Apotex Inc. v. Merck & Co. and Merck Frosst Canada Inc., (1993) 162 N.R. 177 (FCA)

• Judge: Mahoney, Robertson and McDonald, JJ.A.
• Court: Federal Court of Appeal (Canada)
• Case Date: October 22, 1993
• Jurisdiction: Canada (Federal)
• Citations: (1993), 162 N.R. 177 (FCA);1993 CanLII 3004 (FCA);162 NR 177;51 CPR (3d) 339;18 Admin LR (2d) 122;[1993] FCJ No 1098 (QL);44 ACWS (3d) 349;51 CPC (3d) 339;69 FTR 152

Apotex Inc. v. Merck & Co. (1993), 162 N.R. 177 (FCA)

MLB headnote and full text

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

Merck & Co. Inc. and Merck Frosst Canada Inc. (appellants/respondents) v. Apotex Inc. (respondent/applicant) and Attorney General of Canada, and the Minister of National Health and Welfare (respondents/respondents)

(A-457-93)

Indexed As: Apotex Inc. v. Merck & Co. and Merck Frosst Canada Inc.

Federal Court of Appeal

Mahoney, Robertson and McDonald, JJ.A.

October 22, 1993.

Summary:

Apotex Inc. applied for an order of mandamus to compel the Minister of Na­tional Health and Welfare to issue a Notice of Compliance (NOC) respecting a generic drug. The respondents Merck applied for an order prohibiting the Minister from issuing the NOC on the ground that the new regime under the Patent Act protected its patent in the drug. The required review of Apotex's New Drug Submission had been completed and the issuance of a NOC was recom­mend­ed, but the Minister delayed issuance from uncertainty of his legal position in the face of the impending new patent protection regime under which a NOC could not be issued until the patent expired.

The Federal Court of Canada, Trial Divi­sion, in a decision reported at 66 F.T.R. 36, held that the delay in issuing the NOC was unwarranted and ordered the Minister to issue the NOC. The court ruled that once the review process was complete under the old regime and the issuance of the NOC recom­mended, the Minister's discretion was exhausted and he was bound to issue the NOC. Merck's application for prohibition was dismissed. Merck appealed. The Minis­ter cross-appealed the finding that the delay in issuing the NOC was unwarranted.

The Federal Court of Appeal dismissed both the appeal and the cross-appeal.

Administrative Law - Topic 3504

Judicial review - Mandamus - General - Conditions precedent - The Federal Court of Appeal set forth the principal require­ments (i.e., eight factors) for an application for mandamus involving a Minister of the Crown - See paragraph 45.

Administrative Law - Topic 3551

Judicial review - Mandamus - Conditions precedent - General - [See Administra­tive Law - Topic 3504 ].

Administrative Law - Topic 3553

Judicial review - Mandamus - Conditions precedent - Existence of a duty - Apotex submitted a New Drug Submission (NDS) and applied for a Notice of Compliance (NOC) which would allow it to market a drug developed by Merck and protected by patent - Thirty-four months later, Apotex applied for mandamus to compel the Min­ister to issue the NOC - The legislation was changing - The new regime would bar applications regarding drugs protected by patent - Merck submitted that mandamus was not available because at the time Apotex made its application for judicial review, it had not forwarded all the infor­mation required to complete the NDS - The NDS application was completed some 40 days later - The Federal Court of Appeal declined to strike the application for judicial review - See paragraphs 48 to 54.

Administrative Law - Topic 3553

Judicial review - Mandamus - Conditions precedent - Existence of a duty - The Federal Court of Appeal stated that "it is not difficult to accept a rule which seeks to eliminate premature applications for mandamus. It is certainly open to a re­spondent to pursue dismissal of an appli­cation where the duty to perform had yet to arise. However, unless compelling rea­sons are offered, an application for an order in the nature of mandamus should not be defeated on the ground that it was initiated prematurely. Provided that the conditions precedent to the exercise of the duty have been satisfied at the time of the hearing, the application should be assessed on its merits. Those who unnecessarily complicate the proceedings may expose themselves to costs ..." - See paragraph 54.

Administrative Law - Topic 3589

Judicial review - Mandamus - Bars - Discretionary power - Apotex Inc. applied for an order of mandamus to compel the Minister to issue a Notice of Compliance (NOC) respecting a generic drug to which Merck held the patent - The required review of Apotex's New Drug Submission had been completed and the issuance of a NOC was recommended, but the Minister delayed issuance in the face of the im­pending, but not proclaimed, new patent pro­tection regime under which a NOC could not be issued until the patent expired - Merck submitted that the court should take notice of the government's change of pol­icy and decline to exercise its discretion to grant mandamus - The Federal Court of Appeal affirmed the trial court's decision to grant mandamus - See paragraphs 94 to 115.

Administrative Law - Topic 3705

Judicial review - Mandamus - Mandamus to government and executive - Ministers of the Crown - [See Food and Drug Control - Topic 1106 ].

Administrative Law - Topic 3705

Judicial review - Mandamus - Mandamus to government and executive - Ministers of the Crown - [See Statutes - Topic 6145 ].

Courts - Topic 2086

Jurisdiction - Extent of - Interpretation of statute ousting jurisdiction - The Patent Amendment Act, 1992 ended the compul­sory licensing scheme for patented drugs - Section 55.2(5) stated that in the case of a conflict between the section or regulations and any other Act or regulation made under it, the section or regulation made under s. 55.2(5) shall prevail - A generic drug company applied to the Federal Court of Canada for mandamus in regard to an application it had made before the amend­ments were proclaimed - The patent holder submitted that the court's jurisdic­tion to grant judicial review under s. 18 of the Federal Court Act was ousted by the paramountcy clause in s. 55.2(5) of the Amendment Act - The Federal Court of Appeal held that its jurisdiction was not ousted by the provision - See paragraphs 128 to 130.

Food and Drug Control - Topic 1106

Drugs - New drugs - Notice of compli­ance - Issuance of - Apotex Inc. applied for an order of mandamus to compel the Minister to issue a Notice of Compliance (NOC) respecting a generic drug to which Merck held the patent - The required review of Apotex's New Drug Submission had been completed and the issuance of a NOC was recommended, but the Minister delayed issuance in the face of the im­pending, but not yet proclaimed, new patent protection regime under which a NOC could not be issued until the patent expired - The Federal Court of Appeal affirmed the trial court's ruling which ordered the Minister to issue the NOC, ruling that once the review process was complete under the old regime, the Minis­ter's discretion was exhausted and he was bound to issue the NOC.

Food and Drug Control - Topic 1112

Drugs - New drugs - Approval of generic drugs - [See Food and Drug Control - Topic 1106 ].

Statutes - Topic 4945

Operation and effect - Enabling acts - Powers - General - Extent or scope of discretionary power - [See Food and Drug Control - Topic 1106 ].

Statutes - Topic 4945

Operation and effect - Enabling acts - Powers - General - Extent or scope of discretionary power - [See Statutes - Topic 6145 ].

Statutes - Topic 6145

Operation and effect - Effect on earlier statutes - Amendments - Preservation of accrued rights - The Food and Drugs Act Regulations stated that the "Minister shall" issue a Notice of Compliance if the ap­plicant's drug was safe - Prospective changes to the legislation barred the issuance of a NOC while the drug was protected by patent - The Minister declined to issue a NOC to Apotex after the safety of its application was established - The new legislation then came into force - Apotex applied for mandamus on the ground it had a vested right in the NOC - The Minister claimed that he could take account of the new legislation even before it was proclaimed - The Federal Court of Appeal held that the right had vested before the new legislation became effective - See paragraphs 55 to 86.

Statutes - Topic 6703

Operation and effect - Commencement, duration and repeal - Retrospective and retroactive enactments - What constitutes retrospective operation - The Food and Drugs Act Regulations stated that the "Minister shall" issue a Notice of Compli­ance if the applicant's drug was safe - Prospective changes barred the issuance of a NOC while the drug was protected by patent - The Minister declined to issue a NOC to Apotex after the safety of its application was established - The new legislation then came into force - Apotex applied for mandamus on the ground it had a vested right in the NOC - Merck, the patent holder, claimed that the operation of the new legislation was retrospective and applied to applications still under con­sid­eration - The Federal Court of Appeal held that the new legislation was not re­tro­spective - See paragraphs 116 to 127.

Cases Noticed:

Pfizer Canada Inc. v. Canada (Minister of National Health and Welfare) et al. (1986), 12 C.P.R.(3d) 438 (F.C.A.), leave to appeal refused 76 N.R. 397; 14 C.P.R.(3d) 447 (S.C.C.), refd to. [para. 3].

Glaxo Canada Inc. v. Canada (Minister of National Health and Welfare) and Apo­tex Inc. et al. (No. 5), [1988] 1 F.C. 422; 16 F.T.R. 81 (T.D.), additional reasons at 19 C.P.R.(3d) 374 (F.C.T.D.), affd. 107 N.R. 195 (F.C.A.), consd. [para. 36].

Apotex Inc. v. Canada (Attorney General and Minister of National Health and Welfare)(No. 6) (1986), 10 F.T.R. 271 (T.D.), application for reconsideration denied 11 C.P.R.(3d) 62 (F.C.T.D.), affd. 77 N.R. 71; 12 C.P.R.(3d) 95 (F.C.A.), leave to appeal refused 76 N.R. 396; 14 C.P.R.(3d) 447 (S.C.C.), refd to. [para. 3].

Apotex Inc. et al. v. Canada (Attorney General) et al. (1993), 64 F.T.R. 186 (T.D.), refd to. [para. 11, footnote 1].

Apotex Inc. v. Canada (Attorney General) et al. (1993), 59 F.T.R. 85 (T.D.), consd. [para. 35].

Jamieson (C.E.) & Co. (Dominion) Ltd. et al. v. Canada (Attorney General) (1987), 12 F.T.R. 167 (T.D.), consd. [para. 37].

Ottawa (City) v. Boyd Builders Ltd., [1965] S.C.R. 408, consd. [para. 39].

O'Grady v. Whyte, [1983] 1 F.C. 719; 42 N.R. 608 (F.C.A.), refd to. [para. 45].

Karavos v. Toronto (City), [1948] 3 D.L.R. 294 (Ont. C.A.), refd to. [para. 45].

Mensinger v. Minister of Employment and Immigration, [1987] 1 F.C. 59; 5 F.T.R. 64 (T.D.), refd to. [para. 45].

Minister of Employment and Immigration v. Hudnik, [1980] 1 F.C. 180 (F.C.A.), refd to. [para. 45].

Jefford et al. v. Canada (Minister of Con­sumer and Corporate Affairs), [1988] 2 F.C. 189; 89 N.R. 156 (F.C.A.), refd to. [para. 45].

Winegarden v. Public Service Commission and Canada (Minister of Transport) (1986), 5 F.T.R. 317 (T.D.), refd to. [para. 45].

Rossi v. R., [1974] 1 F.C. 531 (T.D.), refd to. [para. 45].

Canadian Wildlife Federation Inc. et al. v. Canada (Minister of the Environment) and Saskatchewan Water Corp., [1989] 3 F.C. 309; 26 F.T.R. 245 (T.D.), affd. 99 N.R. 72 (F.C.A.), refd to. [para. 45].

Bedard v. Canada (Correctional Service), [1984] 1 F.C. 193 (T.D.), refd to. [para. 45].

Carota v. Jamieson, [1979] 1 F.C. 735 (T.D.), affd. [1980] 1 F.C. 790 (F.C.A.), refd to. [para. 45].

Nguyen et al. v. Minister of Employment and Immigration (1993), 156 N.R. 212 (F.C.A.), refd to. [para. 45].

Thorson v. Canada (Attorney Gen­eral), [1975] 1 S.C.R. 138; 1 N.R. 225; 43 D.L.R.(3d) 1, refd to. [para. 45, footnote 6].

McNeil v. Nova Scotia Board of Censors, [1976] 2 S.C.R. 265; 5 N.R. 43; 12 N.S.R.(2d) 85; 6 A.P.R. 85, refd to. [para. 45, footnote 6].

Borowski v. Canada (Minister of Jus­tice) et al., [1981] 2 S.C.R. 575; 39 N.R. 331; 12 Sask.R. 420; 130 D.L.R.(3d) 588; [1982] 1 W.W.R. 97; 24 C.P.C. 62; 24 C.R.(3d) 352; 64 C.C.C.(2d) 97, refd to. [para. 45, footnote 6].

Finlay v. Canada, [1986] 2 S.C.R. 607; 71 N.R. 338; 33 D.L.R.(4th) 321, refd to. [para. 45, footnote 6].

Rothmans of Pall Mall Canada Ltd. et al. v. Min­ister of National Revenue et al., [1976] 2 F.C. 500; 10 N.R. 153 (F.C­.A.), refd to. [para. 45].

Distribution Canada Inc. v. Minister of National Revenue, [1991] 1 F.C. 716; 39 F.T.R. 127 (T.D.), affd. [1993] 2 F.C. 26; 149 N.R. 152 (F.C.A.), refd to. [para. 45].

Secunda Marine Services Ltd. v. Canada (Minister of Supply and Services) (1989), 27 F.T.R. 161 (T.D.), refd to. [para. 45].

Szoboszloi v. Canada (Chief Returning Officer), [1972] F.C. 1020 (T.D.), refd to. [para. 45].

Hutchins v. National Parole Board et al. (1993), 156 N.R. 205 (F.C.A.), refd to. [para. 45].

Bhatnager v. Minister of Employment and Immigration, [1985] 2 F.C. 315 (T.D.), refd to. [para. 45].

Director of Investigation and Research, Combines Investigation Act v. Restric­tive Trade Practices Commission and Stoner, [1983] 2 F.C. 222; 48 N.R. 305 (F.C.A.), reving. [1983] 1 F.C. 520 (T.D.), refd to. [para. 45].

Maple Lodge Farms Ltd. v. Canada et al., [1980] 2 F.C. 458 (T.D.), affd. [1981] 1 F.C. 500; 42 N.R. 312 (F.C.A.), affd. [1982] 2 S.C.R. 2; 44 N.R. 354, refd to. [para. 45].

Merck & Co. v. Sherman & Ulster Ltd. (1971), 65 C.P.R. 1 (Ex. Ct.), affd. [1972] S.C.R. vi, refd to. [para. 45].

Kahlon v. Minister of Employment and Immigration, [1986] 3 F.C. 386 (F.C.A.), refd to. [para. 45].

Harelkin v. University of Regina, [1979] 2 S.C.R. 561; 26 N.R. 364, refd to. [para. 45].

Canada (Auditor General) v. Canada (Minister of Energy, Mines and Resources) et al., [1987] 1 F.C. 406; 73 N.R. 241 (F.C.A.), affd. [1987] 2 S.C.R. 49; 97 N.R. 241, refd to. [para. 45].

Auditor General of Canada - see Canada (Auditor General).

Friends of the Oldman River Society v. Canada (Minister of Transport and Min­ister of Fisheries and Oceans), [1990] 2 F.C. 18; 108 N.R. 241 (F.C.A.), affd. [1992] 1 S.C.R. 3; 132 N.R. 321, refd to. [para. 45].

Landreville v. R., [1973] F.C. 1223 (T.D.), refd to. [para. 45].

Beauchemin v. Commission de l'emploi et de l'immigration du Canada (1987), 15 F.T.R. 83 (T.D.), refd to. [para. 45].

Penner v. Electoral Boundaries Commis­sion (Ont.), [1976] 2 F.C. 614 (T.D.), refd to. [para. 45].

Director of Public Works v. Ho Po Sang, [1961] A.C. 901 (P.C.), consd. [para. 56].

Engineers' and Managers' Association v. Advisory, Conciliation and Arbitration Service and United Kingdom Association of Professional Engineers, [1980] 1 W.L.R. 302 (H.L.), consd. [para. 70].

Wimpey Western Ltd. et al. v. Director of Standards and Approvals of the Depart­ment of the Environment et al. (1983), 49 A.R. 360; 3 Admin. L.R. 247 (C.A.), dist. [para. 78, footnote 10].

R. v. Anderson, Director General of Civil Aviation for Commonwealth of Aus­tralia; Ex parte Ipec-Air Pty. Ltd. (1965), 113 C.L.R. 177 (Aust. H.C.), dist. [para. 81].

Haines v. Canada (Attorney General) (1979), 32 N.S.R.(2d) 271; 54 A.P.R. 271 (C.A.), consd. [para. 88, footnote 11].

Martinoff v. Gossen, [1979] 1 F.C. 327 (T.D.), consd. [para. 89].

Lemyre v. Trudel, [1978] 2 F.C. 453 (T.D.), affd. [1979] 2 F.C. 362 (F.C.A.), consd. [para. 90].

R. v. Abell (1979), 3 Sask.R. 181; 49 C.C.C.(2d) 193 (C.A.), consd. [para. 91].

Abell v. Commissioner of Royal Canadian Mounted Police - see R. v. Abell.

R. v. Saskatchewan (Minister of Mineral Resources), [1972] 6 W.W.R. 62; 30 D.L.R.(3d) 480 (Sask. Q.B.), affd. [1973] 1 W.W.R. 193; 32 D.L.R.(3d) 107 (Sask. C.A.), affd. [1973] 2 W.W.R. 672; 38 D.L.R.(3d) 317 (S.C.C.), consd. [para. 101].

Central Canada Potash Co. v. Min­ister of Mineral Resources of Saskatchewan - see R. v. Saskatchewan (Minister of Mineral Resources).

Fitzgerald v. Muldoon, [1976] 2 N.Z.L.R. 615 (S.C.), consd. [para. 102].

Carrier-Sekani Tribal Council et al. v. Canada (Minister of the Environment) et al., [1992] 3 F.C. 317; 141 N.R. 125 (F.C.A.), consd. [para. 103].

Toronto (Roman Catholic Separate School Board) v. Toronto (City), [1925] 3 D.L.R. 880; [1926] A.C. 81 (P.C.), refd to. [para. 111].

Hall v. Toronto (City) (1979), 23 O.R.(2d) 86 (C.A.), refd to. [para. 113].

R. v. Smith (Howard) Paper Mills Ltd., [1957] S.C.R. 403, refd to. [para. 121].

Gardner v. Lucas (1878), 3 App. Cas. 582 (H.L.), refd to. [para. 121].

DeRoussy v. Nesbitt (1920), 53 D.L.R. 514 (Alta. C.A.), refd to. [para. 121].

Angus v. Hart and Angus and Sun Alliance Insurance Co., [1988] 2 S.C.R. 256; 87 N.R. 200; 30 O.A.C. 210, refd to. [para. 121].

Gustavson Drilling (1964) Ltd. v. Minister of National Revenue, [1977] 1 S.C.R. 271; 7 N.R. 401, refd to. [para. 123].

Northern & Central Gas Corp. v. Canada (Attorney General), [1971] F.C. 149 (T.D.), refd to. [para. 124, footnote 13].

Gustavson Drilling (1964) Ltd. v. Minister of National Revenue, [1972] F.C. 92 (T.D.), refd to. [para. 124, footnote 13].

Zong v. Commissioner of Penitentiaries, [1976] 1 F.C. 657; 10 N.R. 1 (F.C.A.), refd to. [para. 124, footnote 13].

Quebec (Attorney General) v. Expropria­tion Tribunal, [1986] 1 S.C.R. 732; 66 N.R. 380, refd to. [para. 124].

Commission de protection du territoire agricole (Qué.) v. Venne et al., [1989] 1 S.C.R. 880; 95 N.R. 335; 24 Q.A.C. 162, refd to. [para. 124].

Lorac Transport Ltd. v. Iran, [1987] 1 F.C. 108; 69 N.R. 183 (F.C.A.), refd to. [para. 124].

Lorac Transport Ltd. v. Ship Atra - see Lorac Transport Ltd. v. Iran.

Parklane Private Hospital Ltd. v. Vancouver (City), [1975] 2 S.C.R. 47; 2 N.R. 305, consd. [para. 125].

British Columbia (Attorney General) et al. v. Parklane Private Hospital Ltd. - see Parklane Private Hospital Ltd. v. Vancouver (City).

Statutes Noticed:

Clean Water Act, R.S.A. 1980, c. C-13, sect. 3(4) [para. 78].

Criminal Law Amendment Act, S.C. 1976-77, c. 53, generally [para. 88].

Federal Court Act, R.S.C. 1985, c. F-7, sect. 18 [para. 130].

Food and Drugs Act, R.S.C. 1985, c. F-27, generally [para. 6].

Food and Drugs Act Regulations (Can.), C.R.C. 1978, c. 870, Div. 8, sect. C.08.001 [para. 7]; sect. C.08.002(1)(a) [paras. 8, 65]; sect. C.08.002(1)(b), sect. C.08.002(1)(c), sect. C.08.004(1)(a) [para. 8].

Interpretation Act, R.S.C. 1952, c. 158, sect. 36(c) [para. 61]; sect. 37(c) [para. 60].

Interpretation Act, R.S.C. 1985, c. I-21, sect. 43(c) [para. 61]; sect. 44(c) [para. 60].

Order-in-Council respecting patents of invention held by alien enemies, P.C. 1914-65, C.Gaz., Oct. 5, 1914, gen­erally [para. 11].

Patent Act, R.S.C. 1923, c. 23, sect. 17 [para. 11].

Patent Act, R.S.C. 1952, c. 203, sect. 41(3) [para. 59].

Patent Act, R.S.C. 1985, c. P-4, sect. 39(4) [para. 9]; sect. 39(14) [para. 10]; sect. 52.2(5) [paras. 17, 128].

Patent Act, S.C. 1968-69, c. 49, sect. 41(4) [para. 59].

Patent Act Amendment Act, S.C. 1993, c. 2, sect. 4 [para. 13]; sect. 12(1) [para. 12].

Patent Act Regulations (Can.), Patented Medicines (Notice of Compliance) Regulations, SOR/93-133, sect. 5(1), sect. 5(2) [paras. 16, 116]; sect. 6 [paras. 47, 120]; sect. 7(1) [para. 16].

War Measures Act, 1914, S.C. 1914, c. 2, generally [para. 11].

Authors and Works Noticed:

Côté, Pierre-André, Interpretation of Leg­islation in Canada (2nd Ed. 1992), pp. 94 [para. 61, footnote 7]; 143 [para. 97]; 149 to 150 [para. 92]; 152 [para. 125].

de Smith, S.A., Judicial Review of Ad­ministrative Action (4th Ed. 1980), p. 558 [para. 98].

Evans, Janisch Mullan et al., Administra­tive Law: Cases, Text and Materials (3rd Ed. 1989), p. 1083 [para. 95].

Halsbury's Laws of England (4th Ed. 1976), vol. 1(1), Administrative Law, para. 130 [para. 100, footnote 12].

MacDonald, R.A., and M. Paskell-Mede, Annual Survey of Canadian Law - Ad­ministrative Law (1981), 13 Ottawa L. Rev. 671, p. 720 [para. 65].

Makuch, Stanley, Canadian Municipal and Planning Law (1983), pp. 251 to 261 [para. 113].

Mercer, Peter P., Case Annotation (1983), 3 Admin. L.R. 247, pp. 248 to 251, [para. 78, footnote 10].

Wade, H.W.R., Administrative Law (6th Ed. 1988), p. 709 [para. 98].

Counsel:

W. Ian C. Binnie, Q.C., and William H. Richardson, for the appellants;

Harry Radomski and Richard Naiberg, for the respondent Apotex Inc.;

H. Lorne Murphy, Q.C., and Steve Tenai, for the respondent Attorney General of Canada and the Minister of National Health & Welfare.

Solicitors of Record:

McCarthy Tétrault, Toronto, Ontario, for the appellants;

Goodman & Goodman, Toronto, Ontario, for the respondent Apotex Inc.;

John C. Tait, Q.C., Deputy Attorney Gen­eral of Canada, Ottawa, Ontario, for the respondent Attorney General of Canada and the Minister of National Health and Welfare.

This appeal and cross-appeal were heard in Ottawa, Ontario, on August 31 and Sep­tember 1, 1993, by Mahoney, Robertson and McDonald, JJ.A., of the Federal Court of Appeal.

The decision of the Court of Appeal was delivered by Robertson, J.A., in Ottawa, Ontario, on October 22, 1993.