Pharmacapsules @ Gowlings: March 15, 2011

Edited by Jennifer Wilkie and Isabel Raasch

Contents

• Europe Wants Canada To Update Patent LawsRecent Cases
• Upcoming Trials, Judicial Reviews and Appeals of Interest
• Recent Resources of Interest on the Gowlings Website

Europe Wants Canada To Update Patent Laws
By John Normanand Esmaeil Mehrabi, Student-at-Law

Canada is currently negotiating a comprehensive economic trade agreement with the European Union to increase the volume of trade and business occurring between Canada and Europe. During these negotiations, the Europeans have asked Canada to update its intellectual property laws bringing them in line with those in Europe. This includes:

a) extending the term of patent protection for drugs that get mired down in the regulatory approval process;

b) increasing the term of data exclusivity from 8 to 10 years;

c) changing the notice of compliance regulations to permit innovators the right of appeal even if the generic manufacture obtains a notice of compliance.

These proposals are support by some Canadians who feel that Canada has lagged behind the rest of the world in updating patent laws resulting in a substantial lose of investment in the Canadian research and development sector. This, however, has been challenged by the organization that represents Canadian generic manufacturers who have commissioned a study that suggests updating Canada's patent laws will increase the cost of brand-name drugs in Canada. Supporters of the European trade agreement respond that the cost of brand drugs in Canada are very reasonable and until very recently Canada had some of the highest generic prices in the world.

For more information please refer to the following links:

http://www.theglobeandmail.com/life/health/eu-trade-deal-could-cost-canadian-drug-plans-billions/article1896747/

Recent Cases

Apotex v. BMS (2011 FCA 43), nefazodone, A-401-10 and A-486-10, January 31, 2011

The Court of Appeal reviewed two lower courts decisions (1) granting BMS's motion to strike certain portions of Apotex' pleadings regarding validity; and (2) granting Apotex last minute motion for leave to amend its pleadings to add new grounds for its claim that BMS' patent was invalid.  Writing for the Court, Justice Stratas disallowed the amendments and indicated that parties should be clear and candid at all times during litigation about what issues are fully in dispute, but especially at the pre-trial conference.  Because Apotex did not indicate that the issues it sought to add to the pleadings were at play in its pre-trial conference memorandum, it subsequent pleadings amendments were denied.  In discussing the policy reasoning behind his decision, Justice Stratas wrote:

[34] For roughly an entire decade, Apotex has conducted itself in a way that suggested that the issues of lack of sound prediction and the broad inutility of nefazodone and its salts were not real questions in controversy. If they were real questions in controversy, they would have been addressed meaningfully at least at some time, if not constantly, during this decade-long litigation. Instead, those questions were no part of the discoveries or the pre-trial memoranda. Now, only at this late date – years after the exchange of pre-trial memoranda – and without any significantly new developments in the litigation, Apotex seeks a further and better affidavit of documents from Bristol-Myers and embarks upon what the Prothonotary called a "fishing expedition" concerning "the length and breadth of the development of nefazodone." Finally, as the Prothonotary also found, even now on the eve of trial Apotex cannot articulate these supposedly "real questions in controversy" with acceptable particularity.

***

[37] Complex, high-stakes intellectual property proceedings are governed by procedural rules aimed at fairness, full and timely disclosure, and efficiency.  Purposeful, strategic conduct involving non-disclosure, non-clarification or inaction, as the Prothonotary and the Federal Court judge found here, disrespects these rules and their aims.  Those who disrespect the rules and their aims can hardly expect courts to smile upon them when they look for a favourable exercise of discretion under those rules. (emphasis added)

A copy of this decision may be found at the following link:

http://decisions.fca-caf.gc.ca/en/2011/2011fca34/2011fca34.html

BMS v. Apotex,  nefazodone, T-2078-00, February 21, 2011

In a motion regarding the order of the presentation of the evidence on a patent infringement action where the plaintiff is relying on the presumption of infringement under s. 55.1 of the Patent Act, Justice Crampton held that the most just and expeditious determination of the issues would take place if the defendant, Apotex, addressed the issue of whether its supplier(s) used a non-infringing process first through fact and expert evidence, and the plaintiff, BMS, then replied to any evidence adduced. 

This order of evidence would be consistent with the spirit of s. 55.1, and would be more logical than to require BMS to lead its evidence on the issue before Apotex. While the Court did not rule on the issue of whether the persuasive burden of proof under s. 55.1 remains with the plaintiff or shifts to the defendant, the Court did note that once s. 55.1 is engaged, the defendant has, at a minimum, the evidentiary burden to prove non-infringement, and that this is a significantly greater burden than simply having to adduce some evidence of non-infringement. 

A copy of this decision may be found at the following link:

http://www.gowlings.com/knowledgeCentre/enewsletters/pharmacapsules/pdfs/V10N01_recent2.pdf

BMS v. Apotex, nefazodone, T-2078-00, Date: February 21, 2011

On an appeal from an Order of Prothonotary Aronovitch whereby Apotex was denied leave to deliver sur-reply reports on infringement, Justice Crampton agreed that there was a sufficient basis upon which to deny Apotex leave to deliver the sur-reply reports.  In particular, Justice Crampton noted that the evidence in the proposed reports (1) should have been anticipated in Apotex' reports in-chief; (2) was either unresponsive to the BMS reports or repetitive of material in Apotex' reports-in-chief; and (3) was unlikely to be of assistance to the Court at trial.  Justice Crampton further noted his concern that if Apotex' approach was taken in cases where the defendant has been put on notice of the plaintiffs intention to rely on s. 55.1 of the Patent Act, the Court would have to be more receptive to allowing sur-reply reports than is currently contemplated by the Rules and the general jurisprudence. 

A copy of the decision is may be found at the following link:

http://decisions.fct-cf.gc.ca/en/2011/t-2078-00_33421/t-2078-00.html

Apotex v. BMS (2011 FCA 34), nefazodone, A-94-11 (T-2078-00), March 2, 2011

The Federal Court of Appeal summarily denied Apotex' motion to expedite its appeal of a decision of the Federal Court (February 21, 2011) denying Apotex leave to file sur-reply expert reports on infringement.  The factors considered by the Court of Appeal in denying Apotex' motion included that:  (1) Apotex took 7 days after filing its notice of appeal to file its motion to expedite; (2) it would be unfair to require BMS to respond in less time than it took Apotex to prepare its motion; and (3) Apotex could have brought the underlying sur-reply motion much earlier than it did. 

A copy of the decision is may be found at the following link:

http://www.gowlings.com/knowledgeCentre/enewsletters/pharmacapsules/pdfs/V10N01_recent4.pdf

GSK v. Pharmascience (2011 FC 239), rosiglitazone, T-1687-09, March 1, 2011

The Court granted an application for an Order of prohibition brought under the Patented Medicines (Notice of Compliance) Regulations regarding rosiglitazone.  Justice Hughes found that the allegations of invalidity made by Pharmascience against GSK's Canadian patent 1,328,452 were unjustified. 

With respect to obviousness, Justice Hughes noted that Pharmascience's allegations were not justified especially since the inventor's work, over the period of several years, was applauded by the scientific community, and since Pharmascience's expert's opinion was based on the impermissible application of hindsight.  Justice Hughes refused to consider additional obviousness arguments made by Pharmascience which were not raised in its NOA. 

With respect to utility and sound prediction, the Court found that the case was not one where the patentee was relying on a sound prediction, but a demonstration of utility.  In this regard, Justice Hughes pointed out that there is no requirement for a patent to demonstrate utility in the disclosure so long as the Court finds it to be proven when challenged in Court.  In addition, Justice Hughes stated that utility is to be determined on the basis of what was done by the inventors prior to the filing date as compared to the utility as promised in the patent. Because the '452 patent promised that rosiglitazone was of potential use in the treatment of hypoglycaemia, all that GSK had to prove was that the animal data available at the time of filing established such a potential.  GSK did not have to show that the data supported that rosiglitazone will work in the treatment of hypoglycaemia since that is not what the patent promised.

A copy of this decision may be found at the following link:

http://decisions.fct-cf.gc.ca/en/2011/2011fc239/2011fc239.html

Shire Canada Inc. v. Apotex Inc. (2011 FCA 10), modafinil, A- 390-10, January 12, 2011

Sharlow J.A. dismissed Shire's motion to determine the contents of an appeal book and to adduce new evidence on appeal.  The decision under appeal concerned an amendment to Shire's statement of defence wherein Shire sought to include a defence of infringement to Apotex's statutory claim for section 8 damages under the Patented Medicines (Notice of Compliance) Regulations.  The proposed amendment did not allege infringement directly, however it relied on the outcome of the patentee's concurrent infringement action.  In the decision below, the trial judge abandoned the Prothonotary's ruling that the pleading was speculative and hypothetical and held that it disclosed no reasonable cause of action or defence.

At issue before Sharlow J.A. was the inclusion of eleven contentious documents in the appeal book.  Ten of the eleven documents constituted evidence of infringement that was served on Shire as part of the patentee's motion to consolidate the two proceedings, after the decisions under appeal were rendered.  Shire submitted that the evidence of infringement may have influenced the decisions below as it demonstrates that a ruling of infringement is not beyond doubt, certain to fail.

Sharlow J.A. acknowledged that the ten documents showing infringement were not in existence at the time the decisions under appeal were rendered however, she held that there was no basis to conclude that Shire could not have conducted its own tests to show that Apotex infringed the patent notwithstanding that Shire's proposed defence relied on the patentee's infringement action.  Ultimately, none of the contentious documents were allowed to be included.

A copy of this decision may be found at the following link:

http://decisions.fca-caf.gc.ca/en/2011/2011fca10/2011fca10.html

Apotex Inc.. v. H. Lundbeck A/S (2011 FC 88), citalopram, T-575-04, January 26, 2011

In an action for patent infringement and under s. 8 of the Patented Medicines (Notice of Compliance) Regulations regarding citalopram, Prothonotary Tabib granted Lundeck's request for letters rogatory with respect of Matrix Laboratories Ltd. (Apotex' manufacturer) in India and denied Apotex' request for letters rogatory with respect of Dr. Adlington (a chemistry professor who visited Matrix in the context of European proceedings between Lundbeck and another generic manufacturer) in the U.K.

In her decision, Prothonotary Tabib noted that relevant factors on the issue were: (a)  Matrix had not provided manufacturing documents sought by Lundbeck; (b) Apotex reported to the Court that Matrix had destroyed all batch production records for the citalopram it manufactured for Apotex prior to 2005, pursuant to its document control policy; and (c) Apotex and Matrix confirm that a Matrix representative would give oral evidence at trial regarding the manufacturing process used between 2001 and 2004.  In view of these factors, Prothonotary Tabib held that "it seems to be well within the powers of a case management Judge to order Apotex to disclose the precise identity of the representative or representatives of Matrix whom it intends or expects to call at trial to ensure that Lundbeck will be allowed to question on discovery the very same person or persons."

In denying Apotex' request for the discovery of Dr. Adlington, Prothonotary Tabib noted that such discovery was not warranted because (a) much of Dr. Adlington's evidence might involve opinion testimony; and (b) Apotex had failed to show a good reason why Dr. Adlington cannot or will not attend trial in Canada.

A copy of this decision may be found at the following link:

http://decisions.fct-cf.gc.ca/en/2011/2011fc88/2011fc88.html

Upcoming Trials, Judicial Reviews and Appeals of Interest

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