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PATENTS - Procedure - Case management

Thursday, June 18, 2020 @ 5:31 AM  

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Appeals by the defendants Apotex and Teva Canada, two generic drug companies, from a decision of a case management judge ordering that the trial of common issues in the respondent Bayer’s actions against two other generic drug companies was to be heard together with the trial of common issues in Bayer’s actions against the appellants. Bayer’s actions were commenced after the four generic companies served Notices of Allegation against Bayer alleging its patents for an anticoagulant were invalid. The appellants argued that the judge failed to consider the application of Rule 105 which provided the court with discretion to order that two or more proceedings be consolidated, heard together, or heard one immediately after the other and thus also failed to consider prejudice as a factor in its decision. The appellants argued that they were poised to become the first movers in the generic rivaroxaban market because they were the first to serve their Notices of Allegation relating to their respective rivaroxaban products. By reason of the tardiness of the two other companies’ Notices, Bayer’s actions against those defendants were commenced months after Bayer commenced actions against the appellants. The appellants also argued that because of the 24-month stay imposed by the Patented Medicines (Notice of Compliance) Regulations, their actions must be determined by the end of 2020. The other two actions, however, need not be determined until the spring of 2021. The appellants argued that if they were successful, they would enter the market in December 2020, upon expiry of Bayer’s ’561 Patent which none of the parties had challenged. The effect of the judge’s order was that the appellants would lose their first-mover advantage and that the other defendants would be able to jump the queue and enter the rivaroxaban market simultaneously with the appellants, if successful.

HELD: Appeals allowed. The judge made a reviewable error in making the impugned order. While the judge did not refer to Rule 105 in making his determination, Rule 105 gave the judge the discretion to make the order he made. Nothing, however, in the Regulations supported the appellants’ argument for substantive protection of the individual commercial interests of the first generic or, the first and second generics, to serve Notices of Allegations. The order did infringe s. 6.02 of the Regulations which prohibited joinder of any action, other than an action in relation to an allegation of the second person included in a submission or supplement in the main action or an action in respect of a CSP that set out a patent at issue in the main action during the 24-month period in which the Minister was prohibited from issuing a Notice of Compliance. The purpose of the s. 6.02 prohibition must be considered from the perspective of the appellants, who served their Notices at the earliest point in time. A Rule 105 order ordering any sort of arrangement of the appellants’ proceedings with the respondents’ proceedings could result in efficiencies and cost savings when one considered the multiplicity of proceedings that would otherwise take place, but this was not the concern of s. 6.02. The concern of s. 6.02 was whether the Rule 105 order could possibly result in the appellants’ actions exceeding their 24-month deadlines. A Rule 105 order for common hearings might not cause the appellants’ actions to exceed their respective deadlines, but it might, and such an order certainly would not shorten the timeline for the determination of the appellants’ actions. For this reason, not only did a prohibition on common hearings fit easily within the meaning of the words used in s. 6.02, such a prohibition was entirely consistent with the purpose of the prohibition.

Bayer Inc. v. Teva Canada Ltd., [2020] F.C.J. No. 617, Federal Court of Appeal, M. Nadon, J.D.D. Pelletier and Y. de Montigny JJ.A., May 14, 2020. Digest No. TLD-June152020007