A-106-81
Vulcan Equipment Company Limited (Appellant)
v.
The Coats Company, Incorporated (Respondent)
Court of Appeal, Heald and Ryan JJ. and
MacKay D.J.—Toronto, September 28 and 30,
1981.
Practice — Motion to strike pleadings — Appeal from Trial
Division decision striking out portion of appellant's defence
and counterclaim to a patent infringement action brought by
the respondent — Appellant pleaded invalidity of the patents
although it had expressly agreed not to — Whether pleadings
of invalidity are futile — Federal Court Rule 419(1).
Radio Corp. of America v. Hazeltine Corp. (1971) 1
C.P.R. (2d) 22, referred to.
APPEAL.
COUNSEL:
Roger Hughes for appellant.
Burton B. C. Tait, Q.C. and Gordon S.
Clarke for respondent.
SOLICITORS:
Donald F. Sim, Q. C., Toronto, for appellant.
McCarthy & McCarthy, Toronto, for
respondent.
The following are the reasons for judgment
rendered in English by
HEALD J.: This is an appeal from a judgment of
the Trial Division * wherein it was ordered that
paragraph 3 of the statement of defence, para
graph (a) of the counterclaim and the particulars
of objection dated July 25, 1979, be struck out.
This action is a patent infringement action brought
by the respondent alleging infringement by the
appellant of two Canadian patents. The appellant
defended the action and counter-claimed alleging,
inter alia, invalidity of the two patents. Paragraph
3 of the defence, paragraph (a) of the counter
claim and the particulars of objection dated July
25, 1979 are pleas that the patents are invalid and
* [No reasons for judgment distributed—Ed.]
provide particulars as to the pleas of invalidity.
The respondent moved under Rule 419(1) for an
order striking out the pleadings detailed supra and
the learned motions Judge granted the order asked
for.
In support of that motion, the respondent filed,
inter alia, an affidavit by one James D. Hennessy
to which was annexed an alleged agreement be
tween the appellant and the respondent dated
December 10, 1964. In making the order asked for
by the respondent, the learned motions Judge
relied on paragraph 12 of that agreement express
ing the view that pursuant to said paragraph 12,
there was an express covenant by the appellant
that it would not raise the issue of invalidity of
subject patents, both during the term of the agree
ment and thereafter. It was thus the view of the
learned motions Judge that the covenant was "an
express binding covenant" and that the appellant
should not be permitted to raise the issue of inva
lidity in this action.
At the hearing of the appeal, the appellant
raised a number of issues of law with respect to the
applicability of paragraph 12 and the agreement
generally to the issues in this action. It is not, in
my view, necessary nor desirable for the Court, on
this appeal, to finally decide whether the appel
lant's objections in law in respect of this agreement
should prevail. Suffice it to say that, in my view,
the issues raised are serious issues of law and are
not of the kind which should be determined on a
summary motion to strike.'
In my opinion this is not a case where the
appellant's pleadings in respect of invalidity are so
clearly futile as to warrant their being struck out.
It seems to me that the pleadings on invalidity
should be allowed to stand, thus affording the
respondent the opportunity, if it so decides, to
plead the agreement. In this manner, the normal
Rules of the Court with reference to reply, discov
ery, etc. would operate and the whole issue of the
agreement would properly be before the Court at
trial.
' Compare Radio Corp. of America v. Hazeltine Corp.
(1971) 1 C.P.R. (2d) 22.
For these reasons, I would allow the appeal with
costs, both here and in the Trial Division, and
dismiss the respondent's motion to strike.
* *
RYAN J.: I agree.
* * *
MACKAY D.J.: I agree.
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.