Aventis Pharma S.A. v. Novopharm Ltd.

Aventis Pharma S.A. v. Novopharm Ltd.
Court (s) Database
Federal Court Decisions
Date
2005-06-07
Neutral citation
2005 FC 815
File numbers
T-454-05
Decision Content
Date: 20050607
Docket: T-454-05
Citation: 2005 FC 815
Ottawa, Ontario, this 7th day of June, 2005
Present: The Honourable Justice James Russell
BETWEEN:
AVENTIS PHARMA S.A. and
AVENTIS PHARMA INC.
Plaintiffs
and
NOVOPHARM LIMITED
Defendant
REASONS FOR ORDER AND ORDER
A. INTRODUCTION
[1] The patent infringement action that underlies this motion pertains to the Plaintiffs' Canadian Patent No. 2,045,433 ("433 patent") for an invention entitled "Low Molecular Weight Polysaccharide Mixes: Process for Their Preparation and Use." The invention disclosed and claimed in the '433 patent pertains generally to novel compositions that are used as anticoagulants in the treatment of serious and life-threatening conditions, including blood clots.
[2] The Plaintiffs have been selling in Canada since 1993 a product of the patent under the brand name LOVENOX (enoxaparin sodium), which is a low molecular weight haparin ("LMWH").
[3] On February 28, 2005, Novopharm obtained a Notice of Compliance ("NOC") for a generic version of LOVENOX ("Novo-enoxaparin"). Novopharm announced in March of 2005 that it intends to commence selling Novo-enoxaparin in Canada in June/July of 2005. The Plaintiffs have alleged that Novo-enoxaparin will infringe product, process and use claims in the '433 patent. However, Novopharm says that all of the claims of the '433 patent are, and always have been, invalid.
B. THE PRESENT MOTION
[4] The present motion is for, inter alia, an interlocutory or interim injunction to restrain Novopharm from making, constructing, importing, exporting, using, offering to sell or selling to others to be used, Novo-enoxaparin pending trial.
[5] The Plaintiffs submit that an injunction should be granted in view of the following:
a) Novopharm has admitted that Novo-enoxaparin comes within claims 1 and 2 of the '433 patent;
b) On the motion, Novopharm has not adduced any material evidence in support of its invalidity counterclaim;
c) LOVENOX has been available in Canada since 1993. Novo-enoxaparin is not yet on the Canadian market, and Novopharm will not suffer any irreparable harm in having its entry delayed pending trial;
d) The Plaintiffs will be irreparably harmed upon the introduction of generic Novo-enoxaparin. The Plaintiffs will suffer, inter alia, a significant and irreparable loss of reputation, loss of market share, loss of market opportunities, and permanent reduction in price with respect to LOVENOX;
e) The Plaintiffs' process used in manufacturing LOVENOX is not publicly available and is unknown to Novopharm. Novopharm in its Statement of Defence alleges that its process does not infringe the asserted process claims. Moreover, Novopharm has not put forward any direct evidence of its process. It must therefore be inferred that Novo-enoxaparin will not be produced by the same or equivalent process as that used to manufacture LOVENOX.
It is recognized that LMWH products that are not made by the same or equivalent process will not have the same pharmacological, safety or efficacy profile. As such, there are recognized serious health and safety issues pertaining to generic LMWH products that are not manufactured by the same or equivalent process as the brand name pharmaceutical. Novo-enoxaparin is the first and only generic LMWH product to be approved for Canada. No generic LMWH product of any kind is presently available in the United States.
[6] In a parallel proceeding in this Court, the Plaintiffs are seeking judicial review of Health Canada's decision to grant the NOC to Novopharm on grounds that include health and safety concerns.
C. THE PLAINTIFFS' RIGHTS
[7] The Plaintiff Aventis Pharma S.A. is the owner of the '433 patent. The '433 patent was granted on July 30, 2002 and expires on June 25, 2011.
[8] The invention described and claimed in the '433 patent pertains generally to novel mixtures of low molecular weight polysaccharides, processes for their preparation and their use, including certain LMWH compounds.
D. THE PLAINTIFFS' LOVENOX PRODUCT
[9] The Plaintiff Aventis Pharma Inc. sells in Canada, with the consent of the Plaintiff Aventis Pharma S.A., a LMWH therapeutic composition within the claims of the '433 patent under the trade-mark LOVENOX. The approved common chemical name for the product is enoxaparin sodium. The LMWH products presently available in Canada, including LOVENOX, are administered by way of subcutaneous injection, and are used as anticoagulants in the treatment of a variety of serious and life-threatening conditions.
[10] LOVENOX has been sold in Canada since 1993. LOVENOX was the first LMWH available in Canada and is the only enoxaparin sodium product ever sold in this country. LOVENOX has a good reputation amongst physicians for its reliability, safety and efficacy.
[11] There are three other LMWH products currently competing in Canada with LOVENOX, namely: FRAGMIN (daneparin sodium); FRAXIPARINE (nadroparin calcium); and INNOHEP (tinzaparin sodium). Unfractionated heparin ("UFH") (discussed below) is also used as an injectable anticoagulant.
[12] LOVENOX is currently the market leader in the LMWH market, which is growing in size.
[13] There is currently no generic version of LOVENOX or any of the other LMWH products available in Canada or the United States.
E. UFH AND LMWH PRODUCTS
[14] Unfractionated heparin (UFH) is a naturally occurring, highly complex collection of molecules composed of linear polysaccharide (glycosaminoglycan) chains (sugars) of varying chemical structure. It is typically extracted from porcine intestinal tissue.
[15] Although UFH has been used as an anticoagulant for many years, it has certain drawbacks, including a short half life (requiring continuous intravenous infusion) and an unpredictable anticoagulant response (requiring patients receiving UFH to be closely monitored in a hospital setting).
[16] As a result of these drawbacks, LMWH products were developed which provide a number of advantages over UFH.
[17] LMWH products are produced from UFH through the depolymerization (cleaving) of the long polysaccharide chains of UFH. LMWH products have an average molecular weight that is approximately one-third the average molecular weight of UFH.
[18] The Plaintiffs say that the specific process used to depolymerize UFH will determine the chemical structure of the resultant LMWH product and thus the anticoagulant activity and pharmacological, efficacy and safety profile of that product. They also assert that it is generally accepted that changes in the parameters of the manufacturing process will result in a LMWH product with a different chemical structure, and thus a different pharmacological, safety and efficacy profile.
[19] Each of the manufacturers of the four LMWH products in Canada use a different depolymerization process.
[20] In the Canadian Compendium of Pharmaceutical and Specialties (CPS), which is a reference text widely used by physicians and pharmacists, the abbreviated monographs of the four LMWH products available in Canada each contain a warning that the products are not interchangeable on a unit by unit basis. Although there is some overlap in the indications, the four LMWH products have not been compared head-to-head for the various indications, and they are not all formally approved for all of the same indications. LOVENOX is the LMWH product of choice for the treatment of acute coronary syndrome.
[21] For the indications that overlap, the four LMWH products are administered in different doses. The Plaintiffs say that the LMWH products are not interchangeable dose for dose or unit for unit.
F. THE LOVENOX MANUFACTURING PROCESS
[22] LOVENOX is manufactured from UFH by way of a salification process, an esterification process, and a depolymerization process of 3-climination of uronic benzylic esters by alkaline media. These reactions take place under certain specified and tightly controlled parameters, including temperature, reaction duration and base concentration.
[23] The Plaintiffs say that the parameters of their manufacturing process are highly confidential and not available to the public. They also say that their process results in specific, process-dependant structural modifications to the chemical structure of the enoxaparin sodium product produced. The Plaintiffs claim to have discovered several such modifications, or fingerprints, including the following:
a) Unlike the polysaccharide chains that typically characterize LMWH products (which are comprised essentially of even-numbered chains), the Aventis process produces a product that contains odd-numbered polysaccharide chains;
b) The Aventis process results in the formation of galacturonic acid moieties in the polysaccharide sequences; and
c) The Aventis process results in the formation of a 1,6 anhydro ring (bicyclic) structure at the reducing end of all oligosaccharides bearing 6-O-sulfo groups on the glucosamine moeity.
[24] The Plaintiffs assert that the distinct fingerprints of LOVENOX are a direct result of the process parameters of their manufacturing process. They claim that these structural fingerprints lead directly to the pharmacological, safety and efficacy profile of LOVENOX.
G. THE DEFENDANT'S ACTIVITIES
[25] Novopharm is a manufacturer, importer, distributor, and seller of generic pharmaceuticals in Canada. On March 1, 2005, Novopharm announced to hospitals and pharmacists in Ontario that it had received an NOC from the Minister of Health for its generic Novo-enoxaparin, and that it hoped to launch the product in Canada by June/July of 2005. The NOC was issued on the basis of an abbreviated new drug submissions (ANDS) filed by Novopharm in which Novopharm alleged that the Novo-enoxaparin product is the pharmaceutical equivalent of LOVENOX.
[26] The Plaintiffs say that it is highly unlikely that Novo-enoxaparin will be made using the same or equivalent process as that used to make LOVENOX. As discussed above, the Aventis process parameters are highly confidential and Novopharm has denied that it has infringed the process claims of the '433 patent. Accordingly, the Plaintiffs allege that Novo-enoxaparin will have a different chemical structure and a different pharmacological, safety and efficacy profile from that of LOVENOX.
[27] The Plaintiffs also say that the differences in pharmacological, safety and efficacy profile of Novo-enoxaparin may cause a patient to bleed more, thereby increasing the risk of haemorrhage, or may not prevent thrombosis as well as LOVENOX, thereby leading to a lack of efficacy. In either case, the Plaintiffs take the position that the patient may be at risk of suffering serious side effects, including a stroke or death, if Novo-enoxaparin is used as the pharmaceutical equivalent of LOVENOX.
H. THE NOC PROCESS
[28] The Plaintiffs allege that there are recognized, serious concerns in Canada regarding the use of the ANDS route for obtaining an NOC for generic versions of LMWH products. Dr. Christian Viskov, an expert witness for the Plaintiffs, testified that it is difficult to understand why Health Canada issued an NOC for a generic enoxaparin sodium product given the known concerns about generic LMWH products. In the United States, the Plaintiffs have raised similar concerns with the FDA with respect to the use of an Abbreviated New Drug Application ("ANDA"), which is the equivalent of an ANDS in Canada. To date, no generic LMWH product of any kind has been approved in the US.
I. BIOLOGICS
[29] The Plaintiffs also point out that LMWH products are analogous to biological products, or "biologics", whose manufacture involves purification from biological sources such as human or animal tissue or body fluids (UFH is extracted from porcine intestinal tissue). Biologics are complex mixtures that are not easily identified or characterized. Accordingly, the Plaintiffs allege that it is the policy of Health Canada not to issue NOC's for generic biologics on the basis of an ANDS.
J. THE RELATED JUDICIAL REVIEW APPLICATION
[30] Aventis Pharma Inc. has brought an application for judicial review seeking an Order, inter alia, quashing the decision of the Minister of Health to issue the NOC in respect of Novo-enoxaparin. The application is based, in part, on the allegation that Novo-enoxaparin is not the pharmaceutical equivalent of LOVENOX, as well as health and safety concerns.
K. THE CANADIAN INJECTABLE ANTICOAGULANT MARKETPLACE
[31] The Canadian injectable anticoagulant market is comprised primarily of UFH and the four LMWH products already mentioned. The Plaintiffs are of the view that the market for LMWH products is quite different from the market for typical pharmaceutical products. This is due, in part, to the fact that the large majority of sales of the UFH/LMWH products are to hospitals and not to retail pharmacies.
[32] The Plaintiffs summarize the evidence filed regarding the Canadian injectable anticoagulant market as follows:
(a) In terms of the number of units sold, UFH is the overall market leader;
(b) One-third of the market pertains to the treatment of arterial-based conditions, while two-thirds of the market pertains to venous-based conditions;
(c) Essentially all retail sales are with respect to venous-based conditions. Patients with arterial-based conditions are treated almost exclusively in a hospital setting;
(d) With respect to arterial-based conditions, LOVENOX is the overwhelming leader, having approximately 95% of sales, despite it being more expensive than both FRAGMIN and INNOHEP;
(e) With respect to venous-based conditions, FRAGMIN is the leader with approximately 75% of the market.
[33] The Plaintiffs also stress that the Canadian injectable anticoagulant marketplace is a highly dynamic market. By this they mean that there are numerous variables which will come into play in any attempt to evaluate how the market may react in response to the introduction of Novopharm's Novo-enoxaparin. They say those variables include the following:
(a) The current potential for growth of the LMWH market that may occur by shifting the market away from UPH. The manufacturers of the LMWH products are currently taking steps to shift the market from UPH to LMWH;
(b) The current competition between the LMWH products themselves. Aventis is actively taking steps to increase its share of retail sales through promoting LOVENOX as a preferred alternative to FRAGMIN with respect to venous-based conditions. Aventis currently has four clinical trials underway which are expected to be completed in September 2005 in an effort to increase sales of LOVENOX over FRAGMIN. The result of the studies could cause a significant shift in the current market;
(c) There is linkage between the hospital market and the retail market. A patient with a venous-based condition is first treated with a LMWH product while in the hospital. When the patient is discharged, typically a physician will prescribe the same product on an out-patient basis. As a result, hospital sales often drive the retail market. Gains or losses in the hospital market will often cause resulting gains or losses in the retail market. Consequently, retail availability of a LMWH product can drive hospital sales;
(d) The price of UFH and LMWH products will drop upon the entry into the market of Novopharm's Novo-enoxaparin. By the end of the first year of entry, it is expected that Aventis will have to reduce the price of LOVENOX to hospitals by 35%. It is also expected that the manufacturers of UFH and the other LMWH products will also be required to reduce their prices accordingly;
(e) The response by Novopharm, including further price reductions, product bundling, etc.
L. IMPACT ON THE PLAINTIFFS
[34] The Plaintiffs say that the introduction of Novo-enoxaparin in the Canadian marketplace will immediately cause the Plaintiffs irreparable harm in the following ways:
(i) Permanent loss of market share and opportunity for increasing market share in the LMWH retail market
[35] Novopharm's Novo-enoxaparin, because of its lower price, will quickly capture essentially all of LOVENOX's retail market in Canada. Any reduction in price by Aventis (and the other LMWH manufacturers) will be quickly matched by Novopharm, as Novopharm will ensure that it always has the lowest priced LMWH product available to retail pharmacists.
[36] Not only will Aventis lose all of its present share in the retail market, but Aventis' efforts to increase its share of the retail market from FRAGMIN will be completely undermined. Due to the dynamic nature of the LMWH market and the many variables that materially impact on the relative market share of the LMWH products, it will be impossible to calculate what LOVENOX's share of the retail market would have been if Novo-enoxaparin had never entered the market.
(ii) Permanent loss of market share and opportunity for increasing market share in the LMWH institutional (hospital) market
[37] A hospital is likely to carry only one enoxaparin sodium product at a time, and hospital purchasers are very price sensitive. It is virtually certain that almost all hospitals will quickly shift to purchasing the lower priced generic Novo-enoxaparin product upon its introduction, if the current price of LOVENOX is maintained. This will likely result in the sales of LOVENOX in the institutional market decreasing by over 90% within one year of Novo-enoxaparin's market entry.
[38] In an attempt to preserve some of its hospital market share for LOVENOX, Aventis will need to respond to the market entry of Novo-enoxaparin by substantially reducing the price of LOVENOX charged to hospitals. Overall, by the end of the first year of the Novo-enoxaparin entry, Aventis will likely have reduced the price of LOVENOX by approximately 35%. Nevertheless, Aventis will suffer a significant, permanent loss of market to Novo-enoxaparin.
[39] Moreover, the manufacturers of UFH and the other LMWH products will also need to respond to the introduction of the generic Novo-enoxaparin product by reducing their hospital prices.
[40] As the prices of all the LMWH products, and UFH, are reduced, there will be a redistribution of the market share amongst the competing products. And, once again, due to the dynamic nature of the injectable anticoagulant market, it will be impossible to calculate the precise loss of LOVENOX's market share attributable solely to the entry of Novo-enoxaparin.
(iii) Loss of opportunity for increasing market share from the UFH market
[41] If the Novo-enoxaparin product is introduced, Aventis' efforts to increase LOVENOX's market share at the expense of the existing UFH market will be completely undermined. Again, because of marketplace dynamics, it will not be possible to calculate the loss of this opportunity that is attributable to Novo-enoxaparin.
(iv) Permanent price reduction of LOVENOX
[42] Once the price for LOVENOX is reduced in the ways already mentioned, it will not be possible for Aventis to subsequently raise the price back to the level prior to the entry of Novo-enoxaparin. LOVENOX is a patented medicine and its price is controlled by the Patented Medicines Prices Review Board ("PMPRB"), and the PMPRB typically limits price increases to the consumer price index ("CPI"). Moreover, institutional customers will react adversely to significant price increases to LOVENOX, in view of the new market reality of lower prices for the other LMWH and UFH products created by the entry of Novo-enoxaparin.
(v) Loss of knowledgeable and experienced sales force
[43] Aventis will not continue to promote LOVENOX at anywhere near the current level upon the entry of Novo-enoxaparin. This is because the benefits of any such promotion will primarily accrue to the benefit of Novopharm who will have captured most of the retail and hospital market. As a result, the Aventis sales force will be reduced from seventeen to three or four in 2005, and will be completely eliminated, along with two management positions, by 2006. These sales representatives are highly experienced, knowledgeable, and specially trained. The total time spent training such personnel can take two to three years. The loss of these experienced and knowledgeable sales staff will negatively affect Aventis' ability to market its next generation LMWH product, expected to be available in Canada in 2008. This will materially impede the launch of the new product, and cause a further loss of market opportunity. The extent of such a loss is, again, not possible to calculate.
(vi) Permanent damage to goodwill and reputation in Canada and the U.S. due to the sale of a less effacious generic product
[44] Should the Novo-enoxaparin product be less safe or less effacious than LOVENOX, Canadian physicians will likely decide to use an alternative injectable anticoagulant to enoxaparin sodium, such at UFH, or a different LMWH product. This is especially true in a hospital setting, where a surgeon may not be aware that a generic product has been substituted for LOVENOX, and would thus attribute the undesirable response to LOVENOX. Alternatively, even if the surgeon was aware that a generic product had been substituted, the surgeon could attribute the undesirable response to the active ingredient of the product (as opposed to the brand), not knowing that the generic product has a different pharmacological, safety and efficacy profile from that of LOVENOX. Once a Canadian physician or surgeon moves away from the use of a drug such as enoxaparin sodium, it is unlikely that they will later return to its use.
[45] In either of the scenarios outlined above, the Plaintiffs will suffer permanent and irreparable harm and damage to their goodwill and reputation as a result of the generic Novo-enoxaparin product. However, the extent of such damage cannot be measured, as the Plaintiffs will not be able to establish the extent to which physicians have stopped using enoxaparin sodium, and have moved to other anticoagulants, as a result of a negative experience with Novo-enoxaparin.
(vii) Loss of market share and opportunity for increasing market share in the U.S.
[46] LOVENOX has developed a strong reputation amongst prescribing physicians in the U.S. for reliability, safety and efficacy. LOVENOX is the commanding market leader in the U.S. in terms of market share of injectable anticoagulants, with over 89% of the market.
[47] The U.S. market has enormous potential for growth. UFH is currently the leader in the market by a large margin on the basis of unit sales (with approximately 71% of the market), and the overall market for injectable anticoagulants is growing. The Plaintiff Aventis Pharma S.A. has recently undertaken considerable efforts in the U.S. to educate physicians as to the benefits of using LOVENOX, in order to expand the use of LMWH products generally and to convert the UFH market to LOVENOX. In 2003, LOVENOX sales grew in the U.S. by 22% and in 2004 by 24%.
[48] Upon the entry of Novo-enoxaparin into the Canadian market, it is expected that the product will be sold to Americans by way of Canadian-based internet pharmacies, even though Novopharm has not obtained U.S. market approval. A conservative estimate of current total sales of all drugs from Canada into the U.S. via internet pharmacies is over $1 billion.
[49] It is expected that the price offered to Americans for Novo-enoxaparin by way of Canadian-based internet pharmacies will be at least 30% less than the U.S. price for LOVENOX. This will have a negative impact on LOVENOX sales in the United States. However, there is no mechanism currently in place whereby the extent of sales into the United States of Novo-enoxaparin by way of Canadian internet pharmacies can be accurately tracked. As a result, there is no way to determine the extent of the loss of LOVENOX sales in the United States that can be attributable to the introduction of Novo-enoxaparin in to the Canadian market.
M. ISSUES
[50] The sole issue on this motion is whether the Court should exercise its discretion and grant an interim or interlocutory injunction.
N. THE LAW ON INJUNCTIONS
[51] A judge of the Federal Court has jurisdiction to grant an interim or interlocutory injunction pursuant to s. 44 of the Federal Court Act and Rules 373(1) of the Federal Court Rules, 1998, which provide as follows:
44. In addition to any other relief that the Federal Court of Appeal or the Federal Court may grant or award, a mandamus, an injunction or an order for specific performance may be granted or a receiver appointed by that court in all cases in which it appears to the court to be just or convenient to do so. The order may be made either unconditionally or on any terms and conditions that the court considers just.
44. Indépendamment de toute autre forme de réparation qu'elle peut accorder, la Cour d'appel fédérale ou la Cour fédérale peut, dans tous les cas où il lui paraît juste ou opportun de le faire, décerner un mandamus, une injonction ou une ordonnance d'exécution intégrale, ou nommer un séquestre, soit sans condition, soit selon les modalités qu'elle juge équitables.
373. (1) On motion, a judge may grant an interlocutory injunction.
373. (1) Un juge peut accorder une injonction interlocutoire sur requête.
[52] The usual three-stage test to be applied by the Court in determining whether an interlocutory injunction should be granted is well known and is set out in RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 SCR 311 at 334, 54 C.P.R. (3d) 114. The elements of the test are as follows:
(a) Is there a serious question to be tried?
(b) Will the applicant suffer irreparable harm if the injunction is not granted?
(c) Which of the parties would suffer greater harm from the granting or refusal of the injunction pending a decision on the merits (the "balance of convenience")?
[53] To succeed on this motion, the Plaintiffs must meet all three requirements of the RJR-MacDonald test.
O. ANALYSIS
Serious Issue
[54] The threshold for determining whether there is a serious issue to be tried has generally been held to be low. The Court need not engage in a detailed review of the merits at this stage. See Turbo Resources Ltd. v. Petro Canada Inc., [1989] 2 F.C. 451, 24 C.P.R. (3d) 1 at 14 (F.C.A.); Pfizer Ireland Pharmaceuticals et al. v. Lily ICOS LLC et al. (2003), 30 C.P.R. (4th) 317 at 326.
[55] Notwithstanding Novopharm's attack on the validity of the '433 patent, I am satisfied that the Plaintiffs' infringement action raises a serious question to be tried.
[56] The Plaintiffs have also asked the Court to consider that there is strong, prima facie, evidence of patent infringement in the present case, and that Novopharm's allegations of invalidity are weak. An injunction is a flexible remedy in that it is subject to the Court's discretion. The Plaintiffs say that Novopharm has chosen to infringe the "433 patent with its eyes wide open, and this should be a strong factor in the present motion when weighed against all other matters.
[57] It is difficult for the Court to gauge the strength of Novopharm's invalidity allegations at this stage. Once again, it appears as though they raise a serious question and cannot be discounted in the way the Plaintiffs suggest.
[58] However, the Court is of the view that the present motion really stands or falls on the issue of irreparable harm to the Plaintiffs and, while the Court appreciates the flexibility of injunctive relief and the need to weigh all factors in the case, it appears to the Court that, in any such consideration, the importance of irreparable harm is the decisive issue on this motion.
Irreparable Harm
[59] As Mr. Justice Kelen pointed out in Pfizer Ireland Pharmaceuticals, at para. 25, it is well established in the jurisprudence that an interlocutory or interim injunction should only be granted in cases where there is clear evidence of irreparable harm. The Plaintiffs must adduce "clear and not speculative" evidence that irreparable harm will follow the entry of Novopharm's Novo-enoxaparin into the market.
[60] It is also well understood that irreparable harm refers to the nature of the harm suffered rather than its magnitude. As the Supreme Court of Canada pointed out in RJR-MacDonald, it is "harm which either cannot be quantified in monetary terms or which cannot be cured, usually because one party cannot collect damages from the other." (p. 341)
[61] Furthermore, difficulty in precisely calculating damages does not constitute irreparable harm, provided there is some reasonably accurate way of measuring those damages. See Merck & Co. v. Nu-Pharm Inc (2000), 4 C.P.R. (4th) 464 at 476 para. 32 (F.C.T.D.).
[62] In the present motion, the Plaintiffs raise various factors which they say will lead to irreparable harm because the impact of Novo-enoxaparin's entry into the market upon the Plaintiffs' losses will not be capable of reasonably accurate quantification:
(viii) Permanent Loss of Market Share and Opportunity for Increasing Market Share in the LMWH Retail Market
[63] The Plaintiffs argue that Novo-enoxaparin will quickly capture LOVENOX's retail market in Canada and will completely undermine Aventis' efforts to increase its share of the retail market from FRAGMIN. The resulting loss will not be capable of quantification because of the dynamic nature of LMWH market and the many variables that materially impact on the relative market share of the LMWH products. This means that it will be impossible to calculate what LOVENOX's share of the retail market would have been if Novo-enoxaparin had never entered the market.
[64] The evidence of Mr. Ghadiali, the Head of Speciality Sales, Haematology and Endocrinology for Aventis Pharma Inc., speaks to the likelihood of Aventis losing the retail LMWH pharmaceutical market in Canada, and the lost opportunity to increase its market share for LOVENOX in the retail setting.
[65] Mr. Tom Brogan, President of Brogan Inc., a consulting company that provides services for pharmaceutical markets, says he expects that Novopharm will acquire in excess of about 60% of the retail market within the first year of entry.
[66] The Plaintiffs' evidence speaks to market share. There is no evidence as to what a change in market share would mean to the Plaintiffs in terms of monetary damages or losses. The Plaintiffs have chosen not to reveal any evidence as to profits, or lost profits. The Court is left to speculate about what shifts in market share, and the loss of an opportunity to increase market share, might mean to Aventis. This is not clear evidence of any harm to the Plaintiffs, let alone irreparable harm.
[67] Apart from this, Aventis' evidence is that the dynamics of the market and the large number of variables make calculation impossible and, hence, the harm irreparable. But the evidence of Mr. Ghadiali and Mr. Brogan on this issue offers little in the way of elucidation. No explanation or comparison is offered as to why this particular market and the variables involved in this case make the calculation of damages so intractable. Theoretical complexity in calculation is not in itself clear evidence that damages are not capable of reasonable quantification.
[68] At this level, Novopharm's witness, Ms. Suzanne Loomer of Cole Valuation Partners Limited, who was asked to review and comment upon the evidence put forward by the Plaintiffs, says that "any losses suffered by Aventis, occasioned by the refusal of the Court to grant an interlocutory injunction in the event the Plaintiffs succeed at trial, that are attributable to Novopharm, can be quantified in monetary terms." She also says that "'Loss' includes Aventis Canada's potential lost profits on the sale of LOVENOX and other components ... ."
[69] Ms. Loomer is not able to demonstrate with any great precision how such losses could be calculated. But this is because "Aventis Canada has not provided all of the information that would be required to precisely quantify any loss at this time, and some information may only be known at the time of trial."
[70] With the information that is available to her from public sources, and using generally accepted approaches to loss quantification, Ms. Loomer demonstrates how she would "estimate the upper end of the range of losses from now until the expected completion of the trial."
[71] Ms. Loomer's analysis, of course, is necessarily incomplete in a variety of ways, and she does not provide a full explanation or a calculation of the losses that Aventis would actually suffer as a result of the loss of market share and the loss of opportunity for increasing market share in the LMWH retail market. But she makes it clear why she cannot do this on the information presently available to her, and the methodology presented is only intended to demonstrate what can be done on the basis of various assumptions and variables, some of which may well not prevail at the material time when actual losses will have to be demonstrated by Aventis before a trial judge.
[72] Ms. Loomer's analysis can be criticized and, of course, Aventis has drawn various defects to the Court's attention.
[73] But Ms. Loomer is hamstrung by the information available to her and the fact that she can only speculate about factors that Aventis has chosen not to reveal at this time. All she can say is that, from what she has seen, there are ways of quantifying market losses of the kind raised by Aventis in relation to LOVENOX.
[74] In the context of the present motion, it is not the responsibility of Ms. Loomer and Novopharm to demonstrate to the Court what the Plaintiffs' actual losses would be. Ms. Loomer can only work with the information that the Plaintiffs have chosen to reveal, or that is available from public sources. It is the Plaintiffs who must provide the Court with clear evidence that they will actually suffer harm in relation to market share losses and lost opportunities, and that such harm is irreparable because it cannot be calculated in monetary terms with an acceptable degree of accuracy.
[75] The Plaintiffs have not done this. They have chosen to allege that a loss of market share will likely occur, and that possible increases in market share will be thwarted. But they leave the Court to speculate about what this means in terms of actual monetary harm and why the market and the variables are so unusual that recognized loss quantification methodologies cannot yield an acceptable financial loss quantification. Ms. Loomer's evidence, although not conclusive on actual quantification, points to the shortcomings of the Plaintiffs' evidence as a basis for concluding that irreparable harm will occur if an injunction is not granted. To justify injunctive relief, the Plaintiffs need to show the Court why the dynamics of the LMWH and UFH market are so different from the dynamics of other relevant markets that available damage quantification methodologies cannot yield an acceptable result, and why the specific variables at play are equally problematic.
[76] All the Court has in the present application are assertions by Mr. Ghadiali and Mr. Brogan that market flux and dynamics, combined with variables, make quantification impossible. This is countered by Ms. Loomer who says that quantification is possible, even though all of the required information is not available to demonstrate with precision at this point how it can be done.
[77] The end result is that the Court is left to speculate about what the Plaintiffs' actual damage could be, and there is no clear indication that irreparable harm will occur, if the injunction is not granted.
[78] The Plaintiffs allege that they have clinical trials pending and shifts in the market share that might occur once the results of the trials are known cannot be predicted at this time.
[79] But all the Plaintiffs are able to show is that various factors, including the results of clinical trials, may problematize the quantification issue. In my view, this is not evidence that a reasonable quantification is not possible when all of the factors are known and results are published, and the evidence of Ms. Loomer suggests that it is. The impact of these matters on quantification remains speculative at this stage and is not clear and convincing evidence that irreparable harm will result if an injunction is not granted now.
(ix) Permanent Loss of Market Share and Opportunity for Increasing Market Share in the LMWH Institutional (Hospital) Market
[80] Once again, the concern here is that the availability of Novo-enoxaparin will lead to a permanent loss of the hospital market for LOVENOX. As the price for all the LMWH products and UFH are reduced, there will also be a redistribution of the market share amongst the competing products. This will result in irreparable harm, according to the Plaintiffs, because "due to the dynamic nature of the injectable anticoagulant market, it will be impossible to calculate the precise loss of LOVENOX market share attributable solely to the entry of Novo-enoxaparin."
[81] Mr. Ghadiali refers to the many variables as being "price, indications, reputation, overall market, growth" that will impact on the relative market share of the LMWH products.
[82] Once again, Ms. Loomer points out that she does not have all of the information required to make a precise quantification of this loss, but Aventis' response to Novo-enoxaparin will be known at the time of trial, "and hence the impact on loss would be calculable at that time."
[83] With what information she has, Ms. Loomer develops models and possible projections
for calculating actual losses in monetary terms, but much will depend upon what Aventis decides to do and the information it chooses to make available. Ms. Loomer's message is that, notwithstanding the Plaintiffs general assertions concerning the nature of this market and the many variables that come into play, there are ways of quantifying actual losses in this context in monetary terms.
[84] The end result is that the Court is left to speculate about the possible meanings and consequences of the alleged market complexities and interacting variables raised by the Plaintiffs. The Court is not provided with sufficient information by the Plaintiffs to convince it that actual unquantifiable harm will occur, and Ms. Loomer does assert the availability of methodologies that question and refute the assertions of Mr. Ghadiali and Mr. Brogan.
[85] It is, of course, a matter within the discretion of the Plaintiffs as to what information they choose to place before the Court to substantiate their general allegations of irreparable harm. The losses and difficulties brought forward in this motion remain in the realm of the speculative and do not provide a picture of irreparable harm that is clear enough to warrant the relief sought.
(x) Loss of Opportunity for Increasing Market Share from the UFH Market
[86] The Plaintiffs use a similar rationale and approach for alleging irreparable harm under this heading and assert "Again, because of marketplace dynamics, it will not be possible to calculate the loss of this opportunity as a result of the Novo-enoxaparin product."
[87] Mr. Ghadiali characterizes the problem as follows:
As noted above, on a per unit basis, the market leader for injectable anticoagulants is UFH. As such, all manufacturers of LMWH products are currently actively taking steps to shift the market from UFH to LMWH products and as such, the LMWH market has at this time the potential for enormous growth. However, should Novo-enoxaparin be marketed, Aventis' current efforts to increase LOVENOX' market share in the existing UFH market will be completely undermined. In addition, should Novo-enoxaparin later be withdrawn from the marketplace, marketplace dynamics and circumstances will have materially changed in the intervening period of