Brandon Heard February 6 2023 Federal Court rejects pre-trial determination of question of law about nature of section 8 but-for world Smart & Biggar | Intellectual Property - Canada Brandon Heard Intellectual Property IntroductionFactsDecisionIntroductionThe Federal Court found Janssen's Canadian Patent No. 2,661,422 (the 422 patent) – which relates to treatment of prostate cancer in humans by co-administration of abiraterone acetate (Janssen's Zytiga) and prednisone – invalid in actions under the Patented Medicines (Notice of Compliance) (PMNOC) Regulations against Apotex, Dr. Reddy's and Pharmascience (for further details, see "Janssen's abiraterone acetate and prednisone combination therapy patent found invalid"). The Federal Court of Appeal upheld the invalidity of the 422 patent on appeal (for further details, see "Federal Court of Appeal upholds obviousness finding with regard to Janssen's abiraterone acetate and prednisone combination therapy patent").Dr. Reddy's seeks damages from Janssen pursuant to the amended section 8 of the PMNOC Regulations for its lost sales of abiraterone acetate. Justice Southcott recently decided three previous motions in section 8 actions relating to abiraterone acetate (for further details, see "Federal Court rejects trial of common issues and allows pleadings amendment concerning supply disruptions in abiraterone acetate amended section 8 actions").In this fourth motion, Dr. Reddy's requested the Federal Court's determination of a question of law prior to trial as to the nature of the section 8 but-for world. On 5 December 2022, Justice Southcott dismissed the motion.(1)FactsIn the real world, Janssen did not renounce the statutory stay against Dr. Reddy's, Apotex and Pharmascience. The minister was therefore precluded from granting marketing approval until resolution of Janssen's section 6 actions.In defence of the section 8 action, Janssen asserted that if Dr. Reddy's had entered the market earlier than its date of approval in the real world, other generic pharmaceutical companies – including Apotex and Pharmascience – would have done so as well.In response to Janssen's defence, Dr. Reddy's sought a determination prior to trial of the following question:Under the [PMNOC Regulations], when a patentee has exercised its right to a section 7 statutory stay against generic entry, and never resolved or renounced that right in relation to certain generics in the real world, does that same obstacle to entry by those generics prevail in the section 8 but-for world (other than the section 8 claimant)?DecisionEarly determination of a question of law under rule 220 is typically conducted in two stages. First, the court must determine whether it is appropriate for the proposed question to be addressed in a pre-trial motion. If the answer at the first stage is affirmative, the motion proceeds to the second stage to determine the legal question.The present motion related to the first stage only. Justice Southcott held that "circumstances of this matter do not favour the Court exercising its discretion to determine the proposed question as a preliminary matter in advance of trial".Test under rule 220(1)(a) is satisfied, subject to Court's residual discretionJustice Southcott found that Dr. Reddy's had met the requirements under the Federal Courts Rules for a determination of a question of law prior to trial:there was no dispute as to any fact material to the question of law to be determined;what was to be determined was a pure question of law; andits determination would be conclusive of a matter in dispute so as to eliminate the necessity of a trial or, at least, shorten or expedite the trial.Discretionary analysis does not favour preliminary determinationHowever, Justice Southcott noted that "early determination of a question of law is an exceptional procedure" and based on the following discretionary factors, dismissed the motion:agreement of the parties – none;difficulty and importance of the proposed question – the question was important and could have a significant impact on calculation of damages and as precedent;desirability of answering the question in a vacuum – the Court could benefit from the "full factual context provided by a trial", in view of the potential impact on the present case, related cases (including section 8 cases by Apotex and Pharmascience) and future cases; andpossibility that the determination of the question before trial might, in the end, save neither time nor expense – Dr. Reddy's had not provided evidence of time or expense that would be saved; it was not sufficient to argue that such savings were self-evident. Additionally, this process could add work for the parties, who were six months from trial.Dr. Reddy's may appeal as of right to the Federal Court of Appeal.For further information on this topic please contact Brandon Heard at Smart & Biggar by telephone (+1 416 593 5514) or email ([email protected]). The Smart & Biggar website can be accessed at www.smartbiggar.ca.Endnotes(1) Dr. Reddy's v Janssen, 2022 FC 1672.