Canada: Federal Court Permits Counterclaim As Of Right Against Non-Asserted Patent Claims In S. 6(1) PMNOC Actions

On February 17, 2023, the Federal Court ruled that Sandoz and Sun Pharma may counterclaim as of right against non-asserted patent claims in separate actions pursuant to the Patented Medicines (Notice of Compliance) Regulations (PMNOC Regulations): Boehringer Ingelheim v Sandoz; Boehringer Ingelheim v Sun Pharma, 2023 FC 241. However, the Plaintiffs may move to strike such counterclaims, including on the grounds that they may prejudice or delay the fair trial of the action, or are otherwise an abuse of process.

Boehringer Ingelheim (BI) commenced separate patent infringement actions against Sandoz and Sun Pharma pursuant to subsection 6(1) of the PMNOC Regulations relating to empagliflozin (BI's JARDIANCE). In each action, BI asserted infringement of a subset of claims of six patents. Sandoz and Sun Pharma defended and counterclaimed that all of the claims of the six patents, including the non-asserted claims, are invalid and not infringed.

BI moved for summary judgment to dismiss the counterclaims insofar as they assert the invalidity of non-asserted claims. BI argued that a defendant may counterclaim against a non-asserted claim in a subsection 6(1) action only with leave of the Court, citing paragraph 6(3)(a) of the PMNOC Regulations:

Justice Fothergill held that the question of law — whether the Defendants can counterclaim against the non-asserted claims without leave of the Court — was appropriate for adjudication by way of summary judgment.

In Janssen Inc v Apotex Inc, 2022 FCA 184, the Federal Court of Appeal (FCA) held that the PMNOC Regulations do not prohibit counterclaims against non-asserted claims in subsection 6(1) actions with leave of the Court. While the FCA left open the question of whether such challenge could be made "as of right," Fothergill J. held that the FCA's analysis "nevertheless provides considerable guidance in answering this question."

Justice Fothergill held that BI's argument based on paragraph 6(3)(a) of the PMNOC Regulations was very similar to the one advanced in Janssen and that the FCA had held that paragraph 6(3)(a) is permissive and "does not explicitly prohibit anything." Justice Fothergill held that the FCA's conclusion was binding on the Federal Court.

Justice Fothergill also noted that a plaintiff faced with a counterclaim such as the one at issue "may seek to strike the offending portions of the counterclaim, including on the grounds that they may prejudice or delay the fair trial of the action, or are otherwise an abuse of process. A case management judge is well-placed to decide such a motion following consideration of all relevant factors that prevail at the time the motion is brought."

BI has both appealed and sought leave to appeal to the FCA.

Should you have any questions, please do not hesitate to contact a member of the Pharmaceutical Litigation Group.

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