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Bell Helicopter rebuked in patent infringement case

The Federal Court of Appeal on Sept. 24 agreed with a
previous decision of the Federal Court that Bell had knowingly violated a
helicopter landing-gear patent owned by Eurocopter, a division of
European space and aviation giant EADS.

In extraordinarily blunt
terms, Federal Appeal Court Judge Robert M. Mainville wrote that “such
conduct departs to a marked degree from ordinary standards of decent
behaviour. It must be denounced in a manner that deters similar
misconduct in the future and marks the community’s collective
condemnation.”

“Where a person infringes a patent which it knows
to be valid, appropriates the invention as its own, and markets it as
its own knowing this to be untrue, punitive damages may be awarded” to
“achieve the objectives of retribution, deterrence and denunciation of
such conduct.”

The case started in spectacular fashion — bailiffs
for Eurocopter crashed a sedate Bell Helicopter information session at
the Paris air show in 2009 and served court orders, all the while taking
pictures of the helicopter landing-gear assembly.

Eurocopter
contended that the landing gear of Bell’s 429 model was a copy of its
proprietary “sleigh” landing gear configuration.

“When we sued (in
2009), Bell changed its landing gear to (a skid landing gear) that we
claim was an easy build-around, if you will,” said Eurocopter lawyer
Marek Nitoslawski of Fasken Martineau.

The courts found the modifications Bell Helicopter brought to its 429 model did not infringe Eurocopter’s patent.

Eurocopter sued again, arguing that even the modified landing-gear was an infringement of its patent, but lost that action.

Barry
Kohler, president of Bell Helicopter Canada, said in an interview that
the only 429 helicopters his firm ever delivered were after the
modifications, “aircraft that were all found to be completely
non-infringing.”

True only up to a point, Nitoslawski said.

“They
did not sell any helicopters with that technology because they modified
it,” he conceded. “But it was still, if you will, a trampoline they
were able to use to develop their (skid) landing gear.”

“So Eurocopter will be looking at that to determine how to assess damages.”

Eurocopter
has asked for $25 million, but although the courts have agreed with the
general principle of punitive damages, no amount has been set.

“We’ll deal with that at a later time,” Nitoslawski said.

Mainville swatted away Bell’s argument that it did not know of the patent or that the patent was invalid.

“It
simply defies belief that a large and sophisticated corporation such as
Bell Helicopter would not verify intellectual property rights prior to
embarking, as it did, on a research program directly involving the study
of the landing gear of a leased (Eurocopter) helicopter. At the very
least, this would be wilful blindness.”

Quoting the previous judge, Mainville found that those claims are “simply not plausible and contrary to the evidence.”

There
were “serious credibility concerns with respect to key aspect of the
testimonies of senior officials of Bell Helicopter. … Bell Helicopter
knew that (its) landing gear closely resembled (Eurocopter’s) landing
gear.”

“Evidence revealed that concerns were raised by Bell
Helicopter employees about these similarities, but brushed away by
management.”

Bell Helicopter’s conduct, the earlier Federal Court
judge wrote, “represented a marked departure from ordinary standards of
decent behaviour. … There is clear evidence of bad faith and egregious
conduct on the part of Bell, … wilful blindness or intentional and
planned misappropriation of the claimed invention.”

Bell
countersued in the U.S., accusing Eurocopter of having interfered with
its ability to conduct business when its bailiffs crashed the Paris
event. The move was needlessly disruptive, Bell said.

But
Nitoslawski said that it’s common in the U.S. to file such counter-suits
“that are totally unrelated just so the parties can negotiate a
settlement.”

“We do feel vindicated,” Nitoslawski said, “because
Bell was shown to be what it is: that it copied this technology and
tried to hide behind that fact.”

But Kohler said that
“immediately, when we were confronted with this situation, we
immediately redesigned the skid gear … to stay away even further from
the patent.”

“We would never knowingly violate an intellectual property of any other company. Integrity is at the core of everything we do.”

“The
main issue to me, the salient point, is that we’re allowed to continue
production of our helicopters. There’s been no disruption in production
and no impact on the backlog or the enjoyment our customers are having
with our aircraft.”