Date: 20090415
Docket: T-482-04
Citation: 2009 FC 378
Toronto, Ontario, April 15, 2009
PRESENT: The Honourable Mr. Justice Hughes
BETWEEN:
APOTEX INC.
Plaintiff
and
GLAXOSMITHKLINE INC., GLAXOSMITHKLINE
PLC,
SMITHKLINE BEECHAM CORPORATION,
DOE CO. and all other entities unknown to
the Plaintiff
which are part of the GLAXOSMITHKLINE
group of companies
Defendants
REASONS FOR ORDER AND ORDER
[1]
Each of
the Plaintiff and Defendants have brought a motion by way of an appeal from an
Order of Prothonotary Lafrenière dated September 23, 2008 which, in the case of
the Plaintiff Apotex’s appeal, he required certain questions put it by the
Defendants on discovery to be answered and, in the case of the Defendants’
appeal, he ordered that certain question which it put to the Plaintiff Aptoex
on discovery need not be answered. I have dismissed both motions without costs
to any party.
[2]
This
action is brought by the Plaintiff Apotex seeking relief as may be provided under
the provisions of section 8 of the Patented Medicines (Notice of Compliance)
Regulations SOR/93-133 as periodically amended. The Defendants
GlaxoSmithKline et al. have defended the action on various grounds and have not
counter-claimed.
[3]
I thank
counsel for each of the parties for reducing the groups of questions which are
the subject of this motion/appeal to, in the case of Apotex to a single group
and, in the case of GlaxoSmithKline, to two groups. Each of these groups were
argued on the basis that they presented a single issue for determination. I
will address these groups on that basis.
[4]
The
general principles respecting motions of this kind are well known. As the
Federal Court of Appeal wrote in Merck & Co. v. Apotex Inc., [2004]
F.C. 459 in restating its proposition made in Canada v. Aqua-Gem Investments
Ltd., [1993] 2 F.C. 425 at paragraph 19 of the Merck & Co. decision:
Discretionary orders of
prothonotaries ought not be disturbed on appeal to a judge unless: (a) the
questions raised in the motion are vital to the final issue of the case, or (b)
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.
[5]
I reviewed
the law respecting discovery in some detail in AstraZeneca Canada Inc. v.
Apotex Inc., November 20, 2008, 2008 FC 1301 and do not propose to set out
that decision at length here. I said at paragraphs 19, 20 and 23:
19 Prothonotaries of this
Court are burdened, to a large extent, with motions seeking to compel answers
to questions put on discovery. Often hundreds of questions must be considered.
Hours and often days are spent on such motions. It appears that in many cases
the parties and counsel have lost sight of the real purpose of discovery, which
is directed to what a party truly requires for trial. They should not slip into
the "autopsy" form of discovery nor consider discovery to be an end
in itself.
20 A determination made by
a Prothonotary following this arduous process ought not to be disturbed unless
a clear error as to law or as to the facts has been made, or the matter is
vital to an issue for trial. Where there has been an exercise of discretion,
such as weighing relevance against onerousness, that discretion should not be
disturbed. The process is not endless. The parties should move expeditiously to
trial.
…
23 Law establishes if a
question is relevant, discretion may be applied as to whether, nonetheless, it
is appropriate to Order, or not to Order, that an answer be given. Deference is
to be given to a Prothonotary's Order in that regard.
[6]
I will
turn to the three groups of questions before me on these motions/appeals.
[7]
The first
is the subject of Apotex’s motion/appeal. Prothonotary Lafrenière ordered that
a large number of questions be answered as to whether the Apotex product is or
becomes a hemihydrate. Such questions would be relevant in considering whether
that product infringes Canadian Patent 1,287,060 (the ’060 patent). In earlier
proceedings T-2660-96 and T-2230-97 the ’060 patent was the subject of
non-infringement allegations by Apotex. It was held by this Court that these
allegations of non-infringement were justified hence the application for
prohibition was dismissed. No action for infringement of the ’060 patent has
been brought.
[8]
Instead,
in the present action the Defendants GlaxoSmithKline have defended the action
in part by a pleading which I will describe as a novel. Relying on a statement
made by the Trial Judge, McGillis J. in the earlier proceedings to the effect
that Apotex would suffer what she described as “very grave consequences” if its product did in fact
convert to a hemihydrate, GlaxoSmithKline pleads, by way of a defence, that the
Apotex product does contain hemihydrate in part, thus Apotex’s claim under
section 8 of the NOC Regulations should be dismissed. The Defence states, in part:
54. In the end, the Court
determined that GSK had not met its burden to prove that Apotex’s allegation
was unjustified. In this regard, Madam Justice McGillis concluded that:
Apotex should not be prevented
from taking its anhydrate tablets do convert to hemihydrate, in whole or in
part it will face “very grave” consequences at that point in time.
55. As such, the Court
accepted Apotex’ undertaking that its tablets would not contain the
hemihydrate.
56. However, the tablets that
Apotex is marketing today do contain hemihydrate, in part.
57. Throughout the various NOC
proceedings resulting from the numerous NOAs sent by Apotex to GSK in respect
to paroxetine hydrochloride, Apotex produced a number of different process
documents. E ach and every one of the processes set out in these documents
yields drug product and tablets containing crystalline paroxetine hydrochloride
hemihydrate, at least in part. Apotex should not be entitled to any damages
prior to the time it develops, if ever, a process that yields tablets
completely free of hemihydrate.
58. As such, Apotex has
breached its undertaking. Under Justice McGillis’s decision, they must face
very grave consequences. As such, their claim for damages under Section 8
should be dismissed in its entirety.
59. Apotex should not be
rewarded with Section 8 damages for any delay in bringing to market a product
which is infringing. This would be contrary to the intent of the NOC
Regulations, which is to prevent patent infringement.
[9]
Apotex did
not move to strike out this plea. Its Counsel at this hearing said that they
were disheartened by having lost motions to strike in other section 8 NOC
proceedings in the past. It is Counsel’s job to be bold, not disheartened!
[10]
Instead,
Apotex pleaded over, saying in Reply:
7. In paragraphs 51 to 59 of
the GSK Canada Statement of Defence, GSK Canada pleads a series of irrelevant
allegations. More particularly:
(a) without admitting that
Apotex infringes Canadian Letter Patent 1,287,060 (the “’060 Patent”), which it
does not, any question of infringement is irrelevant to a claim pursued by a
second person such as Apotex consequent upon the dismissal or withdrawal of a
prohibition application brought under the Regulations;
(b) any issue as to
infringement of the ’060 Patent is one that may only be pursued by a patentee
in an action for infringement. It is only in such an action, assuming that the
necessary conditions exist, which in fact do not exist in the circumstances at
bar, that grave consequences may be visited upon a second person. It is
significant that no action for infringement has been brought against Apotex
alleging infringement of the ’060 Patent;
(c) without admitting that any
undertaking was given and relied upon by GSK Canada or by the Court, Apotex
denies that it breached any alleged undertaking and further denies that any
such breach, which is not admitted, has any relevance to the claim advanced by
Apotex herein.
[11]
Apotex’s
Counsel now says that the GlaxoSmithKline pleading is without merit, therefore
questions directed to this pleading need not be answered. In so asserting
Counsel relied on a number of cases each of which, on closer examination at the
hearing of this motion, did not bear out that proposition. Those cases dealt
with striking out a pleading, or for particulars of a pleading, or to add new
subject matter to a pleading.
[12]
Where a
pleading itself is not the subject of a motion, a Prothonotary hearing a motion
respecting questions put on discovery is quite entitled to accept the pleadings
as they stand and determine whether or not a question should be answered based
on such pleadings. Such a motion is not a surrogate for a motion to strike.
[13]
Given the
state of the pleadings, I find that the Prothonotary did not misapprehend the
law or overlook any material fact. I would not interfere with the exercise of
the Prothonotary’s discretion in ordering this group of questions to be
answered.
[14]
Apotex
says that to give answers to such questions, which they already have done, and
respond to any follow up questions, which has not yet happened, delays this
action and creates enormous expense. This is a matter to be deal with at trial
in considering costs, interest and other matters.
[15]
GlaxoSmithKline’s
motion/appeal dealt with two closely related groups of questions both of which
the Prothonotary ordered did not need to be answered. Both groups deal with
aspects of alleged delaying tactics by Apotex. One deals with delays alleged
in respect of disposition of numerous NOC proceedings. I repeat paragraph 60
of the Defence:
60. Section 8(5) of the NOC
Regulations makes it clear that the conduct of the second person that
contributed to delay the disposition of the NOC proceedings should be taken
into account by the Court in assessing damages in accordance with Section 8.
Because of the egregious conduct of Apotex throughout the various NOC
proceedings as set below, including numerous delays amounting to years, Apotex
should not be entitled to any damages whatsoever pursuant to Section 8.
(pages of particularization
follow)
[16]
It is to
be noted that the delay alleged is “throughout the various
NOC proceedings”, not before institution of these
proceedings.
[17]
The second
group of questions arise from Apotex’s plea in paragraph 21 of its Statement of
Claim:
21. During the currency of the
proceedings with respect of the First Four Patents, GSK Canada added a further
patent to the Patent Register in respect of paroxetine, namely, Canadian
Letters Patent No. 2,178,637 (the “’637 Patent”). The ’637 Patent we added to
the Patent Register on February 17, 1998.
[18]
GlaxoSmithKline,
not in its Defence or other pleading but in its Memorandum or Argument, makes
the point, a tribute to ingenuity of Counsel, that Apotex’s delay gave GlaxoSmithKline
the opportunity to list another patent and an opportunity to institute further
NOC proceedings contributing to the delay. Surely GlaxoSmithKline was not
forced to list a patent nor to enforce it. If it does, can it somehow blame
Apotex for the delay? In paragraph 56 of its Memorandum GlaxoSmithKline says:
56. Apotex’ conduct in
T-2660-96, T-2230-97 and T-2526-96 caused enough delay that an additional
patent was added to the Patent Register before the proceedings were completed.
Apotex has specifically plead that this additional patent contributed to its
damages in this proceeding.
Apotex Statement of Claim,
para. 21.
[19]
In summary
as to delay, GlaxoSmithKline said in paragraph 123 of its Defence:
123. If Apotex had not delayed
in sending NOAs and had consolidated the allegations in the NOAs it sent, the
proceedings would have been over much sooner and Apotex would have mitigated
its alleged damages. This failure to mitigate alone should disentitle Apotex
to any relief sought in the Statement of Claim.
[20]
Apotex
filed a Reply rebutting the allegations as to delay in some detail and
concluded at paragraph 13:
13. In any even and without
prejudice to Apotex’s position that GSK’s pleas of delay are irrelevant.
Apotex denies that it conducted itself in any of the prohibition proceedings in
a manner which caused any delay in the proceedings such as to warrant the Court
to reduce the award to be made in the within proceeding. In fact, Apotex
conducted the prohibition proceedings in a manner designed to expedite the
proceedings, subject to the exigencies of litigation, as will be detailed in
the evidence provided at trial.
[21]
Prothonotary
Lafrenière dealt with these two groups of questions in his Reasons stating that
the questions were of “tenuous relevance” and would “serve no useful purpose”. He wrote
GSK has also asked a numbers
of questions in regard to three mandamus proceedings commenced by Apotex in
relation to the paroxetine patents held by GSK (Court File Nos. T-1635-98,
T-2063-99 and T-2288-01). Being substantially in agreement with Apotex’s
submissions, I am not satisfied that the conduct of Apotex in the mandamus
proceedings are relevant. The “matters relevant to the assessment of the
amount”, as defined in ss. 8(5) of the Regulations, target the conduct of the
parties in relation to applications under s. 6(1), and does not open the door
to a far-reaching discovery on matters of tenuous relevance. In any event, delving
into the motivations and legal strategies of Apotex in commencing and
discontinuing mandamus proceedings would serve no useful purpose as it would
not advance GSK’s legal position.
[22]
I agree
with the Prothonotary’s disposition of these matters. He properly exercised
his discretion.
CONCLUSION AND COSTS
[23]
As a
result, both motions/appeals are dismissed. Following discussions with Counsel
and the hearing, there will be no costs ordered in respect of either motion
ORDER
FOR THE REASONS PROVIDED:
THIS COURT ORDERS that:
1.
Each of
the motions by way of appeal from the Prothonotary’s Order of September 23,
2008 brought by the Plaintiff and Defendants respectively is dismissed;
2.
No Order
as to costs in respect of either motion.
“Roger T. Hughes”
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