[1] We are in substantial agreement with the findings and conclusions of the trial judge in this case indexed as Illinois Tool Works Inc. et al. v. Cobra Anchors Co., (2002), 221 F.T.R. 161.

[2] The trial judge concluded that the respondent's products, i.e., anchors identified by the trade-marks WallDriller and Picture Hook, did not infringe the appellants' patent. He was of the view that these products did not possess two of the features which he found to be essential elements of the invention claimed by the appellants, namely "a drilling end including means for allowing passage of an elongated fastener through and beyond said drilling end" and "for causing said drilling end to deflect upon advancement of said fastener through said body". There was cogent evidence to support such finding.

[3] As for the appellants' contention forcefully put to us that it is possible to obtain with the respondent's WallDriller (the Picture Hook anchor is not operating with a fastener) the same result as with their patented device, we agree with the trial judge that that result can only be achieved by way of an abuse and alteration of the respondent's product.

[4] We are of the view that the respondent's cross-appeal attacking the validity of the patent in issue cannot succeed.

[5] The trial judge made no reviewable error in holding that the prior art references cited at trial did not render the invention obvious or demonstrate that it lacked inventiveness.

[6] As to the allegation that the patent is invalid on the ground that it overclaims, it was properly rejected by the trial judge. Specifically, the evidence at trial allowed him to conclude that a person skilled in the art would have read the separation between drilling and tapping as being a non-essential element of the invention.

[7] However, we believe that the respondent's cross-appeal relating to the allocation of costs in the Trial Division should be allowed. We are satisfied that the trial judge did not properly exercise his discretion in assessing costs.

[8] It will be recalled that the trial judge denied costs to the respondent on the basis that success in the proceedings was divided. He expressed himself in the following terms in paragraph 130 of his decision:

The claim of infringement will be dismissed; the counterclaim alleging invalidity will also be dismissed. The plaintiff is entitled to a declaration that its patent is valid and subsisting as regards the defendant. The defendant, plaintiff by counterclaim, is entitled to a declaration that its WallDriller and Picture Hook products do not infringe the ITW patent. Since each party has achieved a part of the relief which it sought, this is effectively a case of divided success. For that reason, there will be an order that each party shall bear its own costs.

The judge's conclusion has its roots, in our view, in a misapprehension of the facts and, as a result, of the legal principles applicable in the present case.

[9] It is not contested that a trial judge has discretion to award costs or not. However, such costs ought to be allocated on a principled basis: Harris v. Canada, [2002] 2 F.C. 484, at page 560. Indeed, Rule 400 and followings enumerate the principles and factors to be considered by a judge in the exercise of his or her discretion.

[10] The facts of the present instance bring to light the following sequence of events. The respondent was sued for patent infringement by the plaintiffs/appellants. In response to the lawsuit, the respondent raised a defence which, as is often the case in these matters, had two components: first, it submitted that its products did not infringe the plaintiffs' patent and, second, that the plaintiffs' patent was in any event invalid. The respondent's defence did not have to be accepted in its entirety for the lawsuit to be dismissed. It needed to success on only one of its two components in order to achieve that result and it did: as previously mentioned, the trial judge found that the respondent's products do not infringe the plaintiffs' patent. Therefore, the plaintiffs' action was dismissed.

[11] On the facts of this case, we cannot understand how and why the dismissal of the plaintiffs' lawsuit can amount to, result in, or become a divided success. With respect, the trial judge did not properly take into consideration the end result of the proceedings before him, as required by Rule 400(3)(a). This Court came to a similar conclusion in Gorse v. Upwardor Corp (1992), 40 C.P.R. (3d) 479 (F.C.A.) where the facts and the legal issue relating to costs were analogous, if not identical, to those of the present instance. The following excerpt from that decision at pages 483-484 is herein applicable:

It is trite to say that the discretion must be exercised judicially. The learned trial judge stated the basis of his decision as to costs in the following terms.

In the result, this litigation is seen to be futile. The plaintiffs' claim and the defendant's counterclaim are both to be dismissed. It is true - probably - that the defendant would not have been provoked into asserting the counterclaim if the plaintiffs had not commenced their action in the first place. Much of the litigation was generated on account of the defendant's counterclaim, when a relatively simple defence of the plaintiffs' assertion of infringement could have been successfully established. In these circumstances a not unjust result will be obtained by not awarding any costs to any party.

It seems to me that it is a good deal easier for a judge, at the end of a proceeding after he has made up his mind as to its disposition, to decide what minimal pleadings and arguments a party might have advanced and still succeeded than for counsel, with a duty to represent that party to the best of his or her professional ability, to reach such conclusions in advance. An attack on the validity of a patent expressly found "not strong" (p. 172), can scarcely be called frivolous or unnecessary to the defence of an action claiming its infringement. There are many reasons for a judicial exercise of discretion to deny costs to a successful party but, with respect, no such reason was disclosed by the learned trial judge or is otherwise apparent here. The mere prolongation of a trial, without more, by reliance on an ultimately unsuccessful defence is no such reason.

In conclusion, the respondent was entitled to costs as the winning party and there were no valid reasons given to refuse to award them to that party in these circumstances.

[12] For these reasons, the appeal will be dismissed with costs and the respondent's cross-appeal will be allowed to the extent of vacating the trial judge's decision regarding costs. On all other aspects, the cross-appeal will be dismissed with costs. Proceeding to render the decision the trial judge should have rendered, the plaintiffs' action will be dismissed with costs.

"Gilles Létourneau"

J.A.

FEDERAL COURT OF APPEAL

NAMES OF COUNSEL AND SOLICITORS OF RECORD

DOCKET: A-522-02

(APPEAL FROM AN ORDER OF THE FEDERAL COURT DATED JULY 29, 2002, NO. T-2313-96)

STYLE OF CAUSE: ILLINOIS TOOL WORKS INC.

ITW CANADA and ITW CANADA HOLDINGS COMPANY v. COBRA FIXATIONS CIE LTÉE/

COBRA ANCHORS CO. LTD.

PLACE OF HEARING: Montreal, Quebec

DATE OF HEARING: September 29 and 30, 2003

REASONS FOR JUDGMENT

OF THE COURT: RICHARD C.J., LETOURNEAU, NOËL JJ.A.

DELIVERED FROM THE

BENCH: September 30, 2003

APPEARANCES:

Mr. Robert H.C. MacFarlane

Mr. Andrew I. McIntosh

Ms. Brigitte Chan

FOR THE APPELLANTS/

PLAINTIFFS

Mr. George Locke

Mr. Malcolm E. McLeod

Mr. Daniel Drapeau

Ms. Madeleine Lamothe-Samson

FOR THE RESPONDENT/

DEFENDANT

SOLICITORS OF RECORD:

Bereskin & Parr

Toronto, Ontario

FOR THE APPELLANTS/

PLAINTIFFS

Ogilvy, Renault

Montreal, Quebec

FOR THE RESPONDENT/

DEFENDANT

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Illinois Tool Works Inc. v. Cobra Anchors Co., 2003 FCA 358

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2003 FCA 358