Ferring inc. v. Canada (Health)

Ferring inc. v. Canada (Health)
Court (s) Database
Federal Court Decisions
Date
2007-03-20
Neutral citation
2007 FC 300
File numbers
T-165-07
Notes
Reported Decision
Decision Content
Date: 20070320
Docket: T-165-07
Citation: 2007 FC 300
BETWEEN:
FERRING INC.
Applicant
and
THE MINISTER OF HEALTH, APOTEX INC.
and NOVOPHARM LIMITED
Respondents
and
Docket: T-2188-06
BETWEEN:
SANOFI-AVENTIS CANADA INC.
Applicant
and
THE MINISTER OF HEALTH,
THE ATTORNEY GENERAL OF CANADA
and NOVOPHARM INC.
Respondents
and
Docket: T-2189-06
BETWEEN:
SANOFI-AVENTIS CANADA INC.
Applicant
and
THE MINISTER OF HEALTH,
THE ATTORNEY GENERAL OF CANADA
and APOTEX INC.
Respondents
and
Docket: T-2196-06
BETWEEN:
SANOFI-AVENTIS CANADA INC.
Applicant
and
THE MINISTER OF HEALTH,
THE ATTORNEY GENERAL OF CANADA
and APOTEX INC.
Respondents
and
Docket: T-2220-06
BETWEEN:
NOVOPHARM LIMITED
Applicant
and
THE MINISTER OF HEALTH,
THE ATTORNEY GENERAL OF CANADA
and SANOFI-AVENTIS CANADA INC.
Respondents
AMENDED REASONS FOR JUDGMENT
HUGHES J.
[1] These reasons pertain to five separate applications for judicial review argued consecutively, all of which deal with actions taken by the Minister of Health following the release of the decision of the Supreme Court of Canada in AstraZeneca Canada Inc. v. Canada (Minister of Health), [2006] 2 S.C.R. 560, 2006 S.C.C. 49, on November 3, 2006 (AstraZeneca).
[2] The core subject matter is the interpretation and application of the Patented Medicines (Notice of Compliance) Regulations SOR/93-133 as periodically amended (NOC Regulations) and in particular, section 5(1) of those Regulations. There is no doubt that the AstraZeneca decision had a profound effect on this subject. Influenced by that decision the Minister issued Notices of Compliance (NOC) to each of two generic drug companies Apotex Inc. and Novopharm Limited notwithstanding patents listed by innovator drug companies Ferring Inc. and Sanofi-Aventis Canada Inc. In one instance the Minister would not issue an NOC and required Novopharm to address two patents in the context of section 5 of the NOC Regulations. The result of the Minister’s actions is that Ferring, Sanofi-Aventis and Novopharm have brought judicial review applications in this Court seeking relief including the quashing of the decisions made against their interests and for directions to the Minister to take steps more favourable to their interests.
[3] For the reasons that follow, I find that all applications are to be dismissed, each party to bear its own costs.
History of the NOC Regulations
[4] The arcane nature of NOC proceedings makes it too easy to lose perspective as to the objectives of the NOC Regulations, their purpose and intent. The Supreme Court has offered guidance in this respect in three decisions, AstraZeneca supra, Bristol-Myers Squibb Co. v. Canada (Attorney General) [2005], 1 S.C.R. 533 (Biolyse), and Merck Frosst Canada Inc. v. Canada (Minister of National Health and Welfare) (1998), 80 C.P.R. (3rd) 368 (Merck Frosst). The Federal Court of Appeal and this Court have extensively dealt with cases under the NOC Regulations.
[5] It is useful to begin with the Food and Drug Regulations C.R.C. C. 870, Part C, enacted under the provisions of the Food and Drug Act R.S.C. 1985, c. F-27. The objective of that Act is to bring safe and effective medicines to market so as to advance the nation’s health; the law governing approval of new drugs is to ensure the safety and effectiveness of the new drugs before they can be put on the market (AstraZeneca, paragraph 12).
[6] An innovator drug company seeking to bring a new drug to market in Canada incurs costs not only in the research and development leading to the drug, but in the trials and testing required by the Minister in order to satisfy him that the drug is safe and effective. There is no question that in almost every instance the cost, effort and time involved are considerable, although Canada is not the only country requiring government approval of this kind and much of this cost may be spread out over several countries.
[7] The innovator company will seek approval to sell its drug in Canada, called a Notice of Compliance (NOC), by filing with the Minister a New Drug Submission (NDS). Once an NOC has been obtained, the innovator will be required to make any supplemental filings by way of a Supplemental New Drug Submission (S/NDS). Such supplemental filings may deal with a broad range of matters both administrative and technical such as name changes, merger of corporations, change in manufacturing circumstances and changes to the drug itself (AstraZeneca, paragraph 19).
[8] The Food and Drug legislation contemplates another body of drug companies often called generics. They seek to bring to the market in Canada what are called by the innovators “copy-cat” versions of approved drugs. The Food and Drug Regulations provide in section C.08.002.1 that a generic may file what is called an Abbreviated New Drug Submission (ANDS) in which the generic is only required to demonstrate that it proposes to bring to market in Canada a drug that is pharmaceutically equivalent (defined in section c.08.001.1) and bioequivalent (not defined) to the Canadian reference product. In so demonstrating, Parliament reasoned, the generic will have shown that its drug will be equally safe and effective as the original (AstraZeneca, paragraph 24). Thus, the generic will not have had to expend the considerable costs in research that the innovator was required to do (Biolyse, paragraphs 6 and 7).
[9] The Food and Drug Regulations define a “Canadian reference product” in section 08.001.1 as a drug in respect of which an NOC has been granted and is marketed in Canada; where the drug is no longer marketed or for any other reason, the Minister can approve as acceptable some other drug. In the Ferring proceeding before this Court the Minister found that a drug acquired by Novopharm in the United Kingdom was acceptable. In oral argument, Ferring’s counsel raised some question as to the provenance of this drug, however, this issue was not raised as an issue in its memorandum of argument or in its Notice of Application and therefore was not properly before the Court. In any event, this kind of decision is one which clearly lies with the discretion of the Minister, not the Court.
[10] Section 08.001.1 of the Food and Drug Regulations defines “pharmaceutical equivalent” as a new drug that, in comparison with another drug, contains identical amounts of the identical medicinal ingredients, in comparable dosage forms, but does not necessarily contain the same non-medicinal ingredients (sometimes called excipients).
[11] The Food and Drug Regulations do not define bioequivalence, however, all parties are agreed that in most instances this is a measure of how much of the medicinal ingredient is found in the bloodstream of a person measured over certain intervals after the medicine has been administered. If the “profile” thus obtained is identical, within appropriate limits, as between drugs that are compared, these drugs are said to be bioequivalent. In some cases, such a test is unnecessary, for instance where the drug is administered directly into the bloodstream by injection or intended for topical application only, such as eye drops.
[12] The Food and Drug Regulations section C.08.004.1 provide a delay such that prior to October 5, 2006, the Minister was prohibited from issuing a NOC to a generic in respect of certain types of drugs before five years after the innovator receives its NOC. After October 5, 2006 the generic cannot apply for an NOC in respect of certain types of drugs until six years after the innovator received its NOC and the generic cannot get its NOC for at least two years after that.
[13] The Minister, upon receipt of an ANDS from a generic, is required only to examine the information provided by the generic as to the pharmaceutical equivalence and bioequivalence of its proposed drug to that of the innovator. There is no requirement that the Minister examine the data previously filed by the innovator in support of its NOC (Bayer Inc. v. Canada (Attorney General) (1999), 87 C.P.R.(3d) 293 (F.C.A.)). Once the Minister is satisfied as to pharmaceutical equivalence and bioequivalence the Minister has a duty to issue an NOC to the generic without delay (Apotex Inc. v. Canada (Attorney General), [1994] 1 F.C. 742 (C.A.).
[14] At this point consideration must turn to the NOC Regulations. These Regulations lie at the intersection of the Food and Drug Act whose objective is to bring safe and effective drugs to the Canadian market, and the Patent Act, R.S.C. 1985, c.P-4 which seeks to award a temporary monopoly to innovators who disclose their invention to the public (AstraZeneca, paragraph 12). It has been said that perhaps these Regulations were too hastily formulated and do not cover procedural problems which might well have been foreseen in this field of intensive competition (Schering Canada Inc. v. Nu-Pharm Inc. (1996), 68 C.P.R. (3d) 332 (F.C.).
[15] The NOC Regulations were introduced in 1993. Prior to that time Canada had a compulsory licence scheme, whereby upon making certain showings, a person could obtain a compulsory licence from the Commissioner of Patents to work in Canada inventions covered by a patent directed to a food or medicine. Compulsory licences were dropped in 1993 and replaced by the NOC Regulations (Biolyse, paragraphs 6 to 12). The Regulations are modelled rather imperfectly upon similar provisions in the United States under the Hatch-Waxman Act, Pub. L. No. 98-417, 98 Stat. 1585 (1984) codified as amended at 21 U.S.C.A. § 355 and 35 U.S.C.A. § 271(e) (1994), 180 A.L.R. Fed. 487 (officially cited as Patent Laws and Drug Price Competition and Patent Term Restoration Act of 1984).
[16] The Supreme Court in AstraZeneca has taken great pains to remind us that the NOC Regulations were enacted pursuant to section 55.2(4) of the Patent Act R.S.C. 1985, c.P-4, whose purpose was to permit early working of a patented invention by persons such as generic drug companies for the purpose of obtaining regulatory approval for their drugs so that they could enter the market at an appropriate time (AstraZeneca, paragraphs 15, 16 and 38). As stated in Biolyse, paragraph 50, Parliament recognized that early working provisions could be abused thus created a balance designed to strengthen the hand of patent owners against generic competitors.
[17] An earlier statement by the Supreme Court in Merck Frosst at paragraph 30 that the purpose of the NOC Regulations was simply to prevent patent infringement by delaying the issuance of an NOC until such time as their implementation in would not result in such infringement must be tempered by what has been said by that Court in Biolyse and AstraZeneca recited above. As stated in Biolyse at paragraph 53, it is not every use of a patented invention that will trigger NOC Regulations.
[18] With the objects of the NOC Regulations in mind, the procedure established shows that the Minister and two other parties are from time to time engaged in the process. One party is identified as a “first person” who is defined in section 2 and 4(1) of the Regulations as “a person who files or has filed a submission for, or has been issued an NOC …”. This person is sometimes called the “innovator” or “brand” drug company and, as provided in section 4(2)(c) of the Regulations can be the owner of a pertinent patent or a licencee thereof, or simply be a person who has the patent owner’s consent to deal with the patent in respect of the Regulations.
[19] The other party is called a “second person’ and is defined in section 2 of the Regulations with reference to section 5(1). This definition is the nub of the disputes now before this Court. It is repeated in full. This definition was changed by amendments effective October 5, 2006 therefore the old and new versions are set out:
Old Version
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 bioequivalence d’après les caractéristiques pharmaceutiques et, la cas echeant, les caracteristiques en malibre 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 inserit au registre qui se rapporte à cette autre drogue :
…
New Version
5. (1) If a second person files a submission for a notice of compliance in respect of a drug and the submission directly or indirectly compares the drug with, or makes reference to, another drug marketed in Canada under a notice of compliance issued to a first person and in respect of which a patent list has been submitted, the second person shall, in the submission, with respect to each patent on the register in respect of the other drug,
…
5. (1) Dans le cas où la seconde personne dépose une présentation pour un avis de conformité à l’égard d’une drogue, laquelle présentation, directement ou indirectement, compare celle ci à une autre drogue commercialisée sur le marché canadien aux termes d’un avis de conformité délivré à la première personne et à l’égard de laquelle une liste de brevets a été présentée — ou y fait renvoi —, cette seconde personne doit, à l’égard de chaque brevet ajouté au registre pour cette autre drogue, inclure dans sa présentation :
…
[20] Sometimes a “second person” is simply referred to as a “generic” however one must be careful, particularly in the circumstances of these proceedings, not to interchange those words too readily. The issue here is whether and when a “generic” becomes a “second person” as defined the the NOC Regulations.
[21] At this point consideration is given to section 7(1) of the transitional provisions included in the October 5, 2006 amendments to the Regulations as that section purports to affect section 5(1). It states:
7. (1) Subsection 5(1) of the Patented Medicines (Notice of Compliance) Regulations, as enacted by section 2 of these Regulations, applies to a second person who has filed a submission referred to in subsection 5(1) prior to the coming into force of these Regulations and the date of filing of the submission is deemed to be the date of the coming into force of these Regulations.
7. (1) Le paragraphe 5(1) du Règlement sur les médicaments brevetés (avis de conformité), édicté par l’article 2 du présent règlement, s’applique à toute seconde personne qui a déposé la présentation visée à ce paragraphe avant l’entrée en vigueur du présent règlement, et la date de dépôt de cette présentation est réputée être la date d’entrée en vigueur du présent règlement.
[22] The full impact of the changes to section 5(1) brought about by the October 5, 2006 amendments does not need to be addressed here since the issue in these proceedings is whether or not the particular generic at issue was a “second person’ in the circumstances of events occurring before October 5, 2006. If the generic was not a “second person” then section 5(1) was never engaged, thus the transitional provisions are of no effect. If the generic was a “second person” then it was such a person well before October 5, 2006 and would have had to take the steps provided for by that section well before that time in any event.
[23] The process devised by the NOC Regulations begins with section 3(1) (of the old Regulations, it is now section 3(2), the wording is similar). That section provides for a Register upon which patents may be listed by a “first person”. That section imposes a duty on the Minister not only to maintain that list, but to determine what patents may go on the list and to remove patents that have been listed improperly. That is a particular duty imposed on the Minister (Novopharm Ltd. v. Canada (Minister of National Health and Welfare) (1998), 78 C.P.R. (3d) 54 (FC) at paragraph 19). At this stage a generic has no role. A generic cannot compel the Minister to list or de-list a patent (Apotex Inc. v. Canada (Minister of National Health and Welfare), (2000), 3 C.P.R. (4th) 1 (F.C.A.)). Where an innovator challenges the Minister’s decision in Court a generic has not been allowed to intervene (Warner-Lambert Canada Inc. v. Canada (Minister of Health), (2000), 8 C.P.R. (4th) 302 (F.C.)). At this stage a listing does not affect any particular generic.
[24] The criteria as to whether a patent is to be listed or not are set out in section 4 of the Regulations. There are a number of criteria, the most important of which for purposes of this discussion is that the patent contains a claim for the medicine or use of the medicine for which the particular NOC was granted, section 4(2)(b) of the pre-October 5, 2006 (post October 5, 2006, Regulations section 4(2) speak of a medicinal ingredient or use of a medicinal ingredient – the distinction is not relevant here).
[25] There has been much jurisprudence discussing the nature and extent to which a link between the medicine or use provided for in the innovator’s NOC must correspond to the innovation claimed in the patent sought to be listed. It need not be reviewed here. The important point to make is that there may be several NOCs respecting a drug and patents are listed as against a particular NOC.
[26] Once a patent is listed, the Minister places any application for an NOC sought by a generic in respect of the innovator’s particular NOC corresponding to that list, on “patent hold”. That is, the Minister will not further process the generic’s application until the generic has successfully dealt with the listed patents in some way contemplated by the NOC Regulations, or those patents expire, or, as AstraZeneca points out, the generic can demonstrate that it is not a “second person” as described in the Regulations and thus does not need to address the patents at all.
[27] Previous to the decision of the Supreme Court in AstraZeneca supra, the practice has been that the generic would send to the listing party (the first party) a letter, usually called a notice of allegation (NOA). That notice would raise one or more of the grounds for allegation set out in section 5 of those Regulations. In brief, the grounds are:
1. the generic will wait until the patent expires;
2. the listing party was not the person entitled to list the patent;
3. the patent has expired;
4. the patent is not valid;
5. the patent will not be infringed.
[28] There is no specific provision in section 5 whereby a generic can allege, in its notice to the innovator, that the patent should not have been listed in the first place or that the generic is not required to address the patents listed at all.
[29] The innovator, upon receiving a notice of allegation can do nothing, in which case, after 45 days have expired, the Minister is free to grant an NOC to the generic. Doing nothing, or even losing proceedings subsequently instituted does nothing to impair the innovator’s ability to commence and pursue an ordinary patent infringement action. The innovator may, alternatively, choose to institute proceedings under the provisions of section 6 (1) of the NOC Regulations. Those proceedings may engage some or all of the listed patents and some or all of the allegations raised by the generic. It is the choice of the innovator at that point.
[30] While the Minister has a duty to issue an NOC promptly under the Food and Drug Regulations, section 7 of the NOC Regulations require the Minister to wait for up to 24 months before issuing such an NOC unless it is shown that the innovator has done nothing for 45 days or that the proceedings instituted by the innovator have been concluded in favour of the generic. This is a legislated stay, it is not imposed by the Court order, it is imposed by the Regulations. In Merck Frosst the Supreme Court of Canada at paragraph 33 described such a stay as “draconian”.
[31] Once proceedings are instituted, which in this Court is by way of a Notice of Application naming the Minister and generic as respondents, the generic may, under section 6 (5) (a) of the NOC Regulations move to strike the proceedings on the basis that an asserted patent should never have been listed in the first place. This is the first opportunity specifically given to the generic for doing so. Section 6 (5) (b) permits the generic to move to strike the proceedings for abuse and the like.
[32] Thus it would appear that a generic must wait until proceedings are commenced before it can engage the issue as to whether the patent should have been listed at all having regard to the provisions of section 4 of the NOC Regulations. As discussed, the jurisprudence indicates that a generic cannot compel the Minister directly to de-list a patent nor intervene in proceedings respecting listings brought by the innovator.
[33] The AstraZeneca decision, supra has brought a new dimension to this procedure. It has held that a generic need not address at all certain listed patents under certain circumstances.
Understanding AstraZeneca
[34] Before considering the meaning and effect of the decision of the Supreme Court of Canada in AstraZeneca, it is necessary to consider the processes involved in obtaining an NOC under the Food and Drug Regulations and the listing of patents under the NOC Regulations.
[35] Under the Food and Drug Regulations an innovator will, on seeking an NOC to market a new drug in Canada, file a great deal of information with the Minister respecting that drug’s safety and effectiveness. In time, after much discussion, Ministerial approval may be given and an NOC issued. That NOC is indexed under the trade name for the drug; here in the case of Sanofi-Aventis, it is ALTACE, and in the case of Ferring, it is DDAVP. A file number is given to the submission for an NOC; however, that number can change in given circumstances. In considering the submissions the Minister refers to the subject as a “drug product” which, in accordance with the Minister’s policy statements, is a term used to describe a collection of attributes concerning the drug itself, the uses for which the drug is approved and its packaging and labelling including a product monograph.
[36] The NOC that is issued will specify the manufacturer (not necessarily the actual maker but the source of the drug for the Canadian market-place), the active ingredient(s), the trade name, the permitted uses (indications) for the drug, dosage strength (e.g. 5 mg or 10 mg, etc.) and dosage form (e.g. tablets, capsules, parenteral, etc.) It is to be noted that what is not specified in the NOC itself are things like what are the non-medicinal ingredients (excipients), how the drug is actually made, or how the purity of the drug is tested.
[37] Labelling, which the Minister considers to include packaging, labels and the product monograph, is attached to the NOC. The product monograph is a document of a few score of pages, available to the public, including health professionals, that contains a great deal of technical information about the drug, specifications of the active ingredient(s), the excipients, instructions for use, precautions, certain test data and references to source material.
[38] From time to time changes are made to the drug labelling, conditions of manufacture, corporate structure of the manufacturer, uses approved for the drug and other matters. The Minister is to be kept advised as to these changes. Some changes are considered relatively trivial and the innovator simply gives notice of the change to the Minister. Other changes are considered more important and the innovator must give notice to the Minister and receive approval before making them. The most important of these changes require that a new NOC be issued before the changes can be made. Section C.08.003(2) of the Food and Drug Regulations sets out these changes that require a new NOC. They are:
C.08.003. (2) The matters specified for the purposes of subsection (1), in relation to the new drug, are the following:
(a) the description of the new drug;
(b) the brand name of the new drug or the identifying name or code proposed for the new drug;
(c) the specifications of the ingredients of the new drug;
(d) the plant and equipment used in manufacturing, preparation and packaging the new drug;
(e) the method of manufacture and the controls used in manufacturing, preparation and packaging the new drug;
(f) the tests applied to control the potency, purity, stability and safety of the new drug;
(g) the labels used in connection with the new drug;
(h) the representations made with regard to the new drug respecting
(i) the recommended route of administration of the new drug,
C.08.003. (2) Pour l'application du paragraphe (1), les éléments ayant trait à la drogue nouvelle sont les suivants :
a) sa description;
b) sa marque nominative ou le nom ou code sous lequel il est proposé de l'identifier;
c) les spécifications de ses ingrédients;
d) les installations et l'équipement à utiliser pour sa fabrication, sa préparation et son emballage;
e) la méthode de fabrication et les mécanismes de contrôle à appliquer pour sa fabrication, sa préparation et son emballage;
f) les analyses effectuées pour contrôler son activité, sa pureté, sa stabilité et son innocuité;
g) les étiquettes à utiliser pour la drogue nouvelle;
h) les observations faites relativement :
(i) à la voie d'administration recommandée pour la drogue nouvelle,
[39] Some changes, such as change of name, have no effect on the drug itself. Other changes, such as changes to a method of manufacture, have potential to change the drug itself. Yet other changes, such as changes in use of the drug, do not affect the drug itself but serve to expand or vary the market for the drug. The Minister, in looking at such changes, may say that the “drug product” (i.e. drug plus use plus packaging) has changed, but the fact remains that the chemistry of the “drug” has not.
[40] A new NOC will issue when changes occur in the areas listed in section C.08.003(2) of the Regulations set out above. Where the change is one where the manufacturer has changed or corporate entity merged or the like has happened, the file number of the NOC may change. The new NOC will bear the date of issue and certain information such as changed indications, or changed labelling or product monograph. Each new NOC is considered to incorporate all previous NOCs issued for the drug, together with the new changes.
[41] Turning to the NOC Regulations, they permit an innovator or its nominee to list certain patents on a Register kept by the Minister. Those are the patents that a “second person” must at a later time address. Section 4(3) of the Regulations states that the innovator must submit such a list at the time that it files a submission for an NOC. It is to be noted that any NOC submission that will serve to provide a vehicle for providing a patent list. Thus, a submission for a simple name change has been used to submit a new patent to be listed.
[42] Sections 4(4) and 4(5) of the NOC Regulations, as they stood pre-October 5, 2006, also permitted patents that had not yet been issued to be added to the patent list provided that the patent had been applied for before the particular NOC submission had been filed and the patent is added within 30 days from its issuance. Since there can be many NOCs in respect of a drug, section 4(5) requires that where patents are added, the innovator must specify the particular NOC to which the patents are to apply.
[43] Another complexity must be added. Canada adheres to international conventions and treaties respecting patents, including the Paris Convention and the Patent Co‑Operation Treaty (PCT). In accordance with the Convention, a party may file a preliminary patent application in a member country and, within a year, file a more substantial application and, if there is identical subject matter with the earlier application, a “priority” can be claimed for that subject matter, the effect of which would be to make certain public disclosures by third parties irrelevant for purposes of novelty or obviousness. The substantive patent application can be filed under the provisions of the PCT, which means that only one filing in one patent office takes place, usually in the United States, Europe or Japan. The applicant then receives a period of up to about three years in which it can file separate patent applications in all or whichever of the 130 or so member countries of the PCT it chooses. Canada is one such country. If an application is filed in a member country (called entering the national phase), the application is given an effective filing date of the original PCT filing. Thus, a third party will not know for up to three years whether a patent application has actually been filed in Canada but, when it is filed, the application is deemed to have been filed up to three years ago. For NOC purposes then, under section 4(4), a filing date of the patent application that precedes the NOC submission date can be deemed even though the actual filing date in Canada was later, the deemed filing date was earlier according to PCT obligations.
[44] Once the patent application is filed with the Canadian Patent Office, it is to be published within 18 months of its Canadian filing date. If that date is the deemed PCT filing date, then publications can be deemed to have occurred 18 months from the deemed filing date. As of the date of publication, actual or deemed, a conditional right to receive reasonable compensation arises which crystallizes only if a patent is actually granted with claims that are essentially identical to those of the published application (section 55(1)(b) of the Patent Act). A third person such as a generic could be liable for “infringement” if it sold a drug as claimed in the patent application at any time after the publication date but only if and when the patent issued with such a claim.
[45] A person applying for a patent in Canada can control, to a large measure, the speed with which a patent application proceeds through the Patent Office. An application will not be examined until the applicant requests it (Patent Act, section 35(1)). Responses to requests made by the examiner can be made quickly or slowly, extensions of time can be requested (Patent Rules, s. 26) and early examinations can be requested (Patent Rules, s. 28). Thus, a potential patent infringer may be left in doubt for a long time as to whether there will be a patent at all and if so, when and what it will claim. In the case of some of the Sanofi-Aventis patents at issue here, the evidence shows that it took some 10 years after the deemed Canadian application date before the patents were issued.
[46] This rather long narrative of the patent process was necessary since much of the argument about the AstraZeneca decision has to do with “early working” of a potential invention. As can be seen, there are many unknowns involved as to if and when a patent will issue and if and when it could be placed on a patent list under the NOC Regulations and, if so, as against which NOC. The issue has properly been defined as a “minefield” for a generic seeking to enter the market. The only truly relevant time for considering a patent is the date when it is listed against an NOC. Even then, as will be considered later, there may be a retroactive effect.
[47] Turning to the AstraZeneca decision, it is the third decision given by the Supreme Court of Canada dealing with the relatively narrow and arcane field of the NOC Regulations. That Court started with the case of Merck Frosst where at paragraph 33 of its Reasons, the statutory freeze imposed by those Regulations was described as “draconian”:
33. There may be good policy reasons for the operation of the regulatory scheme in this fashion. However, it would be manifestly unjust to subject generic drug producers to such a draconian regime without at least permitting them to protect themselves and reduce the length of the presumptive injunction by initiating the NOC process as early as possible. As I have already said, this is not inconsistent with s. 6(2) of the Regulations, which provides only that the court shall make an order of prohibition "if it finds that none of those allegations is justified" a finding which can only be made, at the earliest, on the date of hearing. Thus, an application could properly be rejected by the Federal Court as premature if the allegation made in its support is not justified at that time. This is sufficient, in my view, to discourage inappropriately premature applications. On the other hand, to interpret the Regulations in the manner urged by the respondents would effectively be to require generic drug producers to satisfy all requirements in s. 5 and then to wait up to an additional 30 months before marketing the desired product. This cannot be what was intended by the Regulations.
[48] Eight years later the Supreme Court considered the NOC Regulations in Biolyse, supra. In Biolyse the Court explained that the NOC Regulations were enacted so as to permit “early working” of a patent invention respecting a drug by permitting generics to obtain an NOC to enter the market when a patent expired and the permitted stockpiling during the term of the patent (now no longer a permitted exemption). These provisions provided to the innovator companies remedies in addition to the usual remedies under the Patent Act. The Court said, at paragraphs 11 and 12 of Biolyse:
11. However, having agreed to respect the 20-year monopoly granted by patents, Parliament wished to facilitate the entry of competition immediately thereafter. It acted to eliminate the usual regulatory lag of two years or more after expiry of a patent for the generic manufacturer to do the work necessary to obtain a NOC. Parliament did so by introducing an exemption from the owner's patent rights under which the generic manufacturers could work the patented invention within the 20-year period ("the early working exception") to the extent necessary to obtain a NOC at the time the patent(s) expired (s. 55.2(1)) and to "stockpile" generic product towards the end of the 20-year period to await lawful market entry (s. 55.2(2)). In order to prevent abuse of the "early working" and "stockpiling" exceptions to patent protection, the government enacted the NOC Regulations that are at issue in this appeal.
12. The patent owner's remedies under the NOC Regulations are in addition to all of the usual remedies for patent infringement under the Patent Act.
[49] One year later, the Supreme Court again addressed the NOC Regulations in AstraZeneca. At paragraph 15 of its Reasons the Court reiterated what it said in Biolyse, the Regulations are directed at preventing infringement by those who choose to take advantage of the “early working” provisions of section 55.2(4)d) of the Patent Act:
15. Recognizing that the "early working" and "stockpiling" exceptions could be abused, Parliament balanced creation of these exceptions with implementation of a summary procedure designed to strengthen the protection of patent owners against generic competitors within the 20-year patent period. The legislative solution is found in s. 55.2 of the Patent Act as follows:
55.2 (1) It is not an infringement of a patent for any person to make, construct, use or sell the patented invention solely for uses reasonably related to the development and submission of information required under any law of Canada, a province or a country other than Canada that regulates the manufacture, construction, use or sale of any product. [The "early working" exception.]
(2) It is not an infringement of a patent for any person who makes, constructs, uses or sells a patented invention in accordance with subsection (1) to make, construct or use the invention, during the applicable period provided for by the regulations, for the manufacture and storage of articles intended for sale after the date on which the term of the patent expires. [The "stockpiling" exception.]
(3) The Governor in Council may make regulations for the purposes of subsection (2), but any period provided for by the regulations must terminate immediately preceding the date on which the term of the patent expires.
(4) The Governor in Council may make such regulations as the Governor in Council considers necessary for preventing the infringement of a patent by any person who makes, constructs, uses or sells a patented invention in accordance with subsection (1) or (2) including, without limiting the generality of the foregoing, regulations
(a) respecting the conditions that must be fulfilled before a notice [e.g. of compliance] ... may be issued ...
(b) respecting the earliest date on which a notice [e.g. of compliance] ... may take effect ...
(c) governing the resolution of disputes between a patentee or former patentee and any person who applies for a notice [e.g. of compliance] ... as to the date on which that notice ... may be issued or take effect.
The grant of the regulation-making power in s. 55.2(4) is thus expressly limited to prevention of infringement by a person who takes advantage of the "early working" exception (s. 55.2(1)) or (until its repeal) the stockpiling exception (s. 55.2(2)).
[50] The Court set out the issue presented by the generic (Apotex) at paragraph 18. If the generic was not in the position to “early work” a patent, how could it be subject to the Regulations at all:
18. If, as Apotex says, it did not have the advantage of an "early working" of the after-listed 037 and 470 patents, because they came too late and were not incorporated in any product available to Apotex to copy, it is difficult to see in principle why in respect of those patents Apotex should be subject to the NOC Regulations regime, with a consequent further delay of two years, and perhaps longer. The Apotex submission has already been pending since April 27, 1993.
[51] The Court reviewed the provisions of section 4(5) of the NOC Regulations which permit a later issued patent to be based against a specific NOC. The linkage between the patent and a specific NOC was emphasized at paragraph 21:
21. I emphasize the words in s. 4(5) that in the case of patents added afterwards, "the first person must identify the submission to which the patent list or the amendment relates, including the date on which the submission was filed". In addition, s. 3(3) provides that "[n]o information submitted pursuant to section 4 shall be included on the register until after the issuance of the notice of compliance in respect of which the information was submitted". These provisions, it seems to me, provide an important key to understanding the scheme. Entry of the "Patent list" does not destroy the linkage between the patent and the submission(s) to which it relates, nor to the NOC to which the submission(s) are directed. Specific patents are associated with one or more NDS, ANDS or SNDS, which in turn (if approved) give rise to specific NOCs, which in turn approve a specific manufacturer's product, which a generic manufacturer may seek to copy. There is no linkage between the 037 and 470 patents and the submissions that lead to the Losec 20 product copied by Apotex. Those aft