Docket: T-1056-16
Citation:
2016 FC 1267
Ottawa, Ontario, November 14, 2016
PRESENT: Madam Prothonotary Mireille Tabib
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BETWEEN:
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APOTEX INC.
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Plaintiff
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and
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SHIRE LLC AND
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SHIRE PHARMA
CANADA ULC
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Defendants
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ORDER AND REASONS
[1]
In the context of this patent impeachment
action, I am seized of a motion by the Defendants Shire LLC and Shire Pharma
Canada ULC (“Shire”) to strike portions of the Reply of Apotex Inc.
[2]
Paragraph 20 and the impugned portions of
paragraph 42 of the Reply purport to raise s 53 of the Patent Act, RSC
1985, c. P-4 as a new ground of invalidity. It is plain and obvious that they
fail to plead sufficient material facts to disclose a reasonable cause of
action.
[3]
Section 53 allegations are essentially
allegations of fraud and of a state of mind. As per Rule 181 of the Federal
Courts Rules, such allegations require full particulars. The pleadings fail
to identify exactly who made what statements to the Patent Office. They are
further bereft of particulars as to the factual basis upon which the Court
might be able to conclude that this person or persons knew, at the time, that
the statements were false or that these persons intended to mislead the Patent
Office by making the statements. The allegations of the Reply amount only to a
vague allegation that “Shire” made “assertions” as to the utility of the
invention, and that Shire now allegedly denies that these assertions amount to
utility. The allegations of the Reply, taken alone or in conjunction with those
of the Statement of Claim, are insufficient to be taken as implicitly pleading
that the person who made the “assertions” knew them to be false or misleading
at the time, especially given that Shire was not the original applicant for the
patent at issue. Implicit allegations of fraud are not, of course, proper
pleadings. However, where the material facts can be inferred from the pleadings
or the representations of the party on a motion to strike, the defective
pleading is amenable to being saved by ordering particulars or granting leave
to amend. That is not the case here.
[4]
The impugned portions of paragraphs 20 and 42
will be struck without leave to amend. If Apotex wishes to amend its pleadings
to raise a new ground of invalidity pursuant to s 53 of the Patent Act,
it will have to move to amend its Statement of Claim, not its Reply.
[5]
With respect to the impugned portion of
paragraph 48 of the Reply, the allegation Shire wishes to strike is purely a
statement of the legal conclusions to be drawn from the facts already pleaded
in the Statement of Claim. Apotex agreed and recognized at the hearing that the
two sentences at issue do not open the door for Apotex to rely on, or have
discovery with respect to, any fact that is not already specifically pleaded in
paragraphs 104 to 116 of its Statement of Claim as a basis for arguing
ambiguity of any or all claims of the Patent.
[6]
The parties may, but are not required to raise
points of law in their pleadings. Even if they do, neither the parties nor the
Court are bound by the legal result or legal label pleaded. The party is free
to argue and the Court is free to rule on any legal consequence supported by
the facts pleaded (Conahan v Cooperators, 2002 FCA 60 at para 15). For
this reason, it is a waste of the Court’s time to move to strike a legal
conclusion, especially where, as here, the presence of the allegation is
unlikely to have any consequence on the pleadings, the conduct of discoveries
or the length of trial. That portion of Shire’s motion will be dismissed.
[7]
Success on this motion is divided, but Shire at
the hearing sought costs on an elevated scale. The parties agreed that a
“normal” award of costs on this motion should be $1500 plus disbursements.
Shire asked for $3000 plus disbursements, relying on the decision of this Court
in Eli Lilly Canada Inc. v Apotex Inc., 2008 FC 142 at para 63, to the
effect that failure to follow through or to prove a s 53 type of fraud after
raising it should have serious consequences in costs. Apotex’s allegation of s
53 fraud has for the moment been nipped in the bud early by Shire’s motion, but
it did require a motion. Further, Apotex’s allegations of s 53 fraud were made
casually and thoughtlessly, as a throwaway line or an inchoate defence.
Allegations of a fraud, including pursuant to s 53 of the Patent Act are
serious; where a party chooses to raise them, they should do so seriously and
thoughtfully. Elevated costs are appropriate here, even though Shire was only
partially successful on this motion. The award is also a further warning to the
parties that the Court disapproves of procedural gamesmanship and will not hesitate
to sanction such behaviour by cost awards.
ORDER
THIS COURT ORDERS that:
1.
Shire’s motion is granted in part.
2.
Paragraphs 20 and the second and third sentences
of paragraph 42 are hereby struck, without leave to amend. If Apotex wishes to
raise section 53 of the Patent Act as a ground of invalidity of the patent at
issue, it must seek to do so by way of amendment to its Statement of Claim.
3.
Costs, in the amount of $2000 plus disbursements,
shall be payable by Apotex to Shire.
"Mireille Tabib"
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