Recent Decisions August 2007
I. FEDERAL COURT DECISIONS
(a) Patents
1. Pfizer and Warner-Lambert v. The Minister of Health and Ranbaxy et al., May 2, 2007 FCTD (Tabib P.) Motion to Dismiss/ Abuse of Process/ Section 6(5)(b)/ Jurisdiction of Prothonotary/ Patented Medicines (Notice of Compliance) Regulations
Motion by Ranbaxy to dismiss Pfizer’s application pursuant to s. 6(5)(b) of the Regulations. Pfizer holds several patents listed on the Register against the drug atorvastatin calcium. The patent at issue ("Patent") claims crystalline Form VII. Ranbaxy alleged that its proposed product would not infringe the Patent as it would neither make, use, construct or sell the crystalline form. Ranbaxy developed two processes for making its product both of which produce, as a final product, an amorphous form of atorvastatin calcium. The second process would produce crystalline Form VII as an intermediate. However, only the first process had been filed as part of Ranbaxy’s ANDS. Pfizer submitted that Ranbaxy has formed an intention to file for a change of process in favour of the second process once the NOC is issued. Ranbaxy argued that all the evidence shows is that they have “not closed the door” to such an eventuality. Ranbaxy submitted that its NOA must be read as limiting its allegation of non-infringement to the processes and data contained in its submission to Health Canada. Pfizer also argued that a prothonotary does not have the jurisdiction to hear and determine a motion under s. 6(5)(b) as it is not “a motion under the Federal Court Rules”. Pfizer relies on recent case law as supporting the proposition that prothonotaries have no jurisdiction to make any final disposition of any applications or appeals.
Held: Motion dismissed. A prothonotary has the jurisdiction to hear and determine s. 6(5)(b) motions; the case law cited by Pfizer does not overrule this proposition. A motion pursuant to s. 6(5)(b) of the Regulations is a motion under the Federal Court Rules; it is not a motion for summary judgment and r. 50(1) applies to confer jurisdiction upon prothonotaries to hear and determine same. The standard to be applied on a 6(5)(b) motion is whether it is “plain and obvious” that the application is redundant, scandalous, frivolous, vexatious or an abuse of process. This standard has not been met. It does not necessarily follow from the proposition that a NOA is part of a submission that the converse must also be true, i.e. that the submission be deemed to be part of the NOA. On the facts of this case, Ranbaxy’s allegation of non-infringement does not specifically refer to the process on file with Health Canada as defining its allegations.
2. Abbott Laboratories et al. v. The Minister of Health and Apotex, May 16, 2007 FCA (Desjardins, Noël, Nadon JJ.A.) Appeal/ Prohibition Order/ Eligible Claim/ Construction/Intermediate Use of the Medicine/ Statutory Stay Period/ Jurisdiction of Court of Appeal/ Patented Medicines (Notice of Compliance) Regulations
Appeal by Abbott from a decision dismissing an application to prohibit the Minister from issuing an NOC to Apotex in respect of Abbott’s '361 patent (“Patent”) on the basis that the relevant claim of the Patent was not an eligible claim. Apotex intends to market a generic version of Abbott’s clarithromycin. Several of Abbott’s patents, including the Patent, cover clarithromycin compounds and three of its crystalline forms (Form 0, Form I and Form II). The monopoly the Patent pertains to is the use of Form 0 to make Form II by way of heating at high temperatures. The proposed generic version seeks to replicate this process. The Applications Judge held that Form 0, as it is used in the Patent, acts as an intermediate, not as a medicine, and thus claim 31 of the Patent was not eligible under the Regulations as it is not a claim for the use of a medicine. Abbott submitted that claim 31, properly construed, is a claim for the use of a medicine. Abbott argued that had the phrase “for use as an antibiotic” not been disregarded by the Applications Judge, an eligible use would have been found. Further, claim 31 should be read with claim 30, which is identical to claim 31 but for the fact that the concluding words “for use as an antibiotic” are omitted. Abbott also submitted that should they be successful on the issue of eligibility, the Court should also address and dispose of the issue of validity and issue an order prohibiting the Minister from issuing the NOC sought by Apotex. It would be inappropriate to send the matter back to the Federal Court given that the statutory stay period has expired. Apotex objected, contending that the Court of Appeal has no more jurisdiction than the Federal Court to issue a prohibition order once the statutory stay period has expired.
Held: Appeal dismissed. An application for prohibition comes to a final end after the 24-month period has expired. Since more than 24 months have passed since the filing of Abbott’s application for a prohibition order, and since the order extending this period expired on December 30, 2006, the Court of Appeal, like the Federal Court, no longer has the jurisdiction to issue the order sought by Abbott. Nevertheless, the Court addressed the merits of the appeal. The Applications Judge committed no error in reaching the conclusion that claim 31 is ineligible under the Regulations and did not ignore the words “for use as an antibiotic” in construing claim 31. On a plain reading of claim 31, it makes a claim to a use of a substance (Form 0) in the preparation of another substance (Form II). Form II has no other use than as an antibiotic. The words “for use as an antibiotic” do not add anything to the invention claimed. Nadon J.A. concurred with the conclusion that claim 31 of the Patent was not a claim for the use of a medicine, but did not agree that the Court of Appeal lacks jurisdiction to issue the order sought by Abbott.
3. Pfizer v. Apotex and The Minister of Health, May 16, 2007 FCA (Sexton, Sharlow, Malone JJ.A.) Appeal/Prohibition Order/Sound Prediction/New Compound/Patented Medicines (Notice of Compliance) Regulations
Appeal from a decision dismissing Pfizer's application for an order prohibiting the Minister from issuing an NOC to Apotex for sildenafil until after the expiry of its '748 patent ("Patent"). Pfizer argued that (1) the Judge misinterpreted the NOA, leading him to reach a conclusion on the utility of the Patent that was not raised in the NOA, (2) the doctrine of sound prediction does not apply to a claim for a new compound, and (3) the Judge made a palpable and overriding error in finding no evidence that sildenafil was a potent and selective cGMP PDE inhibitor.
Held: Appeal dismissed. The Judge did not make an error in his interpretation of the NOA as it did allege that the compounds of the Patent including sildenafil had not been "shown, or soundly predicted, to be potent and selective cGMP PDE inhibitors". The doctrine of sound prediction does apply to a claim for a new compound as addressed in Apotex v. Welcome. The Judge made no palpable and overriding error in finding no evidence that sildenafil was a potent and selective cGMP PDE inhibitor.
4. Sanofi-Aventis v. The Minister of Health, May 24, 2007 FCTD (Lemieux J.) Issue Estoppel/ Parties/ Finality/ Administrative Name Change/ Patent Register/ Patented Medicines (Notice of Compliance) Regulations
Application by Sanofi to quash the Minister's decision to delist its '682 patent ("Patent") for Clarofan as it had been improperly listed. In the same decision, the Minister refused to add the Patent back on the Register after receiving an ANDS from Sanofi for approving a manufacturer name change following a merger. The Patent was originally added to the Register in June 2000 following a previous merger when the practice was to list patents against an NOC including an administrative name change. Sanofi argued that the doctrine of issue estoppel bars the Minister from raising the issue of eligibility of the Patent for inclusion on the Register and that the question of whether the Patent was properly listed was res judicata between Sanofi and the Minister because the Patent was the subject of an earlier NOC proceeding between Aventis, Mayne and the Minister. In this earlier proceeding, the Court granted an order prohibiting the Minister from issuing an NOC to Mayne; this decision is currently under appeal, but adjourned until the current matter is resolved. Sanofi argued that in the earlier proceeding both Mayne and the Minister could have taken the position that the Patent was improperly included on the Register. Mayne did not take such a position and the Minister did not participate in the proceeding. The Minister argued that issue estoppel does not apply because deletion of the Patent from the Register and the refusal to add it afterwards was an administrative action taken by the Minister in the discharge of his regulatory duty to maintain the Registry. The Minister also argued that he could not have moved to dismiss under s. 6(5) because such a motion could only be made by a “second person”. The sole issue in this case was whether the doctrine of issue estoppel applies.
Held: Application dismissed. Sanofi has not established two of the three pre-conditions for the operation of issue estoppel. The parties to the Federal Court decision were not the same persons as the parties to the administrative proceeding. The parties to the Federal Court decision were Sanofi, the privy of Aventis-Pharma and Mayne. For the purpose of the operation of the doctrine of issue estoppel, the Minister was not a party to the first proceeding because there was no lis between the Minister and Aventis (first person) or Mayne (second person). Even if the Minister had participated in the earlier proceedings, he could not have made a motion under s. 6(5) to have the application dismissed on the grounds that the Patent was improperly listed. Mayne has an appeal pending before the Federal Court of Appeal, thus the previous decision is not final and it does not matter that the Minister has not appealed. A decision is not final for the purposes of issue estoppel where there is an appeal pending or until the appeal period has expired or leave to appeal has been denied.
5. Sanofi-Aventis v. Laboratoire Riva and The Minister of Health and Schering; Sanofi-Aventis v. Laboratoire Riva and the Minister of Health, May 28, 2007 FCTD (Harrington J.) Prohibition Order/ Invalidity/ Abuse of Process/ Patented Medicines (Notice of Compliance) Regulations
Two applications for orders prohibiting the Minister from issuing an NOC to Riva for Ramipril for the treatment of hypertension. Sanofi had four patents listed against Ramipril. Riva alleged invalidity of the '206 patent ("Patent"), including lack of sound prediction, and non-infringement of other "use" patents. Sanofi alleged that Riva infringed the Patent, that Riva's NOA was insufficiently detailed with respect to the three "use" patents and that Riva would induce others to infringe. Sanofi further argued that Riva was a privy of Pharmascience, which had unsuccessfully challenged validity of the Patent on grounds of double patenting in Aventis Pharma v. Pharmascience (2005 FC 340), and was therefore barred from relitigating the issue of validity. Riva denied that it was a privy of Pharmascience, and countered that it was an abuse of process for Sanofi to relitigate validity of the Patent as it had been successfully challenged by Apotex in Aventis Pharma v. Apotex (2006 FCA 64) [Apotex].
Held: Applications dismissed. Following the recent decision in Sanofi-Aventis v. Novopharm (2007 FCA 163) [Novopharm], it is an abuse of process within the meaning of the Regulations for a patent holder to relitigate allegations of invalidity against a generic if the allegation had been held to be well founded in an earlier proceeding against a different generic. However, given that an appeal to the SCC of the Novopharm decision is pending, the Court set out its reasons on the issues. Riva was not a privy of Pharmascience; a trade relationship is not enough to establish that two parties are privies. Riva was not barred from challenging the validity of the '206 patent. Although the Court in Apotex found that there was no sound basis for predicting the utility of the compounds of claim 12, the evidence in this case differed and the Court came to the opposite conclusion. Sanofi is barred from arguing that the allegation that the Patent is invalid for lack of sound prediction is not justified. Riva's NOAs were sufficiently detailed; Riva was not required to state that it would request limited interchangeability in provincial formularies. Mere presence of a drug on the market, without more, does not constitute infringement. Reference in the product monograph to contraindications or drug interactions does not constitute inducement to infringe. The remedy against infringing governments, physicians, pharmacists, and patients is to serve notice, not to prohibit the Minister from issuing an NOC.
6. Pfizer et al. v. The Minister of Health and Apotex, May 31, 2007 FCA (Linden, Nadon, Sexton JJ.A.) Appeal/ Prohibition Order/ Anticipation/ Obviousness/ Double Patenting/ Lack of Utility/ Sound Prediction/ Patented Medicines(Notice of Compliance) Regulations
Appeal from a decision dismissing Pfizer's application for an order prohibiting the Minister from issuing an NOC to Apotex for quinapril-hydrochloride. Heneghan J. dismissed the application, holding that the claims of the '330 patent were overly broad, and that there was no evidence that Apotex's product contained any quinapril-hydrochloride so as to infringe the '615 patent. With respect to the '615 patent Pfizer argued that Heneghan J. erred in failing to construe claim 1. With respect to the '330 patent, Pfizer argued that Heneghan J. misapplied the test for determining whether the claims were broader than the invention disclosed, and misconstrued the claims and/or disclosure. If the Judge erred in this respect, the Court must address the issue as to whether Pfizer's application should be upheld on the basis of Apotex's allegations of invalidity. Apotex argued that: 1) Heneghan J. was obligated to consider the obviousness of all compounds claimed in the '330 patent and not just quinapril-hydrochloride, 2) the '330 patent was anticipated by a patent filed before it and which gave rise to conflict proceedings, 3) Heneghan J. erred in considering the fact that the '615 patent was not involved in conflict proceedings as evidence of patently distinct subject matter in finding that the '330 patent was not invalid for double patenting, and 4) Heneghan J. erred in concluding the utility of the claimed compounds was soundly predicted as there was no evidence of testing.
Held: Appeal allowed. Heneghan J. erred in law by failing to construe claim 1 of the '615 patent; construction of a patent must precede a determination of infringement. Apotex infringes claim 1 of the '615 patent. The '330 patent did not claim more than what was invented. Heneghan J. erred in treating as determinative the question of whether or not an invention or parts thereof are optimal as this is not relevant to whether claims are overly broad. Heneghan J. also erred in failing to recognize that patents for chemical compounds regularly claim all stereoisomers, and in failing to consider the overwhelming evidence which indicated that all stereoisomers fell within the scope of the invention. The Trial Judge did not commit a reviewable error in her application of the legal test for obviousness. Although the Trial Judge only referred to the obviousness of quinapril hydrochloride, the compounds covered by the invention are closely related to one another and the evidence does not provide any reason to conclude that the other compounds would have been more obvious than quinapril-hydrochloride. There is no fault in the Judge's conclusion that Apotex's allegation of invalidity for anticipation had not been put "in play" as Apotex did not adduce evidence showing that the patent in conflicting proceedings was filed before the '330 patent. With regard to double patenting, it was reasonable to rely on the fact that the '615 patent had not been involved in the conflict proceedings and that the Commissioner had suggested filing the '615 patent as a divisional application. Heneghan J. did not err in finding that there was a factual basis to predict the utility of the invention disclosed in the '330 patent. Testing is not an absolute requirement for a patent based on sound prediction, especially when there is considerable evidence of utility for related compounds.
7. Eli Lilly v. Novopharm and The Minister of Health et al., June 5, 2007 FCTD (Hughes J.) Application for Prohibition/ Abuse of Process/ Withdrawal of NOA/ Insufficiency/ Selection Patent/ Section 27(3)/ Section 53/ Patent Act/ Patented Medicines (Notice of Compliance) Regulations
Application by Lilly for an order prohibiting the Minister from issuing an NOC to Novopharm in respect of olanzapine until after the expiry of Lilly's '113 patent ("Patent"). As a preliminary issue, Lilly argued that Novopharm's NOA is an abuse of process given that Novopharm had served Lilly an earlier NOA which it subsequently withdrew before court proceedings began. Lilly argued that the present NOA is identical to the earlier one in that the only issue is the validity of the Patent. Novopharm argued that withdrawal of an NOA and subsequent provision of a new NOA is the only way a generic can amend its NOA given that no amendments can be made directly to an NOA. In a recently decided proceeding (Lilly v. Apotex) regarding the same patent and applicant, Gauthier J. granted an order of prohibition and held that allegations made by Apotex regarding invalidity of the Patent were not justified. With respect to its allegation of invalidity, Novopharm raised two issues beyond that considered by Gauthier J., namely, sufficiency and utility. In the present proceeding, Novopharm argued that the specification of the Patent fails to clearly set out the invention in full, clear and concise terms so as to enable a skilled person to make, construct, or use the invention. Novopharm argued that the dog study referred to in the Patent was flawed and certain pieces of information but not others were inserted into the descriptive portion of the Patent. Novopharm also argued that Lilly included the flawed study or failed to give all relevant information with the intention to mislead pursuant to s. 53 of the Patent Act.
Held: Application dismissed. There is no abuse of process. NOC proceedings offer no practical way to amend an NOA apart from withdrawing the application. Once the Court is seized of the matter at a hearing of its merits, only then has the generic lost its possibility of furnishing a new NOA directed to the issue of validity unless a new matter not previously discoverable has arisen. This case deals with a different generic (second person) attacking the validity of a patent recently held to be valid in other NOC proceedings involving a different generic. A different generic is not precluded from alleging invalidity of the patent on better evidence or more appropriate legal argument. The Court must review the evidence and argument in this case and compare it only with the evidence and argument presented through the reasons of Gauthier J. to determine if there is better evidence or a more appropriate argument. The Patent fails to provide sufficient disclosure in selecting olanzapine from a previously disclosed group of compounds. Lilly has not provided a clear and explicit disclosure as to what the invention is in the properties of olanzapine alone that merit a further monopoly in a separate patent. The question of sufficiency of disclosure with regard to selection patents has particular importance. The invention lies in the determination that a compound possesses a previously undisclosed advantage and that advantage must be stated in the specification. The prior art patents say that the whole class of compounds is useful in treating central nervous disorders. No data was given in the Patent to support the contention that olanzapine has "surprising and unexpected" properties in "comparison with flumezapine and other related compounds". The only comparator data was the dog study, in which the comparison was to ethyl olanzapine, not to flumezapine. Novopharm's allegations as to Lilly's intent to mislead are not justified.
8. Novopharm v. Janssen-Ortho and Daiichi Pharmaceuticals, June 7, 2007 FCA (Sharlow, Nadon, Malone JJ.A.) Appeal/ Indicia of Obviousness/ Secondary Indicia/ Patented Medicines (Notice of Compliance) Regulations
Appeal by Novopharm from a judgment declaring claim 4 of Daiichi’s ‘080 patent to be valid. Novopharm argued that the construction of claim 4 adopted by Hughes J. improperly read in a purity claim for S(-)ofloxacin. Regarding obviousness, Novopharm's main arguments were that Hughes J. erred in: 1) ignoring evidence that prior art methods had been used to produce the claimed invention in 1982; 2) failing to find that a process in the specification was copied from a 1985 poster and disregarding the poster as not mainstream or commonplace; 3) the weight he gave to “motivation” in the test; and 4) applying a requirement for “predictability with certainty” to the determination.
Held: Appeal dismissed. Hughes J.'s construction of claim 4 is supported by the relevant expert evidence. Although Daiichi did use known techniques to resolve the enantiomers in 1982, Hughes J. was free to conclude that the first isolation of sufficiently pure levofloxacin did not occur until 1985. The 1985 poster was not disregarded; there was no basis for concluding that a person of ordinary skill in the art with knowledge of the poster would have made the same connections as Daiichi's inventor. Hughes J. did not make a palpable and overriding error in finding that Daiichi was the only party motivated to obtain levofloxacin from ofloxacin during the relevant period. Regarding predictability, it was open to conclude that a person of ordinary skill would know that enantiomers possess properties different from the racemate, but not be able to predict the degree of difference. In the context of the entire factual picture relevant to obviousness, this conclusion did not change the test for obviousness. The Court listed the following factors proposed by Hughes J. as helpful tools to guide the factual inquiry for obviousness: 1) the invention, 2) the hypothetical skilled person, 3) the body of knowledge of the person of ordinary skill in the art, 4) the climate in the relevant field at the time the alleged invention was made, 5) the existing motivation to solve a recognized problem at the time, and 6) the time and effort involved. Secondary indicia of commercial success and meritorious awards may be relevant but generally bear less weight. “Subsequently recognized advantages” should be given no weight except in the most extraordinary case.
9. Pfizer v. The Minister of Health and Apotex and Sanofi-Aventis, June 15, 2007 FCTD (Phelan J.) Insufficiency of NOA/ Undertaking/ Intended Use/ Patented Medicines (Notice of Compliance) Regulations
Application by Pfizer for an order declaring that Apotex’s NOA with respect to quinapril is insufficient for the purposes of granting an NOC, since Apotex's undertaking contained in the NOA not to use the product for a particular purpose is not part of the NOA. In the alternative, Pfizer sought an order prohibiting the Minister from issuing an NOC to Apotex until after expiry of Pfizer’s ‘089 patent (“Patent”). Pfizer's marketed product containing quinapril is approved in Canada for the treatment of hypertension and congestive heart failure. The Patent is directed to the use of quinapril for treatment of cardiac and vascular hypertrophy and hyperplasia, a use which has not received regulatory approval. Apotex's NOA alleges that it would not infringe the Patent as it would not use Apo-Quinapril for the patented use, and would only use it to treat hypertension. However, Apotex's draft product monograph and labels referred to the intended use for hypertension and congestive heart failure. Congestive heart failure is a common ailment whereas cardiac hypertrophy is rare. Cardiac hypertrophy may, but not necessarily, co-exist with congestive heart failure. Pfizer argued that (1) Apotex’s NOA is insufficient because of the inconsistency between Apotex’s NOA letter and the draft product monograph and labels and (2) Apotex will be marketing Apo-Quinapril to treat congestive heart failure which will treat cardiac hypertrophy in some cases because of the close relationship between the two conditions.
Held: Application dismissed. Apotex’s NOA is not insufficient or otherwise inadequate, as it provided Pfizer with sufficient information to decide to contest the NOA. Any NOC to be issued shall contain a condition consistent with the undertaking in the NOA. The undertaking given in the NOA withdraws a potential area of dispute and does not add to the issues in dispute. It is well established that incidental treatment of a patented use through the administration of medicine to treat a non-patented use is not grounds, on its own, to grant prohibition. Pfizer must show “something more” than non-patented use. Here, the “something more” is the draft product monographs and labels. Apotex's undertaking in the NOA, and its incorporation in any NOC issued deals with this matter. Apotex would be limited to selling Apo-Quinapril for use in the treatment of hypertension only, and will have to modify the draft product monograph and labels so that the only indication is hypertension. If physicians engage in “off label” use by prescribing Apo-Quinapril for something other than the approved use, Apotex can only be said to infringe the Patent if it is implicated in inducing the infringing use. There was no evidence that Apotex will actively induce physicians to prescribe quinapril pills to treat hypertrophy.
10. Abbott Laboratories and TAP Pharmaceuticals v. The Minister of Health et al., June 11, 2007 FCTD (Lafrenière P.) Motion to Dismiss/ Section 6(5)/ Application for Prohibition/ Dosage/ Reference Product/ Eligibility/ Patent Register/ Amendments to Regulations/ Patented Medicines (Notice of Compliance) Regulations
Motion by Novopharm pursuant to s. 6(5)(a) of the Regulations to dismiss Abbott's prohibition application. Novopharm argued: 1) the '753 patent ("Patent") is irrelevant to the dosage of the Novopharm capsules and the reference product; b) the Patent is not eligible for inclusion on the Register; and 3) the application is an abuse of process. Regarding relevancy, Novopharm argued that the recent Supreme Court decision in AstraZeneca v. The Minister of Health (2006 SCC 49) clarified that if the invention of the patent is not embodied in the reference product, the patent is irrelevant. Thus, Novopharm argued that the Patent is irrelevant since it refers to a rapidly disintegrating oral form, whereas the reference product is a non-disintegrating gelatine capsule containing enterically coated granules. With regard to relevancy, Novopharm also argued that since s. 4 of the Old Regulations continues to apply to the Patent (as it was listed on the Register prior to June 17, 2006), s. 6(5) of the Old Regulations must also apply, so as to allow for dismissal of an application if the patents are irrelevant to the dosage form and route of administration of the drug for which an NOC is sought.
Held: Application dismissed. The Patent protects a delivery system or "payload" in which seemingly any active compound can be packaged and delivered in a rapidly dissolving oral form. Thus, the Patent does not contain a "claim for the medicine itself" or a "claim for the use of the medicine" and is not eligible for listing on the Register. The arguments based on AstraZeneca are beyond the scope of this motion as Novopharm gave no notice to the Applicants that it planned to advance oral arguments based on that decision. Due process requires that a party be given an opportunity to adduce evidence with respect to substantive issues, and the Applicants have been deprived of this opportunity. Regarding Novopharm's arguments in respect of the New Regulations, in the absence of any grandfathering provisions, and considering the plain and obvious effect of the amending legislation, s. 6 of the Old Regulations has ceased to exist, and with it, Novopharm's arguments for dismissal based on relevance. Given the decision under s. 6(5), the abuse of process issue was not determined.
11. Altana Pharma et al. v. Novopharm and The Minister of Health, June 14, 2007 FCTD (Tabib P.) Application for Prohibition/ Number of Expert Reports/ Section 7 of the Canada Evidence Act/ Patented Medicines (Notice of Compliance) Regulations
Motion by Novopharm for an order compelling Altana to comply with s. 7 of the Canada Evidence Act ("s. 7"). Altana filed affidavits from thirteen expert witnesses in its application for prohibition and did not seek leave under s. 7. Altana denies being in breach of s. 7, but moves by cross-motion for leave to file all the expert evidence tendered if it is found that leave is required. Novopharm argued that the correct construction of s. 7 is to limit each party to five expert witnesses regardless of the number of issues requiring expert evidence. Alternatively, Novopharm argued that Altana had exceeded the limit of five experts per issue with respect to non-infringement. Novopharm submitted that all matters relating to non-infringement are but different aspects of the single issue of infringement. Altana argued that admissibility of expert affidavits should be left to the Applications Judge, and, in the alternative, argued that there were 28 issues in the application on the issue of infringement.
Held: Motion allowed. The limits imposed by s. 7 are applicable to the issues in the case rather than to the case as a whole. The purpose of s. 7 is to limit the number of experts that may be called by the parties to what is considered a reasonable number, beyond which prior leave of the Court must be obtained by demonstrating that a greater number of experts is necessary for the determination of the issues, that there are no unnecessary duplications in the evidence, and that the additional strain on the time and resources of the Court and the parties is justified. In this case, non-infringement is a single issue and includes allegations of non-infringement of both formulation and use claims. In addition to being consistent with the manner in which "issues" have been identified in NOC proceedings, the determination that invalidity and non-infringement are each a single issue for the purpose of s. 7 is also consistent with the purpose and intent of s. 7 and the necessity for more efficient management of NOC proceedings. Altana filed the affidavits of 11 experts in respect of the infringement issue; six are therefore inadmissible without leave. It is a matter of discretion whether to determine an issue or defer it to the Applications Judge, having regard to whether the matter is clear and obvious, and whether prejudice will be caused to the other party. Deferring the determination would prejudice the Respondents. Regarding Altana's motion for leave, it was not established that it was reasonably necessary to call more than five experts for the infringement issue, and thus granting leave for additional experts would be inconsistent with the summary nature of these proceedings. The amount of duplication, number of distinct subjects, and the nature of the proceedings are considerations from which such necessity can be ascertained.
12. Pfizer and Warner-Lambert v. The Minister of Health and Ranbaxy et al., June 18, 2007 FCTD (Hansen J.) Motion to Strike/ Application for Prohibition/ Abuse of Process/ Section 6(5)(b)/ Patented Medicines (Notice of Compliance) Regulations
Appeal by Ranbaxy of Prothonotary Tabib's Order dismissing a motion under s. 6(5)(b) to dismiss a prohibition application preventing the issuance of an NOC for atorvastatin. Prothonotary Tabib had concluded that it was not plain and obvious that the application is frivolous, vexatious or an abuse of process and dismissed the motion. Ranbaxy alleged that it would not make, construct, use, or sell the crystalline forms of atorvastatin calcium claimed in Pfizer’s ‘111, ‘953, and ‘933 patents ("the Patents"). Ranbaxy had two processes to make atorvastatin: a non-infringing process on file with Health Canada, and a second process not on file with Health Canada that Pfizer alleged would use the claimed crystalline forms as an intermediate and/or final product. Pfizer argued that Ranbaxy would infringe as there was evidence on the record to conclude that it would change its manufacturing process to the second process if an NOC issued. Ranbaxy argued that Pfizer's application is bereft of any possibility of success because it asserted that the overall intent and the specific language of the Regulations dictate that an NOA of non-infringement must be limited to and defined by the submission on file with Health Canada; thus on application for an order of prohibition, the Court is limited to the materials filed with Health Canada and, in its consideration of whether the allegations of non-infringement are justified, the Court may only have regard to the process Ranbaxy has on file with Health Canada.
Held: Appeal dismissed. In a motion to dismiss under s. 6(5)(b), the second person must establish that it is “plain and obvious” that the application has no chance of success. Summary dismissal of an application before hearing is an extraordinary remedy that should only be granted in limited circumstances. The legal assertion that the Court hearing the application is limited to a consideration of the material on file with Health Canada has never been judicially determined, and there is case law from which the contrary could be argued. Second, if the second process is determined to be relevant, there is a factual dispute between the parties as to whether Ranbaxy will use the second process if it is granted an NOC, and any finding on this point is best left to the Applications Judge before whom there will be a complete record. Finally, the interpretation of the Regulations urged by Ranbaxy could lead to a conclusion directly at odds with the purpose of the Regulations, namely, to prevent patent infringement.
13. Apotex v. Aktiebolaget Hassle, June 27, 2007 FCTD (Harrington J.) Motion to Dismiss/ Impeachment Action/ Patent Expiry/ Mootness/ Damages/ Patented Medicines (Notice of Compliance) Regulations
Motion by AB Hassle appealing the Prothonotary's refusal to dismiss Apotex's impeachment action for mootness because the underlying patent has expired. Apotex sought a declaration that AB Hassle's '751 patent ("Patent") relating to omeprazole was "invalid and of no force and effect". AB Hassle argued that since the Patent had expired, the impeachment action was moot and Apotex lacked standing. AB Hassle submitted that had Apotex obtained judgment before the Patent expired, the prohibition order would no longer have been applicable and it would have been able to market its version of omeprazole earlier. As this was the only point to the action, now that the Patent had expired and the prohibition order had lapsed, Apotex had no standing to set aside an ineffective order. Apotex argued that the action was not moot, submitting that if it succeeded in the impeachment action, the prohibition order would fall and it would be entitled to damages running from the time it would have otherwise been on the market with its version of omeprazole.
Held: Motion dismissed. It is not "plain and obvious" that a determination of this proceeding can have no legal effect or consequences on the parties, or that Apotex no longer has standing to pursue this action. It is also not "plain and obvious" that the case is moot; therefore it is not necessary to exercise any discretion in allowing the case to continue; the case must continue. In its statement of claim, Apotex stated that AB Hassle's application for a prohibition order was under appeal. This is a sufficient statement of a material fact so as to not deprive Apotex of standing, or to make the action moot, even though the Patent has expired. It allows Apotex to submit that if it succeeds in the impeachment action, the prohibition order falls, and it is entitled to damages. It may be that no damages flow because Apotex has to succeed in its parallel impeachment action against the Patent. It is not for the Court at this stage to assess the case in a positive manner and to consider the chances of success. Rather, the Court has to look at the case negatively, asking whether it is "plain and obvious" or "beyond a reasonable doubt" that the case will not succeed. Notwithstanding that the Court's right to dismiss an action on the grounds that it is moot is not limited to the circumstances set out in r. 221, the rule serves as a useful guide. Despite the fact that the FCA upheld the trial decision, it cannot be said that when the statement of claim was first filed there were grounds upon which the action could be peremptorily dismissed. An application under the Regulations is not an action seeking a declaration that the patent is valid and will be infringed. Thus, it cannot be said that res judicata, issue estoppel or abuse of process applied to the action when instituted.
14. Astrazeneca et al. v. Apotex and The Minister of Health, June 28, 2007 FCTD (Barnes J.) Application for Prohibition/ Invalidity/ Obviousness/ Anticipation/ Abuse of Process/ Patented Medicines (Notice of Compliance) Regulations
Application by Astrazeneca for an order prohibiting the Minister from issuing an NOC to Apotex for the production of omeprazole for use in combination therapies to treat Helicobacter pylori ("Hp") infections until the expiry of Astrazeneca's '668 and '762 patents. Apotex alleged non-infringement of the '668 patent, arguing that it claimed use of omeprazole as a single drug therapy whereas Apotex proposed use in a combination therapy. Apotex further alleged invalidity of the '668 patent on the grounds of anticipation. Apotex alleged invalidity of the '762 patent on the grounds of anticipation and obviousness. Astrazeneca argued that the current challenge was an abuse of process in light of prior NOC proceedings in which Apotex failed to challenge validity of the patents.
Held: Application dismissed. A generic challenger should not be deemed to accept the validity of a patent by not putting that issue in play in a first NOC proceeding, particularly where infringement is the only issue raised. Apotex had a legitimate interest for limiting its initial allegations to a single issue of non-infringement. The '668 patent contemplates a use for omeprazole as an antibacterial agent in the treatment of Hp infections regardless of whether it is used alone or in combination. However, the '668 Patent was invalid on the basis of anticipation as relevant prior art clearly established that omeprazole had antibacterial properties when used alone in patients with Hp. Where the mechanism of action is inherent, it is irrelevant that it was not precisely disclosed in the prior art. The '762 patent is invalid on the basis of anticipation as relevant prior art not only anticipated the use of omeprazole and clarithromycin as an effective and synergistic combination, but also that this combination worked because of omeprazole's value in enhancing the bioavailability of clarithromycin. It does not matter that the prior art did not identify the precise mechanism of action. The '762 patent is invalid on the basis of obviousness. If the only thing a patent teaches is a partial mechanism of action for a previously known and utilized combination drug therapy, it has described nothing inventive. In assessing obviousness, the Court applied the factors cited by the FCA in Janssen-Ortho v. Novopharm (2007 FCA 217). Aside from the invalidity issues, the '762 Patent was ineligible for inclusion on the Register as it did not contain any therapeutic aspects.
(b) Trade Marks
1. Sun World International v. Parmalat Dairy & Bakery, June 20, 2007 FCTD (Aronovitch P.) Opposition Appeal/ Amendment of Statement of Opposition/ Section 22/Federal Court Rule 75
Application to amend a statement of opposition at the appeal stage to add s. 22 as a ground of opposition.
Held: Application dismissed. Although new evidence may be adduced upon appeal of an opposition, new issues may not be introduced (an exception being that new grounds on a pure question of law may be added, but only in reference to evidence already presented before the Registrar). The statement of opposition is not a “document” within the meaning of Federal Court Rule 75 and therefore the Court has no jurisdiction to allow the amendment under r. 75. The discretion to allow an amendment of a statement of opposition has been given exclusively to the Registrar pursuant to s. 56(5) of the Trade-marks Act and r. 40 of the Trade-marks Regulations. (The Prothonotary declined to consider if s. 22 is a proper ground of opposition.)
2. Nissan v. BMW, July 12, 2007 FCA (Richard C.J., Linden, Pelletier JJ.A.) Section 7(b)/Use as Trade Marks/Damages
Appeal by Nissan from a decision that held that its use of the marks M and M6 constituted passing off with respect to BMW’s unregistered marks M and M6, contrary to s. 7(b) of the Trade-marks Act.
Held: Appeal allowed. In order to succeed in a passing off action, a party must prove that it owns a valid and enforceable trade mark, either registered or unregistered. The Trial Judge erred in assuming that BMW had used M and M6 in a manner that qualified as use under s. 4(1). BMW’s evidence was deficient in this regard. In addition, actual or potential damage is a necessary element in finding liability under s. 7(b) and the Trial judge erred in assuming that there would be damages; there was no evidence upon which the Court could have reached such a conclusion. The bifurcation order issued by the Trial Judge simply deferred proof of the extent of the damage pending a determination as to the liability; it does not relieve the necessity of proving the existence of damage as an element of the cause of action.
3. Remo Imports v. Jaguar Cars, July 18, 2007 FCA (Létourneau, Décary, Trudel JJ.A.) Damages/ Depreciation of Goodwill/ Registration Not Void Ab Initio
Appeal and cross-appeal from the trial decision that dismissed Remo’s action for infringement and allowed Jaguar’s counterclaim. Pursuant to the counterclaim, Remo’s trade mark registration for JAGUAR was ordered to be expunged and an injunction issued preventing Remo from using the mark JAGUAR and a Leaping Jaguar Design. However, the Trial Judge did not allow Jaguar’s claim for past damages and it is this part of his decision that is the subject of Jaguar’s cross-appeal.
Held: Appeal allowed to a limited extent. The Trial Judge made a number of errors, including 1) misapprehending the test for confusion, 2) concluding that Remo’s registration was invalid because it was calculated to deceive and mislead the public, and 3) disregarding the five year limitation set out in s. 17(2). However, Remo’s registration was properly expunged on other grounds.
With respect to the cross-appeal, the Trial Judge came to the right result regarding damages, but “for reasons that confuse the issue of damages”. Damages cannot be awarded for the depreciation of Jaguar’s goodwill since there was not enough evidence to establish that there was a likelihood of depreciation. The mere unequal quality or price of the parties’ goods is insufficient to establish a likelihood of depreciation. The Trial Judge erred in holding that Remo’s registration was void ab initio; there was no finding that Remo was acting in bad faith when it filed its trade mark application and its registration only became invalid when the Trial Judge expunged it. Therefore, Jaguar is only entitled to damages (or an accounting of profits) for infringement as of the date of the trial judgment.
(c) Practice
1. Merck v. Nu-Pharm, Bernard Sherman and Richard Benyak, May 23, 2007 FCTD (Beaudry J.) Standard of Review/ Rule 241/ Absence of Endorsement of Prothonotary Order
Appeals by Merck, Nu-Pharm and Mr. Benyak related to four Prothonotary orders involving matters in dispute at the discovery stage of a patent infringement action involving Merck's '349 Patent for enalapril. Merck alleges that due to their non-arms length relationship with Apotex, which was previously found to have infringed the '349 Patent, the defendants have created a scheme for the purpose of circumventing the permanent injunction issued against Apotex by bringing the infringing product to market under a new name - Nu-Enalapril. Through discoveries, Merck is attempting to establish essential elements needed to pierce the corporate veil behind which they argue Dr. Sherman, the directing mind of Apotex, uses Nu-Pharm to circumvent the permanent injunction order rendered against Apotex. Prothonotary Aronovitch's four orders are briefly summarized as follows: 1) Making of Inquiries Order: Nu-Pharm ordered to make inquiries of various non-parties to the action; 2) August Refusals Order: Nu-Pharm ordered to answer certain questions refused on examination for discovery of its representative, Mr. Benyak; 3) November Order: Nu-Pharm and Mr. Benyak did not have to make further inquiries beyond those permitted under r. 241; and 4) Sherman Order: Dr. Sherman did not have to make inquiries of corporations controlled by him and employees thereof.
Held: In considering each of the Prothonotary orders, Beaudry J. set out the relevant standard of review. For discretionary decisions of a prothonotary, especially case management prothonotaries, the standard of review is the clearly wrong standard in the sense that the exercise of discretion must have been based on a wrong principle or misapprehension of facts. Decisions with respect to the interpretation of the Rules, or where a question of law is raised, are reviewable on the correctness standard.
All parties were unsuccessful in their respective appeals of the four orders. For the Making of Inquiries Order, Beaudry J. stressed that r. 241 is unequivocal – the duty to make inquiries to prepare for an examination for discovery is mandatory. With regards to the August Refusals Order, Beaudry J. failed to find the order clearly wrong. Moreover, Beaudry J. ruled that as President of Nu-Pharm, Mr. Benyak was a directing mind of Nu-Pharm and as such could also be held personally liable. Under the analysis of the November Order, Beaudry J. noted that the absence of an endorsement or any explanation of a prothonotary's order alone does not justify interfering with a prothonotary's decision unless its absence causes prejudice to the parties. The Sherman Order was also held not to be clearly wrong or based on a misapprehension of facts.
2. Monsanto Canada et al. v. Edward Wouters et al., June 12, 2007 FCTD (Barnes J.) Deemed Admissions/ Failure to Respond to Request to Admit
Motion by Monsanto to have the defence of Mr. Wouters struck out with judgment to be entered against him and Northspruce Farms (“Northspruce”). In the alternative, Monsanto sought an order under r. 216 for summary judgment based on a number of deemed admissions arising from Mr. Wouters’ failure to respond to various Requests to Admit. Monsanto alleges that Mr. Wouters and Northspruce infringed the '830 Patent by growing, harvesting and selling soybeans containing genes and cells claimed in that patent.
Held: Mr. Wouters’ statement of defence struck. By failing to respond to Monsanto's Requests to Admit, Mr. Wouters was deemed to have admitted all of the facts required to establish infringement of the '830 Patent. Mr. Wouters and Northspruce were enjoined from growing, harvesting and selling soybeans containing genes or cells as claimed in the '830 Patent. They were also ordered to deliver to Monsanto all seeds and plants in their possession, custody and control containing the claimed cells or genes. Lastly, Mr. Wouters and Northspruce were ordered to pay damages, interest and costs.
3. Emall.ca v. Cheap Tickets and Travel, June 14, 2007 FCTD (Strayer D.J.) Costs/Rule 402(1)/Rule 403
The applicant secured an order for the expungement of the respondent’s trade mark registration and now seeks directions to the assessment officer concerning the award of its costs under r. 403. The respondent (who is located in B.C.) had commenced a passing off action against the applicant in B.C. which resulted in the applicant (who is located in Ontario) commencing this Federal Court expungement action.
Held: Prior to the court hearing, the applicant had made a settlement proposal to the respondent, which the respondent rejected. The proposal was more favourable to the respondent than the Court’s ruling. The case therefore comes within r. 402(1) and the applicant is entitled to party and party costs up to the date of the settlement proposal and to double such costs thereafter. The Court directed a lump sum assessment of costs for the two actions to save the parties a further expenditure of time and money. The fact that the respondent chose to commence its passing off action in a provincial court instead of in a federal court does not justify a solicitor-client award of costs.
4. Microsoft v. 9038-3746 Quebec et al., June 20, 2007 FCTD (Harrington J.) Costs/ Copyright Infringement/ Solicitor Client Costs/ Lump Sum Award
Microsoft was successful in an action for copyright and trade mark infringement relating to certain computer programs and had been awarded statutory damages of $500,000, as well as an additional $200,000 in punitive damages. On this motion, Microsoft sought a lump sum costs award calculated on a solicitor client basis of almost 2.5 million dollars.
Held: Actual solicitor client costs were awarded based on the defendants' behaviour as a whole during the proceeding. The defendants had little regard for the truth at discovery and at trial and failed to produce documents despite a court order. The Court also awarded lump sum costs. The plaintiff had provided an extremely well detailed draft bill of costs. The defendants had testified that it would not be in a position to satisfy the judgment, and hence any award of costs. A tedious taxation could well be a waste of time and effort, and delay matters. The plaintiff offered a 25% discount on their fees; the Court ordered a 30% discount of the fees of 1.8 million dollars. Disbursements equaling $150,000 Cnd and $175,715.23 US were also awarded to the plaintiff.
5. Ratiopharm v. Pfizer Canada et al., July 24, 2007 FCA (Evans, Nadon, Pelletier JJ.A.) NOC Proceeding/ Application to Strike/ Eligibility for Listing on the Patent Register
Motion by Pfizer to quash an appeal by Ratiopharm against an order of Barnes J. granting Ratiopharm's motion to strike Pfizer's application for an order of prohibition. Barnes J. had granted Ratiopharm's motion as it related to Pfizer's '493 Patent re NORVASC on the ground that the '493 Patent was ineligible to be listed on the patent register.
Held: Pfizer's motion to quash allowed and Ratiopharm's appeal dismissed. Pfizer's motion to dismiss is not premature because it has a motion pending before Barnes J. for reconsideration of his order. Ratiopharm's appeal is not against a judgment of the Federal Court, but against the reasons for judgment, and is not within the Court of Appeal’s jurisdiction.
II. OTHER COURT DECISIONS
1. HZPC Americas v. True North Seed Potato et al., June 19, 2007 PEISCTD (Jenkins J.) Common Law Plant Rights/Plant Breeder’s Rights Act
Motion to strike out Statement of Claim on the ground that it discloses no reasonable cause of action. The plaintiff, whose business is developing varieties of potatoes, licensed True North to grow its varieties of potatoes under contract. The plaintiff claims that it has suffered irreparable damage to its propriety interests because the defendants, without permission and in contravention of the limited licence, distributed the plaintiff's seed to third parties. The defendant argued that the tort of conversion is not applicable because the plaintiff has no proprietary interest in any chattel and no ownership, the plaintiff not having taken any steps under the applicable federal legislation (the Plant Breeder’s Rights Act) and there being no contractual cause of action.
Held: Motion dismissed. On its face, the Statement of Claim properly pleads the stated causes of action. Only in the clearest of cases will the Court strike out a statement of claim at this stage of the proceedings. The defendant argued that whatever interest the plaintiff has in its potato varieties, it is not a proprietary interest recognized at common law as being the subject of a claim in tort. However, the Court found that there is no persuasive authority for the proposition that there is no common law right that overlaps with the Federal registration scheme that could provide a cause of action. The plaintiff's claim is an in personam claim and the federal legislation does not preclude a person's right to bring a civil action. Various proprietary commercial interests have been judicially recognized as capable of being the foundation for a cause of action and the plaintiff has demonstrated an arguable case for its proprietary interest claim being of commercial quality and capable of being recognized at law.
2. Catalyst Partners et al. v. Meridian Packaging, June 21, 2007 ACA (Côté, McFadyen, Slatter JJ.A.) Appeal from Decision Upholding Anton Piller Order Permitting Plaintiff to take Possession of Confidential Information
Appeal by defendants in a contract case from a decision upholding an Anton Piller order. Plaintiff commenced an action alleging that defendants were misusing proprietary confidential information, and obtained an ex parte Anton Piller order. The parties had a business relationship. The plaintiff supplied chemical formulas and mixing equipment to the defendants, and the defendants mixed proprietary chemicals for delivery to the plaintiff's customers. The plaintiff alleged that the defendants: (i) used the equipment in an unauthorized manner to mix chemicals for third parties, (ii) appropriated its proprietary formulas to give to third parties, and (iii) breached their fiduciary duties by appropriating customers and corporate opportunities from the plaintiff. The Motions Judge upheld the Anton Piller order and granted the plaintiff access to the documents seized from the defendants. Defendants appealed.
Held: Appeal allowed. The Anton Piller order should be set aside, and the documents in question should be returned to the defendants. An Anton Piller order is an extraordinary remedy. The four essential conditions for granting an Anton Piller order are set out in Celanese Canada Inc. v. Murray Demolition Corp., [2006] 2 S.C.R. 189. Since the raison d'etre of an Anton Piller order is to preserve documents that might otherwise be destroyed, it is of central importance to show that there is a real possibility that the defendants may destroy such material before the discovery process can do its work. There was insufficient material to justify an inference of dishonesty in this case. The confidential information was not obtained in suspicious circumstances; the defendants were in possession of the confidential information as part of their working relationship with the plaintiff.
3. Imperial Sheet Metal v. Landry, June 21, 2007 NBCA (Turnbull, Daigle, Robertson JJ.A.) Interlocutory Injunction to Restrain Use of Confidential Information by Former Employee Appeal by Imperial from an order dismissing an application for an interlocutory injunction to restrain Landry from using Imperial’s confidential information. Landry worked for Imperial for nearly 20 years, ultimately becoming Vice-President of Sales and Marketing, until his employment was terminated. He joined a company that manufactured the same products and competed for the same customers. Imperial claimed Landry was using confidential pricing information to underbid it on contracts. It was not alleged that Landry used printed customer lists, but rather that he used general information that he remembered. The Motions Judge dismissed Landry's application for an injunction. Imperial appealed.
Held: Appeal dismissed. Imperial failed to demonstrate that it would suffer irreparable harm, as any market share loss it might suffer would not necessarily be permanent. The balance of convenience favoured Landry, as the injunction would probably mean he would be unable to pursue meaningful employment with his new employer. Landry's general knowledge of Imperial's customers did not constitute confidential information. As a sales manager, Landry did not have fiduciary obligations, and even if he did, they would not have lasted much longer than a year or so after his employment with Imperial ended. Confidential information can become stale dated and fiduciary obligations do not last in perpetuity.
4. Wall v. Horn Abbot, June 22, 2007 NSSC (MacAdam J.) Copyright/Laches/ Confidential Information/Fiduciary Duty
Action for copyright infringement and breach of confidence and fiduciary duty. The plaintiff alleges that 15 years ago, while hitchhiking, he disclosed an idea for a board game to the defendant, which the defendant ultimately successfully marketed as Trivial Pursuit.
Held: Action dismissed. The defence of laches does not apply to the equitable causes of action, i.e. breach of fiduciary duty and breach of confidence, but there was not the necessary relationship between the plaintiff and the defendant to create a fiduciary duty and the plaintiff did not establish, on a balance of probabilities, his claim of breach of confidence. The copyright claim failed because ideas cannot be the subject of copyright, and the extent of the expression of the ideas on paper, as recalled by the plaintiff, was insufficient to maintain a copyright claim.
5. BMO Nesbitt Burns v. Ord et al., July 3, 2007 OSCJ (Pattillo J.) Interlocutory Injunction to Restrain Departing Employees from Soliciting Clients and from Using or Disclosing Confidential Information
Motion by BMO Nesbitt Burns ("Nesbitt") for an interlocutory injunction to prevent the individual defendants from soliciting Nesbitt’s clients, and to prevent RBC Dominion Securities and the individual defendants from using or disclosing confidential information. Ord was a senior investment advisor and assistant branch manager for Nesbitt. His terms of employment contained nothing in respect of resignation, non-solicitation or non-competition following employment. While still employed with Nesbitt, he began discussing possible employment with RBC Dominion. Ord recruited two others from Nesbitt to move with him. On May 4 at 4:30 pm, Ord met with his branch manager to tender resignations for all three employees. Immediately following the meeting, the three went directly to RBC Dominion's offices and by 6:30 pm began contacting clients that Ord had dealt with at Nesbitt. There was no evidence that any written client lists or other proprietary or confidential information was taken. By May 10, Nesbitt had lost 25 clients managed by Ord representing $43 million in assets; that number grew to over $95 million in assets transferred to RBC Dominion in June. Nesbitt moved for an interlocutory injunction.
Held: Motion dismissed. The harm which Nesbitt submits it will suffer is capable of being quantified in monetary terms and is recoverable in the event it is found owing. Concerning Nesbitt's submission that it will suffer permanent market loss, the question of whether permanent market loss constitutes irreparable harm is not simply one of establishing permanent market loss. Rather, it has to be considered having regard to all the facts of the case. Here, the assets managed by Ord represented 2.6% of the total assets under administration at the branch. While the loss of the clients' assets is not insignificant and may represent permanent market loss, on the facts of this case it is not irreparable. The balance of convenience tips in favour of not granting the injunction. There is no question that Nesbitt will remain in business. On the other hand, if granted, the injunction would severely restrict the ability of the individual defendants to earn a living.
6. Edward Chapman Ladies' Shop v. Edward Chapman, July 10, 2007 BCCA (Newbury, Lowry, Kirkpatrick JJ.A.) Passing Off/ License or Assignment of Unregistered Mark
Appeal from a decision in favour of Edward Chapman Ladies’ Shop (the respondent) that permanently restrained Edward Chapman (the appellant) from selling ladies' clothing in association with the names EDWARD CHAPMAN or CHAPMAN’S, except where at least equal prominence is given to the additional name CHAPY’S. The two parties were originally one family business but in 1959 they agreed to split into two businesses, one selling men’s clothing and one selling women’s clothing. In the 1980’s, the appellant began to sell some women’s clothing using EDWARD CHAPMAN CHAPY’S. When it dropped the word CHAPY’S, the respondent commenced a passing off action that resulted in the restraining order. The Trial Judge found that the respondent had developed a protectable reputation in its sale of ladies' clothing under the names EDWARD CHAPMAN or CHAPMAN’S, and that the appellant had also developed a distinctive reputation in that market, but under the name CHAPY’S. The appellant argues that the Trial Judge erred in interpreting the 1959 agreement as an assignment as opposed to a licence.
Held: Appeal dismissed. The Trial Judge properly held that the appellant could not now dilute the respondent's distinctive reputation with respect to EDWARD CHAPMAN or CHAPMAN’S by using those names without the additional CHAPY’S designation. The Court of Appeal had little doubt that the parties in 1959 intended the respondent to receive the exclusive right to sell ladies' wear using the EDWARD CHAPMAN and CHAPMAN’S names. If it had been a license of an unregistered trade mark (as argued by the appellant), then the many years non-use by the “licensor” (appellant) and lack of control would have resulted in the rights residing in the “licensee” (respondent), rather than the “licensor”.
v
7. Steve Pandi and Jumpin Jammerz v. Fieldofwebs.Com et al., July 11, 2007 OSCJ (Low J.) Fiduciary Duty between Software Developer (Website Host) and Client/ Confidential Information/ Use of Competitor’s Name as Meta Tag
Motion for an interlocutory injunction to restrain the defendants from carrying on the business of selling footed pajamas to the public on the Internet. The plaintiffs sell footed pajamas through the Internet and hired the corporate defendant to develop and host its website. When the defendants decided to start their own footed pajama business, they first approached the plaintiffs for a quote re products. The plaintiffs allege that the defendants have breached their fiduciary duty by becoming competitors and have used confidential information in developing their business.
Held: Motion dismissed. There is no evidence that the defendants had power to exercise any discretion over either the plaintiffs’ business or their database and it has not been shown that the defendants were fiduciaries of the plaintiffs. The contents of the plaintiffs’ database are confidential information but there is no evidence that the defendants ever improperly accessed that database. Any similarities between the parties’ businesses are common to those operated by third parties.
The defendants had at one point of time used the plaintiffs’ domain name JUMPIN JAMMERZ as a meta tag on their competing website. If this had been ongoing, the Judge would have issued an order to restrain such use.
III. OPPOSITION BOARD DECISIONS
1. Tradall v. Martini, March 5, 2007 (Carrière) Confusion
Proposed-use application for MARTINI MASSAGE & Design for hand-operated massage apparatus … faces powder and foundation cream puffs and sponges. Opposition based, inter alia, on s. 12(1)(d) due to confusion with the opponent’s mark MARTINI & Design registered for clothing.
Held: Opposition rejected. There is no evidence of Canadian sales of the opponent’s registered wares; all of the opponent’s evidence concerned its MARTINI alcoholic beverages. Even though the opponent’s MARTINI mark is well-known with respect to alcoholic beverages, a consumer would not likely associate the applicant’s wares with the opponent as to their source of origin since consumers are not used to seeing the opponent’s mark associated with any wares other than alcoholic beverages and there is no connection between the two parties’ wares.
2. Canadian Association of Blue Cross Plans v. Dismed, March 7, 2007 (Tremblay) Confusion
Use-based application for DISMED & Design for the distribution and wholesale and retail sale of medical products, furniture, equipment, apparatus, instruments and medical supplies. The design includes the drawing of a cross, for which the colour white is claimed. Opposition based, inter alia, on s. 12(1)(d) due to confusion with various BLUE CROSS marks registered by the opponent for health care services namely financing and administration of pre-paid health care plans…
Held: Opposition rejected. When considered as a whole, the marks are very different (the dominant features of the applicant’s mark are the word DISMED and the representation of a human figure). The drawing of a cross is commonly used in the health sector.
3. Hunter Douglas v. Blinds To Go, March 8, 2007 (Carrière) Confusion
Proposed-use applications for SHADETTE and VIEWETTE for window blinds and shades. Opposition based, inter alia, on s. 12(1)(d) due to confusion with the opponent’s marks DUETTE, SILHOUETTE, LUMINETTE, VIGNETTE and SERENETTE registered for blinds.
Held: Applications refused. The opponent has not established a family of ETTE-suffixed marks. Confusion is nevertheless likely with respect to the opponent’s SILHOUETTE mark since there exists some similarity between the idea suggested by it and each of the applicant’s marks.
4. Hunter Douglas v. Blinds To Go, March 8, 2007 (Carrière) Confusion
Proposed-use applications for CLAUDETTE and ANTOINETTE for window blinds and shades. Opposition based, inter alia, on s. 12(1)(d) due to confusion with the opponent’s marks DUETTE, SILHOUETTE, LUMINETTE, VIGNETTE and SERENETTE registered for blinds.
Held: Oppositions rejected. The applicant’s marks are feminine first names and do not have meanings similar to those of the opponent’s marks; these factors outweigh the common ETTE suffix and the fact that the marks are of similar length. The opponent has not established a family of ETTE-suffixed marks.
5. Seven-Up Canada v. Caribbean Ice Cream, March 9, 2007 (Bradbury) Section 30(b)
Use-based application for TROPIKSPLASH for mineral and aerated waters, non-alcoholic carbonated beverages, non-alcoholic fruit drinks … Opposition based, inter alia, on s. 30(b).
Held: Application restricted to non-alcoholic fruit drinks. The applicant admitted that it had not used the mark since the date claimed for a number of its wares. It attempted to amend its application to rely on proposed use for some of its wares but was unable to due to r. 32(c). Application restricted to those wares for which use was shown.
6. Canadian Medical Association v. Ari Babaknia, M.D., March 14, 2007 (Bradbury) Section 9/Section 12(1)(b)
Proposed-use application for DRSOY.COM for nutritional and hormonal supplements. Opposition based, inter alia, on s. 9 and 12(1)(b).
Held: Opposition rejected. The s. 9 ground failed because the applicant’s mark bears little resemblance to the opponent’s DR official marks. The s. 12(1)(b) ground failed because the applicant’s mark is not, in its entirety, clearly descriptive.
7. Citigroup v. Citi Commercial Real Estate Services, March 20, 2007 (Herzig) Confusion/Family of Marks
Use-based applications for CITI COMMERCIAL and CITI RESIDENTIAL for provision of commercial real estate services and provision of residential real estate services, respectively. The applicant disclaimed the right to the exclusive use of each of the individual words in its marks. Opposition based, inter alia, on s. 12(1)(d) due to confusion with the opponent’s family of CITI marks (e.g. CITI, CITIBANK, CITIFINANCIAL) registered for financial services including mortgage lending, real estate investment trusts, real estate insurance services and real estate investment services.
Held: Applications refused. Confusion is likely because the opponent’s marks have acquired a significant reputation and the parties’ services, while distinct, are connected. The opponent has established a family of CITI-prefixed marks.
8. Boy Scouts Canada v. Leslie Gagné, March 21, 2007 (Martin) Confusion
Proposed-use application for BENNY THE BEAVER for entertainment and education namely story telling, theatrical productions, musical performances and Benny the Beaver club memberships, clothing, music recordings, story books, board games. Opposition based, inter alia, on s. 16(3) due to confusion with the opponent’s previously used marks BEAVER and BEAVERS.
Held: Application refused. The opponent has acquired a reputation for its BEAVERS program for young boys and its BEAVER mark is known to some extent with clothing, books and videos. The applicant has failed to meet its onus in view of the resemblance between the parties’ wares, services and marks.
9. Interserve v. UBC Research Enterprises, March 21, 2007 (Martin) Section 30(b)
Use-based application for WEBNAMES for domain name development and registration. Opposition based, inter alia, on s. 30(b).
Held: Opposition rejected. Although the opponent met its initial burden, the applicant’s evidence showed that its mark had been used as of the date claimed.
IV. SECTION 45 DECISIONS
1. Wm. Wrigley Jr. v. Cadbury Adams, March 8, 2007 (Savard) Use by Whom/ Distinctiveness
CINNAMINT registered for chewing gum.
Held: Registration maintained. The registration was assigned together with hundreds of other marks and the current owner continued using the old packaging for some time after the assignment. Although the packaging in use referred to the old owner, the affiant attested that the current owner was the seller of the marked wares and that it controlled the character and quality of the wares being sold. The fact that Canadian consumers were presented with a name other than that of the trade mark owner when they purchased the wares does not mean that the registered owner was not using the mark in the normal course of trade. The name of the predecessor on the packaging may affect the distinctiveness of the mark but that is not a matter to be dealt with under s. 45
2. Hudson’s Bay v. Sklar-Peppler Furniture, March 15, 2007 (Savard) Linkage between Mark and Wares
HOMESTYLES registered for household furniture.
Held: Registration maintained. The mark appeared on leaflets and product literature that were prominently displayed and used at the time that a consumer placed an order for customized furniture. Since the wares are customized, the Registrar presumed that there would be an agreement in place between the purchaser and vendor at the time of purchase of the wares which would entail the simultaneous transfer of some property rights in the future to the purchaser.
3. Crash Dummy Movie v. Mattel, March 21, 2007 (Sprung) Appropriate Affiant/ Use by Licensee
CRASH DUMMIES registered for action figures and various playsets and accessories.
Held: Registration restricted to those wares for which use was shown. The requesting party objected to the registrant’s affiant on the basis that his position with the registrant began near the end of the relevant time period. The affiant is an appropriate one as he has access to the registrant’s records; further, s. 45 does not require evidence of use throughout the 3-year time period. It matters not that the packaging does not identify the party named thereon as a licensee; it is sufficient that the affiant has attested that the control required by s. 50 exists.
