Case:

Eli Lilly and Company et al. v. Apotex Inc. (Federal Court)

DRUG:

CECLOR® (cefaclor)

Nature of Case:

Patent Infringement Action

Successful Party:

Eli Lilly and Company, Eli Lilly Canada Inc.

Date of Decision:

October 1, 2009  

Summary:

On October 1, 2009, after twelve years of litigation and a six-month trial, Justice Gauthier of the Federal Court held that Apotex Inc. ("Apotex") had infringed eight Canadian patents pertaining to the drug CECLOR® (cefaclor) by using Lilly's patented processes abroad and then importing the resulting compounds into Canada.

Lilly pleaded that it was entitled to rely on statutory and common law presumptions to dispense with formal proof of patent infringement. The Court disagreed and held that the statutory presumption of infringement by a patented process did not apply, as the patents were not directed to a process for making cefaclor, per se. The Court also held that Lilly was not entitled to rely on the common law presumption that the subject-matter of an allegation (i.e., non-infringement) must be proven by the person with better information (i.e., Apotex), as Lilly had not taken "reasonable steps" to obtain information about the processes used to make cefaclor. Nevertheless, the Court held that Lilly had proven infringement of the relevant claims on a balance of probabilities for a specific period of time. The Court also held that Lilly Canada had standing to sue for damages, as it is a "person claiming under the patentee" by reason of an express licence with the patent owner, Lilly U.S.

The Court rejected the defences to infringement asserted by Apotex. In particular, the Court held that Apotex had failed to prove that it bought material from a licensed source. It also held that the importation of products made abroad by a process that is patented in Canada is an act of infringement (the "Saccharin Doctrine"). However, the Court held that the Canadian doctrine is flexible and can be adapted to new circumstances, where appropriate. In particular, Gauthier J. said that nothing prevents the Court from considering whether the imported product was materially changed or has become a trivial or non-essential component of the imported product. Finally, the Court held that although the early-working exception to patent infringement has been interpreted broadly, it does not apply to compounds that were sold or used for a similar purpose.

The Court held that at least one claim of each patent was valid and infringed. Gauthier J. held that Lilly is entitled to elect its damages or an accounting of Apotex's profits during the period of infringement. Lilly is entitled to pre-judgment interest on a simple basis, but may claim compound interest on the reference, if necessary, to achieve full compensation. Lilly was awarded its costs on an elevated basis.

Apotex's counterclaim for damages pursuant to the Competition Act was dismissed with costs, as the claim was time-barred and Apotex had failed to prove causation or damages.

LINK TO DECISION:

The reasons have not yet been posted on the Federal Court website - the citation will be 2009 FC 991.