Merck & Co. et al. v. Apotex Inc. et al., (2013) 437 F.T.R. 1 (FC)

• Judge: Snider, J.
• Court: Federal Court (Canada)
• Case Date: July 16, 2013
• Jurisdiction: Canada (Federal)
• Citations: (2013), 437 F.T.R. 1 (FC);2013 FC 751

Merck & Co. v. Apotex Inc. (2013), 437 F.T.R. 1 (FC)

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: [2013] F.T.R. TBEd. JL.018

Merck & Co., Inc. and Merck Canada Inc. (plaintiffs/defendants by counterclaim) v. Apotex Inc. and Apotex Fermentation Inc. (defendants/plaintiffs by counterclaim)

(T-1272-97; 2013 FC 751; 2013 CF 751)

Indexed As: Merck & Co. et al. v. Apotex Inc. et al.

Federal Court

Snider, J.

July 16, 2013.

Summary:

In an action commenced in 1997, the plaintiffs ("Merck") sought a declaration that Canadian Patent No. 1,161,380 ('380 Patent) was valid and infringed by the defendants ("Apotex"). The '380 Patent was a product-by-process patent for the anti-cholesterol drug, lovastatin, sold under the trade name MEVACOR. The action was bifurcated, i.e., the appropriate damages or accounting of profits would only be determined after the liability phase.

The Federal Court, in a decision reported at (2010), 381 F.T.R. 162 (liability reasons) found that the '380 Patent was valid and had been infringed by the defendants, and that the plaintiffs were entitled to their damages rather than to an accounting of profits. The defendants appealed.

The Federal Court of Appeal, in a decision reported at (2011), 430 N.R. 66, dismissed the appeal. The damages phase began on April 8, 2013 and concluded on May 3, 2013. The total damages claimed by Merck were $156,320,737, plus interest. Apotex argued that Merck's total damages should be $9,554,288, plus interest.

The Federal Court concluded that the plaintiffs were entitled to a total damages award of $119,054,327, plus pre-judgment and post-judgment interest. In addition, the court made the following determinations: (a) Merck should not be awarded its lost profits (if any) or a reasonable royalty in respect of Post-Expiry Ramp-up Sales; (b) Merck was not entitled to "lost royalties" that would have been earned by Merck and Co., Inc. on additional sales of MEVACOR tablets; (c) Apotex's argument that its non-infringing alternative should be taken into account in assessing damages was rejected; and (d) pre-judgment interest should be calculated at a rate equal to the 1997 Bank Rate plus 1%, and post-judgment interest at a rate of 5%.

Food and Drug Control - Topic 1108.2

Drugs - New drugs - Notice of compliance - Prohibition order (incl. compensation by first person) - [See seventh Patents of Invention - Topic 3826 ].

Income Tax - Topic 12

General - Damages and settlements (surrogatum principle) - [See eleventh Patents of Invention - Topic 3826 ].

Patents of Invention - Topic 3102

Infringement of patent - Remedies - Damages or accounting of profits - The Federal Court stated that "an award of damages differs fundamentally from an accounting of profits. Damages are a statutory right embedded in the Patent Act. A wronged patentee is entitled to damages as a matter of right. The key difference between the two remedies is the focus or starting point of the assessment. A claim for damages focuses on the plaintiff's loss. ... On the other hand, an accounting of profits looks at the benefit or advantage that a defendant derived from the use of the invention. ... An accounting of profits is an equitable remedy only available upon election by a plaintiff and with the discretion of the Court. ... An accounting of profits originated in equity, although the Patent Act now refers to this remedy. .... The fact that the remedy is referred to in the Patent Act [s. 57(1)(b)] does not, as suggested by [the defendants], change the remedy into a statutory remedy. It is an equitable remedy and remains so." - See paragraphs 45 to 48.

Patents of Invention - Topic 3826

Infringement actions - Damages - Profits - General - The Federal Court set out the "more significant" of the guiding principles which applied where an assessment of damages under s. 55(1) of the Patent Act was to be made - "1. An award of damages seeks to compensate the plaintiff for any losses suffered by the plaintiff as a result of the infringement; 2. The profits made by the defendant are irrelevant; 3. Every sale of an infringing product is an illegal transaction for which the plaintiff is entitled to recover damages; 4. In assessing the award, the plaintiff is entitled to the profits on the sales it would have made but for the presence of the infringing product in the market; 5. For those sales made by the defendant that the plaintiff patentee would not have made or cannot persuade the Court it would have made but for the presence of the infringing product, the plaintiff is entitled to a reasonable royalty; and 6. The plaintiff bears the burden of proving: (a) the sales that it would have made but for the presence of the infringing product; and (b) what a reasonable royalty would be." - See paragraph 41.

Patents of Invention - Topic 3826

Infringement actions - Damages - Profits - General - The trial judge found that the plaintiffs' (Merck) patent for the anti-cholesterol drug, lovastatin, sold under the trade name MEVACOR, had been infringed by the defendants (Apotex), and that Merck was entitled to damages - Merck claimed that the infringement led to lost profits that it would have earned from the sale of MEVACOR tablets in the amount of $73,303,319 - That amount consisted of $62,925,126 for the lost profits that Merck would have earned if it had replaced every infringing tablet sold domestically prior to January 31, 2001 (the Pre-Expiry Replacement Tablets) - Merck submitted that "but for" the infringement, it would have sold all of the Pre-Expiry Replacement Tablets and was entitled to lost profits in respect of every tablet - Apotex drew analogies to jurisprudence in tort and breach of confidence, and argued that Merck could not prove that it would have made those sales because Apotex had available to it a non-infringing alternative (the NIA defence) - The Federal Court rejected Apotex's arguments and concluded that Merck's lost profits were caused by Apotex's infringement - Merck would have sold every one of the Pre-Expiry Replacement Tablets if Apotex had not infringed the '380 Patent, "based on a common sense view of causation, the current state of Canadian law and a rejection of Apotex's NIA defence" - Principles of causation could not support the relevance of a NIA defence to an award of damages - Apotex inaccurately conflated causation, which had to be proven first, and the subsequent quantification of the remedy - See paragraphs 49 to 56.

Patents of Invention - Topic 3826

Infringement actions - Damages - Profits - General - The Federal Court considered the defence of a non-infringing alternative (NIA) to an award of damages - "[T]he current state of Canadian law is that the existence of a non-infringing alternative is not relevant to an assessment of damages." - The court began with a review of the law of the United Kingdom, where the statutory provision for damages was similar to that of Canada - "[T]he law of the United Kingdom is clear and unequivocal; the non-infringing alternative defence is wrong at law. ... Canadian law reflects the jurisprudence of the United Kingdom and results in a rejection of the NIA defence. In other words, under current Canadian law of damages, the fact that [the defendants] had available to it (but did not use) a non-infringing alternative is irrelevant to a calculation of damages." - See paragraphs 57 to 75.

Patents of Invention - Topic 3826

Infringement actions - Damages - Profits - General - The trial judge found that the plaintiffs' patent had been infringed by the defendants and that the plaintiffs were entitled to damages - The defendants argued that the case of Monsanto Canada Inc. et al. v. Schmeiser et al. (2004) (S.C.C.) effectively and completely changed the law of damages and provided authority for its position that its non-infringing alternative (NIA) should be taken into account in assessing damages under s. 55(1) of the Patent Act - The Federal Court disagreed - "Monsanto/Schmeiser did not change the law. Instead, it merely affirmed an approach to the calculation of an infringer's profits that already existed in Canadian law. Even if I were to conclude that the Supreme Court has changed the law, it has done so only with respect to an accounting of profits and not for a claim in damages." - See paragraphs 77 to 90.

Patents of Invention - Topic 3826

Infringement actions - Damages - Profits - General - The trial judge found that the plaintiffs' (Merck) patent for the anti-cholesterol drug, lovastatin, had been infringed by the defendants (Apotex), and that Merck was entitled to damages - Apotex raised the defence that they had a non-infringing alternative (NIA); i.e., that it could have used the AFI-4 process, and argued that its NIA should be taken into account in assessing damages under s. 55(1) of the Patent Act - Apotex presented jurisprudence from the U.S. courts on the issue - The Federal Court accepted that a NIA defence existed in the U.S. - The statutory provisions of the U.S. with respect to damages were very different from that of Canada and the United Kingdom - Further, since 1946, the remedy of an accounting of a defendant's profits had been unavailable to American plaintiffs - "[T]he point remains that law of the United States is different and has certainly evolved differently than that of the United Kingdom and, as a result, Canada. In brief, I accept that the law of damages in the United States requires that, prior to claiming an award of lost profits, a wronged patentee must demonstrate that there is no acceptable non-infringing substitute. If this case were before a court in the United States, Merck would be required to address whether the AFI-4 process is an 'acceptable non-infringing substitute'. However, as the law stands in Canada, Merck bears no such burden." - See paragraphs 91 to 97.

Patents of Invention - Topic 3826

Infringement actions - Damages - Profits - General - The trial judge found that the plaintiffs' (Merck) patent for the anti-cholesterol drug, lovastatin, had been infringed by the defendants (Apotex) - In calculating Merck's damages, Apotex raised the defence that they had a non-infringing alternative (NIA), and argued that its NIA should be taken into account in assessing damages under s. 55(1) of the Patent Act - Apotex placed great emphasis on two journal articles by a university professor that reflected a point of view that was different from the existing Canadian law of damages in patent infringement cases - In the professor's view, the existence of a non-infringing alternative should be a relevant factor in the analysis of an award of damages - The Federal Court stated that "[a]n academic's opinions on the law or its interpretation may, in appropriate circumstances, assist a court. However, these opinions are not jurisprudential. ... Academic writing can be useful to a judge faced with a difficult and new issue, but it is not precedential. The opinion of a university professor - no matter how well-articulated - is merely an expression of a point of view that may be right or may be wrong." - See paragraphs 98 to 106.

Patents of Invention - Topic 3826

Infringement actions - Damages - Profits - General - The defendant argued that its non-infringing alternative should be taken into account in assessing damages under s. 55(1) of the Patent Act - As support for its position, the defendant referred to a case, Sanofi-Aventis Canada Inc. et al. v. Teva Canada Ltd. (2012) (F.C.) (Teva Ramipril), that involved a claim for damages under s. 8 of the Patented Medicines (Notice of Compliance) Regulations (PM (NOC) Regulations) - The Federal Court stated that "the fact that, in Teva Ramipril ... I considered the hypothetical authorized generic to calculate the s. 8 damages award is of no great moment" to this case - "The components of the PM (NOC) Regulations operate in the context of a specialized and comprehensive scheme. ... It is important to understand and apply s. 8 within the entire scheme of the PM (NOC) Regulations. ... [T]he provisions of the PM (NOC) Regulations complement and counterbalance one another in the achievement of the overall equilibrium of the regulatory scheme envisioned by Parliament. ... The mere use of the word 'damages', in s. 8 of the PM (NOC) Regulations, does not make an award of damages under s. 8 equivalent in all aspects to an award of damages under s. 55 of the Patent Act." - See paragraphs 107 to 112.

Patents of Invention - Topic 3826

Infringement actions - Damages - Profits - General - The trial judge found that the plaintiffs' (Merck) patent for the anti-cholesterol drug, lovastatin, had been infringed by the defendants (Apotex) - In calculating Merck's damages, Apotex raised the defence that they had a non-infringing alternative (NIA); i.e., that it could have used the AFI-4 process - Apotex's unauthorized use of the infringing AFI-1 process caused Merck's loss of over $62 million in profits - The Federal Court set out "compelling policy reasons" why Apotex's arguments in favour of the NIA defence should not be considered - "The argument advanced in this case would result in an inadequate compensation for injured plaintiffs and the infringer escaping responsibility for its infringement. ... It is important to remember that a plaintiff, in claiming damages, is not permitted to claim any and all of its lost profits. A careful examination of those profits is required. ... [I]t is not punitive to compensate Merck for lost profits where the Defendants could have (but did not) use the non-infringing alternative. ... Further, I have already taken the non-infringing alternative into account [in the liability phase of the trial] ... . The loss to Merck was clearly found to have been caused by and will be measured against the infringing quantities only." - See paragraphs 113 to 120.

Patents of Invention - Topic 3826

Infringement actions - Damages - Profits - General - The plaintiffs (Merck) claimed that the defendants' (Apotex) infringement led to lost profits that Merck would have earned from the sale of lovastatin tablets (anti-cholesterol drug) in the amount of $73,303,319 - That amount consisted of $62,925,126 for the lost profits that Merck would have earned if it had replaced every infringing tablet sold domestically prior to January 31, 2001, the patent expiry date - A point of disagreement was whether the availability of Apotex's AFI-4 process (a non-infringing alternative or NIA) resulted in a finding that Merck was only entitled to a reasonable royalty on the lost sales rather than its lost profits - The Federal Court held that Merck was entitled to an award of $62,925,126 as its lost profits - The court rejected Apotex's argument that the NIA was a relevant factor or defence in the assessment of damages under s. 55 of the Patent Act - "Briefly stated, Canadian law does not recognize the NIA defence and Monsanto/Schmeiser did not change that law." - See paragraph 121.

Patents of Invention - Topic 3826

Infringement actions - Damages - Profits - General - Merck Canada claimed that the infringement by the defendants led to lost profits that Merck would have earned in the amount of $73,303,319 - That amount included the amount of $10,378,193 to reflect the royalty payable to Merck & Co. Inc. (MACI) pursuant to the terms of a royalty agreement - Merck Canada was obligated to pay MACI an 8.5% royalty with respect to net receipts of sales prior to the expiry of the subject patent - Merck argued that the royalty should not be deducted from its award of pre-patent expiry lost profits - The Federal Court disagreed - The royalty agreement was clear and unambiguous, creating no obligation to pay upon receipt of lump sum damages - Since there was no obligation to pay any royalty on an award of legal damages, the royalty was properly characterized as an expense that would have been incurred in the hypothetical scenario but saved because of the infringement - As such, it should be deducted in the calculation of Merck Canada's lost profits - See paragraphs 122 to 138.

Patents of Invention - Topic 3826

Infringement actions - Damages - Profits - General - In regard to the quantum of damages to be paid by the defendants, the plaintiff Merck Canada asserted that, because Merck Canada would be required to pay 8.5% of its damages award to Merck & Co. Inc. (MACI), pursuant to the terms of a royalty agreement, the amount was not a proper expense deduction - Merck asserted that the surrogatum principle was relevant to the present circumstances - The Federal Court disagreed - "If I understand the principle correctly, the surrogatum principle dictates that, for tax purposes, MACI's income tax on its damages award would be assessed as though those amounts were the lost profits, or net receipts of sales, that the awarded is intended to replace. Although this principle may provide useful insight with respect to the tax treatment of patent infringement damages ... neither party has cited any case law that applies this principle to trigger or create obligations where none otherwise exist. The surrogatum principle has been entirely restricted to cases in which a person's taxable income is at issue. The manner in which revenues are treated for tax purposes does not create an obligation to pay such revenues in the first place." - In the result, there was no obligation for Merck Canada to pay the royalty on any award of lost profits; i.e., the royalty was an expense saved, and was deducted from the award of pre-patent expiry lost profits - See paragraphs 139 to 141.

Patents of Invention - Topic 3826

Infringement actions - Damages - Profits - General - Merck US (referred to as Merck & Co. in the liability reasons) was the named patentee in the '380 Patent - The issue of Merck US's entitlement to damages arose because of a chain of inter-corporate agreements - Apotex argued that the effect of the MACI Licence Agreement was to confer the right to recover damages to MACI - The Federal Court disagreed - With the fundamental patent right to exclude others from the exploitation of an invention, came the right of the patentee to claim any damages that it sustained by reason of the infringement - That right was not necessarily affected by a licence - "[A]n exclusive licence establishes a contractual relationship between the licensor and the licensee, which relationship must be interpreted in accordance with the terms of the agreement. The agreement should not be interpreted to give away more than was agreed by the parties. With respect to the MACI Licence Agreement, did Merck US give away its right to exclude others from the exploitation of the '380 Patent? I do not believe that it did." - See paragraphs 233 to 246.

Patents of Invention - Topic 3834

Infringement of patent - Damages - Interest - Prejudgment - Merck was entitled to pre-judgment interest on its award of damages - The parties disagreed on the rate of interest for that calculation - Since the infringement occurred in more than one province, s. 36(2) of the Federal Courts Act was applicable and provided that the award of interest be "at any rate that the Federal Court of Appeal or the Federal Court considers reasonable in the circumstances" - Further discretion, as to the appropriate rate, was found in s. 36(5) - Pursuant to s. 36(4), interest was not to be compounded - Apotex submitted that pre-judgment interest ought to be calculated using the 1997 Bank Rate, approximately 3.3% - The Federal Court concluded that the pre-judgment interest rate should be set at a rate equal to the 1997 Bank Rate plus 1%, not compounded - Apotex had deprived Merck of the use of a substantial amount of money due to its infringement of the subject patent - The 1997 Bank Rate would not reflect "commercial reality" for either Merck or Apotex - Far more relevant was Merck's cost of borrowing during the relevant period - One factor identified in s. 36(5) was the "conduct of the parties" - Consideration of Merck's actions would tend to reduce the rate of pre-judgment interest - See paragraphs 253 to 270.

Patents of Invention - Topic 8186

Practice - Costs - Entitlement - Merck was awarded its costs in the liability phase of this infringement action and was entitled to its costs in this damages phase - The parties proposed different approaches - The Federal Court exercised its discretion in the following manner - The court accepted Merck's proposal that the costs be assessed at the upper end of Column IV of Tariff B for the period preceding the execution of the Streamlining Agreement (resolved a number of matters on the eve of trial) and mid-Column III thereafter - Merck was the successful party and was entitled to its costs with respect to all of the issues at trial - Although Merck did not succeed with respect to two issues, those issues were not of sufficient importance to the overall judgment that a reduction in costs was warranted - However, an award for two senior and two junior counsel was excessive; costs were permitted for one senior and two junior counsel at trial - The court permitted Merck to recover reasonable fees associated with only the one expert who actually appeared at trial - Without hearing the evidence of the non-appearing experts and reading their reports, the court could not conclude that those experts assisted the court in any way - See paragraphs 272 to 286.

Statutes - Topic 1705

Interpretation - Extrinsic aids - Books and comments - Academic papers - [See sixth Patents of Invention - Topic 3826 ].

Cases Noticed:

Monsanto Canada Inc. et al. v. Schmeiser et al., [2004] 1 S.C.R. 902; 320 N.R. 201; 2004 SCC 34, refd to. [para. 31].

Hoffmann-La Roche Ltd. et al. v. Canada (Minister of National Health and Welfare) et al. (1996), 205 N.R. 331; 70 C.P.R.(3d) 206 (F.C.A.), refd to. [para. 38].

JAY-LOR International Inc. et al. v. Penta Farm Systems Ltd. et al. (2007), 313 F.T.R. 1; 59 C.P.R.(4th) 228; 2007 FC 358, appld. [para. 41].

Mowry v. Whitney (1871), 20 L.Ed. 860; 81 U.S. 620 (S.C.), refd to. [para. 46].

Laboratoires Servier et al. v. Apotex Inc. et al. (2008), 332 F.T.R. 193; 67 C.P.R.(4th) 241; 2008 FC 825, affd. (2009), 392 N.R. 96; 75 C.P.R.(4th) 443; 2009 FCA 222, refd to. [para. 47].

Canson Enterprises Ltd. v. Boughton & Co., [1991] 3 S.C.R. 534; 131 N.R. 321; 6 B.C.A.C. 1; 13 W.A.C. 1, 85 D.L.R.(4th) 129, refd to. [para. 49].

Athey v. Leonati et al., [1996] 3 S.C.R. 458; 203 N.R. 36; 81 B.C.A.C. 243; 132 W.A.C. 243; 140 D.L.R.(4th) 235, refd to. [para. 49].

Clements v. Clements, [2012] 2 S.C.R. 181; 431 N.R. 198; 2012 SCC 32, refd to. [para. 54].

Cadbury Schweppes Inc. et al. v. FBI Foods Ltd. et al., [1999] 1 S.C.R. 142; 235 N.R. 30; 117 B.C.A.C. 161; 91 W.A.C. 161; 167 D.L.R.(4th) 577, refd to. [para. 55].

The United Horse Shoe and Nail Co. v. Stewart and Co. (1888), 5 R.P.C. 260; 13 App. Cas. 401 (H.L.), refd to. [para. 57].

Catnic Components Ltd. v. Hill & Smith Ltd., [1983] F.S.R. 512 (Pat. Ct.), refd to. [para. 63].

Gerber Garment Technology Inc. v. Lectra Systems Ltd., [1995] R.P.C. 383 (Pat. Ct.), refd to. [para. 64].

Ultraframe (U.K.) Ltd. v. Eurocell Building Plastics Ltd., [2006] E.W.H.C. 1344 (Pat. Ct.), refd to. [para. 65].

Coflexip SA v. Stolt Offshore MS Ltd., [2003] E.W.C.A. Civ. 296, refd to. [para. 67].

Panduit Corp. v. Stahlin Bros. Fibre Works Inc. (1978), 575 F2d. 1152 (6th Cir.), refd to. [para. 67].

Domco Industries Ltd. v. Armstrong Cork Canada Co. and Congoleum Co. et al. (1983), 76 C.P.R.(2d) 70 (F.C.T.D.), varied (1986), 3 F.T.R. 289; 10 C.P.R.(3d) 53 (T.D.), refd to. [para. 71].

Monsanto Canada Inc. et al. v. Schmeiser et al. (2001), 202 F.T.R. 78; 2001 FCT 256, refd to. [para. 78].

Monsanto Canada Inc. et al. v. Schmeiser et al., [2003] 2 F.C. 165; 293 N.R. 340; 2002 FCA 309, refd to. [para. 78].

Collette v. Lasnier (1886), 13 S.C.R. 563, refd to. [para. 84].

Colonial Fastener Co. v. Lightning Fastener Co., [1937] S.C.R. 36; [1937] 1 D.L.R. 21, refd to. [para. 84].

Monsanto Canada Inc. et al. v. Rivett et al., [2012] 1 F.C.R. 473; 408 N.R. 143; 2010 FCA 207, refd to. [para. 88].

Sanofi-Aventis Canada Inc. et al. v. Teva Canada Ltd. (2012), 410 F.T.R. 1; 2012 FC 552, refd to. [para. 107].

Apotex Inc. et al. v. Canada (Minister of National Health and Welfare) et al. (1999), 252 N.R. 72; 3 C.P.R.(4th) 1; 181 D.L.R.(4th) 404 (F.C.A.), refd to. [para. 109].

Apotex Inc. v. Sanofi-Aventis et al. (2012), 410 F.T.R. 78; 2012 FC 553, refd to. [para. 111].

Apex Corp. et al. v. Ceco Developments Ltd. (2008), 429 A.R. 110; 421 W.A.C. 110; 88 Alta. L.R.(4th) 26; 2008 ABCA 125, refd to. [para. 124].

General Store Publishing House Inc. v. B.D. Waite Co., 1988 CarswellOnt 3131 (H.C.J.), dist. [para. 124].

Minister of National Revenue v. General Motors of Canada Ltd. (2008), 379 N.R. 60; 292 D.L.R.(4th) 331; 2008 FCA 142, refd to. [para. 133].

Eli Lilly & Co. et al. v. Novopharm Ltd. et al., [1998] 2 S.C.R. 129; 227 N.R. 201; 161 D.L.R.(4th) 1, refd to. [para. 134].

Leslee Sports Importing (Brockville) Ltd. v. Reebok Canada Inc., [1991] O.J. No. 1536 (Gen. Div.), refd to. [para. 138].

Transocean Offshore Ltd. v. Minister of National Revenue (2005), 332 N.R. 21; 2005 FCA 104, refd to. [para. 140].

Bourgault Industry v. Canada (2006), 55 C.P.R.(4th) 369; 2006 TCC 449, refd to. [para. 140].

Allied Signal Inc. v. DuPont Canada Inc. and Complax Corp. (1998), 142 F.T.R. 241; 78 C.P.R.(3d) 129 (T.D.), affd. (1999), 235 N.R. 185; 86 C.P.R.(3d) 324 (F.C.A.), refd to. [para. 149].

Grain Processing Corp. v. Am Maize-Prods Co. (1999), 185 F.3d 134 (Fed. Cir.), refd to [para. 160].

Yacyshyn v. Minister of National Revenue (1999), 236 N.R. 367; 99 D.T.C. 5133 (F.C.A.), refd to. [para. 209].

Apotex Inc. v. Bristol-Myers Squibb Co. et al. (2011), 414 N.R. 162; 91 C.P.R.(4th) 307; 2011 FCA 34, refd to. [para. 210].

Forget v. Specialty Tools of Canada Inc., [1996] 1 W.W.R. 12; 62 C.P.R.(3d) 537 (B.C.C.A.), refd to. [para. 239].

Domco Industries Ltd. v. Armstrong Cork Canada Ltd. et al. and Congoleum-Nairn Inc. et al., [1982] 1 S.C.R. 907; 42 N.R. 254; 136 D.L.R.(3d) 595, refd to. [para. 240].

Electric Chain Co. of Canada Ltd. v. Art Metal Works Inc., [1933] S.C.R. 581; [1933] 4 D.L.R. 240, refd to. [para. 241].

Janssen-Ortho Inc. et al. v. Novopharm Ltd. (2006), 301 F.T.R. 166; 57 C.P.R.(4th) 6; 2006 FC 1234, refd to. [para. 258].

Merck & Co. et al. v. Apotex Inc. (2006), 282 F.T.R. 161; 53 C.P.R.(4th) 1; 2006 FC 524, affd. [2007] 3 F.C.R. 588; 354 N.R. 51; 55 C.P.R.(4th) 1; 2006 FCA 323, refd to. [para. 258].

Apotex Inc. and Novopharm Ltd. v. Wellcome Foundation Ltd. (2000), 262 N.R. 137; 10 C.P.R.(4th) 65 (F.C.A.), refd to. [para. 260].

Hertzog v. Highwire Information Inc., [1997] F.C.J. No. 968 (F.C.), refd to. [para. 263].

Universal Sales Ltd. et al. v. Edinburgh Assurance Co. et al. (2012), 420 F.T.R. 29; 2012 FC 1192, refd to. [para. 263].

Statutes Noticed:

Patent Act, R.S.C. 1985, c. P-4, sect. 55(1) [para. 26].

Patent Act Regulations (Can.), Patented Medicines (Notice of Compliance) Regulations, SOR/98-166, sect. 8 [paras. 107 et seq.].

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

Authors and Works Noticed:

Fox, Harold G., The Canadian Law and Practice Relating to Letters Patent for Inventions (4th Ed. 1969), p. 504 [para. 87].

Pincus, Laura B., The Computation of Damages in Patent Infringement Actions (1991), 5 Harv. J. L. & Tech. 95, p. 97 [para. 96].

Siebrasse, Norman, A Remedial Benefit-Based Approach to the Innocent-User Problem in the Patenting of Higher Life Forms (2004), 20 C.I.P.R. 79, generally [para. 84].

Siebrasse, Norman, Damages Calculations in Intellectual Property Cases in Canada (2008), 24 C.I.P.R. 153, generally [para. 98]; p. 161 [para. 103].

Counsel:

Andrew J. Reddon, Steven G. Mason, David Tait, and Natacha Engel, for the plaintiffs;

Harry B. Radomski, John Keefe, Andrew Brodkin, David Scrimger, Mark Dunn, and Jordan D. Scopa, for the defendant, Apotex Inc.;

John A. Myers and Patrick Riley, for the defendant, Apotex Fermentation Inc.

Solicitors of Record:

McCarthy Tetrault LLP, Toronto, Ontario, for the plaintiffs;

Goodmans LLP, Toronto, Ontario, for the defendant, Apotex Inc.;

Taylor McCaffrey LLP, Winnipeg, Manitoba, for the defendant, Apotex Fermentation Inc.

The damages phase of this matter was heard at Toronto, Ontario, on April 8 to 11, 15 and 16, and May 1 to 3, 2013, before Snider, J., of the Federal Court, who delivered the following public reasons for judgment and judgment, dated July 16, 2013.