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A-106-81
Vulcan Equipment Company Limited (Appellant)
v.
The Coats Company, Incorporated (Respondent)
Court of Appeal, Heald and Ryan JJ. and MacKay D.J.—Toronto, September 28 and 30, 1981.
Practice — Motion to strike pleadings — Appeal from Trial Division decision striking out portion of appellant's defence and counterclaim to a patent infringement action brought by the respondent — Appellant pleaded invalidity of the patents although it had expressly agreed not to — Whether pleadings of invalidity are futile — Federal Court Rule 419(1).
Radio Corp. of America v. Hazeltine Corp. (1971) 1 C.P.R. (2d) 22, referred to.
APPEAL. COUNSEL:
Roger Hughes for appellant.
Burton B. C. Tait, Q.C. and Gordon S.
Clarke for respondent.
SOLICITORS:
Donald F. Sim, Q. C., Toronto, for appellant.
McCarthy & McCarthy, Toronto, for respondent.
The following are the reasons for judgment rendered in English by
HEALD J.: This is an appeal from a judgment of the Trial Division * wherein it was ordered that paragraph 3 of the statement of defence, para graph (a) of the counterclaim and the particulars of objection dated July 25, 1979, be struck out. This action is a patent infringement action brought by the respondent alleging infringement by the appellant of two Canadian patents. The appellant defended the action and counter-claimed alleging, inter alia, invalidity of the two patents. Paragraph 3 of the defence, paragraph (a) of the counter claim and the particulars of objection dated July 25, 1979 are pleas that the patents are invalid and
* [No reasons for judgment distributed—Ed.]
provide particulars as to the pleas of invalidity.
The respondent moved under Rule 419(1) for an order striking out the pleadings detailed supra and the learned motions Judge granted the order asked for.
In support of that motion, the respondent filed, inter alia, an affidavit by one James D. Hennessy to which was annexed an alleged agreement be tween the appellant and the respondent dated December 10, 1964. In making the order asked for by the respondent, the learned motions Judge relied on paragraph 12 of that agreement express ing the view that pursuant to said paragraph 12, there was an express covenant by the appellant that it would not raise the issue of invalidity of subject patents, both during the term of the agree ment and thereafter. It was thus the view of the learned motions Judge that the covenant was "an express binding covenant" and that the appellant should not be permitted to raise the issue of inva lidity in this action.
At the hearing of the appeal, the appellant raised a number of issues of law with respect to the applicability of paragraph 12 and the agreement generally to the issues in this action. It is not, in my view, necessary nor desirable for the Court, on this appeal, to finally decide whether the appel lant's objections in law in respect of this agreement should prevail. Suffice it to say that, in my view, the issues raised are serious issues of law and are not of the kind which should be determined on a summary motion to strike.'
In my opinion this is not a case where the appellant's pleadings in respect of invalidity are so clearly futile as to warrant their being struck out. It seems to me that the pleadings on invalidity should be allowed to stand, thus affording the respondent the opportunity, if it so decides, to plead the agreement. In this manner, the normal Rules of the Court with reference to reply, discov ery, etc. would operate and the whole issue of the agreement would properly be before the Court at trial.
' Compare Radio Corp. of America v. Hazeltine Corp. (1971) 1 C.P.R. (2d) 22.
For these reasons, I would allow the appeal with costs, both here and in the Trial Division, and dismiss the respondent's motion to strike.
* *
RYAN J.: I agree.
* * *
MACKAY D.J.: I agree.
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