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Federal Court |
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Cour fédérale |
PRESENT: The Honourable Mr. Justice O'Reilly
BETWEEN:
HELI TECH SERVICES (CANADA) LTD.
AND CORPORACION LA CAMPANA
DE LA VILLA S.A.
AND PHILIP JARMAN
and
WEYERHAEUSER COMPANY LIMTED/
COMPANIE WEYERHAEUSER LIMITEÉ
DOING BUSINESS AS CASCADIA
FOREST PRODUCTS
AND DOING BUSINESS AS
ISLAND TIMBERLANDS
AND CASCADIA FOREST PRODUCTS LTD.
AND ISLAND TIMBERLANDS GP LTD.
AND TIMBERWEST FOREST CORP.
AND BRASCAN TIMBERLANDS MANAGEMENT GP INC.
AND 550777 B.C. LTD. OPERATING AS "R.E.M. CONTRACTING"
AND CANADIAN AIR-CRANE LIMITED AND VIH LOGGING LTD.
AND INTERNATIONAL FOREST PRODUCTS LIMITED
AND BETWEEN:
VIH LOGGING LTD.
Plaintiff by Counterclaim
and
HELI TECH SERVICES (CANADA) LTD.
AND CORPORACION LA CAMPANA DE LA VILLA S.A.
AND PHILIP JARMAN
Defendants by Counterclaim
REASONS FOR ORDER AND ORDER
I. Introduction
[1] The defendants Brascan Timberlands Management GP Inc. and Island Timberlands GP Ltd. asked Prothonotary Lafrenière to strike various paragraphs of the plaintiffs’ statement of claim primarily on the grounds that they did not disclose a reasonable cause of action against them. Prothonotary Lafrenière granted their request in an order dated November 21, 2008. The plaintiffs appeal that order. They argue that Prothonotary Lafrenière wrongly concluded that the plaintiffs had failed to set out in their statement of claim material facts that would support their assertion that Brascan and Island Timberlands were liable for patent infringement.
[2] The patent in issue involves a particular form of helicopter logging referred to as the “standing-stem” method. Standing-stem logging involves preparing a single tree for harvesting by topping and disbranching it, making horizontal cuts in the trunk, stabilizing the trunk with wedges, and then plucking the stem from above after a helicopter has lowered and attached a grapple to it. The patent covers both the grapple and the method itself.
[3] The plaintiffs allege that Brascan and Island Timberlands breached their patent either by employing this method themselves or by inducing others to do so. They submit that the omissions in their previous statement of claim (and amendments thereto) have been corrected in their second further amended statement of claim (FASOC #2) and suggest that Prothonotary Lafrenière erred by failing to recognize that the problems with earlier versions of the statement of claim have now been corrected.
[4] Prothonotary Lafrenière found that the allegations against Brascan amounted to “bald assertions without any material facts”. Further, he concluded that the evidence before him on the motion did not disclose any direct infringement or attempted inducement by Brascan. Similarly, he found that the evidence in respect of Island Timberlands showed that a subcontractor was responsible for standing-stem logging, not Island Timberlands. Further, there was no evidence that Island Timberlands had induced any infringement by a subcontractor.
[5] Brascan and Island Timberlands submit that the FASOC #2 suffers from the same defects as the earlier pleadings and argue that Prothonotary Lafrenière was correct to strike the allegations against them.
II. Standard of Review
[6] Given that the question before Prothonotary Lafrenière was vital to a final issue (i.e., whether the action can be continued against Brascan and Island Timberlands), I must consider the question de novo: AstraZeneca Canada Inc. v. Apotex Inc., 2005 FC 43, at para. 6.
III. Valid Pleadings
[7] A statement of claim must set out facts supporting the plaintiff’s claim to a particular legal right, as well as facts showing that the defendant has infringed that right: Dow Chemical Co. v. Kayson Plastics & Chemicals Ltd. (1966), 47 C.P.R. 1 (Ex. Ct). In an action for patent infringement, the plaintiff must set out facts describing the defendant’s allegedly infringing behaviour. It is not sufficient simply to allege that the defendant has infringed the claims of the patent: Harrison v. Sterling Lumber Co., 2008 FC 220. Nor can a plaintiff simply make speculative allegations in the hope of learning more at the discovery stage of the action: Caterpillar Tractor Co. v. Babcock Allatt Ltd. (1982), 67 C.P.R. (2d) 135 (F.C.T.D.), at 138-139.
[8] The test on a motion to strike pleadings in a statement of claim is whether it is “plain and obvious” that the plaintiff cannot succeed against the defendant in respect of the particular allegations set out: Prentice v. Canada (Royal Canadian Mounted Police), 2005 FCA 395, at para. 23.
IV. The Plaintiffs’ Allegations
[9]
The
plaintiffs allege that, since 2005, Brascan and Island Timberlands have used
the standing-stem method in the Elsie
Lake area of Vancouver
Island (FASOC
#2, para. 53, paragraphs cited are set out in Annex A). The plaintiffs also
allege that the defendants have, as a whole, infringed the patent by using a
technique that corresponds with the methodology set out in it (FASOC #2, para.
59). The FASOC # 2 sets out a full description of that methodology (paras.
57.1, 57.2).
[10] The plaintiffs also maintain that Island Timberlands induced “an unknown contractor” to carry out standing-stem logging in a manner that infringed the patent by hiring the contractor to do so (FASOC #2, para. 60 (e)).
V.
The
Prothonotary’s Decision
[11]
Prothonotary
Lafrenière reviewed the pleadings, the written submissions of the parties and
the evidence filed on the motion. As mentioned, he concluded that the
allegations in the FASOC #2 against Brascan amounted to “bald assertions
without any material facts” and without any evidence to support them. In
particular, he found no evidence of either direct infringement or inducement.
[12]
With
respect to Island Timberlands, Prothonotary Lafrenière found that the
plaintiffs’ allegations were more detailed and ought not to be struck under
Rule 221(1)(a) (see Annex B) (for failure to disclose a reasonable cause
of action). However, he also found no evidence to support the allegation that Island
Timberlands induced anyone to infringe the patent or that it was itself
responsible for any infringement. The evidence on those issues related to
alleged infringement by a contractor named R.E.M. Contracting, not Island Timberlands.
VI. Conclusion and Disposition:
[13]
The
plaintiffs point out that it is extremely difficult to establish a foundation
for their allegations, given that standing-stem logging typically takes place
in remote areas. Further, they suggest that the liability of Brascan and Island
Timberlands can be inferred from the corporate relationships among various
defendants (including Weyerhauser, Cascadia, Island Timberlands and Brascan);
the movement of employees from one company to another; their stewardship of
large logging operations; and their agency relationships with subcontractors.
Further, the plaintiffs note that Brascan and Island Timberlands are
sophisticated companies that could easily evade liability by using
subcontractors with limited resources as shields.
[14] I have considered the plaintiffs’ circumstances and observations, but cannot conclude that they merit a departure from the requirements of sufficiency of pleadings. Further, after reviewing the materials presented to Prothonotary Lafrenière, as well as those submitted to me, I can find no error in his decision. The pleadings clearly fail to set out material facts supporting the allegations of direct infringement and inducement. In my view, it is plain and obvious that the plaintiffs cannot succeed against Brascan or Island Timberlands in respect of the allegations set out in the pleadings. To conclude otherwise would be to permit the plaintiffs to use the discovery process to explore potential grounds for their infringement action. This the Court cannot permit.
ORDER
THIS COURT ORDERS that:
- The appeal is dismissed with costs.
- Prothonotary Lafrenière’s Order of November 21, 2008 is affirmed.
“James W. O’Reilly”
Annex “A”
Second Further Amended Statement of Claim (FASOC #2), original amended filed March 2, 2006
53.
Based on information provided to it by Weyerhaeuser, The Defendant, Brascan, in
the Elsie Lake area of Vancouver Island, has used the helicopter single
stem harvesting system in its logging of timber since at least as early as
2005, with the Defendants Cascadia and Island Timberlands, which is the method
covered by one or more of the claims of the Harvesting Patent.
57.1
The
Defendants used the helicopter single stem harvesting system covered by the Harvesting
Patent by employing a method for preparing and harvesting logs by means of a
helicopter equipped with a suspended grapple, removing trees from the forest by
lifting them off of their stumps rather than harvesting them after they have
been felled. Under the method employed by the Defendants, a standing tree is
topped, the branches removed, and the trunk cut near ground level on at least
two sides, leaving holding wood connecting the log to the stump to stabilize
it. When the helicopter is above the log and the grapple is beside the top of
the log, the grapple is engaged to secure the log and a generally horizontally
directed force is applied to the top of the log so as to rupture the holding
wood and flying the helicopter with the suspended log to a selected collection
area.
57.2 Further particulars on the use by the Defendants of the standing stem harvesting system covered by the Harvesting Patent include:
(a)
In
relation to the first aspect of the invention, the Defendants employed a method
of harvesting a log using an airborne vehicle equipped with a suspended grapple
comprising topping and disbranching the tree, cutting the tree near ground
level on at least two sides of the trunk leaving holding wood connecting the
log to the stump, stabilizing the trunk with select described methods, moving
the airborne vehicle to a position above the log with the grapple beside the
top of the log, applying a generally horizontally directed force to the top of
the log to rupture the holding wood, flying the airborne vehicle with the
suspended log to a collection area, and releasing the log at the collection
area.
(b)
In
relation to the second aspect of the invention, the Defendants used a tree
harvesting grapple for helicopters comprising: a support member having a top
and two sides, a wing connected to each side of the support member and
extending outwardly therefrom forming a tree receiving recess between the wings
and the support member, and a grapple pivotally connected to each wing with the
arms being movable from an open position to a closed position extending across
the recess to retain trees in the grapple.
(c) In relation to the fourth aspect of the invention, the Defendants employed a method of preparing a tree for standing-stem harvesting directly from the stump comprising: topping the tree, cutting through the trunk to make a pair of horizontal saw cuts parallel to one another and separated by holding wood, and driving in support wedges to stabilize the trunk.
59. By
reason of the use by the Defendants of the helicopter single stem harvesting
system the Defendants have infringed the exclusive right, privilege and liberty
of the Plaintiffs in one or more of Claims #1 through 35 of the Harvesting
Patent.
60. The Defendants and each of them, with the exception of the Defendant, VIH Logging Ltd., have induced infringement of method Claims #1-16 and #26-35 of the Harvesting Patent doing the following:
[…]
(e) The Defendant, Island Timberland, induced an unknown contractor to employ the methods of the inventor as set out in paragraphs 31, 32, 34 and 57.1, by hiring them to harvest timber in a manner, or acting recklessly knowing that they would employ the methods of the inventor, that they would infringe on the Plaintiffs’ patent rights.
Annex “B”
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Federal Courts Rules, SOR98/106 Motion to strike 221. (1) On motion, the Court may, at any time, order that a pleading, or anything contained therein, be struck out, with or without leave to amend, on the ground that it (a) discloses no reasonable cause of action or defence, as the case may be, (b) is immaterial or redundant, (c) is scandalous, frivolous or vexatious, (d) may prejudice or delay the fair trial of the action, […] (f) is otherwise an abuse of the process of the Court, and may order the action be dismissed or judgment entered accordingly. .
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Règles des Cours fédérales, DORS/98-106
Requête en radiation 221. (1) À tout moment, la Cour peut, sur requête, ordonner la radiation de tout ou partie d’un acte de procédure, avec ou sans autorisation de le modifier, au motif, selon le cas : a) qu’il ne révèle aucune cause d’action ou de défense valable; b) qu’il n’est pas pertinent ou qu’il est redondant; c) qu’il est scandaleux, frivole ou vexatoire; d) qu’il risque de nuire à l’instruction équitable de l’action ou de la retarder; … f) qu’il constitue autrement un abus de procédure. Elle peut aussi ordonner que l’action soit rejetée ou qu’un jugement soit enregistré en conséquence.
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FEDERAL COURT
NAME OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T- 56-06
STYLE
OF CAUSE: HELI TECH SERVICES (CANADA) LTD., ET AL
v. WEYERHAEUSER COMPANY LIMITED, ET AL
PLACE OF HEARING: Vancouver, British Columbia
DATE OF HEARING: April 23, 2009
APPEARANCES:
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Derek C. Creighton |
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J. Kevin Wright
Mark S. Oulton Jacqueline D. Hughes
Mark Fancourt-Smith |
FOR THE DEFENDANTS ISLAND TIMBERLANDS GP LTD. And BRASCAN TIMBERLANDS MANAGEMENT GP INC
FOR THE DEFENDANTS CASCADIA FOREST PRODUCTS LTD., TIMBERWEST FOREST CORP.; INTERNATIONAL FOREST PRODUCTS LIMITED
FOR THE DEFENDANT CANADIAN AIR-CRANE LIMITED |
SOLICITORS OF RECORD: