In Apotex Inc. v. Pfizer Canada Inc. (2009 FC 631), the Federal Court (FC) dismissed Pfizer Canada Inc.’s (Pfizer) motion for summary judgment. Due to the complicated statutory interpretations of s.8 of the Patented Medicines (Notice of Compliance) Regulations (PMNOCR), summary judgment had never been granted in the past. The issue was whether Apotex’s Statement of Claim failed to disclose a genuine issue for trial so that summary judgment should be granted.  In particular, whether Pfizer’s application for an order of prohibition caused any damages allegedly suffered by Apotex, such that Pfizer is liable under s.8 of the PMNOCR. The question of whether the outcome of any proceeding could be considered when determining whether Pfizer’s had wrongly delayed Apotex’s generic drug approval weighed against summary judgment.

Apotex launched an action pursuant to s.8 of the PMNOCR, which entitles generic drug manufacturers to compensation for the delay caused by unsuccessful applications for prohibition by patent holders, in this case Pfizer's unsuccessful application for prohibition relating to the drug fluconazole.  Pfizer asserted Canadian Patent 1,181,076 ('076 Patent), which protected the process by which the drug was produced.  Nupharm and Apotex had served notices of allegation (NOA) involving three processes for manufacturing fluconazole in order to obtain a notice of compliance (NOC) to market generic versions of the drug. Prohibition proceedings were initiated by Pfizer against all NOAs. Only the allegations in relation to the 'olefin process' were found to be justified, and Pfizer’s application for prohibition for these NOAs were dismissed.  Apotex had sought approval by filing an Abbreviated New Drug Submission (ANDS), which cross-referenced Nupharm's ANDS. However at the time both NOAs were filed, neither party’s ANDS included the olefin process that would later be found to be justified. On June 27, 1996, Nu-Pharm sent a letter to the Minister announcing its intention to use the olefin process.

Summary judgment is granted pursuant to Rule 216 of the Federal Court Rules. The FC cited the test from Rachalex Holdings Inc. v. W & M Wire and Metal Products Ltd., 2007 FC 502, namely that the Court is not to grant summary judgment where there is a genuine issue for trial except where the Court is able on the whole of the evidence to find the facts necessary to decide the questions of fact and law.

Pfizer argued that there was no genuine issue for trial because it did not cause any damage. More specifically, a NOC could not have been issued to Apotex until it amended its ANDS to include the non-infringing olefin process.  Since the NOC was issued only after Apotex filed a Change of Submission to add the olefin process to its ANDS, Pfizer was not responsible for any delay between Apotex’s original ANDS filing and the issuance of the NOC almost four years later.  Without a casual relationship between the damages Apotex alleged and the NOC proceedings (T-1714-95), summary judgment is appropriate.

Apotex countered with three arguments.  First, Apotex would have received the NOC on June 27, 1996, or at least well before January 30, 1998, had it not been for Pfizer’s conduct. Second, issues of credibility warranted a trial, in particular the serious factual questions as to what would have occurred in the absence of the PMNOCR. The FC accepted that there was a genuine issue for trial with respect to whether a NOC would have been issued in the absence of PMNOCR at an earlier date.  Therefore, the Court’s obligation was to review the evidence and determine whether the NOC would have issued on an earlier date but for the commencement of the prohibition application by Pfizer. Third, the proper interpretation of s.8 of the PMNOCR warranted a trial.  Apotex raised issues related to the construction s.8 of the PMNOCR, namely the meaning of the phrase “in the absence of these Regulations”.  More specifically, Apotex argued that Pfizer is liable if the Minister would have hypothetically issued the NOC earlier “but for” the prohibition proceeding.  Apotex pointed to a line of cases wherein s.8 of the PMNOCR was held to be a complex regulatory scheme involving legal issues not suitable for resolution on a summary basis.  With respect to the meaning of “in the absence of these Regulations”, Apotex raised two issues: (1) whether a consideration of what would have transpired in “the absence of [the] Regulations” permits the Court to consider the outcome of any proceedings, and (2) whether the Court can find that the Minister would have engaged in “conduct that is unlawful”.

The FC found that the dispute between Pfizer and Apotex was based on two differing interpretations of s.8 of the PMNOCR.  The FC then held that where a question of law in relation to s.8 of the PMNOCR is raised in relation to the facts, summary judgment is not appropriate.  Therefore, summary judgment was not appropriate in this case.