Rothbury International Inc. v. Canada (Minister of Industry), 2004 FC 578

Date: 20040416

Docket: T-437-01

Citation: 2004 FC 578

Ottawa, Ontario, the 16th day of April 2004

Present:           The Honourable Madam Justice Tremblay-Lamer

BETWEEN:

                                             ROTHBURY INTERNATIONAL INC.

                                                                                                                                               Plaintiff

                                                                           and

                                                      MINISTER OF INDUSTRY

                                                                           and

                                                 COMMISSIONER OF PATENTS

                                                                                                                                         Defendants

                                            REASONS FOR ORDER AND ORDER

[1]                This is an action brought by statement of claim pursuant to subsection 6(1) and section 169 of the Federal Court Rules, 1998, SOR/98-106 (the Rules). The plaintiff is seeking an order stating that the subject of the application to register industrial design 1997-1470 is complete, valid and registrable. The plaintiff is further asking that this Court direct the Department of Industry (the Department) to enter application 1997-1470 in the Register of Industrial Designs (the Register).

FACTS

[2]                On June 3, 1997, the plaintiff filed registration application 1997-1470 for the industrial design relating to the New Pisa II block (the NPII). This is a parallelepiped block used in the construction of revetment walls and external division walls. The registration application contains the following amended description of the NPII:

The design lies essentially in the shape and configuration of a block having a rectangular rear side with a central granulated surface and with a transverse recess of right-angled trapezoidal cross-section, which extends over all its length at substantially in height.

[3]                Following the initial review of its application by the industrial drafting checker (the checker) and the filing of two replies to two reports by the checker, the plaintiff received the final refusal to register on June 16, 1999. The plaintiff filed an appeal with the Patent Appeal Board (the Board).

[4]                On September 13, 2000, the Board dismissed the plaintiff's appeal and refused to recommend registration of the NPII: hence the action at bar against the Department and the Commissioner of Patents (the Commissioner) challenging the Board's decision.

POINTS AT ISSUE

            1.         Did the Commissioner of Patents (and the checker before him) err in law and in fact in assessing the degree of originality required to register the industrial design for the plaintiff's NPII block?

            2.         Did the Commissioner err in refusing, without sufficient cause, to register the plaintiff's industrial design for the NPII block?

            3.         Is the plaintiff's industrial design for the NPII block valid and registrable under the provisions of the Industrial Design Act, so that the Federal Court can order that the entry be made in the Register pursuant to section 22 of that Act?

PLAINTIFF'S POSITION

[5]                The plaintiff submitted that the Commissioner made an error of law in his application of the legal test developed by the courts to assess registrability of the NPII block. It suggested that the Commissioner should have considered the block from the standpoint of a person knowledgeable in the field of blocks, or that of a consumer with knowledge of the field of blocks, before determining the originality of the design for the NPII block.

[6]                It alleged that the following errors of fact resulted from this error of law:

1.         the Commissioner did not consider the fact that the NPII was substantially different from what existed in the industry at the time the application was made;

            2.         in his comparison to determine the originality of the design, the Commissioner dissected first the NPII block and then the Pisa II block, whereas he should have looked at what was already in existence (the Pisa II) before considering the NPII;

            3.         the Commissioner wrongly decided a priori that the NPII could only be installed in one way;

            4.         the Commissioner wrongly concluded that the visual characteristics of the NPII were solely the result of its functionality.

ANALYSIS

            1. Applicable law

                        (a) Proper procedure

[7]                The plaintiff filed an action by statement of claim seeking an order by the Federal Court that the industrial design which was the subject of the plaintiff's registration application 1997-1470 be entered in the Register.

[8]                Subsection 22(1) of the Industrial Design Act, R.S.C. 1985, c. I-9 (the Act) provides that "any person aggrieved by any omission without sufficient cause to make any entry in the Register of Industrial Designs" may ask the Federal Court, which has exclusive jurisdiction to "decide any question that may be necessary or expedient to decide for the rectification of the Register", to order that the entry be made in the Register.

[9]                Subsection 22(1) of the Act reads as follows:

[10]            However, the Act provides no deadline or procedure for bringing an action pursuant to section 22 of the Act.

[11]            In Gandy v. Canada (Commissioner of Patents), [1980] F.C.J. No. 118 (QL), the Federal Court held that the proper proceeding under section 22 was an action. At paragraph 9, Mahoney J. said the following:

An appeal in such a case as this lies under subsection 22(1) of the Industrial Design Act. It is not appropriately to be pursued by way of an application under either subsection 17(5) or section 18 of the Federal Court Act. The proper procedure to follow, in appealing under subsection 22(1) of the Act, is to commence an action.

[12]            As the Court of Appeal has not yet ruled on this point, I consider that the procedure suggested by Mahoney J. is appropriate.

[13]            Further, as counsel for the plaintiff properly noted, Rule 300 of the Rules sets out an exhaustive list of the proceedings which may be initiated by application: the remedy described in section 22 of the Act is not on that list. In the absence of any express provision that proceedings under section 22 of the Act are initiated by application, all other proceedings must be brought by statement of claim (Rules 61(1) and 169 of the Rules).

[14]            Accordingly, the plaintiff correctly applied to the Court by statement of claim.

                        (b) Whether trial de novo

[15]            Subsection 22(1) of the Act states that the Court should only intervene when it is satisfied there has been an omission to make an entry in the Register without sufficient cause.

[16]            Accordingly, the Court must assess the record as it stood before the Commissioner. There thus cannot be a trial de novo in the strict sense, since that term refers to a trial that requires creation of a new record, as if there had not been any record previously prepared (Molson Brewery v. John Labatt Ltd, [2000] 3 F.C. 145 (C.A.)).

[17]            The defendants maintained that an appeal under section 22 of the Act must be dealt with in a manner similar to an appeal under section 56 of the Trade-marks Act, R.S.C. 1985, c. T-13, and an appeal covered by section 41 of the Patent Act, R.S.C. 1985, c. P-4. I feel that they are right, since in the same way in the latter actions the record prepared by the Commissioner was the basis for the evidence in the Federal Court, to which additional evidence could be added.

                        (c) Standard of review

[18]            Since the appeal mentioned in section 22 of the Act requires reviewing the Commissioner's conclusions in part, the appropriate standard of review in the case at bar must be determined.

[19]            Recently, in Dr. Q v. College of Physicians and Surgeons, [2003] 1 S.C.R. 226, the Supreme Court of Canada repeated that the Court should apply the pragmatic and functional approach, which calls upon a reviewing court to weigh a series of factors to determine the standard of review applicable to an administrative decision. The background factors are the following: the presence or absence of a privative clause or right of appeal in the Act; the tribunal's expertise on the point at issue relative to that of the reviewing court; the purpose of the statute and the particular provision; and the nature of the provision _ law, fact or mixed law and fact.

            Presence or absence of privative clause

[20]            The first factor concerns the control procedure set out in the Act. The Act may contain a privative clause which indicates a need for greater deference. In the case at bar, the absence of a privative clause indicates that limited deference is due to the Commissioner's decision.

            Decision-maker's expertise

[21]            The second factor recognizes that a decision-maker may have special expertise in an area which is greater than that of the courts of law. The Commissioner is called on to render any decision under the Industrial Design Act, and in particular to decide whether an industrial design should be registered. In so doing, I feel that he has an expertise which the Court does not have and that he should be treated with greater deference.

            Purpose of Act

[22]            As the pragmatic and functional approach focuses on the legislative intent, the Court must look at the general purpose of the Act pursuant to which the decision is made. The Industrial Design Act does not require the decision-maker to choose between various remedies or to rule on the rights of two parties: it only provides for the registration of a design which is original and which meets the criteria set out in the Act. Accordingly, the legislative purpose diverges significantly from the usual role of the courts, and this argues for greater deference.

            Nature of problem

[23]            When the problem which is the subject of review is purely factual in nature, greater deference is warranted. Conversely, a point of law indicates the need for stricter review (Dr. Q., supra).

[24]            In the case at bar the problem is whether the form of the industrial design is original. The Federal Court has held that this is a purely factual matter (Bata Industries Ltd. v. Warrington Inc. (1985), 5 C.I.P.R. 223). Accordingly, greater deference is warranted.

[25]            After considering these factors, I feel that in general the appropriate standard of review in the case at bar is that of the reasonable decision.

[26]            However, in view of the possibility that new evidence may be submitted, the Court must consider the effect that new evidence will have on the standard of review. This question was commented on by Evans J. in Garbo Group Inc. v. Harriet Brown & Co., [1999] F.C.J. No. 1763 (QL), with reference to the impact of filing new evidence under section 56.5 of the Trade-marks Act. Those comments are very relevant in the case at bar.

[27]            At paragraphs 37 and 38, Evans J. said:

[37] As for the impact on the standard of review of the filing of additional evidence on an issue at the appeal, much will depend on the extent to which the additional evidence has a probative significance that extends beyond the material that was before the Registrar. If it adds nothing of significance, but is merely repetitive of existing evidence without enhancing its cogency, its presence should not affect the standard of review applied by the Court on the appeal.

[38] If, on the other hand, the additional evidence goes beyond what was in substance already before the Registrar, then the Court should ask whether, in the light of that material, the Registrar reached the wrong decision on the issue to which that evidence relates and, perhaps, on the ultimate decision as well. The more substantial the additional evidence, the closer the appellate Court may come to making the finding of fact for itself.

[28]            In the case at bar, the plaintiff submitted new evidence to the Federal Court, which significantly added to the evidence before the Commissioner. In light of that additional evidence, I consider that the Commissioner would not have made the same decision, so that the applicable standard of review in the case at bar is that of the correct decision.

            (d)        Industrial designs

[29]            The purpose of the Industrial Design Act is to protect the visual features, or combinations of features, of configuration, pattern or ornament in a finished article.

[30]            The test used for determining the originality of a design is that of a purely visual assessment of the features of a finished article. It is found in the English version of the definition of "design" in section 2 of the Act, which reads as follows:

[31]            The plaintiff submitted that this test requires that review of the design be from the standpoint of the informed consumer. I concur. In the English case Amp Inc. v. Utilux Pty. Ltd., [1970] R.P.C. 397, the Court held that the industrial design should be assessed from the standpoint of the consumer. At page 108 of the decision, Lord Reid wrote:

...So the design must be one which appeals to the eye of some customers. And the words "judged solely by the eye" must be intended to exclude cases where a customer might choose an article of that shape not because of its appearance but because he thought that the shape made it more useful to him. [Emphasis added.]

[32]            This case was cited by Mahoney J. of this Court in Gandy v. Commissioner of Patents, supra. Accordingly, the Commissioner must place himself in the position of a consumer who is familiar with the block market field.

(e)        Originality

[33]            Before a design can be registered, the Industrial Design Act provides that the design must be considered as original by the examiner:

[34]            The Act does not define the standard of originality required. The test for determining whether an industrial design is original was settled in [1929] S.C.R. 429">Clatworthy & Son Limited v. Dale Display Fixtures Limited, [1929] S.C.R. 429. Lamont J. wrote, at page 431 of the decision:

In Dover, Limited v. Nurnberger Celluloidwaren Fabrik Gebruder Wolff [[1910] 2 Ch. 25, at p. 29.], Buckley, L.J., defines "original" as applied to designs, as follows:--

The word "original" contemplates that the person has originated something, that by the exercise of intellectual activity he has started an idea which had not occurred to any one before, that a particular pattern or shape or ornament may be rendered applicable to the particular article to which he suggests that it shall be applied. If that state of things be satisfied, then the design will be original although the actual picture or shape or whatever it is which is being considered is old in the sense that it has existed with reference to another article before.

And further on he says:--

There must be the exercise of intellectual activity so as to originate, that is to say suggest for the first time, something which had not occurred to any one before as to applying by some manual, mechanical, or chemical means some pattern, shape, or ornament to some special subject-matter to which it had not been applied before.

[35]            At 433, he added that the existence of a substantial difference from the earlier design is necessary in order to find that the design is original:

It must be remembered, however, that to constitute an original design there must be some substantial difference between the new design and what had theretofore existed. A slight change of outline or configuration, or an unsubstantial variation is not sufficient to enable the author to obtain registration.

The degree of originality required to register an original design is greater than that laid down by Canadian copyright legislation, but less than that required to register a patent (Bata Industries Ltd. v. Warrington Inc. (1985), 5 C.P.R. (3d) 339 (F.C.)).

[36]            The originality of a design is a question of fact that must be assessed in accordance with the nature and character of the article to which the design refers and constraints must be considered when originality is assessed (Bata Industries, supra; Re: Application of Dart Industries (1983), 3 C.P.R. (3d) 420).

[37]            The purpose of an industrial design is to protect the visual features of a functional article, but the latter should not be solely the result of a function of the article. In Re: Application for Industrial Design Registration by Robin R. Boyan (1977) 56 C.P.R. (2d) 134, the checker dismissed an application to register an industrial design for paving stones because the design was not sufficiently original compared with the prior design. Both designs had projections on the lateral sides of the stone, but in the applicant's design the projections were placed irregularly while in the prior art they were located at an equal distance along the sides.

[38]            The Commission found that when an article is primarily functional, minimal differences may suffice for a conclusion of originality.

2.          Plaintiff's evidence in Federal Court

[39]            The Commissioner dismissed the application to register because of a lack of originality in the design compared with the prior art. He further concluded that the changes made to the design resulted from functional features in the configuration of the block.

[40]            The plaintiff filed additional evidence in the Federal Court as well as the record of the registration application for the NPII industrial design. It referred to the affidavit of Angelo Risi, the plaintiff's president and the designer of the NPII, and to the affidavit of Michael Bernardi, the plaintiff's expert witness on revetment walls.

[41]            Mr. Risi testified that in 1997 he drew up a new design for blocks used to put up revetment and division walls, the NPII. The block had a transverse recess on the side opposite the granular side. This recess did not exist on blocks found on the market at that time.

[42]            He explained that the blocks were produced in pairs. The granular surface was created once the two blocks were separated by the consumer. Accordingly, when the consumer purchased this product he would at once notice that the sides were not smooth as in the prior art, but now had a transverse recess. Mr. Risi testified he had never seen such a recess on a block of this type before his blocks were placed on the market. Mr. Risi said he created this new design to find a way of distinguishing his products from those of his competitors. The presence of the recess gave a different aesthetic appearance, which offered the consumer a choice as to the facade he wanted to give his wall.

[43]            Mr. Risi mentioned that following introduction of the NPII to the market demand for the product increased immediately and he received favourable comments from several customers who appreciated the aesthetic alternative offered by the NPII.

[44]            Mr. Risi testified that these blocks were not offered to the public, but were distributed to contractors, engineers and gardeners. The consumer of these blocks was thus a person who was fully familiar with the art of blocks used to put up revetment walls and division walls.

[45]            Mr. Bernardi, a person knowledgeable in the field of blocks used for the construction of revetment and division walls, explained that when he saw this block for the first time his attention was immediately drawn to the recess, and he immediately wondered what the reason for the change in design was. He testified that between 1982 and 1997 he had never seen a block with a transverse recess on the surface opposite the granular face.

[46]            Mr. Bernardi further testified that this recess was too small to facilitate the transport of blocks, especially once they were separated, and that its presence did not lighten the block substantially (Mr. Bernardi considered that the recess reduced the weight of an individual block by 3 pounds, which was negligible as they individually weighed approximately 45 pounds.

[47]            Mr. Bernardi explained that several installation options are possible depending on whether the granular face or the face with the recess was used.

[48]            Further, these blocks are very useful in putting up revetment walls combined with division walls. The consumer could then choose to build a wall which has two different facades, one granular and one with a more modern appearance.

[49]            Mr. Bernardi felt that the NPII was more versatile than the Pisa II block. It was sufficiently different from the prior art to attract the attention of a consumer of these blocks. In Mr. Bernardi's submission, the addition of a recess to the surface opposite the granular face of the block made the design of the NPII original.

[50]            Accordingly, the additional evidence disclosed that several installation options were possible both for a revetment wall and a division wall. The Commissioner concluded that this recess had a purely functional role. He failed to consider the aesthetic aspect of the recess.

[51]            Based on the new evidence, I consider that the Commissioner made an error of fact in failing to consider that the surface opposite the granular face of the block could also be used as a facade for a wall. This error is significant, as it influenced his assessment of the originality of the design which was the subject of application 1997-1470.

[52]            I accept the testimony of Mr. Bernardi, a knowledgeable person in the field of blocks used for construction of revetment walls and division walls, that when he saw this block for the first time his attention was immediately drawn to the recess on the [TRANSLATION] "back" face of a stone. He at once wondered what the reason for this change in design was. I accept his conclusion that the recess made several installation options possible and that the NPII was more versatile than the Pisa II block, and it was sufficiently different from the prior art to attract the consumer's attention.

[53]            I also accept Mr. Risi's testimony that these blocks are not sold directly to the public, but are distributed to contractors, engineers, gardeners and so on. The consumer is thus a person fully familiar with the art of blocks used for revetment walls and division walls, like the expert witness, and based on the decision in Gandy, supra, it is with this in mind that the Commissioner should have reviewed the design.

[54]            Based on the evidence filed in this Court, I would answer the three questions raised in the case at bar in the affirmative:

1.          Did the Commissioner of Patents (and the checker before him) err in law and in fact in assessing the degree of originality required to register the industrial design for the plaintiff's NPII block?

Answer: yes

2.          Did the Commissioner err in refusing, without sufficient cause, to register the plaintiff's industrial design for the NPII block?

Answer: yes

3.          Is the plaintiff's industrial design for the NPII block valid and registrable under the provisions of the Industrial Design Act, so that the Federal Court can order that the entry be made in the Register pursuant to section 22 of that Act?

Answer: yes

                                               ORDER

THE COURT ORDERS that the industrial design titled "block" which is the subject of application 1997-1470 be entered on the Register of Industrial Designs.

Certified true translation

Suzanne M. Gauthier, C Tr, LLL

                                     FEDERAL COURT

                              SOLICITORS OF RECORD

DOCKET :                                                         T-437-01

STYLE OF CAUSE :                                         ROTHBURY INTERNATIONAL INC.

and

MINISTER OF INDUSTRY and COMMISSIONER OF PATENTS

PLACE OF HEARING:                                    Ottawa, Ontario

DATE OF HEARING:                                      March 22, 2004

REASONS FOR ORDER AND ORDER:      The Honourable Madam Justice Tremblay-Lamer

DATED :                                                            April 16, 2004

APPEARANCES:

Jacques A. Léger                                                  for the plaintiff

Alexandra Steele

Sébastien Gagné                                                   for the defendants

SOLICITORS OF RECORD:

Léger, Robic, Richard, s.e.n.c.                              for the plaintiff

55, rue St-Jacques

Montréal, Quebec

H2Y 3X2

Morris Rosenberg                                                 for the defendants

Deputy Attorney General of Canada

Ottawa, Ontario