Date: 20060303
Docket: T-1697-01
Citation: 2006 FC 282
BETWEEN:
ELI LILLY AND COMPANY and
ELI LILLY CANADA INC.
Plaintiffs
and
APOTEX INC. and
NOVOPHARM LIMITED
Defendants
AND BETWEEN:
APOTEX INC.
Plaintiff by Counterclaim
- and -
ELI LILLY AND COMPANY and
ELI LILLY CANADA INC.
Defendants by Counterclaim
AND BETWEEN:
APOTEX INC.
Plaintiff (Third Party Claim)
- and -
NOVOPHARM LIMITED
Defendant (Third Party Claim)
REASONS FOR ORDER
ARONOVITCH P.
[1] At issue is the discoverability of the laboratory notebooks and related documents of the inventors named in the two patents in suit in this action. In particular, Apotex Inc. ("Apotex"), as supported by Novopharm Limited ("Novopharm"), has moved to compel production of the documents, collectively referred to as the laboratory notebooks of Mr. Marzoni ("Marzoni") and Dr. Moder ("Moder"), the assignors and named inventors of Canadian Patents 1,217,486 (the '486 patent) and 2,029,055 (the '055 patent) respectively. The notebooks are in the possession of the plaintiffs. The defendants request that they be produced in order to facilitate examination of the inventors pursuant to Rule 237(4) of the Federal Courts Rules.
[2] In the underlying infringement action the plaintiffs, Eli Lilly and Company and Eli Lilly Canada Inc. ("Lilly"), claim that Apotex and Novopharm have infringed Lilly's patents through the manufacture and sale of nizatidine. Apotex and Novopharm have defended the claim with allegations of non-infringement and counterclaim against Lilly alleging that both the '486 and the '055 patent are invalid on various grounds, including obviousness, overbreath, inutility and others.
[3] Rule 237(4), makes provision for the examination of an assignor for discovery as of right where the assignee, in this case, Lilly, is a party to an action.
237(4) Where an assignee is a party to an action, the assignor may also be examined for discovery.
237(4) Lorsqu'un cessionnaire est partie à l'action, le cédant peut également être soumis à un interrogatoire préalable.
Prior to the scheduled examinations of the inventors, Apotex's counsel requested copies of the inventors' documents relating to their work on the patents to be produced in advance.
[4] By letter dated February 25, 2005, counsel for Lilly replied that it was in the process of locating the relevant documents. Once this process was complete, counsel for Lilly wrote, it would provide copies of the relevant documents to Apotex.
[5] In later correspondence, Lilly took the position that the lab notebooks would not be produced as they were not relevant to any of the issues in the pleadings. Lilly only agreed to produce certain unspecified pages of the lab notebooks, provided that specific paragraphs in the pleadings to which the lab notebook pages related could be identified.
[6] Apotex and Novopharm argue that they would be unable to conduct a proper examination for discovery of the inventors without production of the notebooks in advance. Examining them without the benefit of reading the notebooks in advance, they claim, would be a waste of time and resources.
[7] Apotex essentially maintains that the unfettered right to examine the assignor/inventor pursuant to Rule 237(4) encompasses the production of the inventors' lab notebooks.
[8] The purpose of the Rule, according to Apotex, is to enable parties to discover information relating to the work the inventors undertook in order to understand "what the inventors did, how they did it, and when they did it in the course of making their invention." (Faulding (Canada) Inc. v. Pharmacia S.p.A., [1999] F.C.J. No. 448 at para. 4), ("Faulding"). The work of the inventors being set out in detail in those notebooks, says Apotex, the notebooks are far more reliable than the inventors' unaided memories. Disclosing the notebooks therefore fulfills the purpose of the Rule. Otherwise, Apotex maintains, the examining party's ability to examine the inventors would be so compromised that it would defeat the purpose of having the examination.
[9] As a secondary argument, Apotex says that the inventors' notebooks should be produced for the purposes of the inventors' examinations because they are directly relevant to pleaded grounds of invalidity. Most notably, they are relevant, to overbreadth, inoperability/inutility and sound prediction.
[10] Novopharm concurs with Apotex's submissions of fact and law and submits, in addition, that the inventors' documents are directly relevant to the issue of inventorship as pleaded by Novopharm, namely, that Moder did not actually invent the '055 patent. Specifically, the lab notebooks would show whether Moder's contribution was significant enough to enable him to claim inventorship or whether he merely postulated the problem or carried out mechanical testing and verification.
[11] Regarding Apotex's argument based on Rule 237(4), Lilly states that the Rule does not provide an enlarged scope of discovery beyond what the pleadings allow. While the Rule does give the right to examine the inventors for discovery, the purpose of that discovery is not as claimed by Apotex. Case law indicates that the Rule's purpose is two-fold: to allow the examining party to obtain general information and possible lines of enquiry with respect to the circumstances of the invention, and to give the examining party a transcript with which the inventor's credibility might be impeached if he/she is called as a witness at trial.
[12] Lilly also argues that no issues are raised in Apotex's or Novopharm's counterclaims to which the notebooks are relevant. First, Lilly says that Apotex has not pleaded sound prediction. Lilly then argues that the test for each of the grounds of invalidity pleaded is objective. As a result, the subjective knowledge of the inventors, as revealed by the lab notebooks, is irrelevant. The defendants' attempt to get the lab notebooks, according to Lilly, is simply an improper "fishing expedition".
Analysis
[13] The term "assignor" has been found to refer to an inventor in a patent action. In Richter, supra, Isaac C.J. explained as follows, the purpose of the then applicable Rule 456(5), which is identical in every respect to the current Rule 237(4):
On its face, the subsection [456(5)] gives to a party to an action who is adverse in interest to an assignee who is also a party to the action, a right to examine the assignor. The right is exercisable at the discretion of the party adverse in interest to the assignee. In my opinion, the subsection assumes that the assignor will depose to facts that are relevant to issues in the litigation. It has been held that the purpose of former subsection 465(5) of the Rules, which gave a similar right, was to enable the party examining to obtain facts to prepare the case to be met and to obtain statements from the assignor which could be used for purposes of impeachment in cross-examination, if the assignor were called as a witness at a trial. (emphasis added)
[14] Justice Hugessen in Faulding, supra, at para. 4 noted the particular character of the examination for discovery of the assignor:
It is common ground between the parties that the state of the law is that an examination under Rule 237(4) is of a different character from an ordinary examination for discovery of a party. In particular, it is common ground that the examination for discovery of an assignor or inventor cannot be used at trial without leave of the Court.
[15] The reason that the inventor's evidence cannot be read in without leave is that the assignor is not a party to the action. Rule 288, and its predecessor Rules 494(9), allow a party to rely on and introduce at trial, as its own evidence, any part of the examination for discovery of an adverse party, or of an individual examined on behalf of the adverse party. The assignor/inventor is neither. Hence, the requirement that leave be obtained from the Court before a party can rely on the examination for discovery of the inventor at trial.
[16] The fact that the inventor's evidence cannot be used at trial, without leave, cannot be relied on to narrow the scope of the discovery of the inventor. As Justice Ryan pointed out in Sternson Ltd. v. CC Chemicals Ltd. [1982] 1 F.C. 350 at para. 18 (F.C.A.):
It would also appear that the examination of Mr. Rehmar would be useful to the appellant. It may well be that the testimony could not be read in at the trial, but it would be of use in preparing the appellant's case, which is one of the purposes of an examination for discovery.
[17] Having said that, I agree with Lilly that there is no basis to order production of documents solely for the purposes of the examination of the inventors that are not otherwise relevant to the issues raised in the pleading. In other words, the lab notebooks are not compellable merely by virtue of the right of discovery of the assignor but on the basis of their relevance to one or more of the pleaded defences.
[18] As the examination of the assignor or inventor is for "discovery", relevance is the applicable standard and what is relevant in a particular action is determined by reference to the pleadings.
[19] For the purposes of discovery, relevance is a broader notion than relevance for the purposes of trial. The point is made as follows in Faulding, supra, where Justice Hugessen declined to strike answers given in an examination which the defendant argued were irrelevant to the action, writing at para. 3:
I may say at the outset, that the questions asked and answers given, while they may be of questionable relevance in the light of the pleadings, and I make no finding in that regard, are not what I may call egregiously irrelevant. In other words, the questions all bear on what the inventors did, how they did it and when they did it in the course of making their invention. They are not questions that are totally beside and outside the issues raised in the case. (emphasis added)
[20] On discovery, it is enough that a question "may" be relevant or have a semblance of relevance. Otherwise stated, it is enough that the question not be "egregiously" or patently irrelevant. What is ultimately relevant or admissible at trial is a matter for the trial judge.
[21] The means of documentary production for the purposes of discovery is the affidavit of documents. The documents that parties are thereby entitled to, moreover, is a matter of law, not discretion.
[22] In the preparation of an affidavit of documents, it is the obligation of each party, here Lilly and Apotex, to list in their affidavit those documents that are broadly relevant, namely documents that "might reasonably be supposed to contain information which may directly or indirectly" enable a party to advance its own case, damage its opponent's case, or which "might fairly lead to a train of inquiry that could have either of these consequences". A document need not be admissible at trial to be relevant and producible for discovery purposes.
[23] As the general Rules of discovery apply to the inventors, in addition to answering questions that are relevant to the issues raised in the pleadings, Moder and Marzoni would have the responsibility of informing themselves, in advance, of knowledge pertaining to the action or application, and bringing to the discovery any relevant documents in their possession that are mentioned in the Notice to Attend.
[24] In this case, it is not disputed that the inventors' notebooks are in the possession of Lilly. The question therefore, is not whether Lilly has an obligation to produce them in advance in order to facilitate the examination of the inventors, but whether Lilly ought to have listed the notebooks in its affidavit of documents as being relevant to the issues raised in the pleadings.
[25] Lilly has pleaded that Moder and Mazoni are the inventors and that Lilly owns the patents in suit. In its defence and counterclaim, Apotex admits only that the patents were issued to Lilly and that they name Marzoni and Moder as inventors. That the inventors are, in fact, Marzoni and Moder and that the patents were assigned to Lilly is otherwise either not admitted or denied.
[26] It is also the case for Novopharm, who, in addition, alleges that by virtue of amendments made to the specifications at the patent office Lilly has attempted to appropriate the invention of others, and that Moder is not the inventor of the '055 patent.
[27] Where, as in this case, the identity of the inventors or the assignment of the patents is contested, the inventors' notebooks, in my view, may be said to be relevant to those allegations and must be produced for the purposes of discovery.
[28] In light of the above conclusion, I do not need to determine whether the inventors' notebooks may be said to be relevant to the defendants' pleas of invalidity, and in particular, as Apotex maintains, to its allegations of overbreadth, inutility and sound prediction. I would however comment as follows.
[29] Utility and sound prediction are related, in that the usefulness of the invention required for patentability, as of the priority date, must either be demonstrated or be a sound prediction based on the information and expertise then available.
[30] Apotex has pleaded inutility and inoperability, but has not pleaded sound prediction, or more properly, the lack of sound prediction. Apotex says it has made an allegation of invalidity in the nature of a lack of sound prediction in respect of the '055 patent, at paragraphs 18 and 19 of its statement of defense. These paragraphs in my view allege inutility and overbreadth. I find no allegation of a prediction, let alone of unsound prediction, but will consider Apotex's argument nevertheless.
[31] There is a paucity of Canadian jurisprudence on the relevance of inventors' notes in the context of pleas of invalidity. The applicable legal test in respect of the grounds of invalidity invoked by Apotex is objective as Lilly contends. That is to say, that obviousness, inutility and overbreadth, for example, are determined by reference to the patent itself, on the basis of the knowledge and assessment of the notional "person skilled in the art".
[32] There is case law to the effect that the knowledge or opinion of the inventor is not relevant or determinative where the test is objective.
[33] In Kirin-Amgen Inc. v. Hoffmann-La Roche Ltd., [1999] F.C.J. No. 203 at para. 6 (Fed. T.D.), Madam Justice Reed stated the following as to what is relevant to construing a patent, "In general, notes of the inventor or evidence as to what that person thought had been invented or how the patent should be read, are not relevant". (emphasis added)
[34] That said, in Foseco Trading A.G. et al. v. Canadian Ferro Hot Metal Specialties, Ltd. (1991), 36 C.P.R. (3d) 35 ("Foseco"), Madam Justice Reed found that documents exchanged by co-inventors relating to the development of the invention were "clearly relevant," in the context of an allegation by the defendant that the invention made was not the invention claimed. This is essentially an allegation of overbreadth, cast in similar terms to Apotex's allegation of overbreadth in this proceeding.
[35] In addition, documents produced during discovery, albeit at the behest of the plaintiff, that relate to the course of the research undertaken by the inventors have been considered by this Court in respect of claims of inutility, inoperability, overbreadth and sound prediction. This, notwithstanding that the tests in respect of these grounds of invalidity is objective.
[36] Discovery is not to be confused with admissibility. The fact that the test for the determination of a ground of invalidity is objective, and that the knowledge or opinion of the inventor may not be relevant in the sense that it cannot be relied upon to construe the patent, does not imply that the facts of the process of invention can not be collaterally relevant to the issues or that they will not be considered by the Court, whatever their ultimate probative value. Moreover, documents relating to the inventive process may be discoverable on the basis that they can contain relevant facts or ones leading to a line of inquiry that will be helpful to advance the case of one of the parties to the suit - for example, prior art references that may not be known to the party pleading invalidity.
[37] Other common law jurisdictions have considered the issue, and while patent cases from other jurisdictions have to be approached with caution, given differences in practice and in enabling legislation, the reasoning in these cases is nevertheless worthy of consideration.
[38] In Halcon International Inc. v. The Shell Transport and Trading Co. Ltd. (1979), 96 R.P.C. 459 at 464-465 ("Halcon"), the High Court (Patent Court) allowed discovery of documents relating to the research and experiments in the course of which the plaintiffs made their invention. Discovery was permitted in relation to obviousness, insufficiency and inutility.
[39] One of the issues considered by the Court in Halcon was whether documents were relevant to a plea of insufficiency. Among the allegations in that case were that certain "examples" did not work - that no guidance was given in the specifications and that there were "other insufficiencies pleaded relating to a lack of guidance as to the way in which particular materials could be used as catalysts in particular reactions". At pages 465 to 466 of the judgment, Whitford J. made the following observations:
On this issue, it was observed by counsel for the plaintiffs that, in theory at least, the documents in category (a) might either disclose that work had been done by the plaintiffs in the field, for example, of the use of titanium as an insoluble catalyst, which would show that the plaintiffs had been successful; work might be shown to have been done which resulted in failure; or in fact one might find on considering the documents that it was a matter upon which the plaintiffs had never worked at all.
What was said was that the court has ultimately got to determine is not what the plaintiffs may or may not have been able to do as a result of the experimental work recorded in these various documents, but whether the man skilled in the art would know what to do to make the process work with any one of the catalysts in any given form, whether soluble or insoluble, and that nothing that the plaintiffs may have done could bear upon this issue.
I do not accept this. I think that, if there was in fact a disclosure of experimental work which showed a failure in this particular regard, it might not be without its relevance, just as in relation to the issue of inutility upon which disclosure of the category (a) documents is also sought.
[40] The English Court of Appeal considered the relevance of inventors' notes to the issue of obviousness in SKM. S.A. and another v. Wagner Spraytech (U.K.) Ltd. and others (1982), 99 R.P.C. 497 ("SKM"). The Court acknowledged that the test for obviousness was indeed objective but concluded that the inventors' notes met the threshold for documentary production which, like our own, is that the document need only lead to a "train of inquiry" that might advance one party's case and damage the other's. At page 508, Oliver L.J. concluded:
I have, however, in the end been persuaded that the argument which he so attractively put before us is one which tends to confuse discovery and admissibility, and speaking for myself I am not prepared to differ from the conclusion at which the learned judge arrived that the discovery sought may be of assistance to the defendant, either offensively or defensively, on the issue pleaded.
[41] Similarly, in Wellcome Foundation Ltd. v. VR Laboratories (Australia) Pty. Ltd. (1982), 99 R.P.C. 343, the High Court of Australia, like the English Court of Appeal in SKM, concluded that even though the test was objective, the notes were relevant enough to be discoverable. Concluding, Aickin J. wrote at 360:
The cases to which I have referred appear to show that some discovery in respect of the work done by a patentee in arriving at his invention has been given as a matter of course and that the disputes have been as to the extent of discovery. Since evidence of such work may in some cases be relevant to the issue of obviousness it must follow that discovery should generally be given, even if only on the basis that the documents discovered may suggest a line of inquiry worth investigation.
[42] This does not mean, either for parties seeking disclosure or where some disclosure has been made, that it is open season on anything and everything relating to the history of events leading to a discovery. In the end, it will come down to the matters pleaded and the propriety of the questions put on discovery. Questions in relation to documents such as laboratory notebooks must not only be factual in nature, they must have a proper foundation and have relevance to what has been alleged and is unadmitted.
[43] An order will go accordingly.
"Roza Aronovitch"
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