Rx IP Update

Federal Court decides Apotex's claim for section 8 alendronate damages

The Federal Court has released another decision on the quantification of damages under section 8 of the Patented Medicines (Notice of Compliance) Regulations ("Regulations"). In Apotex Inc v Merck Canada Inc, 2012 FC 1235 (alendronate, FOSAMAX), Justice Hughes provides directions regarding the calculation of Apotex's claim.

Read more »


AstraZeneca successful in obtaining prohibition Order against Pharmascience for its generic esomeprazole product

In AstraZeneca Canada Inc et al v Pharmascience Inc et al, 2012 FC 1189, the Federal Court granted AstraZeneca an Order prohibiting the Minister of Health from issuing a notice of compliance (NOC) to Pharmascience Inc. for its generic esomeprazole product, which was compared to AstraZeneca's NEXIUM, until the expiry of Canadian Patent 2,290,531 (’531 Patent).

None of the allegations of invalidity, including inutility of the ’531 patent asserted by Pharmascience, was found to be justified.

Of note, the Federal Court affirmed that there is no requirement to prove utility in the patent — the patent need not provide data for all experiments conducted as proof of utility.

Pharmascience's other allegations of mere discovery, insufficient disclosure and obviousness were also found to be unjustified. The Federal Court held that the ’531 patent provides more information than merely identifying an inherent physiochemical property of a known substance and was not a mere discovery as asserted by Pharmascience. Rather, the ’531 patent "delves" into a property (cloud point) of a formulation component (HPMC) to ensure consistent drug release from the formulation. With respect to non-obviousness, the Court concluded that there are clear differences between the claimed invention, properly construed, and the prior art, and the relevance of the cloud point to drug release was not obvious.

Kyle Ferguson, Toronto


Supreme Court of Canada news

Teva denied leave to appeal pantoprazole decision. On November 1, 2012, the Supreme Court of Canada denied Teva leave to appeal from the Court of Appeal decision (reported in the July 2012 issue of Rx IP Update) affirming the lower Court's decision to strike out portions of Teva's Statement of Claim relating to losses, damages and harm incurred outside the section 8 liability period, including damages for permanent loss of market share, in respect of pantoprazole (Nycomed's PANTOLOC).

Teva Canada Limited v Nycomed Canada Inc et al (SCC Case No. 34873).
Federal Court of Appeal decision — 2012 FCA 129.

Supreme Court addresses tax rules on transfer pricing. On October 18, 2012, the Supreme Court considered the tax rules for setting transfer prices in the context of contractual and intangible property rights. Transfer prices are the prices set between related entities in different jurisdictions for products or services provided to one another. Canadian tax rules apply an "arm's length principle" in considering the reasonableness of a transfer price. The Minister of National Revenue reassessed GlaxoSmithKline Inc. ("Glaxo Canada") for four taxation years on the basis that the transfer prices for ranitidine (the active ingredient in ZANTAC) were higher than would have been reasonable had the companies been dealing at arm's length, having regard to the prices that generic manufacturers Apotex Inc. and Novopharm Ltd. paid for ranitidine from other sources. While the Tax Court affirmed the reassessment, the Federal Court of Appeal reversed and remitted the matter to the Tax Court for redetermination.

The Supreme Court affirmed, holding that the Minister is required to consider all "economically relevant characteristics" in determining the arm's length price for the property. The Supreme Court held that as the prices paid by Glaxo Canada were set in part as compensation to Glaxo Group Ltd. for the rights and benefits conferred on Glaxo Canada under a licence agreement (including, inter alia, patent and trademark rights and guaranteed access to new products and raw materials), that agreement could not be ignored in determining the reasonable amount paid. In addition, the Supreme Court held that there was value in the fact that materials manufactured under Glaxo Group's good manufacturing practices may confer a "certain degree of comfort that the good has minimal impurities and is manufactured in a responsible manner." The Supreme Court therefore remitted the matter to the Tax Court to redetermine the amount that would have been reasonable in the circumstances if Glaxo Canada and the supplier had been dealing at arm's length, having regard to the effect of the licence agreement.

Canada v GlaxoSmithKline Inc, October 18, 2012.
Supreme Court of Canada decision — 2012 SCC 52.
Federal Court of Appeal decision — 2010 FCA 201.
Tax Court of Canada decision — 2008 TCC 324.


Patented Medicine Prices Review Board news

New NEWSletter released. The PMPRB has released its October 2012 NEWSletter.


Notice of Hearing. The PMPRB will hold a hearing to determine whether Galderma Canada Inc. is selling or has sold TACTUO (adapalene and benzoyl peroxide topical gel) in any market in Canada at a price that in the Board's opinion is or was excessive and, if so, what order (if any) should be made.

Update. Notice of Hearing.


Health Canada news

Health Canada issues revised draft guidance document: "The Use of Foreign Reviews by Health Canada." Health Canada's pilot project of its use of foreign reviews for determination of market authorization for Canada has been in place since October 2011. Since the inception, Health Canada has received various comments and suggestions for improving the project. As a result, Health Canada has issued a revised draft guidance document and a FAQ. The pilot project will continue until March 2013, and comments may be submitted until March 31, 2013.

Draft guidance document. FAQ.

Proposed amendments to Food and Drug Regulations extend GMP requirements to active ingredients. On September 29, 2012, proposed amendments to the Food and Drug Regulations were published that would (i) extend Good Manufacturing Practices (GMP) requirements to active ingredients (AI); (ii) extend the drug establishment licensing (EL) requirements such that they apply to all AI fabricators, packagers/labelers, testers and importers; and (iii) create a new record-keeping requirement to foster the traceability of AI from the original fabricator to the dosage-form drug manufacturer. The deadline for submitting representations is December 13, 2012.

Health Canada has published a draft guidance document for the manufacture of AIs pursuant to the proposed amendments. Interested stakeholders can request a copy from Health Canada. The consultation period runs from October 22, 2012 to January 5, 2013. Health Canada has also published a cost-benefit analysis of the proposed amendments.

Proposed amendments and Regulatory Impact Analysis Statement. Consultation on draft guidance document. Cost-benefit analysis.


Recent Court decisions

Patented Medicines (Notice of Compliance) Regulations

Court of Appeal requires strict product specificity for a medicinal ingredient claim. On October 9, 2012, the Federal Court of Appeal upheld the Federal Court's decision that a patent containing claims for a formulation comprising tenofovir disoproxil fumarate, emtricitabine and a non-nucleoside reverse transcriptase inhibitor (NNRTI) and claims for a combination of such ingredients was not eligible for listing on the Patent Register against its new drug submission for Gilead's COMPLERA. COMPLERA contains tenofovir disoproxil fumarate, emtricitabine and rilpivirine, an NNRTI. The Minister held the patent was ineligible for listing as the patent referenced NNRTIs as a class without specifying rilpivirine. The Federal Court held that the eligibility should be considered pursuant to section 4(2)(b) of the Regulations as containing a claim to a formulation rather than combination claims. The Court, relying on Bayer Inc v Canada (Minister of Health), 2010 FCA 161 (leave to appeal refused, SCC Case No. 33845), and Purdue Pharma v Canada (Attorney General), 2011 FCA 132, held that product specificity had not been met as the claimed formulation and the approved formulation did not match precisely.

The Court of Appeal found that the Federal Court erred in deciding that eligibility depended upon the requirements of section 4(2)(b) (eligibility requirements for a patent containing a claim for the formulation) of the Regulations, rather than section 4(2)(a) (eligibility requirements for a patent containing a claim for the medicinal ingredient). The Court nevertheless dismissed the appeal, finding that the product specificity requirement also applies under section 4(2)(a) and this requirement was not met as the patent claims did not make "specific reference" to the medicinal ingredient rilpirivine but only the broad class of compounds.

Gilead Sciences Canada Inc v Minister (Health), October 9, 2012.
Federal Court of Appeal decision — 2012 FCA 254.
Federal Court decision — 2012 FC 2.


New Court proceedings

Patented Medicines (Notice of Compliance) Regulations


diltiazem hydrochloride extended-release (TIAZAC XC)


Valeant Canada LP / Valeant Canada SEC and Valeant International Bermuda


The Minister of Health and Cobalt Pharmaceuticals Company

Date Commenced:

September 28, 2012

Court File No.:



Application for Order of prohibition until expiry of Patents Nos. 2,307,547 and 2,242,224. Cobalt alleges non-infringement and invalidity. Cobalt also asserts improper listing.


Other proceedings


Alnylam Europe AG and Alnylam Pharmaceuticals Inc


Tekmira Pharmaceuticals Corporation

Date Commenced:

September 27, 2012

Court File No.:



Patent infringement action regarding Patent No. 2,359,180, titled "Method and medicament for inhibiting the expression of a given gene"; the plaintiffs also seek a declaration that the patent is valid. Alnylam points to press releases announcing a target validation agreement with a third party.



olopatadine (PATANOL)


Apotex Inc


Alcon Canada Inc, Alcon Research Ltd, Kyowa Hakko Kirin Co Ltd, Alcon Pharmaceuticals Ltd, and Alcon Laboratories Inc

Date Commenced:

October 12, 2012

Court File No.:



Apotex seeks damages under a number of bases, including for conspiracy, alleging that Alcon improperly switched the market to another product in anticipation of Apotex's launch. Apotex alleges that Alcon used information obtained regarding Apotex's launch by listing and asserting a patent that was the subject of a proceeding under the Regulations (which was discontinued).


To check the status of Federal Court cases, please click here.


Follow @smartbiggar


Smart & Biggar/ Fetherstonhaugh is proud to have been recognized with four prestigious awards by the U.K. publication Managing Intellectual Property (MIP)
Read more »

Smart & Biggar/ Fetherstonhaugh named a leading firm in the 2012 edition of the PLC Cross-border Life Sciences Handbook
Read more »

Firm recognized in The International Who's Who of Life Sciences Lawyers 2012
Read more »

Smart & Biggar/ Fetherstonhaugh tops the rankings in The Best Lawyers in Canada®
Read more »

Gunars A. Gaikis, J. Christopher Robinson and Steven B. Garland named "Lawyers of the Year" by Best Lawyers
Read more »

Firm dominates in IAM Patent 1000 – The World's Leading Patent Practitioners 2012
Read more »

Firm recognized in PLC's IP in Business Transactions multi-jurisdictional guide
Read more »

Smart & Biggar/ Fetherstonhaugh dominates the rankings in IP law in the 2012 edition of The Canadian Legal Lexpert® Directory
Read more »

Firm achieves top
ranking in The International Who's Who of Patent Lawyers 2012
Read more »

Smart & Biggar tops the rankings in Chambers Global — The World's Leading Lawyers for Business – "A really great IP boutique"
Read more »

Smart & Biggar/ Fetherstonhaugh recognized as "the biggest and deepest IP shop in Canada" by Benchmark Litigation Canada 2012
Read more »

Smart & Biggar/ Fetherstonhaugh earns highest ranking in Managing Intellectual Property's 2012 patent survey
Read more »

Smart & Biggar/ Fetherstonhaugh achieves top ranking in The Lexpert/American Lawyer Guide to the Leading 500 Lawyers in Canada
Read more »

For more information or to request a copy of any decision, pleading or legislation, please contact:


The preceding is intended as a timely update on Canadian intellectual property and regulatory law of interest to the pharmaceutical industry. The contents of this newsletter are informational only and do not constitute legal or professional advice. To obtain such advice, please communicate with our offices directly. To join the Rx IP Update mailing list, be removed from the mailing list or make changes to contact information, please send an e-mail to rxip.update@smart-biggar.ca.

Smart & Biggar/Fetherstonhaugh

Ottawa   /   Toronto   /   Montreal   /   Vancouver