Federal Court Dismisses Patent Infringement Action Due to Speculative Statement of Claim

On June 12, 2017, the Federal Court (the Court) ordered that the plaintiff’s amended statement of claim be struck, and that the patent infringement action be dismissed, on the basis that the claim disclosed no reasonable cause of action and was an abuse of process (Mostar Directional Technologies Inc v Drill-Tek Corporation, 2017 FC 575).

The Court found that a statement of claim in a patent infringement action should provide material facts that clearly show that (1) the plaintiff has a defined right; and (2) the defendant encroached on that defined right.  The central issue in this case was whether the plaintiff, Mostar Directional Technologies Inc. (Mostar), had pleaded sufficient material facts to establish that Drill-Tek Corporation and Drill-Tek MWD Services Ltd. (collectively, Drill-Tek), had infringed Mostar’s patent rights. 

Drill-Tek asserted that the statement of claim was improper, because it failed to plead “how” Drill-Tek infringed Mostar’s patents.  The Court rejected Mostar’s assertion that the identification of Drill-Tek’s infringing devices and the enumeration of claim numbers was sufficient to enable the defendants to know how they had allegedly infringed the asserted claims.  Mostar also unsuccessfully argued that Drill-Tek could file a bare-bones, deny-all pleading.  The Court stated that this would “defeat the very purpose of pleadings.” 

The Court held that Mostar failed to plead sufficient material facts to constitute an encroachment by Drill-Tek on Mostar’s defined rights.  The Court also concluded that Mostar’s allegation of patent infringement lacked evidentiary foundation, which constituted an abuse of process.  Thus, the Court struck out the statement of claim and dismissed the action without prejudice to the right of Mostar to file a new action if new and non-speculative circumstances arise.

Summary By: Michelle Noonan