Canada: With Quantum Of Damages Settled, Parties Unable To Agree On Quantum Of Costs Or Calculation of Pre- and Post-Judgment Interest in Section 8 Case (Intellectual Property Weekly Abstracts Bulletin – Week Of August 11, 2014)

Last Updated: August 15 2014

Edited by Chantal Saunders and Beverley Moore , Adrian Howard and Ryan Steeves

NOC Cases

With Quantum of Damages Settled, Parties Unable to Agree on Quantum of Costs or Calculation of Pre- and Post-Judgment Interest in Section 8 Case
Teva Canada Ltd. v. Pfizer Canada Inc., 2014 FC 634

Drug: venlafaxine

In the Federal Court's earlier decision (summary here), the parties were instructed to attempt to reach an agreement on the quantity of damages and costs in an action for damages under section 8 of the PM(NOC) Regulations. These supplementary reasons report that the parties agreed on the damages accrued during the relevant period (approximately $92 million), but were unable to agree on the quantum of costs, on the calculation of prejudgment interest, or on the rate of post-judgment interest.

Teva was the successful party and was judged entitled to its costs. It claimed costs of approximately $2 million, but in an attempt to bring the matter to a close, requested a lump-sum award of $1.8 million. Alternatively, Teva requested its costs be determined at the upper level of Column IV, and include various other costs and expenses for attendance at discoveries, motions, witness meetings, travel and expert/fact witness fees. Considering various objections made by Pfizer, the Court determined that this was not an appropriate case for the Court to award a lump-sum; the Court ordered the costs to be assessed, guided by the decisions in Janssen-Ortho Inc. v. Novopharm Ltd.  and Apotex Inc. v. H Lundbeck A/S. Notably, the Court directed that Teva was to be entitled to its costs at the upper level of Column IV, among other things.

With respect to prejudgment interest, the date from which the prejudgment interest ran was determined in the Court's earlier decision; the issue here was on what sum is the interest calculated. The Court held that prejudgment interest on the damage award is calculated as follows: "First, the interest owed from the beginning of the Relevant Period to the end must be calculated from the beginning of each month on the basis of the damages accruing that month and second, the interest on the total amount of the award outstanding at the end of the Relevant Period must be calculated from the end of the Relevant Period to the date of judgment."

With respect to post-judgment interest, it was accepted that it accrues on the money owed including costs and pre-judgment interest, from the date of the final judgment at the post-judgment interest rate. The Court held that section 127(1) of the Courts of Justice Act governs post-judgment interest in this case, which was determined to be 3% at the time.
Teva was awarded approximately $32 million in prejudgment interest, 3% post-judgment interest on approximately $124 million (the sum of damages and pre-judgment interest), and its assessed costs, which are to be awarded at the rate of 3% from the date of judgment until payment.

Class-actions

Causes of action found against Pfizer for a BC class-action certification based on the VIAGRA® patent
Low v. Pfizer Canada Inc., 2014 BCSC 1469

Pfizer had a Canadian patent for VIAGRA® that was found to not comply with the disclosure requirement by the Supreme Court in an earlier PM(NOC) proceeding (Teva Canada Ltd. v. Pfizer Canada Inc., 2012 SCC 60).  This finding was later applied on summary judgment in favour of Apotex (Apotex v. Pfizer Ireland Pharmaceuticals, 2012 FC 1339) and upheld on appeal (Pfizer Ireland Pharmaceuticals v. Apotex Inc., 2014 FCA 13).  

The plaintiff in this proceeding now seeks to certify a class action against Pfizer. The plaintiffs allege that Pfizer wrongfully obtained and relied on a patent, which inflated the price of VIAGRA® by delaying the introduction of competing generic versions.
The only issue on this application was whether the plaintiff's claim discloses a cause of action for the purposes of certification.  The three causes of action pleaded were:

  1. unlawful interference with economic relations;
  2. waiver of tort; and
  3. unjust enrichment.

The Court found that subsection 55.2(4) of the Patent Act and the PM(NOC) Regulations do not govern the rights of actions of consumers.  So it was held that while the statutes do not create a right of action for consumers, neither do they bar an action by consumers if the conduct that was in breach of statute is also relevant to a common law cause of action.  

In the result, the Court found a cause of action for the claims to unlawful interference with economic relations and for unjust enrichment.  The other s.4(1) requirements for certification still need to be addressed in a further application.

Industry News

The BLG Life Sciences Group has published LIFESIGNS: Life Sciences Legal Trends in Canada, a Report on Intellectual Property, Litigation, Corporate Commercial legal trends and industry developments in Canada.

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