On April 21st, 2015, the Supreme Court of Canada
dismissed from the bench an appeal from the Federal Court of Appeal
decision in Apotex Inc. v. Sanofi-Aventis, 2014 FCA 68. The appeal dealt with the proper
calculation of the "but, for" world in PM(NOC )
proceedings and though the Federal Court of Appeal was split on the
issue, the Supreme Court unanimously sided with the majority in
this highly contentious area of patent law.
At issue was a series of patents owned by Sanofi for the drug
Ramipril, which were set to expire in 2005. Apotex had applied and
received regulatory approval from Health Canada in 2004, however
they did not receive their notice Notice of Compliance until
December 12, 2006 due to Sanofi's statutory stay of the
issuance, which was later found unsustainable. Both parties agreed
that Apotex was entitled to damages, however they disagreed about
how to calculate damages in the "but, for" world where
Sanofi had not applied for the statutory stay of issuance.
For a full recap of the FCA decision, please visit our earlier
summary, here. Below are the main takeaways from the FCA
decision upheld by the Supreme Court:
The relevant start and end dates for assessing damages are the
date which an applicant would have received their NOC and the date
on which the applicant is no longer at a loss, likely the date when
they actually receive their NOC
In constructing the hypothetical world, the Court must consider
the actual legal remedies available to each party during the
relevant period and should not consider possible actions available
had the statutory stay not been sought. Sanofi had argued that once
Apotex entered the market, Teva would have sought a summary
decision enabling it to join the market. In assessing the share of
the market for the generic during the liability period, there is no
"single hypothetical world" and an assessment of damages
should be decided on the evidence of each individual case,
regardless of whether there are cases involving other generics. For
example, the FCA upheld the finding that Apotex would receive 70
percent of the market regardless of the fact that the Trial Judge
would have also awarded Teva 30 percent of the market while finding
that an authorized generic would have taken 33 percent of the
A "ramp-up" period (the time it takes from regulatory
approval to full market penetration) should not be counted if it
occurs outside the period of liability.
In regards to damages based on lost secondary (off label) uses
of the patented medicine (Ramipril was originally patented for
treatment of hypertension, with subsequent patents for
heart-related health issues), it is up to the patent owner to
enforce their patent even though generic products may not be
promoted to the public for any specific use. In the present case,
Sanofi had not opposed the generic version as being interchangeable
and they could have brought an action for patent infringement if
Barring a unique set of facts, it appears that the decision of
the FCA will be the leading jurisprudence regarding the "but,
for" world for the foreseeable future.
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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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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