FC Affirms Prothonotary Decision Allowing Action to Continue on Allegations of Likely Future (Quia Timet) Infringement

FC Affirms Prothonotary Decision Allowing Action to Continue on Allegations of Likely Future (Quia Timet) Infringement

Gilead Sciences, Inc v Teva Canada Limited, 2016 FC 336

Patent holders may want to consider bringing actions for potential future patent infringement, , even where the future infringement is temporally distant, if sufficient facts are available to support a high likelihood of future harm. In this case, the Federal Court (“FC”) affirmed Prothonotary Tabib’s decision to strike some of Gilead Science Inc.’s (“Gilead”) pleadings and allow the action to continue on the basis of amended allegations of a likely future (quia timet) infringement. [1, 12]

Gilead is the owner of Canadian Patent No. 2,261,619 (“the ‘619 Patent”), for its tenofovir disoproxil product, which expires on July 25, 2017. [6] Teva Canada Limited (“Teva”) has developed a competing version of tenofovir disoproxil, which has been approved by the Minister, however it is currently on patent hold and has not been issued a Notice of Compliance (“NOC”). [6, 8] In the preceding decision, Prothonotary Tabib declined to strike out Gilead’s Statement of Claim in its entirety and allowed the action to continue on the basis of a likely future (quia timet) infringement. [1] The issue to be decided in this case was whether the prothonotary made a palpable and overriding error when applying the test for maintaining a quia timet proceeding. [1,4]

Future (Quia Timet) Infringement: No Palpable and Overriding Error Made

It was not disputed that the correct legal test for a quia timet proceeding was identified. Pursuant to Connaught Laboratories Limited v Smithkline Beecham Pharma Inc, the following criteria are required: (i) a deliberate expressed intention to engage in activity, the result of which would raise a strong possibility of infringement, (ii) the infringing activity must be imminent and the resulting damage to the plaintiff must be very substantial, if not irreparable, and (iii) the facts pleaded must be cogent, precise and material – it is not sufficient for them to be indefinite or amount to mere speculation. [2]

The FC found that Teva had declared a clear intention to come to market with its competing product as soon as it obtained a NOC. [6] Teva argued that there was no guarantee of a NOC being issued and, even if it was, a potential infringement a year or more away does not amount to an imminent infringement. [7] The FC found that as Teva’s product had been contingently approved by the Minister and Teva had made it clear it would enter the market upon receipt of a NOC, the prothonotary’s conclusion that a strong possibility of infringement was present could not be characterized as an error, let alone a palpable and overriding error. [9] The FC also found that the prothonotary did not err in her analysis of the temporal aspect of imminence. The prothonotary stated in her decision that the purpose of a quia timet action is to stop an event before it happens and that it is neither premature nor pointless to institute an action 22 months before the occurrence of the event to be avoided. [10] The FC further found that a potential event that is more distant in time may be less likely to occur, however temporal imminence appears to be a subordinate consideration when the likelihood of future harm is high. [12]