Valeant Canada LP v. Cobalt Pharmaceuticals – 2013 FC 1254

Cobalt moved, pursuant to s. 6(5)(b) of the PM(NOC) Regulations, to dismiss as an abuse of process part of Valeant’s application to prohibit the Minister of Health from issuing a NOC for a generic version of the drug diltiazem covered under Canadian Patent No. 2,242,224 (the ‘224 Patent).

The Court held that Valeant’s application is not an abuse of process, and dismissed Cobalt’s motion. [2]

At issue was construction of claims 35 and 36 of the ‘224 Patent, and in particular whether a claimed surfactant must be located in the active layer of the formulation. In a previous proceeding under the PM(NOC) Regulations, 2005 FC 1424, Justice Noël construed claims 35 and 36 of the ‘224 Patent as requiring that the surfactant be located in the active layer. Cobalt argued for the adoption of this narrower construction of claims 35 and 36, whereas Valeant argued that the claims should be construed broadly such that “the invention instructs incorporating a surfactant in either the active layer or the sustained release layer.” [10]

Cobalt took the position that the claim construction of the earlier proceeding applies to the current one, and that under that construction there is no infringement of the ‘224 Patent. As such, Cobalt asserted that Valeant’s application constitutes an attempt to relitigate the issue and is an abuse of process. [12]

In deciding that Valeant’s application was not an abuse of process, the Court noted that dismissing the part of Valeant’s prohibition application relying on the ‘224 patent would have “little to no effect” on judicial economy, as a second patent was also asserted by Valeant, and as a result the application would have to be heard regardless. [24]

Furthermore, the Court stated that “[i]t is not appropriate, in a motion to dismiss part of an application as an abuse of process, to conduct a full-fledged assessment of the previous decision to determine whether an exception to judicial comity is warranted – that is a matter for the applications judge.  More appropriate…is to assess the argument the responding party wishes to advance which, if it succeeds, would result in an inconsistent finding.  The motions judge should determine whether, given the principle of judicial comity, the argument has more than a mere possibility of success.” [26]

The Court held that “[w]hile Valeant may ultimately not succeed…[in its submission that the earlier proceeding improperly construed the claims]…despite the principle of judicial comity, its argument has more than a mere possibility of success.  Accordingly, fairness in permitting it an opportunity to prove its case overcomes consistency.” [29]

Regarding the argument of finality, the Court noted that Valeant had attempted to appeal the earlier decision, but its appeal was dismissed as moot because an NOC had already issued. [30] The Court rejected Cobalt’s argument that Valeant should have challenged the earlier claim construction by instituting an infringement action. [32]

Finally, the Court noted that “motions to strike and summary judgments under the Regulations should be rare and not encouraged…To encourage motions to strike under the Regulations would undermine the expediency of such proceedings.  Therefore, the principles of abuse of process must be carefully applied with a view to the unique nature of proceedings under the Regulations.” [38]