Federal Court Decisions

Date: 20070309

Docket: T-1499-04

Citation: 2007 FC 273

Ottawa, Ontario, March 9, 2007

PRESENT:     The Honourable Mr. Justice Hugessen

BETWEEN:

SANOFI-AVENTIS CANADA INC. and

 SANOFI-AVENTIS DEUTSCHLAND GmbH

Applicants

and

APOTEX INC. and

 THE MINISTER OF HEALTH

Respondents

REASONS FOR ORDER AND ORDER

[1]               The respondent, Apotex Inc. (Apotex) moves for a special Order respecting costs following the dismissal, by Order on consent dated 27 June, 2006, of the applicants' Sanofi-Aventis Canada Inc. and Sanofi-Aventis Deutschland GmbH (Aventis) application for a prohibition Order pursuant to the Patented Medicines (Notice of Compliance) Regulations (SOR/93-133, as amended to SOR/99-379) (the Regulations). Since that dismissal was stated to be with costs to Apotex without more, Apotex would normally be entitled by reason of Rule 407 of the Federal Courts Rules (SOR/98-106) to costs calculated in accordance with Column III of Tariff B plus allowable disbursements. The motion seeks costs on a solicitor and client basis, or some proportion thereof or, at the least, under Column V of Tariff B.

[2]               The principal ground advanced by Apotex in support of the motion is the allegedly improper conduct of Aventis in waiting until virtually the eve of the scheduled hearing date for its application to realize that its chances of success were forlorn and consenting to a consent disposition as described above. In fact, it is quite clear from the record that the triggering event for Aventis’ decision to fold its tent was the rendering by the Federal Court of Appeal of a unanimous judgment in the case of Pharmascience Inc. v. Sanofi-Aventis Canada Inc., 2006 FCA 229 (Pharmascience), a unanimous decision rendered on June 21, 2006. There may arguably have been some ambiguity in the state of the Court of Appeal's case law prior to that date as to the question whether consumption by patients of a generic drug for a patented use, without any inducement or procurement by the manufacturer of that drug, beyond merely selling it, could justify an order prohibiting the Minister of Health from granting a Notice of Compliance to the generic manufacturer in respect of the same drug; however, that ambiguity was clearly resolved by the decision and the Court made it crystal clear that that mere sale, without inducement or procurement, could not justify a prohibition under the Regulations in respect of a patent solely for use of that drug.

[3]               Almost immediately upon receipt of the decision in Pharmascience counsel for Aventis initiated conversations with counsel for Apotex with the result that the hearing of Aventis’ application, scheduled for the following week, did not take place and the consent Order of dismissal was entered (subject to Aventis’ right to appeal).

[4]               In my respectful view, the present motion is wholly misconceived and devoid of merit.

[5]               There is an important public interest in encouraging parties to settle their disputes prior to trial thereby saving both public and private expenditure of time and money. They should not be mulcted in costs when they do so. In my judgment there was nothing whatever reprehensible in Aventis’ waiting until the results of the Pharmascience appeal (to which it was itself a party) before deciding to abandon the fight against Apotex. Once that appeal was decided, Aventis acted with commendable promptness and neither the Court nor Apotex were put to any further or unnecessary expense or effort.

[6]               A secondary ground urged by Apotex, namely that it has suffered damage from being delayed in coming to market by the very existence of Aventis’ proceedings, is equally without merit. If damage has been suffered by reason of the Aventis application under the Regulations, a motion for elevated costs is not the proper vehicle for asserting such claim.

[7]               There will be no Order for increased costs beyond what has already been granted by Column III of Tariff B and reasonable expenses. If the parties cannot agree as to the amounts in play, they may go before an assessment officer to have their disagreement settled in the usual way.

[8]               I should add that, in my view, this result is entirely compatible with the very recent decision of the Federal Court of Appeal which granted significantly increased costs to Apotex ($25,000 inclusive of disbursements of a little over $4,000) upon the dismissal of Aventis’ appeal from the consent dismissal on the merits herein. (See A-575-05, Judgment of 5 March, 2007).

[9]               In the first place, that appeal was clearly forlorn in the light of the Pharmascience decision which was rendered prior to the appeal being launched. Secondly, and very significantly, a quick perusal of the motion record before the Court of Appeal reveals that there was conduct by Aventis’ counsel in the carriage of the appeal which was deserving of some sanction by the Court. Here, as I have indicated, there is none.

[10]           In my view, Apotex should bear the costs of the present motion which I fix at $1,000 inclusive of disbursements.

ORDER

THIS COURT ORDERS that

1.         The motion is dismissed with costs to Aventis of $1,000 inclusive of disbursements.

“James K. Hugessen”

FEDERAL COURT

SOLICITORS OF RECORD

DOCKET:                                          T-1499-04

STYLE OF CAUSE:                          SANOFI-AVENTIS CANADA INC. et al
v. APOTEX INC. et al

PLACE OF HEARING:                    TORONTO, ONTARIO

DATE OF HEARING:                      MARCH 7, 2007

REASONS FOR ORDER

AND ORDER:                                   HUGESSEN J.

DATED:                                             MARCH 9, 2007

APPEARANCES:

SOLICITORS OF RECORD: