Rovi Guides, Inc. v. Videotron Ltd.

Rovi Guides, Inc. v. Videotron Ltd.
Court (s) Database
Federal Court Decisions
Date
2022-06-30
Neutral citation
2022 FC 981
File numbers
T-841-21
Decision Content
Date: 20220630
Docket: T-841-21
Citation: 2022 FC 981
Ottawa, Ontario, June 30, 2022
PRESENT: The Hon Mr. Justice Henry S. Brown
BETWEEN:
ROVI GUIDES, INC.
Plaintiff
and
VIDEOTRON LTD.
Defendant
JUDGMENT AND REASONS
I. Nature of the matter
[1] This is a motion brought by the Defendant pursuant to Rule 51 of the Federal Courts Rules, SOR/98-106 [Federal Courts Rules], appealing the Order [Order] of Case Management Judge Aalto [CMJ], dated March 22, 2022, which dismissed the Defendant’s motion to strike portions of the Plaintiff’s Amended Statement of Claim [ASOC] as disclosing no reasonable cause of action, and in the alternative for particulars of the allegations.
II. Facts
[2] The underlying proceeding is a patent infringement action brought by the Plaintiff Rovi Guides Inc. [Rovi] against the Defendant Videotron Ltd. [Videotron] related to four patents. The four patents concern certain digital entertainment technologies including Interactive Program Guides [IPG] and various features of IPG. IPGs allow users to find programming, navigate from one channel to the next or one source to the next, search for content, record content, view content remotely, and more.
[3] Rovi is engaged in the development of digital entertainment technologies. It licenses its technologies to various telecommunication companies. The Defendant Videotron is a previous licensee of Rovi but its license expired in 2016 and has not been renewed.
[4] Since 2016 Videotron has marketed products called “illico” and “illico TV” and more recently a new product called “Helix” or “Helix TV”. All four patents are alleged to be infringed by Helix TV, and two of Rovi’s patents are alleged to be infringed by illico TV.
[5] As noted by the CMJ, the Amended Statement of Claim [ASOC] is extensive. The ASOC is 47 pages in length, and has in addition four schedules containing 358 pages setting our “non-limiting” particulars of infringement for each of the asserted claims of Rovi’s patents.
[6] Rovi’s ASOC alleges five infringing actions for which Videotron is responsible:
direct infringement by Videotron;
infringement by common design;
induced infringement;
agency; and
direct infringement as a result of attribution of Comcast or subscribers’ actions.
[7] Of these only two are at issue. Videotron takes issue with the allegation of infringement by common design [common design] and with the allegation of infringement by attribution [attribution]. Videotron unsuccessfully moved before the CMJ for an order striking these two allegations, arguing they are not recognized in Canadian law and therefore ought to be struck as disclosing no reasonable cause of action under Rule 221(1)(a) of the Federal Courts Rules, SOR/98-106 [Rules].
[8] The CMJ defines common design as:
Infringement by common design arises where one party is found to be a joint tortfeasor when another party commits the tort in furtherance of a common plan. An essential element of the common design is that the parties must agree on a common action and the act of infringement must be in furtherance of that agreement. There must be a common design to do the act that is alleged to infringe.
[9] Regarding attribution, the CMJ notes:
The second impugned cause of action is infringement by “attribution”. Canadian courts have not yet dealt with this developing cause of action. The principle of “attribution” in patent infringement actions is discussed in Akamai Technologies Inc. v Limelight Network, 797 F.3d 1020 (2015), a decision of the U.S. Federal Circuit Court of Appeals. This case recognizes infringement by attribution and describes it as follows:
Direct infringement . . . occurs where all steps of a claimed method are performed or attributable to a single entity. . . . Where more than one actor is involved in practicing the steps, a court must determine whether the acts of one are attributable to the other such that a single entity is responsible for the infringement. We will hold an entity responsible for others’ performance of method steps in two sets of circumstances: (1) where that entity directs or controls others’ performance, and (2) where the actors form a joint enterprise.
. . .
. . . We conclude that liability can also be found when an alleged infringer conditions participation in an activity or receipt of a benefit upon performance of a step or steps of a patented method and establishes the manner or timing of that performance. . . In those instances, the third party’s actions are attributed to the alleged infringer such that the alleged infringer becomes the single actor chargeable with direct infringement. Whether a single actor directed or controlled the acts of one or more third parties is a question of fact . . . [citations omitted]
In essence, direct infringement requires a single entity to perform all of the steps of a method claim. However, as described in Akamai where the steps of a method claim are divided between two or more actors the concept of attribution arises by way of indirect infringement by one of the actors.
[10] Videotron also submitted to the CMJ that the allegations of common design and attribution lack material facts and for that reason should also be struck under Rule 174:
33. In its pleading (paragraphs from 49 to 56), Rovi alleges that at law certain actions of third parties Comcast and/or Videotron subscribers are to be “ascribed” to Videotron and that on this basis, Rovi is able to establish infringement by Videotron. Such “ascribing” or “the attributing” of actions of non-parties so as to support allegations of patent infringement is not recognized in Canadian law. Further, Rovi has not pleaded any material facts to support these allegations, even if such an “ascribing”/”attributing” were known in Canadian law. These paragraphs ought to be struck.
…
62. In paragraph 67, Rovi purports to plead that unidentified “activities” of Videotron and Comcast amount to infringement by common design.
63. There is no authority in Canadian law for the proposition that a person can be found liable for patent infringement on the theory of common design. This paragraph should be struck.
64. In the alternative, Rovi has only pleaded the bare allegation that there was ‘common design’ for a “common purpose’ but not provided any supporting material facts. In fact, in paragraph 68 of the Statement of Claim, Rovi admits that it has no material facts relating to the purported “common purpose”.
65. While Courts have on occasion permitted the “novel” pleading of infringement by common design, materials facts delineating the roles each of the identified entities are required.
66. Under UK law, which has not been adopted in Canada, liability as joint tortfeasors pursuant to a “common design” requires establishing that there was a “common design” between the entities to do the acts which amount to infringement; and the primary tortfeasor acted further to that design.
67. As noted above, Rovi has not identified any common design or common purpose beyond delivery of Helix TV which relate to the alleged infringing functionality. Rovi has also not provide any material facts on what acts were purported to be carried out pursuant to a common design that relates to the implicated patented features. Rovi has not even identified who it alleges is the primary tortfeasor alleged to directly infringe the asserted patents.
68. Therefore, these paragraphs ought to be struck as not disclosing a cause of action, nor including any material facts. Merely pleading the existence of a contact or an agreement is not sufficient to delineate the roles of the parties in the purported common design.
A. CMJ’s Order
[11] On March 22, 2022, the CMJ dismissed the Defendant’s motion to strike portions of the ASOC as disclosing no reasonable cause of action. The CMJ also refused the Defendant’s alternative request for further particulars.
[12] The CMJ conducted a two-step analysis, first assessing whether common design and direct infringement by attribution disclosed valid causes of action in Canadian law. The CMJ then assessed whether those causes of action were sufficiently particularized. The CMJ concluded common design and attribution were both viable in law. He then determined each was sufficiently particularized.
(1) Common design pleadings and particulars
[13] Regarding Videotron’s argument that infringement by common design are not recognized in Canadian law and ought to be struck, CMJ Aalto relied on Nevsun Resources Ltd v Araya, 2020 SCC 5, and La Rose v Canada, 2020 FC 1008 [per Manson J] at paras 16-19 [La Rose].
[14] The CMJ held the door is open to plead common design in a patent infringement action. As noted, the CMJ defined common design:
Infringement by common design arises where one party is found to be a joint tortfeasor when another party commits the tort in furtherance of a common plan. An essential element of the common design is that the parties must agree on a common action and the act of infringement must be in furtherance of that agreement. There must be a common design to do the act that is alleged to infringe.
[15] The CMJ noted the leading authority on the tort of common design emanates from the UK Supreme Court, see Fish & Fish Ltd v Sea Shepherd UK, [2015] UKSC 10. The CMJ noted this Court has considered common design for patent infringement in two recent cases: Packers Plus v Essential Energy, 2017 FC 1111 [per O’Reilly J], aff’d in 2019 FCA 96 (although Justice O’Reilly’s ruling on common design was not an issue before the FCA) and Genentech v Celltrion, 2019 FC 293 [per Aylen P as she then was]. In light of these authorities, CMJ Aalto found the door is open to plead common design in a patent infringement action and therefore determined the common design cause of action should not be struck.
[16] The CMJ also dismissed a request for further and better particulars in relation to “common design.”
(2) Attribution pleadings and particulars
[17] Regarding infringement by “attribution” as an impugned cause of action, the CMJ agreed with Videotron that the concept of attribution has not yet been specifically considered in patent infringement cases. However, the CMJ held, correctly in my view, that attribution is a well-established principle in tort law. The CMJ found while importing the tort concept of attribution into patent infringement is novel it should not be struck because it cannot be determined to be without any prospect of success at this stage.
[18] The CMJ also dismissed a request for further and better particulars in relation to “attribution.”
[19] Therefore, the CMJ Ordered:
The motion insofar as it seeks to strike common design and attribution is dismissed.
This motion insofar as it seeks further and better particulars is dismissed.
Costs to Rovi. If the parties cannot agree, brief submissions may be made to the Court within 20 days of the date of this order.
[20] Videotron now appeals the Order of CMJ Aalto on the issue of “attribution” and “common design”, seeking to strike paragraphs 51 to 57 (attribution) and 67 to 69 (common design) of the ASOC.
III. Issues
[21] The issues are:
Did the CMJ err in finding allegations of patent infringement by common design should not be struck on the ground they fail to disclose a reasonable cause of action?
Did the CMJ err in holding allegations of patent infringement by attribution should not be struck as disclosing a reasonable cause of action?
Did the CMJ err in holding the ASOC and schedules disclosed sufficient material facts of common design such that no further particulars are required?
Did the CMJ err in holding the ASOC and schedules disclosed sufficient material facts of attribution such that no further particulars are required?
IV. Standard of Review
[22] On an appeal from a discretionary order of a Prothonotary under Rule 51, the Court applies the standards of review in Hospira Healthcare Corp. v Kennedy Institute of Rheumatology, 2016 FCA 215 [per Nadon JA] at paras 27 and 66 [Hospira]. The Federal Court may only interfere with a discretionary decision of a Prothonotary if the Prothonotary made a palpable and overriding error on a question of fact or mixed fact and law, or erred on a pure question of law. This standard is set out by the Supreme Court of Canada in Housen v Nikolaisen, 2002 SCC 33 [Housen]:
1 A proposition that should be unnecessary to state is that a court of appeal should not interfere with a trial judge's reasons unless there is a palpable and overriding error. The same proposition is sometimes stated as prohibiting an appellate court from reviewing a trial judge's decision if there was some evidence upon which he or she could have relied to reach that conclusion.
[…]
8 On a pure question of law, the basic rule with respect to the review of a trial judge’s findings is that an appellate court is free to replace the opinion of the trial judge with its own. Thus the standard of review on a question of law is that of correctness: Kerans, supra, at p. 90.
[…]
10 The standard of review for findings of fact is that such findings are not to be reversed unless it can be established that the trial judge made a "palpable and overriding error": Stein v. The Ship "Kathy K", 1975 CanLII 146 (SCC), [1976] 2 S.C.R. 802, at p. 808; Ingles v. Tutkaluk Construction Ltd., [2000] 1 S.C.R. 298, 2000 SCC 12, at para. 42; Ryan v. Victoria (City), 1999 CanLII 706 (SCC), [1999] 1 S.C.R. 201, at para. 57. While this standard is often cited, the principles underlying this high degree of deference rarely receive mention. We find it useful, for the purposes of this appeal, to review briefly the various policy reasons for employing a high level of appellate deference to findings of fact.
[…]
36 […] Matters of mixed fact and law lie along a spectrum. Where, for instance, an error with respect to a finding of negligence can be attributed to the application of an incorrect standard, a failure to consider a required element of a legal test, or similar error in principle, such an error can be characterized as an error of law, subject to a standard of correctness. Appellate courts must be cautious, however, in finding that a trial judge erred in law in his or her determination of negligence, as it is often difficult to extricate the legal questions from the factual. It is for this reason that these matters are referred to as questions of "mixed law and fact". Where the legal principle is not readily extricable, then the matter is one of "mixed law and fact" and is subject to a more stringent standard. The general rule, as stated in Jaegli Enterprises, supra, is that, where the issue on appeal involves the trial judge's interpretation of the evidence as a whole, it should not be overturned absent palpable and overriding error.
[Emphasis added]
[23] Justice Stratas in Canada v South Yukon Forest Corporation, 2012 FCA 165 explains what the Applicant must show to establish a palpable and overriding error:
[46] Palpable and overriding error is a highly deferential standard of review: H.L. v. Canada (Attorney General), 2005 SCC 25, [2005] 1 S.C.R. 401; Peart v. Peel Regional Police Services (2006) 2006 CanLII 37566 (ON CA), 217 O.A.C. 269 (C.A.) at paragraphs 158-59; Waxman, supra. “Palpable” means an error that is obvious. “Overriding” means an error that goes to the very core of the outcome of the case. When arguing palpable and overriding error, it is not enough to pull at leaves and branches and leave the tree standing. The entire tree must fall.
[Emphasis added]
[24] The Federal Court of Appeal, again per Justice Stratas JA, provides additional guidance on palpable and overriding error in Mahjoub v Canada (Citizenship and Immigration), 2017 FCA 157:
[61] Palpable and overriding error is a highly deferential standard of review: Benhaim v. St. Germain, 2016 SCC 48, [2016] 2 S.C.R. 352 at para. 38; H.L. v. Canada (Attorney General), 2005 SCC 25, [2005] 1 S.C.R. 401. When arguing palpable and overriding error, it is not enough to pull at leaves and branches and leave the tree standing. The entire tree must fall. See Canada v. South Yukon Forest Corporation, 2012 FCA 165, 431 N.R. 286 at para. 46, cited with approval by the Supreme Court in St. Germain, above.
[62] “Palpable” means an error that is obvious. Many things can qualify as “palpable.” Examples include obvious illogic in the reasons (such as factual findings that cannot sit together), findings made without any admissible evidence or evidence received in accordance with the doctrine of judicial notice, findings based on improper inferences or logical error, and the failure to make findings due to a complete or near-complete disregard of evidence.
[63] But even if an error is palpable, the judgment below does not necessarily fall. The error must also be overriding.
[64] “Overriding” means an error that affects the outcome of the case. It may be that a particular fact should not have been found because there is no evidence to support it. If this palpably wrong fact is excluded but the outcome stands without it, the error is not “overriding.” The judgment of the first-instance court remains in place.
[65] There may also be situations where a palpable error by itself is not overriding but when seen together with other palpable errors, the outcome of the case can no longer be left to stand. So to speak, the tree is felled not by one decisive chop but by several telling ones.
[Emphasis added]
[25] On an appeal under Rule 51, a case management judge is assumed to be very familiar with the particular circumstances and issues in a proceeding and therefore, a case management judge’s decision must be afforded deference, especially on factually suffused questions, see Hughes v Canada (Human Rights Commission), 2020 FC 986 [per Little J] at para 67 [Hughes]; Sawridge Band v R, 2001 FCA 338, at para 11; and Merck & Co v Apotex Inc., 2003 FCA 438, at para 12.
[26] Videotron submits the errors committed by the CMJ are errors of law, and therefore submits the correctness standard applies.
[27] Rovi submits the standard of review is palpable and overriding error, relying on Elbit Systems Electro-optics Elop Ltd. v Selex ES Ltd., 2016 FC 1129 where Justice Martineau states:
[15] The decision to strike a pleading is a discretionary one. I have considered the respective representations of the parties in light of the applicable standard of review to be applied in the present case. However, I disagree with the defendant’s submission that in the case at bar, the appropriate standard of review is correctness. Rather, the appropriate standard of review is a palpable and overriding error as defined in Housen v Nikolaisen, 2002 SCC 33, [2002] 2 SCR 235 [Housen].
[16] Recently, a panel of 5 judges from the Federal Court of Appeal reviewed the applicable standard of review governing discretionary decisions made by prothonotaries (Hospira Healthcare Corporation v Kennedy Institute of Rheumatology, 2016 FCA 215, [2016] FCJ No 943 [Hospira]). As stated by the Federal Court of Appeal, the supervisory role of judges over prothonotaries enunciated in Rule 51 no longer requires that discretionary orders of prothonotaries be subject to de novo hearings. In accordance with Housen, absent error on a question of law or an extricable legal principle, intervention is warranted only in case of palpable and overriding error.
[17] The Federal Court of Appeal concluded that the Housen standard should be applied in reviewing discretionary decisions of judges and prothonotaries. This standard establishes that with respect to factual conclusions reached by trial judges, the applicable standard is that of palpable and overriding error, and with respect to questions of law and questions of mixed fact and law, where there was an extricable legal principle at issue, the applicable standard is that of correctness: Hospira at para 66, citing to paras 19 to 37 of Housen; para 69; para 71, citing to paras 25 to 29 of Imperial Manufacturing Group Inc v Decor Grates Incorporated, 2015 FCA 100, [2016] 1 FCR 246 79; para 74, citing to para 12 of Turmel v Canada, 2016 FCA 9, 481 NR 139; and para 79.
[18] In the present case, since the Prothonotary did not make any error while describing the applicable test and legal principles governing the striking out of a pleading under Rule 221, and since the defendant is challenging the Prothonotary’s application of Rule 221 on the specific facts of the case, the applicable standard of review for such question of mixed fact and law should be that of palpable and overriding error. No final decision has been made by the Prothonotary on the merit of the allegations of infringement and induced infringement made by the plaintiff in its statement of claim. I doubt very much that the issues raised today by the defendant in this appeal truly deal with a pure question of law or an extricable legal principle at issue.
[19] While the impugned order was made by the Prothonotary a few weeks before her designation as the Case Management Judge in this matter, considering her vast experience in these types of file, as observed by the Federal Court of Appeal in Hospira at paragraph 103: “[…] it is always relevant for motions judges, on Rule 51 appeal, to bear in mind that the case managing prothonotary is very familiar with the particular circumstances and issues of a case and that, as a result, intervention should not come lightly. This does not mean, however, that errors, factual or legal, should go undetected. In the end, “elbow room” is simply a term signalling that deference, absent a reviewable error, is owed, or appropriate, to a case managing prothonotary – no more, no less.” Be that as it may, considering that “discretionary orders of prothonotaries should only be interfered with when such decisions are incorrect in law or are based on a palpable and overriding error in regard to the facts” (Hospira at para 64), I have no ground to interfere with the order made by the Prothonotary, having found no error of law or an error of the type that falls within the palpable and overriding error component of the Housen standard.
[Emphasis added]
[28] Respectfully, I conclude from the foregoing that the applicable standard of review on the reasonable cause of action issue is palpable and overriding error. I find this because of the jurisprudence, and because a decision striking a pleading is a discretionary one and, in addition, entails a question of mixed fact and law. I am unable to conclude the CMJ’s Order in relation to Videotron’s common design or attribution causes of action issue entails either a pure question of law or an extricable legal principle.
[29] In terms of the alternative claim for particulars, I conclude the test is also palpable and overriding error. The sufficiency of pleading material facts under Rule 174 is a question of mixed fact and law, and raises neither a pure question of law nor an extricable legal principle.
V. Relevant Provisions
[30] Rule 51(1) of the Federal Courts Rules:
Appeal
Appel
51(1) An order of a prothonotary may be appealed by a motion to a judge of the Federal Court.
51 (1) L’ordonnance du protonotaire peut être portée en appel par voie de requête présentée à un juge de la Cour fédérale.
[31] Rule 174 of the Federal Courts Rules:
Material facts
Exposé des faits
174 Every pleading shall contain a concise statement of the material facts on which the party relies, but shall not include evidence by which those facts are to be proved.
174 Tout acte de procédure contient un exposé concis des faits substantiels sur lesquels la partie se fonde; il ne comprend pas les moyens de preuve à l’appui de ces faits.
[32] Rule 181 of the Federal Courts Rules:
Particulars
Précisions
181 (1) A pleading shall contain particulars of every allegation contained therein, including
181 (1) L’acte de procédure contient des précisions sur chaque allégation, notamment:
(a) particulars of any alleged misrepresentation, fraud, breach of trust, wilful default or undue influence; and
a) des précisions sur les fausses déclarations, fraudes, abus de confiance, manquements délibérés ou influences indues reprochés;
(b) particulars of any alleged state of mind of a person, including any alleged mental disorder or disability, malice or fraudulent intention.
b) des précisions sur toute allégation portant sur l’état mental d’une personne, tel un déséquilibre mental, une incapacité mentale ou une intention malicieuse ou frauduleuse.
Further and better particulars
Précisions supplémentaires
(2) On motion, the Court may order a party to serve and file further and better particulars of any allegation in its pleading.
(2) La Cour peut, sur requête, ordonner à une partie de signifier et de déposer des précisions supplémentaires sur toute allégation figurant dans l’un de ses actes de procédure.
[33] Rule 221(1) of the Federal Courts Rules:
Motion to strike
Requête en radiation
221 (1) On motion, the Court may, at any time, order that a pleading, or anything contained therein, be struck out, with or without leave to amend, on the ground that it
221 (1) À tout moment, la Cour peut, sur requête, ordonner la radiation de tout ou partie d’un acte de procédure, avec ou sans autorisation de le modifier, au motif, selon le cas:
(a) discloses no reasonable cause of action or defence, as the case may be,
a) qu’il ne révèle aucune cause d’action ou de défense valable;
(b) is immaterial or redundant,
b) qu’il n’est pas pertinent ou qu’il est redondant;
(c) is scandalous, frivolous or vexatious,
c) qu’il est scandaleux, frivole ou vexatoire;
(d) may prejudice or delay the fair trial of the action,
d) qu’il risque de nuire à l’instruction équitable de l’action ou de la retarder;
(e) constitutes a departure from a previous pleading, or
e) qu’il diverge d’un acte de procédure antérieur;
(f) is otherwise an abuse of the process of the Court,
f) qu’il constitue autrement un abus de procédure.
and may order the action be dismissed or judgment entered accordingly.
Elle peut aussi ordonner que l’action soit rejetée ou qu’un jugement soit enregistré en conséquence.
Evidence
Preuve
(2) No evidence shall be heard on a motion for an order under paragraph (1)(a).
(2) Aucune preuve n’est admissible dans le cadre d’une requête invoquant le motif visé à l’alinéa (1)a).
VI. Analysis
A. Did the CMJ err in finding allegations of patent infringement by common design should not be struck on the ground they fail to disclose a reasonable cause of action?
[34] The crux of Videotron’s appeal is set out in paragraph 2 of its submission: “In his Order, the CMJ erred in law by concluding that it is not proper for a pleaded allegation founded on a novel question of law to be struck out at the pleadings stage of a proceeding.” This argument is repeated throughout Videotron’s memorandum. At paragraph 10, Videotron submits “The CMJ referenced the Supreme Court of Canada’s decision in Nevsun Resources Ltd v Araya‎ as an ‎example of the ‘ample authority’ that ‘a novel cause of action should not be struck at ‎this stage of the proceeding.’” At paragraph 12, Videotron submits: “He finally ‎concluded that a novel cause of action should not be struck at this stage of the ‎proceeding.” At paragraph 15, Videotron argues “The conclusions of the CMJ on both these causes of action were grounded on the repeated assertion that ‘a novel cause of action should not be struck at this stage of the proceeding.’” At paragraph 29, it further argues “Given the statements of the Supreme Court in Nevsun and ALC, it was an error of law for the CMJ to hold simply that ’there is ample authority for the proposition that a novel cause of action should not be struck at this stage of the proceeding.’”
[35] The same point was made in Videotron’s oral submissions.
[36] Videotron submits a novel cause of action should not be allowed to stand simply because it is novel. I completely agree. This is an uncontroversial and well settled proposition of law: see Atlantic Lottery Corp. Inc. v Babstock, 2020 SCC 19 [Atlantic Lottery].
[37] By the same token, a novel cause of action should not be struck simply because it is novel.
[38] The test on a motion to strike for no cause of action involves considerations of far more than novelty, again per Atlantic Lottery:
[19] Of course, it is not determinative on a motion to strike that the law has not yet recognized the particular claim. The law is not static, and novel claims that might represent an incremental development in the law should be allowed to proceed to trial (Imperial Tobacco, at para. 21; Das v. George Weston Ltd., 2018 ONCA 1053, 43 E.T.R. (4th) 173, at para. 73; see also R. v. Salituro, 1991 CanLII 17 (SCC), [1991] 3 S.C.R. 654, at p. 670). That said, a claim will not survive an application to strike simply because it is novel. It is beneficial, and indeed critical to the viability of civil justice and public access thereto that claims, including novel claims, which are doomed to fail be disposed of at an early stage in the proceedings. This is because such claims present “no legal justification for a protracted and expensive trial” (Syl Apps Secure Treatment Centre v. B.D., 2007 SCC 38, [2007] 3 S.C.R. 83, at para. 19). If a court would not recognize a novel claim when the facts as pleaded are taken to be true, the claim is plainly doomed to fail and should be struck. In making this determination, it is not uncommon for courts to resolve complex questions of law and policy (see e.g. Imperial Tobacco; Cooper v. Hobart, 2001 SCC 79, [2001] 3 S.C.R. 537; Syl Apps; Alberta v. Elder Advocates of Alberta Society, 2011 SCC 24, [2011] 2 S.C.R. 261).
[Emphasis added]
[39] That said, upon review of the Reasons of the CMJ, and with respect, there is no merit to Videotron’s submission. I make this finding because the CMJ did not hold that a novel cause of action should be allowed to stand “simply” because it is novel. With the greatest respect, that is not what the Reasons of the CMJ, fairly and fully considered, actually were in this case. Thus this aspect of this appeal will be dismissed as set out below.
[40] Videotron’s submissions ask this Court to take one sentence out of context, and use it to mischaracterize the legal test actually applied on the issue of whether or not the ASOC disclosed a reasonable cause of action in terms of common design.
[41] I start with reproducing what the CMJ’s Reasons actually say:
Page 3
….
Rovi alleges five infringing actions by Videotron as follows: direct infringement by Videotron; infringement by common design; induced infringement; agency; and direct infringement as a result of attribution of Comcast or subscribers’ actions. Of these causes of action, Videotron takes issue with infringement by common design and infringement by attribution. Videotron argues they are not recognized in Canadian law and ought to be struck.
Page 4
However, there is ample authority for the proposition that a novel cause of action should not be struck at this stage of the proceeding [see, for example, Nevsun Resources Ltd v Araya, 2020 SCC 5, and La Rose v Canada, 2020 FC 1008]. In the latter case, the Honourable Justice Michael Manson set out the general guidelines on a motion to strike as follows:
[16] The test on a motion to strike is whether it is plain and obvious that the pleadings disclose no reasonable cause of action, or that the claim has no reasonable prospect of success (Hunt v Carey Canada Inc, [1990] 2 SCR 959 at 980; R v Imperial Tobacco Canada Ltd, 2011 SCC 42 at para 17 [Imperial Tobacco]). The threshold to strike a claim is high and the matter must proceed to trial where a reasonable prospect of success exists.
[17] The material facts pleaded in the Statement of Claim must be taken as true, unless the allegations are based on assumption and speculation (Operation Dismantle v The Queen, [1985] 1 SCR 441 at para 27 [Operation Dismantle]). It is incumbent on the Plaintiffs to clearly plead the facts in sufficient detail to support the claims and the relief sought. The material facts form the basis upon which to evaluate the possibility of the success of the claim (Imperial Tobacco, above at para 22; Mancuso v Canada (National Health and Welfare), 2015 FCA 227 at paras 16-17, leave to appeal to SCC refused, 36889 (23 June 2016)).
[18] Further, the pleadings must be read as generously as possible, erring on the side of permitting a novel but arguable claim to proceed to trial (Imperial Tobacco at para 21; Atlantic Lottery v Corp Inc v Babstock, 2020 SCC 19 at para 19 [Atlantic Lottery]).
[19] The test on a motion to strike considers the context of the law and the litigation process. It “operates on the assumption that the claim will proceed through the court system in the usual way – in an adversarial system where judges are under a duty to apply the law as set out in (and as it may develop from) statutes and precedents” (Imperial Tobacco at para 25).
These are the principles applicable to Videotron’s motion to strike Rovi’s pleas of attribution and common design.
[42] Both parties agreed with and relied upon this statement of principles from La Rose. I adopt it as well. The CMJ adopted it also - he set them out, and states those are the principles on a motion to strike. The CMJ did this in the last sentence just quoted above.
[43] While the first sentence on page 4 quoted above, taken out of context, might seem to support Videotron’s argument, I find it does not reflect the law actually stated by the CMJ. That is manifest from reading the above.
[44] Importantly, the sentence Videotron takes out of context also inaccurately reflects how the CMJ considered and applied the principles to the issue of whether common design is a reasonable cause of action.
[45] In my view, as will be seen, the CMJ sufficiently considered and applied the proper principles to the allegation of common design, and did not, as alleged by Videotron, decide the matter based “simply” on novelty.
[46] To start with, here are the CMJ’s actual reasons for not striking the common design pleadings as disclosing no reasonable cause of action:
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Infringement by common design arises where one party is found to be a joint tortfeasor when another party commits the tort in furtherance of a common plan. An essential element of the common design is that the parties must agree on a common action and the act of infringement must be in furtherance of that agreement. There must be a common design to do the act that is alleged to infringe.
The leading authority on the tort of common design emanates from the UK Supreme Court. In Sea Shepherd UK v Fish & Fish Ltd, [2015] UKSC 10, the UK Supreme Court reviewed the principles of joint tortfeasance by common design. The Court observed:
55. It seems to me that, in order for the defendant to be liable to the claimant in such circumstances, three conditions must be satisfied. First, the defendant must have assisted the commission of an act by the primary tortfeasor; secondly, the assistance must have been pursuant to a common design on the part of the defendant and the primary tortfeasor that the act be committed; and, thirdly, the act must constitute a tort as against the claimant. …
In Canada, this Court has considered common design for patent infringement in two cases: Packers Plus v Essential Energy, 2017 FC 1111 [Packers Plus] and Genentech v Celltrion, 2019 FC 293 [Genentech].
In Packers Plus, the defendant supplied the system which, when used in open hole fracturing, fell within the relevant claims of the patent in suit. The defendant’s system was used by the company who owned and operated the wells for the fracturing operation. The defendant was also involved in pre-installation planning and design, assembling, installing, and operating the equipment, and providing an on-site supervisor. The Honourable Justice James O’Reilly held the defendant was not liable as a participant in a common design. He stated:
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48. In terms of liability for acting in concert with others, Packers has not pointed to any legal support for that theory of liability. Packers points to the well-known English case of Fabio Perini SPA v. LPC Group PLC, [2009] EWHC 1929 (Eng. Patents Ct.). There, Justice Floyd found that a company that installed a machine on the defendant's premises and enabled it to be operated according to the patented method was jointly liable with the defendant for infringement (at para 179). That finding was cited, in obiter, by Justice Johanne Gauthier in Bauer Hockey Corp. v. Easton Sports Canada Inc., 2011 FCA 83 (F.C.A.) at para 75. However, there is no authority in Canadian law for the proposition that a person can be found liable for infringement on the theory of common design. At common law, however, parties who act in concert to commit a tortious act can each be found liable if all of the parties involved arrived at an agreement to carry out the tort (Sea Shepherd UK v. Fish & Fish Ltd., [2015] UKSC 10 (U.K. S.C.) at para 40).
49. However, there is simply no evidence showing any such agreement between Essential and the other companies with whom it acted — operating companies, drilling companies, or fracturing companies. Therefore, Essential cannot be found liable for infringement based on a common design. [Emphasis added.]
In Genentech, Her Honour Prothonotary Aylen (as she then was) found the plea of common design in relation to patent infringement to be sufficiently pleaded. She noted:
40. This Court has previously held that while the concept of infringement by common design has not been applied in the context of a patent infringement action, its existence under Canadian law has been recognized. […]
41. In Hoffmann-La Roche et al v. Sandoz Canada Inc (Order dated November 15, 2018), I held that the use of the phrase “acting in concert” would fall within the concept of infringement by common design, as conceptually they are no different. As the claim was novel, I held that it should not be struck on a pleadings motion.
42. In this case, the Plaintiffs seek to plead that CTHC was acting in concert with the Additional Defendants toward the common goal of bringing HERZUMA to market, with each of CTHC and the Additional Defendants undertaking various steps in furtherance of that common goal, as detailed in the pleading and noted, in part, above.
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43. CTHC takes issue with the sufficiency of the material facts pleaded in the proposed amended pleadings, arguing that the proposed pleadings do not go far enough to particularize what acts each of CTHC and the Additional Defendants will do or have done in furtherance of the common design. I reject this assertion. I am satisfied that by delineating the roles of each of CTHC and the Additional Defendants in bringing HERZUMA to market, the Plaintiffs have pleaded a minimum level of sufficient material facts to support this cause of action against CTHC and so as to enable me to conclude that the proposed allegation is not doomed to fail. In reaching this finding, I am mindful that this allegation is premised, in large part, on acts that have not yet occurred, which is not surprising in an action under the Regulations. To require too high of a threshold for sufficient material facts in the circumstances would, in many circumstances, be unfair.
44. I am also satisfied that the allegation of acting in concert should be permitted to move forward against CTHC notwithstanding that the Additional Defendants have not been joined to the actions, as there is nothing in the case law relied upon by the parties that suggests that all potential joint tortfeasors must be impleaded to sustain a cause of action against one of them. [Emphasis added.]
In light of these authorities, the door is open to plead common design in a patent infringement action. That cau