T-913-95
2001 CFPI 889
Baker Petrolite Corporation, Petrolite Holdings Inc. et Baker Hughes Canada Company (deman-deresses)
c.
Canwell Enviro-Industries Ltd., Clive Titley et The City of Medicine Hat (défendeurs)
Répertorié: Baker Petrolite Corp. c. Canwell Enviro-Industries Ltd. (1reinst.)
Section de première instance, juge Gibson--Ottawa, 23, 24, 25 et 26 avril et 15 août 2001.
Brevets -- Contrefaçon -- La poursuite intentée par les demanderesses concerne la contrefaçon d'un brevet portant sur une méthode et une composition pour réduire les concentrations de sulfure d'hydrogène et de sulfures organiques dans les flux de gaz naturel -- La défenderesse Canwell conclut à la radiation du brevet, à une injonction, à des jugements déclaratoires et à des dommages-intérêts -- Elle invoque l'antériorité ou l'absence de nouveauté -- L'action doit être régie et tranchée conformément à l'art. 27(2) de la Loi sur les brevets de 1989 et aux modifications de la Loi sur les brevets de 1996--Le brevet Baize et le brevet Arundale ne constituent pas une antériorité par rapport au brevet en litige -- L'invention divulguée par le brevet n'était pas évidente à la date de la revendication du brevet pour une personne versée dans l'art -- L'allégation d'invalidité du brevet n'était pas fondée -- Les produits 300-SX, 500-SX et CW-1000 de Canwell ont contrefait les revendications du brevet -- Canwell est responsable de la contrefaçon du brevet pour avoir incité la ville de Medicine Hat à la contrefaçon -- Une injonction permanente a été accordée contre la ville de Medicine Hat et Canwell -- Les réparations recherchées comprenaient la comptabilisation des bénéfices de la ville de Medicine Hat et de Canwell -- Une somme symbolique a été accordée à titre d'indemnité car les demanderesses n'ont pas subi de dommages et aucun montant n'a été établi à titre de dommages-intérêts à compter de la date où la demande de brevet est devenue accessible au public jusqu'à la date de sa délivrance -- Le brevet était valide et les moyens de défense n'était pas fondés -- La demande reconventionnelle de Canwell a été rejetée.
Fiducies -- L'unique actionnaire et administrateur de la société poursuivie pour contrefaçon de brevet était-il personnellement responsable en vertu des principes de la fiducie par interprétation et de l'enrichissement sans cause?
-- Il n'y avait aucune preuve de malhonnêteté, de fraude ou d'un comportement délibérément insouciant de la part de l'actionnaire -- Il n'y avait aucune raison pour les demanderesses de demander l'exécution d'une obligation que pourrait avoir l'actionnaire envers l'entreprise -- L'actionnaire n'était pas partie à la fiducie -- Il avait une responsabilité personnelle, solidairement avec l'entreprise, en vertu des principes de la fiducie par interprétation et de l'enrichissement sans cause dans la mesure où les sommes que l'entreprise lui a payées à titre de primes depuis l'ouverture de l'action pouvaient être liées aux éléments d'actif particuliers qui constituent l'enrichissement.
Il s'agissait d'une action en contrefaçon du brevet des demanderesses délivré le 7 février 1995 et intitulé «Composé et méthode pour l'adoucissement des hydrocar-bures». L'invention décrite dans la divulgation du brevet concernait une méthode et une composition pour réduire les concentrations de sulfure d'hydrogène et de sulfures organiques dans les flux de gaz naturel. Les demanderesses ont sollicité un jugement déclarant que les revendications 3 à 6, 8 à 51 et 53 à 77 du brevet sont valides et ont été contrefaites par les activités des défendeurs, un jugement déclarant que les défendeurs ont incité des tiers à la contrefaçon, une injonction permanente, la remise aux demanderesses des produits en la possession, sous l'autorité ou sous le contrôle des défendeurs, la comptabilisation des bénéfices, une indemnité raisonnable pour les dommages subis, des dommages-intérêts exemplaires ainsi que les intérêts avant et après jugement. La défenderesse Canwell, demanderesse reconventionnelle, a demandé que le brevet soit déclaré invalide et nul, et elle a réclamé une ordonnance de radiation du brevet, une injonction interlocutoire et une injonction permanente interdisant aux demanderesses de laisser entendre aux clients de la défenderesse Canwell que l'usage du produit Cansweet de Canwell contrefait le brevet, des dommages-intérêts pour avoir fait des déclarations fausses et trompeuses en contravention de l'alinéa 7a) de la Loi sur les marques de commerce, ainsi que des dommages-intérêts punitifs et exemplaires. Quatre questions principales ont été soulevées dans la présente action: 1) la loi applicable, 2) la validité du brevet, 3) la contrefaçon du brevet et 4) les réparations.
Jugement: l'action est accueillie.
1) Selon l'article 43 de l'ancienne Loi sur les brevets, le droit au brevet et, par conséquent, la validité du brevet étaient fondés sur le principe du «premier inventeur». La Loi a été modifiée le 1er octobre 1989, le changement le plus important à l'égard de l'espèce étant le remplacement du principe du «premier inventeur» de l'ancienne Loi par celui du «premier déposant». En conséquence, les dates critiques pour l'appréciation de la nouveauté sont devenues la date de dépôt et la date de priorité. Comme la demande de brevet a été déposée au Canada le 19 décembre 1989 et que le brevet a été délivré le 7 février 1995, la version de la Loi qu'appliquait le commissaire aux brevets au cours de la période d'examen de la demande jusqu'à la délivrance du brevet était la Loi de 1989. Les modifications de la Loi de 1996, entrées en vigueur le 1er octobre 1996, après la délivrance du brevet, faisaient partie d'une Loi intitulée Loi d'actualisation du droit de la propriété intellectuelle. Il serait pernicieux d'interpréter l'article 78.4, tel qu'il a été adopté avec les modifications de 1996, de manière à maintenir, presque cinq ans après l'entrée en vigueur de cet article et plus de huit ans après son adoption, un régime de droit dont le Parlement jugeait qu'il avait besoin d'actualisation. Les affaires visées en l'espèce sont surve-nues, pour reprendre les termes du paragraphe 78.4(2), relativement à un brevet délivré sur la base d'une demande déposée après le 1er octobre 1989 et avant le 1er octobre 1996. Par conséquent, la présente action doit être régie et tranchée conformément au paragraphe 27(2) de la Loi de 1989 et aux dispositions de la Loi de 1996, notamment le paragraphe 27(2).
2) La présomption de validité d'un brevet est établie par le paragraphe 43(2) de la nouvelle Loi. Canwell a contesté la validité du brevet pour divers motifs. Tout d'abord, elle a allégué l'antériorité du brevet américain Baize, délivré le 31 mai 1988, du brevet américain Arundale, délivré le 17 janvier 1956 et de la vente du produit appelé W-3053 par Quaker Chemical. On ne saurait dire que, par rapport au brevet Baize, le brevet n'était pas valide. Le simple succès commercial de la ligne de produits d'épuration du sulfure d'hydrogène des demanderesses attestait la validité du brevet en litige. Ce brevet doit être considéré comme une sélection inventive eu égard au brevet Baize, ce dernier ne constituant pas une antériorité par rapport au brevet en litige. Le brevet Arundale, comme le brevet Baize, ne constitue pas une antériorité par rapport au brevet en litige. Quant à la vente commerciale alléguée du W-3053 en décembre 1987, Canwell n'a pas réussi à s'acquitter du fardeau de preuve qui lui incombait d'établir que les ventes commerciales du W-3053 intervenues dans l'ouest de l'Oklahoma au cours du délai de grâce précédant le dépôt du brevet en litige constituaient une antériorité opposable à l'invention divul-guée par le brevet, dans la mesure où elles équivalaient à rendre l'objet du brevet accessible au public au Canada ou ailleurs. Canwell a également allégué que le brevet en litige était évident. Compte tenu du fait que l'évidence est un critère auquel il est très difficile de satisfaire, il s'agissait de savoir si l'invention divulguée dans le brevet était, par rapport à l'état antérieur de la technique mentionné précédemment et à la vente commerciale antérieure du W-3053, claire comme de l'eau de roche pour un technicien versé dans l'art à la date de l'invention. Les défendeurs n'ont pas rempli leur obligation d'établir que l'invention divulguée par le brevet était évidente à la date de la revendication du brevet pour une personne versée dans l'art dont relève le brevet, de sorte que cette personne serait directement et facilement arrivée à la solution enseignée par le brevet. Un autre motif de contestation était l'insuffisance de la divulgation du brevet. Une personne raisonnablement versée dans l'art dont relève le brevet, qui lit le mémoire descriptif et qui veut utiliser l'invention, comprendrait ce que l'inventeur veut vraiment dire et serait ainsi en mesure de permettre au public de profiter de l'invention. Par conséquent, le mémoire descriptif répond au but auquel il est destiné, soit de rendre l'invention revendiquée disponible au public à la fin de la période de monopole. La prétention d'invalidité du brevet qu'a soutenue Canwell sur ce fondement a également échoué. Enfin, Canwell a invoqué une allégation importante non conforme à la vérité dans la pétition, soit que l'inventeur désigné dans le brevet, Edward T. Dillon, n'était pas le véritable inventeur. Il n'a pas été prétendu que l'erreur alléguée de nommer seulement M. Dillon et d'omettre M. Watts avait été faite volontairement pour induire en erreur. L'allégation d'invalidité du brevet sur ce fondement a également échoué.
3) Les produits 300-SX et CW-1000 de Canwell, utilisés dans le procédé adopté par Canwell et recommandés par cette dernière à ses clients, ont contefait les revendications du brevet identifiées dans les quatre séries numérotées I à IV. Canwell ne pouvait pas échapper à un jugement de contrefaçon en incorporant dans son produit 300-SX une variante mineure ou négligeable et en renommant ce produit. Dans la mesure où le produit 300-SX et le procédé par lequel il est utilisé contrefaisaient les revendications du brevet, le produit 500-SX et le procédé connexe les contrefaisaient eux aussi et se situaient dans le cadre de la présente action. La ville de Medicine Hat, par son usage reconnu des deux produits 300-SX et CW-1000 selon les procédés recommandés par Canwell, a contrefait le brevet. Canwell n'a pas fourni elle-même les services d'épuration de sulfure d'hydrogène à la ville de Medicine Hat. À toutes les époques pertinentes, la ville contrôlait directement les activités d'épuration mises en oeuvre à son puits de gaz, tout en dépendant dans une large mesure des conseils, des services et de l'aide de Canwell. Lorsqu'un défendeur, tel que Canwell, fournit à un acheteur, tel que la ville de Medicine Hat, des instructions ou des directives sur la méthode d'utilisation d'une invention, il incite à la contrefaçon des revendications visant le procédé d'un brevet. Canwell était hors de tout doute responsable de contrefaçon pour avoir incité la ville de Medicine Hat à la contrefaçon. La demande reconventionnelle de Canwell visant à obtenir des réparations en vertu de l'alinéa 7a) de la Loi sur les marques de commerce a été rejetée.
4) Une injonction permanente a été prononcée contre la ville de Medicine Hat et Canwell leur interdisant de contrefaire le brevet en litige. Canwell a été condamnée à remettre aux demanderesses tous les produits Cansweet et leurs équivalents ou autres objets susceptibles d'inciter Canwell à ne pas se conformer à l'injonction. La ville de Medicine Hat et Canwell devront payer aux demanderesses les bénéfices résultant de la contrefaçon du brevet. La demande de dommages-intérêts exemplaires de la part des demanderesses a été rejetée. Quant à la comptabilisation des bénéfices, il n'y a eu aucune allégation que Canwell n'a pas procédé à une comptabilisation du montant total des revenus tirés de ses activités d'épuration de sulfure d'hydrogène ou que la ville de Medicine Hat n'a pas apporté sa pleine collaboration à la comptabilisation du montant total des revenus tirés de son puits de gaz, pour l'exploitation duquel elle a utilisé le procédé et les produits d'épuration de sulfure d'hydrogène de Canwell. Le défendeur Clive Titley est l'unique actionnaire, administrateur et dirigeant de Canwell. Le seul revenu que Titley a tiré de Canwell était sous forme de primes qui étaient très importantes. Aucune preuve n'a été présentée sur la relation entre ces primes et la rémunération raisonnable de Titley. La Cour a tiré une conclusion défavorable de son refus de témoigner et elle a conclu, selon la probabilité la plus forte, que les primes payées à Titley étaient une série de stratagèmes qui avaient pour seul but de réduire les bénéfices de Canwell. Canwell et Titley ne se sont pas acquittés du fardeau de la preuve concernant l'admissibilité des primes à titre de dépenses aux fins de l'espèce. Les demanderesses peuvent sans doute avoir subi un dommage du fait des actes des défendeurs posés entre la date où la demande de brevet est devenue accessible et la date de délivrance du brevet, mais aucun dommage subi ni aucun montant de dommages-intérêts n'ont été établis. Comme les demanderesses n'ont aucunement établi le bien-fondé de leur demande sauf à l'égard d'une indemnité symbolique, Canwell et la ville de Medicine Hat ont été condamnées à payer 1 $ chacune.
Une autre question importante était celle de savoir si le défendeur Titley pouvait être tenu personnellement responsable par application des principes tirés de l'arrêt de la Cour d'appel fédérale Mentmore Manufacturing Co., Ltd. et al. c. National Merchandising Manufacturing Co. Inc. et al. Bien que Titley ait refusé de comparaître comme témoin, il n'y avait aucune preuve de malhonnêteté, de fraude ou d'un comportement délibérément insouciant de sa part. Par conséquent, s'agissant de responsabilité personnelle, la Cour n'était pas disposée à tirer une conclusion défavorable de son défaut de comparaître comme témoin. Il n'y avait aucune raison pour laquelle les demanderesses pouvaient elles-mêmes demander l'exécution d'une obligation que pourrait avoir Titley envers Canwell. Les demanderesses ont également soutenu que Canwell était une fiduciaire par interprétation en leur faveur à l'égard des bénéfices qu'elle avait réalisés du fait de ses activités de contrefaçon. Titley n'était pas partie à la fiducie, mais sa conscience était suffisamment affectée par le paiement de primes en sa faveur de la part de Canwell, qui compromettait sérieu-sement la capacité de celle-ci de remplir ses obligations en vertu de la fiducie, pour justifier l'attribution d'une respon-sabilité personnelle. L'existence d'une justification raison-nable du paiement des primes, soit la réduction des charges d'impôt sur le revenu, n'a d'aucune façon diminué le caractère répréhensible du risque de dommage causé aux demanderesses par le paiement de ces primes. Une respon-sabilité personnelle ne saurait être imposée a Titley, solidai-rement avec Canwell, par application des principes de la fiducie par interprétation et de l'enrichissement sans cause que dans la mesure où les sommes que lui a payées Canwell à titre de primes depuis l'ouverture de la présente action peuvent être liées à ses éléments d'actif particuliers qui constituent l'enrichissement.
considered
| lois et règlements |
| Federal Court Rules, 1998, SOR/98-106, Tariff B, Column III. |
| Intellectual Property Law Improvement Act, S.C. 1993, c. 15. |
| Judgment Interest Regulation, Alta. Reg. 364/84. |
| Patent Act, R.S.C., 1985, c. P-4, ss. 2 "claim date" (as enacted by S.C. 1993, c. 15, s. 26), "filing date" (as enacted idem), "priority date" (as am. by R.S.C., 1985 (3rd Supp.), c. 33, s. 1; rep. by S.C. 1993, c. 15, s. 26), 27(2) (as am. idem, s. 31), (3) (as am. idem), 28 (as am. by R.S.C., 1985 (3rd Supp.), c. 33, s. 10; S.C. 1993, c. 15, s. 33), 28.1 (as enacted idem), 28.2(1) (as enacted idem), 28.3 (as enacted idem), 43(1) (as am. idem, s. 42), (2) (as am. idem), 49 (as am. by R.S.C., 1985 (3rd Supp.), c. 33, s. 19), 53(1),(2), 55(2) (as am. by S.C. 1993, c. 15, s. 48), 78.4 (as enacted idem, s. 55). |
| Patent Act, 1935 (The), S.C. 1935, c. 32, s. 19. |
| Patent Cooperation Treaty, June 19, 1970, [1990] Can. T.S. No. 22. |
| Trade-marks Act, R.S.C., 1985, c. T-13, s. 7(a). |
| Business Corporation Act, S.A. 1981, ch. B-15. |
| Judgment Interest Regulation, Alta. Reg. 364/84. |
| Loi d'actualisation du droit de la propriété intellectuelle, L.C. 1993, ch. 15. |
| Loi de 1935 sur les brevets, S.C. 1935, ch. 32, art. 19. |
| Loi sur les brevets, L.R.C. (1985), ch. P-4, art. 2 «date de dépôt» (édicté par L.C. 1993, ch. 15, art. 26), «date de priorité» (mod. par L.R.C. (1985) (3e suppl.), ch. 33, art. 1; abrogé par L.C. 1993, ch. 15, art. 26), 27(2) (mod., idem, art. 31), (3) (mod., idem), 28 (mod. par L.R.C. (1985) (3e suppl., ch. 33, art. 10; L.C. 1993, ch. 15, art. 33), 28.1 (édicté, idem), 28.2(1) (édicté, idem) 28.3 (édicté idem), 43(1) (mod., idem, art. 42), (2) (mod., idem), 49 (mod. par L.R.C. (1985) (3e suppl.), ch. 33, art. 19), 53(1),(2), 55(2) (mod. par L.C. 1993, ch. 15, art. 48), 78.4 (édicté, idem, art. 55). |
| Loi sur les marques de commerce, L.R.C. (1985), ch. T-13, art. 7a). |
| Règles de la Cour fédérale (1998), DORS/98-106, tarif B, colonne III. |
| Traité de coopération en matière de brevets, 19 juin 1970, [1990] R.T. Can. no 22. |
| jurisprudence |
| décisions appliquées: |
| Diversified Products Corp. c. Tye-Sil Corp. (1991), 35 C.P.R. (3d) 350; 125 N.R. 218 (C.A.F.); Beloit Can. Ltée/Ltd. c. Valmet Oy (1986), 8 C.P.R. (3d) 289; 64 N.R. 287 (C.A.F.); Sandoz Patents Ltd. c. Gilcross Ltd., [1974] R.C.S. 1336; (1972), 33 D.L.R. (3d) 451; 8 C.P.R. (2d) 210; Apotex Inc. c. Wellcome Foundation Ltd. (1998), 79 C.P.R. (3d) 193; 145 F.T.R. 161 (C.F. 1re inst.); Dableh c. Ontario Hydro, [1996] 3 C.F. 751; (1996), 68 C.P.R. (3d) 129; 199 N.R. 57 (C.A.); Asbjorn Horgard A/S c. Gibbs/Nortac Industries Ltd., [1987] 3 C.F. 544; (1987), 38 D.L.R. (4th) 544; 17 C.I.P.R. 263; 14 C.P.R. (3d) 314; 80 N.R. 9 (C.A.); Mentmore Manufacturing Co., Ltd. et al. c. National Merchandising Manufacturing Co. Inc. et al. (1978), 89 D.L.R. (3d) 195; 40 C.P.R. (2d) 164; 22 N.R. 161 (C.A.F.); Ital-Press Ltd. c. Sicoli (1999), 86 C.P.R. (3d) 129; 170 F.T.R. 66 (C.F. 1re inst.); Ductmate Industries Inc. c. Exanno Products Ltd. (1987), 16 C.P.R. (3d) 15; 12 F.T.R. 36 (C.F. 1re inst.); Société canadienne des pneus Michelin Ltée c. Canada, [2001] 3 C.F. 552 (C.A.). |
| distinction faite d'avec: |
| Wellcome Foundation Ltd. c. Apotex Inc. (1998), 82 C.P.R. (3d) 466; 151 F.T.R. 250 (C.F. 1re inst.); King, The v. Irving Air Chute, [1949] R.C.S. 613; (1949), 10 C.P.R. 1. |
| décisions examinées: |
| Pfizer Canada Inc. c. Apotex Inc. (1997), 77 C.P.R. (3d) 547 (C.F. 1re inst.); Free World Trust c. Électro Santé Inc., [2000] 2 R.C.S. 1024; (2000), 194 D.L.R. (4th) 232; 9 C.P.R. (4th) 168; 263 N.R. 150; Lancashire Explosives Co. v. Roburite Explosives Co. (1895), 12 R.P.C. 470 (C.A.); Eli Lilly and Co. et al. c. Marzone Chemicals Ltd. et al. (1977), 37 C.P.R. (2d) 3 (C.F. 1re inst.); Bayer Aktiengescellschaft v. Apotex Inc. (1995), 60 C.P.R. (3d) 58 (Div. gén. Ont.); conf. par (1998), 82 C.P.R. (3d) 526; 113 O.A.C. 1 (C.A. Ont.); autorisation de pourvoi à la C.S.C. refusée, [1998] C.S.C.R. no 563; Société des Usines Chimiques Rhône-Poulenc et al. v. Jules R. Gilbert Ltd. et al. (1967), 35 Fox Pat.C. 174 (C. de l'Éch.); Consolboard Inc. c. MacMillan Bloedel (Sask.) Ltd., [1981] 1 R.C.S. 504; (1981), 122 D.L.R. (3d) 203; 56 C.P.R. (2d) 145; 35 N.R. 390; Cabot Corp. c. 318602 de Ontario Ltd. (1988), 20 C.P.R. (3d) 132; 17 F.T.R. 54 (C.F. 1re inst.); Teledyne Industries Inc. et al. c. Lido Industrial Products Ltd. (1982), 68 C.P.R. (2d) 201 (C.F. 1re inst.); Paula Lishman Ltd. c. Erom Roche Inc. (1997), 72 C.P.R. (3d) 214; 125 F.T.R. 311 (C.F. 1re inst.); AlliedSignal Inc. c. Du Pont Canada Inc. (1998), 78 C.P.R. (3d) 129 (C.F. 1re inst.); Monsanto Canada Inc. c. Schmeiser (2001), 12 C.P.R. (4th) 204 (C.F. 1re inst.); Air Canada c. M & L Travel Ltd., [1993] 3 R.C.S. 787; (1993), 15 O.R. (3d) 804; 108 D.L.R. (4th) 592; 50 E.T.R. 225; 159 N.R. 1; 67 O.A.C. 1. |
| décisions citées: |
| Metropolitan Vickers Electrical Company Ld. v. British Thomson-Houston Company Ld. (1925), 43 R.P.C. 76 (C.A.); Wahl Clipper Corporation v. Andis Clipper Co., 66 F. (2d) 162 (7th Cir. 1933); Christiani and Nielsen v. Rice, [1930] R.C.S. 443; [1930] 4 D.L.R. 401; Apotex Inc. c. Wellcome Foundation Ltd., [2001] 1 C.F. 495; (2000), 10 C.P.R. (4th) 65; 262 N.R. 137 (C.A.); autorisation de pourvoi à la C.S.C. accordée, [2000] C.S.C.R. no 610; DuPont Canada Inc. c. Glopak Inc. (1998), 81 C.P.R. (3d) 44; 146 F.T.R. 301 (C.F. 1re inst.); AlliedSignal Inc. c. Du Pont Canada Inc. (1993), 50 C.P.R. (3d) 1; 68 F.T.R. 17 (C.F. 1re inst.); conf. sur un point particulier par (1995), 61 C.P.R. (3d) 417; 184 N.R. 113 (C.A.F.); Preformed Line Products Co. et Slater Steel Industries c. R. Payer & Compagnie Ltée (1975), 24 C.P.R. (2d) 1 (C.F. 1re inst.); conf. par (1977), 34 C.P.R. (2d) 141; 16 N.R. 283 (C.A.F.); MacDonald et al. c. Vapor Canada Ltd., [1977] 2 R.C.S. 134; (1976), 66 D.L.R. (3d) 1; 22 C.P.R. (2d) 1; 7 N.R. 477; C.I. Covington Fund Inc. v. White (2000), 10 B.L.R. (3d) 173; 22 C.B.R. (4th) 183; 10 C.P.R. (4th) 49 (C.S. Ont.); Chase Manhattan Bank N.A. v. Israel-British Bank (London) Ltd., [1981] Ch. 105. |
| doctrine |
| Fox, H. G. Canadian Law and Practice Relating to Letters Patent for Inventions, 4th ed. (Toronto: Carswell, 1969). |
| Gillese, Eileen E. The Law of Trusts (Concord, Ont.: Irwin Law, 1997). |
| Hughes, Roger T. and John H. Woodley. Hughes and Woodley on Patents, looseleaf (Toronto: Butterworths, 1984). |
ACTION en contrefaçon d'un brevet concernant une méthode et une composition pour réduire les concentrations de sulfure d'hydrogène et de sulfures organiques dans les flux de gaz naturel. Action accueillie.
| ont comparu: |
| Anthony G. Creber et Patrick S. Smith pour les demanderesses. |
| David W. Aitken pour les défendeurs. |
| avocats inscrits au dossier: |
| Gowling Lafleur Henderson s.a.r.l., Ottawa, pour les demanderesses. |
| Osler, Hoskin & Harcourt s.a.r.l., Ottawa, pour les défendeurs. |
Gibson J.:
Ce qui suit est la version française des motifs du jugement rendus par
Le juge Gibson:
NOTE DE L'ARRÊTISTE EN CHEF
L'arrêtiste en chef a décidé de publier les motifs du présent jugement d'une longueur de 112 pages sous une forme abrégée. Les faits énoncés aux pages 1 à 31 (paragraphes 1 à 49) ont été omis, mais l'analyse judiciaire des questions juridiques en cause est publiée dans son intégralité. Les six annexes dont il est fait mention dans les motifs et qui font suite aux motifs, aux pages 113 à 119, ont également été omises.
L'action des demanderesses visait la contrefaçon d'un brevet portant sur une méthode et une composition pour réduire les concentrations de sulfure d'hydrogène et de sulfures organiques dans les flux de gaz naturel. La défenderesse, à titre de demanderesse reconventionnelle, affirme que le brevet est invalide et qu'elle a subi des dommages du fait que les demanderesses ont présenté le brevet comme s'il était valide.
Les réparations sollicitées par les demanderesses étaient les suivantes: un jugement déclarant que le brevet est valide et a été contrefait, un jugement déclarant que les défendeurs ont incité des tiers à contrefaire le brevet, une injonction permanente, la remise des produits et la comptabilisation des bénéfices. La défenderesse a demandé une déclaration portant que le brevet est invalide, une ordonnance de radiation du brevet, une injonction interlocutoire et une injonction permanente interdisant aux demanderesses de laisser entendre aux clients de la défenderesse, Canwell Enviro-Industries Ltd., que l'usage du produit CANSWEET de Canwell contrefait le brevet, des dommages-intérêts pour déclarations fausses et trompeuses en contravention de l'alinéa 7a) de la Loi sur les brevets ainsi que des dommages-intérêts punitifs et exemplaires.
En ce qui concerne la contrefaçon et la validité du brevet, la question de la loi applicable s'est posée, étant donné que des modifications aux dispositions pertinentes de la Loi sur les brevets ont été adoptées en 1989 et 1996. La validité du brevet a soulevé les autres questions suivantes: l'antériorité, l'évidence, le caractère suffisant, une allégation importante non conforme à la vérité touchant l'inventeur désigné dans la pétition du brevet. Pour ce qui est de la contravention à la Loi sur les marques de commerce, la compétence de la Cour a été remise en question. La ville de Medicine Hat a été désignée comme partie défenderesse et, advenant le cas où elle serait reconnue coupable de contrefaçon, il fallait déterminer la réparation qu'il était possible d'obtenir contre elle. Une autre question qui s'est posée était celle de savoir si le défendeur, Clive Titley, indirectement l'unique actionnaire de Canwell, était personnellement responsable en vertu des principes tirés de l'arrêt Mentmore Manufacturing Co. Ltd. c. National Merchandise Manufacturing Co. Inc. (1978), 40 C.P.R. (2d) 164 (C.A.F.).
ANALYSE
[50]Je traiterai en premier lieu la question de la loi applicable, car elle concerne à la fois la validité et la contrefaçon du brevet. Puis, je me pencherai sur la question de la validité, qui est évidemment une condition préalable à la contrefaçon. J'aborderai ensuite la question d e la contrefaçon, celle de la contravention à l'alinéa 7a ) de la Loi sur les marques de commerce [L.R.C. (1985), ch. T-13], pour finir par les questions relatives aux réparations et aux dépens.
| 1) La loi applicable |
[51]Trois versions de la Loi sur les brevets1 (la Loi), du moins peut-on le soutenir, sont pertinentes par rapport à la question de la validité ou à celle de la contrefaçon, ou encore aux deux questions, compte tenu des faits de l'espèce: d'abord, la Loi dans la version antérieure aux modifications entrées en vigueur le 1er octobre 1989 (l'ancienne Loi); deux-ièmement, la Loi dans sa version modifiée du 1er octobre 1989, antérieurement aux modifications du 1er octobre 1996 (la Loi de 1989) [ L.R.C. (1985) (3e suppl.), ch. 33]; troisièmement, la Loi intégrant les modifications du 1er octobre 1996 (la Loi de 1996 [L.C. 1993, ch. 15]).
| a) L'ancienne Loi |
[52]Selon l'ancienne Loi, le droit au brevet et, par conséquent, la validité du brevet, étaient fondés sur le principe du «premier inventeur», défini à l'article 43 de l'ancienne Loi. Le commissaire aux brevets, lorsqu'il devait trancher entre des demandes de brevet en conflit pour la même invention, était tenu de déci der du premier inventeur selon la procédure décrite à l'article 43.
[53]Ni l'avocat des demanderesses ni celui des défendeurs fait valoir que l'ancienne Loi, et par conséquent le principe du «premier inventeur», s'appliquait pour établir la validité du brevet en litige. J'accepte la position des deux avocats, étant donné que la demande de brevet a été déposée après l'entrée en vigueur des modifications du 1er octobre 1989.
| b) La Loi de 1989 |
[54]Les modifications de la Loi entrées en vigueur le 1er octobre 1989 ont rendu le droit canadien des brevets conforme au droit de 43 autres pays, tous membres comme le Canada du Traité de coopération en matière de brevets [19 juin 1970, [1990] R.T. Can. no 22]2. Le changement le plus important à l'égard de l'espèce est le remplacement du principe du «premier inventeur» de l'ancienne Loi par celui du «premier déposant». En conséquence, les dates critiques pour l'appréciation de la nouveauté sont devenues la d ate de dépôt et la date de priorité, soit respectivement la date où la demande est déposée au Canada et, selon la définition de l'article 2 [mod. par L.R.C. (1985) (3e suppl.), ch. 33, art. 1], la date où une demande de brevet décrivant la même invention a été déposée pour la première fois dans un autre pays conformément à l'article 28 [mod., idem , art. 10]. Le délai de grâce pour le dépôt au Canada a été fixé à 12 mois après la date de priorité3.
[55]L'avocat des demanderesses a spécifiqueme nt porté à l'attention de la Cour le fait que la demande de brevet avait été déposée au Canada le 19 décembre 1989 et le brevet délivré le 7 février 1995. Par conséquent, la version de la Loi qu'appliquait le commissaire aux brevets au cours de la période d'examen de la demande jusqu'à la délivrance du brevet était la Loi de 1989.
| c) La Loi de 1996 |
[56]Les modifications de la Loi de 1996, entrées en vigueur le 1er octobre 1996, après la délivrance du brevet, faisai ent partie d'une Loi intitulée Loi d'actua-lisation du droit de la propriété intellectuelle4. La définition de la «date de priorité» de l'article 2 de la Loi a été abrogée [L.C. 1993, ch. 15, art. 26]. Les définitions suivantes l'ont remplacée [«date de dépôt» (édicté, idem )]:
2. [. . .]
| «la date de la revendication» (n'a jamais été officielle-ment traduit) |
| «date de dépôt» La date du dépôt d'une demande de brevet, déterminée conformément à l'article 28. |
[57]Les termes définis figurent en ordre inverse dans le nouveau paragraphe 28(1) [mod. par L.C. 1993, ch. 15, art. 33] et dans le nouvel article 28.1 [édicté, idem ] et ils prévoient:
28. (1) La date de dépôt d'une demande de brevet est la date à laquelle le commissaire reçoit les documents, renseignements et taxes réglementaires prévus pour l'appli-cation du présent article. S'ils sont reçus à des dates différentes, il s'agit de la dernière d'entre elles.
[. . .]
28.1 (1) La date de la revendication d'une demande de brevet est la date de dépôt de celle-ci, sauf si:
| a) la demande est déposée, selon le cas: |
| (i) par une personne qui a antérieurement déposé de façon régulière, au Canada ou pour le Canada, ou dont l'agent, le représentant légal ou le prédécesseur en droit l'a fait, une demande de brevet divulguant l'objet que définit la revendication, |
| (ii) par une personne qui a antérieurement déposé de façon régulière, dans un autre pays ou pour un autre pays, ou dont l'agent, le représentant légal ou le prédécesseur en droit l'a fait, une demande de brevet divulguant l'objet que définit la revendication, dans le cas où ce pays protège les droits de cette personne par traité ou convention, relatif aux brevets, auquel le Canada est partie, et accorde par traité, convention ou loi une protection similaire aux citoyens du Canada; |
| b) elle est déposée dans les douze mois de la date de dépôt de la demande déposée antérieurement; |
| c) le demandeur a présenté, à l'égard de sa demande, une demande de priorité fondée sur la demande déposée antérieurement. |
(2) Dans le cas où les alinéas (1)a) à c) s'appliquent, la date de la revendication est la date de dépôt de la demande antérieurement déposée de façon régulière.
[58]L'article 28.2 [édicté, idem ], nouveau lui aussi, aborde pour la première fois l'effet de la divulgation antérieure de l'objet défini par la revendication «qui l'a rendu accessible au public au Canada ou ailleurs». Le nouvel article 28.3 [édicté, idem ] codifie pour la première fois la notion d'«évidence».
[59]Le paragraphe 28.2(1) et l'article 28.3 prévoient:
28.2 (1) L'objet que définit la revendication d'une demande de brevet ne doit pas:
| a) plus d'un an avant la date de dépôt de celle-ci, avoir fait, de la part du demandeur ou d'un tiers ayant obtenu de lui l'information à cet égard de façon directe ou autrement, l'objet d'une communication qui l'a rendu accessible au public au Canada ou ailleurs; |
| b) avant la date de la revendication, avoir fait, de la part d'une autre personne, l'objet d'une communication qui l'a rendu accessible au public au Canada ou ailleurs; |
| c) avoir été divulgué dans une demande de brevet qui a été déposée au Canada par une personne autre que le demandeur et dont la date de dépôt est antérieure à la date de la revendication de la demande visée à l'alinéa (1)a); |
| d) avoir été divulgué dans une demande de brevet qui a été déposée au Canada par une personne autre que le demandeur et dont la date de dépôt correspond ou est postérieure à la date de la revendication de la demande visée à l'alinéa (1)a) si: |
| (i) cette personne, son agent, son représentant légal ou son prédécesseur en droit, selon le cas: |
| (A) a antérieurement déposé de façon régulière, au Canada ou pour le Canada, une demande de brevet divulguant l'objet que définit la revendication de la demande visée à l'alinéa (1)a), |
| (B) a antérieurement déposé de façon régulière, dans un autre pays ou pour un autre pays, une demande de brevet divulguant l'objet que définit la revendication de la demande visée à l'alinéa (1)a), dans le cas où ce pays protège les droits de cette personne par traité ou convention, relatif aux brevets, auquel le Canada est partie, et accorde par traité, convention ou loi une protection similaire aux citoyens du Canada, |
| (ii) la date de dépôt de la demande déposée antérieurement est antérieure à la date de la revendication de la demande visée à l'alinéa a), |
| (iii) à la date de dépôt de la demande, il s'est écoulé, depuis la date de dépôt de la demande déposée antérieurement, au plus douze mois, |
| (iv) cette personne a présenté, à l'égard de sa demande, une demande de priorité fondée sur la demande déposée antérieurement. |
[. . .]
28.3 L'objet que définit la revendication d'une demande de brevet ne doit pas, à la date de la revendication, être évident pour une personne versée dans l'art ou la science dont relève l'objet, eu égard à toute communication:
| a) qui a été faite, plus d'un an avant la date de dépôt de la demande, par le demandeur ou un tiers ayant obtenu de lui l'information à cet égard de façon directe ou autrement, de manière telle qu'elle est devenue accessible au public au Canada ou ailleurs; |
| b) qui a été faite par toute autre personne avant la date de la revendication de manière telle qu'elle est devenue accessible au public au Canada ou ailleurs. |
[60]Enfin, les modifications de 1996 [article 55] ont ajouté à la Loi les dispositions transitoires suivantes:
| (b) the provisions of this Act, including subsection 27(2), as they read immediately after this section came into force. |
78.4 (1) Les demandes de brevet déposées le 1er octobre 1989 ou par la suite, mais avant l'entrée en vigueur du présent article, sont régies par le paragraphe 27(2) dans sa version antérieure à l'entrée en vigueur du présent article et par les dispositions de la présente loi, y compris le paragraphe 27(2), dans leur version ultérieure à l'entrée en vigueur du présent article.
(2) Any matter arising in respect of a patent issued on the basis of an application filed on or after October 1, 1989, but before this section came into force, shall be dealt with and disposed of in accordance with
| (a) subsection 27(2) as it read immediately before this section came into force; and |
| (b) the provisions of this Act, including subsection 27(2), as they read after this section came into force and as amended from time to time. [Emphasis added.] |
| (d) Positions of the parties and conclusion |
[61]Counsel for the plaintiffs urged that the plain meaning of subsection 78.4(2) supports the position that the 1989 Act should be applied to issues relating to the validity of the patent and perhaps also to issues of infringement of the patent.
[62]As previously noted, the application for the patent was filed in Canada on December 19, 1989. The patent issued on February 7, 1995. Thus, the version of the Act that was before the Commissioner of Patents at all times when the application for the patent was being considered was the 1989 Act. Further, counsel for the plaintiffs noted that the transitional provision quoted above, in particular subsection 78.4(2), provides that any matter arising in respect of a patent issued on the basis of an application filed in the time frame here at issue should be dealt with in accordance with the former subsection 27(2) and the provisions of the 1996 Act, including the new subsection 27(2) [as am. by S.C. 1993, c. 15, s. 31]. He urged that the validity of the patent was a matter not arising after the 1996 Act came into force but rather was a matter that arose immediately upon the issuance of the patent, or at the very latest at the time this action was commenced which is to say, May 2, 1995, a further date within the period when the 1989 Act remained in force. Counsel urged that the transitional provision should not be interpreted so as to render it possible that a patent, valid on the date it was issued, was subsequently invalidated by reason of the coming into force of the 1996 Act.
[63]Counsel for the plaintiffs further alleged that the issue of applicable law was of critical importance because, if the 1989 Act were determined to be applicable, the citations to be considered in the determination of anticipation and obviousness would be reduced. Counsel pointed out that, of the bases for anticipation and obviousness here alleged, two United States patents (the "Baize" and the "Arundale" patents) and the alleged commercial sale in the United States of W-3053 in the period commencing as early as December 1987, neither the Baize patent, issued on May 31, 1988, nor the alleged commercial sale of W-3053, would be relevant under the 1989 Act if I were to determine, as counsel urged I should, that there was no commercial sale of W-3053 prior to December 23, 1987.
[64]Finally, counsel for the plaintiffs urged that since the 1989 Act did not change the law as to obviousness, in contrast with the 1996 Act which at the very least codified the judicially defined law as to obviousness, the Arundale patent would not, of itself, be sufficient to establish obviousness and thus would not invalidate the patent.
[65]Counsel for the defendants urged that, on all issues, the 1996 Act should be applied. In particular, he urged that the issue of validity of the patent was, in the terms of the transitional provision, subsection 78.4(2) quoted above, a "matter arising" on the day on which this Court is called upon to determine the validity of the patent and that I should thus apply, not only subsection 27(2) of the 1989 Act, but also the provisions of the 1996 Act, including subsection 27(2) as it read after the coming into force of the 1996 Act. Further, he urged, I should determine the critical date regarding citations as to anticipation and obviousness, to be one year before the filing of the application for the patent, which took place on December 19, 1989. Thus, he urged, both the Baize patent and the alleged commercial sale of W-3053 in December 1988 are valid citations.
[66]I adopt the position urged by counsel for the defendants. Parliament entitled the amendments reflected in Chapter 15 of the Statutes of Canada, 1993, the Intellectual Property Law Improvement Act. Clearly, Parliament envisaged the changes that it adopted as improvements to the Patent Act and to other statutes. I am satisfied that it would be perverse to adopt an interpretation of section 78.4, as enacted with the 1996 amendments, that would preserve in force almost five years after that section came into force and more than eight years after it was enacted, a regime of law that Parliament considered to be in need of improvement, if another interpretation is reasonably open. I am satisfied that another interpretation is reasonably open and is to be preferred. The question of when the matters here in issue arose is, I am satisfied, irrelevant. The only relevant consideration is that, whenever they arose, they arose, to paraphrase subsection 78.4(2), in respect of a patent issued on the basis of an application filed after October 1, 1989 and before October 1, 1996. Thus this action should be dealt with and disposed of in accordance with subsection 27(2) of the 1989 Act and the provisions of the 1996 Act, including subsection 27(2). References in the balance of these reasons to the "Act" should therefore be read as to the Patent Act as it read following the coming into force of the 1996 amendments.
| (2) Validity of the Patent |
| (a) Presumption of validity |
[67]Subsection 43(2) [as am. by S.C. 1993, c. 15, s. 42] of the Act reads as follows:
43. . . .
(2) After the patent is issued, it shall, in the absence of any evidence to the contrary, be valid and avail the patentee and the legal representatives of the patentee for the term mentioned in section 44 or 45, whichever is applicable.
Subsection 43(2) of the Act is essentially the same as the equivalent portion of section 43 in the 1989 Act.
[68]In Diversified Products Corp. v. Tye-Sil Corp.,5 Mr. Justice Décary, commenting on an earlier iteration of the presumption of validity provision of the Act, wrote at page 359:
. . . in my view, the most accurate description of the presumption is that of Pratte J. (as he then was) in the case of Rubbermaid (Canada) Ltd. v. Tucker Plastic Products Ltd. . . .:
| It is clear however, that this section "deals only with the incidence of proof, not with the standard of proof. It shows on whom the burden lies to satisfy the court, and not the degree of proof which he must attain":. . . . Moreover, once the party attacking the patent has introduced evidence, the Court, in considering this evidence and in determining whether it establishes the invalidity of the patent, must not take the presumption into account. It cannot be said that the presumption created by s. 47 is, as a rule, either easy or difficult to overcome; in some cases, the circumstances may be such that the presumption will be easily rebutted, while, in other cases the same result may be very difficult or even impossible to obtain. |
See also, Windsurfing Int'l Inc. v. Les entreprises Hermano Ltée. . . .
The onus, which was on the appellant, can therefore be put as follows: applying the tests applicable to the pleas of anticipation and obviousness, which are not easy tests to meet as we shall see, did the appellant prove, on the usual standard of balance of probabilities, that the patent was invalid as having been anticipated or as being obvious? [Citations omitted.]
[69]The defendant Canwell attacks the validity of the patent on four grounds: first, anticipation based upon the "Baize patent" earlier referred to in the quotation from the patent that is included in paragraph 4 of these reasons [omitted], U.S. Patent No. 2731393, the "Arundale patent", and Quaker Chemical's sale of the product designated W-3053, earlier referred to; secondly, on the basis of obviousness based upon the Baize, Arundale and W-3053 references; thirdly, on the basis of insufficiency in the disclosure of the patent; and finally, on the basis of an alleged material misrepresentation in the petition filed with the application for the patent. Against the foregoing guidance on the impact of the presumption of validity, each of the four attacks on the validity of the patent are considered in turn in the following paragraphs of these reasons.
| (b) Anticipation or lack of novelty |
[70]The relevant portion of subsection 28.2(1) [as enacted by S.C. 1993, c. 15, s. 33] of the Act reads as follows:
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; |
"Claim date" as referred to in paragraph 28.2(1)(b) is defined in section 2 of the Act by reference to section 28.1. I will not pursue the definition of that term further because I am satisfied that against that term both the Baize patent and the Arundale patent are proper citations. The citation of prior use of W-3053 is governed by paragraph 28.2(1)(a) which refers to the "filing date" which, as earlier indicated, for the patent in suit, was December 19, 1989.
[71]In Beloit Can. Ltée/Ltd.. v. Valmet Oy,6 Mr. Justice Hugessen, for the Court, wrote at page 297:
The relevant statutory provision for the purpose of assessing the plea of anticipation in the present proceedings is para. 28(1)(b) of the Patent Act. That paragraph directs an inquiry as to whether the claimed invention is
28(1) . . .
| (b) . . . described in any patent or in any publication printed in Canada or in any other country more than two years before presentation of the petition . . . |
. . .
It will be recalled that anticipation, or lack of novelty, asserts that the invention has been made known to the public prior to the relevant time. The inquiry is directed to the very invention in suit and not, as in the case of obviousness, to the state of the art and the common general knowledge. Also, as appears from the passage of the statute quoted above, anticipation must be found in a specific patent or other published document; it is not enough to pick bits and pieces from a variety of prior publications and to meld them together so as to come up with the claimed invention. One must, in effect, be able to look at a prior, single publication and find in it all the information which, for practical purposes, is needed to produce the claimed invention without the exercise of any inventive skill. The prior publication must contain so clear a direction that a skilled person reading and following it would in every case and without possibility of error be led to the claimed invention. Where, as here, the invention consists of a combination of several known elements, any publication which does not teach the combination of all the elements claimed cannot possibly be anticipatory.
It is to be noted that Mr. Justice Hugessen, in the foregoing quotation, was commenting on anticipation or lack of novelty under the terms of the old Act that also contemplated anticipation or lack of novelty based upon prior public use or sale in Canada.
[72]In Pfizer Canada Inc. v. Apotex Inc.,7 Mr. Justice Richard as he then was, after reciting the foregoing quotation from Beloit, as adopted by Mr. Justice Décary in Tye-Sil ,8 commented on the reasons of Mr. Justice Décary, concurred in by Justices Marceau and Pratte, otherwise than on the issue of obviousness, to the following effect at page 553 of Pfizer :
He [Mr. Justice Décary] added . . . that when prior knowledge or use is alleged, "evidence of this character should be subjected to the closest scrutiny" and "anyone claiming anticipation on that basis assumes a weighty burden".
He [Mr. Justice Décary] cited the following principles which should be applied to determine whether the prior use or prior art anticipated the invention:
| 1) does it teach the combination of all the elements claimed; |
| 2) does it give the same knowledge as the specification of the invention itself; |
| 3) does it contain clear and unmistakable directions so to use it; |
| 4) whatever is essential to the invention or necessary or material for its practical working and real utility must be found substantially in the prior publication; and |
| 5) an impractical and inoperable device cannot be an anticipation. |
[73]In Free World Trust v. Électro Santé Inc.,9 Mr. Justice Binnie writing for the Court, and after affirming the test for anticipation from Beloit as one that is "difficult to meet", continued at paragraph 26:
The legal question is whether the Solov'eva article [here the Baize patent or, the Arundale patent] contains sufficient information to enable a person of ordinary skill and knowledge in the field to understand, without access to the two patents, "the nature of the invention and carry it into practical use without the aid of inventive genius but purely by mechanical skill". . . . In other words, was the informa-tion given by Solov'eva "for [the] purpose of practical utility, equal to that given in the patents in suit"? (Consolboard Inc. v. MacMillan Bloedel (Sask.) Ltd.) . . . or as was memorably put in General Tire & Rubber Co. v. Firestone Tyre & Rubber Co., . . .:
A signpost, however clear, upon the road to the patentee's invention will not suffice. The prior inventor must be clearly shown to have planted his flag at the precise destination before the patentee. [Citations omitted.]
The principles that can be derived from Beloit10 and Free World Trust11 would appear to apply equally to anticipation by prior public use or sale. In Tye-Sil,12 Mr. Justice Décary wrote at pages 360 and 361:
As was mentioned by Urie J. in Beecham, . . ., the defences of prior knowledge, prior use, prior publication and prior sale are "very much intermingled" and are referred to as "anticipation". I have noted throughout the cases that there does not appear to be any distinction in principle between these various defences and that what is said with respect, for example, to anticipation through prior knowledge is applicable, mutatis mutandis, to anticipation through prior publication. [Citation omitted, emphasis added.]
[74]Counsel for the defendants referred me to a number of English cases that would appear to stand for the proposition that the test for anticipation by public use or sale is more easily met than the test enunciated in the foregoing cases. The last quotation above from Tye-Sil is, I am satisfied, binding on me and I will therefore not engage in an analysis of the cases to which counsel referred me.
[75]I turn then to a brief review of the cited prior art and the allegation of commercial sale of W-3053 prior to December 23, 1987 and the acknowledged commercial sale at least as early as the spring of 1988.
| (i) The Baize Patent |
[76]The Baize patent issued out of the United States Patent Office on May 31, 1988. It is entitled "Method and Apparatus for Sweetening Natural Gas". The description of the preferred embodiments of the Baize patent reads in part as follows:
This invention is based on the discovery that sour natural gas may be sweetened by injection of a sweetening solution into the produced gas line from well head through collection and separation systems. The sweetening solution is atomized into the flowing gas stream and reacts with the hydrogen sulphide in line to meet industry requirements. This sweetening method, and the apparatus used to carry it out, can be used with any conventional, i.e., prior art, system of apparatus for collection of natural gas and separation of condensate therefrom.
[77]Under a heading "A Preferred Embodiment of the Method and Apparatus for Sweetening Natural Gas Flowing in the Sales Gas Line from the Gas/Condensate Separation System", the following appears:
The sweetening liquid is a solution comprising 10-50% wt. of formaldyhyde or other low molecular weight aldehyde, such as acetaldehyde, propionaldehyde, butyraldehyde, or the like, or a low molecular weight ketone, such as acetone, methyl ethyl ketone, diethyl ketone, methyl propyl ketone, or the like; 20-80% water; 10-50% methanol; 1-25% amine inhibitor; 0-5% sodium hydroxide or potassium hydroxide, and 2-5% isopropanol, where the percentages total one hundred, and at a pH 6.8-14. The amine inhibitors are water soluble oxidation and corrosion inhibitors including alkyl pyridines, quaternary ammonium salts, alkyl amines, such as mono-,di-, and/or tri-methyl, ethyl, or propyl amines, alkanolamines, such as mono methanol, ethanol, or propanol amines, di-methanol, ethanol, or propanol amines, tri-methanol, ethanol, or propanol amines, dimethyl ethanol amine, methyl diethanol amine, dimethyl amino ethanol, or morpholine.
. . .
In operation, tank 60 [by reference to a drawing] is filled with a sweetening solution of 30% wt. formaldehyde; 30% water; 30% methanol; 5% imidazoline inhibitor; 2.0% sodium hydroxide and 3% isopropanol.
[78]Counsel for the plaintiffs urged that the Baize patent does not anticipate the patent in suit because it discloses the possible use of ketones in place of aldehydes, discloses the possible use of amines other than alkanolamines and does not indicate that a reaction product results from the interaction of the amine, or for that matter a ketone, with the aldehyde. In essence, counsel for the plaintiffs identified the patent, in relation to Baize, as a selection patent that discloses a sweetening solution that, against the test in Beloit,13 a person skilled in the art would not "in every case and without the possibility of error" be led to by Baize.
[79]In Lancashire Explosives Co. v. Roburite Explosives Co.,14 Lord Herschell wrote at page 477:
It is said that Sprengel's Specification pointed to the use of a number of substances as explosives, within which are included the explosives employed by Lamm, the Patentee. Now that may be perfectly true. Sprengel's is an extremely wide Specification . . . . Obviously, it would include the mixing of a vast number of substances. It is what Sir Frederick Abel calls a very, very large class. Within that very, very large class is the much more limited class, to the use of which Lamm confines himself.
Lord Herschell continues at page 478:
. . . it is said there was no invention because these particular nitrates which he uses were amongst a greater number which Sprengel said might be used for explosive purposes. What of that? Is it the less an invention because somebody beforehand has pointed to a number of substances which may be used for explosive purposes, when a chemist comes and selects from amongst them those which, if used in a particular way, will produce an article of commerce better than has been produced before. I really have difficulty in seeing how any answer but one can be given to such a question as that. . . . He [Lamm] has discovered, and he has let the public know, that by taking certain substances and treating them in a particular way he can produce this beneficial result.
[80]To the same effect, Mr. Justice Richard, as he then was, wrote in Pfizer15 at page 556:
The ICI Patent is an originating patent while the Pfizer Patent is a selection patent. The former claims the genus; the second claims the species. ICI's `263 Patent is directed generally to fungicidal triazoles and imidazoles. Fluconazole is not specifically described and neither were its superior and previously unknown efficacy described or known. The ICI Patent did not include the fluconazole compound. ICI was not the first inventor of this compound and never made it.
It is not disputed that fluconazole is encompassed within the broad generic scope of the claims of the ICI Patent and likewise with respect to the processes, but is not specifically identified therein.
I am satisfied that precisely the same could be said here of the patent in suit in relation to the Baize patent.
[81]Counsel for the defendants relied on the following quotation from Canadian Law and Practice Relating to Letters Patent for Inventions.16 At page 90, the learned author noted:
Three general propositions may be asserted: First, a selection patent to be valid must be based on some substantial advantage to be secured by the use of the selected members. (The phrase will be understood to include the case of a substantial disadvantage to be thereby avoided.) Secondly, the whole of the selected members must possess the advantage in question. Thirdly, the selection must be in respect of a quality of a special character that can fairly be said to be peculiar to the selected group.
[82]Counsel for the defendants urged that, against the Baize patent, the patent cannot be said to be valid. I do not agree. The mere commercial success of the plaintiffs' hydrogen sulphide scavenging product line, as demonstrated by the aggressive manner in which this litigation has been pursued by the plaintiffs, attests to the degree to which the patent fulfils Dr. Fox's three propositions.
[83]I am satisfied that the patent must be viewed as an inventive selection over Baize. Put another way, the patent in suit is not anticipated by the Baize patent.
| (ii) The Arundale patent |
[84]The Arundale patent issued January 17, 1956, more than 30 years before the application for the patent in suit was filed. The expert statement of Dr. Peter D. Clark filed on behalf of the defendants,17 describes the disclosure of Arundale in the following terms:
32. Arundale discloses a process for sweetening mixtures of hydrocarbons that contain compositions of sulphur, for example hydrogen sulphide . . . . The process includes contacting the hydrocarbon with a "treating mixture" comprising "an amine, an alkali metal carbonate or bicarbonate, and an aldehyde". . . . The amine is specified as including "primary and secondary alkanolamines. . . . Monoetha-nolamine [MEA] is in the class of compounds "primary alkanolamines". Formaldehyde (in the form of a 37% aquaeous solution known as Formalin) is specified as "especially preferred". . . . Thus, Arundale discloses a treating mixture which comprises an alkanolamine and formaldehyde, which are also the preferred components of the reaction product described in [the patent in suit]. [Cross-references to the Arundale patent omitted.]
[85]As noted by counsel for the plaintiffs, there was no evidence put before the Court that the Arundale patent was ever practised. In such circumstances, "a mere paper anticipation" must "satisfy a very strict test if it is to prevail."18 The foregoing principle was adopted in more colourful language in Wahl Clipper Corporation v. Andis Clipper Co.,19 which Gibson J. cited with approval in Eli Lilly and Co. et al. v. Marzone Chemicals Ltd. et al.,20 in the following words [at page 32]:
. . . it is more important to study those developments of the art which are bright with use in the channels of trade than to delve into abandoned scrap heaps of dust-covered books which tell of hopes unrealized and flashes of genius quite forgotten.
[86]Against the foregoing analysis with regard to anticipation by the Baize patent, I conclude that the Arundale patent, like the Baize patent, does not anticipate the patent in suit. Indeed, I am satisfied that it is even more evident that the Arundale patent does not anticipate the patent in suit.
| (iii) The alleged commercial sale of W-3053 in December of 1987 |
[87] As earlier indicated in these reasons, it was not in dispute before me that W-3053 was in commercial sale at least as early as the spring of 1988. I find the documentary evidence before me with regard to unconditional sales of W-3053 prior to December 23, 1987 to be compelling, particularly when this documentary evidence was corroborated before the Court by the testimony of Mr. Ray Watts, previously referred to in these reasons. While I entertain doubts as to the reliability of Mr. Watts' testimony regardi ng inventorship, and more will be said about that later, I entertain no doubt with regard to the reliability of his testimony on unconditional sales of W-3053 in western Oklahoma prior to December 23, 1987.
[88]Equally, on the evidence before me, there can be no doubt that W-3053, even in December of 1987, was for all intents and purposes the invention described in the patent in suit. The sole issue then is whether the December 1987 and later but still time-relevant sales of W-3053 amounted to a making available to the public in Canada or elsewhere of the subject-matter of the patent.
[89]What was in dispute before me was whether the composition of W-3053 was available to the public prior to December 23, 1987. While much expert testimony before me was directed to the question of whether or not, given the prevailing technology at that time, and the knowledge of persons skilled in the art at the time, W-3053 was capable of being analysed and reproduced, assuming a suitable sample of it could have been obtained, counsel for the plaintiffs urged that the evidence showed that a sample for analysis could not have been obtained. I disagree. At all relevant times, substantial quantities of W-3053 were in the hands of commercial purchasers without any evidence of restrictions on use. I am satisfied that the evidence as a whole as to industry practices demonstrated that a sample for analysis could readily have been obtained.
[90]I found the expert evidence as to efforts at analysis that have been made over the years, including efforts in the context of this litigation, to be ambivalent and, in totality, to be quite unsatisfactory. On behalf of the plaintiffs, Professor Brian Hunter in his reply statement21 wrote at paragraph 6:
As will be set out, due to: (i) the extremely complex nature of the reaction mixture of W-3053; (ii) the limitations of chemical analysis; and (iii) the time dependent degradation of W-3053, it is my opinion that a skilled chemist would not be able to determine the composition of W-3053 nor its starting materials. To do so would take an inordinate amount of skill, a great deal of luck and even then it would only be possible with a fresh sample of W-3053. The sale of W-3053 simply does not provide the same information provided by the Patent. In my opinion, the sale of W-3053 does not anticipate the Patent.
While the final sentence of the foregoing paragraph is a determination for this Court to make, not for Professor Hunter or any other expert witness before the Court, Professor Hunter clearly leaves no doubt as to his expert opinion on the subject.
[91]Professor John MacRae Mellor, on behalf of the defendants, reached a very different conclusion. After carefully reviewing the various efforts made to analyse W-3053 that are disclosed in the evidence, he concluded as follows at paragraph 63 of his expert statement:22
In my opinion:
| (a) based on the available analytical test results, W-3053 contained triazine as a major component and little or no bisoxazolidine; |
| (b) a skilled analytical chemist using only analytical techniques available prior to 1988 would have been able to identify the components of W-3053 that were present in significant quantities, would have identified triazine as a major component and would have attributed the hydrogen sulphide scavenging properties of W-3053 to the triazine; |
| (c) a skilled analytical chemist would have recognized that the triazine component of W-3053 could be produced as a reaction product of monoethanolamine and formaldehyde; |
| (d) it would have been obvious to any competent organic chemist to evaluate the scavenging properties of W-3053 by varying the molar ratios of monoethanolamine and formaldehyde to include 1:1. |
[92]Mr. Justice Décary in Tye-Sil23 wrote at page 363:
It will be useful to recall that when, as here, prior knowledge or use is alleged, "evidence of this character should be subjected to the closest scrutiny" and "anyone claiming anticipation on that basis assumes a weighty burden".
For this proposition, which I am satisfied is determina-tive, Mr. Justice Décary cites Christiani and Nielsen v. Rice.24
[93]Against the foregoing, and considering all of the evidence before the Court regarding attempts to successfully analyse and reconstruct W-3053, I simply cannot conclude that the defendant Canwell has successfully discharged the burden on it to establish that the commercial sales of W-3053 that took place in western Oklahoma prior to the grace period preceding filing of the patent in suit, anticipated the invention disclosed by the patent in that they amounted to a making available to the public in Canada or elsewhere of the subject-matter of the patent.
| (c) Obviousness |
[94]The test for obviousness is set out in section 28.3 [as am. by S.C. 1993, c. 15, s. 33] of the Act. That section reads as follows:
28.3 The subject-matter defined by a claim in an application for a patent in Canada must be subject-matter that would not have been obvious on the claim date to a person skilled in the art or science to which it pertains, having regard to
| (a) information disclosed 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 information became available to the public in Canada or elsewhere; and |
| (b) information disclosed before the claim date by a person not mentioned in paragraph (a) in such a manner that the information became available to the public in Canada or elsewhere. |
[95]The test for obviousness was characterized by Mr. Justice Hugessen in Beloit25 in the following terms at page 294:
The test for obviousness is not to ask what competent inventors did or would have done to solve the problem. Inventors are by definition inventive. The classical touchstone for obviousness is the technician skilled in the art but having no scintilla of inventiveness or imagination; a paragon of deduction and dexterity, wholly devoid of intuition; a triumph of the left hemisphere over the right. The question to be asked is whether this mythical creature (the man in the Clapham omnibus of patent law) would, in the light of the state of the art and of common general knowledge as at the claimed date of invention, have come directly and without difficulty to the solution taught by the patent. It is a very difficult test to satisfy.
Referring to section 28.3 of the Act quoted above, on the facts of this matter the reference in the foregoing quotation to "at the claimed date of invention," should now be to the "claim date", defined in section 2 of the Act to mean the date of a claim in an application for a patent in Canada, as determined in accordance with section 28.1 of the Act.
[96]In Bayer Aktiengesellschaft v. Apotex Inc.,26 Mr. Justice Lederman of the Ontario Court of Justice, General Division, wrote at pages 80 and 81:
There appears, however, to be a significant difference in the abilities of the English hypothetical skilled technician and the Canadian one. Indeed, making inquiries or testing, seems to be something outside the ken of the notional Canadian skilled technician. In Cabot Corp. v. 318602 Ontario Ltd. . . ., Rouleau J. [of this Court] quoted H.G. Fox in Canadian Law and Practice Relating to Letters Patent for Inventions. . . as stating in part:
In order that a thing shall be `obvious', it must be something that would directly occur to someone who was searching for something novel, a new manufacture, or whatever it might be, without the necessity of his having to do any experimenting or serious thought, or research, whether the research be in the laboratory or amongst literature.
(My emphasis.) Thus, although one would normally imagine that this mythical person's laboratory is filled with mythical test tubes and Petri dishes and that his or her daily life is spent in experimentation, for the purposes of this legal exercise, no research of any kind can be contemplated. So, although it may have been logical to an actual skilled person at the time, based on the state of the art, to conduct certain testing, that is not open to the mythical skilled technician. The mythical researcher cannot have an inquiring or thinking mind which ultimately would lead him or her to the answer but rather he or she is expected to instantly and spontaneously exclaim, without more, "I already know the answer and it is obvious". Nor is it appropriate to say that there were significant telltales which pointed the way for the mythical expert or that there were sufficient clues which made the invention "worth a try". In Farbwerke Hoechst Aktiengesellschaft Vormals Meister Lucius & Bruning v. Halocarbon (Ontario) Ltd. . . . Collier J. [of this Court] in rejecting the "worth a try" test stated:
Using the magnifying spectacles of hind-sight (a half borrowed phrase), it is easy to say that any experiment, if time and expense are unlimited . . . is or was worth a try.
On appeal, the Supreme Court of Canada affirmed this position . . . and stated at p. 155:
Very few inventions are unexpected discoveries. Practically all research work is done by looking in directions where the "state of the art" points. On that basis and with hindsight, it could be said in most cases that there was no inventive ingenuity in the new development because everyone would then see how the previous accomplishments pointed that way.
Presumably, that is why Hugessen J. stated that the question he posed in Beloit . . . about the mythical creature is "a very difficult test to satisfy". [Citations omitted.]
Mr. Justice Lederman's decision was affirmed on appeal27 and leave to appeal to the Supreme Court of Canada was dismissed.28
[97]Taking into account the foregoing authorities to the effect that obviousness is "a very difficult test to satisfy", that the question to be answered is whether the invention disclosed by the patent wa s, in the light of the prior art previously cited and the prior commercial sale of W-3053 "plain as day" or "crystal clear" to a technician skilled in the art at the date of the invention, I simply cannot conclude, based on the totality of the evidence bef ore me, that the defendants have discharged their burden to establish that the invention disclosed by the patent was obvious on the claim date in relation to the patent to a person skilled in the art to which the patent pertains such that they would have come "directly and without difficulty" to the solution taught by the patent.
[98]Counsel for the defendants drew the Court's attention to earlier decisions in the European Patent Office and in a United States court with respect to, in the fir st case, a patent application, and in the latter case, a patent for the invention here at issue. Both those decisions were adverse to the plaintiffs' interest in this action. Given the unusual circumstances surrounding those decisions, as brought to my att ention by counsel for the plaintiffs during the course of the trial of this matter, I conclude that neither of those decisions is of any aid to the defendants in any aspect of this matter.
| (d) Insufficiency of the disclosure of the patent |
[99]The relevant portions of subsection 27(3) [as am. by S.C. 1993, c. 15, s. 31] of the Act read as follows:
27. . . .
(3) The specification of an invention must
| (a) correctly and fully describe the invention and its operation or use as contemplated by the inventor; |
| (b) set out clearly the various steps in a process, or the method of constructing, making, compounding or using a machine, manufacture or composition of matter, in such full, clear, concise and exact terms as to enable any person skilled in the art or science to which it pertains, or with which it is most closely connected, to make, construct, compound or use it; |
. . .
| (d) in the case of a process, explain the necessary sequence, if any, of the various steps, so as to distinguish the invention from other inventions. |
[100]In Société des Usines Chimiques Rhône- Poulenc et al. v. Jules R. Gilbert Ltd. et al.,29 Mr. Justice Thurlow, as he then was, wrote at pages 191-192:
I had occasion in Minerals Separation North American Corporation v. Noranda Mines, Limited,. . . to deal with the requirements of [an earlier provision equivalent to subsection 27(3) of the Act]. While my judgment in that case was reversed there was no dissent from my comments on these requirements. There I said, at page 316:
Two things must be described in the disclosures of a specification, one being the invention, and the other the operation or use of the invention as contemplated by the inventor, and with respect to each the description must be correct and full. The purpose underlying this requirement is that when the period of monopoly has expired the public will be able, having only the specification, to make the same successful use of the invention as the inventor could at the time of his application. The description must be correct; this means that it must be both clear and accurate. It must be free from avoidable obscurity or ambiguity and be as simple and distinct as the difficulty of description permits. It must not contain erroneous or misleading statements calculated to deceive or mislead the persons to whom the specification is addressed and render it difficult for them without trial and experiment to comprehend in what manner the invention is to be performed. It must not, for example, direct the use of alternative methods of putting it into effect if only one is practicable, even if persons skilled in the art would be likely to choose the practicable method. The description of the invention must also be full; this means that its ambit must be defined, for nothing that has not been described may be validly claimed. The description must also give all information that is necessary for successful operation or use of the invention, without leaving such result to the chance of successful experiment, and if warnings are required in order to avert failure such warnings must be given. Moreover, the inventor must act uberrima fide and give all information known to him that will enable the invention to be carried out to its best effect as contemplated by him. [Emphasis in original.]
[101]The defendant Canwell alleged a number of insufficiencies in the patent which are summarized, fairly I think, on behalf of the plaintiffs as follows:
- first, tri-alkanolamines do not form reaction products as disclosed in the patent;
- second, precipitates occur following a reaction between hydrogen sulphide and triazine, itself the reaction product of MEA and formaldehyde, and the reality of resulting precipitates simply is not disclosed in the patent;
- third, one of the by-products of the reaction between hydrogen sulphide and triazine, namely, MEA reacts with carbondioxide and thus triazine is not selective as claimed in the patent;
- fourth, a molar ratio of 1:3 of MEA to formaldehyde is more efficient in scavenging, and thus is preferred over molar ratios with less formaldehyde-like substances in them, notwithstanding assurances to the contrary in the patent; and
- fifth and finally, the efficacy of the hydrogen sulphide reaction production is impacted by the temperature and pressure at which the reaction occurs and this simply is not disclosed in the patent.
[102]Counsel for the defendants urged that the evidence before me supported all of the foregoing allegations and I agree that, to a greater or lesser degree, that is correct.
[103]In Consolboard Inc. v. MacMillan Bloedel (Sask.) Ltd.,30 Mr. Justice Dickson, as he then was, for the Court, wrote at page 523-524:
It is, in my view, contrary to the spirit of these judgments [judgments previously referred to] to split up s. 36(1) [a predecessor to subsection 27(3) of the Act] into parts and require a standard for each part. To quote Fox . . .
| The persons to whom the specification is addressed are "ordinary workmen", ordinarily skilled in the art to which the invention relates and possessing the ordinary amount of knowledge incidental to that particular trade. The true interpretation of the patent is to be arrived at by a consideration of what a competent workman reading the specification at its date would have understood it to have disclosed and claimed. |
The rule had been explicitly endorsed by this Court in . . . [earlier cases cited] as follows:
***If one has to look at first principles and see what the meaning of the specification is*** why is a specification necessary? It is a bargain between the State and the inventor: the State says, "If you will tell what your invention is and if you will publish that invention in such a form and in such a way as to enable the public to get the benefit of it, you shall have a monopoly of that invention for a period of fourteen years." That is the bargain. The meaning which I think, in my view of the patent law, has always been placed on the object and purpose of a specification, is that it is to enable, not anybody, but a reasonably well informed artisan dealing with a subject-matter with which he is familiar, to make the thing, so as to make it available for the public at the end of the protected period.
and
| The question here is whether that has been done. Now it appears to me that the mode in which one ought to face that question is to look--and I should say so not only of the specification of a patent, but of every instrument--at the whole of the instrument to see what it means--not to take one isolated passage out of it and make that inconsistent with the general invention, but to see substantially what the inventor really means, and when you arrive at that, then see whether the language is within the test that I have suggested as the proper test to apply to such a specification and is such as will enable a typical workman to give the public the benefit of the invention. [Citations omitted.] |
[104]Counsel for the plaintiffs urged that in recent judgments, courts have demonstrated a reluctance to invalidate patents on the basis of technical objections. He urged that the insufficiencies raised by the defendants are just that, technical objections, not within the substance and spirit of the foregoing guidance provided by the Supreme Court of Canada.
[105]In support of counsel for the plaintiffs' foregoing submission he cited Sandoz Patents Ltd. v . Gilcross Ltd.,31 where Mr. Justice Pigeon, on behalf of the Court, wrote at pages 1346-1347:
The objection is therefore purely technical. The specification in effect fully describes not only the invention, as the learned trial judge found, but also its operation or use. Although, in terms, the various steps are described only for the chloro-ethane process, in fact the same steps are involved when using the bromo-ethane starting material and any person skilled in the art knows that this is what should be expected in the absence of any mention of an anomaly in the behaviour of the bromo-ethane compound. It does not appear to me that a patent should be invalidated on account of such a technicality and I do not think that s. 36(1) so requires. A specification is addressed to persons skilled in the art and, therefore, is to be construed by the standard of what such a person would understand on reading it. The evidence is clear that a competent chemist reading the specification and setting out to prepare thioridazine by the bromo-ethane process would understand that the same steps are to be taken as for the chloro-ethane process.
[106]While the alleged misrepresentations here are quite different from those to which Mr. Justice Pigeon was alluding, I am satisfied that the same principles apply. I am satisfied that the evidence is clear that a person reasonably skilled in the art to which the patent is directed, reading the specification and setting out to utilize the invention, would understand what the inventor really means and would thus be able to give the public the benefit of the invention. Thus, the specification serves the purpose to which it is directed, that being to make available to the public the claimed invention at the end of the protected period.
[107]In the result, this basis to the defendant Canwell's claim to invalidity of the patent also fails.
| (e) Material misrepresentation in the petition |
[108]The defendant Canwell alleges that the inventor identified in the patent, Edward T. Dillon, was not the true inventor but rather, the true inventor was Mr. Ray Watts who appeared as a witness before me and whose testimony is earlier referred to. I indicated in an earlier reference to the testimony of Mr. Watts that I had some reservations about Mr. Watts' testimony in which he claimed to be the inventor of the invention disclosed in the patent. His evidence was clear that he was faced with a problem in his employment in western Oklahoma in the autumn of 1 997. He sought aid and advice from Mr. Dillon. Mr. Dillon provided that aid and advice. Mr. Watts testified that that aid and advice did not immediately solve his problem but led, I am satisfied, Mr. Watts at least impliedly to the contrary, to the solution that came to be known as W-3053. Put at the highest in Mr. Watts' favour, I conclude that at best he was a co-inventor with Mr. Dillon.
[109]Subsection 27(2) of the Act provides, among other things, that the application for a patent must be filed by the inventor or the inventor's legal representative and the application must contain a petition. Section 49 [as am. by R.S.C., 1985 (3rd Supp.), c. 33, s. 19] of the Act deals, once again among other things, with the question of to whom a patent may be granted. Subsection 53(1) provides that a patent is void if any material allegation in the petition is untrue. The same subsection deals with an omission or addition in the specification which will also void the patent if the omission or addition is willfully made for the purpose of misleading. Subsection 53(2) provides relief against an omission or addition to the specification where a court is satisfied that the omission or addition was an involuntary error. No equivalent provision for relief in respect of a material misstatement is provided.
[110]In Apotex Inc. v. Wellcome Foundation Ltd.,32 Mr. Justice Wetston at pages 264-268, under the heading "The Failure to Name the True Inventors", dealt with this issue at some length. He wrote at pages 264-265:
In Beloit Canada Ltd. v. Valmet Oy. . . Walsh J. noted that:
Even without the jurisprudence a careful reading of s. 55(1) [now 53(1)] of the Patent Act, indicates that a patent can be void if any material allegation in the petition of the applicant is untrue. Since this phrase is followed by the word "or", and the concluding phrase "and any such omission or addition is wilfully made for the purpose of misleading" this clearly applies only to the second phrase as the first phrase does not deal with omissions or additions. Subsection (2) allows the court to find that the omission or addition was an involuntary error and to find that the patentee is entitled to the remainder of his patent. It, however, is only applicable to the second and third phrases of ss. (1). What the court is required to find in the present case, which does not concern omissions or additions to the specifications or drawings, is whether the erroneous allegations in the petition are "material", no evidence of fraud or intent to mislead being necessary.
Likewise, in my opinion, the issue in this case is not whether the alleged error was made wilfully with the intent to mislead, there being no evidence of this, but rather whether the naming of the inventors is an untrue material allegation. [Citation omitted.]
[111]I am satisfied that the issue here is the same. No allegation was made before me that the alleged error in naming only Mr. Dillon and not including Mr. Watts was made wilfully with the intent to mislead. Mr. Justice Wetston continued:
It has been held that the only allegations which are material to a patent are those which relate to the subject-matter of the patent . . . .
It has also been found that in some circumstances it is immaterial to the public whether all of the co-inventors are named or not: . . . [Citations omitted.]
[112]Mr. Justice Wetston concluded, on the facts before him, that the failure to name certain persons as co-inventors was not a material allegation as contem-plated by section 53 of the Act. I reach the same conclusion here assuming, without deciding, that Mr. Watts was in fact a co-inventor with Mr. Dillon.
[113]Once again, on this ground, the defendant Canwell's allegation of invalidity of the patent fails.
| (f) Conclusion regarding calidity |
[114]To summarize then on the question of validity or invalidity, I conclude that on all of the grounds on which the defendant Canwell alleges invalidity in its counterclaim, the counterclaim fails.
| (3) Infringement |
| (a) The claims in issue |
[115]As earlier noted, the plaintiffs alleged infringement of claims in four series designated as series I to IV. The claims in each series are quoted in full in Schedules III to VI [omitted].
[116]The first series of claims alleged to be infringed consist of claims 44 to 50. Counsel for the plaintiffs acknowledged that claims 45 through 50 are all directly or indirectly dependent on claim 44. For ease of reference, that claim is repeated here:
44. A method for sweetening gaseous or liquid hydrocarbon streams or mixtures thereof containing hydrogen sulfide and organic sulfides comprising contacting said streams with a composition comprising the reaction product of (i) monoethanolamine and (ii) formaldehyde, for a period of time sufficient to sweeten said streams wherein the molar ratio of the said monoethanolamine to said formaldehyde is from about 1:0.25 to about 1:1.5.
Counsel for the plaintiffs urged that the essence of claim 44 is a method for reducing hydrogen sulphide and organic sulphides in gaseous or liquid hydrocarbon streams or mixtures thereof by contacting the stream with a chemical sweetener containing a reaction product of MEA and formaldehyde in molar ratios from about 1:0.25 to about 1:1.5. The patent teaches that, when the molar ratio is about 1:1, the reaction product is triazine. Counsel urged that any sweetening composition composed of MEA and formaldehyde within the range of molar ratios specified falls within the scope of the claim.
[117]Claims 45 to 50 respectively have the following additional limitations: the molar ratios specified in claim 45 are in the range from about 1:1 to about 1:1.5; claim 46 prescribes that the reaction product is triazine; claim 47 specifies that the hydrocarbon stream contacted by the reaction product is a sour natural gas stream; claim 48 specifies contact in a hydrogen sulphide scrubber tower; claim 49 contains the same specification as claim 48 but with a specified rate of application; and claim 50 contains the same specification as claims 48 and 49 but provides that sweetening is allowed to occur until the sweetening composition is spent.
[118]The second series consists of claims 19, 20, 21, 28, 29 and 34. Counsel for the plaintiffs acknow-ledged that claims 20, 21, 28, 29 and 34 are all directly or indirectly dependent on claim 19. Claim 19 reads as follows:
19. A method for selectively reducing the levels of hydrogen sulfide and organic sulfides present in gaseous or liquid hydrocarbon streams or mixtures thereof comprising contacting said streams with a composition comprising a triazine, in an amount and for a period of time sufficient to substantially reduce the levels of hydrogen sulfide and organic sulfides in said streams.
[119]The words "selectively reducing" in claim 19 relate to the preferential reaction of the sweetening composition with hydrogen sulphide and organic sulphides as opposed to with carbon dioxide, a pr eference earlier referred to and alleged on behalf of the defendants to not be entirely accurate. Claim 19 specifically refers to contacting a gaseous or liquid hydrocarbon stream with a composition comprising triazine, without reference to triazine as a reaction product of MEA and formaldehyde.
[120]The dependent claims to claim 19 include the following limitations: first, in the case of claim 20, a specific triazine is specified; second, in the case of claim 21, a composition comprising "at least about" 70% triazine is specified; third in claim 28, the same triazine specified in claim 20 is identified but the hydrocarbon stream is required to be gaseous; fourth, claim 29 repeats the limitations of claim 28 and further requires that the hydro carbon stream be sour natural gas; and fifth, claim 34, once again reflecting the terms of claim 20, further requires that the hydrogen sulphide be "substantially completely" removed.
[121]The third series of claims consists of claims 3 to 6, 8, 10, 13 to 16, 24 and 25, 32 and 36. Counsel for the plaintiffs acknowledged that each of the foregoing claims is dependent directly or indirectly on claim 1. Claim 1, which is quoted in Schedule II [omitted], is repeated here for convenience:
1. A method for selectively reducing the levels of hydrogen sulfide and organic sulfides present in gaseous or liquid hydrocarbon streams or mixtures thereof comprising contacting said stream with a composition comprising the reaction product of (i) an alkanolamine comprising 1 to about 6 carbon atoms with (ii) an aldehyde comprising 1 to about 4 carbon atoms, in an amount and for a period of time sufficient to substantially reduce the levels of hydrogen sulfide and organic sulfides in said streams.
[122]The plaintiffs, for this series, focussed on claim 5 which is further dependent on one or more of claims 2, 3 and 4 which each in turn are dependent on claim 1. Once again, for ease of reference, claim 5 which, as all other claims in series III, is quoted in Schedule V[omitted], is repeated here for ease of reference:
5. A method as in any one of claims 2, 3, or 4, wherein (i) is monoethanolamine and (ii) is formaldehyde.
[123]The remaining claims in series III are, as noted, all directly or indirectly dependent upon claim 1 but have further additional limitations.
[124]Finally, series IV consists of claims 57, 58, 66 and 67. The latter three of those claims are acknowledged to be directly or indirectly dependent on claim 57. Claim 57 which, together with the other series IV claims is quoted in Schedule VI [omitted], is repeated here for ease of reference:
57. A method for selectively reducing the levels of hydrogen sulfide and organic sulfides present in gaseous or liquid streams containing hydrocarbon or mixtures thereof comprising contacting said streams with a composition comprising at least about 70% of a triazine, for a period of time sufficient to substantially reduce the levels of hydrogen sulfide and organic sulfides in said streams.
As with the other series of claims at issue, the remaining claims in this series, 58, 66 and 67, reflect additional limitations to those provided in claim 57.
| (b) Infringement? |
[125]Counsel for the plaintiffs urged that determination of infringement here is without difficulty, given the evidence before the Court as to the nature of Canwell's scavenging process and products. It is clear, he urged, that each of those products comprises a reaction product of MEA and formaldehyde and contains triazine. Further, he urged, the regeneration of Canwell's sweetening products, by the addition of formaldehyde to spent 300-SX, as evidenced in the processes used by the City of Me dicine Hat, directly utilizes the processes claimed in the patent. Against the applicable judicial guidance, counsel urged that infringement is clear. He further submitted that, in the case of processes utilizing the 300-SX product, the infringement is of all of the claims in each of series I to IV and that the same applies with respect to the alternate formulation 300-SX product, sometimes known as 500-SX.
[126]With respect to processes involving Canwell's CW-1000 product, counsel urged that , on a broad interpretation of the evidence before me, all of the claims in series I to III are infringed but not the claims in series IV. On a narrower interpretation, based upon the expert evidence of Dr. Bachelor, he urged that all claims in series II, other than claim 21, are infringed and all claims in series III other than claims 3, 4, 6 and 36 are infringed while, once again, none of the claims in series IV are infringed.
[127]I turn briefly to a review of guidance as to infringement provided by jurisprudence.
[128]In Cabot Corp. v. 318602 Ontario Ltd.,33 Mr. Justice Rouleau wrote at page 164:
An immaterial difference between the patent and the defendants' product is not a defence to infringement. As Mahoney J. stated in Globe-Union Inc. v. Varta Batteries Ltd. . . .
| The defendant's method works. Indeed, it is very likely a commercial improvement on that of the connector patent. . . . |
| The principle to be applied was stated in Lightning Fastener Co., Ltd. v. Colonial Fastener Co. Ltd. et al.,. . . as follows: |
| In each case the substance, or principle, of the invention and not the mere form is to be looked to. It has been stated in many cases that if an infringer takes the principle and alters the details, and yet it is obvious that he has taken the substance of the idea which is the subject matter of the invention, and has simply altered the details, the Court is justified in looking through the variation of details and see [sic ] that the substance of the invention has been infringed and consequently can protect the inventor. And the question is not whether the substantial part of the machine or method has been taken from the specification, but the very different one, whether what is done by the alleged infringer takes from the patentee the substance of his invention. |
| In my view, the defendant has appropriated the invention of the connection patent. [Citations omitted.] |
[129]More recently, in Free World Trust,34 Mr. Justice Binnie wrote at paragraphs 28-31:
The appeal in this Court was essentially directed to the infringement issues. It has been established, at least since Grip Printing and Publishing Co. v. Butterfield . . ., that a patent owner has a remedy against an alleged infringer who does not take the letter of the invention but nevertheless appropriates its substance (or "pith and marrow"). This extended protection of the patentee is recognized in Anglo-Canadian law, and also finds expression in modified form in the United States under the doctrine of equivalents, which is said to be available against the producer of a device that performs substantially the same function in substantially the same way to obtain substantially the same result . . . .
It is obviously an important public policy to control the scope of "substantive infringement". A purely literal application of the text of the claims would allow a person skilled in the art to make minor and inconsequential variations in the device and thereby to appropriate the substance of the invention with a copycat device while staying just outside the monopoly. A broader interpretation, on the other hand, risks conferring on the patentee the benefit of inventions that he had not in fact made but which could be deemed with hindsight to be "equivalent" to what in fact was invented. This would be unfair to the public and unfair to competitors. It is important that the patent system be fair as well as predictable in its operation.
The argument for the respondents is that even if the patents are valid, the appellant is not sticking to the bargain it made. It is pushing the envelope of the doctrine of "substantive infringement" beyond anything disclosed or claimed in its patent specifications. The inventor brought together known components to achieve a useful and ingenious result, but now attacks the respondents' device which brings together different components to achieve a comparable result.
The appeal thus raises the fundamental issue of how best to resolve the tension between "literal infringement" and "substantive infringement" to achieve a fair and predictable result.
Mr. Justice Binnie then goes on to discuss at some length six propositions identified by him that address the issue of how best to resolve the tension between "literal infringement" and "substantive infringement".
[130]Counsel for the plaintiffs urged that I need not address Mr. Justice Binnie's six propositions in these reasons because the evidence here discloses literal infringement. He urged that the Canwell process and sweetening composition are literally within the claims of the patent and involve essentially no minor or inconsequential variation from the invention disclosed by the patent that would require an examination of whether or not, notwithstanding that there was not literal infringement, there was nonetheless substantive infringement. In support of this proposition, he urged that customers of Canwell, such as the City of Medicine Hat, have their gas sweetened using Canwell's composition and using Canwell's process. Those compositions comprise a reaction product of MEA and formaldehyde in molar ratios within the scope of the claims, and contain triazine. In addition, the use o f a regenerated sweetening product by customers such as the City of Medicine Hat, under Canwell's direction, further utilizes the plaintiffs' claimed method.
[131]Counsel for the defendants urged that the evidence before me clearly establishes that Canwell's 300-SX product and the process by which it is used to scavenge hydrogen sulphide is not selective in its reaction with hydrogen sulphide and is therefore outside the scope of the claims of the patent. With respect to Canwell's 500-SX prod uct, by reference to DuPont Canada Inc. v. Glopak Inc.,35 it is argued that Canwell's 500-SX product only recently added to Canwell's product line, is outside the scope of the statement of claim herein in its latest iteration and therefore Canwell's process utilizing this product was never in issue in this action.
[132]Finally, counsel for the defendants urged that Canwell's CW-1000 product and related process does not infringe any claims in suit that limit the molar ratio of MEA to f ormaldehyde to 1:1.5. He urged that I should reject the plaintiff's argument that, even though the molar ratio of MEA to formaldehyde in CW-1000 is above the claimed range of 1:1.5, it nevertheless infringes on the basis that the triazine formed in the CW- 1000 product derived from a molar ratio of 1:1 and the subsequent addition of more formaldehyde does not, of itself, involve further creation of a reaction product of MEA and formaldehyde.
[133]I adopt the position of counsel for the plaintiffs. I am satisfied that both Canwell's 300-SX and CW-1000 products, utilized by the process adopted by Canwell and recommended by it to its customers, infringe the claims of the patent identified in the four series earlier referred to with the exceptions acknowledged on behalf of the plaintiffs even based on a broad interpretation. Canwell's 500-SX product is essentially equivalent to its 300-SX product. Indeed, while the evidence indicates it has been separately identified within Canwell as 500-SX, the ev idence further indicates that it is sold as 300-SX. I am satisfied that Canwell simply cannot escape a finding of infringement by incorporating a minor or inconsequential variation within its 300-SX product and internally redesignating that product. To the extent that the 300-SX product and the process by which it is used infringe the claims of the patent, I am satisfied that the 500-SX product and related process also infringe and are within the scope of this action.
| (c) Infringement by whom? |
[134] Having determined that Canwell's 300-SX, variant 500-SX and CW-1000 products, the processes by which Canwell recommends they be used, and the use in accordance with those recommendations infringe the patent, on the evidence before me, I can only conclude that the City of Medicine Hat, through its acknowledged use of both the 300-SX and CW-1000 products in accordance with processes recommended by Canwell, infringed the patent.
[135]Counsel for the plaintiffs urged that Canwell itself performed the claimed method using its products through the range of services and the advice provided by it as typified by the services and advice provided to the City of Medicine Hat and thus, itself, directly infringed the patent. I cannot agree with this sub-mission. While the extensive system design and opera-tional advice and assistance provided by Canwell to the City of Medicine Hat was impressive and its "cradle to grave" service program was extensive, I cannot conclude that Canwell itself performe d hydrogen sulphide scavenging services for the City of Medicine Hat. The City of Medicine Hat was, at all relevant times, directly in control of scavenging operations conducted at its gas well site, notwith-standing that it was, to a large extent, dependent upon the advice, services and assistance provided by Canwell.
[136]That being said, I am satisfied that the evidence before me clearly demonstrates that Canwell induced infringement by the City of Medicine Hat. In Dableh v. Ontario Hydro,36 the Court wrote at paragraphs 42-43:
We turn first to the issue of inducement. An early Canadian precedent in this area is Copeland-Chatterson Co. v. Hatton et al. The Exchequer Court had this to say, at page 245:
. . . it seems to me, that a declaration at law might be framed to meet the case of one who provided the materials for the infringement, and for his own ends and benefit procured or induced another to infringe a patent . . . I do not see that infringements of patents can in this respect be distinguished from other wrongs . . . .
This early statement has been little qualified over the years and lists the essential ingredients in an inducement action. More recently they were confirmed in Warner-Lambert Co. v. Wilkinson Sword Canada Inc., by Jerome A.C.J. who stated at page 407:
1) That an act of infringement was completed by the direct infringer . . .
2) Completion of the act of infringement was influenced by the acts of the inducer. Without said influence, infringement would not otherwise take place . . .
3) The influence must knowingly be exercised by the seller, i.e. the seller knows his influence will result in the completion of the act of infringement.
These are the three criteria which must be met in an action for inducing infringement, and in each case it is a question of fact as to whether inducement is proved. [Citations omitted.]
[137]Further authority stands for the proposition that where, as here, an article is sold to a customer for only one purpose, together with instructions to use the article in an infringing process, the seller is also liable for infringement.37
[138]Further, once again, there is extensive authority for the proposition that where a defendant such as Canwell provides to a purchaser such as the City of Medicine Hat instructions or directions as to the method of using an invention, it induces infringement of the method claims of a patent.38
[139]I am satisfied that, on the totality of the evidence before me, Canwell is beyond doubt liable for infringement on the basis that it induced infringement by the City of Medicine Hat.
| (4) Paragraph 7(a) of the Trade-marks Act |
[140]The relevant portion of section 7 of the Trade-marks Act39 reads as follows:
7. No person shall
| (a) make a false or misleading statement tending to discredit the business, wares or services of a competitor; |
[141]Mr. Justice MacGuigan, in Asbjorn Horgard A/S v. Gibbs/Nortac Industries Ltd.,40 after quoting at length from the decision of the Supreme Court of Canada in MacDonald et al. v. Vapor Canada Ltd.,41 wrote at page 554:
After the MacDonald decision it might be hard to argue that paragraph 7(e) had any constitutional validity, but it would appear that the remaining paragraphs of section 7 were not found unconstitutional by the Chief Justice.
At page 557, he concludes:
In sum, the effect of the MacDonald case, in my opinion, is that paragraph 7(b) is intra vires of the Parliament of Canada, "in so far as it may be said to round out regulatory schemes prescribed by Parliament in the exercise of its legislative power in relation to patents, copyrights, trade marks and trade names".
However, since this is a dictum of the Chief Justice rather than the ratio decidendi of the case, the matter must be looked at more closely in relation to precedent and principle.
Finally, at page 561, Mr. Justice MacGuigan further concludes:
In paragraph 7(b), Parliament has chosen to protect the goodwill associated with trade marks. In this way, as Chief Justice Laskin put it, it "rounds out" the statutory scheme of protection of all trade marks. As such, the civil remedy which it provides in conjunction with section 53 is "genuinely and bona fide integral with the overall plan of supervision". . . . It has, in sum, a rational functional connection to the kind of trade marks scheme Parliament envisaged, in which even unregistered marks would be protected from harmful misrepresentations.
In my view, paragraph 7(b) is clearly within federal constitutional jurisdiction under subsection 91(2) of the Constitution Act, 1867. [Citations omitted.]
[142]I am satisfied that the same conclusion should be reached with regard to paragraph 7(a) of the Trade-marks Act in so far as it may be said to round out a regulatory scheme prescribed by Parliament in the exercise of its legislative authority in relation to patents, copyrights and trade-marks.
[143]That being said, in light of my conclusions with regard to validity of the patent and infringement by Canwell, this issue is essentially moot. Correspon-dence before me emanating from one or other of the plaintiffs, or a predecessor of one of them, describing Canwell, either directly or by membership in a class as a "potential patent violator" or an "infringer" cannot be said to be correspondence containing false or mis-leading statements tending to discredit the business, wares or services of Canwell.
[144]In the result, Canwell's counterclaim for relief under paragraph 7(a ) of the Trade-marks Act will be dismissed.
RELIEFS
| (1) As Against Canwell and the City of Medicine Hat |
[145]A declaration will go to the effect that, as between the plaintiffs and the defendants, claims 3 to 6, 8, 10, 13 to 16, 19 to 21, 24, 25, 28, 29, 32, 34, 36, 44 to 50, 57, 58, 66 and 67 of the patent, being the claims constituting the four series of claims alleged to be infringed in this action, are valid and have been infringed. A further declaration will go that Canwell has induced or contributed to third parties infringing the same claims. A further declaration will go that Canwell has induced or contributed to third parties infringing the same claims of the patent since the date the patent was laid open, which is to say June 23, 1990, and that the City of Medicine Hat infringed some or all of the aforementioned claims between in or about January 1994 and in or about August 1997.
[146]A permanent injunction will go against the City of Medicine Hat restraining it by itself, its directors or equivalent, officers, employees, agents or otherwise and all those in privity with or under the control of it from infringing the patent.
[147]A permanent injunction will go against Canwell restraining it, by itself, its directors, officers, employees, agents or otherwise, and all those in privity with or under its control from infringing the patent and from manufacturing, importing, exporting, selling or offering for sale, in Canada or from Canada, any Cansweet and equivalent products. That injunction will, of course, reach Mr. Titley as a director and officer of Canwell and as a person in privity with Canwell.
[148]Judgment will go against Canwell requiring it to deliver to the plaintiffs all Cansweet and equivalent products as well as any apparatus, documents or other things within its possession, power or control and which may contribute to Canwell infringing the injunction that will issue against Canwell.
[149]Judgment will go for payment to the plaintiffs of profits of the City of Medicine Hat flowing from its infringement of the patent, as determined by these reasons and for a nominal amount as reasonable compensation for damages sustained by the plaintiffs by reason of the actions of the City, prior to the date of issue of the patent, that would have constituted infringement had the patent issued earlier.
[150]Judgment will go for payment to the plaintiffs of profits of Canwell from the date of issue of the patent and of a nominal amount as reasonable compensation for damages sustained by the plaintiffs by reason of the actions of Canwell after June 23, 1990 and before the date of issue of the patent that induced or contributed to actions of third parties that would have constituted infringement of the patent if the patent had been granted on June 23, 1990, as determined by these reasons.
[151]Judgment will go in favour of the plaintiffs for pre- and post-judgment interest on the awards equal to profits referred to in the two foregoing paragraphs.
[152]The plaintiffs' claim for exemplary damages, not having been pursued at trial, will be dismissed.
[153]I turn then to the issues of the measure of profits and reasonable compensation on which sub-stantial evidence was adduced before me.
| (a) Accounting of Profits |
[154]In Teledyne Industries Inc. et al. v. Lido Industrial Products Ltd.,42 Mr. Justice Addy wrote at page 208 under the heading "Damages and accounting for profits distinguished":
It is most important to remember that the principles governing the awarding of damages to the owner of a patent, which is the remedy ordinarily chosen and which is of course strictly a legal one, must of necessity be quite different from those involved in applying the purely equitable remedy of requiring a wrongdoer to account for all profits derived from his illegal act. In the latter case, the position of the successful plaintiff in so far as any harm or damage he might or might not have suffered is completely irrelevant and, therefore, must not be taken into consideration.
As to the nature of an equitable accounting for profits improperly made in industrial property cases, one finds the following statement in 38 Hals., 3rd ed., pp. 647-8, para. 1059:
. . .
In taking an account, of profits, which is an equitable relief, the damage which the plaintiff has suffered is totally immaterial; the object of the account is to give the plaintiff the actual profits which the defendant has made and of which equity strips him as soon as it is established that the profits were improperly made.
Mr. Justice Addy continued at page 209:
Where the defendant, as in the present case, has been found at fault and has been ordered to account, that obligation to account rests without reservation entirely on him. There exists no onus whatsoever in this respect on the owner of the property. The judgment obliges the defendant to account for the full amount of all revenue received from the use of the property. Negligent or wilful failure to declare any such amounts might well render the infringer guilty of contempt of court. The amount so declared becomes payable to the rightful owner of the property and is subject to be reduced only by such bona fide expenses or disbursements as the infringer can by positive evidence establish as having been actually incurred . . . .
There was no allegation in this matter that the defendant Canwell failed to account for the full amount of all revenue received from its hydrogen sulphide scrubbing operations up to the close of business on November 30, 2000, the close of its 2000 fiscal year. Further, there was no allegation that the City of Medicine Hat failed to fully cooperate in accounting for the full amount of all revenue received from its gas well in the operation of which Canwell's hydrogen sulphide scrubbing process and products were used.
[155]Mr. Justice Addy continued, at page 210 of Teledyne:
Having regard to the principles which should govern an accounting of profits in equity where a person has been illegally deprived of his property in a patent of invention, I find that justice requires that this method [the differential or direct cost accounting method] of determining net profits be adopted. It would be contrary to the basic principles of equity to allow the infringer to deduct, as opposed to the increase of fixed expenses attributable to the infringing operation, such part of all its fixed costs as might be attributable proportionately to the operation. This would constitute in effect unjust enrichment of the infringer.
[156]Finally, Mr. Justice Addy concluded, at page 213:
To summarize: the infringer is entitled to deduct only those expenses, both variable and fixed, which actually contributed to the sums received and for which he is liable to account. It follows that no part or proportion of any expenditure which would have been incurred had the infringing operation not taken place, is to be considered as deductible.
[157]Against the foregoing principles, and based upon the expert statement of Gary Timm, a chartered accountant designated by the Canadian Institute of Chartered Accountants as a specialist in investigative and forensic accounting, the profit claimed by the plaintiffs from February 8, 1995, the day following the issuance of the patent, to November 30, 2000, including pre-judgment interest to May 1, 2000 at rates determined in accordance with the Alberta Judgment Interest Regulations,43 is $8,094,325.39. In arriving at this figure, against the foregoing principles from Teledyne, certain costs that Canwell alleged are proper charges against income and that the plaintiffs urged have not been justified as deductible from income, were not allowed. Those costs include depreciation, legal fees relating to this action, bonuses paid to Mr. Titley, plant processing fees paid to a related company, and certain charges not attributable to the services and products covered by the patent.
[158]On an equivalent basis, the profit claimed against the City of Medicine Hat, once again including pre-judgment interest to May 1, 2001, amounts to $621,421.07.
[159]Not surprisingly, with the aid of an accountant in the employ of the City of Medicine Hat and a chartered accountant and Fellow of the Institute of Chartered Accountants practising in the province of Alberta as a partner in a firm specializing in insolvency, corporate restructuring and forensic and litigation accounting, both of whose experts statements were before the Court, counsel for the defendants put forward a profit figure for the City of Medicine Hat and a net income figure for Canwell during the relevant time, which figures were far lower than those identified on behalf of the plaintiffs. For the City of Medicine Hat, the main items of costs in dispute were administration costs and depletion allowances.
[160]Counsel for the defendants urged that sweetening costs represented only a very small portion of the overall costs of producing the natural gas from the City of Medicine Hat well in question and therefore some reasonable apportionment was appropriate. For this proposition, counsel for the defendants cited Wellcome Foundation Ltd. v. Apotex Inc.44 I am satisfied that the case relied upon by counsel for the defendants is entirely distinguishable on the facts and that no apportionment is here warranted.
[161]In relation to Canwell's profits, counsel for the defendants urged that since Canwell is essentially a single product line and service business, none of the expenses set out in its financial statements would have been incurred had Canwell not carried out the activities that I have found to have induced or contributed to infringement, that Canwell derives no significant revenue from other than inducing or contributing activities and that against this backdrop, no expenses would have been incurred but for the activity that I have found to have induced or contributed to infringement with the result that the differential method of accounting and the full cost method of accounting should produce the same result. On the basis of that analysis, counsel urged a substantially lower profit figure than that put forward on behalf of the plaintiffs..
[162]Counsel for the defendants noted that, as between the contrasting experts' opinions with respect to Canwell, the most significant item is the treatment of Mr. Titley's annual bonuses which, on average, were in very substantial amounts.
[163]Counsel for the defendants referred me to Paula Lishman Ltd. v. Erom Roche Inc.45 where Mr. Justice Rothstein, then of the Trial Division of this Court, in refusing to disallow as expenses amounts paid by way of commission to a sales agent, which amounts were alleged to have been made for the purpose of stripping profits from the corporate defendant, wrote at page 220:
I have some doubt that Ogawa Fashion Planning Corporation is a bona fide sales agent for Erom Roche Inc. However, cash payments were actually made to that company and it appears there was a formal agency agreement signed in 1993. While this action had been commenced at the time, the plaintiffs were in the process of commencing and expanding their business of selling fur garments in Japan at the time.
I cannot, on a balance of probabilities, conclude that the Ogawa commission arrangement was a sham with its sole or primary purpose that of reducing the profits of Erom Roche Inc.
Counsel for the defendants urged that, on the reasoning of Justice Rothstein, I should not, on a balance of probabilities, conclude that bonuses paid to Mr. Titley were a sham with its sole or primary purpose being that of reducing Canwell's profits.
[164]There is some merit in counsel's submissions. Certainly the expert accounting evidence before me on both s ides urged, or at least acknowledged, that there was a legitimate tax-based justification for the very substantial bonus amounts. In each case, it would appear that the bonuses were designed to, or at least had the effect of, reducing Canwell's taxable inc ome to just below the threshold at which a substantially higher corporate income tax rate would apply. The experts were in agreement that actions to achieve such a result were common practice in single-owner companies such as Canwell. That being said, there was absolutely no evidence before me as to any relationship between the bonuses and reasonable compensation to Mr. Titley. Indeed, it would appear, to me at least, that the only income that Mr. Titley drew from Canwell was in the form of bonuses and those in very substantial amounts.
[165]Mr. Titley chose not to testify before me. His evidence as to his role at Canwell and the relationship between that role and his bonus income would have been very enlightening. For the purposes of this aspect of this matter and perhaps one other to which I will shortly refer, I am prepared to draw an adverse inference out of Mr. Titley's failure to testify. On the basis of that adverse inference, I will distinguish Mr. Justice Rothstein's com ments earlier referred to. On the basis of the adverse inference, I conclude, on a balance of probabilities, that the bonuses paid to Mr. Titley were a series of sham transactions with their sole purpose, albeit with a legitimate motivation given the income tax considerations, being that of reducing the profits of Canwell. Whether a secondary motivation existed for the reduction of profits of Canwell is not, in this context, at issue. In the result, I conclude that the disallowance of the bonuses paid to Mr. Titley, as proposed on behalf of the plaintiffs, was entirely appropriate and that Canwell and Mr. Titley simply failed to discharge the onus on them to justify allowance of the bonuses as an expense for the purposes of this matter.
[166]On the basis of all of the foregoing considerations, I adopt without modification the amounts put forward on behalf of the plaintiffs as appropriate in respect of relief in the nature of an accounting of profits of the City of Medicine Hat and Canwell. Those amounts are adopted with the incorporated amounts for pre-judgment interest to May 1, 2001 as the method of calculation and the rates used in calculation were not objected to by counsel for the defendants. If counsel, in consultation with the parties, are unable to settle pre-judgment and post-judgment interest post of May 1, 2001, I may be spoken to.
[167]Profits of Canwell for the period from the 1st of December to the date of judgment may remain at issue. If such be the case, I can be spoken to and they can be made the subject of a supplementary judgment, on consent or otherwise, if required.
| (b) Reasonable compensation for damages |
[168]As regards reasonable compensation from the date of laying open of the Patent to the date of its issue, subsection 55(2) [as am. by S.C. 1993, c. 15, s. 48] of the Act reads as follows:
55. . . .
(2) A person is liable to pay reasonable compensation to a patentee and to all persons claiming under the patentee for any damage sustained by the patentee or by any of those persons by reason of any act on the part of that person, after the application for the patent became open to public inspection under section 10 and before the grant of the patent, that would have constituted an infringement of the patent if the patent had been granted on the day the application became open to public inspection under that section.
Neither counsel was able to cite any jurisprudence directly interpreting subsection 55(2) or its predecessor. That being said, the Supreme Court of Canada in King, The v. Irving Air Chute,46 at page 623, in interpreting a different provision of The Patent Act, 1935 [S.C. 1935, c. 32] in which the expression [at section 19] "a reasonable compensation for the use thereof" appeared, wrote:
The principle applied in the course of administering a similar provision of the Patents Act of Great Britain is that reasonable compensation means such price or consideration "as would be arrived at between a willing licensor and a willing licensee bargaining on equal terms" . . . .
[169]Counsel for the plaintiffs referred me to comments on the concept of a reasonable royalty in AlliedSignal Inc. v. Du Pont Canada Inc.47 where Deputy Justice Heald wrote at page 176 under the heading "What is a reasonable royalty rate?"
A reasonable royalty rate is "that which the infringer would have had to pay if, instead of infringing the Patent, [the infringer] had come to be licensed under the Patent": Unilever PLC v. Procter & Gamble; Consolboard Inc. v. MacMillan Bloedel (Saskatchewan) Ltd. The test is what rate would result from negotiations between a willing licensor and a willing licensee. [Citations omitted.]
[170]In the absence of any evidence whatsoever as to damages sustained and a rate that might result from negotiations of the nature cited by Deputy Justice Heald, counsel for the plaintiffs urged that damages should be equated with profits or income and reasonable compensation should be equated with a reasonable negotiated royalty rate. Further, and in the absence of any evidence whatsoever as to what such a rate might be, counsel urged that a rate of 15% of gross sales in relation to Canwell and 10% of the value of the gas sold by the City of Medicine Hat from the well where the offending process was used should be adopted.
[171]I find the cited case law and the submissions of counsel for the plaintiff to be unhelpful. The Court in King, The v. Irving Air Chute cited earlier, was interpreting a provision incorporating the expression "a reasonable compensation for the use thereof". Here, by contrast, subsection 55(2) of the Act refers to "reasonable compensation for any damage sustained". While the plaintiffs may well have sustained damage by reason of the actions of the defendants during the time between the laying open of the patent application and the grant of the patent, no damage s ustained and no quantum of damages were proved before me. Without evidence, I am not prepared to assume significant damage, as logical as such an assumption might be, or to equate reasonable compensation to some percentage, related to a reasonable royalty rate on the profits or income of Canwell and the city of Medicine Hat in the relevant period. Thus, in this regard, the plaintiffs having simply failed to make out their case for other than nominal compensation, the award as against Canwell and the City of Medicine Hat will be $1.00 each without pre- or post-judgment interest.
| (2) As Against Mr. Titley |
[172]Given Mr. Titley's multi-faceted relationship with Canwell, his entrepreneurial spirit as demonstrated by the evidence before me and th e absence of any direct evidence from him in the course of the trial, a permanent injunction will go against him restraining him, by himself, and by all those in privity with or under his control from infringing the patent and from manufacturing, importing, exporting, selling or offering for sale, in Canada or from Canada, any Cansweet or equivalent products. I am satisfied that such an injunction is justified notwithstanding the fact that, as previously noted, Mr. Titley will be restrained by the injunction against Canwell in all of his relationships with Canwell. I have no confidence that Mr. Titley might not act in a manner inconsistent with my judgment herein outside of all of his relationships with Canwell.
[173]Counsel for the plaintiffs urged that Mr. Titley should be made personally liable, presumably jointly and severally with Canwell, for all amounts for which I have determined Canwell to be liable to the plaintiffs. They urged this proposition on two grounds: first on the basis of principles that can be derived from Mentmore Manufacturing Co., Ltd. et al. v. National Merchandising Manufacturing Co. Inc. et al.;48 secondly, as a director of Canwell, under a fiduciary obligation to act in the best interests of Canwell, and a statutory personal liability pursuant to section 13 of the Alberta Business Corporations Act;49 and finally, by virtue of principles of constructive trust and unjust enrichment through the wrongful acquisition of property.
[174]In Mentmore, Mr. Justice Le Dain, for the Federal Court of Appeal, after reviewing a number of decisions from courts in the United States, wrote at pages 204-205:
I do not think we should go so far as to hold that the director or officer must know or have reason to know that the acts which he directs or procures constitute infringement. That would be to impose a condition of liability that does not exist for patent infringement generally. I note such knowledge has been held in the United States not to be material where the question is the personal liability of directors or officers . . . . But in my opinion there must be circumstances from which it is reasonable to conclude that the purpose of the director or officer was not the direction of the manufacturing and selling activity of the company in the ordinary course of his relationship to it but the deliberate, wilful and knowing pursuit of a course of conduct that was likely to constitute infringement or reflected an indifference to the risk of it. The precise formulation of the appropriate test is obviously a difficult one. Room must be left for a broad appreciation of the circumstances of each case to determine whether as a matter of policy they call for personal liability. Opinions might differ as to the appropriateness of the precise language of the learned trial Judge in formulating the test which he adopted --"deliberately or recklessly embarked on a scheme, using the company as a vehicle, to secure profit or custom which rightfully belonged to the plaintiff"-- but I am unable to conclude that in its essential emphasis it was wrong. [Emphasis added.]
[175]In Paula Lishman,50 Mr. Justice Rothstein, then of the Trial Division of this Court, considered the issue of personal liability of a director against the test for personal liability prescribed by Mentmore. He wrote at page 223:
There has been dishonesty exhibited by Mr. Iwata as a course of conduct with respect to the acquisition of garments from the plaintiffs, the manufacture of garments through Erom Roche Inc. that infringed the plaintiffs' patent and the sale of garments in Japan. There has been a deliberate attempt to strip Erom Roche Inc. of assets to render any judgment obtained by the plaintiffs uncollectible.
Given the deceptive and deliberately reckless behaviour Mr. Iwata has shown with regard to the plaintiffs and the infringement, it is clear that his conduct cannot be justified as merely directing the manufacturing and selling activity of Erom Roche Ltd. in the ordinary course of his relationship to it as a director. Rather, he engaged in the wilful and knowing pursuit of a scheme that constituted infringement and that reflected an indifference to the risk of it. Therefore, on the principles set out in Mentmore, I find that his participation in the infringing acts of Erom Roche give rise to personal liability on his account. [Emphasis added.]
[176]In Ital-Press Ltd. v. Sicoli,51 I reached a similar conclusion to that of Mr. Justice Rothstein. At page 146 of the reasons, I noted:
I found the testimony of Mrs. Sicoli, to reflect arrogance, disrespect for the process of the Court and evasiveness. Like her son, she appeared to ensure that she was in a position to testify only to that which was in the interests of herself and the corporations that are co-defendants and of which I conclude that she is the directing mind.
At page 177, I concluded:
Against the formulation of the test set out in Mentmore, I am satisfied that the evidence before me demonstrates that Mrs. Sicoli, the directing mind behind the enterprises of the corporate defendants throughout the period that is relevant for the purposes of this matter, and apparently, also at the relevant times, the sale [sic] director and shareholder of the corporate defendants, reflected, at the very least, an indifference to the risk that the course of conduct on which the corporate defendants engaged was likely to constitute infringement of copyright or, in turn, reflected an indifference to the risk of the copyright infringement that I have found took place. In the circumstances, I find Mrs. Sicoli personally liable for the infringement . . . . [Emphasis added.]
My decision in Ital-Press is currently under appeal.
[177]It is worth noting certain of the language used in the foregoing citations. Mr. Justice Rothstein referred to "dishonesty", to a "deliberate attempt to st rip [a corporation] of assets to render any judg-ment. . . uncollectible", to "deceptive and deliberately reckless behaviour" and to "willful and knowing pursuit of a scheme that constituted infringement and that reflected an indifference to the risk of it". In Ital-Press , having had the opportunity to view the individual in question as a witness, to observe her conduct and demeanor and to consider her responses to questions, I reflected negatively on her testimony. I found on her part "an indifference to t he risk that the course of conduct on which the corporate defendants engaged was likely to constitute infringement or . . . reflected an indifference to the risk".
[178]By contrast, Mr. Justice MacKay of this Court, in Monsanto Canada Inc. v. Schmeiser,52 wrote at paragraphs 143 to 145:
Bien que M. Schmeiser agisse comme défendeur en l'espèce, son avocat soutient que, comme les activités agricoles étaient légalement celles de la personne morale défenderesse, elle seule devrait être responsable de toute réparation accordée et que M. Schmeiser ne devrait encourir aucune responsabilité personnelle. L'avocat des demanderesses affirme que les sommes payées pour le canola provenant de la récolte de 1998 ont été versées à Percy Schmeiser et en son nom, et non à la compagnie. De plus, les demanderesses citent des décisions qui portent sur la question de la responsabilité personnelle d'un administrateur pour les actes de contrefaçon accomplis au nom d'une personne morale.
Suivant mon interprétation de ces décisions, il est exceptionnel qu'un administrateur soit tenu personnellement responsable dans ces circonstances, du moins en ce qui concerne la condamnation à des dommages-intérêts ou au paiement d'une somme d'argent. Dans l'arrêt Mentmore [. . .] le juge Le Dain, de la Cour d'appel, a confirmé la décision de n'imputer aucune responsabilité personnelle à l'administrateur d'une compagnie dont les actes ne pouvaient raisonnablement être considérés comme débordant le cadre habituel des relations entre un administrateur et sa compagnie ou comme ayant été délibérés au point d'entraîner une contrefaçon, ou encore comme révélant une indifférence totale à l'égard des risques de contrefaçon. Dans la décision Lishman, [. . .] le juge Rothstein, qui est maintenant juge à la Cour d'appel, a jugé personnellement responsable un administrateur dont les agissements révélaient une attitude malhonnête et des tentatives en vue de dépouiller la personne morale de biens qui auraient autrement pu servir à l'exécution de tout jugement qui aurait pu être rendu.
Je ne suis pas convaincu que, bien que délibérée et aussi récalcitrante qu'elle ait pu sembler aux yeux des demanderesses, la conduite de M. Schmeiser était telle que la Cour serait justifiée en l'espèce de le tenir personnellement responsable des dommages-intérêts ou des intérêts. Évidemment, toute réclamation de profits ne peut viser que la personne morale défenderesse. Quant aux autres mesures ordonnées par la Cour en l'espèce, à savoir l'injonction et l'ordonnance de restitution, elles visent les deux défendeurs. M. Schmeiser est la tête dirigeante et l'administrateur actif de Schmeiser Enterprises. Il peut être tenu responsable de l'exécution de ces mesures. La Cour rendra un jugement en dommages-intérêts ou en restitution des bénéfices uniquement contre Schmeiser Enterprises. [Renvois omis; non souligné dans l'original.]
Le juge Mackay n'invoque aucune jurisprudence à l'appui de la phrase que j'ai soulignée dans la citation précédente. Je comprends mal la justification de son affirmation, en particulier dans les cas où, comme en l'espèce, la comptabilisation des bénéfices tient lieu de dommages-intérêts plutôt qu'elle ne s'ajoute aux dommages-intérêts. Je remarque que dans l'affaire Paula Lishman, les demanderesses avaient opté pour la comptabilisation des bénéfices, choix qui ne semble pas avoir empêché le juge Rothstein de décider que la responsabilité personnelle de l'administrateur était engagée.
[179]J'ai souligné précédemment que dans l'affaire Ital-Press , j'avais eu l'avantage de voir la personne que j'avais tenue personnellement responsable comparaître en qualité de témoin. Cette comparution a été un facteur important ayant influé sur ma décision à l'égard de sa responsabilité personnelle. En l'espèce, M. Titley n'a pas comparu comme témoin. Je n'ai disposé d'aucun élément de preuve me permettant de conclure, comme l'a fait le juge Rothstein au sujet de la personne qu'il a jugée personnellement responsable, que M. Titley avait fait preuve de malhonnêteté. De la même manière, aucune preuve ne m'a permis de conclure que la pratique de M. Titley de s'att ribuer des primes importantes constituait une tentative délibérée de sa part pour rendre irrécouvrable toute somme accordée par jugement contre Canwell. Le seul élément de preuve dont je dispose sur l'intention possible de M. Titley n'est aucunement défavo rable. Il établit que, comme beaucoup d'autres personnes, M. Titley et Canwell suivaient des conseils professionnels, dans les limites de la légalité, pour réduire leurs impôts sur le revenu. Il n'y a eu aucune preuve de fraude de la part de M. Titley. Il n'y a eu aucune preuve d'un comportement délibérément insouciant de sa part. Il pourrait y avoir eu un élément de preuve de la mise en oeuvre délibérée et consciente d'un stratagème qui constituait une contrefaçon ou qui témoignait d'une indifférence au ris que de contre-façon, encore que M. Titley aurait raisonnablement pu obtenir, sur la validité ou l'invalidité du brevet, des avis professionnels contraires à mes conclusions.
[180]Dans les présents motifs, j'ai déjà tiré une conclusion défavorable à M. Titley de son refus de comparaître au procès. Elle est intervenue dans le contexte du calcul des bénéfices de Canwell, sujet que j'estime beaucoup moins problématique que de lever le voile de la personnalité juridique pour imposer à M. Title y une responsabilité personnelle. S'agissant de responsabilité personnelle, je ne suis pas disposé à tirer une conclusion défavorable de son défaut de comparaître comme témoin, particulièrement dans la mesure où il a été reconnu devant la Cour qu'il y avai t une justification légitime à la réduction des bénéfices de Canwell, même s'il pouvait y en avoir d'autres.
[181]M'appuyant sur les principes de l'arrêt Mentmore , je conclus que les demanderesses ne peuvent avoir gain de cause sur la responsabilité personnelle de M. Titley.
[182]L'avocat des demanderesses a fait valoir que la conclusion qui précède ne tranche pas de manière décisive la question de la responsabilité personnelle de M. Title y. Il a soutenu que M. Titley, en qualité d'unique administrateur de Canwell, est investi d'une obligation fiduciaire à l'égard de Canwell et, compte tenu de cette obligation, il n'était pas habilité à se verser à lui-même des primes en qualité de propriét aire unique indirect, administrateur unique et président-directeur général, ou dans l'une ou l'autre de ces qualités, dans des circonstances où il avait des motifs raisonnables de croire que Canwell, de ce fait, ne serait plus en mesure de s'acquitter des dettes éventuelles résultant de la présente action.
[183]Sur la base de la preuve établie devant la Cour, je suis convaincu que je puis conclure que M. Titley était au courant des demandes des demanderesses, était au fait de la présente action et, par conséquent, des dettes éventuelles de Canwell. Il devait également être conscient que si la validité du brevet litigieux était reconnue, comme elle l'a été, et s'il ne disposait pas d'un atout caché auquel la Cour ne peut absolument pas penser, le flux des revenus de Canwell et, par conséquent, sa capacité d'exécuter un jugement contre elle à même ses revenus à venir seraient largement compromis.
[184]Je ne reconnais pas le bien-fondé de cette argumentation faite au nom des demanderesses. Si M. Titley a une obligation fiduciaire envers Canwell comme administrateur, il s'agit d'une affaire qui le concerne, lui et la société. Le cas échéant, Canwell pourrait être en bonne position pour demander d es réparations en sa faveur en vertu de l'obligation fiduciaire. Je ne vois par contre aucune raison pour laquelle les demanderesses en l'espèce pourraient elles-mêmes, par la présente action ou par toute autre procédure à ma connaissance, demander l'exécu tion d'une obligation que pourrait avoir M. Titley envers Canwell.
[185]Enfin, les demanderesses ont soutenu que Canwell est une fiduciaire par interprétation en faveur des demanderesses à l'égard des bénéfices réalisés par Canw ell du fait de ses activités de contrefaçon. À cet égard, on a fait valoir que lorsque des paiements, tels que les primes payées par Canwell à M. Titley, sont effectués à M. Titley en tant que président-directeur général, et qu'il est en même temps l'uniqu e actionnaire et administrateur de Canwell, la fiducie par interprétation s'applique à ces paiements.
[186]Dans l'affaire Ductmate Industries Inc. c. Exanno Products Ltd.53, Mme le juge Reed a écrit à la page 21:
Un relevé de bénéfices procède du principe que le défendeur est considéré comme le fiduciaire du demandeur. Dans l'ouvrage Patents for Inventions [. . .] rédigé par T. A. Blanco White, les explications suivantes sont données [. . .]: [traduction] «Un relevé des bénéfices (en vertu duquel l'entreprise du défendeur, dans la mesure où elle se rapporte aux contrefaçons du brevet en cause, est considérée comme ayant été exploitée pour le compte du breveté) [. . .]». Et, dans Fisher and Smart on Patents [. . .]: [traduction] «En choisissant de prendre ces bénéfices, le demandeur ferme les yeux sur la contrefaçon, et adopte ce qui a été fait par le défendeur, qui peut dans l'enquête être considéré comme le mandataire ou le fiduciaire du demandeur.» [Renvois omis.]
Par conséquent, en me fondant sur le raisonnement de Mme le juge Reed et sur la jurisprudence à laquelle elle renvoie, comme Canwell était informée du brevet des demanderesses et, au moins à compter du moment où la présente action a été intentée, de leur demande de réparation par comptabilisation des bénéfices, elle était une fiduciaire des demanderesses si elles obtenaient gain de cause dans l'instance. Les demanderesses ont fait valoir que puisque Canwell était leur fiduciaire aux fins de leur demande en comptabilisation des bénéfices et puisque M. Titley avait toujours été l'administrateur unique de Canwell, il se trouvait de ce fait investi d'une obligation de fiduciaire par interprétation en faveur des demanderesses; en obtenant effectivement que Canwell lui verse des primes importantes qui avaient effectivement privé Canwell de la majorité des bénéfices dont il était le fiduciaire, il avait indirectement manqué à son obligation fiduciaire à l'égard des demanderesses ou, à titre subsidiaire, s'était enrichi sans cause.
[187]Bien que j'arrive à la conclusion à laquelle m'y incitent les demanderesses à cet égard, j'estime qu'il n'est pas nécessaire de juger que M. Titley, en qualité d'administrateur unique, est inve sti des obligations fiduciaires de Canwell. Je suis convaincu qu'il n'a pas été partie à la fiducie.
[188]Dans l'arrêt Air Canada c. M & L Travel Ltd .54, le juge Iacobucci, s'exprimant au nom de la majorité, a écrit à la page 826:
En conséquence, je [traduction] «consid[ère] applicable la définition suivante de la fraude: «le fait de courir un risque au détriment des droits d'autrui, lorsque l'on court ce risque sciemment et sans droit». À mon avis, c'est la norme qui s'accorde le mieux avec la raison d'être fondamentale de l'attribution d'une responsabilité personnelle à une personne qui n'est pas partie à la fiducie, qui a été énoncée dans l'affaire In re Montagu's Settlement Trusts, [. . .] c'est-à-dire la question de savoir si la conscience du tiers est suffisamment en cause pour que soit justifiée l'attribution d'une responsabilité personnelle. À cet égard, le fait de courir sciemment et de manière injustifiée un risque au détriment du bénéficiaire est suffisant pour légitimer l'attribution d'une responsabilité personnelle. [Renvoi omis.]
[189]Adoptant le raisonnement de Mme le juge Reed selon lequel, lorsqu'une demande des bénéfices est déposée dans une action comme celle en l'espèce, une obligation fiduciaire est imposée à une défenderesse, telle que Canwell, qui exerce son activité d'une manière qui l'expose potentiellement au risque d'une dette sous la forme d'une comptabilisation des bénéfices, si la personne qui n'est pas parti e à la fiducie dans la citation précédente du juge Iacobucci est M. Titley, la question soulevée devient de savoir si la conscience de M. Titley est suffisamment affectée par le paiement de primes en sa faveur de la part de Canwell, qui compromettait série usement la capacité de celle-ci de remplir ses obligations en vertu de la fiducie, pour justifier l'attribution d'une responsabilité personnelle. Je suis convaincu que c'est le cas.
[190]M. Titley étant l'unique propriétaire, administrateur et président-directeur général de Canwell, je suis disposé à conclure qu'il était, à toutes les époques pertinentes, au courant de la demande des demanderesses en comptabilisation des bénéfices. Je suis également disposé à conclure qu'il a sciemment pris l e risque de compromettre la capacité de Canwell de s'acquitter de ses obligations fiduciaires et qu'il a de ce fait contribué au préjudice subi par les bénéficiaires de la fiducie, en l'occurrence les demanderesses. Je suis convaincu en outre que l'existen ce d'une justification raisonnable du paiement des primes, soit la réduction des charges d'impôt sur le revenu, n'a d'aucune façon diminué le caractère répréhensible du risque de dommage causé aux demanderesses par le paiement de ces primes5556.
[191]À la lumière du raisonnement qui précède et sous réserve des considérations qui suivent, je serais disposé à attribuer à M. Titley une responsabilité personnelle, solidairement avec Canwell, à l'égard des demanderesses pour la somme cumulative de ses primes à partir de l'engagement la présente action, avec les intérêts avant et après jugement sur cette somme, calculés de la même manière que les intérêts avant et après jugement ont été et seront calculés su r les montants dont Canwell et la ville de Medicine Hat sont redevables aux demanderesses. Encore une fois, si les parties ne parvenaient pas à s'entendre sur le montant des intérêts avant et après jugement en cause, elles pourraient s'adresser à moi.
[192]Le paragraphe qui précède est formulé au conditionnel en raison d'une décision de la Cour d'appel fédérale qui me lie, rendue postérieurement à la clôture du présent procès. J'ai décidé de ne pas convoquer de nouveau les avocat s parce que l'orientation donnée par la Cour d'appel est, j'en suis convaincu, claire et sans équivoque.
[193]Dans le jugement Société canadienne des pneus Michelin Ltée c. Canada57, le juge Evans, s'exprimant au nom de la Cour, a écrit aux paragraphes 19 à 26 de ses raisons:
En particulier, une fiducie par interprétation n'est pas imposée à moins que le demandeur puisse indiquer que des biens en la possession du défendeur constituent les biens, ou le produit de ces biens, qui ont été cédés par le demandeur ou obtenus de lui sans cause légitime ou que le défendeur ne saurait retenir en toute bonne foi. C'est-à-dire que la fiducie par interprétation est liée aux éléments d'actif particuliers du défendeur qui constituent l'enrichissement; il ne s'agit pas d'une charge grevant l'actif général du défendeur pour le montant de la réclamation du demandeur.
Par conséquent, après avoir conclu dans la décision Chase Manhattan [. . .] que le demandeur pouvait en principe invoquer la fiducie par interprétation comme recours permettant le recouvrement des deniers qu'il avait versés par erreur de fait, le juge Goulding [. . .] a ordonné une enquête sur ce qui était advenu des deniers [traduction] «et quels éléments d'actif (s'il y a lieu) en la possession du défendeur constituent maintenant cette somme ou une partie de celle-ci».
C'est en se fondant sur l'exigence qu'une fiducie par interprétation soit imposée seulement à l'égard de biens se trouvant en la possession du défendeur et pouvant être identifiés comme des biens que le défendeur ne peut pas retenir en toute bonne foi que la Cour a rejeté l'appel dans l'arrêt Federated Co-operatives Ltd. c. Canada [. . .] À mon avis, dans Forest Oil Corporation c. Canada [. . .] la Cour a commis une erreur en imposant une fiducie par interprétation pour permettre à l'appelante de recouvrer le paiement fait par erreur sans qu'il y ait examen visant à déterminer si les deniers qu'elle avait versés par erreur, ou leur produit, pouvaient être identifiés comme biens en la possession de la Couronne.
Je reconnais que la fiducie par interprétation s'impose rapidement au Canada comme une réparation en equity très souple qui peut être appliquée dans une multitude de contextes pour empêcher l'enrichissement sans cause et, de façon plus générale, pour empêcher les individus de conserver des biens qu'en toute bonne foi, ils ne devraient pas retenir, notamment lorsque les biens ont été obtenus de façon illicite, comme dans le cas du manquement à une obligation de fiduciaire: voir notamment les motifs prononcés par le juge McLachlin (maintenant juge en chef) dans l'arrêt Soulos c. Korkontzilas [. . .]
On a donc fait valoir que lorsqu'elle servait simplement de recours empêchant que l'on s'enrichisse sans cause et que l'on tire profit d'actes peu scrupuleux, la fiducie par interprétation pouvait ne plus être fondée sur la propriété: Lord Goff of Chieveley et Gareth Jones, The Law of Restitution [. . .]
Par conséquent, dans une reformulation en profondeur de certains principes fondamentaux applicables aux réparations fondées sur la propriété en droit des restitutions, lord Browne-Wilkinson, dans l'arrêt Westdeutsche Landesbank Girozentrale c. Islington London Borough Council [. . .] a désapprouvé le raisonnement, mais non la conclusion, de la décision Chase Manhattan [. . .] parce que celui-ci tenait pour acquis que le payeur mal avisé avait conservé un intérêt en equity dans les deniers lorsque ceux-ci avaient été versés. Il a dit que ce raisonnement était incompatible avec la nature plus souple de la fiducie par interprétation lorsque celle-ci était imposée comme réparation empêchant l'enrichissement sans cause. Il a donc conclu:
[traduction] Même si la simple réception des deniers sans connaissance de l'erreur ne donne naissance à aucune fiducie, la rétention des deniers après que la banque bénéficiaire a appris l'erreur peut fort bien avoir donné lieu à une fiducie par interprétation.
Toutefois, malgré sa souplesse nouvellement reconnue en tant que réparation en equity, la fiducie par interprétation ne s'est pas départie de toutes les restrictions découlant de son caractère lié à la propriété. C'est pourquoi lord Browne-Wilkinson n'a pas affirmé dans l'arrêt Westdeutsche Landesbank [. . .] que le juge Goulding avait commis une erreur dans la décision Chase Manhattan [. . .] lorsqu'il avait ordonné une enquête quant à savoir si le paiement fait par erreur pouvait être identifié dans l'actif de la défenderesse. Le juge Goulding n'a ordonné une telle enquête que parce qu'il estimait que retracer l'origine de la somme d'argent en question était toujours requis pour déterminer s'il pouvait y avoir fiducie par interprétation.
Par conséquent, étant donné que Michelin n'a fourni aucun élément de preuve indiquant que ses paiements en trop pouvaient être retracés, elle ne peut pas solliciter la réparation de la fiducie par interprétation, à la lumière de l'exposé conjoint des faits. [Non souligné dans l'original; renvois omis.]
Les renvois à Chase Manhattan Bank N.A. v. Israel-British-Bank (London) Ltd. font référence à l'affaire citée dans la note en fin de texte58. À la lumière de ce qui précède, je conclus qu'il ne m'est loisible d'imposer à M. Titley une responsabilité personnelle, solidairement avec Canwell, en me fondant sur les principes de la fiducie par interprétation et de l'enrichissement sans cause, que dans la mesure où les sommes payées par Canwell à M. Titley à titre de primes depuis l'ouverture de la présente action, ou une partie de ces sommes, peuvent être liées aux «éléments d'actif particuliers [de M. Titley] qui constituent l'enrichissement». Les demanderesses n'ont fourni à la Cour aucun élément de preuve sur la relation possible entre ces primes ou une partie de ces primes et des éléments d'actif. Cela étant dit, je déduis en outre de ce qui précède qu'il m'est loisible d'ordonner une enquête sur ce qui est advenu des sommes que représentaient ces paiement de primes et quels éléments d'actif, le cas échéant, en la possession de M. Titley, constituent maintenant le montant total ou une partie des paiements de primes en question. J'ordonnerai par jugement la tenue d'une telle enquête si les demanderesses le souhaitent. Si l'enquête est menée et qu'elle aboutit à identifier des éléments d'actif de M. Titley qui représentent l'enrichissement, je rendrai un jugement qui attribuera à M. Titley une responsabilité personnelle, solidairement avec Canwell, à l'égard des demanderesses pour la valeur de ces actifs et des intérêts avant et après jugement, comme je l'ai noté précédemment.
RÉSUMÉ DES CONCLUSIONS
[194]Je conclus que le brevet en litige est valide et que les défenses au titre de l'antériorité ou de l'absence de nouveauté, de l'évidence, de l'insuffi-sance de la divulgation et de l'allégation importante non conforme à la vérité dans la pétition ne sont pas fondées.
[195]Je conclus que par ses actes la ville de Medicine Hat a contrefait certaines revendications du brevet. Je juge que les actes de Canwell ont incité ou contribué à la contrefaçon par des tiers de certaines revendications du brevet. Par conséquent, une série de réparations décrites plus précisément dans les présents motifs et dans mon jugement sont ordonnées contre elles. De plus, je prononcerai une injonction contre M. Titley personnellement. J'ordonnerai un renvoi au sujet des primes qu'il a touchées, a insi qu'il a été indiqué.
[196]Le demande reconventionnelle de Canwell en vertu de l'alinéa 7a ) de la Loi sur les marques de commerce n'est pas fondée et elle est rejetée sous cet aspect et à tous autres égards.
LES DÉPENS
[197]Les demanderesses ont droit aux dépens de l'action fixés selon la colonne III du tableau du tarif B des Règles de la Cour fédérale (1998)59, solidairement contre les défendeurs. Les demanderesses ont égale-ment droit aux dépens de la demande reconvention-nelle, fixés de la même façon, contre la demanderesse reconventionnelle, Canwell.
2 See R. T. Hughes and J. H. Woodley, Hughes and Woodley on Patents (Toronto: Butterworths, 1984) (loose- leaf), at p. 315-3. (This citation to Hughes and Woodley was not cited before me.)
3 See R.S.C., 1985, (3rd supp.) c. 33, ss. 1, 8, 10.
4 S.C. 1993, c. 15.
5 (1991), 35 C.P.R. (3d) 350 (F.C.A.) (Tye-Sil).
6 (1986), 8 C.P.R. (3d) 289 (F.C.A.) (Beloit).
7 (1997), 77 C.P.R. (3d) 547 (F.C.T.D.) (Pfizer).
8 Tye-Sil, supra, note 5.
9 [2000] 2 S.C.R. 1024 (Free World Trust).
10 Beloit, supra, note 6.
11 Free World Trust, supra, note 9.
12 Tye-Sil, supra, note 5.
13 Beloit, supra, note 6.
14 (1895), 12 R.P.C. 470 (C.A.).
15 Pfizer, supra, note 7.
16 Fox, H. G., 4th ed. (Toronto: Carswell, 1969).
17 Exhibit D-2.
18 Metropolitan Vickers Electrical Company Ld. v. British Thomson-Houston Company Ld. (1925), 43 R.P.C. 76 (C.A.), at p. 93.
19 66 F.(2d) 162 (7th Cir. 1933).
20 (1977), 37 C.P.R. (2d) 3 (F.C.T.D.).
21 Exhibit P-68.
22 Exhibit D-4.
23 Tye-Sil, supra, note 5.
24 [1930] S.C.R. 443, at pp. 451-452.
25 Beloit, supra, note 6.
26 (1995), 60 C.P.R. (3d) 58 (Ont. Gen. Div.).
27 (1998), 82 C.P.R. (3d) 526 (Ont. C.A.).
28 [1998] S.C.C.A. No. 563.
29 (1967), 35 Fox Pat. C. 174 (Ex. Ct.).
30 [1981] 1 S.C.R. 504.
31 [1974] S.C.R. 1336.
32 (1998), 79 C.P.R. (3d) 193 (F.C.T.D.); judgment varied on appeal to the Federal Court of Appeal in a manner not relevant to the passages here relied on: [2001] 1 F.C. 495; leave to appeal to the Supreme of Canada granted, [2000] S.C.C.A. No. 610.
33 (1988), 20 C.P.R. (3d) 132 (F.C.T.D.).
34 Free World Trust, supra, note 9.
35 (1998), 81 C.P.R. (3d) 44 (F.C.T.D.).
36 [1996] 3 F.C. 751 (C.A.).
37 See: AlliedSignal Inc. v. Du Pont Canada Inc. (1993), 50 C.P.R. (3d) 1 (F.C.T.D.), at p. 19, affirmed on this point (1995), 61 C.P.R. (3d) 417 (F.C.A.), at pp. 443-444.
38 See for example, PreFormed Line Products Co. and Slater Steel Industries v. R. Payer & Compagnie Ltée (1975), 24 C.P.R. (2d) 1 (F.C.T.D.), at p. 9; affd (1977), 34 C.P.R. (2d) 141 (F.C.A.).
39 Supra.
40[1987] 3 F.C. 544 (C.A.).
41 [1977] 2 S.C.R. 134.
42 (1982), 68 C.P.R. (2d) 204 (F.C.T.D.).
43 Alta. Reg. 364/84 as amended.
44 (1998), 82 C.P.R. (3d) 466 (F.C.T.D.).
45 (1997), 72 C.P.R. (3d) 214 (F.C.T.D.) (Paula Lishman).
46 [1949] S.C.R. 613.
47 (1998), 78 C.P.R. (3d) 129 (F.C.T.D.).
48 (1978), 89 D.L.R. (3d) 195 (F.C.A.).
49 S.A. 1981, c. B-15.
50 Paula Lishman, supra, note 45.
51 (1999), 86 C.P.R. (3d) 129 (F.C.T.D.).
52 (2001), 12 C.P.R. (4th) 204 (F.C.T.D.).
53 (1987), 16 C.P.R. (3d) 15 (F.C.T.D.).
54 [1993] 3 S.C.R. 787.
55 For an interesting discussion of constructive trusts in the context of gains by fiduciaries who are in "knowing receipt" of trust property, see: E. E. Gillese, The Law of Trusts (Concord, Ont.: Irwin Law, 1997), at p. 106 and, more particularly, at p. 118, (not cited before me).
55 To somewhat the same effect as my conclusion here, see C.I. Covington Fund Inc. v. White (2000), 10 C.P.R. (4th) 49 (Ont. S.C.).
57 [2001] 3 F.C. 552 (C.A.).
58 [1981] Ch. 105.
59 SOR/98-106.