Generic pharmaceutical companies have long sought the disgorgement of innovator profits following litigation under the Patented Medicines (Notice of Compliance) Regulations (the “Regulations”). On January 14, 2016 the Supreme Court of Canada (SCC), once again, denied leave after Apotex appealed a decision of the Court of Appeal for Ontario (OCA) which upheld Eli Lilly’s motion to strike these claims.

Facts in brief

Apotex sought leave from the SCC to appeal the 2015 decision of the OCA which upheld Lilly’s motion to strike Apotex’s claim for unjust enrichment. The SCC panel of Justices Cromwell, Wagner and Côté dismissed Apotex’s application without reasons and with costs to Lilly.1

The OCA had held that an unjust enrichment claim made by a generic seeking an innovator’s profits did not satisfy the SCC’s test for unjust enrichment because there was no deprivation of the generic company that corresponded to an enrichment of the innovator.2 Details of the OCA decision were reported here.

BC joins the choir

Coincidently, while the SCC was considering Apotex’s application for leave from the OCA decision, the Court of Appeal for British Columbia (BCCA) released its decision in Low v. Pfizer Canada Inc. (Low).3 Low was a class action certification proceeding where the class was a group of consumers who were allegedly overcharged by Pfizer for Viagra (on the basis of Pfizer’s now void Viagra patent and the delay of generic entry due to proceedings under the Regulations). The class claimed damages pursuant to unjust enrichment and unlawful interference with economic relations. The issue on appeal was whether the statement of claim disclosed a cause of action.

In a unanimous decision, the BCCA dismissed the action. Details were reported here. The Court carefully reviewed the recent decision of the OCA and Federal Court of Appeal jurisprudence on claims beyond damages under s. 8 of the Regulations. The BCCA concluded that the Regulations constitute a “complete code” and that neither generics nor consumers can claim any remedy outside of damages set out under s. 8:

Courts have determined that the Patent Act constitutes a complete code as between brand name and generic manufacturers. Courts have also concluded that the completeness of the Patent Regulatory Regime prevents generic drug manufacturers from claiming disgorgement of profits based on unjust enrichment. It would make no sense logically or from a policy perspective to allow consumers to claim disgorgement of profits from brand names when generics are precluded from claiming the same based on identical wrongful acts.4

The BCCA held that the claim for unlawful interference with economic relations could not stand because there is no tort of breach of statute in Canada, and a breach of the Regulations is not “otherwise actionable”. As such, adhering to the scheme set out by the Regulations cannot form a basis for an action for unlawful interference with economic relations.5 Similarly, because the Regulations and the Patent Act form a complete code, adhering to the scheme set out by the Regulations cannot support a claim of unjust enrichment.6

All Courts of Appeal in alignment

With the addition of the BCCA decision in Low, it is not surprising that the SCC denied Apotex leave to appeal the OCA decision. There are now three Courts of Appeal (Federal, Ontario and British Columbia) that have squarely addressed the issue of remedies beyond those set out in s. 8 of the Regulations and all of these Courts are in alignment.7 When the allegations are solely that an innovator followed the scheme set out by the Regulations, there can be no remedy beyond those which are explicitly contemplated by s. 8 because the Regulations are a complete code.