Date: 20000420
Docket: T-1733-99
BETWEEN:
HIGHLINE MFG. INC.
Plaintiff
- and -
CONVEY-ALL INDUSTRIES INC.
Defendant
(Plaintiff by counterclaim)
- and -
RICHARD J. EPP and DWAYNE S. EPP
| Defendants |
(Defendants by counterclaim)
REASONS FOR ORDER
GIBSON J.:
[1] By Notice of Motion filed the 13th of April, 2000, the plaintiff in this patent infringement action seeks relief against the defendant Convey-All Industries Inc. ("Convey-All") from the full application of Rule 206 of the Federal Court Rules, 19981 in respect of the agreement evidencing an exclusive licence granted to it by Richard J. Epp and Dwayne S. Epp, the inventors and holders of the patent in issue. It is not in dispute that the licence is a document referred to in the plaintiff"s statement of claim.
[2] Rule 206 reads as follows:
206. A copy of every document referred to in a pleading shall be served with the pleading or within 10 days after service of the pleading, unless
(a) the party being served waives its right to the copy; or
(b) the Court orders otherwise.
206. Une copie de chaque document mentionné dans un acte de procédure est signifiée soit avec l'acte de procédure, soit dans les 10 jours suivant la signification de celui-ci, à moins que, selon le cas :
a) la partie qui en reçoit signification ne renonce à son droit de recevoir cette copie;
b) la Cour n'en ordonne autrement.
[3] The predecessor to Rule 206, Rule 407(2) of the former Federal Court Rules2, was essentially similar to Rule 206 except that 30 days rather than 10 days was allowed for serving a copy of a document referred to in a pleading and the discretionary authority of the Court to order otherwise was limited to circumstances where there was "special reason".
[4] Ostensibly in compliance with Rule 206, and in response to a request from counsel for Convey-All, counsel for the plaintiff provided to counsel for Convey-All "relevant portions of the licence agreement referred to in the Statement of Claim." Large portions of the licence agreement, including all of the royalty provisions, were blanked out. Counsel for Convey-All insisted on full and unrestricted access to the whole of the licence agreement. In the result, this plaintiff"s motion followed.
[5] By consent order dated the 15th of March, 2000, this Court ordered that all issues concerning any question as to the extent of the infringement of any right, the damages flowing from any infringement to any right and the profits arising from the infringement of any right should be determined separately after trial of the remaining issues. Clearly foremost among the "remaining issues" is the issue of liability. Counsel for the plaintiff urges that all of the provisions of the licence agreement relevant to the question of liability have been disclosed or, put another way, only provisions of the licence agreement not relevant to liability have been expurgated. In such circumstances counsel urges, in light of the sensitivity and commercial significance of some or all of the expurgated provisions, the plaintiff should not be required to disclose them, at least at this time.
[6] In United States Surgical Corp. v. Downs Surgical Canada Ltd.3, Mr. Justice Mahoney, then of the Trial Division of this Court, wrote at page 69:
| The weight of authority clearly lies in favour of requiring production, pursuant to Rule 407(2), of the complete document referred to in a pleading. The Rule does, however, give the Court a discretion. The defendant argues that the discretion is intended only to embrace cases where it would be physically or mechanically difficult, if not impossible, to produce a copy of an entire document, e.g., one so fragile and lengthy that photocopying was impossible and alternative reproduction impractical. I do not accept that limitation. There may well be other situations, as, for example, where the Court is satisfied that part of a document is irrelevant and the party has a valid reason for not wishing to publish that part. [emphasis added] |
[7] Clearly, Justice Mahoney contemplated a test comprising two elements: an element relating to relevance and an element relating to valid reason. It is of interest to note that Justice Mahoney was writing in the context of former Rule 407(2) where special reason was a condition to the exercise by the Court of its discretion to vary from the general rule of production.
[8] Sometime later, but still in the context of former Rule 407(2), Mr. Justice Joyal was faced with a similar issue in Kimberly-Clark Corp. v. Procter & Gamble Inc.4. He wrote at page 208:
| My review of the unexpurgated text leads me to conclude that substantially all the deletions are warranted. They contain information completely removed from the matter before the court and, in my respectful view, would be of no assistance to the defendant in advancing its case or furthering its defence. |
In the result, Mr. Justice Joyal approved substantial expurgations from agreements there at issue. Mr. Justice Joyal, despite the "special reason" limitation on the Court"s discretion that was then in place, did not look for "...a valid reason for not wishing to publish that part", as did Justice Mahoney.
[9] I have reviewed the unexpurgated licence agreement here at issue. I am satisfied that all of those portions of the agreement that the plaintiff expurgated in its production pursuant to Rule 206 are irrelevant to the question of liability, the principal question that will be before the Court in the first stage of the patent infringement action. While some of the expurgated portions may well be relevant to the issue that will be before the Court in the second stage of the action, if infringement by the defendant is established, I am satisfied that that is an issue for another day. Against the now unrestricted discretion that is granted to this Court to relieve from the full burden of Rule 206 of the Federal Court Rules, 1998, I am satisfied that irrelevance is, for the time being at least, sufficient justification to exercise the Court"s discretion.
[10] In the result, an Order will go relieving the plaintiff from any obligation to disclose under Rule 206 those portions of the licence agreement that have been expurgated, until such time as the issue of liability of the defendant for infringement has been finally determined, or until further order of this Court.
____________________________
J. F.C.C.
Ottawa, Ontario
April 20, 2000
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