FCA Limits Scope of Dutch Industries and Declines to Invalidate Patent on the Basis of Administrative Non-Compliance with Patent Act in latanoprost s. 8 case

Pfizer Canada Inc. successfully resisted Apotex’s appeal of the Federal Court’s dismissal of Apotex’s motion for summary judgment for invalidity based on a failure to pay the correct “final fee” owing prior to patent grant. The Federal Court of Appeal upheld the lower court’s decision and held that alleged infringers of a patent cannot rely on administrative defects occurring prior to patent issuance to invalidate a patent post-issuance.

Pfizer was represented by Norton Rose Fulbright Canada LLP in this matter.

CaseApotex Inc v Pfizer Canada Inc et al, 2017 FCA 201 (Court File Nos. A-78-16)

Drug: XALATAN® (latanoprost)

Nature of case: Appeal from dismissal of motion for summary judgment to invalidate a patent

Successful party: Pfizer Canada Inc.

Date of decision: October 2, 2017

Background

As we reported, the Federal Court dismissed a motion for summary judgment brought by Apotex that sought to invalidate Canadian Patent No. 1,339,132 (the 132 Patent) in a section 8 action brought by Apotex, with a counterclaim for infringement by Pfizer. The Federal Court substantially relied on the Federal Court of Appeal’s decision in Corlac Inc v Weatherford Canada Inc, 2011 FCA 228 (Weatherford).

On appeal, the Federal Court of Appeal once again rejected Apotex’s arguments, finding they were unsupported by a purposive interpretation of the Patent Act informed by the case law and the evolution of the Patent Act.

Weatherford and Dutch Industries

The FCA in this case addressed two cases relied on by the parties: Weatherford, and Dutch Industries Ltd v Canada (Dutch Industries). It found that Dutch Industries was distinguishable, and agreed with the principles set out in Weatherford.

Dutch Industries was an application for judicial review, and the decision addressed whether or not the Commissioner of Patents had the authority to accept top-up payments for deficient fees in respect of both a patent application and an issued patent.

The court in Dutch Industries found that the commissioner had no discretion to accept top-up payments for deficient fees; however, Dutch Industries did not address the validity of the issued patent as the fees for the issued patent were held to have been made correctly. Further, Dutch Industries was not an action for infringement or impeachment of a patent, and as such the court did not consider whether section 59 provided a basis to void an issued patent on the basis of non-payment of application fees.

The FCA distinguished Dutch Industries as it did in Weatherford. It also reaffirmed the distinction between patent applications and issued patents, and agreed that Weatherford supported that non-compliance with section 73 of the Patent Act was not a basis to invalidate a subsequently issued patent. Rather, section 73 provides for certain requirements during the prosecution of a patent application and its effects are extinguished upon patent issuance.

History of the Patent Act

The court found that the history of the Patent Act sections at issue in the appeal (s. 27, 59, and 73) further supported that Parliament did not intend for all forms of non-compliance with the Patent Act to be a basis to invalidate an issued patent. In particular, the Patent Act uses explicit wording when it intends that matters relating to a patent application can void an issued patent. No comparable wording is found within section 73.

The court also found that both sections 27 and 59 have existed in the Patent Act in substantially the same form since 1869. Accordingly, the court felt bound by the long line of cases starting in 1927 that declined to invalidate patents for non-compliance with administrative requirements relating to the underlying patent applications. Further, the court was troubled by the disproportionate consequence of patent invalidity many years after a payment default of several hundred dollars. It confirmed that courts will apply the law even if it leads to absurd results, but only if it is impossible to interpret the law another way. The court found this not to be such an instance.

This decision confirms that non-compliance with administrative provisions of the Patent Act that do not underlie the heart of the patent bargain, cannot be relied upon by potential infringers as a basis to invalidate patents in the absence of express language to the contrary in the Patent Act.

Links to decisions:

Federal Court confirms innovator must be named as respondent when PM(NOC) Regulations engaged

The applicant brought a judicial review of Health Canada’s decision that its new drug submission triggered the PM(NOC) Regulations, and moved for a confidentiality order. The Federal Court has now upheld a decision requiring notice of the motion to another innovator company, confirming that the second innovator has a legal interest in the determination of the issue under review and must be notified.

Case:                                     Innovator Company v Canada (Attorney General), 2017 FC 864 (Court File No. T-485-17), affirming 2017 FC 548.

Nature of case:                   Appeal of a prothonotary’s decision denying a motion for a confidentiality order in the context of an application for judicial review of a decision from the Minister of Health pursuant to the Patented Medicines (Notice of Compliance) Regulations, SOR/93-133 (the Regulations).

Successful party:               Attorney General of Canada

Date of decision:                September 26, 2017

Background

The applicant’s new drug submission contains information that Health Canada determined makes a direct or indirect comparison to a product for which another innovator has patents listed on the Patent Register.  Health Canada therefore required the applicant to give notice to the other innovator pursuant to section 5 of the Regulations. The applicant disputed the necessity of giving such notice and filed for judicial review.

The applicant (identified only as “Innovator Company” in the decisions) moved for a confidentiality order in respect of its identity, the identity of the drug product, the contents of the submission to Health Canada, and any other information provided in support of the submission.  Innovator Company did not serve notice of the motion on the other innovator.

The Government of Canada responded that the other innovator was a necessary respondent to the application and the confidentiality order could not be granted without notice to the other innovator. As we reported, Prothonotary Tabib agreed, and adjourned the motion until Innovator Company had served notice on the other innovator.

Innovator Company appealed her decision.

Other innovator directly affected

The court rejected Innovator Company’s submission that the other innovator is not a person directly affected by its application for judicial review, unless and until the application failed. The court held instead that Health Canada’s decision that the Regulations are engaged conferred rights on the other innovator, making it a person affected and that there is no compelling reason why a patentee with listed patents should be required to await the issuance of market approval to a competitor before being able to address the issue in dispute in this judicial review.

The court also rejected the argument that alerting the other innovator, a known competitor, of the possible timing of market entry was business information that ought to be protected to prevent unfair commercial use.

The court therefore found that the prothonotary did not err and Innovator Company must serve notice on the other innovator before a confidentiality motion could be considered.

Link:

Innovator Company v Canada (Attorney General), 2017 FC 864

PMPRB applies unknown test against patentee to make excessive-pricing order outside of the Guidelines

The Patented Medicine Prices Review Board (PMPRB) has issued an excessive-pricing order against Alexion Pharmaceuticals Inc. (Alexion) in respect of SOLIRIS (eculizumab) based on the application of a Lowest International Price Comparison (LIPC) test. In public reasons issued September 27, 2017, the PMPRB ordered Alexion to (i) repay excess revenues to the Crown from the date of introduction through the date of the decision and (ii) lower its prices to match the lowest international price going forward.

Background

Alexion has marketed SOLIRIS in Canada since June 2009. SOLIRIS is indicated for the treatment of paroxysmal nocturnal haemoglobinuria (PNH) and atypical haemolytic uremic syndrome (aHUS). The Board described SOLIRIS as a “breakthrough drug”, with no other medicines in the same therapeutic class.

The PMPRB first advised Alexion that it was investigating the price of SOLIRIS in June 2010. In January 2015 Board Staff filed a Statement of Allegation that the price of SOLIRIS was excessive between 2012 and 2014. These allegations were later amended to include the entire period since launch and the application of the LIPC test. All of the “International Price Comparison” tests are based upon the seven countries listed in the schedule to the Patented Medicines Regulations, i.e., France, Germany, Italy, Sweden, Switzerland, the U.K., and the U.S. As we reported, Health Canada has proposed changes to this list that include removing the U.S. and adding several additional countries.

As we reported, Alexion’s application for judicial review of the decision to allow these amendments was unsuccessful.

As we also reported, Alexion has also applied for a declaration that several of the PMPRB’s enabling provisions in the Patent Act are ultra vires and an order prohibiting the PMPRB from proceeding with the hearing in respect of SOLIRIS. An Order striking Alexion’s application is currently under appeal.

Deviating from the Guidelines: The LIPC Test

The PMPRB’s holding in this case turned on its decision to deviate from the price tests contained in the Compendium of Policies, Guidelines, and Procedures (the Guidelines) and apply the LIPC test. Although this test is not contained in the Guidelines, the PMPRB found that its overriding obligation was to apply a reasonable interpretation of the excessive-pricing factors in subsection 85(1) of the Patent Act to SOLIRIS. On the facts of this case, the PMPRB concluded that this could not be achieved with the Highest or Median International Price Comparison tests (HIPC and MIPC, respectively).

The PMPRB’s decision to apply the LIPC test was based on evidence that it can be assumed Alexion was covering its costs and earning a normal rate of return in the U.K., the country which had the lowest international price. The PMPRB found that given the evidence it heard regarding the significant impact SOLIRIS has on the provincial health-care budgets, there was no reason for Canadians not to benefit from the same price offered to purchasers in the U.K.

For the purpose of applying the LIPC, the PMPRB compared the publically-available ex-factory price of SOLIRIS in each jurisdiction, without regard to discounts or rebates. Although Alexion argued that this factor was unreliable and should be given less weight because it is not based on a comparison of actual prices, the PMPRB held that its methodology was a proper implementation of paragraph 85(1)(c) of the Patent Act.

The PMPRB also rejected Alexion’s argument that its prices were only excessive because of fluctuations in the foreign exchange rate, a factor outside its control for which it said it should not be held responsible. The PMPRB disagreed, holding that the Guidelines properly require patentees to bear the risk of currency fluctuations and provide a mechanism to account for excess revenues resulting therefrom. It held that Alexion bears the responsibility of having failed to do so.

The PMPRB’s order

Although the PMPRB based its excessive-pricing finding on an application of the LIPC test, it did not actually order Alexion to repay excess revenues based upon that test. Rather, the PMPRB ordered Alexion to make payment to the Crown in an amount to be calculated based on the HIPC test. However, it also ordered that the price of SOLIRIS be reduced to the LIPC going forward.

Alexion argued that the excess revenues it was said to have earned were completely offset by four factors, each of which was rejected by the PMPRB:

  • Rebates under product-listing agreements (PLAs). On the facts and evidence of this case, the PMPRB determined that rebates paid to certain provinces under PLAs were not reportable. Notably, as we reported, Health Canada has proposed that the Patented Medicines Regulations possibly be amended to require reporting of third-party rebates, including under PLAs.
  • Credit notes to wholesaler. Alexion argued that it issued credit notes to Innomar, its wholesaler and only “customer” in Canada. The PMPRB rejected these rebates on the basis that Alexion failed to meet its evidentiary burden.
  • Infusion costs included in price. Alexion argued that its contract with Innomar included infusion costs for SOLIRIS. The PMPRB found that Alexion also failed to meet its evidentiary burden on this issue.
  • CPI adjustments foregone. Alexion argued that since it has never increased the list price of SOLIRIS in Canada, the real price had in fact decreased due to changes in the CPI. The PMPRB disregarded this argument, among other reasons because it incorrectly assumed that Alexion would have been permitted to take CPI increases.

The PMPRB’s order requires the parties to submit their calculations of the amount of excess revenues owed to the Crown by October 20, 2017.

It has been reported that Alexion intends to seek judicial review of this decision.

Links

The PMPRB’s decision on the merits can be found here.

Ontario introduces legislation requiring disclosure of payments to physicians

Following a consultation, legislation was introduced in the Ontario Legislature on September 27, 2017 that will require pharmaceutical and medical device manufacturers to disclose financial relationships to healthcare professionals and organizations.

The Health Sector Payment Transparency Act is one of several acts introduced by Bill 160. It will require manufacturers to periodically disclose details about transfers of value, both monetary and non-monetary, including the names of the parties to the transaction, a description of the transfer, and a dollar value for the transfer.  Many of the details, including the frequency and method of reporting are to be prescribed by regulation.

The Act, if passed, will come into force on a date to be set by proclamation.

Links:

Bill 160, Strengthening Quality and Accountability for Patients Act, 2017

Federal Court releases new guidelines for prohibition actions under the amended Patented Medicines (Notice of Compliance) Regulations

As we reported, amendments to the Patented Medicines (Notice of Compliance) Regulations (the Regulations) took effect on September 21, 2017, as part of the broader roll-out of measures implementing the Comprehensive Economic and Trade Agreement (CETA) with the European Union. The amendments introduce significant changes to proceedings under the Regulations, which will now proceed by way of action rather than application.

The Federal Court has now released a Notice to the Parties and the Profession setting out guidelines (the Guidelines) for actions under the amended Regulations. The new Guidelines supersede the court’s earlier Case Management Guidelines for NOC Applications for applications under the new Regulations.

Streamlined process with co-operation expected

The Guidelines confirm that the Federal Court will manage prohibition actions under section 6 of the amended Regulations using a modified version of the rules governing actions.

At the outset of proceedings, parties will be required to make a number of elections. In a letter to be filed with the statement of claim, plaintiffs must indicate whether they renounce the statutory stay. Within 10 days, defendants must serve and file a Notice of Intention to Respond indicating whether they intend to defend by challenging the validity of any of the claims and whether they intend to counterclaim regarding validity. Where invalidity is asserted, defendants must also indicate whether or not they will seek a declaration of invalidity and impeachment.

The Guidelines also make clear that the Federal Court intends these proceedings to move quickly through the court: Trials are to be completed no later than 21 months from the date the action commenced, and are expected to take no more than two weeks. The court also expects parties to “reasonably cooperate and agree on expediting pre-trial procedures.”

Expedited timelines are set out in the Guidelines for case-management and trial-management conferences. In addition, appeals of interlocutory decisions of prothonotaries and judges must now be made directly to the Federal Court of Appeal, and require leave of that court.

Several steps that will streamline the proceeding and limit the evidence required at trial are also set out in the Guidelines, including the exchange of claim charts and discovery plans, pre-trial tutorials for the court, evidence-in-chief to be adduced by way of affidavit, and detailed advance statements for fact witnesses. The court is also encouraging parties to use requests to admit and stipulations to limit the trial time needed for viva voce evidence.

Links

  • The Notice to the Parties and the Profession: Guidelines for Actions Under the Amended PMNOC Regulations can be found here.

Update on utility and the impact of the SCC decision in NEXIUM case

The impact of the Supreme Court’s landmark ruling in AstraZeneca Canada Inc. v Apotex Inc., 2017 SCC 36 (NEXIUM decision) rejecting the “Promise Doctrine” is taking shape in the Federal Court. As we reported, the SCC held that the level of utility required of a Canadian patent is driven by the claims of the patent rather than the description, reversing years of jurisprudence. Recent decisions from the Federal Court of Appeal and the Federal Court have applied the NEXIUM decision. In addition, Apotex has brought a motion to the SCC to have certain issues remanded back to both the Federal Court of Appeal (FCA) and the Federal Court (FC).

FCA reverses lower court decision on utility in dasatinib case

As we reported, in a decision rendered before the NEXIUM decision, the FC dismissed Bristol-Myers Squibb’s (BMS) prohibition application relating to SPRYCEL® (dasatinib), finding that one of the patents had an overarching promise and lacked utility, and the other patent was “obvious to try.”

Post-NEXIUM, the FCA rejected the FC construction of an overarching promise for enzyme inhibition and therapeutic use. Applying the “fundamentally recast” approach to utility set out in the NEXIUM decision for the first time, the FCA first determined that the subject matter of the claim at issue – a “bare composition claim for dasatinib” – is the compound claimed, dasatinib. The FCA rejected Apotex’s assertion that the subject matter  of the claim was “potential therapeutic uses for dasatinib,” as it would be an error to expand the subject matter beyond what the claim states.

The FCA then determined that, as of the filing date, BMS has demonstrated that dasatinib inhibited certain enzymes. This inhibition was referred to in the patent and confirmed by the evidence, and is “doubtlessly a useful discovery.”

The FCA therefore allowed BMS’s appeal relating to this patent and issued a prohibition order. The FCA upheld the lower court’s decision on obviousness relating to the other patent.

Prothonotary rules on pleadings amendments allegedly made in light of NEXIUM decision

In an action relating to lisdexamfetamine dimesylate, Apotex’s statement of claim in this action was filed before the NEXIUM decision and contained “extensive” allegations of inutility. Following the NEXIUM decision, Apotex moved to amend its claim on the basis of NEXIUM and Shire moved to strike all of Apotex’s allegations of inutility.

Prothonotary Tabib described Apotex’s amendments as “slipshod, inconsistent and confusing,” reflecting Apotex’s “refusal to come to terms with and embrace” the essence of the NEXIUM decision and a “fairly desperate attempt to shoehorn Apotex’s promise allegations into each and every ground of invalidity known to law.” However, she allowed many of the amendments, as they were merely a recasting of the existing allegations and did not introduce new facts.

Prothonotary Tabib did not allow Apotex’s amendments relating to s. 53 of the Patent Act. Section 53 allegations amount to an allegation of fraud and state of mind, and require full particulars. She inferred that Apotex had no reasonable basis for the allegations, as it had failed to plead any facts about “any particular state of mind or knowledge in any particular persons at any particular time,” and that is was therefore not in the interests of justice to allow these amendments.

Apotex brings motion to amend and remand in NEXIUM case

On August 29, 2017, Apotex brought a motion to the SCC to have the NEXIUM case remanded back to the FC to determine whether the “unfulfilled promises” found by the trial judge render the 653 patent invalid on the basis of insufficient disclosure, overbreadth and wilful misleading. Apotex claims that this is necessary as no court has ever considered the “promise” of improved therapeutic properties on any of these grounds.

Apotex has also asked for the case to be remanded back to the FCA on the issues of anticipation and obviousness, as the FCA did not consider these issues.

Links:

Bristol-Myers Squibb Canada Co. v Apotex Inc., 2017 FCA 190

Apotex Inc. v Shire LLC et al, 2017 FC 831

CETA tracker: CETA implemented September 21

Final CETA regulations impacting pharmaceuticals come into force

Canadian and European Union leaders signed the Comprehensive Economic and Trade Agreement (CETA) on October 30, 2016. As we reported, the Canada–European Union Comprehensive Economic and Trade Agreement Implementation Act (CETA Act) and accompanying regulations provide key reforms to the Patent Act affecting the pharmaceutical industry, including a single-track pharmaceutical patent litigation regime under the Patented Medicines (Notice of Compliance) Regulations (PM(NOC)) and up to two years of patent term restoration for patented pharmaceuticals under the Certificate of Supplementary Protection Regulations (CSP).

The CETA Act and the new regulations are now in force.

PM(NOC) Regulations

The new PM(NOC) Regulations apply to matters where the generic’s notice of allegation is served on or after September 21, 2017.

Health Canada has published a Notice relating to the new PM(NOC) Regulations pending an update of its Guidance Document on same.

Certificate of Supplementary Protection Regulations

Certificates of supplementary protection (CSP) are also now available for patents relating to drugs with a notice of compliance issued on or after September 21, 2017, provided all other eligibility requirements are met.

Health Canada has now provided Notice of an online Register of Certificates of Supplementary Protection and Applications and the CSP application form. Health Canada has also published a Guidance Document on the CSP Regulations and information on fee payment (here and here).

Summary of the new regimes

For a summary of the new regimes, see below.

Single Track Patent Litigation

The government has stated that replacing the current summary proceedings under the PM(NOC) Regulations with full actions (resulting in final determinations of patent infringement and validity) will provide all litigants with “equivalent and effective” rights of appeal and allow “for more robust scrutiny of issues and greater overall efficiency”  and “greater legal and market certainty.”

Key aspects of the new PM(NOC) Regulations include:

  • Patent Register. Patent list eligibility criteria are unchanged. The Minister of Health (Minister), however, is required to add and delete patents from the register, in certain circumstances. Discretionary reviews of the register to assess eligibility are also permitted, upon notice to patentees.
  • Generic Notice of Allegation.The NOA must address each claim of the listed patent. Patent list ineligibility may be addressed in the NOA, but can no longer result in dismissal of the proceeding. The NOA is still required to be a detailed legal and factual basis of the invalidity allegation, but the generic/second person is no longer bound by it since the action will be governed by pleadings.
  • New Production Obligations. Generics are now required to serve relevant ANDS information and prior art with the NOA. Generics may also request in the NOA that innovators provide: (i) inventor contact information; and (ii) “any laboratory notebook, research report or other document that may be relevant to determine whether a particular property, advantage, or use asserted by the second person to be part of the invention was established as of the filing date of the application for the patent” (i.e., invention information). The generic must make specific allegations on the latter, including by identifying the relevant portions of the patent. Innovators must either serve the requested information upon commencing the action or advise of steps taken to respond.  Litigants may each impose reasonable confidentiality terms on their respective production obligations, subject to review by motion or the Federal Court.
  • The Proceeding.A first person still has 45 days to start what will now be an action seeking a declaration of infringement in response to an NOA. However, the first person can now assert all claims of any listed patent and the court may order any remedy at law or equity. Like any other action, the proceeding will include full pleadings, discovery and viva voce evidence at trial. The Minister is no longer a party to the proceeding. Parties have a duty to act diligently and reasonably cooperate.

Where a first person/patentee, having received an NOA, does not start a proceeding within 45 days, they are thereafter prohibited from bringing a subsequent infringement action against the second person, unless they can later establish they lacked a “reasonable basis” for bringing the action at the time.

The statutory stay prohibiting generic market entry remains capped at 24 months, despite the adoption of more procedural complexity by way of action. Key differences between the current and new regimes are: (i) the first person now has the ability to renounce the stay at the outset (thereby opting out of s. 8 liability); (ii) the stay will be lifted for ineligible patents, but the action itself will not be dismissed on this basis; and (iii) the stay may no longer be shortened or extended on the consent of the parties.

  • Motions. Motion rights are provided: (i) for litigants to compel ANDS/ “invention information”; (ii) for litigants on confidentiality of ANDS/“invention information”; (iii) for generics to challenge patent/CSP eligibility for listing on the Patent Register (whereby the Minister will have automatic rights to intervene); (iv) for generics to seek to dismiss action in whole/part for abuse of process (however parties also retain access to Rule 221 motions to strike). Leave to appeal interlocutory orders may be sought with leave to the Federal Court of Appeal in accordance with the Federal Courts Rules.
  • Section 8. Generics maintain a right of action under section 8, but under new parameters. The innovator’s liability start date is now stated as the later of (i) date of NOA service; or (ii) date of generic approvability (i.e., “patent hold” date). Start date also remains subject to the court’s discretion. The innovator’s liability end date is no longer stated as “any loss suffered during the period”, but to “any loss suffered after” the start date.  The Regulatory Impact Analysis Statement (RIAS) states that generics may “seek compensation for any loss suffered as a result of delayed market entry after the date specified in the proposed Regulations. It would be left to the Court to determine whether the loss is properly recoverable.” Joint and several liability of defendants is also provided for.
  • Related rights of action.Innovators also have a new right of action to assert unlisted patents based on NOA service (i.e., quia timet). However, such an action cannot be joined to a listed patent proceeding under the PM(NOC) Regulations until the 24-month stay expires. Generics, having filed an ANDS, are also deemed an “interested person” for purposes of a related patent invalidity action.
  • The new PM(NOC) Regulationswill apply immediately to any matters for which an NOA is served on or after the coming into force date (September 21, 2017). The current summary regime will continue to apply to any matter that relates to an NOA served before the coming into force date.

Certificates of Supplementary Protection

As stated in the RIAS, the protection given under a CSP is intended to “partly compensate for time spent in research and obtaining marketing authorization.” A CSP provides “patent-like rights” that take effect after patent expiry, and is subject to the “same limitations and exceptions” as the patent. Like a patent, a CSP is subject to the jurisdiction of the Patented Medicine Prices Review Board and can be listed on the Patent Register, as well as on the CSP Register.

Many CSP regime details are set out in the CETA Act, including the following:

  • Applicability. Only new drugs issued Notices of Compliance (NOC) after the CETA Act is in force (September 21, 2017) can be CSP-eligible.
  • Term. The term of the CSP will be calculated as the difference between the filing date of the patent application and the date of NOC issuance, minus five years, capped at a maximum of two years.
  • Different Medicinal Ingredients. Medicinal ingredients for human use will be treated as “different” medicinal ingredients eligible for CSP than when approved for veterinary uses. A first approval of a combination of medicinal ingredients will be treated as a “different” medicinal ingredient eligible for CSP.
  • Actions for infringement and impeachment of a CSP. Actions may be brought in the same manner as an action for the infringement or impeachment of a patent.
  • Export exemption. It is not an infringement of a CSP to make, construct, use or sell for the purpose of export from Canada.

Additional details relating to CSP eligibility are provided in the CSP Regulations.

  • Timing of CSP application. CSP applications must be filed before the end of 120 days, which begins on (a) the day the NOC is issued, if the patent is granted on or before that day; or (b) if the patent is granted after the day on which the NOC is issued, the day on which the patent is granted. CSP applications are subject to a fee of $9,011.00 CAD.
  • Same Medicinal Ingredients. Esters, salts, complexes, chelates, clathrates or any non-covalent derivative, enantiomers or mixture of enantiomers, solvates or polymorphs and in vivo or in vitro post-translational modification of a medicinal ingredient will be treated as the “same” medicinal ingredient. Combinations of medicinal ingredients that only differ with respect to the ratio between those ingredients will be treated as the “same” combination.
  • “Timely submission requirement”.To be CSP-eligible, the Canadian NDS for the drug in question must be filed within 24 months of any first international drug submission filing for the same drug in the European Union, United States, Australia, Switzerland or Japan. This period decreases to one year after the one-year anniversary of the CETA Act being in force (i.e., September 22, 2018). According to the RIAS, this requirement is intended “to incentivize the early introduction of innovative drugs into the Canadian market”.
  • Eligible patents. To be eligible, a patent claim must pertain to the “same” medicinal ingredient or a combination of “same” medicinal ingredients, which requires at least one claim for: (i) the “same” medicinal ingredient or combination; (ii) use of the “same” medicinal ingredient; or (iii) a product-by process claim for the “same” medicinal ingredient.

Links:

PM(NOC) Regulations and RIAS

CSP Regulations and RIAS 

 

Are you CETA ready? Contact Norton Rose Fulbright with all your CETA questions

Apotex disentitled to section 8 recovery on the basis of patent infringement in omeprazole case

For the first time, the Federal Court has disentitled compensation pursuant to section 8 of the Regulations on the basis of infringement of a patent. This holding was also based on the court’s finding that Apotex would not have had an available non-infringing alternative (NIA) at any point during the period of infringement (September 5, 2003 to December 3, 2008).  Additionally, the court 1) permitted AstraZeneca to fully recover profits for infringing sales exported to the US, less a deduction for payment made pursuant to a US judgment for infringement of a corresponding US patent; and 2) set the rate of “profits on profits” at the prime bank rate, compounded annually.

Case:  AstraZeneca Canada Inc et al v Apotex Inc, 2017 FC 726

Drug: LOSEC® (omeprazole)

Nature of case: Reference addressing damages for patent infringement and damages pursuant to section 8 of the Patented Medicines (Notice of Compliance) Regulations (Regulations)

Successful party: AstraZeneca et al.

Date of decision: July 26, 2017

Background

This damages reference addressed two prior findings of liability in cases relating to omeprazole, marketed by AstraZeneca as LOSEC®. Apotex sought approval for, and sold its generic Apo-omeprazole tablets in Canada and the US.

As we reported, Apotex was held liable for infringing Canadian Patent No. 1,292,693 (693 Patent), which claims a formulation of omeprazole. As we also reported, AstraZeneca was held liable under section 8 of the Regulations in respect of Canadian Patent No. 2,133,762, which also relates to omeprazole.

The quantification stages of both cases were consolidated and dealt with in this proceeding.

No NIA Available

The court considered whether an accounting of Apotex’s profits for infringement of the 693 Patent should be reduced having regard to several different NIAs that Apotex asserted. In determining whether Apotex “could” and “would” have deployed the alleged NIAs, the court considered whether the NIAs were bioequivalent to LOSEC®, sufficiently stable and would have received regulatory approval. The court answered each question in the negative, emphasizing that real-world actions and events were probative, and none of Apotex’s alleged NIAs, which included alternatives only developed by Apotex in 2015 and third-party suppliers, existed at the relevant period.

Regarding the NIAs developed by Apotex, the court held that these were made in non-commercial scale batches, without full stability, bioequivalence, or clinical data, and Apotex would not have obtained regulatory approval within the infringement period. Further, the court highlighted that in the real world Apotex tried and failed to develop several other non-infringing formulations and Apotex knew or ought to have known that its formulation would infringe the 693 Patent due to prior findings of infringement by courts in the US and Canada in 2002.

The court also found that none of Apotex’s third-party NIAs were viable and cautioned against relying on answers to the bare question of “what would you have done” in the “but for” world. The court preferred instead to draw its own inferences based on evidence regarding the extant factual conditions at the time.

Disentitlement to Damages Under Section 8

The court also considered how to address a prior finding of liability in a section 8 action relating to the same product.

The court rejected Apotex’s argument that, as liability for section 8 damages had already been established, it was not open to the court to redetermine the issue. The court maintained it has a broad discretion under subsection 8(5) of the Regulations to consider all circumstances bearing on the section 8 claim and the ability to craft an appropriate remedy. There was no reason why Apotex should be entitled to compensation under section 8 simply because the finding of liability occurred before the finding of liability for patent infringement. The court concluded that in order to have launched its product earlier, Apotex would have necessarily infringed the 693 Patent, and therefore, it was not entitled to any damages under section 8.

Impact of Recovery in Foreign Proceedings

Apotex had previously been found to have infringed a US patent corresponding to the 693 Patent and had paid damages to that effect. It argued that those damages ought to be exhaustive compensation for all infringing sales in the US such that it should not have to disgorge profits for US sales in the Canadian action.

The court determined that, although foreign judgments should be considered to prevent double-recovery, there was no such double-recovery in this case. The causes of action arose from two different patents, involved distinct acts of infringement during different (but overlapping) time periods, and were tried in jurisdictions with different substantive legal principles. In particular, the availability of a disgorgement of profits was not a remedy available in the US action. Accordingly, the court provided for full disgorgement of Apotex’s US export profits during the full period of infringement, to be offset only by the amount that Apotex already paid in the US litigation.

Profits on Profits

AstraZeneca’s claim included a claim for any profits made on the profits from infringing sales. The parties did not agree on the amount and method of calculating the rate to be applied. The court found that it was not appropriate to rely on transactions between related companies as support for the returns made on profits from infringing sales. The court concluded that the prime bank rate, compounded annually was a more appropriate measure. Apotex argued it was entitled to a deduction for income tax returns, but did not produce any income statements to support its claim. Accordingly, the court found that no deduction for tax returns was warranted.

Link:

AstraZeneca Canada Inc et al v Apotex Inc, 2017 FC 726

CETA tracker: Final Regulations released

Final CETA regulations impacting pharmaceuticals published but not yet in force

As we reported, in July the Canadian government released draft versions of the proposed patent term restoration / Certificate of Supplementary Protection (CSP) and Patented Medicines (Notice of Compliance) Regulations (PM(NOC) Regulations) under Bill C-30. On September 7, the government released the final versions of the regulations.

PM(NOC) Regulations

Despite receiving “a number of submissions” from stakeholders reiterating concerns raised in earlier consultations and raising new concerns, the government decided against making any further changes to these regulations.

Certificates of Supplementary Protection Regulations

The government has removed the requirement that a patent be at least two years from expiration on the date of the CSP application to be eligible for a CSP.

The requirement that the Canadian NDS for the drug in question must be filed within 18 months of any first international drug submission filing for the same drug in the European Union, United States, Australia, Switzerland or Japan (“timely submission requirement”) has been extended from 18 to 24 months during the first year of the regime. This change was made to allow for a sufficient transition period.

Implementation

The government has also confirmed that Bill C-30 and the new regulations will be implemented on September 21, 2017.

Are you CETA ready? Contact Norton Rose Fulbright with all your CETA questions.

Links

PM(NOC) Regulations and RIAS

CSP Regulations and RIAS 

Health Canada consultation on draft guidance documents implementing Vanessa’s Law

As we reported, the Government of Canada recently published draft regulations under Vanessa’s Law that set out additional reporting requirements for manufacturers, based on the actions of foreign regulators, and provide details regarding the Minister of Health’s powers to require tests, assessments and studies of a post-market drug authorization.

Health Canada has now published two draft guidance documents outlining how the proposed regulations will be implemented.

  • Health Canada has also provided drafts of new sections to be added to Health Canada’s guidance document “Guide to New Authorities” that address the Minister of Health’s powers under Vanessa’s Law.

Health Canada is seeking feedback from all interested Canadians on both documents. The consultation is open until September 10, 2017.

Link:

Consultation on the draft guidance documents for Regulations Amending the Food and Drug Regulations (Vanessa’s Law)

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