In June 2008, in the case of Research In Motion v. Visto Corp., the Federal Court had an opportunity to consider how an award of costs should be varied in circumstances where the Court was of the view that the conduct of the litigation was overzealous, and inconsiderate of the Court's time and resources.
Research In Motion (RIM) and Visto Corp. were embroiled in expansive patent-infringement litigation. In addition to the Canadian lawsuit, litigation between the parties had been ongoing in the United States and Great Britain. In Canada, RIM alleged that Visto was infringing three of its patents, and claimed for damages, profits and an injunction; Visto responded by alleging that the patents were invalid.
The final result of the litigation, by contrast, was fairly modest. The parties settled the matter shortly before trial. They agreed that the RIM patents were valid, and had been infringed. Instead of the substantial relief claimed by RIM at the outset, the final settlement was only for damages, and RIM abandoned its claim to an injunction. Finally, although the amount of damages was to be determined later, all the evidence pointed to a small award.
Hughes J. noted that up until a few months before trial, the parties were conducting the litigation as an "all out war." Particularly bothersome to the Court was the parties' refusal to narrow the issues, or focus the litigation. RIM asked for a broad range of remedies, and alleged that almost every claim in the three patents was being infringed. Visto raised a large number of invalidity issues, made numerous references to prior art, and only focused its arguments a few months before trial.
The Court devoted significant time, effort, and resources to this case. The parties originally reserved ninety days for the trial, and the Court expended substantial resources to case-manage and mediate the matter.
When the case was settled shortly before trial, the Court's time in preparation was wasted, and the lengthy time booked for trial was cancelled on comparatively short notice. The Court expressed its displeasure by altering the amount that the successful party received for costs. Costs are normally calculated by the Federal Court on the basis of a published tariff, and can vary depending on the length and complexity of the case, the value of the claim, the conduct of the parties, offers to settle, and actual disbursements. In this case, the Court calculated RIM's entitlement to costs by its usual method, but to express its displeasure over the conduct of the case, the Court reduced the previously calculated cost award by half.