Date: 19991008
Docket: T-2792-96
BETWEEN:
MERCK & CO. INC., MERCK FROSST CANADA INC.,
ZENECA LIMITED and ZENECA PHARMA INC.
Plaintiffs
(Defendants by Counterclaim)
- and -
APOTEX INC.
Defendant
(Plaintiff by Counterclaim)
REASONS FOR ORDER
LAFRENIÈRE P.
- [1] The plaintiffs seek to strike certain paragraphs from the statement of defence and
counterclaim ("defence") or, in the alternative, an order requiring the defendant to provide particulars in respect of the impugned paragraphs. The plaintiffs also requested a copy of certain documents referred to in the defence, which the defendant has since agreed to provide, and an order directing that the proceeding be specially managed.
| [2] This motion, although filed on January 22, 1999, was not heard until May 17, |
1999 following repeated adjournment requests by the parties. In the interim, the Court conducted a status review in accordance with Rule 380 of the Federal Court Rules, 1998. Following receipt of written submissions from the parties, Mr. Justice Lutfy allowed the action to continue and ordered it to proceed as a specially managed proceeding. Consequently, I need not deal with the question of special management of this action.
Undue delay
| [3] The defendant submits, as a preliminary point, that the present motion should be |
dismissed for delay, having been brought some 18 months after the defence was filed. The pleadings are now closed and the plaintiffs are deemed to have denied each and every allegation in the defence. The defendant submits that a party cannot object to any perceived deficiency in either the form or content of a pleading if it pleads over or is deemed to plead over without objection. To better appreciate the defendant"s objection and to place it in context, I have reviewed the steps taken by the parties since the action was initiated in December 1996.
| [4] The statement of claim advances allegations of both present and future acts of |
infringement of Canadian Letters Patent No. 1,275,350 (""350 Patent") by the defendant. The "350 Patent contains claims for the compound known as lisinopril, a multitude of other compounds defined by the formula in Claim 1 and claims for pharmaceutical compositions comprising effective amounts of the compounds identified in Claim 1, together with a pharmaceutically acceptable carrier.
| [5] The statement of claim was issued by the plaintiffs following a decision of the |
Federal Court of Appeal (Zeneca Pharma Inc. v. Canada (Minister of National Health and Welfare)) dismissing their application under the Patented Medicines (Notice of Compliance) Regulations ("Regulations") to prohibit the Minister of National Health and Welfare from issuing a Notice of Compliance to the defendant for its brand of the medicine lisinopril.
| [6] In March 1997, the defendant moved to strike certain paragraphs in the statement |
of claim relating to alleged "future" acts of infringement by the defendant or, in the alternative, an order directing the plaintiffs to plead the requisite material facts and to provide sufficient particulars of any such allegation. The impugned paragraphs were ordered struck on March 21, 1997. The plaintiffs subsequently amended the statement of claim, however, upon further motion by the defendant, the Plaintiffs were ordered on April 21, 1997 to amend a paragraph of the statement of claim and delete another one in its entirety. The plaintiffs appealed this second order on May 2, 1997.
| [7] The defendant subsequently served and filed its defence and counterclaim on July |
31, 1997. After the defence was filed, the plaintiffs by their own admission took no further action in the proceeding other than pursue their appeal of the Order dated April 21, 1997, which remains pending before the Federal Court of Appeal. The defendant submits that since no reply was filed by the plaintiffs, the pleadings were closed 15 days after service of the defence in accordance with former Rule 431.
| [8] Counsel for the defendant maintains that the plaintiffs should not be allowed to |
strike certain paragraphs in the defence on any grounds listed in Rule 221(1)(b) through (f) because there has been an inordinate delay between the delivery of the last pleading and the motion to strike. Similarly, he submits that the Court should not entertain a motion for particulars following a lengthy delay between the filing of the allegedly insufficient pleading and the demand or motion for their production.
| [9] As with any other irregularity, the party seeking particulars should move with |
reasonable dispatch in asserting any alleged entitlement to an order rectifying the irregularity. The plaintiffs concede that they have taken no steps to challenge the defence during the preceding 18 months. The general principle is that a motion to strike should be brought without delay and before the party pleads in reply to the impugned paragraphs, which the plaintiffs are deemed to have done at the expiration of the time for so doing. However, Rule 221(1) gives the Court a discretion "at any time" to order that a pleading, or anything contained therein, be struck. I have taken into account the fact that the plaintiffs" appeal is still pending, that the parties have yet to proceed to discovery and that any prejudice to the defendant for the delay can be compensated by an order of costs. Moreover, striking of improper pleadings or requiring necessary particulars will surely assist the parties to narrow the issues between them and to focus on resolution of the proceedings. I therefore reject the defendant"s request that plaintiffs" motion be dismissed on the grounds of delay.
Striking pleadings
| [10] Rule 221(1)(a) provides that a pleading or anything contained therein may be |
struck out on the ground that it discloses no reasonable cause of action or defence. On a motion to strike paragraphs in a pleading, the Court must be convinced that it is "plain and obvious" that the impugned paragraph fails to disclose a reasonable cause of action or defence ( Hunt v. Carey Canada Inc ., [1990] 2 S.C.R. 959.)
| [11] The following principles apply in motions to strike. The Court must accept the |
facts alleged as proven, and then ask whether the allegation the paragraph advances or supports is so clearly futile that the respondent would have no possible chance of success at trial. The pleading must be read generously with due allowance for drafting deficiencies. The Court should not resolve disputed questions of law. Finally, the Court should only strike paragraphs in the clearest of circumstances where there is no arguable basis for including the matters to which objection has been taken (Comstock Canada v. Electec Ltd. (1989), 28 C.P.R. (3d) 495 at 500 (F.C.T.D.), Hirsh Co. v. Minshall (1988), 22 C.P.R. (3d) 268 (F.C.A.) and Ceminchuk v. IBM Canada Ltd. (1995), 62 C.P.R. (3d) 546 at 549 (F.C.T.D.))
Impugned paragraphs
| (a ) paragraphs 2 and 5 of the defence |
| [12] The plaintiffs submitted in their written representations that paragraph 2 of the |
defence is inconsistent with paragraph 5 and that therefore the inconsistent allegations should be struck. At the hearing of the motion, the plaintiffs withdrew their objection after considering the defendant"s written argument. Consequently, paragraph 2 will remain. However, the propriety of paragraph 5 remains at issue since the plaintiffs attack it on another ground as reflected below.
| (b) paragraphs 4, 5, 6 and 7 of the defence |
| [13] The plaintiffs seek to strike paragraphs 4, 5, 6 and 7 of the defence on the ground |
that the defendant relies upon section 56 of the Patent Act without pleading the facts necessary for the provision to apply. Counsel for the plaintiffs argues that the defendant does not plead that it acquired the lisinopril prior to issuance of the patent, but simply states lisinopril was made before issuance of the patent. Nor, the plaintiffs contend, does the defendant state when it acquired the lisinopril, its source and the complete chain of title from the manufacturer to the defendant. The plaintiffs also take issue with paragraph 7 in that the awareness by the plaintiffs of the defendant"s actions is irrelevant to whether the requirements of section 56 have been satisfied.
| [14] Counsel for the defendant submits that the defence, based on section 56 of the |
Patent Act, is clearly delineated. He further argues that it is entirely specious to suggest that it is "plain and obvious" that the defence cannot succeed. To the extent that any additional facts will assist in sustaining the defence, evidence can be adduced at trial to do so. There is nothing in the impugned paragraphs inconsistent with the plea as framed. Moreover, the defendant asserts that the plaintiffs" awareness of facts establishing the legitimacy of the defence is at least potentially relevant to Apotex" plea for a higher scale of costs in respect to both the defence and counterclaim. Moreover, the "relevance" of an allegation in a pleading attacked 18 months after issuance should not be the subject of adjudication now.
| [15] Paragraphs 4, 5 and 6 of the defence do not, in my opinion contain the necessary |
material facts to support a section 56 defence. Paragraph 4, by itself, is nothing more than a bald assertion and is inextricably linked to the subsequent paragraphs. The facts as pleaded in paragraphs 5 and 6 are not rationally connected to a section 56 defence. Moreover, the deficiencies in the paragraphs cannot in my view be cured by an order for particulars. Consequently, paragraphs 4, 5 and 6 shall be struck. The defendant will be granted leave however to amend its defence to plead a section 56 defence on proper facts. As for paragraph 7, the plaintiffs have failed to establish that the allegation is immaterial or irrelevant. It is at least arguable that it may impact on the issue of costs at trial. Consequently, paragraph 7 shall remain.
| (c) subparagraph 8(b) of the defence |
| [16] Counsel for the plaintiffs submits that paragraph 8(b) of the defence discloses no |
reasonable defence. He argues that the defendant is confusing the section 27 statutory novelty bar with the patentability of a medicine pursuant to subsection 39(1) (formerly ss. 41(1)). According to the plaintiffs, because the defendant has not pleaded the date of filing of application No. 607,198 (from which the 350 patent issued), the date must be assumed to be December 6, 1979, the filing date of record. Therefore, any section 27(1)(b) novelty bar is inapplicable after that date.
| [17] The defendant replies that paragraph 8(b) is linked with subparagraph (a), which |
has not been challenged. That paragraph asserts the "350 Patent was the result of an improper divisional application. Assuming that fact to be correct, subparagraph (b) then sets out the consequences which may flow from an improper divisional application in the context of subsection 41(1) of the Patent Act. The defendant submits that it cannot be said that it is "plain and obvious" that the allegation in subparagraph (b), when linked with subparagraph (a), cannot possibly succeed.
| [18] The plaintiffs acknowledged before me that subparagraph 8(b) is merely a |
duplication of the pleading at subparagraph 8 (a) which, as noted above, is not being challenged. It is not plain and obvious to me that the two subparagraphs, read together, fail to raise an arguable defence. It will therefore not be struck out.
| (d) subparagraphs 8(c) & (d) of the defence |
| [19] The plaintiffs attack subparagraphs 8(c) and (d) by relying on the decision of the |
Federal Court of Appeal in Merck & Co. v. Apotex Inc. (1995), 60 C.P.R. (3d) 356. The defendant"s allegation in both subparagraphs is that a claim to a composition cannot coexist with the claim to the compound itself. The plaintiffs submit that the two subparagraphs disclose no reasonable cause of action because the Court has conclusively determined that such a claim can in fact be maintained.
| [20] The defendant does not accept that the determination of the Federal Court of |
Appeal in relation to the propriety of advancing separate claims for non-interventive compositions is the final word on the subject. Counsel argues that prior decisions of the Supreme Court of Canada cast considerable doubt on the correctness of the propositions advanced in that case (see Sandoz Patents Ltd. v. Gilcross Ltd. et al, (1972), 8 C.P.R. (2d) 210 at pp. 211-212). Accordingly, it cannot be said that it is "plain and obvious" that the defence cannot possibly succeed.
| [21] In reply, counsel for the plaintiffs cites Rule 3 which reflects the basic philosophy |
of the Federal Court Rules, 1998, which is to promote the expeditious, cost effective and just resolution of cases. He submits that pleadings should not be bogged down with futile defences. I agree. The defence raised by the defendants at subparagraphs 8(c) and (d) cannot in my view succeed in light of the Federal Court of Appeal decision in Merck & Co. v. Apotex Inc., supra, from which leave to appeal to the Supreme Court of Canada was refused. At page 382 of the decision, after an extensive review of earlier cases, MacGuigan, J.A. concluded:
| At least after Shell Oil, it must be clear that the earlier cases do not stand for the proposition that a composition claim cannot survive with a compound claim, on the ground that it involves no inventive ingenuity. As long as there is no separate invention in the compositions, there is no rule that claims to compounds and claims to compositions including them cannot be combined in a single patent |
| [22] The above statement makes it clear that the defence raised in subparagraphs 8(c) |
and (d) is doomed to fail. It would be pointless to allow the defendant to re-argue a legal question which the Federal Court of Appeal has already conclusively determined. As a result, the two subparagraphs shall be struck.
| (e) subparagraphs 8(e) of the defence |
| [23] The plaintiffs submit that subparagraph 8(e), which alleges that the claim is |
overbroad, fails to disclose a reasonable defence as there is no requirement that the inventors either make or test every compound when compounds claimed are within reasonable predictability. Counsel for the plaintiffs cited the decision of the Court in Eli Lilly Canada Inc. v. Apotex Inc., (1998), 80 C.P.R. (3d) 80 where a similar pleading was struck because:
| It is not a ground of invalidity of a patent that the inventor has not tested and proved it in all its claimed applications. |
| [24] The defendant replies that a defence of "overbreadth" is well-established in the |
jurisprudence. The part of the allegation relating to making and testing compounds simply provides, according to the defendant the factual basis for the defence asserted.
| [25] The defendant has raised a number of allegations to attack the validity of the |
plaintiffs" claim. Overbreadth is a recognized defence and it is not plain and obvious, at this stage, that the defence cannot succeed. Consequently, subparagraph 8(e) shall not be struck.
| (f) subparagraphs 8(h) of the defence |
| [26] The plaintiffs attack subparagraph 8(h) on the basis that there is no requirement |
to put forward evidence of utility in the patent, nor is there a requirement to provide information in support of an assertion of utility. The defendant replies that the impugned paragraph states facts which support the allegations in subparagraphs (e), (f) and (g). The defendant adds that it is relevant to any claim of overbreadth, or lack of predictability, that there is no disclosure by the patentee of any testing methodology, or any confirmation that the compounds claimed will have the utility promised.
| [27] I agree with the defendant"s contention that the subparagraph cannot be |
considered in isolation, and could be understood as supporting the prior allegations with respect to the inutility of compounds falling within the scope of Claim 1 and the allegation that any such utility could not be reasonably predicted at the date of the patent. As a result, this subparagraph shall remain.
| (f) subparagraphs 8(i) of the defence |
| [28] The plaintiffs submit that subparagraph 8(i), which alleges delay in the issuance |
of the patent, discloses no reasonable defence. It is further submitted that there is no jurisprudence which makes relevant to a validity attack a factual assertion of willful delay to the prosecution of a Canadian patent application.
| [29] Counsel for the defendant counters that the novelty of a defence is not a bar to |
raising it in its pleading. He asserts that any petition for a patent cannot materially misrepresent any fact, and that a patentee owes a duty to act uberrima fides in the prosecution of any patent application. Evidence disclosing a deliberate course of conduct designed to delay the application in order to take advantage of forthcoming changes in the Patent Act, and thereby obtain a wider ambit of protection then would have been available had the prosecution proceeded in the ordinary course, can be seen to purposely deprive the public of that additional area now claimed to be the exclusive right of the patentee. The notional consideration given to the public in exchange for the grant of the patent would have been much greater than that actually received had the plaintiffs not wilfully delayed the prosecution. In such circumstances, the broader principles underlying patent law will have been violated, and could result in an order revoking the "350 Patent.
| [30] At this stage, the possibility of such a result is sufficient to maintain the |
allegation. The plaintiffs have failed to establish that this novel defence is doomed to failed.
| (f) Request for particulars |
| [31] The plaintiffs seek the following particulars: |
| (a) the specifics of the compounds "the alleged inventors did not or could not make or test" at paragraph 8(e), |
| (b) the specifics of the compounds contemplated at subparagraph 8(g), 8(g)(ii) and 8(g)(iii), |
(c) the identity of the alleged actual inventors at subparagraph 8(i); and
| (d) the specifics of the compounds which are not effective as ACE inhibitors and for which no sound basis for prediction as an ACE inhibitor could be made as alleged in subparagraph 8(k). |
| [32] Such particularization is necessary, according to the plaintiffs, to prepare a |
responsive reply and defence to counterclaim. The defendant responds that the Court should not entertain a motion for particulars following a lengthy delay between the pleading alleged to insufficiently supply them and the demand or motion for production.
| [33] The plaintiffs have failed to establish that the particulars requested are required |
for the purpose of pleading. Particulars required for pleading are not nearly as broad as they are for trial. Moreover, the fact that the plaintiffs have delayed in requesting particulars suggests to me that they are not necessary to delineate the issues between the parties. There is no affidavit evidence before me to explain on what basis the plaintiffs, which are obviously sophisticated companies, require further particulars to reply to the pleadings as they stand.
Conclusion
| [34] The plaintiffs" motion is allowed to the extent noted above. The defendant shall |
serve and file an amended statement of defence and counterclaim within 30 days of the date of this Order. A separate Order shall issue consistent with the Reasons above.
| [35] In light of the delay by the plaintiffs in bringing this motion and because success |
was divided, costs of this motion shall be to the defendant in the event of the cause.
"Roger R. Lafrenière"
Prothonotary
TORONTO, ONTARIO
October 8, 1999
FEDERAL COURT OF CANADA
Names of Counsel and Solicitors of Record
| COURT NO: T-2792-96 |
| STYLE OF CAUSE: MERCK & CO. INC., MERCK FROSST CANADA INC., ZENECA LIMITED and ZENECA PHARMA INC. |
| - and - |
| APOTEX INC. |
CONSIDERED AT TORONTO, ONTARIO PURSUANT TO RULE 369.
| REASONS FOR ORDER BY: LAFRENIÈRE, P. |
| DATED: FRIDAY, OCTOBER 8, 1999 |
WRITTEN SUBMISSIONS BY: Mr. Nelson Landry and
Ms. Judith Robinson
| For the Plaintiff, Merck & Co., Inc. and Merck Frosst Canada Inc. |
Gunars A. Gaikis and
Shonagh L. McVean
| For the Plaintiff, Zeneca Limited and Zeneca Pharma Inc. |
Mr. H. B. Radomski and
Mr. D. M. Scrimger
For the Defendant
SOLICITORS OF RECORD: Ogilvy Renault
Barristers & Solicitors
1981 McGill College Avenue
Suite 1100
Montreal, Quebec
H3C 3C1
| For the Plaintiff, Merck & Co., Inc. and Merck Frosst Canada Inc. |
Smart & Biggar
Barristers & Solicitors
438 University Avenue
Suite 1500
Toronto, Ontario
M5G 2K8
| For the Plaintiff, Zeneca Limited and Zeneca Pharma Inc. |
Goodman Phillips & Vineberg
Barristers & Solicitors
Suite 2400, Box 25
250 Yonge Street
Toronto, ON
M5B 2M6
For the Defendant
FEDERAL COURT OF CANADA
Date:19991008
Docket: T-2792-96
Between:
| MERCK & CO. INC., MERCK FROSST CANADA INC., ZENECA LIMITED and ZENECA PHARMA INC. |
Plaintiffs
(Defendants by Counterclaim)
- and -
| APOTEX INC. |
Defendant
(Plaintiff by Counterclaim)
| REASONS FOR ORDER |
AND ORDER