Date: 20040331
Docket: T-320-01
Citation: 2004 FC 502
Toronto, Ontario, March 31st, 2004
Present: The Honourable Madam Justice Heneghan
BETWEEN:
APOTEX INC.
Plaintiff
and
ELI LILLY AND COMPANY and
ELI LILLY CANADA INC.
Defendants
REASONS FOR ORDER AND ORDER
INTRODUCTION
[1] Apotex Inc. ("Apotex" or "Plaintiff"), commenced this action on February 23, 2001 against the Defendants Eli Lilly and Company ("Lilly U.S.") and Eli Lilly Canada Inc. ("Lilly Canada") for damages, pursuant to the Patented Medicines (Notice of Compliance) Regulations SOR/93-133 (the "Regulations"). Lilly U.S. and Lilly Canada now move for the entry of summary judgment pursuant to the Federal Court Rules, 1998 SOR/98-106 as amended (the "Rules"). Lilly U.S. seeks an Order striking out the action against it and Lilly Canada seeks an Order dismissing the Plaintiff's action with respect to its claim for unjust enrichment.
FACTS
i) The Parties
[2] Apotex is a pharmaceutical manufacturer incorporated under the laws of Ontario that produces brand-name "generic" pharmaceutical products. That description distinguishes its products from those pharmaceutical products utilizing the same active medicinal ingredients that have received prior approval from the Minister of Health for marketing in Canada, known as "innovator" products.
[3] Lilly U.S. is a body corporate incorporated under the laws of the State of Indiana, having an office and place of business in Indianapolis, Indiana.
[4] Lilly Canada is a wholly owned subsidiary of Lilly U.S. and is incorporated under the laws of Canada. According to Apotex, Lilly U.S. "exercises complete control" over the activities of Lilly Canada, including a decision by the latter to apply for the issuance of a Notice of Compliance ("NOC") in Canada and the contents of the New Drug Submission ("NDS") in that regard.
ii) Prior Litigation
[5] The background to this action is a proceeding commenced by Lilly U.S. and Lilly Canada on June 14, 1993, seeking an order of prohibition to prevent the Minister of Health and Welfare from issuing a NOC to Apotex in respect of the drug nizatidine until the expiry of certain patents owned by Lilly U.S. On February 9, 1995, Justice McGillis granted the requested prohibition order, notwithstanding the fact that the nizatidine acquired by Apotex was licensed. The decision is reported as Eli Lilly & Co. et al. v. Apotex Inc. et al. (1995), 91 F.T.R. 181.
[6] Apotex appealed from this order and on April 1, 1996, the Federal Court of Appeal dismissed the appeal. It found that while the manufacturer of capsules containing licensed nizatidine was not infringing, the agreement between Apotex and Novopharm Limited ("Novopharm") to acquire licensed nizatidine constituted a sublicence that was prohibited by Novopharm's compulsory licence. This decision is reported as Eli Lilly & Co. et al. v. Apotex Inc. et al. (1996), 195 N.R. 378 (F.C.A.).
[7] Upon appeal to the Supreme Court of Canada, Apotex was successful. The Supreme Court of Canada, in a decision delivered on July 9, 1998, reinstated Novopharm's compulsory licence and dismissed Lilly's application for the order of prohibition which had been issued by the Federal Court Trial Division. This decision is reported as Eli Lilly & Co. et al. v. Novopharm Ltd., [1998] 2 S.C.R. 129.
iii) Pleadings in this action
a) Plaintiff's Statement of Claim
[8] Apotex obtained a NOC for its pharmaceutical product using nizatidine on April 30, 1997, after it had commenced proceedings in this Court for an order of mandamus, in cause T-1237-95. In its Statement of Claim in the present action, Apotex alleges that it was still delayed in entering the market due to a long time for preparation and commercialization of its non-infringing product. It alleges that it was unable to enter the market with its non-infringing product until the fourth quarter of 1998. Apotex says that it ordered licensed nizatidine through Novopharm after the Supreme Court of Canada reinstated the Novopharm licence and set aside the order of prohibition on July 9, 1998.
[9] Apotex claims that, in the meantime, on or about April 30, 1996, the authorized delegates of the Minister of Health determined that its product apo-nizatidine was effective and safe and, accordingly, would be eligible for the issuance of a NOC if the Defendants had not commenced their prohibition proceedings.
[10] Apotex further alleges that during the period of delay, the Defendants entered into an agreement with Pharmascience Inc. to enable the Defendants to sell their nizatidine products purportedly as a "generic" product under the Pharmascience label. In consequence, the Defendants, together with Pharmascience, "captured a valuable long-term" market position that otherwise would have been enjoyed by Apotex and were unjustly enriched. Specifically, Apotex sets forth the basis of its claim for unjust enrichment in paragraphs 41 to 45 of its Amended Statement of Claim as follows:
41. By reason of the Prohibition Proceeding and the consequent delay in Apotex getting to market with its nizatidine capsules, Lilly was free from competition by Apotex during the extended monopoly period of two and one-half years. There were no other competitors in this period.
42. By reason of this delay, Lilly made all of the sales for nizatidine capsules that would have been made by Apotex and did so at the higher price charged by Lilly for its product.
43. By reason of the foregoing:
(a) Lilly earned sales revenues that, but for its invocation of the Patent Regulations, it would not have obtained;
(b) Lilly earned its sales revenues as aforesaid at the expense of Apotex which was deprived of the opportunity to make such sales and at the expense of provincial governments, insurers and consumers who would have paid substantially less for Apo-Nizatidine;
(c) There is no juristic reason to permit Lilly to retain its enrichment and to cause Apotex to be deprived of the corresponding benefit; and
(d) In the absence of a disgorgement of profits, every patentee has an incentive to abuse the Patent Regulations to unjustly delay entry of every generic product at the expense of the Generic and the healthcare system, in the knowledge that the profits to be made will greatly exceed the damages for which it will be liable for the delay caused to the Generic.
44. Additionally, during the period in which Apotex was unjustly delayed, Lilly arranged with Pharmascience to launch Lilly's capsules purportedly as a generic product under the Pharmascience label. Lilly and Pharmascience thus captured a valuable long-term position in the generic market which otherwise would have gone to Apotex.
45. Apotex therefore pleads that the Defendants were unjustly enriched at Apotex's expense.
[11] Apotex bases this action upon section 8 of the Regulations, either as originally enacted in 1993 or as amended in 1998, and says that the Defendants are liable to it by way of damages or profits. It alleges that the two Defendants acted as a common enterprise and more particularly, that Lilly U.S. gave directions that were carried out by Lilly Canada. The Plaintiff says that "in law and in equity", the actions of Lilly Canada must be considered to be the actions of Lilly U.S. and that, consequently, Lilly U.S. is liable to it.
[12] Specifically, Apotex seeks the following relief in its Statement of Claim:
(a) damages suffered by Apotex in respect of the drug nizatidine by reason of the commencement of a proceeding by the Defendants pursuant to the Patented Medicines (Notice of Compliance) Regulations (the "Patent Regulations"), in respect of:
(i) lost sales during the period in which Apotex was excluded from the nizatidine market;
(ii) lost sales and permanent market share lost due to the Defendants' launch of their "generic" nizatidine product under the Pharmascience label prior to Apotex's launch of its nizatidine product;
(iii) expenses incurred to develop, obtain approval and scale up of a non-infringing process to manufacture nizatidine;
(iv) the additional cost of nizatidine made using the aforementioned process;
(v) legal expenses incurred in prosecuting a mandamus proceeding, Court File No. T-1237-95, to the extent not recoverable in that proceeding;
(vi) any amount which Apotex may be found to be liable to the Defendants in an action brought by the Defendants against Apotex alleging infringement, Court File No. T-1100-97, including costs;
(vii) legal expenses incurred in defending the proceeding in Court File No. T-1100-97, to the extent not recoverable in that proceeding;
all as more particularly hereinafter detailed;
(b) an accounting of the profits realized by the Defendants in respect of the lost sales and lost market share of nizatidine as described in subparagraphs (a)(i) and (ii), if Apotex so elects in the alternative to subparagraphs (a)(I) and (ii);
(c) disgorgement of the Defendants' revenues of nizatidine attributable to the higher prices charged by the Defendants for their nizatidine drug product, unjustly realized by the Defendants in the period during which Apotex was excluded from the market by reason of the commencement of a proceeding by the Defendants under the Patent Regulations, as more particularly hereinafter detailed;
(d) a declaration that, by reason of the claim set out in subparagraph 1(a)(vi), Apotex is entitled to be indemnified by the Defendants in respect of all amounts found to be owing to the Defendants by Apotex in Court File No. T-1100-97, including costs, and that, accordingly, Apotex is not and will not be indebted to the Defendants in connection with any amount which may be awarded to the Defendants in Court File No. T-1100-97, including costs, or in the alternative, a declaration that Apotex is entitled to set-off against any amount awarded against Apotex in favour of the Defendants in Court File No. T-1100-97, including costs, the amount of damages claimed by subparagraph 1(a)(vi);
(e) pre-judgment and post-judgment interest;
(f) costs on a scale to be determined by this Honourable Court; and
(g) such further and other relief as this Honourable Court deems just.
b) Defendants' Pleadings
[13] Lilly U.S. and Lilly Canada have each filed Statements of Defence to the Plaintiff's Statement of Claim. Lilly U.S. denies any liability to Apotex and claims that there is no cause of action against it or jurisdiction over it, relative to section 8 of the Regulations. It asserts that there is no independent source of jurisdiction for this Court to assume jurisdiction over it. More particularly, Lilly U.S. alleges that no claim lies against it because it is not a "first person" within the meaning of the Regulations. It seeks dismissal of the action against it, with costs on a solicitor and client scale.
[14] Lilly Canada, in its Statement of Defence, challenges the validity of section 8, disputes that the Plaintiff suffered any loss, and specifically challenges the Plaintiff's claim for unjust enrichment and the Court's jurisdiction to entertain the claim for an accounting of profits and for unjust enrichment.
[15] The Defendants now seek the entry of summary judgment. Lilly U.S. moves to have the Plaintiff's action against it dismissed. Lilly Canada seeks the entry of partial summary judgment, relative to the Plaintiff's claim for unjust enrichment.
SUBMISSIONS
i) Submissions of Lilly U.S.
[16] Lilly U.S. bases its motion upon the definition of "first person" provided in the Regulations. It argues that section 8 grants a cause of action for damages against only a "first person", as defined in the Regulations. Lilly U.S. argues that it is not the "first person", that the NOC was granted to Lilly Canada and that it was a party to the prohibition proceedings only because it was the owner of the '248 patent that was the subject of the prohibition proceedings.
[17] Further, Lilly U.S. submits that in the absence of jurisdiction over it arising from section 8, this Court does not have jurisdiction to entertain this action. It argues that the Federal Court is a statutory court and does not have inherent jurisdiction to determine matters. The factors necessary to establish jurisdiction, as discussed in ITO-International Terminal Operators Limited v. Miida Electronics Inc., [1986] 1 S.C.R. 752 do not exist in the present case. Those factors are the following:
a) a statutory grant of jurisdiction by the Federal Parliament;
b) an existing body of law which is essential to the disposition of the case and which establishes the statutory grant of jurisdiction; and
c) the law upon which the case is based must be a "law of Canada" as the phrase is used in section 101 of the Constitution Act, 1867.
[18] Lilly U.S. argues that neither the Regulations nor section 20 of the Federal Courts Act, R.S.C. 1985, c. F-7, as amended, provide a basis for Apotex to claim against a person other than the first person. Section 8 provides a right to claim damages only against a first person and Lilly U.S. is not such an individual.
[19] Further, Lilly U.S. argues that section 20 of the Federal Courts Act, supra, does not provide an open-ended right for the Court to adjudicate upon any claim for damages. Section 20(1) defines the scope of the Court's exclusive original jurisdiction relative to claims for impeachment or conflicts. Section 20(2) addresses the jurisdiction of the Federal Court relative to remedies respecting patents of invention. Absent jurisdiction against Lilly U.S. arising from the Regulations, the Plaintiff has no right to claim damages against this party and summary judgment should issue on this ground alone.
[20] Finally, Lilly U.S. argues that there is no basis upon which the Court can lift the corporate veil relative to the "common enterprise" theory advanced by Apotex. It submits that in the absence of allegations that the corporation constitutes a "sham", is a vehicle for wrongdoing, or there is statutory authorization for lifting the corporate veil, then there is no basis for the Court to engage in that exercise. In this regard, Lilly U.S. relies on Meredith v. Canada (2000), 291 N.R. 352 (F.C.A.), Kosmopoulos v. Constitution Insurance Co., [1987] 1 S.C.R. 2, Haskett v. Equifax Canada Inc. (2003), 63 O.R. (3d) 577 (C.A.) and Canada v. Jennings, [1994] 2 C.T.C. 106 (F.C.A.).
[21] Further, the Regulations do not provide that the patentee and the "first person", as that term is defined, are to be treated as one legal person. If that was the intention of the Governor-in-Council, it would have clearly said so. In this regard, Lilly U.S. cites Imperial Oil Resources Ltd. v. Canada (Minister of Indian Affairs and Northern Development) (1997), 139 F.T.R. 106 and Meredith, supra.
ii) Submissions of Lilly Canada
[22] Lilly Canada argues that there is no jurisdiction arising from the Federal Courts Act, supra or from the Regulations to entertain the Plaintiff's claim against it for unjust enrichment.
[23] Lilly Canada also relies on the decision of the Supreme Court of Canada in ITO-International Terminal Operators Ltd., supra in support of its submissions concerning jurisdiction. It argues that section 8 of the Regulations, as amended, allows a second person to claim losses resulting from a delay in the issuance of a NOC but does not permit the second person to advance a claim for unjust enrichment against the first person.
[24] As well, Lilly Canada argues that the circumstances alleged in the Plaintiff's Statement of Claim do not meet the conditions of a claim for unjust enrichment. It says that such claim requires three elements, as discussed in Pettkus v. Becker, [1980] 2 S.C.R. 834, as follows:
a) an enrichment;
b) a corresponding deprivation; and
c) the absence of any juristic reason for the enrichment.
[25] Lilly Canada argues that the issuance of the prohibition order by the Federal Court is a juristic reason that would defeat a claim for unjust enrichment, even if such claim were within the jurisdiction of the Court or could be established. In the result, there is no genuine issue for trial arising from the Plaintiff's claim for unjust enrichment and judgment should be entered accordingly against the Plaintiff on that part of its claim.
PLAINTIFF'S SUBMISSIONS
i) Response to Lilly U.S.
[26] The Plaintiff argues that throughout the prohibition proceedings jointly commenced in 1993 by Lilly U.S. and Lilly Canada, Lilly U.S. exercised complete control, including the decision to abandon or discontinue those proceedings. In its Statement of Claim, Apotex alleges that Lilly U.S. and Lilly Canada were part of a "common enterprise".
[27] Apotex also refers to unsuccessful attempts by defendants in other actions to strike out statements of claim involving interpretation of section 8 of the Regulations, in either its original form or as amended. It refers to a number of decisions in which this Court has found that where there is uncertainty in an area of law or a question of statutory interpretation arises, it is inappropriate for the issue to be decided without a trial. In this regard, the Plaintiff refers to Houle v. Canada, [2001] 1 F.C. 102 (T.D.), Apotex Inc. v. Eli Lilly Canada Inc. et al. (2001), 15 C.P.R. (4th) 129 (F.C.T.D.), (aff'd) (2002), 22 C.P.R. (4th) 19 (F.C.A.), Apotex Inc. v. Syntex Pharmaceutical Ltd. et al. (2001), 16 C.P.R. (4th) 473 (F.C.T.D.), (aff'd) (2002), 224 F.T.R. 160 (F.C.A.).
[28] As well, Apotex refers to prior unsuccessful attempts by the Defendants to strike out this action. In March 2001, Lilly Canada moved to strike this proceeding on the basis that it disclosed no reasonable cause of action. It argued that section 8 of the Regulations is inapplicable to the facts alleged and that some aspects of the Plaintiff's claim, including the claim for unjust enrichment, were beyond the jurisdiction of the Court.
[29] At the same time, Lilly U.S. brought a motion to strike the action against it on the basis that it was not a proper party. In an order dated July 11, 2001, Justice Blanchard of this Court dismissed both motions. In his reasons for order, he concluded that the interpretation of section 8 "... is a complex matter of statutory interpretation and is better left for argument at trial where proper evidence may be adduced ..." Apotex Inc. v. Eli Lilly Canada Inc. et al. (2001), 13 C.P.R. (4th) 78 at 81-82 (F.C.T.D.). By Order dated October 16, 2002, the Federal Court of Appeal dismissed an appeal by the Defendants, with costs in the amount of $10,000.00. The Plaintiff argues that this award of costs is a recognition of the "frivolous nature" of the appeal.
[30] The Plaintiff also relies upon a decision of Justice Blais in this action, dealing with its successful appeal from an Order of the Prothonotary refusing leave to amend the Statement of Claim. That decision is reported as Apotex Inc. v. Eli Lilly and Co. (2001), 15 C.P.R. (4th) 129 (F.C.T.D.).
[31] The Plaintiff argues that the interpretation of section 8, concerning both the status of Lilly U.S. and the availability of a claim for unjust enrichment, raises a genuine issue for trial within the meaning of the Rules. It disputes the interpretation given to section 8 by the Defendants concerning the issue of jurisdiction and argues that the claim for unjust enrichment is within the jurisdiction of this Court and within the relief contemplated by section 8.
[32] Further, the Plaintiff argues that the relief provided by section 8 is not limited to a claim for losses but can include a claim for disgorgement of profits, and refers to section 8(4) which grants this Court jurisdiction to order relief by means of damages "or profits" as the case may require. In any event, it says that the scope of section 8 should be dealt with by the trial judge.
[33] The Plaintiff challenges reliance by Lilly Canada upon an affidavit filed in an unrelated proceeding, that is cause number T-442-96. This affidavit, sworn by Mr. H.B. Radomski who is a member of the law firm representing the Plaintiff in this matter, addresses the meaning of a "first person" in the proceedings that are the subject of cause number T-442-96. The Plaintiff argues that the Defendant Lilly Canada improperly relies on this affidavit. It submits that insofar as affidavit evidence in the present motion is concerned, the Court should consider the affidavit of Dr. Bernard Sherman, filed in response to the Defendants' motions.
[34] According to the Plaintiff, section 8 of the Regulations clearly provides a range of remedies relative to the issue of patent infringement. Section 20 of the Federal Courts Act, supra, grants jurisdiction to the Court over matters relating to patent infringement. Section 8 also deals with remedies and is not merely a means of providing relief in the context of administrative law, as argued by the Defendants. The Regulations come into play only when a patent claiming a medicine or use of a medicine is placed on the Patent Register and, according to the Plaintiff, "is enjoyed by a generic in an allegation of non infringement of the patent or an allegation of its invalidity or both". The Plaintiff argues that all matters raised by the Regulations must necessarily relate to a "patent of invention" and come within the jurisdictional framework of section 20(2) of the Federal Courts Act, supra.
[35] Apotex takes the position, in response to the argument that Lilly U.S. is not a "first person", that Lilly U.S. exercises complete control over the activities of Lilly Canada and is, in fact and in law, a "first person". It relies on jurisprudence concerning relationships between corporate bodies and the exercise of control to argue that Lilly U.S. has acted like a first person and consequently, is a proper party to this action.
[36] Apotex also submits that in this motion for summary judgment, the allegations in the Statement of Claim must be accepted as true and that no evidence has been advanced by the Defendant Lilly U.S. to counter the allegations of the exercise of control by Lilly U.S. over the actions of Lilly Canada in initiating the prohibition proceeding in 1993 that underlies this action.
[37] Further, Apotex argues that in the face of the allegations and the absence of evidence to contradict them, the meaning of the term "first person" is not the primary issue. The suit against Lilly U.S. is based upon its role as the legal person exercising control over the actions of Lilly Canada.
[38] Apotex also argues that the Defendant Lilly U.S. has already unsuccessfully tried to avoid this litigation, first by seeking to have the action dismissed as disclosing no reasonable cause of action and second, by opposing the Plaintiff's motion to amend the Statement of Claim. Apotex says that to date, this Court has found that the issue raised by the parties in the various interlocutory proceedings were complex, involving difficult questions of statutory interpretation, and that they should not be resolved on a summary basis but should await full adjudication at trial.
[39] As well, Apotex refers to similar unsuccessful motions undertaken in the proceedings where the Court refused the relief sought by defendants who advanced arguments parallel to those now raised by Lilly U.S. The Plaintiff submits this respect for the principle of judicial comity requires this Court to follow the approach taken by other courts and to conclude that the issues raised by the Defendants are too complex to be determined without a trial.
ANALYSIS
i) General
[40] The basis for the Plaintiff's claim in this action is section 8 of the Regulations. Since its success in obtaining leave to amend its Statement of Claim to plead both the original and amended version of section 8, in response to the Statement of Defence filed by the Defendants, the Plaintiff relies on both versions. The original form of section 8 provides as follows:
| (1) If an application made under subsection 6(1) is withdrawn or discontinued by the first person or is dismissed by the court hearing the application or if an order preventing the Minister from issuing a notice of compliance, made pursuant to that subsection, is reversed on appeal, the first person is liable to the second person for any loss suffered during the period (a) beginning on the date, as certified by the Minister, on which a notice of compliance would have been issued in the absence of these Regulations, unless the court is satisfied on the evidence that another date is more appropriate; and (b) ending on the date of the withdrawal, the discontinuance, the dismissal or the reversal. (2) A second person may, by action against a first person, apply to the court for an order requiring the first person to compensate the second person for the loss referred to in subsection (1). (3) The court may make an order under this section without regard to whether the first person has commenced an action for the infringement of a patent that is the subject matter of the application. (4) The court may make such order for relief by way of damages or profits as the circumstances require in respect of any loss referred to in subsection (1). (5) In assessing the amount of compensation the court shall take into account all matters that it considers relevant to the assessment of the amount, including any conduct of the first or second person which contributed to delay the disposition of the application under subsection 6(1). |
|
(1) Si la demande présentée aux termes du paragraphe 6(1) est retirée ou fait l'objet d'un désistement par la première personne ou est rejetée par le tribunal qui en est saisi, ou si l'ordonnance interdisant au ministre de délivrer un avis de conformité, rendue aux termes de ce paragraphe, est annulée lors d'un appel, la première personne est responsable envers la seconde personne de toute perte subie au cours de la période: a)débutant à la date, attestée par le ministre, à laquelle un avis de conformité aurait été délivré en l'absence du présent règlement, sauf si le tribunal estime d'après la preuve qu'une autre date est plus appropriée; b)se terminant à la date du retrait, du désistement ou du rejet de la demande ou de l'annulation de l'ordonnance. (2) La seconde personne peut, par voie d'action contre la première personne, demander au tribunal de rendre une ordonnance enjoignant à cette dernière de lui verser une indemnité pour la perte visée au paragraphe (1). (3) Le tribunal peur rendre une ordonnance aux termes du présent article sans tenir compte du fait que la première personne a institué ou non une action pour contrefaçon du brevet visé par la demande. (4) Le tribunal peut rendre l'ordonnance qu'il juge indiquée pour accorder réparation par recouvrement de dommages-intérêt ou de profits à l'égard de la perte visée au paragraphe (1). (5) Pour déterminer le montant de l'indemnité à accorder, le tribunal tient compte des facteurs quIil juge pertinents à cette fin, y compris, le cas échéant, la conduite de la première personne ou de la seconde personne qui a contribué à retarder le règlement de la demande visée au paragraphe 6(1). |
[41] The amended version is as follows:
| (1) If an application made under subsection 6(1) is withdrawn or discontinued by the first person or is dismissed by the court hearing the application or if an order preventing the Minister from issuing a notice of compliance, made pursuant to that subsection, is reversed on appeal, the first person is liable to the second person for any loss suffered during the period (a) beginning on the date, as certified by the Minister, on which a notice of compliance would have been issued in the absence of these Regulations, unless the court is satisfied on the evidence that another date is more appropriate; and (b) ending on the date of the withdrawal, the discontinuance, the dismissal or the reversal. (2) A second person may, by action against a first person, apply to the court for an order requiring the first person to compensate the second person for the loss referred to in subsection (1). (3) The court may make an order under this section without regard to whether the first person has commenced an action for the infringement of a patent that is the subject matter of the application. (4) The court may make such order for relief by way of damages or profits as the circumstances require in respect of any loss referred to in subsection (1). (5) In assessing the amount of compensation the court shall take into account all matters that it considers relevant to the assessment of the amount, including any conduct of the first or second person which contributed to delay the disposition of the application under subsection 6(1). SOR/98-166, ss. 8, 9. |
|
(1) Si la demande présentée aux termes du paragraphe 6(1) est retirée ou fait l'objet d'un désistement par la première personne ou est rejetée par le tribunal qui en est saisi, ou si l'ordonnance interdisant au ministre de délivrer un avis de conformité, rendue aux termes de ce paragraphe, est annulée lors d'un appel, la première personne est responsable envers la seconde personne de toute perte subie au cours de la période : a) débutant à la date, attestée par le ministre, à laquelle un avis de conformité aurait été délivré en l'absence du présent règlement, sauf si le tribunal estime d'après la preuve qu'une autre date est plus appropriée; b) se terminant à la date du retrait, du désistement ou du rejet de la demande ou de l'annulation de l'ordonnance. (2) La seconde personne peut, par voie d'action contre la première personne, demander au tribunal de rendre une ordonnance enjoignant à cette dernière de lui verser une indemnité pour la perte visée au paragraphe (1). (3) Le tribunal peut rendre une ordonnance aux termes du présent article sans tenir compte du fait que la première personne a institué ou non une action pour contrefaçon du brevet visé par la demande. (4) Le tribunal peut rendre l'ordonnance qu'il juge indiquée pour accorder réparation par recouvrement de dommages-intérêts ou de profits à l'égard de la perte visée au paragraphe (1). (5) Pour déterminer le montant de l'indemnité à accorder, le tribunal tient compte des facteurs qu'il juge pertinents à cette fin, y compris, le cas échéant, la conduite de la première personne ou de la seconde personne qui a contribué à retarder le règlement de la demande visée au paragraphe 6(1). DORS/98-166, art. 8 et 9. |
[42] Section 2 defines certain terms. The definitions of "court", "first person", "notice of compliance", "patent list" and "second person" are relevant and provide as follows:
| In these Regulations, "court" means the Federal Court of Canada or any other superior court of competent jurisdiction; "first person" means the person referred to in subsection 4(1); "notice of compliance" means a notice issued under section C.08.004 of the Food and Drug Regulations; "patent list" means a list of all patents that is submitted pursuant to section 4; "second person" means the person referred to in subsection 5(1) or (1.1), as the case may be. |
|
Les définitions qui suivent s'appliquent au présent règlement. « tribunal » La Cour fédérale du Canada ou tout autre cour supérieure compétente. « première personne » La personne visée au paragraphe 4(1). « avis de conformité » Avis délivré au titre de l'article C.08.004 du Règlement sur les aliments et drogues. « liste de brevets » Liste de brevets soumise aux termes de l'article 4. « _seconde personne_ » Selon le cas, la personne visée aux paragraphes 5(1) ou (1.1). |
[43] Section 6 is relevant and provides as follows:
| 6. (1) A first person may, within 45 days after being served with a notice of an allegation pursuant to paragraph 5(3)(b) or (c), apply to a court for an order prohibiting the Minister from issuing a notice of compliance until after the expiration of a patent that is the subject of the allegation.(2) The court shall make an order pursuant to subsection (1) in respect of a patent that is the subject of one or more allegations if it finds that none of those allegations is justified. (3) The first person shall, within the 45 days referred to in subsection (1), serve the Minister with proof that an application referred to in that subsection has been made. (4) Where the first person is not the owner of each patent that is the subject of an application referred to in subsection (1), the owner of each such patent shall be made a party to the application. (5) In a proceeding in respect of an application under subsection (1), the court may, on the motion of a second person, dismiss the application (a) if the court is satisfied that the patents at issue are not eligible for inclusion on the register or are irrelevant to the dosage form, strength and route of administration of the drug for which the second person has filed a submission for a notice of compliance; or (b) on the ground that the application is redundant, scandalous, frivolous or vexatious or is otherwise an abuse of process. (6) For the purposes of an application referred to in subsection (1), where a second person has made an allegation under subparagraph 5(1)(b)(iv) or (1.1)(b)(iv) in respect of a patent and where that patent was granted for the medicine itself when prepared or produced by the methods or processes of manufacture particularly described and claimed or by their obvious chemical equivalents, it shall be considered that the drug proposed to be produced by the second person is, in the absence of proof to the contrary, prepared or produced by those methods or processes. (7) On the motion of a first person, the court may, at any time during a proceeding, (a) order a second person to produce any portion of the submission for a notice of compliance filed by the second person relevant to the disposition of the issues in the proceeding and may order that any change made to the portion during the proceeding be produced by the second person as it is made; and (b) order the Minister to verify that any portion produced corresponds fully to the information in the submission. (8) A document produced under subsection (7) shall be treated confidentially. (9) In a proceeding in respect of an application under subsection (1), a court may make any order in respect of costs, including on a solicitor-and-client basis, in accordance with the rules of the court. (10) In addition to any other matter that the court may take into account in making an order as to costs, it may consider the following factors: (a) the diligence with which the parties have pursued the application; (b) the inclusion on the certified patent list of a patent that should not have been included under section 4; and (c) the failure of the first person to keep the patent list up to date in accordance with subsection 4(6). |
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6. (1) La première personne peut, dans les 45 jours après avoir reçu signification d'un avis d'allégation aux termes des alinéas 5(3)b) ou c), demander au tribunal de rendre une ordonnance interdisant au ministre de délivrer un avis de conformité avant l'expiration du brevet visé par l'allégation. (2) Le tribunal rend une ordonnance en vertu du paragraphe (1) à l'égard du brevet visé par une ou plusieurs allégations si elle conclut qu'aucune des allégations n'est fondée. (3) La première personne signifie au ministre, dans la période de 45 jours visée au paragraphe (1), la preuve que la demande visée à ce paragraphe a été faite. (4) Lorsque la première personne n'est pas le propriétaire de chaque brevet visé dans la demande mentionnée au paragraphe (1), le propriétaire de chaque brevet est une partie à la demande. (5) Lors de l'instance relative à la demande visée au paragraphe (1), le tribunal peut, sur requête de la seconde personne, rejeter la demande si, selon le cas : a) il estime que les brevets en cause ne sont pas admissibles à l'inscription au registre ou ne sont pas pertinents quant à la forme posologique, la concentration et la voie d'administration de la drogue pour laquelle la seconde personne a déposé une demande d'avis de conformité; b) il conclut qu'elle est inutile, scandaleuse, frivole ou vexatoire ou constitue autrement un abus de procédure. (6) Aux fins de la demande visée au paragraphe (1), lorsque la seconde personne a fait une allégation aux termes des sous-alinéas 5(1)b)(iv) ou (1.1)b)(iv) à l'égard d'un brevet et que ce brevet a été accordé pour le médicament en soi préparé ou produit selon les modes ou procédés de fabrication décrits en détail et revendiqués ou selon leurs équivalents chimiques manifestes, la drogue que la seconde personne projette de produire est, en l'absence d'une preuve contraire, réputée préparée ou produite selon ces modes ou procédés. (7) Sur requête de la première personne, le tribunal peut, au cours de l'instance : a) ordonner à la seconde personne de produire les extraits pertinents de la demande d'avis de conformité qu'elle a déposée et lui enjoindre de produire sans délai tout changement apporté à ces extraits au cours de l'instance; b) enjoindre au ministre de vérifier que les extraits produits correspondent fidèlement aux renseignements figurant dans la demande d'avis de conformité. (8) Tout document produit aux termes du paragraphe (7) est considéré comme confidentiel. (9) Le tribunal peut, au cours de l'instance relative à la demande visée au paragraphe (1), rendre toute ordonnance relative aux dépens, notamment sur une base avocat-client, conformément à ses règles. (10) Lorsque le tribunal rend une ordonnance relative aux dépens, il peut tenir compte notamment des facteurs suivants : a) la diligence des parties à poursuivre la demande; b) l'inscription, sur la liste de brevets qui fait l'objet d'une attestation, de tout brevet qui n'aurait pas dû y être inclus aux termes de l'article 4; c) le fait que la première personne n'a pas tenu à jour la liste de brevets conformément au paragraphe 4(6).
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[44] As appears from the definition, a "first person" is the party who seeks an order of prohibition to prevent the Minister of Health from issuing a NOC. The Regulations are part of an administrative scheme governing the licensing of pharmaceutical products for therapeutic use; see Merck Frosst Canada Inc. et al. v. Canada (Minister of National Health and Welfare) et al. (1994), 169 N.R. 342 (F.C.A.).
[45] The Regulations purport to provide a right to a second person, such as Apotex, to claim compensation if a prohibition proceeding commenced by a first person is either discontinued or ultimately dismissed. In the present case, the prohibition proceedings were ultimately dismissed by the Supreme Court of Canada.
[46] Section 8 provides a right to claim damages against the "first person". The question arising here is "who is the first person" for the purposes of the Regulations. The question, then, is one of statutory interpretation and according to the Supreme Court of Canada in Rizzo and Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27 at 41, the proper approach to statutory interpretation goes beyond mere reliance on the words of the statute; the words must be read in their entire context having regard to the scheme of the legislation, its object and Parliamentary intention.
[47] The Defendants' motions for summary judgment are to be determined by reference to Rules 213 et seq. of the Rules. Rules 213(2) and 216(1), (2)(b) and 3 are relevant and provide:
| 213(2) A defendant may, after serving and filing a defence and at any time before the time and place for trial are fixed, bring a motion for summary judgment dismissing all or part of the claim set out in the statement of claim. |
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213(2) Le défendeur peut, après avoir signifié et déposé sa défense et avant que l'heure, la date et le lieu de l'instruction soient fixés, présenter une requête pour obtenir un jugement sommaire rejetant tout ou partie de la réclamation contenue dans la déclaration.
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216(1) Where on a motion for summary judgment the Court is satisfied that there is no genuine issue for trial with respect to a claim or defence, the Court shall grant summary judgment accordingly. (2) Where on a motion for summary judgment the Court is satisfied that the only genuine issue is ... (b) a question of law, the Court may determine the question and grant summary judgment accordingly. (3) Where on a motion for summary judgment the Court decides that there is a genuine issue with respect to a claim or defence, the Court may nevertheless grant summary judgment in favour of any party, either on an issue or generally, if the Court is able on the whole of the evidence to find the facts necessary to decide the questions of fact and law.
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216(1) Lorsque, par suite d'une requête en jugement sommaire, la Cour est convaincue qu'il n'existe pas de véritable question litigieuse quant à une déclaration ou à une défense, elle rend un jugement sommaire en conséquence. (2) Lorsque, par suite d'une requête en jugement sommaire, la Cour est convaincue que la seule véritable question litigieuse est : ... b) un point de droit, elle peut statuer sur celui-ci et rendre un jugement sommaire en conséquence. (3) Lorsque, par suite d'une requête en jugement sommaire, la Cour conclut qu'il existe une véritable question litigieuse à l'égard d'une déclaration ou d'une défense, elle peut néanmoins rendre un jugement sommaire en faveur d'une partie, soit sur une question particulière, soit de façon générale, si elle parvient à partir de l'ensemble de la preuve à dégager les faits nécessaires pour trancher les questions de fait et de droit. |
[48] The principles concerning the grant of summary judgment are summarized in Granville Shipping Co. v. Pegasus Lines Ltd. S.A., [1996] 2 F.C. 853 at pages 859-860:
1. the purpose of the provisions is to allow the Court to summarily dispense with cases which ought not proceed to trial because there is no genuine issue to be tried
2. there is no determinative test but Stone J.A. seems to have adopted the reasons of Henry J., in Pizza Pizza Ltd. v. Gillespie (Pizza Pizza) (1990), 75 O.R. (2d) 225 (Gen. Div.). It is not whether a party cannot possibly succeed at trial, it is whether the case is so doubtful that it does not deserve consideration by the trier of fact at a future trial;
3. each case should be interpreted in reference to its own contextual framework (Blyth, supra, and Feoso, supra);
4. provincial practice rules (especially Rule 20 of the Ontario Rules) can aid in interpretation Feoso, supra, and Collie, supra);
5. this Court may determine questions of fact and law on the motion for summary judgment if this can be done on the material before the Court (this is broader than Rule 20 of the Ontario Rules of Civil Procedure) (Patrick);
6. on the whole of the evidence, summary judgment cannot be granted if the necessary facts cannot be found or if it would be unjust to do so (Pallman, supra, and Sears, supra);
7. in the case of a serious issue with respect to credibility, the case should go to trial because the parties should be cross-examined before the trial judge (Forde, supra, and Sears, supra). The mere existence of apparent conflict in the evidence does not preclude summary judgment; the court should take a "hard look" at the merits and decide if there are issues of credibility to be resolved (Stokes, supra)."
[49] The present motions involve questions of statutory interpretation and accordingly, raise questions of law. Both Defendants argue that this Court lacks jurisdiction to entertain this claim for "unjust enrichment" because that claim is beyond the jurisdiction conferred by section 20 of the Act. Further, Lilly U.S. argues that the action does not lie against it at all because it is not a "first person" as defined in the Regulations. In relation to Lilly U.S., the question is the interpretation of "first person" as used in the NOC Regulations. The term "first person" is defined in section 2 of the Regulations as follows:
| "first person" means the person referred to in subsection 4(1); |
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« première personne » La personne visée au paragraphe 4(1) |
[50] The jurisdiction of this Court to entertain this action is raised specifically in this motion, having regard to the status of the Federal Court as a statutory court whose jurisdiction is defined by the Federal Courts Act, supra. That point has been addressed in many decisions including Ordon Estate v. Grail, [1998] 3 S.C.R. 437, Canada (Minister of Citizenship and Immigration) v. Tobiass, [1997] 3 S.C.R. 391 and Chavali v. Law Society of Upper Canada (2001), 202 F.T.R. 166. Jurisdiction is not limited to examining whether the Court has jurisdiction over a particular subject matter but also includes the question of jurisdiction over the parties; see Fédération Franco-Ténoise v. Canada, [2001] 3 F.C. 641 (C.A.) and the Greeley v. "Tami Joan" (The) (1996), 113 F.T.R. 66, (aff'd) (2001) 273 N.R. 310 (C.A.).
[51] As noted above, the Plaintiff bases its cause of action against the Defendant Lilly U.S. upon section 8 of the Regulations. It is a cause of action arising from the Regulations and in my opinion, the Plaintiff must show that the Defendant meets the criteria set out in the Regulations.
ii) Status of Lilly U.S.
[52] I will first address the arguments concerning the maintenance of this action against Lilly U.S. In my opinion, this motion for summary judgment should be granted.
[53] Lilly U.S. argues that it does not meet the definition set out in section 2 because it was not the recipient of the NOC referred to in section 4(1). In reply, the Plaintiff says that Lilly U.S. was a party to the prohibition proceedings commenced in 1993. The response of Lilly U.S. to that submission is that, pursuant to section 6(4) of the Regulations, the owner of a patent is to be joined as a party to a proceeding under section 6 when the first person is not the owner of the patent. Sections 4(1) and 6(4) read as follows:
| 4. (1) A person who files or has filed a submission for, or has been issued, a notice of compliance in respect of a drug that contains a medicine may submit to the Minister a patent list certified in accordance with subsection (7) in respect of the drug. |
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4. (1) La personne qui dépose ou a déposé une demande d'avis de conformité pour une drogue contenant un médicament ou qui a obtenu un tel avis peut soumettre au ministre une liste de brevets à l'égard de la drogue, accompagnée de l'attestation visée au paragraphe (7).
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| 6(4) Where the first person is not the owner of each patent that is the subject of an application referred to in subsection (1), the owner of each such patent shall be made a party to the application. |
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6(4) Lorsque la première personne n'est pas le propriétaire de chaque brevet visé dans la demande mentionnée au paragraphe (1), le propriétaire de chaque brevet est une partie à la demande.
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[54] As well, Lilly U.S. refers to a decision by Justice M. Nöel (as he then was) in Pfizer Canada Inc. et al. v. Apotex Inc. et al., T-442-96, February 12, 1997 at page 4 as follows:
The Application must be dismissed. Apotex correctly states that Pfizer is the only First Person, that only it was entitled to be served with the Notice of Allegation, to commence the within proceeding and to the relief sought. Nevertheless, the Regulations require that UCB as the owner of the patent in issue be made a party to the proceedings. The obvious reason for this requirement is to insure that, where a First Person is not the owner of the relevant patent, the patentee will also be bound by the outcome of prohibition proceedings under the Regulations. In seeking to preserve its rights as the owner of the patent in issue, the patentee is obviously entitled to be represented by counsel of its choice, and I can see no basis for an order that would have the effect of talking away that right. [footnotes omitted]
[55] The Plaintiff's Amended Statement of Claim does not refer to the NOC held by the Defendant Lilly Canada relative to nizatidine capsules. However, Exhibit B to the affidavit of Nancy Schuurmans sworn April 15, 2003, filed by Lilly U.S. in support of this motion, is a copy of a NOC dated December 31, 1987. This NOC was issued to "Eli Lilly Canada Inc." in connection with submission number 7HN855038 concerning "Axid Capsules 150 mg. and 300 mg. (nizatidine)".
[56] I refer again to the definition of "first person" in section 2. The cross-reference there is only to section 4(1), not to section 6(4) or to any other provision of the Regulations. The Plaintiff's advance no common law cause of action for this proceeding but base this action solely upon section 8 of the Regulations. Specifically, paragraph 40 of the amended Statement of Claim reads as follows:
40. Pursuant to section 8 of the Patent Regulations, as amended, or in the alternative, as originally enacted, Lilly is liable to Apotex by way of damages or profits. More particularly, the actions of Lilly U.S. and Lilly Canada were all part of a common enterprise carried out by Lilly Canada pursuant to the direction and on behalf of Lilly U.S. Accordingly, the actions of Lilly Canada must in law and in equity be treated as the acts of Lilly U.S. which, therefore, is also liable to Apotex pursuant to section 8 of the Patent Regulations, as amended or in the alternative, as originally enacted.
[57] The Plaintiff submits that this motion on behalf of Lilly U.S. should be dismissed because the question involves contentious issues of statutory interpretation and further, that the matter has already been argued, unsuccessfully. In this regard, the Plaintiff refers to a number of prior interlocutory motions brought by Lilly U.S. in this proceeding. It would be useful, therefore, to look at the history of this proceeding up to the date of hearing of this motion.
[58] The Plaintiff issued the Statement of Claim on February 23, 2001. The Defendant Lilly U.S. filed its Defence on June 28, 2001. That pleading put at issue the status of Lilly U.S. as a "first person" and the availability of the original enactment of section 8 of the Regulations as the basis of the Plaintiff's claim.
[59] The Defendant Lilly U.S. brought a motion to strike the action against it, on the grounds that it is not a proper party. The motion was dismissed by Justice Blanchard on June 11, 2001, reported as Apotex Inc. v. Eli Lilly & Co. (2001), 13 C.P.R. (4th) 78 (F.C.T.D.). The motion was brought pursuant to Rule 221 of the Rules. In disposing of the motion, the Court said the following at page 82:
The jurisprudence appears to be settled, that contentious legal issues of statutory interpretation will not be dealt with on motion to strike a pleading. Mr. Justice Lemieux in Pfizer Canada Inc. v. Apotex Inc. addressed the issue:
In the context of issues relating to statutory interpretation, Reed J. in Amway of Canada Ltd. v. Canada, [1986] 2 F.C. 312 (T.D.) at 326, was of the view that where there exists a contentious legal issue of a statutory interpretation to be resolved, that issue, not being clear and obvious, should be left for argument at trial and should not be disposed of by a motions judge in a preliminary proceeding.
In Hunt v. Carey Canada Inc., [1990] 2 S.C.R. 959, Wilson J., for the Court, canvassed the applicable principles governing the determination of a motion to strike on the basis of no reasonable claim. She canvassed the origins of the provision now incorporated in rules of practice and considered its application in English and Canadian jurisprudence.
As I see it, Wilson J. endorsed the principle where arguments as to law and fact are intricate and complex, they should be dealt with at trial after all of the evidence is adduced because in such circumstances it is impossible to reach the conclusion that there is no cause of action in fact or law.
For the above reasons the motion of the defendant Lilly Canada for an order to strike the statement of claim in its entirety, and alternatively specific paragraphs as pleaded, will be dismissed.
The defendant Lilly U.S., has brought a motion for an order to be struck out of this proceeding on the grounds that they are not a proper party in that the statement of claim fails to disclose a reasonable cause of action pursuant to Rule 221 of the Federal Court Rules, 1998.
[60] The appeal from this decision of Justice Blanchard was dismissed in Eli Lilly and Co. et al. v. Apotex Inc., 2002 FCA 389. At paragraph 3 of its reasons the Federal Court of Appeal said the following:
We will, therefore, dismiss the appeal. The respondent will be entitled to party-party costs in the sum of $10,000 inclusive of disbursements and GST. Our decision on this appeal in no way pre-judges the appropriateness of a motion for summary judgment in the Trial Division that the appellants indicate they will bring on the dismissal of this appeal.
[61] The Plaintiff sought leave to amend the Statement of Claim to plead both the original and amended versions of section 8. The motion was initially denied but upon appeal, the amendment was allowed. In his Reasons for Order, reported as Apotex Inc. v. Eli Lilly and Co. (2001), 212 F.T.R. 300, Justice Blais found that the jurisprudence does not give a clear understanding of either version of section 8 and stated "that it would serve the interests of justice to grant Apotex leave to file an amended statement of claim."
[62] Apotex says that the question of the meaning of "first person" has already been dealt with in this action, albeit in the context of a motion to strike and a motion to amend the Statement of Claim. It argues that no good reason has been shown by Lilly U.S. to justify a different result in this motion and that this Court should follow the earlier rulings where the Court concluded that the question was a complex one to be resolved by a trial judge after hearing all the evidence. Apotex also refers to the principle of judicial comity in urging this Court to follow the earlier decisions.
[63] In my opinion, however, these prior decisions are distinguishable from the present motion. In the first place, Lilly U.S. brought a motion to strike the Statement of Claim on the basis that it was not a proper party since it is not the "first person". A motion to strike is governed by Rule 221. The test upon a motion to strike pleadings is a strict one. It is whether it is plain and obvious that the claim discloses no reasonable cause of action: Hunt v. Carey Canada Inc., [1990] 2 S.C.R. 959. A motion to amend is a highly discretionary matter involving issues and criteria different from those arising on a motion for summary judgment.
[64] It is clear that the Plaintiff bases this action on section 8 of the Regulations and, for present purposes, it is not critical whether that reliance is on the original or amended version. It remains that the Plaintiff is not pursuing a common law action in tort but an action grounded in the Regulations. In these circumstances, the Plaintiff must show that Lilly U.S. is a proper party, within the meaning of section 8.
[65] The Plaintiff made it clear in argument that it was not advancing any argument that its action against Lilly U.S. depends upon that entity meeting the terms of the definition of "first person".
[66] The heart of this action, in my opinion, is the process involved in obtaining a NOC and the delay encountered by Apotex in obtaining a NOC for its pharmaceutical product. Apotex attributes that delay to the actions of Lilly U.S. in instructing the commencement of the prohibition proceedings. Apotex alleges that Lilly U.S. was the controlling power behind the commencement of those proceedings. Even assuming that the allegation of control, as set out in the Statement of Claim, can be substantiated, that does not change the fact that the Plaintiff is here pursuing a regulatory cause of action, not a common law cause of action, and in my opinion, it must show that Lilly U.S. is a party that meets the definition of "first person". It was open to the Governor-in-Council when promulgating the Regulations pursuant to the Patent Act, R.S.C. 1985, c. P-4, as amended, section 55.2(4) to create a broad class of claimants for the purpose of section 8 of those Regulations. That did not happen here. The possibility of a claim is against only a "first person".
[67] This litigation, in my opinion, does not raise issues of control as were discussed in DAN Food Distributors Ltd. v. London Borough of Tower Hamlets, [1976] 3 All E.R. 462 at 467 (C.A.); The Palmolive Manufacturing Company (Ontario) Limited v. His Majesty the King, [1933] S.C.R. 131 at 140; and Aluminum Company of Canada Limited v. The Corporation of the City of Toronto, [1944] S.C.R. 267 at 271, relied on by the Plaintiff. It seems to me that those issues may be more relevant in a case that is based upon a common law cause of action but that does not apply here.
[68] In my opinion, when the Plaintiff is basing its action, as it is here, on the Regulations, it must show that the Defendant Lilly U.S. meets the criteria provided in those Regulations. Section 8 of the Regulations, whether in the original or amended form, provides a right of action against a "first person". That is a defined term. According to the definition, the first person is the party to whom a NOC is issued. That is not the situation here.
[69] I reject the argument of the Plaintiff that the principle of judicial comity requires me to adopt the reasons of the Court in other similar interlocutory motions. In the first place, the decisions to which the Plaintiff here refers were discretionary decisions of the Court made in response to motions for different relief. The decision of Justice Blanchard was dispositive of a motion to strike Lilly U.S. out of the proceeding because it failed to satisfy the "burdensome test enunciated by Rule 221 of the Federal Court Rules, 1998." The other decisions cited by the Plaintiff, in matters involving the scope and interpretation of section 8, do not address the issues of the interpretation of "first person".
[70] The decision of the Federal Court of Appeal affirming the decision of Justice Blanchard does not change the fact that different criteria were before the Court. A motion to strike is not the same as a motion for summary judgment. The exercise of discretion refusing the former is not determinative of the exercise of discretion in deciding upon the latter.
[71] A finding by the Federal Court of Appeal that a motions judge did not err in the exercise of discretion in adjudicating a motion to strike or a motion to amend the pleadings is not determinative of the exercise of discretion relative to a motion for summary judgment. Further, I note that when the Federal Court of Appeal is reviewing the exercise of discretion by a trial judge, that reviewing function is conducted relative to the particular exercise of discretion at issue; see Visx Inc. v. Nidek Co. (1996), 209 N.R. 342 at page 345.
[72] The status of Lilly U.S. as a "first person", within the meaning of theRegulations, is a question of law. On the basis of that definition, a "first person" is the recipient of a NOC. The Statement of Claim alleges that Lilly Canada received the NOC. Lilly U.S. is not a "first person", within the meaning of the definition and in my opinion, it is not a proper party to this action.
[73] The previous motion brought by the Defendant concerning the status of Lilly U.S. was brought in the context of a motion to strike, not as the subject of a motion for summary judgment. Accordingly, the earlier decision was not dispositive.
iii) Jurisdiction over the claim for unjust enrichment
[74] Section 20 of the Act spells out the jurisdiction of the Court in matters relating to industrial property. Section 20 provides as follows:
| 20. (1) The Federal Court has exclusive original jurisdiction, between subject and subject as well as otherwise, (a) in all cases of conflicting applications for any patent of invention, or for the registration of any copyright, trade-mark, industrial design or topography within the meaning of the Integrated Circuit Topography Act; and (b) in all cases in which it is sought to impeach or annul any patent of invention or to have any entry in any register of copyrights, trade-marks, industrial designs or topographies referred to in paragraph (a) made, expunged, varied or rectified. (2) The Federal Court has concurrent jurisdiction in all cases, other than those mentioned in subsection (1), in which a remedy is sought under the authority of an Act of Parliament or at law or in equity respecting any patent of invention, copyright, trade-mark, industrial design or topography referred to in paragraph (1)(a). |
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20. (1) La Cour fédérale a compétence exclusive, en première instance, dans les cas suivants opposant notamment des administrés_: a) conflit des demandes de brevet d'invention ou d'enregistrement d'un droit d'auteur, d'une marque de commerce, d'un dessin industriel ou d'une topographie au sens de la Loi sur les topographies de circuits intégrés; b) tentative d'invalidation ou d'annulation d'un brevet d'invention, ou d'inscription, de radiation ou de modification dans un registre de droits d'auteur, de marques de commerce, de dessins industriels ou de topographies visées à l'alinéa a). (2) Elle a compétence concurrente dans tous les autres cas de recours sous le régime d'une loi fédérale ou de toute autre règle de droit non visés par le paragraphe (1) relativement à un brevet d'invention, un droit d'auteur, une marque de commerce, un dessin industriel ou une topographie au sens de la Loi sur les topographies de circuits intégrés. |
[75] Lilly Canada argues that a claim for unjust enrichment is beyond the scope of claims that may be adjudicated in this Court. They further submit that on the facts alleged by the Plaintiff, no claim for unjust enrichment arises, having regard to the legal requirements to establish such a claim. Those elements are as follows:
i) an enrichment
ii) a corresponding deprivation; and
iii) the absence of any juristic reason for the enrichment.
Pettkus v. Becker, supra at 848.
[76] According to Lilly Canada, these elements are conjunctive. It argues that there is no evidence of any enrichment to them or a corresponding deprivation to the Plaintiff. In addition, it says that the conduct of the proceedings to obtain an Order of Prohibition pursuant to the Regulations constitutes a juristic reason for the situation of which the Plaintiff complains.
[77] The Plaintiff argues that this question of jurisdiction over the claim for unjust enrichment is too complex to be decided upon a motion for summary judgment. It also submits that a similar argument was the subject of a motion for summary judgment and the motion was dismissed on the grounds that the determination of the issue should not be made in the context of a motion for summary judgment. In this regard, the Plaintiff relies upon the recent decision of Justice Russell in Apotex Inc. v. Canada, (2003) 25 C.P.R. (4th) 479, (aff'd) [2004] F.C.J. No. 164 (C.A.)(Q.L.). At paragraph 27, Justice Russell said as follows:
As regards exercising the discretion granted by rule 216(2)(b) to determine the question of law as to whether first person profits are available to the Plaintiff under section 8 of the Regulations or under some other statutory or inherent jurisdiction enjoyed by the Court, I decline to do so because I do not have before me the full context of the Plaintiff's claim or adequate evidence concerning the proper purposes of section 8 of the Regulations.
[78] Lilly Canada's arguments about the availability of a claim for unjust enrichment, in the context of section 8, raise some interesting questions. However, this Court has already decided that the meaning and scope of section 8, in particular in relation to a claim for unjust enrichment, should not be decided upon a motion for summary judgment. I refer to Apotex Inc., supra and Apotex Inc. v. Merck & Co. Inc. et al., [2004] F.C.J. No. 387. Recently, in Apotex Inc. v. Syntex Pharmaceuticals International Limited et al., 2004 FC 383, the Court commented on these decisions in the following terms:
While they are not strictly speaking binding upon me, I find the decisions of Justice Russell (Apotex Inc. v. Canada, 2003 FCT 414, [2003] F.C.J. No. 593) and Justice Snider (Apotex Inc. v. Merck & Co. Inc. And Merck-Frost Canada & Co., 2004 FC 314) strongly persuasive that I should exercise my discretion in the same way that they did and decline to answer the questions of law raised by the present motion for summary judgment. It would take strong reasons in my view to justify my departing from an exercise of discretion by my colleagues on a very similar question.
[79] In the present case, I am not persuaded that there are "strong reasons" or sufficient evidence to justify the exercise of discretion in favour of Lilly Canada in respect of the Plaintiff's claim for unjust enrichment. That motion is dismissed.
CONCLUSION
[80] In the result, the Plaintiff and the Defendant share mixed success. Summary judgment will be granted to Lilly U.S. and the action against it is dismissed in its entirety. The motion by Lilly Canada is dismissed. Since there has been partial success by each side, the question of costs is reserved and unless the parties otherwise agree, submissions can be made by the parties within thirty days.
ORDER
The motion of Eli Lilly and Company for summary judgment against the Plaintiff Apotex Inc. is granted and the action is dismissed against Eli Lilly and Company in its entirety.
The motion of Eli Lilly Canada Inc. for summary judgment is dismissed.
Costs are reserved and unless the parties otherwise agree, submissions can be made by the parties within thirty (30) days.
"E. Heneghan"
J.F.C.
FEDERAL COURT
Names of Counsel and Solicitors of Record
DOCKET: T-320-01
STYLE OF CAUSE: APOTEX INC.
Plaintiff
and
ELI LILLY AND COMPANY and
ELI LILLY CANADA INC.
Defendants
PLACE OF HEARING: TORONTO, ONTARIO
DATE OF HEARING: SEPTEMBER 23, 2003
REASONS FOR ORDER
AND ORDER BY: HENEGHAN J.
DATED: MARCH 31, 2004
APPEARANCES BY:
Mr. Andrew Brodkin
Mr. David Lederman
FOR THE PLAINTIFF
Mr. Anthony Creber
Mr. Patrick Smith
FOR THE DEFENDANTS
SOLICITORS OF RECORD:
Goodmans LLP
Toronto, Ontario
FOR THE PLAINTIFF
Gowling Lafleur Henderson LLP
Ottawa, Ontario
FOR THE DEFENDANTS
FEDERAL COURT
Date: 20040331
Docket: T-320-01
BETWEEN:
APOTEX INC.
Plaintiff
and
ELI LILLY AND COMPANY and
ELI LILLY CANADA INC.
Defendants
REASONS FOR ORDER
AND ORDER