Date: 20030212
Docket: T-1283-02
Neutral citation: 2003 FCT 149
Winnipeg, Manitoba, Wednesday, the 12th day of February 2003
PRESENT: The Honourable Madam Justice Dawson
BETWEEN:
APOTEX INC.
Plaintiff
- and -
ASTRAZENECA CANADA INC.
Defendant
[1] Apotex Inc. ("Apotex") moves for an order setting aside the order of Prothonotary Lafrenière which stayed this proceeding until the final disposition of a proceeding currently before the Ontario Superior Court of Justice between Astrazeneca Canada Inc. ("Astrazeneca") as plaintiff and Apotex as defendant ("Ontario proceeding"). These are my reasons for dismissing Apotex' appeal.
BACKGROUND FACTS
[2] Astrazeneca commenced the Ontario proceeding on July 16, 2002. In that proceeding Astrazeneca sought a declaration that, as between it and Apotex, it owns the copyright in two pharmaceutical product monographs, one relating to LOSEC (omeprazole magnesium) tablets, the other to LOSEC capsules. Astrazeneca also sought a declaration that two product monographs relating to Apotex' Apo-omeprazole tablets and capsules infringe Astrazeneca's copyright rights. Astrazeneca asserted that it is the owner of four registered Canadian copyrights relating to its two product monographs. Astrazeneca also sought, among other things, interlocutory and interim injunctive relief, damages for copyright infringement, an account of profits resulting from the improper copying of its LOSEC capsule and tablet monographs, punitive damages and statutory damages, if it so elected.
[3] Thereafter, on August 9, 2002 Apotex commenced this proceeding in this Court by filing a statement claim. In it, Apotex sought a declaration that no copyright subsists in Astrazeneca's two product monographs relating to LOSEC tablets and LOSEC capsules, and an order expunging Astrazeneca's copyright registrations relating to those product monographs.
[4] Astrazeneca filed a defence and counterclaim to Apotex' claim on October 7, 2002. In it Astrazeneca asserted its copyright in the two product monographs and asserted that its copyright registrations are valid. Astrazeneca sought dismissal of Apotex' claim and in its counterclaim sought the same relief which it claimed in its statement of claim filed in the Ontario proceeding.
[5] On October 10, 2002, Apotex filed its defence to the Ontario proceeding. The defence asserted that Astrazeneca owned no copyright in the LOSEC product monographs, and denied the validity of Astrazeneca's copyright registrations.
[6] The facts and matters respectively relied upon by the parties in the two proceedings are virtually identical, and the same issues are raised. As counsel noted in oral argument, it would be intellectually dishonest for the parties to say that one action did not precipitate the other.
[7] The defendant in each proceeding moved for a stay of the action. The motion for a stay of the proceeding in this Court was heard first, and on October 11, 2002 Prothonotary Lafrenière granted the motion thus staying this proceeding. The present appeal is from that order.
[8] The motion for a stay of the Ontario proceeding has not yet been heard.
THE DECISION OF THE LEARNED PROTHONOTARY
[9] In its motion for a stay of this action, Astrazeneca sought not only a stay, but if granted, also sought an order obligating it to consent to the in rem relief sought in this action by Apotex, if Astrazeneca did not succeed in the Ontario proceeding. More particularly, Astrazeneca would be obligated to consent to judgment in this Court expunging some or all of its four Canadian copyright registrations if one or more were held invalid by the Ontario Superior Court of Justice.
[10] Prothonotary Lafrenière noted in his endorsement that Astrazeneca has undertaken to consent to the in rem relief if unsuccessful in the Ontario proceeding. He then concluded that the Ontario Superior Court of Justice was as appropriate a forum as the Federal Court of Canada to deal with the issues raised in the two proceedings, and that a stay of this proceeding would not work an injustice to Apotex. In the result, Prothonotary Lafrenière ordered that this action be stayed until the Ontario proceeding is fully and finally disposed of.
STANDARD OF REVIEW TO BE APPLIED
[11] The effect of the order sought by Astrazeneca was to preclude adjudication by this Court upon the merits of the issues asserted by Apotex. I am therefore satisfied that this raises a question vital to the final issue of the case, in the sense that the question of whether or not to grant a stay is vital to the result of the case. This appeal therefore should be determined on the basis of the exercise of my discretion, de novo. See: Canada v. Aqua-Gem Investments Ltd., [1993] 2 F.C. 425 at page 463 (C.A.).
THE TEST TO BE APPLIED TO STAY PROCEEDINGS
[12] Subsection 50(1) of the Federal Court Act, R.S.C. 1985, c. F-7 ("Act") governs stays of proceedings. It provides:
| 50. (1) The Court may, in its discretion, stay proceedings in any cause or matter, (a) on the ground that the claim is being proceeded with in another court or jurisdiction; or (b) where for any other reason it is in the interest of justice that the proceedings be stayed.
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50. (1) La Cour a le pouvoir discrétionnaire de suspendre les procédures dans toute affaire_: a) au motif que la demande est en instance devant un autre tribunal; b) lorsque, pour quelque autre raison, l'intérêt de la justice l'exige. |
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[13] The jurisprudence of this Court which has considered subsection 50(1) of the Act is to the following effect:
i) The power to stay should be exercised sparingly and a stay will only be ordered in the clearest of cases;
ii) In order to justify a stay two conditions must be met, one positive and one negative. They are that:
a) The defendant must satisfy the Court that the continuance of the action would work an injustice because it would be oppressive or vexatious to the defendant or would otherwise be an abuse of process; and
b) The stay must not cause an injustice to the plaintiff.
The burden of proof is on the defendant to establish both conditions.
iii) Where there are fundamental jurisdictional reasons for bringing an action in both a provincial superior court and the Federal Court of Canada, a stay of the Federal Court proceedings is not appropriate.
See: Varnam v. Canada (Minister of National Health and Welfare) et al. (1987), 12 F.T.R. 34 (T.D.); Figgie International Inc. v. Citywide Machine Wholesale Inc. (1993), 50 C.P.R. (3d) 89 (F.C.T.D.).
[14] Turning to the application of those principles to the facts of this motion, without doubt paragraph 50(1)(a) of the Act is applicable. Apotex' claim in this Court is in substance its defence to the Ontario proceeding. That proceeding was already in existence when Apotex commenced this action. There exists, therefore, discretion in this Court to stay this proceeding.
[15] Applying the first of the two conditions to be met, Astrazeneca has persuaded me that the continuance of this action would work an injustice upon it. I find that it would be oppressive and vexatious for it to be required to litigate the same issues, against the same party, on the same evidence, before two Canadian courts with concurrent jurisdiction over copyright claims, while facing the possibility of inconsistent results at the end of the day.
[16] As to the second condition to be met, Astrazeneca has also persuaded me that staying this proceeding will not cause injustice to Apotex. Apotex asserted prejudice in two respects. First, Apotex has sought in rem relief with respect to the expungement of Astrazeneca's copyright registrations which only this Court has jurisdiction to grant. Second, it is said that Apotex will suffer a real juridical disadvantage if forced to defend the issues in the Ontario Superior Court of Justice because there is no automatic right to appeal interlocutory orders of that Court. Rather, pursuant to Rule 62.02(1) of the Ontario Rules of Civil Procedure, leave to appeal from an interlocutory order must be sought. Rule 62.02(4) provides:
62.02(4) Grounds on which leave may be granted - Leave to appeal shall not be granted unless,
(a) there is a conflicting decision by another judge or court in Ontario or elsewhere on the matter involved in the proposed appeal and it is, in the opinion of the judge hearing the motion, desirable that leave to appeal be granted; or
(b) there appears to the judge hearing the motion good reason to doubt the correctness of the order in question and the proposed appeal involves matters of such importance that, in his or her opinion, leave to appeal should be granted.
[17] In contrast, in this type of action an appeal from interlocutory decisions of the Trial Division exists as of right in the Federal Court of Canada.
[18] With respect to the first asserted ground of prejudice, if Astrazeneca is unsuccessful in the Ontario proceeding it will be precluded by operation of the principles of res judicata, issue estoppel or abuse of process from asserting against Apotex the validity of its copyright in the product monographs. The fact that copyright would not be extinguished as regards the rest of the world would not make a significant difference, in my view, to Apotex or its privies.
[19] Moreover, the undertaking of Astrazeneca to consent to an in rem judgment in this Court if unsuccessful in the Ontario proceeding is dispositive of this alleged prejudice.
[20] As to the suggested loss of juridical advantage, the Supreme Court of Canada has stressed the importance of judicial comity. See, for example, the comments of Justice La Forest writing for the Court in Morguard Investments Ltd. v. De Savoye, [1990] 3 S.C.R. 1077 at pages 1097 to 1102, and particularly his comments at pages 1099-1100 that:
The Canadian judicial structure is so arranged that any concerns about differential quality of justice among the provinces can have no real foundation. All superior court judges - who also have superintending control over other provincial courts and tribunals - are appointed and paid by the federal authorities. And all are subject to final review by the Supreme Court of Canada, which can determine when the courts of one province have appropriately exercised jurisdiction in an action and the circumstances under which the courts of another province should recognize such judgments. Any danger resulting from unfair procedure is further avoided by sub-constitutional factors, such as for example the fact that Canadian lawyers adhere to the same code of ethics throughout Canada.
[21] Given what the Supreme Court of Canada has characterized as the lack of foundation for concerns about a differential quality of justice among the superior courts of Canada, I cannot conclude that a limited right of interlocutory appeal constitutes a loss of juridical advantage. Moreover, as noted by Prothonotary Lafrenière, both parties will be equally restricted in Ontario in their ability to appeal. As yet, no interlocutory motions have been heard in Ontario.
[22] I have also considered whether there are fundamental jurisdictional reasons for bringing an action in both this Court and the Ontario Superior Court of Justice. For the reasons previously given as to why Apotex will not be prejudiced by proceeding in personam in Ontario, I see no fundamental jurisdictional reason which requires that the action in this Court continue.
[23] Much argument was directed by the parties to the doctrine of forum conveniens. I am satisfied, however, as argued by counsel for Apotex, that this Court has applied the principles articulated in cases such as Varnam, supra and Figgie, supra when determining whether to stay a proceeding on the ground of a parallel proceeding in a Canadian court.
[24] I note as well that in Morguard, supra the Supreme Court of Canada expressed the view, at page 1098, that it is a serious error to transpose the rules developed for the enforcement of foreign judgments to the enforcement of judgments from sister-provinces. In my view, similar error may well exist in applying principles of private international law within the Canadian federal state when considering the desirability of staying proceedings in one superior court because of parallel proceedings in another. The difficulty this may cause is illustrated in the submissions made to this Court to the effect that a stay of this action should only be granted if the Court is satisfied that the Ontario Court is a "more appropriate forum" and the resultant invitation to draw what might be viewed as invidious comparisons between the quality of justice available in each jurisdiction.
[25] For these reasons, the appeal is dismissed with costs.
ORDER
[26] IT IS THEREFORE ORDERED THAT:
1. The appeal from the order of Prothonotary Lafrenière is dismissed.
2. Apotex shall pay to Astrazeneca the costs of this appeal, to be assessed.
"Eleanor R. Dawson"
Judge
FEDERAL COURT OF CANADA
TRIAL DIVISION
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-1283-02
STYLE OF CAUSE: Apotex Inc. v. Astrazeneca Canada Inc.
PLACE OF HEARING: Ottawa, Ontario
DATE OF HEARING: November 28, 2002
REASONS FOR ORDER AND ORDER OF
THE HONOURABLE MADAM JUSTICE DAWSON
DATED: February 12, 2003
APPEARANCES:
Mr. Andrew R. Brodkin FOR PLAINTIFF
Ms. Nathalie Butterfield
Mr. John R. Morrissey FOR DEFENDANT
Ms. Denise L. Lacombe
SOLICITORS OF RECORD:
Goodmans LLP FOR PLAINTIFF
250 Yonge Street, Suite 2400
Toronto, Ontario, M5B 2M6
Tel: (416) 979-2211
Fax: (416) 979-1234
Smart & Biggar FOR DEFENDANT
Barristers & Solicitors
438 University Avenue, Suite 1500
Toronto, Ontario, M5G 2K8
Tel: (416) 593-5514
Fax: (416) 591-1690