Federal Court Clarifies Cost Awards

Federal Court Clarifies Cost Awards

Apotex Inc. v. H. Lundbeck A/S [2013 FC 1188]


Apotex was the losing party in an impeachment trial of Lundbeck’s Canadian Patent 1,339,452 in which Lundbeck launched a counterclaim of infringement. Apotex was ordered to pay by way of an accounting of profits $1,410,906.21 and $304,177.38. A decision on costs was reserved. Apotex and Lundbeck now dispute how costs should be calculated, Apotex stating that costs should be awarded in accordance with mid-level Column IV and that there should be no doubling due to the settlement offer.



Rule 400 of the Federal Courts Rules provide the court with absolute discretion with respect to costs.


There was no divided success, Lundbeck was just less successful than they would have hoped. As a result it is appropriate to award costs on the high-end of Column IV.


Offers to settle are dealt with by Rule 419 of the Federal Courts Rules. An offer was made by Lundbeck that would have had both parties cease litigation with each paying their own costs. Where a plaintiff makes a written offer to settle and obtains a judgment at least as favourable as the terms of the offer they are entitled to party-and-party costs doubled up from the date of the offer.[13]


The offer, not accepted by Apotex, was not a unilateral discontinuance. Despite Rule 420 speaking to double costs until judgment, the Court only awarded double costs up to the date of close of argument.


The tariff is not intended to make a party whole with respect to counsels costs. The court notes “Big Pharma is big business, and big litigation is part of that business”.[24] It has not been court practice to award fees for a second junior counsel and so the Judge declines to do so here.


No disbursements are allowed for those who do not testify. In-house counsel and directors are not entitled to have their costs covered where they do not testify.


Reasonable disbursements for fact and expert witnesses were allowed.


Disbursements for in court stenography were allowed.[38]


The fees on the motion were dealt with and were not doubled up.