Date: 19990303
Docket: A-125-98
(T-2413-95)
CORAM: DÉCARY J.A.
LINDEN J.A.
ROBERTSON J.A.
BETWEEN:
FLEXI-COIL LTD.
Appellant
- and -
BOURGAULT INDUSTRIES LTD.
Respondent
Heard at Saskatoon (Saskatchewan) on Monday, February 15, 1999.
Judgment delivered at Ottawa (Ontario) on March 3, 1999.
REASONS FOR JUDGMENT BY: DÉCARY J.A.
CONCURRED IN BY: ROBERTSON J.A.
LINDEN J.A.
Date: 19990303
Docket: A-125-98
(T-2413-95)
CORAM: DÉCARY J.A.
LINDEN J.A.
ROBERTSON J.A.
BETWEEN:
FLEXI-COIL LTD.
Appellant
- and -
BOURGAULT INDUSTRIES LTD.
Respondent
REASONS FOR JUDGMENT
DÉCARY J.A.
[1] This appeal is from the decision of Mr. Justice Campbell of the Trial Division of this Court1 declaring Canadian Patent 1,227,863 ("Patent "863") valid. The trial judge went on to find that the appellant ("Flexi-Coil") was infringing Patent "863, granted an injunction restraining Flexi-Coil from infringing Patent "863 and from constructing, using or selling packers which infringe any claims of Patent "863 and awarded damages, or alternatively accounting of profits at the respondent's ("Bourgault") election.
[2] The invention at issue relates to an agricultural implement of the type commonly described as a "packer". A packer is utilized by farmers to compact soil over which the packers roll during seed bed preparation or as otherwise required. Claim 1 of the Patent, whose paragraphs e), f) and h) are the only ones at issue in the appeal, reads as follows:2
| 1. A packer adapted for towing across the ground behind a power source or in tandem behind another wheeled implement such an air seeder, comprising: |
| a) a middle frame section; |
| b) hitch means affixed to said packer for attachment to said vehicle; |
| c) a plurality of ground-engaging wheels rotatably affixed to said middle frame section; |
| d) two wing frame sections pivotally attached to said middle frame section and extending laterally therefrom and capable of pivoting downwards when in the working position to remain a predetermined height over uneven ground; |
| e) at least one ground-engaging roller pivotally attached to said middle frame section about a first axis substantially parallel to the ground and perpendicular to the forward direction of the travel of said packer and about a second axis perpendicular to said first axis such that the roller follows the contour of the ground and whereby said roller when encountering objects such as rocks will pivot upwardly and obliquely thereby avoiding damage to the roller or frame sections; |
| f) at least one ground-engaging roller pivotally attached to each of said wing frame sections about a first axis substantially parallel to the ground and perpendicular to the forward direction of travel of said packer about a second axis perpendicular to said first axis; |
| g) said ground-engaging rollers being staggered in overlapping relationship wherein said middle frame section and said wing sections comprise forward members and rearward members both on which are mounted rollers thereby completely packing the land within a bout; |
| h) a ground-engaging wheel rotatably affixed to each of said wing frame sections; |
| i) means for pivotally lifting said middle frame section from a working position in which said roller attached to said middle frame section is in contact with the ground to a transport position in which said roller is out of contact with the ground; |
| j) means for pivotally lifting said wing frame sections from a working position in which said rollers and wheels attached thereto are in contact with the ground to a transport position in which said rollers and wheels are set out of contact with the ground; |
| k) said wing frames being substantially vertically oriented when in the transport position such that it is not necessary to move the packer implement rearwardly in order to move the implement from the transport to the operating position or vice versa. |
[3] A chronology of events is needed here, the utility of which will be seen further on in these reasons.
[4] Bourgault filed its patent application on September 1, 1989. Patent "863 was issued on December 18, 1990 and is entitled "Wing Packer". Bourgault alleges that Flexi-Coil infringes claim 1 of Patent "863 by the manufacture and sale of the 35-62 foot version of implements known as the Flexi-Coil System 75 ("the Flexi-Coil 75"). Flexi-Coil had started developing its Flexi-Coil 75 in May of 1988 and had started selling it in February of 1989, i.e. before Patent "863 was issued.
[5] Bourgault forwarded a cease and desist letter to Flexi-Coil dated February 13, 1991, in which it gave Flexi-Coil two weeks to give written assurances that it would immediately cease manufacturing, distributing and selling the Flexi-Coil 75. Flexi-Coil did not reply to the letter and continued to manufacture and sell the Flexi-Coil 75. Bourgault was aware that Flexi-Coil continued manufacturing and selling the Flexi-Coil 75 packers, but waited until November 14, 1995 to commence its action in infringement against Flexi-Coil. Since February of 1991, Flexi-Coil has been offering an optional packer pressure spring assembly for attachment to its Flexi-Coil 75. Should the patent be found valid, Flexi-Coil alleges that it is not infringed by the manufacture and sale of Flexi-Coil 75 when sold with the spring pressure option.
[6] At the hearing of the appeal, Flexi-Coil narrowed its attack on the impugned decision to the following grounds, some of which, obviously, are alternate grounds:
| 1. With respect to the construction of the patent: the trial judge erred a) in not construing the patent prior to examining the issues of validity and infringement; b) in construing the patent as if parts e) and f) of claim 1 were restricted to only two axes; and c) in failing to determine what constitutes "ground-engaging wheels" in part h) of claim 1. |
| 2. With respect to the validity of the patent: the trial judge erred in not finding the patent invalid because of a) obviousness and b) lack of candour. (Counsel for the appellant abandoned at the hearing his arguments based on anticipation). |
| 3. With respect to infringement: the trial judge erred in finding that the Flexi-Coil 75 had "ground-engaging wheels" on its wings when the machine was equipped with the spring pressure option. |
| 4. With respect to remedies: the trial judge erred a) in failing to limit the remedies afforded to Bourgault by reason of the delay occurring prior to the commencement of proceedings and b) in failing to limit any inquiry as to damages in respect of a "one pass" system to Northwestern Saskatchewan. |
[7] Counsel for Flexi-Coil has expressly indicated to the Court that he does not challenge the findings of fact made by the trial judge except as where otherwise mentioned further in these reasons.
[8] It is common ground that the provisions of the Patent Act3 ("the Act") which are applicable are those in force in 1989 and that the applicable Patent Rules are those found in C.R.C. 1978, c. 1250. Throughout these reasons I shall use the word "specification" to describe, as mandated by section 34 (now 27) of the Patent Act, both the descriptive portion of the patent application and the claim portion of the application; the word "disclosure" to refer to the descriptive portion of the patent application4; and the word "claim" to refer to the claim portion of the patent application. I note that the word "disclosure", which was used in the former Patent Rules5 to refer to the "part of the specification other than the claims", was replaced in the new Patent Rules6 by the word "description".
Ground No. 1: Construction of the patent
[9] I must dispose, first, of an argument raised by the appellant with respect to the appropriateness of referring to extrinsic evidence when construing a patent.
[10] Patent "863 contains, in the disclosure, the following paragraph:
| In one embodiment (not illustrated) a three-axis pivot is provided, the third axis being perpendicular to both the first and second axes [...] |
The trial judge was "not prepared to give any weight to that part of the specification"7 because there was some documentary evidence produced at trial to the effect that Bourgault had instructed its patent agent to delete all references to the third axis in the patent application and that the patent agent had failed to do so. According to the judge, that evidence raised "a suspicion as to why the specification appears as it does"8.
[11] The trial judge was clearly in error in dismissing that paragraph for the reasons he gave. The disclosure must be taken at its face value. Whether or not the inventor intended to have it as written or otherwise is irrelevant for the purpose of construing the patent. The "documentary evidence" referred to by the trial judge was adduced at the request of the appellant in support of its lack of candour argument. It was not, and it could not have been, adduced as an aid in construing the patent. The trial judge could not, therefore, ignore that paragraph on the basis that it might not properly have been included in the disclosure. He could, however, not give it any weight to the extent that a proper construction of the patent led him to the conclusion that, in context, it was not relevant or helpful.
| a) Whether the trial judge erred in not construing the patent prior to examining the issues of validity and infringement. |
[12] It is trite law that prior to considering the issues of validity and infringement of a patent, a trial judge must determine the appropriate construction and scope of the claims of the patent9. In the case at bar, the trial judge properly stated the law but nevertheless went directly to the issues of validity and infringement without first quoting, let alone construing the claims at issue. He did, eventually, manage to quote and construe the relevant parts of the claims that were at issue, but the appellant maintains it was too little and too late and calls for a new trial.
[13] I cannot accept the appellant's submission. The failure by a trial judge to follow the proper analytical approach raises a prima facia concern, but it is not necessarily in and of itself fatal to the decision10. It is true that the trial judge proceeded in an unorthodox manner, nevertheless I am satisfied that on the whole of his reasons, which are extensive (79 pages), he did devote his attention to the construction of the patent according to the legal principles and that he did end up construing it, in part explicitly, in part implicitly. With respect to that part which he did construe explicitly, the duty of this Court is to ensure that the trial judge's construction, despite being interwoven with considerations of invalidity and infringement, is the correct one upon an independent examination of the disputed claim. With respect to that part which he has construed implicitly, this Court is in as good a position as he was to construe it. It would be a waste of judicial resources to send the matter back for retrial.
b) Two axis vs three axis pivot
[14] The main issue with respect to construction, is whether parts e) and f) of claim 1 are limited to rollers which have only a first and a second axis, but not a third. The trial judge found that the patent described a two axis pivot and that claim 1 was limited to a two axis pivot. Flexi-Coil asserts that nowhere in the patent is there a restriction to only two axes and that on the contrary the disclosure makes it absolutely clear that a third axis is also part of the invention and is, in fact, one of the preferred embodiments as stated at page 8, line 8 of the patent11:
| In one embodiment (not illustrated) a three-axis pivot is provided, the third axis being perpendicular to both the first and second axes. In this embodiment, the roller support member 80 has a limited degree of rotation, e.g. 15 about the third axis, which reduces skidding of the outermost rollers when the packer is towed through a sharp turn. |
[15] Despite counsel's attempt to persuade the Court that the trial judge has otherwise erred in construing parts e) and f) of claim 1, it is manifest that his argument as to the construction of these parts solely rests on the alleged failure of the trial judge to give any weight to that passage.
[16] As noted earlier, the trial judge could simply not ignore the passage at issue for the reason he gave, i.e. that the passage made its way into the disclosure because of an error of Bourgault's patent agent. The trial judge, however, could very well have found that the reference in the disclosure to a third axis had no impact on the true construction of the claim and it is up to this Court to determine whether he could have made that finding.
[17] It is well settled that recourse to the disclosure is: (1) permissible to assist in understanding the terms used in the claim; (2) unnecessary where the words in the claim are plain and unambiguous; and (3) improper to vary the scope or ambit of the claim12. However, as noted by Stone J.A. in TWR Inc. v. Walbar of Canada Inc.13, "this does not mean [...] that claims are never to be construed in the light of the rest of the specification. It means that such resort is limited to assisting in comprehending the meaning in which words or expressions contained in the claims are used". In Nekoosa Packaging Corp. v. AMCA International Ltd.14, Robertson J.A, quoted with approval from Hayhurst who had cautioned that "Terms must be read in context and it is therefore unsafe in many instances to conclude that a term is plain and unambiguous without a careful review of the specification ...".
[18] The terms in parts e) and f) of claim 1 are clear in that they refer to a first axis and a second axis, and not to a third axis. They could, however, be said to be ambiguous to the extent that they do not expressly exclude a third axis. It is therefore safer, in my view, before reaching a conclusion, to examine the rest of the specification, not for the purpose of changing the subject-matter of the claim or to make the words of the claim say things which they do not say, but for the purpose of comprehending the very meaning of the claim.
[19] Were it not for the passage relied upon by the appellant, the disclosure would undoubtedly confirm that the invention relates to a machine which uses only two axes. Whether one looks at the "Summary of the Invention" or at the "Detailed Description of the Preferred Embodiments", one finds that an essential aspect of the invention is the presence of a first axis and of a second axis, and of no other.
[20] The sole question that remains, therefore, is whether the reference in the disclosure to a third axis in one, not illustrated embodiment is enough to read the claim as encompassing a third axis. The answer, clearly, is no. The reference to the third axis is unexplained and is at odds with the rest of the specification. The claim itself is restricted to two axes and one simply cannot use a passage in the disclosure to expand the scope of the claim to three axes and then have it invalidated on the ground of anticipation or obviousness. The court must not be "too astute or technical" and it must approach the patent "with a judicial anxiety to support a really useful invention"15. The words of Lord Halsbury in Tubes, Ld. v. Perfecta Seamless Steel Tube Company, Ld.16, which were approved by Chief Justice Duff in Western Electric Co. v. Baldwin International Radio of Canada17 and by Dickson J. in Consolboard Inc.18 are particularly useful here:
| [...] to look [...] at the whole of the instrument to see what it means " not to take one isolated passage out of it and make that inconsistent with the general invention, but to see substantially what the inventor really means [...] |
[21] I therefore conclude that the trial judge properly construed parts e) and f) of claim 1 as being restricted to two axes, even though the reason he gave for ignoring the passage in the disclosure which referred to a third axis was not the proper one.
c) " ground-engaging wheels"
[22] The trial judge made no explicit finding as to the construction of the words "ground-engaging wheels" in part h) of claim 1. The appellant, in its memorandum of fact and law, argued, on the basis of terms found in the disclosure, that this claim speaks of wheels which have a support function. Counsel, at the hearing, focused his attack, rather, on the word "engaging" to suggest that this claim speaks of wheels which do not merely touch, or come in contact with the ground.
[23] Counsel's suggestion flies at the face of the terms used in the claims. Claim 1 uses the expression "ground-engaging wheel" in part h) and "said wheels" in part j) in the same way as it uses the expression "ground-engaging roller" in parts e) and f), "said ground-engaging rollers" in part g), "said roller" in part i) and "said rollers" in part j). The same expression "ground-engaging" is therefore used, even though the function is obviously different, whether the claim speaks of the wheels or of the rollers. The same expression is also used whether the wheel or the roller "is in contact with the ground" or "out of contact with the ground" (in parts i) and j). Clearly, therefore, the expression "ground-engaging" has no specific technical meaning in the patent that we were made aware of and is used whether or not the wheels and the rollers are in contact with the ground and whether or not the wheels have a support function. I have found nothing in the disclosure that could alter the non-technical meaning of the expression.
Ground No. 2: Validity of the patent
a) Obviousness
[24] Counsel for Flexi-Coil essentially rested his argument with respect to obviousness on the two axis pivot issue. He argued that either the introduction of the two axis pivot over the three axis pivot already known and used was obvious, or, if it was not obvious, it was not what was taught by the patent. My earlier finding that claim 1 contemplated only the two axis pivot disposes of the latter argument.
[25] As to whether the introduction of the two axis pivot was obvious, I cannot but defer to the finding of the trial judge on that point. Counsel argues that the trial judge did not review the fact that according to the evidence the two axis pivot was used in prior art, namely in the Mounted Packer manufactured by Flexi-Coil19. Contrary to what counsel says, the trial judge did refer to the Mounted Packer and to the testimony of Mr. Friggstad in regard to the Mounted Packer20, but he observed that Mr. Friggstad himself, in later products, had abandoned the two axis pivot and chose instead the three axis pivot when using the packer in combination with an air seeder21. If the two axis pivot had been obvious earlier, the trial judge could well wonder why it was not used by the same manufacturer when needed in combination with an air seeder.
| b) Lack of candour |
[26] Flexi-Coil alleges that the patent is invalid by reason of lack of candour for failure of Bourgault or its agent to provide relevant prior art to the Canadian Patent Office during the processing of the application for the patent. Specifically, Flexi-Coil asserts that Bourgault failed to inform the Patent Office of the Friggstad HPL machine which, according to the trial judge, had "significant importance in the argument on validity of the patent"22.
[27] As noted by the trial judge, this "lack of candour" attack on the patent is really a combination of two separate arguments: the patent is invalid because Bourgault wilfully misled the Patent Office within the meaning of subsection 53(1) of the Act; and, regardless of subsection 53(1), the patent is invalid because Bourgault was under a duty to provide relevant prior art to the Patent Office and failed to meet this duty.
[28] The trial judge dismissed the subsection 53(1) argument as he found "absolutely no evidence of an intention to mislead by anyone in this case"23. That finding is unassailable.
[29] With respect to the alleged duty of general disclosure of prior art, the trial judge properly found that the disclosure required under Patent Rule 21 and Form 24 does not extend to a description of prior art. Furthermore, and contrary to what the trial judge found, no request for prior art in a foreign country was made by the examiner under Patent Rule 40.
[30] At the hearing, counsel for Flexi-Coil relied heavily on the most recent decision of the Supreme Court of Canada in Cadbury Schweppes Inc. v. FBI Foods Ltd24 to suggest a higher duty of disclosure than that already required by law or by the jurisprudence. He referred in particular to the following passage from Mr. Justice Binnie's reasons, at paragraph 46:
| I do not think that the respondents' reliance on intellectual property law is of much assistance here. It ignores "the bargain" that lies at the heart of patent protection. A patent is a statutory monopoly which is given in exchange for a full and complete disclosure by the patentee of his or her invention. The disclosure is the essence of the bargain between the patentee, who obtains a 17-year monopoly on exploiting the invention, and the public, which obtains open access to all of the information necessary to practise the invention. Accordingly, at least one of the policy objectives underlying the statutory remedies available to a patent owner is to make disclosure more attractive, and thus hasten the availability of useful knowledge in the public sphere in the public interest [...] |
[31] Counsel reads more into this passage than is permissible. The issue before the Court related to breach of confidence and trade secrets. The "full and complete disclosure by the patentee of his or her invention" to which Binnie J. refers can only be, in my view, that which the statute, the rules and the jurisprudence25 already require. Furthermore, even if the duty of disclosure had been extended as suggested by counsel, the impact of the extension would be felt not at the level of the validity of the patent but at the level of the remedies where equitable considerations might come into play.
Ground No. 3: Infringement
[32] Flexi-Coil argues that if the patent is valid, its models of Flexi-Coil 75 which incorporate the optional pressure spring assembly do not infringe claim 1 because the wheels cannot then be said to be "ground-engaging wheels" within the meaning of paragraph h) of claim 1 since they have no support function and are but intermittently in contact with the ground.
[33] The trial judge found there was infringement. In his view of the evidence, including video tape evidence, even if the optional springs were adjusted to transfer the weight of the frame to the coil packers, there was "intermittent contact between the wheels and ground" and "the wheels provide at least some support for the implement"26.
[34] The trial judge was therefore implicitly in agreement with the interpretation proposed by Flexi-Coil (and which I have earlier in these reasons discarded) and even then he found on the evidence that there was infringement. Assuming his interpretation to be the correct one, I see no reason to disturb the conclusion he reached.
[35] Whatever the interpretation retained, Flexi-Coil would still succumb: as was held by the English Court of Appeal in British United Shoe Machinery Co., Ld. v. Gimson Shoe Machinery Co., Ld.27, the fact that a machine can be "used in some way which does not bring the automatic mechanism into operation" is irrelevant on the question of infringement. We are dealing here with a machine claim, not a method claim, and the alleged infringement is with respect to the manufacture and sale of the machine, not its use. As manufactured and sold the Flexi-Coil 75 infringes claim 1 and the mere fact that a pressure spring option kit is available to any buyer of the machine so that springs can be adjusted by the user at the latter's convenience28, does not allow the manufacturer or seller to escape the charge of infringement.
Ground No. 4: Remedies
| a) Delay incurred prior to the commencement of the proceedings |
[36] Flexi-Coil asserts that in the circumstances it would have been reasonable for the trial judge to limit the damages to 30 days after the date the Statement of Claim was served. As the argument goes, Bourgault should have issued its Statement of Claim shortly after having forwarded its cease and desist letter on February 13, 1991 rather than wait until November 14, 1995. According to counsel, the trial judge erred in allegedly blaming Flexi-Coil for having proceeded with the development and manufacture of its Flexi-Coil 75 prior to the issuance of the Patent on December 18, 1990 and this Court should exercise de novo the discretion the trial judge allegedly exercised on a wrong principle.
[37] While there is one sentence in the trial judge's reasons that opens the door to the argument raised by counsel, I am satisfied when reading the whole of the part of the reasons devoted to this issue that the trial judge, when he found that Flexi-Coil "understood the liability"29 that attaches to the production of an infringing device, was referring essentially to that period that occurred after the forwarding of the cease and desist letter. There is no basis, even in the light of the recent decision of the Supreme Court of Canada in Cadbury Schweppes Inc.30 for interfering with the exercise by the trial judge of his discretion on this issue.
| b) Damages to be restricted to Northwestern Saskatchewan |
[38] The trial judge granted Bourgault damages for lost sales of "one-pass seeding systems" (defined by Bourgault as a system wherein a packer is pulled in tandem with an air seeder comprising a cultivator or similar tillage implement and an air seeder cart) provided that Bourgault "prove, on a case by case basis, that it suffered damages because a given purchaser of a Flexi-Coil "one pass system" would have purchased a Bourgault "one pass system", but for the Flexi-Coil 75 being offered for sale"31.
[39] Counsel for Flexi-Coil argued that the extent to which Bourgault can pursue a claim for damages should be restricted to such sales as may arise only in Northwestern Saskatchewan, because Bourgault's expert on damages could only speak with respect to what was happening in Northwestern Saskatchewan. Counsel could rely on no authority for such an astounding proposition and for all practical purposes abandoned the argument after a short exchange with the Court.
[40] For all these reasons I have reached the conclusion that the appeal should be dismissed with costs.
"Robert Décary"
J.A.
"I agree
Allen M. Linden J.A."
"I agree:
J.T. Robertson J.A."
__________________
1 Reported as Bourgault Industries Ltd. v. Flexi-Coil Ltd. (1998), 80 C.P.R. (3d) 1 (F.C.T.D.).
2 A.B., vol. 3, tab 1 at 373-74.
3 R.S.C. 1985, c. P-4, as amended.
4 See Consolboard Inc. v. MacMillan Bloedel (Saskatchewan) Limited, [1981] 1 S.C.R. 504 at 520, Dickson J.
5 C.R.C. 1978, c. 1250.
6 SOR/96-423.
7 Supra, note 1, para. 48 at 27.
8 Ibid.
9 See Unilever PLC v. Procter & Gamble Inc. (1995), 61 C.P.R. (3d) 499 at 506 (F.C.A.); Dableh v. Ontario Hydro [1996] 3 F.C. 751 at 774 (F.C.A.).
10 See Atlas Copco Aktiebolag v. CIL Inc., (1992) 41 C.P.R. (3d) 348 at 351-52 (F.C.A.); Dableh, supra, note 9 at 775.
11 A.B., vol. 3, tab 1 at 370.
12 See Beecham Canada Ltd. et al. v. Procter-Gamble Co. (1982), 61 C.P.R. (2d) 1 at 11 (F.C.A.), Urie J.A.; Dableh, supra, note 9 at 776.
13 (1991), 39 C.P.R. (3d) 176 at 188.
14 (1994), 56 C.P.R. (3d) 470 at 482 (F.C.A.).
15 Consolboard Inc. supra, note 4 at 520, 521, Dickson J.
16 (1902), 20 R.P.C. 77 at 96.
17 [1934] S.C.R. 570 at 572.
18 Supra, note 4 at 524.
19 Exhibit F, A.B., vol. 6, tab 5 at 1311.
20 Supra, note 1, para. 70 at 32.
21 Supra, note 1, para. 71 at 32.
22 Supra, note 1, para. 10 at 12.
23 Supra, note 1, para. 82 at 35.
24 S.C.C. No. 25778, January 28, 1999, [1999] S.C.J. No. 6.
25 Notably Consolboard Inc., supra, note 4.
26 Supra, note 1, para. 152 at 52.
27 (1928), 45 R.P.C. 290 at 301, 304, 308 (C.A.).
28 A.B., vol. 3, tab 11 at 523.
29 Supra, note 1, para. 105 at 42.
30 Supra, note 24.
31 Supra, note 1, para. 187 at 60.