Date: 20011026
Docket: T-195-94
Neutral citation: 2001 FCT 1183
OTTAWA, ONTARIO, THIS 26th DAY OF OCTOBER 2001
PRESENT: THE HONOURABLE MR. JUSTICE J.E. DUBÉ
BETWEEN:
VISX, INCORPORATED
Plaintiff
- and -
NIDEK CO., LTD.,
707284 ONTARIO INC. c.o.b. as INSTRUMED CANADA,
DR. HOWARD GIMBEL and DR. DONALD JOHNSON
Defendants
UPON an amended Notice of Motion on behalf of the defendant Nidek Co., Ltd. filed October 19, 2001, for:
1. A determination of the following main issues:
(1) Whether the costs of the action should be assessed at the highest end of Column IV of Tariff B of the Tariff of Fees, or some other level.
(2) Whether Nidek is entitled to one set of costs and the defendant Doctors entitled to their own set of costs.
(3) Whether Nidek is entitled to double its party and party costs (excluding disbursements) from March 27, 1997 to the date of judgment in view of the alleged written offer to settle which was alleged not to have been revoked.
(4) Whether the defendant Doctors are entitled to the expenses of retaining Doctor Gimbel as an expert, including fees charged by him and expenses incurred by or on his behalf for his meetings with counsel, his review of documentation, preparation of expert reports and his preparation for and attendance throughout the trial.
(5) Whether the plaintiff is entitled to one set of costs in respect of the counterclaim of the defendant Nidek, and one set of costs in respect of the counterclaim of the defendant Doctors.
(6) Whether, except for costs relating to motions, the costs of the action in infringement and the costs of the counterclaims should be apportioned as follows:
(i) The costs of the action in infringement are to include all costs relating solely to infringement and 50% of costs relating to issues common to validity and infringement, and the costs of the counterclaims are to include all costs relating solely to validity and 50% of costs relating to issues common to validity and infringement; or
(ii) The costs of the action and the costs of the counterclaims be apportioned in the following ratio:
38% - action
62% - counterclaims
(iii) and any assessment of costs to any party in respect of the total costs of the within proceeding be determined accordingly.
(7) Whether the plaintiff is entitled to the expenses of retaining Dr. Massoud Motamedi as a witness, including fees charged by him and expenses (including travel, accommodation and meals) incurred by him or on his behalf for his meetings with the plaintiff's representatives and counsel, his review of documentation) his preparation of expert reports and his being made available, if needed, at trial, as well as the expenses for travel, meals and accommodation in respect of the travel by one counsel to Houston, Texas to meet with Dr. Motamedi in January, 1999 and Dr. Motamedi's attendance at the trial held in Montreal, Quebec from September 26 to October 1, 1999.
(8) Whether the plaintiff is entitled, by way of set-off against the defendants' costs of the action for infringement otherwise to be awarded, to all of its costs thrown away in respect of the defence pleaded by defendant Nidek relating to s. 55.2 of the Patent Act (the s. 55.2 defence), including but not limited to the time spent in the preparation for and attendance at all discoveries, motions and appeals where the s. 55.2 defence was at issue.
(9) Whether the defendants should be refused all costs in respect of all discoveries of the defendants by the plaintiff and whether the defendants' costs be otherwise taxed at the lowest level of Column 1, having regard to the defendants' alleged failure to comply with their discovery obligations, and in particular, their alleged failure to give discovery in relation to the ANidek Topography Link@ embodiment of the EC-5000 and the 1, spot scanning@ embodiment of the EC-5000, which discovery, if provided, would have materially altered the outcome of the trial in favour of the plaintiff.
(10) The defendants wish to submit that the plaintiff should not be entitled to costs at all, given the evidence on the parties' cross-motions in respect of costs. The issues to be considered will be:
(i) whether or not this submission is open to the defendants to make, given that it is not raised in their Notices of Motion and given the wording of the Judgment; and
(ii) if the submission is open to the defendants, the merits of the submission.
2. Directions as agreed by the parties (the following specific directions are subject to any overriding general directions that may be made accordance with the issues defined in paragraph 1(1) to 1(10) above):
(a) Costs for all parties should be assessed at the same column and level.
(b) All parties are entitled to recover costs for two counsel (when two counsel attended) for the preparation for and attendance at examinations for discovery (Tariff Items 8 and 9).
(c) All parties are entitled to recover counsel fees for three counsel for the preparation for and attendance at trial, but not a student-at-law or law clerk. The second and third counsel fees are to be 50% of the first counsel's fees (Tariff Items 13, 14 and 15).
(d) All parties are entitled to recover costs for up to two counsel and two representatives (including the representatives' reasonable travel and accommodations) for the attendance at the pre-trial (April, 1999) and dispute resolution (June, 1999) conferences (Tariff Item 11).
(e) All parties are entitled to recover costs for one counsel for the preparation for and appearance on motions (Tariff Items 5 and 6).
(f) All parties are entitled to recover costs for one counsel for the preparation for conferences (Tariff Item 10).
(g) All parties are entitled to recover double the normal amount at whatever column and level is fixed by the Court for written arguments (Tariff Item 15).
(h) All parties are entitled to recover reasonable travel and accommodation expenses for three counsel to attend trial (Tariff Item 24).
(i) All parties are entitled to reasonable expenses of all expert witnesses who testified at trial, with the possible exception of Dr. Gimbel, if the Court so decides (see point 9, above), including reasonable fees charged by them to prepare their reports/affidavits, review the reports of the parties opposite in interest; to prepare for giving testimony at trial; and attendance throughout the trial to view the evidence of others and to testify themselves.
(j) All parties are entitled to their reasonable expenses (i.e. disbursements only) of one counsel for up to three meetings per expert witness.
(k) All parties are entitled to recover their reasonable expenses of one counsel (i.e. disbursements only) for up to five meetings with client representatives.
(l) Nidek is not entitled to any costs for any step taken in the trial division in respect of the section 55.2 Patent Act defence.
3. Directions (originally requested in February 1, 2000 Notice of Motion) to the Assessment Officer as follows:
(a) The expenses (including travel, accommodation and meals) of Dr. Ray Sayano to accompany Kan Ohtsuki to act as interpreter in the examinations for discovery of Mr. Ohtsuki and in meetings with counsel to prepare Mr. Ohtsuki's expert report and to prepare him for trial.
(b) The fees and expenses (including travel and meals) of the Japanese interpreter, Ms. Taka Crowston.
(c) The expenses and fees connected with the generation of the trial transcripts and the travel, accommodation, and meals of the court reporter, Nancy Lowery.
(d) The expenses of making photocopies of documents for Nidek representatives, the plaintiff, the co-defendants, witnesses and the Court; facsimile transmissions, courier deliveries and long distance telephone communications throughout the Action; transportation of documents for the trial; and the rental of computer and audio-visual equipment used in the preparation of evidence and in the giving of evidence at trial.
(e) The travel, accommodation and meal expenses incurred by Dr. Sayano (acting as interpreter) to attend the Court ordered mediation conference in Toronto conducted on June 24, 1999.
(f) The expenses associated with the preparation of demonstrative evidence marked or intended to be marked as exhibits at trial.
4. Such other or further relief as counsel may request and which the Court agrees to consider.
ORDER AND REASONS FOR ORDER
1. The following main issues are determined as follows:
(1) The costs of the action shall be assessed at the highest end of Column IV of Tariff B of the Tariff of Fees on the grounds that a higher than usual volume of work was involved, important and complex legal issues were raised, and the actual expenses of the litigation were much greater than the costs recoverable under Column III.
(2) Nidek is entitled to one set of costs and the defendant Doctors are also entitled to their own set of costs. It would have been improper for Nidek's counsel to represent the Doctors because it was reasonably obvious that a contentious issue between the Doctors and Nidek may arise in the future in the event that Visx was successful in the infringement action and the Nidek-supplied EC-5000 devices in the Doctors' possession had to be delivered up, destroyed, changed or replaced. Any indemnity agreement between Nidek and the Doctors in relation to the issue of the recovery of costs is irrelevant (See Letraset Canada Limited v. W.H. Brady, [1991] 2 F.C. 226 at 232 (F.C.A.), Armand v. Carr, [1927] S.C.R. 348 at 351, and also my order of September 21, 2000, confirmed by the Court of Appeal on June 14, 2001).
(3) Nidek is entitled to double its party and party costs (excluding disbursements) from March 27, 1997 to the date of judgment (excluding counterclaim costs) in view of Nidek's written offer to settle which was not revoked. Under Rule 420(2)(b) of the Federal Court Act, Nidek made a clear and unambiguous written offer to settle the action and the counterclaim in a letter dated and delivered March 27, 1997. The offer was not accepted by Visx. Had Visx accepted the offer, it would have resulted in the action and counterclaim both being dismissed with costs. Nidek's costs alone incurred after that date amounted to more than $900,000.00. Nidek was successful with reference to the action, but not to the counterclaim.
(4) The defendant Doctors are entitled to the expenses and fees of retaining Doctor Gimbel as an expert. Although a party defendant to the action, his testimony was of valuable assistance to the Court. He gave up his professional earning capacity to prepare a written report, meet with counsel, prepare his evidence and attend at trial.
(5) The plaintiff Visx is entitled to one set of costs in respect of the counterclaim of the defendant Nidek and one set of costs in respect of the counterclaim of the defendant Doctors. In my judgment dated December 16, 1999, I dismissed the plaintiff's action in infringement with costs and dismissed the defendants' counterclaims of invalidity with costs. The written offer of Nidek dated March 27, 1997, does entitle Nidek to double its costs from that date to the counterclaim but does not exclude Visx from its own (undoubled) costs with reference to the counterclaim where it was adjudged to be successful.
(6) The costs of the action in infringement and the costs of the counterclaim should be apportioned, except for costs relating to motions. Nidek submits that the plaintiff is entitled to recover nothing because it refused Nidek's offer. The plaintiff Visx submits a formula based on the amount of time spent at trial with 40% of costs related to infringement and 60% related to counterclaims. In my view, time is not the only factor to be considered and a piece by piece review of each item is not practicable and probably unworkable. I believe that it is fair and just to break the costs down to 50% on infringement and 50% on counterclaim.
(7) The plaintiff is entitled to the expenses of retaining Dr. Massoud Motamedi as an expert witness. He was not called as a witness at the trial as the plaintiff felt at the time his evidence was unnecessary to rebut the evidence of the defendants' experts. In my view, the plaintiff ought not to be penalized for having reduced the hearing time at the trial.
(8)(9) Issues 8 and 9 have been withdrawn by the plaintiff.
(10) The plaintiff is entitled to recover its costs in respect of the counterclaims. Of course, I was unaware at trial of the March 27, 1997 Nidek offer to settle both the action and the counterclaim with costs and Nidek could not so inform me in the course of the trial under Rule 400(3). However, as I mentioned earlier, that offer entitles Nidek to double its party and party costs from the date of the offer up to the counterclaim. With reference to the counterclaim, Nidek was not successful and, consequently, my judgment cannot be varied. It is customary in infringement cases for the defendant to file a counterclaim on the invalidity of the patent in question, but that counterattack does involve a risk that costs may ensue if the counterclaim is unsuccessful. The effect of Nidek's offer is to double its costs where it was successful, not to eliminate the plaintiff's costs where the plaintiff was successful.
2. The parties having agreed to directions with reference to items 2(a) to 2(l), the Court directs accordingly. However, these specific directions are subject to the overriding general directions issued in accordance with the issues defined in paragraph 1(1) to 1(10).
3. The assessment officer is directed to assess the fees and expenses referred to in paragraph 3(a) to 3(f).
4. This order will apply mutatis mutandis to the motions of the other two parties heard simultaneously.
5. Each party will bear its own costs of the instant motion.
Judge