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Date: 20061106

Docket: T-2175-04

Citation: 2006 FC 1333

Toronto, Ontario, November 6, 2006

PRESENT:     The Honourable Mr. Justice Hughes
















[1]               These Reasons and Judgment deal with the issue of costs which was left open, pending further submissions from Counsel for the parties, in the Judgment dated October 17, 2006.  Those submissions have now been received.


[2]               The trial of this action took place in the period from early September to early October 2006, with a few days interruption in the middle.  From start to finish the proceedings took approximately two years from start to Judgment, a remarkable achievement in the context of a complex patent action.  The co-operation between counsel for the parties is undoubtedly substantially responsible for this efficient use of time.


[3]               It now comes to the matter of costs.  In arriving at a disposition on this issue, I am guided by the following legal principles:


1.                  A successful party is usually entitled to receive costs, the scale of such costs are not intended to be punitive or extravagant, but is intended to be a compromise between compensating the successful party and not unduly burdening an unsuccessful party.  (AB Hassle v. Genpharm Inc., (2004), 34 C.P.R. (4th) 18 (F.C.) [A.B. Hassle]).


2.                  Patent cases are not to be treated any differently than other types of cases in this Court. (AB Hassle, supra).


3.                  Where a patentee and licensee are each plaintiffs, they are entitled to separate representation and to be compensated in costs accordingly.  This concept is not strictly limited to a situation where separate representation has been ordered, but such limitation may be taken with account. (Apotex Inc. v. Merck & Co. Inc., 2006 FCA 324 [Apotex]).


4.                  Pre-trial Orders are not to be dealt with in dealing with costs after trial unless the pre-trial Order expressly says so. (Apotex, supra).


5.                  The successful party’s lack of success on certain issues may be considered (Merck & Co. Inc. v. Apotex Inc., 2006 FC 631, aff’d 2006 FCA 324 [Merck]).


[4]               Certain other principles will arise when considering specific issues.


[5]               As to general factual matters and the circumstances of this case, I have been particularly mindful of the following:


1.                  There was substantial co-operation between Counsel as noted above and in my earlier Reasons for Judgment.


2.                  The only substantial issue of factual contention was the Gerster 1982 poster.  In my opinion, Plaintiffs’ counsel should not have pursued the objections that they raised to having Dr. Gerster testify.  His testimony should have been admitted without all the fuss that Plaintiffs’ raised.  As it turned out the testimony was brief and truthful and could readily be dealt with by the parties.


3.                  The only issue remaining at trial was that of validity of Claim 4.  The Defendant had, by trial, admitted infringement and restricted its issues as to validity.  The determination as to validity was by no means a certainty for the Plaintiffs, and while they were successful as to that issue, the attacks made on validity were substantial and meaningful.  The Defendant has already prevailed on that point in earlier NOC proceedings.


4.                  The Plaintiffs or related parties had already been through many of the same issues at trial and appeal in the United States Courts.  The review of documents and evidence and preparation of translated material, to a considerable extent, would have had to be done for those proceedings well prior to similar preparation for the proceedings in Canada.


5.                  The Plaintiff, Daiichi, had one senior counsel and one junior counsel gowned; the Plaintiff, Janssen-Ortho, had one senior and two junior counsel gowned.  The Defendant had one senior and three junior counsel gowned.  In addition, there were other Canadian and foreign lawyers present for much of the trial as well as paralegals and other assistants.


6.                  For the witness Hayakawa, there was provided an official Japanese/English interpreter and a “check” interpreter provided by the Plaintiffs.


7.                  The Plaintiffs requested, at their expense, “real time” court reporting.


[6]               Other factual matters will arise as particular circumstances are discussed.


[7]               Turning, then, to the particular matters:

1.  Award of Costs

[8]               The Defendant argues that each party should bear its own costs.  I do not find that this is proper.  The Plaintiffs were successful and are entitled to an award of costs.  That award is to be governed by these Reasons however.


2.  Lump Sum or Taxation

[9]               The Plaintiffs claim to have spent several millions of dollars each in pursuing this action, including well over a million in disbursements.  They ask for a lump sum award for counsel’s fees and full compensation for disbursements.


[10]           I find that it is not appropriate to award a lump sum.  The case was extensive and simply to award an arbitrary figure without much more by way of evidence and explanation would be inappropriate.  It would be preferable to have an assessment officer review the relevant matters in detail and come to a reasoned decision within the context of the principles set out in these Reasons.


3.  Scale

[11]           The case was a typical, hard fought patent case.  An award at the upper end of Column IV is appropriate and consistent with awards made in Merck, supra and Monsanto Canada Inc. v. Schmeiser, (2001) 12 C.P.R. (4th) 204, aff’d (2003) 22 C.P.R. (4th) 455 (F.C.A.).


[12]           Thus, the costs are to be taxed at the upper end of Column IV by an assessment officer.



4.  Specific Directions to Taxing Officer

1. Pre-Trial Proceedings and Orders

[13]           Any pre-trial Order that directs that costs be left to the Trial Judge, if any, are to be treated as if an award was made to the Plaintiffs on the upper end of Column III (Merck, supra 15).  Otherwise, the disposition of costs made on all pre-trial Orders are unaffected.  Any pre-trial Order that is silent as to costs means that no costs have been awarded to any party.  (101359 Ontario Inc. v. Bedesee Imports Ltd., (8 November 1999), T-705-99 (Fed. Ct.)).


2.  Travel and Out of Town Living Expenses

[14]           Any travel and out of town living expense that are allowed to be recovered are to be at a modest level.  Travel shall be allowed at economy class rates.  Accommodation shall be allowed at moderate but comfortable single room rates.  No alcohol, movies or entertainment expenses may be recovered.


[15]           For travel out of North America, two extra days of accommodation expenses beyond that for the days actually spent working are allowed.  Within North America, no extra days are allowed.


3.  Photocopying and Electronic Copies

[16]           Photocopying is allowed, where indicated in these Reasons, at the lesser of the actual charge or $0.25 per page.  I am mindful that law firms may have set up in-house copy centres, possibly as separate entities.  In this regard, the comments of this Court in Diversified Products Corp. v. Tye-Sil Corp, [1990] F.C.J. No. 1056 (QL) are appropriate in stating that the sum of $0.25 per page is not simply an amount that can be charged without more.  When an in-house service is used, the assessment officer must be advised as to the actual costs.  The Court said:

With respect, I cannot agree with the reasoning of the Taxing Officer.  The item of photocopies is an allowable disbursement only if it is essential to the conduct of the action.  Therefore, this is intended to reimburse a party for the actual out-of-pocket cost of the photocopy.  The $0.25 charge by the office of Plaintiffs’ counsel is an arbitrary charge and does not reflect the actual cost of the photocopy.  A law office is not in the business of making a profit on its photocopy equipment.  It must charge the actual cost and the party claiming such disbursements has the burden to satisfy the Taxing Officer as to the actual cost of the essential photocopies.


[17]           Electronic copies are allowed at the lesser of normal rates charged by commercial services or the actual expenses.


[18]           Nothing is allowed for copies of legal authorities provided at trial as this was excessive as commented upon at trial.  Up to eight copies of other documents, if made, and actually provided at trial or on discovery are allowed.


4.  Interpreters

[19]           The fees charged by the official Japanese/English Interpreter at trial and one such interpreter attending on discovery are allowable. 


[20]           Nothing is allowed for the “check” interpreter at trial or any other interpreter services or disbursements used in connection with this action.



5.  “Real Time” Reporters

[21]           The expenses for “real time” reporting services at trial, on discovery or elsewhere are not allowable.  The basic fees charged to Plaintiffs for reporting services at trial and on discovery are allowable.


6. Trips

[22]           One trip for no more than two counsel, to Japan is allowed.  Trips by witnesses for discovery appearance and for trial appearance are allowed.


[23]           No other trips by any other persons are allowed save for witnesses at discovery and those appearing at trial as further named in these Reasons.


7. Other Counsel, Clients, Non-Appearing Experts and Others

[24]           No costs or expenses are to be allowed for persons other than Counsel expressly referred to in these Reasons and witnesses expressly referred to in these Reasons.


[25]           The attendance of a client or its representatives has traditionally been an expense borne by the client.  Similarly, if client chooses to have Canadian or foreign lawyers also assist, that is an expense that it should bear alone.  The same applies to experts who did not appear as witnesses, but assisted in other capacities, that is the choice of the party, but not an expense to be borne by others.  The same applies in respect of paralegals, clerks, students and any other persons engaged by the Plaintiffs in respect of this action unless otherwise expressly referred to in these Reasons.


8. Interest

[26]           Costs bear interest from the date of the Reasons and Judgment (CCH Canadian v. Law Society (2004), 37 C.P.R. (4th) 323).  The rate of interest is five percent (5%) not compounded, as established by the Interest Act, R.S. 1985, c. I-15, s.4; 2001, c.4 s.91.  If the Defendant wishes to minimize its exposure in this regard, it should promptly move to have costs assessed.


5.  Discovery of Witnesses and Document Discovery

1. Documents

[27]           The Plaintiffs advise that masses of documents were produced and provided in both paper and electronic form.  Many of these documents were translated from Japanese to English.


[28]           The Defendant says that most of the documents were simply those already produced in the United States proceedings and little discrimination was exercised in simply turning them over for this Canadian proceedings.  Similarly, translations had already been made for the United States proceedings.


[29]           The Plaintiffs may only recover for work done and expenses incurred for the Canadian proceedings and not for work or expenses already incurred for the prior United States proceedings.


[30]           The assessment officer is to be guided by the above statement, the onus shall be on the Plaintiffs to demonstrate that work and expenses were incurred expressly for these Canadian proceedings.


2. Discovery of Witnesses

[31]           Travel of witnesses for attendance on discovery, which I am advised all took place in Toronto, is allowable on the basis previously set out.


[32]           The Plaintiffs are entitled to the attendance of one senior and one junior counsel at such discovery.  In addition to the days actually spent on discovery, the Plaintiffs are entitled to one day preparation time for each day spent on discovery.


[33]           No fees or disbursements are allowed in respect of the re-attendance of any witnesses Ordered by the Court.


6. Pre-Trial Issues

1. Pleadings

[34]           The Plaintiffs are entitled to costs allowed by the Tariff for pleadings, but not for the amended Reply and Defence to Counterclaim, which by Order dated September 16, 2005, were to be paid by the Plaintiffs to the Defendant.  These costs are to be set off against other costs allowed on assessment.


2. Notices to Admit

[35]           One set of costs only are allowed to the Plaintiffs


3. Pre-Trial Conference

[36]           There was none.  No costs are allowed.


7.  Trial

1. Counsel

[37]           The Plaintiffs, collectively, had two senior and four junior counsel gowned.  The Defendant had one senior and three junior counsel gowned.


[38]           I allow the Plaintiffs collectively, to recover the fees for the two senior and two junior counsel.


2. Gerster

[39]           I have previously referred to the unnecessary objections raised by the Plaintiffs to the evidence of Dr. Gerster.  I estimate that one trial day was consumed by such objections.  The Defendant, one senior and one junior counsel, is awarded fees from one trial day to be set off against costs otherwise assessed in favour of the Plaintiffs.


[40]           In addition, the travel expenses and any fees charged by Dr. Gerster are allowed to the Defendant and are similarly set off.


3.  Plaintiffs Factual Witnesses

[41]           The travel and accommodation expenses of Dr. Hayakawa, Dr. Kahn and Mr. Enstrom are allowed on the basis earlier set out, to the extent actually incurred.

[42]           One day for one senior counsel for preparation of each of these witnesses is allowed.


4.  Expert Witnesses

[43]           I am concerned with what has been increasingly observed as mounting and often extravagant fees charged by expert witnesses.  While a party is free to engage a person for expert services and pay whatever fee is negotiated, that fee should not become simply allowable on an assessment.  Therefore, such fees should, for assessment purposes, be capped for days spent by the witness in attendance in Court, whether testifying or not, at the lesser of fees actually charged or those charged for daily services to the same client for senior counsel attending at trial.  For preparation time the cap will be one half such senior counsel fee.


[44]           Only the fees and expenses of the following expert witnesses called by Plaintiffs at trial will be allowed:

Dr. Wentland

Dr. Klibanov (except no fees or disbursements are allowable for his evidence in Reply to Gerster)

Dr. Hooper

Dr. Zhanel

Dr. Rodricks

Dr. Myerson

Dr. Bartlett (expert no fees or disbursements are allowable for his evidence in reply to Gerster)

Dr. Partridge


[45]           In addition, the fees and disbursements on the same scale as previously discussed for the witness Ms. Langley, are allowed. 


[46]           The fees and disbursements not mentioned above shall not be allowed.  Such evidence was not sufficiently relevant to the issues in this action.


5. Preparation of Memoranda

[47]           Plaintiffs are entitled to the fees of two senior and two junior counsel for three days for preparation of memoranda of argument used at trial including submission as to costs.


8.  Services after Trial and Taxation of Costs

1.  Services After Trial

[48]           No special or additional matters beyond the Tariff are allowable.


2.  Taxation of Costs

[49]           Costs shall be assessed, in accordance with the Reasons, by an assessment officer.  That officer shall take into account reasonable fees and disbursements incurred for preparation and attendance in respect of such assessment.  It is expected however, that the Plaintiffs could prepare a draft bill of costs in line with these Reasons and the Defendant may make a reasonable offer as to costs.  This, if it occurs, should be taken into account.


9.  General

[50]           The assessment officer is to  proceed to assess fees and disbursements as set out in the Tariff, at the upper end of Column IV, consistent with the instructions and guidelines as set out in these Reasons.  Unless otherwise allowed in these Reasons, no fee or disbursement(s) beyond that set out in the applicable Tariff is to be allowed.  Disbursements allowable, but not otherwise discussed in these Reasons, are to be proven and allowed only to the extent that they were reasonably incurred for the purposes of this action and are at a level no greater than those charged in arms length commercial transactions.







1.                  The Plaintiffs are entitled to costs at the upper end of Column IV of the Tariff and to reasonable disbursements as set out in these Reasons;


2.                  The Defendant is entitled to fees and disbursements with respect to Dr. Gerster and with respect to Plaintiffs’ amended pleadings as set out in these Reasons;  such costs are to be set off against those allowed to the Plaintiffs;


3.                  An assessment officer of this Court shall assess such costs in a manner as directed by these Reasons; and


4.                  Costs bear interest at the rate of five percent (5%) per annum, not compounded, from the date of issue of this Judgment.


“Roger T. Hughes”








DOCKET:                                                      T-2175-05


STYLE OF CAUSE:                                      Janssen-Ortho et al. v. Novopharm Limited


PLACE OF HEARING:                                Toronto, Ontario


DATES OF HEARING:                                September 5 - 28, 2006

                                                                        October 3 – 5, 2006



AND JUDGMENT AS TO COSTS:                        HUGHES J.


DATED:                                                         November 6, 2006




Mr. Neil Belmore

Mr. Ken Clark

Mr. Roger Tam





Mr. Michael E. Charles

Mr. Andrew I. McIntosh

Mr. Joshua Spicer





Mr. David W. Aitken

Mr. Bradley White

Mr. Marcus Klee

Mr. Geoffrey North






Toronto, Ontario






Toronto, Ontario






Ottawa, Ontario



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