Date: 20020313
Docket: T-2078-00
Neutral citation: 2002 FCT 278
BETWEEN:
BRISTOL-MYERS SQUIBB COMPANY and
BRISTOL-MYERS SQUIBB CANADA INC.
Plaintiffs
- and -
APOTEX INC.
Defendant
BACKGROUND
[1] Apotex Inc. ("Apotex") seeks to set aside the February 7, 2002 decision of Madam Prothonotary Aronovitch who granted, in part, the plaintiffs' motion for amendments to the existing protection order dated March 2, 2001, in this action for patent infringement whereby Bristol-Myers Squibb Company and Bristol-Myers Squibb Canada Inc. ("BMS") claim Apotex is selling a compound, namely nefazodone-hydrochloride (the "product"), using processes which BMS have also claimed in the patent in issue.
[2] BMS had sought, but was not granted, by a "For Counsel's Eyes Only" protective order amendment.
[3] The amendments authorized by Madam Prothonotary Aronovitch created a "Confidential Information -- Counsel and Expert Only Class" -- in respect of confidential or proprietary financial information, whether personal or business-related, that is commercially sensitive or that discloses competitive business information (the "new class").
[4] The new class consists of:
(a) outside counsel for the plaintiffs and for the defendant;
(b) up to two individuals employed by a party involved in the action who are an in-house counsel, an in-house chartered accountant or a comptroller for that party;
(c) up to five individuals not employed by any party nor by any direct competitor of any party to the litigation who may be retained by any party as an outside expert;
(d) such other persons as the parties may agree in writing or as the Court may order.
[5] The authorized amendments include a new paragraph 18A which enables the in-house counsel, the in-house chartered accountant or comptroller to:
. . . disclose to the directing minds of that Party the general nature of the information, but may not disclose specific details revealed in that information.
For greater certainty, nothing in the amended protective order precludes those individuals from disclosing to the party their assessment of the total amount of the plaintiffs' damages or the defendant's profits, for the purpose of instructing counsel.
[6] Apotex, in its appeal, claims Madam Prothonotary Aronovitch:
(1) fettered her discretion or prejudged the issue of BMS's entitlement to a higher form of protective order. It says the only issue in her mind was who should be in the new class;
(2) erred by ignoring compelling evidence that the new class should include Dr. Sherman.
[7] In opposing the BMS motion for the amendments to the protective order, Apotex filed an affidavit by Dr. Sherman who stated in paragraph 9 the following:
(9) I also have overall responsibility for ensuring that those products that Apotex sells not only establish a market presence but also maintain it. In connection with this, I have sole responsibility for providing instructions to counsel and, as a result, I am and have to be involved in every legal proceeding to which Apotex is a party, including this one. Apotex does not have an in-house legal department or, for that matter, any in-house lawyers.
[8] There is no bifurcation order in this action severing issues of liability from those of remedies (either accounting for profit or damages).
[9] In November 2001, Apotex brought a motion to, amongst other things, compel the plaintiffs to make full documentary discovery related to the issue of damages. Madam Prothonotary Aronovitch ordered BMS to produce their financial documents including documents relating to the product's sales, revenues, costs, market share, loss of market share, market size, marketing expenses and sales forecasts. Also to be produced, were documents relating to the efforts by BMS to mitigate their damages including documents relating to the arrangements entered into between one or both of the plaintiffs with Linson Pharma Inc. ("Linson") with respect to the marketing of another version of nefazodone-hydrochloride in Canada and revenues accruing to the plaintiffs as a result of those arrangements.
[10] It was the scope of the required disclosure that propelled BMS to seek the amended protective order which gives rise to this appeal.
[11] Jim Watkins, Vice-President Finance and Information System for BMS, filed a confidential affidavit in support of the amendments sought. He states BMS considers their consolidated financial statements, sales reports, documents evidencing their costs, clinical study investigations and their sales force structure as being sensitive business information that should not find its way into the hands of a competitor. Mr. Watkins says the documents required to be produced disclose BMS' revenues made from its sales of the product and costs incurred by the plaintiffs to make those sales along with the full cost allocation of the plaintiffs' overhead costs including profit margins. He is very concerned that Apotex would, even inadvertently, make use of the documents.
[12] Dr. Sherman concluded his affidavit by stating the following:
19. At stake is Apotex' ability to fully participate in this litigation. The form of order that the Plaintiffs are seeking is such as to effectively deprive Apotex' counsel from seeking and taking instructions in this matter. As indicated above, I am the sole individual who instructs counsel in litigation matters, including this one. Apotex does not have any in-house counsel as the Plaintiffs suggest. Also, by virtue of my experience in the pharmaceutical industry, I am best situated at Apotex to review the Plaintiffs' financial documents to point out potential areas of questioning or omissions from the productions.
ANALYSIS
[13] The standard of review of discretionary orders of prothonotaries was established by the Federal Court of Appeal in Canada v. Aqua-Gem Investments Ltd., [1993] 2 F.C. 425 at 463:
. . . discretionary orders of prothonotaries ought not to be disturbed on appeal to a judge unless
(a) they are clearly wrong, in the sense that the exercise of discretion by the prothonotary was based upon a wrong principle or upon a misapprehension of the facts, or
(b) they raise questions vital to the final issue of the case.
[14] When either of these two elements has been made out, the judge exercises his/her own discretion de novo.
[15] I agree with counsel for BMS, relying on Justice Reed's decision in James River Corp. of Virginia v. Hallmark Cards, Inc. et al. (1997), 72 C.P.R. (3d) 157 that Madam Prothonotary Aronovitch's order is not to be classified as a matter vital to the final issues of the case but one involving the management of the pre-trial process.
[16] The Federal Court of Appeal held in Novopharm Ltd. v. Glaxo Group Ltd. et al. (1998), 81 C.P.R. (3d)185 that a protective order (in that case "counsel's eyes only") was a discretionary order with which the Court would only be justified in interfering if an error in principle was committed.
[17] The question therefore remains whether Madam Prothonotary Aronovitch exercised her discretion upon a wrong principle or upon a misapprehension of the facts. I do not think she did. Quite to the contrary, I am satisfied she exercised her discretion correctly in balancing the relevant interests.
[18] She had before her ample evidence upon which she could find the need for a higher level of protection by restricting access to highly sensitive financial information about sales, revenues, costs and profit margins of a specific pharmaceutical product sold in a competitive market place where not only BMS and Apotex are present but also Linson who markets a generic nefazodone-hydrochloride in direct competition with Apotex. I understand Linson to be related to BMS.
[19] On the other hand, the record indicates Madam Prothonotary Aronovitch was sensitive to Apotex' right to be able to defend itself in the action by appropriately instructing legal counsel who will be informed by up to five experts and by two Apotex financial personnel who will be able to communicate with Dr. Sherman concerning the general nature of the new class information but who will not be able to disclose specific details in that information. This is why she refused the BMS "For Counsel's Eyes Only" request and provided for paragraph 18A.
[20] For these reasons, this appeal is dismissed with costs in any event of the cause.
"François Lemieux"
J U D G E
OTTAWA, ONTARIO
MARCH 13, 2002