Date: 20000626
Docket: A-204-98
CORAM: LÉTOURNEAU, J.A.
EVANS, J.A.
SHARLOW, J.A.
BETWEEN:
APOTEX INC.
Appellant
(Defendant)
- and -
ELI LILLY AND COMPANY and
ELI LILLY CANADA INC.
Respondents
(Plaintiffs)
Heard at Toronto, Ontario, on Monday, June 26, 2000
Judgment delivered from the Bench at Toronto, Ontario,
on Monday, June 26, 2000
REASONS FOR JUDGMENT OF THE COURT: LÉTOURNEAU J.A.
Date: 20000626
Docket: A-204-98
CORAM: LÉTOURNEAU J.A.
EVANS J.A.
SHARLOW J.A.
BETWEEN:
APOTEX INC.
Appellant
(Defendant)
- and -
ELI LILLY AND COMPANY and
ELI LILLY CANADA INC.
Respondents
(Plaintiffs)
REASONS FOR JUDGMENT OF THE COURT
(Delivered from the Bench at Toronto, Ontario
on Monday, June 26, 2000)
LÉTOURNEAU J.A.
| _. On February 20, 1998, Richard J., as he then was, struck a portion of subparagraph 10(a), subparagraph 10(l) and paragraph 11 of the appellant"s Statement of Defence and Counterclaim. |
| _. Subparagraph 10(a) alleged in part that the inventor did not and could not have made or tested all of the claimed compounds for the purposes named in the patent before the application for the patent was filed. |
| _. Subparagraph 10(l) alleged that the respondents failed in the prosecution of the patent to disclose to the Canadian Patent Office a particular piece of prior art relied upon by the appellant in relation to other alleged grounds of invalidity. |
| _. Paragraph 11 submitted that the respondents are estopped from asserting the patent in their patent infringement action. It was entirely dependent on subparagraph 10(l) and, therefore, followed the same fate as that subparagraph. |
| _. Pursuant to the order of Richard J., the appellant adopted two different courses of action to overcome the effect of the order. |
| _. With respect to subparagraph 10(a), it appealed the decision of Richard J. and this appeal has now been disposed of by way of dismissal in file A-124-98. However, as regards paragraph 11 and subparagraph 10(l), instead of appealing, it chose to amend its pleadings. Subparagraph 10(l) was split into two subparagraphs, i.e., 10(l) and 10(m). Paragraph 11 was reworded to reflect the splitting of subparagraph 10(l) and remained dependent on the new subparagraphs 10(l) and 10(m). The amendments were effected on March 6, 1998. |
| _. On March 11, 1998, the respondents moved to strike portions of the Amended Statement of Defence and Counterclaim, especially these new subparagraphs and paragraph 11. The Motions Judge granted the motion and struck them without providing reasons. |
| _. Before us, the respondents argued that the appellant"s right to amend its Statement of Defence and Counterclaim to add the amended pleadings expired when the appellant filed a Notice of Appeal in relation to the order of Richard J. They rely for their contention on the decision of the Supreme Court of Canada in Operation Dismantle v. The Queen, [1985] 1 S.C.R. 439, at p. 492. |
| _. We note that, at the time the decision in Operation Dismantle was rendered, former Rule 1104 governed amendments to proceedings during the pendency of an appeal and required leave of the Court. Rule 1104 has been replaced by new Rules 75 and 76 which have a different content. As a result, the authority of that decision will have to be revisited under the new Rules. Although the present case is governed by the old Rules, we believe its facts are distinguishable. The appellant has not appealed against that part of Richard J."s order which struck subparagraph 10(l ) and paragraph 11. There was thus no appeal pending of that part of the order when the amendments were made. Instead, as previously mentioned, the appellant has attempted to comply with the reasons for the order by amending its pleadings accordingly. We believe, on the authority of former Rule 421 which has remained the same and has now become Rule 200 of the Federal Court Rules, 1998 and which came into force some three weeks after the amendments were made, that this course of action was open to the appellant. The question is: has it been successful in its attempt so that the Motions Judge erred in striking their amended pleadings? |
| _. We are of the view that the new subparagraphs 10(l) and (m) raise the defence contained in subsection 53(1) of the Patent Act, R.S. 1985, c. P-4 (Act): |
53. (1) A patent is void if any material allegation in the petition of the applicant in respect of the patent is untrue, or if the specification and drawings contain more or less than is necessary for obtaining the end for which they purport to be made, and the omission or addition is wilfully made for the purpose of misleading.
53. (1) Le brevet est nul si la pétition du demandeur, relative à ce brevet, contient quelque allégation importante qui n"est pas conforme à la vérité, ou si le mémoire descriptif et les dessins contiennent plus ou moins qu"il n"est nécessaire pour démontrer ce qu"ils sont censés démontrer, et si l"omission ou l"addition est volontairement faite pour induire en erreur.
| (My emphasis) |
They are clearly different from previous subparagraph 10(l). They now allege that the untrue statements and wilful omissions which make the patent void were found respectively in the petition of the respondents and in the specification of the application. This is to be contrasted with the original subparagraph 10(l) which merely alleged misrepresentation in the prosecution before the Patent Office and which, as Richard J. ruled, gave rise to no recognized defence.
| _. The respondents rely upon the decision of this Court in Beloit Canada Ltd. v. Valmet Oy (1986), 8 C.P. R. (3d) 289, at page 301 (F.C.A.) to submit that subsection 53(1) of the Act "does not look to sins of omission". We hasten to add that this was a suggestion of the defendant in that case and not a conclusion of the Court. On the contrary, the Court went on to analyse whether the alleged misrepresentations resulting both from statements and omissions related to material facts. Indeed, a material allegation in a petition may be untrue because of an omission to disclose relevant material facts. Furthermore, subsection 53(1) expressly sanctions omissions in the specification and drawings when these omissions are wilfully made for the purpose of misleading. |
| _. In our view, the amended paragraphs contain factual allegations grounded in subsection 53(1) of the Act and a specific allegation of a violation of that section. We cannot say that it is plain and obvious that the alleged defence contained in these pleadings cannot possibly succeed given the state of the law. |
| _. Our role and duty where Motions Judges provide no reasons for the exercise of their discretion is to "consider the record to determine whether there was material before the motions judges which could have formed a basis for their exercise of discretion consistently with legal principles and the requirements of justice": see Reynolds v. Canada [1995] F.C.J. No. 1612 (F.C.A.), leave to appeal denied to the Supreme Court of Canada; Sark v. Abegweit Band Council [1996] F.C.J. No. 532 (F.C.A.). In the present instance, we can find in the material no basis to support his exercise of discretion and the conclusion that he reached as a result. |
| _. For these reasons, the appeal against the Order of the Motions Judge rendered on March 19, 1998 which struck subparagraphs 10(l) and (m) and paragraph 11 as well as the heading preceding that paragraph contained in the Amended Statement of Defence and Counterclaim will be allowed with costs and the Motions Judge"s order set aside. |
"Gilles Létourneau"
J.A.
| _. FEDERAL COURT OF CANADA |
Names of Counsel and Solicitors of Record
| DOCKET: A-204-98 |
| STYLE OF CAUSE: APOTEX INC. |
Appellant
(Defendant)
| - and - |
| ELI LILLY AND COMPANY and |
| ELI LILLY CANADA INC. |
Respondents
(Plaintiffs)
DATE OF HEARING: MONDAY, JUNE 26, 2000
PLACE OF HEARING: TORONTO, ONTARIO
REASONS FOR JUDGMENT
| OF THE COURT BY: LÉTOURNEAU J.A. |
Delivered at Toronto, Ontario on Monday, June 26, 2000
APPEARANCES: Mr. David Scrimger
| For the Appellant (Defendant) |
Mr. James Mills
| For the Respondents (Plaintiffs) |
| SOLICITORS OF RECORD: Goodman Phillips & Vineberg |
Barristers & Solicitors
2400- 250 Yonge Street
Toronto, Ontario
M5B 2M6
| For the Appellant (Defendant) |
| Gowling, Strathy & Henderson |
| Barristers & Solicitors |
| 2600- 160 Elgin Street |
| P.O. Box 466, Station "D" |
| Ottawa, Ontario |
| K1P 1C3 |
| For the Respondents (Plaintiffs) |
FEDERAL COURT OF APPEAL
Date: 20000626
Docket: A-204-98
BETWEEN:
| APOTEX INC. |
Appellant
(Defendant)
| - and - |
| ELI LILLY AND COMPANY and |
| ELI LILLY CANADA INC. |
Respondents
(Plaintiffs)
| REASONS FOR JUDGMENT |
| OF THE COURT |