Date: 20080417
Docket: A-468-06
Citation: 2008 FCA
143
CORAM: LÉTOURNEAU J.A.
SHARLOW J.A.
TRUDEL J.A.
BETWEEN:
GRK CANADA LIMITED
Applicant
and
LELAND INDUSTRIES INC.,
INFASCO DIVISION OF IFASTGROUP AND
COMPANY LP, ARROW FASTENERS LTD.,
CANADIAN FASTENERS
IMPORTERS COALITION, SHANGHAI BEN YUAN
METAL PRODUCTS CO.,
LTD., STAR STAINLESS SCREW CO.,
BOMBARDIER RECREATIONAL
PRODUCTS INC., ITW CONSTRUCTION PRODUCTS,
CANADIAN TIRE
CORPORATION, LIMITED, FLEETWOOD CANADA
LTD., THE
GOVERNMENT OF THE PEOPLE’S REPUBLIC OF CHINA, GOVERNMENT
OF TAIWAN, VELAN INC., DIRECT FASTENERS, WESTLAND STEEL
PRODUCTS LTD., TONG HWEI ENTERPRISE CO.
LTD., FULLER METRIC
PARTS LTD., ENDRIES INTERNATIONAL OF CANADA, NATIONAL
SOCKET SCREW, HILTI (CANADA) CORPORATION, VISQUÉ INC.
Respondents
Heard at Toronto, Ontario, on April 15, 2008.
Judgment delivered at Toronto, Ontario,
on April 17, 2008.
REASONS
FOR JUDGMENT BY: SHARLOW
J.A.
CONCURRED
IN BY: LÉTOURNEAU
J.A.
TRUDEL
J.A.
Date: 20080417
Docket: A-468-06
Citation: 2008 FCA 143
CORAM: LÉTOURNEAU
J.A.
SHARLOW
J.A.
TRUDEL
J.A.
BETWEEN:
GRK CANADA LIMITED
Applicant
and
LELAND INDUSTRIES INC., INFASCO DIVISION
OF IFASTGROUP AND
COMPANY LP, ARROW FASTENERS LTD.,
CANADIAN FASTENERS
IMPORTERS COALITION, SHANGHAI BEN YUAN
METAL PRODUCTS CO.,
LTD., STAR STAINLESS SCREW CO., BOMBARDIER RECREATIONAL
PRODUCTS INC., ITW CONSTRUCTION PRODUCTS,
CANADIAN TIRE
CORPORATION, LIMITED, FLEETWOOD CANADA
LTD., THE
GOVERNMENT OF THE PEOPLE’S REPUBLIC OF CHINA, GOVERNMENT
OF TAIWAN, VELAN INC., DIRECT FASTENERS, WESTLAND STEEL
PRODUCTS LTD., TONG HWEI ENTERPRISE CO.
LTD., FULLER METRIC
PARTS LTD., ENDRIES INTERNATIONAL OF CANADA, NATIONAL
SOCKET SCREW, HILTI (CANADA) CORPORATION, VISQUÉ INC.
Respondents
REASONS FOR JUDGMENT
SHARLOW J.A.
[1]
This is an
application by GRK Canada Limited (“GRK”) for judicial review of a decision of
the Canadian International Trade Tribunal (CITT) dated September 26, 2006
(Inquiry No. NQ-2004-005R, “Certain Fasteners”). That decision is the result of
a reconsideration ordered by this Court in GRK Fasteners v. Leland
Industries Inc., 2006 FCA 118 (GRK No. 1).
[2]
In GRK No.
1, this Court considered and dismissed a number of grounds of judicial review
of the CITT’s first decision in this matter. However, GRK (then called GRK
Fasteners) had also alleged in that proceeding that the CITT had unreasonably
refused to grant GRK an exclusion for its patented stainless steel screws and its
patented carbon steel screws. GRK argued that its request for exclusion should
have been granted on the basis that, because its stainless steel screws and
carbon steel screws were patented, no domestic producer had the capacity or
right to produce identical screws without a license.
[3]
This Court
agreed that the CITT had erred in failing to adequately consider the arguments
of GRK on this point. The following appears in paragraph 29 of the reasons in
GRK No. 1:
. . . The application of
[GRK] Fasteners should be allowed in part, the decision of the Tribunal relative
to GRK’s exclusion request for certain patented stainless steel screws should
be set aside and the matter remitted to the Tribunal for redetermination with
the existing record.
[4]
The
judgment in GRK No. 1 reads as follows:
The application is allowed in part with no costs, and the
decision of the Tribunal with respect to the exclusion of the patented products
is referred back to the Tribunal for redetermination in accordance with the
reasons of the Court.
[5]
It is not
clear why paragraph 29 of the reasons in GRK No. 1 refers to patented stainless
steel screws only, and does not mention patented carbon steel screws. However,
that is a question that is not properly before this Court.
[6]
On March
24, 2006, counsel for GRK Fasteners (not its current counsel) wrote a letter to
the Court requesting that paragraph 23 of the reasons be corrected to
reflect the fact that GRK had submitted to this Court that it requested the
CITT to grant an exclusion for its patented carbon steel screws as well as its patented
stainless steel screws. It was in paragraph 23 that the Court summarized the
argument of GRK relating to its patents. The specific correction requested by
GRK’s former counsel was “to insert the words ‘and carbon steel’ in the second
sentence of paragraph 23 of its Reasons following the words ‘stainless steel’ ”.
[7]
The letter
indicates that a copy had been sent to counsel for the respondent Leland
Industries Inc. (“Leland”). Counsel for Leland sent nothing to the Court in
response to the letter.
[8]
GRK did
not file a notice of motion to formalize its request for a correction.
Nevertheless, the Court made the correction to paragraph 23 of the reasons as
requested by GRK’s former counsel. Paragraph 23, as corrected, reads as follows
(the added words are underlined):
[23]
In this argument GRK alleges that the foregoing procedural deviations led to
unsupportable factual findings on the part of the Tribunal. These alleged
errors of fact are said to include the denial of its request for exclusion of
certain patented stainless steel and carbon steel screws and its finding
of a threat of injury to domestic industry because of dumped stainless steel
screws.
[9]
There was
no request to correct paragraph 29 of the reasons, or to correct the judgment.
[10]
In a
letter to the CITT dated May 5, 2006, former counsel for GRK brought the
corrected reasons in GRK No. 1 to the attention of the CITT and requested that
the CITT redetermine GRK’s exclusion request in accordance with the corrected
reasons.
[11]
The CITT
rendered its reconsideration decision on September 26, 2006. Upon the
reconsideration the CITT, relying on the judgment in GRK No. l and paragraph 29
of the reasons, interpreted the direction of this Court as a direction to
reconsider GRK’s submissions only in relation to its patented stainless steel
screws.
[12]
In this
application for judicial review, GRK argues that the CITT erred in failing to
decide the whole issue remitted by this Court. That argument is premised on the
view of GRK that the corrected reasons in GRK No, 1 make it clear that this
Court considered both patented stainless steel screws and patented carbon steel
screws to be included in the case to be reconsidered.
[13]
I am
unable to accept GRK’s argument on this point. In my view, the CITT was
reasonable in relying on the judgment, together with paragraph 29 of the
reasons (which was unchanged by the corrections referred to above), as
establishing the scope of the case to be reconsidered.
[14]
I note
that in the letter of March 24, 2006, which requested the corrections to
paragraph 23 of the reasons in GRK No. 1, former counsel for GRK expressed the
view that the requested correction “would rectify the inadvertent mistake in
the Court’s Reasons and, in turn, Judgment”. He obviously thought that a change
to paragraph 23 would have the effect of changing the judgment and the
conclusion stated in paragraph 29 of the reasons. It is not clear why he
thought so but in any event, the fact that he made that statement in the March
24, 2006 letter did not compel the CITT or this Court to agree with his
understanding of the effect of the correction. The fact that counsel for Leland
did not respond to the request for the correction does not support the
inference that Leland agreed with the understanding of GRK’s former counsel as
to the effect of the correction.
[15]
GRK also argues
that the CITT erred in failing to consider de novo all of the material
in its original record that was relevant to its exclusion request. GRK argues
that if the CITT had looked at all of the relevant material, it would not have refused
the requested exclusion, primarily because GRK’s patented stainless steel
screws were sold at such a high price compared to all other stainless steel
screws sold in Canada, and because approximately 98% of GRK’s products were
exported to the United States.
[16]
In my
view, the only issue before the CITT on the reconsideration was whether the mere
existence of the patents was a sufficient basis for granting GRK’s exclusion
request. That was the argument that was put to this Court in GRK No. 1, and it
was the failure of the CITT to consider that question that caused this Court to
remit that aspect of the case to the CITT for reconsideration.
[17]
I agree
with the submission of Leland that most of the arguments of GRK on the merits
of the CITT’s reconsideration decision are really an attempt to relitigate
points that were determined in GRK No. 1 in Leland’s favour, in particular the
finding of injury. The reconsideration was not intended to revisit the question
of injury. It was intended to address only the question of whether the denial
of GRK’s request for exclusion should be permitted to stand given the CITT’s
initial failure to properly consider GRK’s request for an exclusion for its
patented stainless steel screws because they are patented.
[18]
On that limited
question, the CITT concluded the fact that an imported product is patented does
not automatically justify an exclusion. The reason for that conclusion is
stated as follows in paragraphs 17 and 18 of the CITT’s reconsideration
decision:
17.
[…] Even
though an imported patented product may have certain features or physical
attributes that make it distinct under patent law, a domestically manufactured
product may have the same end uses, fulfil most of the same customer needs and
compete in the same marketplace with the patented product. Therefore, even if a
request for a product exclusion concerns a patented product, the Tribunal still
needs to determine whether the circumstances of the case are such that granting
the exclusion could cause or threaten to cause injury to the domestic injury.
[…]
18.
Accordingly,
the key question that must be answered by the Tribunal in deciding whether to
grant a product exclusion in the case of a patented product is not whether the
patented product is unique or if the domestic industry can, without infringing
patent law, manufacture this product. Rather, it is whether the domestic
industry manufactures or is capable of manufacturing a substitutable product
that, while it may not have all the attributes of the patented product, still
competes with the patented product and fulfils most of the same customer needs.
If these conditions are met, the Tribunal should deny the request for product
exclusions, as granting it is likely to lead to injury or threat of injury to
the domestic industry.
[19]
After
stating the relevant principle, the CITT applied that principle on the basis of
the evidence it considered relevant, including the evidence of Leland as to its
capacity to produce stainless steel screws in the same size and ranges as GRK’s
patented stainless steel screws, and in a wide variety of head styles and in
imperial and metric sizes. The CITT was not satisfied that the patented
stainless steel screws for which GRK was seeking an exclusion were so
specialized or served such distinct markets that they did not compete with the products
of domestic producers.
[20]
In my
view, given the question that was properly before the CITT, its analysis and conclusions
on this point are reasonable. I can detect no error of law or any other error
that warrants the intervention of this Court.
Conclusion
[21]
I would
dismiss this application for judicial review with costs.
“K. Sharlow”
“I
agree
Gilles
Létourneau J.A.”
“I
agree
Johanne
Trudel J.A.”
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