Teva Canada Limited v Pfizer Canada Inc, 2014 FCA 138

This is was an appeal from an order of Justice de Montigny which dismissed an appeal from an order of Prothonotary Aronovitch striking those portions of Teva’s Statement of Claim seeking punitive and exemplary damages pursuant to an action under s. 8 of the PM(NOC) Regulations, [1] relating to the drug Viagra.

Teva sought punitive and exemplary damages, and a quantification of Pfizer’s profits since, in its view, the governing rule for establishing the quantum of punitive damages is proportionality. Teva argued that s. 8(4) of the Regulations allows it to make these claims. [4] Pfizer brought a motion to strike those portions of Teva’s Statement of Claim relating to punitive and exemplary damages and the quantification of profits. [5] The Prothonotary and subsequently the trial judge agreed with Pfizer. Teva appealed.

Appeal is dismissed.

The Court held that punitive and exemplary damages cannot be available where the statutory regime underlying the claim explicitly or implicitly precludes them. This is the case under the Regulations, which set out a comprehensive scheme with respect to compensation resulting from the operation of the statutory stay it provides for. [9]

The Court reaffirmed that the Regulations allow compensation for losses actually incurred by a second person by reason of the operation of the statutory stay contemplated by the Regulations, but it does not allow for other types of relief, such as disgorgement of profits or punitive damages. [10]

The Court also held that s. 8(5) of the Regulations cannot sustain a claim for punitive damages since, by their very nature, punitive damages are not “compensation”. [12]

An application for leave to appeal to the Supreme Court was filed on August 26, 2014.