Docket: T-1843-14
Citation:
2014 FC 1186
Toronto, Ontario, December 9, 2014
PRESENT: Prothonotary Kevin R. Aalto
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BETWEEN:
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APOTEX INC.
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Plaintiff
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and
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PFIZER CANADA INC.
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Defendant
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ORDER AND REASONS
[1]
This motion is brought on behalf of the
Defendant (Pfizer). It seeks, inter alia, the following relief:
1.
An Order striking paragraphs 1, 11 and 17 (the “Impugned Paragraphs”)
of the Statement of Claim (Claim) of Apotex Inc. (Apotex) dated August 26,
2014;
2.
In the alternative, an Order requiring Apotex to
provide material facts and the particulars of the following Impugned Paragraphs
of the Statement of Claim as follows:
(a)
With respect to paragraphs 1 and 17 of the
Statement of Claim:
(i)
the nature of the damages claimed;
(ii)
the type of loss or losses that Apotex has
allegedly suffered;
(iii)
the quantum of losses claimed, including whether
the quantum exceeds $50,000.00 as required by Rule 182 of the Federal Court
Rules.
(b)
With respect to paragraph 11 of the Statement of
Claim, how Apo-Eletriptan “became approvable” under the Food and Drug Act (“FDA”) Regulations
on May 22, 2012.
[2]
This is a Section 8 Damages Claim under the PMNOC
Regulations.
[3]
The Claim is very brief, comprising less than 7
pages of text and 18 short paragraphs. Paragraph 1 (a) of the Claim claims
damages as follows:
1.
The Plaintiff, Apotex Inc. (“Apotex”), claims:
(a)
damages suffered by Apotex in respect of the
delay in issuance to Apotex of a Notice of Compliance (“NOC”) for its eletriptan hydrobromide tablets for oral
administration in 20 mg and 40 mg strengths (“Apo-Eletriptan”) by reason of the Defendant’s institution and
prosecution of proceedings under the Patented Medicines (Notice of
Compliance) Regulations (the “Patent
Regulations”);
(b)
pre-judgment and post-judgment interest;
(c)
costs of this action on a scale to be determined
by this Honourable Court; and
(d)
Such further and other relied as this Honourable
Court deems just.
[4]
The Claim then goes on to describe in simple
terms the basis for the claim for damages including the fact of the serving of
a Notice of Allegation and the commencement and ultimate discontinuance of a Notice
of Application seeking to prohibit the issuance of a Notice of Compliance to
Apotex for its drug product. The Claim also asserts the alleged time frame for
the Section 8 Damages. This form of Claim, in almost identical terms, has been
used by Apotex in other Section 8 Damages cases.
[5]
Pfizer seeks particulars of various paragraphs
of the Claim. In its Written Representations Pfizer makes the surprising
statements: “The Defendant is unable to
understand the case against it” (paragraph 2)
and “Pfizer cannot now know the case to be met,
cannot go about gathering evidence or organize its case in a knowledgeable way
and must take the broadest possible time-wasting approach to discovery” (paragraph 14). Pfizer is a Defendant in at least
one of those other proceedings where a similar statement of claim was issued
and in which no motions to strike or motions for particulars were brought.
[6]
Pfizer raises three matters which it argues in
this case should either be struck or particulars provided.
[7]
The first issue concerns the use of the phrase “became approvable” in
paragraph 12 of the Claim as it relates to Apotex’s drug product. That issue
was resolved by virtue of Apotex describing the nature of “became approvable” in
its Written Representations. Notwithstanding the clarification in Apotex’s
Written Representations, the use of the phrase is self-evident and would
neither have been struck nor would particulars have been ordered.
[8]
The second issue relates to the scope of Section
8 Damages. Pfizer argues that the scope of the damages as claimed is unclear.
Pfizer argues that the purpose of pleadings is to provide the opposing parties
with a clear understanding of the case they have to meet. In argument, Pfizer
relied upon the Rules relating to pleadings and to particulars (Rules 181 and
182 in particular) and several of the cases which deal with those requirements.
[9]
Notwithstanding the able argument of Pfizer’s
counsel, I am not persuaded that particulars should be given of the damages
claimed. Section 8 Damages, as they are evolving in the case law, are their
own unique form of damages as defined in the PMNOC Regulations. As was
observed in oral reasons for decision dated April 6, 2011 in, Apotex v.
Pfizer Canada Inc. et al. (Court File No. T-1736-10):
The Defendants argue that they require particulars in order to fence
in the clam of Apotex and to ensure they know the types of claims for damages
that they are being faced with. They need this in order to plead as to whether
or not a particular head of damage is or is not appropriate or recoverable
under Section 8.
There is some substance to that particular argument. The
difficulty, however, is that damages are an unknown commodity; not in the
quantum sense, but in the contextual sense as to what comprises those damages.
It is a bit of a moving target, because information is required from the Pfizer
Defendants in order to be able to determine some of the specific elements that
will make up the heads of damage.
The Court is very sensitive to the fact that the rules require that
the nature of the damages be pleaded. The nature of the damages in this case
is not clear from the pleading because it simply claims damages. Specifically,
in paragraph 1(a), “Damages suffered by Apotex in respect of the delay in issuance to
Apotex of a Notice of Compliance,” et cetera.
The scope of those damages are not, in anyway, defined. To
properly, fit within the rules of pleading, there should be some explanation of
the nature of those damages. In the ordinary course, that would be a
legitimate claim for particulars. However, in Section 8 cases, because of the
unknowns, this is not a breach of contract case where you can say, “You could
have sold X number of widgets at such and such a cost, and what your cost of
goods were and the net profit that you would have earned.” This is,
as I described it during argument, a bit of a crystal ball gazing exercise in
that you are trying to predict what would have happened through a particular
timeframe.
Information in the possession of Pfizer is essential for Apotex to
be able to define, in any real way, the complete nature of those damages. It
is a given that it will include, at some point, lost profits or costs incurred
by Apotex during the course of these many proceedings. These are sophisticated
clients that would understand those particular issues. It makes no sense at
this juncture for Apotex to provide a lengthy shopping list of each and every
possible claim it might assert for damages when such a list would be, in part,
largely speculative because of the unknowns in such cases.
To that extent, in my view, the nature of damages is best left to
the expert level of this proceeding based upon the facts that are elicited
during the course of examinations.
The Pfizer Defendants may argue that this does not afford them the
opportunity to examine on discovery as to the nature of the damages. However,
as I noted in earlier reasons in this motion, this is a case-managed case.
Pfizer must know the case it has to meet long before trial so that it can
inform its expert and seek the relevant evidence it needs.
[10]
In my view, these observations apply equally
here. Section 8 Damages are a statutory remedy and this Court and the Federal
Court of Appeal have delineated and continue to delineate the scope of those
damages. They are calculated from the creation by experts of the “but for” world of what
would have happened but for a patent holder issuing a Notice of Application
seeking to prohibit the Minister from issuing an NOC to a generic
manufacturer. Cases such as Apotex Inc v. Merck & Co., Inc., 2012
FC 620 set out the mechanism for the calculation of Section 8 Damages and cases
such as Teva Canada Limited v. Sanofi-Aventis Inc., 2014 FCA 67, Eli
Lilly Canada Inc. v. Novopharm Limited, 2013 FC 677. Apotex Inc. v.
Merck & Co. Inc., 2009 FCA 187 and others have created fence posts
around the scope of Section 8 Damages. Pfizer does not need particulars of the
Section 8 Damages claimed as that is all that is being claimed by way of
damages. Further, this case will be specially managed and any issues arising
in the proceeding can be efficiently dealt with.
[11]
A third very technical issue raised by Pfizer
relates to the fact that the Claim does not comply with the technical rules of
pleading in that the Claim does not state “where
monetary relief is claimed, whether the amount claimed, exclusive of interest
and costs, exceeds $50,000.00” (Rule 182(a)).
Perhaps because in proceedings arising under the PMNOC Regulations there
is an implicit assumption that Section 8 Damages exceed without question the
$50,000.00 threshold of simplified actions the requirement of Rule 182(a) need not
be followed. However, there is authority for the proposition that as Rule
182(b) is “clear and unambiguous” and that it “remains
an obligatory prescription for a statement of claim”
[see, International Water-Guard Industries Inc. v. Bombardier Inc., 2007
FC 285 at para. 14] it must be pleaded failing which it may be deemed that the
claim does not exceed $50,000.00. It is a simple matter to include this
particular plea and, in future, to avoid such motions as this it should be
included. In the circumstances of this case, however, I am satisfied that
relief from this technicality should be granted pursuant to Rule 55 and that
this action shall proceed on the basis that the Section 8 Damages exceed
$50,000.00.
[12]
As noted, this case will proceed as a specially
managed proceeding. This will ensure that the matter proceeds in the just,
most economical and timely manner. Pfizer also sought an extension of time to
file its defence to the Claim. While Apotex argues they should be given but a
few days, in all of the circumstances, Pfizer’s request for a two week
extension is reasonable given that a Case Management Judge will have to be
appointed.
[13]
Apotex are entitled to their costs which will be
fixed and payable forthwith in the amount of $3,500.00 inclusive of
disbursements and HST.
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