Eli Lilly and Co. v. Novopharm Ltd.
T-2432-95
Reed J.
25/4/97
72 pp.
Action for injunctions to prevent defendants from using capsules of same size, shape, colour as those used by plaintiffs for fluoxetine hydrochloride ("Prozac") on ground passing-off of wares contrary to Trade-marks Act, s. 7(b)-Flouxetine hydrochloride used to treat depression, obsessive-compulsive behaviour such as bulimia, autism-Lilly U.S. held product-by-process patent for fluoxetine-Patent expired March 20, 1996-Lilly Canada only supplier to Canadian market between January 1989 and March 20, 1996-January 1991 agreement giving Lilly Canada right to make, use, distribute, sell Lilly products, and to use, in relation thereto certain trade-marks, brand name, house marks belonging to Lilly U.S.-In anticipation of expiry of patent Lilly Canada entering into agreement with PMS on June 30, 1995 licensing PMS to distribute, sell generic version of fluoxetine-PMS acknowledging product appearance trade-marks of Lilly Canada-January 1991 agreement amended in 1995 to confirm Lilly Canada always licensed by Lilly U.S. to use product appearance-November 10, 1995 amendment to June 30, 1995 agreement granted to PMS right to use product appearance-Prior to Ciba-Geigy Canada Ltd. v. Apotex Inc., [1992] 3 S.C.R. 120, similarity in appearance of prescription medicines not giving rise to passing-off action as pharmacists, dentists, physicians (customers for products) neither choosing products by appearance nor confused by similarity of appearance-Ciba-Geigy holding also relevant to consider ultimate consumer, patient, when deciding whether passing-off occurred-Physician's choice in prescribing particular drug not made by reference to appearance-While pharmacists not normally stocking brand of drug by reference to appearance, PMS fluoxetine exception-As long as only generic brand having same size, shape, colour as Prozac, pharmacists stocking PMS product because meaning fewer explanations to customers-Different coloured capsule leading customers to question whether correct drug prescribed-Normally customer not seeing size, shape, colour of capsules until after purchase-No difference in quality between defendants' generic fluoxetine products and Prozac or PMS-fluoxetine-Appearance of medication can affect patient's belief as to effectiveness, thus influencing effectiveness-Neither two-colour capsule nor colours chosen for Prozac inherently distinctive-Defendants choosing to copy innovator's capsule appearance because appearance associated with type, dosage form of drug-Denying intention to pass products off as plaintiffs'-Body ends, size in some cases, printing on defendants' capsule differing from plaintiffs'-In passing-off case necessary to consider potential as well as actual customers-Identification of potential customers difficult-Past, present Prozac users only persons exposed to appearance of capsule-Little association between capsule colours and source, Prozac name and actual colours of capsule, capsule colours green and pale yellow and Prozac name-Public policy considerations: patients having right to know brand of drug receiving and if different brands coming in different capsule colours consumers would have ready means of identifying them, versus safety role of having same drugs, various dosage forms thereof produced in same capsule size, shape, colour thus enabling patient, health care professionals to readily identify possible dispensing errors and enabling patients, particularly elderly, to distinguish between medications-Action dismissed-Accepting expert's evidence in affidavit form not giving it any more weight than if presented orally-Merely procedural mechanism to shorten trial-Evidence still evaluated by usual standards, including demeanour under crossexamination-Canada Evidence Act, s. 7 allowing only five witnesses to give opinion evidence on either side-Interpreted as referring to expert opinion evidence only and as limiting evidence to five witnesses per subjectmatter or factual issue in case, not five witnesses in total-Not dealing with separate actions being heard concurrently; no cases dealing with meaning of "side"; treating "side" as synonymous with party leading to unreasonable result-Such matters should be dealt with when application to set cases down for concurrent hearing made-Plaintiffs ordered to provide more information by way of discovery to defendants concerning case required to meet-Concerning objection as case management order denying such disclosure, Trial Judge may become aware of circumstances, information not always available to case management judge-Litigation operating best as dispute resolution process when surprise at trial kept to minimum-Trade-marks Act, s. 50 providing if entity licensed then use of trade-mark by that entity deemed always to have had same effect as such use by owner-If Lilly Canada licensed user of capsule appearance and capsule appearance trade-mark, then use enuring to benefit of Lilly U.S.-1991 agreement not granting to Lilly Canada right to use capsule appearance as trade-mark, but authorizing access to information needed to make capsules-In light of provision agreement constituting definitive agreement on subject-matter, precluding modification, amendment except by written document, no scope for oral agreement regarding use of capsule appearance as trade-mark outside terms of written agreement-Right to use capsule appearance as trade-mark not mentioned in agreement-At time of signing (prior to Ciba-Geigy) likely not thinking possible for capsule appearance to be trade-mark-Lilly U.S. controlling Lilly Canada's use of capsule appearance-Not meaning direction given to use capsule appearance as trade-mark-Pleadings not asserting reliance on Lilly Canada's unlicensed use as basis for rights accruing to Lilly U.S.-Submission only raised at last moment in argument-S. 50(1) read in light of pre-existing registered user provisions replaced-Curing situation in which licence existing but not registered-Not deeming use prior to granting of licence to be use enuring to benefit of owner-Use of capsule appearance in association with two different trade source designations, by definition, creating lack of distinctiveness-On this fact alone plaintiffs' claim must fail-S. 7(b) prohibiting directing public attention to wares in such way as to cause confusion with wares of another-To succeed in passing-off action plaintiffs must prove misrepresentation by defendants to prospective customers or ultimate consumers-Appearance of defendants' capsules not leading customer to request defendants' products rather than those of plaintiffs-Capsule appearance not used in market place as identifier by which consumer choosing one brand of fluoxetine over another-Defendants choosing to use same capsule colours as plaintiffs to identify medicine as therapeutically equivalent to plaintiffs' product, not to represent to public products are plaintiffs-Misrepresentation can exist without intention to misrepresent, but no intention to misrepresent herein-Capsule appearance not playing such role-In passingoff action plaintiff must prove goodwill in trade-mark or get-up-Goodwill arising from fact trade-mark associated in mind of purchasing public with plaintiffs' goods or with one trade source-Plaintiffs not proving capsule appearance acquiring requisite reputation in market place as distinguishing feature of product-Must still demonstrate likelihood of confusion arising from defendants' use of capsule appearance similar to that used by plaintiffs-Must be some evidence to support finding of likelihood of confusion-No evidence of actual confusion-Plaintiffs not proving on balance of probabilities defendants' sale of fluoxetine in capsules having similar appearance to those of plaintiffs would result in any significant likelihood of confusion-Cases cited from other jurisdictions dealing with appearance of prescription medicines distinguished as prescribing, dispensing, marketing practices different-Trade-marks Act, R.S.C., 1985, c. T-13, ss. 7(b), 50 (as am. by S.C. 1993, c. 15, s. 69)-Canada Evidence Act, R.S.C., 1985, c. C-5, s. 7.