Canada's Notice of Compliance Drug Regulations: The Federal Court Gives New Perspective on Section 8

In a recent decision of a single judge of the Federal Court, Trial Division (Apotex Inc v Syntex Pharmaceuticals International Limited, 2005 FC 480), Justice Finckenstein has clarified the scope of section 8 of the Patented Medicines (Notice of Compliance) Regulations (Regulations). A generic drug manufacturer, Apotex Inc (Apotex), had initiated proceedings under section 8 of the Regulations to recover damages from two patent drug manufacturers, Syntex Pharmaceuticals International Limited and Hoffman-LaRoche Limited (Defendants), as a result of the patent at issue having been declared invalid. The purpose of section 8 is to provide relief to claimants, usually generic drug manufacturers, who have been prevented by the patent holder (by way of obtaining a prohibition order granted under section 6) from entering the market, only to later discover that the relevant patent was never a valid patent or that the generic drug was not infringing. The matter came before the Court by way of an appeal from a decision in which a third party claim of the Defendants against the Crown was allowed to stand. The factual basis alleged for the third party claim was that once the patent had been declared invalid, there was nearly a two-week delay before the Minister of Health issued a Notice of Compliance (NOC) permitting the generic drug to be marketed and sold, and that a failure to grant the NOC immediately was actionable. The Court ordered the third party claim to be struck, as a matter of principle, on two grounds: first, section 8 is a complete code for claims involving NOCs, and, secondly, there is no common law right of action for breach of a statutory duty. The Court held that section 8 contained the sole process and remedy to offset the possibility of abuse that could result where patent holders could keep generic companies from entering the market for a significant amount of time, and that:

1. Section 8 does not establish liability on the part of anyone other than the "first person";
2. Section 8 does not create a right of action by anyone other than the "second person";
3. Section 8 does not give the Court jurisdiction to make any order against anyone (including the Crown) other than a first person; and
4. no liability extends beyond the day of the withdrawal, the discontinuance, the dismissal or the reversal of the prohibition proceedings.

For the full text of the Court's reasons, see: http://decisions.fct-cf.gc.ca/fct/2005/2005fc480.shtml Summary by: Abigail Browne