On December 19, 2011, the Court of Appeal reversed the Trial Judge's finding that the 1993 version of section 8 of the Patented Medicines (Notice of Compliance) Regulations ("Regulations") applied to Apotex's claim against Merck relating to a prohibition proceeding regarding lovastatin (Merck's MEVACOR) (Apotex Inc. v. Merck & Co., Inc. et al., 2011 FCA 364, rev'g 2010 FC 1264).

The Court found that Merck's prohibition application was pending on March 11, 1998, the date that the 1998 version of section 8 came into effect and therefore the 1998 version applies. Specifically, the Court held that Merck's application remained alive on March 11, 1998, because the Court of Appeal had jurisdiction to hear Merck's pending appeal. Even though the issuance of the Notice of Compliance ("NOC") rendered the application moot, the Court could have exercised its discretion to hear the appeal and granted the application. The Court further noted that the 1998 version was more intended to clarify the 1993 version than to amend its substance and therefore, in the absence of clear legislator's intent, undue restrictions should not be placed on the circumstances entitling a party to a section 8 claim under the 1998 version.

The Court also considered Merck's infringement defence: Merck should not be liable for loss suffered as a result of Apotex being prevented from starting to infringe sooner (an ex turpi causa defence) (the patent had been found valid and infringed with respect to certain lots in a companion case - Merck & Co Inc. v. Apotex Inc. 2010 FC 1265, aff'd 2011 FCA 363). The Court found that Apotex satisfied the requirement under section 8(1) that Merck's application was dismissed and therefore, is entitled to claim the loss it suffered as a result of the Minister's delay in issuing the NOC. It further held that it is unnecessary to read an ex turpi causa exception into section 8(1) in order to prevent patent infringers from unjustly recovering compensation from a first person because this defence can be raised under section 8(5) so as to reduce or eliminate the amount of loss otherwise recoverable taking into account all relevant facts. The matter was remitted back to the Trial Judge to decide all issues of fact and law relevant to the quantification of Merck's liability.

Junyi Chen, Toronto

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