Intention Is Relevant To What 'Would Have' Happened In The But-For World: Comments On The Federal Court's Redetermination In Adir V Apotex Inc

In her judgment issued March 28, 2018,1 Justice Gagné provides the latest installment of Federal Court jurisprudence on the developing principles governing non-infringing alternatives (or NIAs) in the quantification of remedies for patent infringement. The decision follows from the Federal Court of Appeal sending back for redetermination the issue of the availability of non-infringing perindopril in proceedings for disgorgement of profits. Despite accepting that for a portion of the infringing period Apotex "could" have sourced non-infringing product for sale in the UK and Australia, Justice Gagné rejected that Apotex "would" have done so. Apotex had previously been found to infringe by making perindopril in Canada to supply those markets. Justice Gagné reaffirmed the court's prior judgment for the plaintiffs in the order of $60 million.

Since the Court of Appeal's formulation in Lovastatin2 of the test for an infringer to avail itself of an NIA, the "would have" branch has proven particularly difficult to satisfy. The court's reasons in Perindopril show it is also the least settled. By way of background, "could have" concerns whether it was in fact possible to produce an NIA and relates to issues of supply, capacity and availability. "Would have" is more subjective and looks at whether pursuing the NIA is something the infringer would have chosen to do. As stated by Justice Stratas in Venlafaxine:

Both "would have" and "could have" are key. Compensatory damages are to place plaintiffs in the position they would have been in had a wrong not been committed. Proof of that first requires demonstration that nothing made it impossible for them to be in that position—i.e., they could have been in that position. And proof that plaintiffs would have been in a particular position also requires demonstration that events would transpire in such a way as to put them in that position—i.e., they would have been in that position.3

Given its subjective nature, the "would have" requirement can be seen to raise a conflict between condemning the decision to infringe and accurately assessing its economic impact.4 Support for condemnation exists in UK authority: "One is concerned with compensation for what the defendant has done by acting 'improperly'."5 Consistent with this authority, at the trial level in Lovastatin, the Federal Court rejected the notion that a tortfeasor could excuse its conduct on the basis of an NIA: "Tort law is not concerned with whether the defendant could or would have acted differently in a 'but for' world where no wrongful conduct occurred."6 Likewise, in Cefaclor the court rejected the relevance of a defendant's hypothetical actions: "[C]ausal connection must be determined based on an examination of the facts as they existed at the...