Docket: T-1272-97
Citation: 2012 FC 454
Ottawa, Ontario, April
18, 2012
PRESENT: The Honourable Mr. Justice Rennie
BETWEEN:
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MERCK & CO., INC. and
MERCK FROSST CANADA INC.
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Plaintiffs
(Defendants
by Counterclaim)
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and
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APOTEX INC. and
APOTEX FERMENTATION INC.
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Defendants
(Plaintiffs
by Counterclaim)
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REASONS FOR ORDER AND
ORDER
[1]
By
way of motion the defendants appeal to this Court from the July 28, 2011 Order
of Prothonotary Rosa Aronovitch denying leave to the defendants, Apotex Inc.
(Apotex) and Apotex Formation Inc. (AFI) (the Defendants), to amend their
respective Fresh as Amended Statement(s) of Defence. For the reasons that
follow, the motion is granted.
Facts
[2]
This
motion is predicated on a question of law; therefore, only a brief recitation
of the facts, to the extent that they frame the legal question, is necessary.
[3]
The
plaintiff, Merck & Co. Inc. (Merck), was granted Canadian Patent No. 1,
161, 380 (‘380 Patent) and licensed it to Merck Frosst Canada Ltd. (Merck
Frosst) (collectively, the Plaintiffs). The ‘380 patent was issued in respect
of Lovastatin, a pharmaceutical drug used to treat cholesterol. On June
12, 1997 Apotex received a Notice of Compliance (NOC) for Apo-lovastatin.
The following day, the Plaintiffs commenced a patent infringement action. Four
years later, for various reasons having to do with the nature of litigation,
Apotex delivered its first statement of defence.
[4]
On
November 14, 2003, on consent of the parties, the action was bifurcated. The
trial with respect to liability commenced on February 1, 2010 and concluded on
May 21, 2010. In Merck & Co Inc v Apotex Inc, 2010 FC 1265, Madam Justice
Judith Snider found the Defendants liable for infringement of Merck’s patent. The
second trial with respect to the determination of damages is scheduled to
commence on April 8, 2013. The Defendants sought, and were denied, leave to
amend their Statement of Defence in respect of this second trial. It is with
respect to this denial of leave that this motion arises.
[5]
The
Defendants proposed to plead that the Defendants could have employed a
non-infringing alternative process for producing Apo-Lovastatin and
therefore any damages which the Plaintiffs suffered by the Defendants actually
employing an infringing process for producing Lovastatin are not really
damages at all by virtue of the availability of a non-infringing process.
[6]
By
way of background, at some point after it had been issued the NOC in respect of
Apo-Lovastatin, Apotex entered into a joint venture with Blue Treasure; a
venture located in China and of which AFI is significant shareholder.
Initially, Blue Treasure first produced Apo-lovastatin using a
non-infringing alternative process. It subsequently began producing Apo-lovastatin
using an infringing process, hence engaging Apotex’s liability.
[7]
The
Defendants claim, however, that the existence of this non-infringing
alternative process for producing Lovastatin, and which they used for a period
of time, constitutes a defence and that the Prothonotary erred by denying leave
to amend the Statement of Defence to include it. This amendment would enable
the Defendants to make the argument that the losses for which the Defendants may
be liable in consequence of Justice Snider’s finding of infringement are not
really damages at all.
Standard of Review and
Issue
[8]
The
standard of review applicable to decisions of a prothonotary is set forth in Merck
& Co. v Apotex Inc., 2003 FCA 488 at para 19. Discretionary orders of
prothonotaries ought not be disturbed on appeal to a judge of this Court unless
the questions raised in the motion are vital to the final issue of the case;
or, if the orders are clearly wrong, in the sense that the exercise of
discretion by the prothonotary was based upon a wrong principle or upon a
misapprehension of the facts. The appeal is to be heard by this Court de
novo if either prong of the test is met.
[9]
Insofar
as decisions refusing leave to amend pleadings are concerned there is a slight
refinement to the test. The point is well expressed by Justice Roger Hughes in
Chrysler Canada Inc. v Canada, 2008 FC 1049 at para
4:
Where a prothonotary has struck out a
proceeding such a decision is, of course, one vital to the final issue of the
case. Where, however in circumstances such as the present case, the
Prothonotary has not struck out the proceeding, that decision is not finally
determinative of any issue vital to the case, thus the decision presently under
consideration is to be reviewed on appeal on the second ground set out in Merck,
supra, namely, is the decision clearly wrong as being based on a wrong
principle or misapprehension of the facts. As Hugessen J. said in Peter
G. White Management Ltd. v. Canada, 2007 FC 686 (CanLII),
2007 FC 686 at paragraph 2:
2
Because I am in agreement with the prothonotary, not only with his
conclusion but also with the reasons he gave in support thereof, it is not
necessary that I go in any detail into the standard of review applicable to
appeals to a judge from a decision of a prothonotary. I would only note,
however, that with respect and contrary to the submission that was made to me
by Crown counsel, the mere fact that what was sought before the prothonotary
might have been determinative of the final issues in the case does not result
in the judge hearing the matter entirely de novo. A reading of the decisions,
and particularly the key decision of the Court of Appeal in the case of Canada
v. Aqua-Gem Investments Ltd., 1993 CanLII 2939 (FCA), [1993] 2 F.C. 425 (C.A.), makes it quite clear that it is not what was
sought but what was ordered by the prothonotary which must be determinative of
the final issues in order for the judge to be required to undertake de novo
review. I would add to that, that while I am of course aware of the recent
decision of the Court of Appeal in the case of Merck & Co. Inc. v. Apotex
Inc. [2003] F.C.J. No. 1925 (C.A.) (QL), where Justice Décary in reformulating the
rule spoke of "the questions raised in the motion", but I am quite
sure that he did not mean by that the motion which was before the prothonotary
but rather the motion (see Rule 51) which was before the judge on appeal from
the prothonotary. Put briefly, barring extraordinary circumstances, a decision
of a prothonotary not to strike out a statement of claim is not determinative
of any final issue in the case. In determining the standard of review the focus
is on the Order as it was pronounced, not on what it might have been.
[10]
By
analogy, as the order under appeal precludes the Defendants from raising what
they claim to be a significant defence to the damages claims and “having regard
to the order as it was pronounced” it will be reviewed de novo. As a
result, a de novo review of the Defendants’ amended pleading within the
Defence is warranted on this prong of the test.
At issue in the appeal
[11]
The
core issue is whether the Defendants should be granted leave to amend their
Defence to include the pleading that the existence of a non-infringing
alternative process available to the Defendants negates the loss or damages
actually suffered by the Plaintiffs. The plea is predicated on the theory or
construct that the Plaintiffs would have suffered those losses as a result of
the Defendants’ marketplace presence and competition in any event. In
response, the Defendants say that where, consequent upon a finding of
infringement and an election of damages, the plea of a non-infringing
alternative has been rejected for over a century.
[12]
The
essence of the Defendants’ argument, and the Prothonotary’s finding with
respect to it, is summarized at page 5 of the Order:
The jurisprudence is clear that in
awarding the equitable remedy of an accounting for profits—that is, the disgorgement
of the defendants’ profits—in an infringement action, the Court may take into
consideration non-infringing technologies that may be available to the party
that is found to have infringed. Apotex and AFI maintain that the approach to
causation adopted in calculating equitable compensation should apply equally in
assessing damages for patent infringement, as these too, are non-punitive
remedies designed to put the plaintiff in the position it would have been in
but for the breach. In this case, the defendants note that the availability of
an alternative process was not hypothetical. There was a non-infringing
process that the defendants, in fact, had used to produce bulk lovastatin, and
according to the defendants ought to be taken into account to reduce the
plaintiffs’ damages in the same manner as it would in the assessment of an
accounting of profits.
[13]
The
Prothonotary reviewed the existing case law in the United Kingdom, the United
States and Canada and crafted
a thorough decision substantively grounded in these jurisdictions’
jurisprudence. While the Prothonotary’s finding that the common law in each of
these countries has historically, with more frequency in some than with others,
rejected the argument advanced by the Defendants, there is little Canadian case
law on point specifically rejecting the pleading in context of determining
damages after a finding of infringement in a patent action. Most of the
commentary on the issue appears to be academic rather than judicial.
Test for
Leave to Amend Pleadings
[14]
Rule
221 of the Federal Courts Rules (SOR/98-106) (the Rules) articulates the
test under which pleadings may be struck out by the Court:
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221. (1) On motion, the
Court may, at any time, order that a pleading, or anything contained therein,
be struck out, with or without leave to amend, on the ground that it
(a) discloses no
reasonable cause of action or defence, as the case may be,
(b) is immaterial or
redundant,
(c) is scandalous,
frivolous or vexatious,
(d) may prejudice or
delay the fair trial of the action,
(e) constitutes a
departure from a previous pleading, or
(f) is otherwise an
abuse of the process of the Court,
and may order the action be
dismissed or judgment entered accordingly.
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221. (1) À tout moment, la Cour peut,
sur requête, ordonner la radiation de tout ou partie d’un acte de procédure,
avec ou sans autorisation de le modifier, au motif, selon le cas :
a) qu’il ne révèle aucune cause
d’action ou de défense valable;
b) qu’il n’est pas pertinent ou
qu’il est redondant;
c) qu’il est scandaleux, frivole ou
vexatoire;
d) qu’il risque de nuire à
l’instruction équitable de l’action ou de la retarder;
e) qu’il diverge d’un acte de
procédure antérieur;
f) qu’il constitue autrement un
abus de procédure.
Elle peut aussi ordonner que l’action
soit rejetée ou qu’un jugement soit enregistré en conséquence.
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[15]
I
find that the Defendants’ pleading that the availability of a non-infringing
alternative process for producing Lovastatin which they could have
further employed instead of the infringing process which Justice Snider has
already determined them to have actually employed, is a pleading the merit of
which should be determined by the trial judge. In reaching this conclusion it
cannot be over-emphasized that this Court is not adjudicating on the merits of
the Defendants’ particular argument, but simply on the question whether the
pleading triggers the criteria of Rule 221 such that they should be precluded
from advancing the argument, removing it from consideration by the trial judge.
As a necessary corollary, it remains for the trial judge to determine what
weight to give to that argument and whether it can succeed at the April 2013
trial.
[16]
The
jurisprudence with respect to the availability of a plea of a non-infringement
alternative, consequent to an election of the plaintiff for damages in lieu of
an accounting has a long antecedence. It begins in the UK with United
Horse-Shoe and Nail Co Ltd v Stewart Co (1888), 5 RPC 260 (HL) and finds
favourable treatment in Catnic Components Ltd v Hill & Smith Ltd,
[1983] FSR 512 (Pat Ct). In Canada it was considered in Domco Industries v
Armstrong Cork Canada Ltd, (1986), 10 CPR (3d) 53 (FCTD) and in Jay-Lor
Internat‘l Inc v Penta Farm Systems Ltd, 2007 FC 358.
[17]
Beginning,
as we must, at the beginning, Lord Halsbury, L.C., wrote at pp. 264 and 265 of United
Horse-Shoe as follows:
...The actual infringement complained of
consists in the sale of cases of nails produced by patent machines, which are
admitted to be infringements of the Pursuers’ patents. Every nail thus produced
was an infringement of the Pursuer’s patents, the sale of which could have been
interdicted, and would give a right of action against all concerned in its
production and sale. The question appears to me to arise solely on the
assessment of damages. …..I am satisfied, however, that the boxes and cases of
nails sold by the Defenders did, in fact, interfere with the Pursuers’ sale.
…I think it is nothing to the purpose to
show, if it is shown, that the Defenders might have made nails equally good,
and equally cheap, without infringing the Pursuers’ patent at all. I will
assume that to be proved but if one assumes that the nails which were, in fact,
made by the pirated machines injured the Pursuers’ sales, what does it matter
if it is ever so much established that the loss which the Pursuers have
sustained by the unlawful act of the Defenders might also have been sustained
by them under such circumstances as would give the Pursuers no right of action?
[Emphasis added]
[18]
The
Prothonotary characterized his language as specifically rejecting “the
defendants’ reliance on the availability of a non-infringing alternative as a
basis for reducing damages”. In Catnic, above, the UK Court followed United
Horse-Shoe and wrote:
I have to say at once, that in my
judgment the first of those arguments (i.e. argument (i)) is not open to the
defendants in law: see principle (d) above. The United Horse Shoe and Nail
Company Limited case — see especially the passages I have already cited from
the speeches in the House of Lords — is authority for the proposition that an
infringer is barred from defeating a plaintiff patentee’s claim for damages for
loss of profits by saying: “Yes, I infringed but I could have taken this market
from you by not infringing.” Much of Mr. Gratwick’s address on the “loss of
profits” part of the claim was devoted to, and much of the defendants’ evidence
directed to, this argument, but as in my view the argument is wrong in law the
evidence directed to is irrelevant and I need not consider it further.
[19]
In
Canada, in Domco,
the defendants argued that their liability to pay damages should be reduced
because the defendants could have used an available non-infringing alternative or
could have avoided infringement by obtaining a licence. The Court considered
the availability of a non-infringing alternative to be “immaterial” and that
the Court should be guided by the “cold hard facts”. Put otherwise, damages
are to be assessed by what choice the defendant made and not the choices the
defendant might have made:
…As [the Referee] indicated, one must
look at the cold hard facts as to what Armstrong here did, and the loss
suffered by Domco. The fact that Armstrong might have competed under a
licence is, to my mind, as immaterial as the argument that an infringer, in
respect of a claim by a patentee, could have sold a non-infringing product.
[20]
Finally,
in Jay-Lor, above, Justice Snider held at paras 113-115 as follows:
What is the significance of the election
made by the Plaintiffs for damages?
Courts have considered the distinctions
between damages and an accounting of profits. In Bayer AG v. Apotex Inc.
(2001), 10 C.P.R. (4th) 151, 102 A.C.W.S. (3d) 406 (Ont. S.C.J.) at 156, aff'd
(2002), 16 C.P.R. (4th) 417 (Ont. C.A.),
Justice Lederman described the difference in this way:
[...] While the goal of each remedy is
the same, the underlying principles are very different. An award of damages
seeks to compensate the plaintiff for any losses suffered by the plaintiff as a
result of the infringement. The amount of profits earned by the infringing
party is irrelevant. An accounting of profits, on the other hand, aims to
disgorge any profits improperly received by the defendant as a result of its
wrongful use of the plaintiff's property. Such profits, having been earned
through the use of the plaintiff's property, rightly belong to the plaintiff.
[...]
The Federal Court has accepted the
principle that “[i]t is irrelevant whether the defendant could not have damaged
the plaintiff just as much if instead of infringing he had taken steps to avoid
the claims of the patent: the infringing acts were unlawful acts and the only
question is what damages have they caused” (Domco Industries Ltd. v. Armstrong
Cork Canada Ltd. (1983), 76 C.P.R. (2d) 70 (Fed. T.D.) at 73, varied on
other grounds (1986), 10 C.P.R. (3d) 53 (Fed. T.D.) at 61 -62). The fact that a
defendant might have competed under a licence is as immaterial as the argument
that an infringer could have sold a non-infringing product….
[21]
I
agree with the Prothonotary’s review of the antecedent case law. The point of
departure, however, arises when the proposed argument is situated in the
context of the purpose and object of a motion to strike for failing to disclose
a “reasonable cause of action or defence, as the case may be.” In the recent
decision of R v Imperial Tobacco Canada Ltd, 2011 SCC 42 at para 21 the
Court considered the proper approach to motions to strike:
Valuable as it is, the motion to strike
is a tool that must be used with care. The law is not static and unchanging.
Actions that yesterday were deemed hopeless may tomorrow succeed. […] The
history of our law reveals that often new developments in the law first surface
on motions to strike or similar preliminary motions, like the one at issue in Donoghue
v. Stevenson. Therefore, on a motion to strike, it is not determinative
that the law has not yet recognized the particular claim. The court must rather
ask whether, assuming the facts pleaded are true, there is a reasonable
prospect that the claim will succeed. The approach must be generous and err on
the side of permitting a novel but arguable claim to proceed to trial.
[22]
In
Laboratoires Servier v Apotex Inc, 2007 FCA 350, citing paragraphs 31,
34, and 46 the Court of Appeal considered whether a doubtful argument should be
allowed to proceed at trial:
The specific question before the Motion
Judge was whether it was “plain and obvious”, by reason of paragraph 61(1)(b),
that Apotex could not possibly succeed on the question of “inventorship”. The
question was not whether the Motion Judge preferred one interpretation over the
other, but rather, whether the meaning of the paragraphs was a foregone
conclusion. In my view, it was not….
At paragraph 39 of its written
submissions, Apotex submits, rightly in my view, that “if the responding party
has put a conflicting interpretation ‘worth considering’, it is not plain and
obvious that the claim will not succeed”. Although it is clear the Motion Judge
correctly understood the “plain and obvious” test….she did not answer the
question of whether or not Apotex’s proposed interpretation was “worth
considering” or whether it had any chance of success. Rather, she reached her
own conclusion on the disputed point of statutory interpretation. That, in my
view, constitutes an error on her part. I therefore turn to the issue of
whether or not Apotex’s proposed interpretation has any chance of success….
After careful consideration of Apotex's
argument and the cases to which it refers us, I am satisfied that it cannot be
said that its proposed interpretation of paragraph 61(1)(b) is either tenuous
or devoid of any merit. I should add that there are no reported decisions on
point with respect to the proper interpretation of paragraph 61(1)(b) and that
none of the cases referred to by the Judge and the parties clearly point to the
interpretation favoured by the Judge….
[23]
It
was suggested in oral argument that Imperial Tobacco changed the law in
respect of motions to strike, moving from the test of “plain and obvious” to
that of “no reasonable prospect of success”. A similar argument was put before
Justice Roger Hughes in Association of Chartered Certified Accountants v
Canadian Institute
of Chartered
Accountants,
2011
FC 1516. In rejecting the argument, Justice Hughes wrote, at paragraph 9:
I do not view Imperial Tobacco as changing the
standard for striking out to the extent urged. Paragraphs 17 to 25 of that
decision provide an extensive review of the law on that subject. I emphasize,
as the Chief Justice wrote at paragraphs 21 and 22, that a motion to strike is
a tool that is to be used with care; that the Court must be generous and err on
the side of permitting a novel but arguable claim to proceed, and that the
facts as pleaded must be accepted as true unless they are manifestly incapable
of proof.
[24]
I
agree with this analysis of the effect of Imperial Tobacco, and in
situating the proposed plea in the light of the Chief Justice’s direction that
novel but arguable claims should be allowed to proceed, several observations
are in order:
a. The proposed
plea finds persuasive support in US jurisprudence; Grain Processing
Corporation v American Maize-Products Co, [1999] USCAFED 131; 185 F3d 1341
(Fed Cir 1999), at para 10:
…
a fair and accurate reconstruction of the "but for" market also must
take into account, where relevant, alternative actions the infringer
foreseeably would have undertaken had he not infringed. Without the infringing
product, a rational would-be infringer is likely to offer an acceptable
noninfringing alternative, if available, to compete with the patent owner
rather than leave the market altogether. The competitor in the "but
for" marketplace is hardly likely to surrender its complete market share
when faced with a patent, if it can compete in some other lawful manner.
Moreover, only by comparing the patented invention to its next-best available
alternative(s) - regardless of whether the alternative(s) were actually
produced and sold during the infringement - can the court discern the market
value of the patent owner's exclusive right, and therefore his expected profit
or reward, had the infringer's activities not prevented him from taking full
economic advantage of this right. […] Thus, an accurate reconstruction of the
hypothetical "but for" market takes into account any alternatives
available to the infringer.
[Citations
omitted]
b. While the
Defendants say that the US jurisprudence needs to be situated in its
statutory context, this goes to the substance of the argument, not whether it
can be stuck on a Rule 221 motion.
c. Secondly, in
the 125 years since the decision in United Horse-Shoe, only two Canadian
decisions adopt and apply the principle (Domco in 1983 and Jay-Lor
in 2007). In both those cases, the argument was rejected after trial and not
on a motion to strike.
d. It is well
established that a pleadings motion is not an appropriate time to decide
important questions of law.
e. The
Plaintiffs contend that availability of a plea of a non-infringing alternative
must be reassessed in light of the Supreme Court of Canada’s (SCC) approach to
damages. The Defendants argue that, the distinction between accounting and
damages needs to be reassessed in light of what is said to be a change in the law
of damages, as evinced by the SCC’s decision in Cadbury Schweppes Inc
v FBI Foods Ltd, [1999] 1 S.C.R. 142 and Canson Enterprises Ltd v Boughton
& Co, [1991] 3 S.C.R. 534.
f.
The
proposed plea is arguable, and is neither frivolous nor vexatious, rather, the
argument in support of the plea is cogent and compelling. In making this
statement the Court makes no observation on its ultimate merit.
[25]
With
respect to the question of change in the law of damages, Justice Binnie in Cadbury
noted:
In the present case, the trial judge
found, and the Court of Appeal agreed, that the Clamato [juice] formula and
related processes, insofar as they had been disclosed to the appellants,
constituted a unique combination of elements, notwithstanding that some or all
of the constituent elements were themselves widely known within the juice
industry. It is to be emphasized that this is a case of unauthorized use as
opposed to unauthorized disclosure. The information passed to Caesar Canning
was found to satisfy the requirements of being inaccessible to the uninitiated,
and to constitute an identifiable and distinct source of information which
Caesar Canning wrongfully used for its own commercial advantage. As such, it
was worthy of protection, but what, in dollar terms, did its misuse cost the
respondents?
[Emphasis added]
[26]
In
Canson the Chief Justice held:
In summary, compensation is an equitable
monetary remedy which is available when the equitable remedies of restitution
and account are not appropriate. By analogy with restitution, it attempts to
restore to the plaintiff what has been lost as a result of the breach; i.e.,
the plaintiff's lost opportunity. The plaintiff's actual loss as a consequence
of the breach is to be assessed with the full benefit of hindsight.
Foreseeability is not a concern in assessing compensation, but it is
essential that the losses made good are only those which, on a common sense
view of causation, were caused by the breach. The plaintiff will not be
required to mitigate, as the term is used in law, but losses resulting from
clearly unreasonable behaviour on the part of the plaintiff will be adjudged to
flow from that behaviour, and not from the breach. Where the trustee's breach
permits the wrongful or negligent acts of third parties, thus establishing a
direct link between the breach and the loss, the resulting loss will be
recoverable. Where there is no such link, the loss must be recovered from the
third parties.
[Emphasis added]
[27]
In
sum, the Defendants contend that the distinction between the two heads of
damage, if not conflated, are to be considered subservient to a single
overarching test that the loss made good are only those which, on a common
sense view of causation, arose from the breach.
[28]
The
teaching of Hunt v Carey Canada Inc, [1990] 2 S.C.R. 959 and Imperial
Tobacco¸ above, is that it is not appropriate at this stage to
engage in a detailed analysis of the legal argument, and more particularly,
whether the proposed argument is good law. The point was made in Hunt v
Carey, at para 33:
Thus, the test in Canada governing the
application of provisions like Rule 19(24)(a) of the British Columbia Rules of
Court is the same as the one that governs an application under R.S.C. O. 18, r.
19: assuming that the facts as stated in the statement of claim can be proved,
is it "plain and obvious" that the plaintiff's statement of claim
discloses no reasonable cause of action? As in England, if there is a chance that the plaintiff
might succeed, then the plaintiff should not be "driven from the judgment
seat". Neither the length and complexity of the issues, the novelty of
the cause of action, nor the potential for the defendant to present a strong
defence should prevent the plaintiff from proceeding with his or her case. Only
if the action is certain to fail because it contains a radical defect
ranking with the others listed in Rule 19(24) of the British Columbia Rules of
Court should the relevant portions of a plaintiff's statement of claim be
struck out under Rule 19(24)(a).
[Emphasis added]
[29]
At
issue in Hunt v Carey was whether the tort of conspiracy could be
extended to cover the allegation that the defendant had conspired not to
disclose information about the harmful effects of asbestos. The weight of the longstanding
case law, both in the UK and Canada, were against the pleading. As well, some
three years earlier, in Frame v Smith [1987] 2 S.C.R. 99, the SCC had
declined to extend the tort to encompass these circumstances. When the issue
came before the Court again in Hunt v Carey, the SCC did not find these
arguments determinative. The Court’s response to the argument that the
jurisprudence had consistently rejected the extension of the doctrine of the
tort of conspiracy. At paragraphs 47 and 52 the Court said:
The difficulty I have, however, is that
in this appeal we are asked to consider whether the allegations of conspiracy
should be struck from the plaintiff's statement of claim, not whether the
plaintiff will be successful in convincing a court that the tort of conspiracy
should extend to cover the facts of this case. In other words, the question
before us is simply whether it is "plain and obvious" that the
statement of claim contains a radical defect.
…
The fact that a pleading reveals "an
arguable, difficult or important point of law" cannot justify striking out
part of the statement of claim. Indeed, I would go so far as to suggest that
where a statement of claim reveals a difficult and important point of law, it
may well be critical that the action be allowed to proceed. Only in this way
can we be sure that the common law in general, and the law of torts in
particular, will continue to evolve to meet the legal challenges that arise in
our modern industrial society.
[30]
Viewed
in this context, and in light of the SCC’s approach to motions to strike, this
pleading does not contain a radical defect. The appellant advances an arguable,
and important point of law, and it is well-established, through Hunt v Carey,
Fullowka
v Pinkerton's of Canada Ltd., 2010 SCC 5, [2010] 1 S.C.R. 132 and Imperial Tobacco,
that a motion to strike is not the appropriate time to decide important or
serious questions of law. Indeed, it has been said that even authority binding
on a motions judge is not sufficient ground to strike a pleading if an appeal
to a higher court might reasonably produce a different view of the law: Fullowka v
Whitford
(1996)
147 DLR
(4th) 531.
Here, there is no binding Canadian authority, nor consideration by a trial
judge after a final argument and in the context of relevant facts.
[31]
While
the argument faces formidable obstacles to success, not the least of which is
that the Patent Act (RSC, 1985, c P-4) preserves the right of the
plaintiff to elect between an accounting for profits and damages, the inherent
logical difficulty in predicating an award of damages not on what happened, but
on what did not happen and the rejection of the plea in two previous decisions
of the Court in 1986 and 2007. The fact that, in this Court’s view, “a common
sense view of causation” is predicated on what the Defendants did, as opposed
to what the Defendants might have done, is not determinative, rather it is a
question best left for the trial judge. It cannot be said that the answer is
so forlorn that it is plain and obvious that it cannot succeed.
[32]
The
motion is granted. Costs in the cause.
ORDER
THIS COURT
ORDERS that the motion is granted. Costs in the cause.
"Donald
J. Rennie"
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