Docket: A-93-14
Citation: 2014 FCA 138
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CORAM:
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SHARLOW J.A.
GAUTHIER J.A.
MAINVILLE J.A.
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BETWEEN:
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TEVA CANADA LIMITED
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Appellant
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and
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PFIZER CANADA INC., PFIZER INC., AND PFIZER IRELAND PHARMACEUTICALS
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Respondents
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REASONS FOR JUDGMENT
MAINVILLE J.A.
[1]
This is an appeal from an order of Justice de Montigny of the
Federal Court dated January 22, 2014, bearing citation number 2014 FC 69, which
dismissed an appeal from an order of Prothonotary Aronovitch dated August 20,
2013. The Prothonotary had struck those portions of the appellant’s Statement
of Claim seeking punitive and exemplary damages pursuant to an action under
section 8 of the Patented Medicines (Notice of Compliance) Regulations,
SOR/93-133 (the NOC Regulations).
[2]
This is a case relating to the drug
Viagra, which has been the object of much litigation. It is not necessary to
summarize the long history of proceedings with respect to this drug. The
relevant background for the purposes of this appeal may be adequately described
as follows.
[3]
On December 21, 2012, the appellant Teva Canada Limited (Teva)
commenced this action in the Federal Court under section 8 of the NOC
Regulations seeking compensation for losses suffered during the period
beginning on April 25, 2008 - the date it alleges that the competent Minister
would have issued to it a notice of compliance for its generic version of
Viagra - and ending November 8, 2012 - the date the Supreme Court of Canada
reversed the order granting the prohibition application brought by Pfizer
Canada Inc. and Pfizer Ireland Pharmaceutical (collectively referred to herein
as Pfizer).
[4]
In addition to compensatory damages, Teva
seeks punitive and exemplary damages. Teva also seeks a quantification of
Pfizer’s profits since, in its view, the governing rule for establishing the
quantum of punitive damages is proportionality. Teva submits that subsection
8(4) of the NOC Regulations allows it to make these claims. That
subsection provides that “the court may,
in respect of any losses referred in [subsection (1)], make any order for
relief by way of damages that the circumstances warrant.”
[5]
Pfizer brought a motion to strike those
portions of Teva’s Statement of Claim relating to punitive and exemplary
damages and the quantification of profits. The Prothonotary agreed with Pfizer,
and as noted above, her decision was upheld by Justice de Montigny.
[6]
The issue in this appeal is thus whether
a claim for punitive and exemplary damages may be sustained under section 8 of
the NOC Regulations. I am of the view that such a claim cannot
be sustained, substantially for the reasons expressed by Justice de Montigny at
paragraphs 28 to 37 of his order, which I adopt. I however add the following
brief comments.
[7]
Punitive damages may be awarded in exceptional cases of
high-handed, malicious, arbitrary or highly reprehensible misconduct that
represents a marked departure from ordinary standards of decent behaviour: Hill
v. Church of Scientology of Toronto, [1995] 2 S.C.R. 1130 at para. 196 (Hill);
Whiten v. Pilot Insurance Co., 2002 SCC 18, [2002] 1 S.C.R. 595 ("Whiten")
at para. 36.
[8]
I recognize that punitive damages are not limited to certain
categories of claims: Vorvis v. Insurance Corporation of British Columbia,
[1989] 1 S.C.R. 1085 at pp. 1104-1105; Whiten at para. 67. I also
recognize that punitive damages have been found to be available in all types of
cases, notably in patent infringement cases: Bell Helicopter Textron Canada
v. Eurocopter, 2013 FCA 219, 449 N.R. 111 at paras. 180 to 184; Lubrizol
Corp. v. Imperial Oil Ltd., [1996] 3 F.C. 40, 67 C.P.R, (3d) 1 at p. 20
of the C.P.R. ed.; Whiten at para. 44.
[9]
That being said, however, punitive and exemplary damages cannot
be available where the statutory regime underlying the claim explicitly or
implicitly precludes them. This is the case under the NOC Regulations,
which set out a comprehensive scheme with respect to compensation resulting
from the operation of the statutory stay it provides for.
[10]
Subsection 8 of the NOC Regulations specifically provides
that “the first person [the innovator
drug manufacturer] is liable to the second person [the generic drug
manufacturer] for any loss suffered during the period…”
(emphasis added). Our Court has held that this wording allows compensation for
losses actually incurred by a second person by reason of the operation of the
statutory stay contemplated by the NOC Regulations, but it does not
allow for other types of relief, such as disgorgement of profits or punitive
damages: Apotex Inc. v. Merck & Co., 2009 FCA 187, [2010] 2 F.C.R. 389 at paras. 89 to 91 and 101-102,
leave to appeal refused [2009] S.C.C.A. No. 347 (QL); Apotex Inc. v.
Eli Lily Canada Inc., 2011 FCA 358; 98 C.P.R. (4th) 323 at
paras. 22 and 23; Apotex Inc. v. Sanofi-Aventis Canada Inc., 2014 FCA 68
at para. 109 (dissenting opinion supported on this point by the majority);
Teva Canada Limited. v. Sanofi-Aventis Canada Inc, 2014 FCA 67, at para. 91
(dissenting opinion supported on this point by the majority).
[11]
At the hearing of this appeal, Teva further raised the application
of paragraph 8(5) of the NOC Regulations as a new justification for
seeking punitive damages. That paragraph provides that in “assessing the amount of compensation
the court shall take into account all matters that it considers relevant to the
assessment of the amount, including any conduct of the first or second person
which contributed to the disposition of the application under subsection 6(1)” (emphasis added). That paragraph relates to the assessment
of the losses suffered by the generic drug manufacturer as a result of the
stay. It allows the court to adjust the damages taking into account the
conduct of the parties with respect to the prosecution of the prohibition
application initiated under the NOC Regulations, such as when a generic drug
manufacturer would have improperly contributed to the delay in the disposition
of the application, thus unduly increasing the losses it suffered.
[12]
However, by its terms, paragraph 8(5) cannot sustain a claim for
punitive damages since, by their very nature, punitive damages are not “compensation”: Hill at
para. 196; Whitten at paras. 36 and 68.
[13]
The appeal should therefore be dismissed, with costs.
"Robert M. Mainville"
“I agree
K. Sharlow J.A.”
“I agree
Johanne Gauthier J.A.”
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