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25 February 2019
On the eve of a Section 8 trial, the Ontario Superior Court granted Abbott and Takeda leave to amend their pleadings to assert that Apotex's purported non-infringing alternative was unlawful as it would have infringed a third party's patent.(1)
The underlying action was brought by Apotex seeking Section 8 damages from Abbott and Takeda stemming from litigation under the pre-amended Patented Medicines (Notice of Compliance) (PMNOC) Regulations relating to lansoprazole (Abbott's Prevacid). The parties had settled the PMNOC proceeding, but Apotex reserved its rights to claim Section 8 damages. Abbott and Takeda pleaded that Apotex was not entitled to Section 8 damages as it would have infringed a patent which Abbott licensed from Takeda (010 patent). In response, Apotex pleaded that, if it is found that it would have infringed the 010 patent, Apotex could and would have sold a non-infringing alternative, capturing the same hypothetical sales as Apo-Lansoprazole and therefore it is still entitled to Section 8 damages.
Relying on the decision of the Federal Court of Appeal in Apotex Inc v Eli Lilly 2018 FCA 217 (for further details please see "Federal Court of Appeal overturns cefaclor damages decision on pre-judgment interest issue"), Abbott and Takeda sought to plead that Apotex's non-infringing alternative would have infringed another patent (891 patent), which would be unlawful, and therefore could not save Apotex from the impact of any infringement of the 010 patent. The court held that Abbott and Takeda never held any rights to the 891 patent and the patentee was not a party to and has no interest in this proceeding.
The court granted the amendment. In so doing, it found that it was a tenable argument for Abbott and Takeda to assert that the patent of a disinterested third party would be infringed by a purported non-infringing alternative either because of the broad discretion conferred by Section 8(5) of the PMNOC Regulations or the principle of ex turpi causa non oritur action ('an action does not arise from a dishonourable cause'). Further, the court noted that Apotex had given notice that it was relying on the specific non-infringing alternative at issue, and found that Apotex had not established that it would be prejudiced by the amendment, as any delay to the trial could be compensated by costs and an adjournment if appropriate.
For further information on this topic please contact Urszula Wojtyra at Smart & Biggar/Fetherstonhaugh by telephone (+1 416 593 5514) or email (email@example.com). The Smart & Biggar/Fetherstonhaugh website can be accessed at www.smart-biggar.ca.
(1) Apotex Inc v Abbott Laboratories Limited, 2018 ONSC 7736.
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