Arctic Cat and the Yada Yada Notice

Upon the release of this Notice, law firms were encouraged about the prospect of heightened efficiency in and simplification of proceedings before the Federal Court. However, some things are apparently easier in theory than in practice.

The Federal Court Commits to Efficiency

On June 24th, 2015 the Federal Court released a Notice to the Profession (the “Notice”) regarding case management. The Notice arose out of information collected by the Federal Court Case Management Working Group (composed of judges and chief clerks of the Federal Court) which had been tasked by the Chief Justice to consult with the Bar Associations on how case management could be improved at the Federal Court. The Federal Court has a caseload dominated by intellectual property law, which tends to be complicated and time consuming litigation. These consultations gave rise to a number of recommendations, forming the basis of the Notice.1

The recommendations address such issues as earlier trial management, prohibition of late evidence at trial, limitations on documentary and oral discovery, limits on refusal motions and prothonotary interlocutory orders, as well as stricter enforcement on the limit of the number of experts. The Notice indicates that these recommendations are precursors to a more binding commitment to efficient proceedings and were made to better achieve the Federal Court’s mandate to “secure a just, expeditious and least expensive determination of every proceeding,” as per the Federal Court Rules.

Upon the release of this Notice, law firms were encouraged about the prospect of heightened efficiency in and simplification of proceedings before the Federal Court.

However, some things are apparently easier in theory than in practice.

The Irony of Arctic Cat

Less than a month after the Notice, Madam Prothonotary Tabib heard Arctic Cat Inc v Bombardier Recreational Products Inc.2 (“Arctic Cat”) concerning a motion to amend Bombardier’s Statement of Defence and Counterclaim. This case could have been an ideal opportunity to illustrate the Federal Court’s new emphasis on expeditious and less expensive proceedings; the result, however, betrayed this potential.

In Arctic Cat, Bombardier sought to amend its Statement of Defence and Counterclaim to significantly expand the list of prior art it wished to rely upon in support of its allegations of obviousness and anticipation and to include an entirely new ground in its pleadings — that of invalidity. This motion came three months before trial, and mere days after case management, where Bombardier maintained that it might amend its pleadings “to narrow them in light of expert reports.”3 Bombardier, in fact, did the opposite, and brought in fresh evidence and a new argument, shifting and expanding the focus of its pleadings significantly.

Prothonotary Tabib found that Bombardier knew that these amendments would be necessary at least a month before the pre-trial conference and was none too pleased with Bombardier’s conduct. She stated that Bombardier “effectively misled Arctic Cat and the Court,”4 and that “[Bombardier’s] conduct cannot be countenanced. It must be condemned in the strongest terms and any repetition must be dissuaded.”5 She also concluded that the argument of ambiguity as a new ground of invalidity would have no chance of success or at the very least, that “the chances of success of this amendment are so tenuous that their dubious merit ought to be factored in and considered in determining whether the amendments should be permitted.”6

Despite her censure, the outcome quite surprisingly in no way punished Bombardier for its conduct. While the ambiguity amendment was rejected, Bombardier was allowed to amend the pleadings to expand the list of prior art it relied on — so much so that 30%-50% of Bombardier’s remaining claims relied on new material.7

Prothonotary Tabib assured that no particular factor was determinative. However, it was clear that her focus in serving the interests of justice by having all relevant art before the Court took precedence over Bombardier’s criticized conduct. At the end of the day, “the facilitation of the court’s consideration of the real issues in dispute” was the deciding factor. It outweighed the many other seemingly relevant factors including the radical change to the matters in dispute, the failure to mention the amendments at pre-trial conference, the injury to Arctic Cat’s position, the “inexcusable and unjustifiable” conduct of Bombardier, the wasted time and resources and the possibility of future adjournments.

Concluding Thoughts

What this decision suggests is that despite the Notice regarding improved efficiency in case management, hearing a case on its merits is likely to continue to trump the Federal Court’s concerns with a “just, expeditious and least expensive hearing”. Unless there are serious consequences for tactics such as occurred in this case, it will be challenging to realize the ideal aspired to in the Notice.

Footnotes

1 Chief Justice Paul Crampton, Notice to the Parties and the Profession: Case Management: Increased Proportionality in Complex Litigation Before the Federal Court (24 July 2015)

2 2015 FC 938 [Arctic Cat]

3 Arctic Cat at para 7

4 Arctic Cat at para 8

5 Arctic Cat at para 9

6 Arctic Cat at para 11

7 Arctic Cat at para 14