Bell Canada and its sister firm, Bell Aliant Inc., are preparing to ask a federal court to remove a leading intellectual property law firm from a $350-million patent-infringement lawsuit that was launched against them over their new Internet protocol television services.
The telecom companies say Bereskin & Parr LLP, which represents one of the plaintiffs, MediaTube Corp., should be kicked off the case due an alleged "conflict of interest," according to new court documents filed with the Federal Court in Toronto. In doing so, the telcos are also requesting the court resolve their conflict motion before they are required to file a statement of defence in the patent-infringement case – even though the deadline to do so was last Friday.
Their legal brinksmanship comes as the plaintiffs, which also includes another tech firm called NorthVu Inc., plan to ask a judge, as early as Monday, for a court order to ensure their lawsuit continues as a "specially managed" proceeding, with the goal of having the case tried within two years. They argue that Bell's tactics amount to stalling, which is creating further financial hardship for them due to the growing popularity of the IPTV services, which Bell markets as Fibe TV.
"The Plaintiff's counsel, Bereskin & Parr LLP, are in a conflict of interest and must be removed as solicitor of record for MediaTube Corp.," the telecoms argue in a notice of motion.
Although Bell has yet to file a formal motion to eject the firm from the case, it has provided written notice of its intention to do so over the coming days. Details of the alleged conflict are scant, but documents filed in the case indicate that Bereskin & Parr did previous patent work for Bell that was "unrelated" to the IPTV patent case.
"There is no reason to delay the filing of the defence until after disposition of the motion to disqualify B&P. These are mutually exclusive issues," the plaintiffs say in separate court filings. They also argue that "Bell Canada has not identified to B&P any confidential information that creates prejudice in this action."
Bell, however, maintains that its relationship with Bereskin & Parr stretches back to 2004 when the firm did some work for the old Bell Globemedia, a division that previously included The Globe and Mail. (Bell's parent company, BCE Inc., now owns a 15-per-cent stake in The Globe.) The documents suggest the firm was still on retainer as Bell's lawyers when the firm alerted the telco in February that it planned to take on the patents case involving Fibe.
At that time, Bereskin & Parr was working on eight active trademark files involving Bell and the telecom refused to waive conflicts in the case, arguing the firm's involvement in the patent suit would undermine Bell's interests, documents say. McCarthy Tétrault LLP is now representing Bell on the matter.
Robert MacFarlane, a partner at Bereskin & Parr, declined comment on the conflict allegations Thursday, noting the firm has not yet been informed of the basis of the complaint.
"Bell has asked the court to extend the time for us to deliver our defence until after it hears our motion to remove the plaintiffs' counsel, due to a conflict of interest. We expect the motion to be heard this summer," Bell said in an e-mailed statement. Bell Aliant provided similar prepared remarks.
In April, MediaTube and NorthVu launched the legal action against the telecoms for allegedly infringing a patent when they launched similar IPTV services. They allege they collaborated with Bell Canada over several years to commercialize their IPTV system, which they say is covered by Canadian Patent No. 2,339,477 or the 477 Patent for short.
None of the allegations has been proved in court.
The telcos have argued the issues arising from the patent case are "complex" and they require more time to prepare a proper statement of defence. Still, they suggest in filings that they plan to argue that the patent in question is "invalid because the inventor made no invention." Moreover, the patent "does not claim the Bell TV services," they say.
"Delaying the progress of the action will prejudice the plaintiffs. Since the defendants' launch of their IPTV systems, the plaintiffs' business prospects have diminished considerably and the defendants have been profiting significantly," the plaintiffs argue.
"The plaintiffs estimate that by the time of trial in two years, a reasonable royalty for past infringement will be more than $350-million. A timely decision on the defendants' request for a permanent injunction is needed."