Hershkovitz v. Tyco Safety Products Canada Ltd., 2009 FC 256, 73 C.P.R. (4th) 331 (F.C.)

Hershkovitz v. Tyco Safety Products Canada Ltd., 2009 FC 256, 73 C.P.R. (4th) 331 (F.C.). On March 12, 2009, Judge Luc Martineau of the Federal Court of Canada  handed down his decision in Hershkovitz et al. v. Tyco Safety Products Canada Ltd., 2009 FC 256. The judgement is a clear victory for the defendant Tyco in the lawsuit filed by its competitor, Paradox Security Systems Ltd., for alleged infringement of two Canadian patents relating to alarm panel circuitry. Paradox sued Tyco in 2004, shortly after having filed disclaimers against its patents, by which Paradox sought to amend the patents to address prior art. Tyco denied infringement and counterclaimed that Paradox's disclaimers, and the underlying patents, were invalid. The trial was held over five weeks in late 2008. Justice Martineau dismissed Paradox's action and allowed Tyco's counterclaim. In his landmark 85-page ruling he stated that the plaintiffs chose not to disclose critical information to the Canadian patent office; as a result, the disclaimers were held invalid. The disclaimers, in turn, contained an admission by Paradox that the original patents were too broad. The patents were therefore held to be invalid as well. The judge then went on to examine the validity of the patents independently of his disclaimer analysis; he ruled that the patents were anticipated and obvious in light of prior art, and thus invalid. Because the patents were invalid, there could be no infringement. Finally, the judge examined the remedies sought by the plaintiffs and concluded that in any event, because the disclaimers had been filed almost four years after the plaintiffs knew of the defects in their patents, the plaintiffs could not claim the equitable remedy of an accounting of profits. This case is significant in several respects:  it sets the permissible boundaries for disclaimers, a summary procedure under Canadian patent law which has not received much judicial attention or comment in the past; it explores the duties of disclosure owed by applicants for a patent, as well as patent holders; it underlines that disclaimers should be used cautiously because they invariably contain an admission that the original claim was too broad; if the disclaimer falls, so must the affected claim; and it confirms that a disclaimer must be filed with diligence, failing which the plaintiff may be deprived of certain equitable remedies. Paradox appealed the decision to the Federal Court of Appeal which, in a decision released on July 19, 2010, dismissed the appellants' action for patent infringement against Tyco. It confirmed that the appellants' patents, said to be infringed by Tyco, were invalid. Marek Nitoslawski, David Turgeon and Alain Dussault of Fasken Martineau appeared for Tyco Safety Products.