Federal Court of Appeal Decisions

Date: 20070516

Docket: A-59-07

Citation: 2007 FCA 187

 

CORAM:       DESJARDINS J.A.

                        NOËL J.A.                

                        NADON J.A.

 

BETWEEN:

ABBOTT LABORATORIES and ABBOTT LABORATORIES LIMITED

Appellants

and

THE MINISTER OF HEALTH and APOTEX INC.

Respondents

 

 

 

Heard at Montréal, Quebec, on April 18, 2007.

Judgment delivered at Ottawa, Ontario, on May 16, 2007.

 

REASONS FOR JUDGMENT BY:                                                                               NADON J.A.

CONCURRED IN BY:                                                                                         DESJARDINS J.A.

 

CONCURRING REASONS

(EXCEPT ON THE ISSUE OF JURISDICTION) BY:                                                      NOËL J.A.

 

Date: 20070516

Docket: A-59-07

Citation: 2007 FCA 187

 

CORAM:       DESJARDINS J.A.

                        NOËL J.A.                

                        NADON J.A.

 

BETWEEN:

ABBOTT LABORATORIES and ABBOTT LABORATORIES LIMITED

Appellants

and

THE MINISTER OF HEALTH and APOTEX INC.

Respondents

 

 

REASONS FOR JUDGMENT

NOËL J.A. (concurring reasons (except on the issue of jurisdiction)):

 

[1]                     This is an appeal from the Order of Heneghan J. of the Federal Court (2006 FC 1558), dismissing an application to prohibit the Minister of Health (“the Minister”) from issuing a Notice of Compliance (“NOC”) to Apotex Inc. (“Apotex” or “the respondent”), pursuant to the Patented Medicines (Notice of Compliance) Regulations, SOR/93-133 (“NOC Regulations”), with respect to Canadian Letters Patent No. 2,387,361 (“the ‘361 Patent”) on the basis that the relevant claim of the said patent was not an eligible claim.

 

[2]                     Abbott Laboratories and Abbott Laboratories Ltd. (“Abbott” or “the appellants”) request that this decision be set aside and that an order be issued prohibiting the Minister from issuing the NOC sought by the respondent until after the expiry of the ‘361 Patent.

 

[3]                     The reason why this NOC has not yet issued is another prohibition proceeding involving the same patent which was to be heard by the Federal Court in the days following the hearing of the present appeal.

 

[4]                     The appellants sell clarithromycin, an antibiotic and the active medicinal ingredient in the commercially-available product Biaxin.  The respondent intends to market a generic version of clarithromycin.

 

[5]                     Clarithromycin is polymorphic: it exists in different number of crystalline forms, some of which were invented by Abbott.  Several of Abbott’s patents, including the ‘361 Patent which is at issue, cover clarithromycin compounds and three of its crystalline forms, namely Form 0, Form I and Form II.

 

[6]                     The ‘361 Patent was filed on December 19, 1997 with a claim date of January 17, 1997.  The monopoly which it confers pertains to the use of Form 0 to make Form II by way of heating at high temperatures.  The proposed generic version of clarithromycin seeks to replicate this process of converting Form 0 to Form II.

 

[7]                     The respondent filed a Notice of Allegation pursuant to the NOC Regulations that alleged, inter alia, that the ‘361 Patent was ineligible for listing on the patent register, was not infringed, and was invalid based on obviousness and anticipation.  An application for an order prohibiting the Minister from issuing to Apotex the requested NOC was filed by Abbott on October 7, 2003 and the decision under appeal ensued.

 

[8]                     The statutory stay period provided for under paragraph 7(1)(e) of the NOC Regulations which normally would have ended on October 7, 2005 (i.e., 24 months after the application was filed), was extended pursuant to paragraph 7(5)(b) of the NOC Regulations to December 30, 2006.

 

[9]                     Heneghan J. dismissed Abbott’s application.  The reasons which are dated January 11, 2007 indicate that a confidential version was issued on December 29, 2006.  However, the record shows that the confidential version was actually signed on December 30, 2006 (Appeal Book, Vol. I, Tab 1, at p. 44).

 

[10]                 Heneghan J. held that claim 31 of the ‘361 Patent is not a claim for the use of the medicine, and is therefore not an eligible claim under the NOC Regulations.  In reaching this conclusion, Heneghan J. relied on this Court’s decision in Eli Lilly and Co. et al. v. Apotex Inc. et al. (1996), 68 C.P.R. (2d) 126, at p. 128, which ruled that in order to come within the definition of “medicine” as defined in section 2 of the NOC Regulations, “a substance must be intended for or capable of one or more of the precise listed medical uses.  Chemical conversion or synthesis into another substance which may itself be used as a medicine is not one of them” (Reasons, at para. 129).

 

[11]                 The applications judge held that Form 0, as it is used in the ‘361 Patent, acts as an intermediate, not as a medicine.  As such, claim 31 is not a claim for the use of a medicine (Reasons, at paras. 132-134).  Having come to the conclusion that claim 31 was not an eligible claim under the NOC Regulations, Heneghan J. did not address the respondent’s alternative allegations based on invalidity.

 

[12]                 On appeal, the appellants take issue with Heneghan J.’s construction of claim 31.  They argue that claim 31, properly construed, is a claim for the use of a medicine and that Heneghan J. erred in law in holding that claim 31 was not an eligible claim.

 

[13]                 Should they be successful on the issue of eligibility, the appellants ask this Court to address and dispose of the issue of validity, and issue an order prohibiting the Minister from issuing the NOC sought by Apotex.  They argue that even though Heneghan J. did not address the issue of validity, it would be inappropriate to send the matter back to the Federal Court on this point since the statutory stay period as it was extended has now expired and the Federal Court would no longer be in a position to issue the order which they seek.

 

JURISDICTION

[14]                 Apotex has brought a preliminary objection to the hearing of the appeal.  It contends that this Court no more than the Federal Court has the jurisdiction to issue a prohibition order once the statutory stay period has expired.  In this case, this period has expired both as a result of Heneghan J.’s dismissal of Abbott’s application (see ss 7(4)) and by reason of the fact that the 24-month period, as extended pursuant to paragraph 7(5)(b), has run its course.

 

[15]                 Counsel for Abbott objected to this argument being raised on the ground that it has already been addressed and was rejected by this Court in Abbott Laboratories v. Canada (Minister of Health), [2004] F.C.J. No. 708; 2004 FCA 154, where Richard C.J. said on behalf of the Court
(at paras. 30 and 31):

[30]     Before concluding, I will briefly treat the argument made by the respondent, Pharmascience, on the question of jurisdiction. Pharmascience suggested that this Court had no jurisdiction to entertain the present appeal, as the PM(NOC) Regulations do not provide for an appeal from an Order dismissing an application pursuant to section 6(5)(a) of the PM(NOC) Regulations.

 

[31]    I am unable to endorse the respondent's position. Section 27.1 of the Federal Courts Act expressly provides for an appeal to this Court from a final or interlocutory judgment of the Federal Court. Emphatic statutory language would be required to preclude the right of appeal set out in this Act.

 

[16]                 According to Counsel for Apotex, it is difficult to know the precise argument which the Court was addressing in this brief passage so that it cannot be said with certainty that the argument which it proposes to make was addressed. I agree.

 

[17]                 The crux of Apotex’ argument is set out in its Memorandum of Fact and Law at paras. 19 and 20:

19.     The events described under section 7 of the Regulations – which, so long as they are pending, prohibit Ministerial action – are absolute.  For example, once the 24 month time period specified in paragraph 7(1)(e) expires, the court loses jurisdiction to extend the period of prohibition any further.  The lifting of the prohibition is not conditional upon on a determination by the Court of any of the issues raised in the application.

 

20.      Likewise, if a prohibition application under subsection 6(1) of the Regulations is withdrawn or discontinued or is “dismissed by the court hearing the application,” then the 24 month stay of Ministerial action is automatically lifted by operation of subsection 7(4).  The effect of subsection 7(4) is that, upon the dismissal of a prohibition application, neither the Federal Court nor the Federal Court of Appeal will any longer have jurisdiction under the [NOC] Regulations to grant a prohibition order in respect of the patents from which the right to commence the application was derived.  There is no provision in the Regulations to resurrect the 24 month stay of Ministerial action once it is lifted by subsection 7(4) or to continue it pending an appeal.  The words “dismissed by the court hearing the application” in subsection 7(4) of the Regulations specifically preclude any extension of the statutory stay, pending an appeal from a dismissal of an application.

 

[18]                 Section 7 of the NOC Regulations provides:

 

[19]                 In Pfizer Canada Inc. v. Apotex Inc., [2001] F.C.J. No. 17 (“Pfizer”), this Court examined the impact of subsection 7(4) on a subsequent appeal.  In that case, the patentee was appealing the dismissal of its prohibition application and asking the Court of Appeal to quash the NOCs which had been granted by the Minister in the interim.  Isaac C.J. writing for the Court said:

[17]     Prohibition proceedings under the Regulations are not similar to patent infringement proceedings.  The scheme established by the Regulations has been described at length in previous decisions of this Court (see e.g. Bayer AG v. Canada (Minister of National Health and Welfare) (1993), 51 C.P.R. (3d) 329, per Mahoney J.A.; Merck Frosst Canada Inc. v. Canada (Minister of National Health and Welfare) (1994), 55 C.P.R. (3d) 302, per Hugessen J.A.; Hoffman-La Roche Ltd v. Canada (Minister of National Health and Welfare) (1996), 70 C.P.R. (3d) 206, per Stone J.A.; Merck Frosst Canada Inc. v. Apotex Inc. (1997), 72 C.P.R. (3d) 170, per Strayer J.A.).

 

…

 

[19]     This unique benefit conferred upon patentees has as its corollary that Parliament intended s. 6 proceedings be dealt with expeditiously by way of summary application for judicial review.  This much is evident from the remarks of Strayer J.A. in Merck Frosst, supra, at 177:

 

In summary, the legislative stay is an extraordinary sanction detracting from the normal rights of a defendant under ordinary patent law. It must be applied strictly according to its terms. The 30-month period was no doubt intended in part to focus the minds of the parties and the Court as to the need for an expeditious prosecution of the application for prohibition.

 

[20]     I should like to deal now with some of the arguments advanced by the appellants. They contend that this Court (the Court of Appeal) has the power under section 52 of the Federal Court Act to do what the Trial Judge should have done, namely issue the prohibition. This position assumes that subsection 7(4) of the Regulations lifts the 30 month stay period in subparagraph 7(1)(e) only when the Court of Appeal has given final judgment on the issue of prohibition. This assumption is false in light of the view expressed by this Court in Hoffman Laroche, supra at paragraph 196, that the phrase "dismissed by the court" in subsection 7(4) of the Regulations is to be interpreted as meaning "dismissed by the Federal Court Trial Division". I see no reason to depart from the interpretation placed on that phrase in that case.

[21]     It follows that once the prohibition proceedings brought by the appellants were dismissed by the Trial Division, the Minister was entitled to and did issue the NOCs to Apotex and to Nu Pharm with respect to fluconazole. The issue of these NOCs foreclosed any attempts to continue prohibition proceedings under the Regulations, as the summary procedure therein was spent. As Décary J.A. put it in Merck Frosst Canada, supra at paragraph 4, "the appeal is obviously moot, the Minister having done what he is empowered to do under subsection 7(1) of the Regulations, i.e. he issued a Notice of Compliance".

[22]     It is my respectful view that no injustice flows from such an interpretation of the Regulations. The appellants have had the benefit of a near-automatic interlocutory injunction for a period of 30 months. If they wished to benefit from an appeal to this Court on the issue of prohibition, they could have brought their application and appeal expeditiously within the period of 30 months provided in subparagraph 7(1)(e) of the Regulations, but they did not. Arguably, the appellants' ability to bring an appeal within that period would have depended upon the Minister not having exercised his discretion to issue the NOCs. But that is a fact that the regulation-making authority provided for by formulating the Regulations in the way it did. I am of the opinion that it would be wrong for us to disturb that arrangement by avoiding a decision on the issue of mootness.

 

[20]                 Counsel for Abbott correctly points out that in Pfizer (supra), the NOC had been issued.  According to Counsel, it is the issuance of the NOC rather than the expiration of the 30-month statutory stay (now 24-month) which led the Court to conclude that it could not provide the relief sought.

 

[21]                 Obviously, where an application for a prohibition order is dismissed and the Minister proceeds to issue the NOC before the appeal is heard, the jurisdiction of this Court to prohibit the issuance of the NOC can no longer be invoked.  This is what has led the Court, in the case referred to by Isaac C.J. in the above quoted passage, and in a number of cases which have since been decided, to decline to hear appeals from decisions of the Federal Court dismissing prohibition applications.

 

[22]                 However, I do not read the reasons of Isaac C.J. as being based on the fact that the NOC had issued.  He does state that the issuance of the NOCs “foreclosed any attempts to continue prohibition proceedings” and that "arguably, the appellants’ ability to bring an appeal within that period would have depended upon the Minister not having exercised his discretion to issue the NOCs".  However, the focus of his analysis rests on the clearly expressed intent that prohibition proceedings be brought to an end within the statutory stay period.

 

[23]                 Counsel for Apotex also brought to our attention an earlier decision of the Federal Court, Trial Division, in Merck Frosst Canada Inc. v. Canada (Minister of National Health and Welfare) (1997), 72 C.P.R. (3^rd) 453 where Rothstein J. (as he then was) held that the Trial Division (now the Federal Court) can no longer issue a prohibition order once the statutory stay has expired.  In that case, the statutory stay had expired before the application could be heard.  This situation arose by reason of a decision of the Court of Appeal quashing an extension of time which had been granted by the Trial Division "until such time as a judgment is rendered on the merits".  When Merck re-applied to extend the time under subsection 7(5) of the NOC Regulations (as they then read), Muldoon J. formulated a preliminary question as to the status of a prohibition application after the expiry of a statutory stay.  The matter came before Rothstein J. who identified the issue which he had to decide as follows at p. 455:

What is the status of a prohibition application brought by a patentee under subsection 6(1) of the Regulations after expiry of the statutory stay provided under paragraph 7(1)(e) of the Regulations?

 

[24]                 The essence of the reasoning adopted by Rothstein J. in holding that he was without jurisdiction to provide the relief sought by Merck is as follows:

Nothing in the Regulations expressly provides that the Court loses jurisdiction to extend the statutory stay or to decide the prohibition application upon the expiry of the statutory stay.  The only express time constraint is in subsection 7(5) with respect to the issuance of an extension order.  The extension order may be made “where the Court has not yet made an order pursuant to subsection 6(1)”.

 

While the Court may not read words into a statute or regulation, a statute or regulation cannot be considered in the abstract.  Regard must be had to the context and scheme of the provisions at issue.

(at pp. 458-459)

…

 

Except for the Regulations, the fact that a generic competitor may be infringing a patent would not confer on the patentee the right to prevent the Minister from issuing a NOC, because a NOC is simply a ministerial approval for the purposes of the Food and Drugs Act, R.S.C. 1985, c. F-27.  In the absence of the Regulations, the question of whether a competitor is entitled to a NOC is one solely between the competitor and the Minister.  Thus, it its only the Regulations that create a patentee’s right to a prohibition order against the Minister from issuing a NOC to a competitor.

(at p. 459)

 

…

 

It is noteworthy that while the Regulations provide for automatic and then Court ordered prohibition on the Minister from issuing a NOC, there is nothing in Regulations that confers on the Court jurisdiction to order certiorari to quash a NOC that may have been issued after expiry of the statutory stay but which the Court ultimately finds is based on an allegation of non-infringement that is found not to be justified.  The implication of the silence of the Regulations as to a remedy for a patentee if a NOC issues after expiry of the statutory stay based on a non-justified allegation is that once the statutory stay expires, the Court is without jurisdiction to grant any remedy under the Regulations.

 

This view is supported by the purpose of the Regulations, which is to provide a summary mechanism for determining whether a generic competitor may compete with a patentee.  The 30-month period specified in paragraph 7(1)(e) was prescribed for a purpose.

 

This was the time frame within which the Governor-in-Council considered it would be possible to complete the prohibition proceedings in the absence of failure to reasonably cooperate in expediting the prohibition application by a party.  In Merck v. Apotex, supra, Strayer J.A. at 9 [p. 178] found that the Regulations contemplate that matters “proceed at a pace likely to allow a hearing of the application before the expiration of a (not unreasonable) period of 30 months”.

(at pp. 459-460)

 

…

 

It would be inconsistent with the expeditious way in which proceedings under Regulations are to be carried out to construe the Regulations as continuing the right to prohibition indefinitely irrespective of the expiry of the statutory stay.

 

As I have indicated, if the right to prohibition remains after the expiration of the statutory stay, one would have expected that the Regulations would also have provided for a remedy if the Minister issued a NOC before the Court ordered prohibition, i.e. certiorari to quash the NOC.  No such rights or remedies exist in the Regulation.  In view of the prescribed statutory stay, it is difficult to think that the Regulations envisage a race between the Minister and the Court after expiry of the statutory stay with no remedy to the patentee in the event that the Minister issued a NOC for an infringing process before the Court issues a prohibition order. (at pp. 459-460)

 

…

 

Lest the impression be left that this is a draconian reading of the Regulations, two things should be noted.  One is that a patent infringement action is still open to Merck.  In such action the Court has jurisdiction to order an interlocutory injunction, a permanent injunction and/or damages.  Thus Merck is not left without a remedy.  Second, the circumstances in this case are unusual.  They arise because of the decision by he Federal Court of Appeal which overturned the decision by Dubé J. of the Trial Division that extended time.  While I cannot rule out other situations arising, I have no doubt in view of the Federal Court of Appeal’s decision, that applicants litigating under the Regulations will ensure, if necessary by seeking an expedited hearing under Rule 327.1 of the Federal Court Rules, that cases are decided before expiry of the statutory stay and that when extensions are necessary under subsection 7(5) of the Regulations, they will be applied for well before expiry of the statutory stay.

(at p. 461)

 

…

 

In the circumstances, I am satisfied that upon expiry of the statutory stay the Court no longer has jurisdiction to issue a prohibition order under subsection 6(2) and an extension order under subsection 7(5).

(at p. 461)

 

…

 

[25]                 I agree with this conclusion and with the reasoning advanced for reaching it.

 

[26]                 Counsel for Abbott points out that Rothstein J. was dealing with the jurisdiction of the Federal Court (Trial Division).  According to Counsel, this Court’s jurisdiction to hear appeals from final decisions of the Federal Court pursuant to section 27 of the Federal Courts Act, R.S.C. 1985, c. F-7 (“the Federal Courts Act”) is unaffected by the reasoning advanced by Rothstein J.  Counsel submits that, absent a clear indication to the contrary, effect must be given to the right of appeal provided under the Federal Courts Act.

 

[27]                 In my respectful view, the reasoning of Rothstein J. does reveal a clear legislative intent that prohibition proceedings be brought to a final end within the 24-month statutory stay period provided in paragraph 7(1)(e) of the NOC Regulations or any extension thereof granted within that period pursuant to subsection 7(5).  Allowing proceedings to continue after the statutory stay has expired, regardless of the forum where the proceedings happen to lie, is inconsistent with that intent and undermines the arrangement prescribed by the Governor-in-Council under the NOC Regulations.

 

[28]                 As was stated by Strayer J.A. in the passage quoted by Isaac C.J. (see para. 19 above), this 24-month period was no doubt intended to focus the minds of the parties and the Court on the summary nature of the proceedings and the need for their expeditious prosecution.  It is the absence of focus on this time frame which has given these summary proceedings over time the ponderous character of patent infringement actions commonly known to last numerous days and sometimes weeks.  The end result is that judicial resources are increasingly being consumed by these so called summary proceedings at the expense of other jurisdictions which advance more obvious public policy concerns.  In my respectful view, an application for prohibition comes to a final end after the 24-month period has expired.

 

[29]                 Since more than 24 months have passed since the filing of Abbott’s application for the issuance of a prohibition order and since the order extending this period expired on December 30, 2006, I conclude that this Court, like the Federal Court, no longer has the jurisdiction to issue the order sought by Abbott.

 

[30]                 Given this conclusion I need not address Apotex’ contention that the same result arises where an application for a prohibition is dismissed by the Federal Court before the expiration of the 24-month period (or any extension thereof).

 

[31]                 Since this is the first decision which deals squarely with the impact of the expiration of the statutory stay period on the jurisdiction of this Court, it is prudent to nevertheless address the merits of the appeal on the assumption that the Court does have the jurisdiction to provide the relief sought by Abbott.

 

MERITS

[32]                 Turning to the first issue raised on appeal, claim 31 reads:

The use of [clarithromycin] Form 0-ethanolate in the preparation of [clarithromycin] Form II for use as an antibiotic.

 

[33]                 Abbott does not dispute Henegan J’s conclusion that claim 31 is not a claim for the “medicine itself”.  The sole issue is whether Henegan J. correctly held that claim 31 is not an eligible claim under the NOC Regulations because it is not (section 2) “… a claim for the use of the medicine for the diagnosis, treatment, mitigation or prevention of a disease, disorder or abnormal physical state, or the symptoms thereof”.

 

[34]                 Abbott submits that Heneghan J. erred in holding that claim 31 is not a claim for the use of the medicine.  The applications judge concluded that claim 31 “claims the use of Form 0 to make something else, that is Form II” (Reasons, at para. 120).  In so doing, according to Abbott, she erred by giving no meaning to the words “for use as an antibiotic” in claim 31.

 

[35]                 When given a purposive construction, Abbott submits that claim 31 is a claim for the use of a medicine, thereby rendering it eligible for inclusion on the Patent List.  In other words, had the phrase “for use as an antibiotic” not been disregarded, an eligible use would have been found.

 

[36]                 In this respect, Abbott submits that claim 31 should be read with claim 30 which is identical to claim 31, but for the fact that the concluding words “for use as a medicine” are omitted.  According to Abbott, these additional words in claim 31 must be given meaning, and Heneghan J. erred in law, in choosing to ignore them.

 

[37]                 I do not believe that Heneghan J. ignored the words “for use as an antibiotic” in construing claim 31.  She refers to that phrase throughout her reasons.  On a fair reading of her reasons, she held that the person skilled in the art would have read claim 31 as claiming the use of Form 0 to make Form II and considered that the closing words were not essential to the invention claimed (Reasons, at para. 104, 120-134).  The issue in this appeal is whether this conclusion was open to her.  In my respectful view, it was.

 

[38]                 On a plain reading of claim 31, it makes a claim to a use of a substance (Form 0 clarithromycin) in the preparation of another substance (Form II clarithromycin).  This is achieved by heating Form 0 at extreme temperatures (between 70° C and 110°C).

 

[39]                 The 68 claims of the ‘361 Patent vary in scope, but all relate to Form 0 being used to make Form II.  None purports to claim Form 0 clarithromycin as a medicine.  Claims for Form 0 clarithromycin per se and for the use of Form 0 as an antibiotic are made in Patent 2,277,274 which was filed at the same time as the ‘361 Patent (Appeal Book, Vol. VI, p. 2270).

 

[40]                 On the other hand, the use of Form II as an antibiotic is disclosed in Patent 2,258,606 which was filed before the ‘361 Patent and has a claim date which precedes that of the ‘361 Patent (ibid).

 

[41]                 It is significant that Abbott’s own expert (Dr. Byrn) omitted the phrase “for use as an antibiotic” entirely in describing what is claimed by the ‘361 Patent (Appeal Book, Vol. VI, pp. 2171-2172).  In the same vein, Dr. Atwood (who also provided expert evidence on behalf of Abbott) does not qualify the words “for use as an antibiotic” as being essential to the claim (Appeal Book, Vol. VII, p. 2645).

 

[42]                 Moreover, Form II was known to have but one use, that being use as an antibiotic.  Dr. Byrn indicates so much at para. 296 of his affidavit (Appeal Book, Vol. VI, p. 2333).  It is true, as Counsel for Abbott point out, that the statement made by Dr. Byrn relates to clarithromycin tablets, but Dr. Byrn’s evidence does not suggest that Form II from which the tablets are made, had any other use.

 

[43]                 Although, the Court should strive to construe claims which do not bear the same words differently, Heneghan J. was on solid ground in this case, when she held that the words “for use as an antibiotic” at the end of claim 31, do not add anything to the invention claimed.  At best, these words describe the utility of Form II once made in accordance with the claimed invention.  The fact that clarithromycin in Form II is used as an antibiotic was well known.  Saying, in effect, that an antibiotic is used as an antibiotic adds nothing to the invention.

 

[44]                 Finally, I note that Henegan J. spoke on occasion of the ‘361 Patent (or parts thereof) not meeting “the eligibility requirements for inclusion in the Patent List” (see for instance, Reasons at para. 134).  The eligibility of a Patent for inclusion on the Register is usually raised by way of a separate motion made pursuant to paragraph 6(5)(a) of the NOC Regulations (see Apotex Inc. v. Canada (Minister of Health and Welfare), (2000), 3 C.P.R. (4^th) 1 (F.C.A.), as applied in Apotex Inc. v. Canada (Minister of Health), 2004 FC 650 at paras. 59 to 64).  It does not appear as though such a motion was made in this instance.

 

[45]                 However, nothing turns on this as Heneghan J.’s conclusion is properly stated at paragraph 133 of her reasons where she holds that claim 31 “is ineligible under the NOC Regulations”.

 

[46]                 Having decided that Heneghan J. committed no error in reaching this conclusion, we need not consider Apotex’ alternative contention that the ‘361 Patent is invalid based on obviousness and anticipation.  Had it been necessary to consider this issue, a continuation of the one-day hearing which had been set for this appeal on an urgent basis would have been required.  I note in this respect that the hearing before the Federal Court lasted six days, most of which were spent canvassing prior art and evidence as to anticipation and obviousness.  Since this Court does not have the benefit of prior reasons on this point, it would have to consider the issue of validity as a matter of first instance.

 

[47]                 Counsel for Apotex insisted during the hearing that if it became necessary to deal with this issue, the matter should be returned before Heneghan J. for adjudication in order to preserve the parties’ right of appeal.  He conveyed to the Court his client’s undertaking not to raise the issue of jurisdiction before the Federal Court in order to permit the matter to be referred back.  However, this would not be a proper course of action given that jurisdiction cannot be conferred by consent.

 

[48]                 It follows that if this Court does have the jurisdiction to issue the relief sought by Abbott and if I am wrong on the issue of eligibility, the matter will have to be remitted back to this Court so that it may hear and dispose of the allegation that the ‘361 Patent is invalid.

 

[49]                 I would dismiss the appeal with costs.

 

“Marc Noël”

NADON J.A.:

 

[50]                 Although I agree with my colleague Noël J.A., for the reasons that he gives, that Heneghan J. made no error in concluding that claim 31 of the ‘361 patent was not a claim for the use of the medicine, I cannot concur in his view that this Court, like the Federal Court, no longer has jurisdiction to issue the order sought by the appellants because the statutory stay period of 24 months has expired.

 

[51]                 In concluding as he does, Noël J.A. relies in great part on the reasoning of Rothstein J. (as he then was) in Merck Frosst Canada Inc. v. Canada (Minister of National Health and Welfare) (1997, 72 C.P.R. (3d) 453 (F.C.T.D.). My colleague also relies on this Court’s decision in Pfizer Canada Inc. v. Apotex Inc., [2001] F.C.J. No. 17.

 

[52]                 In my view, this Court’s decision in Pfizer, supra, does not support the conclusion reached by my colleague. In Pfizer, supra, as my colleague points out at paragraph 17 of his Reasons, by the time the appeal was heard by this Court, the Minister had already issued a NOC to Apotex. This led Isaac C.J., who wrote for the Court, to conclude that the appeal had become moot as the Court could no longer issue the order sought by Pfizer, i.e. an order prohibiting the Minister from issuing a NOC to Apotex. It is important to note that Isaac C.J. did not conclude that the Court was without jurisdiction to make the order sought because the statutory stay had expired, but rather that the Court would not exercise its jurisdiction because the matter had become moot.

 

 

[53]                 I therefore cannot read Isaac C.J.’s Reasons as signifying that proceedings commenced by a first person under subsection 6(1) of the NOC Regulations cannot continue beyond the statutory stay of 24 months.

 

[54]                 I now turn to Rothstein J.’s decision in Merck, supra, wherein he concluded that upon the expiry of the statutory stay of 30 months (now 24 months), the Court could no longer issue an order of prohibition under subsection 6(2) of the Regulations. Rothstein J. came to that conclusion for the following reasons.

 

[55]                 First, the fact that the NOC Regulations did not allow the Court to order certiorari to quash a NOC issued by the Minister after the expiry of the statutory stay led, in his view, to the inevitable conclusion that once the statutory stay had expired, the Court lost jurisdiction to grant any remedy under the NOC Regulations. In other words, whether the Minister had issued a NOC or not, the Court was without jurisdiction once the statutory stay had expired.

 

[56]                 Second, the purpose the NOC Regulations supported the view that the Court lost its jurisdiction after the expiry of the statutory stay because the Regulations provided for a summary mechanism to determine whether a second person could launch its product on the market.

 

[57]                 Hence, Rothstein J. found that the purpose of the statutory stay period was to make it clear to the parties that prohibition proceedings, subject to any extension that might be given by the Court, were to be completed within the prescribed timeframe. At page 460, Rothstein J. expressed his view in the following terms:

It would be inconsistent with the expeditious way in which proceedings under the Regulations are to be carried out to construe the Regulations as continuing the right to prohibition indefinitely irrespective of the expiry of the statutory stay.

 

                As I have already indicated, if the right to prohibition remains after the expiration of the statutory stay, one would have expected that the Regulations would also have provided for a remedy if the Minister issued a NOC before the Court ordered prohibition, i.e. certiorari to quash the NOC. No such rights or remedies exist in the Regulations. In view of the prescribed statutory stay, it is difficult to think that the Regulations envisage a race between the Minister and the Court after expiry of the statutory stay with no remedy to the patentee in the event that the Minister issued a NOC for an infringing process before the Court issues a prohibition order.

 

[58]                 I cannot, with respect, agree with Rothstein J.’s reasoning. In my view, neither the Federal Court nor this Court loses jurisdiction upon the expiry of the statutory stay.

 

[59]                 I begin by setting out subsections 6(1), (2), (3) and section 7 of the NOC Regulations which are, obviously, of considerable relevance to the determination of the issue:

 

[60]                 First, let me set out my view of the Regulations and, in particular, my view of the significance of the statutory stay period of 24 months. The clear purpose of that timeframe is to prevent the Minister from issuing a NOC to a second person prior to the expiry of the statutory stay period. By reason of section 7 of the Regulations, however, the first person is clearly put on notice that it must complete its proceedings within the statutory timeframe, failing which the Minister will be at liberty to issue a NOC to a second person. No extensions of the statutory stay period will be given by the Court, unless both the first and second persons consent thereto or where the Court finds that the second person has failed to “reasonably cooperate in expediting the application” (subsection 7(5)(b) of the Regulations).

 

[61]                 Thus, once the 24 months expire, the Minister may issue a NOC to a second person unless there is an order of prohibition preventing him from doing so. However, it does not necessarily follow, in my view, that upon the expiry of the statutory stay period, the Court can no longer make an order of prohibition under subsection 6(1). As I indicated earlier in discussing the Reasons of Isaac C.J. in Pfizer, supra, the Court did not refuse to make the order sought in that case by reason of a lack of jurisdiction, but because the appeal had become moot by reason of the issuance of a NOC by the Minister.

 

[62]                 Second, there is nothing in the Regulations which expressly or implicitly provides that the Court is without jurisdiction to make an order of prohibition once the statutory stay period has expired.

 

[63]                 Third, there cannot be any dispute that section 7, other than subsection (5) thereof, is solely directed at the Minister and provides in express terms when the Minister may issue a NOC to the second person. Subsection 7(5) sets out those instances where the Court may either shorten or extend the statutory time period. However, there is nothing in section 7 which could, in my view, lead to the conclusion that the proceedings commenced by the first person under subsection 6(1) must necessarily be completed within the statutory stay period and, hence, that the Federal Court and this Court lose jurisdiction upon the expiry of that period.

 

[64]                 Subsections 6(1) and (2), on the other hand, clearly address the order which the Federal Court is asked to make by a first person and there is nothing in those provisions which suggests that the proceedings must be completed within the statutory stay period set out at section 7.

 

 

[65]                 Thus, there is no timeframe in which the Federal Court and this Court must make the order sought by a first person other than the real possibility that the matter may become moot if no order is made prior to the issuance of a NOC by the Minister. Consequently, if at the end of the statutory stay period there is no order of prohibition, the Minister, as directed by section 7 of the Regulations, may issue a NOC to a second person. If he does, the matter before the Court will become moot. However, if after the expiry of the 24 months the Minister has not yet issued a NOC to a second person, the Federal Court and this Court may still make an order of prohibition. In such circumstances, it is my view that the Minister will be prevented from issuing a NOC to a second person.

 

[66]                 I again repeat that there is nothing in section 7 which says or suggests that the order made pursuant to subsection 6(1) must be made before the expiry of the statutory stay. Hence, in my view, the order referred to in paragraphs 7(1)(f) can be made after the expiry of the statutory stay. Consequently, where after the expiry of the 24 months the Minister has not issued a NOC to a second person, he may be prohibited from so doing if the Court makes the appropriate order.

 

[67]                 The essence of my colleague’s conclusion on the issue of jurisdiction appears clearly from paragraphs 27 and 28 of his Reasons, which I reproduce for ease of reference:

[27]         In my respectful view, the reasoning of Rothstein J. does reveal a clear legislative intent that prohibition proceedings be brought to a final end within the 24-month statutory stay period provided in paragraph 7(1)(e) of the NOC Regulations or any extension thereof granted within that period pursuant to paragraph 7(5).  Allowing proceedings to continue after the statutory stay has expired, regardless of the forum where the proceedings happen to lie, is inconsistent with that intent and undermines the arrangement prescribed by the Governor in Council under the NOC Regulations.

 

[28]         As was stated by Strayer J.A. in the passage quoted by Isaac C.J. (see para. 19 above), this 24-month period was no doubt intended to focus the minds of the parties and the Court on the summary nature of the proceedings and the need for their expeditious prosecution.  It is the absence of focus on this time frame which has given these summary proceedings over time the ponderous character of patent infringement actions commonly known to last numerous days and sometimes weeks.  The end result is that judicial resources are increasingly being consumed by these so called summary proceedings at the expense of other jurisdictions which advance more obvious public policy concerns.  In my respectful view, an application for prohibition comes to a final end after the 24-month period has expired.

 

 

[68]                 I have two comments to make. The first one is that even if it were true that judicial resources are being utilized in great numbers by first and second persons “at the expense of other jurisdictions which advance more obvious public policy concerns”, that does not constitute a valid reason for concluding that the expiry of the statutory stay terminates the Federal Court’s and this Court’s jurisdiction in regard to an application brought under subsection 6(1). Second, as I hope to have shown, there is no basis whatsoever for concluding that the Regulations reveal a clear legislative intent that prohibition proceedings be absolutely terminated after 24 months.

 

[69]                 One last comment. If Noël J.A. is right, unless the parties mutually agree to an extension of time pursuant to paragraph 7(5)(b), it will be difficult to have appeals heard by this Court and impossible to have appeals heard by the Supreme Court of Canada.

 

[70]                 I am therefore unable to conclude that the order sought by the appellants cannot be made after the expiry of the 24 months. In other words, I am of the opinion that had we taken a different view of the appeal on its merits, it would have been open to us to prohibit the Minister from issuing a NOC to Apotex.

 

[71]                 However, since the appellants have failed to persuade us that Heneghan J. made any error in holding that claim 31 of the patent is not an eligible claim under the Regulations, I would dismiss the appeal with costs.

 

“M. Nadon”

“I concur

        Alice Desjardins J.A.”

 

 

FEDERAL COURT OF APPEAL

 

NAMES OF COUNSEL AND SOLICITORS OF RECORD

 

 

 

DOCKET:                                                                              A-59-07

 

APPEAL FROM AN ORDER OF THE FEDERAL COURT DATED JANUARY 11, 2007, FEDERAL COURT DOCKET NO. T-1847-03.

 

STYLE OF CAUSE:                                                              Abbott Laboratories and Abbott Laboratories Limited v. The Minister of Health and Apotex Inc.

 

PLACE OF HEARING:                                                        Montréal, Quebec

 

DATE OF HEARING:                                                          April 18, 2007

 

REASONS FOR JUDGMENT BY:                                     NADON J.A.

CONCURRED IN BY:                                                         DESJARDINS J.A.

 

CONCURRING REASONS (EXCEPT ON

THE ISSUE OF JURISDICTION) BY:                               NOËL J.A.

 

DATED:                                                                                 May 16, 2007

 

 

APPEARANCES:

 

Andrew J. Reddon, Steven G. Mason	FOR THE APPELLANT
Andrew Brodkin, Richard Naiberg	FOR THE RESPONDENT

 

SOLICITORS OF RECORD:

 

McCarthy Tétrault LLP, Toronto, Ontario	FOR THE APPELLANT
Goodmans, LLP, Toronto, Ontario	FOR THE RESPONDENT