The Federal Court (FC) dismissed the Plaintiffs' appeal from the Prothonotary's Order dismissing Alcon's motion to strike certain paragraphs from the Statement of Defence and Counterclaim.
Alcon sought to have struck the paragraphs that concerned the alleged anti-competitive behaviour by Alcon. Before the FC, Actavis clarified that its assertion was not that Alcon should be denied its claim for damages simply by virtue of its conduct, rather the amount of Alcon's damages should be reduced, either partially or entirely, after accounting for the effect of its allegedly inequitable conduct. Based on this characterization, the FC determined that the questions raised in the motion before the Prothonotary were not vital to the final issues of the case, and as such, the Order would not be disturbed unless it was "clearly wrong, in the sense that the exercise of discretion by the Prothonotary was based upon a wrong principle or upon a misapprehension of the facts".
Based on previous statements of the Court of Appeal, Alcon claimed that in order for Actavis to avoid having its allegations of inequitable conduct struck, the allegations must cast a shadow either on Alcon's title in the patent at issue or on the question of whether infringement has occurred. However, the FC noted that the remedy Actavis seeks to deny Alcon was a legal remedy, and not an equitable remedy. Therefore, the test set out by Alcon was not applicable in this case, given that it concerned disentitlement to equitable relief.
The FC found that the Prothonotary had properly described the applicable law and the relevant facts. The FC held that it was not an error to conclude that, due to the uniqueness of the facts in this case, it was not plain and obvious that the inequitable conduct allegations were doomed to fail.