Abbott Laboratories et al. v. Canada (Minister of Health) et al., (2007) 362 N.R. 91 (FCA)

• Judge: Létourneau, Sexton and Evans, JJ.A.
• Court: Federal Court of Appeal (Canada)
• Case Date: February 15, 2007
• Jurisdiction: Canada (Federal)
• Citations: (2007), 362 N.R. 91 (FCA);2007 FCA 140

Abbott Lab. v. Can. (2007), 362 N.R. 91 (FCA)

MLB headnote and full text

Temp. Cite: [2007] N.R. TBEd. AP.033

Pharmascience Inc. (appellant) v. The Minister of Health and Abbott Laboratories and Abbott Laboratories Limited (respondents)

(A-151-06; 2007 FCA 140)

Indexed As: Abbott Laboratories et al. v. Canada (Minister of Health) et al.

Federal Court of Appeal

Létourneau, Sexton and Evans, JJ.A.

April 5, 2007.

Summary:

Abbott Laboratories and Abbott Laboratories Ltd. (collectively, Abbott) applied for an order prohibiting the Minister of Health from issuing a Notice of Compliance to Pharmascience Inc. for the production of clarithromycin 250 mg or 500 mg tablets until the expiration of its Canadian patents ('606, '732, '274, '527, '534, '356 and '361). Pharmascience argued that the Abbott patents were invalid.

The Federal Court, in a decision reported at 289 F.T.R. 139, allowed the application. Pharmascience appealed.

The Federal Court of Appeal dismissed the appeal.

Estoppel - Topic 386

Estoppel by record (res judicata) - Res judicata as a bar to subsequent proceedings - Issues decided in prior proceedings (incl. validity of statutes) - The Federal Court of Appeal stated that generic drug companies "should in most circumstances be precluded by the doctrine of issue estoppel from alleging for a second time that a patent is invalid, unless the basis relied upon for the subsequent allegation could not be determined with reasonable diligence at first instance, or some special overriding circumstance exists to warrant a judge exercising her discretion not to apply issue estoppel on the facts of the particular case" - See paragraph 2.

Estoppel - Topic 386

Estoppel by record (res judicata) - Res judicata as a bar to subsequent proceedings - Issues decided in prior proceedings (incl. validity of statutes) - Abbott Laboratories and Abbott Laboratories Ltd. (collectively, Abbott) applied for an order prohibiting the Minister of Health from issuing a Notice of Compliance to Pharmascience Inc. for the production of clarithromycin 250 mg or 500 mg tablets until the expiration of its Canadian patents ('606, '732, '274, '527, '534, '356 and '361) - Pharmascience argued that the Abbott patents were invalid - The applications judge held that res judicata applied as Pharmascience raised the issue of the validity of the '732 patent in Abbott Laboratories v. Canada (Minister of Health) (F.C. 2004) (Gibson, J., decision) and a final order of prohibition issued as a result of the Federal Court of Appeal upholding the decision - Pharmascience appealed - It agreed that the Gibson, J., decision was final and that the parties were the same - However, it argued that the Gibson, J., decision considered only the issue of sufficiency of the infringement allegations in the Notice of Allegation, it did not resolve whether the '732 patent was invalid - The Federal Court of Appeal dismissed the appeal - The issue of invalidity of the '732 patent was fundamental to the Gibson, J., decision - In order to meet the criteria of s. 6(2) of the Patented Medicines (Notice of Compliance) Regulations for granting a prohibition order, Gibson, J., was required to consider the merits of the invalidity allegation - See paragraphs 31 to 35.

Estoppel - Topic 386

Estoppel by record (res judicata) - Res judicata as a bar to subsequent proceedings - Issues decided in prior proceedings (incl. validity of statutes) - Abbott Laboratories and Abbott Laboratories Ltd. (collectively, Abbott) applied for an order prohibiting the Minister of Health from issuing a Notice of Compliance to Pharmascience Inc. for the production of clarithromycin 250 mg or 500 mg tablets until the expiration of its Canadian patents ('606, '732, '274, '527, '534, '356 and '361) - Pharmascience argued that the Abbott patents were invalid - The applications judge held that res judicata applied as Pharmascience raised the issue of the validity of the '732 patent in Abbott Laboratories v. Canada (Minister of Health) (F.C. 2004) (Gibson, J., decision) and a final order of prohibition issued as a result of the Federal Court of Appeal upholding the decision - Pharmascience appealed - It agreed that the Gibson, J., decision was final and that the parties were the same - However, it argued that in the context of the Patented Medicines (Notice of Compliance) Regulations, it was permitted to serve multiple Notices of Allegations (NOA) alleging invalidity of a single patent - Each ground of invalidity, be it overbreadth, anticipation, obviousness or inutility, constituted a separate issue for the purpose of issue estoppel - Therefore, because only the question of overbreadth was raised before Gibson J., the other grounds of invalidity, such as anticipation and obviousness, which were raised in the second NOA, could not be precluded by issue estoppel - The Federal Court of Appeal rejected the assertion and dismissed the appeal - See paragraphs 36 to 48.

Estoppel - Topic 386

Estoppel by record (res judicata) - Res judicata as a bar to subsequent proceedings - Issues decided in prior proceedings (incl. validity of statutes) - Abbott Laboratories and Abbott Laboratories Ltd. (collectively, Abbott) applied for an order prohibiting the Minister of Health from issuing a Notice of Compliance to Pharmascience Inc. for the production of clarithromycin 250 mg or 500 mg tablets until the expiration of its Canadian patents ('606, '732, '274, '527, '534, '356 and '361) - Pharmascience argued that the Abbott patents were invalid - The applications judge held that res judicata applied as Pharmascience raised the issue of the validity of the '732 patent in Abbott Laboratories v. Canada (Minister of Health) (F.C. 2004) (Gibson, J., decision) and a final order of prohibition issued as a result of the Federal Court of Appeal upholding the decision - Pharmascience appealed, asserting that the applications judge erred in refusing to exercise his discretion not to apply estoppel on the basis of two factors: (1) Pharmascience was caught by surprise because issue estoppel had not been pleaded by Abbott in its notice of application; and (2) at the time Pharmascience served its second Notice of Allegation (NOA), the law permitted multiple NOAs addressing the same issue - The Federal Court of Appeal rejected the assertions and dismissed the appeal - See paragraphs 50 to 62.

Estoppel - Topic 475

Practice - Pleading - Necessity for - Abbott Laboratories and Abbott Laboratories Ltd. (collectively, Abbott) applied for an order prohibiting the Minister of Health from issuing a Notice of Compliance to Pharmascience Inc. for the production of clarithromycin 250 mg or 500 mg tablets until the expiration of its Canadian patents ('606, '732, '274, '527, '534, '356 and '361) - Pharmascience argued that the Abbott patents were invalid - The applications judge held that res judicata applied as Pharmascience raised the issue of the validity of the '732 patent in Abbott Laboratories v. Canada (Minister of Health) (F.C. 2004) and a final order of prohibition issued as a result of the Federal Court of Appeal upholding the decision - Pharmascience appealed, arguing that the issue should not have been considered because Abbott had not plead the doctrine in its notice of application - The Federal Court of Appeal dismissed the appeal - Pharmascience failed to acknowledge that the reasons for judgment in the case relied upon by Abbott to ground its claims of estoppel were released almost 10 months after Abbott filed its notice of application in the present proceeding - Abbott took the most reasonable step by raising the matter in its Memorandum of Fact and Law - See paragraphs 21 to 23.

Food and Drug Control - Topic 1105

Drugs - New drugs - Notice of compliance - Intervention on application for - Notice of allegation - Abbott Laboratories and Abbott Laboratories Ltd. (collectively, Abbott) applied for an order prohibiting the Minister of Health from issuing a Notice of Compliance to Pharmascience Inc. for the production of clarithromycin 250 mg or 500 mg tablets until the expiration of its Canadian patents ('606, '732, '274, '527, '534, '356 and '361) - Pharmascience argued that the Abbott patents were invalid - The applications judge held that res judicata applied as Pharmascience raised the issue of the validity of the '732 patent in Abbott Laboratories v. Canada (Minister of Health) (F.C. 2004) and a final order of prohibition issued as a result of the Federal Court of Appeal upholding the decision - Pharmascience appealed, arguing that the applications judge erred in failing to consider the merits of the allegations concerning patents '606 and '274 as required by s. 6(2) of the Patented Medicines (Notice of Compliance) Regulations - The use of the imperative "shall" in s. 6(2) obliged an applications judge to consider the allegations made against each patent referred to in the Notice of Allegation (NOA) - The Federal Court of Appeal dismissed the appeal - Reading s. 6(2) in light of s. 6(1), revealed that the term "shall" had no such purpose - It was the "first person," typically an innovator pharmaceutical company, who initiated the application under s. 6(1) and asked the court to make an order of prohibition on the basis that the allegations in the NOA were unjustified - Nowhere was the "second person," usually a generic drug company, given the opportunity to demand that the court evaluate the merits of each of its allegations, if, by dismissing one of the allegations, the first person became entitled to an order of prohibition - See paragraphs 14 to 19.

Cases Noticed:

Abbott Laboratories et al. v. Canada (Minister of Health) et al. (2004), 260 F.T.R. 276; 2004 FC 1349, refd to. [para. 6].

Pharmascience Inc. v. Canada (Minister of Health) - see Abbott Laboratories et al. v. Canada (Minister of Health) et al.

Abbott Laboratories et al. v. Canada (Minister of Health) et al. (2005), 339 N.R. 277; 2005 FCA 250, refd to. [para. 6].

Abbott Laboratories et al. v. Canada (Minister of Health) et al. (2006), 286 F.T.R. 281; 2006 FC 120, revd. (2007), 361 N.R. 90; 2007 FCA 73, refd to. [para. 8].

Procter & Gamble Pharmaceuticals Canada Inc. et al. v. Canada (Minister of Health) et al. (2003), 313 N.R. 380; 2003 FCA 467, refd to. [para. 10].

Housen v. Nikolaisen et al., [2002] 2 S.C.R. 235; 286 N.R. 1; 219 Sask.R. 1; 272 W.A.C. 1, refd to. [para. 14].

Elders Grain Co. et al. v. Ship Ralph Misener et al., [2005] 3 F.C.R. 367; 334 N.R. 1 (F.C.A.), refd to. [para. 15].

Toronto (City) et al. v. Canadian Union of Public Employees, Local 79 et al., [2003] 3 S.C.R. 77; 311 N.R. 201; 179 O.A.C. 291; 2003 SCC 63, refd to. [para. 26].

Danyluk v. Ainsworth Technologies Inc. et al., [2001] 2 S.C.R. 460; 272 N.R. 1; 149 O.A.C. 1, refd to. [para. 27].

Carl Zeiss Stiftung v. Rayner and Keeler Ltd. (No. 2), [1967] 1 A.C. 853 (H.L.), refd to. [para. 28].

Angle v. Minister of National Revenue, [1975] 2 S.C.R. 248; 2 N.R. 397, refd to. [para. 28].

Procter & Gamble Pharmaceuticals Canada Inc. et al. v. Canada (Minister of Health) et al., [2004] 2 F.C.R. 85; 313 N.R. 380; 2003 FCA 467, refd to. [para. 39].

Fidelitas Shipping Co. v. V/O Exportchleb, [1965] 2 All E.R. 4 (C.A.), refd to. [para. 39].

AB Hassle et al. v. Apotex Inc. et al. (2005), 271 F.T.R. 30; 38 C.P.R.(4th) 216; 2005 FC 234, affd. (2006), 350 N.R. 219; 2006 FCA 51, dist. [para. 42].

Bayer AG v. Apotex Inc. (1998), 156 F.T.R. 303 (T.D.), dist. [para. 43].

Bayer AG et al. v. Apotex Inc. et al. (2003), 240 F.T.R. 267; 2003 FC 1199, dist. [para. 44].

AstraZeneca AB et al. v. Apotex Inc. et al. (2005), 335 N.R. 1; 2005 FCA 183, dist. [para. 45].

AB Hassle and Astra Pharma Inc. v. Canada (Minister of National Health and Welfare) (1997), 125 F.T.R. 57; 71 C.P.R.(3d) 129 (T.D.), dist. [para. 47].

Bull (David) Laboratories (Canada) Inc. v. Pharmacia Inc. et al., [1995] 1 F.C. 588; 176 N.R. 48; 58 C.P.R.(3d) 209 (F.C.A.), refd to. [para. 47].

Aventis Pharma Inc. et al. v. Apotex Inc. et al. (2005), 283 F.T.R. 171; 2005 FC 1504, dist. [para. 48].

Reynolds v. Canada (Minister of Foreign Affairs), [1995] F.C.J. No. 1612 (F.C.A.), refd to. [para. 56].

Counsel:

Carol Hitchman and Paula Bremner, for the appellant;

Andrew J. Reddon and Steven G. Mason, for the respondents, Abbott Laboratories and Abbott Laboratories Limited;

Frederick G. Woyiwada, for the respondent, Minister of Health.

Solicitors of Record:

Hitchman & Sprigings, Toronto, Ontario, for the appellant;

McCarthy Tétrault LLP, Toronto, Ontario, for the respondents, Abbott Laboratories and Abbott Laboratories Limited;

John H. Sims, Q.C., Deputy Attorney General of Canada, Ottawa, Ontario, for the respondent, Minister of Health.

This appeal was heard on February 15, 2007, at Toronto, Ontario, by Létourneau, Sexton and Evans, JJ.A., of the Federal Court of Appeal. Sexton, J.A., delivered the following judgment of the Court of Appeal at Ottawa, Ontario, on April 5, 2007.