1. FINANCIAL INSTITUTIONS ENERGY INFRASTRUCTURE, MINING AND COMMODITIES TRANSPORT TECHNOLOGY AND INNOVATION LIFE SCIENCES AND HEALTHCARE Intellectual Property Trials Allyson Whyte Nowak U of T Patent and Trade Secret Course March 18, 2014

2. 2 Outline of Today’s Presentation  Jurisdiction in IP matters  Pleadings  The conduct of an IP trial  Specific trial-related issues

3. 3 Jurisdiction: Federal Courts Act

4. 4 Federal Courts Act

5. 5 Jurisdiction: The Test 1.There must be a statutory grant of jurisdiction by the federal Parliament; 2.There must be an existing body of federal law which is essential to the disposition of the case and which nourishes the statutory grant of jurisdiction; and 3.The law in which the case is based must be a “law of Canada” as that phrase is used in the Constitution Act, 1867 McNamara Construction (Western) Ltd. v. The Queen, [1977] 2 S.C.R. 654

6. 6 Section 20 of the Federal Courts Act Exclusive jurisdiction to the Federal Court re: statutory registration grant of intellectual property rights Concurrent jurisdiction with the Provincial Superior Court re: claims for infringement

7. 7 Why is Jurisdiction important?  As a statutory court, the Federal Court lacks jurisdiction to deal with some IP-related causes of action: (breach of confidential information; breach of contract; and general tort claims)  Whatever jurisdiction the Federal Court has under subsection 20(2) of the Federal Courts Act to provide equitable relief, it cannot be used to grant a remedy which Parliament intended to be excluded by statute Apotex Inc. v. Nycomed Canada Inc. et al. 2011 FCA 358 at para. 23

8. 8 Netbored Inc. v. Avery Holdings et al. (2005) FC 1405, Hughes J. held: “The Anton Piller Order is also directed to “Plaintiff’s confidential information”... …the Federal Court does not have jurisdiction to hear and determine issues as to “confidential information” without the existence of valid and subsisting federal law upon which to anchor that jurisdiction (McNamara Construction (Western) Ltd. V. Regina, [1977] 2 S.C.R. 654). None is pleaded, the Plaintiffs have not argued that there is any such law and this Court is unaware of any such law. The Federal Court does not have jurisdiction to hear and grant relief in respect of claims as to “confidential information”. The portions of the Statement of Claim claiming such relief are struck out. The Anton Piller Order to the extent that it purports to direct itself to confidential information, is a nullity.”

9. 9 Lack of Jurisdiction need not be pleaded “Merck launched several attacks on the validity of provisions of section 8 of the PMNOC Regulations and the jurisdiction of the Federal Court to enforce those provisions. Not all of these attacks were pleaded however. The issue of jurisdiction is not found in Merck’s pleadings. Merck argues that a Court has inherent jurisdiction to entertain issues as to its own jurisdiction. While not pleaded, the issue as to jurisdiction was fully set out in the argument of both parties; nobody has been caught by surprise. I will deal with the issue.” Apotex Inc. v. Merck & Co. 2008 FC 1185

10. 10 Pleading/Proving an Infringement Case Must plead/prove facts to show: (i)ownership of the patent (ii)a license (iii)facts establishing infringement

11. 11 The Anatomy of a Statement of Claim 1.Style of Cause 2.Identify the parties to the action 3.Identify the rights of the plaintiffs 4.Identify the acts of the Defendants which constitute an encroachment of those rights 5.State the relief being sought

12. 12 The Anatomy of a Defence 1.Style of Cause 2.Respond to Plaintiffs’ allegations (a)admit (b)deny (c)have no knowledge of 3.Deny acts constitute infringement 4.Rely on exceptions to infringement (ss. 55.2 and 56 of the Patent Act) 5.Deny entitlement to relief sought

13. 13 The Anatomy of a Defence (cont’d) 6.Bring a Counterclaim seeking to impeach the patent, including any of the validity “defences”, including: i.Anticipation ii.Obviousness iii.Lack of utility iv.Ambiguity v.Claims broader than invention disclosed vi.Method of medical practice vii.Not patentable subject matter 7.State relief being sought by way of Counterclaim

14. 14 Why are pleadings important? Pleadings frame the case  documentary production  discovery  pleadings ultimately constrain a Court’s ability to deal with an issue

15. 15 Pleadings (continued) Consider any amendments you may need to make leading up to trial:  Rule 75: the Court may, on motion, at any time, allow a party to amend a document, on such terms as will protect the rights of all parties.  The Court’s focus has tended to be on whether the amendment would cause prejudice that cannot be compensated for by way of costs (Merck & Co., Inc. v. Apotex Inc. 2003 FCA 488)  Lately, however, the Court’s focus has been on whether the amendment represents a “dramatic or radical change” in the nature of the party’s case.

16. 16 “From my reading of the Statement of Defence, it is clear that the Defendant does not allege, nor even allude to the fact, that it was acting as an agent for a third party, or that such agency relationship was communicated to the Plaintiff during the course of their dealings. For the Defendant now to attempt to introduce evidence to the effect that it was acting as an agent for the third party Amican and, more importantly, that such evidence was communicated to the Plaintiff is tantamount to withdrawing an admission on the record without seeking leave from the Court and contradicts the Defendant's very pleadings themselves. It is for the Defendant to tell the Plaintiff what it is coming to Court to prove, not for the Plaintiff to be left guessing and to seek further particulars regarding what defence, in addition to those expressly pleaded, may be relied upon by the Defendant at trial.” Valentino Gennarini SRL v. Andromeda Navigation Inc., [2003] FCT 567

17. 17 Intellectual Property Trials  Parties may choose the location of the Trial  Trials tend to be longer than in the United States and Europe, lasting on average, between 2-6 weeks  Parties will not know who the trial judge is until the day of trial, unless the action is complex enough to warrant Trial Management Conferences in advance of trial  There is an informal group of judges with IP expertise who tend to preside over patent actions

18. 18 Proving Your Case at Trial 1)Admissions  Pleadings  Discovery read-ins  Request to Admit (Rule 255)  Agreed Statement of Facts 2)Viva Voce Evidence  Witnesses (fact or expert)  Commission evidence Rule 271 3)Documentary Evidence  Documents (property authenticated and accepted as proof of the truth of its contents)

19. 19 Documentary Evidence There are 2 issues to be addressed: 1)Authenticity  fairly routine  tends to be by way of agreement of the parties  alternatively, you need to call a witness to testify that he or she prepared the document  can be done through Requests to Admit 2)Proof of the truth of their contents  issue is tied to the rule against hearsay  can be dealt with by agreement of the parties but still need a witness or some other means to tender the document into evidence

20. 20 Trial Management: Rule 270 Two to three months before trial, counsel will meet with the trial judge and set the schedule for the exchange of:  Witness lists  Will say statements  Expert qualifications As well as the delivery to the trial judge of:  the trial record  possibly expert reports

21. 21 Witness Lists How do you select your fact witnesses?  They must have personal knowledge of an unadmitted fact or  Be able to authenticate a document to be tendered at trial

22. 22 Will-say Statements In a patent infringement action, the Plaintiff’s will-say statements might read (in part) like this:  [Fact witness] will give evidence relating to: educational background professional experience business of the company positions held in [relevant years] responsibilities in the position of corporate secretary the ownership of the relevant patent  [Expert witness] will give evidence as per her expert report dated February 10, 2013

23. 23 Other pre-trial considerations  Offer to Settle (Rule 420)  Notices under the Evidence Act Certified copies of Government records (s. 24 Canada Evidence Act) Business Records  Subpoenas (Rule 41)

24. 24 The Conduct of a Patent Trial  Opening by the Plaintiff  Plaintiff leads evidence establishing Ownership of the patent Status of the licensee as a “person claiming under the patent” Facts establishing infringement (can be by way of admissions, witnesses, discovery read-ins) Opinion evidence on the construction of the patent and infringement The Plaintiff’s Case

25. 25 A Patent Trial (cont’d)  Defendant can choose to make an opening after the Plaintiff or choose to wait until the close of the Plaintiff’s case on infringement  The Defendant responds to the evidence on infringement (cross-examination of the Plaintiff’s witnesses and calling of its own expert and/or fact witnesses)  The Defendant leads evidence on the issues of invalidity (expert and/or fact witnesses and possibly by way of admissions and discovery read-ins) The Defence

26. 26 A Patent Trial (cont’d)  The Plaintiff responds to the evidence on invalidity (cross-examination of the Defendant’s witnesses and calling of its own expert and/or fact witnesses)  Reply evidence (Rule 278(2))  Closing arguments by Plaintiff and Defendant with right of reply The Plaintiff’s Case in Defence to Invalidity and Reply

27. 27 Specific trial issues: Expert Evidence “New” Rules in effect as of August 2010:  standardize the content of an expert statement or affidavit (to be accompanied by a signed Code of Conduct) Rule 52.2(1)  provide for the ability for parties to jointly name an expert Rule 52.1(2) or submit a joint statement Rule 52.6 (4)  allow for expert conferences in advance of trial Rule 52.6(1)  permit concurrent examination of experts (“hot tubbing”) Rule 282.1  require leave to call more than 5 experts Rule 52.4(1)

28. 28 Expert Evidence (cont’d)  Increased scrutiny of experts i.their expertise ii.what they can opine on iii.the manner in which they prepare their report iv.the manner in which they give their evidence  Increased scrutiny of a lawyer’s role in developing expert evidence What is the Practical Effect of this?

29. 29 Selection of an expert witness  Expertise - “special knowledge”  verify qualifications  ensure their acceptance in the appropriate scientific or professional community  Ability to support his or her opinion  objective support (previous academic publications)  ability to defend position (without advocacy)

30. 30 “Hot Tubbing” in the Federal Court In Apotex Inc. v. Astrazeneca Canada Inc. 2012 FC 559, Justice Hughes described the procedure as follows: “At the end of the testimony of Ms Wehner and Dr. Garven I conducted a "hot tubbing" examination in which each of them took the stand at the same time, remaining under oath. They answered questions put to them by me and responded to the answers given by each other. At the end of this process, each Counsel was invited to put follow-up questions to these witnesses.”

31. 31 Specific trial issues: Foreign Decisions  Persuasive value but not binding on a Canadian court  Madam Justice Reed in Kirin-Amgen Inc. v. Hoffman-La Roche Ltd. (1999), 87 C.P.R. (3d) 1 at 21-22 (F.C.T.D): “Counsel placed decisions in two other proceedings before me. One of the Federal Court of Australia…the other by the technical Board of Appeal of the European Patent Office…it is trite law that neither has any binding or precedential value in this Court”.

32. 32 Differences in the Canadian and US patent laws tend to further diminish the value of a U.S. decision United StatesCanada Jury trialsNo Jury trials Patent construction takes place in a Markman hearing in advance of the trial No Markman hearings File wrapper is given significant emphasis No file wrapper estoppel

33. 33 Issue Estoppel The question whether a party can be estopped from making allegations in Canada by virtue of: admissions made by the parties or their privies and/or findings of fact in foreign litigation while available in principle in Canada, has yet to be applied.

34. 34 Issue Estoppel In Johnson & Johnson Inc. v. Boston Scientific Ltd. 2008 FC 552, Madam Justice Layden Stevenson J. (as she then was) exercised her discretion not to apply the doctrine saying, “ In the end, whether to apply issue estoppel, even in circumstances where all the conditions are met, is a matter of discretion… The trial of this matter spanned six weeks. Many witnesses testified, most of them experts. Given the duration of the trial, the length of time that it has been pending, the preparation entailed, and the fact that it was a battle ‘hard fought’, it seems appropriate, to me, that my determinations be made on the merits.”