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The Second Person’s Burdens (with apologies to Rudyard Kipling)

On January 9, 2015, the Federal Court of Appeal released Reasons for Judgment dismissing an appeal brought by Merck and BMS  from a judgment of Justice Barnes dismissing BMS’ application under the Patented Medicines (Notice of Compliance) Regulations.

Below, Justice Barnes had dismissed BMS’ application on the basis that BMS had failed to disprove Teva’s allegation of non-infringement of a crystal form patent to an active pharmaceutical ingredient known as efavirenz and used in BMS’ ATRIPLA product, a three ingredient combination indicated for HIV/ AIDS.  The patent in suit claimed Form 1 efavirenz.

In its Notice of Allegation,  Teva had asserted, among other things, that its proposed product would not infringe the patent-in-suit. The central issue on the appeal Teva’s burden (the second person) to put the issue of non-infringement “into play”.  Teva had successfully argued before Justice Barnes that this had been achieved by the assertions in Teva’s NOA that Teva’s tablets would not contain Form 1.  Justice Barnes had found that this allegation was justified.

On appeal, BMS argued that Teva, the second person, had a more extensive burden, described as “an initial burden to put its allegations “into play” by presenting evidence sufficient to give them an air of reality”. The Federal Court of Appeal rejected this argument, finding that the added burden of presenting evidence only applied to allegations of invalidity, and there only because of the presumption of validity arising from section 43(2) of the Patent Act (“without any evidence from the second person, the legal position is that the patent is valid”).

The Federal Court of Appeal further stated that where the second person alleges non-infringement, “there is no presumption in play and, thus, no initial onus on the second person to put forward evidence.”

This decision does not present new law.  It does, though, affirm existing jurisprudence and assist in clarifying the differing burdens applicable where the second person alleges non-infringement as compared to where it alleges invalidity. Specifically, the decision affirms the principle that the burden is on the first person to disprove any allegations of non-infringement made in a NOA. Unless the first person leads evidence in this regard, the allegation in the second person’s NOA will carry the day.

Aitken Klee LLP represented Teva in this matter.

The Reasons for Decision can be found here.