Can a generic drug company bring an action for disgorgement of
profits when an innovator pharmaceutical company is ultimately
unsuccessful in invoking the Patented Medicines (Notice of Compliance)
Regulations? That question is now going to be
determined by the Divisional Court, according to a recent decision
that strikes another blow to generic drug companies in this ongoing
Eli Lilly is the owner of the Canadian patent for atomoxetine
hydrochloride, a drug used in Strattera, which is a medication for
the treatment of attention-deficit/hyperactivity disorder, commonly
known as ADHD. Eli Lilly had its patent listed on the PM(NOC)
register, meaning that Apotex either had to await the expiry of the
patent or make an allegation attacking the patent's validity or
asserting that it would not infringe the patent.
In response to a notice of allegation by Apotex, Eli Lilly
commenced a prohibition application in the Federal Court.
Under the PM(NOC) Regulations, the Minister was precluded from
issuing an NOC to Apotex until the prohibition application was
determined. Fast forward a few years and Apotex sues Eli
Lilly for disgorgement of profits on the basis of unjust enrichment
during the period of time that Apotex claims it was wrongfully
delayed in obtaining the NOC.
On July 25, 2012, Justice Macdonald dismissed a motion brought
by Eli Lilly seeking to strike Apotex's claim. Eli Lilly
then sought leave to appeal the decision to the Divisional
In his February 22, 2013, decision, Justice Ducharme granted
leave to Eli Lilly to appeal to the Divisional Court the dismissal
of its motion to strike Apotex's claim for disgorgement of
profits relating to the sale of Strattera. In his reasons,
Ducharme J. notes that after Macdonald J.'s refusal to strike
out Apotex's unjust enrichment claim, another decision was
rendered where a similar claim was advanced by Apotex against
Abbott Laboratories (see Apotex v. Abbott Laboratories, 2013 ONSC 356).
In Abbott, Quigley J. definitively concluded that the
framework of the PM(NOC) Regulations constitutes a complete
remedial code and that the remedy for unjust enrichment does not
exist absent "extraordinary egregious circumstances",
which would give rise to a separate cause of action.
Ducharme J. held that Quigley J. may well be right about the
limited ability of a generic drug company to seek equitable relief
in PM(NOC) cases and, if so, there would be good reason to doubt
the correctness of the decision not to strike Apotex's unjust
The case law appears to be moving towards a limitation on the
rights of a generic drug company to seek disgorgement of profits in
almost all PM(NOC) disputes. The Divisional Court is now
going to chime in on this debate. The ruling is likely to be
an important appellate decision for all pharma companies,
innovators and generics alike. Stay tuned...
A recent Saskatchewan Court of Queen's Bench decision allowed a court-appointed receiver to sell and transfer intellectual property rights free and clear of encumbrances, finding that a license to use improvements of an invention was a contractual interest and not a property interest.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).