AB Hassle v. Apotex Inc.

AB Hassle v. Apotex Inc.
Court (s) Database
Federal Court Decisions
Date
2005-02-14
Neutral citation
2005 FC 234
File numbers
T-1878-02
Notes
Reported Decision
Decision Content
Date: 20050214
Docket: T-1878-02
Citation: 2005 FC 234
BETWEEN:
AB HASSLE, ASTRAZENECA AB and
ASTRAZENECA CANADA INC.
Applicants
and
APOTEX INC. and THE MINISTER OF HEALTH
Respondents
REASONS FOR ORDER
LAYDEN-STEVENSON J.
[1] By correspondence dated September 26, 2002, specifically stated to be a notice of allegation (NOA) pursuant to the Patented Medicines (Notice of Compliance) Regulations (the Regulations) with respect to Canadian patents Nos. 1,292,693 (the '693 patent), 1,302,891 (the '891 patent) and 2,166,483 (the '483 patent), the respondent Apotex Inc. (Apotex) informed AstraZeneca Canada Inc. (AstraZeneca) that Apotex had filed with the Minister of Health (the Minister) a new drug submission (NDS) for magnesium omeprazole tablets for oral administration in strengths of 10 mg and 20 mg.
[2] The patents referred to by Apotex are listed, for certain products, on the patent register maintained by the Minister. They were included on patent lists submitted by AstraZeneca and its corporate predecessor Astra Pharma Inc. (Astra) with the consent of AB Hassle (Hassle) and AstraZeneca AB, the owners of the patents. Thus, pursuant to the Regulations, Hassle and AstraZeneca AB, as owners, are parties to the application. I will refer to the applicants collectively as AstraZeneca. The Minister administers the Regulations and did not file submissions or participate in the hearing of this application.
[3] AstraZeneca, by notice of application dated November 8, 2002, requests a declaration that the Apotex letter of September 26, 2002, is not a NOA as contemplated by the Regulations and, in the alternative, an order prohibiting the Minister from issuing a notice of compliance (NOC) in respect of omeprazole magnesium tablets 10 and 20 mg until the expiration of the noted Canadian patents. AstraZeneca did not pursue its requested relief in relation to the '891 and '483 patents and at the hearing of this application, only the '693 patent was in issue.
THE '693 PATENT
[4] The application that resulted in the '693 patent was filed on April 29, 1987, claiming priority from a UK application filed on April 30, 1986 (priority date). The '693 patent issued on December 3, 1991 and it expires in 2008. The patent has as its objective the preparation of an enteric coated dosage form of omeprazole that is resistant to dissolution in acidic media, that dissolves rapidly in neutral to alkaline media, and that has good long term storage stability.
[5] The pharmaceutical preparation is used to treat gastric and duodenal ulcers. The active medicinal ingredient is omeprazole or omeprazole magnesium. AstraZeneca markets its product under the trade name LOSEC. The circumstances of the invention are contained in the '693 patent disclosure and are described by Mr. Justice Rothstein in AB Hassle v. Apotex Inc. (2003), 29 C.P.R. (4th) 23 (F.C.A.) leave to appeal dismissed March 25, 2004, S.C.C. Bulletin, 2004, p. 471 (AB Hassle):
...To be effective, the omeprazole must be released in the small intestine and not in the stomach. In order to prevent the omeprazole from being degraded by acidic gastric juices in the stomach, an enteric coating covering the omeprazole core is required. The enteric coating dissolves in the neutral to alkaline environment found in the small intestine after allowing the omeprazole to pass through the stomach unaltered.
However, if a conventional enteric coating is applied directly to the omeprazole core, the omeprazole rapidly decomposes, with the result that the pharmaceutical preparation (or, in everyday language for purposes of this case, a tablet) becomes badly discoloured and loses omeprazole content with the passage of time. This problem of storage stability can be addressed by including alkaline reacting constituents in the omeprazole core. However, when a tablet containing an alkaline core which is in direct contact with the enteric coating is ingested, some of the gastric juice in the stomach diffuses through the enteric coating into the omeprazole core during the time the tablet resides in the stomach before it is emptied into the small intestine. The gastric juice causes parts of the omeprazole core to dissolve which, in turn, interfere with and eventually dissolve the enteric coating.
The object of the invention disclosed in the relevant patents is to provide an enteric coated tablet of omeprazole which is resistant to dissolution in the stomach. This is obtained by having an inert subcoating between the omeprazole core and the enteric outer coating.
[6] The parties agree that, for all intents and purposes, it is Claim 1 of the '693 patent that is relevant and at the hearing, only Claim 1 was addressed. Claim 1 describes an oral pharmaceutical preparation in the following terms:
1. An oral pharmaceutical preparation comprising: (a) a core region comprising an effective amount of material selected from the group consisting of omeprazole plus an alkaline reacting compound, an alkaline omeprazole salt plus an alkaline reacting compound and an alkaline omeprazole salt alone; (b) an inert subcoating which is soluble or rapidly disintegrating in water disposed on said core region, said subcoating comprising one or more layers of materials selected from among tablet excipients and polymeric film-forming compounds; and (c) an outer layer disposed on said subcoating comprising an enteric coating.
BACKGROUND
[7] This is not Apotex's first NOA with respect to the '693 patent. AstraZeneca's counsel advises that Apotex first alleged non-infringement in April, 1993 and that the applicants' application in respect of that allegation was dismissed in May, 1996, by consent order wherein Apotex agreed to an order for prohibition with respect to patents other than the '693 patent. There is no evidence in the record in this respect. On December 18, 1997, an Apotex NOA alleged non-infringement of the same Canadian patents that are listed in its NOA in relation to this proceeding on the basis that its product would not contain a subcoating between the core and the enteric coating. Rather, Apotex would apply enteric coating directly to the core. AstraZeneca in turn initiated an application for an order of prohibition (T-179-98). By order of Madam Justice Tremblay-Lamer dated May 18, 1999, the NOA was deemed to be withdrawn and the application was deemed to be discontinued. The recitals in the order indicate that Apotex wished to withdraw its NOA and that such a withdrawal would render the proceedings moot.
[8] On August 1, 2000, an Apotex NOA with respect to the same Canadian patents as those listed in its NOA in relation to this proceeding alleged that 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 Apotex of its apo-omeprazole tablets for oral administration in strengths of 10 mg, 20 mg and 40 mg. The crux of the legal and factual basis was that the Apotex tablets would not infringe because they would not contain a subcoating. The Apotex tablets would comprise cores containing the drug and an enteric coating applied directly to the cores. AstraZeneca filed a notice of application (T-1747-00) seeking the same relief sought in this proceeding. Following the hearing of the application, Mr. Justice Kelen declared that the Apotex letter dated August 1, 2000 "does not comply with the Regulations, and therefore does not constitute a NOA under the Regulations". Justice Kelen granted an order prohibiting the Minister from issuing a NOC. I will return to Mr. Justice Kelen's order later in these reasons.
[9] Apotex appealed (A-563-02) and on November 3, 2003, its appeal was dismissed. Mr. Justice Rothstein, in AB Hassle, supra, construed claim 1 of the '693 patent at paragraph 17 and again at paragraph 24:
[17] Claim 1 describes an "oral pharmaceutical preparation" or, in everyday language, a tablet. The tablet is described as having a core region, an inert subcoating and an outer layer or enteric coating. Claim 1 does not purport to place any limitations on the inert subcoating. It does not say that the inert subcoating must be created in any particular manner.
[24] I conclude that patent claim 1 describes a pharmaceutical preparation which, in its finished product form, contains a subcoating or separating layer between the core and enteric coating, however the subcoating or separating layer is formed.
[10] On September 26, 2002, Apotex forwarded the NOA referred to at the outset of these reasons and AstraZeneca initiated this notice of application. The Apotex NOA alleges both non-infringement and invalidity with respect to the '693 patent. The latter attack is based on Gillette defence, anticipation, claims broader than the invention and inutility, insufficiency, ambiguity and obviousness.
[11] AstraZeneca's evidence on its application consisted of the affidavits of Mr. Oxhammar, Drs. Ymén, L_vgren, Burke, McGinity, Brenner and Bodmeier, Ms. Ripley and Ms. DeAbreu. Apotex's evidence consisted of the affidavits of Drs. Cima (Cima 1), Hopfenberg and Signorino and Mr. Tekie. Apotex's evidence included results from testing of the Apotex tablets. With leave of the court, Apotex filed further affidavits to establish the source and relevance of sample tablets and the formulations referred to in its evidence. AstraZeneca was granted leave to file an affidavit from Dr. Lindquist in reply to Cima 1 (Lindquist 1). With leave of the court, Apotex filed a further affidavit from Dr. Cima (Cima 2) in response to Lindquist 1. Following the cross-examination of Dr. Sherman (one of the affiants of Apotex's further affidavits), Apotex provided samples of its tablets to AstraZeneca and AstraZeneca was granted leave to file an affidavit of Dr. Lindquist regarding testing of Apotex's samples (Lindquist 2). Apotex was then granted leave to file further affidavits of Drs. Cima (Cima 3), Sodhi and Sherman and Mr. Ng-Chen-Hin. AstraZeneca was granted leave to file a responding affidavit of Dr. Lindquist (Lindquist 3).
THE NATURE OF THE PROCEEDING
[12] As earlier mentioned, this proceeding is brought under the Regulations. The history and scheme of the Regulations are well known and need not be repeated. Suffice it to say that when a second person (usually a generic manufacturer) seeks marketing approval (a NOC) for a drug, by comparing its drug to the drug of a first person (a patent holder) for the purpose of demonstrating bioequivalence, the generic will be required to address patents listed on the patent register by a first person. The generic or second person may do so by making an allegation of invalidity, or non-infringement, or both. The issues of validity and non-infringement between the patent holder and the generic originate with a NOA served on the first person by the second person setting out the second person's allegations, including a statement of the legal and factual basis for the allegation. Following receipt of a NOA, a first person may apply to the court for an order prohibiting the Minister from issuing a NOC until after the expiration of one or more of the patents. If the court finds that none of the generic's allegations is justified, the court shall grant an order of prohibition.
[13] Apotex, the generic drug producer or second person, under section 5 of the Regulations, provided its NOA to AstraZeneca regarding certain patents that AstraZeneca has listed under the provisions of section 4 of the Regulations. AstraZeneca's application, in response to the Apotex NOA, is brought under section 6 of the Regulations.
[14] Section 6 proceedings are not to be likened to actions for determining validity or infringement. They are proceedings in judicial review, to be held expeditiously, whose aim is to determine whether the Minister is free to issue the requested NOC. Their scope is confined to administrative purposes: Apotex Inc. v. Canada (Minister of National Health and Welfare) (1997), 76 C.P.R. (3d) 1 (F.C.A.). The determination must turn on whether there are allegations by the second person sufficiently substantiated to support a conclusion for administrative purposes (the issue of a NOC) that an applicant's patent would not be infringed if the second person's product is put on the market: Pharmacia Inc. v. Canada (Minister of National Health and Welfare) (1994), 58 C.P.R. (3d) 209 (F.C.A.).
[15] The Regulations allow a court to determine summarily, on the basis of the evidence adduced, whether the allegations are justified. If a full trial of validity or infringement issues is required, this can be obtained in the usual way by commencing an action: Pfizer Canada Inc. v. Apotex Inc. (2001), 11 C.P.R. (4th) 245 (F.C.A.); SmithKline Beecham Pharma Inc. v. Apotex Inc. (2001), 14 C.P.R. (4th) 76 (F.C.T.D.) aff'd. (2002), 21 C.P.R. (4th) 129 (F.C.A.); Novartis A.G. v. Apotex Inc. (2002), 22 C.P.R. (4th) 450 (F.C.A.). By merely commencing the proceeding, the applicant obtains what is tantamount to an interlocutory injunction without having satisfied any of the criteria a court would require before enjoining issuance of a NOC: Merck Frosst Canada Inc. v. Canada (Minister of National Health and Welfare), [1998] 2 S.C.R. 193; Bristol-Myers Squibb Canada Inc. v. Canada (Attorney General) (2001), 11 C.P.R. (4th) 539 (F.C.A.). By order dated June 4, 2004, the statutory stay in this proceeding has been extended to March 7, 2005.
ISSUES
[16] The issues are as follows:
1. Threshold Issues
(a) Is the NOA and detailed statement sufficient?
(b) Does issue estoppel apply to preclude Apotex from alleging non-infringement and invalidity?
(c) Does the doctrine of abuse of process operate to preclude Apotex from alleging non-infringement and invalidity?
2. Alternative Issues
(a) Is Apotex's allegation of non-infringement of the claims of the '693 patent justified?
(b) Is Apotex's allegation of invalidity of the '693 patent justified based on:
(i) the Gillette defence;
(ii) anticipation;
(iii) claims broader than in the invention disclosed
and lack utility;
(iv) insufficiency of disclosure and/or ambiguity; and
(v) obviousness.
THRESHOLD ISSUES
Is the NOA sufficient?
Overview
[17] AstraZeneca, in its notice of application, maintains that the NOA is not a proper NOA and detailed statement and accordingly does not comply with the Regulations. Broadly stated, the argument is that since the NOA strictly frames the issues in the proceedings and may not be expanded upon by the generic during the proceeding, Apotex's allegation of non-infringement is not justified because its evidence of non-infringement rests upon the notion that its subcoat is not continuous and is not inert. The NOA contains no such statements. Rather, the NOA rests solely on the position that the Apotex subcoating is not a subcoating that is applied to the core and is then covered with the enteric outer layer. Since the NOA makes no mention of the possibility of an in situ subcoat and makes no statement regarding non-infringement with respect to an in situ subcoat (that it is not continuous and not inert), Apotex cannot expand its grounds by either evidence or argument.
[18] Apotex counters that its allegation of non-infringement is not premised entirely on a construction of the '693 patent that is limited to a formulation having a separately applied subcoating. Neither its NOA nor its evidence supports such limitation. Moreover, Apotex, for purposes of this proceeding, but without prejudice to its rights on appeal, accepts that the '693 patent extends to a subcoat created in situ, provided that such subcoat carries with it all of the characteristics of claim 1. Apotex strenuously contests that its formulation will contain such a subcoat and, on the basis of all the evidence, submits that it is clear that AstraZeneca has failed to establish that such a subcoat exists.
The NOA and Detailed Statement
[19] The portion of the NOA and detailed statement that addresses the '693 patent is attached to these reasons as Schedule "A". Paraphrasing, the detailed statement refers to the '693 patent by its title and to a description of it as a "pharmaceutical preparation containing omeprazole or its alkaline salts intended for oral use and to the use of these preparations in the treatment of gastrointestinal diseases". Apotex describes the "essence of the invention" and states "[t]he alleged solution to the problem is asserted in the patent to be the separation from contact of the core and the enteric coating by application of a subcoating within the meaning of the patent". Then, Apotex identifies the essential elements of the '693 patent: the core; the inert subcoating; and the outer layer.
[20] On this basis, Apotex states that the "subcoating" cannot mean material comprising a reaction product resulting from a reaction between the core material and the enteric coating when the core is brought into contact with the enteric coating. The inventors, says Apotex, intended the subcoating to be "distinct material placed between the core and the enteric coating so as to avoid their coming into contact".
[21] The detailed statement also states that the claims of the '693 patent cannot be construed to include formulations disclosed in the patent as prior art. Formulations comprising a core with an enteric coating disposed on the core which were prepared by direct application of the enteric coating onto an omeprazole and alkaline core cannot be construed as falling within the scope of the '693 patent, otherwise the patent would be invalid as failing to claim something new because it would have within its scope that which is old. Nor, contends Apotex, can the claims be construed to include formulations disclosed within the disclosure as examples of formulations used for comparison purposes and disclaimed from being within the scope of the invention.
[22] Apotex then states that it will not infringe claim 1 because its product will not contain a subcoating, "as discussed above" within the meaning of the '693 patent. The Apotex product will contain a core with an enteric coating disposed on the core. Specifically, the detailed statement reads:
In formulating our product, we will bring into contact the outer enteric coating with the core and will not place a subcoating within the meaning of the patent between the core and the enteric coating, so that our formulation will consist of only components (i) and (iii), not component (ii).
[23] Continuing, the NOA states that Apotex is manufacturing what is taught in the prior art, specifically European Patent Application No. 124,495 (the '495 patent) published on November 7, 1984. It refers to example 12 of the '495 patent and alleges that its formulation is in accordance with the teachings of the '495 patent. Last, the NOA contains the statement that, should AstraZeneca assert that there is infringement of the '693 patent, the claims are invalid based on the Gillette defence. The remainder of the detailed statement is devoted to what is sub-titled "invalidity".
The Arguments
[24] As stated earlier, AstraZeneca's quarrel with the Apotex NOA, regarding non-infringement, is that the focus of the allegation is the subcoating and that it must be formed by a separate step in the process. Expanding on its position, AstraZeneca says that this is the entire basis for Apotex's allegation that its formulation will not contain a subcoating. Nowhere in the NOA does Apotex suggest, if its product has a subcoat between the core and the enteric coating that results from a reaction between the two, that such subcoating will not be inert or continuous. These allegations do not exist. They do not exist because the premise of the Apotex NOA is that the'693 patent cannot be interpreted to include an in situ subcoat, a matter that has been conclusively determined by the Federal Court of Appeal. AstraZeneca asserts that the issues that Apotex raises in this proceeding are simply not contained in its NOA and detailed statement. Since AstraZeneca does not allege "that the Apotex product infringes, no matter, the Gillette defence is not properly invoked with respect to infringement". AstraZeneca says that the claim requires a subcoat and if Apotex's product has a subcoat, it infringes. The circumstances under which Gillette applies are not in play.
[25] Apotex argues contra. It contends that there is no issue as to the nature of the reactive material at the interface of Apotex's product and that AstraZeneca is, in essence, saying that evidence regarding the nature of that reactive material goes beyond the NOA. The record, maintains Apotex, does not support AstraZeneca's contention that Apotex did not raise the issue that if it has any material between the enteric coating and the core that the material isn't "continuous, inert, film-forming and polymeric". In support of its position, Apotex points to the notice of application, a copy of which is attached as Schedule "B" to these reasons, and in particular to paragraphs 29, 30 and 31. It argues that, there, AstraZeneca says that the patent includes within its scope, a subcoating, regardless of how it was applied or generated and that, in view of Mr. Justice Kelen's decision, it is uncontroverted that Apotex will have a layer of material between the enteric coating and the core in its product. Most importantly, contends Apotex, AstraZeneca requests samples, formulation particulars, and process information relating to the Apotex NDS. Therefore, AstraZeneca knew what the issue was - does the Apotex product have reactive material that meets the confines of the patent?
[26] Examination of AstraZeneca's supporting affidavits, in Apotex's view, reveals that AstraZeneca knew what the issue was. The record that AstraZeneca placed before Apotex contained the affidavits of experts saying that the Apotex formulation could create an inert, polymeric, film-forming material. That was the case that Apotex had to answer and it answered by filing the affidavit of Dr. Cima.
[27] Apotex also refers to AstraZeneca's conduct subsequent to receipt of the Cima 1 affidavit. Never did it allege that Apotex had gone beyond its allegation. Rather, it moved for the right to file more evidence. There were several rounds that followed and not once did AstraZeneca ever say that the evidence was beside the point. To the contrary, it asserted that this evidence was fundamental to the final disposition of the case and that the evidence was so important that the whole case lay in the balance. AstraZeneca obtained orders to that effect. This argument, asserts Apotex, is a last-minute creation that cannot withstand the scrutiny of the record.
Analysis
[28] In my view, Apotex's position that AstraZeneca's argument is a last-minute creation is without merit. The notice of application, at paragraph 29, is unequivocal and states:
First, contrary to Apotex's proposed construction, the patents include within their scope a subcoating found in the finished dosage form, regardless of how it was applied or generated.
[29] I am not persuaded by Apotex's efforts to convince me that AstraZeneca's primary ground - advanced in support of its position that the allegation of non-infringement is not justified - constitutes an indication that Apotex has addressed the existence of material, between the core and the enteric coating, that is not continuous, inert, film-forming and polymeric. To succeed on this point, Apotex must point to its detailed statement, not to AstraZeneca's notice of application. I will have more to say in relation to the notice of application later in these reasons.
[30] After repeated readings of Apotex's NOA and detailed statement, in my view, it is the construction of the '693 patent that Apotex puts into play. The detailed statement claims that the '693 patent requires that the subcoating be "distinct material placed between the core and the enteric coating so as to avoid their coming into contact". All of Apotex's non-infringement allegations in its NOA flow from this fundamental position. Yet, in argument, Apotex says it did not restrict itself to a construction of the '693 patent that is limited to a formulation having a separately applied coat.
[31] The detailed statement says that it [the '693 patent] "cannot mean material comprising a reaction product resulting from a reaction between the core material and the enteric coating when the core is brought into contact with the enteric coating". Yet, in argument, Apotex says that it accepts that the '693 patent extends to an in situ subcoat.
[32] The NOA states that Apotex's product will consist only of an enteric coat and a core and will not contain a subcoat. This statement is founded on the premise that a subcoat in the '693 patent does not mean a "layer" or a "subcoat" or an "interface" (these characterizations were used interchangeably during the oral argument) that results from a reaction. The entire detailed statement revolves around Apotex's characterization of subcoat yet the allegation referencing the '495 patent makes no mention of a subcoat at all.
[33] In short, the NOA and detailed statement simply do not contain any allegation that should the '693 patent encompass a subcoating arising from a reaction, between the core material and the enteric coating when the two are brought into contact, the reactive layer will not be continuous, inert, film-forming and polymeric. It is settled law that when a generic makes an allegation, it must provide a detailed statement of the legal and factual basis for the allegation, to which it is limited. The allegation and detailed statement are intended to fully inform the first person of the case to be met: AB Hassle v. Canada (Minister of National Health and Welfare) (2000), 7 C.P.R. (4th) 272 (F.C.A.) (AB Hassle-2); Genpharm Inc. v. Minister of Health et al. (2002), 20 C.P.R. (4th) 1 (F.C.A.) (Genpharm Inc.); Hoffman-LaRoche Ltd. v. Apotex Inc. (1997), 72 C.P.R. (3d) 480 aff'd. (1998), 82 C.P.R. (3d) 384 (F.C.A.); Bayer AG v. Canada (Minister of National Health and Welfare) (1995), 60 C.P.R. (3d) 129 (F.C.A.); Merck Frosst Canada Inc. v. Canada (Minister of Health) (2001), 12 C.P.R. (4th) 447 (F.C.A.). Stated succinctly, the NOA must be sufficient to make the first person fully aware of the grounds on which the second person claims that the patent would not be infringed if the NOC issues. Whether a detailed statement is adequate depends on the facts and law relied upon in the detailed statement itself: SmithKline Beecham Pharma Inc. v. Apotex Inc. (2001), 10 C.P.R. (4th) 338 (F.C.A.).
[34] The NOA is dated September 26, 2002. It was on November 3, 2003, in AB Hassle, supra, that the Federal Court of Appeal construed the patent as "a pharmaceutical preparation which, in its finished form, contains a subcoating or separating layer between the core and enteric coating, however the subcoating or separating layer is formed". Apotex now indicates that, for purposes of this proceeding and without prejudice to its rights on appeal, the '693 patent extends to a subcoat created in situ, provided that it carries with it all of the requisite characteristics of claim 1. With respect, as I have stated, I can find nothing in the NOA to indicate such a position. To reiterate, the NOA states repeatedly that an in situ subcoat does not fall within the '693 patent.
[35] In its written submission, Apotex maintains that it "strenuously contests that its formulation will contain such a subcoat and, on the basis of all the evidence, submits that it is clear that Astra has failed to establish that such a subcoat exists". In oral argument, Apotex, having accepted, for purposes of this proceeding, that the patent could cover an in situ subcoat, nonetheless notes that the patent does not speak of an in situ subcoat and that the expert witnesses were left "trying to develop a system to determine infringement that the patent doesn't contemplate". Apotex does acknowledge, however, the existence of reaction material in Apotex's tablet but claims it is not an "infringing in situ subcoat" because "to infringe, it has to be continuous, inert and polymeric". I therefore take the reference in its written submissions to "such a subcoat" to mean one that infringes as a result of being continuous, inert and polymeric. I repeat myself - I can find no such statement, express or implied, in its detailed statement. Apotex does not allude to a non-infringing subcoat in its NOA in the context in which it now discusses it. Rather, it denies that reactive material is a subcoating within the meaning of the patent.
[36] It is apparent that Apotex questions the Federal Court of Appeal's construction of the '693 patent. That construction is binding on me and for that matter on Apotex for purposes of proceedings relating to it, pursuant to the Regulations.
[37] The NOA, as framed, turns on a construction issue that has been determined since the NOA was drafted. It does not (with respect to infringement) allege that the Apotex reactive material is non-infringing because it is not continuous, inert and polymeric; it alleges it does not infringe because the '693 patent does not contemplate a layer of reactive material at all. That construction is, in view of AB Hassle, supra, incorrect.
[38] Apotex also argues that in putting forth its position that its reactive "layer" or "interface" or "subcoating" is non-infringing because it is not inert, continuous or polymeric, it is merely answering the case that AstraZeneca put forth and that "AstraZeneca's conduct in the proceeding estops AstraZeneca from arguing that the NOA does not disclose any allegation regarding the layer being continuous, inert or polymeric".
[39] I agree with AstraZeneca that, notwithstanding Apotex's vigorous oral arguments in this respect, the written memorandum is silent in this regard. Since Apotex maintains that the arguments are contained at paragraph 37 of its memorandum, I have carefully reviewed that paragraph. The paragraph does not mention that Apotex's evidence is a response to AstraZeneca's case nor does it refer to AstraZeneca's conduct in relation to this proceeding. Apotex is not entitled, at the hearing, to raise arguments that are not contained in its written argument and of which AstraZeneca has not had notice. Even if I were to conclude otherwise, I would find that Apotex could not succeed.
[40] The notice of application, in relation to the allegation of non-infringement in the NOA, says that the allegation is not justified on two premises. First, AstraZeneca states that Apotex's construction of the patent is flawed because the patent includes within its scope a subcoating found in the finished dosage form regardless of how it was applied or generated. Given the contents of the NOA and detailed statement, it is not surprising that this would be AstraZeneca's primary ground.
[41] Second, AstraZeneca states that, in view of Mr. Justice Kelen's decision, it is uncontroverted that Apotex will have a layer of material between the enteric coating and the core in its tablets. Since the previous proceeding between these parties with respect to this product had gone to a hearing and the noted finding was contained in the reasons of the applications judge, Apotex, in my view, should not be surprised that AstraZeneca relied upon the finding to support its assertion that Apotex's allegation is not justified. As things now stand, both of the grounds that AstraZeneca advanced are conceded.
[42] AstraZeneca then states further grounds in the alternative. While I have not reviewed all of the documents in relation to Court File No. T-1747-00, it would not surprise me if the alternative grounds are a mirror image of those advanced in the earlier proceeding.
[43] In my view, the oral arguments of Apotex fail to recognize that AstraZeneca's position regarding the disclosure of samples, formulation particulars, and process information relating to Apotex's NDS - to enable it to assess whether a subcoat is present and whether the allegation of non-infringement is justified on any of the other alternative bases asserted by Apotex - is an alternative position. It is expressly stated to be an alternative position and, as such, it does not detract from the primary grounds upon which AstraZeneca rests its case. It is open to AstraZeneca to provide evidence in support of both its primary and alternative grounds.
[44] I do not view the affidavits filed in support of the notice of application through the same lens as Apotex. AstraZeneca filed several affidavits in support of its application. Many of those affidavits are not relevant to this issue. For example, the affidavit of Karen Burke details information regarding the ownership of the patents, receipt of Apotex's NOA and the like. The affidavit of Daphne C. Ripley deals with the publication date for a particular reference. Dr. Kurt Lövgren, one of the inventors of the '693 patent, describes the development process of the omeprazole dosage form.
[45] The affidavits, material to this issue, are those of Drs. James W. McGinty, Gerald S. Brenner and Roland Bodmeier, all of whom were tendered as experts. No issue was taken with respect to the qualifications of any of these individuals and for present purposes it is not necessary to review their respective areas of expertise.
[46] Dr. McGinty's affidavit consists of 259 paragraphs, Dr. Brenner's affidavit contains 168 paragraphs and Dr. Bodmeier's affidavit includes 191 paragraphs. When viewed in isolation and at first blush, it could be said that one paragraph in the McGinty affidavit, one paragraph in the Brenner affidavit and two paragraphs of the Bodmeier affidavit invite additional evidence regarding infringement. The paragraphs cannot be construed in that manner when regard is had to the context in which they appear. The paragraphs noted by Apotex, when read fairly and in their context, relate to the construction of the '693 patent (whether it is a process or product patent) and to the matter of the insufficiency of the NOA and detailed statement (to enable a proper assessment of infringement to be conducted). The mere suggestion of possible testing processes for the purpose of demonstrating the deficiencies of Apotex's allegation do not put into play issues that enable Apotex to add, by evidence, to the substance of its detailed statement under the guise of responding to AstraZeneca's case.
[47] In relation to AstraZeneca's conduct, Apotex refers to the application judge's reasons in Novartis, supra, reported at (2001), 15 C.P.R. (4th) 417 (F.C.T.D.). I do not find that authority to be of assistance here. The primary threshold issue in that case related to whether there was an abuse of process in circumstances where an NOA was withdrawn as a result of "problems regarding compliance with the Food and Drug Regulations". The case was concerned with prior art documents and it did not deal with alternative grounds. I do not think that it was incumbent upon AstraZeneca - in circumstances where its notice of application specifically relied upon two delineated bases of attack regarding the allegation of non-infringement and an alternative third basis - to bring a motion to strike the Apotex evidence. The record reveals that there was a motion in relation to the filing of that evidence and then some.
[48] Nor can I see any basis for Apotex alleging prejudice because of AstraZeneca's conduct. AstraZeneca did not lead Apotex down a garden path. Apotex had clear notice of AstraZeneca's attack regarding its allegation of non-infringement as stated in paragraphs 29 and 30 of its notice of application. It also had notice of the alternative basis. It was open to and prudent for AstraZeneca to cover all avenues in relation to its alternative ground. In so doing, it does not mean that it resiles from or forfeits its primary challenges.
[49] Apotex points to Pfizer Canada Inc. v. Apotex Inc. (2004), 31 C.P.R. (4th) 214 (F.C.) aff'd. 2004 FCA 398 (Pfizer-2) but I fail to see how it is relevant to this matter. The Federal Court of Appeal upheld the applications judge who determined, there, that the NOA was sufficient to alert Pfizer to the basis of Apotex's allegation that it would not infringe because its azithromycin tablets would not contain a dihydrate even though it did not also state that the tablets would contain monohydrate. That is not the situation here. In this matter, the detailed statement is not only silent regarding the fact that an in situ subcoat is not inert or continuous, it states that no subcoat exists.
[50] I have also had regard to the decision of Justice vonFinckenstein in relation to this proceeding which is reported at (2004), 33 C.P.R. (4th) 326 (F.C.). In my opinion, the reasons in that case indicate that the manner in which this proceeding unfolded is illustrative of the gamesmanship that is a recurring problem in this kind of proceeding as noted by Mr. Justice Evans in Pfizer-2 and detailed in the reasons of Justice vonFinckenstein.
[51] At the end of the day, further court orders and the filing of evidence in response does not resolve the basic issue because, as Mr. Justice Stone stated in AB Hassle-2, supra, "[t]he question remains whether, given the scheme of the Regulations and the decided cases, it is proper to raise and rely upon new facts in the section 6 proceeding in addition to those relied upon in the detailed statement". The law is settled that the entire factual basis is to be set forth in the detailed statement rather than revealed piecemeal when some need happens to arise in a section 6 proceeding. This requirement cannot be remedied by a court order, including an order under subsection 6(7) of the Regulations: Genpharm, supra.
[52] In the result, I would not go so far as to grant the declaration sought by AstraZeneca - that Apotex's letter dated September 26, 2002, is not a notice of allegation as contemplated by the Regulations - because the notice of allegation does contain an allegation of non-infringement that is supported by a detailed statement of the legal and factual basis. However, Apotex cannot add to the contents of its NOA and purport to establish non-infringement by evidence for which no basis is stated in the NOA. To that end, the NOA is deficient because it contains an allegation of non-infringement that turns on what has proven to be an incorrect construction of the '693 patent. Not having raised the allegation in its NOA that the reactive material in its product (that it now accepts is present) is not inert, continuous and polymeric, it cannot do so by way of evidence or argument. Consequently, Apotex's allegation of non-infringement is not justified.
Does Issue Estoppel apply to preclude Apotex from alleging non-infringement and invalidity?
[53] AstraZeneca also relies on the doctrine of issue estoppel. AstraZeneca maintains that Apotex's allegation of non-infringement in its NOA in this proceeding turns on the construction of claim 1 as did its allegation of non-infringement in its NOA in the previous proceeding. The Federal Court of Appeal has determined the construction issue and Apotex is precluded from relitigating it. Apotex's concession, for purposes of this hearing, that the '693 patent extends to an in situ subcoat, in conjunction with the Federal Court of Appeal determination on construction, is dispositive. The conditions set out in Danyluk v. Ainsworth Technologies Inc., [2001] 2 S.C.R. 460 (Danyluk) are met.
[54] In view of my reasons in relation to the issue regarding the sufficiency of the NOA, I am inclined to agree with AstraZeneca that issue estoppel applies, for the reasons stated by AstraZeneca, regarding Apotex's allegation of non-infringement. However, in the event my de