Beloit Valmet Oy Saga Continues, As Court Voids Beloit Patent



THEBELOIT-VALMETSAGACONTINUES

by
HuguesG.Richard
LEGERROBICRICHARD,Lawyers
ROBIC,Patent&TrademarkAgents
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ThefactsofthecasesinvolvingBeloitandValmetarecomplicatedandthe
partiestothesecasesnumerous.Forthepurposesofthisarticle,thefactswill
berestrictedtotheirminimumandthepartiesinvolvedwillnotallbe
identified.Essentially,BeloitistryingtoenforceitspatentrightsfortheTri-Nip
presssection,apressformachinesusedinthepapermakingindustry.
Thesagastartedin1976whenBeloitcommencedanactionagainstValmet
OyforimpeachmentofValmet’spatentwhointurncounterclaimedfor
infringementofitspatentrelatingtothesameinvention.WhenBeloit’spatent
wasissued,theStatementofClaimwasamendedtoaddconclusionsfor
infringementofitspatent.Inthetrialjudgment,issuedFebruary20,1984,Mr.
JusticeWalshfoundbothpatentsinvalidonthegroundsofobviousnessand
anticipation(BeloitCanadaLtd.&al.v.ValmetOy
(1984),78,C.P.R.(2d)
(FCTD)).
ThetrialjudgmentwassetasidebytheFederalCourtofAppealonFebruary
10,1986(BeloitCanadav.ValmetOy
,(1986)8C.P.R.(3d)289).Itrejectedthe
argumentsofobviousnessandanticipationandupheldthevalidityofthe
Beloitpatent.
Beloit,onJune11,1986,institutedagainstValmetanditsCanadiansubsidiary
contemptofcourtproceedings.Attrial,bothValmetanditsCanadian
subsidiarywerefoundincontemptandfined$750,000.00and$500,000.00
respectively(BeloitCanadaLtd.v.ValmetOy
(1986)11C.P.R.(3d)470).This
findingwasoverturnedbytheCourtofAppealinadecisionhandeddown
February1,1988(ValmetOy&Al.v.ValmetCanadaLtd
.(1988)20C.P.R.(3d)
1).Inparalleltoallofthis,thequestionofprofitsresultingfromthepatent
infringementwasbeingdealtwithbywayofreference,betweenBeloitand
Valmet.
OnJune4,1986inactionNoT-1268-86,Valmet’sCanadiansubsidiaryfileda
StatementofClaimagainstBeloittoimpeachthevalidityoftheBeloitpatent



onthebasisofpriorartandpriorpublication.Beloit,subsequentlyinitiatedits
ownclaimagainstValmet’sCanadiansubsidiaryincasenumberT-1450-86
filedJune24,1986.Itsoughtadeclarationthattheclaimsoftheirpatent
werevalidandinfringed,aninjunction,damagesoranaccountingofprofits.
ItarguedthatValmet’sCanadiansubwasestoppedbyreasonofresjudicata

andabuseofprocessfromassertingtheinvalidityofitspatentordenying
infringement,sinceitwasaprivyofValmet,againstwhomBeloithad,inan
earlieraction,obtainedadeclarationofvalidityandinjunctionrestrainingits
infringementofthepatentissued.
Mr.JusticeRouleauonNovember17,1989foundthatBeloit’sinfringement
actionagainstValmet’sCanadiansubsidiarywasill-foundedandthatthe
impeachmentactionbyValmet’sCanadiansubsidiaryandcounterclaims
againstBeloitwerewellfounded.HefurtherdeclaredthatCanadianpatent
No1,020,383wasvoidandthesamewastherebycancelledandsetaside,
thisjudgmentisnowunderappeal.
OneofthegroundsofattackbyValmet’sCanadiansubsidiarywasbasedon
priorart,relatingprimarilytoworkperformedonaresearchmachinelocated
inWestGermany.Itwasalsobasedonthepublicationofapaperpriorto
November26,1971,whichistwoyearspriortotheapplicationdateofthe
Canadianpatent.Itwasarguedthatthecontentsofthispaperwasa
“sufficient”anticipationoftheBeloitinventionsincetheessentialelements
containedintheclaimsoftheBeloitpatentwererevealedtherein.Any
differencesbetweenthetwoweresaidtobeobviousanddidnotinvolveany
inventiveingenuity.Valmet’sCanadiansubsidiaryassertedthatpursuantto
section34ofthePatentAct,theclaimsoftheBeloitpatentdidnotclearly
statetheinventionandthereforewasinvalid.
Beloitasidefromtheresjudicata
andabuseofprocessarguments,submitted,
interalia,thatValmet’sCanadiansubsidiaryhadaveryheavyonustomeet
inlightoftheCourtofAppealjudgmentupholdingthevalidityoftheBeloit
patentandrejectingtheargumentbasedonpriorpublication.
Thecontextofthepresentarticledoesnotallowustoanalysethereasonsfor
judgment,itishoweverinterestingtonotethatattheoutsetofhisjudgment,
Mr.JusticeRouleauwrotethatpursuanttosections60and62ofthePatent
Act,suchafinding[invalidityofthepatent]wouldbegoodagainstthewhole
world…Oneobviousquestionarises:isValmetpartofthewholeworldandif
so,canitbetheonlypersoninthewholeworldhavingtorespectaninvalid
patentandcanitbeforcedtopayprofitsforhaving”infringed”aninvalid
patent.Thesequestionsareatthemomentunanswered.Theyshould
howeverhavetobeansweredifthejudgmentofMr.JusticeRouleauis
maintainedinafinalappeal.



Publishedat(1989),4W.I.P.R.28underthetitleBeloit-ValmetOySaga
Continues,AsCourtVoidsBeloit’sPatent.
LEGERROBICRICHARD,1989.



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