Date: 20160310
Docket: T-1543-15
Citation:
2016 FC 308
Ottawa, Ontario, March 10, 2016
PRESENT: The
Honourable Mr. Justice Annis
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BETWEEN:
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EMERSON
ELECTRIC CO. and EMERSON ELECTRIC CANADA LIMITED
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Plaintiffs
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and
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CANADIAN TIRE
CORPORATION LIMITED
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Defendant
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ORDER AND REASONS
I.
Factual and Procedural Background
[1]
The Defendant, Canadian Tire Corporation Limited
[CTC], seeks an order under Rule 221 of the Federal Courts Rules striking
two sentences in each of paragraphs 28, 31, 34, 37 and 38(b) of the Plaintiffs’
Amended Statement of Claim, which it claims are open-ended, bald pleadings
unsupported by material facts:
Additionally, Canadian Tire may sell or have
sold, including in its 2008-2010 and 2011-2013 product lines, other wet/dry
vacuum models comprising said characteristics that the Plaintiffs are not
currently aware of, but that are within the knowledge of the Defendant. The
Plaintiffs claim in respect of all such infringing activities.
[2]
In the alternative, CTC requests an order under
Rule 181 of the Federal Courts Rules that the Plaintiffs provide a
further amended Statement of Claim providing particulars of the allegation in
the sentences set out above, along with other ancillary procedural relief and
costs.
[3]
The Plaintiffs, Emerson Electric Company and Emerson
Electric Canada Limited, collectively referred to as [Emerson] design and
manufacture wet/dry vacuums, which products are sold in Canada under various
brands, including its own RIDGID trademark.
[4]
Emerson has obtained a number of patents on
various inventions embedded in its wet/dry vacuum products, including:
i.
Canadian patent No. 2,273,431 [Wet/dry vacuum
with non-cylindrical canister]
ii.
Canadian patent No. 2,281,241 [Wet/dry vacuum
with reduced operating]
iii.
Canadian patent No. 2,265,349 [Vacuum cleaner muffler/deflector]
iv.
Canadian patent No. 2,452,822 [Multi-stepped
appliance accessory]
v.
Canadian patent No. 2,236,610 [Caster foot with
accessory storage]
[5]
Up until in or around 2009, CTC sold Emerson’s
wet/dry vacuum products, at which time it discontinued sales of its vacuum
cleaners from its product line and replaced these products with other vacuum
cleaners manufactured by another manufacturer. Emerson claims that these vacuum
cleaners sold by CTC infringe several of its patents described above.
[6]
In 2015, Emerson launched patent infringement
proceedings against CTC claiming infringement and encroachment of its
intellectual property rights in Canada. In its statement of claim, Emerson
specifically designated several vacuum cleaners being sold by CTS as infringing
its patents. However, it claims that not all infringing products sold by CTC since
2009 (the applicable limitation date for claims under the Patent Act) up until
2013 are still available for purchase and examination in 2015.
[7]
As Emerson claims that many infringing products
sold in previous years were no longer available for purchase, it pled what
might be described as an open-ended claim of infringement in its Statement of
Claim, and thereafter in its Amended Statement of Claim, in respect of these
unknown products.
[8]
An example of the impugned pleading in the
context of paragraphs 27 and 28 of the amended statement of claim is set out
below, with the emphasized last two sentences of paragraph 28 being those that
CTC seeks to strike:
27. Since a date
unknown to the Plaintiffs but known to the Defendant, and continuing to the
present, the Defendant Canadian Tire has imported into Canada and subsequently
sold to others in Canada wet/dry vacuum cleaning appliances with a canister and
lid assembly, comprising a non-cylindrical collection canister comprising
substantially curved ends and sides substantially flatter than said curved
ends, said canister being constructed of a material capable of being collapsed
under vacuum loads; and a lid, adapted to engage said canister around a top
perimeter thereof, supporting said canister such that said lid cooperates with
said canister to resist collapse of said assembly.
28. The wet/dry vacuum cleaning
appliances imported into Canada and subsequently sold to others in Canada by
Canadian Tire, having the characteristics described in paragraph 27, include
the “Duravac 12L Wet/Dry Vac” model (no. 199-7640-2) which was part of Canadian
Tire’s 2014-2015 product line and is still being sold in stores and online (www.canadiantire.ca),
and the “MAXIMUM Portable Wet Dry Vacuum, 19 L” model (no. 54-0251-4) which is
part of Canadian Tire’s most recent product line currently being sold in stores.
Additionally, Canadian Tire may sell or have sold including in its 2008-2010
and 2011-2013 product lines, other wet/dry vacuum models comprising said
characteristics that the Plaintiffs are not currently aware of, but that are within
the knowledge of the Defendant. The Plaintiffs claim in respect of all such
activities.
[9]
On October 19, 2015, CTC served Emerson with a
Demand for Particulars requesting the model numbers for the products referred
to in paragraphs 28, 31, 34 and 37 of the Statement of Claim. Emerson declined
to provide the information on the grounds that the information was unknown to it
and within the knowledge of CTC. The Plaintiffs thereafter, filed an Amended
Statement of Claim alleging infringement of a new patent, and again repeating
the same allegations of infringement in paragraph 38(b).
[10]
CTC claims that the offending open ended sentences
in paragraphs 28, 31, 34, 37 and 38(b) of the Plaintiffs’ Amended Statement of
Claim are vexatious and an abuse of process and ought to be struck.
II.
The Law
A.
Motion to Strike
[11]
The test applicable to a motion to strike in
Canada is well-known. It was formulated by the Supreme Court in Hunt and
has since been reiterated on a number of occasions including by the Federal
Court of Appeal:
Thus, the test in
Canada governing the application of provisions like Rule 19(24)(a) of the
British Columbia Rules of Court is the same as the one that governs an
application under R.S.C. O. 18, r. 19: assuming that the facts as stated in
the statement of claim can be proved, is it “plain and obvious” that the
plaintiff’s statement of claim discloses no reasonable cause of action? As
in England, if there is a chance that the plaintiff might succeed, then the
plaintiff should not be “driven from the judgment seat”. Neither the length and
complexity of the issues, the novelty of the cause of action, nor the potential
for the defendant to present a strong defence should prevent the plaintiff from
proceeding with his or her case. Only if the action is certain to fail because
it contains a radical defect ranking with the others listed in Rule 19(24) of
the British Columbia Rules of Court should the relevant portions of a
plaintiff’s statement of claim be struck out under Rule 19(24)(a).
[Emphasis added]
Hunt v Carey Canada Inc, [1990] 2 S.C.R. 959 at 980 (Wilson, J.) [Hunt]; R. v Imperial
Tobacco Canada Ltd, [2011] 3 S.C.R. 45 paras 17, 19-21 (McLachlin C.J.)
[12]
Rule 221 of the Federal Courts Rules,
provides that the Court may strike a portion of a pleading on the ground that
it is, amongst other things, scandalous, frivolous or vexatious or that it is
an abuse of process. Courts in various decisions, including those examined
below, have continually held that pleadings will be vexatious or an abuse of
process if they do not provide sufficient particulars to enable the defendant
to prepare a response.
III.
Analysis
[13]
In considering whether sufficient particulars
are provided to support a pleading, the parties in this matter primarily
focused on a series of decisions of the Exchequer and Federal Courts that have
dealt with this issue in relation to pleadings in patent infringement or
related claims. I think it is fair to say that the parties provided contrasting
interpretations of the conclusions to be drawn from these decisions. This
necessitates a brief review of the jurisprudence to clarify what the Court
considers to be the appropriate application of the relevant case law.
[14]
The leading decision on the sufficiency of
pleadings involving open ended claims of infringement, relied on both parties,
is that of Dow Chemical Co. v Kayson Plastics & Chemicals Ltd, 1966
CarswellNAT 48 (Exch. Ct.) [Dow Chemical]. At paragraph 21 of the
decision, Justice Jackett, in considering whether the pleading of infringement before
him was a nullity, stated that the plaintiff must allege sufficient facts that
the court can be satisfied, assuming their truth, that demonstrate “an arguable
cause of action.” I cite the relevant portion of his remarks in this regard from
paragraph 12 of his decision:
… A bare
assertion that the defendant has infringed the plaintiff’s rights is not an
allegation of facts constituting a cause of action and a statement of claim
in which that is the only assertion of infringement could be struck out as
being an abuse of the process of the Court. … The facts must be alleged in
such a way that the Court can be satisfied that, assuming the truth of what is
alleged, the plaintiff has an arguable cause of action. It would be no
answer to an application to strike out in such a case for the plaintiff to say
that, if he is allowed to have unrestricted discovery of the defendant, he may
then be in a position to plead a cause of action. …
[Emphasis added]
[15]
Whether allegations are supported by material
facts, of course, depends upon the nature and extent of pleadings in the matter
under review. In Dow Chemical, the pertinent pleading of the open ended
claim in question was as follows:
1. The
Defendant has since the date of issue of Canadian Letters Patent No. 525,041
infringed the said letters patent by manufacturing or producing in Canada rubber
reinforced styrene polymers by a method or methods which infringes the said
Canadian letters patent and by selling in Canada products manufactured or
produced in accordance with such method or methods.
…
3. The precise number and dates of
all the defendant’s infringements are at present unknown to the plaintiff and
the plaintiff will claim to recover full compensation in respect of all
infringements. The plaintiffs specifically alleges, however, that the
defendant’s high impact polystyrene marketed by it since at least as early as
1963 under the defendant’s designation “KHI”, “Kayson Impact Polystyrene” are
infringements for the reasons set out in paragraph 1 hereof.
[Emphasis added]
[16]
The Defendant sought particulars identifying the
“rubber reinforced styrene polymers” referred to in paragraph 1. In ordering
particulars, I reason that Justice Jackett concluded that a pleading of
infringement identifying polymers manufactured “by a method or methods” offers
no material facts as to how the infringement actually occurred, without some
particularization by either identifying them or describing the methods of
manufacture.
[17]
Moreover, in relation to the specific infringing
product that was identified in paragraph 3 described as “Kayson Impact
Polystyrene,” the pleading offers no additional information describing the
nature or character of the infringement. The infringements are merely described
“for the reasons set out in paragraph 1 hereof.” This reference links back to
the generic description of “a method or methods” described above.
[18]
It is against this background that Justice
Jackett proceeded to consider the plaintiff’s alternative submission on which
the parties in this matter expended considerable submissions, but which I do
not find are pertinent to this case. In order to save the “bald” or open-ended
pleading of “rubber reinforced styrene polymers”, the plaintiff advanced an argument
seeking to enlarge the extent of infringement claimed beyond the single Kayson
Impact Polystyrene product that was properly identified. Counsel’s submission
is described in the reasons of Dow Chemical at paragraph 8 as follows:
Counsel for the
plaintiff takes the position, in effect, that the plaintiff, if it has
information of one type of infringement of its patent, is entitled to
launch proceedings for infringements of that type and for anything else that
the defendant may have done that constitutes infringement of the same patent,
so that he will be in a position, in the course of obtaining discovery from the
defendant, to explore the possibility of there having in fact been types of
infringement of which he did not know when he launched his action.
[Emphasis added]
[19]
I understand “one type of infringement” in the
above remarks to specify the manufacturing of the named Kayson Impact
Polystyrene product. However, there is no link between that product and the
“rubber reinforced styrene polymers” for which the defendant seeks particulars.
These are only described as being infringed by unparticularized “methods” which
I agree is no description at all. In the circumstances of the Dow Chemical
pleading, therefore, the failure to provide particulars of the rubber
reinforced styrene polymers was a failure to provide material facts describing
an arguable cause of action, such that the offending portion of the pleading
was found to be a nullity. The “one type of infringement” argument rejected by
Justice Jackett can be restated as a principle that specifying one instance of
infringement does not open up a fishing expedition “for
anything else that the defendant may have done that constitutes infringement of
the same patent”.
[20]
This not the Plaintiff’s position in this
matter. Rather it argues that Dow Chemicals is distinguishable and actually
supportive of its case on its facts because its pleading provides material
facts describing the characteristics of expressly identified infringing vacuum
cleaners which acts as a specific link to the characteristics of the unknown
vacuum cleaners that CTC may have sold during the 2009 to 2013 timeframe.
[21]
Emerson relies upon the decision of Justice
Walsh in Superseal Corp. v Glaverbel-Mecaniver et al (1975), 20 C.P.R.
(2d) 77 [Superseal]. This decision is helpful because Justice Walsh provides
a summary of the ratio of Dow Chemical, which I set out below with
my emphasis, as well as a reference in square brackets to the specific products
referred to in Dow Chemical:
This judgment is
also authority for the proposition that a plaintiff cannot give particulars
respecting one particular breach [Kayson Impact Polystyrene product] of which
he complains and then add allegations of a vague nature [rubber
reinforced styrene polymers] respecting other breaches which he suspects but of
which he is not definitely aware.
[Emphasis added]
[22]
Justice Walsh distinguishes Dow Chemical
based on the facts in Superseal by finding that there was sufficient
disclosure of “an arguable case,” as follows:
The present case
is a very clear example of a situation where the defendants know far better
than plaintiff can hope to what infringements, if any, of plaintiff’s patents
or copyright they have committed and cannot claim that they will be taken by
surprise by anything in plaintiff’s pleadings. While the burden of proof is, of
course, always on a plaintiff to establish its cause of action and the damages
resulting to it from any alleged breaches by defendants of its patents or
copyright, I nevertheless find in the present case that the amended declaration
discloses sufficient information to give plaintiff an arguable case and
that information as to further infringements “of the same type” if any such
exist can readily be obtained on discovery.
[Emphasis added]
[23]
In Superseal, the defendants complained “that only one specific sale is given as an example of the
infringement of the first patent for double glazed windows and two examples of
the alleged infringement of the second patent relating to double glazed sliding
doors, together with general allegations of other infringements of which the
plaintiff cannot give details at present…”.
[24]
As I understand Superseal, Justice Walsh
concluded that sufficient material facts were provided to describe an arguable
case when the plaintiff provided specific examples of infringements of its
products that allowed for claims of similar infringements based on the same
characteristics of unknown products, which were known only to the defendant.
[25]
I find that the facts in this matter are similar,
and moreover by their greater particularization align more forcefully with the
conclusion reached in Superseal. In that matter, the particulars of the nexus
between the defined infringing product and other products claimed but unknown,
were not defined beyond their being similar to the characteristics of double
glazed windows and doors. I conclude that Justice Walsh considered this
sufficient because the characteristics of double glazing do not lend themselves
to much confusion.
[26]
In this matter, the specificity of the
characteristics defining the infringement go much farther and is quite detailed,
as is repeated from paragraph 27 of the claim above:
…vacuum cleaning
appliances with a canister and lid assembly, comprising a non-cylindrical
collection canister comprising substantially curved ends and sides
substantially flatter than said curved ends, said canister being constructed of
a material capable of being collapsed under vacuum loads; and a lid, adapted to
engage said canister around a top perimeter thereof, supporting said canister
such that said lid cooperates with said canister to resist collapse of said
assembly.
[27]
By matching previous vacuum models “comprising
said characteristics” in paragraph 28 of the claim referring to those described
above, I adopt Justice Walsh’s conclusions that the situation herein
constitutes “a very clear example of a situation where
the defendants know far better than plaintiff can hope to what infringements,
if any, of plaintiff’s patents or copyright they have committed and cannot
claim that they will be taken by surprise by anything in plaintiff’s
pleadings.”
[28]
Moreover, I do not find that the Defendant’s
task of identifying vacuum cleaners with the alleged infringing characteristics
to be at all onerous. It appears that the same manufacturer has supplied all of
the alleged offending vacuum cleaners since 2009. It can certainly identify
those vacuum cleaners that had the same components as those claimed to infringe
the Plaintiffs’ patents after 2013, or those of a sufficient degree of
similarity as to raise a reasonable argument of infringement.
[29]
We are not talking about a large number of
models of vacuum cleaners, or an exceedingly long period of time prior to 2014
when the infringements occurred, being limited by a lawfully defined period of
prescription. This is a situation where any injustice that may arise from the
disposition of the motion strongly favours the Plaintiffs’ rights at this
juncture of the action, where Emerson’s pleadings are presumed to be true.
[30]
I also reject CTC’s submissions that the matters
of Harrison v Sterling Lumber Co, 2008 FC 220 [Harrison] and Heli
Tech Services (Canada) Ltd. v Weyerhaeuser Co., 2009 FC 592 [Heli Tech]
support its position. In both cases it was clear that the courts were dealing
with “bare allegations” in pleadings which were unsustainable due to the lack
of material supporting facts.
[31]
In Harrison, Justice Simpson concluded
that the following claim was unsustainable:
The defendants have
infringed letters patent No. 704,693 by making, constructing and using
apparatus and moulds covered by claims 1 to 6, 8 and 9 of the said letters
patent.
[Emphasis added]
[32]
She commented at paragraph 12 of her reasons
that the defendants did not know “which [infringing]
apparatus(es) or method(s) were used in their manufacture” and concluded
at paragraph 22 of her decision that the pleadings were “entirely bald and the Plaintiff does not have the ability to
correct them with particulars before discovery because it lacks the necessary
knowledge.”
[33]
Justice O’Reilly came to a similar conclusion in
Heli Tech where he found that Prothonotary Lafrenière had concluded that
the allegations with respect to the claim “amounted to
‘bald assertions without any material facts’” and without any evidence
to support them. I find that there were no supporting facts whatsoever in Heli
Tech that could come close to providing a nexus to the open ended pleading.
In dismissing the appeal to set aside the Prothonotary’s order striking
offending portions of the statement of claim, Justice O’Reilly thereafter
concluded that “the pleadings clearly fail to set out
material facts supporting allegations of direct infringement and inducement.”
[34]
Accordingly, for the reasons above, I dismiss CTC’s
motion to strike portions of paragraphs that it claims are general allegations
of infringement devoid of any material facts.
[35]
The Court further rejects the Defendant’s
alternative motion for further particulars of the alleged offending portions of
the Amended Statement of Claim. Sufficient particulars of the nature of the
claimed infringements have been provided. Obviously in terms of identifying any
possible offending vacuum cleaners sold in the period from 2009 to 2013, the
Plaintiffs do not have the sufficient knowledge to identify them, whereas CTC
does.
[36]
The parties agreed that cost of the motion
should be fixed at $3000 “all in”, which the Court accepts and awards to the
Plaintiffs.
THE COURT ORDERS THAT the motion is
dismissed with costs awarded to the Plaintiffs in the “all in” amount of $3000.
"Peter Annis"
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