Teva Canada Limited v. Sanofi-Aventis Canada Inc.

Teva Canada Limited v. Sanofi-Aventis Canada Inc.
Court (s) Database
Federal Court of Appeal Decisions
Date
2014-03-14
Neutral citation
2014 FCA 67
File numbers
A-147-12
Decision Content
Date: 20140314
Docket: A-147-12
Citation: 2014 FCA 67
CORAM:
SHARLOW J.A.
DAWSON J.A.
MAINVILLE J.A.
BETWEEN:
TEVA CANADA LIMITED
Appellant
and
SANOFI-AVENTIS CANADA INC. and
SANOFI-AVENTIS DEUTSCHLAND GmbH
Respondents
Heard at Toronto, Ontario, on October 16 and 17, 2013.
Judgment delivered at Ottawa, Ontario, on March 14, 2014.
REASONS FOR JUDGMENT BY:
SHARLOW J.A.
CONCURRED IN BY:
DAWSON J.A.
DISSENTING REASONS BY:
MAINVILLE J.A.
Date: 20140314
Dockets: A-147-12
Citation: 2014 FCA 67
CORAM:
SHARLOW J.A.
DAWSON J.A.
MAINVILLE J.A.
BETWEEN:
TEVA CANADA LIMITED
Appellant
and
SANOFI-AVENTIS CANADA INC. and
SANOFI-AVENTIS DEUTSCHLAND GmbH
Respondents
REASONS FOR JUDGMENT
DISSENTING REASONS BY MAINVILLE J.A.
[1] These reasons concern an appeal (docket A-147-12) brought by Teva Canada Limited (“Teva”) and a cross-appeal brought by Sanofi-Aventis Canada Inc. and Sanofi-Aventis Deutschland GmbH (“Sanofi”) 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 552 and publicly released on May 23, 2012. The Liability Judgment ordered Sanofi to compensate Teva 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 2.5, 5 and 10 mg capsules of Teva’s generic version of ramipril during the period commencing December 13, 2005 and ending April 27, 2007.
[2] Teva sells a generic version of ramipril in Canada. Ramipril is a drug principally used to treat hypertension, but it also has other medical uses. Sanofi asserts patent rights to this drug and to some of its uses. 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, Teva could have received its NOC from the Minister of Health to market in Canada its generic version of ramipril earlier than it actually did. It was prevented from receiving its NOC at an earlier time because of various applications by Sanofi under subsection 6(1) of the NOC Regulations for various 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, will be liable to a third party, such as Teva, for any loss suffered for the delay as determined in accordance with the Regulations. Teva took the view that it was entitled to such compensation and, after a long trial, the Trial Judge agreed.
[4] The issues raised by this appeal principally concern the legal framework under which compensation may be determined under section 8 of the NOC Regulations. This is an issue which has never previously been fully addressed by our Court.
[5] In another judgment dated May 11, 2012 and issued for reasons cited as 2012 FC 551 (the “Validity Judgment”) 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 litigations were heard by the Trial Judge simultaneously, who then issued a single set of reasons. Sanofi appealed the Validity Judgment with respect to the Teva litigation in docket A-192-12. It also appealed the Validity Judgment with respect to Apotex. This Court has dismissed the appeals related to the Validity Judgment for reasons issued concurrently.
[6] It is useful to note that, concurrently with the Liability Judgment concerning Teva, the Trial Judge also issued another judgment respecting section 8 liability with respect to ramipril and involving Sanofi and Apotex cited as 2012 FC 553 (referred to herein as the “Apotex Liability Judgment (FC)”). Some of the issues raised in the Liability Judgment concerning Teva and in the Apotex Liability Judgment (FC) are similar. Moreover, this Court heard the appeal from the Apotex Liability Judgment (FC) two weeks after it heard this appeal involving Teva, and has issued its reasons for judgment with respect to that appeal concurrently with these reasons.
[7] There is also a related appeal involving Sanofi and Teva with respect to ramipril and concerning amendments to proceedings and to the striking out of evidence (docket A-460-11) which has been dealt with by this Court in reasons issued concurrently.
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 review of that framework follows.
[9] Prescription drugs present a particularly difficult regulatory challenge in light of the various public interest issues that 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 Canadian patients at prices that are affordable to 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 that 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 that must be followed by a manufacturer who wishes to introduce a new drug into the Canadian market.
[11] As a general rule, an innovator drug manufacturer must file a new drug submission with the Minister of Health 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 the drug is 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 of 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 includes so-called “generic” drug manufacturers who 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 with the Minister of Health an abbreviated new drug submission by which it compares its proposed “copy-cat” drug with a Canadian reference product, namely a drug in respect to 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 the drug is approved on the basis of the information provided, the Minister of Health then issues a NOC to the generic drug manufacturer in respect of 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 incur significant research and testing costs in relation to a copy-cat drug, they may sell that drug at a considerable discount on the market, at considerable savings to the Canadian public, but with significant impacts on the revenues and profits of the innovator drug manufacturer. However, innovator drug manufacturers are not without legal recourse against these generic 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 aiming 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 medications available to the public at the most affordable price, with rewarding the patentee for the research leading to the invention and other prescribed factors. 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 of 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 after 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 for 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 who files a submission for a NOC in respect of a drug (usually in the form of an abbreviated new drug submission) and who 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 that 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 which 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 the 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 drug manufacturer’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 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 relevant 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 Teva 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 that is principally used to treat hypertension, but whose medical use has expanded over the years to include heart related health issues following the publication of a “Heart Outcomes Prevention Evaluation” (“HOPE”) 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. 307. 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, including Teva, became interested in marketing their own generic versions of ramipril. 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 listings on the Patent Register”: Trial Judge’s Reasons at para. 30. Sanofi described these efforts as “product life cycle management”, while the generic manufacturers referred to these efforts 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 31 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
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.
The last two patents of this list, the ‘549 and ‘387 Patents, are referred to as the “HOPE patents”.
[28] The Trial Judge also provided, at paragraph 33 of her Reasons, a useful chart that briefly summarized the steps involved in the approval under the NOC Regulations of Teva’s generic version of ramipril. It is useful to reproduce this chart here:
DATE
EVENT
December 24, 2001
Teva files ANDS [abbreviated new drug submission] for [Teva]-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 [Teva]-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, portions of 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 [Teva]-ramipril 2.5, 5 and 10 mg capsules
[29] The Trial Judge also noted, at paras. 34 and 35 of her Reasons, that Teva was not the only generic drug manufacturer challenging these patents. Beginning in February 2003 and continuing up to December 2006, Pharmascience Inc., Laboratoire Riva Inc. (“Riva”), Apotex, Cobalt Pharmaceuticals Inc. and Sandoz Canada Inc. also served notices of allegation. In each and every case, except for Cobalt Pharmaceuticals Inc.’s August 2006 notice of allegation, Sanofi chose to bring prohibition applications under the NOC Regulations. Moreover, following the issuance of Teva’s NOC, Sanofi commenced an action in the Federal Court against Teva claiming that Teva had infringed the '206 Patent. In a decision dated June 29, 2009, the Federal Court dismissed that action and a companion claim against Apotex, and declared the '206 Patent to be invalid: Sanofi-Aventis Canada Inc. v. Apotex Inc, 2009 FC 676, 350 F.T.R. 165, aff’d 2011 FCA 300, 426 N.R. 196, leave to appeal to SCC dismissed, file 34325, [2011] 3 S.C.R. xi.
The Reasons of the Trial Judge
[30] The Trial Judge provided very detailed reasons reaching over 127 pages. The salient aspects of those reasons may be summarized as follows.
[31] Subject to the validity issues dealt with by the Trial Judge in the Validity Judgment, Sanofi acknowledged at trial that Teva was entitled to compensation pursuant to section 8 of the NOC Regulations: Trial Judge’s Reasons at para. 3. Consequently, the debate before the Trial Judge primarily concerned how such compensation was to be determined.
[32] 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 Teva. 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 Teva would have captured if it had been able to sell its generic ramipril” during that period: Trial Judge’s Reasons at para. 5 (emphasis in original).
Start and end dates of the section 8 liability period
[33] 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”.
[34] 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 section 8 liability period during which the compensation should be calculated in this case.
[35] The parties agreed that the end date for the section 8 liability period was April 27, 2007 when the Federal Court dismissed Sanofi’s prohibition proceedings with respect to Teva’s second notice of allegation: Trial Judge’s Reasons at para. 36.
[36] With respect to the commencement date, the Trial Judge noted that paragraph 8(1)(a) of the NOC Regulations establishes that it is “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 in this case agreed that the contemplated date was October 14, 2003, the so-called “patent hold” date: Trial Judge’s Reasons at para. 39.
[37] 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”. Both Teva and Sanofi submitted to the Trial Judge that she should exercise her discretion under that paragraph so as to set another commencement date. On the one hand, Teva urged that the commencement date be set at July 18, 2003, when it received its drug identification number (“DIN”) from Health Canada, on the ground that once this DIN was received, a NOC would have been issued to it soon thereafter. On the other hand, Sanofi rather urged that the date be set at December 13, 2005 when the ‘457 Patent expired.
[38] With respect to Teva’s submission, the Trial Judge noted that in its Form V submitted under the NOC Regulations, Teva had agreed to await the expiry of the ‘457 Patent before receiving its NOC. She also noted that Teva did not file notices of allegations until September of 2005. Consequently, the statutory stays resulting from Sanofi’s prohibition proceedings under the NOC Regulations did not begin until October 31, 2005. As a result, the Trial Judge noted (at para. 43 of her Reasons) that the case presented an unusual situation in which the “patent hold” date preceded the beginning of the statutory stay.
[39] The Trial Judge found, as a matter of law, that the start of the section 8 liability period cannot predate the start of the statutory stay provided for by the NOC Regulations: Trial Judge’s Reasons at para. 60. She reached that conclusion by relying on (a) the decisions of this Court in Apotex Inc. v. Merck & Co., 2011 FCA 329, 425 N.R. 279 at para. 75 (“Norfloxacin”) and in Alendronate at para. 71, (b) the Regulatory Impact Statement (“RIAS”) with respect to amendments to the NOC Regulations brought in 1993, 1998 and 2006, and (c) general principles of causality: Trial Judge’s Reasons at paras. 44 to 60.
[40] Given this finding of law, the Trial Judge then proceeded to determine whether the appropriate start date should be October 31, 2005 (the commencement of the statutory stay) or December 13, 2005 (the date of the expiry of the ‘457 Patent). Since Teva had indicated in its abbreviated new drug submission of December 24, 2001 that it would await expiry of the '087, '206 and '457 Patents, and since it did not submit any notice of allegation with respect to the patents listed for ramipril until September, 2005 and no such notice with respect to the ‘457 Patent, the Trial Judge found Teva’s actions consistent with a decision to await the expiry of that patent before launching its own generic version of ramipril: Trial Judge’s Reasons at paras. 61 to 66. The Trial Judge found that Teva was satisfied with awaiting the outcome of the prohibition proceedings involving ramipril and other generic drug manufacturers, and was by that fact somewhat bound by the decision of Simpson J. in Aventis Pharma Inc. v. Apotex Inc., 2005 FC 1381, 44 C.P.R. (4th) 90 which prohibited the Minister of Health from issuing a NOC to Apotex until the expiry of the ‘457 Patent on December 13, 2005: Trial Judge’s Reasons at paras. 67 to 70.
[41] The Trial Judge also considered the start date from the perspective of Teva’s behaviour in the hypothetical scenario of the total absence of the NOC Regulations. She found that in such a scenario, Teva’s behaviour was consistent with its decision not to challenge Sanofi’s ‘457 Patent under the Patent Act or to risk a patent infringement action under that patent prior to launching its own generic version of ramipril: Trial Judge’s Reasons at paras. 71 to 74.
[42] The Trial Judge accordingly concluded that the appropriate start date for the section 8 liability period was December 13, 2005, the date of the expiry of the ‘457 Patent: Trial Judge’s decision at para. 75. She added that she would have reached the same conclusion even if she had found that the NOC Regulations allowed for the section 8 liability period to start prior to the start of the statutory stay: Trial Judge’s Reasons at para. 76.
The hypothetical ramipril market
[43] Having determined the relevant section 8 liability period, the Trial Judge proceeded to assess Teva’s loss of profits during that period by (a) estimating the size of the total ramipril market during the period; (b) estimating the portion of the ramipril market that would have been acquired by generic drug manufacturers during the period; and c) estimating the share of that generic market which would have accrued to Teva.
[44] Based on the expert reports and the evidence submitted, the Trial Judge adopted the analysis of Dr. Carbone to quantify both the size of the ramipril market (Trial Judge’s Reasons at paras. 77 to 92) and of the generic market (Trial Judge’s Reasons at paras. 93 to 105) during the section 8 liability period.
[45] One difficult question for the Trial Judge concerned the determination of the generic ramipril market during the section 8 liability period, and particularly whether that market should be assessed on the basis of one “but for” world.
[46] Teva submitted to the Trial Judge that, as a matter of law and principle, it should be considered as the only generic manufacturer of ramipril during the section 8 liability period: Trial Judge’s Reasons at para. 110. On the other hand, Sanofi submitted that other generic manufacturers should be considered within a single “but for” world that should apply to all claims of all concerned generic drug manufacturers under section 8 of the NOC Regulations: Trial Judge’s Reasons at para. 111.
[47] The Trial Judge rejected Teva’s submission on the ground that it ignored (a) principles of causation, (b) the clear wording