Merck & Co. Inc. v. Apotex Inc., 2002 FCT 509

Date: 20020502

Docket: T-2792-96

Neutral citation: 2002 FCT 509

BETWEEN:

                                                               MERCK & CO., INC.

                                                  MERCK FROSST CANADA & CO.

                                                                 ZENECA LIMITED

                                                    ASTRAZENECA UK LIMITED et

                                                    ASTRAZENECA CANADA INC.

                                                                                                                                                        Plaintiffs

                                                                                                                  (Defendants by Counterclaim)

                                                                                 and

                                                                       APOTEX INC.

                                                                                                                                                      Defendant

                                                                                                                         (Plaintiff by Counterclaim)

                                                            REASONS FOR ORDER

RICHARD MORNEAU, ESQ., PROTHONOTARY:

[1]                 This is a motion by the Defendant Apotex Inc. (Apotex) under Rule 75 of the Federal Court Rules, 1998 (the Rules) for an order permitting said party to serve and file a proposed Fresh as Amended Statement of Defence and Counterclaim (the proposed Defence) and related particulars.

Background

[2]                 The Statement of Claim in this proceeding seeks various forms of relief in respect of the alleged infringement by Apotex of the '350 Patent.

[3]                 The '350 Patent contains claims, inter alia, for a class of compounds which includes the compound known as lisinopril, and claims for pharmaceutical compositions made using that class of compounds, including lisinopril.

[4]                 By Statement of Defence and Counterclaim dated July 31, 1997, and amended November 17, 2000, Apotex defended the action, inter alia, on the basis that its making, using and selling of lisinopril was non-infringing or was exempt from infringement and that the '350 Patent was invalid on various grounds. Apotex also commenced a counterclaim for commensurate declaratory relief.

Applicable Principles

[5]                 In regard to the applicable principles for amending pleadings, the following passage from Minister of National Revenue v. Canderel Ltd., [1994] 1 F.C. 3; 157 N.R. 380 (F.C.A.), at page 10, accurately reflects the generous approach the Court should take in such matters:

... while it is impossible to enumerate all the factors that a judge must take into consideration in determining whether it is just, in a given case, to authorize an amendment, the general rule is that an amendment should be allowed at any stage of an action for the purpose of determining the real questions in controversy between the parties, provided, notably, that the allowance would not result in an injustice to the other party not capable of being compensated by an award of costs and that it would serve the interests of justice.

[6]                 In the case of Visx v. Nidek, [1998] F.C.J. No. 1766, the Federal Court of Appeal has made use of the following comments taken from a case dating back to 1886:

The rule of conduct of the Court in such a case is that, however negligent or careless may have been the first omission, and however late the proposed amendment, the amendment should be allowed, if it can be made without prejudice to the other side. There is no injustice if the other side can be compensated by costs; but, if the amendment will put them into such a position that they must be injured, it ought not to be made.

[7]                 It might be added, as an aside, that, as in the case of an application to strike out a pleading, an amendment should be allowed unless the amendment is clearly and obviously doomed (see Cardinal et al. v. Canada (1993), 164 N.R. 301 (F.C.A.) (Heald, Décary and Linden, JJ.A.)).

Analysis

[8]                 In the within motion, three categories of amendments are still opposed by the Plaintiffs.

[9]                 The first category of amendments concerns the chemical compound known as lisinopril dihydrate. The second category relates to alleged improper divisional applications. Finally, the third category concerns allegations relating to stability.

First Category: Lisinopril Dihydrate

[10]            With regard to this first category of amendments, I am satisfied based on the allegation found in Ivor M. Hughes' affidavit sworn April 16, 2002 (Hughes' affidavit) that one can argue that the documentary productions and examinations for discovery which took place recently have helped to uncover the allegation that lisinopril dihydrate is not included within the scope of the '350 Patent and that the marketed version of Apotex's drug (as well as Merck's) actually contains only the compound lisinopril dihydrate. Based on Hughes' affidavit, it would appear that said compound would be entirely different from the lisinopril covered by the '350 Patent, having a different chemical structure, molecular weight and characteristics.

[11]            Therefore, Apotex's proposed amendments under this category arguably disclose a reasonable defence to the Plaintiffs' allegation of infringement.

[12]            The fact that these amendments might be construed as a withdrawal of an admission on the part of Apotex does not change the outcome since as established in Andersen Consulting v. Canada, [1998] 1 F.C. 605, the same test and general principles applicable to ordinary amendments will apply to the present situation.

[13]            In addition, as indicated earlier, I am satisfied that the alleged distinction between lisinopril under the '350 Patent and lisinopril dihydrate became apparent further to the discoveries. As such, the impugned amendments cannot be considered late.

[14]            Consequently, based on the applicable principles, the amendments in this category shall be permitted.

Second Category: Improper Divisional Applications

[15]            In this second category, Apotex wishes to expand upon its existing allegation that Canadian Application Serial No. 607,198 (from which the '350 Patent issued) is not a proper Divisional Application of Patent Application No. 341,340 within the meaning of subsection 36(2) of the Patent Act because the invention claimed in Application 607,198 was, and has always been, the same invention as disclosed in Application 341,340.

[16]            In paragraphs 19(a), (a.1) and (a.2) of the proposed Defence, Apotex wishes to sustain further its conclusion that application '198 is not a proper divisional application of the parent application '340.

[17]            In these paragraphs, Apotex essentially alleges that even prior to application '198 being made, other similar divisional applications had already been made for the invention covered by the '340 parent application. Therefore, the fact that application '198 came after these other divisional applications (namely applications 518,334; 518,335; 518,336 and 576,716) would be an additional ground to say that application '198 is not a proper divisional application of application '340.

[18]            Although Apotex has not cited any case law in support of its position, based on the approach in Canderel, supra, I cannot come to the conclusion at this juncture that it is clear and obvious that the proposed paragraphs 19(a), (a.1) and (a.2) are immaterial to the allegations that exist in the present Statement of Defence and Counterclaim.

[19]            As for the Plaintiffs' allegation that these new paragraphs fail to plead the key material fact that these further applications are "divisional" applications, I understand from the hearing held that Apotex recognizes that said applications are indeed "divisional applications". No further particulars are therefore needed in this regard.

[20]            Consequently, based on the applicable principles, the amendments in this category shall be permitted. However, as discussed in Court the first and second paragraphs on page 8 and the second and third paragraphs on page 9 of the proposed Defence shall be struck out for reason of redundancy.

Third Category:

[21]            In this category, only impugned paragraph 19(m)(v) is still opposed by the plaintiffs.

[22]            I am satisfied that the facts disclosed in proposed subparagraph 19(m)(v) came to light as a result of documentary disclosures and discoveries of the Plaintiffs. The proposed amendments essentially state that the patentee has failed to teach that lisinopril is unstable and so is susceptible to degradation and conversion into lisinopril monohydrate or lisinopril dihydrate, and that these compounds are themselves susceptible to further conversion. On this basis, Apotex's proposed amendment alleges that the patentee is again in breach of section 34 of the Patent Act.

[23]            Apotex's existing and proposed allegations in respect of section 34 of the Patent Act cannot be said to be forlorn, futile or "beyond doubt".

[24]            Consequently, based on the applicable principles, impugned paragraph 19(m)(v) shall be permitted.

[25]            However, this paragraph needs to be particularized and accordingly Apotex shall serve within fifteen (15) days of the date of the order accompanying these reasons the particulars requested by the Plaintiffs in paragraph 46 to 48 of their written representations filed in opposition to the motion at bar.

[26]            In summary, Apotex shall be entitled to serve and file within ten (10) days of the date of the order accompanying these reasons its proposed Fresh as Amended Statement of Defence and Counterclaim in the form set out in Schedule "A" attached to its notice of motion along with its proposed amended particulars provided the first and second paragraphs on page 8 and the second and third paragraphs on page 9 of said Defence are struck out for reason of redundancy.

[27]            In order to move this case forward and to avoid any unnecessary delays, Apotex shall not be entitled to further discovery with respect to any of the amendments introduced by said Defence.

[28]            For the purpose of answering Apotex's amendments, the Plaintiffs shall have the right to serve and file a Further Amended Reply and Defence to Counterclaim within fifteen (15) days of service of Apotex's Fresh as Amended Statement of Defence and Counterclaim.

[29]            As to costs of this motion, I am satisfied that they shall be in the cause.

Richard Morneau    

Prothonotary

Montreal, Quebec

May 2, 2002

                                                                 FEDERAL COURT OF CANADA

                                                                              TRIAL DIVISION

Date : 20020502

Docket : T-2792-96

BETWEEN:

MERCK & CO. INC.

MERCK FROSST CANADA & CO.

ZENECA LIMITED

ASTRAZENECA UK LIMITED and

ASTRAZENECA CANADA INC.

                                                                                                                                                                                  Plaintiffs

                                                                                                                                            (Defendants by Counterclaim)

and

APOTEX INC.

                                                                                                                                                                                Defendant

                                                                                                                                                   (Plaintiff by Counterclaim)

                                                            REASONS FOR ORDER AND ORDER

                                                                 FEDERAL COURT OF CANADA

                                                                              TRIAL DIVISION

                                                       COUNSEL AND SOLICITORS OF RECORD

DOCKET:

STYLE OF CAUSE:

T-2792-96

MERCK & CO. INC.

MERCK FROSST CANADA & CO.

ZENECA LIMITED

ASTRAZENECA UK LIMITED and

ASTRAZENECA CANADA INC.

                                                                             Plaintiffs

                                          (Defendants by Counterclaim)

and

APOTEX INC.

                                                                          Defendant

                                                (Plaintiff by Counterclaim)

PLACE OF HEARING:Montreal, Quebec

DATE OF HEARING:April 22, 2002

REASONS FOR ORDER OF RICHARD MORNEAU, ESQ., PROTHONOTARY

DATED:May 2, 2002

APPEARANCES:

SOLICITORS OF RECORD: