Date: 20100611
Docket: T-772-09
Citation: 2010
FC 633
Toronto, Ontario, June 11, 2010
PRESENT: Kevin R. Aalto, Esquire, Prothonotary
BETWEEN:
APOTEX
INC.
Plaintiff
and
PFIZER IRELAND PHARMACEUTICALS
Defendant
REASONS FOR ORDER AND ORDER
[1]
This is an
action commenced by Apotex to impeach the patent held by Pfizer (the ‘446
Patent) for the drug commonly known as Viagra (sildenafil citrate).
[2]
Apotex has
sought to impugn the ‘446 Patent on prior occasions. By Notice of Allegation
dated June 15, 2005, Apotex alleged that it would not infringe the ‘446 Patent
and attacked the validity of the ‘446 Patent claims. In response, a Notice of
Application (the “Application”) was commenced seeking an order prohibiting the
Minister of Health from issuing a Notice of Compliance (“NOC”) to Apotex. On
September 27, 2007, Mr. Justice Mosley granted the application and issued an
order of prohibition to prevent the Minister from issuing a NOC to Apotex (the
“Prohibition Order”).
[3]
Thereafter,
the Prohibition Order was upheld by the Federal Court of Appeal in a decision
dated January 16, 2009. Leave to appeal to the Supreme Court of Canada was not
sought.
[4]
Other
litigation has been pursued by Apotex to impeach the ‘446 Patent. In 2005 an
application was commenced by Pfizer in response to a NOA from Apotex. The NOA
was subsequently withdrawn.
[5]
Another
generic manufacturer (Novopharm Limited) has also sought to impeach the ‘446
Patent. A Prohibition Order was issued in the matter by decision of Mr.
Justice Kelen dated June 18, 2009.
[6]
This
action was commenced in May 2009. An Amended Statement of Claim was served and
filed in July, 2009 and thereafter Pfizer brought a motion for particulars.
Pfizer’s Statement of Defence was served and filed in September, 2009.
[7]
In its
Statement of Claim, Apotex raises seven allegations of invalidity:
anticipation, obviousness, covetous claiming, inutility and lack of sound
prediction, insufficient disclosure, improper prosecution and improper
disclaimer. All but one, improper prosecution was raised in its NOA which was
the basis of the proceeding before Mr. Justice Mosley. Apotex also alleges
non-infringement in respect of every claim of the ‘446 Patent. In its NOA
Apotex did not allege on-infringement in respect of every claim. Apotex also
alleges the “Gillette defence” which was not raised in the application.
[8]
In its
Statement of Defence, Pfizer pleads the following:
“[b]y reason of res judicata,
issue estoppel, collateral estoppel, comity and abuse of process Apotex should
be precluded from contesting the validity of the ‘446 Patent in the present
proceeding” (the “Abuse Allegations”).
[9]
This
motion seeks, inter alia, to strike this part of the pleading. The
motion also seeks particulars of other parts of the Statement of Defence. Those
issues will be dealt with below.
Striking the Abuse Allegations
[10]
This part
of the motion raises a discrete legal issue which has implications for both proceedings
(“PMNOC Proceedings”) under the Patented Medicines (Notice of Compliance)
Regulations (the “Regulations”) and patent actions in this Court:
Should a patentee be permitted to plead
in its Statement of Defence to an impeachment action commenced by a generic
manufacturer that it is an abuse of process, inter alia, where the
generic manufacturer Plaintiff, having failed under the Regulations at trial
and appeal, presents the same allegation (and potentially the same evidence) on
the same patent?
[11]
Apotex
vigorously argues that the answer to this question is an unequivocal “no”. It
moves to strike the Abuse Allegations on the grounds that the Abuse Allegations
fail to disclose a reasonable defence of law and should be struck. Apotex
argues, in essence, that the jurisprudence of this Court is to the effect that
PMNOC Proceedings have no precedential effect. Therefore this pleading should
be struck.
[12]
In support
of its position that the Abuse Allegations are a proper pleading in a Statement
of Defence, Pfizer provides comparisons and statistics to demonstrate the
commonality of issues raised in this action with the prior PMNOC Proceedings.
The statistics are provided to show the extensive legal proceedings and
hearings which occurred as part in parcel of the prior litigation. For
example, Schedule “A” to the written submissions is a flow chart showing
Canadian proceedings involving the sildenafil patents all of which were
applications under the Regulations. A copy of Schedule “A” is attached to
these reasons.
[13]
In
Schedule “B” to its written representations, Pfizer lists the prior art cited by
Apotex in its Amended Statement of Claim in this proceeding. The chart
compares that prior art with the prior art cited in Apotex’s NOA dated June 15,
2005. Notably, the prior art cited is identical same and except five
additional items of prior art being Canadian Patent Application 2,073,226 filed
July 6, 1992 and published January 10, 1993, together with four articles all of
which, from their titles, appear to relate to Chinese medicine. A copy of
Schedule “B” is also attached to these reasons.
[14]
Finally,
in Schedule “C” to their written representations Pfizer has attached a chart
showing the notices of motion taken in each of the prior PMNOC Proceedings, the
number of affidavits relied on in respect of those motions, the number of affidavits
relied on in the main proceeding, the number of volumes of application records
including appeal records, books of authorities and compendia, and the number of
hearing days which those proceedings occupied and the number of interim
decisions, orders and rulings which resulted. These statistics show an
overwhelming number of motions, affidavits and hearings days which have
occupied the Court on these prior occasions. For example, there were seven
hearings over 16 days before a Justice of this Court; five hearings over five
days before a Prothonotary. A copy of Schedule “C” is attached to these
reasons.
[15]
With this
background, Pfizer argues that it is entitled to raise the Abuse Allegations in
its defence.
[16]
Pfizer
submits that on this motion Apotex has failed to meet the heavy burden to
strike under Rule 221 of the Federal Courts Rules. They argue that it
is not plain and obvious that the Abuse Allegations are not a reasonable
defence.
[17]
On motions
to strike, the approach of the Court is well known:
·
No
evidence is considered on a motion to strike.
·
The
pleading must be considered true and provable in evidence.
·
It must be
“plain and obvious” that the allegations ought to be struck as bereft of any
chance of success.
·
If there
is any doubt as to the propriety of a pleading, it should be left to the trial
judge to make a determination based on the evidence
(see Hunt v. Carey
(1992) S.C.R. 959 and, Sweet v. Canada (1999) 249 N.R. 17(F.C.A.) and, Mathias
v. the Queen, [1980] 2
F.C. 813 (T.D.))
Discussion
[18]
As noted,
all of the prior proceedings were conducted under the Regulations. As is often
said of PMNOC Proceedings, they are intended to be “summary” proceedings. The
shorter Oxford English Dictionary provides as one definition of “summary” as
applied to the law as follows:
“applied to the proceedings in the Court
of law carried out rapidly by the omission of certain formalities required by
the common law” and also generally “performed or effected by a short method;
done without delay.”
PMNOC Proceedings, while described as summary, usually
extend over some 20-months and must be completed within a 2-year period from
the date of the issuance of the Notice of Application. While PMNOC Proceedings
may be intended to be “summary” that does not mean they are not extremely sophisticated
proceedings and intensively litigated. There are quite often five expert
reports (sometimes more with leave of the Court) from each party, the bulk of
which are from experts in the field of pharmacology and medicine expounding on
very technical analyses of the drug in dispute. All of the affidavits filed
are usually subject to extensive and intensive cross-examination. Many of the
issues raised in PMNOC Proceedings mirror the usual allegations found in any
impeachment or invalidity patent action, such as obviousness, anticipation,
inutility, etc…. Schedule “C” amply demonstrates that while PMNOC Proceedings
are described as “summary” and may lack the formality of a full trial and live
witnesses, they nonetheless put many complex patent related issues before the
Court for determination on a vast paper record. Indeed, the reasons for
decisions in almost all PMNOC Proceedings are lengthy, detailed and provide a
careful analysis and construction of the patent in issue.
[19]
The fact
that they are “summary” proceedings appears to be the basis upon which the jurisprudence
has evolved that PMNOC Proceedings do not amount to res judicata of a
subsequent patent invalidity action, which has all of the trappings of a full
hearing including pleadings, production and discovery, and live witnesses at
trial. However, the Court of Appeal has not yet taken the jurisprudence as far
as Apotex argues. The premise upon which they are not res judicata is
that they are summary proceedings. That is, none of the usual steps in an
action have been resorted to, there are no live witnesses and the matter is
determined on a paper record.
[20]
However,
Pfizer is not pleading res judicata to have the matter determined on
that basis per se. Rather, the pleading is directed toward evidence and
witnesses who make the same statements in this proceeding and to that extent it
should be open to the Trial Judge to determine if res judicata
principles can be applied to that evidence. It therefore cannot be said that
the pleading is bereft of any chance of success.
[21]
Apotex
argued that the law is well settled that this pleading cannot succeed.
However, for the reasons noted, it is my view that at the pleading stage these
pleas ought not to be struck. As further support for this conclusion, Mr. Justice
Kelen in Apotex Inc. v. Glaxo Group Ltd., 2001 FCT 1351 observed that
there might be some relevance to prior proceedings. He noted, at paras. 8 -10
as follows:
[8] The
plaintiff accepts that estoppel and res judicata do not apply,
but argues that this Decision has some relevance in a subsequent action
involving the same patent. The defendants take issue in paragraph 18 of the
Statement of Defence and Counterclaim "with the characterization of the
procedural history of the proceedings in Court File Numbers T-415-98 and
T-806-00". Accordingly, the "characterization" of these
proceedings is already an issue in the pleadings.
[9] Therefore,
the plaintiff submits that the prior proceedings are relevant and the
defendants deny their relevance. While it is clear that a patent infringement
action is independent and separate from an action under the Regulations,
the history of the proceedings and the determinations by the Court may have
some relevance.
[10] Accordingly,
it was within the discretion of the Prothonotary to not strike these paragraphs
of the Plaintiff's Reply and Defence to Counterclaim in that they may have some
relevance, they are not scandalous, frivolous, or vexatious, and they will not
prejudice or delay the fair trial of the action. Reference to prior
proceedings are not plainly, obviously and beyond doubt a futile pleading.
In any event, the jurisprudence is that the Court will not strike out
statements that are merely surplus provided no prejudice flows from them. In
this case, the Court will not be prejudiced from making an independent, fresh
determination in the patent infringement action because of the two prior
proceedings under the Regulations. It is unrealistic and irrational for
the defendants to ask that the Court to ignore the history of the proceedings
between the parties with respect to related issues. [emphasis added]
[22]
In this
case it can hardly be said that alleging abuse of process and res judicata
given the extensive history of proceedings between Pfizer and Apotex that these
allegations do not have some relevance to the issues in play. While the
doctrine of res judicata does not render this proceeding moot or
previously decided, to the extent that evidence from prior proceedings is
identical to the evidence to be lead in this case, that will have some
relevance but not necessarily be determinative of the issue on which that
evidence is lead. At the very least it may go to the issue of costs.
[23]
It must
also be remembered that res judicata is a short form of res judicata
pro veritate accipitur or a “thing adjudicated is received as the truth”
[see, Osborn, P.G., A Concise Law Dictionary (1964, 5th Ed.)
at p. 278]. Pfizer is not pleading that this proceeding should be determined
solely on the basis of the application of the res judicata doctrine.
Rather, it raises all of its substantive defences and additionally seeks relief
“[b]y reason of res judicata, issue estoppel, collateral estoppel,
comity and abuse of process Apotex should be precluded from contesting the validity
of the ‘446 Patent in the present proceeding”. To the extent a witness’
evidence is identical to evidence given in prior proceedings why should it not
be left open to the trial judge’s discretion whether there is any applicability
of the pleaded principles and whether to assess and weigh that evidence in the
context of the prior proceedings.
[24]
While the
Regulations are designed to be a summary process which is the rationale for not
strictly applying the res judicata doctrine to subsequent impeachment proceedings
such as this, parties ought not to be able to have endless “kicks at the can”
and use up more and more judicial resources because they do not like the prior
result and are sufficiently well-heeled to pursue more and more litigation.
[25]
The Court
has an obligation to control its own process to ensure that judicial resources
are available to all. While the policy articulated by the Federal Court of
Appeal regarding the application of res judicata to proceedings under
the Regulations is to be followed, the current pleading is one that should be
permitted to stand as the prior proceedings may have some relevance in the
context of this proceeding. Further, to the extent that the evidence adduced
by Apotex at trial is the same evidence on the same issues as in prior
proceedings this too may have some relevance and at a minimum may affect the
disposition of costs. This is particularly so given the many similarities
between this proceeding and the prior proceedings as described above. The
motion insofar as it seeks to strike this part of the pleading is dismissed.
Other Pleadings
[26]
In their
motion, Apotex also sought to strike “bald denials” or, alternatively, obtain
particulars of these allegations in the Statement of Defence. Apotex seeks to
strike paragraphs of the Statement of Defence that allege that the use of
Apotex’s sildenafil product will infringe the claim of the ‘446 Patent or
paragraphs that deny claims of the ‘446 Patent is invalid on certain grounds
alleged in the Amended Statement of Claim.
[27]
Prior to
the delivery of the Statement of Defence, Apotex provided lengthy particulars
of various of the allegations in the Amended Statement of Claim. In support of
this motion, affidavits of a law clerk and Andre Lapierre, a scientist, both at
Apotex’s law firm were relied upon. The law clerk’s affidavit attached various
documents in the proceeding and correspondence. The affidavit of Mr. Lapierre
states, inter alia, that as the Statement of Defence asserts that the
manufacture and sale of sildenafil tablets by Apotex will infringe the claims
of the ‘446 Patent there are no material facts identified to support this
allegation nor any explanations or elaboration as to why this is the case.
Such explanations or particulars are required, so it is deposed, in order for a
meaningful Reply to be delivered. Mr. Lapierre further deposes that without
the material facts and particulars one cannot have a full appreciation of the
nature of the allegations advanced. Apart from these bald statements of not
being able to understand the nature of the allegations pleaded, there are no
details of what particulars might be expected to clarify the allegations.
[28]
The
requirements of pleading entail a need to understand the nature of the case to
be met. Pleadings should also contain a concise statement of material facts
upon which a party relies [see Rule 174]. In this case, Pfizer’s pleading that
denies that the Apotex sildenafil product will be non-infringing amounts to a
“traverse” of the allegation of Apotex that their product will not infringe.
The burden of proving non-infringement lies with Apotex. It is up to Apotex to
prove on a balance of probabilities that their sildenafil product will not be
infringing. Pfizer is doing nothing more than putting Apotex to the strict
proof thereof by denying the allegation. A “traverse” is a denial of an
allegation of fact in a pleading. Pfizer argues that their pleading is simply
a traverse for which no particulars are required – essentially it says to
Apotex – “prove it”. Apotex, however, argues that the bare denials offend the
rules of pleading and should be struck or particularized. In essence, they
allege that Pfizer’s denials are not a traverse but what is known in the old
rules of pleading as a “negative pregnant”. This is defined by Osborn, supra,
at p. 219 as:
A literal denial in [a] pleading which
does not go to the substance of the allegation. Where a traverse is of a
negative averment so that it is clear that it is intended to set up an
affirmative case, particulars of the affirmative case ought to be delivered.
[29]
In support
of its position that the pleadings in dispute are a simple traverse, Pfizer
relies on McLeod
Lake Indian Band v. Chingee, [1998] F.C.J. No. 339. In
that case it was observed by Prothonotary Hargrave as follows:
[7] .
. . The plea by the Defendants of custom in the first two paragraphs of their
Defence is a denial of the Plaintiffs' allegation, in their Statement of Claim,
an allegation which the Plaintiffs will have to prove as a part of their case.
It has long been established that a traverse by a defendant, even one in the
form of an affirmative, so long as it is in substance a traverse of the other
side's allegation, does not give rise to a right to particulars: Weinberger
v. Inglis, [1918] 1 Ch. 133 at 138. In Weinberger the plaintiff was
turned down in his bid to be re-elected as a member of the stock exchange. The
defendants raised only one affirmative plea, that they acted bonafide
and honestly in exercising their duty and did not re-elect the plaintiff
because they did not deem him eligible to be a member of the stock exchange.
The court pointed out that the plea of the defendants, even though it was
affirmative, was in substance a traverse of the plaintiff's allegation, a plea which
the plaintiff must prove in order to succeed and as such did not give rise to a
right to particulars, this being so even though the traverse amounted to a wide
and undefined positive. The judge pointed out the defendants might properly
leave the plaintiff to prove his own case.
[8] In
the present instance the Plaintiffs say they were elected in accordance with
the custom of the Band. It is up to them to establish, to a judge, that such is
the case. The Defendants are merely putting the Plaintiffs to the proof of
their case and need not give the Plaintiffs help by admitting it. The present
instance is not one which falls within the further principle that a traverse,
although negative in form, may be a negative pregnant with an affirmative and
thus require particulars: see Pinson v. Lloyds and National Provincial
Foreign Bank, Ltd., [1941] 2 K.B. 72 at 80, 84 and following (C.A.). Rather the present traverse is a denial of
an allegation. It is a denial into which one ought not to read an affirmative
allegation beyond that necessarily implied from the traverse, as it is for the
Plaintiffs to convince the trial judge that they are the newly and validly
elected Chief and Councillors, elected "in accordance with the custom of
the Band" (to quote paragraph one of the Statement of Claim) and therefore
particulars ought to be refused: see for example Duke's Court Estates, Ltd.
v. Associated British Engineering, Ltd., [1948] Ch. 458. Counsel for the
Defendants puts this idea slightly differently by saying it should be for the
trial judge to decide the custom on which the Plaintiffs base their case, but
it amounts to the same thing: no particulars will be ordered of a traverse in
the form used by the Defendants.
[30]
In my
view, Prothonotary Hargrave’s observations are apposite as is his conclusion
which reads as follows:
First, pleadings, including particulars,
should be kept brief. A party ought not to be required to provide particulars
containing detailed facts which should more properly be presented at trial as
evidence: Cercast Inc. v. Shellcast Foundries Inc.,
[1973] F.C. 28 at 38. Second, for me to order the Defendants to give
particulars of the custom of the McLeod Lake Indian Band, as to elections,
would be to shift the onus from the Plaintiffs to the Defendants. That is
improper. There will be no particulars.
[31]
While
Apotex points to a number of cases in which particulars were ordered of bald
denials, the cases are distinguishable. For example, Apotex relies upon Teknion
Furniture Systems v. Precision Mfg. Inc. (1992), 45 C.P.R. (3d) 335
(F.C.T.D.) at p. 339 for the following proposition:
In patent infringement actions . . . a
plaintiff should set out
i. facts from which it follows
that the plaintiff has the exclusive right to do certain specified things, or,
in other words, a succinct description stripped of all unnecessary and
irrelevant verbiage, of the essential features which the defendant is alleged
to have taken; and
ii. facts that constitute an
encroachment by the defendant on the plaintiff’s rights, i.e. that the
defendant has done one or more specified things that the plaintiff has the
right to do.
[32]
This case
is a patent infringement action not a patent impeachment action in which the plaintiff
has failed to provide particularity of the allegations of infringement. It is
a case in which the onus is on the plaintiff. The other cases relied on by
Apotex are equally not directly applicable to the particular circumstances of
this case. As a further example, Chart Industries Ltd. v. Hein-Werner of
Canada Ltd. (1988), 25 C.P.R. (3d) 373, is cited for the proposition that
it is not sufficient to plead that the defendant’s product falls within the
scope of the patent’s claims as they fail to provide the precise facts of the
alleged infringement. There, the plaintiff failed to provide facts as to how
this had been done in a situation where the plaintiff had the most knowledge
about its patent. Here, it is Apotex that is alleging that the ‘446 Patent is
invalid and that the Apotex product will not infringe and they have provided
particulars of those allegations. Apotex has the burden of proving those
allegations. Pfizer’s pleading is not a negative pregnant which might require
particulars. They are simply a traverse.
[33]
In my
view, these pleadings should neither be struck nor are particulars required.
Further, based on the evidence before me I am not satisfied that this is a case
wherein particulars are required and there is no genuine need for particulars.
[34]
The motion
will be dismissed and as Pfizer was entirely successful they are entitled to
their costs in an amount to be fixed by the Court unless the parties otherwise
agree. If the parties do not agree on costs, and, as costs were not directly
addressed during argument the Court will entertain brief written submissions
(no more than 2 pages) regarding quantum of costs.
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