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T-1841-89
Searle Canada Inc. (Plaintiff)
v.
Novopharm Ltd. (Defendant)
INDEXED AS: SEARLE CANADA INC. V. NOVOPHARM LTD. (T.D.)
Trial Division, Strayer J.—Ottawa, September 19 and 24, 1990.
Trade marks Passing off Application to vary order dismissing application for interlocutory injunction restraining defendant from manufacturing, advertising and selling pills identical in shape and colour to plaintiffs and containing same active ingredients —, Relief under Trade-marks Act, s. 7(c) originally denied as no evidence pharmacists substituting defendant's pills for plaintiffs Affidavits filed in support of this motion describing instances of mislabelling of what may be, but was not proven to be, defendant's pills without any proven inducement or collusion by defendant Motion dis missed No new evidence defendant inciting or encouraging mislabelling Confusion measured by likelihood of mislead ing pharmacists and doctors, consumers of prescription drugs, as to source of particular drug Defendant not liable for pharmacists' deliberate mislabelling.
Practice Judgments and orders Reversal or variation
Order dismissing application for interlocutory injunction restraining defendant from manufacturing, advertising and selling pills identical in shape and colour to plaintiff's and containing same active ingredients Federal Court R. 1733 requiring new evidence, not discoverable with reasonable dili gence prior to original hearing, surfacing after original hearing
Must also show had evidence been available at time of hearing, would probably have altered order Original application for relief under Trade-marks Act, s. 7(c) dismissed as no evidence doctors or pharmacists confused as to source of pills Even if not available prior to original hearing, affida vits describing instances of mislabelling of what may be, but was not proven to be, defendant's pills without any proven inducement or collusion by defendant insufficient to alter order.
STATUTES AND REGULATIONS JUDICIALLY CONSIDERED
Federal Court Rules, C.R.C., c. 663, R. 1733.
Trade-marks Act, R.S.C., 1985, c. T-13, s. 7(b),(c).
CASES JUDICIALLY CONSIDERED
APPLIED:
Ayerst, McKenna & Harrison, Inc. v. Apotex Inc. (1983), 41 O.R. (2d) 366; 146 D.L.R. (3d) 93; 72 C.P.R. (2d) 57 (C.A.); Syntex Inc. v. Novopharm Ltd. et al. (1983), 74 C.P.R. (2d) 110 (Ont. H.C.); Smith, Kline & French Canada Ltd. v. Novopharm Ltd. (1983), 72 C.P.R. (2d) 197 (Ont. H.C.); Ciba-Geigy Canada Ltd. v. Novopharm Ltd. (1986), 12 C.P.R. (3d) 76 (Ont. H.C.).
NOT FOLLOWED:
Reddaway v. Banham (1896), 13 R.P.C. 218 (H.L.); Parke, Davis & Co. Ltd. v. Empire Laboratories Ltd., [1964] Ex.C.R. 399; (1963), 38 D.L.R. (2d) 694; 41 C.P.R. 121; 24 Fox Pat.C. 88; Lever v. Goodwin (1887), 4 R.P.C. 492 (C.A.); Johnston v. Orr Ewing (1882), 7 App. Cas. 219 (H.L.).
REFERRED TO:
Saywack v. Canada (Minister of Employment and Immigration), [1986] 3 F.C. 189; (1986), 27 D.L.R. (4th) 617 (C.A.).
COUNSEL:
Glen A. Bloom for plaintiff.
Malcolm S. Johnston, Q.C. for defendant.
SOLICITORS:
Osler, Hoskin & Harcourt, Ottawa, for plaintiff.
Malcolm Johnston & Associates, Toronto, for defendant.
The following are the reasons for order ren dered in English by
STRAYER J.: On May 9, 1990 I dismissed an application by the plaintiff for an interlocutory injunction which it sought to prevent the defendant from manufacturing, advertising and selling oral dosage formulations of verapamil hydrochloride in two shapes and sizes identical with the plaintiff's formulations containing the same active ingredi ents [Searle Canada Inc. v. Novopharm Ltd.,
T-1841-89, F.C.T.D., Strayer J., order dated 9/5/90, not yet reported]. The plaintiff's formula tions are sold under the name of Isoptin. The evidence before me indicated that while the active ingredients were the same in both the plaintiff's and the defendant's formulations the excipients were different, one difference being that the plain tiff's Isoptin contains lactose whereas the defend ant's formulation, Novo-Veramil, does not.
One of the forms of interlocutory injunction sought in the original notice of motion was an order restraining the defendant and persons having notice of the order from
... inducing or enabling others to pass off its oral dosage formulations of verapamil hydrochloride as and for the Plain tiff's oral dosage formulations of verapamil hydrochloride ordered or requested contrary to the provisions of Section 7(c) of the Trade-marks Act R.S.C. 1985, c. T-13.
In my reasons of May 9, I concluded that the plaintiff had raised a serious issue, but that there was nothing to choose between the plaintiff and defendant, on the criteria of adequacy of damages or the balance of convenience, to support my exer cise of discretion in granting or refusing an inter locutory injunction. I therefore considered the merits and I generally found the plaintiffs case to be lacking in substance. With respect to the relief sought based on paragraph 7(c) of the Trade marks Act [R.S.C., 1985, c. T-13], I stated the following [at pages 9-10]:
With respect to the plaintiffs claim based on paragraph 7(c) of the Trade Marks Act, I think this has no substance. This paragraph provides that no person shall
pass off other wares or services as and for those ordered or requested ....
The plaintiff does not suggest that the defendant is itself committing such acts as filling orders for the plaintiffs pills with its own pills. Rather, the plaintiff contends that the defendant is making it possible for, and perhaps inciting, pharmacists to fill orders for lsoptin with Novo-Veramil. No admissible evidence was provided that such is happening. It is of course true that in many provinces pharmacists are now permitted, and indeed induced, by provincial law to make such a substitution. That does not flow from the actions of the defendant. Further, according to the evidence, pharmacists are required to state on the prescription container delivered to the
patient the name of the manufacturer, at least in code. To the extent that any patient is interested in such matters he can no doubt have the code explained to him. The fact that there may be dishonest pharmacists somewhere in Canada should not cause an injunction to be visited upon the defendant. After all, any manufacturer who produces similar-appearing yellow or white pills or even candies of a similar shape and size could be equally responsible for enabling a dishonest pharmacist to make unauthorized substitutions for Isoptin.
The only evidence presented to me at that time suggesting that pharmacists were substituting Novo-Veramil for Isoptin was purely hearsay and otherwise unacceptable.
On August 3, 1990 the plaintiff filed another notice of motion requesting me to vary my order of May 9 by granting an interlocutory injunction restraining the defendant from manufacturing, ad vertising, promoting, offering for sale, selling, dis tributing or otherwise marketing verapamil hydro- chloride "in the shape of an oblate sphere of yellow colour" or "in the shape of an oblate sphere of white colour", these being the shapes and colours of the two Isoptin pills. The new notice of motion also asked me to restrain the defendant from otherwise passing off its formulations for those of the plaintiff in manners contrary to either paragraphs 7(b) or 7(c) of the Trade-marks Act. In support of this notice of motion the plaintiff has filed several affidavits upon which there has been no cross-examination. The defendant has filed no evidence in reply. The affidavits describe investiga tions carried out by the plaintiff in the province of Quebec and in Toronto in April and May, 1990. In each case the company or its agents obtained prescriptions from doctors (apparently in respect of non-existent patients or non-existent maladies) for Isoptin and these prescriptions were taken to various pharmacies to be filled. The pills supplied were then tested on behalf of the plaintiff to determine whether Isoptin had really been pro vided by the pharmacists. Of eighty-nine prescrip tions purchased in the province of Quebec where the druggists had identified the pills as "Isoptin" on the label, nine contained no lactose and there fore, presumptively, were not Isoptin. Of three prescriptions filled in Toronto and labelled by pharmacists as "Isoptin", two did not contain lac tose. While counsel for the defendant suggested
various hypotheses as to how this could have hap pened, I think that prima facie one could draw the conclusion in the absence of other evidence that at least in some of these cases deliberate mislabelling was involved. (It must be noted, of course, that Quebec pharmacists are perfectly entitled to sub stitute Novo-Veramil for Isoptin although they are not entitled to label it as Isoptin.) It must also, of course, be kept in mind that there was no sys tematic sampling done and it is even conceivable that the pills being provided were not the defend ant's product. There was no new evidence what ever that the defendant had incited or encouraged such false labelling.
For a party to seek a variation of an order once granted, pursuant to Rule 1733 of the Federal Court [Federal Court Rules, C.R.C., c. 663], it must show that its new evidence came to its atten tion after it could have made use of that evidence in the original hearing, and that such evidence could not have been discovered with reasonable diligence prior to the original hearing. It must further be shown that had the evidence been avail able at the time of the hearing it would probably have altered the order.' I am prepared to accept that this evidence was not reasonably available to the plaintiff prior to the hearing of the original motion for an interlocutory injunction. I am not satisfied, however, that if the evidence had been brought forward at that time it would have altered my order.
I believe the new evidence could only have rele vance to a claim based on paragraph 7(c) of the Trade-marks Act. It will be seen from the quota tion above from my order that, in dealing with the relief sought under that paragraph, I took the view that if pharmacists and doctors were not likely to be confused by pills of identical shape and colour
Saywack v. Canada (Minister of Employment and Immi gration), [1986] 3 F.C. 189 (C.A.).
then there could not be a claim under paragraph 7(c), as it was for those professionals to decide, in effect, which drug the ultimate consumer received. In reaching that conclusion I placed considerable reliance on a series of cases in the Ontario courts' in which it was said, in effect, that the consumer of prescription drugs is for all practical purposes the pharmacist or prescribing physician and that "con- fusion" must be measured by the likelihood of these professionals being misled as to the prove nance of a particular drug. Counsel for the plain tiff in argument on the present motion sought to distinguish those cases on the basis that they each involved two formulations of different manufactur ers which, though similar, were somehow distin guishable by sight. With respect, I think that is irrelevant to the basic concept as to who is the "consumer" of the drugs. I was not satisfied in May, and I am no more satisfied in September, that these professionals simply identify drugs by sight and that they do not have careful regard to the actual source. On the rationale which I adopt ed in my original reasons, it is of no particular importance to the liability of the defendant that there may be druggists who are deliberately mis- labelling the defendant's product as being that of the plaintiff. If I have adopted the wrong rationale then the remedy is to appeal my decision, not to ask me to reject that rationale on a motion to vary the original order.
Counsel for the plaintiff cited to me several
2 Ayerst, McKenna & Harrison, Inc. v. Apotex Inc. (1983), 41 O.R. (2d) 366 (C.A.), at pp. 374-376; Syntex Inc. v. Novopharm Ltd. et al. (1983), 74 C.P.R. (2d) 110 (Ont. H.C.); Smith, Kline & French Canada Ltd. v. Novopharm Ltd. (1983), 72 C.P.R. (2d) 197 (Ont. H.C.); Ciba-Geigy Canada Ltd. v. Novopharm Ltd. (1986), 12 C.P.R. (3d) 76 (Ont. H.C.).
cases' containing statements to the effect that a manufacturer who adopts a get-up for his product which makes it possible for retailers to deceive the ultimate consumer is himself liable for that decep tion. None of these cases are recent, and three of them are English decisions from the nineteenth century. Nor are they binding on me. I deliberate ly preferred the rationale more recently applied by Ontario courts in respect of the special position of pharmaceutical manufacturers vis-à-vis druggists and medical practitioners.
On the basis of that rationale, the new evidence would not have made any difference had it been presented at the time of the original hearing. Therefore, the application is dismissed with costs.
I would only add that, had I felt some variation in my order to be justified, it would have been necessary to consider very carefully the respective equities before issuing as broad an injunction as that sought by the plaintiff again on this second motion. Although the new evidence is as to mis- labelling of what may be (but is not proven to be) the defendant's pills by certain pharmacists in Quebec and Toronto, without any proven induce ment or collusion by the defendant, plaintiff would have me ban the total production and sale of those pills by the defendant and without geographical limitation. At the interlocutory stage this, on the present state of the record, is a formidable request. Among other factors, I would have to take judicial notice that it is open to the plaintiff to take action directly against offending pharmacists and to make complaints to the provincial bodies which regulate pharmacists.
3 Reddaway v. Banham (1896), 13 R.P.C. 218 (H.L.); Parke, Davis & Co. Ltd. v. Empire Laboratories Ltd., [ 1964] Ex.C.R. 399; Lever v. Goodwin (1887), 4 R.P.C. 492 (C.A.); Johnston v. Orr Ewing (1882), 7 App. Cas. 219 (H.L.).
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