Laboratoires Servier v. Apotex Inc., 2006 FC 1443

 

 

 

 

Date: 20061129

Docket: T-1548-06

Citation: 2006 FC 1443

Ottawa, Ontario, November 29, 2006

PRESENT:     The Honourable Mr. Justice Simon Noël

 

BETWEEN:

 

LES LABORATOIRES SERVIER,

ADIR, ORIL INDUSTRIES,

SERVIER CANADA INC.,

SERVIER LABORATORIES (AUSTRALIA) PTY LTD

and SERVIER LABORATORIES LIMITED

 

Plaintiffs

And

 

APOTEX INC.

and

APOTEX PHARMACHEM INC.

 

Defendants

 

 

REASONS FOR ORDER AND ORDER

 

[1]               This is a motion brought by the Plaintiffs (collectively “Servier”) for an interim injunction against the Defendants (collectively “Apotex”) to restrain them from using, making, selling, distributing, exporting, supplying and in any other way dealing with the compound perindopril and any pharmaceutically acceptable salts thereof, in the United Kingdom, France, Canada and Australia, on the basis that these activities allegedly infringe Canadian patent no. 1,341, 196 (the

 

 

“196 Patent”).  Since the filing of the motion, the scope of the interim injunction has been restricted to activities affecting the Canadian and Australian markets except for one of the two undertakings made to the Court by Apotex, which refers to the United Kingdom, France and Australia. 

 

I.  Procedural Steps

 

[2]               On August 25, 2006 the Plaintiffs instituted an action against the Defendants for infringement of the 196 Patent.  The Statement of Claim plead that Apotex was making perindopril in Canada for supply to the United Kingdom, thus infringing the 196 Patent. 

 

[3]               On September 12, 2006, French regulatory authorities obtained a document entitled “Perindopril Erbumine Summary of Physico-chemical Analyses”, dated 2004, after conducting a “saisie contrefaçon” (seizure for infringement).  This document stated that the generic perindopril that was to enter the French market was manufactured by Apotex Pharmachem Inc. in Brantford, Ontario (Plaintiffs Motion Record, Affidavit of Yves Langourieux, Tab 8 at p.178).   Given the information obtained in France, an amended Statement of Claim dated November 3, 2006 was filed adding Servier Canada, Servier Australia and Servier UK as co-Plaintiffs.  The amended Statement of Claim plead new material facts, including that Apotex was infringing the 196 Patent by supplying perindopril that was made in Canada to various markets. 

 

[4]               On October 26, 2006, Servier obtained a copy of the Australian Pharmaceutical Benefits Schedule (“PBC”), the Australian reimbursement formulary for medicines to take effect on December 1, 2006, which listed generic perindopril for the first time.  It is to be noted that on the PBC for December 1, 2006 three generic perindopril brands were listed. All three generic brands are to sell perindopril supplied by GenRx Ltd Pty, an Australian company, who exclusively sells perindopril manufactured by Apotex (Defendants Motion Record, Affidavit of Roger Millichamp, page 9, para. 41).

 

[5]               On November 8, 2006, the Plaintiffs filed a Notice of Motion for an interlocutory injunction restraining the Defendants from using, making, selling, distributing, exporting, supplying and in any way dealing with the compound perindopril and asked that a judgment on the interlocutory injunction motion be issued before December 1, 2006.  In the event that the interlocutory injunction could not be heard and a judgment issued before December 1, 2006, the Plaintiffs asked the Court for an interim injunction. 

 

[6]               On November 20-21, 2006, the Court convened two conference calls with the parties to discuss all pertinent matters related to the proceedings.  On November 21, 2006, an order was issued setting down a date for the Plaintiffs’ interim injunction motion as well as a date for the Plaintiffs’ motion for an interlocutory injunction. 

 

[7]               The Plaintiffs’ interim injunction motion was heard on November 24, 2006 in Ottawa.  The motion for an interlocutory injunction is set down to be heard on December 6 and 7 initially in Vancouver, but will now be heard in Ottawa. 

 

 

II. Background and Facts

 

 

[8]               The Plaintiffs are affiliated companies.  ADIR is the owner of the 196 Patent.  Oril Industries is the manufacturer of perindopril, an inhibitor used to treat hypertension and related cardiovascular disease, which is sold worldwide under the trademark COVERSYL.  COVERSYL is Servier’s most important product worldwide, it is registered in over 120 countries and has over 500 marketing authorizations. 

 

[9]               The 196 Patent, entitled “Procédé de Préparation d’Imino Diacides Substitués” was granted on March 6, 2001 and will expire on March 6, 2018. 

 

[10]           The Defendants are both located in Ontario and are affiliated companies and members of the Apotex Group of Companies.  Apotex is manufacturing at its facilities in Ontario perindopril tablets and there is evidence that some of its production is exported.

 

[11]           In Australia, GenRx Pty Ltd, a distributor and seller of generic pharmaceutical products, has received marketing authorization from the Australian regulatory authorities to market and sell generic perindopril erbumine in 2, 4, and 8 mg tablets beginning December 1, 2006.  All perindopril tablets that will be sold by GenRx are manufactured by Apotex, allegedly in breach of the Plaintiffs’ Canadian 196 Patent.  As it stands, GenRx has received three shipments of perindopril from Apotex and has already shipped over 1.6 million tablets of perindopril to the two other private labels listed as selling perindopril in the December 1, 2006 PBC (Defendants Motion Record, Affidavit of Roger Millichamp, page 10, para.43).  Moreover, as of November 12, 2006, GenRx has informed its ‘platinum customers’ that it will provide a 45% turnover on all perindopril orders until December 22, 2006 and a 45% discount on all orders of perindopril after that date (Plaintiffs Motion Record, Supplemental Affidavit of Yves Langourieux, page 1403).  Also according to GenRx, perindopril tablets have been distributed to over 39 warehouses across Australia and will subsequently be distributed to over 5000 pharmacies in the country (Defendants Motion Record, Affidavit of Roger Millichamp, page 10, para.44).  This being said, the Court has taken note of the potential problems that might arise if the perindopril tablets already in the chain of sales are ordered not to be sold on December 1, 2006 to Australian clients and customers.  

 

[12]           In Canada, Apotex is seeking regulatory approval to market and sell generic perindopril in 2, 4, and 8 mg tablets.  According to the patent list submitted by Servier Canada to Health Canada pursuant to the Patented Medications (Notice of Compliance) Regulations,  the 196 Patent is listed in respect of the 2 and 4 mg dosage form of COVERSYL but not the 8 mg dosage form (Plaintiffs Motion Record, Affidavit of Michael Sumpter, page 1218 para. 35) .  Thus, in what concerns the 8 mg tablets, Health Canada has apparently taken the position that the Patented Medicines (Notice of Compliance) Regulations, SOR/93-133, do not apply.  Consequently, Apotex will sooner than later begin to market and sell perindopril tablets in Canada, at least in the 8mg dosage. 

 

III. Apotex’s Submissions

 

[13]           In responding to Servier’s motion for an interim injunction, Apotex submits that Servier does not come to the Court with clean hands.  Moreover, Apotex claims that Servier brought their motion after an undue delay, thereby voiding their claim that there is urgency in this matter.  I feel it is appropriate to address these two issues summarily before analysing whether substantively an interim injunction is warranted in this case. 

 

[14]           The clean hands argument, relates to Servier’s alleged breach of a confidentiality order issued in Australia.  The allegations that Servier does not come to the Court with clean hands is a very serious contention.  As such, the Court could only make a finding on such an allegation after thoroughly reviewing all relevant evidence and having profoundly investigated the issue.  Such a review is not possible given the time constraints inherent to a motion for an interim injunction and the limited submissions presented by the parties at such a motion.  Consequently, the Court is unable to make any conclusions on the clean hands argument at this time. However, the Court may consider and decide upon this issue in another proceeding relating to this case.   This being said, it is to be noted that the Defendants did not indicate to the Court during the emergency teleconferences held November 20-21, 2006 that they had sought an order in Australia relating to the Plaintiffs’ alleged breach of confidentiality.  It must be remembered that a party cannot seek an equitable redress where they themselves do not act in an equitable manner (see Pro Swing Inc v. Elta Golf Inc., 2006 SCC 52; Hall v. Hebert, [1993] 2 S.C.R. 159).

 

[15]           As for the argument that Servier brought this motion to the Court after undue delay, given that Servier only received confirmation on October 26, 2006 that Apotex would begin to market their perindopril tablets in Australia on December 1, 2006 and that they filed a Notice of Motion on November 8, 2006, a mere 13 days later, I cannot conclude that this motion should be quashed on the basis of undue delay.   

 

 

 

 

 

 

 

 

 

IV. Analysis

 

(1)   Is an interim injunction against Apotex warranted given that they may imminently begin marketing and selling perindopril tablets in both the Canadian and Australian markets?

 

[16]           The Federal Court may issue interim injunctions pursuant to section 44 of the Federal Courts Act, R.S.C. 1985, c. F-7 and rule 374 of the Federal Court Rules, SOR/98-106. 

 

[17]           The test applied to determine whether an injunction should be issued has been established by the Supreme Court of Canada in RJR-Macdonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311.  As per the RJR-Macdonald tri-partite test the Court must consider the following issues: (a) is there is a serious issue to be tried?; (b) would the moving party suffer irreparable harm if the injunction were not granted?; (c) which party is favoured on the balance of convenience?.   Moreover, in what concerns interim injunctions, the jurisprudence establishes that in addition to meeting the RJR-Macdonald test, the moving party must also establish urgency (see Procter & Gamble Inc. v. Colgate-Palmolive Canada Inc. (1995), 61 C.P.R. (3d) 160; Pfizer Ireland Pharmaceuticals v. Lilly Icos LLC, 2004 FC 223).    

 

(a) Urgency

(i) Canada

 

[18]           In Canada, regulatory approval has not yet been granted for the sale or marketing of perindopril tablets in any dosage.  The date on which a Notice of Compliance (NOC) will be issued to the Defendants, which would permit them to sell or market perindopril in any dosage, is unknown.  Thus, the Plaintiffs have not demonstrated urgency in what concerns the Defendants’ actions in the Canadian market.

 

[19]           Furthermore, in his affidavit, Dr. Bernard Sherman, Chair of Apotex Inc., states that the Defendants are willing to provide the following undertaking: “The Defendants hereby undertake that, upon receipt of the first NOC by either or both of them for the marketing of any perindopril containing product in Canada, Apotex will provide ten (10) days’ notice to the Plaintiffs’ solicitors prior to selling or offering for sale any products under said NOC in Canada” (Defendants Motion Record, Affidavit of Dr. Bernard Sherman, Exhibit 5, page. 195).  It is to be noted that at the hearing of this motion, the solicitors for the Defendants stated that they are willing to extend the notice period to 12 days before selling or marketing any perindopril in Canada. 

 

[20]           Given that no NOC has been issued and that the Defendants undertake to give notice to the Plaintiffs before selling or marketing any perindopril products in Canada, there is no urgency justifying an interim injunction against the Defendants relating to their actions in the Canadian market.         

 

 

 

 

 

 

 

(ii) Australia

 

[21]           Apotex’s generic perindopril tablets will be available in Australia as early as December 1, 2006.  On the basis of this fact alone, the Court finds that, in what concerns the Australian market, urgency is made out.     

 

(b) Serious issue to be tried

 

[22]            The threshold for establishing a serious issue to be tried is a low one.  Thus, the Defendants, for the purpose of this interim injunction motion only, with much hesitation and without prejudice to the arguments they submitted in support of their motion to strike the statement of claim or certain paragraphs thereof (Prothonotary Aronovitch is seized of this motion), acknowledge that a serious issue to be tried is established so as to simplify the submissions that the Court need deal with on this interim injunction motion.   

 

(c) Irreparable harm

 

[23]           The threshold for establishing irreparable harm is a high one (see Fournier Pharma Inc. v. Apotex Inc., (1999), 1 C.P.R. (4th) 344 (FCTD) at para. 6).  This being said, on a motion for an interim injunction the Court does not have the benefit of reviewing cross examinations of affidavits and must therefore evaluate the evidence presented at face value. 

 

[24]           The Plaintiffs have submitted an affidavit from an expert in economics to show that  Servier would suffer irreparable harm if generic perindopril were allowed to enter the Australian market.  This expert, Dr. Jerry A. Hausman, a professor in economics at the Massachusetts Institute of Technology (MIT), concludes that:

… the introduction and subsequent withdrawal of Apotex’s generic perindopril would cause Servier substantial and irreparable economic harm that is impossible to estimate accurately.  This harm would be caused by:

·         Loss of market share and sales of COVERSYL that could not be recovered upon later withdrawal of generic perindopril from the market;

·         Lowering of COVERSYL’s price that would be irreversible;

·         Termination of trained sales employees; and

·         Severe reduction in Servier’s operations in Australia

 

(Plaintiffs Motion Record, Affidavit of Jerry A. Haussman, page 434 at para. 72)

I have carefully read the affidavit of Dr. Hausman.  From my reading of this affidavit I can attest that it demonstrates Dr. Hausman’s indepth knowledge of the effects on the market that release of generics have, as well as provides serious and substantial indications that monetary compensation cannot fully compensate for the harm that entry of generic perindopril will have on the Australian market and thus, that irreparable harm would occur.

 

[25]           The Defendants argue that the harm that the Plaintiffs claim the entry of generic perindopril would cause can be adequately compensated by an award of damages after a trial on the merits of the Plaintiffs’ claim.  Moreover, the Defendants suggest that the long-term effects on the market of the entry of the generic are merely ‘speculative’, and that the long-term effects alleged are irrelevant to the motion at hand as an interim injunction would only be operative for a very short period, namely for 14 days or until the release of the judgment on the interlocutory injunction, whichever period is shorter.

 

 

 

 

[26]           Given the emergency nature of this motion, the fact that cross-examination on the evidence has not yet taken place and that the Defendants due to extreme time constraints have not yet perfected their evidence, the Court, keeping in mind the high threshold required to demonstrate irreparable harm, can but accept the evidence presented by the Plaintiffs at face value.  Consequently, the Plaintiffs have, prima facie, established irreparable harm were generic perindopril to enter the Australian market on December 1, 2006.  

 

(d) Balance of convenience

 

[27]           The last part of the RJR-Macdonald tripartite test asks that the balance of convenience be considered.  Generally, the balance of convenience will favour maintaining the status quo.  In the situation at hand maintaining the status quo in some sense achieves some relief for both parties.  In what concerns the Canadian market no urgency is shown and thus the Defendants are not required to stop manufacturing perindopril.  In what concerns the Defendants’ perindopril entering the Australian market, the balance of convenience favours the Plaintiffs.  As it stands the Defendants’ perindopril product is not yet on the Australian consumer market and thus to maintain the status quo steps must be taken to ensure that the Defendants’ perindopril products do not enter this market.   

 

 

 

 

 

[28]           This being said, it is important to note that the Defendants in their record state that they are willing to provide the following undertaking “The Defendants hereby undertake that they will not export any quantities of perindopril to the United Kingdom, France and Australia pending the return of Plaintiffs’ motion for an interlocutory injunction in this matter” (Defendants Motion Record, Affidavit of Dr. Bernard Sherman, Exhibit 5, page. 196).  In addition, to this undertaking the Defendants must be prevented from selling, distributing, supplying or shipping any of the perindopril products already on Australian soil.  Thus, the Defendants will be required to take all reasonable means to prevent any perindopril product they have manufactured from entering the Australian consumer market and will be required to fully document their efforts in this regard. 

 

[29]           Also, it is to be noted that the Plaintiffs have stated that “Servier is prepared to undertake to compensate Apotex for its reasonable damages suffered as a result of injunctive relief if this Court so orders pursuant to a final determination at trial of non-infringement or that the ‘196 Patent is invalid.” (Plaintiffs Motion Record, Memorandum of Fact and Law, page 1428 at para. 90).  Such an undertaking will also be ordered by the Court so as to guarantee that the Defendants are fairly compensated, if need be.   

 

 

 

 

 

 

 

V.  Conclusion

 

[30]            The motion for an interim injunction against the Defendants is granted in part.  The interim injunction issued prevents the exporting of perindopril products to Australia, as well as the sale, distribution, supply or shipment of any perindopril products already in Australia.  The Defendants will have to take all reasonable measures to prevent any perindopril products that they have manufactured from entering the Australian consumer market and will be required to fully document their efforts to this effect.   No interim injunction relating to the Defendants’ actions on the Canadian market is issued, as no urgency has been demonstrated given the undertaking by the Defendants contained in paragraph 19 of this decision and which shall become part of the order. 

 

VI. Costs

 

[31]           In the interest of justice, the costs will follow the decision on the motion for an interlocutory injunction.  In the event that no decision is made on the interlocutory injunction, for whatever reason, the parties may reapply to me so that a determination as to costs can be made. 

 

 

 

 

 

 

 

ORDER

 

THIS COURT ORDERS THAT:

-         the Defendants undertake that upon receipt of the first NOC for the marketing of any perindopril containing product in Canada, they will provide 12 days notice to the Plaintiffs’ solicitors prior to selling or offering for sale any products under the said NOC in Canada;

-         the Defendants undertake that they will not export any quantities of perindopril to the United Kingdom, France and Australia pending the decision on the Plaintiffs’ motion for an interlocutory injunction in this matter;

-         the Defendants prevent the sale, distribution, supply or shipment of any perindopril products already in Australia, that they have manufactured.  The Defendants will have to take all reasonable measures to prevent any perindopril products they have manufactured from entering the Australian consumer market, and will be required to fully document all their efforts to this effect for future purposes, if need be.  This part of the order will be in effect for a period of 14 days and can be extended upon application, the whole subject to the determination to be made on the motion for an interlocutory injunction; 

-         the Plaintiffs undertake to compensate the Defendants for all reasonable damages they may suffer as a result of the issuance of this interim injunction, if need be;

-         the costs will follow the decision on the motion for an interlocutory injunction.  In the event that no decision is made on the interlocutory injunction, for whatever reason, the parties may reapply to me so that a determination as to costs can be made. 

“Simon Noël”

                                                                                                Judge

 

 

FEDERAL COURT

 

SOLICITORS OF RECORD

 

 

 

DOCKET:                                          T-1548-06

 

STYLE OF CAUSE:                          LES LABORATOIRES SERVIER ET AL. v. APOTEX INC. ET AL.

 

 

PLACE OF HEARING:                    Ottawa, Ontario

 

DATE OF HEARING:                      November 24, 2006

 

REASONS FOR ORDER:               The Honourable Mr. Justice Simon Noël

 

DATED:                                             November 29^th, 2006

 

 

 

APPEARANCES:

 

Judith Robinson Joanne Chriqui	FOR THE PLAINTIFFS
Andrew R. Brodkin Nando De Luca Ben Hackett Lindsay P. Hill	FOR THE DEFENDANTS

 

SOLICITORS OF RECORD:

 

Ogilvy Renault LLP Montréal, Québec	FOR THE PLAINTIFFS
Goodmans LLP Toronto, Ontario	FOR THE DEFENDANTS