A novel claim for damages under centuries-old monopolies legislation survives motion to strike

A claim by Apotex in the Ontario Superior Court pursuant to the English Statute of Monopolies (which was enacted in 1624) and Ontario legislation entitled An Act concerning Monopolies and Dispensation with penal laws, etc. (dating from 1897) has survived a motion to strike.

Both the Statute of Monopolies and the Ontario Act provide, in effect, that a person who exercises an unlawful monopoly by reason of a patent can be liable for treble damages and double costs if their action “grieves, disturbs or disquiets” another party. Apotex claimed, that:

• Lilly procured an invalid patent which resulted in an unlawful monopoly;
• Lilly subsequently grieved Apotex by causing the patent to be added to the Patent Register;
• Teva successfully obtained a declaration that the patent was invalid and void – (that decision was subsequently affirmed on appeal), while Apotex was litigating Lilly’s prohibition application under the NOC Regulations with respect to the same patent; and
• Apotex was “grieved, disturbed or disquieted” in its business by reason of Lilly initially obtaining and then seeking to use or exercise its unlawful monopoly

Lilly moved to strike the cause of action founded on the Statute of Monopolies and its Ontario counterpart legislation on the basis that it was “plain and obvious” the action could not succeed. Apotex pursued the claim in conjunction with a claim for s.8 damages under the NOC Regulations.

Justice Dunphy held that the claim was novel and could not be struck. Justice Dunphy held that the trigger for the claim under the Monopolies Acts was the voluntary step of procuring what has since been shown to have been an unlawful monopoly and then putting it to use to grieve and/or disquiet Apotex. The trigger for the claim under s. 8 was the dismissal of Lilly’s application for prohibition under s. 6. Justice Dunphy concluded that it was “at least arguable that there are two separate and distinct causes of action at play here, even if there is substantial overlap between them.”

Justice Dunphy noted that even if Lilly had done nothing upon receipt of Apotex’ Notice of Allegation and an NOC simply issued at the end of the 45-day waiting period, it might be arguable that Apotex had been grieved by being made to wait the 45 days which it would not have had to do had the originator not wrongfully placed the invalid patent on the register in the first place.

Lilly also argued that the Patent Act and the PM(NOC) Regulations constituted a “complete code” and thus Apotex’ claim could not proceed. Justice Dunphy found that the jurisprudence on this issue was “inconclusive” and such an argument is difficult to sustain where the contest is between a specific statute and a subordinate regulation, particularly where neither the regulation nor the statute purport expressly to exclude the prior existing legislation.

A copy of the Court’s decision can be found here.