Enough (evidence) is enough: Redactions to invoices no barrier to lump sum costs award
In Eli Lilly v Apotex, Justice St-Louis awarded Apotex its costs in a patent action involving the drug tadalafil and three patents asserted by Eli Lilly.
Eli Lilly sells Cialis in Canada for the treatment of erectile dysfunction. Apotex launched a product containing tadalafil, the medicinal ingredient in Cialis, in July 2016. Eli Lilly initially asserted three patents against Apotex. Eli Lilly ultimately decided not to proceed with respect to the 948 Patent, and the Court dismissed its action with respect to the 540 Patent (see the decision here) and the 684 Patent (see our previous blog post here).
Apotex sought a lump sum costs award of $3 million, comprising of 30% of its legal fees and 100% of its disbursements, in addition to pre- and post-judgment interest and the costs of the motion. Apotex argued for an elevated lump sum on the basis that the amount it would have been entitled to pursuant to column IV of Tariff B to the Federal Courts Rules was only 8% of its actual fees incurred. Lilly argued that an elevated lump sum award was not appropriate, pointing to deficiencies in the evidence submitted by Apotex, and argued that no interest should be awarded because interest was not sought in Apotex’s Notice of Motion.
The Court distinguished the present case from others where the party seeking costs provided no evidence of its legal fees. Apotex had provided invoices relating to legal fees, but they were redacted to remove privileged information. Justice St-Louis held that redactions in Apotex’s evidence were justified, and that the remaining information was sufficiently detailed to allow an evaluation of the factors relating to costs awards.
The Court noted that “it is difficult for the Court to appreciate whether or in what instances the legal fees incurred, charged by counsel to their client and paid by said client are unreasonable or excessive” but determined that Apotex’s reasonable legal fees were 80% of the amount it presented. Justice St-Louis then determined that Apotex should recover 30% of those reasonable legal fees.
Justice St-Louis also held that the purpose of a Notice of Motion is to provide the recipient with adequate notice of the order sought. Although Apotex did not seek interest in its Notice of Motion, it did seek “such further and other relief as this Honourable Court may deem just”. Justice St-Louis concluded that this, together with Lilly’s failure to submit any evidence of prejudice, left it open to the Court to award interest.
The Court ordered Lilly to pay Apotex a lump sum costs award of $2,169,045, plus post-judgment interest at a rate of 2%.
A copy of the decision is available here.
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