Apotex Inc. v. AstraZeneca Canada Inc. (C.A.), 2003 FCA 235, [2003] 4 F.C. 826


A-111-03

2003 FCA 235

Apotex Inc. (Appellant)

v.

AstraZeneca Canada Inc. (Respondent)

Indexed as: Apotex Inc. v. AstraZeneca Canada Inc. (C.A.)

Court of Appeal, Linden, Rothstein and Malone JJ.A.-- Toronto, May 8; Ottawa, May 26, 2003.

Practice -- Stay of Proceedings -- Appeal from order of F.C.T.D. Judge sustaining Prothonotary's order granting stay of Federal Court proceeding for declaration copyright not subsisting, order expunging copyright registration -- Respondent having previously commenced proceedings in Ontario for declaration of copyright ownership, relief for infringement -- Actions involving same parties, facts, issues -- Only difference: expungement available only from Federal Court -- Issue for determination: whether S.C.C. test in Amchem Products Inc. v. British Columbia (Workers' Compensation Board) applicable to decision whether to grant stay where parallel proceeding commenced in Canada prior to Federal Court action -- Forum non conveniens test utilized only by court in which action first commenced -- Respondent had statutory right to bring copyright action in Ontario -- Did not act arbitrarily -- Not forum shopping -- No injustice to appellant -- Could apply to Federal Court for rectification of register after Ontario case decided -- If respondent fails in Ontario, precluded by res judicata, issue estoppel, abuse of process from asserting copyright against appellant -- Deference to Ontario Court appropriate in circumstances -- Choice of forum disputes harmful to justice administration, use of judicial resources.

Copyright -- Practice -- Appeal from F.C.T.D. order sustaining Prothonotory's order granting stay of F.C. proceeding for declaration copyright not subsisting, expungement of copyright registrations of product monographs -- Respondent having previously sued in Ontario for declaration of copyright ownership, relief for infringement -- Actions involve same parties, facts, issues -- Only difference: expungement available only from Federal Court -- Forum non conveniens test considered -- Respondent had statutory right to bring copyright action in Ontario: Copyright Act, s. 37 -- Appellant could apply to F.C. under Act, s. 57(4) for register rectification when Ontario case decided -- No necessity for in rem remedy herein -- If respondent fails in Ontario, precluded by res judicata, issue estoppel, abuse of process from asserting copyright against appellant -- If position taken by appellant upheld, Copyright Act, s. 37 de facto rendered nugatory.

This was an appeal from an order of Dawson J. dismissing an appeal from a Prothonotary's order granting a stay of this Federal Court proceeding until disposition of an action in the Ontario Superior Court of Justice.

AstraZeneca had commenced the Ontario action seeking a declaration of its ownership of copyright in certain product monographs together with relief for infringement. In addition, it moved for an interlocutory injunction or summary judgment. A few days later, Apotex commenced an action in the Federal Court, asking for a declaration that copyright did not subsist and an order expunging AstraZeneca's copyright registrations. Both actions involve the same parties, facts and issues. The only difference is that a claim for the expungement of a copyright registration can be dealt with only in Federal Court.

It was argued before this Court that the Trial Division Judge erred in law in staying the Federal Court action without finding the Ontario Court a clearly more appropriate forum for the resolution of all the issues raised by the parties. Reliance was placed upon the Supreme Court of Canada decision in Amchem Products Inc. v. British Columbia (Workers' Compensation Board). Three points were made by Apotex in argument. (1) Only the Federal Court can grant a declaration in rem on copyright ownership and the expungement of a copyright registration. (2) If forced to defend the Ontario action, Apotex will be disadvantaged by the loss of the automatic right to appeal interlocutory orders. (3) AstraZeneca has failed to demonstrate any advantage available to it only in the Ontario action such as to displace Apotex's choice of forum. Apotex's forum choice was arbitrary. What this Court had to decide was whether the test in Amchem was the appropriate one for determining whether to grant a stay where a parallel proceeding was commenced in Canada prior to the Federal Court action.

Held, the appeal should be dismissed.

The principal argument advanced by Apotex was that the appropriate test herein was forum non conveniens. But that test can be utilized only by the court in which the action was first commenced and that was not the case herein. Amchem does not allow the Federal Court to determine that it is more appropriate than the court of another jurisdiction where the parallel action first arose. Even if the forum non conveniens test could be applied, the same result would follow. AstraZeneca had a statutory right to bring a copyright action in Ontario: Copyright Act, section 37. It had not acted arbitrarily in exercising that right. It was not guilty of forum shopping.

Nor was there any injustice to Apotex since expungement of AstraZeneca's copyright registrations makes no significant difference to Apotex. It could await the outcome of the Ontario action and then apply to Federal Court under Act, subsection 57(4) for rectification of the Register of Copyrights. Apotex requires no in rem remedy, AstraZeneca having given an undertaking to consent to the expungement of any registration held invalid by the Ontario Court. Again, should AstraZeneca fail before the Ontario Court, it would be precluded by the principles of res judicata, issue estoppel and abuse of process from asserting against Apotex the validity of its copyright.

AstraZeneca ought not to be deprived of its right to sue in Ontario based on speculation that the Ontario Court will grant an interlocutory injunction against Apotex and that leave to appeal would be refused.

If the position taken by Apotex were upheld, that would mean that any defendant in a provincial superior court action for copyright infringement could get the case removed to Federal Court just by seeking expungement of the copyright registration or by invoking the automatic right of appeal of a judge's interlocutory orders to this Court. Copyright Act, section 37 would be de facto rendered nugatory.

What Apotex had done was to attempt artificially to tilt the forum non conveniens test in its own favour. In such circumstances, it was appropriate to give deference to the Ontario Court, where the action was first begun. It was neither in the best interests of the administration of justice nor the proper use of judicial resources for parties to engage in choice of forum disputes in cases such as that at bar.

statutes and regulations judicially

considered

Copyright Act, R.S.C., 1985, c. C-42, ss. 37 (as am. by S.C. 1997, c. 24, s. 20), 57(4) (as am. by S.C. 1992, c. 1, s. 51; 1993, c. 15, s. 7).

Federal Court Act, R.S.C., 1985, c. F-7, s. 50.

cases judicially considered

applied:

Morguard Investments Ltd. v. De Savoye, [1990] 3 S.C.R. 1077; (1990), 76 D.L.R. (4th) 256; [1991] 2 W.W.R. 217; 52 B.C.L.R. (2d) 160; 46 C.P.C. (2d) 1; 122 N.R. 81; 15 R.P.R. (2d) 1; Royal Bank of Scotland Ltd. v. Citrusdal Investments Ltd, [1971] 3 All ER 558 (Ch.D.).

distinguished:

Amchem Products Inc. v. British Columbia (Workers' Compensation Board), [1993] 1 S.C.R. 897; (1993), 102 D.L.R. (4th) 96; [1993] 3 W.W.R. 441; 23 B.C.A.C. 1; 77 B.C.L.R. (2d) 62; 14 C.P.C. (3d) 1; 150 N.R. 321; 39 W.A.C. 1.

referred to:

Empire-Universal Films Ltd. v. Rank, [1947] O.R. 775 (H.C.).

APPEAL from an order of Dawson J. ((2003), 23 C.P.R. (4th) 371), dismissing an appeal against a Prothonotary's order granting a stay of a Federal Court proceeding. Appeal dismissed.

appearances:

Andrew R. Brodkin and Nathalie Butterfield for appellant (plaintiff).

John R. Morrissey and Denise L. Lacombe for respondent (defendant).

solicitors of record:

Goodmans LLP, Toronto, for appellant (plaintiff).

Smart & Biggar, Toronto, for respondent (defendant).

The following are the reasons for judgment rendered in English by

Malone J.A.:

INTRODUCTION

[1]This is an appeal by Apotex Inc. (Apotex) from the order of Dawson J. dated February 12, 2003 [(2003), 23 C.P.R. (4th) 371 (F.C.T.D.)]. That order dismissed an appeal by Apotex from an order of a Prothonotary, dated October 31, 2002, which had granted a stay of this proceeding commenced in the Federal Court of Canada, Trial Division (Federal Court) as file No. T-1283-02 (the Federal Court action). This stay was to remain in effect until the final disposition of an action pending in the Ontario Superior Court of Justice (Ontario Court) between the same parties, being Court file No. 02-CV-232852CM3 (the Ontario action).

FACTS

[2]On July 16, 2002, AstraZeneca Canada Inc. (AstraZeneca) commenced the Ontario action seeking, inter alia, a declaration that it owns the copyright in certain product monographs, as well as consequential relief for infringement. AstraZeneca also brought a motion for an interlocutory injunction and, in the alternative, for summary judgment. Approximately 20 days later, Apotex commenced the Federal Court action, seeking, inter alia, a declaration that no copyright subsists in the relevant product monographs, and an order expunging AstraZeneca's copyright registrations therein.

[3]AstraZeneca promptly delivered its statement of defence and counterclaim in the Federal Court action and Apotex promptly delivered its statement of defence in the Ontario action.

[4]Both parties reside and conduct business in the city of Toronto, in the province of Ontario. In Toronto, the Ontario Court and the Federal Court are located across the street from one another; i.e. the trial venue in both actions is the same.

[5]Both actions involve the same parties, the same facts, the same issues, the same causes of action and defences, similar pleadings, and similar claims for relief, except for Apotex's claim for expungement of copyright registrations, available only in the Federal Court. In essence, these are parallel proceedings in two Canadian jurisdictions that overlap.

[6]Two weeks after commencing the Federal Court action, on August 23, 2002, Apotex delivered a notice of motion for an order staying the Ontario action permanently, or in the alternative, until final disposition of the Federal Court action. That motion has been adjourned sine die pending the outcome of this appeal.

[7]AstraZeneca filed a motion for a stay of proceedings of the Federal Court action on October 11, 2002. That motion was successful, and gives rise to the current appeal.

ARGUMENT ON APPEAL

[8]Apotex argues that Dawson J. erred in law in staying the Federal Court action without having found the Ontario Court to be a clearly more appropriate forum than the Federal Court for the resolution of all of the issues raised between the parties. It is submitted that this was required before the Federal Court action could be stayed following the Supreme Court of Canada decision in Amchem Products Inc. v. British Columbia (Workers' Compensation Board), [1993] 1 S.C.R. 897 (Amchem) at paragraph 53.

[9]Apotex bases this argument on three factors.

[10]First, only the Federal Court can adjudicate on all of the issues and, in particular, grant declarations in rem regarding the ownership of copyrights and the expungement of copyright registrations. Second, it is urged that the Federal Court is also a more appropriate forum than the Ontario Court because if Apotex is forced to defend in Ontario Court it will suffer the loss of juridical advantage available to it only in this Court, namely the automatic right to appeal all interlocutory orders.

[11]Finally, it is said that AstraZeneca has not led any evidence or pointed to any benefit or advantage available to it only in the Ontario Action in order to displace Apotex' choice of forum. Unlike other cases in which a stay is sought based on the existence of a parallel proceeding and where the parties each assert a legitimate interest, AstraZeneca's choice of forum in this case is said to be arbitrary. Without having demonstrated that it will obtain some benefit in the Ontario Court or that it will suffer some disadvantage in the Federal Court, it is submitted that AstraZeneca ought not be able to stay this proceeding.

THE ISSUE

[12]In the end, the question is this: is the Amchem test the proper legal test for deciding whether to grant a stay of proceedings where there is a parallel proceeding within Canada that was commenced prior to the Federal Court action.

ANALYSIS

[13]Apotex's principal argument is that the appropriate test in this matter is forum non conveniens, asking "is there a more appropriate forum", derived from the Amchem case. However, the forum non conveniens test is only to be used by the court in which the action was first commenced. That court must determine if it should stay the action started in its own court because there is a forum more appropriate than its own. This is not our case. The Amchem test does not entitle the Federal Court of Canada to determine that it is more appropriate than the court of another jurisdiction where the parallel action first arose. This is achieved by an anti-suit injunction, which is an aggressive remedy, and contrary to judicial comity. An anti-suit injunction has not been pleaded here, and is clearly not appropriate in these circumstances (see Amchem, supra at paragraphs 54-56).

[14]However, in my analysis, even if the forum non conveniens test is applied to the facts of this case, the same conclusion is reached; the Federal Court action should be stayed.

[15]In Amchem, the Supreme Court of Canada set out the forum non conveniens test in the following language (at page 931):

Under this test the court must determine whether there is another forum that is clearly more appropriate. The result of this change in stay applications is that where there is no one forum that is the most appropriate, the domestic forum wins out by default and refuses a stay, provided it is an appropriate forum.

At pages 919-920 there is no reason in principle why the loss of juridical advantage should be treated as a separate and distinct condition rather than being weighed with the other factors which are considered in identifying the appropriate forum. . . . it seems to me that any juridical advantages to the plaintiff or defendant should have been considered one of the factors to be taken into account. The weight to be given to juridical advantage is very much a function of the parties' connection to the particular jurisdiction in question. . . . a party whose case has a real and substantial connection with a forum has a legitimate claim to the advantages that that forum provides.

[16]First of all, there is no jurisdictional reason for the Federal Court action to continue because AstraZeneca has a statutory right to bring its copyright action in Ontario by virtue of section 37 [as am. by S.C. 1997, c. 24, s. 20] of the Copyright Act, R.S.C. 1985, c. C-42. That section reads:

37. The Federal Court has concurrent jurisdiction with provincial courts to hear and determine all proceedings, other than the prosecution of offences under sections 42 and 43, for the enforcement of a provision of this Act or of the civil remedies provided by this Act.

That right was not arbitrarily exercised by AstraZeneca. The Ontario Court has geographic jurisdiction over these Ontario-based parties, as well as subject-matter jurisdiction for copyright infringement. No forum shopping has occurred on the part of AstraZeneca.

[17]As to any injustice to Apotex, expungement of AstraZeneca's copyright registrations makes no significant difference to Apotex. If successful in the Ontario action, Apotex would have as between itself and AstraZeneca an in personam finding of invalidity of the copyright registrations. Indeed, Apotex could await the outcome of the Ontario action and then seek to have the copyright registrations expunged by the Federal Court by merely bringing an application in the Federal Court using subsection 57(4) [as am. by S.C. 1992, c. 1, s. 51; 1993, c. 15, s. 7] of the Copyright Act, which states:

57. . . .

(4) The Federal Court may, on application of the Registrar of Copyrights or of any interested person, order the rectification of the Register of Copyrights by

. . .

(b) the expunging of any entry wrongly made in or remaining on the Register,

. . .

and any rectification of the Register under this subsection shall be retroactive from such date as the Court may order.

[18]In any event, Apotex does not need an in rem remedy to expunge AstraZeneca's copyright registrations due to AstraZeneca's undertaking placed before this Court to consent in writing to the expungement of any copyright registrations finally declared and held invalid by the Ontario Court. That undertaking reads, in part, as follows:

To ensure that Apotex is denied no conceivable juridical advantage by being sued in the Ontario Court, we (AstraZeneca's Counsel) are prepared to undertake, on behalf of our client (AstraZeneca), to consent to the expungement of any or all of the four copy right registrations if the Ontario Court declares that any of the registrations is invalid as between Apotex and AstraZeneca. In other words, the inter se remedy (available in the Ontario Court) would, on consent, become an in rem remedy (available only in the Federal Court).

The undertaking would be implemented when AstraZeneca had exhausted all possible appeals from any decision of the Ontario Court or the time from one or more such appeals had expired.

[19]Third, if AstraZeneca is unsuccessful in the Ontario Court, it will be precluded by operation of the principles of res judicata, issue estoppel or abuse of process from asserting against Apotex the validity of its copyright in the product monographs. The fact that the copyright would not be expunged as regards the rest of the world would not make any difference to Apotex or its privies.

[20]As to interlocutory relief, Apotex is speculating that the Ontario Court will grant an interlocutory injunction against it, and if so, that leave to appeal will be refused. AstraZeneca should not be deprived of its right to sue in Ontario on the basis of mere speculation. In any event, both parties face the same hurdle should they lose a motion in the Ontario Court.

[21]If Apotex's position is correct, once a copyright registration issue is pleaded, then any defendant in a provincial superior court action for copyright infringement can have that action removed to the Federal Court by merely seeking the relief of expungement of the copyright registration or by invoking the automatic right of appeal of a judge's interlocutory orders to this Court. In that event, section 37 of the Copyright Act would de facto be rendered nugatory.

[22]The decision of the Supreme Court of Canada in Morguard Investments Ltd. v. De Savoye, [1990] 3 S.C.R. 1077 (Morguard) is also relevant here, where there are two Canadian courts with concurrent geographic and subject-matter jurisdiction, and a loss of juridical advantage is asserted. As La Forest J. stated at pages 1099-1100:

The Canadian judicial structure is so arranged that any concerns about differential quality of justice among the provinces can have no real foundation. All Superior Court judges--who also have super intending control over other provincial courts and tribunals--are appointed and paid by the federal authorities. And all are subject to final review by the Supreme Court of Canada, which can determine when the courts of one province have appropriately exerc ised jurisdiction in an action and the circumstances under which the courts of another province should recognize such judgements. Any danger resulting from unfair procedure is further avoided by sub-constitutional factors, such as for example the fact that Canadian lawyers adhere to the same code of ethics throughout Canada.

[23]Having determined that the juridical and other advantages advanced by Apotex are all without substance, there is no basis to deny AstraZeneca its choice of forum. By commencing the Federal Court action, Apotex attempted artificially to tilt the forum non conveniens test in its favour. In these circumstances, it is appropriate to give deference to the Ontario Court, where the action was first begun. As indicated in Royal Bank of Scotland Ltd. v. Citrusdal Investments Ltd, [1971] 3 All ER 558 (Ch. D.), it is vexatious if one party institutes proceedings to obtain relief in respect of the same subject-matter where exactly the same issue is raised by his opponent in proceedings already instituted in another court in which he is not the plaintiff, but the defendant (see also Empire-Universal Films Ltd. v. Rank, [1947] O.R. 775 (H.C.)).

[24]In the final balance, all else being virtually equal, the action commenced first in time should proceed.

[25]In summary, the Motions Judge properly exercised her discretion under section 50 of the Federal Court Act, R.S.C., 1985, c. F-7, to grant the stay of proceedings sought by the respondent. In my view, it is neither in the best interests of the administration of justice in Canada, nor the proper use of judicial resources, for these parties to engage in choice of forum disputes as between the Federal Court and any provincial superior court when virtually all of the relief sought can be obtained in a provincial superior court, provided one of the parties gives an undertaking as set out above in paragraph 18 of these reasons.

[26]Accordingly, I would dismiss the appeal with costs.

Linden J.A.: I agree.

Rothstein J.A.: I agree.

v.478