Canada: In-House Counsel Properly Disqualified; But NOA Not Invalidated As A Result (Intellectual Property Weekly Abstracts Bulletin - 3 March 2014)

Last Updated: March 6 2014
Most Read Contributor in Canada, September 2016

Edited by Chantal Saunders and Beverley Moore and Adrian Howard

NOC Proceedings

In-house Counsel Properly Disqualified; but NOA not Invalidated as a Result

Valeant Canada LP/Valeant Canada S.E.C. v. Canada (Health), 2014 FCA 50

This was an appeal by Valeant Canada LP/Valeant Canada S.E.C. and Valeant International Bermuda (collectively "Valeant") and cross-appeal by Cobalt Pharmaceuticals Company ("Cobalt") from an order of the Federal Court stemming from a motion for disqualification brought by Valeant within an application for prohibition it brought under the NOC Regulations. The Federal Court granted Valeant's motion disqualifying Cobalt's in-house lawyer from any further involvement in the application on the ground that he could be presumed to have Valeant's confidential information. On appeal, Valeant sought more than the disqualification: Valeant asked the Court to declare Cobalt's NOA – prepared by the law firm Deeth Williams Wall LLP ("Deeth") – invalid. The Federal Court refused to grant Valeant any further relief beyond the disqualification.

Soon after Valeant received Cobalt's NOA comparing to Valeant's TIAZAC® XC, Valeant learned that Deeth purported to represent Cobalt and that it was involved in preparing the NOA. Deeth was the law firm of Valeant's predecessor, Biovail. Deeth had previously represented Biovail in numerous proceedings in the Federal Court relating to the same medicinal ingredient that is the subject-matter of this NOA. While those proceedings were subject to confidentiality orders, Valeant believed that Deeth had other confidential information about its affairs and business strategies, and continued to possess confidential communications covered by solicitor-client and litigation privilege.

Valeant notified Deeth of its objection, and soon after receiving the objection, Deeth resigned as Cobalt's counsel. Deeth undertook not to act further for Cobalt or to assist in any way in the application. However, Valeant had two further issues: (1) Cobalt employed an in-house lawyer who was a former student-at-law and, later, lawyer at Deeth; and (2) Cobalt's NOA was a direct product of Deeth's improper use of confidential information and, accordingly, the NOA must be declared invalid.

Cobalt cross-appealed on the basis that the Federal Court's decision should be set aside because it erred in principle. In particular, Cobalt argued that the Federal Court misunderstood and misapplied the test for disqualification. The Court of Appeal agreed that the Federal Court did not apply the test "exactly as set out by the Supreme Court", but found that the result was nevertheless correct.

With respect to Valeant's submission that the NOA should have been declared invalid, the Court of Appeal held that it was not persuaded on the record before it that the NOA was the product of the misuse of information and an improper conflict of interest. In particular, the Court of Appeal noted that there was simply not enough evidence on the record before it to show that Valeant's confidential information was either "used" or "misused".

Therefore, the Court of Appeal dismissed both Valeant's appeal and Cobalt's cross-appeal. In view of the divided success, no costs were awarded. Notably, however, the Court of Appeal commented that, subject to any limitation periods, "Valeant might pursue other steps to restrain or redress any misuse of confidential information."

NOC Application Dismissed: Overbreadth and Lack of Utility Related

Alcon Canada Inc. v. Cobalt Pharmaceuticals Company, 2014 FC 149
Drug: olopatadine

In a proceeding brought pursuant to the NOC Regulations, the Court made determinations with respect to obviousness, lack of utility and lack of sound prediction, and ambiguity and insufficiency.

The Court construed the claims in issue, and determined the inventive concept of the claims as well as the promise of the patent. The Court found that the allegation of obviousness was not justified. However, the experiments in the patent did not demonstrate the promised utility, nor was the utility soundly predicted. The Court considered the promise of each asserted claim in performing this analysis. After making these determinations, the Court made additional comments on the issue of utility. In particular, the Court noted that the findings in this regard were limited to the allegations made by Cobalt in its Notice of Allegations, but there were other aspects of the promise that were not demonstrated or soundly predicated and that could have been raised by Cobalt.

The Court found the allegation of overbreadth was justified, stating that "this allegation of overbreadth is simply another way of articulating the utility argument, but from the perspective of claims drafting rather than from the perspective of the demonstration or sound prediction of utility. As I have already found above that the 924 Patent fails to meet the promises advanced by the asserted claims, it follows that the claims are drafted more broadly than is warranted; they contain promises that are broader than what can be demonstrated or soundly predicted to be useful by the disclosure in the patent." Finally, the Court concluded that the allegation relating to ambiguity and insufficiency was not justified.


Product specificity requirement trumps patent construction for listing

Eli Lilly Canada Inc. v. Canada (Attorney General), 2014 FC 152

Lilly sought to list Canadian Patent No. 2,379,329 on the patent register for their product TRIFEXIS®. The Minister refused, stating that the patent did not contain claims for the formulation combining both medicinal ingredients (spinosad and milbemycin oxime). Rather, the Minister was of the view that the patent claimed a formulation comprising only one of the two medicinal ingredients present in Trifexis, namely spinosad, and that, referencing the general family of milbemycins in the definition of oral formulation provided in the disclosure of the patent was insufficient to meet the product specificity requirement.

The Court agreed with Lilly's construction of the patent, finding that the claims are not directed only to a formulation including spinosad as the only active ingredient, but also to formulations that include other active ingredients such as, but not restricted to, milbemycin oxime.

However, Lilly was not successful in the result once the Court applied the product specificity jurisprudence to this case. The Court stated that for a formulation claim, all of the medicinal ingredients included in the drug product as authorized must be included in the patent claims. Finding that there was no perfect match between what is claimed and what is authorized, the patent did not meet the product specificity requirements and thus was not eligible for listing.

Copyright Decisions

Statutory and Punitive Damages Awarded for Copyright Infringement in a case of "Outrageous and Highly Reprehensible" Conduct

Trout Point Lodge Ltd. v. Handshoe, 2014 NSSC 62

This was an application for an assessment of damages pursuant to the Nova Scotia Civil Procedure Rules. The litigation between these parties arose out of Handshoe's "defamatory actions conducted through the Internet", which were made in relation to a news story that was published in a Louisiana newspaper (para. 6). The first proceeding between these parties (decision here) resulted in a default judgment against Handshoe, and an assessment of damages. The applicants did not realize any of those awards.

In addition to seeking (and obtaining) further damages for defamation, the applicants sought damages for copyright infringement in relation to four (4) photographs disseminated on the Internet by Handshoe. The applicants requested statutory damages instead of general damages. The Court noted that there was "ample evidence" that Handshoe disseminated the photographs for commercial purposes, namely blogging, and the Court found that Handshoe's use of the photographs was to destroy the business interests of the applicant and to enhance the credibility of Handshoe's blog.

The Court found that, (1) copyright infringement occurred between the time of the decision in the first proceeding and the start of this application, (2) that the photographs were the property of the applicants when used by Handshoe, (3) that Handshoe ignored the applicants' complaints, and (4) that Handshoe had offended the injunction that was issued in the first proceeding. As a result, the Court said this was a "case for generous statutory damages as well as punitive damages." The Court awarded $20,000 in statutory damages per infringement, as well as $100,000 in punitive damages.

While there was also a claim related to the tort of wrongful appropriation of personality, the Court declined to award damages in this regard since the Court believed that damages for copyright infringement adequately addressed Handshoe's conduct.

Oral assignment and no proof of joint authorship fatal to copyright claim

Atlantic Canada Regional Council of Carpenters, Millwrights, and Allied Workers v. Maritime Environmental Training Institute Ltd., 2014 NSSC 64

The applicants to this proceeding claimed that use and reproduction of a scaffolding training manual was infringing their copyright in the work. The predecessors of the applicants' union had retained a now forgotten UK company to prepare the manual in or around 1991. No written assignment was put into evidence, but they claimed an express oral agreement.

Ultimately this application was not successful. Since this was a commissioned work, it was found that it was necessary to put a written assignment from the UK company into evidence.

Furthermore, the Court held that the applicants failed to prove that the manual was a work of joint authorship, as the evidence did not establish the applicants' contribution to the work. In the absence of proof of ownership or joint authorship, the Court found that the application must fail.

Other Industry News

Practice notice: Experimental testing

The Federal Court has provided a new Notice to the Profession stating that in an action for infringement or validity of a patent, when a party intends to conduct experimental testing conducted for the purpose of litigation, it shall, no later than two months before the scheduled service of the expert report(s) in chief, advise the other parties as to:

  • the facts to be proven by such testing;
  • the nature of the experimental procedure to be performed;
  • when and where the adverse parties' counsel and representative(s) can attend to watch the experiment(s); and
  • when and in what format the data and test results from such experiment(s) will be shared with the adverse parties.

About BLG

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.