Date: 19980123
Docket: T-2408-91
BETWEEN:
MERCK & CO., INC. and
MERCK FROSST CANADA INC.
Plaintiffs
- and -
APOTEX INC.
Defendant
REASONS FOR ORDER
MacKAY J.:
[1] By this application filed on January 31, 1997, the defendant Apotex Inc. ("Apotex") seeks unusual relief, for an order to vary or stay the operation of a permanent injunction, rendered in December 1994 as part of judgment following trial of an action initiated by the plaintiffs ("Merck") for infringement found of Merck's patent no. 1,275,349 ("the '349 patent"). If its motion is allowed, Apotex, now prohibited by the injunction from activities infringing claims 1 to 5 and 8 to 15 inclusive of the patent, would contest the validity of claim 1, and claims 8 and 11 which are dependant on claim 1, in this or in a separate action and it would use compounds, other than enalapril maleate, that it believes are included within claim 1, without violating terms of the injunction if it be modified by one of the orders now sought. The validity of claim 1 was not, in the submission of Apotex, a matter determined after argument by the Court in the action leading to judgment.
[2] The terms of that judgment1 as amended by the Court of Appeal, insofar as they relate to the injunction in issue, are as follows.
| 3. The Defendant, by its officers, directors, servants, agents, employees, or otherwise, is hereby restrained and enjoined from infringing claims 1 to 5 and 8 to 15 inclusive of Canadian Letters Patent No. 1,275,349, and in particular from manufacturing, using, offering for sale and selling, in Canada or elsewhere, APO-ENALAPRIL tablets or any tablets or other dosage forms containing enalapril maleate as an active ingredient, manufactured from bulk enalapril maleate contained in lots P-65478, P-65479 and P-65480 as well as from the 44.9 kilograms of enalapril maleate, referred to in paragraph 1 hereof. |
[3] Specifically, the relief now sought by Apotex is for an Order:
| 1. Amending or varying paragraph 3 of the Trial Judgment dated December 22, 1994 as varied by the Court of Appeal Judgment dated April 19, 1995 amended May 16, 1995 ("Trial Judgment") to provide that Apotex is restrained and enjoined from infringing Canadian Letters Patent No. 1,275,349 ("'349 Patent") by manufacturing, using, offering for sale and selling, in Canada or elsewhere, dosage forms containing enalapril maleate as an active ingredient and directing a trial of the issues set out in Schedule "A" hereto (the "Issues") [[i.e., Schedule "A" to Apotex' motion]; |
| 2. In the alternative to paragraph [1], staying the operation [of] paragraph 3 of the Trial Judgment except as to the activity described in paragraph 1 hereof pending trial of the Issues, or in the alternative, pending further order of the Court in an action to be commenced by Apotex and Signa S.A. de C.V. in the form attached hereto as Schedule "B" ("Signa Action") [i.e., Schedule "B" to Apotex' motion]; |
| 3. In the alternative to paragraphs 1 and 2, amending or varying paragraph 3 of the Trial Judgment to provide that Apotex is restrained and enjoined from infringing '349 Patent by manufacturing, using, offering for sale and selling, in Canada or elsewhere, dosage forms containing compounds falling within the scope of claims 2 to 5 of the '349 Patent and directing a trial of the Issues; |
| 4. In the alternative to paragraphs 1 to 3, staying the operation of paragraph 3 of the Trial Judgment except as to the activity described in paragraph 3 hereof pending trial of the Issues, or in the alternative, pending further order of the Court in the Signa Action. |
[4] The issues which Apotex seeks to have tried, if one of the orders now applied for is granted, are the following.
| (1) Is claim 1 of Canadian Patent No. 1,275,349 invalid by reason of overclaiming and inutility by reason of the following: |
| (a) That the number of compounds covered by claim 1 of the '349 Patent is so large that it is impossible that anyone could ever make and test all of them; |
| (c)[sic] That there was not any sound basis for predicting the pharmaceutical utility of the entire class of compounds covered by claim 1 of the '349 Patent; and |
| (d)[sic] That, in fact, many, if not most, of the compounds covered by claim 1 of the '349 Patent are not useful? |
| (2) Are claims 8 and 11 of Canadian Patent No. 1,275,349 invalid by reason of the matters set out in issue (1) and the fact that claims 8 and 11 are dependent upon claim 1? |
[5] In the action leading to judgment, Merck did not seek a declaration of validity of its patent or the claims contained in it, but it did seek a declaration of infringement, and a permanent injunction against continuing infringement, in regard to claims 1 to 5 and 8 to 15 of the '349 patent. Apotex did not contest the validity of claim 1, but validity of claims 8 to 17 was denied by its defence and by counterclaim it sought a declaration those claims were invalid. By the judgment, the primary objective sought by Merck, a finding of infringement, was made as a result of finding that Apotex, by manufacture and sale of tablets containing enalapril maleate, a product included within the terms of claim 1, and other compound claims, i.e., claims 2 to 5, infringed upon Merck's patent interests, as did its use of the product protected by composition and use claims 8 to 15. The relief sought by Merck, including declaratory relief to that effect, and a permanent injunction against Apotex, its officers and employees from infringing claims 1 to 5 and 8 to 15 of the '349 patent, was granted following trial.
[6] Judgment following trial was appealed by Apotex. The Court of Appeal reversed the judgment in part, in April 1995, upholding Apotex' principal defence based on s. 56 of the Patent Act, R.S.C. 1985, c. P-4 (the "Act") as it then applied, but that Court maintained the finding of infringement and the relief awarded in relation to Apotex' use of enalapril maleate from sources identified at trial which were not protected by s. 56 or by licence. In the result, terms of the judgment were amended. Thereafter, each of the parties applied to the Court of Appeal, pursuant to Rule 337, to vary terms of the judgment as amended and a further amendment of its terms resulted by amending judgment in May 1995. Both parties applied to the Supreme Court of Canada for leave to appeal, but those applications were denied in December 1995.
[7] Subsequently, in January 1996 Merck made a further application to the Court of Appeal pursuant to Rule 337 to vary the terms of the judgment as amended. That motion was dismissed in March 1996. In dismissing the application, the Court of Appeal commented, in relation to the injunction ordered by paragraph 3 of the judgment as amended, as follows.
| Paragraph 3 of the Trial Judgment as amended by this Court's Judgment of April 19, 1995 broadly restrains and enjoins the appellant "from infringing claims 1 to 5 and 8 through 15 inclusive of Canadian Letters Patent 1,275,349". The phrase in that paragraph beginning with the words "and in particular" does not in any way cut down the broad scope of the injunction granted in the opening words of the paragraph. |
[8] Since the judgment following trial and the modification of its terms by the Court of Appeal, Apotex has become aware of the availability for purchase of compounds other than enalapril or enalapril maleate, which newly recognized compounds it says fall within the scope of claim 1 of the '349 Patent. The compounds in question would appear to be included within claim 1 and their composition and use within claims 8 and 11, which latter two are dependent on claim 1, but they are said not to be within other claims of the Merck patent.
[9] Apotex and Signa S.A. de C.V., a Mexican company, which is said to have developed the compounds Apotex is now interested in developing and marketing, commenced a separate action in this court by Statement of Claim, filed April 15, 1997, seeking to impeach the validity of claims 1, 8 and 11 of the Merck patent (see Court file T-2869-96). That challenge is based on the perception that the terms of claim 1 of the Merck patent are too broadly drawn to be valid, a perception supported in this application by affidavits of experts whose evidence is that claim 1 includes so many uncounted compounds that it could not be valid. An order of the sort sought by Apotex in this application would permit it to proceed with a challenge to the validity of claims 1, 8 and 11 of the Merck patent either by itself, by permitting trial of the validity of these claims by reopening trial in the original action, or else by trial in the action initiated by Apotex with Signa, while permitting Apotex to proceed to use or market the compounds it seeks to purchase from Signa pending determination of the challenge to the validity of the patent claims now questioned.
[10] Unless the terms of the injunction are revised or its application stayed or circumscribed, as Apotex now seeks, its broad terms, which are not limited to infringing lots of enalapril maleate or to that product, would preclude Apotex from entering the market with other compounds included in claim 1. In effect, as Apotex characterizes it, the injunction would operate as though Merck had the benefit of an interlocutory injunction precluding use or sale of products other than enalapril maleate without having had to seek such protection pending determination of the validity of claim 1. Since only Apotex is so barred from use of other compounds, it is urged the effect of the injunction, unless it is modified, would be unjust.
[11] The application requires review of the issues tried in the action, consideration of the Court's jurisdiction to grant the relief sought and, Apotex urges, recognition that the doctrine of res judicata is not applicable in the circumstances of this case. Finally, I deal with the issue of costs as raised by Merck.
The issues tried in the action
[12] A summary review of the proceedings before and after trial provides the context in which this application is raised. Merck initiated its action by statement of claim filed in September 1991 seeking declaratory and injunctive relief as well as damages for alleged infringement of specified claims, 1 to 5 and 8 to 15 of its '349 patent, by reason of Apotex' manufacturing and sale of its enalapril maleate product. Apotex filed a Defence on November 15, 1991, a Defence which did not specifically challenge the validity of claims 1 to 5 of the Merck patent, though it did challenge the validity of claims 8 to 17, which are composition and use claims, and it counterclaimed for a declaration that the latter claims, 8 to 17, were invalid. When asked for particulars in relation to alleged invalidity, Apotex' particulars filed in December 1991 and January 1992 included allegations of invalidity of claims 1 and 2 to 8, in addition to claims so characterized by the original Defence filed. Apotex' principal defence from the beginning was based upon s. 56 of the Act in relation to its manufacture and sale of tablets which were produced from bulk material acquired prior to the issue of the Merck patent in October, 1990.
[13] Little was done in relation to the action until after Apotex was granted a notice of compliance in September 1993 authorizing its sale of its enalapril maleate produce. Merck then sought interim and interlocutory injunctions pending trial of its action for alleged infringement. Those injunctions were not granted, but the parties agreed to and were directed to meet an expedited schedule for trial. Trial occurred in April 1994, after pleadings and discoveries were completed, including the filing in February 1994 of an Amended Defence on behalf of Apotex with consent of Merck, following somewhat prolonged negotiations between counsel. At least one suggested version of an Amended Defence specifically challenged the validity of claims 1 to 5, as well as claims 8 and 17, but in the end the Amended Defence filed did not include any challenge to validity of claims 1 to 5. Instead its only reference to claims challenged for validity was in these terms, in paragraph 2 of the Amended Defence:
| 2. With respect to paragraphs 6, 7 and 8 of the Statement of Claim, subject to section 56 of the Patent Act and the availability of licenced enalapril and enalapril maleate, and for the purpose of the within action only, the Defendant admits that the Plaintiff, Merck & Co. Inc., as registered owner of Canadian Letters Patent No., 1,275,349 (the "Patent"), would be entitled to the exclusivity granted under the Patent Act in respect of the claims in the Patent, save and except as to the claims relating to the dosage form of the compounds and their use as more particularly claimed in claims 8 to 17 inclusive of the Patent, the validity of which claims is not admitted but denied, as more particularly set out below. |
Paragraph 8 of the Statement of Claim, to which this paragraph refers, sets out the terms of claims 1 to 5 and 8 to 15 of the patent.
[14] Thus the Amended Defence specifically contested validity only of claims 8 to 17, not of claim 1 of the patent. However, paragraph 2 of the Amended Defence, including the phrase "for the purpose of the within action only", is said to support the views of Dr. Sherman, Chairman of Apotex, and of one of counsel for Apotex at trial, that Apotex had not intended to concede validity of claim 1, or that there was an understanding or agreement between the parties that validity of claims 1 to 5 was somehow reserved, for argument another day.
[15] Underlying the view of Apotex about the matters dealt with at trial leading to the injunction now questioned is the perception that the only issues tried related specifically and exclusively to its use of the product enalapril maleate. Thus Apotex urges that the infringement alleged in Merck's Statement of Claim issued in September 1991 related only to the manufacture and sale of enalapril maleate in final dosage form. It is said that Apotex framed its defence in the action with regard only to that product, which it had acquired in bulk before Merck obtained its patent or from a supplier holding a compulsory licence, use of which Apotex believed did not constitute infringement because of s. 56 of the Act or because of a valid licence. Its defence ultimately did not challenge the validity of any claim except composition and use claims 8 to 17, which were contested because of Merck's position that even if the bulk product acquired by Apotex was not subject to a claim for infringement, manufacture of that product into finished tablets for sale was not protected by s. 56 or by the licence of a supplier.
[16] By affidavit Dr. Sherman and one of counsel for Apotex aver that no serious consideration was given in advance of trial to questioning validity of claims 1 to 5, a description of pre-trial preparations which Merck vigorously contests in light of the full history of negotiations over Apotex' Defence to the action. Reference is made by Merck to the particulars provided by Apotex in regard to its Defence originally filed in 1991 and to draft amended defences not filed, which specifically questioned validity of claims 1 to 5. It is acknowledged by Dr. Sherman that the broad scope of claim 1 was perceived then. There is reference by Merck to Apotex' examination, in discovery of Merck's spokesman, about claim 1. In any event, ultimately the validity of claim 1, and of claims 2 to 5, was not questioned by Apotex' Amended Defence as filed. Now it is explained that Apotex perceived no purpose in questioning claim 1 in view of its s. 56 defence and since enalapril maleate is specifically covered by claims 2 to 5 which are more narrowly drawn than claim 1. That is hardly a full explanation of the ultimate decision not to question validity of the compound claims 2 to 5 in addition to not contesting claim 1, which from early stages in the pleadings, particularly from Apotex' response to Merck's request for particulars, was alleged to be too broadly drawn to be valid.
[17] I accept that it was only after trial that Apotex became aware of one or more compounds other than enalapril maleate believed to be within the scope of claim 1 and not within claims 2 to 5, which it might use and sell. That more recent awareness is, of course, the underlying basis for this application to vary the judgment rendered after trial. I accept also that the Amended Defence was filed on behalf of Apotex with consent of Merck. I would even be prepared to accept that when pleadings were closing "Apotex' preferred position was that the issue of the validity of the compound claims not be litigated in the proceedings but be deferred for determination, if necessary, at a later time", as Apotex sets out in its Memorandum on this motion. I am, however, not prepared to accept that "With the concurrence of Merck, the issue of the validity of the compound claims was therefore deferred", as Apotex also claims in written submissions, and indeed that was not seriously argued when this application was heard.
[18] Whatever Apotex' intent may have been at the time, its view now, on reflecting back, ignores several relevant factors in the context of the pre-trial preparations and the trial itself. First, while the Statement of Claim alleges infringement by manufacture and sale of enalapril maleate, it also sets out, inter alia,
| 21. By reason of the acts of the Defendant set out herein, the Defendant has infringed claims 1 to 5 and 8 to 15 of the Patent. |
| 22. The Plaintiffs are not aware of the full extent of the Defendant's infringements but claim relief in respect of all acts of infringement by the Defendant. |
| 23. The Defendant will continue to infringe the rights of the Plaintiffs unless restrained by this Honourable Court. |
| ... |
| 26. THE PLAINTIFFS THEREFORE CLAIM: |
| (a) a declaration that claims 1 to 5 and 8 to 15 of Canadian Letters Patent No. 1,275,349 have been infringed by the Defendant; |
| (b) an injunction, both interlocutory and permanent, restraining the Defendant by its officers, directors, servants, agents, employees, or otherwise, from infringing claims 1 to 5 and 8 to 15 of Canadian Letters Patent No. 1,275,349. |
By its terms, Merck's Statement of Claim sought relief that is broader in its application than concern exclusively with Apotex' enalapril maleate tablets. It sought protection of the full scope of its patent, as defined by the claims specified in that statement.
[19] Second, while Apotex now perceives a narrow range of issues were tried, there was acknowledgement at the hearing of this motion that questioning the validity of claim 1, and other compound claims, was considered, even if not in depth, in pre-trial preparations by Apotex but ultimately was not pursued under its Amended Defence. There is no evidence at all of any agreement or understanding between the parties that the validity of claim 1 or other claims not questioned at trial was reserved, or even that it was believed then by Apotex to be reserved, for consideration at a later time.
[20] Third, the decision not to question the validity of claim 1 or other compound claims at trial was a decision by Apotex; whatever its intent may then have been, that intent is apparent only from the terms of the Amended Defence as filed. The Court then dealt with the issues not as they were intended or framed exclusively by Apotex, but as they were framed under the pleadings of both parties. That includes both Merck's claim to relief against alleged infringement of claims 1 to 5 and 8 to 15, and Apotex's claims, questioning only the validity of the patent claims 8 to 17, aside from its defence pursuant to s. 56. I note that Merck is able to point to comments of its counsel at trial, in opening remarks and, in closing submissions, which refer specifically to Apotex' concessions of validity of the compound claims 1 to 5, comments not then disputed on behalf of Apotex.
[21] Finally, the Amended Defence by paragraph 2 concedes, subject to s. 56 and the availability of licensed enalapril maleate, that Merck is "entitled to the exclusivity granted under the Patent Act in respect of the claims in the Patent", except claims 8 to 17 the validity of which is questioned. True, that concession was "for the purpose of the within action only", but it includes the "exclusivity" under the Patent Act arising from claims in the patent which were not contested for validity, including claim 1. By its express terms the Amended Defence concedes for "the purpose of the within action" that claim 1 is valid. These terms thus preclude a later claim, at this stage, in the same action, even if it be perceived to serve a new purpose not perceived until after trial, to question validity of claim 1. By this reading of its own Amended Defence, Apotex has excluded the possibility in this action of contesting the validity of claim 1. Implicitly, the validity of that claim, supported by the Act and not questioned by Apotex, underlies the finding of infringement and the injunction order so far as those relate to claim 1. Moreover, Apotex has already, in this action, contested the validity of claims 8 and 11, and it lost that contest. Though admittedly its arguments about validity of those claims would now be different, it is not within authority of this Court to reopen trial of matters disposed of at trial simply because an argument not advanced at trial might now be made, if permitted.
[22] In my opinion, whatever authority this Court may have to vary a judgment, that does not extend to reopening trial of issues disposed of expressly or implicitly in reaching the judgment now sought to be varied. Thus the relief sought by Apotex to vary the terms of the injunction and direct trial of issues now raised is simply not within this Court's jurisdiction. There would be no end of litigation if a party were free to reopen trial of issues once disposed of because a circumstance not contemplated at the time of trial has now come to its attention. The general principle is that there be an end to litigation between parties. Aside from exceptional circumstances a trial is a once and for all time event, settling the issues raised, as between the parties, for all time, subject only to variation on appeal, or within the narrow circumstances within the Court's Rules for change by the trial judge.
[23] That principle precludes this Court from reopening the trial for consideration of issues that might have been raised and were not, for whatever reason, and that now have been implicitly determined by the judgment following trial. That trial judgment has been amended on appeal and further appeal to the Supreme Court of Canada has been refused. Thus, in my opinion, that principle precludes the exercise of any discretion the Court might have to reopen the trial, to direct the trial of new issues or to vary the terms of the injunction as amended for that purpose. This means that the alternatives set out in paragraphs 1 and 3 of Apotex' request for relief in this application are now denied.
[24] Whether I am right or wrong in that assessment, the other forms of relief sought here, in alternatives 2 and 4, must be considered. The relief sought must be within this Court's jurisdiction to award, which Merck submits is not the case, and if it is within the Court's jurisdiction there must be valid reason, not precluded by the doctrine of res judicata, for granting the relief sought.
Jurisdiction of the Court to award relief sought
[25] It is Merck's submission that there is no jurisdiction in the Court to award the relief sought. The Federal Court, a creature of statute, has long been acknowledged to be without inherent jurisdiction, and no statutory authority and none provided by the rules of the Court for varying terms of a judgment, is here relied upon by Apotex. Apotex' claim for relief does not even rely upon Rule 1733, an exceptional rule, which provides for an application to reverse or vary a judgment or order on the ground that a matter has arisen since the judgment or a matter has been subsequently discovered that would warrant variation of a judgment.
[26] I accept Merck's view that the general law precludes the Court from varying terms of a judgment except within particular exceptions. Those exceptions are basically set out in the Court's Rules. The only Rules that might provide a basis for argument in this case are Rules 337(5) and (6) - to correct accidental errors or oversight in the terms of the final order in accord with the expressed intent of the Court, or clerical errors, accidental slips or omissions, or Rule 1733 - to deal with new matter or with fraud. As noted, these Rules are not relied upon by Apotex. Instead, its argument is based upon the nature of the order in question, a permanent injunction, which in Apotex' view, is an order inherently subject to variation if its terms can be shown to work injustice or if it is otherwise inconsistent with the law or its purposes because of changes in the law or other circumstances, changes unforeseen at the time the injunction was awarded.
[27] In reliance upon jurisprudence from other courts, Apotex submits that where it is appropriate the Court has jurisdiction and discretion to alter or dissolve terms of a permanent injunction granted after trial where subsequent circumstances warrant this. Thus, in Commonwealth Scientific and Industrial Research Organization v. Perry2, the Supreme Court of South Australia, in appeal, disposed of a preliminary question of law directing dissolution of a permanent injunction, originally ordered on consent, where the foundation of the order had since been removed by statute authorizing what had previously been considered tortious. Here Parliament had expressly authorized conduct that the injunction had earlier prohibited. A similar change in circumstances, this time by action of Congress to authorize conduct previously precluded by an injunction, was recognized as a basis for dissolving the injunction in State of Pennsylvania v. Wheeling and Belmont Bridge Co.,3 and also in System Federation v. Wright.4 On the other hand where the changed circumstances relied upon as a basis for modifying a permanent injunction, at least one originally granted on consent, are not a legislative change, the changed circumstances must modify the underlying basis upon which the injunction was originally awarded if the Court is to be persuaded to modify its original order.5
[28] In none of these cases relied upon is there reference made to the Court concerned having authority under its own Rules, as this Court does under its Rule 1733, to vary a judgment in light of changed circumstances after judgment. As a matter of first impression it seems to me that a change in circumstances after judgment, as here relied upon by Apotex, can be dealt with under Rule 1733, if at all. But assuming there is merit to Apotex' argument that the nature of the order in question, a permanent injunction, is a separate source of discretionary authority for the Court to vary an order, as in Rule 1733 that authority would be exercised only in exceptional circumstances. The important public interest in the finality of judgments requires that for Rule 1733 to apply an applicant must show that the matter discovered after the judgment could not have been discovered sooner with reasonable diligence and that it is of such a character that if brought forward earlier in the action it could have altered the judgment. Similar exceptional conditions should be applicable in considering a variation of a permanent injunction, assuming the Court has jurisdiction to do so apart from Rule 1733.
[29] In this case Apotex does not claim that the breadth of claim 1 is a new issue of which it was unaware at trial. Rather, it claims that identification of one or more compounds within claim 1, but not within claims 2 to 5, which might be developed for use and marketing is the new circumstance warranting variation of the Court's Order. Yet that may become a reason for challenging validity of claim 1 only through an attack on the breadth of the claim and utility of the compounds described by it, matters considered earlier by Apotex but not advanced by its Amended Defence in the action.
[30] In my opinion, the new circumstance is simply a new reason for raising a defence that might have been, but was not, raised at trial, in relation to claim 1. It is not an exceptional circumstance within the meaning of Rule 1733, nor is it a new development that was beyond being advanced at trial on the same basis that is here sought to be established by expert affidavits containing theoretical analysis concerning the scope of claim 1. Nor is it the sort of exceptional circumstance that would warrant amendment of the injunction, assuming the Court may vary a permanent injunction apart from Rule 1733. The injunction, if it continues as amended, without further change, does not work an injustice against Apotex. It is subject to the order because it lost the action after the trial in which it had every opportunity to raise all possible defences, including an attack on the validity of claim 1 and other compound claims.
[31] In my opinion, the relief sought by Apotex may be within the Court's jurisdiction pursuant to Rule 1733 if requirements of that Rule are met, but Apotex does not rely on that Rule and it has not established the exceptional circumstances that would warrant variation of the Court's Order under that Rule. If, apart from that Rule, the Court has any discretion to vary a previous order in the nature of a permanent injunction it can only be where changes subsequent to judgment vary the underlying reasons for which the relief was originally granted. That sort of change is not here established. Thus I am not persuaded that the Court's authority and discretion to vary the injunction here in question should be exercised as Apotex requests.
[32] I reach a similar conclusion in relation to Apotex' requests under paragraphs 2 and 4 of its motion, as set out above in paragraph 3 of these Reasons, for a stay of the application of the amended injunction in respect of activities of Apotex other than use of enalapril maleate (paragraph 2) or other than use of compounds within claims 2 to 5 of the patent (paragraph 4), pending further order of the Court in the action commenced by Apotex and Signa. The usual requirements for a stay of the court's order, particularly the prospect of irreparable harm, are not here met. Written submissions suggest that if the injunction is not varied or stayed as requested, Apotex will lose the opportunity to develop and market compounds other than enalapril maleate, for Signa will make arrangements with another manufacturer.
[33] The argument is based on comments of Dr. Sherman, not in an affidavit, but in examination upon his two affidavits filed in this matter, particularly a statement in one affidavit that Apotex is now in a position to use and sell compounds other than enalapril maleate. After acknowledging that no application had been made for a notice of compliance in relation to proposed use of any compound within claim 1, Dr. Sherman commented that even without such a notice the compounds could be sold for export, or for certain uses for clinical trials, or he thought even for sale in other countries as prescription drugs without doing any testing or clinical trials.
[34] In my opinion, those comments in response to questions in cross-examination do not provide more than mere speculation about possible loss to Apotex. That is not sufficient to establish the irreparable harm, to be expected pending determination of a serious issue, that is required for a stay of the Court's order. (See generally: RJR MacDonald Inc. v. Attorney General of Canada6, Manitoba (A.G.) v. Metropolitan Stores (MTS) Ltd.7). In my opinion the grounds for a stay of the court's order, even in part, are not here established.
Res judicata
[35] Much of Apotex' argument, in writing and when this matter was heard, was devoted to distinguishing the circumstances here from considerations that arise in relation to the application of the principle of res judicata, to persuade the Court that those considerations were not here applicable. That principle, whether applied as estoppel in relation to a cause of action or in relation to a particular issue, is based upon basic policy considerations that there be an end to litigation, and in the civil context that no party should be subject to suit more than once for the same cause.
[36] As clarified at the hearing the purpose of dealing with the implications of res judicata in this application was to persuade the Court that those did not preclude varying the injunction as amended and directing trial of the issues that Apotex now seeks to raise within continuing proceedings of the trial action in Court file T-2408-91. For reasons set out earlier I dismiss the application so far as it concerns this Court directing relief of that sort. There will be no trial of the issues now proposed within the proceedings on that Court file.
[37] Merck submits that the doctrine of res judicata is not relevant for the motion now before the Court for it has application only where in an action it is urged that the issues raised have already been dealt with by a Court of competent jurisdiction in a prior decision. Thus, it may be relevant in considerations arising in the separate action commenced by Apotex and Signa S.A., seeking to challenge validity of claim 1 of the '349 patent, at least insofar as the plaintiff Apotex in that action is concerned. For Apotex in this application, it was agreed when this matter was heard that if the issues now sought to be raised do not go forward in the proceedings within Court file T-2408-91, while res judicata might be relevant in a separate action raising those issues, it would not be a matter dealt with in the motion now before me. While the circumstances may be somewhat analogous to separate actions, clearly the doctrine of res judicata is not relevant in considering whether this Court should order that trial proceedings be reopened to consider the issues Apotex now seeks to raise.
[38] Whether Apotex proceeds with a separate action for the purpose of questioning the validity of claim 1 of the '349 patent is a matter for it to determine with the possibility of res judicata being raised as a defence in that action. It is not for this Court to order trial of that question. Nor is it for this Court to order that the amended injunction previously ordered should now be varied to permit Apotex to use compounds other than enalapril maleate that it believes are within claim 1 of the patent, whether or not it does pursue the question of the validity of claim 1 in another action.
Conclusion on the merits
[39] I sum up my conclusions. I am not persuaded that there is any basis here established for the Court to grant any of the alternative forms of relief sought by Apotex. In my opinion, the issues dealt with at trial as determined in this Court's judgment and as amended by the Court of Appeal mean that this Court is functus officio in relation to those matters within the issues raised by the pleadings of both parties. No ground is established to warrant reopening of the trial for determination within this proceeding of the issues Apotex now seeks to raise and there is no ground upon which the Court, even if it has discretion to do so, should now direct trial of those issues, or modify the terms of the judgment rendering an injunction as amended by the Court of Appeal, or stay the application of that injunction insofar as it relates to use by Apotex of compounds other than enalapril maleate or compounds within claims 2 to 5 of the Merck patent.
[40] Thus, an order goes dismissing the application by Apotex.
Costs
[41] Merck asks for costs against the defendant Apotex on a solicitor and client basis in any event of the cause, or costs fixed in the sum of $20,000 plus disbursements, to be paid forthwith. That request is said to be based upon the lack of any basis for the relief requested by the motion, which in Merck's perception is frivolous and vexatious. It is said to be based on assertions in affidavits which border on misrepresentations or untenable interpretations of events. Those are said to have required great time and expense commitments by the plaintiff Merck to provide the Court with a complete record of events so that there be "an accurate understanding of events misdescribed in Apotex' affidavits", as Merck's written argument states.
[42] It is Apotex' view that the application raises serious issues, that these are not frivolous and vexatious and that if costs be awarded there is no basis for considering costs on other than a normal party and party basis.
[43] In my opinion, there is no basis for an award of costs on a solicitor and client basis. The fact that an application is unsuccessful does not mean that it is frivolous or vexatious, for that is the case with many applications. It is urged by Merck that just as an action may be frivolous and vexatious where the plaintiff does not demonstrate a factual basis for standing as an interested person under the Act8, so a motion is frivolous and vexatious where the moving party fails to reveal a factual basis for such standing. I am not persuaded that this motion should be treated in the same way as one to strike an action in proceedings to strike under Rule 419, but even if it were so treated a successful motion to strike does not ordinarily lead to an award of costs on a solicitor and client basis. Further, an application is not frivolous and vexatious, in my view, merely because the party advancing the motion stresses in evidence by affidavit those aspects of background matters that support its case.
[44] Where, however, evidence is offered by one party in support of its position, and that is done with the risk of presenting a less than full description of the history of dealings between the parties, at least in the view of the other party so that it devotes more than normal time and attention to review of the history of those dealings, with a view to ensuring the Court has a full and fair view of the background as perceived by both parties, the party taking that risk of presenting a less than full view should expect, if it is unsuccessful, to bear some of the costs incurred by the other party in ensuring the Court has a full and fair overview. In my opinion this can best be taken into account by an award of costs with reference to columns reflecting higher units for costs in Part II of Tariff B under Rule 344(4.1). That Rule provides that "...the Court may direct that the taxation [of costs awarded] be performed under a specific column or combination of columns of Part II of that Tariff".
[45] In the result, I order costs to be taxed, and paid by Apotex without delay when taxed, on a party and party basis including provision for senior and junior counsel for Merck at the hearing of this matter in accord with Column III, Part II of Tariff B and for the cross-examination of Drs. Marshall and Csizmadia in accord with that same column, and provision for all other preliminary steps to be taxed in accord with the maximum units of Column IV of Part II of Tariff B, together with all reasonable disbursements incurred both by counsel, and by instructing counsel of Merck (Mr. Murray), in regard to preparations of Merck's evidence and argument and in relation to the hearing of this application.
Judge
OTTAWA, Ontario
January 23, 1998.
__________________1. The judgment in issue was originally rendered by Reasons for Judgment dated December 14, 1994 (reported at (1994), 88 F.T.R. 260, 59 C.P.R. (3d) 133), and was thereafter confirmed by Judgment filed December 22, 1994 after consideration of submissions from counsel for the parties on terms of the Judgment. The Judgment, including clause 3 which provides for the injunction in question, was later varied by the Court of Appeal by its Judgment dated April 19, 1995 (Reasons for Judgment reported at [1995] 2 F.C. 723, (1995), 80 N.R. 373, 60 C.P.R. (3d) 356). That Court's Amended Judgment of May 16, 1995 further modified clauses other than clause 3 of the original judgment as amended.
2. (1988), 92 F.L.R. 182 (S.C.S.A.).
3. 59 U.S. 421 (1855) (U.S.S.C.).
4. 346 U.S. 642 (1960) (U.S.S.C.).
5. United States v. Swift & Co., 286 U.S. 106 (1933) (U.S.S.C.).
6. [1994] 1 S.C.R. 311, 54 C.P.R. (3d) 114, 111 D.L.R. (4th) 385, 164 N.R. 1.
7. [1987] 1 S.C.R. 110, [1987] 3 W.W.R. 1, 25 Admin. L.R. 20, 18 C.P.C. (2d) 273, 38 D.L.R. (4th) 321, 73 N.R. 341.
8. ACIC (Canada) Inc. v. Merck & Co. Inc., (1995), 62 C.P.R. (3d) 362 at 365 (F.C.T.D.).