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AUTOMATED TANK MANUFACTURING INC.
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REASONS FOR ORDER
[1] This is a motion by the defendant, Automated Tank Manufacturing Inc., appealing the order of the prothonotary dated February 7, 2011, which allowed the amendment of the statement of claim.
[2] The motion is for an order:
1. Reversing the Amendment Order in part and directing that paragraphs 9, 10, 11, 12, 13 and 15 of the Thrice Amended Statement of Claim be struck, without leave to amend.
2. Dismissing the Plaintiff’s action.
3. Extending the time for the filing of the statement of defence, if required, to a date that is at least 30 days from the date of the determination of this motion.
4. Awarding costs of this motion, the motion below and the action to the Defendant.
5. Such further and other order as this Honourable Court may deem just.
Background
[3] The statement of claim issued on August 4, 2010 alleges infringement of Canadian Patent 2,479,412 (the ‘412 Patent).
[4] The statement of claim was amended on August 11, 2010.
[5] In September 2010, the plaintiff amended the amended statement of claim by removing his claim for punitive and exemplary damages.
[6] The defendant made a motion to strike the amended amended statement of claim and on November 26, 2010, the prothonotary struck the paragraphs of the amended amended statement of claim dealing with the plaintiff’s interests in the ‘412 Patent and the defendant’s infringement.
[7] The prothonotary also ordered that if the defendant did not consent to the plaintiff filing a further amended statement of claim, the plaintiff was granted leave to apply to amend the amended amended statement of claim.
[8] The plaintiff made the motion to amend the statement of claim and on February 7, 2011, the prothonotary allowed the amendments and the thrice amended statement of claim (TASOC) is attached to these reasons as Schedule “A”.
Issues
[9] The issues as stated by the defendant are:
1. What is the correct standard of review?
2. Does the purported description of patent infringement in the TASOC contain the requisite material facts and/or is it impermissibly speculative?
3. In the alternative, does paragraph 10 of the TASOC contain sufficient material facts to constitute a reasonable cause of action for infringement of Claim 2 of the ‘412 Patent?
4. In the alternative, should paragraph 12 of the TASOC be struck as immaterial and embarrassing?
5. In the alternative, should the open ended allegations of other patent infringement in paragraphs 10 and 13 of the TASOC be struck?
Analysis and Decision
[10] Issue 1
What is the correct standard of review?
As stated by Madam Justice Sandra Simpson in Harrison v Sterling Lumber Co 2008 FC 220, [2008] FCJ No 270, at paragraph 7:
The law is clear that, if the questions raised on a motion before a prothonotary are vital to the final issue in a case, the decision on those questions should be reviewed on a de novo basis (see Merck & Co. Inc. v. Apotex Inc., [2003] F.C.J. No. 1925, 2003 FCA 488 at paras. 18-19).
[11] In the present case, the issue deals with the striking of the operative parts of the statement of claim. In my view, this is a matter that is vital to the final issue in the case and consequently, I must deal with the matter on a de novo basis.
[12] Issue 2
Does the purported description of patent infringement in the TASOC contain the requisite material facts and/or is it impermissibly speculative?
This issue simply deals with whether the plaintiff has pleaded the material facts of the alleged infringement of the defendant. The defendant submits that the plaintiff has merely stated the words of the claim to show the alleged infringement.
[13] The two key paragraphs of the TASOC that are in issue are paragraphs 9 and 10 which read:
9. The Defendant has since a date that is unknown to the Plaintiff but that is as [sic] least as early as October, 2008 at Kitscoty, Alberta, utilized equipment and manufactured, constructed, made and repaired oilfield storage tanks in manner that utilizes a method:
providing a vertical shaft extending below ground at a permanent fabrication facility;
suspending an elevator platform in the shaft by cables, the elevator platform being raised and lowered in the shaft by winches which control a length of the cables to lower the elevator platform and raise the elevator platform in the shaft;
providing at least one above ground work station at the upper end of the shaft;
placing a work piece on a motor driven rotating turntable on the elevator platform;
activating the motor driven rotating turntable to rotate the turntable as required during fabrication to permit workers access to an entire circumference of the work piece without moving from the at least one above ground work station;
lowering the elevator platform as each stage of the work piece is completed in order to maintain a desired working height for workers at the at least one above ground work station; and
raising the elevator platform and removing the work piece from the elevator platform when fabrication is complete.
10. The Defendant has, since a date that is unknown to the Plaintiff but that is as [sic] least as early as September 12, 2007, constructed or used a fabrication station for a tall multi-stage work piece including the manufacture, construction, making and repair of oilfield storage tanks, at 4601-49 Avenue, Kitscoty, Alberta or other locations unknown to the Plaintiff that includes:
a vertical shaft extending below ground;
an elevator platform suspended by cables in the shaft, winches being provided to control a length of the cables to lower the elevator platform and list [sic] the elevator platform in the shaft;
[14] In Dow Chemical Co v Kayson Plastics & Chemicals Ltd (1996), 47 CPR 1, [1967] 1 Ex Cr 71, Mr. Justice Jackett said the following, about pleadings in patent infringement cases, at page 11:
In general, under our system of pleading, a Statement of Claim for an infringement of a right should clearly show
(a) facts by virtue of which the law recognizes a defined right as belonging to the plaintiff, and
(b) facts that constitute an encroachment by the defendant on that defined right of the plaintiff.
[15] The same direction is stated in Rule 174 of the Federal Courts Rules SOR/98-106 which reads:
Every pleading shall contain a concise statement of the material facts on which the party relies, but shall not include evidence by which those facts are to be proved.
[16] The prothonotary recognized this principle in the preamble to his November 26, 2010 order in which he struck portions of the statement of claim. He stated at page 3:
A plaintiff must describe with particularity the right to which he claims to be entitled and which he alleges has been infringed by the defendant. This is particularly important in patent infringement actions, which are generally complex and technical in nature. The allegations proposed by the Plaintiff relating to infringement by the Defendant simply refer back to the claims in the patent at issue. Such general allegations are insufficient and cannot be allowed.
As was stated by Mr. Justice Jackett in Precision Metalsmiths Inc. v. Cercast Inc. (1966), 49 C.P.R. 234 (Ex. Ct.) at page 242-243: “It is not a compliance with the requirement that the material facts be alleged merely to state the conclusions that the Court will be asked to draw…” The Defendant is entitled to know with precision what exactly it has done that is alleged to have infringed the rights of the Plaintiff. Being substantially in agreement with the written submissions filed on behalf of the Defendant, I conclude that the essential elements of a cause of action for patent infringement have not been pleaded at paragraphs 2, 6 and 7 of the Amended Amended Statement of Claim.
[17] I have reviewed the amendments proposed by the plaintiff and I am of the view that paragraphs 9 and 10 with the proposed amendments are in essence a restatement of the claims of the ‘412 Patent. This, according to the jurisprudence cited above, is not a proper pleading of infringement. It is plain and obvious that the pleadings are deficient. They do not plead the facts upon which a claim for infringement can be based.
[18] As a result, the prothonotary should not have allowed the proposed amendments and erred in so doing. The pleadings relating to the alleged infringement by the defendant do not make it plain and obvious that a proper cause of action is disclosed. Consequently, the amendment order of the prothonotary is reversed in part and paragraphs 9, 10, 11, 12, 13 and 15 of the TASOC are struck without leave to amend.
[19] The plaintiff’s action is dismissed with costs to the defendant.
[20] The defendant shall have its costs of this motion, the action and the costs of the motion below as set by the prothonotary.
SOLICITORS OF RECORD
DOCKET: T-1269-10
STYLE OF CAUSE: LARRY BERTELSEN
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AUTOMATED TANK MANUFACTURING INC.
PLACE OF HEARING: Vancouver, British Columbia
DATE OF HEARING: March 21, 2011
APPEARANCES:
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J. Kevin Wright |
FOR THE DEFENDANT
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SOLICITORS OF RECORD:
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Edmonton, Alberta
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Davis LLP Vancouver, British Columbia |
FOR THE DEFENDANT
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