The Federal Court has denied a motion by Dr. Reddy's Laboratories' (Dr. Reddy's) seeking to participate in a common validity issues trial in actions concerning four other generic versions of the same drug under the Patented Medicines (Notice of Compliance) Regulations (PM(NOC) Regulations).

Background

As we reported, the Federal Court has made a number of orders concerning common validity trials in actions commenced by Bayer Inc. (Bayer) under the PM(NOC) Regulations in respect of generic versions of XARELTO (rivaroxaban). The common validity issues in these earlier actions against Apotex Inc., Teva Canada Limited, Taro Pharmaceuticals Inc., and Sandoz Canada Inc. are now scheduled to be heard before Pentney J. in September 2020, with separate infringement trials for each generic scheduled afterward.

Dr. Reddy's served its Notice of Allegation on Bayer on June 7, 2019, after the other four actions were already underway. Bayer brought its action against Dr. Reddy's on July 22, 2019, less than two weeks before the third and fourth generics were added to the common validity trial. By this motion, Dr. Reddy's sought to join in the common validity trial. Bayer and several of the generics opposed the motion.

Complications outweigh efficiencies

Dr. Reddy's argued that its motion was on all fours with the two previous decisions granting participation in the common validity trial against Bayer. Given that discoveries were largely complete, Dr. Reddy's also declared itself ready to accept the transcript of the discoveries of Bayer's representatives and of the inventors and the answers to undertakings already provided, and to comply with such schedule as will be necessary for it to be ready to proceed to a trial on the invalidity issues in September 2020.

The Court declined to exercise its discretion to grant the motion. In doing so, it had regard to two main factors:

  • The requirement to determine matters under the Regulations within a 24-month time frame; and
  • The overall balance of interests as between innovators, generics, and the wider public interest.

The Court acknowledged that hearing the common invalidity issues in the Dr. Reddy's action alongside the other four would be a more efficient use of Court resources and avoid duplication, but held that adding a fifth generic party would jeopardize its ability to decide the earlier actions within 24 months. Case Management Judge Tabib remarked that "adding yet another set of lawyers to an already crowded proceeding adds a layer of complexity and unwieldiness that tips the efficiency balance against the addition of another party".

The Court also held that conducting a complete separate trial for Dr. Reddy's is a viable alternative in these circumstances. Even without Dr. Reddy's participation in the common invalidity issues trial, the decisions in the earlier actions will likely narrow the issues for trial in Dr. Reddy's action. In any event, the Court found that there would still be enough time to hear a full two-week trial on all issues in the Dr. Reddy's action, before the same judge, within its 24-month period.

The Court declined to award costs.

The case is Bayer Inc. v. Dr. Reddy's Laboratories Ltd., 2019 FC 1408.

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