The Procter &
Gamble Company, Procter & Gamble Inc. v Brushpoint Innovations Inc.
Background
In the fall of 2012 the applicants sued the respondent in
Federal Court. Prior to trial a settlement agreement was entered into where the
respondent undertook and promised to:
“not make, construct, use, or sell, or induce others to make, construct,
use or sell the Products, in Canada, while any of the Patents are in force”.[2]
The applicant alleged that the respondent induced
Norrizon, its sales agent, in Canada, to sell the product to Target. The
applicant also alleged that the respondent induced, in Canada, Clio, a
manufacturer located in New Jersey, to make and sell the product in the United
States.[13]
Applicants Arguments
The applicant argued that the plain meaning of the
agreement required the respondent to not induce in Canada, others from dealing
with the product anywhere in the world. The applicant also argued that no
extrinsic evidence can be used to interpret it. The applicant alleges that,
since the respondent issued a purchase order in Canada, they actually entered
into a sale’s contract for the product in Canada pursuant to Article 3 of the International Sale of Goods Act, RSO
1990, chapter I. 10.[6]
Respondents Arguments
The respondent argued that if the clause is found to be
ambiguous than the surrounding extrinsic factors should lead to the conclusion
that the agreement was reached only with respect to the Canadian patents. The
respondent further rejects that there is any prohibited activity in Canada.[9]
The respondents position is that the Canadian domestic
law (the Patent Act) applies to the agreement
and that the interpretation presented by the applicant with respect to the International Sale of Goods Act is
untenable at law.[10]
Interpretation of the Covenant
The restrictive nature of the covenant is clear and
unambiguous. The respondent is restricted from making, constructing, using or
selling the products in Canada or inducing someone to do so. Justice
Charbonneau then indicates that “in order
to find that the words ‘in Canada’ apply to the verb induce it would have to
immediately follow that word and then specify that the prohibited dealing with
the products could occur ‘anywhere in the world’.”[11]
Even if the clause was found to be ambiguous, the
extrinsic factors surrounding the agreement are clear – the agreement was meant
to apply only to Canada.[12]
Was the Agreement Breached
The main submission of the applicant was that the
respondent induced a sales agent in Canada to sell the product to Target in the
United States. The applicant also argued that the respondent induced from
Canada a manufacturer located in New Jersey to produce and sell the product.
This does not constitute a breach.
There was no evidence on a balance of probabilities that
the product was made, constructed, used or sold in Canada. Article 3 of the International Sale of Goods Act has no application in this case.
The application was dismissed.