Wednesday, October 31, 2012

Ramipril Costs

Sanofi-Aventis / ramipril (Costs) 2012 FCA 265 Sharlow JA: Dawson, Trudel JJA

In this brief decision from the bench, the FCA dismissed nine appeals and four cross-appeals, relating primarily to Snider J’s costs awards in ramipril litigation between Sanofi-Aventis and Apotex and Teva, 2009 FC 1138 (Apotex) and 2009 FC 1139 (Teva / Novopharm). The appeals were dismissed on the basis that the costs awards were “well within the discretion of Justice Snider” [4]. Consequently, the neither the FCA decision nor the decision of Snider J establish a strong precedent on costs matters. Nonetheless, a several points from Snider J’s decisions are worth noting.

Scale of Costs
First, with respect to the scale of costs

In my view, the upper end of Column IV is appropriate, and not simply because this award "splits the difference". A review of recent jurisprudence on the issue of awards in intellectual property trials indicates that this scale recognizes the significance and complexity of the various issues in such a trial. [2009 FC 1138 ¶ 14, 2009 FC 1139 ¶ 13]

This is consistent with costs in Eurocopter v Bell, and higher than the scale used by Zinn J in the fenobibrate costs decision.

Offer to Settle
In the Teva / Novopharm case Snider J took into account an offer to settle that did not satisfy Rule 420 (emphasis added):

[22] Sanofi argues that Novopharm has not provided sufficient evidence to support a Rule 420 finding and, in any event, the settlement offers would not meet the criteria of Rule 420. I agree. However, I am also sympathetic to Novopharm's situation. It appears that, even if these offers were not formal or substantive enough to satisfy Rule 420, there is no doubt that they were made in a good faith effort to end the litigation. Further, while Sanofi now explains why the offers could not have been accepted, I see no evidence that Sanofi ever tried to make responding offers. In November 2008, Novopharm went so far as to draw up draft terms of settlement, to which there appears to have been no response. Even on the little evidence before me, I am satisfied that Novopharm made very serious efforts to settle the litigation both prior to and during the trial. Sanofi's attitude throughout, and its defensive, after-the-fact justification for its failure to properly consider the offers are simply not helpful. In the circumstances, while recognizing that the offers do not satisfy Rule 420, I am convinced that the settlement offers by Novopharm should result in an increase in the overall award of 50%.

In the Apotex case Snider J similarly took into account an offer to settle by Apotex , but increased the overall award by only 20% because the offer to settle was vague [22].

In both cases over half the trial days related to remedies, which, with hindsight, turned out to be wasted as the patent was held to be invalid. Sanofi had brought a motion to bifurcate which had been resisted by both Apotex and Novopharm. Snider J ordered a 10% reduction in the overall award of costs to reflect Apotex and Novopharm’s responsibility for the unnecessary remedies phase. However, Snider J noted that in both cases resisting bifurcation was not initially unreasonable because there was a good faith belief that the remedies phase would be relatively brief.

As the reality became clear, the Plaintiffs could have brought a further motion or a motion for reconsideration. That did not happen. Further, Sanofi contributed to the length of this phase of the trial by not making an election between damages and profits until the commencement of the presentation of oral arguments.

Thus in different circumstances the discount for resisting bifurcation might have been greater.

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