Montréal, Quebec, July 26, 2006
PRESENT: Richard Morneau, Esq., Prothonotary
BETWEEN:
SYSTÈMES DE SÉCURITÉ PARADOX LTÉE -
PARADOX SECURITY SYSTEMS LTD.
and
PINHAS SHPATER
(Defendants by Counterclaim)
and
TYCO SAFETY PRODUCTS CANADA LTD.
(Plaintiff by Counterclaim)
REASONS FOR ORDER AND ORDER
[1] This is a motion by the Plaintiffs and Defendants by Counterclaim (collectively Paradox) for an order under rule 238 of the Federal Courts Rules (the rules) for leave to examine a non-party person, to wit Mr. John Peterson, the former principal at all relevant times of the Defendant and Plaintiff by Counterclaim (Tyco).
[2] Paradox in its patent infringement action accused Tyco of producing deliberately and wilfully a telephone line coupler circuit (the DSC dialer) that would infringe two of Paradox's patents.
[3] By its motion Paradox seeks essentially to examine Mr. Peterson under rule 238 in relation with the development or design of the DSC dialer or the awareness of Tyco of Paradox's patents or Paradox's products which are built in accordance with the patents in suit (the motion issues).
[4] At discovery of Tyco's representative, a Mr. Joseph Buccino, the latter indicated that a certain Mr. Pildner, former Tyco's senior electrical engineer, was the person who designed, through his functions, the DSC dialer. Mr. Buccino indicated also that nobody is left at Tyco, other than Mr. Pildner, who was involved in the development of the DSC dialer. It was learned however that Mr. Pildner was seriously ill and was unavailable for examination for discovery.
[5] In its motion material, Paradox relies on a patent agents' letter to sustain that at the time of the development of the DSC dialer Mr. Peterson was aware of one of the patent application in suit. Paradox relies also on the discovery of Mr. Buccino where it was indicated that Mr. Peterson would have instructed that the said dialer be developed.
[6] This situation brings Paradox to consider that Mr. Peterson may have information on the motion issues.
[7] Paradox's motion at bar is disputed by Tyco and Mr. Peterson.
Analysis
[8] The fundamental test to be met by a party for an order to examine a non-party person is prescribed by rule 238. This rule reads as follows:
| 238. (1) A party to an action may bring a motion for leave to examine for discovery any person not a party to the action, other than an expert witness for a party, who might have information on an issue in the action.
(2) On a motion under subsection (1), the notice of motion shall be served on the other parties and personally served on the person to be examined.
(3) The Court may, on a motion under subsection (1), grant leave to examine a person and determine the time and manner of conducting the examination, if it is satisfied that
(a) the person may have information on an issue in the action; (b) the party has been unable to obtain the information informally from the person or from another source by any other reasonable means; (c) it would be unfair not to allow the party an opportunity to question the person before trial; and (d) the questioning will not cause undue delay, inconvenience or expense to the person or to the other parties.
|
238. (1) Une partie à une action peut, par voie de requête, demander l'autorisation de procéder à l'interrogatoire préalable d'une personne qui n'est pas une partie, autre qu'un témoin expert d'une partie, qui pourrait posséder des renseignements sur une question litigieuse soulevée dans l'action.
(2) L'avis de la requête visée au paragraphe (1) est signifié aux autres parties et, par voie de signification à personne, à la personne que la partie se propose d'interroger.
(3) Par suite de la requête visée au paragraphe (1), la Cour peut autoriser la partie à interroger une personne et fixer la date et l'heure de l'interrogatoire et la façon de procéder, si elle est convaincue, à la fois :
a) que la personne peut posséder des renseignements sur une question litigieuse soulevée dans l'action; b) que la partie n'a pu obtenir ces renseignements de la personne de façon informelle ou d'une autre source par des moyens raisonnables; c) qu'il serait injuste de ne pas permettre à la partie d'interroger la personne avant l'instruction; d) que l'interrogatoire n'occasionnera pas de retards, d'inconvénients ou de frais déraisonnables à la personne ou aux autres parties.
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[9] As to the awareness of Mr. Peterson of Paradox's patents or Paradox's products, this issue goes essentially, as I see it, to the establishment of whether Tyco would have deliberately and wilfully committed an act of infringement.
[10] This might need to be resolved eventually in order for Paradox to have success in obtaining punitive and exemplary damages.
[11] However, as pointed out by Tyco, the issue of punitive and exemplary damages has been bifurcated to a second stage by an order of this Court dated September 13, 2004. Therefore at best, Paradox's motion is premature on this issue.
[12] As to other potential issues identified by Paradox at the hearing of the motion and for which Mr. Peterson's awareness would need to be probed, to wit, procured inducement, reasonable compensation for early infringement and the election by Tyco between profits or damages, I consider that these issues were mainly to be addressed during the discovery of Mr. Buccino. In addition, Tyco's motion material does not sufficiently reveal that Mr. Peterson may have information on these issues for this Court to allow an extraordinary measure such as a rule 238 examination.
[13] As to the other motion issue, to wit the development of the DSC dialer, Tyco's motion material indicates that Paradox has through the discovery of Mr. Buccino been provided with extensive material regarding the function and operation of the dialer. It is therefore difficult for this Court to consider here under rule 238(d) that it would be unfair to Paradox not to allow it to question Mr. Peterson before trial.
[14] In addition, on the development of the dialer, upon consideration the Court is not satisfied that Paradox has discharged its burden of establishing that Mr. Peterson may have information on that issue. In that regard, I agree with Mr. Peterson and Tyco that the discovery of Mr. Buccino (see pages 160, 187 and 188 of transcript of the discovery of Mr. Buccino) points more in the direction that Mr. Peterson would really have no material information about the design of the dialer, and that Mr. Pildner was the only one at Tyco (at the time DSC) involved in the design of the dialer. Mr. Pildner was described at the "lone wolf" in terms of design of the dialer.
[15] Therefore, since in my estimate two out of four criteria of rule 238 are not met, this motion by Paradox must fail with one set of costs to each Tyco and Mr. Peterson.
ORDER
THIS COURT ORDERS that this motion by Paradox under rule 238 is dismissed with one set of costs to each Tyco and Mr. Peterson.
FEDERAL COURT
NAME OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-426-04
STYLE OF CAUSE: SHMUEL HERSHKOVITZ,
SYSTÈMES DE SÉCURITÉ PARADOX LTÉE/
PARADOX SECURITY SYSTEMS LTD. and
PINHAS SHPATER
-and-
TYCO SAFETY PRODUCTS CANADA LTD.
PLACE OF HEARING: Montréal, Quebec
DATE OF HEARING: July 24, 2006
APPEARANCES:
| George R. Locke Robert Charlton
|
|
| Marek Nitoslawski
|
FOR THE DEFENDANT/PLAINTIFF BY COUNTERCLAIM
|
| Jennifer Dolman
|
FOR THE NON-PARTY JOHN PETERSON |
SOLICITORS OF RECORD:
| Ogilvy Renault LLP Montréal, Quebec
|
|
| Fasken Martineau DuMoulin LLP Montréal, Quebec
|
|
| Osler, Hoskin & Hartcourt LLP Toronto, Ontario |
FOR THE NON-PARTY JOHN PETERSON |