Date: 20210714
Docket: T-451-20
Citation: 2021 FC 742
Ottawa, Ontario, July 14, 2021
PRESENT: The Honourable Mr. Justice Zinn
BETWEEN:
KOBOLD CORORATION
KOBOLD COMPLETIONS INC.,
AND 2039974 ALBERTA LTD.
Plaintiffs/
Defendants by Counterclaim
and
NCS MULTISTAGE INC.
Defendant/
Plaintiff by Counterclaim
ORDER AND REASONS
[1] The Plaintiffs claim that the Defendant, NCS Multistage Inc. [NCS], has and is breaching its Canadian Patent No. 2,919,561 [the 561 Patent].
[2] NCS has filed a motion, currently scheduled to be heard on July 22, 2021, for summary judgment dismissing the action on the basis of non-infringement arising out of the prior use defence under section 56 of the Patent Act, RSC 1985, c P-4, and particularly subsections 56(1), (6), and (9) which provide as follows:
56(1) Subject to subsection (2), if — before the claim date of a claim in a patent — a person, in good faith, committed an act that would otherwise constitute an infringement of the patent in respect of that claim, or made serious and effective preparations to commit such an act, it is not an infringement of the patent or any certificate of supplementary protection that sets out the patent, in respect of that claim, if the person commits the same act on or after that claim date.
56 (1) Sous réserve du paragraphe (2), si une personne, avant la date d’une revendication se rapportant à un brevet et de bonne foi, a commis un acte qui par ailleurs constituerait une contrefaçon du brevet relativement à la revendication, ou a fait de bonne foi des préparatifs effectifs et sérieux en vue de commettre un tel acte, l’acte ne constitue pas une contrefaçon du brevet ou de tout certificat de protection supplémentaire qui mentionne le brevet, relativement à cette revendication, si cette personne commet le même acte à compter de cette date.
56(6) Subject to subsection (7), the use of an article is not an infringement of a patent or any certificate of supplementary protection that sets out the patent, in respect of a claim, if the article was acquired, directly or indirectly, from a person who, before the claim date of that claim, in good faith, made or sold, or made serious and effective preparations to make or sell, an article that is substantially the same as the one used, for that use.
(6) Sous réserve du paragraphe (7), l’utilisation d’un article ne constitue pas une contrefaçon de brevet ou de tout certificat de protection supplémentaire qui mentionne le brevet, relativement à une revendication, si l’article est acquis, directement ou autrement, d’une personne qui, avant la date de la revendication, a de bonne foi fabriqué ou vendu - ou a fait de bonne foi des préparatifs effectifs et sérieux en vue de fabriquer ou de vendre - un article, qui est sensiblement le même que celui utilisé, pour cette utilisation.
56(9) Subject to subsection (10), the use of a service is not an infringement of a patent in respect of a claim if the service is provided by a person who, before the claim date of that claim, in good faith, provided, or made serious and effective preparations to provide, a service that is substantially the same as the one used, for that use.
(9) Sous réserve du paragraphe (10), l’utilisation d’un service ne constitue pas une contrefaçon de brevet relativement à une revendication si le service a été fourni par une personne qui, avant la date de la revendication, a de bonne foi fourni - ou a fait de bonne foi des préparatifs effectifs et sérieux en vue de fournir - un service, qui est sensiblement le même que celui utilisé, pour cette utilisation.
[3] In support of its summary judgment motion, NCS filed a fact affidavit of Ryan Redecopp, an employee of NCS, who provides evidence regarding its Bottom Hole Assemblies [BHAs] which are alleged to infringe the 561 Patent.
[4] In response to the summary judgment motion, the Plaintiffs filed the expert affidavit of Dr. William W. Fleckenstein who attests that he has been asked by the Plaintiffs to provide his opinion on the following:
a. construing the claims of Canadian Patent No. 2,919,561 (“561 Patent”);
b. determining the differences in structure and function between the versions and configurations of bottom hole assemblies (“BHAs”) indicated in the NCS documents that I have been provided to review, particularly the packers of those assemblies; and
c. determining whether any of NCS’s packer assemblies that I have been provided to review (Mongoose, SFC, SFC 2, and Innovus) or the use of those packer assemblies, including the use of those packer assemblies as part of the BHA, fall within the scope of any of the independent claims (1, 9, 12, and 15) of the 561 Patent.
[5] This prompted NCS to bring a motion for an Order permitting it to file expert reply evidence, to reply to Dr. Fleckenstein. It asserts that in its summary judgment motion it did not raise the issue of claim construction or infringement of the 561 Patent. It states that the sole basis for its summary judgment motion “is that the procedure it uses today is the same procedure it has used since before the claim date of the 561 Patent”
and that Dr. Fleckenstein raises three new issues: (1) the appropriate claim date of the 561 Patent, (2) the claim construction of the 561 Patent, and (3) the infringement of the 561 Patent by NCS’s tools and procedure.
[6] NCS submits that these new issues took it by surprise and could not have been anticipated as they are irrelevant to the issue it raises in the summary judgment motion; namely, if the procedure it uses today is the same procedure it used prior to the claim date, then it is permitted to continue using the procedure, regardless of whether or not the procedure infringes the 561 Patent.
[7] Following oral submissions, I informed the parties that this motion would be dismissed, with reasons to follow. These are my reasons for dismissing the motion to file reply evidence.
[8] There is no right of reply on a motion under the Federal Courts Rules, SOR 98-106. The Federal Court of Appeal in Amgen Canada Inc v Apotex Inc, 2016 FCA 121 [Amgen Canada] at paragraph 11, acknowledged that the filing of reply evidence on a motion is permitted “only in ‘unusual circumstances’ where procedural or substantive considerations”
relating to procedural fairness or the need to make a proper determination are live.
[9] In Amgen Canada at paragraph 13, the Federal Court of Appeal instructed that when asked to admit reply evidence, a court must have regard to whether:
the evidence will assist the court (in particular, its relevance and sufficient probative value);
admitting the evidence will cause substantial or serious prejudice to the other side;
the evidence was available when the party filed its affidavits or it could have been discovered with the exercise of due diligence.
[10] In the present circumstances, I find that issues related to claims construction and whether NCS’s tools and procedures fall within the scope of the 561 Patent ought to have been anticipated by NCS when it filed its summary judgment motion. These are two of the very issues at the heart of this litigation. Moreover, they are the very issues to be addressed when relying on section 56 of the Patent Act, unless a party admits that its tools and procedures do breach the relevant patent, but argues that they have been in use prior to the patent claim date.
[11] NCS does not admit any infringement of the 561 Patent. Although it says that these issues are outside the summary judgment motion as it has framed it, that ignores the express wording of section 56, which, as an example in subsection 56(1) speaks to a defendant committing an act before the claim date “that would otherwise constitute an infringement of the patent in respect of that claim.”
This language brings directly into issue both claims construction and infringement.
[12] Even if I were persuaded that some of the statements and opinions expressed by Dr. Fleckenstein could not have been anticipated, I would still dismiss this motion because NCS has not provided in its motion record a copy of the evidence that it seeks leave to file.
[13] In Merck-Frosst v Canada (Minister of Health), 2009 FC 914 at paragraphs 22-23 and 25, I described the Court’s task on a motion to admit reply evidence as a two-step analysis:
[22] When examining whether the proposed evidence is proper reply evidence that was not available and/or could not be anticipated as being relevant at an earlier date, the following two step analysis is required.
[23] The first step is to ask whether the proposed evidence is properly responsive to the other party’s evidence. It is responsive if it is not a mere statement of counter-opinion but provides evidence that critiques, rebuts, challenges, refutes, or disproves the opposite party’s evidence. It is not responsive if it merely repeats or reinforces evidence that the party initially filed.
[25] If the proposed evidence is found to be responsive, one must then ask whether it could have been anticipated as being relevant at an earlier date. If it could have been anticipated earlier to be relevant, then it is being offered in an attempt to strengthen one’s position by introducing new evidence that could and should have been included in the initial affidavit. Such evidence is not proper reply evidence as the party proposing to file it is splitting his case. A party must put his best case forward for the other to meet, he cannot lie in the weed and after the party opposite has responded file additional evidence to bolster his case in light of the defence that has been mounted. It is improper because it could have been filed in the initial instance and the other party now has no opportunity to respond to it. [emphasis added]
[14] In order to conduct this analysis the Court must have before it “the proposed evidence” that is sought to be filed. Statements from counsel during oral submissions, such as those made regarding factual errors and disputed opinions in the affidavit of opposing counsel’s expert, do not constitute evidence.
[15] The danger of seeking leave to file reply or sur-reply evidence without putting the proposed evidence before the Court by way of draft or sworn affidavit was noted by Prothonotary Tabib in Eli Lilly Canada Inc v Apotex Inc, 2006 FC 953, at paragraph 4:
In my opinion, the practice in which both parties engaged is to be discouraged. Whilst in some cases, the relevance, necessity and usefulness of additional evidence can appear on the face of the record, and therefore make it possible for leave to be granted without the support of the proposed affidavit, it is always far better for the proposed affidavits to be submitted to the Court on seeking leave. Not only does this better allow the Court to judge whether the criteria for granting leave have been met, but as this case demonstrates, it would permit the opposing side to determine in advance whether sur-reply evidence will be needed, to put before the Court a focused and precise draft of any proposed sur-reply, and ultimately would avoid motions to strike reply or sur-reply evidence, along with the significant waste of time and resources which these increasingly common motions represent.
[16] I accept her observation that “in some cases, the relevance, necessity and usefulness of additional evidence can appear on the face of the record” but this is not that case. The underlying litigation, patent infringement, is complex and requires both factual determinations and patent claims construction. The summary judgment motion in which this disputed reply evidence is sought to be filed is also not a straight forward motion. Even as characterized by NCS, it requires the Court to make several factual determinations and to interpret and apply section 56 of the Patent Act, for the first time.
[17] If a party is asserting, as NCS is, that it is important that the Court have before it all relevant evidence in order to make an informed decision, then it behoves it to put that precise evidence in its motion materials, and not simply assert that it is plain from the pleadings and motion materials filed to date.
[18] These are the reasons for dismissing the motion to file expert reply evidence.
[19] As a consequence of bringing this motion, the parties agree that the summary judgment motion scheduled for July 22, 2021, cannot proceed. That date will be vacated and the motion rescheduled after consultation with the parties.
[20] The Plaintiffs are entitled to their costs of this motion. They made written submissions on costs, but the Court will permit the parties time to settle the issue of costs, failing which, they can file written submissions on costs, not exceeding 5 pages each, with the Plaintiffs submissions due within 10 days of this decision, and the Defendant’s due one week thereafter.
ORDER IN T-451-20
THIS COURT ORDERS that this motion to file expert reply evidence is dismissed, the July 22, 2021 date set for the summary judgment motion is vacated to be rescheduled, and costs are reserved as set out in the Reasons.
"Russel W. Zinn"
Judge
FEDERAL COURT
SOLICITORS OF RECORD
DOCKET:
t-451-20
STYLE OF CAUSE:
KOBOLD CORORATION ET AL v
NCS MULTISTAGE INC
PLACE OF HEARING:
held via videoconference
DATE OF HEARING:
july 12, 2021
JUDGMENT AND reasons:
zinn J.
DATED:
july 14, 2021
APPEARANCES:
William D. Regan
Christopher J. Kvas
for the PLAINTIFFS/
DEFENDANTS BY COUNTERCLAIM
Patrick Smith
Sharn Mashiana
FOR THE DEFENDANT/
PLAINTIFF BY COUNTERCLAIM
SOLICITORS OF RECORD:
Piasetzki Nenniger Kvas LLP
Barristers and Solicitors
Toronto, Ontario
for the PLAINTIFFS/
DEFENDANTS BY COUNTERCLAIM
Gowlings WLG (Canada) LLP
Barristers and Solicitors
Calgary, Alberta
FOR THE DEFENDANT/
PLAINTIFF BY COUNTRCLAIM