COURT FILE NO.: CV-09-391938
DATE: 20180926
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
APOTEX INC.
Andrew R. Brodkin and Jerry Topolski, for the Moving Party, Apotex Inc.
Plaintiff/Defendant by Counterclaim/ Moving Party
- and -
ABBOTT LABORATORIES, LIMITED, TAKEDA PHARMACEUTICALS COMPANY LIMITED, and TAKEDA PHARMACEUTICALS AMERICA, INC.
Defendants/Plaintiffs by Counterclaim/Responding Parties
James Holtom and Steve Mason, for the Responding Party, Abbott Laboratories Limited.
Christopher Van Barr and Kiernan Murphy, for the Responding Parties, Takeda Pharmaceuticals Company Limited and Takeda Pharmaceuticals America, Inc.
Heard: June 27, 2018, at Toronto, Ontario
Michael G. Quigley J.
REASONS FOR RULING:
MOTION TO AMEND PLEADINGS
Overview
[1] This motion is the latest to arise in the context of the protracted litigation between Apotex Inc. (“Apotex”) and Abbott Laboratories Limited (“Abbott”), Takeda Pharmaceuticals Company Limited, and Takeda Pharmaceuticals America, Inc. (collectively, “Takeda”) relating to the patented medicine Prevacid®, or “Lansoprazole” as it is generically known. Abbott and Takeda are the inventors of Lansoprazole, and they hold its patent rights. Lansoprazole is used by people who suffer from gastro-esophageal reflux disease, ulcers, and related conditions. I heard this motion as the Case Management Judge assigned to this matter since 2011.
[2] On February 27, 2017, I granted summary judgment to Apotex for damages under section 8 of the Patent Act[^1] and ordered the matter to proceed to a damages trial.[^2] On June 5, 2017, a Case Management Order was issued relating to that trial, which is scheduled to commence January 14, 2019 and run for eight to ten weeks.
[3] Central to that trial will be the validity of certain patents owned by Abbott and Takeda, and whether, as they contend, Apotex infringed those patents in its manufacture of Apo-lansoprazole, or whether, as Apotex contends, those patents are invalid.
[4] If the patents are valid and Apotex infringed them, then Abbott and Takeda’s counterclaim may substantially reduce Apotex’s s. 8 damages entitlement. If the patents are found to be invalid, then Apotex could not have infringed them, so, apart from other lines of argument that may be raised by the Defendants, it would remain to determine Apotex’s s. 8 damages at trial on its own, without counterclaim.
Issues on this Motion and Position of the Parties
[5] On this motion, Apotex seeks leave to serve and file:
(i) a Fresh as Amended Reply and Defence to Counterclaim to the Amended Amended Statement of Defence and Counterclaim of Abbott Laboratories, Limited;
and
(ii) a Fresh as Amended Reply and Defence to Counterclaim to the Amended Amended Statement of Defence and Counterclaim of Takeda Pharmaceuticals America, Inc., Takeda Pharmaceutical Company Limited and Takeda Pharmaceuticals North America, Inc.
[6] The impact of the Supreme Court of Canada decision in AstraZeneca Canada Inc. v. Apotex Inc.[^3] is central to this motion. Apotex claims that the amendments sought by this motion “reflect the substantive changes to patent law,” articulated in that decision that put an end to the so-called “promise of the patent doctrine.”
[7] In AstraZeneca, the Supreme Court struck down the “Promise Doctrine” that previously allowed patents to be invalidated where they did not live up to a “promise” of utility described in the patent. However, Rowe J., writing for the Court, interpreted s. 2 of the Act as requiring only one fulfilled promise. The court rejected the notion that further alleged promises, which might not be met, would nevertheless invalidate a patent whose key promise and representation was established on the evidence. This decision has been a blow to Apotex and other generic drug manufacturers who have relied on the Promise Doctrine to invalidate the patents of innovative drug manufacturers, thereby permitting the generic manufacturers to sell their generic equivalent without patent restriction.
[8] However, rather than considering the mischief of "overpromising" solely in the context of a patent's utility, Apotex argues that the Supreme Court effectively kept that doctrine alive by determining that any false or unfulfilled promises in a patent specification should instead be addressed when assessing other established grounds of invalidity. The other established grounds, which Apotex seeks to expand by these pleadings amendments, are “over-breadth and insufficiency” (i.e., failure to comply with s. 27 of the Act), and “the making of wilfully misleading statements” in the petition or specification (i.e., failure to comply with s. 53 of the Act).
[9] Complete and correct pleadings are essential to ensure that the Court can do justice between the parties at the upcoming damages trial in this action. In keeping with that objective, Apotex claims that the proposed pleadings amendments (the “Contested Amendments”) assert a tenable cause of action or defence, with no clear evidence of prejudice to either Respondent that cannot be compensated by an award of costs. Thus, it claims the Rules of Civil Procedure[^4] require the Court to grant leave to permit it to amend its pleadings to include the Contested Amendments.
[10] The premise of this argument is that the Contested Amendments assert recognized grounds of patent invalidity that are now mandated by the Supreme Court, post-AstraZeneca, and that raise legal, rather than factual, issues. Apotex notes that discoveries are still ongoing and that the Respondents will still have ample opportunity to address the issues raised in the proposed pleading before the parties exchange scientific expert reports, as I have ordered, on or before October 1, 2018. Consequently, Apotex claims there is no substantive reason to deny the proposed amendments, and no possible prejudice that can be asserted by Abbott or Takeda.
[11] Abbott and Takeda oppose this motion. Their position is that the Contested Amendments are not legally tenable.
[12] Since November 8, 2011, when the pleading at issue was initially filed, Apotex has amended its pleadings twice, both times with consent of the Defendants. Six years later, on November 8, 2017, Apotex sought Abbott and Takeda’s consent to amend its pleading for a third time. Abbott and Takeda consented to Apotex’s prior amendments, and many of its proposed amendments on this third round, but they will not consent to the Contested Amendments (at paras. 102, 107, 108-09, 110-16, and 156-62), which they claim are legally untenable.
[13] The Contested Amendments are focused on patent infringement. In this case, Abbott and Takeda assert two patents against Apotex (the "Lansoprazole Patents"), both of which they claim were valid and subsisting during the relevant period. As such, Abbott and Takeda will argue at trial that even if Apotex could and would have been in a position to launch and sell Apo-lansoprazole during the Notice of Compliance (NOC) period of delay (which they deny), Apotex would not be entitled to any s. 8 damages. The reason is because in the “but-for world” which is the context within which Patent Act damages, if any, are to be determined, Apotex would have infringed the Lansoprazole Patents.
[14] As referenced by the defendants in their authorities, Apotex Inc. v. AstraZeneca Canada Inc.[^5] provides an example of this kind of result. In that case, at para. 107, Locke J. stated that:
In the end, I side with AstraZeneca. While I have considered Apotex' s argument concerning the balance in the Regulations, I have also considered Apotex's liability for patent infringement in the but-for world. I am not prepared to give Apotex's argument such weight as to award it compensation for being prevented from infringing the 653 Patent. [Emphasis added.]
[15] In response to Abbott and Takeda’s allegations of patent infringement, Apotex alleges that the Lansoprazole Patents are invalid under either or both of ss. 27 and 53 of the Act.
[16] Abbott and Takeda oppose this motion on the basis that Apotex is endeavouring to do indirectly what they say it can no longer do directly, that is, cloaking what are essentially untenable "Promise Doctrine" allegations with a new appearance under newly asserted grounds of (i) invalidity and insufficiency under s. 27(3) of the Act, and (ii) over-breadth, and, particularly relative to Takeda, claimed fraud on the Commissioner of Patents under s. 53(1) of the Act.
[17] Contrary to Apotex's position on this motion, Abbott and Takeda argue that AstraZeneca had no effect on the law as it relates to any other ground of invalidity (including insufficiency, overbreadth, or fraud on the Commissioner of Patents). Moreover, they note that in five cases since AstraZeneca was decided, the Federal Court has specifically rejected the efforts of generic drug manufacturers, including Apotex, to advance “Promise Doctrine” allegations under the guise of insufficiency.[^6] Apotex was a losing party to several of those decisions.[^7]
[18] However, in addition to the argument that there have been no changes to the law, it is plain that there have been no changes to the facts underpinning Apotex's claim. Apotex's factum admits there are no changes to the underlying facts. It specifically concedes that, "the Contested Amendments do not alter the existing factual disputes between the parties regarding any issue of invalidity" (emphasis added).
[19] In other words, it is plain that there is no new factual foundation claimed for the Contested Amendments. Rather, Apotex’s purpose on this motion is to establish that its existing allegations, which are admittedly no longer capable of supporting claims of patent invalidity under the now defunct “Promise Doctrine”, may nevertheless support new claims of patent invalidity under ss. 27 and 53 of the Act. Despite having twice previously amended its pleadings since 2009, Apotex has never before sought to rely on those other statutory provisions, based on identical factual allegations.
[20] At its core, the Defendant’s claim Apotex is trying to convert its previous “Promise Doctrine” based pleading and the same alleged facts into a “material misrepresentation” pleading under s. 53 of the Act. The jurisprudence recognizes s. 53 pleadings as allegations of fraud.
[21] Clearly, however, this is the first time since this action began nine years ago (and many years after discovery began), that Apotex has asserted that Takeda engaged in “fraudulent misrepresentation” to obtain the patents that Takeda asserts in this case, and that Takeda’s claims are thus invalid pursuant to s. 53 of the Act. The Respondents regard this as a transparent attempt to “re-clothe a failed doctrine in a new trumped-up costume”, an attempt they argue I should reject on this motion. Further, given Apotex's “untenable” allegations of fraud against Takeda, they ask that costs be awarded on a heightened scale.
Analysis
[22] The question on this motion is clear: While abolishing the “Promise Doctrine”, did the Supreme Court nevertheless intend that promise based claims of patent invalidity could now be brought under ss. 27 and 53 of the Act? Apotex says yes. Abbott and Takeda say no.
[23] Apotex relies on several passages from AstraZeneca and the Federal Court of Appeal’s decision in Eli Lilly Canada Inc. v. Teva Canada Limited[^8] to support the Contested Amendments which, for the first time in this litigation, would plead insufficiency, overbreadth, and fraud under ss. 27(3), 58 and 53.
[24] In AstraZeneca, notwithstanding its repudiation of the Promise Doctrine, the Supreme Court states as follows, at paras. 45-46:
45 Supporters of the doctrine assert that the consequences of the Promise Doctrine play a key role in ensuring patentees do not "overpromise" in their patent applications. That is, a patentee will be dissuaded from stating the invention can be used for things that are not sufficiently established at the time of filing if doing so would risk invalidating the entire patent. The utility requirement should not be interpreted, however, as the Federal Courts have done, to address such concerns. Nonetheless, overpromising is a mischief.
46 The scheme of the Act treats the mischief of overpromising in multiple ways. There are consequences for failing to properly disclose an invention by claiming, for instance, that you have invented more than you have. A disclosure which is not correct and full, or states an unsubstantiated use or operation of the invention, may be found to fail to fulfill the requirements of s. 27(3). An overly broad claim may be declared invalid; however, under the operation of s. 58 of the Patent Act, remaining valid claims can be given effect. As well, this mischief may result in a patent being void under s. 53 of the Act, where overpromising in a specification amounts to an omission or addition that is "wilfully made for the purpose of misleading".
[25] In Eli Lilly, at paras. 32 and 46-47, Laskin J. commented on the issue as follows:
[32] The Supreme Court concluded in AstraZeneca that the promise doctrine is not the correct approach to determine whether a patent has sufficient utility. The doctrine, it stated, is “unsound,” “not good law,” and incongruent with both the language and the scheme of the Patent Act (at paras. 36, 51). The Court characterized the doctrine as excessively onerous. It also saw it as conflating the statutory requirements of utility and disclosure (at paras. 37-38), and stated that the mischief of overpromising could be dealt with through other requirements for a valid patent, including that of sufficient disclosure. It held that to meet the utility requirement, “a scintilla of utility will do” (at para. 55).
[46] Lilly’s position as I understand it is that given the clarity of the decisions in AstraZeneca and Virgin Atlantic, the concerns ordinarily associated with deciding a new issue on appeal do not arise in this case: since the only ground on the Lilly’s patent was invalidated has now been conclusively held to have been wrong in law, this Court need look no further than AstraZeneca in treating the patent as valid for purposes of Lilly’s section 8 claim. Virgin Atlantic, it argues, then applies to reduce the damages to nil.
[47] In my view things are not so simple. For one thing, in this case, unlike in Virgin Atlantic, the subsequent decision related to a patent different from the patent in question. For another, it does not follow from the decision in AstraZeneca that Lilly’s patent would necessarily have been found to be valid if validity had been litigated after the decision was rendered. Parties shape their trial evidence and argument to the law as it exists at the time of trial. The evidence and argument before the trial judge in this case would inevitably have been different if AstraZeneca had been the governing law. That is all the more likely given the Supreme Court’s indication in AstraZeneca that at least some of the concerns that animated the promise doctrine can better be dealt with as issues of sufficiency of disclosure. Following AstraZeneca, generic drug companies have, not surprisingly, sought to recast arguments that were initially made as utility arguments as arguments going to sufficiency and other grounds of invalidity (Pfizer Canada Inc. v. Teva Canada Limited, 2017 FC 777, [2017] F.C.J. No. 944 at paras. 313 and 315; Apotex Inc. v. Shire LLC, 2017 FC 831, [2017] F.C.J. No. 906 (Proth.) at paras. 5-6). [Emphasis added.]
[26] Apotex argues that the reasons of Laskin J. in Eli Lilly agree with what it claims the Supreme Court decided in AstraZeneca – that even if the Promise Doctrine is no longer good law for s. 2 validity purposes, it could nevertheless still invalidate a patent based on s. 28 or 53 if the facts pleaded would support findings of invalidity under those provisions, that is, overbreadth or misrepresentation or fraud.
[27] There is superficial attraction to Apotex’s position, based on the arguably permissive language of the two references quoted above from AstraZeneca and Eli Lilly. Upon further more careful reflection, however, I have rejected Apotex’s position, taking specific account of the reasoning in the subsequent decisions of the Federal Court that have rejected the repackaging of “Promise Doctrine” based pleadings to satisfy the invalidity grounds set out in ss. 28 and 53. I side with the conclusions reached consistently since AstraZeneca by the specialist bench of the Federal Court, and I regard Laskin J.’s comments in Eli Lilly as case specific and simply a gloss on the language of the Supreme Court in the context of the circumstances of that case. Having specifically overruled the Promise Doctrine as bad law, it is not evident and indeed is counterintuitive that the Supreme Court intended that promise based arguments would simply be imported into claims of overbreadth or misrepresentation under those sections.
[28] I find extensive support of that position, not only in the significant pushback of the Federal Court in a number of cases decided since AstraZeneca, and specifically the decision of Manson J. in Apotex Inc. v. Pfizer Canada Inc., but also in the academic commentary of Professor Siebrasse, that we should “whack the zombies dead once and for all.”[^9] The five decisions of the Federal Court all support the proposition that “the zombies really are dead”, that is, that a party cannot change what was really a promise based pleading into one that could result in invalidity under s. 27 or 53, even though the Supreme Court recognized that there are “mischiefs” that could fall under those heads.
[29] Even though our practice rules language is permissive, indeed mandatory, that still does not permit a legally untenable pleading. Based upon the four or five cases decided at the Federal Court by Brown and Manson JJ. and other patent law specialists, it does not logically make sense that having pronounced the Promise Doctrine “dead” once and for all, the Supreme Court would have had in mind having it resurrected in another guise. That, in my view, is what Apotex is doing in this case by “repackaging” its long established facts as pleaded, which remain unchanged, to now seek findings of invalidity of the Lansoprazole Patents, under both s. 27 relative to disclosure, and s. 53 on the basis of allegations of wilful misrepresentation or fraud against Takeda.
[30] The Lansoprazole patents are the foundation of Abbott and Takeda’s counterclaim against Apotex. While Apotex was granted summary judgment to s. 8 damages for Lansoprazole being improperly excluded from the marketplace, those damages remain to be determined in the 10-week trial scheduled to run from January 9, 2019 till the end of March, 2019. That trial will be all about (i) the quantification of Apotex’s s. 8 damages, and (ii) the validity of the Lansoprazole Patents, because if they are valid, then Abbott and Takeda will have a valuable counterclaim against Apotex that could partially or fully offset any s. 8 damages. Indeed, following the logic of Locke J. in Nexium, it could simply result in the outright denial of damages to Apotex.
[31] I had hoped that I would have had the benefit of the reasons of the Federal Court of Appeal in Apotex’s appeal of the decision on Manson J. in Apotex v. Pfizer before releasing these reasons. Indeed, after this motion was heard, I advised the parties that I intended to await that decision before releasing this decision, because the issue on appeal there before the Federal Court of Appeal was exactly the same issue that presents itself in this case. However, having completed these reasons some weeks ago, in the context of the tight schedule leading to trial in this case, I find I can no longer delay the release of these reasons. However, I will release an addendum to these reasons once the Federal Court of Appeal decision is released, which may be by the end of the next month.
[32] I accept that if a party pleads a cause of action properly, for example, misrepresentation or fraud under s. 53, covering off all of the necessary elements of that cause of action under those other provisions, then the pleading could still survive even if the misrepresentation happens to be what someone might call a “promise”. However, in my view, that is not the nature of the pleading before me.
[33] The Contested Amendments relative to allegations of fraud against Takeda make this point, but they require further discussion. The question will be the language of the pleading, but, given the legal elements of civil fraud, a mere repackaging of a Promise Doctrine based pleading will not meet the factual requirements of a s. 53 breach. I find that Apotex’s Contested Amendments, and specifically their fraud allegations against Takeda, do not satisfy the requirements for s. 53 allegations.
[34] This Court has previously addressed its concerns regarding the required specificity and gravity of pleading alleging fraud:
Fraud is a serious charge carrying with it the allegation of not only an actionable wrong but also an allegation of moral turpitude. The allegation alone, if publicized, could severely and irremediably damage a defendant’s reputation. In view of the absolute privilege enjoyed by pleadings, Rule 25.06(8) requires that full particulars of the material facts alleged to constitute the claim be pleaded.[^10] [Emphasis added.]
This Court has therefore stressed the severity of such allegations and the importance of a scrutinized analysis to avoid their tactical usage.
[35] Pleadings in support of allegations of fraud need to satisfy that higher threshold than applies to other pleadings, and the elements of the allegation must be strictly pleaded.[^11] As noted above, r. 25.06(8) of the Rules expressly requires that allegations of fraud or misrepresentation, malice or intent contain “full particulars”. That demands that a party alleging fraud or willful misrepresentation, equivalent to fraud, set out precisely what each alleged wrongful act is, and the “when, what, by whom and to whom” of the relevant circumstances.[^12]
[36] Beyond the heightened obligations broadly applicable in this Court to all allegations of fraud, malice, and intent, the Federal Court’s jurisprudence has also specifically recognized the gravity of s. 53 allegations. In consequence, it has also imposed elevated pleading requirements. Subsection 53(1) of the Act expressly contemplates that the specified misrepresentation have been “willfully made for the purpose of misleading.” It does not seem to be mere coincidence that the Supreme Court emphasized the language of s. 53 in its decision in AstraZeneca.[^13] As well, the Courts have repeatedly shown their willingness to impose costs sanctions on parties who unsuccessfully pursue allegations of fraud under s. 53 of the Act.[^14]
[37] The jurisprudence therefore required that s. 53 fraud allegations be pled with particularity.[^15] For example, in Shire 2017, the Federal Court held that:
…section 53 allegations are essentially allegations of fraud and state of mind, which require, pursuant to Rule 181 of the Federal Courts Rules, full particulars. The pleadings now proposed contain no particulars of exactly who made what statements to the patent office, or of any factual basis upon which the Court might be able to conclude that this person or persons knew, at the time, that the statements were false or that these persons intended to mislead the patent office by making the statements. Pleadings of fraud are a serious matter. Parties should not make them recklessly and without sufficient evidence or a reasonable belief as to their truthfulness. Especially after discovery has been had, Apotex should have been able to set out the particular facts upon which a Court might find any particular state of mind or knowledge in any particular persons at any particular time.[^16] [Emphasis added.]
[38] The Federal Court jurisprudence since AstraZeneca has consistently rejected attempts to recast Promise Doctrine allegations as s. 53 fraud allegations. Indeed, in Shire 2017, the only case cited by Apotex and which addresses fraud, the Court rejected the allegations.
[39] Like this case, that was a case where Apotex sought to recast its Promise Doctrine allegations as s. 53 fraud allegations, adding only “bare allegations” that the applicant “knew statements to be untrue and made them willfully for the purpose of misleading”. The Court rejected those amendments, finding that a bare pleading that “the applicant was aware” was insufficient to support a pleading amendment to include allegations of willful misrepresentation or fraud under s. 53 of the Act.[^17]
[40] More recently, in Bristol-Meyers Squibb Canada Co. v. Apotex Inc.,[^18] the Court again struck down Apotex’s pleadings that again sought to recast utility allegations as s. 53 fraud allegations. The Court found that Apotex did not know why information was not included in the patent at issue, and thus could not know the motivation or intent of the inventors in excluding it. They could only speculate that it was done for an improper purpose, but that is an essential element of s. 53 of the Act. In the result, the Court struck the allegations because they were insufficiently “particularized such that it does not support the s. 53 allegations made by Apotex.”[^19]
[41] In my view, Apotex’s s. 53 fraud allegations are equally deficient in this case. As I have previously noted, Apotex expressly admits that it has merely recycled its Promise Doctrine allegations, and it specifically acknowledges that its s. 53 fraud allegations are not informed by anything other than AstraZeneca.
[42] A review of the Contested Amendments shows that they are merely repackaged Promise Doctrine allegations. Apotex refers only to “the applicants” making statements “asserting that the subject matter of the purported invention…possesses the practical and relevant utility…notwithstanding that such use(s) were unsubstantiated.” No particulars are set out. From this unsupported foundation, Apotex then claims that those statements were “willfully made for the purpose of misleading.”[^20]
[43] Apotex has extensively discovered Takeda’s representatives. In my view, if it was going to make this new claim, as it has, Apotex should have been able to provide detailed particulars of its fraud allegations, but none have been forthcoming. The deficiencies of the Contested Amendments that relate to s. 53 fraud is highlighted by inconsistencies within those pleadings. Apotex alleges on the one hand that the unspecified “applicants” failed to notify readers that their undisclosed studies did not demonstrate the utility of the patents, yet on the other hand it denies that there were any undisclosed studies. How can this be? A wilful intent to mislead on Takeda’s part could not possibly be based on an alleged omission from studies, when Apotex disputes those studies ever even existed.[^21]
[44] Apotex has admitted that its s. 53 allegations “do not alter the existing factual disputes between the parties regarding any issue of invalidity. The Contested Amendments focus on legal issues that are based on the patents themselves, and not on any previously undisclosed facts.”[^22] Section 53 of the Act requires an assertion of facts that could support the inference or conclusion of an intention to mislead, but the Contested Amendments do not add or particularize additional facts needed to assert fraud and intent, and as a result, those allegations as pleaded cannot support Apotex’s s. 53 fraud allegations. Further, even if it was appropriate to recast Promise Doctrine claims into s. 53 allegations, which I reject, a mere claim of knowledge that certain alleged benefits could not be substantiated would in any event be inadequate to satisfy the pleading requirements for fraud and intent to mislead under s. 53 of the Act.
[45] There are other deficiencies that are evident on the face of the Contested Amendments, but it will suffice for these reasons to simply refer to one other. On the face of the amended pleading, Apotex relies on generic, and virtually identical, allegations in respect of the two very distinct Lansoprazole Patents, the 741 Patent[^23] and the 010 Patent.[^24]
[46] However, there is no dispute that history shows that the 741 and 010 Patents disclose different subject matter relating to different inventions, invented by different inventors, at different times. Yet Apotex’s allegations of fraud in respect of those two very different patents are virtually identical. With no particularized factual support advanced, Apotex claims to seriously advance virtually identical allegations in respect of two very different patents. This defies any common sense logic. The repetition of allegations of wilful misrepresentation could and would never be the same in respect of two different patents, invented and patented at two different times, by different individuals. I reject that such claims can be accepted as sufficient to support these serious allegations that Apotex now seeks to pursue.
[47] Finally, and most importantly, the caselaw is plain that any party against whom such unfounded and deficient s. 53 fraud allegations are made, in this case Takeda, will be severely prejudiced if they are permitted to be advanced. As I have emphasized, fraud allegations are serious. They must be pled with specificity. Having not pled any fraud or misconduct by Takeda at any time before these amendments, and given the absence of specificity, it is plain and obvious that Apotex’s attempt to simply recast its Promise Doctrine allegations as s. 53 fraud allegations against Takeda must also fail. The allegation alone may severely damage Takeda’s reputation, as well as the reputation of its inventors.[^25] The mere publication of fraud allegations causes reputational harm. As such, I agree that the making of the allegation without foundation must entitle Takeda to heightened costs on this motion.
Conclusion
[48] For all of these reasons, Apotex’s request for leave to plead the Contested Amendments is dismissed. I accept Abbott and Takeda’s submissions that none of the Contested Amendments should be permitted. The motion is dismissed with costs on a party-party basis, but Takeda will be awarded elevated costs on a substantial indemnity basis to compensate it in the face of these improper and deficient s. 53 fraud allegations.
Michael G. Quigley J.
Released: September 26, 2018
COURT FILE NO.: CV-09-391938
DATE: 20180926
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
APOTEX INC.
Plaintiff/Defendant by Counterclaim/ Moving Party
- and –
ABBOTT LABORATORIES, LIMITED, TAKEDA PHARMACEUTICALS COMPANY LIMITED, and TAKEDA PHARMACEUTICALS AMERICA, INC.
Defendants/Plaintiffs by Counterclaim/Respondents
REASONS FOR RULING:
MOTION TO AMEND PLEADINGS
Michael G. Quigley J.
Released: September 26, 2018
[^1]: R.S.C. 1985, c. P-4 [the Act]. [^2]: Apotex Inc. v. Abbott Laboratories Ltd., 2017 ONSC 1348, 145 C.P.R. (4th) 185, aff’d 2018 ONCA 332. [^3]: 2017 SCC 36, [2017] 1 S.C.R. 943 [AstraZeneca]. [^4]: R.R.O. 1990, Reg. 194 [Rules]. [^5]: 2018 FC 181 [Nexium]. [^6]: Pfizer Canada Inc. v. Apotex Inc., 2017 FC 774, 150 C.P.R. (4th) 1, at paras. 355-66, Brown J.; Apotex Inc. v. Pfizer Canada Inc., 2017 FC 951, at paras. 38-53, Manson J.; Nexium, ibid, at paras. 33-35, Locke J.; Apotex Inc. v. Allergan (March 16, 2018), T-820-13 (F.C., Prothonotary Aalto). See also Hospira Healthcare Corporation v. Kennedy Trust for Rheumatology Research, 2018 FC 259, at paras. 255, 258, Phelan J. [^7]: Bristol-Myers Squibb Canada Co. v. Teva Canada Ltd., 2017 FCA 76, 146 C.P.R. (4th) 216, at para. 68; Apotex Inc. v. Eli Lilly Canada Inc., 2016 FCA 267, 142 C.P.R. (4th), at para. 37. [^8]: 2018 FCA 53, leave to appeal to S.C.C. requested, 38077 (April 23, 2018) [Eli Lilly]. [^9]: See, in general, Professor Norman Siebrasse’s set of “Promise Doctrine Zombie Watch” blogs, Sufficient Description: Observations on Canadian patent cases (blog), online: http://www.sufficientdescription.com/. [^10]: Balanyk v. University of Toronto (1999), 1999 CanLII 14918 (ON SC), 1 C.P.R. (4th) 300 (Ont. S.C.), at para. 102 [Balanyk]. [^11]: Ascent Incorporated v. Fox 40 International Inc., 2009 CanLII 36994 (Ont. S.C.), at para. 28, citing Toronto Dominion Bank v. Leigh Instruments Ltd. (Trustee of) (1998), 1998 CanLII 14806 (ON SC), 40 B.L.R. (2d) 1 (Ont. Gen. Div.), at para. 477, aff’d (1999) 1999 CanLII 3778 (ON CA), 45 O.R. (3d) 417 (Ont. C.A.), leave to appeal to S.C.C. refused, 27570 (August 3, 2000). [^12]: Balanyk, at para. 28, citing Lana International Ltd. v. Menasco Aerospace Ltd. (1996), 1996 CanLII 7974 (ON SC), 28 O.R. (3d) 343 (Ont. Gen. Div.). [^13]: At para. 46. [^14]: Apotex Inc. v. Shire LLC, 2017 FC 831, at para. 17, [Shire 2017]; Apotex Inc. v. Shire LLC, 2016 FC 1267, at para. 3, [Shire 2016]; and Eli Lilly Canada Inc. v. Apotex Inc., 2008 FC 142, 63 C.P.R. (4th) 406, at paras. 62-63, 192, aff’d 2009 FCA 97, 78 C.P.R. (4th) 388, leave to appeal to S.C.C. refused, 33165 (May 22, 2009). [^15]: Contour Optik Inc. v. Hakim Optical Laboratory Ltd., 2001 FCT 125, 201 F.T.R. 152, at para. 36. [^16]: At para. 17; see also Shire 2016, at para. 3. [^17]: Shire 2017, at para. 16. [^18]: Bristol-Meyers Squibb Canada Co. v Apotex Inc. (June 5, 2018), T-351-18 (F.C., Prothonotary Aalto). [^19]: Ibid. [^20]: Applicant’s Motion Record, Tab 1B, at paras. 141-147, 187-193. [^21]: Ibid, at paras. 146, 192. [^22]: Applicant’s Factum at para. 57. [^23]: Applicant’s Amended Pleading, at paras. 141-147. [^24]: Ibid, at paras. 187-193. [^25]: Balanyk, at para. 102.