Merck Canada Inc. submitted a patent list for inclusion on the Patent Register under the Patented Medicines (Notice of Compliance) Regulations, SOR/93-133 (the Regulations). Merck was, unfortunately, one day past the 30-day deadline prescribed in theRegulations. Because of the missed deadline, the Minister of Health declined to add the patent to the Patent Register. Merck’s application for judicial review of the Minister’s decision was dismissed by the Federal Court on April 20, 2021. On November 22, 2021, the Federal Court of Appeal dismissed Merck’s appeal of that decision.
What you need to know
The Federal Court of Appeal’s decision affirms the importance of the 30-day deadline, addresses the applicability of COVID-19 legislation that suspended and extended time limits on administrative deadlines, and serves as an important reminder to those subject to administrative decision-making regimes that they should put their best foot forward when making arguments at first instance at the administrative level.
In Canada, there are two deadlines for listing a patent on Canada’s patent register1: for a newly issued patent, within 30 days of its issuance; and for a previously issued patent, with the regulatory submission (provided certain conditions are met). This decision deals with the first deadline.
The deadlines in subsections 4(5) and 4(6) of the Regulations are strict time limits to which parties must adhere. The Court of Appeal affirmed the importance of the 30-day deadline as part of the suite of regulatory objectives behind the Regulations.
While COVID-19 legislation may provide relief from some court-related timelines, it did not create sweeping relief from any and all deadlines. Regulated parties should carefully examine this legislation to see if a particular deadline fits within the terms of the statute. Regulated parties cannot conflate court-related deadlines with other statutory or regulatory deadlines, which are treated differently under the legislation.
The decision reinforces that regulated parties should ensure they put their best foot forward at first instance. Here, Merck raised additional, new arguments on judicial review of the Minister of Health’s decision. The Court of Appeal was reluctant to fault the Minister for failing to deal with arguments that had not been presented to her on the basis that these arguments could and should have been raised before the Minister. This ensures judicial review stays true to its purposes: it is a review, not a re-do.
The Court of Appeal’s decision in Merck v. Canada (Health)
Merck just missed the 30-day deadline for submitting its patent list
On May 12, 2020, the Minister of Health issued a patent to Merck Canada Inc. relating to its drug product, KEYTRUDA, approved for treating certain advanced-stage cancers. Section 4(6) of the Regulations gives the person who has filed a drug submission thirty days from the issuance of a patent to submit a patent list to Health Canada so that the patent can be added to the Patent Register. On June 12, 2020, thirty-one days later, Merck’s American parent discovered that the patent had been issued and that no patent list had been submitted. The patent lists were prepared and submitted later that day, but after the close of business. Under Health Canada filing rules, the patents were considered to be filed on the next business day, Monday, June 15, 2020.
Merck asked the Minister to extend the deadline, but she refused. Merck then sought judicial review of the Minister’s decision. The Federal Court dismissed this application on April 20, 2021. Merck appealed to the Federal Court of Appeal.
Merck’s arguments on appeal
Merck advanced three arguments on appeal:
The Minister’s interpretation of her discretion to extend the deadlines in subsection 4(6) of the Regulations was unreasonable.
COVID-19 legislation that suspended or extended certain deadlines applied to subsection 4(6).
In recognition of the exceptional circumstances surrounding COVID-19, and the facts of the case before it, the Court of Appeal should grant Merck an equitable remedy and allow the registration.
The Federal Court of Appeal rejected each argument.
The Minister reasonably concluded that she could not extend the deadline
Merck alleged that the Minister failed to justify her interpretation of the deadlines in the Regulations. The Federal Court of Appeal concluded that the Minister’s explanation, while brief, properly considered each of Merck’s arguments.
Merck’s primary argument to the Minister was that subsection 4(6) was permissive: It contained the word “may”. Merck contrasted this language to the deadline in subsection 4(5), which provides that, subject to subsection 4(6), patent lists “must” be submitted at the time new drug submissions are filed. To Merck, the subsection 4(6) deadline was therefore optional. The Court of Appeal disagreed. In its view, the Minister reasonably explained that the use of the word “may” in subsection 4(6) simply provides an alternative option to file outside of the deadline prescribed in subsection 4(5). It did not make the conditions underlying the deadline in subsection 4(6) optional.
The Federal Court of Appeal held that the Minister had properly supported her decision with reference to the RIAS (a regulatory impact analysis statement), which affirmed the importance of the 30-day deadline to the regulatory regime’s operation. The Minister had reasonably concluded that she had no authority to extend the deadline, whether on the basis that there would be no prejudice to others or at all.
Merck raised new arguments on judicial review
On judicial review, Merck had raised additional arguments to support its position on the interpretation of the prescribed deadline, some of which appeared to be inconsistent with positions it had taken before the Minister (and with other arguments raised on appeal). The Federal Court of Appeal noted that it could not fault the Minister for failing to address arguments that were not presented to her. In any event, it dismissed each argument.
First, Merck contended that the Minister was wrong when she said she had no discretion in administering the Patent Register. Merck pointed to established precedent to show that she did. The Federal Court of Appeal rejected this argument. Properly read, the Minister had not concluded that she had no discretion; rather, she decided that she could not exercise her discretion under section 3 if the patent list did not meet “the requirements for addition to the register”, which includes meeting the prescribed 30-day deadline.
Second, Merck argued that, following amendments to the Regulations in 2017, meeting the deadline in subsection 4(6) was no longer a condition of eligibility for listing the patents in the Patent Register. The Federal Court of Appeal rejected this argument outright, explaining that Merck’s “interpretation runs contrary to how these regulations have been understood and applied for years”. Clearer legislative language or commentary would have accompanied the amendments if such a sweeping change was indeed intended.
Finally, the Minister did not, according to the Federal Court of Appeal, err in failing to refer to the Federal Court’s decision in Procter & Gamble Pharmaceutical Canada Inc. v. Canada (Minister of Health),  4 F.C. 445. Procter & Gamble dealt with when the 30-day period commenced, not whether the 30-day limit was a strict requirement for filing. (It should be noted that Gauthier J.A., who wrote the Federal Court of Appeal decision, was the author of the Procter & Gamble decision.)
The effects of the Time Limits Act
At the outset of the COVID-19 pandemic, the federal government had introduced new legislation—the Time Limits and Other Periods Act (COVID-19), S.C. 2020, c. 11, s. 11 (the Time Limits Act)—to extend or suspend certain deadlines in federal statutes. In its argument to the Minister at first instance, Merck had not suggested that the Time Limits Act extended the deadline in subsection 4(6) of theRegulations. It simply referred to it as evidence of the exceptional circumstances warranting an exercise of the Minister’s discretion in its favour.
The Minister nevertheless addressed the applicability of the Time Limits Act, concluding that it did not extend or suspend the deadline in subsection 4(6). The Federal Court of Appeal found her conclusion to be reasonable. Subsection 6(1) of the Time Limits Actonly applied to limitation periods in respect of court proceedings and did not extend the time limits of administrative deadlines, such as the prescribed time within which to furnish a patent list. The Federal Court of Appeal noted that while section 7 of the Time Limits Act gives certain Ministers the authority to suspend or extend deadlines in certain listed legislation, the Patent Act and theRegulations were not included on that list.
In an argument put forward for the first time at the Federal Court of Appeal, Merck asked for equitable relief from the prescribed deadlines given the exceptional circumstances surrounding COVID-19. The Court of Appeal was very skeptical about its ability to grant equitable remedies that conflicted with clear rules.
It decided that, regardless of whether such a remedy was available, it would not be appropriate to grant this kind of remedy in this case because Merck only requested it for the first time on appeal. This left an inadequate evidentiary record for review and gave the Minister no chance to challenge Merck’s evidence or produce additional evidence. For example, there was “very little evidence” as to how Merck’s error occurred; the available evidence was limited in that it was based on hearsay and sometimes double hearsay.
Takeaways from Merck
First, neither the Minister of Health nor the courts are eager to provide relief from the Regulations, even when a patent list is mere days or hours after the 30-day deadline. The Court of Appeal expressed “much sympathy” for Merck but nevertheless enforced the regulatory deadlines.
Second, while COVID-19 legislation provides relief from some statutory and regulatory deadlines, it did not create sweeping relief from any and all deadlines. Regulated parties should carefully examine this legislation to see if a particular deadline fits within the terms of the statute. Merck reveals that courts are not prepared to offer expansive interpretations of this legislation to give parties extra time.
Third, individuals and entities subject to administrative action must put their best foot forward when making arguments at first instance at the administrative level. In the aftermath of the Supreme Court’s decision in Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, courts are empowered to quash administrative decisions that do not provide reasons that adequately justify the conclusions reached. But courts will not blame administrative decision-makers for failing to address arguments—particularly, unconventional or novel ones—that were never presented to them. Merck is a cautionary tale for parties who hope that judicial review is an avenue for designing new legal arguments. The Court of Appeal’s decision sends a firm reminder that judicial review is a review of the administrative decision, not a re-do.
Fourth, the issue date of a patent is known well in advance of the issue date. In view of the unforgiving deadline in seeking to list a patent, patent and regulatory workstreams will want to prepare the patent listing forms in Canada so that they can be finalized and filed after patent issuance and well before the listing deadline.
Canada’s version of the US Orange/Purple Book.
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