On February 6, 2018, Justice Dunphy dismissed Sanofi’s motion for leave to amend their statement of defence in light of “special circumstances”, namely the Supreme Court of Canada overturning the “promise doctrine” (AstraZeneca). The underlying action, started more than 7 years ago, was Apotex’s claim in the Ontario Superior Court of Justice, the Statute of Monopolies for improperly being held off the Ramipril market by reason of Schering’s unsuccessful proceeding under the PM(NOC) Regulations (for more detail on the background of the dispute, see Justice Dunphy’s previous decision, here.)
In the prohibition application, Justice MacTavish held that Apotex’s allegation of invalidity was justified because the 206 Patent promised a specific utility and that the utility had not been demonstrated or soundly predicted at the time Schering filed its patent application. The claims of the 206 Patent asserted against Apotex were subsequently held by Justice Snider to be invalid. In 2016, the Supreme Court of Canada released its decision in AstraZeneca, holding that the “promise doctrine” was not supported by the Patent Act and was not the proper way to assess utility.
Sanofi argued that they should not be “estopped or otherwise precluded” from arguing that Apotex cannot rely on an earlier Federal Court decision that had applied the promise doctrine to invalidate the 206 Patent on which the present claim for damages are based. Sanofi cited prior case law to support the use of the doctrine of special circumstances when a change in the law had occurred. The Court, however, distinguished this case from prior cases and reasoned that AstraZeneca did not represent a change in the law itself but rather represented only a change in an aspect of the interpretation of a statutory provision. As such, the special circumstances exception had no applicability in this case, with Justice Dunphy holding:
“The existence of a triable issue about the existence and impact of a change in interpretation of the law is not a sufficiently special circumstance to warrant suspending the application of the doctrines of res judicata and collateral attack”
Sections 62 and 63 of the Patent Act
Justice Dunphy also considered the effect of s. 62 of the Patent Act upon the declaration of invalidity of the 206 patent by the Federal Court. S.62 of the Patent Act deems the 206 Patent void ab initio. The only way to have reversed the judgment was through an appeal as provided by s. 63. In this case, Justice Snider’s findings in the 206 Patent were affirmed on appeal.
Whether considering special circumstance or s.62 and s.63 of the Patent Act, Justice Dunphy found that both compelled the same result. The in rem declaration of invalidity of the 206 patent by the Federal Court was final. Further, allowing the proposed amendments would essentially require re-litigation of an issue that had been previously finally decided. This is the outcome that res judicta seeks to avoid and as such there are no special circumstances.
A copy of the decision can be found here.