T-118-97
Between:
THE KUN SHOULDER REST INC.,
Plaintiff,
- and -
JOSEPH KUN VIOLIN AND BOW MAKER INC.,
MARIKA KUN and MICHAEL KUN and
M & M KUN VIOLIN MAKING AND
ACC. INC.,
Defendants.
REASONS FOR ORDER
JOHN A. HARGRAVE
PROTHONOTARY
These reasons arise out of motions of the Plaintiff and of the Defendants, heard over the course of two days at Toronto, for answers to a substantial number of questions possed on the examination for discovery, but denied for various reasons. During several adjournments counsel resolved a number of issues. Counsel presented the outstanding balance of the questions neatly and concisely, catalogued in groups to which general principles and philosophies might be applied. This grouping and the submissions, which included written material, should be the norm.
Counsel suggested reasons might be in order. In these reasons I do not intend to reflect the specific and sometimes narrow rationales for allowing or denying various questions: that would be of limited value to anyone. Rather, there are some general principles of broader application, which might have future value.
BACKGROUND
By way of a brief background, this is an unfortunate action and counterclaim, the former by a company controlled by the widow of Joseph Kun who was a violin repairer, bow maker and violin and viola shoulder rest inventor and manufacturer. Ms. Marina Kun, the principle of the Plaintiff, Kun Shoulder Rest Inc., has carried on the shoulder rest aspect of the business since 1993. She contends against Marika and Michael Kun, children of Mr. Kun, by his first marriage who, together with their companies, Joseph Kun Violin an Bow Maker Inc. and M & M Kun Violin Making and ACC Inc., have carried on Joseph Kun's business, since his death in 1996. The Defendants' business includes the manufacture and sale of shoulder rests. The Defendants' counterclaim for much the same relief that is set out in the Plaintiff's statement of claim, that is to say injunctive relief involving trademarks using the family name, passing off, damages or an accounting of profits and the like.
PASSING OFF
Counsel for the Plaintiff makes the point that the claim for passing off is, in this instance, atypical in that intent is a factor. At one time, a common-law action for passing off, even where the defendant had acted fraudulently, could not be maintained unless there was an intention to deceive. This need to show intention died out in the mid-1800: see Consumers Distributing Co. Ltd. v. Seiko Time Canada Ltd. (1985), 1 C.P.R. (3d) 1 at 15 (S.C.C.) and Millington v. Fox (1838) 3 Myl. & Cr. 338, 40 E.R. 956 (Ch.) in which Lord Chancellor Cottenham granted permanent injunctive relief, without the requirement of any intent, the defendant being unaware of the existence of the plaintiff. However, an analysis of currently applicable case law, setting out the elements of the tort of passing off, for example as in Walt Disney Productions v. Triple Five Corp. (1992), 43 C.P.R. (3d) 322 (Alberta S.C.), indicates that intention is today immaterial. The plaintiff need only show:
| (1) a goodwill or reputation attached to his goods or services in the mind of the public with the name in question such that the name is identified with the plaintiff's goods or services; |
| (2) a misrepresentation by the defendant (whether or not intentional) leading or likely to lead the public to believe that the goods or services are those of or those authorized by the plaintiff; ... (p. 331) |
This passage goes on to note the requirement that the plaintiff has suffered or is likely to suffer damages, but that damages are presumed if the first two elements are met. The passage concludes that the intention of the defendant is immaterial.
In contrast, intention is relevant as a measure of damages, for in the case of an innocent passing off the appropriate measure is probably, at most, that of nominal damages: see the comment of Lord Justice Goddard in Draper v. Trist (1939) 3 All E.R. 513 at 528 (C.A.). This concept of intent is touched upon by our Court, albeit in a different context, a patent infringement proceeding, in Risi Stone Ltd. v. Groupe Permacon Inc. (1994), 56 C.P.R. (3d) 381. There Mr. Justice Nadon pointed out that while an infringement action is a comparison of the claims in the patent, with the infringing product and that details and documents relating to development of a product are therefore irrelevant, evidence of intent might be admissible on examination for discovery, for example, in order to determine the mens rea of a party, a factor which the Court could take into consideration in ordering exemplary damages:
| " Moreover, an action in infringement is essentially a comparison of the claims in the patent with the allegedly infringing product. The details and documents relating to the development of the product are therefore, in my opinion, not relevant to the action. Such evidence might be admissible in an examination for discovery in certain circumstances. That information might be relevant, for example, to enable the court to determine the mens rea of a party in respect of the infringement allegations. Thus, the court could take this information into account to order exemplary damages." (p. 387) |
At the conclusion of this portion of the argument, I ruled that, in general, questions bearing on intent were proper in this instance in that they could go to the type of damages to be awarded. The Defendant had also raised the point that in discovery one must keep firmly in mind to content of the pleadings, for that sets the bounds of examination for discovery. However, in the present instance, the Plaintiff has clearly raised the issue of intent in the context of the purpose and knowledge of the Defendants, in paragraph 30 of the Statement of Claim and in paragraph 33 of the Statement of Claim where the allegation is that the Defendants "... intended to trade on the goodwill developed by Joseph Kun and continued by his successor, the Plaintiff, ...". It might of have been preferable had the Plaintiff carried the idea of intent a little farther in the statement of claim, but in an instance such as the present case one ought not to be overly dogmatic or doctrinal.
PRODUCT DEVELOPMENT
The next interesting issue is whether questions relating to product development are proper. Counsel for the Plaintiff submits that the Defendants' shoulder rests are a virtual copy and that the development of the products is a reasonable line of inquiry, for on the one hand it may become evident that the Defendants' products are direct copies, but on the other hand, the Defendants may be able to produce material showing independent development of their shoulder rests.
In a patent infringement the law is settled that the issue is a comparison of the patent which the allegedly infringing product and thus "The details and documents relating to the development of the product are.... not relevant to the action." (Risi Stone loc. cit.). In Leithiser v. Pengo Hydra Pull of Canada Ltd. (1972), 7 C.P.R. (2d) 14 Mr. Justice Heald ruled that questions dealing with design development were improper:
| "These questions inquire as to who made defendant's design and what he worked from. In my view, who made the design and what he worked from can have no bearing on the issue as to whether a particular design infringes plaintiffs' patent. I therefore find these questions to be improper." (page 16) |
Similarly, see Sigma Instruments Inc. v. Bach-Simpson Ltd. (1972), 5 C.P.R. (2d) 7 in which Mr. Justice Heald looked at the subject in a little more detail.
There is the added factor that were the Defendants found to have copied the shoulder rest, rather than developed it themselves, that might go to augmented damages. However, this present proceeding is to culminate in an expedited hearing next month. While the discovery process should be thorough, it must be reasonable in the sense of coming to an end at an appropriate interval before the hearing. Finally, the trial judge can as easily inspect the competing products and determine the likelihood of whether the Defendants have made virtual copies of the Plaintiff's devices. In summary, I did not see any reason to depart from the clear concept that questions as to the development of an allegedly infringing product are not relevant.
FINANCIAL ORGANIZATION OF THE DEFENDANTS
The Defendants have refused, for the most part, to answer a group of questions dealing with the financial and operational side of their organization. The Plaintiff says that these questions are to sort out who are the proper parties and to explore revenue and expenses which go to the Plaintiff's claim for damages and an accounting. In this regard, I note both the recent addition of M & M Kun Violin Making and Acc Inc. as a Defendant and that the Plaintiff wishes not a reference to determine damages and profits issues, but seeks such calculations and remedies at the hearing. Counsel for the Defendants says that this foray into the finances and corporate structure of the Defendants is going too far a field.
I might agree with counsel for the Defendants if there were to be a reference as to damages, to take place only in the event that a trial judge finds liability. Unfortunately, there being no two step procedure, culminating in a reference, both sides must bare their financial affairs and the Defendants the structure of their organization in order to provide material from which a judge might come to a conclusion as to an appropriate measure of profit.
PACKAGING AND PRODUCT SHAPE
The Plaintiff's discovery of the Defendants dealing with packaging and product shape leads to the interesting point of the understanding of the corporate Defendants of phrases used on the packaging of the shoulder rests, extolling the superior quality and the elegant appearance of the devices. In Control Data Canada v. Senstar Corporation (1989) 24 C.P.R. (3d) 117 Mr. Justice Collier dealt with the interpretation of a document on the one hand and the understanding of the meaning of a document on the other hand. Certainly, a witness should not be asked to either interpret or speculate on the meaning of a document, but a questions asking what the company understands is meant by certain wording is a proper question:
| "I am going to direct that the question "What does the company understand is meant by that?" is a question that should be answered. If the company has no understanding, fine, but they are not asking anyone to speculate or make inquiries. If it has an understanding, state it." (page 117) |
PATENT OBJECTIONS AND INVALIDITY ALLEGATIONS
This area of patent objections and allegations of invalidity gave rise to the question of discovery on issues that might best be left to an expert to explain under the procedure set out in Rule 482. The Defendants are prepared to give the Plaintiff references as to prior art, but not matters which should be explained by an expert. Counsel for the Defendants feels that this line of questioning is premature and should be reserved for an expert to deal with.
In Aerlinte Eireann Teoranta v. Canada, an unreported 25 July 1984 decision of Mr. Justice Strayer (as he then was) in action T-1250-80, at issue was the relationship between airport landing fees and the cost of providing related landing services for various types of flights at major Canadian airports. The comparison was not one which the defendant had made, although there was data upon which someone might make estimates and base opinions. Mr. Justice Strayer concluded that there would be full opportunity to explore this area by testing the opinions of experts at trial. A paragraph of his reasoning, to reach this conclusion, is worth setting out:
| " The purpose of an examination for discovery is to ascertain the facts on which the other party intends to rely, but not to force a disclosure of the evidence by which those facts are to be determined: see e.g. Beloit Canada Ltee/Ltd. et al v. Valmet Oy (1981), 60 C.P.R. (2d) 145. Opinion evidence is just that: it is a means of establishing a fact, but it is not the fact itself. Only if the competence of the expert is itself in question can the opinion be explored on examination for discovery: The Queen v. Irish Shipping Ltd. et al [1976] 1 F.C. 418 (C.A.); Rivtow Straits Limited v. B.C. Marine Shipbuilders Limited [1977] 1 F.C. 735 (C.A.). Basically the facts obtainable on discovery are those "patent to the senses": Bestway Lath & Plastering Co. Ltd. v. McDonald Construction Co. Ltd. et al. (1972), 31 D.L.R. (3d) 47 (N.S. C.A.). In the present case the facts are the recorded costs as they appear in the data provided by the defendants. It appears to be common ground that any "allocation" of these costs to each of the three sectors will have to be based on an estimate. No matter how well-informed or logical that estimates may be, in my view it will still be an opinion. It will form part of the evidence by which the plaintiffs presumably will seek to establish the discrimination and excessive charges alleged in their pleadings." |
The Court of Appeal upheld this view, again in an unreported decision in Appeal A-972-84, rendered 26 February 1985.
QUESTIONS OF LAW
A number of the questions asked by counsel for the Plaintiff seek to have the discovery witness advise as to the facts relied upon in support of certain allegations in the pleadings.
It is proper to ask a discovery witness to speak of all the facts, surrounding a certain incident, of which the witness either knows or must properly inform himself or herself about. It is never permissible to ask a discovery witness as to the facts relied upon in support of a certain allegation, for this requires the witness to choose facts and disclose how his lawyer might prove a given allegation. While a witness may know the general approach that his or her lawyer intends to take, a witness cannot know what facts will assist until he or she knows the law. The particular facts that will be relied upon is based upon counsel's view of the law. An examination for discovery of a witness seeks to discover fact, not argument as to what is relevant in order to prove a given plea.
Beneath this concept of the proper way to explore for relevant facts is the fundamental rule that examination for discovery is as to facts, not as to law. To allow a question, requiring the witness to select facts upon which he or she relies in order to support a given allegation, is to try to evade this fundamental rule by requiring the witness to consider the applicable law, then use it to select facts and to announce a result. All of this is set out at length and in a straight forward way by the Federal Court of Appeal in Can-Air Services Ltd. v. British Aviation Insurance Co. (1989), 30 C.P.C.1.
PATENT TERMINOLOGY
The final area of interest consists of questions involving some basic patent terminology, but terminology which a hands on manufacturer might also use to describe or explain his or her product. Ms. Marine Kun shows, at various points in her discovery, at least a sound basic understanding of such words and indeed appears comfortable with the use of some technical terms which naturally describe various aspects of the shoulder rests the Plaintiff produces, not necessarily in the sense of analyzing the applicable patent but, as I say, to describe her company's product. The Defendant wishes her to describe various aspects of her company's shoulder rests including correlating descriptions in the pleadings with the actual devices.
This is one of the issues Madame Justice Reed dealt with in a recent case, James River Corp. of Virginia v. Hallmark Cards Inc. (1997), 72 C.P.R. (3d) 157. There the questions dealt with whether the paper stock used for making paper plates was homogeneous, whether the wrinkles formed in the plate's circumferentially-spaced densified regions extended radially through the side wall and rim and whether the wrinkles were substantially integrated fibrous structures. Such questions were opposed on the basis of a line of cases to the effect that it is not appropriate, on discovery, to ask as to a person's understanding or interpretation of a patent. Madame Justice Reed pointed out the questions were not of that nature, but rather about the defendant's plates and the characteristics of those plates, as the defendant understood them. As such, they were facts within the knowledge of Hallmark. The protection accorded to the defendant, on such questions, was that if various terms were not used by the defendant and meaningful answers thus might not be given, then the answers would reflect that fact:
| "Counsel for the defendant argues that these questions should not have been ordered to be answered because they employ terminology not used by Hallmark. The decisions in Owens-Illinois, Inc. v. AMCA International Ltd. (1987), 14 C.P.R. (3d) 536, 12 C.I.P.R. 209 (F.C.T.D.) (A.S.P.); Corning Glass Works v. Canada Wire and Cable Co. (1983), 74 C.P.R. (2d) 105 (F.C.T.D.), and Geo Vann Inc. v. N.L. Industries, Inc. (1983), 75 C.P.R. (2d) 68 (F.C.T.D.), state that it is not appropriate to ask a person being examined for discovery questions calling for that person's understanding or interpretation of the patent. |
| The questions in issue are not of this nature. They ask about the defendant's plates, and the characteristics of those plates, as the defendant understands them. They ask for facts within the knowledge of Hallmark. They are not unlike many other questions that were asked and answered, which questions use terms found in the patent, terms such as lip, rim, scored, side wall, blank of the bottom wall. If the terms, in the questions under dispute, are not used by the defendant, and meaningful answers cannot be given by it, then, those answers will reflect that fact. The defendant is not required to do testing to ascertain the answers. But the questions themselves are of a type that should be answered." (p. 163) |
A substantial number of the questions posed by Defendants' counsel seek answers descriptive of the Plaintiff's shoulder rests and fall within the James River concept of having a discovery witness describe the characteristics of the product as the party understands them. However, other questions go beyond the bounds of the James River concept, including as to a correlation of the aspects of samples of the Plaintiff's shoulder rests with patent wording and a technical description of shoulder rests produced by third party competitors: this is not only the province of experts, but it is also work the Defendants should do for themselves.
CONCLUSION
As I indicated at the beginning of these reasons, counsel presented their material neatly and concisely. The motions were well presented and argued. Success was mixed. Costs are in the cause.
(Sgd.) "John A. Hargrave"
Prothonotary
September 12, 1997
Vancouver, British Columbia
NAMES OF COUNSEL AND SOLICITORS OF RECORD
STYLE OF CAUSE: THE KUN SHOULDER REST INC.
- and -
| JOSEPH KUN VIOLIN AND BOW MAKER INC., MARIKA KUN and MICHAEL KUN and M & M KUN VIOLIN MAKING and ACC. INC. |
COURT NO.: T-118-97
PLACE OF HEARING: Toronto, ON
DATE OF HEARING: September 3, 1997
REASONS FOR ORDER OF
Mr. John A. Hargrave, Prothonotary
dated September 12, 1997
APPEARANCES:
Mr. Matthew R. Snell for Plaintiff
Mr. Henry Lue for Defendant
SOLICITORS OF RECORD:
McCarthy Tetrault
Toronto, ON for Plaintiff
Dimock Stratton Clarizio
Toronto, ON for Defendant