Date: 20100122
Citation: 2010FC77
Ottawa, Ontario,
January 22, 2010
PRESENT: MADAM PROTHONOTARY MIREILLE TABIB
Docket:
T-644-09
BETWEEN:
APOTEX INC.
Plaintiff
- and -
SANOFI-AVENTIS
Defendant
Docket:
T-933-09
BETWEEN:
SANOFI-AVENTIS and
BRISTOL-MYERS SQUIBB SANOFI
PHARMACEUTICALS HOLDINGS PARTNERSHIP
Plaintiffs
- and -
APOTEX INC.
APOTEX PHARMACHEM INC. and
SIGNA SA de CV
Defendants
REASONS FOR ORDER AND ORDER
[1]
The Rules
relating to affidavits of documents should be well known by litigants. Yet it
seems that parties are either not following them strictly, or are assuming that
others are not. In the context of “fast track” or streamlined actions managed
pursuant to the Notice to the Parties and to the Profession issued by this
Court on May 1, 2009, the importance of ensuring that these rules are
understood, followed and strictly applied by both parties cannot be overstated.
[2]
I am
seized of two reciprocal motions, brought by the parties to this consolidated
proceeding, seeking that the opposing party be compelled to provide a further
and better affidavit of documents.
[3]
Apotex
Inc. is the plaintiff in initial Court file T-644-09. It is also, with Apotex
Pharmachem Inc., the defendant in the second action, in Court file T-933-09. Apotex
Inc. and Apotex Pharmachem Inc. will be jointly referred to in these reasons as
“Apotex”. Sanofi-Aventis is the defendant in Court file T-644-09. It is also,
with Bristol-Myers Squibb Sanofi Pharmaceuticals Holdings Partnership, the
plaintiff in the subsequent Court file T-933-09; the Sanofi entities will be
jointly referred to in these reasons as “Sanofi”.
Background and preliminary remarks
[4]
It is I
think crucial to note that both parties herein have early on embraced and
committed to the Court’s initiative to streamline complex litigation and schedule
trial dates within two years of the institution of an action, which is the
subject of the above mentioned Notice to the Parties and to the Profession.
[5]
Apotex
first made its request in May 2009, some 20 days after filing its Statement of
Claim in T-644-09. Sanofi joined in that request when it filed the Statement
of Claim in T-933-09 in June 2009 and moved, in July 2009 to consolidate the
actions so that they can proceed and be heard together, on the same schedule as
had already been set for T-644-09.
[6]
As a
result, tentative trial dates have already been set aside starting in April
2011; early and intensive case management has been implemented, and a schedule
has been set for completing all pre-trial steps to meet these dates.
[7]
The
Court’s early trial initiative was a response to the frustration expressed by a
significant number of litigants and members of the bar, very notably in the
specialized field of intellectual property, that matters were taking too long
to get to trial. As the Court began experimenting with this initiative on a
case-by-case basis a few years ago, it quickly became obvious that it is not
realistic, practical or reasonable to merely shorten the time between the
filing of a statement of claim and the start of the trial if the parties and
their counsel do not also adapt their litigation practice and strategies to the
shorter time frames. Litigation that dragged on for five years or more
typically featured three or more “rounds” of discoveries as well as numerous
amendments to pleadings, often resulting in more discoveries and affidavits of
documents. Attempting to shoe-horn into two years the never-ending discovery and
amendments process that used to take five to ten years is simply unsustainable
for most litigants and most lawyers, not to mention the limited resources of
the Court.
[8]
At the
same time, complaints were growing that the discovery process was getting out
of hand, becoming too long, too costly and too time consuming. Meanwhile, some
of the cases that had been the product of years of unrestrained discoveries
finally came to gruelling trials scheduled to run several months, and often further
extended, to the exhaustion and frustration of lawyers and Judges alike. A new
call is now increasingly being heard from some members of the intellectual
property bar and their clients: the length of the trials must be controlled,
and parties must be kept to the length of the trials as scheduled.
[9]
I make
these lengthy observations because they inform and highlight the consequences
of both parties’ expressed intention to avail themselves of the Court’s streamlining
and early trial initiative. In pressing for and committing to a trial in the spring
of 2011, intended to last five weeks, the parties and their counsel have
committed to a schedule that does not allow infinite time for discoveries and
to a trial of fixed duration. The parties themselves are extremely sophisticated
litigants, with extensive experience before this Court. Their respective
counsel are knowledgeable and experienced trial lawyers. One expects and must
demand from such parties that with a trial expected to begin in less than 15
months, with pleadings now closed and with the known history of litigation in
this and other jurisdictions over the drug at issue, they have a clearly
developed and articulated theory of their respective case, of what is required
to prove it at trial, and how they intend to do so. There is no time in this
schedule – and indeed, precious little trial time – for embarking on fishing
expeditions, for cobbling up a strategy as one goes or for being unable to
articulate a coherent theory of the case until all discoveries are completed or
until the eve of trial.
[10]
In ruling
on these motions, I have assumed from the parties that level of
professionalism, and I intend, in managing this case to trial, to consistently
expect this higher standard. The parties themselves should be able to expect
and rely upon the same standard from their opponent. How that assumption will
impact the case management of this matter will become apparent as I deal with
the various aspects of these motions.
General principles applicable to
documentary discovery
[11]
The
parties are ad idem as to the law applicable to motions for further and
better affidavits of documents, and it need not be set out at length here.
Essentially, it is accepted that the moving party on such a motion has the
burden of showing that the affidavit of documents, as delivered, is inadequate
or deficient. That is, the moving party must show that further documents
likely exist, that these documents would either advance its own case or hurt its
opponent’s and that the opposing party either has them in its power, possession
or control (see Rule 223(2)(a)(i) and (ii)), or is aware that they are in some
other third party’s power, possession or control (see Rule 223(2)(a)(iv)) .
[12]
It bears
repeating that a document which can only assist the disclosing party need not
be disclosed in the affidavit of documents; indeed, the disclosing party is
only required to disclose documents that support its case if it intends to rely
upon them at trial. The counterpoint to this principle is that a party who has
in its power, possession or control a document which would advance its own case
has the obligation to disclose it in its affidavit of documents, failing which,
subject to some exceptions or leave of the Court, it may not be introduced at
trial (see Rule 232(1)). The Rules also contemplate several other sanctions to
a party’s failure to comply with its disclosure obligations, including striking
out the defaulting party’s pleadings (see Rule 227).
[13]
The
obligation to disclose documents on which a party intends to rely at trial or
which would assist its opponent equally applies to documents that are not in
that party’s possession, power or control, but in that of a third party. The
consequences of the failure to comply with this obligation are, in theory, the
same as for documents within the party’s own power, possession or control;
however, counsel for Sanofi has expressed concerns that, in practice, there is
almost no impediment to a party relying on undisclosed third party documents at
trial. It is not for the Court, on this motion, to determine and declare how
such difficulties, if they arise, are to be resolved at trial. It is sufficient
on this motion to recognize that there is a clear, positive duty of inquiry and
disclosure on the party proffering an affidavit of documents, and that the due
performance of that duty is intended to be ensured by the requirement of a
sworn affidavit of the party, backed by a solicitor’s certificate, and by a
scheme aiming to prevent a litigant being surprised at trial by documents of
which the other party or its counsel has long been aware – or should have been
if the inquiries required of them had been performed.
[14]
As pointed
out by the Court in Poitras v. Twinn, 2001 FCT 456, “an affidavit
of documents is a very solemn document. It is an affidavit and, unless and until
the contrary is shown, it is to be taken as setting out what it alleges
accurately and fairly and that is why provision is made in the Rules for a
solicitor to instruct and advise the person preparing the affidavit as to his
or her obligations”. I would add that since the affiant must be
authorized by the party to make the affidavit and that the full explanations
given by the solicitor must include the possible consequences of failing to make
full disclosure (see Rule 224), these statements stand as a solemn statement that:
(a)
further relevant
documents than those listed do not exist, or if they do;
(b)
that they
are not likely to assist the other party or hurt the disclosing party’s case AND
that the disclosing party has made the decision that it will not rely on that
document at trial.
[15]
Given the
sophistication of the parties and the level of preparation expected of them in
the circumstances, the presumption that the absence of a document from the
affidavit of document signals that if it exists, a strategic and informed
decision has been made that it will not be relied on a trial is all the greater.
That being the basis of many of the individual determinations made here, I can
see no reason why the parties themselves cannot or should not proceed in this
litigation in reliance on the same assumption. I also note that if parties can
be confident that their opponent will not be entitled to rely upon such
documents to their advantage at trial, it should help reduce the length of
discoveries, since parties will have no incentive to insist on production of
additional documents merely out of fear of being blindsided at trial.
[16]
Finally,
it should also be remembered that while the Rules provide that a party may
correct any inaccuracy or deficiency in an affidavit of documents by serving a
supplementary affidavit of documents, this must be done without delay. This is
all the more important in actions subject to the streamlining initiative, as
the tight schedules afford little “extra” time to re-open discoveries should
new documents be disclosed. Where, on an informal request or a motion for
production of further documents, a party’s attention is drawn to a particular
type or source of documents or to a particular factual issue which it had not
considered for relevance, the party’s duty to review its disclosure in order to
correct any inaccuracy or deficiency in its affidavit of documents is triggered,
and should result in such supplementary affidavit of documents as the review
may require, without delay, and without the need for a specific order. For
that reason, it is unnecessary for the Court to specifically order that a party
review its affidavit of documents for completeness, unless the Court has been
satisfied that elements are in fact missing from it.
Sanofi’s motion
[17]
I will
examine in turn each category of documents in respect of which Sanofi claims
Apotex’s affidavit of documents is deficient. Although the notice of motion
seeks relief in respect of 24 categories of documents, Sanofi’s amended written
representations are restricted to 14 categories, listed in lettered paragraphs
(at pages 7 and 8 of the written representations).
(a)
Apotex’s
submission for a Notice of Compliance for clopidogrel besylate and hydrobromide,
including updates, supplements and notifiable changes, specifically detailed
process and stability information as well as the “Acknowledgement of Receipt of
Information and Material” from Health Canada.
[18]
There is
no allegation that Apotex is currently manufacturing, importing, selling or
exporting clopidogrel besylate or hydrobromide. Apotex does, however, allege
that it intends to apply to the Minister of Health seeking a Notice of Compliance
to sell these products in Canada, and it therefore seeks, inter
alia, a declaration that its proposed products will not infringe
Sanofi’s patent.
[19]
Apotex has
not listed in its affidavits of documents any regulatory document whatsoever
with respect to clopidogrel besylate or hydrobromide – which is not surprising,
since the allegation made in the pleadings is not that Apotex has
applied for a Notice of Compliance, but that it intends to apply for a
Notice of Compliance. Sanofi argues that if the pleaded intent is more than a
vague intention, as is required to establish standing to maintain a declaratory
and impeachment action in respect of clopidogrel besylate or hydrobromide, then
drafts of regulatory submissions, or at least an outline of what these
submissions would contain must surely exist. Sanofi may well be correct as to
Apotex’s need to put these documents in evidence to support its standing, but
the fact remains that the existence and content of these documents, as evidence
of standing, could only be of assistance to Apotex. Given the comments made
earlier, the absence of such documents from Apotex’s affidavit of documents
must be taken to mean that there are in existence no documents whatsoever
documenting Apotex’s intention to apply for a Notice of Compliance for
clopidogrel besylate or hydrobromide, or that if they exist, Apotex has made a
decision that it will not be using them at trial. As to whether any such
documents, if they exist, would directly or indirectly advance Sanofi’s case in
showing infringement, Sanofi has not led sufficient evidence to discharge its
burden.
(b)
All
Drug Master Files that are relied upon or referred to in any submission for a
Notice of Compliance filed by Apotex with regard to clopidogrel bisulfate,
besylate or hydrobromide.
[20]
Clopidogrel
bisulfate is the drug which Apotex allegedly currently manufactures in Canada for export, and for which
Apotex currently does not have regulatory approval to sell in Canada. Apotex’s statement of claim
alleges that Apotex has applied for a Notice of Compliance in Canada for this product. Apotex’s
affidavits of documents do list some regulatory filings, including some filings
which appear to be drawn from a DMF. Sanofi’s motion record contains no
evidence from which one could conclude that any other document relating to
whether or not the proposed product would infringe exists, let alone that such
document would assist Sanofi’s case or hurt Apotex’s.
[21]
As for the
drug master files for clopidogrel besylate or hydrobromide, the comments made
above for category (a) are equally applicable here.
(c)
All
documents that relate to any work done on the development of clopidogrel
besylate and hydrobromide.
[22]
There are
three issues to which Sanofi argues these documents are relevant:
[23]
First, as
evidence of an intent to file an application for a Notice of Compliance. As
mentioned earlier, their absence from the affidavits of documents can only be
interpreted as signifying that such documents do not exist, or that Apotex has
chosen not to adduce them at trial.
[24]
Second, as
evidence that clopidogrel besylate is in fact a pharmaceutically acceptable
salt, which would contradict the allegations made in paragraphs 11 and 16 of
Apotex’s amended statement of claim in respect of invalidity or construction. Counsel
for Apotex at the hearing has confirmed clearly and unequivocally what was
suggested in Apotex’s motion record: that in support of paragraphs 11 and 16
of the amended statement of claim, Apotex does not intend to lead evidence
establishing that, as a fact, besylate is not a pharmaceutically acceptable
salt. Given that undertaking, and given that it would have been Apotex’s
burden to prove this fact, there can be no relevance (as understood in Rule
222(2)) to documents showing the pharmaceutical acceptability of clopidogrel
besylate.
[25]
Third, as
evidence that clopidogrel besylate or hydrobromide do not have the substantial
advantages claimed in respect of clopidogrel bisulfate. Apotex has pleaded, at
paragraph 36 of its amended statement of claim, that the patent is invalid as a
selection patent because the bisulfate does not have substantial advantages
over the other compounds disclosed in an earlier patent, which compounds include
the besylate and hydrobromide salts. Sanofi, at the hearing, argued that to
the extent Apotex has performed development work on these salts, such work
might in fact show that these salts do not have the advantages claimed in
respect of clopidogrel bisulfate.
[26]
First,
Sanofi has led no evidence to support the contention that development work was
conducted by Apotex, and if it was, that it would likely show the besylate or
hydrobromide to be inferior to the bisulfate. Furthermore, that particular
argument was not clearly articulated in Sanofi’s motion record, and it would be
inappropriate for me to formally rule upon it. In any event, as already
mentioned, the fact that the argument is now clearly brought to Apotex’s
attention is sufficient to trigger its obligation to consider whether any
documents related to its development work, if they exist, might assist Sanofi
or hurt Apotex’s case with respect to this particular invalidity allegation.
There is not need to order a further remedy.
(d)
Process
details of the method of manufacture of the API used to make Apotex’s
clopidogrel bisulfate, besylate and hydrobromide tablets.
[27]
Some
process information was given for manufacturing the API in clopidogrel bisulfate,
but none were given for the besylate or hydrobromide.
[28]
As for the
besylate and hydrobromide, process details may simply not exist, as there is at
present no evidence that manufacture has even commenced.
[29]
With
respect to the bisulfate, which is currently being produced, Sanofi has led no
evidence as to what other documents would be expected to exist that would show
the method of manufacture for this API, and on this basis, its motion must fail
for this category.
[30]
Even if I
had been inclined to think that other process documents must surely exist,
given that clopidogrel bisulfate does appear to have been manufactured either
by Apotex Pharmachem or by Signa SA de CV (“Signa”), and that such documents as
were produced do appear somewhat scant, the presumption, from the sworn
affidavits of documents of Apotex, must be that Apotex has had access to these
documents, has concluded that they can only show that the process used is
non-infringing, and has determined that they will not be used at trial.
[31]
I include
in this remark any process documents that Apotex may believe exist and be in
the actual possession of Signa, a company which was, but is no longer, a party
to this proceeding (a discontinuance was filed on September 14, 2009). To the
extent Apotex, through a contract, an undertaking or at law, is entitled to
obtain from Signa a copy of process or manufacturing documents, such documents
are to be considered to be in its possession, power or control, and should have
been considered for relevance as Apotex’s own documents. If, however, Apotex
is not entitled to copies of Signa’s documents, then it was still required,
pursuant to Rule 223(2)(a)(iv) and 223(2)(e), to consider whether relevant
documents were in Signa’s possession, and to list those documents it believes
exist in schedule (iv) of its affidavits of documents.
(e)
All
manufacturing tickets (Batch Records) for manufacturing of bulk API on a lot by
lot basis.
[32]
Apotex has
disclosed such batch records, but only in respect of Apotex’s own production.
No batch records are listed with respect to production of API by Signa.
[33]
Given that
the evidence shows that Apotex has purchased API from Signa, and that batch
records do exist for Pharmachem’s production, I am satisfied that batch records
for Signa’s production likely exist and are relevant.
[34]
Apotex’s
only reply to Sanofi’s motion on this category is that Signa is a separate
entity from Apotex, is no longer a party, and that it would be “unfair” to visit
upon Apotex Signa’s discovery obligation in the absence of any evidence that
Apotex has power, possession or control over Signa’s documents.
[35]
In view of
the discussion set out above, Apotex’s position is clearly flawed. Apotex’s
obligation to list documents where – as here – it has grounds to either know or
believe them to exist and be relevant, is triggered whether or not Signa is an
independent third party, and whether or not Apotex is considered to hold power,
possession or control over its documents. It is Apotex’s representative’s
responsibility, in fulfilling his obligation to make appropriate inquiries and
investigations in order to inform himself to make the affidavit of documents,
to determine whether or not Apotex is entitled to obtain the original
documents, or copies thereof from Signa, and, as his determination falls, to
list the documents in either schedule (i) or schedule (iv) of the affidavit of
documents.
[36]
As the
Court does not have before it sufficient evidence to permit a determination as
to whether or not Apotex is to be considered as having power, possession of
control over Signa’s batch records for the API imported by Apotex, it cannot
direct in which schedule these documents ought to be listed. Nevertheless, my finding
that the documents likely exist, are relevant and have clearly not been listed
in any schedule is sufficient to conclude that Apotex’s affidavits of documents
are deficient and order that it serve complete affidavits of documents, listing
under the appropriate schedule the batch records for the relevant batches
manufactured by Signa.
(f)
All
notes and documents establishing how the documents listed in schedule “A” to
the statement of claim were located.
[37]
Sanofi
argues that, at law, a party who alleges that a patent is void for obviousness
in light of specific prior art has the burden of establishing that the said
prior art was publicly available and would have been located by the skilled
addressee. Sanofi has, in this case, specifically denied that the prior art
listed in schedule “A” to Apotex’s statement of claim would have been located
at the relevant time by a person skilled in the art conducting a reasonable and
diligent search.
[38]
Before
getting into the issue of the privilege asserted by Apotex, it is appropriate
to consider whether such documents would be relevant in the sense contemplated
by Rule 222.
[39]
Apotex
argues that how Apotex or its counsel located the prior art listed is
irrelevant, as the only relevant question for obviousness is whether the
skilled addressee would have found it. As a general statement of relevance, I
disagree with this position. How and whether Apotex, its counsel, or any one
else for that matter, did find prior art is evidence that this search, made at
that time, would have and did turn up the prior art. Whether a skilled
addressee would have considered making that search, and whether the same search
at an earlier date would have produced the same result may remain at issue and
may be a matter for expert evidence, but the fact of what a specific search,
made at a specific date, did turn up could well have probative value at a
trial.
[40]
Relevance,
for the purpose of Apotex’s disclosure obligation in an affidavit of documents,
requires a further analysis. To the extent documents exist that would show a
certain search being made and coming up empty, they would likely assist
Sanofi. Such a search would tend to show that the prior art, at least at the
date of the search and using its parameters, would not have been located; the
question for experts would then be whether the skilled addressee would have
made that search. A search merely evidencing the successful location of a
piece of prior art would seem only susceptible of assisting Apotex and as a
result, would only need to be disclosed if Apotex intended to rely on it at
trial. Sanofi argued that a successful search, but which uses arcane or
unusual parameters, would show that the art could not be or would not have been
located by a reasonable search. The fact that a piece of prior art can be
located by an unconventional search does not, by itself, negate or
disprove that a conventional search would not also have served to locate
it. However, I can conceive that in conjunction with certain other
circumstances, the fact that a piece of prior art was first located through an
unusual search might support the argument that another “reasonable” search was
only thought of through hindsight. Accordingly, while I agree with Sanofi that
documents showing how the art listed in the statement of claim could, depending
on what they show, be relevant in the sense that they could assist Sanofi, the
material before me falls short of showing that such documents likely exist.
[41]
The
privilege issue still needs to be addressed, however. To the extent Apotex, or
its counsel, did conduct prior art searches for the dominant purpose of
litigation, documents resulting therefrom may well be covered by litigation
privilege. At this time, the issue is not squarely before me, as there is on
record no evidence establishing the existence of such documents, let alone the
conditions in which they might have been created and from which privilege would
flow. However, to the extent such documents did exist that would either assist
Sanofi, or upon which Apotex intends to rely at trial, they would,
notwithstanding a claim of privilege, still correspond to the definition of
relevant documents. They would then stand to be listed and described in
schedule (ii) of the affidavit of documents, along with the grounds for each
claim of privilege in respect of them (see Rule 223(2).
[42]
At
present, schedule (2) of Apotex’s affidavits of document reads as follows:
The following are all of the relevant
documents, or bundles of relevant documents, that are or were in Apotex’
possession, power or control and for which privilege is claimed:
1.
Documents,
including but not limited to reports, notes, memoranda and letters, prepared
for the purpose of obtaining and giving legal advice;
2.
Documents,
including but not limited to reports, notes, memoranda and letters, prepared for
the purpose of assisting counsel in preparing for and prosecuting this action;
and
3.
Documents,
including but not limited to reports, notes, memoranda and letters, created in
contemplation of, in the preparation of or for the prosecution of this action.
4.
Documents
received from third party Apotex suppliers in a confidence that they would not
be disclosed where the element of confidentiality is essential to the
maintenance of the relationship with the third party suppliers, and more particularly:
[nothing is listed]
[The note is mine]
[43]
Rule
223(4) allows a party to treat a bundle of documents as a single document, but
under certain conditions only. The comments made in the decision of this Court
in Canada (Minister of Citizenship and
Immigration) v. Dueck,
[1998] F.C.J. No. 449, 146 F.T.R. 89, at paragraphs 7 to 12 are entirely apposite
and applicable to the present circumstances:
“7
Rule 448(3) allows a party to treat a bundle of documents as a single document
under two conditions. The first condition is that the documents be of the same
"nature". The second condition is that the bundle be described in
sufficient detail to enable a clear understanding of its contents. In my view,
Bundles "A" through "F" do not meet either of these two
conditions.
8 Each of Bundles "A" through
"F" claim privilege over a wide variety of documentation. Bundle
"A" is said to contain a multitude of documents described, inter
alia, as "correspondence, memoranda and other communications passing between
officers, servants or employees of the Applicant and their legal
advisors..." as well as "documents created or assembled and
information acquired by or for the use of Applicant's counsel in the
litigation, including investigation reports, briefs, memoranda, translations
and working papers". Bundles "B" through "F" then
reproduce word for word the description given to the documents contained in
Bundle "A". There is no apparent commonality amongst the documents
within each bundle. Indeed when pressed, counsel for the applicant conceded
that the only common thread running through these documents is the fact that
they were all subject to a claim of privilege. Obviously, if this was
sufficient to bring documents within Rule 448(3), there would never be any need
to list privileged documents.
9 As the documents in question are not of the same
nature, the applicant's attempt to describe them in bulk cannot possibly allow
the respondent to clearly understand the contents of each bundle as Rule 448(3)
requires. In the normal course, where a party resists the production of a
document on the ground of privilege it must supply a minimum of particulars in
respect of that document so as to allow the opposite party to decide whether a
challenge is warranted. A proper description would include a brief description,
the date, the sender and recipient if any, etc. However, a practice has developed over time whereby a
party claiming privilege over a significant number of documents may separate
the documents into classes and arrange them in bundles.4
Rule 448(3) has codified this practice. In my view, where documents of the same
class or nature are organized in bundles it is not necessary to identify each
individual document as this would defeat the very advantage of
"bundling".5
However, the less closely related the constituent documents in a bundle, the
greater the degree of detail required to adequately describe the bundle's
contents.
10 In the instant case, no manner of detail could
compensate for the dissimilarity in the medley of documents said to comprise
each bundle. I note that the applicant's description of the various bundles is
replete with qualifiers such as "including" and the disjunctive
"or" and references to "other documents" presumably beyond
those specifically noted. These terms offer very little insight and indicate
that the applicant does not have a firm grasp of the very documentation over
which she claims privilege.
11 Litigation privilege is an exception to the
general rule that parties to an action must fully disclose all information
relevant to their dispute. It is a substantive rule that must not be asserted
lightly.6
In the words of the House of Lords: "claiming privilege in an affidavit of
documents is not like pronouncing a spell, which, once uttered, makes all the
documents taboo."7 The
party claiming privilege must file an affidavit that is sufficient in identifying
the relevant documents and setting forth the particular basis on which the
claim rests. As noted by MacKay J. in Samson Indian Band v. Canada, where the
Court depends on affidavit evidence it necessarily relies on the due diligence
of counsel "as an officer of the court, advising the client upon documents
to be listed in full disclosure and upon which ones and for what grounds a
claim of privilege may be advanced...".8
12 In the present instance, it is my opinion that
counsel for the applicant did not meet a standard of due diligence in preparing
Schedule II of the Affidavit of Documents.”
(Emphasis mine)
[44]
To the
extent, then, that the bundles listed in schedule 2 of Apotex’s affidavits of
documents include documents evidencing a search for prior art which would
assist Sanofi or on which Apotex intends to rely at trial, its affidavits of
documents would be inadequate. As I cannot determine that such documents are
included in the bundles described and as this particular issue was not raised
by Sanofi on the motion, I will not declare the affidavits of documents to be
inadequate on that ground. I however expect that both Apotex and Sanofi will wish
to review the adequacy of their affidavits of documents’ schedule (ii).
(g)
All
testing results and documents on work done on any salts of clopidogrel.
[45]
As to
relevance, Sanofi argued that such testing would be relevant to Apotex’s
allegation, at paragraph 36 of its amended statement of claim, that clopidogrel
bisulfate does not have substantial advantages over other compounds disclosed in
an earlier patent. The comments made and conclusions reached for category (c)
above, in regard to the same argument, are equally applicable here.
Furthermore, to the extent Apotex has defended that part of Sanofi’s motion on
the basis of privilege, the comments made in respect of search results, under
category (f), also apply to such test results.
(h)(i)(j) Specimen/samples of API,
tablets or bottles of clopidogrel bisulfate, besylate and hydrobromide.
[46]
I agree
with Apotex’s submission that specimens and samples of material objects do not
meet the definition of “documents”, as found in Rule 222. The fact that
tablets would likely be impressed with words or letters, or that bottles may
have labels affixed on them was an ingenious, but ultimately unsuccessful
attempt by Sanofi’s counsel to secure production of these samples: even if
these objects could be construed as “devices on which information is recorded
or stored”, I would decline to exercise my discretion to grant a remedy to
Sanofi on this part of the motion, as its essential goal is clearly to secure
the “device” and not the information that might appear thereon.
(k)
All
contracts between Apotex and its supplier(s) of API.
[47]
The
argument made by Sanofi in its written representations is to the effect that
these documents may provide the terms of sale and specifically where the sale
took place, thus defeating Apotex’s pleaded position that “Any export by
Apotex to [other] countries did not result in a sale in Canada”. This argument is flawed. Whatever
its terms, the sale of API to Apotex for the purpose of making tablets
which are then sold or exported cannot be characterized as a sale by
Apotex, in Canada or elsewhere. At the hearing, counsel instead argued that
the act of importation in Canada is an act of infringement,
and that the terms of the contract(s) between Signa and Apotex would show who,
as between Signa and Apotex, was the actual importer. Sanofi’s argument has
some merit. However, Apotex appears to have disclosed all purchase orders, invoices
and customs documents on a batch-by-batch basis, which would be expected to be
far more probative of who is the importer of each actual shipment than a
general contract. In view of this, and as I suspect that Sanofi’s interest in
this contract has far more to do with what the contract would reveal as to
Apotex’s right to obtain copies of Signa’s documents, I decline to exercise my
discretion to grant Sanofi’s motion on this aspect. The issue of Apotex’s
possession, power or control over Signa’s documents may become an issue
relevant to discovery, but it is not an issue relevant to the facts pleaded in
the action.
(l)(m)(n) Letters
of permission providing permission for Apotex to export and sell in foreign
countries, correspondence “regarding” sales of Apotex’s clopidogrel in foreign
countries and contracts with local companies who sell Apotex’s clopidogrel in
foreign countries.
[48]
There is
no evidence before me that, apart from the actual invoices that have been
disclosed by Apotex in respect of clopidogrel exported from Canada, any such
correspondence, letters or contracts exist that would tend to support Sanofi’s
contention that the sales were made in Canada. Nor is there any evidence that
such documents exist that would point to the existence of exports to countries
other than those specifically identified. Sanofi has therefore not met its
burden of establishing the inadequacy of Apotex’s affidavits of documents in
this regard.
Apotex’s motion
[49]
Apotex’s
notice of motion lists ten categories of documents, but all can be dealt with –
and were in fact argued – under four general headings.
(a) Documents
relating to the negotiations and surrounding circumstances to the agreements
entered into in the context of U.S.
proceedings between the parties.
[50]
Apotex’s
statement of defence pleads that certain agreements have been entered into
between Apotex and Sanofi in the context of a U.S. action involving
clopidogrel, whereby Sanofi has agreed to limit and recover exclusively in the
U.S. action any loss it has suffered as a result of the export and sale by
Apotex of clopidogrel from Canada into the United States. Sanofi’s position is
that the agreements in question only apply to Sanofi’s recovery action in the
United States, only to sales made in the United States and that they do not
operate to restrict Sanofi’s right to claim in Canada its full loss in respect
of acts of infringement in Canada (that is, manufacture, sales or exports found
to have been made in Canada), subject to credit being given to Apotex for
damages that might already have been recovered in the U.S.
[51]
Apotex
submits that it is obvious that the parties are at odds over the proper
interpretation of the contracts, and that as a result, “evidence as to the
intentions of the parties, including statements made before and after the
agreement, the circumstances when the agreement was made and subsequent conduct
of the parties” become relevant to the interpretation of the contract.
[52]
As
mentioned, the parties are expected to already have a clear idea of what their
case is about and what is required to prove it at trial. The facts at issue
are expected to be pleaded with some precision and clarity. In this instance,
it is clear from both Apotex’s pleadings and from Sanofi’s that as concerns the
effect of the agreements, each party relies on the terms of the agreements alone.
Apotex has also specifically pleaded, as part of its arguments of abuse of
process and of estoppel, Sanofi’s conduct in taking suit in the U.S. and its
submissions in opposing, on the basis of the U.S. agreements, proceedings previously
brought by Apotex before the Ontario Courts. Beyond those very specific facts,
neither Apotex nor Sanofi have pleaded as facts relevant to the interpretation
of the agreement any fact relating to statements made by them or their opponent
before or after the agreement, to intentions expressed or held, or to conduct.
Surrounding circumstances and the subjective intentions of the parties may in
certain circumstances be relevant, but only where the terms of the contract are
ambiguous, and only where adequately pleaded. Neither party before me took the
position that the contract terms were ambiguous, and as stated, the pleadings
of both clearly rely solely on the expressed terms of the contracts. On the pleadings
as they exist, this category of documents is irrelevant.
(b) Documents
concerning the activities of Sanofi and equivalent patents held by or licensed
to it in foreign countries.
[53]
The
paragraphs of Apotex’s statement of defence which speak of Sanofi’s activities
(or lack thereof) in foreign countries read as follows:
“7. The Plaintiffs seek by the
within action to enforce the ‘777 patent extraterritorially. However, the ‘777
patent does not have extraterritorial force and effect. Any attempt to recover
for alleged harms occurring outside of Canada must be made under any rights
held by the Plaintiffs in foreign jurisdictions, which Apotex denies exist. As
a result, the Plaintiffs have no standing to claim in respect of activities
alleged to be carried out extraterritorially.”
“14. Apotex denies that the
Plaintiffs have been harmed by any purported export of clopidogrel bisulfate
products to Hong
Kong, New
Zealand, Iran, Libya, Malaysia and Singapore. Any export by Apotex to the
aforementioned countries did not result in a sale in Canada. In addition, the Plaintiffs have
either not filed patents corresponding to the ‘777 patent in these
jurisdictions or any such patents have expired. As a result, any sales as a
result of the purported exports by Apotex would not have been made by the
Plaintiffs if such activity had not occurred.”
“15. Apotex further denies that any
of the Plaintiffs carry on business in Hong Kong, New Zealand, Iran, Libya, Malaysia or Singapore. As a result, the Plaintiffs have no
claim in respect of these alleged sales and no status to advance such claim.”
[54]
Thus,
Apotex has formally pleaded the following material facts: That Sanofi does not
hold rights to the invention in foreign jurisdictions and that Sanofi does not
carry on business in Hong
Kong, New
Zealand, Iran, Libya, Malaysia or Singapore.
[55]
In reply,
Sanofi has pleaded:
“3. The Plaintiffs specifically
deny and join issue paragraphs 6 to 19 of the Statement of Defence and state
that many of the allegations contained therein are irrelevant. Further, the
Plaintiffs have suffered harm by virtue of acts of infringement in Canada,
including the manufacture of clopidogrel in Canada by Apotex Inc. and Apotex Pharmachem
Inc. (the “Defendants”).”
[56]
It is
important to note that Sanofi’s position is, and has consistently been, in this
and other motions before me, that its action and entitlement to relief are
based on its rights flowing from the Canadian patent, and are limited to acts
of infringement of the Canadian patent which can be established or deemed to
have been made in Canada. Despite the plea contained
at paragraph 7 of Apotex’s statement of defence, it is therefore clear that
there is no issue in dispute between the parties as to whether Sanofi has a
right or standing to claim for acts of infringement that occurred outside of Canada or a right or standing to sue
under any foreign patent rights. Although the absence of foreign patent rights
is a fact specifically pleaded in Apotex’s statement of defence, it is clearly
an irrelevant allegation which, even if substantiated, cannot affect the result
of the action. As such, this allegation cannot be used to establish the
relevance of documents for discovery purposes. (Apotex v. Merck & Co.,
(2004) 33 C.P.R. (4th) 387 at par. 15, affirmed at (2005) 38 C.P.R.
(4th) 289).
[57]
As to
whether Sanofi carries on any business in foreign jurisdictions, or would have
been capable of making the allegedly infringing sales, Sanofi does not dispute
that these facts may be relevant to the calculation of the damages suffered by
Sanofi. However, it points out that by order dated November 2, 2009, all
issues and discovery obligations relating solely to the quantum of
damages claimed by Sanofi or profits earned by Apotex and claimed under an
accounting of profits have been bifurcated and deferred to be dealt with after
the main trial on liability. To the extent Sanofi’s business presence or
activities relate to whether or not it would have made the allegedly infringing
sales, I agree that these facts relate to the bifurcated issues and would give
rise to no discovery obligations or rights at this time.
[58]
Apotex
further argued at the hearing that Sanofi’s inability to make sales in foreign
countries is not solely a matter of damages, but is also relevant to
Sanofi’s entitlement to an accounting of profits. That argument is articulated
nowhere in Apotex’s pleadings or in its motion record. It was raised for the
first time at the hearing, and no authorities were provided in its support. It
is, I believe, a novel argument, and while I conceive that a plaintiff’s
demonstrated inability to effect certain sales might arguably disentitled it
from claiming the profits generated by the defendant on those sales, I would
incline to think that this is a matter going to the quantification of profits
in an accounting of profits, rather than one going to entitlement to an
accounting of profits at large. If the plaintiff’s ability to generate a sale
is indeed relevant to an accounting of profits and is a matter going solely to
quantification, then Apotex is not entitled to a discovery of documents
relevant thereto at this time. If, on the other hand, this issue is one to be
considered in determining whether the plaintiff should be entitled to an
accounting of profits at all, then it is not bifurcated and is subject to
discovery. I find that I am unable, for lack of adequate submissions by the
parties, to make that determination here, and decline to do so.
[59]
Even
assuming, however, that Sanofi’s lack of commercial activity in foreign
countries is properly at issue on the main trial of this matter, Sanofi’s
obligation to disclose would be limited to documents that would assist Apotex
in establishing that Sanofi does not carry on business in other
countries, or to documents on which Sanofi intends to rely at trial to
show that it does.
[60]
It is far
easier to conceive of the kind of documents that would establish that commercial
activity takes place than it is to imagine documents that would prove or
establish the absence of activity. Apotex’s counsel could only suggest that
some corporate reports might provide a list of countries where Sanofi is
active, thus indirectly showing where it is not active, or that some corporate
documents might exist evidencing a corporate decision to not pursue or to cease
activities in a certain country. While possible, the suggestion is at this
time entirely speculative. Apotex has therefore not met its burden to show
that documents likely exist that would assist it in establishing that Sanofi does
not carry on business in any of the subject countries. To the extent
documents exist that show that Sanofi does carry on business in those
countries, Apotex is entitled to assume that Sanofi has decided not to rely on
them at trial. Accordingly, even assuming that the issue of Sanofi’s
activities in foreign countries is relevant to its entitlement to an accounting
of profit, Apotex has not established a deficiency in Sanofi’s affidavits of
documents.
(c) Documents
produced by Sanofi in foreign litigations concerning clopidogrel.
[61]
Apotex has
pointed to six individual documents as examples of documents which were
produced by Sanofi in foreign litigations and which it says are relevant to the
issues in dispute here, yet were not disclosed in Sanofi’s affidavits of
documents. Sanofi disputes the relevance of most of these documents. I need not
determine whether each of these documents is in fact relevant, or whether each
should have been disclosed by Sanofi. Even assuming that Sanofi’s affidavits
of documents were deficient as a result of these documents being missing, I can
find no common thread between these documents that would indicate that they
were overlooked or omitted deliberately, through a systemic flaw in the manner
in which Sanofi made its enquiries or considered relevance, or simply through
error. As such, one cannot conclude that any further relevant documents likely
exist and have been “missed”. While some of the documents identified by Apotex
are relevant, I certainly would not characterize them as important, obviously
relevant or clearly probative, such that the failure of Sanofi to have
disclosed them would raise concerns as to its diligence, justifying that it be
ordered to review its affidavit of documents.
[62]
At best,
the motion has brought to Sanofi’s attention the potential relevance of
documents, if any, that might show Sanofi’s knowledge of regulatory
requirements to file for patent protection in respect of individual enantiomers
(as motivation to separate them) or show its internal assessments as to what to
expect, if anything, as to the respective enantiomers’ activity and toxicity
before they were created and tested. Sanofi’s continuing obligation to review
its documents in light of these arguments has been triggered. No further order
is warranted.
(d) Translation
from French to English of documents produced by Sanofi both in this and foreign
litigations.
[63]
This
category does not concern translations that might be in Sanofi’s possession,
but translations of Sanofi’s documents that might have been generated by Apotex
or its solicitors in the context of foreign litigation and were not publicly
filed as evidence therein.
[64]
Apotex
concedes that such translations would not be deemed to be within Sanofi’s
power, possession or control but that they would in fact be in Apotex’s own
possession. The difficulty is that protective orders or the implied
undertaking rules regarding use of discovery documents in these foreign
proceedings operate to prevent Apotex’s foreign counsel to disclose these
translations to Apotex for use in this matter. What Apotex requests is an
order requiring Sanofi to relieve Apotex’s foreign solicitors from the
strictures of these orders or rules, or waive them to permit the communication
and use of these translations.
[65]
It appears
that Sanofi is not averse to agreeing to some form of waiver, but the parties
disagree as to the precise mechanism to be used, hence Apotex’s present claim
for relief. Assuming, but without determining either way, that it is within
the Court’s power to order a party to renounce or waive the protection of other
Court’s confidentiality orders or implied undertakings rules, I would
nevertheless decline to make such an order in the circumstances.
[66]
The
operation of these restrictive rules or orders does not prevent Apotex from
having access to relevant information. Apotex has, in the original French
language, all of Sanofi’s relevant documents. It can have them translated at
will, and as French is one of this country’s official languages, it cannot be
said that the task presents insurmountable logistical difficulties. Apotex’s
desire to have access to such translations as already exist is merely a matter
of cost and convenience. Interfering, even indirectly, with the orders or
procedural rules of foreign Courts by ordering a party to waive their
protection is not something which this Court should do lightly. If such a
power does rest with the Court, it should be used sparingly, and only when it
has been demonstrated that such a step is necessary to permit a party to have
access to information which is relevant and could not otherwise be obtained.
Apotex has means to secure its own translations of the documents, if at a
cost. To the extent Apotex can demonstrate that Sanofi has unreasonably withheld
its consent, it is a matter which should properly be raised in the context of a
motion for direction as to costs, after trial.
Costs
[67]
At the
beginning of the hearing, both parties agreed that the reasonable costs of each
motion, if awarded, should be fixed at $1,500. Apotex’s motion was
unsuccessful, while Sanofi’s motion was granted only in respect of one of the 14
issues argued. Looking simply at the outcome, Sanofi should be entitled to its
costs of Apotex’s motion, while Apotex should be entitled to the larger part of
its costs in defending Sanofi’s motion.
[68]
I also
note that the motions were largely unsuccessful as a result of both parties
having failed to meet their burden of proof to show the existence of other
relevant documents. In the vast majority of cases, the reason for this was not
because of how the Court weighted contradictory evidence, but simply because no
evidence was even tendered.
[69]
Considering
counsel’s level of experience, the failure to lead the bare minimum of evidence
to succeed on a motion speaks either of lack of preparation or the use of a
motion for tactical purposes, neither of which should be condoned or encouraged
by an award of costs. There will, accordingly, be no costs awarded on either
motion.
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