Digests

Eli Lilly and Co. v. Apotex Inc.

T-1100-97

2002 FCT 1007, Aronovitch J.

26/9/02

15 pp.

Motion seeking addition of Novopharm Limited (Novopharm) as defendant by counterclaim and amendments to statement of defence and counterclaim--Amendments sought including allegations of breach of contract, interference with defendant's economic interests in aid of alleged conspiracy by plaintiff and Novopharm to lessen competition --Issue whether allegations proper in defence and by way of counterclaim--Plaintiff granted patent for nizatidine in 1984 --Novopharm held compulsory licence from plaintiff for nizatidine under Patent Act, s. 39(4)--Anticipating abolition of compulsory licencing regime, plaintiff and Novopharm entered supply agreement (Supply Agreement) in 1992, stating if one party caught unlicenced under new regime, other party to sell, supply nizatidine to other--Defendant seeking Notice of Compliance (NOC), served Notice of Allegation in 1993, claiming relevant patents not infringed, as proposing to obtain nizatidine from Novopharm--Plaintiff opposing grant of NOC on basis Novopharm granted unlawful sub-licence to defendant, such that defendant could not obtain nizatidine from Novopharm without infringing patent--Novopharm also sought NOC for nizatidine relying on own licence--Plaintiff commencing proceeding in opposition under Regulations claiming Supply Agreement unlawful sub-licence--Eli Lilly & Co. v. Novopharm Ltd., [1998] 2 S.C.R. 129 holding Supply Agreement not constituting sub-licence--Plaintiff commencing within action in May 1997--Following Supreme Court decision, defendant seeking leave to amend pleadings to include licence as defence and sought enforcement of Supply Agreement against Novopharm--Novopharm complying-- Arrangements allegedly made between plaintiff and Novopharm impeding defendant's access to nizatidine at issue--Principles applicable to amendments well-settled at law--Leave granted to amend pleading at any time, provided amendments not giving rise to prejudice that cannot be compensated by costs--Amendment subject to same test as motion to strike--Amendment not denied unless Court satisfied proposed pleading manifestly futile and without any chance of success--Onerous burden of proof lying with opposing party--For purposes of determining if plain and obvious pleading not disclosing basis for defence or counterclaim facts alleged, unless wholly improbable, presumed true--Court taking broad and generous approach to interpreting pleadings; not determining contested facts or law; and giving wide berth to novel, untested or unsettled pleadings--Amendments opposed on basis cause of action statute-barred by Competition Act, s. 35(4)--Limitation by periods not ordinarily basis for striking pleading but to be pleaded as defence--Defendant's pleadings not demonstrating damages and evidence presented by plaintiff at odds with amendments sought--Defendant's pleadings should be pleaded as defences; matter for determination by trial judge on evidence--Plaintiffs arguing that utilization of intellectual property rights not amounting to undue restriction or lessening of competition so no claim in law--Procter & Gamble Co. v. Kimberley-Clark of Canada Ltd. (1990), 29 C.P.R. (3d) 545 (F.C.A.) not standing for proposition allegations of breaches of Competition Act cannot be maintained and have no place in patent infringement claims--Requirement of direct link or nexus established-- Amendment allowed--Under Federal Court Rules, 1998 any independent cause of action sustainable as counterclaim if capable of joinder with main action--Sufficient facts alleged to found claim for breach of Competition Act--Leave of Court not required to join defendant to counterclaim under r. 191(1), but r. 191(2)(b) requiring defence and counterclaim served within 30 days after issue--Defendant seeking extension of time or order for joinder of parties under r. 104--Defendant recently learning of additional material facts, delay in service explained and justified--Novopharm necessary party--Facts relating to Supply Agreement and alleged conspiracy to breach Agreement not pleaded for purpose of enforcing contract but to support allegations of non-infringement--Incidental to patent infringement, to impugn conduct, to provide factual basis and within jurisdiction of Court--Competition Act, R.S.C. 1985, c. C-34, s. 35(4)--Patent Act, R.S.C., 1985, c. P-4, s. 39(4)--Federal Court Rules, 1998, SOR/98-106, rr. 104, 191(1), 191(2)(b).