A balance between confidentiality orders and the open court principle in patent litigation

By Randy Marusyk and Yang Wang, May 2^3rd, 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.