Thursday, September 26, 2013

What Is an “Oversight” in a Order?

Sanofi-Aventis v Apotex Inc 2013 FCA 209 amending Sanofi-Aventis v Apotex Inc / clopidogrel 2013 FCA 186 Pelletier JA: Noël, Gauthier JJA rev’g 2011 FC 1486 Boivin J
            1,336,777 – PLAVIX

This decision of the FCA amends its clopidogrel decision with respect to the parties affected by the judgment. The full style of cause in the case included Apotex Inc, Apotex Pharmachem Inc and Signa SA de CV as defendants / respondents. (Apotex contracted for Pharmachem to develop the Apotex product and process of manufacture, and Pharmachem transferred the technology to Signa, which manufactured the product according to Pharmachemm’s specification, and sold it in bulk to Apotex [2013 FCA 186 [86]].) The action against Signa was discontinued (FC [10] fn 3), but the style of cause was not changed [7]. Boivin J at trial held that the patent was invalid. This holding was reversed on appeal, which required the FCA to deal with infringement. As originally written, the FCA reasons stated that “As the Trial Judge made no findings of infringement against Apotex Pharmachem Inc. and Signa SA de CV, I would dismiss Sanofi's claims against them” [2013 FCA 186, [121]]. The original FCA judgment declared that Apotex Inc infringed the patent, and that the claim against Apotex Pharmachem and Signa was dismissed [1]. Sanofi brought this motion under Rule 397 asking the FCA to amend the judgment by (1) removing the reference to Signa, which stated that the claim against it was dismissed; and (2) adding a reference stating that Apotex Pharmachem was also liable for infringement.

On the first change, the FCA acknowledged that it had overlooked the fact that the action against Signa had been discontinued. This could not be corrected under Rule 397(1)(a), which provides for correction when “the order does not accord with any reasons given for it.” Here, the order and reasons were entirely in accord; Sanofi’s argument is that they were both wrong. However, the FCA held that “this Court's decision dismissing the claim against Signa was the result of an oversight and a correction of the judgment as it concerns Signa is warranted” [7] The reference to “an oversight,” suggests the FCA applied Rule 397(1)(b), dealing with “a matter that should have been dealt with has been overlooked.” However, it prefaced its discussion of the point by saying “That leaves the question of whether there was an error, omission or mistake in the preparation of the judgment” [5]. That evidently refers to 397(2), which allows for corrections of “Clerical mistakes, errors or omissions in an order.” Thus it is not entirely clear which provision the FCA applied in making this correction.

With respect to Apotex Pharmachem, Sanofi argued that in its original decision, the FCA had overlooked the fact that the trial judge had made a finding of liability for infringement against Pharmachem [8]. However, there was no specific finding to that effect in the trial judgment. Bovin J’s conclusion on liability was that “Subject to the validity of the patent and the defences that were pleaded by Apotex, there can be no question that Apotex has infringed the claims of the `777 Patent.” In addition, in Footnote 2, Boivin J stated that “In these reasons, the Court will refer to Apotex Inc. and Apotex Pharmachem Inc. collectively, as "Apotex".” Sanofi argued, in effect, that in light of that statement, the statement that “there can be no question that Apotex has infringed” should be interpreted as meaning “ there can be no question that Apotex Inc and Apotex Pharmachem Inc have infringed.” Consequently, the FCA was wrong in its original reasons in stating that the trial judge made no finding of infringement against Pharmachem.

The FCA held that "[w]hether Sanofi is right about this or not", it was not a matter which could be corrected under Rule 397. Again, the order and reasons were in accord, and Sanofi’s argument was that they were both wrong. The FCA also held that this misinterpretation, if that is what it was, could not be corrected under any other provision of Rule 397:

[8] This is neither an oversight (as in the case of Signa) nor an accidental omission, nor is it a clerical error, mistake or omission

Note that the reference to “an oversight (as in the case of Signa),” indicates that the Signa point was decided on Rule 397(1)(b). (This seems appropriate if “clerical” modifies “mistake or omission” as well as “error,” though (1)(b) could apply to mistakes more broadly if “mistake or omission” and “clerical error” are separate phrases. This FCA did not parse the provision to this extent.)

The FCA continued to say:

[8] Rule 397 does not authorize this Court to revise its understanding of a trial judge's reasons on the basis of argument submitted to it after this Court's judgment has been rendered.

I find it somewhat difficult to reconcile the two branches of this decision. In its original decision, it is evident that the FCA had understood the trial judge’s reasons as having made no finding of infringement against Signa. The FCA revised its understanding after having had its attention drawn to footnote 3, which stated that the action against Signa had been dismissed. While its original error was due to an oversight, the correction of that oversight led it to revise its understanding of the trial judge’s decision. I don’t see the argument regarding Pharmachem as being much different. If footnote 2 had said “In these reasons, the Court will refer to Apotex Inc. and Apotex Pharmachem Inc. collectively, as ‘Apotex,’ and any findings of invalidity relating to ‘Apotex’ are to be understood as referring to both,” then I would say that the two cases would be indistinguishable. The only distinction is that the oversight with respect to Signa was clear, while it is not as clear whether there was an oversight with respect to Pharmachem, or if the FCA had actually considered footnote 2 and deliberately decided that the statement that “Apotex” infringed nonetheless referred only to Apotex Inc. But either there was or was not an oversight. Only the panel of the FCA itself can know. If it does know that it did not consider footnote 2, then I don’t see why that should not be considered an oversight in the same way that the failure to consider footnote 3 was an oversight. Of course, if it did consider the footnote, then the motion should be dismissed on the basis that there was no oversight.

More broadly, the argument that Boivin J was referring to Apotex Inc. and Apotex Pharmachem Inc. collectively, as stated in footnote 2, when he stated that “Apotex” infringed, is prima facie plausible. Suppose that, had the FCA fully considered this point, it would have determined that the argument is correct, and that it had in fact misunderstood the trial decision. If Rule 397 does not apply in such cases, is there any other mechanism for correcting the error? I am not an expert on the Rules, so I can’t answer that question. I do understand the need for finality, but I don’t see why such an error should not be corrected, so long as it is done in a timely manner, as required by Rule 397. 

Note that the amending decision, 2013 FCA 209, as posted on the website, gives the citation for the decision being amended as 2013 FCA 187. The correct citation is 2013 FCA 186.

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