In reasons dated March 21, 2016, the Federal Court of Canada
upheld a decision that allowed a patent infringement action
involving tenofovir (an anti-HIV drug) to continue on the basis of
allegations of a likely future (quia timet) infringement.
The Court was satisfied that there was a "strong possibility
of infringement" in circumstances where regulatory approval,
and future market presence, of the generic copycat was
"sufficiently likely" even though not inevitable that the
generic would receive marketing authorization.
This ruling was made despite other court rulings where similar
quia timet claims have been struck out (see for example
AstraZeneca Canada Inc., et al. v. Novopharm Limited, 2009 FC 1209, aff'd 2010 FCA 112). It strengthens patent
protection in Canada by allowing quia timet actions to
restrain future infringement. This is especially important in
circumstances where the apprehended infringement can have a drastic
and potentially irreversible market impact.
The decision (published as Gilead Sciences, Inc., et al. v.
Teva Canada Limited, 2016 FC 336) comes in the context of a motion
brought by Teva appealing a prothonotary's decision that
declined to strike out Gilead's claim in its entirety, thereby
allowing the action to continue on the basis of amended allegations
of a likely future infringement. The lower court referred to a
"strong possibility of infringement" after drawing an
inference that Teva's generic regulatory submission had been
approved by the Minister of Health and was on patent hold. On
appeal, the Court found that "[i]n a situation where the Teva
product has been contingently approved by the Minister and where
Teva has unequivocally stated that, on receipt of a NOC, it will
enter the market, the conclusion that a strong possibility of
infringement was present cannot be characterized as an error, let
alone a palpable and overriding error".
The decision also adds clarity in instances where generic
entrants are reticent to disclose their patent hold status
(i.e., whether they have received provisional approval).
In the right circumstance, courts will infer that a generic is on
patent hold despite the absence of direct evidence establishing
this to be the case.
A recent Saskatchewan Court of Queen's Bench decision allowed a court-appointed receiver to sell and transfer intellectual property rights free and clear of encumbrances, finding that a license to use improvements of an invention was a contractual interest and not a property interest.
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