Federal Court Of Appeal Clarifies That A "Direct Impact" Is Required To Obtain Leave To Appeal Interlocutory Orders In PM(NOC) Actions

• Published date: 11 December 2020
• Subject Matter: Intellectual Property, Litigation, Mediation & Arbitration, Patent, Trials & Appeals & Compensation
• Law Firm: Bereskin & Parr LLP
• Author: Mr Andrew McIntosh and Martin Brandsma

In 2017, Canada significantly amended the Patented Medicines (Notice of Compliance) Regulations (the 'Regulations'). The Regulations provide a mechanism for the holder of a Notice of Compliance (i.e., marketing authorization) for a given drug (the 'first product'), and for which a patent is listed on the 'patent register', to bring an action for patent infringement against a 'second person' who makes reference to the first product in support of its own application for its own Notice of Compliance. Part of the 2017 amendments was the addition of section 6.11, which provides that an appeal of any interlocutory order made in an action under the Regulations lies directly to the Federal Court of Appeal ('FCA')'with leave. Until now, the test for leave had never been settled or discussed by the FCA.

In Apotex Inc. v. Allergan Inc., 2020 FCA 208 ('Apotex'), the FCA 'exceptionally' provided one-time, brief reasons concerning these leave motions. In doing so, it established a two-part test for leave under section 6.11 of the Regulations, which requires applicants to demonstrate:

1. 'a fairly arguable case taking into account the standard of review'; and
2. 'that the issue raised is capable of having a direct impact on the overall success or failure of the case' (Apotex at para 7).

The 'fairly arguable case' standard is the usual and default test that applicants outside the scope of the Regulations must satisfy where leave is required. In Apotex, the FCA emphasized that determination of 'a fairly arguable case' must bear in mind the applicable standard of review (i.e., correctness or palpable and overriding error). The FCA stressed the difficulty applicants will encounter when seeking leave to appeal orders where the palpable and overriding standard applies (i.e., on questions of fact), stating: 'Showing that something arguably fails correctness review'i.e., is arguably wrong'is one thing. Showing that...