[1] This is an appeal from a judgment of the Trial Division dated December 19, 2001 that Canadian Patent Number 1,220,134 (the Almecon patent) is valid and was infringed by the appellants: Almecon Industries Ltd. v. Anchortek Ltd. (2001), 17 C.P.R. (4^th) 74 (F.C.T.D.) (Appeal File A-34-02).

Background

[2] Seismic exploration is carried out by drilling into the ground a pattern of deep holes, each approximately 3.5 inches in diameter, and detonating an explosive charge placed near the bottom of each hole. The results of the explosions are recorded by devices on the surface. The ground is then restored by filling the hole with earth, mud or concrete. Expert analysis of the record discloses information about the geological formations around the area of the explosions. That information is used to help locate oil and gas.

[3] A seismic bore hole plug is inserted into a bore hole some distance above the explosive charge and 18 to 24 inches below ground level. Prior to 1987, it was thought that an ideal plug would contain the explosion within the bore hole (the tamping function) and remain in place to support the fill required to close the hole (the topping function). Plugs in use before 1987 were inclined to blow out of the ground when the charge was exploded, serving neither the tamping function nor the topping function.

[4] The problem was alleviated by the Almecon invention, a seismic bore hole plug invented by Paavo Luoma and Jim Jackson. The application for the Almecon patent was filed on January 25, 1985. The Almecon patent was issued on April 7, 1987 and is due to expire on April 6, 2004. Almecon owns the Almecon patent and sells a commercial embodiment of the invention under the name "King Plug".

[5] The abstract of the disclosure in the Almecon patent describes the invention as follows:

There is provided a new and useful tamping and topping plug for use in a seismic bore hole, and comprising a body member having a forward and a rearward end and terminating at its forward end with a closed end part, a plurality of elongated members extending outwardly and rearwardly from the body member, the members so arranged as to give the plug axial stability when inserted into the bore hole. There is also provided a process utilizing the plug for enhancing information available from seismic blasting.

[6] The "body member" of this invention is a cylinder with a diameter slightly smaller than the diameter of a seismic bore hole. It is intended to be inserted into the hole with the forward end facing down, so that the forward end is exposed to the force of the explosion. The members that extend outwardly and rearwardly from the body member, also called "claws", point up when the plug is in the hole. It is thought that the force of the explosion pushes the plug upward slightly, causing the claws to become imbedded in the sides of the hole, which stops the force of the explosion and anchors the plug in the hole so that it can support the fill.

[7] Anchortek manufactured and sold a seismic bore hole plug called the "Energy Plug" from 1992 to 1996. The other appellants are suppliers of seismic equipment who bought and sold Energy Plugs during the same period. Almecon takes the position that the Energy Plug infringes the Almecon patent.

[8] The Energy Plug and the King Plug have some similarities in appearance, but also some differences. The Energy Plug has claws extending outwardly and rearwardly, which resemble the claws of the King Plug. The forward end of the Energy Plug has some openings, while the forward end of the King Plug is completely closed. Also, the forward end of the Energy Plug is shaped like a cone truncated at a point very close to its base, and the cone is recessed into the body member. The forward end of the King Plug is a cone that is truncated near its tip and is not recessed at all.

[9] Claims 1 and 5 of the Almecon patent are the only ones in issue. They read as follows:

1. A tamping and topping plug for use in a seismic bore hole, and comprising:

a body member having a forward and a rearward end and terminating at its forward end with a somewhat flattened end part;

a plurality of elongated members extending outwardly and rearwardly from at least one end of the said body member, said members so arranged as to give said plug axial stability when inserted into a bore hole.

5. The plug of claim 1 in which the configuration of the said end part is a truncated cone.

Grounds of appeal

[10] Several grounds of appeal are set out in paragraph 22 of the appellants' memorandum of fact and law. I see no merit in any of these grounds. My reasons follow (but not in the order in which they were presented by the appellants).

Paragraph 22(a) of the appellants' memorandum of fact and law: "The Trial Judge erred in concluding that Anchortek's "Energy Plug" was an infringement of claim 5 of the patent, in that the Respondent's claim of infringement in relation to that claim was dropped at the outset of the trial."

[11] Counsel for Almecon did not abandon Almecon's claim for infringement of claim 5. He simply said in his opening statement at trial that a finding that claim 1 was not infringed would establish that claim 5 was not infringed. Evidence was adduced by both parties in relation to both claims.

Paragraph 22(b)(i) of the appellants' memorandum of fact and law: "The Trial Judge erred in concluding that Anchortek's "Energy Plug" was an infringement of claim 1 of the patent (i) in failing to apply Mr. Justice Wetston's construction."

[12] Claims 1 and 5 of the Almecon patent were the subject of an infringement action in Almecon Industries Ltd. v. Nutron Manufacturing Ltd. (1996), 65 C.P.R. (3d) 417 (F.C.T.D.). In that case Justice Wetston, as he then was, found the Almecon patent to be valid and infringed by plugs sold under the name "Super Grip". An appeal of that decision was dismissed: Almecon Industries Ltd. v. Nutron Manufacturing Ltd. (1997), 72 C.P.R. (3d) 397 (F.C.A.) and leave to appeal to the Supreme Court of Canada was refused: [1997] S.C.C.A. No. 374 (QL).

[13] Neither party took issue with Justice Wetston's construction of claims 1 and 5 of the Almecon patent, summarized as follows in Almecon v. Nutron at page 425-6 and 427-28 (emphasis added):

Together, these claims [claims 1 and 5] effectively describe the invention embodied within the Almecon patent. The King Plug in evidence in this trial represents the preferred embodiment, i.e., its elongated members extend from both the forward and rearward ends of the body. ...

Claim 1

The plug described in claim 1 of the Almecon patent (the "Almecon plug") consists of a body member with outwardly and rearwardly extending elongated members. The plug has a body member to carry out the functions of tamping the blast in the bore hole, and topping the hole. The elongated members cannot themselves accomplish the plugging function; therefore, the body member, as a three-dimensional structure with distinct ends and a significant linear dimension, carries out the function of plugging the bore hole. In order to ensure a snug fit, the diameter of the body member must be close to, but somewhat less than, the inner diameter of the bore hole. The Almecon plug's forward end terminates in a "somewhat flattened end part". In my view, this means that the forward end of the plug's body member is substantially closed, and has a surface area which is perpendicular to the longitudinal axis of the body member, so as to intercept the pressure wave resulting from the detonation of the charge. If the somewhat-flattened end part were not substantially closed, the force of the blast would be incapable of moving the plug slightly upward in the bore hole so that its elongated members could embed in the walls of the hole, as required by the Almecon patent.

. . .

Claim 5

Claim 5 of the Almecon patent indicates that the somewhat-flattened end part of the plug is configured in the shape of a truncated cone. It is reasonable to conclude that this refers to a conical section with the pointed end removed. The Almecon patent makes it clear that this cone-shaped section is adjoined to, but distinct from, the cylindrical body member of the plug. Moreover, "truncated" means that the plug does not end in a pointed tip. As discussed above, the Almecon plug terminates in a flattened end portion. I have interpreted this to mean that a flat surface closes off the forward end of the body of the plug. Since the plug terminates at the forward end in both a flattened end portion and a truncated cone, I interpret claim 5 to mean that the pointed tip of the conical end section has been replaced by a flat surface which is substantially or completely closed.

[14] Justice Wetston's construction concludes with these general comments at page 428:

The Almecon patent also states that the plug's forward end section may be profiled in a number of different configurations other than a truncated cone, including hemispherical and pyramidal. Therefore, a variation in the shape of the closed end section is within the claims of the patent.

Accordingly, I conclude that the invention embodied in the claims of the Almecon patent teaches the following:

(1) the plug has a body;

(2) the body has claws which extend outwards and rearwards;

(3) the claws and the body provide axial stability;

(4) the end of the plug is somewhat flattened; and,

(5) the plug has a truncated cone consisting of a conical section with the pointed end removed and replaced by a flat surface.

[15] The "somewhat flattened end" referred to in item (4) must be read in conjunction with Justice Wetston's earlier statement that the phrase "somewhat flattened end part" in claim 1 means that "the forward end of the plug's body member is substantially closed, and has a surface area which is perpendicular to the longitudinal axis of the body member, so as to intercept the pressure wave resulting from the detonation of the charge." In other words, it is the front end of the plug that is "somewhat flattened", and the front end is also "substantially closed".

[16] The Trial Judge adopted Justice's Wetston's construction of the claims, but he also stated the following reservation about that construction (paragraph 27 of the reasons):

...I find it difficult to rationalize Mr. Justice Wetston's acknowledgement of alternative profiles for the forward end section that are hemispherical or pyramidal with the element of his construction of the claims to the effect that the forward end of the plug's body member has a surface area which is perpendicular to the longitudinal axis of the body member. This last element of his construction is consistent with a profile of the forward end section that is a truncated cone but would appear not to be consistent with a profile of the forward end section that is hemispherical or pyramidal in circumstances where the hemisphere or pyramid is not itself truncated.

[17] It is argued for Anchortek that the patent, read in its entirety, contemplates other profiles as being truncated or flattened, and that the reservation expressed by the Trial Judge indicates that, rather than simply applying Justice Wetston's admittedly correct construction, he adopted and applied an erroneous one.

[18] As I read the Trial Judge's reasons, nothing turns on the difficulty he perceived with one aspect of Justice Wetston's construction. In the final analysis, he adopted and correctly applied Justice Wetston's construction, and correctly concluded that the front end of Anchortek's "Energy Plug" was somewhat flattened and substantially closed.

Paragraph 22(b)(ii) and (v ) of the appellants' memorandum of fact and law: "The Trial Judge erred in concluding that Anchortek's "Energy Plug" was an infringement of claim 1 of the patent ... (ii) in determining the essential elements of the patented plug by reference to the Respondent's commercial embodiment rather than the language of the claim; ... and (v) in failing to properly apply the test for infringement set out by the Supreme Court of Canada in Free World Trust v. Électro Santé Inc."

[19] A number of different but interrelated arguments are subsumed under this head. I will discuss those that seem to me to be the most important.

[20] The first argument is that the Trial Judge erred by determining the essential elements of the claims of the patent on the basis of the characteristics of Almecon's King Plug rather than the language of the claims. The Trial Judge does not provide his own summary of the construction of claims 1 and 5 in the part of his reasons in which he discusses construction. No doubt that is because construction per se was not in controversy, both parties having accepted Justice Wetston's construction of those claims in Almecon v. Nutron (discussed above).

[21] However, the Trial Judge adverts to the construction of the claims in the course of his discussion of the difference between "literal infringement" and "substantive infringement". In connection with the applicable principles from Free World Trust v. Électro Santé Inc. [2000] 2 S.C.R. 1024, in particular Justice Binnie's "six propositions" at paragraph 31, the Trial Judge compared the characteristics of Almecon's King Plug and Anchortek's Anchor Plug. He said this at paragraph 70:

In light of the foregoing six (6) propositions and comparing the most relevant embodiment of the Almecon Patent before me which was in commercial use as at the 7^th of April 1987, the King Plug, and the most relevant form of the Energy Plug here in issue, I am satisfied that the "essential" elements of the invention of the Almecon Patent are a body, a "somewhat flattened" front end, a "substantially closed" front end, claws which extend outwards and rearwards from the body, axial stability provided by the body and the claws, the fact that all such features contribute to the prevention or minimization of blowouts and the retention of the energy of a blast in the drill hole below the plug itself, and that the plug acts as a "topping plug".

[22] This paragraph, considered in isolation from the remainder of the Trial Judge's reasons, could give the impression that the Trial Judge construed the claims of the patent, and determined their essential elements, only after comparing the commercial embodiment of the invention to the product that was alleged to infringe the claim. It is incorrect to construe a patent with an eye on the allegedly infringing device: Dableh v. Ontario Hydro, [1996] 3 F.C. 751; Whirlpool Corp. v. Camco Inc., [2000] 2 S.C.R. 1067 at paragraph 49(a). However, I am not persuaded that the Trial Judge made that error. In my view, his recitation of the essential elements at paragraph 70 was substantially a restatement of Justice Wetston's construction, the correctness of which was not questioned by either party.

[23] Counsel for Anchortek also argues that the Trial Judge failed to consider the essential elements of the claim from the point of view of person skilled in the art. The "person skilled in the art" is the hypothetical person for whom the language of a patent is presumed to be written. A number of patent issues must be viewed through the eyes of that hypothetical person, including the construction of the claims and their essential elements: Free World Trust, supra. However, even in considering an issue that must be viewed through the eyes of a person skilled in the art, the weight to be given to any expert opinion is for the Trial Judge alone. This Court cannot interfere in such a determination in the absence of palpable and overriding error.

[24] To put this argument in perspective, it is necessary to appreciate that Anchortek took the position at trial, and still maintains, that the forward end of the Energy Plug is not "substantially closed". In support of that argument, Anchortek characterised the Energy Plug as a "venting plug", which is said to operate on different principles than the "topping and tamping plug" disclosed in the Almecon patent.

[25] I summarize as follows Anchortek's explanation of the difference between a venting plug and a topping and tamping plug. Both kinds of plugs have claws that point upward when the plug is inserted in a seismic bore hole. The claws become imbedded into the sides of the bore hole to hold the plug in place after an explosion in the hole. The tamping function of a topping and tamping plug is achieved when its claws are imbedded into the sides of the bore hole as a result of the plug being moved upward by the force of the explosion hitting the forward end (that is, the end that points downward in the hole). The claws in a venting plug also become imbedded into the sides of the bore hole, but not because the plug is moved upward by the force of the explosion. Rather, the forward end of a venting plug has openings which are configured to permit some of the force of the explosion to move through the plug and push more or less directly against the claws to force them into the sides of the hole.

[26] The Trial Judge in this case agreed with Justice Wetston that in the case of the Almecon patent, the person skilled in the art would be an experienced seismic crew technician. There was some evidence that an experienced seismic crew technician would have concluded that the openings in the front end of the Energy Plug would have caused it to perform quite differently from the King Plug, that is, as a "venting plug" as explained above. However, the expert opinion of Clifford J. Anderson, a professional engineer (not an experienced seismic crew technician), was that the Energy Plug tends to tamp an explosion like the King Plug does, despite the fact that it has openings in its forward end. His explanation is that the openings in the forward end of the King Plug, as they would be presented to the face of the explosion, are relatively small and are placed somewhat behind the middle section of the cone, so that in fact there is no substantial "venting" as theorized by Anchortek.

[27] Although the Trial Judge said that he found the evidence presented for both parties to be inconclusive, it is apparent from paragraph 83 of his reasons that he was considerably influenced by the expert evidence of Mr. Anderson, one of Almecon's witnesses. He may even have preferred Mr. Anderson's opinion to the opinions of an experienced seismic crew technician. Paragraph 83 reads as follows:

...Once again on the totality of the evidence before me, I prefer a conclusion that the nature and size of the openings in the front end of the Energy Plug are such that, immediately following an explosive blast below the plug, the openings would be blocked and at least a substantial portion of the energy of the blast would be retained in the seismic borehole. The Energy Plug would likely be driven slightly upward by retained energy, thus tending to "set" the claws in the sides of the borehole.

[28] In my view, this conclusion is justified by the evidence. It would perhaps have been preferable if the Trial Judge, instead of simply stating that he was relying on the "totality of the evidence", had explained more specifically why he preferred the opinion of a professional engineer over the opinion of an experienced seismic crew technician. However, the lack of such a detailed explanation is not fatal to the judgment.

[29] It is also argued for Anchortek that the Trial Judge, in considering the question of infringement, erred in failing to refer to the essential requirements that the forward end of the body must terminate with a somewhat flattened end part and be substantially closed, and that he also erred in concluding that the Energy Plug is a "tamping plug".

[30] In my view, these arguments are answered by the evidence referred to above. There was evidence to support the conclusion of the Trial Judge that, despite the existence of openings in the forward end of the Energy Plug, it effectively "tamped" explosions in a seismic bore hole, and that this was sufficiently explained by the fact that the particular configuration of the forward end of the Energy Plug was, in functional terms, somewhat flattened and substantially closed.

Paragraph 22(b) (iii) and (iv) of the appellants' memorandum of fact and law: "The Trial Judge erred in concluding that Anchortek's "Energy Plug" was an infringement of claim 1 of the patent ... (iii) in considering "hypothetical" or "doctored -up" versions of the "Energy Plug" rather than Anchortek's actual product, and (iv) in comparing "doctored-up" versions of the "Energy Plug" to the Nutron product found to infringe in the Nutron action."

[31] Almecon argued at trial that the Energy Plug embodies the essential elements of claims 1 and 5 and that, contrary to the theory of Anchortek, the Energy Plug functions as a "tamping plug". Almecon also argued at trial that the Energy Plug is not distinguishable from the plug that was found in Almecon v. Nutron to have infringed the Almecon patent. To support those arguments, samples of the Energy Plug and the infringing Nutron plug were taken apart and reconstructed in a way that illustrated their functional similarity to the King Plug, which is the commercial embodiment of the Almecon patent. The Trial Judge made no error in admitting it or relying upon that evidence to aid him in gaining a full understanding of the various parts of the Energy Plug and the way in which it worked.

Paragraph 22(c) of the appellants' memorandum of fact and law: "The Trial Judge erred in concluding that the invention of the patent included a plug of the "Energy Plug" design, despite the inventors stating (i) they had rejected such a design at the "brainstorming" stage; and (ii) that they did not have an "Energy Plug" idea."

[32] As I understand it, the phrase "Energy Plug design" is intended to refer to a seismic bore hole plug with openings in the forward (downward pointing) end, and the phrase "Energy Plug idea" is intended to refer to the idea of a "venting plug", which theoretically functions as explained above. This argument is based on the premise that the Energy Plug is a "venting plug", with a forward end that is not "substantially closed". As indicated above, the factual conclusions of the Trial Judge are to the contrary, and there was evidence to support his conclusion. For that reason, this argument must fail.

Costs at trial

[33] The Trial Judge issued a supplementary judgment dated May 23, 2002 with directions regarding the assessment of costs. The appellants appeal that supplementary judgment (Appeal File A-398-02) on three grounds.

[34] Generally, this Court will not interfere in a direction relating to costs at trial unless the direction is based on an error of law or a misapprehension as to the facts, or it is made without regard to all relevant considerations: Reza v. Canada, [1994] 2 S.C.R. 394 at para. 20). I am not persuaded that there is any basis for interfering with the supplementary judgment in this case. I will comment briefly on each ground.

[35] The appellant's first ground is that the Trial Judge should have given a direction that the costs relating to claim 5 should have been awarded to the appellants because Almecon abandoned its claim of infringement in relation to claim 5. As explained above in paragraph 13, there was no such abandonment.

[36] The appellant's second ground is that the Trial Judge should have directed that Almecon is not entitled to any costs in respect of the expert opinion evidence of Mr. Anderson. As explained above, the evidence of Mr. Anderson was relevant and useful to the Trial Judge. There is no justification for a direction that Almecon should be deprived of costs relating to his evidence.

[37] The appellant's third ground is that the Trial Judge should have directed that Almecon is not entitled to reimbursement for witness expenses for the inventors, Mr. Luomo and Mr. Jackson, because they are two owners of Almecon. The fact that Mr. Luomo and Mr. Jackson are owners of Almecon does not justify a direction that deprives Almecon of all costs relating to witness fees payable to them. The amount of the award is a matter for the assessing officer.

Conclusion

[38] For the foregoing reasons, the appeal of the judgment of the Trial Judge dated December 19, 2001, and the appeal of his supplementary judgment on costs dated May 23, 2002, should be dismissed with costs.

"K. Sharlow"

J.A.

"I agree

B.L. Strayer"

"I agree

J. Edgar Sexton J.A."

FEDERAL COURT OF CANADA

Names of Counsel and Solicitors of Record

DOCKET: A-34-02 ; A-398-02

STYLE OF CAUSE: ANCHORTEK LTD. ET AL and

ALMECON INDUSTRIES LTD.

PLACE OF HEARING: TORONTO, ONTARIO

DATE OF HEARING: MONDAY, FEBRUARY 10, 2003

TUESDAY, FEBRUARY 11, 2003

REASONS FOR JUDGMENT

BY: SHARLOW J.

CONCURRED IN BY: STRAYER, SEXTON J.J.L.

DATED:

APPEARANCES BY:

Mr. Glen B. Tremblay For the Appellants

Mr. Steven B. Garland

Mr. Ron Dimock For the Respondent

Mr. Bruce Stratton

SOLICITORS OF RECORD:

Smart & Biggar For the Appellants

Ottawa, Ontario

Dimock Stratton Clarizio LLP For the Respondent

Toronto, Ontario

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Anchortek Ltd. v. Almecon Industries Ltd., 2003 FCA 168

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2003 FCA 168