Benefits of litigating in Canada

The year 2017 has been a banner year for IP litigation in Canada. A series of recent cases, from big trials to precedent-setting appeals before the Supreme Court, have garnered international attention from IP owners. With these decisions, changes in law and improved court procedures for assisting litigants in getting to trial and obtaining interlocutory remedies more efficiently, Canada is proving to be an attractive jurisdiction for the protection and enforcement of IP rights.


In AstraZeneca v Apotex(1) the Supreme Court of Canada abolished the controversial 'promise of the patent' doctrine, under which patentees had to prove that the claimed invention was useful for any 'promised' uses found in the specification. This judge-made doctrine had been invoked to invalidate numerous patents over the last decade, and even resulted in a trade dispute between Eli Lilly and Canada under the North American Free Trade Agreement's investor-state arbitration regime.(2) For years patentees had argued that the doctrine was arbitrary and inconsistent, often resulting in the invalidation of patents that were upheld elsewhere. Finally, in June 2017 the Supreme Court unanimously abolished the doctrine, holding that patentees need only establish a "scintilla" of utility relating to the invention's subject matter. The decision was a victory for AstraZeneca (whose patent for its blockbuster gastrointestinal drug Nexium was declared valid), but also for patentees, as it brought the Canadian standard of utility closer to other jurisdictions in terms of the applicable utility requirements for patentability.


In Nintendo v King(3) the Federal Court of Canada had occasion to consider and apply the technological protection measure (TPM) circumvention provisions in the Copyright Act, which had yet to be substantively interpreted since they were enacted in 2012. The court held that the defendants' sale and installation of mod chips and game copier devices which circumvented Nintendo's TPMs – thereby enabling users to play unauthorised copies of video games – constituted circumvention acts which were prohibited under the Copyright Act. The court awarded Nintendo C$12.8 million in statutory damages, calculated based on the number of works which were protected by the TPMs. The decision sets a strong precedent, particularly for the protection of distribution of copyrighted content over proprietary platforms.


In a recent high-profile case, Diageo v Heaven Hill,(4) Diageo was successful in asserting its CAPTAIN MORGAN trademark and trade dress over its bottled rum against the defendant's 'Admiral Nelson's' brand of rum products. The court found that the famous Captain Morgan character had accrued significant goodwill in the marketplace, and that the defendant's use of a similar-looking character and imagery (an admiral in front of a sailing ship) and a similarly shaped bottle and label constituted passing off, even though the defendant's product prominently displayed the 'Admiral Nelson's' brand. The court also found that the defendant's marketing and sale of the 'Admiral Nelson's' brand of rum was an infringement of the plaintiff's registered trademarks for the Captain Morgan character and label, and that the defendant's actions resulted in deprecation of goodwill on those trademarks. This decision is a reminder of the benefits of trademark registrations in key character and label elements used on product packaging, and is the latest example of Canadian courts willing to protect trade dress and goodwill.


These substantive legal developments are bolstered by a recent string of decisions in which Canadian courts awarded substantial and effective remedies.

In Dow v Nova(5) a record amount was awarded in a patent infringement suit involving polymers used in heavy plastic bags, pallet wrapping and food packaging. Dow, the successful plaintiff, elected to recover the defendant's infringing profits as opposed to damages from lost sales, as is often permitted in IP matters in Canada. In this case, the court also awarded an amount for infringing activity that took place after the publication of the patent application but in advance of the patent issuing, and an amount representing the springboard profits enjoyed by the defendant following expiry of the patent as a result of the defendant's infringing activity before expiry. After a reference on quantification, Dow was awarded C$645 million, including pre-judgment interest which was calculated based on a profits-on-profits approach.

Punitive damages are also available in IP litigation in the right circumstances. In the aforementioned Nintendo v King decision, the court awarded C$1 million in punitive damages against the defendant based on evidence of the scale of infringing activity and self-promotion as the "#1" source for the circumvention devices, in an effort to deter large-scale commercial unlawful activity of this kind. In another recent case, Airbus Helicopters v Bell Helicopter,(6) a patent infringement case about helicopter landing gears, the Federal Court awarded C$1 million in punitive damages based on the defendant's "deliberate and outrageous" conduct in wilfully infringing the plaintiff's patent. The punitive damage award was particularly notable because it tripled the total damages award, the court having initially found that only C$500,000 should be awarded as compensatory damages based on a hypothetical royalty between the parties.

Injunctive relief has also been an effective tool to stop infringing activities based in Canada in a variety of recent cases. For example, in Bell Canada v,(7) the court granted an interlocutory injunction against the defendants, who sold set-top boxes preloaded with software designed to access illegal streams of television programmes from the Internet. The court commented that the emerging and new technology used to violate copyright law was no barrier to obtaining an injunction against those who participate in infringing activities. The decision suggests that courts are prepared to employ interlocutory relief more readily than in the past.

The Supreme Court of Canada also recently weighed in on global injunctions against search engines. In Google v Equustek(8) a Canadian technology company, Equustek Solutions, initially brought an action against a competitor, Datalink, who allegedly sold re-labelled Equustek products and appropriated its trade secrets. Datalink conducted business over the Internet, largely outside of Canada. Equustek sought an injunction against Google to remove all search entries for Datalink. Google voluntarily de-indexed a number of Datalink's website entries, but only on its Canadian search portal at Not content with this outcome, Equustek sought an interlocutory injunction against Google to remove all of Datalink's search results worldwide. The Supreme Court upheld the global interlocutory injunction granted by the lower courts, opining that because the "Internet has no borders", the only effective way to attain the objective of the injunction was to apply it globally, where Google operated.

The Google decision raises interesting questions of jurisdiction and enforcement. Indeed, Google has brought a further suit before a US district court seeking a declaration that the Supreme Court of Canada decision cannot be enforced in the United States.

Benefits of litigating in Canada

Litigating in Canada can be fast, effective and strategically important to IP owners. In addition to the recent legal developments described above, the following features of the court system make Canada an attractive jurisdiction in which to commence proceedings.

Effective remedies
As noted above, plaintiffs have access to a variety of flexible remedies including damages, disgorgement of profits, punitive damages and permanent or interlocutory injunctive relief.

Costs to victor
Canada is a loser-pays jurisdiction, meaning that a successful party is entitled to a percentage of the costs of lawyer fees and full reimbursement for all reasonable disbursements (eg, expert fees). In complex IP litigation, parties have received substantial costs awards – for example, in the Dow v Nova decision described above, the court awarded C$6.5 million to Dow for the costs of its successful patent infringement action.

No forum shopping
In Canada, IP litigation such as patent and trademark infringement actions are typically conducted in the Federal Court, which has exclusive jurisdiction over the validity of patents and trademark registrations. This generally means that parties will not spend significant time on disputes over forum or jurisdictional shopping issues (a matter that may be of interest to US litigants following the Supreme Court decision in TC Heartland v Kraft Foods).

No file wrapper estoppel for patent actions
Unlike the United States, there is no doctrine of file wrapper estoppel in Canada. Courts have consistently refused the use of prosecution history and other extrinsic evidence to interpret patent claims.

Quick, cost-effective procedures available
Canadian courts have recognised the need for timely adjudication of claims by civil litigants. Courts have been encouraged to adopt rules and procedures to facilitate quick resolution.(9) In the Federal Court, where most IP litigation occurs, there are numerous ways to achieve a speedy result. If discovery of the defendant is not necessary, a plaintiff can proceed by way of application using affidavit evidence, instead of the usual oral testimony in the case of full actions. Litigants may also seek to pursue summary trials where the number of disputed issues are limited. Summary judgment is also available where there is no genuine issue to be decided at trial. Finally, the Federal Court has implemented proactive case management guidelines for IP litigation resulting in faster adjudication of interlocutory and procedural matters. Using these tools, litigants can reach a hearing on the merits within two years.

No jury trials
Also unlike the United States, IP litigation in the Federal Court does not feature jury trials. Instead, complex issues of infringement, including in the patent context, are decided by a trial judge alone.

More focused, less expensive discovery
Pursuant to the Federal Court Rules, only the attendance of a single corporate representative for each party for oral discovery is required (although inventors may also be deposed). Unlike in the United States, there is no requirement for the fact deposition of numerous individuals during the discovery process. As a result, discovery is less expensive. Recent case management guidelines from the Federal Court also limit the amount of time that can be allotted for discovery, thereby encouraging parties to focus on the important issues.

The landscape for Canadian IP litigation has changed dramatically and Canada has evolved into an attractive jurisdiction for litigation with effective remedies for IP enforcement. Global IP owners should consider the strategic value and importance of litigation in Canada, especially given its close economic relationship and strong trade position with the United States.

For further information on this topic please contact Steven Garland at Smart & Biggar/Fetherstonhaugh's Ottawa office by telephone (+1 613 232 2486) or email ([email protected]). Alternatively, contact Kevin Siu at Smart & Biggar/Fetherstonhaugh's Toronto office by telephone (+1 416 593 5514) or by email ([email protected]). The Smart & Biggar/Fetherstonhaugh website can be accessed at


(1) AstraZeneca Canada Inc v Apotex Inc, 2017 SCC 37.

(2) Eli Lilly and Co v Government of Canada, ICSID Case No UNCT/14/2.

(3) Nintendo of America Inc v King, 2017 FC 246.

(4) Diageo Canada Inc v Heaven Hill Distilleries Inc, 2017 FC 571.

(5) The Dow Chemical Co v Nova Chemicals Corp, 2017 FC 350, further reasons at 2017 FC 637, appeal pending.

(6) Airbus Helicopters SAS v Bell Helicopter Textron Canada Limitée, 2017 FC 170, appeal pending.

(7) Bell Canada v 1326030 Ontario Inc dba, 2016 FC 612, aff'd 2017 FCA 55.

(8) Bell Canada v 1326030 Ontario Inc dba, 2016 FC 612, aff'd 2017 FCA 55.

(9) Hryniak v Mauldin, 2014 SCC 7.