In a recent decision, Apotex Inc. v. Janssen-Ortho Inc, the Federal Court of Appeal has limited the scope of the abuse of process doctrine in applications under the Patented Medicines (Notice of Compliance) Regulations. In particular, the Court held that even when an innovator company has been successful in a patent case against one generic manufacturer, it is not an abuse for a second generic to re-litigate the same issues. This is an important clarification in the law, and will affect the way in which innovators conduct and argue cases under the Regulations.
The facts of the case are slightly unusual. Several years ago, Novopharm served a notice of allegation, alleging patent invalidity, regarding the patent for Janssen’s drug levofloxacin. Janssen’s consequent application for prohibition was heard by Justice Mosley, who decided that Novopharm’s allegation of invalidity was justified. When Novopharm received a Notice of Compliance, Janssen sued for patent infringement on the same patent. Novopharm defended the lawsuit on the basis that the patent was invalid. The trial was heard by Justice Hughes, who held that the patent was valid, and enjoined Novopharm from selling levofloxacin.
Notwithstanding Justice Hughes’s decision, Apotex served its own allegation, alleging patent invalidity. Justice Shore, in hearing the case, looked to the Court of Appeal’s decision in Sanofi-Aventis Canada Inc. v. Novopharm Limited and concluded that for a second person (i.e., generic) to succeed after a patent has been upheld, it must show “better evidence” or “more appropriate legal argument.” Finding that Apotex had not advanced better evidence or more appropriate legal argument in its case, Justice Shore allowed the application and granted prohibition on the basis that it was an abuse of process for Apotex to re-litigate the same issue upon which Justice Hughes had already decided.
The Federal Court of Appeal has now reversed that decision. All three judges (Justices Nadon, Trudel and Layden-Stevenson) agreed that the doctrine of abuse of process, while capable of barring a first person (i.e., innovator) from re-litigating an issue, was never intended to apply to a generic who is litigating a patent for the first time. The Court held that, instead, each subsequent case should be considered on its own merits.
Although this decision appears to take an arrow out of the brand name company’s quiver, other than requiring first persons to re-litigate a case on the merits, it remains to be seen to what degree this decision will affect the outcome of PM(NOC) applications. It is true that brand name companies will no longer be able to argue that a generic’s arguments constitute an “abuse of process” and will have to deal with each case on its merits. However, it is equally true that once another generic has been unsuccessful, first persons remain able to rely on the principles of judicial comity and stare decisis (i.e., respect for precedent). These principles require the court to follow its own decisions unless the party urging the court to depart from that decision is able to either point to a factual distinction between the previous decision and the case before the court or to demonstrate that the original decision is “manifestly wrong.”