On April 21st, 2015, the Supreme Court of Canada dismissed from the bench an appeal from the Federal Court of Appeal decision inApotex Inc. v. Sanofi-Aventis2014 FCA 68. The appeal dealt with the proper calculation of the “but, for” world in PM(NOC ) proceedings and though the Federal Court of Appeal was split on the issue, the Supreme Court unanimously sided with the majority in this highly contentious area of patent law.

At issue was a series of patents owned by Sanofi for the drug Ramipril, which were set to expire in 2005. Apotex had applied and received regulatory approval from Health Canada in 2004, however they did not receive their notice Notice of Compliance until December 12, 2006 due to Sanofi’s statutory stay of the issuance, which was later found unsustainable. Both parties agreed that Apotex was entitled to damages, however they disagreed about how to calculate damages in the “but, for” world where Sanofi had not applied for the statutory stay of issuance.

For a full recap of the FCA decision, please visit our earlier summary, here. Below are the main takeaways from the FCA decision upheld by the Supreme Court:

  • The relevant start and end dates for assessing damages are the date which an applicant would have received their NOC and the date on which the applicant is no longer at a loss, likely the date when they actually receive their NOC
  • In constructing the hypothetical world, the Court must consider the actual legal remedies available to each party during the relevant period and should not consider possible actions available had the statutory stay not been sought. Sanofi had argued that once Apotex entered the market, Teva would have sought a summary decision enabling it to join the market. In assessing the share of the market for the generic during the liability period, there is no “single hypothetical world” and an assessment of damages should be decided on the evidence of each individual case, regardless of whether there are cases involving other generics. For example, the FCA upheld the finding that Apotex would receive 70 percent of the market regardless of the fact that the Trial Judge would have also awarded Teva 30 percent of the market while finding that an authorized generic would have taken 33 percent of the market
  • A “ramp-up” period (the time it takes from regulatory approval to full market penetration) should not be counted if it occurs outside the period of liability.
  • In regards to damages based on lost secondary (off label) uses of the patented medicine (Ramipril was originally patented for treatment of hypertension, with subsequent patents for heart-related health issues), it is up to the patent owner to enforce their patent even though generic products may not be promoted to the public for any specific use. In the present case, Sanofi had not opposed the generic version as being interchangeable and they could have brought an action for patent infringement if they wished.   

Barring a unique set of facts, it appears that the decision of the FCA will be the leading jurisprudence regarding the “but, for” world for the foreseeable future.