[2]
Pursuant
to Rule 400(1) of the Federal Courts Rules, SOR/98-106, the Court has
“full discretionary power over the amount and allocation of costs”. Rule 400(3)
describes, without limitation, factors that may be considered.
[3]
The
starting point, it seems to me, is that a successful party is entitled to its
costs to be assessed by an assessment officer on the basis of Tariff B at the
mid-point of Column III, as provided for in the Rules (see Rule 407),
together with disbursements that are reasonable and necessary for the conduct
of the proceedings. This would be the basis of assessment unless the judge
provides directions to the assessment officer or takes on the responsibility of
assessing the costs. In this case, the parties are not seeking that I establish
the amount of costs; rather, the parties, in a very principled way, have
provided me with their view of the directions that the Court should provide to
the assessment officer who will undertake the onerous task of assessment.
[4]
In
exercising my discretion, I have had regard to all of the written submissions,
the pertinent jurisprudence and the factors set out in Rule 400(3). A number of
matters warrant particular attention.
I. Result of the Proceeding
[5]
The
Plaintiffs (referred to collectively as Servier) were, for the most part,
successful. In particular, the patent in issue was held to be valid and
infringed. On the other hand, Servier did not enjoy complete success as they
were not successful in establishing that the Defendants (collectively referred
to as Apotex) had induced infringement. Apotex was unsuccessful in the
counterclaim, except that they persuaded the Court that all but two of the
Plaintiffs (ADIR and Servier Canada) had no standing to bring the action.
Apotex also succeeded in demonstrating that certain otherwise infringing
product should be exempted from the infringement claim.
[6]
I note
that both of the issues on which Servier was not successful required
significant time and resources – albeit not as much as alleged by Apotex. Where
an otherwise unsuccessful party has persuaded the Court of the merits of its
position on certain discrete issues, the award of costs may be reduced (see,
for example, Merck & Co. v. Apotex Inc., 2006 FC 631 at para. 13-14,
53 C.P.R. (4th) 69). Apotex suggests that the award should be
reduced to 80% of Servier’s costs of the action as a whole and that it should
also receive 20% of its costs. Servier argues for no reduction and no award to
Apotex. In this case, I believe that it would be just to reduce the award of
costs, although not to the 80% level suggested by Apotex. Apotex’s assessment
that 20% of the trial days were spent on the issues where it was successful is
greatly overstated. Further, Apotex’s request for a separate award of any
portion of its costs would be “double dipping”; the reduction in Servier’s
costs is intended as a surrogate for a calculation of costs for Apotex on those
two issues where it was successful.
[7]
Apotex
seeks reimbursement for its costs (by way of set off) related to establishing
the regulatory and experimental use exemption to infringement. I do not agree
that these costs should be recoverable. The burden was on Apotex to satisfy the
Court on the quantities of the otherwise infringing product. Servier, not
unreasonably, waited until it heard the oral evidence of the witnesses before
it decided whether or not it needed to question the witnesses. No recovery of
these costs by Apotex will be allowed.
[8]
In sum,
Servier should receive an award of costs of 90% of its costs of the action,
subject to the further directions set out in these reasons.
II. Complexity
[9]
Servier
submits that the complexity of the issues at trial, together with the speed at
which the entire litigation was conducted, justifies an award at the high end
of Column V. Apotex asserts that there was nothing exceedingly complex that
would take the costs award out of the normal Column III.
[10]
This trial
dealt with a number of issues that were complex or novel. For example, the
issues of first inventorship, the alleged breach of the Competition Act,
meaning of the concepts of sound prediction and the “invention” were all issues
raised by the Defendants where little guidance could be drawn from existing
jurisprudence or where Apotex was asking the Court to extend established legal
principles. In this regard, I consider the complexity of the issues to be
comparable to that in Merck, above, where Justice Hughes concluded that
the appropriate level was the upper end of Column IV of Tariff B.
[11]
Servier
appears to argue that a higher Tariff is appropriate given the fact that this
matter proceeded quickly to trial. I observe that, although the speed at which
this matter proceeded to trial may have some implications for a cost award (see
Volume of Work), it does not make the underlying issues more complex. Nor does
the fact that an issue was abandoned raise the level of difficulty of that
issue.
[12]
Accordingly,
it would be reasonable to assess costs at the upper end of Column IV.
III. Volume of Work
[13]
With the
cooperation of both parties, this trial proceeded expeditiously; judgment was
rendered less than two years after filing of the Statement of Claim. In total:
·
the
parties produced over 1500 documents;
·
discoveries
lasted 19 days;
·
43 expert
reports were exchanged;
·
the trial
lasted 34 days;
·
pre-trial
motions occupied two days immediately before the trial and many more days
between December 2006 and February 2008;
·
more than
30 witnesses were heard at trial; and
·
314
documents were marked as exhibits.
[14]
Along the
way, there were many events that necessitated extraordinary effort on both
parties (and, I might add, the Court) to maintain the assigned trial dates.
Further, the issues raised in respect of the counterclaim, in particular, were
diverse and, most notably for the competition issues, required the engagement
of counsel with different skill sets.
[15]
As I have
already noted, this does not make the issues at trial more complex. Arguably,
the time requirements for a path to trial that took four years and one that
took less than two years are the same; the difference is that the same volume
of work must be carried out in half the time.
[16]
However,
because of the combination of time pressures and breadth of the issues, the
retained law firms were required to work on more than one issue concurrently.
Thus, each party used more senior lawyers than might have ordinarily been the
case. Accordingly, I will allow Servier to recover costs in relation to 2
senior (first) and 1 junior (second) counsel.
IV. Costs for non-lawyers
[17]
The
Plaintiffs seek recovery of costs for the services of students-at-law and
paralegals. Normally, I would agree with the Defendants that such costs are not
recoverable. However, this trial presented an unusual situation with respect to
one paralegal, Ms. Denise Pope. The parties agreed, prior to the trial, to use
Summation software. The Defendants do not object to reasonable disbursements
relating to the cost of Summation technology during pre-trial procedures and trial
but object to fees for Ms. Pope. The Defendants were aware that Ms. Pope would
be the coordinator of this valuable tool for the efficient management of the
trial. Ms. Pope was called on, by both parties, from time to time to assist in
the loading of documents into the database and the management of the database.
Her services, in my view, extended beyond those normally associated with
non-legal staff. Accordingly, I am prepared to allow a portion of the fees for
her services; recovery of 50% of her fees is appropriate in the circumstances.
V. Conduct of Parties
[18]
Servier
asserts that its work was complicated by certain actions of the Defendants.
They refer to “persistent ambiguity in Apotex’s pleadings” and to an allegation
that “Apotex abandoned a number of its invalidity allegations at the end of the
trial, resulting in Servier having expended considerable resources to respond
to matters which Apotex clearly felt were not necessary to its case”. I do not
accept either of these allegations as supportable in this trial and certainly
as anything that would warrant an increased award of costs. It appears to me
that the abandonment of issues in final argument or earlier was a legitimate
part of the evolution of this trial and certainly does not signify that Apotex
was engaged in conduct that unnecessarily lengthened the duration of the
proceeding. Indeed, in my view, counsel for Apotex acted very responsibly
throughout.
[19]
Servier
submits that Apotex’s knowledge that their activities constituted infringement
“must” be taken into account when assessing costs (Dimplex North America
Limited v. CFM Corporation, 2006 FC 1403, 307 F.T.R. 153 at para. 28
(T.D.), aff’d 2007 FCA 278, 60 C.P.R. (4th) 277). I do not agree.
In effect, Servier seeks punitive damages as part of the award of costs. While
that may have been appropriate in the context of Dimplex case, it is not
warranted here. As noted in the trial reasons, at paragraph 515, consideration
of punitive or exemplary damages has been deferred until after damages or profits
are awarded.
VI. Expert Reports
[20]
The
Plaintiffs seek recovery of all fees and reasonable disbursements (travel,
accommodation and related expenses) of their experts who testified at trial and
reasonable fees and disbursements for the balance of their experts who did not
testify at trial but who prepared expert reports which were served. Apotex does
not object to the reasonable fees and disbursements of experts who testified at
trial but objects to: (a) any recovery for work done by the experts to assist
counsel in case preparation (such as in formulating questions for
cross-examination of the opposing expert witnesses); and (b) any reimbursement
for experts who were not called at trial.
[21]
I am not
prepared to limit the reimbursement of the experts as requested by Apotex. In
my view, any assistance provided by an expert related to his or her area of
expertise is justifiable. That would include assisting counsel in reviewing and
understanding the expert reports from the other side and preparing for cross-examination.
Until we have a trial process that allows experts to openly question each other
on their reports, lawyers must be involved. And, the only meaningful way
counsel can be prepared to act as such middlemen is to have the experts’
assistance. Recovery of the reasonable fees charged by the experts who then
appeared at trial to provide this service is appropriate.
[22]
Reimbursement
for experts not called at trial is more problematic. I do not know how many
experts were retained or whether their reports were relevant to the issues. I
will not permit recovery for experts who were not called at trial.
[23]
In its
initial submissions, Apotex submits that experts’ fees should not exceed rates
of senior counsel. Although such a practice may be seen in some recent cases
before the Court (see, for example, Research in Motion v. Visto Corporation,
2008 FC 618 at paragraph 29), I can see no reason to do so in this case.
Accordingly, I will leave the assessment of the reasonableness of experts’ fees
in the capable hands of the assessment officer.
VII. Other Matters
[24]
Servier
has requested costs, to which Apotex does not object, for fees for the
assessment of costs and reasonable disbursements for Servier’s discovery
representatives who traveled to Canada
to be examined. These costs will be allowed.
[25]
Apotex
objects to costs claimed for Servier’s counsel to travel to France for discoveries. In
principle, I see no reason why reasonable costs of counsel ought not to be
allowed for the France discoveries. The
reasonableness of these costs and disbursements is to be determined by the
assessment officer.
[26]
Some
matters are simply not described in sufficient detail and will be left to the
discretion of the assessment officer. These are the following:
·
Reasonable
expenses relating to computerized research services; and
·
Fees and
disbursements for foreign counsel (in New Jersey,
Germany, Austria and France) related to the rogatory commissions
sought by Apotex. While I believe that, in principle, these costs are
allowable, the reasonableness is left to the discretion of the assessment
officer.
[27]
One item
claimed by Servier that I am not inclined to allow is “reasonable fees and
disbursements for counsel and representatives of Servier to meet during the
conduct of litigation”. I can see no reference to such costs in the Tariff to
cover these imprecisely described costs. They will not be allowed.
VIII. Conclusion
[28]
One hopes
that, in light of these reasons, the parties could now come to agreement on
costs. However, in the event that this is not possible, the assessment officer
is to allow 90% of Servier’s taxed costs and disbursements, at the upper end of
Column IV and in accordance with the directions set out in these reasons.
[29]
The
assessment officer has complete discretion to deal with all matters where I
have deferred certain matters to his discretion and with all matters not
specifically addressed in these reasons.
JUDGMENT
THIS COURT
ORDERS AND ADJUDGES that:
1.
The
Plaintiffs (Servier Canada Inc. and ADIR) are to have their costs throughout
against the Defendants, such costs to be taxed at the upper range of Column IV
of Tariff B and in accordance with the directions contained in these reasons;
and
2.
The total
award is then to be reduced by 10%.
“Judith
A. Snider”
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