Recent Decisions December 2006
I. FEDERAL COURT DECISIONS
(a) Patents
1. Litebook v. Appollo Light Systems, March 29, 2006 FCTD (Tremblay-Lamer J.) Section 53.1 Patent Act/Striking Paragraphs/ Equitable Defence/Prosecution File History
Motion by the plaintiff appealing the order of the prothonotary in a patent infringement action. The plaintiff, after the statement of defence had been filed, brought a motion for particulars and that certain paragraphs of the defence and counterclaim be struck. The defendant had stated that the plaintiff had filed a voluntary amendment during the prosecution of the patent, and had added additional claims. The defendant alleged that the claims were drafted with a view to covering competing products in the marketplace, and that these amendments were made willfully and for the purpose of misleading, contrary to s. 53(1) of the Patent Act. The defendant further alleged that by reason of the voluntary amendment, the plaintiff is not entitled to reasonable compensation during the publication period or, in the alternative, prior to the date of the voluntary amendment. The defendant's position was that the plaintiff willfully for the purpose of misleading made the voluntary amendment to the application, and represented that the amendments were fully supported throughout the original specification. The Prothonotary denied the motion to strike, as s. 53(1) may be relied upon as a defence to equitable remedies.
Held: Appeal allowed. The Court agreed with the plaintiff that in characterizing the disputed paragraphs of the defence as not going to validity and being limited to equitable remedies, the Prothonotary misunderstood the defendant's pleadings and the decision was wrong. The Court further stated that there is a bar to the use of prosecution file histories for the purpose of determining the validity of claims. Therefore, it was ordered that the relevant paragraphs be struck without leave to amend, as it is plain and obvious that no reasonable defence in law had been disclosed. With regards to the plaintiff's position that s. 53(1) has no application to an exchange of correspondence between an applicant and a patent examiner and thus cannot constitute an equitable defence, it was held that these paragraphs will not be struck, as any possible equitable defences do become relevant if the allegations of inequitable conduct prove to be true.
2. Pfizer Canada v. Minister of Health and AG Canada, September 28, 2006 FCA (Décary, Sharlow and Pelletier JJ.A.) Appeal/ Judicial Review/Patent Register/ Section 4(2)(a)/Patented Medicines (Notice of Compliance) Regulations
Appeal from a judgment dismissing an application for judicial review of the Minister's decision to refuse listing of Pfizer's '726 patent ("Patent") on the patent register, against Norvasc, which contains amlodipine besylate as the only medicinal ingredient. The Patent claims pharmaceutical compositions consisting of amlodipine of various forms (including amlodipine besylate); a statin (fluvastatin, rivastatin, or simvastatin); and a carrier or diluent. The Minister argued that the Patent cannot be listed against Norvasc because it does not contain a claim for the medicine amlodipine besylate itself or for the use of the medicine.
Held: Appeal dismissed. The Patent cannot be listed against Norvasc because it does not contain a claim for amlodipine besylate itself or for its use. The object of the Regulations is to prevent infringement of patents while permitting drug manufacturers to take advantage of the early working exception in s. 55.2 of the Patent Act. Including the Patent on the patent list in respect of Norvasc will never disclose a possible infringement of the Patent because: (1) no drug would infringe the Patent unless it contained both amlodipine and one of the statins named in the Patent; and (2) a drug maker who wished to produce a drug containing both amlodipine and a statin would not seek an abbreviated new drug submission (ANDS) using Norvasc as the reference product because a proposed new drug containing two medicinal ingredients cannot be the pharmaceutical equivalent of a drug that contains only one of those ingredients. The Court could not find support for Pfizer's proposition that there is no statutory bar to a generic manufacturer filing an ANDS that has two Canadian reference products.
3. Sanofi-Aventis et al. v. Apotex and The Minister of Health, October 11, 2006 FCA (Létourneau, Noël and Evans JJ.A.) Expiry of Patent/Mootness/Damages/Section 8/Abuse of Process/Timeframe for Relief/Patented Medicines (Notice of Compliance) Regulations
Motion by Apotex to dismiss, on the grounds of mootness, an appeal by Sanofi-Aventis ("Aventis") of an Order dismissing an application prohibiting the Minister from issuing an NOC to Apotex in respect of ramipril until after the expiry of Aventis' '457 patent ("Patent"). Apotex's first NOA failed to demonstrate that it would not infringe the Patent and a prohibition order issued. In its second NOA, Apotex alleged invalidity on the basis of obviousness, which was an argument it advanced on a conditional basis in its first NOA. The Court held that Apotex's allegation in its second NOA was justified. Aventis' argument that the second NOA amounted to an abuse of process was dismissed, as was Aventis' application for prohibition. The Patent expired on December 13, 2005. Apotex argues that as a result of the Patent's expiry there is no longer a statutory obstacle preventing the issuance of an NOC, that there is nothing left to decide, nor could a decision on appeal change the result. Aventis argued that the appeal is not academic since mootness arises only once an NOC has been issued. Aventis also argued that the issue regarding the Declaration sought for invalidity of the second NOA because it constitutes an abuse of process is not rendered moot by the expiry of the Patent. In the alternative, Aventis argued that the Court should use its discretion to hear the appeal even if moot, in order to preserve entitlement to damages under s. 8 of the Regulations.
Held: Motion allowed. Appeal dismissed on the grounds of mootness. Once the Patent expired, there was no basis upon which the Minister could be the subject of an order of prohibition. Relief that can be granted under the Regulations can only remain in effect until the patent that formed the subject matter of the proceedings has expired. The fact that the relevant NOC has not yet issued changes nothing. The fact that Aventis sought a Declaration is of no assistance as its purpose was to prevent Apotex from entering the market pending expiration of the Patent. Aventis, as a patentee, has the right to undertake a patent infringement action and obtain compensation in the form of damages or loss of profits. Aventis' potential exposure to damages under s. 8 was too remote and speculative to justify hearing the appeal. Aventis did not demonstrate on a balance of probabilities that a decision on appeal would have a practical effect on the rights of the parties.
4. Hoffmann-La Roche v. Minister of Health and AG Canada, October 18, 2006 FCA (Sharlow, Noël and Pelletier JJ.A.) Judicial Review/Patent Register/Section 4(4)/30 Day Time Limit/Section 4(5)/Valid Reference Submissions for Patent Listing/ Patented Medicines (Notice of Compliance) Regulations
Appeal by Hoffmann-La Roche ("Roche") of a judgment dismissing Roche's application for judicial review of a decision by the Minister not to list the '964 patent ("Patent") on the patent register against the drug Bondronat. The original NOC for Bondronat issued to Boehringer Canada ("Boehringer") on August 27, 1997. Roche later acquired control of Boehringer giving them full right of access and ownership of Bondronat. Roche filed a submission entitled "Administrative NDS – Change Manufacturer's Name" to the Minister on April 30, 1998. The Patent issued to Roche on October 21, 2003. On November 18, 2003 Roche sought to list the Patent against Bondronat within the 30 day time frame referred to in s. 4(4) of the Regulations. As required under s. 4(5), Roche identified the submission to which the application relates as the document entitled "Administrative NDS- Change in Manufacturer's Name" filed on April 30, 1998. The Minister rejected this application on the basis that the April 30, 1998 submission was a supplemental NDS being merely for a change of name, and was not the kind of submission that could properly be used as a reference for a patent listing application under s. 4(4) of the Regulations. Following the suggestion of a Health Canada official, Roche reapplied on December 22, 2003 naming both their April 30, 1998 submission and also the original NDS filed by Boehringer. The Minister rejected this application on the basis that it was past the time frame allowed by the Regulations. Roche argued that their submission of April 30, 1998 should not have been considered a supplemental NDS, as it was a submission that would have allowed Roche to market Bondronat for the first time.
Held: Appeal dismissed. The Minister correctly rejected both applications. It is established jurisprudence that a supplement to a NDS if made only to reflect a change in the name of the drug or manufacturer, is not a submission that can support the filing of a new or amended patent list. Further, s. 4(5) of the Regulations requires that an applicant for a patent listing choose a correct reference within the 30 day period as specified in s. 4(4). The Minister is entitled to assess a patent listing application based on its contents. There is no justification for interpreting the Regulations in a manner that imposes a duty on the Minister to suggest or make corrections, particularly once the time limit has expired. Roche's second patent listing was filed outside the time limit defined in s. 4(4) of the Regulations and was therefore properly rejected. In dissent, Pelletier J.A. held that a submission for the issuance of an NOC on the basis of a change in the ownership of that drug must be considered a submission for the purpose of filing a patent list. Treating a submission to reflect a change of ownership as sufficient to support the filing of a patent list is consistent with the purpose of the Regulations, and is not inconsistent with the jurisprudence of this Court which has not previously addressed the distinction between a change of name and a change of ownership.
5. Glaxosmithkline v. AG Canada and Minister of Health, October 27, 2006 FCA (Pelletier, Décary and Linden JJ.A.) Judicial Review/Patent Register/Section 4(2)(b)/Claim for the Medicine Itself/Formulations/Claims for Delivery Systems/Patented Medicines (Notice of Compliance) Regulations
Appeal from a decision dismissing judicial review of the Minister's refusal to add the '111 patent ("Patent") to the patent register with respect to the drugs ADVAIR, ADVAIS DISKUS, FLOVENT HFA and VENTOLIN HFA. The Patent incorporates into a formulation claim, not only the medicinal substance but also the valve device by which those substances are to be administered. None of the previous attempts to list patents for medical devices on the register incorporated the device into the formulation claim itself. The Minister refused to list the Patent on the basis that it did not contain a claim for the medicines or the use of the medicines in question. The application judge upheld the Minister's decision and concluded that the Patent dealt with a system for the administration of a medicine. At issue was whether the novel formulation contains a claim for the medicine, or a claim for the use of the medicine. Glaxosmithkline ("GSK") argued that the application judge misconstrued the patent in failing to recognize that it included a claim for a medicine in formulation, which GSK submits includes the valve assembly as an inactive element. GSK further argued that, following Whirlpool, uncontradicted evidence presented from a person skilled in the art should have been given effect on the construction of the patent.
Held: Appeal dismissed. The Patent protects the delivery system rather than the payload. In deciding whether a patent contains a claim 'for the medicine itself', the fundamental question is whether the patent protects the 'payload' or medicine, or, the 'delivery system' or means by which the medicine is to be administered. Although the Patent may claim a formulation, it does not, when taken as a whole, claim a substance or combination of substances. The term 'substance' referred to in the definition of 'medicines' under the Regulations has been interpreted by the Courts not to include a mechanical device. While Whirlpool is the authority on claim construction, nothing in Whirlpool precludes the Court from making distinctions when determining whether a patent claims a medicine or its use for the purposes of the Regulations. Jurisprudence draws a distinction between patents that claim the medicine, and patents that claim mechanical delivery systems.
6. Sanofi-Aventis et al. v. Apotex and Minister of Health, November 2, 2006 FCA (Linden, Nadon and Evans JJ.A.) Appeal/ Prohibition Order/Section 5(1)(b)(iv)/ Patented Medicines (Notice of Compliance) Regulations
Appeal from a decision dismissing an application for an order prohibiting the Minister from issuing an NOC to Apotex for ramipril until after the expiration of Aventis' '089 patent ("Patent"), which is directed to the use of ramipril for the treatment of cardiac and vascular hypertrophy. Apotex is seeking an NOC for ramipril for the treatment of hypertension. The issue raised by the appeal was whether s. 5(1)(b)(iv) of the Regulations bars the Minister from issuing an NOC to Apotex in circumstances where it is agreed that the mere sale of the drug product for the approved use will lead to infringement of the patented use by patients. The Appellants provided evidence that if Apo-ramipril is allowed on the market, physicians will prescribe it for the treatment of hypertrophy, pharmacists will dispense it for that use, and patients will consume it for that use.
Held: Appeal dismissed. Following the FCA's decision in Pharmascience v. Sanofi-Aventis (2006 FCA 229), the Court held that Aventis cannot succeed in their application for an order of prohibition unless they can show that Apotex will infringe the Patent in making, constructing, using or selling its Apo-ramipril. The Appellants failed to show that the decision in Pharmascience is manifestly wrong, nor did they submit a basis for distinguishing itself from Pharmascience. The Regulations are not intended to prevent patent infringement by patients. The mere sale by Apotex of its Apo-ramipril for the treatment of hypertension cannot possibly constitute infringement of the Patent. To constitute infringement, there must be conduct that would make Apotex liable in an action for infringement including procuring or inducing others to infringe.
7. Brantford Chemicals v. Commissioner of Patents, AG Canada and Merck, November 7, 2006 FCTD (Mactavish J.) Section 65(2)(d) Patent Act/Patent Abuse/ Application for Compulsory License
Appeal from a decision of the Commissioner of Patents refusing Brantford Chemicals' application under the patent abuse provisions of the Patent Act for a compulsory license from Merck. Brantford had been requested to supply sodium enalapril-sodium iodide ("SESIC") for which it held a patent, but which may fall within the scope of Merck's 1,275,349 patent ('349 patent). In a previous proceeding, Merck had obtained an injunction where the founder of Brantford was enjoined from infringing their '349 patent. Brantford then asked Merck for a non-exclusive license permitting it to manufacture and sell SESIC for use in the manufacture and sale of finished dosage forms. Brantford responded to Merck's request for further information, however, it did not receive a response for two months, and then filed an application in the Federal Court seeking an order compelling Merck to give it a license to manufacture SESIC. The Commissioner rejected Brantford's arguments, and found that under s. 65(2)(d) of the Patent Act, three elements had to be established to prove patent abuse: 1) refusal to grant a license, 2) prejudice to the trade or industry in Canada, and 3) it had to be in the public interest to grant a license.
Held: Appeal dismissed. The Commissioner's decision turned on the finding that Brantford had not given Merck enough time to consider its position prior to the commencement of proceedings. The Court found that this finding was reasonably open to the Commissioner, and therefore there is no need to address Brantford's arguments relating to the issues of prejudice to trade or industry, and where the public interest might lie, as these considerations are only engaged once it is established that there has been a refusal to grant a license.
(b) Trade Marks
1. Franco Petrillo et al. v. Allmax Nutrition et al., October 6, 2006 FCTD (Mactavish J.) Infringement/Personal Liability/ Summary Judgment
Motion for summary judgment to dismiss Franco Petrillo’s infringement action against one of the individual defendants (Kichuk). The issue is whether a genuine issue for trial exists with respect to Kichuk’s personal liability for the alleged infringement of the registered trade mark ISO-FLEX by the corporate defendants. The plaintiffs alleged that two types of conduct existed that should make Kichuk personally liable: (1) he deliberately, wilfully and knowingly pursued a course of conduct that caused the corporate defendant to adopt an infringing trade mark and (2) he incorporated one of the corporate defendants in order to trade on the plaintiff’s goodwill and to shield himself from liability.
Held: Action dismissed as against Kichuk. The mere fact that Kichuk is an officer and the sole director of the corporate defendants does not make him personally liable. Re (1), there is no evidence that supports this allegation; instead there is Kichuk’s uncontroverted evidence that he used reasonable diligence by conducting trade mark searches before proceeding. His failure to stop the company from continuing to use the mark after it received a cease and desist letter was not a demonstration that he was indifferent to the risk of infringement given that he made enquires to try to determine if the plaintiff’s claims were legitimate. In order to attract personal liability, there must be evidence that the purpose of the individual was not the direction of the business activity of the company in the ordinary course of his relationship to it, but the deliberate and knowing pursuit of a course of conduct that was likely to constitute infringement or reflected an indifference to the risk of it. Re (2), the corporate defendant existed and was active long prior to the alleged infringing action and there is no evidence that Kichuk was attempting to trade off the plaintiff’s goodwill. Overall, the Court noted that the plaintiff’s decision to not file evidence of an alternate version of the events meant that there was no issue of credibility with respect to Kichuk’s evidence.
2. Minolta–QMS v. Cheng-Lang Tsai, October 19, 2006 FCTD (Mactavish J.) Opposition Appeal/Distinctiveness
Appeal from opposition decision that rejected Minolta’s opposition to the registration of MAGICOLOR. Minolta was the first user of MAGICOLOR, for printers and printer consumables. Cheng-Lang used MAGICOLOR for electrical wire and cable. New evidence was filed on appeal by Minolta.
Held: Appeal allowed. Before the Board, Minolta’s evidence was found to be inadmissible, but the Registrar went out to find that if it had been admissible it would have supported the distinctiveness ground of opposition. Based on the new evidence, the Court found that the distinctiveness ground succeeds. There is an overlap between the parties’ wares, as the cables could be used with the printers.
3. Fairweather v. Reg. TMs and Bereskin & Parr, October 19, 2006 FCTD (Mactavish J.) Section 45 Appeal/Special Circumstances/ Evidence of Continuing Intention to Use
Appeal from Registrar’s decision to expunge TARGET APPAREL pursuant to s. 45. The appellant argued that the Registrar erred in failing to find that special circumstances existed excusing the non-use of the mark and in finding that it had not established a serious intention to commence using the mark. The appellant only acquired the mark from a bankrupt company 6 months before the issuance of the s. 45 notice and submitted that its delay in relaunching the TARGET APPAREL men’s wares was in part due to the fact that the stores that it acquired did not sell men’s wear and it was in the process of developing labelling and sourcing products to be sold in connection with the mark. The evidence before the Registrar consisted merely of bare statements. New evidence filed on appeal.
Held: Appeal allowed. The new evidence does establish that the appellant intended to begin using the mark within a reasonable time. It included evidence of the preliminary artwork created before the issuance of the notice and the Court found that on this basis alone the appeal should be allowed. However, there was also evidence of sales of some of the marked wares after the notice – this confirms that there was a genuine continuing intention to use the mark.
4. Smart & Biggar v. Fares Jarawan and Al-Rifai Roastery (Mahmasat), October 19, 2006 FCTD (von Finckenstein J.) Section 45 Appeal/Sufficiency of Evidence
Appeal from Registrar’s decision to maintain the registration for AL-RIFAI ROASTERY (MAHMASAT) under s. 45.
Held: Appeal allowed. The Registrar came to an unreasonable conclusion in finding that the mark had been used by the registrant on packaging during the relevant time period. The evidence consisted of undated photographs of boxes bearing the mark and invoices displaying the mark at the top. The invoices do not qualify as use of the mark; they do corroborate that sales took place during the relevant time period but they do not establish that the wares sold bore the mark.
5. City Optical Holdings v. United States Shoe, October 23, 2006 FCTD (Hughes J.) Opposition Appeal/Procedure
Appeal from an opposition decision that refused an application to register THE INVINCIBLES.
Held: Appeal allowed. The application was made by summary judgment which, it appears, a Registry officer had suggested as appropriate. Since the proceeding was unopposed, the Court permitted the matter to proceed in this fashion. The new evidence is meaningful and serves to tip the balance, found to be even by the Registrar, in favour of the appellant.
(c) Copyright
1. Film City Entertainment et al. v. Golden Formosa Entertainment et al., September 9, 2006 FCTD (O’Keefe J.) Copyright Infringement/Summary Judgment
Motion by plaintiffs for summary judgment in a copyright infringement action relating to the distribution of counterfeit movies.
Held: Summary judgment granted. The plaintiffs have established that they own the copyright, that the copyright is registered in Canada, and that the defendants have rented out a counterfeit version. The defendants merely denied that copyright exists and that they did the acts alleged.
(d) Practice
1. Groupe Archambault v. CMRRA/ SODRAC et al., October 14, 2005 FCA (Pelletier J.A.) Stay of Proceedings/Interlocutory Injunction/Irreparable Harm/Unreasonable Seizure/Charter Section 8
Application by Archambault for a stay of proceedings before the Copyright Board pending a judicial review of an interlocutory decision of the Board. Archambault is involved in a proceeding before the Copyright Board as to whether it, as an online music service, was required to pay copyright royalties. The Board ordered that Archambault answer written questions from the respondent. Included in those responses would be information about Archambault's technology, finances, contractual relations, as well as advertising relationships.
Held: Application dismissed. Pelletier J.A. stated that there were no exceptional circumstances warranting the Court's intervention at this stage. It is up to the decision maker who hears the proceedings to resolve issues of relevance related to written questions. Even if there was some special circumstance, Archambault could not succeed in its application because there is no irreparable harm. Archambault did not apply for a confidentiality order before the Board, and therefore cannot assume that an order by the Board for confidentiality would not meet its requirements. The mere allegation of an infringement of s. 8 of the Charter is insufficient to establish irreparable harm.
2. Eli Lilly Canada v. Apotex, August 4, 2006 FCTD (Tabib P.) Striking Sur-reply Affidavits under Rule 312
Motion by Lilly to strike portions of sur-reply affidavits filed by Apotex pursuant to a previous order of the Court which permitted Lilly leave to serve reply evidence and granted Apotex leave to file sur-reply evidence. Lilly objected to the admissibility of Apotex's evidence, arguing that it was not a "proper sur-reply" as explicitly required under the terms of the Court's previous motion.
Held: Motion partially granted. Motions to strike evidence are to be determined using the criteria developed in case law as to r. 312 motions, which might also include a consideration of whether the evidence constitutes a "proper reply". Under r. 312, the first criterion to be applied is to consider whether each impugned paragraph of evidence is properly responsive. If this is not the case, the response is struck; if this is the case, then a presumption is created that the evidence should be allowed. The Court listed criteria for responsiveness, then applied them to Apotex's evidence, striking all or parts of numerous paragraphs as being unresponsive.
3. Orange County Choppers v. Trio Selection, September 19, 2006 FCTD (Blais J.) Confidentiality of Documents/Rule 151
Motion under Federal Court Rule 151 for a protective order. The documents in the case included information that could be used by competitors, including license agreements and invoices concerning sales. The defendant argued that the public interest would be harmed if the motion were granted.
Held: Motion granted. In intellectual property proceedings, protective orders are often granted on the basis that information obtained in preparation for trial may be maintained in confidence. In this case, the defendant failed to show evidence that the public interest and the notion of "open justice" would be harmed if a protective order were issued. Also, the defendant would not suffer any prejudice as a result of the order, as the plaintiff would provide information to the defendant.
4. Sanofi-Aventis Canada v. Novopharm, September 25, 2006 FCTD (Tremblay-Lamer J.) Res Judicata/NOC Proceeding
Appeal from a Prothonotary’s order that dismissed Novopharm's motion for summary dismissal. Novopharm had argued that an Aventis application was an abuse of process under s. 6(5)(b) of the NOC Regulations because the Aventis application was barred as res judicata, since a final decision, upheld by the Federal Court of Appeal, had been made in a case wherein it was determined that allegations of a lack of sound prediction were justified. The Prothonotary had dismissed the motion on the basis that there had not been a final decision in Aventis' first application, since it was on leave to appeal to the Supreme Court; thus, res judicata did not apply.
Held: Appeal granted. The correct rule is that a court order stands as final and binding unless actually reversed on appeal. Thus, the fact that Aventis' appeals might not have been exhausted did not effect the application of res judicata. The Court considered Novopharm's motion de novo. The Court noted that it has generally held that an application will be dismissed where it is "plain and obvious" that the applicant has no chance of success. The Court concluded that Aventis had no chance of success with respect to their current application, as the Court was bound by the decision of the Federal Court of Appeal in the first application.
5. Apotex v. Merck and Astrazeneca, October 10, 2006 FCA (Malone J.A.) Costs/Taxing Scale/Patentee Choice of Counsel
Appeal and cross appeal of the cost order made by Hughes J. in the lisinopril trial [2006 FC 631].
Held: Appeal allowed in part, cross appeal allowed in part. At the opening of trial Apotex, Merck and Astrazeneca agreed to a negotiated, without costs, settlement to not pursue allegations related to sound prediction, inutility, insufficient disclosure, and obviousness. The reasons and cost order of Hughes J. made no reference to this binding agreement. Such a result is unjust, and costs for the withdrawn allegations are removed from the cost order.
Throughout the proceeding there were 34 interlocutory orders that awarded costs to a party, without any stipulation as to scale or quantum. In his cost order Hughes J. ordered that if a party had been awarded costs in one of the 34 interlocutory orders, and such costs had not been taxed, they were to be taxed and paid at the upper end of column IV. By virtue of r. 407, an award of costs without stipulation as to a scale or quantum is to be assessed in accordance with column III. Accordingly, Hughes J.'s cost order was varied.
Merck, as owner of the patent, and Astrazeneca as the licensee, were both entitled to counsel of their choice in this proceeding. Applicants in the same proceeding are not required to share a single cost award. The cost order by Hughes J. was varied, entitling both Merck and Astrazeneca to their respective costs.
6. Merck v. Nu-Pharm, November 7, 2006 FCTD (Lemieux J.) Production Order/ Rule 225/ Standard of Review /Case Management Decisions
Appeal from a Prothonotary's order, compelling compliance with an earlier order for document production. Nu-Pharm disputed whether a number of the documents ordered produced were subject to the order, as those documents were under the control of a company BCI, which was not owned by the "Apotex group of companies", as stated in the order. Nu-Pharm also disputed the Prothonotary's classification of some the documents included in the compliance order.
Held: Appeal dismissed. Lemieux J. stated that decisions of a case management Prothonotary must be given "elbow room" by appellate courts. The Prothonotary's Production Order was issued pursuant to r. 225, which is framed in terms of a control test. The Prothonotary applied the proper control test in coming to the conclusion that BCI was included in the "Apotex group of companies". The Prothonotary found as a fact that Dr. Sherman controlled the "Apotex group of companies", and that BCI was a subsidiary of a company included in the "Apotex group of companies". Classification of the documents in a production order by a Prothonotary is in the heartland of their case management jurisdiction. It will only be interfered with in the clearest of cases. Nu-Pharm failed to meet the heavy burden to dispute the Prothonotary's classification.
II. OTHER COURT DECISIONS
1. Stonewater Group of Restaurants v. Mikes Restaurants, June 5, 2006 ABCA (Berger J.A.) Breach of Co-existence Agreement re Trade Names
Mikes appeals from an interlocutory injunction order that enjoined it from breaching certain 1977 agreements by using the name “Mikes” and associated trade marks in Alberta in association with restaurants featuring charbroiled steaks, hamburgers, seafood and the serving of alcoholic beverages. The parties had entered into the agreement to avoid confusion between “Mikes” as used for retail outlets offering prepared sandwiches and pizzas for sale and “Mr. Mikes” as used for restaurant services featuring charbroiled steaks, hamburgers, seafood and the serving of alcoholic beverages.
Held: Appeal dismissed. Mikes’ argument was that it served, but did not “feature”, the prohibited items. The Motion Judge reasonably found that Mikes was featuring the wares when it displayed a grilled steak on the front of its menu, included hamburgers as a bold subheading, and included the wares as occasional promotional items.
2. Kalogrias v. Koutroumanis et al., July 6, 2006 QSC (Courteau J.S.C.) Trade Mark Rights
The two parties originally operated two restaurants under the name ARAHOVA. They decided to enter into a partition agreement whereby the ARAHOVA trade mark was owned by a numbered company (which was equally owned) and they each operated one of the restaurants. Each party expanded their use of the trade mark but when the defendant began offering franchises to third parties, the plaintiff sued, claiming that the partition agreement had been violated and seeking an injunction and damages.
Held: Action dismissed. Only the numbered company could seek damages resulting from the use of ARAHOVA. In any event, the evidence showed that the defendant very much controlled the franchises and thereby respected the essence of the partition agreement.
3. Husky Injection Molding Systems v. Li and A&T Technology, July 18, 2006 OSCJ (Sachs J.) Partial Summary Judgment/ Confidential Information
Motion for summary judgment in an action that claimed that the defendant Li had breached the confidential information clauses of his employment contract. The plaintiff sought an injunction, declarations that the defendants intentionally interfered with the plaintiff's economic relations and infringed the plaintiff’s copyright, and damages.
Held: Motion dismissed. The Court found that Li did breach the terms of his employment contract but the remaining relief sought by the plaintiff would require a trial. It is not appropriate to grant partial summary judgment and refer the balance of the issues to trial in cases where the issues determined by that judgment are not clearly severable from the issues that are referred to trial. In the present case, the Trial Judge will have to understand the relationship between the parties and the conduct that the plaintiff is complaining of. Thus, granting partial summary judgment will not save expense, but may cause confusion and create the potential for inconsistent results.
4. Diversified Metal Engineering v. Trivett, August 1, 2006 PEISC-AD (McQuaid J.A.) Interlocutory Injunction/Serious Issue to be Tried/Confidential Information
Appeal by Trivett from a decision that issued an interlocutory injunction to prevent him from disclosing confidential information. Trivett was an employee with DME and his contract of employment prohibited the disclosure of confidential information. When he became an employee of a competitor, DME obtained an interlocutory injunction to prevent him from disclosing confidential information.
Held: Appeal allowed. The Motion Judge erred in finding that there was a serious issue for trial. There was no evidence at all that Trivett was disclosing, or would disclose, confidential information; instead there was his affidavit attesting that he was not. The Motion Judge mis-characterized the serious issue for trial as being solely "... the question of what information can and cannot be disclosed ..." pursuant to the provisions of the employment contract between the parties. “The additional and more crucial issues are whether the information Dr. Trivett did possess, when it is defined, is information he possessed only as the result of his employment with DME and whether he is in fact disclosing this information to the companies with which he is now associated.”
5. Murphy Oil v. Predator, September 15, 2006 ABQB (Nation J.) Breach of Confidence/ Oil and Gas Industry
Action for misuse of confidential information. The plaintiffs drilled a wildcat well on land that abutted Crown land (the offset lands). The plaintiffs hired the Bonnet’s company to retrieve the well’s pressure data. An engineer at Predator obtained this data from a friend of his at Bonnet’s. Predator subsequently successfully outbid the plaintiffs for the offset lands, which enabled Predator to drill into the gas reserve that the plaintiffs had discovered. Plaintiffs claim that Predator obtained their confidential information in circumstances that Predator knew, or ought to have known, constituted a breach of confidence by Bonnet’s and that Predator wrongfully used that information to determine the appropriate amounts to bid on the offset lands.
Held: A constructive trust was ordered to transfer Predator’s holdings to the plaintiffs. Punitive damages denied.
The plaintiffs had applied and received “tight hole" status for their well, which meant that the B.C. Oil and Gas Commission would not release its data for one year. The Court found that pressure data on a well with “tight hole” status is clearly confidential but Predator argued that the press releases made by the plaintiffs meant that confidentiality no longer applied. While it was probably imprudent of the plaintiffs to release any information, they did not release the pressure data and so that information was still confidential. Predator also argued that because Bonnet’s did not indicate to them that the data was confidential, they had no obligation to treat it as confidential. However, the law has extended an obligation of confidence to third parties who receive information that they conscientiously know is confidential. Predator ought to have reasonably known that the data was the confidential information of the plaintiffs. This was confirmed in part by Predator’s subsequent lies as to how it obtained the data. Although some legal concepts may not apply holus bolus to the oil and gas industry, the Court was not satisfied that there is a clear industry standard that suggests that any information received from scouts (corporate spies), no matter how obtained, is usable in the hands of a third party. In any event, the present case did not involve a scout and there is no evidence that portrayed the present facts as acceptable in the oil and gas business as a custom.
The Court found that the confidential pressure data, not just pubic domain information, was used to obtain the offset land. The confidential information did give Predator a competitive edge as evidenced by the fact that the pressure data was an integral part of Predator’s bid to potential investors. Moreover, the confidential information was used to the detriment of the plaintiffs because the Court found that it otherwise would have obtained the offset lands.
III. OPPOSITION BOARD DECISIONS
1. Northern Group Retail v. Vêtements Northern Souvenir, May 17, 2006 (Carrière) Confusion
Use-based application for SOUVENIRS NORTHERN & Design for clothing. Opposition based, inter alia, on s. 12(1)(d) due to confusion with NORTHERN ELEMENTS registered for clothing.
Held: Application refused. The opponent’s use has been extensive and it owns a family of NORTHERN trade marks.
2. Parmalat and Lactantia v. Natrel, June 12, 2006 (Carrière) Section 30(i)/ Confusion
Proposed use application for NATREL FINE FILTERED MILK & Design for various dairy beverages. FINE FILTERED MILK disclaimed. Opposition based, inter alia, on s. 12(1)(d ) due to confusion with the mark PURFILTRE registered for milk and s. 30(i) because the applicant has breached a contractual basis in that, pursuant to a license, the applicant agreed that Lactantia owns the mark PURFILTRE and that the applicant would not do anything that would adversely affect the distinctiveness or ownership of that mark.
Held: Opposition rejected. Confusion is not likely because there is no resemblance between the marks; to find otherwise would be tantamount to giving the opponent a monopoly over the descriptive word “filter”. Regarding s. 30(i), there is no evidence that the registration of the applicant’s mark would affect the distinctiveness or goodwill of the opponent’s mark.
3. Canadian Tire v. Camoplast, June 19, 2006 (Tremblay) Confusion/Section 30(b)
Use-based application for PREDATOR CAMOPLAST & Design for rubberized plain belts with profiles used in snowmobiles. Opposition based, inter alia, on s. 12(1)(d) due to confusion with PREDATOR registered for tires and s. 30(b).
Held: Application refused. The s. 30(b) ground succeeded because the applicant’s evidence was ambiguous. The Registrar could not tell whether the first use was by the applicant or its licensee, and the applicant did not evidence that any licensed use complied with s. 50. Also, the invoice relied upon was ambiguous with respect to the issue of whether use occurred in Canada or in the United States. Regarding s. 12(1)(d), confusion was likely because both wares are used in connection with the propulsion of vehicles, there is a potential overlap in the channels of trade, the first part of each mark is identical, and the opponent’s mark has been used for a longer period of time.
4. Génération Nouveau Monde v. Teddy, June 28, 2006 (Tremblay) Confusion/Internet Evidence/Evidence of Prosecution File
Proposed use application for TERRANOVA & Design for clothing. Opposition based, inter alia, on s. 12(1)(d) due to confusion with TERRA NOSTRA registered for clothing.
Held: Application refused. Confusion is likely given the similarities between the marks, their wares and their channels of trade.
One of the applicant’s affiants, pursuant to specific instructions from the applicant’s agent, obtained information from specific websites. The Opponent argued that such evidence was inadmissible because it was not possible to effectively cross-examine the affiant, given that they were merely following instructions. The Registrar disagreed, but held that the web pages provided by the affiant only proved that they existed at the time the search was performed, not that the contents were true. The Registrar refused to consider correspondence from the prosecution file that had not been introduced into evidence.
5. Egalaxy Multimedia v. Diane Green, June 30, 2006 (Bradbury) Section 30(a)/Section 30(e)
Proposed use application for NAKED for a variety of wares and the sale of department store-type merchandise over the internet. Opposition based on s. 30(a) with respect to the services and on s. 30(e) because the applicant is not a legal entity and therefore could not intend to use the mark.
Held: Opposition rejected. The application was originally filed in the name of Diane Green, was subsequently amended to identify the applicant as Dianne Green trading as Black Ice by Design Inc., and ultimately amended back to simply Dianne Green. There was no evidence that Black Ice by Design Inc. is a legal entity; rather it appeared more likely that it was being used by Ms. Green as a trading style. In any event, as of the date that is material for s. 30 (the filing date of the application), the application was in the name of Dianne Green and her evidence is not clearly inconsistent with her statement that she intended to use the mark, either directly or through a licensee. The statement of services is acceptable, being analogous to “department store services”.
6. Publications Transcontinental v. Page Cournoyer Publications, July 3, 2006 (Carrière) Confusion
Use-based application for CONTACTS AFFAIRES for, inter alia, a bi-annual business magazine. Opposition based on s. 12(1)(d) due to confusion with LES AFFAIRES registered for printed publications.
Held: Application refused. Both parties use their marks with a business magazine. All the s. 6(5) factors favour the opponent.
7. FMC v. SS&C Technologies Canada, July 5, 2006 (Bradbury) Confusion/Famous Mark/Surrounding Circumstances
Use-based application for FMCMODEL for computer software providing analysis of investment portfolios, namely rebalancing and modeling of investment portfolios. Opposition based, inter alia, on s. 12(1)(d) due to confusion with FMC registered for a lengthy list of industrial chemicals and agricultural products.
Held: Opposition rejected. The opponent claimed that its mark is famous but such a conclusion cannot be reached simply on the basis of the volume of sales or the number of countries in which the mark is registered – the opponent’s evidence fell short of demonstrating that its mark is generally recognized throughout Canada by most segments of the population. Although the opponent argued that software products are increasingly becoming an important component of its product mix, no evidence was filed to show that the opponent has sold or promoted software in Canada and software is not covered by its Canadian registration. Both parties’ wares are of a sophisticated nature and are targeted at a sophisticated audience. The Registrar did not accept that it was a significant surrounding circumstance that both parties have the stock exchange code FMC (on exchanges in different countries) and some mix-ups have resulted. Nor does the fact that the opponent is a publicly traded company result in there being a connection between the two parties’ wares. Overall, the differences in the wares weighed more heavily than the degree of resemblance between the marks. (An appeal has been filed.)
8. Fiesta v. Galletas Siro, July 7, 2006 (Martin) Confusion
Proposed use application for RIO FIESTA & Design for a variety of snack foods, processed cereals and bakery goods. Opposition based on s. 12(1)(d) due to confusion with FIESTA Design registered for candies, chewing gum and licorice.
Held: Opposition rejected. Although both parties sell food products, their wares differ significantly. Moreover, their wares would be sold in different sections of a supermarket and given that the opponent’s wares are sold in display cartons, the opponent’s wares may be primarily sold through convenience stores. The opponent’s wares are sold in individual units and their principal market would be children and teenagers whereas the applicant’s wares are sold in packages typically for social events. State of the register evidence shows that consumers are used to distinguishing FIESTA marks for food products on the basis of their other components and there are significant differences between the two FIESTA marks at issue here.
9. The Saul Zaentz Company v. McMeekin Boldt, July 7, 2006 (Tremblay) Confusion
Proposed use application for LORD OF THE GAMES for computer and video games, etc. and consultation and advising in relationship to retail promotion and merchandising, etc. Opposition based, inter alia, on s. 16(3)(b) due to confusion with LORD OF THE RINGS which is the subject of a previous application by the opponent.
Held: Application refused. The wares associated with each mark overlap and the marks have a high degree of resemblance in all aspects. The applicant filed no evidence whereas the opponent filed evidence of two very successful films and an ancillary merchandising program.
10. L.A. Gear v. Los Angeles Sports Council, July 10, 2006 (Bradbury) Confusion
Proposed use application for LA SPORTS & Design for writing paper, envelopes, notepads, pens, pencils; bags, namely athletic tote and shoulder bags; luggage, lapel pins, buttons, mugs and cups. Opposition based, inter alia, on s. 12(1)(d) due to confusion with L.A. GEAR registered for clothing, clothing accessories, sports bags, footwear and toys.
Held: Application rejected only with respect to bags, namely athletic tote and shoulder bags. The applicant did not meet its onus with respect to those wares because of the direct overlap with the opponent’s wares, the fact that only the opponent has acquired any reputation in Canada, and the resemblance between the marks in idea suggested. The opposition failed with respect to the remaining wares since such wares are not covered by the opponent’s registration and there is only a fairly low resemblance between the marks.
11. N.V. Sumatra Tobacco v. Player’s, July 10, 2006 (Bradbury) Section 30(b)/Use of Mark Simpliciter
Use-based application for HERO for manufactured tobacco products. Opposition based, inter alia, on s. 30(b) because the applicant has not used the mark since the date claimed or has abandoned its use prior to the filing of the application.
Held: Application refused. The opponent met its initial burden by relying on the applicant’s evidence which suggested that the applicant used PLAYER’S & HERO logo, not HERO simpliciter. Although the word HERO appears in the logo, that word never had an independent identity apart from the logo (the logo comprised the head of a sailor, with the word HERO appearing in small letters on his hat).
12. Healthworld v. Dr. Matthias Rath, July 10, 2006 (Bradbury) Distinctiveness
Proposed use application for WORLD HEALTH ALLIANCE for printed publications in the field of healthcare and nutritional supplements and providing training in those fields. WORLD and HEALTH disclaimed. Opposition based on a lack of distinctiveness arising from the opponent’s use of HEALTHWORLD for advertising agency services and other communication services.
Held: Opposition rejected. Both marks are inherently weak and they do not have a high degree of resemblance. The parties’ businesses are quite different – the opponent operates an advertising agency that serves healthcare marketers such as pharmaceutical companies.
13. Interprovincial Lottery et al. v. Monetary Capital, July 11, 2006 (Bradbury) Section 30(i)/Illegal Services
Application for SHOWCASE LOTTO based on proposed use for “electronic retail sales, by means of a global computer network, of prizes provided by others by accepting discounts to be won in an on-line lottery game” and on use for “a lottery game accessible over a global computer network.” LOTTO disclaimed. Opposition based on s. 30(i) in that the applicant could not have been satisfied that it was entitled to use the mark in association with the applied-for services given that such services are illegal pursuant to the Criminal Code.
Held: Application refused. The opponents’ evidence set out a prima facie case that the applicant is not a party authorized by the Code to perform gaming or lottery services. The applicant did not file any evidence or argument. Accordingly, the applicant did not satisfy its legal burden.
14. Concordia University v. 649643 Ontario, July 14, 2006 (Carrière) Section 9
Proposed use application for Sting Design for a variety of wares and entertainment services, namely the performance and presentation of hockey games and the rendering thereof through the media of radio, television and printed publications. Opposition based on s. 12 in that the mark is prohibited by s. 9 in view of the opponent’s official mark STINGERS & Design.
Held: Opposition rejected. Both marks comprise a cartoon bee character but they are distinct representations and the opponent cannot monopolize the representation of a bee.
15. Wing Nuts Café v. Justin Joyce, July 17, 2006 (Bradbury) Use with Services/Section 4
Proposed use application for WING NUTS for sit-in and carry-out restaurant services. Opposition based on s. 16(3)(a) due to confusion with WING NUTS, previously used by the opponent for sit-in and carry-out restaurant services and chicken wings.
Held: Opposition rejected. The opponent did not show that it had used its mark prior to the filing of the application. Although the opponent took steps towards using its mark prior to the filing of the application, none of the steps (sending an advertisement order to a publisher, reserving a name with a provincial government, or discussing a concept with graphic designers) qualify as use in respect of services pursuant to s. 4.
16. Faraday v. General Electric, July 28, 2006 (Bradbury) Confusion
Proposed use application for FARADAY for equipment for monitoring the performance of oil-filled transformers to warn against catastrophic failure of the power transformer. Opposition based on s. 12(1)(d) due to confusion with FARADAY registered for inter alia transformers, alarm and sight signals, switches and signals for operating fire detectors, electrical relays for use in fire alarms system control equipment.
Held: Application refused. While there are differences between the parties’ wares, businesses and trades, the connection between the two parties’ wares is close enough for a finding of confusion, especially given that the opponent has been using the identical mark in Canada for much longer than has the applicant.
17. London Drugs v. Purepharm, August 4, 2006 (Tremblay) Descriptiveness/Place of Origin
Proposed use application for PHARMACY.CA for human and veterinary pharmaceutical products and custom production of pharmaceuticals of selected dosage strength and composition. .CA disclaimed. Opposition based, inter alia, on s. 12(1)(b) in that the mark is clearly descriptive of the character or quality of the wares and services and either clearly descriptive or deceptively misdescriptive of their place of origin.
Held: Application refused. The mark both clearly describes the character of the wares and services (i.e. that they relate to a pharmacy) and their place of origin (i.e. that the wares and services are available by electronic means and originate from a pharmacy in Canada).
18. TBG The Bicycle Group v. Rona, August 23, 2006 (Carrière) Section 30(a)/ Sponsorship Services/Section 30(b)/Confusion
Proposed-use application for EQUIPE CYCLISTE RONA CYCLING TEAM & Design for promotional items and services related to the sponsorship of bicycle racers. Opposition based, inter alia, on s. 30(a), s. 30(b) because the applicant does not intend to use the mark to identify the source of the wares but rather to promote its retail services, and s. 12(1)(d) due to confusion with KONA registered for bicycles, cycling clothing, … operation and management of bicycle racing events.
Held: Application refused on the basis of s. 12(1)(d). The applicant did not discharge its burden to prove that confusion is unlikely. The opponent’s mark is more inherently distinctive and has been in use longer than the applicant’s mark with respect to bicycle related wares/services. The wares/services are similar and there is a resemblance between the marks. The fact that the applicant’s RONA mark may be well known in respect of building materials centres, hardware stores or garden centres cannot offset the other factors as a whole.
Re s. 30(a): the services are described sufficiently specifically. They are services within the meaning of s. 4.
Re s. 30(b): using a mark to promote business activities does not preclude also using the mark to identify source; it is also clear from the evidence that the applicant sells the wares, rather than merely giving them away.
19. RA Brands v. Calsper Developments, August 23, 2006 (Bradbury) Confusion
Proposed use application for REMINGTON HOMES COUNTRY STORE for operation of a real estate sales office. Opposition based, inter alia, on s. 12(1)(d) due to confusion with REMINGTON registered for guns, camping equipment and bed throws.
Held: Opposition rejected. The differences between the wares and services weigh more heavily than any resemblance between the marks.
20. RA Brands v. Calsper Developments, August 23, 2006 (Bradbury) Section 30(b)/Initial Burden/Clearly Inconsistent Evidence
Use-based application for THE REMINGTON GROUP & Design for development, management, and financial lending services relating to all aspects of residential, commercial and industrial properties and real estate projects and developments... Opposition based, inter alia, on s. 30(b).
Held: Opposition rejected. The opponent relied upon the applicant’s evidence to meet its initial burden, but ambiguities in the applicant’s evidence do not amount to contradictions. The applicant’s affiant attested that it was first registered under the Ontario New Homes Warranty Program in 1992 and on cross-examination stated that it is illegal to build houses without being so registered. However, there was no evidence that this warranty program existed at the applicant’s claimed date of first use (1991) and, even if it did, it is questionable if it would have prevented the applicant from using its mark in the promotion of its services
21. Crossworld Software v. Crossworlds Software, August 28, 2006 (Bradbury) Section 30(e)/Use of Mark Prior to Filing Proposed Use Application/Confusion
Proposed use application for CROSSWORLDS for consultancy, design testing, research and advisory services, all relating to computer programming… Opposition based, inter alia, on s. 30(e) because the applicant’s mark was used prior to the filing of its proposed use application and s. 16(3)(c) due to confusion with the trade name Crossworld Software, Inc. previously used by the opponent for computer software and related services including computer consultation services.
Held: Application refused on both grounds. The opponent met its initial burden with respect to s. 30 by relying on the applicant’s own evidence of a software license agreement that predated the filing of the application. Regarding the likelihood of confusion, the mark and name are almost identical and both parties sell software and supporting services to help businesses improve their operations.
22. Nestlé v. Miniminit, August 28, 2006 (Bradbury) Confusion
Proposed use application for ESTEA’M for tea. Opposition based, inter alia, on s. 12(1)(d) due to confusion with NESTEA registered for tea.
Held: Opposition rejected. The differences between the marks in appearance, sound and idea suggested are sufficient on their own to make confusion unlikely.
IV. SECTION 45 DECISIONS
1. Kirby Eades Gale Baker v. Zahnfabrik Bad Nauheim, July 10, 2006 (Bradbury) Section 50
NATURADENT registered for artificial teeth.
Held: Registration maintained. Although the license agreement submitted expired before the issuance of the s. 45 notice, the Registrar accepted that the registrant was entitled to the benefit of s. 50 because its affiant clearly swore to the fact that the registrant controlled its licensee’s use, the affiant spoke to the arrangements as being ongoing, and a license need not be in writing.
2. Kryton Holdings v. ICI Canada, July 11, 2006 (Carrière) Procedure
SMART & Design registered for boots, shoes and slippers.
Held: Registration maintained. The registration included a claim for colour. The evidence filed by the registrant only included black and white prints of its labels. The requesting party pointed this out in its written argument and the registrant subsequently obtained leave to file a further affidavit containing a colour copy of its label.
3. Gowling Lafleur Henderson v. Audio Products International, July 19, 2006 (Carrière) Deviation from Registered Mark
IMAGE & Design registered for speaker boxes. The dot over the “i” is red and the colour red is claimed as a trade mark feature.
Held: Registration expunged. The Registrar found that the distinctive features of the design of the registered mark were 1) the rectangular background, 2) the font used for the word IMAGE, and 3) the red dot on the “i”. None of these features appear in the variations of the mark used by the registrant. The Registrar noted that the registrant chose to register a design version of IMAGE, not the word IMAGE simpliciter.
4. Fetherstonaugh v. Pharmasave Drugs, July 20, 2006 (Tremblay) Section 50/ Free Publications
PHARMASAVE HEALTHNOTES registered for “periodical publications newsletter publications.“
Held: Registration expunged on two basis. The evidence supported the conclusion that the free newsletter is used as part of the operation of the retail stores, i.e. the mark is not used in the normal course of trade in association with wares. In addition, the newsletters bear the name of Pharmasave Drugs (National), not the registrant, and the statement that the registrant publishes the newsletters “in co-operation with Pharmasave Drugs (National)” is insufficient to invoke s. 50. (The Registrant attempted unsuccessfully to clarify the relationship between the two companies in its written argument.)
