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T-5283-78
Wic Inc. (Plaintiff)
v.
La Machinerie Idéale Cie Ltée and Rovibec Inc. (Defendants)
Trial Division, Walsh J.—Montreal, March 3; Ottawa, March 6, 1980.
Practice Costs In an action where plaintiff sought injunction and damages for infringement of Canadian patent and where defendants denied infringement and brought cross- demands attacking plaintiffs patent, motion brought for secu rity for costs from each defendant pursuant to Rule 700(3) Whether plaintiff in cross-demand should be considered as a plaintiff in an action for impeachment of patent and be required to provide security or whether cross-plaintiffs were merely defendants in action for infringement of a patent and entitled to obtain a declaration without furnishing security Motion for security for costs granted Patent Act, R.S.C. 1970, c. P-4, s. 62(1).(3) Federal Court Rules 700(3), 1718(1).
APPLICATION.
COUNSEL:
W. C. Décarie and R. Trudeau for plaintiff.
F. Grenier for defendants. SOLICITORS:
Martineau, Walker, Allison, Beaulieu, MacKell & Clermont, Montreal, for plaintiff.
Leger, Robic & Richard, Montreal, for defendants.
The following are the reasons for judgment rendered in English by
WALSH J.: A motion for security for costs seek ing same in the amount of $2,000 from each of the defendants pursuant to Rule 700(3) of the Rules of this Court was presented at the same time as an identical motion in the case bearing No. T-5284- 78 Wic Inc. v. Norcotech Ltée and Proulx Farm Equipments Ltd. in which $2,000 is sought as security from defendant Proulx Farm Equipments Ltd. Both motions were argued simultaneously and the decision herein will apply to both. In each case
plaintiff sought an injunction and damages for infringement of its Canadian Patent No. 1,037,839. In each case defendants in addition to denying the infringement brought cross-demands attacking plaintiff's said patent. The demand for security for costs is based on Rule 700(3) of the Rules of this Court which reads as follows:
Rule 700. .. .
(3) In an action to impeach a patent of invention, the Court may at any time, in its discretion, order that the plaintiff, unless he is one of Her Majesty's attorney generals or a deputy thereof, give security for costs before taking any further step.
In opposing the application plaintiffs rely on sec tion 62(1) and (3) of the Patent Act, R.S.C. 1970, c. P-4 as amended by S.C. 1970-71-72, c. 1, s. 64(2), which reads as follows:
62. (1) A patent or any claim in a patent may be declared invalid or void by the Federal Court at the instance of the Attorney General of Canada or at the instance of any interest ed person.
(3) With the exception of the Attorney General of Canada or the attorney general of a province of Canada, the plaintiff in any action under this section shall, before proceeding therein, give security for the costs of the patentee in such sum as the Court may direct, but a defendant in any action for the infringement of a patent is entitled to obtain a declaration under this section without being required to furnish any security.
Plaintiff contends that a cross-demand is similar to a separate action referring to Rule 1718(1) which reads:
Rule 1718. (1) A counterclaim or cross-demand may be pro ceeded with notwithstanding that judgment is given for the plaintiff in the action or that the action is stayed, discontinued or dismissed.
It is necessary to read Rule 700(3) in the light of section 62(3) of the Patent Act. If the plaintiff in the cross-demand is considered as a plaintiff in an action for impeachment of a patent, security is required under the provisions of section 62(3), but if the said cross-plaintiffs were merely defendants in actions for infringement of a patent and if section 62(3) is read by itself, then as such defend-
ants they are entitled to obtain a declaration with out being required to furnish any security. Plaintiff contends however that this is only applicable if they seek to have the patent they are accused of infringing impeached in their defence in which case the judgment would only take effect between the parties, but that it does not apply if by cross- demand they seek as plaintiffs to impeach the patent and therefore to have it declared invalid with respect to the whole world.
Reading this section of the Patents Act in the light of Rule 700(3) of this Court it would appear that cross-plaintiffs can be required to give secu rity in the present proceedings in the same manner as if they had taken a separate action.
An affidavit filed at the hearing of the motion indicates that both La Machinerie Idéale Cie Ltée and Rovibec Inc. are substantial companies employing a large number of persons and with considerable assets so that whereas on the one hand furnishing of security for costs by them would seem to be unnecessary, it can be said on the other hand that the requirement to furnish such security will not cause any hardship. No similar affidavit was submitted in connection with defendant Proulx Farm Equipments Ltd. in the other action, but as this is not a principal consider ation in deciding whether security should be ordered or not I do not propose to make any distinction between the two cases. What is clear however is that although the principal actions may be based on different facts and could, unless defendants are successful in having plaintiffs patent impeached, require different evidence and lead to different results, the evidence in the impeachment proceedings resulting from the cross- demands will be identical in both cases. A total sum of $2,000 therefore will be sufficient, with permission to re-apply for an increase when and if circumstances indicate that this has become insuf ficient. Defendants La Machinerie Idéale Cie Ltée and Rovibec Inc. are therefore required to furnish the sum off $500 each for costs, and in action
bearing Court No. T-5284-78 Proulx Farm Equip- ments Ltd. is required to furnish security in the amount of $1,000; costs in the event.
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