T-730-72
Xerox of Canada Limited, and Xerox Corporation
(Plaintiffs)
v.
IBM Canada Limited-IBM Canada Limitée
(Defendant)
Trial Division, Thurlow A.C.J.—Toronto, Novem-
ber 21; Ottawa, November 30, 1977.
Practice — Application pursuant to Rule 500(1) for refer
ence to determine issue of fact — Reference ordered to deter
mine damages for patent infringement — Second machine
marketed similar to machine with infringing devices —Second
action initiated re second machine — Whether or not the
reference determining damages should consider damages aris
ing from the marketing of second machine — Jurisdiction of
Court to grant order sought — Federal Court Rule 500(1).
Defendant was found at trial to infringe various claims of
plaintiffs' patents and a reference was ordered to determine the
damages plaintiffs sustained. After judgment, defendant mar
keted a second machine, substantially identical to the one found
to be infringing the patents, and plaintiffs commenced a second
action. Plaintiffs now seek an order under Rule 500(1) appoint
ing a judge as referee to determine the question of fact of
whether or not the reference to damages should include defend
ant's marketing the second machine.
Held, the application is allowed. The judgment, injunction
and order for a reference are not confined to infringement by
the marketing of the Copier I, but rather apply to any IBM
copier which has mechanisms infringing the patents in question.
Plaintiffs' assertion concerning the use of mechanisms in the
Copier II raises an issue of fact rather than a question of law
concerning the application of the judgment. The bringing of a
second action concerning the Copier II does not amount to an
election or constitute a bar to plaintiffs' proceeding in this
action for relief concerning Copier II. Plaintiffs cannot recover
twice for the same cause of action or damages, but should there
be duplication in the second action, there are ways in which
that can be dealt with.
APPLICATION.
COUNSEL:
D. F. Sim, Q.C., for plaintiffs.
W. B. Williston, Q.C., for defendant.
SOLICITORS:
D. F. Sim, Q.C., Toronto, for plaintiffs.
Smart & Biggar, Ottawa, for defendant.
The following are the reasons for order ren
dered in English by
THURLOW A.C.J.: Rule 500(1) provides:
Rule 500. (1) The Court may, for the purpose of taking
accounts or making inquiries, or for the determination of any
question or issue of fact, refer any matter to a judge nominated
by the Associate Chief Justice, a prothonotary, or any other
person deemed by the Court to be qualified for the purpose, for
inquiry and report.
In this action the plaintiffs, by their statement
of claim, sought damages and other relief in
respect of alleged infringement by the defendant of
several patents by selling and leasing in Canada
. a xerographic type copying machine identified by the
defendant as the IBM COPIER, manufactured in the United
States of America or other foreign countries known to the
defendant but unknown to the plaintiffs, such as that displayed
by the defendant inter alia on February 1st, and 2nd 1972 at
the Quebec Room, Royal York Hotel, Toronto, Ontario.
On August 3, 1977, following a lengthy trial,
judgment was pronounced, inter alia, ordering and
adjudging that claim 1 of Patent Number 683,777
and claims 1, 2, 3, 4, 5 and 6 of Patent Number
736,834 are valid and have been infringed by the
defendant, that the defendant be restrained from
infringing the said claims and
... from' manufacturing, using, selling, offering for sale, leas
ing, offering for lease, instructing others in the use of or
otherwise dealing in a copier which incorporates either
(a) an apparatus for feeding a sheet and removing same
from a rotary xerographic drum as described in the specifica
tion and claimed in claim 1 of Canadian Letters Patent
683,777, or
(b) an apparatus for picking off sheets adhering electrostati-
cally to the surface of a drum as described in the specifica-
' By order dated September 19, 1977, the judgment was
amended by inserting the words "any unlicensed" after the
word "from". A licence has been granted.
tion and claimed in claims 1, 2, 3, 4, 5 and 6 of Canadian
Letters Patent 736,834,
or both.
and
... that there be a reference to determine the amount of
damages sustained by the plaintiffs by reason of the infringe
ment by the defendant of,
(d) Claim 1 of Canadian Letters Patent 683,777, and
(e) Claims 1, 2, 3, 4, 5 and 6 of Canadian Letters Patent
736,834,
or the profits made by the defendant by reason of such infringe
ment and that the damages or profits so determined shall be
paid by the defendant to the plaintiffs forthwith after the
determination therof [sic]. The plaintiffs shall, prior to the
holding of the said reference, elect between damages sustained
or profits made.
Both the defendant and the plaintiffs have
appealed but the order for a reference has not been
stayed. The plaintiffs have elected for damages
rather than an account of profits.
By the present application the plaintiffs seek,
under Rule 500(1), an order:
1. Appointing a Judge as a referee for the determination of the
question or issue of fact of whether the reference to damages
directed by Order of the Honourable Mr. Justice Collier dated
August 3, 1977 in respect of the infringement of,
(a) Claim 1 of Canadian Letters Patent 683,777, and
(b) Claims 1, 2, 3, 4, 5 and 6 of Canadian Letters Patent
736,834
shall include the activity of the Defendant in marketing its
Copier II machines as well as its Copier I machines in Canada.
2. Giving such further or other Order and direction as the
Associate Chief Justice may seem fit.
The type of machine referred to in the statement
of claim is identified as an IBM Copier I. In the
reasons for judgment, the learned Trial Judge
referred to it as "the IBM machine", "IBM World
Trade Copier I", and "Copier I". He also referred
at times to particular devices incorporated in the
machine as "the IBM device". I assume that the
evidence was directed only to that type of machine
and its mechanisms.
The marketing of the Copier II machines
referred to in the notice of motion, I was informed
by counsel, began after the commencement of the
action. It is the subject of a second action for
infringement of several patents including 683,777
and 736,834. That action has not yet been tried.
In an affidavit filed in support of this applica
tion, it is stated that the Copier II machines, so far
as they relate to the subject matter of patents
683,777 and 736,834, are substantially identical to
the defendant's Copier I machines.
In opposing the plaintiffs' application, counsel
for the defendant raised two points: first, that by
bringing a second action the plaintiffs had made
an election to proceed therein in respect of the
Copier II and therefore were not entitled to obtain
relief in respect of it in this action; and second,
that what the plaintiffs seek is essentially the
nomination of a judge as a referee to interpret the
judgment and what it applies to, which is a ques
tion of law, rather than to determine an issue of
fact, and the Court is without jurisdiction to grant
the order sought since both Rule 500(1) and sub-
paragraph 46(1) (a) (vi) of the Federal Court Act 2 ,
which authorizes the making of such a rule, con
fine it to the determination of issues of fact.
In my view, the judgment is not confined to
infringement by the marketing of the Copier I.
Plainly, the injunction is not so limited and, on its
wording, neither is the order for a reference. As I
read it, the judgment applies to any IBM copier
which has devices or mechanisms which infringe
the claims of the two patents in question, i.e.
683,777 and 736,834, and unless the defendant is
prepared to admit in respect of its Copier II that it
has such devices or mechanisms there is plainly an
issue of fact to be resolved when the plaintiffs
assert that the machine has such devices or mech
anisms. If the defendant is prepared to admit it,
there will be no question of fact to be resolved, but
neither will there be any issue of law calling for
2 R.S.C. 1970 (2nd Supp.), c. 10.
determination, at least until the report of the
referee is under consideration on an appeal there
from or until a question is submitted by the referee
for decision under Rule 504.
Nor do I think the bringing of a second action
amounts to an election or constitutes a bar to the
plaintiffs proceeding in this action for relief in
respect of the Copier II so far as such relief may
be obtainable therein. Obviously, the plaintiffs are
not entitled to recover twice for the same cause of
action or damage but, as I see it, if and to the
extent that there is duplication in the second
action, there are ways in which that may be dealt
with therein.
The issue of fact to which I have referred is, in
my view, one that ought to be dealt with by a
judge, and before the reference on other issues is
held. The motion, accordingly, succeeds.
ORDER
IT IS ORDERED with respect to the reference
directed by paragraph 8 of the judgment in this
action that the issue of whether the defendant's
Copier II incorporates devices or mechanisms
which infringe claim 1 of Canadian Letters Patent
683,777 and claims 1, 2, 3, 4, 5 and 6 of Canadian
Letters Patent 736,834 or any of them be referred
for inquiry and report to a judge of this Court, the
said inquiry and report to precede any necessary
inquiry and report on other issues to be determined
on the reference directed by the judgment and that
the costs of this application be reserved and be
dealt with as the judge nominated to make the
inquiry and report may determine.
Under Rule 500(1), the Honourable Mr. Justice
Collier is nominated to make the inquiry and
report determining the issue above-mentioned.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.