Start and End Dates for Section 8 Liability Period

Apotex Inc v Sanofi-Aventis Canada Inc [Apotex s 8 Liability Appeal] 2014 FCA 68 Sharlow JA, Pelletier JA concurring, Mainville JA dissenting, var’g 2012 FC 553 Snider J ( blog blog);
Teva Canada Ltd v Sanofi-Aventis Canada Inc [Teva s 8 Liability Appeal] 2014 FCA 67 Sharlow JA, Dawson JA concurring, Mainville JA dissenting, var’g 2012 FC 552 Snider J (blog blog)
            ramipril / ALTACE

Under the patent linkage set provided for in the PM(NOC) Regulations, a generic that would otherwise be in a position to receive an NOC as a result of an ANDS will be placed on “patent hold” until it has addressed all the patents listed against the drug in question by the innovator / patentee whose drug was the reference product for the ANDS. The generic can respond with a Notice of Allegation, alleging invalidity or non-infringement, and if the patentee responds, a statutory stay is triggered under s 7, preventing the generic from receiving its NOC until the patents have expired or the generic has prevailed on its allegations in NOC proceedings. If the generic is successful, s 8(1) makes the patentee liable to the generic for losses suffered from having been wrongly (in hindsight) held off the market by the statutory stay. The patent linkage system is analogous to an automatic interlocutory injunction, and s 8 is analogous to the undertaking in damages which is usually required for a plaintiff to obtain such an injunction.

The Apotex and Teva s 8 Liability Appeals raise some unusual issues regarding the start and end dates for the section 8 liability period (which I have previously called the compensable period). While the facts were unusual, this means that the FCA had the opportunity to clarify some principles which are not as apparent in more routine situations.

What is the "But For" World under S 8 of the NOC Regulations?

Apotex Inc v Sanofi-Aventis Canada Inc [Apotex s 8 Liability Appeal] 2014 FCA 68 Sharlow JA, Pelletier JA concurring, Mainville JA dissenting, var’g 2012 FC 553 Snider J ( blog blog);
Teva Canada Ltd v Sanofi-Aventis Canada Inc [Teva s 8 Liability Appeal] 2014 FCA 67 Sharlow JA, Dawson JA concurring, Mainville JA dissenting, var’g 2012 FC 552 Snider J (blog blog)
            ramipril / ALTACE

In these companion cases, the FCA has split on a very difficult issue relating to calculation of damages under s 8 of the NOC Regulations.* Damages generally are assessed by a comparison of the actual world with a “but for” or hypothetical world in which the wrong had not occurred. Sharlow J for the majority in the FCA, Mainville J in dissent, and Snider J at trial, all accepted that this basic principle should apply to s 8. The question is how exactly to construct the hypothetical world in assessing damages under s 8. Should we assume that NOC Regulations were effective against all generics, so that everything would have unfolded exactly as it did, except that the claimant would have received its NOC, and entered the market, notwithstanding the statutory stay? Should we assume that the NOC Regulations did not exist at all in the compensable period, for either the claimant or other generics which might have entered the market? Should we assume that NOC Regulations were effective against all generics except the claimant? These were essentially the positions taken by Sharlow J, Mainville J, and Snider J respectively. In the end, there is no perfect answer to this question.