Date: 20090402
Docket: T-51-08
Citation: 2009FC345
Ottawa, Ontario,
April 2, 09
PRESENT: Madam Prothonotary Mireille Tabib
BETWEEN:
ELI LILLY CANADA INC. and
ELI LILLY AND COMPANY
Plaintiffs
- and -
SANDOZ CANADA INCORPORATED
Defendant
AND
BETWEEN:
SANDOZ CANADA INCORPORATED
Plaintiff by Counterclaim
- and -
ELI LILLY CANADA INC. and
ELI LILLY AND COMPANY
Defendants to the Counterclaim
REASONS FOR ORDER AND ORDER
[1]
I am
seized of a motion by the Plaintiffs, Eli Lilly Canada Inc. and Eli Lilly and
Company (hereinafter jointly referred to as “Lilly”) for an Order compelling
the Defendant Sandoz Canada Incorporated (“Sandoz”) to produce a further and
better affidavit of documents. The motion also seeks an Order that Sandoz produce
unredacted and complete copies of documents produced in a redacted or
incomplete form, and that it be compelled to request and obtain from persons
related to it and from its supplier, ScinoPharm Taiwan Ltd. (“ScinoPharm”), documents
relating to the process used to make Sandoz’ product and an Order requiring the
Minister of Health to produce documents relating to Sandoz’ product in its
possession.
[2]
Although
it has ultimately been unnecessary to formally determine the issues originally
raised in this motion, these reasons are issued in the hope that they will draw
the profession’s attention to common difficulties and inefficiencies in the
discovery process of intellectual property matters, and provide some guidance
as to how certain best practices could be considered or developed to avoid or
better manage these difficulties.
[3]
The motion
is brought in the context of a patent infringement action brought by Lilly
against Sandoz. The patents at issue are Canadian Patents No. 2,098,881 (“’881
Patent”) and 2,098,886 (“’886 Patent”), both of which cover processes useful in
the preparation and production of the anti-cancer drug gemcitabine. The
patents do not claim gemcitabine itself but only certain aspects of processes
for making gemcitabine and an intermediate in its preparation. It is admitted
that Sandoz imports, markets and sells in Canada gemcitabine made by ScinoPharm. For the
purposes of Lilly’s motion, the issue between the parties in this action is
whether the process used by ScinoPharm in making the gemcitabine supplied to
Sandoz falls within the claims of the ’881 or ’886 Patents. For the purpose of
this motion, it is also not in dispute that ScinoPharm is a third party not
related to Sandoz. From this, one already understands that to the extent
documents exist which might establish that the process actually used ScinoPharm
falls within the claims of the patents, these documents primarily originate
from ScinoPharm any documents which Sandoz might have in its current possession
and which the Minister of Health might have as a result of regulatory filings
would also have originated from ScinoPharm.
[4]
The motion
was initially filed in September 2008 and the materials in support and in
opposition to the motion have increased exponentially since the initial motion
record was filed, with ScinoPharm intervening to oppose Lilly’s motion
requiring production from the Minister of Health and seeking modifications to
an existing Protective Order to afford further protection to the documents it
would voluntarily produce through Sandoz. At the same time, Sandoz was in the
process of communicating to Lilly documents it had received from ScinoPharm and
listed in its affidavit of documents but had yet to deliver at the time the
initial motion was brought. It became apparent that those documents were
heavily redacted and appeared to be in many cases portions of larger
documents. This led of course to further affidavits, counter-affidavits,
cross-examinations on affidavits, and supplementary and further supplementary
records of arguments.
[5]
It would
clearly have been far preferable for the parties to have devised an informal,
yet clearly structured process to exchange requests for specific documents they
believed were missing from the production, responses thereto and additional
disclosures before bringing formal motions. Absent agreement as to the details
of such a process and the deadlines for compliance, the parties could and
should have moved for case management at an early date to devise such a
process. This would have fostered a better understanding between the parties
of their respective positions and concerns and the legal and factual grounds
for same. The parties would then have been able to narrow their arguments much
faster and present to the Court focussed and helpful evidence and submissions
through a single exchange of records. Instead the Court was faced with a
constantly evolving stream of further and supplemental records through which
the Court had to sift in an attempt to understand which issues have been
resolved, which issues remain and which resulting new issue must be addressed.
[6]
As of the
second and final hearing day of this motion, the positions of the parties and
of ScinoPharm were are follows:
[7]
Lilly’s
demand for further disclosure of documents was somewhat narrowed. Several
additional documents had been produced by Sandoz, albeit with redactions. Lilly
acknowledged that some of the information claimed to have been missing from the
redacted documents was in fact provided in other documents or parts thereof.
It was also understood that some of the redacted or missing parts of documents
may not be as relevant as originally claimed.
[8]
Sandoz
came to realize some shortcomings in its documentary disclosure and the process
it had utilized in redacting documents. It acknowledged that some of the
redactions should not have been made; it recognized that some additional
documents should be requested from ScinoPharm; it recognized the need for a
corporate representative of Sandoz to actually review the unredacted versions of
the documents it had obtained from ScinoPharm and consider the relevance of the
redacted portions of these documents.
[9]
For its
part, ScinoPharm, having been comforted by the variations to the terms of the
Confidentiality Order which were ordered pursuant to its companion motion, confirmed
that it would continue to cooperate with Sandoz’ requests for communication of
documents. It confirmed that its concerns related purely to the protection of
its trade secrets and that it would take no position and would not intervene on
the issue of the relevance of the documents requested from it by Sandoz.
[10]
On the
whole, given that Sandoz had undertaken to review and turn its own mind to the
question of the relevance of documents provided by ScinoPharm, and given that it
had undertaken to consider the existence of other potentially relevant
documents in ScinoPharm’s possession and make the appropriate request for
production, it became clear that a further and better affidavit of documents
would in any event be voluntarily produced by Sandoz.
[11]
It further
appeared to me that with the exception of some regulatory filings made by
ScinoPharm (in Canada and in other jurisdictions) which may remain in issue in
any event, it is very likely that Sandoz’ own review of the unexpurgated
documents and its efforts to obtain from ScinoPharm further relevant documents
could potentially resolve any remaining issues between the parties. Sandoz’
review process of course will be carried out in light of the parties’ better
understanding of the issues at play, gained through the briefing and hearing of
this motion. To the extent any issues remain between the parties after this
process is completed, such new issues will most probably be further refinements
of arguments canvassed on this motion. Attempting to craft specific directions
to Sandoz to cover and anticipate these issues would likely create more
difficulties than it would resolve.
[12]
Trusting
in the good faith and good cooperation which both parties and ScinoPharm
professed at the hearing, the present order will therefore not dictate which
parts of which documents should be “unredacted”, which additional documents
should be sought from ScinoPharm and which missing parts of documents should be
produced. Nevertheless, the following general comments should be borne in mind
by the parties.
[13]
The
redactions currently made to ScinoPharm’s documents were obviously driven as
much, if not more, by its desire to protect its trade secrets than by a cogent
analysis of relevance. Pinpoint redactions were sometimes made in sections of
documents directly relevant to the allegedly infringing process. Lilly has
argued that a description of the relevant parts of a chemical process cannot be
validated as representative of the process actually taking place if they are
not disclosed in their full context, including a verifiable starting point,
intermediary reactions and verifiable products and bi-products. I find this
argument compelling, and as a consequence, would caution Sandoz against taking
too narrow a view of relevance, and redacting parts of process documents which,
although describing parts of the process falling outside the claims of the
patents, are nevertheless necessary to validate the representativity or
commercial viability of the process allegedly described in the documents.
[14]
I do not
accept Lilly’s argument that where a document contains relevant information and
is disclosed in an affidavit of documents, the receiving party is in all cases
entitled to production of the entire, unredacted document. Very large
documents that have identifiable and relatively independent sections lend
themselves well to partial production. When it comes to redacting portions of
text within a disclosed part or section of a document, redactions may also be
permissible but the following considerations should apply: The redacted
portion should be clearly irrelevant to the issues in dispute and would clearly
not assist in properly understanding those parts of the documents which are
relevant. Redactions should also only be resorted to where important
confidentiality concerns exist. In circumstances such as the present action,
where enhanced confidentiality protection is afforded to certain types of
information, the case for redactions is weaker. Where a redaction is nevertheless
made and its propriety is contested, mechanisms should be provided for outside
counsel for the receiving party to view the unredacted document to ascertain
the basis for the redactions.
[15]
The
Plaintiffs are not entitled to demand that Sandoz provide translations of
documents written in a foreign language. To the extent a translation exists,
that translation is likely itself a relevant document to be disclosed.
However, where a translation does not exist, the producing party is not
required to create one unless and until it tenders the document as evidence in
the proceeding.
[16]
I am not
prepared at this stage to order the Minister of Health to produce documents in
its possession. Such documents as the Minister of Health does have in its
possession are also in ScinoPharm’s possession and the evidence before me
establishes that to the extent they are relevant, Sandoz has undertaken to
request them from ScinoPharm and ScinoPharm has expressed a willingness to
provide them. Indeed, some productions from the Canadian regulatory filings
have already been made and the Court expects that Sandoz will include these
documents in its review process, so as to eventually disclose and produce to
Lilly all relevant portions of these documents.
[17]
As for
regulatory filings made by ScinoPharm in other jurisdiction than Canada, Sandoz has taken the
position that they are not relevant. By this, I take Sandoz to indicate that
it will not request ScinoPharm to produce them to it so that it can in turn
produce them to Lilly. Sandoz says that foreign regulatory filings are not
probative of the process actually used by ScinoPharm to produce the gemcitabine
sold by Sandoz in Canada. Sandoz adds that since it
has requested from ScinoPharm and produced to Lilly the actual batch production
records for the gemcitabine actually distributed in Canada, it has produced the best and most
relevant information. The problem with that approach is that it assumes that
the records Sandoz received from ScinoPharm are unimpeachable and must be
accepted as conclusive evidence of the ScinoPharm process. There is merit to
Lilly’s argument that the regulatory filings are a possible source of information
as to what the ScinoPharm process might be. There is also merit to Sandoz’s
counterargument that if the regulatory filings exactly match the production records
obtained from ScinoPharm, ScinoPharm’s production records would be the best
evidence of the process actually used, and the regulatory filing far less
relevant. At this point, however, Lilly is entitled to disclosure by Sandoz of
all documents of which Sandoz has knowledge and which may assist Lilly in
establishing that ScinoPharm’s process infringes its patents. It is not up to
Sandoz to select, from several documentary sources of relevant information,
which one is the most probative or the most useful to Lilly or to decide which
documents should be disclosed and which can be discounted.
[18]
This is
not to say that I will now order Sandoz to request these documents from
ScinoPharm or that I consider that the time is now ripe for Lilly to pursue
motions for production of foreign regulatory filings by third parties. As a
source of information from which Lilly could establish infringement, foreign
regulatory filings are sufficiently relevant, on their face, that they should
be disclosed in Sandoz’ affidavit of documents and produced to Lilly if they
were in Sandoz’ power, possession or control. However, from the evidence
before me, it appears that these documents are not in Sandoz’ possession but in
that of ScinoPharm and the relevant regulatory authorities. As such, they
would fall to be listed in Schedule IV of Sandoz’ affidavit of documents
(documents which may be relevant but are in the possession of a person not a
party to the action). The Court’s discretion to order production from a third
party would seem to me to go beyond mere relevance for the purposes of an
affidavit of documents; it may require weighing the necessity and probative
value of the documents sought in light of the documents already disclosed. At
this point, it would be premature to exercise my discretion to order Sandoz to
request those documents from ScinoPharm.
[19]
The main
reason for my reluctance is the unsatisfactory state of the pleadings in this
case, a state which I trust the parties will remedy sooner rather later, and in
any event before further motions for production by third parties are made.
[20]
As it
stands, the Plaintiffs’ statement of claim clearly sets out a claim based on
the “new product” presumption found in Section 55.1 of the Patent Act,
as well as a claim that the ScinoPharm process must infringe the patents since
there exists no other commercially viable processes for these aspects of the
preparation. Other than those allegations and some very general allegations,
there are no detailed and direct allegations as to the processes actually used
by ScinoPharm. This is particularly troubling given the fact that the action
asserts infringement of several claims of the ’881 Patent describing different
and sometimes contradictory processes. Notwithstanding this lack of
particulars, it appears that Sandoz is content to take Lilly’s statement of
claim as including direct allegations that the ScinoPharm process falls within
the claims of the patents.
[21]
Sandoz for
its part opposes Lilly’s allegation with no more than broad denials. Sandoz
denies Lilly’s allegation that there are no other commercially viable processes
but makes no positive allegations as to what other commercially viable
processes might exist. It denies that the process used by ScinoPharm would
infringe the patents but makes no positive allegation as to what the ScinoPharm
process might consist of.
[22]
The clear
impression with which one is left from those pleadings is that at the time they
were drafted, neither the Plaintiffs nor the Defendant had any idea whatsoever
as to what the ScinoPharm process might consist of. Yet both were quite
content to join issue on the question of whether that process infringed or not,
presumably on the understanding that both would eventually learn from
ScinoPharm what the process actually is and would form their respective
positions accordingly.
[23]
It seems
to me that such an approach to pleadings assumes, and at the outset sanctions,
discovery by way of a wide-ranging fishing expedition, a process which is
neither contemplated by the Federal Courts Rules nor condoned in the
decisions of this Court. If, at the time it filed the action, Lilly had in
reality formed the belief that Sandoz’ product was made through an infringing
process on the sole basis that its patents covered the only known commercially
viable processes, then its allegations should have stopped at that. It would
have been up to Sandoz to either join issue with Lilly’s assertion that no
other viable process existed generally, or to make its own enquiries as to the
process actually used by ScinoPharm, and if it considered that particular
process to be non-infringing, to make very specific allegations as to what that
process was and why it did not infringe. Such allegations by Sandoz as to the
specific process used could, in those aspects covered by the claims of the
patents, have stood as admissions binding upon Sandoz, and so restricted the
scope of Lilly’s discovery. Lilly would have been entitled to discovery on only
to those aspects of the process which Sandoz claimed fell outside the specific
claims of the patents. It would have also put Lilly to the task of
articulating a position, in fact or on its interpretation of the patents, as to
why the process alleged to be carried out by ScinoPharm was either not
correctly described or infringing.
[24]
This
exercise was not made, and Sandoz has so far contented itself to act as a
conduit for documents identified and selected by ScinoPharm, without itself
taking any position on these issues. It does not lie in Sandoz’ mouth to say
that Lilly should be content with this production and accept it as fully
representative of the process that will be proven at trial. Nor is it
acceptable for Lilly to ask the Court to assist it in conducting its fishing
expedition into the files of non-parties such as ScinoPharm or the regulatory
authorities without attempting to narrow the issues or the scope of relevant
documents.
[25]
It became
apparent at the hearing that counsel for Sandoz and for Lilly have already
gained, from the productions made so far, a much better understanding of what
the ScinoPharm process might be, of which claims might in fact be at issue, and
of which aspects of specific claims will be particularly controversial. Through
Sandoz’ voluntary undertaking to request further documents and review their
production to remove some of the redactions made, this mutual understanding is
expected to be further refined. As of the time of the hearing, whatever
understanding existed between the parties remained quite opaque to the Court.
I am afraid that until such time as the parties are prepared to translate that
understanding into some defined pleadings or particulars that would both
clarify and narrow the issues for discovery, Lilly will find it difficult to
convince the Court to exercise its discretion to compel discovery from third
parties and Sandoz will find it difficult to persuade the Court that Lilly’s
enquiries as to relevant aspects of the ScinoPharm process have been sufficiently
explored.
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