Case:Apotex Inc., et al. v. Merck &
Co. Inc., et al. (SCC docket no. 36655)
Drug: MEVACOR® (lovastatin)
Nature of case: Leave to appeal from damages
decision following a declaration that Canadian Patent No. 1,161,380
(380 Patent) was valid and infringed
Successful party: Merck & Co. Inc. and
Merck Canada Inc.
Date of decision: April 14, 2016
On April 14, 2016, the Supreme Court of Canada
(SCC) dismissed Apotex Inc. and Apotex
Fermentation Inc.'s (Apotex) application for
leave to appeal a Federal Court of Appeal (FCA)
decision upholding a damage award for infringement of a patent
relating to lovastatin. The FCA held that a non-infringing
alternative (NIA) defence is legally relevant when
assessing damages, but that Apotex failed to establish on the
evidence that it could and would have pursued the NIA in the
"but for" world.
As we previously
reported, in the liability phase, the Trial Judge found that
Apotex infringed the 380 Patent for a method for making lovastatin
using a microorganism of the genus Aspergillus terreus (AFI-1).
The trial decision was confirmed by the FCA. In the damages
phase, the Federal Court (FC) found that Merck was
entitled to a total damages award of $119,054,327, plus
pre-judgement and post-judgement interest, and rejected
Apotex's arguments that the existence of an NIA is a relevant
factor in the assessment of damages.
Apotex appealed the decision on multiple grounds, including that
the FC erred by rejecting the legal relevance of non-infringing
lovastatin when computing damages, and that the damages for which
it is liable should be reduced because it had a NIA available. The
FCA held that the availability of an NIA is relevant in law when
assessing the patentee's lost sales. However, while Apotex
established that it had a real and viable NIA, the FCA found that
the evidence did not support Apotex's contention that it could
and would have pursued its NIA in the "but for" world.
The FCA dismissed Apotex's appeal with costs.
As a result of the SCC's dismissal of Apotex's appeal,
the FCA decision has been affirmed: an NIA defence is available as
a matter of law in the assessment of damages subject to being
established on the facts of each case.
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