Apotex Inc. v. Eli Lilly and Company

Drug: atomoxetine

In this case, Apotex has claimed damages in Ontario Court pursuant to, inter alia, section 8 of the NOC Regulations. Lilly brought a motion to strike out parts of Apotex’ statement of claim. The motion was mainly dismissed.

In the underlying proceeding, Lilly’s application for prohibition was dismissed for mootness and not because Apotex’ allegations of invalidity were found to be justified. Thus, Lilly argued in its motion to strike that section 8 does not apply in the circumstances. The Court held that it was not plain and obvious that the dismissal for mootness could not come within the ambit of section 8 of the NOC Regulations. Thus, it did not strike the claim.

Lilly also asserted in its motion that the claim should be struck as the material facts relating to the damages claim were not pled. However, the Court held that a basic pleading of damages was present and it was implicit in the pleadings that Apotex was ready to come to market. To require more than the basic pleading would require Apotex to plead evidence, which is contrary to the Rules. Lilly also tried to strike the pleadings regarding unjust enrichment and disgorgement of profits. However, the Court held that this claim had a reasonable chance of success and that it was not scandalous, frivolous or vexatious or an abuse of process. Thus, the claims were not struck.

Lilly moved to strike Apotex’ claims pursuant to the Trade-marks Act. Apotex is asserting, inter alia, that in alleging in the NOC proceeding that the patent was properly listed on the Patent Register and that the patent would be infringed, Lilly made statements that were materially false and misleading and intended to discredit the business wares and services of a competitor. Furthermore, as a result of these alleged violations of the Trade-marks Act, Apotex alleges that Lilly made profits it would not otherwise have made and is claiming those profits. The Court held that whatever Lilly may have thought when listing the patent on the Patent Register, the subsequent determination that the patent was void ab initio means Lilly did not hold a patent and had no right to register it. Thus, there is a reasonable prospect that Lilly can be held to have made assertions which, by reason of the retroactive voiding of the patent, were false. Thus, the Court held that the claim has a reasonable prospect of success.

The Court also held that absolute privilege applies for statements made in court proceedings; however, it is unclear whether that applies for listing a patent on the Patent Register. Thus, the relevant pleadings were not scandalous, frivolous or vexatious or an abuse of process and they were not struck. The Court also held that the question of whether starting the proceeding falls within absolute privilege or an exception to that absolute privilege is also something that should not be resolved by means of motion at this early stage of the litigation. Thus, the pleading was not struck.

The claim to damages or an accounting of profits as may be otherwise available at law was struck as it had no supporting allegations of fact.