Recent Decisions June 2003
I. FEDERAL COURT DECISIONS
(a) Patents
1. Janssen-Ortho v. Canada (Minister of Health) et al., March 7, 2003 FCTD (Heneghan J.) Patent Register/Review of Minister's Decision to Remove Patent from Register/Patented Medicines (Notice of Compliance) Regulations, s. 4(2)(b)/Medical Device
Application for judicial review of a decision of the Minister to remove a patent from the patent register. The patent in question (the "Janssen patent") was for the DURAGESIC fentanyl patch. The Minister removed the Janssen patent because it did not contain claims for the medicine fentanyl itself or for the use of fentanyl as required by s. 4(2)(b) of the NOC Regulations; all 65 claims are directed to a "medical device" or "transdermal system" and the patent register does not extend to medical devices. Janssen argued that a pharmaceutical formulation combining active ingredients with non-medicinal ingredients for an intended therapeutic effect is a "claim for the medicine itself" within the meaning of s. 2 and 4 of the Regulations. Janssen also submitted that the Drug/Medical Device, Combination Products policy introduced in 1997, states that combination products need only file one type of submission for approval and further maintained that it would be inconsistent for its product to be subject to the regulations of a drug, yet be precluded from the benefit of the NOC Regulations.
Held: Application for review dismissed. The patch is not a medicine. The case was distinguished from Hoffman-La Roche v. Canada (Minister of National Health and Welfare) (1995), 62 CPR (3d) 58 (FCTD) since the "inactive" ingredients (release membrane, backing, etc.) in this case are not physically mixed with the medicine and are not ingested as a single composition. The claims of the Janssen patent are not for the medicine fentanyl or for the use of fentanyl and hence the Janssen patent does not fall within s.4(2)(b) of the NOC Regulations and is not eligible for inclusion on the register. The applications judge concluded that it is not appropriate for the Court to stretch the definition of "medicine" in order to comply with the Drug/Medical Device Combination Products policy and that the policy document did not have any bearing on the interpretation of the Janssen patent.
2. Barton No-Till Disk et al. v. Dutch Industries et al., March 7, 2003 FCA (Sharlow, Rothstein, Malone JJ.A.) Validity /Maintenance Fees/Top-up Payments/Entity Status/Abandonment
Appeal by Barton No-Till Disk from the Trial Division's decision that quashed the Commissioner of Patent's practice of accepting top-up payments. Hugh Barton, an inventor, filed a patent application (the 388 patent) on April 15, 1994. Mr. Barton qualified as a "small entity" pursuant to s. 2 of the Patent Rules and was entitled to pay maintenance fees on a lower scale. However, on November 24, 1994, Mr. Barton assigned the application to Barton No-Till Disk (Barton) which entered into an exclusive license arrangement with a company having more than 50 employees. As a result, the owner of the 388 patent no longer was a small entity. On April 12, 1995, Barton filed another patent application (the 904 application), which is still pending. The 388 patent was granted on July 23, 1996. Maintenance fees relating to the 388 patent and the 904 application continued to be paid, when due, on the small entity scale, despite the owner's change in status. Dutch Industries noticed this discrepancy and wrote to the Commissioner setting out its position that the fees for the 388 patent and the 904 application should have been paid on the "large entity" scale. Barton subsequently submitted top-up payments to correct its outstanding arrears for fees that should have been paid as a "large entity". The Commissioner accepted the top-up payments. Dutch Industries applied for judicial review of the Commissioner's decision. The Trial Division found that the Commissioner of Patents has no authority to accept top-up payments to correct a failure to pay the prescribed maintenance fees within the required time. The Trial Judge remitted the matter to the Commissioner for redetermination of the status of the 388 patent and the 904 application. The Commissioner decided that the statutory conditions for the issuance of the 388 patent were never met and deemed the 904 application to have been abandoned.
Held: Appeal allowed in part. The Court agreed that there is no statutory authority to permit a deficient maintenance fee to be topped-up after the date upon which the fee was due. Specifically, r. 157 of the Patent Rules, which precludes the Commissioner from extending the deadlines for the payment of maintenance fees, implicitly denies the Commissioner the authority to permit deficient maintenance fees to be topped-up after the prescribed due date. However, there is no requirement for the status of a person as a "small entity" or "large entity" to be redetermined each time a maintenance fee is due. If the applicant meets the definition of "small entity" when the patent regime is first engaged (generally when an application is submitted), then the application maintains that status for the duration of the period that the application is pending and any resulting patent term. The Court concluded that Mr. Barton met the definition of "small entity" on the date when the application for the 388 patent was submitted. All maintenance fees relating to the 388 patent should have been paid, and in fact were paid, on the "small entity" scale. Accordingly, there was no basis for concluding that the 388 patent should be deemed abandoned. Regarding the 904 application, the Court held that the maintenance fees should have been paid on the "large entity" scale since Barton did not meet the definition of "small entity" on the filing date of the 904 application. The Court therefore agreed that the 904 application was deemed to have been abandoned.
Sharlow J.A. commented that if a "small entity" incorrectly concludes that it is a "large entity", the consequences are not very severe. The "small entity" would simply have paid filing and maintenance fees that are modestly higher than required, with no chance of a refund. However, if a "large entity" incorrectly concludes that it is a "small entity", the consequences would be catastrophic if the Trial Division's approach was followed.
3. Ferring v. Canada (Minister of Health) et al., March 11, 2003 FCTD (Simpson J.) Patent Register/Review of Minister's Decision to Remove Patent from Register and Award NOC without Prior Service of NOA /Reinstatement of Patent/Revocation of NOC /Patented Medicines (Notice of Compliance) Regulations
Two applications for judicial review were brought by Ferring: (1) An application for review of a decision of the Minister to issue Apotex a NOC without prior service of a NOA to Ferring, and (2) an application for review of a decision to remove a patent from the patent register maintained under the NOC Regulations. Ferring filed a NDS for Desmopressin Acetate under the brand name DDAVP but was not permitted to list its patent (the "Ferring patent") on the patent register since it failed to comply with s. 4(4) of the NOC Regulations. Ferring next submitted a SNDS for the above drug changing the brand name to MINIRIN with an accompanying patent list, which was accepted. Apotex filed an ANDS, referring only to DDAVP. The Minister decided Apotex was not required to file an NOA because s. 5(1.1) of the NOC Regulations was inapplicable, since Ferring had not marketed MINIRIN in Canada. The Minister removed the Ferring patent from the register, asserting that adding a patent on the basis of a submission for an additional brand name was contrary to the scheme of s. 4, and issued Apotex a NOC. Ferring sought judicial review, contending the Minister erred in deleting its patent from the patent register and should reinstate it, and that the Minister erred in issuing Apotex a NOC.
Held: Applications granted. The Minister erred when he deleted the Ferring patent from the patent register and was ordered to re-list it. Apotex was not entitled to a NOC because it was issued without prior service of a NOA and the Minister was ordered to revoke the NOC. A central issue was whether a SNDS is a submission for a NOC as the term is used in s.4 of the NOC Regulations. The Court concluded that a SNDS is a submission for a NOC within the meaning of s.4. The application was distinguished from Bristol-Myers Squibb Canada v. Canada (A.G.) et al. (2001), 10 CPR (4th) 318 on the basis that Bristol-Myers had filed a patent list and was attempting to amend it, invoking s. 4(6) of the NOC Regulations. The applications judge rejected policy arguments that s. 4 is intended to provide a generic with certainty about when patents can appear on the patent register. The applications judge further rejected distinctions drawn based on the importance of submitted changes. Changes that require a SNDS under s. C.08.003(1) and (2)(b) of the Food and Drug Regulations are sufficient.
4. Pfizer Canada v. Canada (Attorney General) et al., March 14, 2003 FCA (Strayer, Nadon and Pelletier JJ.A.) Patent Register /Review of Minister's Decision Refusing to List Patents on Register/Filing Date/Patented Medicines (Notice of Compliance) Regulations, s. 4(4)
Appeals from an order dismissing applications for judicial review of decisions of the Minister of Health. The Minister refused to list certain Canadian patents on the patent register maintained under the NOC Regulations. The sequence of relevant events was as follows: Pfizer and Schering each filed U.S. patent applications for their respective drugs, and then filed new drug submissions in Canada in order to obtain NOCs. They then filed Canadian patent applications. NOCs issued in respect of the drugs. When the Canadian patents subsequently issued, both Pfizer and Schering sought to add the patents to the patent register. The Minister refused to list the patents on the patent register pursuant to s.4(4) of the NOC Regulations, on the basis that Pfizer and Schering had not filed Canadian patent applications prior to filing their NDS. The applications judge dismissed the judicial review applications, and Pfizer and Schering appealed.
Held: Appeals dismissed. The appellants argued that the term "a filing date" in s. 4(4) of the NOC Regulations is not confined to the date an application is made for a Canadian patent, but instead means the "priority date" of a Canadian patent based on the U.S. filing date. In the alternative, the appellants argued that the Court should resort to international conventions in order to determine the meaning of "a filing date." The meaning of "filing date" in s. 4(4) is clear and unambiguous and is confined to the filing of an application in Canada in conformity with the Patent Act. There is no need to resort to NAFTA, TRIPS and the Paris Convention where legislation is clear. None of the instruments relied on, even if applied directly to override the clear language of the NOC Regulations, would dictate the result insisted upon by the appellants.
5. Apotex v. Ferring et al., March 20, 2003 FCA (Décary J.A.) Stay Pending Appeal /Motion for Stay of Order Revoking NOC/Stay Granted Pending Full Hearing of Motion
Motions by Apotex for a stay of the Order of the applications judge pending the disposition of the full motion for a stay pending appeal. The Order had directed the Minister to re-list Ferring's patent on the patent register and to revoke a NOC issued to Apotex for the drug Apo-Desmopressin since it had been granted without prior service of a NOA to Ferring.
Held: The motions were allowed and the Order stayed until the full hearing of the motion for a stay pending appeal. Public interest was the basis for disposition of the motions. The revocation of the NOC would create a genuine risk of significant negative health effects and the respondents did not argue that there was no significant issue to be raised on the appeal.
6. Anchortek et al. v. Almecon Industries, April 1, 2003 FCA (Sharlow, Strayer, Sexton JJ.A.) Infringement/Claims Construction/Person Skilled in the Art
Appeal from judgment that held that the respondent's patent is valid and infringed by the appellants. The respondent's invention is a bore hole plug, known as the King Plug, used in seismic exploration to determine information about geological formations and to locate oil and gas. The plug is placed in a bore hole some distance above an explosive charge so as to contain the explosion within the bore hole and remain in place to support the fill required to close the bore hole. The invention utilizes outwardly and rearwardly extending "claws” which become imbedded in the sides of the bore hole following the explosion of the charge. The appellants manufacture a bore hole plug called the Energy Plug. The Energy Plug has outwardly and rearwardly extending claws similar to the King Plug. However, the forward end of the Energy Plug is recessed into the body member of the plug and has a truncated cone shape that is not “substantially closed”. The King Plug has a closed forward end which is cone-shaped with a truncated tip. The forward end of the King Plug is not recessed. Firstly, the appellants contend that the Trial Judge erred in determining the essential elements of the claims of the patent on the basis of the characteristics of the respondent’s King Plug rather than the language of the claims. Secondly, the appellants contend that the Trial Judge failed to consider the essential elements of the claim from the point of view of a person skilled in the art. Lastly, the appellants argue that the Trial Judge erred in concluding that the Energy Plug functions as a “tamping plug”, a plug that contains the explosion in the hole. Specifically, the appellants characterized the Energy Plug as a “venting plug”, which has openings in the forward end and is arguably operatively different from the “tamping plug” disclosed in the respondent’s patent.
Held: Appeal dismissed. The Court held that it is incorrect to construe a patent with an eye to the allegedly infringing device. However, the Court concluded that the Trial Judge had not made the error of construing the patent in view of the King Plug. The Trial Judge had merely restated the essential elements of the claim based on a construction of the patent by Wetston J. in an earlier infringement action. The construction of the claims was not in controversy because both the appellants and respondent had accepted Wetston J.'s earlier analysis. The Court rejected the appellants' argument that the Trial Judge failed to consider the essential elements of the claims from the point of view of a person skilled in the art. The Trial Judge held that a person skilled in the art regarding bore hole plugs would be an experienced seismic crew technician. However, in deciding that the Energy Plug infringed the respondent's patent, the Trial Judge was considerably influenced by the expert evidence of a civil engineer, more so than by the evidence of a seismic crew technician. The Court held that even in considering an issue that must be viewed through the eyes of a person skilled in the art, the weight to be given to any expert opinion is for the Trial Judge alone to decide. The Court concluded that there was sufficient evidence to support the conclusion of the Trial Judge. Lastly, the Court held that there was evidence to support the conclusion that, despite the existence of openings in the forward end of the Energy Plug, it effectively "tamped" explosions in a seismic bore hole. The Court further stated that the forward end of the Energy Plug was, in functional terms, flattened and substantially closed like the King Plug.
7. Apotex v. Bristol-Myers Squibb Canada et al., April 8, 2003 FCTD (Russell J.) Summary Judgment/Claims for Accounting of Profits and Legal Expenses Following Discontinuance of Prohibition Application /Patented Medicines (Notice of Compliance) Regulations, s. 8
Motion by Bristol-Myers for summary judgment to dismiss claims brought by Apotex for an accounting of profits and legal expenses. Following discontinuance of prohibition proceedings brought by Bristol-Myers under s.6 of the NOC Regulations, Apotex commenced an action under s. 8 of the Regulations for an accounting of profits and legal expenses. The prohibition proceedings had been discontinued by agreement and a Notice of Discontinuance was issued on a without costs basis. Both parties signed this agreement. Bristol-Myers moved for summary judgment in the action, arguing that Apotex could not claim an accounting of profits, but only damages under s. 8 of the NOC Regulations. Bristol-Myers also moved for summary judgment on the claim for legal expenses based upon estoppel and res judicata.
Held: Summary judgment allowed in part. The motions judge reviewed the arguments advanced by Bristol-Myers and Apotex concerning whether an accounting of profits is available under s. 8 of the NOC Regulations, and concluded that there was a serious issue for trial. The motions judge was of the view that these were complex and far-reaching issues that required a thorough contextual explanation of s. 8, and were therefore the domain of a trial judge. The motions judge did grant summary judgment on the issue of legal expenses, and dismissed that element of the Apotex action. The motions judge found that the Notice of Discontinuance indicated on its face that it would be executed "on a without costs basis" and concluded that the parties had agreed that they would not claim against each other for legal expenses.
8. Norac Systems International v. Prairie Systems and Equip., April 10, 2003 FCA (Décary, Linden, Sahrlow JJ.A.) Appeal /Invalidity Ground Not Raised in Pleadings /Infringement
Appeal from judgment finding that the appellant’s patent was invalid for lack of utility and not infringed by the respondent’s device. The appellant argued that the Trial Judge should not have considered argument on the issue of inutility as it was not properly raised in the pleadings. The appellant submitted that the issue only arose during the course of a cross-examination of an expert witness for the appellant in the form of a surprise question on a new matter never before reviewed by the expert. The respondent argued that the issue of utility is implicit in the general claim of invalidity.
Held: Appeal allowed in part. The finding of invalidity is set aside and the finding of non-infringement is confirmed. The appellant is entitled to fair warning of attacks on the validity of a patent. Where a claim of invalidity is not pleaded, the Court must give the appellant an opportunity to prepare a defence if the claim later arises. With respect to the finding of non-infringement, the Court was unwilling to disturb the Trial Judge’s interpretation that the term “tension load cell” in the specification did not include a “shear beam load cell”. The Trial Judge found a difference between the two devices which was soundly based on the evidence.
(b) Trade Marks
1. Dell Computer v. Latitude Communications, May 15, 2003 FCTD (Simpson J.) Opposition Appeal/Co-existence Agreement
Appeal from an opposition decision. The appeal was not opposed by the respondent. The applicant filed new evidence on appeal, namely a co-existence agreement between the parties. The agreement acknowledged that there has been no confusion between the parties' LATITUDE wares and provided that steps would be taken to prevent confusion in the future.
Held: Appeal allowed. The Court was satisfied that the agreement is a significant document that would have affected the Registrar's decision.
2. Intuit v. Quiklaw, May 15, 2003 FCA (Evans J.A.) Opposition Appeal/Onus/Family of Marks/Standard of Review
Appeal from the Trial Division's decision that upheld the rejection of Intuit's opposition to Quiklaw's application to register QUICKTAX.
Held: Appeal dismissed. The standard of review is reasonableness because the Registrar's finding concerning the distinctiveness of Quiklaw's trade mark was essentially factual in nature, or at best, a question of mixed fact and law. The Registrar's conclusion was reasonable. The Registrar was not purporting to change the law relating to the onus of proof with respect to a trade mark application when he stated, "the opponent's task to negate the distinctiveness of a newcomer to the applicant's family of marks is somewhat more difficult than in the ordinary case."
(c) Copyright
1. Foliot v. Heartwood Manufacturing et al., April 24, 2003 FCTD (Noël J.) Interlocutory Injunction/Irreparable Harm
Application for an interlocutory injunction against the defendants to prohibit the reproduction, in the form of plans or three-dimensional form, of a captain's bed constructed like that of the plaintiff. Foliot designed and manufactured a captain's bed which had an underlying metal structure combined with a wood covering for decorative purposes, and drawers on castors. Heartwood had tendered and offered to manufacture captain's beds for student residences of the second defendant. Heartwood's beds had a metallic structure but Heartwood claimed that its beds were different from those of Foliot, since Foliot's beds were fastened at all joints while Heartwood's beds could be dismantled for storage. Foliot had not registered its concept for the captain's bed under either the Patent Act or the Industrial Design Act. Foliot claimed that Heartwood's bed infringed its rights in its beds as artistic works under s. 34 of the Copyright Act. The defendants claimed that the beds were not a work protected under the Copyright Act, given the exception provided for utilitarian items under s. 64.1(1) of the Act.
Held: Interlocutory injunction denied with costs. The Court held that there was a serious issue to be tried, namely whether the plaintiff's captain's bed was an artistic work protected under the Copyright Act, or would fall under the s. 64.1(1) exception. However, the plaintiff failed to prove the existence of irreparable harm. In order to prove irreparable harm, there must be concrete facts with examples describing the situation and demonstrating that it would be impossible to receive compensation. In this case, Heartwood submitted proof that its bed had not been offered for sale, and other than the construction of the prototype model, had not even been manufactured. Furthermore, the beds that Heartwood would have been contracted to manufacture were for installation in residences. Finally, the defendants are solvent companies, and the damages, if any, are calculable. Given that irreparable harm was not proven, it was not necessary to evaluate the balance of convenience.
2. Morris Bonds v. Suzuki Canada et al., May 15, 2003 FCTD (Martineau J.) Summary Judgment/Infringement
Motion by the defendants for summary judgment in an action that alleges that the defendants have infringed the plaintiff's copyright in a car design. The plaintiff designed a car and offered to license the design to Suzuki.
Held: Summary judgment granted because no genuine issue for trial exists. There is no basis for considering the Suzuki vehicle to be derived from a copy of the plaintiff's car; the only similarities are in its generic automobile characteristics. In addition, the plaintiff has failed to file his best evidence with respect to his claim of ownership of the copyright in the drawings of his car design; the plaintiff is not the artist who produced the drawings and the evidence of assignment of the copyright to the plaintiff is not conclusive. In any event, copyright cannot be asserted with respect to a useful article such as a vehicle.
(d) Practice
1. Apotex v. Glaxosmithkline et al., February 4, 2003 FCTD (Kelen J.) Extension of Time to Conduct Further Examination
Motion by respondent for an order that the applicant’s witness re-attend to answer questions refused or taken under advisement.
Held: Motion dismissed. The cross-examination had been conducted some 4 months previous and no request had been made that the questions be answered prior to the filing of the motion. The application had been to status review and a schedule had been ordered which provided for the respondents to deliver their record by a certain date. The motion was brought one week prior to the date for the filing of the respondent's record. The respondent's explanation for the delay in bringing the motion was that counsel for the applicant had represented that they would investigate or consider certain matters and that following the Notice of Status Review, it was not possible to file further documents with the Court pending the decision in the status review. The respondent had not objected to the proposed schedule filed on the status review. In the circumstances, the respondent had no reasonable explanation for the delay.
2. Almecon Industries v. Anchortek, February 5, 2003 FCTD (O’Reilly J.) Costs Assessment Conduct while Appeal Pending
Motion to set aside a certificate of assessment.
Held: Motion dismissed. The plaintiff had obtained judgment at trial, including costs to be assessed. The defendant had filed an appeal and sought to have the costs assessment delayed pending the appeal. The Court was not directed to any authority for the proposition that costs assessments should await the outcome of any appeal. Noting that there were no grounds for a stay of the costs order, the Court held that the assessment of costs should proceed even though the appeal was to be heard with a few days.
3. James W. Halford et al. v. Seed Hawk et al., February 10, 2003 FCTD (Pelletier J.) Admission of Expert Evidence in Reply
Motion to put in additional expert evidence on the issues of patent infringement and invalidity.
Held: Motion granted, in part. The plaintiffs brought the motion after the defendants had closed their case. The Court reviewed trial practice and the use of expert affidavits. Rule 274(1) provides that at the trial of an action, unless the Court directs otherwise, the plaintiff makes an opening address then adduces its evidence, then the defendant opens and adduces its evidence. After the defendant closes, the plaintiff may adduce reply evidence. Rule 281 contemplates the delivery of rebuttal affidavits from experts but, the Court held, this does not mean that a party can prepare a rebuttal affidavit which goes to an element of the party's case in chief and tender that evidence in reply. The affidavit may be in rebuttal to another affidavit, but if the affidavit deals with an issue in the case in chief it must be tendered in chief. It matters not that the rebuttal affidavit may be drafted by way of contradiction of specific paragraphs in another affidavit and that the other affiant may or may not adduce the evidence from the affidavit at trial. “The party beginning must exhaust his evidence on an issue in the first instance and may not split his case by first relying on prima facie proof, and when this has been shaken by his adversary, adducing confirmatory evidence.” (Allcock Laight & Westwood Ltd. v. Patten, Bernard [1967] 1 O.R. 18 (C.A.) citing Jacobs v. Tarleton (1848), 11 Q.B. 421, 116 E.R. 534) The Court outlined the following principles that govern the admissibility of reply evidence:
1. Evidence that is simply confirmatory evidence already before the Court is not allowed.
2. Evidence that is directed to a matter raised for the first time in cross-examination and which ought to have been part of the plaintiff’s case in chief is not allowed. Any other new matter relevant to a matter in issue, and not simply for the purpose of contradicting a defence witness, may be allowed.
3. Evidence that is simply a rebuttal of evidence led as part of the defence case and which could have been led in chief is not permitted.
Applying these principles to the expert affidavits that the plaintiffs sought to tender, certain evidence of infringement was not admitted as it was part of the plaintiffs' case in chief and other evidence which represented a difference of opinion which had already been expressed in chief and cross-examination was not admitted as it was merely confirmatory. Evidence in reply to a new matter raised in re-examination was admitted.
4. AstraZeneca Canada v. Apotex et al., March 27, 2003 FCTD (O'Keefe J.) Prohibition Application/Answers to Questions Refused on Cross-examination/Extension of Time for Completing Cross-examination/ Patented Medicines (Notice of Compliance) Regulations
Motion by Apotex to set aside an order of the Prothonotary. By motion, AstraZeneca had requested answers to questions which were refused to be answered at the cross-examination of an Apotex witness, Dr. Sherman. AstraZeneca also asked for an extension of time to complete the cross-examination, since the time for doing so had expired. The Prothonotary ordered Dr. Sherman to provide answers to a number of questions, and granted an extension of time. Apotex appealed.
Held: Motion dismissed. The Prothonotary ruled that the questions needed to be answered because the questions were relevant. Since relevance is a question of law, the standard of review is correctness. The Prothonotary correctly concluded that Apotex must provide answers to the questions which were refused at Dr. Sherman's cross-examination. Among other things, Apotex must produce a copy of the product monograph referred to in its NOA, and must produce documents that show how formulation difficulties referred to by Dr. Sherman in his affidavit were overcome. Further, the Prothonotary was not clearly wrong in granting the extension of time for further cross-examination after the questions are answered. A delay of four weeks in bringing its motion would not result in a finding that AstraZeneca did not move promptly.
5. Lassonde v. Sun Pac Foods, April 2, 2003 FCTD (Blais J.) Amending Pleadings /Trade Mark
Motion by plaintiff against an order by Prothonotary Morneau that dismissed plaintiff's motion for leave to amend its statement of claim, and allowed in part the defendant's motion. The plaintiff's action claimed that the defendant was using a trade mark that was confusingly similar to that of the plaintiff. The Prothonotary permitted plaintiff to submit an amended statement of claim concerning a paragraph electing in favour of accounting of profits. The plaintiff amended its statement of claim to include additions concerning punitive damages. The defendant brought a claim to strike out the amended statement of claim. Plaintiff also brought a claim to permit the amendments. The Prothonotary issued an order rejecting the plaintiff's claim to permit the amendments and granting in part the defendant's claim to have the amended statement of claim struck out. This order was the subject of the present claim, namely, had the Prothonotary committed an error in law or in fact justifying the intervention of the Court.
Held: Plaintiff's motion dismissed with costs in favour of the defendant. It is clear that the federal court rules allow a party to amend a procedural act under different conditions, either with authorization of the Court or by right. In the present case, the plaintiff had been expressly authorized by an order to amend its claim concerning the accounting of profits. However, the plaintiff made additions concerning punitive damages, without having satisfied the conditions for authorization under r. 75, or amendment as of right under r. 200. No consent had been obtained from the defendant relative to these amendments. The Prothonotary's order, and the plaintiff's request, had specifically referred to the paragraph of the plaintiff's statement of claim concerning accounting of profits. The plaintiff should have requested authorization to amend its statement of claim in respect of punitive damages, as it had done in respect to accounting of profits. It was due to the plaintiff's own negligence that its amendments regarding punitive damages were not authorized by the Prothonotary. The plaintiff should have taken the necessary measures to obtain either the Prothonotary's authorization or the defendant's consent for such amendments. The Prothonotary therefore committed no error which would justify the intervention of the court. (Defendant was also ordered to pay the plaintiff $500 since its negligence had largely contributed to delay in the hearing of this issue).
6. Bauer Nike Hockey v. Tour Hockey et al., April 17, 2003 FCTD (Tremblay-Lamer J.) Summary Judgment/Without Prejudice Correspondence/Privilege/Costs
Motion by the plaintiff for summary judgment in a trade mark infringement action. The defendants' solicitors sent a "without prejudice" letter to the plaintiff's solicitors stating that the defendants were willing to admit to infringement and consent to judgment. The plaintiff's solicitors sent a reply accepting the defendants' settlement offer. Further correspondence failed to reach a consensus with respect to the documents necessary for a consent judgment. The defendants submit that all the correspondence is inadmissible as evidence because it is subject to privilege as it was produced solely in the context of privileged settlement discussions.
Held: Summary judgment granted. The parties' initial letters (wherein the defendants offered a settlement and the plaintiff accepted such offer) are admissible as they are necessary for the Court to resolve the dispute as to the existence of a settlement. Settlement offers and related correspondence are protected by privilege, with or without the words "without prejudice", but only prior to acceptance. The Court rejected the defendants' submission that the initial letters were only an agreement to agree (the defendants' initial letter did not specifically reject any portions of the Statement of Claim and did not indicate that their offer would be conditional on the parties signing a formal contract). The plaintiff's request for costs on a solicitor-client basis was denied because the defendants' conduct in deciding to not honour their offer of settlement cannot be characterized as reprehensible, scandalous or outrageous.
7. Universal Foods. v. Hermes Foods Importers et al., April 17, 2003 FCTD (Lemieux J.) Anton Piller /Contempt /Penalty /Costs
The plaintiff corporation and its principal appeared to show cause why they should not be held in contempt of an order requiring the plaintiff to return goods seized pursuant to an Anton Piller order forthwith.
Held: The plaintiff corporation was held in contempt and ordered to pay a fine of $4,000 and costs of $3,200, or half the solicitor-client costs of the defendant/moving party. The plaintiff had obtained and enforced an Anton Piller order at one of the defendants' stores, seizing 19 cases (20 jars to a case) and 120 individual jars containing jams and pickles, and 150 bottles of syrup. The defendants moved to set-aside the Anton Piller on the grounds that the plaintiff had made a material non-disclosure and the plaintiff consented to an order that the jams, pickles and syrup be returned forthwith. Most but not all of the goods were returned a month and 10 days later. The Court held that the order required the goods to be returned "Immediately, at once, without delay," based on the dictionary definition of the word "forthwith", which had been applied in other cases. The plaintiff had special obligations due to the extraordinary nature of an Anton Piller order. Having seized the goods pursuant to an Anton Piller order, the plaintiff was obliged to return the goods within a matter of days. It was no excuse that Christmas holidays fell during the month and 10 day period, the plaintiff did not have a copy of the list of goods seized, and the bailiff holding the goods had not segregated the goods seized from the subject store from goods seized at other stores. The individual was not in contempt. He had not interfered with the administration of justice as he had genuinely attempted to effect the return of the goods. Even though the corporate plaintiff did not deliberately flaunt the order, a $4,000 fine was levied to deter those who obtain ex parte Anton Piller orders from failing to comply with stringent conditions surrounding custody of goods seized under such orders. Although the normal practice in a successful application for an order finding contempt is that the moving party have its solicitor and client costs, the hearing was deemed unnecessary to ensure compliance with the order as it had been substantially complied with by the time the show cause order was made and, therefore, only half such costs were awarded.
8. Apotex v. Astrazeneca Canada, May 26, 2003, FCA (Linden, Rothstein and Malone JJ.A.) Stay of Proceedings/Forum Conveniens
Apotex appealed the stay of its Federal Court action for an order that no copyright subsists in the product monograph for one of Astrazeneca's products.
Held: Appeal dismissed. The stay was properly granted by the prothonotary, and the Trial Judge did not err in denying Apotex's appeal from that order. There was a parallel proceeding in the Ontario Court, which Astrazeneca had commenced before the Federal Court action. In that action, Astrazeneca was the plaintiff and was claiming infringement of the copyright in the product monograph. Apotex argued that the Trial Judge erred in law in staying the Federal Court action without having found that the Ontario Court was a clearly more appropriate forum as required by the test in Amchem Products v. British Columbia (Workers' Compensation Board), [1993] 1 S.C.R. 897 at para. 53. Apotex argued that the Federal Court was the more appropriate forum because (1) the Federal Court has exclusive jurisdiction to make an order in rem expunging copyright registrations; (2) Apotex would have a juridical advantage in the Federal Court since it could appeal interlocutory decisions as of right; and (3) Astrazeneca's choice of forum was arbitrary. The Court of Appeal held that the forum conveniens test from Amchem did not apply when there is a parallel proceeding within Canada commenced prior to the Federal Court action. The Amchem test does not entitle the Federal Court of Canada to determine that it is more appropriate than the court of another jurisdiction where the parallel action arose first. That would be achieved by an anti-suit injunction, which is contrary to judicial comity. By commencing the Federal Court action, Apotex had attempted artificially to tilt the forum non conveniens test in its favour. In the circumstances, it was appropriate to give deference to the Ontario Court where the action was first begun. It is vexatious if one party institutes proceedings to obtain relief in respect of the same subject matter where exactly the same issue is raised by his opponent in proceedings already instituted in another court in which he is not the plaintiff.
II. OTHER COURT DECISIONS
1. Dolmage v. Erskine et al., January 14, 2003 OSCJ (Searle Deputy J.) Copyright Infringement/Moral Rights/Punitive Damages /Jurisdiction re Injunction/Limitation Period /Academic Exception
Small Claims Court action in which the plaintiff claims declarations, a permanent injunction, an order for delivery-up or destruction of materials, damages for infringement of both copyright and moral rights, an accounting of profits and punitive or exemplary damages. The plaintiff and the individual defendants are professors at University of Western Ontario (UWO), which is one of the corporate defendants. The plaintiff attended a workshop course directed by the individual defendants, the purpose of which was to create case studies. The case study produced by the plaintiff pursuant to the course was ultimately offered for sale by the corporate defendants. The plaintiff's main objection is that the case study originally stated that he had written it but subsequently was revised by the defendants to state that he had prepared it and to list all the professors' names in a manner that might be interpreted as indicating that they were co-authors.
Held: The corporate defendants' actions infringed the plaintiff's moral rights, but not his copyright. $3,000 damages awarded for indignation and diminution of reputation.
The plaintiff is the sole author of the case study. As he was aware of the alleged copyright infringement from the beginning, any related remedies would be subject to the limitation period in s. 41 of the Copyright Act. UWO does not own the copyright pursuant to the employment relationship between it and the plaintiff because of the application of the academic exception to the general copyright ownership rules. This exception, which has been accepted in university environments for many decades, qualifies as an implied "agreement to the contrary" under s. 13(3) of the Act. However, UWO did become the owner of the copyright when the plaintiff signed a release that constituted a written assignment of the copyright. The copyright infringement claims therefore fail.
With regard to the misleading attributions, the evidence showed that the plaintiff was unaware that such wording had been revised and he could not reasonably have been expected to know of the alleged infringement of his right of association. As a result, no limitation period applies to that part of his suit. The published versions of the plaintiff's case stated that the plaintiff prepared, rather than wrote, the case because that was the traditional wording used by prominent U.S. schools. The Court pointed out however that a statutory right of association or attribution does not exist in the U.S. There being no practical reason for downgrading the writer to a preparer, the Court found the failure to associate the plaintiff as author to be unreasonable. The plaintiff is therefore entitled to moral right remedies in the form of general damages. An account of profits is not a suitable remedy because the defendants did not produce a gain as a result of having diminished the plaintiff's role. Punitive damages are "out of the question" because there was no malice or targeting of the plaintiff.
The Ontario Small Claims Court does not have jurisdiction to issue an interlocutory injunction or a declaration.
2. In the Matter of the Bankruptcy of Stewart House Publishing, March 1, 2003 OSCJ (Farley J.) Security Interest /Bankruptcy /Copyright Act/Trade-marks Act
When Stewart's Receiver and Trustee in bankruptcy moved for approval of its liquidation proposal agreement, Egmont opposed it in part. Egmont had an agreement with Stewart whereby Stewart purchased books from Egmont at a discount. These purchases were made on a firm sale basis but Egmont reserved title to the books until Stewart had paid in full. Paragraph 16(e) of the agreement stated that "on termination of this Agreement for any reason [Egmont] .... may, at its option, enter [Stewart's] premises to remove all stock". Egmont opposed the liquidation based both on this agreement and on the Copyright and Trade-marks Acts.
Held: Liquidation proposal approved in full. In pith and substance, para. 16(3) of the agreement between Egmont and Stewart is a realization of Egmont's security interest, but that security interest is subordinate to other security interests. As the trade-marked goods are genuine, there is no basis for relief based on the Trade-marks Act or infringement of Egmont's trade marks. Nor does anything about the proposed sale of the books offend the Copyright Act.
3. Dixon's Marine Group 2000 v. N.S. Importers et al., March 17, 2003 NBCQB (Smith C.J.Q.B.) Passing Off/Interlocutory Injunction
Motion for an interlocutory injunction to prevent the defendants from continuing to build and market yachts using a hull design which belongs to the plaintiff. The parties had entered into an agreement by which the defendants would manufacture and sell yachts using the plaintiff's design but relationships deteriorated and the plaintiff now alleges that the defendants are passing off their product as an original design and not the design developed by the plaintiff.
Held: Motion dismissed because irreparable harm has not been shown. The plaintiff is not likely to suffer permanent market loss or irrevocable damages to its business reputation. If the plaintiff succeeds at trial, the remedies of a permanent injunction and damages would be adequate. Furthermore, the balance of convenience weighs against granting an interlocutory injunction because it would result in the defendants being barred from the marketplace.
III. SECTION 45 DECISIONS
1. Aramark Canada v. Worldwide Specialty Foods, February 27, 2003 (Savard) Incorrectly Identified Exhibits/Sufficiency of Evidence
WORLD'S FARE registered for various food items.
Held: Registration restricted to those wares supported by the evidence. Although the exhibits were incorrectly described and identified, no prejudice was caused by this as it was clear from the wording which exhibit the affiant was referring to (all the exhibits were properly notarized). The Registrar accepted that the documents referred to as invoices were in fact invoices, because they displayed that word, and gave little weight to the requesting party's point that they lacked a listed price. The Registrar commented that the non-professional quality of the registrant's labels may be explained by the fact that the registrant operates in the wholesale market, rather than the retail market.
2. Sim & McBurney v. Algo Group, February 27, 2003 (Savard) Use by Whom /Distinctiveness
HOMBRE registered for men's and women's shorts, pants, shirts and men's jeans.
Held: Registration restricted to those wares supported by the evidence. The registrant's invoices displayed both its name and the name Hombre Outfits Ltd. The requesting party argued that the trade mark was distinctive of Hombre Outfits Ltd. The Registrar accepted the affiant's statement that Hombre Outfits Ltd. is simply a division of the registrant and noted that distinctiveness is not an issue to be considered in s.45 proceedings.
3. Osler, Hoskin & Harcourt v. Canada Post, February 27, 2003 (Savard) Sufficiency of Evidence
INTELPOST registered for telecommunications services including satellite telecommunications services and facsimile telecommunications services….
Held: Registration maintained. The registrant only showed use in association with facsimile telecommunications services but that is sufficient to maintain the registration in its entirety since the statement of wares uses the word "including", not "namely".
4. 929641 Ontario v. 1290467 Ontario, February 27, 2003 (Savard) Use of Trade Mark Per Se
PHOENIX registered for bicycles and bicycle parts.
Held: Registration maintained. Although the invoices referred to sales of "Phoenix Blaze" bicycles, the fact that each of PHOENIX and BLAZE appeared by itself on separate parts of the bicycle satisfied the Registrar that PHOENIX per se was being used.
5. Marks & Clerk v. Coppley Apparel Group, February 27, 2003 (Savard) Use by Whom/Jurisdiction Under Section 45
HARRIS & HOBB'S & Design registered for various clothing items.
Held: Registration restricted to those wares supported by the evidence. Although the invoices bore the name of the registrant's predecessor, the Registrar was prepared to accept that the registrant "may simply have failed to amend its forms immediately after the merger and is probably exhausting whatever supplies the predecessor had on hand."
The Registrar also noted that amalgamating corporations do not form a new corporation but rather continue to exist as one corporation. The requesting party requested that the Registrar amend the statement of wares to indicate that the registrant only sells men's clothing but the Registrar indicated that s. 45 does not authorize such an amendment.
6. Telus v. CIBC Mortgages, February 27, 2003 (Savard) Sufficiency of Evidence
THE MORTGAGE CENTRE & Design registered for operation of a mortgage brokerage.
Held: Registration expunged because the evidence fails to show that the services were performed during the relevant period. The mark appears on a manual and advertising kit that are distributed to independent mortgage brokers and the affiant stated that these materials were in continual use in the relevant time period. However, no evidence was filed to show when these materials were distributed or to support the bare allegation that they were in use during the relevant time period.
7. Advantage Car & Truck Rentals v. Advantage Rent-A-Car, February 27, 2003 (Savard) Use in Canada/Incidental or Ancillary Services
ADVANTAGE RENT-A-CAR registered for automobile rental services and automobile leasing services.
Held: Registration maintained. The requesting party argued that the mark was not used in Canada because all of the registrant's rental operations are in the U.S. However, the registrant is providing reservation services in Canada and the registered services can be interpreted broadly enough to encompass these incidental or ancillary services. [Société Nationale des Chemins de fer FranÇais SNCF v. Venice Simplon-Orient-Express, Inc. (1995), 64 C.P.R. (3d) 87, affmd. 9 C.P.R. (4th) 443] The registrant performed reservation services in Canada through Canadian travel agencies acting as its intermediary, as well as by sending promotional material to Canadian consumers and providing Canadian residents with direct billing privileges.
8. Shapiro Cohen v. Eclipse International Fashions, February 27, 2003 (Savard) Sufficiency of Evidence
ECLIPSE registered for various items of ladies' sportswear.
Held: Registration expunged. The affiant stated that the mark was used with the registered wares but the supporting evidence only showed use in association with men's clothing. The affiant never stated that the mark was used in association with ladies' sportswear during the relevant time period and the resulting doubt must be resolved against the registrant.
9. Lalanne Marchais de Candé v. S.C.A.T.- Canada, February 27, 2003 (Savard) Use Not by Owner/Use with Wares
PARA & Design registered for pharmaceutical preparations.
Held: Registration expunged. The registrant provided evidence of use in the form of an invoice, showing sale of shampoo. The invoice referred to a party other than the registrant and no evidence was provided to explain the relationship of this company to the registrant. In addition, no evidence was submitted showing whether the mark appeared on the wares or its packaging. Also, the invoice showed only the word PARA with a description of the product - the design mark was not displayed. Finally, the invoice referred only to shampoo, and did not indicate whether the shampoo was medicated, making it impossible to determine whether the sale was in association with the registered wares "pharmaceutical preparations".
