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 (NIA) was unlawful as it would have infringed a third party’s patent: Apotex Inc v Abbott Laboratories Limited, 2018 ONSC 7736.
Background to the decision granting leave to amend
The underlying action was brought by Apotex seeking section 8 damages from Abbott/Takeda stemming from litigation under the pre-amended Patented Medicines (Notice of Compliance) Regulations (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/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 an NIA, 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 and Company 2018 FCA 217 (previously reported here), Abbott/Takeda sought to plead that Apotex’s NIA would have infringed another patent, referred to as the 891 patent, which would be unlawful, and therefore cannot save Apotex from the impact of any infringement of the 010 patent. Notably, the Court held that Abbott/Takeda has never held any rights to the 891 patent and the patentee is not a party to and has no interest in this proceeding.
Decision allowing the amendment
The Court granted the amendment. In so doing, it found that it was a tenable argument for Abbott/Takeda to assert that the patent of a disinterested third party would be infringed by a purported NIA 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 (Latin meaning “from a dishonorable cause an action does not arise”). Further, the Court noted that it was only recently that Apotex gave notice that it was relying on the specific NIA 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.