Executive Summary: Key Legal and Evidentiary Issues

• Novartis alleged that Samsung and Biogen's BYOOVIZ trademark infringed its registered BEOVU trademark under s. 20(1) of the Trademarks Act and constituted passing off under s. 7(b).

• Central dispute focused on whether patients receiving anti-VEGF eye injections qualified as "relevant consumers" in the likelihood of confusion analysis.

• Appellants argued the Federal Court erred by failing to take into account the consumer attitudes of ophthalmologists and pharmacists, which are characterized by specialized knowledge and heightened attention, when assessing confusion.

• The application judge found a high degree of resemblance in sound between BEOVU and BYOOVIZ, concluding sound was a particularly important factor given oral communication between health care professionals and staff.

• Novartis's cross-appeals seeking damages or an accounting of profits were dismissed as misconceived, since Novartis had already elected damages in the Federal Court proceedings.

• Both appeals and cross-appeals were dismissed with costs, with the Federal Court of Appeal upholding the injunction and $20,000 nominal damages award.

Background of the dispute

This case arose from a trademark dispute in the Canadian pharmaceutical market involving anti-vascular endothelial growth factor (anti-VEGF) biologic drugs used to treat neovascular age-related macular degeneration (wet AMD). Novartis AG and Novartis Pharmaceuticals Canada Inc. own a Canadian trademark registration for BEOVU, which they use in association with their anti-VEGF drug approved in Canada for treating this eye condition. Samsung Bioepis Co., Ltd. and Biogen Inc. (along with their Canadian affiliates) began marketing a competing anti-VEGF drug under the trademark BYOOVIZ. Both drugs are prescription drugs in liquid formulation that must be administered by a qualified ophthalmologist by injection, using a syringe, directly into the eye.

The nature of anti-VEGF drug distribution and administration

The evidence on the applications, tendered through affidavits and cross-examination transcripts, included expert evidence from four ophthalmologists—one for Novartis and three for the appellants. Novartis also submitted evidence from the operator of a specialty pharmacy. According to this evidence, most ophthalmology clinics source their drugs from pharmacies. The pharmacies order drugs from manufacturers or distributors, remove them from original packaging, repackage them in new syringes, and place the syringes in colour-coded bags or colour-coated plastic cassettes before delivering them to clinics where they are refrigerated until used. The bags and syringes bear the name of the drug. Patients are told the brand name of the drug that will be administered to them and sign a consent form agreeing to be injected with an anti-VEGF medication. The evidence showed that patients "almost never" or in "the vast majority of cases" do not ask for a specific anti-VEGF drug. In Mr. Connolly's experience, the average age of patients who are prescribed anti-VEGF drugs is 81.

Federal Court proceedings and findings

The Federal Court (2024 FC 52, Pallotta J.) found that Samsung and Biogen's use of the BYOOVIZ trademark violated Novartis's rights in its registered BEOVU trademark under s. 20(1) (trademark infringement) and s. 7(b) (passing off) of the Trademarks Act. The application judge concluded that patients, along with ophthalmologists and pharmacists, were relevant consumers for the likelihood of confusion analysis. She expressed the view that her conclusion followed from the principles the Supreme Court set out in Ciba-Geigy Canada Ltd. v. Apotex Inc., finding that patients exercise the requisite control over the anti-VEGF medications they will receive because they are told the brand name, sign consent forms, and can exercise at least the choice to refuse administration.

On the confusion factors under s. 6(5) of the Trademarks Act, the application judge found that the distinctiveness of the BEOVU mark, which is a coined and inherently distinctive trademark, was a factor that favoured Novartis. The factors under ss. 6(5)(c) and 6(5)(d) also favoured Novartis; she held that the BYOOVIZ trademark was used with precisely the same goods that are covered by the BEOVU registration and that the nature of the goods and the nature of the trade for the drugs are essentially identical. She found a high degree of resemblance in sound between BEOVU and BYOOVIZ, reasoning that both are three syllable words, and each syllable begins with the same or a very similar sound, in the same sequence. She also agreed with Novartis that sound is a particularly important factor in this case in view of the evidence regarding oral communication between health care professionals and staff and the role of this communication in informing patients.

Arguments raised on appeal

Samsung and Biogen appealed, sharing the following positions: (1) the application judge erred by treating patients as relevant consumers in the likelihood of confusion analysis; (2) the application judge erred by failing to take into account the consumer attitudes of ophthalmologists and pharmacists, which are characterized by specialized knowledge and heightened attention, in the likelihood of confusion analysis; and (3) the application judge erred in her consideration of the surrounding circumstances in assessing likelihood of confusion under s. 6(5). They contended that patients should be disregarded in the confusion analysis because they do not encounter the BYOOVIZ trademark as used by the trademark owners. Novartis cross-appealed seeking to have the remedy varied to order that Novartis be entitled to recover at its election either its damages or the appellants' profits, to be determined on a reference to the Federal Court, on the basis that there had been a fundamental and material change—namely, that by the time of the hearing, promotion and sales of BYOOVIZ had begun.

The Federal Court of Appeal's analysis

The Federal Court of Appeal (Woods J.A. and Laskin J.A.) applied the appellate standards of review as set out in Housen v. Nikolaisen, recognizing that the determination of whether a likelihood of source confusion exists is a fact-finding and inference-drawing exercise, and thus appellate courts should generally defer to the trial judge's fact findings and inferences. The Court rejected the appellants' argument that patients must encounter the trademark as used by the trademark owner to be considered relevant consumers, finding that if this requirement from Joseph Seagram was once good law, it is no longer. The requirement is at odds with Mattel and Masterpiece, which both confirm that the test is hypothetical. The hypothetical test assumes that the relevant consumer is aware of both marks; prospective consumers are not actually required to encounter the trademark as used by the owner.

Regarding whether patients are relevant consumers, the Court agreed with the application judge that the principles stated in Ciba-Geigy support the view that the patients in this case are relevant consumers. The application judge's factually suffused findings—that patients exercise the requisite control over the anti-VEGF medications they will receive—are entitled to deference and reflect no palpable and overriding error. The Court found no errors of law or palpable and overriding errors in the application judge's assessment of the s. 6(5) factors, including inherent distinctiveness, nature of goods and trade, and degree of resemblance.

Disposition of the cross-appeals

The Court found Novartis's cross-appeals misconceived. Novartis had made its election in the Federal Court, where it pleaded in its closing submissions that it requests damages in the amount of $100,000. The application judge assessed a reasonable award of nominal damages to be $20,000. Novartis sought to justify its request for a reference based on changed circumstances, but the Court noted Novartis was made aware of this change in circumstance nearly a month before the hearing of the application and took no procedural steps to address it. The Court recognized that a change in circumstances is not a proper ground of appeal; rather, it can provide a basis for a motion to the first instance decision-maker to set aside or vary under rule 399(2)(a).

Ruling and outcome

The Federal Court of Appeal concluded that the appeals and the cross-appeals should be dismissed with costs. The request to order elevated costs on the cross-appeals was denied. The Court also declined to order costs of the applications to Novartis, as the Federal Court is better equipped to consider this. As a result, the permanent injunction stands—the appellants and their licensees remain permanently enjoined from using the BYOOVIZ trademark in association with the related drug, or any other trademark that is confusingly similar to the registered BEOVU trademark. The $20,000 nominal damages award to Novartis also stands. An exact quantification of broader compensatory damages or accounting of profits was not determined, as Novartis had elected to claim damages rather than proceeding with an accounting of profits, and the cross-appeals seeking a reference were dismissed.