Date: 19990621
Docket: T-319-98
BETWEEN:
VOLKSWAGEN CANADA INC.
Plaintiff/Defendant by Counterclaim
(Respondent)
- and -
ACCESS INTERNATIONAL AUTOMOTIVE LTD.
Defendant/Plaintiff by Counterclaim
(Applicant)
- and -
VOLKSWAGEN AG, VOLKSWAGEN MEXICO SA and AUDI AG
Third Parties
REASONS FOR ORDER
GIBSON, J.:
[1] By amended notice of motion filed the 7th of June, 1999, the Defendant, among other reliefs, seeks an Order allowing an appeal from the Order of Associate Senior Prothonotary Giles, dated the 19th of April, 1999, that allowed the plaintiff's motion to strike out certain paragraphs in the Defendant's statement of defence and counterclaim.
[2] The motion came on for hearing before me at Calgary, Alberta on the 14th of June, 1999. At the date of the hearing before me, a notice of status review, filed the 27th of May, 1999, remained outstanding and unresponded to. On reviewing the filed material, I was satisfied that no party to these proceedings had unduly delayed in the conduct of the proceedings. I advised counsel that my Order arising out of the hearing would provide that this action should not be dismissed for delay but rather should continue without designation of a case management judge. My Order will so provide.
[3] In brief reasons in support of his Order, Associate Senior Prothonotary Giles wrote:
| By a motion before me the plaintiff sought to strike all references to section 32 of the Competition Act and the practices mentioned therein on the grounds that such practices can only be prosecuted on an information exhibited by the Attorney General as is set forth in the statute itself. |
[4] In striking such references, the learned Senior Prothonotary relied upon Eli Lily and Co. et al v. Marzone Chemicals Ltd.1.
[5] Against the standard for disturbing discretionary orders of prothonotaries on appeal reflected in Canada v. Aqua-Gem Investments Ltd.2, I will dismiss this appeal.
[6] In Visx Inc. v. Nidek Co.3 Mr. Justice Rothstein, revisited the Eli Lily decision. He wrote at p. 53:
| The Defendants rely on Eli Lily and Co. v. Marzone Chemicals Ltd... in which Addy J. stated: |
| 2. A more cogent reason, however, is that the Plaintiffs are seeking equitable relief and must come into the Court with their hands clean. Should they in fact be in breach of the Combines Investigation Act , as alleged in Para. 9 of the statement of defence, this would constitute a most valid reason for refusing injunctive relief although the allegations might well not constitute a defence to a claim in law. |
| However, the dicta of Addy, J. in Eli Lily has been refined by Proctor & Gamble Co. v. Kimberley-Clark of Canada Ltd. (1990), 29 C.P.R. (3d) 545 at p. 546, ..., in which Hugessen, J. A. stated: |
| We are all of the view that the motions judge erred in law since these allegations [breaches of the Competition Act] can simply have no bearing on the defence to the plaintiffs' action for patent infringement. The motions judge indicated... that, because para. 16 speaks to plaintiffs' entitlement to equitable remedies, the amendment would be relevant to the court's "discretion to grant or refuse such relief having regard to all of the surrounding circumstances including the past conduct of the Plaintiffs". This is error. For past conduct to be relevant to a refusal of equitable relief under the "clean hands" doctrine, relief to which the party would otherwise be entitled, such conduct must relate to the subject-matter of the plaintiffs' claim, in this case their patent... |
| It is apparent that it is not any alleged inappropriate conduct of a party that may be relevant in the consideration of whether or not to grant equitable relief. The inappropriate conduct must relate directly to the subject-matter of the Plaintiff's claim. |
In the case at bar, it may be that the plaintiff should not collect royalties in the way it is alleged it does. Or it may be that its conduct is contrary to certain provisions of the Competition Act. However, even if the plaintiff is acting inappropriately, such actions do not relate directly to the plaintiff's patent or whether the defendants are infringing that patent. There is no suggestion that the patent is invalid or otherwise cannot form the basis of a patent infringement action; nor is it suggested that these allegations, in some way, indicate there is no patent infringement. It has not been demonstrated that such conduct is directly related to the plaintiff's claim. [some citations omitted]
[7] Exactly the same might be said here. While this is not an action where patent infringement is alleged, it is an action where copyright infringement is at the heart of the plaintiff's claim. Conduct contrary to certain provisions of the Competition Act does not relate directly to the plaintiff's copyright or whether the defendant is infringing that copyright. The pleadings with respect to the Competition Act reflects no suggestion that the plaintiff's copyright is invalid or otherwise cannot form the basis of a copyright infringement action; nor is it suggested that these allegations, in some way, indicate that there is no copyright infringement. It has not been demonstrated that the alleged conduct of the plaintiff in contravention of the Competition Act is directly related to the plaintiff"s claim.
[8] Visx, having been affirmed in the Court of Appeal is binding on me, as it was on the learned Associate Senior Prothonotary.
[9] The defendant's appeal from the decision of the Associate Senior Prothonotary will be dismissed.
[10] Counsel appearing before me were in agreement that the hearing in respect of all other reliefs sought by the defendant in its Notice of Motion should be adjourned to the next regular motions day of this Court at Calgary. My Order will so provide.
[11] The plaintiff having been successful on the motion before me is entitled to its costs of the hearing, in the cause.
JUDGE
Ottawa, Ontario
June 21, 1999
__________________1 (1976), 29 C.P.R. (2d) 253 (F.C.T.D.).
2 [1993] 2 F.C. 425 at 454 and 463 (C.A.).
3 (1995), 58 C.P.R. (3d) 51 (F.C.T.D.), affirmed on appeal; (1996), 72 C.P.R. (3d) 19 (F.C.A.).