Sanofi-Aventis Canada Inc. et al. v. Teva Canada Ltd., (2014) 456 N.R. 241 (FCA)

• Judge: Sharlow, Dawson and Mainville, JJ.A.
• Court: Federal Court of Appeal (Canada)
• Case Date: March 14, 2014
• Jurisdiction: Canada (Federal)
• Citations: (2014), 456 N.R. 241 (FCA);2014 FCA 67

Sanofi-Aventis Can. v. Teva Can. (2014), 456 N.R. 241 (FCA)

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Temp. Cite: [2014] N.R. TBEd. MR.028

Teva Canada Limited (appellant) v. Sanofi-Aventis Canada Inc. and Sanofi-Aventis Deutschland GmbH (respondents)

(A-147-12; 2014 FCA 67; 2014 CAF 67)

Indexed As: Sanofi-Aventis Canada Inc. et al. v. Teva Canada Ltd.

Federal Court of Appeal

Sharlow, Dawson and Mainville, JJ.A.

March 14, 2014.

Summary:

Sanofi-Aventis Canada Inc. owned patent rights to a brand-name version of ramipril (ALTACE), a drug used mainly to treat hypertension. Teva Canada Ltd. wished to market a generic verison of ramipril, but there were delays in obtaining a Notice of Compliance (NOC) from 2003 to 2007 because Sanofi had filed an application for a prohibition order and obtained a statutory stay under the Patented Medicines (Notice of Compliance) Regulations. Teva claimed that Sanofi was liable for the loss it suffered during the period from 2003 to 2007 under s. 8 of the Regulations (i.e., because it was kept off the market for a period of time by the actions of Sanofi that were ultimately found to be unsustainable). Sanofi commenced an action, claiming that s. 8 of the Regulations was invalid. The validity issue was argued separately.

The Federal Court, in a decision reported (2012), 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 Teva was entitled to damages under s. 8, but disputed many elements of Teva's claim.

The Federal Court, in a decision reported 410 F.T.R. 1, dealt with the issues accordingly. The court concluded that the relevant period of delay ran from December 13, 2005 to April 27, 2007, and that Teva was entitled to damages under s. 8 of the Regulations for that delay. For purposes of calculating damages, the court determined the size of the ramipril market (611,122,083 capsules) and the size of the generic market (374,092.845 capsules) during the relevant period (i.e., the hypothetical market). The court determined that Teva would have entered the market simultaneously with an authorized generic and Apotex Inc., with each participant sharing the generic market equally. As a result, Teva's Lost Volumes would have been 147,092,476 capsules. The court also ruled on a number of issues respecting the calculation of Teva's net lost profits. While the court was unable to finalize a quantum of damages, the court expressed the hope that Sanofi and Teva could quickly agree on a final amount to be paid by Sanofi to Teva based on the court's reasons for judgment. Pre-judgment interest was to be calculated from December 13, 2005, at the rate in effect under the Courts of Justice Act as at that date. Teva appealed and Sanofi cross-appealed.

The Federal Court of Appeal, Mainville, J.A., dissenting, dismissed the appeal and cross-appeal.

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 24.

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 - Teva wished to market a generic verison of ramipril, but there were delays in obtaining a Notice of Compliance (NOC), because Sanofi had filed an application for a prohibition order and obtained a statutory stay under the Patented Medicines (NOC) Regulations - Teva claimed that Sanofi was liable for the loss it suffered because of the delay (Regulations, s. 8) - The Federal Court agreed and found that the relevant period for s. 8 purposes ran from December 13, 2005 (the date the patent expired) to April 27, 2007 (when the Federal Court dismissed Sanofi's prohibition proceedings with respect to Teva's second notice of allegation) - Sanofi appealed - The Federal Court of Appeal dismissed the appeal - The court discussed how to determine the relevant period and held that the trial judge was correct in setting the relevant period in this case - See paragraphs 33 to 42, 71 to 85 and 142.

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 - Teva wished to market a generic verison of ramipril, but there were delays in obtaining a Notice of Compliance (NOC), because Sanofi had filed an application for a prohibition order and obtained a statutory stay under the Patented Medicines (NOC) Regulations - Teva claimed that Sanofi was liable for the loss it suffered because of the delay (Regulations, s. 8) - The Federal Court agreed and for purposes of calculating damages determined the attributes of the hypothetical market during the s. 8 liability period, taking into account other generic competition - Teva appealed, arguing that authorized generic drug manufacturers should not be considered in the hypothetical market - The Federal Court of Appeal rejected this argument and dismissed the appeal - The trial judge made no error in concluding that authorized generic drug manufacturers were not excluded from the hypothetical market - See paragraphs 100 to 103 and 142 to 151.

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 - Teva'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) Regulations - Teva claimed against Sanofi for the losses it suffered because of the delay (Regulations, s. 8) - The Federal Court found that the period of delay (relevant period) ran from December 13, 2005 (date of expiry of the patent) to April 27, 2007 - The court then, for purposes of calculating damages, proceeded to assess the size of the hypothetical ramipril market during the relevant period, taking into account generic competition - On appeal, an issue arose as to whether the trial judge erred in determining the date of entry by the generics into the hypothetical market (i.e., December 13, 2005) - The Federal Court of Appeal held that the trial judge did not err in setting the date - The court discussed the proper methodology for determining the date on which the potential competitors of Teva would have entered the hypothetical market - See paragraphs 104 to 112 and 144 to 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 - Teva wished to market a generic verison of ramipril, but there were delays in obtaining a Notice of Compliance (NOC), because Sanofi had filed an application for a prohibition order and obtained a statutory stay under the Patented Medicines (NOC) Regulations - Teva 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 Teva 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 dismissed the appeal - The trial judge made no reviewable error - See paragraphs 66 to 68, 113 to 117 and 142.

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 - Teva wished to market a generic verison of ramipril, but there were delays in obtaining a Notice of Compliance (NOC), because Sanofi had filed an application for a prohibition order and obtained a statutory stay under the Patented Medicines (NOC) Regulations - Teva claimed that Sanofi was liable for the loss it suffered because of the delay (Regulations, s. 8) - The Federal Court found that the relevant period for purposes of s. 8 ran from December 13, 2005 to April 27, 2007, and calculated damages for that period - Teva appealed, alleging errors in quantifying damages respecting lost business value, lost direct profit, lost sales on other products, and active pharmaceutical ingredient pricing - The Federal Court of Appeal dismissed the appeal - The trial judge made no error in her findings with respect to damages - See paragraphs 118 to 154.

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 - Teva wished to market a generic verison of ramipril, but there were delays in obtaining a Notice of Compliance (NOC), because Sanofi had filed an application for a prohibition order and obtained a statutory stay under the Patented Medicines (NOC) Regulations - Teva claimed that Sanofi was liable for the loss it suffered because of the delay (Regulations, s. 8) - The Federal Court agreed and found that the period of delay (relevant period) ran from December 13, 2005 to April 27, 2007 - 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 130 to 138, 152 and 153.

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.

Sanofi-Aventis Canada Inc. et al. v. Apotex Inc. (2009), 350 F.T.R. 165; 77 C.P.R.(4th) 99; 2009 FC 676, affd. (2011), 426 N.R. 196; 97 C.P.R(4th) 415; 2011 FCA 300, leave to appeal dismissed [2011] 3 S.C.R. xi, refd to. [para. 29].

Apotex Inc. v. Merck & Co. et al. (2011), 425 N.R. 279; 2011 FCA 329, refd to. [para. 39].

Aventis Pharma Inc. et al. v. Apotex Inc. et al. (2005), 281 F.T.R. 233; 44 C.P.R.(4th) 90; 2005 FC 1381, refd to. [para. 40].

Aventis Pharma Inc. et al. v. Apotex Inc. et al. (2005), 283 F.T.R. 171; 2005 FC 1504, refd to. [para. 52].

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. 71].

Ratych v. Bloomer, [1990] 1 S.C.R. 940; 107 N.R. 335; 39 O.A.C. 103, refd to. [para. 88].

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. 95].

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. 116].

Mason (V.K.) Construction Ltd. v. Bank of Nova Scotia and Courtot Investments Ltd., [1985] 1 S.C.R. 271; 58 N.R. 195; 8 O.A.C. 381, refd to. [para. 123].

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. 132].

Apotex Inc. v. Takeda Canada Inc. (2013), 444 F.T.R. 120; 2013 FC 1237, refd to. [para. 132].

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:

Jonathan Stainsby, Lesley Caswell, Ben Wallwork and Mark Davis, for the appellant;

Steven Mason, Andrew Reddon and Sanjaya Mendis, for the respondents.

Solicitors of Record:

Heenan Blaikie LLP, Toronto, Ontario, for the appellant;

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

This appeal was heard in Toronto, Ontario, on October 16 and 17, 2013, before Sharlow, Dawson and Mainville, JJ.A., of the Federal Court of Appeal. The following decision was delivered in Ottawa, Ontario, on March 14, 2014, including the following opinions:

Mainville, J.A., dissenting - see paragraphs 1 to 141;

Sharlow, J.A. (Dawson, J.A., concurring) - see paragraphs 142 to 154.