Sanofi-Aventis Canada Inc. v. Teva Canada Limited

Sanofi-Aventis Canada Inc. v. Teva Canada Limited
Court (s) Database
Federal Court Decisions
Date
2012-05-23
Neutral citation
2012 FC 552
File numbers
T-1161-07
Notes
Digest
Decision Content
Federal Court
Cour fédérale
Date: 20120523
Docket: T-1161-07
Citation: 2012 FC 552
BETWEEN:
SANOFI-AVENTIS CANADA INC., SCHERING CORPORATION and
SANOFI-AVENTIS DEUTSCHLAND GmbH
Plaintiffs
and
TEVA CANADA LIMITED
Defendant
AND BETWEEN
TEVA CANADA LIMITED
Plaintiff by Counterclaim
and
SANOFI-AVENTIS CANADA INC., SCHERING CORPORATION and
SANOFI-AVENTIS DEUTSCHLAND GmbH
Defendants by Counterclaim
PUBLIC REASONS FOR JUDGMENT
(Confidential Reasons for Judgment released May 11, 2012)
SNIDER J.
I. Introduction
[1] Teva Canada Limited (Teva), the Plaintiff by Counterclaim 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 by Counterclaim in this action, holds or has held patent rights to a brand-name version of ramipril – ALTACE.
[2] In spite of the fact that Teva (or its predecessors in interest) received certain regulatory approvals from Health Canada in 2003, it was unable to commence sales of ramipril until May 2, 2007, when it received its Notice of Compliance (NOC) from Health Canada, 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 Teva. Teva claims that Sanofi and Sanofi-Aventis Deutschland GmbH (Sanofi Germany) are liable to Teva for the loss it suffered during the period from July 18, 2003 to April 27, 2007, as provided for in s. 8(1) of the PM (NOC) Regulations.
[3] Subject to validity issues raised in its pleadings, Sanofi acknowledges and accepts that Teva is entitled to damages under s. 8. However, Sanofi disputes many elements of Teva’s claim, including: (a) the relevant dates for computing the loss; and (b) various assumptions and projections built into the assessment of damages.
[4] Sanofi’s claim of invalidity of s. 8 of the Regulations was separately argued in a hearing involving this and similar issues in Court File No. T-1357-09 (Apotex Inc v Sanofi-Aventis, Sanofi-Aventis Deutschland GmbH and Sanofi-Aventis Canada Inc). Separate Reasons have been rendered in respect of the validity issues (see 2012 FC 551). Moreover, by Order of Prothonotary Milczynski, dated August 15, 2011, all of the claims of Teva with respect to Sanofi Germany have been bifurcated. Thus, these Reasons do not include a consideration of either the invalidity claims of Sanofi or Teva’s claims against Sanofi Germany.
[5] My overarching objective is to assess the amount of compensation to be awarded to Teva. 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 Teva 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 is to examine 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.
[6] 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) cannot begin before the date upon which a statutory stay provided for in s. 6 of the Regulations commences and, on the particular facts of this case, a more appropriate commencement date is December 13, 2005. The Relevant Period is therefore December 13, 2005 to April 27, 2007.
2. The Court should have regard to the possibility of multiple market entrants during the Relevant Period, leading to a result, on the facts of this case, that it is more likely than not, that both Apotex Inc. (Apotex) and a generic manufacturer sanctioned by Sanofi (known as an authorized generic, or AG) would have entered the generic ramipril market on or about December 13, 2005.
3. In assessing Teva’s damages, no regard should be had to: (a) “lost business value” calculated as of the final day of the Relevant Period and based on future lost profits to Teva; or (b) “duplicate ramp-up”.
[7] This case was one of three s. 8 damages actions brought against Sanofi by generic manufacturers with respect to ramipril. This was the first action heard. The second action is Apotex Inc v Sanofi-Aventis, Sanofi-Aventis Deutschland GmbH and Sanofi-Aventis Canada Inc. (Court File No. T-1357-09). The trial of that action took place before me after the conclusion 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 has yet to take place.
[8] I have set out a brief overview of the many fact and expert witnesses who appeared during the 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. Contents
[9] To assist the reader, I am including an outline of these Reasons. The paragraph number for the beginning of each noted section is set out below:
I. Introduction ............................................................................... [1]
II. Contents ............................................................................... [9]
III. Issues ............................................................................. [10]
IV. Essential Background ............................................................................. [12]
A. Statutory framework under the PM (NOC) Regulations................ [13]
B. Corporate background.................................................................. [27]
C. Ramipril patents............................................................................ [30]
D. Teva’s regulatory submissions and litigation.................................... [33]
V. Relevant Period ............................................................................. [36]
A. Can the Relevant Period begin prior to the imposition of the 24‑month statutory stay? [44]
B. What is the appropriate commencement date for the Relevant Period?.................... [61]
VI. Overall Size of the Ramipril Market........................................................... [77]
VII. Size of the Generic Market........................................................................ [93]
VIII. Teva’s Lost Volumes ........................................................................... [107]
A. Should the assessment be made on the basis that Teva would be the sole generic in the “but for” world? [113]
B. Should the assessment be made on the basis that there is only
one “but for” world?.................................................................... [124]
C. What other generics would have entered the market? .................. [131]
(1) Burden ........................................................................... [132]
(2) Apotex ........................................................................... [143]
(3) Riva ........................................................................... [164]
(4) Authorized generic.......................................................... [172]
(a) The inclusion of an AG in the “but for”
world.................................................................. [176]
(b) Decision to launch an AG.................................... [185]
(c) Timing of AG launch............................................ [196]
(d) Teva’s Lost Volumes.......................................... [209]
IX. Teva’s Net Lost Profits [221]
A. Sanofi’s motion to strike.............................................................. [225]
(1) Lost business value.......................................................... [241]
(2) Duplicate ramp-up adjustment......................................... [250]
(3) Conclusion on lost business value and duplicate
ramp-up ......................................................................... [254]
B. Pricing over the Relevant Period ................................................. [255]
C. Trade spend ........................................................................... [269]
D. Price of the active pharmaceutical ingredient ................................ [277]
E. Indirect losses .......................................................................... [283]
(1) Lost profits on sales of other Teva products..................... [284]
(2) Lost indirect profits......................................................... [288]
F. Pre-judgment interest.................................................................. [295]
G. HOPE indications........................................................................ [301]
X. Conclusion ........................................................................... [323]
Appendix A- List of Witnesses
III. Issues
[10] In general terms, the assessment of Teva’s damages involves five steps:
1. determine the duration of 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 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 Teva (Teva’s Lost Volumes); and
5. quantify the damages that would have been suffered by Teva in respect of Teva’s Lost Volumes during the Relevant Period (Teva’s Net Lost Profits).
[11] 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 period for which losses can be claimed by a second person under s. 8 of the Regulations? Given that the parties are agreed that the Relevant Period ends on April 27, 2007, the remaining sub-issues related to the Relevant Period are:
a. Can the Relevant Period begin on the date when the second person would have received its NOC, even where that event occurred prior to the service of a notice of allegation and imposition of the statutory stay contemplated by the Regulations?
b. On the facts of this case, is the appropriate date for the commencement of the Relevant Period:
i) July 18, 2003, when Teva received its drug identification numbers (DINs) for ramipril from Health Canada;
ii) October 14, 2003, the date Health Canada’s review of Teva’s drug submission was completed and Teva 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 9, Tab 8);
iii) October 31, 2005, the date Sanofi served and filed a Notice of Application in respect of a notice of allegation served by Teva on September 12, 2005, thereby triggering the statutory stay provided for in s. 7(1)(e) of the Regulations; or
iv) December 13, 2005, the date of expiry of the '457 Patent, which was the subject of the patent hold referred to in ii) above?
2. What would have been the size of the Ramipril Market over the Relevant Period?
3. How much of the overall Ramipril Market in the Relevant Period would have been captured by the generic participants?
4. What would have been Teva’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 Teva’s compensation to be assessed on the basis that the second person would be the sole generic supplier on the market for the entire Relevant Period? Alternatively, 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 Apotex, 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 Teva have captured during the Relevant Period (i.e. Teva’s Lost Volumes)?
5. Based on my finding as to Teva’s Lost Volumes, what is Teva’s Net Lost Profits, having regard to:
a. the admissibility of evidence of Teva’s “lost business value” and “second ramp-up” as set out in the report of Teva’s expert witness, Ms. Suzanne Loomer, as losses that were not “suffered during the period” as contemplated by s. 8(1) of the Regulations;
b. the pricing of Teva’s ramipril during the Relevant Period, having regard to the provincial formularies;
c. likely trade spend (including discounts and allowances) that would have been paid by Teva to pharmacists to stock Teva’s ramipril;
d. likely price of the active pharmaceutical ingredient (API) for ramipril;
e. the reasonableness and quantification of any indirect losses, such as the loss of sales of other products; and
f. the appropriate calculation of pre-judgment interest?
6. 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
[12] This action involves a complex statutory framework and a complicated set of facts. For ease of reference, I attempt to summarize the statutory framework and the most relevant (and undisputed) background facts related to the corporate identity of the parties, Sanofi’s patents for ALTACE, and Teva’s regulatory and litigation history on ramipril.
A. Statutory framework under the PM (NOC) Regulations
[13] This action arises solely out of the operation of the PM (NOC) Regulations. Quite simply, Teva 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 generally, 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 PM (NOC) Regulations remains a valuable tool. Rather than restate this history, I commend the identified passages to the reader.
[14] The damages suffered by Teva 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 Teva’s claim. Ms. Anne Bowes, the director of the Office of Patented Medicines and Liaison of 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] to obtain a Notice of Compliance (NOC). 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. As accepted by everyone, the election can be changed at any time.
[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)). This action triggers a “statutory stay” (also referred to as an “automatic stay”) which remains in place for up to 24 months (Regulations, above at s. 7(1)(e)).
[20] The specific circumstances in which the Minister may not issue an 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 s. 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 DIN (F&D Regulations, above at s. C.01.014.2(1)). However, no NOC will issue until the relevant patents on the Register either expire or 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] At that stage, except for the completion of any proceedings under the Regulations, the NOC is ready for issuance. As stated by Ms. Bowes “. . . the NOC itself, full package is in the file cabinet waiting for its turn to go back out the door”.
[23] As noted, the service of a Notice of Application triggers the statutory stay. After hearing the application, the court may dispose of the 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 receive its NOC almost immediately. 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.
[26] This then is the context for these Reasons.
B. Corporate background
[27] The Plaintiff by Counterclaim, Teva, is an Ontario corporation and a manufacturer, vendor, and distributor of pharmaceutical products. Prior to February 16, 2010, Teva was known as Novopharm Limited (Novopharm). Teva’s Israeli parent company, Teva Pharmaceutical Industries (Teva Israel), purchased Novopharm in April of 2000. Teva amalgamated with Ratiopharm Canada Inc. and Ratiopharm Inc. (ratiopharm) on August 10, 2010.
[28] Throughout these Reasons for Judgment, the name “Teva” will be used to refer to either Teva or Novopharm, unless the context requires greater specificity. Teva’s ramipril product, however, will be called “Novo-ramipril”, as that was the product’s initial name.
[29] The Defendant by Counterclaim, Sanofi, is a Quebec corporation and a manufacturer, vendor and distributor of pharmaceutical products. Sanofi has several corporate predecessors, including Hoechst Marion Roussel Canada Inc., Rhône-Poulenc Rorer Canada Inc., and Aventis Pharma Inc. The name “Sanofi” will be used in these Reasons to refer to Sanofi and its corporate predecessors, unless the context suggests otherwise.
C. Ramipril patents
[30] 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 originally 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 to protect those patents through listings on the Patent Register. Sanofi describes these subsequent patents and the measures it took, through litigation under the PM (NOC) Regulations, as “product life cycle management”. Others – including generic manufacturers – have referred to the subsequent patents as “evergreening”.
[31] The following chart describes the 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
The product ramipril
2,055,948 (the '948 Patent)
November 12, 2002
June 25, 2004
Use of ramipril together with a calcium antagonist for the prevention and treatment of proteinuria
2,023,089 (the '089 Patent)
January 14, 2003
November 1, 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 for the prevention of stroke, diabetes and/or congestive heart failure.
[32] 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.
D. Teva’s regulatory submissions and litigation
[33] The following chart summarizes the steps involved in the approval of Novo-ramipril.
DATE
EVENT
December 24, 2001
Teva files ANDS for Novo-ramipril capsules. The ANDS include Form Vs, stating Teva would await expiry of the '087, '206 and '457 Patents
July 18, 2003
Teva obtains DINs for Novo-ramipril 2.5, 5 and 10 mg capsules
October 14, 2003
Teva is placed on “patent hold”
September 12, 2005
Notice of allegation #1 – '206 Patent
September 14, 2005
Notice of allegation #2 – '089, '948, '549 and '387 Patents
October 31, 2005
Sanofi files a Notice of Application with respect to notice of allegation #1 (Court File No. T-1965-05)
November 2, 2005
Sanofi files a Notice of Application with respect to notice of allegation #2 (Court File No. T-1979-05)
December 13, 2005
'457 Patent expires
September 25, 2006
Federal Court dismisses T-1965-05 “as an abuse of process”
(Sanofi-Aventis Canada Inc v Novopharm Limited , 2006 FC 1135, 306 FTR 56)
December 8, 2006
The Minister of Health advises that Teva was required to address the '089 and '948 Patents, but not the '549 and '387 Patents
December 15, 2006
Teva withdraws, without prejudice, portionsof notice of allegation #2 relating to the '549 and '387 Patents
April 27, 2007
Federal Court of Appeal dismisses T-1979-05 (notice of allegation #2) as an abuse of process (Sanofi-Aventis Canada Inc v Novopharm Ltd, 2007 FCA 167, rev’g 2006 FC 1547)
May 2, 2007
Teva receives an NOC for Novo-ramipril 2.5, 5 and 10 mg capsules
[34] To provide a complete picture, it should be noted that Teva was not the only company challenging the “evergreening patents”; beginning in February 2003 and continuing up to December 2006, Pharmascience, Riva, Apotex, Cobalt Pharmaceuticals Inc. (Cobalt) and Sandoz Canada Inc. (Sandoz) also served notices of allegation. In each and every case, except for Cobalt’s August 2006 notice of allegation, Sanofi chose to bring prohibition applications under the Regulations.
[35] Following the issuance of Teva’s NOC, Sanofi commenced an action against Teva claiming that Teva had infringed the '206 Patent (Court File No. T-1161-07). In a decision dated June 29, 2009, this Court dismissed that action and a companion claim against Apotex in Court File No. T-161-07, and declared the '206 Patent to be invalid (Sanofi-Aventis Canada Inc v Apotex Inc, 2009 FC 676, 350 FTR 165). That 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.
V. Relevant Period
[36] Section 8 allows a second person to claim compensation for the losses it suffered because it was kept off the market during the period of the automatic stay (Alendronate (FC), above at para 97; Alendronate (FCA), above at para 71). A critical determination for the Court is thus the commencement and end dates of the period of liability, defined in these Reasons as the Relevant Period. The parties agree that the end date for the Relevant Period is April 27, 2007. There is no agreement on the appropriate commencement date.
[37] As set out in s. 8(1)(a) of the PM (NOC) Regulations, a first person (Sanofi) is liable to a second person (Teva) 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;
[38] 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.
[39] 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 October 14, 2003. This date is set out in a letter dated October 17, 2003 from Health Canada to Teva.
[40] In spite of the certification date, each of Sanofi and Teva argues that I should find a different date for the commencement of the Relevant Period. Teva urges me to find a commencement date of July 18, 2003 or, at least no later than August 1, 2003, while Sanofi asserts that the Relevant Period should not begin until December 13, 2005. From the evidence before me, it appears that the following dates should be considered as possible commencement dates:
1. July 18, 2003, when Teva received its DINs for ramipril from Health Canada;
2. October 14, 2003, when Health Canada completed its review of Teva’s drug submission and Teva was advised that an NOC would not issue until the requirements of the Regulations were met;
3. October 31, 2005, when Sanofi served and filed a Notice of Application in respect of a notice of allegation served by Teva on September 12, 2005, thereby triggering the statutory stay provided for in s. 7(1)(e) of the Regulations; and
4. December 13, 2005, the date of expiry of the '457 Patent, which was the subject of the patent hold referred to in 2 above.
[41] Teva submits that, but for the Regulations, an NOC would have been issued to it soon after July 18, 2003, when it received its DINs for Novo-ramipril 2.5, 5 and 10 mg capsules. As of that date, Teva had satisfied all of the clinical and manufacturing requirements set out in the F&D Regulations. As adamantly stated by Mr. Windross, upon receipt of the DINs on July 18, 2003, Teva would have been “in a launch mode pending the receipt of the Notice of Compliance”. [Redacted] Thus, Teva asserts that either July 18, 2003 or – at the latest, August 1, 2003 – must be the beginning date contemplated by s. 8(1)(a) of the Regulations. In addition, Teva argues that at the very latest, the damages period should be calculated beginning on the certification date of October 14, 2003. As at any of those dates, in the absence of the Regulations, Teva argues that it would have been able to enter the market.
[42] I have no reason to doubt Teva’s submissions that it could have physically been prepared to launch Novo-ramipril in the 2.5, 5 and 10 mg strengths on or about August 1, 2003. The question, however, is whether that is the correct date for the assessment of damages under the PM (NOC) Regulations. In particular, Teva’s arguments must be considered in light of the fact that, as of Teva’s patent hold date, Teva had agreed, through its election in its Form V, to await the expiry of the '457 Patent. Moreover, the statutory stay did not begin until October 31, 2005, when Sanofi filed its first of two Notices of Application in response to Teva’s notices of allegation.
[43] This case thus presents the somewhat unusual situation in which the certified, or “patent hold” date precedes the beginning of the statutory stay. The first sub-issue related to the commencement date is accordingly whether the Relevant Period can begin prior to the statutory stay.
A. Can the Relevant Period begin prior to the imposition of the 24-month statutory stay?
[44] Whether the Relevant Period can begin prior to the imposition of the 24-month statutory stay is a question of statutory interpretation of the relevant provisions of the Regulations. Once this determination is made, the question that follows is to determine what would be the appropriate date for the beginning of the period.
[45] Teva’s argument for a date prior to both the certification date and the beginning of the statutory stay is premised on its claim that the start date must be determined “in the absence of these Regulations”. According to Teva, the consequence of these words is “that the second person’s losses are to be assessed on the basis it was able to come to market as soon as the health and safety review of its submission had been completed”. More specifically, Teva says that it means “the date on which the requirements of the Food and Drugs Act were complied with such that the second person would have received its NOC”. Teva asserts that factors such as the existence of patents on the Patent Register, Form Vs and the timing of notices of allegation are “irrelevant” in a world where there are no PM (NOC) Regulations. Teva submits that, in the absence of the Regulations, the Minister would have had a “legal duty” to issue its NOC as of July 18, 2003 (see Abbott Laboratories Ltd v Canada (Minister of Health), 2007 FC 622 at para 11, 57 CPR (4th) 450; Apotex Inc v Canada (Attorney General) (1993), [1994] 1 FC 742, [1993] FCJ No 1098 (CA)).
[46] Teva buttresses its contention that all aspects of s. 8 damages must be calculated “in the absence of [the] Regulations” with a number of arguments. In summary form, Teva points out that ss. 8(1)(a), 8(2), and 8(4) all refer to s. 8(1); and that Sanofi commenced proceedings in full knowledge of the fact that Teva had approval in July 2003, and thus knowingly accepted a “black box of liability”. Teva also stresses that s. 8 must have a deterrent effect, and alleges that Sanofi’s arguments “co-mingle” real events with the “but for” world.
[47] Teva expressly rejects the argument that the liability period cannot begin before the commencement of the statutory stay on the basis that such a position would require an impermissible “radical re-writing and reading in” of the Regulations. This, Teva says, is because the legislator clearly chose not to draft s. 8(1)(a) to provide that the liability begins on the later of the certification date or the date of the commencement of a prohibition application. While acknowledging that an