- Claim Seeking Punitive and Exemplary Damages Denied as Part of Section 8 Proceeding
- June 18, 2014 | Authors: Adrian J. Howard; Beverley Moore; Chantal Saunders; Ryan Steeves
- Law Firm: Borden Ladner Gervais LLP - Ottawa Office
TevaCanada Limited v. Pfizer Canada Inc., 2014 FCA 138
This is a case relating to the drug Viagra. This was an appeal from an order of the Federal Court which dismissed an appeal from an order of a Prothonotary. The Prothonotary had struck portions of Teva’s Statement of Claim seeking punitive and exemplary damages, as well as quantification of Pfizer’s profits, pursuant to an action under section 8 of the NOC Regulations.
The issue on this appeal was whether a claim for punitive and exemplary damages may be sustained under section 8 of the NOC Regulations. The Court of Appeal held that such a claim cannot be sustained, for similar reasons as those expressed by the Federal Court. The Court of Appeal added, however, that while punitive damages are not limited to certain categories of claims (i.e. they have been found to be available in all types of cases, notably in patent infringement cases), 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. The Court of Appeal noted that section 8 of the NOC Regulations provides that the first person is liable for “any loss suffered” during the period; this wording allows compensation for losses actually incurred, not other types of relief, such as disgorgement of profits or punitive damages.
Teva also raised the application of subsection 8(5) of the NOC Regulations as a new justification for seeking punitive damages. The Court of Appeal clarified that this provision relates to the assessment of the losses suffered by the generic company, and that 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. However, it was held that subsection 8(5) cannot sustain a claim for punitive damages since, by their nature, punitive damages are not “compensation”.
Teva’s application was therefore dismissed.