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Relief or Relapse? Federal Court of Appeal orders re-trial of STELARA infringement case

The Federal Court of Appeal has remitted the infringement and validity action regarding AbbVie’s Canadian Patent No. 2,365,281  and Janssen’s drug STELARA used for the treatment of psoriasis, back to the Federal Court for a new trial before another judge.

The original trial began on December 2, 2013. On October 31, 2013, Janssen moved to amend its Statement of Defence and Counterclaim to add additional prior art references that would bolster its obviousness argument. Justice Hughes dismissed Janssen’s motion and proceeded with the trial. Following the trial, Justice Hughes held that the 281 Patent was valid and infringed.

The Federal Court of Appeal has now reversed the decision dismissing Janssen’s motion to amend, negating the trial decision and requiring the matter to be remitted for a new trial to take into account the additional prior art.

The test on a motion to amend, following the decision in Merck v. Apotex, “boils down to a consideration of simple fairness, common sense and the interest that the courts have that justice be done.” While this requires a balancing exercise in which no single factor predominates, the Court of Appeal held that Justice Hughes failed to give proper consideration and weight to the relevant factors. In particular, Justice Hughes failed to consider the novel technology and the complex scientific and commercial realities going at the heart of the patent bargain between the inventor and the public. The Court of Appeal’s decision was mainly based on the fact that the additional prior art went to the heart of the question of obviousness. As it was in the interests of justice that all relevant art be before the trial judge in order to fully address the issue of obviousness, the Court allowed Janssen’s appeal.

In allowing Janssen’s appeal, the Court of Appeal relied on counsel’s assertion that only a two month delay would be necessary to conduct the additional discovery necessary and to address the new references. The Court of Appeal did not explicitly address Justice Hughes’ concern that, given the Court’s scarce resources and the number of parties seeking Court time, “if a trial is put off, it could be months or years before it can be heard.”

The Court of Appeal stated that it was “not suggesting that every amendment sought by a party within a few months or weeks of the commencement of a trial should be allowed.” The decision suggests, however, that such amendments will be allowed provided they would have a substantive impact on a major issue in the case.

As a secondary matter, AbbVie argued that the Court should only remit the invalidity issues for re-trial since the pleadings amendment would not affect the question of infringement. The Court rejected this argument on the basis that the finding of infringement was contingent on the finding of validity and that construction of the claims can vary based on available prior art. It held that to determine which issues would be affected by the amendment (and thus should be re-tried) would require it to hear and assess evidence on the point, thus transforming itself into a court of first instance to make fresh findings of fact and determinations of law based on those findings. The Court of Appeal stated that it was unwilling to assume that role.

The original trial decision was issued four and half years after AbbVie filed its Statement off Claim. In its decision, the Court of Appeal mentioned twice that it expects the parties’ experienced litigators to be able to reduce the time for the re-trial.

Aitken Klee LLP represented AbbVie in Janssen’s motion to amend the Statement of  Defence and Counterclaim at the trial and appellate levels.

A copy of the Reasons for Judgment in Janssen Inc. v. Abbvie Corporation, 2014 FCA 242 can be found here.