Merck & Co. et al. v. Apotex Inc., (1996) 106 F.T.R. 114 (TD)

• Judge: MacKay, J.
• Court: Federal Court (Canada)
• Case Date: December 06, 1995
• Jurisdiction: Canada (Federal)
• Citations: (1996), 106 F.T.R. 114 (TD)

Merck & Co. v. Apotex Inc. (1996), 106 F.T.R. 114 (TD)

MLB headnote and full text

Merck & Co. Inc. and Merck Frosst Canada Inc. (plaintiffs) v. Apotex Inc. (defendant)

(T-2408-91)

Indexed As: Merck & Co. et al. v. Apotex Inc.

Federal Court of Canada

Trial Division

MacKay, J.

January 23, 1996.

Summary:

Merck sued Apotex for patent infringement of the compounds enalapril and enalapril maleate by the sale of Apo-Enalapril. Apotex counterclaimed for a declaration that Merck's patent was invalid.

The Federal Court of Canada, Trial Division, in a decision reported 88 F.T.R. 260, allowed Merck's action and dismissed the counterclaim. The court granted a permanent injunction to prevent Apotex from infringing Merck's patent. Apotex appealed.

The Federal Court of Appeal, in a decision reported 180 N.R. 373, allowed the appeal in part. The court dismissed the counterclaim appeal. Subsequently, Apotex and two of its officers were ordered to show cause why they should not be found in contempt of court for allegedly breaching the injunction. Apotex raised various preliminary motions.

The Federal Court of Canada, Trial Division, determined the issues accordingly.

Editor's Note: Leave to appeal to the Supreme Court of Canada was denied on December 7, 1995. For related cases involving this matter see 69 F.T.R. 209, 90 F.T.R. 1; 106 F.T.R. 99 and 106 F.T.R. 104.

Barristers and Solicitors - Topic 787

Duty to court - Disqualification of counsel - When required - The trial judge granted Merck an injunction restraining Apotex from infringing Merck's patent - Apotex and two of its officers were ordered to show cause why they should not be found in contempt of court for allegedly breaching the injunction - Apotex moved to disqualify Merck's counsel from further participation in the contempt proceedings, claiming that they had demonstrated a "vindictive attitude and not the fair, impartial demeanour proper for a prosecutor seeking to bring forward evidence of wrongdoing in proceedings that ... are essentially criminal" - The Federal Court of Canada, Trial Division, refused the motion - See paragraphs 54 to 61.

Contempt - Topic 10

General principles - Scope of contempt power - [See second Contempt - Topic 503 ].

Contempt - Topic 503

What constitutes contempt - General principles - Civil and criminal contempts distinguished - The Federal Court of Canada, Trial Division, discussed the distinction between criminal contempt and civil contempt - See paragraphs 25 to 30.

Contempt - Topic 503

What constitutes contempt - General principles - Civil and criminal contempts distinguished - The trial judge granted Merck an injunction restraining Apotex from infringing Merck's patent - Apotex and two of its officers were ordered to show cause why they should not be found in contempt of court for allegedly breaching the injunction - One of the alleged breaches occurred after the trial reasons were given but before formal judgment was entered - The Federal Court of Canada, Trial Division, stated that the fact that the breach occurred "before the court's order was filed, but after reasons for its judgment were filed, so that the contempt is based upon the public aspects of the offence and not on the violation of a court order, does not, in itself, result in converting what is civil contempt into criminal contempt" - See paragraph 29.

Contempt - Topic 690

What constitutes contempt - Judgments and orders - Injunctions - Disobedience of - [See second Contempt - Topic 503 ].

Contempt - Topic 861

What constitutes contempt - Witnesses - Testimony - The trial judge granted Merck an injunction restraining Apotex from infringing Merck's patent - Apotex and two of its officers were ordered to show cause why they should not be found in contempt of court for allegedly breaching the injunction - A subpoena duces tecum was issued against one of the officers - The Federal Court of Canada, Trial Division, quashed the subpoena, stating that as one cited for contempt the officer could not be compelled to testify - See paragraph 63.

Contempt - Topic 5002

Practice - General principles - Nature of a contempt hearing - The trial judge granted Merck an injunction restraining Apotex from infringing Merck's patent - Apotex and two of its officers were ordered to show cause why they should not be found in contempt of court for allegedly breaching the injunction - On a preliminary motion Apotex applied to dismiss or stay the proceeding - Apotex claimed that because the proceedings were criminal in nature, its officers were entitled to have the proceedings prosecuted by the Attorney General or some other prosecutor independent from Merck's counsel - The Federal Court of Canada, Trial Division, rejected the argument - See paragraphs 14 to 38.

Contempt - Topic 5002

Practice - General principles - Nature of a contempt hearing - [See Practice - Topic 3709 ].

Contempt - Topic 5103

Practice - Hearing - Procedure - [See Barristers and Solicitors - Topic 787 , Contempt - Topic 861 and first Contempt - Topic 5002 ].

Evidence - Topic 4486

Witnesses - Attendance and oath - Attendance - Subpoena duces tecum - Setting aside - Grounds - [See Contempt - Topic 861 ].

Practice - Topic 3709

Evidence - Undertakings respecting - Information compelled by court order - Collateral use - Merck sued Apotex for patent infringement by selling Apo-Enalapril - Apotex was ordered to maintain accounts of its sales and shipments of Apo-Enalapril and give the information to Merck - In contempt proceedings Apotex claimed that use of the information was precluded - The Federal Court of Canada, Trial Division, stated that there was an implied undertaking that the party receiving the information would not use it for a collateral or ulterior purpose - See paragraphs 42 to 44 - The court held that contempt proceedings were an integral part of the court's process in the trial of the patent action and not a collateral purpose - See paragraphs 39 to 53 - The court ordered that the information be sealed and treated in confidence - See paragraphs 69 to 72.

Practice - Topic 3712

Evidence - Sealed evidence - When available - [See Practice - Topic 3709 ].

Cases Noticed:

Baxter Laboratories of Canada Ltd., Travenol Laboratories Inc. and Baxter Travenol Laboratories Inc. v. Cutter (Canada) Ltd., [1983] 2 S.C.R. 388; 50 N.R. 1; 75 C.P.R.(2d) 1; 2 D.L.R.(4th) 621, refd to. [para. 2].

Beloit Canada Ltd. v. Valmet Oy (1988), 82 N.R. 235; 20 C.P.R.(3d) 1 (F.C.A.), refd to. [para. 23].

United Nurses of Alberta v. Alberta (Attorney General), [1992] 1 S.C.R. 901; 135 N.R. 321; 125 A.R. 241; 14 W.A.C. 241; 89 D.L.R.(4th) 609; 71 C.C.C.(3d) 225, refd to. [para. 25].

Vidéotron Ltée et Premier Choix: TVEC Inc. v. Industries Microlec Produits Electroniques Inc. et autres, [1992] 2 S.C.R. 1065; 141 N.R. 281; 50 Q.A.C. 161; 76 C.C.C.(3d) 289; 96 D.L.R.(4th) 376, refd to. [para. 26].

Iron Ore Co. of Canada v. United Steel Workers of America, Local 5795 and Dwyer (1979), 20 Nfld. & P.E.I.R. 27; 53 A.P.R. 27 (Nfld. C.A.), refd to. [para. 33].

Canada v. ICHI Canada Ltd., [1992] 1 F.C. 571; 49 F.T.R. 254; 40 C.P.R.(3d) 119 (T.D.), refd to. [para. 42].

Goodman v. Rossi (1995), 83 O.A.C. 38; 24 O.R.(3d) 359 (C.A.), refd to. [para. 42].

Control Data Canada Ltd. v. Senstar Corp., [1988] 3 F.C. 439 (F.C.T.D.), refd to. [para. 42].

Lubrizol Corp. et al. v. Imperial Oil Ltd. et al., [1991] 1 F.C. 325; 39 F.T.R. 43; 33 C.P.R.(3d) 49 (T.D.), refd to. [para. 42].

Eli Lilly & Co. et al. v. Interpharm Inc. et al. (1993), 156 N.R. 234; 50 C.P.R.(3d) 208 (F.C.A.), refd to. [para. 43].

Carbone v. De La Rocha (1993), 13 O.R.(3d) 355 (Gen. Div.), refd to. [para. 44].

Home Office v. Harman, [1982] 1 All E.R. 532 (H.L.), refd to. [para. 44].

Orfus Realty v. D.G. Jewellery of Canada Ltd. (1995), 24 O.R.(3d) 379 (C.A.), refd to. [para. 45].

McClure v. Backstein (1987), 17 C.P.C.(2d) 242 (Ont. H.C.), refd to. [para. 49].

Apple Computer Inc. v. Minitronics of Canada Ltd. et al. (1988), 17 F.T.R. 52; 20 C.P.R.(3d) 438 (T.D.), refd to. [para. 50].

Crest Homes plc v. Marks, [1987] 1 A.C. 829 (H.L.), refd to. [para. 51].

Statutes Noticed:

Federal Court Act, R.S.C. 1985, c. F-7, sect. 50(1) [para. 11].

Federal Court Rules, rule 355(1), rule 355(2), rule 355(4) [para. 15].

Counsel:

G. Alexander Macklin, Q.C., and Constance Too, for the plaintiffs;

H.B. Radomski, Richard Naiberg and Andrew R. Brodkin, for the defendant, Apotex, and Bernard Sherman;

Brian H. Greenspan, for Dr. Bernard Sherman and Mr. Jack Kay as accused;

Donald H. Jack, for Moshe Green and Harvey Organ;

Alan J. Lenczner, Q.C., for Richard Barbeau and Roger Moore.

Solicitors of Record:

Gowling Strathy & Henderson, Ottawa, Ontario, for the plaintiffs;

Goodman, Phillips & Vineberg, Toronto, Ontario, for the defendant, Apotex and Bernard Sherman;

Greenspan & Humphrey, Toronto, Ontario, for Dr. Bernard Sherman and Mr. Jack Kay;

McDonald & Hayden, Toronto, Ontario, for Moshe Green and Harvey Organ;

Lenczner & Slaght, Toronto, Ontario, for Richard Barbeau and Roger Moore.

These motions were heard in Ottawa, Ontario, on December 6, 1995, before MacKay, J., of the Federal Court of Canada, Trial Division, who delivered the following judgment on January 23, 1996.