Switching courts, not channels: MediaTube’s patent battle stalls

The Federal Court recently ordered a stay and security for costs in a prolonged patent infringement claim. In light of MediaTube’s strategy to switch between different courts to litigate the same issue, the Federal Court ordered a stay until the full amount of costs determined by the Ontario Superior Court was paid.

In 2013, MediaTube commenced a lawsuit against Bell for alleged infringement of its patent by Bell’s FibeTV service. At trial, Bell produced a “How It Works” document which described how FibeTV worked at the time. Based on the evidence, including portions of the “How It Works” document, the trial judge concluded that Bell’s FibeTV “could never have infringed the Patent”. MediaTube’s claim was dismissed with elevated costs payable to Bell amounting to over $2 million. MediaTube’s appeal of the trial decision was dismissed by the Federal Court of Appeal and leave to appeal to the Supreme Court of Canada was dismissed.

MediaTube then brought a subsequent action in the Ontario Superior Court alleging infringement of the same patent by Bell. The statement of claim failed to include any mention of the FC’s dismissal of the infringement action, or the fact that the FC’s decision was upheld on appeal. The Ontario Action was also dismissed with costs payable to Bell.

The matter was brought back to the FC by MediaTube, claiming that the initial decision should be overturned because the “How It Works” document was obtained by fraud. At the time of this motion, the costs awarded against MediaTube in the Federal Court proceedings had been paid, but the costs awarded in the Ontario Action remained outstanding. 

Bell brought this motion to stay the FC action and prevent MediaTube from taking any further steps until the outstanding costs were paid and security for costs was posted.

Justice Crinson found the relevant conditions of Rule 416(1)(f) had been satisfied to grant Bell’s motion. As the amount of costs was the result of a final decision, security for the full amount was found appropriate.  

Most notably, Justice Crinson stated the following regarding MediaTube’s attempts to litigate the same matter in multiple different courts:

[15] The evidence on this motion also establishes that MediaTube is attempting to switch between the different courts until it gets the desired result and notwithstanding the final decisions made in this Court. In particular, the non-disclosure of the Federal Court trial decisions in the Statement of Claim filed in the Ontario Action and the repeated threats and challenges to the confidential nature of documents, as reflected in a confidentiality order, are examples. This strategy of switching between Courts and litigating substantially the same issue cannot be used as a means for increasing the legal expenses for a party that has already been vexed once with an issue.

Justice Crinson ordered that MediaTube may not take any further steps in the action until the full amount of costs awarded by the Ontario Superior Court, or security for those costs, were paid. Considering the objectives of deterring excessive motions, costs for this in the amount of $10,000 were also ordered to be payable by MediaTube.

A copy of the Federal Court’s Order and Reasons can be found here.