Docket: T-2792-96
Neutral citation: 2003 FCT 158
Ottawa, Ontario, this 13th day of February 2003
Present: THE HONOURABLE MR. JUSTICE SIMON NOËL
BETWEEN:
MERCK & CO., INC.
MERCK FROSST CANADA & CO.
ZENECA LIMITED
ASTRAZENECA UK LIMITED and
ASTRAZENECA CANADA INC.
Plaintiffs
(cross-defendants)
and
APOTEX INC.
Defendants
(cross-plaintiff)
REASONS FOR ORDER AND ORDER
[1] This is an appeal by the plaintiffs, pursuant to Rule 51 of the Federal Court Rules, 1998, of the Order of Prothonotary Morneau, dated May 1, 2002, dismissing the plaintiffs' motion seeking answers to the following questions refused during the examination for discovery of Apotex Inc. ("Apotex"):
- Questions 1, 10, 14, 29, 30;
- Question 4;
- Question 18;
- Question 19; and
- Questions 24 to 28.
[2] Pursuant to an agreement between the parties reached after the hearing, the following questions have been withdrawn from this appeal: Questions 1, 14, 18, 24, 25, 29 and 30. Consequently, this Court has not heard submissions on these matters and no decision on these matters will be made.
[3] If the Court does not order the questions referred to in subparagraph 1(i) of the Notice of Motion dated May 13, 2002 answered, the plaintiffs seek an Order confirming that they may proceed to a reference in respect of any lot they establish at trial was in Apotex's possession and for which Apotex fails to establish is either free from infringement or exempt from infringement by virtue of s. 56 of the Patent Act, R.S.C. 1985, c. P-4, or its asserted defence of licence. I have also been advised that the parties have dealt with this request for alternative relief by agreement.
BACKGROUND
[4] The underlying action concerns allegations relating to the infringement and validity of Canadian Letters Patent No. 1,275,350 ("'350 Patent'"), which contains amongst other claims, a class of compound which includes lisinopril, a medicine used for reducing hypertension. The issues in dispute in the main proceeding are confined to whether or not the lisinopril acquired by Apotex is infringing, and whether the '350 Patent' is valid.
[5] Apotex pleaded that the lisinopril it acquired and subsequently sold is non-infringing because it was either (i) made before the '350 Patent' was issued on October 16, 1990, or (ii) was made and sold by a licensee under the '350 Patent' before the licence was extinguished, or (iii) because its use and sale of lisinopril dihydrate is not claimed in the '350 Patent'.
[6] Apotex was examined for discovery on August 24, September 20, September 21 and November 6, 2001. During the examination for discovery, the representative of Apotex refused to answer a number of questions. The plaintiffs sought an order requiring Apotex to answer some of the questions refused.
DECISION OF THE PROTHONOTARY
[7] Prothonotary Morneau was presented with a motion by each of the parties to resolve objections made during the examination for discovery.
[8] At paragraphs 3 and 4 of his Reasons for Order, Prothonotary Morneau discussed the law applicable to an examination for discovery:
As MacKay J. said in Sydney Steel Corp. v. Omisalj (The), [1992] 2 F.C. 193, at 197:
...the standard for propriety of a question asked in discovery is...whether the information solicited by a question may be relevant to the matters at the discovery stage are in issue on the basis of pleadings filed by the parties.
Despite this general statement of principle, there are certain limits to the ambit of the examination for discovery. Inter alia, overly broad questions which amount to a fishing expedition are to be discouraged (see Reading & Bates Construction Co. v. Baker Energy Resources Corp. (1998), 24 C.P.R. (3d) 66 (F.C.T.D.), at 72).
[9] The prothonotary stated at paragraph 5 that "one of the major stumbling-blocks between the parties in the instant motion was the drawing of a line between what is a question relevant at the first stage of determining whether there was an infringement, and what could eventually become relevant at the second stage in the reference on damages." It was recalled that on July 24, 2000, Madam Prothonotary Aronovitch ordered a reference in this case on the issue of damages or profits.
[10] The plaintiffs argued before Prothonotary Morneau that this reference order should be interpreted narrowly and that questions dealing with aspects such as the formulation or sale of lisinopril tablets are relevant at the present stage, not at the reference stage, since these acts are denied by Apotex and the said acts are not excluded by the reference Order at this stage. The prothonotary discarded the plaintiffs' argument and agreed with Apotex's approach. He concluded:
any question tending to further clarify what Apotex might have done with the lisinopril once in possession of it is not relevant at the stage of the alleged infringement. These questions may be relevant at the stage of the reference. What is crucial at this stage is whether at the time the lisinopril was purchased Apotex was in an infringement situation. Actions which it may have taken subsequently regarding this lisinopril - post-purchase actions - cannot alter the decision on this question.
[11] On May 1, 2002, Prothonotary Morneau ordered that Apotex answer some of the questions it refused and commit to undertakings given during the examination for discovery. However, the balance of the motion was dismissed and part of the dismissal Order has now been appealed to this Court.
Standard of review
[12] The standard of review governing appeals of discretionary orders of prothonotary is well established. In Canada v. Aqua-Gem Investments Ltd., [1993] 2 F.C. 425 (F.C.A.), at paragraph 95, MacQuigan J.A. explained what was the standard review to be applied by a motion Judge when reviewing a discretionary decision of a Prothonotary:
Following in particular Lord Wright in Evans v. Bartlam [1937] A.C. 473 (H.L.) at page 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 facts; or
b. they raised questions vital to the final issue of the case.
ISSUES
[13] Did the Prothonotary exercise his discretion based on a wrong principle or a misapprehension of the facts?
SUBMISSIONS AND ANALYSIS
Questions 10
[14] At the hearing, the plaintiffs first took issue with question 10, dealing with Apotex's Inventory list. The plaintiffs want the inventory list(s) so they can identify the quantity and the movement of lots of lisinopril. This will allow them to determine which lots were used for resale, which lots were used for experimental purposes or which lots were sitting on the shelf, and help answer the instability issue claimed by Apotex in its new amendments (see: Prothonotary's Order of May 2, 2002, T-2792-96). The plaintiffs submitted that the Prothonotary erred in finding that the reference Order relieved Apotex of the obligation to produce clearly relevant documents. It is argued that the terms of the reference Order clearly state that unless documents relate solely to damages or profits, it does not restrict Apotex's oral or documentary discovery obligations. Accordingly, the plaintiffs alleged that the requested documents do not relate solely to either the quantum of damages or the defendant's profits arising from any infringement, but rather pertain to the infringement itself.
[15] For the purpose of convenience, the relevant terms of Prothonotary Aronovitch's reference Order are reproduced here:
1. This matter may proceed to trial without requiring the parties to adduce evidence at trial or to conduct discoveries on any issue of fact relating solely to:
(a) the quantum of damages arising from any infringement by the Defendant of Canadian Patent No. 1,275,350, or
(b) the Defendant's profits arising from any infringement by the Defendant of Canadian Patent No. 1,275,350.
...
4. This Order does not in any way restrict the Parties's oral or documentary discovery obligations or from filing evidence at trial regarding issues arising in this proceeding not listed in paragraph 1.
[16] The issues of liability have been bifurcated from the issues relating to the plaintiffs' entitlement to relief in the form of either damages or profits, and the quantum of any such award should the plaintiffs succeed in the liability phase. In that event, there will be a separate round of documentary production, additional discoveries will be convened, and all the issues relating to the scope of any infringing activities will be canvassed. Accordingly, at this stage in the proceeding, documents and questions related to the quantum of any relief to which the plaintiffs may be entitled, or related to when or where Apotex formulated and sold lisinopril, are irrelevant.
[17] Prothonotary Morneau concluded that the issue turned on the status of the lisinopril when it was acquired by Apotex. He found Apotex was either infringing or non-infringing when it acquired the lisinopril, and nothing that occurred after the lisinoprilt had been acquired by Apotex would affect the decision on the infringement. The prothonotary concluded that along with the other questions, question 10 relates to information on sales and exports of lisinopril, and since these acts are post-purchase, the questions need not be answered. This exercise of discretion flows from the prothonotary's interpretation of the bifurcation order. In my opinion, the prothonotary did not apply a wrong principle or a misapprehend the facts. I do not think the prothonotary's exercise of discretion was clearly wrong.
Question 4
[18] Prothonotary Morneau found that question 4, which asked for production of "shipping documents, records or bills of lading, or customs documents for lisinopril acquired by Apotex", need not be answered on the basis that "the fact that the plaintiffs already have "receiving logs" gives them the relevant information they were asking". The plaintiffs submitted that the requested documents relate to the date of acquisition of lots of lisinopril.
[19] Apotex claimed it had already produced copies of the relevant documents recording the dates on which all the lisinopril it acquired was actually received in inventory, and copies of the invoices for the lisinopril acquired which showed the date of purchase. The plaintiffs admitted having received the receiving logs.
[20] The Prothonotary concluded that "wanting to see other documents which may contain similar information seems [...] to be in the nature of a fishing expedition so as to possibly find differences in the information. The plaintiffs submitted that a request for clearly relevant documents prepared by a third party, as opposed to handwritten entries by employees of Apotex, to confirm or disprove the veracity of the information, cannot be characterized as a "fishing expedition".
[21] In my opinion, Prothonotary Morneau, as the Case Management Prothonotary assigned to this case, is well positioned to exercise his discretion with regard to the requested shipping documents. He is aware of what is in the file, and what documents were produced by the parties up to this point. Therefore, if the Prothonotary thinks that what is requested from Apotex amounts to a fishing expedition, and that all there is to see from the different documents is if there are differences in the information, I believe that he did not base his decision on a wrong principle, nor did he misapprehend facts on this issue, he simply exercised his discretion based on what will be relevant and necessary at trial. Thus he did not err in law.
Question 19
[22] Question 19 sought the production of the supplier's certificates of specification (or analysis) for the lisinopril received by Apotex, during the period 1989 to 1991. The plaintiffs argued that these certificates would show when the lisinopril was manufactured and might show whether the lisinopril has been reprocessed or purified. The plaintiffs submitted that if the lisinopril did not meet the specification of Health Canada and consequently had to be reprocessed, it would not qualify for exemption under s. 56 of the Patent Act.
[23] The Prothonotary stated he was persuaded by Apotex's submissions that the question did not have to be considered further and that it would not have to be answered. He did not provide any further reasons for his decision. The same applied for questions 24 to 28.
[24] I agree with Apotex's submission that the plaintiffs' request is entirely speculative. As alleged before the prothonotary, it seems that Apotex has already produced all relevant documents in its possession, and there is no document recording any reprocessing. It was a matter of discretion for the prothonotary to deem these certificates irrelevant to the issues at play. Moreover, with regard to the plaintiffs' allegation that the certificate would show the date of manufacture of the acquired lisinopril, the receiving logs and the supplier invoices already show that Apotex actually received it before the '350 Patent' was issued. Accordingly, the date of manufacture must necessarily have also been before the patent was issued.
Questions 26 to 28
[25] Questions 26 to 28 concern the relationship between Apotex and Delmar Inc., one of the alleged sources of lisinopril. When discoveries resumed in September 2001, the plaintiffs asked Apotex to inquire whether Delmar would provide copies of documents relating to the manufacture of the pre-patent lisinopril acquired by Apotex. In response, Apotex argued there is no reason why the plaintiffs cannot make this request themselves and in any event, the documents in question are not in Apotex's possession, power or control as the terms are defined in Rule 223(3) of the Federal Court Rules.
[26] It should be noted that the prothonotary did not give reasons other than the ones contained in paragraph 22 of his decision.
[27] The plaintiffs referred to Justice Hugessen's (as he is now) decision in Eli Lilly and Co. v. Apotex Inc., [2000] F.C.J. No. 154 at paragraph 5, where he stated the following:
It seems to me that where one may reasonably expect, because of a relationship existing between a party and some third party, that a request for information will be honoured. It is proper to require that party to make such a request. Here it is my view that the relationship between the purchaser of a bulk drug intended for human consumption and the supplier of that drug is such that a request for the process information which was filed with the Minister of Health would be honoured.
[28] Although this case is quite clear in its meaning, and although the prothonotary did not follow it, I do not believe that he wrongly exercised his discretion for that matter. In my view, the Eli Lilly case can somewhat be differentiated from the case at bar on the issue of "entitlement" of the documents requested from Apotex. In the Eli Lilly case, the requested documents were filed to obtain a Notice of Compliance with the Minister of Health, whereas in this instance, the documents requested were not used for that purpose. Furthermore, there is no indication that such request would be honoured by the supplier.
[29] All of the questions at issue in this appeal were properly refused. As Case Management Prothonotary on this file, Prothonotary Morneau was well acquainted with the issues raised by the pleadings, and the way in which all the discoveries had been conducted in relation to those issues. As Apotex submitted, Prothonotary Morneau was qualified to assess the merits of the plaintiffs' motion. Further, he exercised his discretion in accordance with accepted legal principles in deciding that these inquiries were either not relevant, or were otherwise unnecessary to pursue at this stage of the proceeding.
[30] For all of the above reasons, I am of the view that the Prothonotary' s order with regard to the above questions was not clearly wrong. He based his discretion on his knowledge of the file, on the party's submissions, and on the fact that there was a reference order in the case. Thus I am of the opinion that his decision was not based on a wrong principle, nor on a misapprehension of facts.
ORDER
THIS COURT ORDERS THAT:
This motion is dismissed. Costs to follow the cause.
"Simon Noël"
Judge
FEDERAL COURT OF CANADA
TRIAL DIVISION
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-2792-96
STYLE OF CAUSE : MERCK & CO. INC, AND MERCK FROSST
CANADA INC. & Co., & All and
APOTEX INC.
PLACE OF HEARING : Ottawa, Ontario
DATE OF HEARING : January 7th, 2003
APPEARANCES :
Mr. Gunars A. Gaikis For Plaintiffs - Syngenta Ltd
Ms. Denise Lacombe For Plaintiffs AstraZeneca UK
Ms. Judith A. Robinson For the Plaintiffs - Merck & Co.
Ms. Frédérique Amrouni For Merck Frosst Canada & Co.
Mr. David M. Scrimger FOR THE DEFENDANT
Ms. Nicole Roth
SOLICITORS OF RECORD :
SMART & BIGGAR
Barristers & Solicitors FOR THE PLAINTIFFS
Toronto, Ontario
Goodmans FOR THE DEFENDENT
Barristers & Solicitors
Toronto, Ontario