Date: 19991104
Docket: T-2184-92
BETWEEN:
THE WELLCOME FOUNDATION LIMITED
and GLAXO WELLCOME INC.
Plaintiffs
- and -
NOVOPHARM LIMITED
Defendant
REASONS FOR ORDER
LEMIEUX J.:
[1] On April 19, 1999, Associate Senior Prothonotary Peter Giles (the Associate Senior Prothonotary) ordered the plaintiffs, The Wellcome Foundation Limited and Glaxo Wellcome Inc. (Wellcome) to answer four questions refused at the examination-for-discovery of Michael P. Jackson held on June 25, 1996. The Associate Senior Prothonotary did not provide reasons. Wellcome appeals that order pursuant to Rule 51 of the Federal Court Rules, 1998 (the Rules).
BACKGROUND
(i) The statement of claim
[2] Wellcome, in September 1992, initiated an infringement action against Novopharm Limited as defendant (Novopharm) claiming infringement of claims 39 and 97 in Canadian Letters Patent 907,014 (the patent) issued to Wellcome on August 8, 1972.
[3] The invention claimed in the patent relates to a compound known as TAA and to methods for its preparation; the compound TAA is said by Wellcome to be a valuable intermediate in an improved process for the preparation of trimethoprim (TMP). Claim 39 of the patent is a claim for a method of preparing TAA and claim 97 is a claim for a method of making TMP by reacting TAA with guarudine. Wellcome states that TMP is a valuable drug in the treatment of bacterial infections. It is marketed by Wellcome in Canada in association with the trade-mark PROLOPRIM. In combination with the drug sulfamethoxazole (SMX), TMP is an orally active anti-bacterial drug in the treatment of a wide range of bacterial infections. This combination is marketed by Wellcome in Canada in association with the trade-mark SEPTRA. Wellcome says that at all material times, TAA was a new substance and the invention of the patent relates to the production of such new substance.
[4] Wellcome claims Novopharm manufactured, sold and distributed in Canada tablets under the names NOVO-TRIMEL and NOVO-TRIMEL DS (the defendant's tablets) which comprised a combination of TMP and SMX. Wellcome says the TMP in the defendant's tablets has been prepared by a method using TAA as an intermediate. In particular, Wellcome says batches 60580 and 0704670 of the defendant's tablets have been prepared using TAA as an intermediate by a method in claim 39 and the TMP in those two batches was prepared by the method claimed in claim 97 of the patent.
[5] Wellcome also alleges in TMP raw material used in pharmaceutical preparations, TAA can be an impurity; a test procedure has been devised to determine whether the TAA impurity is present in excess of an acceptable level. To carry out the test, it is necessary, Wellcome alleges, to use a solution containing a sample of standard TAA for purposes of comparison. Wellcome alleges since the middle of 1984, Novopharm has in Canada tested all of the TMP raw material acquired by it for the purpose of manufacturing the defendant's tablets by using samples of standard TAA obtained and used by it without Wellcome's consent, authority or licence.
[6] Wellcome states it is presently unaware of all the infringing acts of Novopharm, but will rely upon, and claim relief in respect of, all such infringing acts. Wellcome claims a declaration that claims 39 and 97 of the patent were at all material times valid and have been infringed by Novopharm. Wellcome claims damages for patent infringement or an accounting of profits as it may upon inquiry elect.
(ii) The statement of defence
[7] Novopharm filed a fresh as amended statement of defence on April 17, 1997. Novopharm, in essence, denies the material allegations in Wellcome's statement of claim.
[8] In particular, Novopharm says TAA substantially free from contamination with a benzal isomer was a new substance, but denies TAA itself was a new substance. Novopharm admits it manufactured and sold NOVO-TRIMEL and NOVO-TRIMEL DS tablets but denies it needed the consent or licence of Wellcome to do so. Novopharm says its tablets do not include TMP which was produced by any process disclosed and claimed in the patent. Novopharm admits it has identified a lot of NOVO-TRIMEL tablets by the designation 13R605 and that it sold NOVO-TRIMEL tablets identified as lot 60580 but denies any product identified as batch 60580 or batch 0704670 of the defendant's tablets contained TMP prepared by a method using TAA as an intermediate. Novopharm adds it has no detailed knowledge of the process employed to produce the various lots of TMP imported by Novopharm and denies such processes employed TAA substantially free from contamination with the benzal isomer as an intermediate. It denies such TAA was produced by the method claimed in claims 39 and the TMP employed was prepared by the method claimed in claim 97. Furthermore, Novopharm denies Wellcome is entitled to the benefit of subsection 39(2) of the Patent Act.
[9] In terms of the testing issue, Novopharm says it obtained all TAA standards used by it from a person or persons authorized to sell the material to the defendant, namely, U.S.P. Convention Inc. and such material was manufactured by persons who were directly or indirectly, expressly or implicitly, authorized by Wellcome to manufacture the material for sale to others, namely, Wellcome's U.S. affiliate. Novopharm adds it was not advised of, and had no knowledge of, any restrictions placed on the use of the material. Novopharm pleads and relies upon section 39(1) of the Federal Court Act. Novopharm also relies upon the Limitations Act, R.S.O. 1990, L-15. Novopharm says there is no jurisdiction to award an accounting of profits. Novopharm says, furthermore, by reason of the compulsory licence granted to Novopharm under certain other Wellcome patents relating to TMP, and by reason of the delay of Wellcome's instituting this action, Wellcome is not entitled to an accounting.
(iii) The order for reference
[10] On September 30, 1993, in this action, on consent, pursuant to former Rule 480 of the Federal Court Rules, the Associate Senior Prothonotary made a Reference Order in the following terms which in essence follow the wording of that Rule:
| . . . that this matter proceed to trial without requiring the parties to adduce evidence as to: |
| (a) any question as to the extent of the infringement by the Defendant of the patent in issue herein; |
| (b) any question as to the damages flowing from any such infringement; or |
| (c) any question as to the profits arising from any such infringement. |
| AND IT IS ORDERED that any issues of fact relating to each such issue be, after trial, the subject of a reference under Rules 500 et seq., if it then appears that such issues require to be decided. |
(iv) The questions Wellcome refused to answer
[11] Prior to instituting its action, Wellcome in 1982 and 1984 purchased and tested in England samples from certain batches or lots of Novopharm's NOVO-TRIMEL tablets sold on the Canadian market. Such testing led Wellcome's Canadian patent agents to write to Novopharm in 1984 stating that an analysis of Novopharm tablets in batches Nos. 510,637 and 007,887 detected TAA. Moreover, prior to discovery, Wellcome produced documents which indicated Wellcome had acquired in Canada and conducted tests on samples of other batches of Novopharm's NOVO-TRIMEL tablets, namely, batches A-025, 1521770, 10571, R-60580 and 0704670.
[12] Novopharm's counsel asked Mr. Jackson on discovery the following questions which were refused:
| (i) Question 113 " produce the file kept by Wellcome relating to the NOVO-TRIMEL product; |
| (ii) Question 127 " produce the results of all testing done by Wellcome on the NOVO-TRIMEL product alleged to infringe; |
| (iii) Question 159 " produce the results of the testing done by Wellcome on batch 1521770; and |
| (iv) Question 222 " produce the results of the testing done by Wellcome on lot number 10571. |
[13] As noted, Wellcome, in its statement of claim, stated as follows:
| 13. The TMP in the Defendant's Tablets has been prepared by a method using TAA as an intermediate; and in particular in the following batches of the Defendant's Tablets the TMP has been prepared by using TAA as an intermediate, viz 60580 and 0704670. |
[14] A review of the transcript of Mr. Jackson's examination-for-discovery reveals counsel for Wellcome refused to answer and produce on the grounds of relevancy. The following exchange took place between counsel:
| MR. GOLDSMITH: We have given you the information with regard to the samples on which we rely in this action. |
| MR. DEETH: Mr. Goldsmith, I'm entitled to have everything that relates to the product that you accuse of infringing. |
| MR. GOLDSMITH: There is only one in the action at this point in time. |
| MR. DEETH: All right, let me get this clear, the only two batches that Novopharm has made in the last sixteen years that you are alleging infringing, the two batches referred to in the Statement of Claim? |
| MR. GOLDSMITH: No, that's not true, we're relying, for the purpose on this action, on these two batches. |
| MR. DEETH: Well, then what happens, Mr. Goldsmith, then, if you establish that one or both of these batch does infringe? Are you going to come back and ask for more? |
| MR. GOLDSMITH: If these are infringing, then you have to produce the rest, sure. |
| MR. DEETH: Well, then I'd like to have --- |
| MR. GOLDSMITH: We asked you to produce other samples, you refused to do so. |
| MR. DEETH: I would like to have the results of the testing shown on this sheet, please, and any other testing that you have done on the Novo-trimel product. |
THE ISSUE
[15] Wellcome's grounds for appeal are:
| (a) With regard to question 113, the Association Senior Prothonotary erred in law in ordering the production of documents not shown to be relevant to any issue in the action. |
| (b) With regard to questions 127, 159 and 222, the Associate Senior Prothonotary erred in law in ordering the production of test results of batches of tablets made by the defendant other than those specifically pleaded in the action notwithstanding the Reference Order dated September 30, 1993, made pursuant to Rule 480, that the matter proceed to trial without requiring the parties to adduce evidence as to any question as to the extent of the infringement by the defendant of the patent at issue. |
[16] Shereen Hamdy, a lawyer with the solicitors for Novopharm, deposed an affidavit on the appeal. She indicates that in a telephone conference call with Hugessen J. on March 24, 1999, counsel for Wellcome took the position that only the two batches specifically referred to in the statement of claim, i.e. numbers 60580 and 0704670, were alleged to infringe at this time, but if the plaintiffs established at trial that if either of these batches infringed, Wellcome would be entitled to a Reference relating to all batches of Novopharm's NOVO-TRIMEL tablets made from 1986 on, (presumably including batches neither alleged nor proven to infringe).
[17] By way of further background, I note that issues related to TAA and TMP in the patent as well as another Wellcome patent (Canadian Patent Number 741,825), with MTDP as an intermediate for making TMP were the subject of an infringement action and by way of counterclaim a patent invalidity action, in this Court, between Wellcome as plaintiff and Apotex Inc. as defendant. As in this case, the Wellcome/Apotex case was the subject of a former Rule 480 Reference Order before trial. The trial judgment in Wellcome/Apotex is reported at (1991), 39 C.P.R. (3d) 289 (F.C.T.D.), is further reported at (1992), 40 C.P.R. (3d) 361 (F.C.T.D.) on the issues of the content of the formal judgment and at (1997), 82 C.P.R. (3d) 466 (F.C.T.D.) on issues related to the extent of infringement and accounting for profits arising out of the reference.
THE TEST FOR REVIEW
[18] Clearly, the Senior Associate Prothonotary's order is discretionary and did not raise a question vital to the final issue of the case. Accordingly, on review by a judge of this Court, the test set out in Canada v. Aqua-Gem Investments Ltd., [1993] 2 F.C. 425 is that such an order ought not to be disturbed on appeal unless the order was clearly wrong in the sense the exercise of discretion was based upon a wrong principle or upon a misapprehension of the facts. Since the Senior Prothonotary's order did not provide written reasons, I am compelled to pursue the analysis somewhat more fully than otherwise would be the case.
DISCUSSION
[19] Wellcome's argument on appeal from the Associate Senior Prothonotary's order is of remarkable simplicity. Wellcome says the only essential issue in the action is infringement (validity is not the question); the only allegation of infringement against Novopharm relates to two specific batches of Novopharm's tablets "although it is clear . . . that the Plaintiffs [Wellcome] intend to rely on all the Defendant's [Novopharm] infringing acts"; an Order for Reference on consent was made with the result that the action proceed at trial without requiring the parties to adduce evidence as to the extent of the infringement and indeed former Rule 466 precludes discovery and inspection to such issue of fact. As far as the Reference is concerned, Wellcome argues whether any other Novopharm lots infringement is purely a question of fact as well as whether the presence of TAA has been detected in such other lots as the result of tests carried out. In this appeal, Wellcome admits it has a file on the NOVO-TRIMEL product but adds there is no indication to what issue in the action the contents of the file are relevant. In terms of testing of NOVO-TRIMEL batches, Wellcome says that testing can have no possible relevance to the issue of whether the two batches pleaded in Wellcome's statement of claim infringe or not.
[20] The examination-for-discovery of Michael Jackson was conducted under the former Rules of this Court. I note two of those Rules. The scope of discovery was set out in Rule 465(15) which read as follows:
| 465. (15) Upon examination for discovery otherwise than under paragraph (5), the individual being questions shall answer any question as to any fact within the knowledge or means of knowledge of the party being examined that may prove or tend to prove or disprove or tend to disprove any unadmitted allegation of fact in any pleading filed by the party being examined for discovery or the examining party. |
[21] In terms of References under the former Rules, Rule 466 read:
| 466. Where, prior to the time when an examination for discovery is being conducted or discovery or inspection of documents is being obtained or given under these rules, an order has been made under 480 that an issue of fact be, after trial, the subject of a reference, the discovery or inspection shall not extend to such issue of fact. |
[22] Rule 240 of the current Rules defines the scope of an examination for discovery. This rule reads:
| 240. A person being examined for discovery shall answer, to the best of the person's knowledge, information and belief, any question that
| (a) is relevant to any unadmitted allegation of fact in a pleading filed by the party being examined or by the examining party; or |
| (b) concerns the name or address of any person, other than an expert witness, who might reasonably be expected to have knowledge relating to a matter in question in the action. |
|
240. La personne soumise à un interrogatoire préalable répond, au mieux de sa connaissance et de sa croyance, à toute question qui :
| a) soit se rapporte à un fait allégué et non admis dans un acte de procédure déposé par la partie soumise à l'interrogatoire préalable ou par la partie qui interroge; |
| b) soit concerne le nom ou l'adresse d'une personne, autre qu'un témoin expert, dont il est raisonnable de croire qu'elle a une connaissance d'une question en litige dans l'action. |
|
[23] As I see it, Rule 240 is a codification of former discovery Rule 465 and of the case law on relevancy on discovery. Everest and Jennings Canadian Ltd. v. Invacare Corporation (1984), 79 C.P.R. (2d) 138 (F.C.A.), a case involving patent infringement, concerned the refusal by a Motions Judge to order the production of the balance of a file to which an infringement letter made reference. Urie J.A., on behalf of the Federal Court of Appeal said this at page 139:
| The correct test of relevancy for purposes of discovery was, in our opinion, propounded by McEachern C.J. in the case of Boxer et al. v. Reesor et al. (1983), 43 B.C.L.R. 352 at p. 359, 35 C.P.C. 68, when he said: |
| It seems to me that the clear right of the plaintiffs to have access to the documents which may fairly lead them to a train of inquiry which may directly or indirectly advance their case or damage the defendant's case particularly on a crucial question.... |
| When produced the documents in the file may assist the appellant in its defence. On the other hand, they may not and may, as the respondent says, be totally irrelevant. In either event, the matter in issue may be more readily resolved at trial although their ultimate relevance and the weight to be attached to them will be matters for the trial judge. |
[24] The Federal Court of Appeal in Everest & Jennings, supra, ordered the production of the entire file on the grounds that the documents in the file were relevant.
[25] As I see it, the fundamental issue to be decided here is whether the Associate Senior Prothonotary was clearly wrong in law when he ordered Wellcome's witness on discovery to answer the refused questions and to produce the underlying documents. In my opinion, but for the Reference Order, the questions asked by counsel for Novopharm are clearly relevant to the issues raised in the statement of claim and the statement of defence, namely, whether Novopharm's tablets infringe claim 39 of Wellcome's patent which is a method of preparing TAA and claim 97 of that patent which is a method of making TMP by reacting TAA with guarudine. While Novopharm admits TAA substantially free from contamination with a benzal isomer was a new substance, Novopharm denies TAA was a new substance. Wellcome asserts Novopharm manufactured TMP by a method using TAA as an intermediate, a method in claim 39; Novopharm denies it. Wellcome asserts that Novopharm's TMP was prepared by a method in claim 97; Novopharm denies it.
[26] Wellcome has a file on Novopharm's NOVO-TRIMEL products which Wellcome clearly established and maintained for the purposes of building the present infringement action. Wellcome tested certain batches of NOVO-TRIMEL products which it does not rely on for the purposes of its action.
[27] In my opinion, the fact Wellcome is not relying on other batches of NOVO-TRIMEL products which it tested is not what relevancy is all about in this action. The test for relevancy is as set out in the case of Everest and Jennings, supra, and that is whether the information sought may fairly lead Novopharm to a train of inquiry which may directly or indirectly advance Novopharm's case or damage Wellcome's case. In my view, the information sought by Novopharm is clearly relevant to Wellcome's infringement action and relates directly to unadmitted facts in the statement of defence.
[28] If additional support for my conclusion was necessary, that support is found by examining the trial judgment reasons of MacKay J. in Wellcome/Apotex, supra, where in order to establish infringement, Wellcome had to establish the validity of its testing of various lots of Apotex's products claimed to have infringed. Issues arose, in that context, on sampling, the authenticity of samples, testing apparatus and procedures as well as sensitivity of Wellcome's testing procedures. In that case, as is also alleged in this case, questions arose as to the adequacy of testing for the presence of the benzal isomer of TAA (BTAA) in Novopharm's tablets.
[29] Can the Reference Order provide a discovery shield for Wellcome in this infringement (liability) action because "the extent of infringement" is to be the subject matter of a Reference? In my view, the Reference Order does not provide the disclosure protection Wellcome requests. If Wellcome is successful in proving patent infringement of a single lot of NOVO-TRIMEL (as was the case in Wellcome/Apotex) Wellcome will not be subject to further discovery on the liability issue. As in Wellcome/Apotex, Novopharm, if infringement is established by Wellcome, will be ordered to deliver representative samples of all infringing NOVO-TRIMEL TMP for testing by Wellcome and for an accounting for profits, liability having been determined. In other words, in terms of infringement, this is Novopharm's only opportunity to damage Wellcome's case. In this context, the Reference Order as to the extent of liability is concerned with how much infringement took place not whether infringement occurred.
[30] There may be a possible overlap between the information Novopharm seeks from Wellcome in the liability action and the Reference information Wellcome will be seeking from Novopharm as information arising out of issues concerning "the extent of the infringement" if liability is established. That overlap is not objectionable because Novopharm presently seeks the information for a different purpose or aspect that would arise on the Reference.
[31] This dual purpose was recognized by Reed J. in Geo Vann Inc. v. N.L. Industries, Inc. (1985), 4 C.P.R. (3d) 19. She said this at page 24:
| With respect to the first point, the defendant notes that there has been an order for the reference of damages to be determined after trial if necessary and that it is, in that context, that extent of infringement is relevant, but not at trial. In my view, the plaintiff has demonstrated the relevance of the documents. The order for a reference respecting damages including the extent of infringement relevant thereto does not preclude the extent of infringement (in a difference sense) also being relevant at trial. In my view, the phrase "extent of infringement" can be used to connote two different aspects of an alleged infringement (one I will call the quantitative extent; the other I will call the qualitative extent). The extent of infringement in a quantitative sense is part of the assessment of damages. But the extent of infringement in a qualitative manner (e.g.: what constitutes a substantial although not literal infringement; whether one or more but not all of the claims are infringed) is properly part of the determination of infringement to be assessed at trial. |
[32] In the Geo Vann case, the defendant's second argument was that the document sought was not relevant because the plaintiff pleaded infringement only in respect of one well. In Geo Vann, supra, Reed J. dismissed the defendant's argument for reasons expressed. I agree with her reasoning.
DISPOSITION
[33] For all of these reasons, I find that the Associate Prothonotary's order, far from being clearly wrong, was clearly right. Wellcome's appeal is dismissed with costs. Wellcome's witness shall re-attend on examination-for-discovery and forthwith answer the refused questions and produce the underlying documents sought by Novopharm.
"François Lemieux"
J U D G E
OTTAWA, ONTARIO
NOVEMBER 4, 1999
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