Date : 19991112
Docket : T-1042-99
BETWEEN:
SMITHKLINE BEECHAM PHARMA INC.
and SMITHKLINE BEECHAM P.L.C.
Applicants
- and -
APOTEX INC. and
THE MINISTER OF HEALTH
Respondents
REASONS FOR ORDER
McGILLIS J.
[1] The applicants SmithKline Beecham Pharma Inc. and SmithKline Beecham P.L.C. ("SmithKline") have applied, under paragraph 6(7)(a) of the Patented Medicines (Notice of Compliance) Regulations, SOR/93-133, as amended by SOR/98-166, for an order requiring Apotex Inc. ("Apotex") to produce all relevant portions of its submissions for a notice of compliance describing the process for the preparation of the drug paroxetine hydrochloride, particularly those portions of the drug master file relating to the method of its manufacture. SmithKline has also applied, under paragraph 6(7)(b), for an order requiring the Minister of Health ("Minister") to verify that any documents produced correspond fully to the information in the submission.
i) production of portions of the submission for a notice of compliance
[2] The first issue to be determined on this motion is whether Apotex should be required to produce certain portions of its submission for a notice of compliance in relation to the drug paroxetine hydrochloride.
[3] By letter dated June 17, 1999, Apotex sent SmithKline a notice of allegation under subsection 5(3) of the Patented Medicines (Notice of Compliance) Regulations. In its notice of allegation, Apotex stated, in part, as follows:
| This is a Notice of Allegation pursuant to the Patented Medicines (Notice of Compliance) Regulations ("Regulations"). |
| With respect to Canadian Patent Nos. 2168829 and 2210023, we allege that the relevant claims of the patents are invalid, and if valid, that no claim for the medicine itself and no claim for the use of the medicine would be infringed by the making, constructing, using or selling by us of tablets for oral administration containing paroxetine hydrochloride 10 mg, 20 mg or 30 mg. |
| The legal and factual bases for these allegations are as follows: |
| The claims of Canadian Patent Nos. 2168829 and 2210023 relevant to the Regulations are limited to particular forms of paroxetine hydrochloride, namely, paroxetine hydrochloride anhydrate as defined in these patents. |
| Canadian Patent No. 1038390, issued September 12, 1978, contains claims, inter alia, to paroxetine hydrochloride when prepared by the processes described within the claims. |
| If valid, Canadian Patent Nos. 2168829 and 2210023, and the claims therein, do not include and cover therein paroxetine hydrochloride in the form disclosed and claimed in Canadian Patent No. 1038390. |
| Until expiration of Canadian Patent Nos. 2168829 and 2210023, we will use and our tablets will contain only paroxetine hydrochloride in the form according to the disclosure and claims of Patent No. 1038390 and we hereby so undertake. Details of our paroxetine hydrochloride have previously been disclosed to you in connection with Court File Nos. T-2660-96 and T-2230-97, as exhibits to the cross-examination of Jan Sedgeworth. More specially, Exhibit 1 was part 2 of volume 2 of our ANDS, and Exhibit 2 was the (drug master file) of our supplier. We hereby authorize you to refer to those materials for the purpose of dealing with this Notice of Allegation. |
| In light of the foregoing, our paroxetine hydrochloride tablets will not infringe the claims of Canadian Patent Nos. 2168829 and 2210023. ... |
[4] In its notice of allegation, Apotex authorized SmithKline to refer to excerpts of its abbreviated new drug submission and the drug master file produced in other proceedings. However, those documents previously produced by Apotex did not contain "...the detailed description and quality control information pertaining to the method of manufacture of its paroxetine hydrochloride". As a result, SmithKline alleged that the information previously produced was insufficient to determine whether the allegation of non-infringement is justified in the present proceeding.
[5] In support of its motion, SmithKline adduced affidavit evidence from an expert in chemistry, Dr. Alexander Fallis, a professor of chemistry at the University of Ottawa. In his affidavit, Dr. Fallis stated, among other things, that Canadian Letters Patent No. 1,038,390 ("'390 patent") contains a generic claim covering a large number of compounds, including paroxetine hydrochloride, but that it "...does not specifically disclose the existence of paroxetine, let alone paroxetine hydrochloride, let alone a particular polymorphic form of paroxetine hydrochloride". As a result, the allegation that Apotex would only use paroxetine hydrochloride in the form disclosed and claimed in the '390 patent revealed "nothing" to Dr. Fallis about the form of paroxetine hydrochloride made by Apotex, "...as there is no form of paroxetine hydrochloride disclosed in the '390 patent". Dr. Fallis also examined a synthetic scheme outlined in the portion of the drug master file disclosed to SmithKline, together with the disclosed portions of the abbreviated new drug submission and the teachings in Canadian Letters Patent No. 2,210,023 ("'023 patent"). In short, he concluded that there must be further processing steps after the re-crystallization step in the synthetic scheme included in the materials provided to SmithKline. In order to determine the question of infringement of the '023 patent, Dr. Fallis was of the opinion that it would be "important to know" what further processing was done by Apotex after the re-crystallization step in the synthetic scheme outlined in the disclosed portion of the drug master file.
[6] During the course of his cross-examination, Dr. Fallis admitted that a crystalline form of paroxetine hydrochloride "...that could be polymorphic..." could be made by using the generic claim 1 in the '390 patent in the event that the right substituents were chosen. Although some form of paroxetine hydrochloride could therefore be made using claim 1 of the '390 patent, he did not know what form would result, given that the '390 patent gives "no indication of form" and no discrete recipe for paroxetine hydrochloride. In contrast, the '023 patent "...is specifically directed to various forms..." of paroxetine hydrochloride, and the product can be tailored to one form or another. Although the form of paroxetine hydrochloride made under claim 1 of the '390 patent could not be predicted ahead of time, various means exist for analyzing a compound to determine its form, including X-ray diffraction, infrared spectroscopy and examining melting points.
[7] In opposing the motion brought by SmithKline, Apotex tendered evidence from Dr. Barry Sherman, the Chair of Apotex. In his affidavit, Dr. Sherman stated, among other things, that Apotex placed no reliance in its notice of allegation on the process used to make its paroxetine hydrochloride. He also noted that the claims of Canadian Letters Patent No. 2,168,829 ("'829 patent") are all product claims for paroxetine hydrochloride in its anhydrate form, and that the only relevant claim in the '023 patent is claim 5, a product by process claim for paroxetine hydrochloride anhydrate. During the course of his cross-examination, Dr. Sherman stated, among other things, that only the final product or form of the paroxetine hydrochloride was relevant to the allegation made by Apotex, as opposed to the process for making the product. He also emphasized that Apotex was using the prior art teachings of the '390 patent in making its form of paroxetine hydrochloride, and was therefore not infringing the '829 or '023 patents.
[8] Although I have not summarized all of the evidence adduced by the parties on the motion, I have nevertheless carefully considered all of it in arriving at my decision. In my opinion, SmithKline has established on a balance of probabilities that disclosure of the full process for the manufacture of Apotex' paroxetine hydrochloride is required to provide a proper evidentiary foundation for assessing the allegation of non-infringement in relation, at least, to the product by process claim in claim 5 of the '023 patent. I also note that the evidence of Dr. Fallis that it would be "important", in determining the question of infringement, to assess the further processing done by Apotex after the re-crystallization step revealed in the disclosed materials was not undermined in cross-examination. Apotex shall therefore produce to SmithKline pages 6 to 19 of the drug master file of its wholly owned subsidiary Brantford Chemicals. Those pages of the drug master file constitute a portion of the submission for a notice of compliance for the drug paroxetine hydrochloride filed by Apotex with the Minister and are relevant to the disposition of the issues raised in the proceeding.
ii) verification by the Minister
[9] The second issue to be determined on the motion is whether the Minister should be required, under paragraph 6(7)(b) of the Patented Medicines (Notice of Compliance) Regulations, to verify that the portion of the drug master file produced by Apotex to SmithKline corresponds fully to the information filed with him in the submission for a notice of compliance.
[10] Subsection 6(7) of the Patented Medicines (Notice of Compliance) Regulations governs the circumstances in which the Court may order the production of information filed in support of the submission for a notice of compliance and verification by the Minister that the information
produced corresponds with the information filed. Subsection 6(7) provides as follows:
| 6(7) On the motion of a first person, the court may, at any time during a proceeding, (a) order a second person to produce any portion of the submission for a notice of compliance filed by the second person relevant to the disposition of the issues in the proceeding and may order that any change made to the portion during the proceeding be produced by the second person as it is made; and (b) order the Minister to verify that any portion produced corresponds fully to the information in the submission. |
6(7) Sur requête de la première personne, le tribunal peut, au cours de l'instance: a) ordonner à la seconde personne de produire les extraits pertinents de la demande d'avis de conformité qu'elle a déposée et lui enjoindre de produire sans délai tout changement apporté à ces extraits au cours de l'instance; b) enjoindre au ministre de vérifier que les extraits produits correspondent fidèlement aux renseignements figurant dans la demande d'avis de conformité. |
[11] Counsel for the Minister submitted that the making of an order under paragraph 6(7)(a) need not necessarily result in the making of an order against the Minister under paragraph 6(7)(b). In other words, he characterized the making of an order against the Minister as "an additional or supplementary remedy". He further submitted that the Court ought not to make such an "additional or supplementary order unless satisfied, on appropriate grounds, that the order is necessary". In order to establish that verification is necessary, he submitted that the applicant should be required to establish "...that material differences may exist" between the documents produced and the information filed with the Minister in the submission for a notice of compliance. Counsel for the Minister cited no authority to support any of his submissions.
[12] In order to determine the proper construction of subsection 6(7) of the Patented Medicines (Notice of Compliance) Regulations, the principles of statutory interpretation outlined in the leading case Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27 must be applied. In that decision, Iacobucci J., writing for the Court, outlined the following framework for statutory interpretation, at pages 40-41:
| At the heart of this conflict is an issue of statutory interpretation. Consistent with the findings of the Court of Appeal, the plain meaning of the words of the provisions here in question appears to restrict the obligation to pay termination and severance pay to those employers who have actively terminated the employment of their employees. At first blush, bankruptcy does not fit comfortably into this interpretation. However, with respect, I believe this analysis is incomplete. |
| Although much has been written about the interpretation of legislation (see, e.g. Ruth Sullivan, Statutory Interpretation (1997); Ruth Sullivan, Driedger on the Construction of Statutes (3rd ed. 1994) (hereinafter "Construction of Statutes"); Pierre-André Côté, The Interpretation of Legislation in Canada (2nd ed. 1991)), Elmer Driedger in Construction of Statutes (2nd ed. 1983) best encapsulates the approach upon which I prefer to rely. He recognizes that statutory interpretation cannot be founded on the wording of the legislation alone. At p. 87 he states: |
| Today there is only one principle or approach, namely, the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament. |
| Recent cases which have cited the above passage with approval include: R. v. Hydro-Québec, [1997] 1 S.C.R. 213, Royal Bank of Canada v. Sparrow Electric Corp., [1997] 1 S.C.R. 411; Verdun v. Toronto-Dominion Bank, [1996] 3 S.C.R. 550; Friesen v. Canada, [1995] 3 S.C.R. 103. |
| I also rely upon s. 10 of the Interpretation Act, R.S.O. 1980, c. 219, which provides that every Act "shall be deemed to be remedial" and directs that every Act shall "receive such fair, large and liberal construction and interpretation as will best ensure the attainment of the object of the Act according to its true intent, meaning and spirit". |
| Although the Court of Appeal looked to the plain meaning of the specific provisions in question in the present case, with respect, I believe that the court did not pay sufficient attention to the scheme of the ESA, its object or the intention of the legislature; nor was the context of the words in issue appropriately recognized. I now turn to a discussion of these issues. |
[13] The principles enunciated in Rizzo & Rizzo Shoes Ltd. (Re), supra were recently applied in Francis v. Baker, [1999] S.C.J. No. 52, a case concerning the interpretation of a provision of the Federal Child Support Guidelines. In that decision, Bastarache J., writing for the Court, noted in paragraph 35 that "[p]roper statutory interpretation principles...require that all evidence of legislative intent must be considered, provided that it is relevant and reliable".
[14] In interpreting subsection 6(7), reference must therefore be made briefly to the legislative scheme in the Patented Medicines (Notice of Compliance) Regulations, its purpose and the intention of Parliament.
[15] In Eli Lilly & Co. v. Novopharm Ltd., [1998] 2 S.C.R. 129 at 144, Iacobucci J., writing for the Court, approved the following summary of the legislative scheme in the Patented Medicines (Notice of Compliance) Regulations:
| The new NOC regime is lucidly summarized in the following excerpt from the judgment of Teitelbaum J. in Glaxo Wellcome Inc. v. Canada (Minister of National Health and Welfare) (1997), 75 C.P.R. (3d) 129 (F.C.T.D.), at pp. 131-32: |
| A NOC, which formally authorizes a drug to be sold, is issued by the Minister after a drug manufacturer has complied on two fronts. The first element of compliance concerns the overall safety and efficacy of the drug: (see regulation C.08.004 of the Food and Drug Regulations, C.R.C. 1978, c. 870). The second element of compliance figures on the drug manufacturer's non-infringement of certain patents embodied in the drug. This second, rather more unexpected, patent-related requirement came into existence after changes to the compulsory licensing regime. Formerly, under a compulsory license, a generic drug manufacturer could obtain a licensed supply of a patented drug from the patent owner. The NOC process did not then concern itself with questions of patent infringement. However, with the abolition of compulsory licenses under the Patent Act Amendment Act, 1992, ... (the "Patent Act") the regime for obtaining NOCs also changed. Generic drug manufacturers now seeking NOCs must file what is called a Notice of Allegation under Section 5 of the Regulations. |
...
| In effect, under Subsection 5(3) of the Regulations, in a "Notice of Allegation", the generic drug manufacturer, "the second person", signals its compliance with the patents embodied in a medicine. Under Section 4 of the Regulations, the patent owner or licensee, usually a brand name drug manufacturer like the applicants, submits a list of the patents that contain claims for the medicine itself or the use of the medicine. Under Section 3 of the Regulations, the Minister compiles the patent lists into a public document called the "Patent Register". |
[16] With respect to the object of the legislative scheme, this Court has stated, on several occasions, that the basic purpose of the Patented Medicines (Notice of Compliance) Regulations is to prevent patent infringement. [See, for example, Apotex Inc. v. Canada (Minister of National Health and Welfare) (1997), 76 C.P.R. (3d) 1 at 11 (F.C.A.); ICN Pharmaceuticals Inc. v. Canada (Pat. Med. Prices Rev. Bd.) (1996), 68 C.P.R. (3d) 417 at 424 (F.C.A.); Merck Frosst Canada Inc. v. Canada (Minister of National Health and Welfare) (1994), 55 C.P.R. (3d) 302 at 314 (F.C.A.); Bayer AG v. Canada (Minister of National Health and Welfare) (1993), 51 C.P.R. (3d) 329 at 331-332 (F.C.A.)].
[17] In order to determine the intention of Parliament in enacting subsection 6(7) of the Patented Medicines (Notice of Compliance) Regulations, assistance may be obtained by examining the circumstances leading to its enactment, as well as the Regulatory Impact Analysis Statement prepared as part of the regulatory process. A Regulatory Impact Analysis Statement, which accompanies but does not form part of the regulations, reveals the intentions of the government and contains "... information as to the purpose and effect of the proposed regulation". [See Teal Cedar Products (1977) Ltd. v. Canada , [1989] 2 F.C. 135 at 140 (F.C.T.D.)].
[18] Prior to the enactment of subsection 6(7), there was no express legislative authority permitting the Court to order, for use in litigation under the Patented Medicines (Notice of Compliance) Regulations, the production of confidential information filed with the Minister in a submission for a notice of compliance. Given the legislative vacuum, issues arose in litigation under the Patented Medicines (Notice of Compliance) Regulations concerning the production of confidential information filed with the Minister and the circumstances in which production could be ordered. In various cases, the Court concluded that confidential information filed with the Minister in a submission for a notice of compliance was subject to production in circumstances where the relevance of the information was established by the party seeking production. [See, for example, Merck Frosst Canada Inc. v. Canada (Minister of National Health and Welfare) (1994), 53 C.P.R. (3d) 368 (F.C.T.D.); aff'd (1994), 55 C.P.R. (3d) 302 (F.C.A.); Janssen Pharmaceutica Inc. v. Apotex Inc. (1996), 68 C.P.R. (3d) 114 at 117 (F.C.T.D.); Eli Lilly and Co. v. Novopharm Ltd. (1996), 69 C.P.R. (3d) 81 (F.C.T.D.)] In two of those decisions, namely Janssen Pharmaceutica Inc. v. Novopharm Ltd., supra and Eli Lilly and Co. v. Novopharm Ltd., supra, the Court ordered the Minister to produce from the departmental files certain portions of the new drug submission on the basis that the confidential information was relevant to an issue raised in the proceeding.
[19] In 1998, the Patented Medicines (Notice of Compliance) Regulations were amended in response to the April 1997 report of the Standing Committee on Industry reviewing the Patent Act Amendment Act, 1992. In that report, changes were recommended "...to the regulatory framework to address stakeholder concerns regarding fairness, effectiveness, and reduction of unnecessary litigation". In particular, several changes were made to the Patented Medicines (Notice of Compliance) Regulations in an attempt "...to reduce unnecessary litigation and streamline the litigation process". [See Regulatory Impact Analysis Statement, SOR/98-166, Canada Gazette Part II, Vol. 132, No. 7 at 1057-1058]. One of the changes specifically referred to in the Regulatory Impact Analysis Statement as constituting a mechanism for reducing unnecessary litigation was the enactment of the provision, in paragraph 6(7)(a), permitting the Court to order disclosure of any portion of the submission for a notice of compliance, if relevant to the disposition of the issues in the proceeding. A review of the Regulatory Impact Analysis Statement therefore confirms unequivocally that, in enacting paragraph 6(7)(a), Parliament intended to reduce and streamline litigation. However, there is no specific evidence in the Regulatory Impact Analysis Statement or otherwise concerning the legislative intent underlying the enactment of paragraph 6(7)(b).
[20] Having placed subsection 6(7) of the Patented Medicines (Notice of Compliance) Regulations in its proper legislative context, the interpretation urged by the Minister must now be considered. As indicated previously, the Minister advanced two propositions with respect to the interpretation to be accorded to subsection 6(7): first, the making of an order against the Minister under paragraph 6(7)(b) is an "additional or supplementary remedy" that should not necessarily be made following the making of an order for production under paragraph 6(7)(a); and, second, the applicant must establish that "material differences may exist" between the information produced and the information in the submission for a notice of compliance before the Court requires verification by the Minister.
[21] In considering the first submission advanced by the Minister, namely that paragraph 6(7)(b) is an "additional or supplementary remedy" that should not "necessarily" be made following the making of an order for production under paragraph 6(7)(a), it is significant to note that, prior to the enactment of subsection 6(7), the Court consistently ordered the Minister, and not the second person (in most cases the generic manufacturer), to produce the confidential information. In those circumstances, there was obviously never any concern in relation to the accuracy, the completeness or the currency of the information produced, given the Minister's neutral position in such matters. However, paragraph 6(7)(a) empowers the Court to order the second person, and not the Minister, to produce the relevant portions of the confidential information filed in the submission for a notice of compliance. In the circumstances, the provision in paragraph 6(7)(b) was clearly intended to operate as an administrative check, designed to eliminate any questions being raised concerning the information produced, including matters such as its accuracy, completeness and currency. As such, paragraph 6(7)(b) was not intended to be read in isolation as an "additional or supplementary remedy", but rather was intended to constitute an integral part of every order made by the Court concerning the production of confidential information. In other words, paragraph 6(7)(b) should not be construed as a discrete power separate from paragraph 6(7)(a). Indeed, when considered in its context, the sole legislative purpose of paragraph 6(7)(b) is to reduce unnecessary litigation by eliminating any uncertainty concerning the information produced. As such, both constituent parts of subsection 6(7) are intended to reduce unnecessary litigation. Finally, the legislative amendment relieves the Minister of the more onerous burden of actually producing the information, as he was required to do under the previous jurisprudence, and replaces it with the straightforward and simple administrative task of verifying that the information produced corresponds with the information filed. That seems to be a relatively small price to pay for injecting certainty into the process, thereby reducing unnecessary litigation.
[22] As the second branch of his argument, counsel for the Minister submitted that, prior to making an order for verification under paragraph 6(7)(b), the applicant should be required to establish that material differences may exist between the information produced and the information filed with the Minister. I cannot accept that submission on the basis that subsection 6(7) contains no such test, and I see no reason to read those words into the legislation. Furthermore, the position advanced by the Minister is completely inconsistent with the underlying legislative intention in subsection 6(7) to reduce unnecessary litigation. Indeed, the interpretation urged by the Minister would have the undesirable effect of requiring an applicant to establish on a motion that material differences may exist between the information produced and the information in the submission for a notice of compliance. In litigating that issue, affidavits would be filed, cross-examinations would be conducted, other motions would perhaps be brought concerning refusals on cross-examination and a hearing would be held. In other words, the parties would be required to engage in time-consuming litigation for the sole purpose of ensuring that the Court has the proper material before it to dispose of the substantive questions raised in the proceeding. The interpretation proposed by the Minister simply cannot be consistent with the legislative intention of reducing litigation. It is also not consistent with the express wording of subsection 6(7), when considered in its entire context.
[23] The motion is granted with costs. Apotex shall produce all relevant portions of its submissions for a notice of compliance describing the process for the preparation of its drug paroxetine hydrochloride. The Minister shall verify that any portion of the submission for a notice of compliance produced corresponds fully to the information in the submission filed with him.
| D. McGillis |
| ________________________ |
| Judge |
OTTAWA
November 12, 1999