T-1121-76
Dominion Mail Order Products Corporation
(Plaintiff )
v.
Benjamin Weider (Defendant)
Trial Division, Mahoney J.—Ottawa, June 1 and
4, 1976.
Patents—Practice—Defendant seeking order dismissing
action to impeach its patent in view of action for infringement
and passing off of same patent in Ontario Supreme Court
brought by defendant, or an order staying these proceedings
pending disposition of Ontario action—Patent Act, R.S.C.
1970, c. P-4, s. 62—Exchequer Court Act, R.S.C. 1970, c.
E-11, s. 21—Federal Court Act, ss. 20, 50(1).
Defendant sought an order dismissing this action to impeach
its patent as redundant, vexatious and an abuse of process in
light of an action for infringement of the same patent and for
damages for passing off brought by defendant against plaintiff
in the Supreme Court of Ontario, and, alternatively, an order
staying these proceedings pending disposition of that action.
Held, the application is dismissed. The Ontario action sought
damages for passing off, likely unavailable in this Court. It
asserts that the patent is, and always has been, void and invalid.
Section 20 of the Federal Court Act grants to the Trial
Division exclusive original jurisdiction in all cases in which it is
sought to impeach or annul a patent. Plaintiff is pursuing here
a right unavailable in Ontario, which alone is a compelling
reason not to dismiss the action. While plaintiff has the right to
seek impeachment, it is unclear that it is seeking a remedy
which, from its own point of view, is any different than that
which it can obtain in the Ontario action. And, if the infringe
ment action is dismissed for some reason other than invalidity
of defendant's patent, the issue raised in this action will not be
resolved, even inter partes. As a general principle when seeking
a stay, it is not enough to show that proceedings have been
taken in another jurisdiction on the same subject matter. It
must be proved by the applicant that there is, in fact, a
vexation; he must satisfy the Court that the continuance of the
action would work an injustice because it would be oppressive,
but also that no injustice to the plaintiff would arise. While it
might be logical to grant a stay, as the Ontario Court could
probably resolve more questions between the parties, this is a
genuine onus, and not a matter to be dealt with on a simple
balance of convenience. Plaintiff's right of suit should not
lightly be interfered with; priority as to time in bringing the
proceedings is in no way decisive. Defendant's only substantive
arguments were the similarity of subject matter of the two
suits, and that the Ontario action was started first. Such a
combination is inadequate as a basis for the exercise of judicial
discretion in favour of a stay. However, multiple proceedings
should be avoided, and no court would hesitate, if appropriate,
in using its discretion in awarding costs.
MacDonald v. Vapor Canada (1976) 22 C.P.R. (2nd) 1;
General Foods v. Struthers [ 1974] S.C.R. 98; Sno Jet Ltd.
v. Bombardier Limitée (unreported, T-369-75); Hall De
velopment Company of Venezuela, C.A. v. B. & W. Inc.
[1952] Ex.C.R. 347, applied.
APPLICATION.
COUNSEL:
J. A. Day for plaintiff.
G. A. Macklin and B. E. Morgan for
defendant.
SOLICITORS:
D. F. Sim, Q.C., Toronto, for plaintiff.
Gowling & Henderson, Ottawa, for
defendant.
The following are the reasons for order ren
dered in English by
MAHONEY J.: The defendant seeks an order
dismissing this action to impeach the defendant's
patent as redundant, vexatious and an abuse of the
process of the Court in view of an action for
infringement of the same patent and passing off
pending in the Supreme Court of Ontario, brought
by the defendant against the plaintiff and, in the
alternative, an order staying proceedings in this
action pending disposition of that action. The
Ontario action seeks damages for passing off
which, in my view, in the light of the decision of
the Supreme Court of Canada in MacDonald v.
Vapor Canada Ltd.', would not likely be available
in this Court.
The Ontario action was commenced in February
1976 and the defence therein is dated March 8. It
asserts, inter alfa, that the letters patent in issue
are, and always have been, void and invalid. This
action was commenced March 22, 1976.
1 (1976) 22 C.P.R. (2nd) 1.
In General Foods, Ltd. v. Struthers Scientific
and International Corp. 2 , the Supreme Court of
Canada appears to have held that a judgment of a
provincial Court in an infringement action, declar
ing a patent void, would be effective to avoid that
patent notwithstanding that the Patent Act 3
vested, at the material time, the Exchequer Court
of Canada with jurisdiction in impeachment pro
ceedings. The intention of Parliament, in enacting
section 20 of the Federal Court Act 4 in the follow
ing terms would appear to have been to change
that:
20. The Trial Division has exclusive original jurisdiction ...
(b) in all cases in which it is sought to impeach or annul any
patent of invention.....
The underlined words were not included in section
21 of the Exchequer Court Act 5 , which, with
section 62 of the Patent Act, vested that Court
with jurisdiction in impeachment proceedings.
The plaintiff is pursuing a `right of action in this
Court that is not available to it in the Ontario
Court. That, alone, is a compelling reason not to
dismiss the action. The matter of a stay of pro
ceedings is considerably more complex.
While the plaintiff has the right, if it choses to
pursue it, to seek to impeach the defendant's
patent, it is by no means clear to me that it is
seeking a remedy which, from its own point of
view, is any different from that which it can obtain
in the Ontario action. I cannot put the position any
better than did my brother Addy in his unreported
reasons for order in Sno Jet Ltd. v. Bombardier
Limitée6, dated April 9, 1975 [at page 6]:
The mere fact that a finding in favour of Sno Jet in the
present impeachment action would have a more sweeping effect
in so far as the public is concerned and a permanent effect on
the patent itself, does not constitute sufficient grounds for
refusing to stay the action, if sufficient cause otherwise exists to
do so, for, as between the parties, a dismissal of an infringe
' [1974] S.C.R. 98.
3 R.S.C. 1970, c. P-4, s. 62.
° R.S.C. 1970, (2nd Supp.) c. 10.
R.S.C. 1970, c. E-11.
6 Court No. T-369-75.
ment action on the grounds that the patent was invalid would
have the same effect as a finding that the patent was invalid in
an impeachment action because, in the former case, as between
the parties, the question would be res judicata. Exactly the
same issue has been raised by Sno Jet in both actions, namely,
the issue of the validity of the patent itself, and both Courts
have full power to adjudicate upon that issue, although not for
the same purpose.
A corollary to that proposition is that if the
infringement action is dismissed for some reason
other than the invalidity of the defendant's patent,
e.g., that the plaintiff's device does not infringe the
patent, the issue raised in this action will not be
resolved, even inter partes.
The general principle to be applied was stated
by Thorson P. in Hall Development Company of
Venezuela, C.A. v. B. & W. Inc.' where, after
reviewing numerous authorities, he said:
... on a motion for an order staying proceedings in an action it
is not sufficient to show that proceedings have been taken with
reference to the same subject matter in another country. In
such a case there is no presumption that the action in this
country is vexatious. The applicant for the order must show
that there is vexation in point of fact. The Court should not
lightly interfere with the plaintiffs right of suit and must be
careful to avoid depriving him of benefits and advantages that
might rightfully accrue to him from the suing in both countries.
On the other hand, it will not hesitate to order a stay in a
proper case. To establish that the action is vexatious in point of
fact the applicant for the order of stay must satisfy the Court
not only that the continuance of the action would work an
injustice to the defendant because it would be oppressive to him
but also that the stay would not cause any injustice to the
plaintiff. The onus of proof that these conditions exist lies on
the applicant.
Leaving aside, but recognizing the consideration
that had to be given, the very practical difficulties
that might arise in enforcing a foreign judgment,
the general principles above stated are equally
applicable as between actions brought in different
jurisdictions in a federal state. Most recently the
authorities were reviewed in the Sno Jet case, and
it was concluded, at page 4, that:
Since Sno Jet has the right to institute the action in this
Court, its right to prosecute the action to completion without
delay should not be lightly interfered with and the action
should be stayed only if the ends of justice definitely require it
or where to allow it to continue would constitute an abuse of
the judicial process or where the failure to stay would create a
7 [1952] Ex.C.R. 347 at page 349 ff.
serious prejudice to the other party .... It is clear that priority
as to time in instituting the proceedings is not by any means a
decisive factor but, on the contrary, the decision as to whether
an action should be stayed or not is a matter of judicial
discretion ... and this discretion must be exercised carefully
and on serious grounds after considering all of the circum
stances of the case ....
The power of this Court to stay the action
derives from section 50(1) of the Federal Court
Act 8 which provides:
50. (1) The Court may, in its discretion, stay proceedings in
any cause or matter,
(a) on the ground that the claim is being proceeded with in
another court or jurisdiction; or
(b) where for any other reason it is in the interest of justice
that the proceedings be stayed.
As already stated, the claim in this Court is not
the same claim that is being proceeded with in the
Ontario court. The question is whether there is any
other reason that it is in the interest of justice that
the plaintiff be prevented from proceeding with
this action.
The only substantial reasons advanced by the
defendant are that the subject matter of the two
actions is the same and the Ontario action was
started first. The ratio decidendi of General Foods
v. Struthers is precisely that that combination of
circumstances is not a sufficient basis for the
exercise of judicial discretion in favour of staying
proceedings. At the same time, Mr. Justice Pigeon
did say, at page 109:
... patent owners and their attorneys should bear in mind that
litigants are expected to avoid unnecessary costs and the unrea
sonable multiplication of proceedings is an abuse of the worst
kind that should be discouraged and, if necessary, punished by
the use of judicial discretion in matters subject thereto.
I am confident that neither this nor any other
Court in Canada will hesitate if, in retrospect, it
appears appropriate to make imaginative use of its
discretion in awarding costs—no doubt after inqui
ry into what, if anything, the patent owner, as
distinct from his attorney, in fact had to do with
the decision to multiply proceedings.
There is a genuine, and not merely a notional,
onus on an applicant seeking to interfere with
another's right to pursue a cause of action given
him by law. It is not a matter to be dealt with
8 R.S.C. 1970 (2nd Supp.) c. 10.
simply on a balance of convenience; if it were, I
should probably conclude that, since, as between
the parties, more questions can probably be
resolved in the Ontario action than here, it would
be logical to stay this action. However, it was
incumbent on the defendant to satisfy me that "it
is in the interest of justice" that this action be
stayed: that its continuation would be an abuse of
the judicial process or that the defendant will
somehow be prejudiced and not merely incon
venienced by allowing it to continue. I am not so
satisfied.
ORDER
The application is dismissed with costs.
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