Judgments

Decision Information

Decision Content

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.