Federal Court grants rare motion to re-open patent infringement trial

May 12, 2011

Parties to a patent action often wonder after trial what the outcome would have been if they had just been able to locate that key piece of evidence they know is out there … somewhere …  What if, however, that evidence is actually located after the trial has concluded, but before judgment has been rendered?  That was the situation in Varco Canada Limited v. Pason Systems Corp., 2011 FC 467 and the question on motion before the Court was whether the trial should be re-opened in light of evidence that had been subsequently located.

Although there is a paucity of law in this regard, the Court stated that reopening a trial was a matter of broad discretion but one which must be exercised sparingly and cautiously.  As such, key factors which should be considered on such a motion include: 1) could the evidence, if it had been presented at trial, have had any influence on the result? (an inquiry as to materiality/relevance); 2) could the evidence have been obtained before trial by the exercise of reasonable diligence?; and 3) are there exceptional circumstances that would justify setting aside the “due diligence” test or at least reduce its overall importance in the exercise of discretion.

In the case at hand, the new evidence was the file of a Texas patent agent who was the first agent that the inventor received advice from.  According to the theory put forward by the Defendants, this agent gave advice on prior art which could have impacted on the inventor’s chances of securing a patent.  As a result, the inventor subsequently approached another patent agent, failed to disclose the prior art he had been advised of, and had the new patent agent file a patent application in the U.S. without disclosing this prior art.  According to the Defendants, this alleged fraud on the U.S. Patent Office had the knock-on effect of misleading the Canadian Patent Office into issuing a patent.

Plaintiffs’ counsel admitted that the sworn evidence previously given by the inventor at trial was in some material aspects inaccurate in light of the fresh evidence.  Not only would the new evidence therefore affect the witness’s credibility, but the evidence went directly to the Defendants’ claim of inequitable conduct.  The Court therefore found that the receipt of this evidence, properly established, could therefore influence the final decision and would most certainly form part of the Court’s reasons.

Although there were “significant problems” with the diligence employed by the Defendants in attempting to locate the evidence in the first place, there was precedent for the principle that “any lack of due diligence must be tempered by the crucial factor that a court should not be misled as to the true facts.”  Given the exceptional circumstances of this case, the Court could not turn a blind eye and make findings of fact based on an inaccurate evidentiary record.  The Court therefore found that it was appropriate to re-open the trial.

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