E Mishan & Sons, Inc v Supertek Canada Inc, 2014 FC 326

In this case the Federal Court dismissed an infringement claim made by plaintiffs E. Mishan & Sons, Inc., and Blue Gentian, LLC, regarding the sale of self-expanding garden hoses by defendants Supertek Canada, Inc., Telebrands Corp., and International Edge, Inc. The claims at issue would have been infringed, but were declared invalid for obviousness.

The inventor of the plaintiffs’ product was aware of similar self-expanding hoses before he developed his own version. The inventor was even once approached by a group (the “Ragner group”) who sought to involve him as a promoter of their own self-expanding hose. [46-47] The Ragner group is not a party.

The inventor of the plaintiffs’ product targeted the “infomercial” market, [48] and was very successful in doing so. “The hose he developed filled a particular marketing niche; it was cheap; it was intriguing; it worked in a gimmicky way. It has been a huge success.” [56]

The Patent at Issue – Canadian Patent No. 2,779,882

The plaintiff’s product is the subject of Canadian Patent No. 2,779,882 (the “ ’882 patent”). [30]

The ‘882 patent describes the invention as a hose that automatically expands to an extended state upon application of fluid pressure, and automatically contracts when the fluid pressure is released. The hose is comprised of an inner elastic tube and a distinct outer non-elastic tube that are connected only at both ends such that the outer tube is able to move freely with respect to the inner tube all along its length. [19] When in a contracted state, the outer tube wrinkles up over the inner tube. [136]

The patent cites 25 prior patents relating to hoses in the background of the invention, including Canadian Patent No. 6,948,527 (the “ ‘527 patent”), which is associated with the product marketed by the Ragner group. [18]

The Claims at Issue

Claims 1, 15, 28, 42 are each at issue for infringement and validity. [15]

Claim 1 claims a water hose and describes the structure and the expanding functionality of the hose.

Claim 15 depends upon claim 1 and further specifies that the hose is a garden hose.

Claim 28 claims a water hose assembly and describes the structure of the hose assembly.

Claim 42, which depends on claim 32, which further depends on claim 28, claims a water hose assembly and further specifies that a water flow restrictor on the hose. [28]

Who is the Person Skilled in the Art?

The person skilled in the art was defined as:

“A person such as an engineer or technician with experience in the manufacture and/or supply and/or use of hoses for various types of fluids.” [80]

This person would have at least a basic knowledge of fluid mechanics and materials science as they relate to hoses and how hoses generally work to convey fluids from one place to another. [80]

What is the Relevant Prior Art?

One piece of prior art is the Roll A Hose, a self-expanding hose that has been sold by defendant Telebrands Corp. since 2002. The hose includes an inner tube with a fabric cover, rolls up flat when not in use, and expands radially but not longitudinally. [84]

Another piece of prior art is the Micro Hose promoted by the Ragner group and the ‘527 patent, published in 2005, of which the Micro Hose is the subject matter. [85] This hose includes an elongated spiral spring, which could be elastic, to which an inner and outer layer of flexible material is applied. [86] Upon application of water pressure, the hose can expand and contract lineally, but not radially. [86] The inventor of the plaintiffs’ product testified that he had seen this hose or a similar hose at least a year before being approached by the Ragner group. [85]

A third piece of prior art is the 6,523,539 patent (the “ ‘539 patent”), published in 2003. The ‘539 patent discloses a stowable aviation crew oxygen mask that is elongates axially to a significant extent when pressurized. [87] The ‘539 patent was determined to be locatable by those interested in expandable hoses. [91]

Construction of the Claims

An issue was raised as to the meaning of three phrases used in the claims.

In claims 1, 15, 28, and 42, the Court construed “expanded condition” and “expanded state” to mean that “the hose is in a condition wherein pressure is applied at one end and restriction is provided at the other end such that the inner tube has substantially reached a state where its diameter and length are restrained by the outer tube.” [98]

Considering claims 1 and 15, the Court construed “substantially decreased or relaxed length” to mean that “[t]he hose, when pressure is released, shrinks back substantially to its original length.” [102]

Considering claim 1, the Court construed “increase in water pressure between the first and second coupler” to mean “the increase in pressure within the hose when the fluid flows through the hose is restricted by a flow restrictor.” [105]

The dispute over construction of the latter two terms struck the Court as puzzling or merely wordplay. [102, 106]

Infringement

The defendants Telebrands Corp. and Supertek each sold the products at issue, the Magic Hose and the Pocket Hose. [113] The defendant International Edge was found to be merely an intermediary for which infringement or inducement of infringement could not be made out. [117]

By examining the structure and functioning of the defendants’ hoses at issue,[109-111] the Court found that each of them meet all the elements of claims 1, 15, 28, and 42 of the ‘882 patent, and would infringe the claims if valid. [112]

Anticipation

The defendants argued that claim 1 of the ‘882 patent is invalid because it is anticipated by the United States Patent No. 1,220,661. [119] The Court rejected this argument because the ‘661 patent does not disclose a hose that expands linearly. [126]

Obviousness

Considering obviousness, the Court considered the Roll A Hose, which expands radially but not axially, [131] the Micro Hose (and its associated ‘527 patent), which expands axially but not radially, [132] and the oxygen supply hose in the ‘539 patent. [133-134]

The Court ultimately concluded that the ‘539 patent was the only prior art necessary to show obviousness. [145, 162] The oxygen supply hose expands axially when pressurized, and includes an inner and outer hose where the outer hose wrinkles up over the inner hose. [135] Although the oxygen supply hose delivers oxygen rather than water, the Court determined that a person skilled in the art could see that the oxygen supply hose in the ‘539 patent could be adapted for use as a water or garden hose. [143] The Court rejected the argument that the oxygen supply hose having a regulator and gas mask assembly at one end in place of a more traditional restrictor like a nozzle would preclude a person skilled in the art with making the adaptation. [139, 143]

The Court found the each of the claims at issue, 1, 15, 28, and 42 were obvious having regard to the state of the art, particularly the ‘539 patent. [145]

Claims Broader than the Invention Disclosed

The defendants argued that claims 1, 15, and 28 are covetous in that they are broader than the invention disclosed by the ‘882 patent. [146] The plaintiff pointed to the fact that claim 1 does not specify the outer tube as non-elastic, [147] and that claim 28 does not specify a restrictor. [148] The Court rejected these arguments. [158]

Reading the claims in the context of the specification, the Court determined that the reference in claim 1 to a “fabric material” was sufficient to define the outer tube to be inelastic. [157]

Similarly, the Court determined that the reference in claim 28 that the hose expands under water pressure and is retracted when no water is flowing is sufficient to inform a person that some kind of restrictor is to be provided. [158]

Costs

The defendants were awarded costs, but “[the Court] reduce[d] the costs, including both fees and disbursements, by fifty percent since the Defendants raised many issues upon which they were unsuccessful. The case was essentially one of obviousness having regard to [the ‘539 patent], had the Defendants restricted their case essentially to that issue, the length of the trial and related matters such as discovery could have been much reduced.” [162]

Appeal

The decision is being appealed.

Further issues such as infringement and validity of Canadian Registered Design 146676 and false and misleading statements under the Trade-Marks Act and the Competition Act were deferred to a later time.

Commentary

This case is an example of fierce competition in the “infomercial” market being taken to the courts in the form of a patent infringement dispute.

This case also serves as an example of how a court may handle claims construction where an allegation is made that the claims are broader than the invention. In this case, the Court read the claims with reference to the entire specification to resolve issues where the claims were not as specific in describing the invention as the patent description. Interestingly, the Court held that language in a dependent claim can operate to specifically disclaim a positively recited element in a claim from which it depends (in this case, “fabric material” in claim 1 was held by the Court to be “material that may or may not be fabric so long as it is a material that will not stretch” on the basis that claim 2 recited “a material which will not stretch longitudinally or laterally”. [157]

This case also seems to serve as caution to overly zealous litigators who may wish to raise more issues than are necessary to make their case. As in this case, the consequence may be that successful party’s cost award is significantly reduced.