Canada: Portions Of Apotex's Requested Relief For Being Kept Off The Viagra® Market Struck

Last Updated: August 31 2016
Article by Alex Gloor

Most Read Contributor in Canada, October 2018

In an Aug. 8, 2016 Ontario Superior Court of Justice decision Lederman J. ruled on a motion brought by the defendant Pfizer seeking to strike claims to multiple forms of relief sought by the plaintiff Apotex. Apotex pled that it was entitled to various relief by virtue of being kept off of the Viagra® market by reason of Pfizer's ultimately invalid "446 Patent".

Background

Litigation between Apotex and Pfizer concerning Pfizer's '446 Patent (listed on the Patent Register against Viagra®) was first adjudicated in 2007 (the "2007 Decision"). In this case Apotex unsuccessfully alleged invalidity of the '446 Patent in a proceeding under the Patented Medicines (Notice of Compliance) Regulations (the "Regulations").1 Following its loss, Apotex commenced an action to impeach the 446 Patent in May 2009 (the "Apotex Action").

In separate and later proceedings under the Regulations Teva alleged that the '446 Patent was invalid on grounds different to those alleged by Apotex in the 2007 Decision. Teva was unsuccessful at Federal Court and the Federal Court of Appeal, but succeeded before the Supreme Court of Canada in 2012 (the "SCC Decision").2 Shortly after the SCC Decision, Apotex brought a successful claim for summary judgment in the Apotex Action on the basis that there was no genuine issue for trial following the SCC Decision.3 This summary judgment decision in the Apotex Action declared the 446 Patent invalid.

Apotex now seeks relief in the Ontario Court for purported harm in being kept off of the market by virtue of the invalid 446 Patent. Apotex's relief is sought on the basis of: a) section 8 of the Regulations; b) unjust enrichment; c) section 7 of the Trade-marks Act; d) public and private nuisance; e) conspiracy; f) the principle in Ashby v. White; and g) the English and Ontario Statute of Monopolies.

In the within motion Pfizer sought to strike each claim other than that made under the Statute of Monopolies. In brief, Pfizer argued that the claim under section 8 of the Regulations was unavailable as Apotex did not meet the statutory criteria, and that the Trade-Marks Act relief was unavailable as it conflicted with the Regulations and the principle of coherence requires that the relief under the Regulations must take precedence. With respect to the common-law relief, Pfizer argued that the Regulations and the Patent Act constitute a complete code that prohibit all claims of relief other than those contemplated in the governing statutes.

The Claim under Section 8 of the Regulations

Section 8(1) of the Regulations contemplates relief for a generic's loss suffered when a proceeding under the Regulations is "withdrawn or discontinued by the first person or is dismissed by the court".4 In this case, Apotex's allegations under the Regulations were held to be unjustified in the 2007 Decision. Thus, Apotex has no remedy pursuant to section 8(1), and its pleading in this regard was struck.

Lederman J.'s decision in this respect is consistent with a long line of jurisprudence from the FCA holding that a decision of invalidity does not entitle or allow a Court to "reach back" and retroactively dismiss an order of prohibition granted in a previous decision on the same patent under the Regulations.5

The Unjust Enrichment Claim  

It appeared that attempts by generics to make a claim for unjust enrichment were doomed following the ONCA's decision in Apotex v. Eli Lilly.6 In that case, the ONCA struck Apotex's claim for Lilly's profits on the basis that Apotex was not deprived of anything; Apotex had the ability to claim its loss suffered through section 8, and any additional enrichment of Lilly's did not correspond with Apotex's loss suffered. Thus, the three part test for unjust enrichment was not satisfied by Apotex's claim.

However, Lederman J. declined to strike Apotex's pleading in the present case. Apotex has tweaked its pleading to seek only the loss suffered by reason of being kept off the market rather than Pfizer's profits. Lederman J. also rejected the notion that Pfizer's "complete code" argument conclusively disposed of Apotex's rights with respect to common law causes of action. Thus, it was concluded that Apotex's pleading was not necessarily doomed to fail and the pleading was not struck.

The Trade-Marks Act Claim

Lederman J. also declined to strike Apotex's claim under section 7(a) of the Trade-marks Act. Pfizer argued that the Regulations provide a complete code and thus that, further to the principle of coherence, the Trade-Marks Act should be interpreted either: a) consistently with the Regulations; or b) that any conflict between the statutes should be resolved in favour of the Regulations. Lederman J. rejected this argument at this preliminary stage.

The Conspiracy and Nuisance Claims

Apotex claims damages pursuant to the torts of conspiracy and public and private nuisance. Lederman J. found that Apotex pleads all of the requisite elements of each cause of action and thus he did not strike any of these claims.

Regarding conspiracy, Apotex asserts that Pfizer's enforcement of its invalid patent was an unlawful act and that Pfizer should have recognized that the purpose of this enforcement was to cause Apotex injury. Lederman J. found that this claim was not necessarily doomed to fail.

Regarding public nuisance, Lederman J. held that Apotex pleaded both required elements of the tort (special damages and unreasonable interference) and thus that the claim would not necessarily fail. The purported restraint of Apotex's trade was pled to be interference, and Apotex's damages were pled to be distinct from those suffered by the public at large and thus "special".

Regarding private nuisance, Apotex asserted that it could not use its facilities for the manufacture or sale of sildenafil, and thus that there was substantial interference with its use or enjoyment of land. Lederman J. held that this pleading was potentially enough to ground a claim and thus it was not struck.

The Ashby v. White Claim

Apotex asserts a common law right to trade freely on the basis of the 1703 decision of Ashby v. White.7 Lederman J. held that the principle cited by Apotex from that case ("no right without a remedy") is not an independent cause of action and thus that Apotex's claim in this regard should be struck.

For more details, read the full version of the Pfizer v. Apotex decision.

Footnotes

Pfizer v. Apotex, 2007 FC 971, aff'd 2009 FCA 8

Pfizer v. Teva, 2009 FC 638, aff'd 2010 FCA 242, rev'd 2012 SCC 60

Apotex v. Pfizer, 2012 FC 1339, aff'd 2014 FCA 13

PM(NOC) Regulations at section 8(1)

Apotex v Syntex, 2010 FCA 155; Pfizer v. Ratiopharm, 2011 FCA 215; Eli Lilly v. Apotex, 2013 FCA 282, leave to appeal to SCC denied, SCC Docket 35714

2015 ONCA 305

7 2 Raym. Ld. 938

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