Ontario Court Grants Summary Judgment
Dismissing Apotex’s Claim for Unjust
Enrichment
by: Fiona Legere, Steven Mason and Brooke
MacKenzie
On January 15, 2013, the Honourable Justice Quigley
of the Ontario Superior Court granted summary judgment
to Abbott and Takeda, denying Apotex’s claim for
disgorgement of profits on the basis of unjust
enrichment.
The case involved a claim for damages arising from
Abbott’s invocation of the
Patented Medicines (Notice
of Compliance) Regulations. The PM (NOC)
proceedings were ultimately discontinued by Abbott and
Apotex thereafter brought an action, in the Ontario
Court, for (a) damages under section 8 of the
PM
(NOC) Regulations; and (b) disgorgement of Abbott’s
profits on the basis of unjust enrichment.
In the Federal Court, generic drug manufacturers have
been limited to their own lost profits as a remedy for
any alleged delay arising from the invocation of the
PM (NOC) Regulations. Most recently, the
Federal Court of Appeal in
Apotex Inc. v. Eli Lilly
Canada Inc., 2011 FCA 358, struck out a claim by
Apotex for a disgorgement remedy.
The Ontario Court initially took a more circumscribed
view and refused to strike out claims brought by
generic’s for disgorgement. In lengthy reasons for
decision, Justice Quigley granted Abbott’s motion for
summary judgment, providing three independent bases to
support his decision:
- Apotex could not rely on equitable rights for
additional remedies not provided for in the PM
(NOC) Regulations. The PM (NOC) Regulations
provide a "complete code" for compensation, which
ousts common law rights that might have operated but
for the statutory scheme. Parliament expressed its
intention to eliminate any claim to unjust enrichment
with "irresistible clearness".
- Apotex could not meet the tripartite test for
unjust enrichment because the operation of the
PM (NOC) Regulations constitutes a juristic
reason for any alleged enrichment.
- Apotex could not meet the tripartite test for
unjust enrichment because the September 2008
settlement agreement between the parties constitutes a
juristic reason for any alleged enrichment.
The Court held that the key issue in dispute was a
question of law, and a comprehensive documentary record
permitted the Court to make any necessary findings. The
Court agreed with Abbott that this was precisely the
kind of case that can and ought to be resolved by
summary judgment, on the basis of the "full appreciation
test" articulated in the Ontario Court of Appeal’s
decision in
Combined Air Mechanical Services Inc. v.
Flesch.
The decision is an important win for innovator
pharmaceutical companies in Canada because it forecloses
claims for disgorgement of an innovator’s profits merely
because an innovator unsuccessfully invoked the
PM
(NOC) Regulations. Justice Quigley’s reasons make
clear that no such claim lies in unjust enrichment where
innovators avail themselves of the procedures provided
for under the
PM (NOC) Regulations.
Importantly, the law in Ontario is also now
consistent with Federal Court jurisprudence.
Although Apotex argued that the Ontario Court was not
bound by and should not follow the Federal Court
jurisprudence, the Court held that there were strong
reasons to do so. Indeed, the Court admonished Apotex
for "seek[ing] to circumvent determinations that have
already been made by the Federal Court" which could
"leave itself open to an allegation that it is engaging
in forum shopping".
A copy of the decision can be viewed
here.
