Can a Product Monograph Induce Infringement?

Apotex Inc v Nycomed Canada Inc / pantropazole 2011 FC 1441 Simpson J

In this decision Simpson J upheld a decision of Prothonotary Milczynski refusing to allow Nycomed to amend its counterclaim against two generics to allege contributory infringement “distinct from the ‘but for’ allegation of inducement” [2]. The patent at issue is for a combination of pantoprazole with a heliobacter inhibiting anti-microbial agent. The generics wish to sell generic pantoprazole. Nycomed wanted to allege that the generics contributed to infringing activities of third parties (such as physicians prescribing the combination) “through its product monograph, website and its marketing strategies to physicians and pharmacists” [2]. Nycomed acknowledged that the generics’ actions were not the “sole cause” of the infringing use [2]. This is presumably because the combination of an antibiotic with a proton pump inhibitor (PPI), such as pantoprazole, is now the “gold standard” for the treatment of ulcers caused by H pylori (see 2006 FC 1411 at [30]), so it is very likely that substantial infringement would occur regardless of the generics’ marketing. Simpson J refused to allow Nycomed to amend, on the basis that “contributory inducement is not a reasonable cause of action” [21]. 

I suggest that the facts alleged do disclose a reasonable cause of action, as the general factual allegations are not materially different from those in Abbott Laboratories Ltd. v. Novopharm / lansoprazole (NOC) 2006 FC 1411, [40]-[42] aff’d 2007 FCA 251, [26], similarly involving a PPI, in which the FCA specifically affirmed von Finckenstein J’s holding that Novopharm’s product monograph constituted “an encouragement to infringe” that was sufficient to establish inducement. Whether Nycomed would ultimately succeed would of course depend on the specific facts, and certainly von Finckenstein J’s finding was at the limit of what has been found to constitute inducement in Canada. Indeed, the question of what constitutes the exact bounds of inducing infringement is a difficult question as a matter of policy, and it may be that it would be desirable to have a strict rule that the claim at issue cannot succeed. However, in light of the lansoprazole decision, it is difficult to see how it can be said that Nycomed has no prospect of success on the facts alleged. 

I suggest that two points account for Simpson J's decision in this motion. First, no reference was made to the lansoprazole decision, from which I would infer that it was not argued. Secondly, Nycomed explicitly acknowledged that it could not establish "but for" inducement, and argued instead that contributory infringement should be recognized as a cause of action. The alternative arguement, which was successful in the lansoprazole decision, was to argue that the "encouragement" offered by the generics amounted to inducement. 

The framing of the cause of action reflects an underlying substantive difficulty, which is that the standard test for inducement, set out most recently in Corlac v Weatherford 2011 FCA 228 at [162], states what is on its face a “but for” test for causation as its second prong. However, “but for” causation is rarely a bright line in reality, and the courts have not been entirely consistent in cases that are close to the line: the lansoprazole decision in one instance in which the FCA has been willing to stretch the concept of “but for” causation, and MacLennan v Gilbert Tech Inc. 2008 FCA 35 rev’g 2006 FC 1038, is another. I suggest that the “but for” test is itself problematic, and the concept of contributory infringement is in need of conceptual clarification – but that is a topic for another day.

No Disgorgement of Profits in Federal Court in an Action Based on Section 8

Apotex Inc v Eli Lilly Canada Inc 2011 FCA 358 Noël JA: Dawson, Trudel JJA aff’g Heneghan J (unreported) aff’g 2009 FC 693, Pr. Tabib & Milczynski Pr (unreported)

A generic that is successful in NOC proceedings is entitled to damages under section 8 of the NOC Regulations as compensation for its losses from having been kept out of the market as a consequence of the statutory stay. The question in this motion to strike paragraphs of the statement of claim is whether the generic can also obtain a disgorgement of the excess profits earned by the patentee during that period, in an action where the sole “wrongful” act alleged is invocation by the patentee of the NOC Regulations. The FCA has held unequivocally that “the answer to this question is no” [18]. Consequently, Apotex’s claim “cannot possibly succeed” [23].

CGPA Lack of Standing Affirmed

Canadian Generic Pharmaceutical Association v. Canada (Health) 2011 FCA 357 Dawson JA: Noël, Trudel JJA aff'g 2011 FC 465 de Montigny J affm'g 2010 FC 1211 Lafrenière Pr

The FCA has affirmed that the Canadian Generic Pharmaceutical Association does not have standing to challenge the listing of a particular drug on the Register of Innovative Drugs, saying, from the Bench, that there was no error in the decisions below. The decision of de Montigny J is blogged here.

Holidays

I'm off for a week. I will be back blogging at the end of next week.

Enantiomers Are Per Se Ineligible for Data Protection

Takeda Canada Inc. v Canada (Health) / DEXILANT 2011 FC 1444 Near J  

I believe this is only the second judicial decision interpreting “innovative drug” in the Data Protection Regulations, and the first to interpret what constitutes a “variant” that is excluded from protection. In the DEXILANT decision, Near J held that the listed examples of variants in the definition of “innovative drug”, namely salts, esters, enantiomers, solvates and polymorphs, are excluded per se, regardless of whether extensive and costly trials were required to obtain an NOC.

Trial Date Backlog

Teva Canada Limited v Wyeth LLC 2011 FC 1442 Hughes J

While probably not a surprise to those of you in litigation, this statement, from Hughes J’s decision declining to set a trial date pending appeal, caught my eye: “A second reason respecting the trial date is that consideration must be given to the pressures on this Court to find trial dates for other litigants in other cases. Even now, some litigants are not expecting trial dates until 2015" [4]. I noted a few weeks ago that we have recently seen substantive patent decisions from three judges who are new to the patent roster: Rennie J, Scott J and Crampton J (who has just been appointed Chief Justice). I wonder if this represents an attempt by the FC to deal with the backlog of patent cases?

Sask CA Disagrees with FCA on Irreparable Harm in Interlocutory Injunctions

Mosaic Potash Esterhazy Limited Partnership v Potash Corporation of Saskatchewan Inc, 2011 SKCA 120

It is very difficult to obtain an interlocutory injunction in a patent case in the Federal Court, as the FCA jurisprudence uses irreparable harm as a strict threshold, in the sense that the balance of convenience stage will not be reached if the applicant cannot established that it will suffer irreparable harm, and the standard for establishing such harm is high: the applicant must show it “will actually” suffer irreparable harm on the basis of evidence that is “clear and not speculative.” For a critical review of the FCA jurisprudence, see my article Interlocutory Injunctions and Irreparable Harm in the Federal Courts, (2009) 88(3) Can Bar Rev 515. While not a patent case, or even an intellectual property case, Mosaic v PCS is an important appellate decision which fully considers the principles applicable to the grant of an interlocutory injunction, including a review of the leading authorities, and establishes an approach which is directly contrary to that used by the FCA. While the FCA is of course not bound by the SaskCA, this thorough and fully reasoned decision from an appellate court may give the FCA cause to reconsider its position when the occasion arises.

FCA Clarifies PM(NOC) Transitional Provisions

Merck Frosst Canada & Co v Apotex Inc / norflaxin (NOC) 2011 FCA 329 Stratas JA: Layden-Stevenson, Sexton JJA aff’g 2010 FC 287 O'Reilly J

Section 8 of the PM(NOC) Regulations, provides for compensation to a generic that has been denied entry as a result of a statutory stay. It was notoriously obscure as enacted in 1993 [59], and was amended in 1998. The transitional provision says that the 1998 version applies to an application that is “pending” when the 1998 Regulations came into force (March 11, 1998). The FCA has now clarified that an application is pending, and so the 1998 Regulations apply, when a final decision of the applications judge is under appeal: “the correct test for determining whether an application is “pending” is whether the application remains alive either at first instance, or on appeal” [17]. This effectively overrules the decision of Snider J in 2010 FC 1264 (blogged here), but I won’t go into the merits of the decision on this point. There were respectable arguments to be made on both sides as to the interpretation of “pending,” and what is important is that the FCA has given a clear and definitive answer.

The FCA also strongly implied that the whole debate was pointless, as the effect of the 1998 Regulations was to clarify rather than to change the law as intended under the 1993 Regulations. Merck had argued that if the 1998 Regulations applied, they were invalid as not being authorized by the enabling statutory provision, as they would retroactive deprive Merck of its vested rights. The FCA rejected this argument for a variety of reasons, of which two are of particular interest. First, section 8 of the 1998 Regulations is “a largely clarifying provision or a provision that largely attempts to declare what the law has been, [and so] is not retroactive or retrospective, nor does it interfere with earlier vested rights” [49]. Secondly, the original provision in the 1993 Regulations was so impenetrably obscure that Merck could not possibly have acted in reliance on the rights defined by that provision, as it was inevitable that substantial clarification would be required, either by case law, or, as it happened, through legislative amendment [64]-[67].

The Significance of Motive in an Obviousness Analysis

Allergan Inc v Sandoz Canada Inc / combigan (NOC) 2011 FC 1316 Crampton J

As noted in yesterday’s day post, combigan is Allergan’s brand name for a composition of two active ingredients, brimonidine and timolol, for the treatment of glaucoma, which was claimed as such in patent 2,440,764. In a curious twist in the combigan case, the Allergan, the patentee, argued that there was no motivation to develop combigan because the FDA was generally reluctant to approve fixed combination drugs for the treatment of glaucoma because of the fear of a mid-afternoon “trough” in efficacy: [115], [62]. This is curious because this type of argument is more usually raised by the defendant, as a rebuttal to the question “If it was so obvious, why was it not done before?” The answer in this case, would be, “why do what was obvious when everyone knew the FDA would not approve it?”