A-260-03
2004 FCA 5
Realsearch Inc. and Dingwell's Machinery & Supply Ltd. (Appellants)
v.
Valon Kone Brunette Ltd. and BDR Machinery Ltd. (Respondents)
Indexed as: Realsearch Inc. v. Valon Kone Brunette Ltd. (F.C.A.)
Federal Court of Appeal, Stone, Rothstein and Sharlow JJ.A.--Ottawa, December 10, 2003 and January 9, 2004.
Patents -- Practice -- Motions Judge granting order under Federal Court Rules, 1998, r. 107 for patent claim construction prior to trial of patent infringement action -- Whether Motions Judge failed to give sufficient weight to all relevant considerations -- American practice since 1996 U.S. Supreme Court decision in Markman v. Westview Instruments Inc. -- While Federal Court, Exchequer Court rules have permitted bifurcation, severance of issues restricted to exceptional circumstances -- Reference to r. 3 as to scope of r. 107 -- Purpose of r. 107 not to encourage out-of-court settlements -- Unclear order would reduce length of discoveries, trial -- Could result in increased costs, delay of trial on merits -- Markman-type order perhaps available in appropriate circumstances -- Such fundamental change in Canadian patent law practice should be debated by intellectual property bar, put to Court's rules committee.
Practice -- Preliminary Determination of Question of Law -- Patent infringement action -- R. 107 motion for order for patent claim construction prior to trial -- While Rules permit bifurcation, severance of issues confined to exceptional circumstances -- Purpose of r. 107 considered -- R. 3 helpful as to scope of r. 107 -- In patent cases, severance of issue of law not necessarily saving time, expense.
This was an appeal from an order of the Trial Division pursuant to Federal Court Rules, 1998, rule 107 for the separate determination of issues in a patent infringement action. The motion had been based on an American practice, a "Markman Proceeding", for a preliminary patent claim construction. It was the first time that rule 107 had been invoked for this purpose. The issues were: (1) whether the Court of Appeal should interfere with a discretionary order; and (2) whether the Motions Judge erred in permitting construction of a patent claim prior to the trial of the merits.
Held, the appeal should be allowed.
As taught by the Supreme Court of Canada, the impugned order should not be interfered with unless it was evident that the Judge had failed to give "sufficient weight to all relevant considerations".
The Judge had noted that a procedure of this sort has been followed in the United States since the Supreme Court of the United States' 1996 decision in Markman v. Westview Instruments Inc. and that there is Canadian case law supporting the proposition that claim construction is "antecedent" to validity and infringement determination. The Judge concluded that this manner of proceeding could speed up litigation by alleviating patent trials from never-ending motions.
There was no suggestion that Markman was applicable in determining whether rule 107 could be resorted to. Markman held that claim construction by a trial judge does not infringe the Seventh Amendment to the United States Constitution (which preserved a litigant's right to a trial by jury where the claim exceeded $20 in value). But, as a result of Markman, an American practice has arisen by which the construction of a patent claim is decided before trial by a District Court Judge.
While the Rules of this Court--and those of its predecessor, the Exchequer Court--have long provided for the bifurcation of trials, English courts have always been careful to confine severance of issues to exceptional circumstances in view of the wisdom in trying all of the issues together. As Lord Scarman once pointed out, "Preliminary points of law are too often treacherous short cuts. Their price can be . . . delay, anxiety and expense". All past attempts in the Exchequer and Federal Courts to sever an issue of law for determination before the trial of a patent action have met with failure.
In the case at bar, the Motions Judge failed to give sufficient weight to all of the relevant considerations in making the order under appeal. In Illva Saronno S.p.A. v. Privilegiata, Evans J. referred to rule 3 in interpreting the scope of rule 107 and concluded that the use of the word "determined" in both rules would suggest that rule 107 was intended to assist the Court in achieving the just, expeditious and least expensive determination of a proceeding on its merits rather than to assist the parties in reaching an out-of-court settlement. An important purpose of rule 3 is to promote a "just" determination of the proceedings on its merits. It was not apparent that the Judge had given sufficient attention to this consideration or to whether appellants would suffer an injustice under the order. The supporting affidavit did not make clear the extent to which the length of discoveries and trial might be reduced by the rule 107 order. So long ago as 1908, Riddell J. in Berliner Gram-O-Phone expressed the concern that, in patent litigation, severance of an issue of law for determination prior to trial would not necessarily result in the reduction of time and expense. In another case, a judge remarked that such practice might lead to "a multiplicity of appeals and excessive costs". Worse still, the trial on the merits might be delayed and important evidence lost due to death or the fading memory of a witness.
All of this was not to say that a Markman-type order might not, in appropriate circumstances, be available under the rule. But this appeared to be a relatively straightforward patent infringement case and there was no evidence that severance of the claim construction issues would save any time or expense.
It was not clear that promoting settlements is even an unstated objective of rule 107. There are other rules which are expressly for the promotion of out-of-court settlements and these could be invoked herein.
As was urged by appellants, the impugned order represents a novel, fundamental change in Canadian patent law practice and was one that should be the subject of some debate by the intellectual property bar and perhaps submitted for consideration by the Court's rules committee.
statutes and regulations judicially
considered
Exchequer Court General Rules and Orders, R. 149.
| Federal Court Rules, C.R.C., c. 663, RR. 419, 474, 475, 480(1)(b),(c). |
| Federal Court Rules, 1998, SOR/98-106, rr. 3, 107, 220, 221, 257-267, 279, 353(2)(c), 386-391, 419-422. |
| Federal Courts Act, R.S.C., 1985, c. F-7, ss. 1 (as am. by S.C. 2002, c. 8, s. 14), 27 (as am. idem, s. 34). |
cases judicially considered
applied:
Piercy v. Young (1880), 15 Ch. D. 475; Tilling v. Whiteman, [1980] 1 A.C. 1 (H.L.); Illva Saronno S.p.A. v. Privilegiata Fabbrica Maraschino "Excelsior", [1999] 1 F.C. 146; (1998), 84 C.P.R. (3d) 1 (T.D.); Morenco Industries Inc. v. Creations 2000 Inc. (1984), 1 C.P.R. (3d) 407 (F.C.T.D.); Rohm & Haas Co. of Canada Ltd. v. Sherwin-Williams Co. of Canada Ltd. et al., [1956] Ex. C.R. 274; (1956), 25 C.P.R. 1; Berliner Gram-O-Phone Co. v. Columbia Phonograph Co. (1908), 12 Ex. C.R. 240.
considered:
Markman v. Westview Instruments Inc., 517 U.S. 370 (1996).
referred to:
Reza v. Canada, [1994] 2 S.C.R. 394; (1994), 116 D.L.R. (4th) 61; 22 Admin. L.R. (2d) 79; 21 C.R.R. (2d) 236; 24 Imm. L.R. (2d) 117; 167 N.R. 282; 72 O.A.C. 348; Free World Trust v. Électro Santé Inc., [2000] 2 S.C.R. 1024; (2000), 194 D.L.R. (4th) 232; 9 C.P.R. (4th) 168; 263 N.R. 150; Whirlpool Corp. v. Camco Inc., [2000] 2 S.C.R. 1067; (2000), 194 D.L.R. (4th) 193; 9 C.P.R. (4th) 129; 263 N.R. 88; Polansky Electronics Ltd. v. AGT Ltd. (2001), 277 A.R. 43; [2001] 5 W.W.R. 603; 90 Alta. L.R. (3d) 3; 5 C.P.C. (5th) 106; 11 C.P.R. (4th) 7 (C.A.); Flores v. Union Pac. R.R., 1996 U.S. App. LEXIS 31117.
APPEAL from a Trial Division order, ([2003] 4 F.C. 1012; (2003), 27 C.P.R. (4th) 274; 234 F.T.R. 312) allowing for construction of a patent claim prior to the trial of an action for infringement. Appeal allowed.
appearances:
David W. Aitken for appellants.
Ronald E. Dimock and Michael D. Crinson for respondents.
solicitors of record:
Osler, Hoskin & Harcourt LLP, Ottawa, for appellants.
Dimock Stratton Clarizio LLP, Toronto, for respondents.
The following are the reasons for judgment rendered in English by
[1]Stone J.A.: This appeal from an order of the Trial Division dated May 28, 2003 [[2003] 4 F.C. 1012], raises two issues for determination. The first is whether this Court should interfere with the order below given that it is discretionary in nature. The other is whether the learned Motions Judge erred in permitting the construction of a patent claim to be determined separately before trial of the merits.
[2]The order was made pursuant to rule 107 of the Federal Court Rules, 1998 [SOR/98-106]. Rule 107 reads:
107. (1) The Court may, at any time, order the trial of an issue or that issues in a proceeding be determined separately.
(2) In an order under subsection (1), the Court may give directions regarding the procedures to be followed, including those applicable to examinations for discovery and the discovery of documents.
[3]As the rule calls for the exercise of judicial discretion, the order should not be interfered with unless it is evident that in making it the judge failed to give "sufficient weight to all relevant considerations": Reza v. Canada, [1994] 2 S.C.R. 394, at page 404. It is by this standard that the decision below should be reviewed. For the reasons which follow, it appears that in making the order the Motions Judge did not give sufficient consideration to all relevant considerations.
[4]The issue before the Motions Judge was whether the construction of certain language in claim 1 in Canadian Letters Patent No. 2106950 for a "Wood Fibre Debris Processor", should be hived off from the action for infringement and dealt with separately prior to the trial of the merits. The construction issues involve the expressions "discs spatially and radially disposed" and "wood fibre debris abrader means disposed on the circumferences" in claim 1(d), (e), (f) and (g). Claim 1 reads in full:
WHAT IS CLAIMED IS:
1. A wood fibre debris processor comprising:
(a) an enclosed hollow frame;
(b) at least one rotatable first type abrader shaft disposed laterally across an interior of the frame;
(c) at least one rotatable second type abrader shaft disposed laterally and adjacent to the first type abrader shaft across the interior of the frame, said second type abrader shaft being rotationally disposed at an elevation higher than the first type abrader shaft;
(d) at least two first discs spatially and radially disposed on the first type abrader shaft;
(e) at least two second discs spatially and radially disposed on the second type abrader shaft, the spaced positions of the plurality of first discs on the first type abrader shaft being offset relative to the spaced positions of the plurality of second discs on the second type abrader shaft, a portion of the proximate circumferences of the plurality of first discs and the second discs intersecting a common plane between the first discs and the second discs;
(f) at least one respective first wood fibre debris abrader means disposed on the circumferences of each of the first discs of the first type abrader shaft; and
(g) at least one respective second wood fibre debris abrader means disposed on the circumferences of each of the second discs of the second type abrader shaft.
[5]The rule 107 motion was brought in the context of a patent suit which was commenced on August 12, 2002 in which the infringement of the appellants' rights is alleged. As noted by the Motions Judge, the pleadings in the action were completed on December 9, 2002. By March 2003 the parties had filed and served their respective lists of documents, produced documents for discovery and agreed that the issue of remedy should be tried separately once the Court had determined the issue of liability for infringement. The next logical step, say the appellants, was to proceed to examination for discovery. It seems that in the short history of the litigation prior to the filing of the rule 107 motion, no contested interlocutory motions arose between the parties.
[6]The rule 107 motion was supported by an affidavit in accordance with paragraph (2)(c) of rule 353. The affidavit had attached to it a copy of the patent in suit as well as a copy of a drawing and a photograph of the alleged infringing device. This device, the affidavit states, "has drums with lugs, having debarking teeth attached to the drum" which raises the issue of "whether the drum with lugs. . . is a debarker comprising shafts with discs".
[7]In addition, the affidavit suggests that the chances of settlement would be improved by early construction of the language in claim 1. This is evident from paragraphs 4, 6, 7 and 10 of the affidavit:
4. Without settlement, patent infringement actions in the Federal Court of Canada take many years to be resolved. In many patent cases, an early determination of claim construction issues will facilitate settlement.
. . .
6. A significant barrier to settlement was the fact that the issue of claim construction was unresolved.
7. If, early in the litigation, the claims had been construed, the parties could have better determined the relative merits of their positions. The chances of success for one party or the other would have been better ascertainable and assessed by each. . . .
. . .
10. An early decision on the meaning of key terms in claims will provide parties in patent cases with a better view of their likelihood of success. Consequently, such an early decision on claim construction will promote settlement of patent cases that will otherwise take years to reach trial or settle.
[8]The Motions Judge first noted that a procedure of this kind has been available in the United States patent litigation ever since the decision of the Supreme Court of the United States in Markman v. Westview Instruments Inc., 517 U.S. 370 (1996). He then referred to jurisprudence of the Supreme Court of Canada and to other jurisprudence to the effect that claim construction is "antecedent" and "the key starting point" to the determination of infringement and validity (Free World Trust v. Électro Santé Inc., [2000] 2 S.C.R. 1024; Whirlpool Corp. v. Camco Inc., [2000] 2 S.C.R. 1067; Polansky Electronics Ltd. v. AGT Ltd. (2001), 277 A.R. 43 (C.A.). The Motions Judge concluded at paragraphs 13 and 14:
Without settlement, patent infringement actions in this Court often take many years to be resolved. I believe that this suggested new procedure might give an opportunity to parties to speed up the litigation in such actions. If, early in the litigation, the claims are construed, the parties can possibly better determine the relative merits of their positions. The chances of success for one party or the other could be better ascertained and assessed by each. The argument of infringement could significantly be strengthened, or weakened, depending on the claim construction arrived at by the Court. Likely, the argument of invalidity could be similarly improved or weakened.
Of course, there is no guarantee that such a process will succeed and in fact alleviate a patent trial from its never ending motion proceedings. However, I strongly believe that if the parties work together to get the claim construction issue out of their way, it can only be beneficial for all parties. To this effect, I think it is appropriate that this case should be dealt with as a specially managed proceeding and that the issue of a claim construction be dealt with by the case management judge in collaboration with the parties.
[9]Neither side suggests that Markman, supra, by itself, is of any assistance in determining whether rule 107 was intended to be applied in this kind of case. Markman held that claim construction by a trial judge alone does not run afoul of the Seventh Amendment of the United States Constitution which preserved the right of a litigant in a suit at common law to a trial by jury for claims in excess of 20 dollars. As a result of Markman, a practice has developed in United States patent litigation where a District Court judge determines the construction of patent claims before trial. Under that practice, the construction may only be challenged by way of appeal following the trial for alleged infringement. It appears that an interlocutory appeal to the Court of Appeals for the Federal Circuit is not available on an issue of claim construction: Flores v. Union Pac. R., 1996 U.S. App. LEXIS 31117. By contrast, a judgment of the Federal Court on a question of law determined before trial may be appealed to this Court as of right pursuant to the Federal Courts Act, R.S.C., 1985, c. F-7 [s. 1 (as am. by S.C. 2002, c. 8, s. 14)], section 27, as amended by the Courts Administration Service Act, S.C. 2002, c. 8, section 34.
[10]Rule 107 was adopted in 1998 as part of the general revision of the former rules of the Federal Court of Canada. The rule contemplates bifurcation of an issue or issues for purposes of trial. Prior to this revision, former paragraphs 480(1)(b) and (c) [of the Federal Court Rules, C.R.C., c. 663] provided for bifurcation of "any question as to the damages flowing from any infringement of any right" or of "any question as to the profits arising from any infringement of any right". In addition, paragraph 474(1)(a) [of the former Rules] vested the Court with a general discretion to "determine any question of law that may be relevant to the decision of a matter", the determination to be "final and conclusive for the purposes of the action subject to being varied upon appeal." Moreover, former Rule 475 permitted the parties to an action or proposed action to "concur in stating questions arising therein in the form of a special case for adjudication before trial or in lieu of trial". The essence of old Rules 474 and 475 is captured by current rule 220. Finally, questions of law could also be raised for determination before trial under former Rule 419 which provided for the striking out of pleadings on various grounds. Similar relief is now provided for in rule 221.
[11]Rules allowing the bifurcation of a trial have been a feature of the Rules of this Court and of the Exchequer Court for many years. Inspiration for such rules probably derived from the rules of the English courts. Quite early on, those courts took care to confine severance of issues to exceptional circumstances, being conscious of the wisdom of trying all of the issues together. Thus in Piercy v. Young (1880), 15 Ch. D. 475, at page 479, Jessel M.R. observed that:
The object of the Judicature Act was to try all disputes together, and it was considered a beneficial object. Separate trials of separate issues are nearly as expensive as separate actions, and ought certainly not to be encouraged, and they should only be granted on special grounds.
While the present case is to be decided under our own Rules, we should not lightly ignore the caution that: "Preliminary points of law are too often treacherous short cuts. Their price can be . . . delay, anxiety and expense": Tilling v. Whiteman, [1980] 1 A.C. 1 (H.L.), per Lord Scarman, at page 25. This caution would appear to apply with even greater force to the rule 107 motion where there was no agreement as to the relevant facts.
[12]As was stated by Evans J. (as he then was) in Illva Saronno S.p.A. v. Privilegiata Fabbrica Maraschino "Excelsior", [1999] 1 F.C. 146 (T.D.), at paragraph 12, "rule 107 gives the Court more flexibility in the sense that, unlike the former Rule 480, the Court may now order a severance of issues even though the severed issues may not be suitable for determination on a reference because, for example, they raise issues of both fact and law". It is not to say that in both the Federal Court and Exchequer Court no attempt was ever made in patent litigation to sever an issue of law for determination before trial. However, all such attempts have failed. In Morenco Industries Inc. v. Creations 2000 Inc. (1984), 1 C.P.R. (3d) 407 (F.C.T.D.), the defendant sought an order under former Rule 474 to have an issue of infringement determined as a preliminary point of law before trial. Earlier, in Rohm & Haas Co. of Canada Ltd. v. Sherwin-Williams Co. of Canada Ltd. et al., [1956] Ex. C.R. 274, the Exchequer Court refused to direct an issue for determination prior to trial of whether certain allegations in the plaintiff's pleadings would, if established, constitute infringement of that party's patent rights. Earlier still, in Berliner Gram-O-Phone Co. v. Columbia Phonograph Co. (1908), 12 Ex. C.R. 240, the Exchequer Court refused to set down for determination a question of whether the issue of infringement had already been determined by a Circuit Court in the United States. The motion was brought pursuant to Rule 149 of the Exchequer Court General Rules and Orders which permitted a point of law on the pleadings to "be set down for hearing and disposed of at any time before the trial".
[13]It remains, nevertheless, to determine whether in the case at bar the Motions Judge gave sufficient weight to all relevant considerations in making the order under appeal. The appellants submit that such weight was not given in this case. They assert that the record contains no evidence that the order will produce a saving of time and expense. On the contrary, they say, even with the assistance of a case management judge, the issues of claims construction will likely require a significant amount of time to resolve. There is currently no specific procedure under our Rules for placing relevant opinion evidence of persons skilled in the art before the Court at the trial of the severed issue. Moreover, such evidence would most likely call for cross-examination by the opposing party. The appellants also maintain that the construction of a claim prior to trial would almost certainly result in an appeal to this Court, with consequent delay and expense. They assert that it could also result in a "sterile exercise" because examination for discovery before the trial on the merits may cause different language of claim 1 to come into play. They also assert that they ought first to have discovery of the respondents so as to determine whether a proper interpretation of the language of the claims would allow the substitutability of a non-essential element (see Free World Trust, supra, at paragraph 52). In any event, the appellants say that there was insufficient evidence that the bifurcation order sought by the respondents would increase the likelihood of settlement. Finally, they submit that the adoption of a Markman-type procedure would represent such a fundamental change to Canadian patent law practice that it ought not to be adopted in the absence of an express provision in our Rules.
[14]The respondents submit that the order was properly made, and that orders of this kind can only redound to the overall benefit of patent litigants and to the Court itself. Under the current practice, issues of claim construction are not addressed by the parties until after expert opinions are exchanged pursuant to rule 279 shortly before the trial. With claim construction in hand at an earlier stage, the parties would be better positioned to assess the relative strengths and weaknesses of their cases. This could only promote early settlement with consequent saving of scarce judicial resources and of time and expense for the litigants. The respondents assert that all the necessary facts appear in the supporting affidavit and in any event that the pleadings and the nature of the case itself (a patent case) provide all the information required to be placed before the Motions Judge on a rule 107 motion. In the respondents' submission, the chances that the first trial would amount to a sterile exercise would be reduced with the help of a case management judge by enlarging the range of terms to be construed.
[15]In Illva Saronno, supra, Evans J. invoked the language of rule 3 for assistance in interpreting the scope of rule 107. Rule 3 requires that the Federal Court Rules, 1998 be interpreted and applied so as to secure "the just, most expeditious and least expensive determination of every proceeding on its merits". Illva Saronno involved a question of whether, pursuant to rule 107, the remedial issues should be severed and tried separately after the trial on the liability for infringement of the plaintiff's trade-mark rights. Evans J. concluded, at paragraph 20, that the moving party had failed to discharge "the burden of establishing on the balance of probabilities that savings of expense and time are sufficiently likely, nor the interest of a just disposition of the proceeding on its merits [liable] to be advanced, as to justify departing from the general principle that all issues in a proceeding should be dealt with together". In coming to that conclusion, Evans J. applied the test he had formulated at paragraph 14:
On a motion under rule 107, the Court may order the postponement of discovery and the determination of remedial issues until after discovery and trial of the question of liability, if the Court is satisfied on the balance of probabilities that in light of the evidence and all the circumstances of the case (including the nature of the claim, the conduct of the litigation, the issues and remedies sought), severance is more likely than not to result in the just, expeditious and least expensive determination of the proceeding on its merits.
[16]Although Evans J. did not focus on the significance of every word in rules 3 and 107, the word "determined" in both rules appears to indicate that rule 107 was designed to assist the Court in achieving the just, expeditious and least expensive determination of the proceeding on the merits rather than to assist the parties to reach an out-of-court settlement of their dispute.
[17]The intent of rule 3 is not only to secure the most expeditious and least expensive determination but also, and as importantly, the "just" determination of the proceedings on its merits. In the case at bar it is not apparent that sufficient attention was given to this factor, or that, assuming a saving of time and expense, whether the appellants would suffer some injustice under the order. The appellants may lose the advantage of having the whole of the action tried at the same time by the same judge. Issues of claim construction and infringement are closely interwoven even though, as has been held, it is wrong to construe a patent "with an eye on the allegedly infringing device in respect of infringement": Whirlpool Corp., supra, at paragraph 49. Nevertheless, the claim language must be read in an informed and purposive way: Free World Trust, supra, at paragraph 31(e). Again, as the appellants assert, the supporting affidavit provides no evidence specific to this particular piece of litigation with respect to how long discoveries are expected to last, or how long the trial is expected to take. Hence there is uncertainty as to the extent to which the duration of discoveries and trial will be reduced by the rule 107 order.
[18]The courts in patent cases have expressed concern that severance of an issue of law for determination prior to trial on the merits would not necessarily save time and expense. This concern was first expressed in Berliner Gram-O-Phone, supra, where Riddell J., sitting as a judge pro hac vice of the Exchequer Court, noted at pages 241-242 that the case was such "that an appellate Court would be called upon to deal with one branch of the case while another part would be in the course of being dealt with elsewhere, a uselessly costly and inconvenient practice". Much the same point was made by Cameron J. in Rohm & Haas, supra, at pages 278 and 279, where he feared "a multiplicity of appeals and excessive costs would follow" from severance of a single issue of infringement with attendant "unnecessary delay and expense". This concern was mirrored yet again in the judgment by Dubé J. in Morenco, supra, at page 410. It is a valid concern. Not only might time and expense not be saved in this case, but the trial on the merits would be delayed with the possible consequence that important evidence might be lost due to the death or fading memory of a witness. Considerations such as these are worthy of serious reflection on a motion to bifurcate under rule 107.
[19]It is not to suggest that a Markman-type order would not be available in any circumstances under the rule which, admittedly, is broadly phrased. Rather, the present case seems to involve a fairly simple and relatively straightforward issue of infringement. As has been noted, the action proceeded without apparent difficulty from its inception in August 2002 until March 2003. In the absence of evidence to the contrary, one might infer that the action would continue to proceed without difficulty, that examinations for discovery, the exchange of expert opinions and the trial would be accomplished within a relatively short period of time depending on the urgency with which the parties treat the matter. The parties indicated at the hearing that a trial of all issues would likely require one week of court time. Although patent cases are time consuming, some consume more time than others depending on their complexity. There is no evidence that severance of the issues of claim construction would save time and expense in the case at bar.
[20]A further observation seems warranted. The affidavit evidence lays much stress on improving the prospect of settlement by allowing the order to stand, for not only would the parties to this litigation benefit but so too would other patent litigants. That evidence did not escape the attention of the Motions Judge. It is not altogether clear, however, that promoting settlement is even an unstated objective of rule 107, even though an out-of-court settlement could well be a welcomed by-product of an order of this kind. Counsel for the appellants points out that Part 4 (rules 257-267) of our Rules makes express provision for promoting of out-of-court settlements. Other rules appear to have the same objective in view, as, for example, the rules governing "Dispute Resolution Services" in Part 9 (rules 386-391) and "Offer to Settle" in Part 11 (rules 419-422). If, as the affidavit evidence suggests, the promotion of a possible out-of-court settlement was an objective of rule 107 it is important to bear in mind that while rule 107 is silent in that regard these other rules could be invoked to promote early settlement with consequent saving of time and expense for the litigants and for the Court.
[21]The appellants assert that if the order of May 28, 2002 is allowed to stand despite the lack of evidence that it will save time and expense, and despite the uncertainty as to the specific questions of patent construction that will emerge after examinations for discovery are completed, there will be no effective bar to Markman-type orders in all patent cases. They say that this will surely produce a novel and fundamental change in current Canadian patent law practice, and that such a change ought not to be made by the courts on an ad hoc basis. The point is not without substance. A change of this kind might better be made the subject of some debate within the intellectual property bar, with a view to possibly submitting it for consideration to the Court's rules committee. If such were done, the procedure would receive careful and thoughtful consideration before being adopted by the Court.
[22]For the foregoing reasons, the appeal should be allowed with costs here and in the Court below and the order of May 28, 2003 set aside.
Rothstein J.A.: I agree.
Sharlow J.A.: I agree.