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Patents - Practice. Janssen Inc. v. Apotex Inc.
In Janssen Inc. v. Apotex Inc. (Fed CA, 2023) the Federal Court of Appeal considered patent litigation, here in a review of recent patent regulation amendments:IV. Amendments to the Regulations in 2017
[25] Major amendments to the Regulations came into force in 2017. Of particular importance in the present appeal, the prior dual-track litigation approach was replaced. Formerly, the debate between the first person (typically, the owner or licensee of the patent in suit) and the second person (typically, the generic drug manufacturer) was whether the Minister of Health should be prohibited from issuing an NOC [SS: 'Notice of Compliance'] to the second person. This was decided based on whether the first person was successful in showing that the allegations in the second person’s NOA were not justified. If so, a prohibition order would be issued. If not, the Minister of Health would remain free to issue an NOC to the second person. This prohibition proceeding was in the form of an application, and proceeded based on a paper record and without live witnesses. Regardless of the outcome of the prohibition proceeding, litigation under the Patent Act, R.S.C. 1985, c. P-4, (and outside the Regulations) could follow. If the prohibition order was refused, and the NOC issued to the second person, the first person could sue for patent infringement under section 55 of the Patent Act. On the other hand, if a prohibition order was issued, and the second person was kept off the market, it could commence an action under section 60 of the Patent Act seeking a declaration that the patent in issue is invalid and/or would not be infringed. Such actions under the Patent Act would be decided based on evidence gathered at trial with live witnesses in Court, and after discovery.
[26] Such dual-track litigation was allowed because the issues before the Court were technically different – the proceeding under the Regulations concerned not whether the patent in suit was valid or would be infringed, but whether certain allegations in that regard were justified. Another quirk of the Regulations prior to 2017 was that an unsuccessful first person might not have a practical right of appeal because an NOC might issue to the second person shortly after the Federal Court’s decision, and before an appeal could be decided. An appeal on the question of prohibiting the Minister of Health from issuing the NOC would become moot upon issuance of the NOC.
[27] One key aim of the 2017 amendments to the Regulations was to eliminate the dual-track nature of litigation involving patents on medicines. Under the amendments, the second person still serves an NOA [SS: 'Notice of Allegation']. However, the next step for the first person is now to commence an action rather than an application. As before, the commencement of the action prevents the Minister of Health from issuing an NOC to the second person for 24 months (subject to certain conditions), and the first person accepts the possibility of liability for damages to the second person if the action is ultimately dismissed. The important difference is that the action under the Regulations as they now stand decides the issues raised in the NOA (e.g. infringement, invalidity) once and for all just like an ordinary action under the Patent Act. The elimination of the dual-track litigation approach also provides an effective right of appeal for an unsuccessful first person. Even if the Federal Court rules in favour of the second person, and they obtain an NOC for their generic drug, the first person can pursue an appeal without concern that the matter has become moot.
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