Unilever plc v. Procter & Gamble Inc., (1995) 184 N.R. 378 (FCA)

• Judge: Isaac, C.J., Stone and McDonald, JJ.A.
• Court: Federal Court of Appeal (Canada)
• Case Date: June 28, 1995
• Jurisdiction: Canada (Federal)
• Citations: (1995), 184 N.R. 378 (FCA)

Unilever plc v. Procter & Gamble Inc. (1995), 184 N.R. 378 (FCA)

MLB headnote and full text

Procter & Gamble Inc. and The Procter & Gamble Company (appellants) v. Unilever PLC and Lever Brothers Limited (respondents)

(A-324-93)

Indexed As: Unilever plc v. Procter & Gamble Inc.

Federal Court of Appeal

Isaac, C.J., Stone and McDonald, JJ.A.

June 28, 1995.

Summary:

The plaintiffs (Unilever plc. and Lever Bros.) owned a patent for "additives for clothes dryers", relating to a method of softening damp clothing in a hot-air me­chanically-agitated or tumble-action laundry dryer. The defendants (the Procter & Gamble companies) began marketing "Bounce" fabric softener sheets for use in clothes dryers. The plaintiffs sued the defendants for patent infringement and sought a declaration that the patent was valid, plus injunctive relief. The defendants counterclaimed, arguing that the patent was invalid.

The Federal Court of Canada, Trial Divi­sion, in a decision reported 60 F.T.R 241, held that the patent was valid, allowed the plaintiffs' action and ordered the defendants to pay royalties to the plaintiffs. The defen­dants appealed and the plaintiffs cross-appealed.

The Federal Court of Appeal dismissed the appeal and cross-appeal.

Patents of Invention - Topic 1026

The specification and claims - Construc­tion of a patent - General - The Federal Court of Appeal reviewed the principles applicable in construing a patent - See paragraphs 9, 10.

Patents of Invention - Topic 1127

The specification and claims - The de­scription - Requirement of distinct and explicit terms - The plaintiffs owned a patent for "additives for clothes dryers", relating to a method of softening damp clothing in dryers - The defendants mar­keted a product called "Bounce" fabric softener sheets - The plaintiffs sued for patent infringement - The defendants attacked the validity of the patent, arguing that the patent claim was ambiguous - The Federal Court of Canada, Trial Division, held that the patent was valid - The Fed­eral Court of Appeal affirmed the decision - See paragraphs 29 to 32.

Patents of Invention - Topic 1130

The specification and claims - The de­scription - Claims for more than what was invented - The plaintiffs owned a patent for "additives for clothes dryers", relating to a method of softening damp clothing in dryers - The defendants marketed a prod­uct called "Bounce" fabric softener sheets - The plaintiffs sued for patent infringe­ment - The defendants attacked the validi­ty of the patent, arguing that the claims were broader than the invention described by the inventors - The Federal Court of Canada, Trial Division, rejected the defen­dants' argument - The Federal Court of Appeal affirmed the decision - See para­graphs 20 to 28.

Patents of Invention - Topic 1502

Grounds of invalidity - Onus and standard of proof - The Federal Court of Appeal discussed the standard of proof where a patent is attacked for want of validity - See paragraph 18.

Patents of Invention - Topic 1506

Grounds of invalidity - General - Particu­lar patents - Additives for clothes dryers - The plaintiffs owned a patent for "ad­ditives for clothes dryers", relating to a method of softening damp clothing in dryers - The defendants marketed a prod­uct called "Bounce" fabric softener sheets - The plaintiffs sued for patent infringe­ment - The defendants attacked the validi­ty of the patent on several grounds, in­cluding ambiguity and anticipation - The Federal Court of Canada, Trial Division, rejected all grounds of invalidity - The Federal Court of Appeal affirmed the decision - See paragraphs 8 and 29 to 32.

Patents of Invention - Topic 1605

Grounds of invalidity - Anticipation - Particular patents - Additives for clothes dryers - The plaintiffs owned a patent for "additives for clothes dryers", relating to a method of softening damp clothing in dryers - The defendants marketed a prod­uct called "Bounce" fabric softener sheets - The plaintiffs sued for patent infringe­ment - The defendants attacked the validi­ty of the patent on several grounds, in­cluding anticipation - The Federal Court of Canada, Trial Division, rejected the anticipation argument - The Federal Court of Appeal affirmed the decision - See paragraph 8.

Patents of Invention - Topic 2888

Infringement of patent - Acts constituting an infringement - Of particular patents - Additives for clothes dryers - The plain­tiffs (Lever Brothers Ltd.), owned a patent for "additives for clothes dryers", relating to a method of softening damp clothing in dryers - The defendants (Procter & Gamble), marketed a product called "Bounce" fabric softener sheets - The plaintiffs sued the defendants for patent infringement - The Federal Court of Canada, Trial Division, allowed the action - The Federal Court of Appeal affirmed the decision - See paragraphs 11 to 16.

Patents of Invention - Topic 3105

Infringement of patent - Remedies - Royalties - The Federal Court of Canada, Trial Division, found Procter & Gamble companies (the defendants) guilty of patent infringement because they marketed "Bounce" fabric softener sheets in Canada, contrary to Lever Brothers (the plaintiffs') patent - As a remedy, the court awarded the plaintiffs royalties and refused to award an accounting of profits - The plaintiffs appealed arguing that the trial judge erred in refusing to award an ac­counting of profits - The Federal Court of Appeal dismissed the appeal - See para­graphs 49 to 54.

Patents of Invention - Topic 3105

Infringement of patent - Remedies - Royalties - The Federal Court of Canada, Trial Division, found Procter & Gamble companies (the defendants) guilty of patent infringement because they marketed "Bounce" fabric softener sheets in Canada, contrary to Lever Brothers (the plaintiffs') patent - As a remedy, the court awarded the plaintiffs royalties at a "generous, but non-confiscatory rate", to be determined by reference, on all sales of Canadian made "Bounce" from the time "Bounce" started to be imported, assembled, packaged and sold in and from Canada - A higher royalty rate would be instituted from the time of the reasons for judgment until expiry of the patent in 1994 - No permanent injunction was granted - The Federal Court of Appeal affirmed the decision - See paragraphs 44 to 48.

Patents of Invention - Topic 3823

Infringement actions - Damages - Rate of royalty - [See second Patents of Inven­tion - Topic 3105 ].

Patents of Invention - Topic 3827

Infringement actions - Damages - Profits - Accounting - [See first Patents of Invention - Topic 3105 ].

Practice - Topic 3756

References and inquiries - Order for reference after trial - Effect of - [See Practice - Topic 5532 ].

Practice - Topic 5532

Judgments and orders - Consent orders - Effect of - The Federal Court of Canada, Trial Division, found the defendants guilty of patent infringement and awarded the plaintiffs royalties at a "generous, but non-confiscatory rate", to be determined by reference in a certain manner - The de­fendants appealed, arguing that the trial judge lacked jurisdiction "to address the issue of quantum of damages" because of a consent order made by a pretrial con­ference judge under rule 480 that questions respecting damages would be determined by reference - The Federal Court of Appeal held that neither rule 480, nor an order made thereunder, deprived the judge of authority to determine issues of law such as the measure of damages - Here the judge was giving guidance as to measure of damages as opposed to "quan­tum" - See paragraphs 38 to 43.

Practice - Topic 8327.1

Costs - Appeals - Costs of appeal - Rais­ing tariff - Considerations - The plaintiffs sued the defendants for patent infringement and the defendants challenged the validity of the patent - The Federal Court of Canada, Trial Division, held that the patent was valid and allowed the infringement action - Both sides appealed and the plaintiffs sought increased costs of the appeal arguing, that the issues were com­plex and the defendants conduct unneces­sarily lengthened the appeal - The Federal Court of Appeal dismissed the appeals but allowed the increase in costs - The court rejected the argument that the costs should be increased because of complexity of the issues, but referred to other factors justify­ing the increase - See paragraphs 49 to 59.

Cases Noticed:

American Cyanamid Co. v. Berk Phar­maceuticals Ltd., [1976] R.P.C. 231 (Ch. D.), refd to. [para. 9].

Henriksen v. Tallon (No. 2), [1965] R.P.C. 434 (H.L.), refd to. [para. 10].

Burton Parsons Chemicals Inc. et al. v. Hewlett-Packard (Canada) Ltd. et al., [1976] 1 S.C.R. 555; 3 N.R. 553; 17 C.P.R.(2d) 97, refd to. [para. 10].

Monsanto Co. v. Commissioner of Patents, [1979] 2 S.C.R. 1108; 28 N.R. 181, refd to. [para. 10].

Consolboard Inc. v. MacMillan Bloedel (Saskatchewan) Ltd., [1981] 1 S.C.R. 504; 35 N.R. 390, refd to. [para. 10].

TRW Inc. v. Walbar of Canada Inc. (1991), 132 N.R. 161; 39 C.P.R.(3d) 176 (F.C.A.), refd to. [para. 10].

Computalog Ltd. v. Comtech Logging Ltd. (1992), 142 N.R. 216; 44 C.P.R.(3d) 77 (F.C.A.), refd to. [para. 10].

Nekoosa Packaging Corp. et al. v. AMCA International Ltd. et al. (1994), 172 N.R. 387; 56 C.P.R.(3d) 470 (F.C.A.), refd to. [para. 10].

Sandoz Patents Ltd. v. Gilcross Ltd., [1974] S.C.R. 1336, refd to. [para. 10].

Stein Estate v. Ship Kathy K, [1976] 2 S.C.R. 802; 6 N.R. 359; 62 D.L.R.(3d) 1, refd to. [para. 16].

N.V. Bocimar S.A. v. Century Insurance Co. of Canada, [1987] 1 S.C.R. 1247; 76 N.R. 212, refd to. [para. 16].

Diversified Products Corp. v. Tye Sil Corp. (1991), 125 N.R. 218; 35 C.P.R.(3d) 350 (F.C.A.), refd to. [para. 18].

Amfac Foods Inc. et al. v. Irving Pulp & Paper Ltd. (1986), 72 N.R. 290; 12 C.P.R.(3d) 193 (F.C.A.), refd to. [para. 19].

Pioneer Hi-Bred Ltd. v. Commissioner of Patents, [1989] 1 S.C.R. 1623; 97 N.R. 185; 60 D.L.R.(4th) 223; 25 C.P.R.(3d) 257, refd to. [para. 21].

Badische Anllin-und Soda fabrik AG v. Levinstein (1883), 24 Ch. D. 156, refd to. [para. 23].

Cabot Corp. et al. v. 318602 Ontario Ltd. and 502078 Ontario Ltd. (1988), 17 F.T.R. 54; 20 C.P.R.(3d) 132 (T.D.), refd to. [para. 26].

Natural Colour Kinematograph Co. v. Bioschemes Ltd. (1915), 32 R.P.C. 256 (H.L.), refd to. [para. 30].

Minerals Separation North America Corp. v. Noranda Mines Ltd. (1952), 69 R.P.R. 81 (P.C.), refd to. [para. 30].

Proctor & Gamble Co. v. Bristol-Myers Canada Ltd. (1979), 28 N.R. 273; 42 C.P.R.(2d) 33 (F.C.A.), refd to. [para. 30].

Western Electric Co. v. Baldwin Inter­national Radio, [1934] S.C.R. 570, refd to. [para. 31].

Diversified Products Corp. v. Consumers Distributing Co. (1992), 43 C.P.R.(3d) 520 (F.C.T.D.), refd to. [para. 42].

Consolboard Inc. v. MacMillan Bloedel (Saskatchewan) Ltd. (1983), 50 N.R. 161; 74 C.P.R.(2d) 199 (F.C.A.), refd to. [para. 48].

Reading & Bates Construction Co. v. Baker Energy Resources Co. et al. (1994), 175 N.R. 225 (F.C.A.), refd to. [para. 50].

Hodgkinson v. Simms et al., [1994] 3 S.C.R. 377; 171 N.R. 245; 49 B.C.A.C. 1; 80 W.A.C. 1; [1994] 9 W.W.R. 609, refd to. [para. 50].

TRW Inc. v. Walbar of Canada Inc. (1992), 146 N.R. 57; 43 C.P.R.(3d) 449 (F.C.A.), refd to. [para. 57].

Statutes Noticed:

Federal Court Rules, rule 344 [para. 55]; rule 480(1) [para. 39]; rule 500(1) [para. 40].

Patent Act, R.S.C. 1985, c. P-4, sect. 34(1) [para. 17]; sect. 34(2) [para. 29]; sect. 47 [para. 18]; sect. 55, sect. 57(1)(b) [para. 45].

Counsel:

Ronald E. Dimock and Dino P. Clarizio, for the appellants;

W. Ian C. Binnie, Q.C., and William H. Richardson, for the respondents.

Solicitors of Record:

Dimock & Associates, Toronto, Ontario, for the appellants;

McCarthy Tétrault, Toronto, Ontario, for the respondents.

This appeal was heard in Toronto, Ontario, on March 6-10, 1995, before Isaac, C.J., Stone and McDonald, JJ.A., of the Federal Court of Appeal. The decision of the court was delivered on June 28, 1995, by Stone, J.A.