On March 30, 2023, the Ontario Superior Court of Justice dismissed Apotex’s claim under section 8 of the Patented Medicines (Notice of Compliance) Regulations (PMNOC Regulations) relating to Apo-Atomoxetine (Lilly’s STRATTERA) and Canadian Patent No. 2,209,735 (735 patent): Apotex v Eli Lilly, 2023 ONSC 1968.
Background
In 2008, Teva commenced an action to impeach the 735 patent (Teva impeachment action). Apotex subsequently served Lilly with a Notice of Allegation addressing the 735 patent and Lilly brought an application against Apotex under section 6(1) of the PMNOC Regulations (Apotex prohibition application).
Justice Barnes of the Federal Court presided over the trial of the Teva impeachment action and found the 735 patent invalid. The Minister of Health quickly granted Apotex a Notice of Compliance (NOC) for Apo-Atomoxetine. Justice Barnes also heard the Apotex prohibition application, but dismissed it for mootness. However, he found that none of Apotex’s allegations were justified and would have granted Lilly a prohibition order on the record before him.
On the basis of the dismissal of the prohibition application, Apotex started an action for section 8 damages in the Ontario Superior Court.
Apotex is not entitled to section 8 damages.
Justice Koehnen of the Superior Court determined that Lilly bears no liability to Apotex for any section 8 damages.
Relying on the jurisprudence and the Regulatory Impact Analysis Statement for the PMNOC Regulations, Justice Koehnen determined that “Lilly’s prohibition application was successful on the merits. It is only an unsuccessful, withdrawn, or discontinued prohibition application that gives rise to s. 8 damages.” Awarding section 8 damages would reward Apotex as a “free rider” on Teva’s accomplishment in the Teva impeachment action.
Justice Koehnen also exercised his discretion pursuant to subsection 8(5) of the PMNOC Regulations and took into account “two critical matters”: (i) that Apotex’s claims in the prohibition application failed and that (ii) Justice Barnes would have issued a prohibition order if not for the declaration of patent invalidity in the Teva impeachment action. These “elements are so core to the damages scheme under the PMNOC Regulations that they should lead to an assessment of damages at zero.”
Apotex would not have entered the market earlier in the hypothetical world than in the real world.
The Court assessed Apotex’s damages in the event it was wrong on the question of liability.
Justice Koehnen held that while Apotex could have launched Apo-Atomoxetine during the liability period, it would not have launched Apo-Atomoxetine any earlier than it did in the real world. In so holding, the Court took into account various factors, including:
- Apotex was risk-averse in the real world: Apotex preferred to wait for patent expiry (as originally asserted in its Form V) rather than challenge the 735 patent. Apotex only changed course when it learned of the Teva impeachment action. Once Apotex received its NOC, to minimize the risk of a successful Lilly appeal, Apotex pursued a joint venture with Teva rather than immediately entering the market.
- Apotex would have been at risk of infringing the 735 patent (until it was declared invalid): Apotex led evidence that it would have behaved differently in the hypothetical world absent the impediment of the 735 patent. However, Justice Koehnen determined that in the hypothetical world, Apotex remained at risk of a patent infringement action and potential damages greater than its Apo-Atomoxetine profits.
- Apotex would not have been the sole generic in the hypothetical world: While Apotex argued that it would have behaved differently as the sole generic in the hypothetical world, Justice Koehnen found that Teva likely would have received its NOC before Apotex.
Therefore, Justice Koehnen found that Apotex had not sustained any damages.
Apotex may appeal to the Ontario Court of Appeal as of right.
Should you have any questions, please do not hesitate to contact a member of the Pharmaceutical Litigation Group.
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