Liability Decision is Res Judicata in a Bifurcated Action

Merck & Co Inc v Apotex Inc 2014 FC 1058 Hughes J var’g 2014 FC 883 Lafrenière J
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This motion to amend relates to the upcoming damages portion of a bifurcated action. In the underlying Liability decision, 2006 FC 524 aff’d 2006 FCA 323, the patent was held invalid and infringed, in part on the basis of the law set out in Boehringer (1962), 39 CPR 201. Subsequently, in its Viagra decision 2012 SCC 60 [57], the SCC reversed, or at least reinterpreted Boehringer on the relevant issue. In this motion Apotex argued that the law having changed, it should be able to amend its Statement of Issues to argue, in effect, that it should not be made to pay damages for infringement of an invalid patent. In the decision under appeal, Lafrenière J held that the amendment would not be allowed, on the basis of res judicata. In a brief decision, Hughes J has affirmed, largely adopting Lafrenière J’s reasoning [7]. My post on Lafrenière J’s decision discusses the issues in more detail. I noted that while Lafrenière J’s reasoning was strong, I was not convinced that the prior Canadian case law was entirely settled. In adopting Lafrenière J’s reasons, Hughes J’s decision clarifies Canadian law on this point.

In a point which I did not discuss in my previous post, Apotex had also sought an amendment alleging that Merck had breached provisions of the Competition Act. That amendment had also been refused by Lafrenière J. Hughes J allowed these amendments in light of certain concessions made by Apotex regarding their scope [14]-[15].