T-3794-78
Minnesota Mining and Manufacturing Company
and 3M Canada Limited-3M Canada Limitée
(Plaintiffs)
v.
Lorcon Inc. (Defendant)
Trial Division, Walsh J.—Montreal, June 20;
Ottawa, June 23, 1983.
Practice — Stay of proceedings — Motion to stay or
dismiss patent-infringement action for excessive, prejudicial
delay in prosecuting — Action commenced in August 1978;
motion brought in May 1983 — Plaintiff suing other persons
in U.S. — Principal defence witness R incapacitated —
Implicated division of defendant company sold — Circum
stances unusual in that plaintiffs wish to proceed — Each case
turns on facts — Defendant's non-agreement to protective
order regarding witnesses during U.S. litigation partly respon
sible for delay — Dismissal of U.S. claim not necessarily
implying similar result herein — Plaintiffs' change of lawyers
not excusing delay but time required to familiarize with file —
Defendant content to leave matter dormant until plaintiffs
indicated intention to proceed — Defendant prejudiced some
what if R cannot testify — His recollection probably no better
if case tried earlier — Plaintiffs not seeking to capitalize on
R's deteriorating condition — Plaintiffs offering to provide
R's evidence before Restrictive Trade Practices Commission
and video tape of U.S testimony — Monopoly allegation not
stressed by defendant — Defendant aware of proceedings when
division sold so would have obtained potential evidence in
advance — Motion dismissed on plaintiffs' undertaking to
provide transcripts and video tapes if, for medical reasons, R
unable to give viva voce or commission evidence — Federal
Court Rules, C.R.C., c. 663, RR. 419(1)(40, 440, 447 —
Combines Investigation Act, R.S.C. 1970, c. C-23.
Patents — Practice — Motion to stay or dismiss infringe
ment action for excessive, prejudicial delay in prosecuting —
Plaintiffs wanting to proceed — Principal defence witness R
incapacitated — Implicated division of defendant company
sold — Defendant not agreeing to protective order regarding
witnesses during plaintiffs U.S. litigation — Motion dis
missed on plaintiffs' undertaking to provide transcripts and
video tapes of evidence given by R in other proceedings if
necessary — Federal Court Rules, C.R.C., c. 663, RR.
419(1)(d),(/), 440.
The defendant applied under Rule 419(1)(d) and (f) and
Rule 440, for an order staying or dismissing the plaintiffs'
patent-infringement action, on the ground that excessive delay
in proceeding had prejudiced the defence.
The action, which initially involved two patents, was com
menced on August 22, 1978. At first the matter proceeded
normally. The first-named plaintiff was conducting other litiga
tion (against other defendants) in the United States, and that
other litigation gave rise to discussions between counsel herein,
regarding the need for a protective order with respect to
witnesses to be examined in Canada. The discussions, including
correspondence, extended from approximately the middle of
June, 1979, to the end of February, 1980. At that point the
plaintiffs' counsel sent his opposite number a letter requesting a
reply. Apparently none was forthcoming. In the autumn of
1980 and spring of 1981, the plaintiffs' lawyers worked at
preparing a list of documents pursuant to Rule 447, and made
trips to Minnesota for this purpose. The American lawsuit was
tried in March and April, 1981 and dismissed by a judgment
rendered in November. In the spring of 1982, the plaintiffs
nonetheless decided to continue this Canadian litigation; how
ever, in June, 1982, the counsel in charge of their case left the
firm and the file was transferred to another lawyer. A decision
was made in January, 1983 not to proceed further with the
claim relating to one of the two patents, but in February the
plaintiffs advised counsel for the defendant of their intention to
resume the prosecution of the remaining claim.
During the period in which the foregoing events were unfold
ing, two other notable developments occurred. The first was the
incapacitation of one A. F. Ratzer, who was to be a principal
witness for the defendant. Ratzer's evidence had, in large
measure, served as the basis for the dismissal of the American
action. He had also appeared before the Restrictive Trade
Practices Commission ("RTPC"), where he gave testimony
relevant to an allegation contained in the defendant's counter
claim: namely, that the plaintiffs had attempted to further an
illegal monopoly by causing certain substances to be withheld
from the defendant. Ratzer suffered a stroke in the summer of
1979, and another in August, 1982. By the time of the hearing
of this motion, his health was such that it was unlikely he would
be able to travel to Canada to testify, or even to give evidence
by means of rogatory commission. Furthermore, he had been
taking a painkiller which adversely affected his memory.
The second important circumstance occurred in December,
1982, when the division of the defendant company involved in
the alleged patent infringement was sold. Because of this
change, the defendant maintained, there was now a possibility
that it would encounter some difficulty in obtaining documents
or other evidence necessary for its case.
This motion was brought on May 11, 1983.
Held, the motion is dismissed.
The circumstances giving rise to this application are out of
the ordinary. In the more usual case, a motion of this kind is
brought either because the plaintiff has indicated no intention
of proceeding and the defendant moves to have the action
dismissed, or because the defendant wants to force the plaintiff
to take some steps to advance the action. Here, though, the
plaintiffs do wish to proceed, but the defendant seeks to
terminate the action on the ground that they have delayed too
long in advancing the case to trial.
Each such case must turn upon its particular facts. While the
justification for delay offered by the plaintiffs is not as strong
as it might be, some of the responsibility for that delay may be
ascribed to the defendant itself, since it was the party which
failed to agree to a protective order that would have applied
while the American litigation was ongoing. The dismissal of the
plaintiffs claim in that other action does not necessarily imply
a similar result for the case at bar. The change of lawyers
experienced by the plaintiffs cannot itself afford an excuse for
delay; yet, in complex patent litigation such as this, a lawyer
who takes over a case in progress from a colleague would
undoubtedly have to spend some time familiarizing himself
with the file before proceeding with the action. It should also be
noted that the defendant did not move for a dismissal of the
action at an earlier date. Instead, it was quite content to let the
matter remain dormant, and brought the present application
only when the plaintiffs indicated their intention to proceed.
It is reasonable to conclude that the defendant will indeed
suffer some prejudice if Mr. Ratzer is unable to give either viva
voce or commission evidence. On the other hand, it is unlikely
that his recollection of events would have been any better in
1981 or 1982, had the matter gone to trial then. The defendant
concedes that any dilatoriness on the part of the plaintiffs since
1980 was not accounted for by a desire to take advantage of
Mr. Ratzer's deteriorating medical condition. Moreover, his
testimony at the trial in the United States was not only
transcribed but also recorded on video tape, which the plaintiffs
have offered to produce at the trial herein. The defendant has
replied that certain topics, though addressed during that tes
timony, may have been dealt with inadequately for purposes of
the Canadian litigation; however, any supplementary evidence
which Mr. Ratzer might be able to supply would likely be of
minimal significance. The plaintiffs have also offered to make
available to the defendant the evidence given by Mr. Ratzer
before the RTPC, but in any event, the allegation relating to
monopoly is not being stressed by the defendant. Indeed, the
defendant admits that it is not presently experiencing any
difficulties in obtaining the substances in question.
The sale of the implicated division may also cause the
defendant some inconvenience. When the sale occurred,
though, the defendant was well aware of all aspects of these
proceedings and surely would have made copies of any poten-
tially relevant documents, and obtained any further information
which it might wish to submit in evidence.
The motion is dismissed, on the plaintiffs' undertaking to
provide transcripts and video tapes of Mr. Ratzer's testimony at
the American trial, together with a transcript of his evidence
before the RTPC if the defendant wishes, in the event that Mr.
Ratzer is, for medical reasons, unable to give satisfactory
evidence either viva voce or by commission.
CASE JUDICIALLY CONSIDERED
DISTINGUISHED:
Norton Co. v. Lionite Abrasives Ltd. (1976), 32 C.P.R.
(2d) 270 (F.C.T.D.).
COUNSEL:
J. N. Landry for plaintiffs.
G. E. Fisk for defendant.
SOLICITORS:
Ogilvy, Renault, Montreal, for plaintiffs.
Gowling & Henderson, Ottawa, for defend
ant.
The following are the reasons for order ren
dered in English by
WALSH J.: Defendant moves pursuant to Rule
419(1)(d) and (J) and Rule 440 [of the Federal
Court Rules, C.R.C., c. 663] for an order staying
or dismissing plaintiffs' action on the ground that
the inordinate delay in proceeding has prejudiced
the defendant in its defence of the action. Signifi
cant chronological dates are as follows. Proceed
ings in infringement of patent were commenced by
plaintiffs on August 22, 1978, dealing with two
different patents. They proceeded normally at
first; a deposition of A. F. Ratzer, a principal
witness for defendant, had been taken in United
States litigation on July 25, 1979. Unfortunately
he had a serious stroke a month later. Defendant
produced an amended statement of defence and
counterclaim on February 5, 1980. Litigation be
tween plaintiff Minnesota Mining and Manufac
turing Company and the Ansul Company and
Ciba-Geigy Corporation arising out of American
patents was proceeding in the United States as a
result of which considerable discussion took place
with respect to the need for a protective order for
witnesses to be examined in Canada. Defendant's
counsel wrote plaintiffs' counsel on February 18,
1980, setting forth the problem with respect to
such a protective order and this was replied to on
February 29, 1980 by plaintiffs' counsel, contend
ing that defendant had nothing to fear from the
form of protective order suggested. This letter
points out that as early as June 14, 1979, defend
ant's counsel had been asked about a protective
order, and now asks whether there are any textual
changes required to protect defendant's interests.
The letter concludes, "I would appreciate receiving
your considered response at your earliest conve
nience." This was never replied to, in writing in
any event.
Unfortunately Mr. Ratzer had to undergo bilat
eral carotid artery operations in August 1980, but
during the autumn of 1980 and the spring of 1981
a member of plaintiffs' law firm in charge of the
case continued to work on preparation of a Rule
447 list, including trips to Minnesota. In March
and April 1981 the United States patent trial took
place. On November 10, 1981, the judgment came
down dismissing plaintiffs' action. Counsel agree
that judgment was based substantially on Mr.
Ratzer's evidence given at the trial of the action
there.
Despite this loss plaintiffs in the spring of 1982
decided to carry on litigation in Canada and also
to commence patent-infringement proceedings in
the United Kingdom. In June 1982 counsel han
dling the matter for plaintiffs left the law firm and
a different attorney had to take over the file for
them. In August 1982 Mr. Ratzer while returning
from Canada suffered a second stroke, although
apparently not serious enough to require hospitali
zation.
On December 1, 1982, defendant sold its Foam
Division to another company. In January 1983
plaintiffs decided not to proceed with the infringe
ment of one of the patents in issue, No. 735,370,
which was about to expire in any event. In Febru-
ary 1983 they advised defendant's counsel of their
intention to resume the litigation and counsel now
handling the matter went to St. Paul, Minnesota
for three days in preparation for this. Defendant's
present motion was introduced on May 11, 1983.
It is common ground that Mr. Ratzer's state of
health is now such that it is unlikely that he could
stand the strain of travelling to testify or even
testify by means of a rogatory commission. He has
been recently taking strong doses of a narcotic
drug for pain which, according to the affidavit of
his doctor, affects the memory.
Defendant submits therefore that it will suffer
severe prejudice if plaintiffs are now allowed to
proceed after the very considerable delays which
have taken place in that it will no longer have the
advantage of Mr. Ratzer's very important testimo
ny in Canada; secondly, having sold a division of
the company with which the patent is concerned it
may have some difficulty or at least a lack of full
co-operation from employees of the purchasing
company in obtaining documents or evidence
which might be required for the defence and coun
terclaim at trial. On the first of these issues plain
tiffs state that since Mr. Ratzer has been in bad
health and on heavy medication since at least
1960, his condition is now no worse than it would
have been had proceedings gone to trial in 1981 or
1982, and moreover not only was his testimony at
trial in the United States transcribed but also it
was taken down on video tape which plaintiffs
offer to produce at the trial in Canada under
reserve only of it being impossible for him to
testify in person at the time when his evidence is
required.
Defendant is not entirely satisfied with this how
ever, stating that it may lack some evidence
because of differences in United States and
Canadian law on issues such as obviousness, which
is the subject of the counterclaim, and the date on
which it must be determined, and also with respect
to a speech which he made at one time at Cam-
pobello Island. Portions of this speech were repro
duced in a magazine article and he was examined
about this in the United States litigation. Defend
ant suggests that there might be other questions
arising out of the speech which might be pertinent
to the litigation in Canada, although it was un-
necessary or not possible to go into it in the United
States.
It is reasonable to conclude that defendant will
suffer some prejudice if Mr. Ratzer cannot testify
in person, but on the other hand it is unlikely that
he could have testified with any better recollection
of events in detail had proceedings gone to trial in
Canada in 1981 or 1982. It also appears likely that
any evidence which he might add to the evidence
already given in the United States proceedings for
which video tapes are available for use in Canada
would be of only minimal significance.
On the issue arising from the sale of the division
of defendant company with which the subject
patent is concerned, this also may well cause some
inconvenience to defendant, but as plaintiffs point
out it was well aware of all aspects of the present
proceedings when the sale was made and would
surely have kept copies of any documents which
might be pertinent and obtained any information
which it might wish to present in evidence.
Defendant has also alleged in its counterclaim
that plaintiffs attempted to further an illegal
monopoly contrary to the Combines Investigation
Act [R.S.C. 1970, c. C-23] by having certain
substances withheld from defendant's use. Mr.
Ratzer testified in Ottawa on November 19, 1975,
before the Restrictive Trade Practices Commis
sion, in connection with this and plaintiffs offer to
also make this evidence available for defendant's
use if desired. Defendant does not stress this aspect
of its counterclaim and in fact has offered to
withdraw same if plaintiffs do not continue with
the present proceedings. Plaintiffs however are
unwilling to agree to this, and defendant concedes
that it is not now experiencing any difficulties in
obtaining the necessary substances.
The above constitutes an outline of the facts.
With respect to the law this motion is unusual
since normally a defendant seeks to have an action
by plaintiffs dismissed for want of proceeding
because the plaintiffs have indicated no intention
of proceeding with it, or to force plaintiffs to take
some steps to advance the action. In the present
case the converse is so. Plaintiffs wish to proceed
with the action but defendant is attempting to stop
it because plaintiffs have taken too long in advanc
ing the matter to trial. Defendant referred to a
number of cases and the reading of them indicates
that each must depend on its own facts. Perhaps
the most pertinent case, since the facts are some
what similar, is that of Norton Co. v. Lionite
Abrasives Ltd.' in which Mahoney J. in this Court
dismissed an action for want of proceedings when
plaintiff attempted to proceed after delay of nearly
six years while awaiting the outcome of litigation
in the United States. Judge Mahoney pointed out
that the onus was on the plaintiff to prove facts
rendering its six-year delay in prosecuting the
action reasonable. He goes on to state however
that he is not disposed to reject as unproved any
concrete facts deposed to, as if they are untrue in
any material particular; the defendant ought, by
affidavit, to prove this rather than rely on any
perceived insufficiency in the affidavit. He does
point out however, and seems to rely in rendering
judgment, on the fact that there was no express
allegation of any prejudice to defendant resulting
from the delay and the nature of the action was
not such as to render prejudice implicit in such a
lengthy delay. This is clearly distinguishable from
the present case where defendant's affidavit points
out prejudice which may result from the delay. On
the other hand the delay in the present case is not
as extensive. Plaintiffs' justification for same,
though not as strong as it might be, nevertheless
does point out that it was defendant who failed to
agree to a protective order covering testimony in
Canada while the United States litigation was
proceeding, and it is at least arguable that litiga
tion in Canada or for that matter in the United
Kingdom need not necessarily have the same result
as the judgment rendered in the United States.
Defendant concedes that if plaintiffs have not
proceeded more diligently in Canada since 1980 it
is not because they were aware of Mr. Ratzer's
deteriorating medical condition and seeking to
take advantage of it. While it is unfortunate that
the attorney in the law firm acting for plaintiffs
left the firm and had to be replaced by another
attorney and this in itself cannot be justification
(1976), 32 C.P.R. (2d) 270 (F.C.T.D.).
for delay, it is certainly understandable in very
complex patent litigation such as the present
action that the replacing attorney would have to
familiarize himself with the record before moving
ahead with the action. It is also not without signifi
cance that defendant did not itself seek to invoke
Rule 440 at an earlier date to have the action
dismissed for want of prosecution, but was quite
content to leave matters dormant, and only took
this step after plaintiffs indicated their intention of
proceeding.
On the facts of this case defendant's motion will
therefore be dismissed, subject to the undertaking
by plaintiffs to produce at trial, if required, tran
scripts and video recordings of the evidence of Mr.
Ratzer during the course of the litigation in the
United States between Minnesota Mining and
Manufacturing Company and the Ansul Company
and Ciba-Geigy Corporation and also the tran
script of evidence by Mr. Ratzer before the Re
strictive Trade Practices Commission in Canada, if
defendant so desires, under reserve only of it being
established that Mr. Ratzer cannot at that time for
medical reasons testify either viva voce in Court or
by rogatory commission. Plaintiffs must take some
steps to advance the present proceedings within
sixty days hereof.
ORDER
Defendant's motion is dismissed, with costs in
the event, on plaintiffs' undertaking to provide
transcripts and video recordings of the evidence of
Mr. A. F. Ratzer given in the State of Wisconsin
in the United States of America in Civil Action
No. 78-C-330 between Minnesota Mining and
Manufacturing Company, plaintiff and the Ansul
Company and Ciba-Geigy Corporation, defend
ants, for use in the proceedings here, together with
evidence given in Canada by Mr. Ratzer before
the Restrictive Trade Practices Commission in
1975 if defendant so desires, subject only to the
reserve of Mr. Ratzer being for medical reasons
unable to give satisfactory evidence viva voce or by
rogatory commission for use in the proceedings
here. Plaintiffs must take some steps to advance
the present proceedings within sixty days hereof.
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.