Law Times

PAGE 14 CASELAW Internet and E-Commerce Law CaseLaw is a weekly summary of notable civil and criminal court decisions by the Supreme Court of Canada, the Federal Court of Canada, and all Ontario courts. FEDERAL COURT OF APPEAL Industrial and Intellectual Property PATENTS Acceptance of maintenance fees did not reinstate patent application. Application judge found that patent application was dead by reason of failure by appellant's authorized correspondent to pay maintenance fees before end of grace period. Appeal was dis- missed. Patent Office can only deal with applicant's authorized correspondent. Authorized correspondent only becomes so when required documents were filed in Patent Office. Acceptance of maintenance fees, whether within or out- side reinstatement period, from someone other than applicant's authorized correspondent did not reinstate patent application. Further, there was no basis for invoking Federal Court's equi- table jurisdiction on facts of this case. Excelsior Medical Corp. v. Canada (Attorney General) (Nov. 3, 2011, F.C.A., Noel, Pelletier and Layden-Stevenson JJ.A., File No. A-175-11) Decision at 200 A.C.W.S. (3d) 1169 was affirmed. 208 A.C.W.S. (3d) 178 (6 pp.). Insurance ENTITLEMENT Hours of insurable employment accumulated before person left employment excluded from computation Employee was denied employ- ment insurance benefits. Board of refugees allowed employee's appeal. Umpire dismissed appeal from decision of Board of Referees. Umpire held s. 30(5) of Employment Insurance Act (Can.), did not preclude previous hours accumulated from work at second job from counting towards employment insurance benefits in circumstances when claimant left first job without just cause. Crown sought judi- cial review of umpire's decision. Application for judicial review was allowed. Section 30(5) of Act was ambiguous. Reference to French text eliminated any ambiguity in English version. French version made it clear that in circumstances absent just cause where individual volun- tarily left employment, hours of insurable employment accumu- lated in employment before date on which person left employ- ment were excluded from com- putation in relation to qualifica- tion for benefits. Umpire erred in interpreting s. 30(5). Canada (Attorney General) v. Trochimchuk (Sep. 27, 2011, F.C.A., Sharlow, Layden- Stevenson and Stratas J.A., File No. A-61-11) 208 A.C.W.S. (3d) 85 (10 pp.). TAX COURT OF CANADA Taxation INCOME TAX Research conducted was for benefit of employer and not appellant's own purposes Appellant obtained doctorate degree in 2005 and was hired to conduct postdoctoral research. Appellant received amount of $36,601 for postdoctoral research. Appellant appealed Minister's assessment whereby Minister refused to consider amount of $36,601 to be fel- lowship. Appeal dismissed. Issue was whether funds received by appellant were employment income. Work contract signed by appellant referred to work to be completed as postdoc- toral research. Work contract resembled employment con- tract in every respect. Although appellant's professor testified that These cases may be found online in BestCase and other electronic resources from Canada Law Book. To subscribe, please call 1-800-565-6967. ed as Effexor XR. One predeces- sor of plaintiff was pharmaceuti- cal company that wished to mar- ket generic version of Effexor XR. Predecessor applied for notice of compliance ("NOC") and served notice of allegation alleging patent would not be infringed. Rather than pursue litigation, second predecessor of plaintiff entered into license agreement with defendant per- mitting sale of generic version of Effexor XR. Defendant unsuc- cessfully brought application for order prohibiting Minister of Health from issuing NOC to first predecessor until expira- tion of patent. First predeces- sor received NOC from Health Canada and commenced sell- ing generic version of Effexor XR some 19 months later than it otherwise could have. First predecessor commenced action against defendant pursuant to there was student-profes- sor relationship this seemed improbable as professors did not pay salary to students. Although appellant conducted research on his own there was still relation- ship of subordination between appellant and professor. Offer of employment used term "sal- ary" as opposed to "fellowship". Appellant used his previously gained knowledge to complete his work. Research conducted was for benefit for employer and not for appellant's own pur- poses. Chabaud v. Canada (Sep. 20, 2011, T.C.C., Archambault J., File No. 2010-3488(IT)I) Reasons in French. 208 A.C.W.S. (3d) 219 (57 pp.). FEDERAL COURT Corporations AMALGAMATION Predecessor precluded from taking issue with conduct it had previously supported Motion by plaintiff for summa- ry trial in action against defen- dant for damages pursuant to s. 8 of Patented Medicines (Notice of Compliance) Regulations (Can.). Defendant was pharma- ceutical company that held pat- ent relating to medicine market- s. 8 of Regulations for damages arising from defendant's unsuc- cessful application. Predecessors and other companies ultimately amalgamated into plaintiff. Motion granted; Action dis- missed. Plaintiff was not enti- tled to pursue first predecessor's claim under s. 8 of Regulations. Summary trial was appropriate since issues were well-defined, facts were clearly set out in uncontroversial evidence, and resolving question of law would lead to expeditious conclusion of action. Plaintiff could have car- ried on first predecessor's claim but for fact that second prede- cessor was licensee of defendant. Defendant's action against first predecessor had been mandated by provision in license agree- ment that required defendant to protect its patent. Second pre- decessor had actually encour- aged and expected defendant to pursue application against first predecessor. Second predeces- sor had actually benefited from fact that first predecessor had been precluded from market- ing its generic version of Effexor XR pending resolution of defen- dant's application. Second pre- decessor was precluded by equi- table doctrine of election from taking issue with conduct that it had previously supported. Pursuant to s. 186(c) of Canada Business Corporations Act, con- sequences of second predeces- sor's election applied to plaintiff. Teva Canada Ltd. v. Wyeth LLC (Oct. 17, 2011, F.C., Hughes J., File No. T-1844-07) 208 A.C.W.S. (3d) 177 (36 pp.). Income Tax PROCEDURE Assessment of accused's finances did not accurately reflect his situation Accused applied to set aside order registering lien in favour www.lawtimesnews.com of Canada Revenue Agency against property he owned. Counsel for accused submitted that Canada Revenue Agency did not make full and fair dis- closure of facts and that accused was neither in process of liq- uidating his assets or moving to Florida. Lien would deprive accused of possibility of mort- gaging property to buy equip- ment for his new parking busi- ness venture. Application grant- ed, order set aside, Minister ordered to forthwith withdraw from taking or pursuing col- lection actions with respect to tax debt of accused. Accused granted costs. Characterization of re-assessments as being for "unreported income", state- ment that no notice of objection had been filed without further indicating that accused had clearly expressed intention to do so. Insinuation that fire that engulfed accused's house may have been result of arson, fail- ure to provide latest abstract of title showing that two mortgages had been discharged and lack of communication with accused or his accountant before seek- ing jeopardy Order, while not motivated by malice, severely undermined ex parte applica- tion. Court was of the view that accused had provided satisfac- tory explanations and showed that he intended to remain and live in Canada. Court found that accused had met his initial burden of proof that there were reasonable grounds to doubt that collection of all or any part of amount assessed against him would be jeopardized by a delay in collection of that amount. Court found that Minister's assessment of accused's finan- cial situation did not accurately reflect his true situation. R. v. Proulx (Oct. 28, 2011, F.C., de Montigny J., File No. T-1010- 11) 97 W.C.B. (2d) 552 (24 pp.). Industrial and Intellectual Property PATENTS No adduced evidence showing system performed essentially same as invention Action by assignee and licens- ee of patent against distributor for relief for patent infringe- ment. Patentee held patent for improved method and appara- tus for pre-heating ventilation air for building. Invention in patent was essentially special panel that absorbed heat from sun on outer surface and heat from building on inner surface and thereby heated air flowing through panel. Patent specified that air inlet was at top of panel. Patentee granted licensee exclu- sive license to make and sell invention. Licensee sold inven- tion through distributor pur- suant to series of distribution agreements. Patentee assigned patent to assignee, which was holding company related to licensee. Licensee and distribu- tor were not able to reach new agreement. Distributor began selling solar air heating sys- tem known as MatrixAir sys- tem. Distributor's system had air inlet in lower part of panel. Action dismissed. Location of air inlet had material effect on way invention worked so there was no infringement. Evidence of distributor's expert indicated location of air inlet had mate- rial effect. Evidence of expert for assignee and licensee to contrary was rejected due to his misinter- pretation of proper legal test and inconsistency with his evidence in another case. Other evidence clearly established inferior per- formance of MatrixAir system as result of having air inlet in bot- tom part of panel. This evidence included government rating indicating MatrixAir system was 14% less efficient than inven- tion. Assignee and licensee had not adduced any persuasive evi- dence showing MatrixAir sys- tem performed essentially same as invention. Person skilled in art would have understood dif- ferent location of air inlet would have had material effect on way invention worked since differ- ent location ran counter to basic laws of physics. Position of air inlet at top had direct impact on improving efficiency and so was essential element of inven- tion rather than non-essential element. Hollick Solar Systems Ltd. v. Matrix Energy Inc. (Oct. 31, 2011, F.C., Scott J., File No. T-1791-07) 208 A.C.W.S. (3d) 175 (49 pp.). TRADEMARKS Applicant not affected by presence of trademark on register for last five years Applicant sought to have respon- dent's trademark expunged from register. Respondent raised issue of applicant's standing to bring application. Respondent argued applicant did not qualify as per- son of interest because appli- cant never opposed registration, waited until near end of pre- scribed deadline for bringing application, and did not estab- lish applicant's business suffered as consequence of registration. Court had serious doubts appli- cant was person interested. There was no evidence appli- cant reasonably apprehend- ed that it would be adversely affect by presence of trademark on register. There was no evi- dence applicant suffered any damage. Evidence established applicant would not reasonably apprehend to be affected and January 30, 2012 • Law Times

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