Date:
20130208
Docket:
T-735-07
Citation:
2013 FC 128
[UNREVISED
ENGLISH CERTIFIED TRANSLATION]
Ottawa, Ontario,
February 8, 2013
PRESENT: The
Honourable Mr. Justice Boivin
BETWEEN:
|
|
BODUM USA, INC.
and
PI DESIGN AG.
|
|
|
Plaintiffs
Defendants by counterclaim
|
|
and
|
|
|
TRUDEAU CORPORATION
(1889) INC.
|
|
|
Defendant
Plaintiff by counterclaim
|
|
|
|
|
SUPPLEMENTARY REASONS FOR JUDGMENT AND JUDGMENT
[1]
This
judgment concerns the awarding of costs following the judgment in Bodum USA,
Inc v Trudeau Corporation (1889) Inc, 2012 FC 1128, 105 CPR (4th) 88, dated
September 26, 2012. The case involved industrial designs corresponding to
double wall glasses marketed by Bodum USA, Inc (Bodum). Bodum and PI Design AG
(together the plaintiffs) were alleging infringement by the defendant of these
industrial designs as well as unfair competition for the offence of confusion,
contrary to paragraph 7(b) of the Trade‑marks Act, RSC
1985, c T-13. The Trudeau Corporation (1889) Inc. (Trudeau or the defendant) counterclaimed,
seeking a declaration that the industrial designs in question were and had
always been invalid. This Court found that the plaintiffs’ action should be
dismissed and Trudeau’s counterclaim allowed. The Court concluded that the
Trudeau glasses were not infringing products and that the plaintiffs’
industrial designs did not satisfy the requirement of substantial
originality
and that, consequently, they were not entitled to the protection set out in the
Industrial Design Act, RSC 1985, c I-9. This Court ordered that they be
expunged from the register.
[2]
Since
the parties were unable to agree on the issue of costs, the Court’s intervention
is required. The parties provided written submissions in November and December
2012. This judgment takes into consideration the parties’ arguments and the
arguments filed in response.
[3]
First,
it should be noted that, pursuant to subsection 400(1) of the Federal
Courts Rules, SOR/98-106 (the Rules), this Court has “full
discretionary power over the amount and allocation of costs and the
determination of by whom they are to be paid. “ Rule 400(3)
sets out the factors that the Court may consider in exercising its discretion with
respect to awarding costs:
|
PART 11
COSTS
Awarding
of Costs Between Parties
…
Factors
in awarding costs
400. (3) In exercising
its discretion under subsection (1), the Court may consider
(a)
the result of the proceeding;
(b)
the amounts claimed and the amounts recovered;
(c)
the importance and complexity of the issues;
(d)
the apportionment of liability;
(e)
any written offer to settle;
(f)
any offer to contribute made under rule 421;
(g)
the amount of work;
(h)
whether the public interest in having the proceeding litigated justifies a
particular award of costs;
(i)
any conduct of a party that tended to shorten or unnecessarily lengthen the
duration of the proceeding;
(j)
the failure by a party to admit anything that should have been admitted or to
serve a request to admit;
(k)
whether any step in the proceeding was
(i) improper, vexatious or
unnecessary, or
(ii) taken through negligence,
mistake or excessive caution;
(l)
whether more than one set of costs should be allowed, where two or more
parties were represented by different solicitors or were represented by the
same solicitor but separated their defence unnecessarily;
(m)
whether two or more parties, represented by the same solicitor, initiated
separate proceedings unnecessarily;
(n)
whether a party who was successful in an action exaggerated a claim,
including a counterclaim or third party claim, to avoid the operation of
rules 292 to 299;
(n.1)
whether the expense required to have an expert witness give evidence was
justified given
(i) the nature of the
litigation, its public significance and any need to clarify the law,
(ii) the number, complexity or
technical nature of the issues in dispute, or
(iii) the amount in dispute in
the proceeding; and
(o)
any other matter that it considers relevant.
|
PARTIE 11
DÉPENS
Adjudication
des dépens entre parties
[…]
Facteurs
à prendre en compte
400. (3) Dans l’exercice
de son pouvoir discrétionnaire en application du paragraphe (1), the Court
peut tenir compte de l’un ou l’autre des facteurs suivants:
a) le résultat de
l’instance;
b) les sommes
réclamées et les sommes recouvrées;
c) l’importance et la
complexité des questions en litige;
d) le partage de la
responsabilité;
e) toute offre écrite
de règlement;
f) toute offre de
contribution faite en vertu de la règle 421;
g) la charge de
travail;
h) le fait que l’intérêt
public dans la résolution judiciaire de l’instance justifie une adjudication
particulière des dépens;
i) la conduite d’une
partie qui a eu pour effet d’abréger ou de prolonger inutilement la durée de
l’instance;
j) le défaut de la
part d’une partie de signifier une demande visée à la règle 255 ou de
reconnaître ce qui aurait dû être admis;
k) la question de
savoir si une mesure prise au cours de l’instance, selon le cas:
(i) était inappropriée,
vexatoire ou inutile,
(ii) a été entreprise de manière
négligente, par erreur ou avec trop de circonspection;
l) la question de
savoir si plus d’un mémoire de dépens devrait être accordé lorsque deux ou
plusieurs parties sont représentées par différents avocats ou lorsque, étant
représentées par le même avocat, elles ont scindé inutilement leur défense;
m) la question de
savoir si deux ou plusieurs parties représentées par le même avocat ont
engagé inutilement des instances distinctes;
n) la question de
savoir si la partie qui a eu gain de cause dans une action a exagéré le
montant de sa réclamation, notamment celle indiquée dans la demande
reconventionnelle ou la mise en cause, pour éviter l’application des règles
292 à 299;
n.1) la question de
savoir si les dépenses engagées pour la déposition d’un témoin expert étaient
justifiées compte tenu de l’un ou l’autre des facteurs suivants:
(i) la nature du litige, son
importance pour le public et la nécessité de clarifier le droit,
(ii) le nombre, la complexité
ou la nature technique des questions en litige,
(iii) la somme en litige;
o) toute autre
question qu’elle juge pertinente.
|
[4]
The
Court also notes the principle articulated in Johnson & Johnson Inc v
Boston Scientific Ltd., 2008 FC 817 at para 3, [2008] FCJ No 1022 (QL): “Costs
should be neither punitive nor extravagant. It is a fundamental principle that
an award of costs represents a compromise between compensating a successful
party and not unduly burdening an unsuccessful party . . .
”
[5]
Generally,
a successful party (the defendant Trudeau in this case) is entitled to its
costs. As stated in Rule 407, the starting point in awarding costs is
column III of the table to Tariff B.
Parties’
requests
[6]
The
defendant is seeking lump sum costs in the amount of $250,000, representing 50%
of its legal costs. In the defendant’s view, this amount is justified given the
nature of the case and the fact that the plaintiffs did not withdraw their
unfair competition cause of action in a timely manner. In the alternative, it
is claiming lump sum costs in the amount of $151,128.54, corresponding to the
costs it could claim on the basis of the top of column III of Tariff B, by applying
Rule 420, multiplied by a factor of three. In both cases, the defendant is
asking for the amount of $40,405.90 in disbursements. The defendant submitted a
pro forma memorandum of costs in support of its arguments (Written
submissions by the defendant / plaintiff by counterclaim on costs, Tab SP‑1;
G. Lagiorgia c Canada, [1987] 3 CF 28, [1987] 1 CTC 424, p 153).
[7]
The
plaintiffs submit that the amount requested by the defendant is
disproportionate and does not reflect this Court’s jurisprudence, taking into
account the length of the trial and the issues raised in the course of the dispute.
Accordingly, the plaintiffs believe that there is no reason to deviate from the
general rule suggesting that costs be awarded based on the middle of column III
of Tariff B.
Factors
Result of the
proceeding (Rule 400(3)(a))
[8]
The
defendant was successful both on the plaintiffs’ main action, which was
dismissed, and on its counterclaim regarding the invalidity of the industrial
designs, which this Court allowed.
Importance and
complexity of the issues (Rule 400(3)(c))
[9]
It
is true, as the defendant argues, that the dispute raised a number of legal
issues such as the evolution of the infringement test, the assessment of the scope
of protection given to the industrial designs referred to, the distinction
between the infringement test and the validity test as well as the importance
of prior art. Nonetheless, in the Court’s opinion, the nature of this case can
hardly be compared to some pharmaceutical patent cases in its complexity,
duration or number of witnesses.
Written offer to
settle pursuant to Rule 420 (Rule400(3)(f))
[10]
The
defendant submits that it served a written offer to settle on the plaintiffs
inviting them to abandon their action, the consideration being that the
defendant would abandon its counterclaim and each party would bear its own
costs. In the plaintiffs’ opinion, the offer was not an offer but an invitation
by the defendant to capitulate.
[11]
It
is important to note here that the Court, in a decision prior to the trial,
dealt with this issue (Bodum USA, Inc. v Trudeau Corporation (1889) Inc.,
2012 FC 240; [2012] FCJ No 268 (QL)). The Court’s decision issued on
February 21, 2012, is clear at paragraph 23 that the defendant’s offer contained
an element of compromise, was valid and satisfied the requirements of
Rule 420:
[23] I agree with the defendant that the offer made
on April 13, 2011 is clear and unequivocal, contains an element of compromise,
was presented in a timely fashion, would bring the dispute between the parties
to an end if accepted, and is not set to expire before the commencement of the
trial. . . .
[12]
In
these circumstances and on the basis of the principle of judicial comity, the
Court is strongly guided and feels bound by the previous decision in this case.
Conduct of the
parties (Rule400(3)(i))
[13]
According
to the defendant, its conduct shortened the duration of the proceeding. It
states that its efforts to ensure that the conduct of the trial proceeded
smoothly and in an organized fashion are not adequately recognized by the
Tariff and justify increased costs (citing Fraser River Pile & Dredge
Ltd v Empire Tug Boats Ltd, [1995] FCJ No 740, 96 FTR 298). It alleges that
the length of the trial was shortened as a result of its counsel’s efforts in
preparing witnesses and the evidence that was admitted jointly ahead of time.
The defendant also claims it did a greater amount of work (Rule 400(3)(g)).
[14]
In
the defendant’s view, the plaintiffs’ conduct lengthened the duration of the
proceeding because they did not withdraw their unfair competition cause of
action despite the fact that they acknowledged on the last day of trial that
this claim was without merit. According to the defendant, the plaintiffs never
suggested that they were going to drop their unfair competition cause of action
(Trial transcript, May 22, 2012, pp 11-12, Tab 3).
[15]
The
plaintiffs admit that they did not amend their pleading to abandon their unfair
competition argument but insist that the defendant should have known that the
plaintiffs would not pursue this argument because of the high burden of proof
and the evidence filed in this regard.
[16]
On
this point, the Court notes that it was not until the last day of trial that
the plaintiffs explicitly confirmed that they were abandoning their unfair
competition argument. The Court agrees with the defendant that the case would
have been further simplified and the trial shortened even more had the
plaintiffs indicated their intention a little earlier. Certain parts of the
testimony could have been avoided.
[17]
The
Court notes that the plaintiffs cooperated with the defendant during the trial,
and the Court cannot find that the plaintiffs showed any bad faith. However,
contrary to the plaintiffs’ submissions, it was not up to the defendant to surmise
or guess that the unfair competition argument would not be completed. Although
some factors could have indicated that the issue of unfair competition would
not be central to the plaintiffs’ argument, the plaintiffs can certainly not fault
the defendant, in the circumstances, for preparing its defence.
Legal fees paid
by the defendant
[18]
Finally,
according to the defendant, the jurisprudence of this Court and of the Court of
Appeal recognizes that legal fees actually paid are a factor that the Court may
consider. For the plaintiffs, the defendant made the choice of spending the
resources in question for this case. As previously mentioned, it would be
erroneous to compare this case to the decisions the plaintiff refers to. For
example, in Eli Lilly & Co v Apotex Inc, 2011 FC 1143 at para 9,
[2011] FCJ No 1425 (QL), Gauthier J., as she then was, made the following
comment: “. . . even when compared to other complex patent matters,
this case was exceptionaly difficult”. See also Consorzio Del Prosciutto Di
Parma v Maple Leaf Meats Inc, 2002 FCA 417 at para 5‑8, [2003] 2 FC
451; Air Canada v Toronto Port Authority, 2010 FC 1335 at para 14,
[2011] FCJ No 1 (QL); Abbott Laboratories v Canada (Minister of Health),
2007 FC 50 at para 25 and 26, [2007] FCJ No 71 (QL)). The Court can only
observe that the facts in this case can hardly be compared to the cases the
defendant refers to and that the legal fees it has claimed are excessive to say
the least.
[19]
This
is a case where it is appropriate to award a lump sum. After reviewing the
submissions of the parties on costs, the Court will award the defendant the
amount of $90,000 in costs including disbursements and taxes.
JUDGMENT
THE
COURT ORDERS AND ADJUDGES that the plaintiffs shall pay to the
defendant the lump sum of $90,000 including disbursements and taxes.
“Richard Boivin”
Certified
true translation
Mary
Jo Egan, LLB
Email this Content