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Strong Possibility of Future Drug Patent Infringement Survives Motion to Strike

On March 21, 2016, Justice Barnes dismissed an appeal of Prothonotary Tabib’s Order that refused to strike a pleading based in quia timet infringement of Canadian Patent No. 2,298,059.

PM(NOC) Background

In 2012, Gilead commenced a prohibition application against Teva in respect of the 059 Patent and Canadian Patent Nos. 2,261,619 listed on the Patent register against Gilead’s tenofovir containing products, VIREAD and TRUVADA. In December 2013, Justice Barnes dismissed Gilead’s prohibition application in respect of the 059 Patent, but granted it in respect of the 619 Patent. As a result, unless the 619 Patent was declared invalid, the Minister was prevented from approving Teva’s submissions until its expiry in July 2017.

Gilead’s infringement action

In 2015, Gilead brought a patent infringement action against Teva in respect of the same 059 Patent for which the prohibition application was dismissed. On Teva’s motion, Prothonotary Tabib struck some portions of Gilead’s pleading but allowed the action to proceed with respect to likely future infringement (quia timet infringement). Relying on Connaught Laboratories, Prothonotary Tabib, set out the requirement for pleading quia timet infringement as follows:

…the statement of claim must allege a deliberate expressed intention to engage in activity the result of which would raise a strong possibility of infringement; the activity to be engaged in must be alleged to be imminent and the resulting damage to the plaintiff must be alleged to be very substantial if not irreparable; and, finally, the facts pleaded must be cogent, precise and material. It is not sufficient that they be indefinite or speak only of intention or amount to mere speculation.

Relying on Teva’s stated intention of entering the Canadian tenofovir market as soon as its drug submissions were approved, Prothonotary Tabib held that the probability that infringement of the 059 Patent will occur on expiry of the 619  Patent was sufficiently imminent to justify a quia timet action.

On appeal, Teva argued that the Prothonotary erred in stating the test and in applying the test to the facts. Specifically, Teva argued that Prothonotary Tabib had failed to have regard to the fact that the test included a temporal component such that it was necessary that the potential infringement be likely to occur soon. Teva also argued with regard to imminence that there was no guarantee that Teva’s drug submissions, which were on patent hold, would receive an NOC. Further, even if Teva were to launch in July 2017, infringement would be a year or more away does not meet the “imminent infringement” requirement of Connaught Laboratories.

Justice Barnes, applying the palpable and overriding error standard of review, held the Prothonotary had not erred in finding a strong possibility of infringement:

In a situation where the Teva product has been contingently approved by the Minister and where Teva has unequivocally stated that, on receipt of a NOC, it will enter the market, the conclusion that a strong possibility of infringement was present cannot be characterized as an error, let alone a palpable and overriding error.

In respect of the imminence, Justice Barnes held that this is a subordinate consideration where the likelihood of future harm appears high. Justice Barnes accordingly allowed the action to proceed as framed and dismissed Teva’s motion to strike.

A copy of Justice Barnes’ Order and Reasons may be found here.

Teva was represented by Aitken Klee.