T-1344-97
Vancouver, British Columbia, Wednesday, the 25th day of June, 1997
Present: Mr. John A. Hargrave, Prothonotary
Between:
CANADA SCAFFOLD SUPPLY CO. LTD.,
Plaintiff,
- and -
HY-RISE SCAFFOLDING LTD.,
Defendant.
REASONS FOR ORDER
JOHN A. HARGRAVE
PROTHONOTARY
The Plaintiff's motion, pursuant to Federal Court Rule 324 and ex parte, is to set security for costs under section 60(3)of the Patent Act R.S.C. 1985, Chapter P4, as amended. At issue is the Defendant's patent for what is referred to as a fly-form table. The device is better explained as a flat table-like form on which to pour a concrete floor. The form is set in place on a building floor so that the concrete slab floor to form the next storey of a building may be poured on top of the table-like form. Once the concrete has set, the fly-form table is lowered on its integrated jacking legs and removed, by crane, to the top of the overhead slab and set up again as a form for pouring the next floor slab.
The Plaintiff submits the appropriate security would be $3,000, relying on an unreported decision in Action T-2729-90, of 10 December, 1990, in Power-Up Canada Limited v. Bishop. In the Power-Up case Mr. Justice Cullen set security at $5,000. The plaintiff here, in written submissions, submits that the Power-Up case involved a complex impeachment proceeding, which may be contrasted with the Plaintiff's action which is not for impeachment of a patent, but rather for a declaration that its fly-form table, which it rents out, does not infringe on the Defendant's patent, for a declaration that the Defendant patent owner has been unjustly enriched as the Plaintiff claims to have spent money developing the device, and for damages in the amount of $150,000 for unjust enrichment.
I am not convinced that an action for a section 60(2) declaration of non infringement and for damages will be substantially less costly and time consuming than an action for impeachment, but given that it is clearly established that the Defendant may apply, if necessary, to have the amount increased, I will for the purpose of this application accept the distinction between the cost of the two types of proceedings. However more important is the nature and purpose of the security. Once that is understood, the fixing of a reasonable sum for security for costs becomes a more rational process.
In Electec Ltd. v. Comstock Canada (1989) 26 F.T.R. 154 Mr. Justice Strayer, as he then was, rejected the conventional wisdom that the reason for the Patent Act provision, which is now section 60(3), as to "security for costs" was to deter frivolous proceedings, by pointing out that it is in fact an order for security whereby the defendant patent holder is to be protected as to its costs:
| The obvious conclusion to be drawn is that indeed the defendant patentee is to be protected for his costs to the extent that this is normally done when "security for costs" are awarded by a court. (Page 157). |
It follows that the amount should not be set arbitrarily, but should reflect the various factors taken into account when setting security for costs in other contexts, "including the actual costs of the action" (ibid page 158). Mr. Justice Strayer concluded that the proper security for costs ought, in 1989, to be many times the earlier statutory amount of $1,000 set by 1900 legislation: he ordered an increase from $1,000 to $9,000.
One must take into account that in 1989, when Mr. Justice Strayer set security for costs at $9,000 in the Electec case and in 1990 when Mr. Justice Cullen set security for costs at $5,000 in the Power-Up Case, costs were governed by the former Tariff B. The present Tariff B, which came into effect in 1995, substantially increases taxable party and party costs. As security for costs under section 60(3) of the Patent Act must be set so as to take into account various factors, including actual taxable costs, figures for costs set in 1989 and 1990 cases have no direct bearing.
As I say, I accept for the purposes of present application that this action may not be as complex as an impeachment proceeding. I also note that the Defendant may apply at a later date to increase the amount of the security. Keeping in mind the Court's present scale of taxable costs and the inflationary increase in disbursements since the Electec and Power-Up decisions, the initial
security for costs will be $5,000, with leave to the Defendant to apply, if and when necessary, for an increase in that amount.
(Sgd.) "John A. Hargrave"
Prothonotary
June 25, 1997
Vancouver, British Columbia
NAMES OF COUNSEL AND SOLICITORS OF RECORD
STYLE OF CAUSE: CANADA SCAFFOLD SUPPLY CO. LTD.
- and -
HY-RISE SCAFFOLDING LTD.
COURT NO.: T-1344-97
MOTION DEALT WITH IN WRITING WITHOUT APPEARANCE OF COUNSEL
REASONS FOR ORDER OF JOHN A. HARGRAVE
dated June 25, 1997
WRITTEN REPRESENTATIONS BY:
Mr. David J. McGruder for Plaintiff
SOLICITORS OF RECORD:
Oyen Wiggs Green & Mutala for Plaintiff
| Vancouver, BC |