PRACTICE
Costs
Action for alleged infringement of patent by defendants’ use, reproduction, harvesting, sale of genes, cells containing plaintiffs’ patented gene insert in canola seeds, plants without consent, licence—Defendants contested allegation of infringement, validity of patent on basis Patent Act not providing for patent of subject-matter of plaintiffs’ patent (for insertion of gene in plant variety or life form)—Further urging by enactment of Plant Breeders’ Rights Act, Parliament indicating intent intellectual property rights pertaining to new plant varieties governed by Act—Judgment upholding patent validity, finding infringement of certain claims, enjoining further infringement, awarding payment to plaintiffs of profits earned by defendants, dismissing claims for punitive, general damages—Plaintiffs seeking higher than usual costs on three grounds: unaccepted offer to settle, difficulty of case, defendants’ failure to admit fact patented gene present in crops—R. 420(1) providing where plaintiff making written offer to settle, obtaining judgment as or more favourable than terms of offer, plaintiff entitled to double party-and-party costs after service of offer—Offer contained elements of compromise—While offer to settle apparently qualifying under r. 420(1), Court should rule otherwise than directing doubling of party-and-party costs—Until resolved by trial, conflicting evidence and views of significance of, presence of patented cells or genes in defendants’ crop—Further, by nature of invention, investigative process to establish its use by defendant more elaborate, required more human, other resources than many other sorts of inventions might require—Higher than usual volume of work, complexity of legal issues not warranting higher than normal party-and-party costs represented in Tariff B, column III—hat volume of work higher than usual, actual expenses greater than recoverable under column III, necessary consequence of nature of patent—Costs reflecting these consequences should not be borne by defendants, but are aspect of plaintiffs’ overall business expenses—Defendants, by not admitting presence of patented gene in 1998 canola crop, not doing any more than requiring plaintiffs to prove case—Again, nature of patent dictated requirement for sampling, analysis to establish infringement—Not factor to be weighed adversely against defendants—Defendants submitting Court should fix costs as lump sum—Submitting case dealt with novel matter, not previously considered in Canadian courts, i.e. enforcement of patent rights for genetically modified food crops, involving balancing rights of public, those of patent holder—Arguing case involving legal issues, resolution of which providing guidance in future to farmers, plant biotechnology companies owning patents for genetically modified genes, plants—Further argued test case, with defendants selected by plaintiffs from among many farmers under investigation—In this sense, action serving corporate purposes other than claim against defendants whose operations selected as example for others, with widespread importance for plaintiffs, public in general—Citing Law Society of British Columbia v. Mangat, [1997] B.C.J. No. 2694 (S.C.) (QL) as such a case, wherein B.C.S.C. declining to award costs to successful plaintiff, and each party left to bear own costs—Defendants referring to other cases where court in exercise of discretion awarded no costs in disposing of novel issues (Senecal v. The Queen, [1984] 1 F.C. 169 (T.D.); Emerson v. Canada, [1986] F.C.J. No. 160 (C.A.) (QL)); where both parties considered case to be test case (Brown v. Durham (Regional Municipality) Police Force (1996), 2 O.T.C. 28 (Gen. Div.)); or where they agreed important issue had implications for others (Zaretski v. Saskatchewan (Workers’ Compensation Board) (1997), 156 Sask. R. 23 (Q.B.))—Further, defendants submitting costs awarded should bear some reasonable relationship to amount recovered—Submitting claim to award of costs at more than $220,000 unreasonable, excessive, in relation to amount recovered ($19,832) for profits earned on 1998 canola crop—Court noting other relief (injunction) also awarded to plaintiffs—Defendants submitting plaintiffs not concerned with monetary considerations, but with conveying message to any person growing canola with patented gene without licence—Defendant’s claim to limited resources available to pay costs, when compared to those of plaintiffs, irrelevant—Fixing costs avoiding expense to both parties of assessment of costs by taxing officer under directions of Court—Moreover, since any direction or fixed amount likely to be challenged in course of appeals by both parties, costs may now best be resolved by fixed award that if unacceptable, may be varied, or alternative of directions to assessment officer may be ordered, on appeal—Factors relied upon to conclude fixed costs appropriate set out in Federal Court Rules, 1998, r. 400(3): result of proceeding, relief claimed, importance and complexity of issues, in particular novelty of issues and difficulties of proof; written offer to settle, amount of work—Factors warranting costs at less than norm including importance of litigation to plaintiffs, fact defendants selected among farmers whose practices investigated as means of testing effectiveness of plaintiffs’ patent, licensing regime, nature of patent in this case with inherent complexities for improving infringement—Award of costs reducing counsel fees by two-thirds, allowable disbursements by one-third, setting maximum for GST paid on taxable items—Federal Court Rules, 1998, SOR/98-106, rr. 400, 420.
Monsanto Canada Inc. v. Schmeiser (T-1593-98, 2002 FCT 439, MacKay J., supplementary judgment dated 17/4/02, 17 pp.)