Apotex Inc. v. Merck & Co. et al., (2010) 381 F.T.R. 148 (FC)

• Judge: Snider, J.
• Court: Federal Court (Canada)
• Case Date: December 22, 2010
• Jurisdiction: Canada (Federal)
• Citations: (2010), 381 F.T.R. 148 (FC);2010 FC 1264

Apotex Inc. v. Merck & Co. (2010), 381 F.T.R. 148 (FC)

MLB headnote and full text

Temp. Cite: [2011] F.T.R. TBEd. JA.002

Apotex Inc. (plaintiff) v. Merck & Co., Inc., Merck Frosst Canada Ltd. and Merck Frosst Canada & Co. (defendants)

Merck & Co. Inc. and Merck Frosst Canada Ltd. (plaintiff by counterclaim) v. Apotex Inc. and Her Majesty the Queen in Right of Canada, as represented by the Attorney General of Canada (defendants by counterclaim)

(T-1169-01; 2010 FC 1264)

Indexed As: Apotex Inc. v. Merck & Co. et al.

Federal Court

Snider, J.

December 22, 2010.

Summary:

The defendants (Merck) held rights to Canadian Patent No. 1,161, 380, which related to a process for manufacturing the drug lovastatin. The patent was issued in 1984 and expired in 2001. In 1993, the plaintiff, Apotex Inc., attempted to enter the market with a generic version of lovastatin and applied to the Minister of Health for a Notice of Compliance (NOC) pursuant to the Patented Medicines (Notice of Compliance) Regulations, SOR/93-133, as amended by SOR/98-166 (the Regulations). On June 1, 1993, Merck filed an application to prohibit the Minister from issuing an NOC to Apotex. A statutory stay was imposed on Merck until a determination could be made as to whether Apotex was justified in its claim that its generic drug would not infringe the patent. The Minister was automatically prohibited from issuing an NOC for up to 30 months. The statutory stay expired on December 1, 1996, without any hearing to determine whether Apotex's allegations were justified.

The Federal Court, in a decision reported at (1997), 128 F.T.R. 210, refused to extend the time period or issue a prohibition order. The Minister then issued the NOC for lovastatin to Apotex on March 27, 1997. Merck appealed.

The Federal Court of Appeal, in a decision reported at (1999), 240 N.R. 195; 165 F.T.R 92, dismissed the appeal on the basis that the question was moot. Two actions were commenced: On June 12, 1997, Merck commenced an action against Apotex for patent infringement. By statement of claim filed June 29, 2001, Apotex sought compensation from Merck under s. 8 of the Regulations for having been kept out of the lovastatin market for the period between April 30, 1996 and March 27, 1997. Both actions were heard together. These reasons pertain only to Apotex's claim and Merck's counterclaim.

The Federal Court held that Apotex was not entitled to damages pursuant to s. 8 of the 1993 version of the Regulations. As of the date of the NOC, the patent had not expired. The court was bound by the interpretation of s. 8 of the 1993 Regulations determined in Apotex Inc. v. Syntex Pharmaceuticals International Ltd. et al. (Syntex FC) and endorsed by the Court of Appeal. Adapting the words in Syntex FC, the cause of any delay in issuing an NOC to Apotex was not that the patent had "expired" by the natural end of its term, by lapse such as failure to pay maintenance fees, or by operation of law such as a declaration of invalidity. Accordingly, there was no liability imposed on Merck. Because of the court's conclusions, there was no need to consider Merck's counterclaim.

Food and Drug Control - Topic 1108.2

Drugs - New drugs - Notice of compliance - Prohibition order - Compensation by first person - The plaintiff (Apotex) sought compensation from the defendants (Merck) under s. 8 of the Patented Medicines (Notice of Compliance) Regulations, SOR/93-133, as amended by SOR/98-166 - Apotex claimed that it was entitled to relief for having been kept out of the lovastatin market for the period between April 30, 1996, and March 27, 1997 - One issue was which version of s. 8 of the Regulations should be applied: the 1993 Regulations, or the 1998 Regulations - The issue turned on the meaning of the word "pending" in the transitional provision, s. 9(6), of the 1998 Regulations - The Federal Court concluded that 1993 Regulations applied to the case at bar - As of March 11, 1998, the coming into force of the 1998 Regulations, Merck's 1993 application to prohibit the Minister of Health from issuing a Notice of Compliance (NOC) to Apotex was not "pending" - Merck's application was without legal foundation as of December 1, 1996, i.e., when the statutory stay on Merck expired, or certainly no later than the date that the NOC was issued on March 27, 1997 - There was no remedy available to Merck under the Regulations after December 1, 1996 - Even if, in some circumstances, an outstanding appeal might result in an application "pending" for purposes of s. 9(6), the facts in the case at bar did not support such a conclusion - See paragraphs 9 to 25.

Food and Drug Control - Topic 1108.2

Drugs - New drugs - Notice of compliance - Prohibition order - Compensation by first person - The plaintiff (Apotex) sought compensation from the defendants (Merck) under s. 8 of the Patented Medicines (Notice of Compliance) Regulations, SOR/93-133, as amended by SOR/98-166 - Apotex provided an interpretation of s. 8 that, in its opinion, accorded with the Regulatory Impact Assessment Statement (RIAS) that accompanied the 1993 Regulations - The Federal Court gave two reasons why the RIAS could not be used to interpret the 1993 version of s. 8 in the manner proposed by Apotex - "The first is that the role of the RIAS cannot be used to change the clear words of a provision of the Regulations. The second is that, contrary to the assertions of Apotex, the RIAS itself is not entirely clear ... [I]n this case, where the RIAS itself is unclear, it ought not to be utilized as a 'tool' to oust the clear language of a legislative provision" - See paragraph 40.

Food and Drug Control - Topic 1108.2

Drugs - New drugs - Notice of compliance - Prohibition order - Compensation by first person - The plaintiff (Apotex) sought compensation from the defendants (Merck) under s. 8 of the Patented Medicines (Notice of Compliance) Regulations SOR/93-133, as amended by SOR/98-166 - The patent at issue related to the drug lovastatin - The patent was issued to Merck in 1984 and expired in 2001 - Apotex claimed that it was entitled to relief for having been kept out of the lovastatin market for the period between April 30, 1996, and March 27, 1997, when the Minister issued the Notice of Compliance (NOC) for lovastatin to Apotex - Merck submitted that Apotex was only entitled to damages where the Minister of Health delayed issuing a NOC "beyond the expiration of all patents that are the subject of an order pursuant to subsection 6(1)" - Apotex argued that where there was only one patent in issue, the words "beyond the expiry of all patents" were inapplicable - The Federal Court held that Apotex was not entitled to damages pursuant to s. 8 of the 1993 Regulations - As of the date of the NOC, the patent had not expired - The court was bound by the interpretation of s. 8 of the 1993 Regulations determined in Apotex Inc. v. Syntex Pharmaceuticals International Ltd. et al. (Syntex FC) and endorsed by the Court of Appeal - Adapting the words in Syntex FC, the cause of any delay in issuing an NOC to Apotex was not that the patent had "expired" by the natural end of its term, by lapse such as failure to pay maintenance fees, or by operation of law such as a declaration of invalidity - Accordingly, there was no liability imposed on Merck - See paragraph 41.

Statutes - Topic 1660

Interpretation - Extrinsic aids - Legislative history - Regulatory Impact Analysis Statements - [See second Food and Drug Control - Topic 1108.2 ].

Words and Phrases

Pending - The Federal Court considered the meaning of "pending" as used in s. 9(6) of the Patented Medicines (Notice of Compliance) Regulations, SOR/98-166 - See paragraphs 13 to 25.

Cases Noticed:

Apotex Inc. v. Syntex Pharmaceuticals International Ltd. et al. (2009) 352 F.T.R. 124; 76 C.P.R.(4th) 325; 2009 FC 494, affd. (2010), 404 N.R. 371; 84 C.P.R.(4th) 409; 2010 FCA 155, appld. [paras. 8, 32 et seq.].

Apotex Inc. v. Merck & Co. Inc. et al. (2010), 363 F.T.R. 137; 82 C.P.R.(4th) 85; 2010 FC 287, dist. [para. 21].

Merck Frosst Canada Inc. et al. v. Canada (Minister of National Health and Welfare) et al. (1995), 106 F.T.R. 294; 65 C.P.R.(3d) 483 (T.D.), affd. (1996), 197 N.R. 294; 67 C.P.R.(3d) 455 (F.C.A.), revd. [1998] 2 S.C.R. 193; 227 N.R. 299; 80 C.P.R.(3d) 368, refd to. [para. 22].

Rizzo & Rizzo Shoes Ltd. (Bankrupt), Re, [1998] 1 S.C.R. 27; 221 N.R. 241; 106 O.A.C. 1; 154 D.L.R.(4th) 193, refd to. [para. 33].

Merck & Co. et al. v. Canada (Attorney General) et al. (1999), 176 F.T.R. 21 (T.D.), refd to. [para. 40].

Statutes Noticed:

Patent Act Regulations (Can.), Patented Medicines (Notice of Compliance) Regulations, SOR/93-133, sect. 8 [paras. 10, 27].

Patent Act Regulations (Can.), Patented Medicines (Notice of Compliance) Regulations, SOR/98-166, sect. 8(1) [para. 11]; sect. 9(6) [para. 12].

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

Counsel:

Harry Radomski, Jerry Topolski, Ben Hackett and David Scrimger, for the plaintiff, Apotex Inc.;

Andrew J. Reddon, Glynnis P. Burt, David Tait, William H. Richardson and Ariel Neuer, for the defendant, Merck Frost Canada Ltd.

Solicitors of Record:

Goodmans, LLP, Toronto, Ontario, for the plaintiff, Apotex Inc.;

McCarthy Tétrault, LLP, Toronto, Ontario, for the defendant, Merck Frost Canada Ltd.

This action, which pertained only to the issues in Court File No. T-1169-01, was heard together with the action in Court File No. T-1272-97, on various dates in February, March, April and May of 2010, at Toronto, Ontario, before Snider, J., of the Federal Court, who delivered the following public reasons for judgment, dated December 22, 2010.