Apotex Inc. v. Merck & Co.

Apotex Inc. v. Merck & Co.
Court (s) Database
Federal Court of Appeal Decisions
Date
2006-10-10
Neutral citation
2006 FCA 323
File numbers
A-232-06
Notes
Reported Decision
Decision Content
Date: 20061010
Docket: A-232-06
Citation: 2006 FCA 323
CORAM: LINDEN J.A.
SEXTON J.A.
MALONE J.A.
BETWEEN:
Apotex Inc.
Appellant
and
Merck & Co., Inc., Merck Frosst Canada & Co., Merck Frosst Canada Ltd., Syngenta Limited, AstraZeneca UK Limited and AstraZeneca Canada Inc.
Respondents
Heard at Toronto, Ontario, on September 11 to 14, 2006.
Judgment delivered at Ottawa, Ontario, on October 10, 2006.
REASONS FOR JUDGMENT BY: MALONE J.A.
CONCURRED IN BY: LINDEN J.A.
SEXTON J.A.
Date: 20061010
Docket: A-232-06
Citation: 2006 FCA 323
CORAM: LINDEN J.A.
SEXTON J.A.
MALONE J.A.
BETWEEN:
Apotex Inc.
Appellant
and
Merck & Co., Inc., Merck Frosst Canada & Co., Merck Frosst Canada Ltd., Syngenta Limited, AstraZeneca UK Limited and AstraZeneca Canada Inc.
Respondents
REASONS FOR JUDGMENT
MALONE J.A.
I. Introduction
[1] This is an appeal and cross-appeal from a decision of Hughes J., a Judge of the Federal Court (the Judge) dated April 26, 2006 and reported as 2006 FC 524. At issue is the validity and infringement of Canadian Patent 1,275,350 (the ‘350 Patent), which covers a class of compounds, including lisinopril, used in the treatment of hypertension. The ‘350 patent expires on October 16, 2007.
[2] There are two principal respondents, Merck & Co. Inc., which is the owner of the ‘350 Patent and its two Canadian affiliates (collectively Merck) as well as Syngenta Limited, AstraZeneca UK Limited and AstraZeneca Canada Inc. (collectively Astra). Astra is a licencee under the ‘350 Patent. Both actively sold drugs incorporating lisinopril in Canada until 2000. The appellant is Apotex Inc. (Apotex), a generic manufacturer that also markets a lisinopril product in Canada.
[3] This action was commenced in 1996 alleging that Apotex infringed claims 1, 2 and 5 of the ‘350 Patent. Apotex counterclaimed alleging invalidity of the patent. At the commencement of trial, Apotex admitted that if these claims were valid then it had infringed those claims subject to certain exemptions for lisinopril obtained from a licenced source and quantities used for exempted purposes.
[4] Hughes J. determined that Apotex had infringed each of claims 1, 2 and 5 of the ‘350 Patent, subject to certain exemptions, that Apotex was precluded from challenging the validity of those claims and that, in any event, those challenges to validity failed. Various remedies were granted that will be detailed later in these reasons.
[5] True to form, the parties have raised some 23 issues and sub-issues on the appeal and cross-appeal. However, the key question to be answered is whether a patent that meets the substantive requirements for patentability should be invalidated for an alleged failure to comply with a statutory provision during prosecution; the so-called improper divisional attack.
II. Statutory Regime
[6] Although the Patent Act, R.S.C. 1985, c.P-4 (the Act), was amended on October 1, 1989, transitional subsections 78.2(2) and (3) provide that applications filed before that date and patents arising there under, including the patent and applications at issue here, should be dealt with under its provisions as they read immediately prior to the amendments. Accordingly, unless otherwise indicated, references to the Patent Act in these reasons refer to the Act as it read immediately prior to October 1, 1989.
III. Factual Matrix
Background to the Biochemistry
[7] The patent claims under attack were issued in respect of a class of compounds discovered by Merck. The particular compounds in dispute are angiotensin converting enzyme inhibitors (ACE Inhibitors). Merck filed a United States patent application in late 1978 and a Canadian application number 341,340 (the ‘340 application) in late 1979. The compounds share the same general formula or “backbone,” i.e. Formula I. Formula I contains seven locations, R plus R1 through R6, at which a choice of several chemicals or molecules may be placed. Where the compounds covered by the ‘340 application and all the patents derived there from differ is in the selection of chemicals and molecules which comprise each R through R6. It was estimated by Hughes J. that easily billions of compounds could exist within this class.
[8] Formula I is depicted in the following diagram:
[9] Beginning in 1986, several divisional applications were divided out from the original ‘340 application, including the application which later matured to the ‘350 Patent. The ‘350 Patent encompasses a subset of the class of compounds covered by the original ‘340 application that includes lisinopril. Other divisionals derived from the ‘340 application are directed to other subsets of the class of compounds sharing Formula I that include two other antihypertensives, enalapril and enalaprilat.
History of the ‘350 Patent and Related Patents and Applications
[10] The first patent application resulting from Merck’s discovery of the Formula I class of compounds was United States application 968,249 filed on December 11, 1978. The ‘340 application was then filed in Canada on December 6, 1979, claiming priority from this earlier United States application. The disclosure was essentially the same as in the United States application; however, approximately 127 examples were added specifically disclosing lisinopril, enalapril and enalaprilat.
[11] In addition, there were also claims specific to each of lisinopril, enalapril and enalaprilat in the claims section of the Canadian patent application. Claims 1-3 were directed to classes of compounds. Claim 4 was specific to enalapril and Claim 5 to lisinopril. Claim 6 referred to nine different compounds, the first of which was enalaprilat. Finally, Claim 7 was directed to a process for preparing the compounds.
[12] On February 22, 1983, United States Patent 4,374,829 issued, tracing back to the original United States priority application.
[13] As stated at paragraph 9, the ‘350 Patent is one of several patents that originated from the parent ‘340 application and whose underlying applications were “divided out” from the parent ‘340 application as divisionals. Merck divided out these applications on its own initiative. The division was not requested by the Commissioner of Patents (the Commissioner), nor did the Commissioner object when the divisional applications were filed and prosecuted.
[14] For ease of reference, the following time chronologies of the patent and divisional applications are outlined in the following tables:
Date
Patent/Application
December 11, 1978
The initial (priority) patent application was filed by Merck in the United States Patent Office (“U.S. Application”) and issued February 22, 1983.
December 6, 1979
The Canadian ‘340 Patent Application was filed claiming the benefits of priority from the U.S. application (“Parent ‘340 Application”) and issued May 20, 1992.
Group
Date of Maturity
Divisional
First Group of Divisionals
October 16, 1990
Application 518,334 with claims to a class of compounds including enalapril filed on September 16, 1986. This application matured to Patent ‘349.
May 5, 1992
Application 518,335 which included claims directed to enalaprilat filed on September 16, 1986. Ultimately matured to Patent ‘313.
Second Group of Divisionals
November 7, 1989
Application 576,715 which included claims directed to enalapril plus diuretic filed on September 7, 1988. Matured to Patent ‘684.
November 8, 1990
Application 576,716, which included claims directed to lisinopril plus a diuretic and to uses of lisinopril alone filed on September 7, 1988. Matured to Patent ‘559.
Third Group of Divisionals
October 16, 1990
Application 607,198 which included claims directed to lisinopril filed on September 16, 1986. Matured to Patent ‘350.
Development and Commercialization of Lisinopril Products
[15] The first commercialization of lisinopril products in Canada was commenced by Merck in the early 1990s, followed closely by Astra. In October of 1990, Merck received a Notice of Compliance (NOC) from Health Canada giving it permission to market lisinopril in Canada in 5, 10, 20, and 40 milligram (mg) strength tablets.
[16] Astra then entered into an agreement with Merck, whereby Astra was licenced in respect of lisinopril products in Canada. Astra commenced selling lisinopril containing tablets in 5, 10 and 20 mg strengths in 1993.
[17] Delmar Chemicals (Delmar) manufactured lisinopril in Canada in the early 1990s under a licence from Merck in accordance with the compulsory licence scheme provided by the Act. Apotex obtained regulatory approval for the sale of a generic version of lisinopril tablets in a 5 mg strength tablet in October of 1996, purchased lisinopril through an intermediary from Delmar and entered the market.
[18] In 1999, Apotex expanded its range of products to include 10 and 20 mg strengths. The entry of this additional dosage had a significant impact on sales for Merck and Astra and they essentially stopped supporting their lisinopril products in Canada in 2000.
Litigation between the Parties
[19] This is not the first litigation in which these parties have been involved. An earlier action commenced in 1991 dealt with the ‘349 Patent pertaining to enalapril (the Enalapril Litigation). After a lengthy trial, an appeal and several related proceedings, that patent was held to be valid and infringed by Apotex (see Merck & Co. v. Apotex Inc. (1994), 59 C.P.R. (3d) 133 (F.C.T.D.) and [1995] 2 F.C. 723 (C.A.)).
IV. Decision Below
[20] Since virtually all of the major issues decided by Hughes J. are now the subject of the appeal or cross-appeal, and will be analyzed in the issues section of these reasons, it is pointless at this juncture to summarize in detail his reasons for judgment. Accordingly, I will turn immediately to the issues before us after dealing briefly with the standard of review.
V. Standard of Review
[21] In appellate review, the nature of the question at issue determines the applicable standards of review. Questions of law are reviewable on a standard of correctness, while findings of fact or of mixed law and fact will be set aside only if it is determined that the trial judge has committed a palpable and overriding error (see Housen v. Nikolaisen, [2002] 2 S.C.R. 235).
[22] With respect to discretionary decisions of a trial judge, this Court cannot intervene merely because it would have exercised the discretion in a different manner. Rather, the test for our review of the exercise of judicial discretion is whether the judge at first instance has given sufficient weight to all relevant considerations (see Reza v. Canada, [1994] 2 S.C.R. 394 at paragraph 20). Accordingly, a high degree of deference is accorded in matters of discretion.
VI. Issues on Appeal
Issue 1: Was the ‘350 Patent improperly divided out from the parent ‘340 application because the latter disclosed only one invention?
[23] The key to this first issue is whether the parent ‘340 application discloses but one invention; a class of compounds sharing the Formula I backbone of which lisinopril, enalapril and enalaprilat are examples, or are they separate inventions, one being the class of compounds itself and the other three individual compounds separately claimed within the class? (supra at paragraphs 10 and 11)
[24] Hughes J. approached this issue by analyzing the construction of both the ‘340 and ‘350 claims. The Judge preferred the expert evidence of Drs. Nelson and Wolfenden, called as witnesses for Astra, who both determined that each of lisinopril, enalapril and enalaprilat were as of 1978 or 1979 inventively different from each other (Reasons for Judgment at paragraph 48). His weighing of their evidence is not under attack in the present appeal.
[25] Were it not for Canadian jurisprudence that he considered binding, Hughes J. would have followed the House of Lords’ decision in May & Baker Limited v. Boots Pure Drug Company Limited (1950), 67 R.P.C. 23 (H.L.) (hereafter May & Baker) in finding that the ‘340 application disclosed only one invention. He stated:
It is compelling, having read the specification of the ‘340 application as a whole, endeavouring to give a purposive construction to what is stated there, to be driven to the same conclusion as the majority of the House of Lords in May & Baker, namely that there is but one invention described, namely a class of compounds having the structure of Formula I in common, useful in treating hypertension, and that lisinopril, enalapril and enalaprilat are simply illustrative members of that class.
[26] Hughes J. considered himself bound by two decisions of Thurlow J. in the Exchequer Court which were upheld by the Supreme Court of Canada and considered patents similar to the ‘340 application, C.H. Boehringer Sohn v. Bell-Craig Ltd. [1962] Ex. C.R. 201, aff’d [1963] S.C.R. 410 (S.C.C.) and Hoechst Pharmaceuticals of Canada Ltd. v. Gilbert & Co., [1965] 1 Ex. C.R. 710, aff’d [1966] S.C.R. 189 (S.C.C.) (hereafter Boehringer and Hoechst). His reasoning is as follows:
Were I to approach the matter without jurisprudential constraints, I would readily find that the ‘340 application is directed to but one invention, a class of compounds, of which individual compounds such as lisinopril are but illustrative. However, Boehringer and Hoechst, supra, oblige me to find otherwise, on the slender basis that there was, in the ‘340 application not only examples but also specific claims to the individual compounds enalapril, enalaprilat and lisinopril, each of which, on the theory of those cases, is a different invention from the class. A higher court may be persuaded otherwise however, for jurisprudential integrity in this Court, I must find that the ‘340 application discloses separate inventions to each of the class, to lisinopril, to enalapril and to enalaprilat.
[27] In this appeal Apotex makes two central arguments designed to illustrate that the ‘340 application discloses only one invention. First, it argues that Boehringer and Hoechst are distinguishable from the present case. Alternatively, it argues that those decisions do not stand, as Hughes J. suggests, for the principle that each claim in a patent discloses a separate invention.
[28] According to Apotex, those cases were concerned with the question of whether separate subject matter, differing in scope, substance and inventiveness, could be included in separate claims in the patent and by referencing each one, still satisfy the product-by-process and patentability requirements existing in the Act at that time (Apotex Memorandum at paragraph 59).
[29] While the main issues were different from those in the present case, both Boehringer and Hoechst considered the same preliminary issue considered by Hughes J.; that is, whether a patent which claims both a class of compounds and an individual compound discloses a single invention or more than one invention. For example, in Boehringer at 211 Thurlow J. stated:
The plaintiff, however, submitted that as a matter of construction the specification discloses two inventions, one relating to the class of substituted morpholines and the other relating to the single substance 2-phenyl-3-methylmorpholine, and it will, I think, be desirable to determine this question before approaching the question of construction of the specification in detail.
[30] Apotex also attempted to distinguish the Boehringer and Hoechst decisions because the patent involved extensive disclosure of the unique beneficial properties of the particular class members claim that were being reviewed. Apotex does not expand on this point nor does it give a pinpoint reference identifying where these extensive disclosures might be found. However, in both decisions, Thurlow J. considered the effect of separate claims for the class of compounds and the individual compounds before embarking on a review of the specification. Therefore, whether or not the specification contained extensive disclosure about the individual compounds was irrelevant to his construction of the claims. Accordingly, given that Thurlow J. considered the same issue as Hughes J. was called upon to consider with respect to a similar patent, in my analysis, Hughes J. was correct to rely on Thurlow J.’s analysis.
[31] A second argument is that Hughes J. wrongly interpreted Boehringer and Hoechst as standing for the principle that each claim of a patent discloses a separate invention. However, in my view, Apotex is reading the reasons of Hughes J. too broadly. Nowhere does he state that those cases stand for the broad proposition that each claim in a patent represents a separate invention. Rather, his holding is much narrower; namely, in cases as in the present, where a single patent application separately claims a class of chemical compounds and a single compound within that class, each separate claim discloses a separate invention. His reasons do not address the effect of any other types of claims.
[32] Apotex also argues that Thurlow J.’s reasons in Boehringer and Hoechst cannot stand because of his later decision in the case of Ciba-Geigy AG v. Commissioner of Patents (1982), 65 C.P.R. (2d) 73 (F.C.A.), which is said to reject this principle. However, that case is distinguishable as the Court was considering the effect of having claims disclosing a particular substance and claims disclosing the process for making that substance in the same patent concluding that the two are aspects of the same thing and are not separate inventions. That decision did not consider the effect of separate claims for a class of compounds and the individual compound within the class and therefore, in my view, is not inconsistent with Boehringer and Hoechst which focused only on this latter issue.
[33] One final point on this issue deserves comment. There exists some inconsistency between paragraphs 48, 187, 213 and 116 of Hughes J.’s decision. At paragraphs 48, 187 and 213, Hughes J. finds that each of lisinopril, enalapril, and enalaprilat were inventively different from each other, and if separate patent applications had been filed they would have been allowed as separate, inventively different patents. However, at paragraph 116, Hughes J., in relying upon May & Baker, states that he would have readily found that the ‘340 application is directed to but one invention, a class of compounds, of which individual compounds such as lisinopril, enalapril, and enalaprilat are but illustrative.
[34] The proceedings before the High Court of Justice in May & Baker involved a petition by Boots Pure Drug Company, for revocation of the patent granted to May & Baker; and a motion by May & Baker for leave to amend by way of disclaimer the complete specification upon which the patent was granted in order to delete a broad class of compounds and to insert a new claim to two specific compounds. May & Baker petitioned that Court to amend the specification by restricting its scope from the broad claim of the class of compounds to only two compounds and by insertion of a new claim to the two compounds.
[35] The issue before the Court was whether a patentee who obtains a patent for a large class of compounds can then amend the specification to significantly limit the scope and to introduce a claim to two specific compounds of known utility, which compounds were not specifically claimed (and only exemplified) in the originally granted patent.
[36] Jenkins J. refused to permit the amendments. As a result, the decision was appealed to the Court of Appeal, who confirmed his decision. The Court of Appeal concluded that the two compounds were not claimed as the invention in the original specification. They were merely given as examples or proofs of the results said to be obtainable from every member of the genus.
[37] The House of Lords confirmed the decision of the Court of Appeal, agreeing that to permit the amendment of the specification would claim an invention substantially different from that claimed in its original form.
[38] Clearly, May & Baker had nothing to do with divisional practice. The patent at issue did not contain a claim to the two specific substances themselves. These two substances were not specifically named in any claims, but were only named as examples as part of a broader class. This treatment shows that May & Baker considered the two substances as examples of a broad inventive class. In contrast, the ‘340 application contained not only examples of lisinopril, enalapril and enalaprilat, but individual claims to each of these compounds as well.
[39] Therefore, at paragraph 116 Hughes J. failed to distinguish between the issues before the Court in May & Baker, that is whether an amendment to disclaim a genus and add a claim to two compounds produces a substantially different invention, and the different issue of more than one
invention raised by Apotex. This would explain the inconsistency. In any event, his ultimate conclusion was in my view correct, that the divisional of the ‘350 Patent was not improper. Indeed, section 36 of the Act calls for a divisional in the circumstances of this case and in my view, Merck and Astra were simply complying with the Act.
Issue 2: What are the consequences of an improper divisional?
[40] Although it is not strictly necessary to answer the above question in light of my finding that the divisional was proper, I would say that even if there was an improper divisional, the consequences are not a loss of patent rights. Rather, as found by Hughes J., the division of a patent application is primarily a procedural matter and the principle of double patenting provides a sufficient remedy in the event that more than one patent issued for the same invention.
[41] Section 36 of the Act governs the procedure for divisional application. Subsection 36(1) provides that patents are to disclose only one invention, but that the disclosure of multiple inventions is not sufficient to invalidate the patent:
36(1) A patent shall be granted for one invention only but in an action or other proceeding a patent shall not be deemed to be invalid by reason only that it has been granted for more than one invention.
36.(1) Un brevet ne peut être accordé que pour une seule invention, mais dans une instance ou autre procédure, un brevet ne peut être tenu pour invalide du seul fait qu’il a été accordé pour plus d’une invention.
[42] Subsection 36(2) provides the authority for dividing out divisional applications from parent applications:
36(2) Where an application describes and claims more than one invention, the applicant may, and on the direction of the Commissioner to that effect shall, limit his claims to one invention only, and the invention or inventions defined in the other claims may be made the subject of one or more divisional applications, if those divisional applications are filed before the issue of a patent on the original application.
36.(2) Si une demande décrit plus d’une invention, le demandeur peut restreindre ses revendications à une seule invention, toute autre invention divulguée pouvant faire l’objet d’une demande complémentaire, si celle-ci est déposée avant la délivrance d’un brevet sur la demande originale.
[43] Subsection 36(4) provides that the divisional application is to be treated as a separate application but that it retains the filing date of the original application:
36(4) The divisional applications referred to in subsection (2) shall be deemed to be separate and distinct applications under this Act, to which the provisions thereof apply as fully as may be, and separate fees shall be paid on each of those applications and they shall bear the filing date of the original application.
36.(4) Une demande complémentaire est considérée comme une demande distincte à laquelle la présente loi s’applique aussi complètement que possible. Des taxes distinctes sont acquittées pour la demande complémentaire, et sa date de dépôt est celle de la demande originale.
[44] On appeal, Apotex urges that section 36 of the Act is not merely procedural and even if it is, non-compliance has the same effect as with other substantive provisions of the Act, namely a loss of patent rights.
[45] A review of the Act indicates that there are no provisions dealing with the consequences of an improper divisional. One is left therefore, to consider the purpose of section 36 and any other case law surrounding its meaning. In my analysis, the conclusions reached by the Judge are correct.
[46] First, in this case the Commissioner did not object when Merck divided out from the ‘340 application the claims which became the subject of the ‘350 Patent. As Hughes J. found, the Commissioner implicitly approved the divisional and this decision should be given deference. Had the Commissioner rejected the divisional as improper, Merck could have reinstated the claims divided out in the parent application. To now hold that the original ‘340 application disclosed only one invention and therefore that the ‘350 Patent is invalid as an improper divisional would deny Merck the opportunity to reinstate the lisinopril claims into the parent application, which issued in 1992 without including a claim for lisinopril.
[47] Secondly, Merck and Astra point to a number of cases where the Courts have been unwilling to invalidate a patent based on non-compliance with patent prosecution procedures prior to the date of patent issuance where the Commissioner has not objected to the procedures employed: (see Fada Radio Ltd. v. Canadian General Electric Co. Limited, [1927] S.C.R. 520; Aventis Pharma Inc. v. Apotex Inc., 2005 FC 1283 (T.D.) at paragraph 353, aff’d 2006 FCA 64, leave to appeal denied [2006] S.C.C.A. No. 136; Beecham Canada Ltd. v. Procter & Gamble Co. (1982), 61 C.P.R. (2d) 1 (F.C.A.)).
[48] Thirdly, Apotex has not advanced any case law showing that the consequence of an improper divisional is for that reason alone, a loss of patent rights. Apotex referred to the case GlaxoSmithKline Inc. v. Apotex Inc., 2003 FCT 687, where Kelen J. found the patent at issue was an improper divisional because it did not disclose an invention different from that in the parent application. Kelen J. evidently did not consider an improper divisional alone to be enough to
invalidate the patent. Rather, he found the patent at issue void because it disclosed the same invention as the parent and therefore was invalid by virtue of double patenting. That decision is of no assistance in the present appeal.
[49] From a global perspective, when considering the harm that may result from an improper divisional, it becomes clear that the principle of double patenting provides a sufficient remedy. The harm is that two patents might issue for the same invention, giving the patentee differing monopolies. Where, as in the present case, the various divisional applications and the parent have no overlapping claims, there is no risk that a patentee will be able to extend its patent monopoly by having two patents for the same invention.
[50] In summary, Hughes J. correctly held that an improper divisional of a patent does not, in the absence of double patenting, give rise to a loss of patent rights. I would further only note that Apotex did not appeal the Judge’s rejection of their double patenting argument and that issue is not before this panel.
Issue 3: Did the Judge improperly err by ignoring extrinsic evidence?
[51] Hughes J. rejected Apotex’s argument that he should consider extrinsic evidence, including communications surrounding foreign patent prosecutions and statements of Merck’s inventors, when construing the patents. He rejected the argument primarily on the basis that the general rule is that extrinsic evidence is inadmissible for the purpose of construing a patent specification.
[52] Apotex urges this Court to conclude that only one invention was disclosed by the ‘340 application by reference to statements made by Merck inventors and its internal documents. In my view these documents should have no bearing on this Court’s decision.
[53] As Hughes J. noted, in Nekoosa Packaging Corp. v. AMCA International Ltd. (1994), 56 C.P.R. (3d) 470 at 480, Robertson J.A. held that the general rule is that extrinsic evidence is inadmissible for the purpose of construing a patent specification and this must necessarily extend to the testimony of the inventor pertaining to the proper construction of the specification. Similarly, statements made by the patentee during the course of patent prosecution are not to be considered because the scope of the invention should be determined by reference to the patent itself (P.L.G. Research Ltd. v. Jannock Steel Fabricating Co. (1991), 35 C.P.R. (3d) 346 (F.C.T.D.), aff’d 41 C.P.R. (3d) 492 (F.C.A.)).
Issue 4: Is Section 28 of the Act relevant in the present appeal?
[54] Apotex argues that Merck’s claim for priority under section 28 of the Act from the earlier United States patent application constrains what could properly be claimed in the ‘340 application. Section 28 states that an applicant can claim priority from an earlier foreign application provided the Canadian and foreign application are for the same invention. Boehringer and Hoechst direct that the ‘340 application disclosed more than one invention because it separately claimed a class of Formula I-bearing compounds and several individual compounds.
[55] Contrary to Apotex’s assertion, where a Canadian application contains material relating to subject-matter invented after the priority date, that subject-matter cannot benefit from that date. Such a defect in the priority claim will not invalidate the entire patent, but will simply result in the application bearing the Canadian filing date (see Refrigerating Equipment Ltd. v. Drummond, [1930] Ex. C.R. 154; Canadian Marconi Co. v. Vera Prinzen Enterprises Ltd. (1964), 46 C.P.R. 97 (Ex. Ct.)).
[56] As Hughes J. notes, all that a claim to priority does is to enable an applicant to claim an earlier date of filing or a notional date of invention if that became an issue. In the present appeal, there was no issue of anticipation by reason of intervening prior art between the priority date and the filing of the Canadian application. Therefore, the priority date was not at issue and cannot govern whether the parent ‘340 application disclosed one or more inventions.
Issue 5: Did Merck wilfully delay the prosecution of the ‘350 Patent?
[57] While the United States patent took less than five years to issue, the ‘350 Patent took almost twelve years from the filing of the original United States application, from which the ‘350 Patent claimed priority. Nevertheless, Hughes J. rejected the argument that the delay in issuing the ‘350 Patent was wilful. Importantly, he found that no evidence was tendered to show that the delay was unduly long or short. He also found that the longest delay in patent prosecution originated from the Patent Office, not Merck. Further, he refused to draw any inference from the evidence adduced by Apotex regarding lobbying for and against the abolition of the compulsory licencing scheme in Canada.
[58] I do not think this Court should interfere with Hughes J.’s reasons on this issue, as they are grounded in his analysis of the evidence before him and are a matter of considerable discretion. While Apotex lists a number of factors that might suggest that Merck did, in fact, delay prosecution of the ‘350 patent, in my opinion, Apotex has not succeeded in showing that Hughes J. made any palpable and overriding errors in concluding that there was no evidence of delay in the prosecution of the patent.
[59] In addition, Apotex did not point to any Canadian case law in which a patent was invalidated by reason of prosecution delay. Prosecution delay is an American concept that Apotex seeks to import into our Canadian jurisprudence. In my view, given that no underlying delay was shown in this case, this is not an appropriate case in which to consider whether this concept should be adopted in Canada.
Issue 6: Are the principles of cause of action estoppel or issue estoppel relevant in the present appeal?
[60] In their fifth amended reply and defence to counterclaim, Merck and Astra plead that Apotex was precluded on the principles of estoppel and/or abuse or process from introducing invalidity allegations that were raised or could have been raised in the Enalapril Litigation concerning the ‘349 Patent (supra at paragraph 19). Hughes J. agreed with the plaintiffs and held Apotex’s invalidity allegations to be precluded by reason of estoppel.
[61] Res judicata has two branches, cause of action estoppel and issue estoppel. Abuse of process is a separate, but related doctrine. Hughes J. did not specify the type of estoppel on which he based his decision and consequently, Apotex’s argument on appeal is that he erred in both invoking and then applying a hybrid, conflated, and legally unknown form of estoppel.
[62] Cause of action estoppel bars a party from alleging a cause of action against another if the same cause of action has already been determined by a court of competent jurisdiction (see Angle v. Canada (Minister of National Revenue), [1975] 2 S.C.R. 248). Issue estoppel, on the other hand, arises where the proceeding concerns a different cause of action, but some of the issues raised have already been decided in an earlier proceeding. In Danyluk v. Ainsworth Technologies Inc., [2001] 2 S.C.R. 460 at paragraph 25 (hereafter Danyluk), the Supreme Court of Canada found that there are three preconditions to the operation of issue estoppel: that the same question has been decided; that the judicial decision which is said to create the estoppel was final; and that the parties to the judicial decision or their privies were the same persons as the parties to the proceedings in which the estoppel is raised or their privies.
[63] Counsel for Astra conceded in oral argument that cause of action estoppel could only apply if this Court found that the ‘340 application disclosed only one invention. Since I have already found that the ‘340 application discloses more than one invention, namely the class of compounds and each of lisinopril, enalapril, and enalaprilat separately, cause of action estoppel is not applicable to the present appeal.
[64] Similarly, I am satisfied that the grounds for issue estoppel have not been met. In his judgment, Hughes J. stated that the addition of Astra in this action as a licencee under the ‘350 Patent is irrelevant. With respect, I disagree. It is relevant to consider whether Astra was a privy of Merck so as to satisfy the third requirement of issue estoppel. Privies were defined by Binnie J. in Danyluk as somewhat elastic and that each determination should be made on a case by case basis.
[65] Astra is a licencee under the ‘350 patent. It therefore follows that since the ‘340 application discloses more than one invention, Astra did not have a participatory interest in the Enalapril Litigation so as to be considered a privy of Merck. Therefore, I find that issue estoppel should not have been applied to bar Apotex from asserting its invalidity defences.
[66] It follows from the foregoing analysis that Hughes J. erred when he determined that a valid “estoppel” existed in this case.
Issue 7: Is an injunction an appropriate remedy in the present case?
[67] The Judge granted Merck and Astra an injunction enjoining Apotex from making, using and selling lisinopril products until the expiry of the ‘350 Patent. With respect to any lisinopril products in Apotex’s possession at the time the injunction took effect, Apotex could either deliver the material up to Merck and Astra or retain the material, with an accounting for sales and hold any money received for such material in a separate trust fund. Apotex asserts that Hughes J. erred in law by awarding an injunction automatically, without proper consideration of relevant factors.
[68] The decision to award an injunction is a discretionary one entitled to considerable deference by this Court. I do not think Apotex has succeeded in showing that the Judge’s exercise of that discretion warrants our interference. Apotex has provided little guidance as to the factors that should have been considered. Moreover, while Hughes J. does not specifically explain his reasons for awarding an injunction in great detail, the care with which he outlined the remedies section of his reasons militates against a finding that he did not adequately consider all relevant factors in awarding the injunction. In particular, the fact that he granted Apotex a thirty day grace period before the injunction would take effect shows he did not award the injunction automatically and without considerable thought.
[69] Moreover, in my analysis, an injunction in this case is an appropriate remedy. Not only did the Judge determine that the ‘350 patent was valid, but Apotex admitted infringement. Section 44 of the Act grants Merck the exclusive right to make, construct, use and sell its invention and clearly an injunction preventing Apotex from selling lisinopril until the expiry of the patent is necessary to protect Merck’s rights.
Issue 8: Are there any statutory or common law exemptions available to Apotex?
[70] For ease of reference I would propose to deal with each of the exemptions claimed by Apotex under separate headings.
Section 56 – Material acquired before ‘350 Patent issued
[71] Section 56 of the Act provides that:
56(1) Every person who, before the issuing of a patent, has purchased, constructed or acquired any invention for which a patent is afterwards obtained under this Act has the right to use and sell to others the specific article, machine, manufacture or composition of matter patented and so purchased, constructed or acquired before the issue of the patent therefore, without being liable to the patentee or his legal representatives for so doing, but the patent shall not, with respect to other persons, be held invalid by reason of that purchase, construction or acquisition or use of the invention by the person first mentioned, or by those to whom he has sold it, unless it was the application for a patent therefore, in consequence whereof the invention became public and available to public use.
56.(1) Toute personne qui, avant la délivrance d’un brevet, a acheté, exécuté ou acquis une invention pour laquelle un brevet est subséquemment obtenu sous l’autorité de la présente loi, a le droit d’utiliser et de vendre à d’autres l’article, la machine, l’objet manufacturé ou la composition, de matières, spécifique, breveté et ainsi acheté, exécuté ou acquis avant la délivrance du brevet s’y rapportant sans encourir de ce chef aucune responsabilité envers le breveté ou ses représentants légaux. Toutefois, à l’égard des tiers le brevet ne peut être considéré comme invalide du fait de cet achat, de cette exécution ou acquisition ou utilisation de l’invention par la personne en premier lieu mentionnée ou par des personnes auxquelles elle l’a vendue, à moins que cette invention n’ait été achetée, exécutée, acquise ou utilisée durant une période de plus de deux ans avant la demande d’un brevet portant sur cette invention, en conséquence de quoi l’invention est devenue publique et disponible pour l’usage du public.
[72] Merck and Astra agreed that some lots of lisinopril were acquired by Apotex before October 16, 1990, the date the ‘350 Patent was issued and were therefore exempt from infringement by virtue of section 56. However, in contention were three lots, lot numbers P65485, P65510 and P65557 (the Delmar Batches), which were manufactured in Canada by Delmar but whose manufacture into lisinopril had not been completed before they were acquired by Apotex. Hughes J. found that with respect to these lots, Apotex was not exempt:
While lisinopril as a molecule came into existence somewhere wi