Costs in a Contested Patent Infringement Action
Sanofi-Aventis Canada Inc. v. Apotex Inc., 2009 FC 1138 (Snider, J.)
Sanofi-Aventis Canada Inc. v. Novopharm Limited, 2009 FC 1139 (Snider, J.)

November 6, 2009

Gunars A. Gaikis and Sheldon Hamilton for the Plaintiffs, Sanofi-Aventis Canada Inc. et al.
Anthony Creber, Jennifer L. Wilkie and Marc Richard for the Plaintiff, Schering Corporation
Harry B. Radomski and Karen Murdock for the Defendant, Apotex Inc. (T-161-07 only)
Keya Dasgupta for the Defendant, Novopharm Limited (T-1161-07 only)

After a patent infringement trial (decision reported at 2009 FC 676) in which the allegations against Apotex (T-16107) and Novopharm (T-1161-07) were heard together, the Court ordered costs generally in favour of Apotex and Novopharm as Sanofi was unsuccessful in its actions. Since the two rulings were mostly the same, this summary is of both cost decisions.

In the decisions, the Court rejected Sanofi’s argument that the Defendants’ costs be reduced because Apotex was not successful on sound prediction, double patenting, Gillette defence, best mode or first inventorship and Novopharm unsuccessful on patent construction, and double patenting. Justice Snider did not see divided success since Sanofi started the action to validate the patent and enjoin Apotex and Novopharm, and Sanofi had lost. While there may be cases where arguments are so specious as to constitute an abuse of process, which was not the case in this proceeding.

The costs associated with the issues, which the Defendants raised in their counterclaim and on which there was extensive discovery and several motions, but were not pursued at trial, were discounted by a factor of 10%.

The Court ordered that costs at the upper end of Column IV were appropriate since it recognized “the significance and complexity” of the various issues in a patent trial.

The Court allowed two first counsel and two second counsel fees for preparing and attendance at trial due to the pace of the action and the need to have multiple lawyers working on multiple issues at the same time. For pre-trial steps, costs and disbursements for one first counsel and one second counsel were allowed.

For experts, costs were allowed for the experts that appeared at trial and for assisting counsel in reviewing and understanding opposing parties’ expert reports.

Costs for articling students, clerks, consulting scientists, summation technology and research services were all rejected as being part of normal overhead of litigation.

More than half of the trial days were devoted to remedies, an issue that Apotex and Novopharm had resisted bifurcating but the issue was ultimately not considered by the judge as a result of the finding of invalidity of the patent. Justice Snider reduced the award by 10% in recognition that the defendants bear some responsibility for the remedies phase of the trial.

Apotex specific issues:

Regarding settlements, Justice Snider increased the award by 20% on the basis of several offers made by Apotex leading up to and during the trial. While none met the requirements of Rule 420 of the Federal Court Rules, they were considered under Rule 400 as representing compromise and worthy of consideration.

Novopharm specific issues:

Justice Snider rejected Novopharm’s request for a $5.14 million lump sum costs award on the basis she did not have sufficient information to base such an award.

Regarding settlements, Justice Snider recognized that Novopharm made good faith effort to end the litigation although none of the offers met the requirements of Rule 420. Justice Snider found no evidence that Sanofi ever tried to respond to these offers. The Court ordered an increase of 50% as a result of the offers.

Conclusion:

In summary, for Apotex, Justice Snider awarded a reduction of 10% for issues dropped before trial, a reduction of 10% for the remedies phase and an increase of 20% as a result of settlements, all based on the upper end of Column IV of Tariff B. For Novopharm, Justice Snider awarded a reduction of 10% for issues dropped before trial, a reduction of 10% for the remedies phase and an increase of 50% as a result of settlements, all based on the upper end of Column IV of Tariff B.

By: Alan Macek, Dimock Stratton LLP