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Ontario Court of Appeal affirms dismissal of Apotex’s Statutes of Monopolies and Trademarks Act claims regarding olanzapine

Background

On March 8, 2021, the Ontario Superior Court of Justice dismissed Apotex’s claims against Eli Lilly (Lilly) under the Statute of Monopolies, Trademarks Act, and common law conspiracy relating to Canadian Patent No. 2,041,113 (113 patent) for olanzapine. On August 16, 2022, the Ontario Court of Appeal dismissed Apotex’s appeal: Apotex Inc v Eli Lilly Canada Inc, 2022 ONCA 587.

While Lilly succeeded against Apotex in a proceeding under the Patented Medicines (Notice of Compliance) Regulations (PMNOC Regulations), the 113 patent was later found invalid in a decision involving Novopharm (affirmed on appeal). In the circumstances, Apotex was not entitled to damages under s. 8 of the PMNOC Regulations.

In the action below, Apotex sought damages on the basis that (i) the 113 patent was invalid and void ab initio and (ii) Apotex was delayed in entering the market by Lilly’s actions, including the listing of the 113 patent on the Patent Register and pursuing the proceeding under the PMNOC Regulations. The Court of Appeal rejected each of the arguments set out below in upholding the motion judge’s decision to summarily dismiss the action. 

1. Complete code

Apotex argued that the motion judge erred in holding that the Patent Act and PMNOC Regulations form a complete code that precludes Apotex’s causes of action. The Court of Appeal disagreed. As described above, Apotex was unsuccessful under the PMNOC Regulations; “it is not open to Apotex to effectively seek the same relief under the auspices of other statutory and common law claims.” “Apotex chose to engage the PM(NOC) Regulations” and is “not entitled to remedies beyond s. 8 of the PM(NOC) Regulations”.

2. Operation of Law

Apotex argued that the motion judge erred in holding that Apotex’s damages were not recoverable because they arose by operation of law. The Court of Appeal disagreed, as any harm to Apotex (delay in entering the market) was caused by the operation of the Patent Act and the PMNOC Regulations. “Eli Lilly is not liable for actions that it was authorized by law to take and for harms that were caused by the operation of the patent regime that Apotex invoked.”

3. Statute of Monopolies

The motion judge held that the 113 patent is a patent for a new invention, which is not prohibited by the Statute of Monopolies. Apotex argued on appeal that the 113 patent was not exempt from the prohibition on monopolies as it was invalid and void ab initio. The Court of Appeal agreed with the motion judge that the Statute of Monopolies explicitly excludes patents for new inventions and “does not distinguish between valid and subsequently invalidated patents.”

4. Trademarks Act

Pursuant to s. 7(a) and 7(d) of the Trademarks Act, Apotex argued that Lilly made misrepresentations in documentation seeking to list the 113 patent on the Patent Register. The Court of Appeal agreed with the motion judge that the information provided by Lilly in seeking listing, including the assertion that Lilly owned a valid patent, contained no such misrepresentations.  

5. Conspiracy

Apotex argued that the motion judge erred in finding no evidence of civil conspiracy in the activities of the Lilly defendants, including the procuring and listing of the 113 patent. The Court disagreed, reiterating that “there was nothing unlawful in Eli Lilly applying for and then protecting a validly registered patent under the Patent Act and its Regulations.”

Apotex may seek leave to appeal from the Supreme Court of Canada. 

Should you have any questions, please do not hesitate to contact a member of the Pharmaceutical Litigation Group.

The preceding is intended as a timely update on Canadian intellectual property and technology law. The content is informational only and does not constitute legal or professional advice. To obtain such advice, please communicate with our offices directly.