The year 2023 witnessed several developments in Canadian IP litigation. From summary judgment finding its limits to the denial of a permanent injunction for the first time in almost three decades, several cases decided in 2023 contributed to shaping the landscape of IP litigation in Canada. Below are highlights of some of the most interesting and important developments.
1. Summary judgment and summary trial find their limits
The last few years have seen a surge in IP matters decided by summary judgment and summary trial. Following the Supreme Court of Canada’s decision in Hryniak (2014 SCC 7) and years of efforts by the Federal Court to make summary adjudication more available, summary judgment and summary trial have now become useful tools to achieve faster and more cost-effective outcomes in appropriate cases. That said, they are not a panacea for all IP disputes. The Federal Court of Appeal’s decision in Gemak (2022 FCA 141) in the fall of 2022 highlighted some of the limits of summary adjudication in IP disputes. For example, the court noted that a procedure without live evidence may not be appropriate if the judge is faced with conflicting evidence and has to assess credibility.
In 2023, motions for summary judgments and trials encountered mixed results, with some cases deemed more suited for normal trials:
- In Meridian Manufacturing Inc v Concept Industries Ltd (2023 FC 20), summary judgment was denied. The Federal Court found that the issues of patent infringement and validity raised on the motion were more appropriate for a normal trial than a motion for summary judgment.
- In The Noco Company v Guangzhou Unique Electronics Co Ltd (2023 FC 208), the Federal Court denied a motion for summary trial seeking a declaration of non-infringement. The court found that the case would be better served by case management followed by a normal trial as there was a need for discovery, and in view of the number and complexity of the issues raised. The court noted that the defendant’s approach of presenting “multiple non-infringement arguments, and a range of possible non-infringement declarations” was “inconsistent with the values underlying summary adjudication.”
On the other hand, summary proceedings continued to prove useful in more suitable cases:
- In Dermaspark Products Inc v Patel (2023 FC 388), the Federal Court found that summary trial was appropriate to adjudicate a trademark and copyright dispute, and summarily decided the matter on the merits.
- Techno-Pieux Inc v Techno Piles Inc (2023 FC 581), another trademark and copyright case, was also decided by summary trial. Although Chief Justice Crampton had previously dismissed both parties’ motions for summary judgment, he decided the matter in a summary trial, which both parties had agreed was an appropriate procedure.
2. Denial of a permanent injunction
Granting a permanent injunction to successful patentees has been almost universal in Canadian patent litigation. An Injunction is granted as a matter of course upon a finding of infringement unless there is an equitable reason to the contrary. When 2023 began, it had been 30 years since an injunction was denied to a successful patentee (see Unilever (1993), 47 CPR (3d) 479).
However, in 2023, the Federal Court denied a permanent injunction to a successful patentee. In AbbVie Corporation v JAMP Pharma Corporation (2023 FC 1520), Justice McVeigh was concerned that, in the unique circumstances of the case, granting an injunction that would force the defendant to withdraw its pharmaceutical product from the market would adversely affect patients, and therefore would not be in the public interest. As a result, she denied an injunction to the successful patentee. This decision comes on the heels of a 2022 decision in Rovi Guides v Bell (2022 FC 1388), in which the Federal Court would have denied a permanent injunction on equitable grounds, had it found that the defendant infringed.
3. Patent lawsuit brought against customers; manufacturer allowed to intervene
In a peculiar case, Seismotech IP Holdings Inc v John Does (2023 FC 1335), a patent owner tried to sue the end users of an allegedly infringing commercial product (intelligent thermostats) instead of suing the manufacturer. The manufacturer sought to be added as a defendant, but Seismotech resisted, desiring to proceed against the consumers only. The Federal Court granted the manufacturer's intervention request, noting that the manufacturer should be permitted to participate in a lawsuit that engaged its legal interests. In a related decision (Seismotech IP Holdings Inc v Apple Canada Inc, 2023 FC 1649), the Federal Court denied Seismotech’s motion to require Apple Inc to identify customers who had downloaded apps from the App Store for controlling the impugned thermostats. The Court found that the requested order would not be in the public interest, noting that ordinary consumers would not be equipped to defend against a patent infringement action.
4. Inducing infringement test clarified
“Inducing infringement” arises where a defendant does not directly infringe a patent claim but influences someone else (e.g. a customer) to do so. Inducement has a three-part test:
- There must be an act of infringement by the direct infringer;
- The act must be influenced by the seller to the point where, without this influence, infringement by the buyer would not otherwise take place; and
- The influence must be knowingly exercised by the seller, i.e. the seller knows that this influence will result in the completion of the act of infringement.
In a 2020 decision (Janssen Inc v Teva Canada Ltd, 2020 FC 593), the Federal Court held that Teva would not be liable for inducing infringement of a claim to a dosage regimen by recommending an infringing dosing regimen in its product monograph. The court found that physicians wouldn’t necessarily prescribe dosing regimens based on the product monograph, but instead would determine dosages individually for each patient. Therefore, the court was “not satisfied that the Teva PM influences physicians to prescribe the claimed maintenance doses to the point that, absent the dosing information in the Teva PM, direct infringement would not occur.” In so finding, the Federal Court expressed the view that the law had become “more stringent” in requiring the plaintiff to establish “but for” causation under the second branch of the inducement test following the FCA decision in Corlac (2011 FCA 228).
This holding was reversed by the FCA in Teva Canada Limited v Janssen Inc (2023 FCA 68). The FCA found that the Federal Court had applied too onerous a standard for the second step of the inducement test, and that the Corlac decision had not in fact made the test more stringent. Consistent with other cases, the FCA held that a recommendation to infringe in a product monograph is generally sufficient to establish inducement.
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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.