Date: 20081107
Docket: T-1856-06
Citation: 2008
FC 1247
Ottawa, Ontario, November 7,
2008
PRESENT: The Honourable James K. Hugessen
BETWEEN:
RAYMOR INDUSTRIES INC. and INSTITUT
NATIONAL DE LA RECHERCHE SCIENTIFIQUE
Plaintiffs
and
NATIONAL RESEARCH COUNCIL OF CANADA,
BENOIT SIMARD, ORSON BOURNE,
UNIVERSITÉ DE SHERBROOKE and
GERVAIS SOUCY
Defendants
AND
BETWEEN:
NATIONAL RESEARCH COUNCIL OF CANADA
Plaintiff by counterclaim
and
INSTITUT NATIONAL DE LA RECHERCE
SCIENTIFIQUE
Defendant by counterclaim
REASONS FOR ORDER AND ORDER
[1]
The present proceeding is an action for patent
infringement of Canadian Patent No. 2,499,850 (Patent ‘850) entitled “Method
and Apparatus for Producing Single-Wall Carbon Nanotubes” and was commenced
by the plaintiffs (collectively Raymor) on October 24, 2006. The patent in suit
was filed on May 9, 2003, was published on November 20, 2003, was issued on
January 10, 2006 and claims a priority date of May 9, 2002.
[2]
The plaintiffs allege
that the defendants have infringed or threaten to infringe Patent ‘850.
Specifically, it is said that in the course of their research activities and in
commercializing their developed technology, National Research Council of Canada (NRC) in collaboration with
Université de Sherbrooke (Sherbrooke) have commercially hindered Raymor’s activities.
[3]
The defendants have
denied these allegations of infringement and allege that Patent ‘850 is invalid
on the usual litany of grounds which is commonly found in patent infringement
cases. Likewise, as is equally common in such matters, they have launched a
counterclaim seeking the expungement of the patent on those same grounds.
[4]
The case is specially
managed by a prothonotary designated for that task by the Chief Justice. It is
relatively far advanced in the pre-trial process.
[5]
I now have before me
five separate but related matters:
a.
A motion by the
plaintiffs seeking summary judgment dismissing the counterclaim of NRC (but not
those of the other plaintiffs by counterclaim);
b.
Four appeals by various
parties from decisions of the case management prothonotary as follows:
i.
dismissing plaintiffs'
request for discovery of persons other than the designated representative of
NRC;
ii.
dismissing plaintiffs'
request for a physical examination of certain apparatus allegedly used by NRC
and allegedly infringing;
iii.
ordering Sherbrooke to produce, subject to enhanced confidentiality protection, certain
documents in unredacted form;
iv.
dealing with a large
number of refusals, objections and undertakings made or given by each of the parties
during the course of examinations for discovery.
I. The motion for summary judgment brought by
plaintiffs/defendants by counterclaim
[6]
As indicated
this motion seeks the dismissal of the counterclaim of NRC only on the wholly
astonishing ground that NRC is not “interested” within the intendment of
section 60 of the Patent Act. The motion is utterly without merit and
should never have been brought. Plaintiffs properly concede that NRC can
validly be sued in infringement (they could hardly do otherwise having
themselves launched the action) and therefore may defend itself on the grounds
of alleged invalidity in accordance with section 59. They say, however, that it
cannot bring a counterclaim because it lacks the interest to do so and is not
specially so authorized by its constituting statute. I disagree. Plaintiffs
have themselves conferred the necessary “interest” upon NRC by naming it as
defendant in their infringement action and the allegedly missing statutory
authority flows from section 60.
[7]
The motion
will be dismissed. I do not find it necessary to deal with NRC's alternative
argument that the motion raises issues of fact which would in any event require
trial. I shall deal with the question of costs later.
II. The appeals from the case management prothonotary generally
[8]
All of
the orders appealed from are discretionary. It is not necessary to dwell at
length upon the standard of review applicable in such matters as this is
well-tilled ground. (See Merck & Co. v. Apotex Inc. (2004), 30 C.P.R. (4th) 40 at 53 (F.C.A.); Canada v. Aqua-Gem
Investments Ltd., [1993] 2 F.C. 425 at 462-463 (F.C.A.)) Since none
of the questions raised is of a nature to affect the final outcome of the case
it is necessary for any attacking party to show that the prothonotary was
clearly wrong due to having made either an error of law or having misunderstood
the facts.
III. Plaintiffs' appeals of the Orders
refusing discovery of non parties and physical examination of apparatus
[9]
These
two matters may conveniently be dealt with together. The prothonotary
rightly considered that they must be governed by the terms of Rules 238 and 249
of the Federal Courts Rules respectively. He correctly found that
plaintiffs had not fulfilled the conditions laid down in those rules and in the
consistent case law of this Court to the effect that they are exceptions to the
general rules regarding discovery and should be strictly construed. On appeal
before me, plaintiffs have shifted their ground. They now say that the
prothonotary should have dealt with their request to examine other persons as a
request for the appointment of different corporate representatives pursuant to
Rule 237(3). They also say that both requests should have been granted through
the application of Rule 4 (the “gap” rule) and by reference to the relevant
provisions of the Quebec Code of Civil Procedure.
[10]
Quite
apart from the impropriety and unacceptability of plaintiffs now arguing
grounds on appeal which were not urged in first instance before the
prothonotary, the motions are as ill-conceived on the new basis as they were on
the old. There is no evidence and no rational argument that defendants' named
representative on discovery was in any way inadequate, such evidence being a
prerequisite to any successful application under Rule 237(3). Additionally, the
“gap” rule can only find application when our own rules are silent on the
matter, which is clearly not the case here.
IV. Sherbrooke's appeal of the Order requiring it
to produce unredacted copies of certain documents
[11]
The alleged error of law upon which Sherbrooke relies is the
prothonotary's reading of the “temporary” amended Confidentiality Order made by
Justice Gauthier herein April 18, 2008. That Order was made in the context of
an appeal of an earlier Order of the case management prothonotary in which the
latter refused to amend the existing Confidentiality Order to add a further
category of “counsel's eyes only” documents. Justice Gauthier accepted such
request but only on a temporary basis. Clearly, Justice Gauthier was fully
cognizant of the fact that the underlying issue was Sherbrooke's contention
that certain documents were both confidential and irrelevant and its refusal to
reveal the allegedly confidential portions so as to allow plaintiffs to make
submissions, and the Court to appreciate, whether or not they were material to
any unadmitted issue of fact. In relevant part, that Order reads:
AND UPON considering that it is
in the best interest of justice that plaintiff’s counsel be given an
opportunity to assess the actual content of the documents or information listed
in schedule “A” this order before a final decision is made in respect of this
motion;
[…]
1. “The Defendants
Université de Sherbrooke and Gervais Soucy (collectively “Sherbrooke et al.”)
shall deliver the documents identified in Schedule “A” hereof, which were
originally identified as answers to undertakings or requests of undertakings in
Exhibit “B” to the draft amended Confidentiality Order (attached as Appendix
“A” to the Notice of Motion dated January 24, 2008 of Sherbrooke et al.), to
Laurent Debrun of Kaufman Laramée LLP, counsel for Plaintiffs, by no later than
May 2, 2008.”
[12]
My own reading of Justice Gauthier's Order is consonant with that
of the case management prothonotary. Sherbrooke has failed to establish that
there was any error of law. When Sherbrooke has complied with the Order and the
documents in unredacted form can be seen both by plaintiff's counsel and the
Court, the latter will be in a position to decide whether the claim that they are
irrelevant can be decided on its merits, if any. In the meantime
confidentiality will have been preserved and the impasse resolved.
V. The appeals relating to other parts of the
prothonotary's Order
[13]
It is perfectly apparent from the prothonotary's Order that he
was fully conscious of the applicable rules and case law relating to discovery.
He knew that relevance was the primary criterion but equally that limits must
be set to discoveries that are too long and far-ranging, amounting to little
more than “fishing expeditions”. He was intimately familiar with the pleadings
and with the background of the whole case before him. Where he maintained
objections it was clear that he felt that the questioner had gone too far or
had ventured onto terrain that was at best marginal. In particular, I do not
read him as having judged patent agents' files to be protected by any privilege
at law but simply that he had not been persuaded that the files in question
were pertinent. There is nothing earth shaking about that and the details of
the prosecution of a patent prior to its issue are rarely relevant or
admissible on the issue of its validity. I am not persuaded that I should
interfere with the exercise of his discretion in this respect. It is likewise
with other “errors” of law pleaded by counsel: questions tending to show
commercial success or lack of it are as relevant to the case of one who impugns
a patent on the ground of obviousness as to that of the patentee who defends
it. All the other matters dealt with by the case management prothonotary were
well within his discretion to appreciate from his peculiarly privileged
position as manager of this litigation. I decline to intervene.
[14]
All the motions will be dismissed.
VI. Costs
[15]
On the appeals from the prothonotary, everyone has appealed and
no one has succeeded. While plaintiffs' appeal was more far reaching and time
consuming than the others I would not on this ground alone condemn them to any
heavier award of costs. I will make no order either way.
[16]
It is otherwise on the motion for summary judgment. Not only was
it devoid of merit, but it is impossible to see what conceivable practical
utility it could have had. Counsel admitted that he could not strike out the
allegations of invalidity in the Statement of Defence, nor the counterclaims
brought by the other defendants. The motion was quite useless and produces an
unwelcome echo of those now long gone times when lawyers would bring motions to
no useful purpose. The Court actively discourages this sort of purely the oretical
exercise whose only consequence can be to run up the cost of litigation.
Plaintiffs will forthwith and in any event of the cause pay to NRC costs hereby
fixed and assessed in the lump sum of $10, 000 inclusive of all disbursements
and taxes.
ORDER
THIS COURT ORDERS that
1.
All motions are dismissed.
2.
Plaintiffs shall pay to defendant NRC costs in an amount of
$10,000 forthwith and in any event of the cause.
3.
No other Order as to costs.
“James
K. Hugessen”
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