Federal Court Of Appeal Dismisses Apotex's Appeal Of $61M Profits Award To Servier/ADIR For Infringement Of Perindopril Patent

On March 11, 2020, the Federal Court of Appeal dismissed Apotex's appeal of the Federal Court's decision ordering Apotex to pay over $61M from an accounting of profits from Apotex's infringement of ADIR's perindopril patent (Apotex Inc v ADIR 2020 FCA 60, aff'g 2018 FC 346, previously reported).

Background

Starting in 2006, Apotex manufactured perindopril tablets in Canada, and sold these in Canada and to its U.K. and Australian affiliates. As previously reported, in 2008, the Federal Court found these activities infringed ADIR's Canadian Patent No. 1,341,196 (196 patent) and enjoined Apotex from infringing the patent. The plaintiffs elected an accounting of Apotex's profits as their remedy.

While Apotex did not dispute it was required to disgorge profits from its domestic sales, Apotex argued that its profits from sales to its U.K. and Australian affiliates were not attributable to infringement of the 196 patent. Apotex asserted it could have avoided infringement, and made the same or higher profits, by enlisting third-parties in foreign countries to manufacture the perindopril tablets.

In 2015, the Federal Court dismissed the legal relevance of Apotex's alleged non-infringing alternative defence, but the Federal Court of Appeal held that was an error (as reported previously, ADIR v Apotex Inc, 2015 FC 721, rev'd 2017 FCA 23). The Federal Court of Appeal therefore remitted to the Federal Court the factual issue of whether, in a hypothetical world where Apotex did not infringe, Apotex could and would have obtained non-infringing perindopril from three specific third-party suppliers, and, if so, whether Apotex could and would have sold this material to its U.K. and Australian affiliates.

In 2018, following a further hearing, the Federal Court re-affirmed the quantum of profits from its original judgment, holding that Apotex and Apotex Pharmachem must collectively pay over $61 million (ADIR v Apotex Inc, 2018 FC 346, previously reported). In so holding, the Court held that in the hypothetical world, Apotex would have done exactly what it did in the real world, pursued its technology transfers to its own foreign affiliates rather than third-party suppliers, and would have entered the foreign markets at a later date than it did in the real world. As such, Apotex had not established it would have had a non-infringing alternative, and was required to disgorge all of its profits.

Present appeal

No palpable and overriding error

The Court of Appeal...