Save the Date: Federal Court Orders Novel Bifurcation for Section 8 Start Date

In Apotex v. Pfizer, the Court ordered an innovative bifurcation order, separating the determination of the start date from the rest of the section 8 proceeding. Apotex had initiated a Section 8 damages proceeding pursuant to the Patented Medicines (Notice of Compliance) Regulations against Pfizer in respect of atorvastatin, which Pfizer markets under the LIPITOR brand.

Section 8 allows a generic company that that has been improperly held off the market by the operation of the Regulations to seek damages against the brand company starting on the date that the generic’s submission was otherwise approvable, referred to as the “patent hold date”. The complication in this section 8 action was that the Minister of Health has certified two patent hold dates for Apotex’ atorvastatin products:  May 15, 2007 for Apotex’ product that contained amorphous atorvastatin and February 22, 2010 for a different Apotex formulation containing atorvastatin calcium propylene glycol solvate.

Apotex obtained Notices of Compliances for both of its atorvastatin formulations on May 19, 2010 but went to market only with its propylene glycol solvate formulation. Apotex’ position in the section 8 action was that in the hypothetical “but for” world (see our previous posts here) it would have marketed the amorphous atorvastatin formulation, such that patent hold date should be May 15, 2007.

Pfizer’s sought a bifurcation order on the proper start date, submitting that the determination of the proper start date would result in a more focused proceeding. Apotex opposed Pfizer’s motion on the basis that bifurcation would neither save time or costs.

The Court found that unlike other bifurcation motions, that seek to bifurcate liability issues from damages issues, the Order under consideration was novel engaging not only factual issues but also issues around statutory interpretation of the Regulations.  Prothonotary Aalto, following the test for bifurcation in  Garford Pty Ltd.  v. Dywidag  Systems International and Merck & Co.  v. Brantford Chemicals Inc.the Court went through a detailed analysis, applying the facts to the framework and concluded:

In considering all of these factors, on a balance of probabilities, it is my view that bifurcating the Start Date Issue will lead to saving of cost, time, and judicial resources.

The saving of time, cost, and judicial resources as well as streamlining were common reoccurring themes in the factorial analysis of Prothonotary Aalto.  Interestingly, Prothonotary Aalto noted that even though the bifurcation of start date issue would not put an end to the action, it didn’t need to.  Given the novel nature of the motion the Court ordered that each party bear its own costs.

A copy of the Prothonotary Aalto’s reasons may be found here.