Apotex Inc. v. Sanofi-Aventis

Apotex Inc. v. Sanofi-Aventis
Court (s) Database
Federal Court Decisions
Date
2012-05-23
Neutral citation
2012 FC 553
File numbers
T-1357-09
Decision Content
Date: 20120523
Docket: T-1357-09
Citation: 2012 FC 553
BETWEEN:
APOTEX INC.
Plaintiff
and
SANOFI-AVENTIS
SANOFI-AVENTIS DEUTSCHLAND GmbH AND SANOFI-AVENTIS CANADA INC.
Defendants
PUBLIC REASONS FOR JUDGMENT
(Confidential Reasons for Judgment released May 11, 2012)
SNIDER J.
I. Introduction
[1] Apotex Inc. (Apotex), the Plaintiff in this action, sells a generic version of ramipril – a drug used mainly to treat hypertension – into the Canadian market. Sanofi-Aventis Canada Inc. (Sanofi), one of the Defendants in this action, holds or has held patent rights to a brand-name version of ramipril – ALTACE.
[2] In spite of the fact that Apotex received certain regulatory approvals from Health Canada in 2004, it was unable to commence sales of Apo-ramipril until December 12, 2006, when it received its Notice of Compliance (NOC) pursuant to the Patented Medicines (Notice of Compliance) Regulations, SOR/93-133 (the PM (NOC) Regulations or the Regulations). In whole or in part, the delay was caused by the actions of Sanofi, which exercised its rights under the Regulations to a statutory stay of the issuance of an NOC to Apotex. In this action, Apotex claims that Sanofi, Sanofi-Aventis (Sanofi France) and Sanofi-Aventis Deutschland GmbH (Sanofi Germany) are liable to Apotex for the loss it suffered during the period from April 26, 2004 to May 2, 2008, as provided for in s. 8(1) of the PM (NOC) Regulations.
[3] The Defendant, Sanofi, is a Canadian corporation and a manufacturer, vendor and distributor of pharmaceutical products. Sanofi has several corporate predecessors, including Hoechst Marion Roussel Canada Inc. (Hoechst), Rhône-Poulenc Rorer Canada Inc., and Aventis Pharma Inc. (Aventis). The name “Sanofi” will be used in these Reasons for Judgment to refer to Sanofi and its corporate predecessors, unless the context suggests otherwise.
[4] Subject to validity issues raised in its pleadings, Sanofi acknowledges and accepts that Apotex is entitled to damages under s. 8. However, Sanofi disputes many elements of Apotex’s claim, including: (a) the relevant dates for computing the loss; and (b) the various assumptions and projections built into the assessment of damages.
[5] Sanofi’s claim of invalidity of s. 8 of the PM (NOC) Regulations was separately argued in a hearing involving this action and similar issues in Court File No. T-1161-07 (Teva Canada Limited v Sanofi-Aventis Canada Inc and Sanofi-Aventis Deutschland GmbH). Separate Reasons have been rendered in respect of the validity issues (see 2012 FC 551). In addition, by Order of Prothonotary Milczynski, dated May 31, 2011, all of the claims of Apotex with respect to Sanofi France and Sanofi Germany have been bifurcated. Thus, these Reasons do not include a consideration of the invalidity claims of Sanofi or of Apotex’s claims against Sanofi France and Sanofi Germany.
[6] My overarching objective is to assess the amount of compensation to be awarded to Apotex. Following the teachings of the Court of Appeal in Apotex Inc v Merck & Co, 2011 FCA 329 at para 75, 425 NR 279 [Norfloxacin (FCA)], this requires that I consider the hypothetical question: What would have happened if Sanofi had not brought an application for prohibition? In other words, I must 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. In addition to some of the common issues arising on an assessment of damages, one of the key tasks before me involves an examination of various provisions of the PM (NOC) Regulations. Well-established principles of statutory interpretation will guide me in establishing what I believe to be the correct meaning.
[7] In the reasons that follow, I address the many issues raised by this action. Three of my key conclusions are as follows:
1. The period of liability (the Relevant Period) for the assessment of Apotex’s losses is April 26, 2004 to December 12, 2006.
2. The Court should have regard to the possibility of multiple market entrants during the Relevant Period, but is not required to establish a single “but for” world that will apply to all possible s. 8 claims. On the facts of this case, it is more likely than not that a generic authorized by Sanofi (an authorized generic or AG) would have entered the generic market on July 26, 2004, with Teva Canada Limited [Teva] following on August 1, 2006.
3. In assessing Apotex’s damages, no adjustment should be made for: (a) a second “ramp-up”; or (b) sales made in respect of an unapproved indication.
[8] This action was one of three s. 8 damages actions brought against Sanofi by generic manufacturers with respect to ramipril. This was the second action heard. The first action was Teva Canada Limited v Sanofi-Aventis Canada Inc and Sanofi-Aventis Deutschland GmbH (Court File No. T-1161-07). The trial of that action took place immediately before the commencement of this trial and has resulted in a decision released concurrently with these Reasons. The third action is Sanofi-Aventis Canada Inc et al v Laboratoire Riva Inc (Court File No. T-1201-08). The trial of this third action is yet to take place.
[9] I have set out a brief overview of the many fact and expert witnesses who appeared in this trial and the areas to which they testified in Appendix A. For the experts, I have described the matters in respect of which I found them to be qualified to provide me with their expert opinions. More detailed references to the witnesses’ evidence and testimony are contained in the appropriate sections of these Reasons.
II. Table of Contents
[10] To assist the reader, the following Table of Contents is provided. The paragraph number for the beginning of each noted section is set out.
I. Introduction ........................................................................................... [1]
II. Table of Contents...................................................................................... [10]
III. Issues ......................................................................................... [11]
IV. Essential Background................................................................................ [13]
A. Statutory framework under the PM (NOC ) Regulations .............. [13]
B. Ramipril patents............................................................................ [26]
C. Apotex’s regulatory submissions and litigation ............................... [29]
V. Relevant Period......................................................................................... [37]
A. Commencement date..................................................................... [37]
B. End date....................................................................................... [56]
(1) Apotex’s date: May 2, 2008............................................. [59]
(2) Sanofi’s date: June 27, 2006 ............................................ [65]
(3) Alternative date: December 12, 2006 ............................... [81]
C. Conclusion on Relevant Period ..................................................... [83]
VI. Overall Size of the Ramipril Market........................................................... [84]
VII. Size of the Generic Market...................................................................... [105]
A. Market penetration...................................................................... [107]
B. Formulary listings........................................................................ [115]
C. Conclusion on Generic Market ................................................... [123]
VIII. Apotex’s Share of the Generic Market.................................................... [124]
A. Sanofi’s view of the “but for” world............................................. [128]
B. Other generics ............................................................................ [140]
(1) Teva............................................................................... [151]
(2) Riva................................................................................ [161]
(3) Authorized generic.......................................................... [169]
(a) Do the Regulations preclude an AG?.................. [174]
(b) Would Sanofi have decided to launch
an AG? .............................................................. [181]
(c) When would the AG have entered
the market?......................................................... [191]
(4) Conclusion on other generics in the
“but for” world ............................................................... [203]
C. Apotex’s share of the Generic Market......................................... [204]
(1) Apotex’s percentage share ............................................. [204]
(2) Pipeline adjustment.......................................................... [221]
IX. Apotex’s Lost Gross Sales ..................................................................... [227]
X. Apotex’s Net Lost Profits....................................................................... [237]
A. Sales returns............................................................................... [241]
B. Trade spend ............................................................................... [244]
C. Cost of API................................................................................ [255]
D. Other potential costs or adjustments............................................ [260]
(1) Medichem ...................................................................... [261]
(2) Plant capacity.................................................................. [262]
(3) Subsequent ramp up........................................................ [265]
XI. Unapproved Indications ......................................................................... [272]
XII. Conclusions ....................................................................................... [296]
Appendix A – List of Witnesses
III. Issues
[11] In very general terms, the assessment of Apotex’s damages involves five steps:
1. determine the duration of the period of liability (the Relevant Period);
2. determine the overall size of the ramipril market during the Relevant Period (the Ramipril Market);
3. determine the portion of the Ramipril Market that would have been retained by Sanofi and the portion that would have been held by generic manufacturers during the Relevant Period (the Generic Market);
4. determine the portion of the Generic Market that would have been held by Apotex (Apotex’s Lost Volumes); and
5. quantify the damages that would have been suffered by Apotex in respect of Apotex’s Lost Volumes (Apotex’s Net Lost Profits).
[12] In the case before me, these steps require consideration of a number of issues where the parties are in disagreement. These issues are as follows:
1. What is the appropriate date for the commencement of the Relevant Period for which loss can be claimed by a second person under s. 8 of the Regulations:
a. April 26, 2004, the date Health Canada’s review of Apotex’s drug submission was completed and Apotex was advised that an NOC would not issue until the requirements of the Regulations were met (referred to as the “patent hold” date; see Exhibit 1, Tab 2); or
b. December 13, 2005, the date of expiry of Canadian Patent No. 1,246,457 (the '457 Patent), which was the subject of a Prohibition Order (the Prohibition Order or the Order) granted by Justice Simpson in Aventis Pharma Inc v Apotex Inc, 2005 FC 1381, 281 FTR 233 [Ramipril NOC #2 (FC)];
2. What is the appropriate date for the ending of the Relevant Period, having regard to whether Apotex was a “second person” for purposes of the Regulations:
a. May 2, 2008, the date of the dismissal of the last prohibition proceeding in Court File No. T-87-06 by Order of Prothonotary Aalto;
b. June 27, 2006, the date of dismissal of Court File No. T-1499-04; or
c. December 12, 2006, the date of Apotex’s NOC for ramipril?
3. What would have been the size of the Ramipril Market over the Relevant Period?
4. What would have been the size of the Generic Market during the Relevant Period?
5. What would have been Apotex’s Lost Volumes during the Relevant Period? Subsidiary to this question are the following sub-issues:
a. In assessing Sanofi’s liability under s. 8, is Sanofi’s liability to be assessed on the basis of a single “but for” world which includes all potential generic manufacturers?
b. What other generics would likely have come to market during the Relevant Period and when? Specifically, would any or all of Teva, Laboratoire Riva Inc. (Riva) and/or Pharmascience Inc. (Pharmascience or PMS), or an authorized generic have launched during the Relevant Period?
c. What portion of the Generic Market would have been captured by Apotex during the Relevant Period? In other words, what would have been Apotex’s Lost Volumes?
6. Based on my finding as to Apotex’s Lost Volumes, what is Apotex’s Lost Gross Sales, having regard to the pricing of Apo-ramipril during the Relevant Period, considering the provincial formularies?
7. Based on my finding as to Apotex’s Lost Volumes, what is Apotex’s Net Lost Profits, having regard to relevant matters, including:
a. sales returns;
b. likely trade spend (including discounts and allowances) that would have been paid by Apotex to pharmacists and distributors to stock Apo‑ramipril;
c. likely price of the active pharmaceutical ingredient (API); and
d. other potential adjustments?
8. Is a second person entitled to recover under s. 8 of the Regulations for lost sales that would have been made as a result of prescriptions that were aimed at unapproved indications?
IV. Essential Background
A. Statutory framework under the PM (NOC) Regulations
[13] This action arises solely out of the operation of the PM (NOC) Regulations. Quite simply, Apotex was kept off the market for a period of time by the actions of Sanofi that were ultimately found to be unsustainable. In his decision in Apotex Inc v Merck & Co, 2008 FC 1185 at paras 35-51, [2009] 3 FCR 234 [Alendronate (FC)], Justice Hughes provides a comprehensive history and rationale of the Regulations and s. 8, in particular. Although the decision in Alendronate (FC) was overturned in part by the Court of Appeal in Apotex Inc v Merck & Co, 2009 FCA 187, [2010] 2 FCR 389, rev’g 2008 FC 1185, leave to appeal to SCC refused [2009] SCCA No 347 [Alendronate (FCA)], Justice Hughes’s description of the background to the PM (NOC) Regulations remains a valuable tool. Rather than restate this history here, I commend the identified passages to the reader.
[14] The damages suffered by Apotex are statutory in that they arise only because of the operation of s. 8 of the PM (NOC) Regulations. The liability of Sanofi, in this case, is better understood if s. 8 is examined in the context of the entire statutory scheme. I will provide a brief overview of the statutory scheme that gives rise to Apotex’s claim. Ms. Anne Bowes, the Director of the Office of Patented Medicines and Liaison Therapeutic Products Directorate, Health Canada, was helpful in explaining the operation of the applicable regulations and policies engaged on the facts of this case.
[15] Before a pharmaceutical company can market a prescription drug in Canada, it must comply with the provisions of the Food and Drug Regulations, CRC, c 870 [F&D Regulations]. Section C.08.002 of the F&D Regulations provides, in part that:
(1) No person shall sell or advertise a new drug unless
(a) the manufacturer of the new drug has filed with the Minister a new drug submission, an extraordinary use new drug submission, an abbreviated new drug submission or an abbreviated extraordinary use new drug submission relating to the new drug that is satisfactory to the Minister;
(b) the Minister has issued, under section C.08.004 or C.08.004.01, a notice of compliance to the manufacturer of the new drug in respect of the submission;
(1) Il est interdit de vendre ou d’annoncer une drogue nouvelle, à moins que les conditions suivantes ne soient réunies :
a) le fabricant de la drogue nouvelle a, relativement à celle-ci, déposé auprès du ministre une présentation de drogue nouvelle, une présentation de drogue nouvelle pour usage exceptionnel, une présentation abrégée de drogue nouvelle ou une présentation abrégée de drogue nouvelle pour usage exceptionnel que celui-ci juge acceptable;
b) le ministre a délivré au fabricant de la drogue nouvelle, en application des articles C.08.004 ou C.08.004.01, un avis de conformité relativement à la présentation;
[16] As provided for in s. C.08.002(1)(a) of the F&D Regulations, anyone who wishes to sell a drug in Canada must submit, to the Minister of Health (through Health Canada), either a new drug submission (NDS) or an abbreviated new drug submission (ANDS). An NDS is filed by an innovative drug company, or “first person”, seeking approval to market a new drug product. In contrast and in very general terms, an ANDS is filed by a generic manufacturer, or “second person”, that wishes to market a generic version of a drug that has already been approved. The second person may rely on much of the technical, health and safety information originally filed as part of the NDS by the first person. In other words, it may compare its drug with, or make reference to, a brand name drug (F&D Regulations, above at s. C.08.002.1.(1)).
[17] An essential element of the regulatory scheme is the “Patent Register”. The PM (NOC) Regulations allow an innovator who has filed an NDS or a supplement to a new drug submission (SNDS) to submit a list of the associated patents to the Minister of Health (Minister) for inclusion on the register of patents (Patent Register or Register) (s. 4(1)). The Regulations require that the Minister maintain a register of all listed patents (s. 3(2)). Subsections 4(2) and (3) of the Regulations describe the eligibility requirements for listing.
[18] If a patent is listed on the Patent Register, s. 5 of the PM (NOC) Regulations provides that the second person, with respect to each patent on the Patent Register, must, in its application for an NOC:
· state that it accepts that the NOC will not issue until the patent expires (s. 5(1)(a)); or
· allege that:
o the first person is not the patentee or licensee of the listed patent (s. 5(1)(b)(i));
o the patent has expired (s. 5(1)(b)(ii));
o the patent is not valid (s. 5(1)(b)(iii)); or
o the second person will not infringe the listed patent (s. 5(1)(b)(iv)).
The second person identifies its election on the Form V submitted with its application.
[19] If a second person alleges that an NOC should issue in spite of the listed patents, it must serve a notice of allegation on the first person (Regulations, above at s. 5(3)). The first person may, within 45 days after service, apply to the Federal Court for an order prohibiting the Minister from issuing an NOC until the expiration of a patent that is the subject of the notice of allegation (Regulations, above at s. 6(1)).
[20] The specific circumstances during which the Minister may not issue the NOC are dealt with in s. 7(1) of the PM (NOC) Regulations. Of relevance to these proceedings, the Minister may not issue an NOC to a second person before the latest of:
· the day on which the second person complies with the requirements of s. 5 (s. 7(1)(b));
· the expiration of any patent on the Register that is not the subject of an allegation (s. 7(1)(c));
· the expiration of 45 days after the receipt of proof of service of a notice of allegation under paragraph 5(3)(a) in respect of any patent on the Register (s. 7(1)(d));
· the expiration of 24 months after the receipt of proof of the making of any application under s. 6(1) (s. 7(1)(e)); and
· the expiration of any patent that is the subject of an order of prohibition pursuant to s. 6(1) (s. 7(1)(f)).
[21] Regardless of the election made by a second person under s. 5(1) of the Regulations, Health Canada will process the application for all health and safety considerations and will assign a drug identification number (DIN) (F&D Regulations, above at s. C.01.014.2.(1)). However, no NOC will be issued until the relevant patents on the Patent Register either expire (assuming an election to await expiry) or until all such patents have been addressed through the PM (NOC) Regulations process. The day on which a generic drug product would have otherwise received its NOC is called the “patent hold date”.
[22] The 24 months referred to in s. 7(1)(e) of the Regulations is referred to as a “statutory stay” or “automatic stay”; the Minister is enjoined for a period of up to 24 months from issuing the NOC while the first person pursues its rights in the Federal Court.
[23] After hearing the application, the court may dispose of an innovator’s prohibition application in several ways. First, if the court finds that none of the generic’s allegations are justified, it must issue an order prohibiting the Minister from issuing an NOC to the generic (Regulations, above at s. 6(2)). In that case, the generic will not receive its NOC until patent expiry (unless the decision of the Federal Court is overturned on appeal).
[24] Alternatively, the court may dismiss the innovator’s application in whole or in part (Regulations, above at s. 6(5)), or the application may be withdrawn or discontinued by the first person. If an application is dismissed, withdrawn, or discontinued, the generic will quickly receive its NOC. Most relevant to this case, the generic will also be able to invoke s. 8 of the Regulations. Section 8 allows a generic to bring an action against an innovator for compensation for the period it was kept off the market as a result of the innovator’s unsuccessful prohibition application.
[25] The full text of s. 8 is set out below:
8. (1) If an application made under subsection 6(1) is withdrawn or discontinued by the first person 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 is liable to the second person 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.
(2) A second person may, by action against a first person, apply to the court for an order requiring the first person to compensate the second person for the loss referred to in subsection (1).
(3) The court may make an order under this section without regard to whether the first person has commenced an action for the infringement of a patent that is the subject matter of the application.
(4) If a court orders a first person to compensate a second person 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.
(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 or second person which contributed to delay the disposition of the application under subsection 6(1).
(6) The Minister is not liable for damages under this section.
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 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 est responsable envers la seconde personne 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) La seconde personne peut, par voie d’action contre la première personne, demander au tribunal de rendre une ordonnance enjoignant à cette dernière de lui verser une indemnité pour la perte visée au paragraphe (1).
(3) Le tribunal peut rendre une ordonnance aux termes du présent article sans tenir compte du fait que la première personne a institué ou non une action en contrefaçon du brevet visé par la demande.
(4) Lorsque le tribunal enjoint à la première personne de verser à la seconde personne 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) 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 ou de la seconde personne qui a contribué à retarder le règlement de la demande visée au paragraphe 6(1).
(6) Le ministre ne peut être tenu pour responsable des dommages-intérêts au titre du présent article.
B. Ramipril patents
[26] Sanofi, either as patentee or licensee, holds the rights to a series of Canadian patents that include claims to ramipril or its uses. The initial patent was Canadian Patent No. 1,187,087 (the '087 Patent), a product-by-process patent for ramipril, issued May 14, 1985. The '087 Patent was set to expire on May 14, 2002, after 17 years of patent protection. Sanofi, in efforts to extend patent protection for ramipril, proceeded to obtain a further series of patents and protect those patents through listings on the Patent Register. Sanofi describes these subsequent patents and the measures it took, through litigation and under the PM (NOC) Regulations, as “Altace Lifecycle Management” (Exhibit 89, Tab 373 at 23). Others – including generic manufacturers – have referred to the subsequent patents as “evergreening”.
[27] The following chart describes those subsequent patents involving ramipril or its uses and identifies when each patent was listed on the Patent Register:
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
[28] The '549 and '387 Patents are referred to, collectively, as the HOPE Patents after the Heart Outcomes Prevention Evaluation study (HOPE study), discussed in more detail below.
C. Apotex’s regulatory submissions and litigation
[29] Between July 2003 and May 2008, Apotex was continuously engaged in litigation under the PM (NOC) Regulations with respect to ramipril. The chart that follows describes this history:
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 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 [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)]
[30] Even though Justice Mactavish, in Ramipril NOC #1 (FC), dismissed Sanofi’s Notice of Application in respect of the '206 Patent, there were other patents on the Patent Register that needed to be addressed before an NOC could be issued to Apotex. In particular, Apotex had to clear the hurdles caused by Sanofi’s decision to commence prohibition proceedings with respect to the '457, '089, '948, '549 and '387 Patents.
[31] Ultimately, and as a result of the decision of the Supreme Court of Canada in AstraZeneca Canada lnc v Canada (Minister of Health), 2006 SCC 49, [2006] 2 SCR 560 [AstraZeneca (SCC)], the Minister of Health determined that Apotex did not need to address the HOPE Patents. An NOC was issued to Apotex on December 12, 2006.
[32] The following day, Sanofi filed an application for judicial review (T‑2196-06), seeking, among other things, an order quashing the decision to issue an NOC to Apotex, an order prohibiting the issuance of an NOC to Apotex, a declaration that the Minister had misinterpreted AstraZeneca (SCC) and s. 5(1) of the PM (NOC) Regulations, and an interim order pursuant to s. 18.2 of the Federal Courts Act, RSC 1985, c F-7, staying the effect of the decision to issue the NOC. In an Interlocutory Order dated December 29, 2006, Justice von Finckenstein granted the stay. The Order stayed the operation of the NOC and required Apotex and the Minister to comport themselves as if the NOC had not been issued. A stay of Justice von Finckenstein’s Order was granted on January 8, 2007 by the Court of Appeal (Sanofi-Aventis Canada Inc v Apotex Inc, 2007 FCA 7, 54 CPR (4th) 402), thereby removing any impediment to the operation of the NOC which had issued on December 12, 2006. Other than the short period between Justice von Finckenstein’s Order on December 29, 2006 and the Court of Appeal’s stay of that Order on January 8, 2007, Apotex’s NOC has been in full force and effect since December 12, 2006.
[33] At the end of the litigation, Sanofi was only ever successful in one proceeding; that is, Ramipril NOC #2 (FC), where Justice Simpson issued an Order of Prohibition to be in force until the expiry of the '457 Patent. Apotex commenced an appeal of that decision (Court of Appeal File No. A-494-05), which appeal was discontinued on October 13, 2006.
[34] To provide a complete picture, it should be noted that Apotex was not the only company challenging the “evergreening patents”; beginning in February 2003 and continuing up to December 2006, Pharmascience, Riva, Teva, Cobalt Pharmaceuticals Inc. (Cobalt) and Sandoz Canada Inc. served notices of allegation. In each and every case, except for Cobalt’s notice of allegation in August 2006, Sanofi chose to commence prohibition applications under the Regulations.
[35] After its loss in Ramipril NOC #1 (FC), Sanofi commenced an action against Apotex claiming that Apotex had infringed the '206 Patent (Court File No. T-161-07). In a decision dated June 29, 2009, this Court dismissed the action and a companion action against Teva (then Novopharm Inc.), in Court File No. T-1161-07, and declared the '206 Patent to be invalid (Sanofi-Aventis Canada Inc v Apotex Inc, 2009 FC 676, 350 FTR 165). This decision was affirmed by the Court of Appeal (Sanofi-Aventis Canada Inc v Apotex Inc, 2011 FCA 300, 426 NR 196). At the time of writing, Sanofi’s application for leave to appeal to the Supreme Court of Canada remains pending.
[36] This discussion of the statutory framework, the ramipril patents and the relevant NOC proceedings forms the context for these Reasons for Decision.
V. Relevant Period
[37] A critical determination for the Court is the commencement and end dates of the Relevant Period. The parties do not agree on either the beginning or the end date for the Relevant Period.
A. Commencement date
[38] As set out in s. 8(1)(a) of the PM (NOC) Regulations, a first person (Sanofi) is liable to a second person (Apotex) 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
. . .
(ii) a date other than the certified date is more appropriate …
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 :
. . .
(ii) soit qu’une date autre que la date attestée est plus appropriée;
[39] In Alendronate (FC), above at paragraphs 106-116, Justice Hughes explained that s. 8 thus gives the Court discretion to select a more appropriate date for the beginning of the liability period, although the presumptive period begins on the patent hold date.
[40] Here, the parties appear to agree that “the date, as certified by the Minister, on which a notice of compliance would have been issued” is April 26, 2004. This patent hold date is set out in a letter dated April 29, 2004 from Health Canada to Apotex (Exhibit 1, Tab 2). Apotex submits that this should be the date used for the commencement of the Relevant Period. Sanofi disagrees, arguing that December 13, 2005 is the appropriate date for the commencement of the Relevant Period.
[41] Sanofi’s argument is founded on the existence of a Prohibition Order of Justice Simpson arising from her decision in Ramipril NOC #2 (FC). The Prohibition Order prohibited the Minister from issuing an NOC to Apotex until the expiry of the '457 Patent. Since the application upon which the Prohibition Order was based was never withdrawn, discontinued, dismissed or reversed on appeal, Sanofi claims that Apotex cannot allege that it has a s. 8 claim in respect of this application. Sanofi’s principal argument is that I cannot ignore the Prohibition Order. Based on that Order, regardless of what transpired with respect to other notices of application, Apotex would not have been able to come to market until December 13, 2005, when the '457 Patent expired.
[42] I do not accept Sanofi’s arguments on this point. In light of the subsequent decision of Justice Tremblay-Lamer in Ramipril NOC #3 (FC), the Prohibition Order of Justice Simpson had, in my view, no effect on either the issuance of an NOC to Apotex or Apotex’s s. 8 claim. This is due to the unusual facts of this case.
[43] As set out above, Apotex served a first notice of allegation with respect to the '457 Patent, alleging non-infringement, in August 2003. In response, Sanofi commenced a prohibition application in Court File No. T-1851-03. On October 6, 2005, in Ramipril NOC #2 (FC), Justice Simpson found that Apotex’s allegation of non-infringement was not justified and issued the Prohibition Order, prohibiting the Minister from issuing an NOC to Apotex until after the expiry of the '457 Patent. Apotex commenced an appeal of Justice Simpson’s Order, but abandoned it in October 2006, following the expiry of the '457 Patent.
[44] In November 2003, Apotex served a second notice of allegation with respect to the '457 Patent, this time alleging invalidity. On December 29, 2003, Sanofi commenced a prohibition application in Court File No. T‑2459-03. On November 4, 2005, in Ramipril NOC #3 (FC), Justice Tremblay-Lamer dismissed Sanofi’s application, concluding that Apotex’s invalidity allegation based on obviousness was justified. Sanofi appealed.
[45] The '457 Patent then expired, and Apotex moved to dismiss Sanofi’s appeal on the ground of mootness. Apotex’s arguments found favour with the Court of Appeal which, in Aventis Pharma Inc v Apotex Inc, 2006 FCA 328, 354 NR 316 [Ramipril NOC #3 (FCA)], dismissed the appeal as moot. Moreover, the Court of Appeal refused to exercise its discretion to hear the appeal in any event, because Sanofi had failed to show that the decision would have any practical effect.
[46] In support of its assertion that Apotex could not have entered the market prior to the expiration of the '457 Patent, Sanofi relies on the words of the Court of Appeal in Ramipril NOC #3 (FCA), above at paragraph 20, where the court stated, “Simpson J.’s prohibition order has remained in effect until the expiration of the '457 patent”. Sanofi’s reliance on this sentence, however, ignores the context of that decision. Apotex brought its motion to dismiss Sanofi’s appeal after the expiry of the '457 Patent. In Ramipril NOC #3 (FCA), the court was not asked to rule on whether the Prohibition Order was enforceable or of practical effect before the expiry of the '457 Patent, because of Justice Tremblay-Lamer’s decision in Ramipril NOC #3 (FC). When the Court of Appeal stated that the Prohibition Order “remained in effect”, it was not expressing any opinion on the enforceability of the Order after the decision in Ramipril NOC #3 (FC). That is the precise question before me.
[47] In my view, the second '457 Patent decision in Ramipril NOC #3 (FC) effectively “unlocked” the door for Apotex to receive an NOC vis-à-vis that particular patent. The logical result was that the first decision was subsumed or “trumped” by the second. As of the decision of Justice Tremblay-Lamer, Apotex had addressed the '457 Patent; the Prohibition Order of Justice Simpson was no longer enforceable or of any practical effect.
[48] Stated differently, although Justice Simpson’s Prohibition Order regarding Apotex’s allegation of non-infringement of the '457 Patent was neither a nullity nor void ab initio, as a result of Justice Tremblay-Lamer’s subsequent finding that Apotex’s allegation of invalidity was justified, the Prohibition Order nonetheless could not be acted upon. In particular, it cannot be used as a basis for holding that Apotex could not have entered the market until after the expiry of the '457 Patent.
[49] The logic of this result is reinforced when one considers what the outcome would have been if Apotex had served one notice of allegation raising both its non-infringement and invalidity allegations. Had that happened, a court would have likely found that:
· the allegation of non-infringement was not justified (as Justice Simpson found); and
· the allegation of invalidity was justified (as Justice Tremblay-Lamer concluded).
Even though Apotex would likely have been unsuccessful on one of its allegations, Sanofi’s Application would have been dismissed. There would have been no Prohibition Order.
[50] There is