Date: 20110711
Docket: T-1409-04
Citation: 2011 FC 862
Toronto, Ontario, July 11, 2011
PRESENT: The Honourable Mr. Justice Hughes
BETWEEN:
|
|
ASTRAZENECA CANADA INC., AND
AKTIEBOLAGET HÄSSLE
|
|
|
|
Plaintiffs
|
|
and
|
|
|
APOTEX INC.
|
|
|
|
Defendant
|
|
AND BETWEEN:
|
|
|
|
|
APOTEX INC.
|
|
|
|
|
Plaintiff by Counterclaim
|
|
|
and
|
|
|
|
ASTRAZENECA CANADA INC., AKTIEBOLAGET
HÄSSLE and ASTRAZENECA AB
|
|
|
|
|
Defendants by Counterclaim
|
REASONS FOR ORDER AND ORDER
[1]
The
present Order arises from an earlier Order that I made in this action on June
20, 2011. At that time, I had before me a motion brought by the Plaintiffs to
strike certain paragraphs from the Amended Statement of Defence and
Counterclaim filed May 11, 2011; or in the alternative, for particulars. I
ordered that paragraph 157S of that pleading be struck out with leave to amend
and that a draft should be submitted for consideration by the Plaintiffs, and
that a further hearing in respect of any objections to the draft was to be
scheduled so as to expedite matters.
[2]
Paragraph
157S, as was struck out, read:
157S In addition, courts in other
jurisdictions have made findings in certain cases that are contrary to or
inconsistent with some or all of the findings relied upon by the Plaintiffs at paragraph
45 of the Statement of Claim. The Plaintiffs, and/or one or more of their
proxies, were parties to these cases. Accordingly, neither issue estoppel nor
abuse of process can apply to such findings. To the contrary, it is the
Plaintiffs who should be estopped from advancing allegations contrary to the
findings made by courts in other jurisdictions.
[3]
The
revised draft pleadings re-numbered the paragraphs, and the proposed revisions
are now numbered as paragraphs 176 through to and including 192. Because of
their length, I append them to these reasons.
[4]
Plaintiffs’
Counsel took objection to each of paragraphs 176 to 192 and grouped the
objections into four categories as follows:
Category 1 Paragraphs
191 and 192
Category 2 Paragraphs
186 to 190
Category 3 Paragraphs
183 to 185
Category 4 Paragraphs
176 to 182
[5]
Plaintiffs’
Counsel also objected to the open-ended nature of paragraph 176. Defendant’s
Counsel undertook to amend that paragraph to add words such as “as
particularized in the following paragraphs” so as to limit what is said in
paragraph 176 to the subsequent paragraphs in that pleading.
[6]
I
will consider each of the paragraphs as categorized:
Category 1: Paragraphs
191 and 192
1. These
paragraphs recite that the Defendant Apotex is aware of litigation in certain
foreign countries, England, etc., where the Plaintiffs or related parties
were litigants and asserted “certain patents…for omeprazole”. The Defendant
asks that it be allowed to discover the Plaintiffs to find out more about this
litigation, presumably for the purpose of sifting through what might be
discovered as to whether it might be useful to support a plea of estoppel or
abuse of process.
2. This
is a classic fishing expedition. Discovery is not, in and of itself, a separate
right to which a party may be entitled; it is part of a process initiated by
proper pleading. The pleadings set out in paragraphs 191 and 192 are clearly
improper and cannot be included in the Amended Defence and Counterclaim.
Category 2: Paragraphs
186 to 190
1. These
paragraphs relate to the United States proceedings as set out
in paragraphs 43 to 46 of the Third Amended Statement of Claim, which the
Plaintiffs were permitted to file by the Order of Prothonotary Lafreniere dated
8 April 2011 and affirmed by Justice Mosley dated 20 May 2011. I understand
that the Defendant has filed an appeal from the latter Order.
2. In
the Plaintiffs’ Amended Statement of Claim, they assert that there was an
action in the United States Court between the same parties () as are before
this Canadian Court and that certain factual determinations as to capsules
identical to those of the Defendant as are at issue here were made. The
Plaintiffs plead estoppel and abuse of process as a result.
3. Paragraphs
186 to 190 of the proposed Amended Defence relate to this United States
litigation and assert that the Plaintiffs in that litigation (the same as or
privies of the Plaintiffs here) elected not to assert certain claims of
the United States patent at issue there and, as a result, cannot assert
equivalent claims in the Canadian litigation.
4. This
is a novel pleading for which neither Counsel nor I could find a precedent. To
the extent that anything comes close, the remarks of Layden-Stevenson J. (as
she then was) in Johnson & Johnson Inc. v Boston Scientific Ltd., 2008 FC
552, 71 CPR (4th) 123 at paragraphs 260 to 268 may be of assistance:
260 In
support of its arguments, Boston Scientific refers to the comments of Madam
Justice Sharlow, then of the Federal Court Trial Division, in Connaught Laboratories Ltd. v. Medeva Pharma Ltd. (1999), 4
C.P.R. (4th) 508 (F.C.T.D.) (Connaught) aff'd.
(2000), 4 C.P.R. (4th) 521 (F.C.A.), specifically those at paragraphs 15, 16
and 31 as follows:
In the final analysis, the validity of a patent
granted by the laws of Canada cannot be determined by the legal regime in another country.
...
However, I do not understand why inconsistencies
in findings of fact made by different tribunals should be tolerated if they can
be avoided without offending the substantive law of procedural norms. Connaught is simply attempting to
argue in this case that it is wrong in principle for Medeva to be permitted to
take inconsistent positions on specific questions of fact that are in issue in
this case and that have already been litigated elsewhere.
...
...Any plea of res judicata or a related
principle adds complexity, because they compel the Court to consider difficult
issues as to the nature of the prior proceedings and the precise significance
of particular conclusions reached in the course of those proceedings.
...
It is also worth noting that the problem of
complexity may be viewed in different ways. Patent litigation is already
complex, in this Court and in every court that deals with patents. Ultimately,
patent litigation may be simplified by principles that permit or require, in appropriate cases, the adoption of findings of fact
in foreign proceedings. But this will never happen unless, in this case or
another one, the Court undertakes an examination of the arguments that would
open the door for establishing such a principle. (my emphasis)
261 No
further authority is cited by Boston Scientific, although the following excerpt
from Kirin-Amgen Inc.
& Another v. Boehringer Mannheim GmbH & Another v. Jannsen-Cilag Limited, [1997]
F.S.R. 289 (Eng. C.A)(Kirin-Amgen) is cited
in Justice Sharlow's reasons:
...I envisage cases where issue estoppel will
arise in patent actions. For instance, the same issue can arise in different
countries of the world, for example whether a particular scientific effect
occurs when the invention or a manufacturing process is carried out or how an
infringing product is made, or the properties of a product or its composition.
Thus this judgment should not be taken as concluding that issue estoppel has no
place in patent actions. To the contrary, I believe that it does in appropriate cases. (my emphasis)
262 Justice
Sharlow's comments in Connaught occur in relation to
an appeal from a prothonotary's decision to strike portions of a pleading
purporting to rely on the findings of foreign jurisdictions to support a
finding of res judicata. Justice
Sharlow allowed the appeal on the basis that, "in principle, there is no
reason to conclude that a plea of issue estoppel cannot be based on a foreign
judgment, although inevitable difficulties will arise in establishing the
conditions for its application." I regard it as settled law that pleadings
that are worthy of the Court's attention should not be struck. In Kirin-Amgen, although noting that there may be
circumstances in which issue estoppel can arise with respect to the findings of
a foreign jurisdiction court, the Court declined to apply the doctrine.
263 In
the end, whether to apply issue estoppel, even in circumstances where all the
conditions are met, is a matter of discretion. Because I do not consider that
this is an appropriate case to apply issue
estoppel, I see little merit in reciting a lengthy and detailed description of
the various proceedings (with their attendant discrepancies) from the foreign
jurisdictions.
264 The
evidence reveals that the decisions from the United Kingdom,
the Netherlands, the United States and France are not consistent. In other words, the courts of the
foreign jurisdictions did not arrive at the same outcomes. Notably, that was
not the situation in Connaught.
265 An
admission made in a foreign proceeding, which is expressly stated to be for the
purpose of that proceeding only, cannot, in my view, be relied upon to
establish that very fact in another proceeding, in another jurisdiction.
266 I
agree with Boston Scientific that the law of the United Kingdom "most
closely resembles that of Canada". Notwithstanding, there are distinctions. More
specifically, with respect to the patents in issue in the United Kingdom,
European Patent 0335341 (EP '341) is an improvement of the invention claimed in
European Patent 0221570 (EP '570). However, EP '570 is not the
"corresponding" patent for the '505 Patent. Rather, it corresponds to
Canadian Patent No.1338303 (the '303 Patent), which is not in issue. The claims
of EP '570 and EP '341 are similar to, but not identical to, the claims of the
'505 and '186 Patents.
267 Moreover,
Mr. John Thomas, a pre-eminently qualified legal expert, cautions that the term
"corresponds" is not one of precision. He states that patents are
"among the most complex legal documents that can be produced". He
notes that there are language differences that render understanding of foreign
laws very complex. Differences in practice and procedure result in
"distinctions among these claims".
268 Further,
claim construction is a question of law and is antecedent to issues of
infringement and validity. Infringement and validity determinations are made by
reference to the claims, as construed. Boston Scientific does not suggest (nor could it) that res judicata applies
to claim construction.
5. Justice
Layden-Stevenson properly pointed out that admissions made in foreign
litigation expressly for the purpose of that litigation only cannot be relied
upon in litigation in Canada. She also correctly pointed out that one
cannot readily assume that a foreign patent “corresponds” to a Canadian one and
that the Court must be mindful of the differences in claim construction, which
is a matter of law.
6. The
proposed paragraphs 186 to 190 go a step further than the Johnson &
Johnson
pleadings and assert that what a party did not do in foreign litigation
somehow precludes them from doing something in respect of a “corresponding”
patent in Canada.
7. The
Court must be mindful that litigation is costly and that unnecessary irrelevant
or distracting matters should not be put in play simply because there is a
possibility of relevance. I have in mind the recent decision of the Supreme
Court of Canada in Masterpiece Inc. v Alavida Lifestyles Inc., 2011 SCC
27, where Rothstein J. for the Court in dealing with expert evidence wrote at
paragraph 76 remarks that are equally pertinent to the pleadings here:
76 In
light of the relatively extensive expert evidence in this case, and the
difficulties with the evidence that I discuss below, I think it is timely to
recall that litigation is costly. Courts must fulfil their gatekeeper role to
ensure that unnecessary, irrelevant and potentially distracting expert and
survey evidence is not allowed to extend and complicate court proceedings.
While this observation applies generally, I focus particularly on trade-mark
confusion cases, which is the subject of this appeal.
8. Paragraphs 186 to 190 cannot be included in the
Amended Defence.
Category 3: Paragraphs
183 to 185
1. These paragraphs again relate to the United States proceedings
recently put into play by the Plaintiffs in their Amended Statement of Claim.
The decision of the United States Courts, in part, makes reference to
proceedings in Korea and the findings of the Korean
Court. The proposed paragraphs 183 to 185
assert that as a result of contradictory positions taken by the Plaintiffs in
the United States and Korean proceedings, the Plaintiffs cannot now assert
that only the United States proceedings affect and estop Apotex in the Canadian
proceedings.
2. Apotex was not a party to the Korean
proceedings, nor was it a party to the so-called “first wave” of the United States
proceedings. Paragraphs 183 to 185 are directed only to alleged contradiction
in the “first wave” United States and Korean litigation; in other words, only to litigation
in which Apotex was not a party.
3. For reasons as set out earlier respecting
Category 2 paragraphs, these paragraphs 183 to 185 do not allege a proper
defence and will not be allowed.
Category 4: Paragraphs
176 to 182
1. The Defendant Apotex has already undertaken to
make amendments to the draft paragraphs 176, and no further comment is required
here.
2. Paragraphs 177 to 182 are directed to the Korean
action, which is recited in the United States decisions that the Plaintiffs have recently put in play.
The Defendant Apotex says that the Korean
Court found the product at issue there did
not infringe the Korean patent. That was a different defendant, but Apotex says
that the product is the same.
3. Plaintiffs’ Counsel, relying on excerpts from
its discovery of the Defendant, asserts Apotex’s product is different from the
Korean product and that the lynchpin of this proposed plea must fail. This is a
matter of evidence to be proved at trial, with the assistance of experts, if
appropriate. At a pleading stage, the Court must assume the truth of what is
sought to be alleged.
4. Paragraphs 176 to 182 raise a triable issue and may
be part of the Amended Defence.
CONCLUSION AND COSTS
[7]
As
a result, the Defendant may, within ten (10) days from the release of these
reasons and order, file an Amended Defence to include, with reference to the
draft, paragraph 176 with amendment as undertaken, and paragraphs 177 to 182.
It may not include paragraphs 183 to 192 of the draft.
[8]
The
parties have agreed, and I concur, that costs shall be in the cause.
ORDER
FOR THE
REASONS PROVIDED:
THIS COURT
ORDERS that:
1.
The
Defendant may file, within ten (10) days hereof, an Amended Defence so as to
include, with reference to the draft provided, paragraph 176 as undertaken to
be amended, and paragraphs 177 to 182; paragraphs 183 to 192 of the draft shall
not be included.
2.
Costs
in the cause.
“Roger T. Hughes”
ANNEX A
176. In addition, courts
in other jurisdictions have made findings in certain cases that are contrary to
or inconsistent with some or all of the findings relied upon by the Plaintiffs
at paragraph 45 of the Statement of Claim. The Plaintiffs, and/or one or more
of their proxies, were parties to these cases. Accordingly, neither issue
estoppel nor abuse of process can apply to such findings. To the contrary, it
is the Plaintiffs who should be estopped from advancing allegations contrary to
the findings made by courts in other jurisdictions. Further, the Plaintiffs
have taken contradictory positions in these proceedings in an attempt to
advance their own interests. The Plaintiffs should not be permitted to approbate
and reprobate.
177. In or about 1998,
Chongkeundang Co., Ltd. (“CKD”) commenced an action in the Republic of Korea
against Astra U.S.A. Inc. and Astra Korea Ltd. (the “Astra Korea Parties”) in
the Seoul District Court, Department of Civil Affairs XII, being Case Nos. 95
Ka-Hap 55954 and 97 Ka-Hap 89582 (the “Korean Action”). CKD sought damages
related to an injunction obtained by the Astra Korea Parties against CKD. The
Astra Korea Parties counterclaimed for, among other things, an order that CKD
not manufacture omeprazole pursuant to a certain process on the basis that said
process and/or the CKD omeprazole product allegedly infringed a patent held by
Astra U.S.A. Inc.
178. The Astra Korea Parties are controlled by
the Plaintiffs or affiliates or subsidiaries of or are otherwise related to the
Plaintiffs. Further, the Astra U.S.A. Inc. patent in issue in the Korean Action
is materially the same as the ’693 Patent.
179. In the Korean
Action, the Seoul District Court held that:
In the course of
the Plaintiff’s forming the core with Omeprazole and excess Larginine and
enteric coating the above core with HPMCAS [hydroxypropyl methylceullulose], a
continuous but non-uniform, thin layer with a thickness of about 15-20 μm
is formed between the core of the OMP Tablet and the enteric coating layer.
This polymeric thin layer is formed by the spontaneous surface reaction of
L-arginine, the main ingredient of the tablet, with HPMCAS, the main ingredient
of the enteric coating layer, at ambient temperatures. No separate step is
required to form such a thin layer...
[...]
[I]t is quite
possible that the above thin layer does not contribute to the prevention of
decomposition and degradation, due to its discontinuity and the presence of
fine pin-holes. Therefore, the above spontaneous thin layer forming process
cannot be considered to be the equivalent with [sic] inner layer forming
process of Astra U.S.’s patent.
180. In the Korean
Action, the Astra Korea Parties took the position that, as a result of the
formation of the “thin layer” referred to by the Seoul District Court in the
quote above, CKD had infringed Astra U.S.A. Inc.’s patent. The Seoul District
Court found that CKD had not infringed Astra U.S.A. Inc.’s patent. CKD’s
omeprazole product did not contain a continuous inert sublayer 2 to 6 microns
thick that hugs the surface of the core and separates the core from the enteric
coating. The decision of the Seoul District Court was upheld on appeal in
Appellate Trial No. 94 Kang Dang 457, which was a final decision.
181. Apotex’s process of
manufacture is materially the same as the process of manufacture of CKD that
was at issue in the Korean Action, and its omeprazole product is materially the
same as CKD’s omeprazole product that was at issue in the Korean Action.
182. In view of the
foregoing, Apotex pleads that the purported findings of the U.S. Proceeding
ought not to be applied against Apotex in the event that the Court concludes
that findings in a foreign proceeding can be applied to bind parties in a
Canadian proceeding, which is denied. If such findings are to be applied, then
Apotex pleads that the factual finding of the Korean Court concerning CKD’s
omeprazole product, a matter which was fully litigated by the Plaintiffs’
privies and was finally decided, is binding on the Plaintiffs herein by reason
of issue estoppel and abuse of process, and the Plaintiffs are precluded from
contesting or making any allegations inconsistent with these findings of fact.
183. Further, in the
“first wave” litigation in the U.S. Proceeding referred to above, the
plaintiffs therein, being Hassle and other related parties, took a
contradictory position to the one taken by the Astra Korea Parties (who are
related parties to the Plaintiffs herein and the plaintiffs in the “first wave”
litigation) in the Korean Action. In the “first wave” litigation, the
plaintiffs therein asserted that CKD’s process and product did not result
in the formation of what the U.S.
court called a “separating layer”.
184. In In re
Omeprazole Patent Litigation, 2004 U.S. Dist. LEXIS 9447, the U.S. Court noted that the expert
testimony advanced by the plaintiffs (i.e., Hassle and other related parties)
in the “first wave” litigation in this regard was “entitled to little if any
weight”. This decision was upheld on appeal by the United States Court of
Appeals for the Federal Circuit in In re Omeprazole Patent Litigation,
483 F.3d 1364.
185. Accordingly, given
that the Plaintiffs (or related parties) have taken contradictory positions in
the U.S. “first wave” litigation and the Korean Action concerning CKD’s process
and product, and took a position in the U.S. “first wave” litigation concerning
CKD’s process and product that was contrary to findings of fact of the Korean
Court (including on appeal), Apotex states the Plaintiffs should be precluded
from asserting that Apotex is bound by the findings in the U.S. Proceeding.
186. In addition, the
plaintiffs in the U.S. Proceeding did not assert that Apotex infringed claims 8
and 9 of U.S. Patent No. 4,786,505 (“the ’505 Patent”), which was one of the
patents in issue in the U.S. Proceeding. The Plaintiffs assert in subparagraph
44(b) of the Third Amended Statement of Claim that the ’505 Patent is the United States equivalent of the ’693
Patent. However, the Plaintiffs nevertheless assert in the within action that
Apotex infringed the equivalent claims to claims 8 and 9 of the ’505 Patent,
namely claims 11, 12 and 13 of the ’693 Patent.
187. In light of the fact
that the Plaintiffs (or their privies) have taken contradictory positions in
the U.S. Proceeding and the within proceeding concerning the foregoing claims
of the ’505 Patent and the ’693 Patent, Apotex states the Plaintiffs should be
precluded from asserting that Apotex is bound by the findings in the U.S.
Proceeding.
188. In the event that
the Court concludes that findings in a foreign proceeding can be applied to
bind parties in a Canadian proceeding, which is denied, then the Plaintiffs
ought to be precluded from asserting that Apotex infringed claims 11, 12 and 13
of the 693 Patent, as the Plaintiffs’ (or their privies) failure to assert the
equivalent claims in the U.S. Proceeding amounts to an acknowledgement that
Apotex’s product (which the Plaintiffs plead is the same in the U.S. and
Canada) does not infringe those claims. Specifically, the Plaintiffs’ (or their
privies) failure to allege in the U.S. Proceeding that Apotex’s formulation has
a water content less than 1.5% as claimed in claim 9 of the ’505 Patent, ought
to estop them from now asserting that Apotex’s formulation has such a water
content, as claimed in claim 13 of the ’693 Patent. Similarly, the Plaintiffs’
(or their privies) failure to allege in the U.S. Proceeding that Apotex’s
formulation did not have any of the enteric coatings, optionally with a
plasticizer, set out in claim 8 of the ’505 Patent, ought to estop them from
now asserting that Apotex’s formulation has any of the claimed enteric
coatings, or that it has a plasticizer, as claimed in claims 11 and 12 of the
’693 Patent.
189. Furthermore, claim 1
of the ’693 Patent requires a formulation with an enteric coating. All of the
asserted claims of the ’693 Patent are dependent upon claim 1, directly or
indirectly. Accordingly, because the Plaintiffs ought to be estopped from
asserting that Apotex’s product has one of the enteric coatings claimed in
claims 11 and 12 of the ’693 Patent for the reasons set out above, there is no
enteric coating Apotex used that could infringe claim 1 of the ’693 Patent.
Therefore, the Plaintiffs ought to be estopped from asserting that Apotex
infringed any of the claims of the ’693 Patent.
190. Furthermore, to the
extent that the Court concludes that findings in a foreign proceeding can be
applied to bind parties in a Canadian proceeding, which is denied, the
Plaintiffs ought not to be afforded a second opportunity to assert these claims
against Apotex, having chosen not to do so in the U.S. Proceeding.
191. In addition to the
Korean Action, Apotex is aware of litigation in England and Australia wherein certain patents of
the Plaintiffs (or related parties) for omeprazole were in issue. It is unclear
from publicly available information whether infringement was in issue in these
proceedings. Such information is solely within the knowledge of the Plaintiffs.
Apotex seeks the right to explore on discovery of the Plaintiffs whether
infringement was in issue in these proceedings and whether the results of these
proceedings preclude the Plaintiffs’ reliance on issue estoppel and abuse of
process.
192. Apotex is also aware
of litigation in Denmark, Norway, Israel and Germany relating to certain patents
of the Plaintiffs (or related parties) for omeprazole. These decisions are
referenced in brief on the website of the Plaintiffs at
http://www.astrazeneca.com. However, Apotex has been unable to obtain, and thus
review and consider, the decisions in these proceedings. The details of these
proceedings are solely within the knowledge of the Plaintiffs. Apotex seeks the
right to explore on discovery of the Plaintiffs whether infringement was in
issue in these proceedings and whether the results of these proceedings
preclude the Plaintiffs’ reliance on issue estoppel and abuse of process.
Email this Content