Date: 20110414
Docket: A-439-10
Citation: 2011 FCA 134
CORAM: EVANS
J.A.
DAWSON J.A.
STRATAS
J.A.
BETWEEN:
APOTEX INC., and
APOTEX PHARMACHEM INC.
Appellants
(Defendants)
and
ALLERGAN, INC. and
ALLERGAN SALES, LLC.
and
ALLERGAN USA, INC. and
KYORIN PHARMACEUTICAL
CO., LTD
Respondents
(Plaintiffs)
REASONS FOR JUDGMENT
DAWSON J.A.
[1] The appellants (together Apotex) appeal from an
interlocutory order of a judge of the Federal Court which dismissed a motion
brought by Apotex for an order striking out the statement of claim filed by the
respondents to this appeal. On this appeal, Apotex submits that the Judge of
the Federal Court erred when he declined to strike out the pleading as
disclosing no cause of action, because the statement of claim improperly
consisted of bald or speculative pleas of patent infringement and because the
plea regarding its intended future actions falls short of the required standard
when pleading a quia timet action.
[2] As
the Judge recognized in his order, the test to be applied when considering
whether a pleading should be struck is a stringent one. A defendant must
establish that it is plain and obvious and beyond doubt that the claim cannot
succeed (Hunt v. Carey Canada Inc., [1990] 2 S.C.R. 959 at
page 980). The pleading is to be read as generously as possible (Operation
Dismantle Inc. v. Canada, [1985] 1 S.C.R. 441 at paragraph 14). On a
motion to strike, the facts alleged in a pleading should generally be assumed
to be true (Hunt at page 980). Where, as in this case, the motion to
strike is based upon the ground that the pleading discloses no cause of action,
no evidence should be received (Rule 221(2) of the Federal Courts Rules).
[3] On
an appeal from an order disposing of a motion to strike a pleading, some
deference is owed to the underlying decision. In Apotex Inc. v. Canada (Governor
in Council), 2007 FCA 374, 370 N.R. 336, at paragraph 15, this Court
described the test to be applied in the following terms:
The respondents correctly point out that the decision to
grant or refuse a motion to strike is a discretionary one. When the lower court
judge has made a discretionary decision, it will usually be afforded
deference by the appellate court. However, the latter will be entitled to
substitute the lower court judge’s discretion for its own if the appellate
court clearly determines that the lower court judge has given insufficient
weight to relevant factors or proceeded on a wrong principle of law: Elders Grain Co. v.
Ralph Misener (The), [2005] F.C.J. No. 612, 2005 FCA 139 at
paragraph 13. This Court may also overturn a discretionary decision of a
lower court where it is satisfied that the judge has seriously misapprehended
the facts, or where an obvious injustice would otherwise result: Mayne Pharma (Canada)
Inc. v. Aventis Pharma Inc., [2005] F.C.J. No. 215, 2005 FCA 50,
38 C.P.R. (4th) 1 at paragraph 9. [emphasis added]
[4] Turning
to the arguments advanced by Apotex, I agree that the mere fact that a
defendant pharmaceutical company has sought regulatory approval to market a
medicine does not by itself support an action for patent infringement. I also
agree that an allegation of past infringement made without any evidentiary
foundation is an abuse of process. See AstraZeneca Canada Inc. v. Novopharm
Ltd., 2010 FCA 112, 402 N.R. 95 at paragraph 5. In every case, what is
required is careful attention to the precise pleading before the Court.
[5] In
the present case the statement of claim, read with the additional particulars
volunteered by the plaintiffs, alleges that Apotex has infringed, is infringing
and will continue to infringe Canadian Patent 1,340,316 (a patent that covers
the compound gatifloxacin). It is alleged that since 2007 one or other of the
appellants has infringed the relevant patent by actions which include the
following:
·
Purchasing
and importing bulk gatifloxacin for both commercial and regulatory purposes.
·
Stockpiling
bulk gatifloxacin for both commercial and regulatory purposes.
·
Formulating
bulk gatifloxacin into gatifloxacin ophthalmic solution, 0.3% for both
commercial and regulatory purposes.
[6] It
is further alleged that the appellants have infringed the relevant patent by:
·
Formulating,
processing, manufacturing and sterilizing 100 litre and 1000 litre batches of
gatifloxacin ophthalmic solution, 0.3%.
·
Manufacturing,
using, storing and packaging gatifloxacin ophthalmic solution, 0.3% in 5 mL
fill bottles containing caps and droppers for commercial sale.
·
Stockpiling
in Canada for commercial purposes gatifloxacin ophthalmic solution, 0.3% in 5
mL fill bottles for commercial sale to the United States.
·
Preparing
and affixing labels to gatifloxacin ophthalmic solution, 0.3% 5 mL fill bottles
for commercial sale to the United States.
·
Selling
and intending to sell gatifloxacin ophthalmic solution, 0.3% to Apotex Corp.
for commercial purposes.
·
Offering,
with Apotex Corp., to sell gatifloxacin ophthalmic solution, 0.3% to customers
in the United
States
in October or November 2010.
[7] The
statement of claim also alleges that an abbreviated new drug application filed
by Apotex with the United States Food and Drug Administration indicates that
Apotex has made and used gatifloxacin ophthalmic solution at its Richmond
Hill
manufacturing site and that it has, and intends to have, gatifloxacin
manufactured in India by Apotex Pharmachem India Pvt. Ltd.
[8] The
Judge concluded that the pleading alleged sufficient material facts by which
Apotex is alleged to have infringed the relevant patent. In my view this
conclusion was reasonably open to the Judge on this pleading. The statement of
claim was, in my view, saved by the additional particulars which go beyond
pleading generalities and conclusions of infringement. Apotex has not
demonstrated that the Judge proceeded on a wrong principle of law or otherwise
erred in a manner that would warrant this Court’s intervention.
[9] Apotex
also argues that, even if the allegations are true, its conduct is protected by
the common law “experimentation use” exception to infringement and by
subsections 55.2(1) and (6) of the Patent Act, R.S.C. 1985, c. P-4.
However, the existence of even a strong defence to a claim does not justify an
order striking the claim (Hunt, cited above, at page 980).
[10] In
so concluding I have considered the argument of Apotex that the Judge failed to
appreciate that the only paragraphs of the statement of claim pleading facts
relating to infringement are the paragraphs that allege facts that “plainly
fall within the well accepted ‘experimental use’ exception to infringement.” I
have also considered its reliance upon Eli Lilly Canada Inc. v. Nu-Pharm,
2011 FC 255.
[11] With
respect to the “experimental use” exception and section 55.2 of the Patent
Act, when read with the particulars the statement of claim alleges facts
that fall well beyond the scope of experimental or regulatory activity. Those
allegations include allegations that Apotex has stockpiled bulk gatifloxacin
for both commercial and regulatory purposes, stockpiled gatifloxacin ophthalmic
solution, 0.3% for commercial purposes and both sold and, with Apotex Corp.,
offered to sell to customers gatifloxacin ophthalmic solution, 0.3% in October
or November 2010.
[12] In
the Eli Lilly decision relied upon by Apotex, the Federal Court struck
the statement of claim. Apotex argues that the allegations considered by the
Federal Court in Eli Lilly are indistinguishable from those in the claim
in issue. On the facts before it, the Federal Court did not find it necessary
to require Nu-Pharm to “put forward s. 55.2(1) as a defence in a properly-filed
Statement of Defence.” See paragraph 29 of the reasons. However, in Eli
Lilly the Federal Court also found, at paragraph 28, that:
In the Statement of Claim before me, there is absolutely
nothing pleaded that is not part of the regulatory requirements for the
preparation and filing of an ANDS. Without something pleaded beyond the
regulatory requirements, s. 52.2(1) [sic] of the Patent Act applies.
Moreover, we have the clear, sworn statements of Mr. Benyak that Nu-Pharm
has not done (or caused to be done) anything other than meet the requirements
of the applicable regulatory scheme. The attempts of the Plaintiffs to
characterize the actions of Nu-Pharm (or an unidentified third party) as
something beyond meeting regulatory requirements are speculative, at best.
[emphasis added]
[13] This
case is distinguishable from the present case because the statement of claim
now before the Court alleges facts, which must be presumed to be true for the
purpose of this motion, that fall beyond the scope of regulatory activity. Eli
Lilly is also distinguishable because there is no evidence before the Court
similar to the Benyak evidence that was before the Federal Court in Eli
Lilly.
[14] Finally,
Apotex argues that the allegations with respect to its future intent fall short
of meeting the required standard for pleading a quia timet action.
Again, I agree that a quia timet action must be based on more than mere
possibilities (AstraZeneca cited above at paragraphs 6 and 7). However,
I respectfully reject the characterization of the pleading at issue as a quia
timet action. As Justice Hughes observed at paragraph 19 of his reasons in AstraZeneca
Canada Inc. v. Novopharm Ltd., 2009 FC 1209, 359 F.T.R. 279, aff’d
2010 FCA 112, “[a]n action taken on the basis of anticipation has been called a
quia timet (because one fears) action.” In the present case, the
impugned pleading is not based merely upon the fear of future infringement. The
claims of past and continuing infringement support the claim of future
continuing infringement.
[15] For
these reasons, I would dismiss the appeal with costs.
“Eleanor R. Dawson”
“I agree
John M. Evans J.A.”
“I agree
David Stratas J.A.”
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