Summary trial dismissal upheld in split decision of the Federal Court of Appeal

In a split decision, the Federal Court of Appeal dismissed Mud Engineering’s appeals of the Federal Court’s decisions that neither Mud nor Secure Energy were entitled to a declaration that they were the owners of the patents at issue in the litigation (see our previous blog here). 

The main question in the underlying decision was whether Mud Engineering or Secure Energy owned Canadian Patents 2,635,300 and 2,725,190. Mud brought a motion for summary trial seeking a declaration of ownership; Secure responded also seeking a declaration of ownership. Mud put forward evidence from the inventor of both patents to establish that he had arrived that the inventions while employed by Mud, not while he was previously employed by Secure’s predecessor. Finding that Mud’s evidence was “extremely limited” and that Secure had not established that it owned the patents, Justice St-Louis declined to make any declaration about the ownership of the patents and dismissed Mud’s action.

The majority of the Court of Appeal held that the appeal must be dismissed because they could not reweigh the evidence and re-do the Federal Court’s findings. Justice Monaghan’s dissent largely differed from the majority on the point that the presumption of ownership in section 43(2) of the Patent Act applied. However, the majority explained that the presumption was easily rebutted by the evidence before the Federal Court. The majority held that allowing a rerun of the issues in the underlying summary trial would subvert the purpose of summary trials: to end issues or end the entire litigation summarily and once and for all.

In a companion appeal, Mud appealed Justice St-Louis’ decision to strike much of the inventor’s affidavit evidence on grounds including hearsay evidence, opinion evidence, and matters covered by settlement privilege. The Court of Appeal unanimously found some of the Federal Court’s evidentiary rulings were open to doubt, but that even if the Federal Court erred in these findings, the inventor’s evidence counted for very little.

The Court of Appeal ultimately concluded that the Federal Court was right to dismiss the action and that the dismissal was “warranted by the poor state of the appellants’ evidence before it.” There was no error of law or palpable overriding error.

The full decision can be read here.