Date: 20110128
Docket: T-368-08
Citation: 2011 FC 109
Ottawa, Ontario, January 28,
2011
PRESENT: The Honourable Mr. Justice Mandamin
BETWEEN:
|
|
NOVOPHARM LIMITED
|
|
|
|
Plaintiff
|
|
and
|
|
|
NYCOMED CANADA INC., NYCOMED
GMBH AND NYCOMED INTERNATIONAL MANAGEMENT GMBH
|
|
|
|
Defendants
|
|
|
|
|
REASONS FOR JUDGMENT AND
JUDGMENT
[1]
The Plaintiff Novopharm Limited (Novopharm)
appeals the Protective Order issued by Madam Prothonotary Milczynski on March
24, 2010.
[2]
Prothonotary Milczynski has been case managing
an action commenced on March 7, 2008 by Novopharm against the Defendants, Nycomed
Canada Inc., Nycomed GMBH and Nycomed International Management GMBH (Nycomed), pursuant
to section 8 of the Patented Medicines (Notice of Compliance) Regulations, SOR/93-133
(NOC Regulations).
[3]
Novopharm’s section 8 claim arises from two
proceedings under the NOC Regulations related to pantoprazole sodium. The Court
found against Nycomed in both, dismissing the first, T-1799-06, because the
patent at issue was not eligible for inclusion on the register and dismissing
the second, T-1836-06, after the same patent at issue in T-836-06 was held to
be not infringed and invalid in a different proceeding, T-1786-06 involving
Apotex Inc. In this action, Novopharm is now required to substantiate its claim
for damages arising from the delay because of the NOC proceedings.
[4]
Novopharm brought a motion for a protective
order to protect and maintain confidentiality of certain financial material and
information to be disclosed between the parties. As part of the proposed
protective order, Novopharm sought to include a “Restricted Access” category of
documents which would exclude senior executives and employees from Nycomed
Canada Inc. from accessing these financial documents. The documents are
relevant to the quantum of damages which is the central issue in this
litigation.
[5]
Nycomed opposed including a restrictive access
provision in the protection order, contending that it would prevent the
executives and employees at Nycomed Canada Inc. from accessing the proposed
restrictive access documents and hinder their ability to instruct outside
counsel in the litigation.
[6]
The Prothonotary was not satisfied that the
restrictions sought by Novopharm were necessary or appropriate and found that
such restrictions would diminish the ability of Nycomed to instruct counsel and
conduct a defence in the litigation.
Decision Under Appeal
[7]
The Prothonotary declined to include the
restrictive access category as sought by Novopharm. In the Protective Order
recitals, the Prothonotary states:
Upon Motion by the Plaintiff for an order protecting and maintaining
the confidentiality of certain material and information to be disclosed between
parties in this proceeding;
And Upon reviewing the motion records filed on behalf of the parties
and hearing submission of counsel;
And Upon not being satisfied that the breadth of the restrictions
sought by Novopharm Limited are necessary or appropriate but rather, would diminish
the ability of the Defendants to instruct counsel and conduct the defence of
this action;
[8]
The Prothonotary, after delineating the
procedure by which the parties would designate information confidential and
making provision for confidentiality of the information, set out the permitted
disclosure of confidential information as follows:
Permitted Disclosure of Confidential Information
13. Subject to paragraph 14 and 15 below, in the absence of
written permission from the Party designating the information as confidential,
designated Confidential Information shall not be disclosed to anyone except as
listed below; however, this list does not limit the ability of a party or
employees of a party to view that party’s own confidential information or deal
with it as they see fit:
(a)
The Court, Court personnel, stenographic and
video reporters engaged in the within proceeding;
(b)
The following 7 individuals from Nycomed:
(i)
John Suk, President and CEO of Nycomed Canada
Inc.
(ii)
Frank Murphy, VP Finance of Nycomed Canada Inc.
(iii)
Dr. Ulrich Wolf, Director Patent Litigation
(iv)
Dr. Bradley Pamenter, VP Medical and Scientific
Affairs of Nycomed Canada Inc.
(v)
Sheila Critchlow, Director of Regulatory Affairs
of Nycomed Canada Inc.
(vi)
John Maletic, Senior Market Researcher of
Nycomed Canada Inc.
(vii)
A Financial Analyst of Nycomed Canada Inc.; the
identity of the individual will be communicated by Nycomed to Novopharm at a
later date.
(c)
No more than 7 employees, officers and directors
from Novopharm, who require access to designated Confidential Information for
the purpose of assisting or instructing outside counsel in this action;
(d)
Counsel for Novopharm and Counsel for Nycomed
and their respective staff whose function in connection with this action
requires access to Confidential Information;
(e)
Litigation service contractors (such as copy
services) engaged by Counsel for Novopharm or Counsel for Nycomed, whose
function in connection with this action requires access to Confidential
Information; and
(f)
Independent experts for a Party, retained to
assist a Party in this proceeding. For greater certainty, the independent
experts shall not be employees, officers or directors of a Party or any
companies related to or affiliated with a Party; and
(g)
Such other persons as the Parties may agree in
writing or the Court may order.
14. Prior to the disclosure of designated Confidential Information to
the persons listed in paragraph 13(b), (c), (e), (f) and (g), counsel of record
responsible for making such disclosure shall furnish the intended recipient
with a copy of this Order and shall obtain from the intended recipient an
acknowledgement in writing, in the form of the undertaking set out in paragraph
15 below, that the intended recipient has read this Order, understands it,
agrees to be bound by it and expressly consents to the jurisdiction of the
Court in connection with any proceeding or hearing relating to the designated
Confidential Information and the terms of this Order. For persons listed in
paragraph 13(b), (c), (e), (f) and (g), outside counsel shall retain a copy of
the signed undertaking and shall provide a copy of same to other outside
counsel upon request by any Party.
15. The undertaking as required by paragraph 14 above shall be in the
following form:
UNDERTAKING
I, hereby acknowledge that I am about
to receive from
Confidential
Information as defined in the Protective Order dated March 24, 2010 in Court
File No. T-368-08.
I certify my understanding that this Confidential Information is
being provided to me pursuant to the terms and restrictions of the Protective
Order referred to above in this proceeding, and that I have been given a copy
of and have read an understand my obligations under that Order.
I hereby agree to be bound by the terms of the Protective Order. I
hereby agree to utilize the Confidential Information solely for the purposes of
this litigation. I clearly understand that the Confidential Information and my
copies or notes relating thereto shall not be disclosed to anyone not similarly
bound by the Protective Order.
On request from counsel for the party who provided me with the
Confidential Information, I will return to said counsel, or in the alternative,
on request of said counsel, I will destroy all materials containing the
Confidential Information, copies thereof and notes that I have prepared relating
thereto.
I hereby submit to the jurisdiction of the Federal Court for the
purpose of enforcement of this Protective Order.
…
17. Subject to the terms of this Order or any further Order of this
Court, designated Confidential Information shall be used solely for the purpose
of the within proceeding and may not be used for any purpose whatsoever other
than for the purpose of the within proceeding, except as required by law. For
greater certainty, nothing in this Order varies, modifies, or relieves any Party
from its implied undertaking in this action.
18. The termination of the within proceeding shall not relieve any
person to whom designated Confidential Information was disclosed pursuant to
this Order from the obligation of maintaining the confidentiality of such
information in accordance with the provisions of this Order.
Issues
[9]
The issues as raised by Novopharm are:
(a)
Did Prothonotary Milczynski exercise her
discretion based upon a wrong principle by issuing an Order
(i) without reasons,
(ii) without addressing the facts inconsistent with her
conclusions,
a.
without explaining why she declined to apply
binding precedent governing the situation before her, and/or
b.
supplementing the Defendants’ position on the
motion before her with grounds not advanced in written submissions or orally
before her (e.g., application of the implied undertaking rule to competitors in
the marketplace)?
(b)
If she did so err, such that de novo
review is required,
(i) Should a “Restricted Access” category of
documents be included in the Protective Order governing the parties?
(ii) If so, is the form proposed in the attached
Amended Protective Order acceptable?
[10]
In my view the issues are whether, in respect of
the Protective Order:
1.
Are the reasons given adequate;
2.
Is there reliance on a wrong principle:
3.
Was there a misapprehension of the facts?
Standard of Review
[11]
Discretionary orders of prothonotaries ought not
to be disturbed on appeal unless they are clearly wrong in the sense that the
exercise of discretion was based on a wrong principle or misapprehension of the
facts or that they raise questions vital to the final issue of the case: Canada
v Aqua-Gem Investments Ltd., [1993] 2 FC 425, 149 NR 273 (FCA).
[12]
In Merck & Co. v Apotex Inc., 2003
FCA 488 (Merck), the Court further decided that a judge should first determine
whether the question is vital to the final issue. Secondly, whether “the orders
are clearly wrong, in the sense that the exercise of discretion by the
prothonotary was based upon a wrong principle or upon a misapprehension of the
facts”: Merck at para. 19.
[13]
In this proceeding, the Protective Order is not
determinative of the final issue. Accordingly, the standard of review is
whether the Protective Order is clearly wrong, in the sense that the exercise
of discretion by the prothonotary was based upon a wrong principle or upon a
misapprehension of the facts.
Background
[14]
Novopharm commenced its action against Nycomed
on March 7, 2008. The Parties were, pursuant to a March 25, 2009 Court Order,
to exchange affidavits of documents by July 31, 2009. Novopharm provided an
unsworn, incomplete affidavit of documents on July 30, 2009 containing
documents used by Novopharm in prior NOC applications which had been designated
as confidential by previous protective orders.
[15]
There were several months of negotiations
between the parties on the wording of a protective order. The parties reached
an impasse which necessitated a ruling by the Prothonotary. Before the
Prothonotary was the following material:
a)
correspondence from each party;
b)
motion records as well as supplemental records
including affidavits from: Novopharms’ in-house counsel (Ms. Mehes), Nycomed Canada’s Vice President, Financial and
Information Management (Mr. Murphy) and a law clerk with Nycomed’s outside
counsel (Ms. Rinne);
c)
three case managements conferences held with the
Prothonotary and
d)
proceedings of an oral hearing held December 22,
2009,
[16]
Ms. Mehes, in-house counsel, generally set out
Novopharm’s proposed list of documents for restricted access in her affidavit
at paragraphs 14 and 28:
14. Novopharm has identified (and continues to identify)
specific highly sensitive financial information and documents that it may be
required to produce in this proceeding. Such information and documents are so
sensitive that disclosure should be limited to only outside counsel, outside
experts and a limited number of persons internally who do not, as part of their
employment, make strategic business or marketing decisions with respect to
pantoprazole in Canada. The disclosure of this small but sensitive set of
information to competitors such as Nycomed (or through them to Ranbaxy) would
pose a real and substantial risk to Novopharm and would be immensely harmful to
the important commercial and financial interests of Novopharm and to its competitive
position. Once individuals at a competitor such as Nycomed have reviewed such
information, it will not be possible for such individuals to make decisions as
part of their employment responsibilities without any influence from the
knowledge of such information.
28. Specifically, it appears that the main point
of disagreement revolves around whether any or all of the information to be
disclosed can be dealt with on a “restricted access” basis. Novopharm only
requests this designation for certain individuals (not “counsel’s-eyes only”)
and with respect to the small but sensitive set of financial documents set out
in the draft protective order accompanying this motion, specifically:
i.
non-public commercial strategic planning
materials for Novopharm’s or Nycomed’s pantoprazole products;
ii.
non-public information regarding the costs and
expenses of developing, manufacturing and selling Novopharm’s or Nycomed’s
pantoprazole products;
iii.
non-public information regarding the sales of
Novopharm’s or Nycomed’s pantoprazole products;
iv.
financial statements of the parties that contain
information not otherwise available to the public; and
v.
non-public agreements between Novopharm or
Nycomed and their customers (direct and indirect) relating to the sale of
Novopharm’s or Nycomed’s pantoprazole products.
[17]
Novopharm submitted, in its proposed draft
order, that the restricted access information be only provided to the
following:
8 (b) In the absence of written permission from a
Party, any Confidential Information – Restricted Access produced by that Party,
or otherwise made available, shall not be disclosed to anyone, except the Court
and its staff and stenographic and video reporters engaged in the within
proceeding, and the following individuals:
(i)
Up to two in-house counsel for each party who
need to know the Confidential Information – Restricted Access for the purposes
of assisting or instructing outside counsel;
(ii)
Counsel for Novopharm and Counsel for Nycomed
and their respective staff whose function in connection with this action
requires access to Confidential Information – Restricted Access; and
(iii)
Litigation service contractors (such as copy
services) engaged by Counsel Novopharm or Counsel for Nycomed, whose function
in connection with this action requires access to Confidential Information –
Restricted Access; and
(iv)
Up to ten (10) independent experts for a Party,
retained to assist a Party in this proceeding with respect to issues that
require access to Confidential Information – Restricted Access; for greater
certainty, the independent experts shall not be employees, officers or
directors of a Party or any companies related to or affiliated with a Party.
(v)
Three designees from the business, financial
and/or patent group(s) or department(s) of each party who are not involved in sales,
marketing, strategic commercial planning or the authorized generic agreement
with Ranbaxy Pharmaceuticals Canada Inc. regarding Ran-Pantoprazole Tablets,
who shall not further disclose to anyone such information that he or she
receives that is designated as Confidential Information – Restricted Access.
[17]
Novopharm’s concerns relate to Nycomed Canada
Inc.’s contractual relationship with a generic company, Ranbaxy Pharmaceuticals
Canada Inc. (Ranbaxy) which sells pantoprazole sodium manufactured by Nycomed.
The thrust of Novopharm’s submissions before the Prothonotary was that the
directing mind of Nycomed Canada Inc., its senior executives and employees, may
use the highly confidential Novopharm financial information to the detriment of
Novopharm’s commercial interests and viability. Hence there was a need for a
restrictive access provision in the protection order.
[18]
Nycomed’s submission to the Prothonotary was the
restrictive access provision would impair the ability of Nycomed Canada Inc. to
instruct counsel in the litigation. Nycomed submitted that a protective order
as developed in various Federal Court proceedings would be sufficient.
Analysis
[19]
Generally, a confidentiality order is a
discretionary order and, not being vital to the final issues in the case,
should not be interfered with unless it was based on wrong facts or error of
principle: Bristol-Myers Squibb Co. v Apotex Inc., 2003 FCA 59.
Adequacy of Reasons
[20]
Novopharm states that where the Prothonotary
does not provide written reasons, the appellate Court is to examine the
surrounding circumstances including the nature of the order made, the evidence
before the Prothonotary and whether the exercise of discretion involves
consideration of legal principles. If the manner in which the Prothonotary exercised
her principles is not apparent, the Court must proceed de novo in the
appeal: Anchor Brewing Co. v Sleeman Brewing & Malting Co., 2001 FCT
1066 at para. 32.
[21]
Novopharm submits that the one sentence recital
in the Prothonotary’s Order does not reveal how facts were found contrary to
the evidence or how binding jurisprudence was distinguished.
[22]
In considering the reasons given in the
Protective Order, I am mindful to Justice Harrington’s statement in Savanna
Energy Services Corp. v Technicoil Corp., 2005 FC 842 at para. 19:
The Prothonotaries deal with an extraordinary volume of procedural
issues. It would be intolerable, and the wheels of justice would grind most
slowly indeed, if each discretionary order had to be accompanied by a full set
of motivated reasons in order to discourage the unsuccessful party from
appealing and inviting the Court to exercise its discretion anew.
[23]
The Prothonotary had ample material before her
upon which to come to a decision. After all, not only did she have the written
record and an oral hearing but also the outcome of three case management
conferences. Her recital confirms she was mindful both of the evidence and of
the submissions of the parties.
[24]
It is clear from the Prothonotary’s pointed
recital that she considered and weighed both parties’ submissions: namely
Novopharm’s request to shield its documents from Nycomed Canada Inc. and the
disadvantages to Nycomed Canada Inc. in not being able to fully instruct
counsel.
[25]
I find no paucity of reasons in the Prothonotary’s
Order such as to necessitate a de novo review.
Wrong Principle
[26]
Novopharm insists the Prothonotary erred in considering
the implied undertaking rule would be sufficient assurance of the protection of
Novopharm’s sensitive confidential information.
[27]
The express provisions in the Protective Order
dispose this claim. The Protective Order provides for a signed undertaking by
persons receiving the information to use the information solely for the
purpose of the litigation. The Order also expressly requires that the
confidential information “shall be used solely for the purpose of the within
proceeding and may not be used for any purpose whatsoever other than for the
purpose of the within proceeding.” (emphasis added) In result, the
Prothonotary made explicit provision for protection of confidential
information.
[28]
Further, by specifically naming individual
Nycomed Canada Inc. executives and employees, the Prothonotary makes it clear
the Protective Order applies to them personally and places each under an obligation
to abide by the requirement to use the information obtained solely within the
scope of the litigation.
[29]
I find the Prothonotary did not err by any
reliance on any principle based on the implied undertaking rule.
[30]
Novopharm submitted that “Counsel’s Eyes Only”
was appropriate where evidence demonstrates that a party’s commercial interests
could be harmed without such an order and that its proposed restrictive access provision
is even less restrictive than a “Counsel’s Eyes Only” requirement.
[31]
Nevertheless, Novopharm’s restrictive access
proposal would preclude Nycomed Canada Inc.’s executives who instruct counsel
from accessing financial documents that are central to the question of damages
in this proceeding. Accordingly, the onus remains upon Novopharm to provide the
evidence that would support the need for such a restriction: Deprenyl
Research Ltd. v Canguard Health Technologies Inc., (1992) 41 C.P.R. (3d)
228 at 229-220.
[32]
Here, Novopharm had not produced a sworn
affidavit of documents and described, in its motion, the documents in question
in roundabout terms. Novopharm’s affiant, Ms. Mehes, insisted the set of
restrictive access documents was small but then elaborated by deposing that:
28. Specifically … Novopharm only requests this
designation for certain individuals (not “counsel’s-eyes only”) and with
respect to the small but sensitive set of financial documents set out in
the draft protective order accompanying this motion, specifically:
vi.
non-public commercial strategic planning
materials for Novopharm’s or Nycomed’s pantoprazole products;
vii.
non-public information regarding the costs
and expenses of developing, manufacturing and selling Novopharm’s or
Nycomed’s pantoprazole products;
viii.
non-public information regarding the sales
of Novopharm’s or Nycomed’s pantoprazole products;
ix.
financial statements of the parties that
contain information not otherwise available to the public; and
x.
non-public agreements between Novopharm
or Nycomed and their customers (direct and indirect) relating to the sale of
Novopharm’s or Nycomed’s pantoprazole products.
(emphasis added)
[33]
In my view, such a listing does not suggest a
small set of documents nor does it provide a meaningful description of the type
or class of documents for which Novopharm seeks to restrict access. The
categories taken collectively are readily capable of extension to encompass a
wide range of documents thereby confounding any precision in description.
[34]
In Novopharm Ltd. v Glaxo Group Ltd., (1998)
227 N.R. 80, 81 C.P.R. (3d) 185 at para. 6, the Federal Court of
Appeal denied a request for a “counsel’s eyes only” order when the evidence was
“lacking in any description of the type or class of document that the
respondents assert would cause prejudice if it reached the eyes of the
appellant or of the public including any competitor.”
[35]
Novopharm’s rather extensive and varied description
of its documents did not meet the precision that the Federal Court of Appeal saw
necessary to require a restrictive access order. I do not see any basis for
finding the Prothonotary was wrong in not accepting the interpretation Novopharm
sought to place on its evidence.
[36]
A Court will not lightly
grant such an order that interferes with the solicitor-client relationship:
Glaxo Group Ltd. v Novopharm Ltd., (1998) 81 C.P.R. (3d) 259 (FCA) at para.
2.
[37]
The restrictive access provision would adversely
affect the right of Nycomed Canada Inc.’s executives and employees to see all
the documents that contain relevant evidence to the issue in dispute. In Murphy
Oil Co. Ltd. v Predator Corp. Ltd., 2002 ABQB 992, Justice McMahon identified
the difficulty with restrictive confidentiality orders by drawing from Warner-Lambert
Co. v Glaxo Laboratories Limited, [1975] RPC 354 a very apt quote to the
effect that it is the corporate decision-makers who are authorized to make
decisions on the company’s behalf, such as whether to continue or abandon an
action, not the legal or scientific advisors.
[38]
In the alternative, Novopharm proposed that the
list in the Protective Order be reduced to Dr. Wolf and Nycomed in-house
counsel, both of whom are in Germany.
[39]
Given that Novopharm is proceeding against
Nycomed Canada Inc. here in Canada, I consider this alternative without merit. It is nonsensical to
suggest a Canadian company involved in litigation in Canada must defend itself by relying on out-of-country personnel or
out-of-country counsel to instruct counsel in litigation in Canada.
[40]
More importantly, Nycomed’s evidence is that
Nycomed Canada Inc. does not have in-house counsel; it is a small company that
has existed because of a single drug, pantoprazole, with the result that
everyone in management was involved in some degree in the decision to authorize
the generic entry of Ran-Pantoprazole tablets (by Ranbaxy) and its executive
and senior employees are all involved with strategic planning for the company.
Mr. Murphy, Nycomed’s affiant, further states that Mr. John Suk, the CEO of
Nycomed Canada Inc. and he are the individuals instructing outside counsel in
this litigation. One other individual in Germany, Ulrich Wolf, has been involved as he coordinates pantoprazole
litigation throughout the world but he is not an in-house counsel.
[41]
The Prothonotary concluded the restrictive
access provision would limit the ability of Nycomed to instruct counsel. In
doing so, the Prothonotary did not disregard Novopharm’s concerns and made
adequate provision in making the Protective Order as I have previously noted in
reference to the effect of specifically naming Nycomed’s executives and officers.
[42]
I am not persuaded that there exist unusual
circumstances that justify imposing a restrictive access provision beyond the provisions
contained in the Protective Order. I find no basis for intervening with the Prothonotary’s
solution to the issues raised by the parties.
Misapprehension of Facts
[43]
Finally, the Prothonotary is entitled to assess
and weigh the evidence before her. Novopharm vigorously insists its
interpretation of the evidence ought to prevail but its submissions to this
Court are no more than an invitation to reweigh the evidence.
[44]
Novopharm’s evidence of possible harm amount to
speculative assertions not supported to any significant degree by undisputed or
confirmed facts. For instance, Novopharm’s affiant, Ms. Mehes, admits to not
having any basis, other than a vague assertion of generalized knowledge of the
industry, for asserting that Nycomed may have breached court orders or that
Nycomed provides input on prices Ranbaxy sells its Ran-Pantoprazole products.
[45]
I do not accept Novopharm’s submission that the
two unsuccessful NOC proceedings by Nycomed is evidence that supports a finding
of an intention by Nycomed’s management to misuse confidential information
obtained under a protective order. Being an unsuccessful party in a proceeding may
have its consequences but that does not extend to drawing inferences of the
unsuccessful party’s intent with respect to future court proceedings.
[46]
I find that the Prothonotary did not
misapprehend the facts. She had reason to find Novopharm’s evidence insufficient
to support the need for a restrictive access provision and had evidence upon
which to conclude that such a provision would unduly restrict Nycomed Canada
Inc.’s ability to instruct counsel.
Conclusion
[47]
The appeal is dismissed.
[48]
Costs are awarded to Nycomed.
JUDGMENT
THIS COURT
ORDERS AND ADJUDGES that:
1. The appeal is dismissed.
2. Costs are awarded to the Defendants.
“Leonard
S. Mandamin”
Email this Content