IP litigation in Canada: 10 reasons to litigate north of the border

IPT News Q2 2017

Intellectual Property and Technology News

Af:

Although Canada is globally recognized for maple syrup, hockey and universal healthcare, it is also a standard bearer in the area of IP litigation. Businesses should consider litigating in Canada as part of their global intellectual property strategy for these ten reasons:

  1. Federal Court: Nearly all IP litigation in Canada takes place in the Federal Court, which has broad jurisdiction over all intellectual property matters. With its near-exclusive jurisdiction, the Federal Court boasts a judiciary highly experienced in the area of IP litigation. Upon request, the Federal Court also offers case management, whereby a judicial officer is appointed to oversee the efficient progression of the proceeding. 
  2. No juries: The Federal Court does not allow for jury trials. Instead, the trial judge acts as judge and juror. Because the judiciary is experienced in IP matters, this results in efficient, principled and more predictable, fully reasoned decisions.
  3. Limited deposition practice: The discovery process (as it is known in Canada) is much less extensive than the deposition process in the US. In Canada, documents are exchanged and a single representative from each party is subject to an examination for discovery. In the patent context, inventors may also be examined; however, there is no limitless deposition of all relevant individuals. The result is a process that is much less time-consuming and expensive than its US counterpart. 
  4. Early trial date: The Federal Court will fast-track a proceeding if requested, including full IP proceedings. The goal for a fast-tracked proceeding is to hold a trial within two years from its commencement.
  5. No treble damages: There is no statutory provision for treble damages in Canada. While a damages award may exceed compensatory damages, this remedy is rare and requires high-handed or oppressive conduct on the part of the infringer. While this may not be favorable for the patent owner, it may be a consideration for a party seeking to impeach a patent and thus expecting an infringement counterclaim.
  6. Fee shifting for the successful party: The general rule in Canada is that the successful party is entitled to a portion of its legal costs. Successful litigants can expect to recover around a quarter of their legal fees and most of their reasonable disbursements. Increased costs may also be awarded if a settlement offer is made (and refused) that is better than the result at trial.
  7. No file wrapper estoppel: There is no doctrine of file wrapper estoppel in Canada. For the purposes of claim construction, what an applicant represents to the patent office during prosecution is irrelevant. However, the contents of the prosecution history may nonetheless be admissible for other reasons.
  8. No Markman hearings: In Canada, claim construction of a patent occurs at trial with the benefit of expert evidence on the skilled person’s construction in light of their common general knowledge. Unlike most cases in the US, claim construction is decided at the same time as validity and infringement.
  9. Experts: There are no pre-trial examinations of expert witnesses. The only examinations of experts occur at trial before the trial judge. Detailed expert reports are exchanged before trial which are later entered as evidence at trial.
  10. Expenses: Last, but certainly not least, IP litigation in Canada is much cheaper compared to the United States. Beyond the low Canadian dollar, procedural factors such as limited discovery and lack of pre-trial expert examinations reduce the time expended by attorneys and experts. Attorney fees are generally less than those in the US.

IP disputes often occur on a global level and involve parallel litigation in many jurisdictions. IP litigation in Canada is cost-effective and should be considered as a jurisdiction of first instance for global disputes. An earlier, less expensive resolution in Canada can drive worldwide settlement negotiations and guide litigation strategies in other jurisdictions where the cost of litigation is much higher.