Date: 20080417
Docket: T-1001-07
Citation: 2008 FC
488
Ottawa, Ontario,
April 17, 2008
PRESENT: The Honourable Mr. Justice O'Keefe
BETWEEN:
SUNCOR
ENERGY INC.
Plaintiff
and
MMD DESIGN AND CONSULTANCY
LIMITED
And ALAN POTTS
Defendants
REASONS FOR ORDER AND ORDER
O’KEEFE J.
[1]
This is a
motion by MMD Design and Consultancy Limited and Alan Potts (together the
defendants or MMD) pursuant to Rule 51 of the Federal Courts Rules,
S.O.R. 98-106 for the following:
1. An Order allowing this appeal
and setting aside the order of Prothonotary Morneau dated September 11, 2007;
2. An Order setting a date for
the defendants to file a statement of defence;
3. An Order directing that MMD
pay Suncor Energy Inc.’s (the plaintiff) costs of this motion and the previous motion;
4. Such further and other relief
as this honourable Court may deem just.
[2]
By his
order dated September 11, 2007, Prothonotary Morneau ruled that the Court did
not have jurisdiction over the cause of action raised by the plaintiff and
consequently, he struck out the plaintiff’s statement of claim with no right to
amend. He also awarded costs to the defendants.
Background
[3]
Prothonotary
Morneau stated the background in the following terms:
[3] The statement of claim
submitted to this Court states that in 2003, Suncor concluded an agreement
with, among others, MMD Design, for the latter to develop and build a certain
type of equipment to help Suncor develop tar sands. Over the course of the
development and eventual trials of this equipment, the employees of MMD Design
and Suncor seem to have interacted to a certain extent.
[4] This contact between the
employees of the two companies allegedly resulted in MMD Design learning
confidential information regarding another type of technology that Suncor employees
were developing concurrently, technology that would eventually make the
equipment or technology being developed by MMD Design for Suncor’s project
obsolete.
[5] On the basis of the
confidential information and trade secrets that it had elicited, MMD Design
allegedly filed a patent application covering precisely the invention being
perfected concurrently by Suncor’s employees.
[6] Angered by MMD Design’s
action, Suncor commenced two legal proceedings on June 1, 2007, namely, this
case before the Federal Court (the Federal Court proceedings) and the Alberta proceedings.
[7] In paragraph 1 of its
statement of claim to the Federal Court, Suncor seeks a declaration to the
effect that it, and not MMD Design, is the owner of the invention at issue and
asks this Court to order that the records of the Patent Office be varied
accordingly and that Suncor’s employees be identified in the records as the
true inventors.
[8] Reproduced below is the text
of paragraphs 1a. and b., which I consider sufficient for our purposes, of the
statement of claim in the Federal Court proceedings:
1. The Plaintiff claims:
a. A declaration that
the plaintiff Suncor Energy Inc. is the owner of the subject matter described
and claimed in Canadian Patent Application No. 2,558,059;
b. An order pursuant
to s. 52 of the Patent Act, R.S.C. 1985, c. P-4, as amended, directing
that the records of the Patent Office relating to Canadian Patent Application
No. 2,558,059 be varied to:
i. strike
the current listed owner and applicant, and identify the plaintiff Suncor
Energy Inc. as the sole owner and applicant; and
ii. strike
the current listed inventor and identify Brad Bjornson, Doug Cox, Paul
MacDougall and Garth Booker as inventors.
[9] It is worth noting at the
outset that in the Alberta proceedings, in addition to
various types of damages sought from the defendants, including MMD Design,
Suncor is also seeking a declaration of ownership of the invention. The
statement of claim in the Alberta proceedings contains the
following claims to that effect:
a. A declaration that
Suncor is the owner of, and that Suncor’s employees are inventors of, the
subject matter disclosed and claimed in, the following:
i. Canadian
Patent Application No. 2,558,059;
ii. the
foreign patent applications from which Canadian Patent Application No.
2,558,059 claims priority; and
iii. all
patent applications or corresponding patents, in all jurisdictions, derived
from the above priority applications and/or the PCT application filed as
Canadian Patent Application No. 2,558,059;
. . .
e. In the alternative, if this
Honourable Court does not issue a declaration that Suncor is the owner of the
subject matter described and claimed in Canadian Patent Application No.
2,558,059, an order that Suncor be declared a co-applicant of the patent
application or, in the further alternative, that the application be declared
invalid and void.
Issue
[4]
Does this
Court have jurisdiction to grant the relief requested?
Analysis and Decision
[5]
The
Federal Court of Appeal in Merck & Co. v. Apotex Inc. (2003),
30 C.P.R. (4th) 40 at paragraphs 17 to 19 stated:
17 This
Court, in Canada v. Aqua-Gem Investment Ltd. [1993]
2 F.C. 425 (F.C.A.), set out the standard of review to be applied to
discretionary orders of prothonotaries in the following terms:
[...] 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.
18 MacGuigan J.A. went on, at pp. 464-465, to explain
that whether a question was vital to the final issue of the case was to be
determined without regard to the actual answer given by the prothonotary:
[...] It seems to me that a decision
which can thus be either interlocutory or final depending on how it is decided,
even if interlocutory because of the result, must nevertheless be considered vital
to the final resolution of the case. Another way of putting the matter would be
to say that for the test as to relevance to the final issue of the case, the
issue to be decided should be looked to before the question is answered by the
prothonotary, whereas that as to whether it is interlocutory or final (which is
purely a pro forma matter) should be put after the prothonotary's decision. Any
other approach, is seems to me, would reduce the more substantial question of
"vital to the issue of the case" to the merely procedural issue of
interlocutory or final, and preserve all interlocutory rulings from attack
(except in relation to errors of law).
This is why, I suspect, he uses the words
"they (being the orders) raise questions vital to the final issue of the
case", rather than "they (being the orders) are vital to the final
issue of the case". The emphasis is put on the subject of the orders, not
on their effect. In a case such as the present one, the question to be asked is
whether the proposed amendments are vital in themselves, whether they be
allowed or not. If they are vital, the judge must exercise his or her
discretion de novo.
19 To avoid the confusion which we have seen from time
to time arising from the wording used by MacGuigan J.A., I think it is
appropriate to slightly reformulate the test for the standard of review. I will
use the occasion to reverse the sequence of the propositions as originally set
out, for the practical reason that a judge should logically determine first
whether the questions are vital to the final issue: it is only when they are
not that the judge effectively needs to engage in the process of determining
whether the orders are clearly wrong. The test would now read:
Discretionary
orders of prothonotaries ought not be disturbed on appeal to a judge unless:
a)
the questions raised in the motion are vital to the final issue of the case, or
b)
the orders 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.
[6]
I am of
the opinion that the issue raised in this appeal is vital to the final issue of
the case as the result of the order was that the statement of claim was struck
out and the claim dismissed. I must therefore exercise my discretion de novo.
[7]
In
paragraph 1a of its statement of claim, the plaintiff seeks:
a. A declaration that the
plaintiff Suncor Energy Inc. is the owner of the subject matter described and
claimed in Canadian Patent Application No. 2,558,059; . . .
[8]
The
Federal Court of Appeal in Cellcor Corp. of Canada Ltd. et. al. v. Kotacka
(1977), 27 C.P.R. (2d) 68 reviewed what is now section 52 of the Patent
Act, R.S.C. 1985, c. P-4 (the Act) and made the following statement at
paragraphs 10 and 11:
10 The respondent's contention is, in
my view, ill-founded. Assuming that the declaration sought in this action is a
remedy respecting a patent of invention, within the meaning of section 20, I am
nevertheless of opinion that, in the circumstances of this case, it is not a
relief that the Federal Court has power to grant because I agree with the
appellants' view that there is no legal basis for it. Under the Patent Act,
the official who must first decide whether a patent may issue to an applicant
is the Commissioner. The Act does not empower the Courts to give him directions
on the decision he should reach; it is only if he is alleged to have made a
wrong decision that, under the statute, the Courts may be seized of the matter.
In my view, it would be contrary to the scheme of the Patent Act for the
Courts to assume the power, in a case like the present one, to make the
declaration sought. In my opinion, the power of the Court, under Rule 1723, to
make "binding declarations of right" cannot be exercised in respect
of letters patent of invention when its exercise is not expressly or impliedly
contemplated by the Patent Act or another statute within the legislative
jurisdiction of Parliament.
11
I
know that my conclusion may be difficult to reconcile with the statement made
by Mr. Justice Rinfret (as he then was) at page 250 of his reasons for judgment
in Kellogg Company v. Kellogg, [1941] S.C.R. 242. However, I find
that statement equally difficult to reconcile with the subsequent decision of
the Supreme Court in Radio Corporation of America v. Philco
Corporation (Delaware), [1966] S.C.R. 296.
[9]
In Cellcor,
above the factual background was stated by Mr. Justice Pratte of the Federal
Court of Appeal as follows at paragraph 4:
The
allegations of the statement of claim may be easily summarized. In December
1973, the plaintiff (respondent in this appeal) made an invention which,
shortly afterwards, was disclosed confidentially to the defendant Hughes. In
spite of the fact that the invention was clearly the property of the plaintiff,
Hughes falsely represented himself as the inventor and caused an application
for letters patent to be filed in the United
States, which application
he assigned to his co-defendant Cellcor Corporation of Canada Limited. The
defendants "have prepared and filed, or in the alternative intend to
prepare and file an application or applications for patent in Canada corresponding to the United
States application
...". Hughes has also, in his personal capacity as well as on behalf of
his two co-defendants, entered into negotiations with third parties offering to
grant licences in respect of the invention. The prayer for relief reads as
follows:
THE
PLAINTIFF THEREFORE CLAIMS:
(a)
a declaration that as between the parties the Plaintiff is the inventor of the
subject matter of the inventions relating to a process and apparatus for
producing a new product useful in the formulation of paints and in other
applications and in particular is the inventor of the subject matter of United
States Patent Application No. 439,715 filed by or on behalf of the Defendant
Hughes and the person entitled to apply for and obtain letters patent therefor
in Canada; . . .
[10]
The plaintiff submitted that
the Cellcor case could be distinguished from the present case in that there
were no patent entries at issue in Cellcor, above. I do not accept this
argument. The Federal Court of Appeal clearly stated in Cellcor, above
that the proper person to decide whether the patent should issue to the
defendant was the Commissioner. In the present case, that has not yet been
done. It may be that should the Commissioner make a wrong decision under the
Act, this Court may become seized of the matter.
[11]
The
Prothonotary was correct in holding that this Court has no jurisdiction to make
a preliminary decision as to the ownership of the invention. I reach the same
conclusion.
[12]
As noted
earlier, the plaintiff also claims the following relief:
b. An order pursuant to s. 52 of
the Patent Act, R.S.C. 1985, c. P-4, as amended, directing that the records
of the Patent Office relating to Canadian Patent Application No. 2,558,059 be
varied to:
i. strike the
current listed owner and applicant, and identify the plaintiff Suncor Energy
Inc. as the sole owner and applicant; and
ii. strike the
current listed inventor and identify Brad Bjornson, Doug Cox, Paul MacDougall
and Garth Booker as inventors.
[13]
Prothonotary
Morneau held that based on the facts of this case, the requested relief could
not be granted pursuant to section 52 of the Act. In reaching this conclusion,
the Prothonotary relied on the following sections of the Act:
|
49.(1)
A patent may be granted to any person to whom an inventor, entitled under
this Act to obtain a patent, has assigned in writing or bequeathed by his
last will his right to obtain it, and, in the absence of an assignment or
bequest, the patent may be granted to the personal representatives of the
estate of the deceased inventor.
(2) Where an
applicant for a patent has, after filing the application, assigned his right
to obtain the patent, or where the applicant has either before or after
filing the application assigned in writing the whole or part of his property
or interest in the invention, the assignee may register the assignment in the
Patent Office in such manner as may be determined by the Commissioner, and no
application for a patent may be withdrawn without the consent in writing of
every such registered assignee.
(3) No
assignment shall be registered in the Patent Office unless it is accompanied
by the affidavit of a subscribing witness or established by other proof to
the satisfaction of the Commissioner that the assignment has been signed and
executed by the assignor.
50.(1)
Every patent issued for an invention is assignable in law, either as to the
whole interest or as to any part thereof, by an instrument in writing.
(2) Every
assignment of a patent, and every grant and conveyance of any exclusive right
to make and use and to grant to others the right to make and use the
invention patented, within and throughout Canada
or any part thereof, shall be registered in the Patent Office in the manner determined
by the Commissioner.
(3) No
assignment, grant or conveyance shall be registered in the Patent Office
unless it is accompanied by the affidavit of a subscribing witness or
established by other proof to the satisfaction of the Commissioner that the
assignment, grant or conveyance has been signed and executed by the assignor
and by every other party thereto.
51. Every assignment affecting a patent
for invention, whether it is one referred to in section 49 or 50, is void
against any subsequent assignee, unless the assignment is registered as
prescribed by those sections, before the registration of the instrument under
which the subsequent assignee claims.
52. The Federal Court has jurisdiction, on
the application of the Commissioner or of any person interested, to order
that any entry in the records of the Patent Office relating to the title to a
patent be varied or expunged.
|
49.(1)
Un brevet peut être concédé à toute personne à qui un inventeur, ayant aux
termes de la présente loi droit d’obtenir un brevet, a cédé par écrit ou
légué par son dernier testament son droit de l’obtenir. En l’absence d’une telle cession ou
d’un tel legs, le brevet peut être concédé aux représentants personnels de la
succession d’un inventeur décédé.
(2)
Si le demandeur d’un brevet a, après le dépôt de sa demande, cédé son droit
d’obtenir le brevet, ou s’il a, avant ou après le dépôt de celle-ci, cédé par
écrit tout ou partie de son droit de propriété sur l’invention, ou de son
intérêt dans l’invention, le cessionnaire peut faire enregistrer cette
cession au Bureau des brevets, en la forme fixée par le commissaire; aucune
demande de brevet ne peut dès lors être retirée sans le consentement écrit de
ce cessionnaire.
(3)
La cession ne peut être enregistrée au Bureau des brevets à moins d’être
accompagnée de l’affidavit d’un témoin attestant, ou à moins qu’il ne soit
établi par une autre preuve à la satisfaction du commissaire, que cette
cession a été signée et souscrite par le cédant.
50.(1)
Tout brevet délivré pour une invention est cessible en droit, soit pour la
totalité, soit pour une partie de l’intérêt, au moyen d’un acte par écrit.
(2)
Toute cession de brevet et tout acte de concession ou translatif du droit
exclusif d’exécuter et d’exploiter l’invention brevetée partout au Canada et
de concéder un tel droit à des tiers sont enregistrés au Bureau des brevets
selon ce que le commissaire établit.
(3)
L’acte de cession, de concession ou de transport ne peut être enregistré au
Bureau des brevets à moins d’être accompagné de l’affidavit d’un témoin
attestant, ou à moins qu’il ne soit établi par une autre preuve à la
satisfaction du commissaire, qu’un tel acte de cession, de concession ou de
transport a été signé et souscrit par le cédant et aussi par chacune des
autres parties à l’acte.
51.
Toute cession en vertu des articles 49 ou 50 est nulle et de nul effet à
l’égard d’un cessionnaire subséquent, à moins que l’acte de cession n’ait été
enregistré, aux termes de ces articles, avant l’enregistrement de l’acte sur
lequel ce cessionnaire subséquent fonde sa réclamation.
52.
La Cour fédérale est compétente, sur la demande du commissaire ou de toute
personne intéressée, pour ordonner que toute inscription dans les registres
du Bureau des brevets concernant le titre à un brevet soit modifiée ou
radiée.
|
[14]
The
plaintiff submitted that section 52 was broad enough to give the Court
jurisdiction to strike the current listed owner and applicant and identify the
plaintiff as sole owner and applicant, and to strike the current listed
inventor and substitute others as the inventors.
[15]
The
plaintiff relied on the decision in Love v. Claveau, [1990] FR.C.
64 (F.C.T.D) to state that section 52 of the Act gives this Court jurisdiction
to grant the relief requested in paragraph 1b of the claim. The case of Love,
above dealt with the propriety of an assignment document filed with the
Canadian Patent Office.
[16]
I have
reviewed the statement of claim and it appears that the allegations concern the
alleged misuse and misappropriation of confidential information in order to
apply for the patent. In fact, the heading in the statement of claim just
before paragraph 17 states “MMD’s MISUSE OF SUNCOR CONFIDENTIAL INFORMATION”.
[17]
In R.W.
Blacktop Ltd. et. al. v. Artec Equipment Co. et. al. (1991), 39 C.P.R.
(3d) 432 (F.C.T.D.), Mr. Justice Rouleau stated at page 439:
In the present case, this is an action
for infringement of the plaintiffs’ patent. The plaintiffs’ allegations
relating to breach of contract and breach of fiduciary duty, are not advanced
for the purpose of establishing infringement. The subject matter of the
plaintiffs’ allegations does not incidentally refer to certain contracts
between the parties. Rather, these claims are advanced for the sole purpose of
establishing that there was a breach of these contracts. These allegations are
not incidental to the cause of action such as to confer jurisdiction on this
court per Kellogg, supra.
[18]
The present
case also concerns who should become the proper owner of the patent. In Axia
Inc. v. Northstar Tool Corporation (2005), 39 C.P.R. (4th) 299
(F.C.), Mr. Justice Von Finckenstein stated at page 304:
Second, the question to be decided
involves the ownership of patents. To determine that ownership, the various
contractual documents between the parties need to be interpreted. Their
interpretation will determine the ownership. This is a matter of property and
civil rights, with the patents being merely the item the ownership of which is
in dispute. Clearly, the patent aspect is secondary to the ownership.
[19]
In my
view, the present case deals with who will become the owner of the patent which
is ultimately issued by the Commissioner and the alleged misuse and
misappropriation of confidential information. The case is not about what patent
will issue. Consequently, I am of the opinion that based on the facts of this
case, this Court does not have jurisdiction to deal with the relief requested
in paragraph 1b of the claim. The application must first be dealt with by the
Commissioner.
[20]
My
conclusion is fortified by the remarks of Mr. Justice Pratte for the Court in Cellcor,
above at page 74:
[. . .] Under the Patent Act, the
official who must first decide whether a patent may issue to an
applicant is the Commissioner. The Act does not empower the Courts to give him
directions on the decision he should reach; it is only if he is alleged to have
made a wrong decision that, under the statute, the Courts may be seized of the
matter. [. . .]
(Emphasis Added)
[21]
The
decision in Love, above deals with a debate over whether the
Commissioner should have decided to accept the assignment in question and as
such, section 52 of the Act would apply so as to give this Court jurisdiction.
[22]
As I am of
the opinion that the Court does not have jurisdiction to grant the relief claimed
in paragraph 1b of the claim; Prothonotary Morneau made no error in his
decision. The motion of the plaintiff is dismissed with costs to the
defendants.
ORDER
[23]
IT IS
ORDERED that the
plaintiff’s motion is dismissed with costs to the defendants.
“John
A. O’Keefe”
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