T-2432-95
BETWEEN:
ELI LILLY AND COMPANY and
ELI LILLY CANADA INC.,
Plaintiffs,
- and -
NOVOPHARM LIMITED,
Defendant.
T-2433-95
BETWEEN:
ELI LILLY AND COMPANY and
ELI LILLY CANADA INC.,
Plaintiffs,
- and -
NU-PHARM INC.,
Defendant.
T-2434-95
BETWEEN:
ELI LILLY AND COMPANY and
ELI LILLY CANADA INC.,
Plaintiffs,
- and -
APOTEX INC.,
Defendant.
__________________________________________________________________
REASONS FOR JUDGMENT
REED J.
The issue in these cases is whether the defendants may use, for their fluoxetine hydrochloride product, capsules that are similar in size, shape and colour to those used by the plaintiffs for the fluoxetine hydrochloride product they sell. The plaintiffs' fluoxetine hydrochloride is sold under the brand name Prozac.
Prozac is most commonly sold in 20 mg and 10 mg capsules. The former are half green and half cream (a green cap and a cream coloured body). The latter are half green and half pale grey (a green cap and a pale grey body). While the plaintiffs' claims cover both capsules, it is the 20 mg capsule that was the focus of much of the evidence in this litigation. The capsules are cylindrical in shape with rounded ends, in sizes that are standard for prescription medication. Differences between the capsules used by the plaintiffs and those used by the defendants will be described later.
The plaintiffs are sometimes referred to as brand name pharmaceutical companies and the defendants as generics. I will refer to the plaintiffs as the innovator companies since the generics also all have and use brand names. The terms innovator and generic will be used, even though I recognize that the defendant, Apotex Inc., does some innovative work, and the plaintiffs have entered what is referred to as the generic drug market.
The plaintiff El Lilly Canada Inc. ("Lilly Canada") is a wholly-owned subsidiary of the plaintiff El Lilly and Company ("Lilly U.S."). The ownership is effected through intermediary companies. There is no evidence concerning the structure or shareholders of the intermediaries. Lilly U.S. is the owner of the trade-mark Prozac and asserts ownership of trade-mark rights in the appearance of the capsules in which Prozac has been sold. Lilly Canada sold and sells Prozac in Canada under licence from Lilly U.S. The plaintiffs seek injunctions to prevent the defendants using capsules of the same size, shape and colour as the plaintiffs, on the ground that in doing so the defendants would be passing off their wares as the wares of the plaintiffs, contrary to subsection 7(b) of the Trade-marks Act, R.S.C. 1985, c. T-13.
(For the benefit of the reader an index is appended.)
Fluoxetine Hydrochloride - A Breakthrough Drug
Fluoxetine hydrochloride ("fluoxetine") is used to treat depression, as well as disorders such as obsessive-compulsive behaviour, bulimia and autism. Fluoxetine is one of a family of drugs called selective serotonin re-uptake inhibitors ("SSRIs"). Fluoxetine was referred to in the evidence as a breakthrough drug. Prior to its development by Lilly U.S., the treatment of depression involved the use of drugs that had more significant adverse side effects than fluoxetine and that were dangerous if taken in overdose. With the advent of Prozac, family physicians became more comfortable prescribing drugs for depression, as opposed to referring patients to a psychiatrist. The use of the drug did not require the same careful monitoring that earlier drugs had required. Patient compliance with the treatment prescribed was easier to elicit. Also, Prozac became the focus of considerable media attention. The significance of Prozac as a mood-altering drug was widely publicized. Some magazine and journal articles were filed in evidence. These carry depictions and photographs of the capsules, some on the cover of the magazine.
Fluoxetine was the first SSRI to be developed. It was followed by other SSRIs developed by other innovator companies. The other SSRIs have chemical and brand names such as: sertraline (Zoloft), paroxetine (Paxil) and fluvoxamine (Luvox). There are now still newer drugs, not of the SSRI family, also available for treating depression.
Agreements Respecting the Sale of Prozac in Canada and Bringing a Lilly Generic to Market
Prozac first reached the Canadian market in January, 1989. The 20 mg capsule became available at that time. The 10 mg capsule only became available in 1993. Lilly U.S. held a product by process patent for fluoxetine. The patent expired on March 20, 1996. Lilly Canada was the only supplier of fluoxetine to the Canadian market between January 1989 and March 20, 1996. In anticipation of the March 20, 1996 expiry of the patent, Lilly decided to market its fluoxetine as a generic, as well as under the brand name Prozac. Arrangements for this purpose commenced in March, 1995.
a) January 1991 Agreement - Between Lilly Canada and Lilly U.S.
In March, 1995, Lilly Canada distributed and sold Lilly U.S. products in Canada pursuant to an agreement dated January 1, 1991. That agreement replaced an earlier agreement of January 1, 1976. The January, 1991 agreement gave Lilly Canada not only the right to make, use, distribute and sell Lilly products but also to use, in relation thereto, certain trade-marks, brand names, house marks and other designations belonging to Lilly U.S. The patent for Prozac is listed in schedule A to the agreements. The brand name "Prozac" is listed in schedule B. Schedule B contains a list of the trade-marks, brand names, house marks and other designations belonging to Lilly U.S. that Lilly Canada was authorized to use. Designs and packages relating to various Lilly products are listed. No mention is made of the appearance (size, shape and colour) of the Prozac capsules.
Lilly Canada did not have the right to sub-licence the rights it held pursuant to the 1991 agreement. In addition, the agreement states that: it cancels and supersedes all prior agreements and understandings; there are no oral agreements, representations or undertakings relating to the subject matter of the agreement; the agreement can only be modified by a written document signed by duly authorized officers of the parties.
b) June 30, 1995 Agreement - Between Lilly Canada and PMS
In furtherance of the decision to bring a Lilly generic fluoxetine to the market, Lilly Canada entered into an agreement, dated June 30, 1995, with Pharmascience and 115013 Canada Inc. (collectively referred to as "PMS"). Pursuant to this agreement, PMS was licensed to distribute and sell, except in the hospital market, generic versions of certain Lilly products including fluoxetine. PMS acknowledged, in the agreement, that the "colour, shape and other indicia of the products (i.e., the product appearance)" of the Lilly products were trade-marks of Lilly Canada or its affiliates.
c) November 1995 Amendment to January 1991 Agreement
In late October or during the first week of November, 1995, an amendment to the January 1991 agreement was signed. The January, 1991 agreement was amended to "confirm" that Lilly Canada had always been licensed by Lilly U.S. to use the product appearance of the Lilly U.S. products that had been sold and were being sold in Canada. Schedule B to the 1991 agreement was amended to add thereto "the trade dress i.e., the colour, shape and size (the "Product Appearance") of the Lilly products". The 1991 agreement was amended to allow Lilly Canada to sub-licence to PMS the rights it held under the 1991 agreement. The amendment to allow Lilly Canada to sub-licence to PMS was declared to be retroactive to June 30, 1995.
| d) November 10, 1995 Amendment to June 30, 1995 Agreement - |
| PMS-Fluoxetine Becomes Available |
On November 10, 1995, Lilly Canada entered into an agreement with PMS whereby it granted to PMS the right to use the product appearance of the Lilly fluoxetine products in association with the fluoxetine supplied by Lilly U.S. or Lilly Canada to PMS.
As noted, under the marketing and distribution agreement, dated June 30, 1995, between Lilly (Canada) and PMS, PMS was appointed as a distributor in Canada for generic versions of certain Lilly products, fluoxetine being one of them. That agreement was amended from time to time. Under the business arrangement that exists, Lilly Canada controls all aspects of the manufacture, distribution, promotion and sale of PMS-fluoxetine. The marketing and distribution agreement provides that PMS "shall accept deliveries of the product on a consignment basis". Title to the PMS-product and risk of loss relating thereto remain with Lilly Canada until delivery to the customer. When the product is sold, Lilly Canada bills PMS and PMS bills its customer. As compensation PMS receives a distribution fee as a percentage of net sales of fluoxetine.
On December 1, 1995, the Lilly generic, sold under the PMS name, became available on the Canadian market. It was advertised and marketed as identical to Prozac. Both the 20 mg and 10 mg dosage forms were sold in capsules identical in size, shape and colour to the capsules used for Prozac. Indeed, the two products come off the same production line. The only difference between the two is that the tiny printing on the capsules differs. Instead of having "Lilly, 3105" printed on the cap, and "Prozac, 20 mg" printed on the body of the capsule, the PMS product has "TRADE DRESS LICD" on the cap, and "20 mg, 708" printed on the body. The PMS brand sells for 30 - 35% less than Prozac. Lilly Canada sells the PMS product in the hospital market and its sales people promote the product with physicians and pharmacists.
Interlocutory Injunctions
The statements of claim in these actions were filed on November 17, 1995. In each, an interlocutory as well as a permanent injunction, and other remedies, were sought. As noted the Lilly patent expired on March 20, 1996. On March 21, 1996, interim injunctions were issued, restraining the defendants from advertising, distributing or selling fluoxetine hydrochloride in "green whitish yellow or green pale grey" capsules. Interlocutory injunctions to the same effect were granted on April 26, 1996. The defendants subsequently entered the market with products using differently coloured capsules (all cream for the 20 mg fluoxetine dosage form and all green for the 10 mg dosage form). The interlocutory injunction was lifted on September 25, 1996.1 The defendants, then, began using green and cream and green and pale grey capsules similar to those used by Lilly.
Ciba-Geigy - October 29, 1992
The Supreme Court decision in Ciba-Geigy Canada Ltd. v. Novopharm Ltd., [1992] 3 S.C.R. 120, 44 C.P.R. (3d) 289 is of vital importance to the present litigation. Prior to that decision it was thought that a similarity in appearance of prescription medicines would not likely give rise to an action for passing off. This was because it had been accepted that pharmacists, dentists and physicians were the customers for these products, and that they neither choose the products by reference to appearance, nor would they be confused by a similarity of appearance among different brands. The Ciba-Geigy decision held that it was also relevant to consider the ultimate consumer, the patient, when deciding whether the tort of passing off had occurred.
The Ciba-Geigy decision arose as an appeal from a decision given on a question of law, posed before trial, in the hope that the answer to that question would dispose of the litigation. The Court of Appeal and the trial judge had held that, as a matter of law, when considering whether confusion was likely to exist, only pharmacists, physicians and dentists need be considered. In deciding that the actual consumers of the prescription medicine must also be considered, Mr. Justice Gonthier made a number of comments, often quoted during the course of the present trial. Comments such as: pharmaceutical companies are limited in the choice of ways to distinguish the get-up of their products;2 competing laboratories must avoid manufacturing and marketing drugs with such similar get-up that it sows confusion in the customer's mind;3 the only way of drawing the attention of patients to the origin of the product is the capsule or tablet itself; the patient has a choice;4 the prescription pharmaceutical products business is not so fundamentally different from other areas of commercial activity that special rules should apply to it.5
The exact scope of the Ciba-Geigy decision, what is its ratio and what is obiter dicta, will be determined by a higher Court than this. All I can do, at present, is set out my conclusions of fact based on my weighing of the evidence that is before me. After doing so I will make a reference to some principles of evidence and some specific rulings made for the purposes of this case, and lastly, I will set out the legal analysis and conclusions relating to the issues raised.
Marketing of Prescription Medicines - Particularly Prozac
Prescription drugs cannot be advertised directly to the public. The marketing efforts of the innovator pharmaceutical companies are directed at the physicians and pharmacists. Dentists are not relevant to the present litigation. The marketing efforts of the generic companies are directed primarily at the pharmacists. Both the innovator companies and those manufacturing generics market to the persons purchasing drugs for hospital use.
Lilly Canada employs sales representatives to visit physicians and pharmacists periodically to inform them about the company's products and to encourage them to prescribe and stock such products. Samples of the company's products are left with physicians to give to their patients. Literature for both the physician and the patient is left. In the case of Prozac, this practice was followed. Lilly representatives similarly called on pharmacists and provided literature to them as well as literature they could pass on to customers. Advertisements for Prozac were placed in journals directed to pharmacists and physicians. A video was made available to physicians, which they in turn could make available to patients. All this material carried the Lilly name and some of it carried depictions of Prozac capsules. Prior to October 1995, none of this material contained any explicit assertion by Lilly that the size, shape and colour of the capsule was considered by Lilly to be a trade-mark.
As noted, Lilly Canada's sales people also marketed PMS-fluoxetine when it became available. Part of that promotion involved leaving with physicians sticky notes that can be applied to prescriptions, which read "please ensure that this Rx for Prozac is filled with either Prozac or pms-FLUOXETINE". The literature sent to pharmacists included the announcement, dated November 30, 1995, that "pms-Fluoxetine, the first generic equivalent to Prozac in Canada will be available for sale," and that it "is the only generic fluoxetine that has obtained a licence to use the same product appearance (colour, shape and size) as Prozac." The promotional literature stated that PMS-fluoxetine was a product that would "satisfy those customers who demand a high quality low cost alternative to Prozac." The promotional materials contain notice that PMS is using the capsule product appearance under licence and that Lilly asserts a trade-mark in the capsule appearance.
Prescribing Medicines - Particularly Prozac
As is well known, prescription drugs cannot be purchased unless a physician or dentist has first written a prescription allowing for the use of the drug by the particular individual. While the patient will have some involvement in the choice of a drug, and of course it is always the patient's decision whether to take any drug at all, the overriding consideration in choosing a prescription medication is the knowledge and recommendation of the doctor. The doctor's choice, in prescribing a particular drug, is not made by reference to its appearance. In general, doctors pay little attention to the appearance of the drugs they prescribe. They may use the colour, shape and size of a capsule as an aid in identifying the drug a new patient has been taking but physicians will usually want to see the actual drug or vial in which the drug was dispensed, if possible.
The prescribing practice of physicians is not standard. Some always write the chemical name of the drug on the prescription. Some write the innovator's brand name, in this case Prozac, as long as the innovator company holds a patent on the product and, then, switch to prescribing by chemical name when the patent expires. Some use the innovator brand name even after the patent has expired, knowing that a pharmacist is likely to dispense a brand other than the innovator's product. The innovator's product, having been the only one on the market before the expiry of the patent, its brand name tends to become a surrogate for the chemical name of the drug. In addition, substitution laws, about which more will be said later, authorize pharmacists to dispense interchangeable brands of a drug. If a physician wishes to ensure that a patient receives a particular brand, he or she will prescribe by brand name and write "no substitution" on the prescription.
Purchasing from Pharmaceutical Companies
A pharmacist, or pharmacy chain, purchases prescription drugs either directly from the pharmaceutical company that manufactures them or from a wholesaler. Fluoxetine is provided to pharmacists in stock bottles containing 100 capsules. Stock bottles containing larger quantities are also available. Information, including the brand name and identity of the manufacturer is set out on the labels on the bottles. As long as a medicine is covered by a patent, pharmacists will have only the innovator's product available for sale. Once the patent expires, pharmacists will carry at least one generic brand as well as the innovator brand. They may cease to carry the innovator brand after generics have been on the market for a long time. The price differential between generic brands and the innovator's brand results in the innovator's product quickly losing market share. The pharmacist chooses which generic(s) to stock consequent on negotiation with the respective companies. The first generic to become available will have a market edge. From the pharmacist's point of view, the various brands of a drug that have been approved for marketing by the Health Protection Branch of the Department of National Health and Welfare are equivalent. The particular brand or brands pharmacists decide to stock, in general, are not determined by appearance. Breadth of product line and reliability of supply are important; price is a crucial factor.
Prescription drugs are purchased for hospitals on a contract basis, often by a purchasing agent. A hospital will usually carry only one brand of any given drug. Thus, when a patient enters a hospital and is taking a medication, if that patient is continued on the medication with drugs dispensed from the hospital pharmacy, he or she could receive a different brand from that taken upon entering the hospital. The brand chosen for use by a hospital (or number of hospitals collectively if they negotiate for drug purchases collectively) is based on the best price that can be obtained. Breath of product line and reliability of supply are, of course, again relevant.
Pharmacists have not in the past chosen the brand of drug that they stock by reference to its appearance. For decades in Canada, when generic products have entered the market, on the expiry of an innovator's patent, they have been the same colour, size and shape as the innovator's product. Thus, consumers of prescription drugs in Canada are not used to different brands of the same drug being different in appearance. In the case of a repeat prescription, or a refill, a change in the appearance from what was dispensed previously raises questions in the mind of the consumer as to whether the medicine has been correctly prescribed and dispensed and whether it is as efficacious as that previously used. One example to which reference was made concerned a Lilly generic. Lilly produced a generic brand of a sleeping pill in a smaller sized tablet than the innovator's product. Phillip Reed, a pharmacist, gave evidence that a customer of his, who was elderly and a long time user of the innovator's product, refused to believe that the smaller generic pill was as effective as the innovator's product. He noted that Lilly eventually changed its generic to make it the same size as the innovator's brand.
In the United States, the prescription drug market appears to operate in a different fashion, at least in some states. Different brands of the same drug can have different appearances. A generic licensed by the innovator company will carry the same appearance as the innovator product.6 In Finland, the prescription drug market operates in yet another way. Different brands of a prescription drug are differently coloured and are sold pre-packaged in cardboard boxes which are boldly printed with the brand name of the drug and its manufacturer. The admissibility of the evidence both with respect to the U.S. market and that in Finland was objected to, as not relevant to the present case, because it deals with markets other than Canada. I accepted the evidence as admissible but it can be taken no further than to establish that other markets can operate in a different fashion than has been the Canadian practice.
In any event, because, in Canada, a differently coloured capsule will lead customers to question whether they have been prescribed the correct drug, pharmacists will choose to stock and dispense a look-alike version of a generic as opposed to a non-look-alike generic. It means fewer explanations are required by the pharmacists. Thus, while pharmacists do not usually choose to stock brands of drugs by reference to their appearances, PMS-fluoxetine has been an exception. As long as it was the only generic brand that could be sold in a capsule having the same size, shape and colour as Prozac, pharmacists would choose to stock and dispense that product rather than others.
Dispensing and Sale of Prescription Drugs - Particularly Prozac
As is well known, a prescription is taken to a pharmacy where the pharmacist checks certain information on it, discusses the prescription with the patient, counts out from the stock bottle, when the drug is in capsule form, the prescribed number of capsules in the prescribed dosage form, places them in a vial and places a label thereon. Discussion (counselling) then ensues with the patient about the drug being dispensed. It is not unusual for the pharmacist to package the labelled vial in an opaque bag stapled with a receipt before handing it to the customer. In general, the customer does not see the capsules at the point of purchase. The customer in most cases will not see the size, shape and colour of the capsules until after their purchase, typically at home, after removal from the package and vial, just prior to consumption.
a) Labelling
The label placed on the vial in which the capsules are placed typically contains an indication of the manufacturer. Depending on provincial requirements the label on the vial will contain either the brand name (Prozac), or the chemical name plus the manufacturer's name (fluoxetine-Lilly), or the chemical name plus an abbreviated form of the manufacturer's name (fluoxetine-LIL). This information will likely also be on the receipt stapled to the outside of the bag in which the vial has been placed. Unless customers know what the abbreviations stand for they might not be able to identify the manufacturer from the abbreviation.
b) Counselling - Notice
Pharmacists are obligated to counsel patients with respect to the medication being dispensed. Counselling includes telling the patient, among other things, about potential side effects, when and how to take the drug and how it should be stored. There is conflicting evidence about the extent to which pharmacists orally inform patients about the particular brand of drug that is being dispensed. The weight of the evidence indicates that there is no professional requirement to do so. If a prescription is written by reference to the chemical name of the drug and the patient has not requested a particular brand, the choice of brand is for the pharmacist to make. If a prescription is written by reference to the brand name of the innovator's product and a generic is available, the pharmacist is required by law in various jurisdictions to inform the patient that generic brands are available. In Ontario, this statutory duty is satisfied by posting a sign in the pharmacy dispensing area in accordance with prescribed regulations.7 This sign advises patients to ask the pharmacist if a lower cost drug is being dispensed and advises them that they have a right to request an interchangeable product.
If a patient has not been prescribed the particular drug before there may not be any oral mention made of the brand that is being dispensed. Where the pharmacist knows that the patient has been taking an innovator's brand of the drug and the pharmacists is about to dispense a generic brand, survey evidence indicates that 82.5% of pharmacists say they always or almost always inform the customer about the change in brand. This same survey indicates that 93.7% say that they always or almost always inform the customer when the change is from Prozac to a generic fluoxetine. Pharmacists are least likely to inform a patient when there is a change from one generic brand to another. The survey indicates that 64% reported that they always or almost always do so.
While the survey evidence was criticized - it constitutes self-evaluation by pharmacists - the survey was conducted in accordance with principles and methods that give valid and accurate results. My weighing of the evidence does not leave me with any reason to doubt its accuracy. In addition, informing a patient of the availability of a generic product can be good business practice for the pharmacist. In the eyes of the customer, the pharmacist can be seen as being concerned to reduce costs either for the customer directly or for the customer's drug health insurance plan. The high percentages reported in the survey regarding advice given when there is a change from Prozac to a generic are convincing, since at the date of the survey generic fluoxetine had only been available for approximately seven months, and during all but the last two weeks of that period, except for PMS-fluoxetine, the generic brands had only been available in non-look-alike versions. It is important to note that the statistics quoted refer to the situation in which a change of brand is being dispensed to the customer. This presupposes a situation in which the pharmacist knows what brand the customer had previously been taking.
Much of the evidence garnered by the plaintiffs respecting a lack of counselling as to brand was purposely set in a context where the pharmacist would not know, without being told, what brand the customer had previously been taking. This was true for the prescription drugs purchased by law students of the plaintiffs' counsel's legal firm. Indeed, Dr. Feferman, who provided five prescriptions with his patients' consent to one of the law students, specifically instructed the student not to have the prescriptions filled at the pharmacy close to the doctor's office. The students knew nothing about the patients and their brand preferences, if any. Such information could not have been provided to the pharmacist had he or she requested it. None of these prescriptions were for fluoxetine.
Mr. Fishman, director of the generic business unit for Lilly Canada, went to a pharmacist where he had not been before and handed in a prescription written in the innovator's brand name (Amoxil) and was dispensed a generic. He did not express a preference for any brand and knew the prescription was written in a form to allow for substitution. The dispensing pharmacist and a colleague of hers, whom she described as her boss, gave evidence that there had been a generic of amoxicillin available for fifteen to twenty years and the innovator's brand was seldom requested anymore. The pharmacy did not stock the innovator's brand.
Copies of the prescriptions that had been given to Ms. Flamer and Ms. Bingham were not produced, so it is not known whether the prescriptions were written using the chemical names of the drugs or brand names (Synthroid and Ritalin respectively). Phillip Reed, an Ontario pharmacist, gave evidence that he always advises his customers of a change of brand, even when it is from one generic brand to another. If he does not, some patients will ask questions about the different markings on the capsules. Simon Ng, director of pharmaceutical services for London Drugs, a pharmacy chain having thirty stores in British Columbia and fourteen in Alberta, gave evidence that it is the policy of that chain to require its pharmacists to always notify a customer when a different brand is being dispensed. On the other hand, Marie Berry, a respected pharmacist from Manitoba, states that she never advises patients about a change of brand unless the patient raises the subject with her. With respect to Mr. Ashdown's evidence I have doubts about its credibility for reasons that will appear later. The evidence of the patients and pharmacists is consistent with the Environics survey evidence.
The results of a survey conducted by Elliott Research as to the views of pharmacy customers, as reported in the December 1995 edition of the magazine Pharmacy Practice is not reliable evidence. While a copy of the questionnaire that was used was put in evidence, the raw data and the tabular results were not available, nor were concerted efforts made by the plaintiffs' witness to obtain those results. The only analysis available is that reported in the magazine. While the plaintiffs called Ms. Robbins to give evidence that the magazine article fairly reflected the tabular result, in the absence of the actual survey documentation, I am not prepared to accept that evidence as reliable.
c) Substitution Laws - Provincial Formularies
A prescription is a direction from a physician to a pharmacist. A pharmacist has a duty to fill the prescription as written. Given the prescribing practices of physicians (i.e., sometimes using the brand name of the innovator's product as a surrogate for the drug), a pharmacist can interpret a prescription written by reference to the innovator's brand name as a request to dispense any brand of the drug. In addition, substitution legislation exists in most, if not all, provinces that allows for the dispensing of interchangeable brands of a drug.8 Brands of a drug that have been assessed by the relevant provincial review procedure as interchangeable are listed in whatever format the province chooses. In Ontario, for example, this listing is found in the "Comparative Drug Index". A pharmacist, in filling a prescription, unless "no substitution" is written on the prescription or the customer specifically asks for a particular brand, may dispense any interchangeable brand listed in the Index for that set out on the prescription.
In addition, when a drug is being purchased by a customer who is covered by a provincial government drug benefit plan, the pharmacist will only be reimbursed for the cost, if the drug is one for which the provincial government has indicated it will pay. The identification of what will be paid for is set out in provincial formularies. The formulary will not include all drugs, nor all dosage forms of a drug. In Ontario, for example, the 10 mg dosage form of fluoxetine is not listed, neither Prozac nor any generic brand. (The price of the 10 mg dosage form is not much different from that for the 20 mg dosage form.) The provincial governments not only limit the drugs and dosage forms covered under a provincial drug benefit plan but also limit the price that will be covered. Typically, the pharmacist will only be reimbursed for the lowest cost interchangeable brand. Some private plans also have this type of limitation. Forty percent of the prescription drugs purchased in Canada are paid for pursuant to provincial government drug benefit plans. A patient may choose a more expensive brand than the lowest cost one listed but he or she is required to pay the extra cost.
If a physician writes "no substitution" on the prescription, it is my understanding that under some plans the provincial government will reimburse for the higher cost brand. This was true, for example, in Manitoba until recently. Now, however, even in the case of "no substitution" prescriptions, the Manitoba government will only reimburse for the lowest cost interchangeable product. In Ontario, a similar change has been made, although if the physician can justify the "no substitution" designation, on medical grounds, the provincial government will pay for the prescription. There is no evidence as to whether this provision has ever been used or, if it has, in what circumstances.
d) Patient Requests
In a case where the physician has not written "no substitution" on the prescription, and the patient wishes to receive a specific brand of a prescription drug, the patient, of course, can inform the pharmacist of this preference. If the pharmacist does not stock the particular brand that is being requested, he or she will tell the patient either that the pharmacist will get it for them or that the patient will have to go to another pharmacy to get that particular brand. While the evidence establishes that, when patients express no preference, pharmacists may not always tell the patient what brand of drug is being dispensed, the evidence does not establish that pharmacists purposely mislead customers by dispensing one brand when the customer has asked for another. Pharmacists may, however, try to persuade the customer that the different brands are alike and thus the customer should purchase the brand the pharmacist stocks.
In summary, if the customer informs the pharmacist of the brand he or she wishes to purchase, there is virtually no scope for any confusion to arise, barring negligence or outright deceit by the pharmacist. This is not a situation in which the customer is self-selecting from a shelf-display of differently branded products.
Quality of Generics and the Innovator's Products (Prozac and the PMS Generic)
The weight of the evidence demonstrates that there is no difference in quality between the defendants' generic fluoxetine products and the plaintiff's products Prozac or PMS-fluoxetine. There is no evidence that the respective ratio of R to S isomers is either important for fluoxetine or that it differs between the defendants' products and the plaintiff's product. The percentage of active ingredient that ends up in any one capsule will differ slightly from capsule to capsule, both within a batch, and from batch to batch produced by a given manufacturer. Depending upon a manufacturer's self-imposed tolerances, there may be very small differences in the percentage active ingredient found in capsules produced by different manufacturers. Impurity profiles may also differ from time to time for any specific manufacturer and between manufacturers. None of these differences, however, are significant.
The inactive ingredients (excipients) are different between the plaintiff's products and the defendants' products. Excipients or fillers are used so the active drug component can be packaged in a large enough form to be consumed easily. The excipients used by the generics, including lactose, are ones that have long been used and are well known in the industry as appropriate for use as fillers.9 The composition of gelatin capsules including the printing thereon may mean that slight differences exist among the generics and innovator's capsules. Again, these differences are minute and not significant. (In general, in these reasons the use of the singular "plaintiff" will refer to Lilly Canada.)
There are some individuals who are supersensitive and it is possible they might react adversely to factors other than the active ingredient in a formulation. Dr. Binkley gave evidence that this was possible but rare. She agreed that one is taught in medical training that there are two words one should avoid using: always and never. In any event, the likelihood of a supersensitive person reacting adversely to an inactive ingredient in a formulation is as likely to occur with Prozac as with a generic. Prior to taking the product, the supersensitive person will not know of any possible negative reaction. Once such a reaction is identified the individual will take measures to ensure they do not again consume the product that has caused them distress.
Most importantly, generic products are assessed by both the federal government and by some provincial governments as being, respectively, equivalent to and interchangeable with the innovator's product. The defendants' products were assessed by the Health Protection Branch of the Department of National Health and Welfare as having equivalent therapeutic value to the plaintiff's product before being approved for marketing. Tests were done and data provided to that Department. This same procedure is followed for all generic products before they are approved. It is not necessary, for the purpose of these reasons, to describe the details of the testing that is done. It suffices to say that the plaintiffs' witnesses suggested that because the test evaluation parameters are expressed in ranges, rather than absolutes, and because the testing is done by comparison to a reference standard (the test results relating to the plaintiff's product), one cannot say that the two products are the same. The evidence does not support that conclusion.
The bioavailability testing is evaluated in terms of ranges rather than absolutes because that is a necessary feature of evaluating tests that involve human subjects. Physical characteristics including metabolic rates vary not only among people but, also, in any one person from day to day, or from time to time in any given day. Lilly's own Prozac monograph acknowledges this variability: "... in man, following a single 40 mg dose, peak plasma concentrations of fluoxetine from 15 - 55 ng/ml are observed after 6 - 8 hours". It is a misconception to assume that identical results can be replicated from one test situation to another even when the same formulation is being used. The test results must necessarily be evaluated in terms of ranges.
In addition, by the time a generic product is allowed to enter the market, the active chemical ingredient will normally have been used by many people world wide. This was true for fluoxetine. The safety and efficacy of the drug is thus reasonably well-known. It would not make sense to require the manufacturers of new formulations of the drug to repeat the testing required before fluoxetine was marketed. The use of a reference standard (the test results obtained with respect to the innovator's product) does not detract from the validity of the evaluation.
Counsel for the plaintiffs placed considerable emphasis on subsection 4.10 of the Conduct and Analysis of Bioavailability and Bioequivalence Studies - Part A, 1992, published by the Health Protection Branch of the Department of National Health and Welfare. That subsection instructs those testing for bioavailability that the rate of absorption and excipients within formulations may affect the frequency, onset and severity of adverse drug reactions. The subsection does not indicate that when such reactions fall outside the range acceptable by comparison to the innovator's product that the formulation will be approved.
In addition to the testing by the federal Health Protection Branch noted above, some provinces have their own review process, to some extent duplicating the review that the Health Protection Branch has already completed. Ontario, for example, adds its own review process. Not all products approved federally are listed as interchangeable in the Ontario Comparative Drug Index. In the case of fluoxetine, each of Prozac, PMS-fluoxetine, Apo-fluoxetine, Nu-fluoxetine and Novo-fluoxetine have been designated as interchangeable brands.
It is significant that no test results or scientific papers were produced that suggested a difference in the character or quality of generic and innovator products. Nor were any such results tendered with respect to the defendants' fluoxetine formulations when compared to that of the plaintiff. The anecdotal evidence of some physicians and some patients that hold the view that generic and innovator products are not equal in quality is not credible; it is not reliable. The products are approved as therapeutically equivalent. Those that appear in the Ontario Comparative Drug Index and in the corresponding publications of other provinces have been determined to be interchangeable with or therapeutically equivalent to the innovator's product. Physicians and pharmacists rely on those assessments.
In assessing the evidence concerning equivalent quality, equivalent therapeutic effect, interchangeability etc. one finds something of a battle of words. The use of words such as identical, same, indistinguishable, equivalent, interchangeable, possible and probable have to be considered within the entire context in which they are being used. There are some differences in the physical compositions of the plaintiff's and the defendants' products (e.g., different inactive ingredients). At the same time, the differences that exist are so insignificant that it is accurate to say that the medications are the same.
Placebo Effect
The word placebo is often used to refer to an inert substance used for comparison purposes in a controlled study of an active substance. In the context of this case, evidence was given that defined "placebo factors" as all factors that influence a patient's response to treatment independent of the pharmacological effect of the drug itself. These could include, for example, the doctor/patient relationship, the psychosocial background of the patient, the form of the medication used (e.g., an injection as opposed to a capsule) and the appearance of the medication. The response of patients suffering from depression to placebos is quite high. One study referred to reported that 30 - 40% of the patients with major depression, who were subjects of the study, showed a therapeutic response to a placebo over a 4 - 8 week period. Non-specific factors thus play a considerable role in the treatment of depression. The appearance of a medication can affect a patient's belief as to its effectiveness and this belief, in turn, can in fact influence that effectiveness. If a placebo responsive patient expects a medication to have a certain appearance by virtue of prior use or knowledge and the appearance changes, the patient may react to that change in a negative manner, reducing or neutralizing the beneficial effect of the drug. The experiences recounted by Ms. Salo, Ms. Coady and Ms. Bingham can be seen as examples of this phenomenon. Dr. Binkley gave evidence that, insofar as Ms. Coady was concerned, the different appearance of the capsules could have increased her anxiety and made it more likely for her to suffer a panic attack, the condition for which she was being treated.
Dr. Lapierre gave evidence that, if a patient was switched from Prozac to a generic fluoxetine having a different appearance, any negative placebo effect that might arise could be easily overcome by educating the patient that a difference in colour did not signify a difference in effectiveness. No study was proffered to support this opinion. He was not aware that generics are now, and have been for the past twenty or more years, marketed carrying the same capsule or tablet appearance as the corresponding innovator brands.
Choice of Capsule Appearance - Assertion of a Trade-mark in the Appearance
No Lilly U.S. witness with direct knowledge of the choosing of the green and cream and green and grey capsules for the 20 mg and 10 mg dosage forms of fluoxetine was called. There are assertions in the evidence that the capsule appearances were chosen for marketing reasons but there is no first hand evidence from those who made those choices. In any event, different dosage forms would have been one factor in the choice since different dosage forms of the same drug are not presented in the same colours. Lilly U.S. subsequently changed the colour of its 10 mg capsule in the U.S. market to all cream. No evidence was given as to why this was done.
Insofar as the shape of the capsules are concerned, a cylindrical capsule in the size used by the plaintiffs is standard in the industry. There are a limited number of standard capsule sizes for prescription medicines - about seven or eight. These are numbered from 000 (or 00) to 5. The larger the number, the smaller the size of the capsule. The size and shape of capsules must be such as to be easily consumable. Lilly chose a size 3 capsule for both the 10 mg and 20 mg dosage forms. The shape of the Lilly capsule differs from the standard shape in one respect; while the cap end of the Lilly capsule is spherical, the body end is bullet shaped.
Insofar as the colours are concerned, a two colour capsule for prescription medicines is not inherently distinctive. Capsules with caps and bodies of different colours are common in the industry. Indeed the 300 mg dosage form of Lithane, a medicine sometimes prescribed as an adjunct to the treatment of depression, comes in green and yellow capsules. Chlorodiazepoxide (Librium), an anti-anxiety medication, is sold in green and yellow capsules (5 mg dosage form) and in green and white capsules (25 mg dosage form). The shades of green and yellow are different from those used for Prozac but they demonstrate that there is nothing inherently distinctive about the colours that were chosen for Prozac.
As noted above, there was no express assertion prior to October 1995 by Lilly that it considered the capsule appearance to be a trade-mark.
The defendants gave evidence that they chose to copy the innovator's capsule appearance because, in Canada the appearance of prescription medicines is associated with the type and dosage form of the drug. They conceded that the choice was made for marketing reasons but denied that there was any intention to pass their products off as the plaintiff's product.
Capsule Differences
The capsules the defendants are using are not in all aspects identical to the plaintiff's. The body ends of the plaintiff's capsules are bullet shaped while those of the defendants are spherical. Two of the defendants (Apotex and Nu-Pharm) use a smaller sized capsule for the 10 mg dosage than does the plaintiff. The former use a size 4 capsule; the latter use a size 3 capsule. All parties use size 3 capsules for their 20 mg dosage form; that size is used as well by the plaintiff and Novopharm for their 10 mg dosage forms.
There is tiny printing on each capsule that differs from brand to brand. As noted above, the plaintiff's capsules have Lilly and Prozac written on them as well as the dosage and an identification number. Lilly is written in the stylized script used by that company. The defendants Novopharm, Apotex and Nu-Pharm have NOVO, APO and NU, respectively, printed in block style letters on the body of their 20 mg capsules and the number 20 printed on the caps. Corresponding differences exist in the printing on the 10 mg capsules.
The differences between the plaintiff's and the defendants' capsules only become obvious upon a close viewing of the capsules.
From the Consumer's Perspective
a) Relevant Market
In a passing off case, it is necessary to consider potential as well as actual customers for the product in question. In the case of fluoxetine this is not easy to do.
With respect to potential customers, statistics indicate that fifteen percent of all Canadians will, at some point in their lives, suffer from depression. Of these many may never seek medical assistance. Of those that do, not all will be treated with a prescription drug; some will be directed to other forms of treatment. Some of those for whom drug treatment is prescribed will be given an antidepressant other than fluoxetine. Some may be given one of the older drugs, some given another SSRI such as Paxil, Luvox or Zoloft, and some will be given one of the newer drugs.
Once a physician has identified a drug treatment that works for a particular patient, particularly a patient with depression, the physician will be reluctant to change the drug that has been prescribed. The more depressive episodes a person has, the more difficult the condition is to treat. Not all patients respond positively to the same drug. Sometimes a physician will have a patient try several different drugs before finding one that works for that particular patient. Consequently a person using, for example, the antidepressant Paxil may not be a potential customer for fluoxetine. In addition, individuals besides those suffering from depression can be in both the potential and actual fluoxetine market because that drug is prescribed for other conditions as well as depression. These conditions make the identification of potential customers difficult if not impossible.
Another difficulty in defining the relevant universe is that the actual market is not a continuing one. While some individuals will take an antidepressant medication continuously over a long period of time, others will take it for a shorter period. The evidence from Drs. Jones and Liefeld indicated that 170,000 people have started taking fluoxetine since the defendants entered the market. Approximately 4,000 individuals start taking Prozac in any given week. Lilly information indicates that Prozac users stay on that product for an average of six to nine months. This does not mean, however, that an individual is cured. Depression is a disease that recurs and the individual may be placed back on medication at a later time. In any event, the actual customer base for fluoxetine will change from day to day and will be significantly different from one six to nine month period to the next.
Drs. Liefeld and Fenwick took the position that, because jurisprudence has held relevant the views of all actual or potential customers, the views of the general public should be considered. The Environics study also proceeded on the basis that the views of the general public were relevant. This approach was taken because of the considerable media attention that had been given to Prozac. Part of both the Liefeld - Fenwick and the Environics surveys addressed subgroups that were prompted either with the name of Prozac or the capsule colours. These were described as "Prozac Aware" or "Prozac Knowledgeable". The plaintiffs' experts, particularly Dr. Heeler, defined the product market as antidepressants and took the position that the users thereof relevant for present purposes were past and present Prozac users. These are the only persons who will have been exposed to the appearance of the capsule.
I accept that the views of the general public, antidepressant users and Prozac users are relevant. If the evidence demonstrated that a significant proportion of the general public associated the capsule appearance with Lilly's brand of fluoxetine, or a single source or provenance, this would be compelling evidence. I accept that antidepressant users, even those that do not take Prozac, likely have a greater general knowledge of the treatments for depression and the drugs available for that purpose than will the general public. Also, one would expect, as the survey evidence confirms, that Prozac users or Prozac knowledgeable persons would be more likely than others to know or recognize the colour of the capsules. The actual consumer market for fluoxetine comprises those who have seen a physician and hold a prescription for the drug. Since the disease recurs, past users are more likely than members of the public generally to be potential users. The potential consumer market is difficult, if not impossible, to identify. I do not reject any of the evidence tendered on the basis that the wrong market was surveyed. The weight to be given to each can be assessed by reference to the questions asked and the group to whom the questions were put.
b) Survey Evidence
In order to provide evidence of the views of actual and potential consumers, all parties provided survey evidence to the Court. Indeed, much of the time at trial was taken up with the presentation, analysis and criticism of this evidence. Survey evidence is appropriate in a case such as this, where one is trying to ascertain the views and reactions of a significant number of individuals to the get-up of a product.10
I will first make some general observations on the quality of this evidence and then set out the conclusions I draw from it. Dr. Heeler's survey was soundly criticized by a number of witnesses. It is clear it was a very sloppy piece of work. This because obvious upon an initial reading before any expert evidence was given. The expert evidence buttressed this initial evaluation. The report has serious defects. I do not propose to set them out in detail. My assessment of the evidence leads me to conclude that the most significant are: the leading and biased nature of the questions and question ordering; the failure to do a pre-test; the failure to take steps to ensure that the interviewees chosen were not "mallies" (people who spend a great deal of time in malls); the confused and overstated presentation of the results of the survey. A great deal of evidence was directed to the unrepresentativeness of the sample chosen. In my view the biased nature of the questions and the question ordering is a far more significant defect. The survey had the advantage of asking for visual recognition on the basis of the actual physical presentation of a green and cream capsule. The defects in the survey, however, are so serious that they undercut its usefulness. In this regard, for example, Dr. Heeler's conclusion that the fame of Prozac relates not solely to the brand name but also to the capsule appearance is a leap of logic not supported by the data.
The Environics survey was very professionally conceived, conducted and presented. Care was taken to ensure that a representative sample of the general population was surveyed. The results were presented in a clear, unbiased manner. Insofar as Prozac users or antidepressant users are concerned, trying to ensure a representative sample using random sampling techniques, when the percentage of the population to be represented was so small, was clearly a challenge. It is accepted that asking interviewees to identify a capsule by reference to an oral description of its appearance tests the person's recall, rather than recognition, and that recall rates will be lower than recognition rates. Recognition rather than recall is more appropriate in assessing trade-mark distinctiveness. Recognition must, however, in order to be significant carry with it a source-related association.
Dr. Liefeld's reasons for choosing the approach he did are highly credible. In his opinion, the fact that there had been no competing products on the market from which the plaintiffs' product could be distinguished, until shortly before the survey research was to be undertaken, created significant difficulties for useful research. He noted that, in such circumstances, a consumer might use the capsule appearance (colour) to signify one or several characteristics of the product: the dosage; the chemical composition; the illness for which the drug was being taken; the brand; the source. He referred to this as the "research confound" or the "monopoly confound". In order to do meaningful research on distinctiveness of brand or source, then, in his opinion, it would be necessary to attempt to separate the various meanings to see what proportion of people attributed what meaning or meanings to the capsule appearance and in what proportion. I accept his evidence. I accept that it is not sufficient to ask a person if they recognize or know a particular symbol (including a trade dress or trade-mark) but what meaning is associated with that recognition or knowledge must also be determined.
The second difficulty that existed, in Dr. Liefeld's opinion, was identifying Prozac users for participation in a survey that tested meaning without biasing them as a result of the individuals knowing they had been chosen to be questioned because they were Prozac users. This led him to conclude that the most useful survey research, given the time and money available, would be a survey to determine what meaning(s) people attach to the colours of prescription medicines in general. From such information some conclusions might be drawn with respect to the meaning(s) people attach to the appearance of Prozac capsules, unless Prozac is different from the general. This approach had the added advantage of including the experience and opinions of potential consumers who were members of the general population but not identifiable at the time in question. The survey evidence Dr. Liefeld and Dr. Fenwick presented was, as with the Environics survey, carefully and professionally done. The survey methods used give valid and reliable results.
Dr. Papadopoulos' criticism of the Liefeld - Fenwick survey was not persuasive. While he reviewed the affidavits of Drs. Liefeld and Fenwick, he did not review any of the documentation relating to the survey and did not hear or review any of the testimony of Dr. Fenwick. He criticized for example question 2A of the survey but said that he would have no difficulty with the question if the words "same colours" had been changed to "same appearance". He suggested that the question should have been framed by telling the interviewee that the capsules contain the same medication but from different manufacturers. He did not seem to realize that one of the reasons for asking the question was to determine whether the colours meant the medicine or the manufacturer.
It is clear that a large percentage of the general population of Canada know the name Prozac and associate that name with a mood altering drug. Despite the publicity the product has received, however, the evidence does not show that any significant number associate the size, shape and colour of the capsule, or colour alone, with Lilly or with one trade source or provenance. The Environics survey showed that 1.4% of the general population think that a half-green and half whitish-yellow capsule means Prozac and of this 1.4%, fewer than four in ten, think Prozac is made by one company. That is, one half of one percent (0.5%) of the general population think a half-green and half whitish-yellow capsule means a drug called Prozac made by one company.
As noted, the Environics research also included questions directed to people who indicated that either they or a member of their family had taken Prozac (the 3Prozac Aware3). The survey results showed that of the Prozac Aware only 10% identified a half-green and half-whitish yellow capsule with Prozac, and of these only a little more than one-quarter (i.e., 2.7%) thought Prozac was made by one company.
The Liefeld - Fenwick evidence indicates that people, in general, do not attach much meaning at all to the colour of prescription medicines. The survey evidence indicates that 55% attribute no meaning to the colour of capsules being the same. If a meaning was attached to similarly coloured capsules of prescription drugs, it was most likely to be that the content of the capsules was the same (i.e., that the chemical composition, or the ingredients, or the dosage, or the illness for which it was prescribed) - 17% expressed this view. Only 2% thought the same colours would indicate that the source of the capsules was the same. The remaining gave answers that were too ambiguous to be classified, were completely irrelevant to the question, or indicated some meaning was held but whatever that might be it was not source related.
The Liefeld - Fenwick survey also sought to identify the proportion of the population at large that had experience with Prozac (the Prozac Knowledgeable). They sought, within the context of their general survey to ascertain whether people who either knew of Prozac or who were prompted with the name Prozac could name its colours and whether people who were told the capsule colours, but not the brand name, could name the brand. Of those that could name Prozac as a medicine used to treat depression, anxiety or an eating disorder only 6% (1.2% of the total Prozac Knowledgeable sample) could correctly name its colours. Of those who claimed to have seen, heard or read about Prozac, when prompted with the name, only 2% (1.4% of the total Prozac Knowledgeable) could correctly name its colours. Of those that claimed to have seen, heard or read about a prescription drug that came in a green and pale yellow capsule, less than half a percent of that category identified the drug as Prozac.
Unbeknownst to Drs. Liefeld and Fenwick, the defendant Novopharm arranged to have the survey they had developed used to interview a group of people who were known to live in a household where one of the members had consulted a doctor during the previous year as a result of depression. (This group is wrongly described in the evidence as "the Anxiety Sample".)
The survey that Drs. Liefeld and Fenwick designed had been implemented, under their supervision, by Market Facts of Canada Inc. ("Market Facts"). Market Facts is a survey research firm that retains a "consumer mail panel". This comprises approximately 60,000 households in Canada that are selected to be reasonably demographically representative by reference to a number of variables. The panel members agree to receive Market Facts questionnaires from time to time and to respond to them. The membership of the panel is changed periodically so that its members do not become too expert at questionnaire answering and thereby unrepresentative of ordinary persons. At the relevant time, Market Facts had just completed a general health survey of 10,000 households using its consumer mail panel. As a result of that survey it was possible to identify members of the panel who had said that either they or someone in their household had consulted a physician during the past year for a mood disorder or depression. The survey questionnaire designed by Drs. Fenwick and Liefeld, with two additional questions, was asked of those members.
The "anxiety sample" survey was conducted using the same valid and reliable methods that had been used for the Liefeld - Fenwick general survey. The results showed that individuals who themselves had consulted a physician for depression, or who lived in a household with someone who had done so, were less likely than those surveyed in the general sample to say that the sameness of capsule colours implied nothing at all to them. They were more likely to say that the sameness of capsule colours was related to the content or use of the capsule (e.g., chemical composition, illness for which it was prescribed). Source related meanings for capsule colours being the same was still the least prevalent of all the associations claimed; e.g. only 5% gave source related meanings. In the 3Prozac Knowledgeable3 subcategory only 19% could correctly report any of Prozac's colour combinations, 59% reported that they did not know the colours of Prozac and a further 23% reported incorrect colours.
The two additional questions that were added to the Liefeld - Fenwick questionnaire were: have you ever been prescribed Prozac; has anyone in your household or among your very close friends or family ever been prescribed Prozac. Those who answered affirmatively were called the "Claimed Prozac Exposed". Of this group 27% associated the correct capsule colours with Prozac.
Overall, the survey results show very little evidence to support a claim of association between capsule colours being the same and capsule source being the same, very little evidence of an association between the Prozac name and the actual colours of the Prozac capsule, and very little evidence of an association between the capsule colours green and pale yellow and the Prozac name.
As noted above, the survey Drs. Liefeld and Fenwick designed did not attempt to ascertain the meaning Prozac users attach to the appearance of the Prozac capsules when they make an association between the capsule colours and Prozac. As has already been said, Dr. Liefeld was of the view that it was very difficult to do so without biasing the results. In his view the best way of conducting research to obtain reasonably valid and reliable results was by field experiment, i.e., having the same fluoxetine from different sources available in the same colours and measuring the confusion that resulted therefrom. This, however, would be prohibitively expensive and take at least a year and a half to complete.11 At the time Drs. Liefeld and Fenwick were being asked to do their research the injunction was still in place and there were no competing capsules of fluoxetine in the same colour on the market.
What is surprising about the survey evidence, including the heavily biased work of Dr. Heeler, is the lack of association that exists. One would expect that individuals who are actually taking Prozac at a given time, or who have taken it in the relatively recent past would be able to identify it by its appearance. They will have taken the medication every day for an extended period of time to alleviate a very dramatic and devastating illness. Even when the survey research was directed to that group and the interviewees were chosen in a highly biased context and asked biased questions a large proportion did not recognize the capsules by their appearance.
c) Patients
The individuals who appeared as witnesses can be divided into two categories: (1) McIntyre interviewees; (2) others. The first category comprise Ms. Quon and Ms. Dunn, Mr. Ashdown and Ms. Johnson. These are all very knowledgeable individuals with respect to mood disorders and Prozac.
Ms. Quon is an employee of the Depression Support Society of British Columbia. That organization focuses on educating both the public and the Society's members about depression and other mood disorders. Ms. Dunn runs a support group through the Mood Disorder Association of British Columbia. Mr. Ashdown is the executive director of the Society for Depression and Manic-Depression of Manitoba. He is also president of the Depression and Manic-Depression Association of Canada. The last two organizations have received donations from Lilly Canada in amounts ranging from $400.00 to $25,000.00. Lilly Canada sponsored, at one time, a trip for Mr. Ashdown to travel across Canada with one of its staff members to talk generally about depression. Ms. Johnson is employed by the Society for Depression and Manic-Depression of Manitoba to work as an outreach worker at the Health Sciences Centre in Winnipeg. One would expect that because of their particular positions and experience all these witnesses would have knowledge that Lilly is the source of Prozac, and they did.
In October, 1995, in anticipation of an application being made for the interlocutory injunction and prior to the entry into the market of any generic fluoxetine, Mr. McIntyre interviewed these individuals. Prior to the meeting with Mr. McIntyre each witness knew that Mr. McIntyre was a lawyer, that he was representing Lilly and that they had been chosen for the interview because they had taken Prozac. Although Mr. Ashdown claimed that he did not know that Mr. McIntyre was coming to speak to him about Prozac, Mr. Ashdown had recruited Ms. Johnson for the interview and her evidence was that he told her "someone was going to be coming down to Winnipeg to talk to us about Prozac, and wanted to talk to someone who had been on Prozac".
Mr. McIntyre interviewed Ms. Dunn and Quon and asked them whether they were "both taking" Prozac or if they "knew what Prozac looked like". He told Ms. Johnson that they were going to speak about Prozac and asked if she knew what Prozac looked like. Mr. McIntyre took out a vial and held the capsules in the palm of his hand in front of Ms. Quon and Ms. Dunn. He placed some green and whitish yellow capsules on the table in front of Mr. Ashdown and Ms. Johnson. In each case, the capsules were held at some distance from the subject. None of the interviewees opened the vial or initially handled the capsules. The witnesses were interviewed with Prozac in mind and prompted to answer Prozac in an obvious manner.
As noted, initially, these witnesses were not given an opportunity to handle the medication or remove the capsules from the labelled vial - the situation that would most closely approximate the actual circumstances in which a consumer would first see the product after its purchase from the pharmacist. However, when each witness subsequently saw the capsules at closer range and handled them, they all easily determined either from the markings on the capsules or from their shape that the capsules were not Prozac. I note as well that the size of the markings on the defendants' fluoxetine capsules is larger than the "trade dress licd" writing on the PMS-fluoxetine-capsules. The latter is relied upon by the plaintiffs to give notice to the consumer of the licensed use of the capsule appearance.
The second category of patient witnesses comprise Ms. Coady, Ms. Bingham, Ms. Salo, Mr. Reimer, Mr. Wilson. I am unable to give Ms. Coady's evidence any weight. There are simply too many inconsistencies and contradictions in it. First she said she picked up her prescription on the way to the airport and that she took the pill the day after she arrived. Later she changed this to say that it was two or three days after arriving that she had taken the pill, and that she had not gone directly to Salt Spring Island. She said that after being taken to the hospital, where she stayed for seven hours, she went back to her daughter's home and slept for 30 hours but was still fine for Halloween. The hospital records show she was in the hospital on October 30, and that she was there for approximately one hour. She says that she was told by the hospital physician that she was having an allergic reaction to the drug (anaphylactic shock). Her hospital records indicate that she was diagnosed as having had a panic attack, the illness for which she was being treated. The diagnosis set out in the hospital records coincides with Dr. Binkley's opinion.
Parts of Ms. Bingham's evidence is also of questionable reliability. Although prescribed Prozac for depression, she decided to stop taking it on more than one occasion without her doctor's concurrence. When she went back to a doctor, not her usual doctor who was then on holidays, and was put back on fluoxetine, she attributed her failure to feel better within a certain period of time to the fact that she had been given a generic brand of fluoxetine and not Prozac. As noted above, there is no scientific basis to the conclusion that a generic brand is less efficacious than Lilly's product. Also, Ms. Bingham was not confused about the product she was getting from the pharmacist. The physician had prescribed by chemical not brand name. The pharmacist had explained to her that the patent had expired on Prozac and she was being given a generic brand. The generic brand she was given was one of the defendant's all cream capsules that were marketed during the existence of the injunction. There is reason to think that at least one of the reasons for her negative response was a psychological reaction to the different appearance of the capsules. She told her doctor that "the all yellow tablet ... shouldn't be given to people ... somebody should be told about this ...".
Ms. Salo's experience can be similarly classified. There was no confusion on her part as to what had been dispensed. It had been made very clear to her. She knew however that her husband had not obtained the PMS brand that her physician had advised her to obtain. She stated that as soon as she saw the different looking capsules "... I looked at it and figured I was in trouble". Again this appears to be a negative psychological placebo reaction that arose because of the different appearance of the capsules.
Little need be said about the evidence of Messrs. Reimer and Wilson. The evidence of neither supports a likelihood of confusion. Mr. Reimer indicated that he was aware of the availability of generic brands and of his ability to specify that he be dispensed one brand rather than another. He was prescribed a 10 mg dosage and received it. While he said he expected to receive a green and cream capsule, as a result of his reading about Prozac, he was not concerned when he received a green and grey capsule because the names Prozac and Lilly were on the capsules. I formed the impression that both Mr. Reimer's and Mr. Wilson's ability to identify Lilly as the manufacturer of Prozac was not entirely unaided. Indeed Mr. Wilson stumbled in a rather embarrassed manner in responding to counsel's question, when he said "E.Y. Lilly" instead of "Eli Lilly".
Physicians - Lack of Credibility
I did not find crucial parts of the evidence given by the physicians called as witnesses by the plaintiffs to be credible or reliable. For example, Dr. Coyle gave evidence that he prescribes innovator products by brand name on a "no substitution" basis for all his patients without regard to the cost consequences for them. He has a preference for prescribing by the innovator's brand name because of the amount of research the innovator companies do. He does not know anything about the defendants, Apotex, Nu-Pharm and Novopharm. He has received research money from innovator drug companies. He lectures for them. His opinion that some brands are better than the corresponding generic has no scientific basis. He appeared to have purposely tried to memorize the capsule colours of different drugs, about which he expected counsel for the defendants to ask, and when he could not give an answer he explained this failure by saying he had not prescribed that drug for a long while. His was not persuasive evidence.
Dr. Bugeja was completely lacking in credibility. He asserted that in his view the patient's right to choose is paramount. He acknowledged that he has a fiduciary trust relationship with his patients, is able to inform them of their choice of brands and tell then how to make sure they get the choice they want. At the same time he asserts that most of his patients are not aware that they have a choice of brand. He stated in his affidavit that because his patients rely on size, shape and colour, "if the generics are able to market look-alike medication, many patients may be deceived into thinking they are getting the brand name product". When asked whether he knew that it was the present practice for generics to be marketed in a similar appearance to the corresponding innovator brand, he said this was not true in all cases. As exceptions to the general practice he mentioned Eltroxin and Synthroid. These are not, however, exceptions to the general practice. Dr. Bugeja gave evidence that a patient of his had been taking enalapril and was given Vasotec. The patient came to him because the latter was a different colour from the former to ask if the correct medication had been given. Dr. Bugeja said that Vasotec to his knowledge was "purplish". In fact the two products enalapril and Vasotec have the same appearance and the colour of neither dosage form is purplish.
Dr. Gribble gave evidence that he generally writes "no substitution" on prescriptions. He believes the generics are not as effective. He has instructed a local pharmacist, at the behest of a Lilly sales representative, to dispense only the Lilly brand to his patients should he forget to write no substitution on the prescription. He gave evidence that two weeks previously one of his patients had said that the medicine being taken was not working as well as previously. It was Apo-fluoxetine. Dr. Gibble switched this patient back to Prozac but does not know whether this has made any difference because he has not seen the patient since. He has had patients relapse when taking Prozac. He was not aware that the common practice was to mandate generics with the same appearance as the innovator brand. His opinion that patients identify brand by capsule appearance and that similarly looking capsules would deny patients the right to know the brand they are receiving was based on this incorrect understanding of the existing market practice.
With respect to Dr. Lapierre, while he gave helpful expert evidence respecting placebo factors generally, his opinion noted above that educating the patient could easily overcome any negative placebo affect arising out of differently appearing capsules was not supported by any studies. He gave evidence that he had a patient taking a brand drug, Sinequan, who moved to a generic, doxepin, and this led to nightmares. Dr. Lapierre knew of no inactive ingredient that would lead to nightmares. He did not appear to be up to date on the therapeutically equivalent assessment by the Health Protection Branch. While he stated that the differing appearance of the Sinequan and doxepin products led his patient to conclude that a different brand had been dispensed, he did not know if the two products actually looked different. He rarely writes no substitution prescriptions himself. He expressed the opinion that it was helpful to have drugs from different sources appear different but he did not know whether the majority of generic drugs dispensed in Ontario, where he practices, look like the innovator's brand or look different. This was not of concern to him in advising his patients.
Dr. Levitt's opinion that approximately 25% of his patients who are given a prescription for Prozac know, or learn, that it is made by Lilly because the Lilly name is written on sample packages and other materials is based on speculation. I do not accept his opinion in this regard. His opinion that having different colours for each different brand of any given medication would be wise was based on his belief that different brands have different side effects and different degrees of efficacy. It was his view that different brands did not have the same bioavailability - a conclusion that is completely contrary to the evidence. He did not know that most generics now look like the original brand. He always prescribes by chemical name and has a card that he allegedly uses to show patients what the medication he is prescribing will look like before it is dispensed to them. Insofar as fluoxetine is concerned, this card has capsules of Prozac 20 mg, Prozac 10 mg and PMS 20 mg mounted thereon. No examples of the defendants' products were on the card. He did not know, until two weeks before giving evidence on November 29, 1996, that there were other generic versions of fluoxetine available besides PMS. He did not know that most generics look like the innovator brand.
Dr. Jones gave very useful evidence about the history of the treatment of depression and about the significance of the development of fluoxetine in that regard. However, his evidence that he had had patients tell him they were not doing as well on a generic as they had been doing on an original brand was not supported by any precise information as to the number of such calls he had received (he estimated between one to five), nor could he provide any specific information as to the content of these calls. He never made any report to either the Health Protection Branch or the relevant pharmaceutical company concerning these complaints. It is his practice to prescribe generically rather than by brand name, to keep the costs down for his patients.
Public Policy Considerations
Witnesses appearing for both the plaintiffs and the defendants referred to public policy considerations. The plaintiffs' witness assert that patients have the right to know what brand of a drug they are receiving and if different brands came in different capsule colours consumers would have a ready means of identifying them. The defendants' witnesses assert that having the same drugs and the various dosage forms thereof produced in the same capsule size, shape and colour plays a safety role that should be preserved: it enables both the patient and health care professionals to readily become alert to the possibility of a dispensing error, in either the pharmacy or hospital context; it enables patients, particularly the elderly, who may be on several medications, to distinguish between their medications. A particularly poignant example of the safety role that the existing system can play was the evidence of Kathleen Connors, president of the National Federation of Nurses Union. She was saved from making an error in administering medication to a patient in a hospital, when the patient recognized the particular drug to which she was severely allergic because of the colour of the pill.
All but three of the health care professionals that were called as witnesses agreed that patients have a right to know what brand of a drug is being dispensed to them. Dr. Ensom, past-president of the Canadian Society of Hospital Pharmacists, thought it was not important information. Dr. Remick, a consultant physician at St. Paul's Hospital in Vancouver, thought the brand of drug was not a relevant consideration. Simon Ng, a supervisor pharmacist for the London Drug store chain considered that brand was only important except, when a change of brand was being made. Physicians, in general, do not inform patients about the availability of different brands. Pharmacists do not consider brand an important factor unless a change of brand is being dispensed. While the health care professionals said that patients had the right to know, by and large they did not consider that they had an obligation to inform patients about brand choice. If a mechanism is needed to give effect to a patient's right to know, it is not clear why this could not be accomplished by requiring pharmacists to include on the receipt and vial label a complete version of the name of pharmaceutical company that produces the product e.g., LILLY instead of LIL, or APOTEX instead of APO.
Counsel for the plaintiffs argue that the patient's right to choose is not a public policy consideration because the Ciba-Geigy decision has determined, as a matter of law, that patients have that right and have a right to have it effected by manufacturers adopting differently coloured capsules or pills for the particular brand of a drug they manufacture. I do not interpret the Ciba-Geigy decision in that way but, as I have noted elsewhere, this will surely be for a higher Court than this to decide.
In any event, recommendations as to what the law should be are not relevant for my purposes. I do not think I am entitled to take into account the evidence adduced by the defendants from the various associations who seek to ensure that all brands of the same dosage form of a drug are coloured in the same way.
Comments on the Evidence
It is always difficult for a trial judge to decide how much detail to include in reasons. In not mentioning certain parts of the evidence there is always a danger that it may be successfully argued, at a later time, that these have been ignored by the judge. At the same time, evaluating in writing and commenting on every detail makes the writing of reasons impossibly long and time consuming. The comments that have been made on certain aspects of the evidence, should not be taken as meaning that everything that is not referred to was believed or found to have weight or that it was ignored. I have addressed particularly the plaintiffs' evidence because it is the plaintiffs that have the burden of proof.
Secondly, the evidence in this case wandered back and forth across the line dividing fact evidence from opinion evidence and between opinion evidence concerning conclusions of fact that a witness is entitled to give as a result of his or her own personal experience and expert opinion evidence which overlaps with the former. Regardless of the type of opinion evidence concerned, the principles for evaluating it are the same and the ones I have applied are: is there a firm factual basis to support the opinion and is the logic or reasoning used to reach the opinion sound.
In recent years the rules with respect to opinion evidence have become less stringent than was previously the case.12 Those respecting hearsay evidence have also become more flexible. It is clear that witnesses are entitled to express opinions on the basis of their personal knowledge and experience, unless there are policy reasons for excluding such. The question becomes one of the weight to be given to such evidence.
In this case 21 expert reports were filed before trial pursuant to Federal Court Rule 482 by the plaintiffs; 30 were filed by the defendants. At trial the plaintiffs called 34 witnesses and the defendants called 28. Of these 15 gave expert evidence on behalf of the plaintiffs and 19 gave expert evidence on behalf of the defendants. Very few of the witnesses were experts in the sense that a trier of fact would have difficulty drawing inferences from the evidence without their assistance. Expert evidence can be either opinion evidence or fact evidence, the latter often being based on hearsay.13
I formed the impression that so many expert reports were filed by counsel to avoid being met with an argument at trial that the evidence could not be received, either because it was opinion evidence or because it came from, and concerned, the experience and knowledge of professionals and thus unless a Rule 482 report had been filed the evidence would not be admissible. An example of this type of objection can be seen in the objections to Dr. Ensom's evidence.14 His evidence is an example of the overlap that exists between the evidence a knowledgeable witness can give and that given by an "expert". In any event, the filing of the various reports as expert reports played an important and welcome role in providing disclosure before trial to the opposing parties.
I turn, then, to the distinction between qualifying a witness as an expert to give evidence in a certain area and the evaluation of that evidence. This can perhaps be best illustrated by reference to the objections and rulings relating to Drs. Slater and Stephens. It was argued that with respect to Dr. Slater that his expertise with respect to survey design, and with respect to the evaluation of survey reliability and validity, had to be conditioned by the fact that he had done neither mall surveys nor surveys relating to trade-marks. It was argued that his expertise concerning quantitative research methodology and the analysis of data relating to health issues, including the assessment of bias in the self-reporting of health behaviours, would be limited to his experience with surveys relating to cancer patients. He had done no surveys of persons diagnosed with depression. Similarly Dr. Stephens' qualifications were objected to because he had never done surveys relating to trade-marks and the recognition thereof.
I indicated, with respect to both these witnesses, that I would hear their evidence and to the extent that their experience or expertise did not qualify them to give any particular part of that evidence, this would go to weight. In my view their training and experience could support opinion evidence respecting survey methods in general, even if it did not support comments on particular details of mall surveys. The acceptance of a witness as qualified to give expert evidence does not operate to suspend the Court's evaluation of that evidence. Interestingly, in the context of the evidence as a whole, when one evaluates the evidence given by Drs. Slater and Stephens, much of it duplicated evidence given by other witnesses. The time taken arguing about qualifications and evidence objections was not commensurate with the possible importance of the evidence.
I turn next to some unresolved decisions respecting evidence objections that I did not address during the trial. As I indicated to counsel, I am inclined to treat objections, especially from counsel as experienced and senior as those acting for the parties in this case, as serious even if my initial reaction is to think that they should not be so treated. Accordingly, decisions were reserved when, on reflection, there was really no good reason for doing so. In any event, dispositions of the reserved rulings will be set out below together with some comments on related rulings.
Many objections were made by counsel for the plaintiffs to questions put by counsel for the defendants to witnesses on the ground they were either directly or indirectly criticisms of Dr. Heeler's report that had not been put to him when he was on the stand. Counsel referred to Browne v. Dunn (1893), 6 R. 67 (H.L.) at 70 - 71. I reserved my decision with respect to some of those objections and gave a commitment at trial, to include in written reasons some explanation of my non-acceptance of others. Having reviewed the objections, both those I disposed of and those I did not, I do not find that any of them have merit. The situations to which it was sought to apply Browne v. Dunn are not Browne v. Dunn situations. For example, counsel objected to Dr. Stephens' evidence alleging that a margin of error three to four times higher than 6.2% should be attributed to Dr. Heeler's work. The objection was based on the assertion that this statement had not been put to Dr. Heeler. However, Dr. Heeler had been asked about the margin of error applicable to his report and how he calculated it. Dr. Stephen's evidence is entirely proper.
With respect to the allegation that that Dr. Stephens' evidence was "oath helping" because it evaluated not only the methodology used by Dr. Heeler but that used in preparing the Environics reports, the obvious groundlessness of that assertion need not be commented on further. With respect to objections relating to questions on the ground that there had been no mention of the subject matter in the relevant expert affidavit, the principle I applied was that if the affidavit could be reasonably read as giving notice to the opposing party of the evidence being adduced then it was properly admissible. On occasion exceptions were granted, for example, Dr. Heeler's evidence with respect to why he did not do a pre-test and his reference to the Bush and Haire article.
I refused to accept a significant portion of the evidence proffered by Dr. Yaneff. While I accept that experts are entitled to give evidence respecting the ultimate issues in a case, I draw a distinction between evidence relating to an ultimate issue and evidence expressing a direct conclusion thereon. In any event, the evidence that was not accepted was simply not of a useful type. Subsequently, in the context of another argument, my attention was drawn to the decision in Emil Anderson Construction v. British Columbia Railway, [1987] 5 W.W.R. 523 (B.C.S.C.). The comments in that decision relating to the mixing of opinion and argument are applicable to the portions of Dr. Yaneff's affidavit that were not accepted. The comments respecting the inadmissibility of a joint report, found in the Emil Anderson Construction case, are not applicable to this case. Counsel agreed upon a procedure which provided for the proper and fair cross-examination of the joint authors. I allowed, over the objection of counsel, Dr. Lal's expert evidence to be adduced. After hearing the evidence, I formed the view that it was not useful. I have paid no attention to it. The argument that Mr. Thompson's statements given on examination for discovery, could not be put into evidence because Mr. Ashley had not been asked to comment on them, is without merit. Mr. Thompson was the representative produced by Lilly U.S. for discovery purposes. No Lilly U.S. witness was called at trial. There was no requirement to put the portions of the discovery evidence to Mr. Ashley, a Lilly Canada witness, even though Mr. Ashley had served as a representative of both companies at a continuation of the discovery.
It is important to note that accepting into evidence an expert's evidence in the affidavit form, in which it has been filed under Federal Court Rule 482, gives that evidence no more weight than it would have, had it been presented orally. The accepting of the affidavit is merely a procedural mechanism to shorten a trial. It excuses the witness from either reading into the record his evidence or giving it in an unscripted oral form. The witness' evidence is still evaluated by the usual standards, including the demeanour of the witness when being cross-examined on the affidavit in the witness box.
Counsel for the plaintiffs repeatedly objected to evidence respecting the use physicians, pharmacists, patients and the general public make of the name Prozac to signify the medicine itself - sometimes referred to as the possible generization of the name Prozac.15 Counsel for the plaintiffs objected that: the genericzation of the word Prozac had not been pleaded in the statements of defence and therefore evidence thereon, should not be accepted; the evidence and argument took him by surprised. I am very sceptical about counsel's assertion that he was taken by surprise. Significantly, however, the generization of the word Prozac is not in issue. The issue is whether or not the capsule appearance of the Lilly fluoxetine is distinctive as an indication of trade source or provenance, and whether the use of a similar capsule appearance by the defendants would result in a likelihood of confusion. The evidence respecting the use of the word Prozac, as a surrogate for the medicine itself, was adduced in response to the plaintiffs' claim that a significant number of individuals associate the capsule appearance with Prozac, and this equates to an association with a trade source or provenance. The evidence concerning the use of the word Prozac is not the type of material fact one would expect to see pleaded in a statement of defence in response to a claim that the defendants, by using a similar capsule appearance, were passing off their goods as the goods of the plaintiff. In the context of this litigation the statements are not material facts that must be pleaded in the statement of defence, they constitute evidence that is not set out in pleadings.
I turn then to comment on two decisions made during the course of trial: one was the applicability of section 7 of the Canada Evidence Act, R.S.C. 1985, c. C-5; the other was a requirement I placed on the plaintiffs to give more disclosure to the defendants concerning the case they had to meet. Section 7 of the Canada Evidence Act provides:
| Where, in any trial or other proceeding, criminal or civil, it is intended by the prosecution or the defence, or by any party, to examine as witnesses professional or other experts entitled according to the law or practice to give opinion evidence, not more than five of such witnesses may be called on either side without the leave of the court or judge or person presiding. |
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In this case three actions were set down for hearing concurrently, on common evidence. They were not consolidated although Mr. Radomski as counsel for both Apotex and Nu-Pharm essentially proceeded with respect to his clients in a consolidated fashion. Section 7 has been interpreted as referring to expert opinion evidence only and as limiting the evidence to five witnesses per subject matter or factual issue in a case, not five witnesses in total.16
Prior to counsel for the defendants calling some of their expert witnesses, counsel for the plaintiffs raised a concern that it appeared as though the defendants were planning on calling more than five witnesses per "side" on a factual issue (particularly the criticism of Dr. Heeler's survey evidence). An edited version of the reasons I gave orally with respect to this concern was placed on the record. In summary those reasons were that section 7 does not deal with the situation in which separate actions are being heard concurrently; no jurisprudence dealing with the meaning of "side" could be found; if the word "side" is interpreted as synonymous with party, this leads to the rather unreasonable result that the three defendants could call fifteen witnesses and the two plaintiffs, being separate parties to each of the three actions, could call thirty expert witnesses on each factual issue. Ideally, if anyone had thought of it at the time, this matter should have been dealt with when the application to set the three cases down for concurrent hearing was made.
In any event, I interpreted section 7 as allowing Mr. Deeth to call five witnesses on behalf of his client (Novopharm) and Mr. Radomski to call five on behalf of his two clients (Apotex and Nu-Pharm). Mercifully, counsel for the plaintiffs assured me that since they had already, except for reply witnesses, called the plaintiffs' evidence, they would not take advantage of the logic of my ruling to add yet more expert evidence on their clients' behalf. The section 7 limitation operates in the absence of leave being given by the Court or a judge to depart therefrom. I indicated that because of the stage of the proceedings at which this issue had arisen I would, in any event, be prepared to grant leave to exceed the section 7 restriction if that were necessary. The nature of the proceeding particularly the extensive reliance on expert evidence was also a factor. In any event, what had started as an expression of concern by counsel for the plaintiffs was dealt with as a motion by the defendants for a ruling on the interpretation of section 7 and, alternately, if the decision was not in the defendants' favour, for leave to call additional witnesses. The disposition of the motion was dealt with on this alternate basis also.
Lastly, I include some observations on a ruling I made during the early days of the trial that is likely to be the subject of further comment. I required the plaintiffs to provide more information in the nature of discovery to the defendants concerning the case the defendants had to meet. Counsel for the plaintiffs objected strongly on the ground that Mr. Justice Rothstein in a case management order had denied such disclosure.
I note first of all that a trial judge will become aware of circumstances and information that is not always available to the case management judge. More importantly, however, I do not believe that Mr. Justice Rothstein intended his order to operate in the fashion in which it was being interpreted. The defendants were seeking information about the case they had to meet, information as to the witnesses that would be called. The plaintiffs resisted this request. In response to Mr. Justice Rothstein's order, the plaintiffs on October 25, 1996, provided the defendants with seven pages containing the names of 217 individuals. Of these, 146 contained no address identification except the province of residence and sometimes the city. The trial was scheduled to commence on November 4, 1996. The disclosure, in practical terms, was not particularly useful. In addition, counsel for the defendants during the trial repeatedly requested advance notice of who was going to be called as witnesses and in what order by the plaintiffs. That information was not forthcoming until an order of the Court was finally given to require such. I formed the impression that counsel for the plaintiffs were, to use a description that has been used elsewhere, following the "old 3poker-playing3 habits of keeping their cards up their sleeves". On one occasion the press were informed as to the expert witness that would be called the following day before opposing counsel were notified. When the concern about lack of disclosure was raised with respect to the prospective evidence of Mr. Reimer, I concluded that further disclosure of the evidence the plaintiffs planned to call was required to enable counsel for the defendants an adequate opportunity to cross-examine. I, accordingly, so ordered including a requirement that the plaintiffs disclose to the defendants any information they held that would further the defendants' position as well as that in favour of their own. In my view, litigation operates best as a dispute resolving process when the positions of all parties are disclosed to those in opposition well in advance of the trial. It operates best when surprise at trial is kept to a minimum.
Legal Arguments and Analysis
a) Unlicensed Use (1989 - 1995) and the Marketing of PMS-Fluoxetine
The statements of claim assert that Lilly U.S. is the owner of the trade-mark rights in the capsule appearance. Lilly U.S. is not a registered owner of the capsule appearance in Canada. Only Lilly Canada has been selling Prozac in Canada. If Lilly Canada were a licensed user of the capsule appearance and the capsule appearance is a trade-mark, then, its use by Lilly Canada would enure to the benefit of Lilly U.S. Subsection 50(1) of the Trade-marks Act so provides:
| (1) For the purposes of this Act, if an entity is licensed by or with the authority of the owner of a trade-mark to use the trade-mark in a country and the owner has, under the licence, direct or indirect control of the character or quality of the wares or services, then the use, advertisement or display of the trade-mark in that country as or in a trade-mark, trade-name or otherwise by that entity has, and is deemed always to have had, the same effect as such a use, advertisement or display of the trade-mark in that country by the owner. |
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Counsel for the defendants argues that the use by Lilly Canada was unlicensed and therefore the plaintiffs' claim as pleaded must fail. In addition it is argued that the agreement between Lilly Canada and PMS is in fact a distribution, not a licensing agreement, and lastly that marketing fluoxetine in the same coloured capsule as Prozac but under the brand name PMS creates confusion in the market place such that if there was a trade-mark right in the capsule appearance it has been destroyed.
Counsel for the plaintiffs argues: (1) the use was licensed, either under the 1991 agreement or independently of it; (2) the use by Lilly Canada would ensure to the benefit of Lilly U.S., in any event, because they are related businesses companies and part of one business association; (3) subsection 50(1) of the Trade-marks Act together with the November 1995 amendment to the 1991 Lilly U.S. - Lilly Canada agreement operate to cure any defect that might have existed; (4) use of the capsule appearance in association will the PMS name does not destroy the trade-mark right because that use was licensed and the public notified thereof.
The argument that a license to use the capsule appearance as a trade-mark was granted to Lilly Canada by Lilly U.S. in the 1991 agreement is based on the wording of the recitals to the agreement and sections 1.3 and 1.4 thereof. The relevant wording follows:
| Lilly [U.S.] represents ... it has the exclusive right to grant licences to enable the licensee [Lilly Canada] to make ... and sell certain products including the right to use within Canada, certain patents, trademarks ... designs and other scientific and technical data ... relating to such products and to their preparation, manufacture, processing, and packaging, the products being hereinafter referred to as "Lilly Products", by which is meant products to be sold in Canada under trademarks, brand, names, or other designations owned or employed by Lilly. |
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| 1.2 Lilly ... grants to Lilly Canada a non-exclusive sublicence ... under the Canadian ... patents listed in Schedule "A" ... to make ... sell ... or import Lilly products whose preparation is covered by the ... patents. |
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| 1.3 Lilly further grants to Lilly Canada the right and license to apply to Lilly products the house marks, trademarks, brand names, and for other designations for Lilly Products ... listed in Schedule "B" ... |
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| 1.4 Lilly further shall disclose to Lilly Canada and grant a non-exclusive licence to Lilly Canada to enable it to make ... and sell Lilly products ... complete information on Lilly Products. Such information shall include formula processes, designs and other scientific and technical data, including the manner for preparation, manufacture and compounding the Products into pharmaceutical forms, the labelling and packaging of Lilly products ... and all other scientific and technical data ... all of which are referred to hereinafter as "know-how" ... |
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As noted above, the Lilly U.S. fluoxetine patent is listed in schedule A. The brand name Prozac is listed in schedule B. No mention is made of the capsule appearance. No reference to it as being a trade-mark, or designation occurs. I can not interpret the agreement as granting to Lilly Canada the right to use the capsule appearance as a trade-mark. Section 1.4 authorizes Lilly Canada to have access to the information needed to make the capsules but the agreement specifically distinguishes between grants respecting patent rights, grants respecting trade-mark rights and the agreement to provide technical information. An interpretation of the agreement as granting to Lilly Canada the right to use the capsule appearance as a trade-mark does not follow from the wording of the agreement and its schedules.
I turn them to the submission that even if the agreement does not specifically provide for a licence to use the capsule appearance as a trade-mark, such a grant falls outside the agreement and the right to use was granted to Lilly Canada by oral agreement. With respect to this argument consideration must be given to section 13.2:
| This Agreement constitutes the definitive agreement of the parties on the subject matter hereof ... This Agreement shall not be modified or amended except by a written document signed by a duly authorized officer of the parties. There are no oral agreements, warranties, representations, or understandings affecting this Agreement and all previous or other negotiations, representations, and understandings between Lilly and Lilly Canada are merged herein. |
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(underlining added)
In the light of this provision, I cannot accept counsel's interpretation that there is scope for an oral agreement to operate with respect to the use of the capsule appearance as a trade-mark outside the terms of the written agreement.. The subject matter of the agreement, as appears from the recitals, is the "Lilly products" that are to be made or sold in Canada. One of these is Lilly's fluoxetine product. The agreement grants rights with respect to that product and with respect to other Lilly products, including the intellectual property rights related thereto listed in schedules A and B. As such any trade-mark rights that Lilly U.S. might have in the capsule appearance would be part of the subject matter covered by the agreement. It is not surprising that the right to use the capsule appearance as a trade-mark was not mentioned in the agreement. At the time of the signing of that agreement it is likely that it was thought that it was not possible for the capsule appearance to be a trade-mark. As noted above, the agreement was signed prior to the Ciba-Geigy decision and no express claim to a trade-mark in the capsule appearance was voiced publicly by Lilly before the third, if not the fourth, quarter of 1995.
Counsel for the plaintiffs argues that even in the absence of licensing pursuant to section 50 of the Trade-marks Act, Lilly Canada's use would enure to the benefit of Lilly U.S. because they are related companies that operate as a single business unit. This argument is based on Good Humor Corporation v. Good Humor Food Products, [1937] Ex.C.R. 61, and Gray Rocks Inn Ltd. v. Snowy Eagle Ski Club Inc. (1971), 3 C.P.R. (2d) 9 (F.C.T.D.). Counsel for the defendants cites [1930] S.C.R. 307">Robert Crean and Company Limited v. Dobbs and Company, [1930] S.C.R. 307, Dubiner v. Cheerio Toys and Games, [1965] 1 Ex. C.R. 524, and Chalet Bar B-Q (Canada) Inc. et al. v. Foodcorp Ltd., 66 C.P.R. (2d) 56 (F.C.A.). These are cited to support the conclusion that trade-mark ownership is strictly construed and that in the circumstances of the present case Lilly U.S. can have no trade-mark ownership rights in the capsule appearance in Canada and therefore the claim as pleaded must fail.
There is no doubt that Lilly U.S. controlled Lilly Canada's use of the capsule appearance and directed it to use the green and cream and green and grey capsules. It controlled as well the fluoxetine product that would be marketed in those capsules. This does not, however, mean that direction was given to use the capsule appearance as a trade-mark. For example, I draw an analogy to a situation in which a parent company might direct a subsidiary to use a certain type of cardboard container, having a certain strength and configuration, for the shipment of product. Even if the parent directed such use and provided information concerning how to construct the containers that would not mean that the use by the subsidiary was as a trade-mark.
I am aware, as well, that the correctness of the decisions in the Good Humor and Gray Rocks cases have been questioned.17 Regardless of the respective merits of the Good Humor and Chalet Bar-B-Q positions, a more fundamental difficulty exists with counsel for the plaintiffs' argument: the submission was only raised at the very last moment in argument. The pleadings do not assert reliance on Lilly Canada's unlicensed use as the basis for rights accruing to Lilly U.S. The evidence that was adduced, while it asserts that Lilly Canada is a wholly-owned subsidiary of Lilly U.S., lacks details of the shareholding and structure of the intermediary companies. The evidence has not been directed to the argument that is now made and I do not think that either the pleadings or the evidence can support the conclusion that I am asked to draw.
Counsel for the plaintiffs argues that regardless of the terms of the 1991 agreement, licensing can be found because the stock bottles that were provided to the pharmacists carry a notice that Lilly Canada is a licensed user of Lilly U.S. trade-marks.18 Such an argument can only prevail if the contrary is not proven. The agreements that have been produced in evidence support a contrary conclusion with respect to the capsule appearance. The use that was authorized and directed was not use as a trade-mark.
It is argued that, in any event, subsection 50(1) operates so that once a licence was granted in November 1995, to Lilly Canada, to use the capsule appearance as a trade-mark that licence operates to deem Lilly Canada's prior use to be that of Lilly U.S. Section 50 was proclaimed in force on June 9, 1993.19 The wording relied upon is: "... if an entity is licensed ..., then the use ... of the trade-mark ... by that entity has, and is deemed always to have had, the same effect as such a use ... by the owner" (emphasis added). Subsection 50(1) must be read in the light of the pre-existing registered user provisions that it replaced.
Originally, trade-mark rights could not be conveyed to another in the absence of the goodwill of the business also being conveyed. To do so would deceive the public as to the source of the goods and destroy the trade-mark. This was modified in 1954 by the inclusion of registered user provisions in the Trade-marks Act. The right to use a trade-mark by another would not destroy the owners rights if the use was licensed by the owner and that license was registered. Difficulties still existed under this system. Licences could be granted but there might be neglect or delay in registering them. In that context section 50 was enacted. The deeming provisions thereof cure the situation in which a licence existed but had not been registered. The provision does not deem use prior to the granting of a licence to be use that enures to the benefit of the owner.
As noted above, counsel for the defendants makes two additional arguments based on the arrangements between Lilly Canada and PMS: the "licensing" to PMS is not a licence but a distribution agreement and the use of the capsule appearance to signify both a Lilly source and a PMS source destroys any distinctiveness that might have existed. I do not propose to consider these arguments in detail. The facts are set out above. I note only that for the first argument counsel for the defendants relies upon: Eli Lilly & Co. v. Apotex Inc. (1996), 66 C.P.R. (3d) 329 (F.C.A.); Eli Lilly & Co. v. Novopharm Ltd. (1996), 67 C.P.R. (3d) 377 (F.C.A.); Merck Frosst Canada Inc. v. Canada (Minister of National health and Welfare) (1996), 67 C.P.R. (3d) 455 (F.C.A.); Nu-Pharm Inc. v. The Minister of National health and Welfare, unreported, February 19, 1997, Court File No. A-466-95 (F.C.A.). The first two cases are now on appeal to the Supreme Court.
With respect to the argument that the use of the capsule appearance to signify both a Lilly source and a PMS source destroys distinctiveness, that conclusion seems obvious and inescapable. I draw, in my own mind, an analogy to a situation in which the Coca-Cola Company might license R.C. Cola to use the distinctively shaped coke bottle, filled with Coca Cola, but carrying the source designation R.C. Cola. Confusion as to source in the market place would be created even though the licensing was publicized.20 The analogy I have set out is not one that is found in the evidence. It is one I have devised for the purpose of illustration only. It seems to me that the use of the capsule appearance in association with two different trade source designations, by definition, creates lack of distinctiveness. On this simple fact alone the plaintiffs' claim must fail.
b) Subsection 7(b) of the Trade-marks Act
While the statements of claim in these actions assert reliance on subsection 7(d) of the Trade-marks Act, as well as 7(b), and on the common law tort of passing off, only the 7(b) claim was pursued in oral argument. Subsection 7(b) provides:
| (b) direct public attention to his wares, services or business in such a way as to cause or be likely to cause confusion in Canada, at the time he commenced so to direct attention to them, between his wares, services or business and the wares, services or business of another; |
|
Wording similar to the present subsection 7(b) has been part of federal law since 1932. That wording has been interpreted as constituting a codification of the common law tort of passing off, with the exception that proof of intent to misrepresent was not required21 (This is no longer a requirement of the common law tort either.) The statutory codification that exists in 7(b) is of course subject to the constitutional limitation that it relates to the rounding out of Parliament's jurisdiction over registered and unregistered marks.22 Common law passing off may not be confined to misrepresentations conveyed through the use of trade-marks, although that is its main field of application.23
In Ciba-Geigy v. Apotex, two expressions of the elements of passing-off were set out. The first was the five-part test found in Erven Warnink B.V. v. J. Townend & Sons (Hull) Ltd., [1980] R.P.C. 31 (H.L.). The second was the three-part test from Reckitt & Colman Products Ltd. v. Borden Inc., [1990] 1 All E.R. 873 (H.L.).24 Under either expression, to succeed in a passing off action, the plaintiffs must prove a misrepresentation by the defendants to prospective customers or ultimate consumers. In the early case of Perry v. Truefitt,25 quoted in Reckitt & Colman Products Ltd. v. Borden Inc. and Others, [1990] R.P.C. 341 at 416 - 417 (H.L.), The Court stated:
| ... if a customer asks for a tin or black shoe polish without specifying any brand and is offered the product of A which he mistakenly believes to be that of B, he may be confused as to what he has got but he has not been deceived into getting it. Misrepresentation has played no part in his purchase. |
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In Ayerst, McKenna & Harrison Inc. v. Apotex Inc. (1983), 72 C.P.R. 57 at 66 (Ont. C.A.), it was said:
| To succeed in a passing-off action, the plaintiff must first establish that his goods are known and have acquired a reputation by reason of that distinguishing feature. Secondly, the plaintiff must show that the defendant passed-off his goods for those of the plaintiff, i.e. that the trademark [used by the defendant] is specifically designed to encourage the consumer to purchase the goods of the defendant believing that they are those of the plaintiff. |
|
(underlining added)
The appearance of the defendants' capsules does not operate to lead a customer to request the products of the defendants rather than those of the plaintiffs. The capsule appearance is not used in the market place as an identifier by reference to which the consumer chooses one brand of fluoxetine rather than another. The defendants choose to use the same capsule colours as the plaintiffs, and they do so for a marketing reason but that reason is to identify the medicine as one that is therapeutically equivalent to the defendants' product, not to represent to the public that their products are the plaintiffs. Misrepresentation can exist without an intention to misrepresent. However, as noted above, in this case not only was there no intention to misrepresent but the capsule appearance does not in fact play such role.
In a passing off action the plaintiff must prove goodwill in its trade-mark or get-up, see Reckitt & Colman Products Ltd. v. Borden Inc., (supra). Goodwill arises from the fact that the trade-mark or get-up is associated in the mind of the purchasing public with the plaintiff's goods, or with one trade source or provenance, whether or not the public can identify that source of provenance. The test is explained in Parke, Davis & Co. v. Empire Laboratories Ltd.26 re-affirmed by the Supreme Court of Canada in Oxford Pendaflex v. Korr Marketing Ltd.27:
| As to the immediate issue here, some guidance is to be found in the comment by Russell L.J. in Roche Products Ltd. et al v. Berk Pharmaceutical Ltd., [1973] R.P.C. 473 at p. 482: |
|
| Now, in this as in all other passing off cases the basic question is whether, directly or indirectly, the manner in which the goods of the defendant are presented to the relevant consumers in such as to convey to the minds of the latter the impression that they are the goods of the plaintiff. In an "appearance" or get-up case it is not enough simply to say that the former are very like the latter. It must be established that consumers have, by reason of the appearance of the goods of the plaintiff, come to regard them as having some one trade source or provenance, whether manufacturing or marketing, though it matters not that they have no idea at all of the identity of that trade source or provenance. |
|
| There is in that standard no need for the plaintiff to take the next and difficult step of showing that the customer must have known or believed that the only source of the product was the plaintiff. The Roche rule is but a refinement or detailed application of the general requirement for success in a passing-off action as pronounced by Cozens-Hardy M.R. in J.B. Williams Co. v. H. Bronnley & Co. Ltd. (1909), 26 R.P.C. 765 at p. 771: |
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| What is it necessary for a trader who is plaintiff in a passing-off action to establish? It seems to me that in the first place he must, in order to succeed, establish that he has selected a peculiar - a novel - a design as a distinguishing feature of his goods, and that his goods are known in the market, and have acquired a reputation in the market, by reason of that distinguishing feature, and that unless he establishes that, the very foundation of his case fails. |
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I cannot conclude on the facts set out above that the plaintiffs have proven that the capsule appearance has acquired the requisite reputation in the market place as a distinguishing feature of the plaintiffs' product.
I turn, then, to another difficulty the plaintiffs have in this case. Even if it is assumed that the capsule appearance is operating as an identifier of trade source or provenance by reference to which consumers choose the defendants' products and that the plaintiff's capsule appearance has acquired the requisite reputation in the market place, the plaintiffs must still demonstrate that a likelihood of confusion arises from the defendants' use of a capsule appearance similar to that used by the plaintiff.
In the Asbjorn decision, Mr. Justice MacGuigan held that there must be some evidence adequate to support a finding of likelihood of confusion and that a plaintiff was not required to show that there was a likelihood of confusion in more than half the sales.28 What degree of likelihood of confusion will support a passing off claim varies with the particular facts of each case.29
In the present case there has been no evidence of actual confusion. It is trite law that the likelihood of confusion does not require proof of actual confusion. There is no evidence to suggest that doctors, nurses or pharmacists would be confused as a result of the defendants marketing their products in the same capsule colours as the plaintiff. Indeed some prefer that this occur. The patients who were called as witnesses were not confused. The McIntyre interviewees, when given an opportunity to examine the capsules, in close proximity, a situation approximating that in which a customer would first see the medication after purchase, were not confused.
Consumers who have never been prescribed fluoxetine before and who have never taken the plaintiff's product will not be confused because it is unlikely they will have seen the capsule appearance. The evidence does not support a finding that the distribution of sample packs to patients undercuts the above finding.
Many of the consumers who have taken the plaintiffs' product and are filling a new prescription, or are obtaining a refill of an existing prescription, will associate the capsule appearance with the character of the medicine and not its trade source or provenance. Those consumers will not be confused by the defendants' products being of similar appearance to that of the plaintiff.
The evidence shows that in general patients are unaware and are not greatly concerned about the brand of prescription medicines they consume. Most are aware that generic brands exist, which are lower in cost than the originator's brand, and that pharmacists dispense generics on an interchangeable basis. Among consumers who associate the capsule appearance with a trade source, either together with, or independently of an association to the character of the medicine, are those who will not care about the brand that is dispensed to them. They will not be confused.
Those customers who care about the brand of fluoxetine they receive, or if their physician has a concern, may obtain a "no substitution" prescription. There will be no confusion if they do so. Those who do not obtain a "no substitution" prescription can ask the pharmacist to dispense the brand they prefer. There will be no confusion for those individuals. It is reasonable to assume that customers who do not express a brand preference, in fact, do not have any.
Customers who do not request a particular brand but nevertheless expect to receive one can be alerted to the identity of the particular brand they have received by the receipt given at the time of purchase, the labelling on the vial, the markings on each capsule, or by the price differential when the change is from an innovator's brand to a generic. While some of these indicia, the designation of manufacturer on the receipt and on the vial label, would only be effective notice if the customer had been schooled to look for them, it is highly probable that when a customer has been receiving the plaintiff's Prozac and a pharmacist is going to dispense a different brand, the pharmacist will inform the customer of the dispensing change.
I cannot conclude that the plaintiffs have proven, on the balance of probabilities, that the defendants' sale of fluoxetine in capsules having a similar appearance to those of the plaintiff would result in any significant likelihood of confusion.
c) Jurisprudence Respecting the Appearance of Prescription Medicines
A number of decisions dealing with the appearance of prescription medicines were cited. I have some concern about relying too heavily on decisions from other jurisdictions where the prescribing, dispensing and marketing practices may be different. None of the decisions, excluding those decided by courts in the United States, were made after a full trial on the merits.30 Two deal with the registrability of the appearance of a capsule or tablet; the rest are mainly decisions on interlocutory injunction applications.
The two dealing with the registration of a capsule or pill appearance are Smith, Kline and French Laboratories Ltd. v. Sterling-Winthrop Group Ltd., [1976] R.P.C. 511 (H.L.), and Smith Kline French v. Registrar of Trade-marks, [1987] 2 F.C. 633 (T.D.). The first held that registration of a capsule appearance could not be refused merely because the "mark" extended to the whole visible surface of the good. One half of the capsule in question was opaque and coloured, the other half was transparent and colourless; the capsule was filled with multi-colours pellets. The second decision held that while registration might be refused for a mark that was based on colour alone, such would not be the case where registration of the whole appearance of the capsule (size, shape and colour) was sought.
Among the other decisions, (I will consider the United States decisions separately) there are only two that resulted in an interlocutory injunction being granted without successful challenge. One of these was Hoffman-LaRoche v. D.D.S.A. Pharmaceuticals Limited, [1969] F.S.R. 410 (C.A.) affirming [1969] F.S.R. 391 (Pennycuick J.). The decision in that case relied on affidavit evidence that a green and black capsule that the plaintiff used for their chlordiazepoxide (Librium) was highly distinctive, that there was a likelihood of confusion in respect of repeat orders for the drug by patients who had previously been receiving the plaintiff's Librium if the defendant entered the market using the same colour capsules. A contrary decision was reached in this Court with respect to the same capsules and drug: see Hoffman-LaRoche Ltd. v. Rocke-William Cie, Ltee (1970), 62 C.P.R. 233 (Exct. Ct.). Mr. Justice Dumoulin held that the form and colour get-up of the capsules were not significance in the sale of prescription medicines.
In a subsequent decision rendered four years later, by the Court of Appeal of the High Court of Justice, it was held that an interlocutory injunction would not be granted to restrain the sale of yellow and white tablets of the drug diazepam, sold under the brand name Valium. The Court held that the very ordinary appearance of the white and yellow tablets had not led the consuming public to attribute them to one trade source or provenance, and without such attribution the defendant's copying could not constitute a representation that the defendant's products were those of the plaintiff rather than being merely a representation that the medicines were the same: Roche Products Ltd. v. Berk Pharmaceutical, [1973] R.P.C. 473 (C.A.), affirming [1973] R.P.C. 461.
The other case in which an interlocutory injunction was granted is Hoffman-LaRoche Ltd. v. Novopharm (1980), 51 C.P.R. (2d) 40 (Ont. H.C.J.). A contrary decision, with respect to the same drug and the same capsule appearance was rendered in Hoffman-LaRoche Ltd. v. Apotex Inc. (1982), 72 C.P.R. (2d) 183 (Ont. H.C.J.).
A number of factors enter into a decision to grant or withhold an interlocutory injunction. Among the cases cited are some in which an interlocutory injunction was refused because irreparable harm had not been shown. Damages were held to be an adequate remedy; see, for example, Boots Co. Ltd. v. Approved Prescription Services Ltd., [1988] F.S.R. 45 (C.A.); Syntex Inc. v. Novopharm Ltd. (1991), 36 C.P.R. (3d) 129 (F.C.A.); Searle Canada Inc. v. Novopharm Ltd. (1994), 56 C.P.R. (3d) 213 (F.C.A.). In others an interlocutory injunction was refused because physicians and pharmacists would not be confused by similarly coloured prescription medicines; see, for example, Smith, Kline & French Ltd. v. Novopharm Ltd. (1983), 72 C.P.R. (2d) 197 (Ont. H.C.J.) (to the extent the view of patients were relevant their evidence was inconclusive); Syntex Inc. v. Novopharm Ltd. (1983), 74 C.P.R. (2d) 110 (Ont. H.C.J.). Interlocutory injunctions were refused on the ground that the plaintiff had not proven that the capsule or tablet appearance indicated a single trade source or provenance. In Hoffman-LaRoche Ltd. v. Apotex Inc. (1982), 72 C.P.R. (2d) 183 (Ont. H.C.J.) it was stated that the colours would indicate to the patient or consumer not a single trade source but the characteristics of the medication. In Syntex Inc. v. Novopharm Ltd. (1983) supra it was noted that patients identify the trade dress of the tablet or capsule with the kind of medication and not a single trade source. In John Wyeth Ltd. v. M. & A. Pharmchem Ltd., [1988] F.S.R. 26 (High Ct - Ch. Div.), it was held that the plaintiff had not made out an arguable case that the format of the pill was recognized by patients as indicating a particular source of manufacture; the two differently coloured capsules were used to indicate specific dosages not a manufacturing source. In Ayerst, McKenna & Harrison Inc. v. Apotex Inc. (1983), 72 C.P.R. (2d) 57 (Ont. C.A.), as noted in Ciba Geigy Canada Ltd. v. Novopharm Ltd. (1992), 44 C.P.R. (3d) 289 (S.C.), the trial court's decision was set aside because the trial judge had conducted himself in way that gave rise to a reasonable apprehension of bias.
Several decisions by Untied States courts were cited: Boehringer Ingelheim G.m.b.H. v. Pharmadyne Laboratories et al. (1980), 211 USPQ 1163 (Dist. Ct. N.J.); Ciba-Geigy v. Bolar Pharmaceutical Co., Inc. (1984), 224 USPQ 349 (Court of Appeals, Third Circuit); McNeill-PPC v. Granutec Inc., 37 USPQ 2d 1713 (E.D.N.C. 1995); Qualitex Co. v. Jacobson Products Co. (1995), 34 USPQ 2d 1161 (U.S. Sup. Ct.). Those decisions indicate that under some State unfair competition laws, at least, a manufacturer is prevented from using the same capsule appearance as that used by another. On the other hand, Qualitex Company v. Jacobson Products Company, Inc. (1995), 34 U.S.P.Q. (2d) 1161 (U.S.S.C.), a decision that did not relate to prescription medicines, held that while colour alone could constitute a trade-mark, the functionality doctrine would protect competitors against a disadvantage (unrelated to recognition or reputation) that trade-mark protection might otherwise impose, namely their inability reasonably to replicate important non-reputation - related product features. An example given of when this might be the case was, the copying of the colour of medical pill where the colour served to identify the type of medication in addition to its source.
Lastly, another non-pharmaceutical case but one relating to the get-up of a health product was cited. In Hodgkinson & Corby Limited v. Wards Mobility Services Limited, [1995] F.S.R. 169 (H.C.J. - Ch. Div.), a passing off claim was brought to prevent the selling of a cushion that had a distinctive appearance. It was described as odd looking, even ugly, clearly striking to the eye and memorable. It was known by the trade-mark Roho. The defendant sought to sell a "lookalike" product under the trade-mark Flo' Tair. The decision contains a spirited explanation of the difficulties any plaintiff will face in demonstrating that the "get-up" of a product is associated in the minds of purchasers with source rather than the product's characteristics. The Court also emphasised that there was no tort of copying and that absent misrepresentation, copying was a perfectly acceptable way of engaging in competition.
While the jurisprudence set out above mainly relates to interlocutory injunction applications, the overall direction it has taken is not dissimilar to the conclusions I have reached in this case after a full trial of issues.
Conclusion
It is apparent from the reasons given above that the plaintiffs' claims must be dismissed. The relevant orders will be placed on each file.
OTTAWA, Ontario.
April 25, 1997.
Judge
INDEX
Fluoxetine Hydrochloride - A Breakthrough Drug 3
Agreements Respecting the Sale of Prozac in Canada and
Bringing a Lilly Generic to Market 4
a) January 1991 Agreement - Between Lilly Canada and Lilly U.S. 4
b) June 30, 1995 Agreement - Between Lilly Canada and PMS 5
c) November 1995 Amendment to January 1991 Agreement 5
d) November 10, 1995 Amendment to June 30, 1995 Agreement -
PMS-Fluoxetine Becomes Available 6
Interlocutory Injunctions 7
Ciba-Geigy - October 29, 1992 7
Marketing of Prescription Medicines - Particularly Prozac 9
Prescribing Medicines - Particularly Prozac 10
Purchasing from Pharmaceutical Companies 11
Dispensing and Sale of Prescription Drugs - Particularly Prozac 13
a) Labelling 14
b) Counselling - Notice 14
c) Substitution Laws - Provincial Formularies 18
d) Patient Requests 19
Quality of Generics and the Innovator's Products (Prozac and the PMS Generic) 20
Placebo Effect 24
Choice of Capsule Appearance - Assertion of a Trade-mark in the Appearance 25
Capsule Differences 26
From the Consumer's Perspective 27
a) Relevant Market 27
b) Survey Evidence 30
c) Patients 37
Physicians - Lack of Credibility 41
Public Policy Considerations 44
Comments on the Evidence 46
Legal Arguments and Analysis 55
a) Unlicensed Use (1989 - 1995) and the Marketing of PMS-Fluoxetine 55
b) Subsection 7(b) of the Trade-marks Act 61
c) Jurisprudence Respecting the Appearance of Prescription Medicines 67
Conclusion 72
__________________
1. A-382-96, A-383-96, A-384-96, September 25, 1996.
2. At 304.
3. Ibid.
4. At 310.
5. At 312.
6. See also, however, Qualitex Co. v. Jacobson Products Co. (1995), 34 USPQ 2d 1161 at 1165 (U.S. Sup. Ct.).
7. Regulation 936, Prescription Drug Cost Regulation Act, O. Reg. 684/91. The sign reads:
When dispensing your prescription your pharmacist may select an alternate brand of the same drug where permitted by Ontario law.
You have the right to request an interchangeable product. (Bold face)
Ask your pharmacist if a lower priced drug is being used to dispense your prescription.
Please feel free to consult your pharmacist about your prescription.
8. See, for example, Drug Interchangeability and Dispensing Fee Act (formerly Prescription Drug Cost Regulation Act), R.S.O. 1990, c. P-23 as amended, Pharmacists, Pharmacy Operations and Drug Scheduling Act, 1993, c - 62, S.B.C. 1993, c. 62 as amended; The Pharmaceutical Act, S.M. 1991 - 92, c. 28, as amended..
9. See, particularly, paragraphs 25 - 27 of Dr. Spino's affidavit.
10. General principles respecting the admissibility of survey evidence can be found in R. v. Prairie Schooner New (1970), 75 W.W.R. 585, 1 C.C.C. (2d) 251 (Man. C.A.). Particular reference to its use in trade-mark cases can be found in Cartier Inc. v. Cartier Optical Ltd./Lunettes Cartier Ltée (1988), 20 C.P.R. (3d) 68 (F.C.T.D.) and in Cordon Bleu International Ltée v. F.C. Bradley Co. Ltd. (1979), 60 C.P.R. (2d) 71 (Que. S.C.).
11. See Dr. Liefeld's affidavit, dated October 15, 1996, Appendix B, esp. pp. 11 - 13 (articles 5.3 - 5.4) and pp. 17 - 24 (articles 5.8 - 5.8.3.2) for the discussion of various possible test procedures.
12. See Sopinka, Lederman, Bryant, The Law of Evidence in Canada (1992), Butterworths, at pp. 523 - 526.
13. A useful description of expert evidence is found in Von Doussa, Difficulties of Assessing Expert Evidence, (1987) 61 Aust. L.J. 615. See also B. McLachlin, The Role of the Expert Witness , (1990) 14 Prov. Judges J. 27 for a discussion of the role of experts.
14. Transcript pp. 5542 - 5556.
15. See, for example, Transcript p. 5290.
16. Buttrum v. Udell , [1925] 3 D.L.R. 45 (Ont. C.A.), Re Scamen v. Canadian Northern Railway Company (1912), 6 D.L.R. 142 (Alta. S.C. en banc), [1958] S.C.R. 377">Fagnan v. Ure, [1958] S.C.R. 377, Hamilton v. Brusnyk (1960), 28 D.L.R. (2d) 600 (Alta. S.C.), R. v. Morin, [1991] O.J. No. 2528, B.C. Pea Growers Ltd. v. City of Portage La Prairie (1963), 43 D.L.R. (2d) 713 (Man. Q.B.).
17. Chalet Bar B-Q (Canada) Inc. et al. v. Foodcorp Ltd., 66 C.P.R. 56 (F.C.A.).
18. (2) -For the purposes of this Act, to the extent that public notice is given of the fact that the use of a trade-mark is a licensed use and of the identity of the owner, it shall be presumed, unless the contrary is proven, that the use is licensed by the owner of the trade-mark and the character or quality of the wares or services is under the control of the owner.
19. S.C. 1993, c. 15, proclaimed in force June 9/93.
20. A discussion of relevant authorities with respect to invalidity as a result of improper licensing is found in Henderson (ed), Trade Mark Law of Canada, chapter 12, D.E. Clarke, On Trade-marks Becoming Invalid, esp. at 329 - 331.
21. Coca-Cola v. Bernard Beverages (1948), 8 Fox Pat. Cas. 194 (Ex. Ct.); Westfair Foods Ltd. v. Jim Pattison Industries Ltd. (1990), 30 C.P.R. (3d) 174 (B.C.C.A.) at 179 - 180.
22. Asbjorn Horgard A/S v. Gibbs/Nortac Industries Ltd. (1987), 14 C.P.R. 314 (F.C.A.); Dumont Vins & Spiritueux Inc. v. Celliers du Monde Inc. (1992), 42 C.P.R. (3d) 198 (F.C.A.).
23. Waldow, The Law of Passing Off (1990) at 2.
24. First, he must establish a goodwill or reputation attached to the goods or services which he supplies in the mind of the purchasing public by association with the identifying "get up" (whether it consists simply of a brand name or a trade description, or the individual features or labelling or packaging) under which his particular goods or services are offered to the public, such that the get-up is recognized by the public as distinctive specifically of the plaintiff's goods or services. cont'd ... ... cont'd
Second, he must demonstrate a misrepresentation by the defendant to the public (whether or not intentional) leading or likely to lead the public to believe that goods or services offered by him are the goods or services of the plaintiff.
Third, he must demonstrate that he suffers or, in quia timet action, that he is likely to suffer damage by reason of the erroneous belief engendered by the defendant's misrepresentation that the source of the defendant's goods or services is the same as the source of those offered by the plaintiff. (underlining added)
25. (1842), 49 E.R. 749.
26. (1964), 45 D.L.R. (2d) 97 at p. 103, 43 C.P.R. 1 at pp. 9-10, [1964] S.C.R. 351">[1964] S.C.R. 351 at p. 358, 27 Fox Pat. C. 67.
27. Oxford Pendaflex Canada Ltd. v. Korr Marketing Ltd. et al. (1982), 64 C.P.R. (2d) 1 (S.C.C.) at 7.
28. At p. 330 - 331.
29. Henderson (ed.), Trade-marks Law of Canada, chapter 8, R.S. Jolliffe, The Common Law Doctrine of Passing Off, esp. at 217 - 218.
30. Ayerst, McKenna & Harrison Inc. v. Apotex Inc. (1983), 72 C.P.R. (2d) 57 (Ont. C.A.) set aside a decision that had been made at trial.
STYLE OF CAUSE:ELI LILLY AND COMPANY ET AL v. NOVOPHARM LIMITED
STYLE OF CAUSE: ELI LILLY AND COMPANY ET AL v. NU-PHARM INC.
FILE NO.: ELI LILLY AND COMPANY ET AL v. APOTEX INC.
DATE OF HEARING: November 4-8, 12, 21-22, 25, 27-29, December 2, 4-6, 9-13, 1996 January 6-10, 15-17,20-24, 27-31, March 3-5, 1997
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