Date: 20070926
Docket: T-762-06
Citation: 2007 FC 964
Ottawa, Ontario, September 26,
2007
PRESENT: The Honourable Mr. Justice O'Keefe
BETWEEN:
BAYER HEALTHCARE AG and
BAYER INC.
Plaintiffs
Defendants by Counterclaim
and
SANDOZ
CANADA INCORPORATED
Defendant
Plaintiff by Counterclaim
REASONS FOR ORDER AND ORDER
O’KEEFE J.
[1]
This
is an appeal by the defendant, Sandoz Canada Incorporated (Sandoz) of an order
of Prothonotary Lafrenière dated March 19, 2007 (the order) which granted a
motion brought by the plaintiffs, Bayer Healthcare AG and Bayer Inc. (Bayer),
to strike paragraphs 24, 25, 26 and 27 of Sandoz’s statement of defence.
[2]
Sandoz
has alleged that Canadian Patent 1,282,006 (the ‘006 Patent”) is invalid on a
number of grounds. Sandoz alleged at paragraphs 24 to 27 of the statement of
defence that certain claims are broader than the invention disclosed. In making
this submission, Sandoz relied on statements from an inventor made during the
course of the prosecution of a U.S. patent application.
[3]
Paragraphs
24 to 27 of the statement of defence read:
24. Claims 1, 2, 3, 4, 5, 6, 8, 9,
11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 24, 25, 26, 27, 28, 29, 30, 31, 32,
33, 34, 35, 36 and 27 of the ‘006 Patent cover infusion solutions containing 1
mol lactic acid to 1 mol of ciprofloxacin (hereinafter “1:1 Molar Claims”).
Claims covering infusion solutions containing 1 mol of lactic acid to 1 mol of
ciprofloxacin (“equimolar”) or less than 1 mol of lactic acid to 1 mol of
ciprofloxacin (“subequimolar”) are broader than the invention made or
disclosed.
25. In a declaration dated April
18, 1989, the named inventor Peter Serno stated that the invention did not
relate to solutions having a equimolar or subequimolar ratio of ciprofloxacin
to lactic acid:
5. I am familiar with
the article of Gert Höffken et al., Pharmacokinetics of Ciprofloxacin after
Oral and Parenteral Administration published in Antimicrobial Agents And
Chemotherapy, March 1985, p. 375-379; and that
. . .
7. Due to the results
of those tests I have to draw the following conclusions:
Höffken describes solutions of
ciprofloxacin lactate in a physiological sodium chloride solution. The molar
ratio of ciprofloxacin to lactic acid is thus 1.
The ciprofloxacin lactate
concentration in Höffken’s solutions is already close to the solubility limit
at room temperature. Thus in repeated attempts to prepare formulations those
obtained are in some cases still clear but in other cases already display
cloudiness, depending on the batches of ciprofloxacin and lactic acid employed
and other limiting conditions (Table 1).
It was surprising and could
not be predicted by the skilled man that the solubility problems which were
also inherent in the Höffken solutions could be eliminated by adding an excess
of a physiologically tolerated acid.”
26. In addition, as of the date of
the April 18, 1989 declaration, the named inventors only had demonstrated that
a molar ratio of 1.33:1 (mol of lactic acid: mol of ciprofloxacin) provided the
stable solution. Accordingly, claims 7, 10, 22 and 23 which include within
their scope molar ratios of less than 1.33:1 are also broader than the
invention made or disclosed.
27. As a result, the 1:1 Molar
Claims and claims 7, 10, 22 and 23 are broader than the invention made by the
named inventors.
[4]
The
standard of review to be applied to discretionary orders of a prothonotary was
stated by the Federal Court of Appeal in Merck & Co. et al. v. Apotex
Inc. (2003), 30 C.P.R. (4th) 40 at paragraphs 17 to 20:
17.
This Court, in Canada v. Aqua-Gem Investments Ltd.,
[1993] 2 F.C. 425 (F.C.A.), set out the standard of review to be applied to
discretionary orders of prothonotaries in the following terms:
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Following in particular Lord Wright in Evans
v. Bartlam, [1937] A.C. 473 (H.L.) at page 484, and Lacourcière J.A.
in Stoicevski v. Casement (1983), 43 O.R. (2d) 436 (Div. Ct.),
discretionary orders of prothonotaries ought not to be disturbed on appeal to
a judge unless:
(a) they are clearly wrong, in the
sense that the exercise of discretion by the prothonary was based upon a
wrong principle or upon a misapprehension of the facts, or
(b) they raise questions vital to the
final issue of the case.
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Where such discretionary orders are
clearly wrong in that the prothonotary has fallen into error of law (a
concept in which I include a discretion based upon a wrong principle or upon
a misapprehension of the facts), or where they raise questions vital to the
final issue of the case, a judge ought to exercise his own discretion de
novo. [MacGuigan J.A., at pp. 462-463; footnote omitted.]
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18.
MacGuigan J.A. went on, at pp. 464-465, to explain that whether a question was
vital to the final issue of the case was to be determined without regard to the
actual answer given by the prothonotary:
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It seems to me that a decision which
can thus be either interlocutory or final depending on how it is decided,
even if interlocutory because of the result, must nevertheless be considered
vital to the final resolution of the case. Another way of putting the matter
would be to say that for the test as to relevance to the final issue of the
case, the issue to be decided should be looked to before the question is
answered by the prothonotary, whereas that as to whether it is interlocutory
or final (which is purely a pro forma matter) should be put after the
prothonotary's decision. Any other approach, is seems to me, would reduce the
more substantial question of "vital to the issue of the case" to
the merely procedural issue of interlocutory or final, and preserve all
interlocutory rulings from attack (except in relation to errors of law).
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This
is why, I suspect, he uses the words "they [being the orders] raise
questions vital to the final issue of the case", rather than "they
[being the orders] are vital to the final issue of the case". The emphasis
is put on the subject of the orders, not on their effect. In a case such as the
present one, the question to be asked is whether the proposed amendments are
vital in themselves, whether they be allowed or not. If they are vital, the
judge must exercise his or her discretion de novo.
19.
To avoid the confusion which we have seen from time to time arising from the
wording used by MacGuigan J.A., I think it is appropriate to slightly
reformulate the test for the standard of review. I will use the occasion to
reverse the sequence of the propositions as originally set out, for the
practical reason that a judge should logically determine first whether the
questions are vital to the final issue: it is only when they are not that the
judge effectively needs to engage in the process of determining whether the
orders are clearly wrong. The test would now read:
Discretionary
orders of prothonotaries ought not be disturbed on appeal to a judge unless:
a)
the questions raised in the motion arevital to the final issue of the case, or
b)
the orders are clearly wrong, in the sense that the exercise of discretion by
the prothonotary was based upon a wrong principle or upon a misapprehension of
the facts.
20.
With respect to the test to be applied by this Court on an appeal from a
judge's decision, the Supreme Court of Canada, in Z.I. Pompey Industrie
v. Ecu-Line N.V. (2003), 224 D.L.R. (4th) 577, held at para. 18 that the
Federal Court of Appeal may only interfere with the decision of the
applications judge where the judge "had no grounds to interfere with the
prothonotary's decision or, in the event such grounds existed, if [the judge's
decision] was arrived at on a wrong basis or was plainly wrong".
[5]
This
Court in Distrimedic Inc. v. Dispill Inc., [2006] F.C.J. No. 1532
(F.C.T.D.) and in Zambon Group S.P.A. v. Teva Pharmaceutical
Industries Ltd. (2005), 44 C.P.R. (4th) 173 (F.C.) stated that a decision
to strike certain paragraphs of a statement of defence and counterclaim is vital
to the final issue of the case. I agree and therefore, I must exercise my own
discretion de novo.
[6]
The
Prothonotary’s decision reads in part as follows:
The Defendant argues that statements made
during prosecution of corresponding patent applications in other countries may
be relevant to the issues of what the inventor had invented. This broad
proposition is not supported by any case law, and fails to take into account
the decision of the Supreme Court of Canada in Free World Trust v. Électro
Santé , 2000 S.C.C. 66, which held that patent file wrappers, including
representations by inventors, are not admissible in Canada to construe
patent claims. The Supreme Court of Canada recognized that there may be
circumstances where the prosecution history could be relevant, but only for
purposes other than defining the scope of the grant of the monopoly. Justice
Blais reached the same conclusion in Novartis AG v. Apotex Inc. (2001),
15 C.P.R. (4th) 417 at paragraphs 77 to 86.
The allegations in paragraphs 24 to 27 of
the Statement of Defence and Counterclaim are solely based on an inventor’s
declaration from the US File History. In considering the impugned paragraphs of
the Statement of Defence and Counterclaim and the proposed use of the
inventor’s statement therein, I conclude that such reliance contravenes the
clear direction from the Supreme Court of Canada in Free World Trust. I
am therefore satisfied that it is plain and obvious that paragraphs 24, 25, 26,
and 27 from the Statement of Defence and Counterclaim do not constitute a
reasonable defence, and should be struck.
THIS COURT ORDERS that:
1. Paragraphs 24, 25, 26, and 27
from the Statement of Defence and Counterclaim are hereby struck, with leave to
amend provided the amendment does not contravene the reasons for this Order.
2. The Defendant/Plaintiff by
Counterclaim shall serve and file its amended Statement of Defence and
Counterclaim within ten days of the issuance of this Order.
3. The Plaintiff/Defendant by
Counterclaim shall serve and file its Reply to Defence and Counterclaim within
ten days of service of the Defendant/Plaintiff by Counterclaim’s amended
Statement of Defence and Counterclaim.
4. Costs of this motion are fixed
in the amount of $1,000, and are awarded to the Plaintiffs/Defendants by
Counterclaim in any event of the cause.
[7]
General
Principles for Striking Pleadings
Rule 221(1)(a) of the Federal
Courts Rules, SOR/2004-283 states:
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221.(1) On motion, the Court may, at any 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,
. . .
and may order
the action be dismissed or judgment entered accordingly.
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221.(1)
À tout moment, la Cour peut, sur requête, ordonner la radiation de tout ou
partie d’un acte de procédure, avec ou sans autorisation de le modifier, au
motif, selon le cas:
a) qu’il ne
révèle aucune cause d’action ou de défense valable;
. . .
Elle
peut aussi ordonner que l’action soit rejetée ou qu’un jugement soit
enregistré en conséquence.
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[8]
It
is generally accepted that the test to strike out pleadings is whether it is
plain and obvious that the claim discloses no reasonable cause of action or in
this case, a defence (see Hunt v. Carey Canada Inc., [1990] 2
S.C.R. 959). In Eli Lily and Co. et al. v. Apotex Inc. (1998), 80
C.P.R. (3d) 86 (F.C.T.D.), Justice Richard stated at paragraph 10:
The Court will only strike pleadings in
plain and obvious cases where the case is beyond doubt (Canada (Attorney General) v. Inuit Tapirisat of
Canada, [1980] 2 S.C.R. 735; Operation Dismantle Inc. v. The
Queen, [1985] 1 S.C.R. 441; Hunt v. Carey Canada Inc., [1990]
2 S.C.R. 959).
[9]
In
this case, Sandoz relies on statements of the inventor made during the course
of the prosecution of an US patent application to show that certain
claims of the patent are broader than the invention disclosed.
[10]
According
to Hughes and Woodley on Patents, Second Edition (Markham, Ontario: LexisNexis,
2005), at paragraph 25:
2. The Disclosure
Subsection 27(3) of the Patent Act
lies at the heart of the whole patent system. The description of the invention
provided for therein is the quid pro quo for which the inventor is given
a monopoly for a limited term of years on the invention; it is to give to the
public adequate details as will enable a workman skilled in the art to which
the invention relates to construct or use that invention when the period of the
monopoly has expired. In essence what is called for in the specification
(including both disclosure and claims) is a description of the invention and
the method of producing and constructing it, coupled with a claim or claims
which state those novel features in which the applicant wants the exclusive
right; the specification must define the precise and exact extent of the
exclusive property and privilege claimed. The Act requires that an applicant
file a specification, including disclosure and claims, whereby everything that
is essential for the invention to function properly is disclosed. To be
complete it must meet two conditions: it must describe the invention and define
the way it is produced or built; and it must define the nature of the invention
and how to put it into operation. Failure to define the first would render the
application invalid for ambiguity; failure to meet the second renders it
invalid for insufficiency. The description must be full enough to enable a
person skilled in the art to produce the invention using only the disclosure in
the patent.
[11]
The
specification part of the patent must show and describe the invention and
define the way it is produced or built. As well, it must define the nature of
the invention and how to put it into operation.
[12]
Another part of the specification is the claims.
Subsection 27(4) of the Patent Act, R.S., c. P-4, states that a
specification “must end with a claim or claims defining distinctly and in
explicit terms the subject matter of the invention for which an exclusive
privilege or property is claimed”.
[13]
The
Supreme Court of Canada stated in Whirlpool Corp. v. Camco Inc.,
[2000] S.C.J. No. 68, at paragraphs 42 and 43 that:
42.
The content of a patent specification is regulated by s. 34 of the Patent Act.
The first part is a "disclosure" in which the patentee must describe
the invention "with sufficiently complete and accurate details as will
enable a workman, skilled in the art to which the invention relates, to
construct or use that invention when the period of the monopoly has
expired": Consolboard Inc. v. MacMillan Bloedel (Sask.) Ltd., [1981] 1
S.C.R. 504, at p. 517. The disclosure is the quid provided by the
inventor in exchange for the quo of a 17-year (now 20-year) monopoly on
the exploitation of the invention. The monopoly is enforceable by an array of statutory
and equitable remedies and it is therefore important for the public to know
what is prohibited and where they may safely go while the patent is still in
existence. The public notice function is performed by the claims that conclude
the specification and must state "distinctly and in explicit terms the
things or combinations that the applicant regards as new and in which he claims
an exclusive property or privilege" (s. 34(2))". An inventor is not
obliged to claim a monopoly on everything new, ingenious and useful disclosed
in the specification. The usual rule is that what is not claimed is considered
disclaimed.
43.
The first step in a patent suit is therefore to construe the claims. Claims
construction is antecedent to consideration of both validity and infringement
issues. The appellants' argument is that these two inquiries -- validity and
infringement -- are distinct, and that if the principles
of "purposive construction" derived from Catnic are
to be adopted at all, they should properly be confined to infringement issues
only. The principle of "purposive construction", they say,
has no role to play in the determination of validity, and its misapplication is
fatal to the judgment under appeal.
[14]
In
Free World Trust v. Électro Santé Inc. 2000 S.C.J. No. 67, the
Supreme Court of Canada stated at paragraphs 64, 65, 66 and 67:
64. The use of file
wrapper estoppel in Canada was emphatically rejected by Thorson P. in Lovell
Manufacturing Co. v. Beatty Bros. Ltd. (1962), 23 Fox Pat. C. 112 (Ex.
Ct.), and our Federal Court has in general confirmed over the years
the exclusion of file wrapper materials tendered for the purpose of construing
the claims: see, e.g., P.L.G. Research Ltd. v. Jannock Steel
Fabricating Co. (1991), 35 C.P.R. (3d) 346 (F.C.T.D.), at p. 349. No
distinction is drawn in this regard between cases involving allegations of
literal infringement and those involving substantive infringement.
65. Counsel for
Procter & Gamble Inc. argues that prosecutions history ought to be admissible
in some circumstances in the interest of obtaining consistent claims
interpretation here and in the United States, where many Canadian patents have
their origin. There is some nourishment for this proposition in commentary by
other experienced practitioners (e.g., D. W. Scott, "The Record of
Proceedings in the Patent Office in Canada & Foreign Countries as Evidence
in Infringement & Validity Contests" (1985-86), 2 C.I.P.R. 160).
References to the intention of the inventor in Catnic, supra, and
O'Hara, supra, are said to leave the door ajar to the possibility
of reconsideration.
66. In my view,
those references to the inventor's intention refer to an objective
manifestation of that intent in the patent claims, as interpreted by the person
skilled in the art, and do not contemplate extrinsic evidence such as
statements or admissions made in the course of patent prosecution. To allow
such extrinsic evidence for the purpose of defining the monopoly would
undermine the public notice function of the claims, and increase uncertainty as
well as fuelling the already overheated engines of patent litigation. The
current emphasis on purposive construction, which keeps the focus on the
language of the claims, seems also to be inconsistent with opening the pandora's
box of file wrapper estoppel. If significant representations are made to the
Patent Office touching the scope of the claims, the Patent Office should
insist where necessary on an amendment to the claims to reflect the
representation.
67. This is not to
suggest that prosecution history can never be relevant for a purpose other than
defining the scope of the grant of the monopoly: Foseco Trading A.G. v. Canadian
Ferro Hot Metal Specialties, Ltd. (1991), 36 C.P.R. (3d) 35 (F.C.T.D.), at
p. 47. That point does not arise in this case for decision and lies outside the
scope of these reasons.
[15]
The
Court also stated in Free World Trust at paragraph 31:
31. The appeal thus
raises the fundamental issue of how best to resolve the tension between "literal
infringement" and "substantive infringement" to achieve a fair
and predictable result. There has been considerable discussion of this issue in
Canada and elsewhere, which I will discuss briefly in support of the following
propositions:
(a) The Patent Act promotes adherence to
the language of the claims.
(b) Adherence to the language of the
claims in turn promotes both fairness and predictability.
(c) The claim language must, however, be
read in an informed and purposive way.
(d) The language of the claims thus
construed defines the monopoly. There is no recourse to such vague notions as
the "spirit of the invention" to expand it further.
(e) The claims language will, on a
purposive construction, show that some elements of the claimed invention are
essential while others are non-essential. The identification of elements as
essential or non-essential is made:
(i) on the basis of the
common knowledge of the worker skilled in the art to which the patent
relates;
(ii) as of the date the patent
is published;
(iii) having regard to whether
or not it was obvious to the skilled reader at the time the patent was
published that a variant of a particular element would not make a
difference to the way in which the invention works; or
(iv) according to the intent of
the inventor, expressed or inferred from the claims, that a particular
element is essential irrespective of its practical effect;
(v) without, however, resort
to extrinsic evidence of the inventor's intention.
(f) There is no infringement if an
essential element is different or omitted. There may still be infringement,
however, if non-essential elements are substituted or omitted.
[16]
Accordingly,
it would appear that the jurisprudence does not allow the use of the type of
extrinsic evidence referred to by Sandoz in the impugned paragraphs of the
statement of defence.
[17]
It
seems to be that the specification of the patent must be construed in the
manner described by the Supreme Court of Canada to determine whether the claims
are broader than the invention disclosed. The invention disclosed can be
determined in this case by reference to the description and the monopoly sought
by construing the claims.
[18]
Based
on the above, I am of the view that the Prothonotary was correct when he struck
paragraphs 24, 25, 26 and 27 of the statement of defence. As stated by Justice
Richard in Eli Lily and Co. et al. above at paragraph 10: “The Court
will only strike pleadings in plain and obvious cases where the case is beyond
doubt . . .”. I am of the opinion this is such a case; the extrinsic evidence
on which the paragraphs rely is not admissible under Canadian patent law. There
would be useful purpose to keep these paragraphs in the statement of defence.
[19]
The
order of Prothontary Lafrenière is upheld and the Sandoz’s appeal is dismissed.
[20]
The
parties shall have ten days from the date of this decision to make written
submissions on costs and a further ten days for any reply.
[21]
Sandoz
shall have fourteen days from the date of this decision to file a twice amended
statement of defence and counterclaim.
[22]
Bayer
shall have fourteen days from the date of serving of the twice amended
statement of defence and counterclaim to serve its reply to the amended defence
and counterclaim.
JUDGMENT
[23]
IT
IS ORDERED that:
1. The order of
Prothontary Lafrenière is upheld and Sandoz’s appeal is dismissed.
2. The parties shall
have ten days from the date of this decision to make written submissions on
costs and a further ten days for any reply.
3. Sandoz shall have
fourteen days from the date of this decision to file a twice amended statement
of defence and counterclaim.
4. Bayer shall have
fourteen days from the date of serving of the twice amended statement of
defence and counterclaim to serve its reply to the amended defence and
counterclaim.
“John
A. O’Keefe”
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