Digests

Apotex Inc. v. Merck & Co., Inc.

T-294-96

2002 FCT 626, McKeown J.

31/5/02

24 pp.

Motion to settle terms of summary judgment granted in favour of defendant, holding Apotex infringed Merck's patent--Summary judgment granted based on doctrine of res judicata or issue estoppel--Case involving identical parties, issues, almost identical facts to previous case decided by MacKay J. (Merck & Co. v. Apotex Inc. (1994), 59 C.P.R. (3d) 133 (F.C.T.D.)), Federal Court of Appeal ([1995] 2 F.C. 723)--Only difference that infringing enalapril maleate acquired in May, October 1994 whereas in previous case acquired in March 1993--Not significant as acquired after compulsory licence extinguished by statute in both cases--(1) Main issue whether factual issues ought to be determined by reference or proceed to full trial--According to Ontario Court of Appeal cases, summary judgment motions having narrow scope--But full trial on remedies not required in this case--Federal Court Rule on summary judgment (r. 216) broader than Ontario rule--Under Ontario Rule 20, Court cannot make any findings of fact that may have been in issue between parties, can only decide questions of law--Case law cited by Apotex relating to test for summary judgment on issue of liability distinguished as in this case test already met on liability--Only question that of remedy--Reference in this case governed not only by summary judgment rules, but also by rules relating to references (rr. 153(1), 216(2))-- Specifically set out procedure for ordering reference after summary judgment order--Ontario case law not applicable to order for reference under these provisions--Policy reasons supporting this conclusion--Policy behind doctrine of res judicata to provide for finality for litigation, prevent unnecessary expense, delay and abuse of Court's process-- Such policy frustrated if party could bring action on essentially same facts as previous action, obtain judgment on liability, still be required to submit to expense, delay of trial to determine remedies--General interpretation provision also supporting this conclusion--R. 3 requiring interpretation, application of Rules that will secure just, most expeditious, least expensive determination of every proceeding on merits--Requiring parties to now submit to further delays, expense of full trial contrary to spirit, letter of r. 3--Even if Ontario case law applicable, no genuine issue for trial--Evidence more than sufficient to find deliberate, flagrant breach of injunction warranting award of punitive damages--Abuse of Court's time, resources if now required to hear evidence, rule on identical issue of delay in patent prosecution--(2) Patent Act, ss. 55, 57 conferring jurisdiction to award either damages, accounting of profits--Such relief ordinarily awarded unless circumstances warranting withholding it from successful requesting plaintiff--Merck entitled to accounting of profits, entitled to elect after further disclosure, discovery of Apotex--Like any equitable remedy, accounting of profits entirely within Court's discretion--No significant difference between this case, previous decision which awarded this exact order--Merck not disentitling itself to equitable relief by its conduct--Delay in prosecution argument already determined to be unsubstantiated--Any delay satisfactorily explained--Court already holding patent valid, and Apotex cannot now attempt to relitigate issue as one going to remedies--(3) Punitive damages may be awarded in patent infringement case where plaintiff claiming damages or account of profits--Awarded where defendant deliberately, flagrantly, callously disregarding interlocutory injunction--Evidence clearly disclosing Apotex knowing about injunction, knowingly breached injunction, concealed from Court and from Merck post-trial acquisitions of enalapril--Furthermore, Apotex never seeking judicial direction as to appropriateness of conduct--Appropriate in this case to hold Merck entitled to punitive damages, with assessment of quantum, if any, to be determined on reference subsequent to determination of general damages or accounting of profits--Court must assess general damages before assessing exemplary damages in order to determine whether additional award by way of punitive damages required to effectively deter appellant, others from similar outrageous conduct: Lubrizol Corp. v. Imperial Oil Ltd., [1996] 3 F.C. 40 (C.A.)--Principle not infringed if Court determining at this stage that Apotex's conduct deserving of punishment, such that award of punitive damages may be required--Then at reference, after other damages assessed, could determine if sufficient to punish, or if additional award needed--Although not full trial, Court does have complete factual record on which could make finding of entitlement to punitive damages--Apotex's conduct demonstrated callous disregard for injunction warranting punitive damages--(4) On issue of discovery, Merck ought not be required to submit to discovery unless electing damages--Regard had to r. 3, considerations of time, efficiency--Unless Merck electing damages, any information relevant to remedy of accounting of profits wholly within Apotex's knowledge, possession--As unlikely Merck having information relevant to issue, would cause unnecessary expense, delay were they to be discovered --R. 230 permitting Court to relieve party from production for inspection of any document having regard to issues, whether unduly onerous to require person to produce document--As Merck may elect accounting of profits, makes little sense to require Merck to be discovered prior to election--Federal Court Rules, 1998, SOR/98-106, rr. 3, 153, 216, 230--Rules of Civil Procedure, R.R.O. 1990, Reg. 194, R. 20--Patent Act, R.S.C., 1985, c. P-4, ss. 55 (as am. by S.C. 1993, c. 15, s. 48), 57.