Ontario Court of Appeal Dismisses Apotex’s Novel Patent Damages Appeal
On August 16, 2022, the Ontario Court of Appeal (“ONCA”) dismissed Apotex’s appeal claiming novel damages claims in a “protracted” patent battle relating to Eli Lilly’s antipsychotic drug ZYPREXA (olanzapine) (decision here). The Court of Appeal affirmed the lower court’s summary judgment decision released in 2021 that dismissed Apotex’s claims for treble damages pursuant to the Statute of Monopolies, damages pursuant to the Trademarks Act and the common law tort of conspiracy (see prior blog here).
Apotex’s novel damages claim arose from the invalidation of Eli Lilly’s 113 Patent in a separate proceeding brought by generic manufacturer Novopharm. Eli Lilly had previously and successfully asserted the 113 Patent against Apotex under the PM(NOC) Regulations which resulted in an order prohibiting Apotex from marketing its olanzapine drug until the expiry of the 113 Patent. Apotex unsuccessfully sought reconsideration of that order in an apparent attempt to secure for itself a claim for section 8 damages. Undeterred, Apotex sued Eli Lilly for damages, including treble damages resulting from Apotex’s delayed market entry for olanzapine as a result of a patent later found to be invalid in the Novopharm proceeding.
- The ONCA upheld the lower Court’s finding that Apotex’s loss in proceedings brought pursuant to the PM(NOC) Regulations barred its damages claims brought outside of the patent scheme. The ONCA agreed that the Patent Act and PM(NOC) Regulations are a complete code, with s. 8 of the PM(NOC) Regulations providing a “single remedy” precluding Apotex’s claims for damages. After Apotex unsuccessfully sought a remedy pursuant to the PM(NOC) Regulations, it was not “open to Apotex to effectively seek the same relief under the auspices of other statutory and common law claims”.
- The ONCA agreed that Apotex’s alleged damages for harm flowing from its delayed market entry were not recoverable because they arose by operation of law. The Court found that Eli Lilly was not liable for actions that it was authorized by law to take and for harms that were caused by the operation of the patent regime that Apotex invoked.
- Regarding the lower Court’s dismissal of Apotex’s claims under the Statute of Monopolies, the ONCA agreed that the Statute was not intended to capture patents that were legitimately granted (like the 113 Patent), irrespective of whether they were subsequently invalidated.
- The ONCA found no error in the Court’s finding that Eli Lilly made no misrepresentation when if filed its Form IV patent list, including the 113 Patent, in respect of ZYPREXA. The 113 Patent was “validly registered” at the time Eli Lilly submitted its Form IV patent list and the subsequent invalidation of the 113 Patent had no effect on the statements previously made to support its listing.
- The ONCA found no error in the Court’s dismissal of Apotex’s claim for damages in respect of civil conspiracy. There was no evidence to support Apotex’s claim for civil conspiracy. The later invalidation of the 113 Patent did not result in Eli Lilly making improper acts at the time it issued and was listed.
Time will tell if the ONCA’s decision will finally end Apotex’s and Lilly’s dispute over the 113 Patent, which expired back in April 2011. Apotex has 60 days to seek leave to the Supreme Court of Canada.
For more information, please contact the McCarthy Tétrault Intellectual Property Litigation group in Toronto.