The Ontario Superior Court of Justice (ONSC) recently denied Apotex’s attempt to repackage the now defunct “promise of the patent” doctrine (the Promise Doctrine). Apotex sought to amend its pleadings to reintroduce the Promise Doctrine under the guise of invalidity allegations of over-breadth, insufficiency, and willful misrepresentation pursuant to sections 27 and 53 of the Patent Act.
The motion was heard in the broader context of the quantum phase of an action for damages by Apotex pursuant to section 8 of the Patented Medicines (Notice of Compliance) Regulations (the Regulations). Abbott and Takeda counterclaimed for infringement of two patents relating to lansoprazole (Lansoprazole Patents), which Apotex alleged were invalid. In dismissing Apotex’s motion, the ONSC awarded substantial indemnity costs against Apotex for its unfounded allegations of fraud.
This adds to the body of law that has resisted attempts to revive the Promise Doctrine following the Supreme Court of Canada’s decision in AstraZeneca Canada Inc. v. Apotex Inc., 2017 SCC 36 (AstraZeneca).
This dispute, which has been ongoing for the past eight years, has a complex procedural history that includes the hearing of two summary judgment motions, in addition to raising various other interlocutory matters. In 2013, Abbott and Takeda were successful in seeking an order for partial summary judgment against Apotex denying it the right to a disgorgement of profits for the period after the parties agreed to settle the litigation with respect to liability. The motion was brought on the basis that the parties had initially agreed on a settlement of future damages, even though that agreement had since dissolved.
Four years later, Abbott and Takeda brought another summary judgment motion seeking dismissal of the damages action in its entirety on the basis that Apotex’s generic lansoprazole product would not have been approved at the relevant time because it did not comply with applicable health regulatory laws. This motion was dismissed; the Court granted summary judgment to Apotex for damages under section 8 of the Regulations, and ordered that the action be set down for trial. We have previously reported on the results of this most recent summary judgment decision here and here.
In 2018, following the release of AstraZeneca, Apotex brought a motion seeking leave to amend its pleadings prior to the damages trial. If granted, the proposed amendments would have allowed Apotex to include in its defence new allegations of over-breadth, insufficiency, and willful misrepresentation pursuant to sections 27 and 53 of the Patent Act in respect of the Lansoprazole Patents.
Another Attempt to Revive the Promise Doctrine
Since the Supreme Court put an end to the Promise Doctrine last year, a number of proceedings have made their way through the Federal Court on the issue of whether promise-based claims can still support an allegation of patent invalidity. We have previously reported on some of this post-AstraZeneca case law, which can be found here.
The ONSC noted that there had been five judgments in the post-AstraZeneca jurisprudence where, in every case, the Federal Court specifically rejected the efforts of generic drug manufacturers (including Apotex) to advance these types of “Promise Doctrine allegations” cloaked as grounds of insufficiency, overbreadth, and willful misrepresentation. The ONSC also emphasized Apotex’s admission that that there had been no changes to the facts underlying its allegations.
The Supreme Court did not Intend Promised-based Claims of Patent Invalidity to Survive AstraZeneca
The ONSC found that it is “counterintuitive” that the Supreme Court would intend for promise-based arguments to survive the banishing of the doctrine by being imported into claims of overbreadth, insufficiency, or misrepresentation. The ONSC concluded that “a party cannot change what was really a promise based pleading into one that could result in invalidity under s. 27 or 53, even though the Supreme Court recognized that there are “mischiefs” that could fall under those heads.”
On the issue of Apotex’s allegations of willful misrepresentation, the Court held that Apotex had failed to meet the requirements of section 53 of the Patent Act. In light of the seriousness of the assertion, allegations of fraud must “set out precisely” each alleged wrongful act, including the “when, what, by whom and to whom” of the relevant circumstances, and be plead with “full particularity”.
Apotex failed to meet this standard. It had expressly admitted that it had “merely recycled” its Promise Doctrine allegations, and specifically acknowledged that its section 53 fraud allegations were not informed by anything other than AstraZeneca.
In light of the severe prejudice that the defendants would have faced if these unfounded allegations were permitted to be advanced, the Court awarded heightened costs against Apotex.
Link to decision: