Abbott Laboratories v. Canada (Health)

Abbott Laboratories v. Canada (Health)
Court (s) Database
Federal Court Decisions
Date
2008-05-29
Neutral citation
2008 FC 693
File numbers
T-1133-02
Decision Content
Date: 20080529
Docket: T-1133-02
Citation: 2008 FC 693
BETWEEN:
ABBOTT LABORATORIES and
ABBOTT LABORATORIES LIMITED
Applicants
and
THE MINISTER OF HEALTH
and APOTEX INC.
Respondents
ASSESSMENT OF COSTS - REASONS
Charles E. Stinson
Assessment Officer
[1] These reasons, filed in this court file (the T-1133-02 file) with a copy also filed in Federal Court of Appeal file A-510-05 (the A-510-05 file), Federal Court file T-1847-03 (the T-1847-03 file), Federal Court of Appeal file A-59-07 (the A-59-07 file) and Federal Court file T-840-05 (the T-840-05 file), apply in each matter (having the identical style of cause) accordingly. Further to the disposition herein of set-off, a copy is filed in Federal Court of Appeal files A-51-04, A-126-06 and A-308-06 also involving these litigants.
[2] The Applicants (Abbott) variously brought applications pursuant to the Patented Medicines (Notice of Compliance) Regulations, SOR/93-133 (the NOC Regulations) for an order prohibiting the Minister of Health from issuing a Notice of Compliance (NOC) for the generic form of clarithromycin (an antibiotic useful for treating respiratory tract infections) made by the Respondent, Apotex Inc. (Apotex) until after the expiry of certain Canadian letters patent. In the T-1133-02 file, the Court dismissed the application with Column III costs. In the A-510-05 file, the Court dismissed Abbott’s appeal of the decision in the T-1133-02 file with costs. In the T-1847-03 file, the Court dismissed the application. The parties agreed to mid-level Column IV costs, second counsel fees at the hearing and a single set of travel fees for counsel. In the A-59-07 file, the Court dismissed Abbott’s appeal of the decision in the T-1847-03 file with costs. In the T-840-05 file, the Court dismissed the application with mid-point Column IV costs.
[3] Apotex presented a bill of costs for each matter. Abbott presented two bills of costs for an interlocutory application and certain interlocutory appeals to be set off against Apotex’s costs. The respective records are voluminous. Consistent with my approach outlined in paragraph 2 of Halford v. Seed Hawk Inc., [2006] F.C.J. No. 629 (A.O.) [Halford], my account in these reasons of the respective positions of the parties is at times somewhat summary in nature. It is detailed enough for an understanding of the notion of issues between the parties, but should be read keeping in mind that there are many more nuances and details of those issues in the voluminous record of documents and transcripts, all of which I have read and considered. I have not summarized the able submissions of counsel for counsel fee item 24 (travel time of counsel) and I disallow the various item 24 claims, except where conceded, further to my conclusion in Marshall v. Canada, [2006] F.C.J. No. 1282 at para. 6 (A.O.) [Marshall], that there must be a visible direction by the Court to the assessment officer specifically authorizing fees for the time of counsel in transit. Such a direction is not however necessary to assess the associated travel disbursements. The undisputed items of costs are allowed as presented.
I. The T-1133-02 file
Counsel fees (claimed throughout at the mid-point of the available Column III ranges)
Counsel fee items:
2 (Respondent’s record) claimed at 5.5 units ($120.00 per unit) for each of 11 affidavits and for the record itself;
4 (preparation for Abbott’s uncontested motion to file additional affidavits) claimed at 3 units;
5 (preparation for Abbott’s motion to strike Apotex’s reply affidavits) claimed at 5 units;
6 (appearance on Abbott’s motion to strike) claimed at 2 units per hour;
8 (preparation for cross-examination of affidavit) claimed at 3.5 units for each of ten affiants;
9 (attendance on cross-examination) claimed at 1.5 units per hour for both first and second counsel for each of nine attendances and for first counsel for a tenth attendance;
14(a) (appearance of first counsel at the hearing) claimed at 2.5 units per hour;
14(b) (appearance of second counsel at the hearing) claimed at one-half of the item 14(a) amount;
15 (written argument) claimed at 5 units for each of two compendia and at 5 units for the memorandum dated July 4, 2005;
25 (services after judgment not otherwise specified) claimed at 1 unit;
26 (assessment of costs) claimed at 4 units; and
27 (such other services as the assessment officer may allow) claimed at 2 units for preparation of the bill of costs
Disbursements:
Disbursements for travel ($11,140.44); expert witnesses James Hendrickson ($30,616.78), Robert McClelland ($33, 815.43), Michael Cima ($21,650.00), Stan Brown ($68,933.84) and Nicholas Taylor ($71,715.53); telephone ($990.20); telecopies ($776.50); photocopies ($28,117.43); couriers ($2,198.84); parking/cab/mileage ($175.76); transcripts ($16,642.63); process server ($630.00); agent’s fee ($453.80); prior art ($2,024.96); computer time ($2,646.90); file histories ($1,730.00); Quicklaw ($3,261.76); LPIC levy ($50.00) and GST on disbursements ($17,854.24)
A. Apotex’s Position
[4] Apotex argued generally that Abbott vigorously contested every step of these five proceedings involving ten patents in issue. There were difficult and sometimes novel issues such as polymorphism in the T-1133-02 file. Other issues arising in the T-1133-02 file included the sufficiency of the Notice of Allegation, burden of proof, credibility of experts, invalidity, sound prediction and utility. The bill of costs presented at $369,655.99 is reasonable for the work required of Apotex to prevail in this matter. Andrew R. Brodkin, one of the lawyers with carriage of these proceedings, has sworn an affidavit on October 5, 2007 (the T-1133-02 Brodkin affidavit) in support of Apotex’s costs. It confirms the complexity of the issues and the volume of the record, i.e. Application Record (six volumes comprising 1,267 pages) and responding Application Record (12 volumes comprising 2,802 pages). The records included 11 and 7 affidavits on behalf of Apotex and Abbott respectively. As well, it confirms the importance to Apotex of this litigation, i.e. access to a Canadian clarithromycin market of about 65 million dollars per year. Given the patent monopoly extending to 2017, the potential market was about $650 million.
[5] Apotex noted that the T-1133-02 Brodkin affidavit is the evidence of reasonable necessity contemplated by Tariff B1(4) of the Federal Courts Rules, which provides that no “disbursement, other than fees paid to the Registry, shall be assessed or allowed under this Tariff unless it is reasonable and it is established by affidavit or by the solicitor appearing on the assessment that the disbursement was made or is payable by the party.” The Court in Eli Lilly Canada Inc. v. Novopharm Ltd., [2006] F.C.J. No. 1002 (F.C. Proth.) [Eli Lilly 2006] held that:
…15 As for disbursements, the affidavit of Nancy Schuurmans establishes that all disbursements set out in the draft bill of costs presented by Lilly were incurred and invoiced to Lilly in the preparation and for the purposes of these proceedings. The charges appear consistent with the record, showing that Lilly has prepared and filed nine affidavits, of which eight were expert affidavits. I therefore find that Lilly has established the reasonableness of these disbursements on a prima facie basis. While it is true that Lilly did not file invoices for supporting documents, it did not have to do so to establish a prima facie case. Novopharm had the opportunity to cross-examine on Ms. Schuurmans’ affidavit and demand production of the supporting documents. It chose not to do so, and the evidence it tendered in response falls short of showing that the disbursements claimed were not in fact incurred for this matter or were excessive or unreasonable. Disbursements are therefore assessed at $73,277.71….
Here, Abbott did request and receive additional supporting documentation, but it did not cross-examine on the T-1133-02 Brodkin affidavit, meaning that the reasonableness of Apotex’s disbursements have been established on a prima facie basis in the absence of acceptable contrary evidence. Abbott’s challenges to Apotex’s evidence must be discounted because they contradict the long-established rule in Browne v. Dunn (1893), 6 R. 67 (H.L.) [Browne] that the credibility of a witness cannot be impugned if criticisms of his evidence were never put to him for explanations.
[6] Apotex argued that the length (43 pages) of the decision in the T-1133-02 file reflects the complexity of highly technical and scientific pharmaceutical patent litigation involving a variety of allegations of invalidity, all carrying large costs consequences as for example here being the initial case of five cases to gain access to huge market share. The assessment officer in Merck & Co. v. Canada (Minister of Health), [2007] F.C.J. No. 428 (A.O.) [Merck assessment] addressed the circumstances (litigation as here further to the NOC Regulations for access to a large pharmaceutical market) of only a single patent and allowed $605,575.78. On appeal of the assessment, the Court in Merck & Co. v. Apotex Inc., [2007] F.C.J. No. 1337 (F.C.) [Merck appeal] reduced that to $384,686.01. The amount of $369,655.99 sought here is therefore not disproportionate given the market implications.
[7] Tariff B for fee item 2 provides for preparation “of all…respondents’ records and materials.” Apotex argued that its several claims under fee item 2 do not violate the finding in para. 28 of Novopharm Ltd. v. AstraZeneca AB, [2006] F.C.J. No. 854 (A.O.) [Novopharm assessment] denying multiple claims under fee item 1 (wording for an applicant’s record similar to that for fee item 2) on the basis of duplication of costs. That is, the considerable work here for preparation of each of the affidavits was discrete and clearly distinguishable from the work to prepare the Respondent’s Record. Multiple fee item 2 claims (affidavits and record), unopposed in the Merck assessment above (decided by the same assessment officer for the Novopharm assessment) were found reasonable and allowed in paragraph 25, indicating discretion to determine such items on a case by case basis as long as duplicate fees are precluded. Apotex argued alternatively for a fee item 2 allowance for the Respondent’s Record and then a fee item 27 allowance for each affidavit, including multiple allowances for Dr. McClelland and Dr. Brown who each prepared three affidavits requiring discrete work for each. Abbott could have, but did not, move further to Rule 403 for directions precluding these claimed costs.
[8] Apotex noted that the order underlying the fee item 4 claim did not address costs, but argued that there were costs incurred in the cause for the work in reviewing and consenting to the motion. That is, Apotex’s entitlement flows globally from the award of costs in the cause of the judicial review. Relative to the fee item 5 and 6 claims (preparation and hearing of motion respectively), Apotex argued that the provision in the October 7, 2003 Order, that “if the parties cannot agree as to costs they may be separately spoken to,” gives me the jurisdiction to hear submissions and allow the costs sought, the parties not having returned to this outstanding matter in the interim. A motion under Rule 397 would have been inappropriate because reconsideration of the decision was not the issue. Apotex is using the assessment of costs to speak as directed to these costs. Similarly, Rule 403 for directions on costs would have been inappropriate. Apotex was essentially successful in that a small percentage of paragraphs were struck and therefore is entitled to costs of the motion.
[9] Apotex discounted Abbott’s objection, advanced partly per absence of proof of necessity and partly per experts numbering more than five, to fee items 8 and 9 (preparation and appearance respectively) associated with the cross-examination of Dr. Allan William Rey on his affidavit by relying on its prima facie argument above concerning unchallenged reasonableness and by asserting that the Court’s decision did not express any difficulties with his evidence. As well, Abbott did not seek directions limiting Apotex to five experts as sometimes has occurred in other cases and the Court did not so order of its own volition. The Court in Merck & Co. v. Canada (Minister of Health), 30 C.P.R. (4th) 342 (F.C.) [Merck 2003] held on appeal that a prothonotary had erred in law by ignoring and failing to follow existing jurisprudence which had held that the limitation on experts in the Canada Evidence Act, R.S.C. 1985, c. C-5, s. 7, should be applied per issue and not to the case as a whole. Paragraph 47 of Merck assessment above accepted and applied that finding. Paragraph 49 of Merck assessment above found the comment in para. 78 of Pfizer Canada Inc. v. Canada (Minister of Health), [2005] F.C.J. No. 2155 (F.C.) [Pfizer] that expert fees should not “exceed those allowed for lead counsel in preparing for and arguing the case” to simply be the concerns of a single judge for escalating expert fees and not binding in an assessment of costs. In Merck assessment and in Merck appeal, costs for more than five experts were allowed without any expressed concerns that the authorities might limit recovery to five experts.
[10] Apotex noted that Abbott concedes that fee item 9 is allowable as claimed for first counsel, but objects to the claims for second counsel in the absence of a direction by the Court. Although services such as fee item 14(b) specifically require a prior direction, fee item 9 does not. The use of second counsel at the cross-examinations of affiants was reasonable for what was arguably the most important part of the case. Although the T-1133-02 Brodkin affidavit does not address the necessity for second counsel, counsel for Apotex asserted that his appearance before me satisfied the threshold in Tariff B1(4) for proof. In Merck assessment, fee item 14(b) was disallowed in the absence of a prior direction. However, second counsel under fee item 9 was allowed in the absence of a prior direction. In one instance, a patent agent, who is not a lawyer, from the law firm of Ivor M. Hughes LLP (co-counsel with Apotex’s solicitor of record) (the Hughes law firm) performed the necessary functions of second counsel and should be compensated accordingly. Alternatively, he should be compensated at fifty percent under fee item 28 (service permitted by the law society of the province).
[11] Apotex calculated its claim under fee item 14(a) by using ten hours for the duration of the hearing day and characterized Abbott’s suggested reduction of two hours per day as unreasonable for a complicated hearing spanning four days. Counsel was fully engaged during the approach of the commencement time, recess (often not even leaving the hearing room) and lunch and the uncontested prima facie evidence is that the client was billed accordingly. Apotex acknowledged that it did not obtain a prior direction for fee item 14(b), but argued that the record here clearly reflects the use of second counsel.
[12] Apotex argued that it is appropriate to allow for the compendia (used in conjunction with the record as a cross-reference for pages of evidence or legal authorities cited) accepted and used by the hearing judge to deal with a massive record. Their use has been increasing in recent years, i.e. paragraph 1 of the Direction dated October 4, 2007, in Federal Court file T-2131-05 (Janssen-Ortho Inc. v. Apotex Inc.) which required their preparation. Alternatively, it could be allowed under fee item 27 if it is not strictly considered as written submissions within the meaning of item 15.
[13] Before me, Apotex increased its claim for fee item 26, applicable in all five proceedings, to the maximum 6 units because delays on the part of Abbott in service of costs materials complicated Apotex’s work. Apotex argued that fee item 27 should be allowed for preparation of the bill of costs because that work was substantive and very different from the preparation and appearance, claimed under item 26, for an assessment hearing requiring two days.
[14] Apotex noted that supporting materials for disbursements, additional to those in the
T-1133-02 Brodkin affidavit, were provided further to Abbott’s request. Apotex argued that it was difficult or impossible to locate for example, and it is not necessary, every taxi receipt and to document things such as tips. The amount claimed for travel is actually several thousand dollars less than the charges actually incurred and detailed in the evidence. The evidence here exceeds that in Merck assessment. There, the disbursement claims were allowed save for minor reductions associated with third counsel found excessive and included second counsel. Merck appeal upheld this result. Both decisions pointed to my findings in Carlile v. Canada (M.N.R.) (1997), 97 D.T.C. 5284 (T.O.) [Carlile] concerning the allowance of costs in the face of less than exacting proof. The charges actually incurred here were reviewed to remove improper or duplicative items. For example, this sort of litigation required the flexibility of business class fare, but the business class fare incurred for Mr. Brodkin on September 10, 2003, was reduced to a full fare economy claim in the bill of costs.
[15] Apotex noted that some entries on their face might seem high, but in fact address the expenses of two people under a single heading and are therefore reasonable, i.e. Dr. Leonard Chyall’s cross-examination in Chicago in January 2004, the expenses for which are lumped in with those for Jerry L. Atwood. The November 3, 2004 statement from the Hughes law firm shows $1,850.08 as the airfare for Dr. Michael Cima between Boston and Toronto. That seems high for an economy fare, but what obviously happened is that his billing included his airfare, hotel, meals and taxis which were paid and then billed to the client under the misleading reference to airfare.
[16] Apotex relied on its submissions above to argue that the charges for its five experts have been proven prima facie to be reasonable. The expert charges and evidence here are consistent with Merck assessment and Merck appeal where only one of the eight experts, whose account exceeded $300,000.00, was subjected to significant reductions in turn by the assessment officer and appeal judge. The total claim here of $226,731.53 averages $45,346.31, which compares favourably to the approximate average of $35,000.00 for each of Abbott’s three experts. This indicates that Apotex did not unreasonably engage the “Cadillac” of experts. Litigants required to engage experts to address complex matters with great financial ramifications should not have the necessary associated charges limited by hindsight: see Apotex Inc. v. Egis Pharmaceuticals, 4 O.R. (3d) 321 at 331 (Ont. Ct. Gen. Div.) [Egis]. As well, Abbott’s costs for experts should have been lower because the record confirms that the patents have been the subject of some 22 cases involving generic drugs, meaning that its experts would have not required as much work to prepare evidence because of their ongoing familiarity with the patents. Apotex pointed to several instances of the hearing judge’s reliance on the strength of Apotex’s expert evidence and the weakness of Abbott’s expert evidence in ruling in favour of Apotex.
[17] Apotex argued that there is nothing in the record to warrant reducing the $30,616.78 claimed by Dr. James Hendrikson, an amount consistent with the allowances in Merck assessment and Merck appeal. Apotex asserted that the charges for Dr. Robert Brown ($68,933.84) and Dr. Nicholas Taylor ($71,715.43) would have exceeded those for Dr. Cima ($21,650.00) because their mandate, which included considerable experiments and laboratory work, was significantly broader than his, which essentially was the review of relevant literature. Abbott’s evidence on expected charges is irrelevant hindsight. Abbott’s assertion of lack of reference in the decision to the evidence of Dr. Brown or Dr. Taylor is irrelevant because the Federal Court does not make distributive awards of costs. That is, costs are recoverable for the prudent work to prepare for issues not ultimately determinative of the outcome: see Illinois Tool Works Inc. v. Cobra Fixations Cie, 29 C.P.R. (4th) 417 (F.C.A.) [Illinois Tool Works].
[18] Apotex discounted Abbott’s position on multiple affidavits by certain of Apotex’s experts by arguing that Abbott presumably concluded that the strength of Apotex’s initial evidence was such that the Court might rely on it, which it ultimately did, and therefore Abbott sought leave to file reply affidavits. Apotex consented on the condition that it could file supplemental affidavits in response, which did not duplicate its initial evidence. Subsequently, Abbott moved to strike evidence from these supplemental affidavits. The Court allowed only part of that motion and third affidavits were then prepared. The Court ultimately relied on this combined evidence necessitated by Abbott’s conduct. The associated charges were not excessive and not in the nature of those challenged for the expert characterized in Apotex Inc. v. Syntex Pharmaceuticals International Ltd., 2 C.P.R. (4th) 368 (F.C.T.D.) [Syntex] as the “Cadillac” of experts and who coincidentally was the same expert experiencing significant reductions of his charges in Merck assessment and Merck appeal. Rather, the charges here reflected prudent work by counsel for Apotex in perfecting the record.
[19] Apotex objected to the proposed and arbitrary 75 percent reduction of photocopy charges for which the supporting evidence stands uncontradicted. There were three copies required for filing, at least two copies for Apotex’s counsel, a client copy, service copies for two different Respondents and copies of relevant literature and prior art. The size of the record justifies the $28,117.43 claimed.
[20] Apotex noted the finding in Carlile that reductions to nil dollars are unrealistic when it is apparent that real expenditures were necessarily made and the references to Carlile in Merck appeal and in Merck assessment. The prior art charges and other disbursements and the supporting evidence here are consistent with those in Merck assessment upheld in Merck appeal notwithstanding complaints there of excessiveness and unreasonableness. The Court in Merck appeal, in approving the approach by the assessment officer, specifically cited paragraph 69 of Merck assessment which read:
69 As noted above, this proceeding was commenced on May 29, 2003 and a decision was rendered almost two years later. Many of the attached invoices contained within the exhibits to the Affidavit of Andrew R. Brodkin, sworn March 7, 2006, do not contain specific detail regarding these specific disbursements. However, I have considered the factors to advance litigation such as the case at bar which includes the various city and country locations for many of its expert witnesses, the efforts required to assemble and forward pertinent information for the experts’ respective consideration, the various methods required to have the pertinent material before the experts, researching materials and evidence from various sources, the necessary meetings, preliminary and follow-up telephone calls and related correspondence. It seems reasonable to me considering the factors that I have outlined that, over the course of two years, the Apotex Respondent would incur significant expenses to advance this litigation above those normally associated with the overhead expenses of its law office. For these reasons, it is my opinion that the disbursement amounts for computer searches, computer time charges, courier/postage, court reporter/transcripts, meetings, telephone charges and telecopy charges appear to be reasonable. For these reasons, I exercise my discretion and allow a total of $25,247.66 plus applicable GST for these specific disbursements.
For similar reasons and for judicial comity, the disbursements here should be found reasonable on a prima facie basis and allowed with GST. This would include the disbursements for travel by second counsel and by a patent agent assisting lead counsel. There was no evidence of overtime or rush fees for couriers found problematic in Abbott’s authorities.
[21] In rebuttal, Apotex disagreed with Abbott’s reply materials on a number of fronts. Apotex argued that Abbott had options and its choice to commence this litigation, which triggered an automatic 24-month statutory stay preventing Apotex’s access to the market, in response to Apotex’s Notice of Allegation further to the NOC Regulations, now obligates it to indemnify Apotex’s costs as claimed. Abbott could have avoided this by recognizing the limitations of its patents and by not initiating this litigation.
[22] Apotex discounted Abbott’s submissions on possible economies of approach by experts gaining increased familiarity with the core issues as various pieces of litigation unfolded by asserting that the T-1133-02 file unfolded before the other litigation and, in any event, the invention claimed in each patent is new and unique requiring independent work regardless of experience with the active ingredients. The Court relied on all of Apotex’s experts in making its findings on a number of issues. The number and costs of Abbott’s experts are irrelevant for this assessment of Apotex’s sound decisions concerning the experts required. It is prudent to have some overlap in expert testimony in case a given expert experiences difficulties in cross-examination and another expert must bolster the evidence. Abbott’s submissions misstate the result in Merck appeal. There, the Court did not limit costs to $206,411.00, but awarded $384,686.00. In fact, the $206,411.00 was the amount of the reduction of the assessment officer’s allowance, $205,911.00 of which addressed the charges of a single expert found to be disproportionate to the other experts’ charges. No such discrepancy exists or is alleged here.
[23] Apotex argued that Dr. Taylor’s account ($71,715.43) reflected his extensive testing of ingredients relative to the claims in the various patents. His credentials were considerable and his background, independent of the parties, reinforced the integrity and worth of his evidence being the scientific backbone of much of Apotex’s positions in the various proceedings. His charges for consultant work after completion of his affidavit is allowable as occurred in other cases.
[24] Apotex noted that paragraph 16 of AB Hassle v. Genpharm Inc., 34 C.P.R. (4th) 18 at 25 (F.C.) [AB Hassle] discounted the potentially greater work and expense to defend a patent as compared to other types of litigation as justification for higher than normal party-and-party costs, i.e. solicitor-client costs. That essentially addressed counsel fees and is irrelevant for an assessment of disbursements such as experts for which complexity and volume of work as here are clearly relevant.
[25] Although the number of experts in the T-1133-02 file was not strictly an issue, Apotex dealt with it as part of its rebuttal to Abbott’s general submissions on the use of experts throughout the various proceedings. Apotex argued that although the case law may be moving towards displacement of past findings that the Canada Evidence Act, s. 7, which provides that a party be limited to five expert witnesses unless the presiding judge permits more, means five experts per issue as opposed to five experts per the case as a whole, it is not yet there. Therefore, an assessment of costs is too late for an objection, which should have been made earlier before the presiding judge, that Apotex has exceeded the limit on experts. If there was an onus on Apotex, it has been implicitly discharged by the Court’s acceptance and reliance on the experts as led and the number of experts cannot now be a factor in the assessment of costs. In particular, an assessment officer cannot strike expert affidavits already accepted by the Court. The associated charges could be reduced if for example some aspect of the work was deemed irrelevant or done further to faulty instructions from counsel.
[26] Apotex argued that Eli Lilly Canada Inc. v. Novopharm Ltd., [2007] F.C.J. No. 800 (F.C.) [Elli Lilly 2007 1st] indicated the appropriate timing for a challenge to the number of experts. There, the hearing judge in paragraph 5 commented that he was “sure that certain jurisprudence of this Court has led some to believe” that the Canada Evidence Act allows five experts per issue, but that he will “leave that for another day.” He then noted the difficulty for judges in assimilating masses of materials (there were 21 experts before him) and commented that the number of witnesses and volume of documents must be reduced in NOC proceedings. His subsequent award of costs reflected these concerns by restricting the successful party to recovery of the costs of only five experts of its choice. He had previously noted that Pharmascience Inc. v. Canada (Minister of Health), [2007] F.C.J. No. 506 at para. 41 [Pharmascience] held that validity is a single issue and was the only issue before him. His findings did not change the law permitting five experts per issue. His restriction there of five experts was within his discretion as the hearing judge disposing of that NOC proceeding, discretion that is not available to an assessment officer.
[27] The Court in Altana Pharma Inc. v. Novopharm Ltd., [2007] F.C.J. No. 853 (F.C. Proth.) [Altana] decided nine days after Eli Lilly 2007 1st and containing a reference to it, entertained a motion alleging that the applicants had violated the limitation in the Canada Evidence Act by filing 13 expert affidavits. In paragraph 5, the Prothonotary agreed with the respondent’s position that said Act limited each side to five experts for the case as a whole and not five experts per issue, but held that she was bound to apply the existing jurisprudence such as Merck 2003 permitting five experts per issue. The respondent had also argued before her that the applicants had exceeded even the five experts per issue limitation. After some consideration of her jurisdiction, she then held that she could address that concern instead of deferring it to the judge hearing the NOC application. Such jurisdiction is not available to an assessment officer. In her subsequent determination of the number of issues necessary to apply Merck 2003, she referred to paragraph 41 of Pharmascience. Apotex argued that said paragraph 41 did not address the matter of the number of experts relative to the notion of invalidity as a single issue. Apotex argued in any event that invalidity flowing from several distinct patents the subject of multiple proceedings breaks out into discrete issues each of which can be subjected to five experts before triggering the leave requirement of the Canada Evidence Act.
[28] Apotex noted the timing in Eli Lilly v. Apotex Inc., [2007] F.C.J. No. 1367 (F.C.) [Eli Lilly 2007 2nd] of a motion to adduce more than ten expert witnesses, i.e. a few months prior to trial and not on the assessment of costs after the trial. There, the Court in paragraphs 22-27 inclusive surmised that if the attention of the respective hearing judges in Eli Lilly and Co. v. Novopharm Ltd. (1997), 73 C.P.R. (3d) 371 (F.C.T.D.) [Eli Lilly 1997] and Merck 2003 had been drawn to certain other case law which undermined the rationale in the existing jurisprudence allowing five experts per issue, they would or might have found that the limit should be five experts for a case as a whole. The Court then held that it followed that a determination of the number of issues was unnecessary. At most, that is a difference of opinion by the judge in Eli Lilly 2007 2nd which did not change the current jurisprudence permitting five experts per issue and, in any event, such considerations are not within an assessment officer’s jurisdiction.
[29] Apotex agreed with my comment in paragraph 31 of Biovail Corp. v. Canada (Minister of National Health and Welfare), 61 C.P.R. (4th) 33, [2007] F.C.J. No. 1018 (A.O.) [Biovail] that “judges have varied writing styles and do not always set out discrete and explicit statements of their exact use, or not, of experts,” made as part of my reservations concerning the application of the three-part test for experts in Allied Signal Inc. v. Dupont Canada Inc., 81 C.P.R. (3d) 129 (T.O.) [Allied Signal], and argued that an additional factor here perhaps precluding the need to set out a detailed summary and analysis in the respective reasons of the evidence was intervening and binding case law on certain issues as these five pieces of litigation unfolded. As for the other two parts of the test in paragraph 81 of Allied Signal, i.e. the hiring of the expert must have been prudent and reasonable in the circumstances existing at the time and the hiring of an expert must not constitute a blank cheque for costs, Apotex argued that Eli Lilly 2006 is a much more recent authority confirming that evidence such as the T-1133-02 Brodkin affidavit is acceptable prima facie proof of the experts’ charges.
[30] Apotex discounted Abbott’s reliance on Laboratoires Servier v. Apotex Inc., [2007] F.C.J. No. 465 (F.C.) [Laboratoires] by arguing that the motion there was addressed via written submissions thereby precluding the opportunity for counsel to appear as permitted by Tariff B1(4), as was done here, and prove the disbursements. As well, the judge there having heard the matter giving rise to the use of the experts was in the best position, as the three judges here would have been, to entertain the motion for directions on costs. Abbott chose here not to bring such motions and cannot now seek comparable relief via assessments of costs. As the evidence adduced in Merck assessment was much more consistent with the approach here and as the evidence adduced in Laboratoires was not, the approach in Merck assessment, approved by Merck appeal, should prevail for items such as “meetings” rejected in Laboratoires.
[31] Apotex conceded that the principle in Browne may not be absolute, but it discounted Abbott’s position on Browne by arguing that cross-examination on the T-1133-02 Brodkin affidavit could have been useful because it would have required Mr. Brodkin to detail his rationale for his assertions of reasonableness. The Merck assessment referred to Browne and to Eli Lilly 2006 and approved most of the disbursements on the basis of prima facie reasonableness.
[32] Apotex discounted Abbott’s position on Fournier Pharma Inc. v. Canada (Minister of Health), [2007] F.C.J. No. 576 (F.C. Proth.) [Fournier] by arguing as above for Laboratoires that the application in writing precluded the opportunity afforded by Tariff B1(4) for counsel to appear to adduce proof, which was in fact done here partly prompted by questions from me. One aspect of the evidence in Fournier that was similar to the T-1133-02 Brodkin affidavit was the table of disbursements broken down by category and amount. However, Apotex here has advanced via the T-1133-02 Brodkin affidavit and the additional materials requested by Abbott the underlying invoices such as for the experts, none of which was before the Prothonotary in Fournier. The evidence here was comparable to that in Merck assessment. Merck appeal approved the assessment officer’s allowances further to prima facie proof in paragraph 69.
[33] Apotex discounted Abbott’s position further to CCH Canadian Ltd. v. Law Society of Upper Canada, [2004] F.C.J. No. 1399 (F.C.A.) [CCH]; Diversified Products Corp. v. Tye-Sil Corp., 34 C.P.R. (3d) 267 (F.C.T.D.) [Diversified] and Windsurfing International Inc. v. Bic Sports Inc., 6 C.P.R. (3d) 526 (F.C.T.D.) [Windsurfing] concerning photocopies and other miscellaneous disbursements by arguing that the prima facie proof here meets the threshold of those cases and by noting that Abbott’s position conceded $0.25 per page as reasonable and did not assert overhead considerations. Abbott’s proposed reductions are arbitrary and inconsistent with the necessary work in these matters.
[34] Apotex argued that the technical assistance provided by Dr. Taylor and Dr. Cima outside the scope of their affidavits was permissible further to paragraph 29 of Biovail. Biovail also confirmed that an award of costs is not distributive and it did not apply benchmarks in its allowances for experts.
B. Abbott’s Position
[35] Abbott first led some general comments about the five proceedings. Validity of the patents was the primary issue, infringement being only a secondary argument in some instances. Apotex used some of the same experts in the T-1847-03 file and the T-840-05 file, advanced the same prior art and advanced certain other evidence that was identical. Abbott argued that the impetus for this litigation lay in the choice by Apotex to assert a Notice of Allegation in turn forcing Abbott to protect its patent monopoly by initiating a judicial review application.
[36] The irony of Apotex’s assertion that the T-1133-02 file was the first to address issues of crystal polymorphism is that it seeks less costs there than for the subsequent T-1847-03 file and the T-840-05 file by which time said issues would already have been explored. The opposite should have occurred particularly given that certain issues, i.e. onus in NOC proceedings, were more significant in the T-1133-02 file than in the other two files. As well, economy of approach should have occurred in the subsequent proceedings given increasing familiarity with the chemistry of clarithromycin and common challenges throughout to validity. Generally, the expert charges were outrageous, i.e. those in the T-1847-03 file almost equalled the total amount of the bill of costs for the T-1133-02 file. Dr. Taylor’s charges were the most, yet he was not a person skilled in the art. His expertise was unnecessary given Apotex’s capacity for in-house testing. As well, his work after completion of his affidavit improperly equated to technical consultant for counsel.
[37] Abbott argued that the photocopying charges were outrageous throughout with particular regard to the T-1847-03 file and the T-840-05 file. The T-840-05 file, the last of the three NOC proceedings, addressed only two patents and the same issues of validity, yet Apotex advanced more experts than in T-1847-03 file having seven patents in issue. There was duplication of evidence, in some instances verbatim. That the photocopying charges in the T-840-05 file were the highest ($98,335.66) of the three files yet addressed fewer patents undermines Apotex’s position that the volume of the record and amount of photocopying charges are directly related to the requisite number of experts.
[38] Abbott argued further to Rules 409 and 400(3)(a) (result) and to paragraph 50 of Consorzio del Proscuitto di Parma v. Maple Leaf Meats Inc., 22 C.P.R. (4th) 177 (F.C.A.) [Consorzio] that success in the cause does not necessarily mean higher costs and relief from the onus to prove costs. Abbott argued further to Rule 400(3)(c) (importance and complexity of issues) and to paragraph 6 of Aird v. Country Park Village Property (Mainland) Ltd., [2004] F.C.J. No. 1153 (F.C.) [Aird], that it is the legal significance and complexity of issues and not the factual subject matter which warrants increased costs. AB Hassle came to similar conclusions. These proceedings were no more complex than most. Merck appeal allowed costs of $206,411.00 for a matter with approximately C$130 billion annual market sales, nearly twice the annual sales in this case. The assessed costs here should therefore be significantly less than in Merck appeal. Abbott argue