Date: 20100514
Docket: T-1348-09
Citation: 2010 FC 534
BETWEEN:
SANOFI-AVENTIS CANADA INC.,
and
SANOFI-AVENTIS DEUTSCHLAND GmbH
Applicants
and
PHARMASCIENCE INC. and
THE MINISTER OF HEALTH
Respondents
ASSESSMENT OF
COSTS – REASONS
Bruce Preston
Assessment Officer
[1]
This
assessment of the costs of Pharmascience Inc. (Pharmascience) is further to the
discontinuance of the Applicants’ (Sanofi) application under section 6(1) of
the Patented Medicines (Notice of Compliance) Regulations.
[2]
The
principal focus of the Written Representations of both parties was the expert
witness disbursements; however, prior to reviewing counsels’ submissions it
would be helpful to review the timeline of events prior to the discontinuance
of the application.
Timeline
[3]
The
Notice of Application was filed on August 14, 2009. The application sought an
order prohibiting the Minister of Health from issuing a Notice of Compliance to
Pharmascience for the drug ramipril HCTZ.
[4]
On
August 19, 2009 Pharmascience filed its Notice of Appearance and on August 20,
2009 the Court issued a direction giving the parties 10 days to “file a joint
proposal for a timetable to govern the steps in this proceeding, and
incorporating into the timetable, any motions that could be contemplated”.
[5]
By
way of letters dated August 31, 2009 the Applicants and Pharmascience informed
the Court that they were unable to agree on a timetable. The letters also
outlined proposed timetables as submitted by each party.
[6]
The
timetable proposed by Sanofi allowed 90 days for Sanofi to file evidence
concerning non-infringement and Pharmascience 90 days to file evidence
concerning invalidity. The parties would then have 105 days to file responding
evidence.
[7]
In
the letter from Pharmascience the Respondent indicates an intention to file a
motion pursuant to section 6(5) of the Patented Medicines (Notice of Compliance)
Regulations
by October 2, 2009. It further proposed that the exchange of evidence
concerning the application would not commence until after the determination of
the section 6(5) motion.
[8]
On
September 17, 2009 a case management conference was held. This conference
resulted in a second case management conference on September 25, 2009. At the
second conference the Court ordered that “the parties shall, no later than
November 4, 2009, either jointly or separately file written submissions as to
the schedule for the further steps to be taken in this proceeding”.
[9]
On
November 4, 2009 Sanofi submitted a joint proposed timetable and on November 5,
2009 the Court rendered an order setting the timetable for the completion of
steps in the proceeding.
[10]
It
is worthwhile to reproduce in full the Court’s order of November 5, 2009 as it
sets the timetable for the service of evidence:
1. The Applicants' evidence shall be served by
December 16, 2009.
2. The Respondent Pharmascience’s evidence shall be
served within 90 days of service of the Applicants’ evidence.
3. The
parties are dispensed with the requirement of filing their evidence in
accordance with Rules 306 and 307, and need only file same as part of their
respective records.
4. If the Applicants contemplate any motion pursuant
to Rule 312 of the Federal Courts Rules, or any motions concerning
Pharmascience's evidence, the Applicants shall, within10 days of the receipt of
Pharmascience's evidence, submit dates of mutual availability for such a
motion.
5. Cross-examinations shall be completed within 60
days of the service of the Respondent Pharmascience’s evidence.
6. If any party contemplates any motion arising from
the cross-examinations, the parties shall, within 10 days of the completion of
the cross-examinations, submit dates of mutual availability for such a motion.
7. Within 10 days of the completion of the
cross-examinations, the Respondent Pharmascience shall give notice of whether
it intends to bring a motion pursuant to section 6(5)(b) of the Patented
Medicines (Notice of Compliance) Regulations (“Regulations”).
8. If the Respondent Pharmascience gives notice
that it intends to bring a motion pursuant to section 6(5)(b) of the
Regulations:
(i) Pharmascience shall serve its motion record for
a motion pursuant to s.6 (5) of the PM (NOC) Regulations within 15 days
of such notice
(ii) Applicants shall serve their responding motion
record in respect of the Pharmascience s. 6(5) motion within 15 days of service
of the Pharmascience motion record.
(iii) The parties shall provide to the court within 15
days of service of the Pharmascience motion record early available dates for
the hearing of the motion.
9. If Pharmascience gives notice that it does not
intend to bring a motion under s. 6(5) (b):
(a) The Applicants shall serve and file a requisition
for a hearing within 10 days of the completion of the cross-examinations or the
service of such notice by Pharmascience which ever is later; and
(b) The Applicants shall serve and file their
Application Record within 45 days of the completion of the cross-examinations
or the service of such notice by Pharmascience which ever is later.
10. If Pharmascience gives notice that it intends to
bring a motion under s. 6(5) (b) and if the application is not wholly dismissed
upon such motion:
(a) The Applicants shall serve and file a requisition
for hearing within 10 days of the order in respect of such motion; and
(b) The Applicants shall serve and file their
Application Record within 45 days of the order in respect of such motion.
11. The Respondent Pharmascience shall serve and file
its Application Record within 45 days of the service of the Applicants' Record.
12. The schedule is subject to
further adjustment by the Court as the Court may consider fit in light of any
motion or any other matter.
[11]
Upon
reviewing the record of this proceeding it appears that after the order of
November 5, 2009, no further steps were taken until January 8, 2010 when the
application was discontinued.
Expert Witnesses
[12]
In
its Bill of Costs Pharmascience has claimed for two expert witnesses; Dr.
Rhodes ($13,020.00) and Dr. Moe ($4,133.33).
[13]
Pharmascience
submits that the three part test to assist in the determination of whether
experts are demonstrably relevant and supportive of the case and thus whether
their costs are allowable disbursements, is set out in Allied Signal Inc. v.
DuPont Canada Inc. (1998) 81 C.P.R. (3rd) 129 as cited in Biovail Corporation (d.b.a. Biovail Pharmaceuticals Canada); Biovail Laboratories Inc. and GlaxoSmithKline Inc. v. The Minister of National Health and Welfare and
Sandoz Canada Inc. 2007 FC 767 at paragraph 18:
(1) The disbursement for an expert must
be prudent and reasonable in the circumstances existing at the time it was
incurred;
(2) The terms of engagement must not
constitute a blank cheque;
(3) The extent of reliance on the expert
by the trial judge should be a factor.
[14]
At
paragraph 17 of its Written Submission, Sanofi agrees that the three part test
for the allowance of expert disbursements applies.
[15]
Prior
to proceeding with an analysis of the actual disbursements claimed for expert
witnesses, it is necessary to come to a determination as to whether, in the
circumstances of this particular case, the disbursements for the experts were
prudent and reasonable in the circumstances existing at the time they were
incurred. Should it be determined that the expenses were prudent and
reasonable, the second part of the test will become important in an analysis of
the actual costs. Also, as this matter was discontinued, the third part of the
test will not be addressed at all in this decision.
[16]
Although
not specifically stated as such in its Written Representations, Pharmascience
addresses two factors in determining whether the disbursements for experts were
prudent and reasonable at the time they were incurred. The first factor
addressed is timeliness and the second is complexity.
[17]
Concerning
timeliness, at paragraph 7 of its Written Representations Pharmascience
submits: “Under Rules 306 and 307 of the Federal Courts Rules, Pharmascience’s
evidence could have been due as early as October 13, 2009”. Pharmascience then
submits that shortly after the commencement of the Sanofi application,
Pharmascience retained Dr. Christopher Rhodes and Dr. Gordon Moe to act as
experts.
[18]
At
paragraph 39 of its Written Submissions Pharmascience explains the requirement
to retain the experts at the early stages of the proceeding:
Early preparation of the expert witnesses
was necessary and prudent to ensure that Pharmascience was fully prepared to
present the evidence it intended to use at the hearing in compliance with the
timelines set by the Federal Courts Rules prior to the agreement to the
Scheduling Order, which was not issued until November 5, 2009.
[19]
Pharmascience
further argues that although the hearing did not proceed and Pharmascience was
not called to present its case and expert evidence as a result of the discontinuance
of the proceeding by Sanofi, counsel was nevertheless required to continue
preparations for the hearing of the application until discontinuance. Counsel
submits that: “services performed or engaged in adversarial proceeding in court
is a matter of judgment, and the reasonableness of which ought not to be
assessed from the perspective of hindsight, but rather from the perspective of
counsel before the hearing or trial”. In support of this counsel cites Apotex
Inc. v. Egis Pharmaceuticals and Novopharm Ltd. 1991 CanLII 2729 (ON S.C.).
[20]
Their
final comments on this issue are found at paragraph 85 of Pharmascience’s Written
submissions:
It is respectfully submitted that the
first part of the Allied Test is met in the current circumstances in
view of the legal issues facing Pharmascience at the time it retained its
experts. In particular, the circumstances facing Pharmascience at the time it
incurred the disbursements for the experts were that time was potentially short
and success by Sanofi would effectively eliminate Pharmascience from the
Ramipril HCTZ market until the expiry of the patents at issue. Consequently, it
was prudent and reasonable in the circumstances to retain Dr. Rhodes and Dr.
Moe and have them prepare their affidavits in September/October 2009.
[21]
In
response to the submissions of Pharmascience, at paragraph 1 of their Written
Representations Sanofi argues:
Pharmascience should not recover these
expenditures because they were premature and unreasonable. Sanofi discontinued the
application upon receiving and evaluating Pharmascience’s factual disclosure
relevant to its allegation of non-infringement and there was no justification
for Pharmascience to engage any experts.
[22]
In
the following paragraph Counsel for Sanofi submits:
While Pharmascience does not rely on its
stated intention to file a motion for summary judgment, expressed during the
early stages of the application… it appears that this was the likely reason for
its early engagement of experts. However, as such a motion was never filed and
ill conceived, and, in any event, not relied on by Pharmascience in support of
the costs claimed; disbursements for experts fees associated with such a
strategy are not properly recoverable.
[23]
Further,
at paragraph 3 of their Written Representations Sanofi notes:
Pharmascience’s sole argument is that the
early disbursements for experts were reasonable as under Rules 306 and
307 such evidence could have been due 60 days after commencement of the
application. However, this is not a fair characterization of the circumstances
existing at the time of the expenditures. As evidenced by correspondence
between counsel, the parties were negotiating a timetable that allowed
Pharmascience ample time to file evidence. There was no risk at all that
Pharmascience would have to file any evidence early in the proceeding. Further,
Pharmascience was aware that there was no certainty that Sanofi would even
proceed with the application after reviewing Pharmascience’s disclosure.
Indeed, it was Pharmascience’s hope and expectation that the application would
not proceed to the evidential stage.
[24]
Sanofi
further submits that on August 26, 2009, Sanofi proposed a timetable that
contemplated a reversal of the order of evidence on validity. Sanofi submits
that in that timetable, Pharmascience was not required to file evidence on
validity until the end of December, 2009 at the earliest and responding
evidence on non-infringement until April of 2010 at the earliest.
[25]
In
rebuttal to Sanofi’s contention that a) the parties would not be required to
file evidence by the statutory deadline and b) there was nothing for the
experts to reply to, Pharmascience argues:
Hindsight is not permissible in the
assessment of whether the service charged for was an extra service or frill not
reasonably necessary to defend the party’s position. Rather, the question is
whether in the circumstances existing at the time a litigant’s solicitor made
the decision to incur the expenditure it represented a prudent and reasonable
representation of the litigant both in terms of leading and responding to
evidence and it filled the void of technical expertise requisite to the
solicitor’s preparation and conduct.
[26]
At
paragraph 18 of its rebuttal Pharmascience contended:
Following issuance of the direction of Prothonotary
Milczynski communication ensued between counsel in respect of a timetable for
steps in the proceeding. During this period, the parties were unable to agree
to a joint timetable and the timetable proposed by Sanofi provided that a
portion of Pharmascience’s evidence was due by the end of December 2009, which
was in effect only a two month extension of the statutory deadline.
Consequently, at the time the experts commenced work there was no joint
timetable in place, the timetable proposed by Pharmascience, which provided a
deadline of June 2010 for Pharmascience’s evidence had been rejected by Sanofi
and the timetable proposed by Sanofi would have required a portion of the
evidence to be filed by December 2009. In the circumstances facing counsel it was
reasonable to engage its experts to prepare its evidence and to be in a
position to file it.
[27]
Concerning
the second factor, that of complexity, at paragraph 5 of the Affidavit of Erin Holder,
counsel for Pharmascience, submits that four Canadian patents were at issue in
the Notice of Application:
Canadian
Patent No. 1,338,344 (344);
Canadian
Patent No. 2,023,089 (089);
Canadian
Patent No. 2,382,387 (387), and;
Canadian
Patent No. 2,382,549 (549).
[28]
At
paragraph 58 of its Written Representations Pharmascience argues that the use
of experts is justified due to the complex nature of the patents:
The patents at issue in this matter are
highly technical within the pharmaceutical and chemical fields. The assistance
of experts both in leading evidence as to the meaning of technical terms in the
claims and in responding to evidence presented by the other side is not only
prudent but necessary in complex PMNOC proceedings such as this.
[29]
With
respect to each of the four patents at issue in the application, Pharmascience
submits that the issues raised in this proceeding were numerous, factually and
legally complex and involved issues of infringement and validity. Pharmascience
further submits Sanofi denied the assertions of non-infringement and invalidity
contained in Pharmascience’s Notice of Allegation “putting Pharmascience to the
strict proof thereof”.
[30]
At
paragraphs 66 and 67 of its Written Representations Pharmascience contends:
66.
To defend
against the Sanofi Application, Pharmascience was required to prepare and file
evidence dealing with whether the PMS Ramipril HCTZ Tablets would infringe the
claims of the patents at issue and whether the patents at issue were valid. The
issues of infringement and validity involved the particular chemistry of the
PMS Ramipril HCTZ Tablets and the ambit or scope of the invention claimed in
each of the patents at issue.
67.
Consequently,
preparation of Pharmascience’s evidence required the services of experts in the
field who were skilled in the art and who could opine as to the meaning of the
terms used in the claims to delineate their scope and also whether the PMS
Ramipril HCTZ Tablets were caught within the ambit of any valid claim of the
patents at issue.
[31]
Counsel
for Pharmascience submits that the test found in Tariff B 1(4) has been met;
the complexity of the issues raised in the application establishes the
reasonableness of the expert witness disbursement and the Affidavit of Erin
Holder establishes that the disbursement has been made by Pharmascience.
[32]
In
response to these submissions Sanofi submits that the burden of proof was on
Sanofi to lead evidence on infringement. At paragraph 21 of their Written
Representations Sanofi argues:
The allocation of the burden of proof is
settled law in NOC proceedings. As the applicant, Sanofi had the burden to
demonstrate on the balance of probabilities that each of Pharmascience’s
allegations of invalidity and non-infringement were not justified. It is
settled law that the statutory presumption of validity falls away when the
respondent leads some evidence that is not clearly incapable of establishing
invalidity. It is also settled law that a respondent’s allegation of
non-infringement is presumed to be true until the contrary is shown by the
applicant.
[33]
In
support of this Sanofi cites to five cases:
Abbott Laboratories v. Canada, 2007 FCA 153;
Pfizer Canada Inc. v. Apotex Inc, 2007 FC 971;
Eli Lilly Canada Inc. v. Apotex Inc., 2009 FC 320;
Merck Frosst Canada Inc. v. Canada, (1994) 55 C.P.R. (3rd) 302;
SmithKline Beecham Inc. v. Apotex Inc., (1999) 166 F.T.R. 67.
[34]
Counsel
for Sanofi submits that since the onus was on Sanofi to lead evidence there was
no onus on Pharmascience to solicit expert evidence as there was simply no
evidence in the record to which Pharmascience’s experts could respond. In
addition, counsel argues that under the NOC Regulations Pharmascience
was required to set out the legal and factual basis for its allegation in a
sufficiently complete manner to enable Sanofi to assess its course of action in
response.
[35]
In
support of this counsel referred to AB Hassle v. Canada (Minister of
National Health and Welfare) [2000] F.C.J. No. 855. At paragraph 24 the
Court held that “a second person could not in a section 6 proceeding add to the
facts that were set forth in its detailed statement”.
[36]
Counsel
further alleges:
The fact that Pharmascience’s NOA and
detailed statement were 138 pages in length suggests that Pharmascience did in
fact have at least a sufficient understanding of the patents and relevant terms
before the application was commenced. Thus it was not reasonable or prudent for
Pharmascience to retain experts after commencement of the application simply to
opine on the scope or meaning of the patents. Such work was redundant in the
face of the detailed statement, particularly as it is trite law that a “second
person” such as Pharmascience is strictly limited to the legal and factual
basis detailed in the NOA.
[37]
Concerning
the issue of burden of proof, Pharmascience, by way of rebuttal submits:
In NOC Proceedings on the issue of
infringement the starting point for the Court is the proposition that the
allegations of fact in the Pharmascience NOA are true. However, in determining
whether or not the allegations are justified pursuant to section 6(2) of the NOC
Regulations the Court must then decide whether on the basis of such facts
as have been assumed or proven, the allegation would give rise in law to
the conclusion that the patent would not be infringed by the respondent.
[38]
In
support of this Pharmascience cites Merck & Frosst Canada Inc. v. Canada (Minister
of National Health and Welfare) (1994) 55 C.P.R. (3rd) 302 at
page 319.
[39]
Pharmascience
further contends that by taking the position that non-infringement was not
justified, the Applicants were putting Pharmascience on notice that it would
have to lead evidence in support of its allegation.
[40]
Then
at paragraph 9 of its rebuttal Pharmascience submits:
Sanofi’s position that without first
having Sanofi’s evidence in hand Pharmascience’s experts could not undertake
any meaningful or useful exercise is simply not correct as (a) Pharmascience’s
expert Dr. Rhodes could determine whether Pharmascience’s formulation and
process for its PMS Ramipril Tablets infringed the 344 Patent based on the
information available in Pharmascience’s disclosure and the 344 Patent itself
and (b) Pharmascience’s expert Dr. Moe could opine on the meaning of terms of
the other patents at issue having regard to the allegations contained in
Pharmascience’s NOA.
[41]
Concerning
the legal and factual basis for its NOA, Pharmascience, by way of rebuttal
explains that although Pharmascience had its own view of the issues it would
need to retain experts to ultimately provide objective expert evidence in
support of the factual and legal basis asserted in its NOA.
[42]
Pharmascience
continued by submitting:
Retaining experts early on was
reasonable, prudent and necessary for Pharmascience to build its case, advance
its position in this matter and provide evidence of the allegations in its NOA,
which would involve a construction of the terms in the patents in suit, in a
timely manner and was not dependant on nor purely responsive to Sanofi’s
evidence. It was also prudent and reasonable to retain experts early on in the
proceeding since waiting may have deprived Pharmascience of its experts due to
their unavailability or other timing issues.
[43]
Pharmascience’s
final submission in rebuttal concerning this issue is found at paragraph 22:
A party is not required to delay the
preparation of material that is ultimately required to file until the last
possible second before it is due. To do so will often increase costs on the
party and may prejudice the ability of the party to make full answer. Rather,
early preparation is not only prudent but often times encouraged by the Court
to ensure that the parties timely meet the obligations on them in the
litigation. Consequently, in engaging experts to prepare and give evidence that
was required in the matter was not overly cautious or a result of excessive
zeal but rather was reasonable and prudent in the circumstances facing counsel
at the time. It may even have been considered negligent to delay engaging Dr.
Rhodes and Dr. Moe especially in view of the amount of work required to timely
prepare expert opinions.
Assessment
[44]
Having
reviewed the affidavits of Dr. Rhodes and Dr. Moe, it is clear that Dr. Rhodes
was retained to address non-infringement of the 344 Patent and that Dr. Moe was
retained to explain medical terms used in the remaining patents.
[45]
It
has been decided many times that disbursements should not be assessed from the
perspective of hindsight. Therefore, even though the expert evidence was never
presented, I am not able to disallow disbursements based solely on the fact
that the matter was discontinued. This would require hindsight as counsel could
not have known that the proceeding would be discontinued. However, if I find
that at the time the expenses were incurred it was not prudent and
reasonable to make those expenditures, then the disbursements cannot be allowed.
[46]
Pharmascience
has submitted that it was prudent and reasonable to retain experts as the
patents at issue in this matter are highly technical within the pharmaceutical
and chemical fields. Having reviewed the patents and the draft expert
affidavits attached to the Affidavit of Erin Holder, I am in agreement that the
nature of the issues before the Court more than justified the use of expert
evidence. However, this only answers one portion of the test. Even though it
may have been prudent and reasonable to retain experts in this proceeding, the
question remains, was it prudent and reasonable at the time the expenses were
incurred.
[47]
Sanofi
has submitted that the early engagement of the experts could be related to
Pharmascience’s intended motion for summary judgment. Further, as was
previously noted, in the letter of August 31, 2009 counsel for Pharmascience
was proposing to file its Motion Record for the motion to dismiss by October 2,
2009.
[48]
Pharmascience
has submitted that they wanted to retain experts early in the proceeding to
ensure their availability. I do not find that it was prudent or reasonable to
retain experts early on in the proceeding if the only concern was that “waiting
may have deprived Pharmascience of its experts due to their unavailability or
other timing issues”. If this concern led to Pharmascience retaining experts
sooner than necessary, I am of the opinion that Pharmascience should be
responsible for the cost of assuring they retained the experts desired.
[49]
This
however was not Pharmascience’s only consideration. That the restrictive time
limits found in Rules 306 and 307 of the Federal Courts Rules caused
Pharmascience considerable concern and that the timetable proposed by Sanofi
resulted in only a two month extension of the statutory deadline were also
factors. Pharmascience concluded by submitting that a party is not required to
delay the preparation of material until the last possible second before it is
due.
[50]
Although
I can appreciate the concerns of Pharmascience as they relate to the time
limitations found in Rules 306 and 307 of the Federal Courts Rules, it
appears from the outset that the Court recognized the need for a modification
of these limits. From the Direction issued on August 20, 2009, giving the
parties 10 days to file a joint proposal for a timetable to govern the steps in
this proceeding, and incorporating into the timetable, any motions that could
be contemplated, Pharmascience must have realized that the requirements of
Rules 306 and 307 would be modified by the Court. Although, the initial
timetable submitted by Sanofi on August 31, 2009 required Pharmascience to
submit some evidence by December 2009, at no time did Pharmascience agree to
this timetable and in the end, pursuant to the timetable set by the order of
November 5, 2009, Pharmascience was not required to file evidence until March
2010. In fact at the time the application was discontinued no evidence had been
filed by either party.
[51]
This
being the situation the apparent urgency that Pharmascience was addressing in
retaining experts early in the proceeding does not appear to be an accurate
characterization of the circumstances existing at the time. In fact it would
appear that Pharmascience wanted to ensure that it did not to delay the
preparation of material until the last possible second.
[52]
By
way of example, the disbursement for Dr. Rhodes is by far the largest amount
claimed in the Bill of Costs. From the invoices found at Exhibit L and Exhibit
M to the Affidavit of Erin Holder it is apparent that over $12,000.00 of a
total $13,000.00 disbursement was accumulated prior to the initial Case
Management conference held on September 17, 2009. Further, upon closer
inspection it is apparent that the work involved in dictating, presumably of the
affidavit, was performed prior to September 17, 2009. After that date the only
activity billed for was e-mailing. Moreover, the first work billed for was from
September 1, 2009, the day after the parties submitted proposed timetables for
the Court’s consideration.
[53]
I
am of the opinion that unless the expert affidavits were intended to be used in
support of the motion to dismiss, it was not prudent or reasonable to expend
almost 65% of the total amount claimed in a Bill of Costs on an expert, prior
to the timetable for the exchange of evidence being finalized. Further, if the
affidavits were in support of the motion to dismiss, the costs cannot be
allowed as the motion was never filed and costs of the motion never awarded.
[54]
Although
the amounts disbursed for Dr. Moe are less substantial, my finding is the same.
[55]
On
the other hand Pharmascience has submitted that they were put on notice by
Sanofi’s application that they would be required to lead evidence in support of
its allegations in the NOA. If this were correct, it may have been prudent and reasonable
to commence the preparation of evidence immediately, however, Pharmascience had
no burden of proof.
[56]
Sanofi
has submitted that “Sanofi had the burden to demonstrate on the balance of
probabilities that each of Pharmascience’s allegations of invalidity and
non-infringement were not justified”. In support of this Sanofi relied on, Eli
Lilly Canada Inc. v. Apotex Inc., 2009 FC 320 among other cases. At
paragraph 41 the Court held:
Turning to infringement the law is well settled
that where a generic has alleged non-infringement, the statements that it makes
in that regard in its Notice of Allegation are presumed to be true. The
Applicant (first party) bears the burden of proof, on the balance of
probabilities, to satisfy the Court that the allegations of non-infringement
are not justified; merely to raise the possibility of infringement is
insufficient. The Federal Court of Appeal made these points quite clearly
in its decision in Novopharm Limited v. Pfizer Canada Inc. (2005), 42 C.P.R.
(4th) 97, 2005 FCA 270 at paragraphs 19, 20 and 24:
·
19 In Pharmacia Inc. v. Canada (Minister
of National Health and Welfare) (1995), 64 C.P.R. (3d) 450
(F.C.A.), Hugessen J.A. addressed the evidentiary burden placed on a generic
under the Regulations. He adopted the reasons of the trial judge who described
this burden as follows:
- ... the grounds that the patentee has for challenging the
generic's notice of allegation should be advanced in the originating
notice of motion filed pursuant to s. 6(1) of the Regulations. ... The
generic may then be informed as to what vexes the patentee and why a
prohibition order barring entry should be issued. Initially, i.e.,
before the Minister, the generic has raised the issue of
non-infringement. At this stage, before the court, the generic now has
the opportunity to file evidence supporting its detailed statement. In
essence, this is the evidential burden on a respondent.
- (see Pharmacia Inc. v. Canada (Minister of National Health and Welfare) (1995), 60 C.P.R. (3d) 328 at 339-40 (F.C.T.D.), per Wetston J.)
·
20 In my view, this statement remains good law.
Where, as here, the NOA is found to be adequate, the legal burden remains
squarely on Pfizer to prove, on a balance of probabilities, that the
allegations in the NOA are unjustified. Novopharm has no evidential burden
to support the allegations in its NOA and detailed statement (see AB Hassle 2
at paragraph 35). Therefore, Novopharm need only file evidence
supporting its detailed statement to counter evidence, if any, submitted by
Pfizer in the course of the prohibition proceedings.
...
·
24 For whatever reason, Pfizer relies solely on
Dr. Munson's speculations in this proceeding. The law is well settled that in
order to satisfy the legal burden placed on it under section 6 proceedings, it
is insufficient for Pfizer to merely raise the possibility of infringement (see
Glaxo Group Ltd. v. Canada (Minister of National Health and Welfare) (1998), 80 C.P.R. (3d)
424 (F.C.T.D.) at paragraph 9). In relying solely on Dr. Munson's evidence, Pfizer has failed to satisfy its legal burden of proving
that Novopharm's NOA is not justified. (Emphasis added)
[57]
This
is supported by the verbal order of September 25, 2009 which stated:
The parties shall, no later than November
4, 2009, either jointly or separately file written submissions as to the
schedule for the further steps to be taken in this proceeding. The Applicant
is expected to begin working on gathering its evidence as of the date of the
present order given at the case management teleconference that took place on
September 25, 2009. (Emphasis added)
[58]
It
is therefore clear that, even though Sanofi put Pharmascience on “notice”, the
burden of proof rested with Sanofi. Pharmascience had no evidential burden to support the allegations. This being the situation I
find that the steps taken by Pharmascience were premature and therefore not
prudent or reasonable.
[59]
Pharmascience
has submitted that it needed to retain experts to ultimately provide objective
expert evidence in support of the factual and legal basis asserted in its NOA.
This appears to be contrary to the finding in AB Hassle (supra)
were the Court held that a second person could not in a section 6 proceeding
add to the facts that were set forth in its detailed statement. Given that,
pursuant to AB Hassle (supra) Pharmascience could not add to the
facts set forth in its detailed statement it does not seem prudent or
reasonable to retain experts to provide objective expert evidence in support of
the factual and legal basis asserted in its NOA. If on the other hand
Pharmascience is suggesting the experts were required to provide objective
expert evidence in response to the evidence of Sanofi, as indicated above, this
disbursement was premature.
[60]
Although
it has been held many times that a result of zero dollars on an assessment
would be absurd, this does not apply to specific disbursements. There have been
many assessments which have held that a disbursement cannot be allowed if it is
not supported by the evidence or if it is found to be unreasonable.
[61]
For
the above reasons, I find that even though the nature of the application would
have justified the use of experts had it proceeded to hearing, in the
circumstances existing at the time the expert witness disbursements were
incurred, the disbursements for Dr. Rhodes and Dr. Moe were not prudent or
reasonable and are therefore, not allowed.
[62]
It
follows from the above that any services or disbursements directly related to
the expert witnesses will not be allowed. At paragraph 32 of its Written
Representations Pharmascience submits that Item 13(a) is claimed for the
preparation of expert witnesses by counsel to Pharmascience. Based on my
reasoning above, Item 13(a) will not be allowed. Similarly, the $70.61 claimed for
the Speak Write Voice to Document Service is not allowed.
[63]
Pharmascience
has claimed 4 units under Item 2 for the preparation and filing of a Notice of
Appearance. I cannot allow this item as it has been decided on several
occasions that the preparation and filing of a Notice of Appearance is not
recoverable under Item 2. I have, however, previously decided that the services
related to a Notice of Appearance may be claimed under Item 27. Following my
decision in Toronto Sun Wah Trading Inc. v. Canada (Attorney
General)
2009 FC 1037, I will allow 1 unit under Item 27 for the Notice of Appearance.
[64]
Finally,
Pharmascience has claimed 4 units under Item 26 for the assessment of costs. As
the materials presented in support of the Bill of Costs were extensive this
amount is allowed as submitted.
[65]
The
Bill of Costs is allowed at $650.00. A certificate of assessment will be
issued.
“Bruce Preston”
Toronto, Ontario
May 14, 2010
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