In what I believe is the first claim by a generic under s 8 of the NOC Regulations to go all the way to quantum, Apotex
prevailed against Sanofi-Aventis for having been wrongly kept out of the market for ramipril:
see Snider J`s decision in Apotex Inc v Sanofi-Aventis Canada Inc / ramipril (s 8) 2012 FC 553.
Snider J`s judgment as to quantum has now been released. It awards Apotex $215 million in
damages. As discussed here (and see also here), Apotex’s damages were calculated on the basis
of strict “but for” causation, including an allowance for the likelihood of multiple generic entry,
except that the generic is not entitled to the equivalent of springboard damages. Thus the
damages principles are sound and, if anything, underestimate Apotex`s loss.
Further, Sanofi is also liable to Teva on the same principles and in respect of the same market: see Teva Canada Ltd v Sanofi-Aventis Canada Inc / ramipril (s 8) 2012 FC 552 (blogged here and here). I now realize that the likelihood of multiple generic entry may provide a principled basis for refusing ``springboard`` damages to the first generic to enter. That is, damages cannot be recovered for permanent loss of market share after the generics enter the market, even if that loss was caused by the statutory stay. This rule has been justified on the basis that the NOC Regulations provide an overall balance between patentees and generics, even though it may be unprincipled if considered in isolation (see here). But if the overall generic share after the expiry of the stay is the same, then a loss of market share suffered by one generic is a gain to another, and it may be sound in principle and simpler in practice to deny all such awards than to try to adjust damages upwards and downwards for each generic.
Whether or not springboard damages are properly denied as a matter of principle, the point remains that Sanofi`s exposure is greater than the $215 million awarded to Apotex. Moreover, as the first comment to my IP Kat post on this award notes, the public also suffers a loss in the form of higher prices from the generics being wrongly excluded from the market, and the patentee is not liable at all for that loss. To the extent that s 8 is intended to provide an incentive for the patentee not to list patent of dubious validity, failure to capture the loss to the public means that the incentive is actually too small. This is the rationale for allowing the generic to claim an accounting of the patentee`s profit, which has so far been refused as a matter of statutory interpretation. An accounting would also raise difficult questions of apportionment between different generics; the patentee cannot be liable for its entire profit to every generic that would have entered.
A great deal has been written in the academic literature on the economic incentive effects of damages generally. With awards of this magnitude under s 8, it seems the time is ripe for a full principled analysis of s 8 damages.
Further, Sanofi is also liable to Teva on the same principles and in respect of the same market: see Teva Canada Ltd v Sanofi-Aventis Canada Inc / ramipril (s 8) 2012 FC 552 (blogged here and here). I now realize that the likelihood of multiple generic entry may provide a principled basis for refusing ``springboard`` damages to the first generic to enter. That is, damages cannot be recovered for permanent loss of market share after the generics enter the market, even if that loss was caused by the statutory stay. This rule has been justified on the basis that the NOC Regulations provide an overall balance between patentees and generics, even though it may be unprincipled if considered in isolation (see here). But if the overall generic share after the expiry of the stay is the same, then a loss of market share suffered by one generic is a gain to another, and it may be sound in principle and simpler in practice to deny all such awards than to try to adjust damages upwards and downwards for each generic.
Whether or not springboard damages are properly denied as a matter of principle, the point remains that Sanofi`s exposure is greater than the $215 million awarded to Apotex. Moreover, as the first comment to my IP Kat post on this award notes, the public also suffers a loss in the form of higher prices from the generics being wrongly excluded from the market, and the patentee is not liable at all for that loss. To the extent that s 8 is intended to provide an incentive for the patentee not to list patent of dubious validity, failure to capture the loss to the public means that the incentive is actually too small. This is the rationale for allowing the generic to claim an accounting of the patentee`s profit, which has so far been refused as a matter of statutory interpretation. An accounting would also raise difficult questions of apportionment between different generics; the patentee cannot be liable for its entire profit to every generic that would have entered.
A great deal has been written in the academic literature on the economic incentive effects of damages generally. With awards of this magnitude under s 8, it seems the time is ripe for a full principled analysis of s 8 damages.
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