Court File and Parties
MOTION HEARD: 20220307
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: GLYCOBIOSCIENCES INC., Plaintiff
-and-
HERRERO AND ASSOCIATES, Defendant
BEFORE: MILLER J.
COUNSEL: R. Evans and R. Seidler, for the Applicant Defendant
The Respondent Plaintiff, Self-Represented
HEARD: March 7, 2022
REASONS FOR DECISION
1The Defendant, Herrero & Associates, S.L. (“Herrero”), brings this motion to dismiss the Plaintiff’s action against it on the basis that the subject matter is outside of this Court’s jurisdiction.
2In this action the Plaintiff is claiming damages in relation to the lapse or abandonment of a patent application in each of Panama and Costa Rica. The Defendant submits that aside from the Plaintiff being an Ontario corporation, the litigation has no connection to Ontario (or even Canada). The Defendant submits that the record does not support the requisite “good arguable case” standard for the Plaintiff’s allegations that is essential to the Court assuming jurisdiction.
3In the alternative, the Defendant submits that the proceeding should be stayed on the basis that Ontario is not a convenient forum.
4In the further alternative the Defendant submits that service of the Statement of Claim on Herrero should be set aside as it was not authorized by the Rules of Civil Procedure or any order of the Court.
5The Plaintiff Glycobiosciences Inc. (“Glyco”) takes the position that a real and substantial connection exists between the facts of this case and Ontario.
6Leave to be represented by a person other than a lawyer, pursuant to Rule 15.01(2), was granted to Glycobiosciences Inc. by Conlan J. on October 25, 2021. Kevin Drizen represented Glyco on this motion.
7At the outset of the hearing Mr. Drizen brought a recusal motion, alleging bias on the part of this judge on a motion heard February 4, 2019 in the case of GlycoBioSciences Inc. v. Fougera Pharmaceuticals Inc. et al. My decision on that motion is cited at 2019 ONSC 2645. I heard submissions on the motion for recusal with reference to the transcript of that hearing and to case law provided by Mr. Drizen and by counsel for the Defendant. For oral reasons given, I declined to recuse myself from hearing this motion.
Background to the Dispute
8GlycoBioSciences Inc. (“Glyco”) is a corporation organized and existing under the laws of the Province of Ontario, with its sole place of business located at 7 Timber Court, Georgetown, Ontario, L7G 4S4.
9Herrero is a law firm with its head office located in Madrid, Spain, with an address of C/Cedaceros 1.28014, Madrid, Spain. It has ten other offices within Spain, one in Portugal, and Latin American branch offices in Argentina, Brazil, Columbia, and Mexico.
10Glyco had patent applications in Panama (Panamanian Patent Application No. 91895-01) and Costa Rica (Costa Rican patent application No. 2018-0014). In 2019 Glyco had lost touch with its patent agent for these applications.
11Also mentioned in the Statement of Claim is Ecuador Patent Application No. IEPI-17-81071. However, as acknowledged by Glyco, on the record in this hearing, there are no claims for damage or any cause of action alleged with respect to the Ecuadorian Application.
12On May 31, 2019, Glyco’s Canadian lawyer, McNeil, sent an email to Herrero asking if their law firm could take over representation for Glyco’s patent applications in Panama, as there appeared to be urgent action needed to be taken on that Glyco patent application.
13It is agreed that no retainer agreement was ever signed between the parties.
14However, Glyco alleges that Herrero agreed to represent Glyco on the Panama and Costa Rica patent applications, and proceeded to provide Glyco with status reports and information that related to Glyco’s patent applications in these countries. Glyco alleges that the information provided was incorrect; Glyco relied on the incorrect information and Herrero should be liable for any losses thereby occasioned.
15Both patent applications were terminated.
16The Panamanian Application was terminated (or deemed abandoned) by an official resolution issued on July 6, 2021. Herrero takes the position that this occurred because Glyco and its agent of record failed to meet a May 25, 2019 deadline to pay a “substantive examination fee” and that this had occurred even before Herrero was approached by Glyco on May 31, 2019. Glyco never provided a Power of Attorney to Herrero, therefore Herrero never represented Glyco on the Panamanian Application, nor were they ever able to obtain access to the Application file.
17Glyco takes the position that Herrero provided it with incorrect information, about the Panama Application deadline, on which Glyco relied to its detriment. Glyco relies on an email dated June 2, 2019 from Herrero in which it was indicated “…we have been directly informed by the National office that there is no upcoming deadline. That is the June 3 deadline does not apply. Payment of the examination fee can be effected at any time. In view of this and since now there is no hurry, please note if you wish us to take over representation on the file. If so we look forward to receiving the POA duly signed by the applicant…”
18On March 11, 2020 Herrero wrote to Glyco advising that its local agent was advised that the Panamanian Application had already been suspended because “the payment of the substantive examination has not been made yet”. The evidence is that the Panamanian Application was abandoned because Glyco and its agent of record missed a deadline of May 25, 2019.
19Herrero takes the position that the Costa Rican Application was terminated (or lapsed) because Glyco and its agent of record had failed to pay a fee that that had a final deadline of February 3, 2021. Glyco failed to provide a notarized power of attorney to Herrero until February 23, 2021.
20Glyco takes the position that Herrero provided incorrect information about the deadline for the Costa Rica Application on which Glyco relied to its detriment. Glyco relies on an email exchange which began on January 31, 2020 when Glyco’s Canadian patent agent asked whether Herrero could take over the Costa Rican application, stating “[i]f so, please let me know the cost to file any powers of attorney, and to review the history of the applications and let us know if there are any outstanding deadlines or action that needs to be taken”. The response provided by Herrero February 6, 2020 indicated:
Costa Rican Patent application NO 2018-000014 in the name of GLYCOBIOSCIENCES Inc., already published on November 29th, 2018 with the deadline for oppositions already expired. From this date, the patent automatically is moving towards the substantive examination stage which will be notified for its start within a period of up to 30 months.
In view of this and since now there is no hurry, please note whether you wish us to take over representation on the file. If so, we look forward to receiving the PoA [power of attorney] duly signed by the applicant (notarized and legalized up to apostille). We remind you that, along with the PoA , we would be grateful to receive us the filing receipts and Spanish text in word version for our records as well as future amendments to the text.
21Herrero made repeated requests of Glyco for a notarized power of attorney between February 6, 2020 and April 3, 2020. No notarized power of attorney was provided until February 23, 2021. This followed an email enquiry made January 28, 2021 by Glyco as to the status of its patent applications and a response from Herrero indicating the same publicly available status information concerning the Costa Rican Application that was provided in February 2020; that the deadline for oppositions had expired and that the patent is moving towards the substantive examination stage which will start within a period of up to 30 months. Once again, Mr. Drizen was reminded that a notarized power of attorney was required for Herrero to take any action on behalf of Glyco.
22Glyco takes the position that the patents could have been advanced despite the failures to meet the deadlines had they been properly advised by Herrero as to the status of the applications. No evidence in support of this position has been provided.
Jurisdiction
23A defendant may move under Rule 21.01(3)(a) of the Rules of Civil Procedure, RRO 1990, Reg 194, to have an action stayed or dismissed on the ground that the court has no jurisdiction over the subject matter of the litigation.
24The parties are agreed that the legal principles to be applied in this case are those set out in the Supreme Court of Canada decision in Club Resorts Ltd. v. Van Breda, 2012 SCC 17 (“Van Breda”). In particular, at paragraph 90, that case set out a list of “presumptive connecting factors” that, prima facie, give rise to a real and substantial connection:
a) the defendant is domiciled or resident in the province;
b) the defendant carries on business in the province;
c) the tort was committed in the province; and
d) a contract connected with the dispute was made in the province.
25The parties are agreed that, in accordance with Van Breda at paragraph 80, Glyco bears the onus of identifying at least one presumptive factor that is applicable to the circumstances of the case.
26Further, as noted by the Ontario Court of Appeal in Ontario v. Rothmans Inc. 2013 ONCA 353, at paragraph 54:
It is well established that an Ontario court will assume jurisdiction against a foreign defendant only where the plaintiff establishes a "good arguable case" for assuming jurisdiction through either the allegations in the statement of claim or a combination of the allegations in the statement of claim and evidence filed on a jurisdiction motion: Tucows.com Co. v. Lojas Renner S.A. (2011), 106 O.R. (3d) 561, [2011] O.J. No. 3576, 2011 ONCA 548, at para. 36; [page576] Ecolab Ltd. v. Greenspace Services Ltd. (1998), 1998 CanLII 17738 (ON SCDC), 38 O.R. (3d) 145, [1998] O.J. No. 653 (Div. Ct.), at pp. 149-54 O.R.; Schreiber v. Mulroney (2007), 2007 CanLII 56529 (ON SC), 88 O.R. (3d) 605, [2007] O.J. No. 4997 (S.C.J.), at para. 18.
27Glyco does not assert that Herrero is domiciled or resident in Ontario; or that Herrero carries on business in the province; or that a contract connected with the dispute was made in Ontario.
28Rather, Glyco submits that the tort of fraudulent and negligent misrepresentation was committed in Ontario and therefore it has established a real and substantial connection to the province.
29Glyco alleges that Herrero misrepresented the status of Glyco’s patent applications in Latin America to Glyco, specifically in Panama and Costa Rica, with the intention of causing the lapse and loss of Glyco’s patent assets in those countries, or with complete disregard for Glyco’s patent assets and in a completely incompetent and negligent and fraudulent manner. Glyco alleges therefore that Herrero committed the tort of fraudulent and negligent misrepresentation.
30Herrero submits that there is no evidence on the record to suggest that Herrero knowingly or negligently provided false statements to Glyco — which are essential elements to the torts of fraudulent and negligent misrepresentation. Therefore the evidence before the Court does not establish a “good arguable cause” with respect to the allegations of fraudulent and negligent misrepresentation.
31Glyco submits that all of the misrepresentations made by Herrero to Glyco, took place where Glyco received this information, that is in Ontario, where Glyco conducts its business. Glyco relies on evidence that Glyco is incorporated and located in Ontario, where Glyco holds and protects its inventions, all related proprietary documents and assets that relate to its patented Ionic Polymer Matrix Intellectual Property and related products and where all physical documents are stored.
32Glyco takes the position that Herrero knew or should have known that Glyco was in no position to receive any information as to deadlines or filings, from its former patent attorney in this region, and that its former patent attorney was not going to file anything, or make any payments on Glyco’s behalf, as the relationship had been severed.
33Glyco further takes the position that Herrero knew or should have known that if an action was not taken by their law firm for Glyco in this region, as to Glyco’s patent applications, no action would be taken, and Glyco had no other way but through Herrero to file any replies, or responses to office actions issued in these countries, nor to make any payments toward fees owed on these patent applications.
34This argument borders on the absurd. In respect of the Panama Application, Glyco did not even approach Herrero until the Panama Application deadline had passed. In respect of the Costa Rica Application, none of the information provided by Herrero to Glyco about the status of the Cost Rican Application was incorrect. In respect of both the Panama and Costa Rica Applications Glyco failed to provide Herrero with the tools necessary to obtain more detailed information – the powers of attorney – until it was too late. I find Glyco has not established good arguable cause with respect to the tort of fraudulent and negligent misrepresentation.
35I therefore find that Glyco has not established jurisdiction and the claim therefore is dismissed.
Forum Non Conveniens
36The doctrine of forum non conveniens only comes into play if the court determines that jurisdiction has been established: Van Breda, at paragraph 101. It is therefore unnecessary on this motion for me to make any determination with respect to Herrero’s alternative arguments with respect to forum non conveniens or with respect to service of the Statement of Claim.
37I would indicate however, that on the evidence before me, had I found jurisdiction, I would find that Ontario is forum non conveniens. Mr. Drizen’s only argument with respect to the litigation proceeding in Spain is that the availability of witnesses participating by videoconferencing makes it less inconvenient for Herrero to conduct the litigation in Ontario and, without any evidence in support, submits that it will be too expensive for Glyco to participate in litigation in Spain. Neither of these arguments would persuade me that the litigation should proceed in Ontario rather than in Spain.
Costs
38The Defendant is presumptively entitled to costs. The parties are encouraged to settle the issue of costs. In the event they are unable to do so, they may exchange and file written cost submissions, not to exceed three pages, exclusive of Bills of Costs or any Offers to Settle no later than July 8, 2022.
MILLER J
Date: June 9, 2022