Thursday, February 18, 2021

PM(NOC) Related Rights of Action not Subject to Limitation Period

Merck Sharp & Dohme Corp v Sandoz Canada Inc 2020 FC 1180 Southcott J

2,518,435 / sitagliptin / JANUVIA

I believe this is the first decision addressing s 8.2 of the PM(NOC) Regulations, which provide for “Related rights of action,” as described by the RIAS. In particular, s 8.2 provides that “[o]n receipt of a notice of allegation” the patentee may bring an action for infringement of a patent, other than the patents that are set out in the NOA, that could result from the grant of an NOC. The RIAS explains that “Such patents can create legal uncertainty if there is risk that they could be infringed by the generic product. To facilitate legal consideration of such patents without expanding the scope of proceedings under the proposed Regulations, related rights of action are proposed.” The RIAS refers by way of example to patents claiming chemical intermediates or processes for making a drug, which may be infringed by the sale of a particular drug but which are not eligible for listing. A quick look at the patent at issue in this case suggests that it falls into both these categories, as being a process for making intermediates.

The question raised in on this motion is whether s 8.2 is subject to a limitation period, in the same manner as the primary provision, s 6, which requires the patentee to bring an action respecting the patents that are set out in the NOA within 45 days. The parties and Southcott J all agreed that the matter was appropriate for determination by summary judgment [20], [22].

Southcott J held that there is no limitation period applicable to actions brought under s 8.2 [77]. The first point, and a very powerful one, is that there is nothing in the text of s 8.2 suggesting that there is a limitation period, in contrast to the clear limitation period set out expressly in s 6 [41]–[42]. As the FCA has noted, “the clearer the ‘ordinary meaning’ of the text, the more compelling the contextual considerations must be in order to warrant a different reading of it, especially when that involves adding words to those used by the legislator” Biolyse Pharma 2003 FCA 180 [13].

The role of the text is “dominant” (Canada Trustco 2005 SCC 54 [10]), but not absolute, and accordingly Southcott J went on to consider a variety of purposive and contextual arguments made by the parties. The defendants’ basic argument was that the purpose of the Regulations generally and s 8.2 in particular is to reduce the legal uncertainty associated with generic entry [38], [46]. The plaintiffs’ argued that the purpose of s 8.2 in particular is to remove the previously existing barriers to bringing a quia timet action, but not necessarily to eliminate legal risks prior to generic product launch [46]. (And see [35], explaining the prior hurdles to a quia timet action.)

After canvassing the general principles of statutory interpretation, Southcott J considered the specific arguments made by the parties. The defendants generally relied on the RIAS and a high level assessment of the legislative purpose. The plaintiffs responded directly to this by noting that even if the we were to accept that s 8.2 incorporated a limitation period, the defendants acknowledged this would only apply to an action brought under that provision, ie a statutory quia timet action. A patentee who missed the deadline would still be free to sue on an unlisted patent following market entry, when it is no longer necessary to bring the aciton quia timet. This is in contrast to an action related to the patents that are the subject of an NOA, which, pursuant to s 6.01 cannot normally be the basis for a subsequent action [64]. The defendants did not go so far as to argue that a parallel finality provision should be read in along with the limitation provision. Consequently, it is difficult to conclude that the purpose of the provision is to eliminate the generic’s legal risk [69]. If anything, incorporating a limitation period in s 8.2 without the accompanying principle of finality would increase risk and expense, as the patentee would simply wait until launch to bring its action.

The plaintiffs also relied on several arguments turning on the way s 8.2 and a putative limitation period would interact with the Regulations as a whole. For example, the plaintiffs noted that the NOA provides the first person with sufficient information to be able to decide whether to bring an action quickly enough to meet the 45 day deadline, but the “as the NOA is not directed to unlisted patents, the first person would not be similarly equipped to commence a s 8.2 action within the same 45 days” [66]. The patentee made several other arguments of a similar nature, which Southcott J generally accepted. It would take me as much time to summarize them as the original decision, so I’ll just say that I found Southcott J’s analysis to be careful and convincing.

The cumulative weight of these contextual and purposive arguments, combined with the clear textual argument, is inescapable. Southcott J therefore concluded that there is no limitation period applicable to the actions brought under s 8.2 [78]. (Perhaps it is more accurate to say that s 8.2 does not incorporate any limitation period, as the actions brought under that provision are no doubt subject to the general limitation periods under the Act.)

Given Southcott J’s careful consideration of the provision, his statement of its purpose will be helpful if it requires interpretation on some other point in the future:

[71] I accept that the legislative purpose of s 8.2 is the removal of previously existing barriers to quia timet actions, so as to facilitate legal consideration of unlisted patents and thereby address uncertainty resulting from the risks associated with such patents. However, this purpose does not require the elimination of such uncertainty within any particular timeframe, as no interpretation of s 8.2 can eliminate the uncertainty that the potential for post-launch litigation of unlisted patents will continue to present. Rather, the elimination of the common law barrier achieved by s 8.2 permits earlier access to legal consideration, and therefore earlier resolution, of unlisted patent infringement claims. This result is in keeping with the overall objective of striking a balance between effective patent enforcement and timely generic market entry.

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