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Generic pharmaceutical companies operating in Canada have, in
recent years, developed new strategies to claim increased statutory
damages.
Section 8 of the Patented Medicines (Notice of Compliance)
Regulations (the Regulations) provides that a generic shall be
entitled to any loss suffered if a prohibition application against
it is withdrawn, discontinued, or dismissed. Generics have focused
on the phrase "any loss suffered" in an attempt to expand
the scope of their claims.
A first and primary generic strategy to increase claimed losses,
as employed in Merck v. Apotex (2009 FCA 187), is to seek
disgorgement of innovator profits pursuant to section 8. However,
in this case, the Federal Court of Appeal held that the Regulations
limit generics to claiming only their own lost profits.
A second generic strategy employed in Merck was to seek
damages beyond the statutorily prescribed period by seeking its
lost future profits. The FCA, overturning the trial judge on this
point, rejected this claim and limited damages to losses suffered,
as opposed to caused, during the statutory period. The Court
recently confirmed this in Teva v. Sanofi-Aventis (2011
FCA 149).
A third generic strategy sought to revisit the issue of
innovator profits through a different juridical mechanism by adding
a claim for unjust enrichment. However, in Apotex v.
Servier (2009 FC 319) the Federal Court found that a claim for
unjust enrichment framed in the same terms as the damages claim was
improper. Furthermore, in Eli Lilly v. Apotex (2009 FC
693), the Court subsequently held that it lacked jurisdiction to
hear equitable causes of action such as unjust enrichment, and that
the Federal Courts Act does not confer jurisdiction where the
conduct of a party, not a patent, is at issue. Likewise, in
Apotex v. Nycomed (T-1786-08, April 18, 2011, unreported)
the Federal Court found that the generic could not claim for unjust
enrichment independent of section 8 of the Regulations.
These decisions culminated in the recent decision of the Federal
Court of Appeal in Apotex v. Nycomed (2011 FCA 358). Here,
the Court rejected claims for disgorgement of an innovator's
profits for wrongful invocation of the Regulations, holding that
Parliament had excluded such claims from the scope of section 8,
and that the Federal Court had no jurisdiction to provide equitable
relief in relation to such claims. Moreover, the Court specifically
added that generics are not entitled to innovator profits simply
because the prohibition applications which innovators initiated
were ultimately dismissed as contemplated by section 8 of the
Regulations.
While the federal courts have spoken definitively on the issue
of innovator profits, that is not the end of the story. Generic
manufacturers are now bringing unjust enrichment claims to the
provincial courts. The recent decisions in Apotex v.
Abbott (2010 ONSC 6909, leave to appeal refused 2011 ONSC
3988) were the first in these courts to consider this issue. Apotex
had claimed damages pursuant to section 8 of the Regulations in the
Federal Court. However, given unhelpful Federal Court
jurisprudence, it discontinued the action there and commenced a
virtually identical action in the Ontario Superior Court of
Justice, adding a claim for unjust enrichment. The apparent goal
was to claim innovator profits in a more favourable jurisdiction.
Abbott brought a motion to strike the claim. The motions judge
dismissed the motion, holding that it was not plain and obvious
that the Regulations are a complete code ousting common law causes
of action or remedies. The motions judge also held that the
Regulations were not a "disposition of law" constituting
a juristic reason for the innovators' enrichment because
innovators were not "required by law" to invoke the
Regulations.
The motions judge therefore held that it was not plain and
obvious that the claim for unjust enrichment would fail. Subsequent
motions for leave to appeal, attacking among other things, the fact
that a disposition of law need not be "required by law,"
were dismissed.
These recent decisions have not decided that claims for unjust
enrichment in cases for generic damages are proper; they have
merely delayed deciding the issue. Furthermore, the Ontario cases
were decided prior to the Federal Court of Appeal's most recent
decision.
In any event, perhaps as a result of this temporary success,
Apotex has, in Apotex v. Eli Lilly (CV-11-420115), also
discontinued its claim for generic damages in the Federal Court and
commenced a similar action in the Ontario Superior Court of
Justice. In this case Apotex claims not only for unjust enrichment,
but also treble damages and double costs pursuant to old English
statutes, as well as damages or profits pursuant to section 53.2 of
the Trade-marks Act.
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