Merck & Co. et al. v. Apotex Inc., 2006 FCA 324

• Judge: Linden, Sexton and Malone, JJ.A.
• Court: Federal Court of Appeal (Canada)
• Case Date: September 14, 2006
• Jurisdiction: Canada (Federal)
• Citations: 2006 FCA 324;(2006), 354 N.R. 355 (FCA)

Merck & Co. v. Apotex Inc. (2006), 354 N.R. 355 (FCA)

MLB headnote and full text

Temp. Cite: [2006] N.R. TBEd. OC.027

Apotex Inc. (appellant) v. Merck & Co., Inc., Merck Frosst Canada & Co., Merck Frosst Canada Ltd., Syngenta Limited, AstraZeneca UK Limited and AstraZeneca Canada Inc. (respondents)

(A-268-06; 2006 FCA 324)

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

Federal Court of Appeal

Linden, Sexton and Malone, JJ.A.

October 10, 2006.

Summary:

The plaintiffs (collectively Merck) included the owner of and licensees under Canadian Patent 1,275,350 ('350 patent) for lisinopril, a chemical compound useful in treating hy­per­tension. Merck sold drugs in Canada in­cor­porating lisinopril as an active ingredi­ent. A generic drug manufacturer (Apotex) chose to produce and sell a generic version of some of Merck's lisinopril drugs. Merck com­menced an action against Apotex alleg­ing patent infringement (claims 1, 2 and 5). Apotex counterclaimed alleging invalidity of the patent. By the time of trial, Apotex ad­mitted that, if the claims in issue of the patent were valid, then they had infringed those claims subject to certain exemptions as to some quantities of lisinopril obtained from an allegedly licensed source, and certain quan­tities used for other exempted purposes. Merck argued that Apotex was in fact pre­cluded from attacking the validity of the '350 patent because of former proceedings re­specting a related patent pertaining to a compound known as enalapril which came from the same parent patent as lisinopril.

The Federal Court, in a decision reported at 282 F.T.R. 161, allowed Merck's action and granted remedies accord­ingly. The court found that Apotex infringed each of claims 1, 2 and 5 of the '350 patent, subject to certain exemptions, that Apotex was preclud­ed from challenging the validity of those claims and, in any event, those chal­lenges failed. The parties made submis­sions as to costs.

The Federal Court, in a decision reported at [2006] F.T.R. Uned. 627, determined the costs issues accordingly. Apotex appealed and plaintiffs cross-ap­pealed certain aspects of the costs order.

The Federal Court of Appeal allowed the appeal and the cross-appeals in part.

Practice - Topic 7109

Costs - Party and party costs - Special or­ders - Discretion to exceed scale of costs - The plaintiffs' action against the defen­dant for patent infringement was for the most part successful - There were a total of 34 interlocutory orders that awarded costs to a party (i.e. costs in the cause), without any stipulation as to scale or quan­tum - Respecting these orders, the trial judge or­dered that where a successful party had been awarded costs and such costs had not been taxed, they were to be taxed and paid at the upper end of Column IV - The Fed­er­al Court of Appeal held that the trial judge had no jurisdiction to elevate any of those interlocutory awards of costs - Under rule 407, an award of costs, without stipu­lation as to scale or quantum, was to be assessed in accordance with Column III - Once a motion judge issued an order for costs or costs in the cause without a modi­fier varying the general default parameters of Column III, the issue of scale was res judicata, subject to a motion brought pur­suant to rule 403 to vary the scale - See paragraphs 13 to 17.

Cases Noticed:

Monsanto Canada Inc. et al. v. Schmeiser et al., [2002] N.R. Uned. 261; 2002 FCA 449, refd to. [para. 3].

Consorzio Del Prosciutto Di Parma v. Maple Leaf Meats Inc. (2002), 297 N.R. 135; 2002 FCA 417, refd to. [para. 15].

AB Hassle et al. v. Genpharm Inc. et al. (2004), 254 F.T.R. 268; 2004 FC 892, refd to. [para. 15].

Aird Country Park Village Properties (Mainland) Ltd., 2005 FC 1170, refd to. [para. 15].

Pfizer Canada Inc. et al. v. Apotex Inc. et al. (1997), 126 F.T.R. 225; 72 C.P.R.(3d) 379 (T.D.), refd to. [para. 20].

Aventis Pharma Inc. v. Apotex Inc. et al., [2004] F.T.R. Uned. 313; 2004 FC 570, refd to. [para. 22].

3430901 Canada Inc. et al. v. Canada (Minister of Industry) (1999), 177 F.T.R. 161 (T.D.), affd. [2002] 1 F.C. 421; 282 N.R. 284 (F.C.A.), refd to. [para. 23].

Counsel:

H.B. Radomski, David M. Scrimger, Nando de Luca and Miles Hastie, for the appellant;

Judith Robinson, Patrick E. Kierans, and Jordana Sanft, for the respondent, Merck;

Gunars A. Gaikis, J. Sheldon Hamilton and Nancy P. Pei, for the respondent, Astra­Zeneca.

Solicitors of Record:

Goodmans LLP, Toronto, Ontario, for the appellant;

Ogilvy Renault, Montreal, Quebec, for the respondent, Merck;

Smart & Biggar, Toronto, Ontario, for the respondent, AstraZeneca.

This appeal was heard at Toronto, Ontario, on September 14, 2006, before Linden, Sex­ton and Malone, JJ.A., of the Federal Court of Appeal. Malone, J.A., released the follow­ing reasons for judgment for the court on October 10, 2006.