In the latest matter concerning Adeia Guides Inc’s (“Adeia”, formerly “Rovi Guides Inc”) patent enforcement campaign against Canadian cable service providers,1 the Federal Court held, for the first time, a party liable for patent infringement under the doctrine of common design. The Court’s reasons also offer important guidance to IP litigants who seek damages in the form of lost licensing revenue.
Background
In the present matter, Adeia sued Videotron alleging, among other things, that its “Helix TV” internet protocol television (“IPTV”) and “VRAI” over-the-top (“OTT”) cable services infringed four patents within Adeia’s patent portfolio related to interactive program guide (“IPG”) and “resume viewing” technologies. Adeia had previously licensed its portfolio to Videotron to address these technologies, but this licensing arrangement concluded in 2017. Videotron then partnered with Comcast to deploy its XFINITY IPTV services under the Helix TV brand, while its VRAI OTT service was subcontracted out to the third-party service provider, Brightcove. Adeia alleged that Videotron’s implementation of Comcast’s IPTV technology and Brightcove’s OTT services infringed certain claims of Canadian Patent Nos. 2,967,187 (the “187 patent”), 2,775,674 (the “674 patent”), 2,553,922 (the “922 patent”), and 2,635,571 (the “571 patent”).
The Court ruled that only the 187 and 674 patents were infringed, while the 922 and 571 patents were invalidated on anticipation and obviousness grounds.
To determine Videotron’s liability for infringement of the 187 and 674 patents, the Court considered the state of the law on infringement through common design. The Court also clarified how to apportion damages in cases where the patentee relies on a handful of patents to claim lost licensing income for an entire patent portfolio.
The doctrine of common design in IP litigation
Canadian courts had previously recognized infringement through common design as a legitimate concept in Canadian patent law. The concept is rooted in the basic principles of torts, whereby a party can be jointly liable with a principal tortfeasor if i) that party acted in a way which furthered the commission of the tort and ii) that party did so in pursuance of a common design to commit the tort. In the patent context, there must be proof that two or more parties are engaged in a concerted action to commit the alleged infringing act.2
In this decision, the Court found that Videotron was liable for infringement and could not escape liability by subcontracting out the infringing acts to Comcast. It was clear on the facts that Videotron partnered with Comcast to design and deliver services to answer Videotron’s specific needs to fill the void left behind when Videotron severed its business ties with Adeia. Both had an active role in supplying the infringing system to Videotron’s customers. The Court held Videotron liable for infringement, notwithstanding that Comcast was not a named party to this action.
The Court held that there was no infringement by common design with respect to the VRAI OTT service, on the basis that there was insufficient evidence of the relationship between Videotron and Brightcove to establish that Videotron had participated in its design.
Remedies
Having ruled that Videotron was liable for infringing the 187 and 674 patents, Adeia sought damages in the form of lost licensing income. It argued that, in a “but for” world, Videotron would have renewed its license to Adeia’s full patent portfolio, comprising over 200 patents. Videotron contended that this would effectively make the four asserted patents a proxy for the entire patent portfolio, meaning that Adeia would be compensated for patents that were not infringed, expired, or invalidated, both in the present matter and in previous lawsuits. The Court agreed with Videotron, holding that damages in the form of lost licensing income must be based on common sense and be causally attributable to the actual infringement that occurred. Accordingly, the Court adopted a calculation that apportioned the value of the infringed patents and the period in which they were valid over the course of the lawsuit. The parties were then ordered to go back and calculate this amount.
Takeaways
The Court’s decision will likely influence IP litigation strategy in two key aspects:
- Common design: In view of the Court’s reasons, when patentees commence litigation against potential infringers because they adopted third-party technology, that third party need not be named as a defendant to the proceeding. In this case, Comcast was not named as a defendant, yet the Court still found on the facts that Videotron partnered with Comcast and implemented its infringing technology entirely to fill the void left after it severed ties with Adeia. This was enough for the Court to find Videotron liable despite the fact that the infringing technology was developed by Comcast, although designed to meet Videotron’s specific needs.
- Lost licensing: Following the Court’s reasons, patentees whose primary business model is patent portfolio licensing are unlikely to be successful in claiming damages for the entire portfolio when only a small subset is infringed. Patentees are therefore advised to consider the value of each patent they assert individually as part of their enforcement strategy, even if they are typically licensed as a part of a broader patent portfolio.
This decision is currently being appealed to the Federal Court of Appeal.
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The preceding is intended as a timely update on Canadian intellectual property and technology law. The content is informational only and does not constitute legal or professional advice. To obtain such advice, please communicate with our offices directly.
Références
1. Adeia Guides Inc v Videotron Ltd, 2025 FC 1725.
2. Bauer Hockey Corp v Easton Sports Canada Inc, 2010 FC 361 at para 206; Genentech Inc v Celltrion Healthcare, 2019 FC 293 at para 41; Molo Design, Ltd v Chanel Canada ULC, 2024 FC 1260 at para 157.