This decision relates to the remedy portion of an infringement action in which the Plaintiffs were successful. That decision was upheld on appeal. The Plaintiffs elected an accounting of the Defendants’ profits.
The Court began by noting the burden on each party, namely that the Plaintiffs must establish the Defendants’ revenue attributable to the sale of the infringing product, and the Defendants must establish the costs incurred in the production and sale of the infringing product and any applicable apportionment. The Defendants argued that a portion of their revenue should be deducted from the revenue to be used for the calculation because it was paid for non-infringing indemnity and legal services to its affiliates in other countries, and was not related to the sale of the infringing product. The Court disagreed based on the evidence and also found that apportioning that revenue would not be equitable in this case.
The Defendants also argued that there were non- infringing alternatives (NIAs) available and the differential profit approach should be applied. The Court found that the Defendants could deduct only their stipulated incremental costs. The Court rejected the arguments made by the Defendants with respect to NIAs. The Court stated that “the Supreme Court of Canada simply reiterated that ‘the inventor is only entitled to that portion of the infringer’s profit which is causally attributable to the invention’ (Schmeiser,at para 101). In other words, the ‘Preferential profit’ approach is preferred over the actual profit approach when the latter would lead courts to order the infringer to disgorge its profits from its sales, whether or not the invention was only a portion or component of the good sold or used and whether or not the infringer’s profits were only partly attributable to the infringement.” Notwithstanding its findings with respect to the NIAs, the Court considered whether any NIAs were available to the Defendants, and concluded there were not.
The Defendants brought a motion for an order staying the Order until the latest of the exhaustion of all appeals including the Supreme Court of Canada, and the final determination of cases in the UK. The motion was dismissed. The Court also refused to redact much of the information submitted by the Defendants to be confidential.