T-2332-85
Iscar Limited and Iscar Tools Inc. (Plaintiffs)
v.
Karl Hertel GmbH, Karl Hertel GmbH Verkaufs
KG and Hertel Carbide Canada, Inc. (Defendants)
INDEXED AS: ISCAR LTD. V. KARL HERTEL GMBH (T.D.)
Trial Division, Giles A.S.P.—Toronto, November
4, 1988.
Federal Court jurisdiction — Trial Division — Jurisdiction
of prothonotary to hear motion to strike — Associate Chief
Justice delegating power to hear interlocutory applications,
except those required by law to be heard by judge — Motion
to strike interlocutory application arising in course of action,
although resulting in final order — Delegation authorized by
R. 336, setting out powers of prothonotaries.
Estoppel — Motion for stay refused on ground proposed
legislation (removing plaintiffs' right of action) not applying to
action — Issue estoppel argued on motion to strike in that
already decided plaintiffs' alleged rights not fatally affected
by legislation — Reasons apply to issue of stay, not issue of
striking statement of claim.
Construction of statutes — Copyright Act, s. 46.1 — Ss. 24
of amending statute and 46.1 providing certain acts whenever
done not constituting infringement at moment of passage of
legislation or thereafter — Not saying act whenever done not
constituting infringement at time done — Presumption legisla
tion removing property rights not applying to actions in
progress.
Copyright — Infringement — Copyright protection claimed
for something for which overlapping industrial design and
patent protection may also be available — Whether gap in
which Copyright Act would apply — No evidence supporting
finding of no gap — Motion to strike statement of claim
dismissed.
This was a motion to strike a statement of claim as disclosing
no cause of action. The defendants had already moved for a
stay on the ground that a bill, then before Parliament would, if
passed, remove the plaintiffs' right of action. A stay had been
refused on the ground that the proposed legislation would not
apply to this action. The denial was upheld on appeal on the
ground of uncertainty of any bill proceeding to proclamation.
The defendants submitted that the acts of infringement alleged
in the statement of claim no longer constituted infringement
under section 46.1 of the Copyright Act. The issues were: (1)
whether a prothonotary has jurisdiction to hear a motion to
strike; (2) whether there was issue estoppel on the ground that
it had already been decided that the plaintiffs' alleged rights
would not be fatally affected by passage of the legislation; (3)
whether section 46.1 of the Copyright Act, providing that
certain acts do not constitute infringement, abolished the plain
tiffs' cause of action; (4) whether a cause of action existed prior
to the passage of section 46.1.
Held, the motion should be dismissed.
(1) Under Rule 336(1)(g), the Associate Chief Justice
empowered the Senior Prothonotary and Associate Senior Pro-
thonotary to dispose of interlocutory applications, except those
required by law to be heard only by a judge. An application to
strike a statement of claim in its entirety is an interlocutory
application because it arises in the course of an action. It does
not matter than it results in a final order. The matter is not one
which may only be heard by a judge because (1) prothonotaries
are federal appointees, and as such their judicial powers are not
subject to the same restrictions as provincial appointees, and
(2) the Federal Court Act, subsection 12(3) provides that
prothonotaries' duties shall be determined by the Rules, which
in turn allow prothonotaries to dispose of interlocutory applica
tions assigned by the Associate Chief Justice.
(2) The issue which might have been estopped was the issue
of the stay. The reasons for the stay did not apply to this
motion.
(3) When section 46.1 of the Copyright Act and section 24
of the amending statute are read together, they provide that an
act whenever done does not at the moment of proclamation or
thereafter constitute infringement. They did not mean that an
act whenever done did not at the time it was done constitute
infringement. So far as this action sought relief for acts done
before proclamation, there was a presumption that legislation
removing property rights does not apply to actions in progress.
(4) It appeared that copyright protection was sought for
something for which overlapping industrial design and patent
protection may also have been available. The issue of whether
there was a gap in which the Copyright Act would apply was
raised. The decision depends upon the facts, and there was no
evidence supporting a finding that there was no gap.
STATUTES AND REGULATIONS JUDICIALLY
CONSIDERED
An Act to amend the Copyright Act and to amend other
Acts in consequence thereof, S.C. 1988, c. 15, s. 24.
An Act to further amend the Law of Property, and to
relieve Trustees (1859), 22 & 23 Vict., c. 35 (U.K.).
Bill C-60, An Act to amend the Copyright Act and to
amend other Acts in consequence thereof, 2nd Sess.,
33rd Parl., 35-36 Eliz. II, 1986-87.
Canadian Bill of Rights, R.S.C. 1970, Appendix III.
Canadian Charter of Rights and Freedoms, being Part I
of the Constitution Act, 1982, Schedule B, Canada Act
1982, 1982, c. 11 (U.K.).
Constitution Act, 1867, 30 & 31 Vict., c. 3 (U.K.)
[R.S.C. 1970, Appendix II, No. 5] (as am. by Canada
Act 1982, 1982, c. 11 (U.K.), Schedule to the Consti
tution Act, 1982, Item 1), s. 96.
Conveyancing and Law of Property Act, 1881, 44 & 45
Vict., c. 41 (U.K.).
Copyright Act, R.S.C. 1970, c. C-30, s. 46.1 (as enacted
by S.C. 1988, c. 15, s. 11).
Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, s.
12(1),(3).
Federal Court Rules, C.R.C., c. 663, RR. 336(1)(g),
419(1)(a).
Industrial Design Act, R.S.C. 1970, c. I-8.
Patent Act, R.S.C. 1970, c. P-4.
CASES JUDICIALLY CONSIDERED
APPLIED:
In re Joseph Suche & Co., Limited ( 1875), 1 Ch.D. 48;
In re Page. Hill v. Fladgate, [1910] 1 Ch. 489 (C.A.).
DISTINGUISHED:
Quilter v. Mapleson (1882), 9 Q.B.D. 672 (C.A.).
CONSIDERED:
The Monk Corp. v. Island Fertilizers Ltd., T-2115-86,
Rouleau J., judgment dated 22/12/86, not reported; Bay-
liner Marine Corp. v. Dorai Boats Ltd., [ 1986] 3 F.C.
421; 10 C.P.R. (3d) 289 (C.A.); British Leyland Motor
Corporation and Others v. Armstrong Patents Company
Limited and Others, [1986] F.S.R. 221 (H.L.).
REFERRED TO:
Windsurfing International Inc. v. Oberson (Maurice) Inc.
(1987), 15 F.T.R. 299; 16 C.I.P.R. 210 (F.C.T.D.);
Windsurfing International Inc. v. Novaction Sports Inc.
and Teasdale (1987), 15 F.T.R. 302; 15 C.I.P.R. 164
(F.C.T.D.); Thibodeau v. Canada (1988), 20 C.P.R. (3d)
539 (F.C.T.D.); (scar Ltd. v. Karl Hertel GmbH, [1988]
1 F.C. 569 (T.D.).
COUNSEL:
Gunars Gaikis for plaintiffs.
Roger T. Hughes, Q.C. for defendants.
SOLICITORS:
Smart & Biggar, Toronto, for plaintiffs.
Sim, Hughes, Dimock, Toronto, for defen
dants.
The following are the reasons for order deliv
ered orally in English by
GILES A.S.P.: Thank you. The motion before
me is under Rule 419(1)(a) [Federal Court Rules,
C.R.C., c. 663] to strike a statement of claim as
disclosing no cause of action. As a preliminary
matter, counsel for the defendant/applicant raised
the question of the jurisdiction of a prothonotary
to hear such a motion.
Subsection (3) of section 12 of the Federal
Court Act, R.S.C. 1970 (2nd Supp.), c. 10 pro
vides that "The powers, duties and functions of the
prothonotaries shall be determined by the Rules."
Rule 336(1)(g) provides in part that a prothono-
tary shall have the power "to dispose of any inter
locutory application assigned to him specially or to
any prothonotary, by special or general direction
of the Chief Justice or of the Associate Chief
Justice."
Practice Note No. 3 reads:
General Direction under Rule 336(1)(g).
Under Rule 336(1)(g) the Senior Prothonotary and the Associ
ate Senior Prothonotary are empowered to hear and dispose of
any interlocutory application in the Trial Division other than
the following, that is to say:
1. any application which by law may be heard and determined
only by a judge of the Court;
2. any application for an injunction or for the appointment of a
receiver whether made ex parte or on notice, including applica
tions for Mareva or Anton Pillar relief;
3. any application under section 18 of the Federal Court Act
for relief of any kind therein mentioned;
4. any application for an order for disclosure of information or
documents which in their nature are confidential or in respect
to which a direction to withhold them from public inspection
has been given by a judge;
5. any application to vary or discharge an order of a Judge of
the Court. James A. Jerome, Associate Chief Justice, Ottawa,
October 31, 1985.
As can be seen pursuant to the authority of Rule
336(1)(g), the Associate Chief Justice has by a
general direction empowered the Senior Prothono-
tary and the Associate Senior Prothonotary to
hear and dispose of interlocutory applications save
and except for certain types of interlocutory
application set out in the direction. Among the
types of interlocutory application excepted is:
1. any application which by law may be determined only by a
judge of the Court;
Therefore to find that I have jurisdiction, I must
find that an application for an order to strike a
statement of claim in its entirety under Rule 419 is
an interlocutory application and further, that such
application is not required by law to be heard only
by a judge of the Court.
Is a motion to strike a statement of claim in its
entirety, interlocutory by nature? A distinction
must be noted between an interlocutory order or
judgment, on the one hand and an interlocutory
application on the other. By Rule 336(1)(g), what
the Chief Justice or Associate Chief Justice may
assign to a prothonotary to hear and dispose of, is
an interlocutory application. An interlocutory
application is one that arises in the course of an
action. That is to say, in the usual case, between
the institution of the action and judgment after
trial. A final order or judgment is one that finally
determines an issue between the parties (the exist
ence of a right of appeal does not affect the
finality of the order or judgment).
It can be seen that it is possible for an interlocu
tory application to result in a final judgment or
order. It would appear then that the Chief Justice
or the Associate Chief Justice could assign to a
prothonotary to hear and dispose of an application
to strike a statement of claim in its entirety and
dismiss the action, which application is interlocu
tory even though the resulting order finally deter
mines the issue between the parties.
In addition, I note that in the case of In re Page.
Hill v. Fladgate, [1910] 1 Ch. 489, the Court of
Appeal in England held that an order dismissing
an action as frivolous and vexatious was an inter
locutory order, at least for the purposes of time for
appeal. In that case, at page 494, Lord Justice
Buckley is reported as saying:
This, however, is an order in favour of the defendants and it
brings this action altogether to an end. To my mind it would be
reasonable to say that that is a final order. But I do not think I
am entitled to found myself on that, because there have been
many decisions in which orders apparently final have been
treated as interlocutory.
Having found that an application to strike a
statement of claim in its entirety is an interlocuto
ry application and thus may, under the authority
of the Rules, be assigned for hearing and disposi
tion to a prothonotary, it remains to determine
whether the application is one which can be heard
and determined only by a judge of the Court.
Counsel pointed out to me that the Masters of
the Supreme Court of Ontario did not hear
motions to strike statements of claim in their
entirety. I note that the restraint imposed by sec
tion 96 of the Constitution Act, 1867 [30 & 31
Vict., c. 3 (U.K.) [R.S.C. 1970, Appendix II, No.
5] (as am. by Canada Act 1982, 1982, c. 11
(U.K.), Schedule to the Constitution Act, 1982,
Item 1)] on the powers of the provinces to appoint
officials with certain judicial powers is not appli
cable to the Government of Canada. By subsection
12(1) of the Federal Court Act, the Governor in
Council is empowered to appoint prothonotaries.
By subsection 12(3) of that Act, it is provided that
the powers, duties and functions of prothonotaries
shall be determined by the Rules. As noted previ
ously, Rule 336 provides for certain powers of
prothonotaries. I am therefore of the opinion that
the Chief Justice or the Associate Chief Justice
may give the power to hear and dispose of an
application to strike a statement of claim under
Rule 419 to a prothonotary and the Associate
Chief Justice has done so.
I also note that several orders in which applica
tions to strike statements of claim have been con
sidered by prothonotaries, have been appealed to
judges of the Trial Division of this Court. Wind
surfing International Inc. v. Oberson (Maurice)
Inc. (1987), 15 F.T.R. 299; 16 C.I.P.R. 210;
Windsurfing International Inc. v. Novaction
Sports Inc. and Teasdale (1987), 15 F.T.R. 302;
15 C.I.P.R. 164; and Thibodeau v. Canada
(1988), 20 C.P.R. (3d) 539 are examples. For the
reasons of the judges who decided those appeals, it
does not appear that the question of jurisdiction
was argued. In The Monk Corp. v. Island Fertiliz
ers Ltd., T-2115-86, 22 December, 1986, not
reported there was a motion to strike before Mr.
Justice Rouleau. It is apparent from his reasons
that counsel had refused to appear before a pro-
thonotary and had insisted on appearing before a
judge. His remarks indicating a prothonotary has
jurisdiction in an application for a motion to strike
are therefore unfortunately dicta, but being the
only case where the jurisdiction of prothonotaries
appears to have been considered, I must cite that
case. However, I point out that the preliminary
objection, in fact a polite question, was raised in
this case, in my opinion, very properly and certain
ly with no suggestion of temerity or audacity and
with every indication of the willingness or even
anxiousness that I should proceed to hear the
motion should I find that I had jurisdiction.
I was taken somewhat by surprise by the objec
tion, not having considered the matter or jurisdic
tion since the first such motion was assigned to me
several years ago. I expressed the view from the
Bench that a successful motion to strike should be
followed after the expiry of the appeal period by a
motion to dismiss for want of prosecution, analo-
gizing to the situation which existed when actions
were commenced by issuing a writ followed by a
statement of claim. From the foregoing reasoning,
it is apparent that the two-stage procedure I sug
gested from the Bench is not necessary. This is so
even in a case where a statement of claim is struck
in its entirety without any provision that the claim
is struck without prejudice to the plaintiffs right
to file a fresh statement of claim.
At an earlier stage in this action, the defendants
moved for a stay on the grounds that Bill C-60 [An
Act to amend the Copyright Act and to amend
other Acts in consequence thereof, 2nd Sess., 33rd
Parl., 35-36 Eliz. II, 1986-87] was before the
House of Commons and would, if passed, remove
any right the plaintiffs might have in this action.
Neither side argued the matter of retroactivity or
retrospectivity, nevertheless in my view, which I
expressed in written reasons [[1988] 1 F.C. 569],
the legislation if passed, as then worded would not
apply to this action. I refused a stay on that
ground. My decision was appealed to the Associate
Chief Justice who did not disapprove my reasoning
but expressed a different reason for refusing a
stay. The different reason was the uncertainty of
any bill proceeding to proclamation.
Counsel for the respondents/plaintiffs argued
issue estoppel on the grounds I had found that the
plaintiffs' alleged rights would not be fatally
affected by the passage of the legislation. Counsel
for the defendants, correctly in my view, argued
that the issue which might have been estopped was
the issue of the stay, which was the subject of the
motion before me on the former occasion. My
reasons, in counsel's view, did not by the doctrine
of issue estoppel, apply to the motion now in issue.
I have no doubt that counsel's contention was
correct. Nevertheless, I had reviewed the possibili
ty of relation back of this legislation. I therefore
suggested to counsel for the defendant/applicant
that he might wish the motion to be heard by
someone else. Counsel was so complimentary and
persuasive in representing that I should continue to
hear the motion that I, perhaps wrongly, proceed
ed to do so.
Section 46.1 of the Copyright Act [R.S.C. 1970,
c. C-30], as enacted by S.C. 1988, c. 15, s. 11
reads:
46.1 (1) The following acts do not constitute an infringe
ment of the copyright or moral rights in a work:
(a) applying to a useful article features that are dictated
solely by a utilitarian function of the article;
(b) by reference solely to a useful article, making a drawing
or other reproduction in any material form of any features of
the article that are dictated solely by a utilitarian function of
the article;
(c) doing with a useful article having only features described
in paragraph (a) or doing with a drawing or reproduction
that is made as described in paragraph (b) anything that the
owner of the copyright has the sole right to do with the work;
or
(d) using any method or principle of manufacture or
construction.
(2) Nothing in subsection (1) affects the copyright or the
moral rights in a record, perforated roll, cinematograph film or
other contrivance by means of which a work may be mechani
cally reproduced, performed or delivered.
Section 24 of the amending statute reads:
24. Subsection 46(1) and section 46.1 of the Copyright Act,
as enacted by section 11, apply in respect of any alleged
infringement of copyright occurring prior to, on or after the day
on which section 11 comes into force.
The acts alleged as infringements in the state
ment of claim, it was submitted by the defendants'
counsel, are among those to which section 46.1
applies.
Reading section 46.1 of the Copyright Act and
section 24 of the amending statute together, it is
apparent that any action specified whenever done
does not constitute an infringement. I understand
that to mean that the act whenever done does not
at the moment of proclamation of the section or
thereafter constitute an infringement. One cannot
construe the wording to mean that such an act
whenever done did not at the time it was done
constitute an infringement. There are cases decid
ed before the enactment of section 46.1 in which
apparently similar acts have been held to be
infringements. It is therefore possible that a Trial
Judge when evidence is presented, would find that
at the time the acts complained of were done, they
constituted infringements. It therefore is necessary
to determine the effect of this legislation on this
action so far as it seeks relief for acts done before
proclamation. Where, as in this case, the effect of
the legislation is to remove property rights, there is
a presumption that the legislation does not apply
to actions in progress. This principle was expressed
by Sir George Jessel, the Master of the Rolls, in
the case of In re Joseph Suche & Co., Limited
(1875), 1 Ch.D 48 where he said at page 50:
... it is a general rule that when the Legislature alters the
rights of parties by taking away or conferring any right of
action, its enactments, unless in express terms they apply to
pending actions, do not affect them. It is said that there is one
exception to that rule, namely, that, when enactments merely
affect procedure and do not extend to rights of action, they
have been held to apply to existing rights ....
However, the reasons for judgment of Sir
George Jessel still the Master of the Rolls in
Quilter v. Mapleson (1882), 9 Q.B.D. 672 (C.A.)
were cited by counsel for the proposition that
retrospective legislation should apply to actions in
progress when the legislation came into force. In
Quilter v. Mapleson, the statute at issue was the
Conveyancing and Law of Property Act, 1881, 44
& 45 Vict., c. 41 (U.K.). That statute repealed an
earlier statute [An Act to further amend the Law
of Property, and to relieve Trustees (1859)], 22 &
23 Vict., c. 35 (U.K.), in which relief from forfeit
ure was provided and enacted new legislation con
taining different provisions for relief from forfeit
ure. The Master of the Rolls pointed out, that
were the new provisions for relief from forfeiture
not to apply to prior breaches, the legislation,
intended to allow greater scope for the power to
relieve from forfeiture, would result in a tenant
being denied a right to relief which he had previ
ously had, as well as the somewhat different right
to relief which the new legislation was intended to
provide. The Master of the Rolls therefore con
cluded that to further the intention of the new
legislation, it must be held to apply to pending
proceedings. Quilter v. Mapleson was decided the
way it was because there were conceivable fact
situations where, if the legislation were not applied
to pending litigation, it would have the opposite
effect to that intended. Interpreting the Copyright
Act amendments not to apply to pending litigation
does not result in the removal of pre-existing rights
which it was intended the plaintiff should continue
to have.
I have reviewed the cases and texts cited by
counsel at the hearing and those cited in my
reasons of November 3, 1987, and find none which
would impair the applicability of the rule
expressed in In re Suche. There is no need for me
to comment on the submissions of plaintiffs' coun
sel with respect to the Canadian Bill of Rights,
R.S.C. 1970, Appendix III and the Canadian
Charter of Rights and Freedoms [being Part I of
the Constitution Act, 1982, Schedule B, Canada
Act 1982, 1982, c. 11 (U.K.)].
It remains to be considered whether a cause of
action existed before the 1988 legislation came
into force. The fact situation here may not be
dissimilar to that in Bayliner Marine Corp. v.
Dorai Boats Ltd., [1986] 3 F.C. 421; 10 C.P.R.
(3d) 289 (CA.) in that the protection of the
Copyright Act is claimed for something which may
overlap the protection available under the Indus
trial Design Act [R.S.C. 1970, c. I-8].
The fact situation may also be one in which the
protection available under the Copyright Act over
laps the protection available under the Patent Act
[R.S.C. 1970, c. P-4]. It may be that the fact
situation is such that no part of the work for which
copyright protection is claimed is not either within
the protection available under the Industrial
Design Act or the Patent Act and that therefore,
pursuant to the reasoning in Dorai Boats and the
English case, British Leyland Motor Corporation
and Others v. Armstrong Patents Company Lim
ited and Others, [1986] F.S.R. 221 (H.L.), the
Copyright Act provides no protection. It may be
that there is a gap in which the Copyright Act can
be applicable. It was argued that there could in
theory be no such gap and that therefore factual
evidence was not necessary for me to determine
that there was no cause of action. That is to say,
that to a drawing of an object that is useful there
are only two aspects, the design aspect and the
functional aspect. These aspects would at some
time in history have been registerable as industrial
designs or been patentable had legislation for that
purpose been in existence. This, of course, is to
deny to a painting of a sail boat any protection in
copyright. I am not prepared to find that there can
be no such gap in theory. There was no evidence
before me on which I could find there is not in fact
a gap. I note that in all the cases cited dealing with
overlapping, the decision depended on the facts.
For the foregoing reasons, I intend to dismiss
this motion with costs to the plaintiffs in the case.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.