Ottawa, Ontario, March 14, 2007
PRESENT: Madam Prothonotary Mireille Tabib
BETWEEN:
INDUSTRIES INC.
Plaintiff
Defendant
REASONS FOR ORDER AND ORDER
[1] The Defendant makes a motion seeking an order striking out certain paragraphs of the Plaintiff’s amended statement of claim, and in the alternative, further particulars in respect thereof, an order requiring the Plaintiff to comply with Rule 182(b), and other ancillary relief.
Motion to strike
[2] This motion arises in the context of an action for patent infringement. The Plaintiff recently amended its pleadings to add a claim for punitive damages, on the basis of the Defendant’s allegedly wilful infringement of the patent, combined with the fact that the Defendant allegedly used, for the purpose of infringing the patent, proprietary information that the Plaintiff had communicated to it in confidence. It is this new claim for punitive damages and the new allegations of fact on which it is based that the Defendant seeks to strike.
[3] The Defendant argues that this Court has no jurisdiction to determine any claim based on the agreements pursuant to which the information was disclosed (a Collaboration Agreement and a Non-Disclosure Agreement between the parties), since they contain clauses giving exclusive jurisdiction to the Courts of Quebec over any “action, suit or proceedings arising out of, or connected with” the agreements. If the Defendant is correct and the Plaintiff is precluded from relying on a breach of the agreements in this Court, then the claim for punitive damages rests solely on a claim of wilful infringement; it is common ground between the parties that wilful infringement alone cannot give rise to punitive damages, so that the claim would be bound to fail.
[4] Counsel for the Defendant conceded at the hearing that, absent the exclusive jurisdiction clauses of the agreements, the decision in Areva NP GmbH v. Atomic Energy of Canada Limited, 2006 FC 952, would be applicable for the proposition that even if the subject matter of the contracts were beyond the Court’s jurisdiction, it would be arguable that the Defendant’s behaviour in relation to these contracts may justify punitive or exemplary damages as a remedy arising out of the alleged infringement. Thus, it is neither plain nor obvious that this Court does not have jurisdiction ratione materiae to hear the claim for punitive damages, if same is founded on allegations that the infringement, in the context of these agreements, justifies punitive damages.
[5] Exclusive jurisdiction clauses can no more remove from the Court a jurisdiction it otherwise possesses than they can confer upon it a jurisdiction it does not otherwise have. Exclusive jurisdiction clauses are bargains between the parties that are typically enforced, not by orders striking pleadings, but by orders staying proceedings in favour of the forum designated by the agreement. The Defendant has not sought a stay of the proceedings herein. Accordingly, at best, the existence of the exclusive jurisdiction clauses in the agreements might form the basis of an argument that the Plaintiff should be estopped from indirectly attempting to obtain a determination as to a breach of these agreements in a Court other than the designated forum, or that in doing so, it is committing an abuse of process.
[6] I am aware of no authority to the effect that instituting proceedings before a Court of arguably competent jurisdiction in defiance of a contractual exclusive jurisdiction clause constitutes an abuse of process justifying the striking of pleadings. Indeed, the well-developed jurisprudence relating to stays of proceedings to give effect to such agreements tends to preclude such a conclusion.
[7] As for the estoppel argument, it is a defence grounded in equity, not in law. If it is not pleaded or raised by the Defendant, it cannot be raised by the Court of its own motion, and therefore does not stand as an obstacle, in law, to the Plaintiff’s claim. In this regard, it is very much similar to a defence of limitation, which it has been held cannot properly be pleaded as the basis of a preliminary motion to strike. The Federal Court of Appeal has held, in Kibale v. Canada, (1990) 123 N.R. 153, that:
“…a statute of limitations under the common law does not terminate the cause of action, but only gives the defendant a procedural means of defence that he may choose not to employ and must, should he choose to employ it, plead in his defence (see Rule 409). In other words, a plaintiff is not, in writing his declaration, obligated to allege all the facts demonstrating that his action was brought in due time. A plaintiff is not obligated to foresee all the arguments the adverse party might bring against him. He can wait until the defence is filed and, should the defendant argue that the action is late, plead in reply any facts disclosing, in his opinion, that it is not late. It follows that, as Collier J. held in Hanna et al. v. The Queen (1986), 9 F.T.R. 124, a defendant must plead a statute of limitations in his defence; he cannot do so in a motion to strike out under Rule 419 because, for the reasons I have set out, an action cannot be said to be late on the sole ground that the statement does not demonstrate it is not late.”
[8] The same can be said of the defence of estoppel in this matter: The Plaintiff cannot be said to be estopped from pleading a breach of a contract which it agreed to submit exclusively to the Courts of Quebec on the sole ground that the statement of claim does not demonstrate why estoppel should not apply.
[9] Thus, I am not satisfied that the impugned paragraphs ought to be struck pursuant to Rule 221.
Particulars
[10] In response to the Defendant’s first informal request for particulars, the Plaintiff provided a copy of all of its responses to request for proposals, as demanded. It also produced a copy of a series of documents containing allegedly confidential information disclosed in the course of collaboration between IWG and Bombardier. The answer to this request for production does not indicate that these are only some of a larger body of documentation. I take the answer to be a comprehensive statement of the communications made, in documentary form, of allegedly confidential information. The Plaintiff’s objection to providing “details of other communications”, in this context, is to be taken to refer to communications other than in documentary form. No further documentary production is therefore required.
[11] The Defendant’s argument that the Plaintiff is bound to identify, in the documents produced, the specific information it claims to be confidential in light of the publication of the patent application is premised upon the Defendant’s own interpretation of the terms of the Non-Disclosure Agreement, to the effect that publicly available information cannot be protected by the terms of the agreement. The Plaintiff’s response indicates that the Plaintiff takes a position to the contrary. Particulars are meant to enlighten the Defendant as to the case it has to meet. To that extent, the Defendant now knows the factual case it has to meet and is perfectly able to plead its own interpretation of the facts and contractual provisions. It cannot, through a motion for particulars, straightjacket the Plaintiff into framing the facts to conform to the Defendant’s theory of the case.
[12] As to particulars of how the Defendant specifically made use of the information in allegedly infringing the patent, I am not satisfied that it is information which the Defendant needs in order to respond intelligently to the statement of claim. The Defendant has the complete record of the documents said to contain the information in question, clear allegations of how it allegedly infringed the patent, and the allegation that the information in question made the Defendant “aware of the advantages and feasibility of circulating potable water systems for Bombardier Aircraft”, enabling or giving it an advantage in carrying out the allegedly infringing acts. The Defendant should be perfectly able to plead intelligently to that allegation.
[13] The sole allegation for which particulars are to be provided is the use, in paragraph 26 of the amended statement of claim, of the word “included”, to qualify the ordinary standards of reasonable business practices from which the Defendant allegedly departed. The use of this word implies that the Defendant might have departed from other or further standards of reasonable business practice than those specifically mentioned. If so, the Defendant is entitled to know what they are. If not, the Plaintiff must provide that clarification.
Rule 182(b) of the Federal Courts Rules
[14] Rule 182(b) is clear and unambiguous. It requires a Plaintiff claiming monetary relief to specify whether the amount claimed, exclusive of interest and costs, exceeds $50,000. Although Rule 182(b) may well have been inserted in the Rules to facilitate the interpretation and application of the rules applicable to simplified actions, (which could not in any event apply to this action as it seeks injunctive and declaratory relief), it remains an obligatory prescription for a statement of claim. The consequence of a Plaintiff’s failure to comply with the requirement to indicate whether the monetary relief claimed exceeds $50,000 is that it shall be deemed not to exceed that amount (Polchies v. Canada (2003), 238 F.T.R. 254, 2003 FC 961). Accordingly, unless the Plaintiff, within 14 days, serves and files a re-amended statement of claim complying with Rule 182(b), the monetary relief claimed shall be deemed not to exceed $50,000, exclusive of interest and costs.
Confidentiality
[15] As mentioned at the hearing, the evidence filed by the Defendant only establishes that the Agreements sought to be filed confidentially were intended to be and have always been treated by the Defendant in a confidential manner. It does not establish whether commercial or competitive prejudice might be suffered by the Defendant should these Agreements be placed on the public record, and if so, whether the importance of the interest to be protected outweighs the public interest in open and accessible Court proceedings. This is especially important here as the Agreements have been produced as answers to particulars, and are therefore deemed to be part of the pleadings, have been referred to and cited extensively in public motion records, and might very possibly be directly relied upon in the Defendant’s statement of defence. That part of the Defendant’s motion is therefore adjourned to allow the Defendant to serve and file additional evidence in support of that relief. Pending determination, the documents shall continue to be treated confidentially.
Extension of time to file a defence
[16] The Plaintiff will have to file a re-amended statement of claim, if only to comply with Rule 182(b), and will have to provide particulars as to whether the word “included”, in paragraph 26, refers to other manners of departing from reasonable business practices, and if so, which ones. Although the rules relating to pleadings and particulars do not mandate that particulars should be incorporated in amended pleadings, it seems to me that as particulars are deemed to form a part of the pleadings, and as further amendments and particulars must in any event be made and given, the pleadings would be much clearer and easier to follow were the Plaintiff to incorporate the particulars already provided and to be provided in a re-amended statement of claim. The Plaintiff will have 14 days within which to do so. As the amendments will be more formalistic than substantive, the Defendant should not need more than 21 days from service of the amended pleading to serve and file its statement of defence.
Case management
[17] As discussed with and consented to by the parties at the hearing, the action will be designated as a specially managed proceeding.
ORDER
THIS COURT ORDERS that:
1. This action shall continue as a specially managed proceeding.
2. The Plaintiff shall, no later than 14 days from the date of this order, serve and file a re-amended statement of claim which shall:
(a) comply with Rule 182(b), failing which the monetary relief claimed shall be deemed not to exceed $50,000 exclusive of interest and costs;
(b) incorporate all particulars already provided informally by the Plaintiff to the Defendant; and
(c) contain particulars as to whether the word “included”, in paragraph 26 of the amended statement of claim, refers to other ordinary standards of reasonable business practice than those specifically set out in that paragraph, and if so, identifying same.
3. The Defendant shall, no later than 21 days following service of the Plaintiff’s amended pleading, serve and file its statement of defence.
4. That part of the Defendant’s motion seeking a confidentiality order is adjourned, to allow the Defendant to serve and file, no later than 21 days from the date of this order, further evidence in support thereof. The Plaintiff may file additional evidence or representations of its own within 5 days of service of the Defendant’s evidence; pending determination, the materials submitted for filing as confidential shall continue to be treated confidentially.
5. The parties shall, no later than 20 days following the date of an order designating a case management Judge or Prothonotary, serve and file, either jointly or separately, written submissions as to the further steps to be taken in this proceeding, together with a draft order setting out a detailed proposed schedule therefor.
6. Costs of the Defendant’s motion in the cause.
“Mireille Tabib”
FEDERAL COURT
NAME OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-1064-06
STYLE OF CAUSE: International Water-Guard Industries Inc. v. Bombardier Inc.
PLACE OF HEARING: Ottawa, Ontario
DATE OF HEARING: March 8, 2007
REASONS FOR ORDER: MADAM PROTHONOTARY MIREILLE TABIB
APPEARANCES:
|
Ms. Chantal Saunders
|
|
|
Mr. Marcus Klee
|
SOLICITORS OF RECORD:
|
Gowling Lafleur Henderson LLP Barristers & Solicitors Ottawa, Ontario
|
|
|
Osler, Hoskin & Harcourt LLP Barristers & Solicitors Ottawa, Ontario
|