Beloit Canada Ltd. v. Valmet Oy, (1988) 82 N.R. 235 (FCA)

• Judge: Pratte, Marceau and MacGuigan, JJ.
• Court: Federal Court of Appeal (Canada)
• Case Date: February 01, 1988
• Jurisdiction: Canada (Federal)
• Citations: (1988), 82 N.R. 235 (FCA)

Beloit Can. Ltd. v. Valmet Oy (1988), 82 N.R. 235 (FCA)

MLB headnote and full text

Valmet Oy (appellant) v. Beloit Canada Ltee/Ltd. and Beloit Corporation (respondents)

Valmet-Dominion Inc. (appellant) v. Beloit Canada Ltee/Ltd. and Beloit Corporation (respondents)

(No. A-602-86)

Indexed As: Beloit Canada Ltd. v. Valmet Oy

Federal Court of Appeal

Pratte, Marceau and MacGuigan, JJ.

February 1, 1988.

Summary:

Beloit Canada Ltd. and Valmet Oy each patented the same invention for the press section of a paper making machine. The invention patented was a combination of known components. Each brought an action against the other for patent infringement and claimed the invalidity and expungement of the other's patent. The Federal Court of Canada, Trial Division, in a decision unreported in this series of reports, held that both patents should be expunged for obviousness and anticipation. The plaintiff appealed.

The Federal Court of Appeal in a judgment reported 64 N.R. 287 allowed the appeal and held that the patents were not invalid for either obviousness or anticipation, but that Beloit's patent should prevail as prior in time and that Valmet Oy's patent should be expunged. The Court of Appeal enjoined Valmet Oy from manufacturing, using, selling or inducing others to use the press sections. Valmet Oy applied for leave to appeal.

The Supreme Court of Canada refused leave to appeal.

Just after the original judgment of the Trial Division, Valmet Oy and another company incorporated Valmet-Dominion Inc. (V.D.I.) to manufacture and sell press sections. After the judgment of the Federal Court of Appeal, V.D.I. continued to manufacture and sell press sections and Valmet Oy continued to supply parts. Beloit initiated contempt proceedings against both Valmet Oy and its subsidiary V.D.I., claiming that in violation of the injunction Valmet Oy engineers helped start up a press section sold by V.D.I. and Valmet Oy supplied parts to V.D.I.

The Federal Court of Canada, Trial Division, in a judgment reported 6 F.T.R. 241, held both Valmet Oy and V.D.I. guilty of contempt and fined them accordingly. They appealed.

The Federal Court of Appeal allowed the appeal and held that neither was guilty of contempt. The court held that Valmet Oy's engineers did not help on the press section of the paper making machine sold by the subsidiary and the supplying of parts did not violate the combination patent, the components of which were not protected. The court held that V.D.I. acted on its own and not as Valmet Oy's puppet, so Valmet Oy neither overtly nor by its failure to control V.D.I. induced V.D.I. to violate the patent.

Contempt - Topic 1

General principles - The Federal Court of Appeal set out the general principles respecting contempt, including how contempt may be committed, who may be found in contempt, the standard of proof of contempt and the scope of restrictions under an injunction - See paragraph 23.

Contempt - Topic 690

What constitutes contempt - Judgments and orders - Injunctions - Disobedience of - Beloit and Valmet Oy each patented the same invention for the press section of a paper making machine - The invention patented was a combination of known components, which anyone was entitled to make - Valmet Oy's patent was expunged and Valmet Oy was ordered to stop manufacturing and selling the press sections - A subsidiary of Valmet Oy continued to manufacture and sell press sections and Valmet Oy continued to supply parts to the subsidiary - Beloit initiated contempt proceedings against both Valmet Oy and its subsidiary, claiming that in violation of the injunction Valmet Oy engineers helped start up a press section sold by the subsidiary and Valmet Oy supplied parts to the subsidiary - The Federal Court of Appeal held that there was no contempt by Valmet Oy, because its engineers did not help on the press section of the paper making machine sold by the subsidiary and the supplying of parts did not violate the combination patent, the components of which were not protected - The court held that the subsidiary acted on its own and not as Valmet Oy's puppet, so Valmet Oy neither overtly nor by its failure to control the subsidiary induced the subsidiary to violate the patent.

Contempt - Topic 3024

Persons liable - Particular matters - Injunctions - Violation of - The Federal Court of Appeal stated that the only person who may disobey an injunction and be found in contempt is the person enjoined - However, a third party, who knowingly aids and abets a party to disobey an injunction, may also be found guilty of contempt, not for breach of the injunction but for acting in a manner that interfered with the course of justice - See paragraph 23.

Contempt - Topic 5082

Practice - Evidence - Standard of proof - The Federal Court of Appeal held that on a show cause hearing for contempt of court pursuant to rule 355 of the Federal Court Rules, the court must be satisfied beyond a reasonable doubt that the provisions of an injunction had been violated before a finding of contempt for disobedience of the injunction will be made - See paragraph 23.

Patents of Invention - Topic 2924

Infringement of patent - Acts not constituting infringement - Supplying components of combination patent - Valmet Oy was enjoined from manufacturing or selling a patented combination invention - Elements of the patent were well known and anyone could manufacture and sell them - The Federal Court of Appeal held therefore that Valmet Oy did not infringe the patent by selling components of the invention - The court stated the rule that there is no patent infringement in selling an article which does not itself infringe the patent, even if the seller knows that the buyer intends to use it to infringe the patent - There are two exceptions: (1) where the seller sells all of the components of the invention for assembly by the buyer and (2) where the buyer, knowingly and for his own ends and benefit, induces or procures the buyer to infringe the patent - See paragraph 30.

Cases Noticed:

Marengo v. Daily Sketch and Sunday Graphic Ltd. (1948), 65 R.P.C. 242, refd to. [para. 23].

Windsurfing International Inc. et al. v. Bic Sports Inc. (1985), 63 N.R. 218; 8 C.P.R.(3d) 241, consd. [para. 30].

Incandescent Gas Light Co. Ltd. v. New Incandescent Mantle Co. (1898), 15 R.P.C. 81, consd. [para. 30].

Slater Steel Industries Ltd. et al. v. R. Payer Co. Ltd. et al. (1968), 38 Fox Patent Cases 139, consd. [para. 30].

Canada Metal Co. Ltd. et al. v. C.B.C. et al. (1974), 4 O.R.(2d) 585, refd to. [para. 33].

Rohm & Haas Company v. Polycast Technology Corporation et al. (1972), 174 U.S.P.Q. 293, refd to. [para. 33].

Statutes Noticed:

Federal Court Rules, rule 355(1) [para. 23].

Patent Act, R.S.C. 1970, c. T-4, sect. 46 [para. 30].

Authors and Works Noticed:

Halsbury's Laws of England (4th Ed.), vol. 24, para. 1104 [para. 33].

Counsel:

Jacques A. Leger and Franeois Grenier, for Valmet Oy;

James D. Kokonis, Q.C., and John Boch Novic, for Valmet-Dominion Inc.;

Donald J. Wright, Q.C., and J. Douglas Wilson, for the respondents.

Solicitors of Record:

Leger, Robic & Richard, Montreal, Quebec, for Valmet Oy;

Smart & Biggar, Ottawa, Ontario, for Valmet-Dominion Inc.;

Ridout & Maybee, Toronto, Ontario, for the respondents.

This case was heard on November 16-20, 1987, at Montreal, Quebec, before Pratte, Marceau and MacGuigan, JJ., of the Federal Court of Appeal.

On February 1, 1988, the judgment of the Federal Court of Appeal was delivered and the following opinions were filed:

Pratte, J. (MacGuigan, J., concurring) - see paragraphs 1 to 40;

Marceau, J. - see paragraphs 41 to 47.