Canada: Re-Examination Process Stayed Pending Resolution Of Patent Infringement Action (Intellectual Property Weekly Abstracts - Week of June 26, 2017)

PATENT DECISIONS

Re-examination process stayed pending resolution of patent infringement action

Camso Inc. v. Soucy International Inc., 2016 FC 1116

In this motion, Camso requested a stay of a request made by a law firm, Brouillette + Partners, to the Commissioner of Patents to re-examine one of Camso's patents, Canadian Patent 2,822,562 (the '562 Patent). The request claimed lack of novelty and obviousness of the '562 Patent.

Another patent, Canadian Patent  2,388,294 (the '294 Patent), owned by Camso and relating to the same technology, namely, tracks used on all-terrain vehicles, had been the subject of a request for re-examination previously. The Court noted that Camso did not respond to this request and a number of claims were cancelled following the re-examination of the '294 Patent. The day after the decision of the re-examination board in November 2014, Camso commenced a patent infringement action against the defendants, Soucy. During the course of the action, the Statement of Claim was amended to allege infringement of the '562 Patent.

After the claim was amended, Brouillette + Partners filed a request for re-examination of the '562 Patent. Camso responded to this re-examination. Thus, as noted by the Court, the infringement action and the re-examination process were ongoing at the same time.  Further, counsel for Soucy, the defendant in the action, appeared on the motion to stay the request for re-examination.

The parties debated whether the applicable test for determining the motion was that as set out in RJR-Macdonald Inc v Canada (AG), [1994] 1 SCR 311 or that set out in White v EBF Manufacturing Ltd., 2001 FCT 713. After reviewing the case law, the Court held "there could be no controversy with regard to the test to be applied in our case: those cited converge."

In conducting its analysis on the merits, the Court noted the similarities between the allegations raised in the re-examination process and the infringement action, namely, lack of novelty and obviousness. The Court held that it was in the interest of justice to allow the proceeding in the Federal Court to proceed on the basis that it would allow more substantial evidence to be considered as compared to the re-examination process. The Court also considered arguments relating to the harm to Brouillette + Partners if the re-examination was stayed, and to Camso if it were not stayed. The Court concluded that the interest of justice favours ordering the stay of the re-examination process.

Costs in the amount of $3000 were to be paid immediately to Camso.

Court grants new counsels' eyes only order where previous order interfered significantly with the solicitor-client relationship

Bard Peripheral Vascular Inc. v. W.L. Gore & Associates, Inc., 2017 FC 585

The Court granted an appeal of the Prothonotary's Order, allowing Bard's motion to amend provisions in an existing protective order to the designation of "Counsels' Eyes Only" ("Amended CEO Order").

In the underlying proceeding, Bard alleged that Gore has infringed the '519 Patent, entitled Prosthetic Vascular Graft; Gore counterclaimed that the '519 Patent is invalid. The inventor of the '519 Patent, Dr. Goldfarb, has previously testified before the Federal Court in a related Canadian litigation matter pertaining to the '519 Patent, and before courts in the United States in related litigation matters.

Gore brought a motion before the District Court to examine Dr. Goldfarb on the basis of Letters Rogatory issued from this Court in this action. The District Court issued a subpoena, which was successfully quashed on appeal on the basis that Dr. Goldfarb was medically unfit to be examined. The Medical Records and the Subpoena Order were designated as CEO by the District Court.

The Amended CEO Order at issue prevented Gore's trial counsel from showing the U.S. order quashing a subpoena, and Dr. David Goldfarb's medical information, to Gore's in-house counsel and outside experts. The Court agreed that the Prothonotary erred in fact and law in holding that the Amended CEO Order would not prejudice Gore. Gore stated that it plans to use the Medical Records to challenge the admissibility of the hearsay evidence of Dr. Goldfarb, after outside counsel is able to receive necessary and proper instructions from their in-house counsel. This is precluded by the amended Order.  The Court concluded that the Amended CEO Order was inappropriate because of its significant interference with the solicitor-client relationship and granted a new CEO Order, which allows Gore's in-house counsel access to the Subpoena Order and the Medical Records.

TRADEMARK DECISIONS

Trademark infringement and passing off found in respect of 9 marks — permanent injunction granted

Diageo Canada Inc. v. Heaven Hill Distilleries, Inc., 2017 FC 571

In this case, Diageo brought suit against Heaven Hill, alleging passing off and infringement of Diageo's trademarks associated with its CAPTAIN MORGAN rum products by Heaven Hill's ADMIRAL NELSON'S rum products.

Heaven Hill argued that Diageo's case was an abuse of process. However, the Court held that the evidence relied upon by Heaven Hill shows no collateral, extraneous, ulterior, improper or illicit purpose.  Furthermore, there was no other evidence before the Court to show that the action is anything other than one to enforce trademark rights.

Heaven Hill also argued latches and acquiescence as there was evidence of Diageo's knowledge of ADMIRAL NELSON'S products in Canada as early as 2009, and it ought to have known of the products as early as 2003, yet it waited over a decade to take action.  Heaven Hill argued that Diageo permitted the ADMIRAL NELSON brand to establish itself in the market, and as such, if successful, an injunction should not be the remedy.  Diageo argued that it was not aware of the brand until 2013, and took immediate action.  After weighing the evidence, the Court held that Diageo was not aware of the ADMIRAL NELSON'S brand prior to 2013, and was not estopped in the action by reason of acquiescence, latches or delay.  As a result of the date finding, the Court also held that Diageo's claims were not statute-barred.

The Court held that the allegation that some of Diageo's registrations were abandoned should also fail.  Heaven Hill raised the point at trial, that despite admissions in its pleadings and in the agreed statement of facts, it did not sell ADMIRAL NELSON'S rum in Canada.  The Court considered the evidence, and held that not to be the case.

In considering the allegations of passing off, the Court held that Diageo had established goodwill.  The Court found no evidence of intentional misrepresentation on the part of Heaven Hill.  However, the Court did find misrepresentation due to confusion, on the basis of survey evidence submitted by Diageo.  Thus, the Court held that Diageo established, on a balance of probabilities, that Heaven Hill contravened subsection 7(b) of the Act.  However, there was no evidence that the ADMIRAL NELSON products were substituted for CAPTAIN MORGAN products.  Thus the allegations under subsection 7(c) were dismissed.  The Court also held that the requisite damages for a passing off claim were present.

The Court then considered the trademark infringement allegations.  After considering each of the elements of the test for trademark infringement, the Court held that Heaven Hill's use of its character or label trademarks in association with ADMIRAL NELSON'S rum products infringes Diageo's exclusive rights in 9 registered trademarks.  Furthermore, this use was held to likely have the effect of depreciating the value of the goodwill attached to Diageo's trademarks.  Diageo was granted, inter alia, declarations of infringement of 9 trademarks, a permanent injunction, and delivery up of all ADMIRAL NELSON'S bottles in Canada.  Diageo was further granted damages and its costs.

Heaven Hill's counterclaim, including for an injunction restraining Diageo from making false and misleading statements about its products and business, was dismissed.

Adequate alternative remedies do not include different proceedings pursuant to different statutory provisions

McDowell v. Automatic Princess Holdings, LLC, 2017 FCA 126

The Federal Court of Appeal has clarified the law relating to what constitutes an adequate alternate remedy in the context of interlocutory decisions in trademark opposition proceedings.

This is an appeal from a decision of the Federal Court (2015 FC 980), that dismissed an application for judicial review of a decision of the Trade-marks Opposition Board (TMOB) to refuse to allow McDowell to amend her statement of opposition to the respondent's trademark application.  The Federal Court had found that McDowell had an adequate remedy available, such as an expungement proceeding.

The Court of Appeal reviewed the jurisprudence and discussed how a prior decision of the Federal Court, Indigo Books & Music Inc. v. C. & J. Clark International Ltd., 2010 FC 859, held that an adequate alternate remedy could be one that exists outside of the framework of the opposition proceedings.  This decision was expressly overturned, finding that: 

[R]ecourse to the courts before the remedies provided in the administrative process have been exhausted is not justified. There is no ambiguity on this point. The fact that a different proceeding, pursuant to a different statutory provision, might produce the same result does not engage the doctrine of adequate alternate remedy. The objective is to avoid fragmenting administrative processes that already provide for a form of review. It is not to force litigants into different proceedings to obtain redress.

On this basis, the Court reviewed the TMOB's decision to refuse to allow McDowell to amend her statement of opposition.  That decision was not found to be reasonable.  While the amendment was sought late in the proceeding, the Court held that this is only a factor to be considered and where any prejudice caused by the delay can be remedied by allowing the other party additional time, it ought not to be a determinative factor.

The matter was returned to the TMOB with a direction that McDowell's application to amend her statement of opposition is to be allowed on such terms as are necessary to do justice between the parties.

No error was made in finding the trade name TIME DEVELOPMENT GROUP confusing with the registered mark TIMES GROUP CORPORATION

Time Development Group Inc. v. Times Group Corporation, 2017 FCA 125

The appellant Time Development Group Inc. was unsuccessful in its bid to overturn a prior decision finding its tradename, TIME DEVELOPMENT GROUP had infringed a registered trademark TIMES GROUP CORPORATION (2016 FC 1075, our summary here).  The appellants had been enjoined from using its tradenames or any confusingly similar variants.

The Court of Appeal first considered whether the registered mark had been used by anyone other than the owner, such that it was not distinctive.  The Federal Court had made a factual finding that the mark was not used by anyone other than the registered owner, and this finding was not overturned on appeal.  A second argument regarding the coexistence and use of similar tradenames and trademarks was also unsuccessful in showing a lack of distinctiveness.

As to confusion, the Court of Appeal was also not swayed that a palpable and overriding error was made.  The Federal Court found that there is a very strong resemblance between the registered trademark TIMES GROUP CORPORATION and the tradename TIME DEVELOPMENT GROUP.  This included the fact that the mark and name are used in similar businesses and in the same vicinity.  Namely, all of the parties are involved in real estate development and management, and their businesses are focused on the Chinese Canadian community in the Greater Toronto Area.

The Federal Court further noted a striking resemblance when the names are written in Chinese, because the singular and plural of TIME are the same.

After holding that there were no errors made with respect to the confusion analysis, the appeal was dismissed with costs.

SUPREME COURT UPDATE

AstraZeneca Canada Inc., AstraZeneca Aktiebolag, AstraZeneca UK Limited v. Apotex Inc., Apotex Pharmachem Inc. (Federal Court of Appeal) (Civil) (By leave) (Court Docket #36654)

The Supreme Court announced that judgment in the AstraZeneca's appeal will be delivered on Friday, June 30, 2017.

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