Federal Court Decisions

     Date: 19990917

     Docket: T-195-94

B E T W E E N :

     VISX, INCORPORATED

     Plaintiff

     - and -

     NIDEK CO., LTD.

     707284 ONTARIO INC. c.o.b.a. INSTRUMED CANADA

     DR. HOWARD GIMBEL, and DR. DONALD JOHNSON

     Defendants

     REASONS FOR ORDER

     (Rendered from the Bench at Ottawa, Ontario,

     Tuesday, June 9, 1998)

HUGESSEN J.

     [1]      I have before me a motion by defendant Nidek which seeks two separate forms of relief. First, the motion, which was filed prior to April 25, the date of coming into force of the Federal Court Rules, 1998, seeks an order under former Rule 480 to have the issues of damages and/or profits determined by a reference.

     [2]      The action is one for patent infringement and has been pending for some considerable time. The defendants have raised in both their counterclaims issues as to validity. There have already been several days of examinations for discovery. It appears, however, quite clear that if the issues of damages and/or profits remain lively for the purposes of trial, there will have to be several more days of examinations for discovery on those topics alone.

     [3]      In my view, the governing principles are well-known and were established in the most recent judgment of the Court of Appeal on the matter in the case of Dupuy¹. They appear to me to be applicable to this case. The only reservation I have about ordering severance is caused by the fact that there has already been some discovery on the issues of damages and profits, but the fact that, as I have said, there remain several more days of such discovery to be accomplished is, in my view, determining.

     [4]      The importance of reducing the cost of trial and bringing matters on to trial as quickly as possible, which are paramount considerations in the application of the Federal Court Rules, 1998², make this, in my view, an appropriate case for the granting of an order for the severance of the trial. Since the Federal Court Rules, 1998 are now in effect, it is my intention to make that order pursuant to Rule 107³. That rule does not envisage a reference as such but simply a separate determination by trial or otherwise of a separate issue. Therefore, the issue of damages and/or profits will be tried separately from and subsequent to the issue of liability.

     [5]      I would only add that making an order under Rule 107 does not foreclose the possibility, in due course, of a further order being made under Rule 153 to have the issues of damages and/or profits determined by a reference if appropriate. Experience has, however, indicated that damages and profits are rarely exclusively matters of fact, and references are intended to be only for the determination of questions of fact⁴.

     [6]      The second part of the motion before me seeks the issuance of letters rogatory or a rogatory commission to effect the examination for discovery of the person who is alleged to have been the inventor of the patent in issue and the assignor of that patent to the present plaintiff. The plaintiff takes objection to this request on two separate grounds.

     [7]      First, it is said that the authority to issue letters rogatory flows only from Rule 272 which is, by its terms, limited to examinations ordered under Rule 271 which, in turn, deals with examinations for use at trial. An examination for discovery, especially of a person who is not a party such as an assignor, is not an examination for use at trial.

     [8]      The second objection taken is that this Court is unable by its statutory framework to give an assurance of reciprocity to courts in New York, United States of America, where the person sought to be examined resides.

     [9]      The answers to those objections are, in the first place, that the applicable rule with respect to examination for discovery out of Canada is Rule 90(2)⁵. That rule sets forth, in very general terms, that where a person is to be examined orally (and that clearly includes an examination for discovery) out of Canada, the Court has a very broad discretion in setting the terms and manner of that examination. Here, the right of the defendant to examine the assignor for discovery is clearly set out in Rule 237(4)⁶ and a commission is the most appropriate manner of exercising such right.

     [10]      The second objection, having to do with this Court's power to reciprocate is, in my view, not a relevant one. If I had any doubts as to this Court's power to issue subpoenas to enforce commissions issued out of foreign courts, I have absolutely no doubt that there are courts in every province of Canada which do have that power. In my view, what is important is not that the Court must itself be able to reciprocate but that it must be able to show that some court in the country where it sits, has that power. That is unquestionably the case with respect to commissions issuing out of courts in the United States of America. Comity stems from the law of nations and does not depend on the jurisdiction of individual courts⁷.

     [11]      The Court of Appeal had to deal with exactly this kind of question in the recent case of Richter⁸. It looked at the predecessors of present Rule 90(2) and present Rule 237(4). Based upon those two rules, the Court issued commissions and letters rogatory for the examination for discovery of inventors resident outside of Canada. That is what I am asked to do.

     [12]      I would only add that there is evidence before me which also satisfies me that the commission, if issued by this Court, will be given effect to by at least one and more likely two courts in New York, U.S.A.

     [13]      Accordingly, I propose to issue orders allowing the motion and granting both forms of relief sought. I will invite submissions from counsel first as to the question of costs if that is relevant and second as to the precise form of the orders which are to go.

     "James K. Hugessen"

     judge

__________________

¹      Depuy (Canada) Ltd. et al v. Joint Medical Products Corp. et al (1996), 67 C.P.R. (3d) 145 (F.C.A.)

²      Rule 3 reads:

3. These Rules shall be interpreted and applied so as to secure the just, most expeditious and least expensive determination of every proceeding on its merits.

3. Les présentes règles sont interprétées et appliquées de façon à permettre d'apporter une solution au litige qui soit juste et la plus expéditive et économique possible.

³      Rule 107 reads:

107. (1) The Court may, at any time, order the trial of an issue or that issues in a proceeding be determined separately. (2) In an order under subsection (1), the Court may give directions regarding the procedures to be followed, including those aplicable to examinations for discovery and the discovery of documents.

107.(1) La Cour peut, à tout moment, ordonner l'instruction d'une question soulevée ou ordonner que les questions en litige dans une instance soient jugées séparément. (2) La Cour peut assortir l'ordonnance visée au paragraphe (1) de directives concernant les procédures à suivre, notamment pour la tenue d'un interrogatoire préalable et la communication de documents.

⁴      Rule 153 reads:

153. (1) The Court may, for the purpose of making an inquiry and report, refer any question of fact in a proceeding to a judge or other person designated by the Chief Justice. (2) Notwithstanding rules 155 to 160, the Court may at any time give directions regarding the conduct of a reference.

153. (1) La Cour peut renvoyer toute question de fait pour enquête et rapport devant un juge ou toute autre personne désignés par le juge en chef pour agir à titre d'arbitre. (2) Malgré les règles 155 à 160, la Cour peut à tout moment donner des directives concernant le déroulement d'un renvoi.

⁵      Rule 90(2) reads:

90. (1) ... (2) Where a person to be examined on an oral examination resides outside Canada, the time, place, manner and expenses of the oral examination shall be as agreed on by the person and the parties or, on motion, as ordered by the Court.

90.(1) ... (2) Lorsque la personne devant subir un interrogatoire oral réside à l'étranger, l'interrogatoire est tenu aux date, heure et lieu, de la manière et pour les montants au titre des indemnités et dépenses dont conviennent la personne et les parties ou qu'ordonne la Cour sur requête.

⁶      Rule 237(4) reads:

237. (1) ... (4) Where an assignee is a party to an action, the assignor may also be examined for discovery.

237. (1) ... (4) Lorsqu'un cessionnaire est partie à l'action, le cédant peut également être soumis à un interrogatoire préalable.

⁷      Gulf Oil Corp. v. Gulf Oil Canada Ltd. et al, [1980] 2 S.C.R. 39 @ 56

⁸      Richter Gedeon Vegyészeti Gyar Rt. v. Merck & Co. et al , [1995] 3 F.C. 330, 185 N.R. 88 (C.A.)