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Declarations - In Rem v In Personam. Mud Engineering Inc. v. Secure Energy Services Inc.
In Mud Engineering Inc. v. Secure Energy Services Inc. (Fed CA, 2024) the Federal Court of Appeal emphases the unique 'in personam' result when the court refuses to issue a sought declaration on poor evidence [see para 42]:[17] The appellants also submit that the Federal Court’s decision in the main appeal has created an absurd result: neither the appellants nor the respondents obtained a declaration that they own the patents and so, as a result, no one owns them. They raise the spectre that we now have patents that cannot be defended.
[18] The result is not absurd. Courts do not declare that someone owns property unless they are satisfied they have the factual and legal bases to make that declaration. Here, after weighing the evidence before it, the Federal Court found that both sets of parties fell short of the mark. The Federal Court was entitled to so find, given the state of the evidence before it.
[19] Further, the Federal Court’s decision in the main appeal does not leave the parties without a remedy for an infringement of the patents in appropriate circumstances. The decision binds these two parties as against each other but does not bind them against third parties. Absent an abuse of process (see, e.g., Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63, [2003] 3 S.C.R. 77), either remains free to contest an infringement of the patents by third parties and to succeed if, among other things, their ownership of the patents is contested and they are able to offer sufficient evidence proving ownership.
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[25] And sometimes no remedy should be given at all. An appellate court will send the matter back for redetermination only if, among other things, there is some possibility that the error might have changed the outcome. Sending a case back to a first-instance court for redetermination, when the outcome would have remained the same despite the error, makes no sense.
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