On April 5, 2016 Justice LeBlanc released his Order and Reasons in Stryker Corporation v. Umano Medical Inc., 2016 FC 378. The decision stemmed from a motion by the Defendants to: (i) strike portions of the Plaintiffs’ Statement of Claim (or in the alternative, for the Plaintiffs to provide further and better particulars); and (ii) order the Plaintiffs to provide a copy of every document referred to in the Statement of Claim.
The case involves an infringement action of a patent for hospital beds side-rail support mechanisms that had been developed by Stryker. Stryker alleged that they had entered into manufacturing agreements with the Defendants whereby the latter would manufacture hospital beds using Stryker’s technology and specifications, while protecting Stryker’s exclusive rights to its intellectual property (namely the technology contained in the ‘678 Patent). Stryker alleged that despite these agreements, the Defendants, formed by former Stryker employees, began competing against Stryker by selling their own infringing products.
Motion to Strike & For Particulars
The paragraphs that the Defendants sought to have struck out of the Statement of Claim contained accusations of inducement to infringe and a claim for aggravated/exemplary/punitive damages due to the willful and deliberate infringement and the high-handed conduct of the Defendants in obtaining the Stryker’s know-how through a position of trust. In assessing the motion the Court, citing Eli Lilly v. Nu-pharm and Hunt v. Carey, re-iterated that the threshold for striking a pleading is high and that it must be “plain and obvious” that all or part of the pleadings disclose no reasonable cause of action. Using this standard Justice LeBlanc dismissed the Defendants’ motion to strike in its entirety.
With respect to the request for particulars, the court re-iterated the long standing test that where a party requests particulars it must establish:
… that the particulars sought are necessary to enable it to plead in response to the impugned pleadings, not just to prepare for trial, and that they are not within the party’s knowledge.
The Court confirmed that this should be established via an affidavit containing details as to what information is needed for pleading, and why without such information, the party would be unable to instruct counsel for the purposes of replying to pleading. In this case, the Defendants’ affidavit lacked any specific factual explanations as to why the information requested was necessary or why the information requested was not within their knowledge. As a result, Justice LeBlanc largely assumed that the information required was within the Defendants’ knowledge and dismissed this portion of the motion in its entirety.
Motion for Production of Documents Referred to in the Pleadings
In the alternative, the Defendants’ also requested production of the documents referred to in the pleadings. The Court denied this request, stating that Rule 206 is not intended to be used to provide advanced discovery. While the pleadings referred to the existence of exclusive distributors and the existence of a license, these were “documents in existence which relate to the subject matter or the issues in the pleadings”, and not, documents referred to in the pleadings. The Court pointed out that the Defendants would have the opportunity, on discovery, to request the agreements, licenses, etc. if they believe they are relevant.
Lastly, with respect to costs, Stryker claimed solicitor client costs on the basis that the Defendants revealed in their motion record settlement privileged particulars offered by Stryker in an effort to settle this motion before the hearing. The Court held that while the breach of settlement privilege is serious it did not undermine Stryker’s position on the merits of the case, and therefore did not justify solicitor-client costs. However, in an effort to discourage such conduct by future litigants the court ordered the costs of the motion to be payable forthwith at the high end of Column IV of Tariff B.
A copy of the Court’s decision can be found here.