Reading & Bates Construction Co. v. Baker Energy Resources Corp.

Reading & Bates Construction Co. (Reading) (plaintiff) owned two Canadian patents. Reading sued Baker Energy Resources Corporation (Baker Energy) (defendant) in a Canadian court for patent infringement, claiming that Baker Energy had used certain processes and techniques in a pipeline installation that were protected by Reading’s patents. The Canadian court determined that Baker Energy had violated one of the patents and entered a money judgment holding Baker Energy liable to Reading for the profits that Baker Energy had earned by the patent infringement. Reading then commenced an action in a Texas court seeking to enforce the Canadian judgment in Texas. Baker Energy voluntarily appeared in the Texas action. Baker Energy argued that, under Texas’s foreign-money-judgment-recognition statute, the Canadian judgment could not be enforced in Texas because Canada did not give reciprocal effect to analogous Texas judgments. Baker Energy also asserted that the money damages awarded by the Canadian court were excessive compared to the damages that were available in the United States. Baker Energy further contended that, because Canada and Texas had different standards for measuring damages, if an American court had awarded the judgment, a Canadian court would find it inconsistent with Canadian public policy and would not enforce it. The Texas court agreed with Baker Energy, concluding that Canadian law did not allow for the enforcement of an American money judgment entered upon a measure of damages that was not recognized in Canada. Reading appealed.