A-16-89
Apotex, Inc. (Appellant) (Defendant)
v.
Imperial Chemical Industries PLC and I.C.I.
Pharma, Division Atkemix Inc. (Respondents)
(Plaintiffs)
INDEXED AS: IMPERIAL CHEMICAL INDUSTRIES PLC v.
APOTEX, INC. (CA.)
Court of Appeal, Heald, Mahoney and Stone
JJ.A.—Ottawa, September 13 and October 24,
1989.
Patents — Infringement — Pharmaceutical products'—
Appeal from grant of interlocutory injunction prohibiting sale
in Canada of drug imported under interim licence prior to
coming into force of legislative amendments limiting rights
under compulsory licence to import medicine "in the prepara
tion or production of which the invention has been used, if the
medicine is for sale for consumption in Canada" — Whether
interpretation of Patent Act, s. 39.11(1)(a) serious issue to be
tried — Appeal allowed — Irreparable harm not shown as
plaintiffs adequately compensated by award of damages.
Injunctions — Appeal from grant of interlocutory injunction
for infringement of pharmaceutical patent — Whether con
struction of Patent Act, s. 39.11(1)(a) serious issue to be tried
— No irreparable harm as plaintiffs adequately compensated
by award of damages.
This was an appeal from the grant of an interlocutory
injunction preventing Apotex Inc. from importing for sale for
consumption in Canada the drug atenolol, which was the
subject of a patent belonging to the respondent, Imperial
Chemical Industries PLC. Apotex imported into Canada 1,050
kg of atenolol under an interim licence prior to the coming into
force of amendments to the Patent Act (December 7, 1987),
which prohibited the exercise of rights under a compulsory
licence "to import the medicine in the preparation or produc
tion of which the invention has been used, if the medicine is for
sale for consumption in Canada". A compulsory licence and
notice of compliance were issued to Apotex shortly thereafter.
The issues were whether the Trial Judge erred in finding that
there was a serious issue to be tried, irreparable harm not
compensable in damages, and that the balance of convenience
favoured the respondents.
Held, the appeal should be allowed. The interlocutory injunc
tion should be varied to exclude from its application the use and
sale of the atenolol imported before December 7, 1987.
Per Heald J.A.: This application contained both "conflicts of
evidence on affidavit" and "difficult questions of law". There
was a serious issue to be tried, as indicated by the disagreement
between the Trial and Appeal Judges as to the proper interpre
tation of paragraph 39.11(1)(a) and the considerable time
which the parties themselves devoted to the matter. However,
the respondents did not establish that they would suffer irrepa
rable harm as they could be adequately compensated by an
award of damages. The Trial Judge found that although lost
sales to the plaintiffs due to the injunction were quantifiable
and compensable in damages, the loss of market position
allowing it to establish reputation and goodwill in the market
place was not compensable in damages. He concluded that the
plaintiffs might well suffer irreparable harm. The evidence as
to irreparable harm was not clear and likely accounts for the
Trial Judge's use of such a speculative expression. The appel
lant agreed to keep an accounting of all sales of its atenolol and
there was no suggestion that the appellant would not be finan
cially able to pay any damages awarded.
Per Mahoney J.A.: The Trial Judge erred in his interpreta
tion of paragraph 39.11(1)(a), which is not ambiguous. It
prohibits only importation. It has no retrospective application
to importations prior to it coming into force and it does not
prohibit the exercise of rights under a compulsory licence. The
construction of paragraph 39.11(1)(a) as it applied to the facts
did not present a difficult question of law. Since there was no
serious issue to be tried, it was unnecessary to address other
considerations, such as irreparable harm and balance of
convenience.
Per Stone J.A.: In their American Cyanamid decision, the
House of Lords intended to shift the emphasis from the thresh
old test — a (strong) prima facie case — to a search for the
balance of convenience. While there were still interlocutory
injunction applications which could fail at the threshold as
untenable on the basis of statutory construction, this was not
one such case. In any event, the issue here was not merely one
of construction in that certain of the facts were not agreed
upon. The trial judge will be better able to interpret the statute
having heard the evidence and submissions.
STATUTES AND REGULATIONS JUDICIALLY
CONSIDERED
Canadian Bill of Rights, R.S.C. 1970, Appendix III.
Canadian Charter of Rights and Freedoms, being Part I
of the Constitution Act, 1982, Schedule B, Canada Act
1982, 1982, c. 11 (U.K.).
Patent Act, R.S.C., 1985, c. P-4, ss. 39, 39.11 (as enacted
by R.S.C., 1985 (3rd Supp.), c. 33, s. 15).
CASES JUDICIALLY CONSIDERED
APPLIED:
Turbo Resources Ltd. v. Petro Canada Inc., [1989] 2
F.C. 451; 24 C.P.R. (3d) 1 (C.A.); American Cyanamid
Co. v Ethicon Ltd., [1975] A.C. 396 (H.L.).
REVERSED:
Imperial Chemical Industries PLC v. Apotex Inc.,
[1989]2 F.C. 608; 23 C.P.R. (3d) 1 (T.D.).
REFERRED TO:
Cutter Ltd. v. Baxter Travenol Laboratories of Canada,
Ltd. et al. (1980), 47 C.P.R. (2d) 53 ( F.C.A.); Smith v
Inner London Education Authority, [1978] 1 All ER 411
(C.A.); Hadmor Productions Ltd. v. Hamilton, [1983] 1
A.C. 191 (H.L.); Garden Cottage Foods Ltd. v. Milk
Marketing Board, [1984] A.C. 130 (H.L.).
COUNSEL:
Malcolm Johnston, Q.C. and Harry B.
Radomski for appellant (defendant).
James D. Kokonis, Q.C. and Gunars Gaikis
for respondents (plaintiffs).
SOLICITORS:
Malcolm Johnston & Associates, Toronto, for
appellant (defendant).
Smart & Biggar, Ottawa, for respondents
(plaintiffs).
The following are the reasons for judgment
rendered in English by
HEALD J.A.: I have had an opportunity to con
sider the reasons for judgment in draft form pre
pared by my brother, Mahoney J.A. herein. I
agree with him that the appeal should be allowed
with costs and that the interlocutory injunction
granted on January 12, 1989 [[1989] 2 F.C. 608;
23 C.P.R. (3d) 1], should be varied to exclude
from its application the use and sale of the 1,050
kg of atenolol imported into Canada before
December 7, 1987. However, since I reach this
conclusion on different grounds than those relied
upon by Mr. Justice Mahoney, I would like to
explain the basis upon which I would allow the
appeal.
The relevant facts are sufficiently and accurate
ly summarized in the reasons of Mr. Justice
Mahoney. The main issue argued on the appeal
was whether the learned Motions Judge erred in
granting an interlocutory injunction and, in so
doing, finding that the respondents had:
(i) met the threshold test as to the strength of
their case;
(ii) demonstrated irreparable harm not compen-
sable in damages; and
(iii) demonstrated that the balance of conve
nience favoured the respondents rather than the
appellant.'
It was the view of my brother, Mahoney J.A. [at
page 14] that the only issue in the appeal was
... whether Apotex is entitled under the compulsory licence
issued February 15, 1988, to use and sell in Canada the 1,050
kg of atenolol imported under the interim licence before
December 7, 1987.
He went on to explain that the proper determina
tion of this issue depends upon the construction to
be put on paragraphs 39.11(1)(a) and (2)(b) of
the Patent Act, R.S.C., 1985, c. P-4 [as enacted by
R.S.C., 1985 (3rd Supp.), c. 33, s. 15]. Those
paragraphs read as follows:
39.11 (1) Subject to this section but notwithstanding any
thing in section 39 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
(2) The prohibition under subsection (1) expires in respect
of a medicine
(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 39 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
' The appellant advised the Court that it would not be raising
in the appeal the constitutional validity of the amendments to
the Patent Act or the matter of infringement of the Canadian
Charter of Rights and Freedoms [being Part I of the Constitu
tion Act, 1982, Schedule B, Canada Act 1982, 1982, c. 11
(U.K.)] or the Canadian Bill of Rights [R.S.C. 1970, Appen
dix Ill]. These were matters which were raised in extenso in
the Appellant's Memorandum of Fact and Law. The memoran
dum also raised the question as to the jurisdiction of this Court
to adjudicate the lis at bar. This matter was not raised in oral
argument by counsel for the appellant.
The learned Motions Judge expressed the view (at
pages 625 F.C.; 15 C.P.R.) that the effect of
paragraph 39.11(1) (a) was to preclude the sale for
consumption in Canada of medicine made from
imported drugs whenever such importation took
place. My brother, Mahoney J.A. disagreed [at
page 15] with this interpretation. In his view that
paragraph:
... is not open to the interpretation the learned Trial Judge has
given it. The provision prohibits the exercise of rights under a
compulsory licence "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". It prohibits
only importation. It has no retrospective application to importa
tions prior to it coming into force and it does not prohibit the
exercise of rights under a compulsory licence other than the
right to import.
Accordingly, and relying on this Court's judgment
in Turbo Resources Ltd. v. Petro Canada Inc.,
[1989] 2 F.C. 451; 24 C.P.R. (3d) 1, Mr. Justice
Mahoney held that the other considerations to be
taken into account (such as irreparable harm and
balance of convenience) in deciding whether or not
to issue an interlocutory injunction are only rele
vant in cases where there is a serious issue to be
tried. Since, in his opinion, there was no serious
issue to be tried in this case, it was not necessary
to address those other issues.
With deference, I do not share the view
expressed by my brother Mahoney J.A. that there
is not a serious issue to be tried in the circum
stances of the case at bar.' All that is required at
this juncture, is that the Court be satisfied that:
"the claim is not frivolous or vexatious; in other
words, that there is a serious question to be
tried."' I agree particularly with the statement by
Lord Diplock (page 407) that:
It is no part of the court's function at this stage of the
litigation to try to resolve conflicts of evidence on affidavit as to
facts on which the claims of either party may ultimately depend
nor to decide difficult questions of law which call for detailed
argument and mature considerations. These are matters to be
dealt with at the trial.
2 In the Turbo Resources decision, this Court held that,
generally speaking, the threshold test established by Lord
Diplock in American Cyanamid Co. y Ethicon Ltd, [1975]
A.C. 396 (H.L.), was the appropriate test.
3 Per Lord Diplock in American Cyanamid, at p. 407.
In my view, this application for interlocutory
injunctive relief contains both "conflicts of evi
dence on affidavit" and "difficult questions of
law". It is noted that, based on the memoranda of
fact and law filed by the parties on this appeal,
there are conflicts on the affidavit evidence as
between the parties. I say this because portions of
the Laskin affidavit and the cross-examination
thereon and the undertakings given thereunder, as
well as portions of the Sherman affidavit, have
been put in issue (see, paragraphs 14, 15, 16, 19,
21 and 26 of the appellant's memorandum of fact
and law, which' were not admitted by the respon
dents.) Furthermore, I think the application raises
"difficult questions of law" as well. The learned
Motions Judge put the argument advanced on
behalf of the respondents clearly and succinctly as
follows at pages 625 F.C.; 15 C.P.R. of his
reasons:
It is impossible, having regard to the clear language and intent
of the legislation to read the words "import" and "sale"
disconjunctively [sic] as suggested by the defendant. My read
ing of the legislation leads me to suspect that the defendant
may continue 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 consumption in Canada because of the
limited monopoly the plaintiffs enjoy as a result of the amend
ments to s. 41.11 of the Patent Act (now R.S.C., 1985, c. P-4, s.
39.11).
On the other hand, my brother Mahoney J.A. in
the portion of his reasons quoted supra, reaches
the opposite conclusion. At the hearing of the
appeal, the appellant devoted some eight para
graphs of its memorandum to the interpretation of
this particular section. The respondents replied
with equally detailed submissions. This problem of
statutory interpretation occupied considerable time
at the hearing of the appeal as well. In my view,
the matter is fairly arguable and, accordingly, I
refrain from expressing any concluded view there
on. For these reasons, I have no difficulty in
concluding that the serious issue threshold test has
been met in the circumstances of this case.
My brother Stone J.A. in the Turbo Resources
case has accurately depicted the situation after the
threshold test has been satisfied. At pages 467
F.C.; 14 C.P.R. he said:
Satisfying the threshold test of "a serious question to be tried"
does no more, so to speak, than unlatch the door to a plaintiff;
it neither opens it nor, less still, permits him to pass on through.
After proceeding to quote what Lord Diplock had
to say about the other factors which have to be
weighed in the event a Trial Judge concludes that
there exists a serious question to be tried in the
sense that it was neither frivolous, nor vexatious,
Mr. Justice Stone proceeds to analyze the main
features of the factors discussed by Lord Diplock
in American Cyanamid. His analysis reads as fol
lows (pages 473-474 F.C.; 19-20 C.P.R.):
(a) Where a plaintiffs recoverable damages resulting in the
continuance of the defendant's activities pending trial
would be an adequate remedy that the defendant would be
financially able to pay, an interlocutory injunction should
not normally be granted;
(b) where such damages would not provide the plaintiff an
adequate remedy but damages (recoverable under the
plaintiffs undertaking) would provide the defendant with
such remedy for the restriction of his activities, there
would be no ground for refusing an interlocutory
injunction;
(c) where doubt exists as to the adequacy of these remedies in
damages available to either party, regard should be had to
where the balance of convenience lies;
(d) where other factors appear to be evenly balanced, it is
prudent to take such measures as will preserve the status
quo;
(e) where the evidence on the application is such as to show
one party's case to be disproportionately stronger than the
others, this factor may be permitted to tip the balance of
convenience in that party's favour provided the uncompen-
satable disadvantage to each party would not differ widely;
(g) (sic) other unspecified special factors may possibly be
considered in the particular circumstances of individual
cases.
In my view, having regard to all the relevant
circumstances in the instant case, the respondents
have not established that they will suffer irrepa
rable harm. I think the record herein shows that
the respondents can be adequately compensated by
an award of damages for any recoverable loss
sustained because the appellants offered for sale
for consumption in Canada the 1,050 kg's of
atenolol imported under the interim licence prior
to December 7, 1987. The learned Motions Judge
addressed the issue of irreparable harm as follows
(at pages 631-632 F.C.; 20-21 C.P.R.):
In the case at bar, the sales of Atenolol represent 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 plaintiffs' 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 com
mence selling Atenolol in the Canadian market. [Emphasis
added.]
It is thus clear that the learned Motions Judge
made two findings in respect of this issue:
(a) any lost sales to the plaintiffs due to the
injunction are quantifiable and compensable in
damages; and
(b) the plaintiffs' loss of market position allow
ing it to establish reputation and goodwill in the
market place is not compensable in damages
and, as a consequence, the plaintiffs might well
suffer irreparable harm.
It is my opinion that since the Motions Judge
found that damages due to lost sales were quantifi-
able and compensable, there remained to be con
sidered only the matter of loss of market position.
The learned Motions Judge did not make a specif
ic finding that the plaintiffs would suffer irrepa
rable harm because of loss of its market position.
He used the tentative expression "might well".
The jurisprudence in this Court establishes that
the evidence as to irreparable harm must be clear
and not speculative. 4 In my view, the evidence
before the learned Motions Judge does not satisfy
this test and this likely accounts for the Motions
Judge's use of such a speculative expression. It is
not disputed that the price charged by the appel
lant for its atenolol was 21% to 25% lower than the
price charged by the respondents for the atenolol
sold by them. According to the affidavit of Mr.
Sherman, the President and Operations Manager
of the appellant, the appellant made a commit
ment to the various provincial Ministries of Health
to supply its atenolol at prices lower than the
prices charged by the respondents for their ateno-
Compare Cutter Ltd. v. Baxter Travenol Laboratories of
Canada, Ltd. et al. (1980), 47 C.P.R. (2d) 53, at p. 57 per
Thurlow C.J.
lot. Thus, in the opinion of Mr. Sherman, if the
appellant is unable to supply the provincial Minis
tries, there will be enormous increased cost to
those Ministries in the administration of drug
benefit programs which will result in increased
cost to the consuming public as well as inconve
nience to the pharmacists involved. In so far as the
mathematical evidence is concerned, it does not
assist the respondents either. Far from demonstrat
ing irreparable harm to the respondents, it merely
demonstrates a loss of sales somewhere in the
realm of some 16% based on the respondent's
reported sales in 1988 and their projected sales in
1989. In any event, such losses are calculable and
thus compensable by an award of damages.
I referred earlier to the Cutter case. In that
case, Chief Justice Thurlow (as he then was) said
(pages 55 and 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 same practice has been followed in
industrial design actions and was the ultimate result of the
application in Lido Industrial Products Ltd. v. Melnor Mfg.
Ltd. et al. (1968), 55 C.P.R. 171, 69 D.L.R. (2d) 256, [1968]
S.C.R. 769. 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 ade
quate 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 injunction. 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.
In my view, those comments are particularly
apposite to the case at bar. It is noted that Mr.
Sherman gave an undertaking on behalf of the
appellant "to keep an accounting of all sales of its
Apo-Atenolol tablets up to and until any judgment
that may be rendered in this cause or the action is
otherwise disposed of". (See, Appeal Book Volume
2, page 262, paragraph 35, affidavit of Bernard C.
Sherman).
Finally, returning to Mr. Justice Stone's anal
ysis supra of the American Cyanamid factors, I
conclude, pursuant to paragraph (a) of that anal
ysis, that since damages would be an adequate
remedy and since there is no suggestion that the
appellant would not be financially able to pay any
damages awarded, (which, by its undertaking it
has agreed to pay) the interlocutory injunction
should not have been granted. Accordingly, I
would allow the appeal with costs in this Court. I
would not disturb the award of costs to the
respondents in the Trial Division since only a
portion of the injunction granted by the Trial
Division is being revoked on appeal. I would
amend the order of the Trial Division dated Janu-
ary 12, 1989 by deleting paragraph 1 therefrom
and substituting therefor the following:
I. The Defendant shall be restrained and prohibited until
March 10, 1991 from importing for sale for consumption in
Canada Atenolol protected by Canadian Patent No. 945,172,
provided that the Defendant be allowed to sell in Canada the
balance of the 1050 kg of Atenolol imported by it prior to
December 7, 1987, under Canada Customs document, Entry
Nos. E484770 and K006686.
In all other respects, I would confirm the order
of the Trial Division.
* * *
The following are the reasons for judgment
rendered in English by
MAHONEY J.A.: This is an appeal from the
grant of an interlocutory injunction by the Trial
Division. It is concerned with Canadian patent no.
945,172 for an invention relating to atenolol, the
active ingredient of the heart medicine marketed
in Canada under the trade name Tenormin by the
respondent Atkemix, Inc. Atkemix Inc. is a wholly
owned subsidiary of the respondent, Imperial
Chemical Industries PLC, the patentee of the
invention in issue. I.C.I. Pharma is a division of
Atkenix Inc. and has no legal status independent
of it.
The following provisions of the Patent Act,
R.S.C. 1985, c. P-4, apply to the transactions in
issue.
39....
(4) Where, in the case of any patent for an invention
intended or capable of being used for medicine or for the
preparation or production of medicine, an application is made
by any person for a licence to do one or more of the following
things as specified in the application, namely,
(a) where the invention is a process, to use the invention for
the preparation or production of medicine, import any medi
cine in the preparation or production of which the invention
has been used or sell any medicine in the preparation or
production of which the invention has been used, or
(b) where the invention is other than a process, to import,
make, use or sell the invention for medicine or for the
preparation or production of medicine,
the Commissioner shall grant to the applicant a licence to do
the things specified in the application except such, if any, of
those things in respect of which he sees good reason not to
grant a licence.
(6) Any time after the expiration of six months after the day
on which a copy of an application to the Commissioner pursu
ant to subsection (4) is served on the patentee in prescribed
manner, the applicant may, if the Commissioner has not finally
disposed of the application, request the Commissioner to grant
to him an interim licence to do such one or more of the things
specified in the application as are specified in the request, and
the Commissioner shall, on receipt of the request, forthwith
serve on the patentee a notice stating that he may, within such
period as is specified by the Commissioner in the notice, not
exceeding twenty-one days from the day the notice is served on
the patentee, make representations with respect to the request.
39.11 (I) Subject to this section but notwithstanding any
thing in section 39 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 or 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
(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 39 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
Paragraphs 39.11(2)(a) and (c) refer respectively
to cases where a compulsory licence had issued on
or before June 27, 1986, and where the first notice
of compliance had issued after that date. It is
common ground that paragraph 39.11(2)(b)
applies in the present circumstances.
A chronology of the pertinent facts follows:
April 9, 1974—Canadian patent no. 945,172
issued.
March 10, 1983—first notice of compliance
issued to I.C.I. Pharma.
December 5, 1985—Apotex applied for a notice
of compliance.
March 3, 1986—Apotex applied for a compulso
ry licence.
June 27, 1986—Proposed amendments to the
Patent Act announced.
July 15, 1987—Interim licence, valid for six
months, under subsection 39(6) issued to
Apotex authorizing it "to import and sell
medicine in the preparation or production of
which the invention has been used and to
import, use and sell the invention for medicine
or for the preparation or production of medi
cine, the sale thereof not being restricted to
Canada only," subject to terms and conditions
compliance with which is not in issue.
August-September, 1987—Apotex imported
1,050 kg of atenolol into Canada.
December 7, 1987—The amendments to the
Patent Act including section 39.11 were pro
claimed in force.
February 15, 1988—Compulsory licence issued
to Apotex pursuant to paragraph 39(4)(a),
authorizing it "to import, make, use and sell
the medicine whose chemical or proper name
is atenolol under [patent no. 945,172] owned
by Imprial Chemical Industries PLC."
June 30, 1988—Notice of compliance in respect
of atenolol issued to Apotex.
While other matters were raised before the
learned Trial Judge, the only issue in this appeal is
whether Apotex is entitled under the compulsory
licence issued February 15, 1988, to use and sell in
Canada the 1,050 kg of atenolol imported under
the interim licence before December 7, 1987. The
questions on appeal are whether he erred in his
construction of section 39.11(1) and (2)(b) and,
thereby, erred in law in concluding that there was
a serious issue to be tried as to the 1,050 kg and,
secondly, whether he erred in concluding that the
respondents would suffer irreparable harm if the
interlocutory injunction were not granted in terms
that covered the 1,050 kg. In my view of this
matter, it is not necessary to deal with the second
issue.
In his reported decision, ([1989] 2 F.C. 608 at
page 625; 23 C.P.R. (3d) 1, at page 15), the
learned Trial Judge summarily dismissed the argu
ment which, with respect, it seems to me must
prevail. He said:
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 [39.11(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 [sic] as suggested by the
defendant. My reading of the legislation leads me to suspect
that the defendant may continue 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 consumption in
Canada because of the limited monopoly the plaintiffs enjoy as
a result of the amendments to section [39.11] of the Patent Act.
Paragraph 39.11(1)(a) is not ambiguous and, in
my respectful opinion, it is not open to the inter
pretation the learned Trial Judge has given it. The
provision prohibits the exercise of rights under a
compulsory licence "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". It prohibits only impor
tation. It has no retrospective application to impor
tations prior to it coming into force and it does not
prohibit the exercise of rights under a compulsory
licence other than the right to import.
This Court recently considered in great detail, in
Turbo Resources Ltd. v. Petro Canada Inc.,
[1989] 2 F.C. 451; 24 C.P.R. (3d) 1, what is
sometimes referred to as the American Cyanamid
threshold test. Only if it is determined that there is
a serious issue to be tried are other considerations
to be taken into account in deciding whether or not
an interlocutory injunction ought to issue. If it is
found that there is no serious issue to be tried, the
application fails at that point.
The respondents rely particularly on the follow
ing dicta of Lord Diplock in American Cyanamid
Co. y Ethicon Ltd., [1975] A.C. 396 (H.L.), at
page 407:
It is no part of the court's function at this stage of the
litigation to try to resolve conflicts of evidence on affidavit as to
facts on which the claims of either party may ultimately depend
nor to decide difficult questions of law which call for detailed
argument and mature considerations. These are matters to be
dealt with at the trial.
They say that, fairly read, that means that dif
ficult questions of law ought not be resolved on an
interlocutory injunction application even where
there is no issue as to the material facts. It follows,
in their submission, that we ought not interfere
with the learned Trial Judge's exercise of discre
tion based on his construction of paragraph
39.11(1)(a).
In my opinion, the construction of that provi
sion, as it applies to the undisputed facts here,
presents no difficult question of law. I am content
to rest my decision on that basis and to leave to
another day the respondents' argument should a
difficult question of law be in play. I must confess,
however, to considerable doubt as to the validity of
the proposition. If there is no issue as to relevant
facts, why cannot detailed argument and mature
consideration be as well directed to a difficult
question of law on an interlocutory injunction
application as after trial? A trial does not change
the law; it establishes the facts and applies the law
to them.
I would allow the appeal with costs and vary the
interlocutory injunction made January 12, 1989, to
exclude from its application use and sale of the
1,050 kg of atenolol imported into Canada before
December 7, 1987.
* * *
The following are the reasons for judgment
rendered in English by
STONE J.A.: I have been able to read in draft
the reasons for judgment proposed by both my
colleagues, and desire to add only a few of my
own.
Without wishing to repeat what I had to say in
Turbos about the importance of the House of
Lords' decision in American Cyanamid 6 on this
branch of the law, I would observe that their
Lordships clearly intended to shift much of the
emphasis away from the threshold test (theretofore
regarded as a "prima facie" or "strong prima
facie" case) to that of searching for the balance of
convenience as between the parties. Formerly,
many interlocutory injunction applications found
ered at the threshold. The new threshold test,
being somewhat easier to satisfy, means that the
decision to grant or refuse the relief sought will
oftentimes depend upon a weighing up of the
balance of convenience in the matter. An applicant
who suffers no irreparable loss because damages
would be an adequate remedy could not normally
5 Turbo Resources Ltd. v. Petro Canada Inc., [ 1989] 2 F.C.
451; 24 C.P.R. (3d) 1.
6 American Cyanamid Co. y Ethicon Ltd., [1975] A.C. 396
(H.L.).
show that the balance of convenience lies with
him.
It is, of course, not too difficult to imagine cases
being so utterly untenable as a matter of statutory
construction that applications for interlocutory
injunctive relief dependent upon that construction
should fail at the threshold. However I have not
been able to persuade myself that this is one of
those cases. The statutory language at issue is not
without some difficulty, but I agree that this Court
could well answer the question of construction if it
alone were at issue.' However, some of the facts
are not agreed upon. It would therefore be proper
to leave the matter for the trial judge who will be
better positioned to interpret the statute in the
light of all the evidence adduced and the submis
sions made.
Like Mr. Justice Heald, I am also satisfied that
the respondent would not suffer irreparable loss if
injunctive relief did not go in the full terms of
paragraph 1 of the judgment below. I agree with
his reasoning for interfering with the exercise of
the Motions Judge's discretion in this regard. It
appears to fall well within the permissible bounds
of interference by an appellate court in a case of
this kind. 8
I would therefore dispose of this appeal in the
manner proposed by Mr. Justice Heald and for the
reasons he gives.
7 See e.g. Smith y Inner London Education Authority,
[1978] 1 All ER 411 (C.A.) where it was found as a matter of
statutory construction that the power of a public authority to
act in a given way was unquestionably conferred by the lan
guage of the statute and, hence, that there was no "serious
question" to be tried.
8 See Hadmor Productions Ltd. v. Hamilton, [1983] 1 A.C.
191 (H.L.), per Lord Diplock at p. 220; Garden Cottage Foods
Ltd. v. Milk Marketing Board, [1984] A.C. 130 (H.L.), at p.
137.
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.