Court disallows expert disbursements in patent case

May 26, 2010

Counsel should be prudent in determining when it is appropriate to retain experts and have them incur costs on your client’s behalf.

In a decision determining allowable costs of the respondent Pharmascience in a proceeding discontinued by the applicant Sanofi-Aventis under the Patented Medicines (Notice of Compliance) Regulations, an assessment officer sought to determine whether expert witness disbursements totalling $17,000 could be claimed in the circumstances.

The three part test for the allowance of expert disbursements requires that:

(1) The disbursement for an expert must be prudent and reasonable in the circumstances existing at the time it was incurred;

(2) The terms of engagement must not constitute a blank cheque; and

(3) The extent of reliance on the expert by the trial judge should be a factor.

As per the third part of the test, disbursements cannot be disallowed based solely on the fact that a matter is discontinued (and thus never heard by a judge), as this would require hindsight. However, they must be reasonably incurred in the circumstances.In this case, a majority of the experts’ fees were incurred prior to the initial case management conference to set a schedule for the exchange of evidence, and were not even alleged to have been incurred in support of an early motion to dismiss. As a result, given that the ultimate burden of proof rested with the applicant Sanofi, the experts’ fees were found to be premature and therefore not allowed.

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