Safe Gaming Systems Inc. v. Atlantic Lottery Corporation, 2013 FC 217
Before filing their defences to this patent infringement action, the Defendants moved to strike the action against them on the grounds that the Federal Court lacks personal jurisdiction over them as Crown defendants. The Defendants maintain that while the Federal Court has subject matter jurisdiction over patent infringement actions, it does not have personal jurisdictions in actions against them as agents of the Crown in right of the Province of Nova Scotia.
In the underlying action, Safe Gaming alleged patent infringement in respect of electronic gambling activities carried out by the Nova Scotia Gaming Corporation, the Atlantic Lottery Corporation, and Tech Link International Entertainment Limited. Safe Gaming is the owner of Canadian Patent No. 2,331,238, entitled “Safe Gaming System”, which claims a technological solution to proactively prevent problem gambling and to monitor and regulate responsible gaming activities of an individual.
Motion is dismissed. Federal court has personal as well as subject matter jurisdiction to entertain patent infringement actions against Crown defendants.
The Defendants advanced two arguments against the Federal Court’s ability to assume jurisdiction: first, they relied on Dableh v Ontario Hydro  FCJ No 913 (Dableh), where the Court held that an action in tort/patent infringement against a provincial Crown agent corporation must be brought in provincial court unless a statute expressly provides for Federal Court jurisdiction “ratione personae” over the Crown. The Defendants’ second argument was that the Nova Scotia Proceedings Against the Crown Act requires proceedings against the Crown to be brought in the Supreme Court of Nova Scotia. Thus, as agents of the Crown, any proceedings against them, argued the Defendants, can only be taken in the Supreme Court of Nova Scotia.
The law has changed since the Dableh decision. Section 2.1 of the Patent Act was amended in 1993 and now states, “The Act is binding on Her Majesty in right of Canada or a province.” Further, while section 54 of the Patent Act gives concurrent jurisdiction to the provincial courts in matters of patent infringement, section 54(2) provides that “Nothing…impairs the jurisdiction of the Federal Court under section 20 of the Federal Courts Act [FCA]…”
Other than in areas such as patent expungement where it has exclusive jurisdiction, section 20(2) of the FCA, gives the Federal Court concurrent jurisdiction in all other cases in which a remedy is sought under the authority of any Act of Parliament respecting any patent. The Patent Act is such an Act of Parliament which now extends patent remedies as against Her Majesty in right of Canada or a province. The remedies that are available under the Patent Act against the provincial Crown are therefore enforceable in the Federal Court.
This decision provides a clear statement that the Federal Court considers itself possessed of personal as well as subject matter jurisdiction over provincial Crown defendants in patent infringement proceedings. In addition to relying on the Patent Act and the Federal Courts Act, and Court also offered an argument based on judicial economy to support its jurisdiction:
 I would add that the Defendants’ reading of the FCA and Patent Act to preclude the jurisdiction of this Court in respect of remedies for patent infringement as against the Crown would result in a multiplicity of proceedings that Parliament would not have intended. The Federal Court has exclusive jurisdiction as relates to the expungement of patents. Thus, should the Defendants wish to defend against the action by attacking the validity of the plaintiff’s patent, they would only be able to do so in this Court. As the plaintiff rightly points out, such a scheme would not ensure the best attainment of the objects of section 20 of the FCA, and of the Patent Act, in accordance with the interpretive principle set out in section 12 of the Interpretation Act, RSC 1985, c I-21. (emphasis added)
This part of the judgement appears to be in obiter; however, the underlined sentence is somewhat worrisome as it appears to conflate patent impeachment with raising an invalidity defence in patent infringement proceedings. While impeachment proceedings are limited to the Federal Court, an invalidity defence can always be raised in a patent infringement proceeding, regardless of whether the proceeding is before a provincial court or the Federal Court.