Until January 2013, the law of generic claims under section 8 of
the Patent Medicines (Notice of Compliance) Regulations
(the"NOC Regulations") differed depending
on the court chosen by the generic. Federal Court jurisprudence had
clearly prohibited generics from advancing claims for innovator
profits in the context of claims under the NOC
Regulations. This position is consistent with the legislative
intent of Parliament which expressly removed the term
"profits" from the relevant statutory language.
Nevertheless, generic pharmaceutical companies could continue to
pursue claims for innovator profits if they sued in the Ontario
Court since all motions to strike such claims in that court had
This juridical inconsistency was relieved on January 15, 2013
when Justice Quigley of the Ontario Superior Court of Justice
released a comprehensive decision in Apotex v. Takeda andAbbott (2013 ONSC 356). His decision held, for the first
time in an Ontario court, that generic drug companies are
prohibited from claims of disgorgement of an innovator drug
company's profits in the context of claims made under the
NOC Regulations. Arising from a motion for partial summary
judgment, the decision brings the Ontario Superior Court in line
with jurisprudence from the Federal Court of Appeal.
Apotex had alleged in its statement of claim that Takeda and
Abbott wrongfully invoked the NOC Regulations and that
such wrongful invocation entitled Apotex to disgorgement of
Takeda's and Abbott's profits on the basis of unjust
enrichment. Justice Quigley disagreed and found that,
the NOC Regulations are a delicate and complicated
balance of competing interests. Recognition of Apotex's claim
to unjust enrichment would frustrate Parliament's policy
decision to preclude the disgorgement of the innovator's
profits from a claim for s. 8 damages. Section 8 is part of a
"complete and comprehensive scheme that both supplies the duty
and provides the necessary adjudicative machinery such that resort
to the common law is duplicative in any situation where the common
law applies." (para. 172)
The framework for, and the balance struck by, Canada's laws
addressing pharmaceutical inventions figured prominently in the
Court's decision. The Court also addressed the equitable
jurisdiction of the Ontario Superior Court, Federal Court of Appeal
jurisprudence and the requirements of unjust enrichment.
Apotex argued the broader equitable jurisdiction of the Ontario
Superior Court permitted it to pursue the same disgorgement remedy
previously denied by the Federal Court. However, Justice Quigley
concluded this equitable jurisdiction is no wider than that of the
Federal Court when dealing with subject matter within that
Court's concurrent jurisdiction.
Justice Quigley also considered recent Federal Court of Appeal
jurisprudence, which granted a motion by Eli Lilly to strike
Apotex's claim against it for unjust enrichment, finding that
the Federal Court's jurisdiction to grant equitable relief
could not be used to grant a remedy that section 8 of the NOC
Regulations was intended to exclude (Apotex. v. Eli Lilly
Canada Inc., 2011 FCA 358). Justice Quigley held that while he
was not bound by stare decisis to the Federal Court of
Appeal decision, the doctrine of judicial comity supported
adherence to it. Justice Quigley also independently found that the
NOC Regulations constitute a comprehensive scheme and
complete code and, as such, a remedy for unjust enrichment does not
exist in the context of remedies provided in the NOC
Justice Quigley's decision went on to address whether, in
any event, Apotex had established the third element of the
tripartite test for unjust enrichment; namely, whether there is an
absence of a juristic reason for any enrichment. Justice Quigley
found that Apotex did not satisfy the test as the NOC
Regulations themselves constitute a juristic reason for any
alleged enrichment. Justice Quigley also noted the NOC
Regulations strike a balance with the "earlyworking" provisions of the Patent Act, which
permit accelerated market entry of generic products in Canada. He
found that permitting Apotex to claim disgorgement of the
innovator's revenues or profits would disrupt this balance.
Despite this comprehensive decision by Justice Quigley, the
future of claims for innovator profits in the Ontario courts awaits
final resolution. The decision, at time of publication, is
currently under appeal to the Ontario Court of Appeal.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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