A Judge of the Federal Court had previously awarded Teva section 8 damages under the PM(NOC) Regulations. The Court provided the key findings of fact in 2014 FC 248, previously summarized the week of April 7, 2014, and then issued an order providing the total damages accrued during the relevant period ($92 million in damages and $32 million in prejudgment interest — 2014 FC 634).
Pfizer appealed, alleging several errors were made, and the Court of Appeal has agreed with Pfizer on one of the alleged errors, namely that the Federal Court erred in admitting and relying upon hearsay evidence at trial.
The Federal Court held that Teva had to show on a balance of probabilities that it both could and would supply the market in the “but for” world. This meant that Teva had to identify its third-party supplier of the active pharmaceutical ingredient and show that that supplier had the capacity to supply the market over the relevant period.
The only evidence on this point was provided by a former executive of Ratiopharm, now Teva. Teva's witness testified as to the capacity of the third-party supplier to make venlafaxine for Teva. He relied upon emails he was not copied on and what colleagues had told him.
Pfizer had objected that this evidence was hearsay but it was allowed at trial. The Court of Appeal agreed that information told to Teva's witness by the third-party supplier was hearsay. Information routed from the supplier through other Ratiopharm employees to Teva's witness was held to be double hearsay.
The Court of Appeal found that this evidence should have been excluded and this error might have affected the outcome of the case. Thus, the Court of Appeal has remitted the proceeding back to the Federal Court for redetermination.