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Apotex not permitted to plead promise-based invalidity grounds in Ontario section 8 lansoprazole action

Authored byTierney GB Deluzio

This motion arose in the context of a section 8 action in which Apotex claims damages for delay in the issuance of its notice of compliance for its generic lansoprazole product (Takeda's PREVACID), due to prohibition applications commenced by Abbott and Takeda. Abbott and Takeda have pleaded patent infringement as a defence to the section 8 claim and have brought a counterclaim for patent infringement.  Apotex in turn has challenged the validity of Takeda’s patents.  As previously reported, the Ontario Superior Court of Justice (2017 ONSC 2348) dismissed a motion for summary judgment brought by Abbott and Takeda and ordered the matter to proceed to a damages trial, scheduled to commence in January 2019.

In the present motion, Justice Quigley dismissed Apotex's motion for leave to amend its statement of reply and defence to counterclaim: Apotex Inc v Abbott and Takeda, 2018 ONSC 5199. Apotex brought the motion following the striking down of the "promise doctrine" by the Supreme Court of Canada in AstraZeneca Canada Inc v Apotex Inc, 2017 SCC 36 [AstraZeneca] (see our article here). Apotex sought to raise new grounds of patent invalidity, premised on "overpromising" under overbreadth and insufficiency (section 27 of the Patent Act) and wilful misrepresentation and fraud (section 53 of the Patent Act).

In dismissing Apotex's motion, Justice Quigley relied on recent decisions of the Federal Court that have rejected the repackaging of promise-based pleadings as other grounds of patent invalidity, deferring to the Federal Court as a specialist bench in patent law. In his view, "[h]aving specifically overruled the Promise Doctrine as bad law, it is not evident and indeed it is counterintuitive that the Supreme Court [in AstraZeneca] intended that promise based arguments would simply be imported into claims of overbreadth or misrepresentation under those sections."

Regarding the allegation of wilful misrepresentation raised against Takeda, Justice Quigley accepted that a pleading could survive if the misrepresentation was a "promise," but found that Apotex's amendments did not satisfy the necessary elements of the cause of action under section 53. Justice Quigley went on to find that Apotex had merely recycled its promise-based allegations, failing to particularize any additional facts to support its claim of misrepresentation. Acknowledging the gravity of claims under section 53 and fraud allegations generally, Justice Quigley awarded Takeda elevated costs to compensate it for Apotex's improper and deficient section 53 fraud allegations. 

For more information, please contact a member of our Life Sciences — RxIP - Regulatory & Compliance group. 

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