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“Potential” For Inconsistent Results Supports Staying Re-Examination of MS Drug Patent

June 2, 2021

By Joshua Spicer and Martin Brandsma

The Federal Court recently stayed an ongoing patent re-examination proceeding before the Canadian Intellectual Property Office (CIPO) until final judgment in a related patent infringement action. At trial, the patent was found valid and infringed. But a later preliminary opinion by the Re-examination Board considered the patent invalid. Based in part on this evidence, the Court was satisfied that were the Re-Examination not stayed, the Board was “likely” to invalidate the patent, contrary to the trial decision. Though the applicant could not “establish with certainty what the outcome” of the Re-Examination would be, the Court held that subjecting the applicant to duplicative litigation with the risk of inconsistent decisions, was itself a non-speculative form of irreparable harm.

In Teva Canada Innovation v. Pharmascience Inc., 2021 FC 367 (“Glatiramer”), Teva Canada Innovation and Teva Canada Limited (collectively “Teva”) sought to stay an ongoing re-examination proceeding related to Canadian Patent No. 2,760,802 (the “802 Patent”), until final judgment in a related infringement action brought under the Patented Medicines (Notice of Compliance) Regulations (the “PM(NOC Regulations).1 The 802 Patent relates to a three times weekly injection of 40 mg glatiramer acetate used to treat multiple sclerosis. Pharmascience Inc. (“Pharmascience”) opposed Teva’s motion, arguing the stay would potentially delay market entry for its own glatiramer acetate drug GLATECT.

While the infringement action was underway, Pharmascience’s counsel filed for re-examination of the 802 Patent by the CIPO’s re-examination board pursuant to s. 48.1(1) of the Patent Act (the “Re-Examination Proceeding”). The re-examination request alleged that the 802 Patent was obvious in view of prior art not previously examined by the Board. On December 16, 2020, the Court issued its decision in the infringement action, finding the 802 Patent valid and infringed.2 With that decision under appeal, Teva sought to stay the Re-Examination Proceeding until conclusion of all appeals from the judgement. In the absence of a stay, ss. 48.3(3) of the Patent Act requires the board to complete its re-examination and issue a decision within 12 months of commencement of the re-examination proceeding. Notably, following the trial decision, the Board had issued preliminary opinions in the Re-Examination Proceeding finding the 802 Patent invalid.

Stay of Proceedings

There was no dispute that the Court had authority to stay the Re-Examination Proceeding under the Patent Act. The test applicable for a stay was also accepted as the conjunctive tri-partite test outlined in RJRMacDonald Inc. v. Canada (Attorney General), [1994] 1 SCR 311, requiring Teva to establish: (1) a serious issue to be tried; (2) that it would suffer irreparable harm if the stay were not granted; and (3) that the balance of convenience favours the stay.

Serious Issue to be Tried

In terms of a serious issue to be tried, Teva argued that its position regarding the validity of the 802 Patent was serious since the patent was found valid at trial. Pharmascience took the opposite view, arguing that the validity of the 802 Patent could not be serious as that question had already been answered at trial. The Court rejected Pharmascience’s position, finding that the question answered at trial in Teva’s favour, “clearly supports the conclusion that its request for a stay is in support of a position on the merits that is neither frivolous nor vexatious” (Glatiramer, para. 15). The Court also accepted Teva’s argument that a serious issue included obtaining an answer on appeal that could influence the Re-Examination Proceeding, namely, to invoke issue estoppel, res judicata, or like principles, to avoid an inconsistent decision.

Irreparable Harm

The Glatiramer decision focuses primarily on irreparable harm. Teva’s principal argument was that it risked the 802 Patent being invalidated by the Board, which would be contrary to its interests and inconsistent with the trial decision. The Court agreed, finding that the issuance of a decision by the Board prior to the appellate decision in the litigation gave rise to irreparable harm, in part because:

  • though the outcome of the Re-Examination Proceeding was not “certain”, the weight of the evidence (i.e., the Board’s preliminary invalidity opinion) supported a conclusion that invalidation of the 802 Patent “is a likely result” (Glatiramer, para. 28). The mere fact of subjecting Teva to duplicative litigation on the same issue, with the “risk” of inconsistent decisions, “is itself a non-speculative form of irreparable harm” (Glatiramer, para. 32);
  • litigation generates a more comprehensive evidentiary record than a re-examination proceeding. Where it is necessary to stay one of two processes to avoid inconsistent results, preference should be given to the more comprehensive process (Glatiramer, para. 35);
  • the appellate decision being “a final decision” in the litigation allows Teva to argue before the Board that issue estoppel, res judicata, or like principles should preclude the Board ruling on patent validity issues already determined in the litigation (Glatiramer, para. 38); and
  • appealing the Re-Examination Proceeding would not eliminate Teva’s harm as an appeal is not a hearing de novo and therefore could not necessarily remedy inconsistent results (Glatiramer, para. 46).

Balance of Convenience

On the balance of convenience, Pharmascience argued that if the Re-Examination Proceeding finds the 802 Patent invalid, it would receive a notice of compliance for GLATECT and could commence marketing. Staying the Re-Examination Proceeding would delay marketing and result in lost revenue and cost savings for MS patients and provincial payors. The Court accepted the possibility that a stay could delay marketing, but found this was only one possible result, as the 802 Patent could also be determined valid on re-examination. Consequently, the Court found “there is clearly a significant element of speculation to the harm to it and the public on which Pharmascience relies”. The Court differentiated this position from its irreparable harm analysis on the basis that the harm represented by the fact of duplicative proceedings and the resulting potential for inconsistent result, was, at least in part, independent of which party prevailed.

While the decision is largely fact driven, it suggests that in the context of a stay, irreparable harm may be established in other cases where facts demonstrate the “risk” of an inconsistent result.


1 Teva Canada Innovation v. Pharmascience Inc., 2020 FC 1158.

2 Teva Canada Innovation v. Pharmascience Inc., 2020 FC 1158.

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Author(s):

Joshua W. Spicer Joshua W. Spicer
B.Eng. (Chem. Eng.), LL.B.
Partner
416.957.1649  email Joshua W. Spicer
Martin Brandsma Martin Brandsma
HBSc., MSc., J.D.
Associate
416.957.1627  email Martin Brandsma