Quebec Court Warns Against “Fishing Expeditions” – Denies U.S. Letters Rogatory (“LR”) Request in Contentious Omega-3 U.S. Patent Litigation

The Defendant in a US patent litigation matter (Aker Biomarine AS, (“Aker”)) recently fell short of meeting the threshold requirements for obtaining permission to conduct a deposition and obtain documents from third parties in Quebec (the University of Sherbrooke and a Quebec Research Center). The US Plaintiff/patentee Neptune Technologies & Bioressources Inc. (“Neptune”) successfully opposed the overly broad Letters Rogatory Request. This recent case provides a clear illustration for US clients of what can easily go wrong when LR Requests are not initially vetted by Canadian counsel – before the US court issues the LR. In a broader context, this patent dispute exemplifies the inter-relationship of remedies available to both patentee and infringer in cross-border patent disputes.

Letters Rogatory

In a LR Request, a US court may seek the “assistance” of the appropriate provincial court to obtain, on the basis of comity, both documents and deposition from third parties within the applicable province. As would be expected, Canadian courts (including the Supreme Court of Canada in R. v. Zingre, [1981] 2 S.C.R. 392) have developed some fairly straightforward and common sense guidelines to ensure such requests are suitably limited and required for the US litigation, compliant with provincial rules over third party discovery, and not contrary to public policy/unduly burdensome.

Neptune, a Quebec based biotechnology company whose research is focussed on “marine-derived omega-3 polyunsaturated fatty acids”, has several US patents directed at compositions containing Antarctic krill oil extract. Krill oil is used in dietary/nutritional supplements and is increasingly popular in U.S., European and Asian neutraceutical markets. In the pending US litigation, Neptune is relying on US Patents 8,383,675 and 8,278,351 (“The US Patents”).

In Aker Biomarine AS v Neptune Technologies & Bioressources Inc. 2013 QCCS 4841 (“Aker v Neptune”)[1], the Quebec court quickly denied Aker’s request based on R v Zingre /Quebec Civil Procedure Rules and a few blatant problems:

(1) although Aker’s request was “significantly reduced” after the Quebec court criticized its scope, Aker maintained its request for sample testing/extraction documents regarding the “Beaudoin” patents that were not even at issue in the US litigation;

(2) in the US litigation, Aker referred to the “Beaudoin” patents (which were prior art – although the Quebec court does not actually identify them as such) in only a few pages of its 1000 page Defence and therefore this was not an “essential element” of Aker’s defence;

(3) although the “Beaudoin” patents were filed in 1999, Aker’s request covered up to 2011; and

(4) Aker’s request was admittedly out of time (the Quebec decision is dated over a month past the deadline for obtaining evidence in the US litigation); the US LR Request was only issued the day before the deadline.

Overall, the Quebec court repeatedly criticized Aker as indulging in the “sport of fishing”. Aker clearly failed to explain the relevance of its request – both in the originating US LR Request and in its materials filed with the Quebec court.

Aker v Neptune provides a succinct case illustration for those seeking enforcement of US LR Requests in Canada. Careful attention is required early on in a LR Request as a proactive measure, notwithstanding such matters are frequently not adjudicated on. In the normal course, the originating US LR Request, although signed by a US judge, is typically prepared in its entirety by the Requesting Party. LR are also often unopposed and/or issued on consent in Canada following discussion with any third party counsel. In such circumstances, the propriety of the original US LR Request may be subject to only cursory review. However, where the LR is in fact contested, Aker v Neptune is a clear warning that requesters should ensure their LR Requests are compliant from the beginning, and supported by clear evidence from US counsel. Ideally Canadian counsel assistance should be sought before the US LR Request is even prepared in the US.

It is noteworthy that, as is often the case, the third parties themselves do not appear to have participated in the Quebec proceeding – instead it was the US Plaintiff, Neptune, who was opposing the Request.

Multi-Jurisdictional Relief

The Aker v Neptune case provides a practical example of the current multiple forms of relief concurrently available to both patentee and infringer, particularly following new “challenge” procedures introduced by the United States Patent and Trade-mark Office (“USPTO”) last September 2012. In the case of Neptune’s US Patents there are multiple proceedings as follows:

(1) Aker filed a request for ex partes re-examination of US 8,278,351 “Natural marine source phospholipids comprising polyunsaturated fatty acids and their applications” (“US’351”) on October 1, 2012 (the same day that US’351 issued). [Control #90/012,698 – the US examiner has granted re-examination based on a “substantial new question of patentability.”]

(2) Neptune filed US infringement actions against Aker based on Neptune’s krill oil patents (including US’351 and US 8,383,675 (“US’675”)) on October 2, 2012 and February 28, 2013. [US Delaware Cases – 1:12-cv-01252-UNA; 1:12-cv-01253-UNA and 1:13-cv-00340. These actions are stayed pending re-examination.]

(3) Neptune filed a complaint with the US International Trade Commission (“ITC”) in order to stop the infringing importation by Aker (based in Norway) in view of The US Patents, on January 29, 2013 (amended March 21, 2013). This was the pending US litigation at issue in the Aker v Neptune Quebec case. [Investigation No. 337-TA-877 – a hearing is scheduled for December 10-13, 2013. The ITC’s “target” completion date is July 17, 2014.]. Refer to http://edis.usitc.gov.

(4) Aker most recently filed an “Inter Partes Review” of US’351 with the USPTO, alleging anticipation and obviousness, on October 1, 2013 [IPR2014-00003]. Refer to http://www.uspto.gov/ip/boards/bpai/index.jsp

(5) In 2008-2009, Aker successfully opposed the European equivalent to US’351 (EP1417211) based on insufficiency (the compositions could not be reliably reproduced using the described methods). This was recently affirmed on appeal in April 2013, with the European Patent Office Board of Appeals releasing their Decision on October 18, 2013. Refer to https://register.epo.org/application?number=EP02753988&lng=en&tab=doclist.

The above list aptly illustrates the various forms of relief that may be available in multiple venues. One notable missing jurisdiction in the above list? Canada – Neptune’s base. Although it appears that Aker also sells its omega-3 fatty acid nutritional supplements in Canada (Schiff MegaRed), Neptune has not yet brought a Canadian patent infringement action (asserting its related CA 2,493,888 which recently issued on July 16, 2013). One may question whether the “Canada exclusion” is simply a reflection of the comparably small market in Canada, or whether there are more substantive reasons. For example, when the Apple/Samsung global patent litigation disputes started a few years ago, some commentators attributed the parties’ decision not to litigate in Canada to inter alia, our lengthy discovery process and our apparent reluctance to narrow the issues early on (for example by providing claim charts (for both validity and infringement) at a preliminary stage). We shall see if Neptune adds a Canadian patent action to its quiver of litigation vying to control the apparently lucrative krill oil industry.