Date: 20101118
Docket: T-811-08
Citation: 2010 FC 1154
Ottawa, Ontario, November 18, 2010
PRESENT: The Honourable Mr. Justice Barnes
BETWEEN:
NOVOPHARM
LIMITED
Plaintiff
and
ELI
LILLY AND COMPANY
Defendant
SUPPLEMENTARY REASONS FOR
JUDGMENT AND JUDGMENT
[1]
In
my Reasons for Judgment and Judgment in this proceeding (see 2010 FC 915), I
reserved on the issue of costs pending the receipt of further submissions from
the parties. These are my supplementary reasons concerning that outstanding
issue.
[2]
Novopharm
Limited (Novopharm) advances a claim to lump sum costs including disbursements
of $701,702.62. This figure comprises $427,736.00 for assessable counsel fees
with the balance made up of disbursements. Novopharm’s claim to counsel fees
is based on an assessment at the high end of Column V, Tariff B.
[3]
Eli
Lilly and Company’s (Lilly) position is that an award of costs ought to be made
under the middle of Column III and that, because of “multiple errors” made in
Novopharm’s draft Bill of Costs, a taxation of costs is required. In the
alternative, Lilly says that if a lump sum is awarded it should be no more than
$167,738.30 made up of $55,862.63 in counsel fees and $109,400.20 in
disbursements.
[4]
I
agree with counsel for Novopharm that a lump sum is a desirable disposition for
an award of trial costs. However, the parties are so far apart and disagree on
so many points that I have concluded that an assessment is required, subject to
the following guidance.
[5]
Lilly
is correct that Column III represents the default measure for a claim to costs
under our Rules. That assumes, however, that the case is one of average
complexity. This action involved a challenge to the validity of Lilly’s Canadian
Patent No. 2,209,735 claiming the use of atomoxetine to treat ADHD. Like many
cases of this kind, the determinative evidence was given by expert witnesses
and involved multiple issues of more than average complexity.
[6]
In
support of their positions on the application of the Tariff, each party has
also made allegations concerning the conduct of the other that is said to have
extended the litigation or was obstructionist or improper. Lilly also argues
that it successfully defended several of Novopharm’s assertions of invalidity
and success should therefore be seen to be divided.
[7]
While
I agree that this litigation was unusually acrimonious and was undoubtedly
prolonged by the strategic manoeuvrings of the parties, I am not in a position
to attribute fault in a meaningful way to one party over the other. I do not
agree, though, that the success of the case was divided or that Column III is
the appropriate basis for assessing Novopharm’s costs. It is more common in
cases of this type for the upper end of Column IV to be applied. Furthermore,
the successful party is generally not penalized for raising substantive issues
that are not ultimately accepted by the Court: see Sanofi-Aventis Canada
Inc. v. Novopharm Limited, 2009 FC 1139. On this basis, I would award
costs to Novopharm at the upper end of Column IV.
[8]
I
am also prepared to allow Novopharm to recover for more than one counsel. Although
the authority of an Assessment Officer to allow for more than one counsel fee may
be limited by the Tariff, the jurisdiction of the Court in fixing costs is not
so circumscribed: see Rules 400(1), 400(4) and 400(6). Novopharm will be
entitled to claim for two first counsel and one second counsel for preparation
and attendance (where engaged) at trial, including the preparation of the outline
of opening argument. Preparation time shall be allowed at one day for every
day of trial including argument. For the following pre-trial and post-trial
matters Novopharm shall be entitled to claim for one first counsel and one
second counsel (where in attendance):
(a) preparation
of pleadings and motion materials and attendance on motions where costs were
awarded to Novopharm (offset by any costs awarded to Lilly) or for pre-trial
conferences;
(b) preparation
for and attendance for document and oral discovery. Preparation time shall be
allowed at one day for every two days of discovery of Novopharm’s witnesses and
one day for each day of discovery of Lilly’s witnesses;
(c) preparation
of reports or affidavits for those witnesses who appeared at trial and for
review of reports from Lilly’s witnesses, whether they testified or not; and
(d) preparation
of Novopharm witnesses who testified and for preparation to cross-examine Lilly
witnesses.
[9]
With
respect to disbursements for counsel, I will allow regular economy air fares
for counsel on trips of up to 3 hours in duration and business class fares for
anything of longer duration. Hotel expenses shall not exceed $300.00 per
night. Local travel by counsel is not recoverable except for trips to and from
the airport and to and from the Court. Out-of-town meals and incidentals will
be allowed up to $175.00 per diem for each person. The cost of meals during
the trial shall not exceed $75.00 per diem per person.
[10]
The
fees charged by United States counsel are assessed at 90% of the amount
billed to reflect the adverse outcome of that motion.
[11]
The
cost of transcripts from T-1565-08 is not allowed.
[12]
Reasonable
expert fees and disbursements for any witness who testified are allowed. This
shall include time spent with counsel in preparation of reports or to testify,
as well as any time spent assisting counsel to examine opposing witnesses.
[13]
Notwithstanding
the above, all disbursements shall be taxed to ensure that they are reasonable
and necessary for the conduct of this litigation.
[14]
It
is my hope that with the guidance of these reasons the parties will be able to
resolve the outstanding issue of costs or to substantially narrow the issues in
dispute.
JUDGMENT
THIS COURT’S JUDGMENT is that Novopharm
Limited is entitled to tax its costs in accordance with these reasons.
“ R. L. Barnes ”
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