Canada: Motion For Interim Injunction Dismissed For Failing To Establish Irreparable Harm (Intellectual Property Weekly Abstracts Bulletin – Week Of April 11)

Last Updated: April 15 2016
Article by Beverley Moore, Chantal Saunders and Adrian J. Howard

Most Read Contributor in Canada, September 2016


Motion for Interim Injunction Dismissed for Failing to Establish Irreparable Harm

University of California v I-Med Pharma Inc, 2016 FC 350

TearLab brought a motion for an interim injunction, with the hearing for an interlocutory injunction being scheduled in late April or May. TearLab is the exclusive licensee under the patent in issue and markets the TearLab Osmolarity System (TearLab System). The Court noted that almost all of the users of the TearLab System rent the system and have a contract that can be cancelled at the end of the first year or on the anniversary of each year, thereby allowing users to return the system if a competitor entered the market. The Court also described the approval process and the need to convince clinicians to use the system, noting the costs of such efforts. I-Med Pharma began to offer for sale a system, available in March 2016, that TearLab alleges falls within the scope of the claims of the patent in issue. TearLab brought the motion for an interim injunction to prevent I-Med Pharma from launching its system before the motion for an interlocutory injunction could be heard.

For an interim injunction, the Court noted that it is necessary for the moving party to demonstrate that the need for an injunction is urgent. The Court also set out that the test to be met on the motion was established by the Supreme Court of Canada in RJR MacDonald, namely that there is a serious issue to be tried, that the moving party will suffer irreparable harm if the injunction is not granted, and that the balance of convenience favours the granting of an injunction . The Court concluded that TearLab did not establish the irreparable harm or balance of convenience elements of the test. In particular, the Court found that the evidence was not provided by affiants qualified to establish that the harm could not be compensated by damages. The Court stated: "It is entirely understandable that, given the context of this dispute, TearLab fears it will suffer an unquantifiable loss of market opportunity, loss of an industry opportunity and potential customer opportunity, lost sales, and loss of goodwill. However, these fears need objective support from someone with the expertise to say that they cannot be quantified in the event that the injunction is not granted. Without such evidence, the alleged harm remains speculative."

The Court described the TearLab evidence as being from corporate witnesses and witnesses who provided evidence that was unsupported or outside their respective areas of expertise. The Court preferred the evidence of I-Med Pharma's witness. The motion was dismissed and costs are to be addressed after the motion for an interlocutory injunction.

Patent held to not be infringed based on the construction of the claims

Shire Canada Inc v Apotex Inc, 2016 FC 382
Drug: amphetamine mixed salts XR

Apotex sent a NOA to Shire alleging its patent was invalid and will not be infringed by Apotex. The issues were narrowed for the hearing, where issues of non-infringement, overbreadth, ambiguity, insufficiency and lack of utility were argued, as well as an argument that the claims were not relevant under the PM(NOC) Regulations because Shire's product does not fall within the scope of the claims.

Following a lengthy discussion on claim construction the Court found that Apotex will not infringe the patent and did not address the remaining allegations. The patent was described as claiming an extended-release by a combination of coated (delayed release) and uncoated (immediate release) tablets. In contrast, Apotex's product was described as achieving its extended-release characteristics first by a mechanism of diffusion (while in the stomach) and later by a mechanism of diffusion and erosion (once the tablets have entered the intestines).

In its discussion regarding non-essential elements, the Court held that the SCC in Free World Trust likely did not intend for a patentee to establish that a claim element is not essential by succeeding on just one part of the Improver test. The Court held that the SCC likely intended that, in order for a patentee to establish that a claim element is non-essential, it must show both (1) that on a purposive construction of the words of the claim it was clearly not intended to be essential, and (2) that at the date of publication of the patent, the skilled addressees would have appreciated that a particular element could be substituted without affecting the working of the invention.

It can be noted that Apotex advocated that their witnesses should be preferred because they were blinded to the NOA and never told Apotex's legal position. Apotex argued that since claim construction should precede analysis of issues like patent infringement and validity, exposing experts to information about the allegedly infringing product or the relevant prior art could improperly taint their analysis on claim construction. Shire argued blinding of experts is not a requirement and there is no principle of law whereby testimony of blinded experts must be favoured. The Court found that blinding has not been raised to the level of a legal principle, and is merely persuasive. If the opinion is well-reasoned, there may be no reason for the Court to be concerned if the witness was blinded to certain facts, but a concern may arise where the expert's opinion seems tortured or less well-reasoned.

The Court further noted that blinding is no guarantee that the expert evidence is reliable. It would not be difficult to seek opinions from a number of experts, keeping them all blind to unnecessary information, then selecting the one expert who provides the opinion that the party sought.

Motion to Strike and for Particulars Denied; Elevated Costs Ordered for Breach of Settlement Privilege

Stryker Corporation v. Umano Medical Inc., 2016 FC 378

Umano brought a motion to strike portions of the Statement of Claim, and in the alternative for further and better particulars. The motion further requested documents pursuant to Rule 206. The Court denied the motion in its entirety.

The Court held that in order to succeed in a motion to strike, the moving party must demonstrate, beyond doubt, that the case cannot possibly succeed at trial. In this case, the Court held that the Defendants are told which physical characteristics infringe, and are thus capable of reviewing the claims. Furthermore, there was no reason to find the claim of inducement has no reasonable chance of success. In addition, while the Court has held that allegations of wilful and knowing infringement are alone insufficient to support a claim for punitive damages, where those allegations are sufficiently supported in the statement of claim, the punitive damages claim can be maintained, as it is not for the Court on a motion to strike to determine the chances of success.

With respect to particulars, the Court held that in order to be successful on such a motion, details are required as to what information is needed for pleading and why the party would be unable to instruct counsel without such information. In this case, the affidavit did not contain such information. With respect to the Rule 206 request, the Court held that the fact that there may be documents in existence which relate to the issues in the pleadings, does not transform these documents into documents referred to in the pleading.

The Plaintiffs requested solicitor client costs in the amount of $10,000 because the Defendants disclosed in their motion materials, an offer to settle with particulars. The Plaintiffs contended this was a breach of settlement privilege which undermined their position on the issue before the Court. The Court held that this was a breach of confidence. However, although it was of the utmost serious nature, it did not undermine the Plaintiff's position on the merits of the case or on the request for particulars. But, this sort of behaviour ought to be discouraged, as it is in the nature of improperly affecting the course of justice. Thus costs from the high end of Column IV of Tariff B were ordered, payable forthwith.


Witness' Evidence Given Less Weight because not Blinded to Patent or Issues; NOC Proceeding Dismissed

Allergan Inc. v. Apotex Inc., 2016 FC 344
Drug: gatifloxacin

Apotex sent a NOA in respect of a single patent, alleging obviousness and lack of utility. The Court held that allegation was justified.

In considering the evidence, the Court preferred the evidence of Apotex's expert witnesses. In particular, the Court held that greater weight is to be given to evidence on obviousness and patent construction from experts who have not seen the patent nor been apprised of the position of the litigants. The Court also held that Allergan's objections that Apotex's experts took the references cited in the NOA without doing their own search was without merit.

On the issue of obviousness, the Court agreed with Apotex's expert that a POSITA would have a fair and reasonable expectation that combining gatifloxacin with EDTA would produce an effective ophthalmic compound that would have the three advantages set out in the Patent. On the issue of utility, the Court agreed with Apotex's expert that those three advantages were promises. Despite several experiments being listed in the patent, utility was not held to be demonstrated as the claim at issue covered more compositions than those tested. Sound prediction was also held not to be established.


Interlocutory injunction orders removal of 15 segments from published movie

Vancouver Aquarium Marine Science Centre v Charbonneau, 2016 BCSC 625

The BC Supreme Court has restrained the defendants from publishing the original version of their video entitled "Vancouver Aquarium Uncovered", ordering that only a modified version with 15 segments removed may be published. Those segments are alleged to be subject to copyright protection or were used in breach of contract.

In ordering the removal, the Court held that the questions relating to fair dealing were a matter for trial. This included the issue of whether there was a commercial purpose for the film, the defences of criticism or review, or whether the film was within the category of research or education.


Special Circumstances Found to Refuse Expungement of Trademark for Non-Use

The One Group LLC v. Gouverneur Inc. 2016 FCA 109

The Trademarks Opposition Board refused to expunge the trademark registration STK (the Trademark) owned by The One Group LLC (One Group) for non-use pursuant to section 45 of the Trademarks Act. The Court noted that One Group operates a number of restaurants under the name STK, and registered the Trademark in association with bar services; restaurants. After the registration of the Trademark, One Group entered into a number of discussions with different hotel chains, unsuccessfully seeking to establish a restaurant location in hotels that were to be built. When notice was received pursuant to section 45, One Group stated that it was close to reaching an agreement and on this basis, the Registrar did not expunge the trademark, finding special circumstances. The Registrar set out the criteria to be met for a finding of special circumstances, namely the length of time during which the trademark has not been used, whether the reasons for non-use were beyond the owner's control, and whether the owner has a serious intention to shortly resume use of the trademark.

On appeal, the Court found that the standard of review was reasonableness. The Court found that the Registrar applied the correct principles of law but that the evidence did not support the Registrar's decision, allowed the appeal and ordered the Registrar to expunge the trademark.

The Court of Appeal also found that the Registrar applied the applicable case law, focusing on whether there were special circumstances explaining the non-use of the Trademark. The Court of Appeal noted that the Registrar has expertise with respect to trademarks and deference should be shown on findings of fact, especially regarding the discretion given to the Registrar in determining special circumstances. The Court of Appeal concluded that the evidence could support the Registrar's finding and thus allowed the appeal, confirming the Registrar's decision to maintain the Trademark.


Pfizer Canada Inc., et al. v. Teva Canada Limited (36772) — dismissed

The Supreme Court has dismissed Pfizer's leave to appeal in Pfizer Canada Inc., et al. v. Teva Canada Limited (36772). The Supreme Court has provided the following summary of the case:

The applicant Pfizer Canada Inc. is a pharmaceutical company authorized to sell sildenafil citrate tablets in Canada under the name VIAGRA®, and the other applicants are affiliated companies (collectively, "Pfizer"). The respondent Teva Canada Limited ("Teva") is a pharmaceutical company which was called Novopharm Limited before February 2010. In August 2010, Teva and ratiopharm Inc. ("ratiopharm"), along with a few other companies, amalgamated under s. 185 of the Canada Business Corporations Act, R.S.C. 1985, c. C-44. The amalgamated company continued as Teva.

In 2012, following the dismissal of an application by Pfizer for a prohibition order relating to Teva's generic version of VIAGRA®, Teva-Sildenafil (formerly Novo-Sildenafil), Teva brought an action against Pfizer for damages under s. 8 of the Patented Medicines (Notice of Compliance) Regulations, SOR/93-133, seeking to recover the losses it allegedly suffered from Teva-Sildenafil's delayed entry into the market. Pfizer brought a motion for summary judgment, on the basis that Teva's action was barred by an agreement between Pfizer and ratiopharm Inc., entered into before the amalgamation, settling proceedings related to ratiopharm's generic version of VIAGRA®, ratio-Sildenafil. Teva also brought a motion for summary judgment, alleging that use of the agreement to preclude the action was not a genuine issue for trial.

Apotex Inc., et al. v. Merck & Co. Inc. (36655) — dismissed   

The Supreme Court has dismissed Apotex's leave to appeal from Apotex Inc. v. Merck & Co., Inc., 2015 FCA 171. The Supreme Court has provided the following summary of the case:

The respondents (collectively, "Merck") own the product-by-process 380 patent for the anti-cholesterol drug lovastatin ("AFI-1 process"), which they sold in Canada under the trade name Mevacor. The patent was issued to Merck in 1984 and expired on January 31, 2001. In 1993, the applicants (collectively, "Apotex") applied to the Minister of Health for a notice of compliance that would enable it to market a generic version of lovastatin in Canada. Apotex alleged it would not infringe the patent because it would use a process to produce lovastatin that would not fall within the scope of the patent ("AFI-4 process"). A notice of compliance was issued to Apotex on March 27, 1997. Later that year, Merck commenced an action against Apotex alleging infringement of the 380 patent. After a lengthy trial, the patent was held to be valid and infringed by Apotex. The judge found that Merck was entitled to compensatory damages rather than an accounting of profits. Following the exhaustion of all rights of appeal relating to the liability phase, the judge found that Merck was entitled to a total damages award of $119,054,327, plus pre-judgment and post-judgment interest. The judge rejected the argument advanced by Apotex that the availability of non-infringing lovastatin should be taken into account in assessing damages. This decision was upheld on appeal.


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