GD Searle & Co. v. Merck & Co. Inc., 2002 FCT 540

Date: 20020509

Docket: T-277-00

                                                                                                  Neutral Citation: 2002 FCT 540

BETWEEN:

                              G.D. SEARLE & CO., MONSANTO CANADA INC.

                                                   and PFIZER CANADA INC.

Plaintiffs

- and -

                                                    MERCK & CO. INC., and

                                              MERCK FROSST CANADA INC.

Defendants

                                       REASONS FOR ORDER AND ORDER

HENEGHAN J.

INTRODUCTION

[1]                 G.D. Searle and Co., Monsanto Canada Inc. and Pfizer Canada Inc. (the "Plaintiffs") have commenced this action against Merck and Co. Inc. and Merck Frosst Canada Inc. (the "Defendants") alleging patent infringement. Specifically, the Plaintiffs claim that the sale by the Defendants of a pharmaceutical known as "VIOXX" infringes four claims of a patent owned by G.D. Searle and Co.

[2]                 The Plaintiffs now bring a motion pursuant to the Federal Court Rules, 1998, SOR/98-106, Rules 213 et seq (the "Rules"), for summary judgment against the Defendants and seek a declaration that the Defendants have infringed claim 42 of the Patent. Additionally, the Plaintiffs seek an order pursuant to Rules 106 and 107 for a segregated trial to allow the determination of the validity of claim 42, before proceeding to trial on the remaining claim.

[3]                 The Defendants are also seeking summary judgment, specifically an order dismissing the Plaintiffs' action and declaratory relief. The Defendants seek a declaration to the effect that they are permitted to manufacture, use and sell to others, for their use, the subject matter of a specified list of claims in the Plaintiffs' patent (the "Dedicated Claims"), together with a declaration that the Plaintiffs are estopped from asserting infringement of the other claims ("Asserted Claims") against the Defendants.

THE PARTIES

[4]                 G.D. Searle and Co. is a corporation organized and existing under the laws of the state of Delaware, United States of America. It is the patentee and owner of the Searle/Bertenshaw Patent, issued by the Canadian Patent Office on February 15, 2000, Patent Number 2,152,792 (the "Searle Patent"). This patent pertains to an invention entitled "NOVEL 3, 4-Diaryl Thiophenes and Analogs Thereof Having Use as Anti-inflammatory Agents".

[5]                 Monsanto Canada Inc. is a Canadian corporation organized and existing under the laws of Canada with a registered office in the province of Ontario. It is a licensee under the Searle Patent, and sometimes carries on business in the name and style of "Searle Canada".

[6]                 Pfizer Canada Inc. is also organized and existing under the laws of Canada, with its registered office in the province of Quebec. Likewise, it is a licensee under the Searle Patent.

[7]                 Merck and Co. Inc. ("Merck U.S.") is a corporation organized and existing under the laws of the State of New Jersey, United States of America. It is the ultimate parent corporation of Merck Frosst Canada Inc. ("Merck Canada"), a corporation organized and existing under the laws of Canada with its registered office in Quebec. Its activities in Canada include the marketing and sale of pharmaceuticals in Canada, under the direction and control of Merck U.S.

[8]                 Merck has been offering for sale, selling and distributing the drug Rofecoxib under the name VIOXX since November 9, 1999. Rofecoxib, the compound in issue in this action, is a furanone.

[9]                 The Plaintiffs market the drug Celecoxib in Canada under the brand name CELEBREX.

[10]            The Plaintiffs argue that Rofecoxib and Celecoxib are the only COX 2 selective inhibitors on the Canadian market and are accordingly competitive products. The Defendants argue that the drugs are different compounds.

[11]            VIOXX and CELEBREX both target the COX 2 enzyme. The enzyme COX 1 plays a role in protecting the stomach lining and regulating blood flow to the kidneys. The enzyme COX 2 mainly acts in modulating compounds causing pain and inflammation, such as in arthritis. Prior to the introduction of VIOXX and CELEBREX, nonsteroidal, anti-inflammatory drugs (NSAIDS) regulated pain by indiscriminately blocking both the COX 1 and COX 2 enzymes.

[12]            However, as the COX 1 enzyme helps maintain the stomach lining, stomach irritation and ulcers were common side effects following the use of NSAIDS. CELEBREX and VIOXX target only the COX 2 enzyme, thereby relieving pain and inflammation with less risk of gastrointestinal side effects.

THE PATENT OFFICE PROCEEDINGS

[13]            The application for the Searle Patent was filed in the Canadian Patent Office on January 14, 1994. It was co-pending with the Merck/Rofecoxib Patent application before the Canadian Patent Office.

[14]            The Plaintiffs claim priority from a U.S. Patent application filed January 15, 1993. At the time of that filing, the U.S. Patent application on its face neither disclosed nor claimed furanones including Rofecoxib. At the effective filing date, the application for the Searle Patent in Canada on its face neither disclosed nor claimed furanones including Rofecoxib.

[15]                         The Merck patent application was published on December 25, 1994, disclosing the chemical structure and utility of furanones, including Rofecoxib, to the public. The Merck Patent was effectively filed in the Canadian Patent Office on June 9, 1994 and claims priority from two U.S. patent applications filed June 24, 1993 and January 10, 1994. At their respective filing dates, these patent applications disclosed and claimed furanones. As well, at the effective filing date, the application for the Merck Patent disclosed and claimed furanones including Rofecoxib.

[16]            On September 24, 1998, Searle amended its application to introduce claims to furanones. Merck was aware of Searle's application and filed five written protests with the Patent Office objecting to the issue of the Searle Patent including the four claims at issue.

[17]            On March 18, 1999, the Examiner rejected the proposed furanone claims in the application filed by Searle on the basis that the Merck patent application had an earlier claim for furanones. On April 17, 1999, the Examiner allowed the application for the Merck patent.

[18]            On May 7, 1999, Searle brought an application for judicial review before this court seeking an order prohibiting the Commissioner of Patents from issuing the Merck Patent. The application was dismissed on July 15, 1999, with the court holding that Searle's application was improper and that its only recourse was to bring an application to impeach the Merck patent after issuing.

[19]            Searle also appealed the rejection of the Examiner to the Patent Appeal Board. On August 12, 1999, the Commissioner of Patents allowed the appeal in part, allowing Searle to have claims which the Plaintiffs allege cover furanones, including Rofecoxib.

[20]            The Merck Patent was issued on August 24, 1999.

[21]            On August 25, 1999, Searle filed a voluntary amendment of its application. The Examiner rejected the voluntary amendment and required Searle to submit the exact claims and the exact disclosures as they were presented to the Patent Appeal Board.

[22]            The Searle Patent was issued with 200 claims, including the claims presently in issue, on February 15, 2000.

THE PRESENT ACTION

[23]            The Plaintiffs issued their Statement of Claim on February 15, 2000, alleging infringement by the Defendants of the Searle Patent. Specifically, the Plaintiffs allege that the Defendants' product VIOXX, which includes Rofecoxib, infringes the Asserted Claims.

[24]            By the Defence and Counterclaim dated May 12, 2000, the Defendants deny infringement. In their counterclaim, they allege that 140 claims of the Searle Patent, including the Asserted Claims, are invalid.

[25]            By the first reply and Defence to Counterclaim dated July 14, 2000, the Plaintiffs undertook that they would not at any time assert claims other than the Asserted Claims against the Defendants. The Plaintiffs state that they would not address the Defendant's allegations of invalidity against the 140 claims of the Searle Patent, other than the Asserted Claims.

[26]            On September 18, 2000, Searle executed a formal Dedication to the Public of 136 of the 200 claims of its Patent. These claims represent all but the Asserted Claims of the 140 claims of the Searle Patent which the Defendants allege are invalid.

[27]            By an Amended Reply and Defence to Counterclaim dated September 21, 2000, the Plaintiffs undertook with the Defendants and this court that it will not now or hear after assert claims other than the Asserted Claims. The Plaintiffs refer to the Dedication and otherwise deny the Defendants' allegation of invalidity of the claims asserted in the Statement of Defence and Counterclaim.

[28]            In the Reply to Defence to Counterclaim dated September 29, 2000, the Defendants rely upon the Dedication and allege that as a result of it, the Plaintiffs are estopped from asserting the Asserted Claims against the Defendants. Notwithstanding the Dedication, the Defendants continue to challenge the validity of the Dedicated Claims but validity is not directly challenged in the present motion for summary judgment.

THE DEDICATED CLAIMS

[29]            The Dedication to the Public provides as follows:

                                             Dedication to the Public

Subject to the terms of this document, the patentee hereby dedicates to the public all rights that the patentee may hold in and to the invention defined in the following claims of this patent: 1, 5-11, 13-16, 18-36, 38-41, 52, 54, 58-64, 66-69, 71-95, 105-113, 117-123, 125-128, 130-153, 163-168, 172-174, 178, 182, 191, 193-197, 199 and 200.

The present dedication is made without any prejudice to the rights of the patent owner in or to its rights under all other claims of the patent which have not been dedicated to the public or, in any other patent or pending patent application other than the present patent.

The present dedication shall apply to all subsequent owners of the patent and to all persons who now or in the future may hold any rights under this patent.

[30]            Included in the Dedicated Claims are:

(a)        claims to a process to manufacture the compound rofecoxib;

(b)        claims to the compound rofecoxib;

(c)        claims to pharmaceutical compositions comprising rofecoxib together with a carrier; and

(d)        claims to the use of the compound rofecoxib for the treatment of an inflammatory disease.

[31]            The Defendants argue that each of the compounds defined in the Asserted Claims are also included in the Dedicated Claims, and that all of the pharmaceutical compositions and use of compounds defined in the Asserted Claims are included in the Dedicated Claims.

THE ASSERTED CLAIMS

[32]            Claims 37, 42, 53 and 198 have been asserted. The Defendants counterclaimed as to the validity of these claims and 136 other claims. The Plaintiffs have amended the order sought on this motion to include only claim 42 and have conceded that there are arguable issues for the other three claims. Claim 42 is a group of compounds defined by successively narrowing dependencies of earlier claims.

[33]            The Defendants assert that claim 42 claims a compound. Claim 95 claims a composition of claim 42 together with a carrier. Claim 153 claims the use of the compound of claim 42 for the treatment of inflammatory disease. The Plaintiffs have dedicated to the public all the subject matter of claim 95 and claim 153. Briefly, the Defendants argue that because claim 42 is related to the Dedicated Claims, the Dedication covers the non-dedicated claim 42.

THE EVIDENCE

[34]            The Defendants have filed Affidavits of Dr. Barry Trost, Edwin J. Gale and Jennifer Keown in support of its motion. Dr. Trost is a Chemist and Professor of Chemistry who argues that the Asserted Claims are within the Dedicated Claims and that at least some of the Dedicated Claims covered by us.

[35]            Mr. Edwin Gale is a Canadian Patent Agent and Chemist who deposed as to certain activities in the Patent Office relating to the Patent at issue.

[36]            Jennifer Keown is a law clerk whose affidavit speaks to the pleadings filed in the action.

[37]            The Plaintiffs, in support of its motion and in response to the motion filed by the Defendants, filed Affidavits from Mr. George Fisk and Dr. J. Peter Guthrie. Mr. Fisk is a Canadian lawyer, Chemist and Patent Agent who addresses the Gale Affidavit and deposes as to the Patent Office proceedings. Dr. Guthrie is a Chemist who replies to the Trost Affidavit and states that VIOXX infringes three of the four Asserted Claims.

[38]            The Defendants filed a second Affidavit of Dr. Trost, an Affidavit from Mr. Edward J. Murray and Mr. Guy Saab in response to the Plaintiffs' motion. The second Trost Affidavit replies to the Guthrie Affidavit and alleges that two of the three claims discussed in the Guthrie Affidavit, claims 53 and 198, cannot be construed by him so as to be infringed. Dr. Trost does not discuss claim 42.

[39]            Mr. Murray is an in-house lawyer with Merck who deposed that little benefit would be gained by staying a portion of the counterclaim.

[40]            Mr. Saab is a Merck executive involved with the filing of material respecting VIOXX with the Minister of Health. He provides a product monograph as to VIOXX filed with the Minister.

ISSUES

[41]            The Plaintiffs' motion raises the following issues:

            1.         Shall summary judgment issue declaring that the Defendants have infringed Claim 42 of the Patent?

            2.         Shall the Defendants' counterclaim in respect of claims other than the Asserted Claims be dismissed or at least stayed?

[42]            The Defendants' application raises the following issues:

1.         What is the effect of the Dedication to the Public?

            2.         Whether by reason of the dedication, the Plaintiffs are estopped from asserting infringement of the Asserted Claims.

PLAINTIFFS' SUBMISSIONS

[43]            The Plaintiffs seek the entry of summary judgment in relation to claim 42 of the Searle Patent and argue that, on the basis of the principles set forth in Granville Shipping Co. v. Pegasus Lines Limited S.A. et al, [1996] 2 F.C. 853 (T.D.), that such an order should issue.

[44]            The Plaintiffs say that the Defendants have failed to set out specific evidence showing that there is a genuine issue for trial. On the contrary, the Defendants' own witness, Mr. Gale, admits that VIOXX infringes claim 42. This admission is confirmed in the written submissions filed by the Defendant in response to the Plaintiffs' current motion.

[45]            The Plaintiffs submit that the only defence raised by the Defendants against the alleged infringement of claim 42 is the effect of the Dedication and the existence of the Merck Patent. The Plaintiffs reject the arguments of the Defendants to the effect that the Dedication, which specifically addresses 136 claims, "somehow" incorporates by reference the Asserted Claims, including claim 42.

[46]            The Plaintiffs argue that the Dedication to the Public was made in order to dispose of those specific claims since there was no other means available to do so. There is no provision in the Patent Act, R.S.C. 1985, c. P-4, as amended (the "Act") for a patentee to dispose of claims which it no longer wants. Although the Act allows a patentee to apply for re-issuance of a patent and to disclaim claims, these remedial provisions do not address the situation in which a patentee wishes to surrender certain claims. In this case, the Plaintiffs say there was no "mistake, accident or inadvertence" which would allow them to act pursuant to section 48 of the Act. As patentee, the Plaintiff Searle could not amend its application to remove these particular claims. A dedication was the more appropriate tool to accomplish the same results.

[47]            The Plaintiffs assert that the terms of the Dedication are clear and unambiguous. There is no improper derogation of the grant; there is no uncertainty as to the intention and extent of the Dedication, that is to give up the claims identified in that instrument. The Plaintiffs say that they are retaining other claims which are independent of the Dedicated Claims and in that regard, will act to assert their rights in relation to the Asserted Claims.

[48]            As for the Defendants' arguments arising from the existence of the Merck Patent, the Plaintiffs simply say that the patent itself is not a defence. Relying on the decision in Collette v. Lasnier (1886), 13 S.C.R. 563 (S.C.C.), the Plaintiffs argue that a subsequently issued patent is no defence.

[49]            Furthermore, the Plaintiffs rely on the decision in Free World Trust v. Électro Santé Inc. [2000], 2 S.C.R. 1024 which states that the date of publication, rather than the date of the grant, is the critical date. On this basis, the Plaintiffs say that the record shows that the date of publication for the Searle Patent preceded the date of publication for the Merck Patent. In these circumstances, the Plaintiffs are entitled to the benefit of section 28.1(1)(a)(ii) of the Act, in the matter of establishing priority.

[50]            The Plaintiffs argue that it is clear and undisputed by the Defendants that claim 42 of the Patent is infringed. In this regard, the Plaintiffs rely on the evidence of Merck's own witness, Mr. Gale who also agrees that claim 53 of the Patent is infringed. The same position is taken by the Plaintiffs' witness, Mr. Guthrie. The Defendants' deponent Dr. Trost contradicts himself as to whether he can construe the claim.

[51]            According to the Plaintiffs, there is a clear dispute between Mr. Guthrie and Dr. Trost as to claims 37 and 198.

[52]            Accordingly, the Plaintiffs submit that the evidence establishes that claim 42 is infringed and that summary judgment must issue in relation to that claim with a declaration that it is infringed. Further, the Plaintiffs seek an order that the action proceed as a specially managed proceeding and that any argument as to the validity of claim 42 be dealt with first with the remainder of the action on the other claims being stayed. The Plaintiffs here rely on Rules 106 and 107 and section 50 of the Federal Court Act, R.S.C. 1985, c. F-7, as amended.

DEFENDANTS' SUBMISSIONS

[53]            The Defendants primarily direct their arguments to three issues, that is the issue of alleged infringement of claim 42, the effect of the Dedication and the Plaintiffs' request to segregate the trial of the issues and stay the Defendants' counterclaim.

[54]            The Defendants do not dispute that claim 42 of the Searle Patent describes Rofecoxib, the active ingredient in the VIOXX pharmaceutical composition. Rather, the Defendants argue that it would be inappropriate to make a declaration for infringement of claim 42.

[55]            The Defendants argue that there is no infringement of the Plaintiffs' Patent, including claim 42, because the Dedication to the Public put all claims in the public domain, including the alleged Asserted Claims. The "without prejudice" reservation cannot limit the scope covered by the Dedicated Claims, otherwise there would be an impermissible derogation from those claims.

[56]            The reservation is ineffective because it cannot limit the exercise of the activity specifically contemplated by the Dedicated Claims. Any other conclusion would counteract the exhaustion of the Plaintiffs' rights effected by the Dedication. If the reservation is ambiguous, then it must be interpreted in favour of the public, including the Defendants and against the Plaintiffs.

[57]            The Defendants argue that the subject matter of the Asserted Claims is included in the subject matter covered by the Dedicated Claims, and the Dedicated Claims include claims specifically directed to compositions and use of the compound addressed in the Asserted Claims.

[58]            The Defendants say that the Act does not provide for dedicating claims to the public and there has been no definitive statement of the legal effect of such a step. They argue that the Plaintiffs intended the Dedication to have legal effect and that in order to resolve this motion, the Court need only determine what that effect is.

[59]            They argue that the legal consequence of the Dedication results in the Plaintiffs being estopped from asserting that the Defendants' activities infringe claim 42. Particularly, the Defendants argue that the Court must consider whether the sale of the compound of claim 42 together with a carrier is completely encompassed by claim 95, a Dedicated Claim, and if this can constitute infringement of claim 42.

[60]            The Defendants submit that by treating claim 42 as independent from the Dedicated Claims, the Plaintiffs are attempting to derogate from the grant made in the Dedication, contrary to the principle that a grantor cannot derogate from its grant.

[61]            Next, the Defendants argue that the Plaintiffs have not challenged the validity of the Defendants' Rofecoxib patent and relying on sections 42 and 43 of the Act say that an issued patent is presumed to be valid in the absence of evidence to the contrary.

[62]            The Defendants, referring to section 65(2)(c) of the Act, argue that the exclusive rights under a patent are deemed to have been abused if the demand for the patented article in Canada is not met to an adequate extent and on reasonable terms. They suggest that there is a market in Canada for the products of both the Plaintiffs and the Defendants. Co-extensive patent rights permit each patentee to exclude the other and there is prima facie abuse of each patent since the demand for the patented article cannot be met.

[63]            The Defendants rely on section 32 of the Competition Act, R.S.C. 1985, c. C-34 which provides that it is an offence to use the exclusive rights and privileges conferred by a patent in a manner to prevent, limit or unduly lessen the manufacture of any article that may be a subject of trade or commerce.

[64]            As for the request for an order pursuant to Rules 106 and 107 of the Rules to segregate the trial and stay the Defendants' counterclaim, the Defendants argue that this relief should be denied since the Plaintiffs have failed to clearly delineate the legal issues sought to be segregated from the ultimate issues raised by the Statement of Claim and Counterclaim. They submit that the Plaintiffs have failed to establish that the proposed segregation is more likely to result in the most expeditious and least expensive determination of the issues. The Defendants argue that the Plaintiffs have failed to establish that a stay of the counterclaim is in the interests of justice.

[65]            Specifically, the Defendants argue that Rule 106 has no application to the present motion. Although this rule provides that the court may order that one or more claims be pursued separately, it does not authorize the court to order that portions of one claim be tried separately from the remaining portions of the claim.

[66]            As for Rule 107, the Defendants acknowledge that this rule permits the court to order that an issue be tried separately from the remaining issues in the action, but this procedure is appropriate in only limited circumstances. In this regard, the Defendants rely on Rowat v. Information Commissioner of Canada et al (2000), 7 C.P.R. (4^th) 22 at 141-142 (F.C.T.D.).

[67]            The Defendants argue that where the claim and counterclaim relate to the same patent, the claim and counterclaim should be heard together on common evidence by the same judge; see Risi Stone Ltd. v. Group Permacon Inc. (1995), 109 F.T.R. 152 (T.D.).

[68]            Finally, the Defendants argue that a stay of the trial of the counterclaim pursuant to the Federal Court Act, supra, is not appropriate. A stay of proceedings pursuant to section 50 of that statute requires a party to meet the tri-partite test established in RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311. The Defendants claim that the Plaintiffs have failed to present any evidence to establish that it would be in the interests of justice to stay any part of the counterclaim.

ANALYSIS

[69]            Four issues arise from the present motions, as follow:

            (1)        Should summary judgment be granted in relation to claim 42.

            (2)        Are the Plaintiffs estopped from claiming an infringement of the Patent as a consequence of the Dedication to the Public.

            (3)        Should the trial in relation to the other claims be severed.

            (4)        Should the Defendants' counterclaim be stayed.

i)    The Standard for Granting Summary Judgment and Claim 42

[70]            The Defendants have moved for summary judgment pursuant to Rules 213 et seq of the Rules. In Granville Shipping Co. v. Pegasus Lines Limited S.A. et al, [1996] 2 F.C. 853 (T.D.), Justice Tremblay-Lamer summarized the general principles that apply in applications for summary judgments at pages 859-860:

2. there is no determinative test (Feoso Oil Limited v. Sarla (The) but Stone, J.A., seems to have adopted the reasons of Henry, J., in Pizza Pizza Ltd. v. Gillespie. It is not whether a party cannot possibly succeed at trial, it is whether the case is so doubtful that it does not deserve consideration by the trier of fact at a future trial;

3. each case should be interpreted in reference to its own contextual framework (Blyth and Feoso);

4. provincial practice rules (especially Rule 20 of the Ontario Rules of Civil Procedure, [R.R.O. 1990, Reg. 194] can aid in interpretation (Feoso and Collie);

5. this court may determine questions of fact and law on the motion for summary judgment if this can be done on the material before the court (this is broader than Rule 20 of the Ontario Rules of Civil Procedure) (Patrick);

6. on the whole of the evidence, summary judgment cannot be granted if the necessary facts cannot be found or if it would be unjust to do so (Pallman and Sears);

7. in the case of a serious issue with respect to credibility, the case should go to trial because the parties should be cross-examined before the trial judge (Forde and Sears). The mere existence of apparent conflict in the evidence does not preclude summary judgment; the court should take a "hard look" at the merits and decide if there are issues of credibility to be resolved (Stokes).

[References omitted.]

[71]            In Pallmann Maschinenfabrik G.m.b.H. Co. KG v. CAE Machinery Ltd. (1995), 62 C.P.R. (3d) 26 (F.C.T.D.) Justice Teitelbaum said at page 41 that:

[72]            In Hudson Luggage Supplies Inc. v. Tormont Publications Inc. (1995), 65 C.P.R. (3d) 216 (F.C.T.D.) Justice Noël, as he then was, commented on this general statement at page 220 as follows:

[73]            Justice Noël went on to say at page 220:

[74]            In Hayden Manufacturing Co. v. Canplas Industries Ltd. (1996), 68 C.P.R. (3d) 186 (F.C.T.D.) Justice Heald commented on the difficulties in a motion for summary judgment, in the establishment of the necessary factual foundation, to allow a court to properly construe patent claims and determine whether the facts establish infringement. At pages 197-198 he wrote as follows:

[75]            In Hayden Manufacturing Co., supra, Justice Heald concluded that in the face of contradictory evidence, there was a genuine issue for trial and the motion for summary judgment was denied.

[76]            On the basis of these authorities, it is clear that the test for summary judgment is well established and a critical issue is whether there is a "genuine issue for trial". That determination depends on the nature and content of the evidence presented in support of the motion. Judicial reluctance to determine a patent issue in a motion for summary judgment is due to the difficulty in establishing the facts without a trial.

[77]            In the present case, the parties have filed affidavits and the transcripts of cross-examinations conducted on those affidavits. This material discloses contradictory evidence in relation to claims 37, 53 and 198 but the Plaintiffs rely on the fact that the Defendants do not deny that the product VIOXX infringes 42, to support their argument that it is uncontested that summary judgment should be issued for claim 42.

ii) The Legal Effect of the Dedication

[78]            The Defendants do not dispute that claim 42 describes Rofecoxib, the active ingredient in VIOXX, but take the position that a declaration of infringement is unwarranted for three reasons which are all related to the Dedication made by the Plaintiffs.

[79]            First, the Defendants say that the Plaintiffs dedicated to the public claims to a process to manufacture Rofecoxib and that the subject matter of these claims is in the public domain. Next, the Defendants say that the Plaintiffs have specifically dedicated, in claim 95 claims to a pharmaceutical composition containing the compound of claim 42 together with a carrier and in claim 153, claims for the use of the compound to treat inflammatory disease. Finally, the Defendants say that the subject matter of claim 42 is encompassed within the claim of the patent granted to the Defendants which preceded issuance of the patent to Searle.

[80]            The Plaintiffs rely on the Affidavit of Dr. Guthrie as evidence that VIOXX infringes claim 42. In response, the Defendants rely on the Affidavit of Dr. Trost as evidence that Rofecoxib is included in the Dedicated Claims.

[81]            While the Defendants do not deny that VIOXX violates claim 42, at the same time they purport to say that any violation does not support a finding of infringement, having regard to the fact that the Plaintiffs filed a Dedication to the Public respecting some 140 claims of the Searle Patent. However, the Plaintiffs strongly deny that the Dedication of these claims to the public in any way includes, by reference or otherwise, those claims which were not dedicated, including the Asserted Claims.

[82]            The Plaintiffs offer an explanation for filing the Dedication to the Public. They say that they were precluded by the Patent Office from amending the patent following the decision of the Patent Appeal Board. According to that decision, the Plaintiffs were required to

• ...submit the exact claims (minus claims 12, 66, 126 and 181 rejected by the Commissioner Decision) [sic] and the exact disclosure as they were presented to the Patent Appeal Board.
• Fisk Affidavit, Joint Motion Record, page 2050

[83]            The Plaintiffs argue that section 48 of the Act allows for disclaimer only when a patentee has demonstrated a "mistake, accident or inadvertence". The Plaintiffs say that in this case, there was no "mistake, accident or inadvertence". Accordingly, as patentee, Searle could not amend its application to remove these particular claims. A dedication was more appropriate to accomplish the same result.

[84]            The Plaintiffs say that the Dedication to the Public relates only to the named claims and is without prejudice to their rights in relation to the Asserted Claims. The Plaintiffs say there is no ambiguity in the terms of the Dedication. The Dedicated Claims are claims for variations and uses of Rofecoxib. Claim 42, the claim here in issue, is a claim for a compound.

[85]            In my opinion, in making this argument the Defendants have erroneously ignored the legal proposition that each claim in a patent is separate and distinct; see section 58 of the Act and Hercules Inc. v. Diamond Shamrock Corp. (1969), 62 C.P.R. 43. Since each claim is separate, it follows that an act affecting certain distinct claims does not necessarily affect the remaining claims.

[86]            The Plaintiffs' Dedication to the Public refers to specific claims and excludes other claims. I do not accept the argument that the excluded claims are "somehow" encompassed by the Dedicated Claims. However, the effect of the Dedication is still in question.

[87]            The parties want the Dedication to have legal effect, but for different reasons. The Plaintiffs seek to rely on it to simplify the proceedings in the main action, while the Defendants purport to rely on it to defend their activities from allegations of infringement.

[88]            Following delivery of the Reasons for Order in Warner-Lambert Canada Inc., Parke Davis Division v. Canada (Minister of Health), [2002] 1 F.C. 517 (T.D.), the parties filed supplementary submissions as to the effect of that decision upon the present proceedings.

[89]            The Defendants say that the effect of the decision in Parke Davis, supra, is that once a dedication has been made, the patentee no longer has exclusivity with respect to the invention identified in the Dedication. The Defendants argue that the effect of the Dedication here to remove the Plaintiffs' exclusive rights in the invention covered by the Dedicated Claims and furthermore that the Dedicated Claims include by reference the subject matter of the non-Dedicated Claims, specifically here, claim 42.

[90]            On the other hand, the Plaintiffs argue that the decision in Parke Davis, supra, is very narrow and stands for the proposition that once a dedication has been made, it cannot be revoked. The Plaintiffs continue to deny that the Dedication to the Public in any way affects or includes the Asserted Claims. The Plaintiffs take the position that the decision in Parke Davis, supra, does not expand or limit the effect of the dedication made on their behalf in September 2000.

[91]            In Parke Davis, supra, the court considered the legal nature of patent dedication. At page 549, Justice Dawson said as follows:

[92]            The issues before the court in Parke Davis, supra, differed from those in the present case since they involved consideration of intention in making a dedication and whether a dedication, having been made, may be subsequently revoked. In the context of determining the justification of a Notice of Allegation, the court concluded that such a dedication could not subsequently be revoked. However, no clear statement was made as to the legal consequences of a Dedication nor how the dedication of certain claims might affect non-Dedicated Claims which is the present question.

[93]            In reaching the decision in Parke Davis, supra, the court relied on American jurisprudence to comment on the effect of the dedication upon the rights of patent holders in the Canadian context and placed reliance upon the law of representation in reaching a conclusion as to the revokability of a dedication.

[94]            Justice Dawson rejected the argument that a dedication is a promise that a patentee would not enforce its property rights. She characterized the patent in Parke Davis as having terminated by operation of law once it was irrevocably dedicated. Furthermore, the American jurisprudence cited in Parke Davis, supra, draws an analogy between the dedications of patents and their abandonment by the patentee.

[95]            The present motion is for summary judgment declaring that claim 42 of the Searle Patent has been infringed. The heart of the Defendants' opposition to that order is the alleged breadth of the Plaintiffs' Dedication. Unlike the situation in Parke Davis, supra, there is no question here about the intention of the dedicating party. Here, the Plaintiffs steadfastly maintain that the intention which is demonstrated by the Dedication to surrender or dispose of certain identified claims in the patent. That intention is clear and the Defendants are attempting to recast it.

[96]            Applying the reasoning in Parke Davis, supra, and considering section 58 of the Act, I find that the dedication of certain claims to the public terminates a patentee's rights to a monopoly on the subject matter described in those claims. Such dedication, however, does not affect the rights conferred by the remaining claims in the patent. Upon the dedication of the claims, the patent is to be read as if those claims had never issued, subject to any claim for past infringement. Accordingly, the public is entitled to use or manufacture the subject matter in the Dedicated Claims.

[97]            The public's entitlement to use and manufacture the subject-matter in the Dedicated Claims is limited by the protection conferred by existing patents, including the Searle Patent that now consists only of the Asserted Claims. The validity of these claims remains to be determined in the appropriate proceedings.

[98]            It follows that the Dedication is necessarily "without prejudice" to the Asserted Claims, or any other patent. In the Searle Patent, claim 42 is for the compound Rofecoxib. This claim is undisturbed by the Dedication to the Public.

[99]            In my opinion, the Plaintiffs have established that they are entitled to summary judgment for infringement of claim 42. In light of the evidence and the submissions made, I conclude that claim 42 has been infringed. It follows, then, that the Defendants' motion for summary judgment is dismissed. I do not accept the arguments that the Plaintiffs are estopped, on the basis of the Dedication, from pursuing the Asserted Claims.

iii) Should the Defendants' Counterclaim be Severed?

[100]        In the Defendants' counterclaim, they allege that 140 claims of the Searle patent, including the Asserted Claims, are invalid. The Plaintiffs seek an order pursuant to Rules 106 and 107 for a segregated trial to allow the determination of the validity of claim 42 before proceeding to trial on the remaining claims. They submit that infringement of one valid claim is all that is necessary in order to obtain the remedies sought.

[101]        The Defendants' position is that the Plaintiffs have neither satisfied the legal test for segregating a portion of the Plaintiffs' claim, nor have they tendered any evidence to show that the legal and evidentiary issues sought to be segregated can be clearly delineated from those issues in the balance of the action.

[102]        Rules 106 and 107 state:

[103]        Where segregating a claim and counterclaim into separate actions would result in the duplication of some evidence as well as give rise to the possibility of inconsistent judgments, the action and counterclaim should not be separated; see R. v. Central Tobacco Mfg. (1980) Ltd., [1985] 1 C.T.C. 357 (F.C.T.D.).

[104]        In Risi Stone Ltd. v. Groupe Permacon Inc., supra, the issue was whether a counterclaim should be struck out of the proceeding and tried separately. It was held that the court should seek to avoid the duplication of the evidence in assessing whether a counterclaim should be struck.

[105]        In this case, the Plaintiffs have failed to produce evidence that the segregation of the Defendants' counterclaim would reduce the discovery or evidence at trial, or otherwise expedite the proceedings. The segregation instead would likely duplicate such evidence because the evidence with respect to the other claims on the Searle Patent necessarily touches on claim 42. I therefore decline to segregate the proceedings.

iv) Should the Defendants' Counterclaim be Stayed?

[106]        The next issue for determination is whether the Plaintiffs' request for an order staying prosecution of the Defendants' counterclaim should be granted.

[107]        The motion in this regard is based on section 50(1)(b) of the Federal Court Act, supra, which provides as follows:

[108]        An order granting a stay of proceedings is discretionary; the basis for granting such an order in this case is the interests of justice, as provided above.

[109]        The interests of justice certainly include consideration of the expeditious resolution of the main action and in this regard I refer as well to Rule 3 of the Rules.

[110]        In my opinion, determination of the issues raised in the counterclaim will of necessity involve determinations of the issues raised in the Statement of Claim. There will be an overlap in the evidence. I see no overriding justification for granting an order staying the trial of the counterclaim. In the result, there will be no order to stay the trial of the counterclaim.

[111]        The Plaintiffs initially sought an order in the following terms:

            1.         AN ORDER under Rule 213-ff granting judgment to the Plaintiffs declaring that the Defendants have infringed claims 42, 53 and 198 of the Canadian Letters Patent No. 2,152,792.

            2.         AN ORDER under Rule 213-ff dismissing the Defendants' Defence and Counterclaim with respect to all claims other than claims 37, 42, 53 and 198.

            3.         IN THE ALTERNATIVE:

a)         AN ORDER under to Rules 106 and 107, ordering that the Defendants' counterclaim in respect to claims other than claims 37, 42, 53 and 198 be pursued in a separate proceeding or deferred until the main Act is concluded; and

                         b)         AN ORDER, under Rule 218(e), limiting the nature and scope of the examination for discovery in the Action to patent claims 37, 42, 53 and 198.

[112]        This relief was modified by the Plaintiffs, as follows:

            1.         That it be declared that the Defendants Merck have, by their importation, sale, offering for sale and distribution in Canada of the drug VIOXX contrary rofecoxib as an active ingredient have infringed claim 42 of Canadian Patent 2,1452,792;

            2.         That the trial of this action be segregated so as to restrict a first set of issues to:

                         (a)        validity of claim 42 of the Patent; and

                         (b)        remedies if any, as a result.

            3.         The balance of the action be stayed until final determination of the aforesaid trial.

            4.         Merck's motion be dismissed.

            5.         Costs of both motions to the Plaintiffs.

[113]        Since the parties have achieved mixed success in their motion, the question of costs is reserved for the trial judge.

[114]        In light of my conclusions on the various matters raised by the two motions before me, it is clear that the parties have each obtained partial success and the question of costs on these motions is reserved for the trial judge. The following order will be issued:

                                                  ORDER

1.         That the Defendants have infringed claim 42 of Canadian Patent 2,152,792 and summary judgment is granted in respect of claim 42 only.

2.          That the trial of the action with respect to the validity of claim 42 will not be segregated from the trial of the remaining issues.

3.          That a stay of the trial of the balance of the action is denied.

4.          That the costs of these motions are reserved to the trial judge.

                                                                                          "E. Heneghan"                          

                                                                                                      J.F.C.C.         

OTTAWA, Ontario

May 9, 2002