Date: 20100608
Docket: T-444-08
Citation: 2010 FC 618
BETWEEN:
PEERLESS
LIMITED
Plaintiff
and
ASPEN CUSTOM TRAILERS INC. and
ASPEN TRAILER
COMPANY LTD.
Defendants
ASSESSMENT OF COSTS – REASONS
Charles
E. Stinson
Assessment Officer
[1]
The
Plaintiff commenced this action on March 18, 2008, for patent infringement
(suspension system for heavy-haul trailers). A Statement of Defence and
Counterclaim was filed on June 19, 2008. The Plaintiff filed a Reply and
Defence to Counterclaim on July 15, 2008. The Defendants’ motion for
particulars was dismissed on August 19, 2008 with costs in the cause. The
Plaintiff discontinued its action on March 4, 2009. The Defendants presented
their bill of costs for assessment further to Rule 402 which provides that
unless “otherwise ordered by the Court…, a party against whom an
action…has been discontinued…is entitled to costs forthwith, which may be
assessed….” I issued a timetable for written disposition of the assessment of
the Defendants’ bill of costs.
[2]
The
Plaintiff requested an adjournment on the basis that the counterclaim was
ongoing and it was therefore premature to determine costs on only a portion of
this proceeding. Although the Plaintiff discontinued the main action, the
Defendants refused to discontinue their counterclaim to invalidate the asserted
patent. The Defendants did not take the Plaintiff’s offer of full written
release of all liability. The Plaintiff dedicated the patent to the public,
notice of said dedication having been published in the October 20, 2009 issue
of the Canadian Patent Office Record. The Plaintiff argued that it would be
more efficient for the Court and the parties to await disposition of the
counterclaim so that all issues of costs could be addressed in a single
assessment of costs.
[3]
The
Defendants argued that an adjournment would defeat the forthwith provision of
Rule 402 entitling them to proceed immediately. As well, Rule 190 provides
that a counterclaim survives independently of the main action. The counterclaim
here was in its early stages, examinations for discovery not yet having
occurred. It has been held that an assessment officer is not the Court for the
purpose of ordering an adjournment under Rule 402: para. 9 of Cape Cod
Fishing Co. v. Canada (Minister of Fisheries and Oceans), [2008] F.C.J. No.
1383 (A.O.) [Cape Cod Fishing]. The Plaintiff’s
asserted bases for adjournment, i.e. efficiency and patent dedication, are
irrelevant.
[4]
On
February 11, 2010, I issued directions stating that I was “very aware of the
potential issues of assessments of costs associated with a main action and a
counterclaim in intellectual property litigation”, that “the Plaintiff’s
submission that an adjournment pending disposition of the counterclaim is
compelling and well reasoned: see Halford v. Seed Hawk Inc. (2009) 69
C.P.R. (4th) 1, [2006] F.C.J. No. 629 (A.O.)” [Halford], that
“the Defendants are correct that an assessment officer does not fall within the
definition of ‘Court’”, that as “the Defendants do not agree to an adjournment
within the exception provided in Rule 402”, I could not “ignore or set aside
the ‘forthwith’ provision in said Rule” and that I found “in these
circumstances that the assertion of efficiency of process is not
sufficient to warrant an adjournment.” Accordingly, I adjusted the timetable to
permit both sides to perfect materials on the assessment of costs of the main
action.
I. Counsel Fees: Item
2 (preparation of statement of defence and counterclaim claimed at 6 units /
available range = 4-7 units; hereafter, the numbers following the description
of the fee item represent the available Column III range of units in the
Tariff); item 5 (preparation of Defendants’ contested motion for particulars
claimed at 5 units / 3-7 units); item 6 (appearance on motion claimed at 2
units per hour / 1-3 units per hour); item 7 (discovery of documents including
listing, affidavit and inspection claimed at 4 units / 2-5 units); item 25
(services after judgment claimed at 1 unit / 1 unit); item 26 (assessment
of costs claimed at 4 units / 2-6 units) and item 27 (such other services as
the assessment officer may allow claimed at 3 units for consultation with
expert witnesses / 1-3 units); double fees claimed for items 5, 6, 7, 25, 26
and 27 further to Rule 420(2)(b).
A. The
Defendants’ Position on Counsel Fees
[5]
Rule
420(2)(b) provides that if “the plaintiff fails to obtain judgment, the
defendant is entitled to party-and-party costs to the date of service of the
offer and to costs calculated at double that rate, but not double
disbursements, from that date to the date of judgment.” The Defendants made
this settlement offer on June 9, 2008:
...
As you know, and on grounds already
discussed, should this action proceed, the Defendants intend to assert a
counterclaim for invalidity of the patent in issue.
The Defendant offers to settle this
action on the following terms:
1. The action and the
counterclaim will be dismissed without costs.
2. Peerless undertakes not
to pursue Aspen, its related entities, or their customers, for infringement of
the ‘741 patent or any other Canadian or U.S. patent based on the same disclosure.
3. Aspen undertakes not to challenge or assist
others in challenging the validity of the ‘741 patent or any other Canadian or U.S. patent based on the same disclosure.
4. Peerless shall pay to
Aspen the following sum by way of combined compensation for costs, for the
dismissal of the counterclaim and the undertaking in item 3:
a) If this offer is
accepted before the delivery of a Statement of Defence and Counterclaim,
$20,000;
b) If this offer is accepted
after the delivery of a Statement of Defence and Counterclaim but before
the delivery of affidavits of documents by each of the parties, $40,000;
c) If this offer is
accepted after the delivery of affidavits of documents by each of the
parties but before the commencement of the first examination for discovery,
$60,000;
d) If this offer is accepted
after the commencement of the first examination for discovery but before the
commencement of the pre-trial conference, $80,000;
e) If this offer is
accepted after the commencement of the pre-trial conference but before the
first minute after the commencement of the trial, $140,000.
The offer shall remain open for
acceptance despite any intervening offers, unless expressly revoked in writing.
The Defendants did not revoke it. The
Plaintiff did not formally respond to it. Paragraph 17 of Early Recovered
Resources Inc. v. Gulf Log Salvage Co-Operative Association, [2001] F.C.J.
No. 1666 (A.O.) held that this phrase in Rule 420(2)(b) – plaintiff
fails to obtain judgment – “is not restrictive in that it does not, on a plain
reading, preclude a discontinuance from triggering double costs.”
[6]
The
Defendants noted the Plaintiff’s assertion that discoveries confirmed the
Defendants’ allegation that prior disclosure had invalidated the patent. Said
assertion failed to mention that several years before the patent issued, the
Defendants had provided the Plaintiff with full particulars of the prior
disclosure, including relevant technical drawings, and had put the Plaintiff on
notice of the invalidating effect of the disclosure. However, the Plaintiff
still commenced this action and must therefore bear the associated Rule 420(2)(b)
consequences of double costs. As the Plaintiff acknowledged, Rule 420(2)(b)
does not contemplate a comparison of a settlement offer with a judgment, which
would be illogical given a discontinuance precludes any judgment, and instead
requires only a written offer followed by a failure to obtain judgment.
[7]
The
Defendants argued that the settlement offer was a genuine attempt at compromise
because it ensured that the Plaintiff’s patent would remain in force to be
asserted against others. The unilateral dedication of the patent to the
public is irrelevant for this assessment of costs because it occurred well
after the settlement offer. The reference in the offer to possible U.S. patents
does not preclude the effect of Rule 420(2)(b) because jurisprudence
such as M.K. Plastics Corporation v. Plasticair Inc, [2007] F.C.J. No.
1348 (F.C.) held that the double costs rule is triggered if the offer is clear
and unequivocal in that the opposite party need only decide whether to accept
or reject it, it contains an element of compromise, it is presented in a timely
fashion and it brings the dispute between the parties to an end. The reference
to U.S. patents,
although moot because there are not any, ensured complete resolution between
the parties. As paragraph 9 of Cape Cod Fishing held that an assessment
officer is not the “Court”, the former cannot exercise the otherwise provision
of Rule 420(2) to deviate from the double costs provision of Rule 420(2)(b).
The Defendants emphasized that costs subsequent to the discontinuance are not
claimed in the bill of costs.
[8]
The
Defendants argued, in response to the Plaintiff’s position that consultations
with expert witnesses as an ordinary part of litigation are not specified in
the Tariff, that just as the Tariff recognizes and has fee items for essential
services in the course of litigation such as pleadings, discovery of documents,
examinations for discovery etc., fee item 27 should address an essential part
of the defence in a patent infringement action, i.e. work with expert
witnesses.
B. The
Plaintiff’s Position on Counsel Fees
[9]
The
Plaintiff noted that it first disclosed its invention to the public on
September 13, 2001 upon the sale of a trailer incorporating the patented
suspension system in Canada. The Patent Act, R.S.C. 1985, c.
P-4 as amended, provided a grace period of one year to file for a patent, which
the Plaintiff did on September 10, 2002. In January 2002, the Defendant sold a
trailer with the subject suspension and therefore had disclosed the invention
to the public prior to the Canadian filing date of the patent.
[10]
The
Plaintiff referred to the Patent Act:
… 28.2(1) The subject
matter defined by a claim in an application for a patent in Canada (the “pending application”)
must not have been disclosed:
(a) more than one year
before the filing date by the applicant or by a person who obtained knowledge
directly or indirectly from the applicant in such a manner that the subject
matter became available to the public in Canada or elsewhere;
(b) before the claim
date by a person not mentioned in paragraph (a) in such a manner that the
subject matter became available to the public in Canada or elsewhere;…
and noted the Defendants had relied on
section 28(1)(b) to allege the patent was invalid due to their
disclosure of the invention prior to the claim or application date. The
Plaintiff’s Reply asserted that the “knowledge” referenced in s. 28.2(1)(a)
did not require that the Defendants had derived the invention or were “taught”
it by the Plaintiff’s disclosure as occurred under the old first-to-invent
system. Instead, the Plaintiff asserted, to its knowledge a novel argument in
law, that to give meaning to the one-year grace period to file, any knowledge
acquired by the Defendants of the Plaintiff’s disclosure before they themselves
disclosed the invention would have required their disclosure to be more than
one year before the actual filing date to invalidate. The Plaintiff’s theory
required that it be able to demonstrate knowledge by the Defendants of the
Plaintiff’s disclosure of the invention prior to the Defendants’ public
disclosure thereof.
[11]
The
Plaintiff initially felt there was evidence that representatives of the
Defendants had examined its earliest trailer demonstrating the invention, but
after the Defendants’ production of documents, no such evidence was found. The
Defendants then rebuffed overtures to settle. Having learned that the
Defendants would advance a summary judgment motion once their expert testimony
was amassed, the Plaintiff unilaterally discontinued the main action and
subsequently dedicated its patent to the public thereby leaving the
counterclaim for a declaration of invalidity active but moot.
[12]
The
Plaintiff argued that the settlement offer was not straightforward requiring as
it did that the Plaintiff not pursue patent litigation. This put it
outside the parameters of Rule 420(2)(b). Acceptance at the time of the
offer would have required the Plaintiff to pay $20,000 in costs, an amount
considerably more than that actually incurred according to the claimed
disbursements.
[13]
The
Plaintiff argued that Rule 420(2) does not expressly contemplate more or less
favourable outcomes as do the other provisions of Rule 420. The discontinuance
with its associated costs consequences was much more advantageous to the
Plaintiff than accepting the settlement offer. The Court should, further to a
test of reasonableness, override Rule 420(2)(b) in these circumstances
of an unrealistic and disproportionate settlement offer. The Court has found,
i.e. McCain Foods Ltd. v. CM McLean Limited, [1981] 1 F.C. 534 (F.C.A.)
that a party who promptly discontinues an action when it becomes apparent that
it has little chance of success should not be discouraged from doing so by an
apprehension of onerous costs. The Plaintiff has thus acted reasonably, but the
Defendants have not in asserting a counterclaim rendered moot by the public
dedication of the patent.
C. Assessment
of Counsel Fees
[14]
I
concluded in paragraph 7 of Starlight v. Canada, [2001] F.C.J. No. 1376
(A.O.) that the same point in the ranges throughout the Tariff need not be used
as each fee item for the services of counsel is discrete and must be
considered in its own circumstances. As well, broad distinctions may be
required between an upper versus lower allowance from available ranges.
[15]
The
Defendants claimed in the middle to upper available ranges, which I find
reasonable and allow as presented, except for fee item 27. The Plaintiff’s
submissions requested that I reserve on fee item 26 pending possible settlement
of costs between the parties, but as there has not been anything further on
that, I allow fee item 26 as presented.
[16]
The
time taken with preparation of experts is often subsumed in fee item 13
(preparation for trial) and in the case of Notice of Compliance matters in
fee items 1 or 2 (Applicant’s and Respondents’ records respectively). I am not
persuaded that the circumstances here warrant departure from that practice. I
think that assessable work did occur. I allow fee item 13(a) at the minimum 2
units, instead of fee item 27.
[17]
My
findings in Halford above required an awareness of the distinction
between a main action and a counterclaim in circumstances of costs awarded in
one but not the other. I kept that in mind in my allowances here given
that there has been no award of or right to costs of the counterclaim.
[18]
I
am not the “Court” as that term is used in Rule 420(2): see Sander Holdings
Ltd. v. Canada (Minister of Agriculture), [2009]
F.C.J. No. 720 (A.O.) and Marshall v. Canada, [2006] F.C.J. No. 1282
(A.O.). Therefore, I cannot exercise the otherwise jurisdiction of the Court in
Rule 420(2) to negate or vary its application.
[19]
Paragraphs
14 to 16 inclusive of Biovail Corp. v. Canada (Minister of
National Health and Welfare), 61 C.P.R. (4th) 33, [2007] F.C.J.
No. 1018 (A.O.) [Biovail], aff’d (2008), 64 C.P.R. (4th) 475,
[2008] F.C.J. No. 342 (F.C.) outlined my concerns with Rule 420 in certain
circumstances. I doubt that the potential costs ($2,470 based on the
claimed fees before assessment, i.e. 19 units x $130 per unit) available to the
Defendants further to Rule 420 doubling were an incentive for the Plaintiff to
seriously consider the settlement offer. As this matter did not get set down
for trial, the $2,470 could be compared to the $80,000 figure in the settlement
offer. As in Biovail above, I find that the settlement offer meets the
technical parameters of Rule 420(2)(b) and I therefore allow the
doubling of assessed fee items 5, 6, 7 and 13(a). As the work for fee items 25
and 26 would occur after a judgment, Rule 420(2) doubling cannot be applied to
them. I allow fee item 25 above in these circumstances of a discontinuance
because I think that counsel would have to brief the client on its implications
just as a client would be briefed on the implication of a judgment further to a
trial. The Defendants inadvertently claimed GST and PST on the doubled
portion of fees. As costs are an indemnity and the Defendants would not have
been out of pocket for GST and PST on the doubled portion of fees per Rule
420(2)(b), they cannot claim GST and PST on fees because costs are not a
windfall or source of profit.
II. Disbursements: Photocopies
at $0.25 per page ($160); Binding of motion record ($30.19); Filing of
Statement of Defence and Counterclaim ($17.85); Facsimiles ($72); Online
searches ($633.62); Couriers ($119); Long distance phone ($298.84); Return
airfare same day Vancouver-Edmonton April 1, 2008 by supervising counsel to
inspect the suspension systems at issue ($287); May 13, 2008 for settlement
meeting ($381.50) and January 27, 2009 to meet with the Defendants’ two experts
and to examine and disassemble a prior art trailer ($314.30); Patent validity
search by agent ($1,174.64); Legal opinion by Oyen Wiggs Green &
Mutala LLP ($4,434.82) and expert witness fees of Gary Teichrob ($7,369.56) and
Duncan Cook ($1,600)
A. The
Defendants’ Position on Disbursements
[20]
The
Defendants asserted that they should not be penalized because their solicitor
of record does not have an in-house binding system as in larger law firms. The
various disbursements for facsimiles, computer research, couriers and long
distance were confirmed by evidence and are reasonable given that opposing
counsel practice in Ottawa and Vancouver respectively.
[21]
The
Defendants argued in support of the April 1, 2008 trip that although
photographs of various components of the suspension system might have been
available, they would have been by their nature impractical for full analysis
of the workings of a sophisticated suspension system relative to the merits of
the Plaintiff’s case. As for the May 13, 2008 meeting, the Plaintiff did not
give any reason for objecting to it other than it related to settlement. This
reasonable expense should be allowed given that settlement discussions are a
mandatory requirement within 60 days of the close of pleadings per Rule 257.
[22]
The
Defendants argued that the novel interpretation of the Patent Act, s.
28.2(1)(b) advanced by the Plaintiff necessitated the independent legal
opinion from the law firm of Oyen, Wiggs & Mutala LLP [Oyen]. The
Defendants argued that they necessarily incurred consulting fees and related
expenses for potential expert witnesses, rendered unnecessary by the
Plaintiff’s unilateral discontinuance but which, as the Plaintiff acknowledged,
are essential and accepted components of patent litigation involving
claims construction. The assessment officer in Mercury Launch & Tug Ltd.
v. Texada Quarrying Ltd., [2009] F.C.J. No. 390 (A.O.) [Mercury Launch]
allowed witness fees for an expert not called at trial. Here, the expert
evidence assembled by the Defendants was a factor in the Plaintiff’s early
decision to discontinue and would have been essential at trial. The retention
of two experts in patent matters is simply good practice.
B. The
Plaintiff’s Position on Disbursements
[23]
The
Plaintiff conceded photocopies and the January 27, 2009 trip. The Plaintiff
argued that it should not have to pay for the Defendants’ choice to use a third
party for binding, a service ordinarily part of a solicitor’s overhead. The
same argument applies to the agent fee for the filing of the Statement of
Defence and Counterclaim. The charge for facsimiles should be disallowed given
the absence of evidence of details and unit cost per facsimile. Similarly,
there is no evidence supporting the costs of computer research and therefore
this charge should be disallowed or substantially reduced. The claim for
couriers should be disallowed or substantially reduced given the absence of
evidence of details and actual cost for each charge. Similarly, long distance
charges, a service ordinarily subsumed in a solicitor’s overhead, should be
disallowed or substantially reduced. The Plaintiff should not have to pay for
the Defendants’ use of a third party to search on validity, a service
ordinarily subsumed in counsel’s trial preparation.
[24]
The
Plaintiff argued that the April 1, 2008 trip was not reasonably necessary
because the components and nature of the suspension system in issue were
readily identifiable by photographs or drawings. The return airfare (May 13,
2008) for a without prejudice settlement meeting is inappropriate and should be
disallowed.
[25]
The
Plaintiff argued further to Asbjorn Horgard A/S v. Gibbs/Nortac Industries
Ltd. [1989] 1 F.C.R. D-32 (taxation dated 3/11/88 in Federal Court of
Appeal file A-304-86) (T.O.) that third party legal opinions are not assessable
as a disbursement because such services are subsumed in counsel’s trial
preparation. Further, the Oyen account does not break down the time or charges
for each service, all of which involve redundant research, i.e. the on-line
computer research claimed elsewhere. Litigants need not indemnify their
opponent’s lawyers to educate themselves on the law.
[26]
The
Plaintiff argued that there was no evidence of reasonable necessity for the
expert, Gary Teichrob. His charge should be disallowed or substantially
reduced given no proof of his credentials to justify his hourly rate ($250),
purpose, scope of his retainer and reasonableness of the 25.5 hours
charged. The charges of 4 hours to review the patent, 4.5 hours to review the
instructions from counsel and 12 hours to prepare for the disassembly of the
trailer are excessive. Similarly, the account of the expert, Duncan Cook,
should be disallowed or substantially reduced. In this instance of an
additional expert retained out of an excess of caution, one or both accounts
should be disallowed or substantially reduced.
C. Assessment
of Disbursements
[27]
My
findings in Halford above, Biovail above and Abbott
Laboratories v. Canada (Minister of Health) (2008), 66
C.P.R. (4th) 301, [2008] F.C.J. No. 870 (A.O.) [Abbott] set
out my views on the threshold of proof for categories of costs and approach to
their assessment. Paragraphs 68 to 72 inclusive of Abbott above
summarize the subjective elements and the notion of rough justice in
assessments of costs. In paragraphs 38 to 40 of Aventis Pharma Inc. v.
Apotex Inc., [2009] F.C.J. No. 56 (A.O.) [Aventis 2009], I
reinforced my view that an assessment of costs should reflect the reality of
the demands of litigation. Paragraph 14 of Merck & Co. v. Apotex Inc.
(2009), 73 C.P.R. (4th) 423, [2008] F.C.J. No. 1656 (F.C.A.) held
that “in view of the limited material available to assessment officers,
determining what expenses are “reasonable” is often likely to do no more than
rough justice between the parties and inevitably involves the exercise of a
substantial degree of discretion on the part of assessment officers.”
[28]
It
can be argued that items such as binding and computer research are services
purchased from a disinterested third party supplier and which can be directly
linked to or isolated with a particular litigant unlike items such as rental
payments for a law firm’s space which could be labelled an administrative
overhead cost not easily, if at all, directly linked to a specific litigant:
see para. 184 of Halford above for a brief discussion. I allow the
binding claim as presented.
[29]
I
endorse the practical approach in paragraph 69 of Merck & Co. v. Canada (Minister of
Health),
[2007] F.C.J. No. 428 (A.O.) aff’d on this point and others, but varied on
others [2007] F.C.J. No. 1337 (F.C.). There, the Assessment Officer asserted
that, having considered “the factors to advance litigation such as the case at
bar which includes the various city and country locations for many of its
expert witnesses, the efforts required to assemble and forward pertinent
information for the experts’ respective consideration, the various methods
required to have the pertinent material before the experts, researching
materials and evidence from various sources, the necessary meetings, preliminary
and follow-up phone calls and related correspondence”, he found reasonable and
allowed the disbursements claimed for “computer searches, computer time
charges, courier/postage, court reporter/transcripts, meetings, telephone
charges and telecopy charges” as part of the ordinary course of litigation.
This manner of rough justice does not however require an assessment officer to
approve any and all claimed items of costs without question. Disallowances or
reductions often occur. I have generally held that a paucity of evidence may
result in conservative allowances.
[30]
In
Greater Moncton International Airport Authority v.
Public Service Alliance of Canada, [2009]
F.C.J. No. 308 (A.O.), I considered the circumstances of a litigant instructing
counsel remote from the hearing venue. Section 15(1) of the Federal Courts
Act provides that the Court may sit any place in Canada. Paragraph 8
of Canada (A.G.) v.
Hennelly,
[1995] F.C.J. No. 320 (F.C.T.D.) indicated that the Court is itinerant. In Halford
v. Seed Hawk Inc., [2005] F.C.J. No. 600 (A.O.), the dispute over
venue of the assessment of costs occurred relative to litigation which had
unfolded over at least five cities and four provinces. These references are not
directly determinative of the issues before me, but I make them to illustrate
that the national elements of Federal Court practice require real expenditures
such as long distance tolls and travel. Paragraphs 104 and 135 of Halford
above reinforce this notion.
[31]
The
use of the agent, Dye & Durham Corporation, for filing of the Statement of
Defence and Counterclaim reflects common practice in the Lower Mainland. The
charges claimed were not so outrageous as to indicate that supervising counsel
did not subject them to close scrutiny as a filter for reasonableness and
clarity. I allow the associated charge ($17.85) as presented. I find the
charges of $72 and $298.84 respectively for facsimiles and long distance tolls
reasonable in the circumstances and allow them as presented. Paragraph 111 of Abbott
above outlined my usual concerns with computer research. The proof here was
less than absolute, i.e. para. 16 of the affidavit of Paul Smith sworn November
26, 2009 (the Smith Affidavit) asserting purpose as “accessing case law and
statutes” and “research and preparation.” I allow a reduced amount of $525. The
courier charges included service of documents between Vancouver and Ottawa, the
locations of the respective solicitors of record. I allow them as presented.
[32]
The
evidence in the Smith Affidavit supporting the agent search on patent validity
is essentially that it was done. The breakdown in the invoice ($1,174.64) is
labour ($765); office consultation ($70); patent copies ($81.50); computer
access time ($186.21); courier ($16) and GST ($55.93). The Defendants’
solicitor of record is an experienced intellectual property practitioner.
I am not certain that all or some of this work could not have been done by
supervising counsel. In litigation such as Notice of Compliance matters,
this work is essential, sometimes does require an out-of-town agent and usually
involves payment for copies of prior art. Part of my analysis below on the Oyen
opinion addresses charges which effectively sidestep the partial indemnity
limits of the Tariff. I allow a reduced amount of $775.
[33]
Paragraph
104 of Halford above and paragraph 38 of Mercury Launch above addressed
travel by supervising counsel to assess face to face the evidence of potential
witnesses. That was not the issue here, but I think that an assessment in
person of the suspension system in issue by supervising counsel in the company
of experts as opposed to attempting to do so by drawings or photographs should
receive comparable consideration. The evidence indicates that supervising
counsel flew to Edmonton and back on April 1, 2008, and did not charge
for ground transportation or meals. That was more than reasonable practice. I
allow the $287 claimed.
[34]
I
find it at odds with the scheme of the Rules requiring mandatory settlement
activity, i.e. Rules 257 and 258(2), to reject further to the Plaintiff’s
position a disbursement aligned with that philosophy. Again, as for the earlier
trip, supervising counsel flew to Edmonton and returned the same
day without claiming for ground transportation or meals. I allow the $381.50 as
claimed.
[35]
I
noted in paragraph 60 of Aventis 2009 above the limits in the Tariff on
counsel fees posed by the principle of partial indemnity relative to
a disbursement at a full solicitor-client rate for work assigned by the
supervising solicitor of record to an independent solicitor. I allowed such a disbursement
in paragraph 15 of Shields Fuels Inc. v. More Marine Ltd., 2010 FC 228
(A.O.) in the circumstances there of supervising counsel disbursing
$113.55 to an independent solicitor to execute an affidavit versus the
higher travel cost to bring the affiant to Vancouver. I found
based on the material available in the record in Aventis 2009 above
(paras. 60 to 68) that the subject there of Mr. Oyen’s expert
opinion, i.e. patent prosecution practice, warranted an allowance for him. The Court
in AstraZeneca AB v. Apotex Inc., [2007] F.C.J. No. 1125 (F.C.) held
that although his expert evidence was of no ultimate assistance and
ventured into areas reserved to the Court, a limited amount of $5,000
would be allowed for his fees because the other side chose to cross-examine
him. The Court has accepted him as an expert on patent prosecution practice and
deemed abandonment in cases such as Jannssen-Ortho Inc. v. Apotex Inc.,
[2008] F.C.J. No. 936 (F.C.).
[36]
Here,
I do not have material comparable to that in Aventis 2009 above for
analysis. There is an assertion in paragraph 23 of the Smith Affidavit
that the novelty of the interpretation of the Patent Act, s. 28.2(1)(b)
advanced in paragraphs 2 to 4 of the Plaintiff’s Reply and Defence to
Counterclaim made the Oyen opinion a necessity. The invoices indicate about
five days’ work plus some modest disbursements. Although I think this was very
likely a prudent disbursement to make with particular regard to the best possible
assistance to the Court in its disposition of the issues, I am not satisfied on
my reading of the record that this work fell outside the expertise of
supervising counsel, himself an experienced intellectual property practitioner.
I disallow the $4,434.82 claimed.
[37]
In
paragraph 41 of Mercury Launch above, I confirmed that costs for experts
not ultimately called at trial (apart from those clearly superfluous) are
assessable. I do not have here the extent of evidence in Mercury Launch
above or in the cases referred to therein. The evidence here in support of the
experts’ roles was essentially that they provided a technical resource for
supervising counsel. Although I do not have the range of materials such as
those found in Notice of Compliance (NOC) matters, I am satisfied that the
circumstances here permit recovery of costs for the experts. In Abbott
above, I addressed experts with similar mandates and did not restrict recovery
to a single expert as I think it prudent, as the Respondent, Apotex Inc.,
put it in paragraph 22 of Biovail above “to have some overlap in
expert testimony in case a given expert experiences difficulties in
cross-examinations and another expert must bolster the evidence.”
[38]
In
NOC matters such as Abbott above, Fournier Pharma Inc. v. Canada (Minister of
Health),
[2008] F.C.J. No. 1151 (A.O.), Aventis Pharma Inc. v. Apotex Inc.,
[2008] F.C.J. No. 1238 (A.O.) and Aventis 2009 above, I had access to
materials such as the Notice of Allegation, the respective memoranda of fact
and law and expert reports of the parties and the associated cross-examinations
of affiants and as well reasons for judgment after trial to gauge the effort
demanded of counsel and the appropriate amounts of counsel fees and
disbursements. The discontinuance here precluded such a range of materials.
[39]
Rule
190 provides that a counterclaim survives judgment in or discontinuance of the
main action. In paragraph 17 above, I noted the analysis in Halford of
the need for an awareness of costs of the main action versus those of the
counterclaim. I think that the Plaintiff’s submissions before me that the
Defendants’ assessed costs of the main action must be minimal given the
latter’s unreasonable prosecution of the counterclaim are misplaced in that
they should be directed to an exercise of the Court’s Rule 400(1)
jurisdiction for punitive costs after resolution of the counterclaim whether by
way of judgment or discontinuance.
[40]
Duncan
Cook’s invoice for 16 hours at $100 per hour for review of the patent,
attendance at the January 2009 disassembly of the prior art trailer and
drafting of his affidavit is reasonable on its face and I allow it as
presented.
[41]
Gary
Teichrob’s invoice broke down his 25.5 hours charged at $250 per hour as:
review patent December 2008 (4 hours); review instructions January 6, 2009 (4.5
hours); prepare for disassembly prior art trailer January 27, 2009 (1 hour);
further preparation for disassembly and review of claims chart (2.5 hours);
travel for and attendance at disassembly and evaluate patent claims (9 hours);
review claims chart and prepare opinion (1.5 hours); review materials provided
February 24, 2009 (1.5 hours) and complete all document filing (1.5 hours). In
the absence of evidence otherwise, the January 6, 2009 reference to
instructions could address one or both of the December 2008 patent review
or the January 2009 disassembly attendance, although it likely addressed the
latter. I reduce Mr. Teichrob’s account by 2.5 hours in the area of review of instructions,
but otherwise allow it as presented for a total of $6,713.31.
[42]
The
Defendants’ bill of costs for the main action, presented at $23,299.72, is
assessed and allowed at $16, 478.39.
“Charles
E. Stinson”
Vancouver, BC
June
8, 2010
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