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Ontario Court dismisses Eli Lilly’s motion to strike Apotex’s claim for damages under almost 400-year-old Statute of Monopolies

Authored byUrszula Wojtyra

On August 28, 2015, the Ontario Superior Court of Justice dismissed Eli Lilly’s motion to strike Apotex’s claim for treble damages and double costs pursuant to the almost 400-year old British Statute of Monopolies and its 118-year-old Ontario re-enactment (collectively, “the Monopolies Acts”): Apotex Inc v Eli Lilly and Company, 2015 ONSC 5396. Apotex claims damages under the Monopolies Acts alongside damages pursuant to section 8 of the Patented Medicines (Notice of Compliance) Regulations (“PM(NOC) Regulations”) following the dismissal of Eli Lilly’s application for an Order of prohibition for Apotex’s generic atomoxetine product (Eli Lilly’s STRATTERA). Eli Lilly’s prohibition application was dismissed as moot, as previously reported, when Apotex was issued a notice of compliance (NOC) after the patent at issue had been declared invalid in a separate impeachment action brought by Novopharm.

This was not the first time the Ontario Courts have considered Apotex’s claims in this proceeding. Apotex had also claimed disgorgement of Eli Lilly’s profits, alleging that Eli Lilly was unjustly enriched when Apotex was kept off the market. As reported previously, Eli Lilly’s motion to strike the unjust enrichment claim was ultimately successful at the Divisional Court, which held it plain and obvious that Apotex could not succeed as the Patent Act and PM(NOC) Regulations were a “complete code” for available remedies for any generic delay thereunder (2013 ONSC 5937). The Ontario Court of Appeal dismissed Apotex’s appeal, not on the basis of the “complete code” arguments. Rather, the Court of Appeal held that the claim was doomed to fail as Apotex could not show a corresponding deprivation, one of the required elements for such a claim, as it would never have earned those profits (reported here, 2015 ONCA 305). Apotex has sought leave to appeal to the Supreme Court of Canada (SCC Case No. 36538)

In the present decision, the Court found unpersuasive Eli Lilly’s argument that Apotex’s damages pursuant to the Monopolies Acts were doomed to fail because the Patent Act and PM(NOC) Regulations represented a complete code for available remedies. According to the Court, in the absence of a binding Ontario Court of Appeal decision holding that the Patent Act and PM(NOC) Regulations constituted a complete code, the law on that point was unsettled. Further, the Court held that the dismissal of Eli Lilly’s prohibition application was irrelevant to Apotex’s Monopolies Acts claims. According to the Court, “Article 4 of the Monopolies Acts speaks directly to the question of the consequences of invalid monopolies including those under invalid letters patent…” and arguably, the Patent Act is silent on the potential remedies available to a party subjected to a monopoly pursuant to a patent that is later declared invalid.

Regarding the application of the two Monopolies Acts, the Court first considered whether the statutes were in force and second, whether they applied to the situation at hand. On the first point, the Court ruled that the Ontario statute had not been repealed and was still in force, and it was at least arguable that the U.K. statute was still in force. On the second point, Apotex’s theory was that, since Eli Lilly’s patent was void ab initio¸ Eli Lilly’s actions, including listing the patent on the Patent Register, that interfered with Apotex’s business were without lawful foundation and could not be sheltered from the Monopolies Acts. The Court held that it was not plain and obvious that Apotex’s case would fail. 

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