Low v Pfizer Canada Inc, 2015 BCCA 506

This British Columbia Court of Appeal (“BCCA”) decision confirmed that the patent regulatory regime – that being the Patent Act, RSC 1985, c P-4, the Patent Rules, SOR/96-423 the Food and Drugs Act, RSC 1985, c F-27, the Food and Drug Regulations, CRC, c 870, Part C, Division 8, C.08.004, and the Patented Medicines (Notice of Compliance) Regulations, SOR/93-133 – is a complete code which forecloses parallel civil actions rooted in a breach of the Patent Act commenced by consumers. As such, consumers who had paid inflated prices for Viagra during the period during which the drug was protected by a patent which was ultimately found invalid, could not bring a class action for unlawful interference with economic relations and unjust enrichment.. A generic manufacturer can only make a claim for its own losses under the Patented Medicines (Notice of Compliance) Regulations. There is no common law remedy available to consumers for breaches of the Patent Act. If a generic manufacturer has no cause of action against a brand name manufacturer, then an action by a consumer for unlawful interference with economic relations and/or unjust enrichment will similarly not be successful.

Background

Pfizer Canada Inc., Pfizer Inc., Pfizer Ireland Pharmaceuticals, and Pfizer Research and Development Company N.V./S.A., (collectively “Pfizer”) produced, marketed, supplied and/or sold Viagra to consumers in Canada. [1] In November of 2012, the Supreme Court of Canada (“SCC”) found that Pfizer’s Canadian Patent No. 2,163,446 (the “’446 Patent”) was invalid for insufficient disclosure (see Teva Canada Ltd v Pfizer Canada Inc, 2012 SCC 60 (the “Teva decision”)). The patent claimed the active ingredient in Viagra, a drug used to treat erectile dysfunction. Following the Teva decision, generic drug manufacturers were allowed to enter the market and sell generic versions of Viagra at a lower price.

Britton Low (“Low”) was a consumer of Viagra. In December of 2012, Low brought an action against Pfizer alleging unlawful abuse of the patent system. Low alleged that as a result of Pfizer’s unlawful conduct in holding the invalid patent, generic manufacturers were prevented from entering the market, which resulted in consumers being overcharged for Viagra.

In February of 2014, Low applied to certify his action as a class proceeding. Low brought the class action on behalf of all purchasers of Viagra in British Columbia who were allegedly overcharged during the period January 1, 2006 to November 30, 2012 – the time frame during which the Teva decision found that generic manufacturers were prevented from entering the market by Pfizer and the ‘446 Patent. At issue on the application was whether Low’s claim disclosed a cause of action. The chambers judge found that Low’s claim disclosed a cause of action in intentional interference with economic relations and unjust enrichment. Furthermore, the chambers judge held that it was not plain and obvious the patent regulatory regime was a complete code foreclosing civil actions. Pfizer appealed.

There were three issues on appeal:

  1. Whether the patent regulatory regime is a complete code that excludes common law remedies for a breach of the legislation;
  2. Whether Low’s claim disclosed a cause of action in unlawful interference with economic relations; and
  3. Whether Low’s claim disclosed a cause of action in unjust enrichment. [6]

Pfizer was successful on appeal.

The Patent Regulatory System – A Complete Code

The BCCA held that the patent regulatory regime is a complete code that bars consumers from bringing civil actions based on breaches of the Patent Act and related legislation. [68] The BCCA highlighted that the patent system is based on a bargain, or quid pro quo, and that there is no right to a patent at common law. Specifically, the BCCA noted that:

[68] … the completeness of the Patent Regulatory Regime forecloses parallel civil actions by consumers that are rooted in a breach of the Patent Act… there is nothing in the legislation comprising the Patent Regulatory Regime … that evinces an intention to allow consumers to make such claims. … patent rights are a construct of statute. The legislative regime creates rights which would not otherwise exist at common law. In effect, Low seeks to use the common law to expand the scope of those statutory rights and redefine the consequences of their breach by relying on Parliament’s silence. It is perhaps not strictly accurate to say that the statutes displace the common law in this case, since there would be no basis for any of the common law claims asserted if the statute did not exist. However, in circumstances such as these–where Parliament has comprehensively legislated a particular area of the law–the reasonable inference is that it did not intend to extend rights of recovery beyond those embodied in the regime.

[69] 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.

No Unlawful Interference with Economic Relations and Unjust Enrichment

The BCCA held that Low’s claims in unlawful interference with economic relations and unjust enrichment should not have been certified. The “unlawful means” element of the intentional interference with economic relations will only be satisfied by a breach of a statute where the breach is actionable outside of the context of the statute. [91] In order for Pfizer’s conduct to have amounted to unlawful interference with economic means, the conduct must have qualified as an “actionable civil wrongful” outside of the patent regulatory regime. [89] However, given that none of the generic manufacturers (i.e. Teva) would have been able to make civil claims against Pfizer for their losses, Low’s claim could not be successful:

[91] … A generic has no actionable claim against a brand name manufacturer for unjust enrichment or disgorgement of profits, because the Patent Regulatory Regime is a complete code: Apotex v. Merck; Apotex v. Eli Lilly. It is only able to make a claim for its own losses under PM(NOC) Regulations, s. 8. If a generic manufacturer has no cause of action against a brand name, then the tort of unlawful interference with economic relations–which is entirely parasitic–cannot succeed.

The BCCA allowed Pfizer’s appeal in respect of the action for unjust enrichment since it found that the regulatory regime of the patent system foreclosed any parallel common law actions centred on a breach of its provisions. [93] The BCCA noted that even if the patent regulatory regime was not a complete code, Low’s action for unjust enrichment would fail because of the existence of a juristic reason – that being the existence of contracts between Pfizer and direct purchasers. Low’s application for leave to appeal the BCCA’s decision to the SCC was dismissed with costs ([2016] SCCA No 55).