Cross-licensing agreements held to not trigger the requirement to send a Notice of Allegation under the PM(NOC) Regulations
Teva Canada Limited v. Pfizer Canada Inc., 2016 FCA 248

The Federal Court of Appeal has overturned two decisions of the Federal Court, relating to the issuance of an NOC to a generic company who did not have to send a Notice of Allegation first because they had cross-licenced their submissions.

The appeals relate to the issuance of NOCs to Teva for an exemestane tablet, and to Hospira for infliximab. Teva's ANDS for its exemestane product was cross-referenced to another generic's NOC. For its part, Hospira had filed a NDS that cross-referenced Celltrion's NOC and certified that it had entered into a licensing agreement with respect to infliximab. Celltrion agreed to stop selling the product and Hospira agreed to sell a product that was identical in all ways to Celltrion's, but for the manufacturer's name.

Pfizer challenged the first NOC and the Federal Court set aside the decision to issue the NOC (2014 FC 1243, summarized here). Janssen challenged Hospira's NOC and the Federal Court set aside the NOC on consent without prejudice to any right of appeal.

The appeals were tasked with deciding two issues:

  1. What is the standard of review to be applied to a decision of the Minister of Health to issue a Notice of Compliance to a generic manufacturer in circumstances when the Minister determines that the generic's drug submission is administrative in nature so that it does not trigger the notice requirement found in section 5 of the PMNOC Regulations ?
  2. Did the Federal Court err when it decided that the Minister's decisions should be set aside? This, in turn, requires consideration of whether the Minister erred in issuing two Notices of Compliance (NOC) without requiring each applicant to notify the affected patentee that the applicant was seeking a NOC.

The standard of review that should have been applied was found to be reasonableness, not correctness. The Court of Appeal held that the Minister has exclusive jurisdiction to decide whether a drug submission filed by a second person makes a comparison with a Canadian reference product so as to require the second person to address a patent listed on the Patent Register. On that basis, where there is a discrete or special administrative regime in which the decision-maker has special expertise, that decision-maker is entitled to deference. Using this standard, the Minister's decisions were held to be reasonable.

This was because the regulation-making power in subsection 55.2(4) of the Patent Act is expressly limited to prevention of infringement by a generic manufacturer who takes advantage of the early working exception. Citing a prior decision, it was stated that the Minister must attempt to determine whether a listed patent was early worked before requiring a generic to address a listed patent. The Court of Appeal held it was reasonable for the Minister to conclude that neither Teva nor Hospira had early worked the patented invention.