Pharma in brief - Canada - Federal Court of Appeal refuses to set aside prohibition order following a successful impeachment action

July 2011 Authors: Jason Markwell, Kristin Wall

Contacts

Case: Pfizer Canada Inc. et al. v. The Minister of Health and Ratiopharm Inc.

Drug: NORVASC® (amlodipine besylate)

Nature of case: Motion under Rule 399(2) of the Federal Courts Rules to overturn a prohibition order made under the PMNOC Regulations after the same patent was declared invalid in impeachment proceedings under the Patent Act

Successful party: Pfizer Canada Inc. et al.

Date of decision: June 28, 2011

Summary

In July 2009, Ratiopharm Inc. (Ratiopharm) impeached Canadian Patent No. 1,321,393 (393 Patent) pertaining to the Pfizer Canada Inc. (Pfizer) drug NORVASC®. Ratiopharm subsequently brought a motion to set aside an earlier prohibition order. The Federal Court of Appeal (FCA) dismissed Ratiopharm’s motion by holding that: (i) a subsequent finding of invalidity under the Patent Act is not a “matter” that can overturn a prohibition order under the Patented Medicines (Notice of Compliance) Regulations (PMNOC Regulations); and (ii) Ratiopharm failed to establish that the prohibition order was obtained on the basis of fraud.

Background

On June 9, 2006, the FCA issued an order under the PMNOC Regulations preventing the Minister of Health from issuing a notice of compliance to Ratiopharm until after the expiry of Pfizer’s 393 Patent.1

Ratiopharm subsequently sought to have the 393 Patent impeached under the Patent Act.  On July 8, 2009, Hughes J. held the 393 Patent to be invalid on all grounds, including obviousness, utility, sufficiency, and improper selection patent. The 393 Patent was also held to be invalid under section 53 of the Patent Act, which prohibits patentees from wilfully making untrue material allegations in a patent application for the purpose of misleading.2

Federal Court of Appeal Decision

Ratiopharm brought a motion under Rule 399(2) of the Federal Courts Rules to set aside the 2006 prohibition order on two grounds: (a) the impeachment order was a matter discovered subsequent to the making of the prohibition order; and (b) the prohibition order was obtained by fraud.  Ratiopharm also sought on order dismissing the prohibition application in T-1350-04.  Ratiopharm was motivated to set aside/dismiss the prohibition order so that it could try to make a claim for damages under section 8 of the PMNOC Proceedings.

1. FCA declined to dismiss the motion for mootness

Pfizer argued that since Ratiopharm was already able to market its drug product, the Rule 399(2) motion should be dismissed on the basis of mootness. The FCA agreed and held that Ratiopharm’s first ground for overturning the prohibition order under Rule 399(2)(a) (i.e., a matter discovered subsequent to the making of the order) was moot.  The Court, however, exercised its discretion to hear this issue despite mootness for the following reason:

“Ratiopharm’s challenge and the recurring litigation surrounding the interpretation and application of section 8 show that there still seems to be some ambiguity concerning the interplay between NOC and impeachment proceedings.  I think it would be in the public interest of would-be litigants to provide what we hope will be clear guidance.”3   

The FCA held that Ratiopharm’s second ground for overturning the prohibition order was not moot (i.e., the allegation that the prohibition order was obtained by fraud), as a matter cannot be moot when a fraud on the court is being alleged.

2. A successful impeachment proceeding is not cause to set aside an earlier prohibition order

The FCA held that the declaration of invalidity obtained by Ratiopharm in the impeachment proceeding was a fact discovered after the prohibition order, but was not a “matter” capable of triggering Rule 399(2)(a) to overturn the prohibition order.  In so finding, the FCA relied upon the different legal consequences that arise between PMNOC and impeachment proceedings, i.e., PMNOC proceedings are summary applications conducted for an administrative purpose and are not determinative of a patentee’s rights.  The FCA also held that its decision in Apotex Inc. v. Syntex applied in determining that “section 8 was not intended to provide redress where the innovator prevailed in the prohibition proceeding, even if the generic was later successful in patent litigation”.4

3. No evidence of fraud to set aside the earlier prohibition order

In order to overturn the prohibition order on the basis of fraud under Rule 399(2)(b), the FCA determined that: (i) the fraud must have been committed in the earlier prohibition proceeding (i.e., the proceeding that resulted in the order which Ratiopharm now seeks to overturn); and (ii) the fraud must have been “material” or at “the foundation of the case”.   

The FCA found that although Hughes J. was satisfied that the 393 Patent was invalid under section 53 of the Patent Act in the impeachment proceeding, Ratiopharm’s evidence failed to establish that the prohibition order was issued on the basis of any fraud.  The FCA noted that Ratiopharm did not make an allegation of invalidity under section 53 in the prohibition proceeding.  Moreover, there was no evidence that any perjured evidence or forged documents were submitted in the NOC proceeding.  Ratiopharm relied on the 393 Patent itself as evidence of fraud in the prohibition proceeding.  The FCA dismissed this agument as the 393 Patent was presumed to be valid and Ratiopharm failed to rebut this presumption in the prohibition application.

Link to decision:

Pfizer Canada Inc. et al. v. The Minister of Health et al., 2011 FCA 215

Footnotes

1 Pfizer Canada Inc. v. Canada (Minister of Health), 2006 FCA 214 rev’g 2006 FC 220.

2 Ratiopharm Inc. v. Pfizer Limited, 2009 FC 711, aff’d 2010 FCA 204.

3 Pfizer Canada Inc. et al. v. The Minister of Health and Ratiopharm Inc., 2011 FCA 215 at para. 13.

4 Apotex Inc. v. Syntex Pharmaceuticals International Ltd., 2010 FCA 155 at para. 36.

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