On the Facts, Product Monograph Does Not Induce Infringement

Bayer Inc v Fresenius Kabi Canada Ltd / moxifloxacin (NOC) 2016 FCA 13 Stratas JA, aff’g 2015 FC 797 Strickland J aff’g 2015 FC 388 Lafrenière J (here) (sub nom Bayer Inc v Pharmaceutical Partners of Canada Inc)
            2,378,424 / moxifloxacin / AVELOX

The ‘424 patent is a formulation patent claiming an aqueous formulation of moxifloxacin and from 0.4% to 0.9% (w/v) of sodium chloride. Fresenius Kabi’s moxifloxacin product is capable of being used post-sale to make the formulation, though it can also be used for non-infringing uses. In the motion giving rise to this appeal, Lafrenière J struck the portions of Bayer’s application for an order of prohibition alleging infringement or inducing the infringement of the ‘424 patent. Only the inducement issue was appealed. While Strickland J’s decision does not appear to be publicly available, we are told that “the Federal Court reached the same result as the Prothonotary for substantially the same reasons” [3]. As discussed at length in my post on Lafrenière J’s decision, the law of inducement raises some very difficult issues, particularly in a case such as this one, where the allegedly infringing product is capable of both infringing and non-infringing uses.

While the law on inducement is complex, those complexities are not necessarily raised on the facts of any particular case. In my post on Lafrenière J’s decision I pointed to the statement in the Product Monograph that “Moxifloxacin injection is compatible with the following intravenous solutions at ratios from 1:10 to 10:1: [including] 0.9% Sodium Chloride Injection, USP,” saying that “As I understand the facts, the first use would be infringing, though the following five would not.” But reading a decision is not the same thing as reading the full record, and in this case the FCA stated that the FC “found as a factual matter that the product monograph in question does not instruct or direct that Fresenius’ product is to be co-administered or co-administered with 0.9% sodium chloride (at paragraphs 59-61).” That being the case, the appeal was dismissed. This would seem to imply that a statement on a Product Monograph that a product can be used for an infringing purpose does not in itself constitute “instruction or direction” and therefore cannot constitute inducement. However, without Strickland J’s decision, it is difficult to put this holding in context.

Stratas JA also discussed the standard of review. He noted that on the authority of Housen 2002 SCC 33, the appropriate standard of review would be palpable and overriding error, but Federal Court precedent is that the standard of review is different in an appeal from a Rule 51 appeal; the FCA “may interfere with the Federal Court’s decision where the Federal Court had no grounds to interfere with the Prothonotary’s decision or, in the event such grounds existed, if the decision of the Federal Court was arrived at on a wrong basis or was plainly wrong” [6]. Stratas JA strongly suggested that the time has come to abandon this different standard of review and apply the Housen standard [7], but given that he had not received full argument on that issue, the lower standard would be applied, and in any event the standard of review made no difference in the result [8]. This is a clear invitation to argue that the Housen standard should apply in an appeal from a Rule 51 appeal.

UPDATE: Strickland J's FC decision has now been released: see here.