The Canadian “accounting of profits” remedy for patent infringement, which is not available in the U.S., provides a potentially significant opportunity for companies with Canadian IP rights.

In Canada, a successful patentee in a patent infringement action is usually entitled to elect between the damages it has suffered as a result of the infringement and an accounting of the defendant’s profits. Whereas damages compensate the patentee for its losses due to lost sales (or in the alternative, allow the patentee to recover a reasonable royalty on the infringing sales), an accounting of profits allows the patentee to recover the infringer’s profit earned from the infringement.

Recent court decisions have highlighted the potential advantages of the accounting of profits remedy, including Dow v Nova, in which the accounting remedy was used to obtain the highest reported Canadian patent infringement award of C$645 million.