A balance between confidentiality orders and the open court principle in patent litigation
By Randy Marusyk and Yang Wang, May 23rd, 2017
Canadian courts have recently revisited the issue as to whether a confidentiality order in pharmaceutical patent litigation should be granted notwithstanding the open court principle to ensure the public access to court proceedings.
In Teva Canada Ltd. v Janssen Inc., 2017 FC 437, an action was brought by Teva to recover damages from Janssen pursuant to section 8 of the Patented Medicine Regulations. A confidentiality order was originally issued by the Federal Court, allowing both parties to file materials under seal but only for the purpose of motions to compel[1]. However, both parties had misused the confidentiality order to improperly file materials under seal, which is common in pharmaceutical patent litigation. After the Court issued a direction requiring the parties to explain, Teva made a motion to allow the (1) supply contract between Teva and its supplier, and (2) excerpts of Teva’s ANDS (Abbreviated New Drug Submission) to remain under seal. This motion is relying on affidavits submitted by Teva that the Court eventually deemed as incomplete, insufficient, and misleading.[2] Teva claimed that: (1) ANDS filing are treated confidentially by Health Canada; (2) its competitors could obtain an unfair competitive advantage by accessing to the information.
Teva’s motion to maintain the confidentiality of the materials is dismissed. The Registry of the Federal Court should unseal and place on the public record the majority of the parties’ materials except a small portion.
Confidentiality orders inherently comprise the open court principle, and thus should be granted cautiously. A court has to be satisfied that the confidentiality order is necessary to prevent a serious risk of harm to an important interest. The moving party has the onus to establish that the information is actually confidential, rather than bold assertions and subjective belief. [3]
The Court found that the proposed confidential information regarding Teva’s supply chain is on the financial aspect of the agreement, and not on the identity of the supplier.[4] Therefore, the name and location of the supplier should be disclosed. To answer Teva’s first claim, the Court held that “while a pharmaceutical company may assert that the information contained in its ANDS as to the composition and method of manufacture of its products is treated as confidential, this information may lose its confidentiality once the product is publicly sold.”[5] The Court also recognized the fact that regulatory regime in Europe is different from the Canadian regime. Some of the information as to a pharmaceutical product’s supplier is public disclosed in Europe but not required to disclose in Canada. The fact that Teva manufactured and marketed its product in multiple European countries and already disclosed certain information contradicts with its affidavit that “is not merely that the precise identify of the manufacturer if the API that goes into Canadian is not public known, but, sweepingly, that the Teva global group of companies keeps information related to the location or identity of entities that supply their products confidential.” [6]
For Teva’s second claim, the Court found it was speculative and Teva failed to show it would actually suffer serious harm if the identity of its supplier were to be disclosed publicly.[7]
In patent litigation, Canadian courts are inclined to uphold the open court principle to ensure the public access to court proceedings. Unless the moving party for a confidentiality order can establish that it is necessary to prevent a serious risk of harm rather than bold assertions and subjective belief.
Lifting the Cloak of Anonymity of Copyright Infringers Online
By Scott Miller and Yang Wang, May 30th, 2017
While internet connects people thousands of miles apart and accelerates knowledge distribution, it also creates a cloak under which anonymous users can illegally download and distribute copyright protected materials, such as movies, songs and novels. Previously, copyright owners were unable to protect and vindicate their rights unless internet service providers (ISPs) were willing to disclose the identity of suspected copyright infringers.
The recently modified copyright regime allows copyright owners to seek a disclosure order that compels an ISP to reveal the identity of the suspected copyright infringers.[1] The purpose of which is “to allow copyright owners to protect and vindicate their rights as quickly, easily and efficiently as possible while ensuring fair treatment of all.” [2] Whether or not copyright owners should reimburse the ISPs for the cost related to a disclosure order was left undecided.
In Voltage Pictures LLC v John Doe, the Federal Court of Appeal reviewed the trial judge’s order that Voltage has to pay a fee of $100 per hour of work plus HST to Rogers, the ISP, before the disclosure of identifying information (see our previous article here). Voltage appealed this order and contested this fee as it was far too high and thus unreasonable.
The Court allowed the appeal and ordered Rogers to disclose identifying information to Voltage without seeking compensation. The concern is if ISPs are allowed to charge a fee without restriction before the release of identifying information, the purposes of the Copyright Act would be frustrated. A large service fee could effectively dissuade copyright owners from obtaining the information they need to protect and vindicate their rights.
The Court held the subsection 41.26(1) of the Copyright Act has imposed an obligation that the ISPs “must maintain records in a manner and form that allows it to identify suspected infringers, to locate the relevant records, to send the notices to the suspected infringers and the copyright owner, to translate the records (if necessary) into a manner and form that allows them both to be disclosed promptly and to be used by the copyright owners and later the court to determine the identity of the suspected infringers, and finally, to keep the record ready for prompt disclosure. ”[3]
Furthermore, the Court divided the total cost into two categories: (1) the work necessary to assemble, verify and forward the identifying information to copyright owner pursuant to the subsection 41.26(1) of the Copyright Act; and (2) the actual, reasonable, and necessary cost of delivery or electronic transmission of the information.[4]
For the first category, the Court took a position pursuant to the “no regulation and, thus, no fee” default rule in subsection 41.26(2) of the Copyright Act for the subsection 41.26(1) obligations. It held that the decision of leaving the cost of with ISPs can push them to limit the cost of compliance with their obligation “more automatic, more efficient and less expensive.”[5] For the second category, the Court found that the cost does not fall within the subsection 41.26(1) and thus ISPs can charge this fee. However, it is usually negligible (e.g. $0.5 per IP address in 2012). [6]
The Court also recognized that ISPs can plead their economic case to the Minister to set up a regulation to allow ISPs charge a fee for performing the subsection 41.26(1) obligations. Until then, ISPs rather than copyright owners should bear the cost of assemble, verify and forward the identifying information pursuant to the Copyright Act and the Copyright Modernization Act.
For more information please contact:
Scott Miller, Partner, Head of the Litigation Department
T: 613.801.1099
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Yang Wang, Ph.D., Summer Law Student
T: 613.801.1082
Upcoming Amendments to the Patent Rules, Industrial Design Regulations, and the Trademarks Regulations
By Etienne de Villiers, June 15th, 2017
The Canadian Intellectual Property Office (CIPO) has just announced that it will be conducting a series of consultations on proposed regulatory amendments to the Trademarks Regulations, Industrial Design Regulations and Patent Rules.
The amendments are being proposed to bring Canada’s intellectual property (IP) legal framework in line with international standards. In particular, Canada is in the process of joining five international IP treaties: the Madrid Protocol, the Singapore Treaty, the Nice Agreement, the Hague Agreement, and the Patent Law Treaty.
Amendments to the Trademarks Act, the Industrial Design Act and Patent Act were previously amended to comply with the requirements of these treaties. In order to complete the changes to Canada’s IP legal framework, the accompanying Regulations and Rules must also be amended.
CIPO will be consulting with the IP legal community starting on June 19, 2017 for the Trademarks Regulations and the Industrial Design Regulations. Consultations regarding the Patent Rules are scheduled to start in early August 2017. The proposed amendments will be disclosed during this consultation period, and there will be an opportunity to ask questions and submit questions or comments.
Amending the IP Rules and Regulations is the final step in a major makeover of Canada’s IP legal framework that will bring us closer to the developing international standards. From an IP owner’s point of view, these changes will make it more efficient to obtain patent protection in Canada based on foreign originating applications, and similarly will make it more efficient for Canadians to obtain foreign patent protection based on Canadian originating applications.
For more information please contact:
T: 416.995.8655
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Update: CASL Private Right of Action Suspended, But Be Careful, Other CASL Provisions Are Still Alive
By Randy Marusyk and Daniel Lanfranconi, June 26th, 2017
Since our last CASL updated on March 27th, the Canadian federal government announced on June 7, 2017, that it is suspending the private right of action provision in Canada’s Anti-Spam Legislation (CASL). This provision was originally scheduled to come into effect on July 1, 2017. The private right of action provision allows anyone to sue individuals and organizations that violate CASL by either their action or omission. Under CASL’s private right of action, Plaintiffs were able to claim compensatory damages as well as statutory damages. Compensatory damages cover the plaintiff for losses or damages that they have suffered, on the other hand, statutory damages, are provided where no actual harm is proven and can be as high as $1 million per day.
Businesses, charities, and not-for-profit organizations raised concerns that a number of class action lawsuits could result from the private right of action provision. As a result, the federal government suspended the private right of action coming into force and will send this provision to parliamentary committee for review to ensure it balances the individual’s rights with the burden businesses and others will bear as a result of compliance. No date was announced when the committee will render the results of this review.
CASL’s intent is to prohibit businesses and individuals from sending commercial emails to Canadians without their consent. When CASL was introduced on July 1, 2014, it provided a 3-year grace period where implied consent, acquired prior to CASL coming into force, was sufficient. This implied consent must meet two criteria to be valid: the sender had an existing business relationship prior to July 1, 2014 and the sender and recipient had communicated through commercial electronic messages (CEMs) as a part of this relationship. These transitional provisions for implied consent come to an end as of July 1, 2017, and even though the federal government has suspended the private right of action, these other CASL provisions remain in force and are subject to enforcement. As a result, businesses and individuals must obtain express consent and provide unsubscribe methods and electronic communication practices and marketing strategies that comply with CASL.
For more information please contact:
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Daniel Lanfranconi, B.Eng., M.A.Sc., P.Eng. (Elec Eng), M.B.A., (J.D. Candidate), Summer Law Student
T: 613.801.0456
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