Ciba-Geigy Canada Ltd. v. Novopharm Ltd.
T-2582-93 / T-2583-93
Rothstein J.
21/7/94
75 pp.
Applications for interlocutory injunctions to prohibit defendants from marketing prescription drug similar in appearance to plaintiff's on basis if not prohibited defendants will be passing off and will be in breach of Trade-marks Act, s. 7(b) (causing confusion) -- Plaintiff manufacturing "Voltaren SR 75" and "Voltaren SR 100" -- Representing two dosages of diclofenac, generic name for non-steroidal anti-inflammatory drug, with analgesic (pain relieving) and antipyretic (fever reducing) properties, indicated for treatment of rheumatoid arthritis, osteoarthritis, including degenerative joint disease -- Some users of diclofenac regular repeat purchasers -- "SR" indicating slow-release format, increasing patient compliance -- Plaintiff marketing "Voltaren SR 75" since 1989, "100" since 1985 -- Defendants manufacturing generic pharmaceutical products -- Receiving approval of Health Protection Branch of Department of National Health and Welfare to market own diclofenac slow-release product in 100 mg dosage -- Defendants' slow-release 100 mg tablets almost same colour, shape, size as plaintiff's "Voltaren SR 100" tablet -- Defendants intentionally marketing tablets in same or similar appearance to that of originator manufacturer -- Applications herein brought in apprehension of alleged passing off, before plaintiff suffering actual damage -- 3,000 pages of evidence, over 100 authorities before Court -- One of first cases of this type since Ciba-Geigy Canada Ltd. v. Apotex Inc., [1992] 3 S.C.R. 120, holding patients who consume drugs also relevant in considering whether passing off by look-alike products in pharmaceutical industry -- Prior thereto, only doctors, dentists, pharmacists, other health care providers relevant consumers for purposes of passing-off actions -- Passing off in context of patients using prescription pharmaceutical products new issue in Canada -- Purpose of passing-off action to protect all persons affected by product -- Customers should not be deceived -- Appearance may assist consumer in recognizing particular manufacturer or specific product -- Appearance therefore source of information associated with reputation -- Important to give customer opportunity to exercise control over prescription pharmaceuticals because no direct access thereto -- Change of appearance indicating different product -- Same approach to passing off in prescription drug industry as in any other industry -- Test for interlocutory injunction requiring serious issue to be tried: American Cyanamid Co. v. Ethicon Ltd., [1975] A.C. 396 (H.L.); Manitoba (Attorney General) v. Metropolitan Stores Ltd., [1987] 1 S.C.R. 110; Turbo Resources Ltd. v. Petro Canada Inc., [1989] 2 F.C. 451 (C.A.) -- Defendants arguing extensive evidence before motions judge in form of cross-examinations on affidavits justifying application of higher standard of prima facie case -- When American Cyanamid decided, cross-examinations on affidavits excluded and therefore evidence before motions judge on interlocutory injunction application in U.K. much less extensive -- Defendants relying on Chitel et al. v. Rothbart et al. (1982), 69 C.P.R. (2d) 62 (Ont. C.A.), but that case limited to Mareva injunctions -- Also relying on Smith, Kline & French Canada Ltd. v. Novopharm Ltd. (1983), 72 C.P.R. (2d) 197 (Ont. H.C.), which fell within Woods exception -- Woods or Mareva aspects underlying reasons for prima facie case exception to serious issue general rule -- Extensive evidence may be necessary to demonstrate prima facie case, but existence of extensive evidence or cross-examination on affidavits per se not justifying departure from general rule -- Otherwise incentive for defendants to expand record, prolong interlocutory injunction proceedings for that reason alone -- While importance of flexibility emphasized in Turbo Resources, and Woods exception recognized, nothing therein supporting application of prima facie case standard -- No exception to serious issue test merely because of existence of extensive evidence before motions judge on interlocutory injunction application -- RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311 indicating unnecessary, undesirable for motions judge to conduct prolonged examination of merits, even where of view plaintiff unlikely to succeed at trial -- Cases overwhelming that except in certain very limited circumstances, first test on interlocutory injunction application whether serious issue to be tried, or that case not frivolous, vexatious and substantial question to be tried -- Although motions judge normally dealing with question of serious issue summarily, circumstances herein (extensive evidence, argument) requiring more extensive review -- Plaintiff's affidavit evidence admissible -- Doctors, pharmacists may properly depose as to reactions of patients, customers to appearance of pharmaceutical products, whether will be deceived by look-alikes -- To establish passing off, plaintiff must prove existence of goodwill, deception of public due to misrepresentation, actual or potential damage -- Question of distinctiveness one of fact to be determined on evidence -- (1) Plaintiff demonstrating serious issue -- Some patients associating appearance and source of tablets -- Some patients receiving samples or repeat prescriptions of "Voltaren SR" expecting to receive same brand as before and expectation will be satisfied by receipt of tablets of same appearance as ones received as samples or in previous prescription -- Plaintiff's tablets distinctive for serious issue purposes -- Patients on refilling prescription or on filling prescription after receiving samples associating appearance of tablets with trade source identifiable body of patients who meet "substantial body of patients" standard established in Roche Products Ltd. v. Berk Pharmaceuticals, [1973] R.P.C. 473 (C.A.) as adopted in Ciba-Geigy Canada Ltd. v. Apotex Inc. -- While with more than one colour, tablet might be more unusual, more easily associated with trade source, single-coloured tablets herein attracting secondary meaning sufficient for serious issue finding -- Evidence of pharmacists counselling patients in respect of substitution, signs in pharmacies insufficient to ensure not deception among some patients from look-alike tablets -- (2) Irreparable harm, damages inadequate remedy for plaintiff -- Heald J.A.'s remarks in Centre Ice Ltd. v. National Hockey League (1994), 53 C.P.R. (3d) 34 (F.C.A.) proof of irreparable harm cannot be inferred interpreted as meaning must be evidentiary basis, individually of distinctiveness, deception, loss of goodwill, irreparable harm not compensable in damages -- Not possible to infer loss of goodwill from evidence of confusion, irreparable harm from evidence of loss of goodwill -- Must be some evidence supporting each element -- Not saying motions judge may not make inferences reasonably flowing from evidence -- These applications brought quia timet -- No actual evidence of harm because defendants not yet in market-place -- Evidence relating to loss resulting in irreparable harm must be inferred -- Heald J.A. not precluding drawing of such inferences logically following from evidence -- Loss of goodwill relevant harm in passing-off action -- In context of passing off, plaintiff losing sales, goodwill -- Loss of reputation relating to distribution of leaflets assuring patients if their slow-release diclofenac tablets having appearance of "Voltaren SR 75" and "100" tablets, source Ciba-Geigy, not established -- Plaintiff will lose more sales if defendants able to market look-alike tablets than if not -- Plaintiff suffering loss of goodwill, sales due to marketing of look-alike 100 mg diclofenac slow-release tablets -- No evidence as to how plaintiff could calculate damages if no interlocutory injunction granted and plaintiff successful at trial -- Not obvious how to identify which of lost sales due to legitimate competition and which due to passing off -- No evidence as to how defendants' lost sales could be calculated if enjoined and then successful at trial -- Motions Judge should not impose condition putting onus on defendants at trial in respect of damages as contrary to well-established principle onus on plaintiff to establish damages; unacceptable intrusion into conduct of pending trial for motions judge to involve himself in determining how evidence may be adduced at trial and who may have onus on various issues -- (3) Balance of convenience favouring plaintiff -- Plaintiff in market-place with diclofenac slow-release tablets for some time, while defendants just trying to enter -- Delay associated with changing appearance ensuing from granting of interlocutory injunction largely resulting from defendants' unwillingness to protect themselves by proceeding earlier to obtain Health Protection Branch approvals for non-look-alike diclofenac slow-release tablets -- Some weight given to arguments granting of interlocutory injunction less significant to defendants, larger companies having more products, competing with each other for market, than plaintiff -- Standardization of pharmaceutical products not favouring defendants in assessing balance of convenience -- S.C.C. establishing law of passing off, importance of patients not being deceived about pharmaceutical products taking paramount public interest -- Prescription Drug Cost Regulation Act, R.S.O. 1990, c. P.23, s. 4(3) -- R.R.O. 1990, Reg. 936, s. 1.