Ontario Court Dismisses Apotex Patent Damages Case Grounded In 400 Year Old Statute Of Monopolies

• Published date: 16 March 2021
• Subject Matter: Intellectual Property, Patent, Trademark
• Law Firm: McCarthy Tétrault LLP
• Author: TechLex Blog, Sanjaya Mendis, James S.S. Holtom and Steven Tanner

Summary:

On March 8, 2021, the Ontario Court (2021 ONSC 1588) dismissed Apotex's action against Eli Lilly ("Lilly") by way of summary judgment, finding there was no genuine issue requiring trial. Apotex sought treble damages pursuant to the Ontario and English Statutes of Monopolies ("Monopolies Act"), and damages pursuant to the Trademark Act and the common law tort of conspiracy.

Apotex's Monopolies Act claims were grounded in an English statute originally enacted in the 17^th century. Relying on this statute and its Ontario equivalent, Apotex and other generic pharmaceutical companies have brought numerous actions over the past decade in the Ontario and Quebec provincial Courts seeking treble damages against innovative drug companies. These actions allege liability based upon alleged delay caused by the assertion of subsequently invalidated patents under the PM(NOC) Regulations. This decision is the first to dismiss these kinds of Monopolies claims, and Trademark Act claims on their merits. Initial attempts by innovators to strike them at the pleadings stage were largely unsuccessful given their novelty under Canadian patent law.

The Court granted Lilly summary judgment, finding the Patent Act and PM(NOC) Regulations provide a "complete code" for the use of patents and available remedies when patents are invalidated. Consequently, Apotex's claims were precluded because they were not contemplated by this carefully crafted regime. The Court also held that any harm to Apotex from being held out of the market "were authorized by law and flowed from the operation of law".

The Court also found that Lilly's listing of its patent on the patent register did not give rise to liability under the Trademark Act. At the time the patent was listed it was presumed to be valid. The act of listing the patent, despite that patent later being declared invalid was not a false or misleading statement actionable under the Trademarks Act.

Finally, the Court concluded there was simply no evidence to support Apotex's conspiracy claims.

Background

Apotex's claim for damages arose from Lilly's enforcement of its patent covering its antipsychotic drug, olanzapine. The patent issued in 1998 and was successfully asserted in PM(NOC) proceedings against Apotex, which delayed Apotex from launching its generic version of olanzapine. However, in subsequent proceedings involving a different generic manufacturer, Lilly's patent was declared invalid under the Patent Act. Thereafter, Apotex...