T-1944-81
Corning Glass Works (Plaintiff)
v.
Canada Wire & Cable Company Limited, Sumito-
mo Electric Industries Ltd., and Canada Wire &
Cable Limited doing business as Canstar Com
munications (Defendants)
Trial Division, Walsh J.—Ottawa, December 6
and 12, 1983.
Practice — Discovery — Examination for discovery —
Motion for leave to serve appointment for examination of
non-resident M, as co-inventor of patents and employee of
plaintiff, at Toronto — Other co-inventor and employee
already examined — Plaintiff seeking to quash defendants'
American subpoena for examination of M in U.S.A. — Feder
al Court subpoena would be ineffective against non-resident —
Right to full and complete discovery not overcoming ineffec
tiveness — Defendants arguing precedents inapplicable
because M controlled by plaintiff which is under Court's
jurisdiction — Improper to dismiss action if M failed to
attend — Helping to defeat American motion to quash insuffi
cient justification for order — Whether to quash being issue
for American courts exclusively — Defendants may prove in
U.S.A. subpoena available under Canadian law if M resident
— Trial must not be delayed — Proper to examine under
auspices of American courts — Only one co-inventor ex-
aminable as assignor under R. 465(5) — Normally only one
person examinable for corporation — Further examination in
exceptional case under R. 465(19) occurring infrequently —
Motion dismissed — Federal Court Rules, C.R.C., c. 663, R.
465(5),(12),(19),(20).
According to the affidavit submitted by the defendants, the
plaintiff presented one Dr. Schultz for examination on discov
ery, as an officer of the plaintiff and as a co-inventor of the
subject-matter of certain patents. At the examination, it
became apparent that Schultz had not been present during the
early stages of the plaintiff's optical waveguide programme,
and was not able to supply details of the plaintiff's early
development work. It was alleged that the only person capable
of providing a complete picture of the development work was a
Dr. Maurer, who was also a co-inventor and an employee of the
plaintiff, and was in charge of the plaintiff's programme.
Maurer resided in the United States; therefore, with a view to
obtaining discovery of him in that Country, the defendants
secured a subpoena from an American court.
According to the affidavit filed on behalf of the plaintiff, the
plaintiff gave undertakings, during the examination of Schultz,
to make inquiries of Maurer, and did in fact acquire a consider-
able amount of information in response to questions posed by
the defence. The American subpoena was obtained by means of
ex parte proceedings and, counsel asserted, this was done
before Dr. Schultz's examination had been completed, and
indeed before he had been asked questions about Dr. Maurer's
knowledge. Even so, the subpoena went unserved for more than
six months, during which time the Federal Court issued an
order disposing of all outstanding pre-trial matters, and a
subsequent order (pursuant to an application by the plaintiff)
fixing a date for trial. Counsel for the plaintiff maintained that
at the time when the trial date was set, the defendants did not
mention any desire to examine Maurer.
A date for the examination of Maurer in Rochester, New
York was arranged. Defence counsel travelled to Rochester but,
on the appointed day, was advised that the plaintiff's American
counsel, acting on behalf of Maurer, had brought a motion to
have the subpoena quashed.
In the present motion, the defendants sought leave to serve
an appointment for the examination of Dr. Maurer, as a
co-inventor and an employee of the plaintiff, at Toronto. When
the matter came on for hearing, the motion to quash had not
yet been heard in the United States.
Held, the motion is dismissed.
Rule 465(5) permits the assignor of a patent to be examined
for discovery; however, the word "assignor" appears in the
singular in that provision, and there is nothing to indicate that
if the situation is one in which there are co-inventors, both of
the co-inventors may be examined. Normally, under our proce
dure, only one person may be examined on behalf of a corpora
tion, and in the instant case the defendants have already
examined Schultz in that capacity. While Rule 465(19) does
allow the Court, for special reason in an exceptional case, to
order a further examination after a party or assignor has been
examined, that provision is used infrequently.
In any event, the real obstacle to the granting of the plain
tiff's request is the fact that a subpoena issued by this Court
requiring a non-resident to come to Canada to be examined
would not be effective, even if conduct money were tendered.
And inasmuch as the plaintiff is, in the United States, resisting
the attempt to examine Dr. Maurer, it is indeed unlikely that
Dr. Maurer would come to Canada for an examination. Assert
ing (as the defendants do) that the parties are entitled to full
and complete discovery does not answer the question of how an
order of this Court for the examination of Maurer could be
made effective in the absence of consent. In being an employee,
and not just an inventor, Maurer is no different from the
potential examinees in other cases wherein orders for the
examination of persons not in Canada were refused; and the
Court rejects the defendants' argument that, as an employee,
Maurer is subject to the control of the plaintiff, which in turn is
subject to the jurisdiction of this Court, and that the cases
alluded to are therefore inapplicable to the circumstances of the
case at bar. Furthermore, in view of those circumstances and of
the case law, the sanction of dismissing the action under Rule
465(20) would apparently not be a proper response in the event
of a failure by Maurer to attend in Canada for examination.
The defendants argue that even if the order sought could not
be enforced by the Court, it would nonetheless help them to
defeat the plaintiff's motion to quash the American subpoena.
This, however, is not sufficient to justify the issuing of such an
order. Whether the subpoena should be quashed is an issue
within the exclusive jurisdiction of the American courts. If, as
the defendants assert, the motion to quash is based upon the
contention that a Canadian court would not have issued the
subpoena even if Maurer had been a Canadian resident, the
defendants may respond by demonstrating to the American
courts that Canadian law is otherwise, which it most definitely
is. They should not find it difficult to prove Canadian law in
the usual way.
It is essential that the trial of this action not be delayed.
Examining Maurer under the auspices of the American courts,
as the defendants quite properly attempted to do, is the proce
dure which was endorsed in the Sternson case. Should the
defendants still consider it necessary to examine Maurer, they
will have to take, in the United States, whatever steps they
deem advisable in order to expedite the hearing of the motion
pending in that Country.
CASES JUDICIALLY CONSIDERED
FOLLOWED:
Lido Industrial Products Limited v. Teledyne Industries,
Inc. et al., [1979] 1 F.C. 310; 41 C.P.R. (2d) 1 (C.A.);
Sternson Limited v. CC Chemicals Limited, [1982] 1
F.C. 350; 124 D.L.R. (3d) 76 (C.A.); Xerox of Canada
Limited et al. v. IBM Canada Limited, [1976] 1 F.C.
213; 24 C.P.R. (2d) 175 (T.D.), affirmed in [1976] 2
F.C. 781 (C.A.).
CONSIDERED:
Procycle, Inc. et al. v. Deflectaire Corporation et al.
(1981), 58 C.P.R. (2d) 153 (F.C.T.D.); Textron Canada
Limited v. Rodi & Wienenberger Aktiengesellschaft,
[1973] F.C. 667; 10 C.P.R. (2d) 9 (T.D.).
COUNSEL:
R. T. Hughes for plaintiff.
S. Block for defendants Canada Wire &
Cable Company Limited and Canada Wire &
Cable Limited.
SOLICITORS:
Sim, Hughes, Toronto, for plaintiff.
Rogers, Bereskin & Parr, Toronto, for
defendants Canada Wire & Cable Company
Limited and Canada Wire & Cable Limited.
The following are the reasons for order ren
dered in English by
WALSH J.: The first portion of this motion
merely sought permission to file a further amended
statement of defence and counterclaim and further
amended particulars of objection which merely
added the name Canada Wire & Cable Limited
doing business as Canstar Communications, to
defendant, Canada Wire & Cable Company Lim
ited having already been so named, and added
some details to the particulars of objection. This
was granted by consent. The contested portion of
the motion sought leave pursuant to Rule 465 of
the Federal Court Rules [C.R.C., c. 663] for
defendants to serve an appointment for the exami
nation for discovery at Toronto, Ontario, on a date
to be determined, of Robert D. Maurer, a co-
inventor of Canadian Patents Nos. 951,555 and
881,078 and an employee of the plaintiff, on the
solicitors of plaintiff and that the requirement of
appropriate conduct money be waived, the conduct
money to be costs in the cause should plaintiff
succeed at trial. The affidavit submitted in support
of the motion sets out that plaintiff offered Doctor
Peter C. Schultz for discovery as an officer of the
plaintiff and as a co-inventor of the said patents.
His discovery continued for three days in February
and was continued in April and in June. From the
discovery it appeared that he was not present
during the early stages of plaintiff's optical wave-
guide program and was unable to detail plaintiffs
early development work. Doctor Robert D. Maurer
as a co-inventor of said patents was in charge of
plaintiff's optical waveguide program and alleged
ly the only witness who could provide defendants
with the complete picture of plaintiff's develop
ment work. Procedures were started in the United
States to obtain discovery of him where he resides.
After considerable correspondence with the United
States counsel a subpoena form was obtained and
it was arranged that his deposition would take
place on November 11, 1983, in Rochester, New
York. On or about November 8, defendants' coun
sel was advised that Doctor Maurer's counsel were
seeking a one-week adjournment to November 17,
1983, which was agreed to. On November 16
defendants' counsel went to Rochester. On the
morning of the 17th, a half hour after the appoint
ed time for the commencement of the examination,
he was advised that local counsel had just been
served with a notice of motion and supporting
documents by the U.S. counsel for Corning Glass
Works for an order quashing the subpoena.
An affidavit filed by counsel for plaintiff states
that during the examination for discovery of
Doctor Schultz, plaintiff undertook on a number
of occasions to make inquiries of the said Doctor
R. D. Maurer and obtained considerable informa
tion in response to questions asked on behalf of
defendants. On June 3, 1983 defendants adjourned
the discovery subject only to the right to ask
additional questions concerning matters taken
under consideration by plaintiff. By an order dated
July 26, 1983, the Court disposed of all outstand
ing matters in advance of the trial, and by an order
dated September 15, 1983, the matter was set
down for trial in Toronto on January 16, 1984.
This was on a unilateral application by plaintiff.
The affidavit further states that it was only on or
about October 28, 1983, that Doctor Maurer was
served with the subpoena and counsel only became
aware of it on October 31, 1983, although the
order had been obtained by defendants ex parte on
or about April 7, 1983. The issue of the subpoena
has been contested and defendants have requested
that the hearing thereon originally set down for
December 7, 1983 in Rochester be adjourned on
consent pending a decision by this Court on the
application herein.
Defendants' counsel invokes Rule 465(5), which
reads as follows:
Rule 465. .. .
(5) The assignor of a patent of invention, copyright, trade
mark, industrial design or any property, right or interest may
be examined for discovery by any party who is adverse to an
assignee thereof. (Where the context so permits, a reference in
this Rule to an individual to be questioned or to an individual
being questioned includes such an assignor).
The word "assignor" is used in the singular and
there is nothing to indicate that in the case of a
co-inventor both parties may be examined for dis
covery. Doctor Schultz, who was being examined,
undertook to inform himself of Doctor Maurer,
and while it may be that it would be useful for
defendants to also be able to make inquiries of the
co-inventor Doctor Maurer, this does not neces
sarily justify a second examination since under our
procedure, unlike that in the United States, nor
mally only one person can be examined on behalf
of a corporation. Doctor Schultz was so examined.
It is true that paragraph (19) of Rule 465 does
permit the Court, for special reason in an excep
tional case, in its discretion, to order a further
examination for discovery after a party or assignor
has been examined for discovery under the Rule,
but this is a provision which is infrequently used.
In any event the real issue is that this Court
cannot effectively issue a subpoena requiring a
non-resident to come to Canada to be examined,
even if conduct money is tendered.
Rule 465(12) provides as follows:
Rule 465. .. .
(12) Where an individual to be questioned on an examination
for discovery is temporarily or permanently out of the jurisdic
tion, it may be ordered by the Court, or the parties may agree,
that the examination for discovery be at such place, and take
place in such manner, as may be deemed just and convenient.
In the case of Lido Industrial Products Limited v.
Teledyne Industries, Inc. et al.,' Chief Justice
Jackett, rendering a decision of the Federal Court
of Appeal, stated at pages 313-314 F.C., pages 3-4
C.P.R.:
Rule 465 also includes provision (Rule 465(5)) for something
that is called an examination for discovery but that does not fall
within what is ordinarily thought of as an examination for
discovery. It is not an examination for discovery of one party by
another; it is a pre-trial questioning of a potential witness, and
the only person who can be questioned thereunder is the
assignor of the property right that is the subject of the litiga
tion, who is subject to being questioned whether or not he is an
officer or other employee of the opposing party.
The mode of enforcing attendance for examination of a
person subject to questioning by virtue of Rule 465(5) is a
subpoena (Rule 465(9)); as such a person is not necessarily
under the control of the opposing party, that party does not
become subject to having his defence struck out or to having his
action dismissed by reason of such person failing to attend and
answer as required. (Rule 465(20).) Presumably, Rule 465(12)
contemplates the Court authorizing such an examination taking
place outside Canada but one does not find anything in the
' [1979] 1 F.C. 310; 41 C.P.R. (2d) 1 (C.A.).
Rules authorizing the Court to order such a person to appear
for examination inside or outside Canada; and any such author
ity would not be expected having regard to the provision for a
subpoena in Canada and the Court's inability to issue orders or
other process having effect outside its geographical jurisdiction.
(See McGuire v. McGuire [1953] O.R. 328.) In other words,
there is an implied limitation, as far as Rule 465 is concerned,
on the ambit of Rule 465(5) in that it cannot operate where the
person to be examined is outside Canada and cannot be made
the subject of a subpoena issued out of a Canadian court.
In the case of Sternson Limited v. CC Chemicals
Limited, 2 Ryan J., in rendering the judgment of
the Federal Court of Appeal, stated at page 359
F.C., page 84 D.L.R.
It is true that, for the reasons given in the Lido case, the
Trial Division of the Federal Court could not have ordered the
examination of Mr. Rehmar for discovery. This would be so
because Mr. Rehmar would not be subject to a subpoena issued
in Canada, but for this reason only. I do not see, however, why
this should prevent the appellant from going into a United
States Court which has jurisdiction over Mr. Rehmar to obtain
under applicable United States law the sort of order it could
have obtained from the Federal Court had Mr. Rehmar, the
assignor of the patent, been within Canada. The sort of proce
dure invoked abroad is a procedure which is available in the
Federal Court action in respect of an assignor of a patent who
is subject to service in Canada. The examination conducted
abroad will, of course, have no status under Rule 465. That
does not mean, however, that it would be illegitimate to con
duct it.
This is precisely the procedure which defendants
very properly attempted in the present case.
In the case of Procycle, Inc. et al. v. Deflectaire
Corporation et al.,' Marceau J. referred to both
these judgments dismissing an injunction sought to
restrain one of the defendants from proceeding to
take the deposition of the inventor in the United
States. At page 157 of the judgment he states:
Moreover, the Court could not interfere with the exercise by a
litigant in an action before it of a right that such litigant could
be entitled to in the United States. It appears to be clear that
there is no legal right by virtue of the Rules of this Court to
examine Mr. Hersh on discovery which could provide a basis
for the United States District Court order, and the question
remains as to what use the defendants will be able to make of
the examination at the trial of the action. But this will have to
be decided in due time. For the moment, I see no reason, indeed
no possibility, for this Court to intervene into the process of the
American Court by giving counsel orders as to how they should
submit their request to that Court.
Defendants invoke the principle that the parties
are entitled to a full and complete discovery. This
2 [1982] 1 F.C. 350; 124 D.L.R. (3d) 76 (C.A.).
(1981), 58 C.P.R. (2d) 153 (F.C.T.D.).
does not solve the problem as to how and where
Doctor Maurer can be examined in the absence of
consent as a result of any order which can be
issued by this Court. Reference was made to the
case of Textron Canada Limited v. Rodi & Wie-
nenberger Aktiengesellschaft" in which Kerr J., in
dealing with Rule 465(12), refused to speculate as
to whether the assignors would attend for exami
nation, being non-residents, or what recourse the
plaintiff would have if they did not attend. Before
making any order for examination for discovery of
the assignors in Japan and Germany he wished to
be satisfied that there would be a reasonable prob
ability that it would be effective under the laws of
those countries and therefore reserved judgment
for a month to enable counsel to make inquiries.
Defendants' counsel makes a distinction that in
that case the assignors were not employees of the
parties to be examined, unlike Doctor Maurer who
is an employee of plaintiff, and that plaintiff itself
has tried to prevent the examination in the United
States in that counsel for plaintiff acted for Doctor
Maurer in attempting to have his subpoena for his
examination quashed.
In the case of Xerox of Canada Limited et al. v.
IBM Canada Limited 5 Heald J. refers to this
judgment of Justice Kerr in an action in which
defendant desired to examine for discovery
some 18 inventors of which 12 were employees of
Xerox Corporation in the United States. Conflict
ing affidavits were submitted as to what effect the
American courts would give to an order of the
Canadian Court. The application was dismissed,
the Court not being satisfied that a . reasonable
probability had been established that an order of
this Court for the examination would be complied
with. This decision was sustained in the Court of
Appeal [IBM Canada Limited v. Xerox Canada
Limited et al., [1976] 2 F.C. 781].
Defendants' counsel argues that this case differs
from the Lido and other cases as this Court clearly
has jurisdiction over the plaintiff and it is the
plaintiff itself which is seeking to avoid examina-
4 [1973] F.C. 667; 10 C.P.R. (2d) 9 (T.D.).
5 [1976] 1 F.C. 213; 24 C.P.R. (2d) 175 (T.D.).
tion of Doctor Maurer.
Defendants' counsel further argues that the
basis of the application seeking to quash the sub
poena in the United States is that a Canadian
court would not issue it even if he were a resident.
This is patently wrong as Rule 465(19) could have
been invoked in this case and in view of the
statement in the Sternson case at pages 357-358
F.C., page 83 D.L.R. where it was stated: "Under
our Rules, such discovery is available in respect of
an adverse party and of a party in the position of
the party sought to be examined in this case, the
assignor of the invention. It is, of course, true that
Mr. Rehmar is not subject to such examination
under Rule 465(5) because he is out of the juris
diction. But he would be if he were in Canada."
[Emphasis added.] Counsel submits that if an
order were issued granting defendants leave to
serve an appointment for an examination for dis
covery at Toronto, even if it cannot be enforced by
this Court it would aid in defeating in the United
States plaintiff's attempt to have the subpoena for
an examination of Mr. Maurer there quashed. I do
not believe that this is sufficient justification for
issuing such an order. Whether or not the sub
poena for examination of Doctor Maurer in the
United States should be quashed is a matter within
the sole jurisdiction of the United States courts to
determine and it should not be difficult to prove
Canadian law before such courts in the normal
way, if in fact that is the sole argument used by
plaintiff in seeking to quash the subpoena.
Plaintiff's counsel points out that defendants
obtained an order for the subpoena on April 7,
1983, before the examination of Doctor Schultz
was complete or he had been asked questions as to
Doctor Maurer's knowledge but that it was not
served until October. In September 1983, when the
trial date was set for January 16, 1984 as the
result of the undertakings given by Doctor Schultz
having been completed, no mention was made by
defendants of their desire to examine Doctor
Maurer. He states that this lack of frankness is an
abuse of the process of the Court and the attempt
to examine Doctor Maurer is made with the view
of delaying the trial.
Defendants' counsel for her part states that they
could have been told in October that the examina
tion of Doctor Maurer in the United States would
be resisted, saving them an unnecessary trip to
Rochester for this purpose. It is not the intention
of this Court to assign blame to either party but it
is essential that the trial of the action should not
be delayed. If defendants still feel that the exami
nation of Doctor Maurer is necessary they will
have to take whatever steps they deem advisable in
the United States to have a hearing as soon as
possible on his motion seeking to quash the sub
poena for his examination there. This is a matter
which will have to be determined in the United
States and it is not desirable that an appointment
should be issued from this Court; in view of the
position which Doctor Maurer has taken in the
United States in resisting his examination it is
unlikely that he would come to Canada even if
tendered travelling expenses for the purpose of
such examination.
With respect to defendants' argument that since
he is also an employee of plaintiff the Lido and
Xerox cases are not applicable as he is subject to
plaintiff's control, this would only be valid if the
Court were to invoke Rule 465(19) and order a
further examination for discovery of him, and even
then there is some doubt as to whether such an
order would be effective. Moreover in both the
Lido and Xerox cases the parties to be examined
were not only assignors or inventors but also
employees of the party as in the present case, so
these judgments cannot be distinguished on that
ground.
The suggestion of defendants that the sanction
of paragraph (20) of Rule 465 could be applied in
the event of his failing to come to Canada to be
questioned and the action be dismissed for this
reason would not appear to be applicable in the
circumstances and in the light of the jurispru
dence.
Defendants' motion is therefore dismissed with
costs.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.