Date: 20240229

Docket: T-732-22

Citation: 2024 FC 336

Toronto, Ontario, February 29, 2024

PRESENT: Associate Judge Trent Horne

BETWEEN:

PHARMASCIENCE INC.

Plaintiff

and

JANSSEN INC., JANSSEN ONCOLOGY INC., AND BTG INTERNATIONAL LTD.

Defendants

ORDER AND REASONS

I. Overview

[1] This is a motion to substitute a discovery witness, and to prohibit privilege objections on a continued examination.

[2] After an initial examination, the discovery witness for Janssen Inc and Janssen Oncology, Inc retired. Janssen identified the representative who will attend for any follow-up discovery. Pharmascience objects, asserts that the new witness will be inadequate, and requests an order that Janssen be compelled to produce one of its in-house lawyers as their discovery witness. Pharmascience also says that Janssen has waived privilege over certain kinds of communications, and that Janssen should be precluded from objecting to upcoming questions on the grounds of privilege.

[3] Pharmascience has not demonstrated that the proposed discovery witness will be inadequate. I am not satisfied that I have the ability to broadly prohibit a party from raising privilege objections, particularly where Pharmascience has not demonstrated waiver. The motion will be dismissed.

II. Background

[4] This is an action brought under section 8 of the Patented Medicines (Notice of Compliance) Regulations, SOR/93-133 (“Regulations”).

[5] Janssen Inc and Janssen Oncology, Inc (“Janssen”) selected Bruce Williamson as their representative to be examined for discovery. At the time of his examination, Mr Williamson was the vice-president of commercial functions, sales and marketing.

[6] The examination of Mr Williamson took place over three days. 699 pages of transcript were generated. I have not counted the number of undertakings and refusals, however the beginning of the transcript lists 196 pages where undertakings can be located, and 171 pages where refusals can be located. Janssen served a chart of answers to undertakings and positions on refusals that comprises 279 pages.

[7] A motion for refusals was heard a week before this motion. During that motion, Pharmascience Inc (“PMS”) placed considerable emphasis on instances where it said Janssen waived privilege, either expressly or by implication. The privilege questions were taken under reserve, and the decision had not been released at the time this motion was argued.

[8] In considering the suitability of a discovery witness, one of the considerations is the issues that will be canvassed during the examination, and the ability of the witness to speak to those issues.

[9] At a very high level, the “loss suffered” by PMS will be determined by assessing a but-for world where PMS would have received a notice of compliance and commenced sales of its abiraterone product (the drug in issue in these proceedings) at an earlier date because it was not blocked by the operation of the Regulations.

[10] The assessment of this loss requires the Court to:

1. determine the duration of the period of liability (the relevant period);

2. determine the overall size of the abiraterone market during the relevant period (the abiraterone market);

3. determine the portion of the abiraterone market that would have been retained by Janssen, and the portion that would have been held by generic manufacturers during the relevant period (the generic market);

4. determine the portion of the generic market that would have been held by PMS (PMS’ lost volumes); and

5. quantify the damages that would have been suffered by PMS in respect of PMS’ lost volumes (PMS’ net lost profits).

(Apotex Inc v Sanofi-Aventis, 2012 FC 553 at para 11)

[11] The date on which there would be any generic competition to PMS in the hypothetical “but-for world” (“BFW”) is important for a number of reasons. Not only does such competition influence the size and share of the generic market calculations, but it also impacts the price at which tablets are sold, particularly in the event PMS would be the sole generic (Apotex Inc v Takeda Canada Inc, 2013 FC 1237 at para 61). PMS points out that on a motion in T-1168-21 (a section 8 case brought by Dr Reddy’s Laboratories Ltd and Dr Reddy’s Laboratories, Inc) to compel non-party discovery, Janssen argued that “in section 8 cases, one of the most significant factors in quantifying the claimant’s lost profits is the presence of competitors in the “hypothetical world”. The presence of competitors directly affects the market share that a claimant can capture, the price at which a claimant can sell its drug and the amount of sales rebates that a claimant will offer its customers” (citations omitted).

[12] It appears that an exchange over a particular question was the catalyst for this motion. Beginning at page 230 of the transcript, Mr Williamson was asked a series of questions about Janssen production 103. He gave what appear to be knowledgeable answers arising from the document. One undertaking was given, and a few questions were refused. At page 252, counsel for PMS asked a question based on what would happen in a hypothetical world, and whether Janssen would limit the market to a single generic entrant if it was able to do so. Mr Williamson responded “so in a hypothetical world, yes” (question 909). Counsel for PMS then asked, again in the hypothetical world, whether Janssen would limit the market to two generic entrants if it was able to do so. Counsel for Janssen interjected before an answer could be given, saying “so I think earlier we talked about how the sales marketing team is not involved in these –.” A discussion between counsel over the propriety of the interjection continued over the next several pages. On this motion, PMS emphasizes that counsel for Janssen said during this exchange “ … you’re asking the wrong person because it’s not the marketing team that makes that decision.”

[13] Later in the discovery, questions were asked about what would have happened with other generics in the hypothetical world. Undertakings were given, and answers were later provided.

[14] Janssen wrote to PMS on November 8, 2023 to correct the answer to question 909 from “yes” to “no”, and included a lengthy explanation within the revised answer.

[15] PMS wrote back on November 29, 2023, highlighted the “wrong person” portion of the exchange in the transcript, and requested that Janssen change its representative, and substitute someone who had knowledge of Janssen’s settlement strategy in the real world and the BFW.

[16] Mr Williamson has retired from Janssen, and will not be their representative at a further discovery in any event. Janssen has advised PMS that their representative at the continued discovery will be LeeAnn Mele, who appears to be a marketing director. Since it does not appear to PMS that Ms Mele worked with abiraterone at the relevant time, and Janssen has advised that persons on the marketing team are not involved in settlement strategies with generic manufacturers, PMS says that Ms Mele is the wrong person to be Janssen’s discovery representative. PMS submits that I should compel Janssen to produce Diane Yee (Janssen Inc’s vice president of patent law) as the corporate representative, or alternatively order Janssen to produce a witness who is knowledgeable on Janssen’s litigation and settlement strategy and negotiations with generic companies seeking to enter the abiraterone market in both the real world and the BFW.

[17] PMS also requests an order that, whoever the discovery witness is, Janssen be required to answer questions relating to its litigation and settlement strategy and negotiations, including by disclosing privileged information and documents.

III. Waiver of Privilege

[18] Beginning with the second issue, PMS argues that there is a difference between what Janssen did in the real world (aggressive litigation involving abiraterone) and what it has been told would happen in the BFW (settlement). PMS submits that this is a “de-contextualized and self-serving narrative”, and that it requires all of the real world facts and BFW facts to prepare for trial. PMS asserts that Janssen has selectively asserted privilege in this respect, and has thereby abused the discovery process. This motion does not address whether any specific discovery questions were proper – that was the subject of the previous discovery motion. PMS looks ahead to a follow-up examination, and submits that I should use my broad powers as a case management judge to effectively prohibit Janssen from objecting to follow-up questions on the grounds of privilege.

[19] PMS places significant weight on an argument that, in light of its pleadings and discovery answers, Janssen has waived privilege over its litigation and settlement strategy, and negotiations with third parties.

[20] While case management judges have broad powers under Rules 54, 55, and 385 of the Federal Courts Rules, SOR/98-106 (“Rules”), I cannot see how those Rules could be applied to authorize an advance ruling on a broad area of inquiry that would tie the hands of the party being examined and forbid objections on the grounds of privilege. Given the importance of, and public policy interests associated with, class privileges, I see no basis upon which I can make the kind of broad order PMS is asking for.

[21] PMS relies on Ronsco Inc v Canada, 2023 FC 1258 (“Ronsco”). Ronsco was a motion to substitute a discovery witness. I declined to order substitution in that matter, but was satisfied that the plaintiff’s examination on an important issue was frustrated (para 43). I ordered that defendants’ witness re-attend for discovery, and that no questions on certain topics could be objected to on the basis that they had already been asked and answered. This gave the plaintiff a “do over” on a specific area of inquiry. Unlike what PMS asks for on this motion, I did not prohibit the defendants in Ronsco from objecting to questions on the grounds of privilege.

[22] The issues on the discovery motion have now been decided (2024 FC 335). I was not satisfied that PMS had established waiver, and upheld Janssen’s privilege objections. Having generally upheld Janssen’s claims of privilege, there is no basis to prohibit Janssen from making an otherwise valid privilege objection on any continued examination.

[23] PMS’ motion on this issue will be dismissed, but this outcome does not alter Janssen’s obligation to answer proper follow-up questions, or assume that any later objection on the grounds of privilege is valid.

IV. Substitution

[24] The test for substitution of a discovery witness is not in dispute.

[25] Subrule 237(3) permits the Court to make an order that some other person be examined for discovery.

[26] The Court will not normally intervene in the Crown’s selection of a discovery representative unless it is demonstrated that the nominee is not informed or capable of being informed of the facts essential to the issue upon which discovery is pursued (Westaim Corp v Royal Canadian Mint, [1998] FCJ No 1929 at para 18). I see no reason why a corporation would be treated differently than the Crown in this respect.

[27] To be successful on a motion under subrule 237(3), it is necessary to provide evidence that the named discovery representative was inadequate (Raymor Industries Inc v Canada (National Research Council), 2008 FC 1247 at para 10).

[28] In Liebmann v Canada (Minister of National Defence), (1996), 110 FTR 284 at para 31, the Court identified the following considerations in determining whether a substitution order would be made:

1. The party being examined must put forward a proper and knowledgable 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 position 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;

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.

[Citations omitted.]

[29] I recently considered and applied these factors in Ronsco.

[30] What is unique about this motion is that Ms Mele has not yet been examined. PMS asks that I conclude that she will be an inadequate witness. I am not satisfied that I can reach such a conclusion.

[31] The scope of examination for Ms Mele will be narrower than the initial examination of Mr Williamson. Ms Mele’s examination will be limited to proper follow-up, not matters that were or could have been addressed in the first instance (Yelda Haber Ve Görsel Yayincilik AS v GLWiZ Inc, 2023 FC 778 at para 13). I am not satisfied that Ms Mele will be unable to inform herself as to matters that may be addressed in a second round examination, even if areas of inquiry will be outside her personal experience and involvement.

[32] While PMS asserted that Janssen should substitute their discovery witness before Mr Williamson’s retirement was disclosed, the focus of this motion was whether Ms Mele would be inadequate, as opposed to whether Mr Williamson was inadequate. PMS focuses on the reversal of the answer given to question 909, a few questions that were answered through undertakings, and the “wrong person” comment. Having regard to the discovery as a whole, I cannot conclude that Janssen put forward an inadequate, unsuitable or straw witness that frustrated PMS’ ability to have broad discovery on all issues in the first instance. I therefore cannot draw an inference that any substitute witness will be unsuitable.

[33] A discovery witness is expected to be well prepared for an examination, but that does not mean that the witness must have encyclopedic knowledge of every issue (Ronsco at para 6). The Court will not lightly interfere in a party’s choice of discovery representative. In Ronsco, the initial examination by the plaintiff was frustrated because the defendants’ witness was inadequately prepared. The order granted further discovery on terms, but did not go so far as to compel the appointment of another witness. While Janssen gave certain undertakings on what would happen in the BFW, and one answer was completely redone, I do not view the selection or preparation of Mr Williamson as egregious or abusive of the discovery process.

[34] Since Ms Mele has yet to be examined, I cannot assume that she will not take pains to adequately prepare for discovery, or that she will not be responsive to questions asked.

[35] PMS asks for an order that I compel Janssen to produce Diane Yee (Janssen Inc’s vice president of patent law) as their discovery witness. Even if Ms Yee is better placed to answer questions about Janssen’s settlement strategy, Janssen is entitled to choose their discovery witness. Substitution motions do not proactively adjudicate who may be the ideal witness, rather permit the Court to intervene where the examining party can objectively demonstrate that the selected witness is unsuitable. I am not satisfied that Ms Mele is demonstrably unsuitable, particularly when she has yet to be asked a question. Further, PMS has not demonstrated, either on this motion or the discovery motion, that Janssen has waived privilege. In the absence of demonstrated waiver, I approach a request to compel the attendance of a lawyer as a discovery representative with great caution, particularly when the apparent objective is to delve into otherwise privileged communications.

[36] Convenience and expense are peripheral factors here. With Mr Williamson’s retirement, a new witness will have to be prepared in any event.

[37] Having regard to all of the above, I am not satisfied that I should order substitution of Janssen’s proposed discovery witness.

[38] At the conclusion of the hearing, all parties submitted that costs should be in the cause, and such an order will be made.

[39] Postscript – a confidential version of this order and reasons was sent to the parties on February 19, 2024 so that submissions on any proposed redactions could be made. The parties were unable to agree on proposed redactions, and each filed correspondence on February 26, 2024.

[40] The open court principle is jealously guarded. A person asking a court to exercise discretion in a way that limits the open court presumption must establish that: court openness poses a serious risk to an important public interest; the order sought is necessary to prevent this serious risk to the identified interest because reasonably alternative measures will not prevent this risk; and as a matter of proportionality, the benefits of the order outweigh its negative effects. These principles apply to redactions (Sherman Estate v Donovan, 2021 SCC 25 (“Sherman Estate”) at para 38).

[41] PMS submits that no redactions are required. Janssen submits that the answer to question 909 in paragraph 12 above, and the correction to that answer in paragraph 14, be redacted.

[42] Janssen’s February 26, 2024 correspondence attaches a version of the order and reasons, with the proposed redactions highlighted. No submissions were made as to why the proposed redactions specifically meet the test in Sherman Estate, or generally why the benefits of redacting this information outweigh the negative effects. Even though the transcripts and answers were designated as confidential, it is not self-evident that disclosure of the limited information in paragraphs 12 and 14 above will result in negative effects to Janssen. As PMS notes, paragraph 15a. of Janssen’s statement of defence publicly asserts that several other generic pharmaceutical companies would have also entered the market in Canada before PMS, or in the alternative on or about the same time as PMS. No redactions will be made to this order and reasons.

ORDER in T-732-22

THIS COURT ORDERS that:

1. The plaintiff’s motion is dismissed.

2. Costs of the motion are in the cause.

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“Trent Horne”

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Associate Judge

FEDERAL COURT

SOLICITORS OF RECORD

DOCKET:

T-732-22

STYLE OF CAUSE:

PHARMASCIENCE INC. v JANSSEN INC. ET AL

PLACE OF HEARING:

held via videoconference

DATE OF HEARING:

january 29, 2024

ORDER AND REASONS:

HORNE A.J.

DATED:

February 29, 2024

APPEARANCES:

Marcus Klee Alyssa Gaffen Émilie-Anne Fleury

For The Plaintiff

David Yi Fiona Sarazin

FOR THE DEFENDANT JANSSEN ONCOLOGY, INC.

Stephanie Anderson Heather Lindsay

FOR THE DEFENDANTS Janssen Inc. and BTG INTERNATIONAL INC.

SOLICITORS OF RECORD:

AITKEN KLEE LLP Barristers and Solicitors Ottawa, Ontario

For The Plaintiff

BELMORE NEIDRAUER LLP Barristers and Solicitors Toronto, Ontario

For The DefendantS Janssen Inc. and BTG International Inc.

NORTON ROSE FULBRIGHT CANADA LLP Barristers and Solicitors Toronto, Ontario

For The Defendant JANSSEN ONCOLOGY, INC.