Hershkovitz et al. v. Tyco Safety Products Canada Ltd., 2009 FC 256

• Judge: Martineau, J.
• Court: Federal Court (Canada)
• Case Date: December 04, 2008
• Jurisdiction: Canada (Federal)
• Citations: 2009 FC 256;(2009), 341 F.T.R. 228 (FC)

Hershkovitz v. Tyco Safety (2009), 341 F.T.R. 228 (FC)

MLB headnote and full text

Temp. Cite: [2009] F.T.R. TBEd. MR.026

Shmuel Hershkovitz, Systèmes de Sécurité Paradox ltée - Paradox Security Systems Ltd., and Pinhas Shpater (plaintiffs/defendants by counterclaim) v. Tyco Safety Products Canada Ltd., (defendant/plaintiff by counterclaim)

(T-426-04; 2009 FC 256)

Indexed As: Hershkovitz et al. v. Tyco Safety Products Canada Ltd.

Federal Court

Martineau, J.

March 12, 2009.

Summary:

The plaintiffs were the owner and assignee of Canadian Patent No. 2,169,670 and Canadian Patent No. 2,273,148. The object of the patents was a telephone line coupler circuit and method. The plaintiffs alleged infringement of certain claims of the patents through the manufacture, use and sale of certain alarm panels by the defendant. The defendant denied any infringement and counterclaimed by seeking the invalidity of the patents and related disclaimers.

The Federal Court dismissed the action and allowed the counterclaim. The court held that the disclaimers filed by the plaintiffs were invalid and, given the admission made by the patentee that the original claims were too broad, same could not subsist and the patents in suit were also invalid. In any event, the claims in suit, as disclaimed or prior to the disclaimers, were invalid because they were anticipated, obvious and/or an unpatentable aggregation. In the event of an appeal, the court made non-determinative findings with respect to infringement and related issues.

Equity - Topic 1006

Equitable relief - Accounting of profits - [See Patents of Invention - Topic 3102 ].

Patents of Invention - Topic 1032

The specification and claims - Construction of a patent - Particular patents - The plaintiffs were the owner and assignee of Canadian Patent No. 2,169,670 (the '670 patent) and Canadian Patent No. 2,273,148 (the '148 patent) - The object of the patents was a telephone line coupler circuit and method - The plaintiffs sued the defendant, alleging infringement of certain claims of the patents - The defendant denied any infringement and counterclaimed alleging invalidity of the patents and related disclaimers - The claims in suit as disclaimed included the phrase "a minimum of current to place a light-emitting diode of said receive opto-coupler in an operational range" - The defendant submitted that "minimum of current" meant "the least possible" and no more, and that a draw of current greater than the minimum avoided infringement - The plaintiffs submitted that "minimum of current" simply referred to a minimum required amount of DC current to bias the AC signal - Therefore, a greater amount of current fell within the scope of the claims in suit, as disclaimed, provided the light-emitting diode remained in an "operational range" - The plaintiffs submitted that "minimum" meant "at least" and not "the least possible" - The Federal Court adopted the plaintiffs' interpretation - The court concluded that "it is inconceivable that a skilled person reading the '670 and '148 patents would understand that the claims in suit are limited to a circuit in which the current drawn by the receive opto-coupler is exactly that required to place the light-emitting diode in an operational range, no more and no less. Rather, it is a range of current at any level within the operational range of the light-emitting diode" - See paragraphs 66 to 72.

Patents of Invention - Topic 1352

Disclaimer - Filing of (incl. validity) - The Federal Court stated that "while there is no statutory deadline for filing a disclaimer, the public disclosure function of patents and the general duty of good faith nevertheless require that a patentee file a disclaimer against an issued patent promptly and diligently when he or she becomes aware of a mistake, accident or inadvertence ... Indeed, where a patentee delays a long time after he has become aware of the condition existing as specified in subsection 50(1) [of the Patent Act] (now subsection 48(1)) and then files a disclaimer shortly before bringing action for infringement, this cast serious doubts on the good faith of the patentee and the validity of the disclaimer ... As recently stated by this court, 'a claim which is overly broad in a patent that has not yet been adjudged to be invalid may be saved from a finding of invalidity by a court if a disclaimer is filed but only if filed in a timely way' ... Finally, when the validity of a disclaimer is contested, the onus of showing that there was 'mistake, accident or inadvertence' is on the patentee, and the propriety or validity of such disclaimer may be reviewed by the court if the patent is litigated. Moreover, according to the case law, the validity of the disclaimer depends on the 'state of mind' of the patentee at the time he made his specification. The patentee must be able to demonstrate to the court that the disclaimer is made in good faith and not for an improper purpose. Where the patentee does not discharge this burden, the disclaimer will be held to be invalid" - See paragraphs 78 to 79.

Patents of Invention - Topic 1352

Disclaimer - Filing of (incl. validity) - The plaintiffs were the owner and assignee of Canadian Patent No. 2,169,670 (the '670 patent) and Canadian Patent No. 2,273,148 (the '148 patent) - The object of the patents was a telephone line coupler circuit and method - The Federal Court held that disclaimers filed by the plaintiffs were not in the prescribed form - The court stated that "the patentee has not respected the requirements of items 3(1) of 3(2) of Form 2. In each disclaimer, the patentee states that he disclaims 'the entirety of the specified claims, with the exception' of the 'telephone line coupler circuit' ('670 patent) or of the 'method' ('148 patent) 'as claimed' by the patentee. In other words, the patentee disclaims the entirety of the specified claim but goes on to reassert its entirety (since each claim already claims a 'telephone line coupler circuit' or a 'method'). As required by the Patents Rules, the patentee does not specify in the disclaimers which existing element(s) of the telephone line coupler circuit or method, as claimed, is (are) too broad and must accordingly be disclaimed" - See paragraph 80.

Patents of Invention - Topic 1352

Disclaimer - Filing of (incl. validity) - The plaintiffs were the owner and assignee of two Canadian patents respecting a telephone line coupler circuit and method - The Federal Court held that disclaimers filed by the plaintiffs were invalid - The court stated that "The incorporation of a 'series connection' and other new elements added by the disclaimer results in claiming a new and different combination, rather than limiting a combination already claimed. This is not permissible under section 48 of the Patent Act" - Further "While the additional elements introduced by the disclaimers may have the ultimate effect of limiting the monopoly sought by the patentee, they nevertheless introduce new inventive features in the particular combination of elements originally claimed by the patentee as inventive. While the court considers that such an amendment may be permissible in the context of a reissue application, in view of its substantive character, it is not the type of procedural amendment that can summarily be allowed to the patentee, without any examination by the [Canadian Intellectual Property Office], by the simple filing of a disclaimer" - See paragraphs 81 to 83.

Patents of Invention - Topic 1352

Disclaimer - Filing of (incl. validity) - The plaintiffs were the owner and assignee of two Canadian patents respecting a telephone line coupler circuit and method - The Federal Court held that disclaimers filed by the plaintiffs were invalid - In view of the numerous deficiencies in the plaintiffs' evidence, the court was unable to find that there had been a bona fide "mistake" - The court stated that "According to the evidence, the disclaimer was chosen by the plaintiffs over reissue in Canada for the purpose of expediting legal action against the defendant. According to the evidence, the disclaimers were triggered by litigation strategy rather than by the need to correct a bona fide mistake, accident or inadvertence ... Therefore, the plaintiffs have not met their burden of satisfying the court that all the requirements of section 48 of the Patent Act are satisfied. Thus, the disclaimers must be held invalid in the circumstances" - See paragraphs 84 to 92.

Patents of Invention - Topic 1352

Disclaimer - Filing of (incl. validity) - The plaintiffs were the owner and assignee of two Canadian patents respecting a telephone line coupler circuit and method - The plaintiffs sued the defendant, alleging infringement of certain claims of the patents - The defendant counterclaimed alleging invalidity of the patents and related disclaimers - The Federal Court held that the disclaimers filed by the plaintiffs were invalid - With respect to the consequences of filing the invalid disclaimers, the court stated, inter alia, "the patentee has made a general admission against his interest that the specification in the original patents is 'too broad' ... It is not the court's function to now re-determine which part, if any of the specification, is too broad. This suffices to simply declare that all the disclaimed claims of the patents in suit, as they stood prior to the disclaimers (which are held to be invalid), are invalid" - See paragraphs 93 to 96.

Patents of Invention - Topic 1501

Grounds of invalidity - General - [See fifth Patents of Invention - Topic 1352 ].

Patents of Invention - Topic 1513

Grounds of invalidity - General - Unpatentable aggregation - The plaintiffs were the owner and assignee of Canadian Patent No. 2,169,670 (the '670 patent) and Canadian Patent No. 2,273,148 (the '148 patent) - The object of the patents was a telephone line coupler circuit and method - The plaintiffs alleged infringement of certain claims of the patents through the manufacture, use and sale of certain alarm panels by the defendant - The defendant counterclaimed seeking the invalidity of the patents and related disclaimers - The Federal Court stated, inter alia, "the court dismisses the defendant's allegation that the claims in suit are mere juxtapositions of known parts and that there is no synergy between the parts ... Whether the independent claims purportedly giving effect to this particular arrangement are obvious or anticipated is a question which needs to be analyzed separately by the court, but it is certainly not an unpatentable aggregation. The court, however, has serious reservations with the validity of the dependent claims of the '670 patent. In the court's opinion, the additional elements mentioned in same are merely 'aggregated' to the disclosed invention'" - See paragraphs 148 to 149.

Patents of Invention - Topic 1589

Grounds of invalidity - Lack of "inventive ingenuity" (obviousness) - Particular patents - [See Patents of Invention - Topic 1605 ].

Patents of Invention - Topic 1605

Grounds of invalidity - Anticipation - Particular patents - The plaintiffs were the owner and assignee of two Canadian patents respecting a telephone line coupler circuit and method - The plaintiffs alleged infringement of certain claims of the patents through the manufacture, use and sale of certain alarm panels by the defendant - The defendant denied any infringement and counterclaimed by seeking the invalidity of the patents and related disclaimers - The Federal Court dismissed the action and allowed the counterclaim - The court held, inter alia, that the claims in suit, as disclaimed or prior to the disclaimers, were invalid on the basis of anticipation and obviousness - See paragraphs 97 to 147.

Patents of Invention - Topic 2888

Infringement of patent - Acts constituting an infringement - Of particular patents - The plaintiffs were the owner and assignee of two Canadian patents respecting a telephone line coupler circuit and method - The plaintiffs alleged infringement of certain claims of the patents through the manufacture, use and sale of certain alarm panels by the defendant - The defendant denied any infringement - The defendant's assertion of non-infringement was based on the assertion that the products in suit drew more than "[the] minimum current required to place [the] light-emitting diode of [the] receive opto-coupler in an operational range", as required by the language added by the disclaimers to the claims in suit - The Federal Court stated that "the defendant cannot be successful in its defence of non-infringement unless it is successful in convincing the court that its narrow interpretation of the expression 'a minimum of current' is correct from the point of view of a person skilled in the art ... The court has already determined that the word 'minimum' added in the claims in suit, as disclaimed, would be construed by a person skilled in the art as referring to a 'threshold' and not the 'least possible' of current to place the light-emitting diode in an 'operational range'. Accordingly, a draw of DC current greater than the minimum will infringe the claims in suit, as disclaimed, provided the current in question were not so much as to exceed the maximum operating range of the light-emitting diode" - The court found that the defendant's products incorporated all of the essential elements of the claims in suit (prior to or after the disclaimers recorded) - See paragraphs 154 to 158.

Patents of Invention - Topic 2890

Infringement of patent - Acts constituting an infringement - Inducing infringement - The plaintiffs were the owner and assignee of two Canadian patents respecting a telephone line coupler circuit and method - The plaintiffs alleged infringement of certain claims of the patents through the manufacture, use and sale of certain alarm panels by the defendant - The defendant counterclaimed, seeking the invalidity of the patents and related disclaimers - The Federal Court held that the disclaimers filed by the plaintiffs and the plaintiffs' patents were invalid - The court further stated that, if it was ultimately found on appeal that the claims in suit, as disclaimed or prior to the disclaimers, were valid, then the court found that the plaintiffs had proven that the defendant's products directly infringed the claims in suit, as disclaimed or prior to the disclaimers - However, the court stated that it would have dismissed the plaintiffs' allegation that the defendant had knowingly induced the distributors or ultimate users of the products in suit to infringe the claims in suit - The court stated that "It is simply not sufficient to generally allege the products in suit are sold with instructions as to their use and that the defendant's customers or ultimate users infringe the patents in suit when they use the defendant's products in suit 'as instructed'" - Completion of the infringement act had to result from the influence of the direct infringer - The evidence of such influence was non-existent in this case - The court therefore could not conclude that the infringing acts by the defendant's customers or ultimate users would not have occurred without the defendant's influence - See paragraphs 159 to 160.

Patents of Invention - Topic 3102

Infringement of patent - Remedies - Damages or accounting of profits - The plaintiffs were the owner and assignee of two Canadian patents respecting a telephone line coupler circuit and method - The plaintiffs alleged infringement of certain claims of the patents through the manufacture, use and sale of certain alarm panels by the defendant - The defendant counterclaimed, seeking the invalidity of the patents and related disclaimers - The Federal Court held that the disclaimers filed by the plaintiffs and the plaintiffs' patents were invalid - The court further stated that, if it was ultimately found on appeal that the claims in suit, as disclaimed or prior to the disclaimers, were valid, then the court found that the plaintiffs had proven that the defendant's products directly infringed the claims in suit, as disclaimed or prior to the disclaimers - However, with respect to the issue of whether the plaintiffs should be allowed the equitable remedy of an accounting of profits, the court stated that any entitlement to an accounting of profits, which was subject to the exercise of the court's discretionary power, necessarily included looking into the plaintiffs' conduct - The court considered that the plaintiffs did not act diligently after they were advised in January 2000 of the defendant's position with respect to their infringement allegations and that the plaintiffs chose to improve their strategic position by filing disclaimers in October 2003 and waited four years in instituting the present proceedings - The court concluded that the plaintiffs should not be allowed to elect for an accounting of profits - The court further stated that, in any event "damages or accounting of profits should not be computed prior to the period preceding the filing of the disclaimers, assuming that same are held to be valid on appeal. Such approach is consistent with the admission made by the patentee in the disclaimers that the original claims were too broad, and thus could be invalidated" - See paragraph 161.

Cases Noticed:

Dimplex North America Ltd. v. CFM Corp. (2006), 292 F.T.R. 38; 54 C.P.R.(4th) 435; 2006 FC 586, refd to. [para. 32].

Consolboard Inc. v. MacMillan Bloedel (Saskatchewan) Ltd., [1981] 1 S.C.R. 504; 35 N.R. 390; 122 D.L.R.(3d) 203, refd to. [para. 36].

Whirlpool Corp. et al. v. Camco Inc. et al., [2000] 2 S.C.R. 1067; 263 N.R. 88; 2000 SCC 67, refd to. [para. 36].

Free World Trust v. Electro Santé Inc. et al., [2000] 2 S.C.R. 1024; 263 N.R. 150; 2000 SCC 66, refd to. [para. 36].

Monsanto Co. v. Commissioner of Patents (1976), 13 N.R. 56; 28 C.P.R.(2d) 118 (F.C.A.), refd to. [para. 74].

Monsanto Co. v. Commissioner of Patents (1975), 18 C.P.R.(2d) 170 (F.C.T.D.), revd. (1976), 13 N.R. 56; 28 C.P.R.(2d) 118 (F.C.A.), refd to. [para. 75].

Van Worman v. Champion Paper & Fibre Co. (1942), 129 F.2d 428, refd to. [para. 76].

May & Baker Ltd. v. Boots Pure Drug Co. - see May & Baker Ltd. and Ciba Ltd.'s Letters Patent, Re.

May & Baker Ltd. and Ciba Ltd.'s Letters Patent, Re (1948), 65 R.P.C. 255 (Ch.D.), affd. (1948), 66 R.P.C. 8 (C.A.), affd. (1950), 67 R.P.C. 23 (H.L.), refd to. [para. 76].

AMP Inc. v. Hellermann, [1961] R.P.C. 160, revd. [1962] R.P.C. 55 (H.L.), refd to. [para. 76].

Richards Packaging Inc. v. Canada (Attorney General) (2007), 305 F.T.R. 99; 59 C.P.R.(4th) 84; 2007 FC 11, affd. (2008), 371 N.R. 377; 66 C.P.R.(4th) 1; 2008 FCA 4, refd to. [para. 77].

Searle (G.D.) & Co. et al. v. Novopharm Ltd. et al., [2008] 1 F.C.R. 477; 296 F.T.R. 254; 2007 FC 81, revd. [2008] 1 F.C.R. 529; 361 N.R. 290; 2007 FCA 173, refd to. [para. 78].

Bristol-Myers Squibb Canada Co. et al. v. Apotex Inc. et al. (2009), 342 F.T.R. 161; 2009 FC 137, refd to. [para. 78].

Pfizer Canada Inc. et al. v. Apotex Inc. et al. (2007), 319 F.T.R. 48; 61 C.P.R.(4th) 305; 2007 FC 971, refd to. [para. 79].

Trubenzing Process Corp. v. John Forsyth Ltd. (1941), 1 C.P.R. 89; 2 Fox Pat. C. 11 (Ont. H.C.), affd. [1942] 2 D.L.R. 539; 2 C.P.R. 89 (Ont. C.A.), revd. [1943] 4 D.L.R. 577; 3 C.P.R. 1 (S.C.C.), refd to. [para. 79].

Canadian Celanese Ltd. v. B.V.D. Co., [1939] 2 D.L.R. 289 (P.C.), refd to. [para. 93].

Pfizer Canada Inc. et al. v. Canada (Minister of Health) et al. (2007), 366 N.R. 347; 60 C.P.R.(4th) 81; 2007 FCA 209, refd to. [para. 94].

Sanofi-Synthelabo Canada Inc. et al. v. Apotex Inc. et al. (2008), 381 N.R. 125; 2008 SCC 61, refd to. [para. 98].

Synthon BV v. Smithkline Beecham plc, [2005] N.R. Uned. 180; [2006] 1 E.R. 685; [2005] UKHL 59, refd to. [para. 100].

Windsurfing International Inc. v. Tabur Marine (Great Britain) Ltd., [1985] R.P.C. 59 (C.A.), refd to. [para. 135].

Pozzoli SPA v. BDMOSA, [2007] F.S.R. 37; [2007] EWCA Civ. 588, refd to. [para. 135].

Domtar Ltd. v. MacMillan Bloedel Packaging Ltd. (1977), 33 C.P.R.(2d) 182 (F.C.T.D.), affd. (1978), 24 N.R. 85; 41 C.P.R.(2d) 182 (F.C.A.), refd to. [para. 148].

Authors and Works Noticed:

Barrigar, Robert H., Canadian Patent Act Annotated (2nd Ed.) (2008 Looseleaf Update), p. PA-28.11-12 [para. 148].

Fox, Harold G., The Canadian Law and Practice Relating to Letters Patent for Inventions (4th Ed. 1969), pp. 344, 345, 347 [para. 76].

Graf, Rudolph F., Encyclopedia of Electronic Circuits (1991), vol. 3 [para. 137].

McClenahan, R.G., Thoughts on Reissue and Disclaimer (1973), 7 C.P.R.(2d) 251, generally [para. 75]; p. 260 [para. 77].

Parr, Richard J., Disclaimers in Patents, vol. 41, series 7 P.T.I.C. Bull. 754, p. 756 [para. 74].

Riches, George H., Reissue and Disclaimers (1950), 11 C.P.R. (Sec. I) 37, p. 46 [para. 77].

Vaver, David, Intellectual Property Law: Copyright, Patents, Trade-Marks (1997), p. 144 [para. 94].

Counsel:

George R. Locke, Daniel Artola and Louis Gratton, for the plaintiffs/defendants by counterclaim;

Marek Nitoslawski, Hugh Mansfield and David Turgeon, for the defendant/plaintiff by counterclaim.

Solicitors of Record:

Ogilvy Renault, LLP, Montreal, Quebec, for the plaintiffs/defendants by counterclaim;

Fasken Martineau Dumoulin, Montreal, Quebec, for the defendant/plaintiff by counterclaim.

This action and counterclaim were heard on various dates between November 3 and December 4, 2008, at Montreal, Quebec, before Martineau, J., of the Federal Court, who delivered the following decision on March 12, 2009.