Apotex Inc. v. Sanofi-Aventis

Apotex Inc. v. Sanofi-Aventis
Court (s) Database
Federal Court of Appeal Decisions
Date
2014-03-14
Neutral citation
2014 FCA 68
File numbers
A-191-12, A-193-12, A-397-12, A-474-12
Notes
Reported Decision
Decision Content
Date: 20140314
Dockets: A-191-12
A-193-12
A-397-12
A-474-12
Citation: 2014 FCA 68
CORAM:
SHARLOW J.A.
PELLETIER J.A.
MAINVILLE J.A.
Docket:
A-191-12
BETWEEN:
APOTEX INC.
Appellant
and
SANOFI-AVENTIS,
SANOFI-AVENTIS DEUTSCHLAND GmbH
and SANOFI-AVENTIS CANADA INC.
Respondents
Docket:
A-193-12
AND BETWEEN:
SANOFI-AVENTIS,
SANOFI-AVENTIS DEUTSCHLAND GmbH
and SANOFI-AVENTIS CANADA INC.
Appellants
and
APOTEX INC.
Respondent
Docket:
A-397-12
AND BETWEEN:
SANOFI-AVENTIS,
SANOFI-AVENTIS DEUTSCHLAND GmbH
and SANOFI-AVENTIS CANADA INC.
Appellants
and
APOTEX INC.
Respondent
Docket:
A-474-12
AND BETWEEN:
SANOFI-AVENTIS,
SANOFI-AVENTIS DEUTSCHLAND GmbH
and SANOFI-AVENTIS CANADA INC.
Appellants
and
APOTEX INC.
Respondent
Heard at Toronto, Ontario, on October 30 and 31, 2013.
Judgment delivered at Ottawa, Ontario, on March 14, 2014.
REASONS FOR JUDGMENT BY: SHARLOW J.A.
CONCURRED IN BY:
PELLETIER J.A.
DISSENTING REASONS BY:
MAINVILLE J.A.
Date: 20140114
Dockets: A-191-12
A-193-12
A-397-12
A-479-12
Citation: 2014 FCA 68
CORAM:
SHARLOW J.A.
PELLETIER J.A.
MAINVILLE J.A.
Docket:
A-191-12
BETWEEN:
APOTEX INC.
Appellant
and
SANOFI-AVENTIS
SANOFI-AVENTIS DEUTSCHLAND GmbH
and SANOFI-AVENTIS CANADA INC.
Respondents
Docket:
A-193-12
AND BETWEEN:
SANOFI-AVENTIS,
SANOFI-AVENTIS DEUTSCHLAND GmbH
and SANOFI-AVENTIS CANADA INC.
Appellants
and
APOTEX INC.
Respondent
Docket:
A-397-12
AND BETWEEN:
SANOFI-AVENTIS,
SANOFI-AVENTIS DEUTSCHLAND GmbH
and SANOFI-AVENTIS CANADA INC.
Appellants
and
APOTEX INC.
Respondent
Docket:
A-474-12
AND BETWEEN:
SANOFI-AVENTIS,
SANOFI-AVENTIS DEUTSCHLAND GmbH
and SANOFI-AVENTIS CANADA INC.
Appellants
and
APOTEX INC.
Respondent
REASONS FOR JUDGMENT
DISSENTING REASONS BY MAINVILLE J.A.
[1] These reasons concern:
a) An appeal (docket A-191-12) brought by Apotex Inc. (“Apotex”) from a judgment of Snider J. of the Federal Court (the “Trial Judge”) dated May 11, 2012 (the “Liability Judgment”) issued for reasons cited as 2012 FC 553 and publicly released on May 23, 2012, which ordered compensation to be paid to pursuant to section 8 of the Patented Medicines (Notice of Compliance) Regulations, SOR/93-133 (“NOC Regulations”) for its net lost profits in respect of 1.25, 2.5, 5 and 10 mg capsules of its generic version of the drug ramipril for the period commencing April 26, 2004 and ending December 12, 2006.
b) A separate appeal (docket A-193-12) from the Liability Judgment brought by Sanofi-Aventis, Sanofi-Aventis Deutschland GmbH and Sanofi-Aventis Canada Inc. (“Sanofi”).
c) An additional appeal (docket A-397-12) brought by Sanofi from a subsequent order and direction issued by the Trial Judge dated 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.
d) A subsequent appeal (docket A-474-12), also brought by Sanofi, 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.
A copy of these reasons shall be placed in the Court file with respect to each of these dockets as reasons therein.
[2] Apotex sells a generic version of ramipril in Canada. Ramipril is a drug principally used to treat hypertension but which also has other medical uses. Sanofi asserts patent rights to this drug and to some of its uses, and it has for many years held a patent monopoly over this drug which it sold in Canada under the brand name ALTACE.
[3] To market a drug in Canada, a regulatory approval known as a notice of compliance (“NOC”) must first be obtained under the terms of the Food and Drug Regulations, C.R.C., c. 870. In certain circumstances, the issuance of a NOC may require certain steps to be followed under the NOC Regulations. In this case, on April 26, 2004, Apotex could have received its NOC from the Minister of Health to market in Canada its generic version of ramipril. However, it was prevented from so doing until December 12, 2006 because of various applications made by Sanofi under subsection 6(1) of the NOC Regulations for orders prohibiting the Minister from issuing the NOC on the ground of its patent rights. Section 8 of the NOC Regulations provides, inter alia, that if an application under subsection 6(1) is unsuccessful, a patent holder, such as Sanofi, is liable to a third party, such as Apotex, for any loss suffered for the delay as determined in accordance with the Regulations. Apotex took the view that it was entitled to such compensation and, after a long trial, the Trial Judge agreed.
[4] The issues raised by these appeals principally concern the framework under which compensation may be determined under section 8 of the NOC Regulations. This is an issue which has not been previously fully addressed by our Court.
[5] As a preliminary technical observation, it is useful to note that the notice of appeal submitted by Sanofi in docket A-193-12 also seeks to appeal another judgment dated May 11, 2012 and issued for reasons cited as 2012 FC 551 (the “Validity Judgment”) by which the Trial Judge dismissed all the invalidity arguments raised by Sanofi with respect to section 8 of the NOC Regulations. That Validity Judgment applies to the litigation involving Sanofi and Apotex in Federal Court docket T-1357-09 and to the litigation involving Sanofi and Teva in Federal Court docket T-1161-07. The validity arguments with respect to both cases were heard by the Trial Judge simultaneously, and a single set of reasons was issued by the Trial Judge. Sanofi has also appealed the Validity Judgment with respect to the Teva litigation in docket A-192-12. This Court has dismissed the appeals related to the Validity Judgment for reasons issued concurrently and cited as 2014 FCA 69.
[6] Another judgment respecting liability under section 8 of the NOC Regulations with respect to ramipril and involving Sanofi and Teva was issued by the Trial Judge concurrently with the Liability Judgment concerning Sanofi and Apotex: Sanofi-Aventis Canada Inc. v. Teva Canada Limited, 2012 FC 552 (referred to herein as the “Teva Liability Judgment (FC)”). Some of the issues raised in the Liability Judgment concerning Apotex and in the Teva Liability Judgment (FC) are similar. Moreover, this Court heard the appeal from the Teva Liability Judgment (FC) two weeks before it heard this appeal involving Apotex, and has issued its reasons for judgment with respect to that appeal concurrently with these reasons: 2014 FCA 67.
[7] There are also two related appeals concerning amendments to proceedings and to the striking out of evidence (dockets A-462-11 and A-27-12) which have been dealt with by this Court in reasons issued concurrently: 2014 FCA 66.
The statutory and regulatory framework
[8] The applicable statutory and regulatory framework has been discussed in other judicial decisions, notably in Bristol-Myers Squibb Co. v. Canada (Attorney General), 2005 SCC 26, [2005] 1 S.C.R. 533 (“Biolyse”); AstraZeneca Canada Inc. v. Canada (Minister of Health), 2006 SCC 49, [2006] 2 S.C.R. 560 (“AstraZeneca”); and Merck Frosst Canada Ltd. v. Apotex Inc., 2009 FCA 187, 76 C.P.R. (4th) 1 (“Alendronate”). A brief overview of this framework follows.
[9] Prescription drugs present a particularly difficult regulatory challenge in light of the various public interest issues which they raise:
(a) prescription drugs must be safe for public consumption, and the health risks associated with their use must be understood and disclosed; these public interest issues are primarily dealt with through the Food and Drugs Act, R.S.C. 1985, c. F-27 and the Food and Drug Regulations;
(b) scientific research into new and better drugs must be encouraged and properly rewarded; this is primarily dealt with through the Patent Act, R.S.C. 1985, c. P-4; and
(c) the drugs must be accessible to the Canadian patients at prices which are affordable for the Canadian public; these public interest issues are primarily dealt through (i) those provisions of the Patent Act which ensure that generic manufacturers of drugs may reasonably access the market when a patent monopoly over a drug has expired; (ii) those provisions of the Patent Act which allow for the control of prices for patented medicines; and (iii) provincial regulation of drug prices such as recently described in Katz Group Canada Inc. v. Ontario (Health and Long-Term Care), 2013 SCC 64.
[10] The Food and Drugs Act sets up a regulatory structure through the Food and Drug Regulations to ensure that drugs marketed in Canada meet stringent health and safety requirements. Of particular interest for this appeal is Division 8 of Part C of the Food and Drug Regulations which establishes the regulatory process which must be followed by a manufacturer that wishes to introduce a new drug into the Canadian market.
[11] As a general rule, an innovator drug manufacturer must file with the Minister of Health a new drug submission setting out the information and material to enable the Minister to assess the safety and effectiveness of the new drug: subsection C.08.002 of the Food and Drug Regulations. This generally involves providing detailed reports of the tests made to establish the safety of the new drug and substantial evidence of its clinical effectiveness for the purpose and under the conditions of use recommended. It may be very costly and time consuming for an innovator drug manufacturer to gather the evidence and to carry out the testing required to satisfy the Minister as to the safety and effectiveness of the drug. Once approved on the basis of the information provided, the Minister of Health then issues a notice of compliance (often referred to as a “NOC”) to the manufacturer of the new drug in respect to the submission. This NOC allows the manufacturer to sell and advertise the new drug.
[12] A major sector of the prescription drug manufacturing industry in Canada involves so-called “generic” drug manufacturers which generally manufacture and distribute what is sometimes known in the trade as “copy-cat” drugs. These copied drugs are similar to those researched, developed and first brought to market by innovator drug manufacturers. As a general rule, a generic drug manufacturer may file an abbreviated new drug submission with the Minister of Health by which it compares its proposed copy-cat drug with a Canadian reference product, namely a drug for which a NOC has already been issued and which is marketed in Canada by the innovator of the drug: section C.08.002.1 of the Food and Drug Regulations. This allows the generic drug manufacturer to meet the safety and effectiveness requirements of the copy-cat drug by demonstrating that it is the pharmaceutical equivalent of, or is bioequivalent with, the Canadian reference product. In this way, the generic manufacturer avoids the costs of lengthy clinical trials with respect to its generic drug. Once approved on the basis of the information provided, the Minister of Health then issues a NOC to the generic drug manufacturer in respect to the submission. This NOC allows the generic drug manufacturer to sell and advertise the copy-cat drug.
[13] Because generic drug manufacturers generally do not have significant research and testing costs with respect to a copy-cat drug, they may sell that drug at a considerable discount on the market, at considerable savings for the Canadian public, but with significant impacts on the revenues and profits of the innovator drug manufacturer. Innovator drug manufacturers are not however without legal recourse against these generics drug manufacturers where the copied innovator drug is subject to a monopoly resulting from the application of the Patent Act.
[14] The basic scheme of the Patent Act is conceptually simple: an inventor who discloses the workings of an invention to the public may receive a patent which ensures a 20 year monopoly on the making, use and marketing of the invention. This basic scheme also applies to prescription drugs.
[15] In light of the importance of patented drugs with respect to human health, the Patent Act includes a number of provisions seeking to restrict potential abuses of the patent monopoly with respect to a drug. As an example, the Patented Medicine Prices Review Board “may, by order, direct the patentee to cause the maximum price at which the patentee sells the medicine in that market to be reduced to such level as the Board considers not to be excessive”: ss. 83(1) of the Patent Act.
[16] Between 1923 and 1993, Canada’s policy was to make patented medicines available to generic drug manufacturers through a scheme of compulsory licensing. In determining the terms of the licence and the amount of royalties payable, the Commissioner of Patents was required to balance the desirability of making the medication affordably available to the public with rewarding the patentee for the research leading to the invention. This approach was not favoured by innovator drug manufacturers because they believed that it generally precluded recovery of important costs for the research programs required to produce a few marketable drugs from many false starts and failed research projects.
[17] In 1993, the compulsory licensing regime was repealed and replaced by the early working exception in section 55.2 of the Patent Act. As noted by Binnie J. in AstraZeneca at para. 13, the problem which section 55.2 sought to address is that if a generic drug manufacturer waits to begin its preparation of a copy-cat drug for approval under the Food and Drug Regulations until the innovator’s patent to the comparator drug expires, the Food and Drug Regulations approval process could add up to two years to the effective monopoly of the patent owner under the Patent Act. Without section 55.2, if the generic drug manufacturer tries to work the patented drug prior to the expiry of the patent, even if solely to satisfy the requirements of the Food and Drug Regulations for a NOC, it will infringe the patent, thus inviting litigation from the patent owner.
[18] Section 55.2 of the Patent Act reads as follows:
55.2 (1) It is not an infringement of a patent for any person to make, construct, use or sell the patented invention solely for uses reasonably related to the development and submission of information required under any law of Canada, a province or a country other than Canada that regulates the manufacture, construction, use or sale of any product.
(2) and (3) [Repealed, 2001, c. 10, s. 2]
55.2 (1) Il n’y a pas contrefaçon de brevet lorsque l’utilisation, la fabrication, la construction ou la vente d’une invention brevetée se justifie dans la seule mesure nécessaire à la préparation et à la production du dossier d’information qu’oblige à fournir une loi fédérale, provinciale ou étrangère réglementant la fabrication, la construction, l’utilisation ou la vente d’un produit.
(2) et (3) [Abrogés, 2001, ch. 10, art. 2]
(4) The Governor in Council may make such regulations as the Governor in Council considers necessary for preventing the infringement of a patent by any person who makes, constructs, uses or sells a patented invention in accordance with subsection (1), including, without limiting the generality of the foregoing, regulations
(a) respecting the conditions that must be fulfilled before a notice, certificate, permit or other document concerning any product to which a patent may relate may be issued to a patentee or other person under any Act of Parliament that regulates the manufacture, construction, use or sale of that product, in addition to any conditions provided for by or under that Act;
(b) respecting the earliest date on which a notice, certificate, permit or other document referred to in paragraph (a) that is issued or to be issued to a person other than the patentee may take effect and respecting the manner in which that date is to be determined;
(c) governing the resolution of disputes between a patentee or former patentee and any person who applies for a notice, certificate, permit or other document referred to in paragraph (a) as to the date on which that notice, certificate, permit or other document may be issued or take effect;
(d) conferring rights of action in any court of competent jurisdiction with respect to any disputes referred to in paragraph (c) and respecting the remedies that may be sought in the court, the procedure of the court in the matter and the decisions and orders it may make; and
(e) generally governing the issue of a notice, certificate, permit or other document referred to in paragraph (a) in circumstances where the issue of that notice, certificate, permit or other document might result directly or indirectly in the infringement of a patent.
(4) Afin d’empêcher la contrefaçon d’un brevet d’invention par l’utilisateur, le fabricant, le constructeur ou le vendeur d’une invention brevetée au sens du paragraphe (1), le gouverneur en conseil peut prendre des règlements, notamment :
a) fixant des conditions complémentaires nécessaires à la délivrance, en vertu de lois fédérales régissant l’exploitation, la fabrication, la construction ou la vente de produits sur lesquels porte un brevet, d’avis, de certificats, de permis ou de tout autre titre à quiconque n’est pas le breveté;
b) concernant la première date, et la manière de la fixer, à laquelle un titre visé à l’alinéa a) peut être délivré à quelqu’un qui n’est pas le breveté et à laquelle elle peut prendre effet;
c) concernant le règlement des litiges entre le breveté, ou l’ancien titulaire du brevet, et le demandeur d’un titre visé à l’alinéa a), quant à la date à laquelle le titre en question peut être délivré ou prendre effet;
d) conférant des droits d’action devant tout tribunal compétent concernant les litiges visés à l’alinéa c), les conclusions qui peuvent être recherchées, la procédure devant ce tribunal et les décisions qui peuvent être rendues;
e) sur toute autre mesure concernant la délivrance d’un titre visé à l’alinéa a) lorsque celle-ci peut avoir pour effet la contrefaçon de brevet.
(5) In the event of any inconsistency or conflict between
(a) this section or any regulations made under this section, and
(b) any Act of Parliament or any regulations made thereunder,
this section or the regulations made under this section shall prevail to the extent of the inconsistency or conflict.
(5) Une disposition réglementaire prise sous le régime du présent article prévaut sur toute disposition législative ou réglementaire fédérale divergente.
(6) For greater certainty, subsection (1) does not affect any exception to the exclusive property or privilege granted by a patent that exists at law in respect of acts done privately and on a non-commercial scale or for a non-commercial purpose or in respect of any use, manufacture, construction or sale of the patented invention solely for the purpose of experiments that relate to the subject-matter of the patent.
(6) Le paragraphe (1) n’a pas pour effet de porter atteinte au régime légal des exceptions au droit de propriété ou au privilège exclusif que confère un brevet en ce qui touche soit l’usage privé et sur une échelle ou dans un but non commercial, soit l’utilisation, la fabrication, la construction ou la vente d’une invention brevetée dans un but d’expérimentation.
[19] The NOC Regulations were adopted pursuant to section 55.2 of the Patent Act. Section 4 of these Regulations allows an innovator drug manufacturer who files a new drug submission to also submit to the Minister of Health a patent list relating to the submission. A patent on this list may then be added to a register of patents maintained by that Minister under subsection 3(2) of the Regulations.
[20] A generic drug manufacturer which files a submission for a NOC in respect of a drug (usually in the form of an abbreviated new drug submission) and which compares that drug with another drug marketed in Canada under another NOC must indicate in its submission, with respect to each patent listed on the register for the other drug, either that it accepts that it will not obtain the Minister's NOC until the patent expires, or allege (through what is known as a notice of allegation or “NOA”) that the patent is not valid or would not be infringed, and include, inter alia, a detailed statement of the legal and factual basis for the allegation: section 5 of the NOC Regulations.
[21] An innovator drug manufacturer that is served with such a notice of allegation may, within 45 days, apply to the Federal Court for an order prohibiting the Minister of Health from issuing a NOC to the generic drug manufacturer until after the expiration of a patent that is the subject of the notice: subsection 6(1) of the NOC Regulations. The initiation of this application for prohibition automatically triggers a 24-month delay (or “statutory freeze”) that prevents the Minister of Health from issuing a NOC to the generic drug manufacturer unless, within that period, the prohibition application is finally dismissed by the court or is otherwise withdrawn or discontinued: para. 7(1)(e) and ss. 7(4) of the NOC Regulations. As noted by Binnie J. in Biolyse at para. 24:
It is important to note that under this procedure, the court hearing the prohibition application has no discretion to lift the stay even if it thinks the innovator’s case for interim relief is weak. Nor does the court have a discretion to leave the contending parties to their remedies under the Patent Act. The “second person”’s [the generic’s] application for a NOC simply goes into deep-freeze until the statutory procedures have played themselves out. For these reasons, Iacobucci J. described the regime as “draconian” in Merck Frosst Canada Inc. v. Canada (Minister of National Health and Welfare), [1998] 2 S.C.R. 193, at para. 33.
[22] If the innovator drug manufacturer is successful in the prohibition proceeding, the Minister of Health is prohibited from issuing to the generic drug manufacturer a notice of compliance for its generic drug until the relevant patent has expired. If the generic drug manufacturer is successful, the Minister may then issue a notice of compliance for the generic version of the drug. Whatever the outcome of the proceeding under the NOC Regulations, patent validity and patent infringement proceedings under the Patent Act may be initiated or continued by the parties before any competent court: Eli Lilly & Co. v. Novopharm Ltd., [1998] 2 S.C.R. 129 at paras. 95-96; Merck Frosst Canada Inc. v. Canada (Minister of National Health and Welfare) (1994), 55 C.P.R. (3d) 302 (F.C.A.) at pp. 319-20; David Bull Laboratories (Canada) Inc. v. Pharmacia Inc., [1995] 1 F.C. 588 (C.A.) at p. 600.
[23] A compensation mechanism has been set out in the NOC Regulations in the event that the innovator’s prohibition application made under subsection 6(1) of the Regulations is withdrawn, discontinued or dismissed by the court. That mechanism is described in section 8 of the NOC Regulations, which is reproduced below:
8. (1) If an application made under subsection 6(1) is withdrawn or discontinued by the first person [the innovator] or is dismissed by the court hearing the application or if an order preventing the Minister from issuing a notice of compliance, made pursuant to that subsection, is reversed on appeal, the first person [the innovator] is liable to the second person [the generic] for any loss suffered during the period
(a) beginning on the date, as certified by the Minister, on which a notice of compliance would have been issued in the absence of these Regulations, unless the court concludes that
(i) the certified date was, by the operation of An Act to amend the Patent Act and the Food and Drugs Act (The Jean Chrétien Pledge to Africa), chapter 23 of the Statutes of Canada, 2004, earlier than it would otherwise have been and therefore a date later than the certified date is more appropriate, or
(ii) a date other than the certified date is more appropriate; and
(b) ending on the date of the withdrawal, the discontinuance, the dismissal or the reversal.
8. (1) Si la demande présentée aux termes du paragraphe 6(1) est retirée ou fait l’objet d’un désistement par la première personne [l’innovateur] ou est rejetée par le tribunal qui en est saisi, ou si l’ordonnance interdisant au ministre de délivrer un avis de conformité, rendue aux termes de ce paragraphe, est annulée lors d’un appel, la première personne [l’innovateur] est responsable envers la seconde personne [le manufacturier générique] de toute perte subie au cours de la période :
a) débutant à la date, attestée par le ministre, à laquelle un avis de conformité aurait été délivré en l’absence du présent règlement, sauf si le tribunal conclut :
(i) soit que la date attestée est devancée en raison de l’application de la Loi modifiant la Loi sur les brevets et la Loi sur les aliments et drogues (engagement de Jean Chrétien envers l’Afrique), chapitre 23 des Lois du Canada (2004), et qu’en conséquence une date postérieure à celle-ci est plus appropriée,
(ii) soit qu’une date autre que la date attestée est plus appropriée;
b) se terminant à la date du retrait, du désistement ou du rejet de la demande ou de l’annulation de l’ordonnance.
(2) A second person [the generic] may, by action against a first person [the innovator], apply to the court for an order requiring the first person [the innovator] to compensate the second person [the generic] for the loss referred to in subsection (1).
(2) La seconde personne [le manufacturier générique] peut, par voie d’action contre la première personne [l’innovateur], demander au tribunal de rendre une ordonnance enjoignant à cette dernière de lui verser une indemnité pour la perte visée au paragraphe (1).
(3) The court may make an order under this section without regard to whether the first person [the innovator] has commenced an action for the infringement of a patent that is the subject matter of the application.
(3) Le tribunal peut rendre une ordonnance aux termes du présent article sans tenir compte du fait que la première personne [l’innovateur] a institué ou non une action en contrefaçon du brevet visé par la demande.
(4) If a court orders a first person [the innovator] to compensate a second person [a generic] under subsection (1), the court may, in respect of any loss referred to in that subsection, make any order for relief by way of damages that the circumstances require.
(4) Lorsque le tribunal enjoint à la première personne [l’innovateur] de verser à la seconde personne [le manufacturier générique] une indemnité pour la perte visée au paragraphe (1), il peut rendre l’ordonnance qu’il juge indiquée pour accorder réparation par recouvrement de dommages-intérêts à l’égard de cette perte.
(5) In assessing the amount of compensation the court shall take into account all matters that it considers relevant to the assessment of the amount, including any conduct of the first [innovator] or second [generic] person which contributed to delay the disposition of the application under subsection 6(1).
(5) Pour déterminer le montant de l’indemnité à accorder, le tribunal tient compte des facteurs qu’il juge pertinents à cette fin, y compris, le cas échéant, la conduite de la première personne [l’innovateur] ou de la seconde personne [le manufacturier générique] qui a contribué à retarder le règlement de la demande visée au paragraphe 6(1).
(6) The Minister is not liable for damages under this section.
(6) Le ministre ne peut être tenu pour responsable des dommages-intérêts au titre du présent article.
Background
[24] The background to the litigation and the pertinent facts are set out in the reasons of the Trial Judge and need not be repeated in full here. It suffices for the purposes of this appeal to highlight some of the most salient facts.
[25] For the purposes of this litigation, Sanofi may be considered an innovator drug manufacturer, while Apotex may be viewed as a generic drug manufacturer. Sanofi, either as a patentee or licensee, holds rights under various Canadian patents that relate to ramipril, which it sells under the brand name ALTACE. Ramipril is a drug which is primarily used to treat hypertension, but whose medical use has expanded over the years to include heart related health issues following a “Heart Outcomes Prevention Evaluation” (“HOPE”) study published in the year 2000 which found that “[t]reatment with ramipril reduced the rates of death, myocardial infarction, stroke, coronary revascularization, cardiac arrest, and heart failure as well as the risk of complications related to diabetes and of diabetes itself”: HOPE study at p. 150 as cited in the Trial Judge’s Reasons at para. 277. The term “HOPE indications” has come to be associated with the patient profiles from the HOPE study where vascular protection was demonstrated: Ibid.
[26] The initial Canadian patent for ramipril was Patent No. 1,187,087 issued May 14, 1985 and which expired May 14, 2002, after 17 years of patent monopoly as the Patent Act then provided. With the pending expiration of this initial patent, many generic drug manufacturers became interested in marketing their own generic versions of ramipril, including Apotex. The Trial Judge found that “Sanofi, in efforts to extend patent protection for ramipril, proceeded to obtain a further series of patents and protect those patents through listing on the Patent Register”: Trial Judge’s Reasons at para. 26. Sanofi described these efforts as “Altace Lifecycle Management”, while the generic manufacturers referred to these as “evergreening”: Ibid. A considerable amount of litigation under the NOC Regulations ensued with respect to these further patents.
[27] The Trial Judge provided a chart at paragraph 27 of her Reasons setting out the list of subsequent patents involving ramipril and its uses. It is useful to reproduce this chart here:
Canadian Patent No.
Issue Date
Patent Register Listing
Subject Matter/Indications
1,246,457 (the '457 Patent)
December 13, 1988 (expired December 13, 2005)
February 21, 2001
Ramipril for the treatment of cardiac insufficiency
1,341,206 (the '206 Patent)
March 20, 2001
April 11, 2001
Composition-of-matter patent
2,055,948 (the '948 Patent)
November 12, 2002
June 25, 2004
Use of ramipril together with a calcium antagonist for the treatment of proteinuria
2,023,089 (the '089 Patent)
January 14, 2003
November 10, 2003
Use of ramipril in the treatment of cardiac and vascular hypertrophy and hyperplasia
2,382,549 (the '549 Patent)
March 15, 2005
March 17, 2005
Use of ramipril in the prevention of cardiovascular events
2,382,387 (the '387 Patent)
June 21, 2005
June 28, 2005
Use of ramipril in the prevention of stroke, diabetes and/or congestive heart failure
The last two patents in this list, the ‘549 and ‘387 Patents, are referred to as the “HOPE patents”.
[28] The Trial Judge also provided, at paragraph 29 of her Reasons, a useful chart briefly describing the results of the litigation under the NOC Regulations with respect to ramipril and involving Sanofi and Apotex. It is also useful to reproduce this chart here:
Patent No.
Notice of Allegation
Notice of Application/Court File No.
Outcome
'206 Patent
June 20, 2003
September 23, 2003/T-1742-03
Mactavish J. dismisses on September 20, 2005 (Aventis Pharma Inc v Apotex Inc, 2005 FC 1283, 278 FTR 1 [Ramipril NOC #1 (FC)])
'457 Patent
August 20, 2003 (non-infringement)
October 8, 2003/T-1851-03
Simpson J. issues Prohibition Order until expiry of '457 Patent on October 6, 2005 [Aventis Pharma Inc. v. Apotex Inc., 2005 FC 1381, 44 C.P.R. (4th) 90] [Ramipril NOC #2 (FC)]
'457 Patent
November 10, 2003 (invalidity)
December 29, 2003/T-2459-03
Tremblay-Lamer J. dismisses on November 4, 2005 (Aventis Pharma Inc v Apotex Inc, 2005 FC 1504, 283 FTR 171 [44 C.P.R. (4th) 108] [Ramipril NOC #3 (FC)])
'089 Patent
November 17, 2003
January 5, 2004/T-11-04
von Finckenstein J. dismisses on October 27, 2005 (Aventis Pharma Inc v Apotex Inc, 2005 FC 1461, 283 FTR 1 [Ramipril NOC #4 (FC)])
'948 Patent
June 28, 2004
August 16, 2004/T-1499-04
Order of Dismissal, on Consent, dated on June 27, 2006 [Ramipril NOC #5 (FC)]
'549, '387 Patents (HOPE Patents)
November 29, 2005
January 17, 2006/T-87-06
By Order, Aalto P. dismisses as moot on May 2, 2008 [Ramipril NOC #6 (FC)]
The Reasons of the Trial Judge
[29] The Trial Judge provided detailed reasons reaching over 115 pages. The salient aspects of those reasons may be summarized as follows.
[30] Subject to the validity issues dealt with by the Trial Judge in the Validity Judgment, Sanofi acknowledged at trial that Apotex was entitled to compensation pursuant to section 8 of the NOC Regulations: Trial Judge’s Reasons at para. 4. The debate before the Trial Judge consequently concerned primarily how such compensation was to be determined.
[31] The Trial Judge saw her task as one of assessing the compensation owed by considering what would have happened if Sanofi had not brought applications for prohibition against Apotex. The answer to this question required the Trial Judge to “construct a hypothetical, or ‘but for’, world during a defined period of time in the past in order to determine what share of the ramipril market Apotex would have captured if it had been able to sell its generic ramipril” during that period: Trial Judge’s Reasons at para. 6 (emphasis in original).
Start and end dates of the section 8 liability period
[32] This appeal involves many issues relating to the determination of the period contemplated by paragraphs 8(1)(a) and (b) of the NOC Regulations. For ease of reference, I will refer to that period as the “section 8 liability period”.
[33] After identifying the issues and setting out the regulatory and factual background to the litigation, the Trial Judge first dealt with the determination of the relevant section 8 liability period during which the compensation should be calculated in this case.
[34] The Trial Judge noted that paragraph 8(1)(a) of the NOC Regulations establishes the start date for the period as “the date, as certified by the Minister, on which a notice of compliance would have been issued in the absence of these Regulations”. The parties agreed in this case that the date certified by the Minister was April 26, 2004, the so-called “patent hold” date with respect to Apotex’s generic version of ramipril: Trial Judge’s Reasons at paras. 38 and 40.
[35] The Trial Judge also noted that paragraph 8(1)(a) nevertheless allows the court to determine if “a date other than the certified date is more appropriate”. Sanofi argued that the Trial Judge should exercise her discretion in this respect so as to set the start date on December 13, 2005, which was the expiration date of Sanofi’s ‘457 Patent concerning the use of ramipril for the treatment of cardiac insufficiency. Sanofi’s argument to justify this subsequent date was founded on the existence of a prohibition order based on that patent issued by Simpson J. under subsection 6(2) of the NOC Regulations in Ramipril NOC #2 (FC). Since the application upon which this prohibition order was based was never withdrawn, discontinued, dismissed or reversed on appeal, Sanofi submitted to the Trial Judge that Apotex had no claim to compensation under section 8 until the effect of that prohibition order ended, i.e. until the expiry of the ‘457 Patent on December 13, 2005.
[36] The Trial Judge disagreed with Sanofi, largely on the ground that less than 30 days after Simpson J. had issued the prohibition order, Tremblay-Lamer J. found the ‘457 Patent to be invalid within the framework of another proceeding which dismissed another of Sanofi’s prohibition applications in Ramipril NOC #3 (FC). In the Trial Judge’s view, the decision of Tremblay-Lamer J. effectively “unlocked” the door for Apotex to receive a NOC irrespective of the ‘457 Patent, with the logical result that the prohibition order issued by Simpson J. had been subsumed or “trumped” by the subsequent decision, and was therefore no longer enforceable or of any practical effect: Trial Judge’s Reasons at paras. 47-48.
[37] This reasoning lead the Trial Judge to conclude that April 26, 2004, the date of Apotex’s patent hold, was the appropriate date to begin the section 8 liability period in this case: Trial Judge’s Reasons at para. 55.
[38] With respect to the end date of the section 8 liability period, the Trial Judge noted that paragraph 8(1)(b) of the NOC Regulations provides that the liability period ends on “the date of the withdrawal, the discontinuance, the dismissal or the reversal” of the prohibition proceeding. However, in this case, there were multiple patents registered by Sanofi under the NOC Regulations with respect to ramipril, and five different dismissal dates relating to five separate prohibition applications involving Sanofi and Apotex. Moreover, the Trial Judge noted that the case also presented a “very unusual situation in which the second person [Apotex] received an NOC prior to the disposition of the last prohibition proceeding”: Reasons at para. 57.
[39] In light of the particular factual situation, Apotex urged the Trial Judge to conclude, on a plain reading of paragraph 8(1)(b), that the end of the period should be set to May 2, 2008, the date Prothonotary Aalto dismissed as moot the last prohibition proceeding involving Sanofi and Apotex under section 6 of the NOC Regulations in Ramipril NOC # 6 (FC). Sanofi rather favoured the date of June 27, 2006, the date it said Apotex ceased to be a “second person” with respect to the HOPE patents. The Trial Judge rejected both submissions and rather found that the appropriate date to end the section 8 liability period in this case was December 12, 2006, the date the Minister of Health issued a NOC to Apotex for its generic version of ramipril.
[40] The Trial Judge rejected Apotex’s argument that the end date of the section 8 liability period should be the date of the formal dismissal of the last prohibition application on May 2, 2008. She did so on her finding that the application became moot when the NOC was issued to Apotex on December 12, 2006.
[41] The Trial Judge also rejected Sanofi’s proposed end date of June 27, 2006. Sanofi had submitted that this date was that of the dismissal of the “last true” prohibition proceeding involving ramipril in Ramipril NOC # 5 (FC). Sanofi had initiated prohibition proceedings against Apotex with respect to its HOPE patents; however, as a result of the decision of the Supreme Court of Canada in AstraZeneca, the Minister of Health took the position that Apotex did not need to address these HOPE patents since Apotex was not seeking a NOC for uses specified in these HOPE patents. As a result, for the purposes of section 8 compensation determinations, Sanofi took the position that Apotex was never a “second person” under the NOC Regulations with respect to the HOPE patents, and that consequently the last “valid” prohibition proceeding which was withdrawn or dismissed was in Ramipril NOC #5 (FC) on June 27, 2006.
[42] The Trial Judge dismissed Sanofi’s argument on the ground that it was based on a misreading of AstraZeneca and of the decision of Hughes J. in Ferring Inc. v. Canada (Minister of Health), 2007 FC 300, [2008] 1 F.C.R. 19, aff’d 2007 FCA 276 (“Ferring”). In the Trial Judge’s view AstraZeneca established that a generic drug manufacturer is not required to address patents listed by the innovator drug manufacturer after the generic drug manufacturer submits its abbreviated new drug submission, because the generic manufacturer will not have early-worked that patent. AstraZeneca did not decide o