Executive Summary: Key Legal and Evidentiary Issues

• Pharmascience seeks damages under section 8 of the Patent Act for delayed market entry due to prior patent litigation involving abiraterone.

• Dispute centers on admissibility of reply expert reports addressing market share estimations and damages.

• Defendants challenge the introduction of new selection criteria and datasets not present in initial expert evidence.

• Court evaluates whether the proposed reply evidence constitutes impermissible case-splitting.

• Justice Zinn finds the additional data and revised methodology to be a tactical bolstering, not proper rebuttal.

• Only uncontested portions of the reply reports are admitted; the remainder is excluded with costs awarded to the Defendants.

Facts of the case

Pharmascience Inc. initiated this proceeding against Janssen Inc., Janssen Oncology, Inc., and BTG International Ltd, seeking damages pursuant to section 8 of the Patent Act. The case arises from prior unsuccessful enforcement of Canadian Patent No. 2,661,422 by the Defendants under the Patented Medicines (Notice of Compliance) Regulations, which delayed Pharmascience’s entry into the Canadian market for abiraterone, a prostate cancer drug. The delay spanned from September 2019 to January 2021, during which time Pharmascience was prevented from launching its generic version.

In preparation for trial, Pharmascience submitted three expert reports in September 2024 addressing damages, particularly lost market opportunity and share. The primary focus was on the concept of the "first mover advantage"—the competitive edge a company gains by being the first to enter the market.

The contested reply reports

In response to rebuttals from the Defendants’ experts, Pharmascience filed three reply reports in early 2025. While the Defendants did not object to the Ferreira Reply Report and parts of the other two, they challenged significant sections of the Hollis and Soriano Reply Reports. The challenge centered on whether the newly introduced methods and data in the replies constituted appropriate rebuttal or improper case-splitting.

Dr. Hollis’ original report estimated Pharmascience’s market share using a dataset of 39 drugs that met a specific selection criterion. In reply, he revised this set by excluding numerous drugs, introducing new ones, and applying ten new selection criteria. This led to a recalculated, and significantly higher, damage estimate.

The court's reasoning and outcome

Justice Zinn assessed the admissibility of the contested reply evidence under Rule 274(1) of the Federal Courts Rules and related case law. He concluded that the new criteria and revised dataset represented a strategic repositioning, not a response to unforeseen arguments from the Defendants. The Court emphasized that Dr. Hollis could reasonably have anticipated a rebuttal based on applying his own criterion to the full dataset.

The Court held that the revised evidence amounted to impermissible case-splitting, as it strengthened Pharmascience’s original theory rather than responding to a truly new issue. Given the proximity to trial, the volume of new documents (around 4,000 pages), and the fact that this information had been available to Dr. Hollis from the outset, the Court found that admitting the full reply reports would cause undue prejudice and inefficiency.

Final decision

Justice Zinn ruled to admit only the uncontested portions of the Hollis and Soriano Reply Reports along with the entire Ferreira Reply Report. The Defendants were granted leave to submit sur-reply evidence in response to what was admitted, and they were awarded costs for the motion.