Federal Court of Appeal Orders Redrafting of Amended Paragraph in Pleadings to Remove Assumptions and Speculations
Bayer Bioscience N.V. v. Monsanto Technology LLC, 2010 FCA 68 (
Létourneau, Dawson and Stratas JJ.A.)

March 3, 2010

Christopher Van Barr and Martha Savoy for the Appellant, Bayer Bioscience N.V. (“Bayer”)
L.E. Trent Horne for the Respondent, Monsanto Technology (“Monsanto”)
Michael D. Crinson and Michal Niemkiewicz for the Respondent, Mycogen Plant Science (“Mycogen”)

This was an appeal by Bayer from the Federal Court’s judgment in Mycogen et al. v. Bayer, 2009 FC 1013, in which Hughes J. granted Monsanto’s and Mycogen’s motions to amend their pleadings, subject to certain redrafting requirements. The main actions, ordered to proceed together, involve conflict proceedings in the Canadian Patent Office (conflict proceedings determine which applicant has senior rights when two applications for the same invention and co-pending).  The proposed amendments were based on Bayer’s alleged lack of candour or bad faith during the prosecution of Bayer’s patent application. Hughes J. was satisfied the proposed amendments passed the Canderel test (Canderel Ltd. v. Canada, [1994] 1 F.C. 3): they would not result in an injustice to the opposite party that could not be compensated in costs and would serve the interests of justice. On a motion to amend pleadings, the facts as set out in the proposed amendments are taken to be proven. To be successful, the party resisting the amendment must demonstrate that it is plain and obvious that the amended allegations sought cannot succeed. Bayer argued that the amendments did not raise an issue that could be properly determined in the context of the main actions. Hughes J. disagreed, holding that the state of the law respecting conflict proceedings in general and the duty of candour in respect of submissions to the Patent Office was not so certain as to make it plain and obvious that the allegations within the proposed amendments could not succeed. Further, it was not plain and obvious that a claim for relief could not be claimed or a defence could not be raised based on a plea of lack of candour.

Accordingly, Hughes J. allowed the amendments, subject to Monsanto particularizing the allegations from one amended paragraph of its reply and defence to counterclaim, and redrafting another amended paragraph to remove assumptions and speculations. This latter paragraph (para. 14) was framed on the basis that the “Commissioner would not have concluded” something and “would not be included” something. So pleaded, the paragraph included assumptions and speculations to the actions that the Commissioner of Patents might have taken. Such assumptions and speculations had to be removed: they were prejudicial to Bayer as they made it impossible to take the allegations in the paragraph as proven.

The Federal Court of Appeal allowed Bayer’s appeal from Hughes J.’s judgment only to the extent that Hughes J. should have required the removal of assumptions and speculations in another amended paragraph of Monsanto’s reply and defence to counterclaim almost identical to para. 14. 

By: Eugene F. Derényi and Anny Vexler, Stikeman Elliott LLP