In this decision under section 8 of the Patented Medicines
(Notice of Compliance) Regulations
("Regulations"), Justice Zinn of the Federal
Court considered various issues pertaining to Ratiopharm's (now
Teva) claim for damages with respect to the drug venlafaxine,
marketed by Pfizer (previously Wyeth) under the brand name
Effexor®. This action arose from Wyeth's unsuccessful
prohibition application with regards to Canadian Patent 2,199,778,
which was held by the Federal Court of Appeal to be improperly
listed on the Patent Register against Effexor®.1
While the public version of Justice Zinn's decision only issued
on April 3, the confidential reasons for judgment were issued
earlier without the benefit of the reasons in the recent
In assessing Ratiopharm's damages claim, the Court adhered
to the framework or "roadmap" first set out in Justice
Snider's Ramipril decisions.3 As such, the
issues in this decision largely turn on the facts. The Court did
not finalize the quantum of damages, despite the parties'
encouragement to take a "broad-axe approach". Rather, it
sent the issue of quantum back to the parties. Select aspects of
the decision are discussed below.
Start Date for Liability Period
In determining the relevant time period for the section 8
damages assessment, only the start date was at issue. Wyeth argued
that the period began 45 days after it received Ratiopharm's
Notice of Allegation in respect of the '778 Patent (i.e., the
deadline for commencing a proceeding under the
Regulations) and could never be before the date certified
by the Minister. The Court rejected this argument, holding that the
improperly listed '778 Patent need not be considered in
assessing the start date. Further, the Court noted that the start
date is the Minister's certification date unless there is a
more appropriate date. A more appropriate date could be a date
preceding certification if the generic suffered losses in that
period. In this case, the start date was held to be the date that
Ratiopharm would have received its NOC but for the listing of the
'778 Patent, provided that Ratiopharm was ready to launch at
that date. In particular, the Court held that the relevant date was
the expiry date of another patent listed against Effexor®,
since Ratiopharm had agreed to await expiry of this patent prior to
receiving its NOC.
Market Entry of Other Generics
The Court placed the burden on Wyeth to prove when other
generics would have entered the venlafaxine market in the "but
for" world. On the facts before it, the Court agreed with
Ratiopharm that Novopharm (who sold a generic venlafaxine product
authorized by Wyeth) would have entered the market in the "but
for" world on the same date as the real world. This was due
mainly to Novopharm's manufacturing issues that would have
prevented it from entering the market in the "but for"
world any earlier than in the real world.
The Court also rejected Wyeth's argument that another
generic, Pharmascience, would have entered the market during
Ratiopharm's liability period.
Consistent with the holding of the Federal Court of Appeal in
the recent Ramipril appeals, Justice Zinn rejected
Ratiopharm's argument that no deduction should be made for the
fact that Ratiopharm's venlafaxine sales would go through a
"ramp up" period before reaching a steady state. In doing
so, the Court expressly chose not to follow its earlier
Pantoprazole4 decisionwhere a deduction for
ramp-up was declined. Justice Zinn reasoned that allowing a
deduction for ramp-up would result in a but for world with steady
state sales, a situation that he called a "...fiction divorced
from reality in any world, and an inaccurate accounting..."
(at paragraph 251).
The Court also addressed the relevant date from which
pre-judgment interest starts accumulating. Under the Ontario
Courts of Justice Act,5 pre-judgment interest
is calculated from the date at which the cause of action arose.
Wyeth argued that the relevant date was the date of dismissal of
the prohibition application. This was rejected in favour of the
date that Ratiopharm began to suffer loss.
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