Alcon Canada Inc. v. Apotex Inc., 2016 FC 1055

The Federal Court has allowed Apotex to amend its statement of defence to include a new anticipation claim and a new defence of issue estoppel and abuse of process in part.

This is a ruling in a bifurcated infringement action scheduled to proceed to trial on November 27, 2017. This infringement action follows a prior PM(NOC) application between the parties.

Apotex moved to amend its statement of defence and counterclaim to add a new ground of invalidity by anticipation, a defence of ex turpi causa based on anti-competitive conduct, and two new defences based on the concepts of issue estoppel, abuse of process and the doctrine of election, arising from the prior prohibition proceedings commenced by Alcon in relation to the same patent and product.

The parties agreed the ex turpi causa defence relates solely to the quantification of damages, and thus it was adjourned to be addressed in the second half of the proceeding.

The new invalidity by anticipation defence alleges that the invention was disclosed to the public by Alcon during an annual conference, and in an abstract published at the conference. The Court held that the proposed amendments were sufficiently particularized and have a reasonable prospect of success.

The new allegations of issue estoppel, abuse of process and cause of action estoppel are based upon findings that were made in the prior PM(NOC) proceeding involving the same patent and parties. The delay in raising them was not found to be prejudicial, but the new defences would only be permitted to the extent that they raise an arguable defence.

The new allegation that Alcon is precluded from "contesting or making any allegation inconsistent with" Justice Kane's findings "that the patent is invalid on the basis of obviousness" was found to offend the Federal Court of Appeal's express ruling that cause of action estoppel in respect of the validity of a patent does not disclose a reasonable defence. Thus, this new pleading was not allowed.

The new defence of issue estoppel and abuse of process was allowed in part, with the Court striking the part stating that Alcon is precluded from "making any allegation inconsistent with" a prior finding of fact. That was held to preclude a party from leading evidence different from that led in the prior proceeding and cannot disclose an arguable defence.

The new defence of election was not allowed given the prior jurisprudence that both an application under the PM(NOC) Regulations and an infringement action can both be pursued. Furthermore, the jurisprudence provides that it is permissible to introduce in an action a better evidentiary record than on a prior prohibition proceeding between the same parties. Therefore, what prior art experts considered when considering obviousness was not held to be fixed by the prior PM(NOC) proceeding.