Distrimedic Inc. v. Dispill Inc.

Distrimedic Inc. v. Dispill Inc.
Court (s) Database
Federal Court Decisions
Date
2013-10-15
Neutral citation
2013 FC 1043
File numbers
T-1591-05
Notes
A correction was made on March 4, 2013
Decision Content
Date: 20131015
Docket: T-1591-05
Citation: 2013 FC 1043
Ottawa, Ontario, October 15, 2013
PRESENT: The Honourable Mr. Justice de Montigny
BETWEEN:
DISTRIMEDIC INC.
Plaintiff
and
DISPILL INC. AND EMBALLAGES RICHARDS INC.
Defendants
AND BETWEEN:
EMBALLAGES RICHARDS INC.
and
DISTRIMEDIC INC., ROBERT POIRIER, CLAUDE FILIATRAULT, DISTRIMEDIC CANADA INC. AND 9268-2244 QUEBEC INC.
Plaintiff by Counterclaim
Defendants to the Counterclaim
REASONS FOR JUDGMENT AND JUDGMENT
I. OVERVIEW... 3
II. FACTUAL BACKGROUND.. 4
a) The Parties. 4
b) The Patent at Issue. 7
c) The Products in Question. 17
i. Richards’ Product 18
ii. Distrimedic’s Product 22
d) Related Proceedings. 23
i. The Patent Disclaimer Proceedings. 23
ii. The Trade-mark Registration Proceedings. 27
III. ISSUES. 29
IV. FACT WITNESSES. 30
a) Richards’ Fact Witnesses. 31
i. Gerry Glynn. 31
ii. Marie-Josée Glaude. 39
iii. René Thibault 44
b) Distrimedic’s Fact Witnesses. 46
i. Claude Filiatrault 46
ii. Robert Poirier. 50
iii. Paul van Gheluwe. 51
V. EXPERT WITNESSES. 52
a) Richards’ Expert Witnesses. 52
i. Koen de Winter. 52
ii. Tarek Abdelrahman. 62
iii. France Morissette. 68
iv. James McAuley. 71
b) Distrimedic’s Expert Witnesses. 75
i. Claude Mauffette. 75
ii. Philip Levi 78
VI. ANALYSIS. 81
a) Patent 81
i. Patent Construction. 82
ii. Infringement 92
iii. The Disclaimer. 97
iv. Alternative Argument: Anticipation and/or Obviousness of the Disclaimed Claims 102
b) Misrepresentation. 110
c) Passing Off. 115
i. The Dispill Colour Scheme Is Not A Trade-Mark. 120
ii. The Distrimedic Original Colour Scheme Was Not “Used” In A Way That Triggers The Application Of Paragraph 7(B) Of The Trade-Marks Act 128
iii. Distrimedic Did Not Direct Public Attention To Its Business In Such A Way As To Cause Confusion With That Of Richards. 131
d) Copyright 134
i. The Relevant Legal Principles Applicable To Copyright Protection. 134
ii. Is The Dispill Label Form Susceptible To Copyright Protection?. 139
iii. Does Richards Own Any Copyright In The Dispill Label Form?. 146
iv. Did The Defendants To The Counterclaim Infringe Any Copyright?. 152
VII. CONCLUSION.. 157
JUDGMENT.. 158
APPENDIX.. 159
I. OVERVIEW
[1] Distrimedic Inc. commenced the present proceeding on September 26, 2005, with the filing of a Statement of Claim seeking a declaration of non-infringement of Canadian Patent No. 2,207,045 (the ‘045 Patent), owned by Emballages Richards Inc. (hereinafter “Richards”), pursuant to subsection 60(2) of the Patent Act, RSC 1985, c P-4 (Patent Act). The product for which the declaration was sought is a kit for the manufacture of a set of individual pill containers. Distrimedic Inc. amended its Statement of Claim on November 3, 2005.
[2] On or about December 1, 2005, Richards filed a Statement of Defence and Counterclaim against Distrimedic Inc. and various related parties (Robert Poirier, Claude Filiatrault, Distrimedic Inc. and 9268-2244 Quebec Inc.). Each of these Defendants to the Counterclaim is represented by the same counsel and will hereinafter collectively be referred to as “Distrimedic”. The Statement of Defence and Counterclaim was amended on November 27, 2006, on January 29, 2007, and again on September 27, 2010. Shortly before filing its original Statement of Defence and Counterclaim, Richards filed a document purporting to be a disclaimer under section 48 of the Patent Act in relation to some of the claims of the ‘045 Patent.
[3] On February 12, 2010, Distrimedic Inc. discontinued its original action, paying costs assessed in the amount of $11,908.82 to Richards as a result. Nevertheless, the counterclaim continued.
[4] In Distrimedic’s view, the Three Times Amended Statement of Defence and Counterclaim significantly expanded the scope of the proceeding, adding many new allegations and legal claims and joining many other companies and people affiliated with Distrimedic. In addition to alleging infringement of the ‘045 Patent (and thus covering precisely the subject-matter of Distrimedic’s action), Richards’ Counterclaim added several new issues, namely the infringement of the disclaimed claims, the validity of the disclaimer, copyright infringement, several issues related to trade-mark rights alleged to be held by Richards, breach of the Competition Act, RSC 1985, c C-34 and damages claimed in relation to the various allegedly infringed rights. In Richards’ view, it was necessary to add the related Defendants as they have in effect rendered Distrimedic Inc. judgment-proof through their corporate arrangement of the various related parties.
[5] The hearing of this file took place from March 25 to April 16, 2013, and the parties filed written representations on April 15 and 16, respectively. Both parties made submissions in connection with a list of issues established in an Order of Prothonotary Morneau dated September 28, 2011, following a pre-trial conference between the parties.
[6] For the reasons that follow, the Court finds that Richards’ counterclaim should be dismissed.
II. FACTUAL BACKGROUND a) The Parties [7] As described by Richards and in the parties’ Agreed Statement of Facts, this case has its genesis in an idea of Mr. Michel Bouthiette, a dentist by training and the named inventor of the patent in suit.
[8] Mr. Bouthiette, who was also active in the retirement home business, had an idea for a system that would improve the administration of medication to a patient over a given period of time, such as a week. After applying for a United States patent in 1996, Mr. Bouthiette filed a Canadian patent application claiming priority from his United States filing, and the ‘045 Patent issued on June 1, 1999.
[9] Bouthiette incorporated Dispill Inc. (Dispill) to sell the components of his pill dispensing and storage system on November 11, 1997; he operated as a sole proprietor until he exchanged his business and its assets as consideration for shares of Dispill in 1998.
[10] Dispill rented office space from La Société d’Impression Filiatrault & Poirier (La Société), a corporation owned by Defendants Robert Poirier and Claude Filiatrault, and La Société purchased a 50% shareholding in Dispill for $100,000. From 1998 until September 2002, Filiatrault and Poirier were both employees and, through La Société, shareholders of Dispill.
[11] In 2002, a dispute arose and Filiatrault and Bouthiette invoked a shotgun clause in the Dispill Shareholders Agreement; however, Bouthiette prevailed and the relationship ended with a numbered company owned by Bouthiette purchasing La Société’s shares in Dispill.
[12] Although subject to a two-year non-compete agreement from September 3, 2002 to September 3, 2004, Filiatrault and Poirier met with patent agents during that time to discuss whether they might develop a pill dispenser product in order to compete with Dispill, upon expiry of the non-compete agreement, without infringing the ‘045 Patent.
[13] Distrimedic Inc. was incorporated on September 7, 2004, and, by 2005, Filiatrault and Poirier were ready to compete with Dispill. Distrimedic Inc. does not have employees on its payroll as it shares resources, including employees and sales representatives, with two other companies owned and operated by Filiatrault and Poirier: La Société, which offers printing services and printed products to pharmacies, pharmaceutical laboratories, insurance companies and others; and Emballages Alpha Inc. (Alpha), which sells vials for medicines to pharmacists. The two companies bill Distrimedic Inc. for salaries and commissions accordingly.
[14] In a series of transactions, Richards, a manufacturer and distributor of packaging products incorporated under the laws of Canada, acquired Dispill from Bouthiette in July 2005 and Dispill was subsequently dissolved. On July 29, 2005, prior to dissolution, Dispill assigned the ‘045 Patent to Richards.
[15] On September 16, 2005, Richards had its counsel send a letter to Filiatrault and Poirier, care of La Société, alleging that their efforts to market Distrimedic Inc.’s competing pill dispenser system infringed Richards’ exclusive patent and trade-mark rights.
[16] In an attempt to settle the patent infringement issue, Distrimedic Inc. commenced its action seeking a declaration of non-infringement of the ‘045 Patent on September 26, 2005. An Amended Statement of Claim was filed November 3, 2005.
[17] On November 8, 2005, after being served with Distrimedic Inc.’s Statement of Claim but prior to entering a defence, Richards filed a disclaimer in relation to a number of claims in its ‘045 Patent (the Disclaimer).
[18] Richards then filed its Statement of Defence and Counterclaim, which it subsequently amended three times as described above. Also described above, Distrimedic Inc. discontinued its original action on February 12, 2010, and paid Richards costs assessed at $11,908.82.
[19] Following the filing of these proceedings, in October 2010, Filiatrault and Poirier entered into an agreement in which Filiatrault repurchased all of Poirier’s shares in all of the Quebec companies (La Société, Distrimedic Inc., Alpha and 9120-2994, an investment company). In exchange, Poirier repurchased all of Filiatrault’s shares in Distrimedic France and another company, Rx-V. Distrimedic Canada Inc., which was incorporated for sales of Distrimedic products in provinces other than Quebec and one of the original Defendants to the Counterclaim, never did business and was dissolved in 2008. On September 1, 2012, Alpha and La Société amalgamated to form 9268-2244 Quebec Inc. To reflect these transactions, the syle of cause has been amended accordingly.
b) The Patent at Issue [20] The ‘045 Patent in dispute in this action, registered in connection with Richards’ product, is entitled “Kit and Process for the Manufacture of a Set of Individual Pill Containers”. It was filed on May 21, 1997, claiming priority on a US provisional patent application filed on July 22, 1996. The ‘045 Patent was opened to the public on June 21, 1997 and issued on June 1, 1999. It will expire on May 21, 2017.
[21] The ‘045 Patent, as originally issued, had 28 claims, with Claims 1, 11, 15, 22, 26 and 28 being independent and the remainder dependent, either directly or indirectly, on one of the independent claims. Richards filed a disclaimer on November 8, 2005 in relation to a number of claims of the ‘045 Patent, namely Claims 15 to 21. The disclaimer amended Claims 15 and 17 to 21 and removed Claim 16 entirely. More will be said about the disclaimer below.
[22] The ‘045 Patent describes a system for preparing a pill dispenser. The system comprises a tray having a number of evenly spaced apart recesses that is used to support a container-defining sheet made of clear plastic and itself having a corresponding number of evenly spaced apart cavities embossed therein. The idea is to make a series of containers for holding pills to be taken four times per day (breakfast, lunch, dinner, and bedtime) over seven days.
[23] Once filled as prescribed, the container-defining sheet is sealed by a self-adhesive container-sealing sheet upon which has been printed required information about the prescription such as the names of the patient and the pharmacist, the date, and the medications in each container. The container-sealing sheet is aligned with the container-defining sheet by means of two upwardly projecting protuberances on the top surface of the tray that engage corresponding pairs of holes in both the container-sealing sheet and the container-defining sheet. The alignment of the sheets aligns the perforations thereon, permitting each container to be readily separated from the others. Once the alignment has been achieved, an adhesive cover on the back of the container-sealing sheet can be removed and the sheet stuck over the container-defining sheet.
[24] The first page of the ‘045 Patent provides a brief description of the prior art over which it claims to provide an improvement:
To prepare a set of individual pill containers for use by a patient, it has already been suggested to use a sheet of plastic material in which a plurality of recesses are molded. Each of these recesses defines a small upwardly opened container that can be filled with pills. After filling, all the containers are closed by means of a plastic sealing sheet on which can be printed all the desirable indications like the patient’s name, the date and hour of administration, etc…. The sealing sheet is applied onto the container-defining sheet and thermo-sealed onto same. As can be understood, the indications are printed and formatted onto the sealing sheet so that each group of information referring to a given container be positioned in regard to the said container. Tearing lines are provided on both the container-defining sheet and the sealing sheet to allow for easy separation of the individual pill containers.
This assembly is efficient. However, it has some drawbacks. More particularly, it is very difficult and time consuming to ensure correct positioning of the preprinted sealing sheet on top of the containers. As can be understood, incorrect positioning of the sealing sheet will make the pill containers difficult to separate. Also, thermo sealing is not economical, as it calls for thermo-sealing equipment.
[25] The US Patent No. 3,780,856 (the “Braverman Patent”), reproduced in the Appendix to these Reasons, was published on December 25, 1973. It is thus citable as prior art against the ‘045 Patent for the purposes of both anticipation and obviousness. It describes a pill dispensing device similar in many ways with the pill dispensing system described in the ‘045 Patent. As stated by the Patent Office in its December 17, 1998 Office Action during prosecution of the application that led to the ‘045 Patent:
The patent to Braverman discloses a kit and method for the manufacture of a set of individual pill containers. The kit is comprised of a container-defining sheet (100) made of plastic which has a top surface with a given number of evenly spaced apart cavities embossed therein. These cavities are shown to be in regularly spaced apart rows and columns. Each cavity is upwardly opened and defines a container (120). Each container is surrounded by a flange (122) that has a central dotted line (117,118) punched therein The kit also has a recessed support (200) with a top surface provided with a number of recesses (212) at least equal to the number of cavities in the container-defining sheet. A container-sealing sheet (122) is provided. This sheet has a top surface and a bottom surface and is shaped and sized to cover at least all of the containers and surrounding flanges. The bottom surface of the container-sealing sheet has bands (126) covered with a self-adhesive material that are shaped and sized to exactly correspond to and fit over the flanges. The bands are covered until use by a protective peelable covering (128,129) and have central tearing lines (170,172) of their own. Positioning means provided on at least the top surface of the container-defining sheet and on the container-sealing sheet (the edges of the sheets 196) to ensure that, in use, the bands covered with self-adhesive material and their tearing lines be in exact superposition on top of the flanges and the dotted lines of the container-defining sheet. The patent to Braverman also discloses printing information on the container-sealing sheet (see column 4, lines 32 to 37, for example). The number of recesses is not considered patentable subject matter.
Joint Book of Documents, No 144.
The figures found in the Braverman Patent and referred to in the above quote are reproduced below:
[26] It is not necessary, for the purposes of this proceeding, to consider all of the elements of the claims found in the ‘045 Patent. The key element of Claim 1 (including Claims 2 to 10 dependent thereon), 11 (including Claims 12 to 14 dependent thereon), 15 (including Claims 17 to 21 dependent thereon) and 22 (including Claims 23 to 25 dependent thereon) reads as follows:
d) positioning means provided on at least the top surface of the container-defining sheet and on the container-sealing sheet to ensure that, in use, after the container-defining-sheet is fitted onto the recessed support, the paper covering is peeled off from the bands of the container-sealing sheet and said container-sealing sheet is positioned on top of the top surface of the container-defining sheet, the bands covered with a self-adhesive material and their tearing lines be in exact superposition on top of the flanges and the dotted lines of the container-defining sheet,
wherein the positioning means comprises at least one upwardly projecting protuberance provided on the top surface of the recessed support, at least one hole provided into the container-defining sheet and at least one other hole provided in the container-sealing sheet, said at least one hole and one other hole being sized and positioned to correspond to and be engaged by said protuberance.
[27] Claim 15, as disclaimed, reads as follows (with amendments introduced by disclaimer indicated in bold underlining):
d) positioning means provided on at least the top surface of the container-defining sheet and on the container-sealing sheet to ensure that, in use, after the container-defining sheet is fitted onto the recessed support, the container-sealing sheet is properly positioned on top of the top surface of the container-defining sheet, with its tearing lines in exact superposition on top of the dotted lines of the container-defining sheet,
wherein the positioning means comprises at least one upwardly projecting protuberance provided on the top surface of the recessed support and engaging means provided on the container-defining sheet and other engaging means provided on the container-sealing sheet, said engaging means and other engaging means being sized and positioned to correspond to and be engaged by said protuberance.
[28] With regard to the remaining claims (Claims 26 to 28), construction of the claims is not necessary because there is no evidence or argument that the elements thereof are incorporated in any product manufactured, used or sold by Distrimedic.
[29] The positioning means are described in the ‘045 Patent as follows at page 8:
Positioning means are provided onto at least the top surface of the container-defining sheet (3) and on the container-sealing sheet (9) to ensure that, when the latter is positioned on top of the top surface of the container-defining sheet (3), the bands (18) and their tearing lines (11) be in exact superposition on top of the flanges (10) and the dotted lines (4) of the container-defining sheet (3). In the illustrated embodiments, which are the preferred ones, these positioning means comprise two protuberances (5) provided on the support (1) and which project upwardly from the top surface of the recessed area “A”. The positioning means also comprises the holes (7), provided with the container-defining sheet (3)container-sealing sheet (9), two holes (15) sized and positioned to engage the two protuberances (5) of the support (1).
[30] The ‘045 Patent also describes (at p. 10) an alternative for the positioning means as follows:
Because the dotted and tearing lines (11) and (4) have to be precisely one above the other, it is very important that the container sealing sheet (9) be precisely positioned above the container defining sheet (3). To do so, the two holes (15) of the container-sealing sheet (9) engage the two protuberances (5) of the support (1).
It has been found more convenient to provide the support (1) with protuberances, and the container-defining sheet (3) and the container-sealing sheet (9) with corresponding holes. However, some variations can be made without departing from the spirit of the invention. For example, the protuberance(s) to be engaged by the corresponding hole(s) provided on the container-sealing sheet (9), may be moulded directly on the top surface of the container-defining sheet (3) instead of being provided on the support (1).
After the holes (15) of the container-sealing sheet (9) are engaged to the protuberances (5) of the support (1), the paper covering is peeled off the bands (18) of the container-sealing sheet (9) and applied on the top surface of the container-defining sheet (3).
[31] The figures to which the numbers found in these two quotes from the ‘045 Patent are reproduced below:
c) The Products in Question [32] Both Richards and Distrimedic produce weekly, detachable pill dispenser products that are primarily used in nursing home facilities. The parties’ respective products are described in greater detail below.
i. Richards’ Product [33] Richards sells a pill dispenser to sort pills, tablets and capsules. Richards’ pill dispenser is described in the ‘045 Patent and in Figure 7 thereof, (reproduced above).
[34] As described by both parties, the lowermost element of Figure 7 is a tray (also called a recessed support) that is used to support a container-defining sheet made of clear plastic (sometimes called a blister) having a given number of evenly spaced apart cavities embossed therein. Once filled as prescribed, the container-defining sheet is sealed by a container-sealing sheet (sometimes called a label), which is the uppermost element of Figure 7. The container-sealing sheet is aligned with the container-defining sheet by means of two upwardly projecting protuberances on the top surface of the recessed support that engage corresponding pairs of holes in both the container-sealing sheet and the container-defining sheet.
[35] Richards uses two types of container-sealing sheets, one for covering the container-defining sheet permanently (permanent labels), and one that is resealable/replaceable (replaceable labels). Both types of its container-sealing sheets have a top surface on which information may be printed, and a peelable bottom layer to permit the sealing of the cavities of the container-defining sheet. The top surface of each container-sealing sheet has an upper portion which is white, and a lower portion which is divided into four columns of equal width being, respectively from left to right, pink, green, yellow and white. Examples of Richards’ permanent and replaceable container-sealing sheets are reproduced here:
[36] The mounting tray for a resealable label has indentations that facilitate pulling up tabs (Exh. 508) (JBD 19).
The blister tray has slight indentations on the side that align with these indentations to facilitate the tab. The difference between the permanent and the removable blisters are the indentations on the side allowing one to access the tabs on the removable blisters (Exh. 509) (JBD 21):
The difference between permanent and resealable labels is that there is a small plastic tab aligned with the colouring on the resealable label that allows for pealing back and resealing, while there are indentations to facilitate the breaking of the seal to remove the pill on the permanent label (Exh. 510 (permanent label) and 511 (resealable label):
Computer-generated information associated with when the pill is taken, the name of the pharmacy and the name of the patient can be printed on each cell of a sealed and completed sheet as demonstrated in Figure 6 of the ‘045 Patent (reproduced above).
[37] Richards initially sold an 8.5” x 10” label only, but later sold an 8.5” x 11” label also. It presently sells both sizes. Blank labels are sold to the pharmacists, who fill the blisters and do their own printing.
[38] Richards makes a variety of accessories available to pharmacists to facilitate the filling, verification and shipping of the product, as well as the making of corrections to previously sealed sheets. These include, among others, a pill sorter, which consists of two moving plastic sheets that permit the user to put the pills on an indented tray first and then move it across to dispense the pills into the appropriate recesses in the container-defining sheet, as well as a knife and knife guide, verification stand, and shipping-related products.
ii. Distrimedic’s Product [39] As described in the Agreed Statement of Facts, Distrimedic also sells a pill dispenser to sort pills, tablets and capsules. Distrimedic’s pill dispenser includes a container-defining sheet made of clear plastic having a given number of evenly spaced apart cavities embossed therein, which is sealed by a container-sealing sheet.
[40] The following is an image of one of Distrimedic’s trays (Exh. 500):
[41] Like Richards, Distrimedic provides both permanent and replaceable container-sealing sheets in 8.5” x 11” and A4 size, all of which have a top surface with an upper portion that is white, and a lower portion that is divided into four coloured columns. Distrimedic’s current container-sealing sheet is reproduced here:
d) Related Proceedings i. The Patent Disclaimer Proceedings [42] As noted above, on November 8, 2005, subsequent to the commencement of the main action by Distrimedic Inc., but prior to entering a defence or launching its counterclaim, Richards filed a disclaimer in connection with the ‘045 Patent pursuant to section 48 of the Patent Act with a request that “recordal of th[e] disclaimer be expedited” (JBD 144).
[43] The changes in Claim 15 resulting from the disclaimer filed by Richards on November 8, 2005, are shown in bold and in parentheses:
a) a container-defining sheet made of a plastic material, said container-defining sheet having a top surface comprising a given number of evenly spaced apart cavities embossed therein, each of said cavities being upwardly opened and thus defining a container, each of said containers being surrounded by a flange of a given width provided with a central dotted line punched therein, said dotted lines provided in all of said flanges making it possible to detach each of the containers from the container-defining sheet and from the adjacent containers;
b) a recessed support having a top surface provided with a number of recesses at least equal to the number of cavities embossed in the container-defining sheet, said recesses being positioned, shaped and sized to receive the containers defined by said cavities embossed in the container-defining sheet;
c) a container-sealing sheet having a top surface and a bottom surface and being shaped and sized to cover at least all the containers and surrounding flanges of the container-defining sheet, the bottom surface of said container-sealing sheet having bands that are positioned, shaped and sized to exactly correspond to and fit over the flanges of the container-defining sheet, with at least said bands being covered with a self-adhesive material which is covered until use by a protective peelable paper covering, and said container sealing sheet being provided with tearing lines making it possible to tear said container-sealing sheet into a number of cover pieces corresponding to the number of said containers; and
d) positioning means provided on at least the top surface of the container-defining sheet and on the container-sealing sheet to ensure that, in use, after the container-defining sheet is fitted onto the recessed support, the container-sealing sheet is properly positioned on top of the top surface of the container-defining sheet, with its tearing lines in exact superposition on top of the dotted lines of the container-defining sheet,
wherein the positioning means comprises at least one upwardly projecting protuberance provided on the top surface of the recessed support [at least one hole] and engaging means provided [into] on the container-defining sheet and [at least one other hole] other engaging means provided [in] on the container-sealing sheet, said [at least one hole] engaging means and [one other hole] other engaging means being sized and positioned to correspond to and be engaged by said protuberance.
[44] As described by Justice Martineau in a decision of the Court on application for judicial review, Richards was notified after the filing of its disclaimer that its request had been referred to a patent examiner (Richards Packaging Inc v Canada (Attorney General), 2007 FC 11 at para 19 [Richards]). The file was ultimately considered by a Patent Project Officer, who refused Richards’ disclaimer by letter dated December 20, 2005. The Officer found that the request could not be considered a disclaimer and should therefore be refused, reasoning that the disclaimer rendered the whole claim broader than what was originally allowed and that it would result in claiming more than what was until then protected in the claims of the patent (Richards, above, at para 21).
[45] Richards filed an application for judicial review seeking mandamus and other forms of declaratory relief and, on February 27, 2006, Prothonotary Morneau allowed a motion made by Distrimedic to be added as a respondent to the judicial review proceeding (Richards Packaging Inc v Attorney General of Canada, 2006 FC 257).
[46] In Richards, at paragraph 23, Justice Martineau described the impact of the disclaimer at that point in time on the file now before this Court as follows:
23 At this point, I note that on December 1, 2005, following the filing with the Patent Office of the applicant's disclaimer, but prior to the making of the impugned decision, the applicant filed before the Court a statement of defence and counterclaim in which it contends that various claims in the patent are valid and that Distrimedic infringed these claims. Its allegations rely in large part on the applicant's disclaimer, filed on November 8, 2005. Following a motion to strike brought by Distrimedic, on June 29, 2006, Prothonotary Morneau ordered that the paragraphs of the applicant's defence and counterclaim making reference to the applicant's disclaimer be struck out. Although this Court had not yet addressed the legality of the impugned decision, Prothonotary Morneau nevertheless concluded that "this notice of application for judicial review does not for the time being change the fact that there is no valid disclaimer now affecting the patent '045 claims" (Distrimedic Inc. v. Dispill Inc., [2006] F.C.J. No. 1045, 2006 FC 832 at para. 38) [emphasis added]. On October 17, 2006, my colleague Justice Max M. Teitelbaum maintained Prothonotary Morneau's order on appeal and agreed "that until the issue of the validity and effect of the disclaimer has been judicially reviewed, the references to the disclaimer should be struck out of the Defence and Counterclaim on the grounds that they are immaterial and frivolous pursuant to Rule 221(1)(b) and (c) of the Federal Court Rules" [emphasis added] (Distrimedic Inc. v. Dispill Inc., [2006] F.C.J. No. 1532, 2006 FC 1229 at para. 56). That being said, Justice Teitelbaum indicated, at paragraph 54, that should the applicant "be successful in that judicial review proceeding, they may then move this Court to allow them to amend their pleadings to reintroduce allegations based on the disclaimer into the Defence and counterclaim".
[Underlining in original]
[47] Finding that the Patent Office had no discretion to refuse entry or recordal of a disclaimer once it has been submitted in the proper form and manner and the prescribed fee has been paid, Justice Martineau accepted Richards’ arguments that: “1) Dionne [the Patent Officer] had no jurisdiction under the Act and the Rules either by way of delegation or otherwise to examine the applicant's disclaimer and to make the impugned decision; and 2) that the Commissioner is not empowered under the Act and the Rules to refuse the filing or recordal of the applicant's disclaimer that was filed on November 8, 2005 in the prescribed form and manner, as provided by subsection 48(2) of the Act and section 44 of the Rules” (Richards, above, at para 24).
[48] Although Distrimedic argued that “the Court's adoption of the applicant's position would render patents unfair, impossible to predict and make them a ‘public nuisance’” and that “potential competitors of the patentee would be in a constant state of uncertainty with respect to the scope of the patent, since the patentee could broaden the claims at any time by way of a document purporting to be a disclaimer”, Justice Martineau concluded that Canadian patent law is entirely statutory and “this Court cannot rely on valid policy considerations to substitute itself for Parliament” (Richards, above, at para 25).
[49] Finding that the power to consider the validity of a disclaimer rests entirely with the courts, but that a judicial review proceeding was not “the proper vehicle to obtain a judicial declaration as to the validity or invalidity of a disclaimer filed by a patentee with the Patent Office”, partially given the lack of expert evidence, Justice Martineau set aside the Officer’s decision letter such that the disclaimer would be considered filed and effective as of its filing date of November 8, 2005. In doing so, Justice Martineau overturned the Patent Officer’s finding that the amendment would result in claiming more than what is currently protected in the claims of the patent, as this is a factual and legal determination on the merit of the disclaimer which the Patent Officer had no jurisdiction to make.
[50] Justice Martineau’s decision was confirmed by the Federal Court of Appeal in an oral judgment rendered on January 8, 2008 (Distrimedic Inc v Richards Packaging Inc, 2008 FCA 4).
ii. The Trade-mark Registration Proceedings [51] In its Three Times Amended Statement of Defence and Counterclaim, Richards argues that by virtue of its extensive advertising and sales, the “Richards Packaging Label Colour Trade Marks” (i.e., the colours applied to the top surface of both its permanent container-sealing sheets and its replacement container-sealing sheets) have become well and favourably known to pharmacists, nurses and nursing home employees, as well as the public, and have become distinctive trade-marks of Richards’ packaging in association with its Dispill pill dispenser (Statement of Defence and Counterclaim, September 27, 2010, at paras 28-29).
[52] The Richards Colour Trade Mark, referred to by Distrimedic as the “Dispill Colour Scheme”, is the subject of Canadian Trade-mark Application No. 1,393,024. Upon opposition of the registration by Distrimedic, an oral hearing was held and the Registrar of Trade-marks ultimately refused the application on October 31, 2012. The Registrar found that Richards had not used the colour scheme as a trade-mark, as defined in section 2 of the Trade-marks Act, RSC 1985, c T-13, but as a colour code indicating the time of day for taking the medication contained in the pill dispenser rather than as a trade-mark identifying the source of the wares. As a result, the Opposition Board allowed Distrimedic’s opposition and concluded that (i) the Dispill Colour Scheme was not intended to be used as a trade-mark; (ii) the Dispill Colour Scheme is inherently non-distinctive because it is functional; and (iii) Richards did not present sufficient evidence of public recognition of the Dispill Colour Scheme as a trade-mark.
[53] An appeal of the Registrar’s decision was submitted on February 4, 2013, and is currently before this Court as Richards Packaging Inc v Distrimedic Inc, T-236-13. Richards filed a requisition for hearing on June 21, 2013. Richards argues that, in rejecting the application, the Registrar erred in a number of ways: by applying a higher standard of proof than appropriate in considering use of the applied-for mark (which he considered “non-traditional”); by holding that in a situation where a mark possesses some level of functionality, the burden on the applicant to establish the distinctiveness of the trade-mark will be high; by holding that a trade-mark comprising a colour or colours applied to the surface of a product is inherently non-distinctive; in its consideration of the evidence and testimony before it; and in connection with one finding of fact, although the significance of the alleged error is unclear based on the Notice of Application alone. Richards made much the same arguments in the context of the case at bar.
III. ISSUES [54] On September 28, 2011, following a pre-trial conference with the parties, Prothonotary Morneau issued an Order setting out the following list of issues to be addressed at trial:
Patent
1 Construction of the 2,207,045 Patent
2 Whether Distrimedic has infringed the 2,207,045 Patent by manufacturing and selling the Distrimedic pill dispenser
3 Whether the disclaimer filed in relation to claims 15 to 21 of the ‘045 Patent is valid, and whether claims 15 and 17-21 as disclaimed are invalid in light of invalidity of the disclaimer.
4 In the event that the disclaimer is valid and the disclaimed claims are construed broadly enough to encompass the Distrimedic pill dispenser, are claims 15 and 17-19 as disclaimed nevertheless invalid as being anticipated by or made obvious in light of US Patent No. 3,780,856 (Braverman)
Alleged Misrepresentations
5 Whether the defendants to the counterclaim have made false and misleading statements that tended to discredit the business, services and wares of Richards
Trade-Mark
6 Whether trade-mark rights subsist in the arrangement of colours applied to Richards’ container-sealing sheet
7 Whether Distrimedic has used any such trade-mark rights in the original colour arrangement that is or was contrary to section 7(b) of the Trade-Marks Act
8 Has Distrimedic directed public attention to its business in such a way as to cause confusion in Canada with those of Richards?
Copyright
9 Whether copyright subsists in the Dispill Label Form
10 Whether Richards is the owner of any such copyright in the Dispill Label Form
11 Whether Distrimedic has infringed any copyright owned by Richards in the Dispill Label Form
Alleged Joint Liability
12 Whether any of the Defendants to the Counterclaim other than Distrimedic Inc. are liable for any of the allegedly-infringing activities
Remedies
13 In the event that there has been infringement as alleged, whether:
a) Richards has suffered damages and, if so, the extent of same
b) regarding copyright infringement, whether Richards is entitled to damages and an accounting of profits
c) whether Richards is entitled to an injunction and to the declarations requested regarding validity of the Patent and actions of the defendants to the counterclaim
14 Costs.
IV. FACT WITNESSES [55] Prior to the commencement of the trial, both Richards and Distrimedic proposed to call three fact witnesses each.
[56] Richards would call Gerry Glynn, Chief Executive Officer (CEO) of Richards Packaging Inc., Marie-Josée Glaude, the General Manager of Richards’ Dispill Division, and René Thibault, a pharmacist and Dispill customer who was approached by Distrimedic when it entered the market.
[57] Distrimedic would call Claude Filiatrault and Robert Poirier, both former employees of and shareholders in Dispill and current or former shareholders in the other corporate Defendants to the Counterclaim. Distrimedic also intended to call Paul van Gheluwe, a prior Dispill employee and sale representative for Distrimedic, but felt that his testimony was unnecessary for the reasons explained below.
a) Richards’ Fact Witnesses i. Gerry Glynn [58] Mr. Gerald Glynn has been the CEO of Richards since 2002, and was called to provide factual evidence regarding Richards Packaging Inc., Dispill Inc., the Dispill pill dispenser and related financial information, as well as to testify regarding the use of the Richards’ colour trade-mark, the Dispill Label Form, and the patent disclaimer.
[59] During his examination-in-chief, Mr. Glynn provided an explanation of his role within Richards and a picture of Richards’ corporat