Airbus Helicopters, S.A.S. v. Bell Helicopter Textron Canada Limitée

Airbus Helicopters, S.A.S. v. Bell Helicopter Textron Canada Limitée
Court (s) Database
Federal Court Decisions
Date
2017-03-02
Neutral citation
2017 FC 170
File numbers
T-737-08
Notes
A correction was made on May 18th 2017
Decision Content
Date: 20170302
Docket: T-737-08
Citation: 2017 FC 170
Ottawa, Ontario, March 2, 2017
PRESENT: The Honourable Mr. Justice Martineau
BETWEEN:
AIRBUS HELICOPTERS, S.A.S.
Plaintiff/
Defendant by Counterclaim
and
BELL HELICOPTER TEXTRON CANADA LIMITÉE
Defendant/
Plaintiff by Counterclaim
PUBLIC JUDGMENT AND REASONS
(Confidential Judgment and Reasons originally issued on February 10,2017 and
Amended Confidential Judgment and Reasons issued on March 2, 2017)
[1] This Court is asked to determine the quantum of damages to be awarded to the plaintiff, Airbus Helicopters, S.A.S. [Airbus], as a result of the defendant, Bell Helicopter Textron Canada Limitée [Bell], having infringed the Canadian Patent No. 2,207,787 [‘787 Patent] which relates to a helicopter equipped with a skid-type landing gear: Eurocopter v Bell Helicopter Textron Canada Limitée, 2012 FC 113, [2012] FCJ No 107 [2012 FC Judgment]; aff’d 2013 FCA 219, [2013] FCJ No 1043 [2013 FCA Judgment].
[2] For the reasons that follow, the defendant is ordered to pay to the plaintiff the sum of $1,500,000 comprised of $500,000 in compensatory damages and $1,000,000 in punitive damages, plus pre-judgment and post-judgment interest, all with costs [Final Judgment].
I. THE ‘787 PATENT [3] The ‘787 Patent, entitled “Train d’atterrissage à patins pour hélicoptère” (skid-type landing gear for helicopter) was issued on December 31, 2002 to Eurocopter after an application filed on June 5, 1997, claiming priority based on French Patent application No. 96 07158, filed in France on June 10, 1996 [French Patent]. Although not referred to as such in the ‘787 Patent, the disclosed invention has been known colloquially, in French, as the “train à moustache” and it is designated in English as the “Moustache” landing gear [Moustache gear].
[4] The ‘787 Patent is comprised of 16 claims. Claim 1 is the sole independent claim; claims 2 to 16 are dependent claims. For ease of reference, claims 1 to 16 are reproduced below [translation]:
1. Helicopter landing gear, comprising two skids each having a longitudinal ground support surface and connected to a front cross piece and a rear cross piece which are themselves attached to the structure of the helicopter by connecting devices, the rear cross piece being attached by the ends of its descending branches to the rear part of said longitudinal support surfaces, characterized in that each of said skids has at the front an inclined transition zone with double curvature orienting itself transversely in relation to said longitudinal ground support surfaces, above the plane of the latter, the two transition zones together constituting, in this way, an integrated front cross piece, offset in relation to the front delimitation of the plane of contact of the longitudinal support surfaces of the skids on the ground.
2. Landing gear according to claim 1, characterized in that the assembly of skids and cross pieces is made of aluminium tubes.
3. Landing gear according to claim 2, wherein the aluminium of said tubes is characterized by a limit equal to approximately 75% of the fracture strength, and by a relative elongation at fracture at least equal to 12%.
4. Landing gear according to claim 2 or 3, characterized in that the wall thickness of the tubes making up said front and rear cross pieces is degressive between the central part of the cross piece and its junction with the corresponding skid.
5. Landing gear according to any of claims 1 to 4, characterized in that the ends of the descending branches of the rear cross piece are attached to said longitudinal support surfaces of the skids by means of aluminium couplings.
6. Landing gear according to any claims 1 to 5, characterized in that the said front cross piece consists of two half-branches interconnected towards the middle of said front cross piece by a removable junction means and establishing continuity of said front cross piece in bending.
7. Landing gear according to any of claims 1 to 5, characterized in that said front cross piece consists of a single branch whose ends are each connected by a removable junction means to the front part of the corresponding skid, said junction means being arranged between the two curves of the transition zone in question.
8. Landing gear according to claim 6 or 7, characterized in that said junction means consist of a screwed coupling system made of aluminium, or of an attachment collar.
9. Landing gear according to any claims 1 to 8, characterized in that said connecting devices between said front and rear cross pieces and the structure of the helicopter are of the type with controlled friction in rotation, comprising for this purpose two half-collars or similar devices surrounding the tube of the cross piece, with the interposition of a bearing made of elastic metal of the elastomer type.
10. Landing gear according to any of claims 1 to 9, characterized in that it includes at least three devices for connection to the structure of the helicopter, one of them being attached centrally to one of said cross pieces and the other two being attached, while being mutually spaced on either side of the longitudinal axis of the gear, to the other cross piece.
11. Landing gear according to any of claims 1 to 9, characterized in that it includes four devices for connection to the structure of the helicopter, two of them being attached to one and two to the other of the cross pieces, and being mutually spaced on either side of the longitudinal axis of the gear.
12. Landing gear according to claim 11, characterized in that the front or rear cross piece had, between two sections of cross piece, a gap in its central part, and wherein said devices for connection to the structure of the helicopter are attached as articulations with elastic return to the ends of said sections.
13. Landing gear according to any of claims 1 to 12, characterized in that said rear cross piece consists, for its front part, of a bent tube having an aerodynamic profile forming a leading edge, this tube being extended towards the rear by an added fairing forming a trailing edge.
14. Landing gear according to any claims 1 to 13, characterized in that steps are attached to said inclined transition zones at the front of the skids, below the access doors to the cabin, three steps starting from said transition zones and extending only towards the rear.
15. Landing gear according to any claims 1 to 14, characterized in that said integrated front cross piece is offset forwards in relation to the front delimitation of the plane of contact of the longitudinal support surfaces of the skids on the ground.
16. Landing gear according to any of claims 1 to 14, characterized in that said integrated front cross piece is offset backwards in relation to the front delimitation of the plane of contact of the longitudinal support surfaces of the skids on the ground.
[5] The ‘787 Patent will expire on June 5, 2017. Airbus is the present owner of the ‘787 Patent, as well as of the French Patent, and the counterpart US Patent No. 5,860,621 [US Patent], all of which contain substantially identical disclosures and similar claim language.
II. CONFIDENTIALITY ORDER [6] A substantial part of the voluminous documentary evidence in the present matter is Confidential and/or Counsel’s Eyes Only information. Upon the consent of the parties, on March 10, 2016, the Court issued an Amended Confidentiality Order which replaces the orders of this Court dated December 29, 2008 and November 9, 2009.
[7] Pursuant to paragraph 4 of the Amended Confidentiality Order, the following information in the quantification of damages phase of the proceeding and at the continuation of the trial constitutes “Confidential Information”:
• Confidential information relating to particular specifications and particular manufacturing details for the manufacture of helicopters (including helicopter landing gear) of the parties;
• Confidential information relating to regulatory approval of helicopters (including helicopter landing gear);
• Confidential information relating to research and development with respect to the subject matter of the ‘787 Patent, including but not limited to notebooks, laboratory journals, process flow charts, testing data, analytical results, graphs, print-outs, experimental protocols, memoranda, minutes and notes; and
• Confidential information relating to marketing, operational manufacturing, sales or financial information relating to Airbus Helicopters or Bell Helicopter, their parents and their affiliated companies.
[8] Upon considering that the present Judgment may contain information that is “Confidential Information” and/or “Counsel’s Eyes Only Information” under the terms of the Amended Confidentiality Order, prior to the issuance of the Final Judgment, the Court has sought the parties’ input with respect to the proposed modalities of a Direction regarding the confidentiality character of the Final Judgment. Upon considering the parties’ representations, the Court has directed that the Final Judgment be treated as Confidential Information, which may only be disclosed to the persons, firms, and individuals mentioned in paragraph 16 of the Amended Confidentiality Order. Moreover, a public version of the Final Judgment shall be issued in the delay mentioned in the Direction once the Court has received the parties’ proposed redactions or amendments, as the case may be.
[8a] The Confidential Reasons for Judgment were released on February 10, 2017 [Reasons]. Upon release, the Court issued a Direction to the parties, inviting them to make submissions on proposed redactions or amendments that should be made before the Reasons are released publicly.
[8b] On February 24, 2017, the plaintiff informed the Court that it did not wish to redact any part of the Reasons.
[8c] On February 24, 2017, the defendant proposed a number of redactions (Schedule A to Bell Helicopter Textron Canada Limitée’s Response to the Direction of the Honourable Mr. Justice Martineau dated February 10, 2017).
[8d] This Court is satisfied that the defendant’s proposed redactions with respect to sensitive commercial information mentioned in paragraphs 69, 137, 161, 163, 195, 200, 206, 236, 265, 305, 306, 309, 316, 326, 332, 336, 337, 360 and 362 are reasonable and has accepted that all of them should be incorporated into the Public Reasons and Judgment. Indeed, the Court is satisfied that the risk for the defendant of the release of this sensitive commercial information outweighs any public interest in having access to that information. Moreover, even with the redactions, a reader is able to understand the nature of the evidence and the reasoning applied to reach the relevant finding. The defendant has also brought to the attention of the Court two clerical errors in paragraphs 178 and 423 that have been corrected.
III. BACKGROUND [9] The background to the litigation is already public and to the judicial knowledge of the Court – since this is a continuation of the trial that was conducted in 2011 and 2012 before the undersigned as the trial judge. The pertinent facts are extensively set out in the 464 paragraphs of the 2012 FC Judgment and need not be repeated here, except to simply highlight some salient aspects which are mentioned in the 2012 FC Judgment and/or in the Agreed Statement of Facts and Admissions of the parties dated January 14, 2011 [Agreed Statement of Facts].
[10] Bell began development of the Bell 429 helicopter in the third calendar quarter of 2004. It was then equipped with the Original/Legacy Landing Gear [Legacy gear] (Agreed Statement of Facts at para 21). While it was known to Bell that the Legacy gear closely resembled the Moustache gear, when concerns were raised at the time, Mr. Malcolm Foster, who was responsible of the program, advised Bell’s engineers to “carry on” (2012 FC Judgment at para 274). He was not called as a witness to either confirm or deny this statement. Bell simply decided to continue with the Legacy gear.
[11] The Legacy gear and its components are faithfully represented for the purpose of this litigation in exhibits JB-216/Confidential and JB-271/Confidential (Agreement Statement of Facts at para 22). An isometric view of the Legacy gear, which is made of aluminium, is reproduced below:
[12] The Legacy gear was publicly displayed for the first time at the Seoul Air Show in Korea in October 2005 (Agreed Statement of Facts at para 33, item 16).
[13] Twenty-one Legacy gears were manufactured by Aeronautical Accessories Inc., a related Bell company, for and on the instructions of Bell (Agreed Statement of Facts at para 23). Moreover, the evidence on record confirms that Bell used the infringing gears during the certification process of the Bell 429 which began, in earnest, in early 2006. Drop tests were conducted in 2006 and 2007 with the infringing gears. Indeed, the Bell 429, equipped with the Legacy gear, achieved its first flight on February 27, 2007 at Bell’s facility in Mirabel (2012 FC Judgment at para 22).
[14] In the summer of 2008, the defendant’s engineer worked on the design of a modified landing gear, which became to be known as the Production gear. In early 2009, the Production gear was fully developed and the defendant asked that the competent aeronautical authorities to certify the Bell 429 with the Production gear.
[15] The Production gear and its components are faithfully represented for the purpose of this litigation in exhibit JB-243/Confidential and in drawings found in JB-405/Confidential to JB‑477/Confidential and JB-485/Confidential (Agreed Statement of Facts at para 28). An isometric view of the Production gear, which is also made of aluminium alloy, is reproduced below:
[16] At the HELI EXPO, the Production gear was publicly shown in Anaheim, California in February 2009 (Agreed Statement of Facts at para 33, item 1). Certification of the Bell 429 with the Production gear was obtained from Transport Canada on June 20, 2009, from the FAA on June 30, 2009, and from EASA on September 23, 2009 (2012 FC Judgment at para 184).
[17] On January 16, 2014, the defendant destroyed twenty out of the twenty-one Legacy gears in its possession and which had been quarantined sometime after the institution of these proceedings.
IV. PATENT LITIGATION [18] In Canada, the plaintiff has claimed infringement of the ‘787 Patent by two distinct models of landing gear associated with the Bell 429 helicopter: the Legacy gear and the Production gear. Similar allegations of infringement have been made by the plaintiff in France and in the United States with respect to the French and US Patents.
A. Canada [19] The plaintiff did not send a cease and desist letter to the defendant prior to instituting the present action in May 2008 (Agreed Statement of Facts at para 32).
[20] In its original statement of claim, the plaintiff sought a declaration that the ‘787 Patent was valid and infringed by the defendant’s use of the Legacy gear. While not challenging that the essential elements of claims 1, 2, 3, 4, 5, 7, 9, 10 and 15 were present in the Legacy gear, the defendant denied infringement on the basis that it was practicing prior art (Gillette defence) and that it had used the Legacy gear for the purposes of obtaining regulatory approval (experimentation exception). In addition, the defendant sought in its counterclaim to have claims 1 to 16 of the ‘787 Patent be declared invalid.
[21] In June 2009, the plaintiff amended its statement of claim to include the Production gear, alleging that both gears were functionally equivalent and incorporated the essentials elements described in claims 1, 2, 3, 4, 5, 7, 9, 10 and 15. With respect to the Production gear, while denying any functional equivalence, the defendant submitted that the changes to the original gear (saddle joint and a small protruding ski in the front of the gear) sufficed to dispose of the allegations of infringement.
[22] On October 2, 2009, the Court ordered that the quantification of damages suffered by the plaintiff (including punitive damages) and/or of profits made by the defendant be bifurcated. Following a six week trial conducted before the undersigned judge in January and February 2011, confidential reasons on infringement and validity were communicated to the parties on July 12, 2011. An interim stay of proceeding was concurrently ordered to allow the parties to have discussions of settlement, but to no avail. A supplementary hearing was held in January 2012, with respect to remedies.
[23] On January 30, 2012, the Court rendered its final and public judgment with respect to the issues of validity, infringement and proper remedies.
[24] The action in infringement and counterclaim in invalidity were allowed in part:
(a) The Court declared that claim 15 of the ‘787 Patent was valid and enforceable. However, the Court declared that claims 1 to 14 and 16 of the ‘787 Patent were invalid and unenforceable (2012 FC Judgment at paras 392-393);
(b) The Court found that the defendant had infringed claim 15 of the ‘787 Patent by using the Legacy gear (2012 FC Judgment at para 394). The Court dismissed the Gillette defence and also found that Bell could not invoke the experimentation exception either (2012 FC Judgment at paras 268 and 383);
(c) The Court found that the evidence conclusively established that, since 2005, Bell had plans to manufacture and incorporate the Legacy gear in its Bell 429 model, as soon as it could obtain certification, and that Bell had actively promoted the sales of the Bell 429 equipped with the Legacy gear (2012 FC Judgment at para 434);
(d) The Court dismissed the plaintiff’s claim that Bell had infringed the ‘787 Patent by using and promoting the Production gear incorporated since 2009 the Bell 429 helicopters sold worldwide (2012 FC Judgment at para 388);
(e) The Court found that not all of the essential elements of claim 1 were present in the Production gear, as it did not feature the “double curvature” nor the “integrated front cross piece” (2012 FC Judgment at paras 258, 259 and 388);
(f) The Court enjoined the defendant from manufacturing, using, or selling the Legacy gear or any similar landing gear until the ‘787 Patent expires, and ordered the destruction of the twenty-one quarantined Legacy gears (except one unit for the purposes of conservation of the evidence) (2012 FC Judgment at paras 403 and 405);
(g) Considering evidentiary difficulties and the fact that none of the infringing Legacy gears were ever incorporated in a helicopter sold by the defendant, the Court did not allow the plaintiff to elect between an award of damages or an account of profits (2012 FC Judgment at paras 412 to 416);
(h) As a result of its infringement of claim 15 of the ‘787 Patent, the Court declared that the plaintiff was entitled to all damages, including punitive damages, the quantum of which was to be determined at a later hearing, after exhaustion of all appeals (2012 FC Judgment at paras 416 and 456).
[25] The parties appealed the January 30, 2012 judgment. Bell appealed principally on the grounds that claim 15 of the ‘787 Patent was invalid, that its Legacy gear did not infringe the ‘787 Patent, and that, in any event, the finding that punitive damages could be awarded was inappropriate. Eurocopter cross-appealed principally on the grounds that all the claims of the ‘787 Patent were valid, and that the Production gear infringed those claims.
[26] Subsequent to the 2012 FC Judgment, this Court issued a distinct judgment on the issue of costs upon which the defendant was ordered to pay 50% of the plaintiff’s costs, calculated at the upper end of column IV of Tariff B, with respect to reasonable fees and expenses for one senior counsel, two junior counsels, expert witnesses, one in-house counsel, one technical representative, and other taxable pre-trial, trial and post-trial costs and disbursements related to the litigation leading to the Patent Infringement Judgment (Eurocopter v Bell Helicopter Textron Canada Limitée, 2012 FC 842, [2012] FCJ No 1055 [Costs Judgment]). Although the plaintiff had been overall the most successful party in the Patent Infringement Judgment, and was therefore entitled to costs, the defendant was partially successful in defending its Production gear. Bell appealed the Costs Judgments and submitted that each party should bear its own costs, alleging that the success was divided.
[27] Both the appeal by Bell and the cross-appeal by Eurocopter with respect to the 2012 FC Judgment were dismissed on September 24, 2013 by the Federal Court of Appeal (2013 FCA Judgment). Notably, the Federal Court of Appeal held that there was no reason to overturn the Court’s findings and ensuing decision with respect to Eurocopter’s right to damages, including punitive damages (2013 FCA Judgment at paras 192-193).
[28] In a concurrent judgment issued the same day, the Federal Court of Appeal confirmed the Costs Judgment, dismissing Bell’s appeal (Bell Helicopter Textron Canada Limitée v Eurocopter, société par actions simplifiée, 2013 FCA 220, [2013] FCJ No 1044 [FCA Costs Judgment].
[29] In Canada, there were no further appeals on the issues of validity, infringement, and proper remedies, as a result of the infringement of the ‘787 Patent (as well as costs).
B. United States [30] In May 2010, while the Canadian proceeding was still ongoing, Bell Helicopters Textron Inc. [BHTI] commenced an action against Eurocopter seeking a declaratory judgment that the US Patent was invalid and not infringed. In October 2010, Eurocopter made a counterclaim alleging infringement. The parties agreed that the Legacy gear infringed claim 1 of the US Patent, but fiercely disputed whether the Production gear infringed the US Patent and also whether infringement warranted damages or injunctive relief (exhibit D-117).
[31] On August 15, 2014, the United States District Court for the District of Columbia [US Court] ruled that the Production gear “does not literally infringe and does not infringe [US Patent] under the doctrine of equivalents as a matter of law”, noting in this respect that the Production gear “does not contain equivalent structure to “a front” of claim 1 [of the US Patent]”. With respect to the Legacy gear, the Court denied pre-suit damages to Eurocopter under 35 USC § 287(a) because it had failed to mark the patent number on the landing gears of its EC120 and EC130 helicopters and did not provide any actual notice of the alleged infringement until October 29, 2010.
[32] However, the US Court denied BHTI’s motion for summary judgment to deny an award of damages with respect to the Legacy gear: “Although nothing in the record indicates that Bell has attempted to sell the Bell 429 helicopter with the Original Gear since 2009, there is a factual dispute concerning Eurocopter’s entitlement to damages with respect to the Original Gear […] Bell’s submission of the testing results based on the Original Gear to the Canadian aviation authorities had a direct impact on the marketability of the Bell 429, and although it occurred prior to the commencement of this lawsuit, Eurocopter has presented evidence suggesting its continued impact on the sale of the Bell 429 in the United States.” Moreover, the US court denied BHTI’s motion to deny Eurocopter’s request for injunctive relief against the Legacy gear, noting in this respect that “Eurocopter has demonstrated the existence of genuine issue of material fact concerning Bell’s infringing conduct in relation to the Original Gear and its continuing impact on the sale of the Bell 429”.
[33] Indeed, on January 22, 2015, the US Court found that a permanent injunction was warranted, as it was notably satisfied that “[d]uring the hearing, Airbus established that Bell’s infringement caused Airbus to suffer irreparable harm in the form lost sales, lost customers, and reputational harm”. Incidentally, the fact that BHTI had stopped infringing the US Patent did not constitute, in that case, sufficient reason for denying an injunction against future infringement.
[34] This Court has been informed by the parties that there has been no appeal or further litigation in the United States with respect to the validity and infringement of the US Patent.
C. France [35] At the date of the Final Judgment, there is still on-going litigation in France with respect to the validity and infringement of the French Patent, as well as proper remedies and quantification of damages. Bell and BHTI [collectively Bell] are being sued in infringement of the French Patent following the seizure, on June 16, 2009, at the defendants’ stand at the International Paris Air Show Le Bourget, of a Bell 429 helicopter equipped with the Production gear. Bell has made a counterclaim seeking to set aside the seizure and to invalidate claims 1, 2, 4, 5, 7, 8, 9, 10, 13, 14 and 15 of the French Patent (exhibit P-119).
[36] On October 11, 2012, the Tribunal de grande instance de Paris dismissed both Eurocopter’s action in infringement and Bell’s counterclaim in invalidity of the French Patent, while affirming the legality of the seizure. Both Eurocopter and Bell appealed.
[37] On March 20, 2015, the Cour d’appel de Paris rendered its judgment with respect to Airbus’ appeal and Bell’s cross-appeal:
(a) The Cour d’appel de Paris confirmed the validity of the seizure of the Bell 429 helicopter seized on June 16, 2009, as well as the operations performed by the Bailiffs and the experts at the International Paris Air Show Le Bourget;
(b) The Cour d’appel de Paris declared that claims 1 and 15 of the French Patent are valid and enforceable and that Bell has infringed claims 1, 2, 4, 5, 7, 8, 9, 10, 13 and 15 of the French Patent by the use of both the Legacy and the Production gears;
(c) The Cour d’appel de Paris granted injunctive relief and also ordered the confiscation and destruction of all counterfeited gears;
(d) The Cour d’appel de Paris also ordered that Bell pay to Airbus a provision of €3 million to be imputed on the final award once the expert it has appointed has prepared an inventory of the Bell 429 helicopters equipped with the Production gear manufactured or offered for sale in France and has determined the profits made by Bell; and
(e) The Cour d’appel de Paris specifically excluded from the scope of its judgment the damages claimed by Airbus with respect to twenty-one Legacy gears which are the object of the present claim in damages.
[38] Bell’s counsel has informed this Court that the defendants have or will ask the Cour de cassation to set aside the judgment rendered on March 20, 2015 by the Cour d’appel de Paris in favour of Airbus.
V. TRIAL ON DAMAGES A. Procession of the file [39] On October 22, 2014, the plaintiff asked this Court to determine the quantum of compensatory and punitive damages as a result of having been found to have infringed the ‘787 Patent.
[40] On November 21, 2014, the plaintiff served and filed with its statement of issues a request to have the matter heard expeditiously by the Court.
[41] On December 10, 2014, the Court allowed the plaintiff (1) to change the former name of the plaintiff – “Eurocopter (société par actions simplifiée)” – by that of its new legal designation – “Airbus Helicopters”; (2) to clarify in its statement of claim that the amount of $25 million sought by the plaintiff as punitive damages was not dependent on the number of infringing gears used by the defendant; and (3) that the plaintiff was entitled to claim compensatory and punitive damages, as well as pre- and post-judgment interest. The defendant was also exempted from serving and filing a re-amended defence.
[42] On December 17, 2014, the plaintiff filed and served its re-amended statement of claim.
[43] On January 9, 2015, the defendant served and filed its responding statement of issues and notably submitted to the Court that there was no urgency to proceed to a continuation of the trial in Canada until the final outcome of the plaintiff’s claim in damages in France.
[44] On January 26, 2015, a case management conference was held with the trial judge to discuss a timetable of further steps leading to the continuation of the trial in this case. Counsel agreed on a timetable for the filing of the parties affidavits of documents; requests and responses to request to admit facts and/or documents; first round of discoveries; responses to undertakings, motions to adjudicate objections and refusals; further discoveries following the first round of oral examinations; and serving of experts reports.
[45] On February 25, 2015, based on the parties’ assurance that the whole process to have the matter ready for trial would be completed by January 29, 2016, pursuant to Rule 107 of the Federal Courts Rules, SOR/98-106 [Rules], it was ordered that the trial on the quantification of damages begin before this Court on May 30, 2016 for a duration of ten days.
[46] On August 18, 2015, the scheduling order of January 28, 2015 was amended to extend the delays for the completion of discoveries and other steps in the proceeding. The plaintiff was now to serve its expert reports, if any, on or before February 12, 2016, and the defendant, on or before April 8, 2016. In effect, it turned out that these delays were not respected. The plaintiff served its expert report on March 4, 2016, while the defendant served its experts reports on April 29, 2016.
[47] A trial management conference was held on May 9, 2016. At that time, the trial judge was informed by counsel that there was a disagreement with respect to the number of experts that the defendant was allowed to call at the trial without seeking leave of the Court.
B. Interlocutory order with respect to the number of experts [48] According to this Court’s jurisprudence, no distinction should be drawn between the number of expert witnesses who may be called at trial and the number of expert reports that may be served in advance of trial (Apotex v Sanofi-Aventis, 2010 FC 1282, [2010] FCJ No 1592 at para 31).
[49] In the first phase of the proceeding, three qualified experts were actually called at trial on behalf of the plaintiff (January and February 2011): Mr. Andrew Logan, an expert in helicopter design and certification; Dr. Edward Roberts Wood, an expert in aeromechanics, dynamics and ground resonance with experience in the design and development of helicopters, and in testing helicopters for ground resonance; and Dr. François Malburet, an expert in acoustic, vibratory mechanic and mecatronic related to helicopters, with experience in ground resonance. A few weeks before the trial, the Court made an interlocutory order declaring that the proposed expert report of Mr. Murray Wilson, a retired patent examiner with a Bachelor’s degree in mechanical engineering, was inadmissible and that the plaintiff was barred from presenting him as an expert witness at trial (Eurocopter v Bell Helicopter Textron Canada Limitée, 2012 FC 1328).
[50] On the other hand, three qualified experts were actually called at trial on behalf of the defendant: Dr. Dewey Hodges, an expert in helicopter dynamics, including aeromechanical stability, structural dynamics, aeroelasticity and structural mechanics, including finite element methods; Dr. Farhan Gandhi, an expert in dynamics, aeroelasticity and aeromechanical stability of rotorcraft (helicopters); and Mr. Thomas J. Toner, an expert in helicopter design, development and certification, with experience in rotor systems, aircraft structure and landing gear. However, during the first phase of the trial, the defendant had in fact served four expert reports on the plaintiff, even though the fourth expert, Dr. Earl Dowell, was not called at trial.
[51] On March 4, 2016, the plaintiff served the expert report of Mr. Bradley A. Heys, an expert in the fields of business, securities and intellectual property valuation, financial investigation, finance, and economics.
[52] On April 29, 2016, the defendant served four expert reports: Mr. Steven Schwartz, an expert in economic matters, namely intellectual property valuation disputes; Mr. Stéphane Dupuis, an economist and an expert in economic issues related to the determination of transfer prices and the valuation of intellectual property; Mr. Michael O’Reilly, an expert in the characteristics of the helicopter industry and the repair, overhaul, valuing, buying, selling and leasing of new and used commercial helicopters; and Mr. Ronald T. Wojnar, a former Deputy Director at the Federal Aviation Administration and an expert in the aircraft certification process in the United States and Canada.
[53] On May 6, 2016, invoking Rule 52.4(1) which provides that a party intending to call more than five expert witnesses in a proceeding shall seek leave of the Court in accordance with section 7 of the Canada Evidence Act, RSC 1985, c C-5, the plaintiff objected to the number of experts.
[54] As directed by the Court on May 9, 2016, the defendant made a motion in writing to have the matter decided prior to the continuation of the trial.
[55] On May 27, 2016, the Court allowed the defendant to rely upon any two of the four expert reports served on April 29, 2016 – that is one expert above the five expert limit stipulated in section 7 of the Canada Evidence Act. What the Court stated in Airbus Helicopters v Bell Helicopter Textron Canada Limitée, 2016 FC 590 [2016 Interlocutory Order] at paragraphs 47 and 62-63 is particularly relevant:
[47] Moreover, it seems quite clear that the present bifurcated proceeding constitutes a single “trial” or “proceeding” for the purposes of Rule 52.4 and section 7 of the CEA. As submitted by Airbus, the construction of Rules 106 and 107 supports this interpretation. Rule 106 deals specifically with the severance of proceedings, in contradistinction with Rule 107, which permits bifurcation. If Rule 107 were also interpreted as leading to severance, it would be redundant. As Airbus points out, the French version of the Rules makes this difference more apparent, as Rule 107 refers to the separate determination of issues within “une instance”, whereas Rule 106 refers to issues or causes of action continuing “en tant qu’instances distinctes”. The bifurcation in the present case was ordered under Rule 107(1), and therefore did not create a separate “proceeding” or “trial” for the purposes of section 7 of the CEA or Rule 52.4.
[…]
[62] I have considered Bell’s and Airbus’ respective submissions (including Bell’s reply) in light of Rule 52.4(2), which states that in deciding whether to grant leave to a party to call more than five expert witnesses, the Court shall consider all relevant matters, including the following factors: (a) the nature of the litigation, its public significance and any need to clarify the law; (b) the number, complexity or technical nature of the issues in dispute; and (c) the likely expense involved in calling the expert witnesses in relation to the amount in dispute in the proceeding. I have found the additional factors identified by Airbus also relevant and I have kept in mind that the Court’s exercise of its discretion, particularly on the eve of the upcoming trial, must “secure the just, most expeditious and least expensive determination of every proceeding on its merits” (Rule 3). This naturally includes the upcoming trial, which is to be exclusively focused on the quantum of compensatory and punitive damages.
[63] To be fair and equitable to the parties, the result achieved by the leave order must be proportionate, strike a proper balance and serve the best interests of justice in assuring the prompt conduct of the trial at an efficient cost, considering the number, complexity or technical nature of the issues in dispute. Accordingly, I have decided to allow Bell to rely upon the two expert reports and testimonies of Mr. O’Reilly and Mr. Schwartz (one expert above the five expert limit) and to refuse leave to have Mr. Dupuis and Mr. Wojnar testify in this proceeding as two additional experts on the issue of damages (unless Bell decides to substitute either of them for Mr. O’Reilly or Mr. Schwartz).
[56] The trial in the present proceeding resumed in Montréal, Quebec on May 30, 2016 and ended on June 10, 2016.
[57] On May 30, 2010, at the opening of the hearing, defendant’s counsel announced that Dr. Schwartz and Mr. Dupuis would be called as expert witnesses (while Mr. O’Reilly would now testify as an ordinary witness). The reports of Mr. Wojnar and Mr. O’Reilly were returned by the Court to the defendant. On June 6, 2016, while the trial on damages was being conducted, the defendant served and filed a notice of appeal of the 2016 Interlocutory Order.
[58] In the morning of June 9, 2016, Bell’s counsel informed the Court that they had made the decision not to call Mr. Dupuis who had been present throughout most of the hearing. His report has been returned to the defendant by the Court.
[59] No request for the adjournment of the trial on damages, or suspension of the Court’s deliberations, pending Bell’s appeal of the 2016 Interlocutory Order and/or the final resolution of the litigation in France, was made at any time by the defendant or the plaintiff.
[60] On August 2, 2016, the Federal Court of Appeal (Justice Near) ordered that Bell’s appeal be stayed until ten days after the expiry of the deadline to appeal the present final judgment on the quantum of damages.
C. The evidence on record [61] On June 9, 2016, counsel for Airbus and Bell declared their evidence closed. On June 10, 2016, the parties made their final arguments on the quantification of damages, which were supplemented, in the following months, by additional written submissions on the particular issues identified by the Court in its Directions.
1. Admissions of fact [62] The number of admissions in this case is minimal, as the parties mainly relied on the Agreed Statement of Facts, provided in the first phase of trial in 2011 and 2012. It turns out that a number of contested issues which could have resulted in admissions (without prejudice to the parties’ right to debate at trial) following the discoveries at trial on damages remain unsettled. Such lack of cooperation makes it difficult to validate any calculations, made either by Airbus’ expert or by Bell’s expert. Also, this has obliged the Court to address these calculations in its reasons, thus contributing to their overall length.
2. Documentary evidence [63] Rule 276 provides that all exhibits adduced into evidence shall be marked and numbered. The exhibits contained in the joint book of documents produced in evidence during the first phase of the trial in 2011 and 2012, including the Agreed Statement of Facts, were all marked and numbered (JB-1 to JB‑542 and C-1 respectively).
[64] Despite the admissions made by the parties during the first phase of the trial with respect to the authenticity and/or the contents of the documents included in the 18 volume joint book of exhibits [JB] (2012 FC Judgment at para 16), there appears to have been some misunderstanding, at the appeal level, with respect to the scope of this documentary evidence (Bell Helicopter Textron Canada Limitée v Eurocopter, 2012 FCA 152, [2012] FCJ No 662). Be that as it may, Rule 275 provides that the Court may give directions at trial concerning the methods of proving a fact or of adducing evidence.
[65] It has always been clear for the parties and the trial judge, that a document included in the joint book of exhibits [JB] and whose authenticity had been admitted, was part of the documentary evidence adduced at trial, and would be accordingly considered by the Court (subject to the weight to be attributed to same i