Majority
APPELLANTS; *Nov.21,22 ITED (DEFENDANTS) ...............
J
*June AND
THERMIONICS,
LIMITED,
AND
RESPONDENTS. OTHERS
(PLAINTIFFS) ..............
ON APPEAL FROM THE EXCHEQUER COURT OF CANADA Patents
Judgment of the Court
JUSTICE-There is one principle upon which it is conceivable that the defence discussed on the argument, if properly pleaded and proved, might be available: ex dolo malo non oritur actio. This principle is stated in the judgment of Buckley L.J. in Gordon v. Chief Commissioner of Metropolitan Police (1) in these words:
The passage was quoted with approval by Lord Wright, M.R., in Berg v. Sadler (3).
I do not see any reason why this principle is not applicable to a case in which a plaintiff must necessarily, in order to establish his cause of action, prove that he is a party to an illegal conspiracy upon which his cause of action rests; nor can I understand why the principle does not apply to an action for infringement of a patent. If the plaintiff's title is founded upon an agreement which amounts to a criminal conspiracy to which he is a party, and which he must establish in order to prove his title, then he cannot succeed. There is nothing, in my opinion, S.C.R.]
in the provisions of the Patent Act referred to on the argument that affects the application of this fundamental I am not satisfied that in no circumstances can the existence of an illegal combine be an answer to such an action.
A reference to a recent decision in the Supreme Court of the United States will illustrate my point. The first two paragraphs in the head-note to Ethyl Gasoline Corp. v. United States (1) are as follows:- Now, if the plaintiff in an action for infringement must, in order to make out his title, prove such a combine, and that he is a party to it, and if his alleged rights are founded upon it or " directly result from it," I think he would find himself in great difficulties.
I do not pursue the subject further. The doctrine laid down by the learned President in his judgment is too sweeping if it is inconsistent with this.
I do not, however, think that the proposed amendment states that the respondents' cause of action is connected with the alleged illegal conspiracy in such a manner as to bring this fundamental, and indeed rudimentary, principle into play.
If B commits an indictable offence and the direct consequence of that indictable offence is that A suffers some special harm different from that of the rest of His Majesty's subjects, then, speaking generally, A has a right of action against B. As at present advised, I think it is not obvious that this well settled doctrine does not apply to indictable offences under section 498 of the Criminal Code; and it is not necessary to decide whether there are no circumstances in which the principle would not operate to prevent the owners of patents and the licensees under patents enforcing their prima facie rights against persons who are the objects and the intended victims of their criminal activities.
There is nothing, . however, in the proposed amendment to suggest the application of any such principle.
It ought to be remembered that the office of pleadings is to state the facts which are the constitutive elements CJ. of the cause of action or the defence.
The proposed amendment does not profess to state the nature of the illegal conspiracy alleged beyond the vague allegation that it is contrary to the common and statute law of the Dominion.
On this ground the application to put this amendment on the record ought to have been dismissed in limine. The learned President by consent treated this vague allegation as raising a question of law within rule If at the trial it appeared that the plaintiff's case was founded upon an illegal transaction to which he was a party, in the sense above indicated, it would be the duty of the trial judge to take notice of it and dismiss the action; but the appellants are proposing to set up their objection in their pleading and in doing so they must observe the rules of pleading and allege the facts which constitute the illegality complained of and the connection of the plaintiff's cause of action with that illegality.
I do not think myself that the proposed pleading raises any question of law which could usefully be considered. The function of rule 151 is to enable questions of law to be decided which arise upon facts alleged or admitted. Here, there are no such facts alleged in the pleading sense. There is a bald allegation, I repeat, of an illegal conspiracy in restraint of trade which is set up, an illegality because it is contrary to the law of the Dominion of Canada. The facts constituting the illegality are not set up. We are not told whether it is a conspiracy to enhance prices or to restrict competition, or what the particular nature of it is, or what the relation of it is to the respondents' cause of action.
And the question seems to have been treated as the question whether in any circumstances the existence of an illegal conspiracy in restraint of trade, to enhance prices for example, could be an answer to an action for the infringement of a patent. That proposition includes the proposition that in such an action a S.C.R.]