Date: 20081125
Docket: T-371-08
Citation: 2008 FC
1316
Ottawa, Ontario,
November 25, 2008
PRESENT: The Honourable Mr. Justice O'Keefe
BETWEEN:
ASTRAZENECA CANADA INC. and
ASTRAZENECA AKTIEBOLAG
Applicants
and
APOTEX INC. and
THE MINISTER OF HEALTH
Respondents
Docket: T-372-08
BETWEEN:
ASTRAZENECA CANADA INC. and
ASTRAZENECA AB
Applicants
and
APOTEX INC. and
THE MINISTER OF HEALTH
Respondents
REASONS FOR ORDER AND ORDER
[1]
This is an
appeal by which the applicants wish to have set aside the portion of paragraph 2
of the order of Prothonotary Aalto dated April 24, 2008 which removed from the
timetables (attached as Schedule A to the motions before Prothonotary Aalto)
the reference to Apotex Inc. (“Apotex”) serving evidence first on the issue of invalidity.
[2]
At the
time of Prothonotary Aalto’s decision, there were seven files involved in this
case, three of which were the subject of appeal, but only two are now the
subject of this appeal.
[3]
The
applicants claim that the Prothonotary’s decision fails to give effect to the
recent practice direction of the Chief Justice on proceedings under the Patented
Medicines (Notice of Compliance) Regulations (the “Regulations”) which
included a provision for the reversal of the order of evidence in these
proceedings.
[4]
The applications
were commenced in response to notices of allegation from Apotex pursuant to the
Regulations.
[5]
The
applicants submitted that the allegation in one file is 58 pages long with 5
schedules. Schedule E contains 60 references. The applicants claim that Apotex
relies on the entirety of each document.
[6]
Similar
statements are made about the other two files concerning their length and the
number of references.
[7]
Of the
seven files, Apotex has alleged invalidity in only three files (T-371-08, T-372-08
and T-374-08 which is now discontinued).
[8]
The
applicants stated in paragraphs 4 and 5 of their written representations:
4. Prothonotary Aalto erred in
failing to find that the proposed schedule will lead to the just, most
expeditious and least expensive determination of these proceedings and
dismissing the Applicants’ motion as it relates to the order of evidence on
alleged patent invalidity. As further detailed below, Prothonotary Aalto
proceeded on a wrong principle by basing his decision on numerous irrelevant or
incorrect considerations, including:
(i) how the reversal of order of
evidence might impact upon other pending proceedings involving Apotex’s
esomeprazole magnesium tablets;
(ii) the possibility of confusion
over onus resulting from the reversal of the order of evidence;
(iii) the purported sufficiency of
the allegations; and
(iv) prior litigation involving
different drugs and different patents.
5. Prothonotary Aalto’s decision,
as explicitly contemplated in his Reasons, has the effect of increasing
interlocutory motions and is contrary to the principle of managing proceedings
under the Regulations in the just, most expeditious and least expensive
manner as required by the Practice Direction. Indeed, on this record, the
Prothonotary clearly made a reviewable error in concluding that the Applicants
had not satisfied his stated test (“. . . there must be a reasonable prospect
that there will be a savings in time and expense . . .”)
[9]
Issue
Did the Prothonotary make an error by not
allowing for a reversal of the filing of some of the evidence in respect of the
three proceedings in which Apotex has raised arguments of invalidity?
[10]
Analysis
and Decision
Standard of Review
The Federal Court of Appeal in Merck &
Co. v. Apotex Inc. (2003), 30 C.P.R. (4th) 40 at paragraphs 17 to 19
stated:
17. This
Court, in Canada v. Aqua-Gem Investment Ltd., [1993]
2 F.C. 425 (F.C.A.), set out the standard of review to be applied to
discretionary orders of prothonotaries in the following terms:
[...]
Following in particular Lord Wright in Evans v. Bartlam, [1937]
A.C. 473 (H.L.) at page 484, and Lacourcière J.A. in Stoicevski v. Casement
(1983), 43 O.R. (2d) 436 (Div. Ct.), discretionary orders of prothonotaries
ought not to be disturbed on appeal to a judge unless:
(a)
they 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, or
(b)
they raise questions vital to the final issue of the case.
Where
such discretionary orders are clearly wrong in that the prothonotary has fallen
into error of law (a concept in which I include a discretion based upon a wrong
principle or upon a misapprehension of the facts), or where they raise
questions vital to the final issue of the case, a judge ought to exercise his
own discretion de novo.
18. MacGuigan J.A. went on, at pp.
464-465, to explain that whether a question was vital to the final issue of the
case was to be determined without regard to the actual answer given by the
prothonotary:
[...]
It seems to me that a decision which can thus be either interlocutory or final
depending on how it is decided, even if interlocutory because of the result,
must nevertheless be considered vital to the final resolution of the case.
Another way of putting the matter would be to say that for the test as to
relevance to the final issue of the case, the issue to be decided should be
looked to before the question is answered by the prothonotary, whereas that as
to whether it is interlocutory or final (which is purely a pro forma matter)
should be put after the prothonotary's decision. Any other approach, is seems
to me, would reduce the more substantial question of "vital to the issue
of the case" to the merely procedural issue of interlocutory or final, and
preserve all interlocutory rulings from attack (except in relation to errors of
law).
This
is why, I suspect, he uses the words “they (being the orders) raise questions
vital to the final issue of the case", rather than "they (being the
orders) are vital to the final issue of the case". The emphasis is put on
the subject of the orders, not on their effect. In a case such as the present
one, the question to be asked is whether the proposed amendments are vital in
themselves, whether they be allowed or not. If they are vital, the judge must
exercise his or her discretion de novo.
19.
To
avoid the confusion which we have seen from time to time arising from the
wording used by MacGuigan J.A., I think it is appropriate to slightly reformulate
the test for the standard of review. I will use the occasion to reverse the
sequence of the propositions as originally set out, for the practical reason
that a judge should logically determine first whether the questions are vital
to the final issue: it is only when they are not that the judge effectively
needs to engage in the process of determining whether the orders are clearly
wrong. The test would now read:
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.
[11]
I am of
the view that the question raised in this case is not vital to the final issue
of the case. Accordingly, I must determine whether the 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.”
[12]
The
Practice Direction issued by the Chief Justice reads in part as follows:
A judge or prothonotary will be assigned
as case management judge to each newly institute NOC proceeding. The case management
judge or prothonotary will convene a conference with counsel for the parties
shortly after all parties have appeared in the proceeding or the time for
appearance has expired. At that conference, counsel for the parties will be
expected to address:
1. whether it is appropriate to
reverse the order in which some or all of evidence is submitted, that is, the
respondent (generic) would file some or all of its evidence first and the
applicant (brand) file some or all its evidence in response.
[13]
The Prothonotary
noted in paragraphs 5 and 6 of his reasons for order and order:
[5] It is to be noted that one
fundamental aspect of the Practice Direction is to incorporate the general
principle of both Rules 3 and 385 of the Federal Courts Rules into the
case management of NOC proceedings. That principle is that NOC proceedings are
to be case managed “to ensure the just, most expeditious and least expensive
disposition of the proceeding”.
[6] Thus, in the specific
circumstances of these seven applications, the issue is whether it is
“appropriate” that Apotex file its evidence first on the issue of validity in
three of the seven Applications. It should be noted that Counsel for the
Applicants argues that two of the three patents . . .
[14]
From these
remarks, it is apparent that the Prothonotary considered the reason for the
Chief Justice’s Practice Directive.
[15]
Prothonotary
Aalto’s decision is stated in part in paragraphs 7, 8, 9, 10 and 11:
[7] While the Practice Direction
launches a new era of case management for NOC proceedings to ensure they move
to a hearing in a just and timely manner, it is my view that reversing the
filing of evidence in this series of Applications will not achieve that result.
Thus, the ordinary approach should be followed and the Applicants will file
their evidence first in accordance with the schedule the parties have agreed
to.
[8] In reaching this conclusion, I
have carefully considered the submissions of counsel for the Applicants and the
objectives of the Practice Direction. Counsel for the Applicants argues that
reversing the evidence will meet the policy objectives of the Practice
Direction by not only refining the issues but also reducing the volume of
evidence thus ensuring the “just, most expeditious and least expensive”
determination of these Applications. In particular, counsel points to the fact
that there are 60 items of prior art cited by Apotex in Schedule E to the
Notices of Allegation (“NOA”). Counsel argues that the Applicants are compelled
to deal with all of them as there is no indication whether all or any of these
will be the subject of Apotex’ evidence. Thus, it is argued, it makes good
sense to reverse the evidence as this will result in cost saving and be more
expeditious. However, if it were only three cases and not seven this argument
would be more persuasive. Here, the NOA’s are very detailed and outline with
great specificity exactly what the issues are and what evidence supports
Apotex’ invalidity argument. It can hardly be said that given the history of
litigation and the detailed information contained in the NOA’s that the
Applicants do not know nor have reasonably detailed insight into the position
of Apotex on invalidity. Further, in reviewing Schedule E it is apparent that
many of the references to monographs and texts is limited to but a few pages of
each reference. Thus, while the 60 items, at first blush, may seem like a large
number of items to respond to, the actual pages referred to do not appear to be
that significant especially where there has been a prior litigation history
involving these drugs although perhaps not specifically to two of the patents.
[9] The NOC proceeding is a flawed
procedure in that a party with the onus on a particular issue does not have to
file their evidence first. This approach to some extent encourages parties to
engage in a “cat and mouse” game of what precise grounds and evidence they rely
upon in support of their respective positions until the hearing. The process
does little to narrow the issues.
[10] One approach to clarifying the
positions at an early stage is to provide for the reversing of the filing of
evidence on validity issues. This approach meets the objective of moving the
matter forward in a more cost effective and expeditious way. It is being
ordered more frequently notwithstanding that it removes a “tactical advantage”
from the generic that is advancing the position of invalidity of the patent.
However, to do so there must be a reasonable prospect that there will be a
savings in time and expense [see, for example, Purdue Pharma v. Pharmascience
Inc., 2007 FC 1196]. In my view of this specific series of cases, no such
savings in time and expense will be achieved by requiring Apotex to lead its
evidence first on validity. Indeed, as these cases will be heard by the same
Judge, there is a real possibility of confusion developing during the course of
the hearing over who has the onus on certain issues. This group of NOC
proceedings is complex enough without adding further complications and possible
confusion over the reversal of evidence in three of them.
[11] If the Applicants are
prejudiced by virtue of having to lead their evidence first and do not, for
example, lead evidence on an unexpected point that is raised by Apotex, there
is ample flexibility within the case management regime as contemplated by the
Practice Direction, to counteract such prejudice by, for example, allowing the
filing of reply evidence. Thus, the objectives of “just, least expensive, most
expeditious” can be easily met within the case management regime. In the
circumstances, the motion will be dismissed insofar as it relates to the
reversal of the filing of evidence.
[16]
In Sawridge
Band v. Canada (2001), 283 N.R. 107 (F.C.A.) at
paragraph 11, Mr. Justice Rothstein stated for the Court:
11 We would take this opportunity to
state the position of this Court on appeals from orders of case management
judges. Case management judges must be given latitude to manage cases. This
Court will interfere only in the clearest case of a misuse of judicial discretion.
This approach was well stated by the Alberta Court of Appeal in Korte v.
Deloitte, Haskins and Sells (1995), 36 Alta. L.R. (3d) 56, at 58, and is
applicable in these appeals. We adopt these words as our own.
[...] This is a very complicated lawsuit.
It is the subject of case management and has been since 1993. The orders made
here are discretionary. We have said before, and we repeat, that case
management judges in those complex matters must be given some "elbow
room" to resolve endless interlocutory matters and to move these cases on
to trial. In some cases, the case management judge will have to be innovative
to avoid having the case bog down in a morass of technical matters. Only in the
clearest cases of misuse of judicial discretion will we interfere. In this
case, the carefully crafted orders made by the case management judge display
sound knowledge of the rules and the related case law. In particular, the order
contains a provision that the parties are free to return to the case management
judge for relief from the imposition of any intolerable burden imposed by the
order. No clear error has been shown and we decline to interfere. While there
may be some inconvenience to some of the parties, this does not translate into
reversible error. We are not here to fine tune orders made in interlocutory
proceedings, particularly in a case such as this one.
[17]
I will now
address the applicants’ remaining arguments.
[18]
Prothonotary
Aalto correctly noted that the request for a reversal of filing of evidence applied
to only three files: T-371-08, T-372-08 and T-374-08. The Prothonotary clearly
stated in paragraph 7 of his reasons that he was not going to order a reversal
in the filing of evidence in these applications as such a reversal would not
“ensure they move to a hearing in a just and timely manner”.
[19]
In
paragraph 8 of his reasons, he again addresses the submissions of the
applicants and the objectives of the Practice Direction. In particular, he
addresses the applicants’ submission that Apotex has cited 60 items of prior
art in Schedule E of the Notices of Allegation. For ease of reference, I will
repeat what Prothonotary Aalto stated in paragraph 8 of his reasons:
In particular, counsel points to the fact
that there are 60 items of prior art cited by Apotex in Schedule E to the
Notices of Allegation (“NOA”). Counsel argues that the Applicants are compelled
to deal with all of them as there is no indication whether all or any of these
will be the subject of Apotex’ evidence. Thus, it is argued, it makes good
sense to reverse the evidence as this will result in cost saving and be more
expeditious. However, if it were only three cases and not seven this argument
would be more persuasive. Here, the NOA’s are very detailed and outline with
great specificity exactly what the issues are and what evidence supports
Apotex’ invalidity argument. It can hardly be said that given the history of
litigation and the detailed information contained in the NOA’s that the
Applicants do not know nor have reasonably detailed insight into the position
of Apotex on invalidity. Further, in reviewing Schedule E it is apparent that
many of the references to monographs and texts is limited to but a few pages of
each reference. Thus, while the 60 items, at first blush, may seem like a large
number of items to respond to, the actual pages referred to do not appear to be
that significant especially where there has been a prior litigation history
involving these drugs although perhaps not specifically to two of the patents.
[20]
The
applicants contend that the Prothonotary should not have made reference to the
“series of applications”. I do not agree with this submission as all the
applications are being case managed together by the same Prothonotary. Even if
the Prothonotary was in error on this point, the Prothonotary gave other
correct reasons for refusing to reverse the order of the production of evidence
in the applications that were in issue before him.
[21]
In
paragraph 16 of his reasons, Prothonotary Aalto dealt with the issue of the
removal of a tactical advantage from the respondent, Apotex if the order of
evidence was reversed. I am of the view the Prothonotary was correct in his
analysis.
[22]
With
respect to the applicants being able to lead reply evidence if the need arises,
I cannot see where the Prothonotary made any error in this respect.
[23]
The
applicants submitted that Prothonotary Aalto proceeded on a wrong principle
because his decision appears to be based upon his concern that the judge
hearing the matter would be confused over who has the onus on certain matters
if the order of producing evidence is reversed in the three files. I agree with
the respondents that this is an obiter remark by the Prothonotary and even if
in error, does not give grounds to set aside the Prothonotary’s decision.
[24]
In
summary, I am not of the opinion that the portion of Prothonotary Aalto’s order
that is under appeal was 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”. Consequently, the motion (appeal) by the
applicants is dismissed with costs to the respondent, Apotex.
[25]
I have not
dealt with Court File No. T-374-08 as a notice of discontinuance was filed on
that file.
ORDER
[26]
IT IS
ORDERED that the
motion (appeal) of the applicants is dismissed with costs to the respondent,
Apotex.
“John
A. O’Keefe”
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