Digests

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

T-1169-01

2004 FC 1452, Aronovitch P.

20/10/04

23 pp.

Motion to strike defence and counterclaim of Merck & Co. Inc. and Merck Frosst Canada & Co. (Merck) in a Patented Medicines (Notice of Compliance) Regulations (NOC Regulations), s. 8 action for damages suffered by reason of 11-month delay in issuance of notice of compliance (NOC)-- In defence and counterclaim, Merck alleging Apotex (plaintiff) not entitled to damages under NOC Regulations, s. 8 since Apotex infringed Merck's Canadian Patent No. 1161380 (380 Patent) and would not have been able to market non-infringing lovastatin if NOC issued to Apotex earlier; also seeking set-off against damages claimed by Apotex in action--Merck previously obtained 380 Patent for marketing and sale of lovastatin tablets in Canada and filed patent list including 380 patent--Apotex delivered notice of allegation (NOA) alleging non-infringement of 380 Patent because would use non-infringing lovastatin made from non-infringing process--As result of Merck's NOC Regulations, s. 6 application, Minister prevented from issuing NOC to Apotex for lovastatin tablets until either dismissal of Merck's prohibition proceeding or expiration of 30-month statutory stay--After expiration of statutory stay, prohibition proceeding deemed dismissed on ground Court had lost jurisdiction--Allegation of non-infringement in prohibition proceeding never determined--Apotex only issued NOC at dismissal of prohibition proceeding, 11 months after Apo-Lovastatin approved under Food and Drug Regulations --Merck bringing patent infringement action against Apotex claiming damages for period commencing when Apotex issued NOC and ending at expiration of 380 Patent--With respect to motion to strike under Federal Court Rules, 1998 (Rules), r. 221(1)(a), (b), (c), (d), (f), Apotex arguing impugned paragraphs in Merck's defence and counterclaim disclosing no reasonable defence, immaterial, redundant, frivolous, vexatious, delaying fair trial of s. 8 action and abuse of process--Whether issues of pure law and statutory interpretation with respect to NOC Regulations, s. 8 action can be determined on motion to strike--Issues involved in s. 8 action contentious, complex--Case law cited for proposition that issues involving interpretation of NOC Regulations, s. 8 should be dealt with at trial binding precedents dictating motion to strike should be dismissed--Argument that defence and counterclaim disclosing no cause of action unfounded-- NOC Regulations, s. 8(5) making clear Court may consider "conduct" of parties and "all matters that are relevant"--Case law not foreclosing consideration of second person's infringement as "conduct" or "relevant matter" which Court may consider in assessing damages--Allegations of infringe-ment, absence of non-infringing process or product in period prior to issuance of NOC not hypothetical and may be proven at trial--Standard in striking pleading under Rules, s. 221(d), claim otherwise well-founded only defeated if party raising delay demonstrating prejudice not compensable by award of costs--Merck's substantive rights at issue, which delay not sufficient or appropriate to defeat--Duplication of proceedings not warranting dismissal of allegations of patent infringement as constituting abuse of process--Since Merck not commencing two actions claiming same relief, parties in s. 8 action not identical to parties in patent infringement action, actions relating to distinct periods of time, and parties seeking different remedies, no abuse of process proven--Two actions may be managed efficiently by procedural safeguards --Inconsistency between Merck's written submissions to Court at hearing of motion and scope and nature of defendant's pleadings constituting abuse of process-- Reference in submissions to period during which infringement occurred not supported by Merck's open-ended pleadings since pleadings not specifying period of alleged infringement --Apotex entitled to know case to be met in defendant's pleadings--Merck directed to particularize pleadings by stipulating period of alleged infringement that underlies declaration of infringement sought--Motion dismissed-- Patented Medicines (Notice of Compliance) Regulations, SOR/93-133, ss. 6 (as am. by SOR/98-166, s. 5; 99-379, s. 3), 8 (as am. by SOR/98-166, s. 8)--Food and Drug Regulations, C.R.C., c. 870--Federal Court Rules, 1998, SOR/98-106, r. 221(1)(a), (b), (c), (d), (f).