Date: 20030226
Docket: T-1018-01
Neutral citation: 2003 FCT 243
Ottawa, Ontario, February 26th, 2003
PRESENT: The Honourable Mr. Justice O'Reilly
BETWEEN:
NOVARTIS PHARMACEUTICALS CANADA INC.
And NOVARTIS AG
Applicants
and
APOTEX INC., and
THE MINISTER OF HEALTH
Respondents
REASONS FOR ORDER AND ORDER
[1] The applicants seek an order dismissing their application on grounds of mootness, the respondents having withdrawn their Notice of Allegation of April 23, 2001 which gave rise to these proceedings. The respondent Apotex agrees that the matter is now moot. An order dismissing the application is therefore granted.
[2] The applicants also seek costs in a lump sum of $76,533.62 or, in the alternative, costs on a solicitor and client basis. The lump sum figure represents 75% of the applicants' counsel fees and 100% of their disbursements. The respondent does not agree. It seeks costs in its favour or, alternatively, no award of costs or, in the further alternative, costs in favour of the applicants on a party and party scale.
[3] These proceedings arise out of a Notice of Allegation generated by the respondent on April 23, 2001 alleging non-infringement of the claims of Novartis's Canadian Patent 1,332,150. However, two previous Notices of Allegation in relation to the same patent had been served on the applicants and prohibition proceedings commenced by the latter were ongoing at the time (T-1266-99; T-1337-99). The first was dismissed by Blais J. on October 18, 2001 and the second was dismissed by Tremblay-Lamer J. on June 13, 2002. The latter proceeding was characterized as an abuse of process on the basis that the applicants did not "appear to have any interest in proceeding with this matter on its merits" (per Tremblay-Lamer J.) both decisions were appealed by the applicants, but the appeals became moot when the Minister of Health issued a Notice of Compliance to the respondent on July 18, 2002.
[4] The applicants rely on case law that appears to indicate that an applicant is entitled to solicitor and client costs in a situation where a proceeding has been rendered moot by virtue of the withdrawal of a Notice of Allegation: Merck Frosst Canada Inc., et al. v. Canada (Minister of National Health and Welfare), et al. (1997), 76 C.P.R. (3d) 501 (F.C.T.D.). In that case, Rothstein J. ordered the respondent Apotex to pay the applicant's costs on a solicitor and client basis after it had withdrawn its Notices of Allegation. Apotex argues here that Merck Frosst is distinguishable on two bases. First, Apotex had agreed to pay solicitor and client costs in that case. Second, Merck Frosst did not involve a situation in which there were ongoing proceedings respecting the validity and potential infringement of the same patent. Accordingly, says the respondent, the matter of costs in this matter should be considered in light of the full context of the proceedings between the parties. It cites in its favour Janssen Pharmaceutica Inc. v. Apotex Inc. (1000), 179 F.T.R. 221 (F.C.T.D.); AB Hassle v. Canada (Minister of National Health and Welfare) (1997), 72 C.P.R. (3d) 318 (F.C.T.D.); and AstraZeneca Canada Inc. v. Canada (Minister of Health), [2001] F.C.J. No. 960 (T.D.).
[5] The circumstances before me are unlike those in the cases cited by the applicants. There, Notices of Allegation were withdrawn in the absence of other ongoing and related proceedings between the parties. Awarding solicitor and client costs to the applicants, who had been put to unnecessary expense and trouble, appears to be justifiable in those situations. Here, the Notices of Allegation related to a matter that had been the subject of proceedings between the parties for some time, the substance of which was familiar to the applicants.
[6] At the same time, however, the respondent has not fully explained the need for the Notice of Allegation on which these proceedings are based. It says that the "Notice of Allegation herein asserted non-infringement in respect of the claims of the '150 Patent, the same claims that were, in combination, the subject of the Invalidity and Non-Infringement Allegations and the consequential proceedings, Court File Nos. T-1266-99 and T-1337-99. The legal and factual basis of the within Notice of Allegation was, however, separate and distinct from the Invalidity Allegation and the Non-Infringement Allegation." (Para. 15, Motion Record of the respondent, Apotex Inc.)
[7] I have no doubt that the applicants were put to unnecessary expense on the basis of the Notice of Allegation issued by Apotex on April 23, 2001. However, I do not think costs on a solicitor and client basis are justified by the respondent's conduct or the circumstances in which that Notice of Allegation was delivered. Further, the amounts sought by the applicants as a lump sum cost award appear excessive in those circumstances. An award of costs to the applicants on a party and party scale strikes me as an appropriate outcome of this matter.
ORDER
IT IS HEREBY ORDERED that
(a) this application is dismissed on grounds of mootness; and
(b) the applicants are entitled to costs, including costs on this motion, on a party and party scale in accordance with Column III of Tariff B.
"James W. O'Reilly"
J.F.C.C.
FEDERAL COURT OF CANADA
TRIAL DIVISION
NAMES OF SOLICITORS AND SOLICITORS OF RECORD
DOCKET: T-1018-01
STYLE OF CAUSE:
NOVARTIS PHARMACEUTICALS CANADA INC.
And NOVARTIS AG - and - APOTEX INC., and
THE MINISTER OF HEALTH
MOTION DEALT IN WRITING WITHOUT
THE APPEARANCE OF PARTIES: Ottawa, Ontario
REASONS FOR ORDER OF: The Honourable Mr. Justice O'Reilly
DATED: February 26, 2003
WRITTEN REPRESENTATIONS BY:
Jennifer Wilkie FOR THE APPLICANTS
Anthony G. Creber
Andrew R. Brodkin FOR THE RESPONDENTS
Nathalie Butterfield
SOLICITORS OF RECORD:
Gowling Lafleur Henderson LLP
160 Elgin St., Suite 2600
Ottawa Ontario FOR THE APPLICANTS
Goodmans LLP
250 Yonge Street, Suite 2400
Toronto, Ontario FOR THE RESPONDENTS