Date:
20120925
Citation:
2012 FC 1121
Toronto, Ontario, September 25, 2012
PRESENT: The Honourable Mr. Justice
Zinn
Docket: T-991-10
BETWEEN:
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FOURNIER PHARMA INC. AND
LABORATOIRES FOURNIER S.A.
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Applicants
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and
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THE MINISTER OF
HEALTH AND
SANDOZ CANADA
INC.
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Respondents
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Docket: T-1184-10
AND BETWEEN:
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FOURNIER PHARMA
INC. AND
FOURNIER
LABORATORIES IRELAND LTD.
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Applicants
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and
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THE MINISTER OF
HEALTH,
ALKERMES PHARMA
IRELAND LIMITED AND SANDOZ CANADA INC.
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Respondents
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REASONS FOR ORDER AND ORDER
[1]
The respondent (Sandoz) and the applicants
(Fournier) have informed the Court that they are unable to agree on the amount
of costs which Sandoz was awarded in the Reasons for Judgment which issued in
these applications. There are eight issues in dispute.
A. Level of Award of Costs
[2]
Sandoz “submits that having regard to the
complexity of the legal and factual issues that were at play, an award of costs
at the middle of Column IV or, alternatively, the upper end of Column III is
justified.” Fournier submits that Sandoz should not be entitled to any costs
because of the “clear division of success” or alternatively ought to be reduced
to 25% of the assessed total because the majority of the time taken related to
issues of validity on which Sandoz was unsuccessful; the applications being
determined in its favour on the basis of infringement.
[3]
The Court has already determined that Sandoz is
entitled to its costs; accordingly, the submission that it should receive nothing
is rejected.
[4]
Although Sandoz was ultimately successful in the
application, it was only successful on the issue of infringement. Much of the
evidence before the Court and the time spent in submissions related to issues
of invalidity. Although Sandoz failed to establish invalidity, it cannot be
said that all of the positions it advanced were frivolous or clearly without
merit. Nonetheless, a significant amount of time and expense would have been
saved had Sandoz focused its allegations and eliminated or not pursued those
that had, at best, a marginal chance of success. I agree with the observation
in Adir v Apotex Inc, 2008 FC 1070 para 6, that “Where an otherwise
unsuccessful party has persuaded the Court of the merits of its position on
discrete issues, the award of costs may be reduced.”
[5]
I am of the view that it is just to reduce the
costs otherwise payable to Sandoz; however, I am not persuaded that a reduction
of 75% as proposed by Fournier is just. Recognizing that an award of costs is
to be neither punitive nor extravagant, I find that a reduction of one-third is
warranted and more in keeping with the Court’s assessment of issues that had
little merit and ought not to have been pursued to hearing.
[6]
Typically costs are assessed at the mid-point of Column III of the Tariff; however, numerous judgments of this Court have
assessed costs in pharmaceutical litigation at higher levels. Given the
complexity of this litigation, I find that the costs are to be assessed at the
higher end of Column III.
B. Second
Counsel
[7]
Fournier agrees that Sandoz is reasonably
entitled to have its costs for two counsel, one senior and one junior, at the
hearing and when conducting cross-examinations, provided two were present.
Sandoz also seeks to be awarded costs for two counsel when defending a
cross-examination. I can see no reason to depart from the usual order and am
not persuaded that Sandoz ought to be awarded costs for two counsel when
defending a cross-examination.
C. Preparation of Affidavits/Memorandum
[8]
Sandoz requests ten (10) assessable services for
the preparation of each expert affidavit and three (3) services for each
non-expert, and ten (10) assessable points for the preparation of its
memorandum of fact and law. Sandoz submits that such an increased award is
reasonable “considering the length and complexity of the expert reports.” No
precedent has been provided by Sandoz where such an order has been made, nor
did it provide any support for its statement that “each” affidavit was entitled
to the amount under Item 2.
[9]
I agree with Fournier that Sandoz is entitled to
only one Item 2 claim in each application for the “preparation and filing of all
… respondent’ records and materials [emphasis added].”
[10]
Item 19 dealing with the memoranda provides at
the middle of Column III that Sandoz is entitled to a range between 4-7
assessable points. Fournier submits that because Sandoz was ordered to file
its memoranda in a form that complied with the Federal Courts Rules,
it should be awarded “a single assessable service in the middle of Column III
for 5 units.” In my view, to do so would be punitive.
D. Preparation of Cross-examination
[11]
Sandoz asks for preparation time under Item 8 of
Tariff B for each day of the cross-examination of Dr. Muzzio because it required
a number of days to complete and there was a gap in the cross-examinations of
almost 3 months. I agree with Fournier that in patent matters it is expected
that substantial time will be spent on preparation and that the item does not
distinguish between cross-examinations completed in one day, over several days,
or those that involve breaks in time.
E. Travel
[12]
Sandoz seeks its costs to travel outside Ontario to attend cross-examinations and meet with witnesses. Fournier agrees “but only on
the basis that all travel costs are assessed in economy class, for a single
hotel room and exclusive of food, entertainment, and alcohol expenses.” I
agree that entertainment and alcohol expenses are not recoverable, however,
Sandoz is entitled to recovery of reasonable food expenses.
F. Interlocutory Motions
[13]
Sandoz seeks its costs of the consolidation
motion which Fournier successfully brought just prior to trial. Fournier
submits that it ought to be awarded its costs on that motion to be set off
against Sandoz’s award. First, although Sandoz was successful, I am of the
view that it is not entitled to be awarded its costs given the lateness of the
motion and the ultimate disposition of these applications. On the other hand,
neither is Sandoz entitled to the costs of the motion because it ought to have
consented to the consolidation motion, particularly given its position that it
had not filed contradictory evidence in these two applications. No party is
awarded costs of the consolidation motion.
G. Interest
[14]
Sandoz seeks interest at 2% from the date of
judgment and Fournier offers no opposition to that submission.
ORDER
THIS COURT ORDERS THAT in each
application, Sandoz is entitled to its costs assessed as follows:
1.
Its costs assessed at the upper end of Column
III and then reduced by one-third;
2.
Costs for two counsel, one senior and one
junior, at the hearing and when conducting a cross-examination, provided two
were present, and its costs for one counsel when defending a cross-examination;
3.
Costs in each application under Item 2 of the
Tariff assessed at seven (7) units for all of the respondent’s records and
materials filed, and seven (7) units under Item 19 for its memorandum of fact
and law;
4.
Costs under Item 8 of the Tariff shall not be
increased for the preparation for the cross-examination of Dr. Muzzio;
5.
Costs for out of Province travel to be assessed
in economy class, for a single hotel room, and food, excluding entertainment
and alcohol expenses;
6.
No costs are awarded for the consolidation
motion; and
7.
Sandoz is awarded interest on the costs awarded
at the rate of 2% from
June
15, 2012.
"Russel
W. Zinn"
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