Speculation Insufficient to Establish Indirect Patent Infringement in Canada

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The relevance of expert evidence in establishing indirect infringement of a pharmaceutical in Canada has been questioned. It is unclear what “facts” a product monograph is to contain that will amount to “instructions” to infringe a patent or how a party is to prove that such “facts” amount to “instructions” or how those “instructions” would be understood. What is clear is that “speculation” will not suffice.

On March 26, 2015, the Federal Court released its decision in Bayer Inc. v. Pharmaceutical Partners of Canada Inc., 2015 FC 388, granting PPC’s motion to strike portions of an application brought by Bayer under the PM(NOC) Regulations. PPC is seeking regulatory approval for a generic version of Bayer’s antibiotic AVELOX® (moxifloxacin hydrochloride intravenous solution for injection). In this proceeding under the PM(NOC) Regulations, Bayer asserts Canadian Patent No. 2,378,424 (the ‘424 Patent), which claims a formulation of moxifloxacin hydrochloride and sodium chloride. PPC alleges non-infringement. Bayer delivered two expert reports in the main proceeding and relied on their evidence to support an argument for indirect infringement (i.e., inducement) based on PPC’s product monograph.

Relying only on this evidence, PPC brought and won a summary dismissal motion under ss. 6(5) of the Regulations. Prothonotary Lafrenière heard the motion and explains in his reasons that dismissal pursuant to ss. 6(5)(b) is an extraordinary remedy that is only granted if the application is “clearly futile” or it is “plain and obvious” that it has no chance of success. Such was his finding on this motion.

Relying on the Federal Court of Appeal’s decision in Weatherford v. Corlac, 2011 FCA 228, Prothonotary Lafrenière explains the three part test for inducement:

First, the act of infringement must have been completed by the direct infringer. Second, the completion of the acts of infringement must be influenced by the acts of the alleged inducer to the point that, without the influence, direct infringement would not take place. Third, the influence must knowingly be exercised by the inducer, that is, the inducer knows that this influence will result in the completion of the act of infringement.

The Court found that Bayer had no reasonable chance of success on the second prong of the test, namely, that PPC would influence the direct infringer. The Court held that there was no evidence that PPC would exercise influence that would result in the completion of an act of direct infringement of the patent in issue. As such, Prothonotary Lafrenière held that Bayer had no reasonable chance of success on an integral requirement for the test for inducement:

It should be recalled that PPC is seeking a Notice of Compliance to permit it to market and sell its own non-infringing product. PPC has not yet marketed its product. There is no evidence, other than speculation, that PPC will be seeking to sell its product in combination with sodium chloride. Moreover, there is no evidence of any overt attempt by PPC to influence or encourage others to infringe the 424 Patent.

[…] As the test for inducement is conjunctive, and Bayer has not adduced any evidence that can arguably satisfy all three prongs of the test for inducement, I conclude that the prohibition application as it relates to the 424 Patent will inevitably fail.

Bayer has since appealed Prothonotary Lafrenière’s order. The appeal is scheduled to be heard on May 5, 2015. It seems as though PPC is seeking health regulatory approval for a generic submission that includes a product monograph that contains a statement that the product can be used in a way that would infringe the patent in issue. In past Federal Court decisions, this has been sufficient to establish indirect infringement (see for example, Abbott Laboratories Limited. v. Novopharm, 2006 FC 1411). The appeal may bring more clarity.

experts PM(NOC)



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