Do ask, still don’t get – $2000 awarded on Bill of Costs seeking more than $400,000

Teva Canada Limited and Sanofi-Aventis Canada Inc have duelled over Teva’s generic ramipril product in various proceedings, including an NOC proceeding, an infringement action, and a counterclaim for s. 8 damages. Teva was successful in each of these proceedings. In Teva’s counterclaim for s. 8 damages, Teva alleged that Sanofi Germany exerted a degree of control over Sanofi Canada and Schering Corporation such that Sanofi Germany would be jointly and severally liable to pay damages to Teva, should Sanofi Canada be unable to satisfy any section 8 damage award. The parties referred to these allegations as the “Control Allegations”.

The s. 8 counterclaim was bifurcated such that Sanofi was found liable to Teva for s. 8 damages before the Control Allegations could be adjudicated. After Sanofi Canada paid the section 8 damages, Teva ultimately discontinued its claim against Sanofi Germany.

A party against whom an action is discontinued is entitled to costs, and the Federal Court has discretion to fix the amount of those costs under the tariff. Due to the discontinuance of the Control Allegations, Sanofi Germany sought costs totaling $428,738.42 and Sanofi Canada sought costs totaling $36,582.40. However, these costs flowed from proceedings in which Teva was successful and was awarded costs. Despite Sanofi’s entitlement to costs being limited to the Control Allegations only, Sanofi’s Bill of Costs included virtually all steps taken in the validity/infringement trial and section 8 damages action, for which Prothonotary Milczynski noted:

It is not appropriate given the outcomes of the validity/infringement action and the section 8 action to revisit the issue of costs that were ordered to be paid by Sanofi Canada. Justice Snider awarded costs to Teva, taking into account everything she determined to be applicable – except the Control Allegations, which she expressly noted had been bifurcated. I agree with Teva that if Sanofi Canada were to be awarded costs for those items that relate to the trials, it would undermine Justice Snider’s determination of those costs. Sanofi cannot recover some of its costs through the backdoor of the Control Allegations.

Therefore, Prothonotary Milczynski awarded a sum of $2,000 to Sanofi Germany only. The factors influencing quantum were:

  • Pleadings were prepared for Sanofi Germany to address the Control Allegations
  • There was time devoted to the Control Allegations in the form of case management conferences, and correspondence after the s. 8 trial
  • Teva’s claim against Sanofi Germany was not frivolous or vexatious
  • The Control Allegations did not delay the proceedings
  • The parties exchanged offers and counter-offers regarding the Control Allegations and ultimately both Sanofi Germany and Teva received what they wanted – Teva was paid s. 8 damages and Sanofi Germany did not need to take any steps to litigate the Control Allegations

A copy of the decision can be found here.

Aitken Klee represented Teva in this proceeding.