Docket: T-1056-16
Citation:
2017 FC 831
Ottawa, Ontario, September 14, 2017
PRESENT: Case Management Judge 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]
This motion arises in the context of an action
brought by Apotex Inc. against Shire LLC and Shire Pharma Canada ULC for a
declaration of non-infringement and of invalidity of Canadian Patent No.
2,027,646, entitled “Abuse Resistant Amphetamine Compounds”.
[2]
The trial is scheduled to take place in seven
months, and discoveries are complete, except for refusals motion arising from
the second round of discoveries.
[3]
Apotex’s original statement of claim contained
extensive allegations of inutility of the patent, premised on the alleged
failure of the inventors to have demonstrated or soundly predicted the promises
set out in the patent. On June 30, 2017, the Supreme Court of Canada declared,
in AstraZeneca Canada Inc. v Apotex Inc., 2017 SCC 36, that the Promise
Doctrine is not sound in law and is not the correct method of determining the
utility of an invention.
[4]
Apotex now moves to amend its statement of claim
in light of that decision. Shire, by cross-motion, asserts that the amendments
proposed do not cure the defects of Apotex’s pleadings, as exposed by the
Supreme Court’s decision, and that all allegations related to Apotex’s plea of
inutility ought to be struck.
[5]
With the exception of trivial observations that
the activity of amphetamines in rats and dogs are “laboratory curiosities”, of
a sildenafil-type plea of insufficient disclosure and of a plea of willful
misrepresentations, the amendments proposed by Apotex do not introduce new
facts. They merely “recast” the same factual allegations that formed the basis
of Apotex’s inutility plea in a form that Apotex suggests accords with the
state of the law as pronounced by the Supreme Court in AstraZeneca.
[6]
To say that Apotex’s proposed amendments are
poorly drafted is an understatement. The amendments are slipshod, inconsistent
and confusing. Although Apotex portrays its amendments as being made in
accordance with the Supreme Court’s teachings on the correct approach to
utility, they reflect, in my view, an obtuse application of selected passages
of the Supreme Court’s decision, a refusal to come to terms with and embrace
the essence of the Supreme Court’s teachings, and a fairly desperate attempt to
shoehorn Apotex’s promise allegations into each and every ground of invalidity
known to law. The resulting pleading remains haunted by the ghost of the now
defunct promise doctrine and is neither particularly helpful nor illuminating.
[7]
That, however, is not a reason to disallow the
amendments that purport to “recast” Apotex’s existing allegations of fact, or
to strike the portions of Apotex’s original pleadings related to the plea of
inutility.
[8]
With the exception of amendments introducing new
allegations of fact, which I will discuss below, Apotex’s proposed amendments
are in the nature of statements or conclusions of law. They are an exercise in
affixing labels to groups of facts. The jurisprudence is clear that neither the
labels, nor the facts to which labels are affixed, should be struck out simply
because the wrong label was chosen (Paradis Honey Ltd. v Canada (Attorney
General), 2015 FCA 89, at paras 113 - 114, and all cases cited therein).
The Court will not strike a particular characterization of a cause of action if
allegations of material facts, construed generously, give rise to any
reasonably arguable cause of action. A party is not bound by the legal
characterization it has used in its pleading and can present in argument at
trial any legal consequence of which the facts present.
[9]
Here, the essence of the facts to which the
proposed amendments relate, and which I must take as proven for the purpose of
this motion, is as follows: There is not a single relevant and practical use or
utility for the subject-matter of the invention that does not include a reduced
potential for abuse; that reduced potential for abuse does not in fact exist,
and was neither demonstrated nor soundly predicted as of the filing date.
[10]
Shire makes a compelling case that Apotex’s
allegation that the invention can have no possible utility that does not
include reduced potential for abuse is not very likely to succeed, given that
only a small proportion of the 51 claims of the patent even allude to
abuse-reducing characteristics. However, for the following reasons, I find that
the allegations are not devoid of any possibility of success.
[11]
Apotex’s statement of claim also includes
allegations of obviousness and anticipation in respect of the claims to the
compounds and their therapeutic uses. The possibility thus exists that only
those claims that include elements of abuse reduction might be found to be
inventive. To the extent the Court were to find that only those claims
containing an element of abuse-resistance are inventive, the allegations to the
effect that the compounds do not have the claimed benefit could arguably
support a plea of overclaiming, or even insufficient disclosure or inutility.
[12]
I therefore conclude that the factual
allegations of the statement of claim relating to inutility should not be
struck as disclosing no reasonable cause of action. As Apotex’s proposed
amendments to “recast” those facts, despite their numerous flaws, do not raise
any new facts, I am not satisfied that allowing them would cause any additional
delay in the conduct and determination of this action, or cause prejudice to
Shire that cannot be compensated in costs.
[13]
I now turn to those proposed amendments that do
allege new facts.
[14]
Paragraphs 23, 85 and 87 add an allegation that
“the activity of amphetamines in rats and dogs are laboratory curiosities whose
only possible claim to utility are as starting material for further research”.
As mentioned, this seems a rather trivial allegation that parrots a selected
passage of the AstraZeneca decision. Neither party has suggested that
discoveries would need to be reopened to explore these allegations and I am not
persuaded that they would cause prejudice to Shire.
[15]
Paragraphs 116(C) to (G) allege new facts in
support of a Sildenafil-type plea of insufficient disclosure. The same facts
are “recast” in paragraph 129D as a plea of overbreadth. Although not mentioned
in its written record, Apotex’s counsel advised at the hearing that the
underlying facts arose from the discovery of Shire and would not require
further discovery. Shire did not pursue its objection to the amendments in its
oral argument. I am not satisfied that these allegations do not disclose an
arguable cause of action, nor that their addition would cause Shire prejudice
that cannot be compensated in costs.
[16]
Paragraphs 21A(e) and 129E to 129J recycle the
factual allegations related to inutility and the Sildenafil-type plea, but add
bare allegations that the unproven or unsubstantiated uses set out in the
disclosure constitute material allegations, that “the applicant” for the patent
knew the statements to be untrue and made them willfully for the purpose of
misleading, rendering the patent and all its claims void pursuant to section 53
of the Patent Act. As drafted, the proposed amendments are a bare
pleading that “the applicant was aware” that the inventors had not demonstrated
or had no sound basis to predict a particular utility, as pleaded elsewhere. On
the basis of those facts alone, the proposed amendments state the bare
conclusion that the application contains a material allegation which is untrue
and was made by “the applicant” willfully for the purpose of misleading. “The Applicant”
is not specifically identified, and counsel for Apotex could not even, at the
hearing, state its identity. Shire’s counsel advised that it was a corporation
who is not a party in this action.
[17]
As mentioned in my reasons for order dated
November 14, 2016 in this same action (reported at 2016 FC 1267), section
53 allegations are essentially allegations of fraud and state of mind, which
require, pursuant to Rule 181 of the Federal Courts Rules, full
particulars. The pleadings now proposed contain no particulars of exactly who
made what statements to the patent office, or of any 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. Pleadings of fraud are a serious
matter. Parties should not make them recklessly and without sufficient evidence
or a reasonable belief as to their truthfulness. Especially after discovery has
been had, Apotex should have been able to set out the particular facts upon
which a Court might find any particular state of mind or knowledge in any
particular persons at any particular time. Apotex’s failure to do so,
especially in light of the admonishment contained in the order of November 14,
2016, leads me to infer that it has no reasonable basis to advance these
allegations, and that it is not in the interest of justice that they be
permitted.
[18]
Shire opposed all of the amendments but was only
partially successful. It shall have its costs of the motion, but in the amount
of $2,000.00 only. It should also be entitled to claim the costs of any
amendment to its pleadings necessitated by the extensive, but poorly drafted
amendments.
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