Teva Canada Limited v. sanofi-aventis Canada Inc. and
sanofi-aventis Deutschland GmbH
NATURE OF CASE:
Section 8 Damages - Motion to strike - Failure to disclose a
reasonable cause of action
sanofi-aventis Canada Inc. and sanofi-aventis Deutschland
DATE OF DECISION:
May 2, 2011
On May 2, 2011, a majority of the Federal Court of
Appeal (Dawson JA; Noël JA concurring) relied on the prior
decision inFosamax® (argued by Ogilvy
Renault) and struck a claim for "permanent loss of market
share" under section 8 of the Patented Medicines (Notice
of Compliance) Regulations (the
"Regulations"). Justice Sharlow dissented and
held that this type of claim is arguably within the scope of
section 8, is consistent with the object and purpose of the
Regulations, and should not be struck from the
On June 22, 2007, sanofi-aventis and sanofi-aventis Deutschland
et al. (collectively "sanofi") commenced an
action against Teva Canada Limited ("Teva") for
infringing the Canadian patent for ramipril. On September 17, 2007,
Teva defended the infringement action and counterclaimed against
sanofi under s. 8 for damages allegedly caused by reason of a prior
application under s. 6 of the Regulations. Teva's
counterclaim was stayed pending a trial of the infringement action.
On June 29, 2009, the Federal Court dismissed sanofi's
infringement action and vacated the stay of the counterclaim.
In its Counterclaim, Teva sought damages pursuant to s. 8 of the
Regulations. This section states that if a "first
person" applies for a prohibition order and the application is
withdrawn, discontinued or dismissed, the "first person"
is liable to the "second person" for "any loss
suffered" during a prescribed period. The period of liability
under the Regulations begins on the date when the
"second person" would have received a notice of
compliance "but for" the prohibition application, and
ends on the date when the application is terminated.
Sanofi-aventis brought a motion to strike Teva's claim for
"permanent loss of market share" on the basis that this
remedy is not within the scope of section 8. Sanofi-aventis'
motion was granted by the Prothonotary and affirmed by the Federal
Court judge (2010 FC 1210). Both Courts held that a
"first person" is only liable for damages
"suffered" during the period defined in the
Regulations and not for losses "suffered" after
Teva appealed to the Federal Court of Appeal. A majority of the
Court affirmed the Federal Court decisions on the basis that
"section 8 does not provide any entitlement to damages in
respect of losses incurred outside the period." Hence, there
was no reason to depart from the decision in Fosamax, as the
present pleading was indistinguishable and there was no evidence
that its prior decision was manifestly wrong. In a strongly-worded
dissent, Sharlow JA held that "Teva's allegations are
based on an interpretation of section 8 that its words can
reasonably bear, and that is consistent with the purpose" of
the Regulations. Justice Sharlow wrote that the
"Regulations establish a legal procedure that amounts
to a mandatory injunction"; section 8 is a "counter
balance to the power of an innovator drug company to cause this
mandatory injunction." Sharlow JA wrote that the damages
contemplated by section 8 are "intended to be analogous to the
undertaking a party is normally required to offer when seeking an
injunction in ordinary commercial litigation" and should be
interpreted broadly. Sharlow JA was "not persuaded that the
narrow interpretation of section 8 adopted in [Fosamax], which
turns on a narrow interpretation of the word "suffered",
is correct." Sharlow JA expressed no view on whether the facts
of the present case are distinguishable from those in Fosamax, but
opined that the Court should not be precluded from reconsidering
its prior decision in the context of Teva's claim.
Ogilvy Renault LLP is a full-service law firm with close to 450
lawyers and patent and trade-mark agents practicing in the areas of
business, litigation, intellectual property, and employment and
labour. Ogilvy Renault has offices in Montréal, Ottawa,
Québec, Toronto, Calgary and London (England), and serves
some of the largest and most successful corporations in Canada and
in more than 120 countries worldwide. Find out more at
Ogilvy Renault joins Norton Rose Group on June 1,
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