T-2116-80
Catalyst Research Corporation (Plaintiff)
v.
Medtronic, Inc., and Medtronic of Canada Ltd.
(Defendants)
Trial Division, Mahoney J.—Ottawa, January 8
and 21, 1981.
Practice Service — Application by defendant to set aside
service on it of statement of claim and ex parte order author
izing service ex juris — Whether, by joining in an application
for security for costs, applicant has waived its right to bring
motion — Whether applicant having approbated may now
reprobate.
Defendant Medtronic, Inc. applies for leave to file a condi
tional appearance and for an order setting aside the service of
the statement of claim on it and the ex parte order authorizing
service ex juris. The question is whether, by joining in an
application for security for costs, applicant has waived its right
to bring this motion. In other words, applicant has approbated
and now seeks to reprobate without having first reprobated.
Applicant argues that in any event, there is no good arguable
case of infringement by it of plaintiff's patents. The invention
relates to batteries which are components in pacemakers. The
batteries are sold by applicant to Medtronic of Canada Ltd.
which assembles the pacemakers.
Held, the application is dismissed. Having invoked this
Court's jurisdiction for its own benefit, the applicant cannot
now challenge that jurisdiction. Having approbated, it has
waived its right to reprobate. A court has to assume that
counsel is under no undisclosed disabilities either as to his
authority to represent a party or as to his knowledge of his
client's affairs in so far as they are material to his representa
tion of that client in the court. In any event, the transfer of
ownership, at Toronto International Airport, evidenced by the
billing invoice mailed by applicant to Medtronic of Canada
Ltd. is a sale by the applicant in Canada and an infringement
by it of the plaintiff's Canadian patents.
Antares Shipping Corp. v. The "Capricorn" [1977] 2
S.C.R. 422, distinguished. The Dunbar and Sullivan
Dredging Co. v. The "Milwaukee" (1907) 11 Ex.C.R. 179,
distinguished.
APPLICATION.
COUNSEL:
Ross G. Gray, Q.C. and Glen A. Bloom for
plaintiff.
George E. Fisk for defendants.
SOLICITORS:
Herridge, Tolmie, Ottawa, for plaintiff.
Cowling & Henderson, Ottawa, for defend
ants.
The following are the reasons for order ren
dered in English by
MAHONEY J.: The defendant, Medtronic, Inc.,
applies for leave to file a conditional appearance
for the purpose of objecting to service of the
statement of claim on it and an order setting aside
that service and the ex parte order, made May 13,
1980, authorizing service ex juris. The application
is made on the basis that the allegations in the
statement of claim, assuming them true and
proven, and the other material before the Court do
not disclose "a good arguable case" that the appli
cant has infringed the plaintiff's patents.' A pre
liminary question is whether, by joining in an
application for security for costs, Medtronic, Inc.
has waived its right to bring this present motion.
Counsel were unable to refer me to precedents
directly on the point and I have been unable to
locate any.
The factual situation in Antares Shipping Corp.
v. The "Capricorn" 2 was extremely complicated
and need not be considered in any detail. It was an
admiralty action; this action is based on the
alleged infringement of Canadian patents. Clearly,
there is no doubt that the forum conveniens for
this action is this Court. Bearing that very big
difference in mind, the following passage from the
judgment of Ritchie J., at page 450, gives some
guidance.
When all these circumstances are considered in conjunction
with Portland's active participation in the action, it appears to
me that it would take some cogent evidence of a more conven
ient alternative forum in order to justify the Federal Court in
refusing to exercise its discretion by ordering that the respond
ent Companies be served with notice of the Declaration outside
of Canada.
Composers Authors and Publishers Association of Canada
Ltd. v. International Good Music, Inc. [1963] S.C.R. 136.
2 [1977] 2 S.C.R. 422.
Portland's participation is discussed at page 454.
The crucial fact appears to have been that Port-
land had, even before the plaintiff had sought
leave to serve it ex juris, secured the release of the
Capricorn by appearing under protest and apply
ing to have the Court fix bail. The substitution of
the bond for the ship at Portland's instance
was a step in the cause, and thereby a waiver of the protest.
The words last quoted were taken directly from
the decision of the Exchequer Court in The
Dunbar and Sullivan Dredging Company v. The
"Milwaukee". 3
A distinction is that in the Capricorn and Mil-
waukee cases, the objecting party had first protest
ed the jurisdiction of the Court, then invoked that
jurisdiction for its benefit, i.e., obtaining the physi
cal possession of its ship, and then sought, but was
not permitted, to pursue its initial protest. In other
words, the unsuccessful party had reprobated, then
approbated and sought to reprobate again. Here
the applicant approbated and now seeks to repro
bate but did not reprobate in the first place. It
might be argued that the applicant's position is
weaker than that of the unwilling admiralty
defendants because it did not even put the Court
and plaintiff on notice, as they did, before
approbating.
It did not do so because its counsel did not, until
he had the opportunity to attend on his client in
Minneapolis, obtain the information about its
activities that led him to conclude that this
application should be brought. That reason, or
excuse, cannot be given effect to the applicant's
advantage. A court simply cannot function unless
it can assume that counsel is under no undisclosed
disabilities either as to his authority to represent a
party or as to his knowledge of his client's affairs
in so far as they are material to his representation
of that client in the court. The applicant cannot
now be heard to say that when its counsel applied
for, and obtained, the order directing the plaintiff
to provide for security for costs, he was not fully
apprised of all material facts.
3 (1907) 11 Ex.C.R. 179 at p. 202.
The applicant argues, and I agree, that any
defendant served has a legitimate interest in
obtaining an order for security for costs when sued
by a plaintiff resident outside the jurisdiction of
the court. That is so even when the defendant has
good cause to object to service of the statement of
claim because it would ordinarily expect to be
entitled to its costs if it succeeded in its objection
and, unless security had been given, the court
would be powerless to enforce its award. It
remains that, having invoked this Court's jurisdic
tion for its own benefit, the applicant cannot now
challenge that jurisdiction. Having approbated, it
has waived its right to reprobate.
Had I not come to that conclusion, I should still
have denied the application because the material
before me does disclose a good arguable case for
infringement of the plaintiff's Canadian patents by
the applicant. The invention relates to batteries
which are components in pacemakers. The pace
makers are assembled in Canada by the other
defendant, Medtronic of Canada Ltd., a wholly-
owned subsidiary of the applicant. They are
assembled from components which include
allegedly infringing batteries bought from the
applicant.
The invoice, entitled "Canada Customs
Invoice", which accompanies shipments stipulates
"F.O.B. Minneapolis". However, a billing invoice,
mailed by the applicant to Medtronic of Canada
Ltd. when the shipment is dispatched by air
express, stipulates:
The ownership of and the legal and beneficial title to, the risk
of loss, and the right to possession and control over, the goods
shall remain with Medtronic, Inc. until the shipment reaches
the port of entry in the country of destination or U.S. posses
sion and all documents related to the goods have been trans
ferred to purchaser, notwithstanding any other pricing or ship
ping terms. [The emphasis is mine.]
It is fairly arguable that the billing invoice
governs the transaction and, if so, that a transfer
of ownership at the customs shed, Toronto Inter
national Airport, is a sale by the applicant in
Canada and an infringement by it of the plaintiff's
Canadian patents. Having arrived at that conclu-
sion, I do not find it necessary to deal with the
plaintiffs argument that the material before me
discloses an allegation of infringement by the
applicant inducing Medtronic of Canada Ltd. to
infringe; that it discloses an agreement or concert
ed action by them to infringe, nor with the
implications of the participation of the applicant's
personnel in promotional activities in Canada.
ORDER
The application is dismissed with costs.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.