Date: 20070810
Docket: T-2113-06
Citation: 2007 FC 833
Toronto, Ontario, August 10, 2007
PRESENT: Kevin R. Aalto, Esquire, Prothonotary
BETWEEN:
GLAXOSMITHKLINE BIOLOGICALS
S.A.
Plaintiff
(Moving Party)
and
NOVARTIS VACCINES AND DIAGNOSTICS, INC.
Defendant
REASONS FOR ORDER AND ORDER
[1]
This
is a motion to strike out the Defendant’s Counterclaim without leave to amend
and to strike out paragraph 7 of the Statement of Defence without leave to
amend.
Background
[2]
The
Plaintiff (GSK), commenced this action on December 4, 2006 pursuant to s. 60 of
the Patent Act to impeach Canadian Patent No. 2,017,507 (507 Patent)
which is owned by the Defendant (Novartis).
[3]
GSK
seeks a declaration that the 507 Patent is invalid. The 507 Patent discloses
an adjuvant for use in vaccines. The 507 Patent expires May 24, 2010. GSK
bases its allegation of invalidity by reason of lack of novelty, obviousness,
lack of utility, claims broader than the invention made or disclosed, and
ambiguity and/or indefiniteness.
[4]
As
described in the Statement of Claim, the 507 Patent “relates generally to
vaccine adjuvants comprising a metabolizable oil and an emulsifying agent, with
or without a separate immunostimulating agent, in which the oil and the
emulsifying agent are present in the form of an oil-in-water emulsion having
oil droplets substantially all of which are less than one micron in diameter,
and in which there is no polyoxypropylene-polyoxyethylene block co-polymer”.
[5]
GSK
pleads in its Statement of Claim that it wishes to sell in Canada a vaccine containing an
adjuvant comprising the same elements as the 507 Patent (the GSK Adjuvants).
GSK further pleads that the GSK Adjuvants might be alleged by Novartis to
constitute an infringement of some or all of the 507 Patent.
[6]
In
paragraph 7 of its Statement of Defence, Novartis pleads, inter alia,
that “GSK intends to manufacture,
import, distribute, use, offer for sale and sell in Canada Adjuvants”.
Novartis alleges that “making, importing, distributing, using, offering for
sale, or selling of the GSK Adjuvants” is an infringement of the claims of the
507 Patent.
[7]
In
its Counterclaim, Novartis seeks a declaration that the 507 Patent “will be
infringed” by the GSK Adjuvants and seek, inter alia, an injunction
restraining GSK from manufacturing, distributing, offering for sale, selling,
licensing, or otherwise making available or using in Canada the GSK Adjuvants.
Throughout the Counterclaim, Novartis uses speculative language to describe the
conduct of GSK. Novartis pleads that GSK is “proposing” to sell etc.,
“intends” to sell, “intends” to use”, and ”intends to formulate” the GSK
Adjuvants.
[8]
Novartis
concludes that by virtue of “proposing” and “intending” to sell etc., GSK “has
or will make an unlawful profit” and that Novartis “has or will suffer loss or
damage”. Novartis specifically pleads that the extent of GSK’s infringing
activities is unknown to Novartis.
Issue
[9]
Neither
in paragraph 7 of the Statement of Defence nor anywhere in the Counterclaim are
any material facts pleaded in support of the allegations of possible
infringement by GSK of the 507 Patent. These pleadings are entirely
speculative.
[10]
The
Novartis counterclaim and paragraph 7 of the Statement of Defence are based
entirely on a quia timet action. Quia timet translated from the
latin means “because one fears”. To obtain relief on a quia timet basis there
must be a real or impending threat (see, Dukelow, The Dictionary of Canadian
Law, Thomson Carswell [3d ed.] at p. 1055).
Thus, the issue to be determined is whether Novartis has pleaded a reasonable
cause of action to salvage the Counterclaim and paragraph 7 of the Statement of
Claim from being struck.
Discussion
[11]
The
Court may strike out a pleading that discloses no reasonable cause of action.
Rule 221(1)(a)of the Federal Courts Rules provides:
221(1) On motion, the Court may, at any given
time, order that a pleading,
or anything contained therein, be struck out, with or without leave to amend,
on the ground that it
(a)
discloses no reasonable cause of action or defence as the case may be . . .
[12]
It
is trite law that a pleading will not be struck unless it is “plain and
obvious” that the pleading discloses no reasonable cause of action (see, for example,
Hunt v. Carey, [1990] 2 S.C.R. 959 at
par. 18). Further, the material facts as pleaded must be accepted as true.
The pleadings under attack are quia timet pleadings. A quia timet
proceeding can allege patent infringement. A summary of the test to be applied
as to whether a quia timet proceeding is properly pleaded is set out by Justice
Gibson in Connaught Laboratories Ltd. v. SmithKline Beecham
Pharma Ltd. (1998), 86 C.P.R. (3d) 36 at p. 42:
From
the forgoing authorities, I derive the following criteria for allegations that
must be evident on the face of a statement of claim initiating a quia timet
proceeding alleging patent infringement: the statement of claim must allege a
deliberate expressed intention to engage in activity the result of which would
raise a strong possibility of infringement; the activity to be engaged in must
be alleged to be imminent and the resulting damage to the plaintiff must be
alleged to very substantial if not irreparable; and, finally, the facts pleaded
must be cogent, precise and material. It is not sufficient that they be
indefinite or speak only of intention or amount to mere speculation. (Emphasis
added)
[13]
Applying
this test to the pleadings in this proceeding, it is plain and obvious that no
reasonable cause of action has been pleaded and both paragraph 7 of the
Statement of Defence and the Counterclaim must be struck out. The pleading
speaks only to GSK “intending” or “proposing” to manufacture, formulate, use or
sell. The allegations fail to support a quia timet action for
infringement.
[14]
As
noted by Justice Reed in Faulding (Canada) Inc. v. Pharmacia S.p.A. (1998),
82 C.P.R. (3d) 435 at p. 439:
Claims
for infringement that are premised on indefinite acts in the future are in the
realm of speculation. As such they are premature and should be struck out.
[citations omitted] Similarly, pleas founded on the “intention of a party to do
certain acts are improper and will be struck [citations omitted]
[15]
Novartis
argues that the pleadings are sufficient to support a quia timet case
of patent infringement and that the pleading complies with the test for a quia
timet proceeding for patent infringement. They argue that there is no
basis for GSK bringing this action now to declare the 507 Patent invalid as it
expires in less than three years. They argue that the only possible conclusion
is that GSK plans to sell the GSK Adjuvant imminently and well before the 507
Patent expires. This is an entirely speculative argument. There are no
material facts pleaded of how imminent such activity of GSK is nor any other
material fact other than mere possibility of infringing acts. None of the
authorities cited by the Novartis assist their cause. Material facts may come
to the attention of Novartis which may support a quia timet action for
patent infringement. There are none presently pleaded.
[16]
Further,
the Counterclaim and paragraph 7 should not be used as a weapon to permit
Novartis to get to discovery and “bootstrap their claim“ and use the discovery
process improperly as a fishing expedition (see Justice Rothstein’s comments in
Merck & Co. v. Apotex Inc.(1997), 72 C.P.R. (3d) 515 at p.
516).
[17]
In
the result, both paragraph 7 of the Statement of Defence and the Counterclaim
are struck out without leave to amend. However, I echo the words of Justice Gibson
in Connaught, supra, at p.
43 wherein it is noted:
“None
of my conclusions herein should be read as in any sense foreclosing a further
action by Connaught, even on a quia timet basis, if more significant
evidence of an expressed intention on the part of SKB to imminently market its
vaccine in Canada, with a strong resultant probability of infringement of
Connaught’s patent, can be pleaded.”
Similarly, if more
cogent evidence of a real and imminent intention by GSK to infringe that meets
the test for a quia timet patent infringement action surfaces, then
Novartis may take such steps as it is advised to pursue such a claim. The
current pleading in par. 7 and the counterclaim are insufficient. One may well speculate
why GSK seeks to declare the
506 Patent invalid when there is only 3 years to go on the patent. However, at
this juncture the Novartis quia timet pleadings in par. 7 of the Statement
of Defence and the Counterclaim are only speculation.
[18]
As
GSK has been successful on this motion they are entitled to their costs.
Counsel for the parties submitted that $2,000.00 was an appropriate amount.
ORDER
THIS COURT ORDERS that:
1.
The Counterclaim is hereby struck out without leave to amend.
2.
Paragraph 7 of the Statement of Defence is struck out without leave to
amend.
3.
This action shall continue as a specially managed proceeding.
4.
The Plaintiff is entitled to its costs of this motion which are fixed in
the amount of $2,000.00 and are payable forthwith.
“Kevin
R. Aalto”
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