T-3221-81
Flexi-Coil Ltd. (Plaintiff)
v.
Smith-Roles Ltd., also carrying on business under
the firm names and styles of Milro-Lyn Company
and Blanchard and Clemence Roles (Defendants)
Trial Division, Mahoney J.—Toronto, November
9; Ottawa, November 13, 1981.
Patents — Infringement — Plaintiffs action based on s. 7(e)
of the Trade Marks Act — Plaintiff alleges defendants copied
its invention before the patent issued, knowing that it had been
applied for — Defendants seek motions to extend time for
filing the defence, to strike out paragraphs of the statement of
claim on the ground that s. 7(e) is ultra vires, to strike out the
statement of claim, or any part thereof under Rule 419, or to
require particulars on the ground that Rule 415 has not been
complied with — Motions denied save for extension — Trade
Marks Act, R.S.C. 1970, c. T-10, s. 7(e) — Federal Court
Rules 332, 415, 419.
MacDonald v. Vapor Canada Ltd. [1977] 2 S.C.R. 134,
referred to. R. v. A. & A. Jewellers Ltd. [1978] 1 F.C.
479, referred to. Weider v. Beco Industries Ltd. [1976] 2
F.C. 739, distinguished. Balinte v. DeCloet Bros. Ltd.
(1979) 40 C.P.R. (2d) 157, aff d. [1980] 2 F.C. 384,
applied.
MOTIONS.
COUNSEL:
G. Clarke and B. Edmonds for plaintiff.
J. G. Potvin for defendants.
SOLICITORS:
McCarthy & McCarthy, Toronto, for plain
tiff.
Scott & Aylen, Ottawa, for defendants.
The following are the reasons for order ren
dered in English by
MAHONEY J.: This is an action for patent
infringement. The statement of claim, by para
graphs 10 to 15 inclusive, asserts a right of action
under paragraph 7(e) of the Trade Marks Act'
against both the corporate defendant, Smith-Roles
Ltd., and its alleged directing mind, the individual
defendant, Clemence Roles. The essence of those
allegations is that the defendants deliberately
copied the invention before the patent issued,
knowing that it had been applied for and that they
have behaved in like manner in respect of other
inventions.
The action was commenced on June 15, 1981.
On July 15, a vacation appearance was filed on
behalf of the defendants. On October 14, the
plaintiff moved for default judgment and, on Octo-
ber 19, with the consent of the parties, Mr. Justice
Cattanach ordered that the defendants file and
serve their statements of defence on or before
November 4. The defendants did not comply with
that order but did, instead, on November 4, make
a telephone request for the particulars hereinafter
referred to, in an apparent effort to comply with
Rule 415(5); forward a draft statement of defence
by courier from Ottawa to the plaintiff's counsel in
Toronto that dealt only with the patent infringe
ment alleged and filed notice of the present
motions seeking (1) an extension of time for filing
the defence; (2) to strike out paragraphs 10 to 15
of the statement of claim on the ground that
paragraph 7(e) of the Trade Marks Act has been
held by the Supreme Court of Canada to be ultra
vires the legislative competence of Parliament; (3)
to strike out those paragraphs under Rule
419(1)(b), (c) and (d) or, alternatively, to require
the provision of specified particulars relative there
to and, finally, (4) to strike out the entire state
ment of claim pursuant to Rule 419(1)(a), or, in
the alternative, to require provision of the same
particulars.
As to paragraph 7(e) of the Trade Marks Act,
the Supreme Court held: 2
Neither s. 7 as a whole, nor section 7(e), if either stood alone
and in association only with s. 53, would be valid federal
legislation in relation to the regulation of trade and commerce
or in relation to any other head of federal legislative authority.
' R.S.C. 1970, c. T-10.
7. No person shall
(e) do any other act or adopt any other business practice
contrary to honest industrial or commercial usage in
Canada.
2 MacDonald v. Vapor Canada Limited [1977] 2 S.C.R. 134
at p. 172.
There would, in such a situation, be a clear invasion of provin
cial legislative power. Section 7 is, however, nourished for
federal legislative purposes in so far as it may be said to round
out regulatory schemes prescribed by Parliament in the exercise
of its legislative power in relation to patents, copyrights, trade
marks and trade names. The subparagraphs of s. 7, if limited in
this way, would be sustainable, and, certainly, if s. 7(e) whose
validity is alone in question here, could be so limited, I would
be prepared to uphold it to that extent.
In Weider v. Beco Industries Ltd., 3 I struck out
portions of a statement of claim in a patent
infringement action which asserted a cause of
action under paragraph 7(e) against the alleged
infringer and its directing minds. The facts upon
which that cause of action was based had all arisen
after the issue of the patent in suit. No appeal was
taken from my order. In Balinte v. DeCloet Bros.
Ltd., 4 Mr. Justice Dubé refused to strike out por
tions of a statement of claim asserting a cause of
action under paragraph 7(e) based on the defend
ants' actions prior to the issue of the patent in suit.
That refusal was upheld by the Federal Court of
Appeal.' The situation alleged in this instance is
comparable to that alleged in the latter case. The
application to strike on the ground that paragraph
7(e) is ultra vires is dismissed. The plaintiff ought
not summarily be precluded from arguing that
paragraph 7(e) is intra vires as rounding out the
scheme of the Patent Act in the circumstances.
There is no merit whatever in the motions to
strike out the statement of claim, or any part
thereof, pursuant to Rule 419. As to the alterna
tive requests for orders directing the plaintiff to
provide further particulars of the allegations in
paragraphs 10 to 15 for their failure to comply
with various provisions of Rule 415, I must say
that, prima facie, the paragraphs are not deficient
in their compliance with the Rule. The affidavit in
support of this motion was sworn by David A.
Aylen, a barrister and solicitor, associated in prac
tice with the defendants' counsel, J. Guy Potvin.
Paragraphs 10 and 11 allege that the particulars
are properly needed.
3 [1976] 2 F.C. 739.
4 (1979) 40 C.P.R. (2d) 157.
5 [1980] 2 F.C. 384.
10. In Paragraphs 10 to 15 of the Statement of Claim, the
Plaintiff refers to and makes allegations pertaining to deliber
ate, reckless, wilful conduct of the Defendants and further
pertaining to allegedly illegal conduct by some of the Defend
ants with knowledge of its illegality. I am informed by J. Guy
Potvin and do verily believe that as a result of a telephone
conversation he had with the said Clemence Roles, one of the
Defendants herein, J. Guy Potvin was advised that the particu
lars sought with respect to the allegations made in
Paragraphs 10 to 15 are not within the knowledge of the
Defendants.
11. I am advised by J. Guy Potvin and do verily believe that as
a result of a telephone conversation he had with Clemence
Roles, one of the Defendants herein, J. Guy Potvin advised the
said Clemence Roles that should we be unsuccessful in striking
out Paragraphs 10 to 15 of the Statement of Claim on the basis
of the unconstitutionality of section 7(e) of the Trade Marks
Act, then all of the aforementioned particulars would be, and
are, essential to allow us to prepare the Defence to the allega
tions made in Paragraphs 10 to 15 of the Statement of Claim.
That requires very careful reading. The deponent
does not swear that he believes Roles' statement,
nor even that Potvin believes it. He merely believes
that Potvin was so advised by Roles. The deponent
does not swear that he thinks the particulars are
necessary to plead but only that Potvin told Roles
that they were. I have no idea whether the affida
vit was drawn too cleverly or was badly drawn. In
the nature of the allegations in paragraphs 10 to
15, if the particulars are not within the defendants'
knowledge, the events alleged could scarcely have
occurred. Either way, the particulars are not
required to permit the defendants to plead.
The Rules do permit affidavit evidence on infor
mation and belief.
Rule 332. (1) Affidavits shall be confined to such facts as the
witness is able of his own knowledge to prove, except on
interlocutory motions on which statements as to his belief with
the grounds thereof may be admitted.
Thurlow A.C.J., as he then was, said of that Rule: 6
It seems to have become a common practice in preparing
material for use in interlocutory applications to ignore the first
clause of this Rule and to use the second clause as a device to
avoid the swearing of an affidavit by a person who knows the
6 The Queen v. A. & A. Jewellers Limited [1978] 1 F.C. 479
at p. 480.
facts in favour of putting what he knows before the Court in
the form of hearsay sworn by someone who knows nothing of
them. This is not the object of the Rule. The Court is entitled to
the sworn statement of the person who has personal knowledge
of the facts when he is available. The second part of the Rule is
merely permissive and is for use only when the best evidence,
that is to say the oath of the person who knows, is for some
acceptable or obvious reason not readily obtainable.
That was a tax case, which may explain why it has
escaped the attention of those specializing in the
practice of patent law. It would seem that, unless
the best evidence is not readily obtainable for an
obvious reason, an acceptable reason must be
established before the Court may be asked to
receive hearsay. It is apparent that such a reason
cannot itself be proved by hearsay.
In addition, even if the defendants had demon
strated that particulars ought to have been pro
vided under some requirement of Rule 415, I am
of the opinion that there was no sufficient reason
why a written request therefor ought not to have
been made sometime between June 15 and
November 4 as required by Rule 415(5). I hold
that opinion notwithstanding the intervening inter
ruption of postal service and the fact that the
defendants reside in Saskatoon and their counsel
in Ottawa.
The defendants' motion will be denied except
that the time for filing the statements of defence
will be extended to November 20, 1981. The plain
tiff will recover its costs of this application to be
taxed as between solicitor and client in any event
of the cause.
Having dealt with the matters before me, I
probably should say no more. However, I cannot
refrain from recording my distress at the growing
willingness of counsel, as exemplified in this
instance, to place their own credibility in issue by
either giving evidence, or permitting or directing
an employee or associate to give their evidence on
information and belief, in proceedings before this
Court. Is it not recognized that evidence adduced
by affidavit is as much evidence as if given viva
voce and that, in the nature of adversary proceed-
ings, the credibility of anyone who gives evidence
is always in issue? Is it not understood that counsel
can best serve himself, his clients and the courts in
which he practices if he affords no opportunity for
doubt or reservation as to his personal credibility?
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.