Denharco Inc. v. Forespro Inc., 2002 FCT 756

Date: 20020709

Docket: T-1868-98

Montréal, Quebec, July 9, 2002

Before: Pinard J.

BETWEEN:

DENHARCO INC.

Plaintiff

(cross-defendant)

and

FORESPRO INC. and

QUADCO EQUIPMENT INC.

Defendants

(cross-plaintiffs)

JUDGMENT

The appeal from the order by the prothonotary Aronovitch on June 6, 2002, allowing certain objections raised at the examination for discovery of Laurent Denis, is allowed in part. The order in question is accordingly varied by replacing its paragraphs 1, 2 and 3 by the following:

            1.         the motion is allowed on the following points: it is otherwise dismissed;

            2.         the inventor Laurent Denis shall promptly appear again to answer questions 568, 570, 571(a) and (c) above and shall further provide the information and documents requested in question 571(b) above;

            3.         as the outcome is divided, costs will follow the case.

                                                                                                                                                "Yvon Pinard"                   

                                                                                                                                                               Judge                      

Certified true translation

Suzanne M. Gauthier, C. Tr., LL.L

Date: 20020709

Docket: T-1868-98

Neutral citation: 2002 FCT 756

BETWEEN:

DENHARCO INC.

Plaintiff

(cross-defendant)

and

FORESPRO INC. and

QUADCO EQUIPMENT INC.

Defendants

(cross-plaintiffs)

REASONS FOR JUDGMENT

PINARD J.

[1]                 By their motion filed on June 17, 2002, the defendants appealed the order made by the prothonotary Aronovitch on June 6, 2002, regarding objections by the plaintiff to certain questions put by the defendants to the inventor Laurent Denis, in his examination for discovery. The filing of the subsequently amended notices of motion, objected to by the plaintiff, was not authorized by this Court.

[2]                 On June 6, 2002, the defendants filed a motion with the prothonotary Aronovitch for a decision on the objections concerned in the following eight questions:

            (a)        on the corresponding application which was denied in the U.S.:

                         (1)        "Is it true to say that the corresponding patent application filed in the U.S. was never accepted by the U.S. Patent Office?" (Q.568);

                         (2)        "Did your patent officer at the time disclose the reasons why the corresponding U.S. patent application was not accepted?" (Q.570);

                         (3)        "Can you tell me the reason why the corresponding patent application filed in the U.S. was rejected?" (Q.571(a));

                         (4)        "Then I would like a copy of the final decision or the most recent official letter from the U.S. Patent Office in which the patent application was denied" (Q.571(b));

                         (5)        "And if that decision is correct, especially regarding prior art, I should like to know which prior art" (Q.571(c));

            (b)        as regards the extra-judicial statement by the inventor concerning the invalidity of patent 627:

                         (6)        "And if I said to you that in a telephone conversation you had with him [Jean Sigouin] shortly after the beginning of the court proceedings by Denharco against Forespro you told him to look carefully at the patent just discussed because, in your opinion, it was invalid, is that something you might have said?" (Q.653);

                         (7)        "But as regards that patent, what in particular were you referring to?" (Q.654);

                         (8)        "And what were the things you pointed out to Mr. Sigouin?" (Q.655).

[3]                 The applicable standard of review in an appeal from a discretionary order by a prothonotary has been well stated by MacGuigan J.A. in Canada v. Aqua-Gem Investments Ltd., [1993] 2 F.C. 425, at 462-463 (C.A.):

I also agree with the Chief Justice in part as to the standard of review to be applied by a motions judge to a discretionary decision of a prothonotary. Following in particular Lord Wright in Evans v. Bartlam, [1937] A.C. 473 (H.L.) at page 484, and Lacourcière J.A. in Stoicevski v. Casement (1983), 43 O.R. (2d) 436 (Div. Ct.), discretionary orders of prothonotaries ought not to be disturbed on appeal to a judge unless:

(a) they are clearly wrong, in the sense that the exercise of discretion by the prothonotary was based upon a wrong principle or upon a misapprehension of the facts, or

(b) they raise questions vital to the final issue of the case.

Where such discretionary orders are clearly wrong in that the prothonotary has fallen into error of law (a concept in which I include a discretion based upon a wrong principle or upon a misapprehension of the facts), or where they raise questions vital to the final issue of the case, a judge ought to exercise his own discretion de novo.

[Reference omitted.]

* * * * * * * * * * * * * * * * *

[4]                 First, on questions 568, 570 and 571(a) and (c), all relating to the corresponding U.S. patent application, it is worth noting that in Samsonite Corp. v. Holiday Luggage (1988), 20 C.P.R. (3d) 291, at 314, Reed J. admitted such information contained in files known as "file wrappers", considering such evidence relevant to establish prior art that would counter the presumption that an issued patent was valid.

[5]                 I also consider that this is a case in which the following comments by Reed J. in a subsequent decision (Foseco Trading A.C. et al. v. Canadian Ferro Hot Metal Specialties, Ltd. (1991), 36 C.P.R. (3d) 35, at 47), are completely applicable:

It seems clear that information contained in file wrappers, either domestic or foreign, may be relevant for some purposes on some occasions. It may be that much of the information obtained by asking question relating thereto will turn out to be irrelevant but that is a decision for the trial judge to decide in the context of the case as presented. It is often difficult to know whether the answer to a question is relevant before one knows what the answer is and how it fits into the defendant's theory of its case. Accordingly, I am of the view that the prothonotary proceeded on a wrong principle in refusing to require that the questions be answered. The train of inquiry is one that the defendant is entitled to pursue at this stage. In the light of the jurisprudence set out above, it is my view, that it is premature at the discovery stage to prevent questions being asked concerning information contained in file wrappers.

[6]                 Accordingly, relying on these precedents I must conclude that in the case at bar the prothonotary based the exercise of her discretion upon a wrong principle when she refused to require a reply to each of these questions.

                               * * * * * * * * * * * * * * * * *

[7]                 On questions 653, 654 and 655, however, I was not satisfied that the prothonotary's decision was subject to any manifest error, especially as she did not deal with questions vital to the final issue of the case. The fact that the disputed decision was not accompanied by reasons does not mean that the appeal should proceed de novo (see Hayden Manufacturing Co. v. Canplas Industries Ltd. (1998), 86 C.P.R. (3d) 17 (F.C.T.D.), at 19-20).

[8]                 Here, the questions concerned dealt with and/or were connected to the opinion of an individual who was not a party to the case, on the validity of the plaintiff's patent, a question of law which must be decided by the Court, not the inventor (Westinghouse Electric Corp. et al. v. Babcock & Wilcox Industries Ltd. (Trading under Name and Style Bailey Controls et al.) (1987), 15 C.P.R. (3d) 447 (F.C.T.D.), at 451; and Nekoosa Packaging Corp. v. AMCA International Ltd. (1994), 56 C.P.R. (3d) 470 (F.C.A.), at 480). Accordingly, it would be improper for me to substitute my discretion for that of the prothonotary in deciding these three questions.

                               * * * * * * * * * * * * * * * * *

[9]                 For all these reasons, the appeal is allowed in part and the prothonotary's order is varied by replacing paragraphs 1, 2 and 3 by the following:

1.         the motion is allowed on the following points: it is otherwise dismissed.

2.         the inventor Laurent Denis shall promptly appear again to answer questions 568, 570, 571(a) and (c) above and shall further provide the information and documents requested in question 571(b) above.

3.         as the outcome is divided, costs will follow the case.

                                                                                            "Yvon Pinard"                   

                                                                                                           Judge                        

Montréal, Quebec

July 9, 2002

Certified true translation

Suzanne M. Gauthier, C. Tr., LL.L.

                          FEDERAL COURT OF CANADA

                                       TRIAL DIVISION

                                SOLICITORS OF RECORD

FILE:                                                                               T-1868-98

STYLE OF CAUSE:                                                     DENHARCO INC.

and

FORESPRO INC. and

QUADCO EQUIPMENT INC.

PLACE OF HEARING:                                                Montréal, Quebec

DATE OF HEARING:                                                  July 8, 2002

REASONS FOR JUDGMENT BY:                           Pinard J.

DATE OF REASONS:                                                  July 9, 2002

APPEARANCES:

David W. Aitken                                                               FOR THE PLAINTIFF

(CROSS-DEFENDANT)

François Guay                                                                  FOR THE DEFENDANTS

(CROSS-PLAINTIFFS)

SOLICITORS OF RECORD:

Osler, Hoskin & Harcourt                                                 FOR THE PLAINTIFF

Ottawa, Ontario                                                                (CROSS-DEFENDANT)

Smart & Biggar                                                                 FOR THE DEFENDANTS

Montréal, Quebec                                                             (CROSS-PLAINTIFFS)