r v. 424470 B.C. Ltd., 2020 FCA 127

A-362-16 2020 FCA 127 Salt Canada Inc. ( Appellant ) v. John W. Baker ( Respondent ) Indexed as: Salt Canada Inc. v. Baker Federal Court of Appeal, Stratas, Near and Woods JJ.A.—Toronto, January 10, 2018; Ottawa, July 28, 2020.

Patents — Appeal from Federal Court decision dismissing appellant’s application for order directing Commissioner of Patents to vary records of Patent Office to reflect it as owner of Canadian Patent No. 2222058 ( ꞌ 058 patent) — Original owner of ꞌ 058 patent signing agreement in 2010 conceding respondent owner of patent — Agreement containing several conditions including payment of royalties — Respondent ceasing payment of royalties — Refusing to assign patent back to original owner contrary to agreement — Original owner subsequently signing agreement with appellant, assigning patent rights thereto — Whether Federal Court having statutory jurisdiction to decide application before it under Patent Act , s. 52 — Federal Court having jurisdiction to vary or expunge title to patent as reflected in records of Patent Office — Pursuant to Kellogg Company v.

Kellogg, Federal Court can interpret contracts between private citizens as long as done under sphere of federal jurisdiction vested in Federal Court — Lawthier v. 424470 B.C.

Ltd., on which basis Federal Court declining jurisdiction herein, incorrectly decided — Lawthier approach going against purpose of Patent Act , s. 52 , Federal Courts Act generally — When dealing with Patent Act , s. 52 application, Federal Court free to carry out task thereunder even if it involves interpreting agreements, other instruments — Federal Court empowered to direct Patent Office to vary its records — Commissioner of Patents directed to vary entry in records, list appellant as owner of ꞌ 058 patent — Appeal allowed.

Federal Court Jurisdiction — Federal Court dismissing appellant’s application for order directing Commissioner of Patents to vary records of Patent Office to reflect it as owner of Canadian Patent No. 2222058 ( ꞌ 058 patent) — Whether Federal Court having statutory jurisdiction to decide application before it under Patent Act , s. 52 — Respondent submitting that in application like present one, Federal Court engaged in

interpretation of agreements, such

interpretation exclusive function of superior courts —

Interpretation of agreements not exclusively function of superior courts — Pursuant to Kellogg Company v. Kellogg, Federal Court can interpret contracts between private citizens as long as done under sphere of valid federal jurisdiction vested in Federal Court — Lawthier v. 424470 B.C. Ltd., on which basis Federal Court declining jurisdiction herein, incorrectly decided, contrary to Kellogg — Bounds of Federal Court’s jurisdiction not resting on whether something “primarily a case in contract” or whether contractual

interpretation will “dictate” end result — Parliament does not set fuzzy tests for jurisdiction but rather adopts more certain, brighter lines — Lawthier approach going against purpose of Patent Act , s. 52 , Federal Courts Act generally — Federal Courts empowered to resolve contractual disputes arising within their jurisdiction. This was an appeal from a Federal Court decision dismissing the appellant’s application for an order directing the Commissioner of Patents to vary the records of the Patent Office to reflect it as owner of Canadian Patent No. 2222058 ( ꞌ 058 patent).

The original owner and inventor of the ꞌ 058 patent signed an agreement in 2010 that conceded the respondent was the owner of the patent. The agreement incorporated a reversionary clause found in a 2007 agreement. Under that 2007 agreement, there were a number of conditions that, if breached, required the reassignment of the patent to the original owner. One was the continued payment of royalties. The respondent made his last royalty payment in 2011. Thus, the original owner asked for the assignment of the patent to him, which the respondent refused.

In 2015, the original owner signed an agreement with the appellant, assigning the rights to the patent to the appellant. The original owner prepared a reassignement to remove the respondent as registered owner of the patent, but the respondent never signed it. The respondent submitted, inter alia , that in an application like this, the Federal Court is engaged in the

interpretation of agreements and this is an exclusive function of the superior courts. At issue was whether the Federal Court had the statutory jurisdiction to decide the application before it under

section 52 of the Patent Act . Held , the appeal should be allowed. A consideration of context and purpose confirms the plain meaning of the words of

section 52 of the Patent Act : the Federal Court has the jurisdiction to vary or expunge the title to a patent as reflected in the records of the Patent Office. The power given under

section 52 is a judicial one, to determine issues of title to a patent. Quite appropriately, that judicial power has been given to the Federal Court, not the Patent Office. The

interpretation of agreements is not exclusively a function of the superior courts. In the course of exercising their jurisdiction, the Federal Courts frequently determine questions that require agreements to be interpreted. Contractual

interpretation surfaces in almost all of the Federal Courts’ jurisdictional pockets. Pursuant to Kellogg Company v. Kellogg , the Federal Court can interpret contracts between private citizens as long as it is done under a sphere of valid federal jurisdiction vested in the Federal Court. In the case at bar, the Federal Court declined jurisdiction based on its decision in Lawthier v. 424470 B.C. Ltd. This case was incorrectly decided and is contrary to Kellogg .

In Lawthier , the Court declined jurisdiction because it was “primarily a case in contract” where “patent issues [were] ancillary” and contractual determinations would “dictate ownership of the patent”. Nowhere in Kellogg does the inquiry depend on whether contracts will “dictate” ownership. The bounds of the Federal Court’s jurisdiction do not rest on the nebulous exercise of assessing whether something is “primarily a case in contract” or whether contractual

interpretation will “dictate” the end result. Parliament does not set fuzzy tests for jurisdiction but rather adopts more certain, brighter lines. Courts should analyze jurisdictional issues with that front of mind. The Lawthier approach would render the Federal Courts entirely dependent on provincial courts in many cases. Such an approach is against the purpose of

section 52 of the Patent Act and the Federal Courts Act generally. Where contractual disputes arise within their jurisdiction, the Federal Courts are empowered to resolve these disputes just as any other court does. And when dealing with an application under

section 52 of the Patent Act , the Federal Court remains free to carry out the task Parliament has given to it even if that involves interpreting agreements and other instruments. The Federal Court has a general

“superintending jurisdiction” in relation to federal boards and commissions, such as the Patent Office. A provision empowering theFederal Court to direct the Patent Office to vary its records is squarely within that federal superintending jurisdiction. The judgment of the Federal Court in the present matter was set aside and the Commissioner of Patents was directed to vary the entry inthe records to list the appellant as the owner of the ꞌ058 patent.

STATUTES AND REGULATIONS CITED Bill C-38, Act to Amend the Federal Court Act, The Crown Liability Act, the Supreme Court Act and other Acts in Consequence thereof,S.C. 1990, c. 8. Constitution Act, 1867, 30 & 31 Vict., c. 3 (U.K.) (as am. by Canada Act 1982, 1982, c. 11 (U.K.),

Schedule to the Constitution Act,1982, Item 1) [R.S.C., 1985, Appendix II, No. 5], s. 101. Federal Courts Act, R.S.C., 1985, c. F-7, ss. 17(2)(b), 20, 22(1), 26, 27(1.1), 50. Federal Courts Rules, SOR/98-106, Tariff B, Column III. Patent Act, R.S.C., 1985, c. P-4, ss. 40, 41, 52. Tax Court of Canada Act, R.S.C., 1985, c. T-2. CASES CITED APPLIED: Kellogg Company v. Kellogg, (SCC), [1941] S.C.R. 242, [1941] 2 D.L.R. 545; Pfizer Canada Inc. v. Teva CanadaLimited, 2016 FCA 161, 400 D.L.R. (4th) 723. OVERRULED: Lawthier v. 424470 B.C. Ltd. (1995), 60 C.P.R. (3d) 510, 95 F.T.R. 81 (F.C.T.D.).

CONSIDERED: Clopay Corporation and Canadian General Tower Ltd. v. Metalix Ltd. (1960), 34 C.P.R. 232, 20 Fox Pat. C. 110 (Ex. Ct.), affd (1961),39 C.P.R. 23, 22 Fox Pat. C. 2 (S.C.C.); Titan Linkabit Corp. v. S.E.E. See Electronic Engineering Inc. (1992), 44 C.P.R. (3d) 469, 58F.T.R. 1 (F.C.T.D.); Trial Lawyers Association of British Columbia v. British Columbia (Attorney General), 2014 SCC 59, [2014] 3S.C.R. 31; Canada (Attorney General) v. TeleZone Inc., 2010 SCC 62, [2010] 3 S.C.R. 585. REFERRED TO: Bell ExpressVu Limited Partnership v. Rex, 2002 SCC 42, [2002] 2 S.C.R. 559; Canada Trustco Mortgage Co. v.

Canada, 2005 SCC 54,[2005] 2 S.C.R. 601; Entertainment Software Association v. Society Composers, Authors and Music Publishers of Canada, 2020 FCA100; Apotex Inc. v. Allergan, Inc., 2016 FCA 155, 399 D.L.R. (4th) 549; Beam Suntory Inc. v. Domaines Pinnacle Inc., 2016 FCA 212,487 N.R. 270; Apotex Inc. v. ADIR, 2017 FCA 23, 406 D.L.R. (4th) 572; Canada (Office of the Information Commissioner) v. CalianLtd., 2017 FCA 135, 414 D.L.R. (4th) 165; Canada v. Agnico-Eagles Mines Limited, 2016 FCA 130, 483 N.R. 92; Pfizer Canada Inc. v.Teva Canada Limited, 2015 FCA 257, 480 N.R. 217; Urquhart v.

Canada, 2016 FCA 76, 482 N.R. 31; Leuthold v. CanadianBroadcasting Corporation, 2014 FCA 173, [2015] 3 F.C.R. 760, 462 N.R. 181; Toronto Real Estate Board v. Canada (Commissioner ofCompetition), 2017 FCA 236, [2018] 3 F.C.R. 563; Murphy v. Amway Canada Corporation, 2013 FCA 38, [2014] 3 F.C.R. 478, 443N.R. 356; ITO-Int. Terminal Operators v. Miida Electronics, (SCC), [1986] 1 S.C.R. 752, (1986), 28 D.L.R. (4th) 641;AK Steel Corporation v. Acelormittal Mines Canada Inc., 2014 FC 118, 447 F.T.R. 134, affd 2014 FCA 287, 466 N.R. 159; OffshoreInteriors Inc. v.

Sargeant, 2015 FCA 46, 467 N.R. 355; Burin Peninsula Marine Service Centre v. Forsey, 2015 FCA 216, 476 N.R. 183;Unilux Manufacturing Co. v. Miller (1994), 55 C.P.R. (3d) 199 (F.C.T.D.); Safematic, Inc. v. Sensodec Oy (1988), 21 C.P.R. (3d) 12, 20C.I.P.R. 143 (F.C.T.D.); R.W. Blacktop Ltd. v. Artec Equipment Co. (1991), 39 C.P.R. (3d) 432, 50 F.T.R. 225 (F.C.T.D.); Eli Lilly andCo. v. Apotex Inc., 2002 FCT 1007, 21 C.P.R. (4th) 360; Tommy Hilfiger Licensing, Inc. v. 2970-0085 Quebec Inc. (2000), 6 C.P.R. (4th)374, (F.C.T.D.); Alchem Capital Corporation v. Nautilus Plus Inc., (F.C.T.D.); Innotech Pty. Ltd.v.

Phoenix Rotary Spike Harrows Ltd. (1997), (FCA), 74 C.P.R. (3d) 275, 215 N.R. 397 (F.C.A.); Possian v.Canadian Olympic Association (1996), 74 C.P.R. (3d) 509, [1996] F.C.J. No. 1555 (QL) (T.D.); Kane v. Hooper (1996), 68 C.P.R. (3d)267, at page 272, 113 F.T.R. 292 (F.C.T.D.); Asse International, Inc. v. Svenska Statens Språkresor, AB (1996), 70 C.P.R. (3d) 222, 119F.T.R. 208 (F.C.T.D.); R.L.P. Machine & Steel Fabrication Inc. v. Ditullio, 2001 FCT 245, 12 C.P.R. (4th) 15; Axia Inc. v. NorthstarTool Corp., 2005 FC 573, 39 C.P.R. (4th) 299; Hupacasath First Nation v.

Canada (Foreign Affairs and International Trade Canada),2015 FCA 4, 379 D.L.R. (4th) 737; Steel v. Canada (Attorney General), 2011 FCA 153, [2011] 1 F.C.R. 143; Peel (RegionalMunicipality) v. Canada, (FCA), [1989] 2 F.C. 562 (1988), 55 D.L.R. (4th) 618 (C.A.); Peel (Regional Municipality)v. Ontario (1990), (ON CA), 1 O.R. (3d) 97, 75 D.L.R. (4th) 523 (C.A.); McNamara Construction et al. v. TheQueen, (SCC), [1977] 2 S.C.R. 654; (1977), 75 D.L.R. (3d) 273; Hutchingame Growth Capital Corporation v. DaytonBoot Co. Enterprises Ltd., 2019 FCA 152, 52 Admin. L.R. (6th) 1; Holt Cargo Systems Inc. v.

ABC Containerline N.V. (Trustees of),2001 SCC 90, [2001] 3 S.C.R. 907; Strickland v. Canada (Attorney General), 2015 SCC 37, [2015] 2 S.C.R. 713; Reza v. Canada, (SCC), [1994] 2 S.C.R. 394, (1994), 116 D.L.R. (4th) 61; Baker v. Canada (Minister of Citizenship and Immigration), (SCC), [1999] 2 S.C.R. 817, (1999), 174 D.L.R. (4th) 193. AUTHORS CITED Bushnell, Ian. The Federal Court of Canada: A History, 1875–1992, Toronto: University of Toronto Press, 1997.

Canada. Parliament. House of Commons Debates , 28th Parl., 2nd Sess. (March 25, 1970). Canada. Parliament. House of Commons, Minutes of Proceedings and Evidence of the Legislative Committee on Bill C-38 , 34th Parl., 2nd Sess., Issue No. 1 (November 23, 1989). Canada. Parliament. House of Commons, Minutes of Proceedings and Evidence of the Legislative Committee on Bill C-38 , 34th Parl., 2nd Sess., Issue No. 6 (December 19, 1989). Canada. Parliament. House of Commons, Minutes of Proceedings and Evidence of the Legislative Committee on Bill C-38 , 34th Parl., 2nd Sess., Issue No. 7 (January 1, 1990).

Crane, Brian Q.C., “Jurisdiction of the Federal Court” Paper delivered at Federal Court of Canada 20th Anniversary Symposium, 26 June 1991, published in The Federal Court of Canada – An Evaluation , Ottawa: Federal Court of Canada, 1991. Dawson, Mary E. Q.C., “Bill C-38: Some Reforms for the Federal Court of Canada” Paper delivered at Federal Court of Canada 20th Anniversary Symposium, 26 June 1991, published in The Federal Court of Canada – An Evaluation , Ottawa: Federal Court of Canada, 1991.

Mullan, David J. “The Federal Courts Act and Federal Jurisdiction” , (Paper delivered at Federal Court of Appeal and Federal Court Education Seminar: The Jurisdiction of the Federal Courts, 27–28 October 2011, Ottawa, Ont. Turner, John N. “The Origin and Mission of the Federal Court of Canada” Paper delivered at Federal Court of Canada 20th Anniversary Symposium, 26 June 1991, published in The Federal Court of Canada – An Evaluation , Ottawa: Federal Court of Canada, 1991.

APPEAL from a Federal Court decision ( 2016 FC 830 , 140 C.P.R. (4th) 213) dismissing the appellant’s application for an order directing the Commissioner of Patents to vary the records of the Patent Office to reflect it as owner of Canadian Patent No. 2222058. Appeal allowed. APPEARANCES Peter Wells for appellant. James T. Swanson for respondent. SOLICITORS OF RECORD McMillan LLP , Toronto, for appellant. Miller Thomson LLP , Calgary, for respondent.

The following are the reasons for judgment rendered in English by [ 1 ] Stratas j.a. : This is an appeal from the judgment of the Federal Court ( per Boswell J.): 2016 FC 830 , 140 C.P.R. (4th) 213 . The Federal Court dismissed an application brought by the appellant for an order directing the Commissioner of Patents to vary the records of the Patent Office to reflect it as owner of Canadian Patent No. 2222058. [ 2 ] The Federal Court held that it did not have jurisdiction over the application.

In its view, the application required it to adjudicate a contractual dispute, a matter reserved exclusively to the provincial superior courts. [ 3 ] In my view, this was in error. As will be seen, the Federal Court has been given the express jurisdiction to make the order sought in this area — one involving the title to patents and the Federal Court’s role in superintending the Patent Office.

The fact that agreements and other commercial instruments need to be construed and interpreted as part of the exercise of jurisdiction — as, for example, in the case of the Court’s jurisdiction over appeals in federal taxation matters — does not eliminate that jurisdiction. Interpreting agreements and other commercial instruments is not the exclusive preserve of provincial superior courts. [ 4 ] Thus, for the reasons that follow, I would reverse the judgment of the Federal Court and allow the appellant’s application with costs here and below. [ 5 ] The Federal Courts Act , R.S.C., 1985, c. F-7,

section 26 provides that the Federal Court has “original jurisdiction in respect of any matter” in which “jurisdiction has been conferred by

an Act of Parliament on … the Federal Court” . Before the Federal Court was an application made under

section 52 of the Patent Act , R.S.C., 1985, c. P-4 ,

an Act of Parliament.

Section 52 of the Patent Act provides that the “Federal Court has jurisdiction … to order that any entry in the records of the Patent Office relating to the title to a patent be varied or expunged” . The application before the Federal Court sought just that. On the plain language of

section 26 of the Federal Courts Act and

section 52 of the Patent Act , the Federal Court had jurisdiction over the appellant’s application. [ 6 ] The respondent and the Federal Court suggest that

section 20 of the Federal Courts Act concerning the jurisdiction of the Federal Courts over certain forms of intellectual property is somehow relevant to the statutory jurisdiction of the Federal Court in this matter. Arguably, it has no relevance whatsoever. This matter does not arise and has nothing to do with

section 20 of the Federal Courts Act . [ 7 ]

Section 52 of the Patent Act must be given its authentic meaning in accordance with its text, viewed in light of its context and purpose: Bell ExpressVu Limited Partnership v. Rex , 2002 SCC 42 , [2002] 2 S.C.R. 559 and Canada Trustco Mortgage Co. v. Canada , 2005 SCC 54 , [2005] 2 S.C.R. 601 , at paragraph 10 ; and in this Court see Entertainment Software Association v. Society Composers, Authors and Music Publishers of Canada , 2020 FCA 100 and cases cited therein at paragraph 39.

[8] The plain meaning of the words of

section 52 of the Patent Act is clear. A consideration of context and purpose confirms thatplain meaning: the Federal Court has the jurisdiction to vary or expunge the title to a patent as reflected in the records of the PatentOffice. [9] An important element of context is that

section 52 of the Patent Act gives this power to the Federal Court, not the Patent Office.Thus, one may surmise that the power is a judicial one, not an administrative one. If the power were purely administrative—to rubberstamp a legal state of affairs adjudicated on the facts and the law elsewhere—Parliament would have given it to the Patent Office. ButParliament gave it to the Federal Court. [10] The power given under

section 52 of the Patent Act is a judicial one, to determine issues of title to a patent. That determinationmay involve a number of things, including the

interpretation of agreements and other commercial instruments. Quite appropriately, thatjudicial power has been given to the Federal Court, not the Patent Office. [11] The only Supreme Court decision to interpret

section 52 of the Patent Act supports this conclusion: Clopay Corporation andCanadian General Tower Ltd. v. Metalix Ltd. (1960), 34 C.P.R. 232, 20 Fox Pat. C. 110 (Ex. Ct.), affd (1961), 39 C.P.R. 23, 22 Fox Pat.C. 2 (S.C.C.). In the Supreme Court’s view,

section 52 “was enacted so as to enable the rectification by the Court of the records in thePatent Office relating to title in order that the party or parties actually entitled to the grant … might have their rights properly recorded”:Clopay, at page 235. It observed that the “powers conferred” under

section 52 “are very wide, although they should be used with greatdiscretion”: Clopay, at page 235. [12] Inherent in this short statement from the Supreme Court, a statement that binds us, is the answer to the appellant’s claim that theFederal Court does not have jurisdiction. The Federal Court can determine issues of title—the “very wide” power of deciding who is“actually entitled to the grant” of the patent and who has the “rights” to the patent—and ensure that the records of the Patent Officereflect the correct legal situation. [13] The Federal Court held and, in this Court, the respondent submits, that in an application like this, the Federal Court is engaged inthe

interpretation of agreements and this is an exclusive function of the superior courts. Thus, according to them, the Federal Courtcannot engage in the

interpretation of agreements in this case. [14] I do not agree that the

interpretation of agreements is exclusively a function of the superior courts. I also do not agree that justbecause the superior courts interpret agreements, the Federal Courts cannot interpret agreements. [15] In the course of exercising their jurisdiction, the Federal Courts frequently determine questions that require agreements to beinterpreted. [16] Take, for example, the Tax Court’s jurisdiction over tax appeals and this Court’s jurisdiction in appeals from the Tax Court: TaxCourt of Canada Act, R.S.C., 1985, c. T-2; Federal Courts Act, R.S.C., 1985, c. F-7, subsection 27(1.1).

It is frequently the case that thisCourt must interpret agreements and other commercial instruments in order to ascertain the true nature of a transaction or series oftransactions as part of deciding a tax issue. In some cases, the tax law element in the decision is minimal and the

interpretation element issignificant, yet the matter still properly resides in the Tax Court and, on appeal, in this Court. Taxpayers need not litigate the nature oftheir transactions by seeking declarations in the superior courts and then import those rulings to the Tax Court or to this Court. [17] The area of taxation is not alone. A cursory review of appellate decisions rendered in the past few years reveals a docket teemingwith questions of contractual

interpretation: Apotex Inc. v. Allergan, Inc., 2016 FCA 155, 399 D.L.R. (4th) 549 and Beam Suntory Inc. v.Domaines Pinnacle Inc., 2016 FCA 212, 487 N.R. 270 (interpreting settlement agreements); Apotex Inc. v. ADIR, 2017 FCA 23, 406D.L.R. (4th) 572 (interpreting transfer price agreement in order to assess patent infringement damages); Canada (Office of theInformation Commissioner) v. Calian Ltd., 2017 FCA 135, 414 D.L.R. (4th) 165 (interpreting the scope of a disclosure clause in aprocurement contract for the purposes of an access to information request); Canada v.

Agnico-Eagles Mines Limited, 2016 FCA 130,483 N.R. 92 (interpreting an indenture to determine whether a taxpayer realized a capital gain); Pfizer Canada Inc. v. Teva CanadaLimited, 2015 FCA 257, 480 N.R. 217 (interpreting an agreement that purportedly barred a party from bringing the action in question);Urquhart v. Canada, 2016 FCA 76, 482 N.R. 31 (interpreting an employment contract to determine whether certain expenses aredeductible); Leuthold v. Canadian Broadcasting Corporation, 2014 FCA 173, [2015] 3 F.C.R. 760, 462 N.R. 181 (interpreting acopyright licensing agreement); Toronto Real Estate Board v.

Canada (Commissioner of Competition), 2017 FCA 236, [2018] 3 F.C.R.563 (interpreting whether a consent agreement authorized information disclosure in accordance with federal privacy legislation); Murphyv. Amway Canada Corporation, 2013 FCA 38, [2014] 3 F.C.R. 478, 443 N.R. 356 (interpreting arbitration clause to determine if itbarred the plaintiff from bringing a class action). [18] This is just the very recent history of contractual

interpretation in this Court. Yet even within this small sample, one seescontractual

interpretation surfacing in almost all of the Federal Courts’ jurisdictional pockets: tax, intellectual property, administrativelaw, maritime law, privacy and access to information. [19] Questions of contractual

interpretation routinely arise in maritime law as well: subsection 22(1) of the Federal Courts Act; ITO-Int. Terminal Operators v. Miida Electronics, (SCC), [1986] 1 S.C.R. 752, (1986), 28 D.L.R. (4th) 641; AK SteelCorporation v. Acelormittal Mines Canada Inc., 2014 FC 118, 447 F.T.R. 134, at paragraphs 3–20, affd 2014 FCA 287, 466 N.R. 159(breach of contract); Offshore Interiors Inc. v. Sargeant, 2015 FCA 46, 467 N.R. 355 (interpreting a builder’s mortgage); BurinPeninsula Marine Service Centre v.

Forsey, 2015 FCA 216, 476 N.R. 183 (interpreting a liability exclusion clause). [20] Patent infringement cases also supply many examples. For example, defendants in patent infringement actions in the FederalCourt sometimes defend on the basis that the plaintiff does not own the patent. That issue, frequently determined by interpretingagreements and other instruments, is something the Federal Court can do in patent infringement actions: see, e.g., Unilux ManufacturingCo. v. Miller (1994), 55 C.P.R. (3d) 199 (F.C.T.D.); Kellogg Company v. Kellogg, (SCC), [1941] S.C.R. 242, [1941] 2D.L.R. 545; Safematic, Inc. v.

Sensodec Oy (1988), 21 C.P.R. (3d) 12, 20 C.I.P.R. 143 (F.C.T.D.); R.W. Blacktop Ltd. v. ArtecEquipment Co. (1991), 39 C.P.R. (3d) 432, 50 F.T.R. 225 (F.C.T.D.); Titan Linkabit Corp. v. S.E.E. See Electronic Engineering Inc.(1992), 44 C.P.R. (3d) 469, 58 F.T.R. 1 (F.C.T.D.).

[21] Some of these cases warrant closer scrutiny. They show where the Federal Court went astray in this case. [22] In Kellogg, the Commissioner of Patents refused to issue a patent under what is now sections 40–41 of the Patent Act.

In supportof the Commissioner’s decision, the appellant sought to rely on employment contracts to disprove the respondent’s claim to ownershipof a patent. [23] While acknowledging that the then Exchequer Court had “no jurisdiction to determine an issue … concerning a contract betweensubject and subject”, the Supreme Court found that the Exchequer Court had jurisdiction because the employment contracts were only“advanced for the purpose of establishing the appellant” as the lawful owner of the patent: Kellogg, at pages 249–250.

Adjudicating titleto a patent was, and remains today, firmly within the Federal Court’s jurisdiction. [24] The rule in Kellogg is simple: the Exchequer Court (and now the Federal Court) can interpret contracts between private citizensas long as it is done under a sphere of valid federal jurisdiction vested in the Federal Court. It is true that, absent a specific statutory grantof jurisdiction to the Federal Court, parties cannot assert a contractual claim in the Federal Court against another private party to obtain adamages remedy.

But Kellogg tells us that where such a grant is present, parties can claim a remedy even if their entitlement turns on amatter of

interpretation of an agreement or other instrument—for example, the remedy of correcting the records in the Patent Office torecognize one’s title to a patent under

section 52 of the Patent Act. [25] Kellogg was applied by the Federal Court in Titan Linkabit Corp., above. In Titan, the defendants’ breach of contract allegationswere “advanced, not to seek relief for breach of the contract, but in support of the defence of non-infringement” (at page 474). TheFederal Court was “not being asked … to determine the validity of the contract between the parties, nor to determine whether there hasbeen a breach of the contract”. Instead, the “primary issue” was “whether there has been infringement”: at page 474.

Therefore, theFederal Court had jurisdiction over the matter. [26] Kellogg and Titan Linkabit have been applied in this way by judges and prothonotaries in many intellectual property decisions inthe Federal Court: e.g., Eli Lilly and Co. v. Apotex Inc., 2002 FCT 1007, 21 C.P.R. (4th) 360, at paragraphs 42–46; Tommy HilfigerLicensing, Inc. v. 2970-0085 Quebec Inc. (2000), 6 C.P.R. (4th) 374, (F.C.T.D.), at paragraphs 4–6; Alchem CapitalCorporation v. Nautilus Plus Inc., (F.C.T.D.), at paragraph 2; Innotech Pty. Ltd. v.

Phoenix Rotary Spike HarrowsLtd. (1997), (FCA), 74 C.P.R. (3d) 275, 215 N.R. 397 (F.C.A.), at pages 267–277; Possian v. Canadian OlympicAssociation (1996), 74 C.P.R. (3d) 509, at page 511, [1996] F.C.J. No. 1555 (QL) (T.D.); Kane v. Hooper (1996), 68 C.P.R. (3d) 267, atpage 272, 113 F.T.R. 292 (F.C.T.D.); Asse International, Inc. v. Svenska Statens Språkresor, AB (1996), 70 C.P.R. (3d) 222, 119 F.T.R.208 (F.C.T.D.); Unilux Manufacturing Co. v. Miller (1994), 55 C.P.R. (3d) 199 (F.C.T.D.) [cited above], at page 203; R.W. BlacktopLtd. v.

Artec Equipment Co. (1991), 39 C.P.R. (3d) 432, 50 F.T.R. 225 (F.C.T.D.) [cited above], at pages 438–439. [27] In the case at bar, the Federal Court declined jurisdiction on the basis of its decision in Lawthier v. 424470 B.C. Ltd. (1995), 60C.P.R. (3d) 510, 95 F.T.R. 81 (F.C.T.D.). In my view, this case, not binding on this Court, was incorrectly decided. It is contrary toKellogg. Worse, it set off a line of jurisprudence spiralling away from Kellogg. [28] In Lawthier, the plaintiff invoked certain contracts solely in support of an ownership claim in the Patent Office.

The Courtdeclined jurisdiction because it was “primarily a case in contract” where “patent issues [were] ancillary” and contractual determinationswould “dictate ownership of the patent”: pages 511–512. The decision is very brief with only an in-passing citation to Titan Linkabit. Itdoes not engage with the jurisprudence outlined above nor does it follow Kellogg, let alone even cite it. [29] Nowhere in Kellogg does the inquiry depend on whether contracts will “dictate” ownership. Indeed, the contracts in Kelloggwere advanced because, in the appellant’s eyes, they did dictate ownership.

As pleaded in Kellogg, the employment arrangement wouldprove that the appellant was “entitled to the benefit of [the patent]”: page 246. The case was “primarily … [in] contract” [page 244]. [30] Outside of Lawthier, the Federal Court cited two other decisions in support of its conclusion: R.L.P. Machine & Steel FabricationInc. v. Ditullio, 2001 FCT 245, 12 C.P.R. (4th) 15 and Axia Inc. v. Northstar Tool Corp., 2005 FC 573, 39 C.P.R. (4th) 299.

But thesecases simply affirm Lawthier and its flawed analysis without citing the Supreme Court’s controlling authority in Kellogg or any of thejurisprudence listed above. [31] Even if Kellogg did not exist or apply, I would decline to regard Lawthier as good law. The bounds of the Federal Court’sjurisdiction do not rest on the nebulous exercise of assessing whether something is “primarily a case in contract” or whether contractualinterpretation will “dictate” the end result.

To do this is to take a Goldilocks approach to jurisdiction, taste-testing each case for theappropriate amount of federal flavour and asserting jurisdiction only in cases where the federal content is, in the personal opinion of ajudge, “just right”. Jurisdiction should not depend on the palate of individual judges. And for reasons of access to justice andminimization of litigation expense, Parliament does not set fuzzy tests for jurisdiction but rather adopts more certain, brighter lines.Courts should analyze jurisdictional issues with that front of mind. See Hupacasath First Nation v.

Canada (Foreign Affairs andInternational Trade Canada), 2015 FCA 4, 379 D.L.R. (4th) 737, at paragraph 47, citing Steel v. Canada (Attorney General), 2011 FCA153, [2011] 1 F.C.R. 143, at paragraphs 62–73; see also Steel, at paragraph 69. [32] The Lawthier approach would render the Federal Courts entirely dependent on provincial courts in many cases, requiringlitigants to litigate in two forums—first, a superior court for the contractual ruling and then the Federal Court for a ruling based on thesuperior court’s determination. Such an approach is against the purpose of

section 52 of the Patent Act and the Federal Courts Actgenerally. By burdening litigants unnecessarily, it also offends the unwritten principle of access to justice recognized by the SupremeCourt in Trial Lawyers Association of British Columbia v. British Columbia (Attorney General), 2014 SCC 59, [2014] 3 S.C.R. 31. [33] The continuation of a Federal Courts system in Canada under the Federal Courts Act and its predecessors was meant to ensurethe uniform application and

interpretation of federal law. However, it was not meant to complicate Canadian law, requiring parties tolitigate in two sets of courts instead of one. This has been stressed in legislative debates concerning possible amendments to the FederalCourts Act. One particularly poignant example from 1990 will suffice. [34] In the process leading up to legislative reform of the Federal Courts Act in 1990, some questioned whether contract and tort

claims against the Crown should remain within the Federal Courts’ jurisdiction under paragraph 17(2)(

b) of the Federal Courts Act. [35] The Canadian Bar Association led the charge. At a legislative committee meeting, a witness representing the Canadian BarAssociation opposed the Federal Courts’ jurisdiction over disputes against the federal Crown: Our fundamental position that the court should take on responsibilities in specialized areas but should not displace the traditional roleof the superior courts of the provinces. This leads to our first recommendation. The new legislation provides for concurrency ofjurisdiction in contract and tort suits against the government ….

It is our view that these cases should be exclusively within thejurisdiction of provincial courts …. [W]e think the Federal Court should not even get in on those cases on a concurrent basis. We thinkthe exclusive jurisdiction for suits against government and for suits in fields of contract and tort should be in the provincial courts.[Emphasis added.] (Canada. Parliament.

House of Commons, Minutes of Proceedings and Evidence of the Legislative Committee on Bill C-38, 34th Parl.,2nd Sess., Issue No. 6, December 19, 1989, at pages 6:6–6:7.) [36] This witness envisioned the Federal Courts as a home for certain subject matters: patents, copyright, trademarks, maritime law,tax and federal administrative law but “[a]ll other cases should be in the provincial courts”: Brian Crane Q.C., “Jurisdiction of theFederal Court” (Paper delivered at Federal Court of Canada 20th Anniversary Symposium, 26 June 1991), published in The FederalCourt of Canada – An Evaluation (Ottawa: Federal Court of Canada, 1991), at pages 82–83; see also David J.

Mullan, “The FederalCourts Act and Federal Jurisdiction”, (Paper delivered at Federal Court of Appeal and Federal Court Education Seminar: The Jurisdictionof the Federal Courts, 27–28 October 2011), at page 2; Ian Bushnell, The Federal Court of Canada: A History, 1875–1992, (Toronto:University of Toronto Press, 1997), at pages 313–314. [37] But, in the view of the members of the Legislative Committee on Bill C-38, this was too simplistic.

One of the members posed aquestion about what would happen if areas of federal jurisdiction (like intellectual property or tax) collided with contract or tort law,essentially the key question raised by this appeal: If a case has a number of elements to it, which include contract or tort but may also include matters that are clearly and exclusivelywithin the jurisdiction of the Federal Court, are we not walking into a situation where one provides for complexities or is there a wayaround that problem? Or is it a problem at all? (Canada. Parliament.

House of Commons, Minutes of Proceedings and Evidence of the Legislative Committee on Bill C-38, 34th Parl.,2nd Sess., Issue No. 6, December 19, 1989, at page 6:15.) [38] The ensuing discussion is somewhat ambiguous and unclear. What can be gleaned from this exchange, though, is that theLegislative Committee identified the intersection of federal jurisdiction and contract/tort cases as a problem that, presumably, should notresult in dividing proceedings between federal and provincial courts.

To paraphrase the discussion, it is hard enough for many to pursue acase from beginning to end; why force them to do it twice? [39] Overall, the Canadian Bar Association’s suggestions were rejected: … I think the way we are doing it is fair, Mr. Chairman, and I have seen no compelling reason why we would not want the FederalCourt, with the judicial expertise that is available at that level. …] I have not heard from either the Canadian Bar Association or anyoneelse any compelling reason why we would exclude the Federal Court. (Hon.

Robert Nicholson, the Parliamentary Secretary to the Minister of Justice and Attorney General of Canada, Canada. Parliament.House of Commons, Minutes of Proceedings and Evidence of the Legislative Committee on Bill C-38, 34th Parl., 2nd Sess., Issue No. 7,January 1, 1990, at page 7:10.) [40] This express rejection tears at the notion that Parliament regards the

interpretation of agreements as a task alien to the FederalCourts or that its judges are incapable of applying contractual principles. Sometimes the Federal Courts have to do it under thejurisdiction they have lawfully been given.

Where contractual disputes arise within its jurisdiction, the Federal Courts are empowered toresolve these disputes just as any other court does, and they do so all the time. [41] If the Federal Courts declined cases that “primarily” involved contracts, it would be forced to divide many of its cases acrossdifferent superior court jurisdictions across the country. [42] Long ago, this happened fairly often. Certain cases straddled federal and provincial jurisdiction.

Because the Federal Courts’jurisdiction over some proceedings against the Crown was exclusive, when those proceedings required counterclaims or third partyproceedings or non-federal-Crown defendants, proceedings in provincial courts would have to be brought—despite arising from the exactsame facts: see, e.g., Peel (Regional Municipality) v. Canada, (FCA), [1989] 2 F.C. 562, (1988), 55 D.L.R. (4th) 618(C.A.); Peel (Regional Municipality) v.

Ontario (1990), (ON CA), 1 O.R. (3d) 97, 75 D.L.R. (4th) 523 (C.A.). [43] In 1990, Bill C-38 [Act to Amend the Federal Court Act, the Crown Liability Act, the Supreme Court Act and other Acts inConsequence thereof, S.C. 1990, c. 8] sought to minimize this problem by making the Courts’ jurisdiction concurrent in certain areas.This ensured that, where a counterclaim or third party claim was brought, a dispute arising from the same facts could be adjudicatedentirely within a single proceeding: Canada, Parliament, House of Commons, Minutes of Proceedings and Evidence of the LegislativeCommittee on Bill C-38, 34th Parl., 2nd Sess., Issue No. 1, November 23, 1989, at page 1:15; Mary E.

Dawson, Q.C., “Bill C-38: SomeReforms for the Federal Court of Canada” (Paper delivered at Federal Court of Canada 20th Anniversary Symposium, 26 June 1991),published in The Federal Court of Canada – An Evaluation (Ottawa: Federal Court of Canada, 1991), at page 256.[44] If the FederalCourt does not have jurisdiction in this case—and by extension in any case where contractual

interpretation is central to thedisposition—the problem of divided proceedings will once again become a feature of the Federal Court system despite Parliament’sintention. If the Federal Courts always need the provincial courts as a crutch to determine a matter leaning on contractual considerationsor other private rights, their very core and purpose, as encapsulated by John Turner, the architect of the first Federal Courts Act, would

be eviscerated: [translation] [W]e looked for a national court that could apply federal law-a national court with expertise in all areas of federal law.Taxes, admiralty, patents, administrative law, immigration law-and I looked for the court that could adopt some uniformity in itsjudgments. To have national cohesion in its judgments. (The Right Hon. John N.

Turner, “The Origin and Mission of the Federal Court of Canada” (Paper delivered at Federal Court of Canada20th Anniversary Symposium, 26 June 1991), published in The Federal Court of Canada – An Evaluation (Ottawa: Federal Court ofCanada, 1991), at page 5.) [45] There will be cases where the Federal Court does not have jurisdiction because the matter is purely contractual between privateparties: see, e.g., McNamara Construction et al. v.

The Queen, (SCC), [1977] 2 S.C.R. 654, (1977), 75 D.L.R. (3d) 273.And there will be cases where on the particular facts it would be more appropriate for the Federal Court to stay proceedings before it toallow ongoing related litigation in the provincial superior courts to go ahead: Hutchingame Growth Capital Corporation v. Dayton BootCo. Enterprises Ltd., 2019 FCA 152, 52 Admin. L.R. (6th) 1.

In the case at bar, different from Hutchingame, no one asked the FederalCourt to stay its proceedings. [46] As well, federal proceedings may be stayed where it is in the interests of justice that related proceedings in the provincialsuperior court or elsewhere resolve the issue: Federal Courts Act,

section 50 and see, e.g., Holt Cargo Systems Inc. v. ABC ContainerlineN.V. (Trustees of), 2001 SCC 90, [2001] 3 S.C.R. 907; and in the context of judicial review (though not restricted to that context), seeStrickland v. Canada (Attorney General), 2015 SCC 37, [2015] 2 S.C.R. 713; and, vice versa, see Reza v. Canada, (SCC), [1994] 2 S.C.R. 394, (1994), 116 D.L.R. (4th) 61. [47] But when dealing with an application under

section 52 of the Patent Act, the Federal Court remains free to carry out the taskParliament has given to it—to determine who should be reflected on the records of the Patent Office as the owner of a patent—even ifthat involves interpreting agreements and other instruments. [48] For the foregoing reasons, I conclude that the Federal Court had the statutory jurisdiction to decide the application before itunder

section 52 of the Patent Act. [49] The respondent has not objected to the jurisdiction of the Federal Court based on the limitations imposed by

section 101 of theConstitution Act, 1867, as interpreted by the Supreme Court in ITO-Int’l Terminal Operators, above. For completeness, I wish to notethat the objection does not apply in this case.

Section 52 of the Patent Act is the law on the books, it gives the Federal Court jurisdiction,and no constitutional attack has been launched against it based on

section 101 of the Constitution Act, 1867. In any event, the matterbefore us concerns who has title to the patent, which is a matter of federal jurisdiction and an issue that satisfies the three-fold test inITO. And the Federal Court has a general “superintending jurisdiction” in relation to federal boards and commissions, such as the federalPatent Office in issue here: Canada (Attorney General) v. TeleZone Inc., 2010 SCC 62, [2010] 3 S.C.R. 585, at paragraph 50, citingHouse of Commons Debates, 28th Parl., 2nd Sess., March 25, 1970, at pages. 5470–5471.

A provision empowering the Federal Court todirect the federal Patent Office to vary its records is squarely within that federal superintending jurisdiction. [50] Because of its ruling on the issue of jurisdiction, the Federal Court did not go on to consider the merits of the issue under section52 of the Patent Act. [51] This Court has the power to consider the merits and make the judgment the Federal Court should have made: Federal Courts Act,subparagraph 52(b)(i). The record before this Court is complete and so it should do so.

None of the factors that would justify remittingthe matter to the Federal Court are present here: Pfizer Canada Inc. v. Teva Canada Limited, 2016 FCA 161, 400 D.L.R. (4th) 723, atparagraphs 153–157. [52] For the purposes of determining title, the only facts that the Court needs to rely upon are not in dispute. The background is set outin the reasons of the Federal Court, at paragraphs 3–5. The appellant fairly concedes that the chain of title up until 2010 is somewhat“murky”.

But the appellant says that the facts thereafter are clear and are all that the Court needs to consider to determine the issue oftitle for the purposes of

section 52 of the Patent Act. I agree. [53] On December 15, 2010, Dr. Markels, the original owner and inventor of Canadian Patent No. 2222058, signed an agreementwhich conceded Mr. Baker was the owner of the Patent. As far as title is concerned, that is the starting point. [54] The agreement, by clause 4, incorporated, unchanged, a reversionary clause found in a 2007 agreement. Under that 2007agreement, there were a number of conditions which, if breached, required the reassignment of the Patent to Dr. Markels. One was thecontinued payment of royalties. [55] It is common ground that Mr.

Baker made his last royalty payment in 2011. Thus, Dr. Markels was entitled to ask for theassignment of the Canadian Patent to him at any time after January 1, 2012, in accordance with clause 4. He did so, on May 12, 2015.Mr. Baker refused. [56] In 2015, Dr. Markels signed an agreement with the appellant, purporting to assign the rights to the Patent to the appellant. Underthe agreement, Dr. Markels agreed to take steps to remove the respondent as registered owner of the Patent. He prepared a reassignmentbut Mr. Baker never signed it. [57] The foregoing shows that Dr.

Markels gained title to the Patent and, under the 2015 agreement, the appellant is now the owner.The records of the Patent Office should reflect this. [58] Accordingly, the Commissioner of Patents should vary the entry in the records of the Patent Office relating to the title of thePatent and to list the appellant as the owner thereof.

[59] We have been advised that there are proceedings pending elsewhere. No one has sought to stay this matter for that reason and sowe are bound to decide it. Depending on conflict of laws principles—which were not fully argued before us—it may be that ownershipdeterminations may be made in those proceedings. Again, according to conflict of laws principles, those determinations may haverelevance to the issue of what the records of the Patent Office in Canada should reflect.

Thus, the decision in this case should notforeclose any application made by any party in the future to vary the records of the Patent Office to reflect the correct legal state ofaffairs. [60] Both parties allege that elevated costs are warranted against the other. In my view, none of the conduct alleged by either partyrises to a level attracting an elevated cost award. [61] Enhanced costs, such as solicitor-client costs, are generally awarded where there has been reprehensible, scandalous oroutrageous misconduct connected with the litigation: see, e.g., Baker v.

Canada (Minister of Citizenship and Immigration), (SCC), [1999] 2 S.C.R. 817, at page 864, (1999), 174 D.L.R. (4th) 193. The conduct of the respondent does not rise to this highthreshold. [62] Therefore, I would allow the appeal, set aside the judgment of the Federal Court in file T-1620-15, grant the application anddirect the Commissioner of Patents to vary the entry in the records of the Patent Office relating to the title of Canadian Patent No.2222058 to list the appellant, SALT Canada Inc., as the owner thereof.

I would award the appellant its costs here and below at the mid-range of Column III of Tariff B [of the Federal Courts Rules, SOR/98-106]. Near J.A.: I agree.