A defendant in a patent infringement action under subsection 6(1) of the Patented Medicines (Notice of Compliance) Regulations was allowed to amend its defence to include invalidity allegations not found in the Notice of Allegation.
In an action under subsection 6(1) of the Patented Medicines (Notice of Compliance) Regulations (Regulations) concerning three patents, the defendant sought to amend its statement of defence to add new prior art references and invalidity allegations. These allegations had been raised against the plaintiffs by a different generic in another subsection 6(1) proceeding, but were not in the defendant’s notice of allegation (NOA).
The plaintiffs opposed the motion, arguing that the Regulations restrict the invalidity allegations raised in a statement of defence to those in the NOA. The plaintiffs also argued that allowing generics to raise new invalidity allegations without prior notice would prejudice innovators by hindering their ability to properly evaluate the risks associated with initiating a proceeding.
The Court allowed the proposed amendments.
The proposed amendments are not prohibited by the Regulations
The Court observed that the context of the NOA changed when the Regulations changed in 2017. Under the previous regime, the NOA was the foundation for an application to determine whether all of the allegations found therein were justified. Under the amended Regulations, the proceeding commenced in response to an NOA is an infringement action. The generic then pleads any invalidity allegations in a statement of defence, which may include a counterclaim.
According to the Regulatory Impact Assessment Statement (RIAS) for the amended Regulations, the role of the NOA under this regime is to facilitate early consideration of issues likely to be raised in the litigation. The Court accepted that it is the pleadings—not the NOA—that define the scope of the proceedings, subject to the normal procedural safeguards applicable to pleadings amendments.
The Court also rejected the plaintiffs’ argument that the proposed amendments in this case ran contrary to section 6.09 of the Regulations, which obliges the parties to advance the proceedings expeditiously. In the Court’s view, the defendant had not willfully withheld the proposed amendments from its NOA.
The defendant was not limited to raising its proposed amendments by counterclaim
The Court also rejected the plaintiffs’ argument that the defendant should be limited to raising its proposed amendments by counterclaim, as opposed to in its defence. The Court held that there was no basis for this argument in the Regulations. The Court also observed that this argument suggested a lack of prejudice associated with the addition of the new allegations themselves.
The principles set out for pleading amendments must be considered
Following its finding that the proposed amendments were not contrary to the requirements of the Regulations, the Court went on to consider whether the proposed amendments were allowable under the Federal Court Rules.
As the proposed amendments were already pleaded in another subsection 6(1) proceeding without the plaintiffs’ objection, the Court concluded that the proposed amendments met the threshold requirement to have a reasonable prospect of success.
The Court dismissed the plaintiffs’ argument that they would be prejudiced by the amendments, noting that they were raised early in the proceedings—before discovery—and did not introduce new arguments that would require the plaintiffs to re-assess the validity of their patents.
The Court also dismissed the plaintiffs’ argument that the proposed amendments were an abuse of process. The Court held that this argument was premised on the position that the generic was limited to the positions in its NOA under the Regulations, which was rejected. Further, the defendant’s initial statement of defence, which was premised on its 74-page NOA, was not intentionally deficient.
Finally, the Court concluded that balancing fairness, common sense, and the interests of justice favoured allowing the amendments.
The case is Sunovion Pharmaceuticals Canada Inc. v Taro Pharmaceuticals Inc., 2021 FC 37