Bauer Nike Hockey Inc. v. Easton Sports Canada Inc., 2005 FC 1014

Date: 20050721

Docket: T-237-02

Citation: 2005FC1014

Montréal, Quebec, July 21, 2005

Present:           RICHARD MORNEAU, ESQ., PROTHONOTARY

BETWEEN:

                                                    BAUER NIKE HOCKEY INC.

                                                                                                                                               Plaintiff

                                                                                                            (Defendant by Counterclaim)

                                                                           and

                                                EASTON SPORTS CANADA INC.

                                                                                                                                           Defendant

                                                                                                                (Plaintiff by Counterclaim)

                                            REASONS FOR ORDER AND ORDER

[1]                Three motions have been brought to the attention of the Court for adjudication. Two of these three motions are moved by the Plaintiff and Defendant by Counterclaim (Bauer) and the third one is moved by the Defendant and Plaintiff by Counterclaim (Easton).

[2]                Bauer's two motions relate to:

-            amendments to Bauer's Statement of Claim; and

-            compelling a representative of Easton, Mr. Ned Goldsmith, to answer certain questions posed to him at his examination for discovery held on August 25 to 27, 2003 and August 12 and 13, 2004.

[3]                Easton's motion relates to compelling Bauer's representative, Mr. Ken Covo, to provide responses to questions refused at the examinations for discovery of Mr. Covo held on August 5 and 6, 2004.

Background

[4]                Bauer's present action concerns Canadian Letters Patent No. 2 302 953 (the '953 patent) relating to a one-piece quarter for a skate boot and a skate boot comprising such a quarter.

[5]                Bauer alleges in its current pleadings that Easton has infringed claims 1, 2, 4, 5, 6 and 7 of the '953 patent by the manufacture and sale of four models of skate boots in Canada.

[6]                Easton has denied that any claims of the patent in suit have been infringed, and has filed a counterclaim alleging that the '953 patent is invalid on a number of grounds, including obviousness, lack of inventiveness, prior public disclosure, lack of utility and misleading statements in the background section of the alleged invention.

[7]                Central to this case are claims 1 and 7 of the '953 patent.

[8]                Claim 1 provides as follows:

1.              A skate boot comprising a sole, a front portion for enclosing a wearer's toes, a rear portion for enclosing a wearer's heel and ankle, and a medial and lateral portion for enclosing the sides of a wearer's foot, said rear portion and said medial and lateral portions comprising:

-                a quarter medial portion and a quarter lateral portion integrally connected together in a one piece construction and being folded at a symmetry line to form a U-shaped skate boot structure, each said quarter portions extending upwardly along said symmetry line defining a heel and ankle portion of said skate boot structure and extending outwardly from said symmetry line in a narrowing profile for defining both sides of said skate boot structure; and

-                a tendon guard secured to said quarter medial portion and quarter lateral portion at a junction line in a side-by-side fashion thereby resulting in said rear portion of said skate boot having an angular profile defined by said tendon guard and said quarter medial and lateral portions at said junction line.

[9]                Claim 7 provides as follows:

7.              A method of fabricating a skate boot comprising the steps of:

-                cutting a one-piece element comprising a quarter medial portion, a quarter lateral portion, a medial foxing portion and a lateral foxing portion, said quarter medial portion and said quarter lateral portion, together defining an upper edge of said one-piece element;

-                cutting a tendon guard having a lower edge;

-                folding said one-piece element at a symmetry line to form a U-shaped structure;

-                sewing said lower edge of said tendon guard to said upper edge of said one-piece element end to end to form a butt point at a junction line, such that said tendon guard defines an obtuse angle with said one-piece element;

-                sewing together said medial foxing portion and lateral foxing portion to form a curved heel profile.

[10]            The presence and identification of various elements of Easton's skates, including the quarter medial portion, quarter lateral portion and tendon guard, and the connection of the elements at the junction line will most likely be issues between the parties.

[11]            In particular, Easton has alleged at discovery that changes had been made to Easton's line of skates as of and since 2004 to allegedly "overlap" the material at the junction line. Therefore, it appears that one of the issues in dispute in this action is whether the tendon guard of the Easton's skates is secured to the quarter medial and quarter lateral portion "at a junction line in a side-by-side fashion".

[12]            I shall deal with the motions at bar in the order in which they were introduced in paragraphs 2 and 3 above.

I.           Motion by Bauer to Amend its Statement of Claim

[13]            Where the rules applicable to amending pleadings are concerned, the following passage from Canderel Ltée v. Canada, [1994] 1 F.C. 3 (C.A.), at 10, clearly reflects the liberalism which the Court must exercise in such matters:

[. . .] while it is impossible to enumerate all the factors that a judge must take into consideration in determining whether it is just, in a given case, to authorize an amendment, the general rule is that an amendment should be allowed at any stage of an action for the purpose of determining the real questions in controversy between the parties, provided, notably, that the allowance would not result in an injustice to the other party not capable of being compensated by an award of costs and that it would serve the interests of justice.

[14]            As a background to these observations it may be added that in the case of an amendment, like an application to strike pleadings, the amendment should be allowed unless it is clear and obvious that the amendment is doomed to failure (see Cardinal et al. v. Canada (1993), 164 N.R. 301 (F.C.A.)).

[15]            Bauer's motion relates to the following three aspects:

(a)         an amendment to allege, in response to Easton's allegation of obviousness, commercial success of Bauer's products of the '953 patent and commercial success of Easton's products which allegedly incorporate the invention of the '953 patent;

(b)         (i)          replace "Federal Court of Canada Trial Division" in the style of cause with "Federal Court";

(ii)         remove the Bauer's claim in paragraph 1(c) of Bauer's Statement of Claim for an interim and interlocutory injunction; and

(iii)        delete the reference to "in Canada" in paragraph 7 of Bauer's Statement of Claim in relation to the skates manufactured and sold by Bauer comprising a boot as defined in the patent.

(c)         an amendment to allege infringement of the '953 patent by Easton's additional models of skates.

[16]            Amendments related to points (a) and (b) above are not really in dispute and shall therefore be allowed without further discussion. The commercial success scope at further discoveries is too premature an issue to tackle at this juncture.

[17]            As to point (c) dealing with additional skate models, it is the position of Easton that such an amendment should not be allowed since from its point of view Bauer has learned and acknowledged that said models, i.e. the post-2004 skate models, are sewn in an overlapping fashion rather than in a side-by-side fashion as claimed by claim 1 of the '953 patent, or do not have a single piece lower quarter. Therefore, according to Easton, its post-2004 models cannot possibly infringe any of the claims in suit.

[18]            Easton's position appears to carry quite some weight.

[19]            However, at this juncture the full and detailed connection of Easton's quarter pieces is not fully known and whether such connection or the presence of more than one lower quarter piece can be seen as a reading on the text or substance of claim 1 is to a certain extent a patent construction matter. I cannot therefore rule that this latest amendment by Bauer is clearly and obviously doomed to failure.

[20]            Consequently, Bauer's motion to amend is allowed, with costs in the cause, and Bauer is allowed to serve and file within ten (10) days of the date of these Reasons for Order and Order an Amended Statement of Claim similar to the one it attached as Schedule "A" to its motion.

[21]            I will now turn to the parties' motions to compel after having stated my understanding of the law on discovery.

The Law on Questions on Discovery

[22]            In Reading & Bates Construction Co. v. Baker Energy Resources Corp. (1988), 24 C.P.R. (3d) 66 at 70-72 (F.C.T.D.), Mr. Justice McNair, in a general six-point review, first defines in points 1 to 3 the parameters that determine whether a question or a document is relevant, and then, in points 4 to 6, sets out a series of circumstances or exceptions in which, on the off chance, at the end of the day, a question need not be answered or a document need not be produced.

[23]            The Court states, at pages 70 to 72:

      1.    The test as to what documents are required to be produced is simply relevance. The test of relevance is not a matter for the exercise of the discretion. What documents parties are entitled to is a matter of law, not a matter of discretion. The principle for determining what document properly relates to the matters in issue is that it must be one which might reasonably be supposed to contain information which may directly or indirectly enable the party requiring production to advance his own case or to damage the case of his adversary, or which might fairly lead him to a train of inquiry that could have either of these consequences: Trigg v. MI Movers Int'l Transport Services Ltd. (1986), 13 C.P.C. (2d) 150 (Ont. H.C.); Canex Placer Ltd. v. A.-G. B.C. (1975), 63 D.L.R. (3d) 282, [1976] 1 W.W.R. 644 (B.C.S.C.); and Compagnie Financiere and Commerciale du Pacifique v. Peruvian Guano Co. (1882), 11 Q.B.D. 55 (C.A.).

      2.    On an examination for discovery prior to the commencement of a reference that has been directed, the party being examined need only answer questions directed to the actual issues raised by the reference. Conversely, questions relating to information which has already been produced and questions which are too general or ask for an opinion or are outside the scope of the reference need not be answered by a witness: Algonquin Mercantile Corp. v. Dart Industries Canada Ltd. (1984), 82 C.P.R. (2d) 36 (F.C.T.D.); affirmed 1 C.P.R. (3d) 242 (F.C.A.).

      3.    The propriety of any question on discovery must be determined on the basis of its relevance to the facts pleaded in the statement of claim as constituting the cause of action [...]

     4.    The court should not compel answers to questions which, although they might be considered relevant, are not at all likely to advance in any way the questioning party's legal position: Canex Placer Ltd. v. A.-G. B.C., supra; and Smith, Kline & French Laboratories Ltd. v. A.-G. Can. (1982), 67 C.P.R. (2d) 103 at p. 108, 29 C.P.C. 117 (F.C.T.D.).

      5.    Before compelling an answer to any question on an examination for discovery, the court must weigh the probability of the usefulness of the answer to the party seeking the information, with the time, trouble, expense and difficulty involved in obtaining it. Where on the one hand both the probative value and the usefulness of the answer to the examining party would appear to be, at the most, minimal and where, on the other hand, obtaining the answer would involve great difficulty and a considerable expenditure of time and effort to the party being examined, the court should not compel an answer. One must look at what is reasonable and fair under the circumstances: Smith, Kline & French Ltd. v. A.-G. Can., per Addy J. at p. 109.

      6.    The ambit of questions on discovery must be restricted to unadmitted allegations of fact in the pleadings, and fishing expeditions by way of a vague, far-reaching or an irrelevant line of questioning are to be discouraged: Carnation Foods Co. Ltd. v. Amfac Foods Inc. (1982), 63 C.P.R. (2d) 203 (F.C.A.); and Beloit Canada Ltee/Ltd. v. Valmet Oy (1981), 60 C.P.R. (2d) 145 (F.C.T.D.).

[Emphasis added]

[24]            In many situations, the balancing to which the Court refers in Reading & Bates in point 5 will be necessary.

[25]            Indeed, as mentioned in Faulding Canada Inc. v. Pharmacia S.p.A. (1999), 3 C.P.R. (4th) 126, at page 128:

[...] the general tendency of the courts to grant broad discovery must be balanced against the tendency, particularly in industrial property cases, of parties to attempt to engage in fishing expeditions which should not be encouraged.

[26]            Rule 242 of the Federal Courts Rules (the Rules) contains a warning to that effect. Paragraphs 242(1)(b) to (d) of the Rules read:

[27]            That having been said, I shall now consider Bauer's motion to compel.

II.         Bauer's Motion to Compel

(a)         Outstanding Undertakings

[28]            Outstanding undertakings from the examinations for discovery of Easton are set out in Schedule "A" to the Notice of Motion of Bauer. It appears that the Defendant has not complied yet with several undertakings listed therein. In the circumstances, the Defendant is hereby ordered to comply with the remaining undertakings within thirty (30) days of the date of these Reasons for Order and Order.

(b)         Outstanding Refusals

[29]            Bauer has categorized the outstanding refusals into the following seven (7) categories which I shall adopt and follow for the purpose of adjudicating on them:

1.          questions inquiring about the components of Easton's skates;

2.          questions relating to the method of manufacture of Easton's skates;

3.          questions inquiring about the companies that manufacture Easton's skates;

4.          question relating to Easton's allegations of invalidity;

5.          questions relating to market share;

6.          questions inquiring about the skates that Easton has commercialized in 2004 and 2005; and

7.          miscellaneous questions.

Category 1

[30]            Considering the amendments Bauer is allowed to make to its Statement of Claim by the instant order, and subject to the disallowance of certain questions hereinafter, the questions in this category shall be answered since the answers sought should assist in identifying the various elements of Easton's skates. Therefore they go to the issue of the alleged infringement of the '953 patent.

[31]            For the reasons stated by Easton in its motion material in response, questions 1788 and the two questions numbered 1789 in this category need not be answered.

Category 2

[32]            With respect to question 1459, Easton shall provide details as to the alleged inaccuracies raised by Easton with respect to the printout in question. The answer provided so far by Easton is insufficient in that regard.

[33]            Question 2032 has been sufficiently answered and need not be answered further, subject to be followed up by Bauer upon pursuance of the discoveries.

[34]            Questions 2149 and 2150 need not be answered further since it appears that Easton has described the basic process of boot manufacture insofar as it relates to the method claim in suit. Additional details are not required.

Category 3

[35]            For the reasons expressed by Bauer in its motion material in terms of identifying potential witnesses and/or defendants, the questions in this category shall be answered.

[36]            If some of the information to be disclosed to Bauer is commercially confidential, it could and should be produced between the parties under a usual confidential agreement.

Category 4

[37]            The sole question in this category has been sufficiently answered on December 17, 2004. It need not be answered further.

Category 5

[38]            I am not convinced that the questions in this category are irrelevant as claimed by Easton. Easton has alleged that the '953 patent is invalid for being obvious in view of the prior art. The commercial success of Bauer's and Easton's skates therefore becomes relevant. The questions in this category shall therefore be answered.

Category 6

[39]            Considering the amendments that Bauer is allowed to make to its Statement of Claim, and considering the reasons put forth by Bauer in its motion material, the question in this category shall be answered.

Category 7

[40]            For the reasons expressed by Bauer in its motion material, all questions in this category save question 2038 shall be answered.

[41]            As to question 2038, it has been conclusively answered. It need not be answered further as agreed by Bauer at the hearing.

[42]            Consequently, under the schedule found at paragraph 70, infra, the representative of Easton shall re-attend at a further examination for discovery at his own expense to answer all questions ordered herein to be answered, and to answer also all proper follow-up questions arising from the questions ordered to be answered.

[43]            Costs on this motion shall be in the cause.

III.        Easton's Motion to Compel

[44]            Easton has categorized the outstanding refusals into the following five (5) categories which I shall adopt and follow for the purpose of adjudicating on them:

1.          questions alleged to relate to prior art;

2.          questions alleged to relate to prior public disclosure;

3.          questions alleged to relate to the disclosure in the specification and the prosecution of the patent;

4.          questions alleged to relate to commercial success; and

5.          questions alleged to relate to utility and/or commercial success.

Category 1

[45]            Question R-30 shall be answered since it goes to the prior art and since I am not satisfied that Bauer has evidenced that to locate the model under dispute would be an onerous, unreasonable and unnecessary task (an "OUU task").

[46]            Question R-31 shall be answered since it might assist Easton in establishing a link between the boot and shoe industry versus the skate industry.

[47]            Question R-32 shall be answered - as posed - since it is relevant and the answer provided so far by Bauer is not responsive.

[48]            Question R-33 has now been sufficiently answered by Bauer subject to proper follow-up questions by Easton.

[49]            Question R-38 shall be answered because although the '953 patent is not restricted to any particular material, it deals nevertheless with the use of quarter material and Easton's attempt is to establish at the end of the day that no distinction can be drawn between the prior art quarter material and the later quarter material.

[50]            Question R-41 calls for the same reasoning as for R-38. In addition I am not satisfied that Bauer has established in evidence that this question involves an OUU task.

Category 2

[51]            As for Question R-52, although a debate can be entertained as to whether Easton has mischaracterized the question, Bauer shall nevertheless answer this question in terms of testing to the end of August 1997 by anyone.

[52]            Question R-55 shall be answered since it is not at all certain that disclosure to printers cannot amount to public disclosure, the issue which this question goes to.

[53]            Question R-71 shall be answered for all the invalidity issues identified by Easton in its motion material which are all in dispute between the parties.

[54]            Question R-72 shall be answered as it goes to the validity of the patent in suit, and Bauer has not evidenced satisfactorily that it constitutes an OUU task. Question R-72 is not, in addition overly broad.

Category 3

[55]            As for Question R-28, I am satisfied that said question calls for the inventor's file for the Vapor project only. Since Easton has been granted leave to examine the inventor, the question is relevant and shall be answered. How far shall an inventor be probed is a different matter not before us.

[56]            Question R-29 is too broad and shall not be answered. The same reasoning applies to question R-34.

[57]            As for Question R-43(a), Bauer has undertaken to answer the second part of the question as requested by Easton.

[58]            Question R-45 need not be answered further.

[59]            Question R-56 in its second part shall be answered as it could turn out to be material to the issues of lack of inventiveness and misleading statements. The same reasoning applies to Questions R-59 and R-60.

[60]            As for Question R-57, Bauer has undertaken to answer the parts that were unanswered.

[61]            Question R-65 shall be answered as I agree that Easton deserves to see where exactly the hot press extends on the relevant pieces. Question R-73 shall be answered as well since it was not evidenced as a task the value of which would be outweighed by the trouble of undertaking it.

[62]            Question R-66 has been sufficiently answered.

[63]            Question R-77 shall be answered.

[64]            Question R-78 shall be answered for the reasons expressed in paragraph 64 of Easton's Written Representations. Question R-78 does not fall in the privileged area of solicitor-client communications.

[65]            Question R-82 shall be answered as it goes to the issues of inventiveness and the alleged misleading nature of the patent.

Category 4

[66]            Question R-63 shall now be answered.

Category 5

[67]            Question R-67 shall be answered the way Bauer suggested in paragraph 36 of its Written Representations in response.

[68]            Consequently, under the schedule found in paragraph 70, infra, the representative of Bauer shall re-attend a further examination for discovery at his own expense to answer all questions ordered herein to be answered, and to answer also all proper follow-up questions arising from the questions ordered to be answered.

[69]            Costs on this motion shall be in the cause.

IV.        Schedule to be adhered to

[70]            In the future, the parties shall govern themselves in accordance with the following schedule which supersedes the one found in the Order of this Court dated April 8, 2005:

1.          By December 15, 2005, the parties shall have completed any follow-up examinations for discovery which may be necessary, and the examination of the inventor;

2.          By February 28, 2006, the parties shall have provided answers to any and all undertakings taken by their respective representatives in the course of the examinations for discovery held in accordance with paragraphe 1 above;

3.          By March 31, 2006, the parties shall have held settlement discussions according to Rule 257 of the Federal Courts Rules and Bauer shall have served and filed a Request for Pre-trial Conference as well as a Pre-trial Conference Memorandum;

4.          By April 28, 2006, Easton shall have served and filed its own Pre-trial Conference Memorandum.

[71]            For greater certainty, the parties' motions are otherwise dismissed.

                                     FEDERAL COURT

                              SOLICITORS OF RECORD

DOCKET:

STYLE OF CAUSE:

T-237-02

BAUER NIKE HOCKEY INC.

                                                                            Plaintiff

                                           (Defendant by Counterclaim)

and

EASTON SPORTS CANADA INC.

                                                                        Defendant

                                                (Plaintiff by Counterclaim)

PLACE OF HEARING:                              Montréal, Quebec

DATE OF HEARING:                                June 21, 2005

REASONS FOR ORDER:                        RICHARD MORNEAU, ESQ., PROTHONOTARY

DATE OF REASONS FOR ORDER:       July 21, 2005

APPEARANCES:

SOLICITORS OF RECORD: