Canada: Section 8 Proceedings - Damages Awarded And Quantified (Intellectual Property Weekly Abstracts Bulletin - Week Of May 7, 2012)

Last Updated: May 31 2012
Most Read Contributor in Canada, November 2017

Edited by Chantal Saunders and Beverley Moore


Section 8 Damages Awarded and Quantified

Apotex v. Sanofi 2012 FC 553

Drug: ramipril

In this quantification of s. 8 damages owed to Apotex by Sanofi, the Court first summarized the history of all the Notice of Compliance (NOC) proceedings that lead to this case pursuant to section 8 of the NOC Regulations. A number of factual and legal issues were also discussed.

The start date of the damages period was under dispute. Apotex had sent two separate Notices of Allegation (NOAs) in relation to one patent on the Patent Register; one alleging non-infringement and the second alleging invalidity. Proceedings were started in both cases, and prohibition was granted in the infringement allegation. However, the second proceeding resulted in a finding that Apotex' allegation of invalidity was justified. The Court held that, if Apotex had pursued the invalidity and the non-infringement allegations in the same NOA, there would not have been a Prohibition Order. Thus, Sanofi was not entitled to rely on the Prohibition Order with respect to the non-infringement allegation for the purposes of determining the start date for s. 8 damages. As a result, the Court held that the date Apotex' Apo-Ramipril product was put on patent hold was the appropriate date to begin the liability period.

The parties also disputed the end date for the damages period. Apotex argued that it should extend until the last NOC proceeding was dismissed. However, Apotex had received its NOC prior to that date as the Minister had determined that Apotex was no longer required to address the patents listed on the Patent Register. The Court held that the date the last prohibition proceeding was dismissed was really an arbitrary date as it had become moot when Apotex received its NOC. The end date was held to be the date the NOC issued.

The Court then considered the size of the generic market and Apotex' share of the generic market. The Court held that once the generic company leads prima facia evidence of its losses, the evidential burden shifts to the innovator to show that other generics would have entered the market. The Court considered the timing of the launch of other generics that were sending NOAs during the relevant period. The Court also considered the timing of the launch of an authorized generic. The Court looked at the price of the generic medicine during the relevant time periods as well as Apotex' costs. The Court held that Apotex was not entitled to claim for damages in the ramp-up period that occurred after the relevant period. Finally, the Court did not reduce the damages for sales associated with unapproved uses.

Section 8 Damages Quantified to Second Generic Company

Sanofi-aventis v. Teva 2012 FC 552

Drug: ramipril

This was a second s. 8 damages quantification relating to ramipril; however with a different generic company as plaintiff. This proceeding was heard separately from the proceeding above, and the decision was made on a different factual record.

The parties also disputed the start date for the relevant period. In this case, Teva had received Drug Identification Numbers for its product and its certification letter for approvability prior to the commencement of the first NOC proceeding. However, Teva had also agreed to wait until the expiry of one patent listed on the Patent Register before entering the market. The Court held that, because Teva had elected not to challenge one of the patents on the Patent Register, the start date for the damages period commenced when that patent expired.

The Court then determined the overall sizes of the ramipril market and the generic ramipril market. Teva's claims for "lost business value" were rejected as the Court held that these were losses that occurred after the relevant period. Similarly, Teva was not permitted to claim for the rampup period that occurred outside the relevant period. The claim for lost profits on sales of Teva's other products was not allowed. Similarly, Teva's lost indirect profits were not allowed. Finally, no downward adjustment was made for sales Teva made for unapproved uses.

Validity of Section 8 Upheld

Apotex Inc. v. Sanofi-Aventis; Teva Canada Limited v. Sanofi-Aventis 2012 FC 551

Drug: ramipril

Sanofi challenged the validity of section 8 in two actions, summarized above (Teva and Apotex). The validity arguments raised in these two proceedings were noted to be identical to those raised in another action involving AstraZeneca, summarized below. Accordingly, the validity issues were argued before the two judges together in each of the Sanofi actions and the AstraZeneca action.

The Court rejected Sanofi's challenges to the validity of section 8, finding that the general validity of section 8 was determined by the Federal Court of Appeal in a previous decision. The Court then considered and rejected additional validity issues raised by Sanofi that were not specifically addressed in the Court of Appeal's decision.

Entitlement to Section 8 Damages Determined

Apotex Inc. v. AstraZeneca Canada Inc. 2012 FC 559

Drug: omeprazole

The trial was divided into two parts, with AstraZeneca's challenges relating to the validity of section 8 being argued before the Trial Judge and a second judge seized with many of the same validity challenges in two unrelated matters (summarized above). Further, the experts on the evidentiary issues were examined in a "hot tubbing" format after being questioned in the usual manner, with the Trial Judge asking questions and each expert responding to comments made by the other. Counsel was then permitted to pose follow-up questions.

The trial related to entitlement and other issues relating to section 8, and a Reference is to be held relating to quantification of damages.

The Court rejected AstraZeneca's challenges to the validity of section 8. The Court also rejected AstraZeneca's arguments that Apotex did not meet the definition of "second person" so as to trigger section 8. With respect to AstraZeneca's argument that the alleged infringement of the patent is relevant, the Court held that the judge hearing the pending infringement action could craft a remedy so as to take into consideration the findings and awards made pursuant to section 8 as it would be unconscionable to delay these proceedings in any way until the infringement matter was heard and decided.

The remaining issues related to the date of approvability for Apotex' product and whether circumstances existed to change the date. In particular, the Court held that Apotex had the capacity to manufacture its omeprazole product at two sites, even though only one had been approved by Health Canada. Apotex could have simply advised Health Canada that it was moving its manufacturing operation to the second site and Health Canada would have worked with Apotex to issue a "no objection" letter.

In conclusion, the Court ordered that Apotex is entitled to be compensated for its loss suffered by virtue of the NOC proceedings and that there is no basis to reduce or refuse such compensation.


Patent Application Claiming Method for Making Antibodies Allowed in Part

Commissioner's Decision No. 1323

The patent application was rejected by the Examiner on the basis that the claims are broader than the teaching of the description, contrary to section 84 of the Patent Rules and section 27(3) of the Patent Act. The Patent Appeal Board (PAB) considered that two questions were to be determined: do the method claims go beyond the limits of a sound prediction; and is the disclosure sufficient such that the product claims do not exceed what has been described and enabled by the specification.

In particular, the PAB held that utility is called into question in light of the reason for the refusal, even though not specifically stated in the Final Action. Accordingly, the PAB considered whether the method claims were soundly predicted. The PAB concluded that the facts provided and the line of reasoning set out in the application, combined with the fact that no scientific rationale was provided that would weigh against the line of reasoning, would allow a person skilled in the art to soundly predict that some of the methods would produce the antibody of interest. Accordingly, these claims were allowed by the Commissioner. However, there were other method claims that could not be soundly predicted. The Commissioner of Patents (Commissioner) invited the Applicant to amend these claims.

The PAB further concluded that undue experimentation would not be required by the person skilled in the art to practice the claimed method.

Obviousness Assessment of Patent Application

Commissioner's Decision No. 1324

The PAB considered a patent application relating to a device and method for use in training firefighters in the extinguishment of a fuel spill fire. The application had been rejected on the basis of obviousness. The PAB reviewed the prior art references and the Commissioner invited the Applicant to make a number of amendments in light of the findings by the PAB that some of the claims are obvious.

Patent Application Rejected Again for Obviousness

Commissioner's Decision No. 1325

The Commissioner had previously refused the patent application on the basis of obviousness. On appeal, the Court ordered the redetermination of obviousness. The Commissioner again refused the application, and the Court again ordered redetermination after noting several errors made in the refusal. The patent application relates to a subway TV media system.

The PAB again found the claims to be obvious after considering the prior art and the expert evidence provided by the Applicant, and the Commissioner refused to grant the patent.


The Natural Health Products Directorate (NHPD) is seeking feedback on proposed revisions to the existing guidance document titled Evidence for Safety and Efficacy of Finished Natural Health Products. It has been replaced by two proposed guidance documents: Pathway for Licensing Natural Health Products Making Modern Health Claims and Pathway for Licensing Natural Health Products Used as Traditional Medicines. The consultation period is open until August 21, 2012.

Health Canada has released two new Guidance documents: Guidance on Conduct and Analysis of Comparative Bioavailability Studies and Guidance on Comparative Bioavailability Standards: Formulations Used for Systemic Effects.

CIPO has posted comments received regarding its Consultation for the Practice Respecting Inventive Concept, Statutory Subject Matter under the Patent Act, and Claims to Diagnostic Methods and Medical Uses.

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