In Sanofi-Aventis Canada Inc. v. Novopharm Limited 2007 FCA 163 the Federal Court of Appeal has decided that a patentee who unsuccessfully challenges an allegation made by a generic drug manufacturer under the PM(NOC) Regulations cannot re-litigate the same allegation made by any subsequent generic drug manufacturer. A patentee must therefore put its best foot forward at the first opportunity, as subsequent efforts to litigate the same allegation may be barred on the ground of abuse of process.

THE FACTS

In an application brought under the PM(NOC) Regulations, Sanofi-Aventis Canada Inc. challenged an allegation by Novopharm that a patent was invalid for lack of sound prediction. Novopharm moved to have Sanofi-Aventis’s application dismissed for abuse of process in view of prior litigation between Sanofi-Aventis and Apotex Inc. involving the same patent and the same allegation of lack of sound prediction. Apotex’s allegation had been held to be justified.

THE DECISION

Majority: Sexton J.A., writing for himself and Sharlow J.A., dismissed Sanofi-Aventis’s application for the following reasons. First, Novopharm’s allegation of lack of sound prediction was materially the same as Apotex’s. Second, given that similarity, Sanofi-Aventis’s application was an abuse of process because it threatened the integrity of the adjudicative process (by raising the prospect of inconsistent judicial decisions) and undermined the efficiency of the judicial system (because there was no reason to think that another determination of the sound prediction issue would lead to a more accurate result). Third, the new evidence tendered by Sanofi-Aventis on sound prediction was irrelevant because the abuse of process doctrine prohibits a party from holding back evidence in one case and then relying on it as a ground for allowing a subsequent application to proceed. Finally, it was not unfair to prevent Sanofi-Aventis from re-litigating an allegation it had previously been unable to rebut, yet allow a generic drug manufacturer to make an allegation previously argued by another generic drug manufacturer without success. All parties are held to the same standard: they must each put forward their entire case, complete with all relevant evidence, at the first opportunity.

Dissent: Nadon J.A., in a vigorous dissenting opinion, held that Sanofi-Aventis’s application was not an abuse of process. Judgments under the Regulations do not dispose of the issues of patent infringement or validity on the merits. It would be unfair to deprive Sanofi-Aventis of the ability to challenge Novopharm – a right given to it by the Regulations – particularly when it might ultimately obtain a declaration on the merits that the patent in question is valid.

THE IMPACT

The Sanofi decision may be expected to result in more motions being filed under the Regulations to dismiss applications for abuse of process, with the battleground being the “material sameness” of the generic drug manufacturers’ allegations. This decision may also affect litigation outside of the Regulations, given the majority’s recognition of abuse of process as a doctrine “unencumbered” by specific requirements. While these and other consequences remain to be seen, one message is crystal clear: for patentees litigating under the Regulations, mounting the strongest possible case on the evidence in the first proceeding against a generic drug manufacturer is now mission critical.