2023 FC, 2023 FC 1414

Date: 20231025 Docket: T-1563-22 Citation: 2023 FC 1414 Toronto, Ontario, October 25, 2023 PRESENT: Case Management Judge John C. Cotter BETWEEN: BOEHRINGER INGELHEIM (CANADA) LTD. AND BOEHRINGER INGELHEIM INTERNATIONAL GMBH Plaintiffs and JAMP PHARMA CORPORATION Defendant ORDER AND REASONS [ 1 ] The defendant, JAMP Pharma Corporation ( " “ JAMP ” " ), brings this motion for an order granting it leave to serve and file an amended statement of defence, specifically the proposed amended statement of defence attached as

Schedule “A” to its notice of motion dated September 8, 2023 ( " “ Proposed Amended Defence ” " ). [ 2 ] For the reasons below, JAMP is granted leave to serve and file its Proposed Amended Defence. I.

Background and Proposed Amendments [ 3 ] This proceeding is an action by Boehringer Ingelheim (Canada) Ltd. and Boehringer Ingelheim International GmbH (collectively, " “ BI ” " ) against JAMP pursuant to subsection 6(1) of the Patented Medicines (Notice of Compliance) Regulations , SOR/93-133 ( " “ PM(NOC) Regulations ” " ) for a declaration that JAMP’s Products (as defined in paragraph 1.a. of the statement of claim) would infringe, or induce infringement of, certain claims of Canadian patent numbers 2,591,083 (the " “ 083 Patent ” " ) and 2,726,267 (the " “ 267 Patent ” " ).

BI also seeks certain related relief. The defences asserted by JAMP in its statement of defence include that the 083 Patent and 027 Patent are invalid. The proposed amendments to JAMP’s statement of defence all relate to JAMP’s defence that the 083 Patent is invalid. [ 4 ] The statement of claim was preceded by JAMP’s notice of allegation dated June 17, 2023 ( " “ NOA ” " ). Among other things, the NOA alleged that the 083 Patent was invalid on the bases of anticipation and obviousness. In connection with its obviousness allegation, JAMP relied upon various references listed in

Schedule " “F” " to the NOA as being the state of the art and/or common general knowledge of a person skilled in the art.

Schedule " “F” " included PCT application number 2004/017948 ( " “ WO 948 ” " ), which issued as Canadian patent number 2,495,350 (the " “ 350 Patent ” " ). [ 5 ] In its statement of defence, JAMP’s invalidity allegations regarding the 083 Patent include anticipation and obviousness. As part of its allegation of obviousness, JAMP relies upon WO 948 and the 350 Patent. Both WO 948 and the 350 Patent are listed in

Schedule " “A” " to JAMP’s current statement of defence and are alleged to be the state of the art and/or common general knowledge of a skilled person as of the claim date of the 083 Patent (for example, see paragraphs 55, 56, 71 to 75 and

Schedule " “A” " , tab/item numbers 8 and 26, of the current statement of defence). [ 6 ] JAMP is seeking leave to serve and file a pleading amendment relating to its allegation that the 083 Patent is invalid. JAMP’s proposed amendments can be categorized as follows (collectively, " “ Proposed Amendments ” " ):

a) anticipation by WO 948 (paragraphs 119A-119F of the Proposed Amended Defence); and

b) double patenting over the 350 Patent (paragraphs 119G-119O of the Proposed Amended Defence). [ 7 ] JAMP’s counsel sent the Proposed Amended Defence to BI’s counsel on August 2, 2023, with a request to advise if BI would consent to the proposed amendments. JAMP’s motion record on this motion was filed on September 8, 2023, and the motion was heard on September 26, 2023. [ 8 ] BI opposed the motion. The issues that BI has raised in opposing the amendments can generally be described as:

a) whether one of the paragraphs in the Proposed Amended Defence, namely paragraph 119N, discloses a reasonable defence; and

b) whether it is in the interests of justice to permit JAMP to amend to plead the new bases of invalidity not alleged in its NOA. II. Status of the Action [ 9 ] This action was commenced by the issuance of a statement of claim on July 28, 2022. As per the letter from plaintiffs’ counsel to the Court dated July 28, 2022, the plaintiffs renounced the 24 month stay provided by paragraph 7(1)(

d) of the PM(NOC) Regulations. JAMP’s statement of defence was served and filed on September 12, 2023. The trial is scheduled for May 2024. [ 10 ] Examinations for discovery are close to being completed. Expert reports are not yet due. The deadlines for expert reports under the two most recent scheduling orders are as set out below. The deadlines for expert reports (and certain other steps) in the August 9, 2023

Order were extended by the September 29, 2023 Order pursuant to a joint request of the parties submitted on September 6, 2023.

Step Date as perAugust 9, 2023Order Date as perSeptember 29,2023 OrderBI’s in-chief reports onconstruction/infringement; JAMP’sin-chief reports onconstruction/invalidity November 10,2023 December 15, 2023 BI’s responding reports onconstruction/validity; JAMP’sresponding reports onconstruction/non-infringement February 9, 2024 March 1, 2024 BI’s proposed reply reports onconstruction/infringement; JAMP’sproposed reply reports onconstruction/invalidity [if permitted] March 15, 2024 April 5, 2024 III.

The Law Regarding Pleading Amendments [11] The general principles regarding pleadings amendments are well established. It is useful to refer to a few cases discussing thesegeneral principles, including what the cases describe as the threshold issue. [12] As stated by Prothonotary Furlanetto (as she then was) in Sunovion Pharmaceuticals Canada Inc. v. Taro Pharmaceuticals Inc.,2021 FC 37, aff’d 2021 FCA 113: [32] Rule 75 of the Federal Courts Rules provides that the Court may at any time, allow a party to amend a document onsuch terms as will protect the rights of the parties.

The general rule on amendment of pleadings is that “an amendmentshould be allowed at any stage of an action for the purpose of determining the real questions in controversy between theparties, provided, notably, that the allowance would not result in an injustice to the other party not capable of beingcompensated by an award of costs and that it would serve the interests of justice”: Canderel Ltd. v. R. (1993), (FCA), [1994] 1 F.C. 3 (FCA) at page 10; Enercorp. Sand Solutions Inc. v.

Specialized Desanders Inc., 2018 FCA 215at para 19 (“Enercorp”). [33] As a threshold issue, a motion to amend a pleading will not be allowed unless the amendment has a reasonable prospectof success when considering the chance of success in the context of the law and the litigation process: Teva Canada Ltd. v.Gilead Sciences Inc., 2016 FCA 176 at para 29-30. If it is plain and obvious that the amendment would be struck if pleaded,it should not be allowed: Enercorp supra at para 22.

Only after this initial threshold is met will the Court consider othermatters, including whether there is prejudice to the opposing party. [13] Regarding the threshold issue:

a) In Enercorp Sand Solutions Inc. v. Specialized Desanders Inc., 2018 FCA 215, the Federal Court of Appeal stated: [22] In Nidek Co. v. VISX Incorporated, (FCA), 209 N.R. 342 (F.C.A.), 72 C.P.R. (3d) 19 at page 24,this Court pointed out that in determining whether an amendment to a defence should be allowed, “it is often helpful for theCourt to ask itself whether the amendment, if it was already part of the proposed pleadings, would be a plea capable of beingstruck out under Rule 419 [now Rule 221].” See also Bauer Hockey Corp. v.

Sport Maska Inc. (Reebok-CCM Hockey), 2014FCA 158 at para. 16, 122 C.P.R. (4th) 97, Teva Canada Limited v. Gilead Sciences Inc., 2016 FCA 176 at paras. 28-31,[2016] F.C.J. No. 605.

b) In Teva Canada Limited v. Gilead Sciences Inc., 2016 FCA 176 ("“Teva”"), referred to in the passage quoted immediately above, theFederal Court of Appeal stated: [29] Unsurprisingly, the absence of a reasonable prospect of success is a well-established reason for a court to dismiss amotion for leave to amend: Bauer Hockey Corp. v. Sport Maska Inc. (Reebok-CCM Hockey), 2014 FCA 158, 122 C.P.R.(4th) 97; Visx Inc. v. Nidek Co. (1996), (FCA), 209 N.R. 342, 72 C.P.R. (3d) 19 at p. 24; and see also R.v.

Imperial Tobacco Canada Ltd., 2011 SCC 42, [2011] 3 S.C.R. 45 at paras. 17-20 on the meaning of “reasonable prospectof success” in the context of motions to strike claims, a meaning that Bauer suggests (at para. 16) equally applies on theissue whether the Court should grant a proposed pleadings amendment. [30] The standard of “reasonable prospect of success” is more than just assessing whether there is just a mathematicalchance of success.

In deciding whether an amendment has a reasonable prospect of success, its chances of success must beexamined in the context of the law and the litigation process, and a realistic view must be taken: Imperial Tobacco, above atpara. 25. [31] In the jurisprudence, the requirement that the amendment have a reasonable prospect of success has become a thresholdissue: see, e.g., Remo Imports Ltd. v. Jaguar Cars Ltd., 2005 FC 870, 41 C.P.R. (4th) 111 at para. 49.

Normally, only if thatthreshold is crossed will the Court go further and investigate other matters, such as the prejudice the opposing party maysuffer as a result of the amendment.

c) In McCain Foods Limited v. J.R. Simplot Company, 2021 FCA 4, the Federal Court of Appeal stated:

[20] The general rule is that an amendment should be allowed at any stage of an action for the purpose of determining thereal questions in controversy between the parties, provided, notably, that the allowance would not result in an injustice to theother party not capable of being compensated by an award of costs and that it would serve the interests of justice: CanderelLtd. v. Canada, (FCA), [1994] 1 F.C. 3, 157 N.R. 380 (C.A.); Enercorp at para. 19.

However, theProthonotary noted that the proposed amendment must have a reasonable prospect of success: Teva Canada Limited v.Gilead Sciences Inc., 2016 FCA 176, 140 C.P.R. (4th) 309 at paras. 29-32 (Teva). Another way to put this is that a proposedamendment will be refused if it is plain and obvious, assuming the facts pleaded to be true, that the pleading discloses noreasonable cause of action: R. v.

Imperial Tobacco Canada Ltd., 2011 SCC 42, [2011] 3 S.C.R. 45 at para. 17 (ImperialTobacco). [21] In deciding whether an amendment has a reasonable prospect of success, its chances of success must be examined in thecontext of the law and the litigation process, and a realistic view must be taken: Teva at para. 30; Imperial Tobacco at para.25. [22] In determining whether an amendment to a defence should be allowed, it is often helpful for the Court to ask itselfwhether the amendment, if it were already part of the proposed pleadings, would be a plea capable of being struck out: VISXInc. v.

Nidek Co., (FCA), [1996] F.C.J. No. 1721, 72 C.P.R. (3d) 19 (F.C.A.) at para. 16. If yes, theamendment should not be allowed. [14] As noted by the Federal Court of Appeal in the passage set out above in Teva at para 31, normally, only if that initial "“threshold iscrossed will the Court go further and investigate other matters”". It is at that point in the analysis that the interests of justice areconsidered. The Federal Court of Appeal addressed the interests of justice in the content of a motion to amend in Janssen Inc. v. AbbvieCorporation, 2014 FCA 242 ("“Janssen”") (see also Enercorp Sand Solutions Inc. v.

Specialized Desanders Inc., 2018 FCA 215, atparas 20 and 21): [3] On a motion to amend, the applicable test is that taught by the case of Continental Bank Leasing Corp. v. R., [1993]T.C.J. No. 18, (1993) 93 DTC 298 at page 302, [Continental], cited by our Court in Merck & Co. Inc. v. Apotex Inc., 2003FCA 488, [2004] 2 F.C.R. 459 leave to appeal to S.C.C. refused, 30193 (May 6, 2004) (see Judge’s reasons in A-380-13 atparagraph 10): […] I prefer to put the matter on a broader basis: whether it is more consonant with the interests of justice thatthe withdrawal or amendment be permitted or that it be denied.

The tests mentioned in cases in other courts areof course helpful but other factors should also be emphasized, including the timeliness of the motion to amendor withdraw, the extent to which the proposed amendments would delay the expeditious trial of the matter, theextent to which a position taken originally by one party has led another party to follow a course of action in thelitigation which it would be difficult or impossible to alter and whether the amendments sought will facilitatethe court’s consideration of the true substance of the dispute on its merits.

No single factor predominates nor isits presence or absence necessarily determinative. All must be assigned their proper weight in the context of theparticular case. Ultimately, it boils down to a consideration of simple fairness, common sense and the interestthat the courts have that justice be done. [Emphasis in original.] [15] There is an additional consideration in this case since JAMP seeks to amend to plead new bases of invalidity that were not includedin its NOA.

Under the present PM(NOC) Regulations a defendant such as JAMP is not limited to invalidity allegations made in its NOA.This was addressed by the Federal Court of Appeal in Sunovion Pharmaceuticals Canada Inc. v. Taro Pharmaceuticals Inc., 2021 FCA113, aff’g 2021 FC 37 ("“Sunovion”"): [6] The appellants express concern that their decision to commence the Action, and thereby to risk liability to the respondentunder

section 8 of the Regulations if the Action is unsuccessful, was based on the allegations made in the NOA. Theappellants argue that it is unfair to permit the respondent to add new invalidity allegations to its defence because they (theappellants) were denied the right to consider these new allegations when accepting the risk of liability. The appellants alsoargue that permitting the introduction of new invalidity allegations that were not included in the NOA would encouragesecond persons to split their case by delivering a bare NOA that is fleshed out only later after the first person has acceptedliability under

section 8 by commencing an action. [7] The Federal Court noted two checks on a second person’s incentive to try to profit from withholding invalidityallegations in this way. First, subsection 8(6) of the Regulations provides that, “[i]n assessing the amount of compensation[…] the court shall take into account all matters that it considers relevant […] ”. This provision gives the Court considerablediscretion to consider factors that could affect the amount of liability under

section 8, including whether the first person wasimproperly influenced to start an action because of an incomplete NOA. [8] A second check on a strategy based on the introduction of new invalidity allegations after the commencement of anaction under the Regulations is the Court’s discretion to grant or dismiss a motion to amend a pleading. If a Court isconvinced that a proposed amendment seeks to introduce invalidity allegations of which the moving party was aware whenits NOA was served, the Court may dismiss the motion on the basis that permitting the amendment would not serve theinterests of justice.

The second person would then be denied the right to make its case based on the omitted allegations. [9] While neither of these checks is a guarantee that the first person will not face liability based on an unexpected invalidityallegation, the possibility that the second person would see its

section 8 claim reduced (partially or entirely) pursuant tosubsection 8(6), or that it would lose the opportunity to add a new invalidity allegation, would likely reduce or eliminate anyincentive to hold something back from its NOA.

IV. Proposed Paragraph 119N [ 16 ] A threshold issue on a motion to amend a pleading, as per the case law set out above, is whether the proposed amendment has a reasonable prospect of success when considering the chance of success in the context of the law and the litigation process.

There is no issue that anticipation and double patenting are invalidity defences and this was acknowledged by BI. [ 17 ] BI’s argument on this threshold issue is directed at one particular paragraph, namely paragraph 119N ( " “ 119N ” " ) of the Proposed Amended Defence, which BI argues is irrelevant and does not disclose a reasonable defence. BI does not advance any arguments that the other paragraphs in the Proposed Amended Defence do not have a reasonable prospect of success. [ 18 ] Regarding 119N, it states: 119N.

The 350 Patent was listed by BI Canada, with the consent of the owner of the 350 Patent, on the patent register for OFEV (nintedanib) capsules.

This listing is an admission by BI Canada, from which it cannot resile, that the 350 Patent contains at least one claim that is a claim for the medicinal ingredient (nintedanib and/or the MES salt of nintedanib), the formulation that contains the medicinal ingredient (nintedanib and/or the MES salt of nintedanib), the dosage form, or the approved use of the medicinal ingredient (nintedanib and/or the MES salt of nintedanib) in respect of OFEV (nintedanib) capsules. [ 19 ] The essence of BI’s argument as to why 119N does not disclose a reasonable defence is stated in paragraph 20 of BI’s written representations: While JAMP does not plead how paragraph 119N relates to its proposed double patenting attack, JAMP apparently seeks to rely on extrinsic evidence—the fact of the listing of the 350 patent on the Patent Register—to construe the claims of the 350 patent for purposes of assessing double patenting.

As explained below, the use of such extrinsic evidence is impermissible. JAMP should therefore not be granted leave to include proposed paragraph 119N. [ 20 ] JAMP advances a number of arguments in response. One is that BI is assuming in its argument that JAMP seeks to rely on extrinsic evidence. JAMP argues that even if that is the case, the prohibition on using extrinsic evidence to construe the claims of the patent applies to the patent(

s) being asserted by a plaintiff. JAMP acknowledges that in respect of the patents being asserted by the plaintiffs in this action, including the 083 Patent, it is impermissible to use extrinsic evidence to construe the claims of those patents (subject to the exception in

section 53.1 of the Patent Act , RSC, 1985, c P-4 ). Proposed paragraph 119N does not seek to use extrinsic evidence to construe the 083 Patent. JAMP argues that there is no case law, and there was none pointed to by BI, on this specific point, namely whether the prohibition on the use of extrinsic evidence applies to patents other than the one being asserted by a plaintiff.

While this may be a novel argument, it is not plain and obvious that 119N would be struck out if it were already part of the statement of defence, or that it does not have a reasonable prospect of success. [ 21 ] As a result, the Proposed Amendments disclose a reasonable defence on invalidity, namely, that the 083 Patent is invalid for anticipation and for double patenting. V.

Is it in the Interests of Justice to Permit the Proposed Amendments? [ 22 ] On the question of whether it is in the interests of justice to permit the Proposed Amendments, BI argues that it is not in the interests of justice because these specific invalidity allegations where not included in the NOA. [ 23 ] The matter of specific invalidity allegations in proposed amendments not having been included in the notice of allegation was considered by the Federal Court of Appeal in Sunovion , referred to above. [ 24 ] BI argues that JAMP has a " “common law burden to lead evidence” " on the invalidity allegations it was aware of, and when (paragraph 33 of BI’s written representations).

BI goes on to argue that the FCA’s comments in Sunovion " “are best understood as an invitation for the second person to provide at least some evidence as to why its new invalidity allegations were not raised in its NOA” " (paragraph 34 of BI’s written representations).

This is based on the following in paragraph 8 of the Federal Court of Appeal’s decision: […] If a Court is convinced that a proposed amendment seeks to introduce invalidity allegations of which the moving party was aware when its NOA was served, the Court may dismiss the motion on the basis that permitting the amendment would not serve the interests of justice. [Emphasis added.] [ 25 ] I view the above circumstance, namely where the " “Court is convinced that a proposed amendment seeks to introduce invalidity allegations of which the moving party was aware when its NOA was served” " , as being another factor for the Court to consider along with the other factors mentioned in the case law such as, by way of example, the timeliness of the motion to amend and the extent to which the proposed amendments would delay the expeditious trial of the matter.

This is supported by the use of " “may” " in the passage quoted above from Sunovion . [ 26 ] There is no specific evidence that JAMP was aware of the invalidity allegations set out in the Proposed Amendments ( " “ New Invalidity Allegations ” " ) when its NOA was served. Conversely, there is no specific evidence that JAMP was not aware of the New Invalidity Allegations when its NOA was served. Each side on this motion argues for inferences to be drawn based on the evidence filed on the motion, or for the question to be decided based on who bears the burden. It is not necessary to decide this motion based on who

bears the burden on that particular issue, or by drawing inferences, because even if JAMP was aware of the New Invalidity Allegations at the time the NOA was served, in view of the circumstances of this case, it is in the interests of justice to permit the Proposed Amendments. Those circumstances include the following: There is no issue as to the timeliness of this motion when considered in the context of the status of this action and the fact that expert reports have not yet been served (expert reports are discussed in greater detail below).

There has been no suggestion by any party that the trial scheduled for May 2024 would be delayed as a result of the proposed amendments. On the question of " “the extent to which a position taken originally by one party has led another party to follow a course of action in the litigation which it would be difficult or impossible to alter” " , BI did not raise any arguments in this regard. The amendments sought will facilitate the court’s consideration of the true substance of the dispute on its merits, in this case, the validity of 083 Patent, a central issue in this case.

It is in the interests of justice that the trial judge be in possession of all relevant references to fully consider the issues of anticipation and double patenting. The issue of the invalidity of a patent is not only of interest to BI and JAMP, but because a patent is viewed as a bargain between the patentee and the public, the issue of the validity of the 083 Patent goes beyond the parties to this litigation. This is reflected in the following passage in Janssen : [18] The jurisprudence on amendments teaches us that no single factor is determinative. The list of factors to be considered is not exhaustive.

This is a balancing exercise and although no single factor predominates, proper weight has to be given to the relevant factors applicable to each particular case.

In our view, the Judge misapplied the stated test and failed to give proper consideration to the relevant factors including the particularity of this case which involves novel technology with complex scientific and commercial realities going at the heart of the patent bargain between the inventor and the public . [Emphasis added.] There is no suggestion that JAMP has somehow benefited by waiting until this point in the litigation to seek to raise the invalidity allegations that make up the Proposed Amendments.

Although examinations for discovery are close to being completed, there is no suggestion that additional documentary or all discovery will be needed if the Proposed Amendments are allowed. Expert reports have not yet been served. The first expert reports are due December 15, 2023 and BI’s expert reports on invalidity are not due until March 1, 2024. As noted above, JAMP’s counsel sent its Proposed Amended Defence to BI’s counsel on August 2, 2023; JAMP’s motion record on this motion was filed on September 8, 2023; and the motion heard on September 26, 2023.

As a result, BI will have had more than 4 months from when it first became aware of the Proposed Amendments until any expert reports are due (and more than two months from the hearing of the motion), and of greater significance for present purposes, BI will have had approximately 7 months from when it first became aware of the Proposed Amendments until its responding expert reports on validity are due (and more than five months from the hearing of the motion).

Although the New Invalidity Allegations were not included in the NOA, they are based on WO 948 and the 350 Patent, both of which are included in the NOA and the statement of defence in support of other grounds of invalidity. In other words, although WO 948 and the 350 Patent are now relied on for other grounds of invalidity, they are not new documents and have been in play since the NOA was served. BI has not asserted that it would be prejudiced if the Proposed Amendments were allowed. VI. Conclusion [ 27 ] In conclusion, JAMP is granted leave to serve and file its Proposed Amended Defence. VII.

Costs [ 28 ] JAMP argues that BI should have consented to the proposed amendments, and as a result, BI should be ordered to pay lump sum costs of $14,787.39, being 37.5% of JAMP’s actual and anticipated legal fees for the motion. [ 29 ] Conversely, BI argues that the general principle is for the party seeking the amendment, to pay costs to the responding party even if the amendment is permitted.

BI submits that as a result, if BI is successful on the motion, JAMP should pay costs in the amount of $3,500 in any event of the cause, and if JAMP is successful, it should pay BI costs in any event of the cause (paragraph 44 of BI’s written representations). BI has not argued that it will incur any costs as a result of the amendment, if it is permitted.

The costs BI seeks are of the motion. [ 30 ] Considering Rule 400 of the Federal Courts Rules , including the factors listed in Rule 400(3), and in particular the result on this motion which I consider to be the most important factor in the context of this motion, costs are awarded to JAMP. Given the nature of issues, I consider it appropriate to fix the costs of the motion at $3,500, the amount proposed by BI. Order in T-1563-22

THIS COURT ORDERS that : 1 . The defendant, JAMP Pharma Corporation, is granted leave to serve and file an amended statement of defence in the form attached as

Schedule " “A” " to its notice of motion dated September 8, 2023. The amended statement of defence shall be served and filed within 10 days of the date of this Order. 2 . Costs of this motion are awarded to the defendant, JAMP Pharma Corporation, fixed in the amount of $3,000, payable by the plaintiffs by no later than November 24, 2023. blank "John C. Cotter" blank Case Management Judge FEDERAL COURT SOLICITORS OF RECORD DOCKET: T-1563-22 STYLE OF CAUSE: BOEHRINGER INGELHEIM (CANADA) LTD.

ET AL v JAMP PHARMA CORPORATION PLACE OF HEARING: Toronto, Ontario DATE OF HEARING: September 26, 2023 ORDER AND REASONS: CASE MANAGEMENT JUDGE JOHN C. COTTER DATED: October 25, 2023 APPEARANCES : Urszula Wojtyra Malcolm Harvey For The Plaintiffs Jordan Scopa Jaclyn Tilak Kasia Donovan For The Defendant SOLICITORS OF RECORD : Smart & Biggar LLP Barristers and Solicitors Toronto, Ontario For The Plaintiffs Goodmans LLP Barristers and Solicitors Toronto, Ontario For The Defendant