ABB Technology AG et al. v. Hyundai Heavy Industries Co., (2015) 475 N.R. 341 (FCA)

• Judge: Stratas, Webb and Near, JJ.A.
• Court: Federal Court of Appeal (Canada)
• Case Date: May 14, 2014
• Jurisdiction: Canada (Federal)
• Citations: (2015), 475 N.R. 341 (FCA);2015 FCA 181

ABB Tech. v. Hyundai Heavy Ind. (2015), 475 N.R. 341 (FCA)

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Temp. Cite: [2015] N.R. TBEd. AU.015

ABB Technology AG, ABB Inc. and ABB AG (appellants) v. Hyundai Heavy Industries Co., Ltd. (respondent)

(A-346-13; A-379-13; 2015 FCA 181; 2015 CAF 181)

Indexed As: ABB Technology AG et al. v. Hyundai Heavy Industries Co.

Federal Court of Appeal

Stratas, Webb and Near, JJ.A.

August 18, 2015.

Summary:

The plaintiffs alleged that the defendant had infringed two Canadian Letters Patent (772 patent and 781 patent) when the defendant sold several medium voltage gas-insulated switchgear (GIS) assemblies to British Columbia Hydro. The GIS assemblies were alleged to infringe a number of essential features claimed in the 772 and 781 patents. The defendant counterclaimed against the plaintiffs seeking declarations of invalidity respecting both patents. Only the liability issues were presently before the court.

The Federal Court, in a decision reported at (2013), 439 F.T.R. 118, dismissed the action and allowed the counterclaim.

The Federal Court, in a decision reported at [2013] F.T.R. Uned. 507, fixed costs in favour of the defendant in the amount of $350,000. The plaintiffs appealed both the decision on the merits and on costs.

The Federal Court of Appeal dismissed the appeal.

Courts - Topic 583

Judges - Duties - Re reasons for decisions - On an appeal in a patent case, the Federal Court of Appeal stated that "[u]nder the standard of palpable and overriding error, reasons are not meant to be the venue for a treasure hunt for error. We are not to comb through reasons, looking for slight inadequacy of expression or inconsequential mistake and, upon finding such an inadequacy or mistake, pounce upon it as justification to strike down the result in the case." - See paragraph 66.

Evidence - Topic 7002

Opinion evidence - Expert evidence - Acceptance, rejection and weight to be given to expert opinion - On appeal in a patent case, the appellant noted the absence of evidence before the trial judge that expressly contradicted the testimony of its experts - The Federal Court of Appeal held that, even if this was true, this was not a basis for finding that the trial judge had committed palpable and overriding error - "The Federal Court is not obligated to accept evidence just because there is no evidence contradicting it. It can reject that evidence provided that its rationale is explicit or evident from its reasons viewed in light of the record and is acceptable." - See paragraph 59.

Patents of Invention - Topic 1026

The specification and claims - Construction of a patent - General - On an appeal in a patent case, the Federal Court of Appeal held that the trial judge "... was right to avoid construing the patent in a manner that would unduly neglect its wording. Where patent language can bear more than one equally plausible meaning, one must adopt a 'reasonable view' of patent language to 'afford the inventor protection for that which he has actually in good faith invented' ... . But the [trial judge] correctly held that this principle does not mean that in all cases it must adopt 'any arguable interpretation that would uphold the patent.'" - See paragraph 45.

Patents of Invention - Topic 1026

The specification and claims - Construction of a patent - General - On an appeal in a patent case, the Federal Court of Appeal agreed with the trial judge's statement that "[i]n most cases the language of the patent, when viewed contextually and objectively, will be sufficient to establish what was intended thereby ensuring the attainment of its purpose. I would add that the purposive approach is not an invitation to the Court to ignore the ordinary rules of grammar and syntax. If an essential feature of a patent is defined in a specific way and a different more expansive term is also introduced than can include the specific term, one would not generally interpret the two terms as denoting the same thing. The usual purpose of using different words is to distinguish one feature from another and not to express synonymy." - See paragraph 45.

Patents of Invention - Topic 1031

The specification and claims - Construction of a patent - Essential and non-essential elements - The plaintiffs alleged that the defendant had infringed two Canadian patents (772 and 781 patents) when the defendant sold several medium voltage gas-insulated switchgear (GIS) assemblies to British Columbia Hydro - The GIS assemblies were alleged to infringe a number of essential features claimed in the patents - The trial judge stated that the 772 patent acknowledged the North American desire for redundant grounding between the circuit breaker and the outgoing cables and the corresponding need to introduce "both an additional isolator and an additional ground conductor" to the GIS assembly - This, in turn, created a problem of dimensioning the GIS gas compartment, which the inventors claimed to have solved by enlarging the circuit breaker compartment in the direction of the cable connections - The plaintiffs argued that because the 772 patent invention was directed at the North American market requirement for independent circuit breaker grounding on the outgoing side, claim 1 should not be interpreted to include as essential the cable grounding feature because that advantage was optional - They pointed out that cable grounding could be achieved outside of the GIS assembly and, despite illustrating that feature in the patent diagram and separately distinguishing it from the other identified components, it should be seen to be non-essential - This was an important issue because the defendant's GIS assemblies sold to BC Hydro did not incorporate a cable grounding feature - The judge held that the inventors included an independent cable grounding switch as an essential feature of claim 1 - The inventors had likely misunderstood the North American grounding requirements - Having included cable grounding as an essential feature of the claims, it was too late for the plaintiffs to resile from it - On appeal, the Federal Court of Appeal held that the plaintiffs had failed to establish the presence of any legal error or palpable and overriding error in the trial judge's assessment and application of the evidence before him on his construction of the scope of the invention asserted in claim 1 - See paragraphs 71 to 75.

Patents of Invention - Topic 1589

Grounds of invalidity - Lack of "inventive ingenuity" (obviousness) - Particular patents - The plaintiffs alleged that the defendant had infringed two Canadian patents (772 and 781 patents) when the defendant sold several medium voltage gas-insulated switchgear (GIS) assemblies to British Columbia Hydro - The GIS assemblies were alleged to infringe a number of essential features claimed in the 772 and 781 patents - The trial judge stated that the 781 patent offered a solution to the problem of visually verifying switch positions in an enclosed GIS capsule - According to the patent, the solution was to fit an inspection window into the housing of the GIS assembly in a line of sight to the switch - Visualization of the switch position was enhanced by incorporating coloured or topographical markings that acted as reference points on the moveable switch element - The judge rejected the plaintiffs' argument regarding the inventiveness of using a window to observe a different switch type in medium voltage GIS applications - The further suggestion by the plaintiffs' expert that the person of skill would be uninformed by the use of windows and sliding contact switches in high voltage GIS was unsustainable - The evidence from the defendant's experts conclusively established that the 781 patent was invalid for obviousness - Inspection windows were well-known in the prior art, were recognized as a means to view switch positions in several prior art references and standards applicable to GIS, and were required by many end users - He also found the use of coloured or topographical markings to be obvious as they had been previously used to facilitate visual verification of the switch position - The Federal Court of Appeal held that the trial judge's conclusions on obviousness, based as they were upon his assessment of the evidence, were not vitiated by any palpable and overriding error - See paragraphs 60 to 68.

Patents of Invention - Topic 1589

Grounds of invalidity - Lack of "inventive ingenuity" (obviousness) - Particular patents - The plaintiffs alleged that the defendant had infringed two Canadian patents (772 and 781 patents) when the defendant sold several medium voltage gas-insulated switchgear (GIS) assemblies to British Columbia Hydro - The GIS assemblies were alleged to infringe a number of essential features claimed in the patents - The trial judge stated that the 772 patent acknowledged the North American desire for redundant grounding between the circuit breaker and the outgoing cables and the corresponding need to introduce "both an additional isolator and an additional ground conductor" to the GIS assembly - This, in turn, created a problem of dimensioning the GIS gas compartment, which the inventors claimed to have solved by enlarging the circuit breaker compartment in the direction of the cable connections - The plaintiffs contended that the inventiveness of the 772 patent lay in the "counterintuitive idea of putting all of the described components into a single gas compartment" - The judge agreed with the defendant's expert that putting GIS switch components and a circuit breaker into a common gas compartment was "a well-known design expedient" as was the need to enlarge the compartment if required - If the designer did not want to expand the external dimension of the assembly, the obvious option would be to internally reduce the space allocated to other parts which, in this case, came from reducing the space allocated to the outgoing cables - For the most part, the dependant claims in both the 781 patent and the 772 patent described well-known features or devices that bore no apparent functional relationship to the working of the claimed inventions as described in the specifications and as expressed in the independent claims and they added nothing inventive to those claims - The Federal Court of Appeal found no palpable and overriding error in the trial judge's decision - See paragraphs 71 to 79.

Patents of Invention - Topic 1593

Grounds of invalidity - Lack of "inventive ingenuity" (obviousness) - Prior art - [See first Patents of Invention - Topic 1589 ].

Patents of Invention - Topic 8163

Practice - Appeals - Questions of law, fact or mixed fact and law (incl. applicable standard of review) - The Federal Court of Appeal discussed the standard of review applicable to a trial judge's construction of patent claims and determination of patent infringement claims - See paragraphs 21 to 30.

Patents of Invention - Topic 8163

Practice - Appeals - Questions of law, fact or mixed fact and law (incl. applicable standard of review) - [See Courts - Topic 583 ].

Practice - Topic 7115

Costs - Party and party costs - Special orders - Increase in scale of costs - Difficulty and complexity of proceedings - [See Practice - Topic 8568 ].

Practice - Topic 7243

Costs - Party and party costs - Offers to settle - Effect of failure to accept - [See Practice - Topic 8568 ].

Practice - Topic 8568

Costs - Federal Court of Canada - Patents of invention - Costs - The plaintiffs (ABB) alleged that the defendant had infringed two Canadian Letters Patent (772 patent and 781 patent) when the defendant sold several medium voltage gas-insulated switchgear (GIS) assemblies to British Columbia Hydro - The GIS assemblies were alleged to infringe a number of essential features claimed in the 772 and 781 patents - The defendant counterclaimed against ABB seeking declarations of invalidity respecting both patents - The trial judge dismissed the action and allowed the counterclaim - The judge fixed costs in favour of the defendant in the amount of $350,000 - ABB appealed both the decision on the merits and on costs - The Federal Court of Appeal dismissed both appeals - Regarding costs, the judge found that there were a number of features of the litigation that drove up the complexity of the case - Further, ABB had served an offer to settle roughly one month before trial that "represented a better outcome for [ABB] than the judgment that was ultimately rendered." - In his view, ABB should have given that offer "serious consideration." - It did not - See paragraphs 82 to 93.

Practice - Topic 8803

Appeals - General principles - Whether trial judge must give reasons for rejecting evidence or for credibility findings - [See Evidence - Topic 7002 ].

Practice - Topic 8804

Appeals - General principles - Duty of appellate court regarding discretionary orders - The Federal Court of Appeal stated that "... the standard of review of discretionary orders of the Federal Court is the same as that set out in for rulings on questions of mixed fact and law. '[A]bsent error on a question of law or an extricable legal principle, intervention is warranted only in cases of palpable and overriding error' ... To reiterate, palpable and overriding error is a high standard." - See paragraph 8.

Statutes - Topic 501

Interpretation - General principles - Purpose of legislation - Duty to promote object of statute - [See second Patents of Invention - Topic 1026 ].

Statutes - Topic 2270

Interpretation - Presumptions and rules in aid - Change of wording denotes change of meaning - [See second Patents of Invention - Topic 1026 ].

Cases Noticed:

Whirlpool Corp. et al. v. Camco Inc. et al., [2000] 2 S.C.R. 1067; 263 N.R. 88; 9 C.P.R.(4th) 129; 2000 SCC 67, dist. [para. 22].

Mylan Pharmaceuticals ULC v. AstraZeneca Canada Inc. - see AstraZeneca Canada Inc. et al. v. Mylan Pharmaceuticals ULC et al.

AstraZeneca Canada Inc. et al. v. Mylan Pharmaceuticals ULC et al. (2012), 432 N.R. 292; 2012 FCA 109, refd to. [para. 23].

Wenzel Downhole Tools Ltd. et al. v. National-Oilwell Canada Ltd. et al., [2014] 2 F.C. 459; 443 N.R. 173; 2012 FCA 333, refd to. [para. 23].

Bell Helicopter Textron Canada Limitée v. Eurocopter - see Eurocopter v. Bell Helicopter Textron Canada Ltd. et al.

Eurocopter v. Bell Helicopter Textron Canada Ltd. et al. (2013), 449 N.R. 111; 2013 FCA 219, dist. [para. 23].

Consolboard Inc. v. MacMillan Bloedel (Sask.) Ltd., [1981] 1 S.C.R. 504; 35 N.R. 390; 122 D.L.R.(3d) 203; 56 C.P.R.(2d) 145, refd to. [para. 23].

Corlac Inc. v. Weatherford Canada Inc. - see Weatherford Canada Ltd. et al. v. Corlac Inc. et al.

Weatherford Canada Ltd. et al. v. Corlac Inc. et al. (2011), 422 N.R. 49; 95 C.P.R.(4th) 101; 2011 FCA 228, refd to. [para. 23].

Cobalt Pharmaceuticals Company v. Bayer Inc. - see Bayer Inc. et al. v. Cobalt Pharmaceuticals Co. et al.

Bayer Inc. et al. v. Cobalt Pharmaceuticals Co. et al. (2015), 474 N.R. 311; 2015 FCA 116, refd to. [para. 24].

Canada v. South Yukon Forest Corp. - see South Yukon Forest Corp. et al. v. Canada

South Yukon Forest Corp. et al. v. Canada (2012), 431 N.R. 286; 2012 FCA 165, refd to. [para. 24].

Free World Trust v. Electro Santé Inc. et al., [2000] 2 S.C.R. 1024; 263 N.R. 150; 9 C.P.R.(4th) 168; 2000 SCC 66, refd to. [para. 25].

Unilever plc v. Procter & Gamble Inc. (1995), 184 N.R. 378; 61 C.P.R.(3d) 499 (F.C.A.), refd to. [para. 26].

Novartis AG v. Dexcel-Pharma Limited, [2008] EWHC 1266 (Pat); [2008] All E.R. (D) 97, refd to. [para. 26].

Monsanto Canada Inc. et al. v. Schmeiser et al. (2004), 320 N.R. 201; 2004 SCC 34, refd to. [para. 30].

Halford et al. v. Seed Hawk Inc. et al. (2006), 353 N.R. 60; 2006 FCA 275, refd to. [para. 30].

AB Hassle et al. v. Canada (Minister of National Health and Welfare) et al. (2002), 298 N.R. 323; 22 C.P.R.(4th) 1; 2002 FCA 421, refd to. [para. 30].

Catnic Components Ltd. v. Hill & Smith Ltd., [1982] R.P.C. 183, refd to. [para. 40].

Decor Grates Inc. v. Imperial Manufacturing Group Inc. et al. (2015), 472 N.R. 109; 2015 FCA 100, refd to. [para. 84].

Bull (David) Laboratories (Canada) Inc. v. Pharmacia Inc. et al., [1995] 1 F.C. 588; 176 N.R. 48; 58 C.P.R.(3d) 209 (F.C.A.), refd to. [para. 85].

Housen v. Nikolaisen et al., [2002] 2 S.C.R. 235; 286 N.R. 1; 219 Sask.R. 1; 272 W.A.C. 1; 2002 SCC 33, refd to. [para. 86].

Hryniak v. Mauldin, [2014] 1 S.C.R. 87; 453 N.R. 51; 314 O.A.C. 1; 2014 SCC 7, refd to. [para. 86].

Steel v. Canada (Attorney General) (2011), 418 N.R. 327; 2011 FCA 153, refd to. [para. 87].

Counsel:

Christopher C. Van Barr, Michael Crichton and Kiernan A. Murphy, for the appellants;

J. Alan Aucoin, Anthony Prenol and Sarah O'Grady, for the respondent.

Solicitors of Record:

Gowlings Lafleur Henderson LLP, Ottawa, Ontario, for the appellants;

Blake, Cassels & Graydon LLP, Toronto, Ontario, for the respondent.

These appeals were heard at Toronto, Ontario, on May 14, 2014, by Stratas, Webb and Near, JJ.A., of the Federal Court of Appeal. Stratas, J.A., delivered the following decision for the court at Ottawa, Ontario, on August 18, 2015.