Levofloxacin Liability Decision Affirmed on the Facts

Teva Canada Ltd v Janssen Inc 2018 FCA 33 Dawson JA: Webb, Gleason JJA aff’g 2016 FC 593 Hughes J and 2016 FC 727
            1,304,080 / levofloxacin / LEVAQUIN

In Janssen-Ortho v Novopharm 2006 FC 1234 aff’d 2007 FCA 217, Hughes held that Janssen’s 080 patent was valid and infringed by Teva’s sale of its levofloxacin product [3]. In the damages phase, 2016 FC 593,Hughes J ordered Teva to pay damages to Janssen Canada in the amount of $5.5m, and to pay damages to Janssen US of just over $13m [4]: see here.

Teva appealed and the FCA has now affirmed. Hughes J’s decision turned almost entirely on the facts, with the exception of his holding that Janssen US had standing under s 51 as a person claiming under the patentee, which I will discuss in tomorrow’s post. Apart from the issue of standing, Teva’s appeal focused primarily on factual errors. Unsurprisingly, the FCA rejected all of Teva’s attacks on Hughes J’s factual findings. 

One point of principle raised by Teva was the complaint that the Lord Shaw’s admonition in Watson, Laidlaw & Co (1914), 31 RPC 104, 118 that compensation is accomplished “by the exercise of a sound imagination and the practice of the broad axe,” quoted with approval by Hughes J [69], is inconsistent with the FCA’s statement in Lovastatin FCA 2015 FCA 171, [43] that damages assessment must aim at "perfect compensation." The FCA explained that there is no inconsistency. The point of the Court’s observation in Lovastatin FCA is that damages must aim in principle for perfect compensation, so that lawful competition and the effect of a non-infringing alternative must be taken into account. Lord Shaw’s remark recognizes that in practice the goal of perfection is seldom achieved [34]-[36]. In assessing damages, a court must account for eg competition from a non-infringing alternative in the "but for" world, but it is not required to arrive at a number which perfectly reflects that hypothetical world; it is only required arrive at the best estimate on the evidence.

The FCA also reaffirmed that damages may be awarded for price suppression [78], and for losses sustained after expiry of the patent, so long as they were caused by the infringement [83]. Neither of these points is novel.

Teva also appealed Hughes J’s costs award of a lump sum of $1m, 2016 FC 727, on the basis that the award is excessive when compared to the amount an assessment officer would have awarded had the Janssen plaintiffs elected to have their costs assessed [153]. The FCA rejected this, noting that there is no requirement that a lump sum award correspond to the amount an assessment officer would assess [156].