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 Commercial
Reality Wins The Day: Multi-National Corporations Required To
Produce Documents From Affiliate Corporations
Scott Miller
In Michelin North America (Canada) Inc.
(“Michelin
Canada“)
v. 9130-4550 Quebec Inc. et al.
(“Nortop“),
MBM Intellectual Property Law
(“MBM”) successfully appealed the decision of
the court which refused to compel Michelin
Canada to provide further and better answers to discovery
questions and to produce related documents.
The action was for alleged infringement of four
industrial designs of tire treads. The four industrial designs
were assigned to Michelin Canada less than one month prior to
the commencement of the action. The assignors were all
related foreign corporations (Michelin Swiss and Michelin
France). The testing and research and development for two of
the industrial designs were done by Michelin USA. As part of
its defence, Nortop asserted that the four industrial designs
were invalid as they were dictated solely by utilitarian
function.
On appeal, Justice Tremblay-Lamer agreed with
MBM’s submissions that questions grounded in utility and
functionality, be they related to the design, creation,
testing or development of tires and treads, are all relevant
to industrial design validity and infringement. Justice
Tremblay-Lamer further agreed with MBM that
Michelin Canada must make inquiries to its
related foreign corporations to answer discovery questions and
to produce related documents.
The decision of Justice Tremblay-Lamer is
important as it demonstrates that the defence of functionality
is accessible to all parties involved in industrial design
litigation cases regardless of their size. A defendant
without significant means may still have the ability to prove
functionality by causing a plaintiff to produce research and
development files relating to an industrial design at issue
whether or not the plaintiff itself actually conducted the
research and development or is in possession of the relevant
files.
The
message is clear. Companies can no longer assign intellectual
property rights to related entities to enable a plaintiff to
assert they do not have access to relevant documents and force
defendants to spend excessive resources obtaining those
documents. Justice Tremblay-Lamer summarized her reasons
succinctly: “Having the plaintiff obtain information from
related third party entities does not circumvent the procedure
for examining assignors and non-parties set out in Rules 237
and 238. Rather, this offers a practical solution given the
commercial reality of international and affiliated
corporations, and the challenges faced by parties seeking
information in this context.”
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2009 Newsletter
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