Docket: T-1888-15
Citation:
2016 FC 31
Ottawa, Ontario, January 8, 2016
PRESENT: Madam Prothonotary Mireille Tabib
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BETWEEN:
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GILEAD
SCIENCES, INC., GILEAD SCIENCES CANADA, INC., AND BRISTOL-MYERS SQUIBB &
GILEAD SCIENCES LLC
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Plaintiffs
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and
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TEVA CANADA
LIMITED
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Defendant
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ORDER AND REASONS
[1]
Teva Canada Limited brings this motion to strike
the statement of claim of the plaintiffs Gilead Sciences Inc., Gilead Sciences
Canada Inc. and Bristol-Myers Squibb and Gilead Sciences LLC (collectively “Gilead”)
on the basis that it fails to plead sufficient material facts to support an
action for past infringement or to properly support a quia timet claim.
Gilead argues that the facts it has pleaded are sufficient but , if not, that
it should be given an opportunity to amend to plead further material facts,
including facts that have been disclosed to it in the course of discovery in a
separate action involving Gilead Sciences Inc. and Teva. In order to do this,
Gilead Sciences Inc. has sought to be relieved of the implied undertaking rule,
pursuant to which it is prevented from using information obtained on discovery
for any other litigation or purpose.
[2]
The parties had agreed that both motions should
be heard together. For the reasons that follow, I am satisfied that Gilead
should be relieved of the implied undertaking rule. I have also concluded that
Gilead’s statement of claim, as it currently exists, fails to set out
sufficient material facts to support an action for past or current infringement
and that none of the amendments proposed by Gilead should be permitted in an
attempt to cure that defect. With respect to the quia timet claim, the
statement of claim, as currently framed, also fails to allege sufficient
material facts but I am satisfied that the amendments proposed in Gilead’s
motion record, combined with further particulars as to the extent of the losses
it would suffer, would be sufficient to sustain a quia timet claim, and
that Gilead should be given an opportunity to make those amendments.
I.
Confidentiality
[3]
The discovery information at issue had been
designated by Teva as confidential pursuant to a protective order issued in the
relevant proceeding. That protective order governed the manner in which the
parties were to treat information exchanged between them, but did not authorize
them to file information under seal without first demonstrating to the Court
that the information merits the protection of a confidentiality order. Teva has
now made a motion for a confidentiality order in respect of the discovery
information at issue. The need to uphold and enforce the implied undertaking
rule would, by itself, justify the issuance of a confidentiality order if
Gilead’s motion were dismissed. However, if Gilead were relieved of the implied
undertaking rule, the evidence tendered by Teva on its motion is insufficient
to support a confidentiality order. The evidence demonstrates only that Teva
has always treated the information as confidential; it falls short of
establishing that disclosure would likely cause serious harm to Teva. Teva has
now abandoned its motion for a confidentiality order, but in order to protect
the information from premature disclosure in case of a successful appeal of the
order relieving Gilead from the implied undertaking rule, the discovery
information shall remain under seal until all avenues of appeal of that order
have been exhausted. For the same reasons, I have avoided discussing in these
reasons the specifics of the discovery information at issue. It is sufficient,
for these reasons to be intelligible, that the general nature of the
information be disclosed.
II.
Procedural background
[4]
This action is part of a series of proceedings
involving Canadian patents number 2,298,059 (the “059 Patent”) and 2,261,619
(the “619 Patent”), owned by Gilead Sciences, Inc. and covering, respectively,
the fumarate salt of tenofovir disoproxil (“TDF”) and tenofovir disoproxil
(“TD”) itself. These antiviral drugs have been marketed in Canada by Gilead
Sciences Canada, Inc. under the trademarks TRUVADA, ATRIPLA and VIREAD. The 059
Patent will expire on July 23, 2018, while the 619 Patent will expire on July
25, 2017.
[5]
In late 2011 and 2012, Teva served on Gilead
Notices of Allegation for products containing TDF which it compared to TRUVADA,
ATRIPLA and VIREAD, against which both patents were listed. The Notices of
Allegation alleged only the invalidity of the patents; they did not contain
allegations of non-infringement. Gilead responded by commencing applications
under the Patented Medicines (Notice of Compliance) Regulations, SOR/93-133
for orders prohibiting the Minister of Health from issuing Notices of
Compliance to Teva for these products until the expiration of the 059 and 619
Patents (Court files T-8-12, T-280-12 and T-1708-12).
[6]
While the prohibition proceedings were still
pending, Teva, in August 2012, served and filed a statement of claim in Court
file T-1529-12, seeking a declaration that the 619 and 059 Patents are invalid,
void and of no force and effect. That action does not make any allegation or
seek any declaration with respect to the non-infringement of the patents, but
it does allege that Teva Canada is an interested party because it wishes to
import, make, use and sell in Canada TDF or products containing TDF. The
discovery transcripts that Gilead seeks to use were constituted in that
impeachment action in October 2013, after the hearing of the prohibition
proceedings, but before a judgment was rendered.
[7]
On December 20, 2013, this Court granted an
order prohibiting the Minister of Health from issuing an NOC to Teva until
after the expiry of the 619 Patent in each of Court files T-8-12, T-280-12 and
T-1708-12, but dismissed all applications in respect of the 059 Patent. As a
result, the Minister of Health could issue NOCs to Teva as early as July 25,
2017, the date of expiry of the 619 Patent.
[8]
Notwithstanding this decision, Teva continued to
prosecute its impeachment action in Court file T-1529-12 in respect of both
patents. The trial was set to begin on March 2, 2015. Discoveries were completed
and expert reports were exchanged in 2014. On December 17, 2014, less than
three months prior to the expected start of the trial, Teva served and filed a
notice of discontinuance of the action in T-1529-12, but in relation to the 059
Patent only. The pleadings themselves were not amended.
[9]
Due to the unforeseen and serious illness of one
of Teva’s main expert witnesses in mid-February 2015, the trial, initially
scheduled to begin on March 2, 2015, had to be adjourned. It is now scheduled
to take place beginning on November 28, 2016.
[10]
On November 9, 2015, Gilead instituted the
present action, seeking a declaration that Teva has in the past and will in the
future infringe the 059 Patent. Teva immediately demanded particulars in
respect, inter alia, of the allegations of past and current
infringement, as well as the allegations that Teva intends to come to market
with products containing TDF as early as July 25, 2017. In response,
Gilead declined to provide further particulars of the circumstances of the
past, current or future infringement, prompting Teva to bring the present
motion to strike.
[11]
Gilead has, in parallel, also filed a motion to
consolidate this action with the action in T-1529-12 so that they be heard
together in November 2016. That motion is scheduled to be heard shortly by the
Judge designated to preside over the trial in Court file T-1529-12, if Gilead’s
action survives this motion to strike.
III.
Gilead’s motion to be relieved of the implied
undertaking rule
[12]
As mentioned above, Gilead has in this matter
made a general allegation to the effect that Teva intends to and will import,
make, use and sell in Canada products containing TDF prior to the expiry of the
059 Patent, and as early as July 25, 2017. Teva, by its motion to strike, has
put Gilead to the task of pleading the specific material facts upon which this
allegation is based or see its statement of claim struck. Gilead wishes to use
a portion of the discovery transcript constituted in the T-1529-12 impeachment
action to meet that challenge.
[13]
Teva specifically alleges in the T-1529-12
impeachment action that it is an interested person because it wishes to import,
make, use and sell in Canada TDF or products containing TDF and because it must
“either successfully impeach the relevant claims and/or succeed in an
application under the PM (NOC) Regulations in order to sell the Teva
Products prior to the expiry of the 619 Patent and the 059 Patent”. The
discoveries in that action were conducted at a time where the 059 Patent was
still very much at issue. The examination on discovery addressed Teva’s
intentions, as well as what it had done to act on those intentions, including
the approvability status of its submissions for NOCs with the Minister of
Health.
[14]
The implied undertaking of confidentiality prevents
the use of information obtained in discovery from being used other than in the
litigation in which it was disclosed. The rationale behind the rule is twofold.
First, the rule exists to protect the privacy interests of the persons being
examined in the face of compulsory discovery, achieving a balance between the
public interest in getting at the truth in a civil action and the preservation
of the rights of the “reluctant participants” in litigation, by ensuring that
the invasion of privacy is limited to satisfying the sole purpose of that
litigation. Second, the rule encourages parties to provide a more complete and
candid discovery, again, furthering the interest of justice by giving them some
assurance that the documents and answers will not be used for a purpose
collateral or ulterior to the proceedings (Juman v Doucette, 2008 SCC 8,
at paras 23 to 26; Sanofi-Aventis Canada Inc. et al v Apotex Inc. 2008
FC 320, at paras 16 and 17). The rule is not however absolute and the Court
retains the power to relieve persons of the obligation where it is in the
interest of justice to do so.
[15]
The Supreme Court decision in Juman v
Doucette, above, establishes at paragraph 32 that an application for relief
“requires an applicant to demonstrate to the court on
the balance of probabilities the existence of a public interest of greater
weight than the values the implied undertaking rule is designed to protect”.
Teva argues that this statement sets a higher standard than that which had been
previously applied by the courts. I cannot agree with this interpretation. In
the discussion that follows paragraph 32, the Supreme Court explicitly
recognizes existing provincial rules of practice as aptly codifying the common
law on the issue and goes on to cite some case law which it considers provides
useful guidance to the exercise of the court’s discretion. At paragraph 38, the
Supreme Court expressly states that the categories of superior public interests
it discusses are not meant to be fixed.
[16]
One of the categories of superior public
interests recognized by the Supreme Court in Juman is where the deponent
has given contradictory testimony about the same matters in successive or
different proceedings. The Supreme Court reasons that “[a]n undertaking implied
by the Court (or imposed by the legislature) to make civil litigation more
effective should not permit the witness to play games with the administration
of justice […] Any other outcome would allow a person accused of an offense
[w]ith impunity [to] taylor his evidence to suit his needs in each particular
proceeding”. Gilead essentially argues that the same superior public interest
is at play here, but involving the litigation positions taken by Teva as a
party, rather than the testimony given by an individual witness or accused. I
agree.
[17]
Where it suited its purpose, as plaintiff in the
T-1529-12 impeachment action, Teva publicly described itself as an interested
party on the basis of express allegations of an intent to come to market with
products containing TDF prior to the expiry of the subject patents. It is fair
to say that any facts that may have been disclosed on discovery by Teva to
flesh out or support these allegations were proffered to advance Teva’s own
interests in that litigation. Now that it is sued by at least one of the same
parties on the basis of that very same stated intention, with full knowledge of
the facts and testimony it has previously given to support those allegations,
Teva takes the position that Gilead “cannot meet the requirements for a quia
timet action”, “have no basis upon which to allege that Teva will launch
TDF products”, “are only speculating that Teva will launch or intends to launch
TDF products”, “have no knowledge as to whether Teva will or will even be
capable to carry out the alleged activities” and “have no material facts
showing that Teva intends to and can in fact launch infringing product if and
when it receives regulatory approval”. According to Gilead, the position taken
by Teva can only be sustained by reliance on the implied undertaking rule: Had
the evidence Teva gave on discovery been adduced at trial or not been protected
by the implied undertaking rule, it would show ample basis, in the form of
admissions by Teva, to conclude that it can and will launch TDF products prior
to the expiration of the 059 Patent. In the circumstances, the implied
undertaking would permit Teva to play games with the administration of justice
and to tailor its litigation position to suit its needs in each particular
proceeding.
[18]
The circumstances here are quite different from
those in Juman, Carbone v De La Rocha, [1993] OJ No 1113 or Goodman
v Rossi [1995] OJ No 1906. In those cases, the discovery evidence sought to
be used against the disclosing witness was reluctantly provided, and revealed
facts that would never have come to the knowledge of the requesting party
outside the context of discovery and the compulsion or encouragement to full
and frank disclosure the implied undertaking rule seeks to promote. Here, the
discovery evidence went to support a factual allegation voluntarily and
publicly made by Teva for its own interest. The information was not of a nature
to hurt Teva’s case or support Gilead’s defence; as such, had Teva refused to
answer discovery questions pertaining to its status as an interested person,
the sanction would likely have been, not compulsion or the striking of its
pleadings, but the inability to introduce trial evidence establishing that
information without leave of the court, pursuant to rule 248. Indeed, in
preparation for the trial, Teva formally requested that Gilead admit its status
as an interested person and served on Gilead a “will say” statement to the
effect that a representative of Teva would testify that “Teva will come to
market immediately upon receipt of a Notice of Compliance from Health Canada
for the Teva Products.”
[19]
The discovery evidence at issue is the kind of
information which Teva would most likely have disclosed to Gilead even in the
absence of the implied undertaking rule, as it needed to do so to advance its
own case. Teva confirmed, in its will-say statement, its intention to adduce
evidence of that same nature at the trial. Upholding the implied undertaking
rule in the circumstances would merely permit Teva to delay the public
disclosure of information it has continuously intended to use at trial, and by
doing so, delay Gilead’s ability to use it. Teva is using the implied
undertaking rule to play games with the administration of justice, by asserting
in one proceeding that it will lead evidence at trial of its intent to market
TDF products in Canada prior to the expiration of the 619 and 059 patents,
while at the same time alleging that there exists no factual basis to support
that same allegation when made by Gilead. I find that the public interest in
preventing the use of the implied undertaking rule for this purpose must, in
this case, be given greater weight than the values the implied undertaking rule
is designed to protect, in part because in giving the discovery evidence at
issue, it is clear that Teva was not a “reluctant litigant” giving evidence by
compulsion or out of a duty to give complete and candid discovery, and not in
need of the protection offered by the implied undertaking.
[20]
I further note that the Supreme Court in Juman
recognized at paragraph 35 that “where discovery material in one action is
sought to be used in another action with the same or similar parties and the
same or similar issues, the prejudice to the examinee is virtually nonexistent
and leave will generally be granted”. While the present action includes
additional parties, such as Gilead affiliates and Bristol-Myers Squibb, these
additional plaintiffs claim under the patentee pursuant to section 55 of the Patent
Act, RCS 1985, c P-4 and are therefore “similar parties”. And while the
present action is for patent infringement rather than impeachment, and
therefore based on different causes of action, these causes of action are
clearly related. More importantly, the narrow issue of whether Teva intends to
and will come to market prior to the expiration of the 619 and/or 059 Patents
is not just similar, it is the same. Teva cannot claim that they are distinct
merely because the current action concerns only the 059 Patent while the
T-1529-12 action no longer concern that Patent: At the time discovery was
given, the 059 Patent was directly at issue.
IV.
Teva’s motion to strike
[21]
Gilead’s statement of claim, as currently
written, only alleges past or current infringement in the vaguest and broadest
of terms: “Teva has since prior to November 3, 2011
imported and/or manufactured pharmaceutical compositions including acceptable
excipients comprising TDF (…)”, “Teva
manufactures TDF, or causes TDF to be manufactured (…)”. As mentioned
earlier, Teva promptly sought but was refused particulars of the facts upon
which Gilead relies to support these allegations. The case law is clear that an
infringement action that fails to set out sufficient material facts by which a
defendant is alleged to have infringed a patent and relies solely on bald
conclusions of infringement or on the mere fact that a defendant pharmaceutical
company has sought regulatory approval to market a medicine constitutes an
abuse of process and should be struck (Apotex Inc. et al v Allergan Inc. et
al, 2011 FCA 134; Astrazeneca Canada Inc. v Novopharm Ltd., 2010 FCA
112).
[22]
As currently framed, it is plain and obvious
that Gilead’s allegations of past or current infringement must be struck. The
question then becomes whether the amendments proposed by Gilead to cure this
defect should be allowed.
[23]
The proposed amendments are of two kinds. The
first relies on Teva’s stated intention to enter the Canadian market as soon as
it obtains an NOC to conclude that Teva must have “necessarily stockpiled
sufficient quantities of finished product”. The second relies on the discovery
evidence in Court file T-1529-12, said to contain admissions of infringing
activities. I agree with Teva that the proposed new allegations of the first
kind are entirely speculative. Even assuming that it is reasonable to infer
from Teva’s stated intent that Teva has available to it sufficient quantities
of finished product, there is simply no reasonable basis, either in the
proposed amended pleadings or in the discovery transcript, to infer that Teva
has actually, in Canada, either made or stockpiled commercial quantities of
infringing product. In similar circumstances, in Teva Canada Limited v
Novartis AG, (Federal Court file T-2021-10, August 12, 2011, now reported
at 2016 FC 18) I held that “[a]availability is not
synonymous with actual possession; taken in context, the word “available”
connotes more readily that the product can be obtained than that it is in
actual possession. This is to be contrasted with the facts that were alleged in
the case of Allergan Inc. et al v Apotex Inc. et al unreported, Federal
Court file T-1267-10, November 9, 2010, affirmed at 2011 FCA 134, where it was
specifically alleged that Apotex had indicated in its filing with the US FDA
that it had made and used the product in Canada and that Apotex had
been issued a tentative approval to manufacture the product in Canada.”
The present case is indistinguishable. The proposed amendments amount to no
more than bald speculation and ought not to be allowed.
[24]
With respect to Gilead’s request to amend to
plead alleged admissions of infringement made by Teva in the course of
discovery in T-1529-12, I am satisfied that the proposed amendments
mischaracterize the discovery evidence and that it would accordingly not be in
the interest of justice to allow them to salvage Gilead’s claim for past or
current infringement. A fair reading of the discovery transcript shows that
Teva has not admitted to any activity beyond the regulatory requirements for
the preparation and filing of its ANDS, which are specifically exempted by
section 55.2 of the Patent Act. It was held in Eli Lilly Canada Inc.
et al v Nu-Pharm Inc., 2011 FC 255 that allegations of such conduct are not
sufficient to validly sustain an action for past or current infringement.
[25]
I now turn to Gilead’s allegations of future
infringement. The case law generally recognizes and applies the following
criteria for validly initiating a quia timet proceeding alleging patent
infringement, as set out in Connaught Laboratories Limited v SmithKline
Beecham Pharma Inc. [1998] FCJ No 1851: “the
statement of claim must allege a deliberate expressed intention to engage in
activity the result of which would raise a strong possibility of infringement;
the activity to be engaged in must be alleged to be imminent and the resulting damage
to the plaintiff must be alleged to be very substantial if not irreparable;
and, finally, the facts pleaded must be cogent, precise and material. It is not
sufficient that they be indefinite or speak only of intention or amount to mere
speculation.”
[26]
In its current form, Gilead’s statement of claim
relies on the allegations made by Teva in T-1529-12 of an expressed intention to
market TDF products prior to the expiry of the 059 and 619 Patents, and on the
procedural circumstances unique to this matter, including Teva’s institution of
an impeachment action whilst prohibition proceedings were ongoing, the results
of the prohibition proceedings pursuant to which Teva may receive an NOC as
early the expiry of the 619 Patent, or earlier if it is successful on the
impeachment action, and Teva’s decision to discontinue the impeachment action
in respect of the 059 Patent and pursue it in respect of the 619 Patent,
notwithstanding the results of the prohibition proceedings. The statement of
claim, as it currently stands, is however silent as to Teva’s ability to carry
out its professed intention, including with respect to the approvability status
of its ANDS. This fact situation is very similar to that which existed in Teva
Canada Limited v Novartis AG, above: Teva had, in an impeachment action,
stated that it was an interested party because it intended to market imatinib
tablets in Canada and that in order to do so prior to the expiry of the subject
patent, it had to either successfully impeach the relevant claims of the patent
or succeed in an application under the PM (NOC) Regulations, both of
which it was endeavoring to do at a time where the patent only had a few years
left to run before expiration. As in the present case, the statement of claim
for the quia timet claim did not contain allegations as to the
approvability status of Teva’s imatinib product. I held in that case that while
Novartis had met the expressed intention criterion, it had failed to meet the
temporal aspect of the criteria:
(…) Although Teva
argued that the exact timing of Teva coming to market remained subject to a
corporate decision being taken, the allegations of an expressed intent, of an
ability to begin possibly infringing activities, combined with the recent
conduct of Teva, convey a sense of purpose and urgency speaking to much more
than a mere possibility. In the circumstances, the allegations of the
Counterclaim are more than sufficient to meet that criterion. Indeed, it seems
that these allegations of expressed intent were precisely those that were found
missing in Connaught Laboratories.
It is on the last criteria on of the
Connaught Laboratories test that Novartis’ allegations fail. Novartis does
not allege that Teva’s application for an NOC has been approved and/or is on
“patent hold” awaiting simply the resolution of the prohibition proceedings or
the expiration of the patent. Teva therefore argues that the alleged imminence
of the infringement is speculative, as it is contingent upon it obtaining an
NOC from Health Canada.
That specific argument was found to be
determining in Pfizer Research and Development Co. N.V./S. A. v. Lilly ICOS
LLC, (2003) 20 7C. P. R. (4th) 86:
“The Plaintiffs have not demonstrated
the temporal aspect of the criteria for commencing a quia timet action. Neither
party has control over when, or if, the government will issue regulatory
approval for its product. In my opinion, the Plaintiffs have not pleaded facts
to support its allegation that the Defendants’ allegedly infringing activities
are imminent. This motion for an order striking out the Amended Statement of
Claim in its entirety is granted as the Plaintiffs have failed to properly
plead a quia timet action; it is plain and obvious that the pleading
discloses no reasonable cause of action.”
This decision was further cited and applied
in Astrazeneca Canada Inc. v. Novopharm Limited, supra. I am bound to
follow these precedents.
[27]
I find that, even without the amendments
proposed by Gilead, the statement of claim does, through cogent, precise and material
facts, allege a deliberate expressed intention to engage in activity that would
raise a strong possibility of infringement. However, without the proposed
amendments, Gilead’s statement of claim suffers from the same fatal defect as
Novartis’ did: Absent allegations to the effect that Teva’s application for an
NOC is approvable and that an NOC will issue as soon as the 619 Patent
expires or is declared invalid, the statement of claim lacks sufficient
material facts to show that the infringement is imminent; the infringement
remains speculative, contingent upon whether and when Health Canada might
approve the submissions for an NOC.
[28]
As mentioned, the status of Teva’s ANDS was the
subject of discoveries in T-1529-12, and Gilead, having now been relieved of
the implied undertaking rule, proposes to amend its statement of claim to plead
material facts going to that issue. I am satisfied that the discovery evidence,
and the amendments proposed, are sufficiently cogent, precise and material to
satisfy the criterion of imminence, and that Gilead should be allowed to make
the proposed amendments.
[29]
As an alternative argument, in the event it were
not relieved of the implied undertaking rule, Gilead argued at the hearing that
the following factual circumstances permit a reasonable inference that Teva’s
submissions are approvable: Under the PM (NOC) Regulations, Teva was
required to have filed its ANDS prior to or concurrently with the service of
its Notices of Allegation, such that the ANDS would have been submitted at the
latest in 2012; the PM (NOC) Regulations’ timeframes contemplate that a
decision as to approvability will usually be made within two years, such that
Teva would necessarily now know if its submissions have been approved; given
that Teva continues to pursue its impeachment action and to maintain that it
intends to come to market as soon as the 619 Patent expires or is declared
invalid, Teva must necessarily have been advised that its ANDS is approvable
and on patent hold. I agree that those circumstances together, while not
conclusive of the issue, would form a sufficiently cogent, precise and material
set of facts from which one could reasonably infer and conclude that at least
one of Teva’s ANDS is on patent hold, awaiting simply the expiration of the 619
Patent or its impeachment. Even if I had been wrong in allowing Gilead to rely
on the discovery evidence to amend its pleadings, I would have permitted it to
amend to raise the circumstances discussed above as material facts showing that
Teva will come to market with TDF products at least as early as July 2017.
[30]
Although a case so framed would be
circumstantial and may be open to challenge, Gilead, at this stage, is not
required to do more than plead a reasonably arguable case. Care must be taken
that motions to strike for failure to plead material facts not be turned into a
show cause hearing where a plaintiff is required to prove its case, especially
where, as here, the moving party is not relying on any evidence of its own.
[31]
Finally, I am satisfied that the probability
that infringement will occur in July 2017 is sufficiently imminent to justify a
quia timet action. The purpose of a quia timet action is to stop
an event before it happens. Given that streamlined infringement actions may
now be heard and determined in two years, it is neither premature nor pointless
to institute such an action 22 months before the occurrence of the event
to be avoided. To ask that a plaintiff wait until the event is so imminent
that there is not enough time to reasonably bring the proceeding to conclusion
would be to doom such actions to failure to achieve their goal or to impose
unreasonably tight schedules on the parties and the Court.
[32]
The only criterion left to be considered is that
of “substantial, if not irreparable harm”. Clearly, while allegations of
irreparable harm would satisfy that criterion, irreparable harm is not a
requirement and allegations of substantial harm will be sufficient. The case
law does not offer further guidance as to what harm would be substantial enough
to justify a quia timet claim.
[33]
The statement of claim currently only alleges
that Gilead will be deprived of the statutory exclusivity to its invention,
that it will suffer damages in excess of $50,000 and that Teva will make a
profit.
[34]
Any proven act of infringement constitutes a
deprivation of the patent holder’s exclusivity rights. Given that the Court in Connaught
Laboratories expressly included harm as a necessary requirement for a quia
timet claim of patent infringement, it is clear that it did not contemplate
the deprivation of exclusivity rights as constituting, of itself, either
irreparable or substantial harm. And while a patentee may choose to claim
profits made by the infringer, the profits of an infringer do not necessarily constitute
harm to the patentee, whatever their magnitude. Thus, the only allegation of
harm left in Gilead’s statement of claim is that it will suffer damages in
excess of $50,000 (a figure which likely is not intended as indicative of the
magnitude of the damages, but that the action should not proceed as a
simplified proceeding). The allegation is, obviously, not precise or cogent
enough to meet the requirements set out in Connaught. The amendments
proposed by Gilead do not include any further particulars as to the magnitude
of the expected loss. While Teva has generally asked for particulars of
paragraph 49 of the original statement of claim (which sets out the
consequences that would result from the intended infringement by their nature),
it has asked no particulars of paragraph 51 (which confirms that expected
damages will exceed $50,000). Given the substantial costs involved in
prosecuting such complex actions, I expect that, given an opportunity to
provide a better particularized estimate of the damages Gilead expects to
suffer should Teva infringe the 059 Patent, the figure would be far in excess
of $50,000. I am satisfied that Gilead should be afforded an opportunity to
amend its statement of claim to particularize the monetary loss it might suffer
from the alleged further infringement, with leave to Teva to argue that the
particularized amount remains insufficient to meet the criterion of
“substantial, if not irreparable” harm.
V.
Costs
[35]
Gilead has been successful on its motion to be
relieved of the implied undertaking rule, and should have its costs of that
motion. On Teva’s motion to strike, success being divided, there shall be no
costs.
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