Monday, 8 September 2014

British Columbia gives go-ahead to consumers' class action for patent abuse

Via Toronto law firm Fleck & Chumak LLP's IP Address newsletter comes news of Low v Pfizer Canada Inc., 2014 BCSC 1469, a Supreme Court of British Columbia ruling which certified a class action on behalf of those who purchased Pfizer's erectile dysfunction drug between 2006 and its subsequent invalidation by the Supreme Court of Canada in 2012. The class seeks to pursue a claim bases on the allegation that Pfizer obtained a patent wrongfully, used it to keep generic competition off the market, and thereby inflated prices. The ground of invalidation was that Pfizer failed to disclose the invention adequately. The Viagra sildenafil patent was litigated in many jurisdictions, and with a variety of outcomes. As the newsletter notes:
In deciding the preliminary question of whether the class action against Pfizer could proceed at all, the Court considered three legal theories put forward by lawyers representing the consumers: (1) unlawful interference with economic relations, (2) waiver of tort and (3) unjust enrichment. The court applied the "plain and obvious" test: whether it was plain and obvious each cause of auction could not succeed.

The Court concluded that the causes of action in intentional interference with economic relations and unjust enrichment could proceed. The Court held that if Pfizer obtained the patent fraudulently or via an abuse of the patent procedures, then the elements of the test for unjust enrichment - including an absence of a juristic reason for the enrichment - would be met. As well, the Court held that the consumers would have standing to pursue the interference tort on the theory that Pfizer inflicted actionable injury on the generic competition to the detriment of the consumers.

The Court's decision is ground-breaking as it was previously believed that the federal patent legislation and accompanying regulations made up a "complete code" with respect to patent rights and remedies. With this decision, the court has opened up the possibility of a new, direct remedy available to consumers against patent owners.
It should be stressed that the permission given to the class to bring the action does not give an indication of the likelihood that it will succeed when it gets to trial.  The "plain and obvious" test looks rather like the test of whether there exists a triable issue in British case law.  Given the frequency with which commercially successful patents are subsequently invalidated for one reason or another, patent owners may be watching for the outcome of this action with more than a little interest,

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