Date: 20020926
Docket: T-797-02
Neutral citation: 2002 FCT 1010
BETWEEN:
PHARMACEUTICAL PARTNERS OF CANADA INC.
Plaintiff
- and -
FAULDING (CANADA) INC.
Defendant
[1] The defendant, Faulding (Canada) Inc. (Faulding) appeals, in part, the order of a prothonotary dated September 5, 2002, wherein the prothonotary declined to strike out, in whole or in part, a statement of claim in a patent infringement action, or alternatively, require the plaintiff to properly particularize the statement of claim with respect to the rights being asserted against the defendant.
[2] The plaintiff Pharmaceutical Partners of Canada Inc (PPC), by statement of claim dated May 21, 2002, initiated a patent infringement action against Faulding, with respect to Canadian patent 2,347,330 (the '330 patent) owned by PPC. The patent is for a liquid injectable formulation of disodium pamidronate. The statement of claim alleged that Faulding was manufacturing and selling a product which infringed the '330 patent. PPC pleaded reliance on the presumption of infringement in section 55.1 of the Patent Act, R.S.C. 1985, c. P-4, (the Act).
[3] On June 4th, Faulding served PPC with a demand for particulars and received its reply on June 13th. Faulding, not satisfied with the particulars provided, on June 18th, moved for further and better particulars of the allegations of infringement in the statement of claim. The motion was heard on August 12th and by order dated August 16th, a prothonotary allowed the motion in part. PPC was ordered to provide the particulars of infringement with respect to the product claims and was granted leave to amend the statement of claim to deal with the particulars requested with respect to the infringement of the process claims. On August 23rd, PPC provided particulars with respect to the product claims and on August 26th, it served and filed an amended statement of claim that included allegations with respect to the process alleged to be used by Faulding. It also amended to include a reference to "new products" described by various claims of the '330 patent within the meaning of section 55.1 of the Act.
[4] On August 29th, Faulding brought a motion to strike out the statement of claim, in whole or in part, on the basis that the statement of claim, as amended, and the particulars provided did not fulfil the dual requirements for pleading a cause of action in patent infringement, or alternatively, for an order for full and complete particulars, namely a clear and succinct description, of the rights upon which [PPC] relies and claims as infringed, which do not merely or solely refer back to the '330 patent or its claims. On September 5th, after hearing argument from counsel for Faulding and PPC, the prothonotary dismissed the defendant's motion and found that the plaintiff had complied with the order of the prothonotary dated August 16th and that the defendant had sufficient particulars to plead over. The prothonotary's order was dated September 5th, but was received by defendant's counsel from the registry on September 11th. On September 14th, Faulding served and filed this notice of motion, seeking the same relief as that requested in the notice of motion dated August 29th, and alleging that the prothonotary erred in law and in principle.
[5] The alleged error of law is that the prothonotary ignored the jurisprudence with respect to pleading a cause of action and asked the wrong question. Rather than ask whether the defendant had sufficient information to prepare a statement of defence, the question should have been whether the plaintiff had properly pleaded its case. The first alleged error in principle is that the prothonotary took into account an irrelevant consideration, i.e., that the defendant could ascertain what rights the plaintiff was alleging and could plead over. If the cause of action is not defined by the pleading, whether the defendant may be able to speculate and respond is irrelevant. The second allegation of error in principle flows from the error of law in that the prothonotary failed to address the requirements of pleading.
[6] The parties agree that the law regarding review, by a judge, of a prothonotary's discretionary decision is set out in Canada v. Aqua-Gem Investments Ltd., [1993] 2 F.C. 425 (C.A.) at 463, as follows:
...discretionary orders of prothonotaries ought not to be disturbed on appeal to a judge unless:
(a) they are clearly wrong, in the sense that the exercise of discretion by the prothonotary was based upon a wrong principle or upon a misapprehension of the facts, or
(b) they raise questions vital to the final issue of the case.
Where such discretionary orders are clearly wrong in that the prothonotary has fallen into error of law (a concept in which I include a discretion based upon a wrong principle or upon a misapprehension of the facts), or where they raise questions vital to the final issue of the case, a judge ought to exercise his own discretion de novo.
[7] The parties additionally agree that the basic requirements for pleading a cause of action in patent infringement are articulated in Dow Chemical Co. v. Kayson Plastics & Chemicals Ltd. (1966), 47 C.P.R.1 (Ex.Ct.) at 11 as follows:
In general, under our system of pleading, a statement of claim for an infringement of a right should clearly show:
(a) facts by virtue of which the law recognizes a defined right as belonging to the plaintiff, and
(b) facts that constitute an encroachment by the defendant on that defined right of the plaintiff.
If the statement of claim does not disclose those two elements of the plaintiff's cause of action, it does not disclose a cause of action and may be disposed of summarily.
[8] The parties, while in agreement on the law with respect to pleading, disagree as to whether or not there has been compliance by the plaintiff. The defendant says that the plaintiff has not complied while the plaintiff says the opposite. It bears mentioning that no reasons were given by the prothonotary. The order does include recitals, the relevant portions of which for ease of reference, are set out below:
AND UPON reading the material before the Court;
AND UPON hearing the submissions of the parties;
UPON being satisfied that the plaintiffs have complied with the order of Prothonotary Lafrenière dated August 16, 2002, and that sufficient particulars have been provided to enable the defendant to plead over.
[9] The fact that reasons have not been given does not mean that the test set out in Aqua Gem, supra, does not apply. Absent error by the prothonotary as set out in Aqua Gem, the Court will not exercise its discretion de novo: Anchor Brewing Co. v. Sleeman Brewing & Malting Co. (2001), 15 C.P.R. (4th) 63 (F.C.T.D.).
[10] The defendant refers to Dow Chemical, supra, as a two branch test and submits that while the plaintiff has, in its amended statement of claim and particulars, met the second branch, it has not met the first. Since PPC has not described or characterized the invention in which it is alleged to have rights, the pleading, argues the defendant, is defective on its face, does not disclose a cause of action and should be struck, albeit with leave to amend. The defendant refers to Dow Chemical as the cornerstone of pleading in patent actions and refers the Court to Union Carbide Canada Ltd. v. Canadian Industries Ltd. (1969), 60 C.P.R. 223 (Ex.Ct.), Precision Metalsmiths Inc. v. Cercast Inc. et al. (1996), 49 C.P.R. 234 (Ex. Ct.) and Northern Telecom Ltd. v. Reliance Electric Co. et al. (1986), 8 C.P.R. (3d) 224 (F.C.A.), all of which applied and followed Dow Chemical. In Nothern Telecom, supra, Thurlow, C.J. stated:
A plaintiff must describe with particularity to the person he sues the right to which he claims to be entitled and which he alleges that the defendant has violated. That principle of pleading applies in a patent infringement action just as it does in an action for the violation of any other kind of right.
A defendant is not required to answer anything but what is asserted against him. He is entitled to be told what right is asserted which he is alleged to have violated and he cannot be required to search for it by a vague assertion coupled with an indication as to where he may search for it. . . .
...I do not understand and I do not agree with the view that to require a plaintiff to put a construction on his claims at the initial stage of a proceeding to enforce his patent rights would be improper. It is undoubtedly the function of the court at trial to construe the claims in the light of the evidence as to the prior art and determine what they cover, but that is at a different stage and is an entirely different matter from requiring a patentee to put on his claims a construction which he considers they bear and which he will be urging the court to adopt.
[11] The defendant submits that the plaintiff still has not provided a clear and concise description of its invention, which is the starting point for its cause of action. The defendant is being provided only with a description of its alleged actions coupled with an invitation to read the plaintiff's patent. Hence, the defendant argues, the prothonotary erred in concluding that this is sufficient. If no cause of action is defined by the pleading, it is irrelevant as to whether the defendant may be able to speculate as to the plaintiff's view of its invention and respond. If the plaintiff has not fully and properly pleaded a cause of action, the defendant is not required to respond by "filling in the blanks".
[12] The plaintiff, also relying on Dow Chemical, supra and Precision Metalsmiths, supra, submits that the amended statement of claim is pleaded in accordance with the principles contained in those cases. The pleading must contain a concise statement of the material facts upon which the plaintiff relies as giving a cause of action but not the evidence relied upon to prove those facts. The plaintiff argues that since the defendant admits that the plaintiff has pleaded facts which, if true, establish an encroachment by the defendant of the plaintiff's rights, it follows logically that the plaintiff's rights have been pleaded, thus fulfilling the dual requirements as set out in Dow Chemical. To establish an encroachment by the defendant of the plaintiff's rights, the plaintiff must first establish the rights which are being encroached. In other words, if the plaintiff cannot fulfil the first part of the two requirements, it cannot achieve the second. However, to achieve the second, the plaintiff must, by necessity, have provided the first. While the plaintiff did not use the precise format and language suggested by the defendant, the plaintiff submits that a reading of the amended statement of claim as well as the claim chart, which was provided in response to the order for further particulars, clearly reveals what the plaintiff claims its invention to be, as does the patent.
[13] The authorities relied upon by the defendant strongly suggest that unless the pleading is structured in the manner proposed by the defendant, it will be considered deficient and will be struck. The difficulty is that those cases preceded the decision in Hunt v. Carey Canada Inc., [1990] 2 S.C.R. 959, which articulated the test to be applied before a pleading is struck. Hunt v. Carey has been repeatedly applied in various decisions of this Court and in appellate and trial Courts across the country. As a result, and notwithstanding the desirability of proper pleading, the standard or test for striking a pleading has been determined. It was recently described by the Federal Court of Appeal in Shubenacadie Indian Band v. Canada (Minister of Fisheries and Oceans), 2002 FCA 255, [2002] F.C.J. No. 882. Mr. Justice Sexton, speaking for the Court, determined that although a pleading may be very broad and encompassed in general terms, it should not be struck out so long as a cause of action, however tenuous, can be gleaned from a perusal of the statement of claim. The onus, on the party moving to strike, is heavy and it must be shown that it is beyond doubt that the case cannot possibly succeed at trial. Similarly, in Sweet v. Canada (1999), 249 N.R. 17 (F.C.A.), Mr Justice Décary, speaking for the Court, stated that although some elements may be missing and others incomplete, if the pleading contains enough information to allow the opposing party to know with some certainty the case to be met, the pleading will not be struck. That is, in my view, the test that the prothonotary applied in finding that the defendant had sufficient information to plead over. I accept that, in view of the defendant's willingness to allow the plaintiff to amend, that the onus and indeed the test in Hunt v. Carey should be modified to some degree. However, the defendant's position would require not only substantial modification of the test but disregard of it. I am bound by the aforementioned authorities and do not feel that they can be ignored to the extent the defendant's position requires.
[14] I would add that precise and meticulous pleading is to be encouraged. I am at a complete loss to understand why, in the face of the defendant's willingness to permit the plaintiff to amend, the appropriate measures were not taken to add a paragraph setting out concisely and succinctly the information referred to in Northern Telecom, quoted earlier. A defendant should not require a roadmap to ascertain the case to be met.
[15] In summary, the prothonotary, in finding that the defendant had sufficient information to plead over, was satisfied that the amended statement of claim provided enough information to allow the defendant to know, with some certainty, the case to be met. In so doing, the prothonotary did not err with respect to the test to be applied regarding the striking of pleadings. Similarly, the prothonotary applied the proper test with respect to providing particulars, at this stage of the proceeding. The appeal is therefore dismissed. In the circumstances, I decline to award costs. The defendant shall serve and file its statement of defence by October 16, 2002.
"Carolyn Layden-Stevenson"
Judge
Toronto, Ontario
September 26, 2002
FEDERAL COURT OF CANADA
Names of Counsel and Solicitors of Record
DOCKET: T-797-02
STYLE OF CAUSE: PHARMACEUTICAL PARTNERS OF
CANADA INC.
Plaintiff
- and -
FAULDING (CANADA) INC.
Defendant
PLACE OF HEARING: TORONTO, ONTARIO
DATE OF HEARING: MONDAY, SEPTEMBER 23, 2002
REASONS FOR ORDER BY: LAYDEN-STEVENSON J.
DATED: THURSDAY, SEPTEMBER 26, 2002
APPEARANCES BY: Ms. Donna Campbell
Ms. Cynthia Tape
For the Plaintiff
Ms. Susan D. Beaubien
For the Defendant
SOLICITORS OF RECORD: Stockwood Spies
Barristers & Solicitors
150 King Street West
Suite 2512
Toronto, Ontario
M5H LJ9
For the Plaintiff
Borden Ladner Gervais
100 Queen Street
Suite 1100
Ottawa, Ontario
KLP LJ9
For the Defendant
FEDERAL COURT OF CANADA
Date:20020926
Docket: T-717-02
BETWEEN:
PHARMACEUTICAL PARTNERS OF CANADA INC.
Plaintiff
- and -
FAULDING (CANADA) INC.
Defendant
REASONS FOR ORDER