T-1513-88
Imperial Chemical Industries PLC and I.C.I.
Pharma, Division Atkemix Inc. (Plaintiffs)
v.
Apotex Inc. (Defendant)
INDEXED AS: IMPERIAL CHEMICAL INDUSTRIES PLC V.
APOTEX INC.
Trial Division, Rouleau J.—Ottawa, December 14,
1988; January 12, 1989.
Patents — Infringement — Pharmaceutical products —
Compulsory licenses — Recent amendments to Act extending
monopoly of patentee in respect of importation of drugs and
sale of imported drugs and restricting rights of compulsory
licence holders — Federal Court having jurisdiction as issue
not matter of property and civil rights but of patent infringe
ment — Amendments not abrogating vested rights as compul
sory licence not conferring property rights — Amendments
apply to restrict sale of drugs already imported — Plaintiffs
meeting tests for obtaining interlocutory injunction.
Injunctions — Interlocutory injunction for infringement of
pharmaceutical product patent — Prima facie case test
favoured over serious issue to be tried test — Injunction to
issue, plaintiffs having shown irreparable harm in loss of
market position, balance of convenience in their favour.
Constitutional law — Charter of Rights — Interlocutory
injunction to restrain infringement of pharmaceutical product
patent — Charter s. 7 applicable to neither corporations nor
purely economic interests — Charter s. 15 inapplicable to
corporations.
Constitutional law — Distribution of powers — Patent Act
s. 41 not ultra vires Parliament as only incidentally dealing
with property and civil rights — Matter falling under Consti
tution s. 91(22).
The defendant had obtained a compulsory licence to import,
prepare, use and sell the heart medicine, Atenolol, under the
plaintiffs' patent. It had commenced selling the medication in
August 1988. In December 1987, the Patent Act was amended
so as to provide a patentee with an extended monopoly in
respect of the importation for sale for consumption in Canada
of the patented medicine. This meant that a compulsory licence
no longer permitted, for a certain period, the sale for consump
tion in Canada of medicine made from imported drugs. In
August 1988, the plaintiffs commenced an action against the
defendant for patent infringement, and in September 1988,
originated this application for an interlocutory injunction to
restrain the defendant from further infringing their patent by
importing and selling Atenolol in Canada.
The defendant argues that the Court lacks jurisdiction to
hear the case because the matter is one of contractual obliga
tion between the parties and that the amendments to the Patent
Act are ultra vires, dealing with property and civil rights. The
defendant further submits that the amendments are contrary to
sections 7 and 15 of the Charter and paragraph 1(a) of the Bill
of Rights. In the alternative, it argues that the amendments
should not retrospectively abrogate vested rights nor apply to
products that had already been imported when the amendments
came into effect. The defendant finally submits that the plain
tiffs have not met the required onus to be granted an
injunction.
Held, the application should be allowed.
This case has nothing to do with a contract between the
parties. Any breach of section 41.11 of the Act, which is what
is at issue herein, would be tantamount to patent infringement,
not to breach of contract. Furthermore, Parliament has juris
diction over patents pursuant to subsection 91(22) of the
Constitution Act, 1867. And even though property and civil
rights fall under provincial jurisdiction, Parliament is entitled
to create or regulate property in the course of exercising its
enumerated powers.
Corporations may not rely upon the equality provisions of
section 15 of the Charter and paragraph 1(a) of the Bill of
Rights and section 7 of the Charter has no application to purely
economic interests.
A compulsory licence does not confer a property right; it
merely gives the licensee permission to carry on an activity
which would otherwise be unlawful. The defendant, therefore,
has no vested rights which could have been abrogated by the
amendments. The amendments clearly restrict the importation
of Atenolol for sale for consumption in Canada regardless of
when the medicine was imported.
The weight of judicial authority in Canada in patent matters
leans toward use of the "prima facie case" test, rather than the
"serious issue to be tried" test, and to relaxing that standard
only where there exists strong evidence of irreparable harm and
balance of convenience. The plaintiffs have demonstrated a
strong prima facie case, that they might well suffer irreparable
harm by losing their market position and that the balance of
convenience lies in their favour.
STATUTES AND REGULATIONS JUDICIALLY
CONSIDERED
An Act to amend the Patent Act and to provide for
certain matters in relation thereto, S.C. 1987, c. 41, ss.
28, 33.
Canada Elections Act, R.S.C. 1970 (1st Supp.), c. 14, s.
67.
Canadian Bill of Rights, R.S.C. 1970, Appendix III, ss.
1(a), 2(c).
Canadian Charter of Rights and Freedoms, being Part I
of the Constitution Act, 1982, Schedule B, Canada Act
1982, 1982, c. 11 (U.K.), ss. 7, 15.
Constitution Act, 1867, 30 & 31 Vict., c. 3 (U.K.)
[R.S.C. 1970, Appendix II, No. 5] (as am. by Canada
Act, 1982, 1982, c. 11 (U.K.), Schedule to the Consti
tution Act, 1982, Item 1), ss. 91(22), 92(13).
Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, s. 20.
Federal Court Rules, C.R.C., c. 663, R. 469.
Patent Act, R.S.C. 1970, c. P-4, ss. 41 (as am. by R.S.C.
1970 (2nd Supp.), c. 10, s. 64; 1987, c. 41, s. 14), 41.11
(as en. idem, s. 15), 41.12 (as en. idem), 72.
CASES JUDICIALLY CONSIDERED
APPLIED:
Smith, Kline & French Laboratories Limited v. Attorney
General of Canada, [1986] I F.C. 274; (1985), 24 D.L.R.
(4th) 321 (T.D.), coed [1987] 2 F.C. 359; (1986), 34
D.L.R. (4th) 584 (C.A.); Parkdale Hotel Ltd. v. Canada
(Attorney General), [1986] 2 F.C. 514; 27 D.L.R. (4th)
19 (T.D.); Re Aluminum Co. of Canada, Ltd. and The
Queen in right of Ontario; Dofasco Inc., Intervenor
(1986), 29 D.L.R. (4th) 583 (Ont. Div. Ct.); Institute of
Edible Oil Foods v. Ontario (1987), 63 O.R. (2d) 436
(H.C.); Cutter Ltd. v. Baxter Travenol Laboratories of
Canada, Ltd. et al. (1980), 47 C.P.R. (2d) 53 (F.C.A.);
Samsonite Corp. v. Holiday Luggage Inc. (1988), 20
C.P.R. (3d) 291 (F.C.T.D.); American Cyanamid Co. v.
Ethicon Ltd., [1975] A.C. 396 (H.L.); Syntex Inc. v.
Apotex Inc., [1984] 2 F.C. 1012; 1 C.P.R. (3d) 145
(C.A.); Turbo Resources Ltd. v. Petro Canada Inc.,
[1988] 3 F.C. 235; (1988), 17 F.T.R. 28 (T.D.); Turf
Care Products Ltd. v. Crawford's Mowers & Marine Ltd.
et al. (1978), 95 D.L.R. (3d) 378 (Ont. H.C.).
DISTINGUISHED:
McCraken et al. v. Watson, [1932] Ex. C.R. 83;
Aktiebolaget Hassle v. Apotex Inc. (1987), 17 C.P.R.
(3d) 349 (F.C.T.D.); Meyer v. State of Nebraska, 262
U.S. 390 (1923); Re Mia and Medical Services Commis
sion of British Columbia (1985), 17 D.L.R. (4th) 385
(B.C.S.C.); Wilson v. British Columbia Medical Services
Commission, B.C.S.C. No. 1566, 1988, not yet reported.
COUNSEL:
James D. Kokonis, Q.C. and G. Gaikis for
plaintiffs.
Malcolm S. Johnston, Q.C., Patricia A. Rae,
Harry B. Radomski for defendant.
SOLICITORS:
Smart & Biggar, Ottawa, for plaintiffs.
Malcolm Johnston & Associates, Toronto, for
defendant.
The following are the reasons for order ren
dered in English by
ROULEAU J.: This action by the plaintiffs,
brought pursuant to Rule 469 of the Federal
Court Rules [C.R.C., c. 663], is for an interlocuto
ry injunction restraining the defendant from
infringing certain of the claims of the plaintiffs'
Canadian patent.
The main issue arises out of recent amendments
[S.C. 1987, c. 41] to the Patent Act [R.S.C. 1970,
c. P-4] which have the effect of extending the
monopoly for pharmaceutical products and pur
portedly restricts the rights of producers who have
obtained compulsory licences.
The plaintiff Imperial Chemical Industries
(ICI) is a British pharmaceutical manufacturer
and retailer with its head office located in London,
England. The plaintiff ICI Pharma is a Canadian
subsidiary wholly owned by ICI. ICI Pharma's
principal office is located in Mississauga, Ontario.
The defendant is a Canadian corporation involved
in the manufacture and retail of pharmaceuticals
and carries on business in Weston, Ontario.
The plaintiff ICI is the owner of Canadian
patent 945,172 granted in 1974 in respect of the
invention for the process of manufacturing
alkanolamine derivatives. The letters patent con
tain some thirty-six claims in relation to this inven
tion and includes the process for the manufacture
of a medicine known by the generic name Ateno-
lol, a leading heart medicine. The patent is due to
expire in 1991.
In 1975, the year following the grant of the
Canadian patent, the plaintiff ICI performed
extensive research and testing of Atenolol and
eventually brought the drug into the British
market in 1976. ICI Pharma received a Notice of
Compliance from Health and Welfare Canada on
March 10, 1983 and has been marketing the drug
in this country under the trade name Tenormin. In
order to encourage sales, ICI Pharma undertook a
promotional and educational program which has
had the effect of increasing sales of the drug from
$4 million in 1984 to a projected $33 million in
1988. The drug is currently one of the most popu
lar heart drugs in Canada. At present, sales of
Atenolol/Tenormin account for approximately
75% of the revenue generated by the plaintiff ICI
Pharma. It is expected that when the patent
expires in 1991, approximately one-half of these
sales will be lost to competitors.
On March 3, 1986, the defendant applied for a
compulsory licence under section 41 of the Patent
Act (R.S.C. 1970, c. P-4, as am. [by R.S.C. 1970
(2nd Supp.), c. 10, s. 64]) to import, prepare, use
and sell Atenolol under the plaintiffs' patent. On
July 15, 1987 the Commissioner of Patents grant
ed to the defendant an interim licence pursuant to
subsections 41(5) through 41(9) of the Act and on
February 15, 1988 that interim licence was
replaced by a regular licence under subsection
41(4) of the Act. Pursuant to this licence, the
defendant imported Atenolol into Canada and
commenced selling it in limited quantities on the
Canadian market in August 1988.
Effective December 7, 1987, section 41 of the
Patent Act was amended [by S.C. 1987, c. 41, s. 4]
so as to provide a patentee with an extended
monopoly in respect of the importation for sale for
consumption in Canada of the patented medicine.
The effect of the new legislation is that a licence
granted under section 41 of the Act no longer
permits, for a period of time, the sale for consump
tion in Canada of medicine made from imported
drugs [my emphasis].
In light of these legislative amendments, when
the plaintiffs learned on August 2, 1988 that the
defendant proposed to market Atenolol in Canada,
they sent a cease and desist letter to the defendant.
No reply was received and the plaintiffs became
aware that the defendant was receiving orders for
Atenolol. Consequently, on August 5, 1988 the
plaintiffs commenced an action against the defend-
ant for patent infringement and on September 27.
1988 originated this application for an interlocuto
ry injunction restraining the respondent from fur
ther infringing their patent by importing and sell
ing Atenolol in Canada.
The relevant amendments to the Patent Act are
sections 41.11 and 41.12 which provide as follows:
41.11 (1) Subject to this section but notwithstanding any
thing in section 41 or in any licence granted under that section,
no person shall under a licence granted under that section in
respect of a patent for an invention pertaining to a medicine,
regardless of when the licence was granted, have or exercise
any right,
(a) where the invention is a process, to import the medicine
in the preparation or production of which the invention has
been used, if the medicine is for sale for consumption in
Canada; or
(b) where the invention is other than a process, to import the
invention for medicine or for the preparation of production of
medicine, if the medicine is for sale for consumption in
Canada.
(2) The prohibition under subsection (1) expires in respect of
a medicine.
(a) seven years after the date of the notice of compliance
that is first issued in respect to the medicine, where, on June
27, 1986, the notice of compliance has been so issued; and
(i) a licence has been granted under section 41 in respect
of the medicine but no notice of compliance has been
issued to the licensee in respect of the medicine; or
(ii) a notice of compliance in respect of the medicine has
been issued to a person other than the patentee but no
licence under section 41 in respect of the medicine has
been granted to the person;
(b) eight years after the date of the notice of compliance
that is first issued in respect of the medicine, where, on June
27, 1986, the notice of compliance has been so issued and
neither a licence under section 41 has been granted in respect
of the medicine nor a notice of compliance has been issued in
respect of the medicine to a person other than the patentee;
and
(e) ten years after the date of the notice of compliance that
is first issued in respect of the medicine where that notice of
compliance is issued after June 27, 1986.
(3) Subsection (1) does not apply in respect of a licence
pertaining to a medicine after the date of expiration of the first
patent granted in Canada in respect of that medicine.
(4) Subsection (I) does not apply in respect of any licence
pertaining to a medicine where on June 27, 1986, a licence has
been granted in respect of the medicine and a notice of
compliance in respect of the medicine has been issued to the
licensee.
41.12 Notwithstanding anything in section 41 or in any
application for a licence made or licence issued under that
section prior to the coming into force of this section, every
licence so applied for or granted in respect of a patent for an
invention pertaining to a medicine shall be deemed, for the
purposes of this Act, to have been applied for or granted to
authorize, in addition to any other matters applied for or
authorized thereby,
(a) where the invention is a process, the use of the invention
for the preparation or production of medicine; or
(b) where the invention is other than a process, the making
or use of the invention for medicine or for the preparation of
production of medicine.
The plaintiffs submit that section 41.11 of the
Patent Act affects the situation where previously a
licence may have been granted to import and sell
medicine in Canada. Under the present legislation,
the plaintiffs argue, the section, in effect, creates a
licence with restrictions. Where the importation is
for sale for consumption in Canada, the section
renders the importation unlawful. In other words,
the section removes the licence as a defence to an
assertion of patent infringement. The licence being
removed as a defence means that any act which is
reserved for the exclusive use of the patentee is an
infringement. Therefore, the plaintiffs maintains,
the sale of unlawfully imported medicine is an
infringement of the patent and future importation
for sale for consumption in Canada is prohibited.
Since the first Notice of Compliance issued to the
plaintiffs on March 10, 1983 and no other person
had received a Notice of Compliance or a compul
sory licence by June 27, 1986, then according to
the new legislation, the prohibition contained
within subsection 41.11(1) extends for a period of
eight years, expiring March 10, 1991.
The plaintiffs maintain that by importing and
selling Atenolol in Canada, the defendant is
infringing the plaintiffs' patent. Furthermore, the
plaintiffs argue that this Court ought to issue an
interlocutory injunction in their favour because on
the facts, they are able to meet the tripartite test
established by the jurisprudence which would jus
tify the grant of this extraordinary and discretion
ary remedy. That is, the plaintiffs are able to
establish, first, not simply an arguable case, but a
strong prima facie case which in all likelihood
would lead a trial judge to conclude, based on the
facts, that there is infringement; second, that there
exists the danger of irreparable harm to the plain
tiffs; and third, that the balance of convenience is
clearly in favour of the plaintiffs.
The defendant submits four main heads of
argument:
I Lack of jurisdiction in this Court because
there exists a contractual obligation between
the parties and is therefore in the realm of
property and civil rights.
Il Amendments to the Patent Act are contrary
to the Canadian Charter of Rights and Free
doms [being Part I of the Constitution Act,
1982, Schedule B, Canada Act 1982, 1982, c.
11 (U.K.)].
III The amendments to the Patent Act should be
interpreted in such a manner as to allow for
the distribution of imported products which
were landed in Canada before the amend
ments; the statutes should not be interpreted
retrospectively.
IV The plaintiffs have not met the required onus
to be granted an injunction.
I
The defendant challenges both the jurisdiction
of this Court to deal with the issues raised by this
case and the constitutional validity of the amend
ments to section 41 of the Patent Act.
With regards to the Court's jurisdiction, the
defendant maintains that pursuant to section 72 of
the Patent Act, a compulsory licence granted
under the Act operates as if embodied in a deed
between licensor and licensee. Therefore, the
defendant argues, the lis between the plaintiffs and
defendant is an alleged breach of contract, and
such an action is not within the jurisdiction of this
Court.
As to the constitutional validity of the new
legislation, the defendant's arguments are numer
ous. First, the defendant maintains that since the
relationship between the parties (i.e. a patentee
and a licensor) are in contract, the amendments to
section 41 are ultra vires the Parliament of
Canada in that it is legislation in relation to
property and civil rights, matters which fall within
provincial jurisdiction.
II
The defendant submits that the amendments are
contrary to paragraphs 1(a) and 2(c) of the
Canadian Bill of Rights, R.S.C. 1970, Appendix
III, in that section 41.11 of the Patent Act pur
ports to revoke or suspend the defendant's contrac
tual right to use the plaintiff's property right and
the defendant has been deprived of its right with
out due process of law.
Further, the defendant maintains that the
amendments to the Patent Act are of no force and
effect in that they contravene sections 7 and 15 of
the Canadian Charter of Rights and Freedoms.
Sectionl5 guarantees the right of every individual
to the equal protection and benefit of the law
without discrimination. The underlying principle
of this section, according to the defendant, is that
persons who are similarly situated must be similar
ly treated and that any distinction will violate this
principle of equality if it has no rational and
reasonable justification. It is submitted that sec
tion 41.11 of the Patent Act discriminates between
two group of persons; those who, as of June 27,
1986 hold a licence under section 41 together with
a Notice of Compliance and those who, as of the
same date hold only a licence. The latter are
prohibited from importing medicine for sale or
consumption in Canada while the former are not.
The section further discriminates between a paten-
tee who holds a Notice of Compliance obtained
after June 27, 1986 and a licensee of that patentee
who obtains a Notice of Compliance after that
date. Upon the coming into force of section 41.11
the latter was no longer permitted to import the
medicine for sale for consumption in Canada.
Section 7 of the Charter guarantees everyone
"the right to life, liberty and security of the per
son" as well as the right not to be so deprived
"except in accordance with the principles of funda
mental justice". It is the defendant's contention
that this section applies to the issuance of business
licences necessary to carry on business lawfully
and that the refusal to issue a licence cannot be
upheld unless it is in accordance with the princi
ples of fundamental justice. Because section 41.11
interferes with the defendant's licence to carry on
business, it therefore constitutes an impairment of
the defendant's right to "life, liberty and security
of the person" and this impairment has not been in
accordance with the principles of fundamental jus
tice which means not only a right to a fair hearing,
but also includes elements of substantive fairness.
III
Aside from its arguments concerning the consti
tutional validity of section 41.11 of the Patent Act
the defendant makes certain submissions concern
ing the proper interpretation to be afforded to the
legislation should this Court find the legislation to
be valid.
First, the defendant argues that legislation is not
to be interpreted as retrospectively abrogating
vested rights and that there exists a presumption
within the rules of statutory interpretation that
proprietary rights are not to be taken away with
out provision being made for compensation. It is a
recognized rule, according to the defendant that
legislation should be interpreted, if possible, so as
to respect any vested rights. If there is any
ambiguity in the construction of a statutory enact
ment, the interpretation which is in favour of the
subject should be adopted.
Second, the defendant maintains that the proper
interpretation of section 41.11 prohibits the impor
tation of medicine into Canada for the purpose of
sale for consumption as of the date the legislation
was proclaimed into force and effect, that is,
December 7, 1987 and therefore, the defendant
argues the section does not apply to medicine
imported into the country prior to that date.
Because the defendant's inventory of over one
thousand kilograms of Atenolol was imported into
Canada between July 15, 1987 and November 19,
1987, prior to section 41.11 coming into effect, it
should not apply to the Atenolol which the defend
ant is now offering for sale.
IV
The defendant on the other hand, argues that an
interlocutory injunction should not issue because
the plaintiffs are unable to meet the onus thrust
upon them. They have failed. Further, the defend
ant submits that the plaintiffs have failed to prove
irreparable harm since any damages they may
suffer are readily quantifiable. To the contrary, it
is of the opinion that if an interlocutory injunction
were granted the defendant would face the threat
of irreparable harm in that it would suffer loss of
goodwill and commercial reputation which cannot
be measured in damages. Finally, it is the defend
ant's contention that the plaintiffs have failed to
prove that the balance of convenience lies in their
favour.
I intend to dispense with the jurisdictional issue
raised by the defendant. Section 72 of the Patent
Act does not, in my opinion, apply to this action,
which is solely one of patent infringement. The
cases relied upon by the defendant namely,
McCracken et al. v. Watson, [1932] Ex. C.R. 83
and Aktiebolaget Hassle v. Apotex Inc. (1987), 17
C.P.R. (3d) 349 (F.C.T.D.) simply do not have
application to the facts now before the Court. In
the McCracken case, the contract in question dealt
only incidentally with the patent licence, and
hence adjudication of the contract was outside the
jurisdiction of the Exchequer Court. In the
Aktiebolaget case, Dubé J., found that the state
ment of claim defined a cause of action under a
contract regarding the payment of royalties under
a compulsory licence granted pursuant to subsec
tion 41(4) of the Patent Act. As in McCracken,
the contract dealt only incidentally with a matter
over which the Court had jurisdiction and that was
not sufficient to clothe the Court with jurisdiction
to preside over the collection of unpaid royalties
which was first and foremost a matter arising
under contract.
The facts before this Court have nothing to dc
with a contract between the parties. Section 41.11
of the Patent Act provides to the plaintiffs a
limited monopoly to import Atenolol for sale for
consumption in Canada. Any breach of that sec
tion by a holder of a compulsory licence, such as
the defendant, would be tantamount to patent
infringement and not to a breach of any contract
which may exist between the parties pursuant to
section 72 of the Act. The plaintiffs are not suing
on the licence or for any breach of the licence.
Furthermore, subsection 91(22) of the Consti
tution Act, 1867 [30 & 31 Vict., c. 3 (U.K.)
[R.S.C. 1970, Appendix II, No. 5] (as am. by
Canada Act 1982, 1982, c. 11 (U.K.), Schedule to
the Constitution Act, 1982, Item 1)] specifically
confers on Parliament jurisdiction over patents of
invention. Section 20 of the Federal Court Act
[R.S.C. 1970 (2nd Supp.), c. 10] confers on this
Court jurisdiction in "all ... cases in which a
remedy is sought under the authority of any Act
of ... Parliament ... or at law or in equity,
respecting any patent of invention". In Smith,
Kline & French Laboratories Limited v. Attorney
General of Canada, [1986] 1 F.C. 274; (1985), 24
D.L.R. (4th) 321 (T.D.), confirmed by the Court
of Appeal [1987] 2 F.C. 359; (1986), 34 D.L.R.
(4th) 584, the plaintiffs contended that subsection
41(4) of the Patent Act was legislation in relation
to property and civil rights in the province and
hence ultra vires the power of the Parliament of
Canada, being a matter assigned to the provinces
under subsection 92(13) of the Constitution Act,
1867. It was indeed a similar argument to the one
being advanced here by the defendant. Strayer J.,
finding the section of the Patent Act to be within
Parliament's jurisdiction made the following com
ments at pages 294 F.C.; 349 D.L.R., equally
applicable, I might add, to the facts of this case:
It appears to me that under its authority with respect to
patents of invention and discovery, Parliament is entitled to
regulate patents in a variety of ways. Essentially, this power
enables it to create a monopoly for one party and to exclude
other parties from the use, manufacture, sale, or importation of
products which are the subject of a patent. The granting of
such a patent, according to the jurisprudence, confers an
intangible property right on the patentee. It is probably true
that in the absence of this specific assignment of authority to
Parliament with respect to "patents" they would have fallen
under provincial jurisdiction with respect to property and civil
rights. But Parliament is not precluded from creating or regu
lating property in the course of exercising its enumerated
powers.
Clearly, this Court has jurisdiction to deal with
the proceedings now before it.
II
The next issue concerns the constitutional validi
ty of the amendments to section 41 of the Patent
Act. Section 15 of the Canadian Charter of Rights
and Freedoms and paragraph 1(a) of the Canadi-
an Bill of Rights provide as follows:
15. (1) Every individual is equal before and under the law
and has the right to equal protection and equal benefit of the
law without discrimination and, in particular, without discrimi
nation based on race, national or ethnic origin, colour, religion,
sex, age or mental or physical disability.
1....
(a) the right ... to life, liberty, security of the person and
enjoyment of property, and the right not to be deprived
thereof except by due process of law;
This Court has had the opportunity on previous
occasions of examining the question of whether the
equality provisions contained within section 15 of
the Charter and paragraph 1(a) of the Bill of
Rights apply to corporate entities. It has consist
ently been held that a corporation is not entitled to
rely on these provisions.
In Smith, Kline & French Laboratories Limited
v. Attorney General of Canada, the plaintiff
sought, inter alia, a declaration that subsection
41(4) of the Patent Act, R.S.C. 1970, c. P-4, was
null and void as being contrary to section 15 of the
Charter and paragraph 1(a) of the Bill of Rights.
Strayer J. held that the corporate plaintiffs did not
fall within the ambit of protection afforded by
these equality provisions because they applied only
to "every individual", a term which did not include
corporate entities. His Lordship stated at pages
298-299 F.C.; 352 D.L.R.:
The plaintiffs contend that subsection 41 (4) of the Patent
Act is inconsistent with paragraph [1 ](a) [of the Bill of Rights]
in that it has the effect of denying individuals the enjoyment of
property without due process of law.
It is clear that the term "individual" does not include bodies
corporate. Therefore the corporate plaintiffs have no claim
under paragraph 1(a) of the Canadian Bill of Rights.
And later at pages 315-316 F.C.; 365-366 D.L.R.:
For the same reasons as noted above in connection with
paragraph I(a) of the Canadian Bill of Rights, the corporate
plaintiffs are not potentially within the protection of section 15
because it applies only to "every individual".
In Parkdale Hotel Ltd. v. Canada (Attorney
General), [ 1986] 2 F.C. 514; 27 D.L.R. (4th) 19
(T.D.), the plaintiff brought an action for a decla
ration that section 67 of the Canada Elections Act,
R.S.C. 1970 (1st Supp.), c. 14, was of no force and
effect. Discussing the meaning of the work
"individual" in section 15 of the Charter, Mr.
Justice Joyal stated at pages 538-539 F.C.; 36-37
D.L.R.:
It appears clear from the wording of section 15 that its
protective umbrella only extends to physical persons and that a
corporation or other "personne morale" is left out in the rain as
it were. The term "individual" as it appears in section I of the
Canadian Bill of Rights has been the subject of judicial
determination in the R. v. Colgate Palmolive case which I have
previously cited and Doyle J. in that case ruled that the term
did not include a corporation. In a more recent case, the term
"individual" as found in section 15 of the Charter was the
subject of inquiry. In Smith, Kline & French Laboratories
Limited v. Attorney General of Canada, [ 1986] 1 F.C. 274;
(1985) [24 D.L.R. (4th) 321], 7 C.P.R. (3d) 145 (T.D.),
Strayer J. in his meticulous reasons for judgment does not seem
to have had to spend much soul-searching in reaching the
conclusion that a corporation could not seek the protection of
section 15 of the Charter.
Other courts, having had the opportunity to
decide the correct interpretation and ambit of
applicability of section 15, have come to a similar
conclusion. Perhaps the most succinct statement is
made in Re Aluminum Co. of Canada, Ltd. and
The Queen in right of Ontario; Dofasco Inc.,
Intervenor (1986), 29 D.L.R. (4th) 583 (Ont. Div.
Ct.), wherein Mr. Justice Montgomery stated at
page 593:
In my view, s. 15 is restricted to the protection of individuals
and does not apply to corporate entities. It is a part of the
Charter that protects the dignity and worth of human beings
against governmental instrusion that would make distinction
between individuals based upon human attributes or character
istics.
I am of the opinion that the language used in
section 15 is unequivocal. The equality guaranteed
and the discriminatory protection it affords are
directed at natural persons and not at corpora
tions.
I turn now to the question of whether the
amendments to section 44 of the Patent Act are of
no force and effect because they are contrary to
section 7 of the Charter which provides as follows:
7. Everyone has the right to life, liberty and security of the
person and the right not to be deprived thereof except in
accordance with the principles of fundamental justice.
The defendant corporation is included within
the protection of the above section as the term
"everyone" includes a corporation. However, the
rights in issue must involve the concepts of "liber-
ty" or "security" of the person. In Smith, Kline &
French Laboratories Limited v. Attorney General
of Canada, both the Federal Court Trial Division
and the Federal Court of Appeal held that section
7 had no application to "purely economic inter
ests" of even a natural person.
The defendant relies on the decision of the
Supreme Court of the State of Nebraska in Meyer
v. State of Nebraska, 262 U.S. 390 (1923), where
in the concept of "liberty" was given a liberal and
extended meaning. The Court held that the term
denoted not simply freedom from bodily restraint
but also "the right of the individual to contract
[and] to engage in any of the common occupations
of life" (at page 399).
However, the Meyer case was decided on the
basis of the United States Constitution which pro
hibits against the deprivation of "life, liberty or
property". The term "property" has been excluded
in the protection provided by section 7 of the
Charter.
The other cases relied upon by the defendant are
two decisions of the British Columbia Supreme
Court, Re Mia and Medical Services Commission
of British Columbia (1985), 17 D.L.R. (4th) 385
and Wilson v. British Columbia Medical Services
Commission, [1988] (unreported), B.C.S.C. No.
1566. The Mia case relied on the above-noted
Meyer decision and in turn the Wilson decision
relied on Mia. In Wilson, the finding of the Court
was that section 7 of the Charter embraced
individual freedom of movement including the
right to choose one's occupation and where to
pursue it, subject to the right of the State to
impose, in accordance with the principles of funda
mental justice, legitimate and reasonable restric
tions on the activities of individuals. However, my
reading of these cases does not confirm the defen
dant's contention that the Court concluded that
the protection of section 7 extends to property or
pure economic rights.
In a recent Ontario decision Institute of Edible
Oil Foods v. Ontario (1987), 63 O.R. (2d) 436
(H.C.), the Court determined that section 7 of the
Charter did not contemplate the protection of pure
economic interests, and found it difficult to accept
that such a proposition would be seriously
advanced.
In any event, the applicability of section 7 to
pure economic interests has been fully considered
by this Court in Smith, Kline & French Laborato
ries Limited, supra, wherein Strayer J. stated as
follows [at pages 313 F.C.; 363 D.L.R.]:
In my view the concepts of "life, liberty and security of the
person" take on a colouration by association with each other
and have to do with the bodily well-being of a natural person.
As such they are not apt to describe any rights of a corporation
nor are they apt to describe purely economic interests of a
natural person.
Counsel for the defendant has not referred me
to any authority which, in my opinion, would
justify a departure from this interpretation. I am,
therefore, not persuaded that the amendments to
section 44 of the Patent Act are invalid as being
contrary to the rights and freedoms guaranteed by
section 7 of the Charter.
III
1 move now to the question of the proper inter
pretation to be accorded to section 44.11 of the
Patent Act. Counsel for the defendant has put
forth two arguments in this respect; first, that the
legislation should not be interpreted as retrospec
tively abrogating vested rights and second, that the
section applies only to Atenolol imported into
Canada after December 7, 1987, the effective date
of the legislation, but not to medicine imported
into the country prior to that date.
With regards to the retrospectivity argument, I
am in complete agreement that it is a well recog
nized cannon of statutory interpretation that legis
lative enactments should be interpreted so as to
respect vested rights where possible. If there exists
any ambiguity in the construction of a statute it
should be interpreted so as to respect those rights.
Generally, a presumption exists that a statute is
not to be presumed to retrospectively abrogate
vested rights.
This argument does not, in my view, assist the
defendant in this case however. To begin with the
defendant has no "vested rights" in relation to the
patent, since the patentee itself has no such vested
rights. In Smith, Kline & French Laboratories
Limited et al., Strayer J. discussed the effect of
section 41 of the Patent Act in the following way
at pages 295 F.C.; 349-350 D.L.R.:
There is no common law right to a patent: Commissioner of
Patents v. Farbwerke Hoechst Aktiengesellschaft Vormals
Meister Lucius & Bruning [(1963), 41 C.P.R. 9 at p. 17]
[1964] S.C.R. 49; (1963), 25 Fox Pat. C. 99, at page 57
S.C.R.; 107 Fox Pat. C. The right is created by Act of
Parliament. What Parliament has done in this case is to restrict
the extent of the monopoly granted to patentees of medicines. It
was so explained by Thurlow J. in Hoffman-La Roche Ltd. v.
Frank W. Horner Ltd., Attorney-General of Canada, Interve-
nant (1970), 64 C.P.R. 93 (Ex.CT.) at page 107.
What a patentee has, therefore, from the time of issue of
his patent is not an unassailable, complete monopoly right.
His patent does indeed purport to give a monopoly of his
invention but it is a monopoly which, because of s. 41, is
subject to the right of anyone who can comply with the
section to obtain the right to use the invention notwithstand
ing the patent. Such a monopoly is therefore not capable of
affording a foundation upon which a massive commercial
enterprise, not by itself capable of being monopolized, may
be built and afforded monopoly protection.
A compulsory licensee does not, as is contended
by the defendant, have a right in the nature of a
property right vis-Ã -vis the patentee. Rather, the
existence of the licence merely gives the licensee
permission to carry on an activity which is other
wise unlawful. In Smith, Kline & French
Laboratories Limited, a licensee's right was
described in the following terms at pages 300 F.C.;
353-354 D.L.R.:
When a compulsory license is issued, it does not amount to a
taking away of a monopoly as the monopoly created by the
patent was always a limited one subject to such decisions taken
by the applicants and the commissioner with respect to the
obtaining and granting of a compulsory licence. In this respect
the property rights granted by a patent in respect to medicines
are rather like a title to land in fee simple which is subject to
the right-of-way of a neighbour passing over that land. If the
neighbour does not use the right-of-way for 5 years and then
starts to use it, his use does not amount to a taking of the
property of the owner in fee simple: the owner's right was
always subject to the possible inconvenience of use of the
right-of-way arising out of a unilateral decision taken by the
neighbour.
Accordingly, I reject the defendant's argument
that section 41.11 abrogates any vested right of the
defendant. The legislation is clearly intended to
alter the scheme of the Patent Act so as to provide
patentees with a limited monopoly in respect of the
importation of medicines for sale for consumption
in Canada. The language of the amendment is, in
my view, unambiguous and supports no other
intention.
The second argument put forward by the
defendant, that the legislative amendments apply
only to Atenolol imported into the country after
December 7, 1987 is indeed a novel one, but
cannot in my opinion, succeed. The defendant
maintains that it is entitled to sell in Canada the
Atenolol which it acquired prior to the effective
date of the legislation. Paragraphs 44.11(1)(a) and
(b) clearly restrict the importation of Atenolol for
sale for consumption in Canada regardless of when
the medicine was imported into the country. It is
impossible, having regard to the clear language
and intent of the legislation to read the words
"import" and "sale" disconjunctively as suggested
by the defendant. My reading of the legislation
leads me to suspect that the defendant may contin
ue to import Atenolol and to enlarge its inventory
of the medicine if it so desires. But it may not,
until 1991, offer the medicine for sale for con
sumption in Canada because of the limited
monopoly the plaintiffs enjoy as a result of the
amendments to section 41.11 of the Patent Act.
IV
Having found that this Court has jurisdiction in
this proceeding and that the amendments to sec
tion 41 of the Act are constitutionally valid, I turn
now to the all important question of whether an
interlocutory injunction should issue in the plain
tiffs' favour.
An interlocutory injunction is an extraordinary
remedy lying within the equitable jurisdiction of
this Court. It is an extraordinary and discretionary
remedy and one which will not be granted unless
the Court is satisfied that it is a proper case in
which to exercise its discretion. A tripartite test
has evolved through the jurisprudence to assist the
Court in making a decision: (1) has the applicant
shown a prima facie/serious issue to be tried; (2) is
there a danger of irreparable harm to the appli
cant, and; (3) does the balance of convenience lie
with the applicant.
Notwithstanding the general rules relating to
the granting of interlocutory injunctions, the Fed
eral Court of Appeal has declared something of an
exception to those rules in patent matters. In a
unanimous judgment in Cutter Ltd. v. Baxter
Travenol Laboratories of Canada, Ltd. et al.
(1980), 47 C.P.R. (2d) 53 (F.C.A.), then Chief
Justice Thurlow expressed the exception in the
following terms, at pages 55-56:
In this Court, the grant of an interlocutory injunction in a
patent infringement action is not a common occurrence in most
instances, the result of an application for an interlocutory
injunction, where infringement and validity are in issue, is that
the defendant gives a satisfactory undertaking to keep an
account and upon that being done the application is dismissed
with costs in the cause.... The principal reason for this
practice is, in my opinion, the fact that in most instances the
nature of the patent rights involved is such that damages
(provided there is some reasonably accurate way of measuring
them) will be an adequate remedy for such infringement of the
rights as may occur pending the trial and because when the
matter turns on the balance of convenience if the defendant
undertakes to keep an account and there is no reason to believe
that he will be unable to pay such damages as may be awarded,
the balance will generally be in favour of refusing the injunc
tion. It is always necessary to bear in mind that the damages
that can be caused to a defendant in being restrained, for a
period that may run into several years, from doing what, if he
succeeds, he was, but for the injunction, entitled to do in the
meantime, may have consequences that are as serious for him
as any that his infringement, if he does not succeed, may have
for the patentee.
It is easy to see that this so-called exception does
not have the character of a completely different
rule. Rather, it acknowledges that the adequacy of
damages is less in doubt in patent cases than in
other matters. This line of reasoning was again
picked up by Madam Justice Reed in Samsonite
Corp. v. Holiday Luggage Inc. (1988), 20 C.P.R.
(3d) 291 (F.C.T.D.) although she indicated less of
a willingness to treat patent matters differently
than any other case. She stated at pages 309-310:
I simply do not accept that there is a presumption that
interlocutory injunctions should not be granted in patent cases
... I think that reluctance arises from a hesitation about
determining rights (even for a temporary period of time) on less
than full evidence. In addition, the balance of convenience may
often tip in favour of the defendant because it may be compara
tively easier to calculate the damages which a plaintiff will
suffer as a result of not granting the injunction than it is to
calculate the damages a defendant would suffer should the
interlocutory injunction have been wrongly given.
What these statements from both levels of the
Federal Court appear to impart is not so much
that patent matters ought to be dealt with in any
radically different fashion but that the weight
given to different elements of the test may shift
where patents are the subject matter of the dis
pute. A court, considering the granting of an inter
locutory injunction for alleged patent infringe
ment, will examine closely the questions of
damages and balance of convenience, notwith
standing the fact that a prima facie case may exist
in favour of the plaintiff.
The leading case on the applicable standards to
be used in deciding whether or not to issue an
interlocutory injunction is that of American
Cyanamid Co. v. Ethicon Ltd., [1975] A.C. 396
(H.L.). It was here that the House of Lords set the
standard to be satisfied by the applicant before an
interlocutory injunction would issue. At page 407,
Lord Diplock made the following statement:
The use of such expressions as "a probability," "a prima facie
case," or "a strong prima facie case" in the context of the
exercise of a discretionary power to grant an interlocutory
injunction leads to confusion as to the object sought to be
achieved by this form of temporary relief. The court no doubt
must be satisfied that the claim is not frivolous or vexatious; in
other words, that there is a serious question to be tried.
Despite this relatively clear statement there still
exists some confusion as to whether an applicant
for an interim injunction is required to make out a
prima facie case or a serious question. In Syntex
Inc. v. Apotex Inc., [1984] 2 F.C. 1012; 1 C.P.R.
(3d) 145 (C.A.), Mr. Justice Stone, in the majori
ty opinion, discussed this issue. He noted that
Canadian jurisprudence has favoured both formu
lations of the test at one time or another and that
it has not been authoritatively decided in Canada
as to which of the two tests is to be applied. His
Lordship stated at pages 1022-1023 F.C.; 152-153
C.P.R.:
I turn next to consider the appropriate treshold test to be
applied in a case of this kind before an interim injunction will
issue. The learned motions judge thought that the existence of a
"serious issue" to be tried was sufficient. That test was devel
oped in England and has been applied by courts in this country.
(See, e.g. Yule Inc. v. Atlantic Pizza Delight Franchise (1968)
Ltd. et al (1977), [35 C.P.R. (2d) 273; 80 D.L.R. (3d) 725] 17
O.R. (2d) 505 (H.C.); General Mills Canada Ltd. v. Maple
Leaf Mills Ltd. (1980), 52 C.P.R. (2d) 218 (Ont. H.C.);
Source Perrier (Société Anonyme) v. Canada Dry Ltd. (1982),
64 C.P.R. (2d) 116 [36 O.R. (2d) 695] (H.C.). The appellant
contends that it is not the proper test and that the proper one is
the "prima facie" case test. (See, e.g., Tarra Communications
Ltd. et al. v. Communicomp Date Ltd. et al. (1973), 1 O.R.
(2d) 682 [41 D.L.R. (3d) 350] (H.C.); Fellows & Son v.
Fisher, [1976] 1 Q.B. 122 (C.A.); N.W.L. Ltd. v. Woods,
[1979] 1 W.L.R. 1294 (H.L_); Fruit of the Loom, Inc. v.
Chateau Lingerie Mfg. Co. Ltd. (1982), 63 C.P.R. (2d) 51
(F.C.T.D.)). That test, of course, is a higher one than the
"serious issue" test. No case has been brought to our attention
in which it has been authoritatively decided in Canada as to
which of these two tests is to be applied in a case of this kind.
Nevertheless, my review of these cases leads me to accept as
appropriate the following view of the law expressed by Mac-
Kinnon A.C.J.O. in Chitel et al. v. Rothbart et al. ((1982), [69
C.P.R. (2d) at p. 72, 141 D.L.R. (3d) 268] 39 O.R. (2d) 513,
(C.A.)) at page 522):
Although the American Cyanamid case has been followed in
this province, it has been properly emphasized by Cory J.,
speaking for the Divisional Court in Yule Inc. v. Atlantic
Pizza Delight Franchise (1968) Ltd. et al. (1977), 17 O.R.
(2d) 505, 80 D.L.R. (3d) 725, 35 C.P.R. (2d) 273, that the
remedy must remain flexible and that the American Cyana-
mid test may not be a suitable test in all situations. That
there are exceptions to or qualifications of the test is noted
by Lord Diplock himself in N.W.L. Ltd. v. Woods, [1979] 3
All E.R. 614 at 625:
My Lords, when properly understood, there is in my view
nothing in the decision of this House in American Cyanamid
Co. v. Ethicon Ltd. to suggest that in considering whether or
not to grant an interlocutory injunction the judge ought not
to give full weight to all the practical realities of the situation
to which the injunction will apply. American Cyanamid Co.
v. Ethicon Ltd. which enjoins the judge on an application for
an interlocutory injunction to direct his attention to the
balance of convenience as soon as he has satisfied himself
that there is a serious question to be tried, was not dealing
with a case in which the grant or refusal of an injunction at
that stage would, in effect, dispose of the action finally in
favour of whichever party was successful in the application,
because there would be nothing left on which it was in the
unsuccessful party's interest to proceed to trial.
Mr. Justice Addy recently delivered a well-rea
soned decision on why higher standard of prima
facie case was to be favoured. In Turbo Resources
Ltd. v. Petro Canada Inc., [ 1988] 3 F.C. 235;
(1988), 17 F.T.R. 28 (T.D.) he too noted the
confusion in case law on which formulation of the
test was proper. However, while he acknowledged
that there might be very limited situations wherein
something less than a prima facie case might serve
as the basis for an injunction, he stated at pages
242 F.C.; 32 F.T.R.:
... it is difficult for me to conceive why, generally speaking,
either at law or in accordance with equitable principles which
govern injunctive proceedings, a plaintiff should be granted
interlocutory injunctive relief unless a strong prima facie case
at the very least a prima facie case has first been established.
Put in another way, where the defendant would be suffering
actual damage pending trial, then unless the person relying on
the monopoly is able to satisfy the judge at the hearing that
there is a probability of eventual success, the application should
fail.
There is little doubt indeed, following the deci
sion of Madam Justice Reed in Samsonite Corp. v.
Holiday Luggage Inc. (1988), 20 C.P.R. (3d) 291
(F.C.T.D.), as to the test which should be applied
in an injunction application concerning patent
infringement. She acknowledged the confusion
concerning the two tests and stated at page 294:
Despite this uncertainty, both counsel agree, I think, that
regardless of the verbal formulation in which the test is framed
(prima facie case or serious question to be tried) what the
courts in fact do, when faced with an application for an
interlocutory injunction, is to adjust the demands for a strong
case by reference to the irreparable harm (or balance of
convenience) which will result from the giving or withholding
of an injunction. Thus, if the plaintiff appears to have a strong
case, he will be required to prove less by way of "irreparable
harm", (or balance of convenience). If the plaintiffs' case is less
strong, however, he will be required to prove more by way of
"irreparable harm" (or balance of convenience). I agree with
this analysis.
It appears, therefore, that the weight of judicial
authority in Canada leans toward the use of the
"prima facie case" test and to relax that standard
only where there exists strong evidence of irrepa
rable harm and balance of convenience.
There can of course be no prima facie case of
patent infringement unless there is a valid patent,
section 47 of the Patent Act provides as follows:
47. Every patent granted under this Act shall be issued
under the signature of the Commissioner and the seal of the
Patent Office; the patent shall bear on its face the date on
which it was granted and issued and it shall thereafter be prima
facie valid and avail the grantee and his legal representatives
for the term mentioned therein, which term shall be as provided
in and by sections 48 and 49.
The plaintiff Imperial Chemical Industries
(ICI) is the registered owner of such a patent in
relation to the processes for the manufacture of
pharmaceutical products known as "alkanolamine
derivatives". According to the affidavit evidence
filed by the plaintiff, Atenolol is covered by this
patent. The plaintiff therefore, is the owner of a
patent for the drug Atenolol.
On the question of whether or not the respond
ents are infringing that patent, the evidence filed
at this motion reveals a copy of the application by
the defendant for a licence, pursuant to subsection
41(4) of the Patent Act, to import and market the
drug Atenolol. That licence was issued on Febru-
ary 15, 1988. The defendant would have the right
to import and sell Atenolol if it were not for the
recent coming into force of section 41.11 of the
Act regarding restrictions on certain licences.
This amendment was one of several enacted by
An Act to Amend the Patent Act and to provide
for certain matters in relation thereto, S.C. 1987,
c. 41. Pursuant to section 33 of that Act, section
41.11 was to come into force on a date to be set by
proclamation. By SI/88-1, 122 Canada Gazette II
335, 6 January 1988, the amendment was in force
as of December 7, 1987. It should also be noted
that section 28 of the 1987 amending Act provides
as follows:
28. Any matter arising after the coming into force of the
provisions of the Act referred to in subsection 33(1) in respect
of any patent issued before the coming into force of those
provisions, except any matter arising under any of sections 41.1
to 41.25 of the Patent Act, as enacted by section 15 of this Act,
shall be dealt with and disposed of in accordance with the
Patent Act as it read immediately before the coming into force
of those provisions.
This section appears to be aimed at ensuring
that sections 41.1 through 41.25 will have the
retroactive effect they are intended to have. The
effect of these legislative amendments appears to
be that certain of the rights and privileges, namely
importation of Atenolol for sale for consumption in
Canada, granted by the licence and issued to the
defendant on February 15, 1988 have been sus
pended until the expiration of eight years after the
date of issuance of the notice of compliance, or in
this case until March 10, 1991.
The function of this Court is to examine these
facts and make a determination as to the relative
strength of the plaintiff's case. In other words, if
this Court had to finally decide the matter on the
merits, on the basis of the material before it, would
the plaintiffs succeed? In my view they would; the
plaintiffs have demonstrated a strong prima facie
case.
The second essential factor in determining the
appropriateness of an interlocutory injunction is
irreparable harm. In the context of preliminary
injunctive relief, the phrase is given a specific
meaning, namely that the plaintiff, before the
trial, must face the risk of some injury which
cannot be compensated or remedied other than
through the granting of an interlocutory injunc
tion. If damages will provide adequate compensa
tion, and the defendant is in a position to pay
them, then ordinarily there will be no justification
in running the risk of an injunction pending the
trial.
It is exceptionally difficult to define irreparable
harm precisely. Courts regularly and routinely
assess monetary awards for non-pecuniary injuries
where this is necessary. On the other hand, courts
have sometimes been prepared to view what other
wise seems readily calculable losses as "irrepa-
rable" for the purposes of interlocutory relief. In
this regard, see Turf Care Products Ltd. v. Craw-
ford's Mowers & Marine Ltd. et al. (1978), 95
D.L.R. (3d) 378 (Ont. H.C.) wherein Lerner J.
granted the plaintiff an interlocutory injunction,
refusing to force it to seek and prove its damages.
In the case at bar, the sales of Atenolol repre
sent the plaintiff ICI Pharma's source of income.
Allowing the defendant to exercise its right under
the compulsory licence will diminish these sales by
as much as fifty percent. Although those lost sales
may be quantifiable and compensable in damages,
what cannot be compensated is the plaintiff's loss
of market position which will allow it to establish
its reputation and goodwill in the market place. It
is my view that the plaintiffs might well suffer
irreparable harm if the defendant is permitted to
commence selling Atenolol in the Canadian
market.
The third test, the balance of convenience,
involves an assessment of the facts as they relate to
the potential harm to each party depending on the
issuance or refusal of the requested injunction. The
purpose of an interlocutory injunction is to pre
serve the status quo until the time of trial. In this
context, the status quo relates to the situation
before the defendant commenced his course of
conduct.
For the same reasons that I found the plaintiffs
to be threatened by irreparable harm, I am per
suaded that the balance of convenience lies in their
favour. In order for the plaintiff ICI Pharma to
accrue sufficient profits to allow it to research and
develop new products and retain its market posi
tion and viability it is essential for its limited
monopoly to sell Atenolol to continue unimpeded.
Furthermore, the defendant has failed to provide
any evidence that it is unable to continue to ware
house its inventory of Atenolol and sell it for
consumption in Canada after the plaintiff's patent
expires in 1991; there exists the further fact that
the defendant's sales as of the date of this applica
tion are diminuous having not yet achieved regis
tration in the major markets of Canada.
In conclusion, I am satisfied that the plaintiffs
have succeeded in establishing a strong prima
facie case, that they face the threat of irreparable
harm should the interlocutory injunction not issue
and that the balance of convenience lies in their
favour. For these reasons, I am granting the plain
tiffs the interlocutory injunction requested in their
application, restraining the defendant from further
sale of the drug Atenolol in Canada.
The injunction shall issue; the plaintiffs shall
provide the usual undertaking; costs to the
applicants.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.