Canada: No Promise Of Reduced Side Effects Found - Patent Is Held To Be Valid (Intellectual Property Weekly Abstracts Bulletin: Week of February 10, 2014)

Last Updated: February 13 2014
Most Read Contributor in Canada, November 2017

Edited by Chantal Saunders and Beverley Moore and Adrian Howard


No promise of reduced side effects found - patent is held to be valid

Pfizer Canada Inc. v. Mylan Pharmaceuticals ULC, 2014 FC 38

Drug: celecoxib (Celebrex®)

This PM(NOC) application revolved around the construction of the promise of Canadian Patent No. 2,177,576. The question to be decided was whether the patent promised Celebrex® would be useful in significantly reducing harmful side effects in humans, as compared to other Non-Steroidal Anti-Inflammatory Drugs (NSAIDs). Whether the drug was new and useful in the treatment of inflammation was not in issue.

Mylan alleged the patent promised that, "[t]he compounds are useful as anti-inflammatory agents, such as for the treatment of arthritis, with the additional benefit of having significantly less harmful side effects." However Pfizer noted that the patent also stated that the selectivity of the drug, "may indicate an ability to reduce the incidents of common NSAID-induced side effects."

The Court held that the word "may" connotes a possibility, but such a promise of reduced side effects was not specifically claimed. The Court refused to otherwise infer a promise of reduced side effects. Since the invention was new and useful, and since no particular level of utility was claimed, a scintilla of utility would do. The application was granted.


Court Awards Double Party and Party Costs Following Appeal of Registrar's Decision

299614 Alberta Ltd. v. Fresh Hemp Foods Ltd., 2014 FC 26

This was decision on costs following an appeal of a decision by the Registrar to allow Fresh Hemp Foods Ltd.'s trade-mark application and to register the trade-mark. The appeal was dismissed (decision here, summarized here), and costs were awarded to Fresh Hemp Foods Ltd. ("FHF") following the parties' submissions.

FHF argued that it was entitled an increased award of costs for two reasons. First, pursuant to Rule 420 of the Federal Court Rules, FHF argued that it was entitled to its party and party costs to the date of its formal offer to settle and thereafter at double the rate since, according to FHF, its offer was "more advantageous to the Applicant than the Judgment rendered." Second, FHF argued that the application (brought under s. 56(1) of the Trade-marks Act, and not under s. 57) was "improper, vexatious and unnecessary" and warranted an award of double party and party costs throughout.

With respect to the offer, the Applicant submitted that it "would not have been prudent" for it to have accepted FHF's offer. The Court, however, held that this was an irrelevant consideration, and found that "the only condition under the Rules is whether the successful party obtained greater relief than the offer proposed", which it did in this case. On this basis, the Court awarded FHF its costs on a party and party basis to the date of the offer and at double that rate thereafter (for fees, not disbursements).

As to whether the application was "improper, vexatious and unnecessary", the Court found that it was neither improper nor vexatious. However, the Court found that the application appeared to be a "hail Mary pass" by bringing the application under s. 56(1) and not under s. 57. As such, the Court held that the application was unnecessary and ordered double party and party costs throughout. The final assessment of costs was left to the taxing officer, in the event that the parties could not agree on an amount.

It should also be noted that FHF sought costs for two counsel at the hearing, which was denied since the Court felt this was "not a complex matter". FHF also incurred costs for travel and accommodation for one night, which the Court found to be reasonable in the circumstances given the distance, the morning hearing time, and "weather issues prevalent in Canada in December".

ONCA Upholds Findings of Unfair Competition in Competitor's Brochure

Direct Energy Marketing Limited v. National Energy Corporation, 2014 ONCA 105

This was an appeal by National Energy Corporation ("NEC") of the application judge's findings related to an NEC brochure that contained a number of statements about the products and services offered by Direct Energy. The appeal raised essentially three issues related to s. 7(a) and s. 22(1) of the Trade-marks Act, s. 52(1) of the Competition Act, and the damages flowing as a result of the breach of those sections.

First, the Court of Appeal was satisfied that the judge's findings with respect to s. 7(a) and s. 22(1) of the Trade-marks Act were "warranted on the record before him and fully supported his conclusion with respect to the breach of those provisions." The second issue related to the judge's finding that Direct Energy had proved damages flowing from the breach. While NEC argued that Direct Energy had produced no evidence to support the assertion that the misrepresentations in NEC's brochure caused damages, the Court of Appeal found that Direct Energy had filed sufficient affidavit evidence to this effect, and noted that it was not challenged on cross-examination. It was also noted by the Court of Appeal that there was evidence showing an "unusually large number of cancellations of hot water heater contracts" during the relevant period.

The third issue on appeal related to s. 52(1) of the Competition Act. The Court of Appeal clarified that s. 52(1), unlike s. 7 of the Trade-marks Act, requires that the misrepresentation be made with knowledge of or recklessness as to its falsity. While the application judge did not specifically address the added mental component of s. 52(1), the Court of Appeal was satisfied that the finding that the brochure was "directed at misleading consumers" implicitly amounted to a finding that the misrepresentations were made knowingly or recklessly.

The Court of Appeal dismissed NEC's appeal and costs to Direct Energy were agreed at $15,000.

Two months' incarceration for selling counterfeit goods out of a car

R.v. Strowbridge, 2014 NLCA 4

We had previously reported that Mr. Strowbridge had successfully applied for Judicial Interim Release pending his appeal, including a conviction with a six month consecutive prison term for copyright and trade-mark infringements. On appeal, the six month prison term was considered disproportionally long for the gravity of the offence and his level of moral blameworthiness.

The Newfoundland and Labrador appellate court provided the facts behind the offence. Mr. Strowbridge was observed selling ball caps, belt buckles and jerseys bearing counterfeit insignia of sports teams, counterfeit razor blades and counterfeit hair styling flatirons from a vehicle sitting at an overpass. The items were valued at $500. Mr. Strowbridge was also serving a conditional sentence at the time of his arrest.

The Court noted that there were no reported sentencing decisions for the violations of trademark and copyright offences at issue. The original sentence and fine were quashed, and he was ultimately sentenced to two months' incarceration for the trademark and copyright offences to be served consecutively to his sentence for fraud and breach of probation.

Other Industry News

On January 28, 2014, Health Canada announced that the Harper Government has begun a nation-wide Consultation on "ways to improve nutrition information on food labels". The Consultation will focus on parents and consumers, and will include round table discussions in several Canadian cities.

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