Striking Out Unjust Enrichment Claims under s. 8 for Good - the Supreme Court of Canada Denies Leave to Appeal
February 2, 2016
By Adam Bobker and Anastassia Trifonova
On January 24, 2016, the Supreme Court of Canada dismissed Apotex’s application for leave to appeal from the Ontario Court of Appeal in Apotex Inc v Eli Lilly and Company, 2015 ONCA 305, which upheld the Divisional Court’s ruling to strike out Apotex’s claim of unjust enrichment under s. 8 of the Patented Medicines (Notice of Compliance) (“PM(NOC)”) Regulations.
In 2008, Eli Lilly (“Lilly”) brought a prohibition application against Apotex in respect of Lilly’s ‘735 Patent relating to the use of atomoxetine hydrochloride in the treatment of Attention Deficit Hyperactivity Disorders. Lilly’s application was dismissed on October 29, 2010, after the ‘735 Patent was invalidated by another generic manufacturer.1 Consequently, Apotex sought to recover damages under s. 8 of PM(NOC) Regulations.
In addition to the relief offered under s. 8 of PM(NOC) Regulations, Apotex claimed for unjust enrichment based on Lilly’s profits while Apotex was kept off the market. In response, Lilly brought a motion to strike Apotex’s unjust enrichment claim. The motion judge refused to strike Apotex’s claim but the Divisional Court reversed the decision, finding that it was plain and obvious that the claim could not reasonably succeed. On May 5, 2015, the Ontario Court of Appeal upheld the Divisional Court’s decision. Subsequently, Apotex filed an application for leave to appeal before the Supreme Court of Canada.
In determining whether Apotex’s claim for unjust enrichment should be struck the Ontario Court of Appeal looked at whether: (1) Apotex suffered a deprivation by the delay in the issuance of the Notice of Compliance for its generic product; (2) Lilly enjoyed a corresponding benefit by an extension of its market exclusivity, resulting in a windfall to Lilly; and (3) there was no juristic reason for Lilly to retain that windfall.
Previously, Apotex had been unsuccessful in its attempts to claim for unjust enrichment under s. 8 proceedings.2 Specifically, Apotex had failed to convince the Courts that the Patent Act and PM(NOC) Regulations did not constitute a complete code with respect to available remedies and that the PM(NOC) Regulations did not provide a juristic reason for a patentee to retain its excess monopolistic profits. Apotex argued that the facts of this case were different because Lilly made misrepresentations when it obtained and listed ‘735 Patent and subsequently commenced a prohibition proceeding. As such, PM(NOC) Regulations could not provide a valid juristic reason for Lilly to be immune from an unjust enrichment claim.
However, the Ontario Court of Appeal rejected Apotex’s claim for unjust enrichment because Apotex was “never deprived of the portion of Lilly’s revenues represented by its monopolistic profits because Apotex would never have earned those profits.”
Moreover, the Court held that even if Apotex could establish that there was misrepresentation or abuse of process, this was not a case where the “extraordinary” remedy of disgorgement of profits was warranted.
1 Eli Lilly and Company v Teva Canada Limited, 2011 FCA 220.
2 Apotex Inc v Abbott Laboratories, Limited, 2013 ONCA 555; Apotex Inc v Eli Lilly Canada Inc, 2011 FCA 358.
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