Astrazeneca Canada Inc. v. Apotex Inc.

Astrazeneca Canada Inc. v. Apotex Inc.
Court (s) Database
Federal Court Decisions
Date
2011-05-24
Neutral citation
2011 FC 505
Decision Content
Federal Court
Cour fédérale
Date: 20110524
(Amended on May 30, 2011)
Docket: T-1668-10
Citation: 2011 FC 505
BETWEEN:
ASTRAZENECA CANADA INC. AND ASTRAZENECA AKTIEBOLAG
Plaintiffs
(Defendants by Counterclaim)
and
APOTEX INC.
Defendant
(Plaintiff by Counterclaim)
PUBLIC FURTHER AMENDED REASONS FOR ORDER
(Confidential Reasons for Order issued April 29, 2011)
CRAMPTON, J.
[1] This motion was brought by the Plaintiffs for, among other things, an interlocutory injunction to restrain the Defendant and certain associated individuals from making, constructing, importing, exporting, using, offering to sell or selling to others to be used, Apo-Esomeprazole and/or esomeprazole magnesium pending the trial of this action, which is scheduled to begin in September, 2013.
[2] For the reasons that follow, I find that the Plaintiffs have not demonstrated, on a balance of probabilities, that they are likely to suffer irreparable harm if an interlocutory injunction is not issued. I also find that the Plaintiffs have not demonstrated that the balance of convenience lies in their favour. Accordingly, this motion will be dismissed.
I. Background
A. The Parties and the product at issue
[3] The within action concerns five patents that are owned by the Plaintiffs, AstraZeneca Aktiebolag (“AstraZeneca”) and AstraZeneca Canada Inc. (“AstraZeneca
Canada
”). Those patents contain claims that cover certain forms of the drug “esomeprazole”, which is sold by the Plaintiffs under the brand name NEXIUM, as well as certain processes used to produce that drug.
[4] Specifically, Canadian Patent No. 2, 139, 653 (the ‘653 Patent), which was issued to AstraZeneca on July 10, 2001 and expires on May 27, 2014, contains claims that cover optically pure esomeprazole magnesium.
[5] Canadian Patent No. 2, 290, 963 (the ‘963 Patent), which was issued to AstraZeneca on March 28, 2006 and expires on May 25, 2018, contains claims that cover esomeprazole magnesium trihydrate.
[6] Canadian Patent No.2, 193, 994 (the ‘994 Patent), which was issued to AstraZeneca on May 3, 2005 and expires on July 3, 2015, contains claims directed to the process of making optically pure esomeprazole.
[7] Canadian Patent No. 2, 226, 184 (the ‘184 Patent), which was issued to AstraZeneca on August 5, 2008 and expires on June 26, 2016, contains claims related to a certain process used to make esomeprazole.
[8] Canadian Patent No. 2, 274, 076 (the ‘076 Patent), which was issued to AstraZeneca on September 30, 2008 and expires on December 16, 2017, also contains claims related to a process used to make esomeprazole.
[9] AstraZeneca and its affiliates (sometimes collectively referred to in these Reasons as “AstraZeneca”) develop and commercialize prescription medicines around the world. Through its subsidiary, AstraZeneca Canada Inc., it is the second largest innovative pharmaceutical company in
Canada
in terms of dollar sales. As of March 1, 2011, AstraZeneca employed about 987 people across
Canada
.
[10] AstraZeneca
Canada
has sold NEXIUM brand tablets containing esomeprazole magnesium trihydrate, in 20 milligram and 40 milligram strengths, since 2001. It purchases those tablets from AstraZeneca.
[11] Esomeprazole belongs to the class of medications known as “proton-pump inhibitors” (“PPIs”), which are used to treat gastric-acid related conditions. The Canadian PPI market is continuing to grow significantly from its current size of approximately 23 million prescriptions. That market also is highly competitive, with approximately seven alternative PPI drugs available, including a new entrant which entered the market in September 2010.
[12] Since its launch in September 2001, annual dollar sales of NEXIUM have risen from approximately $6 million in 2001 to over $281 million in 2010. According to AstraZeneca, NEXIUM was the best-selling PPI in
Canada in 2010 and ranked among the top 5 prescription products in
Canada
by sales.In addition, NEXIUM is the number one “switched to PPI,” is recommended by 61% of physicians, is the highest ranking PPI in unaided awareness by patients, is the most self-reported prescribed PPI, and is the number one PPI doctors would select for themselves.
[13] There is currently no generic version of NEXIUM available in
Canada
.
[14] The Defendant, Apotex Inc., is a privately-owned
Ontario
company that carries on business as a manufacturer and distributor of a broad range of “generic” pharmaceutical products. Together with its affiliates (collectively, “Apotex”), it has over 5,000 employees in
Canada
.
B. Steps taken by Apotex to launch a generic version of esomeprazole
[15] The within action was launched by the Plaintiffs on October 15, 2010, following seven proceedings that the initiated in late 2007 under the Patented Medicines (Notice of Compliance) Regulations, SOR/93-133, as amended by SOR/98-166 (the “PMNOC Regulations”), to prohibit the issuance of a Notice of Compliance (“NOC”) to Apotex for its proposed esomeprazole magnesium tablets. Those proceedings were initiated after Apotex filed seven Notices of Allegation (“NOAs”) under the PMNOC Regulations earlier that year.
[16] In addition, on June 8, 2007, Apotex filed a patent application in
Canada
entitled “Process for the Preparation of Esomeprazole and Salts Thereof.” That application refers to a United States Patent that AstraZeneca alleges corresponds to the ‘994 patent.
[17] After Apotex withdrew a number of its NOAs, AstraZeneca pursued only two of the aforementioned NOC proceedings.
[18] The first of those proceedings (Court File No. T-372-08) involved the ‘963 Patent. That proceeding was dismissed on consent on May 25, 2010, after AstraZeneca advised the Court that it was no longer asserting that Apotex’s allegation of non-infringement of the ‘963 Patent was not justified, as contemplated by subsection 6(2) of the PMNOC Regulations, and after Apotex agreed that the Court need not make any determinations in respect of its allegations of invalidity of the ‘963 Patent.
[19] The second NOC proceeding (Court File No. T-371-08) was dismissed by Justice Hughes on June 16, 2010, on the basis that Apotex’s allegation of invalidity of the ‘653 Patent was justified, within the meaning of section 6(2).
[20] The following day, June 17, 2010, Apotex received an NOC for its esomeprazole magnesium tablets. As of that date, Apotex was legally entitled to begin selling its generic esomeprazole tablets (“Apo-Esomeprazole”) in
Canada
.
[21] On July 13, 2010, at AstraZeneca’s request, Apotex provided an “on the record” confirmation of its intention to launch its Apo-Esomeprazole product. Then, on July 26, 2010, Apotex again confirmed to AstraZeneca that it was proceeding with the production of launch quantities of Apo-Esomeprazole.
[22] On February 1, 2011, Apo-Esomeprazole was listed as esomeprazole magnesium trihydrate by the drug formulary in
Quebec , where sales of NEXIUM are particularly strong, accounting for approximately 42% of AstraZeneca
Canada
’s total Canadian NEXIUM sales. In addition, on November 25, 2010, Nova Scotia Pharmacare listed Apo-Esomeprazole as a non-insured interchangeable benefit. On February 9, 2011, the New Brunswick Drug Plan also posted a non-benefit interchangeable listing for Apo-Esomeprazole.
[23] On March 7, 2011, Apotex launched Apo-Esomeprazole and announced that it had commercial inventories of that product available in
Quebec ,
New Brunswick and
Nova Scotia
, where it is listed at 89% of the price of NEXIUM.
II. Preliminary Motions
A. AstraZeneca’s motion to strike
[24] On April 1, 2011 Apotex filed an affidavit sworn by Dr. Stephen Horne, the Vice President, Research and Development, at Apotex Pharmachem Inc. (“API”). According to Dr. Horne’s affidavit (the “Horne Affidavit”), API currently makes esomeprazole magnesium for supply to Apotex Inc., using a process developed in-house (the “API Process”).
[25] On April 13, 2011, AstraZeneca filed a motion for an Order to strike the Horne Affidavit in its entirety, or, in the alternative, to strike out paragraphs 17 to 29 of that affidavit.The grounds for that motion were stated to be that the Horne Affidavit: (i) contains evidence which is procedurally prejudicial to AstraZeneca and/or is clearly irrelevant; and, in the alternative, (ii) does not meet the criteria for evidence adduced by an expert witness, as set forth in Rule 52.2 of the Federal Courts Rules, SOR/98-106 (the “Rules”). AstraZeneca’s Notice of Motion also relied upon Rule 3, which provides that the Rules “shall be interpreted and applied so as to secure the just, most expeditious and least expensive determination of every proceeding on its merits.”
[26] In its written submissions, AstraZeneca stated that it would suffer prejudice if the Horne Affidavit were not completely or partially struck from the Court Record, because AstraZeneca did not have an opportunity to contemplate and respond to the information in that affidavit before the evidence on this motion was due. In addition, it stated that the information in the Horne Affidavit was clearly irrelevant because it could not assist the Court to properly construe the claims of the patent, as that is the subject matter for expert opinion. It also submitted that, to the extent that paragraphs 17 to 29 are alleged to be expert opinion, they should be struck for failing to comply with the Code of Conduct for Expert Witnesses, including the requirements that an expert witness: (i) be impartial, independent and objective; and (ii) sign the statutory declaration contemplated by the Code.
[27] I disagree with AstraZeneca’s submissions.
[28] With respect to the issue of prejudice, AstraZeneca’s Motion for an interlocutory injunction was brought without prior notice on March 11, 2011. The schedule that was subsequently established on consent for the hearing of that Motion required Apotex’s evidence to be served by April 1, 2011, the same date upon which the Horne Affidavit was filed. Cross-examinations did not need to be concluded until April 8, 2011, and AstraZeneca had the right to file, on or before April 12, 2011, a Supplemental Motion Record and a Supplemental Memorandum of Fact and Law to address Apotex’s evidence and matters which may have arisen on cross-examination.
[29] However, on April 4, 2011, AstraZeneca advised Apotex of its decision not to cross-examine Dr. Horne on his affidavit. It then advised the Court, in a teleconference call on April 15, 2011, that it would not require a postponement of the hearing on its Motion for an interlocutory injunction, to permit it to have additional time to: (i) conduct cross-examinations on either the Horne Affidavit or the supplementary affidavit of Andrew Harrington, discussed below; or (ii) file any additional materials in respect of the Horne Affidavit. In contrast to Apotex, which sought leave to file a supplementary affidavit from one of its experts after receiving new information from AstraZeneca, AstraZeneca sought no such leave to file any response whatsoever to the Horne Affidavit.
[30] Given the foregoing, I am satisfied that it would not be appropriate to grant the Motion to strike on the ground of any prejudice that otherwise might result to AstraZeneca. This is not the type of exceptional situation contemplated by the jurisprudence applicable to motions to strike (see, for example, Belgravia Investments Ltd. v.
Canada
, [2000] F.C.J. No. 1246 (QL), at para. 10; Temple Marble & Granite Ltd. v. “
Mecklenburg I” (The), 2002 FCT 1190, at para. 2; and GlaxoSmithKline Inc. v. Apotex Inc., 2003 FC 920, at para. 4). It could not have been a surprise to AstraZeneca that Apotex would adduce evidence regarding the API Process.
[31] As a practical matter, for the reasons explained below, no prejudice will flow to AstraZeneca because the Horne Affidavit has been adduced in support of Apotex’s submission that there is no serious issue to be tried, and I have determined in Part III.C of these Reasons below that there is such a serious issue to be tried.
[32] I am also unable to accept AstraZeneca’s claims that the information in the Horne Affidavit is irrelevant and of no assistance to the Court. To the contrary, I found that information to be quite relevant and helpful in better understanding Apotex’s position on the issue of whether there is a serious issue to be tried in the within action.
[33] This brings me to the assertion that the Horne Affidavit contains impermissible expert evidence. This assertion is largely based on Dr. Horne’s statements, at paragraph 4 of his affidavit, that he was asked to address whether: (i) the API Process uses the same process as claimed in the ‘994 Patent; (ii) neutral esomeprazole in a solid, crystalline form, as claimed in the ‘076 Patent, is used or produced in API’s Process; and (iii) the optical purity of esomeprazole is increased at any stage during API’s process by selectively removing racemic omeprazole, as claimed in the ‘184 Patent. AstraZeneca attempted to support its position on this issue by noting that the Horne Affidavit states that Dr. Horne is “able to describe API’s Processes and to respond to [the above-listed] questions because of [his] education and industrial experience as a medicinal and process chemist … and by reason of [his] role at API and [his] involvement in the research and development of API’s Process.”
[34] I am satisfied that: (i) the Horne Affidavit does not attempt to provide an expert construction of any of the claims in the patents mentioned in the immediately preceding paragraph above; and (ii) Dr. Horne was not being put forth as an expert. In my view, Dr. Horne simply provided factual information in his affidavit, primarily based on his knowledge of API’s processes. To provide that factual information, he necessarily had to describe his understanding of the patents in question (R. v. Graat, [1982] S.C.J. No. 102 (QL), at para. 305, [1982] 2 S.C.R. 819, 144 D.L.R. (3d) 267; D. M. Paciocco and L. Stuesser, The Law of Evidence (5th ed. 2008), at pp. 26-31; and Alan W. Bryant, Sydney N. Lederman and Michelle K. Fuerst, Sopinka, Lederman & Bryant: The Law of Evidence in Canada, 3rd edition (Toronto: LexisNexis Canada Inc., 2009, at 774-777). In describing his understanding of those patents, he simply and very briefly: (i) quoted the plain language in those patents; and (ii) stated his understanding of what each of those patents claimed. He spent a total of four sentences describing his understanding of the ‘994 Patent, five sentences describing his understanding of the ‘076 Patent, and seven short sentences describing his understanding of the ‘184 Patent. By contrast, he spent nine full paragraphs describing API’s Process, which was the clear focus of his affidavit.
[35] As the Vice President of Research and Development at API, Dr. Horne was as well placed as anyone to provide the factual information regarding the API Process that was set forth in his affidavit. The fact that he happened to be an organic chemist by education and to have more than 18 years of experience as a medicinal and process chemist in the pharmaceutical industry did not: (i) disqualify him from being a fact witness; (ii) transform his fact evidence into expert evidence; or (iii) require him to adduce his evidence pursuant to Rule 52.2 of the Rules.
[36] Accordingly, for the reasons set forth above, I dismissed AstraZeneca’s Motion to strike the Horne Affidavit at the end of the hearing of that Motion.
B. Apotex’s Motion to file a supplementary affidavit
[37] On April 15, 2011, Apotex filed a Notice of Motion to seek an Order granting leave to deliver a supplemental affidavit of Mr. Andrew Harrington. Mr. Harrington was one of three experts who swore an affidavit in support of Apotex’s response to AstraZeneca’s Motion for an interlocutory injunction.
[38] Mr. Harrington is a chartered accountant, a chartered financial analyst and a chartered business valuator. He is currently a Managing Director in the
Toronto
office of Duff & Phelps Canada Limited (“D&P”) and is a member of that firm’s Dispute and Legal Management Consulting Practice. D&P is the successor firm to Cole Valuation Partners Limited. According to his initial affidavit, Mr. Harrington has more than ten years of experience in business and intellectual property valuation and has served as an expert witness in the quantification of damages relating to intellectual property and various commercial litigation matters.
[39] The principal focus of Mr. Harrington’s initial affidavit was upon claims made in an affidavit sworn on March 11, 2011 by AstraZeneca
Canada
’s President and Chief Executive Officer, Marion McCourt. Ms. McCourt was cross-examined on that affidavit on April 5, 2011. During that cross-examination, she was asked about the business transformation plan that is discussed in her affidavit. Ms. McCourt revealed that a written presentation describing that plan had been prepared and she undertook to provide a copy of that document (the “Transformation Plan”) to Apotex. That document ultimately was produced to Apotex on April 10, 2011, after the completion of cross-examinations on all of the affidavits on the Plaintiffs’ Motion for an interlocutory injunction. However, it was not until April 12, 2011 that AstraZeneca agreed, after a case conference with my colleague Justice Campbell, to permit Apotex to share a copy of the document with its experts. Two days later, on April 14, 2011, Mr. Harrington swore the supplemental affidavit that was the subject of Apotex’s Motion to file.
[40] In his supplemental affidavit, Mr. Harrington stated, among other things, the following:
The Transformation Plan also provides previously unavailable information that allows me to calculate the level of profits generated on sales by AstraZeneca
Canada
even if it loses its Nexium exclusivity. With this new information, I am able to determine that, even without Nexium exclusivity, the profits generated on sales by AstraZeneca
Canada
will be almost $[*] billion in the period 2011 to 2014.
[41] The reason that the Transformation Plan enabled Mr. Harrington to calculate AstraZeneca
Canada ’s profits was that it provided previously unavailable information with respect to AstraZeneca
Canada
’s costs. With that information, Mr. Harrington was able to provide more robust estimates for AstraZeneca
Canada
’s revenues between 2011 and 2014, and to also provide estimates of AstraZeneca’s profits for those years, which he was unable to do on the basis of previously available information.
[42] Based upon the information contained in the Transformation Plan, Mr. Harrington estimated that AstraZeneca Canada’s revenues in the period 2011 to 2014 will be approximately $[*] billion, and that, even if AstraZeneca were to lose 80% of its NEXIUM sales over the period May 1, 2011 to May 27, 2014, its total revenues would be approximately $[*] billion.
[43] He further estimated that the contribution margin from AstraZeneca
Canada
’s total sales over that period, assuming a loss of 80% of its NEXIUM sales, would be approximately $[*] billion. After drawing on other information contained in the Transformation Plan to estimate AstraZeneca Canada’s fixed costs for that same period to be approximately $[*] million, he then estimated that AstraZeneca Canada’s profits for that period would be approximately $[*] billion. Once again, that estimate was based on the assumption, which Mr. Harrington described as being conservative, that AstraZeneca Canada would permanently lose 80% of its sales of NEXIUM on May 1, 2011. As Mr. Harrington noted, his estimates of AstraZeneca
Canada
’s revenues and profits would obviously be greater if it is able to hold onto more than 20% of the sales of NEXIUM.
[44] AstraZeneca opposed Apotex’s Motion for leave to file Mr. Harrington’s supplemental affidavit on five grounds.
[45] First, it claimed that the evidence provided in the affidavit was outside the area of Mr. Harrington’s expertise. I disagree. A review of Mr. Harrington’s curriculum vitae demonstrates that he “specializes in the quantification of loss and accounting of profits in intellectual property dispute matters and damages in commercial litigation matters,” and that he “has been involved in over 500 valuation, damage quantification, consulting and other advisory engagements in numerous industries.”
[46] Second, AstraZeneca claimed that Apotex did not previously consider information pertaining to AstraZeneca
Canada
’s profits to be sufficiently important to request such information prior to, or during, the cross-examination of Ms. McCourt. Accordingly, AstraZeneca asserted that Apotex ought not to be permitted to split its case with evidence based on information that it already had or did not need.
[47] In my view, neither of these objections provides a basis for preventing Apotex from responding to information that previously had not been disclosed. On the particular facts of this case, it would make little sense to permit Apotex to request a document that it learned about during cross-examination, only to then prevent it from responding to relevant new information contained within that document. That information was relevant because it enabled Apotex to better respond to some of the claims made by Ms. McCourt, Dr. Gulati and Dr. Biloski, regarding irreparable harm that the Plaintiffs claim they will suffer if the interlocutory injunction that they have requested is not granted.
[48] Third, AstraZeneca submitted that the information in the supplemental affidavit was unnecessary, redundant or marginally relevant, and of no assistance to the Court. For the reason explained immediately above, I do not accept this submission. On the contrary, I found the information contained in Mr. Harrington’s supplementary affidavit to be very relevant and material to my determination of AstraZeneca’s motion for an interlocutory injunction.
[49] Fourth, AstraZeneca submitted that the information contained in the supplementary affidavit will cause material prejudice to AstraZeneca
Canada
.
[50] I agree that AstraZeneca would be prejudiced if leave were granted to Apotex to file the supplementary affidavit. However, that prejudice will be suffered primarily because the evidence in that affidavit, which is based on previously unavailable information contained in the Transformation Plan, undermines claims made by Ms. McCourt, Dr. Gulati and Dr. Biloski. Among other things, those claims include assertions that “the introduction of generic esomeprazole magnesium in
Canada … will have an immediate, catastrophic and irreversible impact on AstraZeneca
Canada ” and will “imperil the [current] transformation [of AstraZeneca
Canada
and its] future performance”. This context in which the Plaintiffs will suffer prejudice weighs against them in the consideration of their fifth submission, to which I will now turn.
[51] Finally AstraZeneca submitted that it would not be in the interests of justice to permit Apotex to file Mr. Harrington’s supplementary affidavit.
[52] Given my assessment of the first four submissions made by the Plaintiffs, I conclude that it would not be in the interests of justice to refuse Apotex leave to file Mr. Harrington’s supplementary affidavit, particularly given that: (i) Mr. Harrington was made available to be cross-examined on that affidavit; and (ii) Apotex was unable to cross-examine Ms. McCourt on the Transformation Plan document after its production, because she was allegedly out of the country or otherwise unavailable during the short period of time between the time when Apotex obtained the Transformation Plan and the date of the hearing on AstraZeneca’s Motion for an interlocutory injunction. AstraZeneca refused to avail itself of the opportunity to cross-examine Mr. Harrington on his supplementary affidavit and must now face the consequences.
[53] AstraZeneca submitted in the alternative that certain paragraphs in Mr. Harrington’s supplementary affidavit be struck. However, during the hearing of this preliminary motion, and after I agreed to strike the last sentence in paragraph 5 of that affidavit, counsel to AstraZeneca abandoned this submission.
III. Analysis
The general legal principles applicable to this Motion
[54] An applicant for an interlocutory injunction must satisfy the following well-known tri-partite test:
There is a serious issue to be tried;
The applicant is likely to suffer irreparable harm if the injunction is not granted; and
The balance of convenience favours the granting of the injunction (RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311 at 334 and 342, 111 D.L.R (4th) 385 [RJR-MacDonald]).
[55] As to the first prong of the test, an applicant’s burden is fairly low. The Court simply has to be satisfied that the applicant has raised at least one issue that is serious, in the sense of being “neither vexatious, nor frivolous” (RJR-MacDonald, above, at 335 and 337) nor “destined to fail” (Laperrière v. D.&A. MacLeod Company Ltd., 2010 FCA 84, 66 C.B.R. (5th) 96, at para. 11).
[56] The second prong of the test, concerning irreparable harm “refers to the nature of the harm suffered rather than its magnitude. It is harm which either cannot be quantified in monetary terms or which cannot be cured, usually because one party cannot collect damages from the other” (RJR-MacDonald, above, at 341). At this stage of the analysis, the harm in question is harm that will be suffered by the applicant. Any harm that will be suffered by the respondent is considered in assessing the balance of convenience (RJR-MacDonald, above, at 341). In addition, the harm claimed by the parties must be demonstrated to be clear and not speculative (Bayer HealthCare AG v. Sandoz Canada Inc., 2007 FC 352, [2007] F.C.J. No. 585 (QL) [Bayer Healthcare], at para. 35; Aventis Pharma S.A. v. Novopharm Ltd., 2005 FC 815, 40 C.P.R. (4th) 210 [Aventis Pharma], at para. 59; Abbott Laboratories Ltd. v. Apotex Inc., [1998] O.J. No. 2159 (QL) (Ont. Gen. Div.) [Abbott Laboratories], at para. 18).
[57] The third prong of the test is “which of the two parties will suffer the greater harm from the granting or refusal of … [the] injunction” (RJR-MacDonald, above, at 342).In addition, other factors may be taken into consideration in determining where the balance lies (RJR-MacDonald, above, at 342). In this regard, “either the applicant or the respondent may tip the scales of convenience in its favour by demonstrating to the court a compelling public interest in the granting or refusal of the relief sought” (RJR-MacDonald, above, at 344 and 348).
General observations
[58] In the case at bar, each of the parties made certain sweeping statements that I feel compelled to address, in the interest of discouraging similar statements and certain related hyperbole in the future.
[59] With respect to the first prong of the test, the serious issue to be tried, Apotex asserted that because this Court determined Apotex’s allegations of invalidity with respect to the ‘653 Patent to be justified in the NOC proceedings last year, “there is no reasonable basis to continue to presume that the patent is valid”. This position ignores the settled law that: (i) determinations in NOC proceedings “do not operate as res judicata” in a subsequent action in which infringement of the same patent that was the subject of the NOC proceedings is alleged; and (ii) “NOC proceedings are quite different from subsequent infringement or impeachment actions” (Apotex v. Pfizer Ireland Pharmaceuticals, 2011 FCA 77, at paras. 23-24; AstraZeneca Canada Inc. v. Canada (Minister of Health), 2006 SCC 49, at para. 42, 52 C.P.R. (4th) 145; Novartis A.G. v. Apotex Inc., 2002 FCA 440, at para. 9; Janssen-Ortho Inc. v. Novopharm Ltd., 2006 FC 1234, at para. 116). In short, the presumption of the validity of a patent that is established by virtue of subsection 43(2) of the Patent Act, R.S.C. 1985, c. P-4 [the Patent Act] remains, notwithstanding any findings that may have been made in respect of the patent in proceedings under the NOC Regulations.
[60] With respect to the second prong of the tri-partite test, irreparable harm, Apotex suggested that AstraZeneca would not suffer irreparable harm because, “even if no interlocutory injunction is granted, and even if Apotex takes even more of the market for esomeprazole than is estimated by Astra’s CEO, Astra will still enjoy almost $[*] billion of profits between now and the end of 2014.” To the extent that this statement may be interpreted as advancing the position that an applicant who is making profits, even significant profits, cannot ever be found to suffer irreparable harm, it must be rejected. As counsel to Apotex appropriately conceded during oral argument, the law does not require applicants for interlocutory relief to establish that they are likely to become unprofitable if the injunction they seek is not granted.
[61] Apotex also submitted that “[t]he relief sought by Astra is unprecedented and, if granted, would signal a fundamental change to the regime within which the generic pharmaceutical industry operates.” In this regard, it observed “[t]his Court has never granted an interlocutory injunction to restrain a party from selling its product after that party has already suffered under a statutory injunction imposed by the [PMNOC] Regulations.” AstraZeneca did not dispute this observation.
[62] To the extent that this submission stands for the proposition that the balance of convenience generally should be found to lie in favour of a respondent generic drug manufacturer in circumstances where it has been prevented from launching its product, for up to 24 months, as a result of a prohibition order preventing the Minister of Health from issuing an NOC to a generic, as contemplated by the PMNOC Regulations, it must be rejected.
[63] The same is true of Apotex’s suggestion that the granting of an interlocutory injunction in cases such as the case at bar would somehow be inconsistent with the underlying spirit of the PMNOC Regulations, because such an injunction would prove devastating to “the very business model within which Apotex operates.” In cross-examination on his affidavit dated April 1, 2011, Apotex’s Chief Executive Officer, Mr. Bernard Sherman, extended this claim by stating, at p. 42 of the Transcript, that if an interlocutory injunction were granted to AstraZeneca in the case at bar, “it would destroy the business model for us in the whole generic industry and render useless the regulations, the whole regulatory regime.” In oral argument, counsel to Apotex appropriately acknowledged that the fact that a generic drug manufacturer has acted in accordance with the PMNOC Regulations does not preclude the possibility that a patentee who may have been unsuccessful in proceedings under those Regulations may obtain an interlocutory injunction, if it can satisfy the applicable tri-partite test.
[64] It is settled law that the balance of convenience must be assessed on a case by case basis (RJR-MacDonald, above, at 342-343; American Cyanamid Co. v. Ethicon Ltd., [1975] 1 All E.R. 504 (H.L.); Canadian Javelin Ltd. v. Sparling (1978), 4 B.L.R. 153, 59 C.P.R. (2d) 146 (F.C.T.D.); affirmed on other grounds (1978), 22 N.R. 465 (F.C.A.)). In this regard, the weight that may be attributed to any particular consideration also must be assessed on a case by case basis. (RJR-MacDonald, above). In case at bar, it is not necessary to devote time to discussing this consideration, as I have found, for the reasons discussed in Part III.E of these Reasons below, that AstraZeneca has not otherwise demonstrated that the balance of convenience lies in its favour. The issue as to whether it would be inconsistent with the underlying spirit of the PMNOC Regulations to enjoin a generic drug manufacturer from launching its product after that manufacturer has already been delayed from launching its products by a statutory injunction under those regulations is best left for another day, when the issue has been more fully argued. The same is true of the issue of how any such inconsistency that may be found to exist may factor into the balance of convenience of analysis.
[65] Finally, in oral argument, AstraZeneca suggested that my assessment of the balance of convenience should also take into account the public interest in patent rights and the promotion of innovation and drug discovery. I agree that this may well be a legitimate consideration to be considered in assessing the overall balance of convenience in appropriate cases. However, it is difficult for the Court to accord material weight to this consideration in the absence of evidentiary support. Where such support is not forthcoming, it cannot be expected that this consideration will be a determinative factor in the assessment of the balance of convenience. Therefore, counsel would be well advised to provide evidentiary support for this type of submission in future cases.
[66] This is particularly so where, as in the case at bar, there is uncontested evidence of a likely and substantial adverse impact on the public interest, in the form of delaying a significant reduction in drug prices, if the requested injunction is granted.
C. Serious issue to be tried
[67] Based on the record before me, I am satisfied that there is a serious issue to be tried.
[68] In the within action, AstraZeneca has alleged infringement of claims in five patents, namely, the ‘653 Patent, the ‘963 Patent, the ‘184 Patent, the ‘076 Patent and the ‘994 Patent. Until such time as the presumption of validity set forth in subsection 43(2) of the Patent Act, above, is displaced by “evidence to the contrary,” that presumption stands.
[69] Apotex attempted to make much of the fact that the ‘653 Patent and the ‘963 Patent were the subject of prior NOC proceedings that were resolved in its favour. However, as discussed at paragraph 18 above, the proceeding resolving the latter patent was resolved on consent, after AstraZeneca advised that it was no longer asserting that the allegation of non-infringement of the ‘963 Patent was not justified in that application. It is noteworthy that AstraZeneca and Apotex agreed, as part of their resolution in that proceeding, that “the Court need not make any determination on the invalidity allegations” that had been made by Apotex in that proceeding.
[70] With respect to the NOC proceedings concerning the ‘653 Patent, Justice Hughes dismissed AstraZeneca’s application for an order prohibiting the Minister of Health from issuing an NOC to Apotex for esomeprazole magnesium tablets, after he reviewed an extensive evidentiary record, totalling more than 9,000 pages of evidence and argument, much of which was not placed before the Court on this Motion. By the time that proceeding was heard by Justice Hughes, the “overriding issue [was] whether the allegations made by Apotex in its Notice of Allegation that Claim 8 of the ‘653 patent is invalid, are justified within the meaning of section 6(2) of the NOC Regulations” (AstraZeneca Canada Inc. v. Apotex Inc., 2010 FC 714 at para. 32, 88 C.P.R. (4th) 28 [AstraZeneca 2010]). Ultimately, Justice Hughes determined that Apotex’s allegation that Claim 8 of the “‘653 Patent is invalid for lack of sound prediction and to utility as for obviousness, is justified” (AstraZeneca 2010, above, at para. 138).
[71] Having regard to the foregoing, to the jurisprudence discussed at paragraph 59 above, and to the fact that three of AstraZeneca’s patents were not the subject of any NOC proceedings, I am not prepared to accord much significance to the above-mentioned NOC proceedings for the purposes of this Motion.
[72] I am satisfied that the issues that have been raised in the within action are not frivolous, vexatious or destined to fail. In my view, those issues are complex and will require a substantial evidentiary record before they can be determined by this Court, particularly having regard to the fact that Apotex conceded in its written submissions that “the esomeprazole magnesium used in Apo-Esomeprazole is made by a process that was designed to avoid” infringing AstraZeneca’s patents.
[73] I am also satisfied that Dr. Horne’s explanations as to why, in his view, the claims made in the ‘994 Patent, the ‘076 Patent and the ‘184 Patent are not infringed by API’s Process and the products produced in that process, are not sufficient to demonstrate that there is no serious issue to be tried in respect of those matters, particularly given that Apotex has not disputed in this Motion that its esomeprazole magnesium tablets are a generic form of NEXIUM, as referenced in its NOC submissions to Health Canada.
[74] As my colleague Justice Snider has observed: “It is clear from the jurisprudence that the hearing of an interlocutory injunction is not the time to finally determine the merits of a claim … Only after a much deeper consideration of all of the evidence that will come forward in the context of a trial should such a determination be made” (Laboratoires Servier v. Apotex Inc., 2006 FC 1493 [Servier], at para. 25; Turbo Resources Ltd. v. Petro Canada Inc. (1989), 24 C.P.R. (3d) 1 at 16, [1989] 2 F.C. 451 (C.A.)). Of course, prior to the fixing of the time and place for the trial in an action, a defendant such as Apotex is free to bring a motion for summary judgment pursuant to Rule 213 of the Rules. However, Apotex did not do so, perhaps because it was aware of the view that the “inherently complex, and technical” nature of patent infringement actions is a factor that would weigh against granting summary judgment (see, for example, Wenzel Downhole Tools Ltd. and William Wenzell v. National-Oilwell Canada Ltd. et al., 2010 FC 966, at para. 38).
[75] The same logic applies to the consideration of the first prong of the tri-partite test in motions for interlocutory relief in drug patent infringement actions. It is this complex and technical nature of such actions that distinguishes them from the other types of actions that were at issue in many of the authorities relied on by Apotex in support of its position that there is no serious issue to be tried in the within action.
D. Irreparable harm
[76] AstraZeneca has claimed that “[t]he early introduction of generic esomeprazole magnesium in
Canada – more than three years before the ‘653 Patent expiry [sic] and during a critical period for the business – will have an immediate, catastrophic and irreversible impact on AstraZeneca
Canada
”.
[77] To provide a sense of the importance of NEXIUM in its product portfolio, AstraZeneca adduced evidence of its forecasts that, in the absence of the entry and rapid expansion of a generic rival to NEXIUM, sales of NEXIUM will grow from approximately $281 million in 2010 to $[*] million in 2011, $[*] million in 2012, $[*] million in 2013 and $[*] million to May 2014, when the ‘653 Patent will expire. AstraZeneca did not explain why it did not provide the Court with forecasts for the balance of 2014 and for the period 2015 to 2018, when the ‘184, ‘076, ‘994, ‘963 Patents will all expire. According to Apotex, and as conceded by counsel for AstraZeneca at the hearing, if AstraZeneca prevails with all of its claims in the within action, Apotex will be subject to a permanent injunction until 2018.
[78] AstraZeneca
Canada
has also forecasted that the importance of NEXIUM in its product portfolio will increase substantially, from accounting for approximately [*]% of its total sales in 2011 to [*]% in 2012 and [*]% [over 40%] in 2013. This significant increase in the importance of NEXIUM to AstraZeneca
Canada
is in part attributable to the fact that the patent protection for its leading drug product, CRESTOR (rosuvastatin calcium), will expire in 2012. CRESTOR has apparently accounted fo