The Backstory

In early April, the Federal Court of Canada decided that the Minister of Health was required to reconsider whether GlaxoSmithKline’s SHINGRIX vaccine was entitled to additional protection pursuant to a Certificate of Supplemental Protection (CSP).

GlaxoSmithKline Biologicals S.A. (GSK) owns a patent for its SHINGRIX vaccine, which is useful in the prevention or amelioration of shingles in adults older than 50, or in immunocompromised persons.

The Minister of Health refused GSK’s CSP application, primarily on the basis that in her view, to be eligible for a CSP, “a patent must include at least one claim limited to one or more medical ingredients or to their use” and that GSK’s patent didn’t meet this requirement because each of the claims in the patent included a non-medical ingredient (i.e., an adjuvant).

The Federal Court held that the Minister’s decision to refuse a CSP was unreasonable, finding that “medicinal ingredient” includes any ingredient that has “biological activity” in view of the CSP regime and CETA, and ordered the case back to the Minister for redetermination. The Minister then filed both a Notice of Appeal of the Federal Court’s decision and a Motion for Stay of the Federal Court’s order to reconsider the CSP application pending the appeal.

The Federal Court of Appeal Denies the Requested Stay

The Federal Court of Appeal dismissed the Minister’s stay motion, finding the Minister would suffer no irreparable harm if the stay was not granted, and instead ordered that the appeal continue in an expedited manner in accordance with the Minister’s request.

In considering whether a stay should be granted, the Federal Court of Appeal performed the tri-partite test from the Supreme Court of Canada, namely whether: (1) there is a serious issue to be tried, (2) the requestor will suffer irreparable harm if the stay is not granted, and (3) the balance of convenience favours granting the stay. All three conditions must be met in order for a stay to be granted, and the requestor bears the burden of proof throughout.

The Federal Court of Appeal focused its analysis on whether the Minister would suffer irreparable harm if the stay was not granted, as GSK conceded that there was a serious issue to be tried.

Despite the Minister’s submissions, which included that (i) the appeal would be rendered moot by CSP issuance, (ii) Canadians would be denied the opportunity to pay lower prices for competitors’ biosimilars during the CSP term, (iii) revoking a CSP issued in error is difficult and uncertain, and (iv) contradictory decisions between the Court’s decision on the appeal and the Minister’s CSP decision in this case would compromise the public interest in certainty and predictability of the CSP regime, the Federal Court of Appeal found there was no irreparable harm. It held that the Federal Court’s judgment was not time-limited and did not require a CSP be issued, and that at best the Minister’s evidence was hearsay and the allegations of irreparable harm “argumentative and speculative”.

The Court also noted that it was not persuaded the public interest would be impacted, and that the Minister had conceded that even if the stay was granted she would still be required to consider new CSP applications based on the Federal Court decision. The crux of the Minister’s appeal was a disagreement with the Federal Court’s interpretation of “medicinal ingredient”, which did not relieve her from her burden of proving irreparable harm, as there was no challenge to the validity of the law, but only a dispute regarding its interpretation. The Court further noted that the Minister “may not ignore the judgment pending appeal and must follow her normal procedures and timeframes to make a fresh decision in accordance with the Federal Court judgment.”

As the Court held the irreparable harm element of the test was not met, it did not consider the balance of convenience, instead granting an expedited hearing for the Minister’s appeal, and denying GSK its costs pursuant to the Patent Act.

The Takeaway

How this case is resolved will have a strong impact on how the CSP provisions in Canada are interpreted for years to come. It will now be interesting to see if the Minister makes a fresh decision on GSK’s CSP application before the appeal is heard, though it seems unlikely given the Court’s acknowledgement that she is not required to do so and the appeal has been expedited.