Minister Intends Narrow Interpretation of CSP Regulations

ViiV Healthcare ULC v Canada (Health) 2020 FC 756 Fuhrer J

2,606,282 / JULUCA / dolutegravir and rilpivirine

In this judicial review of the Minister of Health’s decision denying ViiV’s application for a Certificate of Supplementary Protection (CSP) in respect of its 282 patent, Fuhrer J, applying reasonableness review [9], found the Minister’s approach to the interpretation of the relevant statutory provisions to be unreasonable. Fuhrer J’s legal analysis was straightforward: s 3 of the CETA Implementation Act provides that the regulations implementing the CSP regime must be interpreted harmoniously with CETA itself, but the Minister failed to consider CETA at all, relying instead on the RIAS for the CSP Regs and associated the Guidance Document, neither of which are law. This is the second decision relating to the new CSP regime, following Glaxosmithkline 2020 FC 397, and it is the second decision in which the Federal Court has found the Minister to have adopted an unreasonable interpretation of the relevant provisions: see here. Moreover, in this case the Minister has clearly signaled that she intends to interpret the CSP Regulations as restrictively as possible. Unfortunately, in light of these decisions, we cannot say that she intends to interpret them as restrictively as reasonably possible; it appears rather that the Minister intends to interpret the provisions as restrictively as the courts will allow. The CSP forecast is calling for a steady rain of judicial review applications.

ViiV’s application related to JULUCA, which is a combination of dolutegravir and rilpivirine (used in treating HIV/AIDS) [5]. Some of the claims of the 282 patent are directed to dolutegravir, but none is directed to rilpivirine. The Minister denied the application on the basis that in order to be eligible for a CSP under s 106 of the Act and CSP Reg 3(2), “where the approved drug contains a combination of medicinal ingredients, [an eligible] patent must include a claim for the combination of all the medicinal ingredients, a claim for the combination of all the medicinal ingredients as obtained by a specified process, or a claim for a use of the combination of all the medicinal ingredients” [14].

So, the Minister’s position is that for a combination drug, the patent must specifically claim the combination; it is not enough that selling the combination would infringe. The obvious question is whether that interpretation of the relevant statutory provisions is reasonable. But Fuhrer J didn’t find it necessary to address that question [6-7], because the Minister’s whole approach to interpreting the provisions was unreasonable.

Fuhrer J’s basic reasoning was straightforward. Section 3 of the CETA Implementation Act provides that:

any federal law that implements a provision of the Agreement or fulfils an obligation of the Government of Canada under the Agreement is to be interpreted in a manner consistent with the Agreement.

The CSP Regulations and relevant provisions of the Patent Act are clearly federal law that implements a provision of CETA. Yet the Minister never made any attempt to interpret the Regulations in a manner consistent with CETA. Indeed, the Minister never even cited CETA. The Minister referred only in passing to CETA, by quoting from the Objectives section of the RIAS for the CSP Regs – that is, the Minister did not even advert to the Objectives provision of CETA Art 20.1, much less the term extension provisions in Art 20.27 [16]. Nor did the Minister consider ViiV’s CETA submissions ([24], [26]). Instead, the Minister relied only on the CSP Regs RIAS and the associated Guidance Document ([15], [24], [26]), Neither of these are law. As the Policy on Regulatory Development explains, the RIAS is “an evidence-based, non-technical synthesis of expected impacts, positive and negative, of a proposed regulation,” that is published in the Canada Gazette with the text of the proposed regulation. It is “a useful tool to understand how regulations are intended to work,” but is “not determinative nor exhaustive of a regulation's purpose or interpretation”: Mounted Police Assn. of Ontario 2015 SCC 1 [113]; and see similarly Takeda 2013 FCA 13 [124]. The Guidance Document is another step down: it starts off by saying “Guidance documents are administrative instruments not having force of law.” It was the failure to consider CETA that rendered the decision-making process unreasonable [28].

In my view, Fuhrer J’s holding must be right. The CETA Implementation Act – which is Canadian legislation, and therefore directly binding – provides mandatorily that the CSP Regs must be interpreted harmoniously with CETA. That necessarily implies that the Minister must at least consider CETA, which the Minister failed to do. That is directly contrary to s 3 of the CETA Implementation Act.

There are two further points that are noteworthy, even remarkable. First, the Minister’s position was that her interpretation of the relevant provisions corresponded with Canada’s obligations, because CETA Art 20.2(2) provides that signatories are “free to determine the appropriate method of implementing the provisions of this Agreement within its own legal system and practice,” and that this permits Canada “to implement CETA in accordance with its own preferences” [21], [27]. In other words, if I understand correctly, the Minister’s position was that CETA Art 20.2(2) permits signatories to ignore the substantive CETA provisions when implementing CETA. While I haven’t reviewed the travaux préparatoires, this strikes me as far-fetched. The more obvious interpretation is that flexibility is permitted in terms of procedural and structural aspects of the implementation, to accommodate the diverse legal traditions of the signatory countries. On the same point, as Fuhrer J noted at [21], the Minister also relied on R v Hape, 2007 SCC 26 at [53]. Most of that paragraph reinforces what is express in s 3 of the CETA Implementation Act: “It is a well-established principle of statutory interpretation that legislation will be presumed to conform to international law. . . . [A]s a matter of law, courts will strive to avoid constructions of domestic law pursuant to which the state would be in violation of its international obligations.” The Minister was presumably relying on the last sentences of the paragraph: “The presumption is rebuttable, however. Parliamentary sovereignty requires courts to give effect to a statute that demonstrates an unequivocal legislative intent to default on an international obligation.” But to rebut the presumption the Minister would first have had to consider CETA, as part of an effort to first interpret the relevant provisions harmoniously, and then explain why a more limited interpretation was intended [27]. Rather than supporting the Minister’s position, Hape emphasizes how dramatically the Minister’s approach departs from accepted principles.

Secondly, and more importantly, in making the above argument the Minister argued that “the CSPR RIAS and Guidance Document demonstrate clearly that Canada intended to apply a narrow approach when implementing the CSP regime” [27]. Doctrinally, this is a bit beside the point. The legislative intent is revealed primarily in the legislation. As noted, the RIAS merely provides useful context. Whatever the RIAS might say, it can’t overrule the CSP Regs themselves, it can’t overrule the CETA Implementation Act s 3, and consequently it can’t relieve the Minister from the obligation of interpreting the legislation itself. The Minister’s position on this point is significant not for what it tells us about Canada’s intent in enacting the CSP regime, but for what it reveals about the Minister’s intent in implementing the CSP regime: this is an express statement that the current Minister intends to apply a narrow approach to implementing the CSP regime.

I would like to be able to say that the Minister intends to interpret the CSP Regulations as narrowly as reasonably possible. But in light of the Minister’s cavalier approach to the governing legislation, both in this case and in Glaxosmithkline, I’m afraid that might be too optimistic. In my post on Barnes J’s decision in Glaxosmithkline, I remarked that “I get the distinct impression that the Minister’s policy was developed by people who thought they already knew what the Act said, and so didn’t bother to actually read it, either before or after developing the policy.” I must say that after I posted that, I was worried that I had gone a bit overboard in my criticism. But perhaps I didn’t go far enough. The Minister in this case declined to consider CETA, even though both the common law and the implementing Act expressly commanded her to do so. It seems inconceivable that the Minister had simply overlooked s 3 of the CETA Implementation Act. It seems that it’s not that the people who developed the policy thought they already knew what the law said; rather, one has to suspect that they just don’t care. It seems that the Minister’s objective is to implement term extension provisions of CETA as narrowly as the courts will allow.

Recall that the underlying interpretation question in this case is whether, when the drug is a combination drug, the patent must specifically claim the combination to be eligible for the CSP. Fuhrer J did not make a determination as to the proper interpretation of the CSP Regulations on this point, but rather ordered the matter remitted to the Minister for redetermination with proper consideration of the CETA arguments. I have this funny feeling that the result will be the same and the application will be denied once again, and that we will see ViiV back on another judicial review application addressing the substantive question. With two unreasonable decisions in a row, plus an express commitment to a narrow interpretation of the CSP Regulations, my suspicion is that the interpretation of the CSP Regulations will have to be hashed out through a steady stream of judicial review applications. I hope to be proven wrong, but time will tell.