Affirmed that Award under NOC Section 8 to Be Considered in Damages in Subsequent Infringement Action

AstraZeneca Canada Inc v Apotex / omeprazole (NOC) 2013 FCA 77 Sharlow JA: Blais CJ, Stratas JA aff’g 2012 FC 559 Hughes J (blogged here)
            LOSEC / omeprazole / 2,133,762, 1,292,693

AstraZeneca was unsuccessful in NOC proceedings against Apotex in respect of omeprazole, in which it sought an order of prohibition based on the ‘762 patent: 2004 FC 313. In this action, Apotex has now sought compensation under s 8 of NOC Regulations. But at the same time, AstraZeneca has brought an infringement action against Apotex, on the basis of the ‘693 patent, which is also related to omeprazole, with the action set down to be heard in April 2014 [FC 28]. The concurrence of the s 8 and infringement actions raises two questions. Substantively, if AstraZeneca is successful in the infringement action, how will this affect Apotex’s entitlement to s 8 compensation? Apotex's position is that the alleged infringement of the '693 patent is not relevant to Apotex's s 8 claim [FC 141]. AstraZeneca's position’s is that if it is successful in the infringement action, this operates as a defence to the s 8 claim; the claim is for sales that are lost as a result of the statutory stay, but if Apotex had made those sales, it would be liable in damages to AstraZeneca for infringement of the ‘693 patent, so there really are no losses as a result of the statutory stay [FC 140]. Put another way, Apotex is not entitled to damages for loss of a market that it had no right to enter. Consequently, AstraZeneca sought a delay of the s 8 proceeding pending the outcome of the infringement action. Hughes J had initially ordered that if AstraZeneca’s defence was determined to be viable in law, he would reserve judgment in the s 8 matter under final disposition of the infringement action [FC 28].

The decision under appeal dealt with this question of whether AstraZeneca’s defence is viable in law [FC 140 - 50]. As discussed in my post on that decision, Hughes J held that the infringement action could potentially serve as a basis for a defence in the s 8 proceeding on the basis of ex turpi causa. However, procedurally, he changed his mind and refused to reserve judgment in the s 8 proceeding. Instead, any such defence will be dealt with in the infringement action:

[148] 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. It would be unconscionable for the present proceedings to come to a halt or for this Court to refuse to award compensation simply because another action on another patent was pending. To do so would be simply to encourage such actions to be brought. The best way to deal with the matter is as I have set out above.

Hughes J’s judgment on this point has now been affirmed by the FCA in brief reasons from the bench, quoting and agreeing with this paragraph [7-8].