Law Times

www.lawtimesnews.com Law Times / march 17/24, 2008 Page 9 LitigatiOn Professional Appraisal Opinions - Trusted Values www.oaaic.on.ca 416-695-9333 Expropriations Find a professional real estate appraiser Judges seeking to restore order new practice direction is a 'winner' B y all accounts, generic drug litigation in the Federal Court is a mess, claim- ing a disproportionate amount of judicial resources because of a labour and pa- per-intensive procedure that seems to make less and less sense over time. Some observers believe, however, that a new Federal Court practice direction that went into effect on Jan. 7 will at least partially relieve the malaise. "The new practice direction is an attempt by the judiciary to grab the throat of this beast and shake it until they can make sense of it," says William Richardson of McCarthy Tétrault LLP's Toronto office. "They're say- ing that if this is the regime under which they have to operate, they're going to push back on counsel and clients to bring some order that gives judges a fairer shot at pro- viding real justice. That will make everyone a winner." Generic drug litigation has been prob- lematic since the formulation in 1993 of the Patented Medicines (Notice of Compliance) Regulations. The authors sought to strike a balance between preventing infringement and facilitating the marketing of generic drugs where no infringement existed. Under the regulation, a generic drug manufacturer who wishes to go to market must obtain a notice of compliance by filing a document that compares its generic version with the innovator's drug. The Ministry of Health will issue the NOC if it is satisfied that the generic version is the equivalent of the brand version in safety and effectiveness. If the generic wishes to go to market before the brand's patent lapses, the generic must serve the innovator with a notice of allegation asserting either the patent is not valid or, if it is, the generic drug will not infringe it. A detailed statement of the fac- tual and legal basis for the allegations must accompany the notice. The innovator can challenge allegations of invalidity or non-infringement by apply- ing to the Federal Court for an order pro- hibiting the minister from issuing an NOC before the expiry of the patent. Once the innovator files, the minister cannot issue the NOC for 24 months. The upshot is that the courts have 24 months to decide whether invalidity or infringement has occurred. To some counsel, the PMNOC scenario looks familiar — but uncomfortably so. They say it is akin to an interlocutory injunc- tion obtained without proof of a prima facie case of infringement or irreparable harm, followed by a summary-judgment-like proceeding based on affidavit evidence. Except there's nothing summary about PMNOC proceedings in practice. Indeed, no less an authority than former Supreme Court of Canada justice Frank Iacobucci wrote a 1998 judgment in which he lam- basted the regulation as "draconian." Some observers say the difficulties begin with the Federal Court's refusal to allow amendments to notices of allegation, forcing the generics to file voluminous notices, up to 100 pages long, and follow up with evidence dealing with every point in the document. Compounding the problem further is the fact that the complex issues involved are invariably addressed with expert evidence. Making sense of expert evidence given by affidavit, however, is no small challenge: in many PMNOC cases, experts' opinions are diametrically opposed, requiring judges to make credibility findings without an oppor- tunity to assess witnesses in person. Finally, the judges only get the volu- minous material, including lengthy cross- examination transcripts, shortly before the expiry of the two-year period. This has created a great deal of pressure to the point where jurists have been complaining about the amount of material and the short time they have to explore it. For their part, innovators complain the deck is stacked against them because the rules require them to file evidence first, even though it is the generic seeking a declaration of non-infringement or invalidity. The generics don't buy it. They point out that the notice of application filed by the brands is a bare-bones document, dia- metrically opposed to the detailed notice of allegation from which the generics may not depart. What is clear is that virtually all stake- holders are dissatisfied with the PMNOC process. Many say the scheme is incoherent and has many procedural pitfalls and com- plications, and they're fed up with a system that bears no resemblance to the summary, preliminary procedure it is intended to be. "I don't recall a hearing that was done in a day," says Harry Radomski of Toronto's Goodmans LLP. "Most last four or five days or even longer and involve a mountain of expert evidence. One of our cases involved filings from 28 experts." And by all accounts, things have been getting worse over time. Hence the prac- tice direction, described by the court as a response to the challenges raised by the increasing number of IP cases in general and PMNOC proceedings in particular. More specifically, the practice direction changes the way NOC proceedings are case managed. They will now be "specially man- aged." This means that the court will assign a case management judge or prothonotary to each new proceeding. Once all parties have entered appearances, the judge or protho- notary will convene a conference to address key issues. These include deciding whether the generic should file some or all of its evidence before the innovator does, fixing a schedule for filing evidence, conducting cross-examination and other interlocutory matters, fixing a date for filing a requisition for hearing, and "any other matters useful to ensure the just, most expeditious and least expensive disposition of the proceeding." As well, the presiding judge may convene a hearing management conference six weeks before the hearing to discuss, among other things, the content of the application record, the preparation of a compendium and mate- rials in electronic format for submission to the hearing judge, the identification and settlement of issues, and any agreed facts and documents. As all counsel know, some practice direc- tions work and some don't. "It's hard to say what all this means and whether it will make things more efficient," Radomski says. "To begin with, there are all the arguments about the efficacy of changing the order in which the evidence is presented." Focus On Focus On 'The new practice direction is an attempt by the judiciary to grab the throat of this beast and shake it until they can make sense of it,' says McCarthy Tétrault's William Richardson. BY JULIUS MELNITZER For Law Times SEARCH CONVENIENCE property information and transaction solutions teraview ® technology Convenient service makes everyone's job easier. With Teraview software you no longer need to travel to the Land Registry Office or wait in lines and you can work after normal business hours * . Link directly to Ontario's automated land registration system and writs of execution database to process your paperwork quickly — all at the click of a button. Contact us. Tel: 416-360-1190 Toll Free: 1-800-208-5263 www.teraview.ca *Search title and obtain documents online from 8:00 a.m. - 8:00 p.m. EST Monday through Friday. Access to and use of the services and products available through Teraview software are subject to terms and conditions, availability and pricing available at www.teraview.ca, all of which can be changed without notice. ©2006 Teranet Inc. Teranet, Teraview and the Gateway design are registered trademarks of Teranet Inc. All rights reserved. 2702/03/06 See Court, page 11

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