Experimental testing in patent actions: Federal Court issues notice to the profession

Experimental testing and patent infringement actions: they often go hand-in-hand. With respect to providing notice to other parties of experimental testing, the patent litigation bar has been working under a salutary, unofficial rule since at least the 1960s.

Notwithstanding this salutary rule, its application has been varied and has not been strict. Accordingly, litigants faced some uncertainty with respect to the admissibility of evidence from experimental testing.

Recently, the Federal Court of Canada issued a Notice to the Profession with respect to experimental testing in patent actions. The Notice to the Profession codifies existing and general practices for patent infringement actions and provides more structure and certainty for litigants considering experimental testing in connection with their actions.

Background

One of the first decisions to touch on the issue of notice to an adverse party of experimental testing to be adduced at trial was the Exchequer Court’s 1964 decision in Omark.¹ Although the Exchequer Court ultimately found that the evidence at issue was neither an experiment nor a test, and therefore the salutary rule did not apply, it noted that the Court had a developed practice for dealing with experimental testing evidence:

There is no question that the practice in this Court seems to have been that evidence of tests and experiments conducted pendente lite without notice being given to the other side and an opportunity to attend should not be considered and I believe that this is a salutary rule. I might also add that in any event tests and experiments conducted even before the trial in the presence of the other party is much more probative than if conducted ex parte.²

The Court drew a distinction between testing conducted during litigation (i.e., pendente lite) and before trial. This distinction was given no weight in Halford,³ where testing that occurred prior to trial, and in the absence of the adverse party, was held to be inadmissible.

More recently, some decisions have addressed the notice to and presence of an adverse party at experimental testing to be adduced at trial. Although the Federal Court has consistently upheld the salutary rule, the rule has not been strictly applied. Dow Chemical was the high-water mark for the enforceability of this rule, while the Federal Court in both Apotex v. Pfizer and AbbVie refused to apply the rule to the circumstances in each case.

The Dow Chemical Company v. Nova Chemicals Corporation, 2012 FC 754

Dow Chemicalput the issue of notice of and opportunity to attend experimental testing directly before the Federal Court. The defendant in this patent infringement action, Nova, produced samples of its polyethylene products and polymer catalyst that allegedly infringed Dow Chemical’s patent. These samples were provided on the condition that Nova’s expert witnesses would be permitted to attend and monitor any tests performed by Dow Chemical.

When it came time to test the samples, Dow Chemical refused to allow Nova’s experts to attend the tests, citing safety and privacy concerns. Instead, Dow Chemical proposed to send Nova a video of the tests and other information (e.g., raw data generated from the tests).

The matter could not be resolved at a case management conference, which led to a motion by Nova for a court order requiring Dow Chemical to permit Nova’s experts to attend the tests that Dow Chemical intended to rely on at trial. Based on the authority of both Omark and Halford, the Court stated that “it is a practice of this Court not to accept a party’s evidence of tests and experiments where notice and an opportunity to attend have not been given to the opposing party.”⁴ Dow Chemical’s safety and privacy concerns were not sufficient to counter this general practice, and therefore Dow Chemical was ordered to permit Nova’s experts to attend the tests.

Apotex Inc v. Pfizer Canada Inc, 2013 FC 493

In this case, the Court demonstrated that the general practice with respect to requiring notice of experiments to be given was not a hard-and-fast rule. The nature of the evidence and the circumstances leading up to the experimental testing must be considered.

Apotex objected to two separate forms of experimental testing evidence adduced by Pfizer: internal tests performed at Pfizer, and tests performed by Pfizer’s expert. The objection to both forms of evidence was that Apotex was not invited to attend the tests. Despite Apotex’s objections, both forms of evidence were found to be admissible.

Regarding the internal testing evidence, the Court noted that the tests were routine tests performed by technicians of sufficient skill. In addition, the Court noted that the evidence adduced was not opinion evidence; it merely comprised measurements taken and recorded. Based on these findings, the Court held that the evidence was admissible, but only at face value (i.e., to show that measurements were taken and what those measurements were).⁵

Regarding Pfizer’s expert’s tests, Apotex had provided the samples to be tested to Pfizer’s expert in the course of the litigation. The Court noted that Apotex “knew full well that Pfizer intended to conduct tests on its material”⁶ but never asked to attend the tests. Based on this finding with respect to Apotex’s knowledge of the intended testing, Apotex was barred from objecting to the admission of the expert’s testing evidence.

AbbVie Corporation v Janssen Inc, 2014 FC 55

AbbVieis another recent case where the Federal Court allowed experimental testing evidence, despite the opposing party not being invited to attend. The plaintiff, AbbVie, conducted tests on Janssen’s STELARA product, which was found to infringe AbbVie’s patent. Janssen was not invited to attend these tests and, on this basis, sought to have the experimental testing evidence excluded.

The Court noted that there is no rule in the Federal Court governing tests conducted for the purpose of trial. It also noted as follows the exception from Omark: “an ex parte test may be admissible, subject to weight, particularly where, in this case the opposite party could readily have conducted the same test.”⁷

This exception was detrimental to Janssen because Janssen, despite marketing and selling STELARA commercially, did not adduce any experimental testing evidence regarding its product. In addition, Janssen did not cross-examine the expert witness whose affidavit contained some of the testing evidence. Although the expert did not appear in person at trial, the Federal Court issued Letters Rogatory to allow Janssen to cross-examine the affiant. Janssen chose not to cross-examine him. Based on these circumstances, the Court allowed the testing evidence to be admitted.

It is notable that the Court made no reference to either Halford or Dow Chemical, where it was stated that “it is a practice of this Court not to accept a party’s evidence of tests and experiments where notice and an opportunity to attend have not been given to the opposing party.”⁸

Notice to the Profession

The Federal Court’s Feb. 27, 2014 Notice to the Profession follows and expands upon the Dow Chemical holding. In particular, not only must an opposing party be given notice of experimental testing to be conducted for the purpose of litigation in a patent infringement (or impeachment) action, but the notice must also contain prescribed information. In particular, the notice must include:

• the facts to be proven by such testing;
• the nature of the experimental procedure to be performed;
• when and where the adverse parties’ counsel and representative(s) can attend to watch the experiment(s); and
• when and in what format the data and test results from such experiment(s) will be shared with the adverse parties.

This notice must be provided two months before the scheduled service of the expert report(s) in chief. Any disputes about the required notice may be resolved at a case management conference. Failure to abide by the notice requirements precludes a party from adducing experimental testing evidence, subject to leave of the Court.

The Notice to the Profession does raise some interesting questions.  For example:

• Is a defendant in a patent infringement action required to give the plaintiff two months notice before the scheduled service of the exert reports in chief? A defendant may not know whether or not it will want to conduct experiments until after the plaintiff’s expert report in chief on the issue of infringement is delivered and considered.  As such, a defendant that may wish to conduct experimental testing in response to a plaintiff’s expert evidence in chief may wish to at an early date raise such issue as part of the case management process in order to have its particular circumstances addressed in the context of the new requirements provided by the Notice to the Profession; and
• When will a Court grant leave to file experimental testing evidence where the notice requirements were not abided by? In particular, will a party be granted leave in situations similar to those in Apotex v. Pfizer and AbbVie?  Or would leave be reserved for only the most exceptional of cases, and therefore be denied in such situations in view of the new and detailed requirements of the Notice to the Profession?  Given the Notice to the Profession is very recent, it remains to be seen what situations will result in leave being granted by the Court to allow the leading of experimental testing evidence that was not obtained in accordance with the new requirements.