Federal Court Cour fédérale PO Box 10065 3rd Floor, 701 West Georgia Street Vancouver, BC V7Y 1B6 Patrick Smith Gowling WLG (Canada) LLP Calgary, AB Fax (403) 695-3510 Jun Scott E. Foster Gowling WLG ( Vancouver, BC Fax: (604) 443-6 22, 2016 anada) LLP 49 Daniel Davies Smart & Biggar Ottawa, ON Fax: (613)232-8440 Brian Daley / V + cessa Rochester Norton Rose Ful ' right Canada LLP Montreal, PQ Fax: (514) 286-5 74 Dear Counsel: Re: T-300-16 The Regents of The University of Califa is et al v I-111ed Pharma Inc. Enclosed you will find the following document: Order of The Honourable Mr. Justice Manson, rendered on June 22, 20 6 Yo s truly, _Tu La Regi Orchard try Officer dohnk Fuis. Please note that the FCR R 395 has changed and the Registry will not be sending cer lied copies of deeisione of the Court, unless a copy is requested by the party. Ifyou do require a copy, please advise the Rey istry in writing. Pursuant to sec tion 20 of the Official languages Act all décision3, orders and judgments, including any reasons given therefor, Sued by the Cou rt are issued in both official languages. In the event that such documents are issued in the first instance in only one of the official languages, a copy of the version in the other official language will fie forwarded on request when it is available. Conformément a l'article 20 la bot sur les langues o>tcictfes, les décisions, ordonnances et jug ts, avec les votifs y afférents, sont Omis dans les deux langues officiep s. Au cas où ces documents ne seraient omis, en premier lieu, que l'une des deux langues officielles, une copie de la version dans t'a langue officielle sen transmise, sur demande, dés qu elle sera.dispo ibte. ADDRESS ALL COMMUNICATIONS TO THE CHEF ADMINISTRATOR- ADRESSER TO CO SPONDANCE A L'ADMINISTRATEUR EN CHEF
Federal Court o fédérale Date: 20160622 Docket: T-300-16 Vancouver, British Columbia, June 22, 2016 PRESENT: The Honourable Mr. Justice Manson BETWEEN: THE REGENTS OF THE UNIVERSIT OF CALIFORNIA AND TEARLAB CORPORATION Plaintiffs and I-MED PHARMA INC. Defendant JUDGMENT [1] By Judgment dated May 31, 2016, I ordered the parties to provide written submissions concerning costs related to the costs of: (i) the motions for interim : d interlocutory injunctions on behalf of the Plaintiff; Tearlab Corporation (Tearlab); (ii) the m. ion for security for costs on behalf of the I-Med Pharma Inc,.(I-Med); and (iii) the $1500 costs warded to Tearlab by Order of Prothonotary Lafrenière dated April 27, 2016.
Page: 2 [2] The parties submitted those written submissions, in light Tearlab's motions for interim and interlocutory decisions were dis I-Med, and I-Med's motion for additional security for costs ordering an additional security of $50,000 to be paid into the Cou rt f the Court's decisions that ssed, with costs awarded to successful, with the Court y Tearlab. [3] I have considered the parties' written submissions dated additional submissions filed in reply to I-Med's submissions, dated une 10, 2016 and Tearlab's une 22, 2016. I. Cost of e term and Interlocuto In' unction A &cat'or A. The Parties' Positions [4] Tearlab's position is that the issues on both injunction appli ations were not complex and costs should be awarded pursuant to the middle of Column III of T= ' f B (Laboratoires Servier v. Apotex Inc., 2007 FC 344 at para 12 [Laboratoires Servier]). [5] In the alternative, if the Court considers a ltunp sum award the facts of this case, expe rt fees, of I-Med's expert Dr. Rosenblatt and the reasonableness of all of I-Med's disbursements should be as s more appropriate based on hould be reasonably capped essed. [6] I-Med argues that given its success on respect of both injun Lion. applications before this Court, and the fact that recoverable fees under Column III of T I-Med for about 10% percent of its actual, fees for the injunction a B would only reimburse lications and its motion for
Page: 3 security for costs, the Court should award a quantum of costs mo e reasonably proportional to I-Med's actual costs, at two-thirds of its actual legal fees. [7] I-Med also seeks reimbursement of all disbursements, approximately $52,000, which it submits are reasonable, given its reliance on a single expert and e reasonable use of counsel during all stages of the preparation of the injunction hearings, inc uding cross-examinations of the parties' witnesses. I-Med filed draft Bills of Costs setting out cots, both under Column III of Tariff B, which totalled $31,549.14, and on a solicitor-client sc e, the details of which a re subject to a confidentiality order in this matter. B. Analysis [8] I agree with Tearlab that as a starting point, the legal issu s involved in the injunction applications were not complex (Laboratoires Servier, above, at para 12). [9] I also agree with Tearlab that pursuant to Rule 401(2) of e Federal Courts Rules, the motions for both the interim and interlocutory injunctions were teas suably brought neither one was unnecessary, frivolous nor vexations, notwithstanding ultimate uccess lay with I-Med. [10] There was a serious issue at play in both applications, and th issue of irreparable harm in the interlocutory application warranted considerable analysis and re iew of the conflicting expert evidence and market conditions. Moreover, I-Med refused to disci se the release date of the i- Pen at the outset of the parties' dispute over the alleged ' _eurent of Canadian Patent
Page: 4 2,494,540, which resulted in Tearlab bringing its motion for int - ' injunction in March of this year. [11] As well, there was some overlap in preparation for and ar± ents made with respect to. expert and fact evidence used in both injunction applications that nt st be discounted. [12] The fundamental purposes which modem costs rules should foster include: (i) to partially indemnify successful litigants for the costs of litigation; (ii) to enc.urage settlement; and (iii) to discourage and sanction inappropriate behaviour. [13] A costs award should reflect what the Court views as a f and reasonable amount that should be paid by the unsuccessful party -- it is not to provide any xact measure of actual costs of the successful party, absent an exceptional award of solicitor-cli t costs in some cases. This is not such an exceptional case. [ 14] Having considered the actual costs incurred by the I-Med i s successfully defending both injunction applications, and the other factors set out in Rule 400(3) s.t weigh in I-Med's favour, I conclude that Column III of Tariff B costs are woefully inad - quate in this case this is particularly true in view of Justice Russell's rejection of the inte m injunction application, in finding that: The Court cannot infer irreparable harm for the i terim period from the unsupported allegations of corporate and/sr unqualified witnesses who are not in a position to address the quantification issue
Page: 5 [15] I-Med is also entitled to reasonable disbursements; however there are some expenses that are questionable. While the out-of-town expenses that include Ira el to Seat tle to attend crossexaminations total $7572.26, the dates and length of stay of one of u e cross-examinations is not indicated. Travel should be allowed at economy rates and this out-. -town travel appears modest - though it is difficult for me to discern what is reasonable on the ' ormation provided. Also, the expert fees for Dr. Rosenblatt amount to $37,346.90, but there is n. indication of his hourly rate. He provided two expert reports and in my opinion while this amo u t appears to be reasonable, it should be discounted somewhat given the lack of evidence on his ourly rate and some overlap involved in the two injunction applications. The rest of the disburse ents also appear reasonable. [16] Accordingly, I hereby award a lump sum award, inclus ve of reasonable costs and disbursements for both injunction applications, in the amo t of $141,101, which is approximately forty per cent (40%) ($109,812) of the actual e :s and sixty per cent (60%) ($31,289) of the actual disbursements incurred by I-Med. C. Security for Costs [17] The $1500 awarded to Tearlab in Prothonotary Lafrenière's I rder dated April 27, 2016 is res judicata; but may be offset against the award of costs to the I-i ed. I-Med requested $2500 costs in their motion for security, which is reasonable in the circ st ances, I therefore award $2500 as costs to I-Med on this issue. [18] Given that I am not satisfied that Tearlab's motions for eith the interim or interlocutory injunction should not have been brought, even though there we serious problems with the
Page: 6 evidence filed in respect of the interim injunction application, co is will not be ordered to be payable forthwith. THIS COURT'S JUDGMENT is that: 1. Costs as against the Plaintiff, Tearlab Corporation, are aw: ed to the, the Defendant, 1-Med Phanna Inc., in a lump sum amount of $141,10 inclusive of all fees and disbursements for both the interim and interlocutory injunction applications, to be paid following disposition or conclusion of the action. 2. Costs as against the Plaintiff, Tearlab Corporation, to the D fendant, I-Med Pharma in respect of the motion for security for costs in the amount. f $2500. ' Michael D. Manson" Judge