A Change in Direction? The Federal Court of Appeal Affirms Granting of Summary Judgement In Patent Case

The Federal Court of Appeal affirmed the grant of partial summary judgment in a patent infringement action in a decision released February 15, 2000 in the matter of Trojan Technologies Inc. v. Calgon Carbon Canada Inc. (A-677-99). Summary judgment was granted by the Motions Court and affirmed by the Court of Appeal notwithstanding the fact that the validity of the patent was at issue. This is positive for patent holders because the Federal Court has typically been reluctant to grant summary judgment in patent cases and even more so in cases where the validity of the patent is in issue.

Trojan holds a Canadian patent for a system and method for the treatment of waste water using ultraviolet radiation in a gravity-fed fluid treatment system. Trojan manufactures its system in Canada for sale worldwide. Calgon manufactured and sold a waste water treatment system using ultraviolet radiation which Trojan alleges infringed its patent.

By motion, Trojan sought and won partial summary judgment against Calgon with respect to infringement of certain claims of Trojan's patent. Calgon had challenged the validity of those claims based on obviousness. The Motions Court found the claims, in respect of the radiation source module, valid and infringed and granted summary judgment to Trojan. Calgon appealed on both aspects of the judgment. The Federal Court of Appeal affirmed the Motions Court's grant of summary judgment with respect to infringement but allowed the appeal in respect of validity.

Calgon relied upon an apparent conflict in the evidence of its own witnesses on infringement as a basis for appeal. In response to this argument, the Court of Appeal stated "it ill-behooves an alleged infringer to argue, on the basis of contradictions in its own evidence, that summary judgment should not be granted." Calgon also argued, based on prior Federal Court decisions, that summary judgment was inappropriate where validity of the patent was in question and that summary judgment was inappropriate in patent cases, generally, unless the only issue was construction of the patent. Evidently, the Federal Court of Appeal did not agree.

The appellant also agued, before the Court of Appeal, that the Motions Court had erred in granting summary judgment on only part of Trojan's claim while referring the remainder of the claim to trial. The Court of Appeal did not comment specifically on this submission, but in affirming the finding of infringement and remitting the issue of validity to the Trial Division to be set down for trial, together with the other issues referred to trial by the Motions Judge, the Court agreed with Trojan that summary judgment on part of a claim is available in an appropriate case.

Another point of interest is that summary judgment was granted and affirmed on Trojan's radiation source module claims even though there was arguably a genuine issue for trial. While the Federal Court Rules contemplate summary judgment even where there is a genuine issue for trial (Rule 216(3)), the jurisprudence on this point is thin. In this case, the Court on the whole of the evidence was able to decide the issue of infringement and did so.

The Federal Court of Appeal appears to have applied a different test for appeal of a summary judgment motion than that applied by the Supreme Court of Canada in Guarantee Company of North America v. Gordon Capital Corp., [1999] S.C.J. No. 60. The Supreme Court, in considering an appeal of a summary judgment under Rule 20 of the Ontario Rules of Civil Procedure, held that the appropriate test to be applied is whether the applicant has shown that there is no genuine issue of material fact requiring trial. In contrast, the Federal Court of Appeal, in Trojan, considered whether the Motion Judge erred in granting summary judgment based on the material she had before her.

This decision may signal a change in the Federal Court's approach to summary judgment motions in patent cases. Prior to this decision, it was difficult for patent holders to obtain judgment in a summary fashion, particularly in cases where validity of the patent was at issue. Recent Federal Court decisions had severely limited the scope within which summary judgment would be granted in such cases. Indeed, in only two previous cases was summary judgment granted in patent matters, with the vast majority of such summary judgment applications being dismissed outright.

Specifically, in Pallmann Maschinenfabrik GmbH Co. K.G. v. CAE Machinery Ltd. et al. (1995), 62 C.P.R. (3d) 26 (F.C.T.D.) and Hayden Manufacturing Company Ltd. v. Canplas Industries Limited (1996), 68 C.P.R. (3d) 186 (F.C.T.D.), the Federal Court stated that summary judgment is not generally the proper means to obtain judgment where the infringement or invalidity of a patent is at issue. The Court further stated that where there is conflicting evidence with respect to the infringement or the construction of a patent, summary judgment should be refused and the matter should proceed to trial.

The statements made in Pallmann, Hayden and other patent cases placed significant hurdles before a patentee seeking summary judgment. The decision of the Federal Court of Appeal in Trojan may lower some of these hurdles, making it easier for patentees to obtain summary judgment in patent cases even where validity of the patent sued upon is placed in issue. It is now also clear that summary judgment on only some of the plaintiff's infringement allegations is appropriate even if the balance of the action is better referred to trial. This case is also an example of a patent matter where there were genuine issues for trial before the Motions Court, but the Court was able, on the whole of the evidence, to find the facts necessary to grant summary judgment on infringement. As a result, summary judgment motions may become a more effective means in patent cases to obtain early relief or to narrow issues before trial.

Trojan Technologies Inc. was represented in this case by the Gowlings team of Gary O'Neill, Omar Nassif, Shu-Tai Cheng, Chris Van Barr and Martha Savoy.