Eli Lilly Canada Inc. v. Novopharm Limited, 2007 FCA 329

This is a preliminary decision in Eli Lilly’s appeal of the dismissal of a prohibition proceeding in connection with the drug, ZYPREXA (olanzapine).

Eli Lilly is appealing the June 5, 2007 Order of Mr. Justice Hughes dismissing Eli Lilly’s application for an order prohibiting the Minister of Health from granting Novopharm a notice of compliance (“NOC”) for its generic version of olanzapine. The case received widespread attention since just weeks before the hearing against Novopharm, Eli Lilly had been successful on a similar application brought against Apotex in connection with the same patent. Justice Hughes held that, for reasons of “comity” and/or “abuse”, he would consider only whether Novopharm had raised “new and different arguments”, had led “better evidence”, or made “more appropriate legal argument” than Apotex. He found that Novopharm had in fact made a different allegation in connection with the sufficiency of the specification of the Eli Lilly selection patent, and he held that Eli Lilly had failed to show that Novopharm’s allegation of invalidity was not justified.

Lilly has appealed Justice Hughes’ decision and Novopharm has in turn brought a motion to dismiss the appeal as being moot since it has already received a NOC for its generic olanzapine product. Four trade associations sought intervenor status on the motion and the appeal: the Canadian Chamber of Commerce (representing 170,000 businesses across Canada); BIOTECanada (a national biotechnology industry association); RX&D (the incorporated trade association for Canadian innovator pharmaceutical manufacturers); and the Canadian Generic Pharmaceutical Association (mainly representing Canadian generic drug manufacturers). The first three associations sought to support Eli Lilly’s position; the fourth association wished to support Novopharm.

Writing for the Federal Court of Appeal, Mr. Justice Sexton held that the test to be considered was whether the participation of the proposed intervenors would assist in the determination of a factual or legal issue related to the proceeding. Applying CUPE v. Canadian Airlines, [2000] F.C.J. No. 220, he found that:

(1) the proposed intervenors were not directly affected by the outcome of the proceedings;

(2) it is not clear that there is a veritable public interest at stake;

(3) the parties themselves are able to adequately present the issues and defend their positions;

(4) the interests of justice may not be served since the proceedings would be unjustifiably lengthened; and

(5) the Court is able to decide the appeal without the proposed intervenors’ assistance.

Mr. Justice Sexton stated that the issue on Eli Lilly’s appeal was a narrow one: whether the trial judge was wrong in holding that the disclosure in the patent was insufficient. By framing the issue in this way, he precluded a finding of public interest on the more controversial issue surrounding Mr. Justice Hughes’ approach to the decision at first instance which seemed contrary to the in personem nature of NOC proceedings.

Mr. Justice Sexton emphasized the summary nature of NOC proceedings (which he suggested “litigants are ignoring”) and the fact that Eli Lilly had commenced an infringement action in which the issues related to the sufficiency of Eli Lilly’s patent could be raised. On behalf of the Federal Court of Appeal he concluded that “the interests of justice would not be well served” by allowing the parties to intervene and warned that interventions in NOC proceedings should only be permitted in the “clearest of cases” and only where it is “obviously warranted”.