In reasons dated March 21, 2016, the Federal Court of Canada upheld a decision that allowed a patent infringement action involving tenofovir (an anti-HIV drug) to continue on the basis of allegations of a likely future (quia timet) infringement. The Court was satisfied that there was a “strong possibility of infringement” in circumstances where regulatory approval, and future market presence, of the generic copycat was “sufficiently likely” even though not inevitable that the generic would receive marketing authorization.

This ruling was made despite other court rulings where similar quia timet claims have been struck out (see for example AstraZeneca Canada Inc., et al. v. Novopharm Limited, 2009 FC 1209, aff’d 2010 FCA 112). It strengthens patent protection in Canada by allowing quia timet actions to restrain future infringement. This is especially important in circumstances where the apprehended infringement can have a drastic and potentially irreversible market impact.

The decision (published as Gilead Sciences, Inc., et al. v. Teva Canada Limited, 2016 FC 336) comes in the context of a motion brought by Teva appealing a prothonotary’s decision that declined to strike out Gilead’s claim in its entirety, thereby allowing the action to continue on the basis of amended allegations of a likely future infringement. The lower court referred to a “strong possibility of infringement” after drawing an inference that Teva’s generic regulatory submission had been approved by the Minister of Health and was on patent hold. On appeal, the Court found that “[i]n a situation where the Teva product has been contingently approved by the Minister and where Teva has unequivocally stated that, on receipt of a NOC, it will enter the market, the conclusion that a strong possibility of infringement was present cannot be characterized as an error, let alone a palpable and overriding error”.

The decision also adds clarity in instances where generic entrants are reticent to disclose their patent hold status (i.e., whether they have received provisional approval). In the right circumstance, courts will infer that a generic is on patent hold despite the absence of direct evidence establishing this to be the case.