IP Alert: Recent Federal Court of Appeal Decision on The Scope of Damage Claims under Section 8 of the Patented Medicines (Notice of Compliance) Regulations

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In a decision released May 2, 2011, the Federal Court of Appeal has demonstrated that it is not of a single mind with respect to the scope of the damages recoverable under section 8 of the Patented Medicines (Notice of Compliance) Regulations (the “Regulations”) (Teva Canada Limited v. Sanofi-Aventis Canada Inc. et al, 2011 FCA 149). The Regulations provide that a “second person” (a generic manufacturer) who successfully resists an application brought thereunder is entitled to recover damages for “any loss suffered” during the period which commences on the date “on which a Notice of Compliance would have been issued in the absence of [these] Regulations” and ending on “the date of the withdrawal, the discontinuance, the dismissal or the reversal [of the application]” (the so-called “statutory period”).

In Apotex Inc. v. Merck & Co. (2009 FCA 187 (“Merck”)) the Federal Court of Appeal (Noel, Layden-Stevenson and Ryer JJA) interpreted this provision narrowly, restricting potential recovery to losses realized within the “statutory period.” It did so by contrasting the word “suffered” with the word “caused”, concluding that the two have different meanings. In doing so, the Federal Court of Appeal granted an appeal from the prior decision of Justice Hughes, who had allowed recovery for losses caused by the imposition of the automatic statutory stay, but realized (and therefore “quantified”) only after the “statutory period” (Apotex Inc. v. Merck & Co, 2008 FC 1185). Justice Hughes analogized these losses to damages caused by tortious conduct which are manifested, and therefore quantified, after the date of the tortious conduct.

The Federal Court of Appeal’s recent decision considers the issue, first reviewed in Merck, in the context of Teva Canada’s appeal from prior decisions striking out portions of its statement of claim for section 8 damages that it “suffered” as a result of two applications commenced by Sanofi-Aventis Canada and others (“Sanofi”) relating to the drug ramipril. Each of these applications was dismissed as an abuse of process, enabling Teva Canada to enter the Canadian ramipril market. Sanofi then sued for patent infringement; Teva Canada’s counterclaim for a declaration of patent invalidity was allowed and Teva Canada proceeded to pursue recovery of its section 8 damages. This recent decision arises from Sanofi having succeeded in having portions of Teva Canada’s statement of claim struck – those relating to losses allegedly outside the “statutory period.”

Please see full alert below for more information.

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Published In: Administrative Agency Updates, Civil Procedure Updates, Civil Remedies Updates, Intellectual Property Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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