On October 30, 2014, the Supreme Court of Canada granted leave to Sanofi-Aventis'
("Sanofi") application for leave to appeal a decision of
the Federal Court of Appeal (2014 FCA 68). By granting leave to Sanofi, the
Supreme Court will now consider for the first time the correct
interpretation of, and the correct legal framework applicable to
quantifying section 8 damages under the Patented Medicines
(Notice of Compliance) Regulations ("PM(NOC)
The PM(NOC) Regulations strike a balance between the
interests of innovative pharmaceutical companies and generic
manufacturers, by requiring generic manufacturers to address
innovators' patents before receiving approval from the Minister
of Health to market their copycat drugs. This scheme provides a set
of rights to innovative companies who develop new drugs and
patents, and to generic manufacturers who market copies of such
drugs at reduced prices.
Section 8 of the PM(NOC) Regulations provides generic
manufacturers with a right to compensation for losses suffered
during the period of delay caused in part by unsuccessful
litigation brought under the PM(NOC) Regulations.
In the lower court's decision, a divided Federal Court of
Appeal disagreed about the correct legal framework applicable to
quantifying Apotex Inc.'s section 8 damages for having been
delayed entry for Ramipril to the Canadian market. Under the
construct affirmed by the majority, the section 8 compensation
awarded to Apotex in this single action was over $200 million.
However, the dissent held that the legal framework used by the
trial judge (and affirmed by the majority) is one that
"inherently leads to windfalls" for both the plaintiff
and other generic manufacturers seeking section 8 damages – a
result, the dissent found to have occurred in the case at bar,
particularly when considering the combined effect of the multiple
section 8 claims that have been advanced in respect of
The Supreme Court's consideration of this issue will be of
substantial precedential value and will inject clarity into the
body of section 8 jurisprudence that has developed. Given the
multitude of section 8 damages cases proceeding before the Federal
and Provincial Courts, and the billions of dollars at stake in
current and future actions, the Supreme Court's decision will
have important ramifications for the Canadian pharmaceutical
industry and the public.
Sanofi is represented by Andrew Reddon, Steven Mason, David Tait
and Sanjaya Mendis of McCarthy Tétrault LLP.
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.
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