Apotex Inc. v. Can. (A.G.), (2000) 255 N.R. 319 (FCA)

• Judge: Décary, Sexton and Evans, JJ.A.
• Court: Federal Court of Appeal (Canada)
• Case Date: May 12, 2000
• Jurisdiction: Canada (Federal)
• Citations: (2000), 255 N.R. 319 (FCA)

Apotex Inc. v. Can. (A.G.) (2000), 255 N.R. 319 (FCA)

MLB headnote and full text

Temp. Cite: [2000] N.R. TBEd. JN.002

In The Matter Of sections 18, 18.1 and 18.2 of the Federal Court Act, R.S.C. 1985, c. F-7, as amended;

And In The Matter Of the Food and Drugs Act, R.S.C. 1985, c. F-27, as amended;

In The Matter Of section 4 of the Patent Act Amendment Act, 1992, S.C. 1993, c. 2, and section 55.2 of the Patent Act, R.S.C. 1985, c. P-4, as amended;

In The Matter Of the Patented Medicines (Notice of Compliance) Regulations, SOR/93-133.

Apotex Inc. (appellant/applicant) v. The Attorney General of Canada, the Minister of National Health and Welfare, Merck & Co., Inc. and Merck Frosst Canada Inc. (respondents) and Eli Lilly Canada Inc., Pharmaceutical Manufacturers Association of Canada and Canadian Drug Manufacturers Association (interveners)

(A-922-96)

Indexed As: Apotex Inc. v. Canada (Attorney General) et al.

Federal Court of Appeal

Décary, Sexton and Evans, JJ.A.

May 12, 2000.

Summary:

The Patent Act Amendment Act, 1992, and Patented Medicines (Notice of Compliance) Regulations linked the issuance of a notice of compliance (NOC) to patent rights. Pre­viously only the production process, or the drug when manufactured by a specified process, could receive patent protection, and not the product itself. Merck & Co. held the exclusive license for norfloxacin and Merck Frosst Canada was a sublicensee for that drug and the only holder of an NOC for sales in Canada. Merck sought an order pursuant to s. 6(1) of the Regulations pro­hibiting the Minister of National Health and Welfare from issuing an NOC to Apotex Inc. for norfloxacin until after the expiry of the patent. Subsequently, Apotex applied for an order in the nature of mandamus directing the Minister to issue to it an NOC for nor­floxacin and a declaration that the Regu­lations were ultra vires the authority of the Governor-in-Council granted under s. 55.2(4) of the Patent Act. Alternatively, Apotex argued that the Regulations, properly inter­preted, did not apply to applications for an NOC that were outstanding before the Regu­lations came into force. Apotex further argued that the Regulations were enacted for a collateral or ulterior motive and that they were discriminatory. The Canadian Drug Manufacturing Association (CDMA), an intervenor, argued that the process whereby the Regulations were developed and intro­duced did not meet essential standards of fairness because the Minister assured them in writing that they would be consulted in the development of the Regulations, but no consultation occurred.

The Federal Court of Canada, Trial Di­vision, heard Merck's application first. In a decision reported at 106 F.T.R. 294, the court held that the Minister was prohibited from issuing an NOC to Apotex for nor­floxacin. Apotex appealed.

The Federal Court of Appeal, in a decision reported 197 N.R. 294, dismissed the appeal. Merck sought a dismissal or stay of Apotex's pending application on the ground that it was an abuse of process because Apotex should have raised the issue in Merck's application under s. 6 of the Regulations.

The Federal Court of Canada, Trial Di­vision, in a decision reported at 123 F.T.R. 161, dismissed Merck's application for a stay or dismissal of Apotex's application for abuse of process and dismissed Apotex's application. Apotex appealed.

The Federal Court of Appeal dismissed the appeal.

Administrative Law - Topic 2267

Natural justice - The duty of fairness - Reasonable expectation or legitimate ex­pectation - The Canadian Drug Manu­facturing Association (CDMA) submitted that the Patented Medicines (Notice of Compliance) Regulations were invalid because they were made in breach of an undertaking by the Minister of Consumer and Corporate Affairs to the CDMA that it would be consulted before regulations were enacted under s. 55.2(4) of the Patent Act -The Federal Court of Appeal held that even if the doctrine of legitimate expecta­tions applied to the regulation-making power of the Governor-in-Council, the doctrine would not apply here because: a) the alleged undertaking was at best a per­sonal undertaking of a political nature that was not enforceable in a court of law; and b) it was not an undertaking that bound the decision-maker, the Governor-in-Council -See paragraphs 1 to 26.

Courts - Topic 2286

Jurisdiction - Bars - Academic matters or moot issues - Merck sought an order under s. 6(1) of the Patented Medicines (Notice of Compliance) Regulations prohibiting the Minister from issuing an NOC to Apotex for norfloxacin until after its patent expired - Subsequently, Apotex applied for, inter alia, an order directing the Minister to issue an NOC - Merck's application was heard first and the Minister was prohibited from issuing an NOC to Apotex for nor­floxacin - Apotex's application was heard and dismissed - Apotex appealed - Mean­while, the Supreme Court of Canada, found in favour of Apotex in the Merck application and the Minister issued Apotex with an NOC for norfloxacin - Merck argued that the appeal in the Apotex appli­cation was now moot - The Federal Court of Appeal heard the appeal where, inter alia, Apotex had an interest in the validity of the Regulations in issue that was not confined to this particular case - See para­graphs 40 to 44.

Estoppel - Topic 387

Estoppel by record (res judicata) - Res judicata as a bar to subsequent proceedings - Matters or claims available in prior pro­ceedings - Merck sought an order under s. 6(1) of the Patented Medicines (Notice of Compliance) Regulations prohibiting the Minister from issuing an NOC to Apotex for norfloxacin until after its patent expired - Subsequently, Apotex applied for, inter alia, a declaration that the Regulations were ultra vires - Merck's application was heard first and the Minister was prohibited from issuing an NOC to Apotex for nor­floxacin - Merck sought a dismissal or stay of Apotex's pending application on the ground that it was an abuse of process because Apotex should have raised the issue in Merck's application under s. 6 - The motions judge held that Apotex could have raised the issue in Merck's appli­cation, but declined to stay or dismiss Apotex's application because there were special circumstances - The Federal Court of Appeal upheld the motions judge's decision to hear the application - See paragraphs 45 to 47.

Estoppel - Topic 398

Estoppel by record (res judicata) - Res judicata as a bar to subsequent proceedings - Exceptions - Special circumstances - [See Estoppel - Topic 387 ].

Food and Drug Control - Topic 1112

Drugs - New drugs - Approval of generic drugs - [See Patents of Invention - Topic 5512 and Patents of Invention - Topic 5513 ].

Patents of Invention - Topic 5512

New substances licenses - Food and medi­cine - Patent Act - Interpretation - Apotex applied for a notice of compliance (NOC) for a drug in 1989 - The Patent Act Amendment Act, 1992, and Patented Medi­cines (Notice of Compliance) Regulations (the Regulations) linked the issuance of an NOC to patent rights - The Regulations, enacted under s. 55.2(4) of the Patent Act, applied to NOC applications existing at the time the Regulations were adopted - Apotex submitted that s. 55.2(4) only authorised Regulations that applied to a person who had taken advantage of s. 55.2(1) or 55.2(2) respecting the new drug product that was the subject of the pro­hibition proceeding - The Federal Court of Appeal rejected the submission - See para­graphs 49 to 81.

Patents of Invention - Topic 5513

New substances licenses - Food and medi­cine - Patent Act Regulations - Interpreta­tion - Apotex applied for a notice of com­pliance (NOC) for a drug in 1989 - The Patent Act Amendment Act, 1992, and Patented Medicines (Notice of Compliance) Regulations linked the issuance of an NOC to patent rights - The Regulations, enacted under s. 55.2(4) of the Patent Act, applied to NOC applications existing at the time the Regulations were adopted - The Fed­eral Court of Appeal held that the appli­cation of the Regulations to new drug submissions that were in the pipeline when the 1993 Regulations came into effect did not engage the presumption against retroactivity - No vested right was thereby abrogated - See paragraphs 82 to 87.

Statutes - Topic 6703

Operation and effect - Commencement, duration and repeal - Retrospective and retroactive enactments - What constitutes retrospective or retroactive operation - [See Patents of Invention - Topic 5513 ].

Cases Noticed:

Pulp, Paper and Woodworkers of Canada, Local 8 et al. v. Canada (Minister of Agriculture) et al. (1994), 174 N.R. 37 (F.C.A.), refd to. [para. 18, footnote 9].

Reference Re Canada Assistance Plan (B.C.) - see Reference Re Constitutional Question Act (B.C.).

Reference Re Constitutional Question Act (B.C.), [1991] 2 S.C.R. 525; 127 N.R. 161; 1 B.C.A.C. 241; 1 W.A.C. 241; [1991] 6 W.W.R. 1; 83 D.L.R.(4th) 297, refd to. [para. 23, footnote 12].

Merck Frosst Canada Inc. et al. v. Canada (Minister of National Health and Wel­fare) et al., [1998] 2 S.C.R. 193; 227 N.R. 299, refd to. [para. 30].

Merck Frosst Canada Inc. et al. v. Canada (Minister of National Health and Wel­fare) et al. (1998), 144 F.T.R. 299; 80 C.P.R.(3d) 110 (T.D.), affd. (1999), 236 N.R. 179; 86 C.P.R.(3d) 489 (F.C.A.), refd to. [para. 43].

Merck Frosst Canada Inc. v. Canada (Minister of National Health and Wel­fare) (1998), 84 C.P.R.(3d) 492 (F.C.T.D.), refd to. [para. 43].

Apotex Inc. v. Canada (Minister of National Health and Welfare) et al. (1997), 219 N.R. 151; 153 D.L.R.(4th) 68 (F.C.A.), leave to appeal refused, [1998] 1 S.C.R. viii, refd to. [para. 44].

Deprenyl Research Ltd. et al. v. Apotex Inc. et al. (1994), 77 F.T.R. 62; 55 C.P.R.(3d) 171 (T.D.), affd. (1995), 180 N.R. 323; 60 C.P.R.(3d) 501 (F.C.A.), refd to. [para. 78].

Smith Kline and French Laboratories Ltd. v. Douglas Pharmaceuticals Ltd., [1991] Fleet Street Rep. 522 (N.Z.C.A.), refd to. [para. 80].

Roche Products Inc. v. Bolar Pharmaceuti­cal Co. (1984), 733 F.2d 858 (Fed. Cir.), refd to. [para. 80].

Hoffmann-La Roche Ltd. et al. v. Canada (Minister of National Health and Wel­fare) et al. (1996), 109 F.T.R. 216; 67 C.P.R.(3d) 484 (T.D.), affd. (1996), 205 N.R. 331; 205 N.R. 360; 70 C.P.R.(3d) 1; 70 C.P.R.(3d) 206 (F.C.A.), refd to. [para. 80].

Director of Public Works v. Ho Po Sang, [1962] A.C. 901 (P.C.), refd to. [para. 82].

Scott v. College of Physicians and Sur­geons (Sask.) (1992), 100 Sask.R. 291; 18 W.A.C. 291; 95 D.L.R.(4th) 706 (C.A.), refd to. [para. 84].

Hutchins v. National Parole Board et al., [1993] 3 F.C. 505; 156 N.R. 205; 83 C.C.C.(3d) 563 (F.C.A.), leave to appeal refused, [1994] 1 S.C.R. vii; 166 N.R. 240, refd to. [para. 85].

Apotex Inc. v. Merck & Co. and Merck Frosst Canada Inc., [1994] 1 F.C. 742; 162 N.R. 177 (F.C.A.), affd. [1994] 3 S.C.R. 1100; 176 N.R. 1, dist. [para. 86].

Inuit Tapirisat of Canada and National Anti-Poverty Organization v. Canada (Attorney General), [1980] 2 S.C.R. 735; 33 N.R. 304; 115 D.L.R.(3d) 1, refd to. [para. 100].

Canadian Association of Regulated Importers et al. v. Canada (Attorney General) et al., [1994] 2 F.C. 247; 164 N.R. 342 (F.C.A.), leave to appeal re­fused, [1994] 2 S.C.R. vi; 176 N.R. 75, refd to. [para. 100].

Carpenter Fishing Corp. et al. v. Canada (Minister of Fisheries and Oceans) et al., [1998] 2 F.C. 548; 221 N.R. 372 (F.C.A.), leave to appeal refused, [1998] 2 S.C.R. vi; 230 N.R. 398, refd to. [para. 100].

Old St. Boniface Residents Association Inc. v. Winnipeg (City) et al., [1990] 3 S.C.R. 1170; 116 N.R. 46; 69 Man.R.(2d) 134; 2 M.P.L.R.(2d) 217, refd to. [para. 102].

Baker v. Canada (Minister of Citizenship and Immigration), [1999] 2 S.C.R. 817; 243 N.R. 22, refd to. [para. 113].

R. v. North and East Devon Health Au­thority; Ex parte Coughlan, [1999] Lloyd's Rep. Med. 306 (C.A.), refd to. [para. 113].

Lehndorff United Properties (Canada) Ltd. et al. v. Edmonton (City) (1993), 146 A.R. 37 (Q.B.), affd. on other grounds (1994), 157 A.R. 169; 77 W.A.C. 169 (C.A.), leave to appeal refused [1995] 2 S.C.R. vii; 190 N.R. 239; 178 A.R. 79; 110 W.A.C. 79, refd to. [para. 115].

Bezaire et al. v. Board of Education (Roman Catholic Separate) of Windsor (1992), 57 O.A.C. 39; 9 O.R.(3d) 737 (Div. Ct.), refd to. [para. 115].

Sunshine Coast Parents for French v. Sun­shine Coast School District No. 46 (1990), 44 Admin. L.R. 252 (B.C.S.C.), refd to. [para. 116].

R. v. Liverpool Corp.; Ex parte Liverpool Taxi Fleet Operators' Association, [1972] 2 Q.B. 299 (C.A.), refd to. [para. 117].

Council of Civil Service Unions v. Minis­ter for the Civil Service, [1985] A.C. 374 (H.L.), refd to. [para. 117].

R. v. Secretary of State for Health; Ex parte U.S. Tobacco International Inc., [1992] 1 All E.R. 212 (Q.B.), refd to. [para. 127].

R. v. Brent London Borough Council; Ex parte Gunning (1985), 84 L.G.R. 168 (Q.B.), refd to. [para. 136].

Cardinal and Oswald v. Kent Institution (Director), [1985] 2 S.C.R. 643; 63 N.R. 353; 49 C.R.(3d) 35; [1986] 1 W.W.R. 577; 23 C.C.C.(3d) 118; 24 D.L.R.(4th) 44, refd to. [para. 147].

Irving Oil Ltd., Canaport Ltd., Kentlines Ltd. and Thorne's Hardware Ltd. v. National Harbours Board, [1983] 1 S.C.R. 106; 46 N.R. 91, refd to. [para. 148].

Statutes Noticed:

Interpretation Act, R.S.C. 1985, c. I-21, sect. 44(c) [para. 83].

Patent Act, R.S.C. 1985, c. P-4, sect. 55.2(1), sect. 55.2(2), sect. 55.2(3), sect. 55.2(4), sect. 55.2(5) [para. 33].

Patent Act Regulations (Can.), Patented Medicines (Notice of Compliance) Regu­lations, SOR/93-133, sect. 5(1), sect. 6(1), sect. 6(5), sect. 7(1)(e) [para. 33].

Patented Medicines (Notice of Com­pliance) Regulations (Can.) - see Patent Act Regulations (Can.).

Authors and Works Noticed:

Joseph, Philip A., Constitutional and Ad­ministrative Law in New Zealand (1993), pp. 754, 755, 756 [para. 117].

Mullan, David J., Canada Assistance Plan -Denying Legitimate Expectation A Fair Start? (1993), 7 Admin. L.R.(2d) 269, generally [para. 118].

Mullan, David J., Confining the Reach of Legitimate Expectations (1991), 44 Admin. L.R. 245, generally [para. 116].

Small, Joan G., Legitimate Expectations, Fairness and Delegated Legislation (1994-95), 8 Can. J. Admin. L. & Prac­tice 129, generally [para. 118].

Wright, David, Rethinking the Doctrine of Legitimate Expectations in Canadian Administrative Law (1997), 35 Osgoode Hall L.J. 139, pp. 188 to 193 [para. 119].

Counsel:

H.B. Radomski and D. Scrimger, for the appellant;

R. Woyiwada, for the defendant, Attorney General of Canada;

W.H. Richardson and C. Zayid, for the defendant, Merck & Co. Inc.;

A.G. Creber, for the defendant, Eli Lilly Canada Inc. and Pharmaceutical Manu­facturers Association of Canada;

R.G. Slaght and T. Gilbert, for the intervenor, Canadian Drug Manufacturers Association.

Solicitors of Record:

Goodman Phillips & Vineberg, Toronto, Ontario, for the appellant;

Morris Rosenberg, Q.C., Deputy Attorney General of Canada, Ottawa, Ontario, for the defendant, Attorney General of Canada;

McCarthy, Tétrault, Toronto, Ontario, for the defendant, Merck & Co. Inc.;

Gowling Strathy & Henderson, Ottawa, Ontario, for the defendant, Eli Lilly Canada Inc. and Pharmaceutical Manu­facturers Association of Canada;

Lenzcner Slaght, Toronto, Ontario, for the intervenor, Canadian Drug Manufacturers Association.

This appeal was heard at Toronto, Ontario, on February 28 and 29, 2000, by Décary, Sexton and Evans, JJ.A., of the Federal Court of Appeal. The decision of the court was delivered on May 12, 2000, and the following opinions were filed:

Décary, J.A. (Sexton, J.A., concurring) - see paragraphs 1 to 26;

Evans, J.A. - see paragraphs 27 to 152.