On March 28, 2018, in Adir v Apotex, 2018 FC 346 the Federal Court provided its decision for the accounting of profits portion of a bifurcated trial. The Federal Court of Appeal had previously affirmed the need to consider any non-infringing alternative (NIA) in the causation analysis and remanded this case back to the Federal Court in 2017 FCA 23.
The sole question in this decision on remand was “whether any of Apotex’s profits from export sales of perindopril could have and would have been realized through use of a non-infringing alternative.” The Federal Court concluded that Apotex had met the burden of proving it could have obtained a NIA of perindopril for export sales to the United Kingdom and Australia. However, Apotex would not have utilized the NIA as Apotex was committed to manufacturing in Canada, and would have chosen not to enter the United Kingdom and Australia at all, rather than doing so by contracting with a foreign third party. Accordingly, the Federal Court concluded that the NIA was not available to reduce the disgorgement of profits from Apotex in the award of $56,000,000 plus interest.
Notably, in this decision the Federal Court considered a non-economic factor in determining that Apotex would not have used the NIA. This appears to be a departure from the leading case of Merck v Apotex, 2015 FCA 171 (Lovastatin) which focused on purely economic factors regarding whether the defendant would have used an NIA.
Commentary by Norman Siebrasse is available here.
History of this case: Adir elected an accounting of profit: 2008 FC 825, aff’d 2009 FCA 222; FC rejected consideration of the NIA as a matter of law: 2015 FC 721; FCA allowed appeal in part remanding on the NIA issue: 2017 FCA 23; FC finds Apotex would not have used NIA and no reducing of award ordered: 2018 FC 346.
Summary By: Robert Dewald