Summary
In 2014, the Supreme Court of Canada called for a “culture shift” in how cases are adjudicated, including that summary judgment rules must be interpreted broadly so as to favour proportionality, and fair, timely and just access to courts. In the past 5 years or so, there has been an increase in the disposition of intellectual property cases, including patent cases, in the Federal Court by either summary judgment or summary trial. This trend recently hit a speed bump in The NOCO Company v. Guangzhou Unique Electronics, 2023 FC 208 (“NOCO”) where the Court refused to hear the Defendants’ motion for summary trial on the basis, inter alia, that the issues raised were too numerous and complex, and the evidentiary record did not support the request for summary disposition of the action.
The NOCO case provides a cautionary tale that a party contemplating summary adjudication should ensure to streamline the issue(s) raised and that the evidence it files supports the requested relief.
Discussion
The trend in the Federal Court to dispose of intellectual property cases by way of summary judgment or summary trial (collectively “summary adjudication”) traces its origins to the Supreme Court of Canada’s decision in Hryniak v. Mauldin 2014 SCC 7 (“Hyrniak“) where the Court called for a “culture change” in how cases are decided. Prior to Hyrniak, it was difficult for a party to meet its burden that there was no genuine issue for trial on a summary judgment motion. In Hyrniak, the Supreme Court held that the rules for summary adjudication must be interpreted broadly while “favouring proportionality and fair access to the affordable, timely and just adjudication of claims.” (para 5)
The Federal Court Rules provide for two types of summary adjudication. Rule 215 provides that the Federal Court shall grant summary judgment if the Court “is satisfied that there is no genuine issue for trial with respect to a claim or defence”. Rule 216 allows the Court to hold a summary trial and to grant judgment if the Court is satisfied that there is sufficient evidence for adjudication and it would not be unjust to decide the issues summarily or to dismiss the motion if the issues raised are not suitable for summary trial or a summary trial would not assist in the efficient resolution of the action. About a dozen or so IP cases have been decided by summary adjudication in the past 5 years.
However, in the February 2023 NOCO decision, the Federal Court departed from this recent trend of granting summary adjudication. In this patent case, the Defendants brought a motion for summary trial to dismiss the infringement action on the basis that their impugned products do not infringe NOCO’s patent. The Federal Court dismissed the motion, finding that the Defendants had not met their burden to demonstrate that summary trial was appropriate. The Court held that none of the prerequisites for a summary trial, interpreted broadly, was met. The Court reasoned that a summary trial was inappropriate because, on the record before it, there was insufficient evidence for a just adjudication, the issues raised were too numerous and complex to be suitable for a summary trial, and a summary trial would not improve the efficient resolution of the action.
In the main infringement action of this case, NOCO claims that the vehicle battery jump starters sold by the Defendants infringe their patent. Prior to commencing the action, Noco persuaded Amazon to stop listing the impugned products on its website. Amazon is the only retail channel for these products in Canada. In response to NOCO’s action, the Defendant sought a declaration that any of their products containing a CC-209 printed circuit board (PCB) do not infringe NOCO’s patent. They then brought a motion for summary trial seeking this declaration so that they could then have their products re-listed on Amazon.
On the record before it, the Federal Court found there was insufficient evidence to fairly and justly adjudicate whether products that contain the CC-209 PCB do not infringe the NOCO patent. Specifically, the Court did not have sufficient evidence to determine whether the presence of a CC-209 PCB was a reliable basis for defining a class of non-infringing products. The Defendants claimed that one of their products, the T8 pro, was representative of all their CC-209-containing products for the purpose of determining non-infringement. To establish this, the Defendants relied on an affidavit from their manufacturer stating that all products they make with this CC-209 PCB function the same way. However, a supplemental affidavit from NOCO’s expert witness raised concerns that the CC-209-containing products made by the same manufacturer for another company functioned in a different way than the T8 pro. The Federal Court determined there was not enough evidence to fairly determine if the T8 pro and all CC-209-containing products function in the same way.
The Court also noted that these evidentiary issues were complicated by serious credibility issues raised by the parties about expert witnesses that could not be resolved based on a paper record. Cases with serious issues of witness credibility should proceed to trial rather than be decided summarily due to the difficulty of assessing credibility based on a paper record.
The Federal Court also determined that the issues raised on the Defendants’ motion were not suitable for summary disposition as they were too numerous, broad and complex, thereby offending the principle of proportionality articulated in Hyrniak. The motion raised multiple issues of claim construction and infringement relating to a broad scope of products, and the Defendants advanced all possible non-infringement arguments for claim 1. They asked for a declaration that fully construed the claims at issue in order to provide certainty as to the entire scope of the claims.
Moreover, the Court also held that a summary trial on the issues raised by the Defendants would not assist in the efficient resolution of this patent action. Due to the insufficient evidentiary record relating to the T8 pro being representative of all CC-209-containing products, the Court reasoned that the discovery process would be a more proportionate and efficient means to determine the action. Further, if the T8 pro is not representative of the CC-209-containing products, then determining whether this one product does not infringe NOCO’s patent does not lead to a more efficient resolution of the matter. A trial would still be needed to resolve whether other products infringe.
Finally, the Court determined that it would be unjust to decide all the issues raised by the Defendants summarily based on the following factors: the amounts involved compared to the cost of a conventional trial, the complexity of the matter, the urgency of the matter, credibility of experts, and whether a summary trial would take considerable time. The Court also did not find in this case that the de-listing of Defendants’ products from Amazon to weigh in favour of requiring urgent resolution as there was no evidence of the value lost or the impact of this de-listing.