Ontario Court Of Appeal Allows Sanofi And Schering To Plead That Federal Court Ramipril Patent Invalidity Decision Was Flawed Due To 'Promise Doctrine'

In an action by Apotex for compensation from Sanofi and Schering under the Ontario Statute of Monopolies, U.K. Statute of Monopolies and the Trade-marks Act, the Ontario Court of Appeal has overturned a motion judge's decision denying Sanofi and Schering leave to amend their defences to plead the Supreme Court of Canada's decision in AstraZeneca Canada Inc. v Apotex Inc., 2017 SCC 36 [AstraZeneca]: Apotex Inc. v Schering Corporation, 2018 ONCA 890.

Background

The litigation relates to Canadian Patent No. 1,341,206 ("206 patent"), owned by Schering, and the drug ramipril (ALTACE), previously marketed by Sanofi.

In 2009, applying the "promise doctrine" of patent utility, the Federal Court held that certain claims of the 206 patent were invalid (Sanofi-Aventis Canada v Apotex Inc., 2009 FC 676 ("invalidity decision") aff'd 2011 FCA 300). Relying on that invalidity decision, Apotex brought the present action in 2011 seeking damages beyond those available under section 8 of the PMNOC Regulations. The Federal Court has already awarded damages under section 8 (Apotex Inc. v Sanofi-Aventis, 2012 FC 553, var'd 2014 FCA 68, aff'd 2015 SCC 20).

The Supreme Court of Canada subsequently rejected the promise doctrine, finding in AstraZeneca that it was "unsound" law and not the correct approach for assessing patent utility (previously reported).

Decision under appeal

In light of AstraZeneca, Sanofi and Schering sought leave to amend their statements of defence to plead that the Federal Court relied on wrong legal principles in finding the 206 patent claims invalid. Leave was denied by Dunphy J. (reported here), primarily on the grounds that the defences amounted to re-litigation and collateral attack of the invalidity decision. On November 8, 2018, the Ontario Court of Appeal overturned the motion judge's decision and allowed Sanofi's and Schering's amendments.

"Special circumstances" exception to issue estoppel and collateral attack

The Court of Appeal determined that issue estoppel should not prevent the amendments. Contrary to the motion judge's reasons, the Court of Appeal held that statutory amendments are not the only changes in the law relevant to the special circumstances exception to issue estoppel; the exception also contemplates a decision by a court on a point of law. AstraZeneca was such a decision - by the Supreme Court of Canada - on a point of law "central" to the invalidity decision.

The Court of Appeal repeated earlier guidance by the...