Human Care Canada Inc. v. Evolution Technologies Inc.

Human Care Canada Inc. v. Evolution Technologies Inc.
Court (s) Database
Federal Court Decisions
Date
2018-12-21
Neutral citation
2018 FC 1302
File numbers
T-1556-12
Decision Content
Date: 20181221
Docket: T-1556-12
Citation: 2018 FC 1302
Ottawa, Ontario, December 21, 2018
PRESENT: The Honourable Madam Justice Elliott
BETWEEN:
HUMAN CARE CANADA INC.
Plaintiff/Defendant by Counterclaim
and
EVOLUTION TECHNOLOGIES INC.
Defendant/Plaintiff by Counterclaim
PUBLIC JUDGMENT AND REASONS
TABLE OF CONTENTS
I. Overview 4
A. Nature of the Action 4
B. The Parties and Their Products 5
(1) Human Care 5
(2) Evolution 6
C. The Mobility Aiding Device Market in Canada 7
D. The 392 Patent 9
II. Facts Agreed Upon 11
III. Preliminary Issues 14
A. Commercial Embodiment and Commercial Success 15
(1) Mr. Macmillan’s Examination-in-Chief 15
(2) Dr. Brienza’s Expert Report 16
(3) Rulings on the Objections 17
B. Evolution’s Inventory Cost (“COGS”) Increases 18
C. Nonsuit 21
D. Lane Patent 25
IV. Witnesses 28
A. Human Care’s Fact Witnesses 29
(1) Douglas Macmillan 29
(2) Jeffrey Fishbein 31
(3) Rick Synkowicz 33
B. Evolution’s Fact Witnesses 34
(1) José‑Luis Pita 34
(2) Stephen Liu 36
C. Human Care’s Expert Witnesses 37
(1) Dr. David Brienza 37
(a) Evolution’s Critique of Dr. Brienza 39
(b) Evolution’s Challenge to Dr. Brienza’s Credentials 40
(2) Nancy Rogers 42
(a) Evolution’s Critique of Ms. Rogers 43
D. Evolution’s Expert Witnesses 43
(1) Jonathon Schuch 43
(a) Human Care’s Critique of Mr. Schuch 44
(2) Mark A. Gain 45
(a) Human Care’s Critique of Mr. Gain 46
V. Issues 46
VI. The Claims in Issue 47
VII. Claims Construction 49
A. The Law 49
B. The Approach to Claims Construction by Dr. Brienza and Mr. Schuch 54
C. The Person of Ordinary Skill in the Art [POSITA] 56
D. Common General Knowledge [CGK] 59
E. The Essential Elements of the Claims in the 392 Patent 62
(1) Essential Elements Agreed Upon 64
(2) Essential Elements Disagreed Upon 64
(3) The Approach to a Purposive Construction of the Essential Terms in Dispute 64
(4) Tension Rod Means 66
(5) Tension Rod Structurally Interconnects 71
(6) First and Second Supports 77
(7) Handle 81
(8) First and Second Cross Braces 88
VIII. Infringement 93
A. The Law 93
B. General Comments on the Infringement Issues between the Parties 94
(1) The Preferred Embodiment 95
C. The Xpresso Rollator Infringes the 392 Patent 97
(1) Tension Rod Means and Tension Rod Means Structurally Interconnects 99
(2) First and Second Supports 99
(3) Handle 100
(4) The First and Second Braces 101
IX. Validity 102
A. Rulings on the Objections Relevant to the Validity 103
B. Anticipation 106
(1) The Law 106
(2) The 392 Patent was not anticipated 109
C. Obviousness 109
(1) The Law 109
(2) The Inventive Concept 114
(3) Essence of the Invention 115
(4) The 392 Patent was not obvious 116
(a) Commercial Success 117
D. Overbreadth 118
(1) The Law 118
(2) The Arguments of the Parties 121
E. Mere Aggregation 122
(1) The Law 122
(2) The 392 Patent is not a mere aggregation 123
X. Remedies 124
A. Damages – Reasonable Remedy 124
B. Is Human Care Entitled to Evolution’s Profits in Respect of Its Xpresso Products? 125
C. Agreed Upon Facts Relevant to an Accounting of Profits 126
D. General Legal Principles of an Accounting of Profits 127
E. Evolution’s Differential Profits Approach 128
F. Analysis of Evolution’s Differential Profits Approach 130
G. The Appropriate Accounting Method to Determining Evolution’s Profits 132
H. What Costs, if any, are Deductible from Evolution’s Xpresso Revenues, and in What Proportion? 133
(1) Deductible Expenses Claimed by Evolution 135
(a) Sales and Administrative Costs – EVO-56 135
(b) Accounting and Legal Fees 136
(c) Consulting Fees 137
(d) Other Discretionary Deductions Claimed 138
I. Conclusions on Accounting of Profits 138
J. Is Human Care Entitled to a Permanent Injunction? 139
K. Should Profits-on-Profits be granted 139
XI. Costs 139
XII. Pre- and Post-Judgment Interest 140
I.
Overview
A. Nature of the Action
[1] The Plaintiff, Human Care Canada Inc. [Human Care] and the Defendant, Evolution Technologies Inc. [Evolution] each manufacture products called rollators in the industry of mobility aiding devices. While members of the public commonly call rollators “walkers”, they are in fact a separate product— a rollator is a “walker” with wheels.
[2] Human Care claims that Evolution has infringed Claims 16 and 18 of Canadian Patent No. 2,492,392 [the 392 Patent] of which it is and has been a patentee or, a person claiming under a patentee, throughout the relevant period. Human Care alleges that Evolution’s Xpresso rollator [Xpresso] features all the essential elements of those two claims.
[3] Human Care seeks:
a declaration that Evolution's Xpresso products have infringed claims 16 and 18 of Human Care's 392 Patent;
dismissal of Evolution's counterclaim in its entirety on the basis that the 392 Patent is valid; and
remedies be granted, including:
a permanent injunction issued restraining Evolution from infringing the 392 Patent;
reasonable compensation be awarded for infringement during the period when the application became open to the public and when the patent was issued, including Evolution’s profits made as a result of selling the infringing products;
a direction that Evolution immediately deliver to Human Care all articles in its possession, power or control that fall within the ambit of the 392 Patent; and
pre‑judgment and post‑judgment interest and costs of this action as determined by this Court.
[4] Evolution defends the infringement action on the basis that the Xpresso lacks five essential elements found in Claims 16 and 18 of the 392 Patent.
[5] Evolution also counterclaims that the 392 Patent is invalid because it was anticipated by another patent, was obvious given the prior art, is not inventive but was a mere aggregation of known parts and, the claims in the 392 Patent are broader than the invention actually made or described. In support of the counterclaim, a list of 54 pieces of prior art is attached as a schedule to the Second Amended Statement of Defence and Counterclaim.
[6] In the Second Amended Reply and Defence to Counterclaim, Human Care denies Evolution’s allegations and asserts that the commercial success of the invention demonstrates that the 392 Patent is inventive and not obvious.
[7] For the reasons that follow, I have concluded that the 392 Patent is valid and that it has been infringed.
B. The Parties and Their Products
(1) Human Care
[8] Human Care is an Ontario corporation located in Nepean, Ontario. It is a subsidiary of a global manufacturer and supplier of home healthcare products, including walkers and other mobility aiding devices.
[9] In 2007, Human Care of Sweden acquired the Canadian company Dana Douglas Inc. As a result, the Plaintiff, Human Care, is the Canadian subsidiary of a Swedish mobility products company that also has offices in Austin, Texas, the Netherlands, and Melbourne, Australia. Globally Human Care has about 100 employees.
[10] Douglas Macmillan and his father, Dana Macmillan, started Dana Douglas. It first began selling rollators in Canada in 1990 by importing them from Holland. Later, it struck a deal whereby it would sell in North America the products of a manufacturing facility in Taiwan, which would sell them everywhere else. When the manufacturer opened a distribution centre in the United States, Dana Douglas decided it needed to control its own destiny and develop its own products. The first such product was called the Infiniti.
[11] Of interest in this matter is a rollator which Human Care markets under the brand name “Nexus.” Mr. Macmillan indicated that when it was launched in late 2004 the Nexus was the only cross‑folding (side to side) rollator in the world with a centre‑folding solid seat. All other rollators folded front to back or, if they cross-folded, they had a sling‑type seat.
(2) Evolution
[12] Evolution is a privately owned corporation that was incorporated in British Columbia. It has a global business which supplies mobility aiding devices for consumers.
[13] The sole shareholder, President and CEO of Evolution is Julian Liu. He is the person in charge of all aspects of the business of the company. Mr. Liu oversees Evolution’s profitability and quality control; he negotiates contracts such as those with the factory and with the exporting company. Mr. Liu’s wife, Alice Chen, and son, Stephen Liu, are also involved with the operations of Evolution.
[14] The Evolution rollator, which allegedly infringes the 392 Patent, is marketed under the brand name “Xpresso.” It is agreed that all Xpresso rollators have a centre‑folding frame. The term “centre‑folding” is agreed to refer to a walker and/or rollator that folds laterally (or side folds), the folding of which is initiated by the user pulling on a handle.
[15] It is also agreed that Evolution does not have a license in respect of the 392 Patent.
[16] In addition to Evolution, Mr. Liu owns a company located in China that sells point‑of‑sale software units to beauty salons in China. That product is also called Xpresso.
C. The Mobility Aiding Device Market in Canada
[17] Mobility aiding devices are typically used by persons for assistance with their daily activities by providing support during activity or movement. These devices include canes, crutches, walkers, wheelchairs and rollators.
[18] Historically, mobility aiding devices have been used for centuries. Wheeled chairs to carry people are said to have been in use as early as the 6th Century. The first patent for a wheelchair with a full reclining back was issued in 1869. More recently, in the 1930s, a folding wheelchair with a sling seat was invented and is still in use today. Wheelchairs have continued to evolve over time. As is well known, today there are various specialized wheelchairs including electric wheelchairs, wheelchairs designed for specific sports, and wheelchairs that can be manoeuvered by quadriplegics.
[19] Walkers originally consisted of a non‑folding frame with handgrips and four or more legs. These walkers required the user to lift and position the walker between taking steps. In the 1970s, light weight folding walkers with wheels entered the market. The user could push or roll the walker without lifting it to take steps.
[20] The first rollator was a four‑wheeled rolling walker invented in 1978 by a Swedish woman for her personal use. In contrast to a walker, a rollator usually includes brakes, handles, and a seat as well as a frame and wheels.
[21] It is expected that rollators will be used outside. As such, they need to be stable in use and flexible enough to be put in the trunk of a car for transporting. Users often sit on their rollators so they also need to be able to support the user’s weight without collapsing.
[22] In Canada mobility aiding devices are sold to the public directly via websites and through home medical equipment dealers. There are hundreds of independent dealers in addition to large corporate dealers such as Motion Specialties, Shoppers Home Healthcare, and Home Medical Equipment. The dealers carry products from a variety of manufacturers or distributors whose sales persons actively seek out their business. Physical therapists may also make specific product recommendations to clients.
D. The 392 Patent
[23] The 392 Patent was filed on January 14, 2005 claiming priority as of March 26, 2004 by United States Patent 10/809,334. The 392 Patent will expire on January 14, 2025. It was opened to the public on September 26, 2005 and was issued on November 30, 2010.
[24] The named inventors of the 392 Patent are Mr. Ross Lyell Cowie and Mr. Bjarki Hallgrimsson. The owner of the 392 Patent is the Plaintiff, Human Care.
[25] The 392 Patent is entitled “Mobility Aiding Device.” The “Technical Field” of the invention sets out that “[t]he present invention relates to a mobility aiding device, and in particular to a wheelchair, a walker, a transport chair, a shower seat or a rollator with a solid seat, which is hinged in the middle to enable the device to be easily folded into a storage position.”
[26] The “Background of the Invention” [Background] indicates that a large, aging, urban population has created an increased demand for various mobility aiding devices. It states that existing mobility aiding devices such as walkers and rollators have become more popular than wheelchairs, crutches or canes because of their added structural support and versatility. A highly sought after feature is the ability to fold up into a storage position for travel or simply to save space when not in use. While conventional wheelchairs have had the ability to fold two sides of the frame into a storage position, they have always had a flexible or hammock seat. It is said that a hard platform is now desired to provide comfortable seating and usable supporting structure for other items.
[27] The Background then identifies various faults found in the prior art:
- complicated one‑piece seats require a great deal of manual dexterity and strength to open and close a device;
- two‑piece seats require extra support panels which are accessed from below the seat; and
- two‑piece seats employ extra‑wide abutting surfaces between the pivoting seat panels and those abutting seats (a) can pinch body parts and (b) are not always strong enough for long‑term use.
[28] The Background section concludes by identifying the problem to be solved by the 392 Patent as “to overcome the shortcomings of the prior art by providing a mobility aid . . . with a solid seating platform made up o[f] two pivotally connected sections, with structural reinforcements that fold up easily into a storage position.”
[29] The “Summary of the Invention” describes in general terms two variations of the mobility aiding device adjustable between a use and a storage position.
[30] There are nine drawings in the 392 Patent depicting preferred embodiments. The drawings show the preferred embodiments from differing viewpoints. There are four different views of the rollator: isometric views of it in a use position and in a storage position; a front view and a side view. There are five different views of the chassis: an isometric view, a front view, an end view looking up from below the seating platform, an end view in a partially collapsed position, and an end view in the storage position.
[31] The “Detailed Description” of the drawings found at paragraphs 30 to 39, refers to the nine figures which depict various elements of the embodiment shown. The paragraphs mirror the claim language and provide additional information such as that the chassis “is preferably made up of a lightweight high‑strength material, such as aluminum” and “if the present invention were to be used with a walker or shower seat, the front and rear wheels could be replaced by end caps made o[f] rubber or some other non‑slip material.”
[32] There are eighteen claims in the 392 Patent. Claims 16 and 18, which Human Care says have been infringed by Evolution, are independent claims as are Claims 10, 12, 14, 15 and 17. Evolution has challenged the validity of all eighteen claims.
II. Facts Agreed Upon
[33] The first exhibit entered at trial was an Agreed Statement of Facts [ASF] tendered on the basis that the contents of the agreement did not constitute an admission by either party of the relevance of the facts agreed upon or the weight, if any, to be given to them at trial.
[34] In the ASF, certain non‑contentious terms were agreed upon. For example, there is an agreement as to the meaning of a centre‑folding rollator:
“Centre‑folding” refers to a walker and/or rollator that folds laterally (or side folds), the folding of which is initiated by the user pulling on a handle;
[35] The relevant dates for the 392 Patent and extracts from parts of the 392 Patent were also set out and agreed upon as were the names of the inventors and that Human Care is the current owner of the 392 Patent.
[36] The ASF contains a short summary of the development of the 392 Patent. It refers to an email from Mr. Macmillan to one of the inventors, Mr. Hallgrimsson, which included reference to two United States Patents known in these proceedings as “Fernie” and “Loodberg” and which was forwarded by him to the other inventor Mr. Cowie.
[37] The total annual external sales revenues, total annual Nexus rollator sales revenue and the revenue that Human Care earned on its Nexus rollators as a percentage of its external sales revenue during the period 2006 to 2015 are agreed to and set out in a table format in the ASF. This agreement obviated the need for either of the parties to prove any documents underlying the numbers in the table including the financial documents relied on by either of their accounting experts.
[38] There is an acknowledgement that Evolution first sold the Xpresso rollators in July, 2008 and that they have a centre‑folding frame. There is also confirmation that Evolution has offered for sale, sold, imported into Canada and exported from Canada a number of named Xpresso rollators in various sizes and that the Xpresso Zero has been assembled in Canada since July 2008. Xpresso Parts & Accessories are defined in the ASF and are said to have been offered for sale, sold, imported into Canada, exported from Canada and assembled in Canada by Evolution from July 2008 to present.
[39] It is agreed that Evolution does not have a license in respect of the 392 Patent.
[40] There is an agreement that there is no prior anticipatory disclosure of the invention under paragraph 28.2(1)(a) of the Patent Act, RSC 1985, c P‑4 [Patent Act].
[41] If the 392 Patent is found to be valid and infringed under ss. 55(2) of the Patent Act, an amount is agreed upon for a reasonable royalty to be paid for Evolution’s use of Human Care’s patented technology from the date of launch of the Xpresso in July 2008 until the 392 Patent was issued on November 30, 2010. The royalty rates for, and the total number of Xpresso rollators sold, between July 1, 2008 and November 30, 2010 is agreed upon. The royalty rate is based on the actual royalty rates paid in respect of the Nexus rollators from 2006 to 2011 calculated from July 1, 2008 up to July 1, 2010 and from July 1, 2010 to November 30, 2010.
[42] To assist with the calculation of an accounting for profits, a table sets out the Xpresso rollator unit sales from December 1, 2010 to June 30, 2016. There is a stipulation as to the total sales revenue from Xpresso Products, as defined earlier in the ASF, for the same time period. There is also agreement between the parties as to the Xpresso Product Freight Costs for that same time period.
[43] Facts that have been agreed upon, in addition to the foregoing, are interspersed throughout this Judgment and Reasons.
III. Preliminary Issues
[44] During the course of the trial, there were a number of objections. Some objections were ruled on immediately; others were reserved and will be addressed as necessary during the course of this Judgment and Reasons when the subject matter of the objection is being reviewed.
[45] There was also a motion for nonsuit at the close of the Plaintiff’s case. The nonsuit motion is dismissed for the reasons set out below.
[46] Human Care raised an objection about Evolution’s reliance on an American patent as its inspiration for the Xpresso. That objection is sustained and the reasons are provided in this decision.
[47] Human Care also objected to Evolution’s increased inventory costs. This objection is analyzed in this decision and is sustained.
[48] After receipt of the written closing submissions, correspondence was received from each party concerning Evolution’s submissions with respect to invalidity based on anticipation. That objection is dealt with as part of the discussion of whether the claims in the 392 Patent were anticipated.
[49] Two matters which were briefly taken under reserve and determined on day two of the trial are outlined and determined below.
A. Commercial Embodiment and Commercial Success
[50] During the examination-in-chief of Mr. Macmillan on the first day of trial, counsel for Evolution objected under Rule 248 of the Federal Courts Rules, SOR/98‑106 [Rules] to Human Care presenting any facts or information or making any submissions with respect to the Nexus rollator being the commercial embodiment of the 392 Patent. The same objection was then made with respect to any sales of the Nexus rollator or evidence that it was a commercial success. The basis for the objections was that Human Care had refused to answer a number of questions on discovery related to both commercial embodiment and commercial success.
[51] In addition, Evolution objected to any submissions being made regarding the Nexus and, in particular, any facts or evidence by any witness that the Nexus is a commercial embodiment of the 392 Patent. This objection encompassed Dr. David Brienza’s Expert Report and his statements as to the Nexus being the commercial embodiment of the claims in the 392 Patent and any fact evidence being put forward by any witness as to the commercial success of the Nexus.
[52] At the opening of the second day of trial, I provided oral rulings denying the objections. A brief summary of the objections and rulings follows.
(1) Mr. Macmillan’s Examination-in-Chief
[53] The objection addressing whether evidence of the commercial success of the Nexus could be led was an issue closely connected to the commercial embodiment argument. It arose when counsel for Evolution objected to Mr. Macmillan mentioning the “tremendous success of the cross‑fold”, in response to counsel for Evolution asking “what cross‑fold,” Mr. Macmillan, presumably being unaware of the commercial success argument, immediately answered “the Nexus.” We were then away to the races.
[54] Counsel for Evolution was well prepared, reading a number of examples of questions posed during discovery of Mr. Macmillan regarding the Nexus and the answers by his counsel which tended to be either the question was not relevant or, it was a matter of expert opinion.
[55] Human Care submitted in response to this objection that answers had been given and there was a pleading amendment claiming commercial success of the Nexus.
(2) Dr. Brienza’s Expert Report
[56] Evolution objected under Rule 52.2 to Dr. Brienza’s Expert Report on the basis that there was no analysis, just conclusions based on his review of photos of the Nexus. As such Evolution sought to exclude the report under Rules 279 and 280 because it had not been prepared in accordance with the Court’s expert code of conduct. Rule 52.2 requires that facts and assumptions be provided in the report to support the reasons for each opinion given.
[57] Human Care replied that the expert report and will-say statements had been in the hands of Evolution since before the pretrial conference but had not been objected to by Evolution. In addition, Evolution had been on notice that Human Care took the position that the Nexus is the commercial embodiment of the 392 Patent since after the first round of discovery and the pleading amendment clearly state that commercial success was being claimed.
(3) Rulings on the Objections
[58] After hearing the arguments, reviewing the documents provided or referred to and considering the case law, I found the objections were not well founded for a variety of factors which were outlined in my oral reasons. In addition, I held that the concerns as to the question of commercial success or otherwise of the Nexus and the contents of Dr. Brienza’s reports were best challenged by cross‑examination.
[59] At trial I added and, reiterate here, that in any event I would have exercised my discretion to waive compliance with the Rules given the length of time that answers had been provided to questions posed in discovery and considering that each side failed to take active steps to address the matters raised in the objections at either the case management conference or the pretrial conference.
[60] On the Rule 248 objection, I found that despite the submission that no answers were provided during discovery answers were in fact given.
[61] I specifically addressed that Rule 248 only applies if a proper question has been asked and there has been a refusal to answer the question either at that time or subsequently. The questions which were put to Mr. Macmillan in April of 2015 were objected to on the basis that he was not properly qualified to answer them as they were a matter of expert opinion. Therefore, they were not proper questions. Additionally, the commercial embodiment questions were subsequently answered on July 8, 2015 stating that the Nexus 1, 2 and 3 rollators were commercial embodiments of the 392 Patent. The pleading amendment made by Human Care in the counterclaim referred to the Nexus rollator as being the embodiment of the invention in the 392 Patent.
[62] On the Rule 52.5 objection, I found that the conclusion in the Expert Report could not be divorced from the balance of the report in which Dr. Brienza had reviewed Claims 1 to 15 and his infringement report was referred to in his Responding Report where he detailed the provisions of Claims 16 and 18 of the 392 Patent.
[63] In addition, Dr. Brienza referred extensively to the drawings and he examined the claims in the 392 Patent. It simply could not be said that the conclusions he drew were not supported by facts, assumptions and analysis.
B. Evolution’s Inventory Cost (“COGS”) Increases
[64] During the hearing, Human Care brought an objection with respect to Evolution’s inventory cost (“COGS”) increase. That is, Human Care objects to Evolution’s alleged reliance on increased COGS under Rule 248 of the Rules. Human Care claims that because Evolution was not questioned about the increased cost at discovery such information should not form the basis of my determination.
[65] In particular, Human Care asserts the following:
After two rounds of examinations for discovery, Mr. Pita claimed that—based on EVO‑49—the inventory costs for Xpresso Lite and Xpresso Original and Tall was |||||| and |||||||||| respectively.
On August 8, 2016, Evolution allegedly provided new invoices for Fine Faith that demonstrate that the cost of Xpresso rollators range from |||||||||| to ||||||||||.
In light of the new unit price, Human Care demanded that Evolution answer four pages of written interrogatories before the trial. Evolution refused. Therefore, Human Care claims that it did not have sufficient discovery of the Xpresso’s unit price and was prejudiced in the process.
[66] Evolution argues that Human Care is misinterpreting Mr. Pita’s statement and, is seeking another round of discoveries. Specifically, Evolution’s position can be summarized as follows:
Mr. Pita was not opining generally about the cost of Xpresso rollators; rather he was describing one particular invoice that Ms. Wall was asking about.
Evolution provided all relevant documents (EVO‑57 to EVO‑63) three months before the second round of discovery.
It is evident in these invoices that the unit cost of the Xpresso varies.
Evolution did not answer the written questions before trial because (i) the questions were a veiled attempt at another round of discovery; and (ii) the Rules only allow for both oral and written discovery if the parties consent (or with leave from the Court). Neither applied here.
[67] I find that Evolution did not provide Human Care adequate opportunities to raise questions about COGS for three reasons.
[68] First, Evolution’s argument that Human Care had access to the relevant invoices during the two rounds of discovery is inaccurate. Human Care was only provided with invoices for Fine Faith for 2008‑12 (EVO‑49) during the discoveries. These invoices indicated that the unit cost of the rollators were |||||| and ||||||||||. It was only after the two rounds of discovery that Evolution provided more comprehensive invoices that showed a higher cost per unit.
[69] Second, Evolution says that the materials given after the two examinations for discovery were means to verify the invoices that were disclosed earlier. In effect, they are not “new”. However, EVO 57 to 63—the invoices disclosed before the two rounds of discovery—contain piecemeal information about Fine Faith and would not allow anyone to get a firm picture of the impugned unit price.
[70] Third, Human Care made reasonable efforts to obtain information about the unit price, especially in relation to Fine Faith. Some examples include:
When Mr. Pita was examined in 2015, he confirmed that the unit price was |||||| and |||||||||| respectively. In the exchange, it is easy to see that perhaps Human Care’s counsel, Ms. Wall, was speaking about the price at large and Mr. Pita was just interpreting one invoice (which Evolution claims is the case). Nevertheless, Ms. Wall is assured that this price pertains to “all” rollators. Evolution undertook to advise otherwise if Mr. Pita was wrong.
Human Care’s counsel is assured again that the price is |||||| and |||||||||| during discoveries in December 2015.
[71] It is incorrect to say that Human Care failed to ask about the unit cost. It did so repeatedly in its questioning of Evolution’s witnesses. Rather, Evolution has been unable and/or unwilling to provide such information.
[72] In view of the above three findings, I conclude that Rule 248 prohibits Evolution from relying on information about increased COGS. This Court has recognized that Rule 248 “aims to avoid a party being prejudiced by late disclosure of documents or information and to prohibit ‘trial by ambush’”: Airbus Helicopters, SAS v Bell Helicopter Textron Canada Limitée, 2017 FC 170 at para 18; Apotex Inc v Sanofi Aventis, 2010 FC 481 at para 6. Evolution’s failure to provide timely and complete information has done precisely what the case law warns against— it has prejudiced Human Care’s ability to properly question Evolution’s witnesses. Therefore, I will not consider Evolution’s COGS increases in my assessment.
C. Nonsuit
[73] At the close of Human Care’s case on infringement, Evolution moved for nonsuit on the grounds that Human Care had not met its burden to prove on a balance of probabilities that the Xpresso rollator fell within the scope of the claims of the 392 Patent.
[74] The basis for the allegation was a comparison of the testimony of Dr. Brienza at trial and in his Expert Report through which Evolution concluded that under Dr. Brienza’s interpretation of the 392 Patent the Xpresso rollator did not fall within Claim 16 or 18 because it lacked an essential element: a pivotally connected support to the frame member.
[75] This in turn was based on Dr. Brienza describing the connection of the first and second supports to the first and second frame members in the 392 Patent as being described by a direct connection. This was contrasted with paragraph 40 of Dr. Brienza’s Expert Report where he said the cross braces were connected to the supports and the frame members either directly or indirectly via one or more components such as a hinge or bracket. The conclusion drawn by Evolution was that there was an indirect connection between the supports and the frame members of the Xpresso and, therefore, the Xpresso did not fall within the 392 Patent which required a direct connection.
[76] Human Care responded to the motion whereupon Evolution was put to its election of whether it wished to call evidence which it did.
[77] I pause here to note that the Rules do not provide a process for a nonsuit motion. In Canadian Union of Postal Workers c Canada Post Corporation, 2011 FC 25 Madam Justice Bédard in considering a nonsuit motion reviewed the fact that the Rules of this Court in 1978 addressed the effect of a judgment of nonsuit but the specific rule, Rule 339, was repealed when the 1998 Rules were adopted. Justice Bédard determined, for reasons set out at paragraph 13 of her decision, that the repeal of Rule 339 did not eliminate the pre‑existing right to bring a motion for nonsuit.
[78] The Ontario Court of Appeal has noted that although neither the Courts of Justice Act, RSO 1990, c C 43 nor the Rules of Civil Procedure, RRO 1990, Reg 194 specifically provide for bringing nonsuit motions, the judges have continued to hear such motions: FL Receivables Trust 2002‑A v Cobrand Foods Ltd, 2007 ONCA 425 at para 12 [FL Receivables].
[79] It may well be that nonsuit is available at common law but, it is not necessary to resolve that question as I have determined that if it is available, whether under the Rules or at common law, Evolution has failed to show that there is no case to answer as set out FL Receivables at paragraph 14.
[80] In FL Receivables, Mr. Justice Laskin canvassed the procedure for a nonsuit motion at paragraphs 13, 14 and 35, and commented on the utility of such motion:
[13] Still, I question whether in this province a non‑suit motion in a civil non‑jury trial has much value. In Ontario, when a defendant moves for a non‑suit, the defendant must elect whether to call evidence. See Ontario v. Ontario Public Service Employees Union (OPSEU), [1990] O.J. No. 635, 37 O.A.C. 218 (Div. Ct.), at para. 40. If the defendant elects to call evidence, the judge reserves on the motion until the end of the case. If the defendant elects to call no evidence ‑‑ as Robert Laba elected in this case ‑‑ then the judge rules on the motion immediately after it has been made.
[14] A non‑suit motion adds to the time and expense of a trial. And because of the election requirement, it has little practical value. Perhaps a defendant bringing the motion sees a tactical advantage in being able to argue first. To succeed on the motion, however, the defendant must show that the plaintiff has put forward no case to answer, in most lawsuits an onerous task. Why not simply take on the less onerous task of showing that the plaintiff's claim should fail? It is small wonder that most commentators consider that in civil judge alone trials, non‑suit motions gain little and are becoming obsolete. See Phipson on Evidence, 16th ed. (London: Sweet & Maxwell, 2005) at 274, and John Sopinka, Donald B. Houston & Melanie Sopinka, The Trial of an Action, 2nd ed. (Toronto: Butterworths Canada, 1999) at 151‑52.
[ . . . ]
[35] On a non‑suit motion, the trial judge undertakes a limited inquiry. Two relevant principles that guide this inquiry are these. First, if a plaintiff puts forward some evidence on all elements of its claim, the judge must dismiss the motion. Second, in assessing whether a plaintiff has made out a prima facie case, the judge must assume the evidence to be true and must assign "the most favourable meaning" to evidence capable of giving rise to competing inferences. [ . . . ]
[my emphasis]
[81] Certainly, Human Care put forward more than just “some” evidence on all elements of its claims to show that Evolution had infringed the 392 Patent. On that basis alone, the motion is dismissed.
[82] I would add that the problem with Evolution’s analysis was that the testimony at trial of Dr. Brienza referred to a different element— the connection with the supports—than the reference in his Expert Report— cross braces. Dr. Brienza clearly stated during cross‑examination as to the type of connection between the Xpresso support and frame member that “the Xpresso is directly connected, pivotally— directly pivotally connected to the frame member so it does fall within the construction.” The nonsuit motion can be dismissed on this evidence which I am to assume is true. Attributing the most favourable meaning to that evidence, the Xpresso support is directly connected to the frame member and Evolution has not met its burden of proof.
[83] In the result, the nonsuit motion is dismissed for these reasons.
D. Lane Patent
[84] Human Care objected under Rule 248 to Evolution putting forward evidence through its fact witness Mr. Pita to the effect that the inspiration for the Xpresso rollator came from a 1957 United States Patent 2,810,429 [the Lane Patent]. Human Care says this story of inspiration behind the Xpresso rollator was raised for the first time at this trial despite a long history of litigation including previous discoveries of Mr. Pita regarding the development of the Xpresso rollator.
[85] Human Care first became aware of the Lane Patent when it received Mr. Jonathon Schuch’s Expert Statement dated September 2016 and it was cited as prior art. However, until the opening of trial, Human Care was not aware of the claim that either Mr. Pita or Mr. Liu took the position that the Lane Patent was the inspiration for the Xpresso as described by Mr. Pita in response to a question from counsel for Evolution:
Q. And the folding structure of the Xpresso down here, these cross braces, these come from –
A. Yeah. We tried different things. We tried even, like, the same as a wheelchair. The wheelchairs would cross like that and tubing, and it wasn't strong enough until we came up ‑‑ we saw that this, the design of a wheelchair with a patent from 1957. I think it was called Lane, the fellow who design it, and he had a solid seat in the wheelchair, and it folded. It split in the middle, and it folded like...
Trial Transcript, Vol. 4, P. 729, L 8 – 17.
[86] The basis for the objection, once that testimony was given, is that during discovery on May 20, 2015, Human Care asked Evolution to identify any patents that it was aware of during the development of the Xpresso rollator and to identify any facts relevant to the allegations that the 392 Patent was anticipated and obvious. Evolution did not disclose the Lane Patent in response to those questions.
[87] Evolution argues that it disclosed to Human Care on the first day of discovery that the Xpresso rollator was based on a famous wheelchair as illustrated by the following exchange:
Q. Also on page 2, there's a heading 'Features,' and under that it says cross style, centre folding mechanism for compact storage and transportation. What is meant by that reference to cross style or X style?
A. [By Mr. Pita]…Wheelchairs have an X. For years, they call it, 'This is an X folding,' because they have a frame that is an X like that, so we just borrow that from the wheelchair lingo.
Q. So it's just a reference to the frame under the walker that allows it to fold?
A. Yes. And this is what is an X because the walker opens like this. When you close it, it goes like that. But this is something that is used in every wheelchair. Every wheelchair manufacturer will talk about that.
Q. And that goes back to your earlier reference where wheelchairs have used centre-folding technology for a while.
A. Yes. Many years
Trial Transcript, Vol. 5, P. 873, L. 17-28; P. 874, L. 1-16.
[88] Evolution observes that Human Care posed no follow-up questions to determine whether there was a particular wheelchair design or document that it had considered; nor were there any questions asked that could be properly updated to provide the information. In fact, Evolution says that the answer provided by Mr. Pita was in response to a question about statements on Evolution’s website about the X design.
[89] The question upon which Human Care relies to say that Evolution should have disclosed the Lane Patent was a broad, all‑encompassing one to the effect of “what other facts does Evolution have that the subject matter of the claims other than Claims 16 and 18 were disclosed to the public before either January 13, 2013 or before March 26, 2004.” In other words, the Lane Patent is relevant to obviousness and anticipation, and therefore, it ought to have been answered.
[90] Human Care points out that reference to the Lane Patent did not form part of Evolution’s Affidavit of Documents as of February 6, 2014 or any of the three subsequent affidavits of documents up to August 12, 2016. It was first listed in the Supplemental Affidavit of Documents dated October 31, 2016. The August