An obvious ‘Comity of Errors’: Court admonishes motives of Applications Judge, but agrees with the result

Authors: Emir Crowne (Associate Professor, Faculty of Law; Barrister, Solicitor and Registered Trade-mark Agent, University of Windsor) and Niousha Ghomashchi (Law Student, Faculty of Law, University of Windsor)

Apotex Inc v Allergan Inc, 2012 FCA 308, Federal Court of Appeal, Canada, 23 November 2012

Journal of Intellectual Property Law & Practice (2013), doi: 10.1093/jiplp/jpt027, first published online: March 21, 2013

The Federal Court of Appeal upheld a prohibition order sought by Allergan preventing the Minister of Health from issuing a Notice of Compliance to Apotex but admonished the Applications Judge for granting the prohibition order simply to ‘further his desire to clarify the jurisprudence’ (Apotex, para 6).

Legal context

The initial proceeding before the Applications Judge (2012 FC 767) was brought under the Patented Medicines (Notice of Compliance) Regulations, SOR 93-133, this being a summary application for judicial review initiated by the applicant (the patent holder) who seeks to prohibit the Minister of Health from issuing a Notice of Compliance. Once the generic manufacturer has presented probative evidence supporting its allegations of anticipation and obviousness (in this instance), the burden of proof is on the applicant to establish, on a balance of probabilities, that those allegations are not justified.

Subsection 5(1) of the Regulations sets out the requirements for a ‘generic’ drug company (ie a ‘second person’) to obtain a notice of compliance from the Minister of Health for approval of its generic drug:

If a second person files a submission for a notice of compliance in respect of a drug and the submission directly or indirectly compares the drug with, or makes reference to, another drug marketed in Canada under a notice of compliance issued to a first person and in respect of which a patent list has been submitted, the second person shall, in the submission, with respect to each patent on the register in respect of the other drug,

a. state that the second person accepts that the notice of compliance will not issue until the patent expires; or

b. allege that 

i. the statement made by the first person under paragraph 4(4)(d) is false,

ii. the patent has expired,

iii. the patent is not valid, or

iv. no claim for the medicinal ingredient, no claim for the formulation, no claim for the dosage form and no claim for the use of the medicinal ingredient would be infringed by the second person making, constructing, using or selling the drug for which the submission is filed.

Subsection 6(1) then sets out how an ‘innovator’ drug company (ie a ‘first person’) must object to such allegations:

A first person may, within 45 days after being served with a notice of allegation under paragraph 5(3)(a), apply to a court for an order prohibiting the Minister from issuing a notice of compliance until after the expiration of a patent that is the subject of the notice of allegation.

Facts

Under the Regulations, Allergan sought an order prohibiting the Minister of Health from issuing a Notice of Compliance (NOC) to Apotex for its generic glaucoma medication until the expiry of Allergan's patent. In the Notice of Allegation, Apotex challenged the validity of Allergan's patent on the grounds of obviousness and anticipation.

Justice Hughes, the Applications Judge, held that Apotex's allegation of invalidity on the grounds of obviousness was justified (2012 FC 767 at para 189). However, in separate proceedings, involving the same patent, Justice Crampton (as he then was) held that:

Allergan has met its burden of establishing, on a balance of probabilities, that Sandoz's allegation that the '764 Patent is invalid on the ground of obviousness is not justified. (Allergan Inc and others v Canada (Minister of Health) and Sandoz Canada Inc, 2011 FC 1316 (‘Sandoz’), para 127).

In other words, if Justice Hughes found the allegations of obviousness justified it would run contrary to Justice Crampton's earlier finding. Therefore in the interests of judicial comity, Justice Hughes disregarded his own findings, and granted the prohibition order in favour of Allergan. At paras 189–94 he writes:

As is apparent, I would find on the evidence before me that Apotex's allegations as to obviousness are justified … 

That is, however, not the end of the matter.

I must consider the question of comity. Is the evidence and argument before me ‘different’ from or ‘better’ than the evidence and argument before Crampton J in Sandoz? There is no real way to measure ‘different’ or ‘better’. The evidence and argument is of the same kind. In some cases Crampton J had unrebutted evidence whereas I have rebutted evidence. The difference in the evidence and argument is more one of quality to the best that can be discerned from the record that I have, and this court not having the record as to what was before Crampton J.

If I were to dismiss this application on the basis that Allergan did not discharge its burden of proving that Apotex's allegations as to obviousness were not justified; then, within a matter of hours—if not days—the Minister would give Apotex a Notice of Compliance, and the issue as to whether the court should grant a prohibition order would be moot. The Court of Appeal, in all likelihood, would not hear an appeal.

I believe that there have been serious issues raised as to comity. The somewhat contradictory decisions of the Court of Appeal should be considered by that court and clear instruction given as to how, in an NOC context, previous decisions of a court on the same issues respecting the same patent, should be considered.

The only practical way to get the matter before the Court of Appeal is for me to grant the Order for prohibition in the likely expectation that Apotex will appeal.

Analysis

The Federal Court of Appeal strongly disapproved of this approach. Justice Noël, writing for a unanimous court, held that ‘it was not open to the Federal Court judge to grant the prohibition in order to further his desire to clarify the jurisprudence’ (2012 FCA 308 at para 6). The court nonetheless upheld the prohibition order. At paras 49 and 50 the court stated that:

it was not open to the Federal Court judge to issue a prohibition order for the purpose of having his concerns about the use of the doctrine of comity and the notion of abuse of process addressed by this court on appeal … unless the Federal Court judge could demonstrate that Crampton J.'s construction of the patent in order to determine the inventive concept was wrong or that distinct evidence adduced before him compelled him to reach a different conclusion, it would have been preferable for him to adhere to it.

The court added that claim construction must be conducted in light of the patent as a whole (para 72). Had the Applications Judge done a purposive and proper reading of the patent, he would have concluded that the improved safety profile formed part of the claimed invention (para 74).The court also found that the improved safety profile was not obvious to a person skilled in the art, as the invention was ‘the bi-product [sic] of an extensive, multi-centred, double masked, and randomized trial. There was nothing routine about this exercise and the manner in which the inventors came upon the improvement shows in the clearest possible way that it was not obvious to try’ (para 92).

Practical significance

Litigants and appellate courts should not bear the burden of satisfying a first instance judge's desire to clarify the jurisprudence. This distracts from the judicial function. As the Federal Court of Appeal noted:

… the parties were entitled to have their dispute settled on the merits and the Federal Court judge by issuing a formal judgment that was contrary to the conclusions that he reached on the merits, failed in his task. (para 49)

In addressing the issue of comity, a question which was at the heart of the Application Judge's unusual decision, the court emphasized that judicial comity (a horizontal application of stare decisis, if you like) generally applied to questions of law, but not to questions of fact:

In the Federal Court, Mactavish J. in Almrei (Re), 2009 FC 3, acknowledged this limitation as follows (para. 70):  

‘The principle of judicial comity might arise in the context of a ruling on a point of law but I did not consider myself bound by any factual findings made by my fellow judges in the earlier proceedings.’ (para 45) 

The rationale for this is that there can only be one correct interpretation of a question of law, whereas questions of fact may give rise to divergent findings (especially where the evidentiary base differs). The court was of the view that ‘decisions rendered by colleagues are persuasive and should be given considerable weight, a departure is authorized where a judge is convinced that the prior decision is wrong and can advance cogent reasons in support of this view’ (para 47). Accordingly, since the task of the Applications Judge in this case lay in identifying the inventive concept (a question of law), it was not open to him to depart from Justice Crampton's earlier decision unless that earlier construction was justifiably wrong or new evidence justified the departure. At paras 50–52, the court stated that:

… construing a patent in order to identify the inventive concept when it is not readily discernible for the claim itself requires looking at the whole of the patent (Sanofi, para. 77) and gives rise to a question of law (Western Electric Co. v Baldwin International Radio of Canada Ltd., [1934] S.C.R. 570, pp. 572-573 (S.C.C.); Weatherford Canada Ltd. v Corlac Inc., 2011 FCA 228, [2011] F.C.J. No. 1090, para. 24—and the authorities referred to in these passages). It follows that unless the Federal Court judge could demonstrate that Crampton J.'s construction of the patent in order to determine the inventive concept was wrong or that distinct evidence adduced before him compelled him to reach a different conclusion, it would have been preferable for him to adhere to it. 

The Federal Court judge did not identify any error nor did he rely on distinct evidence to explain his diverging view. He simply chose to construe the patent differently and held that the inventive concept did not extend to the improved safety profile which Crampton J. had included …

If this was the only reason why the Federal Court judge felt that he could disregard the opinion of his colleague, it does not justify his action. Construing a patent in order to identify the inventive concept is no less an exercise that leads to a determination of law because the document being construed is drafted by the patentee … The analogy which the Federal Court judge drew with a contract (ibidem) is no more helpful since all else being equal a contract should not be subjected to contradictory constructions any more than a patent, or a statute.

For a decision concerning the inventiveness of glaucoma treatment, the Applications Judge demonstrated his own short-sightedness in failing to see the bigger picture. As set out by the Court of Appeal, his concerns over comity could have been neatly addressed by questioning whether his divergence with Justice Crampton's earlier decision was one of law, or one of fact (and whether the divergence was justified.