Merck & Co. v. Apotex Inc., 2003 FC 1242

Date: 20031023

Docket: T-568-03

Citation: 2003 FC 1242

Ottawa, Ontario, Thursday, this 23^rd day of October, 2003

PRESENT:      MADAM PROTHONOTARY MIREILLE TABIB

BETWEEN:

MERCK & CO. INC. and MERCK FROSST CANADA & CO.

Applicants

- and -

THE MINISTER OF HEALTH and APOTEX INC.

Respondents

REASONS FOR ORDER AND ORDER

[1]                 In the context of a notice of application for an order of prohibition pursuant to subsection 6(1) of the Patented Medicines (Notice of Compliance) Regulations, SOR/93-133 (the "Regulations"), the Applicants, Merck & Co. Inc. and Merck Frosst Canada & Co. ("Merck"), seek an order striking out all or part of 10 of the 14 affidavits filed by the Respondent, Apotex Inc. ("Apotex") on the following grounds:

(1)      That the affidavits allege new facts and documents to support Apotex's allegations of invalidity not mentioned in Apotex's notice of allegation (specifically, publications and articles as to prior art and results of experiments conducted by Apotex) and that the affidavits introduce and attach irrelevant evidence, namely, the file wrapper of certain patents applications cited as evidence of prior art.

(2)      That the affidavits seek to introduce into evidence the results of experiments conducted pendente lite without notice and an opportunity to attend being given to the Applicants.

(3)      That, contrary to section 7 of the Canada Evidence Act, R.S.C. 1985, c. C-5 (the "Canada Evidence Act"), the Respondents are attempting to introduce the testimony of more than five expert witnesses without having first obtained leave of the Court.

Apotex's preliminary argument of prematurity

[2]                 Apotex has forcefully made the point that Merck's motion, as a whole, should be dismissed on the grounds that it is premature in that, save in extraordinary circumstances, the determination of whether portions of affidavits should be struck or disregarded based upon their content is a matter which must be left to the judge hearing the application on its merits. (See, for example, Janssen Pharmaceutica Inc. et al v. Apotex Inc. et al (1998), 82 C.P.R. (3d) 574 and Apotex Inc. v. Bayer AG et al (1998), 83 C.P.R. (3d) 127).

[3]                 I agree with the general principle as stated and would add that while the following comment, made in P.S. Partsource Inc. v. Canadian Tire Corp. (2001), 11 C.P.R. (4^th) 386 (F.C.A.) applies with particular force when an objection is made on the basis of relevancy, I see no reason why it should not remain generally applicable to any question of admissibility:

[18]      Nonetheless, I would emphasize that motions to strike all or parts of affidavits are not to become routine at any level of this Court. This is especially the case where the question is one of relevancy. Only in exceptional cases where prejudice is demonstrated and the evidence is obviously irrelevant will such motions be justified. In the case of motions to strike based on hearsay, the motion should only be brought where the hearsay goes to a controversial issue, where the hearsay can be clearly shown and where prejudice by leaving the matter for disposition at trial can be demonstrated.

1)          It is with these principles in mind that I will consider the grounds raised by Merck to strike all or part of the affidavits, that is, by considering whether it is obvious that the evidence is inadmissible or irrelevant, and whether it can be demonstrated that prejudice would occur by leaving the matter for disposition by the judge hearing the application on the merits.

Allegations not included in the notice of allegation and file wrappers

[4]                 In response to Merck's contention that some publications relied upon in Apotex's affidavits were not included in its notice of allegation and therefore can not be relied upon in this application, Apotex makes the argument that the publications are not produced as additional instances of prior art but in specific response to an issue raised by Merck as to the date upon which a publication specifically cited in the notice of allegation was first disclosed publicly.     A review of the impugned material shows this argument to have prima facie merit, and this issue is thus clearly one which should properly be left to the judge hearing the application on its merits. Similarly, the results of experiments conducted by Apotex appear to be tendered as evidence of a statement clearly made in its notice of allegation and disputed by Merck in its material.

[5]                 Finally, as regards the relevance of file wrappers, it appears that although they are generally not admissible to ascertain the scope of patents, they may be admissible in certain situations to clarify the inventor's intention (Novartis AG v. Apotex Inc. (2001), 15 C.P.R. (4^th) 417 at page 442). As Merck has not demonstrated that it would suffer a prejudice from leaving the matter of the admissibility of these file wrappers to be determined by the judge hearing the application on its merits, Merck's application in this regard is premature and the matter is deferred to the hearing on the merits.

Results of experiments conducted pendente lite without notice to the other party

[6]                 Merck contends that it is an established rule of evidence that evidence of experiments conducted by a party who did not invite the other side to attend and observe them are inadmissible. To that effect, it cites Omark Industries (1960) Ltd. v. Gouger Saw Chain Co. et al (1964), 45 C.P.R. 169, Merck & Co. v. Apotex Inc. (1994), 59 C.P.R. (3d) 133 and Halford v. Seed Hawk Inc. (2001), 16 C.P.R. (4^th) 189.

[7]                 I note that all those cases were actions and that the determination as to admissibility was made by the trial judge at the hearing on the merits. In all cases, the rule was not presented as a rule of evidence but as a matter of the practice of the Court, designed to ensure both fairness between the parties and that the evidence before the Court be complete and meaningful by avoiding the introduction of test results which the opposing party cannot reasonably attack by way of cross-examination because of insufficient knowledge as to the manner and circumstances in which the experimentation was conducted.

[8]                 There is a fundamental difference between actions, where full discovery is available, and the summary procedure contemplated in the Regulations.

[9]                 Where full discovery is available, it is designed to allow the parties to fully explore each other's case, to ensure that neither is taken by surprise at trial and that they have an opportunity to present complete evidence at trial. A practice of conducting tests in camera for presentation at trial is indeed to be discouraged as defeating the purposes of discovery. Moreover, the discovery process and the rules governing the conduct of actions provides appropriate time, procedures and opportunity for parties to conduct supervised experimentations on notice. This would include the understandable need for a party to conduct private testing in advance of a decision to rely upon it at trial or to re-orient its evidence in the event a supervised experiment proves unsatisfactory.

[10]            In contrast, summary proceedings are designed to be expeditious. Allowing the parties to gain advance knowledge of the facts and evidence available to the other side and ensuring that a full evidentiary record be presented for determination by the Court is neither a paramount concern of this type of proceeding nor particularly conducive to achieving its aim. Neither do the rules governing the prosecution of these summary proceedings lend themselves to a practice of conducting joint or supervised experimentations. As it is, there is in Regulations proceedings often barely enough time for parties to conduct experiments that may (or may not) be probative or useful to their case. I suspect that as often as not, experiments are conducted as an integral part of the elaboration of the litigation strategy. To require notice and an opportunity to attend to the opposing party would both add an unbearable pressure on scheduling constraints and expose parties to choosing between opening up their defence brief to the opposing side or foregoing presenting potentially crucial evidence.

[11]            Fairness and preventing the introduction of evidence without the opportunity of meaningful cross-examination must, however, remain a consideration, and it may be that in appropriate cases rulings on admissibility or exclusion would need to be made. I conclude however, that there is no general rule of inadmissibility of test results conducted ex parte and pendente lite in summary proceedings.

[12]            On the facts and circumstances as they have been presented before me on this motion, it appears that:

(1)      Apotex's notice of allegation alleges that when alendronate monosodium is made using a certain process, AMT is produced.

(2)      Merck's affidavits deny that this is the case.

(3)      The results of the experiments which Apotex seek to introduce are said to demonstrate the validity of the allegation made by Apotex.

(4)      The affidavit through which the results are presented is not limited to stating the results of the tests. It appears to provide details as to the steps and methodologies of the experiments and attaches the lab notebooks relating to these experiments.

(5)      Merck has neither alleged nor sought to establish that the facts and information provided by Apotex are insufficient to allow it to conduct meaningful cross-examinations in relation to these experiments, preferring to rest its case on the application of an alleged general principle of inadmissibility.

[13]            Accordingly, there is no basis upon which I could even rule as to whether the test results ought to be excluded at a preliminary stage on the basis of unfairness, inability to cross-examine or any other basis. The Applicant's motion on this basis is dismissed as premature.

S. 7 of the Canada Evidence Act

[14]            Merck has filed the affidavits of two expert witnesses. Apotex has filed the affidavits of nine experts.

[15]            Section 7 of the Canada Evidence Act reads as follows:

[16]            There appears to be two contradictory lines of jurisprudence as to the proper interpretation of legislation similar to section 7.

[17]            The first, set out in Buttrum v. Udell (1925), 57 O.L.R. 97 (C.A.); Rex v. Barrs, [1946] 2 D.L.R. 655 (C.A.); B.C. Pea Growers Ltd. v. City of Portage La Prairie (1964), 49 D.L.R. (2d) 91 (Man. C.A.) and Bank of America Canada v. Mutual Trust Co. (1998), 18 R.P.R. (3d) 213 (Ont. Gen. Div.); varied on a different point (2000), 30 R.P.R. (3d) 167 (Ont. C.A.); affirmed (2002), 49 R.P.R. (3d) 1 (S.C.C.), holds that on a strict construction of the unambiguous words of the statute, the limit applies to each party, regardless of the number of issues requiring expert evidence.

[18]            The second line of jurisprudence, embodied in In re Scamen et al v. Canadian Northern R. Co. (1926), 6 D.L.R. 142 (Atla. S.C.) and [1958] S.C.R. 377">Fagnan v. Ure Estate, [1958] S.C.R. 377 holds that the limit set on the number of expert witnesses should apply in respect of each issue upon which opinion evidence is led.

[19]            A number of cases, including two emanating from this Court and which shall be discussed later, have applied the interpretation upheld in [1958] S.C.R. 377">Fagnan.

[20]            I am of the view that the interpretation given in In re Scamen, as upheld by the Supreme Court of Canada in [1958] S.C.R. 377">Fagnan, should be confined to the particular formulation of the Alberta statute, as it then was, and that the proper interpretation of s. 7 of the Canada Evidence Act should be as set out by the Ontario Court of Appeal in Bank of America, to the effect that the limitation applies to the entire case and not to each particular issue.

[21]            In In re Scamen, the Alberta Supreme Court was called upon to construe s. 10 of the Alberta Evidence Act, 1910, 2^nd sess., ch.3. While the wording of that section is almost identical to s. 7 of the Canada Evidence Act, there is a crucial difference between the two provisions: The Alberta statute did not provide for the Court exercising its discretion to allow for a greater number of such witnesses where the case warrants it. In the circumstances, it is not surprising that the Court felt obligated to strain what appears to me to be the clear wording of the statute so as to remove a stricture which it felt was unreasonable and unworkable. Indeed the Court specifically mentions that it should give the words of the statute "a fair interpretation, so as to make it reasonable and workable if its terms will warrant it". The Supreme Court in [1958] S.C.R. 377">Fagnan, when called upon to construe the same s. 10 of the Alberta Evidence Act, applied the result reached in In re Scamen, but not necessarily because it believed that interpretation was proper. There is indeed no independent discussion of the merits of the competing interpretations, and no discussion of the intervening cases of Buttrum v. Udell and Rex v. Barrs which construed similar provisions in a contradictory manner. Rather, the Court notes that s. 10 had, since being construed in In re Scamen, twice been re-enacted ipsissimis verbis, giving rise to the application of the principle that the Legislature must be taken to have intended to sanction the meaning given to the statute in a previous Court ruling.

[22]            In contrast, when directly called upon to construe provisions limiting the number of experts but allowing for leave to call a greater number of such witnesses, the Courts have consistently held that the limit applied to a party's case as a whole: Buttrum v. Udell (interpreting the Ontario Evidence Act, R.S.O. 1914, ch. 76); Rex v. Barrs (interpreting the Canada Evidence Act, R.S.C. 1927, c. 59); B.C. Pea Growers (interpreting the Manitoba Evidence Act, R.S.M. 1954, c. 75) and Bank of America v. Canada (interpreting again the Ontario Evidence Act, R.S.O. 1990, c. C.23).

[23]            In all cases, the result reached in In re Scamen and later in [1958] S.C.R. 377">Fagnan was distinguished on the basis of the lack of discretionary relief provided in the Alberta statute. As the Ontario Court of Appeal succintly put it in Bank of America (at p. 290): "Scamen and [1958] S.C.R. 377">Fagnan should be relegated to the curiosity cupboard as obsolete cases which were required to correct an historial oddity of the then Alberta legislation.".

[24]            What, then, to make of the two recent rulings of this Court which applied the "five experts per issue" interpretation of [1958] S.C.R. 377">Fagnan?

[25]            I am of the view that neither Eli Lilly & Co. v. Novopharm, (1997) 73 C.P.R. (3d) 371 nor Glaxosmithkline Inc. et al v. Apotex Inc. et al (unreported, 4 Sept. 2003, Pinard J., T-876-02) are binding upon me as determinations of which of the two competing interpretations of s. 7 of the Canada Evidence Act is proper. In neither of the two cases does it appear that the issue of the proper interpretation of s. 7 was squarely put before the Court for determination. Rather, it appears from the circumstances, discussion and ruling in both cases that the premise was put before the Court that the ruling in [1958] S.C.R. 377">Fagnan was applicable, the issues being how the "five experts per issue" principle ought to be applied on the facts of each case.

[26]            In Eli Lilly, each side, including the Plaintiff, had announced more than five experts. The issue before the Court was whether, there being three defendants and three un-consolidated actions tried together, the rule applied to each "side", to each "party" or to each defence team. In stating the premise that s. 7 had been interpreted as limiting the evidence to five witnesses per subject matter or factual issue, Justice Reed cites, without further discussion, Buttrum v. Udell, In re Scamen, [1958] S.C.R. 377">Fagnan and Pea Growers (amongst others) in a manner indicating that she took all of these authorities as supportive of this interpretation, when this is obviously not the case. Clearly, the issue of which line of cases should be followed and whether s. 7 limits the number of experts to five per side or five per issue was not put before her and was not decided.

[27]            The decision of Justice Pinard in Glaxosmithkline v. Apotex is an order given without separate reasons. The conclusions indicate that Glaxosmithkline's motion was dismissed primarily because it was untimely. Insofar as it contains any discussion as to the application of s. 7 of the Canada Evidence Act, that discussion is obiter, cites only Eli Lilly as an authority, and appears to proceed from the premise urged by Glaxosmithkline itself that Apotex had called in more than five expert witnesses per issue.

[28]            I would add that, if the outcome of this issue had not been as clearly dictated by the analysis of the case law argued before me, and I had had to interpret the wording of s. 7 of the Evidence Act in a fair and reasonable manner, I would have reached the same result.

[29]            The reasons for this can hardly be more eloquently put than as expressed by Ferguson J.A. in Buttrum v. Udell (at pages 98 and 100):

It is not difficult to comply with the requirements of the section, and to my way of thinking it is much better that a party who neglects to apply for and obtain leave to call more than three of such witnesses should be saddled with the result of this own neglect than that we should open the door for a return of the evil which the Act was intended to remedy.

...

I cannot find in the words of the statute any ambiguity or anything that allows us to give to the statute the limited or restricted meaning and effect given it by the Alberta Court in In re Scamen v. Canadian Northern Railway Co. (1912), 6 D.L.R. 142, or in this case by the trial Judge; and, with deference, I am of opinion that the remedy proposed by these Courts is worse than the disease, and that it is much better that the number of such witnesses called during a trial should be limited to three on each side, and such others as the Court may on application allow, than that the number of these witnesses should be limited only by the number of issues of fact that may actually arise in the course of a trial, or that counsel can with some show of reason argue will arise or have arisen during the trial. If the latter interpretation be given the statute...a trial Judge could not refuse to hear any such witness, because, before hearing what the witness had to say, he could not satisfactorily determine to just what issue of fact the evidence was applicable, or whether the evidence would amount to "opinion evidence," and thus the statute would, I think, either become a dead letter or a new source of trouble, expense, and delay.

[30]            The trouble, expense and delay alluded to in this passage is exemplified in those cases where the Courts have sought to apply the limits to each issue. And if the mischief which the Act intended to remedy is found to occur in the trial of actions, it can easily be seen how much more critical it is to control the abusive use of expert evidence in proceedings meant to be summary, as are prohibition proceedings under the Regulations.

[31]            Apotex has argued that in any event, section 7 applies only where the witnesses are to be examined viva voce at the hearing and that only the judge hearing the merits of an application or trial has the discretion to allow additional opinion evidence. I do not read the provision of s. 7 as imposing such restrictions. At best, the provision is capable of two interpretations, and I must give it "a fair interpretation, so as to make it reasonable and workable if its terms will allow it" - as mentioned in In re Scamen.

[32]            Section 7 is clearly intended to have general application, not confined to trials: "in any trial or other proceeding, criminal or civil" - "dans un procès ou autre procédure pénale ou civile". In summary proceedings, affidavits are filed in lieu of conducting examinations in chief, and cross-examinations are conducted out of court, but the rules of evidence otherwise apply equally to both modes of adducing evidence. In the case of expert evidence, it is the rule that prior notice of the content of the intended evidence be communicated to the opposing party well ahead of the hearing or trial so as to allow the opposing party to adequately prepare to meet the case, through well prepared cross-examinations or by adducing rebuttal evidence if needed. In trials, this is achieved by the prior filing of expert affidavits or statements; in summary proceedings, through the filing of affidavits.

[33]            Whether in the context of a trial or of a summary proceeding, to allow, without prior leave, a party to tender more than the allowable number of witnesses, leaving to the hearing judge the determination of whether they will all be admitted (or if not, which will be relied upon) would effectively require the opposite party to prepare its case to meet all of the evidence tendered. This would eliminate, at least for the parties, any of the benefits intended by the rule. Worse yet, depending on how the opponent's case in rebuttal is prepared, the subsequent disallowance of parts of a party's case is likely to give rise to involved controversy as to what parts of the opponent's case were intended as rebuttal of the disallowed evidence and ought therefore to be disregarded. As with the results reached in In re Scamen, the cure is likely to be worse than the disease. The potential for abuse is the same whether the evidence be brought viva voce at the hearing or by way of affidavit and cross-examinations, and effective control of this abuse is achieved by interpreting s. 7 as applying at any stage of proceedings, including summary proceedings.

[34]            While there will obviously be instances where the final determination of whether to allow more than five expert witnesses should properly be left with the judge hearing the case on its merits, I find that the proper interpretation and application of s. 7 of the Canada Evidence Act requires that a party who proposes to adduce the evidence of more than five experts must seek leave to do so at the time of, or prior to, first tendering the additional evidence. As Apotex has not sought prior leave to tender more than five affidavits of expert evidence and has not even met Merck's motion with a motion for leave to do so, Apotex is only entitled to rely on the evidence of five expert witnesses.

[35]            In any event, the rule embodied in s. 7 of the Canada Evidence Act, even if s. 7 does not apply to summary proceeding strictissimi juris, provides clear guidance as to the number of experts the trial of an action should reasonably require, beyond which abuse is presumed. I see no reason not to apply these guidelines to summary proceedings such as the present, and hold that, save in special circumstances which the party has the burden of establishing, it is abusive for a party to file the affidavits of more than five experts. Apotex has failed to do so.

                                                                            ORDER

IT IS ORDERED THAT:

(1)      Apotex shall have 10 days from the date of this order to serve and file a notice electing upon which five of the affidavits of Dr. Allen W. Rey, Dr. Juliet Compston, Dr. Eli Shefter, Dr. Michael J. Cima, Dr. Peter J. Stang, Dr. Roger Newton, Dr. Robert Allan McClelland, Dr. Graham Russell or Dr. Robert S. Langer it will rely.

(2)      The affidavits mentioned in paragraph (1) above and not included in this election shall be struck.

(3)      The time within which cross-examinations are to be conducted shall run from the date of filing of Apotex's notice of election.

                                                                                                                                              "Mireille Tabib"         

                                                                                                                                                   Prothonotary             

                                                                 FEDERAL COURT

                              NAMES OF COUNSEL AND SOLICITORS OF RECORD

DOCKET:                                                 T-568-03

STYLE OF CAUSE:                                Merck & Co. Inc. and Merck Frosst Canada & Co.

v.

The Minister of Health and Apotex Inc.          

PLACE OF HEARING:                         Ottawa, Ontario

DATE OF HEARING:                           October 14, 2003

REASONS FOR Judgement :              Madam Prothonotary Mireille Tabib

DATED:                                                    October 23, 2003

APPEARANCES:

Peter Wilcox - Toronto, Ontario                                       FOR APPLICANTS

Andy Radhakant - Toronto, Ontario

Andrew Brodkin - Toronto, Ontario         FOR RESPONDENT APOTEX INC.

Nathalie Butterfield - Toronto, Ontario     

SOLICITORS OF RECORD:

Patrick E. Kierans & Peter R. Wilcox       FOR APPLICANTS

Ogilvy Renault - Toronto, Ontario

H.B. Radomski & Andrew R. Brodkin      FOR RESPONDENT APOTEX INC.

Goodmans LLP - Toronto, Ontario