Search

Federal Court of Appeal considers scope of abuse of process under amended PM(NOC) Regulations


October 17, 2019

--

Under the former Patented Medicines (Notice of Compliance) Regulations (the “Former Regulations”), section 6 applications only served to determine whether the generic’s allegations of non-infringement or invalidity were justified so as to allow the Minister to issue a Notice of Compliance (“NOC”) to the generic. Once a patentee was unsuccessful in a section 6 application against one generic, that patentee effectively lost the right to use section 6 in respect of all subsequent generics who provided the same allegation due to, among other things, the doctrine of abuse of process.


Despite being unsuccessful in an application pursuant to section 6 of the Former Regulations, a patentee nevertheless retained the right to commence a patent infringement action against the same generic in respect of the same patent and drug to finally determine the issues of patent validity and infringement.


Under the amended Patented Medicines (Notice of Compliance) Regulations (the “Amended Regulations”), the proceeding contemplated by section 6 was converted from an application to an action for patent infringement, with the typical procedural safeguards associated with an action, including documentary and oral discovery and viva voce evidence presented at a trial.


In Pfizer Canada Inc. v. Amgen Inc., 2019 FCA 249, the Federal Court of Appeal (the “Court”) considered the differences between actions under section 6 of the Amended Regulations and applications under the Former Regulations. In the appeal, the issue was whether the procedural changes to section 6 allowed a patentee to commence a section 6 action under the Amended Regulations despite a previously unsuccessful section 6 application under the Former Regulations.


The Court dismissed Pfizer’s appeal, affirming Prothonotary Milczynski’s decision allowing Amgen’s section 6 action under the Amended Regulations to proceed as against Pfizer.


Background and Prior Proceedings


Amgen Inc. and Amgen Canada Inc. (collectively, “Amgen”) market two biologic drugs, Neupogen and Neulasta, and have listed Canadian Letters Patent No. 1,341,537 (the “537 Patent”) in connection with these products on the Patent Register.


Pfizer Canada Inc. (“Pfizer”) intended to market a biosimilar drug to Neupogen and filed a new drug submission with the Minister of Health seeking a NOC for its product. On March 7, 2018, Pfizer served a Notice of Allegation (“NOA”) on Amgen with respect to the 537 Patent. In response, Amgen brought an action against Pfizer under section 6 of the Amended Regulations.


This was not the first time that Amgen had litigated the 537 Patent. In Federal Court File No. T-2072-12, Amgen asserted the 537 Patent against Apotex Inc. (“Apotex”) with respect to its drug, Grastofil, a biosimilar to Neupogen. Apotex was represented by Andrew Brodkin, Richard Naiberg and Jordan Scopa of the Goodmans IP Team.


Following receipt of Apotex’s NOA, Amgen brought an application pursuant to section 6 of the Former Regulations seeking an order prohibiting the issuance of a NOC to Apotex until after the 537 Patent expired. However, in a decision by Hughes J. dated November 10, 2015 (the “Hughes Decision”), the Federal Court found that Apotex’s allegation of invalidity on the ground of obviousness was justified, and dismissed Amgen’s application. Amgen’s appeal from the Hughes Decision was subsequently dismissed as moot by the Federal Court of Appeal.


Amgen commenced a second application (Federal Court File No. T-1710-15) pursuant to section 6 of the Former Regulations, wherein it asserted the same 537 Patent against Apotex with respect to a different strength of its drug, Grastofil. In view of the Hughes Decision, this second application was dismissed as an abuse of process by Prothonotary Milczynski on October 4, 2016.


Pfizer’s NOA put forward the same allegations of obviousness that the Hughes Decision found to be justified. With the two Apotex decisions in hand, Pfizer moved for the dismissal of Amgen’s action with respect to the 537 Patent pursuant to section 6 of the Amended Regulations on the basis that it too was an abuse of process.


The Prothonotary dismissed Pfizer’s motion. In the Prothonotary’s view, the changes between the Former Regulations and the Amended Regulations resulted in two distinct proceedings, which asked different questions. Since, despite the Hughes Decision, Amgen remained entitled to bring a patent infringement action in relation to the 537 Patent (outside the Regulations in an action under the Patent Act), Hughes J. had not conclusively determined the issues of patent validity and infringement. Instead, those issues could be dealt with in Amgen’s section 6 action under the Amended Regulations.


Issue


The central issue on Appeal was whether the Prothonotary erred by distinguishing the section 6 action under the Amended Regulations from the section 6 application under the Former Regulations.


The Federal Court of Appeal’s Decision


The Court noted that, in Sanofi-Aventis Canada v. Novopharm Ltd., 2007 FCA 163 (“Sanofi”), it had made clear that what it considered to be an abuse of process was that a second application could possibly give rise to inconsistent judicial decisions on the same issues in equivalent proceedings. However, Amgen’s section 6 action under the Amended Regulations did not give rise to such fears, as it addressed different questions than those asked in its section 6 application under the Former Regulations.


The purpose of a section 6 application under the Former Regulations was not to finally determine the issues of patent validity and infringement, as in an action under the Patent Act, but rather to determine the question of whether a NOC should be issued to a generic with respect to a biosimilar product. Despite being unsuccessful in applications pursuant to section 6 of the Former Regulations, patentees always retained the right to subsequently commence patent infringement actions to finally determine issues of patent validity and infringement. Applications pursuant to section 6 of the Former Regulations and actions pursued under the Patent Act were thus not equivalent proceedings, as they sought to determine different questions.


The Court found that an action under section 6 of the Amended Regulations decides essentially the same issues as an action under the Patent Act. The Court concluded that Pfizer was therefore wrong to argue that, under the Amended Regulations, a patentee who failed in respect of an application under the Former Regulations would be barred from commencing an action under section 6 of the Amended Regulations. Instead, in the view of the Court, such proceedings touch on different questions, just as applications pursuant to section 6 of the Former Regulations and actions pursuant to the Patent Act did.


Indeed, the Court determined that depriving Amgen of the right to have the issues of patent validity and infringement finally decided in a patent infringement action would (unfairly) deprive Amgen of a right that it always retained under the former regime.


Accordingly, the Court concluded that there was nothing abusive about Amgen’s action and the Prothonotary did not err in her understanding of Sanofi or her application of that decision.


Commentary


As indicated by the Court at paragraph 87, “Pfizer ha[d] no difficulty with the general proposition that Amgen, like any other patentee, ha[d] a right to pursue an infringement action regarding its product” outside the Amended Regulations. Essentially, Pfizer conceded that Amgen had the right to commence a patent infringement action against Pfizer but only disputed whether an action pursuant to section 6 of the Amended Regulations, with the accompanying automatic 24-month stay prohibiting the issuance of a NOC to Pfizer, was appropriate. Pfizer wanted to be placed in the same position as Apotex – with a NOC and on the market – before being sued in a patent infringement action.


Given Pfizer’s position, the focus on the distinction between the issues to be determined in applications and actions appears to have been somewhat misplaced. There was no real issue between the parties that Amgen would ultimately have the right to have the issues of patent validity and infringement decided in a patent infringement action.


Rather, the central issue on appeal, which was only addressed briefly by the Court at paragraphs 85 to 88, should have been whether it was abusive for Amgen to proceed with a patent infringement action pursuant to section 6 of the Amended Regulations, to again take the benefit of the automatic 24-month stay provided by paragraph 7(1)(d), having already taken that benefit under the Former Regulations and been unsuccessful. By deciding as it did, the Court placed Pfizer in a worse position than subsequent generics delivering identical allegations to Apotex under the Former Regulations would have been placed, merely because the procedure for a section 6 proceeding changed from an application to an action.

Authors: Jordan Scopa, Jaclyn Tilak and Duncan Lurie

  • Twitter Icon (Goodmans IP)
  • LinkedIn Icon (Goodmans IP)
  • Goodmans Intellectual Property Web
  • Twitter Icon (Goodmans IP)
  • LinkedIn Icon (Goodmans IP)
  • Goodmans Intellectual Property Web

333 Bay Street, Suite 3400, Toronto, ON

© 2019 Goodmans LLP. All right reserved.