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IN THIS ISSUE: Proceeding commenced under PM(NOC) Regulations for a subsequent-entry biologic » Supreme Court of Canada news » Patented Medicine Prices Review Board news » Court finds AstraZeneca liable to Apotex under section 8 regarding omeprazole » U.K. Court of Appeal rules on illegality defence regarding infringement by Apotex in Canada » Proceeding commenced under PM(NOC) Regulations for a subsequent-entry biologic On May 18, 2012, the first proceeding under the Patented Medicines (Notice of Compliance) Regulations for a subsequent-entry biologic was commenced.
Federal Court releases first decisions assessing damages under section 8 of the PM(NOC) Regulations During May 2012, nearly 20 years after the Patented Medicines (Notice of Compliance) Regulations were passed, the Federal Court released the first decisions assessing the quantification of damages under section 8.
Supreme Court of Canada news Merck denied leave to appeal decision confirming liability under 1998 version of section 8 re: norfloxacin. On May 17, 2012, the Supreme Court denied Merck leave to appeal from the Court of Appeal decision that dismissed Merck's appeal from Justice O'Reilly's decision finding Merck liable under the 1998 version of section 8 of the Patented Medicines (Notice of Compliance) Regulations regarding Apotex's norfloxacin (Merck's NOROXIN). The Court of Appeal decision was reported in the December 2011 edition of Rx IP Update. Merck Frosst Canada & Co. v. Apotex Inc. (SCC Case No. 34627) Apotex denied leave to appeal decision affirming unavailability of unjust enrichment claim in section 8 actions. On May 17, 2012, the Supreme Court denied Apotex leave to appeal from the decision of the Court of Appeal affirming that Apotex could not pursue unjust enrichment claims in two separate actions relating to raloxifene (Eli Lilly's EVISTA) and pantoprazole (Nycomed's PANTALOC) as no cause of action independent of the operation of section 8 was alleged. Apotex Inc. v. Nycomed Canada Inc. (SCC Case No. 34669), Apotex Inc. v. Eli Lilly Canada Inc. (SCC Case No. 34670)
Health Canada news Health Canada releases new guidance documents on comparative bioavailability. On May 22, 2012, Health Canada released the following Guidance Documents: "Conduct and Analysis of Comparative Bioavailability Studies" and "Comparative Bioavailability Standards: Formulations used for Systemic Effects" which "update and consolidate eleven existing Health Canada documents related to the conduct and analysis of comparative bioavailability studies and the standards to be met in those studies". The Guidance documents apply to submissions filed on or after July 1, 2012. However, where the requirements are reduced, the requirements are effective immediately. Where the requirements are increased, the increased requirements will only be applied to studies initiated on or after July 1, 2012.
Patented Medicine Prices Review Board news DIP Methodology technical working group releases follow-up recommendations. The Board's guidelines include the DIP Methodology to address situations where benefits to customers are reduced or end. In January 2011, the Board established a DIP Methodology technical working group to identify solutions to make the methodology more workable. As reported in the May 2011 edition of Rx IP Update, in the final report of the group presented to the Board on March 4, 2011, the working group recommended that the method in which the current DIP Methodology is applied is not workable and suggested breaking it into two processes: a Simplified DIP Methodology and a Regular DIP Methodology. The Board accepted the recommendations in March 2011 on a one-year basis. The working group issued a follow-up report in April 2012. The group found that the methodology had been an effective solution to address and resolve investigations arising from the reduction or termination of the provision of benefits and recommended that the Board permanently adopt the pilot methodology. Final report. NPDUIS releases update to analytical report. As reported in the November 2011 edition of Rx IP Update, the National Prescription Drug Utilization Information System ("NPDUIS") is a partnership between the PMPRB and the Canadian Institutes for Health Information that aims to provide analyses of drug price, utilization and cost trends in Canada to support drug plan policy decision-making for participating levels of government. On September 30, 2011, NPDUIS released an analytical report titled "The Impact of Generic Entry on the Utilization of the Ingredient," which aimed to identify the impact of generic entry on the utilization of the ingredient itself in respect of seven top-selling drugs that lost patent protection in recent years. The study reported that the main implication of the findings is that the only savings that can be expected from generic entry are those related to the generic price discount. NPDUIS updated the report on May 7, 2012, to include a more detailed description of the projection methods used in the short-term analysis and corrected some figures and corresponding information in the text. Voluntary Compliance Undertakings. The Board recently approved Voluntary Compliance Undertakings ("VCUs") for Pfizer's DIFLUCAN (VCU), Janssen's PARIET (VCU) and Novartis's TRILEPTAL (VCU).
Recent Court decisions Patented Medicines (Notice of Compliance) Regulations Court finds AstraZeneca liable to Apotex under section 8 regarding omeprazole. Justice Hughes held that Apotex is entitled to be compensated under section 8(1) for damages from January 3, 2002, to December 30, 2003, by reason of a prohibition proceeding (T-2311-01, relating to omeprazole capsules) that was dismissed. The quantum of damages will be the subject of a separate reference. Justice Hughes held that section 8 was not invalid as being: unconstitutionally vague and ambiguous; draconian, harsh and punitive; or inconsistent with NAFTA and TRIPS. Further, Justice Hughes held that Apotex was a "second person" and rejected AstraZeneca's argument based on the lack of approval of Apotex's second manufacturing site. Regarding AstraZeneca's pleading of infringement (which is the subject of a separate action), Justice Hughes referred to the recent U.K. Court of Appeal decision Les Laboratoires Servier v. Apotex Inc., [2012] EWCA Civ. 593 (see brief below) and decided that "this solution accords with what may properly be done in the present situation. A Court hearing the pending infringement action, if it concludes that the patent is valid and has been infringed by Apotex in making the omeprazole drug that is the subject of these proceedings, can at that time craft a remedy that is appropriate, having in mind any compensation awarded in these proceedings." The case was the first trial to use a "hot tubbing" examination in which the expert witnesses took the stand at the same time and answered questions from the trial Judge and responded to answers given by each other. Apotex Inc. v. AstraZeneca Canada Inc., May 11, 2012. Other decisions U.K. Court of Appeal rules on illegality defence regarding infringement by Apotex in Canada. The U.K. Court of Appeal, in Les Laboratoires Servier v. Apotex Inc., [2012] EWCA Civ. 593, considered whether Justice Arnold ([2011] EWHC 730) properly applied the illegality defence to disentitle Apotex from recovering damages from Servier on an undertaking given to obtain an interim injunction relating to perindopril erbumine (Servier's COVERSYL). Apotex sought to recover damages following the Court's finding that the U.K. patent at issue was invalid: [2007] EWHC 1538, aff'd [2008] EWCA Civ 445. Justice Arnold disallowed damages for Apotex's lost profits as Apotex would have infringed a Canadian patent. Prior to the appeal hearing, Apotex accepted that what the Canadian court would have ordered Apotex to pay for infringement in manufacturing and exporting for sale in the U.K. absent the injunction should be deducted from its damages. Servier maintained it was entitled to any remaining profit. The Court of Appeal allowed Apotex's appeal, noting that — particularly in view of Apotex's concession — the illegality defence does not defeat Apotex's claim. The concession placed Apotex in the position it would have been had there been no interlocutory injunctions in the U.K. without offending comity with Canada. The Court found that Apotex was relying on an unlawful act that is sufficiently causative of its claim to engage in principle the illegality defence: Apotex's manufacturing costs are an essential element of its calculation of lost profit; Apotex therefore must rely directly on the manufacturing that would have taken place unlawfully in Canada. The Court also pointed to four factors in support of allowing the appeal (in addition to the concession), including that sales made in the U.K. would not have been unlawful.
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