FCA Finds Possible Estoppel Once Again – Apotex May be Bound by Earlier Foreign and Canadian Findings

Published March 28th, 2012

Apotex Inc. v. AstraZeneca Canada Inc. 2012 FCA 68

Summary – The Federal Court of Appeal (“FCA”) recently agreed that AstraZeneca is permitted, as part of its claim for patent infringement, to plead that Apotex is bound by prior decisions finding infringement.  This decision follows a similar finding by the same court (dealing with Apotex’s action for invalidity of Pfizer’s Viagra patent[1]), where possible estoppel issues were alluded to, although arguably in limited circumstances, arising from a prior Notice of Compliance (“NOC”) case.

Analysis – AstraZeneca has heavily litigated its “triple layer” omeprazole formulation patent (CA 1,292,693, the “‘693 Patent”) with Apotex, both in Canada and in the US.  In an earlier NOC proceeding, Apotex’s omeprazole tablets were found to infringe the ‘693 Patent (Apotex v AB Hassle 2003 FCA 409, “Case 1”).  In an earlier US proceeding, Apotex’s omeprazole capsules were also found to infringe the US equivalent to the ‘693 Patent (In re Omeprazole Patent Litigation, 490 F. Supp. 2d 381 (S.D.N.Y. 2007), affirmed by 281 Fed. App. 974 (Fed. Cir. 2008) and 536 F. 3d 1361 (Fed. Cir. 2008), “Case 2”).  Unlike its tablets, Apotex was able to obtain an NOC for its capsules in 2004 (Astra v Apotex 2004 FC 1278, aff’d 2005 FCA 58), largely arising from a procedural issue (the issue of whether the Apotex capsules infringed the ‘693 Patent was never determined in Canada).  Once on the Canadian market with its capsules, AstraZeneca then sued Apotex for patent infringement.

In 2011, AstraZeneca sought to amend its claim for infringement to plead that, as a result of issue estoppel and abuse of process, Apotex was bound by factual findings made by the US court in Case 2.  These findings included the fact that “Apotex’s Omeprazole capsule pellets have a core region containing omeprazole, a sublayer around the core region, and an enteric coating” (para. 3).  Although not discussed in this appeal decision, acceptance of this factual finding would have serious consequences as it may effectively mean that Apotex’s capsules infringe.  Apotex tried unsuccessfully to argue that the impugned facts were “inextricably bound or related to the foreign court’s construction of the claims” (para. 8).  In fact, AstraZeneca’s pleading expressly excluded claims construction from its issue estoppel arguments.  The FCA found that the high test to strike a pleading had not been met – it was not “plain and obvious” that the facts were inextricably linked to the US court’s construction (para. 9).

A second amendment, directed at Case 1, provided further detail on an earlier pleading directed at issue estoppel/abuse of process in general.  The amendment sought to bind the court in the pending action to the same construction of the ‘693 Patent previously determined in Case 1.  The FCA did not comment on this second amendment at all (the reasons are directed at only the Case 2 issue).

The FCA concluded that it is for the trial judge to determine whether issue estoppel is established. 

Practice Point – The FCA’s tacit acceptance that prior findings in both US courts, and in “preliminary” NOC proceedings, may bind a later court in a patent action, raises serious issues regarding procedural strategy.  Generic companies may need to re-think their options as to whether to proceed by way of an NOC proceeding and/or action (for non-infringement and/or invalidity).  Companies may also want to place more emphasis on their global IP strategies.  Once there is a positive or negative factual finding in another jurisdiction, this may have increased importance in Canadian courts.  The FCA decision may signal an increased trend towards global jurisprudence (the Supreme Court of Canada may have encouraged such a trend in Apotex v Sanofi 2008 SCC 61 where the Canadian obviousness test was reformulated after consideration of both US and UK jurisprudence).


[1] Apotex v. Pfizer 2011 FCA 77 (T-772-09)


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