Arctic Cat Inc. v. Bombardier Recreational Products Inc., 2015 FC 938 (Prothonotary Tabib)
July 30, 2015
Michael D. Crinson of Dimock Stratton LLP for the Plantiffs Arctic Cat Inc. and Arctic Cat Sales, Inc.
Joanie Lapalme and Kang Lee of Fasken Martineau DuMoulin, LLP for the Defendants Bombardier Recreational Products Inc.
This was a motion by BRP to amend its Statement of Defence and Counterclaim in a patent infringement action filed by Arctic Cat. BRP sought to amend its pleadings to expand the list of prior art cited in support of its allegations that Arctic Cat’s ’738 patent is invalid on the grounds of obviousness and anticipation, and to introduce a new ground of invalidity, ambiguity.
The prior art in question had already been disclosed to Arctic Cat in the context of US proceedings between the same parties relating to the ’738 patent, but was not disclosed in the Canadian litigation until BRP delivered its expert report to Arctic Cat on June 15, 2015. The Court found as a fact that by May 2015, BRP’s counsel were aware that their expert had identified that prior art as relevant to the Canadian litigation, and that before the pre-trial conference on June 11, 2015, BRP’s counsel were aware that their expert had developed the opinion that certain claims of the ’738 patent were ambiguous.
In reviewing the factors to be considered on a motion to amend pleadings, the Court identified a number of factors that weighed against allowing the amendments BRP sought. The Court found that addition of the new prior art would constitute a radical change to the matters in controversy, as it would substitute new art to 30 to 50% of BRP’s case on obviousness and anticipation. It also found that BRP had not brought its motion to amend its pleadings in a timely fashion, holding that the time to do so would have been as soon as their relevance to the Canadian litigation was brought to their counsel’s attention, and, at the latest, at the pre-trial conference. Additionally, it found that BRP’s delay in disclosing the amendments had led Arctic Cat to pursue a course of action that may be difficult to alter — had BRP introduced the amendments in a timely fashion, Arctic Cat’s expert report may have been prepared differently, and Arctic Cat may have even selected a different expert. While the Court did not find that allowing the amendments would cause any prejudice to Arctic Cat that could not be compensated in costs, it found that the need for Arctic Cat to consider and respond to these amendments so close to trial constituted procedural prejudice. Further, the Court emphasized, BRP’s conduct in failing to announce the amendments in a timely fashion was “inexcusable and unjustifiable”.
With respect to the new prior art, the Court found that the above determinations were outweighed by the fact that its addition would facilitate the trial Court’s consideration of the real issues in dispute in the litigation. Referencing case law, the Court held that it was in the interest of justice that the trial Court have before it all relevant prior art to fully consider the issues of obviousness and anticipation. Consequently, the Court allowed the amendments to add the new prior art to BRP’s pleadings.
In contrast, the Court was not satisfied that addition of the ambiguity allegation would facilitate the trial Court’s consideration of the real issues in dispute. It cited the fact that ambiguity had not previously been an issue in dispute between the parties, and determined that the allegation of ambiguity would have no reasonable chance of success at trial. Consequently, it held that the balance of factors did not tilt in favour of allowing BRP to amend its pleadings to add this allegation.
The Court concluded its judgment by strongly condemning BRP’s conduct in failing to announce the amendments in a timely fashion. It ordered BRP to pay Arctic Cat both solicitor and client costs on the motion, and all costs reasonably incurred by Arctic Cat to consider and react to the amendments, in any event of the cause.
By: Kathryn May