Apotex Inc. v. Eli Lilly and Co.
A-82-95
MacGuigan J.A., Pratte J.A. dissenting
1/4/96
21 pp.
Appeal from Trial Division's finding agreement between Novopharm and Apotex supply agreement and not illegal sublicence-Purpose of agreement to circumvent new law eliminating regime of compulsory licences as long as possible and to share parties' rights under licences to ensure both have use of licences on maximum number of products-Agreement providing Novopharm would import material from source, in quantity and on terms directed by Apotex-Further agreed Novopharm would resell imported goods to Apotex at cost plus 4% royalties payable under licence-Oral evidence of parties at trial showing parties intended to enter into supply agreement-All oral evidence on intention being excluded under parol evidence rule and meaning of agreement determined from text-Trial Judge finding agreement "supply agreement dressed up to look like a sublicence"-On authority of Consolidated-Bathurst Export Ltd. v. Mutual Boiler & Machinery Ins. Co., [1980] 1 S.C.R. 888, Court holding interpretation promoting "sensible commercial result"-Appeal allowed (Pratte J.A. dissenting)-No contractual arrangement between Apotex and suppliers in form but in reality Apotex directing mind-Apotex did all bargaining and called on Novopharm to fulfil formalities only-Illegal sublicence dressed up to look like supply agreement-As to sensible commercial result, Consolidated-Bathurst allowing this only tertiary status in constructing contract after plain meaning of words and contra proferentem-Per Pratte J.A. (dissenting): intention of parties clear from text-Does not provide for granting of sublicences-Sham not proved by merely showing parties could have obtained same advantages by entering into different agreement-On issue of patent infringement, once patentee sells patented article, transfers ownership to purchaser and purchaser may do what he likes with article without fear of infringement-Same principle applying to licensee authorized under licence to sell without restrictions.