Following a 'with prejudice' dismissal of a patent infringement action in the US, the defendant sought summary judgment in the parallel Canadian proceeding, Google LLC v Sonos, Inc. The defendant argued that: (1) there was no genuine issue for trial on infringement considering admissions by the plaintiff in the US; or (2) summary judgment was warranted under the doctrines of res judicata or abuse of process. This case is interesting because of the substantial similarities between the patents at issue in the US and Canadian actions, including identical claims. Notwithstanding these similarities, the motion for summary judgment failed. Among other reasons, the Court concluded that the plaintiff had not made any factual admissions in the US proceeding, and even if it had, any such factual admissions would not necessarily be determinative of Canadian infringement because of legal differences in claim construction between the US and Canada.
Background
The Plaintiff, Google LLC, owns Canadian Patent 2,545,150 (the "150 Patent") that covers a method and apparatus for reconfiguring noise suppression and echo cancellation based on noise conditions. The 150 Patent claimed priority from US Application No. 10/718,156 which issued as US Patent No. 7,065,206 (the "US 206 Patent"). The 150 Patent and US 206 Patent have identical titles, detailed descriptions and figures, and share 11 identical claims.
The Defendant, Sonos Inc., develops and manufactures multi-room audio devices and sells products in the US and Canada with the same functionality, source code, and packaging.
In August 2020, Google sued Sonos in Canada and the US, alleging that Sonos' smart speakers and soundbars infringed the 150 Patent and the US 206 Patent (in the District Court for the Northern District of California; the "US Action"). In both actions, Sonos denies infringement, including asserting the absence of an essential element of both patents - namely, "adaptive determination of an order of noise suppression and echo cancellation".
Between April 2021 and June 2021, the parties jointly moved to dismiss the US Action through a "Stipulation of Dismissal" whereby Google agreed to dismiss with prejudice its claims of infringement of the US 206 Patent, and Sonos agreed to dismiss without prejudice its defences related to the US 206 Patent. This Stipulation of Dismissal (the "Stipulation") was based on an Affirmation Letter provided by Sonos. The Affirmation Letter contained a set of affirmations requested by Google and expressed that the information provided in the letter should be sufficient for Google to dismiss with prejudice its action under the 206 Patent. The Stipulation and Affirmation Letter were also provided in the context of correspondences between Google and Sonos whereby the parties expressed their positions on claims construction and infringement without agreeing on these issues.
Following the issuance of the Stipulation in the US Action, Sonos brought a summary judgment motion before the Federal Court in Canada against Google on the basis that there was no infringement by Sonos, the action was barred by principles of res judicata, and that the action was an abuse of process.
Analysis
As both parties were relying on US legal proceedings as evidence in this motion, both parties filed expert evidence on US law from US lawyers. It is well established in Canadian courts that questions of foreign law are treated as questions of fact and require proof through expert evidence. Sonos argued that the admissibility of expert evidence on foreign law does not extend to the expert's opinion on the application of that law to the relevant facts and that certain paragraphs of Google's expert evidence should be struck. The Court did not agree there was such a bar to the application of foreign law to the facts and found Google's expert evidence admissible.
The Federal Court found that the Stipulation did not amount to factual admissions by Google. The Federal Court accepted the evidence of Google's foreign law expert that neither party had conceded to the position of the other on the question of infringement of the US 206 Patent in the Stipulation. Furthermore, in reviewing the communications between the parties, the Court did not find that the correspondence, even in combination with the text of the Stipulation, represented an admission by Google of the facts set out in Sonos' Affirmation Letter.
Although Google withdrew its US infringement allegations, the Court found that it did so based on Sonos agreeing to make certain factual representations in a binding stipulation. However, the Court was not satisfied that Google expressly admitted or otherwise agreed to the facts represented by Sonos in these documents. The Court cited Apotex Inc v Wellcome Foundation, for the proposition that while no particular form of words need be used in a concession by a party in order to constitute an admission, the concession must be made deliberately and must be clear. Ultimately, the Federal Court found that the correspondence leading to the Stipulation, as Google described, in the nature of a "pragmatic settlement of that litigation" and that both parties expressly disagreed on questions of claim construction and infringement in that correspondence.
The Federal Court went on to add that under Canadian law, claims construction is a matter of law and even if there had been an implicit agreement between the parties on claims construction of the US 206 Patent in the Stipulation, this would not support a conclusion that the parties also agreed on claims construction of the 150 Patent. Most notably, the Court stated that even if the claims at issue were identically worded, claims construction could nevertheless be different because of the different principles under US and Canadian law and the possibility of different claim constructions would be sufficient to raise a genuine issue for trial.
On the issue of dismissing the action based on res judicata or abuse of process, the Federal Court found that the absence of a judicial determination of any of the facts upon which Sonos' summary judgment motion was grounded meant there is no issue estoppel, under Canadian law, or its US counterpart. The Court also found no abuse of process.
Commentary
The Federal Court's decision reinforces the high threshold required for an action to be dismissed summarily, and the limited effect (if any) that a Canadian court will give to parallel litigation of foreign patents. In the patent context, it is not enough to have a parallel proceeding involving a very similar patent dismissed in another jurisdiction. The Federal Court has indicated that, at a minimum, there must be factual admissions or a judicial determination of the facts, as opposed to simply a result or determinations based on foreign law.
Most notably, the Court has stated that claims construction is a legal issue that is not affected by any party agreement regarding claims construction on identical claims in another jurisdiction.
As a practical matter, this case also serves as a reminder that any settlement or resolution of patent infringement proceedings should consider the intended effect (if any) on foreign counterpart patents. At least in Canada, the default assumption is that a foreign settlement relating to a foreign counterpart has no effect on Canadian infringement allegations.
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