Passing off

The issue in Eli Lilly and Co. v Novopharm Ltd. was whether the defendants could use for their fluoxetine hydrochloride products, capsules that were similar in size, shape and colour to those used by the plaintiffs for their fluoxetine hydrochloride products that they sold under the brand name Prozac. That product is most commonly sold in 20 mg and 10 mg capsules, the former being half green and half cream (a green cap and a cream coloured body) and the latter half green and half pale grey (a green cap and a pale grey body). The capsules are cylindrical in shape with rounded ends in sizes that are standard for prescription medication. The judge referred to the plaintiffs, a well-known American pharmaceutical company and its Canadian subsidiary, as innovator companies and the defendants as generics even though one of the defendants did some innovative work and the plaintiffs were in the generic drug market. The plaintiffs sought injunctions to prevent the defendants from using capsules of the same size, shape and colour as the plaintiffs'. Prozac was first marketed in Canada in January, 1989. The first plaintiff held a product by process patent for fluoxetine which expired on March 20, 1996 and the second plaintiff was the only supplier of the product between January 1989 and March 20, 1996. In anticipation of the expiry of the patent, the plaintiffs decided to market fluoxetine as a generic, as well as a branded drug. Since the 1st December 1995, a Lilly generic, sold under the name of a licensee, has been sold in Canada. It was advertised as identical to Prozac and is sold in capsules identical in size, shape and colour to the Prozac capsule. In fact, both products come off the same production line. The generic product sells for 30 - 35% less than Prozac. The only differences between them are that instead of having "Lilly, 3105" printed on the cap, and "Prozac, 20 mg" on the body , the generic product has "TRADE DRESS LICD" on the cap, and "20 mg, 708" on the body. The plaintiffs sell the generic product to hospitals, medical practitioners and pharmacists.

The Claim

Upon the expiry of the first plaintiff's patent the plaintiffs obtained interim injunctions restraining the defendants from advertising, distributing or selling fluoxetine hydrochloride in "green whitish yellow or green pale grey" capsules. The defendants subsequently entered the market with all cream for the 20 mg capsules and all green for the 10 mg ones. The interlocutory injunction was subsequently discharged whereupon the defendants reverted to colours similar to the plaintiffs'.

Judgment

Dismissing the action, Reed J thought that the use of the capsule appearance in association with two different trade source designations created a lack of distinctiveness by definition and on that simple basis the passing-off claim should fail. The plaintiffs also relied on section 7 (b) of the Canadian Trade Marks Act, which provides:

"7. No person shall (a) direct public attention to his wares, services or business in such a way as to cause or be likely to cause confusion in Canada, at the time he commenced so to direct attention to them, between his wares, services or business and the wares, services or business of another;"

Her Ladyship noted that such wording had been interpreted as a codification of the common law tort of passing-off.

After reminding himself of the elements of the action, the judge considered whether the colouring of the plaintiffs' capsules identified the product's source or their ingredients. There was evidence that patients associated the colouring of a capsule with its ingredients to the extent that they would be suspicious of the same preparation in different packaging. That was one of the reasons why the plaintiffs' generic capsule had been marketed in the same colours as Prozac. The judge concluded:

"The appearance of the defendants' capsules does not operate to lead a customer to request the products of the defendants rather than those of the plaintiffs. The capsule appearance is not used in the market place as an identifier by reference to which the consumer chooses one brand of fluoxetine rather than another. The defendants choose to use the same capsule colours as the plaintiffs, and they do so for a marketing reason but that reason is to identify the medicine as one that is therapeutically equivalent to the plaintiffs' product, not to represent to the public that their products are the plaintiffs."

It followed that he could not find on the facts that the plaintiffs had proven that the capsule appearance had acquired the requisite reputation in the market place as a distinguishing feature of the plaintiffs' product.

The plaintiffs' next difficulty was that even if it was assumed that the capsule appearance identified the trade source or provenance and that the plaintiffs' capsule appearance had acquired the requisite reputation in the market place, they still had to demonstrate a likelihood of confusion from the defendants' use of a similar capsule appearance. In the present case there was no evidence of actual confusion. There was nothing to suggest that doctors, nurses or pharmacists would be confused as a result of the defendants' marketing their products in the same capsule colours as the plaintiffs'. None of the patients who were called as witnesses was confused. The judge observed that those who have never taken fluoxetine before were unlikely to be confused because they would not have seen the plaintiffs' capsule appearance. The evidence also showed that patients were generally unaware and not greatly bothered about which brand of prescribed medicines they consumed.