2023 FC, 2023 FC 1141

Date: 20230824 Docket: T-1484-22 Citation: 2023 FC 1141 Toronto, Ontario, August 24, 2023 PRESENT: Mr. Associate Judge Michael D. Crinson BETWEEN: GILEAD SCIENCES, INC. AND GILEAD SCIENCES CANADA, INC.

Plaintiffs and JAMP PHARMA CORPORATION Defendant ORDER AND REASONS [ 1 ] This motion for an extension of time to serve a notice of inter partes testing and to conduct that testing arises in the context of two proceedings commenced pursuant to subsection 6(1) of the Patented Medicines (Notice of Compliance) Regulations, SOR/93-133 (the " “ Regulations ” " ). [ 2 ] In T-1484-22 the patent in issue is Canadian Patent No. 2,845,553 (the " “553 Patent” " ) entitled " “Tenofovir Alafenamide Hemifumarate” " and 20 claims are alleged to infringe.

Of particular note in the context of this motion are allegedly infringed claims1, 8 and 9 which provide as follows: 1 . Tenofovir Alafenamide Hemifumarate. 8. The hemifumarate of claim1 that has a differential scanning calorimetry (DSC) onset endotherm of 131 + 2 0 C 9.

The hemifumarate of claim 8 that has a DSC onset endotherm of 131 + 1 0 C [ 3 ] In T-1607-22, the two patents at issue are the 553 Patent and Canadian Patent No. 2,990,210 (the " “210 Patent” " ) entitled " “Pharmaceutical Formulations comprising Tenofovir and Emtricitabine” " , and 28 claims are alleged to infringe. [ 4 ] In each case the Plaintiffs (collectively " “GILEAD” " ) allege there would be infringement of the asserted patents directly or indirectly or as a result of inducement if the Defendant ( " “JAMP” " ) makes, uses offers for sale or sells the product containing Tenofovir Alafenamide Hemifumarate ( " “TAF Hemi” " ) in accordance with JAMP’s abbreviated new drug submission.

JAMP denies infringement and challenges the validity of the patents on multiple grounds including anticipation, obviousness, over breadth and insufficiency. [ 5 ] The Defendant casts this motion as one for an extension of time to serve a notice of inter partes testing and conducting the testing which follows from the previous testing conducted on the Defendant’s behalf in May 2023. The Defendant argues the testing is limited in scope to Differential Scanning Calorimetry " (“DSC” " ) which would take four hours to complete.

The Plaintiffs argue, that this is a motion for a second round of inter partes testing which was not contemplated in a Scheduling Order issued in these proceedings on January 26, 2023 (the " “Scheduling Order” " ) which required the parties to serve on each other notices for inter partes testing by Friday April 21, 2023 and to complete the testing described in those notices by Monday June 12, 2023. [ 6 ] The issues to be decided on this motion are: A . Whether an adverse inference should be drawn against the Defendant in light of the alleged failure to provide the best evidence on the motion? B .

Whether Rule 399 of the Federal Courts Rules , SOR/98-106 (the " “ Rules ” " ) is the determinative test to be applied in these circumstances on the basis that the defendant is seeking a variation of the earlier Scheduling Order, and if so, has the defendant satisfied the test for granting such a variation? C . If the test for an extension of time pursuant to Rule 8 of the Rules is the applicable test, is it satisfied in the circumstances of this motion? I.

Preliminary Evidence Issue [ 7 ] GILEAD critiques the evidence provided in JAMP’s motion record, specifically an affidavit from a law clerk (the " “WYSOKINSKI affidavit” " ), which includes both direct evidence incorporating documents and hearsay evidence. GILEAD argues that because JAMP relies solely on hearsay evidence this is fatal to JAMP’s motion. I disagree that the character of the evidence is fatal to JAMP’s motion.

The WYSOKINSKI affidavit is an affidavit from a law clerk working for JAMP’s solicitors of record which states that " “the affiant has personal knowledge except where the facts are stated to be based on information and belief” " . The WYSOKINSKI affidavit includes (

i) direct evidence about exchanges between the parties’ counsel relating to inter partes testing as well as (ii) hearsay evidence from two different lawyers acting for JAMP.

[ 8 ] Rule 81 of the Rules specifically permits as evidence on a motion an affidavit that contains facts within the deponent’s personal knowledge and statements as to the deponent’s belief provided the grounds for such belief are included. Thus, the Court may admit such affidavits which may include hearsay evidence without an analysis of necessity or reliability ( Tim Gray et al. v. Canada, 2019 FC 301 at paras. 131-133 ).

However, where the affidavit incorporates information on belief rather than evidence of persons having personal knowledge of particular facts the Court may draw an adverse inference pursuant to Rule 81(2) of the Rules . [ 9 ] Rule 81(2) does not mandate that the hearing Judge draw an adverse inference in the circumstances where hearsay evidence is introduced instead of first-hand evidence. Rather that Rule recognises the discretion that lies with the hearing Judge as to whether an adverse inference should be drawn.

As the Court held in Tim Gray (supra at paras. 139 & 140 ): [139] The drawing of an adverse inference is within the CMJ’s discretion based on her consideration of the circumstances… [140] Where hearsay evidence is admissible, an adverse inference under Rule 81(2) may be drawn and may effect the weight given to such evidence. [ 10 ] One of the lawyers acting for JAMP that provided some of the hearsay information in the WYSOKINSKI affidavit was Mr. Dillonsmith, who had been involved in preparations for testing and the testing itself prior to his temporary departure from the law firm for a paternity leave.

Thus, an adequate explanation is provided for why at least some of the best evidence is not available. Further, there was no cross-examination on the WYSOKINSKI affidavit and no evidence was presented by GILEAD to contradict the evidence in the WYSOKINSKI affidavit. In these circumstances, even if an adverse influence were to be drawn going to the weight of the evidence, to the extent there is no evidence to contradict the WYSOKINSKI affidavit it may be relied upon. II. Background Facts [ 11 ] A

schedule jointly proposed by the parties was embodied in a scheduling order from the Court dated January 26, 2023 (the " “Scheduling Order” " ). The Scheduling Order required the parties to serve notices of inter partes testing by April 21, 2023 and to complete that testing by June 12, 2023. The Scheduling Order also included opportunity for notices of responsive inter partes testing and completion of that responsive testing. [ 12 ] On April 21, 2023 counsel for JAMP sent their notice for inter partes testing (the " “April Notice” " ) to GILEAD’s counsel.

In that notice under the heading " “Nature of the Experimental Procedures to be Performed” " the relevant part of the notice provides: The material that results from each of the experimental procedures to be conducted will be subjected to the following testing to characterize the resulting material: visual inspection; weighing; measurement to determine melting point; nuclear magnetic resonance (“NMR”); and X-ray powder diffractogram (“XRPD”).

In addition, some of the starting material used in the chemical reactions will also be subjected to the following testing to characterize the starting material: visual inspection; weighing; measurement to determine melting point; NMR; and XRPD. [ 13 ] GILEAD’s counsel advised by email that both he and a Dr. Rohani would be attending the testing which had been scheduled for an " “approximately one-week period beginning on May 25, 2023” " . All parties counsel and Dr.

Rohani attended for that testing and while there was some variation of the scheduling of the testing, the categories of testing were completed in that week including the melting point measurement. The melting point measurements had been carried out by Dr. Chong, an expert retained on behalf of JAMP, using Dr. Chong’s Mel Temp equipment. Unbeknown to GILEAD or its counsel, JAMP had been trying to arrange for melting temperature measurement using differential scanning calorimetry " (“DSC” " ) equipment.

At no point prior to this testing, during the testing or upon completion of approximately one week of testing were these attempts to conduct DSC testing communicated to GILEAD or their counsel. [ 14 ] Upon internal review by JAMP’s counsel on June 5, 2023 the absence of the DSC testing was noted and further attempts made by counsel to conduct DSC testing.

On June 7, 2023 JAMP’s counsel sent a further notice of inter partes testing (the " “June Notice” " ) which stated the " “nature of the experimental procedures to be performed are DSC testing” " and that the " “testing is anticipated to take place over an approximately one-day period on June 8, 2023” " . The cover email with which that notice was sent provided: The testing is scheduled to be conducted tomorrow June 8th in advance of the deadline of June 12 pursuant to Item 40 of the Scheduling Order dated January 26, 2023.

If individuals are not available to attend on this date on Gilead’s behalf, we are agreeable to rescheduling to a mutually convenient date and agree to an extension of the deadline for responding testing in Item 42 of the Scheduling Order. [ 15 ] This notice was the first indication GILEAD received of proposed further testing. GILEAD did not consent to the proposed testing of June 8, 2023. [ 16 ] It is this dispute regarding the proposed DSC testing that has led to this motion.

The motion is brought by JAMP for an extension of time beyond those provided in the Scheduling Order to serve a notice of inter partes testing and conduct the DSC testing. The motion is brought pursuant to Rule 8(1) of the Rules . III. Applicable Law and Its Application [ 17 ] GILEAD argues that the motion must fail as it is a motion to vary an Order and Rule 399 applies to varying an order. Rule 399 provides:

" Setting aside or variance " " 399(2) On motion, the Court may set aside or vary an order (

a) by reason of a matter that arose or was discovered subsequent to the making of the order; or " " (

b) where the order was obtained by fraud. " " Annulation " " 399(2) " " La Cour peux, sur requête, annuler ou modifier une ordonnance dans l’un ou l’autre des cas suivants: " " (a) " " des faits nouveaux sont survenus ou ont été découverts après que l’ordonnance a été rendue; " " (b) " " l’ordonnance a été rendue par fraude. " [ 18 ] No suggestion of fraud has been made in the context of this motion. Rather, GILEAD argues that this is in reality a motion for a second round of inter partes testing which was not contemplated in the Scheduling Order and that JAMP has not satisfied and does not meet the standard demanded by Rule 399(2)(

a) as stated in Alsaloussi v Canada, 2021 FC 168 at para. 14 : The case law has established that three conditions must be satisfied before the Court may grant a motion under Rule 399(2) (a): 1) the newly discovered information must be a “matter” with the meaning of the Rule; 2) the “matter” must not be one which was discoverable prior to the making of the order by the exercise of due diligence; and 3) the “matter” must be something which would have a determining influence on the decision in question ( Ayangma v Canada , 2003 FCA 382 at para 3 ; Procter & Gamble Pharmaceuticals Canada Inc v Canada (Minister of Health) , 2003 FC 911 [P&G] at para 15).

To be successful, an applicant is required to meet all three branches of this Rule 399(2)(

a) test. [ 19 ] I conclude that Rule 399(2)(

a) has no application here. First, the motion brought by JAMP places no reliance on this Rule in seeking the relief requested. Second, JAMP has not identified what they would rely on as " “matter that arose or was discovered subsequent to the making of the” " Scheduling Order. Finally, JAMP has put forth no evidence that the " “matter” " was not one which was discoverable prior to the making of the Scheduling Order by the exercise of due diligence. JAMP has provided no basis for granting the relief it seeks based upon Rule 399. [ 20 ] However, this does not end the matter.

Contrary to the argument put forth by GILEAD this is not a motion for a second round of inter partes testing. It is a motion for an extension of time to complete testing within the scope of the first notice of inter partes testing. The April notice stated the testing included " “measurement to determine melting point” " . While this phrasing would include the Mel Temp testing that was actually conducted it was also avoidably obscure as to whether it was intended to include DSC testing of melting temperature. [ 21 ] Rule 8 authorises the Court to extend a period fixed by an order.

On this motion JAMP is seeking an extension of time to complete testing it contemplated though did not explicitly communicate to GILEAD. [ 22 ] Claims 8 and 9 of the 553 Patent which are both in issue and which both refer to a differential scanning calorimetry onset endotherm may have led GILEAD to have expected DSC testing to be performed. Equally the lack of such testing may have been understood to mean that element of the claims was no longer in issue. The evidence on this motion indicates that JAMP was attempting throughout to conduct DSC testing, albeit unsuccessfully.

These efforts and JAMP’s intention were not explicitly communicated to GILEAD except in the context of this motion. [ 23 ] The Federal Court of Appeal held in Attorney General of Canada v. Larkman, 2012 FCA 204 at paras. 61-62 that the following factors are relevant when the Court is considering a request for an extension of time: A . Did the moving party have a continuing intention to pursue the proceeding? B . Is there some potential merit to the application? C . Has the opposing party been prejudiced from the delay? D .

Does the moving party have a reasonable explanation for the delay? [ 24 ] However, that same Court also held that these factors are not a checklist but rather are factors, of which there may be others in specific cases that guide the Court is deciding whether the granting of the requested extension of time is in the interests of justice. That is, the overriding consideration is that the interests of justice be served.

Hence, the relative importance of each of these factors may vary with the circumstances of each case and it may not be necessary for each factor or even most of the factors to be decided in the moving party’s favour. [ 25 ] The ongoing efforts of JAMP to pursue the testing in addition to other steps it has taken in this proceeding almost concurrently demonstrate a continuing intention to pursue the proceeding.

The evidence also supports the argument of JAMP that is has had a continuing intention to conduct DSC testing. [ 26 ] As for the issue of merits, the parties have focussed upon the merits of the DSC testing rather than the merits of the case advanced by JAMP.

The 553 Patent itself refers to the impact of the melting point of the hemifumarate form of Tenofovir Alafenamide as determined from DSC data at paragraph 72: [0072] As shown by the DSC data, the hemifumarate form of Tenofovir Alafenamide has a melting point that is about 10 °C higher than that of the monofumarate form, indicating that the hemifumarate form has improved thermal stability as compared with the monofumarate form.

[ 27 ] In the context of claims 8 and 9 of the 553 Patent the differential scanning calorimetry onset endotherm of the claimed compound is at issue. The determination of the melting point by DSC data may therefore be significant to either party to narrow issues in dispute or to the Court to determine issues on their merits.

It is evident that the determination of melting point using DSC data is relevant to the issues in dispute in this proceeding. [ 28 ] On the issue of prejudice it is clear that there was time available for the parties to conduct the DSC testing during the week that the balance of the testing referred to in the April Notice was conducted. As the June Notice proposes the DSC testing will occur in the same location it is clear that the delay may require reattendance by one counsel and one expert as was planned at the initial testing.

However, this is prejudice that may be compensated by costs. [ 29 ] The explanation offered by JAMP for the delay is weak. In essence it amounts to the following: A . One of the experts retained by JAMP to do testing " “did not have a DSC machine in his laboratory” " and he was not aware of any such machine in his university department; B . The second of the experts retained by JAMP to do testing was unable to perform DSC testing; C .

When DSC equipment was identified at the same university as the scheduled testing, there was insufficient time to arrange for the DSC testing. [ 30 ] A lack of planning or organisation does not constitute a good explanation for the delay. [ 31 ] Upon consideration of the factors above and where the interests of justice lie in the circumstances present here I conclude the extension of time requested ought to be allowed on the condition that GILEAD be compensated for the financial prejudice it will suffer as a consequence of reattendance to observe the DSC testing. IV.

Costs [ 32 ] The root problem of this motion was caused by a lack of clear communication about the intent to conduct DSC testing and the difficulties that were experienced in trying to

schedule such testing. It was not until this motion was brought by JAMP that GILEAD had any clear picture that DSC testing had been intended. From the perspective of GILEAD they had received a notice of inter partes testing which included melting temperature measurements, they attended the testing and the testing was completed. [ 33 ] In a context such as this proceeding brought pursuant to the Regulation s it is important the parties cooperate to move that matter forward expeditiously. This obligation is embodied in

section 6.09 of the Regulations as follows: " 6.09 Every first person, second person and owner of a patent shall act diligently in carrying out their obligations under these Regulations and shall reasonably cooperate in expediting any action brought under subsection 6(1) or a counterclaim brought under subsection 6(3) to which they are a party. " " SOR/2017-166, s. 7. " " 6.09 " " Les premières personnes, secondes personnes et propriétaires de brevets sont tenus d’agir avec diligence en remplissant les obligations qui leur incombent au

titre du présent règlement et, s’ils sont parties à une action intentée en vertu du paragraphe 6(1) ou à une demande reconventionnelle faite en vertu du paragraphe 6(3), de collaborer de façon raisonnable au règlement expéditif de celle-ci. " " DORS/2017-166, art. 7 . " [ 34 ] What constitutes reasonable cooperation may be expected to vary from case to case but some guidance may be drawn from Rules of Professional Conduct or from publications such as the Advocates Society Principles of Civility ( " “Principles of Civility” " ).

While the Principles of Civility are not binding upon counsel they provide suggestions as to what may be considered reasonable. For example, those principles suggest: A . When advocates are about to send written or electronic communication to the court, or are about to take a fresh step in a proceeding that may reasonably be unexpected, they should provide opposing counsel with reasonable notice when to do so does not compromise a client’s interests (principle 37). B .

Advocates should consider whether oral communication with opposing counsel may be more effective than written communication in resolving issues (principle 41). C .

Advocates should consult opposing counsel regarding scheduling matters and make a genuine effort to avoid conflicts (principle 46). [ 35 ] The failure to explicitly refer to DSC testing in the April Notice, the lack of communication about scheduling the DSC testing, and the lack of explanation as to why there was no communication prior to the June Notice to explain the absence of DSC testing have contributed to the need to bring this motion, which may otherwise have been unnecessary. As a consequence no costs shall be ordered. ORDER THIS COURT ORDERS that :

1 . JAMP is granted an extension of time to August 31, 2023 to conduct DSC testing related to the determination of melting point. 2 . Counsel for GILEAD and one expert are to be given a practical opportunity to attend the above DSC testing related to the determination of melting point. The reasonable disbursements incurred by this expert for GILEAD to attend the testing shall by paid by JAMP forthwith. 3 . No costs are awarded for this motion. "Michael D. Crinson" Associate Judge FEDERAL COURT SOLICITORS OF RECORD DOCKET: T-1484-22 AND t-1607-22 STYLE OF CAUSE: GILEAD SCIENCES, INC.

AND, GILEAD SCIENCES CANADA, INC. v JAMP PHARMA CORPORATION PLACE OF HEARING: Toronto, Ontario DATE OF HEARING: JUNE 29, 2023 ORDER AND REASONS: CRINSON A.J. DATED: August 24, 2023 APPEARANCES : Martin Brandsma Jordana Sanft For The Plaintiffs Warren Sprigings For The Defendant SOLICITORS OF RECORD : Lenczner Slaght LLP For The Plaintiffs Sprigings Intellectual Property Law For The Defendant