Merck wins C$180 million award against Apotex for patent infringement

Toronto, July 24, 2013 — McCarthy Tétrault is delighted that Merck succeeded in recovering more than C$180 million in damages and interest for Apotex’s infringement of Merck’s Canadian lovastatin patent, in Merck & Co. Inc. and Merck Canada Inc. v. Apotex Inc. et al. [2013] FC 751.

Merck is a multinational pharmaceutical company with corporate headquarters in Whitehouse Station, New Jersey. Lovastatin is a cholesterol-lowering medicine sold under Merck’s MEVACOR brand. The discovery of lovastatin enabled the development of other widely prescribed statins used in the treatment of cardiovascular disease.

The lovastatin case dates back to 1993, when Apotex, a Toronto-based generic drug manufacturer, undertook not to infringe Merck’s product-by-process patent for lovastatin, and subsequently moved its lovastatin production to Guangdong, China. Apotex began selling its generic version in 1997. In 2010, in Merck & Co v. Apotex Inc, 2010 FC 1265, the Federal Court found that the majority of the lovastatin manufactured or imported by Apotex had infringed Merck’s lovastatin patent. The evidence included fabricated testimony by witnesses in charge of Apotex’s Guangdong operation, circumstantial evidence of motive, means and opportunity to infringe, and DNA evidence that established use of the infringing microorganism. The Court ordered a trial to quantify Merck’s damages, which proceeded in April 2013 after the liability verdict had been upheld on appeal. In the end, the Federal Court released its public damages judgment on July 16, awarding Merck over C$180 million for Apotex’s infringement.

"We’re thrilled to have been able to help our client achieve this tremendous result," said David Leonard, McCarthy Tétrault’s head of Litigation. "This is a significant award — possibly the largest for patent damages in Canada to date."

"This decision also has legal and strategic importance," said litigator Andrew Reddon, who led the McCarthy Tétrault team representing Merck. "It clearly rejects the non-infringing alternative defence and recognizes that a reasonable royalty can be greater than an infringer’s willingness to pay. It also enhances recovery of pre-judgment interest. The Court awarded pre-judgment interest at 1% above the Bank Rate, which is significant given that the pre-judgment interest award spans almost 17 years."

Steven Mason, David Tait and Natacha Engel were the other members of McCarthy Tétrault’s trial team.

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