On October 30, 2014, the Supreme Court of Canada granted leave to Sanofi-Aventis’ (“Sanofi”) application for leave to appeal a decision of the Federal Court of Appeal (2014 FCA 68). By granting leave to Sanofi, the Supreme Court will now consider for the first time the correct interpretation of, and the correct legal framework applicable to quantifying section 8 damages under the Patented Medicines (Notice of Compliance) Regulations (“PM(NOC) Regulations”).

The PM(NOC) Regulations strike a balance between the interests of innovative pharmaceutical companies and generic manufacturers, by requiring generic manufacturers to address innovators’ patents before receiving approval from the Minister of Health to market their copycat drugs. This scheme provides a set of rights to innovative companies who develop new drugs and patents, and to generic manufacturers who market copies of such drugs at reduced prices.

Section 8 of the PM(NOC) Regulations provides generic manufacturers with a right to compensation for losses suffered during the period of delay caused in part by unsuccessful litigation brought under the PM(NOC) Regulations.

In the lower court’s decision, a divided Federal Court of Appeal disagreed about the correct legal framework applicable to quantifying Apotex Inc.’s section 8 damages for having been delayed entry for Ramipril to the Canadian market. Under the construct affirmed by the majority, the section 8 compensation awarded to Apotex in this single action was over $200 million. However, the dissent held that the legal framework used by the trial judge (and affirmed by the majority) is one that “inherently leads to windfalls” for both the plaintiff and other generic manufacturers seeking section 8 damages – a result, the dissent found to have occurred in the case at bar, particularly when considering the combined effect of the multiple section 8 claims that have been advanced in in respect of Ramipril.

The Supreme Court’s consideration of this issue will be of substantial precedential value and will inject clarity into the body of section 8 jurisprudence that has developed. Given the multitude of section 8 damages cases proceeding before the Federal and Provincial Courts, and the billions of dollars at stake in current and future actions, the Supreme Court’s decision will have important ramifications for the Canadian pharmaceutical industry and the public.