On December 19 2011 the Federal Court of Appeal reversed a trial judge's finding that the 1993 version of Section 8 of the Patented Medicines (Notice of Compliance) Regulations applied to Apotex's claim against Merck relating to a prohibition proceeding regarding lovastatin (Merck's Mevacor).(1)
The court found that Merck's prohibition application was 'pending' on March 11 1998 – the date that the 1998 version of Section 8 came into effect – and therefore the 1998 version applied. Specifically, the court held that Merck's application remained alive on March 11 1998 because the court of appeal had jurisdiction to hear Merck's pending appeal. Even though the issuance of the notice of compliance rendered the application moot, the court could have exercised its discretion to hear the appeal and granted the application.
The court further noted that the 1998 version was intended to clarify the 1993 version rather than to amend its substance and, therefore, in the absence of clear legislative intent, undue restrictions should not be placed on the circumstances entitling a party to a Section 8 claim under the 1998 version.
The court also considered Merck's infringement defence, holding that Merck should not be liable for loss suffered as a result of Apotex being prevented from infringing sooner (an ex turpi causa defence where a claimant is unable to pursue a cause of action if it arose in connection with its own illegal act).(2) The court found that Apotex satisfied the requirement under Section 8(1) that Merck's application was dismissed and was therefore entitled to claim the loss that it suffered as a result of the minister's delay in issuing the notice of compliance.
It further held that it was unnecessary to read an ex turpi causa exception into Section 8(1) in order to prevent patent infringers from unjustly recovering compensation from a first person, because this defence can be raised under Section 8(5) so as to reduce or eliminate the amount of loss otherwise recoverable, taking into account all relevant facts.
The matter was remitted back to the trial judge to decide all issues of fact and law relevant to the quantification of Merck's liability.
For further information on this topic please contact Junyi Chen at Smart & Biggar/Fetherstonhaugh's Toronto office by telephone (+1 416 593 5514) or by fax (+1 416 591 1690) or by email ([email protected]).
(1) Apotex Inc v Merck & Co, Inc et al, 2011 FCA 364, rev'g 2010 FC 1264.
(2) The patent had been found valid and infringed with respect to certain lots in a companion case: Merck & Co Inc v Apotex Inc, 2010 FC 1265, aff'd 2011 FCA 363.