An extract from The Intellectual Property Review, 9th Edition
Enforcement of rightsi Possible venues for enforcement
The Federal Court shares jurisdiction with the provincial superior courts in most enforcement matters. However, the Federal Court has exclusive jurisdiction to invalidate a patent or trademark in rem, or to issue a declaration of non-infringement. The Federal Court also has exclusive jurisdiction in other special cases, such as certain stages of litigation under the PM(NOC) Regulations.
While most IP cases are heard in the Federal Court, it has no jurisdiction to hear claims based solely in common law. Therefore, actions related to trade secrets and breaches of confidential information, or ownership of intellectual property, must be brought in one of the provincial superior courts.ii Requirements for jurisdiction and venue
A patentee or 'person claiming under the patentee' may sue for patent infringement. The term 'person claiming under the patentee' has been held to include both exclusive and non-exclusive licensees.
While any person sued for patent infringement can allege in defence that the patent is invalid as between the parties, the Patent Act also provides that any interested person can seek a declaration of invalidity that will be effective in rem.
Similarly, if a person has reasonable cause to believe that their actions or proposed actions may constitute patent infringement, that person may seek a declaration of non-infringement in the Federal Court.iii Obtaining relevant evidence of infringement and discovery
Typically, evidence is collected from opposing parties through documentary and oral discovery proceedings. Whether a party is entitled to documentary or oral discovery, or both, depends on whether a proceeding is brought as an action or an application.
Anton Piller orders (i.e., civil search warrants for the purpose of preserving evidence that is in danger of being destroyed) are available in Canada, but the threshold to obtain them is high. Also, the orders must be executed carefully to avoid later scrutiny from the court. These orders are primarily used in the context of counterfeit goods.iv Trial decision-maker
All matters before the superior courts and Federal Court are heard by a single judge. None of these courts have specialised judges to deal with intellectual property matters. As a result of the focused nature of the Federal Court's jurisdiction, however, many of the judges of that court have developed considerable expertise in dealing with complex intellectual property matters.v Structure of the trial
As patent trials are typically complex, the liability and validity issues may be separated from the quantification of damages. If this type of bifurcation is ordered, then document production, examinations for discovery, and the hearing are restricted to issues of validity and liability. If the patent is held to be valid and infringed, then damages are quantified in the second phase of the case.
The general rule in civil litigation is that the party that makes an allegation must prove it on a balance of probabilities. A plaintiff in an infringement action must establish all of the facts on which its claim is based. A defendant raising a positive defence must establish all of the facts on which its defence is based.
Patents and other intellectual property registrations benefit from a presumption of validity. In the case of patents for example, a plaintiff in an infringement action need not prove that the patent is valid as a prerequisite to asserting it.
Expert witnesses are typically called upon to testify in complicated IP cases. While the role of an expert witness is to assist the court, experts are retained by the individual parties. Parties are limited to five experts in most cases.
The Federal Courts Rules allow for jointly appointed experts, conferences of experts before trial and a practice sometimes referred to as 'hot-tubbing', wherein experts give their evidence at trial concurrently.vi Infringement and defencesPatents
Patent claims must be read purposively in light of the entire specification. The description portion of the specification cannot be used to expand or limit the scope of the claims and extrinsic evidence is inadmissible. The courts have rejected an approach to claim construction based on the spirit or substance of an invention, as this would run counter to the public interest in being put on notice by the patent claims. An unnecessary limiting element in a patent claim may be considered a self-inflicted wound on the part of the patentee.
Infringement must take place in Canada to be actionable. Infringement is deemed to take place in Canada when an imported product is made abroad by a process covered by a Canadian patent. Similarly, if an important intermediate in a manufacturing process is covered by a Canadian patent, the importation of the final product into Canada will be considered an infringement. A party that knowingly induces another party to infringe a patent is liable for infringement.
A defendant is entitled to allege patent invalidity as part of its defence.
Other defences to patent infringement provided for in the Patent Act and by common law include prior use, experimental use and repair, and exhaustion of rights, among others.Trademarks
Infringement under the Trademarks Act is deemed to take place when a person sells, distributes or advertises goods or services in association with a confusing trademark. In determining whether the use of the trademark would likely lead to confusion, the Court will consider: (1) the inherent distinctiveness of the trademarks and the extent to which they have become known; (2) the length of time the trademarks have been in use; (3) the nature of the goods, services or business; (4) the nature of the trade; and (5) the degree of resemblance between the trademarks in appearance or sound or in the ideas suggested by them. Other statutory and common law causes of action relate to the goodwill associated with a trademark and damage caused to such goodwill by virtue of another party's use of the exact trademark, or a confusing trademark.Copyright
It is an infringement of copyright for any person, without consent, to do anything that under the Copyright Act only the owner of the copyright has the right to do. As the set of rights varies depending on the precise type of work, what constitutes infringement varies from case to case. In general, infringement occurs where a party copies an original work or a substantial part thereof. There are a number of exceptions and defences available, notably fair dealing for the purpose of research, private study, education, parody or satire.vii Time to first-level decision
The time to a first-level decision depends on a number of factors, including: the venue in which the case is brought; the manner in which it is brought (action or application); the scope and complexity of the allegations and defences; and most notably, the conduct of the parties.
Patent cases tend to be complex and are typically decided within 24 to 36 months of the day the case is filed. Applications and other summary proceedings proceed to hearing faster than actions, typically in the range of 12 to 18 months.viii RemediesPretrial remedies
Interlocutory injunctions are seldom issued in IP cases as a person must be at risk of irreparable harm to warrant the grant of an injunction pending trial. This has been very difficult to establish in IP cases, although there are examples showing that in certain circumstances the Federal Court will grant interlocutory relief.Post-trial remedies
Post-trial remedies typically include damages, permanent injunctions or both, which unlike interlocutory injunctions are consistently awarded in IP disputes.
Damages are intended to compensate the plaintiff for its lost profits arising from the infringement of its rights. Damages for convoyed sales and other losses may be recoverable in some cases. In most cases, the court has the discretion to award the plaintiff an accounting of the defendant's profits in lieu of damages.
Punitive and exemplary damages can be awarded in certain IP disputes. While these remedies are generally rare, the Federal Court of Appeal upheld an award of punitive damages in a patent case in which the Court held that a 'sophisticated' defendant had exhibited 'deliberate and outrageous' conduct by making an infringing product that it 'knew or should have known' was the subject of a patent.
Other common remedies include: declarations of infringement, non-infringement and invalidity of the applicable registration; delivery up or destruction of offending goods; and pre- and post-judgment interest on any monetary awards.
In general, a successful party is entitled to its costs of the litigation on a partial indemnity basis, plus compensation for reasonable disbursements.ix Appellate review
Decisions of the superior courts and the Federal Court can be appealed as of right to the provincial courts of appeal or the Federal Court of Appeal respectively, all of which typically sit in three-member panels. As in the courts of first instance, there are no specialised appeal panels that deal exclusively with IP matters.
The standard of review varies depending on the nature of the decision under appeal. On determinations of fact, trial judges are given significant deference. A factual determination will only be overturned on the basis of a palpable and overriding error. In contrast, legal determinations made by the trial judge are assessed on a standard of correctness. With few exceptions, new evidence is not admissible on appeal.
Appeals from the courts of appeal are available with leave to the Supreme Court of Canada. Leave is only granted in cases of national and public importance or for important questions of law.x Alternatives to litigation
While there are alternatives to litigation, they are limited in scope. The Patent Act does not include a formal opposition procedure. A party wishing to oppose an application may file prior art in protest to an application. Re-examination may also be requested on the basis of prior art. In neither case does the objecting party play an active role.
By contrast, the Trademarks Act provides for pre-registration opposition proceedings. These oppositions can be far more cost-effective than litigation before the Federal Court. At the opposition stage, the legal onus is on the applicant to establish that its application is in compliance with the Act, whereas once registered, the onus is on the challenger to establish that the registration should be expunged.