Eli Lilly Canada Inc. v. Novopharm Limited

Eli Lilly Canada Inc. v. Novopharm Limited
Court (s) Database
Federal Court Decisions
Date
2008-03-03
Neutral citation
2008 FC 281
File numbers
T-1048-07
Decision Content
Date: 20080303
Docket: T-1048-07
Citation: 2008 FC 281
Ottawa, Ontario, March 3, 2008
PRESENT: The Honourable Mr. Justice Lemieux
BETWEEN:
ELI LILLY CANADA INC., ELI LILLY AND COMPANY,
ELI LILLY COMPANY LIMITED and ELI LILLY SA
Plaintiffs
(Defendants by Counterclaim)
and
NOVOPHARM LIMITED
Defendant
(Plaintiff by Counterclaim)
REASONS FOR JUDGMENT AND JUDGMENT
I. Introduction and background
[1] The defendant Novopharm Inc. (Novopharm) appeals Prothonotary Tabib’s November 15, 2007 decision in which she granted part of the relief sought by Novopharm in a motion, pursuant to Rule 227 of the Federal Courts Rules, 1998 (the Rules) for a further and better affidavit of documents from each of the plaintiffs and other consequential relief including cross-examination with leave of the Court the plaintiffs affiants.
[2] Novopharm argues Prothonotary Tabib made three errors of law and several palpable and overriding errors of fact that necessitate a de novo examination of Novopharm’s motion by this Court. The alleged errors of law are:
(1) A first error by endorsing and adopting a piecemeal and partial approach to discovery under the Rules i.e. permitting oral discoveries to proceed before Novopharm has had the benefits of the full documentary discovery process through the affidavit of document provided for in the rules.
(2) A second error by misinterpreting and misapplying the train of inquiry jurisprudence flowing from Compagnie Financière et Commerciale du Pacifique v. Peruvian Guano Co., (1882), 11 Q.B.D. 55 (C.A.). In particular, while the Prothonotary correctly stated the test, it is argued she set the bar impermissibly high by requiring Novopharm to prove the contents and usefulness of documents that had not been produced and therefore never seen by Novopharm.
(3) A third error relating to her treatment of relevance and her conclusion that whether relevant documents had to be produced before oral discovery was a matter within her discretion.
In terms of her factual errors, Novopharm asserts her findings were made in absence of evidence. Such findings included ones related to what documents had been produced and conclusions of fact that entire classes of documents could not contain relevant documents.
[3] Rules 222 to 233 of the Rules deal with discovery of documents under the heading in the Rules “Discovery and Inspection”. Subsection 222(2) of the Rules contains a definition of relevancy for the purposes of the preparation of an affidavit of documents while section 227 provides for sanctions where the Court is satisfied an affidavit of documents is inaccurate or deficient. Rule 223 compels the listing of all relevant documents in an affidavit of document which must be produced within 30 days after the close of pleadings. These three provisions read:
Interpretation
222(2) For the purposes of rules 223 to 232 and 295, a document of a party is relevant if the party intends to rely on it or if the document tends to adversely affect the party's case or to support another party's case.
Time for service of affidavit of documents
223. (1) Every party shall serve an affidavit of documents on every other party within 30 days after the close of pleadings.
Contents
(2) An affidavit of documents shall be in Form 223 and shall contain
(a) separate lists and descriptions of all relevant documents that
…
Sanctions
227. On motion, where the Court is satisfied that an affidavit of documents is inaccurate or deficient, the Court may inspect any document that may be relevant and may order that
(a) the deponent of the affidavit be cross-examined;
(b) an accurate or complete affidavit be served and filed;
(c) all or part of the pleadings of the party on behalf of whom the affidavit was made be struck out; or
(d) that the party on behalf of whom the affidavit was made pay costs.
[Emphasis mine.]
Pertinence
222(2) Pour l’application des règles 223 à 232 et 295, un document d’une partie est pertinent si la partie entend l’invoquer ou si le document est susceptible d’être préjudiciable à sa cause ou d’appuyer la cause d’une autre partie.
Délai de signification de l’affidavit de documents
223. (1) Chaque partie signifie un affidavit de documents aux autres parties dans les 30 jours suivant la clôture des actes de procédure.
Contenu
(2) L’affidavit de documents est établi selon la formule 223 et contient :
a) des listes séparées et des descriptions de tous les documents pertinents :
…
Sanctions
227. La Cour peut, sur requête, si elle est convaincue qu’un affidavit de documents est inexact ou insuffisant, examiner tout document susceptible d’être pertinent et ordonner :
a) que l’auteur de l’affidavit soit contre-interrogé;
b) qu’un affidavit exact ou complet soit signifié et déposé;
c) que les actes de procédure de la partie pour le compte de laquelle l’affidavit a été établi soient radiés en totalité ou en partie;
d) que la partie pour le compte de laquelle l’affidavit a été établi paie les dépens.
[Je souligne.]
[4] The heart of Prothonotary Tabib’s ruling is contained in paragraph 22 of her reasons for decision cited as 2007 FC 1195:
[22] Thus, I conclude that, whether on the wide “train of inquiry” test, or a narrower reading of Rule 222(2), Novopharm is not entitled to disclosure of every document in Lilly’s possession, power or control that relate to the facts pleaded, whether or not they can directly or indirectly assist its case. Novopharm is not entitled to disclosure of every document in Lilly’s possession so that it might itself consider whether they might be useful. Unless it can establish that Lilly’s vetting process was inadequate, Novopharm must be satisfied by the sworn statements appearing in Lilly’s affidavits of documents, to the effect that the affiant has diligently caused the records to be searched and has made appropriate inquiries and disclosed, to the full extent of his or her knowledge, information and belief, the documents that would tend to adversely affect Lilly’s case or advance Novopharm’s. [Emphasis mine.]
[5] Counsel for Novopharm and Lilly both agree the essence of motion before Prothonotary Tabib was properly characterized by her at paragraph 4 of her decision where she wrote:
[4] All of the documents Novopharm alleges exist and have not been produced ultimately relate to the issue of the side effects profile of olanzapine. All of Novopharm’s arguments as to the relevance or usefulness of these documents were to the effect that these documents would establish, one way or the other, or would lead to a train of enquiry that would have the effect of establishing, one way or the other:
(a) whether olanzapine had, as of the priority date, the filing date or the date of
issuance of the patent, the advantages claimed in the patent;
(b) whether, as an objective fact as of the present date, olanzapine in fact has
those advantages; or
(c) whether up to and until the issuance of the patent, Lilly knew of facts going
to those issues that it failed to disclose to the Patent Examiner. [Emphasis mine.
[6] In other words, the issue before the Prothonotary was a single issue centered on the advantages or disadvantages of olanzapine as claimed in the ‘113 Patent and did not touch upon the numerous other grounds of invalidity asserted by Novopharm against the ‘113 Patent in this proceeding.
[7] On the issue of relevance, counsel for Lilly before the Prothonotary limited his opposition to Novopharm’s motion for further production arguing that, inter alia, the existence of the advantages or disadvantages claimed for olanzapine in the ‘113 Patent could only be measured on the basis of the state of knowledge of persons skilled in the art at the very latest at the laid open date and any knowledge gained after that date can simply not be considered by the Court and was therefore not relevant. On this point, the Prothonotary ruled against Lilly finding she could not conclude it was plain and obvious Novopharm’s position that the advantages of olanzapine disclosed in the Patent could be assessed as of the date of the trial was devoid of success. Lilly did not appeal the Prothonotary’s determination that relevant documents could encompass those relevant to whether the advantages or disadvantages in fact exist in accordance with the state of the art after the laid open date.
[8] This action was commenced on June 6, 2007 by the plaintiffs claiming Novopharm had infringed certain claims in Canadian Letters Patent No. 2,041,113 (the ‘113 Patent) covering the medicine olanzapine marketed by Eli Lilly Canada Inc. (Lilly Canada) under the brand name ZYPREXA in tablet and other forms. In its defence and counterclaim, Novopharm pleads the invalidity of ‘113 Patent on a number of grounds including the lack of the advantages claimed for the ‘113 Patent.
[9] The other plaintiffs are Eli Lilly and Company Limited (Lilly UK) the United Kingdom affiliate of Eli Lilly and Company (Lilly US). Lilly U.K. is the owner of the ‘113 Patent; it manufacturers, distributes and sells ZYPREXA products including to Lilly Canada. The plaintiff Eli Lilly SA (Lilly SA), is a company incorporated under the laws of Switzerland. It manufactures and distributes pharmaceutical products including the manufacture and sale of bulk olanzapine to Lilly U.K. Lilly U.S. has a licence under the ‘113 Patent from Lilly U.K. to manufacture, distribute and sell products under this patent in, inter alia, Canada with the right to permit other companies to distribute in Canada. In this regard, Lilly U.S. has consented to the manufacture, distribution and sale of ZYPREXA products by Lilly Canada in Canada. Collectively the plaintiffs are referred to as Lilly.
[10] The application for ‘113 Patent was filed by Lilly in Canada on April 24, 1991 and was issued by the Canadian Patent Office on July 14, 1998. It is a selection patent which means it is based on a selection from related compounds derived from an original compound. The claimed compound olanzapine is said to be useful in the treatment of disorders of the central nervous system such as schizophrenia, schizophrenic form diseases, acute mania and mild anxiety disorders. The plaintiffs claim olanzapine has atypical anti-psychotic properties and an improved side effect profile over previously used anti-psychotic medicines and is a new product within the meaning of section 55.1 of the Patent Act.
[11] Lilly Canada was involved as the first person in two NOC proceedings before this Court on the ‘113 Patent. On April 27, 2007, my colleague Justice Gauthier in a decision cited 2007 FC 455 granted Lilly Canada an order prohibiting the Minister of Health from issuing a Notice of Compliance (NOC) which would have enabled Apotex Inc. to market in Canada its olanzapine product. Apotex had alleged the invalidity of the ‘113 Patent on grounds of selection, anticipation, obviousness and double-patenting. Justice Gauthier found none of Apotex’s allegations were justified.
[12] On June 5, 2007 my colleague Justice Hughes, in a decision cited 2007 FC 596 dealing with the same patent but connected to a Notice of Allegation (NOA) by Novopharm, refused to prohibit the Minister of Health from issuing a NOC to Novopharm for its Novo-olanzapine product. Novopharm’s olanzapine product has been on the market since the issuance of the NOC. Justice Hughes found the ‘113 Patent invalid on a ground not raised by Apotex – the sufficiency of disclosure in the ‘113 Patent.
[13] The plaintiffs allege Novopharm developed a generic version of olanzapine and on or about 2004 filed an abbreviated new drug submission (NDS) with the Minister of Health to obtain its NOC to enable it to sell its version of olanzapine which infringes the ‘113 Patent.
[14] Novopharm filed its statement of defence and counterclaim on July 6, 2007. As noted, it alleged the ‘113 Patent was invalid on a number of grounds including that its advantages had been overplayed and its side effects have been underplayed making reference to the fact ZYPREXA has been the subject of product liability lawsuits in the United States in which the claim is that ZYPREXA does not have the asserted advantages of: “marked superiority” and a “better side effects profile” but instead causes a number of specified dangerous side effects.
[15] Very early on in the action, upon the plaintiffs’ motion, Prothonotary Tabib ordered on June 20, 2007 it to be a specially managed proceeding and, subject to any direction or order of the case management judge or prothonotary, set forth a schedule of further steps to be taken in the action. The schedule fixed dates for the filing and the service of Novopharm’s statement of defence and counterclaim, the plaintiffs’ reply and defence to counterclaim and, in particular, set September 14, 2007 as the date for serving and filing of respective affidavits of documents with the ability of each party to serve on the other party a request for production of documents which they believe exists, are in the possession, power or control of the other party and should have been listed in their opponent’s affidavit of documents but were not with a requirement that the other party respond to such request within twenty one days following the service of such request. [Emphasis mine.] Examinations for discovery of a representative of the defendant was ordered to be conducted by the plaintiffs during the week of October 15, 2007 for a duration of one day. Discovery of the representatives of the plaintiffs was contemplated for November or December 2007. The plaintiffs served their affidavit of documents in late August 2007.
[16] The feature in the Prothonotary’s initial case management order whereby the parties were obliged to request from one another the correction of deficiencies in the document discovery process was described to the Court as being “novel”. After Lilly served its affidavit of documents, Novopharm’s counsel served on Lilly two requests for additional productions which were, in part, positively responded to by Lilly’s counsel resulting in the productions of:
· Lilly’s NDS to Health Canada and the availability of Lilly’s new drug application (NDA) to the FDA in the United States. In particular, Lilly’s NDS is a 90,000 page document (not including the clinical trial data) and included data on 89 animal studies using olanzapine and 50 human clinical trial studies).
· The production of the communications between Lilly and its Canadian patent agent.
· The statement of claim filed by plaintiffs in the product liability litigation.
[17] Remaining unsatisfied, Novopharm then brought a motion for an order compelling the plaintiffs to file a better affidavit of documents and other consequential relief, a motion heard by the Prothonotary on October 15, 2007.
II. The construction of the plaintiffs’ affidavit of documents
[18] Central to an understanding of Novopharm’s motion for the production of a further and better affidavit of documents is how Lilly constructed its affidavit of documents in this action. Prothonotary Tabib had from both sides several affidavits and cross-examinations thereon before her on this issue. The main affidavit of documents was filed jointly by Lilly U.K. and Lilly U.S. [Emphasis mine.]
[19] This joint affidavit was based on documents produced in a proceeding in the U.S. District Court commenced by Lilly in April 2001, based on U.S. Patent No. 5,229,382 (the U.S. Patent) issued in 1993, equivalent of the ‘113 Patent, in order to prohibit the entry onto the market of generic olanzapine products to be manufactured and marketed by three U.S. generic companies, Zenith Goldline Pharmaceuticals Inc. (Zenith), Dr. Reddy’s Laboratories Ltd. (Dr. Reddy) and Teva Pharmaceuticals U.S.A. Inc. (Teva) (hereafter the U.S. action). The validity of Lilly’s U.S. Patent was put in issue by the U.S. generics.
[20] The U.S. action was heard in early 2004; it took less than a month; judgment was rendered in favour of Lilly in the spring of 2005 upholding the validity of its U.S. Patent, a decision upheld by the U.S. Court of Appeal in 2006 with the leave recently denied by the Supreme Court of the United States.
[21] In the U.S. action, there were three levels of discovery productions:
· Discovery pursuant to Notice Pleadings. Allegations in Notice Pleadings, unlike in Canada, do not limit the scope of discovery and are not confined to relevant documents because parties can request and conduct discovery on issues that are broader than those in the pleadings and are not tied to relevance such as are found in Rule 222 of the Rules. In the U.S. action, according to the affidavit of Mark Feldstein, a U.S. attorney acting for Lilly and responsible for the production of Lilly documents in the U.S. action, informs us that extensive discovery took place in which the defendant generic companies sought wide ranging discovery from Lilly. Lilly produced close to one million pages of documents pursuant to the Notice Pleadings process. Mr. Feldstein instructs us if, in the U.S. action, the Canadian relevance rule applied to affidavit of documents, the volume of documents produced would have been “greatly reduced”;
· The second level of production in the U.S. action was production pursuant to the Unified Trial List (the UTL). This process yielded 522 Lilly documents representing 300,000 pages. The UTL represents a compilation of all documents that any of the parties to the U.S. action might seek to rely upon at trial. Mr. Feldstein says at trial, any of the parties could have objected to the admissibility of documents on the UTL including on the basis such documents were not relevant. He stated Lilly U.S. specifically filed pre-trial objections based on the relevance of certain documents on the UTL it had produced in response to the broad ranging discovery requests of the defence;
· The third level of documents are the Admitted Trial List exhibits (ATL). This list of documents, as its name connotes, is made up of those documents which each of the parties to the U.S. action agreed could be entered and marked as an exhibit at trial.
[22] David Stemerick is in-house counsel at Lilly US. He deposed two affidavits describing how Lilly U.S. constructed its affidavit of documents for the purposes of the Canadian action. He deposed Lilly’s approach was to start with the “extensive production” which had already taken place in the U.S. action where “on many of the same issues, such anticipation, obviousness, fraud based on the dog study, etc., arose in both pleadings.” He continues stating: “In the U.S., however, the volume of documents produced was very extensive, even though at the end of the day nearly all of the documents that had been produced were of no value to either party at trial.”
[23] At paragraph 8 of his reply affidavit sworn in response to Novopharm’s motion for the production of a further and better affidavit of documents, he deposed as follows (plaintiffs’ motion record, volume 1 page 305):
“8. Knowing that nearly all of the U.S. production was not relied upon at trial, it was decided that the best approach to comply with Rule 222 of the Federal Court Rules would be to determine:
(a) What documents each of the plaintiffs had that it wanted to
rely upon; and
(b) What documents in the productions would be of assistance to
support Novopharm’s case or affect Lilly’s case.”
[24] On August 24, 2007, in this action, it was David Stemerick who swore the joint affidavit of documents for Lilly U.S. and Lilly UK. He referred to Schedule 1 of his affidavit which lists schedules A, B and C as being all of the documents, or bundles of documents, that are in Lilly’s possession, power or control and for which no privilege is claimed. Schedule A contain the Lilly documents in the ATL in the U.S. action; Schedule B headed – confidential – are documents from the UTL and Schedule C are eight documents including a certified copy of the ‘113 Patent, the file history of the ‘113 Patent, three agreements between Lilly companies, sample invoices and copies of the two decisions in the U.S. action. [Emphasis mine.]
[25] In his reply affidavit, Mr. Stemerick deposed the Schedule A documents to Lilly’s affidavit of documents were Lilly’s documents listed in the ATL on the basis that they were documents that could possibly be of assistance to support Novopharm, either to prove their case or to challenge Lilly’s case or affect Lilly’s case and at paragraphs 11 to 15 he continued:
“11. In an abundance of caution, it was decided to go beyond the documents of Schedule A and include all Lilly originating documents in the U.S. Unified Trial Exhibit List. These documents were provided to Novopharm as Schedule B to the extent that they were not part of Schedule A. The Unified Trial Exhibit List is a subset of the documents produced as part of the discovery process. This subset was a compilation of every document that any party to the U.S. proceeding may rely on at trial.
12. It is my belief that Schedule A and B includes all possibly relevant documents in this proceeding. My belief in this regard is based on the fact that many experienced trial attorneys, including attorneys representing companies that are related to Novopharm, had carefully reviewed all of Lilly’s productions and the U.S. Defendant’s productions, and based on the extensive oral discovery of Lilly witnesses in the U.S. proceeding, concluded that every document that they might rely on at trial was included in the UTL. [Emphasis mine.]
13. It can be readily understood that Schedules A and B do not include every document from the U.S. Unified Trial Exhibit List. Omitted from Schedule B are documents that do not originate at Lilly. For instance, while the Unified Trial List includes documents produced by Dr. Reddy’s, Lilly did and could not include Dr. Reddy’s documents as:
(a) These are not Lilly documents; and
(b) Any production in this case would be contrary to the provisions of the protective order under which Lilly was provided these documents.
14. Further, a large number of the documents in the Unified Trial List are articles from the public scientific literature, some of which were previously produced in the s. 55.2 proceeding [The Lilly Novopharm NOC proceeding in this Court previously referred to]. I am advised by my Canadian Counsel and verily believe that prior art is Canada has to be specifically pleaded in the Defence. As such I did not see the need for Lilly to produce these documents. Finally, as discussed below expert reports prepared for the U.S. case were also omitted. [Emphasis mine.]
15. While there is a very large volume of additional documents that were produced in the U.S. litigation, I see no value in producing them in Canada considering that not a single one of these documents excited enough interest to be included by any of the U.S. attorneys on the Unified Trial List. Thus while they may relate to olanzapine, they neither support Novopharm’s case nor affect Lilly’s case. [Emphasis mine.]”
[26] Mr. Stemerick’s reply affidavit was largely in response to the affidavit deposed to by Jeffrey Ward who was lead counsel for Zenith in the U.S. action. He had been asked to review the joint affidavit of documents of Lilly U.S. and Lilly U.K., as provided by Mr. Stemerick, to assess whether all documents relevant to the pleadings in Lilly’s possession, power or control had been identified and disclosed in this action. He was of the view they were not. As I understand Mr. Ward’s affidavit he holds this view based on the following features of the U.S. action:
· It commenced in April 2001 with Lilly U.S. complaint; the discovery phase began in earnest in February 2002 and took 18 months. The trial commenced on January 26, 2004 and was completed in February 2004 with a decision rendered in the spring 2005 and subsequent appeals;
· The U.S. Patent No. 5,229,382, the ’382 Patent issued in 1993 whereas the Canadian Patent ‘113 issued in 1998;
· While the two actions have many of the same issues, Novopharm raised additional issues which would not be covered by any production in the U.S. action. In particular, Novopharm’s emphasis in its pleadings on the advantages and disadvantages of olanzapine were substantially different in the way this issue was raised because of the timing of the filing of the Canadian Patent and the fact the Canadian Patent was issued much later than the U.S. one; [Emphasis mine.]
· Mr. Ward gave examples of Lilly’s production deficiencies based on different strategies, the timing of the U.S. and the Canadian action and the fact the U.S. action was prosecuted much earlier such that the trial lists in the U.S. action were prepared in late 2003 and early 2004;
· Mr. Ward did not understand why Lilly U.S. had not listed in its Schedule 1B in the Canadian action all documents on the UTL because the parties in the U.S. action considered them relevant noting that many expert reports were on the UTL and since some of these experts would appear in the Canadian action, the production of these expert reports were relevant. He referred to the fact a vast number of pages of production was produced in the U.S. action which were not listed in the Canadian action. He stated Lilly U.S. had not produced relevant clinical trial data mentioning a 1997 Lilly paper entitled “Safety of Olanzapine” involving 2,500 patients on file, data which was important to Novopharm because the Canadian Patent was still in prosecution whereas the U.S. Patent had issued. He was of the view that Novopharm, because it had pleaded that olanzapine does not have the characteristics asserted in the ‘113 Patent, a fact which he said was substantiated by data contained in Lilly’s clinical and toxicological databases making all Lilly clinical trial data on the 2,500 patients relevant.
[27] Mr. Ward’s conclusions were as follows:
“43. In sum, the Zenith case and the case against Novopharm are not the same. The
case against Novopharm raises many of the same issues, though in different ways, than the Zenith case argued almost four years ago. Novopharm’s defence and grounds of invalidity seem to incorporate many of the grounds asserted in the Zenith case but also raises new grounds that were not part of the Zenith case and that would require further disclosure.
44. Even if the Zenith case were an appropriate starting point for disclosure in this case, it is plain that Eli Lilly has not produced all of the relevant documents in its possession, power and control, nor even lists of those documents. If Eli Lilly here claims only to have 20 boxes of relevant documents, they are about 286 boxes short as compared to the Zenith case productions. I believe that all of the documents produced in the Zenith case are relevant and should have been produced in the Novopharm case.
45. Lastly, Eli Lilly’s statements that they have produced the raw clinical data
on 2,500 patients is, as far as I know, not accurate. I do not see any document described in any of the affidavits provided that would incorporate that raw data.” [Emphasis mine.]”
III. Prothonotary Tabib’s November 15, 2007 decision
[28] Prothonotary Tabib, who is case managing this action from the very start, rendered a considered, thorough and nuanced decision which may be summarized as follows.
[29] First, after noting Novopharm had brought this motion for a further and better affidavit of documents prior to any oral examination for discovery having been held, she stated Novopharm: “has the burden of establishing that documents in the possession, power or control of Lilly exist, are relevant and have not been listed in Lilly’s affidavits of documents or subsequently produced pursuant to the request for further production the parties had been required to exchange by a previous scheduling order. [Emphasis mine.]”
[30] She then engaged in a lengthy review of the jurisprudence whether “relevance” as newly defined in Rule 222 of the Rules in 1998 for the purposes of Lilly’s document disclosure obligations was more narrow than under the previous rules which had adopted the test set out by the U.K. Court of Appeal in Compagnie Financière et Commerciale du Pacifique v. Peruvian Guano Co., (1882), 11 Q.B.D. 55 in which the words “a document relating to any matter in question in the action” were interpreted to encompass every document which not only would be evidence upon any issue but also which, it is reasonable to suppose, contains information which may – not which must – either directly or indirectly enable the party requiring the affidavit either to advance his own case or to damage the case of his adversary” with the reference to the words “either directly or indirectly because a document can properly be said to contain information which may enable the party requiring the affidavit either to advance his own case or to damage the case of his adversary, if it is a document which may fairly lead him to a train of inquiry, which may have either of these two consequences.” [Emphasis mine.]
[31] She canvassed the jurisprudence developed by Prothonotary Hargrave under new Rule 222 ultimately who had concluded that the Peruvian Guano test had not been changed with the enactment of the new rules insofar as what must be covered by an affidavit of documents. Prothonotary Tabib left for another day whether she would have come to the same conclusion as Prothonotary Hargrave whether or not Rule 222(2) “effectively narrows the definition of relevance set out in Peruvian Guano notably, by somewhat narrowing the “train of inquiry” test”.
[32] She did agree with Prothonotary Hargrave’s assessment the concept of advancing an opponent’s case or defeating one’s own is central to relevance both on the Peruvian Guano test and on the wording of Rule 222(2). For the purposes of the motion before her, she formulated the test as follows:
“Unless the party producing the affidavit intends to rely on a document at trial, it is not obliged to disclose it unless “it is reasonable to suppose” that the document would undermine its own case, advance its opponent’s, or would “fairly lead him to a train of inquiry, which may have either of these consequences”.
[33] As noted Prothonotary Tabib expressed her conclusions which were reproduced at paragraph 4 of these reasons. Counsel for Novopharm position on the test was that it was correctly framed but that ultimately Prothonotary Tabib did not apply it correctly. Counsel for Lilly thought that the train of inquiry element of the test had been dropped under the new rules but he stated this had no consequence for the motion at hand and accepted for the purposes of this case it had been correctly applied by the Prothonotary.
[34] She then stated the question which arose is whether Lilly’s approach in determining which of a wider class of documents should be disclosed was reasonable and sufficient. She described the three levels of disclosure previously discussed in these reasons and noted Lilly’s affidavit evidence was that, having considered the issues in the U.S. and in the present proceeding, its affiants were satisfied all documents that might possibly relate to the issues in this action had been part of the initial U.S. disclosure and that it was reasonable to assume any document which might undermine its case or assist an opponent’s case on these same issues had been selected by Lilly’s opponents and included in the UTL and in the ATL.
[35] She then said Novopharm’s position was as a matter of legal principle, Lilly’s disclosure had to include all documents relating to the issues pleaded, thus all of the documents in the initial U.S. production. She observed Novopharm did not argue, other than through the specific categories discussed later in her reasons, that the basis upon which Lilly proceeded was unreasonable or that applying that method resulted in relevant documents being omitted. She was satisfied, in the circumstances of this case, Lilly’s affiants did not proceed unreasonably and referring to Mr. Stemerick’s affidavit in which he stated he was satisfied a diligence search had already been conducted for the purpose of the U.S. litigation and that he made inquiries, which she found appear on their face to be reasonable and appropriate, to determine which of those documents corresponded to Rule 222(2) definition concluding: “I can find no fault with this approach generally.” [Emphasis mine.]
[36] However, she cautioned it may be this approach proved in practice unreliable or insufficient in that it failed to “catch” relevant documents and stated a review of the documents which Novopharm contends are missing would be indicative of whether, despite an apparently reasonable method of identifying documents, Lilly missed relevant documents and should therefore be required to conduct a reassessment of its documents. She then proceeded to consider the specific categories of documents which Novopharm contends are missing. They were:
· Clinical trial documents;
· Internal memos and documents relating to clinical trials;
· Correspondence between Lilly and Health Regulators in Canada and in the US;
· Certain documents from product liability litigation related to olanzapine where Lilly was a defendant;
· Expert reports from other litigation; and
· Prior art produced in the U.S. action.
She went on, in the balance of her reasons, to consider each of those categories. I discuss her findings separately for each.
i) Clinical trial documents
[37] These documents she ruled is relevant and said Lilly had identified and produced them up to and until 2001. Beyond 2001, Prothonotary Tabib was satisfied such documents existed and likely related to side effects profiles that may tend to advance Novopharm’s position. She ordered their production in the following terms: “Lilly has the continuing obligation, and will in any event be specifically ordered, to review its records to determine whether clinical trial documents created after 2001 exist and have not been disclosed, and if so, to include them in a further and better affidavit of documents.” [Emphasis mine.]
ii) Internal memos and documents relating to clinical trials
[38] On the basis of the record before her, she was satisfied such documents created prior to 2001 “would have been included in the initial documentary productions in the U.S. litigation and have already been considered for relevance and included as necessary in Lilly’s affidavit of documents” but not those created post 2001. She was of the opinion: “the only fact in issue to which post-2001 internal comments or communications might relate is the objective existence or non-existence of the advantages disclosed or claimed in the patent.” She stated this issue was clearly a matter of objective scientific fact, to be established by expert evidence on the basis of the data which Lilly has or will disclose.” She was of the view “what Lilly or its employees think or believe as to the conclusions to be drawn from the data is irrelevant and cannot advance Novopharm’s case unless Lilly has made on those issues corporate statements amounting to admissions” but she considered internal communications between employees cannot be reasonably supposed to include corporate statements.” She could not see how internal documents of Lilly commenting on the clinical trial data be reasonably supposed to lead to a train of inquiry that would advance Novopharm’s case or hurt Lilly’s. She so felt because Novopharm’s motion record did not suggest how that might be and because such documents would lead back to the original data to which they relate and as this data has or will be provided: “a document that has no use but to refer to it can have no discernable benefit to Novopharm.” She stated: “Even if these internal memoranda could be construed as technically included in the definition of Rule 222(2) because they lead back to the clinical trial data, I would exercise my discretion to relieve Lilly from their disclosure.” [Emphasis mine.]
[39] However she noted Novopharm argued such communications might contain statements damaging to Lilly such as admitting that certain information was known to Lilly at the time of the prosecution of the patent, but not disclosed to the Patent Examiner. She ruled: “Obviously, if any internal documents of Lilly contain such statements, the particular documents are relevant and have to be disclosed.” and ordered: “It should therefore, as part of its continuing obligation of disclosure, Lilly to make reasonable inquiries or take reasonable steps to ensure that internal documents that might contain such damaging admissions are reviewed and disclosed if they exist.” [Emphasis mine.]
iii) Correspondence between Lilly and Health Regulators
[40] The correspondence between Lilly and the Food and Drug Administration in the United States or Health Canada focuses on product monographs and labelling changes to include warnings as to the side effects of olanzapine. The evidence before her suggested such documents had been disclosed pre-2001 but not post-2001.
[41] Such correspondence was not ordered to be disclosed since she was satisfied this class of documents would not advance Novopharm’s case, undermine Lilly’s or be susceptible of leading to a train of inquiry having either result because based on Novopharm’s evidence: “this correspondence would squarely be based on and would merely interpret or discuss the clinical data which Lilly has already or will be disclosing.” which led her to state: “It cannot reasonably be supposed that Lilly has, in this correspondence, admitted to any other side effects than those against which publicly available labels and product monograph warn and since the only information to which this correspondence might be supposed to lead is the same clinical data and reports which have or will be produced.”[Emphasis mine.]
iv) Documents from products liability litigation
[42] Novopharm identified eight documents which Lilly had not listed in its affidavits of documents which stem from product liability actions in relation to ZYPREXA which Lilly faces. These documents were covered by confidentiality orders in the U.S. but were leaked to the New York Times and posted on the internet. Three of these documents are post-2001 whereas five of the documents precede the issuance of the ‘113 Patent in 1998.
[43] She ordered the disclosure of the pre-1998 documents (R to V) finding they contained information that may tend to advance Novopharm’s case because they may directly or indirectly establish the state of Lilly’s knowledge of side effects prior to the issuance of the patent and stated the fact: “that five relevant documents created before 2001 could be identified by Novopharm indicates that the process used by Lilly to search for and identify relevant documents may not have been adequate. Lilly will be required to review its documents with a view of ensuring that all relevant documents are disclosed.” [Emphasis mine.]
[44] She stressed that documents “R” to “V” were relevant because of the specific information they contain. She said: “Having specific regard to document “R”, other documents that can be described as being in the same class of documents (i.e. correspondence) cannot reasonably be supposed to necessarily contain that type of information, and may be irrelevant.” She added “Novopharm is only entitled to disclosure of the documents from this class of documents that are relevant; it is entitled to know that Lilly has reviewed its documents to identify and disclose any documents which may contain similarly relevant information. As mentioned before, Novopharm is not entitled to have disclosure of the entire class of documents to satisfy itself that relevant documents have not been overlooked.”
[45] She did not order the production of documents labelled “O”, “P” a