Marc Richard

The Court of Appeal for Ontario dismissed Apotex Inc.'s appeal regarding its claim for damages under section 8 of the Patented Medicines (Notice of Compliance) Regulations.

Apotex sought damages for delayed market entry of its generic drug due to Eli Lilly's prohibition application.

The trial judge found that Apotex was not entitled to damages, as the prohibition application was dismissed as moot, not on the merits, and that Apotex would not have entered the market earlier in a hypothetical world without the prohibition application due to risk aversion and potential patent infringement liability.

The Court of Appeal upheld these findings, concluding that Apotex failed to demonstrate any actual entitlement to damages.

The plaintiff, a generic drug manufacturer, brought an action for damages against the defendants under s. 8 of the Patented Medicines (Notice of Compliance) Regulations for delayed market entry of its generic drug.

The plaintiff argued it was entitled to damages because the defendants' prohibition proceeding was dismissed for mootness after the underlying patent was invalidated in a separate proceeding.

The court dismissed the claim, finding that the plaintiff's allegations in the prohibition proceeding had failed on the merits, and s. 8 does not provide redress where the innovator prevailed on the merits but the patent was later invalidated by a third party.

The court also found that, even if liability existed, the plaintiff would not have entered the market any sooner in the hypothetical world due to its risk-averse nature.

This is a costs endorsement following the dismissal of an appeal.

The respondents, who won the appeal, claimed over $157,000 in costs.

The appellants, who lost the appeal, proposed $25,000.

The court found the respondents' costs submissions inadequate, lacking sufficient explanation for the hours claimed and indicating potential over-preparation.

The court ultimately awarded $25,000 in costs, finding the appellants' offer to settle on costs to be the best evidence of a reasonable, fair, and proportionate amount in the circumstances.

In a case management endorsement, the court stayed most of the plaintiff's claims for delayed generic drug market entry pending the appeal of a related decision, except for a claim under section 8 of the Patented Medicines (Notice of Compliance) Regulations.

The court also lifted a prior consent bifurcation order, directing that the trial of the section 8 claim proceed on both liability and damages to prevent technical delays and ensure the efficient resolution of the ten-year-old case.

Following the dismissal of the plaintiffs' action on a summary judgment motion, the successful defendants sought costs on an elevated or substantial indemnity basis of over $850,000, or alternatively partial indemnity costs of over $730,000.

The plaintiffs argued for an award of $150,000.

The court declined to award elevated costs, finding the plaintiffs' conduct did not rise to the level of being reprehensible or outrageous, despite making unfounded allegations of fraud and conspiracy.

Recognizing the high stakes and complexity of the litigation between two well-resourced pharmaceutical companies, the court awarded the defendants partial indemnity costs fixed at $700,000 inclusive of disbursements and taxes.

The defendants (Lilly) brought a motion for summary judgment to dismiss the plaintiffs' (Apotex) action for damages arising from Lilly's use of the PM(NOC) Regulations to delay Apotex's generic drug from entering the market.

Apotex claimed damages under the Statutes of Monopolies, the Trademarks Act, and common law conspiracy after Lilly's patent was later declared invalid.

The court found that while the action was not barred by the Limitations Act, 2002, the claims failed because the Patent Act and PM(NOC) Regulations constitute a complete code.

Lilly's actions in listing its presumptively valid patent and pursuing prohibition proceedings were authorized by law.

The motion for summary judgment was granted and the action was dismissed.

The defendants brought a motion for summary judgment.

Prior to the hearing, the plaintiffs objected to proceeding with the motion virtually via Zoom and requested an adjournment until an in-person hearing could be held.

The court denied the adjournment request, finding no prejudice to the parties in proceeding virtually.

The court noted that the Zoom platform is effective, the documentary record is easily accessible electronically, and an adjournment would cause unnecessary delay.

The motion was ordered to proceed virtually as scheduled.

The court issued trial management directions and an endorsement, adjourning a bifurcated liability trial scheduled to commence on May 21, 2019.

The adjournment was necessitated by the parties' lack of trial readiness, specifically concerning the plaintiff's uncertainty regarding witness identities (over 20 potential witnesses, some unnamed) and the failure to finalize an agreed statement of facts.

Additionally, the plaintiff's last-minute motion to add another foreign defendant, Eli Lilly S.A., introduced unresolved jurisdictional issues that would further complicate and extend the trial.

The court emphasized the importance of efficient trial management and the fair allocation of judicial resources, concluding that proceeding with the trial under these circumstances would risk exceeding the allotted time and prejudice other litigants.

The court issued trial management directions for an upcoming ten-day bifurcated trial on liability concerning a patent invalidity and public nuisance claim.

Directions were given regarding the exchange of witness affidavits for evidence in chief, read-ins from discovery transcripts, opening statements, and scheduling.

The court also directed that outstanding issues regarding document production and particulars of special damages be resolved summarily at an upcoming case conference.

The defendants moved to amend a Protective and Confidentiality Order to add a second law firm, Norton Rose Fulbright LLP, as "outside counsel" alongside their existing counsel.

The plaintiff opposed, citing a potential conflict of interest as Norton Rose Fulbright also represents another drug manufacturer with similar claims against the plaintiff in a separate action.

The court found that the defendants failed to provide a sufficient explanation for seeking to add Norton Rose Fulbright as co-counsel under paragraph 10(b) of the order, rather than simply seeking leave under paragraph 10(g) to allow them to view confidential information.

The court identified a foreseeable risk of conflict of interest due to Norton Rose Fulbright's dual representation and the lack of evidence regarding screening mechanisms or waivers.

The motion was dismissed.

The defendants sought directions for motions to strike portions of the plaintiff's Reply, which argued that the original patent invalidity decision could be supported on grounds other than the "promise doctrine" overturned by the Supreme Court.

The court, acting as case management judge, emphasized the need to move the complex, long-standing litigation towards trial and avoid further "silver bullet" motions on narrow legal points.

The judge ruled against scheduling Rule 21 or Rule 20 type motions, stating that the trial judge should determine the factors for exercising equitable discretion regarding the "special circumstances" doctrine.

However, motions within a Master's jurisdiction were directed to Master Sugunasiri.

The defendants sought to schedule a further motion for summary judgment on the Monopolies Act issue, having previously failed on a Rule 21 motion concerning the same claim.

The court denied the request, emphasizing that partial summary judgment is rarely appropriate in complex litigation, especially when recent amendments to pleadings have re-opened other significant issues, such as patent validity.

The judge concluded that the case should proceed to a single trial on all issues to avoid fragmented litigation and multiple appeals, which would prolong the proceedings and consume vast judicial resources.

The appellants (Sanofi-Aventis and Schering Corporation) appealed a motion judge's decision dismissing their motion to amend their statement of defence.

The appellants sought to plead that a 2009 Federal Court decision invalidating their patent for the drug Ramipril was based on wrong legal principles, specifically the "promise doctrine," which was subsequently struck down by the Supreme Court of Canada in 2017.

The motion judge had dismissed the motion on the basis of issue estoppel, finding no change in law justified departing from the doctrine.

The Court of Appeal allowed the appeal, holding that the Supreme Court's decision striking down the promise doctrine constituted a change in law that warranted exercising discretion not to apply issue estoppel, particularly given the centrality of the patent validity issue to the respondent's claim for damages.

This endorsement addresses three complex motions brought by the plaintiff Apotex Inc. and the defendants Sanofi-Aventis, Sanofi-Aventis Deutschland GmbH, Sanofi-Aventis Canada Inc. (collectively "Sanofi"), and Schering Corporation ("Schering"), seeking to compel answers to undertakings and refusals in a long-running pharmaceutical patent litigation.

The motions involved approximately 480 questions, later narrowed to 101.

The Master applied principles of relevance and proportionality under the Rules of Civil Procedure, emphasizing the balance between extensive discovery requests and the significant damages claimed.

Many broad requests for documents and information were denied as disproportionate or overbroad, while narrower, more targeted requests were granted.

The court also addressed issues of solicitor-client privilege and the obligation to state legal positions.

The defendants brought a motion for leave to amend their Statements of Defence to plead that a patent previously declared invalid by the Federal Court was actually valid, relying on a recent Supreme Court of Canada decision that overturned the 'promise doctrine' used to invalidate it.

The Superior Court of Justice dismissed the motion, holding that the proposed amendments constituted an impermissible collateral attack and were barred by issue estoppel.

The court found no 'special circumstances' to justify re-litigating the patent's validity, noting that under section 62 of the Patent Act, the Federal Court's declaration rendered the patent void ab initio.

The defendants abandoned their motion to strike the plaintiffs' claim on the day of the hearing.

The plaintiffs sought substantial indemnity or partial indemnity costs for preparing for this motion.

The court considered various factors under the Rules of Civil Procedure, including the complexity of the issues, the importance of the issues, and the parties' conduct.

The court found the hourly rates reasonable but the time docketed excessive given the nature of the motion and the plaintiffs' prior experience with similar motions.

The court awarded partial indemnity costs, finding that the defendants' conduct did not warrant substantial indemnity.

The defendants moved to strike various claims by the plaintiff, Apotex Inc., including claims under the Trade-marks Act and the Monopolies Acts, as well as claims for unjust enrichment and a "basket clause" for other relief.

The motion was brought under Rules 21.01(1)(b) and 25.11(b) and (c) of the Rules of Civil Procedure, arguing no reasonable cause of action, frivolousness, vexatiousness, or abuse of process, and also raising arguments of "complete code" and res judicata.

The court dismissed the defendants' motions, except for the unjust enrichment and "basket clause" claims which Apotex did not oppose, finding that the legal issues were insufficiently settled to be decided at the pleadings stage.

The court emphasized the need to avoid piecemeal appeals and directed a case conference to expedite the matter to trial.