On a motion for leave to file reply expert reports, the Federal Court has reinforced the rule against case splitting and outlined the circumstances under which reply expert reports are permissible under the Federal Courts Rules. The Court concluded that none of the proposed reply reports put forward by Teva Canada Limited (Teva) in respect of patent validity issues were proper and dismissed the motion.
This motion arose in the context of an action under subsection 6(1) of the Patented Medicines (Notice of Compliance) Regulations, relating to the drug INVEGA SUSTENNA (paliperidone). The plaintiffs, Janssen Inc. and Janssen Pharmaceutica N.V. (Janssen) alleged that Teva will infringe Canadian Patent No. 2,655,335 (the 335 Patent). In response, Teva brought a counterclaim seeking a declaration of invalidity.
As the plaintiff by counterclaim with respect to the validity of the 335 Patent, Teva served its expert reports on validity first. Following receipt of Janssen’s responding expert reports on validity, Teva moved for leave to serve three reply expert reports. On the motion, Teva argued that it was unable to fully appreciate Janssen’s position on the 335 Patent’s validity until it received Janssen’s responding expert reports.
This action was scheduled to go to hearing on September 30, 2019, but was adjourned until February 3, 2020.
Improper reply evidence excluded
In dismissing Teva’s motion, Manson J. applied the ordinary rules regarding the order of evidence in actions before the Federal Court. These include Rule 247(1) of the Federal Courts Rules, as well as common law rules that place limits on reply evidence. Justice Manson rejected the argument that there is any gap in the law with respect to reply evidence.
The general rule is that a plaintiff cannot split its case on reply. Proper reply evidence must relate to issues raised by the defendant’s responding case which were not raised in the plaintiff’s case in chief. Reply cannot be used to introduce evidence that simply confirms previous evidence, which could have been raised in chief but is invoked only to contradict the defendant’s evidence, or which solely seeks to rebut the defendant’s evidence. However, the Court retains discretion to admit evidence that should have formed part of the plaintiff’s case in chief.
In this case, Manson J. rejected the argument that Teva’s proposed reply reports addressed validity issues that it could not have anticipated when expert reports in chief were initially exchanged. Justice Manson held that every paragraph of the proposed reports was an attempt to either rebut or contradict Janssen’s expert evidence, or to bolster Teva’s own expert evidence by restating or clarifying positions taken in its reports in chief. Justice Manson also held that Teva could test various areas of disagreement with Janssen’s experts on cross-examination. Despite the delay in the trial date, Manson J. declined to exercise his discretion to permit any of the reply evidence.
Additional prior art added to pleading
Teva also sought leave to amend its pleading to add a number of alleged prior art references that were included in one of its proposed reply expert reports. Justice Manson granted this motion in order to ensure that the Court has a complete picture of the state of the art. Given the delayed trial date, Manson J. concluded that there was no prejudice to Janssen and that this prior art may be contextually relevant for cross-examination of the expert witnesses. As such, he permitted the amendment for that purpose only.
The case is: Janssen Inc. v Teva Canada Limited, 2019 FC 1309