Novartis Pharmaceuticals Canada Inc. v. Apotex Inc.

Novartis Pharmaceuticals Canada Inc. v. Apotex Inc.
Court (s) Database
Federal Court Decisions
Date
2001-10-18
Neutral citation
2001 FCT 1129
File numbers
T-1266-99
Notes
Digest
Decision Content
Date: 20011018
Docket: T-1266-99
Neutral Citation: 2001 FCT 1129
BETWEEN:
NOVARTIS AG and
NOVARTIS PHARMACEUTICALS CANADA INC.
Applicants
- and -
APOTEX INC. and
THE MINISTER OF HEALTH
Respondents
REASONS FOR ORDER AND ORDER
BLAIS J.
[1] The within application is brought by the applicants, Novartis AG and Novartis Pharmaceuticals Canada Inc. (collectively "Novartis"), for an order under subsection 6(1) of the Patented Medicines (Notice of Compliance Regulations) (the "Regulations"). The order sought in the notice of application is to prohibit the respondent, the Minister of Health (the "Minister of Health"), from issuing a notice of compliance ("NOC"), under section C.08.004 of the Food and Drug Regulations, to the respondent, Apotex Inc. ("Apotex") in connection with Apotex' version of the drug cyclosporin until after the expiration of Canadian Letters Patent 1,332,150.
[2] In its memorandum of points of argument, Novartis stated that the order sought is to prohibit the Minister of Health from issuing an NOC to Apotex in connection with Apotex' abbreviated new drug submission for its generic version of Novartis' drug, Neoral® cyclosporin.
BACKGROUND
Facts
Apotex' notice of allegation
[3] Novartis is the owner of Canadian Letters Patent 1,332,150 (the " ‘150 patent").
[4] Pursuant to section 4 of the Regulations, Novartis included the patent on patent lists filed with the Minister of Health in respect of NOCs issued to it for 25 mg, 50 mg, and 100 mg oral capsules and 100 mg/ml oral liquid of its cyclosporin drug products.
[5] By a letter dated May 28, 1999, Apotex provided a notice of allegation to Novartis. In its notice of allegation, Apotex alleges that claims 1, 6-12, 15-17 and 27 of the ‘150 patent are invalid. Apotex alleged that the impugned claims of the ‘150 patent were invalid on three grounds, namely, anticipation, obviousness and over breadth.
[6] The remainder of the claims have been addressed in a distinct allegation provided by a notice of allegation dated June 10, 1999 giving rise to the proceeding in Court File No. T-1337-99. In that notice of allegation, non-infringement of the remaining claims of the ‘150 patent was alleged. Upon agreement of the parties, the latter proceeding has been stayed pursuant to Court order, its result to be guided by the result of the within proceeding.
[7] The proceeding in the case at bar, is in respect of the seventh notice of allegation that Novartis has received from Apotex, in respect of Apotex' submissions for NOCs relating to cyclosporin. It is the third time that Apotex has alleged that the ‘150 patent is invalid, relying on the same prior art document, namely Canadian Patent 1,339,667 (the "667 patent").
[8] The first time Apotex alleged invalidity of the ‘150 patent was in a notice of allegation dated March 10, 1995, wherein the only ground of invalidity raised was anticipation by the ‘667 patent.
[9] The second time Apotex alleged invalidity of the ‘150 patent was in a notice of allegation dated February 22, 1996, wherein Apotex alleged that the ‘150 patent was anticipated, obvious and over broad based on the ‘667 patent.
[10] After Novartis commenced proceedings under the Regulations, Apotex withdrew both of these earlier notices of allegation. In those two proceedings, the case had moved well beyond the initiation of the proceedings, and Apotex experts had been cross-examined on their opinions in regards to the validity of the ‘150 patent. Subsequently, this Court has now twice dismissed these similar proceedings, once before a hearing on the merits and again, on the grounds of mootness.
[11] The stated reason for withdrawal of the notices of allegation was that Apotex had abandoned the formulations that it was relying upon.
Cyclosporin
[12] The medicine cyclosporin possesses pharmacological, and in particular, immunosuppressive anti-inflammatory and/or anti-parasitic activity. It has particular clinical relevance as an immunosuppressive agent used in treating patients who have undergone organ transplant surgery to help prevent rejection of transplant. Cyclosporin is also used for the treatment of various auto-immune diseases.
[13] Cyclosporin is a large molecule and has hydrophobic characteristics. It is therefore difficult to absorb, tends to be unstable in storage and difficult to formulate due to its inherent insolubility. Due to these problems, it is difficult to formulate cyclosporin into practical dosage forms. The first clinical uses of cyclosporin were in formulations made by solubilizing cyclosporin in olive oil. However, this approach was found to be unacceptable for long term use due to the excessive quantities of olive oil that patients had to consume. Therefore, there was an increasing need to design a better dosage form.
‘667 patent and ‘307 patent
[14] In 1979, Sandoz (Novartis' previous name) filed the ‘667 patent in respect of cyclosporin formulations. The U.S. counterpart to the ‘667 patent is U.S. Patent 4,388,307 (the "‘307 patent").
[15] These patents represented an initial improvement in formulating cyclosporin over the original use of olive oil.
[16] The ‘667 patent discloses that improved cyclosporin formulations can be made using certain ingredients including particular trans-esterification products. Some of the formulations of the ‘667 and ‘307 patent that use these ingredients are indicated to be in the form of emulsions. In particular, at pages 7 and 8 of the ‘667 patent the word "emulsion" appears in an example of a drinking solution of cyclosporin. The ‘307 counterpart contains this reference as well as a couple of additional references.
[17] In addition, at column 6 of the ‘307 patent, it is indicated that some of these emulsion formulations can be self-emulsifying systems. Self-emulsifying as used in this patent simply means that when the formulation is added to water, e.g. upon ingestion into the stomach, an emulsion forms without or with only very limited additional energy being required to create the emulsion.
[18] The composition disclosed and claimed in the ‘667 and ‘307 patents is a preconcentrate comprised of cyclosporin in addition to ethanol (component (c) of claim 1 of the ‘307 patent), which is a hydrophilic phase component; vegetable oil (component (b) of claim 1 of the ‘307 patent), which is a lipophilic phase component; and a trans-esterification product of a natural vegetable oil triglyceride and a polyalkylene polyol (component (a) of claim 1 of the ‘307 patent), which is a surfactant.
[19] In the result, the ‘667 and '307 patents disclose and claim a cyclosporin composition in a three phase component system comprising a hydrophilic phase component, a lipophilic phase component and a surfactant.
Sandimmune®
[20] The cyclosporin formulations marketed under the trade-mark Sandimmune® in accordance with the ‘667 patent were the first commercial formulation of cyclosporin.
[21] This product consisted of an oral solution in the form of a regular or conventional emulsion preconcentrate. This product became commercially available in Canada in 1984. When added to ordinary beverages such as water, milk or orange juice, Sandimmune® formed an emulsion. These emulsions appear as milky liquids thus indicating that a large droplet size has been formed.
[22] Although Sandimmune® represented an important improvement in the formulation of cyclosporin, it displayed less than optimal characteristics, such as relatively poor bioavailability (absorption of the cyclosporin into the bloodstream). In addition, variability in inter- and intra-patient bioavailability was very large.
[23] It became apparent that improvements in the Sandimmune® formulation were required. One problem that arose from the low bioavailability of the Sandimmune® formulation was that careful monitoring of the patient was required. The general opinion was that unless improvements in the bioavailability were achieved, it might be necessary to turn to a different immunosuppressant drug, as the levels of cyclosporin required to achieve therapeutic efficacy were potentially toxic.
‘150 patent
[24] The ‘150 patent provides a solution to the above problems in the form of an improved formulation over Sandimmune®.
[25] Claim 1 of the ‘150 patent claims the following:
1. A pharmaceutical composition in the form of an oil-in-water microemulsion preconcentrate and comprising cyclosporin dissolved in 1) a hydrophilic phase component; 2) a lipophilic phase component; and 3) a surfactant.
[26] Claim 27 provides:
27. A pharmaceutical composition in the form of a microemulsion and comprising a composition to any of claims 1 to 26 and water.
[27] In the discussion of the prior art, the ‘150 patent refers to the formulations made in accordance with the ‘307 patent (such as Sandimmune®). While this information was an improvement, it was also recognized that the level of bioavailability (the amount of the drug that is absorbed in the blood stream) of the earlier commercial formulation, was very low, approximately 30%.
[28] More importantly, there were wide ranges in both inter- and intra-patient bioavailability (variability) with these earlier formulations.
[29] At page 8 of the ‘150 patent, it is set out that the formulation provides for an oil-in-water microemulsion preconcentrate and oil-in-water microemulsion formulation that contain cyclosporin in a sufficiently high concentration to permit convenient oral administration as well as achieving improved efficacy, in terms of bioavailability characteristics. More importantly, it is disclosed that these compositions:
[...] enable effective cyclosporin dosage with concomitant enhancement of resorption/bioavailability levels, as well as reduced variability in resorption/bioavailability levels achieved both for individual patients receiving cyclosporin therapy as well as between individuals.
[30] The manner in which these improvement were achieved is to employ an oil-in-water microemulsion preconcentrate formulation, as opposed to the previous Sandimmune® emulsion formulation.
[31] Thus, the ‘150 patent recognized that formulations of cyclosporin in the form of oil-in-water microemulsions provided not only better and more complete absorption of cyclosporin into the bloodstream but also less variability in blood levels between patients and within the same patient.
[32] Further, the ‘150 patent teaches how to make these oil-in-water microemulsion preconcentrates and microemulsions with cyclosporin. In particular, the patent teaches that one can form cyclosporin oil-in-water microemulsion preconcentrates and microemulsions by employing hydrophilic phase components, lipophilic phase components and surfactants in appropriate proportions.
[33] It is also taught that the same components in the wrong proportions will not result in an oil-in-water microemulsion. Thus, even if one had a hydrophilic component, a lipophilic component and a surfactant that could make an oil-in-water microemulsion, one would not necessarily make a microemulsion, unless the relative proportions are in the right range. The patent teaches how to determine the correct range. More importantly, the patent is the first teaching that indicates that oil-in-water microemulsions and their preconcentrates are achievable with cyclosporin. It is also the first teaching of the advantages of an oil-in-water microemulsion formulation not only to achieve improved bioavailability, but also to lower inter- and intra-patient variability for cyclosporin formulations.
Neoral
[34] Novartis has applied the teachings of the ‘150 patent in its current commercial product, Neoral®. Cyclosporin microemulsions and microemulsion preconcentrates as represented by Neoral® were an answer to the deficiencies of Sandimmune®. This new formulation forms an oil-in-water microemulsion when administered, e.g. when added to water or any other aqueous medium, e.g. juice, milk or the contents of the stomach. In 1995, Novartis introduced this new cyclosporin oil-in-water microemulsion preconcentrate formulation as Neoral® capsules and oral solution.
[35] Studies show that cyclosporin in the Neoral® formulation is, relative to the Sandimmune® formulation, absorbed more rapidly, in higher concentrations and with less intra- and inter-individual absorption variability. That is, there is less variability in the degree of absorption for the same patient over the same time, as well as less variability in the degree of absorption for different patients with Neoral® than was the case with Sandimmune®.
[36] In contrast to the milky solutions obtained on dilution of the Sandimmune® formulation, those obtained on dilution of Neoral® are clear and opalescent. The reason for this is that Neoral® is an oil-in-water microemulsion preconcentrate formulation as opposed to an oil-in-water emulsion preconcentrate formulation.
[37] During 1995 and 1996, both Sandimmune® and Neoral® cyclosporin products were on the market in Canada. One reason Novartis kept Sandimmune® on the market after the 1995 introduction of Neoral® was that generally there is a reluctance amongst doctors to take patients off a product that is working well. However, due to the superiority of the Neoral® product, nearly all patients are now prescribed with Neoral®.
[38] The benefits of the Neoral® formulation were so great, that Neoral® soon overtook Sandimmune® in terms of sales. In 1996, as a result of the virtually complete replacement of Sandimmune® by Neoral®, Novartis ceased to actively market Sandimmune®. While the Sandimmune® product is still available under the Special Access Program for a few patients who could not switch to Neoral®, nearly all patients treated with cyclosporin are now prescribed with Neoral®. Today, Neoral® is the only cyclosporin product which is listed in the Compendium Pharmaceutical Specialities ("CPS").
Emulsion and Microemulsion
[39] The major point of difference between Apotex and Novartis concerns the correct definition of a microemulsion.
[40] The ‘150 patent provides for improved pharmaceutical formulations of the drug cyclosporin. The key to these novel formulations is that they are in the form of oil-in-water (commonly abbreviated as "o/w") microemulsion preconcentrates. These formulations provide o/w microemulsions upon the addition of water. These formulations result in improved cyclosporin bioavailability and reduced inter- and intra-patient variability of bioavailability.
[41] An emulsion is a mixture of two substances or phases, one phase "suspended" in the other phase. Microemulsions are similar to emulsions and share a number of characteristics. Both are mixtures consisting of two immiscible phases, namely a continuous phase as well as small droplets suspended in the continuous phase. The droplets are also called the discontinuous phase. Emulsions and microemulsions generally are of two basic types: "oil-in-water" or "water-in-oil" emulsion or microemulsion.
[42] The use of the terms "oil" and "water" do not indicate emulsions or microemulsions and are limited to simply oil and water. Other terms used to describe the "oil" phase are "lipophilic", i.e. fat-loving or "hydrophobic", i.e. water-hating. Another term used to describe the "water" phase is hydrophilic, i.e. water-loving.
[43] In an o/w emulsion, droplets of an oil or lipophilic phase are suspended within the continuous water or aqueous phase. An example of an o/w emulsion is oil and vinegar salad dressing. Without shaking, the oil and the vinegar form two layers. Upon shaking, the two phases mix and the dressing becomes milky. The milky appearance arises from the formation of an o/w emulsion, namely large droplets of the oil being suspended in the vinegar. Such an emulsion, however, is not stable as the emulsion quickly settles back to the two original layers.
[44] Regular emulsions typically require energy to be added, such as mixing, to form the emulsion, though with the inclusion of surfactants, they can be self-emulsifying, as in the case of Novartis' Sandimmune® product. Emulsions appear opaque due to the relatively large droplet sizes. The droplet size of an emulsion is typically in the order of 4000 Å or more, but can range up to 10,000 Å or even larger. When the oil-in-water emulsion forms, the lipophilic component is distributed throughout the continuous aqueous phase.
[45] Emulsions (and emulsion preconcentrates) have been employed by formulators for many decades as an appropriate dosage form for lipid soluble drugs (such as cyclosporin). The liquid emulsion preconcentrate is placed in a soft gelatin capsule to be ingested by the patient. Once in the gastrointestinal tract of the patient, the soft gelatin capsule dissolves, releasing the liquid preconcentrate which then forms an emulsion with the fluid contained in the gastrointestinal tract.
[46] Formulators have long been aware that the release of the drug from the emulsion system is a function of the composition of the preconcentrate, since the drug must "partition" from the oil to the water and of the particle size of the oil droplets, since this will dictate the efficiency with which the drug partitions. Formulators have long known that the smaller the droplet size, the higher the surface area of contact between oil and water and the better the drug blood levels that result.
[47] To the foregoing end, the skilled formulator will make a product such that, when added to water, it will give the smallest possible particle size of the oil droplet containing the drug knowing that this will optimize drug movement into the gastrointestinal tissue and subsequently the blood stream. As part of their art, formulators are well aware as to how to obtain very small particle sizes of the emulsion droplets. This can quickly be achieved with a small number of routine experiments on a laboratory bench.
[48] Microemulsions are identified by their small droplet size, which is less than 2000 Å and typically from 100 Å to 1000 Å. They have further defining characteristics. For example, they are thermodynamically stable. They are monophasic. They also form without any substantial energy input. They are also substantially non-opaque, i.e., translucent or opalescent due to their small particle size.
[49] Emulsions are not very stable and tend to separate easily into separate oil and aqueous phases. In contrast, microemulsions are thermodynamically stable and therefore the components remain in microemulsion form over long periods of time.
[50] Microemulsions are distinct from regular emulsions in that regular emulsions are not thermodynamically stable, are milky in colour and have droplet sizes larger than 2000 Å.
[51] One of the most noticeable differences is that regular emulsions are opaque or milky in appearance, while a microemulsion is transparent or opalescent. This visual difference also reflects significant differences in their functional or physical properties.
[52] Apotex explains that the use of the word "emulsion" to describe a system does not necessarily imply that the system is not or cannot form a microemulsion at selected conditions. A microemulsion is merely an emulsion in which the droplet size is very small. One of the physical manifestations of smaller droplet size is that, as the droplet size falls, the emulsion loses its opaque appearance and may become transparent or opalescent.
[53] Novartis, for its part, indicated that microemulsions can be considered either as distinct from emulsions or as a subset of emulsions depending upon which definition one is using. As noted above, emulsions and microemulsions share some common characteristics, however microemulsions have some unique properties that regular or conventional emulsions do not possess. While there may be some disagreement as to whether microemulsions are a subset of emulsions or whether they are a distinct form, there is no disagreement that use of the term "emulsion" does not necessarily include a microemulsion.
[54] Indeed, the considerable differences between emulsions and microemulsions have been recognized by scientists who work in this area. They have clearly recognized that emulsions and microemulsions are distinct entities. The term "microemulsion" was first coined in the 1940s-50s. Since this date, there have been numerous scientific publications that have discussed and characterized the thermodynamics and stability of microemulsions as a unique class.
ISSUES
[55] 1. Is the sending of Apotex' allegation abusive having regard to the orders of Rothstein and Reed JJ. dismissing the exact same allegation of invalidity on the grounds of mootness?
2. Should the Court consider the new prior art introduced by Apotex through its affiant, Dr. Langer, in light of the recent Federal Court of Appeal decision in Ab Hassle?
3. Decision on objection: File wrapper estoppel.
4. Is Apotex' allegation of invalidity as set in Apotex' letter of May 28, 1999 justified? In particular, are claims 1, 6-12, 15-17 and 27 of the ‘150 patent valid?
(a) Are claims 1, 6-12, 15-17 and 27 of the ‘150 patent anticipated by the disclosure of either the ‘667 patent or the ‘307 patent?
(b) Are claims 1, 6-12, 15-17 and 27 obvious?
(c) Are claims 1, 6-12, 15-17 and 27 overly broad?
ANALYSIS
1. Is the sending of Apotex' allegation abusive having regard to the orders of Rothstein and Reed JJ. dismissing the exact same allegation of invalidity on the grounds of mootness?
[56] Novartis submits that this present notice of allegation is duplicitous of the notices of T-860-95 and T35-96. Apotex had the opportunity to have its case of invalidity heard on the merits of both of those proceedings, but chose to withdraw the allegations.
[57] While a generic company may send more than one notice of allegation, the Court of Appeal imposed one important limitation on this right: each successive allegation must be different and its bringing before the Court cannot be seen as an abuse of process.
[58] Novartis suggests that the sending of this notice of allegation which is the same as the two previous allegations of invalidity, amounts to abuse. The earlier decisions, namely that the Apotex' allegation of invalidity is moot and the withdrawal of the allegations, are final decisions. Consequently, this Court has no jurisdiction to hear the same issues.
[59] Apotex submits that, based upon the jurisprudence, it is incumbent upon Novartis to establish, through sworn evidence, that the service of Apotex' notice of allegation here is abusive.
[60] In an attempt to meet this standard, Novartis advances two arguments, neither of which is supported by the evidence. In particular, Novartis asserts that certain representations were made by Novartis to Apotex and the Court at the time that Apotex' previous notices of allegation were withdrawn. Further, Novartis suggests that the basis provided by Apotex for the withdrawal of its previous notices of allegation is untrue.
[61] Apotex contends that based upon the evidence before the Court, it is clear that Apotex previously withdrew its notices of allegation by reason of problems that are entirely irrelevant to this proceeding, namely, compliance with the Food and Drug Regulations.
[62] In Lifeview Emergency Services Ltd. v. Alberta Ambulance Operators' Association et al. (1995), 64 C.P.R. (3d) 157 (F.C.T.D.), Rothstein J. stated:
As to the question of res judicata in respect of dismissals for want of prosecution, the law in Alberta was recently canvassed by Master Funduk in a July 27, 1995 decision in Sinclair Timber Industries Ltd. v. Metis Assn. Regional Council -- Zone No. 1, Court File No. 9303 13799 [now reported 39 C.P.C. (3d) 27, [1995] 10 W.W.R. 141, 31 Alta. L.R. (3d) 279]. Although Master Funduk was not dealing with an order for dismissal under rule 244.1(1), I see no reason why the principles are different in respect of discretionary versus non- discretionary dismissal orders for want of prosecution.
Master Funduk concluded that a second action is not an abuse of the process if a prior lawsuit for the same cause of action is dismissed for want of prosecution and that res judicata does not apply. [...]
There is ample authority to the effect that res judicata cannot be argued when there has not been an adjudication of the merits of the first action: see for example, Merritt v. Brisson (1979), 10 B.C.L.R. 139 (B.C.S.C.), per McFarlane J. Res judicata does not apply in the instant case.
As to whether this action is a means of circumventing rule 244.1(1), I note that rule 244.1(1) does not state or imply that a second action may not be brought if an earlier action is dismissed thereunder. Master Funduk's reasons in Sinclair to which I have referred, are also apt. If a second action may be brought in the Alberta Court of Queen's Bench after an initial action is dismissed for want of prosecution, I see no reason why, if the Federal Court has concurrent jurisdiction, that a second action in this court could not also be brought. Again, although he was dealing with a dismissal for want of prosecution that was made by discretionary order and not an order under rule 244.1(1), I see no reason that his finding on this point would not be equally applicable in respect of a dismissal under rule 244.1(1).
[63] In Apotex Inc. v. Canada (Minister of National Health and Welfare) (1997), 76 C.P.R. (3d) 1 (F.C.A.), the Federal Court of Appeal explained:
On April 29, 1993, the respondent (hereinafter "Apotex"), a Canadian manufacturer of generic products, submitted an application to the Minister for an NOC in respect of its own brand of nizatidine compositions. As Eli Lilly had completed, under the Regulations, a "patent list" containing its two patents for nizatidine, Apotex appended to its application and served on Eli Lilly a notice of allegation to the effect that no claim for the medicine itself, and no claim for the use of the medicine in the Eli Lilly patents, would be infringed by the preparation and sale of nizatidine capsules formulated by Apotex, since these would be formulated from bulk nizatidine supplied by Novopharm Ltd. (hereinafter "Novopharm"), a compulsory licensee of Eli Lilly, pursuant to an agreement between the two generic manufacturers.
On June 14, 1993, Eli Lilly commenced an application for prohibition pursuant to subsection 6(1) of the Regulations. By order dated February 9, 1995, the motions judge in the Trial Division, Madame Justice McGillis, allowed the judicial review application [Eli Lilly and Co. v. Apotex Inc. (1995), 60 C.P.R. (3d) 206]. She found that Apotex's allegation was unjustified since the agreement with Novopharm constituted an impermissible sublicense and, in any event, the processing of licensed bulk nizatidine into capsule form would infringe the patentee's rights. An order of prohibition was therefore issued as required by the Regulations, which order was later on appeal upheld by this Court [66 C.P.R. (3d) 329] whose judgment is now pending before the Supreme Court [70 C.P.R. (3d) vi].
Following the issuance of McGillis J.'s order, Apotex, while pursuing its appeal, submitted a second notice of allegation and served a copy thereof on Eli Lilly on February 13, 1995. In this second notice, Apotex stated that, in the formulation of its nizatidine capsules, it will use only nizatidine manufactured by means of a process that would not infringe the processes claimed in the Eli Lilly patents. Eli Lilly did not respond. In May, 1995, as Eli Lilly had not applied, under subsection 6(1) of the Regulations, for an order of prohibition within the 45 day limitation period, Apotex requested confirmation from the Minister that its application for an NOC in respect of its own brand of nizatidine would be processed. Being left without comment from the Minister, Apotex applied to the Trial Division of this Court for declaratory relief and an order in the nature of mandamus compelling the Minister to process Apotex's new drug submission unconstrained by the Regulations and the prohibition order of Madame Justice McGillis.
The different Trial Division judge seized with the application allowed it. Following, in that respect, what he saw as being the jurisprudence of the Court, he held that it was not an abuse of process for Apotex to have filed a second notice of allegation, insofar as the second notice was based on different grounds than the first, which was the case since the first notice was based on the existence of a license, whereas the second was on a non- infringing process. The learned Trial Division judge rejected Eli Lilly's argument that the principle of res judicata applied. As he saw it, the task of the Court in a prohibition proceeding was to determine whether a particular notice of allegation was justified as the contents of the underlying NDS are not directly before the Court. It would appear to him extraordinary to treat McGillis J.'s order as resolving any dispute other than that which was before her at the hearing. She obviously could not rule prospectively in respect of issues and evidence that were not before her. It followed that the scope of her prohibition order had to be confined to the specific allegations that were advanced in the proceedings then involved. The conclusion was inevitable: Eli Lilly having failed to commence an application for a prohibition order within 45 days of service of the second notice of allegation, the Minister was free to process Apotex's request.
[64] In Schering Canada Inc. et al. v. Nu-Pharm Inc. et al. (1994), 58 C.P.R. (3d) 14 (F.C.T.D.), Rothstein J. stated:
The issue of whether a second person may file a second notice of allegations in circumstances such as in the case at bar is one of fairness. Both first and second persons may find themselves in the position of not having filed evidence within the time limited by the rules. Either may be refused an extension of time to file evidence by the court. It would not be fair to allow the second person to circumvent this difficulty and regain the opportunity to file evidence by serving a new notice of allegations when it is not open to the first person to regain the same opportunity because it cannot file a new application for a prohibition order. I do not think that the Governor in Council enacted Regulations that, in respect of procedure, were intended to treat first and second persons unequally.
There is another reason that I do not think that the Regulations contemplate a second notice of allegations in circumstances such as in the case at bar. The second notice of allegations gives rise to the exact same application for prohibition and evidence by Schering as it has already filed as a result of the first notice of allegations. Once the first application for prohibition has been adjudicated, the matter will have been decided on its merits. That Nu-Pharm has no evidence filed does not change the fact that the court will have made a decision on the merits, on the basis of the material before it. That decision will render the prohibition application res judicata. There will be no basis for a second proceeding at that point because the matter will have already been finally determined.
[...]
For these reasons, I do not think that the Regulations contemplate multiple notices of allegations setting forth the same allegations in order to circumvent time-limits in the rules of the court and court orders made in respect of them. A purported new notice of allegations in these circumstances does not start the process again and does not give the second person a fresh opportunity to file evidence.
[65] In Bayer AG v. Apotex Inc. (1998), 84 C.P.R. (3d) 23 (F.C.T.D.), Gibson J. held:
As reflected in the relief sought in the later Notice of Motion, these Originating Notices of Motion were not the first filed by Bayer against the Minister and Apotex in respect of the medicine ciprofloxacin. They were in fact the fourth and fifth such Motions, all responsive to notices of allegations by Apotex. The first two applications were heard together by my colleague MacKay J. who held in favour of Bayer. The third was heard by my colleague Lutfy J. who found in favour of Apotex. These applications, that is to say the fourth and fifth applications, were, like the first and second, heard together. The argument proceeded almost entirely on the basis of material submitted on Court File T-591-96. These reasons have been written to apply with respect to both applications and copies of the reasons will be filed on both files together with separate orders.
[...]
Earlier in these reasons, I noted that the notices of allegations giving rise to these applications are the fourth and fifth notices of allegations made by Apotex in respect of ciprofloxacin. Bayer alleges that the fifth notice of allegation is essentially the same as, and not separate and distinct from, the fourth notice of allegation. The fifth notice of allegation arises, it is alleged, under the same provision of the Act, that is to say subsection 28(2). It involves the same parties, the same medicine, the same Canadian patents and relies in part on the same foreign patent, the Chilean patent. It merely adds the Spanish patent and the German patent application comprised in the "family I" referred to earlier. Bayer alleges that, through the exercise of reasonable diligence, the references to the Spanish patent and the German patent application could reasonably have been included in the fourth notice of allegation.
In Bayer Inc. v. Canada (Minister of National Health and Welfare), Mr. Justice Lutfy wrote:
The bringing of more than one notice of allegation before the Court, provided it is separate and distinct from the others, cannot be seen as an abuse of process.
For this proposition, Mr. Justice Lutfy cites Apotex Inc. v. Canada (Minister of National Health and Welfare) where Mr. Justice Marceau wrote:
I agree with the views expressed in the numerous Trial Division decisions referred to by the motions judge to the effect that successive allegations are possible and each one must be treated independently provided it is separate and distinct from the others and its bringing before the Court cannot be seen as an abuse of process.
[...]
The issue, then, is not whether multiple notices of allegations in respect of the same medicine and brought by the same "second person" constitute an abuse of process but rather whether each of those notices of allegations is separate and distinct from each of the others. If they are not, there may be an abuse of process.
[...]
In Hoffman-La Roche Ltd. v. Canada (Minister of National Health and Welfare), Mr. Justice Stone, in summarizing the "core guidance" provided by earlier decisions in matters of this nature wrote [p. 211]:
7. Where second persons fail to file notices of allegation or adequate notices of allegation they "must assume their own risk when it comes to attacks on the adequacy of such allegations once prohibition proceedings are commenced".
8. The requirement in paragraph 5(3)(a) of the Regulations that a second person provide a detailed statement "seems intended . . . [to make] the patentee... fully aware of the grounds on which the applicant seeks issuance of a NOC [that will not lead to infringement of the patent] before the patentee decides whether or not to apply to a court for a determination. Such disclosure would define the issues at a very early stage." [Emphasis added, citations omitted.]
[66] In Alza Corp. v. Apotex Inc., [1998] F.C.J. No. 962 (F.C.T.D.), Reed J. stated:
[...] the approach that had been adopted in AB Hassle v. Canada (Minister of National Health and Welfare) (1995), 52 C.P.R. (3d) 3 (F.C.T.D.). In that case it was held that the withdrawal of an allegation indicated a concession of infringement and, therefore, the application to which the allegation related should be disposed of by a prohibition order. Counsel for the respondent advised on April 4, 1997, that this proposal was not acceptable. Reference was made to the decisions in AB Hassle v. Canada (Minister of National Health and Welfare) (1997), 72 C.P.R. (3d) 318 (F.C.T.D.) and Merck Frosst v. Canada, (1997) 72 C.P.R. (3d) 468 (F.C.T.D.). In the former, at 324 and 326-7, Mr. Justice Nadon declined to issue a prohibition order in the case of a withdrawal of an allegation. He decided that the withdrawal of the allegation rendered the application moot. He held that the facts before him did not support a conclusion that the withdrawal constituted a concession that infringement existed:
In Hassle, supra, Justice Richard interpreted the withdrawal of the notice as an admission that the allegations therein were not justified. However, in the case before me there are cogent facts which explain why this notice of allegation was withdrawn. I do not interpret the withdrawal as an admission. In this case the only effect of the withdrawal is to render the proceeding moot. Had I not concluded that the matter is moot I would have concluded, as Richard J. did in Hassle, supra, that none of the allegations are justified.
In the Merck Frosst decision, Mr. Justice Rothstein held that when a second allegation was withdrawn this rendered the proceeding to which it related moot. He held that there remained no adversarial issue having a logical nexus to the proceedings, and that a prohibition order is solely related to the application which gave rise to it, provided that the allegations are in no way interdependent.
[...]
In the A.B. Hassle decision (1995), the facts indicated that the withdrawal of the first allegation and the substitution of a second was an attempt to escape a time limitation that had inadvertently been ignored. Thus, the refiling could be characterized as an abuse of process. But there is no such factual underpinning on this file to support such a characterization of the withdrawal and subsequent refiling. While both allegations are the same (the tablets are not osmotic devices), this does not mean that the formulations themselves are the same, or that an abuse of process occurred in the withdrawal and subsequent refiling. The existence of such can, in any event, be argued in the context of the application on file T-420-98, if the applicants wish to pursue that argument.
[67] In the case at bar, Apotex has explained that it withdrew its notice of allegation because of problems regarding compliance with the Food and Drug Regulations.
[68] I believe this to be a reasonable explanation. Furthermore, Novartis had not presented further evidence illustrating that the basis provided by Apotex for the withdrawal of its previous notices of allegation as being untrue. Therefore, the Apotex' notice of allegation is not an abuse of process.
2. Should the Court consider the new prior art introduced by Apotex through its affiant, Dr. Langer, in light of the recent Federal Court of Appeal decision in Ab Hassle?
[69] In support of its contention, Novartis relies on AB Hassle v. Canada (Minister of National Health and Welfare), [2000] F.C.J. No. 855 (F.C.A.), where the Federal Court of Appeal held:
It seems to me that a key to the determination of this appeal is an appreciation of the role played by a detailed statement within the scheme of the Regulations. As has been indicated, that statement is to be provided before a section 6 prohibition proceeding can be contemplated by the affected patentee. It serves the purpose of notifying the patentee that, in the view of a second person, a patent listed by the first person pursuant to section 4 of the Regulations will not be infringed or, alternatively, that the patent is invalid. This accords with the views of Marceau J.A. in Apotex Inc. v. Canada (Minister of National Health and Welfare) (1997), 76 C.P.R. (3d) 1 (F.C.A.), at 11:
The basic purpose of the Re