On November 5, 2007, a majority of the Federal Court of Appeal granted a motion brought by Novopharm Limited (“Novopharm”) dismissing an appeal brought by Eli Lilly Canada Inc. (“Eli Lilly”) as moot. The decision is another in a long line of consistent Court of Appeal judgments that have held that once a notice of compliance (“NOC”) is issued to a generic, a patent holder’s appeal under the Patented Medicines (Notice of Compliance) Regulations, is moot.

Eli Lilly was appealing a June 5, 2007 Order of the Federal Court dismissing its application for an order of prohibition relating to ZYPREXA (olanzapine) tablets. In the underlying NOC proceeding, Novopharm had alleged that the disclosure of a selection patent owned by Eli Lilly was insufficient. The Federal Court held that Eli Lilly had “failed to demonstrate” that this allegation was not justified. Eli Lilly appealed the decision, mainly on the basis that the Federal Court erred in finding that the “patent fails to provide sufficient disclosure in its specification as to the invention, if any, in selecting olanzapine from a previously disclosed group of compounds”. Novopharm brought a motion to dismiss the appeal as moot, on the basis that it had already received its NOC for Novo-Olanzapine tablets.

In responding to the motion to dismiss, Eli Lilly asked the Court to revisit the law on a patent holder’s right to appeal, mainly in light of the Federal Court’s recent decision in Sanofi-Aventis Canada Inc. v. Novopharm Limited et al. 2007 FCA 163. In Sanofi-Aventis, the Federal Court held that, having lost in a NOC proceeding to one generic, it was an abuse of process for the patent holder to relitigate the same issue against another generic. Eli Lilly argued that the effect of Sanofi-Aventis was that, even if the Court could not set aside the NOC, a patent holder’s appeal is not moot as against other generics. The Court of Appeal rejected Eli Lilly’s argument holding that such considerations could not change the finding of mootness, since the Court could still not quash a properly issued NOC vis à vis Novopharm.

The majority of the Court of Appeal held that Lilly’s appeal was moot and decided not to exercise its discretion to hear the appeal. Applying the Supreme Court’s test in Borowski, they held that:

  • While there was still a live issue between the parties, Eli Lilly had since sued Novopharm alleging the infringement of its selection patent and that action provided a forum to address the question of the threshold for disclosure in selection patents.
  • The concern for judicial economy weighed against the hearing of the appeal. The Court of Appeal reiterated its recent refrain that NOC proceedings are taxing the judiciary’s resources. In the Court of Appeal’s view, it made little sense to hear a moot appeal where the main issue would be the subject of an infringement action already in progress. The majority also considered that there was “no social cost” in leaving the matter of “selection patents” undecided, since “social costs” must be considered from the perspective of society in general as opposed to a particular industry.
  • The majority considered the third factor, whether the Court would be trespassing upon the role of Parliament, as relatively unimportant in this case.

Eli Lilly had argued that the Court should hear the appeal so that the law could be made clear as to whether comparative data is required to be disclosed in selection patents. Importantly, the majority of the Court of Appeal questioned whether the Order under appeal could be taken to stand for the broad proposition that comparative data must always be provided in a selection patent. Instead, they suggested that it was “arguable” that what was meant in the underlying decision was that the disclosure in a selection patent must explain what the “surprising and unexpected” properties of the drug in the new selection patent were.

Justice Pelletier wrote a dissenting opinion in which he agreed that while the appeal was moot, he would have exercised the Court’s discretion to hear the appeal. He considered that it would be in the interests of judicial economy to hear the appeal since, in his view, the decision under appeal “is an authoritative statement of law” that it creates a doubt with respect to selection patents as a class.

LINK TO DECISION: http://decisions.fca-caf.gc.ca/en/2007/2007fca359/2007fca359.html