Date: 19981218
Docket: T-366-98
BETWEEN:
AB HASSLE, ASTRA AB and ASTRA PHARMA INC.
Applicants
- and -
MINISTER OF NATIONAL HEALTH AND WELFARE,
RHOXALPHARMA INC., TAKEDO CHEMICAL
INDUSTRIES LIMITED
Respondents
REASONS FOR ORDER
TREMBLAY-LAMER J.:
[1] This is an appeal from the order of Prothonotary Morneau, dated November 3, 1998, ruling that certain documents filed on behalf of the respondent RhoxalPharma Inc. are not confidential and, as a result, not subject to the Protective Order issued in this proceeding April 29, 19981 and attached as Appendix A.
THE BACKGROUND
[2] The applicants, Ab Hasle, Astra AB and Astra Pharma Inc. ("Astra") hold the patent on omeprazole tablets, a gastric reduction medicine sold under the trade name Losec TM .
[3] The respondent RhoxalPharma is a generic manufacturer and distributor of drugs. It intends to market a version of omeprazole which allegedly does not infringe Astra"s patent.
[4] Andrx Pharmaceuticals ("Andrx"), who is not a party in this action, is the generic drug company who developed "a novel and innovative pharmaceutical formulation" of omeprazole tablets which does not infringe the Astra patents. Andrx has agreed to sell this non-infringing formulation to RhoxalPharma. As noted by Mr. Morneau, the fact that Andrx was the supplier of RhoxalPharma was entered as evidence in the public record; and, therefore, this fact is no longer confidential.
[5] Astra obtained a Notice of Compliance from the Minister of National Health and Welfare ("MNHW") with respect to the patented omeprazole tablets. Under the Patented Medicines (Notice of Compliance) Regulations, Astra is considered the "first person".
[6] When RhoxalPharma, the "second person" wishes to market a drug which it alleges does not infringe the first person"s patent, it must serve the first person with a Notice of Allegation ("NOA") indicating the reasons why an NOC should issue, notwithstanding the existence of the patent.
[7] On February 19, 1998, RhoxalPharma sent Astra an NOA, with respect to the omeprazole tablets. In response, Astra initiated the present prohibition proceeding against RhoxalPharma.
[8] As part of the prohibition proceeding, RhoxalPharma sought and was granted a Protective Order, by Teitelbaum J., on April 29, 1998.
[9] RhoxalPharma then filed the affidavits of David Gardner and Louis Cartilier and designated them as Confidential Information (the "Challenged Information"). Astra challenged the designation, as permitted by the Protective Order.
[10] Mr. Morneau, in his order dated November 3, 1998, ruled that the respondent had failed to prove that the information should remain confidential. He then stayed the order for a period of 10 days, to allow the parties to appeal. An appeal was filed and on November 12, 1998, Justice McGillis ordered that the stay be extended until the appeal is decided by this Court.
ISSUE
| Did Mr. Morneau err in law in interpreting and applying the terms of the Protective Order? |
THE POSITIONS OF THE PARTIES
[11] RhoxalPharma submits that although Mr. Morneau identified the correct test, he erred in its application. In its submission, the test for confidentiality, like the test for a protective order, must be based on the asserting party"s belief. To impose a higher standard once the information has been submitted in confidence to the Court would be unfair to the party asserting confidentiality. Furthermore, this would simply add an extra step into an already long process, thereby allowing the patent holder to further extend its monopoly.
[12] RhoxalPharma further submits that Mr. Morneau erred in the application of the test. When he assessed the risk of harm, he limited it to the ability of RhoxalPharma"s competitors to reproduce the tablet. RhoxalPharma argued that other types of harm could result from the disclosure besides the reproduction of the tablet. To this end it submitted that the experts presented to substantiate the confidentiality of the Challenged Information were business experts rather than scientific experts. Therefore, although they were unfamiliar with the pharmaceutical process in question, they were qualified to testify as to the value of the information and the potential harm to proprietary and commercial interests that disclosure could cause.
[13] The applicant Astra submits that Mr. Morneau correctly stated and correctly applied the appropriate test and that the Challenged Information consists of a list of ingredients and is insufficient to enable a skilled person to reproduce the tablets.
[14] Astra also submits that the Protective Order involves a two-part test: (i) a subjective part which determines the asserting party"s belief, and (ii) in the event of a challenge, an objective portion to determine whether disclosure would cause serious harm. Further, Astra emphasized that the respondent must show that disclosure would cause harm, not simply that it could cause harm. Therefore, it is submitted, based on the evidence before Mr. Morneau, the respondent failed to prove that the proprietary, commercial and scientific interests of the respondent would be seriously harmed.
ANALYSIS
[15] I agree with Astra"s submission that there are two steps involved for a protective order: one subjective and one objective. First, based on the reasoning of MacKay J., in Apotex Inc. v. Wellcome Foundation Ltd. ,2 a protective order will be issued in relation to information to be produced "if the moving party believes that its proprietary, commercial and scientific interests would be seriously harmed by producing information upon which those interests are based."3
[16] In the present case, Teitelbaum J. found the evidence sufficient to satisfy this test and a protective order was issued April 29, 1998.
[17] This is the subjective portion because it is based on the moving party"s belief that its interests would be harmed by the disclosure of the information.
[18] Second, when the protective order is granted, a party has the right to challenge the confidentiality of the "Challenged Information".
[19] Paragraph 17 of the April 29, 1998 Protective Order specifically provides that in the event of a challenge the party asserting confidentiality shall have the burden of proving on a balance of probabilities that the information is in fact confidential. This is, in my opinion, an objective test.
[20] I cannot accept RhoxalPharma"s argument that at this second stage the asserting party need only demonstrate that it believes the information is confidential and that the Challenged Information is not of the type excluded by paragraphs 14 and 18 of the Protective Order.
[21] When a protective order is granted based on the belief of the asserting party, the right to challenge the classification of certain information as confidential would be rendered nugatory if the required test to prove confidentiality were also based on the asserting party"s belief.
[22] Therefore, I find that Mr. Morneau erred when he agreed that the subjective test (i.e. the asserting party"s belief), as stated by MacKay J. in Apotex, supra, was the proper test to apply when determining the confidentiality of information under the Protective Order.
[23] Further, I do not believe that the test can be limited to requiring the moving party to prove that the information is not the type contemplated by paragraph 18.
[24] Paragraphs 17 and 18 read as follows:
17. In the event that a challenge to the confidentiality of designated Confidential Information, the Party asserting confidentiality shall have the burden of proving on a balance of probabilities that the information is, in fact, confidential;
18. In the event of a challenge to the confidentiality of designated Confidential Information, Confidential Information shall not include information which:
| (a) is or was public knowledge or part of any public record, or which becomes public knowledge or part of any public record by means not in violation of the provisions of this Order or of the law; |
| (b) is or was acquired lawfully from a person not a Party to this action in circumstances not governed by an obligation of confidence; |
| (c) is or was already known to the receiving Party, affiliates, its counsel or experts; or |
(d) is or was independently developed by the receiving Party, its counsel or experts.
[25] Paragraph 18 is a broad provision which merely states the type of information that should generally be excluded from the assessment. If paragraph 18 was intended to define what is confidential, this would have been clearly stated, or paragraph 17 would have required the asserting party to prove that the information does not fall within the listed exclusions. This is not the case.
[26] The Protective Order specifically allows a party to submit the challenged information to an objective evaluation. This is evidenced by the wording of paragraphs 4, 14d), 15 and 17, which makes it clear that a party may seek adjudication on the confidential character of the information.
[27] By allowing for objective demonstration or adjudication, the scheme under the Protective Order provides appropriate safeguards and emphasizes the balance between the openness of the process and the bona fide interests of the parties. In my opinion, this is reflective of MacKay J."s approach in Apotex , supra, where he discussed the importance of striking a balance between these competing interests:
The general principle of the court and its process being open to public scrutiny, including access for the public to court documents, is fundamental to our system of justice. Striking a balance between that principle and the interests of justice between the parties, including the bona fide commercial and proprietary interests of parties to litigation has led to the practice in this and other courts of providing by protective or confidentiality orders that information obtained in preparation for trial may, in appropriate cases, be maintained in confidence, not accessible to the general public, in the court"s processes.4
[28] In the present case, the objective assessment is performed under paragraph 17. The difficulty resides in establishing the appropriate test to determine if the Challenged Information is confidential.
[29] In my opinion, the proper test at this stage is also two-fold. First, it requires that the information has been treated by the party at all relevant times as confidential. It would make no sense to maintain that information is confidential when the party has not treated it as such.
[30] Second, it requires the asserting party to demonstrate that on a balance of probabilities, its proprietary, commercial and scientific interests could reasonably be harmed by the disclosure of the information.
[31] In my opinion, a party who cannot satisfy the Court on a balance of probabilities of these requirements has not demonstrated the need for such a restriction to the general rule of open court.
[32] Astra has suggested that RhoxalPharma must establish on a balance of probabilities that serious harm would result from the disclosure of the Challenged Information. In my view, this imposes too high a burden on the party asserting confidentiality where, as in the present case, the prejudice is prospective.
[33] A useful analogy can be found in the Access to Information Act5, Section 20.1(c). This Act deals with the disclosure of information and directs that such disclosure shall be refused where certain prejudice could reasonably be expected to occur.
| 20. (1) Subject to this section, the head of a government institution shall refuse to disclose any record requested under this Act that contains
|
20. (1) Le responsable d'une institution fédérale est tenu, sous réserve des autres dispositions du présent article, de refuser la communication de documents contenant_:
|
[34] Did RhoxalPharma prove that the information, on a balance of probabilities, is confidential?
[35] First, Mr. Morneau found as a fact that at all relevant times, other than the name of RhoxalPharma"s supplier, RhoxalPharma has treated the Challenged Information as confidential; this is a reasonable finding based on the evidence; and therefore, it should not be disturbed.
[36] Second, I am satisfied that there was evidence to demonstrate that RhoxalPharma could reasonably be harmed by disclosure of the Challenged Information.
[37] The Gardner and Cartilier affidavits, which make up the Challenged Information, contain a categorized list of the ingredients of RhoxalPharma"s non-infringing tablets, along with their relative proportions and weights. Some of the ingredients in the formulation are not contained in Astra"s tablet. Therefore, RhoxalPharma submits that on a balance of probabilities the disclosure of this information could seriously harm its proprietary, commercial and scientific interests.
[38] In support of this contention, RhoxalPharma submitted the affidavits of Mr. Lodin and Mr. Lachovsky, two business people involved with RhoxalPharma, neither of whom is skilled in the art of pharmaceutical formulation.
[39] Based on the cross examinations of Mr. Lodin and Mr. Lachovsky, which revealed that their knowledge of the pharmaceutical process was extremely limited, Mr. Morneau accorded little weight to their testimony.
[40] Dr. Rhodes, who is a professor of applied pharmaceutical sciences, testified on behalf of Astra that without specific information on how to process the ingredients, it would be highly improbable that a skilled person could replicate the tablet based solely on the Challenged Information.
[41] As a result, Mr. Morneau concluded that RhoxalPharma"s affidavit evidence did not prove on a balance of probabilities that the Challenged Information was confidential. However, Mr. Morneau is assuming that enabling someone to reproduce the omeprazole tablets is the only serious harm which could result from the disclosure of the Challenged Information.
[42] As I stated above, the proper test is whether on a balance of probabilities the proprietary, commercial and scientific interests of the asserting party could reasonably be harmed by the disclosure of the information. By focussing solely on the reproduction of the tablet, Mr. Morneau has failed to consider whether serious harm could result to RhoxalPharma"s proprietary, commercial and scientific interests in general. A categorized list of ingredients, regardless of whether or not it would enable someone skilled in the art of pharmaceutical preparation to actually reproduce the tablet, could give RhoxalPharma"s competitors a "head start" in the development of a non-infringing tablet. Such a head start could harm the proprietary and commercial interests of RhoxalPharma.
[43] I recognize that the affiants for RhoxalPharma are not experts in pharmaceutical formulation and as such Dr. Rhodes" expertise is of greater weight in determining whether a skilled individual could replicate the tablet on the basis of the Challenged Information. However, this is not the only serious harm which could reasonably be expected to result.
[44] The evidence demonstrates that the market for omeprazole is very lucrative and that a non-infringing formula would be a valuable asset.6
[45] Dr. Rhodes conceded that although it may not explain how to actually make the tablet, the list of ingredients, some of which are not contained in the Astra tablet, would certainly be "of some assistance" to a skilled individual attempting to develop a non-infringing omeprazole tablet.7
[46] He also conceded that the public disclosure of a formulation could damage the patentability of the invention.8
[47] Based on the evidence of Dr. Rhodes, I find there was enough evidence for the Prothonotary to conclude that RhoxalPharma"s proprietary, commercial and scientific interests could reasonably be prejudiced by the disclosure of the Challenged Information.
[48] Further, this is confirmed by the affidavit of Mr. Lodin,9 who, although not an expert in pharmaceutical compositions, as vice-president and general counsel of Andrx, is an expert in the proprietary and commercial interests surrounding the information. Mr. Lodin affirmed that the disclosure of the Challenged Information "to persons not bound by the Protective Order in the present proceeding could damage Andrx Pharmaceuticals Inc."s competitive position in the market and could result in serious damage, financial and otherwise to Andrx Pharmaceuticals Inc."
CONCLUSION
[49] For all these reasons, the appeal is granted with costs.
"Danièle Tremblay-Lamer"
JUDGE
OTTAWA, ONTARIO
December 18, 1998.
APPENDIX A
ORDER
THIS COURT ORDERS THAT:
1. In this Order, each of the Applicants and each of the Respondents are referred to in the singular as "Party".
2. Any document or thing, relating to the identity of RhoxalPharma"s supplier of omeprazole or the process, components and formulae by which RhoxalPharma"s omeprazole tablets are made, that is produced by any Party and any answer made by any Party relating thereto during or for the purpose of this proceeding, including any Examination and any Exhibit marked in this proceeding (hereinafter collectively referred to as the "Information") may be subject to this Order.
3. Subject to paragraph 4 hereof, any Party who reasonably believes that Information is confidential to it shall have the right through its counsel to designate such Information as "Confidential" (hereinafter referred to as "Confidential Information") in which event such Information shall thereafter be subject to the terms of this Order, subject to the right of any other Party to enter its divergence of view thereon and, if necessary, to challenge the confidential character thereof (hereinafter collectively referred to as "Challenged Information").
4. Confidential Information shall, subject to any determination or adjudication of the confidential character of any Challenged Information, be segregated from other Information being submitted to this Court and shall be submitted to the Court, or other location as agreed to by counsel or by order of the Court, in sealed form identifying the Information and clearly and prominently marked with the legend:
| CONFIDENTIAL INFORMATION |
| Pursuant to the Court Order herein, this package shall remain sealed in the Court files and shall not be opened except upon order of the Court. |
and all such sealed packages shall not be opened except by any person identified in paragraph 9 or upon further order of this Court.
5. A copy of this Order shall be presented to the reporter at any Examination, Cross-Examination, or other proceeding before a court reporter in this proceeding, at or prior to the time when any question is propounded which is asserted by any Party to involve Confidential Information and as such designated Information, the reporter shall omit those questions and answers from the transcript and transcribe them separately as a "Confidential Transcript" which shall be placed by the reporter in a sealed envelope marked as described in paragraph 4 above. The reporter shall in the normal course send copies of the Confidential Transcript to counsel for all Parties in this proceeding, and such copies shall thereafter be treated as Confidential Information subject to this Order.
6. All documents, exhibits and things which are designated as Confidential Information and are to be produced by a Party subject to the terms of this Order shall be marked with the following legend:
| CONFIDENTIAL |
| SUBJECT TO PROTECTIVE ORDER DATED |
7. All Confidential Information produced or disclosed by a Party in connection with this proceeding shall be kept confidential in the custody of counsel for the Party referred to in paragraph 9 herein, and shall not be disclosed by counsel for the Party to anyone except in accordance with paragraph 10 hereof or except as may be disclosed pursuant to the following paragraphs herein or pursuant to determination or adjudication of the character of Challenged Information.
8. Counsel and all persons having access to Confidential Information shall take reasonable precautions as to the storage, custody and use of the Confidential Information to prevent the unauthorized or inadvertent disclosure of any Confidential Information.
9. In the absence of written permission from the Party disclosing any Confidential Information, the recipient of Confidential Information shall not disclose same to any one, except the Court staff, the following parties, companies or individuals and members and regular employees of the following firms:
| (1) The Applicants in this proceeding and their related and affiliated companies and their counsel and within these, only the employees who need to know of the information; |
| (2) The Respondents in this proceeding and their related and affiliated companies and their counsel and within these, only the employees who need to know of the information; |
| (3) Up to three outside experts for each Party retained to assist the Party in the preparation and trial of this proceeding; |
| (4) The firms of Martineau Walker and Goudreau Gage Dubuc & Martineau Walker; |
| (5) The firm of Smart & Biggar; |
| (6) the Minister of National Health and Welfare; |
| (7) The Attorney General of Canada; |
| (8) The Department of Justice; |
provided that each of the individuals identified in subparagraphs 1, 2 and 3 above who receives "Confidential Information" shall, prior to receiving same, acknowledge in writing:
| (a) that they have received and reviewed a copy of this Order and understand the terms of the Order; and |
| (b) that they undertake to be bound by the terms and conditions of this Order |
said acknowledgment to be retained by the solicitor of record for the Party or the solicitors having retained the expert as the case may be.
10. If any Party producing Confidential Information agrees in writing to the disclosure of any such Information to any person other than those listed in paragraph 9 above, disclosure will be made to such person only based upon the conditions pertaining to, and obligations arising from, this Order and such shall be considered subject to it.
11. Each of the persons to whom Confidential Information is disclosed pursuant to the terms of this Order shall not:
| (a) disclose said Confidential Information to anyone except others permitted to see it pursuant to this Order; and |
| (b) use said Confidential Information for any purpose except for the purpose of this litigation. |
subject to the determination or adjudication of any Challenged Information.
12. The termination of proceedings in this proceeding shall not relieve any person to whom Confidential Information was disclosed pursuant to this Order from the obligation of maintaining the confidentiality of same in accordance with the provisions of this Order.
13. Upon final termination of this proceeding (including appeals), each Party to this proceeding shall destroy within sixty (60) days all Confidential Information produced pursuant to this Order, including all copies of such matter which may have been made, but not including one archive copy.
14. This Order shall not be construed:
| (a) to prevent any individual or Party or its otherwise respective counsel from making use of information which was lawfully and without legal restriction in its possession prior to the date of this Order; |
| (b) to apply to information derived independently of disclosure hereunder; |
| (c) to apply to information which any individual or Party or its counsel lawfully and without legal restriction obtained froma person having the right to disclose such information; |
| (d) to prevent any individual or Party or its respective counsel to seek a determination or adjudication of the confidential character of any Challenged Information. |
| 15. Nothing in this Order shall foreclose or limit any Party: |
| (a) from asserting that any Information designated as "Confidential" pursuant to this Order is, in fact, not confidential; |
| (b) from opposing the production of any Information or the answering of any questions o n any proper grounds whatsoever (including relevance and privilege); and |
| (c) from disclosing or using in any manner it sees fit its own information designated as "Confidential Information". |
16. Any Party may waive in writing all or any part of his or its right under this Order and shall have the right to apply to the Court for any modification or variation of the strictures on disclosure imposed by this Order as applied to any specific item or items of designated Confidential Information or to determine the confidentiality of Challenged Information.
17. In the event of a challenge to the confidentiality of designated Confidential Information, the Party asserting confidentiality shall have the burden of proving on a balance of probabilities that the information is, in fact, confidential.
18. In the event of a challenge to the confidentiality of designated Confidential Information, Confidential Information shall not include information which:
| (a) is or was public knowledge or part of any public record, or which becomes public knowledge or part of any public record by means not in violation of the provisions of this Order or of the law; |
| (b) is or was acquired lawfully from a person not a Party to this action in circumstances not governed by an obligation of confidence; |
| (c) is or was already known to the receiving Party, affiliates, its counsel or experts; or |
| (d) is or was independently developed by the receiving Party, its counsel or experts. |
19. The terms and conditions of use of Confidential Information ad the maintenance of the confidentiality thereof during any hearing of this proceeding shall be matters in the discretion of the Court.
Max M. Teitelbaum
Judge
__________________1 Ab Hassle, Astra AB and Astra Pharma Inc. v. The Minister of National Health and Welfare, RhoxalPharma Inc. and Takeda Chemical Industries, Ltd. (3 November 1998), T-366-98 (F.C.T.D.).
2 (1993), 51 C.P.R. (3d) 305 (F.C.T.D.).
4 Apotex, supra note 2 at 309-10.
5 S.C. 1980-81-82-83, c. 111, Sch. I "1".
6 Cross-examination of Dr. Rhodes, Applicant"s Supplementary Motion Record, Tab 17 at 316-17.
9 Affidavit of M. Lodin (27 August 1998), Applicant"s Supplementary Motion Record, Tab 7 at 43.