Bayer AG v. Apotex Inc.

Bayer AG v. Apotex Inc.
Court (s) Database
Federal Court Decisions
Date
2003-10-17
Neutral citation
2003 FC 1199
File numbers
T-2052-01
Notes
Digest
Decision Content
Date: 20031017
Docket: T-2052-01
Citation: 2003 FC 1199
BETWEEN:
BAYER AG and BAYER INC.
Applicants
and
APOTEX INC. and
THE MINISTER OF HEALTH
Respondents
REASONS FOR ORDER
GIBSON J.:
INTRODUCTION
[1] On the 3rd of December, 2002, the Applicants, Bayer AG ("Bayer Germany") and Bayer Inc. ("Bayer Canada"), collectively ("Bayer"), filed an amended originating notice of motion seeking:
1. An order in accordance with section 6(1) of the Patented Medicines (Notice of Compliance) Regulations, prohibiting the Minister of Health... from issuing a notice or notices of compliance under section C.08.004 of the Food and Drug Regulations (an "NOC") to Apotex Inc. in connection with ... ciprofloxacin hydrochloride tablets of 100, 250, 500 and 750 mg strength for oral administration until after the expiration of Canadian Patent 1, 218, 067 (the "'067 patent");
2. A declaration that the letter dated October 4, 2001 is not a valid notice of allegation and is not in compliance with the Patented Medicines (Notice of Compliance) Regulations (the "Regulations");
3. An order prohibiting the Minister of Health from responding to or acting in respect of the Notice of Allegation of Apotex Inc. ("Apotex") dated October 4, 2001 and in respect of the '067 patent from issuing a Notice of Compliance ("NOC") for the medicine ciprofloxacin hydrochloride, including ciprofloxacin hydrochloride tablets 100 mg, 250 mg, 500 mg, and 750 mg, by reason of four previous Orders of Prohibition in Court File Nos. T-1192-93, T-468-95, T-35-96, and T-591-96 respecting the '067 patent and s.7(1)(f) of the Regulations;
4. A declaration that the Minister of Health is prohibited by reason of the previous proceedings in [the previously identified four (4) files in this Court] and the Orders of Prohibition granted therefrom and by reason of estoppel, abuse of process, and/or the doctrine of merger of all previous causes of action, from responding to or acting in respect of the Notice of Allegation dated October 4, 2001 and from issuing an NOC for the medicine of ... [sic] ciprofloxacin hydrochloride, including ciprofloxacin hydrochloride tablets 100 mg, 250 mg, 500 mg, and 750 mg;
5. Costs against Apotex on a solicitor/client scale; and
6. For any other relief that this Honourable Court may deem just.
[2] The amended originating notice of motion responded to a Notice of Allegation dated the 4th of October, 2001, sent or delivered by Apotex Inc. ("Apotex") to Bayer. As can be deduced from the reliefs being sought, as quoted above, this was not the first Notice of Allegation made by Apotex in respect of the drug ciprofloxacin hydrochloride ("ciprofloxacin"). In fact, it was the fifth and the third in which the validity of Canadian Patent 1,218,067 (the " '067 patent") was attacked. Nor is the Notice of Allegation here at issue the last made by Apotex with respect to the '067 patent, notwithstanding that the patent will expire in early February, 2004.
[3] The Notice of Allegation giving rise to this proceeding alleges that claims 8 and 14 of the '067 patent, as they relate to ciprofloxacin, are invalid on the basis of obviousness; that there is nothing inventive in the process for preparing ciprofloxacin as described in claims 10, 11 and 12 of the '067 patent, since the process described merely incorporates obvious modifications of known processes for producing quinolone compounds, ciprofloxacin being a quinolone; and finally that Apotex' process for preparing ciprofloxacin will not infringe claim 14 of the '067 patent being a product by process claim. A substantial range of "prior art" documentation was cited in support of the allegations of obviousness.
[4] At the close of the hearing of the application, the allegation of non-infringement was withdrawn.[1]
THE PARTIES
[5] Bayer Germany is the owner of the '067 patent which contains process and product by process claims for the compound ciprofloxacin. Bayer Canada is a licensee from Bayer Germany in respect of the '067 patent and sells ciprofloxacin as a medicine in Canada under Notices of Compliance granted by the Minister of Health.
[6] Apotex is a "generic drug company", that is to say, a manufacturer and marketer of drugs in Canada which, in the words of Justice Nadon in Merck Frosst Canada Inc. v. Canada (Minister of National Health and Welfare)[2] "...market[s] a drug without having to independently establish the safety and effectiveness of the drug...". It seeks a Notice of Compliance from the Minister of Health to so enable it to market ciprofloxacin.
[7] The Minister of Health is the Minister charged with the administration of the Patent Medicines (Notice of Compliance) Regulations[3] (the "Regulations"). No material filed on behalf of the Minister was before me. Further, the Minister was not represented at the hearing.
BACKGROUND
[8] The priority filing date for the '067 patent is the 29th of October, 1981, although an earlier date of invention is alleged on behalf of Bayer in this proceeding, that date being the 20th of November, 1979. The subject matter of the patent is the process to produce the drug ciprofloxacin, and the drug itself by such process. Ciprofloxacin is an antibiotic that has apparently proved to be very effective in the systemic treatment of a wide range of both gram-positive and gram-negative bacterial infections including some that are generally regarded as hard-to-treat. In the result, it has proved to be a very profitable "block-buster" drug for Bayer.
[9] The background to the invention of ciprofloxacin that follows is drawn rather closely from the decision of the United States District Court, Southern District of California decision in Bayer AG, and Bayer Corporation v. Carlsbad Technology Inc.[4], an unreported decision dated the 6th of June, 2002 relating to much the same issues that are here in dispute. That being said, what follows also reflects the evidence that was before me.
[10] In the 1960s, a primary antibacterial agent was nalidixic acid, a derivative of a napthyridine compound. It was effective on some strains of gram-negative bacteria, but was ineffective on the Pseudomonas aeruginosa strain and other hard-to-treat bacteria.
[11] In March 1979, a U.S. patent issued on the antibacterial compound norfloxacin. Unlike nalidixic acid, norfloxacin is a derivative of a quinolone compound, as is ciprofloxacin. Norfloxacin's chemical structure contains an ethyl group at the 1-position, a piperazinyl group at the 7-position, and a fluorine at the 6-position. Norfloxacin is diagrammed as follows:
In the above diagram, the 1-position is at the bottom of the right hand ring, the 7-position is at the lower left hand side of the left hand ring and has attached to it the "piperazinyl group" and the 6-position is just above the 7-position and has attached to it a fluorine designated by "F".
[12] By contrast, ciprofloxacin can be diagrammed as follows:
Ciprofloxacin
[13] The distinguishing feature is the substitution of a cyclopropyl for the ethyl group at the 1-position. Norfloxacin showed improvement on some gram-negative bacteria which are relatively easy to treat, such as E. coli, Klebsiella, and Salmonella. It was also active on some gram-positive bacteria, including Bacillus subtilis. Further, it showed some improvement on one of the most difficult bacteria to treat, and for which there was a long-felt treatment need, Pseudomonas aeruginosa. However, norfloxacin was not systemic and was primarily prescribed to treat urinary tract infections.
[14] German patent application, DE 28 08 070[5](the "070 publication") was published on the 30th of August, 1979. A Doctor Grohe, a named inventor in the 070 publication and in the '067 patent, was involved in Bayer Germany's "Nalidixic Acid Program". The goal of the program was to find new syntheses of heterocyclic compounds that were related to nalidixic acid but possessed superior antibacterial activity. The 070 publication, in part, describes a process enabling production of improved compounds from the quinolone core groups, including napthyrdine, quinolone, and pyrido-pyrimidine. The publication also identified a generic formula, "Formula IX", with optimal substitutions. As a generic, Formula IX could be converted into a quinolone and covered thousands of possible compounds from combinations of core groups. The publication concluded that Formula IX was potentially more effective against certain bacteria than nalidixic acid.
[15] Within the general scope of Formula IX was a specific compound from Example 19, known as "1-cyclopropyl-nalidixic acid", which has the same structure as nalidixic acid, but has a cyclopropyl group at the 1-position instead of an ethyl group. Ciprofloxacin has a cyclopropyl group at the 1-position. The 070 publication indicated that Example 19, when compared to nalidixic acid, "proved to be far superior in vitro and in vivo against Staphylococci, Escherichia coli, Proteus, Klebsiella, Pseudomonas, etc.," but no test data was included in the publication and no commercial drug was developed from it.
[16] A European patent application equivalent to the 070 publication was published the 9th of October, 1979 and an equivalent U.S. Patent issued the 18th of August, 1981.
[17] A Japanese counterpart to the 070 publication contained test data comparing the effectiveness of 1-cyclopropyl nalidixic acid to nalidixic acid. It disclosed no improvement against Pseudomonas aeruginosa and Staphylococcus aureus, bacteria of great concern.
[18] A German patent publication known as the 850 publication, was published on the 7th of August, 1980. It disclosed a generic structure of a pyrido-pyrimidine. The publication indicated that example 7, which was 1-cyclopropyl pipemidic acid, was more effective against many types of bacteria compared to pipemidic acid and nalidixic acid.
[19] Both the 070 and 850 publications, together with other "prior art" were relied on by Apotex in this proceeding. By contrast, Bayer emphasized Review Articles, particularly the "Albrecht" and "Koga" Review Articles[6]only the latter of which was included in the prior art cited by Apotex in its Notice of Allegation.
THE PATENT IN SUIT
[20] The '067 patent was filed the 8th of August, 1982 claiming priority from the equivalent German patent application as of the 29th of October, 1981. It contains thirty-two (32) claims. Claims 1, 8, 10 to 12 and 14 of the '067 patent are earlier referred to in these reasons. Those claims are set out in full in a schedule to these reasons.
[21] The "promise" of the '067 patent is rather modest in comparison with the impact that ciprofloxacin has proved to have in the systemic treatment of both gram-positive and gram-negative infections in humans. Its promise is reflected in the following two (2) extracts from the disclosure of the patent:
The compounds of the present invention have an antibacterial action superior to that of the known quinolone-carboxylic acids and azaquinolone-carboxylic acids. The compounds according to the invention exhibit their superior antibacterial activity against both gram positive and gram negative bacteria, including Pseudomonas aeruginosa.
...
The compounds according to the invention are distinguished by a particularly good antibacterial action against gram positive and gram negative bacteria, in particular in comparison with the compounds of German Patent Application P 30 33 157.8 of 3.9.1980 and DE-05 (German Published Specification) 2,804,097, as can be seen from the table below.
The compounds compared in the foregoing table are, from left to right, an unidentified Bayer invention, norfloxacin and ciprofloxacin.
THE EXPERT WITNESSES
[22] On behalf of Bayer, the following experts gave evidence by way of affidavit and were cross-examined on their evidence:
1.Dr. Paul Actor, Research Professor in the Department of Microbiology and Immunology at Temple University School of Medicine and Adjunct Professor, Microbiology and Immunology at the University of Nebraska Medical Centre and President of Paul Actor Associates, a pharmaceutical consulting company founded in 1990. Dr. Actor's doctorate was obtained in Parasitology from Rutgers University in 1959.
2. Dr. Ronald F. Grossman, Professor of Medicine, University of Toronto and Chief of Medicine, Credit Valley Hospital, Mississauga, Ontario who holds a Medical Degree from the University of Toronto which was obtained in 1973.
3. Dr. Karl Georg Metzger, one of the inventors named in the patent in suit, currently retired but from September, 1963 until his retirement on the 1st of April, 1994, an employee of Bayer AG in Germany. From the mid-1970s until his retirement, Dr. Metzger was Head of the Laboratory for Basic Bacteriological Research, later the Institute for Chemotherapy, and Head of the Department of Basic Bacteriological Research within the Institute for Chemotherapy. Dr. Metzger's doctorate in microbiology was obtained in 1959 from the University of Frankfurt.
4. Dr. Robin Cooper, President of Cooper Consulting Inc., a consulting business specializing in drug discovery and in particular the investigation and synthesis of new antibiotic chemical compounds. Prior to funding Cooper Consulting Inc. in 1997, Dr. Cooper was employed by Lilly Research Laboratories from 1965 to 1997 as a senior organic chemist. Dr. Cooper's doctorate was obtained in 1962 from Imperial College and Queen Mary College in London, England.
5. Dr. Donald E. Low, Microbiologist-in-Chief at Mount Sinai Hospital and Chief of Toronto Medical Laboratories at that hospital, Department of Microbiology, Professor, Microbiology and Medicine at the University of Toronto, Professor at the Department of Medical Genetics and Microbiology at the Department of Medicine, at that University and Head of Microbiology Division, Department of Laboratory Medicine and Pathobiology at that University.
6. Dr. James D. Wuest, Professor of Chemistry at the University of Montreal in Montreal, Quebec. Dr. Wuest received his doctorate in Organic Chemistry in 1973 from Harvard University.
[23] The following experts gave evidence by way of affidavit on behalf of Apotex and were cross-examined on their affidavits:
1. Dr. Robert Allan McClelland, Full Professor in the Department of Chemistry at the University of Toronto since 1983. Dr. McClelland obtained his doctorate in Chemistry from the University of Toronto in 1969.
2. Dr. George A. Olah, Director of the Loker Hydrocarbon Research Institute and Distinguished Professor of Organic Chemistry at the University of Southern California, Los Angeles, since 1977. Dr. Olah was awarded the degree of Doctor of Philosophy in 1949 and the degree of Doctor of Sciences Honoris Causa in 1988, apparently from the Technical University of Budapest, Hungary. In addition, he has received ten (10) Honorary Doctor of Science Degrees from leading Universities in the United States, France, Germany, Hungary and Greece. In 1994, Dr. Olah was awarded the unshared Nobel Prize in Chemistry.
3. Dr. Robert M. Williams, a tenured Professor of Chemistry at Colorado State University who has spent his entire career in the field of organic chemistry. Dr. Williams received his doctoral degree in organic chemistry from the Massachusetts Institute of Technology in 1979, following which he spent one (1) year as a post-doctoral fellow at Harvard University in the Laboratories of the Nobel Laureate, the late Professor Robert B. Woodward.
[24] More will be said later in these reasons based on the evidence provided by certain of the expert witnesses and the record of their cross-examinations on their affidavits.
THE ISSUES
[25] Two preliminary issues were identified before the Court: first, whether certain of the affidavit evidence filed on behalf of Apotex should be struck as irrelevant or prejudicial in that it either contradicts or was not referred to in Apotex' Notice of Allegation; and secondly, whether Apotex' Notice of Allegation should be declared invalid for non-compliance with the Regulations and, in consequence, the Minister should be prohibited from issuing a Notice of Compliance to Apotex for ciprofloxacin.
[26] More substantively, the issues identified in the Bayer's Memorandum of Fact and Law are the following:
- first, whether the product-by-process claims of the '067 patent, claims 8 and 14, would have been obvious at the priority date of the patent or, alternatively, an earlier date of invention;
- secondly, whether Bayer's claims for the process described in claims 10 to 12 to make ciprofloxacin (the "MES process" or "malonic ester synthesis process") would have been obvious on the relevant date; and
- thirdly, whether claim 14 (12) would be infringed by Apotex' claimed process for making ciprofloxacin (the "Apotex process").
As earlier noted, the issue of non-infringement put forward by Apotex and responded to by Bayer was withdrawn by Apotex at the close of the hearing.
[27] Additionally, counsel for the parties relied on different authorities on the issue of burden of proof on an application such as this.
[28] Issues of estoppel, abuse of process and merger forecasted by the reliefs sought in the amended originating notice were not identified as issues in Bayer's Memorandum of Fact and Law, nor were they argued before the Court.
ANALYSIS
1) Preliminary Issues
a) Bayer's motion to strike certain of the affidavit evidence filed on behalf of Apotex as being irrelevant or prejudicial in that it either contradicts or was not referred to in Apotex's Notice of Allegation
[29] By notice of motion dated the 6th of March, 2002, Bayer sought to strike substantial portions of the expert affidavit evidence filed on behalf of Apotex. The grounds for the motion were stated to be, essentially, that the evidence sought to be struck is irrelevant, prejudicial, contradictory to the Notice of Allegation or simply not referred to in the Notice of Allegation. For reasons that need not be pursued here, the motion was not disposed of before the substance of Bayer's application came on for hearing. In a teleconference preparatory to the hearing, the Court indicated to counsel that its inclination was to dismiss Bayer's motion on the basis that it would give to the impugned evidence such weight as it considered appropriate in light of arguments made before it.
[30] At the close of the hearing of Bayer's application, counsel for Bayer advised the Court:
The motion is withdrawn with respect to everything except tab 24 and it is withdrawn with respect to 24 except with respect to the portion to which we have referred on page 496.[7]
By reference to Bayer's application record, page 496 appears in Volume II of nineteen (19) volumes and is a portion of a Patent Owner's Statement in relation to U.S. patent 4,670,444. It includes the following paragraph which I am satisfied is the evidence to which counsel refers:
In 1980, Dr. Grohe had a series of illnesses, including a heart attack, and missed a considerable amount of work. In September, the quinolone research program was terminated. But, with the tacit approval of a few research managers and the encouragement of Drs. Zeiler and Metzger, Dr. Grohe later attempted the synthesis of one additional compound - the 1- cyclopropyl variation of norfloxacin (norfloxacin was one of the most promising quinolines at the time). On just his second attempt, Dr. Grohe successfully synthesized this compound, later named ciprofloxacin, on April 15, 1981. Initial microbiological testing showed that ciprofloxacin was surprisingly good against a wide variety of Gram-negative and Gram-positive bacteria, and was much better than norfloxacin. Enrofloxacin was synthesized shortly thereafter, and Bayer management took the necessary steps to develop ciprofloxacin and enrofloxacin into commercial antimicrobials.[8]
[31] In accordance with what the Court understand to be the agreement reached at the end of the hearing of this matter, it will give to the foregoing statement such weight as it consider it deserves which, the Court concludes, is very little, if any. It would appear to be a self-serving statement, made in a context quite distinct in nature from the nature of these proceedings, in circumstances where Dr. Grohe is simply not before the Court to testify as to the accuracy of the statement. The document in which it appears is signed on behalf on Bayer Germany by an Attorney for the Patent Owner and there is no indication whatsoever in the document that Dr. Grohe would agree with the passage in question.
b) Bayer's Motion for a Declaration that Apotex' Notice of Allegation is Invalid
[32] By notice of motion dated the 26th of August, 2003, essentially on the eve of the hearing of this matter, Bayer sought an order:
-declaring that Apotex' Notice of Allegation is invalid for non-compliance with section 5 of the Regulations; and
- prohibiting the Minister from issuing a Notice of Compliance to Apotex for the drug ciprofloxacin, until the expiry of the '067 Patent.
[33] As earlier noted, the Notice of Allegation herein was provided by letter dated the 4th of October, 2001. Bayer responded with this application and sought disclosure under subsection 6(7) of the Regulations. Disclosure was provided by Apotex to Bayer on the 13th of December, 2001. The Minister verified Apotex' disclosure and indicated that, by letter dated the 3rd of January, 2002, Apotex had been notified that its submission for a Notice of Compliance had been rejected, without prejudice to re-filing, due to deficiencies. Prior to the filing of the motion in question, Bayer had not been advised that Apotex had re-filed to correct the identified deficiencies. Although not particularly relevant given the manner in which the Court proposes to dispose of the motion, there would appear to be a distinct difference of opinion as to the status before the Minister of any Notice of Compliance process relating directly to the Notice of Allegation herein and the sufficiency of disclosure made by Apotex to Bayer.
[34] Bayer further alleges in its motion that it was served with Apotex' Notice of Allegation prior to the date of Apotex' submission for a related Notice of Compliance. In the result, Bayer alleges that Apotex' Notice of Allegation is void and of no effect for lack of compliance with subparagraph 5(3)(c)(i) of the Regulations.
[35] Subsections 5(1) and (1.1) and the relevant portions of subsection 5(3) of the Regulations read as follows:
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,
5. (1) Lorsqu'une personne dépose ou a déposé une demande d'avis de conformité pour une drogue et la compare, ou fait référence, à une autre drogue pour en démontrer la bioéquivalence d'après les caractéristiques pharmaceutiques et, le cas échéant, les caractéristiques en matière de biodisponibilité, cette autre drogue ayant été commercialisée au Canada aux termes d'un avis de conformité délivré à la première personne et à l'égard de laquelle une liste de brevets a été soumise, elle doit inclure dans la demande, à l'égard de chaque brevet inscrit au registre qui se rapporte à cette autre drogue :
(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.
a) soit une déclaration portant qu'elle accepte que l'avis de conformité ne sera pas délivré avant l'expiration du brevet;
b) soit une allégation portant que, selon le cas :
(i) la déclaration faite par la première personne aux termes de l'alinéa 4(2)c) est fausse,
(ii) le brevet est expiré,
(iii) le brevet n'est pas valide,
(iv) aucune revendication pour le médicament en soi ni aucune revendication pour l'utilisation du médicament ne seraient contrefaites advenant l'utilisation, la fabrication, la construction ou la vente par elle de la drogue faisant l'objet de la demande d'avis de conformité.
(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.
(1.1) Sous réserve du paragraphe (1.2), lorsque le paragraphe (1) ne s'applique pas, la personne qui dépose ou a déposé une demande d'avis de conformité pour une drogue contenant un médicament que l'on trouve dans une autre drogue qui a été commercialisée au Canada par suite de la délivrance d'un avis de conformité à la première personne et à l'égard de laquelle une liste de brevets a été soumise doit inclure dans la demande, à l'égard de chaque brevet inscrit au registre visant cette autre drogue contenant ce médicament, lorsque celle-ci présente la même voie d'administration et une forme posologique et une concentration comparables:
a) soit une déclaration portant qu'elle accepte que l'avis de conformité ne soit pas délivré avant l'expiration du brevet;
b) soit une allégation portant que, selon le cas :
(i) la déclaration faite par la première personne aux termes de l'alinéa 4(2)c) est fausse,
(ii) le brevet est expiré,
(iii) le brevet n'est pas valide,
(iv) aucune revendication pour le médicament en soi ni aucune revendication pour l'utilisation du médicament ne seraient contrefaites advenant l'utilisation, la fabrication, la construction ou la vente par elle de la drogue faisant l'objet de la demande d'avis de conformité.
...
...
(3) Where a person makes an allegation pursuant to paragraph (1)(b) or (1.1)(b) or subsection (2), the person shall
...
(c) if the allegation is made under subparagraph (1)(b)(iv) or (1.1)(b)(iv),
(3) Lorsqu'une personne fait une allégation visée aux alinéas (1)b) ou (1.1)b) ou au paragraphe (2), elle doit :
...
c) si l'allégation est faite aux termes des sous-alinéas (1)b)(iv) ou (1.1)b)(iv) :
(i) serve on the first person a notice of the allegation relating to the submission filed under subsection (1) or
...
(i) signifier à la première personne un avis de l'allégation relative à la demande déposée selon les paragraphes (1) ou (1.1), au moment où elle dépose la demande ou par la suite,
...
[36] In a responding motion record, Apotex provided an affidavit of Dr. Bernard Sherman, Chair of Apotex, in which he attested that the Notice of Allegation herein was sent by Apotex to Bayer by registered mail on the 5th of October, 2001, and that Apotex had responded to the Minister's satisfaction regarding deficiencies in its submission for a Notice of Compliance and further that its "...submission on file with the Minister..." was, as of the date of his affidavit, "... approvable and on patent hold."
[37] Dr. Sherman's affidavit and Apotex' responding motion record was served on counsel for Bayer at a time when there was essentially no opportunity left for Bayer to cross-examine Dr. Sherman before the commencement of the hearing of this matter. In the result, Bayer's motion was not argued at the opening of the hearing, time was provided during the course of the hearing for the conduct of cross-examination of Dr. Sherman and the matter came on for discussion at the close of the hearing. In the course of the discussion, the Court became concerned that, given late development of the issue, even the factual background to the issue was uncertain.
[38] The Court proposed that the hearing be adjourned, that counsel make efforts to resolve the issue and that, if within two (2) weeks following the close of the hearing, the matter had not been resolved, the motion could then be dealt with in writing under Rule 369 or, if necessary, the hearing could be resumed.
[39] Not surprisingly, the matter was not resolved within the two (2) weeks provided.
[40] At the end of the two (2) week period, Bayer did not seek to have its motion dealt with under Rule 369, nor did it seek to have the hearing resumed. Rather, it submitted for filing a Supplementary Motion Record, substantially augmented over the original Motion Record. With some reluctance and uncertainty, the Court directed that the Supplementary Motion Record be filed. Additionally, the Court directed the Registry of the Court to enquire whether Apotex would be seeking to file further responding material, whether any success had been achieved in arriving at an agreed statement of facts to underlie the motion and whether Bayer intended that the motion be dealt with under Rule 369 or would be seeking to reopen the hearing.
[41] In response, and not surprisingly, the Court was advised that no agreement had been reached on the underlying facts. Counsel for Bayer essentially demurred on the issue of whether or not the motion could be disposed of in writing while counsel for Apotex both filed a Supplementary Responding Motion Record and requested that the hearing be resumed. In the meantime, the twenty-four (24) month period provided in the Regulations for disposition of an application such as this was coming perilously close to its end.
[42] In Bayer's latest material on the motion it alleged impropriety on the part of Apotex and Dr. Sherman and abuse of the process of this Court. At the same time, for its own part, the Court is satisfied that Bayer did not come to this Court on the motion with clean hands.
[43] The issue that is the subject matter of the motion is not new in this proceeding. In the Amended Notice of Application filed the 3rd of December, 2002, the following new paragraphs appear:
Tenth, by Order of the Court dated January 2, 2002, resulting from a motion brought under s. 6(7) of the Regulations, Apotex has provided to Bayer its purported submission ("Submission") to the Minister for a Notice of Compliance, and the Minister has verified that the Submission produced to Bayer was the submission which was before the Minister. The Submission was received by the Minister on October 9, 2002, and was rejected by the Minister for deficiencies noted on screening on January 3, 2002. Accordingly, the Notice of Allegation is void for not being in compliance with s.5(3)(c)(i) of the Regulations, due to its being served after the Submission was filed with the Minister.
Alternatively, the Notice of Allegation is not in compliance with the Regulations as it does not relate to the submission for a Notice of Compliance which is before the Minister, in conformance with s. 5(3)(c)(i) of the Regulations, for the following reasons:
(a) The Submission was rejected by the Minister due to deficiencies noted on screening, and therefore the Submission was never a submission for a Notice of Compliance as defined in s. 5(1) of the Regulations.[9] [underlining in original omitted and added under the word "after"]
The highlighted word "after" would appear to be in error and should read "before".
[44] As a preliminary issue striking at the root of the these proceedings, it was open to Bayer to approach the Court with a view to having the issues as framed in the Amended Notice of Allegation dealt with on motion and early on in the proceeding with the potential result of substantial saving of time and resources for the parties and, from the Court's point of view, with the potential result of substantial saving of Court time and resources. Bayer chose not to follow that course. Indeed, within the time provided for filing evidence on the application, it filed no evidence in support of the allegations contained in the foregoing quoted paragraphs. Further, in May 2002, four (4) months after the expiry of the time for filing evidence, Bayer was denied leave to late-file evidence on the issue.
[45] Bayer's Memorandum of Fact and Law filed on the application does not identify this issue as an issue to be considered on the application. Nonetheless, it provides limited argument on the issue in the closing paragraphs of its memorandum. It is thus not surprising that in Apotex' responding memorandum, Apotex does not address the issue substantively.
[46] Thus, the stage was set on the eve of the hearing of this application such that, if Bayer wished to persuasively argue the issue and indeed expand the issue as it has done, it was left with no alternative but to raise it as a "preliminary motion" in a separate motion record. The filing of that motion record on the eve of the hearing opened the opportunity for Apotex to file a responding motion record, including the affidavit of Dr. Sherman that is now impugned on behalf of Bayer.
[47] In Hoffmann-LaRoche Ltd. v. Canada[10], Justice Reed, reflecting on an equivalent issue, wrote at paragraph [7] on page 307:
I agree that the earlier jurisprudence held that an NOA could be served before a NDS was filed, and that such jurisprudence is no longer directly relevant. The approach taken to the interpretation of the Regulations in those cases, however, is still relevant. I would characterize that approach as being that a Court should not be quick to interpret the Regulations in a narrow fashion that impedes the expeditious determination contemplated by the summary procedure provided in the Regulations.
[48] For its part, Apotex , in its Supplementary Responding Motion Record on this issue, filed exactly one (1) month after the substantive hearing on the application was completed, provided the following conclusion:
...it is clear that Bayer has not established any basis for the invalidity of Apotex' NOA [Notice Of Allegation]. The NOA essentially alleges invalidity and, as such, is not subject to any requirement that it be served after an NDS [New Drug Submission] is filed. Even if the Court should accept that there is an allegation of non-infringement within Apotex' NOA to which subparagraph 5(3)(c)(i) of the Regulations applies, Apotex has withdrawn its non-infringement argument and so the issue of whether the non-infringement portion is a valid allegation is now moot, and the allegations of invalidity remain unaffected by any such requirements. Apotex had on file with the Minister an NDS long before service of the NOA. The screening deficiency notice has no relevance to the pre-existing submission since the screening deficiency has only to do with the non-infringing process set out in the NOA, which is now a moot question.[11]
[49] The manner in which Bayer has dealt with this issue has, the Court is satisfied, impeded the expeditious determination by the summary procedure provided in respect of applications such as this. That conclusion, combined with the belated withdrawal of the allegation of non-infringement and the conclusion that the Court reaches on the allegations of invalidity led the Court to conclude that the motion did not warrant further consideration.
[50] In the result, the Court convened a teleconference with counsel for Bayer and for Apotex and advised counsel that this application would not be determined on the basis of the motion in question but rather on the substantive basis of validity or invalidity of the '067 patent and that therefore, in the Court's view, reconvening of the hearing to consider the motion on the basis of the very considerably differing positions of the parties was unwarranted. Following some discussion, counsel accepted the position of the Court. That being said, counsel for Bayer maintained the view that Bayer should be entitled to costs on an enhanced scale in light of late withdrawal of the allegation of non-infringement while counsel for Apotex urged that Apotex should be entitled to special costs considerations in light of the manner in which Bayer had dealt with the preliminary issue of validity or invalidity of Apotex' Notice of Allegation. The Court undertook to counsel to reexamine written submissions on costs. The result of that reexamination is reflected later in these reasons. At the close of the teleconference, it was agreed that the hearing of this application would not be reconvened and that the hearing was thus closed.
[51] Based on all of the foregoing, Bayer's motion for a declaration that Apotex' Notice of Allegation is invalid will be dismissed without consideration on the merits.
2)Invalidity of the '067 Patent
[52] Given the withdrawal of the non-infringement issue, the remaining basis underlying the Notice of Allegation is invalidity and, more particularly, invalidity of the product-by-process claims of the '067 patent, claims 8 and 14, by reason of obviousness and invalidity of the process claimed in claims 10 to 12 to make ciprofloxacin by reason of its obviousness.
a) The Burden of Proof with Respect to Patent Validity
[53] At the relevant time for the purposes of this matter, section 47 of the Patent Act[12]read as follows:
47. Every patent granted under this Act shall be issued under the signature of the Commissioner and the seal of the Patent Office; the patent shall bear on its face the date on which it is granted and issued and it shall thereafter be prima facie valid and avail the grantee and his legal representatives for the term mentioned therein, which term shall be as provided in and by sections 48 and 49. [emphasis added]
47. Tout brevet accordé conformément à la présente loi doit être délivré sous la signature du commissaire et le sceau du Bureau des brevets. Le brevet doit porter à sa face la date à laquelle il a été accordé et délivré, et il est par la suite prima facie valide et acquis au titulaire et à ses représentants légaux pour la période y mentionnée, laquelle doit être déterminée suivant les articles 48 et 49. [ je souligne]
[54] Based upon the prima facie validity of the '067 patent, Bayer urges that the burden of proof on the allegation of invalidity by reason of obviousness lies with Apotex. In support of this assertion, Bayer cites AB Hassle and Astrazeneca Canada Inc. v. Apotex Inc. and the Minister of Health[13]. In his reasons therein dated the 20thof June, 2003, Justice Campbell wrote at paragraph [23]:
Apotex argues that, in part, the purpose of the Regulations is to permit a patent owner to proceed summarily to protect its patent rights where the generic's allegations of non-infringement or invalidity have "no merit". I find that, certainly with respect to an attack of invalidity, Apotex's argument does not reflect the present state of