Case: Apotex Inc. v. Eli Lilly Canada Inc. 2013 FCA 282
Nature of case: Appeal of Motion to Vary Order brought under Rule 399
Date of decision: December 4, 2013

Summary

This case dealt with an appeal by Apotex Inc. (Apotex) from a decision of Justice Gauthier in T-156-05 and T-787-05 which dismissed Apotex’s motion to set aside an order granted to Eli Lilly Canada Inc. (Eli Lilly) in an earlier proceeding that prohibited the Minister of Health from issuing a Notice of Compliance to Apotex with respect of its olanzaprine product until the expiry of Eli Lilly’s Canadian Patent No. 2,041,113 (’113 Patent).

The appeal was dismissed. The Federal Court of Appeal confirmed that a finding of patent invalidity at a later point in time does not enable the Court to reach back and retroactively dismiss an application for an order of prohibition granted in an proceeding under the Patented Medicines (Notice of Compliance) Regulations (PMNOC Regulations) where the court had determined that the generic company’s allegation of non-infringement or invalidity was not justified. In the result, a subsequent declaration of patent invalidity does not allow a generic manufacturer to avail itself of the statutory cause of action for damages under section 8 of the PMNOC Regulations for having been delayed market entry.

Analysis

In a PMNOC proceeding brought by Eli Lilly, concerning the ‘113 Patent, the court granted an Order prohibiting the Minister from issuing an NOC to Apotex. This prohibition Order was later confirmed by the Court of Appeal. However, Justice O’Reilly, in the context of a separate and subsequent infringement action and cross-claim for a declaration of invalidity of the ‘113 patent declared all the claims of ‘113 Patent to be invalid.

The question at issue before the Federal Court, and the Federal Court of Appeal, was whether a declaration that a patent is invalid enables the Court to vary an earlier order and to dismiss an application for prohibition which the Court had already granted; in this case, an order prohibiting the Minister from issuing a NOC until the expiry of the ‘113 Patent.

Based on well-established law in Canada, in the Federal Court decisions in Apotex Inc. v. Syntex Pharmaceuticals International Inc., 2010 FCA 155 (Syntex) and Pfizer Canada Inc. v. Ratiopharm, 2011 FCA 215 (Ratiopharm), the Federal Court of Appeal reiterated that courts have “unequivocally held on several occasions” that a retroactive dismissal of a prohibition order after a subsequent finding of patent invalidity is not possible.

The Federal Court of Appeal further held that Apotex had not met the stringent test established by Miller v. Canada (Attorney General), to find that these decisions are “manifestly wrong” and therefore should not be considered.

Interestingly, the Court addressed Apotex’s claims that “Syntex and Ratiopharm are bad law and inconsistent with the overall scheme and purposes of the Regulations” by stating that this should more appropriately be addressed by the Supreme Court of Canada.

Link to decision:

The Federal Court of Appeal decision may be found at:
http://decisions.fca-caf.gc.ca/site/fca-caf/decisions/en/item/65035/index.do

The Federal Court decision may be found at:
http://decisions.fct-cf.gc.ca/site/fc-cf/decisions/en/item/58522/index.do?r=AAAAAQALMjAxMCBGQyA5NTIAAAAAAQ