Eli Lilly & Co. et al. v. Apotex Inc. et al., 2004 FC 1445

• Jurisdiction: Federal Jurisdiction (Canada)
• Court: Federal Court (Canada)
• Judge: Hugessen, J.
• Citation: 2004 FC 1445,(2004), 262 F.T.R. 154 (FC)
• Date: 13 October 2004

Eli Lilly & Co. v. Apotex Inc. (2004), 262 F.T.R. 154 (FC)

MLB headnote and full text

Temp. Cite: [2004] F.T.R. TBEd. NO.007

Eli Lilly and Company and Eli Lilly Canada Inc. (plaintiffs/defendants by counterclaim) v. Apotex Inc. (defendant/plaintiff by counterclaim) and Shionogi & Co. Ltd. (defendant by counterclaim)

(T-1321-97; 2004 FC 1445)

Indexed As: Eli Lilly & Co. et al. v. Apotex Inc. et al.

Federal Court

Hugessen, J.

October 20, 2004.

Summary:

Eli Lilly sued Apotex for infringement of eight patents. Of the eight patents in question, four had been assigned to Eli Lilly by Shionogi. In its statement of defence and counterclaim, Apotex asserted that Eli Lilly had contravened s. 45 of the Competition Act, thereby entitling Apotex to damages under s. 36 of the Act. Apotex added Shionogi as a defendant by counterclaim as part of its claim under the Competition Act. Eli Lilly moved for summary judgment dismissing the paragraphs of Apotex's statement of defence and counterclaim that were based on an anti-competitive agreement between Eli Lilly and Shionogi and dismissing the counterclaim against Shionogi. Shionogi moved for summary judgment dismissing the counterclaim against it. Shionogi also appealed a Prothonotary's refusal to strike Apotex's counterclaim against it.

The Federal Court, in a decision reported at [2003] F.T.R. Uned. 685, allowed the appeal from the prothonotary's decision and granted both motions for summary judgment. The court struck out the paragraphs of Apotex's statement of defence and counterclaim that were based on allegations of an anti-competitive agreement and dismissed the counterclaim against Shionogi. Apotex appealed.

The Federal Court of Appeal, in a decision reported at 323 N.R. 180, allowed the appeal. The court remitted the motions for summary judgment to the Federal Court for reconsideration and ordered that the struck paragraphs and the counterclaim against Shionogi be reinstated.

The Federal Court allowed both motions for summary judgment. The court struck out the relevant paragraphs of Apotex's defence and counterclaim against Eli Lilly and dismissed the claims against Shionogi.

Patents of Invention - Topic 10

General - Assignments - Apotex commenced an action, claiming that Eli Lilly contravened s. 45 of the Competition Act, thereby entitling Apotex to damages under s. 36 of the Act - Of the eight patents in question, four had been assigned to Eli Lilly by Shionogi (a defendant by counterclaim) - Apotex asserted that the consolidation of Shionogi and Eli Lilly was more than the mere exercise of patent rights and that the assignment agreement gave rise to an undue lessening of competition contrary to s. 45(1) - The Federal Court granted summary judgment dismissing Apotex's suit under s. 36 - Although there was an agreement between Lilly and Shionogi and although it had the effect of lessening competition, that lessening was not undue because it was authorized by s. 50 of the Patent Act - The agreement might be reviewable under some other Part of the Competition Act, but that would not bring it within the ambit of s. 45 and would not be enough to form the basis of Apotex's suit under s. 36 - That suit had no foundation in law - See paragraphs 11 to 23.

Trade Regulation - Topic 507.1

Competition - General - Application of legislation - Patents - [See Patents of Invention - Topic 10 ].

Trade Regulation - Topic 507.1

Competition - General - Application of legislation - Patents - The Federal Court stated that the Patent Act did not have the effect of insulating from liability under the Competition Act any and every agreement which might also have to do with the exercise of patent rights - However, where an agreement dealt only with patent rights and was itself specifically authorized by the Patent Act, any lessening of competition resulting therefrom, but authorized by Parliament, was not "undue" and was not an offence under s. 45 of the Competition Act - The two statutes had to be read together harmoniously and that could only be done if the meaning of the key word "undue" in s. 45 was limited to restrictions on competition which were not specifically authorized by the Patent Act - See paragraphs 9 and 10.

Cases Noticed:

Kimberly-Clark of Canada Ltd. v. Procter & Gamble Inc. and Molnlycke AB (1991), 132 N.R. 315; 36 C.P.R.(3d) 493 (F.C.A.), folld. [para. 5].

Statutes Noticed:

Competition Act, R.S.C. 1985, c. C-34, sect. 45 [para. 9].

Counsel:

Anthony Creber and John Norman, for the plaintiffs;

Harry Radomski and David Scrimger, for the defendant, Apotex;

David Morrow and Colin Ingram, for the defendant, Shionogi.

Solicitors of Record:

Gowling Lafleur Henderson LLP, Ottawa, Ontario, for the plaintiffs;

Goodmans LLP, Toronto, Ontario, for the defendant, Apotex;

Smart and Biggar, Ottawa, Ontario, for the defendant, Shionogi.

Hugessen, J., of the Federal Court, heard these motions at Ottawa, Ontario, on October 13, 2004, and delivered the following reasons for order on October 20, 2004.