Arctic Cat Inc. v. Bombardier Recreational Products Inc.

Date: 20160916

Docket: T-1353-13

Citation: 2016 FC 1047

Ottawa, Ontario, September 16, 2016

PRESENT: The Honourable Mr. Justice Roy

BETWEEN:

ARCTIC CAT INC. AND

ARTIC CAT SALES, INC.

Plaintiffs/Defendants

by counterclaim

and

BOMBARDIER RECREATIONAL

PRODUCTS INC.

Defendant/Plaintiff

by counterclaim

PUBLIC JUDGMENT AND REASONS

(Confidential Judgment and Reasons issued September 16, 2016)

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TABLE OF CONTENTS

I.

THE PARTIES.................................................................................................................... 6

TWO-STROKE ENGINE OPERATION........................................................................... 7

THE 738 PATENT ........................................................................................................... 10

A. An overview / Disclosure........................................................................................ 10

II.

III.

B.

The claims at issue................................................................................................... 17

IV.

V.

FOREIGN LITIGATION ................................................................................................. 19

THE WITNESSES............................................................................................................ 20

A. Brad Darling............................................................................................................ 21

B.

Troy Halvorson........................................................................................................ 22

C. Greg Spaulding........................................................................................................ 28

D. Bernard Guy ............................................................................................................ 35

E.

F.

Steward Strickland................................................................................................... 37

Bruno Schuehmacher............................................................................................... 41

G. The Experts.............................................................................................................. 47

CREDIBILITY OF EXPERTS......................................................................................... 48

VI.

VII. PERSON OF SKILL IN THE ART.................................................................................. 58

VIII. CLAIMS CONSTRUCTION............................................................................................ 71

A. “Ignition Pattern”..................................................................................................... 72

B.

Controlling the activation of the ignition source according to an ignition pattern in

which an ignition point during the compressing movement varies with operation speed of

the engine [and throttle position]. (claims 33(28), 47(41) and 16)................................... 77

A controller for activating the ignition source ..., the controller activating the

ignition source according to an ignition pattern in which an ignition point during the

compressing movement varies with the operation speed of the engine [and throttle

position]. (claims 40(34) and 11)...................................................................................... 77

C. The ignition pattern being selected from a plurality of different ignition patterns. 80

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D. The particular ignition pattern used by the controller being selected based upon the

sensed exhaust gas temperature. ....................................................................................... 81

E.

The different ignition patterns having different relationships between ignition point

and engine speed. .............................................................................................................. 82

F.

The ignition pattern being selected from a plurality of different basic ignition

patterns. (Claims 11 and 16) ............................................................................................. 85

G. The basic ignition pattern used by the controller being modified based upon the

sensed exhaust gas temperature. (Claims 11 and 16)........................................................ 87

IX.

INFRINGEMENT............................................................................................................. 91

A. The 440 HO and 600 RS engines ............................................................................ 96

B.

The 600 ETEC and 800 ETEC Engines .................................................................. 97

C. Analysis ................................................................................................................... 99

INVALIDITY ................................................................................................................. 106

A. Anticipation........................................................................................................... 110

X.

B.

Obviousness........................................................................................................... 114

XI.

OVERBREADTH........................................................................................................... 137

XII. INVENTOR .................................................................................................................... 146

XIII. CONCLUSION............................................................................................................... 159

XIV. DAMAGES..................................................................................................................... 160

A. Mr. A. Carter for the Plaintiffs.............................................................................. 164

(1) The expert compared two engines produced by BRP. One engine, the 800 P-

TEC does not practice the invention. That engine was compared to the 800 E-TEC

which practices the invention. That engine is a direct injection engine which does

not use a carburetor................................................................................................ 166

(2) The second method put forth by Mr. Carter was, in fact, a variation on the

theme summarized under (1). This time, instead of multiplying the contribution

margins derived from the difference from the contribution margin for the E-TEC

snowmobile and for the P-TEC snowmobile, amounts that reach $[REDACTED] in

2012 and $[REDACTED] in 2014, the expert multiplied these figures by a market

share of 20%, which would represent the patent holders’ market share. He arrives at

figures of $[REDACTED] (20% of $[REDACTED]) and $[REDACTED] (20% of

$[REDACTED]).................................................................................................... 169

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(3) Mr. Carter compared the additional profit that BRP was expecting for its new

600 E-TEC engine as it was comparing it to its “600” semi-direct injection engine.

The expert indicates that BRP was projecting an increased retail price attributable

to the direct-injection engine of $[REDACTED]/unit. Given that BRP in 2002

expected that some additional costs for the production for the E-TEC engine would

be $[REDACTED], Mr. Carter projected an incremental profit of between

$[REDACTED] and $[REDACTED] that would be associated with moving to the

E-TEC technology, which included the invention................................................. 170

(4) The preferred method offered by the expert is his comparison of AC

snowmobiles using model year 2005, where the engine does not include the

invention, and model year 2006, where the said invention is included................. 172

B.

Dr. Ugone for the Defendant................................................................................. 179

(1) Incremental cost-based apportionment ........................................................ 180

(2) Relative cost and inputs-based apportionment............................................. 183

(3) Accused functionality usage-based apportionment...................................... 187

XV. OBJECTIONS................................................................................................................. 198

A. Objections to admissibility of evidence ................................................................ 200

(1) Lack of factual basis..................................................................................... 200

B.

Case splitting ......................................................................................................... 203

C. Failure to comply with Expert Code of Conduct................................................... 209

D. Improper factual evidence ..................................................................................... 212

E.

Opinion beyond stipulated expertise ..................................................................... 213

XVI. POST SCRIPTUM.......................................................................................................... 214

JUDGMENT............................................................................................................................... 216

ANNEX “A”............................................................................................................................... 218

ANNEX “B” ............................................................................................................................... 230

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PUBLIC JUDGMENT AND REASONS

[1]

This action for infringement (section 54 of the Patent Act, RSC, 1985, c. P-4, hereinafter

Patent Act) is concerned with some claims found in Canadian Patent No 2,322,738, to which we

refer as the 738 Patent. In essence, Arctic Cat Inc. and Arctic Cat Sales Inc. allege that four

engines, used by Bombardier Recreational Products Inc. (BRP) in more than 125 000

snowmobiles sold in Canada in the last few years, infringe one or more of five asserted claims (3

of the five asserted claims are dependent on another independent claim such that there are in fact

eight claims in play in this case). The Defendant argues that it does not practice the Patent-in-

suit. Even if it did, it would argue that the 738 Patent would have to be invalid for anticipation

(lack of novelty) or obviousness (lack of inventiveness), is overbroad and the person presented as

the inventor is not, such that the Plaintiffs as the assignees do not have the standing required to

enforce the Patent. As for appropriate damages if a valid claim has been infringed, the parties

remain at a considerable distance from one another. The trial took place over a period of 25 days.

[2]

This action for infringement of a patent originated as a counterclaim to an action for

infringement launched by BRP against AC with respect to patents held by BRP that have a

different subject-matter, one which is not concerned with engines. The Patent bears the title

“Two-cycle Engine with temperature-Controlled Ignition Timing”. By order dated July 25, 2013,

Prothonotary Aronovitch determined that the whole matter be severed from the original action

and that it be pursued separately. As a result, AC became the Plaintiff in the action for

infringement, and BRP became the Defendant in that action and counterclaimed that the asserted

claims of the 738 Patent were, at any rate, invalid and void.

Page: 6

[3]

Over and above the damages sustained by the patentee which would come from a

declaration that its valid patent has been infringed, the Plaintiffs seek a permanent and

interlocutory injunction restraining BRP from infringing the asserted claims of the 738 Patent,

together with an order for the destruction of all vehicles that infringe its Patent. Exemplary,

aggravated and punitive damages, with pre and post judgment interests are also sought.

I.

The parties

[4]

One Plaintiff, Arctic Cat Inc., is a recreational vehicle manufacturer founded in the early

1960s by Edgar Hetteen, who has been described as the grandfather of the snowmobile industry.

Arctic Cat Inc. currently produces snowmobiles and other recreational vehicles destined for the

United States, Canada, and markets around the world.

[5]

The other Plaintiff, Arctic Cat Sales, Inc., is a wholly owned subsidiary of Arctic Cat,

Inc. that is responsible for the sale of Arctic Cat snowmobiles to independent third-party dealers

in Canada. Both Arctic Cat, Inc. and Arctic Cat Sales, Inc. (collectively, Arctic Cat or AC) are

incorporated pursuant to the laws of the U.S. State of Minnesota and have a head office located

at 601 Brooks Avenue South in Thief River Falls, Minnesota. Both are also Defendants by

counterclaim in view of the allegations of invalidity made by the Defendant.

[6]

The Defendant and Plaintiff by counterclaim, Bombardier Recreational Products Inc.

(BRP), is a public company incorporated pursuant to the Canada Business Corporations Act,

RSC 1985, c C-44. Like Arctic Cat, BRP is a recreational vehicle manufacturer. It traces its

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lineage back to the 1940s with the first “autoneige” designed by Joseph Armand Bombardier, as

well as the Ski-Doo mark snowmobiles that began production in the 1960s. Bombardier acquired

Lohnwerke GMbH, which manufactures Rotax engines, in 1970.

[7]

BRP now employs people in approximately 20 different countries and sells six different

lines of products, including Ski-Doo snowmobiles, in the United States, Canada, and elsewhere

in the world. BRP’s head office is located at 726 rue Saint-Joseph in Valcourt, Québec.

II.

Two-stroke engine operation

[8]

Before tackling the 738 Patent, a brief description of the operation of the two-stroke

engine could prove to be useful. Evidence to that effect was led at trial.

[9]

In his testimony, Dr. Checkel, the expert retained by AC, elaborated at length on the

general operation of two-stroke engines, so named because they complete five basic processes

(specifically intake, compression, combustion, expansion and exhaust) in two strokes (one up,

one down) of the reciprocating piston typically found inside an engine cylinder. A four-stroke

engine, by contrast, requires four reciprocating piston strokes to complete these same five basic

engine processes.

[10] In both cases, the piston is typically attached to a connecting rod and crank shaft, the

latter of which is in turn attached to an engine flywheel used to deliver output power from the

engine. This is normally paired with a cylinder head that closes off the top of the engine, forming

Page: 8

a chamber between it and the piston inside the cylinder. The objective is to ignite the mixture of

air and fuel compressed into that chamber while the piston is close to its highest point in the

cylinder (commonly called “top-dead-centre” or “TDC”). The mixture then burns as the piston

passes through the TDC position and begins to move downwards, increasing the pressure and

imparting more energy into the downward-moving piston than was required for the upward-

moving piston to compress that mixture before combustion. The net energy gain is then delivered

to the vehicle through the flywheel.

[11] The ability of two-stroke engines to provide energy output in this manner on each engine

cycle allows for the engine to be lighter and more compact than four-stroke engines for a given

power level. They have thus proven popular for small vehicles like motorcycles, all-terrain

vehicles and snowmobiles. However, two-stroke engines must also accomplish the five processes

listed above in only two piston strokes, rather than the four afforded to four-stroke engines.

[12] On small vehicles like snowmobiles, the engines typically accomplish this task through

the combination of cylinder ports rather than valves for the intake and exhaust processes, pre-

compression in the crank shaft case, and an exhaust expansion chamber. These extra features

allow the engine to accomplish both the intake and compression processes as the piston moves

up towards the cylinder head on the first stroke. After the combustion process occurs as the

piston passes the TDC position, the engine accomplishes the remaining expansion and exhaust

processes as the piston moves down towards its lowest point in the cylinder (bottom dead centre

or BDC) on the second stroke.

Page: 9

[13] While the piston is at the BDC position, the intake ports in the upper part of the cylinder

are exposed, and the mixture of air and fuel from the crank shaft case is forced through the ports

in the cylinder wall. This pushes out remaining combustion products through the exhaust ports

and into an expansion chamber that forms part of the engine's exhaust system. That chamber, if

sized (or “tuned”) correctly, creates an exhaust pressure wave at the right instant to prevent the

new mixture of air and fuel from being forced out of the chamber alongside these remnants

before the exhaust ports close as the piston moves back up the cylinder. Proper tuning varies

with current conditions, including engine speed and the temperature inside the chamber itself.

When done correctly, however, this process provides an important power boost to the engine.

[14] Traditionally, engines have used carburetors to manage the mixture of air and fuel at the

engine intake. As explained by Dr. Bower, the mechanical engineer expert retained by BRP, a

carburetor is a mechanical fuel admission device that does not rely on a controller or electronic

input. These devices have been progressively replaced with direct fuel injection technology,

which injects fuel directly into the chamber above the piston at the start of compression rather

than drawing it into the cylinder along with the air.

[15] Dr. Checkel explained that the amount of power a two-stroke engine produces is typically

controlled using a valve (the throttle), which is used to restrict the air flowing into the engine

during intake. Knowing how hard the engine is working compared with its maximum capability

(engine load) is useful for engine control purposes.

Page: 10

[16] The precise timing of the ignition in each engine cycle would be instrumental for engine

power, efficiency, durability and controlling exhaust emissions in both two-stroke and four-

stroke engines. If combustion occurs too late in the cycle, the engine produces lower output

power, more waste heat, and is generally less efficient. If it occurs too early in the cycle, the

engine is doing more work to complete the compression process, similarly reducing engine

power output and efficiency, and increasing undesirable exhaust emissions.

III.

A.

The 738 Patent

An overview / Disclosure

[17] Before considering more closely the 738 Patent, some basic information about the Patent

should be stated:



The inventor is Greg L. Spaulding, an employee of AC, and he testified at trial.

The Patent was open to public inspection on May 25, 2001.

The Patent was issued on February 18, 2003, having been filed on October 10,

2000.



The Patent signals as priorities December 1, 1999 for U.S. Patent 09/452,657 and

May 10, 2000 for U.S. Patent 09/568,449.

[18] Originally, AC was asserting a large number of the 47 claims found in the Patent-in-suit.

However, by the time the matter came for trial, the number of claims asserted had been reduced

to 5.

Page: 11

[19] The title given to the Patent is not particularly illuminating: Two-cycle Engine with

exhaust temperature-controlled Ignition Timing. The abstract of the Patent states:

A two-cycle internal combustion engine has an ignition timing that

varies with engine speed. A plurality of ignition patterns (the

relationship between ignition timing and engine speed) are used.

The engine exhaust gas temperature is sensed and is used to

determine the particular engine pattern used at a particular time.

[20] Evidently, this invention is concerned with engines and, more specifically, the two-cycle,

or two-stroke, internal combustion engine. In the two-stroke engine, it is possible to vary the

point at which the fuel-air mixture is ignited within the cylinder in which the piston is operating,

such that the optimization of the engine operation will be provided. The invention under

consideration would allow for the selection of different “ignition patterns” based on the exhaust

gas temperature. There are two ways of using the exhaust gas temperature according to the

Patent. Three of the five asserted claims are dealing with the selection of ignition patterns based

on the exhaust gas temperature. They will be referred to collectively as the “selection claims”.

There are also two claims that refer to the selection of the ignition pattern from a plurality of

basic ignition patterns, the basic ignition pattern selected being modified based on the sensed

exhaust gas temperature. They will be known as the “modifications claims”. The background of

the invention provides some information and it reads:

Background of the Invention

The present invention is directed to a two-cycle internal

combustion engine and the operation of such an engine. Such

engines are used, for example, to drive various vehicles such as

snowmobiles, motorcycles, personal watercraft and others.

The operation of such engines is based on the ignition of a

compressed fuel-air mixture within a cylinder, with the resulting

expansion of the ignited mixture driving a reciprocating piston

Page: 12

located in the cylinder. The reciprocating movement of the piston

then is used to drive the vehicle powered by the engine.

It is desirable to vary the point during the reciprocation cycle

of the piston at which the fuel-air mixture is ignited, i.e. a point

between “bottom dead center” and ''top dead center”, to provide

optimum operation of the engine. Thus, as one example the

optimum point of ignition during acceleration can differ from that

for a normal running operation. Because the piston usually is

driven by a rotating crank shaft, the ignition point often is

expressed in terms of degrees of advancement with respect to top

dead center, in other words the position with respect to degrees of

rotation of the rotating crank shaft ahead of the top dead center

position.

Typically, different engine operating speeds, which usually are

expressed in revolutions per minute, will be associated with

different engine conditions. For example, higher engine speeds

often are associated with acceleration. Thus, it has been considered

that the point of ignition during the reciprocation cycle of the

piston should be varied, depending on the engine operating speed

at the particular time, and engine ignition control systems can be

programmed to vary the ignition point depending on the engine

speed.

Other factors can affect the optimum ignition timing. For

example, an engine operating shortly after start-up may require a

different relationship between ignition timing and engine speed

(hereinafter “ignition pattern”) than an engine that has been

operating from some time. Consideration has been given in the

past to a system that allows the user to switch between two

different ignition patterns. This has not been completely

satisfactory in optimizing engine performance.

[21] Under the title “Summary of the Invention” in the disclosure part of the specification, one

finds the replication of the claims. The only paragraph worth reproducing is the following, at

page 2 of the 738 Patent:

Summary of the Invention

The present invention seeks to provide a two-cycle engine that

enjoys improved performance by selecting from a plurality of

relationships between ignition timing and engine speed (ignition

Page: 13

patterns) based on exhaust gas temperature. In one aspect of the

present invention, individual ignition patterns cover ranges of

exhaust gas temperature of about 50C. The sensitivity of the

control system increases as the temperature range decreases. In

another aspect of the present invention the exhaust gas temperature

is determined by use of a sensor that is in contact with the exhaust

gas, for example in an exhaust pipe. In a further aspect of the

invention, a capacitor discharge ignition system is used to control

the ignition timing of a spark plug. Yet another aspect of the

invention provides for a default ignition pattern when there is a

malfunction of the temperature sensor.

On its face, the invention is centered on various ignition patterns that will be selected based on

the exhaust gas temperature, or will be modified based on exhaust gas temperature, that will have

been detected by an appropriate sensor. The ignition patterns are merely the relationships

between ignition timing and the engine speed, expressed in revolutions per minute (RPMs). For

different engine speeds there could be different ignition timings. The piston, in a two-stroke

engine, will move towards the top of the cylinder and, at some point, the air-fuel mixture will be

ignited, the explosion thus created generating energy that will send the piston back toward the

bottom of the cylinder. Through the operation of a rotating crankshaft that is activated by the

piston going to the bottom of the cylinder (bottom dead center), the vehicle moves. The ignition

patterns are selected according to the Patent with a view to optimize the operation of the engine

in different conditions. That point is described in terms of the degrees of rotation of the

crankshaft ahead, or possibly after, the piston has reached the top of the cylinder (top dead

center).

[22] Before reaching the claims, the disclosure presents in five tables (A to E) data that are

each representing an ignition pattern. For a given engine speed (RPMs) there is an angle which is

the number of degrees before top dead center. The angle may vary with different RPMs. In the

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ignition patterns depicted in the five tables, there is an angle that corresponds to different RPMs,

from 1000 to 8800 RPMs. Each of the tables presents an ignition pattern that is a function of a

range of different exhaust gas temperature. In this particular case, the temperatures are presented

in ranges, Table A covering a range of 0 to 250 C, and the other tables operating in increments of

50 C (250 to 300, 300 to 350, 350 to 400) until one reaches 400 and higher. As long as the

temperature of the exhaust gas remains within a range, it will be that ignition pattern that will

control. Thus, as the RPMs change, a different ignition point, representing a different angle, will

be chosen in a particular table.

[23] I have reproduced Table E from the 738 Patent. This is an example of an ignition pattern.

The table applies once the temperature of the exhaust gas has reached at least 400 degrees. Other

ignition patterns are said to apply for different temperature ranges:

E: Exhaust Temperature 400C or higher

RPM

Angle

8800

8600

8400

8200

8000

7750

7250

7000

6500

6000

5000

4000

3000

2000

1000

0

11.0

11.5

13.0

15.0

19.0

20.0

22.0

24.0

20

10

8

Page: 15

An ignition point will correspond to the angle, the number of degrees before top dead center at a

particular RPM. Hence, at 8000 RPMs, the angle will be 13º, which means that the ignition

source will ignite the mixture air-fuel at 13 degrees before TDC. The angle differs for different

RPMs for temperature above 400C, as the table shows. Similarly, the angle may be different for

different exhaust gas temperature ranges. In table A, for temperature lower than 250C, the angle

before TDC is 10 at 8000 RPMs. Once the exhaust gas temperature leaves a particular range, it is

a new ignition pattern that kicks in.

[24] The specification refers to figures found after the claims. Figure 1, reproduced here, is a

rather rudimentary drawing of a two-cycle engine, where 10 is the engine itself, 12 the cylinder,

14 the piston, 16 the crankshaft, 18 the ignition source (like a spark plug), 20 the controller for

the ignition of the ignition source, 22 the coil through which a spark plug could be activated, 24

the exhaust gas temperature sensor and 26 is the exhaust pipe (at p 3 of the disclosure, it referred

to “exhaust pipe 28”; that is manifestly an error).

Page: 16

[25] Figures 2 and 3 illustrate examples of the control of the ignition timing. Figures 4 to 8 are

graphs illustrating different ignition patterns. The graphs do not appear to correspond precisely to

tables A to E found at pages 7 to 9 of the specification. Nevertheless, each is presented as an

ignition pattern covering a particular temperature range. Neither the tables nor the figures

provide information concerning what these patterns are supposed to achieve in order to optimize

the operation of an engine. There is no information either about the diagnosis that comes from

sensing the temperature.

[26] As a matter of first impression, the ignition pattern is at the heart of the invention. Tables

A to E present numbers that correspond to ignition points for various RPMs once the exhaust gas

temperature has reached a particular range. When considering figures 4 to 8, they are no more

than the graphical representation of the ignition patterns. The ignition point is found at the

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intersections of the speed of the engine and the number of degrees before top dead center for a

particular exhaust gas temperature range. It is the collection of those points that is represented

graphically. An ignition pattern is never one point. The pattern is simply the relationship between

the engine speeds and the degrees of advance before top dead center, the ignition timings, for

different temperature ranges. Figures 4 to 8 and tables 1 to 5 present in different formats the

same information: an ignition pattern is composed of various ignition points; there is no pattern

if there is one ignition point according to the tables and figures 4 to 8. That fundamental concept

is not altered if is added how open the throttle is in a given case (two of the asserted claims are

said to be “three dimensional” in that the ignition pattern is the relationship of degrees in

advance of top dead center, engine speed and throttle opening).

B.

The claims at issue

[27] From the 47 claims found in the 738 Patent, AC is now asserting five claims: claims 11

and 16, the “modification claims”, as well as claims 33, 40 and 47, the selection claims. Claims

11 and 16 are related to each other in that claim 11 is the engine claim to claim 16’s method

claim of the same engine. The same is true of claims 40 and 47. They are in fact the mirror image

of one another and conclusions reached by the Court regarding the engine would apply altogether

to the method of operating. While claims 40 and 47, which are written in dependent form from

claims 34 and 41, are specific to snowmobiles, claims 11 and 16 do not have that specificity.

They are not limited to snowmobiles. Finally, claim 33 is the dependent claim of “method claim”

claim 28, wherein the engine is a snowmobile engine. Although claims 40 and 47 are three

dimensional, i.e. the ignition point varies with the speed of the engine and the throttle position, as

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opposed to the ignition point varying only with the engine speed for the other three claims, that

proved to be largely immaterial. The claims are reproduced in Annex “A”. The asserted claims,

together with their independent claims, are highlighted.

[28] It is not disputed that all the engine claims are with respect to a two-cycle engine

comprising:



a cylinder

a piston

an ignition source

a controller

a sensor.

Similarly, the method claims all include a method of operating a two-cycle engine comprising:



Moving a piston in a cylinder

Activating an ignition source in the cylinder during the compression movement

Expelling exhaust gas from combustion

Sensing a temperature of the exhaust gas

BRP does not contest that its engines on their accused snowmobiles comprise these elements.

Indeed, BRP does not contest that its engines have all of the elements presented at Figure 1 of

the 738 Patent (reproduced at para 24 of these reasons). That is not where the debate is situated.

[29] There are evidently differences between the claims and there are issues with respect to

the construction of those claims. These will be reviewed later in these reasons. For now, an

overview will suffice.

[30] Claims 11 and 16 will be examined together. According to them a plurality of “basic

ignition patterns” must exist; out of that plurality of basic ignition patterns one will be selected

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and that basic ignition pattern will be modified based on exhaust gas temperature. That is the

reason why they have been referred to as “modification claims”. That modified basic ignition

pattern becomes the ignition pattern. It is according to that ignition pattern that the activation of

the ignition source by the controller will occur. Claims 11 and 16 are only concerned with the

relationship of ignition timing and engine speed.

[31] The other three asserted claims are “selection claims” in that it is the selection of the

ignition pattern out of a plurality of ignition patterns that is effected based on the exhaust gas

temperature. Claim 33, which is dependent on claim 28, a method claim, is a selection claim.

However, contrary to selection claims 40(34) and 47(41), the other two selection claims, claim

33(28) is two-dimensional, as are claims 11 and 16, as the throttle is not featured.

[32] As pointed out earlier, claims 40(34), 47(41) and 33(28) are all concerned with engines

that are snowmobile engines. That is not the case for the modification claims 11 and 16.

IV.

Foreign litigation

[33] It has transpired, during the course of the trial, that there has been, and there continues to

be, litigation in the United States concerning patents that relate to the Patent-in-suit in this case

between the parties. This came to the attention of the Court through the cross-examination of

witnesses involved in some manner in the other pieces of litigation.

Page: 20

[34] Thus, it appears that there is litigation in the Federal Court of Minnesota; however, the

matter will not be heard for some time as it has not been set for trial. As for the litigation before

the United States International Trade Commission, it was terminated in May 2015, following the

withdrawal of the complaint filed by Arctic Cat Inc. in December 2014. As I understand it,

Arctic Cat Inc. alleged that snowmobiles were imported in the U.S. that infringed certain claims

of their U.S. patents. The allegation is no more.

[35] There would have also been some litigation between Polaris, another snowmobile

manufacturer, and AC more than ten years ago.

[36] Having said that, I consider that litigation taking place elsewhere has no bearing on the

case that must be decided in Canada on the basis of Canadian Law and the evidence put forth by

the parties. At any rate, there is no foreign decision that has been rendered.

V.

The witnesses

[37] The parties relied on a number of witnesses to advance their position at trial. First and

foremost, they each relied on one expert to discuss and put forth their theory of the case

concerning the alleged infringement of the Patent and, by counterclaim, the alleged invalidity of

the claims. The parties also produced experts with respect to the damages claimed in case a valid

patent had been infringed. Each side had three other witnesses. I will begin with the non-experts

and the evidence of the experts will be referred to, as needed, when their expertise is required.

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A.

Brad Darling

[38] Mr. Darling was AC’s corporate representative. Mr. Darling has been working for Arctic

Cat since 2000 and is currently the vice-president, general manager of the snowmobile division

of Arctic Cat Inc., a position he has held since January 2011.

[39] Mr. Darling explained that Arctic Cat first became aware, and first believed, that BRP

was infringing the 738 Patent in early 2012, following a review of all of Arctic Cat’s patents by

its new in-house counsel. This happened shortly after BRP launched its own patent lawsuit

against Arctic Cat, but Mr. Darling was uncertain if the review of Arctic Cat’s patents was done

in order to retaliate, as suggested by BRP. Whether the Court’s action was in retaliation or not is

of no moment as far as this Court is concerned. The only relevant consideration is to establish

that a valid patent has been infringed or not.

[40] It appears that AC approached BRP after it formed the opinion that its 738 Patent was

infringed with a view to conclude a cross-licence arrangement. Obviously, the discussion did not

produce an agreement.

[41] Mr. Darling explained the dealer distribution aspect of his position, which involved

keeping track of competitive dealers and Arctic Cat dealers across Canada. This analysis is

conducted based on model year, calendar year, and then snowmobile season. The takeaway from

these surveys is that Arctic Cat is competitive in Canada within the dealer base of the

competition in the industry (Polaris, Ski-Doo, and Yamaha). Mr. Darling testified that for the

Page: 22

2016 model year, Arctic Cat will produce 26,000 snowmobiles, down from just over 41,000 in

2005, before the recession. This corresponds to an industry-wide decline.

[42] AC relies on racing snowmobiles for marketing its product as well as to assist in research

and development. The 738 Patent in particular started being used on racing models in the 2000

model year, and was used in consumer models starting with the 2001 model year. By 2008, the

738 Patent was being used on all of Arctic Cat’s 600 and 800 two-stroke models. That

“technology” was very well received in the industry, as it gave a remarkable advantage in terms

of acceleration when “starting out of the gate”.

[43] On cross-examination, Mr. Darling explained that he was not aware of the technology

used for the first time in conjunction with a “hot button” on 1999 model year snowmobiles. He

also wasn’t aware of previous technology to manually adjust “tuning in the pipe”. He confirmed

that Suzuki had been Arctic Cat’s sole supplier of engines until 2008.

[44] Is noteworthy that Mr. Darling did not testify concerning how AC is practicing its

invention. No one did.

B.

Troy Halvorson

[45] Mr. Halvorson has worked for Arctic Cat since 1997. In 2004, he became high

performance product team manager, where he was responsible for the development of the Firecat

models, among others. Mr. Halvorson is currently the snowmobile product manager at Arctic

Page: 23

Cat, a position he has held since April 2015. In that capacity, he helps to guide the product plan,

which governs the development of new products over a five-year cycle generally.

[46] As was to become obvious later, the testimony of Mr. Halvorson, based largely on

written material produced by AC, was offered for the purpose of comparing two snowmobiles

manufactured by AC with a view to distinguish between model years 2005 and 2006 to lay the

groundwork for the expert on damages.

[47] Thus, Mr. Halvorson explained that the F6 Firecat EFI EXT, the F6 Firecat EFI, and the

F6 Firecat EFI Sno Pro were the available models listed on the specification sheet in model year

2005. “EFI” designates electronic fuel injection, while “EXT” designates a longer track than the

F6 Firecat EFI (the base model) or the F6 Firecat EFI Sno Pro. An additional model, the F6

Firecat EFIR, was also available – the “R” designates that it had a reverse. All models are said to

have the same engine specifications. He explained that the engines used in the 2006 models are

the same as in the 2005 ones. However, the 2006 brochure lists an exhaust pipe temperature

sensor (EPTS), introduced in the F6 for that model year. Another listed difference exists with

respect to the shocks, with the 2005 using Arctic Cat gas internal floating piston shocks and the

2006 using Fox gas internal floating piston shocks. As for the 2005 F6 Firecat EFIR, it would

have had the same specifications as the F6 Firecat EFIR from 2006 had it been listed in the

brochure for model year 2005. Mr. Halvorson then provided two final differences between the

2005 and 2006 model years: a change in colour scheme, and Arctic Cat no longer offering the

EXT model in 2006. Next, Mr. Halvorson explained that Arctic Cat did not list the electric start

as available optional equipment in 2005, but did in 2006. However, the offering in 2006 did not

Page: 24

affect the price Arctic Cat charged its dealers for snowmobiles, as optional equipment was sold

to customers by the dealers separately from the snowmobiles themselves.

[48] The witness did not offer any information about how the 2006 model year F6

snowmobile practiced the invention. In fact, surprisingly, Mr. Halvorson only referred to the

addition of an exhaust pipe temperature sensor on the later engine.

[49] On cross-examination, Mr. Halvorson explained that knowledge of Arctic Cat’s models

of those years was quite limited, as is his knowledge of marketing material he did not develop.

He confirmed that Arctic Cat purchased its engines for the Firecat models during those years

from Suzuki. As for the specification sheets on the brochures, they were accurate to a point, as

specifications could be changed by the time production started and errors could slip in.

[50] Mr. Halvorson explained that the reference to an exhaust pipe temperature sensor, which

is to be found on the specification sheet but not in the brochure, could have been connected by a

knowledgeable reader to “breakthrough performance regardless of temperature”. It was not

disputed by the witness that AC was promoting its suspension in 2006.

[51] It was established before the Court that the witness is a graduate of CalPoly (California

Polytechnic State University) in what he described as industrial technology. Although he is not

an engineer, and does not profess to be one, Mr. Halvorson has been employed by AC since

1997, yet he was incapable to give any explanation about the engine that is supposed to make a

difference.

Page: 25

[52] The Court has no doubt whatsoever about the integrity of this witness: he was honest and

forthcoming. He readily conceded that his knowledge about the engine was limited. Here are the

important portions of the cross-examination which are found at pages 2441 to 2445:

A.

I don’t hold a mechanical engineering degree.

Q.

Right. And you don’t hold an electrical engineering degree

either?

A.

No, I don’t.

Q.

Okay. You mentioned the F6 Firecat EFI. EFI stands for

electronic fuel injection. Correct?

A.

Correct.

Q.

Yeah. Do you know how electronic fuel injection works,

generally speaking?

A.

Q.

A.

Generally speaking, yes, I do.

So, what is the extent of your knowledge?

In an older conventional system with carburetors, the fuel

delivery system is based off of – is how the fuel flows into the

carburetor into the engine. In an electronic fuel injection system,

it’s injected into the engine through electrical pulses that’s

supplied by – dictated by the computer, the ECU of a snowmobile.

Q.

Okay. And to control the electronic fuel injection of an

ECU, do you know what are the inputs and outputs of that ECU?

A.

Q.

A.

Q.

There are a lot of inputs and outputs, yes.

Would you be able to name them?

Probably not all of them.

And would you know how the control of that electronic

fuel injection works within the controller based on the inputs of the

sensors and the outputs?

A.

Q.

A.

I am not knowledgeable about how exactly it works.

And that’s not your responsibility in any way?

No, it is not.

Page: 26

…

So you mentioned you are not familiar with how the ECU

works. Correct? You don’t know the inner functionings of the

ECU, the logic, the software?

A.

Right. I – I don’t – I know how a – I mean. I have an idea

how a computer works. If I had to tell somebody how to build a

computer, I would struggle.

Q.

Yes. And you wouldn’t be able to tell or help someone

program the ECU of the ECUs used by Arctic Cat?

A.

Q.

A.

Q.

A.

Q.

A.

No.

Back in 2005 or 2006?

I would not be able to tell them.

So that EPTS, you don’t know what it does?

Yes, I know what the EPTS does.

It’s connected to the ECU?

I know the electronic or the exhaust pipe temperature

sensor measures the temperature of the exhaust.

Q.

Right. And that signals input into the ECU?

A.

It is a sensor that the ECU relies on for that information,

yes.

Q.

But beyond that, you don’t know what the ECU does with

that and how it accomplishes it?

A.

Q.

Well, I – I don’t know how it does it, no.

Thank you.

Back in 2006, the model year 2006, equipped with the

EPTS, again, that was a Suzuki engine. Correct?

A.

Correct.

Q.

Equipped with Kokusan ECUs? Does that ring any bells for

you?

A.

Yes.

Page: 27

Q.

So that’s K-O-K-U-S-A-N. And those were delivered with

the engines. Correct?

A.

Q.

You would have to define “delivered with the engine”.

So they were already installed on the engine or ready to be

installed on the engine. That’s how the engine came?

A.

No.

Q.

No, they were not. Were they shipped together with the

engine for a given engine?

A.

I have – they were part of a packet that would have been

with the engine, but not directly with the engine.

Q.

Right. So Engine A comes with Kokusan ECU A. Engine B

comes with Kokusan ECU B. Would that be a correct description

of how it happened?

A.

I wouldn’t – I wouldn’t be able to answer that question.

Q.

Okay. And you know nothing about the control logic of

those ECUs, whether that was developed internally at Arctic Cat or

elsewhere?

A.

I don’t.

[53] As can been seen, there was no evidence coming from Messrs. Darling and Halvorson, in

spite of their long standing association with AC and, in the case of Mr. Halvorson, his degree in

industrial technology, about the very engine which it is claimed produced contribution margins

that were used by an expert in calculating damages. That left to Greg Spaulding, the named

inventor, to provide the evidence on the invention.

Page: 28

C.

Greg Spaulding

[54] Mr. Spaulding is currently the group leader for two-stroke engine design and

development in Arctic Cat’s engineering department. He has been with Arctic Cat since 1994.

His group designs the components necessary to have an assembled engine, working with Suzuki

Motor Corporation as the motorist to produce a prototype. His group then completes engine

development, which includes designing and developing the exhaust pipe. Mr. Spaulding does not

have an engineering degree, but his experience and expertise in the calibration of engines is not

to be denied.

[55] The witness provided to the Court his view of the history of the invention. Mr. Spaulding

explained that he had originally come up with the idea of optimizing ignition timing around

1996. It started with his idea of keeping engine RPMs at the starting line below the level where

the clutch engages while opening up the throttle to get out of the starting line faster when the

race starts. Mr. Spaulding contacted Suzuki, Arctic Cat’s engine supplier, in order to implement

this idea. However, the engine control units (ECUs) he received from Suzuki limited RPMs by

producing fewer sparks. This also lowered the heat output to the exhaust pipe, thus reducing

rather than improving starting line performance.

[56] Mr. Spaulding explained that he contacted Suzuki to propose limiting the RPMs by

retarding engine ignition instead, thus transferring less energy to the piston and more to the

exhaust pipe to increase temperature. As a result, he received additional systems that retarded

ignition timing, but also continued to use the counterproductive spark removal method. Mr.

Page: 29

Spaulding then contacted Suzuki to specifically request the capacity to have ignition take place

after top-dead-centre. This functionality was incorporated into the 1998 model year 440 ZR

racer. However, Mr. Spaulding was not yet satisfied with the design, and so he did not

implement that which would actually allow the driver to use this capability.

[57] Mr. Spaulding’s next step in the development saw him move away from the RPM limiter

idea towards a “two-map system” selected by a hot/cold switch, with the settings providing an

optimized power curve for cold and hot exhaust pipe temperatures respectively. Arctic Cat

implemented this new approach in the 1999 model year 440 ZR racer. Nonetheless, the cold map

name continued to be called “Rev Limit Ignition Timing” in Suzuki’s finalized engine

specifications delivered to AC, the result of Mr. Spaulding’s desire to avoid “confusing” Suzuki.

[58] Mr. Spaulding then explained that the following developmental step was to make the

changes between maps automatic. He requested that Suzuki review the ignition timing curves

that Arctic Cat was using for its hot/cold switch settings. Mr. Spaulding described the cold curve

as allowing for better acceleration through faster pipe heating, and the hot switch as providing

better performance and preventing “heat sagging” – the loss of performance in two-stroke

engines that occurs in higher temperatures. Mr. Spaulding asked Suzuki if these curves could be

selected automatically without a throttle position sensor, but Suzuki did not come up with any

suggestions.

[59] The invention is described as “using exhaust gas temperature to optimize settings,

ignition timing on a two-stroke engine”. The term “optimize” refers, in a circular way, to “using

Page: 30

exhaust gas temperature to select the optimum ignition timing based on that internal

temperature” (Transcript, p 2616, lines 5-14). Mr. Spaulding did not testify as to how the exhaust

gas temperature was to be used, and to what effect. From his examination in chief, the Court is

left with someone who was asking questions of Suzuki, the motorist, which would come back

with possible solutions. Actually, the documentary evidence offered by AC consists of questions,

usually sent by fax, to Suzuki. I have not been able to find what contribution to solutions was

offered by AC, and Mr. Spaulding, towards answering the questions asked.

[60] Mr. Spaulding claimed that he came up with the idea of using exhaust gas temperature to

select between the patterns, a method Arctic Cat implemented in the 2000 model year 440 ZR.

Developmental problems included the fact that the temperature sensor they had selected would

not function below and above certain temperatures. According to the testimony, Arctic Cat

worked with Suzuki to develop a software logic that would get around the sensor tolerance

range. However, no details of the cooperation were supplied.

[61] Mr. Spaulding explained that he was never specifically concerned with the logic or the

sensors, only the intended results. His goal was to have the sensor “measure temperature to select

timing patterns that were optimum for that particular temperature” (Transcript, p 2677, lines

9-18). He confirmed that in the case of the 2000 model, “optimize” referred to power (Transcript,

p 2678, lines 12-14). The use of the pipe sensor to select between different ignition timing maps

in the 2000 model year ZR 440 produced very good racing results with respect to starting line

acceleration.

Page: 31

[62] The first consumer model to use the “technology” of selecting ignition patterns based on

measured exhaust gas temperature for better engine control was the 2001 model year 500 ZR.

The pipe sensor “technology” was not incorporated into models using 600 CC and 700 CC

engines, including the F6 Firecat, until the 2006 model year because of costing issues with the

pipe sensor. It remains very much unclear what the witness means by “technology”. If

technology is taken to mean “the study or use of the mechanical and applied sciences, the

application of this to practical tests industry” (The Canadian Oxford Dictionary, Oxford

University Press, 2001), the Court is hard pressed to find in the testimony anything resembling

technology. We are left in the dark concerning how the temperature of the exhaust gas is used to

adjust the ignition timing through different timing patterns or maps. Similarly, we are left in the

dark about what benefit was to be obtained, other than speaking in terms of “optimization”.

[63] Mr. Spaulding then explained that it was Mr. Ole Tweet, a vice-president at Arctic Cat,

who suggested that the use of a sensor to select ignition patterns to be patented. Mr. Spaulding

did not write the text of the Patent. He produced the sketch that became Figure 1 of the 738

patent by hand. As for Figures 2 and 3, which depict the software logic used in the 2000 model

year 440 ZR, they came from Suzuki, as well as Figures 4 to 8.

[64] Finally, Mr. Spaulding explained that Kokusan, another Japanese company, the

manufacturer of the Engine Control Unit [ECUs] used in Arctic Cat engines, actually wrote the

control software. Kokusan then supplied the electronic components to Suzuki who then supplied

the engines, with electrical systems, to Arctic Cat. Mr. Spaulding was quite clear about what he

considers to be his invention. The development of the invention was around the use of different

Page: 32

ignition patterns. He ended up with a system that was described as “the exhaust gas temperature

measurement by sensor to select ignition timing patterns that are optimised for engine operation

of those internal pipe temperatures” (Transcript, p 2671). Throughout the development of the

invention, the concept of changing ignition patterns remained central (Transcript, pp 2649, 2646,

and 2670, among others).

[65] On cross-examination, Mr. Spaulding confirmed that the design of an engine meant

designing its structure and parts. This was mainly done by Suzuki, although Arctic Cat provided

its input on a regular basis during the design phase. Mr. Spaulding did not communicate with

Suzuki for the development of the exhaust pipe technology on the 2000 model year ZR 440

engine, but rather Arctic Cat received a system that would measure exhaust gas temperature to

select different timing patterns. The development and optimizing of those patterns was done by

Mr. Spaulding himself at Arctic Cat.

[66] Mr. Spaulding also confirmed that the control logic, including the ability to select from

maps, was already programmed into the ECU when Mr. Spaulding received it, and Mr.

Spaulding played no part in programming it. The ignition timing values he had provided to

Suzuki to install in the ECU were all common generic values. Mr. Spaulding then optimized the

different maps while working on the finalized version of the tuned pipe, which he confirmed

accounted for up to 70% of the engine power from a snowmobile engine like the ZR 440.

[67] Although Arctic Cat did not offer evidence about how its own engine may be practicing

the invention, Mr. Spaulding was cross-examined on the use that was made of his invention,

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starting in 2006. However, it became clear that the inventor did not have much to contribute. He

was clearer about the history of the invention.

[68] The data found in the five tables in the 738 Patent, which represent five ignition patterns,

were taken from the input values and not the actual values of the finalized engine specification.

[69] The matter of what constitutes the modification of the ignition patterns was also the

subject of the cross-examination. The inventor was presented with the only paragraph in the

disclosure which addresses the issue of modification of an ignition pattern (that corresponds with

claims 11 and 16). There is in my view no ambiguity as to what was intended to modify an

ignition pattern:

A.

I did not have any other way than a timing dial, D-

58, to select?

Q.

A.

Q.

A.

A pattern and then –

When developing the 2000 model 440 ZR--

Yes

-- with my pipe sensor technology and a D-58

timing dial, the exhaust temperature selected the pattern. D-58

timing dial would simply take the patterns and shift them up or

down.

Q.

Yes

A.

The measurement of the exhaust to select a pattern

would still exist and function. The purpose of this was, and still is,

because we still use this same dial, it, as an example, would be –

because of tolerances and ignition components, manufacturing

tolerances, is a specific timing value is the timing setting, meaning

where do you check timing to make sure that your system is timed

correctly, there can be a plus or minus 1-degree tolerance in a

timing value by manufacturing tolerance.

Page: 34

So the operator with a dial like this would be able to check

his timing manually, assuming he understood how to do that. He

found that, because of the tolerance it was 1-degree retarded, 1

degree advanced, you could turn this dial to make the timing

setting correct per the specification. That’s one purpose.

(Transcript, p 2824)

[My emphasis]

Clearly the pattern is modified in that it is changed, in the example given by the witness, by

“shifting them up or down”.

[70] It is striking that the inventor did not offer what his contribution to the invention was

other than having general ideas and asking the motorist for solutions. Many times, the witness

stated that it was a joint effort in the development of the engine, yet this assertion was not

supported by the details of Mr. Spaulding’s contribution. He simply pivots in announcing that he

moved from “rev limiter” (limiting the RPMs) to the selection of maps. The evidence is at best

murky (Transcript, pp 2653 to 2658). The witness even testifies that his thinking had evolved,

but he did not advise the motorist for fear of Suzuki becoming confused. How was Suzuki to

implement the two-pattern innovation remained unsaid: we are only told about faxes being sent

to Suzuki, by AC in December 1997, asking for views on how to turn the manual 2-pattern

evolution to something “done automatically somehow, without a T.P.S. Maybe RPM and time

activated. What are your ideas?” (Exhibit P-57).

[71] It remains that the witness testified that, as the notion of changing ignition pattern

automatically was being explored, he had the idea (Transcript, p 2669). But, what idea precisely?

The record remained very thin about the actual contribution. There is no doubt that Mr.

Page: 35

Spaulding is a master calibrator with many years of experience. His contribution to an invention,

his “system” which he described at page 2671 of the transcript as “the exhaust gas temperature

measurement by sensor to select ignition timing patterns that are optimum for engine operation at

those internal pipe temperature” is much more in doubt in view of the quality of the evidence

proffered at trial.

[72] BRP also presented three witnesses, other than experts retained for the purpose of

discussing patent infringement and validity, and damages incurred.

D.

Bernard Guy

[73] Mr. Guy was trained as a mechanical engineer at the Université de Sherbrooke. He also

holds a master’s degree in business administration. Employed by BRP since 1987, he became

vice-president responsible for sales and dealerships before being promoted to vice-president

responsible for sales, marketing and customer service for North America.

[74] The witness explained that BRP is not a division of Bombardier since 2003. It is a stand-

alone corporate entity. The market for snowmobiles was around 150,000 units in 2005, but has

dropped to 90 to 100,000 units per year more recently. The Canadian share would be around 40

to 50,000 units. There are four major players: Yamaha, Polaris, AC and BRP. BRP holds 49% of

the market in Canada and 43% in North America.

Page: 36

[75] He testified that the difference in price between snowmobiles does not come entirely

from the high cost of engines. In some cases, a difference of $3700 between two snowmobiles of

the same category could come in large part from the difference in shock absorbers (as much as

$1000). At other times, the differences in price are much reduced.

[76] On cross-examination, focus was put on a document titled ‘Direct Injection Study’, dated

June 2006. Mr. Guy confirmed that BRP was looking at consumers’ perceptions of direct

injection technology, and, as a subset, any association with specific direct injection technology

such as the Evinrude E-TEC. Mr. Guy agreed that the perceptions of disadvantage, even if only

slight, in terms of reliability and durability, were issues that BRP needed to address. The

strongest concerns were about price and the fact that direct injection was not proven in the

snowmobile industry.

[77] The cross-examination established that BRP was concerned with durability, quality and

reliability issues. When the initial 600 E-TEC engines were introduced into the market place,

part of BRP’s advertising campaign promoted the engine as being virtually “hassle-free”. It

appears that the 2009 roll-out was not completely successful. A market survey of June 2009

showed difficulties. Mr. Guy confirmed that this was after the 600 E-TEC rollout, and that a

survey stated the Ski-Doo had lost from 5,000 to 8,000 sales due to durability, quality and

reliability issues. Mr. Guy explained that he would need to validate the document further to be

able to provide a specific opinion on what is a statistical projection. Mr. Guy explained that these

statistics were based on statistical surveys of customers that are extrapolated for results on a

bigger scale.

Page: 37

[78] The Court is left with little doubt that durability, quality and reliability were issues BRP

was concerned about. BRP needed to avoid these types of issues on its 800 E-TEC model. BRP

studies carefully client satisfaction. In spite of the equivocation of Mr. Guy, there would not be

much doubt that reliability and durability were issues of concern for BRP.

E.

Steward Strickland

[79] Mr. Strickland obtained a bachelor’s degree in mechanical engineering from McGill

University in 2000 and started working at BRP shortly thereafter. He is an “intellectual property

engineer”, currently one of two at BRP, a job that involves liaising between inventors at BRP

and the outside agents who draft patent applications.

[80] The witness’ job involves ensuring that BRP products do not infringe patents held by

third parties. There is no doubt that BRP wanted to adjust the timing of its engines in connection

with the temperature of the exhaust gas. Thus, Mr. Strickland was put to contribution. The first

engine for which BRP proposed to use the exhaust gas temperature for the purpose of adjusting

ignition timing was the 440 HO, in 2004. In conducting his patent clearance work, Mr.

Strickland searches patent offices in an effort to locate relevant patents once he has been

apprised of the issue raised by the project presented to him. Thus, using engine searches or other

methods, he came across the 738 Patent; he also located US equivalent patents.

[81] There are four BRP engines at issue in this case: the 440 HO, 600 RS, 600 E-TEC and

800 E-TEC. Mr. Strickland explained that he was involved in the patent clearance search for the

Page: 38

440 HO in 2004, when a racing department engineer approached him about using exhaust pipe

temperature sensors for the purpose of altering the ignition timing. The objective was to help

racing engines get out of the gate faster.

[82] These patents, located by Mr. Strickland, are owned by AC and the witness considered

that they were all within the same family of patents. Reviewing the file history of the US patents,

he noticed the existence of past litigation involving AC to Polaris, another snowmobile

manufacturer. Having been unable to locate a decision in the matter, the witness got in touch

with an American counsel who had been involved in the litigation.

[83] The telephone conversation with the American attorney, which would have taken place

late in 2004, led the witness to U.S. Patent 5,946,908 (908 Patent). While the witness wished to

avoid infringing patents in place, he was also interested in locating prior art that could help deal

with validity issues. According to the testimony, the American attorney stressed the 908 Patent

as practicing something different than AC’s patent: it teaches a base map from which a timing

value is extracted, and the timing value is then corrected. One reads at page 1320 of the

transcript:

A.

Well, that’s – you know, these are my recollections

and my understanding of what he was saying when I was writing it

down. And basically, what he continued on to give me was a few

more details.

He also said preprogrammed maps elected by exhaust gas

temperature was different to the preprogrammed than to calculate

on the fly. And basically what he’s mentioning there – and he was

always making reference to this -- we see at the bottom of the page

there’s some U.S. Patent numbers. One of them ends with 908. He

was making reference to that patent.

Page: 39

He was saying, this patent shows – it was in the prior art at

the time, it was publicly available. He was saying that this 908

Patent shows using a base map and correcting the base map with a

correction factor, and that was different because it was being

calculated all the time. The point – the ignition point from the base

map was calculated and then manipulated with the correction

factor, which was different than what was actually being claimed

in the patents that were at suit at the time between Polaris and

Arctic Cat.

[84] Content that the 908 Patent was different from the AC’s patents, Mr. Strickland

continued his investigation to ascertain that the 908 Patent could not be infringed:

Q.

We will pause for a moment here. So you said you

had a lot of U.S. patents. So we see the numbers here. In terms of

these patents, you were in the exercise of looking for alternative, I

would say, or clearance search for the 440 HO. Did you look at

those patents to see their status?

A.

Yes, at the time, I remember the – because once

Chuck Segelbaum told us about the 908 Patent, he said, this is

what was being practised and this is what was taught and protected

in the patent. Well, obviously before going ahead and trying to

avoid one patent by doing one thing in the next patent, well, I

wanted to make sure that I wasn’t going to infringe the second one.

So yes, I looked at the status at the time of the 908 Patent.

Q.

What was the status?

A.

It had actually been expired. The assignee, which is

Yamaha, they didn’t pay one of the maintenance fees that had been

due prior to that time, and thus the patent had expired.

(Transcript, p 1323)

[85] Mr. Strickland was therefore testifying that the AC patents were not infringed if BRP

sought to practice the 908 patent, which had expired by then.

Page: 40

[86] Following discussions within BRP, the witness testified that was chosen the option of a

base map with corrective values. As explained at p 1335 of the transcript, the corrective factor

would be added to the ignition timing point “previously gotten from the base ignition map.” That

was the suggestion advocated by Mr. Strickland (Transcript, p 1339).

[87] It is the witness’ evidence that the suggestions were also implemented in the other

accused engines, the 600 RS, the 600 HOE-TEC and the 800 HOE-TEC (Transcript, pages 1350-

1351).

[88] On cross-examination, Mr. Strickland clarified that the American attorney made specific

references to the US 908 Patent and that it was practiced by Polaris; BRP chose to base their

system “on a base map with a correction factor method, that is what was taught by the 908

Patent.” (Transcript, p 1371)

[89] The testimony about the practice of the 908 Patent was not seriously challenged at trial.

The cross-examination concentrated instead on the location of the sensor for the exhaust gas

temperature. The witness expressed his view that the 908 Patent teaches that the sensor can be

directly in touch with the exhaust gases or it may be installed flush against the exhaust system,

thus measuring the temperature indirectly.

[90] It is of course one thing to have an intellectual property engineer testify that BRP chose

to practice the U.S. 908 patent which is claimed to be different than the 738 Patent with its

Page: 41

insistence on ignition patterns being either selected or modified through the use of the exhaust

gas temperature. That was the task at hand for the next witness.

F.

Bruno Schuehmacher

[91] Mr. Schuehmacher holds a Bachelor’s degree in mechanical engineering from the École

Polytechnique de Montréal. He has been working at BRP since 1993, and as a mechanical

engineer in the engine calibration department since 1998. As such, he is in charge of calibrating

snowmobile and two-stroke engines. Since the engines themselves are assembled by the Rotax

division of BRP in Austria, his work consists of developing intake and exhaust systems, as well

as software used by the control module of the engines.

[92] Mr. Schuehmacher explained that in response to environmental standards that were

becoming increasingly strict, BRP developed a series of SDI (semi-direct injection) engines,

introduced for the 2003 models. The SDI technology limits fuel loss through the exhaust pipe of

a two-stroke engine by injecting fuel in the transfer port and not by using a carburetor. True

direct injection resolves this issue completely but the technology is much more expensive. BRP

acquired Johnson-Evinrude and its E-TEC direct injection technology around 2000-2001 and

began developing it for use in its snowmobiles. This technology was marketed for the 2008

model year and the SDI technology was discontinued in 2009. However, another technology

called “P-TEK”, marketed for the first time in 2000, continued to be manufactured in small

quantities with a carburetor managed by a control module.

Page: 42

[93] The witness explained how inputs are used in the control logic of the BRP engines. His

evidence is that the same control logic was in use for the P-TEK engines (carburetors) as well as

the 440 HO and 600 RS (direct injection). Base maps are basically ignition patterns. They are

pre-determined ignition points for different engine speeds. For a given engine speed, or range of

engine speeds, an ignition point is determined, usually at a point before the piston reaches the top

of the cylinder (top dead center). The base maps provide the initial advance ignition timing. In

the case of these engines, the four base maps, A, B, C and D, relate to the type of fuel to be used

and, with respect to D, corresponds to the “preheat” map used solely in race models. Map C was

never used.

[94] E, F, G, H, J and KxL are all corrections that are applied on the ignition timing selected

from one of the four base maps, such that the logic is portrayed as:

((A or B or C or D)+E+F+G+H+J+KxL)

where K is the correction made as a function of the exhaust gas

temperature.

As can be seen from the equation, once one of the four base maps has been selected, a correction

is to be applied on the ignition point that corresponds to the engine speed. One of the corrections

will come from the temperature of the exhaust gas. It is worth reproducing the summary of the

operation of the logic control for engines, in the words of the witness. That was never

challenged. It must be taken by the Court as the operating logic for the BRP engines. As will

appear later, the same logic will apply equally to the E-TEC engines.

R.

[TRADUCTION] First, the controller will have to select which

basic spark advanced table to use to extract the ignition timing.

Therefore, as explained, this will normally be A or B depending on

whether it is a race application or not, or whether it’s at the starting

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line warming up the tuned pipe; in that case it would be D, if I am

not mistaken, that corresponded to the preheat. So based on the

engine operating conditions, the basic table is chose. Knowing the

point of operation for engine speed and throttle position, a base

ignition timing is extracted and once this base ignition timing is

extracted various corrections are added for the barometric pressure

of the engine temperature, the engine break-in, the exhaust

emissions temperature. Once these additions are made, the final

ignition timing is determined, and that will be sent to the ignition

coil to produce the spark.

(Transcript, page 828)

[95] Mr. Schuehmacher then addressed the E-TEC engines, for which BRP used the control

module and logic developed by Johnson-Evinrude. He explained that BRP merely added

functions that did not exist in outboard but that are necessary for snowmobiles. BRP also

integrated a number of other functions that exist in the P-TEK modules, including muffler

temperature management. This work was done in collaboration with Johnson-Evinrude and, to a

certain extent, Rotax.

[96] According to Mr. Schuehmacher, the inputs to the E-TEC module are essentially the

same as those for the P-TEC module. However, there is also a “GPSTP” input that is for the

temperature of the exhaust gas in the tuned pipe. This corresponds to a second temperature

detector for exhaust gas in the tuned pipe rather than in the muffler. It is found in the 800 E-TEC,

but not in the 600 E-TEC. Mr. Schuehmacher then explained that the spark advance of the 800

E-TEC module operates by selecting one of the four basis tables based on the combination of

two distinct parameters: barometric pressure and fuel quality. Once the basic table is selected, the

module will extract a spark advance according to the engine’s rotational speed and the throttle

position. To this value, the corrections extracted from the “Dynamic ignition timing correction

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map” are added, including a correction based on the exhaust gas temperature sensor. This only

applies when the throttle is open more than 70% or 80%, depending on the model of the

snowmobile, and when the engine is at an operating speed greater than 7,800 revolutions per

minute. Therefore, it is only when these conditions are met that the correction will apply

according to the temperature detected.

[97] The Engine Control Module [ECM] of the E-TEC engines is programmed to determine

the final ignition point by applying one or more correction(s) to a base ignition timing point

extracted from one of the four base ignition timing maps. The corrections are determined based

on engine speed, atmospheric pressure and muffler temperature (see BRPE-58/8-9), using the

following formula:

Ignition timing calculation: (A or B or C or D) + E + F + G

where:

•

A, B, C or D is the ignition timing value extracted based on

rpm and throttle position from the previously selected Base

Ignition Timing Map;

•

E is the ignition timing correction value (Dynamic Ignition

Angle Correction) for sensed EGT [exhaust gas temperature] and

engine speed (rpm);

•

F is the ignition timing correction value for Altitude;

•

G is the ignition timing correction value for muffler

overheat protection.

[98] Mr. Schuehmacher explained that according to the data collected from the trials

conducted on BRP snowmobiles since 2005, situations in which there was a correction on the

basis of the exhaust gas temperatures were very rare in practice since they correspond to high

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throttle openings, greater than 70% and 80%, which requires a very high speed. The correction

for the 800 E-TEC will only be used beyond 7,800 revolutions per minute. The correction based

on the temperature of the exhaust gas therefore only applies 3% to 5% of the time. Mr.

Schuehmacher added, however, that this data may vary according to engine power and the way it

is used. In the 800 E-TEC, 3% corresponds to use on trails while 5% corresponds to use in the

mountains. The 600 E-TEC, a more reliable engine, is generally only used on trails, and the

correction also only applies less than 5% of the time it is used.

[99] On cross-examination, the witness was not challenged on the control logic that is used

with respect to the accused engines. He was asked to provide examples of how the logic would

actually operate in an attempt, presumably, to show that the logic followed by the four engines

corresponds, in the end, to the teachings of the asserted claims of the 738 Patent.

[100] The witness was however steadfast. The logic of the four engines requires that an ignition

point be extracted from the selected base map, to be corrected, including being corrected as a

function of the temperature of the exhaust gas (Transcript, pp 1108 to 1123).

[101] Finally, the cross-examination confirmed that BRP was conscious of the existence of the

patents owned by AC. Clearly, BRP wanted to avoid infringement and Mr. Schuehmacher

concluded that, in his view, there was no infringement (Transcript, pp 1143 to 1146). Far from

resiling from the view that BRP was not practicing the 738 Patent, BRP goes even further in

stating that it took care to avoid infringement. This is not a case where the infringement is

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justified ex post facto. BRP, knowing about the AC patents, sought to avoid being in violation of

the monopoly.

[102] It is uncontradicted, on the record before the Court, that BRP’s logic was to the effect that

a base map would be selected according to some criteria (eg. Fuel quality), but not on the basis

of the exhaust gas temperature.

[103] Once a map was selected, the ignition point corresponding to a particular engine speed

(revolutions per minute) would be extracted for the purpose of applying to it a correction. That

figure would then be corrected for different factors including as a function of the temperature of

the exhaust gas. That logic is fundamentally the same for the four accused engines. The question

then is, having constructed the claims asserted by AC, is there infringement?

[104] I have reviewed at significant length the testimonies offered by these witnesses. The

evidence of Mr. Spaulding is important in order to understand what the invention is and whether

it is his invention. Messrs. Strickland and Schuehmacher sought to establish how BRP was to

avoid infringing the 738 Patent. This case boils down to determining first what logic is followed

by the four accused engines. Second, the Court will have to determine what the invention

consists of, through a construction of the claims, before comparing the invention to the logic

followed by BRP with respect to its engines.

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G.

The Experts

[105] There have been four experts presented by the parties in this case. AC and BRP offered

an expert each in order to assist with an understanding of how two-stroke engine operates and

how to construct this Patent.

[106] For AC, Dr. David Checkel is a professional mechanical engineer; he is the holder of a

Ph.D. in engineering from the University of Cambridge. He has taught at the University of

Alberta's Department of Mechanical Engineering for close to 30 years. He is now retired.

[107] For BRP, Dr. Glenn Bower was also trained as a mechanical engineer. He holds a Ph.D.

earned at the University of Wisconsin-Madison. He is currently a Senior Scientist at the

University of Wisconsin-Madison Engine Research Center and Faculty Associate in the

University of Wisconsin-Madison Mechanical Engineering Department.

[108] Two other experts were retained by the parties to assist with the assessment of damages.

The matter of damages was not bifurcated in this case and the case on damages was heard

irrespective of the decision on infringement and validity. Both experts on damages also testified

in the sister case T-2025-11.

[109] For AC, Mr. Andrew N. Carter offered his expertise. He has a Bachelor of Science

degree from the Rose-Hulman Institute of Technology. He also holds a Master of Business

Administration from the University of Chicago’s Graduate School of Business.

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[110] Dr. Keith R. Ugone, for BRP, was trained in economics. His B.A. in Economics was

received from the University of Notre Dame. His M.A. in Economics is from the University of

Southern California. His Ph.D was earned at Arizona State University.

[111] Mr. Carter and Dr. Ugone have for some time provided advice to clients through, in the

case of Mr. Carter, a firm where he is the head of the expert testimony practice, while Dr. Ugone

is a managing principal at Analysis Group, Inc. where he specializes in the interpretation of

financial and economic data.

VI.

Credibility of experts

[112] The qualifications of the experts were never doubted. Nevertheless AC chose to dedicate

a number of its allocated 60 pages for its memorandum of facts and law to challenging the

credibility of the two experts retained by BRP in this case.

[113] As for Dr. Bower, an expert in mechanical engineering, AC reproaches him that he

lacked impartiality and acted as an advocate for the party having retained his services.

[114] There is no doubt that expert witnesses have “an overriding duty to assist the Court

impartially on matters relevant to his or her area of expertise” (Section 1 of the Code of Conduct

for Expert Witnesses before the Federal Courts, adopted pursuant to Rule 52.2 of the Federal

Courts Rules, SOR/98-106). Section 2 of the Code is even more explicit:

2 This duty overrides any duty Cette obligation l’emporte sur

to a party to the proceeding,

toute autre qu’il a envers une

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including the person retaining partie à l’instance notamment

the expert witness. An expert

is to be independent and

objective. An expert is not an

advocate for a party.

envers la personne qui retient

ses services. Le témoin expert

se doit d’être indépendant et

objectif. Il ne doit pas plaider

le point vue d’une partie.

Given the particular role played by expert witnesses and their duty to assist the Court impartially,

a number of questions came from the bench throughout their testimony for the purpose of

clarifying what was often left either ambiguous or unclear, at least in the eyes of the Court. That

was true of the experts retained by BRP as well as those retained by AC.

[115] In my view, having reviewed their lengthy reports and listened very carefully to the

testimony of the four experts in this case including the testimony of Dr. Bower, I was left with

the firm conviction that Dr. Bower was certainly no more an advocate for BRP than were Dr.

Checkel and Mr. Carter for AC.

[116] It must be acknowledged that experts are appearing in the context of trials where the

parties have different points of view. They have formed an opinion which, evidently, will be

consistent with the theory of the case advanced by a party. I thought this was the idea captured

by the Supreme Court of Canada in White Burgess Langille Inman v Abbott and Haliburton Co.,

2015 SCC 23, [2015] 2 SCR 182 [White Burgess Langille Inman]. It is certainly true that the

expectation is that the expert’s opinion must be impartial, independent and unbiased. However,

these concepts are qualified in view of the context in which an expert is testifying:

32

Underlying the various formulations of the duty are three

related concepts: impartiality, independence and absence of bias.

The expert's opinion must be impartial in the sense that it reflects

an objective assessment of the questions at hand. It must be

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independent in the sense that it is the product of the expert's

independent judgment, uninfluenced by who has retained him or

her or the outcome of the litigation. It must be unbiased in the

sense that it does not unfairly favour one party's position over

another. The acid test is whether the expert's opinion would not

change regardless of which party retained him or her: P. Michell

and R. Mandhane, “The Uncertain Duty of the Expert Witness”

(2005), 42 Alta. L. Rev. 635, at pp. 638-39. These concepts, of

course, must be applied to the realities of adversary litigation.

Experts are generally retained, instructed and paid by one of the

adversaries. These facts alone do not undermine the expert's

independence, impartiality and freedom from bias.

It is certainly not infrequent for experts to hold different opinions. This is exemplified again in

the recent case of R. v Borowiec, 2016 SCC 11, where two experts came to diametrically

different views on whether a mother charged with the offence of infanticide had a disturbed

mind. Different opinions do not show a lack of impartiality. It is common place that experts

disagree.

[117] In the case at hand, AC complained that Dr. Bower did not satisfy some of the specific

requirements of section 3 of the Code of Conduct. Here, AC seems to refer to their view that Dr.

Bower ought to have disclosed “literature and other materials specifically relied on in support of

the opinion.” As I have explained elsewhere in this judgment, there was no such derogation from

the Code, as what M. Bower was faulted for did not fall in the category of literature and other

materials.

[118] AC was also complaining about a peripheral role that may be played by the expert on a

project at the University he is associated with, where one of the sponsors would be BRP. He is

also faulted for having acted in a case in the United States involving Polaris, another snowmobile

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manufacturer, and Arctic Cat in a matter about the American equivalent of the 738 Patent.

Neither one of these two allegations was particularly convincing. They did not go to the

impartiality, independence and lack of bias as described by the Supreme Court. Having

considered the reports produced in this case by the expert and his demeanour in the witness box,

he was candid and forthcoming, perhaps more so than Dr. Checkel; there was never any doubt

that the assessment done was objective, or that the view expressed was not the product of his

independent judgment, uninfluenced by who has retained him. He showed that willingness to

explain his assessment, including his careful and complete review of claims. He never hesitated

to engage with questioners and the Court. Dr. Bower was no less impartial and independent than

Dr. Checkel or Mr. Carter. I would not impugn their integrity on the basis that they have a point

of view that differs from that of Dr. Bower and, for that matter, Dr. Ugone. The same is true in

reverse. They are all experts who have come to a conclusion and I have no indication that their

position is tailor made.

[119] AC contended that bias was demonstrated by the fact that Dr. Bower found prior art that

would invalidate the 738 Patent. However, the main pieces of prior art in this case were

identified more than ten years ago by BRP as it was attempting to avoid being in violation of the

738 Patent. That, in and of itself, is a laudable objective and no one should be faulted for having

conducted research that I found to be diligent. The fact that, once retained, Dr. Bower would

conduct further research is not to be decried. Quite the opposite. One should expect that research

is conducted to find what is the extent of the prior art. It would be quite a different matter if Dr.

Bower had found prior art that would have been counterproductive from his stand point, yet he

would have hidden that fact from the Court. The Court did not find that it was particularly

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impressive that “Dr. Checkel’s construction is independent of the asserted prior art. In fact, he

did not recall looking at the asserted prior art in the preparation of his report on claim

construction and infringement.” (AC’s Memorandum of facts and law, at para 190)

[120] In fact, the hesitation shown by Dr. Checkel to define and explain what “ignition

pattern”, the central concept in this patent, signaled an intention to stick to a pre-determined

scenario. On more than one occasion, Dr. Checkel showed reluctance to engage on that most

important concept, as if the issue could be avoided. The Court was left with the impression the

expert was walking some sort of a fine line from which he was reluctant to depart.

[121] AC tried to make hay out of the obvious change of heart on the part of Dr. Bower about

the required qualifications of the person skilled in the art (Posita). It is certainly true that he

expressed a different view in a report he authored in the US case of Polaris v Arctic Cat some 13

years ago. As he candidly testified at trial, he had forgotten about the particulars of his

involvement which actually never resulted in him testifying as the case was settled out of court.

Contrary to what is argued by AC, he did not prove himself to be willing to ignore his own

evidence as much as he had forgotten about that evidence.

[122] As I will try to show in the section of these reasons dedicated to determining the features

of the person skilled in the art, the better view is that now defined by Dr. Bower. In my view, the

knowledge that is required in order to practice the 738 Patent requires more than the experience

of a cell technician. If the inventive concept is that which is defined by AC, it is simply unlikely

that a person of skill in the art does not have the skills of a mechanical engineer. If, on the other

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hand, what is needed is an engine calibrator, that would fit the definition of the Posita offered by

Dr. Checkel where academic credentials are not required. I have concluded that the person to

whom the patent is addressed is not merely a calibrator.

[123] It follows that the Court is of the view that the definition of the Posita offered by

Dr. Bower in this case does not render him less qualified, less objective or less independent. I

have come to the conclusion that his credibility, and the weight of his evidence, should not be

discounted simply on the basis that he has changed his mind on the definition of the Posita. As

noted earlier, he had forgotten about the Polaris litigation and, in my view, revising one’s view is

not to be held against the expert unless there is a nefarious purpose that can be inferred. That has

not been shown in this case. AC has contended that the change of heart, or opinion, was that the

expert showed a willingness to change his opinion based on who retains his services. I disagree.

In the U.S. case Polaris v AC, Polaris was in the same position as BRP is in that it is in the

opposite camp compared to AC. In a sense, Polaris and BRP appear to be in the same camp, as

the conversation between Mr. Strickland and a U.S. attorney for Polaris would attest. The fact

that Dr. Bower would define differently the Posita cannot reflect a predilection for changing his

mind depending on who hires him when, in fact, the two clients are in a similar predicament.

[124] I should add, parenthetically, that it is somewhat ironic that AC would insist that much on

the difference between the positions taken by Dr. Bower in this case and in the U.S. litigation

involving Polaris.

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[125] As was brought to the attention of the Court, AC resisted strenuously answering any

question relating to the U.S. litigation, including whether the matter did not proceed because

Polaris designed around the U.S. Patents 082 and 566. One of the reasons given was that these

two patents are not equivalent to the Patent-in-suit and the claims differ in number and in

language (examination of corporate representative Donn Eide, March 20-21, 2014). Without

knowing more about the U.S. litigation involving the witness, it is not possible to ascertain fully

what would have been an appropriate definition of a Posita in U.S. litigation. Indeed, it is always

a perilous exercise to try to compare requirements in two different pieces of litigation conducted

in two different countries operating on different laws and sets of rules.

[126] The Court found Dr. Bower to be generally clearer than Dr. Checkel in his explanations.

Dr. Checkel was mistaken in a number of respects in his report; as with Dr. Bower, I would not

hold that against him. Mistakes happen. On the other hand, he hesitated answering questions

which appeared to be straight forward, indicating at times that he had misunderstood the question

asked. Furthermore, the claims construction exercise conducted by Dr. Bower was much more

fulsome than the cursory examination done by Dr. Checkel. Dr. Bower was precise and the

construction accounted for the words used in the claims.

[127] It must be said, however, that both experts were operating with a Patent that had a lot to

be desired. They each had a theory as to what was intended by the invention and, to some extent,

that is to be expected in a case that ends up before the Court. In other words, the simple fact that

the matter needs to be litigated is a significant indication that there is a fundamental

disagreement. This Court did not hold that Dr. Checkel and Dr. Bower were not experts; this

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Court did not conclude that their evidence ought not to be admissible; this Court rather concludes

that the experts dealt with a difficult patent that was lacking in details and precision and their

integrity ought not to be impugned. At the end of the day, it is this Court’s assessment that the

evidence offered by Dr. Bower was closer to the language of the Patent and it was consistent

with the prior art that had been identified.

[128] Advocating for a party and advocating for an opinion firmly held are two different things.

The advantage enjoyed by Dr. Bower over Dr. Checkel, in my view, is that Dr. Bower’s opinion

stayed close to the text of the Patent, accounted for all the terms of the claims and did not do

violence to the text. Furthermore, the relevant prior art was consonant with the view he

expressed in his reports and testimony.

[129] AC made the same kind of argument with respect to Dr. Ugone’s evidence. He was

retained by BRP to assess the damages suffered by AC were the Court to find in favour of the

Plaintiffs. Here, the argument boils down to a disagreement with the testimony offered by Mr.

Carter, the expert retained by AC. AC suggested that Dr. Ugone was reluctant to help the Court.

As a matter of fact, Dr. Ugone was no more reluctant to help the Court than was Mr. Carter. On

the issue of damages, these two experts arrived at conclusions that could hardly have been more

apart.

[130] Concerning Dr. Ugone, he was accused of being inconsistent in his methods and reluctant

to help the Court.

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[131] As will be shown in the part of these reasons dealing with damages, neither one of the

experts was in the end of much assistance to the Court. One of the three methodologies offered

by Dr. Ugone may have been the basis, with some significant adjustments, to serve as the basis

of the notional negotiation. However, none of the four methods devised by Mr. Carter was of any

assistance. Even his report was less than instructive and his methods were rather crude, lacking

in sophistication or theoretical underpinnings. I have concluded that it is largely because of the

Patent-in-suit which would have made very difficult to assess damages without more information

on the actual practice of the Patent. I would not have retained any criticism against Dr. Ugone. If

some assistance could have been derived from the experts’ evidence on damages, Dr. Ugone’s

evidence at least provided a method that could have provided some guidance.

[132] Until the end, it remained unclear what the impact of the invention had, or could have

had, on the profitability of the accused snowmobiles. This is a vital feature of a case on damages.

That is largely a function of the lack of information that was generated on the basis of a patent

such as the 738 Patent. Mr. Carter, who was relying on his view of the profitability of the AC

snowmobile, not the accused engines, never offered how the AC snowmobile was practicing the

invention, including what systems were directly influenced by the said Patent. Instead, he fell

back on the vague notion of the contribution margin between snowmobiles. As is well known, it

is only the damages that are incurred “by reason of the infringement” (subsection 55(1) of the

Patent Act) that can be compensated. Mr. Carter had to contend with an invention that consisted

of the use of exhaust gas temperature in order to adjust the ignition timing to optimize the

performance of a snowmobile engine, which includes increasing power, making adjustments for

fuel, incorrect carburation or fuel delivery and, generally speaking, avoid damage to the engine.

However, the Patent does not indicate how the exhaust gas temperature is to be used in order to

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attain such goals and the evidence does not show whether any of those goals were attained by

either the AC engine or the accused engine. AC did not lead evidence on the use it made of its

invention. In other words, what was the value generated by the invention? It is, therefore,

unsurprising that the experts on damages were attempting to be creative to establish some basis

for the awarding of damages. The paucity of information resulted in their testimony lacking a

strong foundation.

[133] In the end, this is a case where the experts provided the Court with as much assistance as

they could muster in view of the Patent-in-suit. There should not be any undue reflection on their

testimony. In my view, AC’s contention against both Dr. Bower and Dr. Ugone is no more than a

disagreement with the views expressed by these two experts. As put by the Supreme Court in

White Burgess Langille Inman, above, this is the reality of the adversary system of justice that

experts, even when well qualified, may well reach conclusions that are not consistent with one

another. It is for the trial judge to use the expertise offered to decide which view carries more

weight. In a patent case, we have at least the benefit of the text of the patent which is elucidated

with the assistance of experts.

[134] Counsel for AC put it appropriately in their memorandum of facts and law when stating

that “[t]he patent agent is free to draft in this manner with the hope of drafting one claim that is

valid and of sufficient scope to protect the invention” (para 82). The point was captured by

Pigeon J. in Burton Parsons Chemicals, Inc v Hewlett-Packard (Canada) Ltd, [1976] 1 SCR 555

[Burton Parsons]:

It is stressed in many cases that an inventor is free to make his

claims as narrow as he sees fit in order to protect himself from the

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invalidity which will ensue if he makes them too broad. From a

practical point of view, this freedom is really quite limited because

if, in order to guard against possible invalidity, some area is left

open between what is the invention as disclosed and what is

covered by the claims, the patent may be just as worthless as if it

was invalid. Everybody will be free to use the invention in the

unfenced area. It does not seem to me that inventors are to be

looked upon as Shylock claiming his pound of flesh. In the present

case, there was admittedly a meritorious invention and Hewlett-

Packard, after futile attempts to belittle its usefulness, brazenly

appropriated it.

[135] Here, AC was faced with the same kind of dilemma. If the claims must be construed with

the ignition pattern being central to the invention that leaves potentially an unfenced area where

someone avoids using ignition patterns in the manner described in the claims. On the other hand,

if the ignition pattern is to be read down, if not outright ignored, there is prior art that will be

invoked to argue that the claims are invalid. That was the context in which the two experts

testified. That was the conundrum faced by the Plaintiffs.

VII. Person of skill in the art

[136] As with other patent cases, this case requires that the person of skill in the art (Posita) be

defined, that is the hypothetical person who will consider the patent and to whom it is addressed.

[137] It would seem that the definition of the Posita, given by the Canadian group of the

Association internationale pour la protection de la propriété intellectuelle (AIPI), received a

measure of attention. Hughes J., of this Court, referred to it in Merck & Co v Pharmascience Inc,

2010 FC 510, 85 CPR (4th) 179. Stratton in his Annotated Patent Act (Bruce Stratton, Carswell),

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gives it as the definition of the term in the section called Words and Phrases Judicially

Considered. It reads:

In Canada, the “person of ordinary skill in the art” is the

hypothetical person to whom the patent is addressed. This may be

a single individual or a group representing different disciplines,

depending on the nature of the invention. The person of ordinary

skill in the art is deemed to be unimaginative and uninventive, but

at the same time is understood to have an ordinary level of

competence and knowledge incidental to the field to which the

patent relates (i.e. the common general knowledge) and to be

reasonably diligent in keeping up with advances. The common

general knowledge is that knowledge generally known by persons

skilled in the relevant art at the relevant time. Accordingly, it can

include knowledge passed amongst people in the field, including

information that is not in published form. Likewise, not everything

that has been published is within the common general knowledge.

[138] That same hypothetical person has been described, in the context of the kind of person for

whom an invention would be obvious, in a more colourful way in Beloit Canada Ltd v Valmet

Oy (1986), [1986] FCJ No 87 (CA) at p 294:

The test for obviousness is not to ask what competent inventors did

or would have done to solve the problem. Inventors are by

definition inventive. The classical touchstone for obviousness is

the technician skilled in the art but having no scintilla of

inventiveness or imagination; a paragon of deduction and

dexterity, wholly devoid of intuition; a triumph of the left

hemisphere over the right. The question to be asked is whether this

mythical creature (the man in the Clapham omnibus of patent law)

would, in the light of the state of the art and of common general

knowledge as at the claimed date of invention, have come directly

and without difficulty to the solution taught by the patent. It is a

very difficult test to satisfy.

[139] I do not wish to suggest that the definitions are to be applied without any nuance and in

an overly rigid fashion. But the basic idea is that a person, or group representing possibly

different disciplines, has an ordinary level of competence and knowledge, which includes

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reasonable diligence in keeping up with developments in the field. That person, or team, is said

to be unimaginative and uninventive, neither a genius nor an idiot, just an ordinary competent

person (see Mailman v Gillette Safety Razor Co of Canada, [1932] SCR 724).

[140] Although the parties do not disagree on the general description of who may constitute the

Posita, including that the notion could include a small team, they disagree on what would be the

qualifications of the Posita in the case at hand.

[141] By requiring less formal education, AC would end up with a class where education is

replaced by at least ten years of appropriate experience working on engine control projects. It is

not so much that the mechanic with ten years' experience is part of a team as the experience is

presented as a substitute for the formal training and experience.

[142] In his initial report (June 15, 2015, exhibit P-2), Dr. Checkel, the expert retained by AC,

stated that “[t]he person skilled in the art would be expected to have mechanical engineering and

knowledge of basic electrical circuity”, before requiring further familiarity “with how electronic

control devices (typically a microprocessor) could be programmed and interfaced with sensors

and control systems.” (para 28). Unexpectedly, Dr. Checkel would broaden the class in his last

sentence at paragraph 29, dealing precisely with the person skilled in the art by stating that “the

required skills could also have been developed with less formal education and more years (likely

at least ten years) of appropriate experience working on engine control projects.” In his second

report (August 26, 2015, exhibit P-60), Dr. Checkel took issue with the definition of the Posita

given by Dr. Bower, the expert retained by BRP, who would require, as part of the team, that

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there be someone with formal education and experience, i.e. a bachelor's degree in mechanical

engineering with two to three years of experience in the development, design and performance of

two-stroke engine control systems (Exhibit D-40, June 15, 2015).

[143] It seems that Dr. Checkel's criticism stems in part from his desire to be inclusive. Thus,

he writes that “[t]he definition is overly restrictive because it does not allow for the possibility of

persons with less formal education and more practical experience” (P-60, para 14). His focus is

on people commonly found in the engine development and calibration departments of medium

size companies that manufacture off-road and recreational vehicles, as well as in the smaller

companies that specialize in developing engine controls and in adapting or calibrating engines

for specific applications (P-60, para 14). However, it is not so much that Dr. Bower excludes

from the team those who would have less formal education; rather he advances that the formal

education is needed on the team. Dr. Checkel seems to acknowledge that the Posita “would

likely have an appropriate university or college degree and two to four years of experience” (P-2,

para 29), yet he contends that someone with less formal education would not only be part of the

team Dr. Bower is relying on, but “more years appropriate experience working on engine control

project” (P-2, para 29) would suffice.

[144] It is not easy to follow Dr. Checkel in his justification for having a Posita without formal

training. He argues for inclusiveness, which is not excluded by Dr. Bower, because “it is

important to consider the common general knowledge and the state of the art from the view point

of such a person” (P-60, para 15). However, this cannot justify excluding the degreed mechanical

engineer. In his first report, Dr. Checkel accepts that the Posita would likely have an appropriate

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university degree with some years of experience but concludes that a substitute could be at least

ten years of “appropriate” experience. What constitutes that “appropriate” experience remains

unknown. In his second report, he argues for inclusiveness, which is a red-herring, and justifies

his choice by stating that the common general knowledge and the prior art must be considered

from the view point of the person of experience, but without formal training. This is considering

the issue upside down.

[145] With respect, what is being described by Dr. Checkel is not the hypothetical person to

whom the patent is addressed. It is trite to point out that a patent is for an invention, and that an

invention is defined precisely in the Patent Act:

“invention”

“invention” means any new

and useful art, process,

machine, manufacture or

composition of matter, or any

new and useful improvement

in any art, process, machine,

« invention » Toute réalisation,

tout procédé, toute machine,

fabrication ou composition de

matières, ainsi que tout

perfectionnement de l’un

d’eux, présentant le caractère

manufacture or composition of de la nouveauté et de l’utilité.

matter;

[146] Stephen J. Perry and Andrew Currier capture well in their Canadian Patent Law, 2^nd

Edition, Lexis Nexis, the connexion between the knowledge required of the Posita in relation

with the invention:

§15.7 It is therefore incumbent upon the court, when construing a

patent, to do so from the perspective of the person skilled in the

art. The person skilled in the art has been identified as a person to

whom the patent specification is specifically addressed and who is

likely to have a practical interest in the subject matter of the

invention, and as a person with practical knowledge and

experience of the kind of work in which the invention was

intended to be used. It has been held in at least one case that

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knowledge can be gained through practical experience or

education.

[Emphasis in the original]

[147] Repeatedly during his testimony, Dr. Checkel was referring to the Posita as the one

setting up the controls for new engines (see for example, at pages 3016 and 3025). The 738

Patent is concerned with an inventive concept, something new, and not merely what is needed

from an experienced technician to set up the controls, to calibrate the engine. Indeed, limiting the

experience to snowmobiles would not be appropriate as the Patent is directed to two-cycle

internal combustion engines and their operation.

[148] In effect, it would seem that AC contends that the Posita is the person who sets up the

controls and calibrates the engine. The invention, they say, is using the exhaust gas temperature

to optimize the ignition timing of a two-stroke engine. The optimization is presented as getting

the best power, although the 738 Patent does not profess such limitation. As the Background of

the Invention states, “as one example the optimum point of ignition during acceleration can

differ from that of a normal running operation”.

[149] The difficulty with the contention is that the 738 Patent is proposing more than simply

calibrating an engine to optimize its power. It is certainly true that the Patent states that the

optimum operation of the engine may require different optimum points of ignition during

acceleration. However, the Patent goes well beyond acceleration and power.

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[150] The optimization may relate to the engine operating shortly after start-up, where the

engine is still cold, requiring different relationships between ignition timing and engine speed.

[151] In fact, the Patent is concerned with the fact that “[d]ifferent engine operating conditions

may result in different ignition patterns being desirable”. The exhaust gas temperature is to be

“used to evaluate operating conditions” (Pages 3 and 4 of the 738 Patent). The sensed gas

temperature could be used to indicate the kind of fuel used, setting the ignition timing pattern

accordingly. The Patent goes on to state that the adjusted timing pattern would avoid damage to

the engine.

[152] Actually, the Patent speaks even in terms of the gas temperature being “useful in

indicating some problems in engine performance, e.g. incorrect carburetion or fuel delivery”. (p

5)

[153] As can be seen, performance is not limited to acceleration or power. In order to be that

person to whom the Patent is addressed, there is a need to determine what the exhaust gas

temperature is indicating, what is the diagnosis that comes in order to address the problems in

engine performance, to avoid damages to the engine. The appropriate calibration follows the

diagnosis. It depends on what needs to be accomplished. Is the gas temperature to be used in

indicating engine performance such as carburation or fuel delivery? Is the sensed temperature

indicative of the type of fuel used? Should the temperature be used to evaluate the operating

conditions?

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[154] The 738 Patent is silent as to how the exhaust gas temperature can be used to identify

problems. It is also silent as to how that information is used to solve the problems. What timing

pattern is appropriate to avoid incorrect carburation or fuel delivery is not described. How such

problem is detected using sensed exhaust gas temperature is left to the person skilled in the art.

That is, it seems to me, a further indication that a mechanical engineer is needed to practice the

invention. This Patent is addressed to someone who does more than the calibration of engines

which entails deciding on the values needed for ignition timing at different engine speeds. It is

the knowledge needed to be the addressee that is missing to the Posita proposed by AC.

[155] It is one thing to develop engine controls, to « be aware of the structures and mechanisms

involved in operating two-stroke engines » (P-60); it is quite another to appreciate and

understand that which purportedly is new and useful art, process, machine, manufacture or

composition of matter. Dr. Bower’s point of view, expressed more fully at paragraph 14 of his

response to Dr. Checkel’s infringement report (Exhibit D-45, August 28, 2015), is more

conversant with the 738 Patent. The formal training would bring with it knowledge broader than

experience acquired while working on certain types of engines.

[156] Reacting to the report of Dr. Bower (P-40) where he requires that the team include

someone with a bachelor’s degree in mechanical engineering with two or three years of

experience in the development, design and performance of two-stroke engine control systems

(para 55), Dr. Checkel suggests, as indicated earlier, that Dr. Bower’s definition is overly

restrictive “because it does not allow for the possibility of persons with less formal education and

more practical experience” (exhibit P-40, para 14).

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[157] Dr. Checkel’s wish to be inclusive is certainly laudable. Thomas Alva Edison had

thousands of patents in his name and he did not benefit from formal education. However, no one

will dispute that he was the exception, not the rule. He is the mechanical genius of the Gillette

case. Actually, Dr. Bower does not exclude from the team those with less formal education: he

wants for someone on the team to have the mechanical engineering degree.

[158] I accept Dr. Bower’s evidence that formal training, which evidently carries the theoretical

bases in the field, will assist in having the proper understanding of injection timing, injection

quantity, admission of air, and configuration of the tuned pipe. The 738 Patent, if it is to be

practiced as indicated in its disclosure, requires someone with a mechanical engineering degree.

[159] This is not to suggest that it would be impossible for someone with many years’

experience, who would be self-taught, some sort of autodidact, to fully understand the 738

Patent. Dr. Checkel wants to allow for the possibility that these be included. However, such is

not the test. It is not an attempt to include people who work generally in the area that must guide

the Court, but rather a determination of the person to whom the Patent is addressed. This is a

Patent that is concerned with the logic used to operate a two-stroke engine and, as we saw

throughout the trial, this is not an easy area to master. As captured nicely in the Annotated Patent

Act of Bruce Stratton, “the notional skilled person should be a person who understands, as a

practical matter, the problem to be overcome, how different remedial devices might work and the

likely effect of using them”. (Annotation under section 28.3, at page 1-200.11). It seems to me

that what is required here is not so much someone who could produce calibration, for instance,

but rather someone who can fully appreciate the specifications and work with them. In

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Consolboard Inc v MacMillan Bloedel (Saskatchewan) Ltd, [1981] 1 SCR 504, Dickson J. wrote

at page 523:

The persons to whom the specification is addressed are “ordinary

workmen”, ordinarily skilled in the art to which the invention

relates and possessing the ordinary amount of knowledge

incidental to that particular trade. The true interpretation of the

patent is to be arrived at by a consideration of what a competent

workman reading the specification at its date would have

understood it to have disclosed and claimed.

[160] The 738 Patent does not claim calibration. An appropriate calibration would result from a

proper use of the Patent, but it will result from an appropriate understanding of what the

invention is about. The testimony of Mr. Troy Halvorson, an employee of AC, can illustrate

somewhat the difficulty encountered if one is tempted to go to a lower denominator in order to

define the class of persons to whom the 738 Patent could be addressed without having the formal

education included on the team.

[161] My view that the Posita needs to have an engineering degree is strengthened by the

comment made by Dr. Checkel in his report responding to the allegations of invalidity made by

BRP (P-60). As Dr. Checkel was discussing as normal operating conditions which could be

remedied, he reckoned that many factors would have to be taken into account:

73.

I disagree with Dr. Bower’s opinion that the 738 Patent is

indefinite relative to the term “a first ignition pattern”. In

Paragraphs 74 to 83, the Bower report examines claim language

related to using the exhaust gas temperature to sense undesired

operation conditions or undesired engine operation. At paragraphs

81-82, Dr. Bower points out that, using exhaust temperature alone,

it could be difficult to tell whether operation was normal or

abnormal. I agree that using exhaust temperature alone is not

adequate for diagnosing abnormal operation. However, the

Detailed Description of the 738 Patent does not say the abnormal

conditions will be “determined” by exhaust gas temperature alone.

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Instead, the Detailed Description, (at page 5, lines 21-30), uses the

phrases “… sensed exhaust gas temperature may be indicative …”

and “… sensed exhaust temperature also may be useful in

indicating …” This distinction illustrates that the exhaust gas

temperature is to be used as one factor along with the other

measurements in determining when an abnormal operating

condition exists that can be accommodated or alleviated by

selecting an alternate ignition pattern.

[My emphasis]

[162] Surely, even a good calibrator would need to follow the lead of a mechanical engineer to

produce the appropriate diagnosis. The issue is not so much that the good calibrator should be

excluded as it is that the skills of the mechanical engineer with some experience must be part of

the team. These skills cannot be replaced.

[163] That same point was made by Dr. Checkel in his testimony-in-chief (Transcript, pp 160

to 162). Dr. Checkel appears to be satisfied for the experienced person to set up engines controls.

However, once something new appears, where repetition is not an asset, he seems to agree that

the engineering degree is preferable:

For that, it’s still useful to be a Cambridge-educated research

experienced engineer. So I wouldn’t get the guy who has done a

series of re-calibrations on new product lines for the same V8

engine, but a different intake manifold every year. I wouldn’t ask

him to do that without advising him, but I would like him as part of

the team of people if I’m going to do it on a new project. He has

more experience on setting up engine controls and doing the tests

on the equipment that he uses than I do. I have more experience on

developing new equipment you need for measuring something that

just hasn’t been done before.

(Transcript, p162, lines 18 to 28 and p 163, line 1)

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[164] Finally, I was also concerned by what appeared to be the motivation behind the class as

defined by Dr. Checkel to qualify as a Posita. At paragraph 15 of his second report (P-60), Dr.

Checkel suggests that “[m]any of the practitioners of the art involved in this field would fall

outside of Dr. Bower’s definition and it is important to consider the common general knowledge

and state of the art from view-point of such a person.” It is not completely clear what is meant by

Dr. Checkel. If that means that the experience, information and methods available to solve

problems are added as the person with appropriate experience working on engine control projects

is part of a team, as proposed by Dr. Bower, that would evidently be acceptable. The common

general knowledge would be the accumulation of the common knowledge of the persons coming

from different disciplines that are complimentary. I am not convinced, however, that the

statement made by Dr. Checkel is not for the purpose of limiting the common general knowledge

and prior art. We should not define the Posita with a particular result in mind, with 20-20

hindsight. If there is a lack of knowledge to understand fully the patent, then it would be difficult

to conclude that he or she is in fact the patent’s intended audience. That seems to be a description

endorsed by the Supreme Court in Free World Trust v Électro Santé Inc, 2000 SCC 66, [2000] 2

SCR 1024 (Free World Trust):

The courts have traditionally protected a patentee from the effects

of excessive literalism. The patent is not addressed to an ordinary

member of the public, but to a worker skilled in the art described

by Dr. Fox as

a hypothetical person possessing the ordinary skill and knowledge

of the particular art to which the invention relates, and a mind

willing to understand a specification that is addressed to him. This

hypothetical person has sometimes been equated with the

“reasonable man” used as a standard in negligence cases. He is

assumed to be a man who is going to try to achieve success and not

one who is looking for difficulties or seeking failure.

(Fox, supra, at p 184)

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It should be remembered that the person skilled in the art is not only the person to whom the

patent is addressed, but he or she is also the person who constructs or uses the invention once the

monopoly has expired (Whirlpool Corp v Camco Inc, 2000 SCC 67, [2000] 2 SCR 1067).

[165] It follows that, given the Patent under review, the person of skill in the art, constituted of

a person or a team of persons, must have formal training in mechanical engineering (bachelor’s

degree at least) together with some practical experience in the development and design of two-

stroke engine control designs. Having heard 19 days of evidence on a Patent, I do not see how a

Posita without an engineering degree could be the person to whom the patent is addressed. It

remains true that persons with lesser formal training or experience could be valuable members of

a team working on new two-stroke engines, but the 738 Patent could not be exclusively

addressed to them.

[166] In reaching my conclusion, I have taken fully into consideration that Dr. Bower changed

his position from 12 years ago. Dr. Checkel could not convince me that in view of the 738

Patent, the person to whom the specification is addressed does not have to be equipped with the

formal education of a mechanical engineer. The breadth of knowledge required by the 738 Patent

calls for more than ten years “of appropriate experience working on engine control projects.”

The demonstration that the targeted audience for the 738 Patent is that experienced worker on

engine control projects has not been made. More is needed to understand the specification and

what is disclosed and claimed.

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VIII. Claims construction

[167] Before considering the allegations of infringement of the claims in issue or their validity,

the Court must construe the claims. That construction, which is a question of law, is done with

the assistance of the person skilled in the art as of the date of the publication of the patent

application (Whirlpool at para 45). Hence, it would be inappropriate to consider the claims with

the current understanding of processing power of nowadays computers that has grown

exponentially over the years. The invention came about at a time when computing power was

much more limited than now and where trade-offs as to the use of the capability of controllers

was more prevalent.

[168] It is not for the expert to construe the claims, that being a question of law. Professor

David Vaver puts it humorously in his book Intellectual Property, 2^ndEd, Irwin Law (2011):

Yet a patent’s meaning is ultimately a question of law, often

decided by a judge who may not be skilled in any art or science, let

alone the relevant one. He may be closer in initial understanding to

the shop floor worker of yore than the trained scientist or engineer

of today, but even experienced judges with science backgrounds

admit they are often at sea outside their discipline. The litigants

and their experts must then instruct the judge in the relevant art or

science. They may in fact do it so well that, although they may all

agree on what a claim means to them or to a skilled reader, the

judge will end up disagreeing with them all.

[p 347]

Furthermore, the claim construction is not done with an eye to deciding whether there has been

infringement or whether the patent is invalid. These are issues that come later in the analysis. It

cannot be allowed to become results-driven (Whirlpool at para 49).

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[169] This case boils down to the construction that must be given to a relatively small number

of phrases in five claims: 11, 16, 33, 40 and 47. Most of the essential elements of the claims are

not in dispute. The two-cycle engine which is the subject of the 738 Patent consists of a number

of elements common to these engines: cylinder, piston, crankshaft, spark plug (or variant),

sensor, exhaust pipe, coil and controller are all accepted as being part of the engine.

[170] The phrases to be interpreted will be found in independent claims in the case of three of

the five asserted claims. Claim 40 depends on claim 34 while method claims 33 and 47 are

dependent on claims 28 and 41 respectively. Claims 11 and 16 do not require resort to

independent claims as they are self-contained.

[171] It bears repeating that engine claims 11 and 40(34) have corresponding method claims 16

and 47(41). Method claim 33 stands alone. It follows that the analysis, for all intents and

purposes, is concerned with only two sets of claims: 11 and 16 and 40(34), 47(41) and 33(28).

A.

“Ignition Pattern”

[172] As indicated numerous times during the trial of this case, the words “ignition pattern” are

at the heart of the Patent and the asserted claims. That is because “ignition pattern” is given a

particular meaning which, as we shall see, excludes being composed of one ignition point, and

because all of the claims require that the ignition point be ignited according to an ignition

pattern. Put another way, everything seems to turn around an ignition pattern in more ways than

one. The words are not defined as such in the claims, but indications as to their meaning can be

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found in the specification (Western Electric Co v Baldwin International Radio of Canada, [1934]

SCR 570). Although the abstract cannot be used in claims construction (Laboratoires Servier v

Apotex Inc, 2009 FCA 222), it illustrates in this case the centrality of the so-called “ignition

pattern”: “The engine exhaust gas temperature is sensed and is used to determine the particular

ignition pattern used at a particular time”. In the five claims under review, there are references to

that concept.

[173] The purposive construction that must preside in claims construction allows that, if the

language of the claims is not clear, reliance can be had to the disclosure. In this case, the claims

are silent as to what is meant by “ignition pattern”. Both experts relied on disclosure to assist in

the understanding of the term. I agree.

[174] What, in my view, emerges from the disclosure is a clear understanding of what the

Patent means by “ignition pattern”. At page 1 of the specification, the inventor states that “an

engine operating shortly after start-up may require a different relationship between ignition

timing and engine speed (herein of the “ignition pattern”) …” At the top of the following page,

one can read that “[t]he present invention seeks to provide a two-cycle engine that enjoys

improved performance by selecting from a plurality of relationships between ignition timing and

engine speed (ignition patterns) based on exhaust gas temperature”. A few pages later, the

disclosure informs the reader that “the various combinations of ignition timings and particular

engine speeds thus will form a particular ignition pattern”. Obviously, an ignition pattern refers

to the relationship that exists between at least the ignition timing and the speed at which the

engine turns. The Patent also specifies that a pattern is composed of various combinations of

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ignition timings and engine speeds. Thus, the normal meaning of “pattern” is confirmed in that

one combination of an ignition timing and an engine speed does not a pattern make. It requires

various combinations of timings and speed. The claims will make that requirement even more

explicit.

[175] The five claims asserted by AC (together with the independent claims where appropriate)

all refer to “ignition patterns”. They all indicate that the activation of the ignition source will take

place “according to an ignition pattern in which an ignition point during the compressing

movement varies with operation speed of the engine.” Claims 33 (28), 40 (34), and 47 (41), the

selection claims, all further indicate the “different ignition patterns having different relationships

between ignition point and engine speed”. Given that these claims require that there be a

selection of one ignition pattern out of a plurality of ignition patterns, that signals that the

ignition patterns must all be different from each other. Consistent with the disclosure, these

phrases in the claims all make the difference between an ignition point, which is the result of the

combination of one ignition timing with a particular engine speed, and the ignition pattern that

will contain that ignition point. In the case of claims 40(34) and 47(41), the ignition pattern

would include a third dimension such that the ignition point varies not only with the engine

speed, but also with the throttle position. Thus, the selection of one ignition pattern will be from

a number of different patterns according to the Patent.

[176] Dr. Checkel ultimately agreed that an ignition pattern must be composed of more than

one single relationship between ignition timing and one RPM (Transcript, pp 386 to 389, in

relation to claims 33 (28), 40(34), and 47(41) and pages 3123-3124 in relation to claims 11 and

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16). Nevertheless, with or without the agreement, a close examination of the disclosure and the

claims leads inexorably to the conclusion.

[177] One does not have a pattern if there is one single relationship between one ignition timing

and one engine speed. That is an ignition point, not an ignition pattern. Where the specification

illustrates what is meant by “ignition pattern”, the Patent itself refers to tables that comprise

various engine speeds and the number of degrees before top dead centre in tables A to E (which

are the ignition timing values). The data presented in tables A to E show five ignition patterns

that could be used at various exhaust gas temperatures. Figures 4 to 8 show, in a graphical form,

those relationships of engine speeds and ignition timings at different exhaust gas temperatures.

These figures are said to represent the ignition patterns for 250C and lower, 250 to 300C, 300 to

350C, 350 to 400C and 400C and higher respectively (p 7). In other words, each figure is a

pattern and the pattern is not a single point. It is rather the collection of points which will

constitute one pattern. The Patent never refers to one ignition point, the point at which the fuel-

air mixture will be ignited in the cylinder, as being an ignition pattern.

[178] As the Patent teaches, “the exhaust gas temperature is used to evaluate operating

conditions and thus determine which of two or more ignition patterns should be selected for

engine operation” (p 4). Hence, not only must a pattern be composed of more than one ignition

point, but there needs to be more than one ignition pattern as it is a pattern that is selected on the

basis of the temperature of the exhaust gas. As presented in the disclosure, the ignition pattern

must be composed of combinations of different engine speeds (and throttle positions in some

claims) and different ignition timings, as once an ignition pattern has been selected, on the basis

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of the exhaust gas temperature, the pattern is used to control the ignition point. The relationships

between the ignition timings and the engine speeds constitute the pattern, whether the ignition

pattern is selected on the basis of exhaust gas temperature or an ignition pattern, designated in

claims 11 and 16 of the Patent as “basic”, is modified based on exhaust gas temperature. It does

not matter whether the ignition pattern, the one according to which the controller will activate the

ignition source at the appropriate ignition point, is selected or modified on the basis of exhaust

gas temperature. What counts is that, in the end, there must be an ignition pattern according to

which the controller will activate the ignition source. The ignition pattern is the chosen

cornerstone of the Patent.

[179] The 738 Patent, in the asserted claims, refers to “ignition pattern” as well as to “ignition

point”. Obviously, there must be a difference between the two, with the ignition point being in

the ignition pattern. A construction that would conclude that a single ignition point, which is a

relationship between one ignition timing and one engine speed, constitutes also an ignition

pattern would be ignoring the text of the Patent and the language of the claims. As the Supreme

Court said in Free World Trust, above:

40.

The primacy of the claims language was already rooted

deeply in our jurisprudence and should, I think, be affirmed again

on this appeal.

The Court cannot redraft claims. BRP, and other persons interested in the 738 Patent, were

entitled to rely on the words used. The language of the claims counts, as it defines the monopoly.

[180] Three of the five asserted claims require that the ignition pattern be selected based on

sensed exhaust gas temperature. Thus, claims 33(28), 40(34) and 47(41) can be examined

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together. Indeed, the only difference between claims 28 and 41, two method claims, is that the

ignition point varies with the engine speed in claim 28 and also with the throttle position, in

claim 41, a difference that is immaterial in the construction of the claims for the purpose of this

case. Claims 11 and 16 are, as already noted, the engine claims and the method claim concerned

with the modification of an ignition pattern based on temperature of the exhaust gas. There are

five phrases, other than “ignition pattern”, deserving of attention.

B.

Controlling the activation of the ignition source according to an ignition pattern in which

an ignition point during the compressing movement varies with operation speed of the

engine [and throttle position]. (claims 33(28), 47(41) and 16)

A controller for activating the ignition source ..., the controller activating the ignition

source according to an ignition pattern in which an ignition point during the

compressing movement varies with the operation speed of the engine [and throttle

position]. (claims 40(34) and 11)

[181] The exhaust gas temperature may be used for a number of purposes. AC suggests that the

Patent is focused on power and acceleration. The specification speaks in terms of detecting the

type of fuel or some problems with engine performance, or even the failure of a temperature

sensor. It also speaks in terms of the different condition of an engine shortly after start-up as

compared to the condition of an engine operating for some time. What the invention seeks to

achieve is the optimum operation of the engine writ larger than what AC proposes, which is

achieved by varying the point at which the fuel-air mixture is ignited during the cycle of the

piston. As the disclosure states at p 4, “the exhaust gas temperature is used to evaluate operating

conditions and thus determine which of two or more ignition patterns should be selected for

engine operation”. Focusing on power and acceleration is limiting unduly what the Patent states

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and asserts. However, it does not matter for our purposes what use is made of the exhaust gas

temperature for the goal of achieving the optimum operation. Actually, the 738 Patent does not

provide any indication other than the temperature of the exhaust gas can be used to optimize the

operation of the engine.

[182] What the three selection claims are about is the sensing of gas temperature that takes the

engine to use different ignition patterns. Once an ignition pattern is selected as a function of the

exhaust gas temperature (“selecting the ignition pattern from a plurality of different ignition

patterns based on the sensed exhaust gas temperature”, in claims 33(28) and 47(41) and “the

particular ignition pattern used by the controller being selected based upon the sensed exhaust

gas temperature”, in claim 40(34)), the ignition timing will vary within that ignition pattern

depending on the engine speed (and the throttle position). Once the temperature of the exhaust

gas, which is used to evaluate operating conditions that will require a different ignition pattern,

changes, the ignition pattern changes.

[183] It follows that the words “controlling the activation of the ignition source according to an

ignition pattern”, which can be found with slight grammatical adjustments in the five claims

under review, find their natural meaning. They simply mean that the ignition source, which may

be a spark plug or some other source, will ignite the fuel-air mixture by finding the ignition

timing in the ignition pattern, appropriate for the operating conditions of the engine as detected

by the temperature of the exhaust gas, that corresponds to the speed of the engine (and the

throttle position). That must be so because it is the various combinations of ignition timings and

particular engine speeds that form an ignition pattern. What is essential is that the activation of

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the ignition source is done from an ignition pattern which is comprised of more than one ignition

point. The extraction of one point that is ignited comes after the ignition pattern has been

selected based on temperature or a basic pattern has been modified based on temperature. It is

the ignition pattern from which the ignition point will be chosen; the ignition pattern from which

the ignition point is taken is selected based on exhaust gas temperature. Put another way, the

effect of the exhaust gas temperature is always on an ignition pattern, never directly on one

ignition point.

[184] This phrase confirms a number of propositions:

a)

An ignition pattern must be different from an ignition point because the ignition

point is said to be in the ignition pattern (“according to an ignition pattern in

which an ignition point”).

b)

The different ignition points in an ignition pattern vary with engine speed (and

throttle position): this is consonant with tables A to E and figures 4 to 8.

c)

The activation of the ignition source is done according to the ignition pattern. That

connection and the fact that the controller will have to select the point in the

pattern that corresponds to engine speed (and throttle position) confirm that the

selection of the ignition point is as stated in the ignition pattern. An ignition

pattern is selected based on the exhaust gas temperature, or the basic ignition

pattern is modified based on gas temperature; but once the ignition pattern is

chosen, the ignition point appropriate for the engine speed (and throttle position)

at that moment will be taken according to the ignition pattern. The ignition pattern

is not only used to choose an ignition point: the ignition point is actually chosen

according to the ignition pattern. There are no further intervening steps in the

process according to the claims. Once again, this is perfectly consistent with the

gist, the pith and substance of the Patent as written. The whole Patent is geared

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towards ignition patterns composed of more than one ignition point. From that one

ignition pattern will be selected the appropriate timing point for the speed (and the

throttle position) until the temperature of the exhaust gas changes. What is

important to note is that the effect of the sensed exhaust gas temperature is on the

ignition pattern itself. Once the temperature changes, the ignition pattern will have

to change. Either a pattern will be selected based on the temperature, or the final

ignition pattern, the one according to which the appropriate ignition point will be

ignited, will be modified based on the temperature. Either way, it is not an ignition

point that is corrected for temperature, according to the claims: it is the selection

of the pattern that is affected by the exhaust gas temperature and it is from that

pattern of more than one ignition point that the appropriate one, according to the

engine speed (and the throttle position) will be ignited.

[185] Evidently, ignition patterns according to which the controller will activate the ignition

source at a particular ignition point will change when the exhaust gas temperature changes. That

is the nature of the invention. It is worth repeating that the inventor states in his summary of the

invention that improved engine performance is enjoyed by selecting from a plurality of ignition

patterns based on exhaust gas temperature. By changing ignition patterns, it is advanced that

better performance is achieved. What is inescapable is the centrality of ignition patterns. That is

a whole pattern that is either selected or modified, never one ignition point.

C.

The ignition pattern being selected from a plurality of different ignition patterns.

[186] This phrase is found using slightly different formulations in the selection claims 33(28),

40(34) and 47(41). It is the gravamen of the selection claims.

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[187] An ignition pattern cannot be selected from other ignition patterns if the other patterns are

not in existence. There is no dispute that the patterns are pre-programmed. Actually, the claims

speak in terms of a plurality of different ignition patterns, which suggests a non-infinite number

of patterns that already exist. Certainly, “plurality” implies more than one, maybe a large

number. But it does not connote an infinite number. More importantly perhaps, it signifies that

the plurality of ignition patterns must be antecedent to a selection that will be made on one basis:

the temperature of the exhaust gas. It is therefore apposite to examine this phrase with another

one found in the three claims.

D.

The particular ignition pattern used by the controller being selected based upon the

sensed exhaust gas temperature.

[188] Evidently, there are two different ideas captured by the two clauses: first there is the

requirement that there be more than one ignition pattern; there cannot be a selection of a pattern

without having more than one from which to select. Second, the selection of the ignition pattern

will be done on the basis of the temperature of the exhaust gas but, once again, it is a pattern that

will be selected on the basis of exhaust gas temperature, nothing else. With great respect, the

contention of AC according to which “the phrase in the claims of the 738 Patent means that the

sensed exhaust gas temperature must be a factor in the selection of which ignition point is used at

a given engine speed” is only accurate if is included the intermediate step of the selection of the

ignition pattern. It is true that, ultimately, the ignition point will reflect sensed exhaust gas

temperature. However, what is neglected is the fact that it is because the ignition pattern, from

which the ignition point is drawn, that it can be said that temperature is a factor in the selection

of the ignition point. It is fundamental to the 738 Patent that the ignition point be drawn from an

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ignition pattern composed of more than one ignition point. The 738 Patent’s logic requires that

ignition patterns be available for selection on the basis of the exhaust gas temperature. The

Patent is silent as to whether the pattern will stay in place until another one will replace it when

different gas temperature has been sensed. However, that would appear to be implied.

Inexorably, many different ignition points would be activated from the same ignition pattern,

varying with the engine speed variations, until a new ignition pattern is put to contribution for

different temperatures.

E.

The different ignition patterns having different relationships between ignition point and

engine speed.

[189] Once again, the three selection claims have basically that same clause. This phrase

appears to be self-explanatory. The different ignition patterns must have different rapports

between ignition point and engine speed: otherwise, there is no difference between ignition

patterns, they are the same.

[190] In its written submissions, AC argues that this phrase must have a different meaning from

a phrase found in the same claims which is referred to as “ignition point varying with engine

speed or throttle position” (AC’s memorandum of fact and law, para 106) and seems to suggest

that “step changes” in ignition patterns might somehow pose a challenge. Basically, the so-called

“step changes” occur where the shape of the ignition curve or pattern does not change. The

ignition curve simply moves up and down. An illustration is found at P-37:

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[191] Counsel wrote at paragraph 108:

When the shape of the ignition pattern does not change, i.e. the

values of the ignition timing have a consistent change with engine

speed, the magnitude of the values may be different but the

relationships are not, i.e. a so-called step change in ignition

patterns. This would be different ignition patterns but does not

constitute ignition patterns having different relationships between

ignition point and engine speed.

Counsel is right to say that the two phrases must mean something different. And they do. It

seems to me that the two phrases address fundamentally different issues. The phrase under

review is straight forward: it requires that ignition patterns be different. The other one deals with

something different. It does not compare ignition patterns, but rather it addresses the

characteristics of one ignition pattern. The complete clause must be read, not only a few words.

Here the complete clause reads “… an ignition pattern in which one ignition point during the

compression movement varies with operation speed of the engine [and the throttle position of the

engine]”.

Page: 84

[192] Basically, the invention states that the ignition point in an ignition pattern varies with

RPMs and throttle position. That is not a startling proposition. If the point does not vary with

engine speed and throttle position there is only one point for every RPM. It is not different from

what is disclosed in the specification. Thus, ignition points vary with engine speed and throttle

position in order to have more than one ignition point, the very nature of an ignition pattern.

[193] The phrase under review is not concerned with the ignition points in one ignition pattern.

Instead, the phrase is simply there to specify what constitutes different ignition patterns given

that one must be selected out of a plurality of patterns based on temperature of the exhaust gas.

[194] I fail to see how the step change in ignition patterns would not meet the test of the phrase

under consideration. It suffices that the ignition points be different between ignition patterns, or

curves, to have different relationships. There is certainly a different relationship between ignition

point and engine speed between the curves on P-37 reproduced at paragraph 190. Thus, for

instance, one curve at P-37 has 10º before top dead center at 3000 RPMs while it has 20 º on

another curve at 3000 RPMs. That is a different relationship between the two, one being 10º

before top dead center at 3000 RPMs and the other one being 20º before top dead center at 3000

RPMs. That is all that is required by that phrase. The relationship between ignition point and

engine speed, 10º before top dead center at 3000 RPMs and 20º before top dead center at 3000

RPMs, is manifestly different. What is required is that the patterns have different relationships

between each other. These patterns have different relationships between ignition point and

engine speed. That serves the purposive construction of claims as the inventor was merely

signalling that there must be a difference between patterns. At any rate, the Plaintiffs chose not to

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pursue the matter of the step change in ignition patterns during their oral submissions. It is less

than clear what argument the inventor was trying to derive from its own Patent by limiting the

kinds of differences that justify satisfying the requirement of a plurality of ignition patterns.

Actually, Mr. Spaulding testified about pattern shifts (see para 69, supra). Surely, an ignition

pattern modified by 2º, for whatever reason, would be a different pattern. Nothing in the 738

Patent suggests otherwise.

F.

The ignition pattern being selected from a plurality of different basic ignition patterns.

(Claims 11 and 16)

[195] There are two asserted claims (claims 11 and 16) that refer to a basic ignition pattern

being modified on the basis of the temperature of the exhaust gas temperature.

[196] There is in fact only one issue that differentiates the selection claims from the

modification claim. In both cases, the activating of the ignition source is done according to an

ignition pattern in which an ignition point varies with the operation speed of the engine.

However, as the selection claims were operating on the basis of an ignition pattern being selected

from a plurality of ignition patterns based on the temperature of the exhaust gas, the ignition

pattern in claims 11 and 16 is the result of a basic ignition pattern being selected from a plurality

of basic ignition patterns, but modified based on exhaust gas temperature. Put simply, in one case

one ignition pattern is selected from a plurality of ignition patterns on the basis of gas

temperature while, in the other, a basic ignition pattern is chosen from a plurality of basic

ignition patterns, on a basis that is left unsaid, but the selected basic ignition pattern is then

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modified based on exhaust gas temperature. But, it is the basic ignition pattern that is modified

based on exhaust gas temperature, nothing else.

[197] The same comments made earlier about “plurality” apply equally to claims 11 and 16.

There is not an infinite number of basic ignition patterns, just a plurality. Equally true is that

there is more than one basic ignition pattern. The focus is rather on what is the construction to

put on “basic ignition pattern”.

[198] There is common ground as to what is meant by “basic ignition patterns”: it is referring to

the patterns that are in existence, before they are modified. At page 2987 of the transcript ,

Dr. Checkel describes what is being modified:

The witness: I guess the biggest description change is that we

now have a plurality of basic ignition patterns. So, we’ve selected

already some sort of basic ignition pattern without knowing about

exhaust gas temperature. And now, we’re making a modification to

the ignition curve or ignition map based on exhaust gas

temperature.

And if I was calibrating the engine, I would say, okay, here is my

base map, what am I going to do when I sense exhaust gas

temperature. I will typically have something in another table with

exhaust gas temperature which I add to it. So in the end, we have

got a basic pattern that we’ve selected, one of them, and now we

are making a modification using exhaust gas temperature. So I will

produce some sort of a table of offsets for exhaust gas temperature

or some sort of map.

The basic ignition patterns (there is a plurality of them) are the initial patterns. Because they will

be modified and do not constitute the ignition pattern that will eventually be in use, the inventor

chose, presumably, to qualify the ignition pattern by adding the word “basic”. The word helps

differentiate what we start with, the basic ignition pattern, from what is being used to activate the

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ignition source. What is important to note is that it is the pattern that is modified. That implies

that the various combinations of ignition timings and engine speeds, or some of them, that form

an ignition pattern, are modified before there will be the activation of the ignition source

according to that new pattern resulting from the modification (using the exhaust gas temperature)

of the selected basic ignition pattern.

[199] The logic of claims 11 and 16 is rather straight forward. First, there are different basic

ignition patterns: the claims teach the Posita that there is a plurality of them. Second, the

activation of the ignition source is done according to an ignition pattern as is the case with the

other asserted claims: evidently, the ignition pattern used to activate the ignition source is not the

basic ignition pattern. Third, this is confirmed by the claims stating that “the basic ignition

pattern used by the controller is being modified based upon the sensed exhaust gas temperature”;

the basic ignition pattern becomes the ignition pattern according to which the ignition point is

activated once the pattern has been modified based on the exhaust gas temperature. That is what

the Patent is teaching. If other changes are made once the basic ignition pattern has been selected

and modified based on exhaust gas temperature, these are not taught by the Patent.

G.

The basic ignition pattern used by the controller being modified based upon the sensed

exhaust gas temperature. (Claims 11 and 16)

[200] As seen in the preceding paragraph, it is the basic ignition pattern that is modified in

order to get to the pattern according to which the activation will take place. The ignition point is

taken by the controller once the basic ignition pattern has been selected from a plurality of basic

ignition patterns, and the chosen basic ignition pattern has been modified. That would appear to

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exclude the possibility that there be further changes to the basic ignition pattern once it has been

selected from a plurality of basic ignition patterns. It has been suggested by AC that it merely

“provides an initial approximation for the ignition timing, from which the final value for ignition

timing can be arrived at by making modifications or calculations” (AC’s memorandum of facts

and law, para 92). The Patent is silent concerning the elements that may end up constituting the

basic ignition patterns. Modifications or calculations may well be made in the creation of basic

ignition patterns to account for different issues. But it is overstating the case to suggest that the

plurality of basic ignition patterns are merely an initial approximation for the ignition timing.

The Patent requires that there be a plurality of these basic ignition patterns from which one will

be selected on the basis of factors that are unknown. The final value for ignition timing will not

come from the basic ignition pattern: it will come from the ignition pattern that emerges from the

modifications to the basic ignition pattern based on the sensed exhaust gas temperature. It is the

various combinations of ignition timings and engines speeds that form the basic ignition pattern

that has been selected, which are then modified to become a new combination of timings and

engine speeds. Once the basic ignition pattern has been selected, it is not an initial

approximation. All that is needed is for the pattern to be modified based on exhaust gas

temperature. That is what the Patent is teaching. If other changes are made to the pattern once the

basic ignition pattern has been selected and modified based on exhaust gas temperature, these are

not taught by this Patent.

[201] The language of claims 11 and 16 may be convoluted. If there is some ambiguity as to

what is meant by modification, the specification may help confirm that it is the “basic” ignition

pattern that is modified using the exhaust gas temperature, not an ignition point:

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It also is possible to use the sensed temperature readings to modify

a particular timing pattern that can be selected from a plurality of

patterns. For example, the user may be able to select a timing

pattern from a plurality of timing patterns using a switch or the

like, and the sensed temperature readings can be used to modify

the selected patterns appropriately. [p 5]

It is an ignition pattern that emerges from the modification made on the basis of the sensed gas

temperature, not ignition timing. The ignition timing will come from that modified ignition

pattern when the controller activates the ignition source. Claims 11 and 16 are making it clear

that the ignition pattern, just before the modification using gas temperature, is the basic ignition

pattern.

[202] The Patent is not concerned with the importance, the magnitude, of the changes to the

basic ignition timing. It is concerned however with the logic that operates. In claims 11 and 16,

as in the other asserted claims, the logic goes through the ignition patterns from which one

ignition point will emerge. It is true that the selected basic ignition pattern can be modified

through a change to one single point, as argued by AC. Indeed, basic ignition patterns may differ

only slightly. That, however, simply means that there are different basic ignition patterns helping

constitute the plurality of such patterns.

[203] In essence, the difference between the selection claims (40, 33 and 47) and the

modification claims (11 and 16) is the use that is made of the gas temperature. While the gas

temperature is used to select the ignition pattern according to which the activation source will be

operating in three claims, the gas temperature can also be used to modify the basic ignition

pattern according to which the ignition source will be activated. In both sets of claims, the

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activation of the ignition source is made according to an ignition pattern. And an ignition pattern

is never a single ignition point. It will be found in the ignition pattern.

[204] Similarly, AC is right that claims 11 and 16 do not limit the factors to be used on the

selection of the basic ignition pattern from the plurality of the basic ignition patterns. In fact, it

does not matter. However, when one is selected, the basic ignition pattern selected is modified

based upon the sensed exhaust gas temperature. It is that basic ignition pattern modified based

upon sensed exhaust gas temperature that becomes the ignition pattern according to which is

activated by the controller the ignition source.

[205] The posture taken by the Plaintiffs throughout the trial has been largely to react to the

positions adopted by the Defendant, in spite of the fact that AC has the burden of convincing the

Court that its construction of the claims and its allegation of infringement of its Patent are

preferable. That was particularly the case in the construction of its own claims. One would have

thought that the Plaintiffs had a general theory of what their Patent is doing and what their claims

are accomplishing.

[206] Nevertheless, what emerges from the construction of the claims is a recurring theme. The

ignition pattern is always composed of more than one ignition point. There is always one ignition

pattern that emerges from a plurality of ignition patterns. In the case of the modification claims,

it will be basic ignition patterns from which one will be selected; once selected, the basic pattern

is modified based on exhaust gas temperature. In the case of the selection claims, one of a

plurality of ignition patterns will be selected on the basis of the exhaust gas temperature. The gas

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temperature operates ex ante, i.e. before the ignition pattern is put to contribution; in both cases,

the claims refer to one ignition pattern being available for the ignition of the fuel-air mixture.

Given that the ignition pattern must be composed of more than one ignition point, the claims

provide that the activation of the ignition source by the controller will be performed according to

the ignition pattern that has been selected or modified. For various engine speeds will correspond

various ignition timings (in three-dimensional ignition systems will be added, a third variable,

the throttle position), these various combinations forming a particular ignition pattern. Evidently,

the controller will have to select the appropriate ignition point for a particular engine speed.

IX.

Infringement

[207] The Plaintiffs in the case contend that the Defendant violated, and continues to violate,

some claims of its Canadian Patent bearing No 2,322,738 (the 738 Patent).

[208] For the reasons that follow, I find that the asserted claims, once properly construed, have

not been infringed by BRP. If one of the claims has been found to have been infringed because

of a different construction put on that claim, I would find that the claim thus constructed would

be invalid by reason of obviousness.

[209] Section 27 of the Patent Act makes it plain that the claims must define “distinctly and in

explicit terms the subject-matter of the invention” for which a monopoly is claimed for 20 years.

The specification serves a purpose in that it must correctly and fully describe the invention and

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its operation or use. The specification must also explain the principle of the machine together

with “the best mode in which the inventor has contemplated the application of that principle”.

[210] Once has been deciphered out of the morass of words that constitutes the 738 Patent what

the inventor purports to call an invention, it will be possible to compare it to the logic of the

engines used by BRP and decide whether or not there is infringement.

[211] AC will prevail if any of its five asserted claims is ruled valid. Section 58 of the Patent

Act says that much:

When, in any action or

Lorsque, dans une action ou

proceeding respecting a patent procédure relative à un brevet

that contains two or more

claims, one or more of those

qui renferme deux ou plusieurs

revendications, une ou

claims is or are held to be valid plusieurs de ces revendications

but another or others is or are

held to be invalid or void,

effect shall be given to the

patent as if it contained only

the valid claim or claims.

sont tenues pour valides, mais

qu’une autre ou d’autres sont

tenues pour invalides ou

nulles, il est donné effet au

brevet tout comme s’il ne

renfermait que la ou les

revendications valides.

(See also Teva Canada Ltd v Pfizer Canada Inc, 2012 SCC 60 at para 47, [2012] 3 SCR 625)

[212] If it is sufficient that only one claim be ruled valid for AC to prevail, the Plaintiffs must

show on the other hand that BRP’s engines include all of the essential elements of the asserted

claims. In Free World Trust, above, the Court could not have been any clearer:

31

The appeal thus raises the fundamental issue of how best to

resolve the tension between “literal infringement” and “substantive

infringement” to achieve a fair and predictable result. There has

been considerable discussion of this issue in Canada and

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elsewhere, which I will discuss briefly in support of the following

propositions:

…

(f) There is no infringement if an essential element is different or

omitted. There may still be infringement, however, if non-essential

elements are substituted or omitted.

[213] The burden of proving infringement is of course on the shoulders of the Plaintiffs

(Monsanto Canada Inc v Schmeiser, 2004 SCC 34 at para 29, [2004] 1 SCR 902). Thus, to

summarize, AC must show on a balance of probabilities that every essential element of at least

one asserted claim has been infringed, that is that BRP has put into practice the invention.

[214] In this case and on this record, AC has failed its burden. The 738 Patent has not been

infringed because essential elements of the claims are missing.

[215] There is no doubt that BRP was aware of the existence of the Patent-in-suit. Indeed, it

took significant steps to avoid infringing the AC patent. That is not, of course, dispositive of the

issue as it is certainly possible to infringe on a patent inadvertently. However, such is not the

case here.

[216] Once properly constructed, the claims all turn on the use of ignition patterns. Ignition

patterns are central to each of the five claims. In every one of the five asserted claims, the

controller is activating the ignition source according to an ignition pattern. That ignition pattern

must be constituted by more than one combination of ignition timings and particular engine

speeds, and one of those combinations will be chosen to be ignited. It does not matter that the

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claim is one presented as a modification claim (11 and 16), or selection claim (33(28), 40(34)

and 47(41)), each one requires that the ignition point be taken from an ignition pattern that

comprises more than an ignition point.

[217] The difference between the two types of claims comes from the manner in which one

arrives at the ignition pattern from which the ignition point will be taken. In the case of the so-

called “selection claims”, will be chosen from a plurality of ignition patterns the one ignition

pattern that will correspond to the temperature of the exhaust gas at that moment. The exhaust

gas temperature is used to select the ignition pattern that will be deemed to be appropriate. The

Patent simply states that the purpose is to provide optimum operation of the engine by using the

optimum ignition timing. The “modification claims” stipulate that a basic ignition pattern is

selected from a plurality of basic ignition patterns; that selected basic ignition pattern is then

modified based on the sensed exhaust gas temperature to become the ignition pattern. The

ignition source, in both the “selection claims” and the “modification claims”, is then activated by

the controller according to that ignition pattern. One ignition point is taken from “the various

combinations of ignition timings and particular engines speeds” that “form a particular ignition

pattern” (738 Patent, p 3).

[218] This case is concerned with the ignition control logic found on two BRP semi-direct

injection engines, namely the 440HO and 600RS models, and two BRP direct injection engines,

namely the 600ETEC and 800ETEC models. These are the engines AC considers as infringing

its Patent.

Page: 95

[219] All four engines share a number of similar features. Chief among them is the

incorporation of an exhaust gas temperature sensor used as an input to adjust ignition timing. The

basic outline of their engine control logic is substantially the same, and whatever differences

there may be has no bearing on the case.

[220] In all cases, the engine control unit begins by selecting an ignition table based on factors

other than sensed exhaust gas temperature. It then extracts a single point from the chosen table,

to which it applies a correction value based on a number of factors that may include sensed

exhaust gas temperature. After the engine control unit adds the correction value to the point

extracted from the ignition table, to reach the final value, it triggers the spark plug.

[221] There are even greater similarities in the manner the engine control unit carries out this

process in the 440HO and 600RS models, (Transcript, Bruno Schuehmacher at 835:1-17) and the

600ETEC and 800ETEC models (Transcript, Bruno Schuehmacher at 887:24-888:4)

respectively. BRP has thus chosen to group these models into two separate categories, and Arctic

Cat for its part does not stray very far from this classification scheme. As such, I will begin by

outlining the specific engine control logic used in the 440HO and 600RS semi-direct injection

engines, before turning to the common logic shared by the 600ETEC and 800ETEC direct

injection models.

Page: 96

A.

The 440 HO and 600 RS engines

[222] As stated above, the 440HO and 600RS engines use substantially similar engine control

logic. In both cases, the engine control unit is programmed with four distinct base ignition tables

(i.e. maps) for use during different engine operating conditions. These correspond to premium

fuel, racing fuel, transient conditions, and conditions with a preheat function, respectively

(Transcript, Bruno Schuehmacher at 838:22-839:12; CADET Report, BRPE-136, P-15).

However, one of these four tables was never implemented in the 440HO engine, such that the

engine is effectively programmed with only three separate tables.

[223] With respect to the 440HO and 600RS engines, the engine control unit begins by

selecting one of these four base maps based on a preheat switch and fuel quality; the exhaust

temperature does not figure in that decision (Transcript, Bruno Schuehmacher, at pages

814:17-816:19, 819:15-23, 828:11-18; Bower Infringement Report, D-45 at para 53, 88-89; BRP

04068 Racing MY2006 Software Description Rev01, P-14 at 31, 47-50; CADET Report, BRPE-

136, P-15; CADET Report, BRPE-1119, D-11). After selecting a base map, the engine control in

both engines extracts a single numerical value (i.e. point) from that map, according to engine

speed and throttle position (Transcript, Bruno Schuehmacher, at pages 828:20-22, 834:18-835:8).

[224] Next, the engine control unit applies various correction values to the point so extracted

from the map (Transcript, Bruno Schuehmacher at pages 828:22-829-1, 835:5-17; Bower

Infringement Report, D-45 at paras 54-56). These values are calculated in the same way in both

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the 440HO and 600RS models, and are based on factors such as altitude, engine “knock”, and

exhaust gas temperature, according to the formula:

(A or B or C or D) + E + F + G +H + J + K*L

(Transcript, Bruno Schuehmacher at pages 814:17-815:14,

822:1-823:18, 824:28-828:3; Racing MY2006 Software P2

(Mandate), BRPE-0215, D-9, “Ignition” at 4).

In this formula, A, B C and D are the values extracted from the base maps; E, F, G, H and J are

corrections applied to the value extracted from A, B, C or D. “K” corresponds to the ignition

timing correction for “Tuned Pipe Temperature”, and is the only sensor input based on exhaust

gas temperature (Transcript, Bruno Schuehmacher, at pages 827:8-828:3; Racing MY2006

Software P2 (Mandate), BRPE-0215, D-9, “Ignition” at 3, 7). Once the engine control unit has

added all applicable correction values to the extracted point, it triggers the spark plug according

to the final value.

[225] The engine control unit repeats this whole process several times per second. However,

the base maps remain unmodified, as they are saved unchanged in the engine control unit’s read-

only memory.

B.

The 600 ETEC and 800 ETEC Engines

[226] The control logic of the 600 ETEC and 800 ETEC engines is substantially the same, with

the main exception that the 800 ETEC selects between one of two separate dynamic correction

tables based on altitude (Transcript, Bruno Schuehmacher at pages 914:21-915:2).Other

differences between both engines are the addition of a second exhaust gas temperature sensor

Page: 98

located in the tuned pipe of the 800 ETEC Summit and Back Country models, as well as the

operational voltage of the fuel injectors. These features have no bearing on this case as they have

no effect on the logic.

[227] Both the 600 ETEC and 800 ETEC engines use an engine control unit programmed in a

similar manner to the 440HO and 600RS models. Both contain four base maps, which

correspond to low-octane/low-altitude, high-octane/low-altitude, low-octane/high-altitude, and

high-octane/high-altitude, respectively (Transcript, Bruno Schuehmacher at pages 896:22-

898:22; EGT Sensor Ignition Correction Maps Structure – 600/800 MXZ ETEC 2011 & 800

Summit, P-10; Bower Infringement Report, D-45 at paras 77-78, Figure 24).

[228] As in the 440HO and 600RS engines, the engine control unit in the ETEC engines is

programmed to first select from among these four base maps, this time according to fuel quality

and altitude (Transcript, Bruno Schuehmacher at pages 922:3-923:2; Bower Infringement

Report, D-45 at paras 97-103, 106; BRP Demonstrative, D-49). Exhaust gas temperature again

plays no part at this stage. The engine control unit then extracts a single point from that map

based on engine speed (and throttle position) in both the 600ETEC and 800ETEC models

(Transcript, Bruno Schuehmacher at pages 899:21-26 and at pages 923:3-923:8).

[229] Next, the engine control unit is programmed to apply corrections values to the extracted

point that correspond to a number of factors. Unlike the 440HO and 600RS engines, however,

these factors do not always include sensed exhaust gas temperature. Rather, the engine control

unit is only programmed to apply such a correction if the throttle is open beyond a certain level

Page: 99

(either 70% or 80%, depending on the engine), and if the engine is operating at high speeds

(Transcript, Bruno Schuehmacher, at pages 908:19-910:7). In any event, once the engine control

unit has determined the full set of correction values, it adds them to the extracted point and uses

the final value obtained to trigger the spark plug.

[230] As before, the engine control unit repeats this entire process several times per second.

The four base maps remain unmodified once again, as they are stored in the control unit’s read-

only memory.

C.

Analysis

[231] It is uncontroversial that BRP wished to use the temperature of the exhaust gas of its

snowmobiles to be factored in arriving at the combination of ignition timing and engine speed

that will be deemed optimal for the engine of its snowmobiles. It is also clear, in my view, that

BRP does not resort to ignition patterns in the way the 738 Patent teaches. To put it bluntly, BRP

does not select an ignition pattern based on exhaust gas temperature and it does not modify an

ignition pattern based on exhaust gas temperature. The exhaust gas temperature is used in the

BRP engines once the ignition point is extracted. It is the ignition point that is corrected by the

use of exhaust gas temperature. It is always the ignition point which has been extracted that is

corrected, as opposed to the 738 Patent where the whole pattern is either selected based on

exhaust gas temperature, or the basic ignition pattern is turned into the ignition pattern once the

ignition pattern has been modified based on the gas temperature. It is out of the pattern selected

Page: 100

based on exhaust gas temperature or modified based on gas temperature that an ignition point

will emerge according to the 738 Patent. Not so with respect to the BRP engines.

[232] Two essential elements of the asserted claims are critical to the resolution of this matter.

First, before the controller can activate the ignition source, according to an ignition pattern, it is

the ignition pattern as a whole that is selected or modified. In both cases, it is at that stage, before

there can be the activation of the source, that the sensed exhaust gas temperature is used. Put

bluntly, the 738 Patent states that the effect of the exhaust gas temperature is on ignition patterns,

not the ignition point. Second, because an ignition pattern must always be composed of more

than one ignition point, the controller will have to activate the ignition source by choosing

between more than one ignition point.

[233] Is also relevant to the analysis the fact that the ignition patterns must be different and

their number cannot be infinite. Similarly, the ignition points in one pattern cannot be all

identical in that ignition points vary with operation speed (and throttle position). The Patent

makes it impossible that there be one pattern composed of one ignition point.

[234] BRP operates its accused engines in a manner very different than the invention. The

evidence of Bruno Schuehmacher is clear and it has not been challenged to any extent at trial;

furthermore, AC did not offer evidence of its own that could be seen as disputing the control

logic of the BRP engines.

Page: 101

[235] In essence, BRP uses base maps from which one ignition point will be selected. In the

case of the 440 HO and 600 RS accused engines, the base maps refer to the operating conditions

of the engines (racing fuel, premium fuel and preheat). The 600 E-TEC and 800 E-TEC accused

engines use four different base maps (low-octane/low-altitude, high-octane/high-altitude, low-

octane/high altitude, high-octane/low-altitude). These maps are selected on the basis of

conditions that have nothing to do with the exhaust gas temperature. There is no selection of a

map based on exhaust gas temperature. It is rather the type of fuel and the altitude that are the

controlling factors, together with the possibility of using a map that corresponds to a time when

the engine is pre-heating with respect to the 440 HO and the 600 RS engines. There is not either

a base map that is modified based on exhaust gas temperature. The base maps in the BRP logic

remain the same; they do not change.

[236] On the basis of the selected base maps, the BRP engines extract one combination of

ignition timing and engine speed, the ignition point that corresponds to the engine speed in the

selected base map. That point, and that point only, will be the subject of corrections. One of

those corrections to the extracted ignition point will be based on the sensed exhaust gas

temperature. However, that correction will occur with respect to the 600 E-TEC and the 800 E-

TEC only when the throttle is open beyond a certain level (>70%), which will generate high

speeds.

[237] The ignition point extracted from the base map is corrected and it is only once the

correction of that one point has been completed that the controller activates the ignition source.

Page: 102

[238] As can be seen, the BRP engines do not have a controller that activates the ignition

source once an ignition pattern has been selected or a basic ignition pattern has been modified to

become an ignition pattern. It is essential to the 738 Patent that the ignition source be activated

according to an ignition pattern, selected or modified based on exhaust gas temperature, which

must have more than one ignition point. The BRP control logic extracts the ignition point much

earlier in the process and then corrects it, using the sensed gas temperature, among a number of

possible corrections.

[239] Furthermore, the use of the sensed exhaust gas temperature is different. As already seen,

BRP adjusts the ignition point as a function of the gas temperature: it is the ignition point that is

adjusted on the basis of the exhaust gas temperature. AC, on the other hand, uses the exhaust gas

temperature for a different purpose. In the case of the selection claims, the ignition pattern that

will be used is selected from a plurality of different ignition patterns on the basis of the sensed

gas temperature. It is the combination of ignition points that is selected, not a particular point that

is corrected based on the sensed gas temperature. Similarly, the modification claims see the use

of the exhaust gas temperature to take place with respect to an ignition pattern, not a single point

having been extracted from the ignition pattern. The basic ignition pattern is modified using the

sensed exhaust gas temperature in order to become the ignition pattern from which an ignition

point will be taken.

[240] AC argued that BRP’s base maps are in fact identical to its basic ignition patterns in the

two modification claims. In my view, nothing rides on that controversy. Assuming that the base

maps of one are the basic ignition patterns of the other, it remains that it is the selected basic

Page: 103

ignition pattern as a whole that is modified based on the exhaust gas temperature, not one

ignition point extracted from the selected basic ignition pattern (or the selected base map).

[241] Furthermore, contrary to what is asserted at paragraph 118 of AC’s memorandum of facts

and law, the 738 Patent specifies that the activating of the ignition source is according to an

ignition pattern that has been either selected from other ignition patterns based on gas

temperature, or is the result of modifications based on the gas temperature to a basic ignition

pattern (which has been selected from a plurality of basic ignition patterns). Instead, AC suggests

that it suffices that an ignition pattern be used; presumably the suggestion is put forth to create

the impression that, as long as there is an ignition pattern used somewhere in the process, that

will be enough to satisfy the requirement that the activating of the ignition source is according to

an ignition pattern.

[242] Such suggestion, or argument, ignores the meaning of the word “according” (“as stated

by”, “in a manner corresponding to” as defined in the Oxford Canadian Dictionary, Oxford

University Press Canada, 2001) and, more importantly, it does not accord with the very structure

of the claims and the disclosure of the Patent. The activating of the ignition source will have to

be according to the ignition pattern left following its selection based on temperature or the

modification of the selected basic pattern also based on temperature which comprises more than

one ignition point. To put it simply, the controller must select one ignition point after the pattern

from which it will be taken has been selected or modified on the basis of the temperature of the

gas. On the contrary, the control logic of the BRP engines rests on the activating of the ignition

source of the point which will have been corrected: the base map (or ignition pattern) is never

Page: 104

corrected or modified based on exhaust gas temperature. The BRP engines do not operate with

the controller activating the ignition source according to an ignition pattern by finding one point

out of many. The base maps are neither selected nor modified based on the exhaust gas

temperature. Only the one ignition point taken from a base map is modified. BRP is not

activating the ignition source according to an ignition pattern, but rather according to an ignition

value that has been corrected based on the gas temperature.

[243] It was suggested, without providing much clarity, that there is no real difference between

the control logic of the 738 Patent and the BRP accused engine because, in the end, the same

result is attained. The Court declines to follow such an argument. The humorous epigram about

bald men in Free World Trust, above, seems to me to dispose of that type of argument:

32

Based on the foregoing principles, I conclude that the

appellant's arguments must be rejected. As stated, the ingenuity of

the patent lies not in the identification of a desirable result but in

teaching one particular means to achieve it. The claims cannot be

stretched to allow the patentee to monopolize anything that

achieves the desirable result. It is not legitimate, for example, to

obtain a patent for a particular method that grows hair on bald men

and thereafter claim that anything that grows hair on bald men

infringes. I turn then to the first of the propositions listed above.

[My emphasis]

The language of the claims leads to one conclusion. The 738 Patent is not only about the sensed

exhaust gas temperature being used to arrive at an optimum ignition point. Is central to the Patent

that it is the ignition pattern, not an ignition point, that is either selected or modified using

exhaust gas temperature. This is not a minor or inconsequential device and it provides a measure

of precision and certainty. As already noted, BRP was aware of the existence of the 738 Patent. It

is impossible, in my view, to give a purposive construction of the words of the claims without

Page: 105

recognizing the centrality of the “ignition pattern”. As Pratte J. wrote in Eli Lilly & Co v O'Hara

Manufacturing Ltd (1989), 26 CPR (3d) 1 (CA):

A Court must interpret the claims; it cannot redraft them. When an

inventor has clearly stated in the claims that he considered a

requirement as essential to his invention, a Court cannot decide

otherwise for the sole reason that he was mistaken.

The same concern found echo in Free World Trust, above:

49

… The involvement in claims construction of the skilled

addressee holds out to the patentee the comfort that the claims will

be read in light of the knowledge provided to the court by expert

evidence on the technical meaning of the terms and concepts used

in the claims. The words chosen by the inventor will be read in the

sense the inventor is presumed to have intended, and in a way that

is sympathetic to accomplishment of the inventor's purpose

expressed or implicit in the text of the claims. However, if the

inventor has misspoken or otherwise created an unnecessary or

troublesome limitation in the claims, it is a self-inflicted wound.

[My emphasis]

[244] The testimony of the inventor and the specification of the 738 Patent all point firmly to

the importance of the ignition patterns. That cannot be ignored. Indeed, the asserted claims are

perfectly in line with the specifications.

[245] The requirement in the claims that the ignition source be activated according to the

ignition pattern emerging from the selection or modification based on exhaust gas temperature is

reflected not only in the Patent’s title (Two-cycle Engine with Exhaust Temperature-Controlled

Ignitions Timing), but also in the specification (“[t]he controller then selects an ignition pattern

based on the exhaust gas temperature information. The selected pattern then is used to control the

ignition advance based on the engine operating speed.” (p 4, lines 23 to 25)).

Page: 106

[246] There is nothing that I have been able to find in the 738 Patent to show that an ignition

pattern can be a single ignition point or that it allows for an ignition point to be extracted before

the ignition pattern has been either selected or modified based on exhaust gas temperature. The

Patent unequivocally speaks of patterns selected or modified. The difference between the Patent

and what is practiced by BRP is not only one of degrees but one of nature. The Patent operates

on the basis of ignition patterns while BRP extracts an ignition point early in the process.

[247] Fundamentally, once one reckons that a pattern must always have more than one ignition

point, and that the activation of the ignition source is done according to that pattern (“used to

control the ignition advance based on the engine operating speed”), it is easy to see the distance

with the BRP engines that extract one ignition point, not a pattern, that is then corrected. No

pattern is selected or modified based on gas temperature and the ignition point is not selected

from an ignition pattern selected or modified based on exhaust gas temperature.

[248] Accordingly, the Court must conclude that the five asserted claims have not been

infringed.

X.

Invalidity

[249] If I am wrong in the conclusion that the 738 Patent has not been infringed in the case at

bar, I would have to consider if the 738 Patent is valid. BRP claims it is not. Given the

considerable effort that was expended at trial, a short examination of the issue might be of

assistance.

Page: 107

[250] BRP carries the burden of convincing the Court, on a balance of probabilities, that the

738 Patent is invalid (Whirlpool Corp v Camco Inc, 2000 SCC 67 at para 75, [2000] 2 SCR

1067). Here, BRP advanced the grounds of anticipation and obviousness in asserting that the

Patent-in-suit is invalid.

[251] In order to have to examine the arguments about the validity of the 738 Patent, it would

have to be, as contended by BRP, that the Court has been wrong in its conclusion that the term

“ignition pattern” requires that there be more than one combination of ignition timing and

particular engine speed. In other words, an ignition pattern could be composed of only one such

combination. Earlier Dr. Checkel, the expert retained by AC, was reluctant to engage on the use

that is made of the ignition pattern.

[252] In his ultimate oral submission to the Court, counsel for AC argued that the person skilled

in the art “knows is what values I’m getting out at the other end. That’s what matters to the

skilled person” (Transcript, February 2, 2016, p 225: 4 to 6). Counsel went on to argue that the

patent allows for an equation that will produce an ignition point for a given RPM at a particular

exhaust gas temperature:

And I disagree that the definition is only for a single patent

(pattern). The definition if you accept what I say that an equation is

a definition, you can put in different values and you always get to

the same place. You always get to the same defined value. That is

a defined relationship of two variables. If I input my temperature I

have a defined relationship across my engine speed. I have it

defined by my equation. It doesn’t have to be laid out like this.

(Transcript, February 2, pp 226-227)

Page: 108

[253] As I understand it, the position that has finally emerged is that the 738 Patent allows for

ignition patterns to be the result of an equation, what has been referred to as the “virtual

relationships”. That ignition pattern, the defined relationship of two variables, sees the

temperature being inputted; there is a contribution of information such that an ignition point is

activated by the ignition source. As counsel for AC asserted:

MR. CRINSON: Let me try to persuade you to look at it --

JUSTICE ROY: By all means

MR. CRINSON: -- look at it from, again, from the point of

view of the person skilled in the art.

If the proposition is that you fire or ignite the engine –

using a whole ignition pattern, that’s what the proposition is. The

person skilled in the art knows that’s not what happens and knows

that’s never what happens.

Because a person skilled in the art knows that you always

use a single value frame. You can’t fire at all the of the ignition

timing values. You can’t.

The person skilled in the art knows that for each engine

cycle there’s a single ignition point. That’s what a person skilled in

the art knows, but when you look at a – the pattern –patent, sorry.

(Transcript, February 2, 2016, p 229)

[254] It is somewhat ironic that AC would have in my view to use a different Posita than the

one it has defined for the Court to make the argument. Be that as it may, the person skilled in the

art can certainly assist in reading a patent, but he cannot substitute words or concepts. The Patent

says what it says and, in this case, there must be a plurality, not an infinity, of ignition patterns or

a plurality of basic ignition patterns from which an ignition pattern, composed of more than one

ignition point, will emerge; furthermore, it is the pattern that is selected based on the exhaust gas

temperature, or it is the basic ignition pattern that is modified based on the exhaust gas

Page: 109

temperature. It is only once the ignition pattern has been selected, or the selected ignition pattern

has been modified, based on exhaust gas temperature, that the controller will activate the ignition

source. Clearly, the controller will activate the ignition source according to the ignition pattern

chosen as a function of the exhaust gas temperature by selecting the point that corresponds to the

ignition timing at a particular RPM. The notion that a whole ignition pattern is ignited was never

part of the 738 Patent. However, the 738 Patent teaches that an ignition point is selected from an

ignition pattern. And, where an ignition pattern would cover a range of temperatures, as indeed

displayed in the 738 Patent, it is likely that many ignition points will be selected from the same

pattern, as the engine speed varies without the temperature reaching a different range. How the

invention is practiced 17 years later, if at all, is unknown. There is actually no hard evidence in

this case that AC is actually practicing its own invention. At any rate, applying today’s

computation capacity to the 738 Patent is inappropriate. I am afraid the Posita “knows is what

values I’m putting out at the other end. That’s what matters to the skilled person” line of

argument runs afoul of the “bald man” analogy (para 243 of these reasons). To quote again from

Free World Trust, “(t)he claims cannot be stretched to monopolize anything that achieves the

desirable result. It is not legitimate, for example, to obtain a patent for a particular method that

grows hair on bald men and thereafter claim that anything that grows hair on bald men

infringes”.

[255] Nevertheless, the question is whether that theory around the 738 Patent proposed by AC

would make it anticipated or obvious in view of at least two prior art documents.

Page: 110

A.

Anticipation

[256] BRP confines its argument on anticipation to two pieces of prior art: a Japanese

application published on June 16, 1989, bearing number 562-310-959 [Application 959] and the

U.S. Patent 5946 908 [U.S. Patent 908].

[257] As I understand the argument, the 959 application would anticipate the three independent

claims that give rise to the dependent selection claims 40, 33 and 47. BRP reckons that the 959

application does not cover the essential element that is part of these three claims, that is that the

engine of the three claims is a snowmobile engine.

[258] BRP relies on U.S. Patent 908 to argue that the modification claims (claims 11 and 16)

are anticipated where the claims are not limited by a dependent claim specific to snowmobiles.

[259] There does not appear to be any disagreement concerning the law of anticipation. The

controlling authority, Apotex Inc v Sanofi-Synthelabo Canada Inc, 2008 SCC 61, [2008] 3 SCR

265 [Sanofi-Synthelabo], requires that there be (1) prior disclosure, that is that “the prior patent

must disclose subject matter which, if performed, would necessarily result in infringement of that

patent” (para 25), and (2) enablement, “which means that the person skilled in the art would have

been able to perform the invention” (para 26), where the person skilled in the art would “be

willing to make trial and error experiments to get it to work.” (para 27).

Page: 111

[260] The 959 Japanese application is a rather difficult document to read, perhaps because of

the translation from Japanese, with the patent applicant being the Suzuki Motor Company, the

same company with whom the inventor, Mr. Greg Spaulding, would have developed what he

considered to be his invention. It was published ten years before the priority date of December

1999, on June 16, 1989.

[261] Application 959 is concerned with the relationship of ignition timing (advance timing

compared to top dead centre) or, as the Application says, to the lag speed of the engine, and

temperature of the exhaust gas temperature. Basically, when the revolutions per minute reach a

higher level, the ignition timing will be advanced based on the exhaust gas temperature.

Based on this configuration, the control circuit 16 controls the

ignition timing of engine 2 to match the standard ignition timing A

based on the engine speed N detected by the tachometer 12 as

shown in Figure 2. In the high speed zone at or above the

prescribed engine speed N, the ignition timing is controlled

according to the exhaust gas temperature state of engine 2 detected

by the exhaust temperature sensor 14 to match timings A¹ ~ A³,

which are further to the lag-side compared to the standard ignition

time A

(Application 959, p 4)

It is clear in my view that the Application is proposing that it is the various combinations of

ignition timings and particular engine speeds that are moved in response to the sensed exhaust

gas temperature; it is the ignition curve, or the ignition pattern, that moves:

So in the high speed zone at or above the prescribed engine speed

N, the ignition timing is controlled according to the exhaust gas

temperature state of engine 2 detected by the exhaust temperature

sensor 14 to match timing A¹ ~ A³, which are further to the lag side

compared to the standard ignition time A. In other words, when at

or above the prescribed engines speed N, the standard ignition is

varied from Aº incrementally to timings A¹ ~ A³, which are further

Page: 112

to the lag side compared to the standard ignition time A, according

to the ignition circuit 18 that causes the ignition plug 6 to fire at the

aforementioned timings A¹ ~ A³, which are further to the lag-side.

(Application 959, p 4)

This is illustrated by figure 2, which is part of the Application:

Although quite rudimentary, figure 2 shows that the ignition curve is moving in accordance with

the temperature of the exhaust gas.

[262] U.S. Patent 908 is also concerned with using the exhaust gas temperature. It provides for

a “control routine” that calls for a basic control signal (the control value) that will come from a

map; that control value comes from a map that is a function of throttle opening and engine speed;

the temperature of the exhaust gas, calculated as the difference between the desired wall

temperature of the exhaust pipe and the actual temperature of the wall, is measured by a sensor;

the logic requires that a corrective map be used to establish the corrective value, which will then

correct the value that had been extracted from the map; the processor, or controller, calculates

the actual timing at which the spark plug should be fired so as to obtain the desired wall

temperature (Patent 908, column 8).

Page: 113

[263] For a reason that remains unknown, BRP argued that Application 959 anticipates the

independent claims, i.e. claims 34, 28 and 41. That may be so, but these are not the claims in

play in this case. The claims asserted are rather claims 40, 33 and 47 as they all require that an

essential element be that the engine is that of a snowmobile. No effort was made to even argue

that the claims in suit are anticipated. It would appear that the real purpose of claiming

anticipation was to argue that it constitutes a solid basis for arguing obviousness. At any rate,

Application 959 does not anticipate any of the asserted claims.

[264] BRP contends that U.S. Patent 908 anticipates the 738 Patent, in case the Court would

have concluded that it teaches the modification of an ignition pattern, the ignition pattern being

understood to be one relationship between ignition timing and engine speed which, in the case of

claims 11 and 16, would be modified based on the sensed exhaust gas temperature.

[265] In my view, the demonstration made by BRP was not convincing enough to conclude on

anticipation. There is a difference between the two that is such that I am not persuaded that there

is anticipation. Claims 11 and 16 require “a sensor for sensing a temperature of exhaust gas” as

the modification of the ignition pattern is “based on sensed exhaust gas temperature”. On the

other hand, the 908 Patent speaks of the difference of temperature between the desired

temperature of the wall of the exhaust pipe and the actual temperature of the wall. I prefer to

consider the matter more fully under the framework for obviousness.

[266] I should note that in an attempt to defend against the BRP argument that the U.S. Patent

908 anticipates the modification claims of the 738 Patent, AC argued that “Dr. Bower opined

Page: 114

that he does not believe the 908 Patent discloses modifying an ignition pattern” (para 150,

memorandum of facts and law). This is not accurate. In the passage referred to by AC, Dr.

Bower says clearly that he “does not believe the 908 and BRP products modify an ignition

pattern. But, if I apply the interpretation that AC must use, then I find that because they’re using

this corrective value, that then they are modifying this base ignition point in the process of

determining the final ignition value”. The witness is steadfast that BRP does not modify an

ignition pattern. Therefore, in his view, there is no infringement. However, assuming that there

would be infringement, it would have to be that “ignition pattern” is given a different meaning:

that meaning would have to be that the basic ignition pattern, to be modified on the basis of the

exhaust gas temperature, would have to be a single ignition point. That would have taken claims

11 and 16 into the realm of U.S. Patent 908 and the engines used by BRP that practice the 908

Patent. Dr. Bower may well be right. That is the basis on which the invalidity argument must be

considered.

B.

Obviousness

[267] In my estimation, the analysis using the obviousness framework is probably more

appropriate in a case where we must assume that the claims should be considered using an

alternate construction from the one already retained by the Court in its infringement analysis. In

other words, what happens when we assume a construction that would avoid a finding of non-

infringement? That construction must assume that the “ignition pattern” can be a single ignition

point. It is section 28.3 of the Patent Act that requires that the subject-matter not be obvious:

28.3 The subject-matter

defined by a claim in an

28.3 L’objet que définit la

revendication d’une demande

Page: 115

application for a patent in

de brevet ne doit pas, à la date

Canada must be subject-matter de la revendication, être

that would not have been

obvious on the claim date to a

person skilled in the art or

science to which it pertains,

having regard to

évident pour une personne

versée dans l’art ou la science

dont relève l’objet, eu égard à

toute communication :

(a) information disclosed more a) qui a été faite, plus d’un an

than one year before the filing avant la date de dépôt de la

date by the applicant, or by a

person who obtained

demande, par le demandeur ou

un tiers ayant obtenu de lui

l’information à cet égard de

façon directe ou autrement, de

manière telle qu’elle est

knowledge, directly or

indirectly, from the applicant

in such a manner that the

information became available

to the public in Canada or

elsewhere; and

devenue accessible au public

au Canada ou ailleurs;

(b) information disclosed

before the claim date by a

person not mentioned in

b) qui a été faite par toute autre

personne avant la date de la

revendication de manière telle

paragraph (a) in such a manner qu’elle est devenue accessible

that the information became

available to the public in

Canada or elsewhere.

au public au Canada ou

ailleurs.

[268] Anticipation and obviousness are not one and the same. In Beloit Canada Ltd v Valmet

Oy, (1986) 7 CIPR 205 (CA), the Federal Court of Appeal explained the difference thus at page

210:

… obviousness is an attack on a patent based on its lack of

inventiveness. The attacker, says, in effect, “Any fool could have

done that.” Anticipation, or lack of novelty, on the other hand, in

effect assumes that there has been an invention but asserts that it

has been disclosed to the public prior to the application for the

patent. The charge is: “Your invention, though clever, was already

known.”

Page: 116

[269] The Court would conclude in this case that the application of the framework for

analyzing obviousness leads to the conclusion that the 738 Patent suffers from that ground of

invalidity, given the prior art and the common general knowledge. Indeed, the Patent-in-suit is a

rudimentary instrument compared to some of the prior art. In Apotex Inc v Wellcome Foundation

Ltd (2000), [2001] 1 FC 495 (CA) [Wellcome Foundation], the Federal Court of Appeal

described the concept of obviousness:

60

The test for obviousness is whether the notional technician,

devoid of inventiveness, but skilled in the art would, in light of the

state of the art and of common general knowledge at the date of the

invention, have come directly and without difficulty to the solution

taught by the patent. This is a difficult onus to discharge.

61

Obviousness is a question of fact and this Court cannot

interfere with the Trial Judge on this issue unless he committed a

manifest error in weighing the evidence or committed an error of

law. Care must be taken to guard against the danger inherent in

hindsight analysis that an invention may appear obvious after the

fact which was not obvious at the time of the invention.

Recently, the English and Wales Court of Appeal insisted once more on how much fact-driven is

the consideration of obviousness. Clearly the Court of Appeal avoids putting a straitjacket on the

law of obviousness. (Hospira UK Ltd and Genentech, Inc, [2016] EWCA Civ 780, at paras 9 to

17)

[270] Sanofi-Synthelabo captures crisply the state of the law when examining an allegation of

obviousness by adopting the approach followed in Great-Britain:

67

It will be useful in an obviousness inquiry to follow the

four-step approach first outlined by Oliver L.J. in Windsurfing

International Inc. v. Tabur Marine (Great Britain) Ltd., [1985]

R.P.C. 59 (C.A.). This approach should bring better structure to the

obviousness inquiry and more objectivity and clarity to the

analysis. The Windsurfing approach was recently updated by Jacob

Page: 117

L.J. in Pozzoli SPA v. BDMO SA, [2007] F.S.R. 37, [2007] EWCA

Civ 588, at para. 23:

In the result I would restate the Windsurfing questions thus:

(1) (a) Identify the notional “person skilled in the

art”;

(b) Identify the relevant common general

knowledge of that person;

(2) Identify the inventive concept of the claim in

question or if that cannot readily be done, construe

it;

(3) Identify what, if any, differences exist between

the matter cited as forming part of the “state of the

art” and the inventive concept of the claim or the

claim as construed;

(4) Viewed without any knowledge of the alleged

invention as claimed, do those differences constitute

steps which would have been obvious to the person

skilled in the art or do they require any degree of

invention? [Emphasis added.]

It will be at the fourth step of the Windsurfing/Pozzoli approach to

obviousness that the issue of “obvious to try” will arise.

[271] The rigidity that was assumed by the trial judge in Sanofi-Synthelabo has now been

somewhat reduced. As already found, the person of skill in the art will have a mechanical

engineering degree with a few years of experience. It is possible that calibrators with significant

experience would be part of the team constituting the Posita. The 738 Patent is concerned with

the two-stroke engine that uses exhaust gas temperature to control the ignition timing. There is

agreement on most of the essential elements of the claims which are, in effect, part of the

knowledge of a mechanical engineer (a two-stroke engine has a cylinder, a piston, an ignition

source, etc.).

Page: 118

[272] AC took issue with some of the prior art, in the form of patents or applications for

patents, located by the person skilled in the art. Part of the problem would of course come from

the fact that AC would have defined the person of skill as someone who has experience rather

than a degreed mechanical engineer. Furthermore, it is argued that the search conducted went

beyond the diligent search. I disagree.

[273] The domain in which the search was conducted is circumscribed and perfectly

reasonable. The 738 Patent is about two-stroke engines where the exhaust gas temperature is

used for a particular purpose. It is not limited to snowmobiles and the 738 Patent is specific that

it is about engines used “to drive various vehicles such as snowmobiles, motorcycles, personal

watercraft and others” (Patent p 1). Surely a person of skill, like a mechanical engineer, who is

diligent would locate prior art dealing with ignition timing and exhaust gas temperature, even if

it refers to motorcycles.

[274] Similarly, the mere fact that some prior art was concerned with catalytic converters

would not disqualify a research that otherwise deals with the use of exhaust gas temperature. I

accept the evidence to the effect that it was understood that, sooner or later, and probably sooner

rather than later, emission regulations would apply to snowmobiles as they already were in

existence for other recreation vehicles, as motorcycles and watercrafts were already covered in

the United States. Thus, looking into the art that is concerned with emission reductions does not

strike me as being far afield. Quite the opposite when the Posita is taken to have a mechanical

engineering degree.

Page: 119

[275] I am less than convinced, however, that prior art concerned with 4-stroke engines,

because it operated differently, would be covered by a diligent search. At any rate, that prior art

is less than essential and would carry little weight. It follows that the prior art identified by BRP

is not only relevant to the alleged invention, but it would have been located by a diligent search

focusing on what is the alleged invention. It is worth recalling that the effort centered on the

invention and the location of where the competition for snowmobile, and recreational vehicles

generally, would be the United States and Japan. Indeed, Application 959 has as the patent

applicant the Suzuki Motor Corporation, AC’s motorist at the time the alleged invention was

developed. It is difficult to fathom a reason why an application for a patent by AC’s motorist that

is concerned with the ignition curves being selected from a plurality of ignition curves on the

basis of the exhaust gas temperature can be said to be not relevant or, for that matter, requiring

more than a diligent search when it is so directly on point. The U.S. Patent 908, similarly,

emerged very rapidly as AC was looking for a logic that would avoid the 738 Patent logic. The

person of skill in the art would not have had to look very far to locate a patent filed in January

1997 and published a few months (September 7, 1999) before the priority date invoked by AC

(December 1, 1999). The testimony offered by Mr. Strickland is in my view a complete answer

to accusations of over-zealousness. A serious company wishing to launch a new product would

operate as BRP did in identifying the relevant intellectual property and seeking to avoid violating

it. So would a Posita.

[276] The inventive concept in this case is, at the end of the day, quite simple, if one excludes

from consideration the requirement that there is an ignition pattern composed of more than one

ignition point, which would be a distinguishing feature of the 738 Patent. Thus, the invention is

Page: 120

limited to, with respect to the two-stroke engine, the exhaust gas temperature being used to select

the ignition timing for the purpose of providing optimum operation of the engine. Although AC

suggested that the optimization is limited to performance in the sense of power and acceleration,

it is obviously not the case since the disclosure also speaks in terms of avoiding damages to the

engine and selecting the right ignition pattern shortly after start-up. It should also be recalled that

the disclosure states that “(i)n addition, the present invention could be applied to two cycle

engines used on a stationary setting if desired.”

[277] This view taken of the inventive concept is consistent with the testimony of the inventor,

Mr. Greg Spaulding, and the expert retained by AC, Dr. Checkel, who wrote at paragraph 101 of

P-2:

Overall, the 738 Patent describes the use of sensing or measuring

exhaust gas temperature to detect the engine operating condition

specification and using that temperature as an input for

determining the ignition pattern to be used. The ignition pattern

used as a result may be to obtain optimum engine operating

conditions or may for example, be used to alleviate an undesirable

engine operating condition.

[278] Mr. Spaulding was in fact testifying in chief about the inventive concept without even

referring to ignition patterns. Early on in his testimony, here is how he explained his invention:

BY MR. EVANS:

Q.

Mr. Spaulding, could you just, generally speaking, explain

what it is that you invented?

A.

My invention is using exhaust gas temperature to optimize

settings, ignition timings on a two-stroke engine.

Q.

And what do you mean by optimize?

Page: 121

To select the – using exhaust gas temperature to select the optimum

ignition timing based on that internal temperature. The best

calibration of timing for a given internal temperature of the

exhaust.

(Transcript, p 2616)

Later on in his testimony, Mr. Spaulding referred to ignition patterns (pp 2671 and 2707-2708).

[279] On cross-examination, it became clearer why the existence of ignition patterns is not

prevalent in the view taken of this invention by its inventor:

Q.

But still you consider that these two engines fall within the

scope of your invention?

A.

Q.

Yes.

Because your invention if I understand correctly, is the

broad concept of modifying or correcting or selecting or any other

way to affect ignition timing using exhaust gas temperature sensor

as an input. Right?

A.

Yes.

Q.

So as long as you can have an exhaust gas temperature

sensor, an ECU, and an ignition timing value or pattern or other

parameters relating to ignition timing that will account for this

exhaust gas temperature, this is your invention?

A.

Q.

A.

I believe I’m understanding what you’re saying.

What do you understand?

I’m understanding that regardless of the logic used to

achieve the exhaust gas temperature, the technology selects –

measures exhaust gas temperature, uses that information to select

patterns or ignition timing to optimize the engine in the various

conditions, among other things. As far as ignition timing, I’m

saying that. There are other areas of control.

Q.

And based on that understanding, you say, yes, this is my

invention?

Page: 122

A.

Yes.

Q.

Correction of ignition point versus correction of ignition

timing?

A.

Yes.

Q.

Selection of ignition timing patterns versus selection of

ignition timing point, they both fall within the scope of your

invention, as you see it?

A.

As I see it, yes.

(Transcript, pp 2781-2782)

As far as the witness is concerned, what counts in the end is that the ignition timing, the selection

of the ignition point, be made based on exhaust gas temperature. As already noted, although this

is not the correct construction of the claims, this is assumed to be a possible reading of the Patent

for the purpose of the obviousness analysis.

[280] The exchange during the cross-examination continued and it confirmed that the witness

was not only concerned by the end product, but also that there may not have been much new in

the invention:

Q.

Yes. And what you want to accomplish is a final result, a

final ignition timing point. Right?

A.

Q.

Yes.

And am I correct to say that, when you submitted your idea

back in 1999 or October 1998 to Suzuki, this is what you

requested, the broad concept of modifying, calculating, selecting,

or other way to do it, but to account for exhaust gas temperature

and modify somehow the ignition timing?

A.

Q.

That was my request to Suzuki, yes.

And you left to Suzuki the way to see what approach would

be taken to achieve this result. Correct?

Page: 123

A.

Q.

“Approach” meaning software logic?

Software logic. Selecting an ignition pattern would be left

to Suzuki to determine?

A.

Yes. The logic of the software, yes.

Q.

Modifying an ignition pattern, this would be – this would

come from Suzuki. Correct?

A.

I’ve got to make sure I understand you. The method of

modifying an ignition pattern?

Q.

Well, either the selecting an ignition pattern, modifying an

ignition pattern, or modifying an ignition point, you left that to

Suzuki, right, the logic of how to do it?

A.

I – those things were known. I mean, you already had

patterns, so it wasn’t that you didn’t know that you would modify a

pattern or a point in the pattern. You know, I guess I’m not sure

when you’re saying I left that up to Suzuki to decide on what a

pattern is or what a point is.

Q.

No, not what a pattern means. So you said that patterns

were known before. Right?

A.

Q.

A.

Q.

Timing patterns

Timing patterns were known?

Yes.

So what you wanted to accomplish with your system was to

be able to modify the ignition timing of the snowmobile based on

exhaust gas temperature. Correct?

A.

Yes.

Q.

Whether it would be accomplished by selecting patterns,

which you just said were known. Correct?

A.

Q.

A.

Q.

Whether it be by selecting?

Yes. Or whether it would be by calculation?

Oh, yes. That’s right. Whatever the method.

Whatever the method to do it was provided to you by

Suzuki. Right?

Page: 124

A.

Q.

Yes.

Because, what you were interested in at the end of the day,

was the end result?

A. Yes.

(Transcript, pp 2783 to 2785)

[My emphasis]

[281] I have little difficulty in finding that the prior art made the 738 Patent, as understood by

AC, obvious to the Posita. As indicated on numerous occasions during the trial, what was truly

invented in this case remains somewhat nebulous. But it is assumed for the purpose of the

obviousness analysis in this case that the Court ignores the prevalence, indeed the centrality, of

the ignition point being ignited according to the ignition pattern (with its numerous ignition

points) that is either selected (the pattern) based on the exhaust gas temperature, or the final

ignition pattern according to which the ignition point will be found and ignited is modified based

on exhaust gas temperature. In effect, by dumbing down its Patent, AC makes it open to the

obviousness attack.

[282] The 959 Application, the Suzuki Motor application of ten years prior to the 738 Patent,

deals specifically with ignition patterns being selected on the basis of the exhaust gas

temperature. The selection is done in order to optimally control the ignition timing. There is not

much daylight between the 959 Application and the inventive concept of the 738 Patent. The fact

that the 738 Patent is silent as to the purpose to which the sensed exhaust gas temperature is to be

used to optimize the operation of the engine, and to what effect, makes it impossible to see a

significant difference between the two. In other words, the very general inventive concept,

Page: 125

without any precision about the use that can be made of it, makes it easy to link Application 959

with the Patent-in-suit. The inventive concept in Application 959 is the use of exhaust gas

temperature to optimally control the ignition timing. So is the inventive concept of the 738

Patent.

[283] Actually, the fact that there is no indication whatsoever as to how the invention is to be

used in a snowmobile engine makes that feature of the three selection claims (40, 33 and 47)

remarkably weak. If one knows how to use the invention for a motorcycle, what would not be

obvious for the person skilled in the art? The 738 Patent is silent about the features that should be

considered in using exhaust gas temperature for setting the ignition timing at different engine

speeds in the case of a snowmobile. That simply does not differentiate between the prior art and

the Patent-in-suit.

[284] AC argued that Application 959 is not concerned with two-stroke engines. I disagree. The

Application brings by reference another Application, the unexamined Japanese patent application

562-70660 (Application 660); the Application 660 speaks of a two-stroke engine and I accept Dr.

Bower’s evidence that, as Application 959 seeks to assert improvements to the 660 Application,

it follows that Application 959 is also concerned with the two-stroke engine. Application 660 is

not something found elsewhere in the prior art but rather it is referenced directly in the 959

Application. Indeed, Applications 959 and 660 must be read together. These applications have a

common theme: the ignition timing is calibrated based on the temperature of exhaust gas.

Page: 126

[285] Similarly, U.S. Patent 908 is a direct response to AC’s attempt to portray its Patent as

allowing for equations that would account for many variables, with the exhaust gas temperature

being used to adjust the ignition point. The evidence in this trial is to the effect that it is one of

two things. Either, the ignition point is adjusted to account for exhaust gas temperature or it is

the ignition pattern, consisting of more than one ignition point, that is changed based on the

exhaust gas temperature and the ignition point will be found by the controller.

[286] The U.S. patent 908 is in my view a very difficult hurdle for AC to jump in order to argue

against obviousness. The two experts agreed that it teaches adjusting ignition timing based on the

sensed exhaust gas temperature: it is evident on the face of the 908 Patent. The controller uses a

three-dimensional map from which a basic ignition timing is determined as a function of engine

speed and throttle position. If the sensed gas temperature is not that which corresponds with

optimal performance, a correction value based on the exhaust gas temperature (the difference

between the sensed temperature and the desired temperature) is applied.

[287] It is true that U.S. Patent 908 uses the difference of temperature between the desired

exhaust gas temperature and that measured in order to make the adjustment. The 738 Patent’s

disclosure is rather flexible, expressing preference for direct contact with the exhaust gas

temperature for accuracy and reduction in reaction time. But, it is also possible to sense the

temperature outside of the exhaust system: the disclosure even allows to sense the temperature of

water on a water jacket surrounding an exhaust pipe. In my view, U.S. Patent 908 addresses

squarely the use of exhaust gas temperature in order to arrive at an ignition point. If the

difference between measuring the gas outside of part of the exhaust system and establishing the

Page: 127

temperature used by subtracting the temperature measured and that desired is material to the

inventive concept, which is very doubtful, I have no doubt that going from something more

complex (i.e. comparing desired and actual temperature of the gas) to something simple

(measure the exhaust gas directly) would be obvious to the person skilled in the art. This is a step

obvious to the Posita and that simply does not require a degree of invention. There is no

requirement for an inventive step: it is obvious. In fact, the inventive concept of the 738 Patent

would appear to have been well known if one is to exclude the particular use of ignition patterns.

[288] Dr. Checkel, at paragraphs 81to 86 of his report on invalidity (P-60) repeats, for all

intents and purposes, what is found in the 738 Patent. Under the title “The Invention Disclosed in

the Patent”, the Court could not find anything illuminating as we are informed that the “patent

relates to controlling ignition timing” and “specifically to a particular manner of using sensed gas

temperature for setting ignition timing”. The expert then continues with generalities in stating

that the strategy disclosed in the 738 Patent is the selection of an ignition pattern out of a

plurality of ignition patterns based on gas temperature. He does not go beyond repeating what

can be read in the Patent. It is anything but clear what he makes of those words. He even makes a

virtue out of the fact that the Patent does not say a word about the operating conditions and the

circumstances in which an ignition pattern could be selected.

[289] I have been convinced by the evidence led by BRP that its engines practice the 908 Patent

in that they extract from a base map selected on a basis other than the sensed exhaust gas

temperature a value. At any rate, that has not been challenged by AC. That value is then

adjusted, among other factors, by a value based on sensed exhaust gas temperature. Once the 738

Page: 128

Patent is stripped of the particular meaning of “ignition pattern” to be understood that it can also

relate to an ignition point, it becomes clear that the inventive concept is the same as that of the

908 Patent: an ignition point is adjusted, including with using the sensing of the exhaust gas

temperature.

[290] When the specification of 738 is considered as a whole, one is faced with a patent which

lacks inventiveness. The exhaust gas temperature can be used to affect the ignition timing. The

738 Patent does not offer anything that would differentiate it from other patents. That same idea,

general inventive concept, is found in the prior art. There is no distinguishing attribute, feature or

characteristic found in the 738 Patent that would set it apart from the prior art. To say that the

invention will assist in optimizing the operation and performance of a two-stroke engine, without

any indication as to how, is not addressing the requirement that there must be a differentiating

feature such that there is inventiveness. Similarly, claiming that we are dealing with a

snowmobile engine is of no assistance if it is not disclosed how that would make a difference.

[291] In Teva Canada Ltd v Pfizer Canada Inc, 2012 SCC 60, [2012] 3 SCR 625, the Supreme

Court found the disclosure to be deficient in a case where the specification did not allow to

identify the particular compound active in treating erectile dysfunction (EJ):

66

In this case, if we consider the specification as a whole,

there is nothing to support the view that the use of sildenafil for the

treatment of ED is a separate invention from the use of any of the

other claimed compounds for that same purpose. No specific

attributes or characteristics are ascribed to sildenafil that would set

it apart from the other compounds. Even if we take into

consideration the fact that sildenafil is an “especially preferred

compound”, there is still nothing that distinguishes it from the

other eight “especially preferred compounds”. The use of sildenafil

Page: 129

and the other compounds for the treatment of ED comprises one

inventive concept.

By analogy, in this case there is no suggestion in the Patent concerning the difference for a

snowmobile. The disclosure does not state any particular feature of the snowmobile engine. One

suspects that the calibration of a snowmobile engine, because of the conditions in which it

operates, must take into account differently the exhaust gas temperature in finding the optimal

ignition point (or ignition pattern). But the Patent does not take the matter any further. It simply

says that the invention is directed at two-stroke combustion engine that is “used, for example, to

drive various vehicles such as snowmobiles, motorcycles, personal watercraft and others” (738

Patent, p 1, lines 6 and 7; see also p 3, lines 2 to 4).

[292] If the Patent-in-suit is not providing any information about the special requirements of a

snowmobile engine, it would be left to the person of skill to make appropriate adjustments which

is, by definition, short of inventiveness. The 738 Patent does not solve the problem, if any, that is

posed by a snowmobile engine. It simply states that three independent claims are applied to an

engine of a snowmobile, without more.

[293] AC advanced, quite meekly, in my view, that its invention is different because it is more

general than the more precise purpose found in the prior art. The argument would have had more

strength had the Patent brought any kind of specificity as to how the general notion of gas

temperature to adjust ignition timing can be used in different circumstances. Such is not the case.

Nothing of the sort is even alluded to in the 738 Patent. Furthermore, the prior art was already

Page: 130

concerned with the exhaust gas temperature being used to operate the engine at its optimum. For

instance, the abstract of the 908 Patent seeks to illustrate what is found in the Patent:

A number of embodiments of exhaust gas temperature sensors that

cooperate with an exhaust control for maintaining optimum engine

performance by controlling the exhaust gas temperature to

maintain the desired pulse back effect on the exhaust gas system.

In describing the control system, more precision is available, we read:

As previously noted, the ECU 75 controls the timing of firing of

the spark plugs 73. This timing is selected in a manner to provide

optimum engine performance and this includes timing of the firing

of the spark plugs 73 so as to maintain the optimum exhaust back

pressure pulse transmission signals.

In addition to controlling the timing of firing of the spark plugs 73

by their ignition system 74, the ECU also controls the fuel supply

amount transmitted from the carburetor 65 by a fuel supply control

system, indicated schematically at 85 in FIG. 1.

Certain engine running signals are also transmitted to the ECU 75

as well as other conditions such as ambient air pressure and

temperature. The depicted controls include a throttle position

detector 86 that cooperates with the throttle valve 66 to provide a

signal indicative of operator demand. There is also a sensor 87

associated with the crankshaft 57 so as to provide a pulse signal

that it is indicative of not only crank angle but, by measuring crank

angle with respect to time, engine speed. The ECU 75 has a

memory section 88 that contains certain map information, as

shown in FIG. 7, so as to provide the necessary information to lo

[sic] the ECU 75 to obtain optimum engine control.

(Column 6, lines 60 to 67 and column 7, lines 1 to 15)

[294] It would seem rather obvious, even trite, that the purpose of the invention was to

improve. When was the last time an invention professed to make things worse? At any rate, that

would likely not meet the definition of “invention” in the Patent Act that specifies that it means

“any new and useful art, process, …, or any new and useful improvement in any art, process,

Page: 131

…”. AC relied on the testimony of the inventor to argue that the invention is for the purpose of

optimizing performance at that particular gas temperature (memorandum of facts and law, para

167). Not only is the Court invited to read more in the passage of the testimony used to make the

argument (Transcript, p 2616, lines 5 to 14) than can be, since the witness was not offering what

the optimization was about, but just a few minutes later the same witness explained further what

his invention was achieving:

A.

If you measure the exhaust gas temperature with my

invention, yes, it selects temperatures with settings that are

optimized for these two patterns.

Q.

Okay. And at the time of your invention, to your

knowledge, what were other people trying to do to compensate for

this phenomenon?

A.

Q.

A.

People would wrap pipes or insulate them.

Okay.

Try to get the system up to some higher temperature and

then maybe cover the pipes to keep them warm before an event or

something.

Q.

What was the purpose of that?

A.

To try to retain heat inside the pipe in hopes that certain

performance characteristics would be better for them at whatever

event they were at or use they were doing with it.

Q.

How is your idea different?

A.

Well, my pipe sensor technology will measure that exhaust

gas. It will select values that are optimum for a temperature. When

that temperature rises in normal operation, say when the

snowmobile is going from a partial throttle load to a wide open

load, the temperature is rising in there, the sensor senses that, it

continually makes timing settings for the various temperatures.

When the temperature rises, it moves those values up into the

optimum settings automatically.

(Transcript, p 2625, lines 16 to 28, and p 2626, lines 1 to 14)

Page: 132

Actually, the description given corresponds to the inventive concept of the 908 Patent. Given the

silence of the Patent on the use that can be made of the exhaust gas temperature for various

possible purposes, I fail to see how this can be of assistance to AC. This purpose cannot be a

distinguishing feature or characteristic without a modicum of precision. Without it, there is no air

of reality to the argument.

[295] AC did not argue that there was a significant difference between selection claims and

modification claims on this Patent-in-suit. It was mainly a matter of claims drafting, intending to

draft a narrower claim than the selection claims (Transcript, February 1, 2016, pp 100-101).

[296] Application 959 would also be part of the prior art showing that ignition timing being

adjusted by using exhaust gas temperature was in existence ten years before 1999. There was not

much new in the 738 Patent if the notion of ignition pattern, as it is to be understood, is excluded

from real consideration. The novelty of the 738 Patent is advanced by AC as being the use of

ignition patterns (memorandum of facts and law, para 165), yet it must take its distance from it in

order to argue that BRP infringes where BRP does not activate the ignition source according to

an ignition pattern, that ignition pattern being composed of numerous ignition points. Once that

distinguishing feature of the 738 Patent is excluded, we are left with an inventive concept, and an

invention, that is not different from the prior art, and in particular Application 959 and U.S.

Patent 908. There is little that differentiates the Patent-in-suit.

[297] Other prior art was also brought in by BRP. They tend to show that ignition timing as a

function of exhaust gas temperature was already well known.

Page: 133

[298] In U.S. Patent 5,050,551 (the 551 Patent), the exhaust gas temperature is used to select a

particular ignition pattern in relation to the activation of catalytic converters. Depending on the

temperature sensed, the ignition timing on the engine would be adjusted. The 551 Patent is dated

September 24, 1991, many years before the 738 Patent, yet the relationship between temperature

and ignition timing was well known. The same can be said of U.S. Patent 5,642,705 of July 1,

1997. Published in 1997, it seeks to maintain the exhaust gas temperature in order to activate a

catalytic converter. The controller applies a correction to adjust the fuel injection quantity and an

ignition timing adjustment (an advance) when the temperature activated is below the target

exhaust gas temperature to activate the catalyst.

[299] I would conclude that the subject-matter described by the claims was obvious to the

person skilled in the art. An inventive concept, defined only by the use of sensed gas temperature

for setting ignition timing, in order to optimize the engine operation, was known to the skilled

person defined as including a mechanical engineer with three years of experience, for many

years. Furthermore, the goal for a particular set of settings, even if relevant, is of no assistance to

AC because it is never explained how the invention relates to different goals, whether they be to

improve acceleration or avoid damage to the engine. In other words, the invention does not

disclose how the temperature can be used for different goals. Different purposes for using

exhaust gas temperature for setting ignition timing are referred to in a general way: acceleration,

engine is cold or hot, the effects of combustion achieved by varying the ignition timings,

operating conditions may require different timings, the type of fuel or the temperature indicating

problems that can be avoided through appropriate ignition timings. The issues are stated, not

explained and certainly not resolved. In the end, they bring nothing to the inventive concept

Page: 134

because there is no way of ascertaining how the invention, i.e. using gas temperature for setting

ignition timing, can have an effect.

[300] BRP cannot practice the 908 Patent and be in violation of the 738 Patent without the 738

Patent having the same elements as the 908 Patent. AC was not convincing in its attempt to argue

around the 908 Patent. Application 959, the Japanese application of Suzuki, AC’s motorist, was

also a significant difficulty for AC that was never overtaken.

[301] Nevertheless, the Court examined carefully the argument put forth by AC on invalidity. It

has to find, on balance, in favour of BRP as the evidence of its expert was more convincing, as it

accounts for the text of patents and applications considered.

[302] In his report (P-60), Dr. Checkel, identified these features of the 738 Patent as not

covered by the common general knowledge: “(a) selecting an ignition pattern from a plurality of

such maps based on using the sensed exhaust gas temperature; (b) modifying an ignition pattern

by using the sensed exhaust gas; (c) using these things and methods with a snowmobile”. It

remains very much unclear if these features identified by the expert for AC can relate to an

ignition point being the ignition pattern, especially “(a) selecting an ignition pattern for a

plurality of such maps”. AC never resolved the conflict between the language in the claims

around “ignition pattern” and the ignition point. It ignores for all intents and purposes the notion

of pattern when arguing infringement, but it brings it back to defend against invalidity. That is an

awkward position to be in. That plays into the hands of BRP’s “Gillette defense”. In order to

defend against invalidity AC is forced to argue that its Patent is different from the prior art: that

Page: 135

difference is the use made of the ignition pattern. However, in so doing it opens the door for BRP

to escape being captured by its Patent. That may well explain the reluctance of Dr. Checkel to

discuss at any length ignition patterns. Moreover, I note that the witness introduces flexibility in

subparagraph (a) and (b) of his paragraph 136 that is not to be found in the language of the

claims. There is no “using of the sensed gas temperature”, and that makes a difference. The

claims speak in terms of the ignition pattern used by the controller being selected [or modified]

based upon the sensed exhaust gas temperature, not merely being used in the selection or

modification of a pattern.

[303] The ignition pattern is not selected based on using the temperature in some fashion: it is

selected based on the temperature. The claims are clear: the exhaust gas temperature once sensed

takes the controller to one ignition pattern. The controller activates the ignition source at a

particular point according to the ignition pattern that must have at least two ignition points. That

is evidently consistent with the specification that states that “[t]he selected ignition pattern then

is used to control the ignition advance based on the engine operating speed.” (p 4, lines 24-25).

[My emphasis]

[304] Dr. Checkel concluded that these elements did not form part of the common general

knowledge. However, I have been persuaded that Application 959 by Suzuki discloses the

selection of an ignition pattern being selected from a plurality of ignition patterns: the selection

does not only use the exhaust gas temperature, but the selection is based on the sensed exhaust

gas temperature. Mr. Spaulding confirmed in his testimony that timing patterns were known at

the time and that he was interested in selecting and modifying patterns based on exhaust gas

Page: 136

temperature (Transcript, pp 2783-2784, lines 9 to 28 and lines 1 to 28). It had already been

disclosed ten years before that an ignition pattern may be selected based on exhaust gas

temperature.

[305] I accept Dr. Bower’s evidence that the 908 Patent is relevant if AC is to argue that its

claims 11 and 16, the modification claims, are not invalid by reason of obviousness. Dr. Checkel

reckoned that the 908 Patent teaches adjusting the ignition timing based on exhaust gas

temperature (Transcript, pp 3077-3078, lines 26 to 28 and 1 and 2). A broad interpretation of the

claims by AC needed to argue infringement on the part of BRP brings into play the 908 Patent.

The uncontroverted evidence in the face of an absence of evidence presented by AC leads to a

conclusion that the 908 Patent disclosed modification based on exhaust gas temperature. There

was nothing new in adjusting timing based on gas temperature.

[306] By asserting its claims so broadly, AC was leaving itself open to invalidity arguments.

The narrowness of claims is known to afford protection against invalidity. There is of course a

need to protect the invention as “[e]verybody will be free to use the invention in the unfenced

area.” (Burton Parsons, at para 134 of these reasons for judgment).

[307] Given the logic used by the BRP engines, AC had in order to argue infringement to

abandon the central feature of its claims, the existence of ignition patterns from which ignition

points would be extracted. However, by abandoning that feature, AC was also abandoning what

distinguished its 738 Patent from the prior art. Optimizing the operation of a two-stroke engine

through the use of sensed exhaust gas to adjust ignition timing was not new.

Page: 137

[308] As already discussed, the lack of precision around what difference applying the inventive

concept would make in the case of a snowmobile engine makes this distinguishing feature

irrelevant when discussing obviousness. Even if the application of the invention were to be part

of the inventive concept, there was no convincing evidence to suggest that applying the inventive

concept to snowmobiles would require an inventive step by the person skilled in the art. There is

no evidence, let alone convincing evidence, that the adaptation of the invention to a snowmobile

engine would require steps that would require any degree of invention.

[309] It follows that whatever reading one gives to the claims, the subject-matter defined by

those claims would have been obvious. This invention lacks inventiveness and it would therefore

constitute a complete defense to the allegation of infringement.

XI.

Overbreadth

[310] BRP made an argument in extremis according to which the claims in suit are all

overbroad. In other words, the five claims, together of course with the independent claims 34, 41

and 28, are broader than the invention disclosed in the specification.

[311] As stated by the Federal Court of Appeal in Pfizer Canada Inc v Canada (Minister of

Health, 2007 FCA 209 at para 115, 158 ACWS (3d) 987, “[i]t is now settled law that a patent

which claims more than what was invented or disclosed can be found invalid for being overly

broad.” In order to prevail, it must be shown that the claims in the 738 Patent are broader than

the invention as disclosed.

Page: 138

[312] As I understand it, the argument made is somewhat technical. It is based on what counsel

has referred to as “claim differentiation”. There are in this Patent a number of independent

claims that are further refined and limited with dependent claims; the dependent claims convey

specifically the notion that the engine considered by those independent claims “comprises an

exhaust pipe for carrying the exhaust gas and the sensor is disposed in the exhaust pipe”. These

kinds of refinements are found with respect to independent claims 1, 6, 21, 28, 34, and 41, and in

dependant claims 4, 9, 24, 31, 37 and 44. The selection claims 33, 40 and 47 asserted in this case

are associated with independent claims 28, 34 and 41 which have as other dependent claims

those that refer specifically to exhaust pipes. Thus, independent claims 28, 34 and 41 are all

followed by dependent claims that speak specifically of an exhaust pipe in which is disposed a

sensor. These dependent claims to independent claims 28, 34 and 41 are different from the

dependent claims asserted in this case where all that is left are the independent claims where the

engine is a snowmobile engine without direct reference to exhaust pipes. Other claims do not

have these refinements in dependent claims, including the modification claims 11 and 16.

[313] The claim differentiation argument goes like this. The invention, in order to be

operational, requires that there be an engine with an exhaust pipe. A claim that would not include

exhaust pipes would cover more than the disclosed invention by not requiring specifically the

presence of exhaust pipes. BRP argues that some dependent claims include exhaust pipes, which

proves that the other claims are overbroad because they do not refer to the pipes. BRP relies on

Whirlpool Corp v Camco Inc, 2000 SCC 67 at para 79, [2000] 2 SCR 1067 [Whirlpool].

Page: 139

[314] In Whirlpool, the Court found that if two claims are identical but for one feature, it must

be that the feature is an essential element of the claim. The difference between two claims was

that, in one, the word “intermittently” was used and, in another, it was the word “continuously”

that was used. That made a big difference because in one case, the auger was continuously

rotated and in the other claim it was intermittently rotated. As the Court put it, “[t]he claims

clearly differentiate between two modes of operation.”

[315] The flaw in the BRP argument, respectfully stated, is that it fails to give the asserted

claims a purposive construction taking fully into account the specification. It fails to reckon that

the specification speaks of the use of an exhaust pipe to have the sensor disposed in it as possible

embodiments, not essential elements and that, at any rate, Figure 1 includes an exhaust pipe.

[316] The invention requires that the gas produced by the combustion of the mixture of air and

fuel be expelled from the cylinder. The temperature of that exhaust gas must be measured.

Hence, the summary of the invention provides that, “[i]n another aspect of the present invention

the exhaust gas temperature is determined by use of a sensor that is in contact with the exhaust

gas, for example in an exhaust pipe.” The same formulation is used at p 3, line 7, of the Patent.

Evidently, what is essential to the invention is that gas temperature be measured once expelled

from the cylinder; the exhaust gas temperature may be measured elsewhere than in the exhaust

pipe. The same point is made at page 3 of the 738 Patent, the inventor adding at lines 7 to 10 that

“[t]he present invention is not limited to any particular exhaust system, and various combinations

of exhaust pipes and manifolds can be used with engines that have more than one cylinder.”

Furthermore, BRP compares the asserted claims to what it considers to be required to benefit

Page: 140

from only one particular use that can be made of the invention, not a comparison between the

invention and the claims. To put it another way, the invention is broader than what BRP asserts

to make its overbreadth argument.

[317] The Court finds guidance on the method of interpretation, as it should, from the passage

often quoted from Consolboard Inc v MacMillan Bloedel (Saskatchewan) Ltd, at pp 520-

521[Consolboard]:

We must look to the whole of the disclosure and the claims to

ascertain the nature of the invention and methods of its

performance, (Noranda Mines Limited v. Minerals Separation

North American Corporation [[1950] S.C.R. 36]), being neither

benevolent nor harsh, but rather seeking a construction which is

reasonable and fair to both patentee and public. There is no

occasion for being too astute or technical in the matter of

objections to either title or specification for, as Duff C.J.C. said,

giving the judgment of the Court in Western Electric Company,

Incorporated, and Northern Electric Company v. Baldwin

International Radio of Canada [[1934] S.C.R. 570], at p. 574,

“where the language of the specification, upon a reasonable view

of it, can be so read as to afford the inventor protection for that

which he has actually in good faith invented, the court, as a rule,

will endeavour to give effect to that construction”.

[Emphasis in the original]

I have concluded that the kind of overly technical construction, comparing words found in some

claims and not others is not appropriate, especially given that BRP’s construction is based in fact

on only one possible benefit derived from the invention. It should not be endorsed as it departs

from the purposive construction expected in matters of this nature and the proper construction to

be given to those claims.

Page: 141

[318] The following passage taken from Burton Parsons, above, at page 563, would seem to

me to apply to the case:

In my view, the rights of patentees should not be defeated by such

technicalities. While the construction of a patent is for the Court,

like that of any other legal document, it is however to be done on

the basis that the addressee is a man skilled in the art and the

knowledge such a man is expected to possess is to be taken into

consideration.

In fact, the differentiation of claims, in Whirlpool, does not exclude the purposive construction of

claims. Rather, the differentiation is one way of inferring the true meaning of the claims. In my

view, the proper construction of the claims of the 738 Patent cannot be mechanistic, as is

proposed by BRP. The purposive construction leads to a different conclusion.

[319] Strictly speaking, the disclosure does not require the presence of exhaust pipes in order to

measure the gas temperature. How the temperature is sensed, that is whether the sensor contacts

directly the exhaust gas or not, is only an aspect of the invention as the following references will

attest:

In another aspect of the present invention the exhaust gas

temperature is determined by use of a sensor that is in contact with

the exhaust gas, for example in an exhaust pipe.

(p 2, lines 7 to 9)

Exhaust gas resulting from the combustion of the fuel air mixture

is expelled from the cylinder, for example through an exhaust pipe.

The present invention is not limited to any exhaust system, and

various combinations of exhaust pipes and manifolds can be used

with engines that have more than one cylinder.

(p 3, lines 6 to 9)

It is preferred that the sensor 24 be in direct contact with the

exhaust with the exhaust gas for the purpose of accuracy and

Page: 142

reduction in reaction time, for example by being positioned in the

exhaust pipe 26. However, it is possible to sense the temperature

on the outside part if the exhaust system or to sense the

temperature of water in a water jacket surrounding an exhaust pipe.

(p 4, lines 4 to 8)

It is the ability to measure the temperature of the exhaust gas that is essential. Where that

measurement is to occur is a matter of preference. It could be in the exhaust pipe, but it could

also be elsewhere. As the disclosure states:

In the case of a sensor directly contacting exhaust gas in the

exhaust pipe or other part of the exhaust system, the sensor should

be able to withstand that environment, and suitable measures

should be taken to seal the exhaust system at the point where the

sensor extends into the exhaust system. An example of a suitable

sensor for use in directly contacting the exhaust gas is a thermistor.

It is desirable that the sensor be positioned in the exhaust system at

a position sufficiently far from the engine to avoid sharp rises and

falls (spikes) in temperature of short duration. However, if the

sensor is too far from the engine the responsiveness of the system

is adversely affected, i.e. there will be too much delay in sensing

increases and decreases in temperature. The exact position is

determined based on the specific characteristics of the exhaust

system involved. (p 4, lines 7 to 19)

[320] The existence of an exhaust system is referred to in the specification and it must be

implied. Not only does the disclosure refer to an exhaust system, but the person of skill would

have recognized that much. Furthermore, Figure 1 of the 738 Patent presents a rough drawing of

a two-stroke engine. That same drawing is found on the first page of the patent under the title

“Two-cycle engine with exhaust temperature-controlled ignition timing”. In each of these two

figures is prominently displayed an exhaust pipe 26.

Page: 143

[321] The purpose of method claims 31, 37 and 44 as well as engine claims 4, 9 and 24 is not

so much to introduce the existence of exhaust pipes as it is to be specific that the sensors must be

disposed, in those claims, in the exhaust pipe as opposed to somewhere else. Contrary to BRP’s

assertion, the claims do not broaden the invention as disclosed in the specifications: they limit it.

The asserted claims simply do not indicate a preference for where the gas temperature is to be

measured. Other claims do. As the Supreme Court put it in Whirlpool after having approved the

passage from Consolboard, above, “[n]ot only is “purposive construction” consistent with these

well-established principles, it advances Dickson J.'s objective of an interpretation of the patent

claims that “is reasonable and fair to both patentee and public” (para 49). The construction

offered by BRP would not appear to be reasonable and fair to the patentee by seeing a

differentiation between claims where none exists once a purposive construction is put on the

claims.

[322] This interpretation commends itself even more so where claims 4, 9, 24, 31, 37 and 44

are read, as they should, together with the claim preceding them. The six claims are built on the

same format: the engine (or the method) is the engine (or the method), of the claim preceding. I

use independent claim 28 as an illustration:

•

Claim 28 posits simply “sensing a temperature of the

exhaust gas expelled from the cylinder”.

Claim 30 adds precision by requiring that “the exhaust gas

temperature [be] sensed with a sensor that contacts the

exhaust gas”.

•

Claim 31 starts from method 30 that senses the gas

temperature by contact with the exhaust gas to add merely

that “wherein the engine further comprises an exhaust pipe

for carrying the exhaust gas and the sensor is disposed in

the exhaust pipe”.

Page: 144

Claim 30 provides that “[t]he exhaust gas temperature is sensed with a sensor that contacts the

exhaust gas”. Read together, independent claim 28 is the method of operating a two-cycle engine

which calls for the gas expelled from the cylinder to be sensed for its temperature. Dependent

claims 30 and 31 establish that in method claim 28, the sensor contacts the exhaust gas and

where there is an exhaust pipe for carrying the exhaust gas, the sensor is disposed in that exhaust

pipe. As already noted, the specification does not require that the sensor be in the exhaust pipe; it

indicates that it is preferred that there be direct contact with the exhaust gas for better accuracy

and reaction time, “for example by being positioned in the exhaust pipe”. These claims give

effect to that preference.

[323] Actually, the dependent claims where reference is made to exhaust pipes cascade from

the independent claims 28, 34 and 41, the same independent claims from which asserted claims

33, 40 and 47 cascade. A purposive construction of the claims leads to only one conclusion. The

logic is the following:

(a)

(b)

(c)

The independent claim establishes the essential parameters, one of which being

that the exhaust gas expelled from the cylinder will be sensed;

One dependent claim establishes one of the preferences stemming from the

disclosure to have the sensor contact the exhaust gas;

Another dependent claim states that the sensor contacts the exhaust gas such that

the sensor would be disposed in the exhaust pipe.

In the case at bar, the only asserted claim is, in effect, the independent claim where the engine is

limited to a snowmobile engine rather than other two-stroke engines used in motorcycles,

Page: 145

personal watercrafts or even “two cycle engines used in a stationary setting” (p 3, line 5). That

dependent claim, coupled with the independent claim, does not express a preference for where

the exhaust gas temperature is measured.

[324] As already pointed out, this invention is not limited to optimizing power and acceleration,

but it can address a number of other issues that could damage a two-stroke engine. The invention

claimed in independent claims 28, 34 and 41 do not claim for more than what is disclosed. They

claimed what is disclosed. By having dependent claims where the preferred method of sensing

the exhaust gas temperature is claimed, AC is limiting itself not broadening the scope of the

invention. As Hughes & Woodly on Patents put it at §29:

The claim must disclose the invention but it is not required to

disclose the advantages. However, the claim must not be broader

than the invention disclosed. If the claims include the essence of

the invention, they cannot be broader than the invention.

Overclaiming must be in relation to an essential element of the

invention. If the claim fails to include an element essential to the

invention disclosed, it is invalid. If the claim omits a non-essential

element, it will not be rendered invalid.

[325] The asserted claims do not exceed the invention described in the specification. They all

claim that there will be sensing of the temperature of the exhaust gas which is expelled from the

cylinder. That sensed temperature is used to select an ignition pattern from which an ignition

point will be extracted or the sensed temperature will be used to modify one of a plurality of

basic ignition patterns. The claims with respect to how the temperature will be measured, that is,

with the sensor being in contact with the gas, in the exhaust pipe, do not introduce an element

that was essential to the invention as described in the disclosure. The analogy with Whirlpool,

above, is not apposite.

Page: 146

[326] The purposive construction of the claims must include a fair appreciation of what the

invention is and how it is described in the specification (see Burton Parsons, above, pp 565-566).

BRP has failed to do so. Its overbreadth argument based on its “principle of claim

differentiation” fails.

XII. Inventor

[327] The problem with determining who the inventor is would be in this case the paucity, and

perhaps the lack, of evidence of the contribution to the invention claimed by the inventor. It is

not disputed that a minor contribution will suffice, but that contribution would have to show

ingenuity, and not merely be verification (Drexan Energy Systems Inc v Canada (Commissioner

of Patents), 2014 FC 887 at para 26 [Drexan Energy]). The issue is more to find evidence to

convince the Court that Mr. Spaulding made a contribution such that he is the inventor or one

inventor.

[328] Since inventorship is not defined in the Patent Act, the requirements to qualify as the

inventor will be derived from sections of the Act (Apotex Inc v Wellcome Foundation Ltd, 2002

SCC 77, [2002] 4 SCR 153 [Wellcome SCC]). Considering together the definition of “invention”

and ss. 34(1) (which is now ss. 27(3)) the Court stated again that having a good idea does not

make one an inventor:

97

Section 34(1) requires that at least at the time the patent

application is filed, the specification “correctly and fully describe

the invention ... to enable any person skilled in the art or science to

which it pertains ... to ... use it”. It is therefore not enough to have a

good idea (or, as was said in Christiani, supra, at p. 454, “for a

man to say that an idea floated through his brain”); the ingenious

Page: 147

idea must be “reduced to a definite and practical shape” (ibid.). Of

course, in the steps leading from conception to patentability, the

inventor(s) may utilize the services of others, who may be highly

skilled, but those others will not be co-inventors unless they

participated in the conception as opposed to its verification. As

Jenkins J. notes in May & Baker Ltd. & Ciba Ltd.'s Letters Patent,

Re (1948), 65 R.P.C. 255, at p. 281, the requisite “useful qualities”

of an invention, “must be the inventor's own discovery as opposed

to mere verification by him of previous predictions”.

[My emphasis]

As the Supreme Court had already stated in Shell Oil Co v Canada (Commissioner of Patents),

[1982] 2 SCR 536, “a disembodied idea is not per se patentable. But it will be patentable if it has

a method of practical application. The appellant had shown a method of practical application in

this case” (p 554).

[329] The issue for the Court is therefore to examine the evidence to assess what contribution

was made by Mr. Spaulding such that he qualified as an inventor. Simply postulating a problem

will not contribute enough to be considered an inventor. In the Federal Court of Appeal’s Apotex

v Wellcome Foundation (2000), 10 CPR (4th) 65, Sexton J.A. sought to clarify who an inventor

is in Canadian law:

[30] An invention is defined in section 2 of the Patent Act as:

“invention” means any new and useful art, process,

machine, manufacture or composition of matter, or

any new and useful improvement in any art,

process, machine, manufacture or composition of

matter;

An inventor of an invention must be two things: (i) the person who

first conceives of a new idea or discovers a new thing that is the

invention; and (ii) the person that sets the conception or discovery

into a practical shape.

Page: 148

…

32

It is clear from all of this that, for a person to be considered

an inventor, the invention for which patent protection is sought

must have originated in the inventor's own mind. As Mr. Robert B.

Frost’s textbook Letters Patent for Inventions explains, “a person

will not be considered the true and first inventor if he himself did

not make the invention, or if the idea of it did not originate in his

own mind...”. Likewise, as Maclean P. stated in Gerrard Wire

Tying Machines Co. v. Cary Manufacturing Co., a true inventor

“must not have borrowed [the idea] from anyone else.” Similarly,

Dr. Fox notes that,

[i]n order to be the inventor, the applicant for a

patent must have invented the thing himself, and

not as a result of suggestion by another or as a

result of reading. If it had been in previous use or

available to the public, or if the applicant himself

did not make the invention, or if it did not originate

in his own mind, the applicant cannot be considered

to be in law the inventor.

Finally, in Hughes and Woodley on Patents, the authors explain

that “presenting a problem to another for solution is not an act of

invention.” In law, then, an inventor is that person (or those

persons) whose conception or discovery gives rise to the invention

for which a patent is sought. It should thus be equally clear that a

person who does not conceive the idea or discover the thing is not

an inventor.

[Emphasis in original, footnotes omitted]

[330] Given the conclusion reached about infringement and validity, there is no need to reach a

firm conclusion on inventorship. However, having reviewed the evidence of the stated inventor,

Mr. Spaulding, the Court would have been inclined to find on a balance of probabilities that Mr.

Spaulding is not the inventor on the record presented to the Court. Had there been a contribution,

he would have been expected to have clear and cogent evidence to that effect. What was it,

specifically, and when did that occur? Such was not the case. A concise statement would have

Page: 149

been enough. A document from AC would bring corroboration. That evidence, or something

approaching evidence of the specific contribution of Mr. Spaulding, would have been enough.

[331] Mr. Spaulding said repeatedly during his testimony what he claimed was his invention.

Right at the beginning of his testimony he stated:

Q.

Mr. Spaulding, could you just, generally speaking,

explain what it is that you invented?

A.

My invention is using exhaust gas temperature to

optimize settings, ignition timing on a two-stroke engine.

Q.

And what do you mean by optimize?

A.

To select the – using exhaust gas temperature to

select the optimum ignition timing based on that internal

temperature. The best calibration of timing for a given internal

temperature of the exhaust.

(Transcript, p 2616)

[332] Next, the inventor testified about how the development of the invention took place. In

essence, Mr. Spaulding was asking questions of the AC motorist, the Suzuki Motor Corporation,

and the evidence is that he was receiving suggestions for how to solve problems. The solution

offered did not satisfy Mr. Spaulding. And there is what I have called a “pivot” during his

testimony, when the invention appears to emerge:

Q.

So, you said you weren’t happy with the stage of

development you were at when this was put in the – into the ECU.

So what was the next stage of development?

A.

The next stage was having myself, anyway, kind of

started to move away from a rev limiter type idea towards a two

map system selected by a switch or a button, but whereas the, we’ll

call it a hot/cold switch, whereas the cold setting would select a

timing pattern that did not limit rev, but the timing pattern could be

tailored as far as ignition timing values and such, could be tailored

Page: 150

towards a power curve like this, similar to a 400 degree power

curve when the pipe is cold.

Then when the – as the temperature rises in the system, and

the operator then would switch the – make the switch to the normal

pattern, which would select a timing pattern that was optimized for

the higher internal temperature setting, pipe. So it kind of evolved

into that strategy rather than limiting rev.

(Transcript, p 2653)

Having evolved in his thinking without seemingly telling anyone or constituting a document that

would be made available, the witness testified that he did not advise Suzuki to whom questions

were addressed for fear of confusing his interlocutors:

A.

That is the hot pipe pattern. Then under heading 7,

“Rev Limit Ignition Timing,” that is the cold pipe pattern. So if

you flip the switch on cold, you would have selected that what

they continue to call rev limit ignition timing.

Q.

So why is that being called rev limit timing?

A.

Well, you know, as we kind of had talked about the

progression, it started with the rev limiter and ended up a rev

limiter data installed in the ‘98 model. I had kind of evolved into

a different – more a two map system like the ’99 has here that did

not limit rev. But sometimes with Suzuki – I didn’t want it to

become confusing to them that we change the title of this. For

their benefit I just left it – continued to let them call it a rev

limiter system, yet my path has kind of changed. But it was just

easier communication-wise if I didn’t request that to be changed.

I was afraid of –

Q.

So you left the title and the specification the same,

by you’re saying that it had a different function?

A.

Yes, I left the title. You know, it was easier for

them to call it that, I felt, so I just left it alone I guess.

Q.

So looking at this rev limit ignition timing map, can

you just – if you can explain how this is different than the rev

limit ignition timing map we saw in the ’98 model year

specification, which is P-55?

Page: 151

A.

Well, whereas the ’98 model, if you depress the

button, if it had a button, if you depress it and selected the rev

limit ignition timing pattern, that’s what it would do, it would

limit rev. When you let go of the button, then you would

accelerate, begin the race, whatever the case may be.

This differs in the sense that the entire pattern is different,

and it’s operating on this cold – if the switch is in cold and the

race starts, it’s operating on this cold pipe pattern until it attains a

temperature, in which case it’s switched to the hot pattern. So it’s

different in the sense that the previous idea, the rev limit idea,

simply limited rev. It did have some value in heating up the pipe,

but this ’99 version cold and hot switch could tailor an ignition

timing pattern more towards the power characteristics of a pipe

that was colder.

(Transcript, pp 2656-2657)

[333] The document being reviewed by the witness (exhibit P-56) is the Finalized Engine

Specification for engines delivered by Suzuki, not AC or Mr. Spaulding himself. The witness

then explains that under heading 6 (ignition timing) and 7 (rev limit ignition timing) in the

Engine Specification, these are in fact, patterns.

[334] That leaves something to be desired in terms of evidence of the contribution. The witness

has an idea, but he does not tell his motorist for fear that they will be confused. We now know

that Japanese Application 959 was presented by the Suzuki Motor Corporation, the motorist used

by AC and with whom Mr. Spaulding insisted he was developing engines ten years after the

Application. The 959 Application selects ignition curves on the basis of the sensed exhaust gas

temperature. It is the motorist that developed and made public Japanese Application 959. That is

the same motorist that answered questions about how to resolve issues presented by AC. It would

seem, according to the inventor, that the motorist would not have realized the Finalized Engine

Specification, which it produced, included ignition curves. Mr. Spaulding confirmed that he does

Page: 152

not have corroborating evidence, in the nature of documentation or witnesses, that he contributed

to the invention (Transcript, pp 2704-2705). Even the notes he took during the development of

the invention are mostly related to field tests. Mr. Spaulding was in fact adjusting the calibration

(Transcript, pp 2790-2791) for which he is eminently qualified. When “his” system, his

“technology”, emerges in the form of ignition curves in P-56, it is through the Finalized Engine

Specification delivered by Suzuki. This exchange on cross-examination is telling:

Q.

Is it fair to say that these notes contain nothing as to you

submitting your idea to Suzuki Motor Corporation for an exhaust

gas temperature sensor?

A.

These notes contain nothing pertaining to submitting to

Suzuki?

Q.

A.

Q.

To requesting your idea to Suzuki?

That’s correct. They don’t indicate that

And is it fair to say that this notebook includes nothing

relating to the logic of the control of the ECU that you used on the

ZR 440?

A.

Yes, that’s correct. The logic you’re saying?

Q.

The logic of control. Nothing about the computer program.

Correct?

A.

Correct.

(Transcript, pp 2191-2792)

P-56, the Finalized Engine Specification, discloses two ignition patterns presented as “6. Ignition

Timing” and “7. Rev Limit Ignition Timing”. The inventor now contends that they are in fact

ignition patterns to be selected on the basis of the temperature of the exhaust gas. It is far from

obvious on the face of the document. It is also far from clear what was Mr. Spaulding’s

contribution other than asking questions. There is nothing in evidence, other than the witness

Page: 153

saying that one calibration is for a “hot pipe” and the other for a “cold pipe”, to support the

contention, including what the inventor would have indicated to Suzuki. How did Suzuki learn of

the new system, a new system that has rather similar features to their Application 959, already

ten years old? The evidence fails to articulate where the idea was articulated and how the idea

became a reality with the contribution of Mr. Spaulding. We seem to be much closer to an idea

floating through a brain (Wellcome SCC, above, at para 97) than an actual invention.

[335] There is no doubt that Mr. Spaulding is an excellent calibrator and that calibration plays a

role in the development of an engine. But it may be that his contribution is calibration and how

to maximize the use of tuned pipes. The inventor said this when asked by the Court for a

confirmation that it was his idea, not that of Suzuki’s, that is the subject matter of the 738 Patent:

THE WITNESS:

Our relationship with Suzuki from

the very start, when I was there, was as I explained, to work with

the – first the design of an engine, which they would then produce

for us. Then Arctic Cat would be responsible for the development

of that engine. One part of development is developing the exhaust

system. That was something that Suzuki did not do. They did not

develop pipes, tuned pipes. They didn’t have experience in doing

that. That group had not done that, the snowmobile group that we

worked with for many years.

Absolutely, they were very intelligent people and good

providers of engines, but without having done the development and

testing, and work like that on a two-stroke tuned pipe, you couldn’t

– a person could not understand and get a grasp on what happens

inside a pipe and how it reacts to a two-stroke motor, and they did

just not have that experience.

(Transcript, p 2705)

As explained by the witness himself, the invention is not calibration:

THE WITNESS: Yes, by “my system” I meant the exhaust gas

temperature measurement by sensor to select ignition timing

Page: 154

patterns that are optimum for engine operation at those internal

pipe temperatures.

(Transcript, p 2671)

We are far from providing any explicit contribution to the claimed invention.

[336] For the invention to work, calibration will be needed, but the calibration is not the

invention, in the very words of the inventor. But, where is the evidence of something other than

calibration, finding the right ignition timings for hot and cold pipes? As Justice O’Keefe said in

Drexan Energy, above, verification is not enough.

[337] The cross-examination of Mr. Spaulding showed that he was not concerned with how

results would be attained as long as his general idea, broad concept of using gas temperature to

control ignition timing, was attained.

Q.

But still you consider that these two engines fall within the

scope of your invention?

A.

Q.

Yes.

Because your invention if I understand correctly, is the

broad concept of modifying or correcting or selecting or any other

way to affect ignition timing using exhaust gas temperature sensor

as an input. Right?

A.

Yes.

Q.

So as long as you can have an exhaust gas temperature

sensor, an ECU, and an ignition timing value or pattern or other

parameters relating to ignition timing that will account for this

exhaust gas temperature, this is your invention?

A.

Q.

I believe I’m understanding what you’re saying.

What do you understand?

Page: 155

A.

I’m understanding that regardless of the logic used to

achieve the exhaust gas temperature, the technology selects –

measures exhaust gas temperature, uses that information to select

patterns or ignition timing to optimize the engine in the various

conditions, among other things. As far as ignition timing, I’m

saying that. There are other areas of control.

Q.

And based on that understanding, you say, yes, this is my

invention?

A.

Yes.

Q.

Correction of ignition point versus correction of ignition

timing?

A.

Q.

Yes.

Selection of ignition timing patterns versus selection of

ignition timing point, they both fall within the scope of your

invention, as you see it?

A.

Q.

As I see it, yes.

Calculation of final ignition timing point would still fall

within the scope of your invention?

A. Yes.

(Transcript, pp 2481-2782)

This passage, already referred to in the “Invalidity” section of these reasons, illustrates that not

only is the witness excluding the requirement of an ignition pattern as the notion is defined in the

738 Patent, but he is limiting his invention to the temperature determining the ignition timing.

This idea, which may not be new at any rate, is not made practical by the inventor.

[338] Mr. Spaulding insisted that Figures 4 to 8 in the 738 Patent represent his “pipe sensor

technology”, yet they are merely rough graphical representations of ignition maps for different

temperature ranges of exhaust gas temperature. There was never an explanation for what that

Page: 156

technology might be. When asked what he means by “ my technology”, Mr. Spaulding

answered:

THE WITNESS: What I mean is using the exhaust gas temperature

to select patterns for improvement in performance of a two-stroke

by selecting multiple timing patterns not by – my technology is not

designing a sensor or writing the software required. I guess I look

at those as tools to accomplish measuring temperature and having

it select timing patterns for performance changes on a two-stroke

engine. I don’t know if that –

(Transcript, pp 2706-2707)

[339] The weight of the evidence is to the effect that the ability to select the patterns did not

come from Mr. Spaulding. He claims that his idea was using exhaust gas temperature to select

between the different ignition timing patterns, but he never said how that was to be

accomplished. Actually, figures 2 and 3 of the 738 Patent, two flow chart illustrations, were not

even produced by AC, but came from Suzuki. The flow charts provide examples of how different

patterns (hold, information and normal patterns) can be invoked. The point of the matter is not so

much to discuss figures 2 and 3, but rather to note that the only reference to flow charts and

control logic came from Suzuki. The two flow charts were sent by Suzuki to Mr. Spaulding by

fax on August 31, 1999, barely a few months before the priority date of December 1, 1999 for

U.S. Patent 09/452, 657 and May 10, 2000 for U.S. Patent 09/568,449, the two AC patents.

[340] The description given of his invention, system or technology by the inventor always boils

down to the same thing. It is remarkably similar to what is disclosed in the Application 959. The

Suzuki Application states twice that “[a]dditionally, when the engine speed meets or exceeds a

prescribed speed the engine ignition timing control device controls the ignition timing more on

the lag side than the aforementioned given ignition timing, in response to the engine exhaust

Page: 157

system temperature state detected by the aforementioned exhaust system temperature state

sensor”. The ignition timing operates in response to the sensed exhaust gas temperature. Had the

Court reached the stage that a decision was required on whether he is the inventor, it would have

been difficult to conclude, given the evidence adduced and on a balance of probabilities, that Mr.

Spaulding had more than an idea (Wellcome, above). In fact, the evidence is not at all convincing

that the idea actually came from the stated inventor. The Court can only operate on the basis of

the evidence put forth by the parties and, then, weigh it. On this record, it would seem that the

contribution was more in the nature of asking questions for Suzuki to come up with solutions.

But, even if it is assumed that the idea of having ignition timings correspond to ranges of exhaust

gas temperature, the evidence would fall short of the mark to show that Mr. Spaulding put it in

practical shape.

[341] The testimony of Mr. Spaulding was vague as to what his contribution was other than the

idea having evolved into ignition timings being based on exhaust gas temperature. He seems to

have asked questions and postulated problems for others to solve. If he did provide solutions, he

did not say what they were. We do not have the evidence needed to conclude that he contributed

to the invention beyond the general idea, a general idea that was put in the public domain by

Suzuki.

[342] Hughes and Woodley on Patents put it succinctly at p 130:

The question as to who is an “inventor” has been the subject of less

debate than whether there is an invention; it is the person from

whose mind the invention originated; it is the person whose

conception gives rise to the invention. It is not the person who

postulates the problem, nor the person who carries out the

mechanical acts or testing as to whether the invention will work.

Page: 158

An inventor is not the person who publicizes the work of the real

person who devised the subject matter. An inventor is the person

who conceives the new and useful art, process, machine,

manufacture or composition of matter or any new and useful

improvement thereto, and includes a person who contributes to the

inventive concept; it does not include those whose activity is

directed to verification rather than the original inventive concept.

[343] In this case, the evidence points in the direction of an absence of contribution given the

lack of evidence of what that contribution would have been. At its most basic, the inventor

should have been able to express clearly what his contribution was. Instead, we have P-56, a

document emanating from the motorist, which is not presented as the invention but is the

invention according to the witness. And the testimony never reveals what it is that would have

been conveyed to Suzuki, without creating confusion, that could constitute the invention. Indeed,

no one from Suzuki testified in this case. As pointed out, Suzuki had already considered moving

ignition patterns in reaction to changes in the temperature of exhaust gas some ten years earlier

in search of the optimal ignition timing. There is no convincing evidence of what the

contribution of the “inventor” was on this record, in this case.

[344] AC’s position on inventorship is to claim that the inventor worked with suppliers (Suzuki

for the engine and Kokusan for the controller) to put into practice the invention. However, AC

did not point to what the required contribution might be other than stating there was one. As with

many features of this case, precision has been lacking. The absence of evidence of contribution

from the person who claims to be the inventor is very problematic. Not only there is no

documentary evidence to support a contribution other than a general idea, but the inventor

himself limits his own contribution to having had the idea of using exhaust gas temperature to

Page: 159

select between ignition patterns, an idea that could hardly have startled the motorist Suzuki that

had made public its own Application 959 ten years earlier.

XIII. Conclusion

[345] The difficulty faced by the Plaintiffs in this case was from the very beginning how to

define the purported invention. Indeed, they avoided doing it in a clear and precise fashion in

spite of carrying the burden of proof. If, as the Court has found, the construction of the five

asserted claims leads to the conclusion that the notion of “ignition patterns” is central to the

invention and claims, it is not possible to conclude that the BRP engines violate any of the

claims. BRP is simply practicing a control logic that does require that a plurality of ignition

patterns, each composed of more than one ignition point, will be selected on the basis of the

exhaust gas temperature (claims 40(34), 33(28) and 47(41), the so-called selection claims. The

Plaintiffs encounter the same difficulty in asserting the “modification claims” (claims 11 and 16).

In that case, a plurality of basic ignition patterns are posited. It will be the selected basic pattern

that will be modified based on exhaust gas temperature. Again, the ignition pattern is composed

of more than one ignition point and it will be from the ignition pattern that the ignition point

corresponding to a particular engine speed will be ignited. That is not how the BRP engine is

operating. There is no infringement.

[346] If, on the other hand, one attempts to consider the invention more broadly, as being

merely the use of exhaust gas temperature to optimize ignition timing in a two-stroke engine, the

Plaintiffs are confronted with Application 959 and U.S. Patent 958. One is hard pressed to find

Page: 160

what is new with the 738 Patent. It suffers from obviousness. There is no evidence of

inventiveness in adapting for snowmobile use.

[347] As asked repeatedly by the Court, throughout the trial of this case, what is the invention?

The testimony of the purported inventor did not elucidate the matter. It would have remained

unproven on a balance of probabilities in this case that if there was an invention, the “inventor”

contributed to the invention other than by asking questions the motorist sought to respond to.

However, I have not had to conclude in a formal fashion.

[348] As a result, the action by Arctic Cat must be dismissed. To the extent there is a need to

decide on the counterclaim concerning the validity of the asserted claims in case the Court’s

conclusion on infringement is wrong, the Court finds that the asserted claims are invalid. As a

result, BRP is entitled to the relief sought.

XIV. Damages

[349] In view of the conclusion reached with respect to the issues of infringement and

invalidity of the 738 Patent, it is not, strictly speaking, necessary to address the issue of damages,

had the Patent been ruled to be infringed and valid. This is a case where bifurcation should have

been more carefully assessed. However, I feel that it is useful to offer some observations given

the evidence that was presented to the Court.

Page: 161

[350] The burden is evidently on the shoulders of the Plaintiffs to persuade the Court as to the

amount of damages that have been sustained by the patentee. It is subsections 55(1) and 55(2) of

the Patent Act that govern. They read:

55 (1) A person who infringes 55 (1) Quiconque contrefait un

a patent is liable to the

patentee and to all persons

brevet est responsable envers

le breveté et toute personne se

claiming under the patentee for réclamant de celui-ci du

all damage sustained by the

patentee or by any such

person, after the grant of the

patent, by reason of the

infringement.

dommage que cette

contrefaçon leur a fait subir

après l’octroi du brevet.

(2) A person is liable to pay

reasonable compensation to a

patentee and to all persons

(2) Est responsable envers le

breveté et toute personne se

réclamant de celui-ci, à

claiming under the patentee for concurrence d’une indemnité

any damage sustained by the

patentee or by any of those

persons by reason of any act

raisonnable, quiconque

accomplit un acte leur faisant

subir un dommage entre la date

on the part of that person, after à laquelle la demande de

the application for the patent

became open to public

inspection under section 10

and before the grant of the

patent, that would have

brevet est devenue accessible

au public sous le régime de

l’article 10 et l’octroi du

brevet, dans le cas où cet acte

aurait constitué une

constituted an infringement of contrefaçon si le brevet avait

the patent if the patent had

been granted on the day the

application became open to

public inspection under that

section.

été octroyé à la date où cette

demande est ainsi devenue

accessible.

[351] In the case at bar, subsection 55(2) does not apply. The only task was to assess the

damages sustained by the patentee. In spite of what may appear to be suggested by subsection

55(1), it is impossible in most cases to arrive to some amount with any kind of mathematical

accuracy. This is true in most cases and it is certainly true in this case. The often quoted

paragraph taken from J.R. Short Milling Co. (Canada) Ltd. v Continental Soya Co. and George

Page: 162

Weston Bread and Cakes, Ltd. (1943-44) , 3 Fox’s Patent Cases 18, at p 29, summarizes the

situation faced by trial judges:

In practically all reported cases the judges refer to the difficulty

facing them in such maters [sic] and the impossibility of arriving at

an amount with any kind of mathematical accuracy. Lord Shaw

says that this is accomplished “to a large extent by the exercise of a

sound imagination and the practice of the broad axe”. The words of

Lord Shaw are merely another way of saying that accuracy was

impossible and that imagination must be exercised for or against

the plaintiff. It does not mean that one can be generous, for

damages are by way of compensating the plaintiff and not as a

penalty or punishment of defendant.

Accordingly, a court seeks to order payment of damages that will be considered fair given the

circumstances of a particular case. That is achieved as best as possible on a case by case basis.

[352] The Plaintiffs have chosen to seek damages by way of the establishment of a reasonable

royalty for the use of the invention. As is often the case when the plaintiff is unable to prove lost

sales sustained by the plaintiff because of the infringement, royalties will be used to help

compensate the loss that would have been suffered (Jay-Lor International Inc c Penta Farm

Systems Ltd, 2007 FC 358, 59 CPR (4th) 228) [Jay-Lor International].

[353] The burden of proof resides on the shoulders of the Plaintiff for the patentee must show

by conclusive evidence what the royalty rate should be. The difficulty in a case like this is of

course that the commercial value of the invention is difficult to assess. Moreover, the Court must

strive to compensate the claimed invention solely with respect to damages that can be attributed

to the invention. It is therefore the burden of the Plaintiffs to give evidence that will separate

from the profits realized by the infringer the damages that are as a result of the infringed

Page: 163

invention. Where the invention is but one individual component of a multi-component product,

the damages in the form of royalties must be in order to compensate the infringement of that

individual component of the multi-component product that is captured by the invention. In effect,

the royalty recognizes that the sales by the infringer are an illegal transaction which requires to

be compensated. However, it is only the infringement that requires compensation.

[354] This is not an easy endeavour in a case where the invention is simply and only that the

temperature of the exhaust gas of an engine can be used, through the device of an ignition

pattern, in order to set the ignition timing of an engine. The 738 Patent speaks in terms of

optimizing the performance of the engine, but it does not tell the world how that can be done,

what constitutes optimization or what technology is required to use the “invention”. The inventor

of 738, Mr. Greg Spaulding, spoke in terms of his technology. As I have already indicated, with

all due respect, technology is not what the 738 Patent is all about. As found in the Oxford

Canadian Dictionary, technology means “the study or use of the mechanical arts and applied

sciences.” It is only the application of this to practical tasks in industry. The 738 Patent is not a

technology. It is based on the idea that the exhaust gas temperature would tell someone

knowledgeable things about the engine which could then be improved or deficiencies cured. At

the end of the day, what needs to be done on the damages’ front is to assess how much that

would be worth in a hypothetical negotiation that would lead to an agreement on an appropriate

royalty. What is the value to be derived from such invention?

Page: 164

[355] The Court heard from two expert witnesses who came to significantly different results.

There is no doubt that both experts, Mr. Andrew Carter and Dr. Keith Ugone, are experts in the

field of damage assessment and their expertise was not challenged.

[356] Their task was made remarkably difficult, perhaps impossible, because the invention is

not tangible and the evidence available did not produce a measure of precision. It is the

application of the general idea that there may be correlation between exhaust gas temperature

and ignition timing that is useful. However, that correlation can be useful if it solves problems,

and the Patent is silent as to how the correlation can be used. As the Supreme Court put it in Free

World Trust, above, “the ingenuity of the patent lies not in the identification of a desirable result

but in teaching one particular means to achieve it.” How to assess the value of the general idea

where the true benefit will come from understanding what the exhaust gas temperature tells and

how that information can be used through adjustments to the ignition timing is a different

endeavour, given in particular the many uses that can be made of the exhaust gas temperature

according to the Patent. It may be said that the invention is necessary but it is certainly not

sufficient to have the means to use it. The inventor, Mr. Spaulding, confirmed during the trial

that his invention is practiced by AC. However, he never indicated to the Court to what effect the

invention was used.

A.

Mr. A. Carter for the Plaintiffs

[357] Mr. Carter approached the issue of assessing damages through four methods that could be

used to reach an appropriate royalty. For a reason that remains unclear, Mr. Carter repeated in his

Page: 165

expert report on a few occasions that he believed that AC had lost sales, together with convoyed

sales, because of the alleged infringement of BRP. It is unclear how that can be relevant to the

exercise undertaken. It is equally unclear what the evidence could be to support such contention

given the fact that the invention appears to have remained largely unknown in the market place.

There does not seem to have been much effort on the part of AC, and BRP, to market the

advantage conferred by the invention. Similarly, he spoke of conveyed sales (pages 89, 32 and

33 of his report, P-61) yet this is only relevant if sales had been lost due to the infringement

which he acknowledged he was not asserting because these cannot be assessed. As a result, these

comments must be discounted and they carry no weight.

[358] Similarly, has been cruelly deficient in this case how the Patent was practiced and thus

what value is to be attributed to invention either by AC or BRP. The Court has not had the

benefit of the value associated not only with the invention, but with the use that may have been

made of the invention in view of the numerous possible applications, as disclosed in the

specification.

[359] I readily accept the characterization of the royalty as being the product of seeking to

attempt to reach an agreement between willing participants, as described in Jay-Lor

International, above. We read:

125

A reasonable royalty rate has been described as “that which

the infringer would have had to pay if, instead of infringing the

Patent, [the infringer] had come to be licensed under the Patent

The test is what rate would result from negotiations between a

willing licensor and a willing licensee” (AlliedSignal, above at

176).

126

This notion is premised on the assumption that someone

who wishes to use patented technology would normally have

Page: 166

sought permission and been willing to pay a royalty for its use. The

patentee, if prepared to license its invention, would then negotiate

the terms of the licence, including the amount of royalty, with the

intended licensee. The construct is obviously artificial in the sense

that the infringer, in this case, did not make the choice to seek

permission from the patentee when it began to use the patented

technology in its own device. Assumptions on how parties might

have negotiated must be made. However, licensing is a very

common practice in the intellectual property field and has

developed into an area of academic study. […]

[360] Here, Mr. Carter proposes four different methods for reaching an appropriate royalty rate.

Without the assistance of the expert at trial, it would have been difficult to understand how he

reached his conclusions on the sole basis of his report. It could be said that the report was

somewhat deficient in the requirement, in accordance with the Code of Conduct for Expert

Witnesses adopted pursuant to Rule 52.2 of the Federal Courts Rules, that “the reasons for each

opinion expressed be included”. The way the report was framed certainly did not make an

understanding of the report any easier.

[361] Be that as it may, here is a summary of the four methods.

(1)

The expert compared two engines produced by BRP. One engine, the 800 P-TEC

does not practice the invention. That engine was compared to the 800 E-TEC

which practices the invention. That engine is a direct injection engine which does

not use a carburetor.

[362] The expert sought to derive the profit premium between the two snowmobiles. The

method does not seek to compare purely on the basis of the practiced invention, but rather

compares the two snowmobiles as opposed to, for instance, comparing the two ECUs in which

resides the functionality that is protected by the Patent, or the two engines. In effect, the expert is

Page: 167

comparing the contribution margins derived by BRP for a P-TEC snowmobile and for an E-TEC

snowmobile, the difference between the two including, presumably, a percentage of the

contribution to account for the new engine featuring the invention. It is not disputed that BRP’s

E-TEC engines practice the use of the exhaust gas temperature to adjust ignition timing.

[363] The expert then goes on to review a number of so called “snowmobile bench marks

studies” conducted by BRP during years 2007 to 2013. The expert chose factors identified by the

respondents as having some importance in choosing a particular model. Three of an often long

list of factors were retained by the expert: engine power, reliability and acceleration. It appears

that the expert considered that these three factors are proxies for the attributes related to the

invention in issue in this case. The expert then proceeds to add the percentage of respondents

who have identified these factors, that summation being then divided by the addition of all the

percentages associated with the totality of the factors received (which is significantly higher than

100%). In the view of the expert, this yields a relative importance of the factors; the percentage

thus obtained is described as being the ratio of reliability, engine power and acceleration to all

factors. These ratios per year are the following: [REDACTED].

[364] The expert then goes on to multiply the two percentages at both ends of the range

([REDACTED] and [REDACTED]) with the so called “profit premium range” of whole

snowmobiles between the 800 P-TEK model and the 800 E-TEC model for model-years 2012,

2013 and 2014, to reach a so-called “royalty indicator” derived from the increase in the BRP’s

profitability of $[REDACTED] to $[REDACTED] [[REDACTED]% (being the ratio of the

relative importance of factors in 2013) x $[REDACTED] (being the profit premium for the 800

Page: 168

E-TEC snowmobile over the 800 P-TEK for 2012) and [REDACTED]% (being the ratio of the

relative importance of factors in 2012) x $[REDACTED] (being the profit premium for 2014)].

[365] There are evidently numerous issues with such an approach. For starters, the Patent is

concerned with a functionality in an engine control unit and the expert is comparing the

profitability of whole snowmobiles. Furthermore, other than lacking a conceptual underpinning,

which is a considerable flaw in and of itself, this approach assumed that reliability, engine power

and acceleration account for the invention when, in fact, it is more than likely that factors such as

reliability and engine power are affected by much more than the invention. To put it another

way, this approach overvalues, on its face, the invention in the assessment of royalties.

[366] Actually, the invention itself does not give any indication as to how to use it to enhance

reliability or improve the performance of the engine: it merely indicates that exhaust gas

temperature can be used to adjust the ignition timing with a view to optimizing performance and

avoiding engine problems. The percentages themselves are subject to significant criticism in that

the [REDACTED]% is derived from a survey that is very different from the other surveys. The

factors that were listed are much more limited and, on its face, the percentage for each is

significantly higher than anything else that was being considered elsewhere. The survey chosen

to derive a [REDACTED]% is evidently significantly a-typical.

[367] It is also possible to consider an element of double counting in these surveys where what

is being added is percentages of purchasers who would consider acceleration and engine power

as being relevant. These are close cousins and using these figures without more may have the

Page: 169

effect of over valuing the factors that the expert deems relevant to the invention under

consideration. The profit premium is of course very sensitive to percentages in this model.

Double counting affects significantly the profit premium and the methodology chosen does not

attempt to address the issue.

[368] Understandably, the expert did not seek to defend this approach. He acknowledged

readily that there may be “other non-patented or non-accused elements of a snowmobile that

contribute to these categories in the BRP studied as well”. We do not even know why it was

offered in the first place. In other words, many pages were spent constructing the equivalent of a

straw man.

(2)

The second method put forth by Mr. Carter was, in fact, a variation on the theme

summarized under (1). This time, instead of multiplying the contribution margins

derived from the difference from the contribution margin for the E-TEC

snowmobile and for the P-TEC snowmobile, amounts that reach $[REDACTED]

in 2012 and $[REDACTED] in 2014, the expert multiplied these figures by a

market share of 20%, which would represent the patent holders’ market share. He

arrives at figures of $[REDACTED] (20% of $[REDACTED]) and

$[REDACTED] (20% of $[REDACTED]).

[369] Obviously, this method suffers from the same infirmity suffered by the method presented

in (1) because it assumes that the profitability difference between the E-TEC and the P-TEC

snowmobile is a function of the invention. It takes the difference between the contribution

margins and seems to posit that they represent the difference between the two that is coming

from the invention. Obviously, such cannot be the case, or at least, there is nothing in the

evidence, or shown by the expert, to support that hypothesis. Indeed, if the difference came only

from the accused invention, one would be hard-pressed to explain how the difference can grow

Page: 170

from $[REDACTED] to $[REDACTED] over a period of three years (a growth of

[REDACTED]% over three years). The contribution to the profitability associated with the

invention should be relatively stable according to the model offered by the expert. Clearly, the

contribution margins are constituted of elements other than the accused invention.

[370] Once again, the expert did not defend strenuously, or otherwise, this method, thus

creating another straw man. Far from defending, he made, appropriately in my view, the same

concession as was made with the first method.

(3)

Mr. Carter compared the additional profit that BRP was expecting for its new 600

E-TEC engine as it was comparing it to its “600” semi-direct injection engine.

The expert indicates that BRP was projecting an increased retail price attributable

to the direct-injection engine of $[REDACTED]/unit. Given that BRP in 2002

expected that some additional costs for the production for the E-TEC engine

would be $[REDACTED], Mr. Carter projected an incremental profit of between

$[REDACTED] and $[REDACTED] that would be associated with moving to the

E-TEC technology, which included the invention.

[371] This method has the advantage of seeking to bring the analysis down to the functionality

by moving away from contributions between whole snowmobiles to bring the focus on the

engine. For a reason that remains obscure, the expert would then split the profits equally between

AC and BRP, simply indicating that it would be in an effort to be conservative. At trial, Mr.

Carter contended that he was of the view that the percentage should be higher than 50% but

would recommend that 50% be used. There was no rhyme or reason that I could decipher for

why a royalty of 50% of the profit derived from the new engine would be appropriate for a

functionality located in the ECM and would be acceptable to BRP. At any rate, the royalty that

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would need to be paid by BRP according to this method would be situated between

$[REDACTED] and $[REDACTED] CAD per unit sold by BRP.

[372] There is a complete lack of information and analysis as to what would be included in the

profitability of a direct injection engine proposed by BRP. This method suffers from some of the

same general infirmities as the other two. It is probably an improvement that this method

considers the added profitability of the engine as opposed to the whole snowmobile. Accepting

that the profit of $[REDACTED] to be made would come from the new direct injection engine, it

is far from clear that the invention can be seen as explaining alone the profit. What is sold is a

new direct injection engine. The invention would be merely an appendage. Although it is

undoubtedly true that the invention had value for BRP as it identified early that it could be of

interest for its new direct injection engines, it is clear that much work would have been required

to turn the idea that exhaust gas temperature could be used to adjust timing ignition for a useful

purpose, in view of a complete lack of information in the Patent, into the product that would

address performance and reliability issues. The question that is left without answer is to what

effect the invention was used and what value can therefore be ascribed to it. To his credit, the

expert was simply using the figures that are available on this record and that come from BRP. On

the other hand, no effort was made to be more circumspect or to provide some analysis, even in

rough form, of the relative contribution of the invention to the profit compared to the profit

generated by the E-TEC engine. At any rate, clearly the expert did not believe in his own method

in view of the lack of analysis. He certainly did not dwell on the methodology: half a page of a

89-page report was dedicated to that option. I would have thought that the methodology deserved

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better as it may have proven to be a sound basis for some assessment of damages using a royalty

arrived at through negotiations.

(4)

The preferred method offered by the expert is his comparison of AC snowmobiles

using model year 2005, where the engine does not include the invention, and

model year 2006, where the said invention is included.

[373] It was the expert’s claim that the AC models considered (the F6 Firecat EFI and EFI X in

2005 and the F6 Firecat EFI and EFI R in 2006) generated contribution margins that would have

to come from the invention. In his report, the expert writes that “thus, the vast majority of the

difference in incremental profitability between these two years can be attributed to the patented

technology” (p 39 of Mr. Carter’s report). Unfortunately, this conclusion is based on a rather

crude comparison of the models, without even trying to assess the use the invention was put to

and the value generated by the invention itself.

[374] This methodology is based on very little. There is no indication as to how the invention

was used by AC in its 2006 model, only that it was. This contention is derived from the presence

of an exhaust gas temperature sensor on the 2006 model. It must be stressed that this

methodology used the snowmobile manufactured by AC. There is no reason in my view why a

more sophisticated analysis of the use made of the invention and its relative value was not

offered. The expert was using the Plaintiffs’ snowmobiles after all. No evidence was led by the

Plaintiffs about the actual use of their invention which would have assisted their own expert if he

was to rely on the profitability of AC’s snowmobiles to establish an appropriate royalty. It was

disappointing that the promise made at the beginning of the report’s chapter discussing the

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comparison of the AC F series snowmobiles did not bear fruits. The report claims that “[t]he

determination of a reasonable royalty, in simple economic terms, involves valuing intangible

asset(s) and determining what a user would pay for the use of the asset(s)” (p 30). It is a view

shared by the Court. But that was not done. It is the value of the intangible asset that must be

assessed, and that was not performed. It is only the value of the asset that can be the subject of a

royalty. Without some understanding of the use made of the invention, the assessment of the

value of the invention can only be lacking and produce crude results. Given that AC is using its

own snowmobiles in this method, I can see no reason why the use made of the invention was not

part of the evidence.

[375] Instead of a nuanced analysis supported by evidence about the use made of the intangible

asset in reality and the efforts made to promote its use such that the consumer could ascribe a

value on what is new and useful, the best that was offered is a comparison of contribution

margins of the snowmobiles as a whole. If contribution margins of snowmobiles are to be the

sole basis for establishing a royalty base, a careful analysis would have been expected and

contribution margins better be robust in order to be solid indicators of the value that can be

attributed to the invention. After all, the expert accepted in his method (3) that the BRP engine

generated a contribution of $[REDACTED].

[376] In this case, it would appear to me that this approach has some of the same deficiencies as

identified with other methods. When considering carefully figure 16 of the expert’s report, which

compares contribution margins between snowmobiles, and keeping in mind that what needs to be

compensated is only the infringement of the Patent and not factors that contribute to profitability

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other than those coming from the invention, one is hard pressed to understand how those

contribution margins are arrived at. For instance, when comparing the 2005 F6-EFI R to the F6

EFI of the same year, one sees that there is a difference of $[REDACTED] in the contribution

margin per unit in favor of the “R” (R would indicate a reverse function on the snowmobile).

Accordingly, one would expect that when considering the same comparison between the F6-EFI

R and the F6-EFI for year 2006, where the invention is somehow practiced we are told, the EFI

R should bring a contribution margin higher by $[REDACTED] than that of the EFI. That is not

what the evidence would reveal. The difference between the two contribution margins shrinks by

56%, to $[REDACTED]. While the difference between the contribution margins for the F6 EFI

for years 2005 and 2006 is indicated to be $[REDACTED], the difference between the F6 EFI R

is less, at only $[REDACTED]. Why is there such a difference between contribution margins for

what is supposedly the same feature?

[377] Furthermore, we know from figure 15 that the suggested retail price of the EFI in 2005

and the EFI in 2006 have increased by a mere $250. The same is true with respect to the other

snowmobile that is compared between the years 2005 and 2006, the F6 Fire Cat EFI Snow Pro.

In spite of that slight increase of $250, the average sales prices per unit for the three models

under consideration grew by an average of $[REDACTED], while the sales of units of the three

models having decreased by some 16% year over year. Furthermore, the average sales price is

itself considerably higher than the suggested retail price. Hence the suggested retail price for the

2006 EFI model is indicated to be $[REDACTED], after an increase of $250 from the 2005

model, while the average sales price is $[REDACTED]. One possible explanation is that the

sales price includes other features such as improvements (e.g. electric start, high windshield) in

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the nature of optional equipment, and garments and accessories. These increase the contribution

margins possibly by hundreds of dollars, yet they should not be considered in order to calculate

the contribution margins attributable to the invention. At any rate, there was no explanation

provided for those differences. Indeed, the invention was not even marketed.

[378] It is clear that the contribution margins cannot be a reliable indicator. This is made even

more so where the significant variability of the margins is observed between different colours of

the same snowmobile. According to Exhibits 7.3 and 7.4 of Mr. Carter’s report, two F6 EFI

snowmobiles in 2005 have a difference of $[REDACTED] in their contribution margins where

the only difference was the colour of the snowmobile (black at $[REDACTED] and green at

$[REDACTED]). What is even more surprising than the difference based on colour is the fact

that the same F6 EFI snowmobiles, but for year 2006, have contribution margins where the black

snowmobile’s contribution of $[REDACTED], from $[REDACTED], an increase of 26%, while

the green snowmobile has a contribution margin of $[REDACTED] in 2006, an increase of

barely 4%. As a result, the profitability of the black snowmobile becomes better, compared to

that of the green snowmobile, in 2006. No explanation was offered for why contribution margins

would be different between colours during the same year, and would vary wildly between years.

The point of the matter is that the measure of the contribution margins is simply unreliable.

Without any analysis explaining the rather wild variation, the contribution margins can only be

of little assistance, if any, in deriving indicators of the value of the invention. There is also the

fact other features of a snowmobile such as the shocks, which are said to be an important feature

(testimony of Mr. Guy), used on the 2006 model of the EFI and EFI R are branded as opposed to

the shocks on the 2005 EFI model which are without a brand (Arctic Cat gas (IFP) shocks).

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[379] There is no evidence on this record of any consideration being given to changes in

consumer demand, the marketing efforts or discounts offered. The record does not even show

how the invention was used and to what effect.

[380] In the end, the Court is left with an expert’s opinion which relies exclusively on some

contribution margins for its own snowmobiles to be used to assess the royalty that a competitor

would be willing to pay for the use of an intangible product. In order to be of assistance, the

contribution margins used must themselves be unassailable if nothing more precise is offered. In

the instant case, the expert chose the contribution difference between the F6 EFI R of 2005 and

that of 2006 ($[REDACTED]), divided it by two (in order to be conservative he says) and came

up with a royalty figure of $[REDACTED]/unit. He could have gone for the contribution

difference between the 2005 and 2006 models of the F6 EFI ($[REDACTED]) or the difference

between the EFI Sno Pro ($[REDACTED]). A weighted average of the considered F6 models

would have generated a difference of $[REDACTED]. However, these contributions by model

only show that the contributions are sensitive to a variety of factors. What remained unknown is

what are the elements of the chosen contribution margin. How much of the $[REDACTED]/unit

can be reasonably attributed to the invention?

[381] The theoretical underpinnings of this approach are unknown and the choice made of a

number over another is not supported by any explanation, let alone evidence. With 125 000

accused snowmobiles, that constitutes a significant difference: at $[REDACTED]/unit, the

damages reach $[REDACTED]; if is used the weighted average of $[REDACTED], the damages

reach $[REDACTED]; using the difference in contribution margins for the most expensive

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model ($[REDACTED]/unit) the damages are upwards of $[REDACTED]. There was never any

effort made to evaluate the contribution of the intangible asset to the new engine, and what was

the contribution of the new engine to the increased profitability of the new snowmobiles. One

would have thought that possible when the Plaintiffs are using their own snowmobiles.

[382] The purpose in listing those difficulties is not so much to conduct some nit picking

operation, but rather to show that the approach favored by the expert has its own warts as do the

other methods, presented by the expert but not defended. It is very much unclear what those

contribution margins per unit include, other than the invention. As already pointed out, that

invention is itself very significantly limited and, in my view, it requires a significant leap of faith

to accept any of the methodologies that are offered by the expert. As already pointed out, the

burden is on AC to show in a persuasive manner that the proposed royalties will compensate

only the infringement of the Patent and it would be inappropriate to seek to compensate other

elements that are part of the profitability of the snowmobile.

[383] In Monsanto Canada Inc v Schmeiser, 2004 SCC 34, [2004] 1 SCR 902, the Supreme

Court stated:

101. It is settled law that the inventor is only entitled to that

portion of the infringer's profit which is causally attributable to the

invention: Lubrizol Corp. v. Imperial Oil Ltd., [1997] 2 F.C. 3

(C.A.); Celanese International Corp. v. BP Chemicals Ltd., [1999]

R.P.C. 203 (Pat. Ct.), at para. 37. This is consistent with the

general law on awarding non-punitive remedies: “[I]t is essential

that the losses made good are only those which, on a common

sense view of causation, were caused by the breach” (Canson

Enterprises Ltd. v. Boughton & Co., [1991] 3 S.C.R. 534, at p. 556,

per McLachlin J. (as she then was), quoted with approval by

Binnie J. for the Court in Cadbury Schweppes Inc. v. FBI Foods

Ltd., [1999] 1 S.C.R. 142, at para. 93).

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Although stated in the context of an accounting of profits, the principle remains the same for

other methods to assess the damages suffered. Surely, the awarding of damages must avoid

unjust enrichment.

[384] It follows that the royalty figures offered by AC were to be subject to very serious

caution. In my view, they are all derived from methodologies that are so crude and deficient as to

being of little assistance to the Court. Mr. Carter’s favoured method is, for all intents and

purposes, comparing flawed contribution margins of two snowmobiles manufactured by AC in

2005 and 2006. The expert has not satisfied his burden of showing that the royalty is limited to a

compensation of the invention. Indeed, we do not know how the invention is used. That

information ought to have been available given that he was comparing engines manufactured by

AC. He assumes that comparing snowmobiles, and the snowmobiles of his clients at that, as

opposed, for instance, to a smaller, or the smallest saleable unit that is part of the snowmobile,

can produce reliable results. In order to alleviate the concern that comparing the snowmobile’s

profitability may generate overvaluation, the expert tried to compare within the AC family of

snowmobiles two snowmobiles that are in his view similar. For the reasons already given, I have

come to the conclusion that he has not been successful in convincing the Court of any of the

methodologies in so doing.

[385] Instead, we have an expert who concluded that “using these quantitative royalty

indicators (that includes the four methods already described), and mindful of the qualitative

factors in AlliedSignal Inc v Du Pont Canada Inc (1998), 78 CPR (3d) 129 and (1999), 86 CPR

(3d) 324 [AlliedSignal], it is my opinion that the parties would have agreed on a royalty of

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$[REDACTED] CAD per infringing BRP snowmobile. Such a royalty would be consistent with

the lower end of the majority of quantitative indicators noted above”. With the greatest of

respect, the Court is expecting more and better. Producing four methods, three of which are

rejected out of hand by the expert, in order to favour a comparison between snowmobiles

produced by AC falls short of making a demonstration that the invention is worth the kind of

royalty that is derived from very limited evidence, which, itself, has its own flaws and

deficiencies. That was the Plaintiff’s burden and the Plaintiff has not discharged that burden.

[386] However, I would not mean to suggest that no royalty would be payable. Rather, the

Court was looking for a methodology that would produce a royalty commensurate with the

invention.

B.

Dr. Ugone for the Defendant

[387] Unfortunately, the evidence offered by the expert retained by BRP is also flawed and

would have been of limited assistance. The evidence of both experts suffers from artificiality.

While Mr. Carter , for AC, derived a royalty of $[REDACTED]/unit, Dr. Ugone, for BRP, came

up with a range between $4.60 and $7.50 per unit using three methods:



Incremental cost-based apportionment

Relative cost and inputs-based apportionment

Accused functionality usage-based apportionment

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[388] Dr. Ugone asserts that the infringer’s anticipated profits must be the starting point. His

evidence is that BRP was anticipating a profit of $[REDACTED]/unit on account of a new

engine in November 2004 for the 600 E-TEC engine. Given that the invention is not the engine,

there is a need to apportion the profit associated with the invention in the new direct injection

engine, such that only that which is derived from the invention could be made the subject of a

royalty. I agree. He referred to the three methods to which he gave catchy names as

accomplishing the apportionment.

(1)

Incremental cost-based apportionment

[389] Dr. Ugone is here using the cost associated with two BRP engines: the 600 HO SDI and

the 600 HO E-TEC, one being a semi-direct injection engine and the other practicing the

invention being a direct injection engine (the E-TEC). The total cost of each engine being known

($[REDACTED] for the SDI and $[REDACTED] for the E-TEC), together with the engine

control module (ECM) and sensors for ignition timing ($[REDACTED] for the SDI and

$[REDACTED] for the E-TEC), the expert simply produced the ratio of the cost of the ECM to

the total cost of the engine for the two snowmobiles. The percentage thus obtained for the SDI,

[REDACTED]% ([REDACTED]), is then subtracted from the percentage for the E-TEC,

[REDACTED]% ([REDACTED]). The expert merely declares that the incremental cost

percentage can be used to apportion the increased profit associated with the invention. He does

not say how.

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[390] The relative cost of the ECM is higher for the direct injection engine than for the semi-

direct injection engine. But there is no explanation given and it is unknown how the “model”

could operate under different circumstances. Without the theoretical underpinnings for the

model, they appear to be convenient numbers for the purpose of this case, no more. It is not

known either on this record what portion of the extra costs within the ECM can be attributed to

the invention or what other savings were realized on the cost of the engine such that the increase

in the cost of the ECM is $[REDACTED]/unit, but the cost of the whole engine increases by a

mere $[REDACTED]/unit.

[391] The [REDACTED]% ([REDACTED]%- [REDACTED]%) was called by the expert

“incremental” cost percentage of the accused ECM: Dr. Ugone would then simply multiply

[REDACTED]% by the anticipated profit to arrive at a profit said to be associated with the ECM

of $5.47/unit ([REDACTED]% of $[REDACTED]) which becomes an increase in direct profit

associated with the ECM. How the percentage of “y” can be subtracted from the percentage of

“x” to obtain something useful remains a mystery in spite of the questions from the Court. The

model seems to be saying this. Once you establish the relative cost of the ECM (which contains

the invention) to the accused engine cost ([REDACTED]%) and you compare it to the relative

cost of an ECM (without the invention) to the cost of that old engine ([REDACTED]%), that

comparison tells you something about the cost of the invention. How does such a comparison

reach that result is unknown.

[392] The expert was never able to explain the concept behind the model. It is attractive by its

simplicity. But is it simplistic? The equation simply posits:

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Cost of accused ECM relative to cost of engine

Cost of ECM of SDI relative to cost of engine

Incremental cost percentage

-

The equation begs the question: the incremental cost percentage of what? And what does a

subtraction of relative costs of ECM tell anything about the cost of the functionality within the

ECM? Clearly ^{cost of ECM}

/_{cost of engine}tells the relative cost of the ECM. But what about the accused

functionality? If there is an apportionment based on incremental costs, it should be the

incremental cost of the accused functionality, which helps generate a profit, that should be

considered.

[393] If incremental costs are driving the analysis, why not evaluate directly the percentage of

increase between the cost of the ECM for the SDI engine ($[REDACTED]) and that of the ECM

for the E-TEC engine ($[REDACTED]), which is [REDACTED]%, generating a profit margin

of $[REDACTED]/unit. An increase in the cost of the ECM of [REDACTED]% helps to

generate a profit of $[REDACTED] for a whole engine, the cost of that whole engine being

relatively stable ($[REDACTED] vs $[REDACTED], an increase of [REDACTED]%). That

takes the direct profit to $[REDACTED]/unit, not $5.47/unit. That approach is likely no more

principled than that offered by the expert, yet both approaches could probably qualify as being

based on an incremental cost-based apportionment, but with results dramatically different. This

method assumes that the increase in the ECM cost is due solely to the new functionality. Had it

been established that the [REDACTED]% increase, or a smaller percentage in view of the fact

that the ECM includes features relevant to a direct injection engine but not related to the

functionality that constitutes the invention, it may have provided some basis. I would have

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concluded that the method presented by the expert cannot offer an acceptable basis for assessing

a royalty and being the basis of some virtual negotiation.

(2)

Relative cost and inputs-based apportionment

[394] The second method offered by Dr. Ugone is also to estimate a direct profit as a function

of the cost associated with the new ECM for the E-TEC engine that is practicing the invention.

Having established that the ECM and sensors cost $[REDACTED] (compared to

$[REDACTED] for the SDI engine), which represents [REDACTED]% of the total cost of the

engine ($[REDACTED]), the expert apportions [REDACTED]% of the anticipated profit on the

E-TEC engine to the ECM. Because the ECM represents [REDACTED]% of the cost of the

engine, [REDACTED]% of the profits associated with the new engine are apportioned to the

ECM. Accordingly, the profit allocated to the ECM is $[REDACTED]/unit ([REDACTED]% of

$[REDACTED]).

[395] However, the model does not end here. The expert goes on to identify 14 inputs that are

managed by the ECM, only three of which would be used in dealing with the engine

management system of the new accused engine. He then multiplies the profit allocated to the

ECM ($[REDACTED]) by [REDACTED] ([REDACTED]%) to arrive at an increase of direct

profit attributable to the invention of $6.77/unit.

[396] There are issues with this method as applied by the expert. There is no indication of why

the cost of the ECM would produce a profit directly proportional to the profitability of the whole

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engine. There is no effort made either to understand the importance that the ECM truly has on

the profitability of the new direct injection engine.

[397] Moreover, while this analysis is meant to identify the marginal profit that would be

coming from the ECM’s inputs relevant to the invention, the expert chooses to recognize three of

14 inputs as being useful in the use of the invention. However, it was conceded on cross-

examination by Dr. Ugone that many of the 14 inputs were also part of the ECM of the 600 HO

SDI. That suggests that the cost of those inputs is already accounted for in the ECM of the semi-

direct injection engine (cost of the ECM being $[REDACTED]). If the additional profit

anticipated from the E-TEC engine ($[REDACTED]) has to come from the ECM which

represents [REDACTED]% of the total cost of the engine, it is not clear, and the expert does not

explain, why 14 inputs are considered if the same inputs are found on the old ECM. In other

words, if $[REDACTED] is the incremental profit derived from the new direct injection engine

and if it is fair to consider that only [REDACTED]% of the total profit from the engine comes

from the ECM, then only those inputs that will contribute to that incremental profitability of the

direct injection engine should be counted.

[398] As the expert readily acknowledges himself in his report, $[REDACTED]/unit represents,

assuming direct proportionality between increased cost and increased profitability, the increased

profit from the introduction of the new ECM of the direct injection engine in the E-TEC model

which is expected to generate a profit of $[REDACTED]. That kind of marginal analysis, in

order to be consistent, would have to continue throughout. However, the methodology appears to

be deficient on that front.

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[399] By choosing 3/14 of all the inputs, Dr. Ugone does not differentiate between inputs

already accounted for in the SDI engine, which presumably account for the profitability of that

old ECM, and new inputs needed for the new direct injection. From those inputs needed for the

new engine would be extracted those that are specific to the invention. If, for instance, only

seven new inputs are needed for the direct injection engine, it would not be 3/14 of all inputs that

would be relevant to the relative cost and inputs-based apportionment but, instead, 3/7.

[400] To put it another way, what needs to be apportioned at this stage are the inputs in the

ECM that relate to the invention, not those inputs already accounted for in the SDI engine.

Mathematically, that suggests that, while the numerator would remain at 3 (since these are the

inputs related to the invention), the denominator would be less than 14 as many of those same

inputs are already accounted for in the profitability of the SDI engine. I repeat,

$[REDACTED]/unit is the marginal, or additional profit, anticipated by BRP for its new engine.

Only that which contributes to this marginal profit should be used; if it is true that the marginal

profit of $[REDACTED] is not due entirely to the invention, it would appear reasonable that a

marginal analysis should seek to differentiate only the ECM inputs that relate to the invention,

but not those inputs that come from the old SDI engine.

[401] In considering the list of 14 inputs, one is struck by many of them as not relating, most

probably, to the uniqueness of the direct injection engine: (1) air pressure sensor, (2) air

temperature sensor, (3) coolant temperature sensor, (4) battery voltage, (5) the start/RER button,

(6) oil level, (7) the digitally encoded security system. There is no evidence on this record of

what these inputs control and it would be imprudent to conclude one way or the other. Actually,

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other inputs may not have anything to do with the new direct injection engine. Conversely, it

may be that some inputs, though already in the ECU of the SDI engines, had to be adjusted or

even improved. The record is simply silent. Similarly, the same weight is given to every input in

this model, although it is likely that some are more important than others.

[402] The point however is that crude calculations are oftentimes very sensitive to changes.

Here, if instead of 14 inputs the number of inputs relevant to the new direct injection engine is

rather 7, the increased direct profit attributable to the invention doubles to $13.56/unit. That

amount is evidently revised upwards if is taken into account the relative importance the units of

the ECM have in achieving the $[REDACTED] profit anticipated by BRP. As per Dr. Ugone’s

model, the profitability of the ECM is directly proportional to the cost of the ECM, without any

indication of the true importance of the ECM in the operation of the engine. Some refinement

would have been welcome.

[403] Even without the more refined evidence, Dr. Ugone’s second model could probably have

been of some assistance in the wielding of the broad axe that is required in the assessment of

damages. I note that Mr. Carter’s third method uses the same basic rationale, that is that the

increased profitability of the new engine would be the basis for a royalty. Mr. Carter would take

half of the new profitability of the engine and allocate it to AC. To be of better use, more and

better evidence would have been needed to assess the true value of the ECM compared to the

profit anticipated from the whole engine, as well as a better understanding of the inputs now

found in the ECM which also contribute to the direct injection engine without being related to

the practiced engine. Another approach could have been to use the more appropriate number as

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the starting point in the virtual negotiation. The number would have been adjusted in further

consideration of the 13 factors.

(3)

Accused functionality usage-based apportionment

[404] This third methodology would appear to be founded on the notion that the more an

invention is used, the more value it carries.

[405] There are many difficulties with the use that is made if this methodology. The

calculations that were made, and were never amended, relied on evidence that was ruled

inadmissible. BRP tried to introduce into evidence reports that account for testing conducted on

the use that is made of the invention. Because there is no admissible evidence regarding the

testing conducted, the results carry no weight (ruling of January 22, 2016).

[406] Nevertheless, it is perhaps worth commenting on the concept put forth by the expert. As

already indicated, the general idea is simple enough. In order to put it into application, Dr. Ugone

received information to the effect that the invention would be in use only for the E-TEC engines

where the throttle position is at 70% of its capacity or more. That is a choice that has been made

by BRP. That, according to the evidence ruled inadmissible, could happen 2.7% to 4.4% of the

time for the E-TEC engines. According to evidence properly before the Court, although of

limited weight and probative value, it would generally be between 3% and 5% of the time, with

the possibility of rising to 10% for the throttle to be open at 70% capacity. These low

percentages are explained by the fact that a 70% throttle position generates very high speeds that

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cannot be sustained by most riders. These numbers are subject to significant caution as they

come from a BRP engineer’s own personal experience (Mr. Schuehmacher). It is a rather tenuous

position to take to rely on such thin evidence to establish a royalty base.

[407] From what we can understand, the engine that is operating at 70% of the throttle position

could experience engine misses (“hiccups”) of short duration, but they would be perceived by the

rider. It would have been thought at the time a negotiation would have taken place on a royalty

that the invention could alleviate that phenomenon. Nothing is said about the performance

enhancements that could result from the practice of the 738 Patent in this part of the expert’s

evidence. It is as if the only use that can be made of the invention is to remedy engine misses.

BRP, in argument, contended that AC’s case on damages “hinges on linking its invention to

BRP’s so called “engine miss problem”“ (memorandum of facts and law, para 164). This is

surprising because none of the methodologies offered by Mr. Carter hinge only on linking the

invention with engine misses. In fact, two of his methodologies refer directly to surveys where

the factors considered relevant for the invention are reliability, power and acceleration.

Similarly, the first two methods presented by Dr. Ugone are based on costs and cost and inputs-

based apportionment, without any suggestion that the only use of the invention made by BRP is

limited to the reliability of the engine.

[408] Dr. Ugone applies these percentages directly to the anticipated profit per engine of

$[REDACTED], bringing them to a range of $4.62/ unit ([REDACTED]% x $[REDACTED]) to

$7.52/unit. If, instead 2.7% - 4.4% are used the percentages of 3% - 5% as advanced by Mr.

Schuehmacher, the range goes to $5.13/unit - $8.55/unit.

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[409] The main difficulty posed by this crude methodology, other than reliance on numbers that

are not produced by appropriate experimentation tested in the context of court proceedings, is

that if the functionality was in use 100% of the time, BRP would have to concede that it should

pay a royalty of $[REDACTED] for a functionality that is only contributing to the profitability of

the new engine. To put it another way, the theoretical underpinnings to establish any kind of

relationship between usage and profits are very much unclear. It does not account either for the

severity of the problem BRP was attempting to solve or the frequency at which the issue would

arise when the throttle is at least at 70% of its capacity. 100% of the time to resolve a small

nuisance would result in a royalty of $[REDACTED]? And this limitation seems to apply only to

the E-TEC engines, not the other two accused engines (Transcript, p 909). Nevertheless, the

expert would apply the methodology to all accused engines.

[410] It is less than clear what this “accused functionality usage-based apportionment” brings.

It simply posits that the invention will be used only when the throttle position is at 70% of its

capacity; that happens only during a small percentage of the time of utilization of a snowmobile.

How is that a proxy for the value associated with the use of the invention? What about if the

throttle is open at 70% of its capacity every time the snowmobile is used, if only for a short

period? Would that be indicative of something? If so, how does that relate to the profitability of

the whole engine? And how about if misses are experienced every time the snowmobile is

brought to high speeds by opening up the throttle by more than 70% of its capacity?

[411] What is used in the model is the period of time during which the throttle is left open

beyond 70% of its capacity. Nothing else. What that shows is a mystery if one is trying to assess

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the profit derived from the invention from which a reasonable royalty is obtained. But the model

does not seek to account for the frequency at which problems would occur within the period of

time the throttle is open at 70% if it were not for the invention. The frequency of hiccups would

be more indicative of the severity of the issue, and therefore the value of the invention, than the

percentage of time a throttle would be operating at 70% of its capacity.

[412] The method does not account either for the relative importance the problem encountered

may have. “Hiccups” are the manifestation of some issues with the engine. The evidence is that

they are perceptible. Is also in evidence that durability, reliability and quality are important

factors for customers that impact on sales. Who wants to have a “missing engine” in the middle

of the countryside on a cold winter day? What impact would that have on the brand? In my view,

this method is so crude and deficient as being of low utility.

[413] Dr. Ugone relied quite heavily on what he called triangulation: his three approaches

generate royalties at the low end, but they are consistent in the results attained and that serves as

re-enforcement. Mr. Carter did the same thing, to some extent, with his four methods. However,

that carries strength only if the three (or four) approaches have themselves a measure of

reliability. In my view, two of the approaches as presented are significantly lacking, to the point

of providing little assistance to the Court in its evaluation of the damages that would have been

suffered by AC. Only one approach, the “relative cost and inputs-based apportionment”, with

adjustments, could serve in a virtual negotiation because its starting point is the added

profitability on the new engine of the invention. Although the model lacks refinement, it has the

advantage of bringing the analysis to the level of the functionality which constitutes the

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invention; the difficulty is to figure out how much of the new profitability can be derived from

the invention.

[414] In a case decided earlier this year, the Ontario Court of Appeal referred to the trial judge

having found that “neither of the experts' approaches was “unassailable” and, accordingly, that

their respective numbers “could [not] be accepted without modification”: para 303.

Acknowledging that “but for choosing a mid-point between the two” (Livent’s suggestion), he

was “at a loss to settle upon a principled approach for preferring one set of numbers over

another”, he in effect split the difference: para 303.” (Livent Inc (Special Receiver and Manager

of) v Deloitte & Touche, 2016 ONCA 11 at para 386, 393 DLR (4th) 1 [Livent Inc]; leave to

appeal to the Supreme Court of Canada granted). That could have been a tempting solution in

this case. The Ontario Court of Appeal did not disapprove of that approach as long as there is

best effort to consider the evidence. Having concluded the expert’s evidence was flawed, the

judge did not have to assess the damages at zero. In Livent Inc, the Court of Appeal wrote:

387

Deloitte argues that it was not open to the trial judge to take

an unprincipled approach to fixing the quantum of damages by

simply choosing the mid-point between the experts' numbers.

388

I do not accept this argument. As the trial judge observed,

“[t]he assessment of damages is as often as not a mug's game”

(para. 274) and trial judges are obliged to do the best they can on

the evidence, short of failing to analyze the evidence at all or

simply guessing: see e.g. Murano v. Bank of Montreal (1995), 20

B.L.R. (2d) 61 (Ont. Gen. Div.), at pp. 120-23, rev'd in part on

other grounds (1998), 41 O.R. (3d) 222 (C.A.).

[415] It would appear to me that assessing damages at zero is an option that should be favored

only in the extreme cases in view of a violation of a valid patent. François Grenier, in his

Monetary Relief – Damages, in Intellectual Property Disputes, edited by Ronald E. Dimock,

Page: 192

Carswell, loose-leaves at p 17-4.1, suggests that the plaintiff who does not show by conclusive

evidence on appropriate royalty base might be awarded nominal damages only. This is not a

solution that should be reached easily. In this case, I would have concluded that there is not a

complete absence of evidence. There was an absence of satisfactory evidence. As in Livent Inc, I

would have looked for a solution.

[416] One difficulty with choosing a mid-point between experts’ numbers is that it does not

provide an incentive for experts to assess damages in a reasonable way. The incentive is to push

for extremes. The incentive should rather be to offer assistance to the Court. The broad axe

referred to by Lord Shaw in Watson, Laidlaw & Co. Ltd. v Pott, Cassels & Williamson, [1914]

31 RPC 104, should not in my view be used to over compensate or deprive the patentee. If a

broad axe is appropriate, I doubt that it can be so if the broad axe is replaced by a sledge

hammer. In the case at hand, for the same invention, one expert arrives at a royalty of

$[REDACTED]/unit while the other arrives at a range of direct profits between $4.60 and $8.55

per unit. Splitting the difference is hardly satisfactory.

[417] I have indicated at trial that I did not have doubts about the qualification of the two

experts before the Court. In my view, the problem stems from the invention the value of which

must be assessed. It is very much intangible; it becomes something tangible once it is determined

what the temperature of the exhaust gas is telling and how that information can be used to

improve the performance of the engine or alleviate problems incurred during the operation of the

engine. This Patent and the claims do not teach a particular means to achieve the desirable result.

Page: 193

It makes the assessment of the value of an invention like that particularly perilous as the

evidence in this case showed.

[418] AC did not suggest that BRP present an account of their own profits either. The Plaintiffs

have chosen the royalty route because evidently they could not assess their own damages, their

lost profits. There is a simple reason for that: it is not possible to assess the lost sales on account

of this invention. What demand is driven by such an intangible invention? In its Annotated

Patent Act, Stratton described how damages are usually assessed: “Damages are typically

assessed by considering what sales the patentee would have made but for the infringement, and

awarding damages based on the lost profits of such lost sales.” (p 1-292) In fact, Mr. Carter

seems to favour an approach that ends up being a hybrid. He seeks to calculate the increased

profit that AC would be realizing on its own sleds by comparing contribution margins. Mr.

Carter then applies that increased profitability of AC snowmobiles ($[REDACTED]/unit) not on

its lost sales, but rather on all the sales of accused units realized by BRP. He then reduces the

increased profitability of the snowmobiles by 50%, arriving at a royalty of $[REDACTED] for

the invention, a mere functionality of the engine. This approach is inherently flawed. The

Plaintiffs turn the royalty approach on its head by seeking to recoup their claimed lost profits on

their snowmobiles ($[REDACTED]/unit), but applying the lost profits on the sales achieved by

BRP (125 000 units). If damages are the lost profits that AC would have made on the lost sales,

AC’s proposition, in a sense, is to claim that it would have made 62 500 sales for which it would

have made a profit of $[REDACTED]/snowmobile. The arithmetics provide a clear picture,

worth a thousand words:

([REDACTED] x 125 000 = [REDACTED] x ^{125 000}/₂)

Page: 194

There is not even a suggestion that AC could have added to its sales 62 500 units on account of a

functionality.

[419] BRP claims that its new engine, not the new snowmobile, brings a marginal profit of

$[REDACTED]. At $[REDACTED]/unit BRP would be giving away as a royalty for a

functionality [REDACTED]% of the profit on its new engine. If a 50/50 split of the profits that

AC would have realized on its snowmobiles applied to 125 000 units sold by BRP is to be an

appropriate royalty rate, a better justification than this constitutes “an effort to be conservative”

is needed, including the percentage of the new profit which comes from the functionality.

[420] The Court was advised by counsel that there is not in this country jurisprudence similar to

what has been developing in the United States in the last few years. The issue relates to the

apportionment to arrive at a reasonable royalty, where the accused product consists of patented

and unpatented elements. Thus, it is difficult to compare whole products where the benefits of

the invention apply only to some elements.

[421] Although the notion is not new, it seems that the use of the smallest salable patent-

practicing unit is gaining traction in the U.S. Back in 1884, the Supreme Court of the United

States in Garretson v Clark, 111 U.S. 120 (1884), dealt with the apportionment analysis:

When a patent is for an improvement, and not for an entirely new

machine or contrivance, the patentee must show in what particulars

his improvement has added to the usefulness of the machine or

contrivance. He must separate its results distinctly from those of

the other parts, so that the benefits derived from it may be

distinctly seen and appreciated.

…

Page: 195

The patentee…

must in every case give evidence tending to separate

or apportion the defendant's profits and the

patentee's damages between the patented feature

and the unpatented features, and such evidence must

be reliable and tangible, and not conjectural or

speculative, or he must show by equally reliable and

satisfactory evidence that the profits and damages

are to be calculated on the whole machine, for the

reason that the entire value of the whole machine, as

a marketable article, is properly and legally

attributable to the patented feature.

Recent federal case law in the U.S. is advocating, to some extent, using the smallest salable

infringing unit with close relation to the claimed invention. That would certainly have been of

assistance in this case, as opposed to considering the contribution margins between snowmobiles

(VirnetX Inc v Cisco Systems, Inc et al, US Court of Appeals, Federal Circuit,767 F.3d 1308

(2014)).

[422] It is beyond the scope of these reasons to elaborate on the American approach and the

recent case law. Suffice it to say that in this case, with respect to the 738 Patent, the comparison

of the contribution margins between whole snowmobiles of different years was unreliable.

Comparing engines and the added profitability due to the invention was an improvement. It may

have provided more enlightenment if the analysis had focused on the ECM (or ECU) where it

may have been possible to be more precise as to the actual use. In other words, a better focus on

the smallest patent-practicing unit may have brought more adequate clarification on the real

damages incurred by AC.

Page: 196

[423] That is why the “relative cost and inputs-based apportionment” of Dr. Ugone has some

attractiveness as a basis for negotiation. Once is established the profit per unit of one engine

using the invention, it is not unreasonable to apply to it the percentage of the cost of the engine

associated with the smaller infringing unit, the ECM. It is then a matter of evaluating the features

of the ECM which benefit from the invention. The suggestion of Dr. Ugone that it be limited to

3/14 inputs was not acceptable. But a different ratio, reflecting better the fact that inputs were

already in the ECM before it was improved to accommodate new inputs may have provided the

broad axe to arrive at an appropriate direct profit leading to a royalty rate. A further

improvement could have been to give different weights to the various inputs.

[424] Finally, I wish to add one comment on the AlliedSignal 13 factors. The two experts

considered in the hypothetical negotiation the 13 factors with varying degrees of rigour. They

each go through the list of 13 AlliedSignal factors, give an assessment for each factor and then

declare victory. (I have appended to these reasons for judgment a chart reporting on the result of

the assessment for the 13 factors done by the experts). In each case their victory would not have

had an effect on the royalty rate calculated. Some of the factors were more carefully considered

while others received little attention.

[425] Dr. Ugone, having established what he considered to be an appropriate range for the

royalty using direct profits derived from the invention, went through the 13 factors. I would

suggest that the 13 AlliedSignal factors are no more a talisman than the Georgia Pacific 15

factors (Ericsson Inc. v D-Link Systems, Inc., U.S. Court of Appeals for the Federal Circuit,

December 4, 2014). It is not merely a list to go through, but rather the appropriate factors for a

Page: 197

given case that should be used, analysed and applied. Here, Dr. Ugone was initially of the view

that the factors should be used to move within the range of royalties already determined by his

methodologies. Only when pushed did he agree that the Court may use the factors to actually

depart from the range.

[426] Mr. Carter’s use of the factors was more convoluted. His four quantitative approaches

were not clearly described and some of the information was presented as part of the review of an

AlliedSignal factor. One of the four approaches was fully presented under the discussion of

factor #7, Compensation for Research and Development Costs. An inordinate amount of time

was spent discussing approaches the expert did not support. In the end, his favoured approach is

presented in a cursory manner (2 pages out of an 89 page-report), a favoured approach which

ends up as one royalty of $[REDACTED]/unit. It remains unclear what effect, if any, the

AlliedSignal factors have had other than seek to confirm the high royalty rate. It would seem that

it also served to disqualify the approach presented in five lines under factor #12 (displacement of

business), which would have generated a royalty range of $[REDACTED] to $[REDACTED].

There was no explanation why a royalty of $[REDACTED]/unit had to be discarded in favour of

$[REDACTED]/unit.

[427] The Court would have had to conclude that the experts were not considering carefully

enough the AlliedSignal factors and the impact they had on the rate. Merely going through the

list of factors, and providing some rating for each, does not assist a court if the conclusion is that

the royalty rate remains unchanged. I would have thought that the factors deserve better. If a

royalty is to be determined with the assistance of a hypothetical negotiation involving the

Page: 198

appropriate and relevant AlliedSignal factors, it would be important that a careful analysis be

provided to assist the Court. In this case, neither the so called quantitative method nor the

examination of the AlliedSignal factors sought to evaluate the value of the invention. We still do

not know how it was used, either by AC or BRP, so that it would be possible to assess what

benefit might be derived.

[428] In the end, there is no award of damages in view of the conclusion reached on

infringement and validity. It is clear, however, that a royalty of $[REDACTED]/unit would have

been patently unreasonable on the evidence on this record. Mr. Carter denied at trial that he was

relying on the Nash Bargaining Solution. (The Bargaining Problem, by John F. Nash,

Econometrica, Vol. 18, issue 2 (April 1950). The 50% was simply unexplained. Splitting the

difference between that number and the royalty range arrived at by BRP would have been

inequitable without evidence. However, it would also be inequitable to assess the damages at

zero. A more appropriate approach could have been the blunt, but practicable, relative cost and

inputs base apportionment, with adjustments. A royalty higher than that proposed by BRP would

in all likelihood have been appropriate.

XV. Objections

[429] Throughout the trial, the parties have made a number of objections. Most of them have

been ruled on and disposed of at the hearing, following arguments. However, the Plaintiffs have

made submissions, in writing and supported by a motion record, with regard to four distinct

objections. The Defendant had its own motion record in response. The objections were debated

Page: 199

at length and, at the conclusion of the submissions, the Court advised that the matter would be

taken under advisement. These are my reasons concerning the objections.

[430] Arctic Cat took issue with some features of the expert report of Dr. Bower, the expert

retained by BRP. It is in particular the expert report issued on August 28, 2015 (Dr. Bower’s

Report) that is in issue.

[431] The four objections can be described thus:

a)

b)

c)

opinions that lack a factual basis must be rejected;

BRP, through the reports of Dr. Bower, was in fact splitting its case;

the Code of Conduct for Expert Witnesses, which is a schedule to the Rules

adopted in 2010 (SOR/2010-176) to govern the testimony of expert witnesses

provides that the expert’s report “shall include any literature or other materials

specifically relied on in support of the opinions”. The Plaintiffs claim that Dr.

Bower failed to comply with that provision and that, accordingly, a portion of his

report is inadmissible;

d)

the expert improperly introduced factual evidence.

The Court will address these objections in turn, together with the two interventions made by

counsel for AC that two paragraphs, though not inadmissible, would carry no weight.

Page: 200

A.

Objections to admissibility of evidence

(1)

Lack of factual basis

[432] This objection concerns paragraphs 142 to 146 of the Dr. Bower’s Report. That is the

report produced by Dr. Bower in response to that of the expert retained by AC, Dr. Checkel, to

demonstrate that BRP infringed some of the claims in the 738 Patent. It constitutes Dr. Bower’s

response to the infringement report. At paragraphs 142 to 146, Dr. Bower sought to quantify the

frequency with which the dynamic ignition correction function of the BRP snowmobile is used.

In order to obtain data, Dr. Bower asked of BRP the riding history of BRP’s E-TEC engines,

which are the largest share of the accused engines in this case.

[433] The paragraphs under examination present the analysis of the data which would have

been collected following testing conducted by BRP. AC objects to these paragraphs in Dr.

Bower’s report because the facts that give rise to the analysis by the expert have not been

proven: there is no foundation of proven facts for the expert to opine.

[434] BRP argues that the paragraphs are admissible because one of its witnesses, Mr.

Schuehmacher, testified concerning the said data which ended up in a report. The witness did not

conduct the tests or experimentation and he did not compile the data. He knows about the report

and, as such, his evidence constitutes hearsay. Alternatively, BRP claims that the cross-

examination conducted by AC of Mr. Schuehmacher constitutes a waiver of BRP’s hearsay

objection. In the further alternative, BRP would wish for the Court to reconsider its ruling that

Page: 201

the document purported to contain the results of testing conducted by BRP’s test pilots are not

admissible.

[435] The Court is not minded to revisit its ruling of September 21, 2015 (Transcript pages

1030 and following). BRP, through its witness, Mr. Schuehmacher, was attempting to introduce

into evidence the results of testing conducted by someone other than the witness. This constitutes

hearsay. We were reminded recently by Justice Stratas, in Canadian Copyright Licensing Agency

(Access Copyright) v Alberta, 2015 FCA 268 at para 20, of the fundamental general principle

that facts must be proven by admissible evidence. If it is undoubtedly true that “documents

simply stuffed into an application record are not admissible” (para 20), it is equally true that

documents must also be proven if they are to be taken for the truth of their contents. Unless there

is some exception, such as judicial notice for instance, or the legislation provides for a particular

way of producing evidence, documents need to be proven in the usual way.

[436] BRP tried to rely on the business records exception to the hearsay rule. Since BRP could

not satisfy the requirements of the Canada Evidence Act, it would appear that BRP relies on the

Common Law. It claims that Mr. Schuehmacher knew about the document, how it was created

and that it is “a reliable sample of different snow conditions”. With respect, this misses the mark

and becomes an effort at bootstrapping. The document is said, without any authority in support,

to be reliable because the witness says so. Here, the witness, when asked to do so by Dr. Bower,

required that the riding history of the accused E-TEC engine be provided. This is not a record

created in the ordinary course of business, but rather a report done for the purpose of litigation as

requested by an expert witness. If there are logs that were constituted at the time the testing took

Page: 202

place, they were not produced (Transcript, pp 1155 and 1156). In The Law of Evidence in

Canada (Sopinka, Lederman & Bryant, LexisNexis, 3^rdEd.), the authors describe the Common

Law exception in the following fashion:

§6.185 At common law, statements made by a person under a duty

to another person to do an act and record it in the ordinary practice

of the declarant’s business or calling are admissible in evidence,

provided they were made contemporaneously with the facts stated

and without motive or interest to misrepresent the facts.

I cannot see how the document here considered satisfies these requirements. The rationale for the

exception is simply not present: the circumstantial guarantee of truth comes from the constant

routine in making entries. An entry in a business record is one thing; it is quite another to create a

report, written some time following experimentation asked for in the precise context of litigation,

a document that is meant to assist the Defendant. That is not to say that the report was

inaccurate: we do not know. It is more that the very nature of a document like this does not have

the measure of trustworthiness that comes from records created and kept, for instance, for the

systematic and mechanical conduct of business.

[437] Here, the paragraphs in Dr. Bower’s report cannot be admissible because there is no

evidence to establish the foundation of his opinion. That foundation is absent because the

documents purportedly put forth to report on some experimentation constitute inadmissible

hearsay. The fact that Mr. Schuehmacher testified that his experience is that snowmobiles are

driven 3 to 5% of the time with the throttle opened at 70% of capacity or more does not justify

the manipulation of data not found before the Court as presented by Dr. Bower.

Page: 203

[438] BRP also suggests that the cross-examination of Mr. Schuehmacher constituted a waiver.

Such was not the case. The Court’s ruling allowed the document to be used not for the truth of its

content but rather to help assess the credibility of the witness who testified that timing

corrections would occur only where the throttle is open at least at 70% of its capacity which,

according to the witness, would happen no more than 3 to 5% of the time. The cross-examination

was conducted within the limitation set by the Court: to test the credibility of the witness, who is

an engineer but is not a test pilot, in relation to his assertions about these figures. There was

never any waiver such that it would now be permitted for BRP to rely on the document for the

truth of its content.

[439] It follows that Mr. Schuehmacher could not supply a valid basis for the use of the

document for the truth of its content. Accordingly, paragraphs 142 to 146 must be excluded as

inadmissible. However, the testimony of Mr. Schuehmacher is not challenged on this basis and it

is admissible. The weight to be given to it is of course a matter of argument.

B.

Case splitting

[440] AC also argues that some paragraphs found in the Dr. Bower’s infringement report

constitute an improper split of BRP’s case in chief on validity. This objection relates to

paragraphs 10, 93 and 103, together with attachments 2 and 4.

[441] Paragraph 10 is part of the summary offered by Dr. Bower of his opinions. Paragraphs 93

and 103, with the attachments referred therein, deal with the expert’s contention that the accused

Page: 204

BRP’s engines E-TEC, 440 HO and 600 RS are programmed “in the same manner as the ECUs

described in the US 705 Patent and the US 908 Patent”. The point being made is the following. If

the Court were to find that these accused engines operate on the basis of a modification of an

ignition pattern (claims 11 and 16 of the 738 Patent), the Court would have to find, the argument

goes, that US Patents 705 and 908 disclosed an ignition pattern selected from a plurality of

different ignition patterns, and the basic ignition pattern being modified based on the sensed

exhaust gas temperature. To put it another way, since the accused engines practice the US

patents, the conclusion that these engines violate the 738 Patent would carry that the 738 Patent

practices the prior art of the US patents 705 and 908. As US Patents 705 and 908 are prior art, it

would follow that the Patent-in-suit would not be valid.

[442] BRP’s prime argument is that it programmed its ECU as described in US Patents 705 and

908, but those patents teach the modifications of an ignition point, rather than having different

ignition patterns or for having modifications to the basic ignition pattern. In that sense, this

constitutes BRP’s defense to the allegation that it is violating the Patent-in-suit since it was using

a different logic.

[443] BRP faced with the horns of a dilemma having to decide to argue before the Court

invalidity or non-infringement argues, in effect, both. If the two US patents teach a logic that is

different than the Patent-in-suit, and if the Court is satisfied that BRP is practicing that teaching,

there cannot be infringement. Conversely, if still persuaded that BRP is practicing that teaching,

but that which was taught by the two US patents is in effect the logic taught by the Patent-in-suit,

Page: 205

the 738 Patent, the Court is invited to conclude that the Patent-in-suit is not valid. Using the

same two US patterns, BRP argues that either it does not infringe or the Patent-in-suit is invalid.

[444] AC argues that BRP had to put forth its expert evidence in its case in chief where it

argued that the Patent-in-suit is invalid; it could not wait until its expert offered his evidence in

response to the infringement argument which came later, on August 28. According to AC, BRP

is splitting its case, contrary to the rule recognized in R v Krause, [1986] 2 SCR 466. One can

read at p 473:

[15] At the outset, it may be observed that the law relating to the

calling of rebuttal evidence in criminal cases derived originally

from, and remains generally consistent with, the rules of law and

practice governing the procedures followed in civil and criminal

trials. The general rule is that the Crown, or in civil matters the

plaintiff, will not be allowed to split its case. The Crown or the

plaintiff must produce and enter in its own case all the clearly

relevant evidence it has, or that it intends to rely upon, to establish

its case with respect to all the issues raised in the pleadings; in a

criminal case the indictment and any particulars: see R. v. Bruno

(1975), 27 C.C.C. (2d) 318 (Ont. C.A.), per Mackinnon J.A., at p.

320, and for a civil case see: Allcock Laight & Westwood Ltd. v.

Patten, Bernard and Dynamic Displays Ltd., [1967] 1 O.R. 18

(Ont. C.A.), per Schroeder J.A., at pp. 21-22. This rule prevents

unfair surprise, prejudice and confusion which could result if the

Crown or the plaintiff were allowed to split its case, that is, to put

in part of its evidence -- as much as it deemed necessary at the

outset -- then to close the case and after the defence is complete to

add further evidence to bolster the position originally advanced.

The underlying reason for this rule is that the defendant or the

accused is entitled at the close of the Crown's case to have before it

[page474] the full case for the Crown so that it is known from the

outset what must be met in response.

[445] The difficulty in cases such as this one is that there are different phases to the trial where

the burden shifts from one side to the other. That being initially an action for infringement, it is

AC that has the initial burden of satisfying the Court that its Patent has been infringed. Evidently,

Page: 206

if no infringement is shown, AC will not be successful and there would be no need to go any

further. However, even if the Patent was infringed, the Defendant may still prevail if it satisfies

the Court that the Patent, or the claims asserted by the Plaintiffs, are not valid, whatever the

reason may be. The burden is then on the shoulders of the Defendant, who becomes the Plaintiff

by counterclaim, asserting the invalidity of the Patent.

[446] Here, I fail to see how it can be said that BRP is splitting its case. AC contends that BRP

ought to have presented the evidence found in paragraphs 93 and 103 of Dr. Bower’s report

responding to infringement issues report produced on August 28, 2015, in its case in chief on

invalidity, on June 15, 2015.

[447] However, as it has been recognized for more than one hundred years, it is a valid defense

to an allegation of infringement that the alleged infringing product is based on the teachings of

prior art, such as the two US patents in this case or Application 959. In other words, invalidity is

a defense to infringement. The often quoted paragraph of the House of Lords decision in Gillette

Safety Razor Co v Anglo-American Trading Co (1913), 30 RPC 465 is certainly worth

reproducing once again:

The defence that “the alleged infringement is not novel at the date

of the plaintiff’s Letters Patent is a good defence in law, and it

would sometimes obviate the great length and expense of Patent

cases if the defendant could and would put forth his case in this

form and thus spare himself the trouble of demonstrating on which

horn of the well-known dilemma the plaintiff had impaled himself,

invalidity or non-infringement.

(p 488)

Page: 207

[448] In that particular case, the House of Lords described the issue in a way that is quite

similar to the circumstances of this case just a few lines before the famous passage:

If the claims of such a Patent were so wide as to include it, the

Patent would be bad, because it would include something which

differed by no patentable difference from that which was already in

possession of the public. Such a Patent would be bad for want of

novelty. If the claims were not sufficiently wide to include the

Defendant’s razor, the patentee could not complain of the public

making it. In other words, the Defendants must succeed either on

invalidity or on non-infringement.

[449] If it is a valid defense to an allegation of infringement that the claims asserted are not

novel (or have been anticipated), how could it be that offering evidence to that effect in response

to the allegation of infringement would be splitting one’s case? In my view, BRP’s point that its

statement of defence pleads invalidity as a ground of non-infringement and that, accordingly, its

Expert’s report on invalidity fully discusses US patents 705 and 908 is well taken. Not only there

is no splitting of the case, but AC cannot realistically suggest that it has been taken by surprise. I

have reviewed paragraphs 93 and 103; I am comforted that there is no element of surprise in

these two paragraphs.

[450] The point being made in these two paragraphs is simply this. Assuming that it is shown

that the four accused engines have an ECU programmed in the same manner as what is taught by

U.S. Patents 705 and 908, it would have to be, the syllogism goes, that a finding of infringement

against the accused engines would have to carry the same finding concerning 705 and 908. If the

four engines infringe the Patent-in-suit, they are being programmed according to U.S. Patents

705 and 908; it would necessarily mean that 705 and 908 would themselves run afoul of the 738

Page: 208

Patent as teaching the same thing. However, 705 and 908 precede the 738 Patent, In that

scenario, U.S. Patents 705 and 908 must be prior art, these serving to invalidate the 738 Patent.

[451] BRP is not splitting its case. It is putting forth its case that if the four accused engines

infringe, then there is a full defense in showing that it practices the teachings of U.S. Patents 705

and 908.

[452] I note that U.S. Patents 705 and 908 are not sprung on AC at the stage of the response to

the allegations of infringement, rather they are discussed also in the BRP validity report of

June15, 2015.

[453] It is probably equally true that the Gillette defence “supposedly saves costs, but few

lawyers are brave enough to run it as their sole defence. One must be very sure of a hole-proof

basket before putting all one’s eggs in it.” (Intellectual Property Law, David Vaver, Irwin Law,

2^ndED, p 396).

[454] Fortunately, the Court has to be concerned solely with whether the 738 Patent has been

infringed and is valid. By relying on the defence that the alleged infringement is not novel, BRP

did not split its case where Dr. Bower made assertions at paragraphs 93 and 103 of his report on

the infringement allegation.

Page: 209

C.

Failure to comply with Expert Code of Conduct

[455] AC takes issue with paragraphs 175 and 176 of Dr. Bower’s Infringement Report. These

relate to the technological comparability in two license agreements, the Clean Futures LLC –

Controlled Carson LLC Agreement and the Hirel Technologies Inc. Agreement. In both cases,

Dr. Bower concludes that the technologies, referred to as “electronic engine management”

system, are a technology comparable to the technology claimed in the Patent-in-suit.

[456] The argument relies on paragraph 3h) of the Code of Conduct for Expert Witnesses, a

statutory instrument referred to in Rule 52.2 of the Federal Courts Rules. It reads as follows:

3. An expert’s report submitted 3. Le rapport d’expert, déposé

as an affidavit or statement

referred to in rule 52.2 of the

Federal Courts Rules shall

include

sous forme d’un affidavit ou

d’une déclaration visé à la

règle 52.2 des Règles des

Cours fédérales, comprend :

…

(h) any literature or other

h) les ouvrages ou les

materials specifically relied on documents expressément

in support of the opinions;

invoqués à l’appui des

opinions;

[457] As I understand it, it is alleged that Dr. Bower’s Report infringes the rule because he has

failed to attach to his report the said license agreements. That would be in spite of the fact that

the documents are listed in Attachment 1 of Dr. Bower’s Report (items 32 and 33) and they are

attached to Dr. Ugone’s Report, another expert retained by BRP, who testified on the issue of

damages. Both reports were served on the same day.

Page: 210

[458] I am not inclined to grant the objection. There are at least three reasons for that:

1.

Under the Federal Courts Rules, the Court has discretion as to the remedy that

would be granted for a violation of the Code of Conduct: it may exclude the

offending paragraphs (R 52.2 (2)). The Report itself refers to the agreements

which are attached to the Report of another expert. The exclusion of paragraphs

175 and 176 would not be proportional to the failure to comply with the Code, if

there was such a failure;

2.

I have not been persuaded that any prejudice was caused to the Plaintiffs.

Contrary to a case like Stevens v Plachta, 2006 BCCA 479 (Stevens), where an

appendix was not available, the agreements in this case were available. Yet, in

Stevens, the British Colombia Court of Appeal found that the trial judge could

have received the appendix, thus avoiding a lengthy adjournment. In the case at

bar, the agreements were known and they were available. There was no need to

even consider an adjournment, which would have been a more appropriate remedy

had a remedy been needed;

3.

I am less than convinced that the Plaintiffs give paragraph 3h) the appropriate

reading it deserves. When read in context and together with its French version,

which is equally authoritative (see R v Daoust, 2004 SCC 6, [2004] 1 SCR 217

and R v SAC, 2008 SCC 47, [2008] 2 SCR 675), I would have thought that the

words “literature” and “ouvrage” were used for a particular purpose. Oxford

Page: 211

Canadian Dictionary speaks of “literature” as being “the material in print on a

particular subject”. One finds a definition conveying the same meaning to the

word “ouvrage” in Le Petit Robert de la langue française: “texte scientifique,

technique ou littéraire … Consulter tous les ouvrages oubliés sur une question …

Ouvrage de référence.” As pointed out again recently in Merck Frosst Canada Ltd

v Canada (Health), 2012 SCC 3 at para 203, [2012] 1 SCR 23, “[t]he shared

meaning rule for the interpretation of bilingual legislation dictates that the

common meaning between the English and French legislative texts should be

accepted”. In the case at hand, the authors of the Code chose very specific words

to designate what shall be included. It is not any written material referred to by an

expert, but rather the “literature”, “les ouvrages”, that shall be included. That, to

my way of thinking, connotes the types of authorities that help make the point put

forward by the expert, what supports his contention.

[459] I am comforted further by the use of the words “specifically relied on in support of the

opinion” and “expressément invoquées à l’appui des opinions”. The expert is not so much

relying on the agreements as he is giving an opinion on these instruments. Similarly, in French

“invoquer” carries the meaning “to call for”, “to invoke”. As can be seen, paragraph 3h) deals

with authorities used in support of the opinion, not the very instruments about which an opinion

is given. It is the difference between what is the object of the opinion and the material used to

support the opinion. That is consistent with the comments found in The Law of Evidence in

Canada where under the title “Use of Authoritative Literature”, one can read:

§12.200 Peculiar to the examination of experts is the utilization of

text books. In support of any theory, an expert is permitted to refer

Page: 212

to authoritative treatises and the like, and any portion of such texts

upon which the witness relies is admissible into evidence.

[460] I am of course cognizant that the paragraph includes more generic words: “or other

materials specifically…” and “ou les documents expressément …” In my view, those words must

be read taking into account the limited class designated by “literature” and “ouvrages”, but also

qualified by the words “specifically relied on in support of the opinions” (“expressément

invoquées à l’appui des opinions”). Not only must the words “literature” and “ouvrages” be

given meaning, as opposed to being subsumed in “other materials”, as if the word “literature” did

not have a particular meaning, but paragraph 3h) is about that which supports the opinion, not

that which is the object of the opinion.

[461] As a result, paragraphs 175 and 176 are admissible.

D.

Improper factual evidence

[462] AC contends that paragraphs 48, 66, 135, 163 and the third and fourth sentences of

paragraph 167 of Dr. Bower’s infringement report provide factual evidence.

[463] It is not clear what the basis is for AC to contend that the expert could not provide this

factual evidence. No authority was offered in support. Be that as it may, BRP made a convincing

argument that the matters addressed in these paragraphs are all supported by evidence, either

testimonial or documentary, offered at trial.

Page: 213

[464] If the Plaintiffs claim that the factual basis is thin, they could certainly argue that the

opinion of the expert should not carry much weight (R v Lavallée, [1990] 1 SCR 852).

E.

Opinion beyond stipulated expertise

[465] The Plaintiffs argue that Dr. Bower went beyond the expertise that was recognized in the

Expert stipulation. The argument is made in relation to paragraph 145 of Dr. Bower’s Report on

infringement. Without necessarily objecting to the admissibility of paragraph 145 on the basis

advanced, AC claimed that little weight should be put on this evidence. Given my conclusion

that paragraphs 145 to 146 of Dr. Bower’s Report cannot be admissible, it will not be necessary

to spend time on this objection.

[466] The same kind of argument is made concerning paragraph 161, about which AC says that

the assessment of evidence being the province of the trier of fact, the opinion given by

Dr. Bower should be given no weight.

[467] In paragraph 161, Dr. Bower opines that “there is no evidence that the technology of the

738 Patent contributes to improving Quality/Durability/Reliability of the snowmobile or its

engine, and I see no basis for how there could be such contribution”. As pointed out by counsel

for BRP, Dr. Bower was reacting to assertions made by the expert on damages retained by AC in

this case. Dr. Bower may have been better advised to refrain from declaring that there is no

evidence; comments like this are to be made by counsel.

Page: 214

[468] An expert is expected to testify on the facts and to give his opinion on matters other than

the law, for which he does not have a particular expertise. However, I suspect he did not use the

word “evidence” in its legalistic connotation; the point can be made validly that there is no basis

for claiming a contribution to improving quality, durability and reliability. That is certainly

evidence that can be offered by an expert (as opposed to the expert opining on what constitutes

evidence as a legal concept) having the qualifications of Dr. Bower. With a Ph.D. in mechanical

engineering, together with extensive experience not only in in-cylinder combustion, but also

calibration of engines, engine controllers and engine management systems, as stipulated, I fail to

see how he could be prevented from expressing such opinion, or that his opinion should carry no

weight.

XVI. Post scriptum

[469] Prior to releasing the reasons for judgment, the Court sought the views of counsel on

possible redactions by circulating a draft. Both parties made a number of suggestions.

[470] In essence, both parties suggested deletions in Part XIV which deals with damages. I am

of the view that a court should seek to minimize deletions where a public trial has taken place.

[471] However, in this case, the part of the judgment addressing the issue of damages is clearly

obiter in view of the conclusions reached on infringement and validity. As a result, I have

concluded, not without hesitation, that most of the proposed redactions should be maintained in

Page: 215

Part XIV. Other redactions elsewhere in the reasons for judgment have not been accepted as the

passages were part and parcel of the rationale for the decision reached by the Court.

[472] A confidential set of reasons will accordingly be kept sealed in the Registry of this Court.

Page: 216

JUDGMENT

THIS COURT’S JUDGMENT is that:

1.

The action for infringement of Arctic Cat Inc. and Arctic Cat Sales Inc. is

dismissed;

2.

The Defendant, Bombardier Recreational Products Inc. is entitled to its costs. The

parties are invited to make submissions in writing and limited to 5 pages each on

the issue of costs, to be filed in this Court’s registry no later than twenty (20) days

from the issuance of this judgment;

3.

Had the Court found that there was a violation of any of the asserted claims

(claims 11, 16, 33, 40 and 47 of Canadian Patent No. 2,322,738), the Defendant,

Bombardier Recreational Products Inc., would have been entitled to the relief

sought by counter claim, that is a declaration that the asserted claims of the 738

Patent are and have always been, invalid and void;

4.

5.

The Court declares that Bombardier Recreational Products Inc. does not infringe

any valid and asserted claims of the Canadian Patent No. 2,322,738;

As for the counterclaim, the parties are invited to make submission in writing and

limited to 5 pages each on the issue of costs of this counterclaim, to be filed in

this Court’s registry no later than twenty (20) days from the issuance of this

judgment;

6.

Bombardier Recreational Products Inc. sought in its counterclaim “pre-judgment

and post-judgment interest”. In view of the lack of precision, the parties are

Page: 217

invited to make submissions in writing and limited to two pages each on the issue

of pre-judgment and post-judgment interest, to be filed in this Court’s registry no

later than twenty (20) days from the issuance of this judgment.

"Yvan Roy"

Judge

Page: 218

ANNEX “A”

What is claimed is:

1. A two-cycle engine, comprising:

a cylinder;

a throttle;

a piston moveable in the cylinder, for compressing a fuel-air mixture to be ignited in the

cylinder, with exhaust gas from combustion of the fuel-air mixture being expelled from the

cylinder;

an ignition source in the cylinder;

a controller for activating the ignition source at a particular point during the compressing

movement of the piston, the controller activating the ignition source according to an ignition

pattern in which the ignition point during the compressing movement varies with at least one of

the operation speed of the engine and throttle position, the ignition pattern being selected from a

plurality of different ignition patterns; and

a sensor for sensing a temperature of exhaust gas from the cylinder, the particular ignition

pattern used by the controller being selected based upon the sensed exhaust gas temperature.

2.

The engine of claim 1, wherein the ignition source is a spark plug and the controller is a

capacitor discharge ignition system.

3.

4.

The engine of claim 1, wherein the sensor contacts the exhaust gas.

The engine of claim 3, wherein the engine further comprises an exhaust pipe for carrying

the exhaust gas and the sensor is disposed in the exhaust pipe.

5.

The engine of claim 1, wherein individual ignition patterns are provided for exhaust gas

temperature ranges that cover about 50C.

6.

A method of operating a two-cycle engine, comprising:

moving a piston in a cylinder to compress a fuel-air mixture in the cylinder;

activating an ignition source in the cylinder during the compression movement;

expelling exhaust gas from combustion of the fuel-air mixture from the cylinder;

Page: 219

controlling the activation of the ignition source according to an ignition pattern in which

an ignition point during the compression movement varies with at least one of the operation

speed and throttle position of the engine;

sensing a temperature of the exhaust gas expelled from the cylinder; and

selecting the ignition pattern from a plurality of ignition patterns based on the sensed

exhaust gas temperature.

7.

The method of claim 6, wherein the ignition source is a spark plug and a capacitor

discharge ignition system controls activation of the spark plug.

8.

The method of claim 6, wherein the exhaust gas temperature is sensed with a sensor that

contacts the exhaust gas.

9.

The method of claim 8, wherein the engine further comprises an exhaust pipe for carrying

the exhaust gas and the sensor is disposed in the exhaust pipe.

10.

The method of claim 6, wherein individual ignition patterns are provided for exhaust gas

temperature ranges that cover about 50C.

11.

A two-cycle engine, comprising:

a cylinder;

a piston movable in the cylinder, for compressing a fuel-air mixture to be ignited in the

cylinder, with exhaust gas from combustion of the fuel-air mixture being expelled from the

cylinder;

an ignition source in the cylinder;

a controller for activating the ignition source at a particular point during the compressing

movement of the piston, the controller activating the ignition source according to an ignition

pattern in which the an ignition point during the compressing movement varies with operation

speed of the engine, the ignition pattern being selected from a plurality of different basis ignition

patterns; and

a sensor for sensing a temperature of exhaust gas from the cylinder, the basic ignition

pattern used by the controller being modified based upon the sensed exhaust gas temperature.

12.

A two-cycle engine, comprising:

a cylinder;

Page: 220

a piston movable in the cylinder, for compressing a fuel-air mixture to be ignited in the

cylinder, with exhaust gas from combustion of the fuel-air mixture being expelled from the

cylinder;

an ignition source in the cylinder;

a controller for activating the ignition source at a particular point during the

compressing movement of the piston, the controller activating the ignition source according to an

ignition pattern in which the ignition point during the compressing movement varies with

operation speed of the engine, the ignition pattern being selected from a plurality of different

ignition patterns; and

a sensor for sensing a temperature of exhaust gas from the cylinder, the plurality of

ignition patterns including a first ignition pattern that is selected when the sensed exhaust gas

temperature is a temperature correlated with an undesired operation condition.

13.

The engine of claim 12, wherein the temperature correlated with an undesired engine

operation condition reflects a type of fuel being used to operate the engine.

14.

The engine of claim 12, wherein the temperature correlated with an undesired engine

operation condition reflects an engine performance problem.

15.

The engine of claim 14, wherein the engine performance problem is selected from the

group consisting of incorrect carburetion or incorrect fuel delivery.

16.

A method of operating two-cycle engine, comprising:

moving a piston in a cylinder to compress a fuel-air mixture in the cylinder;

activating an ignition source in the cylinder during the compression movement;

expelling exhaust gas from combustion of the fuel-air mixture from the cylinder;

controlling the activation of the ignition source according to an ignition pattern in which

an ignition point during the compression movement varies with operation speed of the engine

selected from a plurality of basic ignition patterns;

sensing a temperature of the exhaust gas expelled from the cylinder; and

modifying the ignition pattern selected from a plurality of ignition patterns based on the

sensed exhaust gas temperature.

17.

A method of operating a two-cycle engine, comprising:

moving a piston in a cylinder to compress a fuel-air mixture in the cylinder;

Page: 221

activating an ignition source in the cylinder during the compression movement;

expelling exhaust gas from combustion of the fuel-air mixture from the cylinder;

controlling the activation of the ignition source according to an ignition pattern in which

an ignition point during the compression movement varies with operation speed of the engine;

sensing a temperature of the exhaust gas expelled from the cylinder; and

selecting a first ignition pattern from a plurality of ignition patterns when the sensed

exhaust gas temperature is a temperature correlated with an undesired engine operation.

18.

The method of claim 17, wherein the temperature correlated with an undesired engine

operation condition reflects a type of fuel being used to operate the engine.

19.

The method of claim 17, wherein the temperature correlated with an undesired engine

operation condition reflects an engine performance problem.

20.

The method of claim 19, wherein the engine performance problem is selected from the

group consisting of incorrect carburetion or incorrect fuel delivery.

21.

A two-cycle engine, comprising:

a cylinder;

a piston movable in the cylinder, for compressing a fuel-air mixture to be ignited in the

cylinder, with exhaust gas from combustion of the fuel-air mixture being expelled from the

cylinder;

an ignition source in the cylinder;

a controller for activating the ignition source at a particular point during the compressing

movement of the piston, the controller activating the ignition source according to an ignition

pattern in which an ignition point during the compressing movement varies with operation speed

of the engine, the ignition pattern being selected from a plurality of different ignition patterns,

the different ignition patterns having different relationships between ignition point and engine

speed; and

a sensor for sensing a temperature of exhaust gas from the cylinder, the particular ignition

pattern used by the controller being selected based upon the sensed exhaust gas temperature.

22.

The engine of claim 21, wherein the ignition source is a spark plug and the controller is a

capacitor discharge ignition system.

23.

The engine of claim 21, wherein the sensor contacts the exhaust gas.

Page: 222

24.

The engine of claim 23, wherein the engine further comprises an exhaust pipe for

carrying the exhaust gas and the sensor is disposed in the exhaust pipe.

25.

The engine of claim 21, wherein individual ignition patterns are provided for exhaust gas

temperature ranges that cover about 50C.

26.

The engine of claim 25, wherein the plurality of different ignition patterns includes a

default pattern that is used if a failure of the sensor is determined.

27.

28.

The engine of claim 26, wherein the engine is a snowmobile engine.

A method of operating a two-cycle engine, comprising:

moving a piston in a cylinder to compress a fuel-air mixture in the cylinder;

activating an ignition source in the cylinder during the compression movement;

expelling exhaust gas from combustion of the fuel-air mixture from the cylinder;

controlling the activation of the ignition source according to an ignition pattern in which

an ignition point during the compression movement varies with operation speed of the engine;

sensing a temperature of the exhaust gas expelled from the cylinder; and

selecting the ignition pattern from a plurality of different ignition patterns based on the

sensed exhaust gas temperature, the different ignition patterns having different relationships

between ignition point and engine speed.

29.

The method of claim 28, wherein the ignition source is a spark plug and a capacitor

discharge ignition system controls activation of the spark plug.

30.

The method of claim 28, wherein the exhaust gas temperature is sensed with a sensor that

contacts the exhaust gas.

31.

The method of claim 30, wherein the engine further comprises an exhaust pipe for

carrying the exhaust gas and the sensor is disposed in the exhaust pipe.

32.

The method of claim 28, wherein the temperature of the exhaust gas is sensed with a

temperature sensor and the plurality of different ignition patterns includes a default pattern that is

selected when a failure of the temperature sensor is determined.

33.

34.

The method of claim 28, where the engine is a snowmobile engine.

A two-cycle engine, comprising:

a cylinder;

Page: 223

a throttle;

a piston movable in the cylinder, for compressing a fuel-air mixture to be ignited in the

cylinder, with exhaust gas from combustion of the fuel-air mixture being expelled from the

cylinder;

an ignition source in the cylinder;

a controller for activating the ignition source at a particular point during the compressing

movement of the piston, the controller activating the ignition source according to an ignition

pattern in which an ignition point during the compressing movement varies with operation speed

of the engine and throttle position, the ignition pattern being selected from a plurality of different

relationships between ignition point and engine speed; and

a sensor for sensing a temperature of exhaust gas from the cylinder, the particular ignition

pattern used by the controller being selected based upon the sensed exhaust gas temperature.

35.

The engine of claim 34, wherein the ignition source is a spark plug and the controller is a

capacitor discharge ignition system.

36.

37.

The engine of claim 34, wherein the sensor contacts the exhaust gas.

The engine of claim 36, wherein the engine further comprises an exhaust pipe for

carrying the exhaust gas and the sensor is disposed in the exhaust pipe.

38.

The engine of claim 34, wherein individual ignition patterns are provided for exhaust gas

temperature ranges that cover about 50C.

39.

The engine of claim 34, wherein the plurality of different ignition patterns includes a

default pattern that is used if a failure of the sensor is determined.

40.

41.

The engine of claim 34, wherein the engine is a snowmobile engine.

A method of operating a two-cycle engine, comprising the steps of:

moving a piston in a cylinder to compress a fuel-air mixture in the cylinder;

activating an ignition source in the cylinder during the compression movement;

expelling exhaust gas from combustion of the fuel-air mixture from the cylinder;

controlling the activation of the ignition source according to an ignition pattern in which

an ignition point during the compression movement varies with operation speed of the engine

and throttle position of the engine;

sensing a temperature of the exhaust gas expelled from the cylinder; and

Page: 224

selecting the ignition pattern from a plurality of different ignition patter is based on the

sensed exhaust gas temperature, the different ignition patterns having different relationships

between ignition point and engine speed.

42.

The method of claim 41, wherein the ignition source is a spark plug and a capacitor

discharge ignition system controls activation of the spark plug.

43.

The method of claim 41, wherein the exhaust gas temperature is sensed with a sensor that

contacts the exhaust gas.

44.

The method of claim 43, wherein the engine further comprises an exhaust pipe for

carrying the exhaust gas and the sensor is disposed in the exhaust pipe.

45.

The method of claim 41, wherein individual ignition patterns are provided for exhaust

gas temperature ranges that cover about 50C.

46.

The method of claim 41, wherein the temperature of the exhaust gas is sensed with a

temperature sensor and the plurality of different ignition patterns includes a default pattern that is

selected when a failure of the temperature sensor is determined.

47.

The method of claim 41, wherein the engine is a snowmobile engine.

Page: 225

Page: 226

Page: 227

Page: 228

Page: 229

Page: 230

ANNEX “B”

[Blank/En

blanc]

AC

[Blank/En blanc]

BRP

Mr. Carter

Neutral

Mr. Ugone

1.

2.

Transfer of technology

Practice of patent

Neutral

BRP

AC

Neutral

AC

3.

Non-exclusive license

Territorial limitations

Term of license

4.

5.

6.

Competitive technology

Competition licensor-licensee

Demand for the product

Risk

7.

AC

8.

BRP

AC

BRP

9.

Neutral

BRP

10.

11.

12.

13.

AC

Novelty of invention

Compensation for R&D

Displacement of business

Capacity to meet demand

AC

BRP

AC

Neutral

AC

*For each factor, the expert indicated which party would be favoured in a virtual negotiation.

BRP spoke in terms of upward or downward pressure on the royalty rate while AC gave the

nod directly to one or the other of the parties.

FEDERAL COURT

SOLICITORS OF RECORD

T-1353-13

DOCKET:

ARCTIC CAT INC. v BOMBARDIER RECREATIONAL

PRODUCTS INC.

STYLE OF CAUSE:

TORONTO, ONTARIO

PLACE OF HEARING:

DATE OF HEARING:

SEPTEMBER 14, 15, 16, 17, 18, 21, 22, 23, 24, 25, 28, 29,

AND 30, 2015; OCTOBER 1, 2, 5, 6, 7 AND 8, 2015;

JANUARY 25, 26, 27 AND 28, 2016; FEBRUARY 1

AND 2, 2016

ROY J.

CONFIDENTIAL JUDGMENT

AND REASONS AND

PUBLIC JUDGMENT AND

REASONS:

SEPTEMBER 16, 2016

DATED:

APPEARANCES:

Ronald Dimock

Michael Crinson

Ryan Evans

FOR THE PLAINTIFF

Bentley Gaikis

Naomi Metcalfe

Marek Nitoslawski

David Turgeon

Joanie Lapalme

Michael Shortt

FOR THE DEFENDANT

SOLICITORS OF RECORD:

Dimock Stratton LLP

Toronto, Ontario

FOR THE PLAINTIFF

Fasken Martineau DuMoulin, LLP

Montreal, Quebec

FOR THE DEFENDANT