Federal court confirms decision to withhold designating notice of allegation as a confidential document

July 8, 2010

Pfizer Canada Inc. et al. v. Novopharm Limited et al., 2010 FC 668

Even though generic pharmaceutical companies invest significant time and funds into the preparation of notices of allegations (“NOA”s), the Federal Court has confirmed that such documents should remain available to the public and not be designated as confidential information under the terms of a protective order.

In an application under the Patented Medicines (Notice of Compliance) Regulations (the “Regulations”) in relation to the drug pregabalin, the Honourable Mr. Justice Crampton dismissed an appeal from a decision of Madam Prothonotary Milczynski dismissing a motion by Novopharm Limited (“Novopharm”), which sought a protective order designating, among other things, its NOA as confidential pursuant to Rule 151 of the Federal Courts Rules.

Novopharm had unilaterally marked its NOA as confidential upon service to Pfizer and submitted that such designation was appropriate in the circumstances because:

    a) it had made a substantial investment in the preparation of the NOA (approximately $200,000) and had consistently treated and maintained the NOA as confidential;

    b) the investment was made to assist Novopharm “to be a very close second [to ratiopharm], if not the first, generic [drug manufacturer] to obtain a NOC for its pregabalin product”;

    c) there is no public benefit to disclosing the NOA; and

    d) if Novopharm prevails in the litigation and its NOA has been made available, competitors could use the NOA to “springboard” onto the pregabalin market at considerably less expense than that incurred by Novopharm.

The test applicable to a motion for an order of confidentiality was established by the Supreme Court of Canada in  Sierra Club of Canada v. Canada (Minister of Finance), 2002 SCC 41, [2002] 2 S.C.R. 522, at 543-544.  Such an order should only be granted when:

(i) such an order is necessary to prevent a serious risk to an important interest, including a commercial interest, in the context of litigation because reasonable alternative measures will not prevent the risk; and

(ii) the salutary effects of the confidentiality order, including the effects on the right of civil litigants to a fair trial, outweigh its deleterious effects, including the effects on the right to free expression, which in this context includes the public interest in open and accessible court proceedings.

There are three elements to the first part of the Sierra Club test:

(i) the risk in question must be real and substantial, in that the risk is well grounded in the evidence, and poses a serious threat to the commercial interest in question;
(ii)   in order to qualify as an “important commercial interest”, the interest in question cannot merely be specific to the party requesting the confidentiality order, the interest must be one which can be expressed in terms of a public interest in maintaining confidentiality; and

(iii)  the Court must consider not only whether reasonable alternatives to a confidentiality order are available, but must also restrict the order as much as is reasonably possible while preserving the commercial interest in question.

Justice Crampton found that Prothonotary Milczynski was not “clearly wrong” in her assessment of the motion.  First of all, there is no provision in the Regulations relating to whether or not NOA’s are confidential, unlike other pieces of information or documents that are treated as confidential, such as Abbreviated New Drug Submissions.   This tended to suggest that the Regulations do not contemplate that entire NOAs should be treated as confidential in proceedings thereunder.  In addition, there is no precedent in the Federal Court for designating an NOA as confidential in the manner and for the purpose that Novopharm sought.  Another significant factor that weighed against Novopharm’s position was that a patent effectively confers a statutory monopoly on the patent holder, in the sense that the patent holder is shielded from competition for the life of the patent. This provides the basis for a strong public interest in transparency and openness with respect to (i) the allegations contained in an NOA, (ii) the basis for those allegations, and (iii) the proceedings involving those allegations.

Moreover, the evidence adduced by Novopharm was entirely speculative and based on “bald assertions and unsupported assumptions”.  No evidence was adduced that ratiopharm’s NOA (dealing with the same patents) had attracted the type of attention from rival generic drug companies that Novopharm claimed its NOA would attract.  There was also no persuasive evidence to demonstrate that Novopharm’s NOA would be of greater value to those rivals than ratiopharm’s.  Instead, if the NOA was designated as confidential, there was a very real prospect that substantial portions of the proceedings would have to be held in camera, that additional court documents would have to be designated as confidential, and that there would be a consequential adverse impact on the right to free expression.

In view of the foregoing, the court was satisfied that the motion should not have been brought by Novopharm – it was improper and vexatious.  Novopharm’s refusal to accept the orders issued below forced the applicants to incur substantial additional costs.  Justice Crampton accordingly awarded significant costs payable forthwith by Novopharm. 

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