FCA Rules on Apotex Inc. v. Merck Frosst

The Federal Court of Appeal released its judgment, on June 4, 2009, in Apotex Inc. v. Merck Frosst, 2009 FCA 187, its first substantive judgment under s. 8 of the Patented Medicines (Notice of Compliance) Regulations. In so doing, the court provided the first appellate opinion as to the scope of liability flowing from the dismissal of prohibition applications under the pre-2006 version of the Regulations. The decision is of great significance to both the innovative and generic drugs industries as it provides clarity in an area of law that has been uncertain since the first case was commenced under the Regulations in 2001.

In a unanimous judgment, the court affirmed the award of damages to Apotex in the trial judgment of Justice Roger Hughes, allowed Merck's appeal, in part, and dismissed Apotex's related appeal with costs. Writing for the court, Justice Marc Noël held that s. 8 of the Regulations is within the constitutional authority of the federal government pursuant to s. 91(22) of the Constitution Act and is enabled by s. 55.2(4) of the Patent Act. The court held that it has jurisdiction to hear and decide actions pursuant to s. 8, as this is a remedy pursuant to an Act of Parliament respecting a patent of invention as defined in s. 20(2) of the Federal Courts Act. The court also held that while generic manufacturers are entitled to be compensated for damages suffered during the defined period in the Regulations, they are not entitled to recover an innovator's profits, nor can they recover damages for permanent loss of market share suffered after they receive a notice of compliance.

Andrew Brodkin, Kenneth Crofoot and Jerry Topolski of Goodmans LLP represented the plaintiff, Apotex Inc.

An Ogilvy Renault LLP team of Patrick Kierans, Jason Markwell, Kristin Wall and Andres Garin represented the defendant, Merck Frosst.