November 5, 2019
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The Federal Court (“Court”) recently denied Teva Canada Limited (“Teva”) leave to serve three reply expert reports (the “Reply Reports”) in Janssen Inc. v. Teva Canada Limited, 2019 FC 1309. Teva and Janssen Inc. (“Janssen”) are engaged in a patent infringement dispute regarding Canadian Patent No. 2,655,335 (the “‘335 Patent”), which relates to formulations of paliperidone palmitate, a medicine used to treat schizophrenia.
Teva maintained that the Reply Reports were needed to address issues that it could not have anticipated until after having reviewed Janssen’s expert reports. The Court, however, found that there were no new issues raised in Janssen’s expert reports that required further evidence from Teva, and that Teva was simply trying to use the Reply Reports to bolster its evidence in chief and rebut or disagree with Janssen’s experts.
All three Reply Reports were deemed improper and excluded from evidence.
Background:
Janssen brought an action against Teva for infringement of the ‘335 Patent under subsection 6(1) of the Patented Medicines (Notice of Compliance) Regulations, SOR/93-133. Teva counterclaimed, arguing that the ‘335 Patent is invalid for obviousness and lack of patentable subject matter.
By August 15, 2019, both parties had exchanged expert reports in chief and responding expert reports. Teva served responding expert reports on infringement, and Janssen served responding expert reports on the validity of the ‘335 Patent.
On September 9, 2019, Teva served the Reply Reports on Janssen. Janssen objected.
The Federal Court’s Decision:
According to rule 274(1) of the Federal Court Rules, the order of presenting evidence at trial begins with the plaintiff, then shifts to the defendant. When the defendant’s evidence is concluded, the plaintiff may adduce reply evidence.
In considering Teva’s motion for leave to serve the Reply Reports, the Court focused on the principles governing the admissibility of reply evidence outlined in Halford v. Seed Hawk Inc., 2003 FCT 141 [Halford]:
Evidence which is simply confirmatory of evidence already before the court is not to be allowed.
Evidence which is directed to a matter raised for the first time in cross examination and which ought to have been part of the plaintiff's case in chief is not to be allowed. Any other new matter relevant to a matter in issue, and not simply for the purpose of contradicting a defence witness, may be allowed.
Evidence which is simply a rebuttal of evidence led as part of the defence case and which could have been led in chief is not to be admitted.
Evidence which is excluded because it should have been led as part of the plaintiff’s case in chief will be examined to determine if it should be admitted in the exercise of the trial judge’s discretion.
In essence, a plaintiff is barred from splitting its case (R v. Krause, [1986] 2 SCR 466), meaning it cannot use reply as an opportunity to put forward evidence that merely confirms its previous arguments. Rather, reply evidence must relate to novel issues raised by the defendant that the plaintiff did not speak to in its case in chief (Amgen Canada Inc v. Apotex Inc., 2016 FCA 121 at para. 12).
Teva argued that Janssen’s pleadings were deficient, leaving it to guess at what issues and documents would be relevant to the case. It argued that the Reply Reports merely dealt with information that was not available or known prior to Janssen serving its expert reports.
The Court was not convinced by Teva’s position. It found that Teva was in fact case-splitting by waiting for Janssen to file its expert reports before dealing with certain issues for the first time. For example, Teva waited to see how Janssen’s experts would address the issue of population pharmacokinetic modeling, and then had its own experts address the issue in the Reply Reports.
The Court also found that a majority of the Reply Reports amounted to simply disagreeing with Janssen’s experts, restating Teva’s experts’ initial opinion, or Teva’s experts stating they were surprised by statements made by Janssen’s experts.
Having found that the Reply Reports were improper pursuant to the first three principles laid out in Halford, the Court went on to decide whether it should nonetheless exercise its discretion to admit them into evidence.
The Court chose not to allow the Reply Reports into evidence. The Court considered that it could conceivably grant Janssen the right to file sur-reply reports without running up against the trial date. However, given that there were no new issues raised in Janssen’s expert reports, an endless cycle of reports (merely as rebuttal of opposing experts’ reports or confirmatory evidence already provided in chief) would serve no useful purpose.
Authors: Larissa Fulop and Daniela Cerrone