UPDATE: On December 10, 2020, the Supreme Court of Canada dismissed Pfizer's application for leave to appeal (Docket No. 39150) (see article here).
As previously reported, Justice O'Reilly of the Federal Court granted Pharmascience's motion for a summary trial on Pfizer's defence of ex turpi causa in an action for section 8 damages related to pregabalin (Pfizer's LYRICA) under the pre-amended Patented Medicines (Notice of Compliance) Regulations. The judge held that Pfizer's defence of ex turpi causa by reason of infringement was not legally viable as Pfizer did not bring an infringement action against Pharmascience in the real world.
On February 25, 2020, the Federal Court of Appeal dismissed Pfizer's appeal from the Federal Court decision substantially for the reasons given by Justice O'Reilly: Pfizer Canada ULC v Pharmascience Inc., 2020 FCA 55.
The Federal Court of Appeal (FCA) rejected Pfizer's submission that hypothetical infringement of its patent in the but-for world must be taken into account in any award of damages, noting that Pfizer not only did not bring an infringement action against Pharmascience in the real world, but also expressly confirmed on discovery that it would not have done so in the but-for world. It was the Federal Court of Appeal's view that the majority reasons in Apotex Inc. v Sanofi-Aventis (2014 FCA 68), endorsed by the Supreme Court, are binding and dispositive of the matter. As stated by Justice O'Reilly, that decision "stands for the proposition that the absence of obstacles to market entry in the real world should prevail in the but-for world; if a generic manufacturer could have made sales without objection from the patentee, those sales should be considered in the calculation of the generic's losses".
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