Laboratoires Servier et al. v. Apotex Inc. et al., (2008) 332 F.T.R. 193 (FC)

• Judge: Snider, J.
• Court: Federal Court (Canada)
• Case Date: July 02, 2008
• Jurisdiction: Canada (Federal)
• Citations: (2008), 332 F.T.R. 193 (FC);2008 FC 825

Lab. Servier v. Apotex Inc. (2008), 332 F.T.R. 193 (FC)

MLB headnote and full text

Temp. Cite: [2008] F.T.R. TBEd. AU.009

Les Laboratoires Servier, Adir, Oril Industries, Servier Canada Inc., Servier Laboratories (Australia) Pty Ltd. and Servier Laboratories Limited (plaintiffs/defendants by counterclaim) v. Apotex Inc. and Apotex Pharmachem Inc. (defendants/plaintiffs by counterclaim)

(T-1548-06; 2008 FC 825)

Indexed As: Laboratoires Servier et al. v. Apotex Inc. et al.

Federal Court

Snider, J.

July 2, 2008.

Summary:

ADIR and its corporate affiliates (the plaintiffs) manufactured, distributed and sold a drug (COVERSYL), used primarily in the treatment of hypertension and cardiac insufficiency. The active ingredient in COVERSYL was perindopril, a compound covered by Canadian Patent No. 1,341,196 ('196 Patent), which was owned by ADIR. Since at least 2006, one of the defendants, Apotex Pharmachem Inc. (Pharmachem), manufactured a generic version of perindopril erbumine tablets in its facility in Brantford, Ontario, in 2 mg, 4 mg and 8 mg strengths, and tablets containing a combination of perindopril erbumine and indapamide (a diuretic). The products were sold to the other defendant, Apotex Inc., which company, in turn, sold the 8 mg tablets in Canada and exported all dosages and the combination product to affiliated companies and others abroad. The plaintiffs commenced an action, claiming that Pharmachem and Apotex Inc. (jointly referred to as Apotex) infringed its '196 Patent by the manufacture of all perindopril products in Canada and by the sale of the 8 mg tablets in Canada. Further, the plaintiffs claimed that Apotex Inc. induced others to infringe the '196 Patent. In its defence and counterclaim, Apotex asserted that all of the plaintiffs with the exception of Servier Canada Inc. (Servier Canada) and ADIR lacked standing to bring the action. While Apotex did not explicitly deny that its perindopril products fell within the claims of the '196 Patent, it contended that the patent was invalid on a number of grounds. Apotex further argued that the manner in which ADIR obtained the '196 Patent should disentitle it from enforcing that monopoly, even if otherwise valid. The '196 Patent was obtained by ADIR only after conflict proceedings which were ultimately resolved by a court-endorsed agreement among ADIR and two other parties (also drug companies). As a result of the manner in which the patent was obtained, Apotex also claimed damages pursuant to s. 36 of the Competition Act in respect of an alleged breach of s. 45 of the Act.

The Federal Court concluded that: (1) only ADIR, as patentee, and the plaintiff Servier Canada, who claimed under the patentee, had standing to bring this action; (2) the '196 Patent was valid and infringed by Apotex through the manufacture, in Canada, of the 2 mg, 4 mg and 8 mg strengths and the combination tablets and through the manufacture and sale in Canada of the 8 mg tablets; (3) Apotex had not induced others to breach the '196 Patent; and (4) Apotex failed in its claim for damages under the Competition Act. The court granted a permanent injunction against Apotex and allowed the plaintiffs to elect an accounting of profits. Damages were to be assessed at a later date.

Courts - Topic 4021.1

Federal Court of Canada - Jurisdiction - Federal Court - Decisions of federal boards, commissions or tribunals - ADIR owed a patent (the '196 patent) for perindopril (claim 5), a compound used in COVERSYL, a drug used to treat hypertension and cardiac insufficiency - Servier Canada exploited the patent rights in Canada - ADIR and Servier Canada (the plaintiffs) sued a generic drug manufacturer (Apotex), alleging patent infringement - Apotex counterclaimed, alleging that claim 5 which had been corrected twice by the Commissioner of Patents was invalid because the corrections were not made in accordance with s. 8 of the Patent Act - The plaintiffs argued that Apotex could not attack the Commissioner's decision to issue the certificates of correction in this patent infringement action, but rather had to proceed by way of judicial review (Federal Courts Act, s. 18.1) - The Federal Court, while acknowledging that the issue was not free from doubt, held that Apotex did not have to proceed by way of judicial review - Apotex had not been a party to the proceedings that resulted in the certificates of correction, so it was arguable that Apotex had no standing to challenge the issuance of certificates by way of judicial review in any event - Apotex would not likely even have knowledge that the certificates were issued so it would have been difficult for Apotex to meet the 30-day limitation period for commencing a judicial review application - Further, the court noted that Apotex's counterclaim respecting the validity of claim 5 was brought under three different provisions of the Patent Act which appeared to permit Apotex to raise its allegations of unlawful decisions of the Commissioner in the context of an action - See paragraphs 186 to 198.

Patents of Invention - Topic 572

Registration - Amendment - Correction of errors - ADIR owed a patent (the '196 patent) for perindopril (claim 5), a compound used in COVERSYL, a drug used to treat hypertension and cardiac insufficiency - Servier Canada exploited the patent rights in Canada - Claim 5 had been amended twice by the Commissioner of Patents to correct mistakes in the scientific nomenclature - ADIR and Servier Canada (the plaintiffs) sued a generic drug manufacturer (Apotex), alleging patent infringement - Apotex counterclaimed, alleging that claim 5 was invalid because the corrections were not made in accordance with s. 8 of the Patent Act - The Federal Court discussed the standard of review - The court held that according to the jurisprudence, a Commissioner's decision under s. 8 involved two steps, each being reviewable on the standard of reasonableness - Therefore, since the jurisprudence had already determined satisfactorily the degree of deference to be accorded to the Commissioner's decision, the court, according to Dunsmuir v. NB (SCC) did not need to conduct a further analysis of the standard of review - However, the court held that it came to the same conclusion on the standard of review after carrying out its own review of the relevant factors - The court concluded that the decisions by the Commissioner were reasonable and should not be overturned - Therefore, the '196 patent was not invalid by reasons of unlawfully issued certificates of correction - See paragraphs 199 to 209.

Patents of Invention - Topic 575

Registration - Amendment - Appeals or judicial review - [See Courts - Topic 4021.1 and Patents of Invention - Topic 572 ].

Patents of Invention - Topic 1026

The specification and claims - Construction of a patent - General - The Federal Court reviewed the law of claims construction - The court stated, inter alia, that the first step in a patent suit was to construe the claims - The jurisprudence required the court to interpret the claims in dispute in a purposive way in order "to achieve fairness and predictability and to define the limits of the monopoly" - Furthermore, where necessary, the whole of the patent, and not only the claims, should be interpreted - Construction of the claims was a matter for the Court to determine - The court should construe the claims in light of the description in the specification, assisted, where necessary, by experts as to the meaning of technical terms if they could not be understood by the Court from reading the specification - The court stated that it was also important to recognize that purposive construction should be directed at the points at issue between the parties - At all times, purposive construction required the court to construe the claims through the eyes of an ordinary person skilled in the art - Where the patent was of a highly technical nature, the person skilled in the art would be someone possessing a high degree of expert scientific knowledge and skill in the particular branch of the science to which the patent related - The court noted that where a patent was issued under the old Patent Act, all claims at issue were to be construed as of the date of issue and grant of the patent - See paragraphs 96 to 100.

Patents of Invention - Topic 1026

The specification and claims - Construction of a patent - General - The Federal Court discussed how to construe the claims in a patent where the description referred to a class of chemical compounds but the patentee claimed only a portion of the compounds identified in the description - See paragraphs 125 to 129.

Patents of Invention - Topic 1030

The specification and claims - Construction of a patent - "Person skilled in the art" - What constitutes - ADIR owed a patent (the '196 Patent) for perindopril, a compound used in COVERSYL, a drug used to treat hypertension and cardiac insufficiency - Servier Canada exploited the patent rights in Canada - ADIR and Servier Canada (the plaintiffs) sued a generic drug manufacturer (Apotex), alleging patent infringement - The Federal Court held that for patent construction purposes the "person skilled in the art" to whom the '196 Patent was addressed was an individual having at least a few years experience in academia or industry in their respective field and holding a Masters or Ph.D. in synthetic organic chemistry, medicinal chemistry, pharmacology, or biochemistry, or, a medical doctor having several years experience treating hypertension or cardiac insufficiency in humans - See paragraphs 101 to 104.

Patents of Invention - Topic 1032

The specification and claims - Construction of a patent - Particular patents - ADIR owed a patent (the '196 Patent) for perindopril, a compound used in COVERSYL, a drug used to treat hypertension and cardiac insufficiency - Servier Canada exploited the patent rights in Canada - ADIR and Servier Canada (the plaintiffs) sued a generic drug manufacturer (Apotex), alleging patent infringement - The '196 Patent was written in French and claims 1, 2, 3 and 5 were in issue - Two corrections had been made to claim 5 after the initial grant - The Federal Court construed the claims accordingly - The court held that, in light of the description in the patent, which outlined the general structure of a class of compounds (General Formula 1) and the properties, preparation, and utility of compounds falling into the general class, a person skilled in the art would construe the claims as follows: claim 1 corresponded to a subset of compounds falling under General Formula 1, claims 2, 3 and 5 were dependent on claim 1, claim 2 corresponded to a particular subset of compounds falling under claim 1, claim 3 corresponded to a still narrower set of compounds falling under claim 1 and claim 5 as corrected corresponded to a single stereoisomer (i.e., claim 5 encompassed perindopril as well as its pharmaceutically acceptable salts) - Although worded as a dependent claim, it was to a single compound - The court rejected Apotex's argument that the claims in the '196 Patent claims were to be construed as being examples of one alleged invention or class of compounds encompassing all of General Formula 1 - Rather, the court held that the claims 1, 2, 3 and 5 formed one or more inventions that were distinct from the larger class of compounds of General Formula 1 in the description - See paragraphs 105 to 133.

Patents of Invention - Topic 1126

The specification and claims - The description - General - [See second Patents of Invention - Topic 1026 ].

Patents of Invention - Topic 1136

The specification and claims - The description - Chemicals - [See second Patents of Invention - Topic 1026 and Patents of Invention - Topic 1032 ].

Patents of Invention - Topic 1582

Grounds of invalidity - Lack of "inventive ingenuity" (obviousness) - Test for obviousness - The Federal Court reviewed the test for obviousness - See paragraphs 223 to 228.

Patents of Invention - Topic 1589

Grounds of invalidity - Lack of "inventive ingenuity" (obviousness) - Particular patents - ADIR owed a patent (the '196 Patent) for perindopril, a compound used in COVERSYL, a drug used to treat hypertension and cardiac insufficiency - Servier Canada exploited the patent rights in Canada - ADIR and Servier Canada (the plaintiffs) sued a generic drug manufacturer (Apotex), alleging patent infringement - Apotex claimed that the '196 Patent was void for obviousness, because the plaintiffs had taken the backbone of an invention by another drug manufacturer and added a 6,5 perhydroindole bicyclic ring - The Federal Court was not persuaded that the addition of the 6,5 perhydroindole bicyclic ring was obvious - The court therefore held that Apotex had failed to meet its burden of establishing, on a balance of probabilities, that the claims of the '196 were obvious - See paragraphs 223 to 266.

Patents of Invention - Topic 1593

Grounds of invalidity - Lack of "inventive ingenuity" (obviousness) - Prior art - ADIR owed a patent (the '196 Patent) for perindopril, a compound used in COVERSYL, a drug used to treat hypertension and cardiac insufficiency (an ACE inhibitor) - Servier Canada exploited the patent rights in Canada - ADIR and Servier Canada (the plaintiffs) sued a generic drug manufacturer (Apotex), alleging patent infringement - Apotex claimed that the '196 Patent was invalid for obviousness, citing prior art - The plaintiffs claimed that some of the art cited by Apotex should not be relied upon because reliance on prior art outside the field of ACE inhibition was "not only improper at law, it was scientifically unsound" and a European patent application relied on by Apotex, the Tanabe Application, was not known by Apotex's expert prior to this case - The Federal Court, as to the plaintiffs' first argument, disagreed that reliance on prior art outside the field at issue was always improper in law - However, there would have to be some reason, supported by evidence, which would justify a person skilled in the art to look beyond the field at issue, which was not proven by Apotex in this case - The court held that the plaintiffs' second argument went to the weight of the expert's testimony and did not warrant excluding the Tanabe Application from the relevant field of prior art - See paragraphs 229 to 241.

Patents of Invention - Topic 1621

Grounds of invalidity - Not true or first inventor - General - ADIR owed a patent (the '196 Patent) for perindopril (an ACE inhibitor) - Servier Canada exploited the patent rights in Canada - ADIR and Servier Canada (the plaintiffs) sued a generic drug manufacturer (Apotex), alleging patent infringement - Apotex claimed that the '196 Patent was invalid, raising a lack of first inventorship (Patent Act, s. 27(1)(a)) - The plaintiffs argued that s. 61(1)(b) of the Patent Act prohibited Apotex from challenging the inventorship of the '196 Patent - Section 61(1)(b) provided that no patent would be declared invalid on the grounds of prior inventorship by some other person unless the challenging party could establish that the other person had, before the issue of the patentee's patent, applied for patent in Canada "on which conflict proceedings should have been directed" - The plaintiffs asserted that s. 61(1)(b) applied to the case at bar because, not only should conflict proceedings have been directed, they actually were so directed - In effect, they argued that, under s. 61(1)(b), an attack on the basis of prior inventorship was not permitted where, as here, another person's invention was known and put into conflict proceedings - That is, s. 61(1)(b) applied only when there had been a "missed conflict" - The Federal Court agreed with this interpretation (i.e., that there had to be a missed conflict before Apotex could raise a first inventorship issue) - The court emphasized that such an interpretation was limited to precluding parties where there was no "missed conflict" from advancing an allegation of prior inventorship - Other grounds for questioning the validity of a patent were unaffected - Here, there was no missed conflict - In any event, the court opined that Apotex failed to satisfy its evidentiary burden of demonstrating that its expert was the first inventor - See paragraphs 381 to 456.

Patents of Invention - Topic 1721

Grounds of invalidity - Lack of utility and operability - General - The Federal Court reviewed the law respecting the concept of utility - The court stated, inter alia, that the overarching concept relating to the law of utility was that, as of the relevant date, there had to be a demonstration of utility of the invention, or lacking that, a sound prediction of utility based on the information and science available at the time of the prediction - The court stated that as with other questions of validity, the person challenging the validity of the patent for want of utility, had the burden of proving a lack of utility (i.e., the burden of showing that the invention did not work, either in the sense that it did not operate at all, or more broadly, that it did not do what the specification promised that it would do) - See paragraphs 267 to 272.

Patents of Invention - Topic 1723

Grounds of invalidity - Lack of utility and operability - Chemical products and substances intended for food and medicine - ADIR owed a patent (the '196 Patent) for perindopril, a compound used in COVERSYL, a drug used to treat hypertension and cardiac insufficiency - Servier Canada exploited the patent rights in Canada - ADIR and Servier Canada (the plaintiffs) sued a generic drug manufacturer (Apotex), alleging patent infringement - Apotex claimed that three of the patent claims (1, 2 and 3) were invalid for lack of utility - Claim 1 related to subset of compounds falling under General Formula 1 as outlined in the description, claim 2 corresponded to a particular subset of compounds falling under claim 1, and claim 3 corresponded to a still narrower set of compounds falling under claim 1 - Apotex argued that the '196 Patent claimed that all of the claimed compounds would have ACE inhibitory effect and therapeutic use as an anti-hypertensive - The Federal Court held that the promises of the '196 Patent were more narrow (i.e., the court concluded that the promise of the '196 Patent was that all of the compounds claimed would have some level of ACE inhibition when measured in vitro and that some of the compounds would have sufficient activity to treat hypertension and cardiac insufficiency) - The court concluded that Apotex did not meet its burden of showing that the compounds of claims 1, 2 and 3 lacked utility - See paragraphs 267 to 343.

Patents of Invention - Topic 1724

Grounds of invalidity - Lack of utility and operability - Doctrine of sound prediction - [See Patents of Invention - Topic 1721 ].

Patents of Invention - Topic 1724

Grounds of invalidity - Lack of utility and operability - Doctrine of sound prediction - The Federal Court referred to the test that must be satisfied in order to establish that a sound prediction has been made by the purported inventor - The three elements of the test were: "1. There must be a factual basis for the prediction; 2. The inventor must have an articulable line of reasoning from which the desired result can be inferred from the factual basis; and 3. There must be proper disclosure, although it is not necessary to provide a theory as to why the invention works" - See paragraphs 344 to 380.

Patents of Invention - Topic 1724

Grounds of invalidity - Lack of utility and operability - Doctrine of sound prediction - ADIR owed a patent (the '196 Patent) for perindopril, a compound used in COVERSYL, a drug used to treat hypertension and cardiac insufficiency - Servier Canada exploited the patent rights in Canada - ADIR and Servier Canada (the plaintiffs) sued a generic drug manufacturer (Apotex), alleging patent infringement - Apotex claimed that three of the patent claims (1, 2 and 3), which were for a class of compounds, were invalid for lack of utility - The Federal Court held that Apotex failed to meet its burden of establishing a lack of utility - The court therefore went on to consider the notion of sound prediction (i.e., whether as of the relevant date there was a sound prediction of utility based on the information and science available at the time of the prediction) - The court concluded that it was satisfied, on a balance of probabilities, that, as of the date of the Canadian filing, the inventors' prediction that all of the compounds included in claim 3 of the '196 Patent would have activity as ACE inhibitors was sound - Further, the court was not persuaded that Apotex had met its burden of demonstrating that a person skilled in the art could not have soundly predicted that the trans compounds of claims 1, 2 and 3 would have utility - See paragraphs 344 to 380.

Patents of Invention - Topic 1725

Grounds of invalidity - Lack of utility and operability - Particular patents - [See Patents of Invention - Topic 1723 ].

Patents of Invention - Topic 2888

Infringement of patent - Acts constituting an infringement - Of particular patents - ADIR owed a patent (the '196 Patent) for perindopril, a compound used in COVERSYL, a drug used to treat hypertension and cardiac insufficiency - Servier Canada exploited the patent rights in Canada - ADIR and Servier Canada (the plaintiffs) sued a generic drug manufacturer (Apotex), alleging patent infringement and that Apotex induced others (e.g., foreign purchasers) to infringe the patent - The Federal Court held that Apotex's activities directly infringed the patent, but that Apotex was not liable for inducement - The plaintiff's failed to establish that Apotex's sales of perindopril to foreign purchasers met the test for inducing patent infringement because the court was not persuaded that title to the perindopril or combination tablets passed to the foreign purchasers in Canada; therefore there was no act of infringement by any of the foreign purchasers (i.e., the plaintiffs did not establish the first branch of the test for inducement which required them to establish that the foreign purchasers infringed the '196 Patent) - The court noted that it was undisputed that the foreign purchasers distributed and sold perindopril tablets outside Canada - Those activities did not infringe the '196 Patent - Only if some part of the activity of the foreign purchasers took place in Canada (which it did not) could the court conclude that an act of infringement was completed by the direct infringer - See paragraphs 134 to 160.

Patents of Invention - Topic 2890

Infringement of patent - Acts constituting an infringement - Inducing infringement - The Federal Court discussed the test of inducing patent infringement - The court stated that to succeed in such a claim, a patentee wishing to rely on the doctrine of induced infringement would have to prove each of the following elements: "(a) the act of infringement was completed by the direct infringer; (b) the completed act of infringement was influenced by the seller, to the point where without said influence, infringement by the buyer would not otherwise take place; and, (c) the influence must knowingly be exercised by the seller, such that the seller knows that his influence will result in the completion of the act of infringement" - See paragraph 141.

Patents of Invention - Topic 2890

Infringement of patent - Acts constituting an infringement - Inducing infringement - [See Patents of Invention - Topic 2888 ].

Patents of Invention - Topic 2945

Infringement of patent - Chemical products and substances intended for food and medicine - Particular patents - [See Patents of Invention - Topic 2888 ].

Patents of Invention - Topic 3013

Infringement of patent - Defences - Use of patented product related to development and submission of information to government authorities (regulatory use exemptions) - ADIR owed a patent (the '196 Patent) for perindopril, a compound used in COVERSYL, a drug used to treat hypertension and cardiac insufficiency - Servier Canada exploited the patent rights in Canada - ADIR and Servier Canada (the plaintiffs) sued a generic drug manufacturer (Apotex), alleging patent infringement - Apotex claimed that it should not be held liable for any infringement relating to its experimental and regulatory uses of perindopril (Patent Act, s. 55.2(1)) - The Federal Court found that Apotex directly infringed the '196 Patent - However, certain identified quantities of perindopril fitted within the regulatory and experimental use exemption of s. 55.2 of the Patent Act and Apotex was not liable for infringement for those quantities - See paragraphs 162 to 172.

Patents of Invention - Topic 3606

Infringement actions - Parties - Persons entitled to commence action (incl. standing) - ADIR owed a patent (the '196 Patent) for perindopril, a compound used in COVERSYL, a drug used to treat hypertension and cardiac insufficiency - Servier Canada exploited the patent rights in Canada - ADIR and Servier Canada, along with Les Laboratoires Servier (LLS), Oril Industries, Servier Laboratories (Australia) and Servier Laboratories (UK) (collectively, the non-ADIR foreign plaintiffs) sued a generic drug manufacturer (Apotex), alleging patent infringement - Apotex challenged the standing of the non-ADIR foreign plaintiffs - The non-ADIR foreign plaintiffs claimed that they held an implied licence permitting each of them to "work" the '196 Patent and, therefore, met the requirements for standing within s. 55(1) of the Patent Act - The Federal Court held that only ADIR, as patentee, and the plaintiff Servier Canada, who claimed under the patentee, had standing - The court held that while the non-ADIR foreign plaintiffs were part of a closely held group of family companies (Groupe Servier), each was a distinct corporate entity with its own sphere of operation and its own responsibilities within Groupe Servier - None of the non-ADIR foreign plaintiffs were involved in manufacturing, but rather marketing and sales abroad - There was no licence, express or implied, or other arrangements such as a lease, assignment or a sale, that gave the affiliates the right to use the patent - Therefore, the non-ADIR foreign plaintiffs lacked standing to bring this action - See paragraphs 67 to 95.

Patents of Invention - Topic 3606

Infringement actions - Parties - Persons entitled to commence action (incl. standing) - Section 55(1) of the Patent Act provided that any person who infringed a patent was liable to the patentee "and to all persons claiming under him" for all damages sustained by the patentee or by any person, by reason of the infringement - The Federal Court stated that "the test for who qualifies as a person claiming under a patentee is not simply whether the patentee has consented to the person being joined as a plaintiff in an action; nor is it enough to demonstrate that two parties are related. In each case, the facts must demonstrate a credible and legally sufficient basis for claiming under a patentee." - See paragraph 70 - After considering the applicable jurisprudence, the court stated that "in sum, the Canadian jurisprudence has provided a broad interpretation of 'persons claiming under' the patentee. The ability of a party to claim under a patentee does not necessarily require the existence of an express licence. Where no express licence exists, each case will be determined on its facts to determine whether an implied licence or other right exists that gives rise to a claim 'under the patentee'" - See paragraph 77.

Patents of Invention - Topic 3827

Infringement actions - Damages - Profits - Accounting - ADIR owed a patent (the '196 Patent) for perindopril, a compound used in COVERSYL, a drug used to treat hypertension and cardiac insufficiency - Servier Canada exploited the patent rights in Canada - ADIR and Servier Canada (the plaintiffs) sued a generic drug manufacturer (Apotex), alleging patent infringement - Apotex counterclaimed, challenging the validity of the patent - The Federal Court held that the patent was valid and infringed by Apotex - The Federal Court granted a permanent injunction against Apotex effective 30 days from the date of the reasons for judgment and exercised its discretion to allow the plaintiffs to elect an accounting of profits - Damages were to be quantified at a later time - See paragraphs 495 to 518.

Statutes - Topic 2601

Interpretation - Interpretation of words and phrases - Modern rule (incl. interpretation by context) - General principles - Section 61(1)(b) of the Patent Act provided that no patent would be declared invalid on the grounds of prior inventorship by some other person unless the challenging party could establish that the other person had, before the issue of the patentee's patent, made an application for patent in Canada on which conflict proceedings should have been directed - The Federal Court interpreted s. 61(1)(b) using the approach outlined in Driedger on the Construction of Statutes (2nd Ed.) - See paragraphs 381 to 456.

Trade Regulation - Topic 507.1

Competition - General - Application of legislation - Patents - ADIR obtained a patent (the '196 Patent) for perindopril (an ACE inhibitor), pursuant to rights granted in minutes of settlement following conflict claims before the Commissioner of Patents and Federal Court involving two other drug companies - ADIR and Servier Canada (which had the patent rights in Canada), the plaintiffs, sued Apotex, a generic drug manufacturer, for patent infringement - In a counterclaim, Apotex sought damages under s. 36 of the Competition Act, claiming that the settlement agreement ensured that the parties to the agreement would gain effective control over the manufacture and supply of a number of ACE inhibitors and thereby lessen competition - Apotex also argued that the parties to the settlement agreement conspired to lessen competition contrary to s. 45 of the Competition Act - The Federal Court held that there had to be "something more" than the mere existence of a patent to give rise to a claim under ss. 36 or 45 - Here ADIR had merely exercised its rights under the Patent Act and nothing more - Apotex's claim for damages under the Competition Act was therefore dismissed - In any event, the court opined that Apotex's claim was barred by the two year limitation period in s. 36(4) which would have started to run on the date of the settlement agreement (December 2000) or at the latest the date of issuance of the '196 Patent in 2001 - See paragraphs 457 to 478.

Trade Regulation - Topic 513

Competition - General - Limitation period - [See Trade Regulation - Topic 507.1 ].

Cases Noticed:

JAY-LOR International Inc. et al. v. Penta Farm Systems Ltd. et al. (2007), 313 F.T.R. 1; 59 C.P.R.(4th) 228 (F.C.), refd to. [para. 70].

Signalisation de Montréal Inc. v. Services de Béton Universels ltée et al. (1992), 147 N.R. 241; 46 C.P.R.(3d) 199 (F.C.A.), refd to. [para. 71].

Apotex Inc. and Novopharm Ltd. v. Wellcome Foundation Ltd. (1998), 145 F.T.R. 161; 79 C.P.R.(3d) 193 (T.D.), revd. in part (2000), 262 N.R. 137; 10 C.P.R.(4th) 65 (F.C.A.), affd. [2002] 4 S.C.R. 153; 296 N.R. 130, refd to. [para. 72].

Whirlpool Corp. et al. v. Camco Inc. et al., [2000] 2 S.C.R. 1067; 263 N.R. 88, refd to. [para. 96].

Dimplex North America Ltd. v. CFM Corp. (2006), 292 F.T.R. 38; 2006 FC 586, affd. (2007), 370 N.R. 316; 2007 FCA 278, refd to. [para. 96].

Eli Lilly Canada Inc. v. Apotex Inc. et al. (2008), 323 F.T.R. 56; 2008 FC 142, refd to. [para. 96].

Eli Lilly Canada Inc. v. Novopharm Ltd. et al., [2007] F.T.R. Uned. 828; 2007 FC 596, refd to. [para. 96].

Shire Biochem Inc. et al. v. Canada (Minister of Health) et al. (2008), 328 F.T.R. 123; 2008 FC 538, refd to. [para. 97].

Aventis Pharma Inc. v. Apotex Inc. et al. (2005), 278 F.T.R. 1; 2005 FC 1283, affd. (2006), 349 N.R. 183; 2006 FCA 64, leave to appeal refused (2006), 358 N.R. 391 (S.C.C.), refd to. [para. 99].

Apotex Inc. v. Syntex Pharmaceuticals International Ltd. et al. (1999), 166 F.T.R. 161 (T.D.), refd to. [para. 99].

Pfizer Canada Inc. et al. v. Canada (Minister of Health) et al. (2005), 285 F.T.R. 1; 2005 FC 1725, refd to. [para. 100].

Janssen-Ortho Inc. et al. v. Novopharm Ltd. (2006), 301 F.T.R. 166; 2006 FC 1234, affd. (2007), 366 N.R. 290; 2007 FCA 217, leave to appeal refused (2007), 383 N.R. 397 (S.C.C.), refd to. [para. 104].

C.H. Boehringer Sohn v. Bell-Craig Ltd., [1962] Ex. C.R. 201, affd. [1963] S.C.R. 410, refd to. [para. 126].

Hoechst Pharmaceuticals of Canada Ltd. v. Gilbert & Co., [1965] 1 Ex. C.R. 710, affd. [1966] S.C.R. 189, refd to. [para. 126].

Merck & Co. et al. v. Apotex Inc. (2006), 282 F.T.R. 161; 2006 FC 524, revd. in part (2006), 354 N.R. 51; 2006 FCA 323, leave to appeal refused (2007), 370 N.R. 400 (S.C.C.), refd to. [para. 129].

Consolboard Inc. v. MacMillan Bloedel (Saskatchewan) Ltd., [1981] 1 S.C.R. 504; 35 N.R. 390, refd to. [para. 132].

Warner Lambert Co. v. Wilkinson Sword Canada Inc. (1988), 19 C.P.R.(3d) 402 (T.D.), refd to. [para. 141].

AB Hassle et al. v. Canada (Minister of National Health and Welfare) et al., [2002] 3 F.C. 221; 213 F.T.R. 161 (T.D.), affd. (2002), 298 N.R. 323; 2002 FCA 421, leave to appeal refused (2003), 313 N.R. 199 (S.C.C.), refd to. [para. 141].

Wellcome Foundation Ltd. et al. v. Interpharm Inc. et al. (1992), 48 F.T.R. 308; 41 C.P.R.(3d) 215 (T.D.), refd to. [para. 143].

Monsanto Canada Inc. et al. v. Schmeiser et al., [2004] 1 S.C.R. 902; 320 N.R. 201, refd to. [para. 143].

Naber Seed & Grain Co. (Receivership) v. Prairie Pulse Inc. et al. (2007), 299 Sask.R. 222; 408 W.A.C. 222; 2007 SKCA 58, refd to. [para. 155].

AstraZeneca Canada Inc. v. Apotex Inc. et al. (2003), 315 N.R. 55; 2003 FCA 487, refd to. [para. 159].

Grenier v. Canada (2005), 344 N.R. 102; 2005 FCA 348, refd to. [para. 187].

Mohiuddin v. Canada (2006), 295 F.T.R. 96; 2006 FC 664, refd to. [para. 187].

Malkine v. Gagne et al., [2007] F.T.R. Uned. 414; 2007 FC 573, refd to. [para. 187].

New Brunswick (Board of Management) v. Dunsmuir (2008), 372 N.R. 1; 329 N.B.R.(2d) 1; 844 A.P.R. 1; 2008 SCC 9, refd to. [para. 200].

Pason Systems Corp. v. Commissioner of Patents et al. (2006), 295 F.T.R. 1; 2006 FC 753, refd to. [para. 203].

Dow Chemical Co. v. Canada (Attorney General) et al., [2007] F.T.R. Uned. 842; 2007 FC 1236, refd to. [para. 204].

Bristol-Myers Squibb Co. v. Commissioner of Patents (1997), 138 F.T.R. 144 (T.D.), affd. (1998), 229 N.R. 217; 82 C.P.R.(3d) 192 (F.C.A.), refd to. [para. 204].

CertainTeed Corp. v. Canada (Attorney General) et al. (2006), 289 F.T.R. 312; 2006 FC 436, refd to. [para. 206].

Pope Appliance Corp. v. Spanish River Pulp and Paper Mills Ltd., [1929] A.C. 269 (P.C.), refd to. [para. 206].

Bayer Aktiengesellschaft v. Commissioner of Patents (1980), 53 C.P.R.(2d) 70 (F.C.T.D.), refd to. [para. 211].

Pfizer Canada Inc. et al. v. Canada (Minister of Health) et al. (2005), 279 F.T.R. 164; 2005 FC 1205, revd. in part (2007), 366 N.R. 347; 2007 FCA 209, leave to appeal refused (2007), 383 N.R. 381 (S.C.C.), refd to. [para. 228].

Almecon Industries Ltd. v. Nutron Manufacturing Ltd. (1996), 108 F.T.R. 161 (T.D.), affd. (1997), 209 N.R. 387; 72 C.P.R.(3d) 397 (F.C.A.), leave to appeal refused (1997), 224 N.R. 157 (S.C.C.), refd to. [para. 236].

Beloit Canada Ltd. v. Valmet Oy (1986), 64 N.R. 287; 8 C.P.R.(3d) 289 (F.C.A.), refd to. [para. 251].

Merck & Co. et al. v. Apotex Inc. et al. (2005), 274 F.T.R. 113; 41 C.P.R.(4th) 35 (F.C.), refd to. [para. 268].

Pfizer Canada Inc. et al. v. Apotex Inc. et al. (2007), 306 F.T.R. 254; 2007 FC 26, affd. (2007), 367 N.R. 98; 2007 FCA 195, leave to appeal refused (2007), 381 N.R. 399 (S.C.C.), refd to. [para. 268].

Laboratoires Servier et al. v. Apotex Inc. et al. (2007), 370 N.R. 200; 61 C.P.R.(4th) 408 (F.C.A.), refd to. [para. 397].

Rizzo & Rizzo Shoes Ltd. (Bankrupt), Re, [1998] 1 S.C.R. 27; 221 N.R. 241; 106 O.A.C. 1, refd to. [para. 398].

Texaco Development Corp. v. Schlumberger Ltd. (1966), 49 C.P.R. 225 (Ex. Ct.), refd to. [para. 401].

Nekoosa Packaging Corp. et al. v. AMCA International Ltd. et al. (1989), 30 F.T.R. 127; 27 C.P.R.(3d) 153 (T.D.), affd. (1994), 172 N.R. 387; 56 C.P.R.(3d) 470 (F.C.A.), refd to. [para. 402].

Christiani & Nielsen v. Rice, [1931] 4 D.L.R. 273 (P.C.), affd. [1930] S.C.R. 443, refd to. [para. 404].

R. v. La Force, [1894] 4 Ex. C.R. 14, refd to. [para. 407].

Gerrard Wire Tying Machines Co. v. Cary Manufacturing Co., [1926] 3 D.L.R. 374 (Ex. Ct.), refd to. [para. 407].

Free World Trust v. Électro Santé Inc. et al., [2000] 2 S.C.R. 1024; 263 N.R. 150, refd to. [para. 413].

AT&T Technologies Inc. v. Mitel Corp. (1989), 28 F.T.R. 241; 26 C.P.R.(3d) 238 (T.D.), refd to. [para. 418].

Radio Corp. of America v. Hazeltine Corp. (1977), 14 N.R. 614; 33 C.P.R.(2d) 211 (F.C.A.), refd to. [para. 435].

Diversified Products Corp. and Brown Fitzpatrick Lloyd Patent Ltd. v. Tye-Sil Corp. (1991), 125 N.R. 218; 35 C.P.R.(3d) 350 (F.C.A.), refd to. [para. 440].

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.), refd to. [para. 465].

Eli Lilly & Co. et al. v. Apotex Inc. et al. (2005), 341 N.R. 114; 44 C.P.R.(4th) 1 (F.C.A.), refd to. [para. 465].

Eli Lilly & Co. et al. v. Apotex Inc. (2004), 323 N.R. 180; 32 C.P.R.(4th) 195 (F.C.A.), refd to. [para. 465].

351694 Ontario Ltd. et al. v. Paccar of Canada Ltd. et al. (2004), 264 F.T.R. 12; 2004 FC 1565, refd to. [para. 483].

Fehr v. Jacob and Bethel Hospital (1993), 85 Man.R.(2d) 63; 41 W.A.C. 63 (C.A.), refd to. [para. 488].

Beloit Canada Ltd. v. Valmet Oy (1994), 78 F.T.R. 86 (T.D.), revd. in part (1995), 184 N.R. 149 (F.C.A.), leave to appeal refused [1995] S.C.C.A. No. 388, refd to. [para. 505].

Beloit Canada Ltd. v. Valmet Oy (1992), 144 N.R. 389; 45 C.P.R.(3d) 116 (F.C.A.), refd to. [para. 506].

Apotex Inc. v. Merck & Co. et al. (2003), 307 N.R. 364; 2003 FCA 291, refd to. [para. 514].

Statutes Noticed:

Competition Act, R.S.C. 1985, c. C-34, sect. 36(1)(a) [para. 461]; sect. 36(4)(a) [para. 462]; sect. 45(1) [para. 460].

Patent Act, R.S.C. 1985, c. P-4, sect. 8 [para. 186]; sect. 27(1) [para. 386]; sect. 43(1) [para. 387]; sect. 43(7), sect. 43(8) [para. 388]; sect. 55(1) [para. 69]; sect. 55.2(1) [para. 162]; sect. 61(1) [para. 391].

Authors and Works Noticed:

Benjamin, Sale of Goods (7th Ed. 2005), para. 18-002 [para. 157].

Driedger, Elmer A., Construction of Statutes (2nd Ed. 1983), p. 87 [para. 398].

Fox, Harold G., The Canadian Law and Practice Relating to Letters Patent for Inventions (4th Ed. 1969), p. 393 [para. 143].

International Chamber of Commerce, Incoterms 2000 (1999), generally [para. 159]; pp. 5 [para. 157]; 13, 14, 65, 66, 68, 73, 74, 75, 81, 82, 84, 85 [para. 158].

Sullivan, Ruth, Sullivan and Driedger on the Construction of Statutes (4th Ed. 2002), p. 131 [para. 396].

Counsel:

Judith Robinson, Haria Bundaru, Joanne Chriqui, Daniel A. Artola, Rebecca Crane, David Badurina, Julie Dallaire, Richard Wagner, G. Ian Clarke and Kavita Ramamoorthy, for the plaintiffs/defendants by counterclaim;

H.B. Radomski, Nando De Luca, Ben Hackett and Ivor Hughes, for the defendants/plaintiffs by counterclaim.

Solicitors of Record:

Ogilvy Renault LLP, Montreal, Quebec, for the plaintiffs/defendants by counterclaim;

Goodmans LLP, Toronto, Ontario, for the defendants/plaintiffs by counterclaim.

This matter was heard at Montreal, Quebec, on March 5-7, 10-14, 17 and 18, Newark, New Jersey, U.S.A., on March 19 and Toronto, Ontario, on March 26-28 and 31, April 1-4, 7-11, 14-18, 23 and 24 and May 5-8, 2008, before Snider, J., of the Federal Court, who delivered the following reasons for judgment on July 2, 2008.