Sanofi-Aventis Canada Inc. v. Hospira Healthcare Corp. et al., (2009) 358 F.T.R. 36 (FC)

• Judge: Zinn, J.
• Court: Federal Court (Canada)
• Case Date: October 22, 2009
• Jurisdiction: Canada (Federal)
• Citations: (2009), 358 F.T.R. 36 (FC);2009 FC 1077

Sanofi-Aventis Can. v. Hospira Healthcare (2009), 358 F.T.R. 36 (FC)

MLB headnote and full text

Temp. Cite: [2009] F.T.R. TBEd. NO.028

Sanofi-Aventis Canada Inc. (applicant) v. Hospira Healthcare Corporation and The Minister of Health (respondents)

(T-2080-07; 2009 FC 1077)

Indexed As: Sanofi-Aventis Canada Inc. v. Hospira Healthcare Corp. et al.

Federal Court

Zinn, J.

October 22, 2009.

Summary:

In its Notice of Allegation (NOA) dated October 15, 2007, Hospira Healthcare Corporation alleged non-infringement and invalidity against the subject patent marketed by Sanofi-Aventis Canada. On November 28, 2007, Sanofi filed a notice of disclaimer of part of its patent. On the next day, Sanofi applied for an order prohibiting the Minister of Health from issuing a Notice of Compliance to Hospira until after the expiration of the patent. The following issues arose: (1) whether the justification of the allegations were determined with reference to the claims of the patent as they read when the NOA was served or as they read as at the date of the hearing (after the disclaimer had been filed); (2) whether Hospira was estopped from arguing the invalidity of the disclaimer; (3) whether the disclaimer was valid; and (4) whether the allegations were justified.

The Federal Court dismissed the application, having found that the date to assess the allegations was as of the date of the hearing (justification of the allegations was to be determined based on the disclaimed patent), and having found that the disclaimer was invalid. In the event of an appeal, the court dealt with the remaining issues.

Courts - Topic 123

Stare decisis - Authority of judicial decisions - Courts of superior jurisdiction - Decisions binding on Federal Court of Canada - [See first Food and Drug Control - Topic 1108.2 ].

Estoppel - Topic 1030

Estoppel in pais (by conduct) - By agreement - Estoppel by convention - [See third Patents of Invention - Topic 1352 ].

Food and Drug Control - Topic 1105

Drugs - New drugs - Notice of compliance - Intervention on application for (incl. notice of allegation) - The Federal Court stated that "The NOA [Notice of Allegation] merely creates the cause of action and alerts the innovator to the basis on which the generic is alleging that it will not infringe its patent. The innovator has no basis to institute a proceeding against the generic prior to receiving the NOA ... If the generic were permitted to change its allegations or add new allegations after the innovator had commenced its application that would render an injustice to the innovator who has relied on the NOA in making an assessment as to whether or not to bring a prohibition application and if so, the scope thereof. However, it is the Notice of Application not the NOA that closely defines the issues in dispute. The Notice of Application deals with the allegations against the patent as it reads on the date when the application is filed with the Court. If the patent has been disclaimed prior to the application then it is the disclaimed patent that is under consideration against the allegations made ... In that application, if the generic challenges the bona fides of the disclaimer, the burden of proof is on the innovator to establish that the disclaimer is valid and proper" - See paragraphs 120 and 121.

Food and Drug Control - Topic 1108.2

Drugs - New drugs - Notice of compliance - Prohibition order (incl. compensation by first person) - After the Notice of Allegation was served on the applicant and prior to it filing this prohibition application, the applicant disclaimed the claims of the subject patent - Section 6(2) of the Notice of Compliance (NOC) Regulations required the court to issue a prohibition order if "it finds that none of those allegations is justified" - The respondent relied on three decisions (Fed. Ct.) which had held that a disclaimer filed after the NOA was served was ineffective - The Federal Court agreed with the applicant's submission that Merck Frosst Canada Inc. et al. v. Canada (1998, S.C.C.), which held that the relevant date for assessing the justification for a NOA was as at the date of hearing, was a binding authority - The fact that "Merck" did not deal with a situation where a disclaimer had been filed was not sufficient to distinguish it - "Merck" dealt with precisely the issue that the court must decide in an NOC proceeding - There was no principled basis to hold that a determination of the justification of the allegations should be made as of different dates depending on whether the allegation was one relating to invalidity or one relating to infringement - In the result, the court assessed the justification of the allegations on the basis of the disclaimed patent - See paragraphs 75 to 99.

Food and Drug Control - Topic 1108.2

Drugs - New drugs - Notice of compliance - Prohibition order (incl. compensation by first person) - After the Notice of Allegation was served on the applicant and prior to it filing this prohibition application, the applicant disclaimed the claims of the subject patent - An issue arose whether the justification of the allegations were determined with reference to the claims of the patent as they read when the Notice of Allegation (NOA) was served or as they read as at the date of the hearing - Merck Frosst Canada Inc. et al. v. Canada (1998, S.C.C.) held that the relevant date for assessing the justification for a NOA was as at the date of hearing - The respondent submitted that "Merck" was not binding in light of subsequent amendments to ss. 5(3) and (4) of the Notice of Compliance Regulations - The Federal Court held that neither amendment was in response to "Merck" - There was no reason to believe that the decision in "Merck" would have differed if the amendments had been in place at that time - The amendment to freeze the patent register supported the applicant's position that the date to determine the justification of the allegations was as of the date of the hearing: s. 5(4) dealt with events subsequent to the NOA - See paragraphs 97 to 102.

Food and Drug Control - Topic 1108.2

Drugs - New drugs - Notice of compliance - Prohibition order (incl. compensation by first person) - After the Notice of Allegation was served on the applicant and prior to it filing this prohibition application, the applicant disclaimed the claims of the subject patent - The Federal Court addressed the respondent's submission that it suffered some disadvantage because it acted upon the patent as it read at the time the Notice of Allegation was served - "If the first person is unable to prove the validity of its disclaimer, then the second person will realize a potential advantage as the first person can rely only on the patent as disclaimed. I agree with the comment of counsel for [the applicant] that having filed a disclaimer the patentee can not appropriately also rely on the patent as it read before the disclaimer. The filing of the disclaimer is an admission that the patent as filed was over broad and this admission is not effected by a subsequent finding that the disclaimer was not valid" - See paragraphs 110 and 111.

Food and Drug Control - Topic 1108.2

Drugs - New drugs - Notice of compliance - Prohibition order (incl. compensation by first person) - In an application for an order of prohibition under the Notice of Compliance (NOC) Regulations, where the patentee had filed a disclaimer after the Notice of Allegation was served, the Federal Court held that Merck Frosst Canada Inc. et al. v. Canada (1998, S.C.C.) was binding on the court on the question as to the relevant date for assessing the justification for an allegation; namely, it was to be assessed as of the date of the hearing - The court also rejected the generic's submission that assessing allegations against a disclaimed patent resulted in increased costs - "[P]ermitting a generic to obtain an NOC when the patent has been disclaimed does not meet the purpose of the NOC Regulations ... [D]etermining the proceeding on the basis of patent claims that have since been disclaimed and that are ineffective ... is a waste of the Court's and the parties' time and resources, particularly in light of the fact that the innovator can, and likely would, bring a subsequent action for infringement based on the disclaimed claim" - See paragraph 112.

Food and Drug Control - Topic 1108.2

Drugs - New drugs - Notice of compliance - Prohibition order (incl. compensation by first person) - After the Notice of Allegation was served on the applicant and prior to it filing this prohibition application, the applicant disclaimed the claims of the subject patent - Section 6 of the Notice of Compliance (NOC) Regulations stated that the court shall issue a prohibition order "in respect of a patent that is the subject of one or more allegations if it finds that none of those allegations is justified" - Section 5(3) of the Regulations stated that "a second person who makes an allegation under paragraph (1)(b) or (2)(b) shall ... [serve a notice of allegation and] ... include in the notice of allegation ... a detailed statement of the legal and factual basis for the allegation ..." - The Federal Court stated that it was clear that the "allegations" that were referenced throughout those provisions was the allegation made in ss. 5(1)(b) and 5(2)(b), and not the "detailed statement of the legal and factual basis for the allegation" described in s. 5(3) of the NOC Regulations - See paragraphs 115 to 119.

Patents of Invention - Topic 1352

Disclaimer - Filing of (incl. validity) - [See Food and Drug Control - Topic 1105 and first, third and fourth Food and Drug Control - Topic 1108.2 ].

Patents of Invention - Topic 1352

Disclaimer - Filing of (incl. validity) - The Federal Court addressed the generic's submission that if the court in an Notice of Compliance (NOC) proceeding were to focus on the patent as it read at the date of the hearing (rather than at the date the Notice of Allegation was served), then that would lead innovator companies to use disclaimers as a tactical defence to NOC applications - "[T]his concern overlooks the obvious, namely, that using a disclaimer in such a manner is an improper use of a disclaimer. A disclaimer is valid only when 'by mistake, accident or inadvertence' the original claims were deficient. Furthermore, s. 48(1) of the Patent Act, requires that there be no 'wilful intent to defraud or mislead the public' on the part of the person filing the disclaimer. It would appear, at first blush, that a patentee using the disclaimer provisions for the purposes of defeating a generic from entering the market could be said to be engaged in a wilful defrauding of the public" - See paragraphs 106 and 107.

Patents of Invention - Topic 1352

Disclaimer - Filing of (incl. validity) - After the Notice of Allegation was served on the applicant and prior to it filing this prohibition application, the applicant disclaimed the claims of the subject patent - The respondent did not challenge the validity of the disclaimer until after the completion of the submission and cross-examination of expert evidence - The Federal Court held that the respondent was not estopped from arguing invalidity of the disclaimer - Both parties appeared to have assumed that the disclaimer was valid and effective, until recently; both led evidence only on the claims as disclaimed; hence, step 1 of the estoppel by convention test was met - As for the second step, however, there was no evidence in the record that the applicant changed its legal position in reliance on the shared assumption - The respondent's evidence addressed the claims as disclaimed, in response to both the applicant's Notice of Application, as well as its expert evidence - "The party relying on estoppel by convention has the burden of proving detriment" - The applicant's evidence on that point was scant - Consequently, the third step of estoppel by convention was also not satisfied - See paragraphs 124 to 131.

Patents of Invention - Topic 1352

Disclaimer - Filing of (incl. validity) - The patentee filed a disclaimer after the Notice of Allegation was served - The next day, it brought a prohibition application - The generic submitted that the disclaimer was a deliberate litigation tactic "to preserve an NOC proceeding that was doomed to failure from the start" - The patentee submitted that there was a potential for a double patenting attack - The Federal Court stated that "In order to be a valid disclaimer under the Patent Act, the patentee must, at a minimum, unequivocally admit that the original specification is too broad ... At a minimum, there must be an admission by the relevant witness that the claim was too broad and then set out how this happened, to prove that it was by mistake, accident or inadvertence and with no wilful intent to defraud the public" - In this case, the patentee had failed to meet its burden of proof establishing that the disclaimer met the prerequisites of s. 48 of the Act - Accordingly, the court found that the disclaimer was invalid and the disclaimed patent could not be relied upon by the patentee - See paragraphs 132 to 153.

Patents of Invention - Topic 1352

Disclaimer - Filing of (incl. validity) - After the Notice of Allegation was served on the applicant and prior to it filing this prohibition application, the applicant disclaimed the claims of the subject patent - The Federal Court considered the import of s. 48(6) of the Patent Act which provided that "a patent shall, after disclaimer as provided in this section, be deemed to be valid ..." - The court stated that "All that subsection 48(6) ... provides is that the presumption of validity that every patent enjoys is not adversely affected by the disclaimer. The patent as disclaimed remains entitled to that presumption of validity. However, the section does not directly address whether the disclaimer itself is entitled to any presumption of validity and, in my view, there is no such presumption. If the validity of the disclaimer is not put in issue, then the patentee will have the benefit of subsection 48(6) as a defence to allegations of invalidity of the patent as disclaimed. However, if the validity of the disclaimer is raised, then the patentee must establish on the balance of probabilities that it is a valid disclaimer" - See paragraphs 141 and 142.

Cases Noticed:

Bristol-Myers Squibb Canada Co. et al. v. Apotex Inc. et al. (2009), 342 F.T.R. 161; 2009 FC 137, not folld. [para. 76].

Abbott Laboratories et al. v. Canada (Minister of Health) et al. (2009), 347 F.T.R. 159; 2009 FC 648, not folld. [para. 76].

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

Janssen-Ortho Inc. et al. v. Apotex Inc. et al. (2009), 353 F.T.R. 246; 2009 FC 650 (Protho.), affd. [2009] F.T.R. Uned. 470; 2009 FC 783, not folld. [para. 76].

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, folld. [para. 77].

Eli Lilly & Co. et al. v. Novopharm Ltd. et al., [1998] 2 S.C.R. 129; 227 N.R. 201, refd to. [para. 77].

Merck Frosst Canada Inc. et al. v. Canada (Minister of National Health and Welfare) et al. (1997), 132 F.T.R. 60 (T.D.), consd. [para. 77].

Canadian Celanese Ltd. v. BVD Co., [1939] 1 All E.R. 410 (P.C.), consd. [para. 80].

Searle (G.D.) & Co. et al. v. Merck & Co. et al. (2002), 219 F.T.R. 64; 20 C.P.R.(4th) 103 (T.D.), refd to. [para. 88].

Glaxo Group Ltd. et al. v. Canada (Minister of National Health and Welfare) et al. (1995), 103 F.T.R. 1; 64 C.P.R.(3d) 65 (T.D.), refd to. [para. 90].

Amalgamated Investment & Property Co. v. Texas Commerce International Bank Ltd., [1982] 1 Q.B. 84 (C.A.), refd to. [para. 124].

Ryan v. Moore et al. (2005), 334 N.R. 355; 247 Nfld. & P.E.I.R. 286; 735 A.P.R. 286; 2005 SCC 38, consd. [para. 124].

Minister of National Revenue v. Canderel Ltd., [1994] 1 F.C. 3; 157 N.R. 380 (F.C.A.), refd to. [para. 138].

Richards Packaging Inc. v. Canada (Attorney General) (2007), 305 F.T.R. 99; 2007 FC 11, affd. (2008), 371 N.R. 377; 2008 FCA 4, refd to. [para. 140].

Hershkovitz et al. v. Tyco Safety Products Canada Ltd. (2009), 341 F.T.R. 228; 2009 FC 256, refd to. [para. 141].

Whirlpool Corp. et al. v. Camco Inc. et al. (2000), 263 N.R. 88; 9 C.P.R.(4th) 129 (S.C.C.), refd to. [para. 144].

Eli Lilly Canada Inc. v. Apotex Inc. et al. (2009), 346 F.T.R. 78; 2009 FC 320, refd to. [para. 160].

Procter & Gamble Pharmaceuticals Canada Inc. et al. v. Canada (Minister of Health) et al. (2004), 328 N.R. 149; 2004 FCA 393, leave to appeal denied (2005), 341 N.R. 398 (S.C.C.), refd to. [para. 160].

Free World Trust v. Électro Santé Inc. et al. (2000), 263 N.R. 150; 2000 SCC 66, refd to. [para. 161].

Catnic Components Ltd. et al. v. Hill & Smith Ltd., [1982] R.P.C. 183 (H.L.), refd to. [para. 165].

Consolboard Inc. v. MacMillan Bloedel (Sask.) Ltd., [1981] 1 S.C.R. 504; 35 N.R. 390, refd to. [para. 165].

Shire Biochem Inc. et al. v. Canada (Minister of Health) et al. (2008), 328 F.T.R. 123; 2008 FC 538, refd to. [para. 172].

Pfizer Canada Inc. et al. v. Canada (Minister of Health) et al. (2008), 322 F.T.R. 86; 2008 FC 11, refd to. [para. 185].

Sanofi-Synthelabo Canada Inc. et al. v. Apotex Inc. et al. (2008), 381 N.R. 125; 2008 SCC 61, refd to. [para. 192].

Statutes Noticed:

Patent Act, R.S.C. 1985, c. P-4, sect. 28.2(1) [para. 190]; sect. 48 [para. 132]; sect. 48(6) [para. 142].

Patent Act Regulations (Can.), Patented Medicines (Notice of Compliance) Regulations, SOR/93-133, sect. 5(1)(b) [para. 117]; sect. 5(3), sect. 5(4) [para. 101]; sect. 6(2) [para. 75].

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

Counsel:

Anthony G. Creber and James E. Mills, for the applicant;

Warren Sprigings and George Murti, for the respondent, Hospira Healthcare Corporation.

Solicitors of Record :

Gowling Lafleur Henderson, LLP, Ottawa, Ontario, for the applicant;

Sprigings, Toronto, Ontario, for the respondent, Hospira Healthcare Corporation.

This application was heard on September 21-23, 2009, at Ottawa, Ontario, by Zinn, J., of the Federal Court, who delivered the following reasons for judgment and judgment, dated October 22, 2009.