On January 23, 2023, the Federal Court released a decision by Associate Judge Tabib denying Takeda’s motion to consolidate two actions commenced under the Patented Medicines (Notice of Compliance) Regulations (PMNOC Regulations) against Apotex: Takeda Canada Inc v Apotex Inc, 2023 FC 63. Both actions involve Takeda’s dexlansoprazole product, DEXILANT, and one Abbreviated New Drug Submission (ANDS) filed by Apotex.

Background

There are eight patents listed on the Patent Register against DEXILANT, two of which expired in 2022 or earlier. Of the remaining six patents, three expire on October 15, 2023, and the rest in 2025, 2028 and 2029.

When Apotex filed its ANDS in late 2021, it chose not to challenge the validity of the five patents due to expire in 2023 or earlier and delivered Notice of Allegations (NOAs) relating to the remaining three patents. On January 27, 2022, Takeda commenced an action relating to those three patents. The first action is scheduled to be heard on October 16, 2023.

Apotex subsequently changed its mind and served four additional NOAs in respect of the four patents due to expire in 2022 and 2023. Accordingly, Takeda commenced a second action on October 5, 2022 regarding one of the patents, nearly eight months after the first action. Based on confidential evidence not discussed in the decision, the Court found that Apotex’s change of heart was based on “commercial considerations rather than litigation strategy”.

Decision

The Court noted that Rule 105(a) of the Federal Courts Rules governs the consolidation of proceedings, the purpose of which is “the avoidance of a multiplicity of proceedings and the promotion of expeditious and inexpensive determination of those proceedings”. However, proceedings should not be consolidated if one of the parties would be prejudiced.

In declining to order consolidation of the two actions, the Court considered the following factors.

• Commonality of the parties: The Court acknowledged that the two actions have clear commonalities, as they involve the same parties (represented by the same counsel), same product, and same ANDS. In addition, there are factual issues in common between the two actions. However, the area of overlap is not so significant that hearing of the actions separately would prove entirely wasteful or duplicative.
• Prejudice to Takeda: The Court found no evidence to suggest that Takeda’s resources would be unduly strained by pursuing two actions separately. Separately, Takeda’s claim of prejudice arising from inconsistent pleadings and the risk of contradictory judgments is not persuasive. Any such risk will be eliminated as the findings of the first action are binding on both parties under the principles of issue estoppel. 
• Prejudice to Apotex: The Court found that delaying the first action to accommodate a consolidated trial would either force Apotex to launch “at risk” or delay its potential entry, both of which are prejudicial to Apotex. Takeda has failed to meet its burden to demonstrate that a consolidated trial in March 2024 would not cause prejudice to Apotex.
• Apotex’s conduct: The Court dismissed Takeda’s argument that any prejudice to Apotex is of its own making, noting that the Regulations do not impose a positive obligation on a second person to serve all NOAs at the same time or ensure all resulting litigation be determined within 24 months.

Given the determination above, the Court declined to address Takeda’s request for an extension of the 24-month period to accommodate the consolidation.

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