Date: 20060808

Docket: A-99-04

Citation: 2006 FCA 275

 

CORAM:       SEXTON J.A.

                        SHARLOW J.A.

                        MALONE J.A.

 

BETWEEN:

JAMES W. HALFORD and VALE FARMS LTD.

Appellants

and

SEED HAWK INC., PAT BEAUJOT, NORBERT BEAUJOT, BRIAN KENT and SIMPLOT CANADA LIMITED

Respondents

 

 

 

Heard at Ottawa, Ontario, on May 29, 2006.

Judgment delivered at Ottawa, Ontario, on August 8, 2006.

 

REASONS FOR JUDGMENT BY:                                                                               THE COURT

 

 

Date: 20060808

Docket: A-99-04

Citation: 2006 FCA 275

 

CORAM:       SEXTON J.A.

                        SHARLOW J.A.                   

                        MALONE J.A.

 

BETWEEN:

JAMES W. HALFORD and VALE FARMS LTD.

Appellants

and

SEED HAWK INC., PAT BEAUJOT, NORBERT BEAUJOT, BRIAN KENT and SIMPLOT CANADA LIMITED

Respondents

 

 

REASONS FOR JUDGMENT

 

BY THE COURT

[1]               In 1993, the appellants James W. Halford and Vale Farms Ltd. (collectively, “Halford”) commenced an action against the respondents Seed Hawk Inc., Pat Beaujot, Norbert Beaujot, Brian Kent and Simplot Canada Limited (“Simplot”) for infringement of Canadian Patent No. 1,239,835 (the “Halford Patent”). The respondents denied the infringement and (except for Simplot) counterclaimed for a declaration that certain claims of the Halford Patent are invalid. The trial began on November 6, 2000 and continued intermittently in 2001, 2002, and 2003, ending on February 17, 2003. On January 23, 2004, the Judge dismissed the action and the counterclaim. His conclusions are summarized in paragraphs 354 through 357 of his reasons (2004 FC 88). Halford is appealing the judgment, and Seed Hawk Inc. and the individual respondents (collectively, the “Seed Hawk respondents”) are cross-appealing.

FACTS

[2]               The appellant James W. Halford is a university-trained farmer. He lives and carries on business in Indian Head, Saskatchewan.

[3]               Mr. Halford and a corporation he controls named Vale Farms Ltd. are the owner and licensee, respectively, of the Halford Patent, entitled “Seed/Fertilizer Placement System for Minimum Tillage Application”. The Halford Patent was issued to Mr. Halford on August 2, 1988 from an application filed on June 18, 1985.

[4]               The invention disclosed in the Halford Patent is an apparatus for placing into the soil two separate materials (e.g. fertilizer and seed) during one tilling operation (one pass) in a defined relationship to each other and within the same furrow (side banding), at different predetermined depths and in an optimum position one to the other. The apparatus is said to be particularly useful for minimum till or zero till practices (planting crops in the stubble of old crops so that the soil is minimally disturbed), but it is not functionally limited to those situations.

[5]               Vale Farms Ltd. has developed and marketed a seeding machine under the trade name “Conserva Pak” that is said to embody the invention disclosed in the Halford Patent. The first sales of the Conserva Pak occurred in 1989. Sales grew from five units in 1989 to twenty-six in 1992 and fifty-three in 1996.

[6]               In the early 1990s, the respondent Norbert Beaujot, an engineer and farmer, developed a seeding machine called the Seed Hawk. Mr. Beaujot prepared the first drawings of an experimental version of the Seed Hawk in 1991, at about the same time as he says he first became aware of the Conserva Pak device. On the advice of a retired patent examiner, Mr. Beaujot prepared a patent application for the Seed Hawk. The application was filed on May 20, 1992, and resulted in the issuance of Canadian Patent No. 2,069,081 on January 2, 1996.

[7]               On June 1, 1992, Seed Hawk Inc. was incorporated to pursue the commercial exploitation of the Seed Hawk. Its place of business is located in Langbank, Saskatchewan. The respondents Norbert Beaujot, Pat Beaujot and Brian Kent (collectively, the “individual respondents”) were the original shareholders of Seed Hawk Inc.

[8]               The respondent Simplot is in the business of selling commercial fertilizers, primarily liquid fertilizer. During the early stages of the development of the Seed Hawk, Simplot provided money to Seed Hawk Inc. in exchange for a promise that the Seed Hawk would be designed to apply liquid fertilizer. Simplot has also featured pictures of the Seed Hawk in its own advertisements in publications aimed at farmers.

[9]               The Seed Hawk was first displayed publicly in June of 1992 at Regina, Saskatchewan. In July of that year, patent agents for Halford sent a letter to Seed Hawk Inc. and its owners, putting them on notice that their prototype infringed the claims of the Halford Patent. Pat Beaujot consulted with a patent lawyer, who expressed concern that one of the claims was possibly infringed. In response to that concern, changes were made to the first prototype and a second prototype was built. Those modifications satisfied Seed Hawk Inc.’s patent lawyer, who provided a formal legal opinion that the second prototype did not infringe the claims of the Halford Patent. The first commercial Seed Hawk was delivered in April of 1993, one month following the receipt of the legal opinion. Halford commenced this action for patent infringement in October of 1993.

CONSTRUCTION OF THE PATENT

[10]           In any patent suit, the first step is to construe the patent claims (Whirlpool v. Camco, [2000] S.C.R. 1067 at paragraph 43) (“Whirlpool”). As the construction of a patent is a question of law, the decision of the Judge as to the construction of the patent must be reviewed on a standard of correctness (Whirlpool at paragraph 76).

[11]           The claims of the patent must be construed purposively, through the eyes of a worker skilled in the art (Whirlpool at paragraph 49). Evidence relating to the state of the art generally is presented through the opinions of experts. The Judge’s assessment of the expert evidence, as well as his factual conclusions as to the state of the art, are factual findings that will not be reversed on appeal absent palpable and overriding error: Housen v. Nikolaisen, [2002] 2 S.C.R. 235 (“Housen”) at paragraph 10.

(i) Errors Below

[12]           There are numerous allegations that the Judge erred in law in construing the claims. Most of those allegations are unfounded. The Judge made some minor errors (discussed below) in his statement of the relevant legal principles, but those errors did not lead to an incorrect result. After undertaking a purposive construction of the relevant claims of the Halford Patent, using the definition of essential elements set out in Free World Trust v. Électro Santé Inc., [2000] 2 S.C.R. 1024 (“Free World”), we conclude that the Judge did not err in his construction of those claims, or in his identification of their essential elements.

[13]           In the process of construing the claims of a patent, a court will identify some elements of the invention as essential. The determination of which elements are essential depends upon the language of the claims, read purposively, and informed by evidence as to how persons skilled in the art would understand the claims (Whirlpool at paragraph 45). An element may be found to be essential on the basis of the intent of the inventor as expressed or inferred from the claims, or on the basis of evidence as to whether it would have been obvious to a skilled worker at the time the patent was published that a variant of a particular element would make a difference to the way in which the invention works (Free World at paragraphs 31 and 55).

[14]           In this case, the Judge suggested that an element is essential if it is novel and inventive (reasons at paragraph 83). That is not the test as stated in Free World. In that decision, Binnie J. defined an element as being essential if it is required for the device to work as contemplated and claimed by the inventor. It is non-essential if it may be substituted or omitted without having a material effect on either the structure or operation of the invention described in the claims (Free World at paragraph 20).

[15]           The Judge also appears at one point to confuse the relationship between essential elements and variants. He stated in paragraph 139 of his reasons that:

None of these [variants] amount to the absence of an essential element. They could more accurately be described as variants of what is described in the claim. To that extent, we are not dealing with the absence of an essential element. Consequently, simply asking if any essential element is lacking is not a useful way of determining whether infringement has occurred. It may be that one element has been substituted for another, the substituted member doing exactly what the original member did, doing it in the same way, and leading to the same result. Such a substitution would clearly amount to infringement even if on a literal reading of the claim one of the essential elements was missing.

 

According to Free World at paragraph 68, to determine whether infringement has occurred, the question is whether "the accused device takes all of the essential elements of the invention". The last sentence of paragraph 139 of the Judge’s reasons may be inaccurate in certain circumstances. While infringement may result from the hypothetical situation described in the quoted paragraph, if it was not obvious at the date of patent publication that the substituted member had no material effect upon the way the invention works, then there is no infringement. Alternatively, if the functional equivalence was obvious, but the patentee intended strict compliance with the claim, then there is also no infringement (Free World at paragraph 55).

(ii) Halford’s Submissions

[16]           Halford submits that the Judge erred by taking into account the construction and operation of the Seed Hawk device in construing the relevant claims of the Halford patent and in identifying the essential elements of those claims. The thrust of this submission is not clear. It may be an attempt to invoke the principle that a patent must not be construed with an eye on the allegedly infringing device so as to avoid a finding of infringement or invalidity: Whirlpool at paragraph 49; Dableh v. Ontario Hydro, [1996] 3 F.C. 751 (C.A.), at pages 773-4. That principle is intended to preclude a result driven analysis, and should not be taken to mean that the allegedly infringing device must be ignored at the stage of claims construction. On the contrary, some understanding of the operation of the allegedly infringing device is necessary to pinpoint the variants that are in contention. In this case, the Judge’s analysis and conclusions as to the essential elements of the relevant claims of the Halford Patent are found in paragraphs 22 through 122 of the reasons. It is clear that the Judge focussed his analysis properly on the issues of claims construction that the parties placed in contention. There is no basis for concluding that the Judge’s construction of the relevant claims is vitiated by a result-driven approach, or by any incorrect consideration of the Seed Hawk.

[17]           Halford also submits that Mr. Anderson, a mechanical engineer whose expert evidence was submitted by Seed Hawk Inc., is not a person skilled in the art, and therefore the Judge erred in relying on his evidence on questions relating to the state of the art. There is no merit in that submission. Expert evidence as to the state of the art at a particular point in time need not come from a person who has the requisite skills. It is sufficient if the witness is in a position to give evidence about what the appropriately skilled person would have known and understood at the relevant time. The fact that Mr. Anderson was not himself a person skilled in the relevant art did not make his evidence on that point inadmissible (Crila Plastic v. Ninety-Eight (1987), 18 C.P.R. (3d) 1 (FCA)). The Judge was entitled to receive Mr. Anderson’s evidence and, to the extent he considered it relevant and reliable, to rely on it.

(iii) Claims Construction in Court Below

[18]           The claims of the Halford Patent that are in issue in this appeal are claims 1, 2, 3, 6 and 12. Claims 1 and 12 are independent claims. Claims 2, 3 and 6 are dependent on Claim 1. The Judge concluded that the essential elements of Claim 1 are as follows:

[19]           In reaching those conclusions, the Judge resolved a number of debates disclosed by the expert evidence. The resolution of those debates presented a particular challenge because the Judge found all of the expert evidence to be lacking in objectivity, to a greater or lesser degree. He also noted errors in the expert evidence in chief, as revealed on cross-examination, that impaired the reliability of that evidence to some extent. Nevertheless, the Judge accepted parts of the evidence of each of the expert witnesses, as he was entitled to do. The record discloses no palpable and overriding error in the factual determinations made by the Judge in relation to patent construction.

[20]           The particular issues of patent construction resolved by the Judge with respect to Claim 1 and its dependent claims may be summarized as follows:

(i)                  The claims can not be limited to zero or minimum till applications, because that would require using information from the disclosure to determine the scope of the claims.

(ii)                A person skilled in the art would understand that the reference to a “knife” is a reference to a narrow-hoe opener.

(iii)               The connection between the frame and the knife may be rigid or it may have some flexibility, but it is not necessarily a pivotal connection.

(iv)              The word “furrow” means the v-shaped opening created by the knife, and not the wider area of the soil that is disturbed by the creation of the furrow.

(v)                The phrase “second tube means” does not contemplate a tube to which is attached a knife or a narrow hoe opener. Halford submits that the Judge erred on this point. We disagree. The Judge’s construction of that phrase is justified by the language of the patent claims and is supported by the evidence upon which he relied.

(vi)              The requirement of the claims that “the second tube means” be mounted “rearwardly and separately” from the “knife means” neither requires nor excludes a functional relationship between the “knife means” and the “second tube means”.

(vii)             Although the spacing between the two tubes is critical, the claims do not say what that critical spacing is.

(viii)           The soil must be engaged by the “second tube means” itself, not by some other element attached to the “second tube means”.

[21]           Claim 2 is dependent on Claim 1 and it differs from Claim 1 in only one respect, which is the reference to a “vertical rod member” attached to the second tube means (the seed tube). That aspect of Claim 2 was the subject of considerable debate because of the argument by Halford that the phrase “vertical rod member” should be construed to be synonymous with “knife”. The Judge rejected that argument. He found, after reviewing the conflicting expert evidence, that the vertical rod member is a piece of metal affixed to the front of the second tube means for the purpose of providing abrasion resistance, not for the purpose of allowing the second tube to function as a narrow hoe opener.

[22]           Halford submits that the Judge erred in the manner in which he differentiated Claim 1 and Claim 2. Again, we disagree. What the Judge found was that the expression “tube means”, with or without the vertical rod referred to in Claim 2, is not broad enough to include a tube with a knife or narrow hoe opener attached. That conclusion is correct, given the language of the claims and the expert evidence upon which the Judge relied in relation to this point.

[23]           Claim 3 is also dependent on Claim 1. Claim 3 differs from Claim 1 in its reference to the element of placement of the open end of the second tube means (the seed tube) above and to the side of the first tube means so that it follows in the furrow but scrapes along the side wall of the furrow. Claim 1 refers to the use of a mechanism for adjusting the second tube means from side to side, in order to permit the second tube to engage the soil along the wall of the furrow.

[24]           Claim 6, which is also dependent on Claim 1, stipulates a single mounting member for the packer wheel and the second tube means, which is pivotally mounted relative to the knife means. It also identifies spring biasing as the force for maintaining the second tube means and packer wheel in contact with the ground. The main debate with respect to Claim 12 related to the exact geometry of the pivotal mounting of the common member relative to the knife means. The Judge concluded, after reviewing the conflicting evidence of the experts, that the pivotal mounting relative to the knife means does not specify whether the single mounting member would be mounted directly on the knife means, or indirectly through some other mechanism. In the result, he found that the essential elements of Claim 6 are as follows (reasons at paragraph 113):

 

[25]           Halford submits that the Judge erred in his conclusion on the meaning of the phrase “pivotal mounting relative to” the knife, on the basis that the Judge adopted a literal interpretation rather than a purposive one. The Judge’s analysis on this point is soundly based on the language of the patent and the relevant evidence. There is no evidentiary basis for concluding that the meaning of the relevant language of the patent claim is not reflected by the words used.

[26]           The Judge found that the essential elements of Claim 12 (an independent claim) are as follows (reasons at paragraph 122):

 

[27]           The arguments of Halford as to errors made by the Judge in relation to his construction of Claim 12 are substantially the same as those made in relation to Claim 6, and must be rejected for the same reasons.

(iv) Conclusion on claims construction

[28]           After taking into account the reasons of the Judge as stated above, and after undertaking a purposive construction of the relevant claims of the Halford Patent based on the definition of essential elements set out in Free World and our review of the relevant expert evidence, we conclude that the Judge did not err in his conclusions on claims construction. We received little assistance on this point from counsel for Halford, who refused to confirm the elements identified by the Judge as essential or to identify what a new list of essential elements might encompass.

[29]           We agree with the Judge as to the essential elements of Claim 1 and its dependent claims 2, 3 and 6. (1) A frame adapted for transport across the ground is essential to the use of the device because without the frame there would be nothing to which to attach the seed tube, the seed knife, the fertilizer tube or the packer wheel. (2) A knife and a component mounting the knife component on the frame are essential because they provide the means for opening a furrow as the frame moves along the ground, clearing a path for the fertilizer and seed tube. A fertilizer tube is essential as it lays the fertilizer in the furrow in advance of the seed and the packer wheel. (3) A seed tube mounted behind the fertilizer tube and capable of depositing seed into the furrow is an essential element because it permits the deposit of the fertilizer and the seed in one pass. If there were no second tube, the device would merely deposit one material in the furrow. The seed tube component must be mounted so that it engages the soil solely by its outer surface, and so that it deposits seed within the furrow behind the knife component. The engagement of the soil by the outer surface of the seed tube is made essential by the plain language of the claim. (4) A means for adjusting the lateral displacement between the seed tube and the knife is essential because it allows for the second tube and the knife to be offset, so that the seed tube does not deposit seed directly in to the bottom of the furrow where it could come into contact with the seed. (5) A wheel running behind the second tube is an essential element because it pushes and packs the soil in a manner that covers the seed and the fertilizer.

[30]           Claims 2 and 3 are dependent on Claim 1 and adopt all of its essential elements. Claim 2 adds a “vertical rod member” to the seed tube, which is not the same as having a tube with a knife or narrow hoe opener. Claim 3 states that the seed tube scrapes along the furrow wall above and to the side of the fertilizer tube, which is only a slight variation on Claim 1, which refers to the side-to-side adjustment of the seed tube in order to scrape along the wall.

[31]           Claim 6 is also dependent on Claim 1. The Judge found (and we agree) that it adds two essential elements. First, there is the second delivery system and the packer wheel on a single mounting member pivotally mounted relative to the knife. That is an essential element because differential movement is required between the seed tube and the fertilizer tube in order to accommodate variations in ground level relative to the frame. Second, there is a biasing force applied to the seed tube and the packer wheel for keeping them in contact with the ground, which is essential because without some kind of force to maintain contact with the ground, the device will not be able to accomplish its purpose of placing seeds and fertilizer in the furrow.

 

[32]           The Judge found, and we agree, that Claim 12 incorporates some essential elements from Claims 1 and 6, as well as adding the following essential elements. First, the seed tube is spaced from the fertilizer tube by a distance sufficient to allow the soil to fall into the furrow between the two tubes. This is required in order to ensure proper planting and fertilization. Second, the seed tube must be rigidly mounted in relation to the packer wheel so as to ensure that there is the proper distance between the tube and the wheel, allowing the seed to be properly laid before the packer wheel passes over. Third, the knife must be wide enough relative to the packer wheel in order to cut a furrow that is narrow enough for the wheel to ride in. This is necessary for the soil packing function and to aid the steering effect of the packer wheel as a result of running in the furrow below ground level.

 

[33]           A purposive construction of the relevant claims of the Halford Patent identifies each of these elements as being required for the device to work as contemplated and claimed by the inventor. We did not identify any additional elements that should have been found to be essential. We conclude that Judge’s conclusions as to the essential elements of the claims are correct.

[34]           The remaining issues in the appeal and cross-appeal relate either to the question of infringement, or the question of the validity of the patent. The Judge found the claims to be valid but not infringed. If the cross-appeal of the Seed Hawk respondents on the question of validity is successful, the question of infringement becomes irrelevant. It is convenient in this case to consider the questions of validity first.

 

VALIDITY OF THE CLAIMS OF THE HALFORD PATENT – PRELIMINARY MOTION

[35]           There is one preliminary matter to be dealt with on the validity issue. In November 2004, the Seed Hawk respondents filed in this Court a notice of motion for leave pursuant to Rule 75 (Federal Courts Rules, SOR/98-106) to amend the Statement of Defence and Counterclaim to plead certain particulars of invalidity of the claims of the Halford Patent, and to amend their Notice of Cross-Appeal accordingly. The motion was dismissed (2005 FCA 12) on the basis that this Court has no jurisdiction, under Rule 75, to amend pleadings filed in the Federal Court. Counsel for the Seed Hawk respondents believed he was entitled to seek substantially the same relief in a new motion because of a perceived gap left open by the reasons for dismissing its previous motion. That is based on a misinterpretation of those reasons. In any event, on May 12, 2006, the Seed Hawk respondents filed another notice of motion in this Court seeking substantially the same relief. The motion was heard at the opening of the hearing of Seed Hawk respondents’ cross-appeal.

[36]           Even if there were no jurisdictional bar, this motion could not succeed. Seed Hawk Inc. did not seek an amendment to the pleadings at any time before the trial judgment was issued. The explanation for that omission is that counsel for Seed Hawk Inc. believed, from certain comments made by the Judge, that he would consider the unpleaded invalidity arguments, even if Seed Hawk Inc. made no request to amend the pleadings. This was a misinterpretation of the Judge’s remarks. Seed Hawk Inc. could and should have moved for an amendment within a reasonable time after becoming aware that the evidence disclosed a new legal issue.

[37]           The failure of Seed Hawk Inc. to take that step means that the entire case was decided on the basis of the pleadings without the requested amendments. Halford is entitled to the benefit of those narrower pleadings. Seed Hawk Inc. says that because the evidence upon which it wishes to rely in making the new arguments came from Halford’s own witnesses, Halford would not be prejudiced by permitting an amendment to the pleadings at this stage. That is speculative. It is impossible to know at this stage how the evidence might have changed if the pleadings had been amended before the conclusion of the proceedings at trial.

 

 

VALIDITY OF THE CLAIMS OF THE HALFORD PATENT – OBVIOUSNESS

[38]           The Judge was compelled to deal with a large number of arguments in relation to validity. Each of those arguments is raised on this appeal. Practically every point considered by the Judge is challenged by either Halford or the Seed Hawk respondents.

 

[39]           For the purposes of this appeal, it is necessary to consider only the matter of obviousness. In doing so, we begin with the relevant standard of review. A finding of obviousness is a question of mixed fact and law. The relevant legal principles must be determined and applied correctly (paragraph 8 of Housen, cited above). The factual component of a finding of obviousness, which generally consists of conclusions as to the state of the art at the relevant time, will not be reversed in the absence of palpable and overriding error (paragraph 10 of Housen, cited above).

 

[40]           The undisputed test for obviousness is whether at the date of invention, an unimaginative skilled technician, in light of his general knowledge and the literature and information on the subject available to him on that date, would have been led directly and without difficulty to the invention (Procter & Gamble Co. v. Beecham Canada Ltd. (1982), 61 C.P.R. (2d) 1 (F.C.A.)).

[41]           In the decision below, the Judge set out this test and, relying primarily on the evidence of Mr. Anderson relating to four prior patents, concluded that all of the elements of the relevant claims of the Halford Patent were known at the relevant time except for the placement of seed to the side of the fertilizer by means of a tube capable of side to side adjustment (paragraph 304 of his reasons). He concluded that it would take an inventive step to conceive of a seed tube that is adjustable from side to side as a means of side banding. Consequently, he found that the four prior patents, considered in isolation, did not justify a conclusion that the Halford Patent was invalid for obviousness.

[42]           He reached that conclusion without specifically considering the Victoria device, a Swedish machine that was publicized in Canada prior to the relevant date. The Victoria device bears some similarity to the Halford invention in that it has tubes for delivering fertilizer and seed in a single pass, but the Victoria device has a knife (or a narrow hoe opener) attached to each tube. The Victoria device could be used to plant fertilizer and seeds in a single pass, but in furrows that are parallel to each other. However, because the seed knife/tube assembly could be adjusted laterally relative to the fertilizer knife/tube assembly, the Victoria device could also be used to deposit fertilizer and seed within a single furrow.

[43]           Accordingly, if the Judge had considered the teachings of the Victoria device, along with those of the other four prior patents when doing his obviousness analysis, he would have observed that the Victoria device contains the element not taught by the four prior patents—a mechanism for adjusting the seed tube laterally. In other words, the Judge would have concluded that the Halford invention was obvious from the prior art.

[44]           On appeal, then, the question is whether, taking into account a correct understanding of all the prior art, all of the elements of the Halford Patent were obvious from it. Halford raises a number of issues relating to the reliability of the expert evidence on the question of obviousness, and the weight to be given to that evidence. We find no merit in any of Halford’s criticisms of that evidence. In addition, for the sake of clarity, we should emphasize that Halford does not seriously dispute that the Victoria device was capable of side to side adjustment, but simply argues that the degree of adjustment was greater in the Victoria device than was contemplated by the Halford Patent.

[45]           Our review of the record, in light of the submissions of the parties, compels the conclusion that the Halford Patent is invalid on the basis of obviousness. Given the Seed Hawk respondents' exhibits, which compare the Seed Hawk to the Victoria device, we could easily say the same of their machine. In any event, considering the obviousness of the Halford Patent, the Judge was correct to dismiss Halford’s claims against the Seed Hawk respondents and Simplot.

INFRINGEMENT

[46]           Although it is not strictly necessary to consider the arguments relating to infringement, we will make the following observations based on the assumption that the patent is valid.

[47]           Once the claims have been properly construed, the task of determining whether a claim has been infringed is “essentially one of fact” (Consolboard Inc. v. MacMillan Bloedel (Saskatchewan) Ltd. (1981), [1984] 1 S.C.R. 504). The Judge’s findings should stand, absent palpable and overriding error (paragraph 10 of Housen, cited above).

[48]           Since the Judge did not err in his conclusions in claims construction, the only issue for us to consider is whether he made a palpable and overriding error in his findings of fact, particularly with respect to variants between the Seed Hawk and the relevant claims of the Halford Patent. After considering the variants identified by the Judge, we find that the Judge made no palpable and overriding error in pinpointing two variants as differences between the Seed Hawk and the relevant claims of the Halford Patent. One variant is the use of a seed knife on the Seed Hawk to engage the soil, instead of the seed tube engaging the soil solely by means of its outer surface, as required by the relevant claims of the Halford Patent. The other variant is the pivotal mounting of the fertilizer knife on the placement arm on the Seed Hawk, instead of on the frame as required by the relevant claims of the Halford Patent.

[49]           It is clear on inspection of the Seed Hawk that there is a knife attached to the seed tube and that the fertilizer knife is pivotally attached to the placement arm on the machine. These variants relate to essential elements of the relevant claims of the Halford Patent and take the Seed Hawk outside of those claims. The knife attached to the seed tube is something other than “solely the outer edge” of the seed tube engaging the soil, taking the Seed Hawk outside of claims 1, 2, 3, 6, and 10. The pivotal attachment of the fertilizer knife to the placement arm rather than the frame takes the Seed Hawk outside of claims 2, 3, 6, 10 and 12.

[50]           In order for a device to infringe it must take all of the essential elements of an invention. As concluded above, at least one essential element in each of the contentious claims of the Halford Patent are not the same as the Seed Hawk. Accordingly, we agree with the Judge’s conclusion that the Seed Hawk did not infringe the relevant claims of the Halford Patent.

 

LIABILITY OF SIMPLOT AND THE INDIVIDIUAL RESPONDENTS

[51]           The Judge dismissed the action against Simplot, and against the individual defendants who, at the relevant time, were principals of Seed Hawk Inc. He said that he would have done so even if he had found infringement by the Seed Hawk. We agree with the Judge on these points.

[52]           Simplot is a supplier of fertilizer. Simplot provided assistance to Seed Hawk Inc. in the initial stages of the machine’s existence in return for a promise to design the machine to apply liquid fertilizer. The assistance included $20,000 for promotion of the machine, showing the machine in print advertisements and providing display opportunities at trade shows. Halford argues that by those acts, Simplot induced infringement by Seed Hawk Inc., or aided and abetted it. The Judge concluded that even if Seed Hawk Inc. had infringed the relevant claims of the Halford Patent, the claim against Simplot could not succeed because the evidence failed to establish that the infringement would not have occurred without Simplot’s assistance. In other words, there was no causal connection between anything Simplot did and the acts of Seed Hawk Inc. that were alleged to constitute infringement of the relevant claims of the Halford Patent. The record provides ample support for that factual conclusion.

[53]           As for the personal claims, Norbert Beaujot is an engineer who was primarily responsible for the development of the Seed Hawk machine. Pat Beaujot is experienced in the sale of farm machinery and fertilizer. He was the manager of U.S. sales for Simplot before leaving that position to work full time with Seed Hawk Inc. Brian Kent was involved with Seed Hawk Inc. at one time, but not at the time of the trial, and he gave no evidence. Norbert and Pat Beaujot incorporated Seed Hawk Inc. as a vehicle for the development and promotion of the Seed Hawk machine. While the Seed Hawk was being developed, Norbert and Pat Beaujot had knowledge of the Halford Patent and its embodiment in the Conserva Pak machine produced and marketed by Halford, and were aware of all of the relevant warnings by Halford relating to infringement, and the various legal opinions obtained by Seed Hawk Inc.

[54]           The Judge said that even if the development and sale of the Seed Hawk was an infringement of the claims of the Halford Patent, based on the principles stated in Mentmore Manufacturing Co. Ltd. v. National Merchandise Manufacturing Co. Inc. (1978), 40 C.P.R. (2d) 164 (F.C.A.), none of the individual defendants could be held liable for infringement. The Judge found that the individual defendants did no more than direct the activities of Seed Hawk Inc. in the ordinary course of their relationship to it. He found no evidence of a deliberate, wilful and knowing pursuit of a course of conduct that was likely to constitute infringement or reflected indifference to the risk of infringement. In particular he noted (reasons at paragraph 337), that it is not an act of wilfulness “to take a more aggressive view of the merits of one’s position than one’s professional advisers.” The Judge made no error of law or fact in reaching these conclusions.

[55]           Halford’s contention that the individual defendants should be personally liable is based on the notion that the Beaujot brothers deliberately sought to copy the Conserva Pak machine, which they knew was protected by the Halford Patent. It was open to the Judge to find, as he did, that Halford’s theory of the case was not substantiated by the evidence.

 

CONCLUSION

[56]           This appeal will be dismissed with costs, with the respondents Seed Hawk Inc., Pat Beaujot, Norbert Beaujot and Brian Kent being entitled jointly to one set of costs, and the respondent Simplot Canada being entitled to its costs.

[57]           The cross-appeal will be allowed with one set of costs to the respondents Seed Hawk Inc., Pat Beaujot, Norbert Beaujot and Brian Kent.

[58]           The Halford Patent will be declared invalid.

 

“J. Edgar Sexton”

 

 

 

“K. Sharlow”

 

 

 

“B. Malone”

 

                                                  FEDERAL COURT OF APPEAL

 

                            NAMES OF COUNSEL AND SOLICITORS OF RECORD

 

DOCKET:                                                A-99-04

 

APPEAL FROM THE JUDGMENT OF THE FEDERAL COURT DATED JANUARY 23, 2004, NO. T-2406-93

 

STYLE OF CAUSE:                                 James W. Halford and Vale Farms Ltd. v. Seed Hawk Inc., Pat Beaujot, Norbert Beaujot, Brian Kent and Simplot Canada Limited

                                                                             

PLACE OF HEARING:                          Ottawa, Ontario

 

DATE OF HEARING:                            May 29, 30, 31, 2006

 

REASONS FOR JUDGMENT

OF THE COURT:                                    Sexton, Sharlow, Malone, JJ.A.

 

DATED:                                                   August 8, 2006

 

APPEARANCES:

 

SOLICITORS OF RECORD:

 

 Meighen, Haddad & Co.                             FOR THE RESPONDENT

 Brandon, Manitoba                                     (Simplot Canada Limited)