Docket: A-352-23
Citation: 2024 FCA 205
CORAM:
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DE MONTIGNY C.J.
MACTAVISH J.A.
LEBLANC J.A.
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BETWEEN: |
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SEISMOTECH IP HOLDINGS INC. SEISMOTECH SAFETY SYSTEMS INC. |
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Appellants |
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and |
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ECOBEE TECHNOLOGIES ULC APPLE CANADA INC. APPLE INC. |
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Respondents |
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REASONS FOR JUDGMENT
LEBLANC J.A.
I. Introduction
[1] Before the Court is an appeal of an order of Grammond J. of the Federal Court (the Motion Judge) dated December 7, 2023 (2023 FC 1649) dismissing the appellants’ motion for a Norwich order (the Motion). The Motion was brought in relation to two simplified actions launched by the appellants against as of yet unidentified consumers who bought and installed smart thermostats in their homes, which, the appellants claim, infringe certain patents they own. The appellants allege that more than 75 brands and models of smart thermostats, made by Canadian (Federal Court file T-1147-23) and foreign (Federal Court file T-1148-23) manufacturers, infringe their patents. One of the Canadian manufacturers, Ecobee Technologies ULC (Ecobee), was granted party status as a defendant on October 5, 2023. Our Court confirmed that order on September 12, 2024 (2024 FCA 144).
[2] If granted, the requested Norwich order would have forced Apple Inc. and Apple Canada Inc. (Apple), which are non-party respondents to the Motion, to disclose the names and addresses of consumers who downloaded the app from the App Store that allegedly controls these devices. The appellants estimate that there are hundreds of thousands of these consumers.
[3] The Motion Judge dismissed the Motion on the ground that the appellants had failed to show that they have a bona fide claim against the unknown consumer defendants. As well, he was satisfied that the public interest did not favour granting the Motion. He held, in this respect, that granting the Motion would unjustly deprive the consumer defendants of meaningful access to justice given the inherent complexity of a patent infringement action and the practical impossibility for each individual consumer defendant to defend such an action.
[4] The appellants contend that the Motion Judge erred by impermissibly elevating the bona fide threshold to a prima facie standard, and by improperly drawing, in his analysis of that criterion, an adverse inference from their refusal to answer cross-examination questions about the inventor’s belief that the patents at issue were infringed, thereby violating the rules of procedural fairness. They also claim that the Motion Judge impermissibly extended the public interest factor beyond balancing the interest of intellectual property owners in ensuring that their statutory rights can be enforced against the privacy interests of the alleged infringers.
II. Norwich Orders
[5] A Norwich order is “a type of pre-trial discovery which, inter alia, allows a rights holder to identify wrongdoers”
(Rogers Communications Inc. v. Voltage Pictures, LLC, 2018 SCC 38 at para. 18 (Rogers), citing Alberta Treasury Branches v. Leahy, 2000 ABQB 575 at para. 59, aff’d 2002 ABCA 101 (Leahy)). As this Court stated in Glaxo Wellcome PLC v. M.N.R. (C.A.), [1998] 4 F.C. 439 (Glaxo), it is an equitable remedy of “ancient origin”
(also known as a bill of discovery) which received “renewed interest”
by the House of Lords in Norwich Pharmacal Co. v. Customs and Excise Comrs., [1974] A.C. 133 (H.L.) (Norwich Pharmacal) (Glaxo at paras. 20–21).
[6] In the Federal Court, a Norwich order can be sought pursuant to that Court’s equitable jurisdiction (Glaxo at para. 33), or pursuant to Rule 238 of the Federal Courts Rules, S.O.R./98-106 (the Rules) (BMG Canada Inc. v. John Doe, 2005 FCA 193 at para. 23 (BMG)). Whatever the source of the Federal Court’s authority, the test for the issuance of such an order is the same (BMG at paras. 30–36). This test requires the plaintiff to show that:
a)a bona fide claim exists against the alleged wrongdoer;
b)the person from whom discovery is sought is: (i) more than an innocent bystander, meaning that that person is in some way involved in the matter in dispute; (ii) the only practical source of information available to the plaintiff; and (iii) reasonably compensated for the expenses, including legal costs, arising out of compliance with the disclosure order; and
c)the balancing of the public interests for and against disclosure of the information sought from that person favours disclosure.
[7] Only the bona fide and public interest criteria are at issue in this appeal.
III. Standard of Review
[8] Norwich orders are discretionary orders (Glaxo at paras. 24, 34; BMG at para. 28; Prandi v. Salisbury, 2024 BCCA 57 at para. 26 (Prandi)). As such, they are entitled to a high degree of deference, meaning that the role of this Court on appeal is not to substitute its discretion for that of the Motion Judge (Glaxo at para. 34; Prandi at para. 26). Our role is rather to determine whether the Motion Judge correctly directed himself on the applicable law and if so, whether he made a palpable and overriding error in applying that law to the facts (Housen v. Nikolaisen, 2002 SCC 33 at paras. 8, 10 and 36 (Housen); Hospira Healthcare Corporation v. Kennedy Institute of Rheumatology, 2016 FCA 215 at para. 79; Prandi at para. 26).
IV. The Bona Fide Criterion
[9] As mentioned, the appellants’ contention here is two-fold. First, they submit that the Motion Judge erred in law by applying the prima facie standard. This, they say, is wrong because this Court, in BMG, held that the prima facie standard asked too much of a plaintiff seeking to identify alleged wrongdoers. The appellants claim that the bona fide criterion requires no evidence of infringement, only evidence linking the alleged wrongdoers to the alleged infringement. In other words, they assert that this criterion is not a “merit-based”
criterion.
[10] I cannot accept these submissions. First, it is clear that the Motion Judge correctly identified the bona fide standard as the applicable standard when he contrasted this “relatively low threshold”
to the “higher bar of a likelihood of success”
, often illustrated, he said, by the Latin expression “prima facie”
(Motion Judge’s Reasons at para. 14). The Motion Judge, quoting from BMG, was fully aware that in order to obtain a Norwich order, a plaintiff “need not show that the claim is likely to succeed”
(Motion Judge’s Reasons at para. 14).
[11] The real issue here has to do with what exactly the low threshold associated with the bona fide criterion exactly means for a Norwich petitioner. The Motion Judge, relying on Glaxo, opined that this threshold was “intended to ensure that actions for a bill of discovery are not brought frivolously or without justification”
(Motion Judge’s Reasons at para. 14, citing Glaxo at para. 24). The appellants, relying on BMG, claim that to the extent this interpretation requires some merit-based analysis of the claim against the alleged wrongdoer, it is ill founded in law.
[12] With respect, I find the appellants’ argument unpersuasive. Key to the actual scope of the bona fide criterion is, in my view, this Court’s decision in Glaxo. Glaxo dealt with the “particularly novel issue”
of whether the equitable remedy of a bill of discovery was available in the Federal Court (Trial Division at the time) (Glaxo at para. 20). In answering that question, the Court provided a detailed review of Norwich Pharmacal. As noted, it concluded that the bona fide criterion required the Norwich petitioner to show that the underlying action to the Norwich motion was neither frivolous nor brought without any justification (Glaxo at para. 24). Later in its reasons, the Court equated that criterion to the need to establish that a “legitimate claim”
exists against the alleged wrongdoers (Glaxo at para. 44).
[13] Glaxo has been described in the case law as the first judgment to provide footing in Canadian law for the equitable remedy of a bill of discovery (Leahy at para. 97; see also: Prandi at para. 27). In Leahy, the bona fide requirement was understood, based on a review of the relevant case law, including Glaxo, as requiring the Norwich petitioner to “provide evidence sufficient to raise a valid, bona fide or reasonable claim”
(Leahy at para. 106).
[14] Leahy was affirmed on appeal (2002 ABCA 101; leave to appeal to the Supreme Court of Canada denied, [2002] S.C.C.A. No. 235). Leahy was then followed by the Court of Appeal of Ontario in GEA Group AG v. Flex-N-Gate, 2009 ONCA 619 (at paras. 53–55, 62, 73) (GEA Group) and 1654776 Ontario Limited v. Stewart, 2013 ONCA 184 (at paras. 50–52; leave to appeal to the Supreme Court of Canada denied, [2013] S.C.C.A. 225) (Stewart). Recently, the principles set out in both GEA Group and Stewart were reaffirmed in Bluemoon Capital Ltd. v. Ceridian Holding Inc., 2022 ONCA 868 (at paras. 6–7) (Bluemoon Capital).
[15] Therefore, according to Glaxo and other appellate authority on Norwich orders, which considers Glaxo to be a foundational decision, I see no basis to the appellants’ contention that the bona fide criterion somehow excludes any form or degree of assessment of the merits of the claim made against the alleged wrongdoers. Quite the contrary, it does, albeit to the limited extent of ensuring that the claim is neither frivolous nor without justification.
[16] In my view, BMG has not changed the legal landscape in this area. In that case, the Court quoted extensively from Glaxo and adopted the bona fide test enunciated therein (BMG at para. 33).
[17] The appellants rely more specifically on paragraph 34 of BMG in support of their contention that the bona fide criterion is not merit-based. After stating, just as in Glaxo, that imposing the burden of showing a prima facie case on Norwich petitioners would have effectively stripped them of a remedy, the Court in BMG went on to say:
It is sufficient if they show a bona fide claim, i.e. that they really do intend to bring an action for infringement of copyright based upon the information they obtain, and that there is no other improper purpose for seeking the identity of th[e] persons [they wish to sue]”.
[18] However, this quote cannot be read in isolation. First, there is no indication in BMG, express or implied, that the Court distanced itself from Glaxo which requires Norwich petitioners to establish a “legitimate claim”
against the alleged wrongdoers, that is a claim that is neither frivolous nor without justification. It is to be recalled that in the interests of certainty, consistency and predictability of the law, the Court normally follows its prior decisions (Miller v. Canada (Attorney General), 2002 FCA 370 at para. 9 (Miller); Feeney v. Canada, 2022 FCA 190 at para. 16). When it does not, which would only happen in “exceptional circumstances”
(Miller at para. 10), the Court will normally explain why.
[19] Second, as noted by the Motion Judge and the respondents, there was evidence filed in support of the Norwich motion in BMG. Applying the prima facie threshold, the Federal Court dismissed the Norwich motion because of deficiencies in that evidence (BMG at para. 15). Even though it found the Federal Court to have erred by “embark[ing] upon a consideration of whether there had been an infringement of copyright”
(BMG at para. 15), this Court nevertheless dismissed the appeal, as it saw no reason to interfere with the Federal Court’s evidentiary finding even in light of the lesser bona fide threshold.
[20] The appellants argue that the evidence filed in BMG was not merit-based and only served to establish a connection between the alleged infringers and the alleged infringement, as opposed to actual infringement.
[21] I disagree. The BMG evidence consisted of: (i) details of the investigation conducted by the copyright owners; (ii) screenshots of the files being offered by the impugned IP addresses; (iii) copies of the files requested and received from the non-party respondents; and (iv) confirmation from the copyright owners that the files correspond to the copyrighted songs. It went, at least in part, to the merits of the claim against the alleged copyright infringers. As the Motion Judge put it, it provided a “plausible basis for assuming that there was a copyright infringement”
(Motion Judge’s Reasons at para. 36), which is entirely consistent with the requirement that a legitimate claim against the alleged infringers be shown to exist.
[22] Read in its proper context, BMG merely cautions against adjudicating the actual merits of a claim at the early stage of a Norwich motion (see also: Bluemoon Capital at para. 7). This was perfectly understood by the Motion Judge both in identifying the applicable test and in applying it to the facts of the case.
[23] I am therefore satisfied that the Motion Judge correctly directed himself on the law. Although the bona fide standard is not as demanding as the prima facie case standard, it nevertheless requires some minimal analysis of the merits of the claim, as evidenced by the case law, including BMG.
[24] The issue then is whether the Motion Judge committed a reviewable error in applying the bona fide test to the facts of the case. It is not disputed that this issue must be reviewed against the deferential standard of palpable and overriding error.
[25] The Motion Judge first reviewed the pleadings and concluded that the appellants’ infringement claim against the consumer defendants was purely speculative. The Motion Judge noted that the statement of claim merely named infringing devices and asserted, without explanation, that these devices infringed certain patent claims or that their use by these defendants infringed those claims. According to the Motion Judge, the consumer defendants were “left to guess how the claims are construed and which of the devices’ components infringe them”
(Motion Judge’s Reasons at para. 34).
[26] The Motion Judge then considered the evidence filed in support of the Motion and found that it did not remedy the deficiencies in the pleadings as it failed to provide any particulars of the infringement allegations. The Motion Judge noted, in this regard, that the appellants had been aware for some time prior to the hearing of the Motion that the bona fide criterion was an issue but had done nothing to provide any additional basis to support their infringement allegations (Motion Judge’s Reasons at para. 27).
[27] The Motion Judge concluded from all of this that the bona fide requirement had not been made out by the appellants.
[28] The appellants essentially claim that the Motion Judge erred by:
a)drawing an analogy between the bona fide criteria and the “plain and obvious”
test applicable to motions to strike;
b)relying on Mostar Directional Technologies Inc. v. Drill-Tek Corp., 2017 FC 575 (Mostar), an unreported decision of the Federal Court dealing with the issue of sufficiency of pleadings in a patent case; and
c)failing to recognize that contrary to other types of cases, the burden for seeking a Norwich order in intellectual property matters is light, as these matters, especially patent cases, involve rights that are clearly set out in a legal instrument that can be compared against the physical device allegedly infringed.
[29] These submissions are unpersuasive. First, the analogy to the test applicable on motions to strike is of no moment. The Motion Judge had already concluded that the appellants’ pleadings provided no detail of the alleged infringement and that the evidence filed in support of the Motion did very little to fill the gap necessary for demonstrating a bona fide claim (Motion Judge’s Reasons at paras. 22–28). Assuming, without deciding, that this analogy was misplaced, this does not amount, in the present circumstances, to an error justifying the Court’s intervention.
[30] Second, relying on unpublished decisions is not an error. I note that Mostar was relied upon in Canadian National Railway Company v. BNSF Railway Company, 2018 FC 614 at paragraph 11 (BNSF Railway). It was relied upon for the basic proposition that pleadings will be held to be frivolous when they are “so deficient in factual material that the defendant cannot know how to answer, and a court will be unable to regulate the proceedings”
(BNSF Railway at para. 11).
[31] Mostar sets out trite principles on proper pleadings in the Federal Courts. These principles can be summarized as follows:
a)
Every pleading must contain “a concise statement of the material facts on which the party relies”
as well as “particulars of every allegation contained therein”
(Rules 174 and 181(1) of the Rules);
b)It is so because pleadings play “an important role in providing notice and in defining the issues to be tried”
, which means that material facts must be pleaded “in sufficient detail to support the claim and the relief sought”
(Mancuso v. Canada (National Health and Welfare), 2015 FCA 227, at para. 16; leave to appeal to the Supreme Court of Canada denied: [2016] S.C.C.A. No. 36889 (S.C.C.) (Mancuso));
c)Proper pleadings serve at establishing “the parameters of relevancy of evidence at discovery and trial”
and at allowing counsel “to advise their clients, to prepare their case and to map a trial strategy”
(Mancuso at para. 17); at a minimum, the opposing party—and the Court—“should thus not be left to speculate as to how the facts might be arranged to support various causes of action”
(Brink v. Canada, 2024 FCA 43 at para. 54 (Brink);
d)Bald assertions of facts or mere conclusory statements of law do not meet the proper pleadings test (Mancuso at para. 17); improper pleadings cannot be remedied by relying on defendants to seek particulars (Mancuso at para. 20) and in assessing the sufficiency of the pleadings in any given case, the Court must look at the claim as it is drafted, not at how it may be drafted (Brink at para. 72; Merchant Law Group v. Canada Revenue Agency, 2010 FCA 184, at para. 40); and
e)Complying with the rules of proper pleadings is mandatory, not optional (Brink at para. 60);
[32] Having already noted that the appellants’ pleadings failed to provide any detail of the alleged infringement, the Motion Judge, in applying these principles, concluded that the consumer defendants were “left to guess how the [patent] claims are construed and which of the devices’ components infringe them”
(Motion Judge’s Reasons at para. 34). In other words, the pleadings did not allow them to know how to answer the claim.
[33] To the extent that the Motion Judge’s task was to determine whether the appellants’ claim was neither frivolous nor without justification, this finding was open to him.
[34] Finally, I am satisfied that the Motion Judge, relying on Glaxo, a patent case, applied the proper burden on the appellants when he concluded that:
a)in order to meet the bona fide criterion, it was not enough “to merely name[] infringing devices and assert […], without any explanation, that these devices infringe certain patent claims, or that the use of these devices by the defendants infringes those claims”
; and
b)the evidence filed in support of the Motion, which consisted mainly of a summary of Internet searches, did not provide any particulars of infringement (Motion Judge’s Reasons at paras. 34–35).
[35] Whichever differences may exist, burden wise, between patent cases and non-intellectual property cases, it was open to the Motion Judge to conclude, based on the pleadings, the evidence and the applicable law, that the appellants had not raised a bona fide claim against the consumer defendants. I see no palpable and overriding error in that conclusion.
[36] The appellants insist on the importance for the Court to rely on the inventor’s belief that the consumer defendants have infringed the patents at issue. As Ecobee put it, there is little value in convincing the Court of the plaintiff’s beliefs, as it generally believes in the merits of its case. Rather, it is for the Court to be convinced that the claim is bona fide based on the record before it. For the reasons set out above, I see no basis, based on the record he had before him, to interfere with the Motion Judge’s conclusion that the appellants have failed to establish a bona fide claim against the consumer defendants.
[37] The appellants insist as well on the role of case management in curing whatever defects might affect the sufficiency of the pleadings. However, as indicated above, the rules of proper pleadings are mandatory. I therefore see no merit in that proposition, which, if accepted, would defeat the whole purpose of these rules. Insofar as improper pleadings cannot be remedied by relying on defendants to seek particulars, they cannot be remedied, in my view, by relying on a case management judge to come up with a cure for the deficiencies. Again, the sufficiency of pleadings is to be assessed by looking at the claim as drafted, not at how it might have been drafted (Brink at para. 72).
[38] Finally, I see no merit in the appellants’ argument that the adverse inference drawn by the Motion Judge from their refusal to answer cross-examination questions about the inventor’s belief that the patents at issue were infringed, was procedurally unfair. In particular, the appellants claim that this inference could not be drawn: (i) in the absence of a refusal motion brought under Rule 97 of the Rules; (ii) without dealing with their objections based on privilege; and (iii) without having provided the inventor with an opportunity to answer the questions at issue after ruling on the objections.
[39] When faced with procedural fairness issues, this Court must be satisfied that the procedure was fair having regard to all of the circumstances (Canadian Pacific Railway v. Canada (Attorney General), 2018 FCA 69 at para. 54; Lipskaia v. Canada (Attorney General), 2019 FCA 267 at para. 14).
[40] Here, the difficulty with the appellants’ procedural fairness argument is that it is premised on the view that the adverse inference drawn by the Motion Judge “formed the very basis of his entire decision”
(Appellants’ Memorandum of Fact and Law at para. 77). However, when the Motion Judge’ Reasons are read as a whole, that premise is incorrect. I agree here with the respondents that the impugned inference was immaterial to the Motion Judge’s decision. Indeed, the Decision was mainly grounded on: (i) the bare allegations in the claim; (ii) the absence of particulars in the inventor’s affidavit; (iii) the appellants’ failure to amend their claim to plead additional particulars; and (iv) the absence of any indication that the inventor or anyone else had obtained or examined the impugned devices.
[41] Therefore, even assuming that the Motion Judge improperly made the impugned inference, this would not be enough, in these circumstances, to justify the Court’s intervention (Mobil Oil Canada Ltd. v. Canada-Newfoundland Offshore Petroleum Board, [1994] 1 S.C.R. 202 at p. 228).
V. The Public Interest Criterion
[42] As stated at the outset of these reasons, the Motion Judge found that it would be against the public interest to issue a Norwich order in this case, because this would unjustly deprive the consumer defendants of meaningful access to justice. This was so given the inherent complexity of a patent infringement action and the practical impossibility for these defendants to defend such an action individually.
[43] The Motion Judge reasoned that the main goal of Norwich orders, which is to facilitate access to justice for right holders unaware of the identity of alleged wrongdoers, was equally important for defendants in cases where meaningfully defending an action would be out of reach, potentially resulting in unfair settlements or unopposed default judgments (Motion Judge’s Reasons at paras. 41–42, 46–47). In this case, “special considerations”
were given to the fact that: (i) patent litigation is costly and requires expert evidence; and (ii) the action is directed at a large number of individuals, each having modest amounts at stake and lacking in technical skills (Motion Judge’s Reasons at para. 44).
[44] The Motion Judge, referring to Voltage Pictures LLC v. John Doe, 2014 FC 161 (Voltage), noted that concerns about defendants having meaningful access to justice had been “front and centre”
in setting the terms of previous Norwich orders “in cases where the defendants were individuals or consumers”
(Motion Judge’s Reasons at para. 43).
[45] The appellants contend that in the intellectual property context, the public interest criterion consists of balancing only two factors: (i) the public interest in ensuring that intellectual property owners can enforce their statutory legal rights; and (ii) the privacy interest of the alleged infringers. They say that the Motion Judge’s “novel approach”
finds no support in the case law, either within or outside the intellectual property context.
[46] The determination of the appropriate test when applying the law to a set of facts is an extricable question of law (Pfizer Canada Inc. v. Amgen Inc., 2019 FCA 249 at para. 38). Here, I see no error of law in the Motion Judge’s approach to the public interest criterion.
[47] As noted by the Motion Judge, privacy is often the main concern in the context of Norwich motions. I note, in this regard, that in most of these instances, there were tensions between the public interest in ensuring that intellectual property owners can enforce their statutory legal rights and statutory provisions preserving the confidentiality of the alleged wrongdoers’ identity. This was the case in Norwich Pharmacal and in Glaxo, where the identity of importers of goods was sought from government entities governed by laws that protected their identity.
[48] In BMG, the Norwich motion was directed at a number of Internet Service Providers (ISPs) and the tension at issue resulted from provisions of the Personal Information Protection and Electronic Documents Act, S.C. 2000, c. 5 prohibiting ISPs from voluntarily disclosing personal information, including the identity of alleged online copyright infringers at issue in that case. As the Court noted in BMG, the “delicate balance between privacy interests and public interest has always been a concern of the Court where confidential information is sought to be revealed”
(BMG at para. 39) (my emphasis). There is no indication in the record of the present case that confidentiality is a concern.
[49] In Rogers, although the Supreme Court framed the public interest criterion as requiring that the public interest in disclosure outweigh “the legitimate privacy concerns”
of the alleged wrongdoers (Rogers at para. 18), that criterion was not at issue. The only issue in that case had to do with the implications of the “notice and notice”
regime enacted as part of the Copyright Modernization Act, S.C. 2012, c. 20, on the ability of copyright owners to recover their reasonable costs of compliance with a Norwich order (Rogers at para. 4). That regime, which was designed to deter online copyright infringement while at the same time providing for its own balancing of the rights of interested parties (Rogers at para. 22), imposed a number of obligations on ISPs and prohibited them from charging a fee for complying with these obligations. Therefore, the tension to be resolved in Rogers concerned the costs ISPs could recover for complying with a Norwich order given the potential overlap between their obligations under the “notice and notice”
regime and those under such an order. Again, the public interest criterion was not at issue in that case.
[50] Interestingly, the Supreme Court, in laying out the Norwich order test in Rogers, which was not in dispute, explicitly endorsed the formulation of the test in Leahy. However, in Leahy, the public interest criterion was formulated in much broader terms as “[w]hether the interests of justice favour the obtaining of the disclosure”
(Leahy at para. 106). The Rogers formulation was made in the very specific context, similar to BMG, of anonymous online copyright infringers.
[51] This discrepancy in the formulation of the public interest criterion—and the case law generally—suggest, in my view, that certain factors may be more prominent under some circumstances and that a broader approach may be warranted in others.
[52] In Norwich Pharmacal, for instance, the public interest criterion was formulated in the broadest terms by the House of Lords, which stated that disclosure was required when otherwise warranted “unless there is some consideration of public policy which prevents that”
(cited in Glaxo at para. 26). As we have seen, in the particular circumstances of that case, the balancing analysis opposed the public interest in favour of disclosure to the statutory protection from disclosure of the alleged infringers’ identity. This broad terminology was echoed in Glaxo (Glaxo at para. 65).
[53] Besides privacy and confidentiality, other public interest concerns have been considered by the courts in Norwich motions, such as:
a)the nature and apparent strength of the plaintiff’s case (Stewart at paras. 59, 75, 145);
b)whether denying the motion would leave the plaintiff without a remedy (Stewart at para. 142; Bluemoon Capital at para. 16);
c)freedoms of expression, association and peaceful assembly under the Canadian Charter of Rights and Freedoms, Part I of the Constitution Act, 1982, being Schedule B to the Canada Act 1982 (U.K.), 1982, c. 11 (the Charter) (Olsen v. Facebook Inc., 2016 NSSC 155 at para. 11; Cooper Creek Cedar Ltd. v. Ogden, 2023 BCSC 465 at paras. 83–84 (Cooper Creek));
d)the administration of justice, free press and compliance with securities legislation (Stewart at paras. 77, 99, 103);
e)the chilling effect resulting from disclosure (Cooper Creek at para. 84); and
f)the interests of alleged wrongdoers and the public (Harrington Global Opportunities Fund S.A.R.L. v. Investment Industry Regulatory Organization of Canada, 2018 ONSC 7739 at paras. 93, 111; ME2 Productions, Inc. v. Doe, 2019 FC 214 at para. 106; and Voltage at paras. 25-27, 40–41).
[54] These cases show that non-privacy concerns are well within the ambit of public policy and interests of justice considerations inherent to the extraordinary, discretionary, and equitable nature of Norwich proceedings.
[55] In sum, I do not see much support in the case law for the restricted view advanced by the appellants, regarding the scope of the public interest criterion in intellectual property law matters. It seems to me that the broader view is preferable as it provides the necessary flexibility to conduct the public interest analysis in light of the particular circumstances of each case, including the context of the litigation.
[56] Therefore, it was open to the Motion Judge, in the particular circumstances of this case, to focus on the public interest in access to justice when considering the public interest criterion.
[57] The issue now is whether, on the record before him, the Motion Judge committed a palpable and overriding error in finding that the public interest in access to justice outweighed the public interest in disclosure. Considerable deference is owed to the Motion Judge in this respect (Housen at para. 24; Canada v. South Yukon Forest Corporation, 2012 FCA 165 at para. 46).
[58] I agree with the respondents that the Motion Judge’s analysis was restricted to the highly unusual facts of this case. As indicated above, the Motion Judge found that meaningfully defending the appellants’ action would be out of reach for individual consumers given the inherent complexity of patent infringement actions compared to, for example, copyright infringement actions, the cost of defending such actions for individual consumers who only have modest amounts at stake, as well as their lack of technical skills. He was concerned that in such context, the appellants’ action could result in unfair settlements or default judgments, something which, on a mass scale, as here, would not be in the interest of justice.
[59] The appellants claim that instead of dismissing the Motion based on access to justice concerns, assuming this was a valid public interest consideration, the Motion Judge should have come up with solutions to solve these concerns on behalf of the consumer defendants. They say that the Motion Judge overlooked “judicial tools”
that were available to him, such as appointing an amicus curiae to represent the interest of the consumer defendants, imposing ongoing court oversight of communications with the defendants, or making use of the Federal Court’s case management authority to manage the action in a manner that would alleviate these concerns.
[60] I agree with the respondents that the Motion Judge was not required to design a plan on the appellants’ behalf aimed at solving the access to justice issues the Motion raised, especially in a mass litigation context directed at hundreds of thousands of consumers, according to the appellants’ own estimation. Some of these alleged alleviating measures (releasing the information sought to be disclosed in small manageable batches, sending out cover letters protecting the proposed consumer defendants from being intimidated into settlement, considering the intervention of a public interest organization, appointment of a lawyer by the manufacturers, and providing advance costs) were not put before the Motion Judge. It is trite that this Court will normally not entertain issues that were not raised in the court below (Quan v. Cusson, 2009 SCC 62, [2009] 3 S.C.R. 712 at paras. 36–39; Rouet v. Canada (Justice), 2023 FCA 50; see also: Athey v. Leonati, [1996] 3 S.C.R. 458 at paras. 51–52).
[61] As for the proposed alleviating measures put before the Motion Judge (permitting the consumer defendants to seek joint representation or to bring a motion to certify the action as a reverse class action, or allowing manufacturers to seek intervener status), the Motion Judge found that they were either:
a)Out of touch with reality, given the number of individuals involved and the amount at stake for each of them; or
b)Disingenuous given that the appellants had explicitly declined to seek certification of their action as a reverse class action and had opposed Ecobee’s motion to be added as a party or intervener to said action.
[62] I see no palpable and overriding error in the Motion Judge’s findings in this regard. Again, it was open to him, based on the record before him, to conclude the way he did. In the end, the appellants are asking this Court to reassess the record in the hope of reaching different conclusions. However, this is not our role.
[63] Ecobee contends that even when the public interest favoring disclosure is assessed against privacy concerns, disclosure is not warranted. It claims that the appellants have made no effort to minimize the invasion of privacy by seeking to capture as many people as possible, regardless of whether they are even defendants in the action. Ecobee asserts in this regard that the requested disclosure would reveal the personal information of individuals that have merely downloaded an app to operate or control non-impugned devices.
[64] Since the Motion Judge did not conduct a privacy analysis, it would not be appropriate for this Court to consider Ecobee’s privacy argument, although it is not without raising some legitimate concerns.
[65] In sum, I am of the view that the Motion Judge committed no reviewable error on the law or on the facts, in concluding that the public interest in access to justice outweighed the public interest in favour of disclosure in the particular circumstances of this case.
[66] For all these reasons, I would dismiss the appeal. Both respondents seek costs. Apple seeks theirs on the highest possible scale, but not Ecobee, which seeks an order “for costs of the appeal”
. As I am not satisfied that an award of costs in favor of Apple on the highest possible scale is warranted in the circumstances of this case, I would award costs in this appeal to both respondents to be calculated in accordance with column III of the table to Tariff B of the Rules.
“René LeBlanc”
“I agree. |
Yves de Montigny C.J.”
|
“I agree. |
Anne L. Mactavish J.A.” |
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