Halford v. Seed Hawk Inc.

Halford v. Seed Hawk Inc.
Court (s) Database
Federal Court Decisions
Date
2006-03-31
Neutral citation
2006 FC 422
File numbers
T-2406-93
Decision Content
Date: 20060331
Docket: T-2406-93
Citation: 2006 FC 422
BETWEEN:
JAMES W. HALFORD
and VALE FARMS LTD.
Plaintiffs
- and
SEED HAWK INC., PAT BEAUJOT,
NORBERT BEAUJOT, BRIAN KENT
and SIMPLOT CANADA LIMITED
Defendants
ASSESSMENT OF COSTS - REASONS
Charles E. Stinson
Assessment Officer
TABLE OF CONTENTS
Introduction:................................................................................................................. paras. [1] - [9]
The Seed Hawk Defendants' Overview:.................................................................... paras. [10] - [16]
The Simplot Defendant's Overview:.......................................................................... paras. [17] - [18]
The Plaintiffs' Overview:........................................................................................... paras. [19] - [22]
Invalidity
- The Seed Hawk Defendants:......................................................................... paras. [23] - [30]
- The Simplot Defendant:................................................................................. paras. [31] - [35]
- The Plaintiffs:................................................................................................ paras. [36] - [51]
- Assessment of Invalidity:............................................................................... paras. [52] - [57]
The Seed Hawk Defendants Further Revised Bill of Costs as to Trial
- Clifford J. Anderson:..................................................................................... paras. [58] - [89]
- Pitblado Buchwald Asper:............................................................................. paras. [90] - [92]
- The Scandinavian Witnesses:....................................................................... paras. [93] - [110]
- Dr. Harry Ukrainetz:................................................................................. paras. [111] - [116]
- Dr. Ken Domier:....................................................................................... paras. [117] - [120]
- Counsel Fees:........................................................................................... paras. [121] - [140]
- Norbert and Pat Beaujot:.......................................................................... paras. [141] - [153]
- Transcript:................................................................................................ paras. [154] - [157]
- Law Firms:............................................................................................... paras. [158] - [162]
- Lawyers' Travel:....................................................................................... paras. [163] - [177]
- Paul Beaumont:...................................................................................................... para. [178]
- Research, Searches and Office Materials:.................................................. paras. [179] - [184]
- Norwegian Patent and US Patent:............................................................. paras. [185] - [187]
- Book Loan etc.:........................................................................................ paras. [188] - [189]
The Simplot Defendant's Bill of Costs as to Trial
- Counsel Fees:........................................................................................... paras. [190] - [212]
- Disbursements:.......................................................................................... paras. [213] - [241]
The Bills of Costs of the Seed Hawk Defendants
and the Simplot Defendant as to the Costs Decision:........................................... paras. [242] - [249]
The Plaintiffs' Bill of Costs:................................................................................................. para. [250]
- October 31, 2000 Order:.......................................................................... paras. [251] - [256]
- Costs Thrown Away Decision:.................................................................. paras. [257] - [280]
- James Halford Cross-examination:............................................................. paras. [281] - [287]
- the Reconsideration Decision:.................................................................... paras. [288] - [291]
The Three Bills of Costs as to Assessment of Costs:.............................................. paras. [292] - [298]
Interest:.............................................................................................................................. para. [299]
Set-off:................................................................................................................. paras. [300] - [306]
Introduction
[1] The trial of this matter, addressing allegations of patent infringement relative to an invention described as a "Seed/Fertilizer Placement System for Minimum Tillage Application", occurred over a period of four years. The Court dismissed the main action, with costs to be spoken to by notice of motion, and dismissed the counterclaim but did not mention costs. Subsequently, the Court issued directions concerning the assessment of the Defendants' costs and, as well, denied costs to the Plaintiffs relative to defence of the counterclaim. However, the Court confirmed that the Plaintiffs could assess their costs awarded in any event of the cause further to interlocutory proceedings. The Court directed that these assessments of costs could proceed notwithstanding outstanding appeals against the trial judgment.
[2] I comment further to para. [14] of my decision in this matter on venue for an assessment of costs, reported at Halford v. Seed Hawk Inc., [2005] F.C.J. No. 600. Ordinarily requiring as I do that assessments of costs proceed orally (they are addressed in writing in many instances) on affidavit evidence supported by argument, my practice has been to not engage a verbatim reporter. If counsel avail themselves of Tariff B1(4) to explain and clarify ad hoc oversights in the affidavit evidence, I do not adjourn the proceeding to bring in a verbatim reporter, but simply record said late evidence as best I can in my reasons. In some jurisdictions, although an oral hearing of an assessment of costs proceeds on affidavit evidence and argument, the presiding officer informs both sides that a machine in the hearing room will be used to record the oral submissions as an aid to the assessment officer in recollection and that its recorded contents will become part of the record. I think that the broad parameters of Rule 408(1), ie. "... assessment officer may ... give directions for the conduct of an assessment", would have permitted such an approach here. This is all simply to note that I decided that the circumstances here warranted the use of a verbatim reporter. The Court's directions for the assessment of costs required 37 pages. The summaries in these reasons of the parties' respective positions should be detailed enough for an understanding of the notion of issues between the parties, but should be read keeping in mind that there are many more nuances and details of those issues in the voluminous record of documents and transcripts, all of which I have read and considered. I have not attempted to include in these reasons some part of every detail in the materials.
[3] These reasons address assessments of eight bills of costs. The Defendants, Seed Hawk Inc., Pat Beaujot, Norbert Beaujot and Brian Kent (hereafter the "Seed Hawk Defendants") presented three bills of costs claiming $713,566.26, $10,545.80 and $5,761.20 respectively, plus GST and PST as applicable. The Defendant, Simplot Canada Limited (hereafter the "Simplot Defendant"), presented three bills of costs claiming $272,328.65, $9,007.27 and $6,907.33 respectively, plus GST and PST as applicable. The Plaintiffs presented two bills of costs claiming $84,978.46 and $3,425.00 respectively, plus GST and PST as applicable. These assessments, heard one after the other, spanned eight days in Calgary and Winnipeg. Counsel were tenacious in their advocacy for their respective clients. Their organization of materials and submissions and their general civility combined to make the best use of that time. I note simply from my reading of the record that the tariff parameters of partial indemnity for litigation costs mean that the amounts in the various bills of costs do not begin to approach the actual legal costs incurred by all parties to this litigation.
[4] Throughout the hearing of these assessments of costs, there were objections about counsel straying into the giving of evidence or beyond the ordinary scope of reply or rebuttal. Counsel were firm in their respective positions on such issues. I attempted to address these concerns as they arose within two general parameters of practice relative to perfection of the record before me. The first was my awareness of the Court's conclusion in Amfac Foods Inc. v. Irving Pulp & Paper Ltd., [1985] F.C.J. No. 1150 (F.C.T.D.) that a review of an assessment of costs ought to be limited to the record before the assessment officer. The second was my sense that, although an assessment of litigation costs necessarily has a number of formal features, ie. notice, evidence, argument, right of appeal etc., it occurs at a late stage of the litigation and should, to promote some finality in the proceedings, involve some give and take in the argument to crystallize and resolve specific dollar amounts thereby putting an end to the matter.
[5] The first portion of the trial (hereafter the "1st Trial Portion in 2000") occupied November 6 to 9, 2000, inclusive. Unfortunate circumstances, described in more detail below, precluded the attendance at trial on November 9 by counsel for the Seed Hawk Defendants. The second portion of the trial (hereafter "the 2nd Trial Portion in 2001"), by which time the Seed Hawk Defendants had replaced their initial solicitor of record with a new and current solicitor of record, occupied October 15 and 16, 22 to 26 inclusive, 29 to 31 inclusive and November 1 and 2, 2001. The third portion of the trial (hereafter the "3rd Trial Portion in 2002") occupied June 17 to 21 and 24 to 28, 2002, both inclusive. The fourth portion of the trial (hereafter the "4th Trial Portion in 2003") occupied February 3 to 7 and 10 to 14, 2003, both inclusive.
[6] The Reasons for Order and Order of the Honourable Mr. Justice Pelletier dated January 23, 2004 (hereafter the "Trial Decision") concluded at para. [260] that the Seed Hawk Defendants' device did not infringe the patent. Paragraph [261] of the Trial Decision noted that the Seed Hawk Defendants had raised a number of grounds of invalidity of the claims of the patent both as a defence to the claims of infringement and as a counterclaim to the infringement claim. The Court considered each ground in turn and concluded at para. [316] that "the Seed Hawk defendants have either failed to establish invalidity or have failed to plead the grounds of invalidity which they could prove." The Court noted at para. [317] that the finding of non-infringement rendered moot the need to assess the personal liability of Pat Beaujot, Norbert Beaujot and Brian Kent, but should said finding be an error, the Court would in a somewhat summary fashion consider this as an issue in the alternative. At para. [339], the Court found against personal liability. As well, at para. [340], the Court noted that, given its finding of non-infringement, it was not necessary to consider the issue of whether the Simplot Defendant had abetted or induced infringement by the Seed Hawk Defendants. However, the Court did consider this issue on a basis similar to that of personal liability above and concluded at para. [353] that "the claims against Simplot must fail."
[7] The balance of the Trial Decision read:
[354] In the end result, I conclude that the claim and counterclaim both fail. The allegations of infringement have not been established for two reasons, the absence of a frame mounted fertilizer knife and the substitution of a common mounting member for all three key elements constructed so that all three elements moved about a common pivot, and a seed tube which does not engage the soil solely by its outer surface. I have found that there are other substitutions and variations but I conclude that none of them are sufficient to constitute infringement.
[355] The challenges to the validity of the patent also fail though for a greater variety of reasons.
[356] The claim against the individual Seed Hawk defendants fails as infringement has not been found. Had I concluded that there was infringement, I would not have found against the individual defendants as I have concluded that none of their conduct was tortious in itself. Furthermore, there was no conduct to suggest that the corporate vehicle was an instrument of fraud, or simply a device to cloak the personal activities of the individual defendants.
[357] The claim against Simplot also fails because I have found no infringement. However, had I done so, I conclude that there is nothing to show that the Seed Hawk defendants would not have infringed but for the activities of Simplot.
[358] The defendants are entitled to an order dismissing the claim while the plaintiffs are entitled to a declaration of validity of the asserted claims. The defendants are entitled to their costs but, in the circumstances, costs are to be spoken to by way of Notice of Motion.
[359] I wish to express my appreciation to counsel for their assistance and their civility in the course of a difficult trial, which was made all the more difficult for having been spread over four years.
ORDER
Having heard the evidence of the witnesses called by the parties, and having heard the representations of counsel on behalf of the parties, it is hereby ordered and adjudged that:
1- The claims against the defendants Seed Hawk Inc., Pat Beaujot, Norbert Beaujot, Brian Kent, and Simplot Canada Limited are dismissed with costs, costs to be spoken to by Notice of Motion.
2- The counterclaim against the defendants by counterclaim James Halford and Vale Farms Ltd. is dismissed.
[8] All of the parties then brought motions, heard on May 7, 2004, for directions with respect to costs. The Reasons for Order and Order by the trial judge dated September 16, 2004 (hereafter the "Costs Decision") read in part:
...[2] Now comes the time to pay the piper. I have before me motions from the Seed Hawk defendants and Simplot seeking either a lump sum award of costs or directions with respect to the assessment of costs. I also have a motion from the plaintiffs seeking directions as to the assessment of costs with respect to those matters where they were awarded costs in any event of the cause. The plaintiffs also argue that they are entitled to the costs of the defence of the counterclaim as to invalidity, as well as the costs of certain steps within the proceedings where they say the defendants have disentitled themselves to costs....
CONCLUSION
[63] An order will issue with respect to each of the motions for costs, incorporating the terms of these reasons. As for the costs of these motions, I fix the costs of the Seed Hawk defendants and Simplot at $7,500 in respect of their motions. I order that each party shall bear their own costs in relation to the plaintiffs' motion for their costs.
Order with respect to the Seed Hawk defendants' costs
IT IS HEREBY ORDERED that:
1- The defendants Seed Hawk Inc., Pat Beaujot, Norbert Beaujot, and Brian Kent shall have their costs assessed by an assessment officer according to the following directions:
a) there shall be only one order for costs in respect of all the defendants;
b) the defendants' costs shall be assessed at the high end of column IV of Tariff B;
c) there is to be no reduction in the costs assessed by reason of any allegation of misconduct on the part of the defendants, or any increase in costs by reason of any allegation of misconduct on the part of the plaintiffs;
d) there shall be no doubling of costs under Rule 420(2).
2- Costs are to be assessed without awaiting the outcome of the appeal of the judgment rendered after trial, and are payable upon being assessed.
3- Costs assessed against the plaintiffs shall bear interest at the judgment interest rate for the province of Saskatchewan from the date of judgment dismissing the plaintiffs' claim.
4- The defendants are awarded the costs of this motion in the amount of $7,500 plus disbursements.
5- The assessment officer shall dispose of the costs of the assessment in his or her discretion in accordance with Rule 408(3).
Order with respect to the plaintiffs' costs
IT IS HEREBY ORDERED that:
1- The plaintiffs shall have assessed by an assessment officer the costs of proceedings in respect of which they were awarded their costs in any event of the cause in accordance with the following directions:
a) there shall be only one order for costs in respect of all the plaintiffs;
b) the plaintiffs' costs shall be assessed at the low end of column IV of Tariff B;
c) there is to be no reduction in the costs assessed by reason of any allegation of misconduct on the part of the plaintiffs, or any increase in costs by reason of any allegation of misconduct on the part of the defendants.
2- Costs are to be assessed without awaiting the outcome of the appeal of the judgment rendered after trial, and are payable upon being assessed.
3- Costs assessed against the defendants shall bear interest at the judgment interest rate for the province of Saskatchewan from the date of judgment dismissing the plaintiffs' claim.
4- Each party shall bear their own costs of this motion.
5- The assessment officer shall dispose of the costs of the assessment in his discretion in accordance with Rule 408(3).
Order with respect to the defendant Simplot's costs
IT IS HEREBY ORDERED that:
1- The defendant Simplot Canada Limited shall have its costs assessed by an assessment officer in accordance with the following directions:
a) the defendants' costs shall be assessed at the high end of column IV of Tariff B save for motions or other interlocutory proceedings which did not occur in the course of the trial of this matter brought by other parties and in which the defendant in substance merely adopted the position of the other defendants, which motions or other interlocutory proceedings shall be assessed at the midpoint of column III of Tariff B;
b) there is to be no reduction in the costs assessed by reason of any allegation of misconduct on the part of the defendant, or any increase in costs by reason of any allegation of misconduct on the part of the plaintiffs;
c) there shall be no doubling of costs under Rule 420(2).
2- Costs are to be assessed without awaiting the outcome of the appeal of the judgment rendered after trial, and are payable upon being assessed.
3- Costs assessed against the plaintiffs shall bear interest at the judgment interest rate for the province of Saskatchewan from the date of judgment dismissing the plaintiffs' claim.
4- The defendant is awarded its costs of this motion in the amount of $7,500 plus disbursements.
5- The assessment officer shall dispose of the costs of the assessment in his or her discretion in accordance with Rule 408(3).
[9] There was some discussion before me as to the appropriate approach for the assessments. Counsel suggested beginning with comments on factors overriding the issues in general and invited me to deliver "without prejudice" ad hoc observations to assist in resolution of issues. I agreed as that approach, more prevalent in recent years, is consistent with the move to a proactive case management philosophy to promote expeditious resolution of litigation issues. I did however caution counsel that my approach to assessments of costs was grounded in the belief that real dollars are needed to run litigation and that I tended to view a result of nil dollars on assessment as unrealistic in instances of problematic proof where I did not doubt that a party had had to spend money to advance its case.
The Seed Hawk Defendants' Overview
[10] The Seed Hawk Defendants argued that the number of claims in issue in the subject patent contributed to complexity in this litigation. Initially, the Plaintiffs put in issue, of 20 claims, only one independent claim and two dependent claims, but those numbers increased significantly with subsequent amended pleadings. Issues associated with independent claims generate more complexity than those associated with dependent claims because a finding of non-infringement of an independent claim precludes the need to consider infringement of its associated dependent claims. A defendant, faced with allegations of infringement of more than one independent claim, must address each in turn so as to secure a discrete finding of non-infringement for each independent claim. The construction of and evidence for each patent claim, considerable on both sides of this litigation, are discrete meaning that elements of similarity between claims do not reduce the work required.
[11] The Seed Hawk Defendants argued that another major factor contributing to significant costs was the collapse and hospitalization, due to workload, of John Blair, who was the initial counsel for the Seed Hawk Defendants. In a departure from ordinary practice, the Plaintiffs had received permission to serve reply or rebuttal expert affidavits, which they did not do until the eve of trial. This material was very substantial and Mr. Blair accordingly sought, but was denied, an adjournment of the trial. He then collapsed under the strain just three days into the trial. The Plaintiffs' evidence as to the information needed before these additional expert affidavits could be finalized does not justify having put Mr. Blair in that position, by reason of delayed service, because it was insubstantial in the overall framing of the reports. The trial venue, Winnipeg, was not the home base for the Seed Hawk Defendants, their counsel or their experts, unlike some of the Plaintiffs' people, and therefore significant travel and other costs were incurred.
[12] The Seed Hawk Defendants referred to the Costs Decision:
... [46] I now turn to the costs incurred as a result of the adjournment of November 2000. At the time of the adjournment, counsel for the plaintiffs argued that the adjournment should be without any additional costs to his clients. There is already an order awarding the plaintiffs the costs of amendments to the pleadings and the costs thrown away resulting from those amendments. The plaintiffs have detailed those costs in their memorandum. I leave it to the assessment officer to decide which of the items claimed are recoverable.
[47] As for any further consideration by way of costs in relation to the adjournment of November 2000, the record discloses that the then counsel for the Seed Hawk defendants was served with a large volume of material within two weeks of the commencement of the trial. Counsel brought a motion for an adjournment which the plaintiffs opposed, as they were perfectly entitled to do. The motion for an adjournment was refused, the trial proceeded and counsel collapsed under the strain of attempting to deal with the experts' affidavits while conducting the trial itself. I find no fault with the plaintiffs for standing on their rights but the defendants, having succeeded at trial, now stand on their rights to costs. Both positions are equally valid. As a result, I can see no reason to curtail the Seed Hawk defendants' costs as a result of the adjournment of November 2000. In other words, the assessment officer shall not, by reason of the adjournment of November 2000, reduce the fees and disbursements to which the defendants would otherwise be entitled....
to argue that their various costs associated with re-attendance for subsequent trial portions are recoverable.
[13] The Seed Hawk Defendants argued that another major contributing factor for significant costs on their part was duration, ie. four separate attendances, comprising approximately seven weeks, by parties, witnesses and counsel in Winnipeg remote from their respective home bases, as opposed to the Plaintiffs whose Winnipeg counsel did not have to rent office space, secretarial staff, photocopiers and other equipment necessary to run a complex trial at a remote venue. These latter expenses were significant and additional to travel costs such as airfares, hotels, meals and taxis. For example, counsel had to ship approximately 50 boxes of materials to the trial venue each time a trial portion resumed. Several successful objections by the Seed Hawk Defendants to the Plaintiffs' expert evidence inevitably lengthened the trial.
[14] The Seed Hawk Defendants referred to the Costs Decision:
... [23] I attribute no significance to the various allegations relating to the production, volume or evidentiary value of the various affidavits produced by the parties at various times. The equities, in relation to these matters are equally divided. As for the striking of various parts of the plaintiffs' affidavits, this has already been considered under the heading of legal complexity as a good number of the interlocutory motions had to do with these very issues. Furthermore, where liability for costs depends primarily upon success in the action, I can see no reason for reaching into the trial itself so as to use success on interlocutory proceedings as a basis for increasing (or decreasing) costs....
[26] In their submissions, the plaintiffs argue that the defendants have disentitled themselves to costs with respect to various elements of evidence for reasons not dissimilar to those invoked by the Seed Hawk defendants in favour of increased costs. As indicated earlier, I am not inclined to treat motions decided in the course of the trial separately from the trial itself. Nor am I disposed to engage in an ex post facto assessment of the conduct of the trial by any party's counsel, in the absence of some egregious abuse of the process. In my view, counsel for the plaintiffs and for the Seed Hawk defendants did their duty as they saw it and while the process may have been less than surgically precise, it did not depart significantly from what one might expect in the circumstances....
[45] By way of clarification, and to avoid any confusion, the plaintiffs are only entitled to the costs of those matters with respect to which they were awarded their costs in any event of the cause. Motions and other proceedings within the trial are all to be treated as costs in the cause unless a specific order or direction to the contrary was made. I have already indicated my view that the equities are evenly divided as between the parties in terms of the conduct of the action. Consequently, I decline to intervene to deny or reduce the costs to which the defendants are entitled, or to increase the costs to which the plaintiffs are entitled, on the basis of the plaintiffs' allegations of delay or other misconduct. Now that the trial is done, everyone can think of ways in which it could have been conducted differently. As it was unfolding however, everyone did what they thought they had to do to protect their position. While there are things which could have been done differently, I find no egregious abuse of the process which would justify departing from the ordinary course....
and argued that, contrary to the Plaintiffs' position, the trial judge implicitly recognized that various motions and objections throughout the trial, which would include those relating to admissibility of the Plaintiffs' expert evidence, were not improperly made and therefore the costs of the Seed Hawk Defendants should not somehow be reduced as a function of prolongation of the trial. Any such prolongation would have been to the disadvantage of the Seed Hawk Defendants because costs were running up at a remote trial venue. The Seed Hawk Defendants argued that Mr. Blair's agreement to the Winnipeg trial venue does not somehow shield the Plaintiffs from consequent costs of travel. As well, that the trial judge may have considered that certain equities or other factors are divided in addressing the scale of costs does not imply a negative effect on the assessment of costs in a manner inconsistent with the trial judge's intent that the Seed Hawk Defendants recover their costs.
[15] The Seed Hawk Defendants argued that another major contributing factor for significant costs on their part was the Plaintiffs' decision to name officers or directors of the Seed Hawk Defendants as personal defendants and then allege throughout that they had knowingly created the corporate defendant for the purpose of infringing the Plaintiffs' patent. This resulted in several motions and in testimony from several witnesses, all doing little to advance the Plaintiffs' case: see para. [339] of the Trial Decision. That the Plaintiffs declined the trial judge's invitation to drop these allegations contributed to the length and expense of trial.
[16] The Seed Hawk Defendants argued generally that the Plaintiffs' overriding objective was to make this litigation ruinously expensive for them and put them out of business, ie. aspects of proposed settlement and of the Trial Decision. The unreasonable and outrageous circumstances of the third settlement offer reinforce this submission: Rules 409 and 400(3)(e) vest the assessment officer with jurisdiction to take that into consideration. The trial judge, in making his conclusions in para. [338], was not naive and would have been aware of tendencies in a market of competing technology. Further, the evidence does not support the Plaintiffs' position concerning the amounts of offers. Finally, Englander v. Telus Communications Inc., [2004] F.C.J. No. 440 (A.O.) confirms my jurisdiction to allow GST relative to corporate entities.
The Simplot Defendant's Overview
[17] The Simplot Defendant noted that the Plaintiffs' materials attempt to minimize its involvement in this litigation. The Simplot Defendant asserted that its approach was predicated on not wasting the Court's time by repeating submissions already adequately led by the Seed Hawk Defendants. Although its disbursement total does not approach that for the Seed Hawk Defendants, its costs for counsel should not be reduced simply on the basis that his presence was somehow not necessary during portions of the trial.
[18] From the Simplot Defendant's perspective, the defence to the Plaintiffs' action was always a two-step process. First, the Plaintiffs had to establish infringement of the patent by the Seed Hawk Defendants. Second, and only if successful on the first step, the Plaintiffs had to establish their allegation that the Simplot Defendant had induced, aided and abetted infringement. The Simplot Defendant's interest in the subject technology at issue was a function of its manufacture and marketing of large volumes of liquid fertilizer. The existence throughout of an indemnity agreement between the Simplot Defendant and Beaujot Holdings (the original development company associated with the Seed Hawk device) was to shield the former from liability. As such, the Simplot Defendant had some, but not all, interests in common with the Seed Hawk Defendants concerning defence strategy. It was highly interested in maintaining a defence with that of the Seed Hawk Defendants and therefore it was a fine line as to whether to mount its own independent infringement defence as opposed to presenting a united front to the trial judge by trying to influence the nature of the Seed Hawk Defendants' defence. The Simplot Defendant opted for this latter strategy to its ultimate benefit, but it is simplistic for the Plaintiffs to assert that counsel for the Simplot Defendant did not have to be engaged at all stages of the proceedings. The Plaintiffs chose to make it a defendant throughout, resisted settlement, were the subject of an adverse award of a higher scale of costs and must now accept that the trial judge has awarded the full costs throughout for its complete and exhaustive defence.
The Plaintiffs' Overview
[19] The Plaintiffs took exception to references to settlement offers as indicative of anti-competitive intent and noted that the Costs Decision has already fully canvassed and considered the extent of the effect of settlement offers on costs, ie. via a modest adjustment upwards of the scale of costs, and by refusing doubling of costs under Rule 420. Therefore, the settlement offers are irrelevant for the assessment of costs. However, should the settlement discussions somehow be deemed relevant, the Plaintiffs' evidence establishes the errors and unreliability of the Seed Hawk Defendants' evidence on this point.
[20] Although the multiple bills of costs effectively equate to discrete assessments of costs subject however to set-offs, they are in practical terms intertwined, ie. many of the objections to the Seed Hawk Defendants' costs apply equally or to a lesser extent to the Simplot Defendant's costs. There is no adjective other than enormous to describe costs claimed by both the Seed Hawk Defendants and the Simplot Defendant (in the main bills only for each, some $265,000.00 and $202,000 respectively for counsel fees and some $449,000.00 and $71,000.00 respectively for disbursements). The Plaintiffs conceded that this was a long and expensive trial, but these claimed costs are excessive by any objective standard. The factors asserted by the Seed Hawk Defendants simply duplicate those considered and disposed of in the Costs Decision and are therefore irrelevant at this point. The mere fact of long and expensive litigation does not absolve litigants from their responsibility to proceed reasonably, with particular regard to disbursements. The process of assessment of costs requires that each item of costs be examined critically within those parameters. With particular regard to the Seed Hawk Defendants, most of the claimed disbursements do not meet the threshold of reasonable necessity both for the work performed and the amounts claimed. The Plaintiffs conceded my point concerning a result of nil dollars for disbursements upon assessment being absurd in the face of the reality of the expenditure of monies, but argued that the insufficiency here of the evidence warrants reductions. Counsel fees require a somewhat different approach given the terms of the Costs Decision.
[21] The Plaintiffs argued that evidence of similar wording for the independent claims undercuts the assertion that this litigation was made immeasurably more difficult as a function of the need to mount a discrete defence for each. The Plaintiffs pointed to para. [23] of the Costs Decision in arguing that allegations of late service of expert affidavits prior to the 1st Trial Portion in 2000 are irrelevant because the Costs Decision represents the final findings on their impact on costs and it is therefore not open to me to revisit said findings by factoring them into the assessment of costs. The reference to Mr. Blair's unsuccessful motion for adjournment further undercuts the Seed Hawk Defendants' position because the Court concluded then that an adjournment was not appropriate in the circumstances, but the Seed Hawk Defendants now urge, years after said finding by the Court, that I should somehow find that the Plaintiffs' conduct warrants a taxing up factor for costs. A similar argument applies to the assertions of various evidentiary objections as a factor for costs, again because the Costs Decision has already fully accounted for these.
[22] The Plaintiffs argued that the reality of the limited monopoly of a patent means that a prolonged trial worsened their position and this therefore undercuts the premise that the Plaintiffs were attempting to wage protracted litigation to drive the Seed Hawk Defendants out of business. There is nothing in the Trial Decision suggesting a finding of anti-competitive conduct by the Plaintiffs. The Plaintiffs argued that the record establishes that the issues of named personal defendants represented only a small portion of the trial and, in any event, the Costs Decision confirms their irrelevance:
[25] I do not believe that the plaintiffs' decision to name the individual directors as defendants ought to affect the assessment of costs. The law in this area is complex. There were circumstances which could have justified findings of facts which would have supported the plaintiffs' allegations. The fact that I did not draw the conclusions which the plaintiffs urged upon me does not mean that they acted improperly in adding the directors as defendants.
The Plaintiffs noted that counsel for all parties agreed on the Winnipeg venue before the case management judge. The historical practice of choosing a venue as close as possible to the defendants, ie. Regina, was impractical because that would have entailed travel for everyone.
INVALIDITY
The Seed Hawk Defendants' Position on Costs Associated with Issues of Invalidity
[23] The Seed Hawk Defendants argued that, notwithstanding silence on the matter of costs in the Court's dismissal of their counterclaim for a declaration of invalidity, the Trial Decision and the Costs Decision intended that they receive an unqualified award of full assessed costs for their defence of non-infringement in the main action, which was predicted in part on elements of invalidity. The introductory paragraphs of the Trial Decision, and in particular para. [3] thereof, indicate that the trial judge understood the role of invalidity in the defence of non-infringement. Further, the trial judge did not direct that their costs associated with the defence of invalidity in the main action be factored down to preclude costs that could be said to be attributable to the counterclaim. The Costs Decision read:
... [41] ... I now turn to the plaintiffs' motion record with respect to the costs awarded to them. While it does not appear first in the material which they have filed, the most substantial claim which they advance is their claim for the successful defence of the counterclaim alleging invalidity of their patent. Mr. Halford has reviewed the transcript and, in his opinion, roughly the same amount of time was spent dealing with invalidity as was spent on issues of infringement. The concluding paragraph of his affidavit provides as follows:
36. The general practice with respect to costs is that they are awarded in the cause. As a result of the court's findings with respect to the validity of the patent, the plaintiffs submit that they should be entitled to their costs associated with their successful defence of the allegation of that the patent in suit was invalid, a position advanced at trial by both the Seed hawk defendants and Simplot.
[42] This case is on all fours with Illinois Tool Works Inc. v. Cobra Anchors Co. (2003), 312 N.R. 184, 2003 FCA 358 (F.C.A.) (Illinois Tool Works Inc.) in which the successful defendant appealed from an order that each party bear their own costs. As in this case, a claim for infringement was met with a defence of invalidity as well as a counterclaim for invalidity. The claim for infringement was dismissed, as was the counterclaim for invalidity. The trial judge considered that it was a case of divided success and held that each party should bear their own costs. The Federal Court of Appeal allowed the appeal from the order as to costs in the following terms:
[10] The facts of the present instance bring to light the following sequence of events. The respondent was sued for patent infringement by the plaintiffs/appellants. In response to the lawsuit, the respondent raised a defence which, as is often the case in these matters, had two components: first, it submitted that its products did not infringe th