Applications pursuant to the PMNOC Regulations are often complex and must typically be decided within 24 months of the start of the case. This is because innovators want to prevent the need for the consent to extend past the 24-month timeline provided by the Regulations, or for alternative approaches. Generic drug manufacturers also usually prefer to have these cases progress efficiently in order to expedite the entry of their generic product on the market, if successful.
One device the Federal Court uses to promote the smooth operation of these cases is the “Case Management” system. Typically, a Prothonotary is assigned at an early stage in the application to manage the application prior to the hearing. Case Management permits the parties to seek interlocutory relief from the court, often on a more informal basis (i.e., without the need to file a motion). This is especially true for matters counsel can agree on, such as scheduling and protective orders.
Filing of Evidence
In the ordinary course, applicants must first deliver their evidence in applications brought in the Federal Court. This requirement can sometimes produce an inefficient result in PMNOC applications, particularly when the generic drug manufacturer has alleged that the claims of numerous patents are not valid. Innovators often file extensive expert evidence in response to allegations of invalidity contained in the Notice of Allegation (NOA), yet generics never actually pursue these allegations in the course of filing their responding evidence.
As a result, and in particular where allegations of invalidity have been made, the Federal Court has recently recognized that reversing the order of evidence may be appropriate. This way, the innovator will restrict its responding evidence to matters actually addressed by the generic’s evidence.
This development has not come overnight. Citing basic principles of civil procedure, innovators have long argued that a generic drug manufacturer alleging invalidity of a patent should be required to deliver its evidence of invalidity first. Since a patent is presumed to be valid absent evidence (and not allegations) to the contrary, a generic attacking the validity of a patent in light of that presumption should first be required to serve evidence sufficient to displace that presumption.
In December 2007, the Federal Court issued a Practice Direction which, amongst other things, directed the Case Manager to consider whether a reversal of the order of evidence was appropriate. While such an order had been granted prior to the issuance of this Practice Direction, it signalled a new direction of the court ? one that implicitly acknowledges the inefficiencies inherent in the former approach.
Recent Decisions on Reversal
Four recent Federal Court decisions have provided guidance to the parties on reversing the order of evidence in these applications:
In Astrazeneca Canada Inc. v. Apotex Inc. 2008 FC 537, Prothonotary Aalto noted that in order to reverse the order of the evidence, there must be a reasonable prospect of savings in time and expense. On the facts of this case, Prothonotary Aalto did not find that reversal would achieve any savings, and therefore declined to order that delivery of evidence be reversed. Specifically, Prothonotary Aalto held that given the history of litigation and the fact that Apotex’s NOAs were very detailed and outlined the evidence with great detail, it could hardly be said that the innovator did not have sufficient insight into Apotex’s position on invalidity. Nor was the court inclined to order reversal solely on the basis of the number of pieces of prior art (60) cited by Apotex, since many of them were only a few pages in length.
In Lundbeck Canada Inc. v. Ratiopharm Inc. 2008 FC 579, Prothonotary Aronovitch addressed the same issue, but with a twist. Ratiopharm had argued that if the court was inclined to order reversal, it should only order partial reversal of the evidence. That is, the innovator should still be first required to file any factual evidence relating to certain grounds of validity. Prothonotary Aronovitch held that it was not practical to attempt to dissect the grounds for validity, and therefore declined to order partial reversal. Prothonotary Aronovitch held that a full reversal on validity would result in the substantial narrowing of the issues on invalidity, along with the likely commensurate limits on the number of experts ? thereby offering substantial economies, including the likelihood of the need for reply evidence.
In Eli Lilly Canada Inc. v. Novopharm Limited, 2008 FC 875, Justice Tremblay-Lamer was asked by Novopharm to set aside Prothonotary Tabib’s scheduling order, in which Prothonotary Tabib had reversed the order of evidence with respect to invalidity. Notably, Prothonotary Tabib ordered Novopharm to deliver its evidence on validity prior to receiving any evidence from Eli Lilly. This meant that Eli Lilly had received the tactical advantage of seeing Novopharm’s evidence on claims construction prior to delivering its own evidence (though often generic drug manufacturers detail their claims construction in their NOA). Justice Tremblay-Lamer dismissed Novopharm’s appeal, emphasizing Prothonotary Tabib’s experience in dealing with these matters. While Justice Phelan had previously stated that the order of evidence could be reversed in certain circumstances, this is the first considered decision of a judge of the Federal Court granting such relief.
In Biovail Corporation v. Canada (Minister of Health), 2008 FC 1162, Prothonotary Aalto found that invalidity was the dominant issue in the application. The court ordered reversal because it found that reversal would more sharply define the issues, avoid splitting the case, and ensure Biovail did not file evidence “in a vacuum.” The dominant consideration for the reversal is whether it will streamline the proceeding or cause delay and increase expenses as a result of further motions seeking to file reply evidence.
Reversal is now a reality in the Federal Court, and the recent cases that have considered it express consistent themes. The court has recognized the intuitive, common-sense appeal of ordering reversal on the issue of invalidity. However, while there is no comprehensive list of factors to consider for ordering a reversal of evidence, the primary consideration for it will be whether it will streamline the proceeding ? and in particular, whether it will prevent the need for the filing of reply evidence. Whether the court will embrace a full reversal of the order of evidence, including allegations of non-infringement, remains to be seen.