Apotex Inc. v. Sanofi-Aventis et al., (2014) 456 N.R. 279 (FCA)

• Judge: Sharlow, Pelletier and Mainville, JJ.A.
• Court: Federal Court of Appeal (Canada)
• Case Date: March 14, 2014
• Jurisdiction: Canada (Federal)
• Citations: (2014), 456 N.R. 279 (FCA);2014 FCA 68

Apotex Inc. v. Sanofi-Aventis (2014), 456 N.R. 279 (FCA)

MLB headnote and full text

[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

Temp. Cite: [2014] N.R. TBEd. MR.029

Apotex Inc. (appellant) v. Sanofi-Aventis, Sanofi-Aventis Deutschland GmbH and Sanofi-Aventis Canada Inc. (respondents)

(A-191-12)

Sanofi-Aventis, Sanofi-Aventis Deutschland GmbH and Sanofi-Aventis Canada Inc. (appellants) v. Apotex Inc. (respondent)

(A-193-12)

Sanofi-Aventis, Sanofi-Aventis Deutschland GmbH and Sanofi-Aventis Canada Inc. (appellants) v. Apotex Inc. (respondent)

(A-397-12)

Sanofi-Aventis, Sanofi-Aventis Deutschland GmbH and Sanofi-Aventis Canada Inc. (appellants) v. Apotex Inc. (respondent)

(A-474-12; 2014 FCA 68; 2014 CAF 68)

Indexed As: Apotex Inc. v. Sanofi-Aventis et al.

Federal Court of Appeal

Sharlow, Pelletier and Mainville, JJ.A.

March 14, 2014.

Summary:

Apotex Inc. sold a generic version of ramipril (Apo-ramipril), a drug used mainly to treat hypertension. Sanofi-Aventis held patent rights to a brand-name version of ramipril (ALTACE). In spite of the fact that Apotex received certain regulatory approvals from Health Canada in 2004, it was unable to commence sales of Apo-ramipril until December 12, 2006, when it received its Notice of Compliance (NOC) pursuant to the Patented Medicines (Notice of Compliance) Regulations. In whole or in part, the delay was caused by the actions of Sanofi, which exercised its rights under the Regulations to a statutory stay of the issuance of a NOC to Apotex. Apotex commenced an action against Sanofi, claiming damages pursuant to s. 8 of the Regulations, for the loss it suffered during the period from April 26, 2004 to May 2, 2008. Sanofi raised issues respecting the validity of s. 8 which were considered in separate proceedings.

The Federal Court, in a decision reported 410 F.T.R. 145; 2012 FC 551 (the validity judgment), rejected Sanofi's arguments respecting the validity of s. 8. Sanofi acknowledged that if s. 8 was valid, then Apotex was entitled to damages under s. 8, but disputed certain elements of Apotex's claim, including: (a) the relevant dates for computing the loss; and (b) the various assumptions and projections built into the assessment of damages.

The Federal Court, in a decision reported 410 F.T.R. 78 (liability judgment), dealt with the issues accordingly. The court, inter alia, held that the relevant period for the purpose of determining Apotex's net lost profits commenced on April 26, 2004 (the patent hold date) and ended on December 12, 2006. For purposes of calculating damages, the court determined the size of the ramipril market in a hypothetical world having regard to generic competition by an authorized generic and another competing generic, Teva. While the court was unable to finalize a quantum of damages, the court expressed the hope that Sanofi and Apotex could quickly agree on a final amount to be paid by Sanofi to Apotex based on the court's reasons for judgment. Apotex appealed the liability judgment (Docket A-191-12). Sanofi brought a separate appeal from the liability judgment (Docket A-193-12). Sanofi brought an additional appeal (Docket A-397-12) respecting a subsequent order and direction issued by the trial judge on June 22, 2012 (the "Subsequent Ramp-Ups Order") which allowed a motion for reconsideration submitted by Apotex and which resulted in an amendment to the liability judgment. Sanofi also brought a subsequent appeal (Docket A-474-12), from a subsequent judgment of the trial judge dated November 2, 2012 (the "Final Quantum Judgment") which ordered, further to the liability judgment, the precise amount to be paid by Sanofi to Apotex, together with post-judgment interest.

The Federal Court of Appeal, Mainville, J.A., dissenting, allowed the Apotex appeal in A-191-12. The trial judge erred in ruling that Teva would have entered the hypothetical market during the liability period. The court dismissed Sanofi's appeals in A-193-12 and A-397-12. The court allowed Sanofi's appeal in A-474-12, solely to facilitate the redetermination of the quantum of damages.

Editor's Note: An appeal respecting the validity judgment was also dismissed - see 459 N.R. 179; 2014 FCA 69.

Food and Drug Control - Topic 1102

Drugs - New and innovative drugs - Legislation, re - The Federal Court of Appeal, per Mainville, J.A., in a dissenting judgment, reviewed the statutory and regulatory framework respecting patents for prescription drugs - See paragraphs 8 to 23.

Food and Drug Control - Topic 1104

Drugs - New and innovative drugs - Notice of compliance - General - [See Food and Drug Control - Topic 1102 ].

Food and Drug Control - Topic 1108.2

Drugs - New and innovative drugs - Notice of compliance - Prohibition order - Compensation by first person - Sanofi-Aventis owned patent rights to a brand-name version of ramipril (ALTACE), a drug used mainly to treat hypertension - Apotex Inc. wished to market a generic verison of ramipril, but there were delays in obtaining a Notice of Compliance (NOC) from 2004 to 2008, because Sanofi had filed an application for a prohibition order and obtained a statutory stay under the Patented Medicines (NOC) Regulations - Apotex claimed that Sanofi was liable for the loss it suffered during the delay (Regulations, s. 8) - An issue arose as to the commencement and end dates for the period of liability for purposes of s. 8 - The Federal Court considered a number of dates proposed by the parties, but in the result determined that the liability period ran from April 26, 2004 (the patent hold date) to December 12, 2006 (the date of Apotex's NOC for ramipril) - Sanofi appealed - The Federal Court of Appeal rejected this ground of appeal - See paragraphs 32 to 45, 71 to 100 and 152.

Food and Drug Control - Topic 1108.2

Drugs - New and innovative drugs - Notice of compliance - Prohibition order - Compensation by first person - Sanofi-Aventis owned patent rights to a brand-name version of ramipril (ALTACE), a drug used mainly to treat hypertension - Apotex Inc.'s attempts to market a generic verison of ramipril (Apo-ramipril) were delayed because Sanofi applied for a prohibition order and obtained a statutory stay under the Patented Medicines (Notice of Compliance) Regulations - Apotex claimed that Sanofi was liable for the loss it suffered because of the delay (Regulations, s. 8) - Sanofi submitted that the "loss" referred to in s. 8 of the Regulations did not contemplate recovery by a second person (generic) for sales attributable to an unapproved indication or use, in this case the Heart Outcomes Prevention Evaluation study (HOPE study) - The Federal Court, on the facts of this case, concluded that Apotex was entitled to compensation for lost sales of its generic version of ramipril associated with the HOPE indications - Sanofi appealed - The Federal Court of Appeal rejected this ground of appeal - See paragraphs 131 to 135 and 152.

Food and Drug Control - Topic 1108.2

Drugs - New and innovative drugs - Notice of compliance - Prohibition order - Compensation by first person - Sanofi-Aventis owned patent rights to a brand-name version of ramipril (ALTACE), a drug used mainly to treat hypertension - Apotex Inc.'s attempts to market a generic verison of ramipril were delayed because Sanofi applied for a prohibition order and obtained a statutory stay under the Patented Medicines (Notice of Compliance (NOC)) Regulations - Apotex claimed against Sanofi for the losses it suffered because of the delay (Regulations, s. 8) - The Federal Court found that the period of delay (liability period) ran from April 26, 2004 to December 12, 2006 - The court, for purposes of assessing damages, estimated the size of the ramipril market in a hypothetical world during the liability period, taking into account generic competition - The trial judge concluded that an authorized generic (AG) (ratiopharm inc.) and a generic (Teva) would have entered the hypothetical market during the s. 8 liability period, but another generic (Riva) would not have done so - Sanofi and Apotex appealed - The Federal Court of Appeal agreed that the AG would have entered the hypothetical market during the liability period, however, neither Riva nor Teva would have done so - In reaching this conclusion, the court discussed the proper methodology for determining the date on which the potential competitors would have entered the hypothetical market and whether there were NOC Regulations in the hypothetical world - See paragraphs 46 to 68, 101 to 120 and 152 to 188.

Food and Drug Control - Topic 1108.2

Drugs - New and innovative drugs - Notice of compliance - Prohibition order - Compensation by first person - Sanofi-Aventis owned patent rights to a brand-name version of ramipril (ALTACE), a drug used mainly to treat hypertension - Apotex Inc.'s attempts to market a generic verison of ramipril were delayed because Sanofi applied for a prohibition order and obtained a statutory stay under the Patented Medicines (Notice of Compliance (NOC)) Regulations - Apotex claimed against Sanofi for the losses it suffered because of the delay (Regulations, s. 8) - The Federal Court found that the period of delay (liability period) ran from April 26, 2004 to December 12, 2006 - The trial judge then, for purposes of calculating damages, proceeded to assess the hypothetical ramipril market during the relevant period - The trial judge held that based on the principle in Alendronate (FCA 2009), no regard should be had to a "duplicate ramp-up adjustment" (i.e., for a ramp-up period in the hypothetical market and in the real market) - Ramp-up was the period of time it took a drug manufacturer to penetrate the market to its full potential - The Federal Court of Appeal agreed with the trial judge - See paragraphs 121 to 130 and 189 to 193.

Cases Noticed:

Bristol-Myers Squibb Co. et al. v. Canada (Attorney General) et al., [2005] 1 S.C.R. 533; 334 N.R. 55; 2005 SCC 26, refd to. [para. 8].

AstraZeneca Canada Inc. v. Canada (Minister of Health) et al., [2006] 2 S.C.R. 560; 354 N.R. 88; 2006 SCC 49, refd to. [para. 8].

Apotex Inc. v. Merck & Co. et al., [2010] 2 F.C.R. 389; 391 N.R. 336; 2009 FCA 187, refd to. [para. 8].

Alendronate - see Apotex Inc. v. Merck & Co. et al.

Shoppers Drug Mart Inc. et al. v. Ontario (Minister of Health and Long-Term Care) et al., (2013), 451 N.R. 80; 312 O.A.C. 169; 2013 SCC 64, refd to. [para. 9].

Katz Group Canada Inc. v. Ontario (Minister of Health and Long-Term Care) - see Shoppers Drug Mart Inc. et al. v. Ontario (Minister of Health and Long-Term Care) et al.

Eli Lilly & Co. et al. v. Novopharm Ltd. et al., [1998] 2 S.C.R. 129; 227 N.R. 201, refd to. [para. 22].

Merck Frosst Canada Inc. et al. v. Canada (Minister of National Health and Welfare) et al. (1995), 169 N.R. 342; 55 C.P.R.(3d) 302 (F.C.A.), refd to. [para. 22].

Bull (David) Laboratories (Canada) Inc. v. Pharmacia Inc. et al., [1995] 1 F.C. 588; 176 N.R. 48; 58 C.P.R.(3d) 209 (F.C.A.), refd to. [para. 16].

Pharmacia Inc. et al. v. Canada (Minister of National Health and Welfare) - see Bull (David) Laboratories (Canada) Inc. v. Pharmacia Inc. et al.

Ferring Inc. v. Canada (Minister of Health) et al., [2008] 1 F.C.R. 19; 310 F.T.R. 185; 2007 FC 300, affd. (2007), 370 N.R. 263; 2007 FCA 276, refd to. [para. 42].

Housen v. Nikolaisen et al., [2002] 2 S.C.R. 235; 286 N.R. 1; 219 Sask.R. 1; 272 W.A.C. 1; 2002 SCC 33, refd to. [para. 70].

Unilin Beheer BV v. Beery Floor NV, [2007] EWCA Civ 364 (Eng. C.A.), refd to. [para. 72].

Eli Lilly Canada Inc. v. Apotex Inc. et al., [2010] F.T.R. Uned. 895; 89 C.P.R.(4th) 332; 2010 FC 952, refd to. [para. 72].

Aventis-Pharma Inc. v. Pharmascience Inc. (2009) 78 C.P.R.(4th) 54; 2009 FC 915, refd to. [para. 72].

Aventis Pharma Inc. et al. v. Apotex Inc. et al. (2006), 354 N.R. 316; 53 C.P.R.(4th) 447; 2006 FCA 328, refd to. [para. 73].

Sanofi Aventis v. Apotex - see Aventis Pharma Inc. et al. v. Apotex Inc. et al.

AB Hassle et al. v. Apotex Inc. et al. (2006), 350 N.R. 219; 265 D.L.R.(4th) 363; 47 C.P.R.(4th) 329; 2006 FCA 51, refd to. [para. 76].

Apotex Inc. v. Canada (Minister of National Health and Welfare) et al. (1997), 219 N.R. 151; 76 C.P.R.(3d) 1 (F.C.A.), leave to appeal refused [1998] 1 S.C.R. viii, refd to. [para. 76].

Apotex Inc. v. Canada (Attorney General) et al., [2000] 4 F.C. 264; 255 N.R. 319 (F.C.A.), leave to appeal refused [2001] 1 S.C.R. v, refd to. [para. 76].

Eli Lilly & Co. et al. v. Novopharm Ltd. et al. (1997), 137 F.T.R. 32; 76 C.P.R. (3d) 312 (T.D.), refd to. [para. 76].

Bayer AG et al. v. Canada (Minister of National Health and Welfare) et al. (1997), 142 F.T.R. 130; 77 C.P.R.(3d) 129 (T.D.), refd to. [para. 76].

Bayer Inc. et al. v. Canada (Minister of National Health and Welfare) et al. (1998), 154 F.T.R. 192; 82 C.P.R.(3d) 359 (T.D.), refd to. [para. 76].

Virgin Atlantic Airways Ltd. v. Zodiac Seats UK Ltd., [2013] N.R. Uned. 133; [2013] UKSC 46, refd to. [para. 81].

Poulton v. Adjustable Cover, [1908] 2 Ch. 430, refd to. [para. 83].

Coflexip v. Stolt (No. 2), [2004] F.S.R. 34, refd to. [para. 83].

Apotex Inc. v. Syntex Pharmaceuticals International Ltd. et al. (2010), 404 N.R. 371; 84 C.P.R.(4th) 409; 2010 FCA 155, refd to. [para. 90].

Ratych v. Bloomer, [1990] 1 S.C.R. 940; 107 N.R. 335; 39 O.A.C. 103, refd to. [para. 109].

Sanofi-Aventis Canada Inc. v. Novopharm Ltd. et al., [2008] 1 F.C.R. 174; 364 N.R. 325; 2007 FCA 163; 282 D.L.R.(4th) 476; 59 C.P.R.(4th) 416; 2007 FCA 163, refd to. [para. 115].

Apotex Inc. v. Merck Canada Inc. et al., [2012] F.T.R. Uned. 607; 105 C.P.R.(4th) 399; 2012 FC 1235, refd to. [para. 124].

Apotex Inc. v. Takeda Canada Inc. (2013), 444 F.T.R. 120; 2013 FC 1237, refd to. [para. 124].

Apotex Inc. v. Merck & Co. et al. (2008), 335 F.T.R. 255; 2008 FC 1185, refd to. [para. 128].

Apotex Inc. v. Nycomed Canada Inc., [2011] F.T.R. Uned. 878; 100 C.P.R.(4th) 1; 2011 FC 1441, affd. (2012), 434 N.R. 43; 105 C.P.R.(4th) 16; 2012 FCA 195, leave to appeal refused [2012] 3 S.C.R. xiv, refd to. [para. 134].

Aventis Pharma Inc. et al. v. Pharmascience Inc. et al. (2006), 352 N.R. 99; 2006 FCA 229, refd to. [para. 181].

Sanofi-Aventis Canada Inc. et al. v. Novopharm Ltd. (2011), 420 N.R. 115; 2011 FCA 149, refd to. [para. 191].

Teva Canada Ltd. v. Nycomed Canada Inc. et al. (2012), 433 N.R. 197; 2012 FCA 129, refd to. [para. 191].

Statutes Noticed:

Patent Act, R.S.C. 1985, c. P-4, sect. 55.2 [para. 18].

Patent Act Regulations (Can.), Patented Medicines (Notice of Compliance) Regulations, SOR/93-133, sect. 8 [para. 23].

Patented Medicines (Notice of Compliance) Regulations - see Patent Act Regulations (Can.).

Counsel:

Harry Radomski, Nando DeLuca and Ben Hackett, for the appellants/respondents;

Andrew Reddon, Steven Mason, David Tait and Sanjaya Mendis, for the respondents/appellants.

Solicitors of Record:

Goodmans LLP, Toronto, Ontario, for the appellants/respondents;

McCarthy Tétrault LLP, Toronto, Ontario, for the respondents/appellants.

This appeal was heard in Toronto, Ontario, on October 30 and 31, 2013 before Sharlow, Pelletier and Mainville, JJ.A., of the Federal Court of Appeal. The following decision was delivered on March 14, 2014, in Ottawa, Ontario, including the following opinions:

Mainville, J.A., dissenting - see paragraphs 1 to 151;

Sharlow, J.A. (Pelletier, J.A., concurring) - see paragraphs 152 to 194.