Judgments

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T-2116-80
Catalyst Research Corporation (Plaintiff) v.
Medtronic, Inc., and Medtronic of Canada Ltd. (Defendants)
Trial Division, Mahoney J.—Ottawa, January 8 and 21, 1981.
Practice Service — Application by defendant to set aside
service on it of statement of claim and ex parte order author izing service ex juris — Whether, by joining in an application for security for costs, applicant has waived its right to bring motion — Whether applicant having approbated may now reprobate.
Defendant Medtronic, Inc. applies for leave to file a condi tional appearance and for an order setting aside the service of the statement of claim on it and the ex parte order authorizing service ex juris. The question is whether, by joining in an application for security for costs, applicant has waived its right to bring this motion. In other words, applicant has approbated and now seeks to reprobate without having first reprobated. Applicant argues that in any event, there is no good arguable case of infringement by it of plaintiff's patents. The invention relates to batteries which are components in pacemakers. The batteries are sold by applicant to Medtronic of Canada Ltd. which assembles the pacemakers.
Held, the application is dismissed. Having invoked this Court's jurisdiction for its own benefit, the applicant cannot now challenge that jurisdiction. Having approbated, it has waived its right to reprobate. A court has to assume that counsel is under no undisclosed disabilities either as to his authority to represent a party or as to his knowledge of his client's affairs in so far as they are material to his representa tion of that client in the court. In any event, the transfer of ownership, at Toronto International Airport, evidenced by the billing invoice mailed by applicant to Medtronic of Canada Ltd. is a sale by the applicant in Canada and an infringement by it of the plaintiff's Canadian patents.
Antares Shipping Corp. v. The "Capricorn" [1977] 2 S.C.R. 422, distinguished. The Dunbar and Sullivan Dredging Co. v. The "Milwaukee" (1907) 11 Ex.C.R. 179, distinguished.
APPLICATION. COUNSEL:
Ross G. Gray, Q.C. and Glen A. Bloom for
plaintiff.
George E. Fisk for defendants.
SOLICITORS:
Herridge, Tolmie, Ottawa, for plaintiff.
Cowling & Henderson, Ottawa, for defend ants.
The following are the reasons for order ren dered in English by
MAHONEY J.: The defendant, Medtronic, Inc., applies for leave to file a conditional appearance for the purpose of objecting to service of the statement of claim on it and an order setting aside that service and the ex parte order, made May 13, 1980, authorizing service ex juris. The application is made on the basis that the allegations in the statement of claim, assuming them true and proven, and the other material before the Court do not disclose "a good arguable case" that the appli cant has infringed the plaintiff's patents.' A pre liminary question is whether, by joining in an application for security for costs, Medtronic, Inc. has waived its right to bring this present motion. Counsel were unable to refer me to precedents directly on the point and I have been unable to locate any.
The factual situation in Antares Shipping Corp. v. The "Capricorn" 2 was extremely complicated and need not be considered in any detail. It was an admiralty action; this action is based on the alleged infringement of Canadian patents. Clearly, there is no doubt that the forum conveniens for this action is this Court. Bearing that very big difference in mind, the following passage from the judgment of Ritchie J., at page 450, gives some guidance.
When all these circumstances are considered in conjunction with Portland's active participation in the action, it appears to me that it would take some cogent evidence of a more conven ient alternative forum in order to justify the Federal Court in refusing to exercise its discretion by ordering that the respond ent Companies be served with notice of the Declaration outside of Canada.
Composers Authors and Publishers Association of Canada
Ltd. v. International Good Music, Inc. [1963] S.C.R. 136.
2 [1977] 2 S.C.R. 422.
Portland's participation is discussed at page 454. The crucial fact appears to have been that Port- land had, even before the plaintiff had sought leave to serve it ex juris, secured the release of the Capricorn by appearing under protest and apply ing to have the Court fix bail. The substitution of the bond for the ship at Portland's instance
was a step in the cause, and thereby a waiver of the protest.
The words last quoted were taken directly from the decision of the Exchequer Court in The Dunbar and Sullivan Dredging Company v. The "Milwaukee". 3
A distinction is that in the Capricorn and Mil- waukee cases, the objecting party had first protest ed the jurisdiction of the Court, then invoked that jurisdiction for its benefit, i.e., obtaining the physi cal possession of its ship, and then sought, but was not permitted, to pursue its initial protest. In other words, the unsuccessful party had reprobated, then approbated and sought to reprobate again. Here the applicant approbated and now seeks to repro bate but did not reprobate in the first place. It might be argued that the applicant's position is weaker than that of the unwilling admiralty defendants because it did not even put the Court and plaintiff on notice, as they did, before approbating.
It did not do so because its counsel did not, until he had the opportunity to attend on his client in Minneapolis, obtain the information about its activities that led him to conclude that this application should be brought. That reason, or excuse, cannot be given effect to the applicant's advantage. A court simply cannot function unless it can assume that counsel is under no undisclosed disabilities either as to his authority to represent a party or as to his knowledge of his client's affairs in so far as they are material to his representation of that client in the court. The applicant cannot now be heard to say that when its counsel applied for, and obtained, the order directing the plaintiff to provide for security for costs, he was not fully apprised of all material facts.
3 (1907) 11 Ex.C.R. 179 at p. 202.
The applicant argues, and I agree, that any defendant served has a legitimate interest in obtaining an order for security for costs when sued by a plaintiff resident outside the jurisdiction of the court. That is so even when the defendant has good cause to object to service of the statement of claim because it would ordinarily expect to be entitled to its costs if it succeeded in its objection and, unless security had been given, the court would be powerless to enforce its award. It remains that, having invoked this Court's jurisdic tion for its own benefit, the applicant cannot now challenge that jurisdiction. Having approbated, it has waived its right to reprobate.
Had I not come to that conclusion, I should still have denied the application because the material before me does disclose a good arguable case for infringement of the plaintiff's Canadian patents by the applicant. The invention relates to batteries which are components in pacemakers. The pace makers are assembled in Canada by the other defendant, Medtronic of Canada Ltd., a wholly- owned subsidiary of the applicant. They are assembled from components which include allegedly infringing batteries bought from the applicant.
The invoice, entitled "Canada Customs Invoice", which accompanies shipments stipulates "F.O.B. Minneapolis". However, a billing invoice, mailed by the applicant to Medtronic of Canada Ltd. when the shipment is dispatched by air express, stipulates:
The ownership of and the legal and beneficial title to, the risk of loss, and the right to possession and control over, the goods shall remain with Medtronic, Inc. until the shipment reaches the port of entry in the country of destination or U.S. posses sion and all documents related to the goods have been trans ferred to purchaser, notwithstanding any other pricing or ship ping terms. [The emphasis is mine.]
It is fairly arguable that the billing invoice governs the transaction and, if so, that a transfer of ownership at the customs shed, Toronto Inter national Airport, is a sale by the applicant in Canada and an infringement by it of the plaintiff's Canadian patents. Having arrived at that conclu-
sion, I do not find it necessary to deal with the plaintiffs argument that the material before me discloses an allegation of infringement by the applicant inducing Medtronic of Canada Ltd. to infringe; that it discloses an agreement or concert ed action by them to infringe, nor with the implications of the participation of the applicant's personnel in promotional activities in Canada.
ORDER
The application is dismissed with costs.
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