Docket: T-2338-14
Citation:
2016 FC 1116
[ENGLISH
TRANSLATION]
Ottawa, Ontario, October 6, 2016
PRESENT: The Honourable
Mr. Justice Roy
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BETWEEN:
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CAMSO INC.
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Plaintiff/
defendant by counterclaim
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and
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SOUCY
INTERNATIONAL INC.
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KIMPEX INC.
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Defendants/
plaintiffs
by counterclaim
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and
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BROUILLETTE +
PARTNERS LLP
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Potential respondent to the
motion to stay a re-examination
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and
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THE COMMISSIONER OF PATENTS
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THE ATTORNEY GENERAL OF CANADA
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Potential third parties in the
motion to stay a re-examination
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ORDER AND REASONS
[1]
The plaintiff, Camso Inc. (Camso), is
requesting that this Court stay a request made by the law firm of Brouillette +
Partners to re-examine a patent that Camso holds. This request for
re-examination is related to all of the claims of Canadian
patent 2,822,562 (the 562 patent), which Camso owns. Two other
patents owned by Camso are part of the context of this case.
[2]
The patents at issue here are all related to
tracks used on all-terrain vehicles. The title of the 562 patent is also telling:
“Track Assembly for an All-Terrain Vehicle.” The
request for re-examination claims that the patent suffers from lack of novelty
and obviousness in light of prior art being filed at the appropriate time. It
seems that the debate revolves around the track that, according to the request,
has this property: “the endless track is free of
stiffening members or stiffening inserts at locations at which a drive
projection registers with a traction projection” (request for
re-examination, page 2/90, paragraph 1).
I.
Background
[3]
The request for re-examination of the claims of
the 562 patent falls within the scope of a substantially broader issue.
Camso also owns patent 2,388,294 (the 294 patent). Also in the same
group of patents is patent 2,825,509 (the 509 patent), which will not
be discussed in this case. A previous request for re-examination of the
294 patent was filed on February 26, 2014. The 294 patent came
before the two others, which were issued after the re-examination process for
the 294 patent was completed.
[4]
Requests for re-examination of patents are filed
under sections 48.1 to 48.5 of the Patent Act, R.S.C. 1985 (the
Act), c. P-4. Amendments to the Act in the late 1980s created a
mechanism under which any person may apply to the Commissioner of Patents for
re-examination of the claims of a patent on record. The Act states that
prior art will consist of:
•
patents;
•
applications for patents open to public
inspection;
•
printed publications.
The request for re-examination will also
deal with the relevance of prior art by seeking to prove consistency with
claims contested upon re-examination.
[5]
Once the request for re-examination is filed,
the role of the person who filed it is complete. A re-examination board is then
formed consisting of three persons “to which the
request shall be referred for determination” (subsection 48.2(1) of
the Act). This is where the first stage of a two-stage process begins. In the
first stage, the re-examination board reviews the request and must determine “whether a substantial new question of patentability
affecting any claims of the patent concerned is raised by the request for
re-examination.” (subsection 48.2(2) of the Act). A positive
outcome will result in the patentee receiving notice that it has three months
to submit a reply to the notice setting out submissions on the question of the
patentability of the claims (subsection 48.2(5) of the Act.). Patentees
may suggest changes to their own patents inasmuch as these changes do not
broaden the scope of the claims. The re-examination board will have one year
after receiving the patentee’s reply to complete its work.
[6]
When its review is completed, the re-examination
board decides whether to reject or uphold the impugned claims. The effect of a
claim rejection is that the claim is null ab initio.
Subsection 48.4(3) of the Act discusses the effect of a rejection:
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Effect of certificate
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Effet du constat
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(3) For the purposes of this Act, where a certificate issued in
respect of a patent under subsection (1)
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(3) Pour l’application de la présente loi, lorsqu’un constat :
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(a) cancels any claim but not all claims of the patent, the patent
shall be deemed to have been issued, from the date of grant, in the corrected
form;
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a) rejette une revendication du brevet sans en rejeter la
totalité, celui-ci est réputé, à compter de la date de sa délivrance, délivré
en la forme modifiée;
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(b) cancels all claims of the patent, the patent shall be deemed
never to have been issued; or
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b) rejette la totalité de ces revendications, le brevet est réputé
n’avoir jamais été délivré;
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(c) amends any claim of the patent or incorporates a new claim in
the patent, the amended claim or new claim shall be effective, from the date
of the certificate, for the unexpired term of the patent.
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c) modifie une telle revendication ou en inclut une nouvelle,
l’une ou l’autre prend effet à compter de la date du constat jusqu’à
l’expiration de la durée du brevet.
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[7]
Any decision of a re-examination board is
subject to appeal by the patentee (section 48.5 of the Act). As stated
earlier, the person who filed the request for re-examination has a limited
role, and the initial negative decision regarding the request is final and not
subject to appeal (subsection 48.2(3) of the Act). When the second stage
is completed, this initial requester has no further role to play. Nor can it
appeal the decision to the Federal Court if the patentee wants to appeal a
decision that went against it. In Novozymes A/S v. Canada (Commissioner of
Patents), 2007 FCA 129, 55 CPR (4th) 378, the Federal
Court of Appeal stated the following:
[8]
[7] Re-examination pursuant to
sections 48.1 to 48.5 of the Act is a two-step process. Both stages
do not involve the same parties. The first stage involves the filing of a
request by a requester (section 48.1), the establishment of a
re-examination board by the Commissioner in response to this request
(section 48.2(1)) and the preliminary decision by the re-examination board
as to whether the request raises a substantial new question of patentability
(section 48.2(2) to (4)).
[9]
[8] The second stage follows the
re-examination board’s determination that a substantial new question of
patentability is raised (section 48.2(4)). The requester is not a party to
this second phase of the process. Only the re-examination board and the
patentee are parties to that phase. Only the patentee is given notice of such
determination (section 48.2(4)) and is entitled to make submissions
(section 48.2(5)), to propose amendments to the patent
(section 48.3(2)) and to receive a copy of the certificate (section 48.4(2)).
Only the patentee is given a right of appeal (section 48.5).
[10]
[9] Although Novozymes, as the requester,
triggered the re-examination process, it did not and could not participate in
the second stage of the re-examination process.
[11]
[10] Pinard J. made no reviewable
error in finding that Novozymes was not a proper respondent since it was not a “a party in the first instance” within the meaning of
rule 338(1)(a).
[12]
The only appeal will be that in
section 48.5—an appeal filed by the patentee. The Act provides for
a statutory stay of a re-examination board decision that was appealed from a
final judgment (subsection 48.4(4)).
[13]
The request for re-examination of the
294 patent did not yield a response from the patentee, Camso. That is why
the re-examination was completed earlier than expected. Many claims were
cancelled following the re-examination. Regarding the remaining claims, Camso
launched its patent infringement action against the defendants the day after
the re-examination board’s decision (November 19, 2014).
[14]
The original statement was amended to include
infringements of the 509 and 562 patents, which were not issued until
after the initial statement, which clearly addressed only the 294 patent.
The 562 patent had already been added to the statement on June 30,
2015. A new statement that included infringements of the 562 patent was
filed on December 14, 2015.
[15]
On December 23, 2015, Brouillette +
Partners filed its request for re-examination of the 562 patent with the
Commissioner of Patents (all claims were contested). It appears that the
request is some 90 pages long. The notice to the holder of the impugned patent
under subsection 48.1(3) (except if the patentee is also the
re-examination requester) was sent on February 19, 2016. It was not until
July 25, 2016, that the re-examination board found that 143 of the 147
claims of the 562 patent cleared the second stage of the examination
because they raise a substantial new question about the patentability of the
claims. This means that Camso will have until October 25, 2016, to address
the board’s positive decision (section 48.3). After the response date (no
later than October 25, 2016), the board has no more than 12 months to
make its final decision.
[16]
While the request for re-examination of 143 of
the 147 claims of the 562 patent was in progress, Camso’s
infringement action was also underway. An order from Prothonotary Morneau
on August 2, 2016, informs us that between then and September 29,
2017, the following steps will have been completed:
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Second round of examinations for discovery;
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The parties will have addressed the outstanding
issues or stated their refusal to do so;
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Expert reports will have been submitted.
Needless to say, these steps will include
all claims of the 562 patent. I also note that the deadline for the
plaintiff, having been asked to reduce the number of alleged claims in the
infringement action, to amend its statement is March 10, 2017.
II.
Relief sought
[17]
The purpose of Camso’s request is to obtain a
stay of the re-examination of the claims of the 562 patent.
Section 50 of the Federal Courts Act, RSC 1985, c. F-7 is
cited. The text in paragraph 1, which can be applied to this case, reads
as follows:
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Stay of proceedings authorized
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Suspension d’instance
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50 (1) The Federal Court of Appeal or the Federal Court may, in
its discretion, stay proceedings in any cause or matter
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50 (1) La Cour d’appel fédérale et la Cour fédérale ont le pouvoir
discrétionnaire de suspendre les procédures dans toute affaire :
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(a) on the ground that the claim is being proceeded with in
another court or jurisdiction; or
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a) au motif que la demande est en instance devant un autre
tribunal;
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(b) where for any other reason it is in the interest of justice
that the proceedings be stayed.
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b) lorsque, pour quelque autre raison, l’intérêt de la justice
l’exige.
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[18]
The parties agree that this Court may stay
proceedings before an administrative body under section 50. It is clear
that the parties cannot give leave to a court that would not otherwise have it.
The position of the parties reflects the decision of our former colleague,
Justice DeMontigny, who found such in Prenbec Equipment Inc. v.
Timberblade Inc., 2010 FC 23, 2010 80 CPR (4th) 373 (Prenbec)
when he was reviewing a request similar to the one before this Court.
[19]
Having noted that neither the French text nor
the English text limits the section’s scope, the Court, in Prenbec,
noted that the Federal Court of Appeal had referred to section 50 of the Federal
Courts Act to provide a procedural vehicle for suspending the Canadian
International Trade Tribunal’s work in Canada (Attorney General) v. Canada
(International Trade Tribunal), 2006 FCA 395, giving
paragraph 50(1)(b) its broadest scope. The Court, in Prenbec,
plainly stated that it has jurisdiction under section 50 to impose a stay
of the re-examination conducted by the re-examination board when it is in the
interest of justice to do so. I see no reason to decide otherwise.
[20]
Camso claims, without contradiction from anyone,
that the request for re-examination raises essentially the same arguments on
the invalidity of the claims of the 562 patent raised in the counterclaim
of Soucy International Inc. and Kimpex Inc. (Soucy) to the infringement action.
In both cases, it is claimed that the 562 patent errs on the side of lack
of novelty and obviousness. The request for re-examination even includes
affidavits from a Soucy engineer who is also part of the infringement
proceedings.
[21]
At this stage, a reminder of the sequence of
events must be given:
(1)
The 294 patent was issued on
October 1, 2013.
(2)
The request for re-examination of the claims of
the 294 patent was filed on February 26, 2014. It was not contested
by Camso.
(3)
The statement in this case that alleges
infringement by the defendants was filed on November 19, 2014, the day
after the re-examination board’s decision on the 294 patent.
(4)
The 509 patent, now also the subject of the
infringement action, was issued on November 25, 2014, whereas the
562 patent was not issued until May 26, 2015. These patents were
therefore issued after the 294 patent had some of its claims cancelled by
the re-examination board.
(5)
The statement to include alleged infringements
of these two patents was amended a few times after June 2015.
(6)
It was not until December 2015 that
Brouillette + Partners requested a re-examination—well after the action
regarding the 562 patent had been initiated. This was not the case for the
294 patent, which was impugned shortly after it was issued, but long
before Camso initiated infringement proceedings.
[22]
The facts can be summarized as follows: After
obtaining the 294 patent, Camso did not contest the re-examination of the
claims. When that process was completed, it launched an infringement action
based on claims that were not cancelled following the re-examination.
Afterward, two other patents were issued to Camso and the infringement action
was amended to add these new claims. A request for re-examination regarding the
562 patent was not launched until after the action was initiated. Unlike
the re-examination of the 294 patent, the re-examination of the
562 patent was contested. In both cases, the requests for re-examination
of the 294 and 562 patents were filed by Brouillette + Partners. Moreover,
it is Soucy’s legal counsel who are defending the motion to stay the request
for re-examination before this Court.
III.
Parties’ positions
[23]
Camso claims that it is not in the interest of
justice for the re-examination proceedings to continue when an infringement
action has been launched and is underway. Camso is challenging the request for
re-examination filed by a law firm that is not the one acting for Soucy in the
infringement action. Camso seems to be implying that something is wrong there.
However, the Patent Act allows anyone to request a re-examination. The
Act explicitly sets out that the patentee could even request a
re-examination because subsection 48.1(3) states that the request for
re-examination is sent “to the patentee of the patent
in respect of which the request is made, unless the patentee is the person who
made the request.” The inappropriateness of Soucy or any other entity
hiring counsel to request a re-examination was not demonstrated. However, Soucy’s
counsel in the infringement action came before this Court not only on Soucy’s
behalf, but also on behalf of the law firm that filed the request for
re-examination, to contest the motion to stay. There is no doubt that Soucy’s
interests lie in the motion to stay being denied and in the re-examination
process continuing. Soucy’s interests are in line with the respondent’s.
[24]
Camso argues that there is a very close
relationship between the request for re-examination and Soucy’s counterclaim;
both, using the same prior art, claim that the 562 patent errs on the side
of lack of novelty and obviousness. It emphasized the affidavits submitted by
Brouillette + Partners from Soucy’s eventual corporate representative in the
infringement action. However, contrary to what was thought to have been
believed originally, these affidavits are irrelevant to Camso in its potential
argument on the request for re-examination. It is a given that these affidavits
are not admissible before the re-examination board because the Patent Act
states what can be used in a re-examination (section 48.1).
[25]
Instead, Camso is using the affidavits to argue
that the issues related to lack of novelty and obviousness are actually the
same and must be reviewed with context to get the full picture. Issues of
credibility and context must be presented before the trial judge
(paragraph 47, memorandum of fact and law). The same goes for the expert
evidence presented on the issues of lack of novelty and obviousness
(paragraph 49, memorandum of fact and law). As far as Camso is concerned,
preference must be given to the most comprehensive process. It would suffer
irreparable harm from this, there being much less evidence. Soucy and
Brouillette + Partners would suffer far less harm if the motion to stay were
granted.
[26]
Brouillette + Partners, and possibly Soucy,
instead tried to argue that the re-examination board did not say that it was
considering the three affidavits. The analysis will be conducted on record only
and on the filing described in section 48.1.
[27]
Considering the re-examination of the
294 patent as being successful because it significantly decreased the
number of claims that could have been discussed at the trial, there is
therefore potential judicial economy if the re-examination board reduces the
number of claims of the 562 patent. In addition, Parliament provided for a
more efficient, less costly remedy for examining issues of lack of novelty and
obviousness, and Camso is seeking to deprive these plaintiffs by counterclaim
of it. I note that the argument, as presented, acknowledges that Brouillette +
Partners and Soucy have the same interests. No effort was made to suggest that
the two are acting independently of one another.
[28]
Lastly, Brouillette + Partners applied itself to
differentiating the situation in Prenbec from that under review. It is
claimed that Prenbec is limited to the specific facts of that case where
credibility was relevant with regard to the only prior art that was at issue.
The harm found by the Court in Prenbec was dependent upon credibility,
and it was therefore appropriate to allow the process by staying the request
for re-examination. Here, this is not the case because the three affidavits are
inadmissible before a re-examination board.
IV.
Analysis
[29]
In my opinion, the interest of justice in our
case favours ordering the stay of the re-examination process for the
562 patent.
[30]
With regard to stays and interlocutory
injunctions ordered by various courts, the test set out is in RJR-Macdonald
Inc. v. Canada (A.G.), [1994] 1 S.C.R. 311 (RJR-Macdonald).
Under the three-prong test, these three elements must be met: there has to be a
serious question, irreparable harm affecting the party that requested the stay,
and the balance of inconvenience has to favour the party seeking the stay. As
for the first element of the test, a thorough review of the merits of the case
is not sought. All that matters is that the case not be frivolous or vexatious.
No one here claims that it is either. The review will focus on the two other
components of the three-prong test.
[31]
In Prenbec, after having noted the test
in RJR-Macdonald, there was also a reference to Kent v. Universal
Studios Canada Inc., 2008 FC 906 (Kent), where
Prothonotary Aalto spoke of a two-part test at paragraph 15:
[32]
(a) that the continuation of the action
will cause prejudice or injustice (not merely inconvenience or extra expenses)
to the defendant [plaintiff]; and
[33]
(b) that the stay will not work an
injustice to the plaintiff [defendant].
Quite frankly, I see no fundamental
difference between this wording and the last two elements of the three-prong
test in RJR-MacDonald. Is there irreparable harm (not inconvenience or
expenses)? Where is the balance of inconvenience?
[34]
Brouillette + Partners argued in favour of the
application of what was called the nine criteria stated by Justice Dubé in
White v. EBF Manufacturing Ltd., 2001 FCT 713 (White):
[35]
[5] Paragraph 50(1)(a) of the
Act provides that the Court may in its discretion stay proceedings in any cause
or matter on the ground that the claim is being proceeded within another Court
or jurisdiction. The jurisprudence in the matter has established several useful
criteria to determine whether such a stay should be granted (Discreet Logic
Inc. v. Canada (Registrar of Copyrights) 1993 CarswellNat 1930, 51 C.P.R.
(3d) 191, affirmed (1994), 55 C.P.R. (3d) 167 (Fed. C.A.); Plibrico (Canada)
Limited v. Combustion Engineering Canada Inc., 30 C.P.R. (3d) 312 at
page 315; Ass’n of Parents Support Groups v. York, 14 C.P.R. (3d)
263; Compulife Software Inc. v. Compuoffice Software Inc., 1997
CarswellNat 2482, 77 C.P.R. (3d) 451, 143 F.T.R. 19; 94272 Canada Ltd. v.
Moffatt, 31 C.P.R. (3d) 95 and General Foods v. Struthers, [1974]
S.C.R. 98). They are abridged and assembled as follows for convenience:
[36]
1. Would the continuation of the action cause
prejudice or injustice (not merely inconvenience or extra expense) to the
defendant?
[37]
2. Would the stay work an injustice to the
plaintiff?
[38]
3. The onus is on the party which seeks a stay
to establish that these two conditions are met.
[39]
4. The grant or refusal of the stay is within
the discretionary power of the judge.
[40]
5. The power to grant a stay may only be
exercised sparingly and in the clearest of cases.
[41]
6. Are the facts alleged, the legal issues
involved and the relief sought similar in both actions?
[42]
7. What are the possibilities of inconsistent
findings in both Courts?
[43]
8. Until there is a risk of imminent
adjudication in the two different forums, the Court should be very reluctant to
interfere with any litigant’s right of access to another jurisdiction.
[44]
9. Priority ought not necessarily be given to
the first proceeding over the second one or, vice versa.
[45]
With all due respect, I fail to see where
controversy may appear. The nine criteria are not really there. The exercise of
discretionary power (item 4) and power being exercised sparingly
(item 5) are not criteria that can be used to make a decision one way or another.
The same goes for not giving priority to the first proceeding over the second
or vice versa (item 9). Item 3 requires only that the first
two, which resemble the criteria in Kent, which themselves are not
dissimilar to the last two criteria in RJR-MacDonald, be considered
together, as they are in Kent and RJR-MacDonald. It seems to me
that items 6, 7 and 8 are in the analysis proposed by DeMontigny J.
in Prenbec. At paragraph 27 of his decision, he says that in
exercising the discretion and weighing the advantages and disadvantages of
granting the stay, the judge may take into account (1) the possibilities of
inconsistent findings, (2) the similarity of the legal issues involved, (3) the
fact that “one proceeding is broader than the other”
and (4) the existence of a time limitation. I am aware that item 8 is not
specifically found in the outline of the analysis in Prenbec. I find
that in no way troubling because the actual risk consists in obtaining
inconsistent findings, which was specifically dealt with in Prenbec: if
the two proceedings come to the same conclusion, it is hard to see how this
could be a factor for denying a stay. I would assign little weight to this
factor.
[46]
Therefore, there could be no controversy with
regard to the test to be applied in our case: those cited converge. I also note
this passage from the Federal Court of Appeal decision in Tractor Supply Co.
of Texas, LP v. TSC Stores LP, 2011 FCA 46, 90 CPR (4th) 223, which does
not come close to disavowing the test in RJR-MacDonald:
[47]
[2] The Motions Judge denied the stay for
a number of reasons. After a lengthy analysis, she concluded that the
appellants had failed to satisfy her that it would be in the interest of
Justice to stay the proceedings before the Board (section 50 of the Federal
Courts Act, R.S. 1985, c. F‑7). She came to this conclusion on
the basis of the test stated in White v. E.B.F. Manufacturing Ltd.,
[2001] F.C.J. No. 1073 at para. 5. She added that she would have reached
the same conclusion applying the three prong test set out in RJR-MacDonald
v. Canada (Attorney General), [1994] 1 S.C.R. 311.
In Federal Court, Justice MacTavish
gave preference to the nine factors in White over the three-prong test
in RJR-MacDonald (2010 FC 883), but found that there would have been no
irreparable harm had she directly applied RJR-MacDonald
(paragraphs 47 and 48).
[48]
What about our case? It seems clear to me that
the legal issues in the request for re-examination are the same as the
challenges against the validity of the 562 patent with regard to lack of
novelty and obviousness. The allegations are so similar that Soucy used the
same witness (one of its employees) as the one who submitted the affidavits in
support of the request for re-examination. The issue is not about claiming that
these affidavits will not be admissible before the re-examination board, it is
about acknowledging that this type of evidence is relevant to the lack of
novelty and obviousness assessment to be conducted in the infringement action
and is the most comprehensive evidence for proving lack of novelty and
obviousness. This also demonstrates the convergence of interests between
Brouillette + Partners and Soucy.
[49]
Brouillette + Partners’ argument would have had
more weight had it conceded that during the proceeding it did not intend to
present suitable or expert witnesses to establish lack of novelty and
obviousness. Would claims charts presented by experts have to be ignored?
Absolutely not; these testimonies are already provided for. However, this issue
should be decided by a re-examination board without assistance from the
context, relevant factual evidence, and contributions from experts. Despite
that, Brouillette + Partners would want the board’s ruling to be decisive if it
was in its favour.
[50]
In my opinion, the proceedings before the
Federal Court in the form of an action is a broader remedy that allows more
substantial evidence to be received that should favour the interests of
justice. Moreover, it is difficult to understand why the best evidence—that
enhanced by the testimony of experts in fields where, by definition, the
average person’s experience is not enough—should be left out. Therefore, it is
not about just being an expert at reading patents; it is about the technical
expertise possessed by anyone who spent part of their careers assessing this
type of issue. The patent is not the invention. Invention means any new and
useful art, process, machine, manufacture or composition of matter, or any new
and useful improvement in any art, process, machine, manufacture or composition
of matter (definition of “invention,”
section 2, Patent Act). It is not surprising that the examination
is done before the eyes and knowledge of the person skilled in the art.
[51]
Brouillette + Partners argued that judicial
economy is in the interest of justice. No one argues the virtue of this.
However, to prove this, the measure of justice must not be diminished and the
savings must be real. Here, the re-examination of the 294 patent is used
to argue that re-examination saves time and resources. However, the comparison
is weak because this re-examination, unlike that of the 562 patent, was
not contested by the patentee. After the re-examination of the 294 patent
was completed, although almost 60% of the claims of 294 were cancelled, a new
patent was issued six months later. Brouillette + Partners claims that the
562 patent will suffer the same fate. This, to me, seems like an ambitious
prediction that remains to be proven. The circumstances seem especially
different. Moreover, if there are any savings, they will be greatly reduced
because there is no doubt that a re-examination with which Camso is
dissatisfied will be appealed before the Federal Court.
[52]
We therefore have two similar proceedings before
the same court: one an appeal from a re-examination decision and the other
concerning the validity of a patent. Both are cases alleging lack of novelty
and obviousness, but their evidentiary records are completely different. To
complicate matters, the decision under appeal would probably be made based on
the reasonableness standard of review (Newco Tank Corp. v. Canada (Attorney
General), 2014 FC 287, 118 CPR (4th) 424, aff’d 2015 FCA 47),
with inferior evidence to that provided in the infringement action that is
decided on a balance of probabilities.
[53]
Brouillette + Partners made a valiant effort to
claim that if both are heard in Federal Court, some type of consolidation would
be possible. I disagree. Here again there is convergence of the respondent’s
and the plaintiffs’ interests. Moreover, I fail to see the need for two cases
if the conclusion is the same. The main issue is clearly the quality of the
evidence that is so different between the two proceedings. In addition, the two
proceedings are different to the extent that the same Federal Court may have to
show deference in one and be the decision-maker in the other on a balance of
probabilities. There is a real risk of contention. Returning to the factors to
consider by weighing the advantages and disadvantages of a stay, the legal
issues are the same. One process is broader than the other and provides
superior evidence (experts and context) without disregarding the real
possibility of that leading to inconsistent findings.
[54]
The way to avoid inconsistent findings may be to
let the proceedings continue so that the first to reach an outcome prevails.
Aside from the fact that the race for justice is certainly not an appropriate
policy, it must be acknowledged that this race is run on different grounds. In
addition, the Patent Act provides for a statutory stay during the appeal
as long as there is no guarantee as to when the first decision will be made. I
add that the re-examination appeal process itself is poor because part of it is
missing. This difficulty was eloquently stated by Justice Gibson in Genencor
International Inc. v. Canada (Commissioner of Patents), 2008 FC 608,
[2009] 1 FCR 361. After having acknowledged that the Federal
Court of Appeal had dealt with the issue of the participation of the person who
filed the request for re-examination, he wrote:
[55]
[18] . . . In light of the above, and
particularly given the determination by the Commissioner of Patents not to take
an active part in the appeal, pursuant to paragraph 338(1)(c) of the
Rules, the Attorney General of Canada was added as a respondent. While the Attorney
General, as respondent, chose not to intervene on the “merits”
of the decision under appeal, he did “defend the
position that both the process provided by statute and the principles of
natural justice were respected in the present instance.” The failure of
the Court to have before it a respondent speaking to the merits of the decision
under appeal resulted in serious difficulties for the Court. In reality, the
Court heard only “one side” of the issues on the
merits. More will be said about that later in these reasons.
[56]
Upon review of the respective harms, Brouillette
+ Partners is not wrong to speak of the harm of being unable to exercise a
remedy that the law recognizes. That constitutes harm. However, at the hearing,
Soucy did not think it was prevented from presenting further arguments at the
proceedings on lack of novelty and obviousness. It may be because the estoppel
arising from an examined issue would not apply had Camso prevailed before the
re-examination board. Therefore, if Camso is successful before that board, it
must start again at the trial. If claims are cancelled before the board, all
Camso can do is appeal.
[57]
The request for re-examination of the patent
does not seem to have been filed prima facie by Soucy, even though it seemed to
have benefited from it. The counsel who filed the request for re-examination
are not those who acted in the infringement action. It was the counsel for
Soucy in the infringement action who acted in this motion to stay. Would the
difference between the parties in the two proceedings (re-examination and
infringement), likely more artificial than real, be satisfactory to avoid an
estoppel (Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44, [2001] 2
SCR 460 [Danyluk])? It would not be appropriate to elaborate or to speculate
on the pending estoppel because the issue was not discussed in our case.
Suffice it to say that Soucy would see claims cancelled
(subsection 48.4(3)) through the sole operation of the law, but would
continue to argue that the spared claims may be invalid. This is the case
because the outcome of a successful re-examination cancels the claim ab
initio solely on the basis of one case. Taken from this perspective, the
harm to Brouillette + Partners and Soucy is relatively minor because they will
have the opportunity to discuss before the Court issues of interest to them
with regard to the validity of the claims of the 562 patent. In other
words, they will not be deprived of being heard or the issue going to
adjudication. It will go to adjudication after a more comprehensive proceeding
in which Soucy can fully participate.
[58]
Conversely, the harm to Camso is irreparable. It
would risk seeing the claims of its patent cancelled on the basis of a process
where the evidence submitted can only be inferior to that in the previously
initiated infringement proceeding when the request for re-examination was
filed. Camso insisted at the hearing that things could be different if an
infringement action had been initiated after a request for
re-examination had been filed, as was the case for the 294 patent. The
counsel did not elaborate on the difference that could make. What is certain is
that parallel or consecutive proceedings must be avoided. That is what
Justice Binnie stated on the Court’s behalf in Danyluk:
[59]
18 The law rightly seeks a finality to
litigation. To advance that objective, it requires litigants to put their best
foot forward to establish the truth of their allegations when first called upon
to do so. A litigant, to use the vernacular, is only entitled to one bite at
the cherry. The appellant chose the ESA as her forum. She lost. An issue, once
decided, should not generally be re-litigated to the benefit of the losing
party and the harassment of the winner. A person should only be vexed once in
the same cause. Duplicative litigation, potential inconsistent results, undue
costs, and inconclusive proceedings are to be avoided.
[60]
The balance of inconvenience also seems to
favour Camso. Soucy suffers no injustice. It can call upon its slew of experts
and witnesses to defend itself against the infringement action while arguing
that the claims are invalid owing to lack of novelty and obviousness, but then
there would have been a full debate.
[61]
It is my opinion that DeMontigny J.’s
decision in Prenbec is useful and relevant to settling the issue before
the Court. In Prenbec, the Court concluded as follows:
[62]
[48] Moreover, as stated earlier, when
determining whether to grant a stay, preference should be given to the
proceedings which are more comprehensive of the two. In this regard, for
reasons expressed above, re-examination proceedings are unequivocally less
comprehensive as compared to an infringement/invalidity action before this
Court.
I agree. Paragraphs 44 to 46 of Prenbec
seem to apply perfectly to this case in that the principles that arise from
them support my analysis that the most comprehensive proceeding that allows
issues to be dealt with to their fullest extent is preferred. Again, I cite
paragraph 44 of Prenbec because, with the adjustments required to
fully deal with the claims instead of the issue of credibility that is at the
heart of Prenbec, it applies just as much to this case.
[63]
[44] By filing its Re-examination Request
after the commencement of the present infringement action before this Court,
the defendant is merely attempting to avoid dealing with the issue of
credibility surrounding its alleged prior art. This Court can already entertain
any and all the invalidity arguments made in support of the defendant’s
Re-examination Request, which are already contained in its Statement of Defence
and Counterclaim and, in particular, it can address the significant credibility
issues, which only this Court is capable of hearing.
It is worthwhile to keep in mind that
Brouillette + Partners thought it appropriate to include in its request for
re-examination affidavits from the person who acted as Soucy’s corporate
representative in the infringement action. The context is relevant and expert
evidence is often essential.
[64]
It is my opinion that whether the test in RJR-MacDonald
or the analysis grid in White is used, the outcome is the same. In one
case, Camso would suffer irreparable harm, and the balance of inconvenience is
clearly in its favour. In the other, in addition to the harm caused to Camso
compared to the inconvenience suffered by Soucy, it must be recognized that the
same issues in the request for re-examination are raised in the action, that
there is a possibility of inconsistent findings on factual records with
different content, and that the decisions would likely be made in parallel. The
fact that one action was initiated before the other is of little importance;
the difficulty in the request for re-examination, with its limited file on an
issue that must be discussed on its merits in an action, leads me to conclude
that the action launched in Federal Court is the best vehicle for dealing with
this complex issue. The efficient use of judicial and other resources is far
from being achieved with two actions that continue to progress at the same time
when these two proceedings have the same final outcome. It seems to me that the
analysis grid in White leads to one outcome, which is consistent with
the three-prong test in RJR-MacDonald.
[65]
I therefore grant the motion to stay the
re-examination proceeding.
[66]
The motion includes a specific finding that the
Commissioner of Patents and the Attorney General of Canada be added as third
parties. Camso is seeking to add them to ensure that an order from this Court
to stay the re-examination of the 562 patent is binding on them. Although
duly informed, these third parties did not contest the request. It is
understood that Brouillette + Partners is a party to this case as a respondent.
[67]
Camso is seeking costs in the amount of $3000.00
to be awarded immediately. Brouillette + Partners and Soucy are seeking
likewise.
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