Date: 20050527
Docket: A-579-04
Citation: 2005 FCA 203
Present: EVANS J.A.
BETWEEN:
APOTEX INC.
Appellant
(Plaintiff by counterclaim)
and
ELI LILLY AND COMPANY and ELI LILLY CANADA INC.
Respondents
(Defendants by counterclaim)
and
SHIONOGI & CO. LTD.
Respondent
(Defendant by counterclaim)
Dealt with in writing without appearance of parties.
Order delivered at Ottawa, Ontario, on May 27, 2005.
REASONS FOR ORDER BY: EVANS J.A.
Date: 20050527
Docket: A-579-04
Citation: 2005 FCA 203
Present: EVANS J.A.
BETWEEN:
APOTEX INC.
Appellant
(Plaintiff by counterclaim)
and
ELI LILLY AND COMPANY and ELI LILLY CANADA INC.
Respondents
(Defendants by counterclaim)
and
SHIONOGI & CO. LTD.
Respondent
(Defendant by counterclaim)
REASONS FOR ORDER
[1] The Commissioner of Competition has brought a motion under rule 369 of the Federal Courts Rules for leave to intervene pursuant to rule 109 in the appeal by Apotex Inc. against an order of Hugessen J. of the Federal Court, dated October 20, 2004. The decision is reported as Eli Lilly and Co. v. Apotex Inc., 2004 FC 1445.
[2] On a motion for summary judgement Hugessen J. struck out a counterclaim and defence by Apotex to an action by Elli Lilly and Company and Eli Lilly Canada Inc. ("Lilly") for infringing its eight patents for processing cefaclor, an antibiotic drug. Four of these patents had been assigned to Lilly by Shionogi & Co. Ltd.
[3] Apotex alleged in its defence and counterclaim (to which it added Shionogi) that, since Lilly already owned four other relevant patents, the assignment of Shionogi's four patents lessened competition unduly because it enabled Lilly to control all the commercially viable processes for producing cefaclor. The agreement to assign, Apotex alleged, thereby constituted a criminal conspiracy contrary to section 45 of the Competition Act, R.S.C. 1985, c. C-34, and gave rise to an action in damages under section 36.
[4] Hugessen J. rejected this argument. He held (at para. 22) that, while the assignment lessened competition, it did not do so "unduly", because subsection 50(1) of the Patent Act, R.S.C. 1985, c. P-4, expressly authorises the assignment of patents. He found (at para. 23) that his conclusion was compatible with the Intellectual Property Enforcement Guidelines ("IPEGs") issued by the Commissioner.
[5] The Commissioner seeks leave to intervene in the appeal from Hugessen J. on two issues: whether the Judge erred in holding that section 50 of the Patent Act excludes assignments of patents from sections 45 and 36 of the Competition Act, and that his conclusion that it did was compatible with the IPEGs. The Commissioner's motion to intervene is opposed by Lilly and Shionogi, and supported by Apotex.
[6] The Commissioner's motion to intervene will be granted on the basis of the factors identified in Canadian Union of Public Employees (Airline Division) v. Canadian Airlines International Ltd. [2000] F.C.J. No. 220 (F.C.A.) to guide the Court's exercise of discretion under rule 109.
[7] The Commissioner is directly affected by the appeal. In addition to her many and diverse specific functions, she has a general statutory responsibility for the "administration and enforcement" of the Competition Act: paragraph 7(1)(a). Her ability to administer the Act in respect of patent rights may be affected by the outcome of Apotex' appeal because it could completely remove the assignment of patents from her jurisdiction under section 45. The Commissioner may also be affected by the interpretation of the IPEGs, which Hugessen J. found to be consistent with his decision. In view of her broad statutory functions, her interest in the appeal is not merely "jurisprudential".
[8] The relationship between section 50 of the Patent Act and section 45 of the Competition Act involves a question of statutory interpretation that is plainly justiciable and of public interest. The interpretation of the IPEGs is also justiciable, and it is important to both the Commissioner and those to whom they apply that the meaning of their provisions is clear. This appeal provides an appropriate occasion for the Commissioner to be heard on these questions.
[9] The parties to the appeal are sophisticated litigants whose counsel will no doubt represent them most ably. However, as a result of her understanding of competition law and policy, the Commissioner is better placed to put before the Court the possible consequences and implications for the administration of the Competition Act resulting from the interpretation of the statutory provisions in question in this appeal. In addition, as the author of the IPEGs, and possessing knowledge of experience with the international development of comparable instruments, the Commissioner has a unique perspective on their meaning. In my view, the Commissioner is able to assist the Court in resolving the legal issues raised by the appeal.
[10] Although this appeal has been expedited, the Commissioner's intervention will not cause significant further delay. Even if leave to intervene were refused, the appeal would not have been heard until the Fall. The intervention should not preclude its being heard before the end of December. Any increased costs that the parties may incur as a result of the Commissioner's proposed intervention are likely to represent but a small proportion of the overall costs.
[11] Lilly also argues that the Commissioner cannot be given leave because she has no statutory power to intervene in proceedings before the Court. Counsel notes that sections 125 and 126 of the Competition Act authorise the Commissioner to intervene in proceedings before federal and provincial administrative tribunals, and that there are no similar provisions authorising interventions before courts.
[12] Counsel relies on Canada (Director of Investigation and Research under the Combines Investigation Act) v. Newfoundland Telephone Co., [1987] 2 S.C.R. 466, where the Court held that the Director (the Commissioner's predecessor) had no power to intervene in proceedings before the Newfoundland Board of Commissioners of Public Utilities and that, consequently, the Board could not grant leave to the Director to intervene before it. In my view, this case is distinguishable.
[13] First, the Director had no statutory mandate analogous to the responsibility of the Commissioner under paragraph 7(1)(a). The power to intervene in judicial proceedings when the court believes that the Commissioner will assist it in interpreting the Competition Act is implicit in the Commissioner's broad duty to enforce and administer the Act.
[14] Second, Newfoundland Telephone is not directly on point because it concerned interventions in proceedings before an administrative tribunal, not a superior court.
[15] Third, the Court in Newfoundland Telephone was influenced by the fact that the statute then in force empowered the Director to intervene before federal administrative tribunals, but was silent with respect to provincial tribunals. The Court inferred from this that the omission of provincial tribunals was deliberate and signalled a legislative intention to withhold from the Director the power to intervene before them.
[16] The statute was subsequently amended so as to expressly authorise the Commissioner to intervene before tribunals at both the federal and provincial levels. Because of the different functions of courts and tribunals it cannot be inferred from this provision, and from the omission of a power to intervene before courts, that Parliament did not intend impliedly confer on the Commissioner the power to intervene in court proceedings, with leave of the court. It is not as if the Act provides that the Commissioner may intervene in proceedings before superior courts established under provincial law and makes no reference to courts established by Parliament.
[17] For these reasons, leave to intervene will be granted on the terms set out in the order of the Court. However, the Commissioner's request to file the affidavit of Gwyllim Allen on the development of the IPEGs is denied. Interveners must normally accept the record as they find it. I am not persuaded that this affidavit warrants a departure from the normal rule.
[18] Accordingly, the Commissioner's motion will be allowed in part. There will be no order as to costs.
"John M. Evans"
J.A.
FEDERAL COURT OF APPEAL
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: A-579-04
STYLE OF CAUSE: Apotex Inc. v. Eli Lilly and Co. and Eli Lilly Canada Inc.
and Shionogi & Co. Ltd.
MOTION DEALT WITH IN WRITING WITHOUT THE APPEARANCE OF PARTIES
REASONS FOR ORDER BY: The Honourable Mr. Justice Evans
DATED: May 27, 2005
WRITTEN REPRESENTATIONS BY:
Mr. William Miller
Mr. Randall Hofley
Ms. Belinda Peres FOR THE PROPOSED INTERVENER
Mr. Harry Radomski
Mr. David Scrimger
Mr. Miles Hastie FOR THE APPELLANT
Mr. Patrick Smith FOR THE RESPONDENT
Mr. John Norman (Eli Lilly and Company and Eli Lilly Canada Inc.)
Mr. David Morrow FOR THE RESPONDENT
Mr. Colin B. Ingram (Shionogi & Co. Ltd.)
SOLICITORS OF RECORD:
Department of Justice
Legal Services
Competition Law Division FOR THE PROPOSED INTERVENER
- 2 -
Goodmans LLP
Barristers & Solicitors
Toronto, Ontario FOR THE APPELLANT
Gowling Lafleur Henderson LLP
Barristers & Solicitors FOR THE RESPONDENT
Ottawa, Ontario (Eli Lilly and Company and Eli Lilly Canada Inc.)
Smart & Biggar
Barristers & Solicitors FOR THE RESPONDENT
Ottawa, Ontario (Shionogi & Co. Ltd.)