Montecatini Edison S.p.A. (Plaintiff)
v.
Standard Oil Company, Phillips Petroleum Com
pany, Warren Nesmith Baxter, Nicholas G.
Merckling, Ivan Maxwell Robinson, Gelu Stoeff
Stamatoff, and Noelle K. Merckling, administra-
trix of the estate of Nicholas George Merckling,
deceased, Donald H. Payne, E. I. Dupont de
Nemours and Company, F. E. Bailey, Jr., F. J.
Welch, Stephen Gates and B. R. Thompson
(Defendants)
Trial Division, Heald J.—Ottawa, May 23, 24
and June 1, 1973.
Patents—Conflict action—Party seeking to intervene with
respect to claims affecting subsidiary—Commercial interest
not sufficient—Patent Act, s. 45(8).
A conflict proceeding between plaintiff and numerous
defendants involved 66 claims. Nine of these were in con
flict between plaintiff and defendant Standard Oil Co., and
of these the Commissioner of Patents awarded two to plain
tiff and six to Standard Oil Co. Plaintiff brought a conflict
action in this Court asking, inter alia, that it be awarded all
nine claims. Standard Oil Co. put in a defence and then
applied for leave to intervene with respect to a number of
the other 66 claims because it apprehended a settlement
between plaintiff and another defendant with respect to
these claims with resultant injury to a wholly owned subsidi
ary which sold products incorporating the claims in Canada
though Standard Oil Co. itself did not.
Held, the application must be dismissed. The fact that
Standard Oil Co. had a commercial interest in a dispute
between others did not entitle it to intervene. Moreover,
since all of the other 66 claims in the dispute between
plaintiff and other defendants having been settled since the
action was begun, Standard Oil Co. should not be allowed to
question the validity of those claims now. Finally, to permit
Standard Oil Co. to intervene at this date would be to give it
an advantage which it would not have if the patents were
issued.
Procter and Gamble Co. of Canada Ltd. v. Colgate-Pal-
molive Co. [1971] 2 C.P.R. (2d) 97, followed. Moser v.
Marsden [1892] 1 Ch. 487; Re I.G. Farbenindustrie
A.G. Agreement [1943] 2 All E.R. 525; International
Minerals and Chemical Corp. v. Potash Co. of America
[1965] S.C.R. 3, referred to.
APPLICATION.
COUNSEL:
Donald J. Wright, Q.C., and Donald H.
MacOdrum for plaintiff.
David Watson and Kent Plumley for Stand
ard Oil Company.
R. G. Gray, Q.C., and J. G. Fogo for Phil-
lips Petroleum Company.
SOLICITORS:
Ridout and Maybee, Toronto, for plaintiff.
Gowling and Henderson, Ottawa, for Stand
ard Oil Company.
Herridge, Tolmie, Gray, Coyne and Blair,
Ottawa, for Phillips Petroleum Company.
HEALD J.—This is an application on behalf of
the defendant Standard Oil Company (hereafter
Standard) for an order:
(a) That Standard is entitled to intervene with
respect to conflict claims Cl to C4; C9; C10;
C12 to C14; C25; C26; C33 to C37; C39 and
C40;
(b) That Standard be allowed to extensively
amend its Amended Statement of Defence to
the Amended Statement of Claim as more
particularly contained in some 13 paragraphs
of proposed amendments; and
(c) Authorizing and ratifying the filing of a
defence to Part B of the Counterclaim of the
defendant, Phillips Petroleum Company (here-
after Phillips).
This action, a patent conflict proceeding
under section 45(8) of the Patent Act, was origi
nally commenced on July 3, 1969. The plead-
ings are complex and lengthy. On June 30,
1970, President Jackett (as he then was) made
an Order, which, except as to costs, was by
consent and without adjudication by the Court.
The stated purpose of the Order was to clarify
which claims were in conflict with which parties
in the Patent Office and also to make it clear
against which parties rights are being claimed
with respect to particular claims.
To accomplish said objects, plaintiff was
given leave to amend its Statement of Claim, the
defendants were given leave to file amended
defences. The defendant, E.I. Dupont de
Nemours and Company (hereafter Dupont) and
the defendant Phillips were given leave to
amend their Counterclaims to provide for a Part
A relating to claims referred to in the Statement
of Claim and for a Part B relating to claims
other than those referred to in the Statement of
Claim.
The other parties were given consequential
leave to plead to the said amended
Counterclaims.
The amended Statement of Claim and the
amended Statements of Defence put in issue
some 47 conflict claims.
Part B of the Phillips' Counterclaim puts in
issue some additional 7 conflict claims. Part B
of the Dupont Counterclaim puts in issue
another additional 12 conflict claims.
However, as between the plaintiff and Stand
ard, there are presently in issue only nine claims
(C11; C18 to C22; C27; C28 and C32).
The Commissioner of Patents awarded 6 of
these claims (C11; C18; C19; C20; C21 and
C28) to Standard, two of the claims to the
plaintiff (C22 and C27) and one (C32) to the
defendant Phillips.
With respect to these claims, in its Amended
Statement of Claim, the plaintiff pleaded that
the Commissioner had rightly awarded claims
C22 and C27 to it and further asked for an
order that neither the plaintiff nor Standard are
entitled to a patent covering C11, C18 to C21,
C28 and C32, or, in the alternative, that the
plaintiff is entitled, as against the defendant
Standard, to the issue of a patent covering these
claims.
By this motion, Standard seeks to have placed
in conflict as between itself and the plaintiff the
additional claims set out in paragraph (a) of the
90582-1
Notice of Motion (C1 to C4; C9; C10; C12 to
C14; C25; C26; C33 to C37; C39 and C40).
Since the Order of the President on June 30,
1970, amended pleadings have been filed, all
parties have exchanged their lists of documents
and the examinations for discovery have com
menced. The examination for discovery of an
officer of Standard taking several weeks has
been pretty well completed.
The nine claims presently in issue between
Standard and the plaintiff are claims with
respect to the product polypropylene.
Of the conflict claims sought to be added to
the issue between Standard and the plaintiff, all
but four deal with the product polypropylene.
The other four claims deal with polypropylene
as a product when prepared by a particular
process.
This motion was launched because, in respect
of the more significant of the claims sought to
be added, the plaintiff was in conflict only with
the defendant Phillips. It appears from the
affidavits filed that settlement as between the
plaintiff and the defendant Phillips is imminent,
and that Phillips is going to withdraw entirely
from the action. Standard therefore is apprehen
sive, that unless it is allowed to intervene, a
patent will be issued to the plaintiff containing
said additional claims for polypropylene as a
product.
Standard alleges, inter alia, that the evidence
filed by plaintiff in the Patent Office with
respect to said claims was substantially similar
to the evidence filed with respect to the poly-
propylene product claims already in conflict
between Standard and the plaintiff and says that
the experimental work relied on is the same.
Standard says that it is interested in prevent
ing the issuance to others of claims for polypro-
pylene as a product as it is selling in Canada
through its wholly owned subsidiary, Amoco
Canada Petroleum Company Limited, polypro-
pylene which is solid and crystalline. It goes on
to say that the adverse issuance of patents cov
ering said product will adversely affect Stand
ard's operations in Canada, and in particular,
would affect the possibility of Standard licens
ing polypropylene as a product.
Standard also alleges in support of the motion
to intervene that the evidence in respect of the
claims sought to be added would largely overlap
the evidence in respect of the claims already in
issue and says that if intervention is not
allowed, there would be extensive duplication of
evidence in view of the probability of further
litigation.
In my opinion, the determining facts in the
case at bar are indistinguishable from those
considered by Mr. Justice Thurlow in the case
of Procter and Gamble Co. of Canada Ltd. v.
Colgate-Palmolive Co. [1971] 2 C.P.R. (2d) 97.
That case was also a multi-party, multi-claim
patent conflict action under section 45(8) of the
Patent Act involving some 39 claims. However,
of these, only some 7 claims were in conflict
between Colgate and one Foreningen. The Com
missioner awarded 2 claims to Colgate and 5 to
Foreningen. Subsequently, Foreningen settled
with Colgate and assigned the 5 conflict claims
awarded to it to a subsidiary of Colgate. Procter
and Gamble, a defendant in the proceedings,
launched a motion to amend its Counterclaim to
allege that any patent in respect to the said 5
claims would be invalid by reason of prior art.
Procter and Gamble had not been a party to the
conflict in the Patent Office relating to said 5
claims. The requested amendment was refused
by Gibson J. which refusal was upheld by the
Federal Court of Appeal. Thurlow J., speaking
for the Court, held that Procter and Gamble was
not a necessary party to any action between
Colgate and Foreningen in a determination of
the respective rights of the parties to the
subject-matter of such claims and was not a
proper party to the proceedings so far as they
related to the said 5 claims.
The Editorial Note accompanying the report
of the Procter and Gamble case in the Canadian
Patent Reporter says:
The basis of the present decision is that in proceedings
under section 45(8) of the Patent Act, a party who is not
involved in the conflict in the Patent Office in respect of
specific claims is not a proper party to a determination of
the rights relating to such specific claims.
I agree with that appraisal of the effect of the
Procter and Gamble decision.
Learned counsel for Standard sought to dis
tinguish the Procter and Gamble decision on
several grounds. First of all, Standard alleges
that there has been a proliferation of claims for
polypropylene because the plaintiff has intro
duced theoretical language into its disclosures
on its Canadian application and because the
plaintiff filed a plurality of divisional applica
tions and that a serious question arises as to a
possible lack of candour on the part of the
plaintiff with respect to the reasons for intro
ducing said theoretical language and filing said
divisional applications. These allegations are
contained in the affidavit of Ralph C. Medhurst,
Senior Patent Attorney of Standard. Medhurst
was cross-examined extensively on his affidavit
by counsel for the plaintiff. After perusing said
affidavit and said cross-examination, I am not
satisfied that I could sensibly conclude, from
this evidence, that the Commissioner was
misled in any way by the plaintiff.
Secondly, Standard seeks to distinguish the
Procter and Gamble decision on the basis that in
the case at bar, all of these claims are for
substantially the same subject-matter with lin
guistic differences. This position is resisted by
the plaintiff and I am not satisfied on the evi
dence before me, that Standard has established
this allegation. In any event, in the Procter and
Gamble case, the conflict claims did, in fact,
contain substantially the same subject-matter.
Thirdly, Standard contends that in the Procter
and Gamble case, there was no evidence of a
commercial interest whereas, in the case at bar,
Standard has adduced considerable evidence of
a commercial interest.
I would agree that in this case there is evi
dence of commercial interest. Standard says that
it is selling polypropylene as a product in
Canada through its wholly owned subsidiary,
Amoco Canada Petroleum Company Limited
and that its ability to license polypropylene as a
product might be affected by the issuance of
adverse patents for polypropylene as a product.
However, Standard has failed to establish any
legal interest. The evidence is that Standard is
the parent company of Amoco Canada and
Amoco U.S., that Amoco U.S. manufactures in
the United States and sells to Amoco Canada a
polypropylene product for sale in Canada.
Nowhere is there any allegation that Standard is
the agent or nominee of Amoco Canada.
Accordingly, Standard has not established any
legal interest by the interest of its wholly owned
subsidiary Amoco Canada. (See, for example,
British Thomson-Houston Co. v. Sterling Acces
sories Ltd. [1924] 2 Ch. 33 at 38 per Tomlin J.)
In the Procter and Gamble decision, Thurlow
J. at page 108 of the judgment was careful to
state that he was not deciding that a commercial
interest was sufficient for intervention (it not
being necessary for him to so decide on the
facts of that case).
The weight of authority seems to indicate
rather that a commercial interest is not suffi
cient. In the case of Moser v. Marsden [1892] 1
Ch. 487, the Court refused to add a defendant
who was not directly interested in the issues
between the plaintiff and the defendant but was
rather indirectly and commercially affected.
This same principle was adopted in the case of
Re I.G. Farbenindustrie A.G. Agreement [1943]
2 All E.R. 525 where Lord Greene said at page
528:
The fact that a person has a commercial interest in
litigation and nothing more, in my opinion, not merely gives
him no right to demand to be added to proceedings by the
result of which that commercial interest may be affected,
but the court has no jurisdiction to add him any more than it
has jurisdiction to add any man in the street. It is the
practice of the court, and the court has power in proper
cases, to add at his own request a party who claims to have
a legal interest in the subject-matter of the suit.
Counsel for Standard relied on the case of
International Minerals and Chemical Corp. v.
Potash Co. of America [1965] S.C.R. 3 at pages
10 and 11.
However, in that case, Mr. Justice Cartwright
(as he then was) cited with approval on page 10
of the judgment the test used in the English
cases which is as follows:
May the order for which the plaintiff is asking directly
affect the intervener in the exercise of his legal rights?
Applying that test to the case at bar, since
Standard is not being interfered with in the
exercise of its legal rights, it has no right to
intervene (italics mine).
Apart entirely from all other considerations, I
have the view that this application is made at
too late a date in the proceedings having regard
to the various developments which have taken
place.
After the amended pleadings contemplated by
President Jackett's Order of June 30, 1970, had
been filed, there was a total of 66 conflict
claims in issue between the various parties to
the action. Since that time, all of the conflict
claims have been settled between the parties
excepting the nine claims in conflict between
Standard and the plaintiff and the conflict
between Phillips and the plaintiff which is prac
tically settled''
I do not think that Standard should be
allowed to raise the validity of these additional
claims at a time when this particular subject-
matter of the litigation has ceased to be in
controversy between the other parties. (For a
similar view, see Thurlow J. in the Procter and
Gamble case (supra) at p. 104.)
There is also the additional factor that
because of what has taken place, multiplicity or
duplication of proceedings would not be avoid
ed by allowing Standard to intervene. As a
matter of fact, the reverse would be true since
Standard raises some new areas of defence.
I have the further view that the plaintiff
would be prejudiced if this motion were granted
because Standard would be given an advantage
it would not otherwise have. This arises by
virtue of the provisions of section 28(1)(a) and
section 63(1) of the Patent Act. There is advan
tage in attacking the validity of a claim before
the claim appears in an issued patent having
regard to the fact that section 28(1)(a) is applic
able in respect of such an attack without the
necessity of meeting the conditions defined in
section 63(1) which only apply to issued
patents.
The research and the work relating to the 9
conflict claims in issue between the plaintiff and
Standard took place in the early 1950's and no
patents have yet been issued. This action has
now been reduced to 9 conflict claims. It seems
to me that this issue should be settled as expedi
tiously as possible without allowing any inter
vention which would have the effect of delaying
the proceedings any further.
I have therefore concluded that Standard is
not entitled to intervene as requested in para
graph (a) in the Notice of Motion.
Dealing with paragraph (b) of the Notice of
Motion, practically all of the proposed amend
ments relate to the intervention and the claims
not presently in conflict. The same is true of the
proposed amended defence to Counterclaim, the
filing of which paragraph (c) of the Notice of
Motion asks the Court to authorize and ratify. It
is true that President Jackett's Order of June 30,
1970 permitted Standard to file a defence to the
Counterclaim, but I am satisfied that said Order
did not contemplate the filing of a defence in
respect of claims not in conflict at that time. I
have therefore concluded that Standard is not
entitled to succeed in respect of any of the relief
asked for in the Notice of Motion.
The motion is therefore dismissed with costs.
1 Counsel for the plaintiff said that settlement had been
effected but that the documents had not been signed by the
parties. Counsel gave his undertaking to the Court that said
executed settlement documents would be deposited in the
Court shortly.
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.