Counterclaim Against Non-Asserted Claims Is Permitted as of Right Under the Patented Medicines (NOC) Regulations

The Federal Court has noted that the Patented Medicines (NOC) Regulations^[1] “seek to balance the patent enforcement rights of innovative drug manufacturers with the timely market entry of lower-priced generic drugs by “enabling summary legal proceedings that would address patent concerns without unduly delaying access to generic medicines”.^[2]

Before marketing a drug in Canada, manufacturers must obtain a Notice of Compliance (NOC) from Health Canada. A “first person” who obtains a NOC for an innovative drug may list any associated patent on the Patent Register. If a “second person” subsequently requests a NOC for a competing drug by making reference to a drug whose patents are listed on the Patent Register, the “second person must” either wait for the listed patents to expire or serve upon the first person a Notice of Allegation containing any allegation of invalidity or noninfringement respecting the listed patents.

Under s 6(1) of the Patented Medicines (NOC) Regulations, the first person then has 45 days from the service of the Notice of Allegation to bring an action for a declaration that the making, constructing, using, or selling of the second person’s drug would infringe the claims of the listed patents.

Once an action under s 6(1) is commenced, the Minister of Health may issue a NOC to the second person only if the action is dismissed or 24 months have passed since the action was initiated.^[3] Effectively the Patented Medicines (NOC) Regulations provide for a stay on the issue of a NOC to the “second person” for 24 months or earlier if the action was dismissed before then.

The “second person” may seek a declaration as to the invalidity or noninfringement of the asserted claims.^[4]

The Patented Medicines (NOC) Regulations do not prohibit counterclaims against non-asserted claims in actions commenced under s 6(1), provided the “second person” has obtained leave of the Court.^[5] The Federal Court of Appeal left open whether such a right exists “as of right”.^[6]

The Federal Court found that counterclaims against non-asserted claims in actions commenced under s 6(1) of the Patented Medicines (NOC) Regulations can be brought as of right by the “second person”.^[7] However, such a claim may be subject to a motion to strike under Rule 221 of the Federal Court’s Rules of Court, for example, if it can be shown that such a claim may prejudice or delay the fair trial of the action, or are otherwise an abuse of process.^[8]

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^[1] Patented Medicines (Notice of Compliance) Regulations, SOR/93-133.

^[2] See Boehringer Ingelheim (Canada) Ltd. v. Sandoz Canada Inc., 2023 FC 243 at para 6 quoting from the Regulatory Impact Analysis Statement, (2017) Canada Gazette, Part 1, Vol 151, No 28 at 3317.

^[3] See Section 7(1)(d), Patented Medicines (NOC) Regulations.

^[4] See Section 6(3), Patented Medicines (Notice of Compliance) Regulations, subsections (a0 and (b) provide for a counterclaim against asserted claims in a patent or in a certificate of supplementary protection respectively.

^[5] See Janssen Inc v Apotex Inc, 2022 FCA 184, followed in Boehringer Ingelheim (Canada) Ltd. v. Sandoz Canada Inc., 2023 FC 243 at para 29.

^[6] See Boehringer Ingelheim (Canada) Ltd. v. Sandoz Canada Inc., 2023 FC 243 at para 29.

^[7] See Boehringer Ingelheim (Canada) Ltd. v. Sandoz Canada Inc., 2023 FC 243 at para 59.

^[8] See Boehringer Ingelheim (Canada) Ltd. v. Sandoz Canada Inc., 2023 FC 243 at para 60.