Friday, December 30, 2011

Can a Product Monograph Induce Infringement?

Apotex Inc v Nycomed Canada Inc / pantropazole 2011 FC 1441 Simpson J

In this decision Simpson J upheld a decision of Prothonotary Milczynski refusing to allow Nycomed to amend its counterclaim against two generics to allege contributory infringement “distinct from the ‘but for’ allegation of inducement” [2]. The patent at issue is for a combination of pantoprazole with a heliobacter inhibiting anti-microbial agent. The generics wish to sell generic pantoprazole. Nycomed wanted to allege that the generics contributed to infringing activities of third parties (such as physicians prescribing the combination) “through its product monograph, website and its marketing strategies to physicians and pharmacists” [2]. Nycomed acknowledged that the generics’ actions were not the “sole cause” of the infringing use [2]. This is presumably because the combination of an antibiotic with a proton pump inhibitor (PPI), such as pantoprazole, is now the “gold standard” for the treatment of ulcers caused by H pylori (see 2006 FC 1411 at [30]), so it is very likely that substantial infringement would occur regardless of the generics’ marketing. Simpson J refused to allow Nycomed to amend, on the basis that “contributory inducement is not a reasonable cause of action” [21]. 

I suggest that the facts alleged do disclose a reasonable cause of action, as the general factual allegations are not materially different from those in Abbott Laboratories Ltd. v. Novopharm / lansoprazole (NOC) 2006 FC 1411, [40]-[42] aff’d 2007 FCA 251, [26], similarly involving a PPI, in which the FCA specifically affirmed von Finckenstein J’s holding that Novopharm’s product monograph constituted “an encouragement to infringe” that was sufficient to establish inducement. Whether Nycomed would ultimately succeed would of course depend on the specific facts, and certainly von Finckenstein J’s finding was at the limit of what has been found to constitute inducement in Canada. Indeed, the question of what constitutes the exact bounds of inducing infringement is a difficult question as a matter of policy, and it may be that it would be desirable to have a strict rule that the claim at issue cannot succeed. However, in light of the lansoprazole decision, it is difficult to see how it can be said that Nycomed has no prospect of success on the facts alleged. 

I suggest that two points account for Simpson J's decision in this motion. First, no reference was made to the lansoprazole decision, from which I would infer that it was not argued. Secondly, Nycomed explicitly acknowledged that it could not establish "but for" inducement, and argued instead that contributory infringement should be recognized as a cause of action. The alternative arguement, which was successful in the lansoprazole decision, was to argue that the "encouragement" offered by the generics amounted to inducement. 

The framing of the cause of action reflects an underlying substantive difficulty, which is that the standard test for inducement, set out most recently in Corlac v Weatherford 2011 FCA 228 at [162], states what is on its face a “but for” test for causation as its second prong. However, “but for” causation is rarely a bright line in reality, and the courts have not been entirely consistent in cases that are close to the line: the lansoprazole decision in one instance in which the FCA has been willing to stretch the concept of “but for” causation, and MacLennan c. Gilbert Tech Inc. 2008 FCA 35 rev’g 2006 FC 1038, is another. I suggest that the “but for” test is itself problematic, and the concept of contributory infringement is in need of conceptual clarification – but that is a topic for another day.

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