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What level of expertise can a patent owner expect from the courts?
The Federal Court has a high level of expertise in respect of the substantial and procedural aspects of patent litigation.
Are cases decided by one judge, a panel of judges or a jury?
Patent cases are decided by one judge without a jury.
If jury trials do exist, what is the process for deciding whether a case should be put to a jury?
Jury trials are not available for patent cases.
What role can and do expert witnesses play in proceedings?
The Federal Court will generally rely on experts to provide opinion evidence on technical matters outside the experience and knowledge of the court. The court has full discretion in terms of which, if any, expert’s evidence it finds relevant and helpful in terms of the technical interpretation of the patent claims, how the invention works, the state of the prior art and whether there is infringement.
Does your jurisdiction apply a doctrine of equivalents and, if so, how?
The courts’ approach to infringement incorporates elements comparable to the doctrine of equivalents. The court, when construing the claims of a patent, will determine whether the elements of a claim are essential or non-essential to the invention claimed. If an allegedly infringing device or process differs only in respect of a non-essential element, the court will still find infringement. However, if an essential element is missing or varied from the defendant’s device or process, there will be no infringement.
Is it possible to obtain preliminary injunctions? If so, under what circumstances?
It is possible, but preliminary injunctions are rarely granted in patent cases. An applicant must establish three elements:
- a serious question to be tried;
- irreparable harm to the patentee if the injunction is not granted; and
- that the balance of convenience favours a grant.
Irreparable harm is usually the requirement that is difficult to establish, as most infringements can be adequately compensated by a monetary award following a full hearing on the evidence.
How are issues around infringement and validity treated in your jurisdiction?
Issues around infringement and validity are heard by the same court in any particular matter. These issues are determined at trial by the judge, who also determines issues of claim construction in the same proceeding. The same construction will apply to both infringement and validity. There are no Markman-type hearings in Canada to consider construction separately from infringement and validity.
Will courts consider decisions in cases involving similar issues from other jurisdictions?
The Federal Court will often consult decisions from other jurisdictions, although they are not binding. UK case law may be particularly persuasive to a Canadian court if the underlying statutory provisions on the point in dispute are similar.
Damages and remedies
Can the successful party obtain costs from the losing party?
Yes. In a typical case the successful party is awarded its legal costs, which are determined in accordance with a tariff set by the Federal Court. While the successful party will not usually recover all amounts spent, the recovery is generally substantial, with close to 100% of reasonable disbursements and 25% to 50% of amounts spent on legal counsel.
If the court finds that there was inequitable conduct by one or both parties, or positions taken that unnecessarily increased complexity and costs, the court may increase or decrease the cost awards. The court has significant discretion in setting costs.
What are the typical remedies granted to a successful plaintiff?
In Canada, unlike in the United States, a successful patentee may choose between damages or an account of profits. Damages are designed to compensate a patentee for losses incurred due to infringement, while an account of profits aims to disgorge the profits wrongfully earned from infringement. Profits will usually yield a higher award, so are chosen much of the time. In some cases, a patentee who is found by the court to have engaged in inequitable conduct may be found disentitled to choose profits. However, such a patentee will still be entitled to its damages.
As well as a monetary award, a successful patentee will typically obtain a permanent injunction to prevent continued infringement by the defendant.
How are damages awards calculated? Are punitive damages available?
Damages for infringement are calculated by determining what the patentee’s losses were as a result of the infringement. Financial experts typically provide a report to the court to assist in the calculation. A post-trial reference (after finding liability) is often conducted to review these details.
The patentee may measure its damages as its lost profits on the amount of patented product it would have sold if not for the defendant’s infringement, as well as possibly other damages due to market disruption. Alternatively, the patentee may measure its damages by using a reasonable royalty approach on its lost sales.
Punitive damages are available in Canadian patent cases and may be granted where the defendant’s conduct was particularly egregious. A high standard for the level of objectionable conduct is used and ordinary competitive activities will not meet the standard. As well, compared to other jurisdictions such as the United States, punitive damages awards are modest in Canada. They are calculated on the basis that some additional deterrence may be needed to prevent parties from engaging in immoral or otherwise egregious behaviour. However, if the award of general damages is substantial enough to constitute deterrence, additional punitive measures may not be awarded, even if the court found the losing party’s behaviour objectionable.
How common is it for courts to grant permanent injunctions to successful plaintiffs and under what circumstances will they do this?
Permanent injunctions are almost always granted when the patent has been found valid and infringed. Since it is a form of equitable relief, courts do have discretion to withhold this remedy but this is a rare circumstance.
Timescale and costs
How long does it take to obtain a decision at first instance and is it possible to expedite this process?
On average, it takes three to four years to proceed to trial for an action not involving a pharmaceutical patent. It is possible to expedite the process by using the case management procedures of the Federal Court during conduct of the proceeding.
For pharmaceutical patent cases involving a patentee and a generic company challenging the patent, these proceed under a different regime. The court sets a target for final determination of the issues within 24 months of commencement, in accordance with an accelerated schedule.
How much should a litigant plan to pay to take a case through to a first-instance decision?
This varies greatly depending on complexity of the issues, the number of interlocutory motions brought and the length of trial. For a patent case on a relatively simple technology going to trial in the typical three to four-year timeframe, it is recommended to budget C$750,000 to C$1.25 million, with the majority of expenses being incurred in the last year of the case. However, approximately 90% of cases settle before this stage.
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