Section 8 Defence of Infringement Must be Grounded in Actual Infringement

On October 10, 2019, the Federal Court of Canada, in Pharmascience Inc. v Pfizer Canada ULC 2019 FC 1271, held that reliance on section 8 of the Patent Medicines Notice of Compliance Regulations (the Regulations) must be grounded in actual, and not hypothetical or potential, infringement.

Prior to the recent amendments to the Regulations, a patentee whose application for a prohibition order was unsuccessful could commence an action for patent infringement.  Under this regime, a generic that was successful in obtaining a Notice of Compliance (NOC) could still ultimately be found liable for patent infringement, especially given the difference in evidence in an application under the Regulations compared to a patent infringement action. When a generic was successful in NOC proceedings, section 8 of the Regulations permits it to bring an action to recover damages for the sales it lost as result of the statutory stay caused by the patentee’s decision to commence litigation.  It is well established that where a patentee proves infringement in a subsequent action, the generic will not be entitled to damages for its lost sales during the period of the statutory stay.   

In Pharmascience Inc. v Pfizer Canada ULC 2019 FC 1271, Pfizer Canada ULC unsuccessfully sought to expand this principle to the situation where the patentee did not commence a subsequent action for patent infringement after an unsuccessful application for a prohibition order.  In dismissing the patentee’s arguments, Justice O’Reilly noted that infringement is only relevant as a defence to section 8 damages when the infringement has been established, by either proof or agreement.  Hypothetical infringement is not relevant to the analysis of the “but-for world” of section 8 damages because the patentee did not bring an infringement action in the real world.

Summary By: Matt Frontini