A-16-89 
Apotex, Inc. (Appellant) (Defendant) 
v. 
Imperial Chemical Industries PLC and I.C.I. 
Pharma, Division Atkemix Inc. (Respondents) 
(Plaintiffs) 
INDEXED AS: IMPERIAL CHEMICAL INDUSTRIES PLC v. 
APOTEX, INC. (CA.) 
Court of Appeal, Heald, Mahoney and Stone 
JJ.A.—Ottawa, September 13 and October 24, 
1989. 
Patents — Infringement — Pharmaceutical products'— 
Appeal from grant of interlocutory injunction prohibiting sale 
in Canada of drug imported under interim licence prior to 
coming into force of legislative amendments limiting rights 
under compulsory licence to import medicine "in the prepara
tion or production of which the invention has been used, if the 
medicine is for sale for consumption in Canada" — Whether 
interpretation of Patent Act, s. 39.11(1)(a) serious issue to be 
tried — Appeal allowed — Irreparable harm not shown as 
plaintiffs adequately compensated by award of damages. 
Injunctions — Appeal from grant of interlocutory injunction 
for infringement of pharmaceutical patent — Whether con
struction of Patent Act, s. 39.11(1)(a) serious issue to be tried 
— No irreparable harm as plaintiffs adequately compensated 
by award of damages. 
This was an appeal from the grant of an interlocutory 
injunction preventing Apotex Inc. from importing for sale for 
consumption in Canada the drug atenolol, which was the 
subject of a patent belonging to the respondent, Imperial 
Chemical Industries PLC. Apotex imported into Canada 1,050 
kg of atenolol under an interim licence prior to the coming into 
force of amendments to the Patent Act (December 7, 1987), 
which prohibited the exercise of rights under a compulsory 
licence "to import the medicine in the preparation or produc
tion of which the invention has been used, if the medicine is for 
sale for consumption in Canada". A compulsory licence and 
notice of compliance were issued to Apotex shortly thereafter. 
The issues were whether the Trial Judge erred in finding that 
there was a serious issue to be tried, irreparable harm not 
compensable in damages, and that the balance of convenience 
favoured the respondents. 
Held, the appeal should be allowed. The interlocutory injunc
tion should be varied to exclude from its application the use and 
sale of the atenolol imported before December 7, 1987. 
Per Heald J.A.: This application contained both "conflicts of 
evidence on affidavit" and "difficult questions of law". There 
was a serious issue to be tried, as indicated by the disagreement 
between the Trial and Appeal Judges as to the proper interpre
tation of paragraph 39.11(1)(a) and the considerable time 
which the parties themselves devoted to the matter. However, 
the respondents did not establish that they would suffer irrepa
rable harm as they could be adequately compensated by an 
award of damages. The Trial Judge found that although lost 
sales to the plaintiffs due to the injunction were quantifiable 
and compensable in damages, the loss of market position 
allowing it to establish reputation and goodwill in the market 
place was not compensable in damages. He concluded that the 
plaintiffs might well suffer irreparable harm. The evidence as 
to irreparable harm was not clear and likely accounts for the 
Trial Judge's use of such a speculative expression. The appel
lant agreed to keep an accounting of all sales of its atenolol and 
there was no suggestion that the appellant would not be finan
cially able to pay any damages awarded. 
Per Mahoney J.A.: The Trial Judge erred in his interpreta
tion of paragraph 39.11(1)(a), which is not ambiguous. It 
prohibits only importation. It has no retrospective application 
to importations prior to it coming into force and it does not 
prohibit the exercise of rights under a compulsory licence. The 
construction of paragraph 39.11(1)(a) as it applied to the facts 
did not present a difficult question of law. Since there was no 
serious issue to be tried, it was unnecessary to address other 
considerations, such as irreparable harm and balance of 
convenience. 
Per Stone J.A.: In their American Cyanamid decision, the 
House of Lords intended to shift the emphasis from the thresh
old test — a (strong) prima facie case — to a search for the 
balance of convenience. While there were still interlocutory 
injunction applications which could fail at the threshold as 
untenable on the basis of statutory construction, this was not 
one such case. In any event, the issue here was not merely one 
of construction in that certain of the facts were not agreed 
upon. The trial judge will be better able to interpret the statute 
having heard the evidence and submissions. 
STATUTES AND REGULATIONS JUDICIALLY 
CONSIDERED 
Canadian Bill of Rights, R.S.C. 1970, Appendix III. 
Canadian Charter of Rights and Freedoms, being Part I 
of the Constitution Act, 1982, Schedule B, Canada Act 
1982, 1982, c. 11 (U.K.). 
Patent Act, R.S.C., 1985, c. P-4, ss. 39, 39.11 (as enacted 
by R.S.C., 1985 (3rd Supp.), c. 33, s. 15). 
CASES JUDICIALLY CONSIDERED 
APPLIED: 
Turbo Resources Ltd. v. Petro Canada Inc., [1989] 2 
F.C. 451; 24 C.P.R. (3d) 1 (C.A.); American Cyanamid 
Co. v Ethicon Ltd., [1975] A.C. 396 (H.L.). 
REVERSED: 
Imperial Chemical Industries PLC v. Apotex Inc., 
[1989]2 F.C. 608; 23 C.P.R. (3d) 1 (T.D.). 
REFERRED TO: 
Cutter Ltd. v. Baxter Travenol Laboratories of Canada, 
Ltd. et al. (1980), 47 C.P.R. (2d) 53 ( F.C.A.); Smith v 
Inner London Education Authority, [1978] 1 All ER 411 
(C.A.); Hadmor Productions Ltd. v. Hamilton, [1983] 1 
A.C. 191 (H.L.); Garden Cottage Foods Ltd. v. Milk 
Marketing Board, [1984] A.C. 130 (H.L.). 
COUNSEL: 
Malcolm Johnston, Q.C. and Harry B. 
Radomski for appellant (defendant). 
James D. Kokonis, Q.C. and Gunars Gaikis 
for respondents (plaintiffs). 
SOLICITORS: 
Malcolm Johnston & Associates, Toronto, for 
appellant (defendant). 
Smart & Biggar, Ottawa, for respondents 
(plaintiffs). 
The following are the reasons for judgment 
rendered in English by 
HEALD J.A.: I have had an opportunity to con
sider the reasons for judgment in draft form pre
pared by my brother, Mahoney J.A. herein. I 
agree with him that the appeal should be allowed 
with costs and that the interlocutory injunction 
granted on January 12, 1989 [[1989] 2 F.C. 608; 
23 C.P.R. (3d) 1], should be varied to exclude 
from its application the use and sale of the 1,050 
kg of atenolol imported into Canada before 
December 7, 1987. However, since I reach this 
conclusion on different grounds than those relied 
upon by Mr. Justice Mahoney, I would like to 
explain the basis upon which I would allow the 
appeal. 
The relevant facts are sufficiently and accurate
ly summarized in the reasons of Mr. Justice 
Mahoney. The main issue argued on the appeal 
was whether the learned Motions Judge erred in 
granting an interlocutory injunction and, in so 
doing, finding that the respondents had: 
(i) met the threshold test as to the strength of 
their case; 
(ii) demonstrated irreparable harm not compen-
sable in damages; and 
(iii) demonstrated that the balance of conve
nience favoured the respondents rather than the 
appellant.' 
It was the view of my brother, Mahoney J.A. [at 
page 14] that the only issue in the appeal was 
... whether Apotex is entitled under the compulsory licence 
issued February 15, 1988, to use and sell in Canada the 1,050 
kg of atenolol imported under the interim licence before 
December 7, 1987. 
He went on to explain that the proper determina
tion of this issue depends upon the construction to 
be put on paragraphs 39.11(1)(a) and (2)(b) of 
the Patent Act, R.S.C., 1985, c. P-4 [as enacted by 
R.S.C., 1985 (3rd Supp.), c. 33, s. 15]. Those 
paragraphs read as follows: 
39.11 (1) Subject to this section but notwithstanding any
thing in section 39 or in any licence granted under that section, 
no person shall under a licence granted under that section in 
respect of a patent for an invention pertaining to a medicine, 
regardless of when the licence was granted, have or exercise 
any right, 
(a) where the invention is a process, to import the medicine 
in the preparation or production of which the invention has 
been used, if the medicine is for sale for consumption in 
Canada; or 
(2) The prohibition under subsection (1) expires in respect 
of a medicine 
(b) eight years after the date of the notice of compliance 
that is first issued in respect of the medicine, where, on June 
27, 1986, the notice of compliance has been so issued and 
neither a licence under section 39 has been granted in respect 
of the medicine nor a notice of compliance has been issued in 
respect of the medicine to a person other than the patentee; 
and 
' The appellant advised the Court that it would not be raising 
in the appeal the constitutional validity of the amendments to 
the Patent Act or the matter of infringement of the Canadian 
Charter of Rights and Freedoms [being Part I of the Constitu
tion Act, 1982, Schedule B, Canada Act 1982, 1982, c. 11 
(U.K.)] or the Canadian Bill of Rights [R.S.C. 1970, Appen
dix Ill]. These were matters which were raised in extenso in 
the Appellant's Memorandum of Fact and Law. The memoran
dum also raised the question as to the jurisdiction of this Court 
to adjudicate the lis at bar. This matter was not raised in oral 
argument by counsel for the appellant. 
The learned Motions Judge expressed the view (at 
pages 625 F.C.; 15 C.P.R.) that the effect of 
paragraph 39.11(1) (a) was to preclude the sale for 
consumption in Canada of medicine made from 
imported drugs whenever such importation took 
place. My brother, Mahoney J.A. disagreed [at 
page 15] with this interpretation. In his view that 
paragraph: 
... is not open to the interpretation the learned Trial Judge has 
given it. The provision prohibits the exercise of rights under a 
compulsory licence "to import the medicine in the preparation 
or production of which the invention has been used, if the 
medicine is for sale for consumption in Canada". It prohibits 
only importation. It has no retrospective application to importa
tions prior to it coming into force and it does not prohibit the 
exercise of rights under a compulsory licence other than the 
right to import. 
Accordingly, and relying on this Court's judgment 
in Turbo Resources Ltd. v. Petro Canada Inc., 
[1989] 2 F.C. 451; 24 C.P.R. (3d) 1, Mr. Justice 
Mahoney held that the other considerations to be 
taken into account (such as irreparable harm and 
balance of convenience) in deciding whether or not 
to issue an interlocutory injunction are only rele
vant in cases where there is a serious issue to be 
tried. Since, in his opinion, there was no serious 
issue to be tried in this case, it was not necessary 
to address those other issues. 
With deference, I do not share the view 
expressed by my brother Mahoney J.A. that there 
is not a serious issue to be tried in the circum
stances of the case at bar.' All that is required at 
this juncture, is that the Court be satisfied that: 
"the claim is not frivolous or vexatious; in other 
words, that there is a serious question to be 
tried."' I agree particularly with the statement by 
Lord Diplock (page 407) that: 
It is no part of the court's function at this stage of the 
litigation to try to resolve conflicts of evidence on affidavit as to 
facts on which the claims of either party may ultimately depend 
nor to decide difficult questions of law which call for detailed 
argument and mature considerations. These are matters to be 
dealt with at the trial. 
2 In the Turbo Resources decision, this Court held that, 
generally speaking, the threshold test established by Lord 
Diplock in American Cyanamid Co. y Ethicon Ltd, [1975] 
A.C. 396 (H.L.), was the appropriate test. 
3 Per Lord Diplock in American Cyanamid, at p. 407. 
In my view, this application for interlocutory 
injunctive relief contains both "conflicts of evi
dence on affidavit" and "difficult questions of 
law". It is noted that, based on the memoranda of 
fact and law filed by the parties on this appeal, 
there are conflicts on the affidavit evidence as 
between the parties. I say this because portions of 
the Laskin affidavit and the cross-examination 
thereon and the undertakings given thereunder, as 
well as portions of the Sherman affidavit, have 
been put in issue (see, paragraphs 14, 15, 16, 19, 
21 and 26 of the appellant's memorandum of fact 
and law, which' were not admitted by the respon
dents.) Furthermore, I think the application raises 
"difficult questions of law" as well. The learned 
Motions Judge put the argument advanced on 
behalf of the respondents clearly and succinctly as 
follows at pages 625 F.C.; 15 C.P.R. of his 
reasons: 
It is impossible, having regard to the clear language and intent 
of the legislation to read the words "import" and "sale" 
disconjunctively [sic] as suggested by the defendant. My read
ing of the legislation leads me to suspect that the defendant 
may continue to import Atenolol and to enlarge its inventory of 
the medicine if it so desires. But it may not, until 1991, offer 
the medicine for sale for consumption in Canada because of the 
limited monopoly the plaintiffs enjoy as a result of the amend
ments to s. 41.11 of the Patent Act (now R.S.C., 1985, c. P-4, s. 
39.11). 
On the other hand, my brother Mahoney J.A. in 
the portion of his reasons quoted supra, reaches 
the opposite conclusion. At the hearing of the 
appeal, the appellant devoted some eight para
graphs of its memorandum to the interpretation of 
this particular section. The respondents replied 
with equally detailed submissions. This problem of 
statutory interpretation occupied considerable time 
at the hearing of the appeal as well. In my view, 
the matter is fairly arguable and, accordingly, I 
refrain from expressing any concluded view there
on. For these reasons, I have no difficulty in 
concluding that the serious issue threshold test has 
been met in the circumstances of this case. 
My brother Stone J.A. in the Turbo Resources 
case has accurately depicted the situation after the 
threshold test has been satisfied. At pages 467 
F.C.; 14 C.P.R. he said: 
Satisfying the threshold test of "a serious question to be tried" 
does no more, so to speak, than unlatch the door to a plaintiff; 
it neither opens it nor, less still, permits him to pass on through. 
After proceeding to quote what Lord Diplock had 
to say about the other factors which have to be 
weighed in the event a Trial Judge concludes that 
there exists a serious question to be tried in the 
sense that it was neither frivolous, nor vexatious, 
Mr. Justice Stone proceeds to analyze the main 
features of the factors discussed by Lord Diplock 
in American Cyanamid. His analysis reads as fol
lows (pages 473-474 F.C.; 19-20 C.P.R.): 
(a) Where a plaintiffs recoverable damages resulting in the 
continuance of the defendant's activities pending trial 
would be an adequate remedy that the defendant would be 
financially able to pay, an interlocutory injunction should 
not normally be granted; 
(b) where such damages would not provide the plaintiff an 
adequate remedy but damages (recoverable under the 
plaintiffs undertaking) would provide the defendant with 
such remedy for the restriction of his activities, there 
would be no ground for refusing an interlocutory 
injunction; 
(c) where doubt exists as to the adequacy of these remedies in 
damages available to either party, regard should be had to 
where the balance of convenience lies; 
(d) where other factors appear to be evenly balanced, it is 
prudent to take such measures as will preserve the status 
quo; 
(e) where the evidence on the application is such as to show 
one party's case to be disproportionately stronger than the 
others, this factor may be permitted to tip the balance of 
convenience in that party's favour provided the uncompen-
satable disadvantage to each party would not differ widely; 
(g) (sic) other unspecified special factors may possibly be 
considered in the particular circumstances of individual 
cases. 
In my view, having regard to all the relevant 
circumstances in the instant case, the respondents 
have not established that they will suffer irrepa
rable harm. I think the record herein shows that 
the respondents can be adequately compensated by 
an award of damages for any recoverable loss 
sustained because the appellants offered for sale 
for consumption in Canada the 1,050 kg's of 
atenolol imported under the interim licence prior 
to December 7, 1987. The learned Motions Judge 
addressed the issue of irreparable harm as follows 
(at pages 631-632 F.C.; 20-21 C.P.R.): 
In the case at bar, the sales of Atenolol represent the plaintiff 
ICI Pharma's source of income. Allowing the defendant to 
exercise its right under the compulsory licence will diminish 
these sales by as much as fifty percent. Although those lost 
sales may be quantifiable and compensable in damages, what 
cannot be compensated is the plaintiffs' loss of market position 
which will allow it to establish its reputation and goodwill in 
the market place. It is my view that the plaintiffs might well 
suffer irreparable harm if the defendant is permitted to com
mence selling Atenolol in the Canadian market. [Emphasis 
added.] 
It is thus clear that the learned Motions Judge 
made two findings in respect of this issue: 
(a) any lost sales to the plaintiffs due to the 
injunction are quantifiable and compensable in 
damages; and 
(b) the plaintiffs' loss of market position allow
ing it to establish reputation and goodwill in the 
market place is not compensable in damages 
and, as a consequence, the plaintiffs might well 
suffer irreparable harm. 
It is my opinion that since the Motions Judge 
found that damages due to lost sales were quantifi-
able and compensable, there remained to be con
sidered only the matter of loss of market position. 
The learned Motions Judge did not make a specif
ic finding that the plaintiffs would suffer irrepa
rable harm because of loss of its market position. 
He used the tentative expression "might well". 
The jurisprudence in this Court establishes that 
the evidence as to irreparable harm must be clear 
and not speculative. 4 In my view, the evidence 
before the learned Motions Judge does not satisfy 
this test and this likely accounts for the Motions 
Judge's use of such a speculative expression. It is 
not disputed that the price charged by the appel
lant for its atenolol was 21% to 25% lower than the 
price charged by the respondents for the atenolol 
sold by them. According to the affidavit of Mr. 
Sherman, the President and Operations Manager 
of the appellant, the appellant made a commit
ment to the various provincial Ministries of Health 
to supply its atenolol at prices lower than the 
prices charged by the respondents for their ateno-
Compare Cutter Ltd. v. Baxter Travenol Laboratories of 
Canada, Ltd. et al. (1980), 47 C.P.R. (2d) 53, at p. 57 per 
Thurlow C.J. 
lot. Thus, in the opinion of Mr. Sherman, if the 
appellant is unable to supply the provincial Minis
tries, there will be enormous increased cost to 
those Ministries in the administration of drug 
benefit programs which will result in increased 
cost to the consuming public as well as inconve
nience to the pharmacists involved. In so far as the 
mathematical evidence is concerned, it does not 
assist the respondents either. Far from demonstrat
ing irreparable harm to the respondents, it merely 
demonstrates a loss of sales somewhere in the 
realm of some 16% based on the respondent's 
reported sales in 1988 and their projected sales in 
1989. In any event, such losses are calculable and 
thus compensable by an award of damages. 
I referred earlier to the Cutter case. In that 
case, Chief Justice Thurlow (as he then was) said 
(pages 55 and 56): 
In this Court the grant of an interlocutory injunction in a 
patent infringement action is not a common occurrence in most 
instances, the result of an application for an interlocutory 
injunction, where infringement and validity are in issue, is that 
the defendant gives a satisfactory undertaking to keep an 
account and upon that being done the application is dismissed 
with costs in the cause. The same practice has been followed in 
industrial design actions and was the ultimate result of the 
application in Lido Industrial Products Ltd. v. Melnor Mfg. 
Ltd. et al. (1968), 55 C.P.R. 171, 69 D.L.R. (2d) 256, [1968] 
S.C.R. 769. The principal reason for this practice is, in my 
opinion, the fact that in most instances the nature of the patent 
rights involved is such that damages (provided there is some 
reasonably accurate way of measuring them) will be an ade
quate remedy for such infringement of the rights as may occur 
pending the trial and because when the matter turns on the 
balance of convenience if the defendant undertakes to keep an 
account and there is no reason to believe that he will be unable 
to pay such damages as may be awarded, the balance will 
generally be in favour of refusing the injunction. It is always 
necessary to bear in mind that the damages that can be caused 
to a defendant in being restrained, for a period that may run 
into several years, from doing what, if he succeeds, he was, but 
for the injunction, entitled to do in the meantime, may have 
consequences that are as serious for him as any that his 
infringement, if he does not succeed, may have for the patentee. 
In my view, those comments are particularly 
apposite to the case at bar. It is noted that Mr. 
Sherman gave an undertaking on behalf of the 
appellant "to keep an accounting of all sales of its 
Apo-Atenolol tablets up to and until any judgment 
that may be rendered in this cause or the action is 
otherwise disposed of". (See, Appeal Book Volume 
2, page 262, paragraph 35, affidavit of Bernard C. 
Sherman). 
Finally, returning to Mr. Justice Stone's anal
ysis supra of the American Cyanamid factors, I 
conclude, pursuant to paragraph (a) of that anal
ysis, that since damages would be an adequate 
remedy and since there is no suggestion that the 
appellant would not be financially able to pay any 
damages awarded, (which, by its undertaking it 
has agreed to pay) the interlocutory injunction 
should not have been granted. Accordingly, I 
would allow the appeal with costs in this Court. I 
would not disturb the award of costs to the 
respondents in the Trial Division since only a 
portion of the injunction granted by the Trial 
Division is being revoked on appeal. I would 
amend the order of the Trial Division dated Janu-
ary 12, 1989 by deleting paragraph 1 therefrom 
and substituting therefor the following: 
I. The Defendant shall be restrained and prohibited until 
March 10, 1991 from importing for sale for consumption in 
Canada Atenolol protected by Canadian Patent No. 945,172, 
provided that the Defendant be allowed to sell in Canada the 
balance of the 1050 kg of Atenolol imported by it prior to 
December 7, 1987, under Canada Customs document, Entry 
Nos. E484770 and K006686. 
In all other respects, I would confirm the order 
of the Trial Division. 
* * * 
The following are the reasons for judgment 
rendered in English by 
MAHONEY J.A.: This is an appeal from the 
grant of an interlocutory injunction by the Trial 
Division. It is concerned with Canadian patent no. 
945,172 for an invention relating to atenolol, the 
active ingredient of the heart medicine marketed 
in Canada under the trade name Tenormin by the 
respondent Atkemix, Inc. Atkemix Inc. is a wholly 
owned subsidiary of the respondent, Imperial 
Chemical Industries PLC, the patentee of the 
invention in issue. I.C.I. Pharma is a division of 
Atkenix Inc. and has no legal status independent 
of it. 
The following provisions of the Patent Act, 
R.S.C. 1985, c. P-4, apply to the transactions in 
issue. 
39.... 
(4) Where, in the case of any patent for an invention 
intended or capable of being used for medicine or for the 
preparation or production of medicine, an application is made 
by any person for a licence to do one or more of the following 
things as specified in the application, namely, 
(a) where the invention is a process, to use the invention for 
the preparation or production of medicine, import any medi
cine in the preparation or production of which the invention 
has been used or sell any medicine in the preparation or 
production of which the invention has been used, or 
(b) where the invention is other than a process, to import, 
make, use or sell the invention for medicine or for the 
preparation or production of medicine, 
the Commissioner shall grant to the applicant a licence to do 
the things specified in the application except such, if any, of 
those things in respect of which he sees good reason not to 
grant a licence. 
(6) Any time after the expiration of six months after the day 
on which a copy of an application to the Commissioner pursu
ant to subsection (4) is served on the patentee in prescribed 
manner, the applicant may, if the Commissioner has not finally 
disposed of the application, request the Commissioner to grant 
to him an interim licence to do such one or more of the things 
specified in the application as are specified in the request, and 
the Commissioner shall, on receipt of the request, forthwith 
serve on the patentee a notice stating that he may, within such 
period as is specified by the Commissioner in the notice, not 
exceeding twenty-one days from the day the notice is served on 
the patentee, make representations with respect to the request. 
39.11 (I) Subject to this section but notwithstanding any
thing in section 39 or in any licence granted under that section, 
no person shall under a licence granted under that section in 
respect of a patent for an invention pertaining to a medicine, 
regardless of when the licence was granted, have or exercise 
any right, 
(a) where the invention is a process, to import the medicine 
in the preparation or production of which the invention has 
been used, if the medicine is for sale for consumption in 
Canada; or 
(b) where the invention is other than a process, to import the 
invention for medicine or for the preparation or production of 
medicine, if the medicine is for sale for consumption in 
Canada. 
(2) The prohibition under subsection (1) expires in respect 
of a medicine 
(b) eight years after the date of the notice of compliance 
that is first issued in respect of the medicine, where, on June 
27, 1986, the notice of compliance has been so issued and 
neither a licence under section 39 has been granted in respect 
of the medicine nor a notice of compliance has been issued in 
respect of the medicine to a person other than the patentee; 
and 
Paragraphs 39.11(2)(a) and (c) refer respectively 
to cases where a compulsory licence had issued on 
or before June 27, 1986, and where the first notice 
of compliance had issued after that date. It is 
common ground that paragraph 39.11(2)(b) 
applies in the present circumstances. 
A chronology of the pertinent facts follows: 
April 9, 1974—Canadian patent no. 945,172 
issued. 
March 10, 1983—first notice of compliance 
issued to I.C.I. Pharma. 
December 5, 1985—Apotex applied for a notice 
of compliance. 
March 3, 1986—Apotex applied for a compulso
ry licence. 
June 27, 1986—Proposed amendments to the 
Patent Act announced. 
July 15, 1987—Interim licence, valid for six 
months, under subsection 39(6) issued to 
Apotex authorizing it "to import and sell 
medicine in the preparation or production of 
which the invention has been used and to 
import, use and sell the invention for medicine 
or for the preparation or production of medi
cine, the sale thereof not being restricted to 
Canada only," subject to terms and conditions 
compliance with which is not in issue. 
August-September, 1987—Apotex imported 
1,050 kg of atenolol into Canada. 
December 7, 1987—The amendments to the 
Patent Act including section 39.11 were pro
claimed in force. 
February 15, 1988—Compulsory licence issued 
to Apotex pursuant to paragraph 39(4)(a), 
authorizing it "to import, make, use and sell 
the medicine whose chemical or proper name 
is atenolol under [patent no. 945,172] owned 
by Imprial Chemical Industries PLC." 
June 30, 1988—Notice of compliance in respect 
of atenolol issued to Apotex. 
While other matters were raised before the 
learned Trial Judge, the only issue in this appeal is 
whether Apotex is entitled under the compulsory 
licence issued February 15, 1988, to use and sell in 
Canada the 1,050 kg of atenolol imported under 
the interim licence before December 7, 1987. The 
questions on appeal are whether he erred in his 
construction of section 39.11(1) and (2)(b) and, 
thereby, erred in law in concluding that there was 
a serious issue to be tried as to the 1,050 kg and, 
secondly, whether he erred in concluding that the 
respondents would suffer irreparable harm if the 
interlocutory injunction were not granted in terms 
that covered the 1,050 kg. In my view of this 
matter, it is not necessary to deal with the second 
issue. 
In his reported decision, ([1989] 2 F.C. 608 at 
page 625; 23 C.P.R. (3d) 1, at page 15), the 
learned Trial Judge summarily dismissed the argu
ment which, with respect, it seems to me must 
prevail. He said: 
The second argument put forward by the defendant, that the 
legislative amendments apply only to Atenolol imported into 
the country after December 7, 1987 is indeed a novel one, but 
cannot in my opinion, succeed. The defendant maintains that it 
is entitled to sell in Canada the Atenolol which it acquired prior 
to the effective date of the legislation. Paragraphs [39.11(1)(a) 
and (b)] clearly restrict the importation of Atenolol for sale for 
consumption in Canada regardless of when the medicine was 
imported into the country. It is impossible, having regard to the 
clear language and intent of the legislation to read the words 
"import" and "sale" disconjunctively [sic] as suggested by the 
defendant. My reading of the legislation leads me to suspect 
that the defendant may continue to import Atenolol and to 
enlarge its inventory of the medicine if it so desires. But it may 
not, until 1991, offer the medicine for sale for consumption in 
Canada because of the limited monopoly the plaintiffs enjoy as 
a result of the amendments to section [39.11] of the Patent Act. 
Paragraph 39.11(1)(a) is not ambiguous and, in 
my respectful opinion, it is not open to the inter
pretation the learned Trial Judge has given it. The 
provision prohibits the exercise of rights under a 
compulsory licence "to import the medicine in the 
preparation or production of which the invention 
has been used, if the medicine is for sale for 
consumption in Canada". It prohibits only impor
tation. It has no retrospective application to impor
tations prior to it coming into force and it does not 
prohibit the exercise of rights under a compulsory 
licence other than the right to import. 
This Court recently considered in great detail, in 
Turbo Resources Ltd. v. Petro Canada Inc., 
[1989] 2 F.C. 451; 24 C.P.R. (3d) 1, what is 
sometimes referred to as the American Cyanamid 
threshold test. Only if it is determined that there is 
a serious issue to be tried are other considerations 
to be taken into account in deciding whether or not 
an interlocutory injunction ought to issue. If it is 
found that there is no serious issue to be tried, the 
application fails at that point. 
The respondents rely particularly on the follow
ing dicta of Lord Diplock in American Cyanamid 
Co. y Ethicon Ltd., [1975] A.C. 396 (H.L.), at 
page 407: 
It is no part of the court's function at this stage of the 
litigation to try to resolve conflicts of evidence on affidavit as to 
facts on which the claims of either party may ultimately depend 
nor to decide difficult questions of law which call for detailed 
argument and mature considerations. These are matters to be 
dealt with at the trial. 
They say that, fairly read, that means that dif
ficult questions of law ought not be resolved on an 
interlocutory injunction application even where 
there is no issue as to the material facts. It follows, 
in their submission, that we ought not interfere 
with the learned Trial Judge's exercise of discre
tion based on his construction of paragraph 
39.11(1)(a). 
In my opinion, the construction of that provi
sion, as it applies to the undisputed facts here, 
presents no difficult question of law. I am content 
to rest my decision on that basis and to leave to 
another day the respondents' argument should a 
difficult question of law be in play. I must confess, 
however, to considerable doubt as to the validity of 
the proposition. If there is no issue as to relevant 
facts, why cannot detailed argument and mature 
consideration be as well directed to a difficult 
question of law on an interlocutory injunction 
application as after trial? A trial does not change 
the law; it establishes the facts and applies the law 
to them. 
I would allow the appeal with costs and vary the 
interlocutory injunction made January 12, 1989, to 
exclude from its application use and sale of the 
1,050 kg of atenolol imported into Canada before 
December 7, 1987. 
* * * 
The following are the reasons for judgment 
rendered in English by 
STONE J.A.: I have been able to read in draft 
the reasons for judgment proposed by both my 
colleagues, and desire to add only a few of my 
own. 
Without wishing to repeat what I had to say in 
Turbos about the importance of the House of 
Lords' decision in American Cyanamid 6 on this 
branch of the law, I would observe that their 
Lordships clearly intended to shift much of the 
emphasis away from the threshold test (theretofore 
regarded as a "prima facie" or "strong prima 
facie" case) to that of searching for the balance of 
convenience as between the parties. Formerly, 
many interlocutory injunction applications found
ered at the threshold. The new threshold test, 
being somewhat easier to satisfy, means that the 
decision to grant or refuse the relief sought will 
oftentimes depend upon a weighing up of the 
balance of convenience in the matter. An applicant 
who suffers no irreparable loss because damages 
would be an adequate remedy could not normally 
5 Turbo Resources Ltd. v. Petro Canada Inc., [ 1989] 2 F.C. 
451; 24 C.P.R. (3d) 1. 
6 American Cyanamid Co. y Ethicon Ltd., [1975] A.C. 396 
(H.L.). 
show that the balance of convenience lies with 
him. 
It is, of course, not too difficult to imagine cases 
being so utterly untenable as a matter of statutory 
construction that applications for interlocutory 
injunctive relief dependent upon that construction 
should fail at the threshold. However I have not 
been able to persuade myself that this is one of 
those cases. The statutory language at issue is not 
without some difficulty, but I agree that this Court 
could well answer the question of construction if it 
alone were at issue.' However, some of the facts 
are not agreed upon. It would therefore be proper 
to leave the matter for the trial judge who will be 
better positioned to interpret the statute in the 
light of all the evidence adduced and the submis
sions made. 
Like Mr. Justice Heald, I am also satisfied that 
the respondent would not suffer irreparable loss if 
injunctive relief did not go in the full terms of 
paragraph 1 of the judgment below. I agree with 
his reasoning for interfering with the exercise of 
the Motions Judge's discretion in this regard. It 
appears to fall well within the permissible bounds 
of interference by an appellate court in a case of 
this kind. 8 
I would therefore dispose of this appeal in the 
manner proposed by Mr. Justice Heald and for the 
reasons he gives. 
7 See e.g. Smith y Inner London Education Authority, 
[1978] 1 All ER 411 (C.A.) where it was found as a matter of 
statutory construction that the power of a public authority to 
act in a given way was unquestionably conferred by the lan
guage of the statute and, hence, that there was no "serious 
question" to be tried. 
8 See Hadmor Productions Ltd. v. Hamilton, [1983] 1 A.C. 
191 (H.L.), per Lord Diplock at p. 220; Garden Cottage Foods 
Ltd. v. Milk Marketing Board, [1984] A.C. 130 (H.L.), at p. 
137. 
 You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.