Judgments

[1995] 1 F.C. 588

A-332-94

David Bull Laboratories (Canada) Inc. (Appellant)

v.

Pharmacia Inc., Farmitalia Carlo Erba S.R.L. and The Minister of National Health and Welfare (Respondents)

Indexed as: David Bull Laboratories (Canada) Inc. v. Pharmacia Inc. (C.A.)

Court of Appeal, Stone, Strayer and Robertson JJ.A.—Ottawa, October 18; November 1, 1994.

Practice — “Gap” Rule — Appeal from dismissal of application to strike originating notice of motion for prohibition to prevent Minister of National Health and Welfare from issuing notice of compliance in respect of patented medicine — R. 419 not directly authorizing striking out notice of motion — To have recourse to provincial court rules by analogy under R. 5 for procedure to strike originating documents other than pleadings, must be gap in Federal Court Rules — That Federal Court Rules omitting provision in provincial court rules not meaning gap — If explanation for absence of provision in general scheme, absence must be intentional — In such circumstances application by analogy of provincial court rules or other provisions of Federal Court Rules inapplicable on their face amending Federal Court Rules — Absence of provision for striking notices of motions explained as actions involving more time, expense — Rules re: actions requiring precise pleadings, but as no comparable rules re: notices of motion, riskier to strike.

Practice — Pleadings — Motion to strike — Appeal from dismissal of application to strike originating notice of motion for prohibition to prevent Minister of National Health and Welfare from issuing Notice of Compliance in respect of patented medicine — R. 419 permitting Court to strike “pleading” in “action” — Application commenced by notice of motion not “action,” notice of motion not “pleading.”

Patents — Practice — Appeal from denial of application to strike originating notice of motion for prohibition against Minister issuing notice of compliance in respect of patented medicine — Such prohibition applications being motions for judicial review — Rules for judicial review providing strict timetable and Court role to ensure no undue delay — Patented Medicines (Notice of Compliance) Regulations indicating expeditious disposition intended — Parties not to treat such proceedings as infringement, patent validity actions — Regulations not creating, abolishing private rights of action and pertain to public law — Not finally determining validity or infringement — Action appropriate procedure where such determination required.

This was an appeal from dismissal of an application to strike out an originating notice of motion for prohibition to prevent the Minister of National Health and Welfare from issuing a notice of compliance to the appellant in respect of the medicine Doxorubicin until after the expiration of the respondents’ patents. Before the Trial Judge, the appellant relied on Rule 419 or Rule 5, the “gap” rule. On appeal it also submitted that jurisdiction to strike out was either part of the inherent jurisdiction of the Court or that there was a power of “summary dismissal” where an affidavit filed in judicial review proceedings does not meet the requirements of the Rules.

Held, the appeal should be dismissed.

The remedy of striking out a notice of motion was not available in these circumstances. Rule 419 permits the Court, at any stage of an “action,” to order any “pleading” to be struck out. Rule 2 defines “action” as a proceeding in the Trial Division “other than an appeal, an application or an originating motion,” and “pleading” as any document whereby an action in the Trial Division is initiated. Rule 419 does not directly authorize the striking out of a notice of motion. An application commenced by notice of motion is not an “action” and the notice of motion is not a “pleading.”

The appellant argued that under Rule 5, the Court could resort by analogy to the law of either Ontario or Quebec, as to the procedure for striking out originating documents other than pleadings. For Rule 5 to apply, there must be a “gap” in the Federal Court Rules. Simply because those Rules do not contain every provision found in provincial court rules does not necessarily mean that there is a gap. If the absence of such a provision can be readily explained by the general scheme of the Federal Court Rules, that absence must be considered intentional and any application by analogy of other rules which are on their face inapplicable would amount to an amendment of the Federal Court Rules. The basic explanation for the lack of provision in the Federal Court Rules for striking out notices of motion is found in the difference between actions and other proceedings. An action involves discovery of documents, examinations for discovery and trials with viva voce evidence. It is important that parties not be put to the delay and expense in taking a matter to trial if it is plain and obvious that the pleading cannot amount to a cause of action or a defence. Further, striking out actions is much more feasible because there are numerous rules which require precise pleadings as to the nature of the claim or the defence and the facts upon which it is based. There are no comparable rules with respect to notices of motion. The lack of requirements for precise allegations of fact in notices of motion would make it far more risky to strike such documents. The proper way to contest an originating notice of motion is to appear and argue at the hearing of the motion itself.

The contrast between actions and motions in this Court is even more marked where the motion involved is for judicial review, as these applications for prohibition under Patented Medicines (Notice of Compliance) Regulations, subsection 6(1) have been held to be. Unlike the rules pertaining to actions, the rules governing judicial review provide a strict timetable for preparation for hearing and a role for the Court in ensuring that there is no undue delay. The focus in judicial review is on proceeding to the hearing as quickly as possible, with objections to the originating notice being disposed of promptly in considering the merits of the case. The Patented Medicines (Notice of Compliance) Regulations further indicate an intention that this kind of application for judicial review be disposed of expeditiously. These proceedings are not actions for determining validity or infringement, but are to determine whether the Minister may issue a notice of compliance. The Regulations neither create nor abolish any rights of action between the parties; they confer a right on the patentee to bring an application for prohibition against the Minister. They pertain to public law, not private rights of action. If a trial to determine validity or infringement is required, that can be had by commencing an action.

STATUTES AND REGULATIONS JUDICIALLY CONSIDERED

Code of Civil Procedure, R.S.Q. 1977, c. C-25, art. 75.1.

Federal Court Rules, C.R.C., c. 663, RR. 2 “action,” “pleading,” 5, 319(1) (as am. by SOR/88-221, s. 4), 419, 1602(2) (as enacted by SOR/92-43, s. 19), 1605 (as enacted idem), 1614(2) (as enacted idem), 1617 (as enacted idem).

Patented Medicines (Notice of Compliance) Regulations, SOR/93-133, ss. 5, 6(1), 7(1),(5).

Rules of Civil Procedure, O. Reg. 560/84, R. 14.09.

CASES JUDICIALLY CONSIDERED

APPLIED:

Merck Frosst Canada Inc. v. Canada (Minister of National Health and Welfare) (1994), 55 C.P.R. (3d) 302 (F.C.A.).

CONSIDERED:

Pharmacia Inc. v. David Bull Laboratories (Canada) Inc., A-410-94, Stone J.A., judgment dated 19/10/94, F.C.A., not yet reported.

REFERRED TO:

Nabisco Brands Ltd.-Nabisco Brands Ltée v. Procter& Gamble Co. et al. (1985), 5 C.P.R. (3d) 417; 62 N.R. 364 (F.C.A.); Bayer AG v. Canada (Minister of National Health and Welfare) (1993), 51 C.P.R. (3d) 329 (F.C.A.); Cyanamid Agricultural de Puerto Rico, Inc. v. Commissioner of Patents et al. (1983), 74 C.P.R. (2d) 133 (F.C.T.D.); Vancouver Island Peace Society v. Canada, [1994] 1 F.C. 102 (T.D.).

APPEAL from dismissal of application to strike out originating notice of motion for prohibition to prevent the Minister of National Health and Welfare from issuing a notice of compliance (Pharmacia Inc. v. Canada (Minister of National Health and Welfare), T-2991-93, Noël J., order dated 4/7/94, F.C.T.D., not yet reported). Appeal dismissed.

COUNSEL:

Susan Beaubien for appellant.

Gunars A. Gaikis and Peter R. Wilcox for respondents Pharmacia Inc. and Farmitalia Carlo Erba S.R.L.

No one appearing for respondent Minister of National Health and Welfare.

SOLICITORS:

Shapiro, Cohen, Andrews, Finlayson, Ottawa, for appellant.

Smart & Biggar, Toronto, for respondents Pharmacia Inc. and Farmitalia Carlo Erba S.R.L.

Deputy Attorney General of Canada for respondent Minister of National Health and Welfare.

The following are the reasons for judgment rendered in English by

Strayer J.A.:

Relief Requested

This is an appeal from the decision of Noël J. of July 4, 1994 [not yet reported]. In that decision he dismissed the application of the appellant David Bull Laboratories (Canada) Inc. (the respondent in Trial Division proceeding T-2991-93) to strike out the originating notice of motion for prohibition filed by Pharmacia Inc. (Pharmacia) and Farmitalia Carlo Erba S.R.L. (Farmitalia) in that Trial Division proceeding. He also refused the alternative request of the appellant that he order Robert J. Little, deponent of an affidavit filed by Pharmacia and Farmitalia in support of their originating notice of motion, to re-attend for cross-examination and to answer certain questions.

This appeal was heard together with A-410-94 [Pharmacia Inc. v. David Bull Laboratories (Canada) Inc.], an appeal by Pharmacia and Farmitalia against another interlocutory order in the same proceeding. That appeal was dismissed for reasons issued on October 18 and October 19, 1994.

Facts

The respondents Pharmacia and Farmitalia assert an interest in Canadian patents 1,248,453 (hereinafter ‘453) and 1,291,037 (hereinafter ‘037), included in patent lists dated April 7, 1993 in respect of Doxorubicin Hydrochloride (known as “Doxorubicin”), which lists were filed with the Minister of National Health and Welfare pursuant to the Patented Medicines (Notice of Compliance) Regulations.[1] On November 4, 1993 the appellant filed and served a notice of allegation pursuant to section 5 of those Regulations with respect to patent number ‘453 as referred to above. That notice of allegation alleged that the product for which the appellant was seeking a notice of compliance would not infringe any of the claims of this patent. On December 21, 1993 the respondents Pharmacia and Farmitalia filed a notice of motion pursuant to subsection 6(1) of the Regulations seeking an order prohibiting the Minister of National Health and Welfare from issuing a notice of compliance to the appellant in respect of the medicine Doxorubicin until after the expiration of both patents ‘453 and ‘037. That notice of motion simply alleged that the respondent Farmitalia is the owner of these patents each of which includes claims for the medicine Doxorubicin itself as well as claims for the use of the medicine, and that Pharmacia is a licensee under those patents and sells that medicine in Canada. The notice of motion recited the fact that Pharmacia had filed the patent lists and that the appellant (respondent in that originating notice of motion) had filed the notice of allegation as referred to previously. The only evidence ever produced in support of this originating notice of motion was a short affidavit by Robert J. Little, President of Pharmacia, attesting to essentially the same facts as set out in the originating notice of motion.

The appellant filed its evidence in response to the originating notice of motion on February 21, 1994. The deponents of affidavits from both sides were cross-examined on their affidavits, Mr. Little being cross-examined on June 15, 1994 and refusing to answer many of the questions put to him. On June 27, 1994 the appellant filed a notice of motion seeking to have the originating notice of motion struck out or in the alternative to have Mr. Little ordered to re-attend for further cross-examination to answer questions he refused to answer. This motion was heard by Noël J. on June 30, 1994 and on July 4, 1994 he issued the judgment from which this appeal has been brought.

Any further facts necessary for the disposition of this appeal will be referred to in connection with the conclusions on each issue.

Conclusions

Motion to Strike

Before Noël J. the appellant appears to have based its case for striking out the originating notice of motion on Rule 419 [Federal Court Rules, C.R.C., c. 663] or in the alternative the “gap” rule, Rule 5. Noël J. expressed doubt that either Rule 419 or Rule 5 would support striking a notice of motion. He concluded that in any event there was no basis for striking out the originating notice of motion on any of the grounds stated in Rule 419. Before this Court on appeal counsel submitted a further alternative in support of the jurisdiction to strike out: either that this is part of the inherent jurisdiction of the Court or that there is a power of “summary dismissal” where an affidavit filed in judicial review proceedings does not meet the requirements of the Rules. (The latter argument may have been made to Noël J. in some form as he observes in his reasons that the affidavit filed in support of the motion is sufficient to verify the facts asserted.)

This Court should not of course interfere with a trial judge’s exercise of discretion, such as in a refusal to strike, unless he or she has proceeded on some wrong principle of law or has seriously misapprehended the facts, or unless an obvious injustice would otherwise result.[2] We can see no such error in the decision of the Trial Judge here. We need go no farther than to confirm that the remedy of striking out a notice of motion was not available in these circumstances. Given the extensive argument on this subject, however, it may be well to explain why in our view the learned Judge was right in principle to doubt the applicability of Rule 419 or the “gap” rule.

It is clear that Rule 419 does not directly authorize the striking out of a notice of motion. The opening words of Rule 419(1) are:

Rule 419. (1) The Court may at any stage of an action order any pleading or anything in any pleading to be struck out…. [Emphasis added.]

Rule 2 defines “action” as a proceeding in the Trial Division

Rule 2. (1) …

“action” … other than an appeal, an application or an originating motion….

and it defines “pleading” as

Rule 2. (1) …

“pleading” … any document whereby an action in the Trial Division was initiated….

Thus an application for prohibition commenced by notice of motion is not an “action” and the notice of motion is not a “pleading.” It is argued, however, that by means of the “gap” rule, Rule 5, the Court can resort to the law of either Ontario or Quebec. Rule 5 provides as follows:

Rule 5. In any proceeding in the Court where any matter arises not otherwise provided for by any provision in any Act of the Parliament of Canada or by any general rule or order of the Court (except this Rule), the practice and procedure shall be determined by the Court (either on a preliminary motion for directions, or after the event if no such motion has been made) for the particular matter by analogy

(a) to the other provisions of these Rules, or

(b) to the practice and procedure in force for similar proceedings in the courts of that province to which the subject matter of the proceedings most particularly relates,

whichever is, in the opinion of the Court, most appropriate in the circumstances.

It was argued that as there are parties herein domiciled in both Ontario and Quebec, the Court could have resort by analogy to the laws of those provinces which, unlike the Federal Court Rules provide a procedure for striking out originating documents other than pleadings.[3] The appellant also appears to argue that pursuant to Rule 5(a) the Court can apply Rule 419, by analogy, to originating notices of motion.

For Rule 5 to apply there must be a “gap” in the Federal Court Rules. Simply because those Rules do not contain every provision found in provincial court rules does not necessarily mean that there is a gap. If the absence of such a provision can be readily explained by the general scheme of the Federal Court Rules then that absence must be considered intentional and any application by analogy of provincial court rules or other provisions of the Federal Court Rules which are on their face inapplicable would amount to an amendment of the Federal Court Rules.

The basic explanation for the lack of a provision in the Federal Court Rules for striking out notices of motion can be found in the differences between actions and other proceedings. An action involves, once the pleadings are filed, discovery of documents, examinations for discovery, and then trials with viva voce evidence. It is obviously important that parties not be put to the delay and expense involved in taking a matter to trial if it is “plain and obvious” (the test for striking out pleadings) that the pleading in question cannot amount to a cause of action or a defence to a cause of action. Even though it is important both to the parties and the Court that futile claims or defences not be carried forward to trial, it is still the rare case where a judge is prepared to strike out a pleading under Rule 419. Further, the process of striking out is much more feasible in the case of actions because there are numerous rules which require precise pleadings as to the nature of the claim or the defence and the facts upon which it is based. There are no comparable rules with respect to notices of motion. Both Rule 319(1) [as am. by SOR/88-221, s. 4], the general provision with respect to applications to the Court, and Rule 1602(2) [as enacted by SOR/92-43, s. 19], the relevant rule in the present case which involves an application for judicial review, merely require that the notice of motion identify “the precise relief” being sought, and “the grounds intended to be argued.” The lack of requirements for precise allegations of fact in notices of motion would make it far more risky for a court to strike such documents. Further, the disposition of an application commenced by originating notice of motion does not involve discovery and trial, matters which can be avoided in actions by a decision to strike. In fact, the disposition of an originating notice proceeds in much the same way that an application to strike the notice of motion would proceed: on the basis of affidavit evidence and argument before a single judge of the Court. Thus, the direct and proper way to contest an originating notice of motion which the respondent thinks to be without merit is to appear and argue at the hearing of the motion itself. This case well illustrates the waste of resources and time in adding on to what is supposed to be a summary judicial review proceeding the process of an interlocutory motion to strike. This motion to strike has involved a hearing before a trial judge and over one half day before the Court of Appeal, the latter involving the filing of several hundred pages of material, all to no avail. The originating notice of motion itself can and will be dealt with definitively on its merits at a hearing before a judge of the Trial Division now fixed for January 17, 1995.

The contrast between actions and motions in this Court is even more marked where the motion involved is for judicial review, as these applications for prohibition under subsection 6(1) of the Patented Medicines (Notice of Compliance) Regulations have been held to be.[4] Unlike the rules pertaining to actions, the 1600 rules [as enacted by SOR/92-43, s. 19] pertaining to judicial review provide a strict timetable for preparation for hearing and a role for the Court in ensuring there is no undue delay. Time limits fixed by the rules can only be extended by a judge, not by consent.[5] The Court can of its own motion dismiss applications due to delay[6] and can also take the initiative in correcting originating documents.[7] This all reinforces the view that the focus in judicial review is on moving the application along to the hearing stage as quickly as possible. This ensures that objections to the originating notice can be dealt with promptly in the context of consideration of the merits of the case.

The Patented Medicines (Notice of Compliance) Regulations further indicate an intention that this particular kind of application for judicial review should be disposed of expeditiously. Subsection 7(1) of the Regulations provides that normally a notice of compliance should not be issued until thirty months have elapsed from the filing of the application for prohibition, unless the Court has in the meantime dismissed that application. Subsection 7(5) however, authorizes the Court to abbreviate or extend that thirty-month period where it has not yet reached a decision on the application but where it finds that a party to the application “failed to reasonably cooperate in expediting the application.” Thus if, for example, the applicant unduly delays in bringing the matter on for a hearing on the merits, the respondent can move to have the Court shorten the time limit for the issue of a notice of compliance.

Given the multitude of interlocutory proceedings now outstanding in the Trial Division of this nature, it is apparent that in many cases the parties have indeed tried to treat such proceedings as actions for infringement or declarations of validity of patents. As a result they have tried to have the Court strike out or order amendments to notices of allegation.[8] Parties have as in the present case sought to strike out originating notices of motion and have sought the equivalent of discovery of the opposing party. However this Court made clear in Merck Frosst v. Canada[9] that these proceedings are not actions for determining validity or infringement: rather they are proceedings to determine whether the Minister may issue a notice of compliance. That decision must turn on whether there are allegations by the generic company sufficiently substantiated to support a conclusion for administrative purposes (the issue of a notice of compliance) that the applicant’s patent would not be infringed if the generic’s product is put on the market. It is useful to reiterate what the Court said in the Merck case [at pages 319-320].

The proceedings are not an action and their object is solely to prohibit the issuance of a notice of compliance under the Food and Drug Regulations. Manifestly, they do not constitute “an action for infringement of a patent” ….

Furthermore, since the regulations clearly allow the Minister, absent a timely application under s. 6, to issue a notice of compliance on the basis of the allegations in the notice of allegation, it would seem that on the hearing of such an application, at least where the notice has alleged non-infringement, the court should start from the proposition that the allegations of fact in the notice of allegation are true except to the extent that the contrary has been shown by the applicant. In determining whether or not the allegations are “justified” (s. 6(2)), the court must then decide whether, on the basis of such facts as have been assumed or proven, the allegations would give rise in law to the conclusion that the patent would not be infringed by the respondent.

In this connection, it may be noted that, while s. 7(2)(b) seems to envisage the court making a declaration of invalidity or non-infringement, it is clear to me that such declaration could not be given in the course of the s. 6 proceedings themselves. Those proceedings, after all, are instituted by the patentee and seek a prohibition against the Minister, since they take the form of a summary application for judicial review, it is impossible to conceive of them giving rise to a counterclaim by the respondent seeking such a declaration. Patent invalidity, like patent infringement cannot be litigated in this kind of proceeding. I can only think that the draftsperson had in mind the possibility of there being parallel proceedings instituted by the second person which might give rise to such a declaration and be binding on the parties. It is, in any event, evident that the declaration referred to in s. 7(2)(b) is not a precondition to the ultimate dismissal of the s. 6 application, the consequences of which are separately dealt with in s. 7(4).

It will be noted that the Regulations nowhere create or abolish any rights of action between the parties: instead they confer a right on the patentee to bring an application for prohibition against the Minister of National Health and Welfare. That is, the Regulations pertain to public law, not private rights of action. Of course the real adversary in such a prohibition proceeding is the generic company which served the notice of allegation.

If the Governor in Council had intended by these Regulations to provide for a final determination of the issues of validity or infringement, a determination which would be binding on all private parties and preclude future litigation of the same issues, it surely would have said so. This Court is not prepared to accept that patentees and generic companies alike have been forced to make their sole assertion of their private rights through the summary procedure of a judicial review application. As the Regulations direct that such issues as may be adjudicated at this time must be addressed through such a process, this is a fairly clear indication that these issues must be of a limited or preliminary nature. If a full trial of validity or infringement issues is required this can be obtained in the usual way by commencing an action.

For these reasons we are satisfied that the Trial Judge properly declined to make an order striking out, under Rule 419 or by means of the “gap” rule, as if this were an action. This is not to say that there is no jurisdiction in this Court either inherent or through Rule 5 by analogy to other rules, to dismiss in summary manner a notice of motion which is so clearly improper as to be bereft of any possibility of success.[10] Such cases must be very exceptional and cannot include cases such as the present where there is simply a debatable issue as to the adequacy of the allegations in the notice of motion.

Having come to this conclusion on the availability of striking out in such circumstances, I will not deal with the other finding of the learned Trial Judge that the originating notice of motion does in fact disclose a reasonable cause of action. I would not wish it to be thought, in not dealing with that issue, that this Court expresses any views on the conclusions of the learned Trial Judge in this respect. The ultimate adequacy of the respondents’ allegations and evidence must be addressed by the judge hearing the application for prohibition on its merits.

Compelling Answers on Cross-Examination

In the proceedings before Noël J. the appellant had also requested that he order Robert J. Little, the deponent for the respondents Pharmacia and Farmitalia, to re-attend for further cross-examination on his affidavit and to reply to questions which he previously refused to answer. Noël J. declined to order such answers on the grounds that certain questions were not relevant to the issues to be addressed in the application for prohibition. In the case of certain questions allegedly related to credibility he examined the document supposedly creating an inconsistency in Mr. Little’s position and decided that it did not.

I have examined these questions carefully and have concluded that there is no basis upon which this Court should interfere with the exercise of the Trial Judge’s discretion. As indicated earlier, the Court should not interfere unless the trial judge has proceeded on an erroneous principle of law or on a misapprehension of the facts, or unless the decision would cause some injustice. None of these criteria have been met by the appellant in the present case. This is not to suggest of course that the appellant cannot make some of the same arguments in support of the proposition that the applicants for prohibition have not adequately proven their case. That is a matter to be argued before the judge of the Trial Division hearing the application for prohibition.

Disposition

This appeal should therefore be dismissed with costs.

Stone J.A.: I agree.

Robertson J.A.: I agree.

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