T-260-04
2004 FC 1278
AstraZeneca Canada Inc. (Applicant)
v.
The Minister of Health, The Attorney General of Canada and Apotex Inc. (Respondents)
Indexed as: AstraZeneca Canada Inc. v. Canada (Minister of Health) (F.C.)
Federal Court, Kelen J.--Vancouver, August 17; Ottawa, September 20, 2004.
Patents -- Judicial review of notice of compliance (NOC) issued to generic drug company for omeprazole under Patented Medicines (Notice of Compliance) Regulations -- Whether Minister acted unlawfully in not requiring generic producer to serve new allegation under Regulations, s. 5 regarding revised formulation -- 11-year history of litigation reviewed -- Proper recourse for patentee if generic manufacturer makes untrue, misleading or inaccurate submissions to Minister: common law action for patent infringement -- If generic producer found to have given misleading information in new drug submission, Court could award punitive damages, solicitor-client costs -- Certiorari exceptional, not granted where alternative remedy -- Scope of Minister's duties in administering Regulations -- Not Minister's duty to look behind Court's consent order -- Following S.C.C. pronouncements regarding pragmatic, functional approach, Minister's decision reviewed against reasonableness standard -- Decision reasonably open to Minister based on Regulations, evidence before her.
This was an application for judicial review of a notice of compliance (NOC) issued to the generic drug company Apotex in respect of omeprazole 20 mg capsules. Applicant says that the Minister acted unlawfully in issuing the NOC without requiring that Apotex serve a new allegation with respect to a revised formulation.
AstraZeneca has marketed this drug since 1989 under the name "Losec". It is used to treat stomach disorders such as ulcers and gastroesophageal reflux. Apotex has, since 1993, been trying to introduce to the Canadian market a generic version of this drug. Litigation between the parties has now gone on for some 11 years. Apotex filed a new drug submission (NDS) which included a bioavailability study comparing the Apotex product to "Losec". In its notice of allegation, it alleged non-infringement of applicant's patents because its drug had an enteric coating applied directly to the omeprazole core and did not utilize a subcoating. Applicant responded by launching a prohibition proceeding under NOC Regulations, section 6 but this was dismissed by consent order. Apotex later refiled its NDS, describing a change in the thickness of the enteric coating as well as of certain ingredients. Following litigation involving several prohibition applications, Apotex made a new allegation, asserting non-infringement and in reliance upon a different formulation but it was deemed withdrawn in a subsequent prohibition proceeding.
In an NOC dated October 5, 1999 Apotex submitted yet another notice of allegation, based on a formulation not containing a potassium, sodium or aluminium salt. A prohibition application was dismissed. The Minister then issued Apotex an NOC, concluding that Apotex need not file another allegation.
Included in the issue of whether the Minister erred in issuing an NOC to Apotex without requiring it to file a new allegation in relation to its revised formulation, was whether such decision was subject to judicial review.
Held, the application should be dismissed.
Apotex represented to the Minister that its revised formulation was not materially different than the formulation already the subject of a Court order in a prohibition proceeding under the Regulations between the same parties, with respect to the same patents and with respect to the same drug. In Syntex (U.S.A.) L.L.C. v. Canada (Minister of Health) (2001), 15 C.P.R. (4th) 312 (F.C.T.D.), it was held that if a generic drug company makes inaccurate, misleading, or untrue submissions to the Minister, the patentee's proper recourse is a common law action for patent infringement and not an application for judicial review under the Federal Court Act (now the Federal Courts Act). That decision was sustained on appeal, Rothstein J.A. writing that the Minister is not required to assess whether a notice of allegation might deceive or mislead a patentee. In the case at bar, the Minister did not have to assess whether Apotex's revised formulation was materially different for the purpose of the Regulations than that which was the subject of the Federal Court order denying an application for prohibition concerning the same patents and drug. There is Trial Division authority for the proposition that, since the Regulations do not require that the second person copy the Minister with the NOA and detailed statements, the Minister had no legal obligation to compare them for accuracy. Were patent infringement to be proven, the Court would subject Apotex to grave consequences, including punitive damages and an award to plaintiff of solicitor-client costs. The extraordinary remedy of certiorari is not normally granted where an adequate alternative remedy is available. Thus, an application for judicial review does not lie with respect to the Minister's decision herein.
Had the decision been subject to judicial review, the applicable standard of review would have to be determined by the pragmatic and functional approach mandated by the Supreme Court of Canada in leading cases such as Dr. Q v. College of Physicians and Surgeons of British Columbia, [2003] 1 S.C.R. 226. Upon an application of that approach to this case, it had to be concluded that reasonableness was the appropriate review standard.
Reviewed according to that standard, the decision to issue an NOC without requiring Apotex to file a new allegation was reasonably open to the Minister. Under Regulations, section 5, there is no requirement that the Minister require that the person who files a revised NOC submission must file a new allegation. Here, the Minister had treated the 1997 "re-filed" submission as a continuation of that filed in 1993. The Minister had not misconstrued the 1996 consent order of Richard J. as he then was, denying a prohibition application.
The "whereas" clause in the 1996 consent order anticipated that the formulation of the Apotex omeprazole capsules would change, in that Apotex undertook that any omeprazole capsules produced by it "will not be such as to fall within the scope of these patents". In administering the Regulations, it was not the Minister's duty to look behind the Court's 1996 consent order, compare the differences in the formulations of the Apotex omeprazole capsules at different times or to determine whether any differences were material with respect to the patents.
statutes and regulations judicially
considered
Federal Court Act, R.S.C., 1985, c. F-7.
| Federal Courts Act, R.S.C., 1985, c. F-7, s. 1 (as am. by S.C. 2002, c. 8, s. 14). |
| Food and Drugs Act, R.S.C., 1985, c. F-27. |
| Food and Drug Regulations, C.R.C., c. 870. |
| Patent Act, R.S.C., 1985, c. P-4. |
| Patented Medicines (Notice of Compliance) Regulations, SOR/93-133, ss. 5 (as am. by SOR/98-166, s. 4; 99-379, s. 2), 6 (as am by SOR/98-166, s. 5; 99-379, s. 3). |
cases judicially considered
applied:
Syntex (U.S.A.) L.L.C. v. Canada (Minister of Health) (2001), 15 C.P.R. (4th) 312 (F.C.T.D.); affd (2002), 20 C.P.R. (4th) 29; 292 N.R. 147; 2002 FCA 289; Eli Lilly and Co. v. Apotex Inc. (1999), 87 C.P.R. (3d) 83; 165 F.T.R. 83 (F.C.T.D.); affd (2000), 9 C.P.R. (4 th) 439; 266 N.R. 339 (F.C.A.); Dr. Q v. College of Physicians and Surgeons of British Columbia, [2003] 1 S.C.R. 226; (2003), 223 D.L.R. (4th) 599; [2003] 5 W.W.R. 1; 11 B.C.L.R. (4th) 1; 48 Admin. L.R. (3d) 1; 179 B.C.A.C. 170; 302 N.R. 34; 2003 SCC 19.
referred to:
Astra Pharma Inc. v. Canada (Minister of National Health and Welfare) (2000), 9 C.P.R. (4th) 69 (F.C.T.D.); Pushpanathan v. Canada (Minister of Citizenship and Immigration), [1998] 1 S.C.R. 982; (1998), 160 D.L.R. (4th) 193; 11 Admin. L.R. (3d) 1; 43 Imm. L.R. (2d) 117; 226 N.R. 201; Law Society of New Brunswick v. Ryan, [2003] 1 S.C.R. 247; (2003), 257 N.B.R. (2d) 207; 223 D.L.R. (4th) 577; 48 Admin. L.R. (3d) 33; 31 C.P.C. (5th) 1; 302 N.R. 1; 2003 SCC 20.
APPLICATION for judicial review of the issuing of an NOC under the Patented Medicines (Notice of Compliance) Regulations. Application dismissed.
appearances:
Gunars A. Gaikis, J. Sheldon Hamilton and Yoon Kang for applicant.
F. B. Woyiwada for respondents Minister of Health and Attorney General of Canada.
H. B. Radomski and Andrew R. Brodkin for respondent Apotex Inc.
solicitors of record:
Smart & Biggar, Toronto, for applicant.
Deputy Attorney General of Canada for respondents Minister of Health and Attorney General of Canada.
Goodmans LLP, Toronto, for respondent Apotex Inc.
The following are the reasons for order rendered in English by
[1]Kelen J.: This is an application for judicial review of a notice of compliance (NOC) issued by the Minister of Health to Apotex on January 27, 2004 for omeprazole 20 mg capsules. The applicant alleges that the Minister issued the NOC unlawfully in that the Minister did not require Apotex serve a new allegation under section 5 of the Patented Medicines (Notice of Compliance) Regulations, SOR/93-133 [as am. by SOR/98-166, s. 4; 99-379, s. 2] (the Regulations) with respect to a revised formulation for the medicine.
[2]A previous allegation with respect to the same medicine and the same patents had been the subject of a prohibition application under the Regulations, which was dismissed by consent order of this Court in 1996.
THE FACTS
Background
[3]The applicant, AstraZeneca Canada Inc., is a pharmaceutical company that began marketing omeprazole in 1989 under the brand name "Losec". "Losec" is used to treat certain stomach conditions related to hyperacidity, such as gastric and duodenal ulcers, gastroesophageal reflux disease Zollinger-Ellison disease, and dyspepsia.
[4]Apotex, a manufacturer of generic pharmaceutical products, has been attempting since 1993 to introduce a generic version of "Losec" 20 mg capsules into the Canadian market. This application for judicial review is part of an 11-year history of litigation between these two parties, over the right to produce and market omeprazole capsules.
The Relevant Patents
[5]The two patents relied upon by AstraZeneca in this application on the Patent Register for omeprazole capsules are: patent No. 1292693 (693 patent); and, patent No. 1302891 (891 patent). A third patent was originally relied upon as part of this application--patent No. 1388377 (377 patent). The 377 patent was the subject of separate litigation discussed below, and is no longer relied upon by the applicant in this case.
| 693 Patent |
[6]Claim 1 of the 693 patent claims:
| 1. An oral pharmaceutical preparation comprising: |
| (a) a core region comprising an effective amount of a material selected from the group consisting of omeprazole plus an alkaline reacting compound. . .; |
| (b) an inert subcoating which is soluble or rapidly disintegrating in water disposed on said core region, said subcoating comprising one or more layers of material selected from among tablet excipients and polymeric film forming compounds; and |
| (c) an outer layer disposed on said subcoating comprising an enteric coating. |
| 891 Patent |
[7]Claim 1 of the 891 patent claims:
| 1. A pharmaceutical preparation comprising: |
| (a) an alkaline reacting core region comprising an acid-labile pharmaceutically active substance and an alkaline reacting compound different from said active substance. . .; |
| (b) an inert subcoating, which will rapidly dissolve or disintegrate in water, said subcoating being disposed on said core region and comprising one or more layers of materials selected from the group consisting of tablet excipients, film forming compounds and alkaline compounds; and |
| (c) an enteric coating layer surrounding said subcoating layer, wherein the subcoating layer isolates the alkaline reacting core from the enteric coating layer such that the stability of the preparation is enhanced. |
New Drug Submission and Allegation
[8]Apotex filed a new drug submission (NDS) with Health Canada for Apo-omeprazole 20 mg capsules; the submission contained a bioavailability study comparing Apotex's capsules to AstraZenca's "Losec" 20 mg capsules and details of Apotex's drug formulation.
[9]In a notice of allegation, dated April 27, 1993, Apotex alleged non-infringement of the 693 and 891 patents on the grounds that Apotex's formulation would apply an enteric coating directly to the omeprazole core, and not utilize a subcoating. In response, AstraZeneca (then Astra Pharma Canada Inc.) commenced a prohibition proceeding pursuant to section 6 [as am. by SOR/98-166, s. 5; 99-379, s. 3] of the NOC Regulations (the 1993 proceeding). This proceeding was dismissed by consent order of this Court dated May 3, 1996 (see below for details).
[10]On December 16, 1997, Apotex refiled its NDS with Health Canada, describing a change in the thickness of the enteric coating of its formulation and certain ingredients. This refiled formulation was accepted by Health Canada as satisfying the requirements of the Food and Drug Regulations, C.R.C., c. 870. This meant that Apotex's NDS was approvable, but for pending litigation under the Regulations.
The Litigation
[11]A number of applications for prohibition were brought, pursuant to section 6 of the Regulations, in 1993 and in 1999 in respect of the 693 patent, 891 patent, and 377 patent.
[12]On May 3, 1996, the application relating to the 693 and 891 patents (T-1446-93) was dismissed by consent order of Richard J. (as he then was), which provided in part:
IT IS HEREBY ORDERED THAT: . . .
| 2. The applicant's application in respect of . . . 693, 891 . . . patents is dismissed. |
[13]Following the consent order in T-1446-93, Apotex sent a further allegation, asserting non-infringement of the 693 and 891 patents. This notice, dated December 16, 1997 (the same date that Apotex refiled its NDS due to a change in formulation), stated that Apotex was relying on a different formulation from that previously disclosed in a prior proceeding. In response, AstraZeneca launched another prohibition proceeding (docket: T-178-98). That proceeding was discontinued on May 18, 1999 by consent order of Madam Justice Tremblay-Lamer, in which the notice of allegation was deemed to be withdrawn and the prohibition proceeding deemed to be discontinued.
The 1999 Proceedings (the 377 Patent)
[14]In a notice of allegation, dated October 5, 1999, Apotex alleged that it would not infringe the 377 patent on the basis that its formulation would not contain a potassium, sodium or aluminium salt. This allegation became the subject of an application for prohibition in Docket: T-2026-99. On September 8, 2000, this proceeding was dismissed by order of Mr. Justice McKeown, with costs to Apotex [Astra Pharma Inc. v. Canada (Minister of National Health and Welfare) (2002), 9 C.P.R. (4th) 69 (F.C.T.D.)].
THE MINISTER'S DECISION
[15]The NOC in the case at bar was issued to Apotex on January 27, 2004. By letter, dated February 3, 2004, the Minister's delegate advised AstraZeneca that Apotex would not be required to address the 693 and 891 patents since this Court had dismissed AstraZenca's application to prohibit. The Minister advised that she had no authority to require Apotex to file another allegation regarding the 693 and 891 patents and that the appropriate remedy, for any deviation relied upon in the prohibition proceedings, was to pursue redress under the Patent Act, R.S.C., 1985, c. P-4. Page 1 of the letter states:
As you are aware, by order dated May 3, 1996, the Federal Court dismissed AstraZenEca's application to prohibit the approval of Apo-omeprazole capsules until the expiry of the 693 and 891 patents. However, you have since suggested that the formulation which was disclosed by Apotex in the course of the proceedings in T-1446-93 may differ from that relied upon by Apotex in T-2026-99 and subsequent prohibition proceedings. You have also suggested that the Therapeutic Products Directorate ("TPD") should therefore have required Apotex to serve AstraZeneca with another notice of allegation in respect of the 693 and 891 patents before being eligible to receive its NOC.
With respect, the TPD does not share this view. With Apotex having successfully addressed the `693 and `891 patents in T-1446-93, the Minister has no authority under section 7 of the Patented Medicines (Notice of Compliance) Regulations to refuse Apotex a notice of compliance on the basis of either the 693 or the 891 patent. Similarly, requiring Apotex to file another notice of allegation in respect of patents it has already addressed is not within the Minister's authority.
With respect to your concerns about the formulation relied upon by Apotex in the various prohibition proceedings at issue, it is the TPD's view, in such circumstances, that should a second person enter the market with a product that deviates from that upon which it relied during prohibition proceedings under the Patented Medicines (Notice of Compliance) Regulations, the appropriate course of action is for the first person to pursue a remedy under the Patent Act.
RELEVANT LEGISLATION
[16]Sections 5 and 6 of the NOC Regulations are attached as Appendix A.
ISSUES
[17]The issue is whether the Minister erred in issuing an NOC to Apotex for its revised formulation of omeprazole 20 mg capsules without requiring Apotex file a new allegation in relation to the applicant's 693 and 891 patents under section 5 of the NOC Regulations.
[18]The issue includes the two following subissues:
(i) is the Minister's decision under the Regulations (the decision not to require that Apotex file a new allegation with respect to its revised formulation) properly the subject of judicial review under the Federal Courts Act, R.S.C., 1985, c. F-7, s. 1 (as am. by 2002, c. 8, s. 14) and,
(ii) if subject to judicial review, what is the standard of review?
POSITION OF THE PARTIES
(A) Applicant
| (i) Standard of Review |
[19]The applicant submits that the decision to grant an NOC ought to be reviewed on the correctness standard since it relates either to questions of law or questions of mixed fact and law.
(ii) Certiorari
[20]The applicant submits that where administrative action is taken in breach of a statutory duty, the normal remedy is for the reviewing Court to set it aside. The applicant submits that where a generic company has failed to comply with the Regulations, by failing to serve a notice of allegation, the Regulations are not engaged and an issued NOC may be quashed.
(iii) Breach of the Regulations
[21]The applicant submits that Apotex failed to make an allegation in respect of its approved formulation. The applicant submits that Apotex's 1993 allegation is a nullity and of no effect, because it was made before the NDS was filed. The applicant further submits that Apotex failed to make an allegation regarding the refiled NDS.
[22]The applicant submits that the Minister had an obligation to consider whether Apotex had complied with the Regulations and to determine whether Apotex had filed an allegation in respect of the refiled NDS. The applicant submits that the Minister was wrong to conclude that her duty is limited to ensuring formal compliance with section 5 of the Regulations because the Regulations clearly require the Minister to link or match an allegation of non-infringement to the formulation, or NDS, for which approval is sought.
[23]The applicant submits that the Minister wrongly concluded that no further remedy could be provided to AstraZeneca in light of Apotex's alleged deception; the applicant argues that the underlying purpose of the Regulations is to provide more effective patent protection than that available through private law proceedings.
(B) The Respondent
[24]Apotex submits that there is no valid ground on which AstraZeneca can challenge the Minister's decision with respect to the 693 and 891 patents because it consented to the dismissal of the relevant prohibition application.
[25]Apotex submits that it is manifestly clear that the minor changes to Apotex's formulation would have had no impact upon the issuance of the consent order for the following reasons:
(1) AstraZeneca has not adduced a scintilla of evidence to support an assertion that it consented to the issuance of the consent order on the basis of particular ingredients contained in Apotex's formulation;
(2) there is no evidence that AstraZeneca would not have consented to the order had it been aware that Apotex's capsules contained magnesium hydroxide, instead of dibasic sodium phosphate;
(3) there is no evidence that the thickness of Apotex's enteric coating had any impact upon AstraZeneca's decision to agree to consent to the order;
(4) the underlying basis of the 1993 allegation was that Apotex's enteric coating would be applied directly to the core, and not on the basis of the chemical ingredients contained in Apotex's formulation.
(C) Minister of Health
[26]The Minister of Health states that the standard of review is reasonableness and that an unreasonable decision is one that is not supported by any reasons that can stand up to a somewhat probing examination. Following the jurisprudence, including the Syntex case (referred to below), the Minister is not required to assess the accuracy of the information disclosed in the NOC proceedings. The Minister acted reasonably in applying the 1996 order dismissing the prohibition application under the Regulations with respect to the same patents, the same parties and the same medicine, regardless of the fact that there had been a revision of the formulation.
ANALYSIS
Issue No. 1
Is the Minister's decision under the Regulations (that Apotex did not need to file a new allegation with respect to its revised formulation) properly the subject of judicial review under the Federal Courts Act?
[27]Apotex represented to the Minister that its revised formulation is not materially different than the formulation already the subject of an order of this Court in a prohibition proceeding under the Regulations between the same parties, with respect to the same patents, and with respect to the same drug.
[28]In Syntex (U.S.A.) L.L.C. v. Canada (Minister of Health) (2001), 15 C.P.R. (4th) 312 (F.C.T.D.) I held that if a generic drug company makes inaccurate, misleading, or untrue submissions to the Minister for the purpose of the Regulations, the proper recourse for the patentee is a common law action for infringement of the patent, not judicial review under the Federal Court Act [R.S.C., 1985, c. F-7]. At paragraph 18 I stated:
The cases show a pattern where the patentee alleges that the generic drug company's new drug submission contains inaccurate or misleading information. The Federal Court of Appeal has repeatedly held that a patentee will be in a position to test the accuracy of a generic drug manufacturer's statements with respect to the drug after the product reaches the market, and if these statements are shown to be inaccurate, the consequences for the generic drug company "could well be very grave indeed". The patentee has a common law action for an infringement of patent, an injunction and punitive damages may lie in such cases.
The Federal Court of Appeal upheld my decision in Syntex (U.S.A.) L.L.C. v. Canada (Minister of Health) (2002), 20 C.P.R. (4th) 29. Rothstein J.A. held at paragraph 9 [2002 FCA 289]:
The Minister is not required to assess whether a notice of allegation might deceive or mislead a patentee.
Similarly, in the case at bar, the Minister is not required to assess whether Apotex's revised formulation for omeprazole capsules is materially different for the purpose of the Regulations than the formulation which is the subject of a Federal Court order dismissing an application for prohibition with respect to the same patents and the same drug.
[29]In Syntex, I held at paragraph 19:
The jurisprudence establishes that applications under ss. 18 and 18.1 of the Federal Court Act [as it then was] for prohibition or a declaration do not normally lie with respect to a notice of allegation under the Regulations.
Similarly, in the case at bar, an application under the Federal Courts Act from a decision of the Minister not to require that a generic drug company file a new allegation should not lie. If Apotex has misrepresented the revised formulation, then that should be dealt with under the Patent Act.
[30]In Eli Lilly and Co. v. Apotex Inc. (1999), 87 C.P.R. (3rd) 83 (F.C.T.D.) (upheld by the Court of Appeal (2000), 9 C.P.R. (4th) 439) Teitelbaum J., came to a similar conclusion. He held at paragraph 28 [[1999] F.C.J. No. 419 (QL)] :
In my view, neither the Regulations nor the case law imposes a duty upon the Minister to ensure that the content of the documents filed with his office and the documents served upon the first person is identical. The Minister must ensure that his office is in receipt of proof of service of the NOA and detailed statement onto the first person. The Regulations do not require that the second person copy the Minister with the NOA and the detailed statements. Consequently, the Minister has no legal obligation to compare them for accuracy.
and at paragraph 33, Teitelbaum J. held that:
. . . certiorari proceedings are not the proper forum to determine . . . discrepancies or inadequacies in the process disclosed by Apotex to the Minister and Lilly.
and at paragraph 34, Teitelbaum J. held that:
. . . what is of most concern in this type of proceeding is the issue of infringement.
If the revised formulation for the Apotex omeprazole 20 mg capsule infringes AstraZeneca's patents then the Court, on infringement proceedings, will subject Apotex to "grave consequences" such as, in addition to ordinary damages, punitive damages, and solicitor-client costs. The Court of Appeal upheld this decision, and stated, Eli Lilly, at paragraphs 9 to 11 [[2000] F.C.J. No. 1243 (QL)]:
Suffice it to say that certiorari is an extraordinary remedy granted in the discretion of the Court. It will not normally issue, even when administrative action can be shown to have been vitiated by error, if there is an adequate alternative remedy available to the appellant.
In our view, even if, as Lilly alleges, the Minister issued the NOC when Apotex had not served a complete and accurate detailed statement in accordance with the Regulations, it was appropriate for the Motions Judge to conclude that Lilly should be left to resort to the private law rights and remedies available to it as a patent holder. Indeed, counsel for the appellant advised us that infringement proceedings are already under way.
If, at the end of the infringement proceeding, Apotex is found, both to have infringed Lily's patent, and to have misconducted itself prior to the issue of the NOC, it would be open to the Judge to award punitive damages or solicitor-client costs, as the Motions Judge suggested. Such remedies would certainly constitute "grave consequences" of the kind contemplated by Stone J.A. in Hoffman-La Roche, supra.
[31]The Minister cannot test the truthfulness of representations from the drug companies or determine whether a revised formulation is materially different with respect to the patents.
[32]The Minister can expect the drug companies will act honestly and in good faith when complying with the Regulations. Apotex has a history of complying with this law with respect to omeprazole capsules and tablets. Counsel at the hearing indicated that there have been several allegations filed by Apotex under the Regulations with respect to omeprazole capsules and tablets.
[33]For these reasons, an application for judicial review does not lie with respect to the Minister's decision in this case.
Issue No. 2
What is the standard of review of the Minister's decision not to require Apotex file a new allegation under the Regulations with respect to its revised formulation?
[34]In the alternative that this decision is subject to judicial review, the pragmatic and functional approach must be taken in determining the appropriate standard of review for the Minister's decision to issue the NOC without requiring Apotex file an allegation under the Regulations. See Pushpanathan v. Canada (Minister of Citizenship and Immigration), [1998] 1 S.C.R. 982; Dr. Q v. College of Physicians and Surgeons of British Columbia, [2003] 1 S.C.R. 226; and Law Society of New Brunswick v. Ryan, [2003] 1 S.C.R. 247. And as McLachlin C.J. states in Dr. Q, at paragraph 25, "it is no longer sufficient to slot a particular issue into a pigeon hole of judicial review and, on this basis, demand correctness from the decision-maker." At paragraph 26, McLachlin C.J. describes the correct approach as follows:
In the pragmatic and functional approach, the standard of review is determined by considering four contextual factors--the presence or absence of a privative clause or statutory right of appeal; the expertise of the tribunal relative to that of the reviewing court on the issue in question; the purposes of the legislation and the provision in particular; and, the nature of the question--law, fact, or mixed law and fact. The factors may overlap. The overall aim is to discern legislative intent, keeping in mind the constitutional role of the courts in maintaining the rule of law.
[35]Applying the functional and pragmatic approach to this case I conclude:
(1) Privative Clause or Statutory Right of Appeal -- The presence of a privative clause would imply more deference, while the presence of a statutory right of appeal would dictate less deference. In this case, there is an appeal process in the legislation. As discussed above, this appeal process implies no other appeal process with respect to the accuracy of representations under the Regulations, except an infringement action under the Patent Act. Accordingly, deference is due the Minister on the basis of this factor.
(2) Relative Expertise -- A finding that a tribunal is more expert than the Court, vis-à-vis the particular issue, would militate in favour of greater deference to the Minister. While it is true that specialized expertise is required in determining whether an NOC is to be issued under the Food and Drugs Act [R.S.C., 1985, c. F-27], the Minister does not have more expertise than the Court on the specific issue of interpreting the Regulations. Accordingly, little deference to the Minister is due with respect to interpreting the Regulations.
(3) Purpose of the Legislation -- Where the purpose of the legislation is to resolve polycentric policy questions, this militates in favour of more deference to the Minister. The decision of the Minister involved the overlapping legislative regimes of the Food and Drugs Act and the Patented Medicines (Notice of Compliance) Regulations. The Minister has to achieve an appropriate balance between the early availability of generic drugs and effective enforcement of patents. This involves balancing the costs and benefits for various parties, and the protection of the public. However, a dispute between a generic drug manufacturer and a patent drug manufacturer does not involve a polycentric policy question. It is a bipolar issue, which warrants little deference.
(4) Nature of the Question -- Finally, questions of fact, or factually intensive questions of mixed fact and law, militate in favour of more deference. On the other hand, questions of law, or legally intensive questions of mixed fact and law, imply less deference. In the case at bar, the Minister must understand the different formulations for the drug, consider the relevant patents, understand the Federal Court 1996 order dismissing the application for prohibition under the Regulations, and decide whether a new allegation is required. This is a factually intensive question of mixed fact and law, for which the Minister is entitled deference.
[36]After balancing the above factors, I conclude that the appropriate standard of review to be applied to the Minister's decision in this case is reasonableness.
Issue No. 3
Did the Minister err in issuing an NOC to Apotex for its revised formulation of omeprazole 20 mg capsules without requiring Apotex file a new allegation in relation to patents 693 and 891?
[37]In reviewing this decision on the reasonableness standard, I have concluded that this decision was reasonably open to the Minister under the Regulations on the basis of the evidence before her.
[38]In considering section 5 of the Regulations, there is no requirement for the Minister to require that a person who files a revised submission for an NOC in respect of a drug must file a new allegation. Apotex represented to the Minister that the revised formulation of its 20 mg omeprazole capsules was not materially different with respect to the patents. The respondent Minister's position at the hearing of this application was that the "re-filed" submission in 1997 was treated by the Minister as a continuation of the 1993 submission by Apotex for its 20 mg omeprazole capsules. The Minister's memorandum states at paragraph 46:
As part of that practice, a submission in which problems or deficiencies have been drawn to the sponsor's attention is deemed to have been withdrawn, unless the problems are addressed in a "re-filed" submission made within a specified time. In such submissions, only the additional information addressing the specific identified problem is reviewed by Health Canada; the portions already found satisfactory are not reviewed again. Thus there was only one submission by Apotex.
[39]The 1996 consent order of this Court by Richard J. (as he then was) dismissed the application for prohibition under the Regulations between the same parties with respect to the same patents and the omeprazole capsules. The consent order contained the following preamble to the order:
WHEREAS the 693 and 891 patents disclose and claim pharmaceutical compositions containing omeprazole, and whereas Apotex has undertaken that any omeprazole capsules produced or sold by Apotex until after the expiry of these patents will not be such as to fall within the scope of these patents.
[40]The applicant submits that the Minister failed to properly construe this order in that the Minister should have compared the formulation for the Apotex omeprazole capsules upon which the order was rendered with the revised formulation for which the 2004 NOC was granted.
[41]I conclude that the Minister acted reasonably in not requiring Apotex to file a new allegation with respect to the 693 and 891 patents because these patents were the subject of an application for prohibition which had been dismissed by this Court for the same drug. The fact that the formulation changed is not unusual. The "whereas" clause in the 1996 consent order anticipated that the formulation of the Apotex omeprazole capsules would change, in that Apotex undertook that any omeprazole capsules produced by Apotex "will not be such as to fall within the scope of these patents." This undertaking implied that the formulation may change.
[42]The Minister has no obligation under the Regulations to test or adjudicate the truth of the representations from Apotex. In this case, Apotex has a history of complying with its requirements under the Regulations, in that it filed several allegations for the same medicine with respect to AstraZeneca's many patents.
[43]In my opinion, it is not the duty of the Minister, who administers the Regulations, to look behind the 1996 consent order of the Court, compare the differences in the formulations of the Apotex omeprazole capsules at different times, determine whether any differences are material or significant with respect to the patents, and disregard the 1996 order of this Court with respect to the same medicine and the same patents.
[44]The Minister's decision to rely upon the 1996 consent order of the Federal Court with respect to the same parties, with respect to the same patents, and with respect to omeprazole capsules, was reasonable. Moreover, the Minister's decision to rely upon Apotex to comply with its obligation under the Regulations was reasonable, particularly since Apotex had filed several allegations already under the Regulations with respect to the applicant's patents for the same drug.
DISPOSITION
[45]For these reasons, this application for judicial review will be dismissed.
APPENDIX A
Sections 5 and 6 of the Patented Medicines (Notice of Compliance) Regulations:
5. (1) Where a person files or has filed a submission for a notice of compliance in respect of a drug and compares that drug with, or makes reference to, another drug for the purpose of demonstrating bioequivalence on the basis of pharmaceutical and, where applicable, bioavailability characteristics and that other drug has been marketed in Canada pursuant to a notice of compliance issued to a first person and in respect of which a patent list has been submitted, the person shall, in the submission, with respect to each patent on the register in respect of the other drug,
(a) state that the person accepts that the notice of compliance will not issue until the patent expires; or
(b) allege that
(i) the statement made by the first person pursuant to paragraph 4(2)(c) is false,
(ii) the patent has expired,
(iii) the patent is not valid, or
(iv) no claim for the medicine itself and no claim for the use of the medicine would be infringed by the making, constructing, using or selling by that person of the drug for which the submission for the notice of compliance is filed.
(1.1) Subject to subsection (1.2), where subsection (1) does not apply and where a person files or has filed a submission for a notice of compliance in respect of a drug that contains a medicine found in another drug that has been marketed in Canada pursuant to a notice of compliance issued to a first person and in respect of which a patent list has been submitted, the person shall, in the submission, with respect to each patent included on the register in respect of the other drug containing the medicine, where the drug has the same route of administration and a comparable strength and dosage form,
(a) state that the person accepts that the notice of compliance will not issue until the patent expires; or
(b) allege that
(i) the statement made by the first person pursuant to paragraph 4(2)(c) is false,
(ii) the patent has expired,
(iii) the patent is not valid, or
(iv) no claim for the medicine itself and no claim for the use of the medicine would be infringed by the making, constructing, using or selling by that person of the drug for which the submission for the notice of compliance is filed.
(1.2) Where a person referred to in subsection (1.1) has served, in accordance with paragraph (3)(b) or (c), a notice of allegation on a first person in respect of a patent included on the register, the person is not required to serve a notice of allegation in respect of the same submission, the same allegation and the same patent on another first person.
(2) Where, after a second person files a submission for a notice of compliance but before the notice of compliance is issued, a patent list or an amendment to a patent list is submitted in respect of a patent pursuant to subsection 4(4), the second person shall amend the submission to include, in respect of that patent, the statement or allegation that is required by subsection (1) or (1.1), as the case may be.
(3) Where a person makes an allegation pursuant to paragraph (1)(b) or (1.1)(b) or subsection (2), the person shall
(a) provide a detailed statement of the legal and factual basis for the allegation;
(b) if the allegation is made under any of subparagraphs (1)(b)(i) to (iii) or (1.1)(b)(i) to (iii), serve a notice of the allegation on the first person;
(c) if the allegation is made under subparagraph (1)(b)(iv) or (1.1)(b)(iv),
(i) serve on the first person a notice of the allegation relating to the submission filed under subsection (1) or (1.1) at the time that the person files the submission or at any time thereafter, and
(ii) include in the notice of allegation a description of the dosage form, strength and route of administration of the drug in respect of which the submission has been filed; and
(d) serve proof of service of the information referred to in paragraph (b) or (c) on the Minister.
Right of Action
6. (1) A first person may, within 45 days after being served with a notice of an allegation pursuant to paragraph 5(3)(b) or (c), apply to a court for an order prohibiting the Minister from issuing a notice of compliance until after the expiration of a patent that is the subject of the allegation.
(2) The court shall make an order pursuant to subsection (1) in respect of a patent that is the subject of one or more allegations if it finds that none of those allegations is justified.
(3) The first person shall, within the 45 days referred to in subsection (1), serve the Minister with proof that an application referred to in that subsection has been made.
(4) Where the first person is not the owner of each patent that is the subject of an application referred to in subsection (1), the owner of each such patent shall be made a party to the application.
(5) In a proceeding in respect of an application under subsection (1), the court may, on the motion of a second person, dismiss the application
(a) if the court is satisfied that the patents at issue are not eligible for inclusion on the register or are irrelevant to the dosage form, strength and route of administration of the drug for which the second person has filed a submission for a notice of compliance; or
(b) on the ground that the application is redundant, scandalous, frivolous or vexatious or is otherwise an abuse of process.
(6) For the purposes of an application referred to in subsection (1), where a second person has made an allegation under subparagraph 5(1)(b)(iv) or (1.1)(b)(iv) in respect of a patent and where that patent was granted for the medicine itself when prepared or produced by the methods or processes of manufacture particularly described and claimed or by their obvious chemical equivalents, it shall be considered that the drug proposed to be produced by the second person is, in the absence of proof to the contrary, prepared or produced by those methods or processes.
(7) On the motion of a first person, the court may, at any time during a proceeding,
(a) order a second person to produce any portion of the submission for a notice of compliance filed by the second person relevant to the disposition of the issues in the proceeding and may order that any change made to the portion during the proceeding be produced by the second person as it is made; and
(b) order the Minister to verify that any portion produced corresponds fully to the information in the submission.
(8) A document produced under subsection (7) shall be treated confidentially.
(9) In a proceeding in respect of an application under subsection (1), a court may make any order in respect of costs, including on a solicitor-and-client basis, in accordance with the rules of the court.
(10) In addition to any other matter that the court may take into account in making an order as to costs, it may consider the following factors:
(a) the diligence with which the parties have pursued the application;
(b) the inclusion on the certified patent list of a patent that should not have been included under section 4; and
(c) the failure of the first person to keep the patent list up to date in accordance with subsection 4(6),