MIPS AB v. Bauer Hockey Ltd.

MIPS AB v. Bauer Hockey Ltd.
Court (s) Database
Federal Court Decisions
Date
2018-05-07
Neutral citation
2018 FC 485
File numbers
T-56-15
Decision Content
Date: 20180507
Docket: T-56-15
Citation: 2018 FC 485
Ottawa, Ontario, May 7, 2018
PRESENT: The Honourable Madam Justice Gagné
BETWEEN:
MIPS AB
Plaintiff
and
BAUER HOCKEY LTD. and BAUER HOCKEY, LLC
Defendants
JUDGMENT AND REASONS
I. Overview 2
II. Issues 5
III. Analysis 6
A. Inventors and ownership of the Bauer Patents 6
(1) MIPS’ inventive contribution to the Bauer Patents 6
(a) MIPS’ background 6
(b) Bauer’s background 9
(c) First meeting held on November 16, 2010 and subsequent events 19
(d) Second meeting held on March 30, 2011 and subsequent events 25
(e) Third meeting held on July 11-12, 2011 and subsequent events 29
(f) The law as it applies to these facts 31
(2) Agreements entered into between the parties 34
B. Expert evidence tendered at trial 36
C. Person skilled in the art 39
D. Common general knowledge 40
E. Claim construction – legal principle 42
F. MIPS 542 Patent 45
(1) Construction of the MIPS 542 Patent 45
(a) Claim 1 of the MIPS 542 Patent 46
(b) Claim 3 – ‘wherein the attachment device is fixated to the energy absorbing layer or the outer shell by means of at least one fixation member’ 56
(c) Claim 4 – ‘wherein the fixation member is able to absorb energy and forces by deforming in an elastic, semi-elastic, or plastic way’ 57
(d) Claim 5 – ‘the fixation member comprises at least one suspension member’ 58
(e) Claim 6 – ‘wherein the sliding facilitator is a low friction material’ 58
(2) Infringement of the MIPS 542 Patent 59
(a) Infringement – legal principles 59
(b) Bauer’s RE-AKT and RE-AKT 100 helmets 60
(3) Validity of the MIPS 542 Patent 71
(a) Anticipation 72
(b) Obviousness 75
(c) Claims broader than invention made 81
G. Bauer Patents 84
(1) Construction of the Bauer Patents 85
(a) Claim 1 of the Bauer 316 Patent 85
(b) Claim 9 of the Bauer 316 Patent 90
(c) Claim 11 of the Bauer 316 Patent 91
(d) Claim 14 of the Bauer 316 Patent 91
(e) Claim 16 of the Bauer 316 Patent 92
(2) Validity of the Bauer Patents 92
(a) Obviousness 92
(b) Double patenting 95
IV. Conclusion 99
I.
Overview
[1] MIPS AB was a rather small Swedish company at the time that it filed its application for what would become Canadian Patent No. 2,798,542 [MIPS 542 Patent], entitled “Helmet with sliding facilitator arranged at energy absorbing layer.” The technology of the MIPS 542 Patent is used for absorbing rotational energy in all kinds of sports helmets [also known as the MIPS II technology]. MIPS is now a publicly traded company and a global leader in innovative sports helmet technology.
[2] At the end of 2016, MIPS had license agreements with 45 different partners, representing 212 different helmet models and a yearly 1.7 million units sold.
[3] In February 2017, Bauer Hockey Ltd. and Bauer Hockey, LLC [collectively, “Bauer”], acquired all of the original defendants’ assets through a sale authorized by the Ontario Superior Court of Justice, made pursuant to the Companies’ Creditors Arrangement Act, RSC 1985, c C-36. Bauer is one of the largest manufacturers and distributors of hockey equipment and related products worldwide. Bauer applied for and obtained Canadian Patent No. 2,784,316 [Bauer 316 Patent] and, subsequently, Divisional Patents Nos. 2,821,540 [Bauer 540 Patent], 2,838,103 [Bauer 103 Patent] and 2,847,669 [Bauer 669 Patent], all of which are entitled “Sports helmet with rotational impact protection” [collectively the “Bauer Patents”].
[4] MIPS is hereby seeking a declaration that Bauer, and more specifically its RE-AKT and RE-AKT 100 hockey helmets, infringe the MIPS 542 Patent, along with a permanent injunction to restrain Bauer from manufacturing, distributing, offering for sale, licensing or otherwise making available helmets within the scope of any claim of the MIPS 542 Patent.
[5] MIPS is further asking that the Bauer Patents be declared invalid and impeached, mainly for obviousness and double patenting.
[6] In the alternative, MIPS is seeking a declaration that its employees are the true inventors or co-inventors of the subject-matter claimed in the Bauer Patents, along with either i) an order striking the current owners and inventors of the Bauer Patents, replacing them with MIPS and its employees; or ii) adding its employees as co-inventors and replacing Bauer with MIPS as the sole owner of the Bauer Patents.
[7] Bauer, on the other hand, denies having stolen MIPS’ technology and insists on the fact that the SUSPEND-TECH floating liner in both its RE-AKT and RE-AKT 100 helmets was developed entirely by its employees. It denies infringing any of the claims of the MIPS 542 Patent and adds that, in any event, the MIPS 542 Patent is invalid for anticipation and obviousness, and its claims are broader than the invention made.
[8] I propose to reverse the order of MIPS’ claims for relief and start with its allegation that Bauer stole its technology. This will require reviewing the facts of the case and, more specifically, the business relationship between the parties at one point in time. We will look into the different development stages of the RE-AKT and RE-AKT 100 helmets in an attempt to distinguish what really occurred from what may be simply coincidence and/or misperception. Part of the evidence adduced before the Court is contradicted but in discussing that evidence below, I will expose the factual framework as I understand it to have occurred, based on the entirety of the evidence presented.
[9] However, even if the Court finds that Bauer developed its own product without any assistance from MIPS, the question as to whether it infringes the MIPS 542 Patent remains since, if valid, the latter has priority over the launch of the RE-AKT and RE-AKT 100 helmets and over the Bauer Patents.
II. Issues
[10] This case raises three main issues, along with the following sub-issues:
A. Who are the inventors and owners of the Bauer Patents?
1) What inventive contribution, if any, did MIPS have to the Bauer Patents?
2) What rights flow from the agreements entered into between the parties?
B. Is Bauer selling helmets that are within the subject-matter of a valid patent owned by MIPS (the MIPS 542 Patent)?
1) What is the subject-matter of the claims of the MIPS 542 Patent? (Claim construction)
2) Do the Bauer RE-AKT and/or RE-AKT 100 helmets fall within the subject-matter of the MIPS 542 Patent? (Infringement of the MIPS 542 Patent)
3) Is the subject-matter of the MIPS 542 Patent new and non-obvious and do the claims have an appropriate “breadth”? (Validity of the MIPS 542 Patent)
C. Is Bauer entitled to its own patent rights on rotational impact protection, given the prior invention and disclosures made by MIPS?
1) What is the subject-matter of the claims of the Bauer Patents? (Claim construction of the Bauer 316 Patent)
2) Is the subject-matter of the Bauer Patents non-obvious given the MIPS products on the market? (Validity of the Bauer Patents)
3) Are the Bauer 540, 103 and 669 Patents [Bauer Divisional Patents] “patentably distinct” from the subject-matter of the Bauer 316 Patent? (Double patenting)
III. Analysis
A. Inventors and ownership of the Bauer Patents
[11] MIPS seeks a declaration that should this Court find that any one or more of the claims of the Bauer Patents are valid, it possesses at least a partial ownership interest, if not the entire interest, in the respective patent(s) by way of i) title passing from the inventive contribution of MIPS’ employees; and/or ii) agreements entered into between the parties.
(1) MIPS’ inventive contribution to the Bauer Patents
(a) MIPS’ background
[12] Dr. Peter Halldin is one of MIPS’ shareholders and founders. He was its Chief Executive Officer from 2001 to 2009 and is now its Chief Technological Officer. He holds a PhD in biomechanical engineering from the KTH Royal Institute of Technology in Stockholm, Sweden. His PhD director was Professor Hans von Holst, a brain surgeon at Karolinska Hospital in Stockholm who, at the time, was interested in and working on head and neck injury prevention combining medical and technical competencies.
[13] U.S. Patent No. 6,658,671 [MIPS I Patent] (Joint Book of Documents (JBD) 1876 or exhibit tendered at trial (TX) 14, tab B), filed in December 1999, on which Dr. Halldin and Dr. von Holst are named inventors, came out of Dr. Halldin’s work at KTH. We will review the MIPS I Patent in more detail when looking at the prior art, but suffice it to say at this stage that it describes a protective helmet with an outer shell and an inner shell, with a sliding facilitator that makes possible displacement between the hard outer shell and the inner energy absorbing layer (or between two layers of energy absorbing material). This sliding aims to reduce rotational energy (made of a combination of linear and angular acceleration), which had been known to cause concussions and other brain injuries for some time.
[14] Dr. Halldin was a motorcyclist, so he concentrated his initial research on motorcycle helmets. Reports from the time indicated that a motorcycle accident was most likely to result in an impact striking the head at a 30 degree angle (if 90 degrees is a straight down impact). Around 2000, he worked with a British professor to develop a test rig to test rotational impact protection, whereby a helmet installed on a head form was dropped onto a sliding plate accelerated by a pneumatic cylinder. Shortly thereafter, Dr. Sven Kleiven, a colleague from KTH, presented his PhD thesis on numerical modelling of the human head and brain. A head form using Dr. Kleiven’s modeling and the test rig developed in the U.K. were used to test the first MIPS I prototypes.
[15] MIPS was founded as a private company in 2001. The MIPS I Patent was granted in Sweden in September 2002 and in the United States in December 2003.
[16] The EQ1 equestrian helmet (JBD-1205), the first helmet incorporating MIPS I technology, was launched in 2007 but discontinued in 2008 after MIPS encountered production quality problems in China. This helmet was manufactured by MIPS and branded as such.
[17] In 2009, MIPS changed its business strategy to become an “ingredient brand,” providing its technology through licenses to helmet manufacturers. Its first client was Back on Track who used the MIPS I technology in its EQ2 equestrian helmet (JBD-1204). That same year, the POC Receptor Backcountry helmet (JBD-2058, TX-30) using the MIPS I technology was launched for use in snowboarding.
[18] However, at the time, in-mold helmets were a new trend and a challenge that MIPS recognized that it would have to address with a new solution; the MIPS I technology could not be implemented in an in-mold helmet.
[19] By October or November of 2009, after undertaking various tests, Dr. Halldin and the MIPS R&D team discovered what would become the MIPS II technology. They discovered that it was possible to insert a head attachment device into an in-mold helmet in order to obtain sliding inside the helmet rather than within the inner liner of the helmet or, in other words, to obtain relative motion between the wearer’s head and the helmet rather than between the outer shell and the energy absorbing layer.
[20] In early 2010, MIPS tested its MIPS II prototype inside Biltex bicycle helmets. The main focus of this testing was to assess whether the new MIPS II technology could reduce rotational energy through relative motion.
[21] The Swedish patent application for MIPS II was filed on May 7, 2010 and an American patent application was filed on May 12, 2010. From August to November of that year, MIPS issued promotional material and attended several bicycle trade shows to present its MIPS II technology. It presented a Limar bike helmet (JBD-243) with an early MIPS II prototype and a Lazer P-Nut bike helmet (JBD-1073) equipped with the yellow MIPS attachment device, along with a promotional video of a child wearing a MIPS-equipped Lazer P-Nut helmet (JBD-167). MIPS’ promotion of its new technology continued throughout 2011. However, the MIPS II technology was not available on the market before February 2012.
(b) Bauer’s background
[22] During the relevant time period, the Bauer helmet development team was composed of Jean-François Laperrière (Director of Protective Equipment Development, mechanical engineer), Marie-Claude Généreux (Senior Product Development Engineer), Jacques Durocher (Senior Industrial Designer) and Denis Côté (Industrial Design Technician, hockey helmet developer).
[23] The development of hockey helmets at Bauer starts more than two years before launch and it follows a precise development cycle with the following eleven steps and deadlines:
1. Advanced research: Ongoing basis
2. Preparation of the product brief: January-June (Year 1)
3. Design of the helmet: March-September (Year 1)
4. Engineering of the helmet: September (Year 1)-May (Year 2)
5. Tooling and production of prototypes: December (Year 1)- January (Year 2)
6. Testing: February-May (Year 2)
7. Design freeze and certification: May-June (Year 2)
8. Development of the other sizes: June-November (Year 2)
9 Presentation of the new helmet to key clients: September-October (Year 2)
10. Start of production: November (Year 2)
11. Helmet hits retail: April-May (Year 3)
[24] From a design and marketing perspective, the three most important criteria in the development of a new hockey helmet are fit, comfort and weight.
[25] However, for the R&D team, protection is the most crucial criteria. Starting in 2006-2007, Mr. Laperrière and Ms. Généreux began to attend conferences and certification meetings where, more and more, the subject of interest revolved around concussions suffered by hockey players and the management of rotational energy in order to prevent concussions.
[26] At the June 2007 Bauer Product Camp, a PowerPoint (JBD-1404) was shown that included a concussion study from Dr. Patrick J. Bishop, chair of the Canadian Standards Association (CSA) committee that sets standards for hockey helmets and face protectors, and a study from Dr. Blaine Hoshizaki of the University of Ottawa on the use of different materials to manage impact forces at different energy levels.
[27] In May 2008, Ms. Généreux attended the 5th International Symposium on Safety in Ice Hockey. At the conference, Philippe Rousseau, a student of Dr. Hoshizaki’s, presented a new way of testing helmets that introduced an angular acceleration component. The previous testing methods only took into account linear components.
[28] In December of the same year, an article entitled “A Comparison of Peak Linear and Angular Head Form Accelerations Using Ice Hockey Helmets” was published by Dr. Hoshizaki and his students. According to Mr. Laperrière, this article was where Bauer first learned that using a softer liner like Vinyl Nitrate [VN] or PORON, instead of a harder one like Expanded Polypropylene [EPP], would better protect against the effects of rotational impact.
[29] Mindful of the eleven development steps discussed above, it is during the summer of 2009 that Mr. Durocher began working on the design of the Next Generation helmet [NG helmet] that would eventually be known as the RE-AKT (JBD-1931, 1252), which was expected to be launched during the Back to Hockey 2012 [BTH12] season. As a designer, his focus was on fit, comfort and weight. In addition, he was asked by the marketing department to focus on the positioning of the helmet on the head, which was directed not to exceed the height of one finger above the eyebrows in order to be attractive to professional hockey players. That quality is important, since if a helmet is worn by professional hockey players, it will sell.
[30] In June 2009, a PowerPoint was presented at the Bauer Product Camp (JBD-2000). It mostly dealt with the helmet to be released during BTH11 – a model known as the HH9900 – but also included the early development stages of the NG/RE-AKT helmet. The PowerPoint summarized various technologies and materials being considered for upcoming helmets, including PORON XRD foam. Mr. Durocher stated that their takeaway from this PowerPoint was that: i) PORON XRD foam performs best at low velocity and low energy; ii) it may be a good idea to combine PORON XRD foam with another kind of foam to reduce its weight; and iii) PORON XRD foam is very spongy, so it could potentially replace the Polyvinyl Chloride [PVC] comfort foam. The overall suggestion was that PORON XRD foam is the best option for optimizing both profits and performance impact at different energy levels.
[31] Ms. Généreux stated that at the end of 2009, beginning of 2010, the general perspective on the effect of rotational impacts on concussions was that it was a new area that needed to be explored, with new methods of testing to be developed. The move from linear component testing to angular/rotational component testing was just beginning and there was, as of yet, no consensus on the best way to perform tests to capture this element.
[32] It was only at the beginning of 2010 that the official design of the RE-AKT helmet began, starting with the input of the engineering team. On January 12, a PowerPoint entitled “Helmet product camp II – BTH12” (JBD-1438) was presented at Product Camp. It referenced a joint project between Bauer and McGill University to determine a new way of measuring impact forces sustained by hockey players. It also discussed the use of PORON XRD foam on the inside of a hockey helmet. It summarized the four different forms of PORON XRD considered by Bauer: foam sheets, a flat poured foam, 3D XRD moulded foam and XRD poured foam. Finally, the presentation summarized the advantages and disadvantages of the new EXPANCEL liner concept.
[33] Generally speaking, the RE-AKT helmet included the following new features:
The head shape was reworked to improve fit and comfort;
A new longitudinal blockage system, down the centre of the helmet, was introduced;
The occipital lock, version 3, was developed. There was now just one central button to adjust the occipital lock and padding;
A new ear protection feature was added;
The SUSPEND-TECH floating liner was introduced and made of PORON XRD foam;
For the energy absorbing layer, EPP was abandoned in favour of EXPANCEL foam since it is a lighter material that responds better to impacts;
The look of the helmet fit very close to and very low on the head;
A new mechanism was added to better adjust the helmet to the wearer’s head.
[34] What is important for us is that the first version of the SUSPEND-TECH floating liner presented in a March 2010 PowerPoint (JBD-1450, slide 27) included 12 mm cylinders or protrusions that were extended to be in contact with the outer shell through corresponding holes or recesses in the EXPANCEL liner:
[35] Mr. Durocher explained that the SUSPEND-TECH floating liner had, in his mind, two main advantages. First, the fact that the comfort liner was floating instead of glued to the energy absorbing layer solved a problem that Bauer had been trying to solve for several years, where the liner became unglued from the energy absorbing layer and became stuck to the wearer’s head. Second, using PORON XRD as the material for the floating liner served a dual purpose: to absorb high and low energy and to act as a comfort liner.
[36] It is important to note that PORON XRD is an exclusive patented material manufactured by Rogers Corporation and its sub-contractors, and that it mostly comes in yellow.
[37] At the June 2010 Product Camp, the RE-AKT development team first advanced the idea that Mr. Durocher’s floating liner concept could also help to manage rotational forces. This hypothesis was influenced by various reports and studies coming out of Dr. Hoshizaki’s lab, which indicated that soft liners (like VN foam) provide better rotational impact protection than hard liners (like EPP). Mr. Laperrière testified that they understood from Dr. Hoshizaki’s work that to successfully manage rotational forces, it was necessary to have a liner that not only compressed but also deformed along every axis to be able to absorb linear and rotational forces.
[38] The team also discussed a project that Bauer wanted to initiate with Dr. Hoshizaki’s lab. In fact, a document attached to a June-July 2010 email chain between Bauer (Mr. Laperrière) and the University of Ottawa (Dr. Hoshizaki) (JBD-1487) defines the scope of this project as being:
Improve protection and safety of hockey players by developing a new helmet performance testing protocol. This protocol will include the traditional linear acceleration performance criteria as well as angular acceleration, which angular acceleration we think should become part of the ice hockey helmet’s performance criteria. It will also include the use of finite element analysis of a brain model to evaluate and quantify the effect of impacts to the brain.
[39] The team further concluded that they should tell the marketing department to revise its product brief to include the diversion of rotational forces as a feature of the RE-AKT helmet (see Ms. Généreux’s notes, JBD-1323, TX-55).
[40] The first prototype of the SUSPEND-TECH floating liner was manufactured in July 2010 by PolyWorks, Rogers’ sub-contractor (JBD-1476). The weight was as Bauer hoped but the cost of producing the liner was extremely high.
[41] Shortly thereafter, Bauer put this prototype into a Bauer 7500 (JBD-1250). The model was assembled by Feng Tay, Bauer’s manufacturer in Asia.
[42] During the course of August 2010, the R&D team pushed to get the project with the University of Ottawa on track as they really wanted to be able to show off the helmet’s ability to manage rotational forces and needed a testing partner to be able to do so. Unfortunately, Bauer received confirmation that Dr. Hoshizaki’s lab had signed a similar testing agreement with their competitor, CCM.
[43] This news increased the pressure on Mr. Laperrière and his team to find another testing partner as soon as possible.
[44] In early September 2010, the development team began thinking of other testing options and made a list of labs to contact (JBD-1497). This list included MIPS, McGill University, Biokinetics, Simbex, a university in the U.K. and Dr. Bishop at the University of Waterloo.
[45] On September 7, 2010, Ms. Généreux wrote an email to Professor David Pearsall at McGill University (JBD-1499). She mentioned that Bauer was seeking a scientific partner to help them develop testing methods to show the effect of angular accelerations on hockey helmets during impact. She also mentioned that they had heard of MIPS, a Swedish company that developed a system to reduce angular acceleration during impact. She asked if he knew of their company, technology and testing methods.
[46] Also during the month of September 2010, the R&D team discussed the need to revise the design of the floating liner in view of the prohibitive cost of the parts and the technical challenges encountered by Feng Tay. The EXPANCEL liner with recesses was too fragile (see Ms. Généreux’s notes, JBD-1323, TX-60) and it was decided to move away from the floating liner with 12 mm protrusions and to simplify the design. Mr. Durocher came up with a new idea of an EXPANCEL liner with smaller recesses and a SUSPEND-TECH floating liner with small dimples to match the corresponding recesses.
[47] Although Bauer understood the manufacturing problems in the fall of 2010, it was only in January 2011 that Mr. Durocher finalized his 2D design drawings of the SUSPEND-TECH floating liner with small dimples (JBD-1784):
[48] On September 21, 2010, Mr. Laperrière sent the following email to MIPS’ general address (JBD-193):
Subject: MIPS in Bauer hockey helmet
Hi,
I’m in charge of the development of the new helmet at Bauer. Bauer manufacture hockey helmet and we would like to know more about your MIPS protection system. Is-it possible to obtain some samples of the MIPS component kit, so we can evaluate the possibility of using this one in our helmet [sic].
Feel free to communicate with me via e-mail or you can call me at [phone number omitted].
Regards,
jf
[49] The content of this email had a significant impact on the parties’ perceptions of Bauer’s needs and intentions at the time. Considering the subject of this email and MIPS’ business strategy and mission, Mr. Johan Thiel – now MIPS’ CEO, but responsible for sales and marketing at the time – understood Bauer to have been interested in implementing MIPS technology into Bauer helmets. However, and as the evidence shows, Bauer may have been interested, or at least curious, about the MIPS technology but, in the short term, it was far more interested in its testing methods and facilities. Mr. Laperrière testified that his choice of words (“MIPS in a Bauer hockey helmet”) was intended to trigger a quicker response from MIPS than if he had referred solely to MIPS’ testing capacity. Not only is Mr. Laperrière’s testimony on that subject credible and uncontradicted, but it is also corroborated by the rest of the evidence and by the agreements later entered into by the parties.
[50] As a result of the contact initiated by Bauer, a first meeting between Bauer and MIPS was scheduled for November 16, 2010 at the Bauer facility in Saint-Jérôme, Quebec.
[51] In preparation for this meeting, Mr. Laperrière and Mr. Durocher reviewed MIPS’ website which, at the time, referred only to its MIPS I technology. The patent application regarding the MIPS II technology had been filed in May 2010, but had not yet been granted and its claims were still confidential.
[52] In a very subtle way, MIPS suggests that the sliding feature in the MIPS I technology may have influenced Bauer’s move from the 12 mm protrusions to the small dimples in its SUSPEND-TECH floating liner, so as to cause relative movement. However, and as will be further discussed below, this is a somewhat dangerous route for MIPS to take as it could give ammunition to Bauer’s argument that the MIPS 542 Patent is invalid for obviousness. Furthermore, and as discussed above, the evidence shows that the reasons for the change are instead related to the manufacturing costs and technical challenges encountered in prototype development.
(c) First meeting held on November 16, 2010 and subsequent events
[53] At this meeting, Mr. Laperrière, Ms. Généreux and Mr. Durocher were present for Bauer and Mr. Thiel was present for MIPS.
[54] Mr. Thiel presented MIPS and its technology via a PowerPoint presentation (JBD-172). During his testimony in chief, he highlighted slide 18 – “MIPS Inmold” – which showed the MIPS II technology and the relative motion created between the attachment device and the energy absorbing layer. This slide was added to an existing MIPS I focused PowerPoint presentation in August 2010. Mr. Thiel admitted in cross-examination that the MIPS II technology was not commercially available at that time and that he was not yet sure which of either the MIPS I or MIPS II technologies could be implemented into a two-shell hockey helmet.
[55] It is to be noted that Mr. Thiel had both presentations on his laptop, the one with slide 18 and the one without, and that none of Bauer’s representatives recall specifically having seen slide 18, which can be seen below:
[56] Mr. Thiel also brought with him a large bag of sample helmets. He had a POC Receptor Backcountry helmet with the MIPS I technology (JBD-2058) and a Lazer P-Nut incorporating the MIPS II technology (JBD-1073). Mr. Thiel testified that he only showed the Lazer P-Nut very briefly, as the helmet belonged to Lazer and was merely a prototype; no commercialization agreement had yet been signed between Lazer and MIPS. He admitted that the only products commercially available at the time used the MIPS I technology.
[57] On the Bauer side, Mr. Laperrière and Ms. Généreux took notes during the meeting (JBD-20, 2124, respectively).
[58] Mr. Laperrière’s notes include “Cost – 10-15 U.S.” which refers to an estimate of $10K-$15K for MIPS to do the initial testing, a sum amenable to Bauer.
[59] Mr. Laperrière recalled having informed Mr. Thiel at the outset of the meeting about Bauer’s strict policy regarding confidentiality and non-disclosure. He told Mr. Thiel that since they had not signed a Non-Disclosure Agreement [NDA], he could not discuss any Bauer product that was not yet on the market. He asked Mr. Thiel to do the same with regard to MIPS products. He also recalled agreeing to a two-stage project – Phase 1 involving tests and Phase 2 involving the insertion of MIPS’ technology into a Bauer helmet. Mr. Laperrière testified that they discussed Phase 2 as a result of Bauer initiating talks with MIPS under the premise of collaboration. However, he added that they were doubtful that the MIPS I technology available at the time could be implemented into a two-shell adjustable hockey helmet. Mr. Thiel told them that MIPS had not done testing for other parties in the past, but seemed very open and receptive to the possibility of doing so for Bauer.
[60] Ms. Généreux’s notes only refer to two MIPS patents: the MIPS I Patent and a U.S. patent for a “rubber suspension system” not at stake in this file. She admitted that she was informed that the MIPS I technology involved rotational motion of the outer shell and that motion was tied to the idea of a reduction of rotational energy transmitted to the brain.
[61] We can also read in her notes: “Could work as a consultant for testing our own helmets” and “adding MIPS in a helmet.” Her takeaway from this meeting was that it was possible to use MIPS’ services for testing Bauer helmets. As far as implementing MIPS’ technology into Bauer helmets, she saw that as a potentially much more long-term option, given MIPS’ unfamiliarity with hockey helmets.
[62] Mr. Durocher confirmed that Mr. Thiel presented MIPS, its background, the capacity of its laboratory, the research that led it to test rotational forces, the helmet technologies that it developed and its products. He understood that, at that time, the technology presented by Mr. Thiel could not be adapted into a two-shell adjustable hockey helmet. However, Mr. Thiel said he was happy to try and find a solution, so he asked for and was provided with a Bauer 7500 helmet to take back to Sweden with him.
[63] Mr. Durocher and Ms. Généreux do not recall having seen a helmet at this meeting; Mr. Laperrière only remembers having seen a MIPS I snowboard helmet.
[64] In early January 2011, Bauer followed up with MIPS: “Have you been able to modify the helmet that I gave you during our last meeting, we would like to develop a testing protocol for a hockey helmet and we would like to see if your MIPS system could be implement [sic] in our helmet. Could you tell us if your firm is still interested to work with us and give us a preliminary time line and cost to do this project?” (Mr. Laperrière’s email, JBD-297).
[65] Meanwhile at MIPS, the development of the Burton RED HiFi had begun and was intended to be ready for the Snowsports Industries America [SIA] Tradeshow in Denver scheduled from January 27 to January 31, 2011. This helmet implemented the MIPS II technology and included a yellow attachment device with comfort lining and two fixation members (JBD-2086):
[66] This Burton RED HiFi was also shown in February 2011 at the ISPO Tradeshow in Munich.
[67] At Bauer, the team continued developing the RE-AKT helmet. At a Product Camp held in January 2011, a PowerPoint was presented (JBD-1990). It referred to the MIPS technology, to its scientific research and to its patented system managing rotational forces with a low-friction layer system. The launch date to have this technology implemented in Bauer helmets was identified as BTH14. A further slide referred to a multi-phase relationship between MIPS and Bauer, including the negotiation of a partnership agreement and testing Bauer helmets. One of the bullet points on this slide states: “Look at the possibility to use MIPS patented system.”
[68] As indicated above, it is also in January 2011 that Mr. Durocher prepared his 2D design drawings of the SUSPEND-TECH floating liner with small dimples instead of the 12 mm protrusions (JBD-1791). An EXPANCEL liner without recesses was also drawn up, since the plan became to make matching recesses for the small dimples by hand.
[69] Mr. Durocher explained that the sizing of this latest prototype was a little off from past Bauer helmets and that it sat too high up on the head. He needed to work on redesigning the prototype. Two different prototypes were internally fit tested: one had recesses in the EXPANCEL liner, while the other one did not (JBD-2003). Feedback was solicited from the marketing department.
[70] Ms. Généreux prepared drawings of the EXPANCEL liner with small recesses in March 2011 (JBD-2044). These recesses were intended to make room for the matching dimples on the SUSPEND-TECH liner, in an effort to improve the helmet’s fit.
[71] During that period, meeting minutes (see for example JBD-1526, 1527) show that Mr. Durocher still needed to work on the design to improve the size and fit of the RE-AKT helmet.
[72] Effective March 17, 2011, the parties executed a NDA in advance of their next meeting (JBD-324). The content of this NDA will be discussed later.
(d) Second meeting held on March 30, 2011 and subsequent events
[73] At this Saint-Jérôme meeting, Mr. Laperrière, Ms. Généreux and Mr. Ken Covo (Vice-President, Research and Development) were present for Bauer and Mr. Thiel was present for MIPS. Both Ms. Généreux and Mr. Covo took notes during the meeting (JBD-1565, 1969, respectively).
[74] The parties agreed to a project quotation that day, though it was only executed on May 11, 2011 (JBD-538, 1591). The project scope was divided into three phases:
Project scope
In this scope the project is divided in three phase (sic). MIPS will carry the projects on helmets provided by Bauer for the explicit purpose defined below.
Short term
Phase 1: with the purpose to carry out a pre-study of three Bauer helmets and one with MIPS.
Phase 2: to refine the test protocol more towards Hockey and continue with test of Bauer helmet without and with MIPS plus compare with competitor’s helmets. FE-modling [sic] will be carried out and more in-depth report/conclusions will be delivered.
Long term
Phase 3: A two year plan to develop test protocol and helmet together with Bauer. This phase will be carried out in a step by step approach. By a defined brief sub-projects will be set up and quoted separately.
[75] Phase 1 testing was to be performed on an assembled Bauer RE-AKT helmet, as well as HH5100 and HH7500 helmets. Bauer was also to provide MIPS with a disassembled HH7500 to be provisionally implemented with MIPS technology and tested. This phase was to be performed from May 1st to July 15, 2011.
[76] Phase 2 testing was to be performed on an assembled RE-AKT helmet and on competitors’ helmets for the sake of comparison. This phase included a disassembled RE-AKT helmet being provisionally implemented with MIPS technology and tested. The timeframe for this second phase was July 15 to October 1st, 2011.
[77] Bauer witnesses recalled discussing mainly testing protocol during that second meeting. However, their notes confirm Mr. Thiel’s testimony that the MIPS II technology was summarily discussed. In Ms. Généreux’s notes, we can read: “MIPS II: 0.7 mm to 0.8 mm thick – with elastic mvmt 10 mm – seems enough to reduce rotational force by 50%.” In Mr. Covo’s notes, we find the following: “7-8 mm low friction layer 10-15 mm show displacement – MIPS II multi-impact vs (crash helmet) single impact – rubber fixations.” We know that, at that time, MIPS had only worked on single impact helmets, such as motorcycle, ski and bicycle helmets.
[78] On the other hand, Ms. Généreux’s notes indicate: “See Red Burton Helmet”, which suggests that the Burton helmet was not shown and that she made a note to herself to look at it in the future, since it integrated the MIPS II technology summarily discussed during the meeting.
[79] On April 8, 2011, and as a result of fitting issues and technical challenges with the RE-AKT prototype, Bauer requested and received samples of the SUSPEND-TECH floating liner without dimples from Feng Tay for testing purposes.
[80] MIPS’ theory of contribution to or ownership of the SUSPEND-TECH floating liner inventive concept is dependent on the fact that the dimples were removed at MIPS’ suggestion. Its original position was expressed in its Thrice Amended Statement of Claim (at paras 21, 23) and reads as follows:
….Additionally, beyond the scope of the originally planned testing, on June 22, 2011, an employee of MIPS named Daniel Lanner determined that the RE-AKT helmet needed to be modified to enable a relative movement between the outer surface of the attachment device and the other portions of the helmet. This modification as determined by MIPS effectively eliminated Bauer’s change to the MIPS system by removing the bumps that Bauer had included in the outer surface of the RE-AKT's attachment device. This system with the bumps removed was later tested and included in the test results.
…
On July 10-11, 2011, Mr. Laperriere and Ms. Généreux visited the MIPS facility in Stockholm, Sweden. During the two-day meeting, MIPS explained the testing and fully demonstrated the HH7500 helmet as modified by MIPS to include the MIPS rotational impact protection system. MIPS also recommended to Bauer that the bumps included by Bauer on the RE-AKT attachment device be removed.
[My emphasis.]
[81] However, Bauer’s decision to remove the dimples was taken on June 1st, 2011 (JBD-1605), Ms. Généreux’s computer-aided design [CAD] drawings of the EXPANCEL liner were revised accordingly on June 10, 2011 (JBD-1809, 1811, 1813) and Mr. Durocher revised his CAD drawings for the floating liner on June 13, 2011 (JBD-1621).
[82] Meanwhile, on June 3, 2011, Mr. Durocher finalized his Invention Disclosure Form (JBD-1609), which was revised on June 7, 2011 (JBD-1613, 1614). The principle set out in that document was a system allowing the head to move within the helmet during an angular impact, thus limiting the movement of the brain inside the skull. The initial form did not disclose dimples but the revised version did. Mr. Durocher explained that he wanted the disclosure to be as broad as possible, since contrary to Mr. Laperrière and Ms. Généreux, he still thought that the dimples could improve protection against low energy impacts without compromising too much on fit.
[83] In light of the foregoing evidence, MIPS changed its approach at trial (departing from the position that MIPS only determined on June 22 that dimples had to be removed). Mr. Thiel testified that during a telephone conversation he had with Mr. Laperrière on June 10, 2011, he recommended that the dimples be removed from the SUSPEND-TECH floating liner. Mr. Laperrière and Ms. Généreux do not recall receiving any recommendation from MIPS on removing the dimples before the July 2011 meeting in Stockholm.
[84] The Court prefers Bauer’s evidence on this point, not only because it is consistent with MIPS’ original pleadings, but also because it is consistent with MIPS’ impression when it first received RE-AKT helmet samples with the dimples and matching recesses on June 2, 2011. At that time, MIPS’ management team wondered whether that version of the SUSPEND-TECH floating liner infringed the MIPS 542 Patent. If the feeling was that the SUSPEND-TECH floating liner with dimples might infringe, why suggest eliminating “Bauer’s change to the MIPS system….” as seen in paragraph 21 of MIPS’ Thrice Amended Statement of Claim? It is more likely that MIPS’ suggestion would not have been made before the parties’ first discussion of possible infringement during the July 2011 Stockholm meetin