A-228-03
2003 FCA 467
Genpharm Inc. (Appellant)
v.
Procter & Gamble Pharmaceuticals Canada, Inc. and The Procter & Gamble Company and The Minister of Health (Respondents)
Indexed as: Procter & Gamble Pharmaceuticals Canada, Inc. v. Canada (Minister of Health) (F.C.A.)
Federal Court of Appeal, Rothstein, Evans and Pelletier JJ.A.--Toronto, November 3; Ottawa, December 3, 2003.
Patents -- Practice -- Issue estoppel -- Even though patent submitted for inclusion on Patent Register after expiration of time limit set out in Patented Medicines (Notice of Compliance) Regulations, s. 4(5), appellant barred, by application of doctrine of issue estoppel (Evans J.A. dissenting on this point), from raising eligibility of patent for inclusion on Register as issue of eligibility was or could have been raised in prior litigation between same parties -- Date shown on face of patent conclusive as to date of issue.
Estoppel -- Doctrine of issue estoppel barring appellant from raising eligibility of patent for inclusion on Patent Register although patent not eligible for inclusion on Register as submitted after expiration of time limit -- Given that prohibition order issued in previous litigation, that decision must be taken to have implicitly determined that patent at issue eligible for inclusion on Patent Register -- Parties same, that decision final -- Material facts available at time of first litigation -- Issue estoppel may be invoked by either party -- No "special circumstances" herein to justify exercise of discretion not to apply doctrine of issue estoppel.
Procter & Gamble Pharmaceuticals Canada Inc. and The Procter & Gamble Company (P&G) launched a prohibition application with respect to patent number 1338376 (the patent). A motions judge of the Trial Division dismissed the motion brought by the appellant to dismiss that application. This was an appeal from that decision.
The patent bore on its face an issue date of June 11, 1996. However, it was not submitted for inclusion on the Patent Register until July 17, 1996, after the expiration of the 30-day time limit set out in subsection 4(5) of the Patented Medicines (Notice of Compliance) Regulations. The appellant submitted that the patent was thus not eligible for inclusion on the Patent Register and P&G's prohibition application must therefore be dismissed. P&G submitted that the doctrine of issue estoppel barred the appellant from raising the eligibility of the patent for inclusion on the Patent Register.
Held (Evans J.A. dissenting), the appeal should be dismissed.
Per Rothstein J.A.: The issue date is the date shown on the face of the patent. In this case, that date was June 11, 1996. It was not open to the Motions Judge to go behind what was stated on the face of the patent. The patent should therefore not be eligible for inclusion on the Patent Register.
However, the question of the eligibility of the patent for inclusion on the Patent Register was res judicata in that it was subject to the doctrine of issue estoppel. In prior litigation between the same parties, that issue was or could have been raised. There was no doubt that the parties were the same and that the decision was final. The only issue herein was whether the same question was decided in the prior litigation. The test is "whether the determination on which it is sought to found the estoppel is `so fundamental' to the substantive decision that the latter cannot stand without the former". Since the patent had to be included on the Patent Register in order to ground the prohibition application that issued in the previous litigation, for the purposes of issue estoppel in these proceedings, that decision must be taken to have implicitly determined that the patent was eligible for inclusion on the Patent Register. All the material facts were known by the appellant at the time of the first litigation. The argument that the doctrine of issue estoppel can only be used by a defendant or respondent to bar a plaintiff's or an applicant's action or application was without merit. The doctrine of issue estoppel can be invoked by either party. The fact that the appellant was not allowed to raise the issue of eligibility in the prior proceedings on procedural grounds did not prevent the application of issue estoppel. The Court has a very limited discretion to refuse to apply issue estoppel. Earlier case law limited such discretion to "special circumstances". There were no "special circumstances" justifying the exercise of discretion not to apply the doctrine of issue estoppel. Nor did Genpharm suggest any public policy considerations that should override the application of the doctrine of issue estoppel.
Per Evans J.A. (dissenting): the date of issue stated on the patent was conclusive. Since more than 30 days had elapsed between the date of issue and its entry on the Patent Register, P&G's prohibition application could not succeed.
While the facts of this case brought it within the parameters of issue estoppel, the Court should have exercised its discretion to decline to apply it. On the facts of this case, it would be unfair to the appellant and contrary to the public interest to prevent Genpharm from raising the eligibility of P&G's patent to be listed on the Register as a result of the delay in listing it. First the eligibility of the patent to be included on the register has never in fact been adjudicated. Second, the consequences of holding Genpharm estopped may be to prevent it from getting on the market with its medicine, which may or may not infringe P&G's patent. Third, this litigation has both public law and public interest aspects, which require that consideration of the application of the issue estoppel doctrine not be limited to its impact on the private rights of the parties. The Regulations represent the Government's view of how the balance should be struck between the protection of patentees' rights and the public interest in the encouragement of research on the one hand, and the public interest in competition and cheaper medicines on the other.
There was also a public interest in the integrity of the Patent Register, upon which second persons rely. To apply issue estoppel herein would derogate from this interest because the result would be that, while the patent has been validly listed on the Register as far as Genpharm's medicine is concerned, it is not validly listed as far as other medicines and other second persons are concerned.
The argument that not to apply issue estoppel herein would impugn the integrity of the administration of justice by bringing into question the prohibition granted in the first proceeding between these parties in respect of the patent was without merit. First the issue has never been the subject of adjudication, as it was only deemed to have been decided because it could have been raised in the first proceeding. This form of estoppel was thus of the weaker variety. Second, to allow Genpharm to raise an issue that would defeat P&G's application for a prohibition would not call into question the correctness of the decision of McKeown J. to grant an order of prohibition on the basis of the material that he thought it appropriate to consider. Nor was the Court persuaded that, since the issue that Genpharm wished to raise was itself of a very technical nature, it was not unfair to apply the doctrine of issue estoppel to prevent it from being raised. The Regulations are rife with technicality. Nonetheless, the Regulations carefully define the circumstances in which first persons are entitled to the special protection that they afford to patent holders, and in which second persons are precluded from marketing a cheaper, safe and effective competing medicine. They define the balance between the public interests in encouraging innovation on the one hand, and ensuring competition to keep down the cost of pharmaceuticals on the other. It is not for a court to treat any of the provisions of the Regulations as of little or no consequence in this endeavour.
On the facts of this case, the public interest in the finality of litigation and in the integrity of adjudication was outweighed by the public law nature of litigation under the Regulations and the statutory regime that they create, the differential impact of the proceedings on the parties, the public interest in the integrity of the Patent Register, and the particular circumstances in which Genpharm fell within the general issue estoppel rule.
statutes and regulations judicially
considered
Patent Act, R.S.C., 1985, c. P-4, s. 43 (as am. by R.S.C., 1985 (3rd Supp.), c. 33, s. 16).
| Patented Medicines (Notice of Compliance) Regulations, SOR/93-133, ss. 4(4) (as am. by SOR/98-166, s. 3), (5), 6(5)(a) (as enacted idem, s. 5). |
| Trade Marks Act, R.S.C. 1970, c. T-10, s. 44. |
cases judicially considered
applied:
Hoystead v. Commissioners of Taxation, [1926] A.C. 155 (P.C.); Fidelitas Shipping Co. Ltd. v. V/O Exportchleb, [1965] 2 All E.R. 4 (C.A.).
considered:
Procter & Gamble Pharmaceuticals Canada, Inc. v. Canada (Minister of Health) (2001), 15 C.P.R. (4th) 496; 213 F.T.R. 101 (F.C.T.D.); affd [2003] 1 F.C. 402; 216 D.L.R. (4th) 376; 20 C.P.R. (4th) 1; 291 N.R. 339 (C.A.); Toronto (City) v. C.U.P.E., Local 79, [2003] 3 S.C.R. 77; (2003), 232 D.L.R. (4th) 385; 311 N.R. 201; British Columbia (Minister of Forests) v. Bugbusters Pest Management Inc. (1998), 159 D.L.R. (4th) 50; 107 B.C.A.C. 191; 50 B.C.L.R. (3d) 1; 7 Admin. L.R. (3d) 209; 19 C.P.C. (4th) 1 (C.A.); Apotex Inc. v. Merck & Co., [2003] 1 F.C. 242; (2002), 214 D.L.R. (4th) 429; 19 C.P.R. (4th) 163; 291 N.R. 96 (C.A.); Del Zotto v. Canada, [1994] 2 F.C. 640; [1994] 1 C.T.C. 254; (1994), 94 DTC 6170; 71 F.T.R. 1 (T.D.); Molson Companies Ltd. v. Halter (1976), 28 C.P.R. (2d) 158 (F.C.T.D.).
referred to:
General Motors of Canada Ltd. v. Naken et al., [1983] 1 S.C.R. 72; (1983), 144 D.L.R. (3d) 385; 22 C.P.C. 138; 46 N.R. 139; Angle v. M.N.R., [1975] 2 S.C.R. 248; (1974), 47 D.L.R. (3d) 544; 74 DTC 6278; 2 N.R. 397; Carl Zeiss Stiftung v. Rayner & Keeler Ltd. (No. 2), [1967] 1 A.C. 853 (H.L.); Danyluk v. Ainsworth Technologies Inc., [2001] 2 S.C.R. 460; (2001), 201 D.L.R. (4th) 193; 34 Admin. L.R. (3d) 163; 10 C.C.E.L. (3d) 1; 7 C.P.C. (5th) 199; 272 N.R. 1; 149 O.A.C. 1; Spens v. Inland Revenue Comrs., [1970] 3 All ER 295 (Ch. D.); Grandview (Town of) v. Doering, [1976] 2 S.C.R. 621; (1975), 61 D.L.R. (3d) 455; [1976] 1 W.W.R. 388; 7 N.R. 299; Merck & Co. v. Apotex Inc. (1999), 5 C.P.R. (4th) 363; 293 N.R. 316 (F.C.A.); Apotex Inc. v. Canada (Attorney General), [1997] 1 F.C. 518; (1996), 71 C.P.R. (3d) 166; 123 F.T.R. 161 (T.D.); Richter Gedeon Vegyészeti Gyar RT v. Apotex Inc. (2002), 23 C.P.R. (4th) 478; 226 F.T.R. 282 (F.C.T.D.); Henderson v. Henderson (1843), 3 Hare 100; 67 E.R. 313; Minott v. O'Shanter Development Co. (1999), 42 O.R. (3d) 321; 168 D.L.R. (4th) 270; 40 C.C.E.L. (2d) 1; 117 O.A.C. 1 (C.A.); Merck Frosst Canada Inc. v. Canada (Minister of National Health and Welfare), [1998] 2 S.C.R. 193; (1998), 161 D.L.R. (4th) 47; 80 C.P.R. (3d) 368; 222 N.R. 299.
authors cited
Lange, Donald. The Doctrine of Res Judicata in Canada. Toronto: Butterworths, 2000.
APPEAL from a Trial Division decision ([2003] 4 F.C. 445; (2003), 26 C.P.R. (4th) 180; 233 F.T.R. 189) dismissing a motion brought by Genpharm Inc. seeking the dismissal of a prohibition application launched by the respondents. Appeal dismissed.
appearances:
Roger T. Hughes, Q.C. and Kamleh J. Nicola for appellant.
Ronald E. Dimock and Sheila R. Block for respondents.
solicitors of record:
Sim, Hughes, Ashton & McKay LLP, Toronto, for appellant.
Dimock Stratton Clarizio LLP, Toronto, for respondents.
The following are the reasons for judgment rendered in English by
[1]Rothstein J.A.: This is an appeal from a May 12, 2003, order of a motions judge of the Trial Division (as it then was) [[2003] 4 F.C. 445] which dismissed a motion brought by Genpharm Inc. under paragraph 6(5)(a) [as enacted by SOR/98-166, s. 5] of the Patented Medicines (Notice of Compliance) Regulations, SOR/93-133 as amended. Genpharm's motion sought the dismissal of a prohibition application launched by Procter & Gamble Pharmaceuticals Canada, Inc. and The Procter & Gamble Company (P&G).
[2]Subsection 6(5) of the Regulations provides:
6. . . .
(5) In a proceeding in respect of an application under subsection (1), the court may, on the motion of a second person, dismiss the application
(a) if the court is satisfied that the patents at issue are not eligible for inclusion on the register or are irrelevant to the dosage form, strength and route of administration of the drug for which the second person has filed a submission for a notice of compliance; or
(b) on the ground that the application is redundant, scandalous, frivolous or vexatious or is otherwise an abuse of process.
[3]Genpharm submits that the patent at issue, patent number 1338376 (the 376 patent), was issued on June 11, 1996 as a reissue of patent number 1282702, but was not submitted for inclusion on the Patent Register maintained by the Minister of Health until July 17, 1996. Genpharm says that subsection 4(5) of the Regulations (as it read in 1996) required P&G to submit the 376 patent to the Minister within 30 days of its issue by the Patent Commissioner. As the 376 patent was submitted more than 30 days after its issue, Genpharm argues it is not eligible for inclusion on the Patent Register. Because a prohibition application can only be grounded on a patent list submitted to the Minister and because the 376 patent was ineligible for inclusion on such a patent list, Genpharm says P&G's prohibition application must be dismissed.
DECISION OF THE MOTIONS JUDGE
[4]The Motions Judge determined that:
1. under subsection 4(4) of the Regulations (as it read effective March 11, 1998), a patent is not eligible for inclusion on the Patent Register maintained by the Minister of Health if it was issued more than 30 days before its registration;
2. it was not necessary to determine exactly when the 376 patent was issued;
3. the patent was registered within 30 days of the date it was mailed to P&G; and
4. in order to strike an application under paragraph 6(5)(a), it should be plain and obvious that the patent is not eligible for inclusion on the Register. It was not plain and obvious that the 376 patent was ineligible for inclusion on the Register, but even on a lower standard, the Judge was not satisfied that Genpharm had established that the 376 patent was not submitted for inclusion on the Register within 30 days of its date of issue.
[5]As a result, Genpharm's motion to dismiss P&G's prohibition application under paragraph 6(5)(a) was dismissed.
ANALYSIS
[6]P&G has submitted that the doctrine of issue estoppel bars Genpharm from raising the eligibility of the 376 patent for inclusion on the Minister's Patent Register in these proceedings. I agree and, for that reason only, find that Genpharm's motion must be dismissed. However, in order to clarify one aspect of the decision of the Motions Judge, I think it is desirable to first comment on that issue.
| The Issue Date |
[7]In order for a new patent to be included on the Patent Register after a submission for a notice of compliance has been made, the patent must be submitted to the Minister within 30 days of its issuance. Although the Motions Judge only referred to the current subsection 4(4) [as am. by SOR/98-166, s. 3], not the former subsection 4(5) that was applicable at the relevant time, nothing turns on the differences between the two versions of the provision for purposes of this case. Subsection 4(4) of the Regulations currently provides:
4. . . .
(4) A first person may, after the date of filing of a submission for a notice of compliance and within 30 days after the issuance of a patent that was issued on the basis of an application that has a filing date that precedes the date of filing of the submission, submit a patent list, or an amendment to an existing patent list, that includes the information referred to in subsection (2).
while former subsection 4(5) provided:
4. . . .
(5) At any time after the date of filing of the submission for a notice of compliance, the first person may submit a patent list that includes, or amend an existing patent list to include, the information referred to in subsection (2) in respect of a patent that issued within the previous 30 days on the basis of an application filed before the date of filing of the submission.
[8]There is no dispute that the 376 patent was submitted to the Minister on July 17, 1996. The only question is when it was issued.
[9]Section 43 of the Patent Act [R.S.C., 1985, c. P-4 (as am. by R.S.C., 1985 (3rd Supp.), c. 33, s. 16)], as it read at the relevant time, provided that every patent granted under the Act shall be issued under the signature of the Commissioner and the seal of the Patent Office and shall bear on its face the date on which it is granted and issued. Section 43 stated:
43. Subject to section 46, every patent granted under this Act shall be issued under the signature of the Commissioner and the seal of the Patent Office, shall bear on its face the date of the filing of the application for the patent, the date on which the application became open to the inspection of the public under section 10 and the date on which the patent is granted and issued and it shall thereafter, in the absence of any evidence to the contrary, be valid and avail the grantee and the legal representatives of the grantee for the term mentioned in section 44 or 45, whichever is applicable.
[10]The 376 patent bears on its face an issue date of June 11, 1996. Section 43 prescribed that the issue date be shown on the face of the patent. In my opinion, the date of issue shown on the face of the patent is conclusive.
[11]The learned Motions Judge was troubled by a concern that it was not clear when the patent certificates bearing the name of the new Patent Commissioner were delivered to the Patent Office or when the signature of the Commissioner and the seal of the Patent Office were affixed to the 376 patent. This concern arose out of a letter written by the Patent Office on June 27, 1996. The letter states:
Re: June 11 1996 Patent Issue
Mr. Anthony McDonough has recently been appointed Commissioner of Patents. Therefore new patent grant certificates had to be printed. Due to printing delays, June 11 1996 patents were mailed on June 18 1996. We are sorry for any inconvenience this delay may have caused.
It appears that the Motions Judge was of the view that because of printing delays, the signature of the Patent Commissioner and the seal of the Patent Office may not have been affixed to the 376 patent until June 18, 1996. On that basis, Genpharm failed to satisfy her that the 376 patent was not submitted to the Minister for inclusion on the Patent Register within 30 days of its issue.
[12]As I have stated, as a matter of law, the date on which the 376 patent was issued was the date shown on the face of the patent. It was not open to the Motions Judge to go behind what is stated on the face of the patent.
[13]If, in fact, the patent was issued on a date other than June 11, 1996, then the date shown on the face of the patent was in error. However, if so, the proper remedy was for P&G to request the Patent Office to correct the error.
[14]Any other interpretation would create uncertainty with respect to the issue date, something section 43 was intended to avoid. Under the regime applicable to patents applied for before October 1, 1989, the issue date was of great significance because the duration of such patents was 17 years from the date of issue. That is no longer the case for patents applied for on or after October 1, 1989, in which case the duration of the patent is 20 years from the date of filing of the application. However, patents applied for before October 1, 1989 are still extant and, therefore, the issue date remains significant for those patents. As well, there are undoubtedly other reasons, including the provisions of subsection 4(5) (now 4(4)) of the Regulations, that the issue date of a patent remains significant.
[15]The point is that Parliament intended section 43 to create certainty regarding the issue date by providing that, as a matter of law, the issue date is the date shown on the face of the patent. In this case, that date was June 11, 1996.
| Issue Estoppel |
[16]P&G submits that the question of whether the 376 patent is eligible for inclusion on the Patent Register is res judicata in that it is subject to the doctrine of issue estoppel. P&G says that in prior litigation between the same parties (Procter & Gamble Pharmaceuticals Canada, Inc. v. Canada (Minister of Health) (2001), 15 C.P.R. (4th) 496 (F.C.T.D.); affd by [2003] 1 F.C. 402 (C.A.)), the issue of the eligibility of the 376 patent for inclusion on the Patent Register was or could have been raised. The prior proceeding involved a different proposed use for Genpharm's product. P&G says that it is not now open to Genpharm to raise this issue in these proceedings.
[17]There are three requirements for issue estoppel:
| 1. that the same question has been decided; |
| 2. that the judicial decision which is said to create the estoppel was final; and, |
| 3. that the parties to the judicial decision or their privies were the same persons as the parties to the proceedings in which the estoppel is raised or their privies. |
See Angle v. M.N.R., [1975] 2 S.C.R. 248, at page 254, quoting Lord Guest in Carl Zeiss Stiftung v. Rayner & Keeler Ltd. (No. 2), [1967] 1 A.C. 853 (H.L.), at page 935.
[18]There is no doubt that the parties to this appeal and the parties in the previous litigation are the same and that the previous judicial decision was final, as a prohibition order did in fact issue and an appeal of that order was dismissed by this Court. The issue then is whether the same question was decided in the prior litigation.
[19]Genpharm makes a number of submissions, none of which persuade me issue estoppel should not apply in this case.
[20]First, Genpharm says that the reasons for judgment in the previous litigation did not explicitly address the eligibility issue raised in these proceedings and that the issue was, therefore, not previously decided. However, issue estoppel "extends to the material facts and the conclusions of law or of mixed fact and law (`the questions') that were necessarily (even if not explicitly) determined in the earlier proceedings" (Danyluk v. Ainsworth Technologies Inc., [2001] 2 S.C.R. 460, at paragraph 24 (emphasis added)). The test is "whether the determination on which it is sought to found the estoppel is `so fundamental' to the substantive decision that the latter cannot stand without the former" (Angle, at page 255, quoting Spens v. Inland Revenue Comrs., [1970] 3 All ER 295 (Ch. D.), at page 301).
[21]A patent must be included on the Patent Register maintained by the Minister of Health in order to ground a prohibition application. That is fundamental to the issue of a prohibition order under the Regulations. Given that a prohibition order issued in the previous litigation, for purposes of issue estoppel in these proceedings, that decision must be taken to have implicitly determined that the 376 patent was eligible for inclusion on the Patent Register.
[22]Second, Genpharm submits that it did not know of the June 18, 1996, letter of the Patent Office explaining the late mailing of June 11, 1996, patents. I believe an exception to issue estoppel might be available where facts material to the issue could not have been discovered with reasonable diligence at the time of the first litigation. See Henderson v. Henderson (1843), 3 Hare 100, at pages 114-115; 67 E.R. 313, at pages 319-320.
[23]That is not the case here. Genpharm was aware of the 376 patent and the issue date shown on its face. As well, the Form IV patent list, the document on which P&G submitted the 376 patent to the Minister of Health for inclusion on the Patent Register, is a public document that shows on its face the date on which it was submitted. These were the only facts Genpharm needed to challenge the 376 patent's eligibility to be included on the Patent Register.
[24]This case is about Genpharm not raising an issue in the first litigation, even though it had the necessary facts at the relevant time. I think Lord Shaw in Hoystead v. Commissioners of Taxation, [1926] A.C. 155 (P.C.), at page 166, set out the law applicable to the circumstances here:
Thirdly, the same principle--namely, that of setting to rest rights of litigants, applies to the case where a point, fundamental to the decision, taken or assumed by the plaintiff and traversable by the defendant, has not been traversed. In that case also a defendant is bound by the judgment, although it may be true enough that subsequent light or ingenuity might suggest some traverse which had not been taken. The same principle of setting parties' rights to rest applies and estoppel occurs.
[25]Third, Genpharm argues that the doctrine of issue estoppel can only be used by a defendant or respondent to bar a plaintiff's or applicant's action or application. It cannot be used to bar a defendant or respondent from raising a defence that it failed to raise in an earlier proceeding. I do not agree. The doctrine of issue estoppel may be invoked by either party. In Fidelitas Shipping Co. Ltd. v. V/O Exportchleb, [1965] 2 All E.R. 4 (C.A.), at page 9, Lord Denning stated:
But within one cause of action, there may be several issues raised which are necessary for the determination of the whole case. The rule then is that, once an issue has been raised and distinctly determined between the parties, then, as a general rule, neither party can be allowed to fight that issue all over again. The same issue cannot be raised by either of them again in the same or subsequent proceedings except in special circumstances. . . . And within one issue, there may be several points available which go to aid one party or the other in his efforts to secure a determination of the issue in his favour. The rule then is that each party must use reasonable diligence to bring forward every point which he thinks would help him. If he omits to raise any particular point, from negligence, inadvertence, or even accident (which would or might have decided the issue in his favour), he may find himself shut out from raising that point again, at any rate in any case where the self-same issue arises in the same or subsequent proceedings [Emphasis added].
Lord Denning's statement has been approved not only by Ritchie J., writing for the majority of the Supreme Court, in Grandview (Town of) v. Doering, [1976] 2 S.C.R. 621, at page 637 but by this Court in Merck & Co. v. Apotex Inc. (1999), 5 C.P.R. (4th) 363 (F.C.A.), at paragraph 13 and by the Trial Division (as it then was) in Apotex Inc. v. Canada (Attorney General), [1997] 1 F.C. 518, at page 542 and Richter Gedeon Vegyészeti Gyar RT v. Apotex Inc. (2002), 23 C.P.R. (4th) 478 (F.C.T.D.), at paragraph 21. It is, therefore, open to P&G to plead that Genpharm is estopped from arguing that the 376 patent was not eligible for inclusion on the Patent Register.
[26]Finally, Genpharm argues that it, in fact, did attempt to argue, albeit on different grounds, that the 376 patent should not be included on the Patent Register in the prior litigation, but that it was precluded from doing so on a procedural ground. Therefore, it says, it should not now be estopped from raising the issue in these proceedings. In ruling that the issue of inclusion of the 376 patent on the Patent Register could not be raised in the prior litigation, McKeown J. stated:
The ruling is that the argument by the Respondents that the patent should not be on the patent list, cannot be brought at this late stage, one week before the hearing.
The Respondents could have notified the Applicants at a much earlier time that this argument was going to be made. The argument could have been made after the amended Regulations took effect and was available 22 months ago (Procter & Gamble Pharmaceuticals, Inc. v. Canada (Minister of Health) (28 August 2001), Toronto T-1825-99/T-1970-99 (T.D.)).
[27]The fact that Genpharm was not allowed to raise the issue in the prior proceedings because it waited until one week before the hearing to attempt to do so does not prevent the application of issue estoppel. On the contrary, it is further evidence that Genpharm could have, but failed to, raise the eligibility issue in a timely manner in the first litigation.
[28]Are there other grounds on which the Court should refuse to apply issue estoppel as a matter of discretion? There is no doubt such a discretion exists. However, in the context of court proceedings, as contrasted with proceedings of administrative tribunals, "such a discretion must be very limited in application" (see Binnie J. in Danyluk, at paragraph 62, quoting Estey J. in General Motors of Canada Ltd. v. Naken et al., [1983] 1 S.C.R. 72, at page 101). The limited application of such discretion is of very long standing. In earlier jurisprudence, the discretion not to apply the doctrines of res judicata was limited to "special circumstances" (see Henderson v. Henderson, supra, at page 115 (Hare), page 319 (E.R.)).
[29]While dealing with abuse of process, Arbour J. in Toronto (City) v. C.U.P.E., Local 79 (2003), 232 D.L.R. (4th) 385 (S.C.C.), cites examples of circumstances which I think might also justify the limited exercise of discretion not to apply the doctrine of issue estoppel in a court context: for example, when the first proceeding is tainted by fraud or dishonesty or where fresh new evidence previously unavailable conclusively impeaches the original result (paragraph 52). It may also be that fairness considerations could counsel the exercise of discretion. Arbour J. suggests that when the stakes in the original proceeding were too minor to generate a full and robust response, while the stakes in the subsequent proceeding are considerable, fairness might dictate the exercise of discretion (paragraph 53). There may be other examples that would justify the exercise of discretion not to apply the doctrine of issue estoppel. However, these other circumstances would still have to come within the narrow "special circumstances" exception.
[30]For example, I am prepared to accept that certain types of public policy considerations may be relevant to the question of whether a court should exercise its discretion not to apply the doctrine of issue estoppel. However, the public policy in question must be of substantial importance in order to override the public interest in the finality of litigation.
[31]In the circumstances of this case, we are not dealing with tainted proceedings or the unavailability of relevant evidence in the first proceeding. Nor has it been argued that the first proceeding was minor as compared to the second. Further, paragraph 6(5)(a) lists the specific grounds on which a motion to dismiss a prohibition application may be brought. It cannot reasonably be suggested that the question of the 376 patent's eligibility for inclusion on the Minister's Patent Register should not have been apparent to Genpharm at the time of the first proceeding.
[32]As to public policy, the litigation here, although brought under a public regulatory regime, i.e. the NOC Regulations promulgated under the Patent Act, is between two private parties. The Minister is named as a respondent, but she did not participate in the proceedings. Genpharm has not suggested any public policy considerations that should override the application of the doctrine of issue estoppel. In the absence of public policy arguments being raised by Genpharm, it would be inappropriate for the Court to engage in its own public policy analysis.
CONCLUSION
[33]I conclude that the question of the eligibility of the 376 patent to be included on the Patent Register of the Minister of Health for purposes of the Regulations is subject to the doctrine of issue estoppel and may not be raised in these proceedings.
[34]The appeal should be dismissed with costs.
Pelletier J.A.: I agree.
* * *
The following are the reasons for judgment rendered in English by
[35]Evans J.A. (dissenting): I have had the benefit of reading the reasons of Rothstein J.A. With respect, I do not agree that Genpharm is estopped from raising the eligibility of the 376 patent to be listed on the Patent Register.
[36]However, I agree with my colleague that, on the facts of this case, the date of issue stated on the patent is conclusive. Hence, since more than 30 days elapsed between the date of issue of the 376 patent and its entry on the Patent Register, P&G's application for an order of prohibition restraining the Minister from granting an NOC to Genpharm for its medicine, Gen-etidronate, cannot succeed. Accordingly, I would have allowed Genpharm's appeal.
[37]I accept that the facts of this case bring it within the general rule that a party in one proceeding is estopped from rasing an issue that it could and should have raised in a previous proceeding between the parties. However, I part company from Rothstein J.A. over the exercise of the Court's discretion to decline to apply the doctrine to this proceeding.
[38]As he notes, in Toronto (City) v. C.U.P.E., Local 79 (2003), 232 D.L.R. (4th) 385, at paragraph 52, the Supreme Court of Canada gave three examples of situations in which "relitigation will enhance, rather than impeach, the integrity of the judicial system". It did not decide that the list is exhaustive.
[39]I agree with the following statement about the role of judicial discretion by Finch J.A. (as he then was) in British Columbia (Minister of Forests) v. Bugbusters Pest Management Inc. (1998), 159 D.L.R. (4th) 50 (B.C.C.A.), at paragraph 32:
It must always be remembered that although the three requirements for issue estoppel must be satisfied before it can apply, the fact that they may be satisfied does not automatically give rise to its application. Issue estoppel is an equitable doctrine, and as can be seen from the cases, is closely related to abuse of process. The doctrine of issue estoppel is designed as an implement of justice, and a protection against injustice. It inevitably calls upon the exercise of a judicial discretion to achieve fairness according to the circumstances of each case.
[40]Similar sentiments are to be found in Minott v. O'Shanter Development Co. (1999), 42 O.R. (3d) 321 (C.A.), at page 340. And, more recently, when writing for this Court in Apotex Inc. v. Merck & Co., [2003] 1 F.C. 242 (C.A.), at paragraph 30, Stone J.A. said:
In determining whether justice will be done between the parties, the Court must as a final and most important factor, stand back and, taking into account the entirety of the circumstances, consider whether application of issue estoppel in the particular case would work an injustice.
[41]In my view, on the facts of this case it would be unfair to Genpharm and contrary to the public interest to prevent Genpharm from raising the eligibility of P&G's 376 patent to be listed on the Register as a result of the delay in listing it. Issue estoppel is a tool for ensuring the due administration of justice, not for frustrating it. The exercise of discretion enables the Court to fashion an appropriate response to a novel situation by electing not to apply the doctrine.
[42]The following factors persuade me that the decision of McKeown J. to grant an order of prohibition in the first proceeding does not estop Genpharm from arguing in this proceeding that prohibition should not be granted because the 376 patent was not included in the Register within the time required by paragraph 4(4) of the Regulations.
[43]First, the eligibility of the 376 patent to be included on the register has never in fact been adjudicated. Genpharm attempted to raise the issue in the first proceeding in the course of a motion brought under paragraph 6(5)(a) alleging that P&G's medicine had a different route of administration from Genpharm's. However, McKeown J. held that it was too late to raise this second ground. Given the discretionary nature of this decision, Genpharm had virtually no prospect of persuading this Court on appeal to reverse McKeown J.'s ruling.
[44]This is obviously not a case in which Genpharm has hidden in the weeds, holding back a defence for use in subsequent litigation. It seems to me unduly harsh to conclude that Genpharm's error in not promptly raising the eligibility defence in the first application for a prohibition not only caused it to lose in that proceeding, but potentially to lose in this one as well.
[45]Second, the consequences of holding Genpharm estopped may be to prevent it from getting on the market with its medicine, which may or may not infringe P&G's patent. This will be the case if Genpharm has no other defence to P&G's application for prohibition which, if granted, will prevent Genpharm from obtaining an NOC until P&G's 376 patent expires in 2008. On the other hand, if the paragraph 6(5)(a) motion is adjudicated on it merits and P&G loses, with the result that its application for prohibition will fail, P&G will still be able to obtain private law redress if it can prove that Genpharm's medicine infringes the 376 patent.
[46]Third, this litigation has both public law and public interest aspects which require that consideration of the application of the issue estoppel doctrine not be limited to its impact on the private rights of the parties. There is some authority for the proposition that issue estoppel does not apply to public law litigation, notably by McKeown J. in Del Zotto v. Canada, [1994] 2 F.C. 640 (T.D.), at page 644. However, in my view, the public law nature of the litigation is simply one of the factors to be weighed in the exercise of the Court's discretion. For further discussion, see Lange, The Doctrine of Res Judicata in Canada (Toronto: Butterworths, 2000), at pages 248-254.
[47]The form of the proceeding in this case, an application to prohibit the Minister of Health from issuing an NOC, is public law in nature; as in all applications for judicial review, the grant of relief is discretionary and is awarded in order to protect the public interest.
[48]Even though most NOC litigation is substantively between private parties and involves issues on which the Minister often takes no position, the Regulations constitute a public regime for regulating the marketing of new medicines. They represent the Government's view of how the balance should be struck between the protection of patentees' rights and the public interest in the encouragement of research on the one hand, and the public interest in competition and cheaper medicines on the other.
[49]Perhaps the most important feature of the regulatory scheme is that it provides applicants for prohibition with an automatic stay without having to prove a prima facie case of patent infringement by the second person. Indeed, courts do not normally grant interlocutory injunctions to patent holders who bring infringement proceedings to protect their private law rights because it is difficult for them to show that irreparable harm is likely to be caused by patent infringement, a wrong for which an award of damages or an accounting of profits are generally adequate compensation.
[50]In addition, if the Minister is prohibited from issuing an NOC, the Regulations keep the second person's medicine off the market for the life of the patent, without the procedural protection provided to a defendant in an action for patent infringement. The second person is thus deprived of the opportunity to market the drug, subject to potential liability to the patent holder for infringement.
[51]The Regulations have been described as creating "a draconian regime": Merck Frosst Canada Inc. v. Canada (Minister of National Health and Welfare), [1998] 2 S.C.R. 193, at paragraph 33. Therefore, before granting the extraordinary statutory relief provided by the Regulations, courts properly insist that first persons clearly establish that they have met each and every statutory requirement.
[52]There is also a public interest in the integrity of the Patent Register, upon which second persons rely. To apply issue estoppel in this case would derogate from this interest because the result would be that, while the 376 patent has been validly listed on the Register as far as Genpharm's medicine is concerned, it is not validly listed as far as other medicines and other second persons are concerned.
[53]I note by way of analogy that in Molson Companies Ltd. v. Halter (1976), 28 C.P.R. (2d) 158 (F.C.T.D.), Gibson J. held that issue estoppel did not apply to proceedings under section 44 of the Trade Marks Act [R.S.C. 1970, c. T-10], because of the public interest in the integrity of the trade-marks register. I do not go this far, but would treat the integrity of the Register as one aspect of the public interest that must be weighed against the public interest in the finality of litigation and the integrity of the justice system.
[54]It may also be suggested that not to apply issue estoppel in this case would be inconsistent with Toronto (City) v. C.U.P.E., Local 79, supra, where it was said that the abuse of process doctrine should be invoked to protect the integrity of the administration of justice by preventing the re-litigation of issues that had already been adjudicated. The argument is that not to apply issue estoppel in the present case would impugn the integrity of the administration of justice by bringing into question the prohibition granted by McKeown J. in the first proceeding between these parties in respect of the 376 patent.
[55]I do not agree. First and most important, the issue which Genpharm is said to be estopped from raising, namely whether the 376 patent was validly entered on the Patent Register, has never been the subject of adjudication. It is only deemed to have been decided between these parties because it is an issue that could have been raised in the first proceeding, and the order made in that proceeding is incompatible with the ineligibility of the 376 patent to be listed on the Register.
[56]The form of estoppel invoked here is thus of the weaker variety. The general rule that a person is estopped from raising an issue that it could and should have raised in the earlier proceeding is, in part at least, normative. To permit Genpharm to raise in this proceeding an issue that it failed to raise in time in the first proceeding would in my view involve only a minor infringement of the integrity of that proceeding. In contrast, in the Toronto (City) case, the union wanted to re-litigate, on the same evidence and on the same law, the very result reached in the criminal proceeding, namely whether the employee had committed the offences of which he had been found guilty.
[57]Second, to allow Genpharm to raise an issue that would defeat P&G's application for a prohibition would not call into question the correctness of the decision of McKeown J. to grant an order of prohibition on the basis of the material that he thought it appropriate to consider. It would thus be a less serious attack on the integrity of adjudication than that considered in the Toronto (City) case. On the other hand, the result of denying P&G an order of prohibition in this case on the basis of an argument that McKeown J. refused to hear would be that his order was, in effect, superseded.
[58]Nor am I persuaded that, since the issue that Genpharm wishes to raise is itself of a very technical nature, it is not unfair to apply the doctrine of issue estoppel to prevent it from being raised. These Regulations are rife with technicality. They make the rule against perpetuities seem positively intuitive.
[59]Nonetheless, the Regulations' various provisions carefully define the circumstances in which first persons are entitled to the special protection that they afford to patent holders, and in which second persons are precluded from marketing a cheaper, safe and effective competing medicine. The Regulations represent the legislator's view of how the balance should be struck between the public interests in encouraging innovation on the one hand, and ensuring competition to keep down the cost of pharmaceuticals on the other. It is not for a court to treat any of the provisions of the Regulations as of little or no consequence in this endeavour.
[60]For these reasons, I have concluded that, on the facts of this case, the public interest in the finality of litigation and in the integrity of adjudication is outweighed by the public law nature of litigation under the Regulations and the statutory regime that they create, the differential impact of the proceedings on the parties, the public interest in the integrity of the Patent Register, and the particular circumstances in which Genpharm falls within the general issue estoppel rule.
[61]Accordingly, I would have allowed Genpharm's appeal with costs, which would effectively have meant that P&G's application for a prohibition must fail.