Eli Lilly Canada Inc. v. Teva Canada Limited, 2017 FC 88 (Olanzapine*)

Justice O'Reilly - 2017-04-04

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Teva seeks damages from Eli Lilly as compensation for having been prevented from coming to market in 2006-2007 with a generic version of a medicine called olanzapine (see PM(NOC): 2007 FC 596; infringement action: 2009 FC 1018, 2010 FCA 197, 2011 FC 1288, 2012 FCA 232). ... In effect, the dispute has come to me for a third time to decide a new question: What is the amount of the damages, if any, to which Teva is entitled under the Regulations for the time it was kept off the market? To answer that question, one must create a hypothetical world in which Lilly would not have brought an application whose effect was to deny Teva access to the olanzapine market. In that hypothetical world, Teva might have come to market on the strength of an NOC for generic olanzapine as early as March 3, 2006, when the Minister would have granted an NOC to Teva but for the proceedings initiated by Lilly. Lilly disputes that start date on the basis that Teva had earlier abandoned its claim for damages, and that Teva was not actually in a position to bring its product to market until the spring of 2007, at the earliest. Lilly also raises a number of grounds on which Teva’s damages should be discounted, including: Teva has included losses that are not attributable to the operation of the Regulations; Teva has failed to take account of the likely presence of another generic manufacturer, Apotex Inc, in the market at the same time; Teva has overstated the actual profits it would have realized in the various provinces; and Teva’s claim fails to include the full amounts that Teva would have given to pharmacies to promote its product (so-called “trade-spend”). ... The parties disputed two major evidentiary issues. The first was whether fact witnesses could testify about what they thought would or would not have happened in the but-for world. ... The second evidentiary issue related to alleged hearsay evidence. ... The generic portion of the olanzapine market would have been the same as it was in the real world. Teva’s olanzapine product would have been listed at 70% of brand price on the various formularies... Teva was in a position to supply the entire generic market during the liability period, and no other generics would have been present. No allowance for pipefill should be included in lost sales. Teva’s trade-spend rate for olanzapine would have been 29.4%. ... Teva is entitled to pre-judgment interest calculated at a variable rate from March 3, 2006, and post-judgment interest as of the date this judgment is issued.

Decision relates to:


Canadian Intellectual Property