[2002] 1 F.C. 517
T-1715-99
2001 FCT 931
Parke-Davis Division, Warner-Lambert Canada Inc. and Warner-Lambert Company (Applicants)
v.
The Minister of Health and Apotex Inc. (Respondents)
Indexed as: Parke-Davis Division v. Canada (Minister of Health) (T.D.)
Trial Division, Dawson J.—Toronto, May 1; Vancouver, August 22, 2001.
Patents — Dedication of patent to public use — Applicants seeking to prohibit Minister from issuing NOC to Apotex Inc. in connection with medicine atorvastatin calcium until expiration of Canadian Patent 1268768 — Patent inadvertently included among patents listed for dedication to public use — Apotex alleging statement made by applicant Parke-Davis false, patent expired, not valid — Applicant adducing sufficient evidence of standing to bring application under Regulations, s. 6(1) — Must prove allegation of invalidity made by Apotex not justified — Applicant failing to tender direct evidence of those having personal knowledge of matters in dispute — Dedication of ʹ768 patent deliberate, arising from confusion, miscommunication — Legal nature of patent dedication — Initial dedication of patent legally effective — Applicants failing to establish dedication revoked, corrected under Patent Act, s. 8 — Apotex justified in alleging invalidity of patent because of abandonment of patent holder’s rights — Dedication of patent proper ground of allegation.
This was an application for an order under the Patented Medicines (Notice of Compliance) Regulations prohibiting the Minister of Health from issuing a notice of compliance (NOC) to Apotex Inc. in connection with the medicine atorvastatin calcium until after the expiration of Canadian Patent No. 1268768 (ʹ768 patent). Warner-Lambert Company, one of the applicants, is the alleged owner of the ʹ768 patent and Canadian Patent No. 2021546, both pertaining to the medicine atorvastatin calcium. In December 1994, a Canadian patent agent for Warner-Lambert wrote to the Canadian Intellectual Property Office (CIPO) enclosing a number of documents which dedicated various patents to the public. In mid-1997, a counsel for Warner-Lambert discovered that the ʹ768 patent had been inadvertently included among the patents listed for dedication to the public use. Health Canada questioned the notice of dedication to public use made by CIPO, but apparently accepted the ʹ768 patent for retention on the patent register. In August 1999, Apotex sent a notice of allegation (NOA) to Parke-Davis Division, in relation to that patent, alleging that the statement made by the latter under paragraph 4(2)(c) of the Regulations was false, that the patent has expired or was not valid. The dedication of the patent to the public was the legal and factual basis for the allegation. Three issues were raised: (1) whether the applicants had status to maintain an application under subsection 6(1) of the Regulations; (2) whether the notice of allegation was valid and (3) whether the applicants have established that the allegation was not justified.
Held, the application should be dismissed.
(1) Under subsection 6(1) of the Regulations, a “first person” served with a NOA may apply 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. Only the first person who has filed for, or has been issued, a notice of compliance and has submitted a patent list has standing to commence an application for prohibition. In the present case, Parke-Davis is the first person as defined in the Regulations and claimed status as the exclusive licensee in Canada of the ʹ768 and ʹ546 patents. Apotex submitted that, since the representative of Parke-Davis refused on cross-examination to produce its exclusive licence, the application could not succeed because of the failure of the applicants to establish their standing. Parke-Davis did put some evidence before the Court as to its standing. The issue here was not the total absence of relevant evidence but the question of the sufficiency of the evidence proferred. The Court found that Parke-Davis has adduced sufficient evidence of its standing to bring this application and was not prepared to draw an adverse inference from the failure of the applicants to produce the licence agreement.
(2) The applicants asserted that the NOA is invalid because Apotex has not yet filed a submission for a NOC for atorvastatin calcium. It is settled law that the process embodied in the Regulations is separate and distinct from the administrative process imposed by the Food and Drug Regulations. Those processes need not be engaged concurrently and are linked in the sense that the Minister can only issue a NOC having regard to the end result of each process. Allegations other than those of non-infringement may be considered in the absence of any New Drug Submission (NDS), the contents of which are not relevant to allegations of patent invalidity. The applicants also submitted that the NOA failed to make allegations in respect of the ʹ546 patent which is also on the patent register in respect of the relevant dosage forms of atorvastatin calcium. Allegations concerning successive patents listed on a patent list may be the subject of separate NOAs and may be litigated separately. A NOA is not vitiated on the ground that it does not deal with every patent on the patent list. Every patent must be dealt with only when the Minister comes to deal with the NDS for the purpose of issuing a NOC.
(3) Proceedings under section 6 of the Regulations are summary in nature directed solely to whether the Minister should be prohibited from issuing a NOC. Parke-Davis had the burden of proving that the allegation of invalidity made by Apotex was not justified, which required it to establish its case on the civil standard of proof. The purported dedication of the patent to the public was asserted in the notice of allegation and was in evidence before the Court. Thus, Parke-Davis had to meet the burden of disproving the allegation of invalidity, expiration and false statement contained in the NOA. In response to Apotex’s NOA, Parke-Davis argued that it never intended to dedicate the ʹ768 patent and that, where there is no intention to dedicate a patent, there is no effective dedication or the dedication can be revoked. It filed two affidavits in support of its application. However, the evidence revealed that Parke-Davis had the opportunity, but failed, to put before the Court the direct evidence of a number of people who would have personal knowledge of the matters in dispute. The burden was on Parke-Davis to satisfy the Court by admissible evidence that it was more probable than not that the dedication of the ʹ768 patent was unintended notwithstanding that there was an undoubted intent to dedicate other patents listed on the schedule attached to the irrevocable dedication. On a balance of probabilities, the Court could not find as a fact that the dedication was not intended in the sense of being contrary to the then express intent of Warner-Lambert.
Dedication of a patent to the public use has become an established procedure in Canada, notwithstanding the silence of the Patent Act on the matter. Canadian jurisprudence is also silent as far as the legal nature and consequence of dedication is concerned. It was not for the Court to determine the validity of the ʹ768 patent. However, American jurisprudence was found persuasive for the purpose of considering whether the allegations contained in the NOA were justified. The initial dedication of the patent was legally effective since it was not contrary to the then express intent of Warner-Lambert. The applicants’ arguments did not provide a satisfactory analysis of the legal nature of patent dedication and, more particularly, of the ability to revoke a dedication. The applicants have failed to establish that the dedication was revoked and that, once an invention is in the public domain, particularly by way of the patentee’s disclaimer or dedication, it is possible by unilateral act of the former patentee to undo that fact. In the absence of a certificate issued under the authority of the Commissioner and in view of the case law as to the limited scope of the Commissioner’s authority, it could not be said that the dedication was revoked or corrected under the authority of section 8 of the Act. The applicants have not established that Apotex was unjustified in alleging that the statement that Parke-Davis was the exclusive licensee of the ʹ768 patent was false, that the latter had expired or in alleging invalidity because of the abandonment of the patent holder’s rights under the patent. Dedication of a patent is a proper ground of allegation. Where, due to the dedication of a patent to the public use, the patentee is unable to unequivocally establish exclusive rights under the patent, it would be unreasonable and inconsistent with the purpose of the Regulations to allow the patentee to prohibit another manufacturer from entering the market solely on the basis of the listing of the impugned patent on a patent list.
STATUTES AND REGULATIONS JUDICIALLY CONSIDERED
Federal Court Rules, 1998, SOR/98-106, r. 81(1).
Food and Drug Regulations, C.R.C., c. 870.
Patent Act, R.S.C., 1985, c. P-4, ss. 8 (as am. by S.C. 1993, c. 15, s. 27), 43(2) (as am. idem, s. 42).
Patent Law, 35 U.S.C. § 253 (1993).
Patented Medicines (Notice of Compliance) Regulations, SOR/93-133, ss. 2 (as am. by SOR/99-379, s.1), 4 (as am. by SOR/98-166, s. 3), 5 (as am. idem, s. 4; SOR/99-379, s. 2), 6 (as am. idem, s. 5).
CASES JUDICIALLY CONSIDERED
applied:
Apotex Inc. v. Wellcome Foundation Ltd., [2001] 1 F.C. 495 (2000), 10 C.P.R. (4th) 65; 262 N.R. 137 (C.A.); leave to appeal to S.C.C. granted, [2000] S.C.C.A. No. 610 (QL); Bayer Inc. v. Canada (Minister of National Health and Welfare) (1998), 82 C.P.R. (3d) 359; 154 F.T.R. 192 (F.C.T.D.); affd (2000), 6 C.P.R. (4th) 285; 258 N.R. 238 (F.C.A.).
distinguished:
Eli Lilly and Co. v. Novopharm Ltd. (1996), 69 C.P.R. (3d) 455; 205 N.R. 251 (F.C.A.).
considered:
Merck Frosst Canada Inc. v. Canada (Minister of National Health and Welfare) (1997), 74 C.P.R. (3d) 131; 132 F.T.R. 60 (F.C.T.D.); Apotex Inc. v. Canada (Minister of National Health and Welfare) (1997), 76 C.P.R. (3d) 1; 153 D.L.R. (4th) 68; 219 N.R. 151 (F.C.A.); Smithkline Beecham Pharma Inc. v. Canada (Minister of Health and Welfare) (1997), 77 C.P.R. (3d) 147; 138 F.T.R. 310 (F.C.T.D.); Glaxo Wellcome Inc. v. Canada (Minister of National Health and Welfare) (1997), 75 C.P.R. (3d) 129 (F.C.T.D.); Merck Frosst Canada Inc. v. Canada (Minister of National Health and Welfare) (1994), 55 C.P.R. (3d) 302; 169 N.R. 342 (F.C.A.); Eli Lilly and Co. v. Nu-Pharm Inc., [1997] 1 F.C. 3 (1996), 69 C.P.R. (3d) 1; 199 N.R. 185 (C.A.); Genentech Canada Inc. (Re) (1992), 44 C.P.R. (3d) 316 (P.M.P.R.B.); Pennock et al. v. Dialogue, 2 Peters 1 (U.S.S.C. 1829); W.L. Gore & Associates, Inc. v. Oak Materials Group, 424 F.Supp. 700 (D.C. Del. 1976); Altoona Publix Theatres v. American Tri-Ergon Corp., 294 U.S. 477 (1935); President and Fellows of Harvard College v. Canada (Commissioner of Patents), [2000] 4 F.C. 528 (2000), 189 D.L.R. (4th) 385; 7 C.P.R. (4th) 1 (C.A.); Reid v. Standard Construction Co. (1917), 51 N.S.R. 33; [1917] 34 D.L.R. 65 (S.C.).
referred to:
Merck Frosst Canada Inc. v. Canada (Minister of National Health and Welfare), [1998] 2 S.C.R. 193; (1998), 161 D.L.R. (4th) 47; 80 C.P.R. (3d) 368; Eli Lilly and Co. v. Novopharm Ltd.; Eli Lilly and Co. v. Apotex Inc., [1998] 2 S.C.R. 129; (1998), 161 D.L.R. (4th) 1; 80 C.P.R. (3d) 321; Bayer Inc. v. Canada (Minister of National Health and Welfare) (2000), 6 C.P.R. (4th) 285; 258 N.R. 238 (F.C.A.); Hoffmann-La Roche Ltd. v. Canada (Minister of National Health and Welfare) (1996), 70 C.P.R. (3d) 206; 205 N.R. 331 (F.C.A.); Novopharm Ltd. v. Merck & Co. (1992), 44 C.P.R. (3d) 13 (Comm. of Patents); Free World Trust v. Électro Santé Inc., [2000] 2 S.C.R. 1024; (2000), 194 D.L.R. (4th) 232; 9 C.P.R. (4th) 168; 263 N.R. 150; Gill v. United States, 160 U.S. 426 (1896); Shaw v. Cooper, 7 Peters 292 (U.S.S.C. 1833); Conway v. Ottawa Electric Railway Co. (1904), 8 Ex. C.R. 432; Gibney v. Ford Motor Co. of Canada, [1967] 2 Ex. C.R. 279; (1967), 52 C.P.R. 140; Chris-Craft Industries, Inc. v. Monsanto, Co. 59 F.R.D. 282 (C.D. Cal. 1973); Technimark, Inc. v. Crellin, Inc. 14 F.Supp. 2d 762 (M.D.N.C. 1998); National Semiconductor Corp. v. Linear Technology, 703 F.Supp. 845 (N.D. Cal. 1988); Bayer Aktiengesellschaft v. Commission of Patents, [1981] 1 F.C. 656 (1980), 53 C.P.R. (2d) 70 (T.D.); Upjohn Co. v. Commissioner of Patents (1983), 74 C.P.R. (2d) 228 (F.C.T.D.).
APPLICATION for an order under the Patented Medicines (Notice of Compliance) Regulations prohibiting the Minister of Health from issuing a notice of compliance to Apotex Inc. in connection with the medicine atorvastatin calcium until after the expiration of Canadian Patent No. 1268768. Application dismissed.
APPEARANCES:
Brian W. Gray, Alice Tseng and Michael Vaillancourt for applicants.
Harry B. Radomski, Richard E. Naiberg and Julie M. Perrin for respondent Apotex Inc.
SOLICITORS OF RECORD:
Blake Cassels & Graydon LLP, Toronto, for applicants.
Goodmans LLP, Toronto, for respondent Apotex Inc.
The following are the reasons for order and order rendered in English by
[1] Dawson J.: In this application for judicial review the applicants seek an order pursuant to the Patented Medicines (Notice of Compliance) Regulations, SOR/93-133 (Regulations) prohibiting the respondent Minister of Health (Minister) from issuing a notice of compliance (NOC) to the respondent Apotex Inc. (Apotex) in connection with the medicine known as atorvastatin calcium until after the expiration of Canadian Patent No. 1268768 (ʹ768 patent).
[2] The impetus for this application is a dispute over the legal nature of a dedication of a patent to the public use, and the circumstances, if any, whereby such a dedication can be revoked.
[3] The Minister of Health neither filed material nor appeared at the hearing of the application.
BACKGROUND FACTS
[4] The applicants assert that Warner-Lambert Company (Warner-Lambert) is, and at all material times was, the owner of the ʹ768 patent and Canadian Patent No. 2021546 (ʹ546 patent) which both pertain to the medicine atorvastatin calcium. They further assert that Parke-Davis Division, Warner-Lambert Canada Inc. (Parke-Davis), a subsidiary of Warner-Lambert, is the exclusive licensee in Canada of the ʹ768 and ʹ546 patents.
[5] On February 19, 1997, Parke-Davis received a NOC for the medicine atorvastatin calcium which is marketed in Canada as 10, 20 and 40 mg tablets under the trade-mark “Lipitor”.
[6] The ʹ768 and ʹ546 patents were included in two patent lists submitted by Parke-Davis pursuant to subsection 4(1) of the Regulations in connection with 10, 20 and 40 mg tablets of atorvastatin calcium. As a result, Health Canada entered the ʹ768 and ʹ546 patents on the patent register.
[7] After receiving the NOC, Parke-Davis began selling Lipitor in Canada. It is said to be a drug of choice for lowering cholesterol, to be Parke-Davis’ top selling prescription drug, and to have been in 1999 the second largest selling prescription drug in Canada. Atorvastatin calcium was the winner of the Prix Galien Canada award as the most innovative drug product for 1999.
[8] On December 21, 1994, a Canadian patent agent for Warner-Lambert wrote to the Canadian Intellectual Property Office (CIPO) enclosing a number of documents which dedicated various patents to the public, stating that “[w]e submit that filing of these dedications for publication constitutes irrevocable dedication of these patents, effective as of the date of filing, namely, December 21, 1994” and further stating that “[c]onfirmation that the requested notices will be published is earnestly solicited”.
[9] One of the enclosures with the December 21, 1994 letter was a dedication in the following terms:
DEDICATION
The Warner-Lambert Company, owner of the Canadian patents listed in the attached schedule, whose full post office address is 201 Tabor Road, Morris Plains, N.J. 07950, hereby irrevocably dedicates said patents to the public, effective
Dated at Morris Plains NJ USA
this 20 day of October 1994.
For Warner Lambert Company:
The document was signed by Andrea Ryan, then the Assistant Secretary of Warner-Lambert. Listed among some 278 patents on the attached schedule was the ʹ768 patent.
[10] On April 4, 1995, CIPO published a notice in the Canadian Patent Office Record (CPOR) stating that the listed patents had been dedicated “to Public Use by the present registered owner”.
[11] The applicants assert that in mid-1997 a patent counsel at Warner-Lambert discovered that the ʹ768 patent had been inadvertently included among the patents listed for dedication to the public use. Correspondence followed from the Canadian patent agent for Warner-Lambert to the CIPO requesting that the alleged error be corrected and that notice of the retraction be published in the CPOR.
[12] Further requests were made and on August 25, 1998 CIPO published the following notice in the CPOR:
16. Notice from Patentee
In a Notice published in the April 4, 1995 issue of the Canadian Patent Office Record, Warner-Lambert Company dedicated 278 patents to public use. Patents Nos. 1,268,768, for an invention entitled “Trans-6-[2-(3- or 4-Carboxamido-Substituted Pyrrol-1-YI) Alkyl]-4-Hydroxpyran-2-One Inhibitors of Cholesterol Synthesis” and 1,270,763, for an invention entitled “Contraceptive Method and Kit”, were mistakenly included in the list of dedicated patents. Warner-Lambert Company hereby gives notice that it has not and does not waive its exclusive rights in and to the inventions defined in Canadian Patents Nos. 1,268,768 and 1,270,763.
[13] Subsequent to the purported dedication Parke-Davis paid all maintenance fees for the ʹ768 patent and CIPO accepted those fees.
[14] Health Canada questioned the notice of dedication to public use but apparently, upon being furnished with an explanation of the error and a copy of the retraction of the dedication of the ʹ768 patent in the CPOR, accepted the ʹ768 patent for retention on the patent register.
[15] On August 16, 1999, the president of Apotex wrote to Parke-Davis as follows:
This is a Notice of Allegation pursuant to the Patented Medicines (Notice of Compliance) Regulations in relation to tablets for oral administration containing atorvastatin calcium.
In relation to patent no. 1268768, we allege that the statement made by you pursuant to paragraph 4(2)(c) of the Regulations is false, and/or the patent has expired, and/or the patent is not valid.
The legal and factual basis for the allegation is that this patent was dedicated to the public.
ISSUES
[16] The following issues are raised in this application:
1. Do the applicants have status to maintain an application under subsection 6(1) [as am. by SOR/98-166, s. 5] of the Regulations?
2. Is the notice of allegation (NOA) valid?
3. Have the applicants established that the allegation was not justified?
ANALYSIS
1. Do the applicants have status to maintain an application under subsection 6(1) of the Regulations?
[17] Apotex argued that the applicants lack standing to bring this application. To consider that submission it is necessary to review the regulatory framework found in the Regulations.
(a) The regulatory framework
[18] Section 4 [as am. idem, s. 3] of the Regulations entitles a patent owner, exclusive licensee, or other person with the patent owner’s consent who applies for, or has been issued, a NOC in respect of a drug to submit a patent list in respect of the drug. The patent list is to include a statement of the ownership or licence or other interest in the relevant patent. In subsections (1) and (2) section 4 provides:
4. (1) A person who files or has filed a submission for, or has been issued, a notice of compliance in respect of a drug that contains a medicine may submit to the Minister a patent list certified in accordance with subsection (7) in respect of the drug.
(2) A patent list submitted in respect of a drug must
(a) indicate the dosage form, strength and route of administration of the drug;
(b) set out any Canadian patent that is owned by the person, or in respect of which the person has an exclusive licence or has obtained the consent of the owner of the patent for the inclusion of the patent on the patent list, that contains a claim for the medicine itself or a claim for the use of the medicine and that the person wishes to have included on the register;
(c) contain a statement that, in respect of each patent, the person applying for a notice of compliance is the owner, has an exclusive licence or has obtained the consent of the owner of the patent for the inclusion of the patent on the patent list;
(d) set out the date on which the term limited for the duration of each patent will expire pursuant to section 44 or 45 of the Patent Act; and
(e) set out the address in Canada for service on the person of any notice of an allegation referred to in paragraph 5(3)(b) or (c), or the name and address in Canada of another person on whom service may be made, with the same effect as if service had been made on the person.
[19] Section 5 [as am. idem, s. 4; SOR/99-379, s. 2] of the Regulations imposes requirements on a person who files or has filed a submission for a NOC in respect of a drug and who compares that drug with another for the purpose of demonstrating bio-equivalence. Section 5 provides in part:
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.
…
(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.
[20] Section 6 [as am. by SOR/98-166, s. 5] confers rights on a “first person” served with a NOA pursuant to paragraph 5(3)(b) or (c) of the Regulations as follows:
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.
…
(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.
…
(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.
[21] The terms “first person” and “second person” are defined as follows in section 2 [as am. by SOR/99-379, s. 1] of the Regulations:
2… .
“first person” means the person referred to in subsection 4(1);
…
“second person” means the person referred to in subsection 5(1) or (1.1), as the case may be.
[22] In the context of that framework Apotex correctly noted that:
(i) only the person, the first person, who has filed for, or been issued, a NOC and has submitted a patent list has standing to commence an application for prohibition;
(ii) that first person must indicate on the patent list the basis upon which it asserts rights under the patents listed on the patent list; and
(iii) in the present case Parke-Davis is the first person as defined in the Regulations and claims, both in its patent list and in the notice of application issued to commence this application, status as the exclusive licensee in Canada of the ʹ768 and ʹ546 patents.
[23] Apotex submitted that it follows that a first person must lead evidence of its standing. Apotex further stated that an adverse inference will be drawn where a party fails to produce evidence of its licence, and that affidavit evidence simply asserting the existence of an exclusive licence is not sufficient evidence to establish standing.
[24] In the present case, the representative of Parke-Davis refused on cross-examination to produce its exclusive licence. Apotex submitted that, as a result, the application cannot succeed because of the failure of the applicants to establish their standing.
[25] Parke-Davis did put some evidence before the Court as to its standing. Its Director of Government Affairs and Healthcare Systems swore in an affidavit that:
4. Parke-Davis is the exclusive licencee in Canada for marketing and selling atorvastatin calcium under the ʹ768 and ʹ546 Patents.
[26] On cross-examination, the applicants’ deponent confirmed the existence of the licence and advised that he did not have a copy of the licence agreement with him. Concerns were expressed at the cross-examination by the applicants’ counsel that the licence is confidential. Ultimately, the applicants declined to produce the licence agreement.
[27] In submitting that this evidence was deficient, Apotex relied upon the decision of the Federal Court of Appeal in Eli Lilly and Co. v. Novopharm Ltd. (1996), 69 C.P.R. (3d) 455 (F.C.A.) and the decision of Muldoon J. in Merck Frosst Canada Inc. v. Canada (Minister of National Health and Welfare) (1997), 74 C.P.R. (3d) 131 (F.C.T.D.).
[28] In Eli Lilly, supra, the Court found that a statement in an affidavit to the effect that [at pages 457-458] “my Company benefits from [a third party’s] sales” was inadequate to satisfy the evidentiary burden which the plaintiff there faced in order to establish irreparable harm sufficient to support the grant of an interlocutory injunction.
[29] I do not find this case to be of assistance because what was there in issue was an absence of evidence to prove that an alleged loss would be that of the plaintiff and that the loss would be irreparable. Here the issue is not the total absence of relevant evidence but rather the question of the sufficiency of the evidence proffered.
[30] Of more relevance is the Merck Frosst decision, supra, relied upon by Apotex. There, in a prohibition application under the Regulations, Mr. Justice Muldoon in obiter commented on the sufficiency of the evidence presented to establish the applicants’ exclusive licence rights. Justice Muldoon commented, at page 141, that:
Proving this interest requires nothing more than showing the authentic licence (or at least those parts which demonstrate the existence of a licensing agreement). If this basic element were not required, the inevitable result would be the Court ordering the extraordinary remedy of prohibition—if the respondent manufacturer’s allegations were not justified—against the Minister, on the mere assumption that the applicants have an interest in the patent. Even the applicants’ sworn ipse dixit does not demonstrate a licence. Simply put, proof of the licence is an essential ingredient of the applicants’ case. The cross-examination of Mr. Saheb clearly establishes that the applicants have not discharged their onus. [Emphasis in original.]
[31] I do not, however, read Justice Muldoon’s words to require that in every case a licence agreement be put in evidence before the Court. Justice Muldoon found that it was the nature of the evidence given on the cross-examination of the applicants’ deponent, and not the simple absence of the licence agreement, which established that the applicants had not discharged their onus. On cross-examination the deponent had admitted that he had never seen the licence agreement and Justice Muldoon noted that the deponent’s knowledge of any licence was [at page 141] “sketchy at best and based on elderly hearsay”. The patent owner was not an applicant then before the Court.
[32] In the present case the applicants’ deponent’s evidence was not so impugned on cross-examination. The witness was not asked about the nature of his knowledge of the licence agreement nor was he asked any question about the terms of the licence agreement. No suggestion was made to the witness on cross-examination challenging the existence of the exclusive licence agreement. Moreover, the ʹ768 and ʹ546 patents were exhibited to the deponent’s affidavit, the patent owner is also an applicant in this proceeding, and the deponent swore that Parke-Davis was a subsidiary of the owner of the patents.
[33] In those circumstances, I find that Parke-Davis has adduced sufficient evidence of its standing to bring this application. I find support for that conclusion in the comments of the Federal Court of Appeal in Apotex Inc. v. Wellcome Foundation Ltd., [2001] 1 F.C. 495 (C.A.), applications for leave to appeal granted [2000] S.C.C.A. No. 610 (QL), where Rothstein J.A. noted for the Court, at paragraph 99, that:
It is perhaps not uncalled for to observe that this is not a case in which the alleged licencee is alone in advancing its claim for patent infringement. Here, the patentee is also before the Court as a co-plaintiff supporting the claim of GWI. It is difficult to conceive of what more is necessary to prove the existence of a licence than to have the licensor and licencee both attesting to the validity of the licence. Where both the patentee and the person claiming under the patentee are before the Court, are affiliated as being owned by the same parent and have an identity of interest in the litigation—with the patentee supporting the person claiming under the patentee—it is, to say the least, surprising that technical questions of status to sue would be advanced as a defence to infringement.
[34] Finally on this issue, in view of the concern expressed with respect to the confidentiality of the terms of the licence agreement I am not prepared to accede to Apotex’s submission that I should draw an adverse inference from the failure of the applicants to produce the agreement.
2. Is the NOA valid?
[35] The applicants asserted that the NOA is invalid because:
(a) Apotex has not yet filed a submission for a NOC for atorvastatin calcium; and
(b) The NOA fails to make an allegation for every patent on the patent register in respect of the particular dosage forms of atorvastatin calcium.
(a) The failure of Apotex to have filed a submission for a NOC in respect of atorvastatin calcium
[36] The applicants argued that it is contrary to the Regulations for Apotex to file a NOA where it has not filed a New Drug Submission (NDS) and where its president on cross-examination indicated no immediate intention to do so.
[37] In support of their submission the applicants argued that while in Apotex Inc. v. Canada (Minister of National Health and Welfare) (1997), 76 C.P.R. (3d) 1 (F.C.A.) the Court of Appeal held that the requirements of section 5 of the Regulations may be met in any order, the Court did not there suggest that all of the requirements need not be met. It was submitted that there is no authority which provides that a valid NOA can be filed simply to preserve a procedural advantage with no immediate intention to file a submission for a NOC. Further, the applicants asserted that implicit in decisions such as Merck Frosst Canada Inc. v. Canada (Minister of National Health and Welfare), [1998] 2 S.C.R. 193, is that all of the requirements of section 5 of the Regulations must be met by the date of the prohibition hearing.
[38] The applicants also argued that subsection 6(7) of the Regulations permits a first person to seek an order requiring the second person to produce any portion of the submission for a NOC filed by the second person relevant to the disposition of the issues in the proceeding. This was said to evidence the fact that a NOA must be supported by a submission for a NOC.
[39] I do not find these submissions persuasive for the following reasons.
[40] First, it is now settled law that the process embodied in the Regulations is one separate and distinct from the administrative process imposed by the Food and Drug Regulations, C.R.C., c. 870. Those processes need not be engaged concurrently. The processes are only linked in the sense that the Minister can only issue a NOC having regard to the end result of each process.
[41] Therefore, in Smithkline Beecham Pharma Inc. v. Canada (Minister of Health and Welfare) (1997), 77 C.P.R. (3d) 147 (F.C.T.D.), McKeown J. dismissed an application to declare a NOA invalid and to prohibit the Minister of Health and Welfare from treating a letter as a NOA in circumstances where the second party had not filed a NDS seeking issuance of a NOC. Justice McKeown noted that it is the NOA and not the NDS which forms the factual underpinning of any prohibition proceeding. Thus, he concluded that while at some point a NDS would have to be filed by the second party, the only linkage between a non-infringement allegation and the NDS is that the allegation must be included as part of the NDS, so that when the NDS is filed the Minister is required to inquire whether the allegation filed with the NDS is the same as that contained in the NOA.
[42] In my view this is consistent with the conclusion that allegations other than those of non-infringement may be considered in the absence of any NDS. The contents of a NDS are not relevant to allegations of patent invalidity.
[43] Subsequent to the Smithkline Beecham decision, supra, the Regulations were amended. Those amendments in my view are dispositive of the applicants’ objection to the absence of a NDS. Subsections 5(1) and 5(3) of the Regulations formerly provided that:
5. (1) Where a person files or, before the coming into force of these Regulations, has filed a submission for a notice of compliance in respect of a drug and wishes to compare that drug with, or make a reference to, a drug that has been marketed in Canada pursuant to a notice of compliance issued to a first person in respect of which a patent list has been submitted, the person shall, in the submission, with respect to each patent on the patent list,
(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)(b) 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.
…
(3) Where a person makes an allegation pursuant to paragraph (1)(b) or subsection (2) the person shall
(a) provide a detailed statement of the legal and factual basis for the allegation; and
(b) serve a notice of the allegation on the first person and proof of such service on the Minister.
[44] Effective March 12, 1998, subsection 5(3) was amended by SOR/98-166 as follows:
4… .
(4) Subsection 5(3) of the Regulations is amended by striking out the word “and” at the end of paragraph (a) and by replacing paragraph (b) with the following:
(b) if the allegation is made under any of subparagraphs 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),
(i) serve on the first person a notice of the allegation relating to the submission filed under subsection (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.
[45] This amendment dealt with the issue of timing and required that only where an allegation of non-infringement was made would a NOA have to be served at or subsequent to the time of filing a NDS submission. The Regulatory Impact Analysis Statement described the amendment in the following terms [at page 1057]:
No premature NOA: An NOA relating to non-infringement may only be served on a patentee by a generic manufacturer when or after it has filed a submission for an NOC with the Minister of Health.
[46] I interpret the absence of any regulatory requirement that a NDS be filed by the time a NOA is served where allegations are made pursuant to subparagraphs (i) through (iii) of paragraph 5(1)(b) of the Regulations to mean that in such cases a NOA is not invalidated solely on the basis that no NDS or amended new drug submission has been filed by the time the NOA is served.
[47] To the extent that the applicants sought support for their submission in the wording of subsection 6(7) of the Regulations, I note that subsection 6(7) only makes any portion of a NDS producible on court order where it is “relevant to the disposition of the issues in the proceeding”. As noted above the contents of a NDS submission, while of relevance to allegations of non-infringement, are not relevant to allegations of patent invalidity. Thus, I do not find the wording of subsection 6(7) of the Regulations to be inconsistent with my interpretation of the Regulations as set out above.
(b) The failure of the NOA to make any allegation with respect to the ʹ546 patent
[48] It is next necessary to consider the applicants’ submission that the NOA is invalid because it fails to make allegations in respect of the ʹ546 patent which is also on the patent register in respect of the relevant dosage forms of atorvastatin calcium.
[49] To advance such argument the applicants relied upon an obiter comment made by Teitelbaum J. in Glaxo Wellcome Inc. v. Canada (Minister of National Health and Welfare) (1997), 75 C.P.R. (3d) 129 (F.C.T.D.) to the effect that the second person must make an allegation with respect to every patent on a patent list in respect of the particular form of the drug for which it seeks a NOC. However, I do not find the authority relied upon determinative as in that case Justice Teitelbaum was not required to consider when those allegations must be made.
[50] Of more assistance, I find, is the decision of Lutfy J., as he then was, in Bayer Inc. v. Canada (Minister of National Health and Welfare) (1998), 82 C.P.R. (3d) 359 (F.C.T.D.); affirmed (2000), 6 C.P.R. (4th) 285 (F.C.A.), relied upon by the respondents. There Justice Lutfy concluded that it was not an abuse of process for a second person to bring more than one NOA before the Court provided they were “separate and distinct from others”. From this I conclude that allegations concerning successive patents listed on a patent list may be the subject of separate NOAs and may be litigated separately. It further follows that a NOA is not vitiated on the ground that it does not deal with every patent on the patent list.
[51] Every patent must be dealt with only by the time that the Minister comes to deal with the NDS for the purpose of issuing a NOC.
3. Have the applicants established that the allegation was not justified?
(a) The nature of this proceeding and the burden of proof
[52] At this juncture I think it helpful to review briefly the nature of this proceeding, the burden of proof upon an applicant, and the operation of what is called the common law presumption.
[53] Proceedings under section 6 of the Regulations are summary in nature directed solely to whether the Minister should be prohibited from issuing a NOC. Patent invalidity or patent infringement is not litigated in this summary proceeding. Those issues, and related claims for damages, are to be determined in conventional actions which may proceed in parallel proceedings: Eli Lilly & Co. v. Novopharm Ltd.; Eli Lilly & Co. v. Apotex Inc., [1998] 2 S.C.R. 129, at paragraph 97.
[54] In this proceeding, Parke-Davis has the burden of proving that the allegation of invalidity made by Apotex was not justified: Bayer Inc. v. Canada (Minister of National Health and Welfare) (2000), 6 C.P.R. (4th) 285 (F.C.A.). That burden requires Parke-Davis to establish its case on the civil standard of proof, which has been described to be a “difficult burden” because “it must be to disprove some or all of the allegations in the notice of allegation which, if left unchallenged, would have allowed the Minister to issue a notice of compliance”: Hoffmann-La Roche Ltd. v. Canada (Minister of National Health and Welfare) (1996), 70 C.P.R. (3d) 206 (F.C.A.), at page 210 quoting with approval Merck Frosst Canada Inc. v. Canada (Minister of National Health and Welfare) (1994), 55 C.P.R. (3d) 302 (F.C.A.), at page 319.
[55] In the present case, the purported dedication of the patent to the public is asserted in the NOA (hence is presumed to be true per Merck Frosst, supra, at page 319) and is, in any event, in evidence before the Court. Thus, Parke-Davis must meet the burden of disproving the allegation of invalidity, expiration and false statement contained in the NOA.
[56] As for the evidentiary basis upon which proceedings of this nature are to be determined, in Merck Frosst, supra, at page 320, the Court noted:
As a further consequence of the application under s. 6 not being an ordinary action for infringement, there is no opportunity for either party to have recourse to discovery, whether oral or documentary. Where either party files affidavits there is, of course, opportunity for the opposite party to cross-examine thereon, but since there is no requirement that the notice of allegation be in affidavit form, and no obligation on the respondent to produce any affidavits at all (Rule 1603(2) permits but does not require such affidavits), the applicant cannot expect to be able to make his case out of the mouth of the respondent. Even when there is an opportunity to cross-examine, such cross-examination is far more limited in scope than examination for discovery and, apart from questions going to the witness’ credibility, is limited to relevant matters arising from the affidavit itself.
[57] The absence of discovery may therefore, in appropriate cases, give rise to the operation of a common law presumption, or what is known as the drawing of an adverse inference: Hoffmann-La Roche, supra, at page 212.
[58] The nature of the common law presumption was explained in the following terms by the Court of Appeal in Eli Lilly and Co. v. Nu-Pharm Inc., [1997] 1 F.C. 3(C.A.), at paragraph 23:
The Motions Judge described the common law presumption, at pages 152-153:
… where a party fails to lead evidence of a fact that it is in a better position to establish, the Court will infer that the facts are adverse to that party’s interests.
The maxim underlying this exception was enunciated by Lord Mansfield in Blatch v. Archer (1774), 1 Cowp. 63, at page 65; 98 E.R. 969, at page 970:
It is certainly a maxim that all evidence is to be weighed according to the proof which it was in the power of one side to have produced, and in the power of the other to have contradicted.
In this century, the presumption was described in the following terms by Ferguson J.A. in Pleet v. Canadian Northern R.W. Co. (1921), 50 O.L.R. 223 (C.A.), at page 227:
No doubt the general rule is that he who asserts must prove, and that the onus is generally upon the plaintiff, but there are two well-known exceptions:—
(1) That where the subject-matter of the allegation lies particularly within the knowledge of one of the parties, that party must prove it, whether it be of an affirmative or negative character: Mahony v. Waterford Limerick and Western R.W. Co., [1900] 2 I.R. 273, at p. 280; Kent v. Midland R.W. Co. (1874), L.R. 10 Q.B. 1.
(2) That he who relies on an exception to the general rule must prove that he comes within the exception: Ashton & Co. v. London and North-Western R.W. Co., [1918] 2 K.B. 488; London and North-Western R.W. Co. v. Ashton & Co., [1920] A.C. 84.
That judgment was upheld by the Supreme Court of Canada: Canadian Northern Quebec R. Co. v. Pleet, [1923] 4 D.L.R. 1112. The presumption was again applied by the Ontario Court of Appeal in Hoffmann-La Roche Ltd. v. Apotex Inc. (1984), 47 O.R. (2d) 287, a patent case, where Blair J.A. stated, at page 288:
Apart from statute, the common law burden of proof fell on the appellant because the evidence of the process of manufacture in a foreign country by its chosen manufacturer was peculiarly within its power to ascertain and disclose and manifestly beyond the power of the respondent to discover and prove in evidence. Leave to appeal to the Supreme Court of Canada refused: Apotex Inc. v. Hoffmann-La Roche Ltd., [1985] 1 S.C.R. v.
[59] Rule 81 of the Federal Court Rules, 1998 [SOR/98-106] which applies to all proceedings also speaks to the quality of evidence required. Subsection 81(1) of the Rules provides:
81. (1) Affidavits shall be confined to facts within the personal knowledge of the deponent, except on motions in which statements as to the deponent’s belief, with the grounds therefor, may be included.
[60] With that background, I now turn to consider the issues relating to the justification of the NOA.
(b) The parties’ respective positions
[61] As previously noted, Apotex alleged that by virtue of the fact that the ʹ768 patent was dedicated to the public, the patent is no longer valid, or has expired, or the statement made pursuant to paragraph 4(2)(c) of the Regulations is false. Apotex supported that allegation by asserting that the consequence of the dedication of the ʹ768 patent was that Parke-Davis’ rights were relinquished. Apotex said that, absent a mechanism in the Act which affords to a patentee the right to undedicate a patent, once a patentee takes steps intended to have legal effect to dedicate a patent, the legal effect is that all rights under the patent are expired, lapsed or terminated by operation of the dedication.
[62] Parke-Davis responded by arguing that it never intended to dedicate the ʹ768 patent, and that where there is no intention to dedicate a patent either there is no effective dedication or the dedication can be revoked.
[63] Parke-Davis also argued that an intended and properly made dedication is in substance a unilateral representation made for no consideration to the effect that the patentee will not enforce its patent rights. Therefore, dedication does not result in expiration or invalidity of a patent, or a statement made under paragraph 4(2)(c) of the Regulations being false. Thus, Parke-Davis said that dedication is not a proper ground of allegation because paragraph 5(1)(b) of the Regulations expressly enumerates the available grounds on which to found a NOA.
(c) Analysis of the issues
[64] I will deal with these submissions in the following order:
(i) Has Parke-Davis established that it did not intend to dedicate the ʹ768 patent?
(ii) What is the legal nature of patent dedication?
(iii) Has Parke-Davis established either that there was no effective dedication or that the dedication was revoked? and
(iv) Is dedication a proper ground of allegation?
(i) Has Parke-Davis established that it did not intend to dedicate the ʹ768 patent?
[65] Parke-Davis filed two affidavits in support of its application.
[66] The more extensive affidavit was sworn by James P. Rowan, Parke-Davis’ Director of Government Affairs and Healthcare Systems who has been employed by Parke-Davis since 1991. He swore to the following:
• In 1992, Parke-Davis learned from the Patented Medicine Price Review Board (PMPRB) that Warner-Lambert had a patent which related to Parke-Davis’ product ACCUPRIL. As a result, Parke-Davis voluntarily submitted ACCUPRIL to price controls under the PMPRB.
• After this problem, Parke-Davis initiated a review to determine if there were other patents in Canada which might cause future problems concerning PMPRB jurisdiction.
• On April 15, 1993, Mr. Rowan met with Andrea Ryan, Vice-President and Associate General Counsel, Intellectual Property, Warner-Lambert and another senior pharmaceutical patent lawyer for the purpose of reviewing active patents held by Warner-Lambert in Canada. This review was based upon a list of active pharmaceutical patents in “our computer data base” dated September 22, 1992 (the ‘92List). That meeting identified other patents which could cover Canadian products, one of which was a patent for a process for making the drug LOPID. That process was not used by Parke-Davis so that Parke-Davis had treated LOPID as an unpatented drug. Following the review of the ‘92List Parke-Davis voluntarily submitted LOPID to the PMPRB. It was the view of the PMPRB that Parke-Davis should previously have submitted LOPID to price controls. In consequence, Parke-Davis agreed to sign a voluntary compliance undertaking and paid back excess revenues from LOPID of just over $1.6 million dollars.
• As a further consequence of the April 15, 1993 meeting, in May and June of 1993, Parke-Davis gave notice of dedication to public use of the LOPID patent and 11 other patents.
• Parke-Davis then initiated a review of patents which had been identified as inactive patents on the Warner-Lambert data base. If confirmed as inactive, such patents were to be dedicated to public use. Mr. Rowan said there was no intention in this phase to dedicate any patent that covered a currently marketed product or a product in development or research.
• As part of this “deadwood” project, approximately 600 patents owned in Canada by Parke-Davis and Warner-Lambert and other affiliates were reviewed. At the end of the review, 324 patents were dedicated to public use. In that number were two patents unintentionally included by mistake, the ʹ768 Patent and another unrelated patent.
• Even after investigation “it is not exactly clear how this happened”. Mr. Rowan swore that:
19. The best explanation for the inadvertent inclusion of the ʹ768 Patent that I have been able to determine is as follows. From the ‘92List a preliminary list of patents to be dedicated was prepared from our computer records. This list dated February 7, 1994 is attached as Exhibit G, and, of course, it did not contain the ʹ768 Patent. Attached as Exhibit H is a portion of my copy of the ‘92List having the notation “active” in my handwriting and attached as Exhibit I is a colour copy of a portion of Andrea Ryan’s copy of the list having the notation “keep” next to the ʹ768 Patent in yellow.
20. In order to learn what happened next, I have spoken to Andrea Ryan, Jean Barish, Suhas Ambike and other people in Andrea’s staff. Andrea Ryan delegated to Jean Barish, staff attorney at Warner Lambert in Morris Plains, the responsibility to prepare a final list of patents for possible dedication. Unfortunately, for reasons which are not clear, a new list in April, 1994 (the ‘94 List) was prepared directly from Canadian Intellectual Property Office (“CIPO”) records. The ‘94List made no reference to and did not contain the notations made by Andrea and me from the ‘92List or our computer records and as a result the ‘94List did contain the ʹ768 Patent.
21. Unknown to Andrea Ryan and me, the ‘94List was used instead of the ‘92List or the February 7, 1994 List to determine the patents to be considered for dedication. Although it was reviewed again by at least me, Jean Barish, Suhas Ambike and Andrea Ryan, it was not reviewed for the purpose of removing patents covering compounds in research or clinical investigation since this review had already occurred and we thought had already been incorporated into the review process.
22. By the time of the date of the request to publish notice of dedication to public use on December 21, 1994, the compound covered by the ʹ768 Patent had already entered Phase III clinical trials on March 25, 1994. [This was the final stage of the clinical development program before registration.]
…
24. Andrea Ryan has advised me, and I believe, that Andrea did not have any intention to dedicate the ʹ768 Patent to public use. I can safely say that neither I nor Parke-Davis nor Warner-Lambert had any intention of dedicating this patent to public use.
• Thereafter, in mid-1997, Mike Atkins, a patent counsel at Warner-Lambert, was said to have discovered that the ʹ768 Patent had been inadvertently included among patents listed for dedication to public use.
• Warner-Lambert and Parke-Davis then took steps to have the notice of dedication to public use of the ʹ768 Patent retracted.
• Parke-Davis and Warner-Lambert at all times were said by Mr. Rowan to have acted as if the ʹ768 Patent was in force. Internal correspondence from Warner-Lambert’s patent counsel shows that he treated the patent as being in force, reference was made to letters of January 17, 1996 and February 10, 1997.
• At all times Parke-Davis showed the ʹ768 Patent on its computer records as a patent which should be kept in force, and paid all maintenance fees for the ʹ768 Patent. Parke-Davis submitted the ʹ768 Patent to Health Canada for listing on the Patent Register and the ʹ768 Patent has and continues to remain on the Patent Register.
[67] The second affidavit filed on behalf of Parke-Davis was sworn by a patent agent other than the agent who dealt with the CIPO with respect to the ʹ768 patent. He swore: to the steps which in his view a competent patent searcher would take if asked to ascertain the status of a patent such as the ʹ768 patent and to determine whether it had been dedicated to the public; that the search would show that the all maintenance fees for the ʹ768 patent had been paid; that at all times the patent was shown in the records of CIPO to be in good standing; and that on February 12, 1999 cancellation of the dedication of the patent was entered in the Key Index at the Patent Division of CIPO. The patent agent opined that if he discovered a patent which had been dedicated to the public use, but for which the patentee had continued to pay maintenance fees for a number of years, he would have found that odd and would have remarked on it in his report.
[68] The substance of this latter evidence was directed to Parke-Davis’ arguments that Apotex did not rely upon the dedication of the ʹ768 patent and that even if it did, such reliance was unreasonable. Parke-Davis further asserted on that evidence that its subsequent activities were inconsistent with an intention to dedicate.
[69] Apotex filed the affidavit of its president. Each deponent was cross-examined.
[70] On his cross-examination, Mr. Rowan confirmed:
That Ms. Ryan, Ms. Barish, Mr. Ambike, Mr. Atkins and Mr. Ashbrook were still with Parke-Davis or Warner-Lambert and that the patent agent who dealt with the CIPO on Parke-Davis’ behalf with respect to the ʹ768 patent was still in practice; and
That Warner-Lambert managed all patent issues and instructed Parke-Davis’ patent agents in Ottawa.
[71] Mr. Rowan further admitted that in the context of concerns about the PMPRB:
… in an imperfect world where Warner-Lambert has, to put it politely, been less than either very efficient or very effective in keeping track of its patents, in `93 and ‘94we were quite worried that we might have patents in our system that we should be reporting that we didn’t know what we had.
[72] From this review of the evidence it may be seen that Parke-Davis had the opportunity, but failed, to put before the Court the direct evidence of a number of people who would have personal knowledge of the matters in dispute. Notably absent, in my view, was the following evidence:
The evidence of Andrea Ryan as to what she intended with respect to the ʹ768 patent when on October 20, 1994 she signed the irrevocable dedication, under oath, as assistant secretary for Warner-Lambert. While Mr. Rowan purports to attach to his affidavit Ms. Ryan’s handwritten note on a portion of the ‘92list, it is not properly identified by him as something he has personal knowledge of. In any event, the question remains whether Ms. Ryan’s intent changed between the time she wrote “keep” on the list and the time the irrevocable dedication was executed. Mr. Rowan says that Ms. Ryan advised him that she did not have any intent to dedicate the ʹ768 patent, however such evidence is not in the form required by subsection 81(1) of the Rules. Moreover, this hearsay evidence cannot be said to be necessary so as to fall within the reliability and necessity exception to the hearsay rule.
Evidence as to why a new list was prepared in April 1994 directly from CIPO records. Mr. Rowan notes that the reason for this is not clear. Presumably Jean Barish or another person on staff caused that to happen and could either explain why that happened, or at least state that they are unable to recall why a new list was prepared in April of 1994.
Evidence as to why the introduction of the ‘94list is the best explanation Mr. Rowan has been able to ascertain for the inclusion of the ʹ768 patent on the list. While Mr. Rowan notes that the ‘94list “made no reference to and did not contain the notations made by Andrea and me from the ‘92list or our computer records and as a result the ‘94list did contain the ʹ768 patent”, on what was said to be Ms. Ryan’s list four patents are marked as “keep”. Yet only two patents were said to have been inadvertently dedicated. Why not more? Did Warner-Lambert’s intent subsequently change with respect to two of the patents?
Evidence from Michael Atkins as to his discovery that the ʹ768 patent had inadvertently been included among patents listed for dedication to public use. The notice of application filed to commence this proceeding stated that in support of the application would be filed the affidavits of Mr. Rowan and Michael Atkins. No explanation was provided for the omission of Mr. Atkins’ affidavit.
[73] Apotex argued that on the evidence before the Court, the Court would have to infer that both Ms. Barish who prepared the list, and Ms. Ryan who supervised Ms. Barish and who swore to the dedication, did so in error in circumstances where there is not even direct hearsay evidence based on specific information and belief as to what Ms. Barish did.
[74] Apotex further argued that there is no basis on which that inference can be drawn because of the evidence of Mr. Rowan on cross-examination that Warner-Lambert (which was managing the patents) was not effectively in control of, or keeping track of, its patents. It was submitted that while Mr. Rowan may not have intended to dedicate the patent others may have, and those others have been protected from cross-examination by virtue of the applicants’ decision not to put their evidence before the Court.
[75] Counsel for Parke-Davis acknowledged in oral argument that there was “admittedly imperfect evidence of how this thing happened” but stated that if one considered that:
(i) the company continued to treat the patent as if it had not been dedicated by renewing the patent, obtaining a NOC, submitting a patent list in respect of the patent, and submitting a notification to sell LIPITOR to the PMPRB;
(ii) the Assistant General Counsel of Pharmaceutical Patents wrote to Mr. Rowan on January 17, 1996 stating that patent ʹ768 was filed, granted and would expire on May 8, 2007, and wrote on February 10, 1997 providing an update on the patent status of atorvastatin calcium; and
(iii) the patent was dedicated by way of the inclusion of its patent number in a long list of other patent numbers and that it is easy to get numbers mixed up;
the only conclusion which could be reached is that Parke-Davis did not intend to dedicate the patent.
[76] However, the burden is on Parke-Davis to satisfy the Court by admissible evidence that it was more probable than not that the dedication of the ʹ768 patent was unintended notwithstanding that there was an undoubted intent to dedicate other patents listed on the schedule attached to the irrevocable dedication.
[77] Counsel for Apotex was correct, in my view, that at least one other potential inference may be drawn: that the dedication was deliberate arising out of confusion or miscommunication. When I consider that possible explanation together with the fact that it was well within the ability of Parke-Davis to provide first-hand admissible evidence from Ms. Ryan who executed the dedication, and Ms. Barish to whom the error appears to have been attributed, I conclude that better evidence was required given the extraordinary nature of the relief sought in this proceeding. While this evidence may well be forthcoming in any subsequent infringement proceeding, on the evidence before me I am not satisfied that, on a balance of probabilities, I can find as a fact that the dedication was not intended in the sense of being contrary to the then express intent of Warner-Lambert.
(ii) What is the legal nature of patent dedication?
[78] The Patent Act, R.S.C., 1985, c. P-4 (Act) is silent as to patent dedication. Notwithstanding such silence, it appears that dedication of a patent to the public use has become an established procedure in Canada. See, for example: Bayer Inc., supra, at paragraph 50 of the reasons and Novopharm Ltd. v. Merck & Co. (1992), 44 C.P.R. (3d) 13 (Comm. of Patents).
[79] In Genentech Canada Inc. (Re) (1992), 44 C.P.R. (3d) 316 (P.M.P.R.B.), at page 330, it was stated that in the absence of any legislative provision the response of the Commissioner of Patents to a request to dedicate a patent is to file the dedication and to subsequently publish a notice of the dedication in the CPOR.
[80] Counsel were unable to refer the Court to any Canadian jurisprudence which has expressly considered the legal nature and consequence of dedication. The only such reference made was to Genentech, supra, where one member of the Board speculated that the same approach of filing and subsequent publication would be used in the event that a “former patent holder” later decided to cancel its patent dedication.
[81] In the absence of Canadian jurisprudence, the applicants analogized patent dedication to land dedication, a representation, a promise, a waiver, or, simply a statement that the patentee would not enforce its property rights. On the basis of each analogy it was argued that dedication created no binding contract, and that through dedication a patentee simply waives enforcement of the patent. It followed, the applicants argued, that in the absence of an intent to dedicate either there is no effective dedication or the dedication can be revoked.
[82] In response, Apotex argued that the proffered analogies, all arising in the context of private disputes at common law, were not apt because patents are creatures of statute. The Supreme Court of Canada in Free World Trust v. Électro Santé Inc., [2000] 2 S.C.R. 1024, at paragraph 13 observed that patent protection is based on the concept of a bargain between the inventor and the public. An inventor acquires for a limited period the exclusive right to exploit the patent in consideration for disclosure of the invention to the public.
[83] Apotex argued that in the face of this bargain, the applicants chose to terminate the bargain by filing the dedication for the ʹ768 patent. Having done so, it was submitted that neither the applicants nor Warner-Lambert could then revive the bargain which Warner-Lambert had terminated.
[84] In asserting that a patentee who dedicates a patent cannot thereafter resume those rights at its pleasure, Apotex referred to three venerable decisions of the United States Supreme Court: Pennock et al. v. Dialogue, 2 Peters 1 (1829); Gill v. United States, 160 U.S. 426 (1896); and Shaw v. Cooper, 7 Peters 292 (1833).
[85] In Pennock, supra, the Court wrote, at page 16, that:
It has not been, and indeed cannot be denied, that an inventor may abandon his invention, and surrender or dedicate it to the public. This inchoate right, thus once gone, cannot afterwards be resumed at his pleasure; for, where gifts are once made to the public in this way, they become absolute. Thus, if a man dedicates a way, or other easement to the public, it is supposed to carry with it a permanent right of user. The question which generally arises at trials, is a question of fact, rather than of law; whether the acts or acquiescence of the party furnish in the given case, satisfactory proof of an abandonment or dedication of the invention to the public.
[86] While the Court was then considering abandonment of an invention in the context of public use prior to the patent application, Apotex noted that the Court nonetheless was speaking to the principle of a gift to the public albeit in the form of public user. Apotex submitted that whether by public user or by dedication a gift goes irrevocably to the public.
[87] This same principle of law in respect of prior public use was applied in Canada in Conway v. Ottawa Electric Railway Co. (1904), 8 Ex. C.R. 432, at pages 442-443, which in turn was adopted in Gibney v. Ford Motor Co. of Canada Ltd., [1967] 2 Ex. C.R. 279.
[88] Apotex also relied upon more recent American authority.
[89] In the United States, Title 35 of the United States Code deals with patents and section 253 governs disclaimer of patents. Section 253 provides:
§ 253. Disclaimer
Whenever, without any deceptive intention, a claim of a patent is invalid the remaining claims shall not thereby be rendered invalid. A patentee, whether of the whole or any sectional interest therein, may, on payment of the fee required by law, make disclaimer of any complete claim, stating therein the extent of his interest in such patent. Such disclaimer shall be in writing, and recorded in the Patent and Trademark Office; and it shall thereafter be considered as part of the original patent to the extent of the interest possessed by the disclaimant and by those claiming under him.
[90] U.S. District Court jurisprudence has held that the effect of a dedication to the public as permitted by 35 U.S.C. § 253 renders moot any dispute concerning the validity or infringement of the patent. See, for example, Chris-Craft Industries, Inc. v. Monsanto, Co., 59 F.R.D. 282 (C.D. Cal. 1973); Technimark, Inc. v. Crellin, Inc., 14 F.Supp. 2d 762 (M.D.N.C. 1998).
[91] U.S. District Court jurisprudence has also held that once a patentee disclaims the patent to the public the patentee cannot enforce claims under the patent or attempt to reissue any of the claims: National Semiconductor Corp. v. Linear Technology, 703 F.Supp. 845 (N.D. Cal. 1988), at page 850. In W.L. Gore & Associates, Inc. v. Oak Materials Group, 424 F.Supp. 700 (D.C. Del. 1976) the Court wrote, at pages 701-702, as follows:
A preliminary jurisdictional question is raised by defendant’s motion for a judgment of invalidity of the 915 patent. As plaintiff has formally disclaimed all claims of the patent, there is no longer a justiciable case or controversy before the Court with respect to the validity of any of those claims. Disclaimed claims cannot be revived, through reissue or otherwise. Altoona Theatres v. Tri-Ergon Corp., 294 U.S. 477, 55 S.Ct. 455, 79 L.Ed. 1005 (1935). The patentee has no further right either to enforce the claims which have been disclaimed, or to obtain a reissue of any of those claims. Since all the claims have been disclaimed, the effect of plaintiff’s action is the same as dedication of the patent to the public or abandonment. The Court, therefore, no longer has any jurisdiction with respect to the validity or invalidity of the patent. See Chris-Craft Industries, Inc. v. Monsanto Co., 59 F.R.D. 282 (C.D.Calif.1973).
[92] In Altoona Publix Theatres v. American Tri-Ergon Corp., 294 U.S. 477 (1935), the United States Supreme Court considered the effect of an invalid disclaimer of part of a patent. The issue arose in the context of a purported disclaimer of two of nineteen claims of a patent. The disclaimer was authorized by then 35 U.S.C.A. 65 which provided that when “`through inadvertence, accident, or mistake … a patentee has claimed more than that of which he was the … inventor … his patent shall be valid for all that part which is truly and justly his own’, provided that he or his assigns make disclaimer of such parts of the thing patented as he shall not choose to claim … stating therein the extent of his interest in such patent.” That provision did not permit the addition of a new element to the combination previously claimed and the United States Supreme Court found that because a new element had been added the attempted disclaimer was void. The Court then went on to consider the effect of the invalid disclaimer upon the original claims and held that [at page 492]:
With the invalid disclaimer must fall the original claims as they stood before the disclaimer. The disclaimer is a representation, as open as the patent itself, on which the public is entitled to rely, that the original claim is one which the patentee does not, in the language of the statute, “choose to claim or to hold by virtue of the patent.” Upon the filing of the disclaimers, the original claims were withdrawn from the protection of the patent laws, and the public was entitled to manufacture and use the device originally claimed as freely as though it had been abandoned. To permit the abandoned claim to be revived, with the presumption of validity, because the patentee had made an improper use of the disclaimer, would be an inadmissible abuse of the patent law to the detriment of the public.
[93] With respect to the use of American jurisprudence, Apotex referred to President and Fellows of Harvard College v. Canada (Commissioner of Patents), [2000] 4 F.C. 528 (C.A.), at paragraph 60, where the majority of the Court noted that where the statutory language which is being interpreted is similar in both Canada and the United States, and where the reasoning underlying the United States courts’ interpretation of the language is persuasive, there is no reason why Canadian courts should ignore U.S. jurisprudence.
[94] It is not for the Court in this proceeding to determine the validity of the ʹ768 patent. However, for the purpose of considering whether the allegations contained in the NOA are justified I find the American jurisprudence to be persuasive for the reasons which follow.
(iii) Has Parke-Davis established either that there was no effective dedication or that the dedication was revoked?
[95] In considering the respective submissions of the parties on the nature of dedication I begin by returning to the nature of this proceeding. The Court is, on this application, required only to determine whether the NOA was justified. While that in turn requires a decision as to whether the applicants have disproved the allegation of invalidity, expiration and false statement, this is not a final decision for all purposes on the nature of the dedication or its purported withdrawal.
[96] I have carefully considered the applicants’ submissions, argued by analogy, that in the present circumstances the purported dedication was not legally effective or it could be revoked.
[97] In view of my inability on the evidence before me to conclude that the dedication was contrary to the then express intent of Warner-Lambert I am not persuaded that the initial dedication of the patent was not legally effective. Further, notwithstanding the arguments of counsel for the applicants I am not persuaded that the applicants’ arguments provide a satisfactory analysis of the legal nature of patent dedication and, more particularly, the ability to revoke a dedication. I accept the submissions of Apotex that the cases cited by the applicants by analogy are not of assistance in the context of the statutory regime found in the Act.
[98] The closest analogy may be to the law of representation. Certainly in Altoona, supra, a disclaimer, which is similar to a dedication, was characterized to be a representation.
[99] The applicants relied upon Reid v. Standard Construction Co. (1917), 51 N.S.R. 33 (S.C.) to assert that a person making a representation can retract such representation even if some action had been taken in reliance on that representation. However, in Reid, supra, the Court noted that at a date subsequent to the alleged representation, and before it was acted upon, the party allegedly relying on the representation had distinct notice of the representor’s true position. The case is not, therefore, supportive of the proposition that representations may be withdrawn even if acted upon.
[100] Moreover, while the United States Supreme Court in Altoona, supra, characterized a disclaimer to be a representation, it concluded that once the disclaimer was filed the original claims were withdrawn from the protection of patented legislation and the public was entitled to manufacture and use the invention originally patented, and that an abandoned claim could not be revived.
[101] While there is no provision in our Act comparable to 35 U.S.C. § 253, the practice countenanced by that provision is similar to the practice of the CIPO in respect of dedication to the public. For the purpose of this proceeding I find the reasoning and the approach of the U.S. courts, particularly as articulated in Altoona, supra, sufficiently persuasive to conclude that the applicants have failed to establish that the dedication was revoked.
[102] While perhaps a severe sanction, the result is consistent with Canadian and American authority on prior public user. Further, no authority was provided by the applicants for the proposition that once an invention is in the public domain, particularly by way of the patentee’s disclaimer or dedication, it is possible by unilateral act of the former patentee to undo that fact.
[103] I therefore conclude that the applicants have failed to persuade me that any effective dedication was revoked.
[104] I note that the applicants sought to have the Commissioner revoke the dedication on the basis of section 8 [as am. by S.C. 1993, c. 15, s. 27] of the Act, although there is no express indication that the Commissioner relied upon section 8 so as to “correct” the dedication on this basis. No certificate appears in the record. The applicants did not in their submissions rely upon section 8 of the Act. Section 8 provides:
8. Clerical errors in any instrument of record in the Patent Office do not invalidate the instrument, but they may be corrected under the authority of the Commissioner.
[105] In the past, this Court has held that the type of error contemplated by section 8 is a mistake by a clerk or stenographer in transcribing a document. See, for example, Bayer Aktiengesellschaft v. Commissioner of Patents, [1981] 1 F.C. 656 (T.D.); Upjohn Co. v. Commissioner of Patents (1983), 74 C.P.R. (2d) 228 (F.C.T.D.).
[106] In the absence of a certificate issued under the authority of the Commissioner and in view of the case law as to the limited scope of the Commissioner’s authority, I cannot find that the dedication was revoked or corrected under the authority of section 8 of the Act.
[107] No other authority was referenced that would confer on the Commissioner jurisdiction to reverse a dedication of a patent to the public use.
[108] In conclusion, as I am not persuaded that the dedication was contrary to the then express intent of Warner-Lambert, or that such dedication may be properly revoked, it follows that the applicants have not established that Apotex was unjustified in its allegation that the statement that Parke-Davis is the exclusive licencee of the ʹ768 patent was false. This conclusion follows because after dedication to the public use there is no longer exclusivity with respect to the invention and because the owner of the dedicated patent has no protected rights to licence.
[109] With respect to the allegation that the ʹ768 patent had expired, subsection 43(2) [as am. by S.C. 1993, c. 15, s. 42] of the Act states that a patent is, in the absence of any evidence to the contrary, valid for the term of the patent. The applicants have not established that the dedication of the patent is not evidence to the contrary reflecting the expiration of the patent before the end of its usual term.
[110] Additionally, the word “expire” while not defined in the Act is defined in section 2 of the Regulations to mean, in relation to a patent, “expire, lapse or terminate by operation of law”. I am not satisfied that the patent did not terminate by operation of law once it was irrevocably dedicated.
[111] With respect to the assertion that the patent is not valid, the applicants have failed to satisfy me that Apotex was not justified in alleging invalidity because of the abandonment of the patent holder’s rights under the patent.
(iv) Is dedication a proper ground of allegation?
[112] Implicit in the above conclusions is the finding that dedication of a patent is a proper ground of allegation.
[113] Where due to the dedication of a patent to the public use the patentee is unable to unequivocally establish exclusive rights under the patent, I conclude that it would be unreasonable and inconsistent with the purpose of the Regulations to allow the patentee to prohibit another manufacturer from entering the market solely on the basis of the listing of the impugned patent on a patent list.
CONCLUSION
[114] For these reasons, the application for prohibition is dismissed. The issue of costs is reserved for further submissions by the parties. Counsel are invited to contact the Court within 30 days of this order to arrange for the issue of costs to be spoken to, unless agreement between counsel can be reached.
ORDER
[115] It is therefore ordered that:
1. The application for an order of prohibition is dismissed.
2. The issue of costs is reserved for further submissions.