Open Court Principle Means No Secret Proceedings If They Would Directly Affect a Competitor's Rights

Equip: IP Litigation Case of the Week

Written By Dominique T. Hussey, Jeilah Y. Chan and Emily P. Kettel

Courts in Canada are presumed to be open and accessible to the public. Although a party’s commercial interests can be protected, a court will not grant a confidentiality order if doing so would prejudicially affect a third party. A court can only cloak a proceeding in secrecy where necessary to prevent a serious risk to an important interest and the benefits of these orders outweigh the downsides. 

In a recent decision governed by unusual facts, a drug product manufacturer sought a confidentiality order with the effect of preventing a non-party co-developer-turned-competitor from learning about a court proceeding that could have affected the competitor’s opportunity to enforce patents against the manufacturer. The Federal Court upheld the case management judge’s decision refusing to allow secret-keeping and requiring the manufacturer to provide its competitor with information about the proceeding.

Case

Innovator Company v Canada (Attorney General), 2017 FC 864 [Innovator Company]

IP Type

Patents

Summary

In Innovator Company, a pharmaceutical manufacturer (“Innovator”) filed a submission for regulatory approval of a new drug product co-developed with another company (“Other Innovator”). The co-developers then became competitors, each pursuing approval for a different strength of the drug. The Minister of Health approved Other Innovator’s product first and determined that Innovator’s unapproved drug submission triggered the application of the Patented Medicines (Notice of Compliance) Regulations (“Linkage Regulations”). The Linkage Regulations link drug approval to patent rights, normally delaying regulatory approval of a generic product until patent disputes identified by the brand manufacturer can be resolved. This case was unusual because it did not involve a brand and a generic company—but rather co-developers—and the Minster’s decision would require one co-developer (Innovator) to await drug approval until patent disputes were resolved with the other co-developer (Other Innovator).

Using the pseudonym “Innovator Company” to protect its identity, Innovator started judicial review proceedings in the Federal Court, seeking an order that Innovator’s product could be approved without engaging the Linkage Regulations.

In the context of these proceedings, Innovator requested a broad confidentiality order to protect its own identity, the drug product’s identity, and information provided to the Minister. Innovator did not want Other Innovator to know about the application for judicial review, as it would alert Other Innovator to the possible timing of its competitor’s market entry.

In response to the confidentiality order request, the Minister argued that although not a party to the Minister’s decision, Other Innovator was a necessary respondent to the judicial review with the right to be notified and participate. The case management judge agreed—a decision the Federal Court upheld.

The Court determined that (1) Other Innovator would be directly and prejudicially affected by the judicial review application, (2) an innovator has standing in a proceeding that determines whether it can avail itself of the protections offered under the Linkage Regulations, and (3) it was more efficient to allow participation at that stage than to invite proceedings challenging the decision later.

In closing, the judge commented that it is “anathema to the open court principle” for a commercial enterprise to ask the court to conduct a judicial review in secret.

For further information on how to protect and enforce your intellectual property rights, contact Dominique Hussey, Jeilah Chan, or another member of the Intellectual Property Litigation team.

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