BOEHRINGER INGELHEIM (CANADA) LTD. v. BOEHRINGER INGELHEIM INTERNATIONAL GMBH, 2021 FC 227

Date: 20210315 Docket: T-2072-19 Citation: 2021 FC 227 Toronto, Ontario, March 15, 2021 PRESENT: The Honourable Madam Justice Furlanetto BETWEEN: BOEHRINGER INGELHEIM (CANADA) LTD. AND BOEHRINGER INGELHEIM INTERNATIONAL GMBH Plaintiffs and TEVA CANADA LIMITED Defendant ORDER AND REASONS I.

Background [ 1 ] By this motion, the Defendant Teva Canada Limited (“Teva”) seeks to compel the attendance of a substitute discovery witness to give evidence on behalf of the corporate Plaintiffs, Boehringer Ingelheim (Canada) Ltd. (“BIC”) and Boehringer Ingelheim International GmbH (“BII”) (collectively “BI”). [ 2 ] The underlying proceeding is a patent infringement action brought under section 6(1) of the Patented Medicines (Notice of Compliance) Regulations , SOR/93-133 (“ Regulations ”), involving two patents listed on the Patent Register for the medicine afatinib dimaleate. [ 3 ] The proceeding was commenced on December 23, 2019.

Pursuant to paragraph 7(5) (

b) of the Regulations , the Plaintiffs renounced the application of the 24-month stay, relying instead on the data protection provisions for afatinib dimaleate, which will expire in November 2021, and the expiration date of a third patent listed on the Patent Register that is not at issue in the proceeding.

The third patent will expire on December 12, 2021. [ 4 ] The trial of the action is scheduled to commence on September 1, 2021 and Teva is positioned to enter the market upon expiration of the third listed patent. [ 5 ] The discovery of the Defendant has already taken place; however, the discovery of the Plaintiffs and the inventors has been stalled. [ 6 ] Discovery was originally scheduled to be completed by August 14, 2020, but completion was postponed until October 30, 2020 because of COVID-19. [ 7 ] On October 6, 2020, counsel for BI proposed a

schedule for the examinations, starting with the inventors (each of whom reside in Germany or Austria), followed by an employee of BII, Dr. Tim Sperling (a resident of Germany), who would serve as the representative on behalf of both corporate Plaintiffs.

All of the examinations were to be conducted by Zoom video. [ 8 ] On October 7, 2020, counsel for BI advised of its understanding that the local laws in Germany and Austria prevented witnesses from being examined in their home countries for a Canadian proceeding and that the witnesses would need to travel outside of Germany and Austria to be examined by videoconference. Counsel for BI raised concerns regarding the COVID-19 situation in Europe and limitations on the availability for safe and suitable examination locations and travel arrangements.

Counsel advised: If the situation deteriorates further safe arrangement for witness examination may not be available for one or more of the witnesses. In that event, any examinations of German or Austrian nationals will need to be conducted in accordance with the requirements of the Hague Convention and German/Austrian law. At present, we expect all examinations to proceed as scheduled.

Our client continues to monitor the situation and will make all reasonable efforts to ensure that examinations can be conducted safely on the scheduled dates. [ 9 ] Throughout October a series of exchanges took place between counsel regarding the proposed examinations. Counsel for Teva asked for BI’s position as to whether witnesses could consent and/or waive issues under the applicable Convention so that the examinations could continue without the need for travel.

BI set out its understanding of the applicable Conventions and indicated its view that participating voluntarily in such examinations would violate the applicable German and Austrian laws. By November 12, 2020, the examinations of the inventors and Dr.

Sperling had to be postponed further and counsel for the parties began exchanging correspondence as to possible alternatives. [ 10 ] On November 23, 2020 and December 7, 2020, case management conferences were convened to discuss the status of the examinations for discovery and the parties’ options for completing the examinations of the inventors and Plaintiffs in a timely manner.

At the December 7, 2020 case management conference, the parties indicated that they would be continuing their discussions and obtaining further instructions and were directed to provide the Court, by January 8, 2021, with " “the status of their discussions relating to

the discovery of the plaintiffs and the inventors and the proposed timing of any motions for letters of request (if not already submitted by that time)” " . [ 11 ] On December 7, 2020, counsel for Teva wrote Global Affairs Canada ( " “GAC” " ) to ask for information on the operation of the applicable Convention ( German British Convention Regarding Legal Proceedings in Civil and Commercial Matters , March 20, 1928 (the " “German British Convention” " ): Exchange of Notes (May 17, July 1st, November 11 and 29, 1935) extending to Canada as from the 1 st August, 1935, the Convention between His Majesty and the President of the German Reich regarding Legal Proceedings in Civil and Commercial Matters, E101557 CTS 1935 No. 11) and the process for facilitating examinations for discovery in Germany. [ 12 ] Correspondence continued with GAC throughout December and into January 2021, with counsel for Teva seeking to clarify the procedure under the German British Convention and whether GAC could help to facilitate the examinations in Germany.

Separately, counsel for Teva also contacted the diplomatic offices in Germany to try to obtain information as to consular assistance to proceed with the examinations. [ 13 ] During the same time period, internet searches were conducted to determine the procedure required to pursue Letters of Request in Germany and Austria and counsel for Teva obtained advice from its German counsel as to the timing involved for Letters of Request. [ 14 ] On the basis of information from its German counsel that it could ordinarily take longer than six months for the German Court to process a request for judicial assistance, and an

interpretation of the German British Convention that German court officials might be responsible for conducting the examination, counsel for Teva decided to pursue consular assistance from GAC (Article 11 of the German British Convention), without bringing Letters of Request (under Articles 9 or 12 of the German British Convention). By letter dated January 22, 2021, counsel for BI indicated that it did not have any objection to proceeding under

Article 11 provided that Teva made the necessary arrangements. [ 15 ] On January 22, 2021, counsel for Teva was advised by GAC that the decision to provide consular assistance was discretionary and that it would revert back as to whether assistance would be provided. With the confirmation from GAC still outstanding, the Court issued an Order on January 29, 2021, requesting confirmation from the parties as to their proposed manner for proceeding with the examinations for discovery of the Plaintiffs by no later than February 12, 2021.

On February 2, 2021, GAC confirmed that consular officials were not prepared to assist with the examinations for discovery. After efforts to persuade the consular officials to reconsider their position were denied, the herein motion was brought. II. The Defendant’s Motion [ 16 ] As its relief on the motion, the Defendant seeks an Order: (

a) compelling the attendance of a non-resident of Germany and Austria to be examined as the corporate representative for the Plaintiffs at an examination for discovery to be conducted by videoconference on or before March 31, 2021 with answers to questions undertaken to be delivered by no later than April 30, 2021; (

b) in the first alternative, compelling the attendance of a representative of Boehringer Canada to be examined as the corporate representative for Boehringer Canada at an examination for discovery to be conducted by videoconference on or before March 31, 2021, with answers to questions undertaken to be delivered by no later than April 30, 2021, and declaring the corporate representative to have an obligation to inform themself of relevant information by consulting with personnel within Boehringer International and named inventors having knowledge of information relevant to the issues in dispute; (

c) in the second alternative, requiring Boehringer International to submit to written examination for discovery in accordance with Rule 99 of the Federal Courts Rules , SOR/98-106 , with questions to be served by Teva on or before March 31, 2021 and answers delivered on or before April 30, 2021; (

d) in the third alternative, providing for the completion of examination for discovery of the Plaintiffs by no later than April 30, 2021 by way of oral and/or written examination on such terms as this Honourable Court deems just. III. Evidence – the German British Convention [ 17 ] The only evidence on the motion as to the German British Convention was provided by the Plaintiffs who submitted a declaration from Dr. Barbara Maucher, counsel at the law firm Noerr Part GmbB, Germany. Dr. Maucher was cross-examined in writing on her declaration. [ 18 ] Dr. Maucher’s evidence indicates that: (

a) The German British Convention applies to the examination for discovery of a witness for the purpose of a Canadian action, whether the examination is taken orally or in writing. (

b) The application of the German British Convention is mandatory and there is no express provision in the convention providing a voluntary waiver of its applicability. (

c) Canadian requests for judicial assistance for an examination for discovery to be conducted in Germany can be made in three different ways: i . by the German local court after the consular/diplomatic representatives of Canada have transmitted a letter of request from a Canadian court with a certified translation (Article 9 of the German British Convention);

ii . by the consular/diplomatic representative on its own accord, but for voluntary witnesses only (Article 11 of the German British Convention); iii . by a diplomatic or consular officer of Canada, upon a specific request and after having been nominated by German courts (Article 12 of the German British Convention). (

d) The German British Convention does not apply to evidence taken from German residents outside of Germany provided that the evidence is not taken in the territory of another Contracting Party to the Convention. (

e) The German British Convention does not apply to evidence taken from:

i) non-German residents employed by a German corporate entity where such evidence is taken outside of Germany; and ii) non-German residents employed by a non-German affiliate of a German corporate entity where such evidence is taken outside of Germany, provided that, in each case, the evidence is not taken in the territory of another Contracting Party to the Convention and the non-German resident is not acting as a mere messenger for a German resident in Germany. [ 19 ] On the basis of the evidence provided by Dr. Maucher, and in particular item (

a) above, it is my view that a written examination for discovery of BII completed within Germany (Teva option 2) is not available as such written examination would be contrary to the German British Convention. IV. Issues [ 20 ] The issue for determination on this motion is accordingly whether the Court should compel another witness (i.e., a representative who can be examined outside of Germany or Austria, or a representative from BIC who is also informed as to relevant information from BI and the inventors) to be examined on behalf of the Plaintiffs in accordance with the timeline proposed by the Defendant. V.

Analysis [ 21 ] A party to an action has a fundamental right to examine for discovery any adverse party in the proceeding: Rule 235 , Federal Courts Rules . [ 22 ] Pursuant to Rule 237(1) of the Federal Courts Rules , a corporation that is to be examined for discovery is required to " “select a representative to be examined on its behalf.” " Under subsection 237(3), however, " “[t]he Court, may on the motion of a party entitled to examine a person selected under subsection (1)... order that some other person be examined” " . [ 23 ] The test on a motion for substitution under Rule 237(3) was set out in Liebmann v.

Canada (Minister of National Defence) (1996), 110 FTR 284 at pp. 10-11 (Fed. TD) ( " “ Liebmann ” " ) to include consideration of the following factors: 1 . The party being examined must put forward a proper and knowledgeable witness...; 2 . The witness must be able to give broad discovery, including as to supplemental questions, ...; 3 .

The onus is on the party examining to demonstrate objectively the unsuitability of the witness in an application for a second discovery...and indeed the applicant must show that the first witness is either incapable of giving evidence of his own knowledge or by informing himself...or that the second witness is in a much better positon to give evidence...; 4 . Convenience may be a factor, for in some instances it is more desirable and practical to have the individual involved examined, rather than to have a witness inform herself or himself...; 5 . The expense of a second witness is a factor...; and 6 .

The circumstances of the case, including the responsiveness of the witness, the degree to which the witness has taken pains to inform herself or himself and the materiality of the evidence sought to be canvassed with the second witness are also factors ... and indeed the discovery of a second or subsequent witness should be restricted where its purpose is predominantly that of a fishing expedition... [ 24 ] A party bringing a motion for substitution is not limited by the Rules to raise the issue once examinations for discovery are concluded.

Where no representative has been made available for discovery, a Court can compel a corporate party to select a representative: Nuwave Industries Inc . v. Trennen Industries Ltd ., 2020 FC 867 at para 5 referring to Order in T-767-18 dated September 5, 2019. [ 25 ] In this case, the Defendant is not seeking to replace one witness with another after an examination has already taken place. Indeed, there is no dispute between the parties that the selected corporate representative, Dr.

Sperling, is a knowledgeable witness (factor 1) who would be able to give a broad scope of discovery (factor 2) if he were able to be discovered. The request to replace Dr. Sperling arises because there is currently no practical way to complete the examination of Dr. Sperling on a

schedule that would allow for the trial date that has been set for this action. As such I agree with Teva that it is factor 3 (suitability of Dr. Sperling as the discovery representative) and factor 6 (circumstances of the case) from Liebmann that are of primary importance to this case. [ 26 ] It is noted that neither party provided any evidence on the motion as to the current travel restrictions affecting German residents. The inference from the submissions of the parties was that Dr. Sperling would not be able to travel to a neighbouring country to complete an examination outside the German British Convention under the current COVID-19 guidelines.

[ 27 ] It is undisputed that there is no scheduled date for Dr. Sperling’s examination to take place and no legal means has been obtained to complete the examination in Germany in accordance with the German British Convention. [ 28 ] The Plaintiffs contend that the current predicament lies at the feet of the Defendant. They assert that they have a right to select Dr. Sperling as their representative and that either the parties should wait until travel restrictions subside so that discovery can take place, or that Teva should be required to seek letters of request under

Article 9 of the German British Convention in order to secure a legal right to complete Dr. Sperling’s examination under the German British Convention. With either option, the Plaintiffs admit that the trial would not be able to proceed on the scheduled date. Instead, the Plaintiffs propose that the trial could be adjourned to some unspecified date in 2022. [ 29 ] The Defendant asserts that it has acted with haste to try to obtain a legal means within the German British Convention to complete Dr.

Sperling’s examination, but that there is no longer any time left to secure an alternative legal means to proceed with his examination in Germany and to keep the current trial date. I agree; assuming that travel is and remains restricted the practical reality of the current situation is that there is no ability to proceed with an examination of Dr. Sperling within a time frame that will allow the trial to proceed as scheduled. [ 30 ] It is clear from the correspondence between the parties that discovery of Dr.

Sperling would have already taken place by now in a territory not covered by the German British Convention were it not for COVID-19. It is only because of COVID-19 that the parties have been forced to consider how to comply with the German British Convention to complete the examination of Dr. Sperling within Germany. [ 31 ] COVID-19 has presented many challenges and in my view presents a higher obligation on both parties to work co-operatively to find solutions to the unique problems and complications that they may face because of the pandemic.

One such complication is, in my view, the need for Teva to engage in a request under Articles 9, 11 or 12 of the German British Convention where it would not otherwise be required to do so under the original plan to complete discovery outside of Germany. [ 32 ] As acknowledged by the parties,

section 6.09 of the Regulations imposes a special obligation on the parties to a section 6(1) action to cooperate in expediting the action: 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. [ 33 ] While it is true with respect to this action that the 24-month stay is renounced and therefore that the same time constraints may no longer be in place, there remains an obligation to move actions under section 6(1) of the Regulations forward as efficiently as possible: Apotex Inc . v.

Bayer Inc ., 2020 FCA 86 at para 134 . [ 34 ] Further, there is always an underlying obligation on both parties to advance an action expeditiously: Rule 3 , Federal Courts Rules . This obligation is heightened where a trial date is in place and the delay proposed may put the trial date in jeopardy: Guest Tek Interactive Entertainment Ltd. v. Nomadix, Inc ., 2020 FC 860 at para 35 . [ 35 ] In this case, I do not agree with BI that Teva has not acted with haste.

To the contrary, a review of the many pieces of correspondence on this issue indicate that consistent and ongoing discussions have been taking place since the difficulties with Dr. Sperling’s examination were first raised on October 7, 2020.

This included correspondence with BI, the GAC, diplomatic offices in Germany and German legal counsel. [ 36 ] While I agree with BI that " “justice is not to be subordinated to expedition” " : Apotex Inc. v Merck & Co. , 2003 FCA 438 at para 13 , the " “matter of justice” " in this case must consider not only the right to select a party representative, but also the fundamental right to be able to conduct discovery of a representative within the timeline set for trial. [ 37 ] In this case, it is not sufficient for BI to simply assert that the representative for the Plaintiffs must be Dr. Sperling when Dr.

Sperling cannot practically be examined within a reasonable time frame, particularly where other options may exist, including the availability of another representative who may be able to perform the role adequately. [ 38 ] Counsel for the Plaintiffs admitted at the motion that no inquires had been made to determine whether there was another employee of BI, outside of Germany or Austria, that might be sufficiently knowledgeable to serve as the corporate representative for the Plaintiffs.

Indeed, as counsel admitted, it was quite possible that such an individual may exist. [ 39 ] In view of the complications created by the COVID-19 pandemic, it is my view that it is appropriate in the circumstances to require BI to make inquiries and to use best efforts to identify an alternative discovery representative who can be examined outside of Germany or Austria so that the examinations for discovery of the Plaintiffs can be completed within the timeline proposed. [ 40 ] The Court notes that if travel restrictions ease and the parties determine that Dr.

Sperling is able to travel such that an examination can be completed within the ordered timeframe outside of Germany, the parties may agree to proceed with Dr. Sperling’s examination as originally planned. ORDER in T-2072-19 THIS COURT ORDERS that : 1 . The Plaintiffs shall designate a representative of Boehringer Ingelheim (Canada) Ltd. and Boehringer Ingelheim International GmbH that can be examined outside of Germany or Austria as the corporate representative for the Plaintiffs such that examination

for discovery may be conducted by videoconference by March 31, 2021 (or at a date to be agreed upon by the parties), and answers to undertakings from the discovery provided by no later than April 30, 2021. 2 . Should the travel restrictions in Germany permit Dr. Sperling to be examined as the corporate representative for the Plaintiffs within the time frame set out in paragraph 1, the parties may, on consent, proceed with his examination in lieu of the examination of the substituted representative. 3 .

Costs shall be awarded to the Defendant in an amount to be fixed upon submissions of the parties, which shall be provided within seven (7) days of the date of this Order, and which shall be limited to no more than three (3) pages for each party. “Angela Furlanetto” Judge FEDERAL COURT SOLICITORS OF RECORD DOCKET: T-2072-19 STYLE OF CAUSE: BOEHRINGER INGELHEIM (CANADA) LTD. ET AL V TEVA CANADA LIMITED PLACE OF HEARING: via video conference at Toronto, Ontario DATE OF HEARING: MARCH 10, 2021 ORDER and reasons: JUSTICE FURLANETTO DATED: MARCH 15, 2021 APPEARANCES : J.

Sheldon Hamilton Brandon Heard Abigail Smith For The PLAINTIFFS Nathaniel Lipkus Lillian Wallace Rama Panford-Walsh For The defendant SOLICITORS OF RECORD : Smart & Biggar LLP Barristers and Solicitors Toronto, Ontario For The PLAINTIFFS Osler, Hoskin & Harcourt LLP Barristers and Solicitors Toronto, Ontario For The DEFENDANTS