The Federal Court of Appeal (Locke JA writing) has held that it is an abuse of process for second persons under the PMNOC Regulations to serve more than one Notice of Allegation (“NOA”) relating to the same patent and drug product.
Facts: Janssen markets paliperidone palmitate suspension in prefilled syringes for use to treat schizophrenia (marketed as INVEGA SUSTENNA). Canadian Patent No. 2,655,335 (the “335 Patent”) is listed on the Patent Register in respect of the INVEGA SUSTENNA product.
Apotex filed two abbreviated new drug submissions seeking notices of compliance to market a generic version of Janssen’s INVEGA SUSTENNA product. As part of its submissions, Apotex served a first NOA in which it only alleged that the claims of the 335 Patent would not be infringed by its proposed generic product. Janssen commenced an action under the PMNOC Regulations in response to the first NOA (“Prior Action”). Following a summary trial, the Federal Court found that Apotex’s proposed product would infringe the claims of the 335 Patent and issued declarations of infringement and a permanent injunction (decision here). An appeal from that decision is pending.
Following the Federal Court’s holding of infringement, Apotex served a second NOA in which it alleged that the claims of the 335 Patent were invalid because they are directed to unpatentable methods of medical treatment. No non-infringement allegations were included in the second NOA. In response to this NOA, Janssen commenced further actions pursuant to the PMNOC Regulations and brought a motion for summary judgment arguing that Apotex’s Defence was an abuse of process. The motion was dismissed (decision here) and Janssen appealed.
Decision: The Federal Court of Appeal allowed Janssen’s appeal and held that Apotex’s second NOA constituted an abuse of process. There were no special circumstances allowing the relitigation of issues relating to the 335 Patent; Apotex failed to provide a valid reason why it did not include the invalidity allegations in the first NOA. In essence, Apotex was not permitted to litigate by instalments.
The Court of Appeal began its analysis by noting that the doctrine of abuse of process engages the inherent power of the court to prevent misuse of its procedures in a way that would bring the administration of justice into disrepute. The Court of Appeal emphasized that the doctrine of abuse of process focuses on the integrity of judicial decision making, as opposed to the interests of the specific parties. In the context of ordinary patent infringement actions, the jurisprudence has developed such that, unless there are special circumstances, a defendant cannot relitigate issues in respect of the same patent. For example, it is an abuse of process for a party to defend an infringement action on the basis of non-infringement, and after losing that action, to then allege invalidity of the same patent in a further action. The fact there was a pending appeal of the Prior Action did not preclude a finding of abuse of process.
The Court of Appeal noted that the doctrine of abuse of process is especially engaged in actions under the PMNOC Regulations because one of the main purposes of the 2017 amendments to the Regulations was to avoid multiple proceedings concerning the same patent for the same product. For this reason, the Court of Appeal held that even though the PMNOC Regulations do not specifically prevent a second person from serving multiple Notices of Allegation in respect of the same drug, the purpose of the regime nonetheless requires that all non-infringement and invalidity issues concerning a patent should be raised by a second person and decided by the Court in one action. It is an abuse of process for a second person to split its case and keep some of its allegations in respect of a patent in reserve as a back-up strategy.
With regard to Apotex’s second NOA, the Court of Appeal held that the Federal Court erred in law by applying the wrong test for abuse of process. The Federal Court should have considered whether it would have been permissible for a defendant in an ordinary patent infringement action to defend the action on the basis of non-infringement and then, after losing on that defence, to commence a second action to invalidate the same patent. The Court of Appeal noted that, in the absence of special circumstances, such a second action would normally constitute an abuse of process. No special circumstances were advanced by Apotex in this case explaining why its invalidity allegation could not have been included in its first NOA.
Finally, with regard to remedies, the Federal Court of Appeal decided that, because a trial in respect of the second NOA was imminent (March 2024), no useful purpose would be served by sending the motion back to the Federal Court for redetermination. Rather, the Court of Appeal granted Janssen’s actions in the underlying proceedings, declared that Apotex’s proposed product would infringe the claims of the 335 Patent, and granted a permanent injunction until the expiry of the 335 Patent.
Apotex has a statutory right to file an application for leave to appeal to the Supreme Court of Canada within 60 days of the FCA decision.