Approvability of generic NOC satisfies imminence criteria in quia timet proceedings

The Federal Court in Gilead Sciences Inc v Teva Canada Limited, 2016 FC 336 has clarified the law with respect to the imminence requirement of future patent infringement claims: even though infringement may be temporally distant, if the harm can be shown to be substantially likely to occur, that is sufficient to sustain a quia timet legal proceeding.

Background

The history giving rise to this motion involved two prohibition applications and two actions. In 2015, Gilead Sciences Inc (“Gilead”) brought an action for past, current, and future infringement of Canadian Patents 2,261,619 (the “619 Patent”) and 2,298,059 (the “059 Patent”) against Teva Canada Limited (“Teva”). The patents related to Gilead’s products TRUVADA®, ATRIPLA® and VIREAD®. 

These two patents had been previously litigated between these parties under the Patented Medicines (Notice of Compliance) Regulations.  In respect of the 619 Patent, the Federal Court had prohibited the Minister of Health from issuing Notices of Compliance (“NOCs”) to Teva in respect of generic versions of Gilead’s above-mentioned products until after the patent’s expiry on July 25, 2017.  The Court had dismissed Gilead’s applications in respect of the 059 Patent.  The 059 Patent will expire in July 2018.

While the prohibition proceedings under the Regulations were still ongoing, in 2012, Teva brought an impeachment action in respect of both the 619 and 059 Patents.  Teva later discontinued the action in respect of the 059 Patent, but maintained the action in respect of the 619 Patent.  In their statement of claim, Teva alleged that they wished to import, make, use and sell in Canada a generic version of Gilead’s drugs. The action is scheduled to be heard in November 2016.

Teva’s Motion to Strike Gilead’s Quia Timet Claim

Teva brought a motion to strike Gilead’s Statement of Claim in their 2015 infringement action.¹ One of the bases for Teva’s motion to strike was that Gilead’s claim for future infringement did not meet the imminence requirement for sustaining a quia timet infringement proceeding.

Connaught Laboratories,² the leading case on future patent infringement actions, held that quia timet infringement actions must meet the following criteria:

• The statement of claim must allege a deliberate expressed intention to engage in activity the result of which would raise a strong possibility of infringement;
• The activity to be engaged in must be alleged to be imminent;
• The resulting damage to the plaintiff must be alleged to be very substantial if not irreparable; and
• The facts plead must be cogent, precise and material.

In assessing Teva’s argument, Prothonotary Tabib reviewed the case law, including her recent decision in Teva v Novartis.³ In that case, Novartis’ quia timet claim failed because it did not allege that Teva’s application for an NOC had been approved and/or was on “patent hold” awaiting the resolution of the prohibition proceedings or the expiration of the patent. In accordance with Pfizer Research and AstraZeneca, which held the temporal aspect of imminence is not met when neither party has control over when, or if, the government would issue regulatory approval, the allegation of imminent infringement was therefore speculative.⁴

However, Prothonotary Tabib distinguished the case before her from the previous case law.  Relying on two alternative bases, Prothonotary Tabib declined to strike Gilead’s claim in respect of Teva’s future infringement of the 059 Patent.  First, the Court granted Gilead relief from the implied undertaking rule, such that Gilead could rely on facts obtained in Teva’s impeachment action to show that Teva’s submission was approvable. Second, the Court held that – even if Gilead could not rely upon the information obtained in the impeachment proceeding – the circumstances supported an inference that Teva’s submission was approvable.  In particular, the court relied on the facts that: (i) Teva’s ANDS was submitted in 2012; (ii) Teva was proceeding with the impeachment action in respect of the 619 Patent, and (iii) Teva intended to come to market upon expiry or a declaration of invalidity of the 619 Patent.⁵ Justice Barnes agreed. As Teva provided no evidence to the contrary, the inference was unassailable.⁶

In upholding Prothonotary Tabib’s decision, Justice Barnes acknowledged Teva’s argument that the issuance of Teva’s NOC was not “guaranteed”.  However, Justice Barnes held that this future event was “sufficiently likely” and, thus, in combination with Teva’s clear intention to come to market with its generic products, this satisfied the “imminence” requirement. Teva would very likely come to market at least upon the expiry of the 619 Patent on July 25, 2017.

Although Teva argued that July 2017 was too removed in time to satisfy the imminence criteria, both Prothonotary Tabib and Justice Barnes rejected Teva’s argument. As stated by Prothotary Tabib:

The purpose of a quia timet action is to stop an event before it happens.  Given that streamlined infringement actions may now be heard and determined in two years, it is neither premature nor pointless to institute such an action 22 months before the occurrence of the event to be avoided.  To ask that a plaintiff wait until the event is so imminent that there is not enough time to reasonably bring the proceeding to conclusion would be to doom such actions to failure to achieve their goal or to impose unreasonably tight schedules on the parties and the Court.⁷

In this respect, Justice Barnes noted that the temporal component of imminence, although relevant, is not determinative.⁸ Instead, the Court held that the more determinative aspect of imminence is the high degree of probability harm will in fact occur. Thus, where the likelihood of future harm is high, temporal imminence appears to be a subordinate consideration.⁹

The full decision of Justice Barnes may be found here 2016 FC 336. The decision below is cited as 2016 FC 31.