This case involved a contractual dispute over a settlement agreement between pharmaceutical companies GSK and Pharmascience.
GSK claimed a stipulated payment from Pharmascience, alleging that a third-party generic manufacturer (Teva) had triggered a payment clause by entering the Canadian market.
The central issue was the interpretation of the term 'sale of its valacyclovir product in the Canadian market' within an exception clause, specifically whether it referred to ex-factory sales or downstream sales.
The court found that the term objectively meant ex-factory sales, considering the commercial context, the parties' control over sales, and the agreement's overall purpose.
Since Teva's ex-factory sales ceased within the 60-day period stipulated in the exception, the exception applied, and no payment was owed by Pharmascience.
The court dismissed GSK's action.
