Date: 20071115
Docket:
T-1837-07
Citation: 2007FC1196
Ottawa,
Ontario, Thursday, this 15th day of November 2007
PRESENT: MADAM
PROTHONOTARY MIREILLE TABIB
BETWEEN:
PURDUE PHARMA
Applicant
- and -
PHARMASCIENCE INC.
and
THE MINISTER OF
HEALTH
Respondents
REASON FOR ORDER AND ORDER
[1]
In this
application for a prohibition order pursuant to the Patented Medicines
(Notice of Compliance) Regulations (the “Regulations”), the Applicant seeks
an order that this application be specially managed, and in the context of case
management, that the Respondent Pharmascience Inc. (“Pharmascience”) be
scheduled to file its evidence before the Applicant’s.
[2]
It has
been observed that proceedings under the Regulations are getting more and
more complex and lengthy, both in terms of prosecution and in terms of hearing
time, to the point where hearings on the merits taking place within the last
six months of the 24-month statutory stay are becoming the rule rather than the
exception, and where it is routine that hearings last three days or more. To
the undersigned’s knowledge, no such application appears to have been heard on
the merits without having had to be designated as a specially managed
proceeding and, more often than not, they have required significant
interlocutory and scheduling hearings. Notices of allegations are getting
lengthier, and in particular, allegations of invalidity are getting lengthier
and more complex. Once an allegation of invalidity is made, an Applicant is
almost compelled to file evidence, and its best evidence, on every single
ground of invalidity alleged, whether or not the Respondent will ever lead
evidence on that aspect. And whether or not the Respondent mounts an
independent case on any of its invalidity allegations, it may still, and too
often feels compelled to file evidence merely aiming to undermine, contradict
or attack the credibility of the Applicant’s affiants. Thus, secondary issues
are often blown out of proportion, consuming the parties’ and the Court’s
resources, and extending the time required for the hearing and determination of
the application on its merits. Although fortunately many of those issues get
abandoned prior to the hearing on the merits, they will still have contributed
in multiplying the number of experts thought to be necessary by the parties,
the time required to schedule and conduct their cross-examinations and often,
the time and resources of the parties and of the Court in dealing with
interlocutory motions arising from this evidence.
[3]
Eventually,
the issues in the vast majority, if not in all of the proceedings under the Regulations
end up, by the time they get to a hearing, being substantially narrowed from
what they originally were and from what they became in the course of
prosecution. It is the process of getting there which is getting particularly
longer and more exhausting of time and resources.
[4]
Can there
be a way to narrow the issues for hearing earlier? Can a disposition of the
issues in the proceedings which is as just, but is less expensive and more
efficient be achieved? The Applicant’s present motion proposes that this be
done by the simple expedient of reversing the order in which the Applicant and
the Respondent are to serve and file their evidence.
[5]
That idea is
not new and was proposed by applicants and rejected by the Courts in the past
(see: Merck & Co. v. Nu-Pharm Inc. et al. (2000) 7 C.P.R. (4th)
292 and Bayer AG et al. v. Canada (Minister of National Health and Welfare) (1993) 51 C.P.R. (3rd)
329).
[6]
The case
before me, I think, is different. In those earlier cases, the applicants were
seeking the reversal essentially on arguments of what the Regulations
contemplated, and on grounds of procedural fairness and prejudice. The just,
least expensive and most efficient manner of proceeding with these complex
litigations was not addressed in these matters. Case management, and the power
of the case management Judge to give directions that are necessary for the
just, most expeditious and least expensive determination of the proceedings on
its merits do not appear to have been considered in these cases (indeed, in the
case of Merck, case management was not even in existence). Further, it
is fair to say that proceedings under the Regulations had not, at that
time, reached the same proportions as they have now reached. Also, the very
idea of getting the parties to consider whether an inversion of the order in
which some or all of the evidence is to be adduced has recently been raised by
the Court in informal discussions between members of the Court and members of
that particular Bar, as a possible way of rationalizing these proceedings.
[7]
I am
satisfied that the Court has, in the context of case management, discretion to
vary the order in which evidence of the parties on an application is to be
served and filed if it is satisfied that it is necessary for the just, most
expeditious and least expensive determination of the proceedings on its merits.
That discretion is contemplated in Rule 385(1)(a). Additional support for this
proposition, if needed, can be found in Rule 55, which allows the Court to vary
a rule or dispense with compliance in special circumstances. An analogy may
also be drawn with Rule 274, which sets out the order in which evidence is to
be led at a trial, but specifically provides that the Court may direct
otherwise.
[8]
In my
view, if such a reversal is to be contemplated or ordered, it must be for the
purpose of achieving the least expensive and most expeditious determination of
the issues on the merits in a manner that remains just. In other words, the
goal and the precondition would be that is should not affect the substantive
rights of the parties and the fairness of their procedural rights. The Court
being satisfied that such an order would achieve the just, most expeditious and
least expensive determination of the proceeding is the primary requirement, and
one which the moving party has the burden of establishing. Whether or not the
order should be made in the circumstances remains a matter for the Court’s
discretion.
[9]
The
parties before me generally concurred that the present case involves
particularly complex issues of construction and invalidity. There are, in
addition, non-infringement issues. The Respondent’s notice of allegation runs
to 93 pages, alleges some 13 grounds of invalidity and further incorporates a
notice of allegation previously issued by Novopharm with respect to the same
drug, which itself gave rise to an extremely lengthy and complex prohibition
application. (The application was eventually settled, but only after all
evidence had been filed, including reply evidence).
[10]
Having
heard the parties’ representations at length, and having personally been
charged with the case management of the earlier application involving Novopharm,
I consider that there is a distinct possibility, if both parties should obtain
leave to have more than 5 experts each, and if motions for leave to file reply
evidence are brought, that this matter will not be capable of being prosecuted
with the 24-month period contemplated in the Regulations. On the record
before me, if the litigation proceeds in the regular fashion, that may well
happen.
[11]
The
Applicant submits that its proposal would effectively narrow the issues for
determination at an early stage, reduce the likelihood that reply evidence will
be needed, and ultimately prove more expeditious and less costly for both
parties.
[12]
As regards
the non-infringement allegations, the Applicant concedes that the most important
factor in narrowing the issues will be its own review of Pharmascience’s
formulation, dissolution and pharmacokinetic information, and its determination
of which claims of the patent it intends to assert would be infringed. Until
that is done, asking Pharmascience to file its evidence first would not narrow
the issues and would instead force Pharmascience to file evidence on issues
that may never be contested. The Applicant suggest that this initial narrowing
of the non-infringement issues can be accomplished within some 21 days, by it
receiving and reviewing Pharmascience’s information and then advising, probably
by way of an amended notice of application, which claims of the patent it
asserts would be infringed. The Applicant goes on to suggest that if, from
there, Pharmascience was required to file its evidence first, there would be an
opportunity to further narrow the issues as Pharmascience might abandon some of
its claims of non-infringement. The period of time required for the affidavits
of both parties to be filed under this suggestion would be of 110 days, as
opposed to 150 days under the schedule otherwise contemplated by the parties, a
savings of 40 days. Although I agree that there would be some potential for the
further narrowing of the issues anticipated by the Applicant, the bulk of the
issues to be narrowed would be narrowed in any event under normal process. I
am not certain that the potential additional narrowing would be substantial
enough, and the savings in time substantial enough to justify forcing
Pharmascience to file its evidence on infringement first in the absence of its
consent, especially since it appears to me that the non-infringement issues are
much less voluminous and complex than the invalidity issues, and that the
invalidity issues will likely dictate the pace at which this application can
proceed.
[13]
It is with
respect to the invalidity issues that I can conceive of the most potential for
narrowing the issues and gaining efficiencies in time and expenses. The
Applicant conceded that with respect to allegations of lack of sound prediction
and over-broadness, it would likely have to file factual evidence from the
inventors before Pharmascience could be required to file its evidence. The
Applicant asserts it would be able to do that within 30 days. The
Applicant then believes that Pharmascience would reasonably require 90 days (including
the initial 30 days), to serve and file its evidence on invalidity. As that
would considerably narrow the issues, the Applicant believes that no more than
60 days, and conceivably less might be needed for it to file its evidence. The
total time to file the parties’ respective evidence would therefore be 150 days.
That would not, in fact, be any different than if the Applicant filed its
evidence first, in the usual manner. (The Applicant would require 90 days to
file its evidence first and Pharmascience accepted that, subject to its review
of the Applicant’s evidence, it did not foresee that more than 60 days would be
needed for it to file its evidence in response.).
[14]
The
distinction between the two manners of proceeding would be felt in the following
manner: Pharmascience represented at the hearing that the evidence it
currently contemplates bringing on the invalidity issues and the infringement
issues together could likely be adduced by no more than five experts.
On the other hand, the Applicant, having had the experience of litigating this
particular patent as against Novopharm, and even considering the recent case
law limiting the number of experts to five per side without leave of the Court,
indicates that it is more likely than not that it will require more than five
experts, in order to put its best foot forward on all thirteen grounds of
invalidity raised in the notice of allegation. The Applicant accepted however,
that if Pharmascience were to file its evidence first and limits itself to five
experts, it would not only be far more difficult for it to justify being
granted leave to adduce more than five experts, but that it might not be
necessary at all, as this would necessarily imply a narrowing of the issues.
[15]
Yet,
Pharmascience indicated at the hearing that if the Applicant filed its evidence
first and was granted leave to adduce the evidence of more than five experts,
it would be very likely that Pharmascience itself would need and seek leave to
file the evidence of more than five experts, as well as additional time to do
that.
[16]
I conclude
from this that it is indeed more likely than not that if Pharmascience were to
file its evidence first, it would serve to substantially narrow the issues to
be litigated in this matter and that it is likely that fewer expert witnesses
would be needed. The fewer the experts and the narrower the issues, the more
limited the risk that reply evidence will be sought or allowed. Also, experts
are notably busy, and securing their availabilities for cross-examination
represents the bulk of the time usually provided for cross examinations. The
fewer the experts, the less time will be necessary to coordinate, schedule and
conduct their cross-examinations. This results in a less expensive
determination of the issues as well as a more expeditious one.
[17]
Of course,
there can be no certainty in this, especially since both parties can, in the
circumstances of this particular case and depending on the order in which they
would be filing their evidence, argue with some justification that motions for
leave to file reply evidence are likely to be required and might delay the
scheduling and completion of cross-examinations of experts. Nevertheless, I
remain convinced that in the circumstances of this case, it is more likely than
not that reversing the order in which evidence is to be brought, at least with
respect to invalidity issues, would substantially narrow the issues and lead to
a just, less expensive and more expeditious resolution of the issues in this
application. There is, to this, an important caveat: The savings in time and
expenses can only, in my view, be achieved to their full extent if both parties
are committed to this process and embrace it fully, so as to extend to each
other the cooperation and transparency necessary to this purpose. Indeed, the
very complexity of the issues and the awkwardness created by the partial reversal
needed to deal with the allegations of non-infringement, lack of sound
prediction and over-broadness, would require a high degree of cooperation
between the parties.
[18]
Unfortunately,
Pharmascience forcefully objects to the idea that there should be a reversal of
the order in which evidence is to be filed unless the Applicant provides the
following counterparts: 1) That Pharmascience be allowed, as of a
right, to file reply evidence; and 2) That the Applicant abandon and
undertake not to rely on arguments raised in its notice of application as to
the insufficiency of the notice of allegation. The Applicant will not make
these concessions and I do not think its position is unreasonable. It must therefore
be taken that Pharmascience objects to the Applicant’s proposed order of
proceeding. Pharmascience’s objection – and the nature of the concessions it
seeks – are such that in the circumstances, imposing a reversal of the order of
evidence for part or all of the evidence would not foster that climate of
cooperation necessary to realize the full benefit of efficiencies of time.
Such savings of time and expense that would then result from reversing the
order of evidence would likely be less considerable, and militates against
imposing it on Pharmascience.
[19]
I recognize
that there is an undeniable tactical advantage accruing to the party, whoever
it might be, who files its evidence second. That party not only gets to file
its evidence in substantially the way it had anticipated to present and shape
it, but has the added advantage of having the opportunity to adapt it so that it
best opposes its opponent’s; in the absence of any independent evidence of its
own, that party also has the opportunity of weakening and attacking directly
its opponent’s evidence and mining its credibility. These are tactical
advantages, which although legitimate, are neither substantive nor procedural.
Such tactical advantages, it is hoped at least, should not in the end determine
the outcome of the proceedings.
[20]
For better
or for worse, the procedure contemplated by the Rules for dealing with
applications under the Regulations results in the respondent having this
tactical advantage and it seems to me that in order to deprive it of this
advantage without its consent, substantial savings in time, expense and
resources, both of the Court and of the parties would have to be expected.
[21]
As
mentioned above, this matter involves issues of infringement, lack of sound
prediction and inutility for which evidence should be adduced in the normal
order; reversal would therefore apply to only part of the evidence, a procedure
which is, as yet, unfamiliar to the Court and the parties and might for that
reason and absent exemplary cooperation between the parties, require more
interlocutory interventions by the Court.
[22]
Taking the
above into consideration, as well as the fact that the notion of reversing the
order of evidence for some or all the issues in NOC proceedings is still a
novel idea, which some respondents may not have considered when they served
their notices of allegation and therefore may not be prepared to address, I
will not exercise my discretion to set a schedule that would see
Pharmascience’s evidence filed first. This is not to say the Court might not
in future choose to exercise its discretion differently, even in similar
circumstances.
[23]
I will
note, however, that Pharmascience’s position and argument speak of it being
more concerned with preserving the tactical advantage it enjoys from filing its
evidence in response to the Applicant’s than to narrowing the issues in dispute
at an early stage, so as to reduce the number of experts, the expenses thereof,
and likely reduce the time required to bring this application to a hearing. It
is, I think, a choice that Pharmascience has a right to make, but at the same
time, the consequences of that choice should not be visited solely on the
Applicant and on the Court. The Regulations impose a very short
timeframe for the determination of these applications, and in attempting to
shoehorn into that timeframe proceedings which are developing the complexity of
full-blown patent impeachment actions, the Court is too often required to
schedule, hear and determine complex motions under unreasonable pressure of
time, to say nothing of the hearing on the merits. When matters are delayed, it
is the Applicant who must justify an extension of the period of statutory stay,
or lose its opportunity that a prohibition order might issue. The Applicant
further faces the threat of section 8 damages for a longer period of time if
its application is ultimately dismissed. If and when these issues should come
up for determination in relation to these proceedings, I would think it
appropriate that the Court review the manner in which this application in fact
proceeded, and consider what impact Pharmascience’s choice might have had.
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