2023 FC, 2023 FC 1231

Date: 20230912 Docket: T-1287-23 Citation: 2023 FC 1231 Toronto, Ontario, September 12, 2023 PRESENT: Associate Judge Trent Horne BETWEEN: JANSSEN INC. AND ACTELION PHARMACEUTICALS LTD Plaintiffs and SANDOZ CANADA INC. Defendant ORDER AND REASONS I. Overview [ 1 ] The issue on this motion is whether I should

schedule a motion for

summary trial as part of the litigation timetable. [ 2 ] Case management judges have the discretion to refuse to

schedule motions, including those for

summary trial, but such discretion should be exercised rarely. I am not satisfied that I should refuse to

schedule the defendant’s proposed motion. II. Background [ 3 ] This action has been brought under the Patented Medicines (Notice of Compliance) Regulations , SOR/93-133 (“PM(NOC) Regulations”). [ 4 ] The statement of claim asserts that claims 1-5 and 21-31 of Canadian patent 2,659,770 (“the 770 Patent”) will be infringed, both directly and by inducement, by the manufacture, use and sale of Sandoz Canada Inc’s (“Sandoz”) 10 mg macitentan tablets.

In very general terms, claims 1-5 of the 770 Patent are directed to a product containing a compound with a certain formula, in combination with a least one compound having PDE5-inhibitory properties, in the treatment of disease wherein vascoconstriction is involved.

Claims 21- 31 are directed to the use of the same compound in combination with a least one compound having PDE5-inhibitory properties. [ 5 ] Sandoz denies infringement, asserting in its statement of defence that macitentan is the sole active pharmaceutical ingredient in its product, and that it will not influence physicians to prescribe, or patients to use, the Sandoz macitentan product in combination with a PDE5 inhibitor. [ 6 ] The validity of the asserted claims is not in issue. [ 7 ] The statement of claim issued on June 21, 2023.

As part of the discussions between counsel in July 2023 to set a timetable for the action, Sandoz advised the plaintiffs that it intends to bring a motion for

summary trial, which is expected to require three hearing days. Sandoz’ motion materials have not been filed. It is expected that the moving motion materials will include both expert and fact evidence. The plaintiffs indicated that they would be opposing the scheduling of a

summary trial motion. [ 8 ] Generally, the party asserting something has the burden to prove it. The plaintiffs take the position that I should not

schedule a motion for

summary trial, which the Federal Courts Rules , SOR/98-106 (“ Rules ”) otherwise permit Sandoz to bring. I therefore scheduled a motion to resolve whether a motion for

summary trial would be scheduled, and directed the plaintiffs to be the moving parties. III. Other Litigation Involving the 770 Patent [ 9 ] The 770 Patent has been the subject of two other PM(NOC) proceedings that went to trial. [ 10 ] Court file T-549-20 involved a claim against Apotex Inc (“Apotex”). The validity of the asserted claims was not in issue. After a six- day trial, Justice Pallotta concluded that the plaintiffs had established that Apotex will infringe claims 1-5 and 21-31 of the 770 Patent indirectly, by inducing physicians to infringe those claims.

She also concluded that Apotex will influence those acts of infringement through the Apotex macitentan product monograph, with knowledge of the influence ( Janssen Inc v Apotex Inc , 2022 FC 996 at para 206 ). An appeal of this decision is scheduled to be heard on October 3, 2023. [ 11 ] Court file T-555-20 involved a claim against Sandoz, but was based on a different abbreviated new drug submission than the one at issue in this action. Sandoz unsuccessfully challenged the validity of the asserted claims (21-31), and conceded infringement in the event the claims were valid.

The trial of that action was also heard by Justice Pallotta ( Janssen Inc v Sandoz Canada Inc , 2022 FC 715 ) . An appeal of this decision is scheduled to be heard on October 4, 2023. IV. Scheduling

Summary Trials in PM(NOC) Cases

[ 12 ] The issue on this motion is whether, as a case management judge, I should

schedule a motion for

summary trial. In broad terms, Sandoz says I should because it has the unfettered right to bring such a motion, The plaintiffs say I should not because it would effectively result in expediting the hearing date, compressing the pre-hearing steps to about a year. The plaintiffs do not assert that Sandoz will inevitably lose any motion for

summary trial, rather that the motion should not be scheduled because to do so would be inconsistent with the guiding principles of Rule 3. [ 13 ] A party’s entitlement to bring a motion for

summary trial is set out in subrule 213(1): " Motion by a party " " " " Requête d’une

partie " " 213

(1) A party may bring a motion for

summary judgment or

summary trial on all or some of the issues raised in the pleadings at any time after the defendant has filed a defence but before the time and place for trial have been fixed. " " " " 213

(1) Une

partie peut présenter une requête en jugement

sommaire ou en procès

sommaire à l’égard de toutes ou d’une

partie des questions que soulèvent les actes de procédure. Le cas échéant, elle la présente après le dépôt de la défense du défendeur et avant que les heure, date et lieu de l’instruction soient fixés. " [ 14 ] In this proceeding, a defence has been filed, and the time and place for trial have not been fixed. Subrule 213(1) does not preclude Sandoz from moving for

summary trial. As a starting point, Sandoz has the right to move for

summary trial. [ 15 ] The right or ability of a party to bring a motion is not absolute. The Court has the ability to control its own process, and is not powerless to intervene and refuse to entertain a particular request. [ 16 ] In Fabrikant v Canada , 2018 FCA 171 (“ Fabrikant ”), a notice of appeal was sent to a member of the Court for directions as to whether it could be received for filing without a filing fee. Justice Stratas stated that the Court can regulate particular proceedings before it, and address actual or potential abuses of its process by using broad plenary powers (para 3).

The notice of appeal was determined to be incomplete and frivolous, and was not received for filing. [ 17 ] In ViiV Healthcare Company v Gilead Sciences Canada, Inc , 2020 FC 11 , the defendant brought a motion for

summary trial. The plaintiffs then brought a separate motion to dismiss or adjourn it. In dismissing the " “meta motion” " (other than extending the duration of the

summary trial), Justice Manson noted at paragraph 20 that " “Gilead is entitled to bring a motion for

summary trial as of right pursuant to Rule 213. The moving party bears the burden of establishing that

summary trial is appropriate in the circumstances, and this determination should be made at the motion for

summary trial itself, not by way of a pre-emptive motion such as this …”. " [ 18 ] An appeal of Justice Manson’s decision was dismissed ( ViiV Healthcare Company v Gilead Sciences Canada, Inc , 2021 FCA 122 ( " “ ViiV ” " ) . The Court of Appeal reviewed and applied three principles to asses whether a motion for

summary trial is appropriate: 1) the practice and procedure of the Court draws upon two sources, the Rules and the plenary powers of the Court to regulate its proceedings; 2) the Rules generally permit the parties to prosecute and defend their cases as they see fit; and 3) the centrality of Rule 3 , which encourages

interpretations of the Rules that prevents, eliminates or minimizes conduct that causes delay and cost (paras 15-18). [ 19 ] The Court of Appeal concluded that these operative principles suggest that, in rare circumstances, motions to quash or to adjourn a motion can be brought. The Court can also act on its own initiative to refuse to entertain a problematic motion (paras 20-23). [ 20 ] The language used by the Court of Appeal in this respect is noteworthy.

It described motions that may be set aside on a preliminary basis as having little merit, and harmful in terms of time and expense; presenting a risk of squandering the resources of the parties; and problematic. [ 21 ] In light of Fabrikant and ViiV , the Court has the inherent ability to stop a motion or other step in its tracks, before or after the motion or other proceeding is filed, to control its own process and prevent the abuse of its resources. [ 22 ] The plaintiffs submitted that

summary trial motions in PM(NOC) proceedings should be rare in light of the fact that actions proceed to trial in about 21 months, and framed the inquiry as to whether scheduling a

summary judgment motion in this proceeding would be a good idea or a bad idea, particularly in light of the guiding principles of Rule 3. I do not find support in the jurisprudence that I can refuse to

schedule a motion, including a motion for

summary trial, on that basis that I conclude that it would be a bad idea. The question is whether this is one of the rare circumstances where a party should be prevented from doing something the Rules expressly permit it to do. The Court should be loath to second guess litigation strategy. The threshold to close the door and preclude a party from moving for interlocutory relief is a significant one. [ 23 ] I conclude that a case management judge has the discretion to refuse to

schedule a motion for

summary trial, but that such discretion should be exercised sparingly, and only in rare circumstances. Provided there is compliance with subrule 213(1), a party has the right to move for

summary trial. To deny that right requires compelling evidence and argument to demonstrate it is apparent that a motion for

summary trial should not even be assigned a hearing date. V. A

Summary Trial Motion will be Scheduled [ 24 ] I am not persuaded that the plaintiffs have met this standard. [ 25 ] None of the Rules, the PM(NOC) Regulations, or the Regulatory Impact Analysis Statement ,

(2017) Canada Gazette,

Part 1, Vol

151, No 28 at 3317 prohibit motions for

summary judgment or

summary trial in a PM(NOC) case. Such motions have been brought in other PM(NOC) proceedings (eg Boehringer Ingelheim (Canada) Ltd v Sandoz Canada Inc , 2023 FC 241 ). [ 26 ] More specifically, allegations of inducing infringement based on a product monograph have been resolved by way of

summary trial ( Janssen Inc v Pharmascience Inc , 2022 FC 62 and Janssen Inc v Apotex Inc , 2022 FC 107 (“ Apotex ”) ). In Apotex , the Court rejected the plaintiffs’ argument that

summary trial was inappropriate because there had not yet been full discovery, and that there was conflicting expert evidence (para 42) . [ 27 ] The 770 Patent has already been litigated twice in this Court, and is the subject of two imminent appeals.

In both appeals, claim construction is not in issue. [ 28 ] The validity of the asserted claims has not been challenged by Sandoz. [ 29 ] The Federal Court of Appeal has recently addressed the legal principles relating to inducing infringement ( Teva Canada Limited v Janssen Inc , 2023 FCA 68 at paras 81-110 ). [ 30 ] In its documentary discovery plan, Sandoz states that it does not require the plaintiffs to produce any documents, although this is qualified with " “at this time” " . [ 31 ] If Sandoz’ assertion in its statement of defence that it does not manufacture a product that includes both macitentan and a PDE5 inhibitor is accurate, documentary and oral discovery in this respect is expected to be brief.

As for inducing infringement, the product monograph will be a key document, and the plaintiffs have already marshalled evidence in respect of macitentan product monographs in the earlier Apotex and Sandoz proceedings. There is no assumption that the same experts will be used, but the subject-matter generally has been addressed by the plaintiffs. I do not accept that the plaintiffs would be unable to undertake discovery of Sandoz on the particular facts related to the allegations of inducement against it before the proposed

summary trial dates in mid 2024. If I am wrong in this respect, this is a point that the plaintiffs can raise at the

summary trial in their opposition to the motion. [ 32 ] The plaintiffs’ central objection is that, by scheduling a

summary trial, Sandoz is effectively seeking a full trial on an expedited timeline, and in a manner that resembles the former PM(NOC) Regulations where hearings were conducted on a paper record. PM(NOC) proceedings already have a compressed

schedule compared to other patent actions, with a target trial date of about 21.5 months after the statement of claim has been issued. If a

summary trial was to be scheduled in the summer of 2024, that would be about 9 months before the usual scheduled trial date. [ 33 ] I agree with the plaintiffs that the practical consequence of scheduling a motion for

summary trial will compress the schedule, and place at least the infringement issues before the Court months before the trial date. But Sandoz has the right to move for

summary trial, and Sandoz will still have the burden to persuade the Court that the infringement issues can be adjudicated in this manner. Sandoz also takes a risk that the motion will not be granted, and that it will face an adverse costs award. I am not persuaded, having regard to all of the above, that the plaintiffs have met their burden to demonstrate that the motion should not be scheduled. [ 34 ] There have been circumstances where the Court has refused to hear a

summary judgment motion. The plaintiffs refer to Wenzel Downhole Tools Ltd v National-Oilwell Canada Ltd , 2010 FC 966 (“ Wenzel ”) (cited in ViiV at para 38) where Justice Snider decided not to permit a motion for

summary judgment to move forward. The motion was not permitted to proceed, in part because of the required preparation time, the proximity of the trial date, and the lack of available expert evidence (paras 38 and 39). While I agree that the Court has the ability to refuse to entertain a motion, I do not read Wenzel as taking away from the principle that it is only in rare circumstances that motions for

summary judgment or

summary trial will not be entertained. Each case will, of course, be determined on its own facts. In Wenzel , the Court was critical of the fact that the defendants’ decision to bring the

summary trial motion after the pre-trial conference (para 6), the lack of expert evidence, and the limitations on assessing credibility without cross-examination (para 31). It is apparent that the Court viewed the defendants’ motion materials as patently deficient, and the relief requested inappropriate. I also note that, at the time Wenzel was decided, the ability to move for

summary trial and the associated ability to cross-examine at the hearing (subrule 216(3)) had not yet been added to the Rules . [ 35 ] Wenzel and other authorities do not place an obligation on a party moving for

summary trial to serve and file motion materials, then persuade the Court that a motion should be scheduled. The plaintiffs place emphasis on the fact that Sandoz has not served and filed any materials that will be relied on in the

summary trial motion, not even a notice of motion. The plaintiffs submit that it is therefore difficult to determine if the proposed motion should be scheduled. I do not agree that a party communicating an intention to move for

summary trial must file all or part of its motion materials in advance of scheduling the motion. To put the onus on Sandoz to demonstrate, with all or part of a record, why a

summary trial should be heard would effectively introduce a leave requirement before scheduling the motion, which is not required by the Rules . I do not agree that the absence of a moving motion record shifts the persuasive burden to Sandoz to demonstrate that the motion should be scheduled. [ 36 ] Considering the reasons why Justice Snider refused to hear a motion in Wenzel , I am not persuaded that Sandoz would be incapable of presenting sufficient evidence to support an argument that the proceeding should be determined summarily.

I am also not persuaded that the plaintiffs would be unable to defend the motion with evidence of their own. [ 37 ] The plaintiffs also rely on a decision of case management judge Aylen (as she then was) in Hoffmann-La Roche Limited v Pfizer Canada Inc , 2018 FC 932 ( " “ Hoffman ” " ), also PM(NOC) proceeding. There, the defendant sought to bring a motion for

summary judgment after the trial date had been set, and required leave to dispense with the requirements of Rule 213. Leave was refused. The timetable proposed by the defendant was problematic. It was not apparent that there was sufficient time to prepare evidence, conduct cross-examinations, and provide the Court with sufficient preparation time (para 17). The Court also noted the parties’ lack of cooperation and improper conduct (para 18). This can be contrasted to the present proceeding, where the proposed motion dates are about 10 months away.

There have certainly been differences of opinion between the parties, but there has been demonstrated cooperation, and no conduct that could be described in any way as improper or deserving of rebuke. Most importantly, the differences between Hoffman and this motion are in respect of onus. In Hoffman , it was up to moving party defendant to show why its motion should be heard, and it failed to do so. Here, the onus is on the plaintiffs to show why the motion should not be brought; I am not satisfied that

their burden has been met. [ 38 ] I do not agree with the plaintiffs that the pending appeals in the Apotex and Sandoz macitentan proceedings is a reason to refuse to

schedule a

summary trial. The Court is available to hear a

summary trial in mid July 2024. The appeals are scheduled for early October 2023. While I cannot guarantee that the appeal decisions will be released before a

summary trial is heard, it is reasonable to expect that the decisions will be released within nine months of the hearing. If they are not, that issue can be raised at the hearing of the

summary trial, and Sandoz takes the risk that costs will be awarded against it in the event the motion is dismissed for whatever reason. I am not persuaded, at this stage, that scheduling a

summary trial motion will prejudice the plaintiffs in a manner that cannot be compensated in costs. [ 39 ] I also disagree with the plaintiffs’ submissions that scheduling a

summary trial motion in this matter would result in there being no basis for precluding any patent infringement action to proceed by

summary trial. Each case is considered on its own facts. This proceeding does not involve challenges to validity, and the claims have been construed in other proceedings. Other cases with other facts may be resolved differently. Responding parties in future cases will be able to argue, where appropriate, that a motion for

summary judgment or

summary trial is abusive and frivolous (as in Fabrikant ). Responding parties can also, in rare circumstances, move to adjourn or dismiss the motion ( ViiV ). [ 40 ] The outcome of this motion only resolves whether a motion for

summary trial will be scheduled. It does not preclude the plaintiffs from asserting that it is one of those rare circumstances where a motion to quash or adjourn should be brought ( ViiV ). I make no finding as to whether there is or will be sufficient evidence on the

summary trial to adjudicate the matter, or whether it would be unjust to decide the issues by way of

summary trial. The outcome of this motion does not determine any claim or defence that may be raised on the

summary trial motion, or at any trial. It is open to the plaintiffs to respond to the

summary trial motion in any way they see fit. VI. Costs [ 41 ] The Court has complete discretionary power over the amount and allocation of costs (subrule 400(1)). [ 42 ] At the conclusion of the hearing, the parties both submitted that costs should be in the cause. I agree. ORDER in T-1287-23 THIS COURT ORDERS that : 1 . The plaintiffs’ motion is dismissed. 2 . The defendant’s motion for

summary trial, which shall not exceed three days, will be scheduled. 3 . The parties shall write to the Court by September 26, 2023 with a proposed timetable for steps leading up to the

summary trial motion, and the trial. 4 . Costs of the motion are in the cause. blank “Trent Horne” blank Associate Judge FEDERAL COURT SOLICITORS OF RECORD DOCKET: T-1287-23 STYLE OF CAUSE: JANSSEN INC. AND, ACTELION PHARMACEUTICALS LTD v SANDOZ CANADA INC. PLACE OF HEARING: Toronto, Ontario DATE OF HEARING: September 6, 2023 ORDER and REASONS: HORNE A.J.

DATED: September 12, 2023 APPEARANCES : Andrew Skodyn Dylan Churchill For The Plaintiffs Sandon Shogilev For The Defendant SOLICITORS OF RECORD : BLAKE, CASSELS & GRAYDON LLP Barristers and Solicitors Toronto, Ontario For The Plaintiffs GOODMANS LLP Barristers and Solicitors Toronto, Ontario For The Defendant