Eli Lilly & Co. et al. v. Novopharm Ltd. et al., (2000) 265 N.R. 137 (FCA)

JudgeDesjardins, Sexton and Sharlow, JJ.A.
CourtFederal Court of Appeal (Canada)
Case DateOctober 16, 2000
JurisdictionCanada (Federal)
Citations(2000), 265 N.R. 137 (FCA)

Eli Lilly & Co. v. Novopharm (2000), 265 N.R. 137 (FCA)

MLB headnote and full text

Temp. Cite: [2001] N.R. TBEd. JA.030

Eli Lilly & Company and Eli Lilly Canada, Inc. (appellants/plaintiffs) v. Novopharm Limited (respondent/defendant)

(A-391-97)

Eli Lilly & Company and Eli Lilly Canada, Inc. (appellants/plaintiffs) v. Nu-Pharm Inc. (respondent/defendant)

(A-392-97)

Eli Lilly & Company and Eli Lilly Canada, Inc. (appellants/plaintiffs) v. Apotex Inc. (respondent/defendant)

(A-393-97)

Indexed As: Eli Lilly & Co. et al. v. Novopharm Ltd. et al.

Federal Court of Appeal

Desjardins, Sexton and Sharlow, JJ.A.

December 19, 2000.

Summary:

The plaintiffs' tradename for their fluoxetine hydrochloride capsules was Prozac. The plaintiffs brought passing off actions against three defendants, seeking to prevent them from marketing their generic fluoxetine hydrochloride capsules in an appearance similar to the plaintiffs' capsules.

The Federal Court of Canada, Trial Division, in a decision reported 130 F.T.R. 1, dismissed the actions. The plaintiffs appealed.

The Federal Court of Appeal dismissed the appeals.

Torts - Topic 5141

Interference with economic relations - Unfair competition - Passing off - General - In 1992, the Supreme Court of Canada, in Ciba-Geigy Canada Ltd. v. Apotex Inc., had occasion to deal with the issue of passing-off - The Federal Court of Appeal interpreted the Ciba-Geigy decision in the context of an action relating to the use by a generic drug company of a trade dress for its pharmaceutical product that was similar to that introduced to the market by the inventor of the drug - The court stated that Ciba-Geigy stood for two propositions: (1) the target clientele or the relevant universe in the pharmaceutical field encompasses the "patient"; and (2) the general rules in a passing-off action apply to the prescription drug market without any difference or exception - The court stated that the latter proposition meant that similarities in shape, size and colour of a capsule may found a passing-off action if the three necessary components were met - See paragraphs 28 to 49.

Torts - Topic 5141

Interference with economic relations - Unfair competition - Passing off - General - In 1992, the Supreme Court of Canada, in Ciba-Geigy Canada Ltd. v. Apotex Inc., had occasion to deal with the issue of passing-off - The Federal Court of Appeal interpreted the Ciba-Geigy decision in the context of an action relating to the use by a generic drug company of a trade dress for its pharmaceutical product that was similar to that introduced to the market by the inventor of the drug - The court stated that Ciba-Geigy did not stand for the proposition that pharmaceutical manufacturers could not, as a start, adopt the trade dress or get-up of capsules found already in the market - What Ciba-Geigy stood for was that they could not do so if the prescription drug had acquired distinctiveness and the copying was likely to lead to confusion - See paragraphs 28 to 49.

Torts - Topic 5144

Interference with economic relations - Unfair competition - Passing off - Deception of customers - Requirement of - [See second Torts - Topic 5141 and second Torts - Topic 5152 ].

Torts - Topic 5144

Interference with economic relations - Unfair competition - Passing off - Deception of customers - Requirement of - The plaintiffs brought passing off actions against three drug manufacturers (the defendants) to prevent them from marketing their generic fluoxetine hydrochloride (Prozac) capsules in an appearance similar to the plaintiffs' capsules - The trial judge dismissed the action - The trial judge considered the relevant market to be potential as well as actual customers, including doctors, pharmacists and patients - The defendants appealed, arguing that the trial judge erred in defining the relevant universe - Rather, they claimed that the universe included actual users of fluoxetine and included in the category of potential customers those members of the public who had suffered depression and had seen their doctors, but not the rest of the public - The Federal Court of Appeal refused to disturb the trial judge's ruling where there was no palpable or overriding error - See paragraphs 51 to 54.

Torts - Topic 5147

Interference with economic relations - Unfair competition - Passing off - Get-up -The plaintiffs brought passing off actions against three drug manufacturers (the defendants) to prevent them from marketing their generic fluoxetine hydrochloride (Prozac) capsules in an appearance similar to the plaintiffs' capsules - The trial judge dismissed the action, holding that the plaintiffs had not proven that the capsule appearance had acquired the requisite reputation in the market place as a distinguishing feature of their product - The Federal Court of Appeal held that the trial judge's fact finding was not one that warranted interference - See paragraphs 55 to 57.

Torts - Topic 5147

Interference with economic relations - Unfair competition - Passing off - Get-up -[See second Torts - Topic 5141 ].

Torts - Topic 5152

Interference with economic relations - Unfair competition - Passing off - Pharmaceutical products - [See both Torts - Topic 5141, second Torts - Topic 5144 , and first Torts - Topic 5147 ].

Torts - Topic 5152

Interference with economic relations - Unfair competition - Passing off - Pharmaceutical products - The plaintiffs brought passing off actions against three drug manufacturers (the defendants) to prevent them from marketing their generic fluoxetine hydrochloride (Prozac) capsules in an appearance similar to the plaintiffs' capsules - The trial judge dismissed the action, holding that there was no "significant likelihood of confusion" - The plaintiffs appealed, arguing that the "significant likelihood of confusion" was not the proper test - The Federal Court of Appeal dismissed the appeal - The court stated that there are no "magic" words to be used to define the test - Here the trial judge correctly directed herself to the question of whether the evidence established that there was a likelihood of confusion that surpassed the de minimis standard - See paragraphs 58 to 61.

Trademarks, Names and Designs - Topic 1702

Trademarks - Licensing - Interpretation of licences - [See Trademarks, Names and Designs - Topic 1719 ].

Trademarks, Names and Designs - Topic 1719

Trademarks - Licensing - Effect of use of trademark by licensee - In 1991 Lilly U.S. granted Lilly Canada the right to sell Prozac and use trademarks, but not to sublicense - Lilly decided to market its fluoxetine as a generic product so Lilly Canada entered into an agreement with two companies (PMS) regarding generic products - In 1995, the 1991 agreement was amended to "confirm" that Lilly Canada had always been licensed to use the product appearance of Prozac and to allow sublicensing to PMS - In November 1995, Lilly Canada granted PMS the right to use the product appearance - The Lilly companies sued three generic drug companies (the defendants) for passing off - The defendants argued that the claim should fail because no licence agreement existed granting Lilly Canada the right to use the capsule appearance as a trademark - The Federal Court of Appeal rejected the defendants' argument -The 1991 Agreement and, in case of doubt, the 1995 Agreement and s. 50(1) of the Trade-marks Act, disposed completely of the defendants' argument - See paragraphs 63 to 83.

Trademarks, Names and Designs - Topic 3068

Trademarks - Unfair competition - Passing off - [See both Torts - Topic 5141 , second Torts - Topic 5144 , first Torts - Topic 5147 and second Torts - Topic 5152 ].

Cases Noticed:

CIBA-Geigy Canada Ltd. v. Apotex Inc., [1992] 3 S.C.R. 120; 143 N.R. 241; 58 O.A.C. 321; 44 C.P.R.(3d) 289, appld. [para. 27, footnote 21].

Perry v. Truefitt (1842), 6 Beav. 66; 49 E.R. 749 (Rolls Ct.), refd to. [para. 34, footnote 24].

Oxford Pendaflex Canada Ltd. v. Korr Marketing Ltd. et al., [1982] 1 S.C.R. 494; 41 N.R. 553, refd to. [para. 36, footnote 27].

Ayerst, McKenna & Harrison Inc. v. Apotex Inc. (1983), 72 C.P.R.(2d) 57; 146 D.L.R.(3d) 93; 41 O.R.(2d) 366 (C.A.), refd to. [para. 41, footnote 37].

Hodkingson & Corby Ltd. v. Wards Mobility Services Ltd., [1995] F.S.R. 169 (Ch. D.), refd to. [para. 48, footnote 45].

Stein Estate v. Ship Kathy K, [1976] 2 S.C.R. 802; 6 N.R. 359, refd to. [para. 54, footnote 50].

Parke, Davis & Co. v. Empire Laboratories Ltd. (1964), 43 C.P.R. 1 (S.C.C.), refd to. [para. 55, footnote 51].

Williams (J.B.) Co. v. Bronnley (H.) & Co. (1909), 26 R.P.C. 765, refd to. [para. 55, footnote 51].

Caterpillar Tractor Co. v. Clark Equipment Co. (1980), 61 C.P.R.(2d) 92 (T.M. Opp. Bd.), refd to. [para. 59, footnote 56].

Memorex Corp. v. Memotec Data Inc. (1989), 24 C.P.R.(3d) 264 (T.M. Opp. Bd.), refd to. [para. 59, footnote 57].

Lancome Parfums et Beaute v. House of Devonshire (1991), 38 C.P.R.(3d) 432 (T.M. Opp. Bd.), refd to. [para. 59, footnote 58].

Mark's Work Warehouse Ltd. v. Hudson's Bay Co. (1980), 15 C.P.R.(3d) 376 (Alta. Q.B.), refd to. [para. 59, footnote 58].

487497 Ontario Ltd. et al. v. Heintzman et al. (1989), 26 C.P.R.(3d) 369 (Ont. H.C.), refd to. [para. 59, footnote 58].

Walt Disney Productions v. Fantasyland Hotels Inc. (1994), 154 A.R. 161; 56 C.P.R.(3d) 129 (Q.B.), refd to. [para. 59, footnote 59].

Walt Disney Productions v. Triple Five Corp. et al. (1994), 149 A.R. 112; 63 W.A.C. 112; 53 C.P.R.(3d) 129 (C.A.), refd to. [para. 59, footnote 59].

Sun Life Assurance Co. of Canada v. Sunlife Juice Ltd. (1988), 22 C.P.R.(3d) 244 (Ont. H.C.), refd to. [para. 59, footnote 60].

TGI Friday's of Minnesota Inc. v. Registrar of Trademarks (1999), 241 N.R. 362 (F.C.A.), refd to. [para. 79, footnote 69].

Apotex Inc. and Novopharm Ltd. v. Wellcome Foundation Ltd. (2000), 262 N.R. 137 (F.C.A.), refd to. [para. 81, footnote 71].

Crean (Robert) & Co. v. Dobbs & Co., [1930] S.C.R. 307; [1930] 3 D.L.R. 22, refd to. [para. 83, footnote 72].

Statutes Noticed:

Prescription Drug Cost Regulation Act, S.O. 1986, c. 27, sect. 4(2) [para. 41].

Trade-marks Act, R.S.C. 1985, c. T-13, sect. 7(b) [para. 1 et seq.]; sect. 50(1), sect. 50(2) [para. 73].

Authors and Works Noticed:

Canada, Report of the Trademark Law Revision Committee to the Secretary of State of Canada (1953), 18 C.P.R. 1, pp. 57, 58, 59 [para. 76, footnote 65].

Fox, Harold G., The Canadian Law of Trademarks and Unfair Competition (3rd Ed. 1972), p. 9 [para. 76, footnote 66].

Hughes, R.T., Hughes on Trademarks (1984) (Looseleaf), s. 77, p. 682 [para. 59, footnote 59]; p. 570 [para. 78, footnote 68].

Nadeau, André, and Nadeau, Richard, Traité pratique de la responsabilité civile délictuelle (1971), generally [para. 37, footnote 31].

Counsel:

James Kokonis, Anthony Creber, Charles Beale and Patrick Smith, for the appellants;

Harry Radomski, Richard Naiberg and David Scrimger, for the respondents, Apotex & Nu-Pharm;

Douglas Deeth and Diane LaCalamina, for the respondent Novopharm.

Solicitors of Record:

Gowling, Strathy, Henderson, Toronto, Ontario, for the appellant;

Goodwin Phillips Vineberg, Toronto, Ontario, for the respondents, Apotex & Nu-Pharm;

Deeth Williams Wall, Toronto, Ontario, for the respondent, Novopharm.

These appeals were heard on October 16, 2000, at Toronto, Ontario, by Desjardins, Sexton and Sharlow, JJ.A., of the Federal Court of Appeal. The following decision of the court was delivered by Desjardins, J.A., on December 19, 2000.

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