Apotex, Inc V United States of America

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Apotex, Inc V United States of America

Apotex, Inc v United States of America in 2011

United States views on international law (based on the document “Digest of U.S. Practice in International Law”): In 2011, the United States fully briefed the jurisdictional issues in the arbitration under NAFTA information on Trade, Commercial Relations, Investment, Transportation in this legal Encyclopedia brought by Apotex, Inc., a Canadian pharmaceuticals corporation. On March 15, 2011, the United States submitted its Statement of Defense, available at (internet link) state.gov/documents/organization/159488.pdf. On May 16, the United States submitted its Memorial on Objections to Jurisdiction, available at (internet link) state.gov/documents/organization/169493.pdf. Excerpts follow from the U.S. Reply on Objections to Jurisdiction, submitted October 17, 2011, and available at (internet link) state.gov/documents/organization/177623.pdf. The tribunal established to hear the case convened for a hearing on jurisdictional issues in February 2012.


(1) 2. Apotex Inc. (Apotex) is a Canadian manufacturer of generic drugs. The company has extensive facilities in Canada for developing, testing, producing, and labeling its drugs. By its own admission, “Apotex does not reside or have a place of business in the United States.” Instead, Apotex exports its drugs from Canada to more than 115 countries around the world, including the United States, where they are sold by others.

(2) 3. Apotex alleges in this arbitration that it incurred substantial costs making abbreviated new drug applications (ANDAs) and complying with related regulatory standards in its testing, manufacturing, and labeling operations in Canada to allow export of its generic sertraline and pravastatin drugs to the United States. Apotex does not allege that the United States rejected its sertraline and pravastatin ANDAs. To the contrary, Apotex acknowledges that the U.S. government granted final approval of its ANDAs in 2006 and 2007, thereby allowing Apotex to export its drugs to the United States for sale by others. Nor does Apotex allege that it was the first applicant of “paragraph IV certifications” for generic sertraline or pravastatin drugs, making it eligible for 180 days of market exclusivity. Rather, Apotex challenged other companies' 180-day market exclusivity of generic sertraline and pravastatin drugs, and claims that Apotex's own generic drugs should have been available for sale in the United States just months earlier than was permitted. Apotex believes that this NAFTA investment tribunal is the appropriate forum to address that complaint.

(3) 4. This Tribunal lacks jurisdiction to hear Apotex's claims, for three reasons. First, Apotex lacks standing to bring a claim under NAFTA Chapter Eleven. Apotex purports to be an “investor” that made “investments” in the territory of the United States, but it has produced no evidence to that effect, and its own pleadings affirmatively belie its conclusory statements.


(4) 5. Apotex asserts, without establishing, that an ANDA is an “investment” under Article 1139(g), because it constitutes “property” in the United States. Apotex's claims, however, are not related to its approved ANDAs. Apotex thus asserts that its tentatively-approved applications for revocable permission to export its generic products to the United States for sale by others constitute property in the United States. Whether tentatively or finally approved, however, ANDAs are not “property” for purposes of NAFTA Chapter Eleven.

(5) 6. Apotex further claims to have made an “investment” as defined in Article 1139(h), which includes “interests arising from the commitment of capital or other resources in the territory of a Party to economic activity in such territory[.]” Illustrative examples under Article 1139(h) include interests in a construction contract or a government concession. Apotex's only evidence of these alleged “interests” consists of statements that the company (1) purchased goods in the United States for export to Canada for purposes of manufacturing its products there; (2) designated an agent and distributor to sell its products in the United States; and (3) incurred expenses from filing lawsuits in U.S. courts concerning its drug applications.

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(6) 7. These activities, on their face, are not “interests” arising from the commitment of capital or other resources in the United States, and thus are not “investments in the territory of the United States” under NAFTA Chapter Eleven. Indeed, if a Canadian or Mexican exporter could transform itself into an “investor” with an “investment” in the United States simply by designating a U.S. agent and distributor, purchasing U.S. goods for export, and filing a lawsuit to further its cross-border trade, then presumably every such exporter NAFTA. NAFTA Chapter Eleven, however, expressly defines the “investors” and “investments” entitled to protection so as to prohibit such bootstrapping. On the terms of Apotex's own submission, it is not an investor that has made investments under NAFTA Chapter Eleven, and thus its claims should be dismissed in their entirety.

(7) 8. Second, regardless of whether Apotex qualifies as an “investor” or its activities were “investments” under the NAFTA, the Tribunal cannot hear Apotex's pravastatin claim challenging a final ruling of the U.S. Food and Drug Administration (FDA), as that claim is time-barred. Apotex acknowledges that, in accordance with NAFTA Article 1116(2), it cannot bring a claim if more than three years have elapsed from the date on which it first acquired, or should have acquired, knowledge of an alleged breach and resulting loss or damage. Apotex further acknowledges that the challenged FDA measure occurred more than three years before Apotex brought its NAFTA claim. Apotex contends, however, that bringing a court action against a regulatory measure somehow revives or tolls claims based on that measure. Apotex has cited no support for this assertion, and, in fact, NAFTA Chapter Eleven tribunals have specifically rejected such an argument. Were it otherwise, any claimant could evade NAFTA's clear and rigid limitations period by seeking judicial review of a challenged measure within three years of filing a NAFTA claim. Apotex's argument thus must be rejected, along with its challenge to the FDA measure.

Apotex, Inc v United States of America in 2011

United States views on international law (based on the document “Digest of U.S. Practice in International Law”): (8) 9. Third—again assuming for the purpose of argument that Apotex could meet the threshold for protection under the NAFTA as an investor—the Tribunal cannot hear Apotex's challenge to the U.S. courts' adjudication of Apotex's pravastatin claim, because Apotex failed to obtain the judicial finality that is required before bringing an international claim. Apotex concedes that a claimant challenging a court action under NAFTA Chapter Eleven must obtain a final decision of the highest court of the host State, unless further judicial recourse would have been “obviously futile.” Apotex further concedes that after the U.S. Court of Appeals for the D.C. Circuit denied en banc Apotex's petition for rehearing its motion for a preliminary injunction, Apotex could have sought certiorari from the U.S. Supreme Court or resumed its claim in the district court for a decision on the merits. Apotex contends, however, that such action would have been pointless, as the 180-day market exclusivity for generic pravastatin granted to another company likely would have run in 67 days, before either court could have given Apotex the relief it sought.

(9) 10. Apotex's excuse is both insufficient and erroneous. Apotex cannot challenge non-final judicial acts under NAFTA Chapter Eleven unless it demonstrates obvious futility, not the improbability of success. Under international law, the question of whether the failure to obtain judicial finality may be excused for “obvious futility” turns on the unavailability of relief by a higher judicial authority, not on measuring the likelihood that the higher judicial authority would have granted the desired relief.

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(10) 11. As a factual matter, moreover, although the 180-day market exclusivity period had begun to run on the 10, 20, and 40 mg strengths of pravastatin, it had not begun to run on the 80 mg strength, and thus Apotex had ample time, at a minimum, to continue litigating its claim on the merits with respect to that strength. Apotex had two avenues to pursue further relief in U.S. courts, but chose instead to dismiss its claims voluntarily. Apotex's pravastatin claim based on judicial acts, therefore, must be dismissed.

(11) 12. For these reasons, and those set forth below, the Tribunal should dismiss Apotex's claims in their entirety for lack of jurisdiction, and award costs to the United States.

Apotex, Inc. v. United States of America

In relation to the international law practice and Apotex, Inc. v. United States of America in this world legal Encyclopedia, please see the following section:

Trade, Commercial Relations, Investment, Transportation

About this subject:

North American Free Trade Agreement

Under this topic, in the Encyclopedia, find out information on Investment Dispute Settlement under Chapter 11. Note: there is detailed information and resources, in relation with these topics during the year 2011, covered by the entry, in this law Encyclopedia, about Apotex, Inc. v. United States of America


See Also

  • Trade
  • Commercial Relations
  • Investment
  • Transportation
  • North American Free Trade Agreement
  • Investment Dispute Settlements
  • United States

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