MOTION PRACTICE – MOTIONS RELATING TO DISCOVERY
Bruce W. Stratton1
DIMOCK STRATTON LLP
MAY 13, 2010
Canadian Bar Association
1 With the assistance of Daniel Macdonald, student-at-law.
Dimock Stratton LLP – May 13, 2010 2
TABLE OF CONTENTS
1) INTRODUCTION ...............................................................................................................3
2) MOTION FOR A TRIAL DATE ........................................................................................3
3) NARROWING PLEADINGS .............................................................................................5
4) SEEKING FURTHER AND BETTER PRODUCTION.....................................................7
5) REPLACING THE DISCOVERY REPRESENTATIVE.................................................10
6) OBTAINING EVIDENCE FROM A NON-PARTY........................................................12
7) EXAMINATION OF INVENTORS .................................................................................16
8) INSPECTIONS..................................................................................................................17
9) RELIEF FROM THE IMPLIED UNDERTAKING RULE ..............................................18
10) QUESTIONS ASKED ON EXAMINATION FOR DISCOVERY ..................................19
11) CONCLUSION..................................................................................................................21
MOTIONS TO COMPEL – JANUARY 1, 2007 ONWARDS – SAMPLE OF IP CASES.........23
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1) Introduction
In Federal Court intellectual property cases, motions about questions refused to be answered in
an examination for discovery are as inevitable as mosquitoes in the spring. However, these are
not the only types of motions that relate to the discovery phase of an IP case in the Federal
Court: motions are potentially available to narrow the pleadings, to obtain further and better
production of documents, to have an inspection, to replace an uninformed representative, to
obtain evidence from a non-party, to have examinations of inventors, and to obtain relief from
the implied undertaking rule. This paper sets out how these types of motions can be useful in
advancing the discovery process. It also reviews how the Federal Court has responded to these
types of motions in the IP context.
A fundamental reality of current IP litigation in the Federal Court is the use of a case manager in
complex cases (virtually all IP actions are considered complex). The approach of the case
manager will dictate how motions may be brought and the impact of such motions on the
conduct of the case. The decision to seek a case manager early in the process and to seek
directions from the case manager will have a significant impact on the advancement of the case,
including the discovery portion of the proceeding.
Another emerging reality for IP litigation relates to the Federal Court Notice of May 1, 2009. By
the Court providing a trial date within two years of a statement of claim being filed, a new
approach to the discovery phase of IP actions will necessarily be developed by parties and by the
Court.
The use of case managers and the compression of the time to trial inevitably streamlines the
discovery process and, as is referenced below, Prothonotaries are now making decisions about
discovery that reflect the shortened time available to prepare a case for trial.
2) Motion for a Trial Date
By Notice to the Parties and the Profession, dated May 1, 2009, the Chief Justice of the Federal
Court stated that “where a party requests a trial date early in the action, the Court will endeavour,
where possible, to have the action tried within two years of its commencement.”
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Even before the practice direction it was possible to obtain trial dates within the two-year
targeted period. In the Federal Court action Research In Motion Limited v. Visto Corporation (T-
1105-06) the statement of claim in a patent infringement action was filed as of July, 2006, along
with a motion seeking both case management and a trial date. By October, 2006, the Court had
set aside a trial date for the spring of 2008. An example from after the May 1, 2009 Notice is the
patent action Apotex Inc. v. Sanofi-Aventis (T-644-09), where a statement of claim was filed on
April 22, 2009. A trial date was set as of June, 2009 for a trial hearing starting April 18, 2011
(for a 5-week trial).
The importance of deadlines was famously commented on by Samuel Johnson : "Depend upon
it, sir, when a man knows he is to be hanged in a fortnight, it concentrates his mind
wonderfully." Similarly, a looming trial date works to ensure that gamesmanship in discovery
motions will be kept to a minimum. A fast-approaching trial date ensures that the efforts of the
parties are concentrated on issues that will be important at trial.
Federal Court decisions concerning the timing for delivery of further documents, and on the
issue of conduct of discoveries generally, also reflect the urgency of a trial date that has been
fixed early in a proceeding. This theme is touched on in various contexts, below.
The Notice to the Parties and the Profession of May, 2009 also sets out possible directions
regarding discovery that are open for a case management judge to make “in accordance with best
practices”:
• require timely advance notice to the party to be examined of possible lines of questioning and documents sought to be produced.
• require timely production of documents in advance of the examination.
• permit discovery to be conducted both by written interrogatories and oral examination.
• fix time limits on discovery.
• make the case management judge available by telephone to make rulings during discovery; or, appoint, on consent, a neutral party to: a) attend the discovery and make rulings subject to review by the Court at the request of a party; or b) hear motions relating to questions refused subject to review by the Court at the request of a party; and,
• use technologies including common databases, litigation support programs and other aspects of modern technology to enhance document disclosure and use at trial.
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Prior to the conduct of discovery, parties are encouraged to use the request for admissions provided for in Rules 255 and 256 to simplify the discovery of facts, documents and other non-controversial matters.
On a procedural note, a party seeking an early trial date need not make the request by way of a
formal notice of motion. In the Apotex case referred to above (T-644-09), the request for an early
trial date was made by letter that accompanied the filing of the statement of claim.
Although several types of motions are described below that can be brought to seek to facilitate
discovery, the early scheduling of a trial date is arguably the single most effective tool available:
as a consequence, the discovery process will be managed by parties who are motivated to obtain
relevant information as efficiently as possible.
3) Narrowing Pleadings
The scope of documentary discovery and the scope of examinations for discovery are both
defined by the pleadings. Where pleadings are unnecessarily broad, they can be trimmed by a
motion to strike or by a motion for particulars. A litigant must balance the fact that a pleading is
imperfect and susceptible to an attack, with the fact that bringing pleadings motions will slow
down the pace of the action and may not appreciably advance the case. It is sometimes as easy
and as effective to deal with imperfect pleadings in the examination for discovery as it is to try to
correct pleadings by bringing a motion.
A pleading may be attacked at any time on the basis that some or all of the pleading should be
struck out. Rule 221 of the Federal Courts Rules (S.O.R./98-106) provides:
221. (1) On motion, the Court may, at any time, order that a pleading, or anything contained therein, be struck out, with or without leave to amend, on the ground that it
(a) discloses no reasonable cause of action or defence, as the case may be, (b) is immaterial or redundant, (c) is scandalous, frivolous or vexatious, (d) may prejudice or delay the fair trial of the action, (e) constitutes a departure from a previous pleading, or (f) is otherwise an abuse of the process of the Court,
and may order the action be dismissed or judgment entered accordingly. (2) No evidence shall be heard on a motion for an order under paragraph (1)(a).
The standard for striking out a portion of a pleading is very high (see Apotex Inc. v. Syntex
Pharmaceuticals International Limited et al., (2005), 44 C.P.R. (4th) 23 at paras. 31-32; affirmed
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(2006), 47 C.P.R. (4th) 328). However, where a pleading includes portions that are irrelevant to
the issues as otherwise defined, or are unsupported by material facts, they can be struck out (see
Terra Nova Shoes Ltd. v. Nike Inc. (2003), 28 C.P.R. (4th) 278 at 282-283 (F.C.T.D.), referring
to Caterpillar Tractor Co. v. Babcock Allatt Ltd. [1983] 1 F.C. 487, 67 C.P.R. (2d) 135
(F.C.T.D.); affirmed (1983), 72 C.P.R. (2d) 286n (F.C.A.)).
Although the sufficiency of the pleadings is usually something considered at the outset of
litigation or when a party seeks to amend a pleading, a motion to strike may be brought in during
the discovery process itself. Such a motion in the midst of discovery may, in some
circumstances, limit future questions on discovery by removing issues entirely. (see Caterpillar
Tractor Co. v. Babcock Allatt Ltd. [1983] 1 F.C. 487, 67 C.P.R. (2d) 135 (F.C.T.D.); affirmed
(1983), 72 C.P.R. (2d) 286n (F.C.A.)).
Another way to limit the scope of discovery is through a motion for particulars. Where a
pleading is not supported by sufficient factual detail, a responding party can seek an order
requiring particulars (see Rule 181). In appropriate circumstances, the particulars can be used to
limit the ambit of discovery.
Although in some cases the Court will conclude that a pleading is deficient on its face, in other
cases the moving party will be required to file evidence to show why it cannot plead over (see
Huzar v. Canada (1997), 139 F.T.R. 81). This evidence should come from the party itself, as
opposed to counsel for the party. Ideally, the party will show why the pleading is so lacking in
specificity that the party cannot make a reasonable response.
Pleadings that merely parrot the statutory provision that is relied upon, without further specific
factual underpinning, are susceptible to motions to strike or motions for particulars. The Court
will allow a party to make reference to knowledge of the opposing side to support an allegation,
if the allegation contains some factual content to show that it is not merely a “fishing expedition”
(see Peerless Ltd. v. Aspen Custom Trailers Inc., [2008] F.C.J. No. 1278). Pleadings that rely
solely on facts that might be uncovered on discovery are prohibited as being too speculative and
may be struck out for that reason (see Eli Lilly Canada Inc. et al v. Sandoz Canada Inc. 2009 FC
345, affirmed by Federal Court of Appeal).
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As a tactical matter, it may be possible to frame a motion as a motion to strike, with a request for
particulars in the alternative. Although a motion to strike under s. 221(a) cannot rely on
evidence, the motion for particulars in the alternative may be made on the basis of affidavit
evidence.
Other motions are available that can potentially simplify the discovery phase by changing the
scope of issues that are “live” in an action. Motions may be brought to divide a case so as to
have quantum of damages dealt with in a later proceeding (a motion to bifurcate the case).
Conversely, it is possible to seek to have joinder of actions so as to consolidate different actions
into one proceeding. Both these tactical steps will impact the discovery process. Whether, at the
end of the day, it is more efficient to bifurcate quantum issues or to seek to consolidate related
actions, will depend on the particular fact patterns of an individual case.
Because the specifics of pleadings define the conduct of the discovery phase of a case, motions
that result in changes to the pleadings will often affect the discovery phase. However, not all
motions for particulars will result in appreciable or significant changes to the discovery process.
It is only where a pleading includes a clearly problematic allegation, that will result in significant
inefficiencies in the examination phase of the case, that a pleadings motion should be brought for
reasons of advancing the discovery portion of the case.
4) Seeking further and better production
Rule 223 of the Federal Court Rules requires affidavits of documents to be exchanged. Although
the Rule provides for the exchange to occur within 30 days of the close of pleadings, this time
limit is often observed in the breach in IP litigation. Further, with the advent of electronic
discovery, and the adherence to Sedona Canada principles, the 30 day time limit appears to be
anachronistic.
The provision of complete affidavits of documents is important to prepare for examinations for
discovery and to ensure that the are not endless requests and undertakings relating to
documentary production during those examinations.
There are two rules that can be used to obtain further production of documents prior to the
examination for discovery:
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225. On motion, the Court may order a party to disclose in an affidavit of documents all relevant documents that are in the possession, power or control of
(a) where the party is an individual, any corporation that is controlled directly or indirectly by the party; or (b) where the party is a corporation,
(i) any corporation that is controlled directly or indirectly by the party, (ii) any corporation or individual that directly or indirectly controls the party, or (iii) any corporation that is controlled directly or indirectly by a person who also directly or indirectly controls the party.
227. On motion, where the Court is satisfied that an affidavit of documents is inaccurate or deficient, the Court may inspect any document that may be relevant and may order that
(a) the deponent of the affidavit be cross-examined; (b) an accurate or complete affidavit be served and filed; (c) all or part of the pleadings of the party on behalf of whom the affidavit was made be struck out; or (d) that the party on behalf of whom the affidavit was made pay costs.
Rule 225 may be used when the affidavit of documents provided appears to be limited only to
the documents within the control of the named party to the litigation and there are likely relevant
documents in the possession or control of an affiliated company.
Rule 227 is available where relevant documents are not included in an affidavit of documents,
but should be. There may be a slight shift in the approach of the Federal Court to determining
when this rule is available to a moving party. In Rhodia UK Ltd. v. Jarvis Imports (2000) Ltd.,
2005 FC 1628, Justice Tremblay-Lamer held that “it is well established that the party seeking
further production must offer persuasive evidence that documents are available.” However, in
Apotex Inc. v. Sanofi-Aventis, 2010 FC 77, Prothonotary Tabib of the Court held that “the
moving party must show that further documents likely exist.” [emphasis added in both
quotations]. If the court is persuaded that documents are available or are likely to exist, a second
requirement of relevance must be met.
The full test as articulated in the Rhodia case is as follows:
It is well established that the party seeking further production must offer persuasive evidence that documents are available, but have not been produced, and the burden of showing that another party's productions are inadequate lies with the party making the allegation: Montana Band v. Canada, [2001] F.C.J. No. 991 (T.D.) at para. 5; Havana House Cigar & Tobacco Merchants Ltd. v. Naeini (1998), 80 C.P.R. (3d) 132 at para.
Dimock Stratton LLP – May 13, 2010 9
19, aff'd (1998), 80 C.P.R. (3d) 563 (F.C.T.D.); Apotex Inc. v. Merck & Co., (2004) 33 C.P.R. (4th) 387 (F.C.) at para.13 -14. It is also well settled law that the primary consideration on the scope of discovery is relevance: Reading & Bates Construction Co. v. Baker Energy Resources Corp. (1988), 24 C.P.R. (3d) 66 at 70 (F.C.T.D.) at 70-72, cited with approval in Merck & Co. v. Apotex Inc., [2003] F.C.J. No. 1725 (C.A.) at para. 10. The principle for determining what document properly relates to the matters in issue is that it must be one which might reasonably be supposed to contain information which may directly or indirectly enable the party requiring production to advance his own case or to damage the case of his adversary, or which might fairly lead him to a train of inquiry that could have either of these consequences: Compagnie Financiere Du Pacifique v. Peruvian Guano Co. (1882), 11 Q.B.D. 55 (C.A.) at 63, cited with approval in Fiddler Enterprises Ltd. v. Allied Shipbuilders Ltd., [2002] F.C.J. No. 78 (T.D.) at para. 8.
Examples of how motions for better affidavits can be used to obtain better documentary
discovery are set out below:
• A plaintiff made allegations that a trade-mark was well known in Canada and
worldwide, that considerable time, effort and money had been invested in developing
and promoting the trade-mark. An order for a better affidavit of documents was
granted in part. Documents relating to trade-mark use and the extent that a trade-
mark was known, including advertising, flyers, documents establishing the value of
volume of such advertising, and publications containing the mark, were to be added
to the affidavit. Documents that related only to the quantum of damages were not
ordered. Rhodia UK Ltd. v. Jarvis Imports (2000) Ltd., 2005 FC 1628.
• Clinical trial documents, internal documents relating to clinical trials, and some
documents relating to product liability litigation in the U.S. were ordered to be
produced in patent litigation on the issue of whether a product had the advantages
claimed in a patent. Eli Lilly Canada Inc. v. Novopharm Ltd., 2007 FC 1195.
• The court ordered a better and further affidavit of documents so as to list all
documents even though some might fall under a foreign (U.S.) protective order.
Bombardier Produits Récréatifs Inc. v. Boss Control Inc., 2007 FC 713.
• Where a defendant argued that no profit was made due to use at a venue of the
performance rights at issue in the action, documents containing a general ledger,
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documents showing seating capacity of the venue, and some evidence of the musical
works used were ordered to be produced. Society of Composers Authors and Music
Publishers of Canada v. 1007442 Ontario Ltd., [200] F.C.J. No. 191.
As was indicated above, the Federal Court’s newly stated approach to the time to trial in
complex litigation will influence the conduct of discoveries in IP actions. A very recent decision
from the Federal Court illustrates how an impending trial date can impact the procedure that is
followed in producing documents. In Apotex Inc. v. Sanofi-Aventis (T-644-09), referenced above,
the case management prothonotary held that Rules 232(1) and 248 of the Federal Courts Rules
were aimed at avoiding a party being prejudiced by late disclosure of documents or information.
Using these Rules as context, the case manager defined a cut-off date after which no further
documents or answers to discovery questions would qualify for introduction into evidence at trial
unless there was consent or an order of the Court. In the circumstances of this case, the date was
selected to “roughly coincide” with the date on which the last of the rebuttal expert reports were
to be served. See Apotex v. Sanofi-Aventis, 2010 FC 481, April 30, 2010.
In conclusion on this point, although questions may be asked on an examination for discovery
seeking relevant documents if they are not listed in an affidavit of documents, if there is a
manifest deficiency in an affidavit of documents, a party can seek to have a further and better list
of relevant documents served. This will potentially make the examination for discovery itself
more efficient as it will allow questions to be asked based on a more complete documentary
foundation.
5) Replacing the Discovery Representative
Rule 237(3) permits the Court to order the replacement of a selected representative by “some
other person”. In practice, motions under Rule 237(3) are rare. The lack of popularity for this
type of motion stems from the relatively high standard that the Federal Court has put in place for
the replacement of a representative. It is sometimes the case that the parties will consent to a
party being represented by more than one individual on discovery. This is not uncommon in
patent litigation where the relevant technical and business information of a party may not be
known by any single person and the conduct of discoveries will be aided by agreement to have a
tag-team approach to the examinations for discovery.
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It is not appropriate to bring a motion to examine an alternate witness on an “if necessary” basis.
In other words, a motion under Rule 237(3) should not be made on a prospective basis – the
representative selected must be shown to be inappropriate and require replacement by his or her
actual appearance in an examination (see Bauer Nike Hockey Inc. v. Easton Sports Canada Inc.,
54 C.P.R. (4TH) 182, 2006 FC 1084 (F.C. Sep 11, 2006)).
An example of where the Federal Court will step in to order a new representative is found in a
trade-mark case. The Federal Court ordered that a representative for the defendant on discovery
be replaced where he showed a lack of awareness of relevant facts and there was evidence that
the chief operating officer, or alternatively the person who was “running” the business of the
defendant, would likely be better informed. A large number of questions were taken under
advisement on the initial discovery of the defendants’ representative. Six factors were identified
as being relevant to a motion under Rule 237(3):
1. The party being examined must put forward a proper and knowledgeable witness [...];
2. The witness must be able to give broad discovery, including as to supplemental questions [...];
3. The onus is on the party examining to demonstrate objectively the unsuitability of the witness in an application for a second discovery and indeed the applicant must show that the first witness is either incapable of giving evidence of his own knowledge or by informing himself or that the second witness is in a much better position to give evidence [...];
4. Convenience may be a factor, for in some instances it is more desirable and practical to have the individual involved examined, rather than to have a witness inform herself or himself [...];
5. The expense of a second witness is a factor [...];
6. The circumstances of the case, including the responsiveness of the witness, the degree to which the witness has taken pains to inform herself or himself and the materiality of the evidence sought to be canvassed with the second witness are also factors [...].
Nike International Ltd. c. Rebellion Inc., 2009 CF 785 (F.C. Jul 30, 2009), citing Liebmann v. Canada (Minister of National Defence) (1996), 110 F.T.R. 284 (Fed. T.D.), pages 291-292; see also Benisti Import-Export Inc. c. Modes TXT Carbon Inc., 2004 CarswellNat 1058, 2004 CarswellNat 2775, 34 C.P.R. (4TH) 524, 2004 FC 539, 2004 CF 539 (F.C. Apr 07, 2004)
As the case law makes clear, there is no easy or automatic mechanism to replace a representative
on an examination for discovery. In complex IP cases it is not expected that a single person will
have knowledge of all facts that might be relevant. In some cases, however, where the person
who is nominated to represent a party is clearly inadequate for the role, and there is evidence that
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others have better information, a motion to replace the representative can succeed and the
discovery will be advanced accordingly.
6) Obtaining Evidence from a Non-party
In the Federal Court, a party may seek evidence from a non-party under Rule 238(1):
238. (1) A party to an action may bring a motion for leave to examine for discovery any person not a party to the action, other than an expert witness for a party, who might have information on an issue in the action.
The Federal Court of Appeal (BMG Canada v. John Doe, [2005] 4 F.C.R. 81 (C.A.)) has held
that where Rule 238 is used to obtain pre-action discovery, the so-called Norwich Pharmacal
principles relating to an equitable bill of discovery are at play (see para. 30).
In the case of Glaxo Wellcome PLC v. M.N.R., [1998] 4 F.C. 439 (C.A.), Stone J.A. explained
that:
“The equitable bill of discovery is in essence a form of pre-action discovery. It is of ancient origin. … This remedy permits a court, acting through its equitable jurisdiction, to order discovery of a person against whom the applicant for the bill of discovery has no cause of action and who is not a party to the contemplated litigation… the case law suggests that a bill of discovery may be issued against an individual who is in some way connected to or involved in the misconduct.” (at para. 20)
Several cases in the Ontario courts have considered the availability of equitable bills of
discovery. In the case of Attorney General of Ontario v. Two Financial Institutions, 2010 ONSC
47 (CanLII), a recent decision of the Ontario Superior Court, Justice Brown set out the purpose
of, and examples of, Norwich Orders. As per Brown J. at paras. 15-17:
[15] An equitable action for discovery, commonly called a Norwich order, lies in Ontario; its purpose is to ensure that a person who has been wronged will not be prevented from obtaining legitimate redress for that wrong: GEA Group AG v. Ventra Group Co., [2008] O.J. No. 5417 (S.C.J.), para. 41; appeal allowed in part (2009), 96 O.R. (3d) 481 (C.A.). As put by Cumming J. in GEA Group AG (S.C.J.), at para. 9:
The fundamental principle underlying such an Order is that the third party against whom the order is sought has an equitable duty to assist the applicant in pursuing its rights . . . The remedy has been extended in Canada such as to allow the Court to grant an order compelling the disclosure of all information vital to the plaintiff's ability to commence an action from any party involved in the wrongful conduct of the defendant or potential defendant.
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[16] As noted by the Court of Appeal in its decision in GEA Group AG, Norwich orders have evolved to become available in a variety of circumstances: (i) where the information sought is necessary to identify wrongdoers; (ii) to find and preserve evidence that may substantiate or support an action against either known or unknown wrongdoers, or even determine whether an action exists; and, (iii) to trace and preserve assets. Nevertheless, pre-action discovery remains rare and extraordinary discretionary relief and it is not intended as a device to circumvent the normal discovery process: GEA Group AG, O.C.A., para. 104.
The Federal Court of Appeal has set out a five-part test for whether to grant an order:
(1) the applicant must establish a bona fide claim against the unknown alleged
wrongdoer;
(2) the third party against whom discovery is sought must be in some way connected
to or involved in the misconduct;
(3) the third party must be the only practical source of the information available to the
applicant;
(4) the third party must be reasonably compensated for expenses and legal costs
arising out of compliance with the discovery order; and
(5) the public interest in favour of disclosure must outweigh the legitimate privacy
interests.
[as cited in Warman v. Fournier et al. Ontario Divisional Court decision (2010 ONSC
2126, May 3, 2010), para. 30]
Equitable bills of discovery, or applications under the appropriate rules of court, are sometimes
sought in cases relating to Internet technology to obtain the identity of potential defendants when
the identifying information is available within a computer system but not to the public or to the
potential plaintiff (see BMG, Warman, York University v. Bell Canada Enterprises 2009
CarswellOnt 5206 (Ont. S.C.J.), and Mosher v. Coast Publishing Ltd., [2010] N.S.J. No. 211,
April 19, 2010).
In the BMG case, the Federal Court of Appeal determined that the evidence brought to the Court
was hearsay and therefore there was no proper basis for the motion made under Rule 238. The
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refusal of the motions judge to grant the order for discovery of Internet Service Providers (so as
to uncover the identity of individuals who were alleged to have illegally shared sound recordings
using the Internet) was therefore upheld on appeal. However, the Federal Court of Appeal did
suggest that the motions judge had erred in requiring a prima facie case to be made out, rather
than a bona fide case as had been suggested in the Glaxo decision of the same Court. Further the
Federal Court of Appeal confirmed that Rule 238 could be used to obtain pre-suit discovery.
The very recent Warman v. Fournier et al. Ontario Divisional Court decision (2010 ONSC 2126,
May 3, 2010) considered whether an order for disclosure of identities of customers of Internet
service providers based on IP addresses was warranted in a defamation action. The Divisional
Court sent the matter back to go before a different motions judge for reconsideration. The order
had initially been made to require disclosure under Ontario Rules of Civil Procedure Rule 30.06
and Rule 76.03. The motions judge had concluded that no prima facie case needed to have been
made out as the rules were mandatory – if the information was relevant and not protected by
privilege it would be ordered to be produced. The Ontario motions judge had distinguished an
earlier Ontario case (Irwin Toy Ltd. v. Doe, [2000] O.J. No. 3318 (S.C.J.)) and the Federal Court
BMG decision on the basis that those decisions were discretionary. The Divisional Court
concluded that the principles as set out in BMG and in Irwin Toy both applied to the application
made under the Ontario rules. However, the underlying cause of action in Warman v. Fournier
(defamation) differed from the action at issue in BMG (copyright) and therefore although the
principles were the same, the specific factors that should have been considered by the motions
judge were held to be different. In the result, the motions judge had been in error as he had not
applied the prima facie case standard that was appropriate in the defamation context and he had
not considered the interest in freedom of expression that should have been part of the
consideration in granting the order sought.
The issue of whether the standard for the merits of the case ought to be a prima facie or a bona
fide one was considered post-BMG in the Alberta court decision A.B. v. C.D., [2007] A.J. No.
912 (ABQB), at para. 24:
As has been pointed out in some of the Canadian case law, there may not yet be a consensus on the standard of proof which the applicant for a Norwich order must meet relative to the merits of its case: some decisions have held that a prima facie case must be met, while other decisions have set a lower standard. For the reasons I have set out above, perhaps part of the
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reason for that lack of consensus is the very broad reach of Norwich remedies; depending on the exact nature of a specific application, a court may require a different standard of compliance with the first test. It also should be noted that, even without consensus on the standard in relation to the first issue, the requirement for a court to address the interests of justice as one of the five factors relevant to the issuance of an order, allows a court to balance the level of proof of the applicant's claim against the other equities in the case. Therefore, in decisions such as Straka, while the Ontario Court of Appeal adopted the bona fide claim standard for the first factor, at the conclusion of its analysis, it returned to the fact that the applicant's level of proof of his claim was not equivalent to the level found in the original Norwich as one factor that militated against the issuance of an order.
Recently, Justice Cronk of the Ontario Court of Appeal concluded that “many of the general
principles applicable in Ontario to the granting of Norwich relief are well-developed. That said,
the following observation by Morden A.C.J.O. in Straka v. Humber River Regional Hospital
(2000), 51 O.R. (3d) 1, [2000] O.J. No. 4212 (C.A.),, at para. 51, remains apposite: "[t]he nature
and scope of the Norwich Pharmacal principle is far from settled".
It should be noted that, although Rule 238 is relied upon in some cases to obtain information
before litigation is commenced against a particular party, the rule is also capable of being applied
to obtain discovery against non-parties where those non-parties will not be added as parties to the
case. This occurred in a recent Direction of the Federal Court in DataTreasury Corporation v.
Royal Bank of Canada et al. (T-1661-07 and T-1472-07; April 8, 2010). Case manager
Prothonotary Aalto directed that leave was to be granted to have examination of non-parties
under Rule 238 in a patent infringement action. Informal attempts by the patentee to obtain
information about allegedly relevant facts known to non-parties were not fruitful. The
Prothonotary held that it would not be fair to have the patentee go to trial without having an
opportunity to obtain the information by asking questions of the non-parties. The alternative to
the order being granted was held to be “the possibility of chaos and mayhem in the conduct of
the trial” as there would be effectively discovery occurring in the witness box at the trial hearing.
The admitted wholly exceptional nature of the remedy (Sawridge Band v. Her Majesty the
Queen, 2002 FCT 693) was held to be appropriate given the facts of the case.
In summary, the examination of non-parties is a potentially contentious step that may be required
to allow proper parties to be added to litigation or to have a proper opportunity to prepare for
trial. In most IP cases it is not likely that to obtain the evidence from non-parties will require an
order for examination. However, the ability of individuals to cloak their identity when using on-
Dimock Stratton LLP – May 13, 2010 16
line services makes the Norwich order a potentially attractive tool for uncovering the real party at
interest in a case.
7) Examination of Inventors
The practice of the Federal Court appears to be well-settled: examination of an inventor of a
patent is available under Rule 237(4) (see Visx Inc. v. Nidek Co., (1998) 81 C.P.R. (3d) 572, 150
F.T.R. 92). There is no need to establish that examination of an inventor is necessary (see
Faulding (Canada) Inc. v. Pharmacia S.p.A., (1998) 82 C.P.R. (3d) 287 (F.C.A.); see also
Richter Gedeon Vegyszeti Gyar RT v. Apotex Inc., 226 F.T.R. 282, 2002 CarswellNat 3560, 2002
CarswellNat 4040, 23 C.P.R. (4TH) 478, 2002 FCT 1284, affirmed by 308 N.R. 188, 2003 FCA
221). Rule 90(2) permits the Federal Court to set the terms and manner of examination for
inventors who are outside Canada. The Federal Court will issue commissions and letters rogatory
to allow for examination for discovery of inventors outside Canada (see Visx Inc. v. Nidek Co.,
supra).
The examination of an inventor may be used to determine facts relating to the making of the
invention that will be relevant to issues of claims broader than the invention made. The duty of
good faith in the prosecution of a patent may make the evidence of the inventor relevant as
statements made to the Patent Office must fit with the facts as to what the invention actually
consisted of at the time of the application. Lastly, the inventive “climate” and the steps actually
taken by the inventor leading up to the making of the invention have been held to be relevant to
the question of obviousness and therefore discovery of the inventors is potentially of more
significance than the statutory scheme of the Patent Act would, on its face, suggest.
The above case law makes clear that the examination of an inventor is not limited to subject-
matter already covered in the discovery process. However, examination of the inventor (as
assignee of the patent right in a patent action) does not automatically make the lab notebook of
the inventor relevant. The question of relevance of the lab notebook will be determined based on
the issues as defined in the pleadings (see Eli Lilly & Co. v. Apotex Inc., 2006 FC 282, 51 C.P.R.
(4th) 290, 288 F.T.R. 161).
Dimock Stratton LLP – May 13, 2010 17
For the reasons set out above, the examination of the inventor may add time and expense to the
discovery phase of a patent action but it is a step that is automatically granted if sought, and it is
virtually automatic that a party opposite in interest will benefit from such an examination.
8) Inspections
The Federal Courts Rules permit inspections to be ordered. These will most frequently be of
interest in patent cases, where prior art or allegedly infringing products or processes may be
difficult to document but may be amenable to inspection. The governing rule is set out as
follows:
241. (1) On motion, where the Court is satisfied that it is necessary or expedient for the purpose of obtaining information or evidence in full, the Court may order, in respect of any property that is the subject-matter of an action or as to which a question may arise therein, that
(a) a sample be taken of the property; (b) an inspection be made of the property; or (c) an experiment be tried on or with the property.
Entry on land or building (2) An order made under subsection (1) may authorize a person to enter any land or building where the property is located for the purpose of enabling the order to be carried out.
Personal service on non-party (3) Where a motion is brought under subsection (1) for an order in respect of property that is in the possession of a person who is not a party to the action, that person shall be personally served with notice of the motion.
The cases regarding inspection are not entirely consistent. In Poly Foam Products Ltd. v.
Cascades Sentinel Ltd., 31 C.P.R. (3d) 11 (Fed. T.D. 1989) the Associate Chief Justice held that
the widespread inclusion of the inspection process in rules of practice in various courts suggested
that an inspection “ought to be regarded as somewhat more an ordinary part of the discovery
process” than other cases had held. The standard used by the ACJ in the Poly Foam case was to
consider whether a trial judge would find that the evidence from an inspection would be
“beneficial”. Earlier cases had held that it was necessary to establish that an inspection was “the
only means” available to ascertain a particular point (for example, infringement of a patent in
issue) – see Posi-Slope Enterprises Inc. v. Sibo Inc. (1984), 1 C.P.R. (3d) 140 (F.C.A.). The
Federal Court appears to have followed the approach of Poly Foam in ordering production of
samples in pharmaceutical litigation to allow parties to conduct their own tests on substances
made by their opponents in litigation (see Glaxo Group Ltd. v. Novopharm Ltd., (1999), 87
Dimock Stratton LLP – May 13, 2010 18
A.C.W.S. (3d) 356, [1999] F.C.J. No. 381 (QL), and Richter Gedeon Vegyszeti Gyar RT v.
Apotex Inc., 226 F.T.R. 282, 2002 CarswellNat 3560, 2002 CarswellNat 4040, 23 C.P.R. (4TH
Glaxo Group Ltd. v. Novopharm Ltd., (1999), 87 A.C.W.S. (3d) 356, [1999] F.C.J. No. 381
(QL)) 478, 2002 FCT 1284, affirmed by 308 N.R. 188, 2003 FCA 221).
In a patent infringement action inspection of products by both the plaintiff and the defendant was
ordered. The plaintiff patentee was ordered to allow inspection of its own devices on the basis
that the devices were admitted to embody the invention and the actual products were therefore
relevant to questions of validity of the patent. The products of the defendant were ordered to be
made available for inspection, but not used products. Although the plaintiff had sought
inspection of the used devices to establish the way in which the devices had worked, the Court
held that the evidence that could be tendered as a result of such an inspection was too speculative
to justify the intrusive nature of the order sought (Esco Corp. v. Quality Steel Foundries Ltd.,
273 F.T.R. 151 (Eng.), 2005 CarswellNat 1949, 2005 CarswellNat 4263, 39 C.P.R. (4TH) 307,
2005 FC 589).
Where the subject-matter of an IP case is of a character that makes it able to be brought to the
lawyer’s desk, an inspection is a non-starter. However, in many cases the subject-matter of the
dispute is not easily represented on paper or electronically. In such cases, the ability to see the
device or process in situ may be invaluable and may save time and effort that would otherwise
go into having witnesses describe complex technology in words or sketches.
9) Relief from the Implied Undertaking Rule
Many IP actions in Canada have counterpart actions in other jurisdictions, or even within the
Federal Court itself. Where documents are produced and transcripts generated in the discovery
process, the implied undertaking rule will operate to preclude use of such materials for a purpose
collateral to the action that gave rise to the material. However, the Court is able to make an order
to permit the production of such materials in other cases in appropriate circumstances. Justice
Rothstein, as a Judge of the Federal Court, Trial Division, identified two factors that required
consideration when determining whether to provide relief under the implied undertaking rule:
(1) the existence of special factors; and (2) the weighing of injustice between the parties between
granting or denying the application for relief from the rule (Visx Inc. v. Nidek Co. (1998), 80
C.P.R. (3d) 437 (Fed. T.D.)). The circumstances were held to be “special” where documents that
Dimock Stratton LLP – May 13, 2010 19
were otherwise public had been destroyed but the plaintiff had been provided with copies of such
documents in previous litigation (Kirkbi AG v. Ritvik Holdings Inc. [2001] 1 F.C. 681, 196
F.T.R. 214, 10 C.P.R. (4th) 531).
The Federal Court has reconsidered the test in Visx Inc. v. Nidek Co., supra, and concluded that it
was not different from the test referenced by the Supreme Court of Canada in Lac d’Amiante du
Quebec Ltee v. 2858-0702 Quebec Inc. 2001 SCC 51, [2001] 2 S.C.R. 743. Justice Snider in the
Federal Court concluded that the test was better expressed as allowing relief from the implied
undertaking rule by considering all surrounding circumstances to determine whether the interests
of justice would be served by granting relief (Sanofi-Aventis Canada Inc. v. Apotex Inc. 2008 FC
320, 66 C.P.R. (4th) 391). The Court in Sanofi identified twelve different factors to consider in
deciding to waive the implied undertaking rule. The potential prejudice was assessed in the
Sanofi case and compared to the potential benefit to result in an order allowing relief from the
implied undertaking rule for some but not all material in issue.
A motion for relief from the implied undertaking rule cannot be successfully brought if the issue
is merely one of convenience. Rather, there must be identifiable circumstances that require the
suspension of the rule. For this reason, this type of motion will be useful only where there is no
other practical way to obtain the information sought.
10) Questions Asked on Examination for Discovery
Motions concerning discovery questions are the hallmark of much IP litigation in the Federal
Court. Such motions may be referred to as motions to compel (as they will compel a party to
reattend on examination for discovery) or refusals motions (as the motions relate to questions
asked on examination for discovery but which questions were subject to objection by counsel for
the party representative on the examination). Current Federal Court practice requires full
disclosure before trial and the purpose of examination for discovery is to ensure full disclosure
between the parties. Full disclosure in advance, in preparation for trial, is to assist in a
determination of the truth concerning matters in issue, to narrow the issues in dispute and to
expedite trial of the real issues outstanding (see Apotex Inc. v. Wellcome Foundation Limited
(1993), 51 C.P.R. (3d) 322 at 328 (F.C.T.D.)).
Dimock Stratton LLP – May 13, 2010 20
Rule 242 of the Federal Courts Rules set out the circumstances on which a party representative
is entitled not to answer a question on discovery:
(a) the answer is privileged;
(b) the question is not relevant to any unadmitted allegation of fact in a pleading filed by
the party being examined or by the examining party;
(c) the question is unreasonable or unnecessary; or
(d) it would be unduly onerous to require the person to make the inquiries referred to in
rule 241.
It is beyond the scope of this paper to review how the Federal Court deals with each of these
types of objections in IP proceedings. In some cases, the Federal Court appears to be prepared to
wade into detailed questions of relevance and closely parse the propriety of questions that are all
too frequently the subject of such motions. However, the widespread acceptance of case
management in IP cases has given rise to a reluctance by Judges to interfere with discovery
rulings made by Prothonotaries as part of the case management scheme now followed in the
Federal Court.
Attached to this paper is a listing of a sample of reported motions to compel reattendance of
representatives on discovery in IP cases from 2007 and onwards. Although this list is not a
complete survey of all such orders, it does suggest some trends or leanings from the Court. For
example, in 14 of the 17 reported cases there was an order that required some further facts or
documents to be provided. However, despite that statistic, it should also be noted that in at least
12 of the 17 cases there were at some questions asked on discovery that were refused by counsel
in the discovery and which were not ordered to be answered by the Court. It is therefore not
surprising that motions on discovery questions continue to be fought out in IP cases – in the
majority of the cases there is a split decision of some kind – answers are ordered for some
questions but refusals are upheld for some questions. Given the mixed results, it can often appear
to be worthwhile to bring these types of motions and similarly appear to be worthwhile to resist
them.
Dimock Stratton LLP – May 13, 2010 21
Appeals are common in the reported cases. Of the 17 reported, there were 15 appeals (3 to the
Federal Court of Appeal). There are some clear messages being sent from the Judges on appeal,
if the statistics are indicative of a trend going forward:
1. In 11 out of the 15 discovery motions that were appealed, the appeal of the prothonotary’s decision was ultimately denied.
2. In no case did an appeal reverse a prothonotary’s decision that ordered answers to be provided.
3. In 4 of 15 cases an appeal reversed a prothonotary’s decision so that after appeal a party was required to provide answers (whereas the prothonotary had held intially that no answers were needed).
For parties hoping to roll back an order of a prothonotary requiring that an answer be given, the
recent reported cases make unhelpful reading. The Court is not apparently amenable to appeals
of these types of motions. However, there may be a chance (statistically at about 25%) to
overturn a decision of a Prothonotary which originally refuses to require answers on discovery.
The above indicates that motions for answers to questions refused will remain a staple of Federal
Court IP practice – as both moving parties and resisting parties have a likely upside to fighting
such motions. However, the statistics suggest that appeals from such motions are not very
productive. Further, when Prothonotaries order that questions should be answered, the appellate
Judges are unlikely to be of assistance to parties seeking to change those decisions.
11) Conclusion
To conduct an efficient and productive examination for discovery in an IP case, counsel will look
first to having the Federal Court schedule a trial date as early as possible. Where the pleadings,
document lists or representatives of the opposing side are lacking, appropriate motions can be
brought seeking improvements. In patent cases, a party should usually seek to examine the
inventors, whether they are within Canada or not. There is also a more general procedure that
allows a party to examine a non-party in certain circumstances. Where the paper or electronic
description of the subject-matter of a case is not sufficient, an inspection is available. If there is
information available that is subject to the implied undertaking rule, a party can seek relief, if
appropriate in the interests of justice. Lastly, motions that deal with questions asked and refused
to be answered will almost always be a feature of IP actions in the Federal Court. However, a
Dimock Stratton LLP – May 13, 2010 22
party should consider seriously whether the order of a Prothonotary in such a motion is one that
an appellate judge will take an interest in reviewing, or not.
The most efficient discovery in an IP case is a discovery that requires no interlocutory motions.
In real-world litigation, however, motions are sometimes necessary to ensure that the production
of documents and examinations are conducted smoothly and quickly and to allow parties to be
ready to try their cases within the two short years that the Federal Court now expects.
Dimock Stratton LLP – May 13, 2010 23
Motions to Compel – January 1, 2007 Onwards – Sample of IP Cases
Style of Cause Type of Case Initial Motion to compel - Party and Outcome
Details - What was sought, what was
ordered
The appeal of the motion to compel and any further
appeals
Merck & Co. v. Nu-Pharm Inc., 2007 FC 537
Seven motions were brought appealing 4 Prothonotary orders. One motion was an appeal from Prothonotary compelling questions be answered
Plaintiff brought motion to compel answers refused on examination.
Nu-Pharm ordered to answer certain questions
Prothonotary Aronovitch ordered questions in categories 1-11 to be answered subject to certain limitations.
Three appeals against the Refusals Order were brought.
Nu-Pharm appeal – dismissed, no error by Prothonotary
Merck appeal – dismissed, Prothonotary permitted to limit follow-up
Benyak Appeal – dismissed. Had refused or took under advisement 1500 questions, as senior officer should have been informed
Bombardier Produits Recreatif Inc. v. Boss Control Inc., 2007 FC 713
2 motions before a Prothonotary – second motion was a motion to compel.
Defendant brought motion seeking certain questions answered
39 questions were outstanding at end of discovery. 31 questions were answered in the motion record in response.
Court ordered re-attendance for single question
No appeal
J2 Global Communications Inc. v. Protus IP Solutions Inc., 2008 FC 760
Appeal of two Prothonotary orders brought by Protus
Both parties brought motions to compel. J2 was successful on their motion, Protus was not successful on theirs
In the original motions 2 orders were made: 1) that Protus answer 4 questions; and 2) that the Plaintiff was not required to provide answers
Appeal dismissed – no indication that the Prothonotary was wrong in ordering Protus to answer questions.
Prothonotary made error in not requiring J2 to answer some question.
Further appeal to FCA by J2 (2009 FCA 42) dismissed
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Michelin North America (Canada) Inc. v. 9130-4550 Quebec, 2008 FC 1101
Appeal of order refusing to compel
Defendant’s motion refused.
Original motion to compel plaintiff to provide further and better answers to discovery questions and produce related documents was refused
Appeal allowed – Prothonotary erred – order made on appeal requiring questions to be put to third parties with knowledge of relevant issue
Apotex Inc. v. Wellcome Foundation Ltd., 2007 FC 236
Appeals by both parties of order requiring both parties to answer questions
Both parties brought motions to compel and were successful
In the original motions parties sought certain questions be answered (number of question unknown)
Appeals dismissed – disputed questions relevant
Eli Lilly and Co. v. Apotex Inc., 2007 FC 477
Appeal of order requiring questions be answered
Defendant’s motion to compel answers granted
In the original motion defendant sought answers to questions (number of questions unknown)
Appeal dismissed – but Prothonotary made “clerical error” in not indicating the specific questions to be ordered – question 3 and 4 of schedule A not relevant and do not have to be answered – all others have to be
Peak Energy Services Ltd. v. Douglas J. Pizycki Holdings Ltd., 2007 FC 824
Appeal of decision of Prothonotary refusing production of documents
Defendant’s motion to compel was denied
In the original motion defendant sought the production of transcripts of the discovery of representatives of the Plaintiff in other actions
Appeal dismissed – no error by Prothonotary
Eli Lilly and Co. v. Apotex Inc., 2008 FC 659
Appeal of decision of Prothonotary dismissing motion to compel
Plaintiff’s motion to compel was denied
In original motion Plaintiff sought answers to questions refused on discovery – 6 questions not answered
Appeal dismissed – no error
Appealed further to FCA (2009 FCA 39) – appeal allowed in part – one of three categories of questions made relevant due to amended pleading.
GSC Technologies Corp. v. Pelican International Ltd., 2009 FC 223
Appeal of decision of Prothonotary dismissing motion to compel
Plaintiff’s motion to compel was denied
Plaintiff sought to compel the defendant to answer questions refused on discovery.
Appeal dismissed – no error
Dimock Stratton LLP – May 13, 2010 25
Merck & Co. v. Apotex Inc., 2008 FC 1121
Appeal of decision of Prothonotary dismissing motion to compel
Defendant’s motion to compel was denied
Defendant sought to compel Plaintiff to answer 4 questions refused on discovery
Appeal allowed – plaintiff required to answer 4 questions due to implied waiver of privilege
Further appeal to FCA by plaintiff (2009 FCA 27) – appeal allowed, decision of prothontary restored
Valence Technology Inc. v. Phostech Lithium Inc., 2010 FC 12
Appeal of decision of Prothonotary granting motion to compel
Plaintiff’s motion to compel was granted
Plaintiff sought to compel defendant to answer 9 questions refused on discovery, including producing documents
Appeal denied – deference given to Prothonotary
Bristol-Myers Squibb Co. v. Apotex Inc., 2007 FCA 379
Appeal of decision of FC dismissing appeal from decision of Prothonotary compelling certain answers after cross-examination on an affidavit
Respondent’s initial motion to compel was granted in part
Plaintiff sought to compel answers and documents. Prothonotary granted order in part - BMS to answer certain questions, for others answer to the extent of producing documents.
Both parties appeal Prothonotary decision. Martineau J. dismissed both appeals (not reported)
Both parties appeal that decision.
In Apotex appeal 11 Qs in issue that Apotex seeks answer to in addition to document. Appeal dismissed – no error.
In BMS appeal 6 Qs in issue that BMS seeks order not required to answer. Appeal dismissed – Prothonotary made no error in requiring questions be answered
Apotex appeal -
Dimock Stratton LLP – May 13, 2010 26
Society of Composers, Authors and Music Publishers of Canada v. MLSE Ltd., 2008 FC 1099
Appeal of decision of Prothonotary
SOCAN brought motion – granted by Prothonotary
Society sought answer to question singly on discovery as to MLSE’s knowledge of who performed concerts and what songs, but don’t have to make enquiries beyond representative
Appeal by SOCAN – Hugessen varied order compelling answer to include an inquiry of all MLSE’s present and former employees
MLSE appealed to FCA (2009 FCA 78) – no error - appeal dismissed
Purcell Systems Inc. v. Argus Technologies Ltd., 2007 FC 660
Motion before Prothonotary
Both parties brought a motion to compel – partial success on both motions
For plaintiff’s motion – 5 questions need not be answered, 20 questions to be answered
For defendant’s motion – 24 questions need not be answered, 9 questions to be answered
No appeal
AstraZeneca Canada Inc. v. Apotex Inc., 2008 FC 1301
Two appeals by defendant. One to overturn order to compel, one seeking to compel answers
Answers ordered to be provided by defendant and certain questions of the plaintiff not ordered to be answered
Questions asked by the defendant were not “linked” to its pleading and did not need to be answered; questions about the product and marketing by the defendant did need to be answered.
Apotex appealed – the appeal was dismissed, Prothonotary made no error. A review of the discovery process and the correct standards for discovery was provided by Justice Hughes.
Apotex Inc. v. GalxoSmithKline Inc., 2009 FC 378
Both parties appealed the order of the Prothonotary
Both parties brought motions to compel – Apotex was required to answer certain questions, GSK was not required to answer questions
Both parties were seeking questions to be answered (number of questions unknown)
Both appeals dismissed –Prothonotary made no errors
Dimock Stratton LLP – May 13, 2010 27
Apotex Inc. v. H. Lundbeck A/S, 2009 FC 419
Defendant’s appeal an order of Prothonotary compelling defendant to answer certain questions
Plaintiff brought motion – was successful
Plaintiff sought questions to be answered (number of questions unknown)
Appeal dismissed – Prothonotary made no errors