Apotex Inc. v Pfizer Canada Inc. – 2013 FC 493

Apotex claimed damages under s. 8 of the PM(NOC) Regulations on grounds that it incurred a loss as a result of being kept out of the market for a generic version of Pfizer’s patented azithromycin tablets (under Canadian Patent No. 1,314,876, “the ‘876 patent”). Pfizer’s application to prohibit the Minister of Health from issuing Apotex an NOC was dismissed by Snider J. in 2003 FC 1428. She concluded that Apotex’s allegation that its tablets would not infringe the ‘876 patent was justified on the evidence.

Apotex’s s. 8 claim is allowed with costs; the quantum of compensation to be determined in a subsequent proceeding.

Framing the Issues

            Stare Decisis

Based on the concepts of stare decisis and judicial comity, Justice Snider’s construction of the ‘876 patent is binding on this s. 8 proceeding unless it is, for strong reasons, necessary to depart from it. The Court held that it was not provided with any reason to depart from Justice Snider’s construction and, therefore, was bound by it.

            Nature of the PM(NOC) Regulations

S. 8 does not create a free-standing right of action, entirely separate from the s. 6 prohibition proceedings.

The prohibition application would have been founded on the issues raised in the original NOA and an assessment of whether they could be shown to be unjustified. It would be anomalous for the first person later to be faced, when assessing damages flowing from the prosecution of that application, with new and unforeseeable challenges.

Given the relationship between ss. 6 and 8, the judge hearing the s. 8 action must have regard to the issues put in play in the s. 6 application. This means that entirely new allegations of non-infringement or invalidity are not “relevant” for purposes of s. 8. The NOA defined the issues in the s. 6 application and, continues to define the limits of what is relevant for purposes of s 8.

Section 8 Damages

            Has Apotex Met the Conditions for Relief under s. 8?

Apotex has met the conditions for relief under s. 8 of the Regulations.

Apotex succeeded in defeating Pfizer’s application for an order prohibiting the Minister of Health from issuing Apotex an NOC. This is sufficient to entitle it to compensation for the loss suffered during the period of time it was kept off the market.

This entitlement is subject to Pfizer’s submission that Apotex would have entered the market with material that infringed the ‘876 patent, notwithstanding Justice Snider’s conclusion that Apotex’s allegation of non-infringement was justified on the evidence before her.

            Has Pfizer Proved that Apotex Would Have Infringed the ‘876 Patent If It Had Entered the Market without Having to Invoke the Regulations? 

Pfizer has not established infringement of the ‘876 patent.

The evidence supports only the possibility that Apotex’s tablets may have contained some small amount of infringing material before the expiry of the ‘876 patent. It is insufficient to support a conclusion, on a balance of probabilities, that Apotex’s tablets did contain infringing material. Therefore, Apotex’s s. 8 claim cannot be defeated entirely, either on the basis that its damages should be reduced to zero under s. 8(5), or according to the doctrine of ex turpi causa. The evidence before the Court, however, may be relevant to the amount of compensation that is appropriate under s. 8(5), a matter to be determined separately.