March 18, 2021
In Merck Sharp & Dohme Corp. v. Sandoz Canada Inc., 2020 FC 1180, the Federal Court determined that actions launched under s. 8.2 of the Patented Medicines (Notice of Compliance) Regulations (the “Regulations”) are not subject to a 45-day limitation period.
In this case, the Plaintiff (“Merck”) was served with notices of allegation ("NOAs") regarding three patents it had listed on the Patent Register. Merck started a patent infringement action related to the three patents pursuant to s. 6(1) of the Regulations, which provides a first person who receives an NOA with 45 days to commence an action against the party that served the NOA. Once a first person starts a s. 6(1) action, they trigger an automatic 24-month stay within which the parties that served the NOA cannot be issued a NOC unless the patent at issue expires or the action is dismissed.
132 days after receiving the NOAs, Merck commenced a new infringement action under s. 8.2 of the Regulations against the same Defendants for a fourth patent (the “Fourth Patent Action”). S. 8.2 enables a first person to bring a quia timet infringement action in response to an NOA regarding a patent that is not included in the NOA or listed on the Patent Register. Unlike s. 6(1), on its face, s. 8.2 does not prescribe any limitation period within which an action must be brought.
The issue was whether Merck could commence the Fourth Patent Action or if it was barred, because the 45-day limitation period under s. 6(1) also applies to actions under s. 8.2.
The Federal Court’s Decision
Merck argued that, while s. 6(1) and s. 8.2 use similar language, the latter, unlike the former, does not reference a 45-day limitation period; if the legislature intended to create a limitation period for s. 8.2, it would have done so. The Court described this argument as “compelling” but emphasized that, even where the text of a provision appears clear, it is necessary to consider contextual and purposive factors to establish its meaning.
The Defendants reasoned that s. 8.2 suggests immediacy, because it offers a right of action “[o]n receipt of a notice of allegation”. Also, they claimed that allowing delayed s. 8.2 actions would prevent the timely market entry of generics and thereby frustrate the provision’s legislative purpose of reducing legal uncertainty. Despite agreeing that importing the 45-day limitation period into s. 8.2 would reduce legal uncertainty, the Court held “there is no basis to conclude that the relevant legislative purpose requires reading down section 8.2 to include a 45-day limitation period”.
Furthermore, even a s. 6(1) action may be started after 45 days if there was not a “reasonable basis” to commence the action during that period. The Court concluded that it would be illogical to strictly bar s. 8.2 actions when the s. 6(1) actions provide some very limited exceptions.
Additionally, the Court found that s. 6(1)’s 45-day limitation period is a function of the automatic 24-month stay; the limitation period was intended to ensure that, if a party wished to invoke the stay, it must do so “promptly”, so it will conclude expediently. However, the automatic stay does not apply to s. 8.2 actions, and so no 45-day limitation period is required.
The Court also held that the information provided in NOAs allows the first person to quickly decide whether to object to the issuance of an NOC. By contrast, the relevant patents in s. 8.2 actions go unaddressed in the NOA. Thus, the first person would not be similarly equipped to bring an action within 45-days.
In granting a partial summary judgment to Merck, the Court dismissed the Defendants’ limitation defences by finding that s. 8.2 does not impose a 45-day limitation period.
Authors: Aaron Barrett and Jaclyn Tilak