Canada: Claim For Section 8 Damages Allowed Intellectual Property Weekly Abstracts Bulletin - Week Of May 27, 2013)

Last Updated: June 7 2013
Most Read Contributor in Canada, September 2016

Edited by Chantal Saunders and Beverley Moore /p>

Claim for Section 8 Damages Allowed

Apotex Inc. v. Pfizer Canada Inc., 2013 FC 493
Drug: azithromycin

In this case, Apotex claimed damages pursuant to s. 8 of the NOC Regulations, and Pfizer alleged that Apotex should not be entitled to damages, due to the principles of ex turpi causa relating to its alleged infringement of the relevant patent. The period of liability and the quantum of damages will be determined in a separate proceeding. The Court held that Apotex had made out its claim for compensation.

The Court held that, under the principles of judicial comity, it was bound by the construction of the patent performed by the judge in the NOC Proceeding, as it had not been shown any reason to depart from that construction.

The Court accepted that there is a close connection between s. 6 and s. 8 of the NOC Regulations, as to hold otherwise would "create a duplicate regulatory alternative to infringement and impeachment actions under the Patent Act, one completely disconnected from the rest of the scheme of the Regulations." (para 20). Furthermore the allegations addressed in the s. 8 proceeding must relate to the proceeding brought pursuant to s. 6. Thus, entirely new allegations of infringement or invalidity are not relevant in a s. 8 proceeding. Now that the product is on the market and can be tested, evidence can be introduced to show actual infringement. However, as the NOA did not raise issues of invalidity, such issues cannot now be alleged in the context of the s. 8 proceeding.

The Court held that it is settled law that the principles of ex turpi causa do not prevent a s. 8 proceeding from being brought. However, they do apply to the relevant circumstances a court should consider pursuant to s. 8(5). In this case, the Court held that Pfizer had not provided evidence to show, on a balance of probabilities, that Apotex infringed the patent at issue; they had only shown the possibility that the tablets may have contained a small amount of infringing material. Thus, the Court did not rule out the possibility that Pfizer's evidence could be relevant to the amount of compensation appropriate pursuant to s. 8(5).

In this case, the Court held that Apotex must meet two requirements: 1) it must show that Pfizer's application pursuant to s. 6(1) was dismissed; and 2) it must show it suffered a loss during the period it was kept off the market. Apotex was held to have met those requirements. Thus, Apotex' claim was allowed, with quantum to be determined.

Costs Awarded on Substantial Indemnity Basis for Summary Judgment Motion

Apotex v. Abbott et al., 2013 ONSC 2958
Drug: Lansoprazole

Abbott and Takeda had previously been successful in a motion for partial summary judgment dismissing Apotex' claims for disgorgment of profits based on allegations of unjust enrichment (Decision here; summarized here). The parties were unable to agree on the costs of the motion. This decision considers the circumstance and sets the costs award on a substantial indemnity basis.

The Court held that this was a complex summary judgment motion. In this case, Abbott and Takeda were held to have separate interests in this proceeding, and did not produce duplicative work. Thus, each should be entitled to their costs.

The Court held that Apotex had made claims of wrongful allegations by alleging that Abbott and Takeda engaged in abusive conduct by merely invoking the regime that Parliament created. The Court could not condone a strategy where these types of allegations could be pled, and a party would be shielded from costs consequences by not vigorously pursuing them. While the allegations at issue were held not to be akin to fraud or actual deceit, they were held to cross the line into counter-productive conduct that warrants a costs sanction.

The Court also held that although a finding of forum shopping was not explicitly made, the similarities between this proceeding and those in Federal Court are "plain and striking". "Out of the same facts, Apotex tried its argument in two different forums and, unsurprisingly, received the same answer twice." (para 27).

Thus, the Court awarded substantial indemnity costs, although, it did reduce the amount claimed by Abbott and Takeda to $65,000 and $39,000 respectively.

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