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Enforcement through the courts

Strategy

What are the most effective ways for a patent owner to enforce its rights in your jurisdiction?

The most efficient way is for the patent owner to write a cease and desist letter which results in the infringer ceasing to infringe. If the infringing party does not cease infringing, the patent owner can bring an action for patent infringement to enforce its rights.

What scope is there for forum selection?

A plaintiff can choose between the provincial courts and the Federal Court. The provincial courts retain jurisdiction to hear infringement actions, but any verdict rendered is binding only in the province where the court is located. Verdicts rendered in the Federal Court are binding nationwide. Therefore, the vast majority of patent litigation is heard in the Federal Court. Additionally, the Federal Court has exclusive jurisdiction to impeach patents in rem (ie, to vary or expunge the records of the Patent Office), whereas provincial courts may only declare claims invalid in personam (ie, between the parties to a dispute).

While the Federal Court has courthouses in several Canadian cities – forum shopping as is found in the United States – does not occur. The Federal Court does not have jurisdictional differences that would lead a patentee to commence litigation in one area over another for any reason aside from geographical proximity.

Pre-trial

What are the stages in the litigation process leading up to a full trial?

The litigation process consists of the following stages:

  • forum selection (provincial courts or Federal Court);
  • pleadings – statement of claim and originating document, statement of defence and counterclaims;
  • amendments to pleadings – motions to strike pleadings and demands for particularisation;
  • posting of security for costs if litigant is not resident in Canada;
  • documentary discovery;
  • oral discovery;
  • exchange of expert reports;
  • mediation and pre-trial conferences; and
  • trial.

How easy is it for defendants to delay proceedings and how can plaintiffs prevent them from doing so?

There are a number of tactics that defendants have employed to try to delay proceedings. These include:

  • bringing motions to strike pleadings;
  • failing to produce all relevant documents in a timely manner;
  • failing to produce a knowledgeable witness for discovery;
  • seeking time extensions; and
  • bringing motions in respect of documentary and oral discovery.

Plaintiffs can best prevent delay by asking for early case management in the Federal Court and by being prepared for each step of the litigation to ensure that it does not contribute to any delay.

How might a party challenge the validity of a patent through the courts in anticipation of a potential suit for infringement being issued against it?

Pursuant to Section 60 of the Patent Act, an interested person may bring an impeachment action seeking to invalidate a patent. An interested person would include someone that reasonably believes an infringement suit will be brought against it.

At trial

What level of expertise can a patent owner expect from the courts?

Overall a patent owner can expect a high level of patent law expertise from the Federal Court. Most Federal Court judges are experienced in adjudicating patents. While most do not have technical backgrounds and many did not have backgrounds in patents as lawyers, some recent appointees to the bench were patent lawyers and registered patent agents and have technical backgrounds.

Are cases decided by one judge, a panel of judges or a jury?

There are no juries in IP cases in Canada. At first instance (ie, a provincial court or the Federal Court) one judge decides the case. At the appellate level (ie, a provincial court of appeal or the Federal Court of Appeal) three judges decide the case. Nine judges sit on the Supreme Court of Canada and typically at least seven of these nine will hear a case that is appealed to this level.

If jury trials do exist, what is the process for deciding whether a case should be put to a jury?

No patent trials involve juries in Canada. 

What role can and do expert witnesses play in proceedings?

Experts assist the court in understanding the technical subject matter of a patent and offering insight as to what a skilled person in the art would have known at relevant times. The court often considers these opinions when it construes patent claims. Courts have also relied on expert opinion when determining whether a patent was infringed or invalid. Experts must be impartial and before they can testify they must sign a code of conduct for impartiality.

The Supreme Court of Canada has set out four factors to determine the admissibility of expert evidence. Expert evidence is admissible when the following four criteria are met:

  • relevance;
  • necessity in assisting the trier of fact;
  • the absence of any exclusionary rule of evidence; and
  • a properly qualified expert.

Does your jurisdiction apply a doctrine of equivalents and, if so, how?

Canada does not apply the doctrine of equivalents. 

Is it possible to obtain preliminary injunctions? If so, under what circumstances?

It is possible to obtain interim and interlocutory injunctions in patent cases. For a preliminary interim or interlocutory injunction, the moving party must show that:

  • there is a serious issue to be tried;
  • it will suffer irreparable harm if the injunction is not granted; and
  • the balance of convenience favours the granting of an injunction.

Sufficient urgency in granting the injunction must also exist.

In practice, it is difficult to obtain a preliminary injunction in a patent case because of the necessity to prove irreparable harm (harm is irreparable only if it cannot be quantified economically).

How are issues around infringement and validity treated in your jurisdiction?

Actions for both infringement and impeachment are specifically contemplated in the Patent Act (Sections 54 and 60 respectively).

Will courts consider decisions in cases involving similar issues from other jurisdictions?

Courts will consider decisions from other jurisdictions. However, foreign jurisprudence is not binding on the Canadian courts and is typically considered only when a gap in Canadian jurisprudence is encountered.

Damages and remedies

Can the successful party obtain costs from the losing party?

The default rule for costs is that a successful party recovers a portion of its costs from the losing partyThese costs are based on a tariff in the applicable rules which set out the amounts that are recoverable for each step in the proceeding. However, judges have commented that recovery pursuant to the highest possible values under this tariff are “totally inadequate” as they amount to only approximately 10% of the successful party’s fees. Courts have been awarding costs in lump sums in excess of the tariff values and, on average, cost awards in the provincial courts tend to be higher.

What are the typical remedies granted to a successful plaintiff?

A successful plaintiff is entitled to damages according to the Patent Act. In certain circumstances, a successful plaintiff may be permitted to elect to receive an accounting of the defendant’s profits. Typically, the court will also grant a permanent injunction and an order to deliver up or destroy all infringing items.

How are damages awards calculated? Are punitive damages available?

Damages awards are calculated in one of two ways:

  • damages; or
  • accounting of profits.

Damages consider the loss to the rights holder as a result of the infringement. If the patentee could have made all of the sales that the infringer made, the measure of damages is the patentee’s lost profits. If the patentee could not have made all of the sales that the infringer made, the measure of damages is a reasonable royalty in respect of those sales. When quantifying damages, courts also consider the best non-infringing alternatives that would have been available on the market during the time of the infringement. Accounting or disgorgement of profits considers the amount the infringing party made as a result of its infringing actions (again taking into account the profit that it could have made with a non-infringing alternative), which must then be paid back to the rights holder.

Punitive damages are available in patent cases. However, they are available only in limited circumstances, where the defendant is sufficiently blameworthy.

The courts have enumerated several factors which should be considered when attributing blameworthiness to a defendant, including:

  • whether misconduct was planned or deliberate;
  • the defendant’s intent and motive of the defendant;
  • whether the defendant persisted in outrageous conduct over a lengthy period of time;
  • whether the defendant concealed or attempted to cover up its misconduct;
  • the defendant’s awareness that what it was doing was wrong;
  • whether the defendant profited from its misconduct;
  • whether the interest violated by the misconduct was known to be deeply personal to the plaintiff.

Simple knowing and wilful infringement is insufficient to justify a punitive damages award. A claim for punitive damages may succeed when knowing and wilful infringement is combined with an element of maliciousness.

How common is it for courts to grant permanent injunctions to successful plaintiffs and under what circumstances will they do this?

It is typical for the courts to grant a permanent injunction to a successful patentee. The courts will grant a permanent injunction unless there is some reason not to do so. For example, if the patentee is guilty of some misconduct which could disentitle the plaintiff to equitable relief, a permanent injunction could be denied. Similarly, if the patentee does not sell a competing product to the infringing product, a permanent injunction could be denied. 

Timescale and costs

How long does it take to obtain a decision at first instance and is it possible to expedite this process?

The length of time is variable and is dependent on many factors, including:

  • the complexity of the case;
  • the number of issues pre-trial that are dealt with by motions or appeals of motions;
  • the conduct of counsel and parties during discovery; and
  • the availability of trial dates.

In the Federal Court, it is possible to obtain a trial date as little as two years after the commencement of the action. At present, the average is approximately three to four years. Courts will typically render a decision three months to one year after the trial concludes.

The process can be expedited by seeking case management at the outset of the case and requesting the earliest possible trial date.

How much should a litigant plan to pay to take a case through to a first-instance decision?

At the very least, a litigant should plan to spend C$1 million.

Appeal

Under what circumstances will the losing party in a first-instance case be granted the right to appeal? How long does an appeal typically take?

The losing party can commence an appeal as of right. An appeal can take anywhere from six months to one year to get to a hearing. A decision would typically be rendered three to six months after the appeal hearing.

Options away from court

Are there other dispute resolution options open to parties that believe their patents to be infringed outside the courts?

Yes, the typical range of alternative dispute resolution (ADR) options are available, including arbitration, negotiation and mediation. In addition to a number of private ADR services (typically retired judges or senior members of the bar), the Federal Court offers assistance with mediation and arbitration.  

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