University of California v I-Med Pharma Inc, 2016 FC 350

TearLab brought a motion for an interim injunction, with the hearing for an interlocutory injunction being scheduled in late April or May. TearLab is the exclusive licensee under the patent in issue and markets the TearLab Osmolarity System (TearLab System). The Court noted that almost all of the users of the TearLab System rent the system and have a contract that can be cancelled at the end of the first year or on the anniversary of each year, thereby allowing users to return the system if a competitor entered the market. The Court also described the approval process and the need to convince clinicians to use the system, noting the costs of such efforts. I-Med Pharma began to offer for sale a system, available in March 2016, that TearLab alleges falls within the scope of the claims of the patent in issue. TearLab brought the motion for an interim injunction to prevent I-Med Pharma from launching its system before the motion for an interlocutory injunction could be heard.

For an interim injunction, the Court noted that it is necessary for the moving party to demonstrate that the need for an injunction is urgent. The Court also set out that the test to be met on the motion was established by the Supreme Court of Canada in RJR MacDonald, namely that there is a serious issue to be tried, that the moving party will suffer irreparable harm if the injunction is not granted, and that the balance of convenience favours the granting of an injunction . The Court concluded that TearLab did not establish the irreparable harm or balance of convenience elements of the test. In particular, the Court found that the evidence was not provided by affiants qualified to establish that the harm could not be compensated by damages. The Court stated: "It is entirely understandable that, given the context of this dispute, TearLab fears it will suffer an unquantifiable loss of market opportunity, loss of an industry opportunity and potential customer opportunity, lost sales, and loss of goodwill. However, these fears need objective support from someone with the expertise to say that they cannot be quantified in the event that the injunction is not granted. Without such evidence, the alleged harm remains speculative."

The Court described the TearLab evidence as being from corporate witnesses and witnesses who provided evidence that was unsupported or outside their respective areas of expertise. The Court preferred the evidence of I-Med Pharma's witness. The motion was dismissed and costs are to be addressed after the motion for an interlocutory injunction.