T-2953-81
Montreal Fast Print (1975) Ltd. (Plaintiff)
v.
Polylok Corporation (Defendant)
Trial Division, Walsh J.—Ottawa, June 30 and
July 12, 1983.
Patents — Practice — Discovery — Production of docu
ments — Privilege — Patent agent also lawyer wearing two
hats — Lawyers having "in-house" patent agents — Whether
communications between latter and client or American lawyers
privileged — Whether privilege attaching if acting merely as
patent agents and not giving legal advice — Inter-office
communications — Privilege concept now broader than mere
rule of evidence — Reference to cases on privilege of solicitors
and patent agents — Fraud invoked against privilege claim —
Mere allegation of fraud insufficient — Privilege existing for
client-patent agent communications through medium of solici
tor if in contemplation of or during litigation: Flexi-Coil Ltd.
v. Smith-Roles Ltd. et al. (1983), 73 C.P.R. (2d) 89 (F.C.T.D.)
— Criteria to be adopted in classifying documents as privi
leged or not set out — Federal Court Rules, C.R.C., c. 663, R.
332(1).
This is a motion for an order requiring production of docu
ments on examination for discovery relating to the prosecution
of either certain Canadian patent applications or their Ameri-
can counterpart applications. Two law firms are involved. The
Canadian lawyers are agents of the American attorneys for the
purposes of the Canadian patent applications, and both law
firms are agents of the defendant. The Canadian law firm
employs patent agents who are not lawyers. The defendant did
not correspond directly with a patent agent as such, but only
with lawyers who were either also patent agents or employed
patent agents. The correspondence was not, however, in con
templation of litigation. The defendant claims that communica
tions between "in-house" patent agents and the defendant or
the American attorneys are privileged, as they are employees or
agents of the lawyers. The plaintiff contends that no privilege
attaches when a patent agent acts merely as such and is not
giving legal advice. The affidavits claiming privilege refer to
persons acting under the direction of lawyers or persons under
their control for the purpose of giving legal advice.
Held, the defendant shall submit a further affidavit classify
ing documents according to the following guidelines:
1. Copies of all documents filed in the Canadian Patent
Office are not privileged.
2. Communications from the American attorneys to the
Canadian lawyers or to the client, and vice versa are privileged,
except communications to or from patent agents members of
such firms acting solely as patent agents. The Supreme Court
of Canada in Descôteaux et al. v. Mierzwinski, [1982] 1
S.C.R. 860; (1982), 44 N.R. 462 held that a lawyer's client is
entitled to have all communications made with a view to
obtaining legal advice kept confidential. Whether communica
tions are made to the lawyer or to employees, and whether they
deal with matters of an administrative nature or the actual
nature of the legal problem, all information which a person
must provide in order to obtain legal advice is privileged. In
Lumonics Research Limited v. Gould, [1983] 2 F.C. 360;
(1983), 46 N.R. 483 (C.A.), it was held that professional legal
privilege does not extend to communications between clients
and patent agents, even if those communications are made for
the purpose of obtaining or giving legal advice, as patent agents
as such are not members of the legal profession. The plaintiff
relied upon Moseley v. The Victoria Rubber Company (1886),
L.T. Rep. N.S. 482 (Ch.D.) where the communication was
between the plaintiff and a lawyer standing in two relations, i.e.
as solicitor and as patent agent, towards the plaintiff. The
plaintiff did not state in which capacity the solicitor stood when
the communications took place. A further answer was ordered.
Reference was also made to IBM Canada Limited-IBM
Canada Limitée v. Xerox of Canada Limited, [1978] 1 F.C.
513 (C.A.) where it was found that privilege did not attach to a
letter written by the manager of the patent department because
there was no indication that it was by the writer in his capacity
as a legal adviser. In Solosky v. The Queen, [1980] 1 S.C.R.
821, privilege was held not to apply to communications in
which legal advice was not sought. In Procter & Gamble Co. v.
Calgon Interamerican Corporation et al. (1980), 48 C.P.R.
(2d) 63 (F.C.T.D.), correspondence directed to a patent agent
rather than a lawyer was not privileged, although the law firm
carried on practices as lawyers and as patent agents under the
same name, as the dominant purpose of the communications
was to obtain issue of the patent. In Flexi-Coil Ltd. v. Smith-
Roles Ltd. et al. (1983), 73 C.P.R. (2d) 89 (F.C.T.D.) com
munications between a client and patent agent through the
medium of the client's solicitor was held to be privileged if
made in contemplation of or during the course of litigation. In
Susan Hosiery Ltd. v. Minister of National Revenue, [1969] 2
Ex.C.R. 27, it was held the fact that an accountant uses his
knowledge and skill as an accountant in placing a factual
situation before a lawyer to obtain legal advice, does not make
the communications that he makes as a representative any the
less communications from the client to the lawyer.
While the tendency is to extend privilege to cover communi
cations made by third parties to the solicitor, including infor
mation obtained from agents or employees of the solicitor, the
distinction is still maintained between legal advice given by a
patent agent as such and opinions given by a lawyer. The
difficulty occurs in making a distinction between when the
lawyer, who is also a patent agent or employs patent agents, is
acting as a lawyer and when he is acting as a patent agent. The
case law has made a distinction in situations where litigation
was not contemplated. The primary purpose of the advice given
in this case was to obtain the patents, which is patent agents'
work, even though the patent agent can obtain legal advice
from other members of his firm. The principle from Flexi- Coil
Ltd., supra, is applied.
3. Communications from the American law firm to the
Canadian law firm are not privileged to the extent that they
give advice on Canadian law.
4. Documents relating to the prosecution of the American
counterpart applications are not admissible according to the
judgment in O'Cedar of Canada Ltd. v. Mallory Hardware
Products Ltd., [1956] Ex.C.R. 299; (1955), 24 C.P.R. 103.
5. If the plaintiff wishes to invoke fraud to exclude all
documents from privilege, it must submit an affidavit providing
prima facie evidence of fraud. According to In re Goodman &
Carr et al. v. M.N.R. [No. 1] (1968), 68 DTC 5288 (S.C.O.), a
strong case of fraud must be established before the privilege is
lost. Re Romeo's Place Victoria Ltd. (1981), 23 C.P.C. 194
(F.C.T.D.) established that an affidavit based primarily on
information and belief was not sufficient to satisfy the standard
of proof for allegations of fraud. Here there is not even an
affidavit establishing an allegation of fraud. The statement in
the Flexi-Coil Ltd. case that "Fraud is not alleged" does not
mean that if it had been alleged this issue would have been
dealt with merely on the basis of that allegation. It would be
improper to find that a mere allegation of fraud is sufficient in
order to obtain access to documents in the possession of the
other party which would otherwise be privileged. No argument
was heard on the question of fraud.
CASES JUDICIALLY CONSIDERED
APPLIED:
Flexi-Coil Ltd. v. Smith-Roles Ltd. et al. (1983), 73
C.P.R. (2d) 89 (F.C.T.D.); In re Goodman & Carr et al.
v. M.N.R. [No. 1] (1968), 68 DTC 5288 (S.C.O.);
O'Cedar of Canada Ltd. v. Mallory Hardware Products
Ltd., [1956] Ex.C.R. 299; (1955), 24 C.P.R. 103.
CONSIDERED:
Descôteaux et al. v. Mierzwinski, [1982] 1 S.C.R. 860;
(1982), 44 N.R. 462; R. v. Littlechild (1979), 51 C.C.C.
(2d) 406 (Alta. C.A.); Solosky v. The Queen, [1980] 1
S.C.R. 821; Lumonics Research Limited v. Gould,
[1983] 2 F.C. 360; (1983), 46 N.R. 483 (C.A.); Moseley
v. The Victoria Rubber Company (1886), L.T. Rep. N.S.
482 (Ch.D.); IBM Canada Limited-IBM Canada
Limitée v. Xerox of Canada Limited, [1978] 1 F.C. 513
(C.A.); Procter & Gamble Co. v. Calgon Interamerican
Corporation et al. (1980), 48 C.P.R. (2d) 63 (F.C.T.D.);
Re Duncan (decd.), [1968] 2 All E.R. 395 (Prob.); Susan
Hosiery Ltd. v. Minister of National Revenue, [ 1969] 2
Ex.C.R. 27; Re Romeo's Place Victoria Ltd. (1981), 23
C.P.C. 194 (F.C.T.D.).
COUNSEL:
G. A. Macklin, Q.C. for plaintiff.
R. E. Dimock for defendant.
SOLICITORS:
Gowling & Henderson, Ottawa, for plaintiff.
Sim, Hughes, Toronto, for defendant.
The following are the reasons for order ren
dered in English by
WALSH J.: Plaintiffs motion seeks as follows:
1. An order requiring the defendant to produce at
the continuation of the examination for discovery
of Mr. Daniel Duhl, the president of the defend
ant, all documents in its possession, custody or
power relating to the prosecution of the patent
application which resulted in Canadian letters
patent 1,097,488 or the U.S. counterpart applica
tion and including but not limited to:
(a) the defendant's files relating to the prosecu
tion of the said applications;
(b) the files of Pennie and Edmonds and Messrs.
Herridge, Tolmie, the patent agents of the
defendant relating to the prosecution of the said
patent applications; and
(c) any prior art searches and search reports
which were prepared before the filing of the said
patent applications.
and furthermore, to produce any documents in the
defendant's possession, custody or power relating
to the prosecution of the applications respecting
the alleged invention of Canadian patent
1,099,124 or its U.S. counterpart and any docu
ments relating to the invention date; including but
not limited to the defendant's files, Messrs. Pennie
and Edmonds' files and Messrs. Herridge, Tol-
mie's files relating to the said patent application;
2. Such further and other order as to this Honour
able Court may seem just; and
3. Its costs of this application.
On June 7, 1983, Mr. Justice Addy granted the
motion subject however, in the event of privilege
regarding any of the documents being claimed by
the defendant, that the defendant on or before
June 17, 1983, files and serves on the plaintiff an
affidavit identifying such documents, detailing the
general nature of their contents and the grounds
on which privilege is being claimed, and submit
ting a written application for a special date for
hearing of such claim for privilege or directions
pertaining thereto. This time frame was subse
quently extended to June 24 by order of Mr.
Justice Cattanach dated June 21, the hearing of
the question of privilege being set for June 30.
Another motion had been dealt with by Mr.
Justice Cattanach on June 22, 1983, calling upon
Daniel Duhl to re-attend at Ottawa before June 30
to answer unanswered questions asked in his
examination for discovery. A great many questions
were involved and the judgment classifies them in
some detail. It concludes at page 4:
Questions 1676, 1170-1172, 3043, 3045-3048, 3051-2, 1831,
1904-1906, 2524, 2997 (second part) involve questions of pro
duction of documents for which a claim of privilege is made
and should be the subject-matter of a separate motion which
may be brought on any regular motion day before the Motions
Judge and it is decided that the Judge who dealt with the other
questions as set out herein did not deal with and is not seized
with these questions.
The documents for which a claim of privilege is made, if they
can be located, shall be produced before the Court at the return
of the motion together with a list of documents.
By consent judgment rendered on June 30, 1983,
the delay for re-attendance was extended to July
15, 1983.
Two law firms are involved, that of Pennie and
Edmonds, the American attorneys for the defend
ant and Herridge, Tolmie, the Canadian attorneys.
Both parties made extensive reference to the
Supreme Court case of Descôteaux et al. v.
Mierzwinski' which dealt with seizure by virtue of
a search warrant to search for and seize documents
at a legal aid bureau in which the applicant had
allegedly lied about his financial means in order to
obtain legal aid, which would be a criminal
I [1982] 1 S.C.R. 860; (1982), 44 N.R. 462.
offence. Privilege was invoked but was not upheld
in the Superior Court [[1978] C.S. 792] which
found that application for legal aid was completed
before a solicitor-client relationship began. The
Quebec Court of Appeal dismissed the appeal
from this judgment. While the Supreme Court of
Canada dismissed the appeal it did however hold
that a solicitor-client privilege did arise at the legal
aid application stage, but that it did not protect
communications which constituted an element of
crime. The whole question of privilege was exhaus
tively examined in the Supreme Court judgment.
At pages 878-879 S.C.R.; pages 523-524 N.R.
reference is made to a judgment by Laycraft J.A.
in Alberta in the case of R. v. Littlechild: 2
A number of cases establish the principle that solicitor-client
privilege extends both to communications between the agents of
a client and his solicitor and to communications between a
client and agents of the solicitor. In Wheeler v. Le Marchant
(1881), 17 Ch. D. 675 at p. 682, Jessel, M.R., said:
The actual communication to the solicitor by the client is of
course protected, and it is equally protected whether it is
made by the client in person or is made by an agent on behalf
of the client, and whether it is made to the solicitor in person
or to a clerk or subordinate of the solicitor who acts in his
place and under his direction.
In Lye!! v. Kennedy (1884), 27 Ch. D. 1, Cotton, L.J., said at
p. 19:
But then this privilege is confined to that which is com
municated to or by that man [the client] by or to the
solicitors or their agents, or any persons who can be treated
properly as agents of the solicitors. We have therefore
thought it right, in order to prevent an evasion of what is the
proper view of the law by the use of that word `agents,' to
require that the Defendant shall put in a further affidavit
stating whether the agents mentioned were his agents, or
whether they were the agents of the solicitors and persons so
employed by the solicitor as to be his agents, including such
agents as every solicitor's clerk may be said to be, who would
all be entitled to the protection given to solicitors. Subject,
then, to that alteration, we think that the protection claimed
is in law good.
The defendant argues that this would also
extend privilege to patent agents working for law
yers but not to a patent agent acting on his own for
the client.
2 (1979), 51 C.C.C. (2d) 406 (Alta. C.A.), at p. 411.
The Supreme Court judgment concludes at
pages 892-893 S.C.R.; 537-538 N.R.:
In summary, a lawyer's client is entitled to have all com
munications made with a view to obtaining legal advice kept
confidential. Whether communications are made to the lawyer
himself or to employees, and whether they deal with matters of
an administrative nature such as financial means or with the
actual nature of the legal problem, all information which a
person must provide in order to obtain legal advice and which is
given in confidence for that purpose enjoys the privileges
attached to confidentiality. This confidentiality attaches to all
communications made within the framework of the solicitor-cli
ent relationship, which arises as soon as the potential client
takes the first steps, and consequently even before the formal
retainer is established.
The difficulty in the present case arises from the
fact, as the plaintiff points out, that a patent agent
who is also an attorney-at-law wears two hats.
Patent applications at the Canadian Patent Office
have to be prosecuted by a patent agent, not by an
attorney. In the present case Canadian attorneys
representing the defendant have in their employ
patent agents who are not attorneys, but might
perhaps be described as "in-house" agents who,
according to the defendant, are employees or
agents hence communications between them and
the client or the American attorneys are also
privileged.
The plaintiff contends that no such privilege
attaches when they are acting merely as patent
agents and not giving legal advice. It is conceded
of course that since any such communication to or
from the Commissioner of Patents in connection
with the processing of the patent applications are
available to plaintiff they are not privileged, so the
issue applies primarily to what can be referred to
as inter-office communications between either firm
of attorneys or between them and the client.
Reference was also made to the case of Solosky
v. The Queen' which was referred to in the
Descôteaux judgment although the facts are
entirely different. It held that privilege is no longer
regarded merely as a rule of evidence which acts
3 [1980] 1 S.C.R. 821.
as a shield to prevent privileged material being
tendered in evidence in a court room, but that
Canadian courts have moved towards a broader
concept of solicitor-client privilege though not so
far as to recognize it as a fundamental principle
which might be categorized as a "rule of proper
ty". In the case of Lumonics Research Limited v.
Gould 4 the Federal Court of Appeal dealt directly
with privilege of a solicitor or patent agent. At
pages 365-366 F.C.; 488-489 N.R. the judgment
reads as follows:
Counsel for the appellant drew two inferences from that prem
ise: first, that the American solicitors, in their relationship with
the respondents, were acting in the capacity of patent agents
and not as solicitors; second, that, as a consequence, the
communications between those solicitors and the respondents
were, in fact, communications between patent agents and cli
ents which were not privileged since the legal professional
privilege does not extend to patent agents.
It is clear that, in this country, the professional legal privi
lege does not extend to patent agents. The sole reason for that,
however, is that patent agents as such are not members of the
legal profession. That is why communications between them
and their clients are not privileged even if those communica
tions are made for the purpose of obtaining or giving legal
advice or assistance.
On the other hand, all confidential communications made to
or by a member of the legal profession for the purpose of
obtaining legal advice or assistance are privileged, whether or
not those communications relate to the kind of legal advice or
assistance that is normally given by patent agents. Legal advice
does not cease to be legal advice merely because it relates to
proceedings in the Patent Office. Those proceedings normally
raise legal issues; for that reason, when the assistance of a
solicitor is sought with respect to such proceedings, what is
sought is, in effect, legal advice and assistance. And this in spite
of the fact that a solicitor, as such, cannot represent an
applicant in proceedings before the Patent Office.
The plaintiff refers to several cases in support of
the dual role argument. In the first of these, that
of Moseley v. The Victoria Rubber Company,'
Chitty J. stated, at page 485:
It is quite clear, I need not say, in point of law, that communi
cations between a man and his patent agent are not privileged.
Therefore, seeing the nature of this correspondence which is
referred to, and seeing the double character which the plain
tiffs solicitor occupies, it appears to me that the defendants are
entitled to an answer more precise; and a more precise answer,
4 [1983] 2 F.C. 360; (1983), 46 N.R. 483 (C.A.).
5 (1886), L.T. Rep. N.S. 482 (Ch.D.).
I am satisfied, could be given. The statement is, "confidential
communications between myself and my solicitor". But he does
not state that those communications took place between the
plaintiff and his solicitor in that relation one to the other. It
may be that the communication took place in the other relation,
that of patent agent. The communication is between the plain
tiff and a person standing in two relations towards the plaintiff.
I think, therefore, that it is right, instead of making the order
for production, which was the thing asked for, to order that
there shall be a further answer.
Later on the same page the learned Justice states:
... 1 am not saying that with a view at the present moment of
showing that the patent of 1883 is invalid, but I am merely
making that as a general statement. Then the defendants say
that, though they cannot make any definite statement as to the
effect of the correspondence that took place in regard to the
patent of 1884, there is fair ground for believing that the two
inventions have been so closely connected that in the communi
cations which they wish to get at, namely, communications
between the plaintiff and his patent agent, there will be ma
terial facts to be disclosed which will assist their case in
breaking down the patent of 1883. I am not disposed myself to
allow fishing interrogatories, but it seems to me that I should
be doing no injustice to the parties if I say that there ought to
be a further answer, and I do so say as to the patent of 1884.
Reference was also made to the Federal Court of
Appeal case of IBM Canada Limited-IBM
Canada Limitée v. Xerox of Canada Limited 6 in
which it was found that there was nothing in a
letter for which privilege was claimed to indicate
that it was by the writer in his capacity as an
attorney. He was also manager of the patent
department of the company and there was nothing
to indicate that he wrote as a legal adviser. The
judgment goes on to state, at page 517:
In view of this disposition of the question it is unnecessary for
us to decide in this case whether even if the letter was written
by a lawyer acting in that capacity privilege could attach since
it was written, not to the client, but to the patent agents
employed by it for the prosecution of a patent application.
Neither do we have to decide whether or not the letter was
written in anticipation of litigation or whether the lawyer was
advising in respect of laws upon which he was not qualified to
advise since he was an American attorney and may have been,
in part, giving his views on the prosecution of Canadian patent
applications.
In the case of Solosky (supra) at page 835 Dick-
son J. states:
There are exceptions to the privilege. The privilege does not
apply to communications in which legal advice is neither sought
nor offered, that is to say, where the lawyer is not contacted in
his professional capacity. Also, where the communication is not
6 [1978] 1 F.C. 513 (C.A.).
intended to be confidential, privilege will not attach, O'Shea v.
Woods, ([1891] P. 286), at p. 289.
In the case of Procter & Gamble Co. v. Calgon
Interamerican Corporation et al.' Mahoney J.
stated at page 65:
Among the documents which I have excluded from the claim
of privilege is correspondence between the plaintiff and Messrs.
Gowling & Henderson of Ottawa. That firm carries on prac
tises as barristers and solicitors and as patent agents under the
same name. The correspondence is directed to and from one of
the patent agents rather than one of the lawyers.
At page 64 he stated:
I am entirely satisfied that the dominant purpose of all of the
communications was to obtain the issue of the patent. While it
was apparently contemplated, at least in the more recent
documents, that, once issued, actions for its infringement would
be brought against the defendants and others in respect of
products then on the market, the documents clearly relate
directly to the processing of the application in the Patent Office
and only coincidentally, if at all, to contemplated litigation, be
it this action or another. It follows that only those communica
tions between the plaintiff and its legal advisers and not the
communications between either of them and third parties are
amenable to the claimed privilege. Communications with third
parties are privileged only if their dominant purpose was the
instruction of the plaintiff's legal advisers in anticipation of this
action: Waugh v. British Railways Board, [1979] 3 W.L.R.
150 (H.L.).
The legal adviser with whom the plaintiff communicated
must have been professionally qualified to advise it in respect of
Canadian law: Re United States of America v. Mammoth Oil
Co., [1925] 2 D.L.R. 966, 28 O.W.N. 22 (Ont. C.A.). While
such a communication with a qualified employee is as privi
leged as if with a qualified private practitioner, any such lawyer
must have been qualified to practise law in Canada as a
barrister and solicitor, not as a patent agent.
In the British case of Re Duncan (decd.) 8 Ormrod
J. stated, at page 399:
I, therefore, hold that all the documents which are communica
tions passing between the plaintiff and his foreign legal advisers
are privileged, whether or not proceedings in this or any other
court were or were not contemplated when they came into
existence.
The defendant's counsel stated he was also one of
the counsel in the Procter & Gamble case (supra)
and that Mr. Justice Mahoney did not have the
Duncan case before him at the time he made his
finding with respect to foreign legal advisers.
7 (1980), 48 C.P.R. (2d) 63 (F.C.T.D.).
8 [1968] 2 All E.R. 395 (Prob.).
In a recent judgment in the case of Flexi-Coil
Ltd. v. Smith-Roles Ltd. et al. [(1983), 73 C.P.R.
(2d) 89 (F.C.T.D.)], Mahoney J. states at pages
92-93:
As to solicitor-client privilege, I take the law to be that an
absolute privilege, assertable by the client, exists as respects all
communications between the client and his solicitors for the
purpose of obtaining and giving legal advice whether the com
munication is direct or through the client's agent. No privilege
exists as respects direct communications between a client and a
patent agent. Privilege does exist in respect of communications
between a client and a patent agent through the medium of the
client's solicitor if made in contemplation or during the course
of litigation.
It must be pointed out that in the present case
Herridge, Tolmie are not only agents of the
American law firm Pennie and Edmonds for the
purposes of the Canadian patent applications but
that both law firms are agents of the client Polylok
Corporation. The client does not appear to have
engaged or corresponded directly with a patent
agent as such, but only with attorneys who were
either also patent agents or had patent agents in
their employ. However, it cannot be said that the
correspondence was in the course of or in contem
plation of litigation.
The question of privilege with respect to com
munications with third parties is discussed in
Sopinka and Lederman, The Law of Evidence in
Civil Cases (Buttersworth, Toronto, 1974) at page
169 where they state:
The concept of solicitor-client privilege in Anglo-Canadian
law has not been limited solely to those communications pass
ing between an individual and his lawyer. The umbrella of
protection has been extended to cover other communications
made by third parties which may be used by the solicitor in
preparing his case for trial. Written opinions of experts who
have been asked to conduct tests or to formulate a judgment
upon certain facts, or statements taken from witnesses, or
reports prepared by investigators, all of which assist the solici
tor in the preparation and presentation of his case, fall within
the ambit of the protection. Courts, however, have imposed a
restriction upon the claiming of privilege for third party com
munications which no longer applies to statements made direct
ly between a solicitor and his client. In order for privilege to
attach to third-party communications, the requirement still
persists that such communications must have been made in
relation to existing or contemplated litigation.
At page 171 however they state:
The proviso that the document be prepared for the purpose of
litigation, however, has not been rigidly applied with respect to
all factual or investigatory reports furnished to the solicitor.
The creation of such a document or report may have a twofold
purpose.
In the case of Susan Hosiery Ltd. v. Minister of
National Revenue 9 Jackett P., as he then was,
stated at pages 35-36:
... that, where an accountant is used as a representative, or one
of a group of representatives, for the purpose of placing a
factual situation or a problem before a lawyer to obtain legal
advice or legal assistance, the fact that he is an accountant, or
that he uses his knowledge and skill as an accountant in
carrying out such task, does not make the communications that
he makes, or participates in making, as such a representative,
any the less communications from the principal, who is the
client, to the lawyer; and similarly, communications received by
such a representative from a lawyer whose advice has been so
sought are none the less communications from the lawyer to the
client.
The plaintiff also wished to invoke the question
of fraud which would eliminate the defendant's
claim for privilege. This was dealt with in the
Solosky case (supra) at pages 835-836 where the
judgment states:
More significantly, if a client seeks guidance from a lawyer in
order to facilitate the commission of a crime or a fraud, the
communication will not be privileged and it is immaterial
whether the lawyer is an unwitting dupe or knowing partici
pant. The classic case is R. v. Cox and Railton ((1884), 14
Q.B.D. 153), in which Stephen J. had this to say (p. 167): "A
communication in furtherance of a criminal purpose does not
'come in the ordinary scope of professional employment'."
The case of In re Goodman & Carr et al. v.
M.N.R. [No. 11, 1 ° a judgment of the Supreme
Court of Ontario, is authority for the proposition
that a strong case of fraud must be established,
however, before the privilege is lost. At page 5289
the judgment states:
3. A mere allegation of fraud in the pleading is not sufficient:
a prima facie case of fraud must be made out in fact.
Similarly in the case of Re Romeo's Place Vic-
toria Ltd.," Collier J. after an extensive review of
jurisprudence concluded that an affidavit based
primarily on information and belief was not suffi
cient to satisfy either the requirements of the
Federal Court Rule 332(1) [Federal Court Rules,
C.R.C., c. 663] or the standard of proof for allega
tions of fraud, and that in order to circumscribe
9 [1969] 2 Ex.C.R. 27.
1 0 (1968), 68 DTC 5288 (S.C.O.).
11 (1981), 23 C.P.C. 194 (F.C.T.D.).
solicitor-client privilege on the ground of fraud a
prima facie case must be made from first-hand
knowledge. In the present case at this stage of
proceedings there is not even an affidavit establish
ing an allegation of fraud which is made by the
plaintiff in the pleadings. The plaintiffs counsel
stated that he could refer to certain documents
which would indicate that fraud had been commit
ted by the defendant in its patent application for
the first patent in suit, namely 1,097,488. This is
not in issue with respect to application 1,099,124.
The plaintiff's counsel argued that he did not
believe that any affidavit was necessary in view of
the recent judgment of Mahoney J. in Flexi-Coil
Ltd. v. Smith-Roles Ltd. et al., which on page 90
states inter alia "Fraud is not alleged." I do not
take this to mean, as the plaintiffs counsel con
tends, that if fraud had been alleged this issue
would then have been dealt with by Mr. Justice
Mahoney merely on the basis of that allegation. It
appears to me to be merely a statement of fact
that it was not one of the arguments for contend
ing that privilege did not exist. Certainly it would
not be proper to find that a party merely has to
allege fraud in the pleadings and, as a result,
without providing any prima facie evidence as to
whether there is any basis in such allegation,
obtain access to documents in the possession of the
other party which would otherwise be privileged.
Under the circumstances I refused to hear any
argument on the question of fraud, but on the
contention of the plaintiffs counsel that, if the
defendant's claims for privilege are sustained on
the issues raised he should be given a chance to
raise the issue of fraud, it was agreed that any
arguments pertaining to such issue would be left
for hearing at a future date, if this became neces
sary, and proper affidavits or other evidence to
substantiate such an allegation were before the
Court at that time. Not having heard any argu
ments on this issue I am not seized of it in the
event that it is raised on a future hearing.
While the jurisprudence is somewhat conflicting
and there seems to be a tendency to extend the
ambit of privilege to cover communications made
by third parties to the solicitor including informa
tion obtained from experts and certainly informa
tion obtained from agents or employees of the
solicitor, the distinction is still maintained between
legal advice given by a patent agent as such and
opinions given by an attorney or a solicitor. The
difficulty occurs, as already stated, in making a
distinction between when the lawyer who is also a
patent agent or has patent agents in his full-time
employ, is acting as a lawyer and when he is acting
as a patent agent. While the actual submissions to
the Patent Office have to be prepared and made by
a patent agent it is evident that lawyers in a firm
giving advice to the client would no doubt have
discussed the legal implications of the submissions
made to the Patent Office with the patent agents
in their firm, or if they themselves are the patent
agents making the submissions and are also law
yers they would certainly have used their legal
knowledge in connection with same and advised
the client accordingly. Nevertheless the jurispru
dence appears to have made the distinction, at
least in situations where litigation was not in con
templation. While in one sense it can be said that
there is always a possibility of litigation arising out
of any patent application, there is nothing in the
present case to indicate that the primary purpose
of any advice given to the client whether by the
American attorneys or by the solicitors in Canada
was not in connection with obtaining the patents in
question, and this is primarily patent agents' work
even though the patent agent can consult with or
obtain legal advice from other members of his firm
qualified to give such advice in connection with
these applications.
I adopt the statement of my brother Mahoney J.
in the Flexi-Coil Ltd. v. Smith-Roles Ltd. et al.
case (supra) where he states [at page 93]:
Privilege does exist in respect of communications between a
client and a patent agent through the medium of the client's
solicitor if made in contemplation or during the course of
litigation. [Emphasis mine.]
The defendant submitted two affidavits by
Gordon J. Zimmerman, its Canadian counsel, in
support of its claim for privilege, the first being
dated June 17, 1983 and the second June 24, 1983.
It is not surprising that they are worded so as to
extend the claim for privilege to communications
made to or by patent agents in the employ of the
solicitors who processed the patent applications.
Annexed to the affidavit of June 17 are three lists
of documents, Exhibit A being from the files of
Pennie and Edmonds for the prosecution of the
U.S. counterpart application to the application
resulting in Canadian letters patent 1,097,488,
Exhibit B being the list of the files of Herridge,
Tolmie with respect to the prosecution of the two
Canadian patent applications, Exhibit C being a
list of documents in the files of the defendant
Corporation relating to the two patent applications
in Canada and their U.S. counterparts. No
attempt is made to break down or categorize the
various documents.
As examples of the manner in which the affida
vits are drawn I would refer to paragraphs 6, 10,
12 and 13 of the affidavit of June 17 which read
respectively as follows:
6. The documents listed in the exhibits attached hereto have
been reviewed by counsel for the Defendant, and it is believed
that the claim for privilege respecting the same is well founded
in that the documents there listed are correspondence and
memoranda made by attorneys representing the Defendant
concerning proceedings in the United States Patent Office
relating to the prosecution of certain patent applications there,
and by lawyers representing the Defendant concerning proceed
ings in the Canadian Patent Office relating to the prosecution
of various patent applications.
10. I am informed by Mr. Ross Gray, Q.C., and verily believe,
that he is a partner in the law firm of Herridge, Tolmie.
Furthermore, his law firm had carriage of the prosecution of
the Canadian patent applications in issue herein. I am further
informed by Mr. Gray and verily believe that anyone who
performed work on the prosecution files did so as a lawyer or as
an employee of the law firm, under instructions of a lawyer as
is the general practice of Herridge, Tolmie, and that such work
was legal assistance and intended to be maintained confidential.
12. The Defendant has available for inspection by the Court, if
required, copies or originals of all the documents so listed for
which privilege is claimed. These documents include corre
spondence between the officers, employees or agents of the
Defendant Corporation, lawyers or those acting under the
instruction of lawyers from the law firms of Pennie & Edmonds
and Herridge, Tolmie, and correspondence with the Patent
Offices in Canada and the United States. The documents also
include certain handwritten notes prepared by members of the
law firms or those under their direction in connection with the
giving of legal assistance as set out above. The documents also
contain certain internal memoranda or internal letters between
members of the law firms required for the giving of such legal
assistance.
13. The Defendant submits that these documents are all privi
leged as being documents prepared in connection with the
giving of legal assistance by lawyers or those under their
control, including the work product of the two law firms in
question and internal communications generated with respect to
the giving of such legal assistance.
In these paragraphs as throughout the affidavit
there is frequent reference to persons acting under
the direction of lawyers in the law firm, or persons
under their control for the purpose of giving legal
assistance. In paragraph 6 of the affidavit of June
24, the defendant takes the position that most of
the documents listed are irrelevant. Although the
question of relevancy was not argued before me, I
am inclined to agree that at least some of the
documents are irrelevant or of little interest, being
merely letters enclosing payment to the Patent
Office and legal fees, routine letters which pre
sumably contain no legal advice, and so forth.
There was no cross-examination on these affidavits
which constitute the only evidence before the
Court at the hearing of the motion. The allegations
of fact in them therefore stand as uncontradicted
at this stage.
There is some jurisprudence, although apparent
ly not recent, to the effect that evidence relating to
the prosecuting of a corresponding application in a
foreign country is inadmissible on the issue of
validity of the claims in a Canadian patent. I am
referring to the case of O'Cedar of Canada Ltd. v.
Mallory Hardware Products Ltd. 12 a judgment of
President Thorson in which he stated at page 326
Ex.C.R.; page 131 C.P.R.:
It was stated that the petition for re-issue was based upon the
proceedings on the United States patent and argued that the
applicants for the patent had really brought the United States
prosecution into the Canadian one. Objection was taken to this
proposed evidence on the ground that what happened in
another country under a different system of law could not
affect the validity or invalidity of the claims in a Canadian
patent. I ruled that the objection was well taken and the
proposed evidence inadmissible.
12 [1956] Ex.C.R. 299; (1955), 24 C.P.R. 103.
There are 530 documents listed in the exhibits
to Mr. Zimmerman's affidavit. The Court should
not be required to examine them one by one to
determine whether they are privileged or not.
I propose to set out on general lines, based on
the jurisprudence, categories of documents that
are privileged and not privileged as the case may
be, and if this is insufficient to dispose of the
matter and there are still areas of controversy the
defendant must submit further affidavits classify
ing the documents, explaining specifically with
respect to any significant document for which
privilege is specifically claimed the basis for such
claim. It is clearly insufficient to state that all the
documents on the list are privileged. The list even
includes a number of names of persons from whom
documents emanated or to whom they were sent,
only a few of whom are identified in the affidavits.
No claim for privilege could be sustained on such a
generalized affidavit. The Court has no means of
knowing which of the persons named is an attor
ney, who is a patent agent, and who is a third
party, or the positions they occupy, if in the
defendant's employ.
The criteria which I believe should be adopted
in classifying some of the documents as privileged
and some as not privileged are as follows:
1. Copies of all correspondence and other docu
ments in files of the Canadian Patent Office in
connection with applications for Canadian letters
patents 1,097,488 and 1,099,124 are not privi
leged.
2. All communications from Pennie and Edmonds
to Herridge, Tolmie or to the client Polylok Corpo
ration as well as all communications from Her-
ridge, Tolmie or Polylok Corporation to Pennie
and Edmonds or to each other are privileged, with
the exception of communications addressed to
patent agents members of said firms or emanating
from such patent agents, acting solely in their
quality as patent agents for prosecution of the
Canadian applications and not constituting any
legal advice, which are not privileged.
3. Also excluded from privilege are communica
tions from Pennie and Edmonds to Herridge,
Tolmie in connection with said patent applications
to the extent that any such communications pur
port to give advice with respect to Canadian law.
4. Documents in files relating to the prosecution of
the U.S. counterpart applications to Canadian let
ters patents 1,097,488 and 1,099,124, while not
privileged, are not admissible in evidence.
5. Since by application of the above criteria some
of the documents will be found to be privileged the
plaintiff may, if it still wishes to invoke fraud so as
to exclude all documents from privilege, submit an
affidavit and documentation providing prima facie
evidence on which such an allegation can be made,
and seek a special date for the hearing of this issue
before any Judge of this Court.
ORDER
The defendant shall submit a further affidavit or
affidavits classifying documents for which privi
lege is claimed in accordance with the criteria set
out in the reasons for judgment herein as follows:
1. Copies of all correspondence and other docu
ments in the files of the Canadian Patent Office in
connection with applications for Canadian letters
patents 1,097,488 and 1,099,124 are not privi
leged.
2. All communications from Pennie and Edmonds
to Herridge, Tolmie or to the client Polylok Corpo
ration as well as all communications from Her-
ridge, Tolmie or Polylok Corporation to Pennie
and Edmonds or to each other are privileged, with
the exception of communications addressed to
patent agents members of said firms or emanating
from such patent agents, acting solely in their
quality as patent agents for prosecution of the
Canadian applications and not constituting any
legal advice, which are not privileged.
3. Also excluded from privilege are communica
tions from Pennie and Edmonds to Herridge,
Tolmie in connection with said patent applications
to the extent that any such communications pur
port to give advice with respect to Canadian law.
4. Documents in files relating to the prosecution of
the U.S. counterpart applications to Canadian let
ters patents 1,097,488 and 1,099,124, while not
privileged, are not admissible in evidence.
The affidavit shall be specific as to the docu
ment or documents with respect to which privilege
is claimed and the reason for claiming the privilege
in each case.
All other documents for which no claim of
privilege can be made by application of the above
criteria shall be produced for examination by the
plaintiff. Disputed documents need not be pro
duced prior to the continuation of the examination
for discovery of Mr. Daniel Duhl, the parties
having agreed that continuation of this examina
tion will not be further delayed while awaiting
production of these documents.
This order is made without prejudice to the right
of the plaintiff to invoke the issue of fraud as a
ground for ordering the production of documents
relating to Canadian letters patent 1,097,488 for
which privilege has been sustained if desired, at a
special hearing before any Judge of this Court for
that purpose, supported by evidence in the form of
affidavits and accompanying exhibits sufficient to
establish a prima facie case of fraud.
If any issue arises as to the proper application of
the criteria set out herein to any specific document
or documents, it may be decided at a hearing
before any Judge of this Court.
Costs shall be in the event.
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.