Date: 20040119
Citation: 2004 FC 35
Ottawa, Ontario, Monday, January 19, 2004
PRESENT: MR. JUSTICE BEAUDRY
BETWEEN:
CAMOPLAST INC.
Plaintiff/defendant to counterclaim
and
SOUCY INTERNATIONAL INC.
and
KIMPEX INC.
Defendants/plaintiffs by counterclaim
REASONS FOR ORDER AND ORDER
[1] This is a motion, under rules 3, 4, 51 and 151 of the Federal Court Rules, 1998 (the Rules), seeking to overturn a decision by Prothonotary Morneau, dated November 28, 2003, allowing the motion of the plaintiff/defendant to counterclaim (Camoplast) for an order of confidentiality, with costs. In this decision, the prothonotary found that the information and documents to be protected were of a confidential nature and that serious and substantial prejudice would be caused to the plaintiff if its main competitor, the defendants, were to have access to them.
ISSUES
[2] The issues raised by Soucy and Kimpex are as follows:
1. Did Prothonotary Morneau fail to consider all the relevant factors and err in his application of the principles of law pertaining to the confidentiality order?
2. Did Prothonotary Morneau fail to consider the effect of the order on the fundamental rights of Soucy and Kimpex, such as the right to a full defence and to a fair hearing?
3. Did Prothonotary Morneau, in exercising his discretionary power, raise a question vital to the final issue of the case?
[3] For the following reasons, the appeal will be dismissed.
FACTUAL BACKGROUND
[4] Camoplast has brought proceedings against Soucy International Inc. and Kimpex Inc. (Soucy and Kimpex) alleging infringement of Canadian patent No. 2,182,845, issued for an invention entitled "Snowmobile Drive Track With Noise Reducing Thread Pattern" (the patent).
[5] Soucy and Kimpex filed a defence and brought a counterclaim to invalidate the patent on the basis that the specifications, name, anticipation and proof of the invention claimed were insufficient and ambiguous. The proceeding was amended to include allegations about Lecours patent No. 2,143,802, after a judgment by the Federal Court of Appeal.
[6] On November 19, 2003, Camoplast served a supplementary affidavit of documents, in which two sets of documents and information were filed, one pertaining to the development of the invention claimed in the patent and the other to tracks that Bombardier had ordered from it during its silent track development operations.
IMPUGNED DECISION
[7] On November 28, 2003, Prothonotary Morneau made a decision granting Camoplast's motion to have a confidentiality order issued.
SUBMISSIONS BY SOUCY AND KIMPEX
[8] Soucy and Kimpex argue that Prothonotary Morneau failed to consider all of the factors relevant to the debate and erred in his application of the principles of law pertaining to confidentiality orders. More particularly, he failed to consider the effect that the order would have on their fundamental rights, such as the right to a full defence and a fair hearing.
[9] Soucy and Kimpex further submit that the prothonotary exercised his discretionary power on a question vital to the final issue of the case.
CAMOPLAST'S SUBMISSIONS
[10] The confidentiality order issued by Prothonotary Morneau contemplates documents of a confidential nature that were created, collected and protected with the reasonable expectation that they would remain confidential.
[11] The information obtained from the clients of Camoplast, including Bombardier, or developed in the context of Camoplast's activities as a manufacturing agent for its clients, is not only confidential, but is also covered by implicit confidentiality agreements.
[12] The information pertaining to research and development activities that led to the invention of the engineered solution in noise reduction was the product of years of effort in research and development. The engineered solutions that resulted, or that will result in the future, give Camoplast a significant competitive edge on its market and need not be disclosed at all.
[13] The importance of maintaining the confidentiality of the documents and information covered by the confidentiality order reflects Camoplast's need to protect its commercial interests as well as its right to obtain patents on engineered solutions that it is presently in the process of developing and, without a confidentiality order, there is no other reasonable option. A disclosure of the information and documents at issue poses a serious threat to the significant commercial interests of Camoplast.
[14] Soucy and Kimpex are two affiliated companies and are Camoplast's main competitors.
[15] Mr. Courtemanche's testimony regarding the confidential nature of the information at issue is credible, complete, precise and uncontradicted.
[16] Determining the sources of the noise generated by a snowmobile track is not a social concern as important as that of respecting environmental standards, which was the issue in Sierra Club of Canada v. Canada (Minister of Finance), 2002 SCC 41, [2002] 2 S.C.R. 522. This case involves a dispute between two private parties where the information covered by the confidentiality order was not available to the public before the beginning of the proceedings because it was confidential information.
[17] None of the documents and information contemplated by the confidentiality order are related to the defence by Soucy and Kimpex to the action for patent infringement, so Soucy and Kimpex's ability to mount a full answer and defence would not be affected. Moreover, the confidentiality order does not in any way restrict full access to the information by counsel for Soucy and Kimpex and their independent experts.
ANALYSIS
[18] An analysis of the facts indicates that this is a case involving the alleged infringement and invalidity of a patent. The confidentiality order is comprehensive and applies to two types of documents and information, i.e. those exchanged between the parties and those which will be submitted to the Court. The confidentiality order of the prothonotary also provides that the information be completely accessible to counsel for Soucy and Kimpex and their independent experts - but only to these individuals. I am therefore satisfied that Prothonotary Morneau considered all of the factors relevant to the litigation when he made his order.
[19] Subsection 51(1) of the Rules provides that a prothonotary's order can be appealed by a motion. The standard of review for a prothonotary's decision was established as follows by the Federal Court of Appeal in Canada v. Aqua-Gem Investments Ltd., [1993] 2 F.C. 425 (F.C.A.):
Discretionary orders of prothonotaries ought not to be disturbed on appeal to a judge unless 1) they are clearly wrong in the sense that the exercise of discretion by the prothonotary was based upon a wrong principle or upon a misapprehension of the facts, or 2) they raise questions vital to the final issue of the case. In such cases, a judge ought to exercise his own discretion de novo.
and most recently in Merck & Co., Inc. et al. v. Apotex, 2003 FCA 488.
[20] Moreover, in light of the Supreme Court of Canada's decision, in paragraph 84 of its reasons, in Sierra Club, supra, I find that in this case it is more than an "action between private parties relating to purely private interests". I am also satisfied that the beneficial effects of the confidentiality order outweigh its harmful effects, especially when we consider that the order provides that all information be disclosed to the parties' representatives.
[21] As it was decided in Sawridge Band v. Canada, 2001 FCA 338, [2002] 2 F.C. 346 (F.C.A.), at page 354, a discretionary order should not be disturbed by the Court unless it was clearly exercised improperly. After reviewing the facts presented by both parties in this matter, I am not persuaded that Prothonotary Morneau was clearly wrong. As both components of the Sierra Club test have been satisfied, it is my opinion that the decision dated November 28, 2003,was a reasonable alternative and ensured that the interests in play were balanced.
[22] I am also assured that this balance is maintained because the prothonotary even provided in paragraph 14 of his order that, on motion, the parties could request that the confidentiality order be varied and have information qualified as confidential declared not to be so.
[23] I am also of the opinion that the question, in this case, is not "vital" to the final issue of the case between the parties (Merck & Co., supra).
[24] In the absence of a patently unreasonable error in this decision, I do not intend to intervene.
ORDER
THE COURT ORDERS that:
the appeal be dismissed with costs against the defendants.
"Michel Beaudry "
Judge
Certified true translation
Kelley A. Harvey, BA, BCL, LLB
FEDERAL COURT
SOLICITORS OF RECORD
DOCKET: T-2006-99
STYLE OF CAUSE: CAMOPLAST INC.
v.
SOUCY INTERNATIONAL INC
and
KIMPEX INC.
PLACE OF HEARING: MONTRÉAL, QUEBEC
DATE OF HEARING DECEMBER 8, 2003
REASONS FOR ORDER
AND ORDER BY: BEAUDRY J.
DATE OF REASONS: JANUARY 19, 2004
APPEARANCES:
Jean-Sébastien Brière FOR THE PLAINTIFF
Éric Ouimet
Pascal Côté FOR THE DEFENDANTS
SOLICITORS OF RECORD:
Smart & Biggar FOR THE PLAINTIFF
Montréal, Quebec
Brouillette, Charpentier, Fortin FOR THE DEFENDANTS
Montréal, Québec