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Tuesday, February 5, 2013

Federal Court denies Monsanto default judgment over patent infringement


Monsanto Canada Inc. and Monsanto Company have been denied an order for default judgment by the Federal Court of Canada in a patent infringement case.  The farmer involved did not file a defence.  Monsanto alleged that the farmer signed a licence with and obtained patented seeds from Monsanto; that the licence permitted the farmer to grow one crop, not to save seeds, and not to replant a new crop from those seeds; and that, notwithstanding the terms of the licence, the farmer saved seeds and planted a crop containing the patented gene. 

The rules required that Monsanto file affidavit evidence in support of its claim.  In other words, although there was no defence filed, the Court would not simply accept the allegations in the claim without some proof.  Monsanto attempted to circumvent this requirement by serving a "Request to Admit", a series of allegations put to the opposing party.  Where the opposing party fails to answer (either by admitting or denying the allegations), as in this case, that party is deemed to have admitted the allegations.

The Federal Court declined to accept this "evidence" as a sufficient basis for a default judgment order:
I am sceptical of such an attempt to “bootstrap” the requirement to provide the necessary evidence to support a default judgment by procedural manoeuvring. While it is true that, particularly in contested proceedings, the Request to Admit process is useful in eliminating the need to prove certain facts, I am satisfied that such a Request cannot be a substitute for affidavit evidence required on a motion for default judgment. Rule 210(3) states that a motion for default judgment shall be supported by affidavit evidence which evidence, in the context of the Rules, I take to be directed to the substance of the claim and not just an affidavit of service. I agree that the Court might even have discretion in respect of certain of the practice and procedural provisions of the Rules. In this case, because there is no affidavit evidence, whatsoever, to support the allegations in the Statement of Claim, I will not exercise any discretion, even if I have it, to accept the unanswered Request to Admit in lieu of such affidavit evidence.

Read the decision at: Monsanto Canada Inc. v. Verdegem.