The Federal Court of Appeal (FCA) dismissed an appeal by Merck from a decision of the Federal Court (see our previous article) dismissing Merck’s application for judicial review of Health Canada’s refusal to add Canadian Patent No. 2,830,806 (806 Patent) to the Patent Register: Merck Canada Inc v Canada (Health), 2021 FCA 224.

The 806 Patent was issued on May 12, 2020, and contains claims directed to a formulation of Merck’s KEYTRUDA, a biologic drug containing pembrolizumab. Patent lists for the 806 Patent were submitted outside the 30-day time period prescribed in subsection 4(6) of the Patented Medicines (Notice of Compliance) Regulations (PMNOC Regulations). Health Canada deemed the patent lists ineligible for inclusion on the Patent Register and the Federal Court concluded that its decision was justified, intelligible and transparent, and therefore reasonable.

On appeal, the FCA agreed with the parties that the Federal Court applied the appropriate standard of review. Therefore, the role of the FCA was to determine whether the standard of reasonableness was correctly applied.

On appeal, Merck made a number of arguments in support of its position that Health Canada had discretion, which it unreasonably refused to exercise, to extend the 30-day time period under the PMNOC Regulations. However, the FCA disagreed, holding that the timelines under section 4 are key elements of the scheme set out in the PMNOC Regulations and it was reasonable for Health Canada to conclude that they necessarily come within the words “meet the requirements for addition to the register” in subsection 3(2). The FCA accordingly held that the Federal Court correctly applied the standard of reasonableness when it concluded that Health Canada’s decision with respect to subsections 3(2) and 4(6) of the PMNOC Regulations was reasonable.

Merck also maintained its argument that because the listing of a patent is the “gateway” to commence proceedings under the PMNOC Regulations, the Time Limits and Other Periods Act (COVID-19) (Time Limits Act) applied to the time requirement under subsection 4(6) of the PMNOC Regulations and had the effect of suspending the 30-day time period. While the Time Limits Act suspended a number of federally-legislated deadlines, including time limits related to limitation periods for commencing a court proceeding, the FCA agreed that it was reasonable for Health Canada to conclude that the Time Limits Act has no application to subsection 4(6) of the PMNOC Regulations.

Finally, while not submitted to the Federal Court, Merck raised a new argument that the FCA has the discretion to grant it a remedy under the “expansive” equitable doctrine of relief from forfeiture. However, the FCA declined to exercise any discretion it may have, holding that even if the FCA did have the power to grant the relief sought, Merck did not satisfy the Court that the evidentiary record was adequate and that the FCA could consider this new issue without causing prejudice to the respondent.

Merck would need leave from the Supreme Court of Canada to appeal this decision.

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