Bauer Hockey Corp. v. Easton Sports Canada Inc., 2010 FC 361 (2010)

Parts:Bauer Hockey Corp. v. Easton Sports Canada Inc.
Reporting Judge:The Honourable Justice Johanne Gauthier
Docket Number:T-237-02
 
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Federal Court - Bauer Hockey Corp. v. Easton Sports Canada Inc.

Source: http://decisions.fct-cf.gc.ca/en/2010/2010fc361/2010fc361.html

Date: 20100401

Docket: T-237-02

Citation: 2010 FC 361

Ottawa, Ontario , April 1, 2010

PRESENT: The Honourable Justice Johanne Gauthier

BETWEEN:

BAUER HOCKEY CORP.

and NIKE INTERNATIONAL LIMITED

Plaintiffs/ Defendants by Counterclaim and

EASTON SPORTS CANADA INC.

Defendant/

Plaintiff by Counterclaim

REASONS FOR JUDGMENT AND JUDGMENT

[1] The two Plaintiffs in this action claim that their rights under “Quarter for Skate Boot”, Can. Patent No. 2302953, PCT Patent No. PCT/CA9800845 (4 September 1998) (the ‘953 Patent) were infringed by Easton Sports Canada Inc. ( Easton ) by the manufacture and sale in Canada of a number of skate models. Further, they claim that Easton has induced others to infringe the ‘953 Patent.

[2] The Plaintiff, Bauer Hockey Corp., is the owner of the ‘953 Patent. [1] It is a company specializing in the manufacture and marketing of hockey equipment, including ice hockey skates. [2] The company underwent many corporate changes and has been formerly known under several corporate names since the 1930s, including Greb Industries, Gamebridge, Warrington , Canstar, Bauer Nike, Nike Bauer and Bauer (generally referred to as “Bauer”). [3] In 1995, Nike, Inc. became the owner of Bauer.

[3] The ‘953 Patent application (PCT) was filed on September 4, 1998 and was issued to Bauer Nike Hockey Inc. on November 20, 2001. It expires on September 4, 2018.

[4] On October 31, 2002, the patent was assigned from Bauer Nike Hockey Inc. to an affiliate of Nike Inc., Nike International Limited, the second Plaintiff in this suit. Bauer’s predecessors-in-title, namely Bauer Nike Inc., Nike Bauer Hockey Inc., Nike Bauer Hockey Corp. were, successively, the exclusive licensees under the ‘953 Patent. On April 16, 2008, the ‘953 Patent was assigned from Nike International Limited to Nike Bauer Hockey Corp.

[5] On October 1, 2008, following a series of corporate changes, Nike Bauer Hockey Corp. became Bauer Hockey Corp. On October 13, 2009, the Plaintiffs were granted leave to amend their Further Amended Statement of Claim in the current proceeding to reflect the recent corporate changes of Bauer.

[6] Easton was incorporated under the laws of Canada in 1986. It is the subsidiary of the American company Easton Sports, Inc. ( Easton U.S. ), which was founded in the 1920s. [4] Easton is a manufacturer and distributor of sports equipment, including hockey equipment. [5] Easton was particularly successful with their innovative composite hockey stick. In 1997, Easton decided to get into the skate business and their first skate was launched in time for the 1998 season.

[7] The invention described in the patent-in-suit was made during what will be referred to as the Vapor Project, a research and development (R&D) project at Bauer which led to the development of their Vapor line of skates, including particularly the Vapor 8. This skate was launched in the middle of the 1997-1998 hockey season.

[8] Following the launch of Bauer’s Vapor skate line, at least one element of the ‘953 Patent, namely the one-piece quarter, was incorporated into other models of Bauer skates as well as roller skates including Mission [6] roller skates. [7]

[9] Bauer alleges that there are 38 Easton skate models that infringed on its rights under the ‘953 Patent. On December 2, 2001, the Plaintiffs’ counsel sent a cease and desist letter to Easton . The present proceedings were instituted on February 14, 2002.

[10] Pursuant to a Bifurcation Order of Justice Frederick E. Gibson dated December 17, 2002, questions about the quantum of damages, accounting of profits or reasonable compensation, if any, are to be determined after trial. Similarly, as will be mentioned later on, any question regarding apportionment is also a matter to be determined by the reference judge.

[11] On June 6, 2007, the parties filed a Joint List of Issues to be determined at trial, which included: determination of the proper construction of the claims of the ‘953 Patent, whether any of the Defendant’s skates infringe the claims; whether the Defendant induced or procured Les Chaussures Rock Forest Inc. (Rock Forest) and/or Sakurai Sports MFG. Co., Ltd. (Sakurai) to infringe the ‘953 Patent; [8] and whether any of the claims were invalid for a variety of reasons which during the final arguments the Defendant narrowed down to include only: anticipation, obviousness, lack of clarity, inutility and misleading statements. [9]

INDEX

Heading Para . No.

I. The Evidence 12

II. General Background

A. The Hockey Skate Market 74

B. Types of Skates 83

C. Skate Components 88

D. Evolution of the Hockey Skate Construction 93

E. Easton Skates 103

III. Patent Construction

A. The Legal Test 110

B. Person Ordinarily Skilled in the Art 112

C. Common General Knowledge Principles 123

D. Analysis 124

IV. Infringement

A. Burden 169

B. Analysis 172

V. Invalidity

A. Standard of Review and Burden of Proof 210

B. Anticipation 211

C. Obviousness

(1) The Legal Test 222

(2) The Person Ordinarily Skilled in the Art 224

(3) Relevant Common General Knowledge 225

(4) Climate in the Industry 237

(5) Prior Art 241

(6) Inventive Concept 250

(7) The Differences between the Common General Knowledge and the

Above-Mentioned Prior Art and the Inventive Concept 252

(8) Would the Difference be Obvious to the Ordinary Person Skilled in the Art? 253

D. Lack of Utility 285

E. Misleading Representations subsection 53(1) of the Patent Act 323

VI. Remedies, Interest and Costs 337

I. The Evidence

[12] Bauer relied on the evidence of eight lay witnesses: Tim Pearson, Ken Covo, François Chênevert, Chris Langevin, Stephen Murphy, Marc Gagnon, Lawrence Weber and Lorraine Banton.

[13] Tim Pearson is currently the Director of Business Process at Bauer; he has been an employee of the company since 1990. Prior to joining Bauer, he worked in a large hockey and golf retailer, Gus Maue, from 1977 to 1990, where he held the position of manager and buyer for about 10 years.

[14] Mr. Pearson discussed the main brands of hockey skates as well as their historical and current sales and market shares, both on the consumer market and in the National Hockey League (NHL). He also discussed returns of skates by the consumers at Gus Maue and at Bauer and introduced into evidence a series of spreadsheets showing the number of returns for different Bauer skates for the years 1999, 2000, 2001 and 2002 (exhibits TX-487 [10] to TX-494). Other confidential exhibits relating to sales, skate distribution, skate returns and skate weights were also put into evidence during the course of his testimony.

[15] Ken Covo obtained his Bachelor of Engineering from McGill University in 1982 and studied part-time a Masters in Arts in Educational Technology from Concordia University around 1990. He is Bauer’s Senior Director of Research and Development, a position he has held since 2003. He has been working at Bauer since January 1995, and has occupied various management positions in product development or R&D. He had no previous experience with skates or footwear in general prior to joining the company.

[16] Mr. Covo’s testimony mainly concerned the R&D Department at Bauer as well as the Super Light and the Vapor Project. Specifically, he discussed the Vapor 8 skate and the importance of the one-piece quarter in subsequent Bauer skate models.

[17] On cross-examination, Mr. Covo was questioned on the difficulties encountered with the Vapor 8 skate. He discussed the Bauer Athlete’s Event, including the existence of confidentiality agreements as well as the handling of the tested products. The purpose of the Athlete’s Event was to show NHL players and get them to try new products and gather their feedback. The two industrial designs that were filed by Bauer under no. 88047 and no. 88048 to protect the skate designs developed as part of the Vapor Project were introduced in evidence during his cross-examination (TX-624 and TX-625 respectively).

[18] François Chênevert graduated in industrial design from the University of Montreal in 1990. He is the inventor listed in the ‘953 Patent. When he joined Bauer in 1994, he had no previous experience in skates or in footwear. At first, for a period of about six months, he worked with Alain Renaud, a very experienced skate patternmaker, who taught him the techniques of patternmaking. Thereafter, he worked on different R&D projects, including a project relating to inline skates. In September 1996, he became involved in the Vapor Project on which he worked almost exclusively until August 1997. He worked on this project with a large team that included Gaétan Champagne , Jean-Claude Lefebvre, Chris Langevin, Gerry Black and Ken Covo. He left Bauer in 2001 to work at BRP [11] where he began his employment in the snowmobile accessories department.

[19] Mr. Chênevert testified about the process that led him to the conception of the invention covered by the patent-in-suit. He explained how he came up with the idea of using a one-piece quarter starting with prototypes having an articulated cuff. He described in some detail the various steps of the Vapor Project, namely its objectives, the field testing done on skates that were already available on the market, the autopsies made on about 30 skates, [12] the research of materials, the making of several prototypes, the field testing as well as the issues encountered with the Vapor 8 skate.

[20] Mr. Chênevert was also questioned on a series of documents that were found in his Vapor Project file at Bauer (TX-476/TX-476a). However, it quickly became apparent that this file was not complete. He explained that he was not involved in the preparation and compiling of the documents in the present proceedings.

[21] Also, on cross-examination, Mr. Chênevert...

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