Canada: $125-Million Pharmaceutical Damages Award Undone By Hearsay Rule

Over the past several years, Canadian courts have considered claims for damages by generic drug companies kept off the market due to patents asserted by brand-name drug companies under Canada's pharmaceutical patent regulatory scheme (the Patented Medicines (Notice of Compliance) Regulations). In one such case, the Federal Court awarded $125 million in damages (including interest) to Teva for being improperly kept off the market for its generic venlafaxine product. On May 31, 2016, the Federal Court of Appeal allowed an appeal of that decision on the basis that the trial judge had relied on inadmissible hearsay evidence in finding that Teva would be able to supply the market. The Court's judgment in Pfizer Canada Inc. v. Teva Canada Limited, 2016 FCA 161, delivered by Justice Stratas, signals a renewed attention to rigorous application of the rules of evidence, and is expected to have wide implications on the conduct of proceedings in the Federal Court.

The case arises under the Patented Medicines (Notice of Compliance) Regulations, under which brand-name drug companies may assert patents listed on the Patent Register to prevent approval of generic drug applications. An application under the Regulations triggers a 24-month stay preventing approval of the generic drug while the case is pending. Wyeth, now part of Pfizer, had sued ratiopharm, subsequently purchased by Teva, under the Regulations, in relation to a patent for its Effexor XR (venlafaxine) product. The patent was found to be improperly listed in association with Wyeth's product. The improper listing resulted in a delay of over 18 months before ratiopharm could enter the market.

The Regulations permit a generic company to claim for damages for the time they are kept off the market by an unsuccessful patent proceeding. At trial, Teva (claiming as ratiopharm's successor) was awarded $125 million in damages, including prejudgment interest, for the delay it experienced before approval of its venlafaxine product. 

One issue arising at trial was whether ratiopharm's supplier of raw venlafaxine was able and willing to make and deliver venlafaxine to supply the Canadian market. At trial, Teva led evidence from its Vice-President for Development Management and Regulatory Affairs that the supplier was so willing. He testified that he had received positive indications from a site visit, and he provided testimony in relation to several emails between his subordinates and the supplier. Pfizer objected to the emails as inadmissible hearsay evidence, but the trial judge determined that the evidence would be admitted and weighed appropriately. Although acknowledging that there was no direct witness from the supplier, the trial judge found the Teva evidence to be reliable on the supply issue.

The Federal Court of Appeal dismissed several grounds of appeal raised by Pfizer, but took great issue with the manner in which the hearsay evidence was handled. The Court noted that, as plaintiff, Teva bore the burden of proof in establishing that it could have had access to sufficient product and would have and could have used it. In his reasons, Justice Stratas noted that some rules of evidence have been liberalized of late, and that:

[83] ... Seduced by this trend towards flexibility, some judges in various jurisdictions have been tempted to rule all relevant evidence as admissible, subject to their later assessment of weight. But according to our Supreme Court, this is heresy. ...

The Court ordered that evidence from the supplier and the Teva subordinates was hearsay evidence and not admissible. Justice Stratas emphasized the right of parties in a civil action to confront evidence presented against their positions, and determined that, "all of the mischief associated with admitting hearsay evidence is present in this case." The Teva witness could not provide direct, first-hand evidence of the operating capacity of the supplier, any constraints they faced or the steps they may have taken. The Court determined that the evidence was neither necessary nor reliable (which could have justified an exception to the hearsay rule), and further noted that hearsay evidence was not admissible to corroborate other evidence, provide evidence of a department head in place of their subordinate or attest to the state of mind of an author of emails that had not been authenticated.

The Court did not reweigh the evidence, instead remitting the matter back to the trial judge on the issue of whether ratiopharm (Teva) would have and could have had access to sufficient quantities of venlafaxine at the relevant time to supply the market, which has a direct impact on the damages to which it may have been entitled. However, in guiding the trial judge in the redetermination, Justice Stratas was prescriptive in the rigour with which the trial judge must identify the evidence relied upon and reasons justifying any inference drawn, with reference to particular jurisprudence on when and how inferences may be made.

In this decision, the Federal Court of Appeal has provided a roadmap for litigants, counsel and trial judges alike for the renewed standard by which trial evidence should be assessed in the Federal Court. The case signals a more careful attention to deliberate application of the rules of evidence, and in particular the rule against admissibility of hearsay evidence. At a minimum, parties before the Federal Court will now be keenly aware of the standards that may be applied by the Court in assessing evidence tendered in support of damages claims.

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions