Canada’s Federal Court Finds Generic’s Non-Infringement Allegation Justified but Grants Prohibition Order Due to Defective Notice of Allegation

On July 5, 2016, Brown J of Canada’s Federal Court allowed a prohibition application by Bayer Inc (Bayer) against Fresenius Kabi Canada Ltd (Fresenius) concerning Fresenius’ generic moxifloxacin hydrochloride (HCl) injection (Bayer’s AVELOX I.V.®) and Bayer’s Canadian Patent No. 2,192,418 claiming moxifloxacin HCl monohydrate (the Monohydrate) (Bayer Inc v Fresenius Kabi Canada Ltd, 2016 FC 581).  Although he found that Fresenius’ non-infringement allegation was justified, Brown J determined that the NOA was defective for failing to adequately disclose the factual and legal basis for the non-infringement allegation. Consequently, he issued a Prohibition Order against Fresenius.  This decision serves as a reminder to generic manufacturers that an NOA must contain sufficient factual and legal basis to make the patentee fully aware of the grounds for the generic’s allegations; failure to do so can have grave consequences.

In the NOA, Fresenius alleged that the Monohydrate would not be used in the manufacture of the finished product or in the manufacture of the active pharmaceutical ingredient (API).  It also hinted at non-infringement by importation by stating that any solid form of the API used to make the finished product was “trivial and merely incidental”, instead of disclosing that the finished product would be made overseas.  Brown J held that Fresenius’ failure to disclose any details of importation did not enable Bayer to assess its course of action in response to the NOA.  Brown J further held that Fresenius’ subsequent disclosure of importation pursuant to a confidentiality agreement did not cure the defective NOA.

Fresenius has brought a motion for reconsideration and also appealed to the Federal Court of Appeal.

Brown J’s decision can be found here 2016FC581.pdf.

Summary by: Junyi Chen