Ontario Superior Court Dismisses Apotex’s Section 8 Claim For Damages Regarding Atomoxetine Despite Dismissed Prohibition Proceeding

On March 30, 2023, the Ontario Superior Court of Justice (the Court) in Apotex v Eli Lilly, 2023 ONSC 1968, dismissed Apotex Inc.’s (Apotex) claim for damages under Section 8 of the Patented Medicines (Notice of Compliance) Regulations (the Regulations) that allegedly resulted from delays that Apotex encountered in bringing its generic atomoxetine product, Apo-Atomoxetine, to market.

In February 2008, Apotex filed its Form V, indicating that it would wait for Eli Lilly and Company’s (Lilly) patent for its branded drug, Strattera, to expire before requiring the Minister of Health (the Minister) to issue a Notice of Compliance (NOC).

In May 2008, another generic manufacturer, Teva, began an action in Federal Court (FC) to impeach Lilly’s Strattera patent (the Teva Action).  Shortly after Teva’s statement of claim was made public in July 2008, Apotex served Lilly with a Notice of Allegation (NOA) in respect of the Strattera patent; Lilly subsequently commenced a prohibition proceeding on October 10, 2008.

In September 2010, the FC issued its decision in the Teva Action, declaring Lilly’s Strattera patent to be invalid.  The Minister then granted Apotex its NOC for Apo-Atomoxetine on September 21, 2010.

In October 2010, the FC released its decision in the prohibition proceeding, dismissing it “on the ground of mootness”, as Apotex already received its NOC. 

Before the Court, Apotex argued that: (i) Lilly commenced a prohibition proceeding; (ii) the FC dismissed the prohibition proceeding; (iii) the Minister certified that, in the absence of the prohibition proceeding, Apotex would have received its NOC for Apo-Atomoxetine on October 10, 2008 instead of September 21, 2010; and (iv) it was therefore entitled to damages for loss of sales during the liability period. 

The Court rejected Apotex’s strict reading of Section 8, finding that a purposive interpretation of the Regulations denies Apotex’s claim for damages.  The Court noted that the FC dismissed the prohibition proceeding for mootness after expressly finding that none of the claims in Apotex’s NOA were justified and that Lilly’s claim for a prohibition order would have been successful.  The Court maintained that it is “only an unsuccessful, withdrawn, or discontinued prohibition application” that gives rise to Section 8 damages, citing Apotex Inc. v Merck & Co. Inc., 2009 FCA 187.

The Court emphasized the importance of the contents of the NOA and stated that in effect, allowing Apotex to claim damages “would allow it to be a free rider”, as it “wants damages for something that Teva accomplished in a different action even though Teva is not entitled to damages for what it had accomplished”.  The Court held that Apotex’s right to Section 8 damages was not triggered and stated that it would dismiss the claim on that ground alone.

In the interests of having a full record, the Court also addressed other arguments raised by the parties and conducted an analysis of certain components involved in the calculation of Section 8 damages to determine what Apotex’s loss would have been in a “hypothetical world” in which no prohibition proceedings existed.

Ultimately, the Court dismissed Apotex’s claim on the basis that: (i) the circumstances of the case did not trigger a right to compensation under the Regulations; and (ii) even if the circumstances gave rise to a right to compensation, Apotex did not sustain any damages, as it would not have entered the market any sooner in the hypothetical world than it did in the real world.

Summary By: Steffi Tran