Date :20011219
Docket: T-992-92
Neutral citation: 2001 FCT 1404
BETWEEN:
ALMECON INDUSTRIES LIMITED
Plaintiff
- and -
ANCHORTEK LTD., EXPLOSIVES LIMITED,
ACE EXPLOSIVES ETI LTD. AND
WESTERN EXPLOSIVES LTD.
Defendants
REASONS FOR JUDGMENT
INTRODUCTION
[1] These reasons follow the trial of a consolidated action wherein the plaintiff seeks: first, a declaration of validity and infringement of Canadian Patent No. 1,220,134 (the "Almecon Patent"); second, a declaration of entitlement to damages for infringement or, in the alternative as the plaintiff may elect, an accounting of profits of the defendants; third, a reference for determination of the extent of infringement and the quantum of such damages or profits; and finally, pre- and post-judgment interest on such damages or profits and costs. During the trial, counsel for the plaintiff abandoned the plaintiff's claim for a permanent injunction against the defendants from infringing the Almecon Patent and from making, using, distributing, vending, offering for sale or selling or inducing the making, or using, distributing, vending, offering for sale or selling of the defendant Anchortek's "Energy Plug" in Canada.[1] I have presumed that, with the abandonment of the claim for an injunction, the plaintiff also abandoned a claim for delivery up or destruction that is contained in its Twice Amended Statement of Claim dated in its final format the 27th of January, 1999. A claim for exemplary, punitive and aggravated damages contained in the Twice Amended Statement of Claim, though not expressly abandoned, was not pursued in argument.
[2] Anchortek Ltd. ("Anchortek"), in the final iteration of its Statement of Defence and Counterclaim, and Explosives Limited, Ace Explosives ETI Ltd. and Western Explosives Ltd., in the final iteration of their Statement of Defence, seek dismissal of the plaintiff's action with costs. In addition, Anchortek , as plaintiff by counterclaim, seeks a declaration that each of the claims of the Almecon Patent is and always has been invalid, void and of no effect, a declaration that the plaintiff has made misleading statements to Anchortek's customers contrary to paragraph 7 (a) of the Trade-marks Act[2], damages suffered as a result of the alleged misleading statements, pre-and post-judgment interest on such damages and its costs of the counterclaim.[3]
[3] By order made on consent during the course of the trial, the issue of the quantum of any damages to which Anchortek might be entitled under its counterclaim was left for determination on a reference.[4]
[4] At the close of the trial, both counsel urged that determination with respect to the issue of costs be deferred until after they had an opportunity to consider the substantive judgment and related reasons herein. My judgment will so provide.
AGREED STATEMENT OF FACTS
[5] At the opening of trial, a reasonably extensive Agreed Statement of Facts was filed.[5] Its substance is incorporated here verbatim.
The Parties
1. The Plaintiff is a manufacturer of seismic hole plugs based in Edmonton, Alberta. Since September, 1984 the Plaintiff has made and sold seismic hole plugs, including the King Plug brand of seismic plug. The Plaintiff also manufactures and sells Prince and Queen brand plugs.
2. The Defendant Anchortek is also a manufacturer of seismic hole plugs, based in Calgary, Alberta. Since 1992, the Defendant Anchortek has made and sold seismic hole plugs. The three co-Defendants in this action buy seismic plugs from Anchortek and resell them to their respective customers.
3. The parties to the action are all incorporated under the laws of the Province of Alberta, except the Defendant Ace Explosives ETI Ltd. which is incorporated under the laws of Ontario. Each of the parties has an office and place of business in Alberta.
Seismic Hole Plugs
4. Seismic exploration is carried out to locate oil and gas deposits. A pattern of holes is drilled in a defined area and an explosive charge is detonated in each of the holes. Equipment located on the ground near the holes records signals from the explosive blasts and the data collected is used to help locate oil or gas.
5. It is common to insert a seismic bore hole plug (a shot hole plug) in a bore hole before the blast occurs and to put soil or some other type of fill on top of the plug. The plug is intended to stay in the hole and to keep the hole closed after the blast.
The Almecon Patent
6. The Plaintiff alleges infringement of its patent claiming a type of seismic bore hole plug.
7. Canadian Patent No. 1,220,134 ("the Almecon Patent") was applied for on January 25, 1985 and issued on April 7, 1987 to Almecon Industries Limited ("Almecon"). The Almecon Patent claims a "topping and tamping plug for use in a seismic bore hole." The alleged invention was made by at least August, 1984. The patent (unless held invalid) expires on April 6, 2004. The Almecon Patent names Jim Jackson and Paavo Luoma as co-inventors.
8. Anchortek is an "interested person" in respect of the Almecon Patent within the meaning of s. 60 of the Patent Act, R.S.C. 1985, c. P-4, as amended.
9. The Almecon King Plug is an embodiment of the Almecon Patent (and the initial design was generally as shown in Figures 1-4 of the Almecon Patent). The Almecon King Plug was introduced into the market in the winter of 1984-1985.
10. In July, 1985 the King Plug product was modified from its initial design (generally as shown in the Almecon Patent) to give the rear claws angled and sharpened tips and to give the front claws horizontally directed angled tips.
The Energy Plug
11. The Plaintiff alleges that the Energy Plug infringes claims 1 and 5 of the Almecon Patent.
12. The Energy Plug is used by inserting the plug into the top of a seismic bore hole (typically about 3.5 inches in diameter). The Energy Plug goes into the hole after an explosive charge is placed near the bottom of the hole and before the charge is detonated. The plug is intended to stay in the hole before and after detonation. Mud or soil is placed on top of the plug in the hole before the explosive charge is detonated.
13. The Energy Plug underwent a design change within the first 6 months of its introduction into the market. Examples of the two Energy Plug designs are marked as Exhibits D-9 and D-10 on the discovery of the Defendants.
Manufacture and Sale of the Energy Plug
14. Anchortek manufactured and sold Energy Plugs in the years 1992 to 1996, in Canada.
15. Anchortek sold Energy Plugs to the three co-defendants and to Austin Powder Co. Ltd. (collectively "The Distributors"). These four companies each distribute explosives, and related products, for the seismic exploration industry in Alberta.
16. The Distributors have each purchased the Energy Plug from Anchortek and resold the Energy Plug to their customers in Alberta between approximately January, 1992 and March, 1996.
17. The Plaintiff sued Austin Powder Ltd. in Court File No. T-609-96 which action has since been settled.
18. Anchortek has had knowledge of the Almecon Patent and the allegations of infringement of its Energy Plug since at least as early as February 21, 1992.
Previous Litigation Regarding the Almecon Patent
19. The Almecon Patent was the subject of litigation between the Plaintiff and Nutron Manufacturing Ltd. in Federal Court File No. T-762-88 resulting in the decision from the Federal Court Trial Division on February 26, 1996 and affirmed by the Federal Court of Appeal on February 6, 1997. As a result, claims 1 and 5 of the patent have been construed and the person skilled in the art to which the patent relates has been defined.
Sales by Anchortek Since 1996
20. Since approximately March, 1996, Anchortek has manufactured seismic hole plugs which are not alleged to infringe the Almecon Patent. These plugs have been sold by Anchortek to the remaining three co-defendants and to Austin Powder Ltd.
The Austin Powder Action
21. The plaintiff brought a lawsuit against Austin Powder Ltd. (Federal Court No. T-609-96) for infringement of the Almecon Patent by the sale by Austin Powder Ltd. of the Energy Plug products. This action was settled by an agreement executed in August 1999.
22. The settlement agreement between Almecon and Austin Powder Ltd. contained a provision that Austin Powder Ltd. purchase 70% of its plugs from Almecon. This provision was obtained from Austin Powder solely on the basis of the allegation by Almecon that the Energy Plug infringes the Almecon Patent.
23. The Plaintiff, prior to its execution of the settlement agreement with Austin Powder, was aware that Austin Powder was purchasing seismic hole plugs of the type identified in paragraph 20 from the Defendant, Anchortek.
24. Since the date of the execution of the settlement agreement, Austin Powder has commenced purchasing seismic hole plugs from the Plaintiff pursuant to that settlement agreement.
[6] Subsection 60(1) of the Patent Act, as referred to in paragraph 8 of the
Agreed Statement of Facts, read as follows at the relevant time:
| 60. (1) A patent or any claim in a patent may be declared invalid or void by the Federal Court at the instance of the Attorney General of Canada or at the instance of any interested person. |
|
60. (1) Un brevet ou une revendication se rapportant à un brevet peut être déclaré invalide ou nul par la Cour fédérale, à la diligence du procureur général du Canada ou à la diligence d'un intéressé. |
|
|
|
|
[7] Figures 1 to 4 of the Almecon Patent, as referred to in paragraph 9
of the Agreed Statement of Facts, are reproduced as Schedule 1 to these reasons.
[8] The modified King Plug referred to in paragraph 10 of the Agreed Statement of Facts is shown in Schedule 2 to these reasons.
[9] The two examples of the Energy Plug referred to in paragraph 13 of the Agreed
Statement of Facts are reproduced as Schedules 3 and 4 to these reasons.
[10] This action was originally commenced only against Anchortek. Separate actions were commenced against each of the co-defendants in 1996[6]. I therefore conclude that each of the co-defendants had knowledge of the Almecon Patent and the allegations of infringement of that patent by Anchortek's Energy Plug since at least as early as the time when the statements of claim in the actions by the plaintiff against each of the co-defendants was served.
[11] Prior decisions of this Court relating to infringement of the Almecon Patent, as
referred to in paragraph 19 of the Agreed Statement of Facts are reported, in the case of the decision by the Trial Division, at (1996), 65 C.P.R. (3d) 499 and, in the case of the decision by the Court of Appeal, at (1997), 209 N.R. 387. Leave to appeal to the Supreme Court of Canada from the decision of the Court of Appeal was denied.[7]
[12] Finally in relation to the Agreed Statement of Facts, the settlement agreement
referred to in paragraph 22 between Almecon and Austin Powder Ltd.[8] contains the following provisions, among others:
4. Austin agrees to purchase Almecon's seismic tamping and topping plugs on the terms listed below.
...
(7) This agreement to purchase Almecon Seismic Tamping and Topping Plugs terminates on the earlier of:
a) April 7, 2004, or
b) Should the Federal Court of Canada find that the Almecon Patent is either invalid or not infringed by the Anchortek Energy Plug in Federal Court Action No. T-992-92, then this agreement shall terminate on the date of expiry of any final appeal period in that action.
...
Apart from the foregoing, and I will return to this later in these reasons, no allegation of infringement appears on the face of the settlement agreement.
THE PATENT IN SUIT
[13] Under the heading "Background of the Invention", the following appears in the
Almecon Patent[9]:
In carrying out a seismic exploration, a standard procedure is to drill holes into the geologic formations of interest and to plant explosive charges in the bore holes. The charges are then detonated and appropriate measurements recorded to enable evaluation of the formation.
There are a number of problems associated with this seismic drilling. One of these occurs during the actual blast. Unless the hole is properly plugged prior to detonation, a large proportion of the energy of the blast escapes upwardly through the hole and is thus not properly directed through the formation of interest.
There is therefore a continuing need for a bore hole plug which is simple and inexpensive in construction yet sufficiently durable to remain in place for extended periods and to withstand the force of the blast. To date, a variety of plugs have been proposed and used, but these do not satisfactorily meet all of the criteria set out above.
In addition, plugs are required to be inserted into bore holes to support concrete, earth or other topping materials used to close the hole. Accordingly, a simple plug which could withstand the force of the blast and remain in the hole as a topping plug would be highly desirable. Such a plug could be used as a topping plug only if required.
The bore hole plug of the present invention is intended to alleviate the problems discussed.
[14] The function described in the second and third paragraphs of the foregoing
quotation is generally referred to as a "tamping" function although the term "tamping" is not used in the quoted paragraphs. The term does appear throughout the balance of the disclosure of the Almecon Patent and the claims.
[15] The claimed invention is summarized in the following terms in the disclosure of the Almecon Patent:
A simple molded plastic device has now been developed which is light, economical, of once [sic] piece construction; and which is very effective in tamping and plugging bore holes to confine the force of the blast to the hole.
The invention thus provides a tamping and topping plug for use in a seismic bore hole, comprising a body member having a forward and a rearward end, terminating at its forward end with a closed end part, a plurality of elongated members extending outwardly and rearwardly from at least one end of the body member, the members so arranged as to give the plug axial stability when inserted into a bore hole.
In a preferred embodiment the body member is cylindrical and the elongated members extend from the front and rear ends of the body member.
There is further provided a process for enhancing the information obtainable from seismic blasting comprising inserting into a seismic borehole in which an explosive charge has been placed, and above the said charge, a tamping plug comprising a body member having a forward and a rearward end and terminating at its forward end with a closed end part, a plurality of elongated members extending outwardly and rearwardly from at least one end of the said body member, said members so arranged as to give said plug axial stability when inserted into a bore hole: then exploding the charge and taking seismic readings.
[16] Under the heading "Detailed Description of the Preferred Embodiments", the
following appears in the specification of the Almecon Patent.
The plug 10 includes a body section 12 of cylindrical configuration. The plug is preferably formed of a resilient material such as elastomer or a plastic. The forward end 14 of the body section 12 terminates in the illustrated embodiment in a truncated conical end section 16.
The end section 16 may be profiled in a number of different configurations other than conical. For example, hemispherical, pyramidal or flat end sections 16 would also serve. It is basically only required that the end 14 be substantially closed.
The most preferred embodiment of end section 16, however, is the illustrated truncated cone.
A series of elongated members or claws 18 and 20 protrude outwardly and rearwardly from the front 14 and rear 22 of the body section 12. These members are integral with the body section 12.
While various configurations of the individual members 18 and 20 would be acceptable, it is preferred that the width and thickness both decrease from the base 24 to the outer extremity 26 of the said members. As illustrated, the forward members 18 are molded to smoothly taper to an edge 28; while the rearward members 20 are somewhat thicker and are bevelled at 30 toward the ends 32.
The front and rear claws 18 and 20 are as a group preferably arranged in a symmetrical fashion about the plug body 12. The plug 10 thereby has good directional stability in the bore hole and is prevented from becoming misaligned on insertion or with the force of the blast. In the preferred configuration the plug includes two forward claws 18 and four rear claws 20.
A pair of flange sections 34 and 36 extend around a major part of the rear end 38 of the body section 12. These flange sections leave spaces 40 and 42 behind the forward claws 18. The flange sections 34 and 36, when the plug is in use, fit closely to the sides of the bore hole to reduce blast leakage around the sides of the plug. In the preferred embodiment the flange sections are in part integral with the rear claws 20. In this situation the flange sections play an important reinforcing role in aiding the members 20 to withstand the force of the blast.
Reference numerals in the foregoing quotation are reflected in the drawings or figures of the patent which appear as figures 1 to 4 in Schedule 1 to these reasons.
[17] The disclosure continues with a description of the manner of use of the plug.
To facilitate an understanding of the description of the manner of use, Schedule 5 to these reasons is a reproduction of Figure 9 to the Almecon Patent. The disclosure to the Almecon Patent continues:
The manner of use of the plug is as follows. After a hole 43 has been drilled and the explosive charge planted in the hole, the plug of the present invention is inserted into the hole. The charge is then exploded. The force of the explosion causes a flexing of the plug and causes the plug to move up the hole slightly. This serves to set the claws 18 and 20 into the sides of the hole to confine the blast. A comparison of FIGURES 5 and 9 illustrates clearly the position before and after the blast.
The setting of the claws in this manner is aided by the extra force which is brought to bear on the plug by reason of the flat portion 44 of the truncated conical end 16. Thus a fairly flat such end portion is highly preferred.
In this way the force of the blast is substantially confined to the hole and so to the surrounding formations.
The plug 10 is then normally left in the hole as a topping plug and the filling material, such as concrete, then poured in on top. In use the upward force exerted by the plug during the blast looses [sic] a substantial amount of material from the walls 52 (FIGURE 9) of the hole which material then becomes topping fill.
[18] Claims 1 and 5 of the Almecon Patent, the claims alleged to be infringed, read
as follows:
1. A tamping and topping plug for use in a seismic bore hole, and comprising:
a body member having a forward and a rearward end and terminating at its forward end with a somewhat flattened end part;
a plurality of elongated members extending outwardly and rearwardly from at least one end of the said body member, said members so arranged as to give said plug axial stability when inserted into a bore hole.
...
5. The plug of claim 1 in which the configuration of the said end part is a truncated cone.
THE ISSUES
[19] At the opening of trial, counsel presented an agreed statement of the issues in
this action. By reason of earlier decisions of both Divisions of this Court with regard to the Almecon Patent, the issues regarding invalidity are substantially narrower than originally contemplated by the pleadings. The agreed statement of issues, not in the order in which it was presented to the Court, is nonetheless the following in substance.
1). Validity
a) Claims Broader
If the Almecon Patent claims 1 and 5 are found to include the Energy Plug, are the claims invalid for being broader than the invention made or disclosed in that the invention made or disclosed did not encompass a plug with a front end of the type found on the Energy Plug?
b) Inutility/Best Mode
Does the fact that there is no disclosure in the Almecon Patent of a plug having horizontally directed tips on the outwardly and rearwardly extending members render the patent invalid for inutility or failure to disclose the best mode? Is the front end of the embodiment shown in Figures 6 to 8 of the Almecon Patent too shallow to achieve the requisite axial stability and thus render the patent invalid for inutility?
2). Infringement
Assuming validity of the patent two issues arise.
a) "somewhat flattened end part"
Does the Energy Plug infringe claim 1 or 5 of the Almecon Patent in view of the construction given to the phrase "somewhat flattened end part" by Mr. Justice Wetston in his decision in Almecon Industries Ltd. v. Nutron Manufacturing Ltd.?
b) Is the Energy Plug a "tamping plug"?
Does the Energy Plug function differently from the plugs of the type described and claimed in the patent?
3). Counterclaim-False and Misleading Statements
The defendant Anchortek alleges that the statement by the plaintiff that the Energy Plug infringes the Almecon Patent is false and misleading. It is alleged that making such a statement to a customer of Anchortek makes the plaintiff liable under s. 7 (a) of the Trade-marks Act and under s. 52 of the Competition Act.
.
Is the statement false and misleading? Was the statement made?
If the statement is false and misleading, does a settlement agreement entered into by Almecon and Austin Powder in 1999 in a corresponding patent action in the Federal Court give rise to liability under s. 7 (a) of the Trade-marks Act or under s. 52 of the Competition Act?
Further
i. if a statement made in the settlement agreement repeats the allegation of the Statement of Claim can that statement give rise to potential liability under s. 7 (a) and/or s. 52? Is there an estoppel which prevents Almecon from taking the position that there can be no such liability?
ii. if made, did the statement tend to discredit the business or wares of Anchortek?
iii. if made, did the statement cause damage to Anchortek?
[20] As noted earlier in these reasons, the counterclaim in relation to the Competition Act is not being pursued. Also as noted earlier, pursuant to consent Orders of the Court, the issue of the extent of damages or profits if infringement is found or of damages if the counterclaim for false or misleading statements is successful, is deferred to a reference.
ANALYSIS
1) Persons Skilled in the Art and Construction of the Claims
a) The Judgments in Almecon Industries Ltd. v. Nutron Manufacturing Ltd.
[21] At trial, my then colleague, Mr. Justice Wetston, reached a conclusion regarding the persons who are skilled in the art to which the Almecon Patent relates and thus as to the eyes of the person through whom the claims of the Almecon Patent must be construed.[10] At page 424 of his reasons, he wrote:
...After considering all of the evidence, and the submissions of counsel, I find that the person skilled in the art to which the Almecon invention relates is an experienced seismic crew technician.
[22] Mr. Justice Wetston then went on to construe claims 1 and 5 of the Almecon
Patent, the claims here at issue, through the eyes of an experienced seismic crew technician. With regard to claim 1, he wrote at pages 425-6:
The Almecon plug's forward end terminates in a "somewhat flattened end part". In my view, this means that the forward end of the plug's body member is substantially closed, and has a surface area which is perpendicular to the longitudinal axis of the body member, so as to intercept the pressure wave resulting from the detonation of the charge. If the somewhat-flattened end part were not substantially closed, the force of the blast would be incapable of moving the plug slightly upward in the bore hole so that its elongated members could embed in the walls of the hole, as required by the Almecon patent.
[23] With regard to Claim 5, Mr. Justice Wetston wrote at pages 427-8:
...As discussed above, the Almecon plug terminates in a flattened end portion. I have interpreted this to mean that a flat surface closes off the forward end of the body of the plug. Since the plug terminates at the forward end in both a flattened end portion and a truncated cone, I interpret claim 5 to mean that the pointed tip of the conical end section has been replaced by a flat surface which is substantially or completely closed.
The Almecon patent also states that the plug's forward end section may be profiled in a number of different configurations other than a truncated cone, including hemispherical and pyramidal. Therefore, a variation in the shape of the closed end section is within the claims of the patent.
[24] Mr. Justice Wetston's decision was upheld on appeal by the Federal Court of Appeal.[11] Mr. Justice Strayer, for the Federal Court of Appeal, wrote at paragraph [6] of his reasons:
We perceive the trial judge as having undertaken the construction of the claims with "a mind willing to understand". From claims 1 and 5 he was able to deduce that the plug described, being both for tamping and topping, would have to fill all or most of the hole. This function would have to be performed by the body, as the elongated members would not present a continuous blocking surface. We cannot say that he erred in law in going to the disclosures for further clarification as to whether both the body and the elongated members would contribute to the axial stability; a fair reading of the claim would be ensured in that way....There was possible ambiguity at least in the words "said members" and "axial stability" in claim 1 which could be clarified by resort to the disclosures. The disclosures revealed how the plug would function, namely by the elongated members, referred to as "claws", being embedded into the walls of the hole upon explosion of the charge. This information, combined with the expert evidence as to what a skilled workman would understand from it, provided an adequate basis for the Trial Judge to conclude that relatively stiff claws would be required, and that the plug would function best if the body were nearly as large as the diameter of the hole. Thus he was able to construe the claims as he did. [citation omitted]
[25] Mr. Justice Wetston found the Almecon Patent not to be anticipated by any of
the prior art patents or industry products. Further, he found the Almecon Patent not to be rendered obvious by the prior art patents or the prior art industry products in existence in 1984. He found claims 1 and 5 not to be broader than the invention disclosed. Thus, Mr. Justice Wetston concluded at pages 445-6 with regard to the grounds for a claim of invalidity that were before him:
The onus is on the defendant to demonstrate that, on a balance of probabilities, the patent is invalid. I am not satisfied that the defendant has met this burden. The Almecon patent teaches an inventive step which represents an advance in the art regarding topping and tamping plugs. In my opinion, the patent is valid.
b) Persons Skilled in the Art
[26] I adopt Mr. Justice Wetston's conclusion regarding persons who are skilled in the art to which the Almecon Patent relates as referred to in paragraph [21] of these reasons.
c) c) Construction of the Claims
[27] It is worthy of note that in the quotations from his reasons in Almecon Industries Ltd v. Nutron Manufacturing Ltd. quoted in paragraphs [22] and [23], Mr. Justice Wetston adopts the terminology of claim 1 of the Almecon Patent, "...somewhat flattened end part..." while the expression "...substantially closed..." is adopted from the disclosure, not from the claims. Similarly, Mr. Justice Wetston's reference to alternative profiles of the forward end section is adopted from the disclosure and is not referenced in claims 1 and 5. He notes that those alternative profiles include hemispherical and pyramidal. I find it difficult to rationalize Justice Wetston's acknowledgment of alternative profiles for the forward end section that are hemispherical or pyramidal with the element of his construction of the claims to the effect that the forward end of the plug's body member has a surface area which is perpendicular to the longitudinal axis of the body member. This last element of his construction is consistent with a forward end that is a truncated cone but would appear not to be consistent with a profile of the forward end section that is hemispherical or pyramidal in circumstances where the hemisphere or the pyramid is not itself truncated. The disclosure of the Almecon Patent does not suggest that either such profile must be truncated.
[28] As noted by Mr. Justice Wetston, claim 1 speaks of the forward end of the tamping and topping plug having a "somewhat flattened end part". At least certain hemispherical or pyramidal end parts might fall within the concept of "somewhat flattened" but, as I have indicated, it is difficult to conceive of either as presenting a surface area which is "perpendicular" to the longitudinal axis of the body member.
[29] In Alsop Process Co. of Canada v. J. P. Friesen & Son[12], Mr. Justice Cassels wrote at page 355:
While the defendants in the present case may not be technically bound by the decisions in the cases to which I have referred, except as to questions of law, it would require a strong argument to induce me to come to a different view as to the construction of the specifications from that held by the House of Lords and these eminent Judges.
[30] I reach the same conclusion with regard to the construction of claims 1 and 5 of the Almecon Patent, as endorsed by the Federal Court of Appeal and, impliedly at least, endorsed when the Supreme Court of Canada refused to grant leave for an appeal to that Court. Thus, subject to the reservation that I have expressed above, I adopt the construction of claims 1 and 5 of the Almecon Patent provided by Justice Wetston. That reservation, I am satisfied, arises out of differences in the evidence that was before Mr. Justice Wetston and myself which may have been sufficient to not attract Justice Wetston's attention to a reality that I find particularly relevant on the facts before me.
2) Validity of the Almecon Patent
a) Presumption of validity and onus
[31] In Almecon Industries Ltd. v. Nutron Manufacturing Ltd.[13] Mr. Justice Wetston wrote at page 428:
According to ss. 45 and 46 of the Patent Act, ..., an issued subsisting Canadian patent is, absent evidence to the contrary, presumed to be valid during its full term of 17 years from the date of issue. A party attacking the patent must satisfy the court on a balance of probabilities, that the patent is invalid:...
The parties agreed that the court should consider whether the Almecon patent is invalid on the basis of anticipation, obviousness, over breadth of claims 1 and 5, and ambiguity. [citations omitted]
[32] In support of the first paragraph of the foregoing quotation, Mr. Justice Wetston cited Unilever PLC v. Procter & Gamble Inc.[14]. The decision of the Federal Court of Appeal in Diversified Products Corp. v. Tye-Sil Corp.[15] at pp. 357 - 359 is to the same effect.
[33] The issues with regard to the validity of the Almecon Patent that were raised by the defendants in this matter were not raised before Mr. Justice Wetston.
b) Claims broader than invention made or disclosed
[34] Claims 1 and 5 of the Almecon Patent relate to a "tamping and topping plug". The defendants urge that Anchortek's Energy Plug (the "Energy Plug") is simply not a "tamping" plug but rather a "venting" plug in that the forward end of the Energy Plug is not closed or "substantially closed" so as to deflect the explosive energy or force of an explosion in a seismic bore hole down the hole and into the surrounding formations when the energy or force encounters the forward end of the Energy Plug. Rather, it is alleged that the plug permits at least a significant proportion of that energy or force to pass through the plug into the topping that has been placed on top of the plug and thence to "vent" into the atmosphere without a related blowout. The defendants urge that if claim 1 or claim 5 of the Almecon Patent is construed to encompass a bore hole plug such as the Energy Plug, that is to say, a "venting plug" then the claim is invalid as being broader than the invention actually made by the inventors or disclosed in the Almecon Patent.
[35] In Noranda Mines Ltd. v. Minerals Separation North American Corp.[16], President Thorson wrote at page 146 as quoted in the reasons for decision of the Supreme Court of Canada:
By his claims the inventor puts fences around the fields of his monopoly and warns the public against trespassing on his property. His fences must be clearly placed in order to give the necessary warning and he must not fence in any property that is not his own. The terms of a claim must be free from avoidable ambiguity or obscurity and must not be flexible; they must be clear and precise so that the public will be able to know not only where it must not trespass but also where it may safely go. If a claim does not satisfy these requirements it cannot stand.
...
The inventor may make his claims as narrow as he pleases within the limits of his invention but he must not make them too broad. He must not claim what he has not invented for thereby he would be fencing off property which does not belong to him.
[36] In Leithiser v. Pengo Hydra-Pull of Canada, Ltd.[17], Mr. Justice Thurlow as he then was, after quoting from the evidence given on discovery by Leithiser, concludes at page 123:
In the light of this evidence it is, in my view, apparent that the appellant [Leithiser] never invented a cable tensioning machine having a single capstan wheel with a multiplicity of grooves and that such a device if made would not be workable and further that the appellant never invented or devised a single capstan wheel machine with a single groove or with a v-shaped groove. Moreover, no such machine is described in the specification. The claims which include such a single capstan wheel machine accordingly in my opinion claim more than the appellant invented and more than is described in the specification and they are on both accounts invalid.
In effect, Mr. Justice Thurlow adopted and applied the guidance provided in Noranda Mines in defining the impact of claiming more broadly than the invention made or disclosed.
[37] The decision of Madam Justice Reed in Reliance Electric Industrial Co. v. Northern Telecom Ltd.[18] is to the same effect.
[38] In excerpts from the examination for discovery of Mr. Luoma, one of the inventors named in the Almecon Patent and the President of the plaintiff, that were in evidence before me, the following exchanges occurred[19]:
Q. Mr. Garland: Yes. I was referring to the different drawings that you provided to us that we reviewed today with respect to the various embodiments of the Almecon Plug as well as to the Almecon Plug that's shown in the drawings of the patent.
And I asked you if, in fact, in all instances the plugs shown in those drawings comprise a forward end that was completely closed?
A. Yes.
Q. And that forward end that was completely closed obviously changed in configuration; in some cases, it was a truncated cone that was more smooth than in other cases; is that correct?
If you don't recall that, that's fine.
A. Can you repeat that?
Q. All I was saying is that you've indicated that in all the different drawing we've looked at today with respect to the Almecon Plug, in all instances, the forward end of that plug consisted of a completely closed surface.
I was just saying, in fact, that completely closed surface might have a variety of different configurations that we've seen today?
A. Yes.
Q. Yes. And some were truncated cones?
A. Yes.
Q. Some were, as I described them, more smooth?
A. Conical.
Q. What was that -
A. Conical.
Q. Conical, okay. And some were more, as I've described it, more smooth, curved surfaces?
A. Yes. Yes.
Q. Is it fair to say, then, that when you designed your plug which is the subject matter of the patent, you never contemplated a design that included a forward end that had openings; is that true?
MR. STRATTON: That's not what the patent says.
MR. GARLAND: I'm not asking what the patent says. I'm asking -
MR. STRATTON: Well, that's what we're here to discuss.
MR. GARLAND: No. We're here to discuss more than that. I'm asking the witness, who is one of the inventors, at the time when he was designing this device - - and we've looked through a variety of different drawings demonstrating the different embodiments that he's designed - - and I am putting to him, in fact, that he never contemplated as part of his design - -
A. I did.
Q. You did?
A. Yes.
Q. But we don't have any drawings showing such embodiments?
A. I rejected it.
Q. You rejected it.
A. Yes.
Q. And why would you have rejected it?
A. The preferred function of the plug is to perform a plugging function for which by far the majority of customers prefer a closed plug.
Q. So as I understand it, then, when you were in the design stage, you contemplated a version having openings, and, as you said, you rejected it?
A. I mentioned that I did the calculations and that I knew that the plug would not be able to withstand the forces. So I contemplated all kinds of designs.
We had this brainstorming session. Jim Jackson gave his ideas. I came up with everything. I looked at how I can harness the pressure of that charge to lock that plug in the formation and wondered about it about two weeks. Filled my garbage cans several times. And came with the preferred embodiment that, to me, would best do the job.
Q. And that's what ultimately led to the Patent Application, correct?
A. That is correct.
Q. As you say "that version that would best do the job" did not include embodiments with openings; you rejected those?
A. I didn't have an Energy Plug idea, no.
Q. I'm not referring to an Energy Plug per se. I'm just saying embodiments with openings; that's what - you rejected those?
A. That is correct. Yes.
MR. STRATTON: That's the best way to do it.
A. THE WITNESS: That's correct. The way to solve my problem, yes.
Q. MR. GARLAND: Is it fair to say at that stage when you were designing your plug and going through the mental processes, as you said, making the calculation and coming up with what was the subject matter of your invention, that you never contemplated a forward end of a plug which consisted of an opening such as we have here with the Energy Plug with a recessed conical portion?
A. I went through different routings to harness that explosion pressure to give me a plug that would function. And I don't remember exactly what kind of apparatus I was working for. But I could not find a functioning idea that would make any difference.
Q. But, again, you didn't - - well, let me ask you: Was, in fact, one of the embodiments you envisioned back then one such as what the Energy Plug looks like?
MR. STRATTON: I direct the witness not to answer. It's not relevant.
(OBJECTION TO A QUESTION)
MR. GARLAND: My question stands.
Q. Did you envision any embodiment that would permit the passing of some of the energy or material coming up?
A. Yes. I called it venting.
Q. You called it venting?
A. I considered that, yes.
Q. I have not seen any drawings with any embodiments?
A. Well, they didn't go beyond the brainstorming and think tank stage.
Q. Why was that?
A. Because the industry had open holes in 1984 and it was a large problem in the field, and nobody wanted anything to do with gases blowing or anything to do with open. Open holes were outlawed, and it was a big problem. An open plug, to me, is an open hole.
...
A. My statement about the - - rejecting the open plug. Just explain that I didn't - - that's too strong an impression, because I have added holes into my plugs. I knew that the - - that I wanted a plug that is substantially closed. So the opening is included in my patent, and I wanted to maintain that. And the rejection referred more into the preferred embodiment that at the time was solving a blow-out problem. And industry was very sensitive to it, so we preferred to have a plug with - - and plugs without openings to give any expression of - - into the direction that there would be any gases escaping or problems related to the problem prevailing.
So as far as the openings are concerned, I particularly wanted to have a substantially and not necessarily completely closed plug.
Q. MR. GARLAND: Okay. But you will agree with me that in all the design drawings that you provided to us, and in all the drawings in the patent that's in dispute, that in each and every embodiment, the front surface of those plugs is completely closed?
A. That is correct. Yes.
Q. And at the time that you were designing your plug that ultimately became the subject of the patent, I understood you to say that you may have thought of plugs initially that might have vents or holes in them, but you abandoned that in favour of plugs that had no holes?
A. In my development work I considered all avenues available to me to harness the pressure of that explosion in order to provide a Tamping Plug which, to me, was a plug that stays in the hole during detonation or explosion.
And at that point of time by opening it up and relieving pressures, I realized that I can't do significant improvement in my plug invention by that avenue, that I had to go into these mechanical things in locking and inventing the claws into the formation resulting from the forces from the explosion locking it in, and that the earth would carry the forces. I couldn't resort to an avenue where I vented the pressure away.
Q. And if I understood you correctly, when you commenced making your statement at the end here, the customers weren't looking for plugs with holes in them; is that correct?
And, indeed, I got the impression that they might, in fact, react adversely to such plugs?
A. The customers were concerned about blow-outs, and so they were looking for a plug that would prevent blow-outs or the plugs tilting in the hole. That was the problem that we - - got us going.
Q. Was I correct, though, in picking up from you that, in fact, the customers or potential customers might, in fact, have acted adversely to a plug that had holes or vents?
A. That was a fear that was there in the background, that we are in - - we have to develop a plug. And I was fed this information from the field with a limited knowledge at the time. [emphasis added]
[39] Mr. James Jackson, the other named inventor identified in the Almecon Patent, testified before me to the following effect[20]:
Q. You never contemplated the idea of the design with a plug with a front end with a hole or a vent in it; is that not correct, sir?
A. Yes.
Q. Okay. In fact, you never contemplated a design that was intended to permit the passing of some of the explosive force through any gaps or holes or vents in the plug and to allow that energy or force to pass up through the hole, did you?
A. Correct.
[40] By contrast, Mr. Luoma, in his testimony before the Court at trial, gave the following evidence[21]:
Q. At the time, before you filed your patent application on January 25, 1985, did you believe whether or not a plug with holes would work in the manner that you described for your invention?
A. Yes, I did.
Q. And why is that?
A. I had conceived several designs using holes....
....
A. Yes. This was January of '85, so the patent application included "substantially closed", and I contemplated holes as long as they were small enough so that the plug would be able to hold the top filling.
...
A. ...Those conceived designs contained holes and which were okay, as long as the holes was [sic] small enough so that the plug could still hold the topping fill; and that on the other hand, the resulting surface area of the plug would be large enough to intercept that blast coming up the hole.
[41] The disclosure of the patent clearly contemplates the tamping function as not only reducing the incidence of blowouts, but also reducing the loss of the energy of the explosion or blast upwardly through the bore hole. At the same time, it notes that it is "...basically only required that the [front] end... be substantially closed."[22] Further, it contemplates reduction of "...blast leakage"[23] and "substantially" confining the force of the blast "...to the hole and so to the surrounding formations."[24]
[42] Counsel for the Defendants urged that the reference to "substantially closed" in the specification of the Almecon Patent was a "stray phrase" that constitutes nothing more than a "favourable gloss" on the specification. He referred me to Whirlpool Corp. v. Camco Inc.[25] where Mr. Justice Binnie, for the Court, at page 1098, quoted with approval the following passage from Metalliflex Ltd. v. Rodi & Wienenberger Aktiengesellschaft[26]:
The claims, of course, must be construed with reference to the entire specifications, and the latter may therefore be considered in order to assist in apprehending and construing a claim, but the patentee may not be allowed to expand his monopoly specifically expressed in the claims "by borrowing this or that gloss from other parts of the specifications".
[43] I am satisfied based on the totality of the read-ins and testimony that I have cited, regarding "venting" and somewhat open fronted plugs, that the term "substantially closed" as it appears in the specification of the Almecon Patent is neither a stray phrase nor a gloss. Indeed, it is a phrase that was relied upon by Mr. Justice Wetston in his construction of claims 1 and 5 of the patent in Almecon Industries Ltd. v. Nutron Manufacturing Ltd.[27]. Taking into account the totality of the evidence before me, together with the construction of Claims 1 and 5 of the Almecon Patent that I have adopted, I conclude that those claims are neither invalid for being broader than the invention made by the inventors named in the Almecon Patent nor for being broader than the invention actually disclosed in that patent.
c) Inutility / Best Mode
i) Inutility
[44] By section 2 of the Patent Act as it read at the relevant time, "invention" was defined to mean any new or useful art, process, machine, manufacture or composition of matter or any new and useful improvement.
[45] In Consolboard Inc. v. MacMillan Bloedel (Saskatchewan) Ltd.[28], at the trial level, Mr. Justice Collier, at page 216 of his reasons quoted with approval the following passage from Fox, Canadian Law and Practice Relating to Letters Patent for Inventions, 4th ed. (1969):
The true test of utility of an invention is whether it will, when put into practice by a competent person, do what it assumes to do, and be practically useful at the time when the patent is granted, for the purpose indicated by the patentee. "If when used in accordance with the directions contained in the specification, the promised results are obtained, the invention is useful in the sense in which that term is used in the patent law. The question to be asked is whether, if you do what the specification tells you to do, you can make or do the thing which the specification says that you can make or do." As Maugham L.J. observed in Mullard Radio Valve Co. Ltd. v. Philco Radio & Television Corpn. of Great Britain Ltd. et al.: "The meaning is - useful for the purposes indicated by the patentee, whether or not commercial utility is involved. It is sufficient if the invention in the hands of a competent person does what it purports to do, a thing sometimes expressed by the words that 'the wheels must go round'." Simonds J. put the matter even more succinctly when he observed: "There is real utility. The thing works."
The invention must, subject to the qualification above mentioned, be useful as specified and for the purpose stated in the specification and claims, under ordinary working conditions. It is not enough that it be useful in a modified form or in conjunction with something subsequently discovered. The invention must perform that which it assumes to perform, and, unless the invention is useful for the purpose for which the inventor intended it, the patent is void.
Following the above quotation in which Mr. Justice Collier added the emphasis, he concluded:
The plaintiff contends the changes, which all witnesses agreed should be made, could be routinely done by an ordinarily skilled workman. My answer is that usefulness in a modified form is no answer.
[46] Mr. Justice Dickson, as he then was, in the same matter when it came before the Supreme Court of Canada, wrote at page 525 by reference to the 3rd edition of Halsbury that:
It ["not useful"] means "that the invention will not work, either in the sense that it will not operate at all or, more broadly, that it will not do what the specification promises that it will do".
[47] Counsel for the defendants urged that the embodiment of the invention as illustrated by at least certain of the Figures of the Almecon patent, particularly Figures 6 to 8, as well as certain early embodiments of the invention, simply "did not work".
[48] The Almecon King Plug, as illustrated in Schedule 1 to these reasons, was first marketed in the late autumn of 1984. It was a commercial success. Generally speaking, on the evidence before me, "it worked"[29].
[49] Some problems were apparently incurred with the King Plug at least as early as the spring of 1986. In a letter dated the 19th of June, 1986, James Jackson, a co-inventor and marketing manager for Almecon wrote[30]:
Summer King Plug
We have developed a new type of King Plug called Summer King to combat the problems involved in plugging seismic shot holes during soft, summer conditions. This plug follows the design principles of our King Plug, but it is more flexible and larger in order to seal off the larger softer bore holes encountered in summer exploration....
King Plug
As discussed, we have improved our King Plug design by reshaping and sharpening the claws. This in order to improve it's [sic] claw penetration in tough/strong formations, and also to prevent it from falling down in the bore hole....
The original King Plug was Exhibit P-4 at the trial of this action. The modified King Plug was Exhibit P-5. The Summer King was Exhibit D-17. Exhibit D-15 is an undated illustration and description entitled "Summer King Plug".
[50] Mr. Ross Sutherland provided an expert statement on behalf of the plaintiffs and testified on their behalf in rebuttal. At paragraph 28 of his statement[31] he wrote:
I have also considered the claw shapes shown on the Figure 1 configuration of the plug in the Almecon Patent [see Schedule 1 to these reasons]. I do not agree that the plug shown in Figure 1 would not work because it is likely to fall down the hole. I never heard complaints that the first design of the King Plug [as in Figure 1] had problems falling down bore holes.
I am satisfied that Mr. Sutherland's experience in the relevant time period, as described in his statement, was such that he would have become aware of any significant failure of performance of King Plugs of the original design.
[51] In Cochlear Corp. v. Cosem Neurostim Ltée.[32], Mr. Justice Joyal, on the basis of authorities cited by him, wrote at page 35:
The utility of a patent may be proven by the reception received from the public. i.e., its commercial success. ... Utility is also to be judged at the date of the making of the invention, in light of the knowledge existing at that time. ... In light of its commercial success, there can be little doubt as to the utility of the Cochlear prosthesis. [citations omitted]
[52] I am satisfied on the evidence before me that the original King Plug embodiment of the Almecon Patent was well received in the industry and was a commercial success. Subsequent modifications and variations to its design to improve performance in specific conditions cannot, of themselves, make out a case that the invention, as embodied in an original design, lacked utility.
[53] Figures 6 to 8 of the Almecon patent are illustrative of the original version of Almecon's Queen Plug. Some of the evidence before me was to the effect that the original version of the Queen Plug was never manufactured or sold commercially[33]. The Queen Plug was modified on at least two occasions, eventually assuming the form that was Exhibit D-20 before me. In this form, it was ultimately approved by the Government of Alberta.
[54] Counsel for the defendants urged that Figures 6 to 8 of the Almecon patent depict an embodiment that would not have the "axial stability" as required by the patent. In the result, counsel urged, to the extent that claims 1 and 5 of the Almecon patent encompass the embodiment shown in Figure 6 to 8 of the patent, those claims are invalid for encompassing an embodiment that is inoperative or lacks utility.
[55] I reject this argument. The evidence before me regarding actual use of the original Queen Plug was conflicting. In a witness statement filed before me[34], Mr. Ross Sutherland wrote at paragraph 27:
I have also been asked to consider the Queen Plug made and sold by Almecon. I am familiar with the original Queen Plug shown in Figures 6 to 8 of the Almecon Patent. In fact, at least one crew under my supervision used this type of plug. I am not aware of complaints that the plug did not work correctly. I therefore disagree with the theory that the plug would be unsuitable for use. I note that my use of the original Queen Plug was not an experimental use. The crew used the plug in a normal commercial way.
Mr. Sutherland testified before me. He confirmed the foregoing paragraph from his statement. He was not shaken on the question of commercial use of the original Queen Plug under cross-examination.
[56] As noted earlier in these reasons, a party, here the defendants, attacking a patent must satisfy the Court, on a balance of probabilities, that the patent is invalid. Given the conflicting evidence before me regarding commercial use of the original Queen Plug, I conclude that the defendants have failed to discharge the onus on them with regard to their allegation that claims 1 and 5 of the Almecon Patent encompass an embodiment that is inoperative and will not function.
ii) Best Mode
[57] Paragraph 34 (1) (c) of the Patent Act, as it read at the relevant time, which is to say the date of application for the Almecon Patent, provided that an applicant should, in the specification of his invention of a machine, and the tamping and topping plug here at issue is undoubtedly a "machine", explain the principle of the machine and describe the best mode in which he contemplates the application of that principle. In Minerals Separation North American Corp. v. Noranda Mines Ltd.[35] President Thorson wrote at page 112:
...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.
[58] In TRW Inc. v. Walbar of Canada Inc.[36], Mr. Justice Stone, after citing the foregoing passage from Minerals Separation, commented at page 195:
It seems clear from these words of Thorson P. and of the statute itself that the inventor's duty is to describe the best method known to him, not just a method known to him.
[59] The application for the Almecon Patent was originally filed on the 25th of January, 1985. Subsequent to the filing of the application, on the 27th of June, 1985, Almecon filed a voluntary amendment to its application in the form of a Supplementary Disclosure which introduced into the application the portion of the disclosure describing two new drawings, Figures 10 and 11, and claims 20 to 24.
[60] On the basis of the Supplementary Disclosure and modifications to embodiments of the invention first marketed by the plaintiff in late autumn of 1984, counsel for the defendants urged that I should find that the disclosure originally filed did not disclose the "best mode" known to the inventors at the date of filing.
[61] In Lido Industrial Products Ltd. v. Teledyne Industries Inc. et al.[37], Chief Justice Thurlow, dissenting in part in a manner not relevant to what follows, adopted a passage from Fox, Canadian Law and Practice Relating to Letters Patent for Inventions, (4th ed. (1969)), relating to the law respecting the necessity of disclosure of the "best mode". The passage adopted included the following:
The aim of the law is directed toward restraining a man from obtaining a patent in return for the disclosure of a means or method of putting his invention into practice that is less efficacious than the best known to him at the time of his application. If he does that, there is a failure of consideration for, by this means, he reserves to himself the more valuable part of the information concerning the invention. He must put the public in possession of the invention in as full and ample a manner as he himself possesses it and give to them the opportunity of deriving benefits therefrom equal to the benefits accruing to him. [emphasis added]
[62] Counsel for the plaintiff urged that I should not rely on the foregoing because the Lido case involved a priority application. I am satisfied that the fact that the Lido case involved a priority application is irrelevant for the purposes of my reasons. The essence of the foregoing quotation, as applicable to the facts of this matter, is that the inventors must disclose the "best mode" known to them at the date of filing of the application for a patent. There was absolutely no evidence before me that the inventors named in the Almecon Patent did otherwise. Between the date of filing of their application and the date of filing of the Supplementary Disclosure, significant field experience was gained with respect to embodiments of the invention. It is not unreasonable to assume that that field experience gave rise to the Supplementary Disclosure as well as to improvements to the embodiments of the invention that implemented used in the field, whenever those modifications were made.
[63] I determine that there is no evidence before me that would lead me to a conclusion that the plaintiff and the inventors failed to disclose in the application for the Almecon Patent the "best mode" known to it and them on the date that application was filed. Thus, the attack on validity of the patent based upon failure to disclose the best mode known must fail.
d) Conclusion with Respect to Validity
[64] On the basis of the issues raised by the defendants with respect to the validity of the Almecon Patent, I conclude that the defendants have simply failed to discharge the onus on them, on a balance of probabilities, to demonstrate the invalidity of the Almecon Patent or, more particularly, claims 1 and 5 of that patent.
3) Infringement of the Almecon Patent
a) Introduction
[65] In Almecon Industries Ltd. v. Nutron Manufacturing Ltd.[38], Mr. Justice Wetston summarized his construction of claims 1 and 5 of the Almecon Patent in the following terms at paragraph [32] of his reasons:
Accordingly, I conclude that the invention embodied in the claims of the Almecon patent teaches the following:
(1) The plug has a body;
(2) The body has claws which extend outwards and rearwards;
(3) The claws and the body provide axial stability;
(4) The end of the plug is somewhat flattened; and,
(5) The plug has a truncated cone consisting of a conical section with the pointed end removed and replaced by a flat surface.
I am satisfied that the reference in subparagraph (4) to "the end of the plug" is a reference to the "front end of the plug".
[66] I find it noteworthy that the foregoing summary makes no reference to the front end surface area being perpendicular to the longitudinal axis of the body member or to the somewhat-flattened front end part being substantially closed. I have commented on these aspects of Mr. Justice Wetston's construction earlier in these reasons.
[67] Mr. Justice Wetston commented on the test for infringement at paragraphs [105] and [106] of his reasons where he wrote:
The question of patent infringement is a mixed question of fact and law. The initial construction of the claims is a question of law: ...However, once the claims of the patent have been interpreted, the task of determining whether a claim has been infringed becomes essentially one of fact:...The Court must consider what has, in fact, been done by the alleged infringer.
The burden is on the plaintiff to show infringement. By comparing the allegedly infringing item with the patent specification (both disclosure and claims), it must be decided whether the item falls within the scope of the patent in suit. If it does, there is infringement:...If a variant of an aspect of a claim has no material effect on the way the invention works, there is a presumption that the patent is infringed, and that the patentee intended that the variant fall within the scope of the claim;...
[citations omitted, emphasis added]
[68] Mr. Justice Wetston then went on to comment on substantive infringement and textual or literal infringement. Since his decision, there has been substantial further guidance from the Supreme Court of Canada on this issue. In Baker Petrolite Corporation et al. v. Canwell Enviro-Industries Ltd., et al.[39], I reviewed in part what I considered to be relevant jurisprudence from this Court and recent jurisprudence from the Supreme Court of Canada at Paragraphs [128] and [129] where I wrote:
In Cabot Corp. v. 318602 Ontario Ltd., 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]
More recently, in Free World Trust...Mr. Justice Binnie wrote at pages 183-4:
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"). ...
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 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 (6) propositions identified by him that address the issue of how best to resolve the tension between "literal infringement" and "substantive infringement".
[citations and certain portions of the quotation from Free World Trust omitted]
The reference to Free World Trust in the foregoing quotation is to Free World Trust v. Électro Santé Inc.[40] The page references are to the reasons for that decision as reported at (2000), 9 C.P.R. (4th) 168.
[69] The six propositions enunciated by Mr. Justice Binnie are the following[41]:
(a) The Patent Act promotes adherence to the language of the claims.
(b) Adherence to the language of the claims in turn promotes both fairness and predictability.
(c) The claim language must, however, be read in an informed and purposive way.
(d) The language of the claims thus construed defines the monopoly. There is no recourse to such vague notions as the "spirit of the invention" to expand it further.
(e) The claims language will, on a purposive construction, show that some elements of the claimed invention are essential while others are non-essential. The identification of elements as essential or non-essential is made:
(i) on the basis of the common knowledge of the worker skilled in the art to which the patent relates;
(ii) as of the date the patent is published;
(iii) having regard to whether or not it was obvious to the skilled reader at the time the patent was published that a variant of a particular element would not make a difference to the way in which the invention works; or
(iv) according to the intent of the inventor, expressed or inferred from the claims, that a particular element is essential irrespective of its practical effect;
(v) without, however, resort to extrinsic evidence of the inventor's intention.
(f) There is no infringement if an essential element is different or omitted. There may still be infringement, however, if non-essential elements are substituted or omitted.
Here, the date on which the patent was published is the date of issue of the patent, the 7th of April, 1987.
[70] In light of the foregoing six (6) propositions and comparing the most relevant embodiment of the Almecon Patent before me which was in commercial use as at the 7th of April, 1987, the King Plug,[42] and the most relevant form of the Energy Plug here in issue[43], I am satisfied that the "essential" elements of the invention of the Almecon Patent are a body, a "somewhat flattened" front end, a "substantially closed" front end, claws which extend outwards and rearwards from the body, axial stability provided by the body and the claws, the fact that all such features contribute to the prevention or minimization of blowouts and the retention of the energy of a blast in the drill hole below the plug itself, and that the plug acts as a "topping plug".
[71] Both plugs have a body. Although the fact that the Energy Plug has two claws which extend outwardly and perpendicularly to the longitudinal axis of the plug constitutes a difference, I am satisfied it is not a material difference. The fact that in each case the claws and the body provide axial stability and that both plugs act as "topping plugs" are essential elements that were not in dispute before me. Interrelated with the questions of whether or not the Energy Plug has a front end that is "somewhat flattened" and that is "substantially closed" is the question of whether or not the Energy Plug, when encountered by the energy or force of an explosive blast beneath it in the bore hole, is driven slightly upwards in a manner that sets or imbeds the outwardly and perpendicularly or rearwardly extending claws in a manner that contributes to minimization of blowouts or, put another way, works to minimize energy loss through or around the seismic plug.
[72] For ease of reference, claims 1 and 5 of Almecon Patent, the claims alleged to be infringed, are repeated here:
1. A tamping and topping plug for use in a seismic bore hole, and comprising:
a body member having a forward and a rearward end and terminating at its forward end with a somewhat flattened end part;
a plurality of elongated members extending outwardly and rearwardly from at least one end of the said body member, said members so arranged as to give said plug axial stability when inserted into a bore hole.
...
5. The plug of claim 1 in which the configuration of the said end part is a truncated cone.
b) Somewhat flattened "Front End"
[73] The identification of the "front end" of Anchortek's Energy Plug[44] is somewhat difficult. I find most helpful two (2) CAD drawings that the plaintiff's expert witness Clifford J. Anderson had prepared to show the Energy Plug in elevational or profile view. Those drawings appear in paragraph 26 to his expert statement[45]. They are reproduced here.
[74] In his statement, Mr. Anderson attests with respect to the above drawings:
The first drawing [that is to say, the drawing on the left] shows the recessed cone of the plug in outline, as it is found in the Energy Plug as made and sold.
In the drawing on the right, the recessed cone has been removed from its position within the plug, the four (4) fixed members by which the recessed cone is suspended within the plug have been removed, and the recessed cone has been placed on top of the plug.
[75] I am satisfied that these drawings most effectively define the front end and the back end of the Energy Plug. The front end, is, I am satisfied, the highly truncated cone that forms the top approximately 3/8 of one inch of the plug in the drawing on the left together with the recessed portion of the plug consisting substantially of a conical portion, a flange below the conical portion, and the members by which the recessed portion of the plug is attached to the body of the plug. The "back end" of the body of the plug is the portion below what I have defined to be the front end of the plug in the drawings and to which the "claws", including the horizontally mounted "claws", are attached.
[76] Is then the front end of the Energy Plug "somewhat flattened"? On the totality of the evidence before me, I conclude that the answer to that question is that the front end of the Energy Plug is "somewhat flattened", albeit not in the same manner in which the front end of the plaintiff's King Plug is flattened. The front end of the Energy Plug is, I conclude, at least as flattened as the hemispherical and pyramidal configurations for the front end of a tamping and topping plug that are contemplated by the disclosure of the Almecon Patent.
[77] I find it useful to refer to another CAD drawing included by Mr. Anderson in his expert statement. This one is associated with paragraph 27 of that statement. The following drawing illustrates the Energy Plug superimposed with the conical front end of the Super Grip Nutron Plug that Mr. Justice Wetston found to infringe claims 1 and 5 of the Almecon Patent.
While it is apparent from the foregoing drawing and from the Exhibits before me that the Nutron Super Grip Plug in fact had a horizontal surface as an element of its front end, which horizontal surface supports a small cone, the equivalent feature of the Energy Plug that I find constitutes a "somewhat flattened front end" is the flat portion of that front end in which the interior cone is suspended. While the flattened portion of the Energy Plug is certainly not closed, I am satisfied that it is, undisputably, "somewhat flattened".
c) Substantially closed front end
[78] The recessed portion of the Energy Plug is suspended from the rest of the body of the plug in a manner that leaves openings that would undoubtedly allow energy, liquids and material such as mud and sand to pass through the plug. The Energy Plug is therefore certainly not fully closed. The question remains whether the front end of the Energy Plug is nonetheless substantially closed.
[79] Much evidence was adduced before me regarding the "venting" qualities of the Energy Plug and as to whether, in actual operation, immediately following an explosive blast below the plug, the small openings would very quickly become blocked by material driven up the drill hole by the force of the blast in a manner that would minimize the escape of energy and material through the plug. In essence, the debate before me centred around whether the Energy Plug was in fact a "tamping plug" or rather a "venting plug", or perhaps a tamping plug with some venting capacity.
[80] The defendants presented video evidence of field trials using the Energy Plug, conducted by the Government of Alberta, which demonstrated to those who were quick-of-eye that on some occasions, when an explosive blast was detonated below an Energy Plug in a seismic drill hole, at least some energy escaped through or around the plug to the earth's surface.
[81] By contrast, the plaintiff presented evidence of laboratory tests designed to simulate the result of an explosive blast detonated below an Energy Plug in a seismic borehole in order to demonstrate that the Energy Plug contained sufficient energy from the blast in the borehole below the plug to drive the plug slightly upward and to thus set the claws of the plug in the sides of the simulated borehole.
[82] I found neither the video evidence nor the evidence provided by the laboratory tests to be satisfactory, let alone conclusive. The reality remained, and the experts who appeared before me were substantially in agreement on this, that how a plug inserted into a borehole reacts when an explosion is detonated beneath it remains speculative, with such speculation supported at best by scientific theory.
[83] On the totality of the evidence before me, I am satisfied that the front end of the Energy Plug is "substantially closed". Once again on the totality of the evidence before me, I prefer a conclusion that the nature and size of the openings in the front end of the Energy Plug are such that, immediately following an explosive blast below the plug, the openings would be blocked and at least a substantial portion of the energy of the blast would be retained in the seismic borehole. The Energy Plug would likely be driven slightly upward by retained energy, thus tending to "set" the claws in the sides of the borehole.
d) Conclusion with respect of infringement
[84] In the result, I conclude that the Energy Plug is a "tamping plug"; that is to say that, by reason of axial stability aided in part by the embedding of the claws of the plug in the sides of the borehole, it works to minimize blow-outs and as well to minimize energy loss through or around the seismic plug. That the Energy Plug, like the preferred embodiment of the invention, serves as a "topping plug" was essentially not in dispute before me.
[85] While there is no doubt that the design of the Energy Plug, at first blush, creates an impression that it is substantially different than a plug embodying the essential features or elements set out in claims 1 and 5 of the Almecon Patent, I am satisfied that no essential feature or element is different or omitted. I find the use of perpendicularly extending claws to be a non-essential substitution. Similarly, I find the recessing of a substantial portion of the front end of the Energy Plug to be a modification in form only. In the result, I find that the Energy Plug infringes claims 1 and 5 of the Almecon Patent.
4) False or misleading statements
[86] As noted earlier in these reasons, the defendant Anchortek, as plaintiff by counterclaim, seeks a declaration that the plaintiff has made misleading statements to Anchortek's customers contrary to paragraph 7(a) of the Trade-marks Act[46]. The opening words of section 7 and paragraph (a) of that section of the Act read as follows:
7. No person shall
(a) make a false or misleading statement tending to discredit the business, wares or services of a competitor;
...
7. Nul ne peut_:
a) faire une déclaration fausse ou trompeuse tendant à discréditer l'entreprise, les marchandises ou les services d'un concurrent;
...
[87] In argument, counsel for the defendants alleged that the plaintiffs indicated to one of Anchortek's customers, namely, Austin Powder Ltd., that the Energy Plug infringed the Almecon Patent. In my view, this allegation by counsel was not established on the evidence before me. In any event, what is not in dispute is that the plaintiff brought a law suit against Austin Powder Ltd. in 1996, alleging infringement of the Almecon Patent through the sale by Austin Powder Ltd. of Energy Plug products.[47] That action was settled in August of 1999. A term of the settlement agreement[48] was that Austin Powder Ltd. agreed to purchase 70% of its yearly volume of seismic tamping and topping plugs from Almecon. One of the impacts of this term was that Austin Powder Ltd. purchased fewer tamping and topping plugs, and perhaps related products, from the defendant Anchortek.
[88] In light of the conclusions that I have reached earlier in these reasons, I cannot conclude that the plaintiff made any false or misleading statement to Austin Powder Ltd. consisting of an allegation that the Energy Plug infringed the Almecon Patent. Nonetheless, even if I were found to be wrong in my conclusions regarding the validity of the Almecon Patent and the infringement of that patent by the Energy Plug, I am satisfied that Anchortek could not succeed on this aspect of its counterclaim.
[89] In S. & S. Industries Inc. v. Rowell[49], Mr. Justice Spence implies that the appropriate course of action for a person, such as the plaintiff here, who seeks to defend its patent is to commence an action for infringement. He contrasts this with a situation in which a patent holder fails to commence action but merely alleges a valid patent and infringement in an effort to alter the conduct of a purchaser or user of a competing product such as Austin Powder Ltd.
[90] In Chase Manhattan Corp. v. 3133559 Canada Inc.[50] Mr. Justice Dubé, in oral reasons, noted:
The impugned paragraphs do not disclose material facts which could form the basis for the allegations of false and misleading statements under paragraph 7(a) of the Trade-marks Act ("the Act") . The paragraphs under attack refer to allegations made by the plaintiff in its Statements of Claim in this action... and another Federal Court action ... against an individual, ... . An allegation in a statement of claim cannot stand as a basis for claiming that the party who has commenced the action has made a false or misleading statement under paragraph 7(a) of the Act. [citations omitted]
[91] The settlement agreement between the plaintiff and Austin Powder Ltd., on its face, reflects no direct allegation of infringement. That the statement of claim leading to that settlement agreement would make such an allegation is, I am satisfied, evident. But I am in agreement with Mr. Justice Dubé that a statement, on the face of a statement of claim, cannot stand as a basis for claiming that the plaintiff made a false or misleading statement within the ambit of paragraph 7(a) of the Trade-marks Act. I find no evidence of any other such statement on the face of the material and the oral evidence adduced before me.
[92] In the result, Anchortek's claim for damages against the plaintiff for false or misleading statements must be dismissed.
CONCLUSIONS
[93] In summary then I find the Almecon Patent, being Canadian Patent 1,220,134, to be valid and to have been infringed by Anchortek's Energy Plug. Further, and partially in light of the foregoing findings, I find no merit to the defendant Anchortek's counterclaim.
[94] A declaration will go, as requested by the plaintiff, to the effect that Canadian Patent No. 1,220,134 is valid and the plaintiff's interest therein has been infringed by the defendants through the manufacture, sale and resale of Anchortek's Energy Plug. As agreed by the parties and consistent with an earlier Order in this proceeding, a reference will be ordered to determine the quantum of the damages or profits to which the plaintiff is entitled by reason of the infringement by the defendants of the patent in suit. Judgment will go in favour of the plaintiff, as against each of the defendants, for the appropriate amount of damages or profits whichever is elected by the plaintiff, as so determined, together with pre and post judgment interest.
[95] At the request of counsel, I will defer my decision regarding the question of costs. These reasons for judgment will be distributed and counsel will be provided a reasonable opportunity to review them and to make written submissions on the question of costs following which a supplementary judgment as to costs will issue.
INTERLOCUTORY ISSUES
[96] During the course of trial in this matter, I was called upon to make a number of interlocutory rulings that were not recorded formally as orders. In respect of some of those rulings, I effectively gave oral reasons. Counsel suggested in the course of trial that it might be useful if at least some of those rulings were recorded in these reasons since, I assume, they might be relevant if my decision herein goes to appeal. What follows is a resume of my reasoning on the interlocutory issues that I consider of some substance.
a) Read-ins regarding an inference to be drawn from a change in product by Anchortek; the Bearspaw Plug and Spider Plug issue
[97] Paragraph 20 of the Agreed Statement of Facts that is set out in full earlier in these reasons is repeated here for ease of reference:
Since approximately March, 1996, Anchortek has manufactured seismic hole plugs which are not alleged to infringe the Almecon Patent. These plugs have been sold by Anchortek to the remaining three co-defendants and to Austin Powder Ltd.
[98] Two seismic hole plugs, known as the Bearspaw Plug and the Spider Plug were introduced during the first day of trial as Exhibits P-10 and P-11. I was assured that those exhibits are the seismic hole plugs referred to in the above-quoted paragraph of the Agreed Statement of Facts.
[99] Counsel for the plaintiff advised that he was proposing to introduce in the course of trial certain read-ins from examinations for discovery that would support the proposition that reference to the design of the Bearspaw and Spider Plugs would support an inference that the defendant Anchortek, following Mr. Justice Wetston's earlier decision and a decision on an appeal therefrom, effectively conceded, that its Energy Plug in fact infringed the Almecon Patent. Counsel for the defendants urged that I should not allow read-ins for the purpose of supporting such an inference.
[100] I upheld the objection on behalf of the defendants in the following terms:[51]
I am happy to have the exhibits which are the Bearspaw Plug and the Spider Plug as exhibits, and I understand that if there was a reservation about the relevance of those as exhibits, that is now withdrawn. The concern on behalf of the defendant is how I use those exhibits, and in essence, there is no concern that I use them in relation to defense [sic] to counterclaim
Since those exhibits are before me, questions and answers that serve to identify those plugs are relevant to what those exhibits mean to me, and I am prepared to order, if it be necessary, that those questions come in as read-ins if the plaintiff so chooses.
In the absence of any authority being cited to me, I am very reluctant to draw an inference regarding infringement from the form of plug that the defendants went to after it became apparent that the action - - the decision taken by Justice Wetston was going to stand.
I think it would be unfortunate to discourage efforts to mitigate potential damages, and in effect if I were to consider drawing such an inference, that is what I would be doing. I would be saying to businesses such as Anchortek and its codefendants, the distributors, you are on the horns of a dilemma. You would like to mitigate damages but you dare not, because if you do, you will be conceding the opportunity to the court to draw an inference that you really knew you were infringing.
It does not, in my view, make economic sense to put defendants in actions such as this in that kind of a position where they have to continue to face the possibility of mounting damages in order to avoid compromising their perhaps deeply-held belief that they are not infringing.
...
I reserve on the issue of introduction of read-ins in reply to the counterclaim that might in the context of the way that claim unfolds in the course of this trial be relevant as a defense [sic] to that counterclaim. [one editorial deletion incorporated]
b) Opinion evidence of an individual not qualified as an expert
[101] Immediately following the foregoing ruling, I was asked to rule on the admissibility of read-ins related to how the Energy Plug operates as a seismic borehole plug. Objection was taken to the read-ins because, essentially, it was opinion evidence not of an expert and not supported by an expert affidavit or statement.
[102] In support of admitting the read-ins, counsel for the plaintiff referred me, among other authorities, to Sopinka, Lederman, and Bryant, The Law of Evidence in Canada[52] where the learned authors wrote at page 609:
Courts now have greater freedom to receive lay witnesses' opinions if: (1) the witness has personal knowledge; (2) the witness is in a better position than the trier of fact to form the opinion; (3) the witness has the necessary experiential capacity to make the conclusion; and (4) the opinion is a compendious mode of speaking and the witness could not as accurately, adequately and with reasonable facility describe the facts she or he is testifying about.
[103] I determined to allow the read-ins in question into evidence reserving to myself the issue of weight to be accorded.[53] Directing my comments to counsel for the defendants, I noted[54]:
I look forward to hearing from you again when you tell me during argument that there are some of those questions and answers I should ignore or give no weight to at all because they clearly conflict with expert opinion and this person is not an expert. I will listen to that with great sympathy, but I can't listen to it with sympathy if I don't have the material in front of me from which to make a judgment.
Thus, an opportunity was afforded to counsel for the defendants to address the question of weight to be accorded to the read-ins in issue.
c) Evidence as to prior art in light of the limited attacks on validity here at issue
[104] Later in the trial, counsel for the defendants objected to a particular line of questioning of Mr. James Jackson in reply and rebuttal. Counsel for the defendants stated[55]:
... I am objecting to the questions or any questions that would pertain to plugs other than what Mr. Jackson had a hand in designing. It's important to realize we have not attacked the validity of the patent on the basis of anticipation, i.e., prior art. We have not attacked the validity of the patent on the basis of obviousness. What else was out there; was there actually an inventive step involved. That's not the issue.
The only validity attacks pertain to what we see, what did Mr. Jackson actually invent, what was the nature of his design, what is disclosed in the patent, and whether or not what's disclosed in the patent and what he actually invented is what we find in the Energy Plug, and then there's some questions regarding particular utility features of the plug he designed.
What is not relevant to this case, I submit, is the prior art plugs that came before the plug of the patent that Mr. Jackson and Mr. Luoma worked on, because again, we haven't alleged that their patent lacks novelty; we haven't alleged that their plug doesn't have the requisite degree of inventive ingenuity over what came before it, so what came before it, I submit, is wholly irrelevant.
[105] Counsel took me to Leithiser et al v. Pengo Hydro-Pull of Canada Ltd.[56] where Mr. Justice Thurlow, as he then was, wrote at page 118:
On this basis two questions arise.
The first is whether the claims of the appellant's patent claim more than he invented. The second is whether the claims are broader than the invention which is described in the specification. If the answer to either question is in the affirmative, as I understand the law, the claims are invalid.
The same attacks on validity, and only the same attacks, were before me.
[106] At pages 589-90 of the transcript, volume 6, I am recorded as stating:
As I recall the read-ins, which I looked at very briefly, which the defendants put in, they go to what Mr. Jackson's coinventor [Mr. Luoma] understood to be the problem that he was trying to solve at the time of the invention. That's exactly parallel to the evidence that is cited in the Leithiser decision.
There was not put before Mr. Luoma, ... a whole range of plugs as we have got here today, but rather he was invited to testify as to what he was doing, what he was trying to accomplish when he made this patent, when he made this invention.
Counsel for the plaintiff urged that he was only taking the witness to prior art plugs for precisely the same purpose, that is to say, to determine Mr. Jackson's perception, by reference to the prior art plugs, of what the problem was that he and Mr. Luoma were trying to solve.
[107] I concluded as recorded at page 591 of the same volume of the transcript, with one omission and one significant correction:
I am going to allow questioning of this witness, ... as to what Mr. [Jackson] recalls his perception to be of the problem that he and his coinventor were trying to overcome.
Thus, while in substance I overruled the objection raised by counsel for the defendants and allow questioning of Mr. Jackson by reference to prior art borehole plugs, it was for a limited purpose only. In so ruling, I am satisfied that my decision provided a result exactly parallel to that taught by the Leithiser decision.
d) Scope of rebuttal / reply evidence
[108] On the seventh day of trial, counsel for the defendants raised objection to paragraphs 8 to 26 of the witness statement of Ross Sutherland[57] filed by the plaintiff on the grounds that those paragraphs constituted improper rebuttal/reply evidence as it constituted an attempt on the part of the plaintiff to split its case in chief.
[109] Counsel on both sides presented the Court with written briefs on the issue as well as oral argument. Counsel for the defendants made reference to the following passage at pages 21-2 of Allcock Laight & Westwood Ltd. v. Patten, Bernard & Dynamic Displays Ltd.[58]:
It is well settled that where there is a single issue only to be tried, the party beginning must exhaust his evidence in the first instance and may not split his case by first relying on prima facie proof, and when this has been shaken by his adversary, adducing confirmatory evidence: Jacobs v. Tarleton ... . That case was considered by this Court and the principle therein enunciated was applied in R. v. Michael ... . The rule is now so well settled that it requires no further elaboration. It is important in the trial of actions, whether before a jury or a Judge alone, that this rule should be observed. A defendant is entitled to know the case which he has to meet when he presents his defence and it is not open to a plaintiff under the guise of replying to reconfirm the case which he was required to make out in the first instance or take the risk of non-persuasion. [citations omitted]
[110] By contrast, in Bombardier Ltd. v. Restrictive Trade Practices Commission[59], Mr. Justice Cattanach wrote at page 260:
The foregoing reasons, expressed in summary form, are that the evidence of Dr. Rosenbluth was not an essential ingredient of the Director's case. At the most it was helpful to the Commission in assessing the factual evidence before it but was not, in itself, factual evidence upon which the Director's case was based. The evidence of Dr. Skeoch was accepted by the Commission for that reason; and the evidence of Dr. Rosenbluth was accepted for the like reason. Thus the evidence of Dr. Skeoch was "new evidence" and was the proper subject of rebuttal. The exact evidence to be given by Dr. Skeoch could not be ascertained with certainty by the adverse party and accordingly the Commission properly exercised a discretion vested in it. Superimposed over this is that the Commission is not bound by the rules prevailing in a law Court provided that in not doing so it does not act unfairly. The opinion of an expert witness is only as valid as the reasons upon which that opinion is based. Those reasons are subject to the test of cross-examination. The facts upon which the expert's opinion is based may also be disputed whether from his personal knowledge or facts given to him. The source of facts given to the witness may be disputed as to its validity. Being possessed of those rights that evidence is not accepted at its face value and is subject to attack by the party adverse in interest. In the light of these circumstances it cannot be said that the Commission had acted unfairly in acting as it did.
[111] While subject to rules that did not fetter the discretion of the Commission, as referred to by Mr. Justice Cattanach, I nonetheless adopted his reasoning as set out in the foregoing quotation. At pages 758 to 760 of the transcript of the trial in this matter, I made the following ruling, edited without, I am satisfied, affecting the substance:
What Mr. Justice Cattanach had before him in Bombardier was a decision of the Restrictive Trade Practices Commission to allow in as reply or rebuttal evidence apparently an expert statement. That, as here, could have been introduced in the applicant Director's main case, but the Director saw fit not to introduce it, knowing full well that the respondent, Bombardier, had an expert statement on the same subject matter. But as here, it would seem that the Director's counsel was uncertain as to whether Bombardier would rely on that expert statement, and if it did not do so, then it was the position of the Director that he through his counsel didn't want to raise the issue because that would have compelled the reply.
Mr. Justice Cattanach concluded that that was a reasonable position to take and [refused to overturn the decision of the Commission to allow the introduction of the Director's expert statement as reply or rebuttal following the introduction of Bombardier's expert statement in defence].
...
Now, it's true that - and Mr. Justice Cattanach noted this - - that the Restrictive Trade Practices Commission was not technically bound by the Rules of Evidence, but the basis on which ... he supported [the decision of the Commission] was his assumption, that the ... Commission through its chairman regarded the evidence as useful and regarded the process as not unreasonable on the part of the Director, and that's the conclusion I reach here.
The issue of venting as opposed to tamping as [counsel for the plaintiff] said ... was raised very indirectly in the statement of defence. It certainly was raised directly in the expert affidavits [presented] filed on behalf of the defendants, but the mere [presentation] of those affidavits ... represented no commitment on the part of the defendants to introduce them as part of their case, no commitment to call the experts who gave those statements to give evidence in defence.
In the circumstances, without such a commitment, I regard it as not unreasonable on the part of the plaintiff to not raise the issue of venting versus tamping on its own initiative. Indeed, I conclude that it was not in the interest of the plaintiff to do so. That being said, the defendants were on... notice that if they chose to raise the issue that there was an expert statement on the plaintiff's behalf on the same issue, and it was not illogical to presume that the plaintiff would therefore wish to introduce that as reply.
I don't regard either side as being particularly prejudiced or in any sense taken by surprise that the defendants saw fit to raise this issue in [their] evidence and that the plaintiff now sees fit to raise it in reply or rebuttal.
So I propose to allow in the evidence of Mr. Sutherland that is reflected in paragraphs 8 to 26 of his expert statement, and if that requires an order under Rule 181 [of the Federal Court Rules, 1998] making exception to the general provisions of that Rule, I will so provide.
That being said, out of a sense of fairness and indeed of justice, as I see it, the plaintiff having chosen to proceed in this way, I am prepared to hear surrebuttal.
e) Further additions to read-ins
[112] I understand that it is not uncommon in trials such as that giving rise to these reasons, that counsel have difficulty reaching agreement as to the scope of read-ins from discoveries. In this particular case, counsel for the defendants urged that I should accept certain additions to read-ins proposed to be entered as evidence on behalf of the plaintiff. He referred me to Foote et al v. Royal Columbian Hospital et al[60] where Chief Justice McEachern wrote at page 98:
In my view it is appropriate for the Court, on its own motion, or on the request of any party, to put into evidence any other parts reasonably connected to portions of an examination already put into evidence. In determining whether parts of the examination are connected, the Court may consider continuity of thought or subject-matter, the purpose of introducing the evidence in the first instance, and fairness in the sense that the evidence should, so far as possible, represent the complete answer of the witness on the subject-matter of the inquiry so far as the witness has expressed it in the answers he has given on his examination for discovery. In this way the Court strives to ensure that the evidence of the witness on each subject-matter is complete, but the Court must, of course, be careful also to ensure that answers are not admitted into evidence which, upon a consideration of the course of the trial, ought to be adduced, if at all, by viva voce evidence.
[113] I accepted into evidence the additional elements of the examinations for discovery proposed on behalf of the defendants. At pages 838 and 839 of volume 9 of the transcript, I am recorded as having ruled as follows, once again with editorial changes only:
[Counsel for the plaintiff] has taken me to a set of rules, one of which is to make sense out of nonsense or to explain, another to include anything that changes or contradicts or qualifies, anything that completes an answer in circumstances where completion would not be unfair; and I, for my own purposes, would lump those all under one expression, which is "contextualisation". Anything that doesn't contextualise, that is not connected, should not come in. But anything that puts what a party proposes to introduce into context, whether by way of explanation, amplification, contradiction, qualification, whatever term you want to use - all of which I include within "contextualisation" - should come in, particularly in circumstances where that contextualisation better enables the presiding judge to assign appropriate weight.
___________________________
J. F.C.C.
Ottawa, Ontario
December 19, 2001
SCHEDULE 1
Figures 1 to 4 to of the Almecon Patent
(paragraph 7)
SCHEDULE 1 (Cont'd)
SCHEDULE 2
Modified King Plug
(paragraph 8)
SCHEDULE 3
Original Energy Plug Design
(paragraph 9)
SCHEDULE 4
Modified Energy Plug Design
(paragraph 9)
SCHEDULE 5
Figure 9 of the Almecon Patent
(paragraph 17)
FEDERAL COURT OF CANADA
TRIAL DIVISION
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-992-92
STYLE OF CAUSE: ALMECON INDUSTRIES LIMITED v. ANCHORTEK
LTD. ET AL.
PLACE OF HEARING: CALGARY
DATE OF HEARING: SEPTEMBER 5, 6, 7, 10, 11 AND 12, 2001
REASONS FOR JUDGMENT : GIBSON, J.
DATED: DECEMBER 19, 2001
APPEARANCES:
RONALD DIMOCK
BRUCE STRATTON FOR THE PLAINTIFF
GLEN TREMBLAY
STEVEN GARLAND
JEREMY WANT FOR THE DEFENDANTS
SOLICITORS OF RECORD:
DIMOCK STRATTON CLARIZIO
TORONTO FOR THE PLAINTIFF
SMART & BIGGAR
OTTAWA FOR THE DEFENDANTS
[2] R.S.C. 1985, c. T-13.
[3] Anchortek's counterclaim further sought relief under the Competition Act, R.S.C. 1985, c. C-34. During the course of the trial such relief was abandoned. Transcript, Volume 11 (eleven), page 973.
[4] See: Transcript, Volume 1, pages 47-49.
[5] Exhibit J-2.
[6] Court Files T-607-96, T-608-96 and T-610-96. The actions against the co-defendants were
consolidated with the action against Anchortek, on consent, by an order of Associate Senior
Prothonotary Giles dated the 27th of April, 1998. That order reads in part as follows:
Pursuant to Rules 101-105 of the Federal Court Rules, 1998, Federal Court Action Nos. T-607-96, T-608-96 and T-610-96, as they relate to the claims of infringement of the Plaintiff's rights in Canadian Letters Patent No. 1,220,134 ("the Almecon Patent") by alleged activities of the Defendants in those actions in respect of use, distribution, offering for sale and sale in Canada of a seismic plug made by Anchortek Ltd., identified by the name Energy Plug (the "Anchortek Claims"), are consolidated into this Federal Court Action No. T-992-92...
[7] [1997] S.C.C.A. No. 374 (Q.L.).
[8] Exhibit D-16.
[9] Exhibit P-1
[10] As noted earlier in these reasons, Mr. Justice Wetston's Reasons for Decision
are reported at (1996), 65 C.P.R. (3d) 417.
[11] (1997), 209 N.R. 387.
[12] (1917), 35 D.L.R. 353 (Ex. Ct.).
[13] Supra, note 10.
[14] (1995), 61 C.P.R. (3d) 499 (F.C.A..).
[15] (1991), 35 C.P.R. (3d) 350.
[16] (1947), 12 C.P.R. 102 (Ex. Ct.); reversed (1949), 12 C.P.R. 182 (S.C.C.); affirmed (1952), 15 C.P.R.133 (P.C.).
[17] (1974), 17 C.P.R. (2d) 110 (F.C.A.).
[18] (1993), 47 C.P.R. (3d) 55 (F.C.T.D.); affirmed (1994), 55 C.P.R. (3d) 299 (F.C.A.).
[19] Exhibit D-13 pp. 238 - 243 and 249, lines 24 to 27, p.p. 250 and 251 and
lines 1 to 6 on p. 252.
[20] Transcript, Vol. 7, p. 684, lines 16-25.
[21] Transcript, Vol. 7, pp. 694 lines 6-12, 700, lines 9-12 and 701, lines 17-21.
[22] Almecon Patent, page 6, lines 5 and 6, emphasis added.
[23] Almecon Patent, page 7, lines 5 and 6.
[24] Almecon Patent, page 7, lines 24 and 25.
[25] [2000] 2 S.C.R. 1067.
[26] [1961] S.C.R. 117 at 122.
[27] Supra, note 10.
[28] (1978), 39 C.P.R. (2d) 191 (F.C.T.D.), (1979), 41 C.P.R. (2d) 94 (F.C.A.), [1981] 1 S.C.R. 504.
[29] Testimony of James Jackson in chief, transcript, Vol. 6, pp. 609 and 618-619; testimony of Paavo Luoma in-chief, transcript, Vol. 7, pp. 693-694.
[30] Exhibit D-14, documents referred to in the defendants' read-ins of Paavo Luoma, Tab 9.
[31] Exhibit P-45.
[32] (1995), 64 C.P.R. (3d) 10 (F.C.T.D.).
[33] Read-ins from the examination for Discovery of Paavo Luoma, July 8, 1998; written answer to
question at page 100, line 1; Exhibit D-13.
[34] Exhibit P-45.
[35] (1947), 12 C.P.R. 102 (Ex. Ct.); (1949), reversed,12 C.P.R. 182 (S.C.C.); affirmed (1952), 15 C.P.R. 133 at 143 - 148 (P.C.).
[36] (1991), 39 C.P.R. (3d) 176 (F.C.A.).
[37] (1981), 57 C.P.R. (2d) 29 at 44-5 (F.C.A.).
[38] Supra, note 10. .
[39] [2001] F.C.T. 889, Court File CF T-913-95, appeal filed, [2001] No. 1491.
[40] [2000] 2 S.C.R. 1024.
[41] Free World Trust, supra, note 40 at pages 1043-4.
[42] Exhibit P-5.
[43] Exhibit P-3.
[44] See Schedule 4 to these reasons.
[45] Exhibit P-12.
[46] Supra, note 2.
[47] See paragraphs 21 to 24 of the Agreed Statement of Facts quoted
earlier in these reasons.
[48] Exhibit D-16.
[49] [1966] S.C.R. 419.
[50] [1999] F.C.J. No. 1044 (Q.L.),(F.C.T.D.).
[51] Transcript, Volume 1, page 66, lines 17 to 25, page 67, lines 1 to 22
and page 68, line 6 to 9.
[52] 2nd ed., (Toronto: Butterworths, 1999).
[53] Transcript, Volume 1, page 99.
[54] Transcript, Volume 1, page 99, line 22 to 25 and page 100, line 1 to 4.
[55] Transcript, Volume 6, pages 564 and 565.
[56] Supra, note 17.
[57] Exhibit P-45.
[58] [1967] 1 O.R. 18 (Ont. C.A.).
[59] (1980), 48 C.P.R. (2d) 248 (F.C.T.D.).
[60] (1982), 29 C.P.C. 94 (B.C.S.C.).