Proposed changes to the Chinese Trademark Law

Recognizing the economic  importance of a well-functioning trademark system and in view of recent high-profile trademark disputes, such as the widely publicized iPad dispute which was reputedly settled for a payment of about US$60million,  the Chinese government has been considering a further revision of the Trademark Law which has been open for public consultation through January.

The draft amendment  addresses some important issues for applicants. It seeks to make trademark registration faster and more convenient, increases punishments for infringement, includes additional provisions to prevent unfair competition, and extends protection to additional types of non-traditional marks.

A common complaint from foreign and domestic parties is that Chinese law does not provide adequate remedies for intellectual property infringement. The new draft law would raise the ceiling for fines imposed on trademark violators in circumstances where the financial losses and gains from the infringement cannot be determined. This is a significant issue because the absence of a discovery process under Chinese law means that it can be very difficult to establish the amount of any losses to the trademark owner or amount of any illegitimate profits made by an infringer. Repeat infringers and those who intentionally assist an infringer would be subject to increased penalties.  The amendments would also permit awards of punitive damages.

The trademark registration process currently takes up to three years to complete and requires separate filings to obtain protection in each class of wares and services. The proposed amendments are intended to shorten the registration process to less than 10 months, and would allow a single application to be filed to encompass multiple international classes. This would make the registration process substantially cheaper.

The amendments would also introduce new obstacles to trademark squatting and malicious trademark registrations and give additional protection to the owners of unregistered but renowned marks.  In a further effort to block unfair competition, the amendments would also limit the grounds on which a third party may challenge pending applications, and would limit the range of parties who are entitled to make such a challenge. These changes are all intended to block unfair trading practices such as bad faith applications to register an existing trademark and vexatious challenge proceedings. 

Finally, the amended law would permit sounds, smells, colors and moving objects to be registered as trademarks, if they satisfy the other requirements for registerability.

There are more than 10 million trademark filings on record with the Chinese State Intellectual Property Office of China and more than seven million of these are already registered. With the continuing growth in the economic importance of the PRC both as manufacturing location and as a consumer market, it is increasingly critical for intellectual property owners to take proactive steps to protect their position in the Chinese market. 

MBM provides advice on all areas of intellectual property, including advice on the registration, enforcement and defence of international rights. Please contact us for further information.

By: Euan Taylor & Yawen Liu

The Weight of Words

Case Considered: Habib Bank Limited v. Habib Bank AG Zurich, 2013 FC 51

This case, heard before Mr. Justice Rennie, was an appeal from the decision of the Registrar of trade-marks dismissing Habib Bank Limited’s (HBL) opposition to Habib Bank AG Zurich’s (HBZ) trade-marks. 

Facts

The history behind the two companies helps explain the similar names. HBL was founded in in 1941 in Bombay, India by the Habib family. It was established to provide banking services to the Muslim Community in India. After the partition of India and Pakistan in 1947, HBL moved its headquarters to Karachi, Pakistan. HBL continued to grow and in 1967 sought to establish in Switzerland. Swiss law at the time required a bank to have local capital; therefore HBZ was established with its head office in Zurich.

In 1974, under the premiership of Zulfiqar Ali Bhutto, Pakistan’s banks were nationalized, including HBL. Though the Habib family lost control of HBL, it maintained control of HBZ. From 1974 until 2003, when Pakistan divested itself of HBL, HBL and HBZ had several disputes over the use of the name Habib. In 1986 a settlement agreement was reached between the two parties that regulate the use of the word Habib for banking, though it does not directly address trade-marks. In 2003 Pakistan Divested itself of HBL, and for a brief time, the Habib family regained control of HBL. As of 2004, however, the Habib family has had no interest in HBL.

In 2004 HBZ filed application No. 1,220,988 to register the trade-mark “HABIB CANADIAN BANK & DESIGN” and application No. 1,220,990 to register the trade-mark “HABIB CANADIAN BANK”. HBZ filed these applications based on use of trade-marks in Canada since March 22, 2001 in association with banking services.

On March 10, 2006 HBL filed statements of opposition to the marks. The grounds of opposition were; HBZ not being entitled to register the trade-marks under s.16(1)(a) of the Trade-marks Act (Act) as the trade-marks are confusing with HBL’s trade-marks which had been previously been made known in Canada, and the trade-marks are not distinctive under s.2 of the Act.

HBL’s evidence included evidence that its marks were made known in Canada as early as 1990 through the operation of a representative office for 1 year in Mississauga, Ontario. HBL also stated that it advertised the office in many newspapers, giving one concrete example. HBL also cited 5 examples of transactions with Canadian banks in 2004 as evidence of its commercial presence in Canada. HBL’s website received over 87,000 hits between November 2006 and March 2007. Finally, as of March 23, 2007 HBL had 462 account holders with primary addresses in Canada. Though not part of HBL’s evidence, once instance of reported confusion between HBZ and HBL in Canada was shown in an article published in the Toronto Star.

Justice Rennie noted that there was no new evidence on appeal; therefore the matter was to be decided using the standard of reasonableness of the Registrar’s decision.

In confirming the Registrar’s decision, Justice Rennie found it reasonable that the sum of HBL’s evidence does not show that HBL’s marks or trade-name were used or made known in Canada as of the material date, which is the date of use, and that as of the date of opposition, HBZ’s marks were distinctive of HBZ.

The material dates had the effect of limiting any evidence showing that HBL’s mark and name were known to those prior to March 10, 2006. This left HBL with the one year of operation of a representative office in the early 1990s, one concrete publication of advertisement, and 5 transactions with Canadian Banks.

Confusing with a mark made known in Canada

Section 16(1)(a) permits registration of a mark so long as it is not confusing with a mark that is used or made known in Canada. HBL argued that its mark was made known in Canada, and that HBZ’s mark would be confusing at the date of first use, March 22, 2001.

To have a mark “made known” in Canada requires use of the mark in a World Trade Organization (WTO) member country, advertising in Canada of the mark in association with the wares or services used in the first country, and an association between the mark and services in Canada because of such advertising. Since Pakistan is a WTO member country HBL satisfied the first leg of this test.

HBL could only show minimal advertising in Canada, and could not show circulation for its one concrete newspaper advertisement.   The court found, not surprisingly, that statements such by the witness for HBL that HBL had advertised in “many” publications, without giving further details was weak evidence.

Finding that HBL could not show use or that it had made its mark known in Canada, Justice Rennie found that HBL’s opposition under s.16(1)(a) could not succeed regardless of whether there was confusion. Additionally, Justice Rennie found it reasonable for the registrar to dismiss the one instance of reported confusion in the Toronto Star article, as the evidence was unconfirmed, and anecdotal. The statement was a second hand account without a clear description of the marks that were confused.

Distinctiveness

HBL also claimed that HBZ’s marks do not distinguish HBZ’s services from that of HBL as of the date of opposition, March 10, 2006.

Using the summary of the law on distinctiveness provided by Justice Noël in Bonjangles’ International, LLC v. Bojangels Café Ltd, 2006 FC 657, Justice Rennie found that given the evidence before the Registrar, it was reasonable for the Registrar to find that HBL’s mark was not known in Canada.

In arriving at her decision that HBL’s marks were not sufficiently known the Registrar noted that the representative office of HBL had closed 14 years prior to the date of opposition of HBZ’s mark, and that there was no evidence of HBL’s trade-mark being displayed during the 5 transactions with Canadian banks in 2004.

Unlicensed Use by a Third Party

Finally Justice Rennie found the Registrar’s decision not to entertain any arguments regarding the use of HBZ’s marks by the Habib Canadian Bank as proper use by HBZ as reasonable. The failure of HBL to state this ground of opposition in the pleadings removed the possibility for HBL to rely upon it.

Conclusion

Aside from the interesting set of facts arising from nationalization, this case stresses the importance of evidence in opposition proceedings. Evidentiary support of statements is important. It is also important to file evidence that considers the material dates of each ground of opposition.

By: Jahangir Valiani

 

Too Many Drug Trade-marks

Patients sometimes suffer and may even die because of prescription errors caused by confusion between drug names. To protect consumers from these kinds of mistakes, medical regulators are generally involved in the vetting of the names used for medications.  Rejection rates for invented drug names are reported to be as high as 40% and the cost of simply choosing an ethical name for a drug can be of the order of $1,000,000 to $2,000,000. Applicants often file multiple name applications with the regulators in case some are rejected.  Because of the value of the names, the applicants also file trade-mark applications in any significant jurisdictions.  

Once a name has been approved by the medical regulators, the other alternative names (and trade-mark registrations) generally become irrelevant, but if they have been registered as trade-marks they will remain on the register for a number of years. As a result the trade-mark registers can become cluttered with unused marks, all of which can be cited against future applications. A January 2013 research paper by G. v. Graevenitz (see Economics of IP: Trademark Cluttering)   has shown that in 2010 there were over 150,000 European Community Trademarks on file relating to pharmaceuticals, and there are over 21,000 new applications per year in pharmaceutical related classifications. The paper estimates that about 6% of these marks are surplus to requirements and that the likely cost of inventing all these extra names is at least about $20,000,000 to $50,000,000 a year.

A large part of the costs associated with new trade-marks are the costs of searching the register to identify conflicting names, so that an applicant does not waste money filing applications that are doomed to failure and does not adopt names that will infringe other registered trade-marks. An owner wants trade-marks to be uniform from one country to another so that a reputation can be built globally rather than piecemeal in different countries. But the costs of ensuring that a chosen mark is available in every jurisdiction of interest can be daunting.  Searches have to be conducted in multiple countries and multiple languages  before filings are made. Applicants will file applications for multiple marks as insurance against the rejection of one or more of the chosen candidate names, and most likely will file applications for a number of key translations of the name in question.

This all leads to a vicious cycle. The more marks are registered, the harder it gets to find a new name to register and the more incentive there is to file multiple applications as fallback positions.  The cost of protecting a trade-mark, and the importance of getting it right, makes it critical to obtain specialist professional advice before decisions are taken. MBM provides advice on all areas of trade-mark strategy, including the choice of marks, global filing strategies and the handling of disputes. 

By: Euan Taylor

IS AN ENANTIOMER AN "INNOVATIVE DRUG"?

Last week the Federal Court of Appeal in a two to one decision affirmed the Minister of Health’s and Federal Court’s decision that DEXILANT did not qualify as an “innovative drug” under “the data protection regulations” of the Food and Drug Regulations and thus was not entitled to data protection. The full decision can be found at the following link:

http://decisions.fca-caf.gc.ca/en/2013/2013fca13/2013fca13.html

Under the data protection regulations, an “innovative drug” “means a drug that contains a medicinal ingredient not previously approved in a drug by the Minister and that is not a variation of a previously approved medicinal ingredient such as a salt, ester, enantiomer, solvate or polymorph.”

There was no question that Dexlansoprazole, the medicinal ingredient of DEXILANT, had not previously been approved in a drug.  What was at issue was whether or not Dexlansoprazole was a variation of a previously approved medicinal ingredient.

Dexlansoprazole is one of two enantiomers found in the previously approved racemic mixture, lansoprazole.

As noted at paragraph 17 of the FCA decision:

In [the Minister of Health’s] view, drugs containing any of the listed variations of a previously approved medicinal ingredient (here an enantiomer) can never be an “innovative drug,” regardless of the innovator’s effort in developing the drug. Any drug containing a medicinal ingredient that is an enantiomer of a previously approved medicinal ingredient is automatically a “variation.”

The issue before the FCA was one of statutory interpretation and the applicable standard of review was that of correctness.  Namely, was the definition of “innovative drug” taken in context and with attention given to its text and purpose, interpreted correctly by both the Minister of Health and the Federal Court.

The FCA answered yes and agreed with the interpretation that all listed examples in the definition of “innovative drug” are variations and dismissed the appeal.

As an aside, Justice Stratas in his dissenting reasons provided an interesting discussion on Canada’s data protection obligations under NAFTA and TRIPS and a compelling argument that the automatic exclusion of enantiomers “will lead to results which are contrary to Canada’s NAFTA and TRIPS obligations” (see paragraph [96]).

His comments when considered together with the scientific evidence that many enantiomers have different biological and pharmalogical properties to their stereoisomers, supports the notion that the Governor in Council should revisit the definition of “innovative drug”.

 

By: Claire Palmer

 

Double Patenting in Canada: Change in Canadian Patent Office Practice?

As discussed in a previous post in this blog (http://www.canadaipblog.com/search/label/Double%20Patenting), Canadian jurisprudence clearly sets forth a prohibition against double patenting. There are two branches of double patenting in Canada: (1) “same invention double patenting” which applies in situations where the claims are identical or conterminous and (2) "obviousness double patenting” which prohibits the issuance of a second patent with claims that are not "patentably distinct" from those of the earlier patent.  As terminal disclaimers are not available in Canada, care must be taken to ensure that the subject matter claimed in any voluntary divisional applications (i.e. not filed in response to a restriction requirement) is patentably distinct from the claims of the parent.

It has been my experience in the past, that Canadian Patent Examiners simply issue a double patenting objection to a voluntary divisional application when they believe that the claims of the divisional application are not directed to patentably distinct subject matter.  While I am aware of threats in the past of “denying divisional status” to an application unless the claims are amended to be directed to patentably distinct subject matter, I was not aware of the Canadian Patent Office following through with such a threat until recently.  In a recent case that I am familiar with, the Canadian Patent Office, instead of just issuing a double patenting objection against the claims of a voluntary divisional application, also “denied divisional status”, and changed the filing date of the divisional application from the filing date of the parent to the date the divisional application was submitted to the Canadian Patent Office and then cited the parent as prior art.  Is this the start of a new practice for the Canadian Patent Office?  In addition, Section 30 of the Patent Rules clearly sets forth the steps that an Examiner must follow when examining an application.  There is nothing in this section or other sections of the Patent Act or Rules that provides clear authority to “deny divisional status” and change the filing date.  Accordingly, it also begs the question: “Does the Canadian Patent Office have the authority to do this under the Canadian Patent Act or Rules?”.

Regardless of whether this is a change in Canadian Patent Office practice or a onetime occurrence, this case clearly illustrates that care must be taken when filing voluntary divisional applications in Canada.  As such, we strongly recommend consulting with your Canadian Patent Agent prior to considering filing any voluntary divisional applications.

 

By: Kay Palmer

 

 

Wenzel Downhole Tools Ltd. and William Wenzel v. National-Oilwell Canada Ltd. et al.

 

The Federal Court of Appeal released its decision last week in relation to the Wenzel Downhole Tools Ltd. and William Wenzel (“Wenzel”) appeal of Judge Snider’s decision to dismiss the patent infringement case against National-Oilwell Canada Ltd. et al (“National-Oilwell”) and to invalidate Canadian Patent No. 2,026,630.  The Appeal was heard by Justices Gauthier, Nadon and Mainville with the Reasons for Judgement written by Justice Gauthier.  The full decision can be found at the following link:

http://decisions.fca-caf.gc.ca/en/2012/2012fca333/2012fca333.html

Canadian Patent No. 2,026,630 entitled a “Method of Increasing the Off Bottom Load Capacity of a Bearing Assembly” relates to an assembly for use in a downhole drilling motor used in the oil and gas industry, hereafter the “3103 assembly”.

The Federal Court Decision:

Judge Snider found the ‘630 Patent to be invalid on the basis of anticipation and obviousness.  I found the case as it relates to anticipation and what constitutes a public disclosure to be particularly interesting and accordingly have limited my discussion to this point.

Judge Snider found that as a result of the rental and use of a drilling tool incorporating the so called “3103 assembly” the invention claimed in the ‘630 Patent was available to the public before the claim date of the patent and therefore the patent was invalid for anticipation.

It is worth noting that the “3103 assembly”, as acknowledged by Judge Snider in her FC decision, is “encased in a steel tube, and thus a visual inspection of the three units rented to Ensco would not have disclosed their inner workings (particularly of the 3103 assembly).” [See paragraph 26 of FCA decision]. It could however be visualized if the drilling tool was dismantled.

Judge Snider held that as the drilling tool could be dismantled they “were available for more than a visual inspection”. The fact that the rented drilling tools were returned after the rental period intact was not relevant. In her decision, Judge Snider equated rental of a drilling tool containing the steel encased “3103 assembly” to an anticipating description in a library book and that there was no need to show that the “3103 assembly” was examined – the hypothetical disclosure was sufficient. 

Judge Snider also “made an alternative finding that the drawing of the “3103 assembly” [available at the start of the rental for a limited period] could be considered as anticipation by publication.”

Federal Court of Appeal Decision:

On appeal, Wenzel argued “that the Judge erred in her application of the law to the facts of the case more particularly by: (i) equating the 3103 assembly with a book on the shelf in the public library ... because the Judge’s conclusion did not take into consideration the accepted evidence that the claimed invention was encased in metal and could not have been and was not observed at the Dilley job; and (ii) failing to consider that there was no evidence that [person of ordinary skill in the art] POSITA was at the site or that such person would have the skills to open the drilling tool to examine the 3103 assembly and discern the invention.” [See paragraph 55 of FCA decision]

Justice Gauthier, in his Reasons for Judgement for the FCA upholding the finding of invalidity, did not agree with Wenzel’s arguments noting, at paragraph 68, that

becoming available means that, the public, as defined earlier, had an opportunity to access the information that is the invention. As previously mentioned, it does not require that one actually took advantage of this opportunity. Once the opportunity is established as a fact ..., the Court applies the legal test for anticipation developed in Sanofi (full disclosure of all the essential elements of the invention and enablement) to the information that the fictional POSITA would derive from the fictional examination.

For a public disclosure to be anticipatory it must give an accurate and complete description of the invention claimed [See paragraph 72].

Justice Gauthier noted that “being available does not require that access to the information be easy, simply that it be possible using known methods and instruments.” [paragraph 69].  The question appears to boil down to is there “an opportunity to access the relevant information”.  If there is no opportunity, then there is no public disclosure.

This opportunity presumably would not have been available if contractual obligation between lessor and the lessee (Enzo) prevented examination of the assembly or limited examination of the assembly to those covered by a non-disclosure agreement or if the opening of the joints resulted in the destruction of the assembly. [See paragraphs 77 and 78].

Justice Gauthier found “no need to deal with [Judge Snider’s] alternative finding in respect of the drawing itself”, noting that “[n]othing herein should be construed as an endorsement of her conclusion in that respect.  I believe it is unfortunate that Justice Gauthier did not comment on Judge Snider’s findings that the drawings constituted a prior publication as I believe it is unclear if these drawings, on further consideration, would have in fact constituted a publication.

Concurring Reasons:

Justice Mainville in his Concurring Reasons disagreed with Justice Gauthier concerning the issue of anticipation although did agree with the obviousness findings and ultimate invalidation of the ‘630 patent. Justice Mainville provides a detailed analysis of the law surrounding anticipation by prior publication, prior oral communication and prior use.

Justice Mainville noted that:

[124] Anticipation by prior publication requires that the invention be in fact disclosed in written documentation made available to the public, such as patent specifications, journal articles, and trade literature, including instruction and repair manuals and brochures ...

[126] Since disclosure must be assessed objectively, it suffices that the publication be available for consultation by the public (such as in a public library or over the internet), whether or not the publication has in fact been read: Lux Traffic Controls Limited v. Pike Signals Limited, [1993] R.P.C. 107 (“Lux”) at p. 133. However, private manuscripts which are not publicly available or papers which are kept in filing cabinets or archives not normally accessible to the public do not meet the threshold since such documents are not objectively “available to the public”.

Justice Mainville further noted that:

the elements considered as “publications” by the Judge were the drawing of the 3103 Assembly held by Ken Wenzel at the job site, and the availability of Ken Wenzel for consultation: see paras. 120 to 122 of the Reasons. However, in her assessment of the evidence, the Judge made no factual determination as to whether the drawing amounted to a publication available to the public, or whether any information concerning the 3103 Assembly was actually communicated by Ken Wenzel. She simply equated the possibility of consulting Ken Wenzel – who held the drawing - as amounting to anticipation by prior publication, without first determining whether or not any information was in fact published or disclosed.

Based on testimony, there was no evidence that these drawings were actually disclosed or that Ken Wenzel consulted.

Justice Mainville concluded that:

that an undisclosed drawing does not amount to a publication which is available to the public. There is no analogy here with a published book sitting on a shelf in a public library. In the case of the book, the disclosure can be objectively ascertained by the fact that it is publicly available from a third party, i.e. the public library. In the case of a drawing held by an inventor, public disclosure cannot be objectively ascertained without evidence of it being made available to the public through a deposit in a public library, placing it on the internet, publishing it in a trade journal, etc., or through actual disclosure to a member of the public not otherwise held to an obligation of confidence.”

[145] A drawing held by an individual, and information held in the mind of an individual, are not in the public domain until such time as they are effectively conveyed to the public...

This case provides further clarity with respect to prior use and what constitutes becoming available to the public.  Unfortunately, it did not clarify what constitutes a publication. It will be interesting to see how future cases handle this question.

By: Claire Palmer

 

Re Costs: Mövenpick Holding AG v. Exxon Mobil Corporation , 2013 FCA 6

The parties in this case had a disagreement over the repayment of costs awarded to the respondent. In the Federal Court level, Movenpick appealed the decision of the Trademark Opposition board on allowing Exxon mobile to register the trade-mark “Marché express” in association with convenience store and fast-food services offered at gasoline stations. Justice Harlington mentioned that the added linguistic evidence, which were submitted by both parties to the Federal court level under section 56, would not have affected the decision of the Registrar. As a result the court upheld the decision of the Opposition board and found “Marche Express” not clearly descriptive. 

The case was dismissed and the respondent, Exxon, was awarded costs. However parties were unable to reach an agreement and brought the matter to the Appeal Court. The court asked Exxon to file a bill of costs. The first issue on the appeal was if the fees should be charged at the mid-range or high range of Tariff B. Justice Harlington in this regard stated that the case was not very complicated and the parties involve were sophisticated and they decided to spend enormous amount of time and money. “They were free to agree between themselves that the successful party should receive enhanced costs. They did not.” As such, the court ordered a mid-range repayment.

Movenpick also complained about an existence of a second counsel through the cross-examination of its own affiant. The court of appeal agreed and found the existence of the second counsel unnecessary and disallowed the second counsel’s fee.

Movenpick also objected to repayment of the Exxon’s expert witness fees. The Court of Appeal said, although the expert witness testimonies did not affect the outcome of the case, Exxon hired the experts in response to the expert evidence filed by the Applicant. As a result the court stated they are entitled to the repayment of fees.

By: Asrin Jawaheri

Different Court, Same Result – the case for Judicial Comity

Case Considered: Apotex Inc v Abbott Laboratories Ltd 2013 ONSC 356

This decision by Quigley J. grants Abbott Laboratories’ motion for summary judgment denying Apotex’s claim for unjust enrichment for alleged violations of the Patented Medicines Notice of Compliance Regulations (PMNOC) beyond the scope specified in s.8 of the PMNOC. It is noteworthy that this is the first action brought before a Superior Court of record that arises from the PMNOC.

Apotex filed an Abbreviated New Drug Submission (ANDS) for Lansoprazole. Lansoprazole is a known drug used to treat stomach and intestinal ulcers, however it is also effective, in combination with antibiotics, to eradicate H. pylori, the bacteria that are a major cause of intestinal cancer. Canadian Patent No. 2,009,741 (‘741) discloses the second use of Lansoprazole.

Apotex also filed a Notice of Allegation (NOA), claiming that their generic product either did not infringe the ‘741 patent or that the ‘741 patent is invalid.

Abbott and Takeda filed an application prohibiting the Minister from issuing the Notice of Compliance (NOC), which prevents the Minister from issuing an NOC for 24 months. It is important to note that though the Minister may not issue an NOC, he or she may still examine the ANDS to determine if it satisfies all of the other requirements to be marketed as a drug.

Section 8 of the PMNOC provides for remedies where the statutory stay delays the generic’s entry to market. Section 8 has also been found by the Federal Court and Federal Court of Appeal to limit remedies available to actual loss suffered by the generic manufacturer caused by the stay.[1] The Federal Court of Appeal also noted that section 8 of the PMNOC is worded so as to exclude equitable relief where a generic is delayed from entry into the market by a statutory stay.[2]

Apotex and Abbott settled the PMNOC proceeding in 2008, allowing Apotex to enter into the market for Lansoprazole 8 months prior to the expiry of the ‘741 patent, while Apotex would restrict any damages to those permitted under section 8 of the PMNOC for a two year period preceding the agreed upon date for Apotex’s entry into the Lansoprazole market.

Due to other regulatory problems the Minister did not issue an NOC to Apotex for the generic Lansoprazole until one month after Apotex would have been permitted to enter the market under the settlement agreement.

Abbott asserted that the delay for the generic drug to enter the market was not due to the stay, but due rather to regulatory hurdles, and therefore Apotex should not be entitled to any remedy under the PMNOC.

Apotex discontinued its action in the Federal Court, and brought this action for unjust enrichment in the Ontario Superior Court instead.

In granting summary judgment, Quigley J. decided four issues.

First Quigley J. found that there was concurrent subject-matter jurisdiction between the Federal Court and provincial Superior Courts, and that the discretion to grant equitable relief is identical. Although the Federal Court is a statutory court, s.3 of the Federal Courts Act[3] describes the court as one of law, equity and admiralty.

Therefore, where the Federal Court and provincial Superior Courts have concurrent jurisdiction, and where the facts are similar, and the Federal Court chooses not to grant equitable relief, provincial Superior Courts will find this persuasive.

Secondly, Quigley J. found this was an appropriate case for summary judgment as there was no genuine issue for trial. Quigley J. found that as a matter of law, the question of whether s.8 of the PMNOC allows for a disgorgement of profit has been addressed by the Federal Courts fully and persuasively. Alternatively, the Judge found that there is substantial support for the proposition that summary judgment may be appropriate where the law is unsettled. More importantly, Quigley J. also found that the record before him was sufficient to make a determination – evidenced by Apotex waiving examinations for discovery.

Thirdly Quigley J. went into a lot of detail to support the Federal Court of Appeal’s decision in Apotex v Eli Lilly.[4] Quigley J. found the reasoning of Noel J.A. in Eli Lilly a well-reasoned and exhaustive judgment outlining why unjust enrichment is unavailable in cases such as the one currently before the Court. Noel J.A. does explain in his reasons that equitable relief may be available in a PMNOC proceeding only where a cause of action independent of section 8 of the PMNOC is alleged. Quigley J., surprisingly, also gave a lot of weight to the fact that leave to appeal the Eli Lilly decision was denied by the Supreme Court of Canada. The decision by the Supreme Court to not hear the appeal was interpreted by Quigley J. as support that the law as stated in Eli Lilly is conclusive, though he does not go so far as to assume that the Supreme Court supports the position. Finally, the clarity of s.8 of the PMNOC, especially after it was amended in 2006, supports the conclusion made in Eli Lilly.

Finally, Quigley J found Apotex failed to show that the test for unjust enrichment had been met. Namely, Apotex could not show that there was not a juristic reason to support the gain obtained by Abbott and the corresponding loss Apotex suffered. Quigley J. found two juristic reasons for the transfer of benefit, namely s.8 of the PMNOC and the settlement agreement that Abbott and Apotex entered. With respect to the PMNOC, Quigley J. found that it is a balance that creates some benefits for generic manufacturers such as the ability to work early, and therefore there will be some provisions that do not tilt in favor of generic manufacturers.

This decision shows that provincial Superior Courts support judicial comity and are therefore unwilling to decide cases related to patents, or other areas where the Federal Courts have a greater expertise, differently.

--------------------------------------------------------------------------------
[1] Apotex Inc v Merck Inc, 2009 FCA 187

[2] Apotex Inc v Eli Lilly Canada Inc, 2011 FCA 358
[3] RSC 1985, c. F-7
[4] supra, note 2.

By:Jahangir Valiani