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