives the Court explicit jurisdiction to consider a motion to dismiss where earlier, the Court had to rely on the old Rule 419 or the old (gap) Rule 5 of the Federal Court Rules. The case of Pharmacia Inc. v. Canada (1994), 58 C.P.R. (3d) 209 (F.C.A.) deals with this. At p. 217, the Court of Appeal observed that it is within the Court's jurisdiction to dismiss in a summary manner a notice of motion which is clearly improper as to be bereft of any possibility of success." "Such cases" said the Court, "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".
In short, says Bayer, the rule being as restrictive as it is, it should only be applied in the clearest of cases. As was stated in Hunt v. Carey Canada Inc., [1990] 2 S.C.R. 959 at 980:
Thus, the test in Canada governing the application of provisions like Rule 19(24)(a) of the British Columbia Rules of Court is the same as the one that governs an application under R.S.C. 0.18, r. 19: assuming that the facts as stated in the statement of claim can be proved, is it "plain and obvious" that the plaintiff's statement of claim discloses no reasonable cause of action? As in England, if there is a chance that the plaintiff might succeed, then the plaintiff should not be "driven from the judgment seat". Neither the length and complexity of the issues, the novelty of the cause of action, nor the potential for the defendant to present a strong defence should prevent the plaintiff from proceeding with his or her case. Only if the action is certain to fail because it contains a radical defect ranking with the others listed in Rule 19(24) of the British Columbia Rules of Court should the relevant portions of a plaintiff's statement of claim be struck out under Rule 19(24)(a).
Finally, in David Creaghen v. Canada, [1972] F.C.R. 732 (F.C.T.D.). Pratte J., as he then was, stated:
Finally, in my view, a statement of claim should not be ordered to be struck out on the ground that it is vexatious, frivolous or an abuse of the process of the court, for the sole reason that in the opinion of the presiding judge, plaintiff's action should be dismissed. In my opinion, a presiding judge should not make such an order unless it be obvious that the plaintiff action is so clearly futile that it has not the slightest chance of succeeding, whoever the judge may be before whom the case could be tried. It is only in such a situation that the plaintiff should be deprived of the opportunity of having his day in court.
First of all, I should find that the burden on Apotex of convincing the Court that Bayer should be cut off at the pass is quite high. Cases cited by Bayer on the application of para. 6(5)(b) of the Amended Regulations mirror pretty adequately the stringent circumstances under which it may be used.
In that respect, I note that Bayer had before it a clear allegation by Apotex that its proposed drug would not be an osmotic device but would nonetheless meet the function and purposeful characteristics of the Adalat XL as described in the '950 Patent. In the context of the underlying Regulations, is this assertion sufficient to shift the evidentiary burden from the respondent to the applicant? As Madame Justice Reed suggested in Hoffmann-LaRoche Ltd. v. Canada (Minister of National Health and Welfare) (1996), 67 C.P.R. (3d) 484, the conflicts between a public safety-driven statute such as the Food and Drug Act and a proprietary-driven statute such as the Patent Act are not easily reconciled. Nevertheless, Reed J. rationalized in the following manner the judicial hurdle which had been overcome since the Regulations came into force: (1) the burden of proof is on the applicant responding to a NOA to prove, on a balance of probabilities, that one or more allegations in the NOA are not justified; (2) the Court had no authority, during the effective currency of the proceedings, to compel production of evidence and there was no oral or documentary discovery; (3) the Court cannot require that samples of the drug proposed to be marketed be provided to the applicant; (4) the Court has no jurisdiction to order the filing and service of a detailed statement or a further and better detailed statement; and (5) jurisprudence has established that the facts asserted in a NOA are to be taken as true until disproved.
At p. 503 of the above decision, Reed J. states:
These proceedings are not infringement actions, nor are they actions for declarations of non-infringement. In keeping with the summary nature of the proceedings, ... if the facts asserted by a respondent justify an allegation of non-infringement, insofar as the text of the relevant claim is concerned, then, the allegation is justified. The proceeding is a summary one not designed to replace an action between the parties.
On appeal of Reed J.'s decision to the Federal Court of Appeal (Hoffmann-LaRoche Ltd. v. Canada (Minister of National Health and Welfare) (1997), 70 C.P.R. (3d) 206, Stone J.A. adds gloss to doctrine when he suggests as follows at p. 213:
The first major point taken by the Appellants centres on the Respondent's alleged failure to disclose facts sufficient to justify its allegation of non-infringement. The Appellants submit that the conclusion that sufficient facts were disclosed cannot be correct because the only reasonable way the Appellants could know whether the Respondent's product would infringe the Patent - and, accordingly, for them to decide whether to institute a section 6 proceeding - would be if the Respondent's composition had been disclosed in full so as to allow the Appellants to compare that composition with their own.
As is clear from subsection 55.2(4) of the Patent Act, R.S.C. 1985, c. P-4, as amended by the Patent Act Amendment Act, 1992, S.C. 1993, c. 2, the purpose of the Regulations is for "preventing the infringement of a patent by any person who makes, constructs, uses or sells a patented invention". Section 6 proceedings do not amount to an infringement action (Merck Frosst, supra at page 319; Nu-Pharm, supra, at page 218 [p. 14]). The obligation of the Respondent under the Regulations was to faithfully comply with the requirements of subsections 5(1) and (3). With reference to subparagraphs 5(3)(a) this meant the providing of a detailed statement of the "legal and factual basis for the allegation" (emphasis added). As has been pointed out by this Court in Merck Frosst, supra, and Bayer AG, supra, there is no requirement under the governing Part V.1 procedural rules that a sub-paragraph 5(1)(b) allegation be supported with any affidavit evidence or for testing such assertion on cross-examination. 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.
The foregoing observations of Stone J.A. bring me back to the main issue before the Court. The principles found in law, in doctrine or in precedents, all these together impose on a party a very heavy burden to convince the Court that an order of dismissal is warranted.
[27] In AB Hassle v. Canada (Minister of National Health and Welfare), [2000] F.C.J. No. 1428 (F.C.T.D.), McKeown J. stated:
The burden of proof and standard is very high on a motion to dismiss pursuant to paragraph 6(5)(b) of the Regulations. In considering such a motion, any doubt must be left for resolution by the trial judge. A proceeding should not be summarily dismissed unless it is without doubt or obvious that the application is so clearly futile that there is not the slightest chance of succeeding. The Federal Court of Appeal in Pharmacia Inc. v. Canada (Minister of National Health and Welfare) (1995), 58 C.P.R. (3d) 209 (F.C.A.), on a motion to strike an originating notice of motion pursuant to old Rule 419, confirmed that the Court may dismiss judicial review proceedings only in exceptional cases. At page 217:
For these reasons we are satisfied that the trial judge properly declined to make an order striking out, under Rule 419 or by means of the gap rule, as if this were an action. This is not to say that there is no jurisdiction in this court either inherent or through Rule 5, by analogy to other rules, to dismiss in a summary manner a notice of motion which is so clearly improper so 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.
In deciding whether to dismiss a proceeding pursuant to paragraph 6(5)(b) of the Regulations, I should take into account some of the following considerations. First, the issue on the motion is not the determination of the merits of the proceeding, but rather a determination of whether a proceeding is frivolous, vexatious or an abuse of process. I should avoid converting a motion under paragraph 6(5)(b) into a motion for judgment or for the determination of a question of law where all the facts are not in agreement before me. In considering motions pursuant to paragraph 6(5)(b), courts have repeatedly refused to decide issues of law or facts where the law is not well established, indicating the determination of such contentious issues are matters properly for the trial judge hearing the matter on the merits. For example, in Pfizer Canada Inc. v. Apotex Inc.(2000), 1 C.P.R. (4th) 358 (F.C.T.D.), Lemieux J. stated at pages 369 to 370:
In the context of issues relating to statutory interpretation, Reed J. in Amway of Canada Ltd. v. Canada, [1986] 2 F.C. 312 (T.D.) at 326, was of the view that where there exists a contentious legal issue of statutory interpretation to be resolved, that issue, not being clear and obvious, should be left for argument at trial and should not be disposed by a motions judge in a preliminary proceeding.
...
In my view all of these issues of statutory interpretation raise genuine questions which are required to be determined on the merits and not on a motion to strike.
Second, I also must consider whether Apotex is in effect receiving a "sneak preview" of the details of the Applicant's case on the merits. It is particularly prejudicial to the Applicants when Apotex has not yet filed its evidence on the merits. Finally, I must be convinced that the Applicants' case cannot succeed. It is essentially the same test as on a motion to strike out a statement of claim.
I must also take into account that on a paragraph 6(5)(b) motion, the disposition of the motion is in the discretion of the Court.
[28] In light of the above jurisprudence, it seems that "a proceeding should not be summarily dismissed unless it is without doubt or obvious that the application is so clearly futile that there is not the slightest chance of succeeding". See AB Hassle v. Canada (Minister of National Health and Welfare), supra.
[29] As for the burden of proof, it seems that the applicant has to establish on a balance of probabilities, that the allegation in the notice of allegation before the Court is not justified. If the facts asserted by a respondent justify an allegation of non-infringement, insofar as the text of the relevant claim is concerned, then, the allegation of non-infringement is justified. SeeBayer Inc. v. Apotex Inc., supra. and Hoffmann-LaRoche Ltd. v. Canada (Minister of National Health and Welfare) (1996), 67 C.P.R. (3d) 484.
1. Is it beyond doubt that the applicants cannot possibly succeed on the issue of whether the notice of allegation complies with the Regulations on the basis that:
(a) the notice of allegation must identify the drug;
[30] The applicant submits that the notice of allegation does not identify the drug or active ingredient for which Apotex seeks approval and is therefore not consistent with the Regulations.
[31] Apotex submits that the notice of allegation must include a description of the dosage form, strength and route of administration of the drug in respect of which the submission has been filed and that there are no further requirements.
[32] The Prothonotary found that the Regulations did not require Apotex to identify which drug is the subject of the allegation.
[33] In Merck & Co. v. Canada (Attorney General) (1999) 176 F.T.R. 21 (F.C.T.D.), affirmed by the Federal Court of Appeal (2000), 254 N. R. 68 F.C.A., McGillis J. explained the principles of statutory interpretation:
In order to determine the proper construction of subsection 5(1) of the Patented Medicines (Notice of Compliance) Regulations, the principles of statutory interpretation outlined in the leading case Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27 must be applied. In that decision, Iacobucci J., writing for the Court, outlined the following framework for statutory interpretation, at pages 40-41:
At the heart of this conflict is an issue of statutory interpretation. Consistent with the findings of the Court of Appeal, the plain meaning of the words of the provisions here in question appears to restrict the obligation to pay termination and severance pay to those employers who have actively terminated the employment of their employees. At first blush, bankruptcy does not fit comfortably into this interpretation. However, with respect, I believe this analysis is incomplete.
Although much has been written about the interpretation of legislation (see, e.g. Ruth Sullivan, Statutory Interpretation (1997); Ruth Sullivan, Driedger on the Construction of Statutes (3rd ed. 1994) (hereinafter "Construction of Statutes"); Pierre-André Côté, The Interpretation of Legislation in Canada (2nd ed. 1991)), Elmer Driedger in Construction of Statutes (2nd ed. 1983) best encapsulates the approach upon which I prefer to rely. He recognizes that statutory interpretation cannot be founded on the wording of the legislation alone. At p. 87 he states:
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.
Recent cases which have cited the above passage with approval include: R. v. Hydro-Québec, [1997] 3 S.C.R. 213; Royal Bank of Canada v. Sparrow Electric Corp., [1997] 1 S.C.R. 411; Verdun v. Toronto-Dominion Bank, [1996] 3 S.C.R. 550; Friesen v. Canada, [1995] 3 S.C.R. 103.
I also rely upon s. 10 of the Interpretation Act, R.S.O. 1980, c. 219, which provides that every Act "shall be deemed to be remedial" and directs that every Act shall "receive such fair, large and liberal construction and interpretation as will best ensure the attainment of the object of the Act according to its true intent, meaning and spirit".
Although the Court of Appeal looked to the plain meaning of the specific provisions in question in the present case, with respect, I believe that the court did not pay sufficient attention to the scheme of the ESA, its object or the intention of the legislature; nor was the context of the words in issue appropriately recognized. I now turn to a discussion of these issues.
The purposive approach to statutory interpretation adopted in Rizzo & Rizzo Shoes Ltd. (Re), supra has been applied by the Supreme Court of Canada in many cases. [See, for example, Chartier v. Chartier, [1999] 1 S.C.R. 242 at 252; R. v. Gladue, [1999] 1 S.C.R. 688 at 704; Novak v. Bond, [1999] 1 S.C.R. 808 at 839; M & D Farm Ltd. v. Manitoba Agricultural Credit Corp. (1999), 176 D.L.R. (4th) 585 at 597-598 (S.C.C.); Baker v. Canada (Minister of Citizenship and Immigration) (1999), 174 D.L.R. (4th) 193 at 230 (S.C.C.); Best v. Best (1999), 174 D.L.R. (4th) 235 at 291 (S.C.C.); Winters v. Legal Services Society (1999), 177 D.L.R. (4th) 94 at 112-113 (S.C.C.); and, Francis v. Baker (1999), 177 D.L.R. (4th) 1 at 14 (S.C.C.).
In applying the principles enunciated in Rizzo & Rizzo Shoes Ltd. (Re), supra in several of its recent cases, the Supreme Court of Canada has provided further guidance concerning the proper approach to statutory interpretation. With respect to the evidence to be considered in determining the purpose of an enactment, Cory and Iacobucci JJ., writing for the Court in R. v. Gladue, supra, a case concerning the interpretation of the sentencing provision in paragraph 718.2(e) of the Criminal Code, noted, at page 704, that "[t]he purpose of the statute and the intention of Parliament, in particular, are to be determined on the basis of intrinsic and admissible extrinsic sources regarding the Act's legislative history and the context of its enactment...". In Francis v. Baker, supra, a case concerning the interpretation of the Federal Child Support Guidelines, Bastarache J., writing for the Court, noted, at page 14, that "[p]roper statutory interpretation principles...require that all evidence of legislative intent must be considered, provided that it is relevant and reliable". Finally, in relation to the overall approach to be taken, Cory and Iacobucci JJ. emphasized in R. v. Gladue, supra, at page 704, the importance of section 12 of the Interpretation Act, R.S.C. 1985, c. I-21, in interpreting federal legislation. Section 12 of the Interpretation Act provides as follows:
12. 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.
12. Tout texte est censé apporter une solution de droit et s'interprète de la manière la plus équitable et la plus large qui soit compatible avec la réalisation de son objet.
In determining the proper construction of subsection 5(1), I must therefore apply the interpretative principles in the case Rizzo & Rizzo Shoes Ltd. (Re), supra and identify the interpretation of subsection 5(1) that best furthers the goals of the Patented Medicines (Notice of Compliance) Regulations. [See the approach taken in Novak v. Bond, supra, at page 839].
[34] I agree with the Prothonotary's interpretation that the Regulations do not require that the drug or active ingredient be identified in a notice of allegation.
[35] Furthermore, as stated by Apotex, there is no conceivable consequence relevant to this application which turns on the identity of the active ingredient and whether it is Omeprazole or an Omeprazole salt. Therefore, the allegation of non-infringement and the reasons why Apotex' product will not infringe the Patents applies to both Omeprazole and Omeprazole salts.
[36] As was stated in Hoffmann-LaRoche v. Canada (1999), 87 C.P.R. (3d) 251 (F.C.T.D.), by Sharlow J.:
It follows that where a party proposes to manufacture a medicine that contains none of those acids and files a notice of allegation saying so, a patent holder cannot possibly succeed in an application to prohibit the issuance of a notice of compliance on the basis that the notice of allegation is not sufficiently detailed, or that the allegation of non-infringement is not justified. In this case Hoffmann makes three additional arguments, which are considered below.
(b) the notice of allegation is an abuse of process
[37] The applicants submit that the notice of allegation is an abuse of process since Apotex made the same allegations in respect of the Patents and omeprazole and omeprazole magnesium tablets in Court Files 179-98 and 180-98.
[38] Apotex alleges that there is no abuse of process since the only evidence in the record is that the allegations were withdrawn solely on the basis of difficulties encountered by Apotex. By reason of these difficulties, Apotex' counsel and counsel for the applicants concluded an agreement whereby the notices of allegation were withdrawn. This agreement was eventually embodied in an order of the Court dated May 18, 1999. At the time the agreement was reached, the applicants did not request and clearly did not make it a term of the orders that Apotex would be barred from serving a subsequent notice of allegation based upon any grounds that Apotex might choose to pursue after resolving the difficulties encountered with respect to its first allegations.
[39] The Prothonotary observed that no conditions were imposed when the proceedings were withdrawn on consent and considered that the matter was not res judicata and that there was no abuse of process since the issues were never tried on the merits.
[40] In Lifeview Emergency Services Ltd. v. Alberta Ambulance Operators' Assn. (1995), 64 C.P.R. (3d) 157 (F.C.T.D.), Roths