E. Mishan & Sons, Inc. v. Supertek Canada Inc.

E. Mishan & Sons, Inc. v. Supertek Canada Inc.
Court (s) Database
Federal Court Decisions
Date
2014-04-07
Neutral citation
2014 FC 326
File numbers
T-1112-13
Decision Content
Date: 20140407
Docket:
T-1112-13
Citation: 2014 FC 326
Toronto, Ontario, April 7, 2014
PRESENT: The Honourable Mr. Justice Hughes
BETWEEN:
E. MISHAN & SONS, INC. AND
BLUE GENTIAN, LLC
Plaintiffs/
Defendants by Counterclaim
and
SUPERTEK CANADA INC., INTERNATIONAL EDGE, INC. AND TELEBRANDS CORP.
Defendants/
Plaintiffs by Counterclaim
REASONS FOR JUDGMENT AND JUDGMENT
[1] This is an action respecting the infringement and validity of some of the claims of Canadian Patent No. 2,779,882 entitled “Expandable and Contractible Hose”. The subject matter is a garden hose which is quite compact when stored, but when water pressure is applied, the hose expands to about two and a half times its length and retracts to its original length when the pressure is removed. This hose has been promoted for sale, particularly through television spot commercials.
[2] For the reasons that follow, I find that the asserted claims of the patent are invalid for obviousness.
[3] I provide the following index to these reasons:
Paragraph Heading
Paragraph Number
THE PARTIES
4 - 8
THE '882 PATENT IN GENERAL
9 - 15
THE ‘882 PATENT IN DETAIL
16 - 27
CLAIMS AT ISSUE
28 - 29
THE WITNESSES
30 - 34
THE DEVICES ALLEGED TO INFRINGE
35 - 36
FOREIGN LITIGATION
37 - 43
MR. BERARDI’S DEVELOPMENTS
44 - 54
OBSERVATIONS AS TO THE FACTUAL WITNESSES AND EVIDENCE
55 - 65
OBSERVATIONS AS TO THE EXPERT WITNESSES AND THEIR EVIDENCE
66 - 73
THE ISSUES
74 - 77
PERSON SKILLED IN THE ART
78 - 81
PRIOR ART BACKGROUND
82 - 91
CONSTRUCTION OF THE CLAIMS
92 - 106
INFRINGEMENT OF CLAIMS 1, 15, 28 AND 42
107 - 117
VALIDITY-GENERALLY
118
VALIDITY – ANTICIPATION HAVNG REGARD TO THE MANY PATENT
119 - 127
VALIDITY – OBVIOUSNESS HAVING REGARD TO THE PRIOR ART AND IN PARTICULAR THE McDONALD PATENT
128 - 145
VALIDITY – CLAIMS BROADER THAN THE INVENTION
146 - 159
RELIEF
160 - 161
COSTS
162 - 163
FURTHER MATTERS
164
THE PARTIES
[4] The Plaintiff E. Mishan & Sons, Inc. is a New York corporation with its principal office located in New York City. It is referred to as “Emson”. Edward (Eddie) Mishan, a principal of that corporation, appeared as a witness at trial.
[5] The Plaintiff Blue Gentian LLC is a limited liability Florida corporation with its principal office located in Jupiter, Florida. The patent at issue was issued and granted to Blue Gentian who remains as the owner of that patent. It is the patentee. Michael Berardi is a principal of Blue Gentian and is the named inventor of the patent. He appeared as a witness at trial.
[6] The Defendant Supertek Canada Inc. is a Canadian corporation with its principal office located in Montreal, Quebec. It sells in Canada “As seen on TV” products such as the hoses at issue.
[7] The Defendant Telebrands Corp. is a New Jersey corporation with a principal office located in Fairfield, New Jersey. It promotes on TV, and the internet, and sells products such as the hoses at issue. Ajit Khubani, a principal of Telebrands, appeared as a witness at trial.
[8] The Defendant International Edge Inc. is a New York corporation with offices at the same place as Telebrands. It is not corporately related to Telebrands but Poonam Khubani, the wife of Ajit Khubani, is the principal of International Edge. It supplies hoses at issue to customers outside the United States such as Supertek.
THE '882 PATENT IN GENERAL
[9] At issue are Canadian Letters Patent No. 2,779,882 entitled “Expandable and Contractible Hose”, which will be referred to as the '882 patent; or simply, the patent. A copy of the patent was entered as Exhibit P-1.
[10] The application for the patent was filed through the provisions of the Patent Co-operation Treaty with an effective filing date in Canada of April 3, 2012. The file history of the patent application was entered as Exhibit P-7. Since the application was filed after October 1, 1989, the provision of the “new” Patent Act, RSC 1985, c.P-4, apply to the patent.
[11] Priority was claimed from an application filed in the United States Patent Office on November 4, 2011; application US13/289,447.
[12] The application for the patent was made available for public inspection (publication date) on August 23, 2012. The patent application as available at that time was entered as Exhibit D-13.
[13] The patent was issued and granted to the Plaintiff Blue Gentian, LLC on May 28, 2013; it names Michael Berardi as the only inventor. Mr. Berardi appeared as a witness at the trial before me.
[14] Unless the patent is held to be invalid by this Court, the term of the patent will expire twenty years from its Canadian filing date; that is, on April 3, 2032.
[15] The '882 patent contains 42 claims; but, by agreement between the parties, only claims 1, 15, 28, and 42 (through 32 back to 28) are at issue here in respect of both validity and infringement.
THE ‘882 PATENT IN DETAIL
[16] The ‘882 patent is entitled “Expandable and Contractible Hose” begins at paragraph 0001 with a statement of the “Field of the Invention”:
[0001] The present invention related to a hose for carrying fluid materials. In particular, a hose that automatically contracts to a contracted state when there is no pressurized fluid within the hose and automatically expands to an extended state when a pressurized fluid is introduced into the hose. In the contracted state the hose is relatively easy to store and easy to handle because of its relative short length and its relative light weight and in the extended state the hose can be located to where ever the fluid it required The hose is comprised of an elastic inner tube and a separate and distinct non-elastic outer tube positioned around the circumference of the inner tube and attached and connected to the inner tube only at both ends and is separated, unattached unbonded and unconnected from the inner tube along the entire length of the hose between the first end and the second end.
[17] At paragraphs 0002 to 0004 the patent provides a “Background of the Invention” in which a number of problems with current hoses are set out: hoses must be wrapped or coiled when not in use; fire hoses and the like can be stored flat but are impractical for homeowners. A solution is promised at paragraph 0004.
BACKGROUND OF THE INVENTION
[0002] Hoses which are used to carry various fluids are known in the art. One of the problems encountered with these hoses is storage of the hose when it is not being used to transport the fluids. While current hoses are flexible and can be wrapped around a cylinder or drum for storage and transport, the length and width of the hose cannot be reduced. Another problem encountered with wrapped or coiled hoses is that they tend to kink when unwrapped or uncoiled. This problem is usually encountered by the average homeowner when using a garden hose to water their grass, plants, or wash their vehicles.
[003] Firefighters have a solution to the kinking problem. The hoses that they use collapse into a relatively flat state when the fluids are removed from the hoses. The hoses are then stored in layers which are formed by the hose being laid back and forth upon itself. When the firefighters use the hoses stored like this, they only have to pull at one end of the hose and it unfolds in a straight line without kinking. This is not a practical solution to a homeowner’s problem of the hose storage because garden hoses are relatively small in diameter, compared to fire hoses, and almost all garden hoses do not collapse into a flat condition when the water is emptied from the hose. Another problem with hoses known in the art is that they are heavy bulky and difficult to unravel when lying on the ground and also difficult to handle and drag around to the place where the fluid is needed both when they are filled with a fluid and are equally as difficult to handle and drag around when they are empty and needing to be returned to there original place of storage. Also, if the user does not have a device for winding the hose then he must try to place the hose on the ground in a way as to not entangle the hose within itself because if the hose does become entangled within itself this makes it difficult and frustrating to unravel the hose the next time the hose is used.
[0004] Therefore, what is needed in the art is a hose that can be automatically contracted and reduced in length when not in use, and automatically expanded and extended to a length which is practical for use, and automatically returned to the reduced length when not in use. Also, a hose which is relatively light in weight will not kink when taken from storage and filled with fluid for use.
[18] From paragraphs 0005 to 00029 the patent lists some twenty-five prior patents providing a brief description as to each. A booklet containing all of the patents in full was filed in evidence at trial as Exhibit D-21. These patents describe a variety of hoses used to transport water, air and even gasoline. One of them, Ragner 6,948,527 is relied upon by the Defendants in arguing invalidity. Two other patents relied on by the Defendants, Many 1,220,661, and McDonald 6,948,527 are not listed. We do not know how the patents listed were located or by whom. Berardi, the named inventor, gave evidence that he did a prior art search before he turned the matter over to the patent attorney but we do not know if this list is the result of his search or otherwise. At paragraph 0065 the patent states that these patents are “indicative” of the prior art:
[0065] All patents and publications mentioned in this specification are indicative of the levels of those skilled in the art which the invention pertains.
[19] At paragraphs 0030 to 0037 a “Summary of the Invention” is provided. I reproduce paragraph 0030:
SUMMARY OF THE INVENTION
[0030] A hose which automatically expands longitudinally and automatically expands laterally upon the application of a fluid pressure within the hose is disclosed. The hose can automatically expand longitudinally up to six times its unexpanded or contracted length and can automatically expand laterally up to six times its unexpanded width. Upon release of the fluid pressure within the hose, the hose will automatically contract to a contracted condition. The hose includes an expandable inner tube made from an elastic material and a separate, distinct outer tube made from a non-elastic material, positioned around the outer circumference and length of the inner tube and secured to the inner tube only at first and second end and is unattached, unconnected, unbonded, and unsecured to the inner tube along the entire length of the inner tube between the first and the second end and is able to move freely with respect to the inner tube along the entire length of the inner tube between the first end and the second end.
[20] The drawings, Figures 1 through 8 are identified at paragraphs 0038 through 0045 and can be found at the last several pages of the patent.
[21] Commencing at paragraph 0046 through to paragraph 0063 a detailed description is provided for a hose. The experts seem to agree that the description is adequate such that a hose of this type can be constructed. However the patent makes it clear at paragraphs 0037, 0046 and 0066 and 0067 that the description is not intended to be limiting and that changes can be made. I repeat those paragraphs:
[0037] Other objects and advantages of this invention will become apparent from the following description taken in conjunction with any accompanying drawings wherein are set forth, by way of illustration and example, certain embodiments of this invention. Any drawings contained herein constitute a part of this specification and include exemplary embodiments of the present invention and illustrate various objects and features thereof.
…
DETAILED DESCRIPTION OF THE INVENTION
[0046] While the present invention is susceptible of embodiment in various forms, there is shown in the drawings and will hereinafter be described a presently preferred, albeit not limiting, embodiment with the understanding that the present disclosure is to be considered an exemplification of the present invention and is not intended to limit the invention to the specific embodiments illustrated.
…
[0066] It is to be understood that while a certain form of the invention is illustrated, it is not to be limited to the specific form or arrangement herein described and shown. It will be apparent to those skilled in the art that various changes may be made without departing from the scope of the invention.
[0067] One skilled in the art will readily appreciate that the present invention is well adapted to carry out the objectives and obtain the ends and advantages mentioned, as well as those inherent therein. The embodiments, methods, procedures and techniques described herein are presently representative of the preferred embodiments, are intended to be exemplary and are not intended as limitations on the scope. Changes therein and other uses will occur to those skilled in the art which are encompassed within the invention and are defined by the scope of the appended claims. Indeed, various modifications of the described modes for carrying out the invention which are obvious to those skilled in the art are intended to be within the scope of the following claims.
[22] Two particular comments have to be made in respect of the description given in the ‘882 patent. One has to do with the restrictor the other has to do with fluid.
[23] The evidence of the experts all is that certain pressure level must be maintained in the hose so that the hose remains in an expanded state when in use.
[24] The evidence is that, without any restriction at the end of the hose there would be insufficient pressure as to retain the hose in its expanded state. Fluid, such as water entering the hose from a faucet outside the house generally emerges at about 60 psig and falls off to zero psig at the end of a hose without restriction. A nozzle is one kind of restriction, depending on the flow through the nozzle a certain level of pressure is maintained in the hose at or near the nozzle so as to maintain the hose in an expanded state. As the nozzle is opened under the pressure so maintained drops.
[25] The restrictor is described at paragraph 0054 of the patent as anything that restricts the flow of the fluid within the hose:
A separate flow restrictor 37 is illustrated with coupler 16. Other types of flow restrictors, such as hose nozzles, sprayers, etc. can also be employed. Anything that restricts the flow of the fluid within the hose can be employed.
[26] The other matter that must be mentioned is the use of the word “fluid” in the patent. While the claims at issue are confined to water, the patent makes it clear that what is being described is a hose that can carry a broad range of fluids. At paragraph 0064 the patent makes this clear:
[0064] The preferred embodiment of the present invention utilizes water to fill and expand the hose 10. However, other fluids can also be employed with the present invention. For example gases can be introduced into and transported through the hose 10. Liquids, which are not corrosive to the inner tube 14 can also be employed in the present invention. Flowable semisolids can also be employed with the present invention. The temperatures of the fluids employed in the present invention are lower than temperatures which will alter the physical and chemical properties of the materials used in the hose of the present invention. Also, because the inner tube is elastic is can expand if the water within the tube freezes. For example, if a garden hose of the present invention were left outside in the winter, the water contained therein would freeze. Normal garden hoses would split, but the present invention would expand when the water turns to ice because the inner tube is elastic.
[27] In summary, while the patent particularly describes a garden hose carrying water, the description is at pains to state that other fluids such as “gases” can be equally used and that “anything” that serves to restrict can be used. The patent is at pains to say that the description provided is illustrative and that a “person skilled in the art” can make “various changes” without departing from the scope of the invention.
CLAIMS AT ISSUE
[28] Claims 1, 15, 28, and 42 (through 32 back to 28) of the ‘882 patent read as follows:
Claim 1. A water hose comprising:
A flexible elongated outer tube constructed from a fabric material having a first end and a second end, an interior of said outer tube being substantially hollow;
A flexible elongated inner tube having a first end and a second end, an interior of said inner tube being substantially hollow, said inner tube being formed of an elastic material;
A first coupler secured to said first end of said inner and outer tubes;
A second coupler secured to said second end of said inner and said outer tubes with the inner and outer tubes unsecured to each other between first and second ends; and
Said first coupler fluidly coupling said hose to a source of pressurized water, said second coupler coupling said hose to a water flow restrictor,
Whereby said water flow restrictor creates an increase in water pressure between said first coupler and said second coupler within said hose, said increase in water pressure expands said elongated inner tube longitudinally along a length of said inner tube and laterally across a width of said inner tube thereby increasing a length of said hose to an expanded condition and said hose contracting to a substantially decreased or relaxed length when there is a decrease in water pressure between said first coupler and said second coupler.
…
Claim 15. The water hose of any one of claims 1 to 14 wherein said hose is a garden hose.
…
Claim 28. A water hose assembly comprising: an outer tube assembly formed from a soft nonelastic based control material housing an inner tube member constructed from a elastic based material, said outer tube assembly and said inner tube member each having a first end attached together by a first coupler and a second end attached together with a second coupler; whereby said outer tube assembly and said inner tube member have a substantially shortened first length in a non-water flow contracted state with said outer tube assembly extending about an outer surface of said inner member in a undulating state and a substantially longer second length with said outer tube assembly capturing said inner tube member in an expanded state upon the application of water pressure to the interior of the elastic inner tube.
…
Claim 32. The water hose assembly according to any of Claims 28 to 31 wherein said second coupler is a male hose connector attached to said outlet of said inner tube member and said second end of said outer tube assembly, said male hose connector available for attachment to a water flow restrictor.
…
Claim 42. The water hose assembly of any one of claims 28 to 41 wherein a water flow restrictor is placed within said male coupling whereby attaching said hose assembly in a contracted state to pressurized water allows water to flow through said inlet to said outlet, said water flow restrictor creating an increase in water pressure causing an expansion of said inner tube member thereby extending said outer tube to said expanded state as allowed by said control material.
[29] Claim 42 is written in dependent form such that it incorporates the wording of some of the earlier claims. The Plaintiffs are relying upon claim 42 as it depends on claim 32 which in turn depends on claim 28. The Defendants are attacking the validity of the claim as so written. Claim 42 as it depends on claim 32 as it depends on claim 28 can be written as follows:
Claim 42. A water hose assembly comprising: an outer tube assembly formed from a soft nonelastic based control material housing an inner tube member constructed from an elastic based material, said outer tube assembly and said inner tube member each having a first end attached together by a first coupler and a second end attached together with a second coupler wherein said second coupler is a male hose connector attached to said outlet of said inner tube member and said second end of said outer tube assembly wherein a water flow restrictor is placed within said male coupling whereby attaching said hose assembly in a contracted state to pressurized water allows water to flow through said inlet to said outlet, said water flow restrictor creating an increase in water pressure causing an expansion of said inner tube member thereby extending said outer tube to said expanded state as allowed by said control material.
THE WITNESSES
[30] The Plaintiffs called the evidence of two fact witnesses and one expert witness, all of whom appeared in person and were cross-examined. Called as fact witnesses were:
1. Edward (Eddie) Mishan, of New York. He is a principal of the Plaintiff E. Mishan and testified as to telemarketing practices of that company and, in particular, as to the development, sales and marketing of a product called X HOSE and X HOSE PRO, said to embody the features of the ‘882 patent. His evidence also was directed to the commercial success of those products and the impact on the sales and marketing of those products by the Defendants’ products at issue.
2. Michael Berardi, of Jupiter, Florida. He is the named inventor in the ‘882 patent and a principal of the Plaintiff Blue Gentian. He gave evidence as to his development of what is described in the ‘882 patent, his assignment of the patent rights to Blue Gentian, and licensing of rights to National Express. He also testified as to the impact on him and his wife of the sales and marketing of the Defendants’ products at issue.
[31] Called as an expert witnesses for the Plaintiffs was:
1. Tom (Tommi) L. Kuutti, of West Palm Beach, Florida. He provided a report as to infringement of the patent, Exhibit P-16; and another as to validity of the patent; Exhibit P-51; and testified as to those matters including the drawing of a diagram depicting water pressure in a hose (Exhibit P-17).
[32] Defendants called one fact witness and two expert witnesses, all of whom appeared in person and were cross-examined. Called as a fact witness was:
1. Ajit Khubani, of Fairfield, New Jersey. He is the CEO, President and sole owner of the Defendant Telebrands Corp. He testified generally as to the telemarketing practices of that company and, in particular, as to the development, marketing and sales of the Pocket Hose products at issue.
[33] Called as expert witnesses for the Defendant were:
1. Dr. Ken (Kenneth) Kamrin, of Cambridge, Massachusetts. He is an assistant professor in the mechanical engineering department at Massachusetts Institute of Technology (MIT). He provided a report as to validity of the patent, Exhibit D-41; and another as to infringement of the patent; Exhibit D-42; and testified as to those matters including the drawing of a diagram depicting a regulator (Exhibit D-43).
2. Steve Haubert, of Sylvania, Ohio. He is a consultant in the field of hoses. He provided a report as to validity of the patent; Exhibit D-44; and another as to infringement of the patent; Exhibit D-45; and testified as to those matters.
[34] The Plaintiffs entered into evidence portions of the transcripts of their examination for discovery of each of the Defendants, Exhibits P-8 to P-12. The Defendants entered into evidence portions of their examination for discovery of each of the Plaintiffs, Exhibits D-46 to D-50.
THE DEVICES ALLEGED TO INFRINGE
[35] Four devices as marketed and sold by the Defendants were alleged to infringe the claims at issue of the '882 patent. They are identified as:
• Pocket Hose-typified by Exhibit P-3 and P-15
• Pocket Hose Ultra-typified by Exhibit P-4
• Deluxe Pocket Hose-typified by Exhibit P-5
• Magic Hose-typified by Exhibit P-6
[36] The Plaintiffs seek injunctive relief in respect of all hoses except the Magic Hose, which was discontinued from sale before the ‘882 patent issued. The Plaintiffs seek reasonable compensation with respect to the Magic Hose, and such of the Pocket Hoses as were sold in Canada before the patent issued. The Plaintiffs seek damages or profits in respect of all of the above hoses as were sold after the patent was granted, as well as delivery up of any such hoses still in the Defendants’ possession in Canada as of the date of Judgement. They also seek solicitor-client costs.
FOREIGN LITIGATION
[37] There has been litigation in countries other than Canada involving patents that are, in some ways, similar to the Canadian patent at issue here. I am informed that such litigation is ongoing in at least the United Kingdom, Australia, France and the United States.
[38] Proceedings in the United Kingdom are at the stage where a decision has been given by Justice Birss of the High Court of Justice, Chancery Division, Patents Court in a case between Blue Gentian LLC and E. Mishan & Sons, Inc v Tristar Products (UK) Limited and Tristar Products Inc., dated December 20, 2013, neutral citation [2013] EWHC 4098 (Pat). I am advised by Counsel that leave to appeal is being sought.
[39] The United Kingdom decision was concerned with United Kingdom patent 2,490,276 (Exhibit D-14). That patent is similar to, but not identical with, the '882 patent at issue here. The United Kingdom patent seems to be a later version of a patent since it also claims priority from not only the same United States patent application as does the '882 patent, but also from a subsequent United States patent application. There are additional drawings in the United Kingdom patent; the text is somewhat different, as are the claims.
[40] The defendants in the United Kingdom proceedings are different from, and not related to, the Defendants in this action. The alleged infringing product in those proceedings is known as Flex Able Hose (Exhibit P-27) which is not quite the same as the allegedly infringing products at issue here. None of the witnesses in those proceedings were the same as those before me.
[41] Having said all that, the United Kingdom product at issue and patent are very similar to the products and patent at issue here. The main issue that Justice Birss had to come to grips with was that of novelty and obviousness having regard to prior art; principally, Ragner and McDonald, which are two of the principal pieces of prior art asserted in this Canadian action.
[42] I am advised that, in Australia, there has been a trial, but no decision has yet been given. The proceedings in France and the United States have yet to go to trial.
[43] I will give my decision having regard to the evidence before me, the Canadian patent before me, the products before me and the law in Canada as I understand it.
MR. BERARDI’S DEVELOPMENTS
[44] Michael Berardi, the person named as inventor in the '882 patent and a principal of Blue Gentian - one of the Plaintiffs - gave evidence as to how he developed the expandable hose at issue here.
[45] He has an eclectic background. He grew up in New Jersey, where he worked in his father’s hardware store, and undoubtedly gained knowledge about things sold in such stores; including hoses. He graduated with a BA from a local university and soon found himself in the music business. His involvement in that business ultimately led him to produce music videos, and that ultimately led him to produce what we call infomercials; the television advertisements where gadgets and other products are touted and offered for sale.
[46] Berardi was living in Florida when, in 2011, he was approached by business people from Las Vegas who were seeking to involve him both as a promoter and possible financer for an expandable hose product of the type described in a patent - which forms part of the prior art here - called Ragner. Ragner himself was part of the group who approached Berardi.
[47] The Ragner product, called “Micro Hose” was, in simple terms, a lightweight hose formed with a coiled spring along the length; such that, when water pressure was applied, the spring would stretch and the hose would substantially expand in length and retract to its original length when the pressure was turned off. A video showing the Ragner “Micro Hose” and its operation was shown in Court: Exhibit D-30.
[48] Berardi was intrigued by the concept of a lightweight, expandable garden hose, but determined that expensive, sophisticated equipment would be needed to make the Micro Hose, and that the hose would be so expensive to make that, it could not be readily sold in the “infomercial” market. He set out to make a less expensive, easier to produce, expandable hose.
[49] While working out at a local gym, Berardi observed equipment used in certain exercises. That equipment had grips joined by flexible rubber tubes and webbing. It struck Berardi that such materials may make a useful hose.
[50] Berardi, being in the business of making TV videos, recorded his development of the hose at issue using a handheld tablet camera operated by his wife. Several hours of video were taken. In Court, an edited version of the video recordings, about thirteen minutes long, was shown (Exhibit P-31). In cross-examination, two other brief excerpts were shown (Exhibits D-32 and D-33). Mr. Berardi’s voice, and that of his wife, can be heard on the videos. Mr. Berardi provided further comments as to what was shown in the videos in his evidence in Court.
[51] In late August or September 2011, having seen the Ragner Micro Hose, and having concluded that no deal could be reached with the Ragner group, Berardi went to a local hardware store and purchased items including: hose fittings, flat tubular webbing, and round rubber tubing. He experimented with various ways of making a hose; including, having water pass through the webbing, and using the rubber tubing just as an elastic device and not to transport water, or using a garden “soaker” hose as the outer tubing.
[52] In early November 2011, Berardi settled on a combination of elements whereby water from a source such as a faucet outside a house passed through the inner rubber tube which expanded under the pressure of the water, but was constrained in its outward and lineal expansion by a hollow outer webbing in which the rubber tube was situated. The rubber tube and web were attached only at their ends. Suitable fittings were provided to attach the hose at one end to a faucet and at the other end to a device such as a nozzle. A restrictor at the outlet end of the hose was necessary to maintain sufficient pressure within the hose while water was flowing through it so as to keep the hose extended. When the water was turned off the hose contracted to its original size.
[53] Berardi did some kind of a preliminary search on the internet to determine what prior art existed; then went to a local patent attorney who prepared patent applications; resulting in, among other things, the patent at issue.
[54] Berardi assigned his patent rights to his company, Blue Gentian, and sought to exploit those rights. Blue Gentian licensed at least some of those patent rights to a company called National Express, Inc. The evidence of Eddie Mishan is that the Plaintiff Emson obtained at least some of those patent rights by way of a sub-licence from National Express.
OBSERVATIONS AS TO THE FACTUAL WITNESSES AND EVIDENCE
[55] Michael Berardi is the person named as the inventor of the '882 patent. He struck me as an honest, straightforward person. He is not a sophisticated scientist; he is more of a home handyman, having gained experience working in his father’s hardware store.
[56] He came to his development of the hose in question in what might be described as a grass-roots way. He saw the Ragner hose (called Micro Hose), which was lightweight, expanded when water pressure was applied, and contracted when the pressure was removed. It was too complex and expensive to make, so Berardi set about to make a cheaper and simpler one; inspired some degree by a piece of gym equipment he used from time to time. He succeeded. The hose he developed filled a particular marketing niche; it was cheap; it was intriguing; it worked in a gimmicky way. It has been a huge success.
[57] No doubt, subjectively in Berardi’s mind, it was new and inventive. The question before me is different. The question that I have to resolve is whether the patent (not the product) is a good one; and whether, viewed objectively, the patent describes and claims a new, non-obvious invention in accordance with Canadian law.
[58] Berardi testified that he first learned of the Defendants’ hose products when he and his wife were at a pub in Florida and saw an infomercial for Pocket Hose on TV. They were devastated. His wife is still very upset. Blue Gentian claims that it has lost royalty income since the Defendants’ sales are unlicensed and take away sales from Emson, its licensee.
[59] Eddie Mishan and Ajit Khubani are the principal owners of two rival organizations, Emson and Telebrands; both in the direct retail business. They sell products directly to consumers through television infomercials and the internet. A lesser part of their business is the sale of those products to retailers, who in turn, sell them to the public. It is a very successful business for each of these companies. These companies sell vast quantities of merchandise and receive very large income. There is skill involved in selecting the right product to sell. There is skill in preparing the infomercial and other advertising. There is skill in presenting the right sort of offer (e.g. if you buy now, you receive two items for the price of one, plus a gadget); and skill in presenting a product at the right price point. These skills do not depend upon the patentability of the product, although words like “patented” or “new” or “revolutionary” may be part of the surrounding hype used in promoting the product. Khubani gave evidence as to products such as amber sunglasses and, dust mops that were old products, but were successfully hyped and sold through telemarketing.
[60] Emson sells products called XHose and XHose Pro under its licence from National Express which, in turn, is licenced by Blue Gentian. Emson claims damages through the loss of sales taken away by the Defendants products at issue and related losses.
[61] Mishan testified that he had been approached by representatives of Supertek to inquire as to whether they could do a deal so that Supertek could sell the hose in Canada. No deal was made.
[62] Khubani testified that the life span of products sold by telemarketing was up to about two years. He identified a hose product call Roll a Hose, Exhibit 35 which Telebrands had sold by telemarketing several years ago and had discontinued. That hose was constructed with a rubber inner tube and a fabric outer tube connected together only at the ends. The tube was flat when there was no water pressure applied. It expanded radially but not longitudinally when water pressure was applied. The hose wound flat in a reel provided with the hose.
[63] Telebrands next made a deal with Ragner (Microhose) to market the Ragner (Micro Hose) product. Telebrands did not proceed to do so; instead, it proceeded to have made for it and sell the Pocket Hose products at issue.
[64] Telebrands sells its Pocket Hose products directly to consumers through infomercials on television and the internet. Those infomercials originate in the United States but are seen by some Canadians who purchase the product directly from Telebrands. Sales to retailers outside the United States are made by International Edge which purchases the product from Telebrands and resells it to non-United States distributors. Supertek is one such customer of International Edge, it purchases the hose products from International Edge and resells them to Canadian retailers such as Home Depot.
[65] I do not need to comment as to the credibility of the witnesses Khubani or Mishan. They were both cross-examined in some instances in ways in which it was endeavoured to lessen their credibility. In certain instances, I found their answers to be evasive or non-responsive. This is immaterial to the questions that I have to address here.
OBSERVATIONS AS TO THE EXPERT WITNESSES AND THEIR EVIDENCE
[66] Three expert witnesses gave evidence at trial, Kuutti for the Plaintiffs, Kamrin and Haubert for the Defendants. Their evidence largely covered the same subjects directed to the validity and infringements of the claims at issue of the ‘882 patent. The parties each provided a stipulation as to the field of expertise of the witnesses they put forth.
[67] The Plaintiffs proposed the following stipulation as to the expertise of Kuutti:
Tom Kuutti has experience and expertise in aerospace engineering and mechanics, and mechanical engineering, including the design and manufacture of products, systems and devices that are mechanical in nature. He also has experience with high reliability application systems and with devices that control pressure, temperature and flow of liquids and air.
[68] The Defendants proposed the following stipulation as to the expertise of Kamrin:
Ken Kamrin is an expert in fluid and solid mechanics including the way fluid materials flow through a hose and the effects of that flow on the materials used to construct the hose.
[69] The Defendants proposed the following stipulation as to the expertise of Haubert:
Steven Haubert is an expert in the field of hoses, including their design, manufacture, testing and uses for hoses.
[70] I find each of the above stipulations to be appropriate however I clearly find that the witness Haubert has the expertise that is most pertinent to the issues that I have to decide.
[71] Tom Kuutti is what could be described as a “bricoleur” or jack of many trades. He runs a business that designs and manufactures many different pieces of apparatus. However his experience with hoses is limited. For the most part I accept his evidence except his evidence respecting the ‘882 patent invention restricting it only to water, I disagree, and his evidence as to an air flow regulator, such as shown in the McDonald patent in respect of which he says it is not a restrictor; I am satisfied that it serves the same function as the restrictor in the ‘882 patent hose.
[72] Dr. Kamrin is an academic; he has no practical experience with hoses. He is undoubtedly very clever. He gave good evidence as to the basics of fluid flow and his explanation as to the operation of a regulator, illustrated by Exhibit 43, I accept. With respect to his interpretation of the claims at issue I have difficulty. It was too forced, too much of an endeavour to find problems rather than endeavouring to understand the patent and claims in an understanding way.
[73] Haubert has been in the hose business throughout his working career. He knows hoses. He gave his evidence thoughtfully, simply and directly. He was prepared to concede points against the interests of the Defendants where it was evident that he should do so. I rely most heavily on his evidence and, where it conflicts with the evidence of the other experts, I prefer his evidence unless I state otherwise.
THE ISSUES
[74] The pleadings raise several issues including infringement and validity of the ‘882 patent, infringement and validity of Canadian Registered Design 146676 (the ‘676 Design), false and misleading statements under the provisions of section 7(a) of the Trade-Marks Act, RSC 1985, c. T-13 and sections 36 and 52 of the Competition Act, RSC 1985, c. C-34.
[75] By a Bifurcation Order of Prothonotary Aalto dated January 20, 2014 certain matters were bifurcated such that the trial before me dealt only with issues respecting the validity and infringement of the ‘882 patent, remedies