Ottawa, Ontario, July 27, 2006
PRESENT: The Honourable Mr. Justice Lemieux
BETWEEN:
WARNER-LAMBERT COMPANY, LLC
and
RANBAXY LABORATORIES LIMITED
REASONS FOR ORDER AND ORDER
(Unredacted with the consent of the parties from Confidential Reasons for Order and Order issued on June 21, 2006)
Introduction and Background
[1] This is an appeal by the Respondent Ranbaxy Laboratories Limited (Ranbaxy) from the confidential interlocutory order issued on March 2, 2006 by Prothonotary Milczynski (the Prothonotary) in a proceeding under the Patented Medicines (Notice of Compliance) Regulations (the Regulations) in which the applicants seek to prohibit the Minister of Health (the Minister) from issuing a Notice of Compliance (NOC) to the respondent, Ranbaxy to enable it to market its cholesterol-reducing tablets. The Minister did not appear on this appeal.
[2] Upon motion made by the applicants Pfizer Canada Inc. (Pfizer) and Warner-Lambert Company, LLC, (Warner-Lambert) the Prothonotary's order dealt with three points:
1. She struck out paragraphs 95 to 99 inclusive from the affidavit of Derrick Lawrence Joel Clive, one of Ranbaxy's experts. Those paragraphs referred to statements made by Warner-Lambert during the prosecution of related or similar patents in the US and in Europe as well as Canadian Patent no. 1,330,441 (the 441 Patent). She also ordered that the file histories of those foreign patents and a Danish Patent application be struck from the Court's record;
2. She granted the applicants leave to serve and file five reply affidavits; and
3. She granted to the respondents leave to file sur-reply evidence.
[3] Counsel for Ranbaxy makes the following arguments on this appeal:
1. The paragraphs the Prothonotary struck as well as the file histories did not go to patent construction, it is an admission about the content of Atorvastatin and is directly relevant to the NOC proceedings and, in any event, this issue should have been left to the applications judge.
2. The Prothonotary applied the wrong test and unnecessarily extended Rule 312 of the Federal Court Rules, 1998 (the Rules) to grant the applicants leave to file a reply affidavit. She also erred when she stated Ranbaxy in its response affidavit had raised new issues.
[4] I set out the following background facts.
[5] Two Canadian Patents are involved in this appeal. The first is Canadian Patent No. 1,268,768 (the 768 Patent); the second is Canadian Patent No. 2,021,546 (the 546 Patent).
[6] Those Patents are owned by Warner-Lambert and marketed by Pfizer under the name Lipitor. These patents concern a molecule known as Atorvastatin and its calcium salt.
[7] In its Notice of Allegation (NOA) dated January 31, 2005 Ranbaxy claimed its tablets would not infringe the 768 Patent. Ranbaxy did not allege the 768 Patent was invalid. Ranbaxy stated legal and factual basis for its allegation on non-infringement is that the 768 Patent is directed to racemates and not to a single enantiomer which is what its tablets have (a racemate is a substance containing equal amounts of two enantiomers).
[8] In its application to prohibit the Minister from issuing the NOC to Ranbaxy, Pfizer and Warner-Lambert answered the NOA by claiming the structural formula described in claim 1 of the 768 Patent was not solely directed to racemic compounds but also covered a single enantiomer (the R-trans and the S-trans forms) and other compound mixtures of Atorvastatin.
[9] With respect to the 546 Patent, Ranbaxy's NOA of January 31, 2005 alleged claim 6 of that patent was invalid on the basis of obviousness i.e. common general knowledge. In its prohibition application, Pfizer and Warner-Lambert tendered several affidavits to prove the commercial success of Lipitor. It is acknowledged by them commercial success is a secondary indicia rebutting obviousness.
[10] One of the affidavits filed by the applicants on this issue was the affidavit of Christopher Bokhart, sworn September 1, 2005 (the Bokhart Affidavit). That affidavit evaluated Lipitor's commercial success including the growth of its share in the statin market, the growth of the statin market as a whole, Lipitor's ability to differentiate itself from the statin market based on its superior efficacy and safety profiles, the effect of advertising in promotion on sales of this product, a price comparison with other statins and a comparison with two statins that entered the market after Lipitor.
[11] In reply to this affidavit Ranbaxy tendered the affidavit of Dr. Douglas Bowman sworn January 14, 2006 (the Bowman affidavit). Doctor Bowman stated Mr. Bokhart's use of annual sales data was not appropriate because it masked potential variations at the monthly level that could be important in explaining the effects of marketing variables on Lipitor's sales. He also suggested Mr. Bokhart made certain transcription errors when he aggregated data and suggested some of that data was simply inaccurate. Moreover, Dr. Bowman asserted Mr. Bokhart's use of a ratio analysis was inappropriate because such analysis could not demonstrate a causal relationship between marketing and sales. Dr. Bowman claimed certain specific ratio analysis by Mr. Bokhart were wrong because of omitted certain data. Finally, Dr. Bowman offered a number of alternative explanations for Lipitor's sales.
[12] Prothonotary Milczynski had before her Mr. Bokhart's proposed reply affidavit in which he described his position with respect to the allegations contained in Dr. Bowman's affidavit.
[13] I should indicate that while Pfizer and Warner-Lambert proposed to file five reply affidavits, Ranbaxy only challenged the Prothonotary's order with respect to the proposed Bokhart reply affidavit on the 546 patent issue.
The Standard of Review
[14] The standard of review from a discretionary order of a Prothonotary is well-established. Such order cannot be disturbed on appeal unless:
(a) the question(s) raised in the order is or are vital to the final issue of the case, or
(b) the order is clearly wrong, in the sense that the exercise of discretion by the Prothonotary was based upon a wrong principle or upon a misapprehension of the facts (see Canadav. Aqua-Gem Investments Ltd. [1993] 2 FC 425 (C.A.) and Merck and Co. v. Apotex Inc (2003) 30 C.P.R. (4th) 40 (F.C.A.).
[15] The parties agree the questions raised in Prothonotary Milczynski's order are not vital to the final issue of the case and, therefore, I must find the Prothonotary to be clearly wrong.
The Prothonotary's Decision
[16] Prothonotary Milczynski made her order based on the following reasons.
(a) The 768 Patent
[17] In terms of striking out portions of the Clive affidavit and the file histories, made during the foreign patent prosecutions, the Prothonotary found Ranbaxy sought to rely upon this material in support of its interpretation or construction of claim 1 of Pfizer's 768 Patent. Relying on two recent decisions of the Supreme Court of Canada in Whirlpool Corp. v. Camco Inc. [2000] 2 S.C.R. 1067 and Free World Trust v. Électro Santé Inc. [2000] 2 S.C.R. 1024, she stated it was "settled law that in the course of this claims construction, statements or admissions made in the course of patent prosecution cannot be used to interpret claims. Extrinsic evidence such as these statements or file wrappers in respect of the patent at issue or other patents in foreign patent prosecutions are not relevant and not admissible to determine the scope of the claims and validity of the patent."
[18] Protohonotary Milczynski concluded "with respect to the impugned paragraphs of the Clive Affidavit, and the foreign file wrappers, I am satisfied that Ranbaxy seeks to rely on this material in support of their interpretation or construction of the 768 Patent claims, and for no other purpose. The impugned paragraphs of Clive Affidavit and the foreign file wrappers relate to and are in support of Ranbaxy's interpretation of Structural Formula 1 of Claim 1 of the 768 Patent. With respect to the foreign file wrappers Ranbaxy seeks to rely upon statements made in certain American and European Patent prosecutions that purport to support Ranbaxy's interpretation of the 768 Patent that it claims only racemates and not individual enantiomers."
[19] She mentioned rulings made by Courts in the United Kingdom and in the United States in proceedings related to the counterparts to the 768 Patent proceeding where the very same statements which Ranbaxy sought to rely upon in this NOC proceeding were held to be inadmissible or irrelevant on the issue of claims construction in substantive proceedings in those foreign jurisdictions.
[20] In striking out the evidence, Prothonotary Milczynski stated "while the Court should be reluctant to strike out evidence in applications that are to be determined in an expeditious and summary fashion, the foreign file histories are not relevant to any issue in this proceeding. To allow this evidence to remain in the record would require Pfizer to address it in its evidence and deal with it on cross-examination."
(b) The 546 Patent
[21] In terms of allowing the applicants to file reply evidence pursuant to Rule 312 of the Federal Court's Rules, 1998 (the Rules), relying upon Abbott Laboratories v. Canada (MOH) (2003), 29 C.P.R. (4th) 450 (F.C.T.D.), Atlantic Engraving Limited v. Lapointe Rosenstein (2002), 23 C.P.R. (4th) 5 (F.C.A.); and Eli Lilly & Co. v. Apotex Inc. (1997), 76 C.P.R. (3rd) 15 (F.C.T.D.), the Prothonotary held "it is settled law that the appropriate test in determining whether or not to grant leave requires the Court to consider:
· whether the additional evidence serves the interests of justice;
· whether the additional evidence will assist the court in making its final determination; and
· whether there will be substantial or significant prejudice to the responding party.
[22] The Prothonotary stated the test under Rule 312 of the Rules "is less strict than the test to be applied for reply evidence in the context of a trial." adding "this is particularly appropriate in the context of an application under the Patented Medicines (Notice of Compliance) Regulations, where the applicant is responding to a Notice of Allegation and must anticipate the evidence and matters at issue. Often the issues are only made clear to the applicant after the respondent has put in its evidence."
[23] The Prothonotary concluded the five affidavits the applicants seek leave to reply "are responsive to new issues raised in Ranbaxy's evidence." She also found "where Ranbaxy points to the new arguments as simply being a disagreement among experts, it would assist the Court to have the clarification or further explanation of expert opinion, rather than to leave it to cross-examinations." She concluded the affidavits "address arguments or new issues raised in the Ranbaxy evidence and/or provides the Court with information that will be of assistance in the final determination of the application." [Emphasis mine]
[24] The Prothonotary also stated there was no evidence of prejudice to Ranbaxy who had filed no affidavit evidence of harm or delay and, in addition, the applicants as part of their motion had stipulated Ranbaxy should have leave for sur-reply evidence.
Analysis
[25] For the reasons that follow, I am of the opinion Ranbaxy's appeal must be dismissed despite the valiant efforts by its counsel to persuade me the Prothonotary's decision was clearly wrong in the sense that the exercise of her discretion was based upon a wrong principle or upon a misapprehension of the facts. Quite to the contrary, my view is her decision is a correct one which is a higher standard I need to apply.
(a) The 768 Patent Issue
[26] Ranbaxy, in its NOA, clearly alleged the making and selling of its Ran-Atorvastatin tablets would not infringe the 768 Patent and as the legal and factual basis for that allegation it stated this Patent was restricted to racemates and not to single enantiomers which is what the Ranbaxy product contains.
[27] Ranbaxy, as the legal and factual basis for its allegation of non-infringement, stated a person ordinarily skilled in the art would understand the 768 Patent is directed to racemates and
not to single enantiomers for a number of reasons related to the method for preparing the compound of structural formula 1 which must, according to the appellant, by a fundamental law of chemistry, give only racemates and also because there is no teaching anywhere in the 768 Patent of any method for obtaining single enantiomers nor is there any example of obtaining single enantiomers.
[28] At page 8 of its NOA, under the heading "Other evidence confirms the 768 Patent is restricted to racemates", Ranbaxy stated "this interpretation that the 768 Patent is restricted to racemates is independently confirmed by the following information." Thereafter, Ranbaxy's NOA mentions the admissions made by Walter-Lambert during foreign Patent prosecutions.
[29] The Clive affidavit follows the structure of Ranbaxy's NOA. Dr. Clive stated he had been asked to address the interpretation a person skilled in the art would give the 768 Patent and beginning at page 76 of his affidavit gives his interpretation of structural formula 1 referring to the method of synthesis of the compounds set out in the 768 Patent and the fact this Patent did not provide any teaching how the method could produce a compound with a single enantiomer.
[30] Beginning at paragraph 95 of his affidavit, under the heading "Walter-Lambert has stated that structural formula 1 is the racemate", Dr.Clive stated as follows:
"I note that statements made by Walter-Lambert during prosecution of related patents involving the identical chemistry in the US and Europe...are inconsistent with the position taken by Pfizer in this proceeding but consistent with my opinion on the interpretation of structural formula 1."
[31] Central to the determination of the NOC proceedings is the justification surrounding the issue of infringement of the 768 Patent by the making and the selling of Ranbaxy's proposed tablets. This issue must be determined by the construction of the claims in the Patent since claims construction will establish the scope of the Patent claims which resolves the issue of infringing use (see Monsanto Canada Inc. v. Schmeiser [2004] 1 S.C.R. 902 at paragraph 119).
[32] In deciding to strike the paragraphs from Dr. Clive's affidavit and the file wrappers, Prothonotary Milczynski relied upon paragraphs 66 and 67 of Justice Binnie's decision in Free World Trust, supra, which I cite:
¶ 66 In my view, those references to the inventor's intention refer to an objective manifestation of that intent in the patent claims, as interpreted by the person skilled in the art, and do not contemplate extrinsic evidence such as statements or admissions made in the course of patent prosecution. To allow such extrinsic evidence for the purpose of defining the monopoly would undermine the public notice function of the claims, and increase uncertainty as well as fuelling the already overheated engines of patent litigation. The current emphasis on purposive construction, which keeps the focus on the language of the claims, seems also to be inconsistent with opening the pandora's box of file wrapper estoppel. If significant representations are made to the Patent Office touching the scope of the claims, the Patent Office should insist [page1062] where necessary on an amendment to the claims to reflect the representation.
¶ 67 This is not to suggest that prosecution history can never be relevant for a purpose other than defining the scope of the grant of the monopoly: Foseco Trading A.G. v. Canadian Ferro Hot Metal Specialties, Ltd. (1991), 36 C.P.R. (3d) 35 (F.C.T.D.), at p. 47. That point does not arise in this case for decision and lies outside the scope of these reasons. [Emphasis mine]
[33] Prior to writing this paragraph, Justice Binnie had mentioned President Thorson, then of the Exchequer Court, in Lovell Manufacturing Co. v. Beattie Brothers Ltd. [1964], 41 C.P.R. 18 had rejected the use of file wrapper estoppel in Canada i.e. admissions of fact made in the course of prosecuting patent applications before patent offices.
[34] As noted, counsel for Ranbaxy argued, in the unique context of an NOC proceeding which is not an action but an administrative proceeding, the paragraphs which Prothonotary Milczynski struck from Dr. Clive's affidavit referring to file wrapper statements were not made for the purpose of construing the 768 Patent but were made in support of a factual assertion made by Ranbaxy regarding the structural formula 1 of the 768 Patent or such proposed evidence was related to the knowledge of a person skilled in the art.
[35] In reply, counsel for Ranbaxy argued that purpose in Dr. Clive's affidavit to the references to file wrapper admissions was not for the purpose of supporting a claims construction of the 768 Patent but rather was in support of his analysis of the scientific data which is a different exercise than claim construction.
[36] I agree with counsel for the respondents on this appeal the distinctions which counsel for Ranbaxy seek to draw are distinctions without a difference and the only purpose for making reference to file wrapper admissions in patent prosecutions was for the purpose of claims construction i.e. to determine the scope of claim 1 of the 768 Patent which is the conclusion the Court came to in the U.K. in an action where Ranbaxy sought a declaration of non-infringement in respect of a parallel patent to the 768 Patent.
[37] I make reference once again to President Thorson's judgment in Lovell, supra, particularly at pages 32 and 33 of the reported case where he said it was clear counsel sought to use the file wrappers in the US prosecution in order to prove the patent agent, in the course of prosecuting the Patent applications, had stated certain things about the elements of the invention as to whether they were essential or not. He came to the conclusion this was plainly an attempt to construe the claims in suit of a Canadian patent and to limit its application and as such was not permissible.
[38] In Free World Trust, supra, Justice Binnie mentioned an exception to the exclusion of file wrapper evidence when he stated: "this is not to suggest that prosecution history can never be relevant for a purpose other than defining the scope of the grant of the monopoly" citing Justice Reed's decision in Foseco Trading A.G. v. Canadian Ferro Hot Metal Specialties, Ltd. (1991), 36 C.P.R. (3d) 35 (F.C.T.D.).
[39] Prothonotary Milczynski found she was satisfied Ranbaxy sought to rely on file wrapper evidence contained in Dr. Clive's affidavit at paragraphs 95 to 99 of his affidavit and for no other purpose.
[40] Counsel for Ranbaxy could not convince me her finding in this respect was deficient. The Prothonotary's finding distinguishes the case before her from Prothonotary Tabib's decision in Merck & Co. et al. v. Minister of Health et al. where she held the relevance of file wrappers whose admissibility may be permissible in certain situations should not be struck out at this stage but passed on to the applications judge. Prothonotary Tabib, relied on Justice Blais' decision in Novartis A.G. v. Apotex Inc. (2001), 15 C.P.R. (4th) 417 (F.C.T.D.) at page 442 where, after analysing the jurisprudence, he noted file wrapper evidence may be admissible for certain purposes such as clarifying facts but not for the purpose of interpretation or claims construction. In the case before him, Justice Blais did not allow the use of file wrapper evidence to clarify prior art.
[41] In the circumstances, it cannot be said she erred when she decided to strike limited portions of the Clive affidavit rather than leave it to the applications judge.
The 546 Patent Issue
[42] NOC proceedings are governed by the rules relating to "Applications" contained in Part 5 of the Federal Courts Rules, 1998 (the Rules). Rule 312 governs the filing of affidavits additional to those provided for in Rules 306 and 307, namely, the affidavits first filed by an applicant or respondent in support or opposition to an application. Rule 312 reads:
| Additional steps
312. With leave of the Court, a party may
(a) file affidavits additional to those provided for in rules 306 and 307;
(b) conduct cross-examinations on affidavits additional to those provided for in rule 308; or
(c) file a supplementary record.
|
Dossier complémentaire
312. Une partie peut, avec l'autorisation de la Cour:
a) déposer des affidavits complémentaires en plus de ceux visés aux règles 306 et 307;
b) effectuer des contre-interrogatoires au sujet des affidavits en plus de ceux visés à la règle 308;
c) déposer un dossier complémentaire. |
[43] In the context of an NOC proceeding, Rule 312 applies, for example, to a reply which an applicant may wish to produce in answer to a respondent's affidavits, additional evidence which an applicant may wish to supplement after a respondent's material has been filed and a respondent's reply to newly filed applicant's evidence.
[44] I did not understand counsel for Ranbaxy to argue that the three factors listed by the Prothonotary were wrong. I think she was correct in not so arguing because the factors she listed have been recognized as the core factors to be taken into account in deciding whether to allow additional affidavits.
[45] What she argued was the Prothonotary failed to consider two other factors which are recognized by the jurisprudence namely that any supplementary affidavit neither deal with material which could have been made available at an earlier date, nor unduly delay the proceedings.
[46] This argument is not quite fair to the Prothonotary because she cited in support of her conclusions the case of Atlantic Engraving, supra, where Justice Nadon, on behalf of the Federal Court of Appeal wrote the following at paragraphs 8 and 9 of the reported case. The Atlantic Engraving case, supra, was one where an applicant was seeking to set aside the decision of the Registrar of Trade-Marks to expunge the company's trade-mark for non-use. The Federal Court of Appeal did not permit the applicant to supplement his evidence after cross-examination.
¶ 8 Pursuant to Rule 306 of the Federal Court Rules, 1998, an applicant has thirty days from the filing of its notice of application to file its supporting affidavits and exhibits (appeals under s. 56 of the Trade-marks Act fall within Part 5 of the Rules entitled "Applications" (Rules 300 to 334) and therefore must be commenced by way of a notice of application). By exception, Rule 312 allows a party, with leave of the Court, to file additional affidavits. Under that rule, the Court may allow the filing of additional affidavits if the following requirements are met:
i) the evidence to be adduced will serve the interests of justice;
ii) the evidence will assist the Court;
iii) the evidence will not cause substantial or serious prejudice to the other side (see Eli Lilly and Co. v. Apotex Inc. (1997), 76 C.P.R. (3d) 15 (F.C.T.D.); Robert Mondavi Winery v. Spagnol's Wine & Beer Making Supplies Ltd. (2001), 10 C.P.R. (4th) 331 (F.C.T.D.)).
¶ 9 Further, an applicant, in seeking leave to file additional material, must show that the evidence sought to be adduced was not available prior to the cross-examination of the opponent's affidavits. Rule 312 is not there to allow a party to split its case and a party must put its best case forward at the first opportunity (see Salton Appliances (1985) Corp. v. Salton Inc. (2000), 181 F.T.R. 146, 4 C.P.R. (4th) 491 (T.D.); Inverhuron & District Ratepayers' Assn. v. Canada (Minister of Environment) (2000), 180 F.T.R. 314 (T.D.)).
[47] The jurisprudence makes a difference between a reply affidavit and supplementary affidavit containing additional evidence on behalf of a party to supplement evidence previously tendered by that party.
[48] The concern of the Court with allowing additional evidence as distinct from true reply affidavits was well-expressed by the late Prothonotary Hargrave in Budget Steel Ltd. v. Seaspan International Ltd. (2003) 231 F.T.R. 87 where he wrote the following at paragraphs 9 and 10:
¶ 9 All of the cases relied upon by the Plaintiff are in the context of a trial. While in interrogatory matters justice must be done, there is an additional premium placed upon parties putting their best case forward immediately, for otherwise, were the causal approval of additional affidavit evidence on motions to become the norm, with a notion that weak evidence could always be patched up after the fact with supplemental affidavits, or that a motion might be split in order to obtain some advantage, interrogatory motions could go on almost indefinitely.
¶ 10 In the present instance I look upon the affidavits as though they were supplementary affidavits and here, for the purpose of dealing with them expediently, I ignore the fact that leave was not sought to file the supplementary affidavits. There are five elements which the Federal Court has considered in the case of a supplementary affidavit:
(i) whether the affidavit will serve the interest of justice;
(ii) whether the supplementary affidavit will assist the court;
(iii) whether there will be substantial or serious prejudice to other party;
(iv) a party seeking to file the additional material must show that it was not available at an earlier date or could not have been available had proper diligence been exercised; and
(v) the party seeking to file the material must show that it will not unduly delay proceedings.
These principles appeared in Eli-Lily & Co. v. Apotex Inc. (1997), 137 F.T.R. 226, amended 144 F.T.R. 189 and in Wayzhushk Onigun Nation v. Kakeway (2001), 182 F.T.R. 100. [Emphasis mine]
[49] To the same effect is Justice Evan's decision in Francis Mazhero v. Canadian Industrial Relations Board et al. 2002 FCA 295 and Prothonotary Hargrave's decision in Wayzhushk Onigum Nation v. Kakeway (2001) 182 F.T.R. 100, both cases where additional evidence was sought to be introduced by an applicant.
[50] Other cases cited such as Pauktuutit, Inuit Women's Association v. Her Majesty the Queen 2004 FC 804 and Abbott Laboratories v. Canada (Minister of Health) [2003] 29 C.P.R. (4th) 450 were concerned with the limits of proper reply evidence where splitting one's case is a central issue specifically after cross-examination has occurred.
[51] Examining the Prothonotary's decision as whole, the central feature of her reasons on this point is that the applicant's proposed reply affidavit is proper reply affidavit raising new issues raised by Ranbaxy's evidence / and or provides the Court with information that will be of assistance to it in the final determination of the application. In my view she exercised her discretion properly and did not err in considering Ranbaxy's affidavit raised new issues which warranted reply rather than be left to cross-examination. In so doing she crystallized the issues for the applications judge.
ORDER
THIS COURT ORDERS that this appeal be dismissed with costs.
FEDERAL COURT
NAME OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-507-05
STYLE OF CAUSE: PFIZER CANADA INC. ET AL v. THE MINISTER OF HEALTH ET AL
PLACE OF HEARING: TORONTO, ONTARIO
(Unredacted with the consent of the parties from Confidential Reasons for Order and Order issued on June 21, 2006)
APPEARANCES:
| Grant Worden, Damien McCotter |
|
| Angela Furlanetto |
Ranbaxy Laboratories Limited
|
| No one appeared |
FOR THE RESPONDENT The Minister of Health |
SOLICITORS OF RECORD:
| Tory's LLP 3000-79 Wellington Street West P.O. Box 270 TD Centre Toronto, ON M5K 1N2 |
|
|
Dimock Stratton LLP 20 Queen Street West, P.O. Box 102 Toronto, ON M5H 3R3 |
Ranbaxy Laboratories Limited
|
| John H. Sims, Q.C. Deputy Attorney General of Canada |
FOR THE RESPONDENT The Minister of Health |