In Pfizer Canada Inc. v. Canada (Health) (2009 FC 1165), the Federal Court (FC) dismissed Ratiopharm's motion to set aside the Federal Court of Appeal's (FCA) decision (2006 FCA 214) granting an order of prohibition, and to dismiss the application for prohibition. The FC also dismissed Pfizer's motion to quash or adjourn Ratiopharm's motion until the determination of an appeal of Ratiopharm's successful impeachment (2009 FC 711) of Pfizer's Canadian Patent 1,321,393 ('393 Patent). In so doing, the FC held that it cannot dismiss an application for prohibition based on subsequent litigation, except perhaps where fraud is alleged in that application and successfully argued in the subsequent litigation.

Lack of Jurisdiction

The FC first held that it did not have the jurisdiction to dismiss the FCA's order of prohibition. The powers of the FCA on an appeal from the FC, set out in s.52(b) of the Federal Courts Act, include the power to give the judgment that the FC should have given in the other proceeding. This provision does not make a FCA judgment that of the FC, but says that it is a judgment that the FC should have given; the judgment remains that of the FCA. As per Grenier v. The Queen (2008 FCA 63), once the FCA has disposed of the matter, it is for the FCA, not the FC, to deal with that disposition. The FC held that several cases cited by Ratiopharm, including Allied Signal Inc. v. DuPont Canada Inc. (1996, 65 C.P.R. 3d 230, FCA) and Nu-Pharm Inc. v. Canada (Attorney General) (1999, 2 C.P.R. 4^th 49), did not support its claim that an order of the FCA could be set aside by the FC.

Mootness

The FC also held that the prohibition order was rendered moot since by Ratiopharm obtaining its notice of compliance after the '393 Patent was held invalid. Ratiopharm however had argued that an outstanding issue remained, namely whether the application for prohibition should be dismissed, thus giving rise to a potential claim for monetary recovery under s.8 of the Patent Medicines (Notice of Compliance) Regulations (PNNOCR). A court has the discretion to hear the case where there may still be some live controversy or where some other particular reason dictates that the matter be heard: Borowski v. Canada (Attorney General) (1989, 1 S.C.R. 342). Further, in Apotex Inc. v. Bayer AG (2004 FCA 242), the FCA heard a moot appeal because of its potential impact on a section 8 PNNOCR claim. However, unlike in Apotex, supra, the FCA had not yet heard the appeal on the merits. In this case, the FCA done so and issued an order of prohibition; the matter was finally determined. For reasons to follow, there was no longer any live controversy respecting section 8 of the PMNOCR, and thus all matters were moot.

Ordering Dismissal Now

The FC considered three arguments for dismissing the NOC proceeding: the inherent jurisdiction of the Court, and jurisdiction under Rule 399(2)(a) and Rule 399(2)(b). The FC first noted that liability for compensation under section 8 of the PMNOCR is triggered only when an application is withdrawn, discontinued or dismissed, the latter being Ratiopharm's reason for seeking dismissal. The FC then emphasized that, though the FC dismissed the application, the FCA reversed that decision and made an order for prohibition "until the expiry of the '393 Patent". Thus the prohibition order terminated not because of a dismissal, but because the '393 Patent expired.

The FC dismissed Ratiopharm's argument that it has inherent jurisdiction to dismiss the proceeding. Apotex Inc. v. AB Hassle (2008 FCA 416) stands for the proposition that a prohibition order may be vacated by a later finding of invalidity or non-infringement. It does not hold that an order may be subsequently dismissed despite no longer being effective. Unlike actions for impeachment, NOC proceedings are unique, self-contained proceedings designed to determine whether the Minister of Health should issue a NOC, not to determine the in rem validity of the patent. Here Ratiopharm had its day in court, and the order arising there from expired. It was not dismissed.

The FC then adopted similar reasoning as for inherent jurisdiction to dismiss Ratiopharm's Rule 399(2)(a) argument.

Rule 399(2)(b), which provides for the setting aside or varying of an order obtained by fraud, caused the FC "considerable difficulty". The FC's prior decision (2009 FC 711) impeaching the '393 Patent based in part on section 53 of the Patent Act came close to being directed to issues of fraud. However, no such issues were raised in the NOC proceedings. Pfizer argued that Rule 399(2)(b) contemplated fraud in the proceedings being impugned while Ratiopharm argued for a broader approach. The FC pointed to Canada's unique patented medicines legislation and the "unfortunate and narrow" construction given to it. For example, two recent, difficult-to-reconcile FCA decisions on when generic manufacturers could seek a NOC for a drug successfully defended in earlier litigation, Sanofi Aventis Canada Inc. v. Novopharm Ltd. (2007 FCA 163) and Apotex Inc. v. Janssen Ortho Inc. (2009 FCA 212), was illustrative of the Court's strict and narrow approach to the NOC Regulations and proceedings under them. Pfizer's position was more consistent with the view that each proceeding is considered on its own "stand alone" merits, without consideration of other proceedings. Considering this application in isolation, no section 53 or fraud allegations were raised in the NOC proceedings, and therefore Rule 399(2)(b) cannot apply.