Judgments

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Decision Content

A-1256-87
Tye -Sil Corporation Limited (Appellant) (Defendant)
v.
Diversified Products Corporation and Brown Fitz- patrick Lloyd Patent Limited (Respondents) (Plaintiffs)
INDEXED AS: DIVERSIFIED PRODUCTS CORP. V. TYE-SIL CORP.
Court of Appeal, Thurlow C.J., Hugessen and Lacombe JJ.—Ottawa, January 14, 1988.
Practice — Judgments and orders — Stay of execution — Appeal from refusal to stay judgment, pending appeal, order ing appellant to destroy infringing models of patented device — Trial Judge erred in stating economic harm alone insuffi cient reason to stay execution — Appeal allowed — Order for destruction of $1 million worth of property potentially causing irreparable harm if order wrongly made — Doubtful benefits to respondents if order carried out immediately — Destruction of inventory of infringing devices removing subject-matter of appeal on merits — Corning Glass Works v. Canada Wire & Cable Ltd. (1984), 1 C.P.R. (3d) 374 (F.C.T.D.) approved as proper approach to orders for destruction and delivery of property in patent cases.
CASES JUDICIALLY CONSIDERED APPLIED:
Corning Glass Works v. Canada Wire & Cable Ltd., doing business as Canstar Communications (1984), 1 C.P.R. (3d) 374 (F.C.T.D.).
REFERRED TO:
Marketing International Ltd. v. S.C. Johnson and Son, Inc., [1977] 2 F.C. 618 (C.A.); Procter & Gamble Co. v. Bristol-Myers Canada Ltd. (1978), 39 C.P.R. (2d) 171 (F.C.A.).
COUNSEL:
Richard Uditsky for appellant. R. Scott Jolliffe for respondents.
SOLICITORS:
Mendelsohn, Rosentzveig, Shacter, Montréal, for appellant.
Gowling & Henderson, Toronto, for respon dents.
The following are the reasons for judgment of the Court delivered orally in English by
HUGESSEN J.: This is an appeal from a decision of Cullen J. [T-1565-85, order dated 30/11/87, not yet reported] by which he refused to stay, pending appeal, that part of an earlier judgment by which he had ordered the appellant to "deliver and destroy all infringing models" of the patented device in suit.
In refusing to give the requested stay, Cullen J. said:
The operation of a judgment following trial should not be suspended unless the aggrieved party is able to establish a preponderance of a very severe irreparable harm. Certainly with some 8,596 units in the defendant's inventory with a "sales value of $1,000,000", the defendant will suffer economic harm. It is clear from the jurisprudence that suffering economic harm alone is not sufficient reason for staying the operation of a judgment. (Appeal Book, at page 172).
We are all of the view that the first-quoted sentence properly states the applicable test of what the interests of justice require. See Marketing International Ltd. v. S.C. Johnson and Son, Inc., [1977] 2 F.C. 618 (C.A.); Procter & Gamble Co. v. Bristol-Myers Canada Ltd. (1978), 39 C.P.R. (2d) 171 (F.C.A.). We are also of the view, how ever, that the last sentence of the quoted passage is clearly wrong. Indeed in almost every case in this Court the interests of the parties, and the resulting harm which might flow from injury to those inter ests, are wholly of an economic nature. What justice requires is not governed by whether harm is economic or not.
An order for the destruction of property, if complied with, will clearly have caused irreparable harm if it should subsequently turn out that the order should not have been given. The property, once destroyed, cannot be recreated, and there is no recourse at law. The Trial Judge appears to have accepted that such harm would be of the order of $1,000,000 "sales value" in this case. On the other hand, it is difficult to know what benefit would flow to the respondents from the immediate carrying out of the order. Counsel was unable to suggest any. In those circumstances, the prepon derance of irreparable harm clearly favours the
appellant; the Trial Judge should have granted the stay.
There is another aspect to the interests of justice which militates in favour of staying an order such as was given here. To an extent at least, the very subject-matter of the appeal on the merits is the appellant's existing inventory of infringing devices; if that inventory is destroyed, that subject-matter will have disappeared before the appeal is heard.
We note and commend the decision of Strayer J. in Corning Glass Works v. Canada Wire & Cable Ltd., doing business as Canstar Communications (1984), 1 C.P.R. (3d) 374 (F.C.T.D.), as being the proper approach to orders for destruction and delivery of property in patent cases.
The appeal will be allowed; that part of para graph 3 of the judgment of the Trial Division on the merits herein which orders the delivery and destruction of all infringing models shall be stayed until judgment on the appeal on the merits. As a condition of such stay, defendant shall give an undertaking to preserve all presently existing infringing models in their current state.
The appellant is entitled to its costs on the present appeal; the costs on the motion to stay in the Trial Division shall be costs in the cause.
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