Date: 20040414
Docket: T-884-03
Citation: 2004 FC 567
BETWEEN:
MERCK & CO., INC. and
MERCK FROSST CANADA & CO.
Applicants
and
APOTEX INC. and
THE MINISTER OF HEALTH
Respondents
REASONS FOR ORDER
HARRINGTON J.
[1] One of the great hallmarks of our society is our open court system. Justice must not only be done but must be seen to be done. Hearings are open to the public and documents produced in litigation are normally subject to public scrutiny. I say normally because we do not live in a world of absolutes. There are reasonable exceptions to just about every reasonable rule.
[2] Federal Court Rule 151 permits the Court, in its discretion, to treat some material as confidential, and restrict access thereto, notwithstanding the public interest in open and accessible court proceedings. In accordance with that Rule, Prothonotary Milczynski issued an order protecting the confidentiality of certain documents and information the applicants ("Merck" in the plural) expect to produce in this case. The respondent Apotex has appealed that order. It submits that there is no need for it. In the alternative, it submits that the order is too restrictive. More particularly, Apotex argues that the Prothonotary was wrong in law in issuing a "counsel's eyes only" order which denies it access to some of Merck's documents and which interferes in its solicitor-client relationship, another hallmark of our rule of law. Apotex also contests the restrictions put on any expert consultant it may retain. In essence Merck has to approve the appointment before the documents and information subject to the protective order are disclosed to the expert. If the parties cannot resolve their differences, the order, as it currently stands, places the burden on Merck to demonstrate to the satisfaction of the Court why the protected documents and information should not be shown to the expert.
[3] Federal Court Rule 51 provides that an order of a prothonotary may be appealed on motion to a judge. The order in question was a discretionary one. It is well established that such orders may not be set aside unless they raise issues vital to the final determination of the case, or are clearly wrong in that the discretion was exercised upon a wrong principle or upon a misapprehension of the facts (Canada v. Aqua-Gem Investments Ltd., [1993] 2 F.C. 425, Z.I. Pompey Industrie v. Ecu - Line N. V. (2003) 224 D.L.R. (4th) 577 (S.C.C.), Merck & Co. v. Apotex Inc. [2003] F.C.J. No. 1925, 2003 FCA 488).
[4] Prothonotary Milczynski's order does not deal with issues vital to the final determination of the case. The basic facts do not appear to have been misapprehended. Consequently, her order must stand unless her discretion was exercised upon a wrong principle.
[5] The protective order arises in the context of a patent dispute. It began with Apotex serving Merck with a notice of allegation pursuant to the Patented Medicines (Notice of Compliance) Regulations stating that it had filed a submission with the Minister of Health for oral tablets for the treatment and prevention of Osteoporosis and treatment of Paget's Disease. It alleged that Merck's Canadian patents would not be infringed by Apotex's fabrication and sale of the tablets. It further alleged that Merck's patent is invalid. Merck responded by filing a notice of application in this Court requesting the Minister not to issue a notice of compliance until after expiration of the patent in question and for an order declaring that Apotex's notice of allegation is invalid.
[6] The leading case on the tension between public interest in litigation and Rule 151 is the decision of Supreme Court of Canada in Atomic Energy of Canada Ltd. v. Sierra Club of Canada et al., [2002] 2 S.C.R. 523. Iacobucci J., speaking for the Court, took note of the test used in patent litigation. He said at paragraph 14:
The granting of such an order requires the appellant to show a subjective belief that the information is confidential and that its interests would be harmed by disclosure. In addition, if the order is challenged, then the person claiming the benefit of the order must demonstrate objectively that the order is required. This objective element requires the party to show that the information has been treated as confidential, and that it is reasonable to believe that its proprietary, commercial and scientific interests could be harmed by the disclosure of the information.
[7] I am satisfied that Prothonotary Milczynski did not exercise her discretion upon wrong principles in granting the protective order. My concern is with the "counsel's eyes only" aspect of the order, as well as the requirement that Apotex identify its experts and obtain either Merck's approval, or, if Merck insists, a Court order, before disclosing confidential documents and information to them.
[8] "Counsel's eyes only" confidentiality orders are not unknown but they are highly unusual. In Apotex Inc. et al. v. Wellcome Foundation Ltd. (1993) 51 C.P.R. (3d) 305 (FCTD) MacKay J. identified three considerations which favoured the grant of such an order in that case. The first was that the terms reflected the terms of protective orders granted upon consent in parallel litigation in the United States in which the same parties were directly or indirectly involved. There is merit in having reasonably comparable protective orders in parallel litigation. In this case there is litigation under way in the United States and a protective order similar to the one granted by Prothonotary Milczynski is in place. It is important to note however that Apotex is not party thereto.
[9] The second consideration identified by MacKay J. was that the terms of the order provide an opportunity to the opposing parties to object to the classification of certain documents as confidential. The Court must ultimately control the "declassification" process. Declassification is properly dealt with in Prothonotary Milczynski's order.
[10] The third consideration was that a party's commercial business or scientific interests associated with trade secrets could be seriously harmed by disclosure that is open to public access. He drew a comparison with documents produced on discovery, which remain private at that stage of the litigation. Apotex argues that much of the information covered by the protective order is already in the public domain in one form or another, but I am not persuaded, as the well established practice is to rely on the good faith of the person seeking the order, without prejudice to Apotex's rights to move the Court to declassify specific documents.
[11] As stated by Strayer, J., as he then was, in Deprenyl Research Ltd. v. CanGuard Health Technologies Inc. (1992) 41 C.P.R. (3d) 228, a "counsel's eyes only" order should only be granted in very unusual circumstances. The onus is on the moving party to establish the need for such a restriction on ordinary disclosure. In Novopharm Ltd. v. GlaxcoGroup Ltd. et al. (1998), 81 C.P.R. (3d) 185, Stone J.A., speaking for the Federal Court of Appeal, specifically approved Deprenyl, supra, and held such orders represent a serious inroad into the right an opposite party ordinarily has of seeing all documents relevant to the case. A "bald" statement that such an order is necessary is insufficient.
[12] In Sierra Club, supra, the Supreme Court was dealing with a confidentiality order which only restricted the public distribution of the documents in issue. There was no question of denying the other parties access thereto, or putting undue restrictions upon experts. As said by Iacobucci J. at paragraph 78:
However, in the hands of the parties and their respective experts, the documents may be of great assistance in probing the truth of the Chinese environmental assessment process, which would in turn assist the Court in reaching accurate factual conclusions.
The same holds true here.
[13] The evidence in support of the application for the order was furnished by Jeffrey Spencer, Director, Marketing Planning of Merck Frosst Canada & Co. He swore that the market for the treatment and prevention of osteoporosis is competitive and expressed concern that if Merck's competitors were given access to confidential information it could advantage them in the market place. He had been informed by his solicitors that material normally filed in Court becomes part of the public record, and was advised by Merck's U.S. attorney that a protective order in similar form had been issued in the United States with respect to the same types of documents.
[14] These "bald" statements may well support the need for a protective order, but they in no way justify interference with the normal solicitor-client relationship, and the right of a party in litigation to consult with outside experts. I must conclude, at least in these respects, that Prothonotary Milczynski misdirected herself on the law. No basis was put forward to support Merck's fear that employers of Apotex, or any outside expert hired by it, would make the confidential information available to the public, and especially to Merck's competitors. I can see merit in issuing an order similar to that in the United States which covers the same or similar patents in a case involving the same parties. However, Apotex is not party thereto and so cannot be said to be using Canadian litigation to circumvent a U.S. protective order.
[15] The role of experts in litigation is somewhat complex. A party might consult with an expert without ever having the intention of calling him or her as a witness. A party may hire an expert in contemplation of calling him or her as a witness and then not do so because the opinion does not support its case. Under our current Federal Court Rules there is no need to inform the other party that an expert has been consulted, or that an expert will be called as a witness, save that expert evidence intended to be relied upon must be disclosed shortly before trial.
[16] It must be remembered that an expert who appears as a witness is not a "hired gun" of the party paying for his or her professional services. The duties and responsibilities of the expert witness were well set out by Cresswell J. in National Justice Compania Riviera S.A. v. Prudential Assurance Co. Ltd. ("the Ikarian Reefer"), [1993] 2 Lloyd's Rep. 68. He said, based on well established authority, which has survived its transatlantic voyage unscathed, expert evidence presented to the Court should be, and should be seen to be, an independent product of the expert uninfluenced as to form or content by the exigencies of litigation. The expert witness should provide independent assistance to the Court by way of objective unbiased opinion in relation to matters within his or her expertise (pg. 81). Although the English Court of Appeal reversed him it was not because of his views on expert witnesses. In the appeal, which is reported at [1995] 1 Lloyd's Rep. 455, Stuart-Smith, L.J., noted that during the course of his judgment Cresswell J. twice referred to the fact that one of the experts was not called as a witness. He expressed surprise and put that fact into the balance against the defendants. It was held he should not have done so. The fact that the expert was not called was wholly irrelevant "and there was a perfectly satisfactory explanation for not calling him". Under our current Rules there is no need to identify experts consulted but not called as witnesses. It goes without saying that therefore there is no need to give any explanation at all.
[17] In the normal course Merck would not know whom Apotex had consulted, and would have no right to know. It advanced no reason whatsoever to support the proposition that an expert on notice of the protective order, and who gave an appropriate undertaking, would nevertheless, in contempt of this Court, pass on the information to the public, or, more particularly, to Merck's competitors.
[18] For these reasons, the appeal is allowed in part and the protective order modified. Costs are in the cause.
"Sean Harrington"
Judge
Ottawa, Ontario
April 14, 2004
FEDERAL COURT
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-884-03
STYLE OF CAUSE: MERCK & CO., INC. and
MERCK FROSST CANADA & CO.
and
APOTEX INC. and
THE MINISTER OF HEALTH
PLACE OF HEARING: TORONTO, ONTARIO
DATE OF HEARING: APRIL 5, 2004
REASONS FOR ORDER : HARRINGTON J.
DATED: APRIL 14, 2004
APPEARANCES:
Allyson Whyte Nowak FOR APPLICANTS
Andrew Brodkin FOR RESPONDENT APOTEX
SOLICITORS OF RECORD:
Ogilvy Renault FOR APPLICANTS
Toronto, Ontario
Goodmans LLP FOR RESPONDENT APOTEX
Toronto, Ontario
Morris Rosenberg FOR RESPONDENT MINISTER
Deputy Attorney General of Canada