Sierra Club Test Governs Protective Orders

Seedlings Life Science Ventures LLC v Pfizer Canada Inc 2018 FC 956 Ahmed J rev’g 2018 FC 443 Tabib J

In the decision under appeal, Tabib J refused to issue a protective order, essentially on the basis that the implied undertaking rule, supplemented by a private agreement between the parties, would provide adequate protection: see here. In so holding, Tabib J held that the test set out in Sierra Club of Canada v Canada (Minister of Finance), 2002 SCC 41 was not applicable. In her view [15], Sierra Club was applicable only to confidentiality orders, which allow parties to file confidential information under seal with the Registry, and not to protective orders, which govern the way parties may designate as confidential, and must thereafter treat, information that they will exchange between themselves in the pre-trial phase of an action. On appeal, Ahmed J held that Tabib J erred in distinguishing Sierra Club, and that the test set out in Sierra Club is applicable to both confidentiality orders and protective orders [26]. He noted that nothing in the text of Sierra Club itself supports the distinction [26]. Further, since the rationale for a protective order, a confidentiality order, or a hybrid order, is the same — namely “the protection of sensitive information – whether from the general public or other business adversaries – from abuse or use in activities collateral to the litigation” — there was no basis for applying different tests to the different types of orders [26].

Aside from the issue of the binding nature of Sierra Club, Ahmed J noted that Tabib J had been motivated by “a desire to respond to a problem in contemporary patent litigation. In her view, routine motions for protective orders do not add substantial protection above and beyond what is already available under the implied undertaking rule or achievable through private agreements, and the judicial processing of these orders constitutes a substantial burden to the Court” [30]. Ahmed J was sympathetic to this concern: “Surely those observations are not without merit and it may well be the time for change” [30]. But in his view, it is not appropriate to implement “a fundamental shift in longstanding practice” through the jurisprudence of “this Court”: “That is the role of the legislature, or perhaps the courts above” [30]. I’m not sure I agree with that observation. The law must evolve to meet changed circumstances, and some of that evolution must come at the hands of the courts, as the legislature simply does not have the capacity to address every desirable change, no matter how minor. The same is true of the Supreme Court. Moreover, even if the Supreme Court could deal with every issue, it is arguably preferable to have some changes initiated by a lower level of court, which may, as in this case, have more practical expertise on the issue. Ahmed J stated that “in my view, it would be unjust to the litigants in the case at bar to have the so-called ‘rules of the game’ changed partway through these proceedings” [30]. That is an important point, but it is not determinative. It is the nature of the common law that the law evolves in light of decisions on the facts of particular cases, and the rules of the game are changed mid-course whenever an appeal to the SCC results in a change in the law. It is no more or less fair to have the rules changed simply because it is the SCC that changes them. To be sure, it is important to respect the settled expectations of the parties, and courts should therefore be more reluctant to change the law or practice, the more firmly it is established. But that is a matter of balancing the need for change against the importance of the settled expectations.

The test set out in Sierra Club [60] has two branches: 1) the information has been treated as confidential and that on a balance of probabilities its proprietary, commercial and scientific interests could reasonably be harmed by the disclosure of the information, and 2) it is of a confidential nature with a reasonable expectation that it be kept confidential [23]. [24]. Ahmed J held that in matter at hand, both criteria were met [28], and he therefore allowed the appeal and order the protective order be issued [29].

Patent Remedies and Complex Products: Toward a Global Consensus

For the past three (plus) years I have been involved in the International Patent Remedies for Complex Products (INPRECOMP) project, which brought together twenty patent scholars from around the world to address remedial issues related to patents for products containing multiple patented technologies, such as smartphones, robotics and the Internet of Things. The manuscript of our resulting volume, Patent Remedies and Complex Products: Toward a Global Consensus (Brad Biddle, Jorge L. Contreras, Brian J. Love & Norman V. Siebrasse eds.) is now in the hands of Cambridge University Press. It is being published under an open access model, and individual chapters are now available on SSRN (links below). As well as being an editor, I was a member of the steering committee, and I am also an author on all of the chapters except chapter 6.

The aim of the project was to arrive at a consensus and make recommendations regarding best practices, where that was possible, and to make recommendations for further research which might help resolve outstanding issues. Most of the individual chapters were written as multi-author collaborations to ensure a diversity of perspectives on the issues. The process of arriving at a final version of each chapter was challenging, thought-provoking, and sometimes contentious. I would like to thank all of the authors with whom I collaborated on the various chapters. I would also like to extend a special thank you to my co-editors, Brad Biddle, Jorge Contreras, and Brian J Love, who were always a pleasure to work with.

The INPRECOMP project was primarily funded by a gift from Intel Corporation to the Center for Law, Science and Innovation (CLSI) at Arizona State University's Sandra Day O'Connor College of Law. CLSI provided logistical and administrative support for the project.

Patent Remedies and Complex Products: Toward a Global Consensus

Ch 1 Reasonable Royalties

Ch 2 Lost Profits and Disgorgement

Ch 3 Enhanced Damages, Litigation Cost Recovery, and Interest

Ch 4 Injunctive Relief

Ch 5 The Effect of FRAND Commitments on Patent Remedies

Ch 6 The Effect of Competition Law on Patent Remedies

Ch 7 Holdup, Holdout and Royalty Stacking: A Review of the Literature