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A Complete Code: Ontario Court Of Appeal Denies Remedies Exist Outside The PMNOC Regime – Patent



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The Patented Medicines (Notice of Compliance)
Regulations
 (PMNOC Regulations ) is a complete code.
In Apotex Inc v Eli Lilly Canada Inc, the
Ontario Court of Appeal weighs in on the drawn-out battle between
patent owners and generics on whether monetary relief is available
outside the parameters of the PMNOC regime. It is not.

Background

This decision is an appeal from the order of Justice Schabas of the Superior Court
of Justice dated March 8, 2021
. At the core of this appeal is
whether the invalidity of a patent owned by Eli Lilly for
Olanzapine gives rise to a claim by Apotex for damages for being
kept off the market during the proceeding under the PMNOC regime,
pursuant to the Statute of Monopolies, the Trademarks Act and the tort of
conspiracy.

In the Court below, the Court accepted Eli Lilly’s
position on the summary judgment motion and denied Apotex relief
for the harm it alleged to have suffer outside of the confines of
the Patent Act  and the
PMNOC Regulations.

Issues on Appeal

There were several issues on appeal, namely did the motions
judge err by:

  • Finding the Patent Act and the PMNOC
    Regulations formed a complete code?

  • Finding Apotex’s damages are not recoverable because they
    arose by operation of law?

  • Rejecting Apotex’s claim under the Statute of
    Monopolies
    ?

  • Concluding that Apotex’s Trademark
    Act
     claims were not available?

  • Rejecting Apotex’s claim based on civil conspiracy.

There was also an issue as to costs which is not addressed in
this blog post.

The Ontario Court of Appeal denied each ground of appeal. The
key findings are discussed below.

  • Complete Code

    Section 8 of the PMNOC Regulations provides the sole remedy for a
    generic manufacturer to seek relief if it has challenged a patent
    within the PMNOC regime. On the facts of the case, Apotex did not
    meet the requirements for section 8 damages and no other relief was
    available.

  • No Liability for Actions Authorized to Take by
    Law


    Apotex’s delay in bringing its generic drug product to market
    was caused by the statutory stay mechanism provided under the PMNOC
    Regulations and the Order that Apotex was not entitled to early
    market access or compensation pursuant to section 8 of the PMNOC
    Regulations. A patentee, in this case Eli Lilly, is not liable for
    actions it was authorized to take by law or for alleged harms that
    were caused by the operation of the patent regime that the generic,
    in this case Apotex, invoked.

  • The Statute of Monopolies Excludes
    Liability


    The Statute of Monopolies specifically excludes
    liability for patents for new inventions. At the time the patent
    was granted to Eli Lilly, it was granted for a new invention.
    The Statute of Monopolies does not distinguish
    between valid and subsequently invalidated patents. This is in line
    with the historical purpose of the legislation.

  • Information on the Form IV as to Patent Validity was
    not a Misrepresentation


    The information that Eli Lilly supplied at the time of listing its
    patent on the Patent Register, including the brand name of the drug
    and that it held a valid patent, was not a misrepresentation. It
    was not an error for the Court below to find that a granted patent
    is presumed valid as per section 43(2) of the Patent
    Act.
     As such Eli Lilly did not make a misrepresentation
    when it completed the Form IV and stated it held a valid patent to
    be listed on the Patent Register.

  • No Conspiracy

    There was nothing unlawful in Eli Lilly applying for and protecting
    a registered patent under the Patent Act and
    PMNOC Regulations even though the patent was later held to be
    invalid. There was also no failure in the factual finding that
    there was no evidence to support a claim for conspiracy.

Key Takeaways

There are two key practical takeaways flowing from this
decision. The first is that once the PMNOC Regulations have been
engaged, the regime is a complete code. A generic manufacturer is
entitled to section 8 damages relief for being delayed market entry
pursuant to the stay arising under the PMNOC Regulations, if it is
successful on a section 6 PMNOC action and meets the criteria for
such relief. Failing which, it is precluded from seeking damages.
The second is that the general principal that engaging in a lawful
activity does not attract liability holds true in the context of
the PMNOC regime. Further, although an invalidated patent is
considered invalid ab initio, the fact that a patent
is presumed valid under the Patent Act with the
grant of a patent, maintains the lawfulness of a patentee’s
actions regarding that patent if the patent is later invalidated.
This adds clarity around the phrase invalid ab
initio 
while reinforcing the presumption of
validity.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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