ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
APOTEX INC.
Andrew R. Brodkin and Jerry Topolski for the Plaintiff/Defendant by Counterclaim/Respondent, Apotex Inc.
Plaintiff/Defendant by Counterclaim/Respondent
- and -
ABBOTT LABORATORIES, LIMITED, TAKEDA PHARMACEUTICALS COMPANY LIMITED, and TAKEDA PHARMACEUTICALS AMERICA, INC.
David Tait and Sanjaya Mendis, for the Defendant/Plaintiff by Counterclaim/Moving Party, Abbott Laboratories Limited.
Christopher Van Barr and Kiernan Murphy, for the Defendants/Plaintiffs by Counterclaim/Moving Parties, Takeda Pharmaceuticals Company Limited and Takeda Pharmaceuticals America Inc.
Defendants/Plaintiffs by Counterclaim/Moving Parties
Heard: November 9 and 28, 2016, at Toronto, Ontario
Michael G. Quigley J.
REASONS FOR JUDGMENT
MOTION FOR SUMMARY JUDGMENT
Table of Contents
Introduction............................................................................................................................... 2
Legislative framework............................................................................................................... 4
Litigation history........................................................................................................................ 6
Procedural issues and rulings................................................................................................... 8
Is summary judgment appropriate in a case like this?......................................................... 14
The evidence............................................................................................................................. 16
Analysis..................................................................................................................................... 23
7.1 Was Apo-lansoprasole legally approvable under the FDA and the FDA Regulations before June 2009?................................................................................................................................................... 24
7.2 Does the decision in Omeprazole defeat Apotex’s s. 8 damages claim?......................... 30
- Proceeding forward................................................................................................................. 41
- Introduction
1This summary judgment motion is the latest skirmish in the war between Apotex Inc. (“Apotex”) and Abbott Laboratories Limited (“Abbott”), Takeda Pharmaceuticals Company Limited and Takeda Pharmaceuticals America Inc. (collectively, “Takeda”) relating to the patented medicine Prevacid®, or “lansoprazole” as it is generically known. Abbott and Takeda are the inventors of lansoprazole, and they hold its patent rights. Lansoprazole is a proton-pump inhibitor. It is used by people who suffer from gastro-esophageal reflux disease, ulcers, and related conditions. It is also used to prevent those conditions in people who take certain other drugs, especially non-steroidal anti-inflammatory drugs for arthritis, since those other medications can cause the development of stomach ulcers. It is a valuable and widely prescribed pharmaceutical.
2That value has given rise to a lengthy battle between Abbott and Takeda1, and the generic drug manufacturer, Apotex, over the approval and marketing of the generic drug Apo-lansoprazole, and Apotex’s entitlement to damages against Abbott and Takeda for having improperly denied it access to the market. Apotex claims that the Applicants improperly brought Notice of Compliance (“NOC”) proceedings under the Patent Act2, and the related Patented Medicines (Notice of Compliance) Regulations (the “NOC Regulations”)3 to keep them out of the market. This issue has been litigated extensively before the Federal Court of Canada and in this Court.4
3In this court, the matter was put under Case Management under my supervision in 2011. The Applicants brought a summary judgment motion in this court in 2012 (the “First Motion”). That motion determined that Apotex had no unjust enrichment based entitlement to claim a disgorgement of Abbott and Takeda’s profits relative to Prevacid®.5 That decision was upheld.6 Almost four years later, the remaining matters have yet to go to trial, although discoveries have been held.
4On April 6, 2016, I received correspondence as Case Management judge from counsel for Abbott advising that Abbott and Takeda were now bringing a further summary judgment motion against Apotex. The exact language used in that letter is important because of the way it frames the issue. That letter read in part as follows:
After the Court of Appeal affirmed Your Honour’s summary judgment decision in September 2013, Apotex’s only remaining claim is for damages. Apotex seeks damages based on allegedly lost Apo-lansoprazole sales that would have been made in the absence of the NOC Regulations, from April 2007 until May 2009. Apotex alleges that these sales were delayed by the Defendants NOC proceedings.
Apotex's damages claim is predicated upon its regulatory submission for Apo-lansoprazole being approved, in the absence of the NOC Regulations, in April 2007. Apotex confirmed in its answers to undertakings that the only support for this fundamental aspect of Apotex's claim is a purported Patent Hold Letter sent to Apotex by Health Canada, dated April 17, 2007. Discovery reveals, however, that Apotex’s Apo-lansoprazole submission did not in fact comply with the applicable health regulatory laws in April 2007, as determined by Health Canada. Accordingly, and notwithstanding the purported Patent Hold Letter, Apo-lansoprazole could not have been legally approved in April 2007.
In light of this evidence from discoveries, Abbott and also Takeda seek summary judgment in this regard. Both parties served Apotex with their Notice of Motion for summary judgment on Friday, April 1, 2016. A copy of Abbott's Notice of Motion is enclosed for the Court's reference. [Emphasis added].
5The Notice of Motion which accompanied Abbott’s letter and Takeda’s virtually mirror motion presented a slightly different question, namely whether a “NOC could or would have issued for Apo-lansoprazole at that time [April 2007] in the absence of the NOC Regulations.”
6Thus, the principal issue on this summary judgment motion as framed by the Notice of Motion is whether Apotex’s Apo-lansoprazole generic equivalent of Prevacid® “could not and would not” have been approved in April 2007 “because it did not in fact comply with the applicable health regulatory laws” (emphasis added). On this basis, the Applicants assert that Apotex’s remaining s. 8 damages claim under the patent legislation is without foundation and ought to be struck, bringing this litigation to an end.
2. Legislative framework
7The legislative framework, and its history, is described in detail in my reasons for judgment on the First Motion.7 The Patent Act and Regulations regulate the approval and sale of patented medicines in Canada. The section 8 damages regime in the NOC Regulations is designed to compensate generic drug manufacturers who have been denied market access by improper exercise of patent rights by innovative manufacturers.
8Before any new drug may be sold in Canada, the Canadian Food and Drug Regulations8 require that the vendor obtain a NOC from the Minister of Health under the NOC Regulations.9 Innovative manufacturers, like Abbott and Takeda, who have invented a new pharmaceutical, may only sell that drug where they have filed a “New Drug Submission” (“NDS”) related to the new drug that is satisfactory to the Minister10 and where the Minister has issued a NOC for that drug. Similarly, generic manufacturers, like Apotex, may only market a new drug in generic form where they file an “Abbreviated New Drug Submission” (“ANDS”) and also obtain a NOC from the Minister.11
9The current system dates from 1993 when Parliament changed Canadian law to protect pharmaceutical patents. Before then, a system of “compulsory licensing” had been in place where innovators were compelled to issue manufacturing licenses to generic manufacturers in Canada for their patented pharmaceuticals. In 1993 Government policy changed in favour of protection of the patent rights of the innovator, consistent with certain international obligations.
10When Parliament changed the patent laws in 1993, it signalled its intention to respect the patent monopoly enjoyed by the innovator pharmaceutical companies for their patented pharmaceuticals, but it also determined that a set of checks and balances was necessary. To achieve balance between innovator and generic manufacturers, generic manufacturers would be permitted to enter the marketplace immediately after the expiry of the drug patent, rather than having to wait an additional two years, and generic manufacturers would be permitted to prepare for that market entry date without being considered to have infringed a patent.
11The NOC Regulations were introduced on March 12, 1993. They established a comprehensive regulatory framework designed to balance the exceptions to an inventor’s patent in favour of a generic manufacturer with the implementation of a summary procedure. That procedure was designed not only to strengthen the innovator’s patent rights, but also balance those rights by creating procedures to ensure accelerated market access in favour of the generic manufacturers.
12The NOC Regulations were enacted under s. 55.2(4) of the Patent Act. The general scheme was to create a “Patent Register”, maintained by the Minister of Health.12 An innovative pharmaceutical company would be entitled to list certain patents on that Register that it claimed were relevant to its various drug submissions.13 If a generic company filed an ANDS seeking approval for sale of a copy of a patented drug, it could follow one of two alternative courses of action. It could either wait until the expiry of the listed patents, or it could challenge one or more of those patents by way of a “Notice of Allegation” (“NOA”) on the basis that the patents were invalid, or not infringed by its product, or both.14
13Upon receipt of a NOA from a generic manufacturer, the innovator also had alternative choices. It could simply do nothing, in which case a NOC would be issued in favour of the generic. Alternatively, it could challenge the generic’s NOA allegation by commencing an application under s. 6 of the NOC Regulations to prohibit the Minister from issuing a NOC to the generic until the expiry of the patent in question (a “prohibition proceeding”).
14It is a unique feature of the NOC Regulations that the mere commencement of a NOC proceeding by an innovator under s. 6 triggers an automatic statutory stay that prohibits the Minister from granting a NOC to the generic manufacturer for 24 months, unless the NOC proceeding is disposed of earlier.15 Generic manufacturers have objected to this rule. While acknowledging that it may be “draconian,” the Supreme Court of Canada has nevertheless confirmed the legality of that system and the complete nature of the regulatory code established by the NOC Regulations.16
15Against this background, the remedies available to generic manufacturers in s. 8 of the NOC Regulations are significant, since they were designed to prevent the abuse of NOC proceedings and to compensate generic manufacturers for damage suffered for delayed issuance of a NOC and market access resulting from improper use of those proceedings. Those remedies and Apotex’s right to claim them in relation to lansoprazole is the central focus of this case.
16It is important, however, that the 24-month mandatory stay does not freeze all Ministerial action. The Minister still proceeds with its review of the generic manufacturer’s ANDS drug submission, as occurred in this case. Once that review is complete, provided the Minister is satisfied that the other conditions of the Food and Drugs Act17 and Regulations have been met, the generic drug is placed on “patent hold” until the disposition of the ongoing NOC proceedings. Being placed on “patent hold” means that the generic manufacturer would have been issued a NOC for its generic product but for the commencement of s. 6 NOC proceedings by the innovator.
17If the innovator wins the NOC proceeding, the Minister is prohibited from issuing the NOC until the patent expires. If the generic manufacturer wins, then, provided that the generic’s ANDS drug submission has otherwise been approved by the Minister and is on “patent hold”, a NOC will immediately be issued, permitting the generic to sell its generic equivalent of the patented drug. The “patent hold” status is significant because the remedies available for being denied market access during the compulsory stay period only apply once a generic could otherwise access the market; access requires that Ministerial approval has been received for the generic product.
18Section 8 of the NOC Regulations provides the remedy to generic drug manufacturers for being precluded from selling their generic products on a timely basis, where that delay is caused by an inability to obtain a NOC due to operation of the mandatory two-year stay. It is a comprehensive system meant to compensate generic manufacturers who have improperly been denied access to the marketplace. The courts have had careful regard to the balance intended by Parliament when interpreting these provisions, given the careful and comprehensive design of that compensatory framework.18
19Section 8 of the NOC Regulations previously permitted the court to order an innovator pharmaceutical company to compensate a generic manufacturer for loss due to delayed marketplace access by way of an “order for relief by way of damages or profits as the circumstances require”19, but the jurisprudence refused to allow generic drug manufacturers to obtain a disgorgement of revenues earned by innovator drug manufacturers during the statutory period of the innovator’s exclusive marketplace access.
20In Merck, the Federal Court of Appeal held that the “disgorgement of profits” was not embraced by the statutory reference in s. 8, as it read at that time, to lost damages or profits.20 Rather, compensation under s. 8 was only for prejudice actually suffered by the generic manufacturer due to the operation of the stay.21 The decision on the First Motion determined that Apotex could not obtain a disgorgement of Abbott’s and Takeda’s profits at common law or under equitable principles because it was not contemplated by s. 8, and the s. 8 regime was a complete code of damages entitlement.22 Apotex’s appeal from that decision was dismissed. The court affirmed that the only profits or revenues to which Apotex could be entitled for being denied access to the marketplace by the regulatory scheme and the NOC Regulations was that provided for by the NOC Regulations themselves.23 Those are the damages that are the subject matter of this second summary judgment motion.
3. Litigation history
21The litigation relating to the manufacture and marketing of lansoprazole by generic drug manufacturers, and Apotex in particular, has had a significant history24, but what is important to remember here is that as the NOC litigation was ongoing between these parties, there were also regulatory approvals being sought to permit Apotex to receive a NOC that would permit it to market and sell Apo-lansoprazole. The two processes proceeded totally independently but in parallel, but it is the regulatory approvals process described in section 7.1 below that is central to the position of the Applicants on this second summary judgment motion.
22The main historical point is that after Novopharm, another generic manufacturer, lost the first round of legal proceedings relative to lansoprazole25, Apotex commenced its own NOA proceedings against Abbott and Takeda in 2006, challenging four patents held by the Applicants or others. In response to the NOAs filed by Apotex, Abbott and Takeda commenced their own proceedings against Apotex and Apo-lansoprazole under s. 6 of the NOC Regulations (the “Section 6 Proceedings”).26 Under the Section 6 Proceedings, the Applicants sought Orders of Prohibition preventing the Minister from issuing a NOC for Apo-lansoprazole
23Only one of the Applicants’ Section 6 Proceedings ever reached the hearing stage and it concluded on June 13, 2008. The presiding judge reserved his decision.27 In September 2008, while still under reserve, Apotex and the Applicants entered into the Settlement Agreement.28 As a result of the Settlement Agreement, the Applicants discontinued their Section 6 Proceedings.29
24The Settlement Agreement concluded between Abbott, Takeda and Apotex is important to this motion because Apotex agreed to stay off the market, but it specifically reserved the right to claim damages under s. 8 of the NOC Regulations to the Patent Act. The subsequent damages claim in Federal Court acknowledges that the Settlement Agreement specifically permits that claim for the period from April 1, 2007 to May 1, 2009.
25Under the Settlement Agreement, Apotex’s damages claim was restricted to that period, but it was also precluded from entering the marketplace before May, 2009. There was a negotiated reason for this term. Apotex agreed to stay out of the market for an additional eight months from the date the Settlement Agreement was reached because the Applicants agreed to permit Apotex to have market access eight months earlier than February 2010, when Apotex would otherwise have been entitled to start selling Apo-lansoprazole. Ironically, as the plethora of subsequent litigation shows, the parties also agreed to refrain from instituting further litigation against each other with respect to Apo-lansoprazole. That term has been honoured more in the breach than in the observance.
4. Procedural issues and rulings
26After the Notices of Motion were filed, counsel and I engaged in a number of case management conferences to schedule (i) the examination of a Health Canada representative under Rule 39 that would be required before the motion could be heard, and (ii) the time for the filing and service of the parties’ Motion Records and Factums. The motion was scheduled for two days on November 9 and 10, 2016. In the meantime, however, those further examinations were conducted in aid of this motion.
27The applicants wanted to examine Dr. Sharma, who was the Director General of the Therapeutic Products Directorate (“TPD”) at Health Canada. Dr. Sharma was the Federal Minister of Health’s delegate charged with decision-making power as to whether a NOC would be granted to Apotex for Apo-lansoprazole. However, Health Canada was not willing to produce Dr. Sharma as a witness. Instead, they insisted on producing Dr. Craig Simon, even though he was not actually involved in the review of the Apo-lansoprazole submission. Dr. Simon works closely with other members of the Bureau of Pharmaceutical Sciences team (“BPS”), and in preparation for examination, had meetings and discussions with Dr. Sharma about the content and approvability of Apotex’s ANDS submissions generally, including in particular the Apo-lansoprazole submission. Health Canada insisted on producing Dr. Simon for examination because of its view that he had more experience, was entirely familiar with the questions that would be asked, and was in a position to provide answers to questions that arose on the cross-examination that would accurately state and bind Health Canada on its position in this litigation.
28Dr. Simon was cross-examined for 1 full day in July 2016 and he answered 358 questions in cross-examination and re-examination. The transcript of his examination forms the foundational evidence on the assessment process conducted within Health Canada for the Apo-lansoprazole submission. As the date of the hearing continued to approach, however, the Applicants became dissatisfied with the evidence he had provided on the key central question. As a result, on August 29, 2016, they served a subpoena on Dr. Sharma, requiring that she as well attend further cross-examination in anticipation of the motion. Evidently, the applicants did not believe that Dr. Simon had adequately answered those central questions because the subpoena required that Dr. Sharma attend to answer only two further questions that had not been explicitly answered by Dr. Simon. Those questions were as follows:
Did Dr. Sharma know when she signed the Apo-lansoprazole (submission number 103952) Patent Hold Letter on April 17, 2007 that Apotex's bioequivalence study LS 2602 did not use the standard fed (i.e. high-calorie, high-fat) conditions?
If Dr. Sharma knew in April 2007 that Apotex’s bioequivalence study LS 2602 did not use the standard fed (i.e. high calorie, high fat) conditions, would she have issued an NOC in the absence of the PM(NOC) Regulations without further inquiry?
29Upon receiving these subpoenas, Health Canada advised that it would resist producing Dr. Sharma. It took the view that (i) Dr. Simon had adequately answered all questions, and (ii) it regarded the further proposed cross-examination of Dr. Sharma as an abuse of process.
30Given the short time before the scheduled motion hearing date, Health Canada’s refusal to produce Dr. Sharma to answer the two questions, and any further questions that would of course arise out of those two, created a further dispute in advance of the motion that led to a conference call with counsel and counsel for Health Canada.
31I ordered on that conference that Dr. Sharma would not need to be produced to answer the questions raised in the subpoena, and that instead, the content of an email sent by counsel for Health Canada to the Applicants’ counsel on Friday, October 14, 2016, would serve as the official evidentiary response to the two questions. Health Canada’s response as set out in that email provided as follows:
The first question was effectively answered by Dr. Simon. It is also answered by the Health Canada correspondence put to Dr. Simon during his examination, including internal memoranda dated November 7, 2006 and April 16, 2007, and letters from Dr. Sharma to Apotex dated April 18, 2007 and December 4, 2007 as well as Dr. Simon's evidence thereon.
In particular, Dr. Sharma's letter dated December 4, 2007 clearly states that, notwithstanding the issuance of the patent holder letter dated April 18, 2007, “we now realize that the information provided in support of bioequivalence … is not adequate to establish bioequivalence" (emphasis added) [in original]. She then goes on to explain that the reason it is not adequate to establish bioequivalence is that the comparative bio studies submitted in support “was not conducted under the standard fed conditions.
The second question is hypothetical but was also effectively answered by Dr. Simon. It would be duplicative to have Dr. Sharma attend to provide the same evidence. Her answers to both questions would essentially be the same as Dr. Simon’s.
32This email response from Health Canada’s counsel eliminated the need for Dr. Sharma to respond to the subpoena. On October 21, 2016, the applicants instead filed a Joint Supplementary Motion Record containing the original subpoena to Dr. Sharma, and the October 14 email provided by counsel to Health Canada as further evidence for argument of this motion.
33Then, as the hearing started on November 9, another potential disruption arose. Counsel for Apotex rose to complain that the motion as originally framed had been impermissibly expanded by the Applicants. He argued that the court should not allow the Applicants to argue what he described as an expanded and completely different motion, but they should instead be constrained to argue the motion in its more limited form as originally framed in their Notices of Motion.
34There were additional claims made by the Applicants, but they were not included in its Notice of Motion or in a Supplementary Motion Record but rather were first outlined in its factum filed mere weeks before the motion was argued but after all evidence had been gathered. Those claims included that:
(i) Apotex itself was responsible for the allegedly mistaken initial issuance of Health Canada’s April 2007 approval of Apo-lansoprazole, subject to Patent Hold;
(ii) Apotex had filed false and or misleading information in its original Apo-lansoprazole ANDS and that there were material omissions of information;
(iii) Apotex failed to disclose and hid the results of one failed Apo-lansoprazole study from Health Canada;
(iv) Apotex lacks clean hands in its opposition to this motion based on allegedly surreptitious and claimed fraudulent conduct by its Chairman, Dr. Barry Sherman, including the proffering of allegedly false and misleading documentation, in dealings with the Ontario Drug Benefits Plan in which Apo-lansoprazole was claimed to be fully interchangeable with Prevacid® when the Apotex generic drug had only received approval for use in the treatment of a subset of the medical uses of Prevacid®;
(v) that Apotex improperly objected to questions that were asked of Dr. Simon on the pre-motion discovery in relation to its product monographs;
(vi) that Apotex improperly objected to questions asked at discovery during the cross-examination of its witness, Ms. Suzanne Picard; and
(vii) Apotex improperly claimed confidentiality designations relative to certain of its productions because they do not meet the test to be designated as confidential.30
35Counsel for Apotex complained that the Applicants were invoking the court to apply the broad discretion conferred by s. 8(5) of the NOC Regulations to take all of these matters into consideration, while nevertheless acknowledging that the Federal Court of Appeal has affirmed that relevant matters include equitable considerations. In Apotex Inc. v. Merck & Co., Inc. 31, the court observed that:
The Court’s broad discretion under subsection 8(5) allows it, when considering arguments based on ex turpi causa, to have regard to the factual situation in its entirety, including its nuances. … Discretion enables the court to assess the appropriate amount of compensation payable (including nil) in a manner that properly takes account of all the relevant facts.
36Counsel for Apotex noted that the Applicants had not pleaded reliance on that provision in their pleadings and had provided no notice of the particular allegations before factums were exchanged and after the pre-motion evidence had been gathered. Thus, counsel claimed that Apotex would be severely prejudiced from an evidential perspective if the motion were permitted to take all these allegations of wrongdoing into consideration.
37The essence of the Applicants’ position invoking s. 8(5) of the NOC Regulations is that Apotex seeks to take advantage of its own misdirection of Health Canada. They say that when Apotex filed its regulatory submission for Apo-lansoprazole, it improperly hid the results of a failed biostudy that it had conducted using the standard high-calorie, high-fat meal. As a consequence, they claimed Health Canada could not and did not fully appreciate the deficiencies of Apotex’s bioequivalence submissions until late 2007, after Apotex had received the Patent Hold Letter upon which it relies in this case. Had Apotex not allegedly conducted itself in this way, it is claimed that Health Canada’s awareness of the problem would have been heightened, and that alleged deficiency “would have been caught by Health Canada” before the Patent Hold Letter was sent.32
38Further, they contend that Apotex progressed the situation it improperly engineered when it allegedly elected to omit any justification for the non-standard meal used in biostudy LS2602 in its initial Apo-lansoprazole submission in February 2006.33 The Applicants claim the obvious implication is that Apotex did not wish to alert Health Canada to the fact that it had deviated from the standard meal, that its hands are not clean, and that it should not be permitted to rely on the Patent Hold Letter because that would allow Apotex to take advantage of a state of affairs that it improperly engineered and furthered for its own benefit.
39Certainly a fundamental ethical and legal principle that applies in any case is that a party is precluded from “[taking] advantage of the existence of a state of things which he himself produced”34, but I reject this claim as applicable here because it is plain that Dr. Tam was fully aware when he made his recommendation, as the evidence outlined below shows, that he was not doing so on the basis of the standard high-fat study preferred by the Guidance Documents, but rather on the basis of the low-fat study that Apotex actually submitted.
40The Applicants claimed that paragraphs 12 and 20 of Abbott’s Notice of Motion show that these issues were raised in their pleadings and can and ought to be resolved on this summary judgment motion. Those paragraphs in the Notice of Motion read in part as follows:
…Apotex has pleaded that it would have received its Apo-lansoprazole NOC in April 2007. Discovery reveals that the only fact Apotex relies on to support this pleading is a so-called “patenthold” letter sent to Apotex by the Minister dated April 17, 2007. The fact is, however, that Apotex’s submission did not comply with the FDA or FDA Regulations when it was filed, and it was not compliant as of April 2007.
The issue of whether, in the absence of the NOC Regulations, the Minister would have issued an Apo-lansoprazole NOC in April 2007 can be resolved on summary judgment. Apotex was discovered on November 16-17, 2015. Apotex provided its answers to undertakings to Abbott on February 29, 2016. The Minister’s evidence will be available in the context of this motion. Accordingly, discovery relevant to the issue is complete and motion’s judge will have all the evidence necessary to make the relevant findings. [Emphasis added.]
41In my view, it is plain and I found that the questions raised in the Record and Factum filed by Abbott and Takeda relative to Apotex’s conduct went well beyond the simple question posed in the Notices of Motion of whether Apotex’s Apo-lansoprazole generic equivalent of Prevacid® “could not and would not” have been approved in April 2007 “because it did not in fact comply with the applicable health regulatory laws.”
42The supplemental questions arising out of the claims of the Applicants enumerated at para. 34, above, involve allegations of Apotex having filed false and/or misleading information with Health Canada, omitting material information, concealment and failure to disclose, surreptitious and allegedly fraudulent conduct by the company’s Chairman and Chief Executive Officer, and improper conduct on discovery, but those allegations are not the question that is posed for determination on this summary judgment motion. They were not formally raised as being issues on which the Applicants would seek determinations by this court until the parties filed their factums, mere weeks before the motion was to be heard. There is no actual evidence relative to those claims, merely accusations and allegations.
43On a so-called “simple” two day summary judgment motion, and absent a full evidential record with full examination and cross-examination on those matters, it was evident to me that none of those collateral issues could be resolved fairly when Apotex had no notice of those allegations until the “eleventh hour.”
44I do accept the proposition that s. 8(5) of the NOC Regulations can properly be taken into account in the determination of whether Apotex can or ought to be entitled to any or all of the s. 8 damages it claims, but there is no foundation for the court to exercise that discretion in the absence of a full evidentiary record where the responding party has adequate notice and an opportunity to obtain, gather, and adduce responding evidence to the allegations made.
45Beyond these obvious evidentiary problems, in opposing the Applicants’ claims counsel for Apotex properly relies on the strong statements in other court decisions that explain that a moving party will be constrained on a summary judgment motion like this to argue only the issues that are plainly and directly raised in its Notice of Motion. In Transamerica Life Insurance Co. of Canada v. Hutton35, Sharpe J., now J.A., observed, at para. 12, that:
The requirement to state grounds reflects an overarching policy of the Rules of Civil Procedure, namely, that to the extent possible, disclosure of a party's position be made to the other side to prevent surprise and unfair advantage. In many cases, that purpose can be achieved with a minimal statement of the grounds but in others more detail will be required. In order to determine whether the purpose of the Rule has been satisfied in the present case, it is necessary to look in more detail at the issues as pleaded between the plaintiff and Metropolitan Trust as well as to the procedural context in which this motion is brought.
46Even more apropos in these circumstances is Eli Lilly and Company v. Apotex Inc.36, where I note that it was the responding party in this case, Apotex, who was the subject of Hugesson J.’s admonishment on that occasion. The learned judge states as follows, at para. 3:
In its written memorandum and in its attempt to plead the matter orally today, plaintiffs sought to enlarge on those grounds and to plead matters of which there was no suggestion whatever in the written notice of motion. In my view, that is unfair and unjust, and indeed, in this particular case that, unfairness and unjustice was demonstrated by the fact that at least one of the respondents did not think it necessary to file evidence in response to grounds of which it did not have notice and very clearly would have wanted to file evidence if it had had such notice.
47Finally, in Lorama Group Inc. v. Lenz37, Perell J. of this Court denied the ability of a moving party to complain that a motions judge had improperly refused to decide an issue that had been argued before her where her refusal to decide that matter arose, on the simple basis that it would have been unfair to do so:
The Defendants submit that the Court; i.e., Justice Wright had an obligation to decide the severable limitation period issue that was fully argued before her, and that she could and should have fully decided the matter. The Defendants submit that judges have no right to control what comes before them and that judges must decide the cases that are brought before them one way or the other and not shirk their duty in doing so. I agree that judges do not get to decide what cases come before them, and I agree that judges have a duty to decide cases independently and impartially, but judges are under no obligation to decide cases when it would be procedurally unfair to do so. [Emphasis in original.]
48Each of these references is directly on point. They apply, in my view, because the prejudice to Apotex as the responding party is self-evident, if it were to be required to respond to the entirely different motion that is raised in the Applicants’ Factums rather than the motion as it was originally framed. On this basis, I accepted the submissions of Counsel for Apotex and advised the parties that they would be restricted in their argument to the questions as originally posed, that is, as stated in paragraphs 12 and 18 of the Abbott Notice of Motion. That motion has two distinct elements;
(i) that Apotex’s submission did not comply with the FDA or FDA Regulations when it was filed, and it was not compliant as of April 2007; and
(ii) in the absence of the NOC Regulations, the FDA and FDA Regulations did not permit an Apo-lansoprazole NOC to be issued in April 2007. Therefore, no NOC could or would have issued to Apotex at that time in the absence of the NOC Regulations.
49In light of that conclusion, the parties adjourned on November 9 to refine their arguments and restrict them to this issue, and they were to return to argue the more limited motion the next day. However, owing to personal circumstances that arose without warning for Counsel for Apotex, he was unable to come to court on November 10 to argue the motion. The applicants were entirely sympathetic to the circumstances, so with the consent of all parties, the motion was adjourned to Monday, November 28 for argument.
5. Is summary judgment appropriate in a case like this?
50The 2010 amendments to the Rules of Civil Procedure (“Rules”) made summary judgment mandatory if the court is satisfied that there is “no genuine issue requiring a trial with respect to a claim or defence.”38 The Supreme Court of Canada has also recently liberalized the availability of summary judgment. It held that the rule for summary judgment must be interpreted broadly, favouring proportionality and fair access to the affordable, timely and just adjudication of claims.39 A trial is no longer the default procedure in Ontario in civil matters.40
51The Supreme Court held that a trial is not required if a summary judgment motion can achieve a fair and just adjudication. This will be the case when the process: (i) allows the judge to make the necessary findings of fact; (ii) allows the judge to apply the law to those facts; and (iii) results in a proportionate, more expeditious and less expensive means to achieve a just result.41
52The process need not be as exhaustive as a trial. However, I must be confident on the record before me that I can make the required findings of fact and apply the relevant legal principles to those facts so as to resolve the dispute.42 Put simply, I should grant summary judgment as a cheaper and faster route to resolve the dispute unless I find that there is a genuine issue that requires the added expense and delay of fact finding at trial.43
53The new summary judgment rules also introduced expanded fact-finding powers, including the power to weigh the evidence, to evaluate the credibility of a deponent and to draw reasonable inferences from the evidence.44 The Court is entitled to rely on these powers to resolve what might otherwise appear to be a genuine issue for trial, provided that doing so is not against the interest of justice.45
54Plainly, as explained by the Supreme Court of Canada, the amendments to the summary judgment rules enable a more meaningful review of the paper record filed by the parties, and its decision expressly overrules jurisprudence that prevented motions judge from making evidentiary determinations.46
55Beyond the new framework of analysis that is mandated by Hryniak, the familiar and well-established principles that emerge from the Rule 20 jurisprudence relating to the parties’ obligations on summary judgment motions continue to apply. In particular, each party must still put forward their best case, “putting their best foot forward” as the colloquial expression goes, as if at trial. The burden rests on the moving party to provide a level of proof that demonstrates that a trial is unnecessary to fairly and justly resolve the issues.47
56Before Hryniak was decided, the decision in Combined Air48 was the leading authority on the scope of the new rules. In Combined Air the Court of Appeal instructed that the first question that the court must ask itself on a summary judgment motion is whether it can have a full appreciation of the evidence and the issues it is required to consider in order to make dispositive findings or whether that can only be achieved by way of a trial. Combined Air held that where the motions judge cannot gain the full appreciation of the matter that is required, or where real conflict remains on important evidentiary aspects of the matter and that conflict cannot be resolved using the enhanced Rule 20 powers, the motion cannot succeed and the matter must be sent on for trial.
57However, the Supreme Court expressed no similar reservation. In its unanimous and sweeping endorsement in Hryniak for the use of summary judgment motions, Karakatsanis J. wrote that:
[T]he Ontario Court of Appeal placed too high a premium on the “full appreciation” of evidence that can be gained at a conventional trial, given that such a trial is not a realistic alternative for most litigants. In my view, a trial is not required if a summary judgment motion can achieve a fair and just adjudication, if it provides a process that allows the judge to make the necessary findings of fact, apply the law to those facts, and is a proportionate, more expeditious and less expensive means to achieve a just result than going to trial.
To that end, I conclude that summary judgment rules must be interpreted broadly, favouring proportionality and fair access to the affordable, timely and just adjudication of claims. [Emphasis added.]49
58Nevertheless, the legal burden continues to rest on the moving party on a summary judgment motion to show that there is no genuine issue for trial and that the requirements outlined in Hryniak can be achieved by way of summary judgment. That burden never shifts. To resist a motion for summary judgment, the responding party must adduce coherent evidence based on an organized set of facts to show that there is a real issue to be tried on admissible evidence.50
59Stated again, simply, there are two issues on this summary judgment motion. The first is whether Apo-lansoprazole could or would have been approved and a NOC issued in April 2007, and the second is whether the answer to that question is dispositive of Apotex’s damages claim, with the result that it should be dismissed as claimed by the Applicants.
60If the FDA and the FDA Regulations did not permit an Apo-lansoprazole NOC to be issued at that time in the absence of the Section 6 Proceedings, that finding would be dispositive and defeat Apotex’s claim for damages under s. 8 of the Patent Act in its entirety.
61Alternatively, if the FDA and the FDA Regulations did permit it, and an Apo-lansoprazole NOC could or would have been issued in April 2007 but for the Section 6 Proceedings, then further questions will remain relating to damages and what amount of s. 8 damages is properly due to Apotex from Abbott and Takeda. That will require a trial to permit a more complete record of evidence to develop, relative to the amount of Apotex’s damages entitlement.
6. The evidence
62For this motion, the key evidence is what happened in the Health Canada approvals process from April 1, 2007 to May 1, 2009, as Apotex sought to obtain approval for its generic product. That evidence is central to the Applicants’ claim that Apo-lansoprazole could not and would not have been approved by Health Canada at any relevant time.
63The Applicants claim that deficiencies in the ANDS submitted by Apotex to obtain approval and a NOC for a generic version of the Applicants’ drug is critical to this motion. In its ANDS, Apotex was required to compare its generic version to the innovators drug (the “Canadian reference product”), that is, to compare Apo-lansoprazole to Prevacid®. When comparing a generic version to the Canadian reference product, Health Canada focuses on the safety and effectiveness of the generic drug. Safety and effectiveness requirements for the generic version will be considered to have been met if the Minister is satisfied that the generic version is equivalent to the Canadian reference product in specified respects.
64In this case, once Health Canada was “satisfied” that Apo-lansoprazole was bioequivalent to Prevacid® and that the new drug product was safe and effective for its intended uses, the Minister was required to issue the Apo-lansoprazole NOC to Apotex unless precluded from doing so by the NOC Regulations. That process of Ministerial review proceeds independently, unaffected by the NOC Regulations, until the Minister determines that a NOC is issuable. At that point, however, the NOC Regulations may preclude the granting of the NOC. That is what happened in this case.
65Apotex submitted an ANDS for Apo-lansoprazole to the TPD of Health Canada on February 2, 2006. That ANDS included two comparative bioavailability studies that showed that Apo-lansoprazole was bioequivalent to the reference product, Prevacid®. In one of the studies, the participants were administered the generic drug after they had eaten a low-fat, low-calorie meal (the “fed study”). In the other study, the participants were administered the generic drug without food (the “fasted study”).
66At the same time that Apotex submitted its ANDS to Health Canada, four Canadian patents were listed on the Patent Register in connection with Prevacid®. Consequently, Apotex filed the four NOAs under the NOC Regulations, challenging those patents held by the Applicant or others. The Applicants retorted by commencing the Section 6 Proceedings. It is important to remember that the mere commencement of those Section 6 Proceedings created a bar to the issuance of a NOC for Apo-lansoprazole.
67Meanwhile, the review of the ANDS for Apo-lansoprazole was continuing. Apotex’s ANDS submission, including the fed study and fasted study it provided, were reviewed by Dr. Andrew Tam, one of Health Canada’s clinical evaluators for comparative bioavailability studies. That review process ended in April 2007 when Dr. Tam concluded that “the protocol for the administration of food and fluid is acceptable.” On that basis, he drafted a recommendation to the Director of Health Canada’s Bureau of Pharmaceutical Sciences (“BPS”) concluding that the standards for bioequivalence had been met, based on the data that had been submitted to him.
68After submitting his recommendation and following a review of other data submitted as part of the Apo-lansoprazole ANDS, Dr. Tam recommended to the Director General of the TPD, that “a Notice of Compliance be issued for this submission.” Thus, it is plain on the evidence that by April 17, 2007, Health Canada had completed its review of Apotex’s ANDS for Apo-lansoprazole and had found it to be satisfactory and approvable. Absent the stay mandated by the NOC Regulations in the face of Section 6 Proceedings brought by the Applicants, Health Canada would have issued a NOC for Apo-lansoprazole at that time.
69That NOC could not be issued, however, because of the ongoing Section 6 Proceedings. Dr. Supriya Sharma, the Acting Director General of Health Canada, instead sent a letter to Apotex on April 18, 2007 (the “Patent Hold Letter”) to advise it that:
… the examination of the Apo-lansoprazole submission has been completed on April 17, 2007. The [NOC] will not be issued until the requirements of the [NOC Regulations] are met.
70This was not the end of review procedures within Health Canada for Apo-lansoprazole. On December 4, 2007, almost eight months after Apotex would have received its NOC but for the Patent Hold that was in place owing to the ongoing Section 6 Proceedings, Health Canada sent Apotex another letter. Now it advised, changing its former position, that it no longer considered the Apo-lansoprazole ANDS approvable as of that time. Dr. Sharma’s letter stated that the fasted and low-calorie, low-fat fed study submitted were no longer considered adequate to establish bioequivalence.
71Given its significance, it is important at this juncture (i) to understand the bioequivalence assessment process and the use and relevance of the different studies, the low-fat, low-calorie fed study included by Apotex in its initial ANDS (the “low-fat study”), and the high-calorie, high-fat meal (the “high-fat study”) that Health Canada prefers and did not initially, but did later require to be submitted by Apotex.
72The high-fat study is the form of fed study that Health Canada’s Guidance Documents (the “Guidance Documents”) indicates is to accompany an ANDS. There is no suggestion in the Guidance Documents that a low-fat study may be supplied in lieu of the high-fat study. However, as the following paragraphs note, Apotex had a specific basis for deviating from the standard fed study and instead using the low-fat study.
73Noting that the fed bioavailability study was “not conducted under the standard fed conditions,” Dr. Sharma referred in her letter to the Health Canada Guidance Documents and its description of the type of meal that is to be used, a “representative meal in which sufficient food is given to allow potential perturbation of systemic bioavailability of the drug from the drug product.” In other words, the study must include sufficient food to demonstrate and permit assessment of the absorption and rates of dispersal of the drug into the body and thus its bioavailability to the reference product. Those factors are to be assessed in the face of a meal that would “perturb” or resist or agitate against the required dissemination of the drug product into the body of the subject.
74Dr. Sharma stated that the low-fat meal employed in Apotex’s fed study “would not appear to be sufficient in promoting the greatest perturbation of systemic availability of the drug from the drug product.” She asked Apotex to justify the choice of meal that it had used in the fed study, and requested that it provide the results of any bioavailability study or studies in which the participants were administered Apo-lansoprazole after having been fed a high-calorie, high-fat meal.51 Apotex responded to this request on January 17, 2008.
75On August 1, 2008, Health Canada wrote to Apotex to advise that the January 17, 2008 response had been reviewed, and it asked once again if other studies in the fed state had been conducted. Apotex responded on August 6, 2008, forwarding the results of a high-fat fed study. The results of that study revealed that Apo-lansoprazole was not bioequivalent with Prevacid® under high-calorie, high-fat meal circumstances. However, Apotex also included an external expert opinion supporting its justification for its continued reliance on the initial low-fat fed study to demonstrate bioequivalence.52 That expert opinion stated that the low-calorie, low-fat meal was clinically more meaningful to the establishment of bioequivalence because of the particular conditions prescribed for the ingestion of Apo-lansoprazole.
76Dr. Sharma obviously remained unconvinced because in October 2008, after it had reviewed Apotex’s August 6, 2008 response to its request, Health Canada recommended that a Notice of Non-compliance – Withdrawal (“NON-W”) be issued for the Apo-lansoprazole product and submission. The issuance of a NON-W means that the Health Canada TPD considers the submission “incomplete” or otherwise deficient, and the submission is considered withdrawn, but without prejudice to it being re-filed.
77Nevertheless, a NON-W was not issued at that time.53 Instead, the TPD first sought advice from the Scientific Committee on Bioavailability and Bioequivalence (“SAC-BB”). The SAC-BB met four months later, on February 24, 2009. It recommended that since the high-fat fed study showed that Apo-lansoprazole was not bioequivalent to Prevacid®, Apo-lansoprazole should not be approved. There was no reference to Apotex’s earlier response and the expert opinion Apotex had tendered that a low-calorie, low-fat meal was clinically more meaningful to the establishment of bioequivalence because of the particular conditions prescribed for the ingestion of Apo-lansoprazole.
78After receiving the Committee’s opinion, Health Canada issued a NON-W.54 This was followed on March 4, 2009, by another letter from Dr. Sharma explaining her position why Apotex’s submission did not meet Health Canada’s requirements. She indicated that the purpose of conducting bioequivalence studies under fasting and high-calorie, high-fat conditions “is to test both ends of the spectrum in order to challenge the formulations and reveal differences in the performance of the test and reference products.” She concluded the letter as follows:
In order to gain approval of an ANDS for lansoprazole delayed-release capsules pursuant to Section C.08.002.1 of the Food and Drug Regulations, demonstration of bioequivalence under fasted and standard fed (high calorie, high fat) conditions with the Canadian reference product is required. [Emphasis added.]
79Notwithstanding the seeming finality of this position, after receiving the NON-W, Apotex resorted to Health Canada’s Reconsideration Process. That process permits sponsors of a submission to invoke an appeal from final decisions of the TPD relating to new drug submissions.55 The Reconsideration Process provides for a scientific matter to be referred to a panel of experts on the subject matter in dispute. The panel is tasked with receiving submissions from both the sponsor of the ANDS and the Bureau within the TPD that conducted the review and then offering its recommendations on the dispute.
80This resulted in an expert panel being convened to meet with Apotex and the TPD on May 1, 2009. On May 7, 2009, however, it reached exactly the same bioequivalence conclusion that Dr. Tam had reached over two years before, albeit for slightly different reasons. The panel recommended that Apo-lansoprazole “be considered bioequivalent to Prevacid® on the basis of the fasting and low-fat fed studies submitted” (emphasis added). 56 Although the high-fat fed study conducted by Apotex showed that the products were not bioequivalent under high-fat fed conditions, since those conditions were not within the recommended parameters for clinical use, the negative high-fat fed study did not detract from a finding of bioequivalence based on the lower-fat fed and fasted studies.57
81As such, at the end of this long and tortuous process, Apo-lansoprazole was indeed finally approved for marketing and sale and a NOC was issued for the drug by Health Canada. When cleared for sale, Apo-lansoprazole remained in exactly the same form in which it had initially been submitted for consideration, but that NOC was still not issued until June 2009. After the expert panel returned its recommendation, Health Canada spent yet another month looking into the product again on its own and requested that certain descriptive changes be made to Apotex’s usage circular and descriptions of the product. Importantly, however, I emphasize again that the Apo-lansoprasole product that was finally approved for sale in June 2009 was the exact same product as had been submitted for review by Apotex in February 2006, and in respect of which Apotex received a Patent Hold Letter from Health Canada in April 2007.
82Finally, apart from the chronology of this approvals process, it is significant that further important evidence was gathered for this motion: the evidence of Dr. Craig Simon, the Associate Director of BPS, and secondly, Ms. Suzanne Picard, an expert retained by Apotex who supplied important affidavit evidence relating to the Apo-Lansoprazole approvals process.
83Dr. Simon testified about Health Canada’s review of Apotex’s ANDS for Apo-Lansoprazole. Abbott and Takeda summonsed Dr. Simon to submit to an examination under Rule 39 in aid of their position on these motions. During his examination, however, Dr. Simon was clear that absent the NOC Regulations and the Section 6 Proceedings, Apotex would have received its NOC for Apo-Lansoprazole on or around April 16-18, 2007:
Q. And to be very clear for our record, meaning that on that date BPS recommended that Notices of Compliance for 25 Apolansoprazole 15 milligram and 30 milligram delayed-release capsules be issued?
A. That is correct.
Q. And on that date, or on the next days following, a Notice of Compliance or Notices of Compliances were not issued to Apotex; correct?
A. That's correct.
Q. And the reason they were not issued to Apotex was because there were patents that had been listed on the Patent Register that were the subject of proceedings under the NOC Regulations?
A. That's my understanding, yes.
Q. In the absence of those proceedings, a NOC would have been issued on or around April 16, 17 or 18th?
A. Yes.58
84Notably, Dr. Simon’s testimony is the very evidence the Applicants identified as “necessary to make the relevant findings” on the “narrow” and “dispositive” issue of “whether, in the absence of the NOC Regulations, the Minister would have issued a NOC to Apotex for its Apo-lansoprazole in April 2007.” Contrary to that assertion, however, Dr. Simon’s testimony confirmed what was plain on the record and what the Patent Hold Letter had advised almost a decade earlier: but for the NOC Regulations, Health Canada would have issued a NOC for Apo-lansoprazole on or around April 18, 2007. There is no evidence to the contrary.
85Finally, there is the evidence of the expert witness, Ms. Picard, on what the impact would have been of the December 7, 2007 letter from Dr. Sharma. Ms. Picard states as follows in her affidavit at paras. 82-88:
As I mentioned previously, after the initial review of the ANDS was completed, in an internal memorandum dated April 16, 2007, the Bureau of Pharmaceutical Sciences recommended "that a Notice of Compliance be issued for this submission".
However, as Health Canada explains in Management of Drug Submissions, which I have reproduced in Exhibit "N", while an NOC would ordinarily have been issued on that day, the PM(NOC) Regulations prevented the issuance of an NOC, and the submission was instead placed on patent hold: When, upon completion of the review of a submission, a NOC would be issuable but for the provisions of the Patented Medicines (Notice of Compliance) Regulations, the sponsor will be so notified. The sponsor will also be notified of the date that the submission would have been eligible to receive a NOC but for the provisions of the Patented Medicines (Notice of Compliance) Regulations. In these circumstances, a NOC will not be issued until all matters under the Patented Medicines (Notice of Compliance) Regulations have been resolved; until this time, the submission will be placed on "Patent Hold".
Therefore, in a hypothetical world, absent the PM(NOC) Regulations, Apotex would have been granted an NOC for its Apo-Lansoprazole ANDS on or about April 17, 2017. Apotex would then have been authorized to sell Apo-Lansoprazole on the Canadian market.
In this hypothetical world, if for any reason Health Canada became concerned about the low-fat fed state bioequivalence study on December 4, 2007, the NOC would not have been suspended or revoked. The Minister can only suspend an NOC under exceptional circumstances, none of which would have applied to Apo-Lansoprazole. Section C.08.006 (2) of the FDR provides as follows:
“The Minister may, by notice to a manufacturer, suspend, for a definite or indefinite period, a notice of compliance issued to that manufacturer in respect of a new drug submission or an abbreviated new drug submission or a supplement to either submission, if the Minister considers
(a) that the drug is not safe for the use represented in the submission or supplement, as shown by evidence obtained from (i) clinical or other experience not reported in the submission or supplement or not available to the Minister at the time the notice of compliance was issued, or (ii) tests by new methods or tests by methods not reasonably applicable at the time the notice of compliance was issued;
(b) that, upon the basis of new information obtained after the issuance of the notice of compliance, there is lack of substantial evidence that the drug will have the effect it is represented to have under the conditions of use prescribed, recommended or proposed by the manufacturer;
(c) that the submission or supplement contained an untrue statement of material fact;
(d) that the manufacturer has failed to establish a system for maintaining required records or has repeatedly or deliberately failed to maintain such records,
(e) that, on the basis of new information obtained after the issuance of the notice of compliance, the methods, equipment, plant and controls used in the manufacturing, processing and packaging of the drug are inadequate to assure and preserve the identity, strength, quality or purity of the new drug, or that, on the basis of new information obtained after the issuance of the notice of compliance, the labelling of the drug is false or misleading or incomplete in any particular and that this defect was not corrected by the manufacturer upon receipt of a written notice from the Director specifying the respect in which the labelling is false or misleading or incomplete.”
None of the conditions to support the suspension of a NOC listed above is applicable to the Apo-Lansoprazole submission. Health Canada never questioned the safety of Apo-Lansoprazole either prior to placing the submission on patent hold, or subsequently. All reviewers assigned to the review of Apo-Lansoprazole ANDS agreed that there were no safety concerns.
Based on my experience, in the hypothetical world in which Apotex received its NOC on or about April 17, 2007, if for any reason Health Canada subsequently questioned the parameters of the fed study Apotex submitted with its ANDS, it would have initiated discussions with Apotex. Those discussions would have been designed to reach a consensus between the parties that could have resulted in modifying the Product Monograph to ensure that it clearly stated that the drug should be taken in a fasted state. These discussions occurred in the real world as well, in May 2009, where Health Canada requested that the information about the high-fat fed study #AA74046 be added to the Product Monograph, and where Apotex removed any reference to "Alternative Administration Options" under which the medication could be taken with applesauce or juice.
Therefore, in my opinion, in the hypothetical world where there is no patent barrier to the marketing of Apo-Lansoprazole, Apotex would have received its NOC on April 17, 2007, and thereafter would have been allowed to sell it on the Canadian market. Even if Health Canada later raised a concern about the bioequivalent studies in the ANDS after the NOC was granted, Apo-Lansoprazole sales would not have been disrupted, since the NOC would never have been suspended.
86In summary, against this evidentiary background, the Applicants ask the court to dismiss the s. 8 damages claimed by Apotex on the basis of claimed non-compliance with the regulatory framework and an allegation that Apotex’s Apo-lansoprazole submission to Health Canada could not have been approved in April 2007, and, notwithstanding the evidence, was not in fact approved until after May 2009.
7. Analysis
87Abbott and Takeda’s core argument on this motion is that the issuance of a Patent Hold Letter to Apotex was a mistake. Absent that mistake, they claim no NOC for Apo-lansoprazole (or Patent Hold Letter owing to the Section 6 Proceedings), could have, would have, or should have been issued to Apotex until the final approval was provided in June 2009. On this basis, the Applicants claim that Apo-lansoprazole was not legally approvable until June 2009, after the two-year statutory stay period. Consequently, they say that regardless of the NOC Regulations, no s. 8 damages would have accrued to Apotex.
88The elements of this position, all claimed to be supported by the evidence set out in the records filed on this summary judgment motion, including the evidence of Dr. Simon, include that:
(i) Apotex failed to include the standard high-fat study in its Apo-lansoprazole ANDS submission,
(ii) that Dr. Tam should not have made his recommendation,
(iii) that Dr. Sharma did not know about the deviance from the standard high-fat study until December 2007 when she revoked Apotex’s Patent Hold Letter for the drug,
(iv) that no NOC was accordingly capable of being issued approving of the drug at the time the Patent Hold Letter was issued, and
(v) that the drug was not actually approved until June 2009 after Apotex was required to make further and different submissions in support of the bioequivalence, safety and effectiveness of Apo-lansoprazole.
89The Applicants’ request that this court dismiss Apotex’s s. 8 damages claim is thus based exclusively on an allegedly mistaken approval by Health Canada of the April 17, 2007 Patent Hold Letter to Apotex at a time when they claim Apo-lansoprazole was not legally approvable, since, in their submission, no NOC for Apo-lansoprazole (or Patent Hold Letter owing to the Section 6 Proceedings), could, would or should have been issued to Apotex until after June 2009.
7.1 Was Apo-lansoprasole legally approvable under the FDA and the FDA Regulations before June 2009?
90In considering whether Apo-lansoprazole was legally approvable before June 2009, it bears looking at the evidence of the role played by Dr. Andrew Tam, who was the Health Canada official who actually reviewed the Apotex ANDS submission for Apo-lansoprazole and issued the recommendation in April 2007 that the drug be approved. The testimony of Dr. Craig Simon who was produced by Health Canada to be cross-examined at the request of the Applicants under Rule 39 is also important. Finally, I also found the affidavit evidence of Ms. Suzanne Picard, the Respondent’s expert who prepared a lengthy and detailed affidavit in support of the position of Apotex and who was extensively cross-examined on her affidavit, to be helpful and essentially unrefuted.
91In its factum, Abbott sought to undermine the validity of Dr. Tam’s determination that, based on the data submitted in support of bioequivalence, the standards for bioequivalence had been met59, by seeming to call his qualifications into question.60 However, in my view, Abbott’s assertions about Dr. Tam are neither supported by the testimony of Dr. Simon, as Abbott claims, or any of the other evidence. Contrary to Abbott’s assertion, there was no evidence that Dr. Tam was “not the normal reviewer”, even if the submission would otherwise likely have been reviewed by Dr. Simon had he not been away at French language training at the time. Nonetheless, Dr. Simon’s evidence shows that at least Health Canada was obviously satisfied with Dr. Tam’s qualifications to do this and other drug bioequivalence assessments at that time. This is evident because Dr. Tam was in fact “authoring recommendation memoranda” with respect to NDS and ANDS drug submissions at that time in his capacity as the Acting Manager of the bioequivalence assessment group. That was presumably in addition to his duties as one of the clinical evaluators of bioavailability studies at Health Canada.61
92Of greater concern on this motion is Abbott’s assertion in the same paragraph that “Dr. Simon’s evidence [was] that Dr. Tam should not have made his recommendation.” To the contrary, Dr. Simon offered no testimony about what Dr. Tam should have or should not have done. Rather, Dr. Simon merely testified that if he had been conducting the assessment, he would have asked for more information. He did not testify that what Dr. Tam did was incorrect.62
93In any event, given what actually occurred, it is irrelevant to this motion what Dr. Tam should or should not have done in hindsight. There is no question that on April 16, 2007, following the review of other data submitted as part of the ANDS, the Director of Health Canada’s BPS recommended to the Director General of the TPD “that a Notice of Compliance be issued for this submission”. Dr. Sharma, then Acting Director General of Health Canada, acted on that recommendation because she did issue the Patent Hold Letter to Apotex on April 18, 2007, without any evident further review at that time.
94Accordingly, the record clearly shows that but for the Section 6 Proceedings that were then ongoing at the instance of the Applicants, a NOC would have been issued for Apo-lansopraszole on April 18, 2007. Since those proceedings prevented the NOC from being issued, Dr. Sharma simply advised Apotex that the examination of the Apo-lansoprazole submission had been completed and that the NOC would not be issued until the requirements of the NOC Regulations had been met. Importantly, however, her correspondence plainly shows that by April 17, 2007, Health Canada had completed its review of Apotex’s ANDS for Apo-lansoprazole, found it to be satisfactory and approvable, and, absent the Section 6 Proceedings under the NOC Regulations, would have issued a NOC for the product.63
95Moreover, there is nothing in the evidence that suggested that the review and various recommendations that were made in relation to the review of the Apo-lansoprazole ANDS were completed in anything other than the ordinary course and pursuant to the usual chain of command within Health Canada. I note specifically that the applicants made no claim to the contrary. Given that Dr. Sharma did not provide her own evidence in these proceedings, the only inference that can reasonably be drawn is that Dr. Sharma received Dr. Tam’s recommendation and relied upon it, as she was entitled to do, in issuing the Patent Hold Letter without undertaking any further independent review or investigation of her own. She received the approval recommendation that had been made and exercised her discretion as the Minister’s delegate to issue Apotex the Patent Hold Letter.
96This was not mistaken and was entirely appropriate, in my view, given that Dr. Tam was at that time the Acting Director of the Group. Neither should it be surprising that the Acting Deputy Director General relied upon the report, information and recommendation provided by Dr. Tam and issued the Patent Hold Letter without further ado, given his evident qualifications and senior roles within Health Canada. So inevitably, I find that the issuance to Apotex of the Patent Hold Letter for Apo-lansoprazole definitively establishes that a NOC for the generic product not only could have, but would have been issued on April 17 or 18, 2007, but for the litigation instigated by the Applicants under the NOC Regulations.
97I turn next to address the Applicants’ arguments that the Minister could not approve Apotex’s submission because it did not legally comply with the Food and Drugs Act or the Food and Drug Regulations.64 This more refined argument is premised on the assertion that Apotex’s submission “did not in fact comply with the applicable health regulatory laws in April 2007”, or as the argument has more recently been formulated, that the Minister could not “lawfully” approve Apotex’s submissions absent strict adherence to the standard “high-fat high-calorie” test meal being given to participants as set out in the Health Canada Guidance Documents.
98The Statements of Defence and counsel’s April 6, 2016 letter raise the same issue: given Apotex’s purported non-compliance with the Food and Drugs Act and the Food and Drug Regulations (the regulatory laws), could or would the Minister have lawfully approved Apo-lansoprazole in April 2007, and could or would a NOC have issued for Apo-lansoprazole at that time in the absence of the Section 6 Proceedings? I note in passing that the Applicants never raised an argument whether the Minister should have issued a NOC or Patent Hold Letter in their factums, though it arose obliquely in their submissions and I will comment on that later.
99As described above, s. C.08.002(1) of the governing FDA Regulations provides that no person shall sell a new drug unless the Minister has issued a NOC in respect of that drug. The division of the Food and Drug Regulations that is applicable to the approval of new drugs is Division 8. Section C.08.002.1(2) provides that a NDS or ANDS must “contain sufficient information and material to enable the Minister to assess the safety and effectiveness of the new drug”. Thus to obtain approval to sell Apo-lansoprazole, Apotex had to file an ANDS in accordance with section C.08.002.1(1) and establish the safety and efficacy of its proposed product through a comparison to a Canadian reference product.
100Section C.08.002.1(2)(c) provides that the ANDS shall include results of comparative studies conducted in connection with the submission to show that the new drug is the pharmaceutical equivalent of the Canadian reference product and, if the Minister considers it necessary, bioequivalent. Importantly, however, the Food and Drug Regulations do not contain any legislative stipulation mandating the use of any particular type of comparative study. Section C.08.004(1) provides that after examining the ANDS, the Minister shall either issue a NOC or notify the manufacturer that the ANDS is not satisfactory.
101The words of the regulation show that Parliament chose not to mandate the provision of any particular type of comparative study or other information in an ANDS submission to Health Canada to inform the determination of whether a proposed generic drug is bioequivalent to the Canadian reference product or on any other matter. This is not surprising because at its heart, the decision whether to approve a new drug or a new generic drug is an entirely discretionary process.
102The Food and Drug Regulations grant wide discretion to the Minister, acting through his or her delegates, to approve or not approve new drugs. This is sensible since Health Canada’s review of a new drug and the determination of whether the Minister should ultimately approve the drug for sale is focused on its safety and effectiveness. Section C.08.002.1(2) does provide as a legal stipulation that the ANDS contain sufficient information and material to enable the Minister to make the required assessment of safety and effectiveness. Thus, the breadth of that discretion is plainly intentional, and the decision in Apotex Inc. v. Canada (Attorney General)65 shows that neither the Minister nor her delegates can lawfully fetter that discretion in any way, including, specifically, through the application of policy statements and/or Guidance Documents.
103Nevertheless, as noted, Health Canada has published Guidance Documents relative to the content of NDS and ANDS submissions, relating to a variety of matters that it would take into account in its consideration and the exercise of its discretion whether to grant a new drug or a new generic drug a NOC under the Act and Regulations. The Guidance Documents that were in effect at the time that Apotex made its ANDS in respect of Apo-Lanaoprasole were published by the Minister in 2005. On its face, the Guidance Documents indicate that they are intended to communicate to interested parties the Minister’s “preferences” in respect of new drug submissions. The Guidance Document itself emphasized on its face, however, that it did not have the “force of law” and, in fact, was intended to allow for “flexibility in approach.”
104I found it telling and ironic that neither of the Applicants seemed willing to focus in their arguments on what the actual legal requirements were under the FDA Regulations, apart from claiming that the administrative Guidance Documents should be treated as legally binding. On two occasions during the hearing I asked Abbott’s counsel to speak to the legal requirements of the drug approvals and bioequivalence assessment process, but neither request yielded a direct or satisfactory response. I understood that reticence, however, because as the following paragraphs explain, the “process” preferences that counsel tried to persuade me were legally binding are merely administrative. They plainly do not have legal force. As such, I am not persuaded as a matter of law that the Apo-lansoprazol product was not legally approvable at April 17, 2007, and that absent the Section 6 Proceedings, a NOC could not or would not have been issued to Apotex on that date.
105Further, even if this were not the case and even absent Ministerial acknowledgment that the Guidance Documents do not have the force of law, the jurisprudence makes plain that the only legal requirements that can be enforced or that can affect the exercise of Ministerial discretion are those enacted by Parliament or its validly authorized delegates. In this case, relative to the approval of a new drug or a new generic drug, that is the Food and Drugs Act and the Food and Drug Regulations. The decision of the Federal Court of Appeal in Stemijon Investments Ltd. v. Canada (Attorney General)66 reinforces that reality, cautioning that:
Decision-makers must follow the law. If the law gives them discretion of a certain scope, they cannot, in a binding way, cut down that scope. To allow that is to allow them to rewrite the law. Only Parliament or its validly authorized delegates can write or rewrite law.
106Finally, it is noteworthy that in the context of s. 8 cases, other attempts to rely on the Guidance Documents as the basis to allege a regulatory breach, as the Applicants have in this case, one of which was attempted by the Respondent in another case, have been rejected specifically because they are not “applicable laws”: see Teva Canada Limited v. Pfizer Canada Inc.67 and Apotex Inc. v. Astrazeneca Canada Inc.68
107Even though Guidance Document pronouncements do not have the force of law and cannot be claimed to create legal requirements that must be met by an innovative or generic drug manufacturer as a statutory precondition to the ability to have their drug products approved and to receive a NOC, I accept that they do set out the Minister’s preferences for the content of submissions. Specifically, in this case, as part of the assessment process and to permit the bioequivalence of Apo-lanaoprasole to Prevacid® to be determined, the Minister published a Guidance Document pertaining to the administration of the drug in a “fed state” and a “fasting state”, that stipulates the protein and fat content of the meal administered to participants in fasted studies. The standard test preferred by the Minister is the high-fat, high-calorie meal. This is not disputed.
108However, the Guidance Documents do not create a legal requirement binding on the Minister. These administrative guidelines are nowhere stated to be mandatory, do not set absolute requirements and most importantly, cannot preclude the Minister from reviewing the contents of each submission received on the basis of its actual scientific merits.69 Dr. Simon’s evidence indirectly makes the same point when acknowledging that absent the high-fat fed study, he simply would have asked for more information from Apotex. The point is that they are non-binding and in the exercise of her discretion, the Minister is at liberty to not apply them. They are not a statutory pre-condition to the receipt of approval or a NOC.
109There was no evidence before the Court to support the Applicants’ theory that the Minister could not issue a NOC in respect of Apo-lansoprazole in the absence of a high-fat fed study, and they did not file any affidavit evidence to support their hypothesis. The Applicants sought and obtained the opportunity to examine a representative of the Minister. During that examination they could have, but did not, ask the question whether it was the Minister’s view in April 2007 that she was lawfully prohibited from issuing a NOC (or Patent Hold Letter) in the absence of a high-fat fed study. In fact, the actual testimony adduced shows that the Minister would have issued a NOC on or about April 17, 2007, regardless of the absence of that particular study.70
110Neither did the Applicants adduce any expert evidence in support of their theory. The only expert who testified was Ms. Picard. She holds a master’s degree in hospital pharmacology and has 25 years’ experience in pharmaceutical regulatory affairs. In her testimony, Ms. Picard explained that non-adherence to the Guidance Documents does not amount to non-compliance with “applicable laws”. This is evidence that certainly would appear to adhere to the judicially recognized fact that the Health Canada Guidance Documents are just that, and have no force of law. Indeed, I note again that they explicitly state on their face that they have no legal force.
111Ms. Picard further explained why the Guidance Documents allowed flexibility to address the unique circumstances of any given drug, flexibility that was necessary in the case of Apo-lansoprazole. The Applicants did not adduce any contrary evidence to the opinion of Ms. Picard. As such, I find that the Applicants have failed to meet the evidentiary burden on them to prove that Apotex did not legally comply with the Food and Drugs Act or the Food and Drug Regulations71, by reason of not following the preferences stipulated in the Guidance Document. Further, I reject the contention that the Minister could not “lawfully” approve Apotex’s submissions absent strict adherence to the fed and fasted meal standards set out in the Health Canada Guidance Document.
112Finally, I turn to the Applicants’ argument that a NOC would not have issued for Apo-lansoprazole on or about April 17, 2007. In my opinion, the totality of the evidence not only shows that proposition to be false but indeed proves the contrary.
113The “narrow but dispositive issue” presented by the Applicants for determination was whether Apotex would have received a NOC for Apo-lansoprazole in the absence of the NOC Regulations on or about April 17, 2007. It is difficult to understand how this claim can be made because the Patent Hold Letter could not be any clearer on its face. In the absence of the Section 6 Proceedings brought by the Applicants under the NOC Regulations, there is no doubt, as Dr. Simon acknowledged in his testimony, that a NOC would have issued on or about April 17, 2007.
114Further, as noted above in paragraph 28, on August 29, 2016, the Applicants delivered a summons upon Dr. Supriya Sharma, another delegate of the Minister, which set out the only two questions they wished to pose to her. Notably, neither question sought to answer the simple question – what would have happened on or about April 17, 2007, in the absence of the NOC Regulations? In the Minister’s counsel’s email, the answer of Dr. Simon was adopted as being the same for Dr. Sharma, i.e., Dr. Simon answered this question and his answers were accepted as being the same as what Dr. Sharma’s answers would have been if she had been asked the same questions.
115In contrast to the absence of evidence led by the Applicants, Apotex did lead both expert and factual evidence in respect of that “narrow but dispositive issue.” Ms. Picard reviewed all of the documents relied upon by the Applicants and opined that in the absence of the NOC Regulations, Apotex would have received its NOC for Apo-lansoprazole on or about April 17, 2007, and such NOC would not have been revoked at any time thereafter. Abbott’s counsel asked Ms. Picard 449 questions on cross-examination yet did not challenge her evidence in respect of the “narrow but dispositive issue.” Takeda’s counsel asked no questions at all.
116During Dr. Simon’s examination, as shown above at paragraph 83, Apotex’s counsel addressed the “narrow but dispositive issue” directly and unequivocally. Dr. Simon was asked what would have happened on or about April 17, 2007, in the absence of the Regulations. Dr. Simon confirmed unequivocally that a NOC would have issued to Apotex at that time. Neither of the applicants re-examined Dr. Simon to challenge his factual evidence that, in the absence of the Section 6 Proceedings under the NOC Regulations, Apotex would have received its NOC on or about April 17, 2007.
117In summary, I find the Applicants’ position on this summary judgment motion to be without factual or legal foundation or merit, based on the unrefuted evidence, the applicable law that the preferences set out in the Guidance Document had no force of law and in the absence of any evidence to support the claim that Apo-lansoprazole “was not legally approvable, since no NOC for Apo-lansoprazole (or Patent Hold Letter owing to the Section 6 Proceedings), could, would or should have been issued to Apotex until after June 2009.”
7.2 Does the decision in Omeprazole defeat Apotex’s s. 8 damages claim?
118Before I leave these reasons, I am compelled to respond to the Applicants’ reliance on Apotex Inc. v. Canada (Health) (“Omeprazole (FCA)”)72 as authority denying Apotex’s right to claim damages. Apotex’s damages claim is based, at least in part, on the April 17, 2007 Patent Hold Letter it received from Health Canada. Apotex claims that Patent Hold Letter represents Health Canada’s “certification” of not only the bioequivalence, but also the safety and effectiveness of Apo-lansoprazole under s. 8(1) of the Patent Act.
119However, the Applicants claim that this letter was based on a fatal “mistake”, a mistake that “nullified” Dr. Tam’s approval recommendation and caused the issuance of the resultant Patent Hold Letter for Apo-lansoprazole to be “void ab initio,” as evidenced by Dr. Sharma’s December 2007 revocation letter. Since the Apo-lansoprazole patent hold is the foundation for Apotex’s s. 8 damages claim, the Applicants say the revocation of that status, combined with Apotex receiving a NOC for Apo-lansoprazole only after the May 2009 expiry of the statutory two-year damages period, means that Apotex never qualified for s. 8 damages and that its claim must be dismissed.
120The Applicants argue that the 2012 decision of the Federal Court of Appeal in Omeprazole (FCA) shows that its Patent Hold Letter gives Apotex no vested rights in and to a NOC since Health Canada reversed its initial conclusions and revoked its patent hold status, allegedly on the basis of safety and efficacy.73 They argue that decision determined that, in those circumstances, Apotex has no NOC entitlement and Health Canada would be remiss in granting one.74
121The Applicants argue that it is inconsistent with the scheme of the NOC Regulations to interpret s. 8 as creating a damages claim based on approvability or certification of the drug, when the approval was allegedly given by mistake and the patent hold status was subsequently revoked. They claim that such a reading would lead to unspecified but allegedly absurd and unjust outcomes that were never intended by Parliament. As such, Abbott and Takeda assert that Apotex’s patent hold status was of no legal effect and that its s. 8 damages claim should be dismissed on this ground as well. If Omeprazole (FCA) applies here, it is argued, it necessarily defeats Apotex’s claim. As such, I have considered whether the Omeprazole decision is on all fours or distinguishable in the circumstances of this case.
122Omeprazole also involved a generic drug manufactured by Apotex. However, importantly, that case involved an action by Apotex against the Minister of Health for judicial review of a Ministerial decision. It was not a case in which the generic manufacturer’s entitlement to damages against a named innovative manufacturer was at issue under s. 8 of the NOC Regulations. In Omeprazole, it is also noteworthy that the innovative manufacturer, AstraZeneca Canada Inc., was not a party to those proceedings, played no part and took no position on whether the Minister’s decision was correct or incorrect or whether it should properly be subject to judicial review by Apotex.
123Moreover, at the Federal Court in Apotex Inc. v. Canada (Health) (“Omeprazole (FC)”), Barnes J. would not have even considered the question whether Apotex had a vested right to a NOC were it not for the important fact that it related to the availability of judicial review of the Ministers decision, but that is entirely irrelevant here. The learned judge states in part as follows:
31 There is only one substantive issue raised by Apotex that I must resolve because it is arguably not disposed of by the failure to bring this application on a timely basis.
32 Apotex argues that it had a vested right to a NOC for its Apo-Omeprazole tablets when the Minister advised it on March 7, 2003 that the examination of Apo-Omeprazole had been completed subject to the application being placed on patent hold. If Apotex had such a vested right it may well have a corresponding entitlement to bring an application for prerogative relief to enforce the right at any time. Because I do not agree that Apotex has such a vested right, I need not decide whether the temporal requirement of subsection 18.1(2) of the Act applies to the determination of this issue.
33 It seems quite obvious to me that until a NOC is issued, a proponent enjoys no vested interest in a favourable outcome at least with respect to issues that properly fall within the Minister’s lawful discretion (ie. pertaining to public safety and efficacy). There is no legal significance attaching to an application for a NOC that has been placed on patent hold. The Minister is fully entitled to revisit scientific issues at any point in the process up to the actual issuance of a NOC. It is only at that point that the Minister’s examination is completed in accordance with C.08.004 of the Food and Drug Regulations, RSC 1985, c F-27. Indeed, given the lengthy delays that can arise, the Minister would be remiss if such applications were approved at the expiry of the patent hold period without further scrutiny: see Apotex Inc v Canada (MOH) … In this view, I am supported by the decision of Justice Roger Hughes in Ferring Inc v Canada. [Citations omitted; emphasis added.]75
124I will review the facts and circumstances in Omeprazole and their application to this case later in these reasons, but it is important to recognize at this juncture that Barnes J. was not considering whether Apotex’s patent hold status gave it a vested right to a NOC in the context of a damages claim under s. 8 of the NOC Regulations under the Patent Act. Rather, he was considering whether Apotex had a vested right to a NOC in the context of an application for judicial review of the Minister’s decision. If so, that could have given Apotex the legal entitlement to bring an application for prerogative relief by way of judicial review and to enforce that right at any time as against the Minister, notwithstanding its obvious failure to commence its application for judicial review within the stipulated 30 day period.
125Since Barnes J. concluded that Apotex had no such vested right, he was not called upon to determine whether the temporal requirement of subsection 18.1(2) of the Federal Courts Act 76 applied to the determination of Apotex’s right to seek and obtain judicial review of the Minister’s decision. The case had nothing to do with whether Apotex had a claim under the parallel, but separate, legislative regime relating to a generic manufacturer’s entitlement to damages for being denied market access by an innovative manufacturer’s Section 6 Proceedings. In my view, his decision and that of the Federal Court of Appeal that upheld it must be viewed within the unique context in which they were decided.
126Apart from the fact that Omeprazole (FC) and Omeprazole (FCA) arise in different contextual circumstances than are present in this case, I also found it ironic that the Applicants would argue that those decisions are determinative on this s. 8 damages case with such force and vigour. The reason, as I will explain, relates to the standing of the Applicants to take a position in response to a s. 8 damages claim under the Patent Act and Regulations in this proceeding, when the foundation for that position does not relate to the s. 8 regime itself but rather to an alleged mistaken approvals process within the parallel but separate Health Canada drug approvals process. The controlling jurisprudence shows that neither of the Applicants has standing to make this argument.
127I accept without reservation that courts must impute a rational intent to Parliament when interpreting statutory provisions.77 Legislatures are presumed not to intend absurd,78 or unjust consequences.79 The relevant context and legislative scheme must also be considered.80 Moreover, the decision of the Supreme Court in Bristol-Myers establishes beyond doubt that the separate pieces of legislation governing this area are tied together into one regulatory scheme:
The Food and Drug Regulations are intrinsically linked to the NOC Regulations given the usage in the latter of the instrument called the “notice of compliance” first introduced as a notice issued by the Minister under s. C.08.004 of the Food and Drug Regulations. 81
128Taken together, this legislation covers the federal regulation and approval of drug products and allows for Health Canada’s review of a generic’s drug submission in parallel with NOC proceedings under the Patent Act, between inventors of pharmaceuticals and generic manufacturers. Nevertheless, the question of a generic manufacturer’s entitlement to s. 8 damages under the NOC Regulations and the Patent Act is an entirely separate question from whether the Minister’s decisions arising out of the patented or generic drug approvals process may be challenged.
129The core of this argument by the Applicants against Apotex’s s. 8 damages claim focused, as they emphasized in argument, on “health and safety concerns”. As I reflected on the matter after the hearing, it did not surprise me that the Applicants changed their focus from what was legally required to a perspective of safety and efficacy, given that the Guidance Document does not have legal force, and that Dr. Simon’s evidence confirmed that but for the Section 6 Proceedings, Apotex would have receive a NOC for Apo-lansoprazole in April of 2007.
130In his succinct submissions relative to Health Canada’s obligation to ensure the safety and efficacy of pharmaceutical products, counsel for Takeda focused on two key words: “necessary” and “satisfaction”. As he expressed it, Health Canada’s view was that the high-fat study was “necessary.” He noted that even the reconsideration panel required Apotex to submit a high-fat fed study even though they did not rely on it at all. But, if it was considered “necessary”, even if not legally required, then without it, he argued, no NOC could issue because Health Canada could not be “satisfied” relative to the efficacy of Apo-lansoprazole. He argued it was not merely a guideline directive but rather what the Minister required and without which the Minister could not be satisfied of the efficacy of the drug, and without the Minister being satisfied, there could be no NOC issued and therefore, he concluded, there could be no NOC damages.
131While I disagree with this line of argument or its application here for reasons I will explain, the legislation does indeed show on its face that ensuring the health and safety of Canadians is fundamental to the federal regulation of drug products.82 The legislation also clarifies that (i) Health Canada is entrusted with the responsibility of evaluating drug product submissions in terms of safety and efficacy and (ii) that Health Canada may revisit its initial conclusions insofar as safety and efficacy are concerned, prior to the grant of a NOC, or even after a NOC is granted as Ms. Picard’s evidence shows. Even after a Patent Hold Letter has been sent to a generic manufacturer, Health Canada can subsequently change its view as to its approvability, which it did here, and it can revoke an earlier patent hold status given to a generic drug product. Similarly, it can question the safety or efficacy of a drug for which it has already issued a NOC (not subject to Patent Hold) and which is being legally sold under the authority of a Ministerial NOC.
132I accept that the Federal Court of Appeal concluded in Omeprazole (FCA) that Apotex could not bring a s. 8 claim for damages in the circumstances that were present in that case83 but it does not follow in these circumstances that the decision in Omeprazole (FCA) requires that Apotex’s s. 8 damages claim in the case of Apo-lansoprazole must be dismissed. In my view, the circumstances in Omeprazole (FCA) are entirely different from and not comparable to those present here. They are different and incomparable not only because the underlying facts are fundamentally distinct but also because, as the caselaw shows, the Applicants have no standing to inject themselves into the safety and efficacy process. Notwithstanding the linkage between the FDA Regulations and the Patent Regulations on which Abbott relies in its factum and argument, the enactment of the Patent Regulations did not change the fact that patentees like Abbott and Takeda have no right to enforce the FDA Regulations. Moreover, the Minister is not a party to these proceedings.
133In Merck Frosst Canada Inc v. Canada (Minister of Health) 84, Hugessen J. of the Federal Court specifically held that the linkage between the patent regime and food and drug safety regime established by the Patent Regulations did not confer upon patentees any right to object to the issuance of a NOC to a generic manufacturer on grounds of non-compliance with the FDA:
Turning now to the specifics of the present case, it is my view that the law is clear that Merck, as a patentee and holder of an NOC for a medicine does not have any right to raise non-compliance by the Minister with the Food and Drug Act or the Regulations made thereunder in respect of the issuance or proposed issuance of an NOC to another drug manufacturer. Specifically, Merck does not have the right to object to the issuance of an NOC to Apotex for the same medicine for which Merck holds an NOC on the grounds of non-compliance with that Act and those Regulations by either Apotex or the Minister.
It is not lack of standing or justiciability in the strict sense of those words which prevents the applicants from raising non-compliance with the health and safety concerns of the Food and Drug Act, and Regulations; it is simply that those matters are of no concern to them and cannot be raised by them in an attack on a decision of the Minister to issue an NOC. It is the Minister himself who is charged with the protection of the public health and safety and no private interest of the applicants arises from his alleged failure to perform his duties with respect to other persons. 85 [Emphasis added.]
134On appeal, Marceau, J.A. similarly explained:
In our judgment, the learned motions judge was right in denying the appellant standing to question before the Court, in these proceedings, the validity of the Minister’s decision to issue the Notice of Compliance on the sole basis that the Minister’s findings as regard the safety and efficacy of the drug would have been reached in an unsatisfactory manner. By deciding as he did, the motions judge was simply abiding by principles set down by many rulings of this Court and based, in our opinion, on a proper understanding of the type of responsibilities assigned to the Minister by Parliament in this context, as well as the nature of the judicial process and the role of a court of law. 86
135The patentee’s lack of standing to impugn decisions made under the FDA Regulations pertains equally to matters related to pharmaceutical equivalence and to matters related to health and safety: in both cases, a commercial interest alone is insufficient.87 Patentees do not have standing to speak to the date of approval any more than they have standing to speak to the merits or science of the submissions made to the Minister pursuant to the FDA Regulations.88 I accept the position of Apotex’s counsel that it is improper for the court, on a NOC prohibition application, to take into consideration the propriety of an ANDS; rather, the court should assume that the Minister does not ignore his or her legal duties under the FDA Regulations and would refuse to issue a NOC in the absence of a proper submission for approval.89
136The Federal Court recently refused a patentee leave to amend its statement of defence and counterclaim in a s. 8 damages action in order to plead that but for Apotex’s alleged misconduct with respect to the regulatory approval process for its ANDS, Apotex’s product would not have been approvable on the patent hold date. The Court found that this was an improper approach to constructing the “hypothetical world”:
To permit allegations which would allow Pfizer to second guess Health Canada as to the approvability of the First Apotex Product is to hijack this proceeding and turn it from a section 8 damages proceeding into a new and entirely different hypothetical world layered with an inquiry into what Health Canada might have done.
The fact is Apotex obtained approval for the First Apotex Product and Pfizer, in this proceeding, does not have standing to attack that decision. …
…The Regulations do not contemplate nor allow for a further hypothetical world as to what would have happened had information before Health Canada been different than that upon which it based its decision of approvability.90
137The Court was of the view that the proposed amendment “opens the door for Pfizer to transform this proceeding from a section 8 damages claim into an inquiry into what Health Canada might or might not have done in different circumstances. In my view they do not have the standing to do so.”91 Only amendments that went to quantum of damages rather than entitlement were allowed.92 The position advanced by Pfizer in that case is exactly the position advanced by the Applicants here, compounded by their assertion that the Minister made a mistake that voids ab initio the initial approval granted to Apotex by the Minister on April 17, 2007.
138Abbott cites no authority for the statement at paragraph 67 of its factum that “the April 17, 2007 patent hold status came about by mistake, which vitiates it ab initio”. I agree with Apotex that there is no such authority, at least in terms of that which was provided to me on this motion. The remedy for “mistaken” administrative action by the Minister or Health Canada is an application for judicial review, but no application for judicial review of the Minister’s decision in this case was available to the Applicant in April 2007, nor is it available now. Neither is there any suggestion either in the Applicants’ written materials, or in the evidence, that Health Canada’s actions were taken without jurisdiction or in excess of jurisdiction such that they might be considered void ab initio or null.93
139Moving on from the issues of contextual similarity and standing to attack the Minister’s conduct, or to assert that the Minister’s initial decision was void ab initio which allegedly defeats Apotex’s s. 8 damages claim, there are two fundamental problems with the entirety of this submission by the Applicants. The first is that it takes no account of what actually happened in this case, and that the circumstances relating to the actual approval of Apo-lansoprasole were entirely different from those that were present in the Omeprazole case. Moreover, there is no evidence here that Health Canada revoked Apotex’s Patent Hold Letter for Apo-lansoprazole for “safety or effectiveness” reasons. They revoked it for the simple reason that Apotex had not filed the exact high-calorie high-fat bioequivalence fasted study that is stated in the Guidance Document to be Health Canada’s preference. Moreover, they did so without any recognition that Dr. Andrew Tam, who approved of Apo-lansoprazole in the first place, was entirely aware that no high-calorie and high-fat fed study had been submitted but was nevertheless satisfied as to bioequivalence, based on the low-fat study that Apotex did submit. To my mind, this is the proper perspective from which to consider the application of Omeprazole (FCA) in this case.
140In the case of Omeprazole, Apotex had made submissions for the approval of Apo-omeprazole magnesium tablets. The Minister issued a NON-W relative to its ANDS submission, so Apotex requested a reconsideration of that submission. It was denied. As a result, Apotex brought an application for judicial review of the Minister’s decision, but it was made outside of the 30-day filing requirement, and in fact was made 12 months after the last impugned decision of the Minister. Apotex brought a motion to extend time but, as noted, this was dismissed by Barnes J. of the Federal Court, principally owing to the inability of Apotex to advance any compelling explanation for its lengthy delay in bringing the application. The court was concerned that to grant the extension would have opened the floodgates in other cases brought out of time and would effectively have extinguished the timely filing requirement.
141There are initial surface similarities between this case and Omeprazole (FCA). Initially the Minister had granted Apotex approvability status for the omeprazole tablets and Health Canada had sent Apotex a Patent Hold Letter as it did here. As Barnes J. notes in his initial decision denying judicial review, that initial Patent Hold Letter granted for omeprazole was subsequently revoked. Then the Minister issued the NON-W letter revoking the patent hold status94, and then, after Apotex requested reconsideration of that decision, the Minister denied that request as well. Apotex went through a largely similar process here but with an entirely different result.
142The Federal Court of Appeal ruled that Apotex’s Patent Hold Letter did not create a vested right to a NOC because Health Canada retained its discretionary jurisdiction to revisit the safety and efficacy of any drug submission even after a Patent Hold Letter had been sent, so long as a NOC has not yet been issued.95 The court reasoned that if Health Canada did revisit a prior patent hold decision, any later decision of non-approvability would and must necessarily supersede the earlier patent hold status and leave the generic manufacturer with no claim for s. 8 damages under the Patent Act:96
Returning to the analysis of Apotex’ claim to a vested right, it is next necessary to consider Apotex’ assertion that if the Minister’s decision to approve a submission could be revisited by the Minister, the date the submission was approved would not have been used as the referential starting point for the damage calculation under section 8 of the PMNOC Regulations. However, if the Minister revisits the initial conclusion and then decides not to issue a NOC to the second party there will be no section 8 claim. [Emphasis added.]
The corollary of the last statement is plainly that if, having granted approval, the Minister revisits the initial conclusion but then decides later to issue a NOC to the second party consistent with the initial approval, there could still be a s. 8 claim and the generic manufacturer’s right to exert a s. 8 damages claim would not be defeated.
143The Applicants argue that to interpret s. 8 as giving effect to Apotex’s patent hold status on April 17, 2007, would be inconsistent with the overall purpose and scheme of the relevant legislation and that it would disregard the legislatively intended ability of Health Canada to revisit and reverse its conclusions as to the approvability of a generic drug submission at any time before a NOC is actually granted. It is claimed that to conclude otherwise would compromise Health Canada’s obligation to ensure the safety and efficacy of a generic drug product. They go so far as to claim that the result would be absurd because it would treat Apotex’s Patent Hold Letter as having created a vested right “in and to a hypothetical NOC, even though no vested right would exist in the real world.”
144Instead, they press for an interpretation of s. 8 that allows this court to consider Health Canada’s decisions after a Patent Hold Letter is issued, particularly a decision that revokes that patent hold status for reasons of safety and efficacy, claiming it would be consistent with the overall purpose and scheme of the relevant legislation97, and consistent with the Federal Court of Canada’s various determinations that “real world” events inform the s. 8 analysis.98 The Applicants claim this interpretation would avoid the alleged absurdity of a generic drug manufacturer being awarded damages for hypothetically selling a drug product during a period of time in which Health Canada had determined in the “real world” that the drug was not considered to be approvable (i.e., safe and effective for Canadians).
145I find, however, that the Omeprazole (FCA) case99 is of no assistance to the Applicants for the proposition that the Minister’s reconsideration of the approvability of Apo-lansoprazole in December 2007 somehow eliminates Apotex’s section 8 claim.100 Omeprazole was not a s. 8 case. Rather, as noted, Apotex sought an order of mandamus compelling the Minister to issue a NOC where the approvability status of the drug in question had been revoked after a Patent Hold Letter was issued and, most importantly, had never been reinstated. The Federal Court of Appeal decided that Apotex did not have a vested right to a NOC and observed that “if the Minister revisits the initial conclusion [that a product is approvable] and then decides not to issue a NOC to the second party there will be no section 8 claim.”101
146In my view, the Applicants misconstrue this observation as a holding that “any decision of non-approvability would take over the earlier patent hold status”.102 The Federal Court of Appeal did not make a general pronouncement of law; rather, the Court commented only on the obvious situation before it, namely, the product was never approved, the NOC was never granted, and no s. 8 right could therefore exist. No vested right could exist in the “real world” circumstances of the Omeprazole case because no approval was ever granted, and that decision was not reviewable.
147The circumstances here are the opposite of those in Omeprazole: here, the Minister has found the product to be approvable, the NOC has issued and Apotex has brought a s. 8 claim as provided by the Patent Regulations. Furthermore and contrary to the Applicants’ allegations, in this case, Apotex does not contend that it had a vested right to the issuance of a NOC as of April 17, 2007, but simply that a NOC would have issued on that date in the absence of the Section 6 Proceedings under the Patent Regulations.
148In contrast here, the Applicants’ argument ignores (i) that after internal review and reconsideration processes were followed, the Minister did approve Apo-lansoprazole for sale in June 2009, after receiving the recommendation of its expert panel, and (ii) that approval was for exactly the same Apo-lansoprazole pharmaceutical that had initially been approved. The “real world” facts of this case are that the drug was approved, then considered not to be approvable for a period of time, and then finally approved again. If Omeprazole were applied here, the Minister’s right to change her decision and then change back and restore an initial decision of approvability through the ordinary review process would defeat a generic manufacturers’ right to s. 8 damages for a drug that was initially and again ultimately found to be approvable in exactly the same form. This, in my view, would defeat the entire purpose of the s. 8 damages regime and Parliament’s intent in enacting it.
149Moreover, that final approval and NOC was granted on the basis that the fasted and fed study as originally submitted by Apotex did indeed establish bioequivalence. The only difference was that Apotex was required to submit to the legally non-binding governmental preference set out in the Guidance Document for a high-fat, high fasted study to be submitted. Importantly, while the bureaucracy may have demanded that study be provided, it formed no part of the final approval process for Apo-lansoprazole. The drug was finally approved in June 2009, confirming the original April 2007 approval, notwithstanding that the high-fat fasted study failed the bioequivalence test. Thus it is clear that results of the high-fat study had no impact on the ultimate decision to grant a NOC to Apotex for Apo-lansoprazole on the exact basis that the ANDS had originally been submitted and approved. This is not surprising given that the protocol for administration of the drug calls for it to be taken without food.
150Finally, the Applicants go on to assert that recognizing the nullifying effect of a non-approvable letter in s. 8 cases is also consistent with the Federal Court of Appeal’s decision in favour of Apotex in Apotex Inc. v. Sanofi-Aventis (“Ramipril (FCA)”). In that case, Apotex had been prohibited by the Federal Court from selling its generic drug ramipril until the expiry of a certain patent. The Federal Court of Appeal agreed with Apotex, however, that in light of a subsequent Federal Court ruling in respect of the same patent, both decisions had to be “read and understood together”, with the “overall net result of the combined effect of both decisions” being that the later decision effectively overtook the first and “‘unlocked’” the door to Apotex’s claim for s. 8 damages.103 By analogy, when Health Canada’s Patent Hold Letter is considered together with its subsequent revocation, the Applicants argue their combined effect is that the later non-approvable letter effectively locked the door to any s. 8 claim, but as the facts here show, the door was not locked.
151There can be no doubt that Parliament intended courts to have flexibility and broad discretion in considering whether a purported “certification” date is appropriate under s. 8. This is expressly provided for by s. 8(1)(a)(ii) of the Patent Act, which allows courts the ability to determine whether “a date other than the certified date is more appropriate” for the commencement of a s. 8 liability period.104 Indeed, the Federal Court has considered real-world events that take place after a patent hold date in determining whether it is or is not “appropriate”.105
152In my view, however, the Applicants’ reliance106 on the Ramipril (FCA) decision107 is equally misplaced. In that case, the argument was that the trial judge was “precluded by law” from finding any liability under section 8 until the effect of a prohibition order rejecting an allegation of non-infringement was effectively set aside by the dismissal of a second prohibition order accepting an allegation of invalidity.108 The Federal Court of Appeal, upholding the trial judge on this point, decided that the “net result of the combined effect” of the two decisions was that the listing of the patent on the patent register was not an impediment to the issuance of a NOC to Apotex.109
153The Ramipril decision has no application to Apotex’s action here, which does not involve a complex inquiry into the effect of conflicting decisions in related NOC prohibition proceedings, but requires only a purely factual investigation into what would have happened in the absence of the Patent Regulations, i.e. had the Section 6 Proceedings not been brought. The December 2007 questions by the TPD cannot retroactively affect what would have happened in April 2007 in the absence of the Section 6 Proceedings under the Patent Regulations. In any event, as I have repeatedly observed, Health Canada has in fact visited the issue of the approvability of Apotex’s lansoprazole product on three occasions (April 2007, December 2007, and June 2009). The “net effect” of those actions is that the product was originally approvable and approved, and at the end of that process it was again approvable and approved in exactly the same form it which it had always been presented and reviewed.
154While I accept that Omeprazole (FCA) will apply in cases where its particular fact situation is present, I find for all of the preceding reasons, relating to context, standing and actual factual comparability, that it is a case that is distinguishable from this one, and I reject the Applicants’ argument that Apotex’s claim for damages under s. 8 of the Patent Act is defeated by that decision.
8. Proceeding forward
155It follows from my findings that the Applicants’ summary judgment motion is dismissed. It remains to consider how this matter will proceed forward. However, the findings that led to the dismissal of the Applicants’ summary judgment motion carry several important consequences relative to the future of this action.
156To summarize, but for the Applicants’ Section 6 Proceedings under the Patent Act, Apotex could and would have received a NOC on April 17, 2007. The Guidance Document established no legal requirement that Apotex submit the high-fat fasted study that was ultimately demanded by Health Canada.
157Apo-lansoprazole was approvable and ultimately approved without a successful high-fat study, even if it was considered “necessary.” It was approvable and approved because Health Canada finally accepted and was “satisfied” that the failed fed study was irrelevant. As it turned out, it was not “necessary” to enable the Minister to be “satisfied”, because it was not an accurate indicator of the true efficacy of this particular drug. No one, other than Dr. Tam and ultimately the expert panel, appeared to recognize or accept that the drug was specifically described as having a different dispersal and absorption protocol, and even more importantly, was to be taken without food. The facts are plain. Dr. Tam was satisfied that the drug met the bioequivalence requirement without a successful high-fat fed study being necessary. Notwithstanding Dr. Sharma’s rigid insistence as of December 2007 that the high-fat study was “necessary” and that Apo-lansoprazole was not approvable without it, the expert panel that ultimately approved of the bioequivalence of the drug was obviously “satisfied” of safety and efficacy, as was Health Canada, regardless of the failure to qualify using that particular study.
158The notion that Apo-lansoprazole was not legally approvable and that no NOC (or Patent Hold Letter owing to the Section 6 Proceedings) could, would or should have been issued to Apotex until after June 2009, is a position I firmly reject. The facts of this case plainly establish that Apotex does have a s. 8 damages claim against the Applicants. The question is quantum. That conclusion will frame any trial that results from this failed summary judgment motion because the only determination still required is the amount of s. 8 damages to which Apotex is entitled. While a trial will be required to resolve that issue if the parties are unable to resolve that question on their own, it can be achieved through a shorter and more focused trial process.
159There is a second consequence that arises from my finding that the decision in Omeprazole FCA is distinguishable and does not control the outcome on this case. That consequence is that as the case proceeds to trial, the Applicants will not be permitted to revisit or pursue litigation avenues relating to the conduct of Health Canada. Apart from the fact that the circumstances in Omeprazole and this case are contextually foreign to each other, the Applicants have no standing to raise those issues. The conduct of Health Canada is irrelevant to the determination of damages.
160In this last section, I have addressed the remaining issues that could arise at trial and indicated the direction I envisage for the ultimate resolution of this dispute in my capacity as the Case Management judge and ultimately the trial judge. It is open to me to take steps to focus and narrow the issues that remain to be decided at a trial in order to resolve this dispute, but counsel will be invited to make submissions as part of the Case Management process before I make any final specific orders as to how we will proceed forward at trial.
161Given that I expect I will learn in due course that there have been very substantial costs incurred in bringing this motion, and I will need to hear from counsel on the matter of costs of this motion if they are unable to resolve costs on their own, it is important to recall that in Hryniak110 the Supreme Court supplemented the specific powers granted in Rule 20 and specifically addressed the steps I can take as Case Management judge to salvage this failed summary judgment motion. Rule 20.05(1) and (2) provide in part as follows:
20.05(1) Where summary judgment is refused or is granted only in part, the court may make an order specifying what material facts are not in dispute and defining the issues to be tried, and order that the action proceed to trial expeditiously.
(2) If an action is ordered to proceed to trial under subrule (1), the court may give such directions or impose such terms as are just…
162Other sub-rules of Rule 20 also provide guidance on the powers of the summary judgment motions judge and how this matter may proceed on a focused and expedited basis to a trial limited to the determination of the amount of damages that are due to Apotex under s. 8 of the NOC Regulations under the Patent Act. First, I note that it is generally understood that on a motion for summary judgment, judgment can be awarded in whole or in part against the moving party.111 Further, subrules 20.01(1) and (3) provide for the granting of partial summary judgment, as in this case, and Rule 20.04(3) permits a trial focused on damages to be ordered, where, as here, the only genuine issue is the amount of Apotex’s damages entitlement.
163As the judge who presided on both the first and second summary judgment motions between these parties, I have determined that I should be seized of the matter as the trial judge in the absence of compelling reasons to the contrary. It would be unfair and wasteful of time and resources to require a different judge to get up to speed, particularly having regard to the complex and specialized legal and regulatory framework of the Patent Act and the NOC Regulations that will govern this case as it proceeds to trial.
164Rule 20.05(2) outlines specific trial management orders that may be appropriate. As Hryniak emphasizes, I am entitled to set schedules, provide a restricted discovery plan, set a trial date, as well as requiring payment into court of the claim or an order for security for costs if appropriate. I am entitled to stipulate that affidavit evidence already produced in the course of the summary judgment motions may be used at trial, with further cross-examination as and if required and to ensure that there is the necessary evidential record before the court at trial to permit final resolution of the dispute between the parties, but without unnecessary further discovery and costs if it can be avoided.
165The results of this summary judgment motion establish that Apotex is entitled to s. 8 damages under the Patent Act regime, so the core question of liability no longer needs to be litigated at a trial. That claim potentially covers the maximum two-year statutory stay period that resulted from the Section 6 Proceedings commenced by the Applicants, running from April 2007 until May 2009. It covers the period specifically agreed to by these parties in the Settlement Agreement they reached in September 2008.
166The questions will be when should that entitlement commence, running until when, and in what amount? On the other hand, the Applicants have outstanding counterclaims against Apotex for patent infringement. Those claims will also need to be taken into account at trial in order to determine whether a net amount of damages are payable, and if so, in what amount.
167At present, and acknowledging that I have not heard submissions of the parties, the key questions will be
(i) What is the amount of damages that could otherwise be payable by the Applicants to the respondent Apotex for the two-year s. 8 statutory period?
(ii) Are there any factors upon which further evidence is required to permit that question to be resolved?
(iii) What is the amount of Apotex’s net entitlement to damages after taking account of the Applicants’ counterclaim for patent infringement and the provisions of s. 8 of the Patent Act?
168There was important evidence adduced on this summary judgment motion that can be applied at trial, relative to entitlement and damage quantification. However, there are also gaps in that evidence that will need to be filled before trial. For example, the amount of damages under s. 8 may be affected by a number of factors. Given that Apotex would have received a NOC on April 17, 2007, but for the Applicants’ Section 6 proceedings, that might naturally be thought to be the date the calculation of damages would commence. However, if Apotex was not ready to market and sell Apo-lansoprazole on that date then an accrual of damages starting on that date would be theoretical.112 Further, even if that were the correct date, it appears on the authorities that a “ramp-up period” of reduced sales must be factored into the damages calculation.113 Subject to these principles and evidence to the contrary, however, April 17, 2007, would prima facie appear to be the correct start date, particularly since it is the date the parties themselves contemplated in their Settlement Agreement. Nevertheless, I accept that there will likely need to be evidence adduced on that point and on the related principles concerning when sales of the product could actually have commenced, and on other factors that could go to the quantification of damages.
169There are other important questions beyond that which will need to be resolved at trial. Assuming that Apotex had received a NOC on April 17, 2007 and immediately started selling Apo-lansoprazole, the impact of the December 7, 2007 non-approval letter from Dr. Sharma must be considered. Would Apotex have been required to cease production and sale on that date, or would it only have been required to respond to Health Canada’s inquiries with no interruption in the marketing and sale of the product? If there would have been an interruption, then that could have an impact on the quantum of damages under s. 8. On the other hand, if no interruption would have occurred then that would suggest that Apotex should be entitled to damages for the entire statutory period.
170The final area that may need to be addressed at trial, at least in part, is that of the Applicant’s allegations of misconduct against Apotex. These are the additional claims made by the Applicants in their factum on this motion but which were not litigated because of my ruling that the motion would be argued within its original parameters.114 The applicants claim these are questions and areas that need to be plumbed to inform the application of s. 8(5) of the NOC Regulations.
171It is useful at this point to remember the operational rules. Section 8 of the NOC Regulations provides as follows:
8(1) If an application made under subsection 6(1) is withdrawn or discontinued by the first person [Abbott and Takeda] or is dismissed by the court hearing the application or if an order preventing the Minister from issuing a notice of compliance, made pursuant to that subsection, is reversed on appeal, the first person is liable to the second person [Apotex] for any loss suffered during the period (a) beginning on the date, as certified by the Minister, on which a notice of compliance would have been issued in the absence of these Regulations, unless the court concludes that … (ii) a date other than the certified date is more appropriate; and (b) ending on the date of the withdrawal, the discontinuance, the dismissal or the reversal. (2) A second person may, by action against a first person, apply to the court for an order requiring the first person to compensate the second person for the loss referred to in subsection (1). … (4) If a court orders a first person to compensate a second person under subsection (1), the court may, in respect of any loss referred to in that subsection, make any order for relief by way of damages that the circumstances require. (5) In assessing the amount of compensation the court shall take into account all matters that it considers relevant to the assessment of the amount, including any conduct of the first or second person which contributed to delay the disposition of the application under subsection 6(1)…115
172As stated succinctly, in Merck Frosst Canada & Co. v. Apotex Inc., and applied in this case, the question to be determined in a s. 8 action is “what would have happened had [Abbott and Takeda] not brought an application for prohibition”116, that is, had they not commenced the Section 6 Proceedings?
173If the Applicants had not brought their Section 6 Proceedings, the NOC would have issued on April 17, 2007.117 As such, the hypothetical question of what would have happened if Apotex and the Minister had acted differently is not properly on the table. That is not the question that s. 8 poses; rather, the very simple question it poses is, all other things being equal, what would have happened but for the NOC Regulations?118
174The evidence of Ms. Picard advanced by Apotex on this motion on that question is presently unrefuted. It plainly states Ms. Picard’s expert opinion that if Apotex had not been on patent hold status in April 2007 owing to the Applicants’ Section 6 Proceedings, then a NOC would have issued, and even if issues had later been raised by Health Canada about the Apo-lansoprazole submission, it would not have resulted in an interruption or disruption of the sale of the pharmaceutical.
175Thus, on that evidence, Apotex’s entitlement to s. 8 damages for the entire two-year statutory period would also have been uninterrupted. This evidence on its own, if accepted by a trier of fact, combined with my findings relative to entitlement, would support Apotex’s claim. That said, neither of the Applicants has had an opportunity to adduce evidence to counter Ms. Picard’s expert evidence. The Applicants must be afforded the opportunity to refute this evidence at trial, if they are able to do so, to the extent it would reduce the quantum of s. 8 damages that should properly be payable to Apotex.
176Finally, there are the allegations made by the Applicants about improper conduct by Apotex, or Apotex coming before the court without clean hands. They rely on the language of s. 8(5) of the Patent Act as the legal foundation for these issues to be considered and adjudicated on in the context of quantifying Apotex’s s. 8 damages entitlement.
177I am entitled to take account of collateral or equitable matters in determining s. 8 damages entitlement. Subsection 8(5) of the NOC Regulations instructs that I am to take account of all matters that I consider relevant to the assessment of that amount, including any conduct of Abbott and Takeda or Apotex, which I find contributed to delay or the disposition of the Section 6 Proceedings. The Applicants took the position that there were numerous evidential factors to take into account in that assessment.
178However, in light of my principal findings, that list of factors will be curtailed, not only because several of the issues relate to Health Canada’s conduct, and because I have ruled that the Applicants do not have standing to raise those issues in this s. 8 damages claim, but also because several plainly seem entirely irrelevant to the quantification of damages. A trial focused on damages is not intended to provide yet another expensive opportunity for venting between these longstanding litigation opponents. It is intended to determine the s. 8 damages, if any, to which Apotex is entitled, nothing more and nothing less.
179As a result, I will not hear further argument by the applicants that Apotex itself was responsible for an allegedly mistaken initial issuance of Health Canada’s April 2007 approval of Apo-lansoprazole, subject to Patent Hold, or that it had filed false and or misleading information in its original Apo-lansoprazole ANDS and that there were material omissions of information, or that Apotex failed to disclose and hid the results of one failed Apo-lansoprazole study from Health Canada. As I have explained above, these are matters that relate to the generic product approval process, and I have found that the Applicants do not have standing to raise them in this s. 8 damages quantification process. There will be no further litigation focused on (i) whether Dr. Tam made a mistake, as the applicants contend, in issuing his April 2007 approval of Apo-lansoprazole, or (ii) what was in the mind of Dr. Sharma when she revoked Apotex’s patent hold status in December 2008 for alleged non-compliance with the Guidance Documents relating to bioequivalence submissions, or what caused Health Canada to change its mind.
180As for the following complaints, namely that Apotex improperly objected to certain questions that were asked of Dr. Simon on the pre-motion discovery in relation to its product monographs; that Apotex improperly objected to questions asked at discovery during the cross-examination of its witness, Ms. Suzanne Picard; or that Apotex improperly claimed confidentiality designations relative to certain of its productions when they allegedly do not meet the test to be designated as confidential119, given my findings on this motion, those are matters that are irrelevant to the determination of the amount of the second party’s damages entitlement. They are no longer relevant to the issues that remain to be decided here.
181The one remaining possibly relevant claim is the Applicants’ assertion that an assessment of damages under s. 8 should take account of whether Apotex lacks clean hands in its opposition to this motion. That claim purports to be based on allegedly surreptitious and fraudulent conduct by its Chairman, Dr. Barry Sherman, in dealings with the Ontario Drug Benefits Plan. It is not immediately plain to me that evidence on this issue ought to be permitted, and the issues complained of by the Applicants appear to be collateral to the issue of damages that remains to be decided here. However, I will hear from counsel if necessary on how they think these matters could affect the determination of the generic manufacturer’s damages entitlement, having regard to s. 8(5) of the NOC Regulations under the Patent Act and whether further evidence at trial in that regard should be permitted. Alternatively, a mini-trial might be a procedural option permitting this issue and the issues arising out of Ms. Picard’s affidavit evidence, to be decided before the actual damages quantification focused trial is held.
182Finally, there is the Applicant’s counterclaim and obviously, to the extent that might, if accepted, result in a reduction of Apotex’s s. 8 damages claim, the Applicants will be at liberty to adduce evidence on those allegations, but only to the extent relevant to the remaining issues to be decided.
183In the result, this summary judgment motion is dismissed with costs. The next step will be a Case Management conference with counsel, to set a trial date and to address these questions I have raised in this section relative to the evidence that will be required at trial, whether further expert opinion will be adduced, the extent to which further evidence will be required and how that remaining evidence will be adduced. I will also expect to receive costs outlines from counsel at that time, if counsel cannot resolve the issue of costs on their own, acting reasonably. I do not wish to receive detailed costs submissions until I have heard from counsel to determine whether they are necessary. To permit time for the parties to digest these reasons and to have discussions between themselves on these issues, counsel are requested to advise as soon as possible of their availability for a Case Management conference in person in one month’s time, during the week of April 3-7, 2017.
Michael G. Quigley J.
Released: February 27, 2017
CITATION: Apotex Inc. v. Abbott Laboratories, Limited, 2017 ONSC 1348
COURT FILE NO.: CV-09-391938
DATE: 20170227
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
APOTEX INC.
Plaintiff/Defendant by Counterclaim/ Respondent
- and –
ABBOTT LABORATORIES, LIMITED, TAKEDA PHARMACEUTICALS COMPANY LIMITED, and TAKEDA PHARMACEUTICALS AMERICA, INC.
Defendants/Plaintiffs by Counterclaim/Applicants
REASONS FOR JUDGMENT
MOTION FOR SUMMARY JUDGMENT
Michael G. Quigley J.
Released: February 27, 2017
Footnotes
- Abbott and Takeda are frequently referred to in this summary judgment motion as the Applicants.
- Patent Act, R.S.C. 1985, c. P-4.
- Patented Medicines (Notice of Compliance) Regulations, SOR/93-133 [NOC Regulations].
- See Apotex Inc. v. Abbott Laboratories Limited, 2013 ONSC 356, 107 C.P.R. (4th) 332, at paras. 42-56 [Apotex ONSC], aff’d 2013 ONCA 555.
- Ibid.
- Apotex Inc. v. Abbott Laboratories, Limited, 2013 ONCA 555 [Apotex ONCA].
- Apotex ONSC, at paras. 11-41.
- Food and Drug Regulations, C.R.C., c. 870 (2012).
- Apotex ONSC, at paras. 42-56.
- Ibid.; Food and Drug Regulations, s. C.08.002(1)(a) and (b).
- Apotex ONSC, at paras. 42-56; Food and Drug Regulations, ss. C.08.004 and C.087.004.01.
- NOC Regulations, s. 3.
- Ibid., s. 4.
- Ibid., ss. 5(b)(ii), (iii) or (iv).
- Ibid., s. 7.
- Merck Frosst Canada Inc. v. Canada (Minister of National Health and Welfare), 1998 CanLII 792 (SCC), [1998] 2 S.C.R. 193, at para. 33.
- Food and Drugs Act, R.S.C. 1985, c. F-27.
- See Bristol-Myers Squibb Co. v. Canada (Attorney General), 2005 SCC 26, [2005] 1 S.C.R. 533, at para. 192; and AstraZeneca Canada Inc. v. Canada (Minister of Health), 2006 SCC 49, [2006] 2 S.C.R. 560, at paras. 14-16 (where that balancing framework was again reviewed by the Supreme Court).
- NOC Regulations, s. 8.
- Apotex Inc. v. Merck & Co. Inc., 2009 FCA 187, [2010] 2 F.C.R. 389, at para. 31, leave to appeal refused, [2009] S.C.C.A. No. 347.
- This point was clarified by amendment of the Regulation in 2006 to exclude any reference to “profits.”
- Apotex ONSC.
- Apotex ONCA, at para. 6.
- See Apotex ONSC, at paras. 42-57.
- Abbott Laboratories Limited. v. Canada (Ministry of National Health and Welfare), 2006 FC 1411, [2006] F.C.J. No. 1766, aff’d 2007 FCA 251, 367 N.R. 120.
- The proceedings were commenced by Abbott and Takeda Pharmaceuticals America, Inc., but with Takeda Pharmaceuticals Company Limited, as the patentee, being added as a party.
- Roth Affidavit, at para. 5, Apotex MR, Vol. 3, Tab 3, at p. 591.
- Ibid., at para. 6; and Settlement Agreement, Apotex MR, Vol. 3, Tab 3(A), at p. 595.
- Ibid., at para. 8.
- Sierra Club of Canada v. Canada (Minister of Finance), 2002 SCC 41, [2002] 2 S.C.R. 522.
- Apotex Inc. v. Merck & Co., Inc., 2011 FCA 364, 430 N.R. 74, at paras. 37-38, leave to appeal refused, [2012] S.C.C.A. No. 101.
- Rule 39 Examination of Craig Simon held July 20, 2016, at Qs. 228-233, MR, Vol. 3, Tab F, at pp. 54-55 [Simon Examination].
- Ibid., at Qs. 67-69, at p. 19.
- New Zealand Shipping Company, Limited v. Société des Ateliers et Chantiers de France, [1919] A.C. 1, at p. 6; and Barclays Bank PLC v. Devonshire Trust, 2013 ONCA 494, 365 D.L.R. (4th) 15, at paras. 147-153, leave to appeal refused, [2013] S.C.C.A. No. 374.
- Transamerica Life Insurance Co. of Canada v. Hutton, [1996] O.J. No. 1787 (Ont. Ct. (Gen. Div.)), at para. 12.
- Eli Lilly and Company v. Apotex Inc., 2004 FC 1015, 34 C.P.R. (4th) 108, at para. 3.
- Lorama Group Inc. v. Lenz, 2015 ONSC 5915, 339 O.A.C. 212 (Div. Ct.), at para. 56.
- Rules of Civil Procedure, R.R.O. 1990, Reg. 194, r. 20.04(2) [Rules]; and Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, at paras. 47, 68.
- Ibid., at para. 5.
- Ibid., at para. 43.
- Ibid., at paras. 4, 49.
- Ibid., at paras. 49, 57.
- Cochrane v. City of Kawartha Lakes Police Services Board et al., 2014 ONSC 1361, at para. 28, aff’d 2014 ONCA 860.
- Rules, rr. 20.04(2.1) and 20.04(2.2).
- Hryniak, at para. 66.
- Cuthbert v. TD Canada Trust, 2010 ONSC 830, 88 C.P.C. (6th) 359, at para. 10.
- Healey v. Lakeridge Health Corporation, 2010 ONSC 725, 72 C.C.L.T. (3d) 261, at paras. 29-30, aff’d 2011 ONCA 55, 103 O.R. (3d) 401.
- Combined Air Mechanical Services Inc. v. Flesch, 2011 ONCA 764, 108 O.R. (3d) 1, aff’d on other grounds 2014 SCC 7, [2014] 1 S.C.R. 87.
- Hryniak, at paras. 4-5.
- Miltenberg v. Metro Inc., 2012 ONSC 1063, at paras. 21-25; and Smith v. Barna Estate, 2012 ONSC 918, at para. 22.
- Picard Affidavit, at para. 78, Apotex MR. Vol. 1, Tab 1, at p. 27; Letter from TPD to Apotex dated December 4, 2007, Burkhardt Affidavit, Ex. “M”, Takeda MR, Conf. Vol, Tab 2(M), at p. 254.
- Picard Affidavit, at paras. 37-38.
- Ibid., at para. 41.
- Ibid., at para. 42.
- Ibid., at para. 44.
- Ibid., at para. 43.
- Ibid., at para. 43.
- Simon Examination, at pp. 32-33, at Qs. 135-140, Takeda MR, Conf. Vol., Tab 3, at p. 536.
- Comprehensive Summary: Bioequivalence, at p. 90, Picard Affidavit, Ex. “M”.
- I note that only Abbott, and not Takeda, pursued this line of attack. Takeda’s factum simply ignores that Dr. Tam could have played any role in determining bioequivalence based on its statement that it was Dr. Sharma’s role as Acting Director to determine compliance with the FDA Regulations.
- Simon Examination, at pp. 32-33, Qs. 135-140, Takeda MR, Conf. Vol., Tab 3, at p. 536; Picard Affidavit, at para. 72, Apotex MR, Vol. 1, Tab 1, at p. 25.
- Simon Examination, at Qs. 173-176.
- Picard Affidavit, at para. 76.
- Abbott Statement of Defence, at para. 7, Takeda Statement of Defence, at para. 12.
- Apotex Inc. v. Canada (Attorney General) et al. (1993), 59 F.T.R. 85 (F.C.T.D.).
- Stemijon Investments Ltd. v. Canada (Attorney General), 2011 FCA 299, 341 D.L.R. (4th) 710, at para. 22.
- Teva Canada Limited v. Pfizer Canada Inc., 2014 FC 248, 123 C.P.R. (4th) 405, rev’d 2016 FCA 161, 400 D.L.R. (4th) 723, rev’d 2016 FCA 218, 141 C.P.R. (4th) 165, leave to appeal refused, [2016] S.C.CA. No. 362.
- Apotex Inc. v. Astrazeneca Canada Inc., 2012 FC 559, 410 F.T.R. 168 (Eng.), aff’d 2013 FCA 77, 444 N.R. 254.
- See Guidance for Industry: Bioequivalence Requirements: Comparative Bioavailability Studies Conducted in the Fed State, referenced in the Picard Affidavit, Ex. “K”, Apotex Motion Record, Vol. 2, Tab 1(K), at p. 362.
- See Ibid., at para. 82.
- Abbott Statement of Defence, at para. 7, Takeda Statement of Defence, at para. 12.
- Apotex Inc. v. Canada (Health), 2012 FCA 322, [2012] F.C.J. No. 1659 [Omeprazole (FCA)], aff’g 2011 FC 1308, [2011] F.C.J. No. 1593 [Omeprazole (FC)], leave to appeal refused, [2013] S.C.CA. No. 49.
- Omeprazole (FCA), at para. 47.
- Ibid., at para. 34.
- Omeprazole (FC), at paras. 31-33.
- Federal Courts Act, R.S.C. 1985, c. F-7. Section 18.1(1) of the Federal Courts Act allows an application for judicial review to be made by the Attorney General of Canada or by anyone directly affected by the matter in respect of which relief is sought. Section 18.1(2) contains a limitation period which establishes the time frame within which judicial review may be sought. It provides that: “An application for judicial review in respect of a decision or an order of a federal board, commission or other tribunal shall be made within 30 days after the time the decision or order was first communicated by the federal board, commission or other tribunal to the office of the Deputy Attorney General of Canada or to the party directly affected by it, or within any further time that a judge of the Federal Court may fix or allow before or after the end of those 30 days.”
- R. v. McIntosh, 1995 CanLII 124 (SCC), [1995] 1 S.C.R. 686, at p. 722.
- Rizzo & Rizzo Shoes Ltd. (Re), 1998 CanLII 837 (SCC), [1998] 1 S.C.R. 27, at para. 27. See also Ruth Sullivan, Sullivan on the Construction of Statutes, 6th ed. (Markham, Ont.: LexisNexis Canada Inc., 2014), at p. 308 (where the author states that a label of absurdity can be attached to interpretations which defeat the purpose of a statute or render some aspect of it pointless or futile).
- Ontario v. Canadian Pacific Ltd., 1995 CanLII 112 (SCC), [1995] 2 S.C.R. 1031, at pp. 1081-1083.
- Bristol-Myers, at paras. 43-44, 95-96.
- Ibid., at paras. 18, 129, 147-149.
- Omeprazole (FCA), at para. 29. See also AstraZeneca Canada Inc. v. Canada (Minister of Health), 2006 SCC 49, [2006] 2 S.C.R. 560, at para. 12 (where the court noted that the primary responsibility of the Minister under the Act and the Regulations is to the health and welfare of Canadians).
- Omeprazole (FCA), at para. 47.
- Merck Frosst Canada Inc v. Canada (Minister of Health) (1997), 1997 CanLII 26719 (FC), 146 F.T.R. 249 (F.C.T.D.), aff’d (1999), 1999 CanLII 8930 (FCA), 3 C.P.R. (4th) 286 (F.C.A.).
- Ibid., at paras. 10-12.
- Merck Frosst Canada Inc. v. Canada (Minister of Health) (1999), 1999 CanLII 8930 (FCA), 3 C.P.R. (4th) 286 (F.C.A.) at para. 2.
- Aventis Pharma Inc. v. Canada (Minister of Health), 2005 FC 1396, [2005] F.C.J. No. 1705, at paras. 18-19.
- Apotex Inc. v. Canada (Minister of Health), 2004 FC 43, [2004] F.C.J. No. 37, at paras. 22, 30-31.
- Reddy Cheminor Inc. v. Canada (Attorney General), 2001 FCT 1065, 15 C.P.R. (4th) 215, at para. 43, aff’d 2002 FCA 179, [2002] F.C.J. No. 675.
- Apotex Inc. v. Pfizer Canada Inc. (27 November 2015), Ottawa, T-1736-10 (F.C.T.D.), at paras. 5-7.
- Ibid., at para. 9.
- Ibid., at paras. 3, 9. See also Apotex Inc. v. Canada (Minister of Health), 2004 FC 43, [2004] F.C.J. No. 37, at paras. 36-37.
- R. v. Consolidated Maybrun Mines Ltd., 1998 CanLII 820 (SCC), [1998] 1 S.C.R. 706, at para. 41, citing David J. Mullan, Administrative Law, 3d ed. (Scarborough, Ont: Carswell, 1996); Magder v. Ford, 2013 ONSC 263, 113 O.R. (3d) 241 (Div. Ct.), leave to appeal refused, [2013] S.C.C.A. No. 117.
- Omeprazole (FC), at para. 13.
- Omeprazole (FCA), at paras. 30, 35; Omeprazole (FC), at para. 33; and Ferring inc. v. Canada (Health), 2007 FC 300, [2007] F.C.J. No. 420, at paras. 78-81, aff’d 2007 FCA 276, [2007] F.C.J. No. 1138.
- Omeprazole (FCA), at para. 47.
- See Bristol-Myers, at para. 150.
- Apotex Inc. v. Sanofi-Aventis, 2014 FCA 68, 125 C.P.R. (4th) 403 [Ramipril (FCA)], at para. 133, aff’d 2015 SCC 20, [2015] 2 S.C.R. 136.
- Omeprazole (FCA).
- Abbott Factum, at paras. 61-62, 67; Takeda Factum, at paras. 78-79.
- Omeprazole (FCA), at para. 47.
- Abbott Factum, at para. 62.
- Ramipril (FCA), at paras. 36, 78-79.
- NOC Regulations, s. 8(1)(a)(ii).
- In Apo-Norfloxacin, the Court found that Apotex’s damages period commenced a year after Apotex’s certification date because of supply obstacles that Apotex faced in the real-world (Apotex Inc. v. Merck & Co., Inc., 2010 FC 287, 82 C.P.R. (4th) 85, at paras. 57-58 [Apo-Norfloxacin], aff’d 2011 FCA 329, 107 C.P.R. (4th) 155, leave to appeal refused, [2012] S.C.C.A. No. 29). In Teva-Ramipril, notwithstanding Teva’s patent hold date of October 14, 2003, the Court found that Teva was unwilling to launch its drug product until December 13, 2005, and selected that date as the “‘more appropriate’” date (Sanofi-Aventis Canada Inc. v. Teva Canada Limited, 2012 FC 552, 410 F.T.R. 1 (Eng.), at paras. 11(1)(b), 61-75 [Teva-Ramipril], aff’d 2014 FCA 67, 126 C.P.R. (4th) 1).
- Abbott Factum, at para. 65.
- Ramipril (FCA).
- Ibid., at para. 71.
- Ibid., at paras. 78-79.
- Hryniak, at paras. 74-79.
- See Todd Archibald, Gordon Killeen & James C. Morton, Ontario Superior Court Practice 2017 (Toronto: LexisNexis Canada Inc., 2016), at p. 1041 (Commentary to Rule 20.04, “Judgment against moving party”, and cases cited there). See also Alof v. Ikeno, 2014 ONSC 2087, 119 O.R. (3d) 635, at para. 25.
- See Apo-Norfloxacin; and Teva-Ramipril.
- See Teva Canada Limited v. Sanofi-Aventis Canada Inc., 2014 FCA 67, 126 C.P.R. (4th) 1, at paras. 78, 189-192.
- As previously discussed in Section 4.
- NOC Regulations, s. 8.
- Merck Frosst Canada & Co. v. Apotex Inc., 2011 FCA 329, 107 C.P.R. (4th) 155, at para. 75, leave to appeal refused, [2012] S.C.C.A. No. 29.
- Simon Examination, Qs. 342-345, Takeda MR, at p. 556; Letter from TPD to Apotex dated April 18, 2007, Burkhardt Affidavit, Ex. “L”, Takeda MR, at p. 247; and Picard Affidavit, at para. 76.
- Pfizer Canada Inc. v. Teva Canada Limited, 2016 FCA 161, 400 D.L.R. (4th) 723, at para. 33, aff’d 2016 FCA 218, 141 C.P.R. (4th) 165, leave to appeal refused, [2016] S.C.CA. No. 362.
- Sierra Club of Canada.