Date: 20080606
Docket: T-1105-06
Citation: 2008 FC 618
Ottawa, Ontario, June 6,
2008
PRESENT: The Honourable Mr. Justice Hughes
BETWEEN:
RESEARCH
IN MOTION
Plaintiff
(Defendant by Counterclaim)
and
VISTO
CORPORATION
Defendant
(Plaintiff by Counterclaim)
REASONS FOR JUDGMENT AND JUDGMENT
AS TO COSTS
[1]
On
May 21, 2008, I signed a Judgment in this action, the operative terms of which
had been consented to by the parties together with some of the preamble which I
was required to draft myself. Paragraph 5 of the operative part of that
Judgment required that the parties present written submissions as to costs, the
assumption being that I would rule as to the matter of costs related to these
proceedings to date after considering those submissions. Those submissions
have been received and this is the ruling as to costs.
[2]
The
usual rule in this Court is that a successful party is entitled to its costs
and, if nothing more is stipulated, those costs are to be taxed by a taxing
officer at the values established by the Tariff at the middle of Column III.
[3]
There
are many exceptions to the usual rule, for instance, the Court may take into
account the conduct of the parties in pursuing the litigation, the difficulty
of the case, whether success was divided in respect of certain issues,
agreements between the parties as to costs, the value of the matter at stake
and offers to settle among them.
[4]
Here
the matter was settled, save for a reference as to question of damages and
extent of infringement to be determined by the case management Prothonotary.
The Judgment as agreed to by the parties includes a declaration that several
claims of three patents owned by the Plaintiff have been infringed by the
Defendant and that the Plaintiff is entitled to damages the quantum of which is
to be determined on the reference. There can be no appeal as to the matters
that were disposed of on consent namely liability for infringement and damages
at some level. Thus the normal rule would be that the Plaintiff is entitled to
its costs to be taxed at the middle of Column III. The question becomes what
other factors must be taken into consideration in arriving at a proper
determination of costs in this particular case.
PARTICULAR
CONSIDERATIONS
1. Complexity
[5]
This
was an action involving three patents; initially both infringement and validity
were at issue. In the last few weeks before the judgment was signed only
infringement remained at issue.
[6]
The
complexity of the bulk of the period of the litigation suggests the highest end
of Column IV to be an appropriate level.
2. What was at stake?
[7]
Initially,
the Plaintiff asked for an injunction, damages and profits and other relief.
The Defendant sought to invalidate the three patents. At the end of the day,
the Plaintiff sought only damages, the Defendant abandoned its claim of
invalidity. The material submitted to this Court suggests that damages to date
may well prove to be excessively small.
[8]
This
all points to Column III at best for the initial phase of the litigation and
the lower end of Column I for the last few months.
3. Final Result
[9]
In
the final result the Plaintiff remains with the validity of its three patents
intact and recovers from the Defendant what would appear to be a very modest
amount in damages.
[10]
The
Defendant may pay damages, but it appears that they are only modest. The
Defendant is not subject to an injunction or any other equitable relief.
[11]
All
of this points to a level of costs to the Plaintiff not exceeding the middle or
lower end of Column III.
4. Conduct of the Litigation
[12]
The
material that has been submitted to me during the pre-trial process indicates
that litigation has been ongoing between these parties at least in Canada, Great
Britain and the United States. The recent decision of Sir Christopher
Floyd, a British judge for whom I have high regard, in Research in Motion UK
Limited v. Visto Corporation, [2008] EWHC 819 (Pat) indicates that in a
recent patent case between these or related parties the RIM party spent to some
6 million pounds and the Visto party spent some 1.6 million pounds on a case
that lasted about 5 trial days. RIM is said to have said that the matter was “of
commercial insignificance”.
[13]
I
do not remark on the British proceedings to influence the outcome of my
decision here except to say that the conduct of the parties here, particularly
until a few months before the trial was to be heard, reflects an all out war
and damn the expense attitude on behalf of both parties. The Plaintiff alleged
infringement of virtually every claim of three patents but was reluctant to
give meaningful particulars until well into the discovery process. The
Defendant raised numerous invalidity issues including scores of prior art
references and only winnowed all this down to a more focused effort a few
months before trial.
[14]
The
Court was required to provide rigorous and extensive resources to case manage
and mediate this case. The parties reserved 90 days for trial and waited until
only a few weeks before reducing that number to 15, having moved the trial date
and ultimately giving up the trial altogether. All of this wastes the valuable
resources of the Court.
[15]
Each
party is quick to urge that much of the blame be put on the opposite party. I
cannot easily or readily discern that one party was more at fault then the
other in wasting the time and resources of this Court.
[16]
The
Court realizes that litigation is a tactical tool engaged by parties in
commercial competition and those who have the resources and willingness to
utilize such tools should not be prevented from doing so however where the
Courts resources, time spent on motions, case management, mediation are expended
in the process and a long trial date reserved then abandoned thus depriving
other of a trial date and wasting the Court’s time in preparing for a trial,
the Court will not reward a seemingly successful party. It can express its
disapproval through one of the few means at its disposal namely, costs.
[17]
I
view that this litigation has been conducted in an overzealous manner without
due regard to the waste of the Court’s resources and that the total costs plus
disbursement assessed should be reduced by one-half.
5. Conclusion as to
Level of Costs
[18]
As
a result of the foregoing and taking into account all the submission of the
parties, even if I have not specifically touched on them in those Reasons, costs
in will be awarded to the Plaintiff at the middle of Column III with all costs
and disbursements ultimately taxed to be reduced by one-half.
6. Specific Matters
as to Costs
a) Motion and other
Interlocutory Proceedings
[19]
Where
an Order has been made on a motion or other interlocutory proceeding that
addresses costs that Order should prevail. Where the Order is silent, no costs
are to be taxed. Where reasons indicate no costs such as my reasons
accompanying the Judgment on consent, there shall be no costs. Where the Order
awards costs but sets no amount or level, costs shall be taxed at the Column
III level.
b) Discoveries and
Cross-Examinations
[20]
The
party conducting discovery or cross-examination is entitled to tax for the
attendance of up to two counsel, senior and junior, if present. The defending
party may tax only one counsel.
c) In-House
Counsel, Outside Layers, Paralegals and Others
[21]
No
costs or disbursements may be taxed for in-house counsel, or any other lawyers or
paralegals or others.
d) Matters of
Agreement
[22]
I
have been made aware of at least one agreement between the parties that appears
to affect the matter of costs that of April 9, 2008. To the extent that this
agreement and any other agreement between the parties affect the matter of
costs, it shall prevail.
7. DISBURSEMENTS
a) Tariff Items
[23]
Disbursements
allowed by Tariff A are, of course, allowable where actually expended for the
purpose of this litigation.
b) Transcripts
[24]
Disbursements
in respect of transcripts generated for the purposes of this litigation are
allowed. Where both parties agreed to or requested special services, such as
expedition or copies in particular formats electronic or otherwise and this
resulted in increased disbursements, they shall be allowed, but not otherwise.
c) Electronic
Document Management
[25]
There
is no doubt that in complex modern litigation involving a large number of
documents that technology such as electronic document management is useful and
perhaps almost essential. However, without more I cannot ascertain whether the
amount submitted by the Plaintiff for such services on its draft Bill of Costs
reflects what was truly reasonable and necessary. Perhaps the parties can come
to some agreement as to an amount (I say somewhat sceptically) if not the
Plaintiff may recover such amount as the taxing officer finds to be both
reasonable and necessary.
d) Photocopying
[26]
A
maximum of 25 cents per page or the actually amount expended, whichever is less,
is allowed but only in respect of copies found by the taxing officer to be
reasonable and necessary.
e) Travel Expenses
[27]
No
travel expenses except for witnesses actually appearing on discovery or
cross-examination or up to two counsel, as previously discussed, attending
discovery or cross-examination together with such other travel as was
reasonable and necessary to prepare for the same and follow-up on the same, is
allowed.
[28]
Expenses
for such travel shall be limited to the lesser of the actual amount or that
normally permitted for judges which is no more than $275.00/day for
accommodation and $100.00/day for meals and other expenses plus taxes. Economy
class travel only for trips under 1000km shall be allowed.
f) Expert Witnesses
[29]
Fees
charged by expert witnesses shall be only those reasonable and necessary for
their litigation and shall not include any other litigation or other matters.
The hourly or daily rate as the case may be shall not exceed that of
Plaintiff’s senior counsel.
[30]
Only
those experts that the taxing officer can be persuaded were to be called at
trial as matters stand as of the first of April 2008 (being the time just
before the parties started in earnest to reduce issues) shall be allowed.
g) Other
Disbursements
[31]
No
other disbursement shall be allowed unless the taxing officer can be persuaded
that such disbursement was actually made for this litigation only and was
reasonable and necessary for the conduct of the litigation.
8. RESOLUTION OF
COSTS AND DISBURSEMENTS
[32]
It
is the intent of this resolution of costs and disbursements to keep them at the
modest level and restricted to that which directly relates to this litigation
and was reasonable and necessary.
[33]
That
being said, the sum found shall be reduced by one half, as previously discussed.
Applicable taxes may be added.
[34]
I
would suggest that those Reasons serve as a guideline to the parties such that
they can resolve the matter as to the amount between themselves. Hopefully at
this stage there will be enough goodwill between them to do that. As a suggestion,
if they are unable to resolved the matter, I could do so by a “baseball” type
resolution with each party submitting a draft Bill of Costs or similar
submission and I would simply pick one without modification and without
providing reasons. If they want to do this, it should be done before the end
of June while all matters are reasonably fresh and other matters have not
overtaken our attention.
[35]
The
costs of the reference, if any, are of course yet to be dealt with in the
reference process. No costs are awarded in respect of this part of the
Judgment.
JUDGMENT
FOR THE REASONS
PROVIDED:
1.
The
Plaintiff is entitled to recover costs at the level of the middle of Column III
together with reasonable and necessary disbursements, made for the purpose of
this litigation such costs and disbursements to be reduced by one-half, together with applicable taxes;
2.
Taxation,
if necessary, shall be conducted in accordance with those Reasons;
3.
No
costs are awarded in respect of this particular portion of Judgment;
4.
The
costs of the reference are left to be decided in the reference.
"Roger
T. Hughes"
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