Court Enlarges Pool of Plaintiffs Who May Sue for Patent Infringement


PATENTCASEPERMITSCOURTOFAPPEALTOREVIEWNOTIONOFLICENSEE

by
BarryGamache
LEGERROBICRICHARD,Lawyers
ROBIC,Patent&TrademarkAgents
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ArecentdecisionoftheFederalCourtofAppealinSignalisationdeMontréal
Inc.v.LesServicesdeBétonUniverselsLtée(F.C.A.A-949-92,A-1222-92,21
December1992)hasconsiderablyenlargedthepoolof”personsclaiming
underthepatentee”underSubsection55(1)ofthePatentActR.C.S.1985,c.
P-4.ThisSubsectionstatesinteralia:”Anypersonwhoinfringesapatentis
liabletothepatenteeandtoallpersonsclaimingunderthepatenteeforall
damagessustainedbythepatenteeorbyanysuchperson,afterthegrantof
thepatent,byreasonsoftheinfringement(…)”.
ThissplitdecisionalsopermittedtheCourttoreviewseveralquestionsraised
bytheapplicationofSubsection55(1)ofthePatentAct,namely1)whocan
becalledalicenseeand2)underwhatrationalemayalicenseesuean
infringer.
Inthiscase,plaintiffSignalisationdeMontréalInc.(“Signalisation”)
commencedlegalproceedingsbywayofastatementofclaimalleging
infringementofitspatentrightsbydefendantLesServicesdeBétonUniversels
Ltée(“BétonUniversels”).Interlocutoryinjunctivereliefwassoughtbythe
plaintiff.DefendantBétonUniverselsimmediatelypresentedamotionunder
Rule419oftheFederalCourtRules,C.R.C.1978,c.663toobtainanorder
strikingoutthestatementofclaimarguingthatplaintiffcouldnotclaimthe
reliefsoughtasitwasnotthepatenteenorapersonclaimingunderthe
patentee.
PlaintiffSignalisationwasnottheownerofthepatentwhichwasthesubjectof
theseproceedings.ThepatentwasheldinthenameofEnergyAbsorbtion
SystemsInc.(“Energy”).Theownerofthepatenthadgrantedalicense
coveringtheUnitedStatesandCanadatoBarrierSystemsInc.(“Barrier”).The
specificclaimswhichwereallegedlyinfringedcoveredamethodof
transferringtransferableroadwaylinedividersfromonesideoftheroadwayto
theotherinordertopermitarapidchangeofthedirectionofvehicleflowin
highdensitytrafficareas.


Mr.JusticeRouleau,themotionjudgewhoheardthedefendant’smotion,
outlinedthehighlightsoftheagreementbetweenEnergyandBarrier(at
(1992)44C.P.R.(3d)1(F.C.T.D.)atp.3):”ParagraphIIofthisagreement
entitled”Grants”statesats-s.2.01thatthepatentee/licensor:”…grantsthe
Licenseeanexclusiveandnon-transferablerightandlicense…ofthe
inventionscoveredbytheLicensor’spatents”.Underpara.Xentitled
“Assignment”,s-s.10.01specificallystates:”therightsgrantedtotheLicensee
pursuanttothisAgreementarepersonal,andlicenseeshallnotassignthe
benefitsofthisAgreementoranyrightsgrantedortobegrantedhereunder
withoutthewrittenconsentoftheLicensor…”Underpara.XI,”Patent
Infringement”,s-s.11.01,thelicenseeagreestogivenoticetothelicensorof
anyinfringementwithintheterritory.”
LicenseeBarrierenteredintoanagreementwithplaintiffSignalisation.The
essentialpointsofthisagreementbetweenplaintiffandBarrierwere
describedinthefollowingmannerbyMr.JusticeRouleau:”Theplaintiffis
referredtoas”arepresentative”.Inpara.IIitisstatedthat”Barrierhereby
appointsRepresentativeexclusiverepresentativeoftheProductsinthe
Territory…itagreestopromotetheproductstothecustomersintheterritory.
Barrierundertakesnottoshipproductstootherbuyersintheterritorywithout
priornotificationtotherepresentative”.ParagraphIVemphasizesthatboth
partiestotheagreementareindependentcontractorsandoneisnotthe
agentoftheotherpartyforanyreasonwhatsoever.ParagraphVIIofthe
agreementprohibitstherepresentative(theplaintiff)fromusinganytrade
marksofBarrierandfurther,thattherepresentativewilladviseBarrierifany
infringementcomestotheirattention.”
PlaintiffSignalisationhadacquiredanapparatusknownaslanedividersfrom
Barrierandhadbeenmakinguseofitandofthepatentedmethodwhile
carryingonitsbusiness.
Themotionjudge,Mr.JusticeRouleau,allowedthedefendant’smotionand
struckoutplaintiff’sstatementofclaimforthefollowingreasons:”…thereisno
doubtthattheplaintiffhasa”right”or”license”touse
theequipmentashe
seesfit,thiscorollarydoesnotconferonitany”rights”underthepatent.Imust
concludethattheplaintiffisnomorethananexclusiverepresentativeof
Barrier,themanufactureroftheequipment,intheterritoryofOntarioand
Quebecandithas,infact,nocapacitytoseekinjunctiverelief.”
Onappeal,Mr.JusticeHugessen,supportedbyMr.JusticeLétourneau,
overturnedthemotionjudge’sdecision.Indoingso,itprovideditsownsetof
answerstothequestionspreviouslyputforth:Mr.JusticeHugessenindicated
thatthepurchaserofapatentedproductacquirestherighttouseandthe
righttoselltheproductinquestion,thisrighthavingbeendescribedasa


licenseasearlyas1871byLordHatherlyinBettsv.Willmott,(1871)L.R.6Ch.
239.Furthermore,Mr.JusticeHugessenrestatedtheprinciplethatthelicensee
isaperson”claimingunder”thepatenteeandisentitledtosuefor
infringement(referringtoArmstrongCorkCanadaLtd.v.DomcoIndustries
Ltd.,(1982),[1982]1S.C.R.907,66C.P.R.(2d)46(S.C.C.)andrelyingheavilyon
thefollowingwordsfromMr.JusticeMartland:”Alicenseerelyingonthis
subsectionisnotclaimingagainsttheinfringerforinfringementofhisrights
underthelicence,heisclaimingforthedamagehehassustainedin
consequenceoftheinfringementofthepatent.”)
Thereafter,Mr.JusticeHugessenbridgedtogetherthesetwoprinciplesand
wrote:”…ifIpurchaseapatentedmonkeywrenchfromahardwarestore
whichhasacquireditfromawholesalerwhichhasobtaineditfroma
distributorwhogotitfromamanufacturerwhoholdsalicencefromthe
patentee,aninfringementactionbythelatteragainstmewillfail,not
becauseIhaveinfringedbutamprotectedfromtheclaimassertedagainst
me,butratherbecauseIhavearight
tousethethingwhichIhavebought,a
rightthatcanbeassertednoonlyagainstthepatenteebutagainsttheworld
atlargeandwhichpreventsmefrombeinganinfringer.Justlikeanyother
licensee,Iamaperson”claimingunder”thepatenteeandthatclaimavailsas
muchagainstthelatterasagainstanyoneelse.”
Finally,Mr.JusticeHugessenstatedthattheplaintiffwasclearlyaperson
coveredbySubsection55(1)ofthePatentAct:”Inmyview,aperson
“claimingunder”thepatenteeisapersonwhoderiveshisrightstousethe
patentedinvention,atwhateverdegree,fromthepatentee.Therighttouse
aninventionisonethemonopolytowhichisconferredbyapatent.Whena
breachofthatrightisassertedbyapersonwhocantracehistitleinadirect
linebacktothepatenteethatpersonis”claimingunder”thepatentee.It
mattersnotbywhattechnicalmeanstheacquisitionoftherighttousemay
havetakenplace.Itmaybeastraightforwardassignmentoralicence.It
may,asIhaveindicated,beasaleofanarticleembodyingtheinvention.It
mayalsobealeasethereof.Whatmattersisthattheclaimantassertsaright
inthemonopolyandthatthesourceofthatrightmaybetracedbacktothe
patentee.Thatisthecasewiththeappellanthere.”AlthoughMr.Justice
Hugessenoverturnedthemotionjudge’sdecision,henonethelessrefusedthe
interlocutoryinjunctivereliefwhichwasrequestedbyplaintiff.
Inastrongdissent,Mr.JusticeDécarytookissuewiththefactthatthe
purchaserofapatentedproductbecomesbyimplicationalicenseeunder
thepatentandthus,apersonclaimingunderthepatenteeinaccordance
withSubsection55(1)ofthePatentAct;ofcourse,hedidnothaveany
qualmswiththefactthatthereisindeedan”impliedlicense”or”implied
warranty”(apreferableexpressioninMr.JusticeDécary’seyes)grantedtothe
owneranduserofapatentedproducttouseitwithoutinfringingthepatent.


Inhiswords,”thisimpliedwarrantyderivesfromthecontractofsalebywhich
theinventor,theassigneeorthelicenseeandthepurchaserarebound,andit
attachestotheproductsold”.However,thiswarrantyonusewhichis
attachedtotheproductisnotanimpliedlicenseunderthepatentwhich
wouldbeattachedtothepatentitself.
DistinguishingtheArmstrong
case,Mr.JusticeDécarypointedoutthatthe
licensethenatissuewasgrantedbythepatenteeandconferredaninterest
inbothpatentandproduct.Mr.JusticeDécaryrefusedtoextendtheright
affordedbySubsection55(1)ofthePatentAct
tothesimplepurchaserand
userofapatentedproductwhodoesnothaveamandatefromtheinventor,
assigneeorlicensee.Toacceptthecontraryview,inMr.JusticeDécary’s
opinion,wouldbe”tointerpretSubsection55(1)oftheActasifthewords
“claimingunderthepatentee”didnotappear,andasifitweresufficientfor
damagestohavebeenincurredasaresultoftheinfringementofapatentin
orderfortheinjuredpartytohavearemedyunderthatsubsection”.
Thissplitdecisionpresentstwoverydifferentoutlooks:themajorityjudges
favouredanall-embracingnotionofalicenseeandreliedheavilyonthe
ArmstrongcasewhereSubsection55(1)ofthePatentActwasseenas
permittinganylicenseetoclaimfordamagessustainedinconsequenceofan
infringementofapatent.Thedissentingjudgeinterpretedtheterm”license”
asmeaningmorethanthesimplerighttouseasitsownerapatented
product;hethereforefoundthatalthoughlicenseesarecoveredby
Subsection55(1)ofthePatentAct,thesimplepurchaseranduserofa
patentedproductisnotapersonclaimingunderthepatenteewithinthe
meaningofthisSubsection.
Publishedat(1992),7W.I.P.R.60-61underthetitleCourtEnlargespoolof
PlaintiffsWhoMaySueforPatentInfringement.
LEGERROBICRICHARD,1992.





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