Teva is Not Barred from Pursuing s.8 Action as the Supreme Court of Canada Denies Leave to Appeal
November 30, 2012
In Wyeth LLC, et al. v. Teva Canada Limited (SCC #34918) the SCC dismissed with costs an application for leave to appeal a consolidated decision of the Federal Court of Appeal (Teva Canada Limited v. Wyeth LLC, 2012 FCA 141) that the equitable doctrine of election did not bar Teva from pursuing a damages action against Wyeth under section 8 the Patented Medicines (Notice of Compliance) Regulations (PM(NOC)). Ratiopharm had commenced the action based on having been kept off the market by Wyeth as a result of an application for a prohibition order under the PM(NOC) regulations that was ultimately dismissed. Ratiopharm was later purchased by and amalgamated into Novopharm (now Teva) and Teva continued the s.8 claim after the amalgamation. Wyeth argued that this continuation should be barred based on the equitable doctrine of election. The argument was that Novopharm had participated in the decision to bring the application for a prohibition order as a licensee of Wyeth under the relevant patent at the time and so should not be entitled to claim damages based on that decision. The Federal Court of Appeal determined that terms of the licence agreement did not entitle Novopharm to compel Wyeth to seek a prohibition order. Rather, Wyeth had independently decided to do so after Novopharm had consulted with Wyeth on the issue. As it was not Novopharm’s decision to commence NOC proceedings, the equitable doctrine of election did not apply. The Federal Court of Appeal further held that any s. 8 damages should not be reduced by the amount of gains realized by Novopharm under the licence agreement with Wyeth for the period at issue. The Court of Appeal recognized that amalgamation under section 186 of the Canadian Business Corporations Act does not cause profits earned by a corporate predecessor during a pre-amalgamation period to become the profits of the amalgamated corporation for the same period.