Ontario Court of Appeal Conclusively Dismisses
Generic's Unjust Enrichment Arguments in
Section 8 Case Apotex has brought a case against Lilly pursuant to s. 8 of the
Patented Medicines (Notice ofCompliance)
Regulations (the NOC Regulations). As part of the
case, Apotex seeks damages pursuant to s. 8, under the Statute
of Monopolies (U.K.), the Ontario Statute of
Monopolies, and the Trade-Marks Act, as well
as a disgorgement of Lilly's profits due to alleged unjust
enrichment. This case considered an appeal of Lilly's motion to
dismiss the unjust enrichment claim. Apotex argued that the unjust enrichment claim was different
than that previously considered by the Federal Court of Appeal, as
this claim alleged that due to the finding of invalidity with
respect to Lilly's patent, and allegations of
misrepresentation, the NOC Regulations could not be relied
upon as a valid juristic reason for Lilly to be immune from an
unjust enrichment claim. The Ontario Court of Appeal considered the previous
jurisprudence relating to the NOC Regulations constituting
a complete code, and a juristic reason for precluding an unjust
enrichment claim in the context of Apotex' arguments. However,
the Court decided the issue based on the lack of
"corresponding deprivation" to Apotex. The Court held
that Apotex was never deprived of the portion of Lilly's
revenues represented by its profits, as Apotex would never have
earned those profits. The purpose of the doctrine is to reverse
unjust transfers of wealth, which did not occur in this case.
Furthermore, the Court held that Apotex had not properly plead the
elements required for disgorgement of "profits of
wrongdoing", and even if it had, this is not a case where such
an extraordinary remedy is available. Apotex was asking the Court
to designate it as the de facto beneficiary of Lilly's
profits, but it is not the sole party with a legitimate right to
deter the underlying wrong. The Court held that s. 8 of the NOC Regulations can
make a generic company whole. Furthermore, a fundamental principle
of tort law is that the wronged person is compensated for the full
amount of loss, but no more. Thus, Apotex' appeal was
dismissed. Allegations of Obviousness of Three Patents Found
Justified In a proceeding pursuant to the Patented Medicines (Notice
of Compliance) Regulations, the Court was asked to consider
three patents. Apotex alleged the patents were invalid on a number
of grounds, including anticipation, obviousness, double-patenting,
lack of utility, sufficiency and overbreadth. The Court noted that Apotex tendered sufficient evidence to put
the issues into play and therefore Takeda bears the burden. The
Court found that the allegations of obviousness with respect to the
three patents were justified, finding that the inventive concept
and the relevant art, taken as a whole, were co-extensive. As a
result, there was no gap to bridge. The Court then also noted that
even if there had been gaps between the prior art and the inventive
concepts of each of the three patents, no inventive steps would
have been necessary to bridge the gap. Takeda's application was
dismissed with costs. Court of Appeal Raises Issues of construction and
medical treatment that should be considered by a Higher Court in
Future Cases Both Bayer and Cobalt appealed from the Court's judgment.
Both appeals were addressed by the Court of Appeal in this
decision. The Court of Appeal began with Cobalt's appeal and noted
that the construction of the patent is to be reviewed on the basis
of correctness. However, the Court of Appeal offered "certain
observations for the Supreme Court of Canada to consider in a
future case" relating to the standard. In particular, the
Court of Appeal concluded that a correctness review may not be
required for consistency and certainty in the interpretation of
patents based on the doctrine of comity. The Court of Appeal noted
that interpretation of the specification may be done on the basis
of palpable and overriding error when done with significant
reliance on expert testimony. The Court of Appeal dismissed Cobalt's appeal relating to
construction and non-infringement of one of the patents. The Court
of Appeal held that, in terms of obviousness, Cobalt was inviting
the Court of Appeal to re-weigh the evidence that was reviewed by
the Court, which is not the standard of review. The Court of Appeal
refused the appeal relating to lack of sound prediction on the
basis that Cobalt changed its submissions from what was set out in
the Notice of Allegation. The Court of Appeal was required to
consider sufficiency and overbreadth because the Court found it was
not necessary to consider these allegations as a result of its
construction. Given that the Court of Appeal applied a different
construction, these allegations were considered and rejected by the
Court of Appeal. With respect to Bayer's appeal relating to a different
patent, the Court of Appeal denied the grounds of appeal relating
to construction and found no reviewable error by the Court in
finding the allegation of non- infringement was justified. In terms
of the method of medical treatment allegations, the Court of Appeal
noted that consideration of this allegation was not necessary
because of the finding on non-infringement, but wrote that the
current law, whereby methods of medical treatment are not
patentable, should be fully considered by the Court of Appeal or
the Supreme Court of Canada. Issues of Infringement of Industrial Design and Validity
of Patents Remitted to Court This is an appeal from a Judgment of the Court, dismissing the
action, finding no infringement, and validity of one of the three
patents. The Court of Appeal allowed the appeal, in part, by Zero
Spill. At issue were two industrial designs. Zero Spill is a licensee
of one Design, which they alleged was infringed and the Respondents
own the second Design, which Zero Spill seeks to invalidate. The
Court of Appeal remitted the issue of infringement back to the
Court on the basis that the Court erred in respect of requiring
Zero Spill to lead evidence pursuant paragraph 5.1(a) of the
Industrial Design Act. The Court of Appeal found that the
Court should have determined the validity of the second design but
because of the expiry of the Design in the period between the
Court's judgment and the hearing of the appeal, the validity is
now moot and the issue was not remitted to the Court. Also at issue were infringement and validity of patents. The
Court of Appeal considered the issue of construction raised by Zero
Spill in respect of one of the patents, and rejected this ground on
the basis that it must presume that all of the record was reviewed
by the Court. The Court is entitled to prefer certain evidence and
that can only be set aside on the basis of palpable and overriding
error. The Court of Appeal also found that Zero Spill did not
establish palpable and overriding error with respect to
infringement. With respect to the second patent, the Court of
Appeal found no errors in the construction of the patent and
therefore dismissed Zero Spill's appeal on the issue of
infringement. However, the Court of Appeal found that the
Court's approach to anticipation and obviousness was incorrect,
and these issues were remitted to the Court for determination for
two patents. Compliance with Order in the Absence of Stay Renders
Appeal of Order Moot The Prothonotary ordered the production of certain documents,
and the Court dismissed the appeal of this Order as moot. This is a
further appeal. The appellants appealed the Prothonotary's Order but did not
seek to stay the order and indeed, produced documents to the
respondents. The Court held that the appeal was moot on the basis
that the Order had been substantially complied with, and refused to
exercise the Court's jurisdiction to hear the appeal
notwithstanding this compliance. The Court of Appeal found no
reviewable error in this regard. Interlocutory Injunction Against Use of OMEGARED Upheld
on Appeal The Federal Court of Appeal has upheld an interlocutory
injunction awarded in a trademark proceeding (2015 FC 215,
unreported), with a small variance to provide 30 days to comply,
rather than forthwith. The injunction prohibits Jamieson from using
the word OMEGARED and mandates the recall of products and other
materials that would offend the terms of the prohibition. Reckitt owns and licences the mark MEGARED for supplements
containing omega-3 fatty acids. Jamieson now markets omega-3 fatty
acid products under the name OMEGARED, following a rebranding in
January 2013 when the products were called SUPER KRILL. The Appeal Court summarized the Federal Court decision. All the
elements of the tripartite test from RJR-McDonald v. Canada (Attorney
General), [1994] 1. S.C.R. 311 were found to be
present: Although the Court of Appeal found that the motions Judge delved
too far into the merits of the case, this was not fatal to the
decision. On balance, the decision was upheld and only the
procedural matter of its implementation was varied. Refusal to Register Mark Upheld – No Evidence of
First Use Was Adduced By the Applicant The applicant appealed the refusal to register HOME TEAM &
DESIGN in association with sales and installation of exterior
residential and commercial products, namely, windows, doors, patio
doors, storm doors, eavestroughs, siding, garage doors, awnings,
sunrooms, screen rooms, skylights, decks and railings. The respondent opposed, and argued that the mark had not been
used in conjunction with the services since the claimed date of
first use, or of the filing date. The applicant had not filed any
evidence in support of the registration. The respondent had
provided web searches dating back to 2001. No error was found in the registrar's decision, as the
Federal Court held it was reasonable and supported by fact and law.
The appeal was dismissed. Opposition Board's Decision Allowing an Application
for a Colour on Packaging Upheld a Second Time on Appeal
Rothmans appeals an earlier order (2014 FC 300) upholding the rejection of its
opposition to two trademark applications for an ORANGE PACKAGE
DESIGN in association with manufactured products, namely
cigarettes. On appeal, it was made clear that Rothmans was not arguing the
registrability of the marks had they been used as described, rather
they argued that the applications are not representative of the
marks as used. However, this was held to be a new argument on
appeal, and so it was not unreasonable for the Board to not
consider them. Despite all the arguments made, the Board's
decision was upheld. Health Canada has published a
Quality of Natural Health Products Guide. 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.
Patent Decisions
Apotex Inc. v. Eli Lily and Company, 2015
ONCA 305
Drug: atomoxetine
Takeda Canada Inc. v. Canada
(Health), 2015 FC 570
Drug: OMNARIS®
Cobalt Pharmaceuticals Company v. Bayer
Inc., 2015 FCA 116
Drug: YAZ®
Zero Spill Systems (Int'l) Inc. v.
Heide, 2015 FCA 115
Sherman v. Pfizer Canada Inc., 2015 FCA
107Trademark Decisions
Jamieson Laboratories Ltd. v. Reckitt
Benckiser LLC, 2015 FCA 104
1104559 Ontario Ltd. v. Home Hardware Stores
Limited, 2015 FC 566
Rothmans, Benson & Hedges, Inc. v. Imperial Tobacco
Products Limited, 2015 FCA 111Industry News
ARTICLE
21 May 2015
Ontario Court Of Appeal Conclusively Dismisses Generic's Unjust Enrichment Arguments In Section 8 Case (Intellectual Property Weekly Abstracts Bulletin – Week Of May 18)
Apotex has brought a case against Lilly pursuant to s. 8 of the Patented Medicines (Notice ofCompliance) Regulations (the NOC Regulations).