In 2025, Canadian courts addressed a range of issues in intellectual property litigation. Highlights included the imposition of jail time on contumacious copyright pirates, appellate guidance on patent claim construction, and a near complete shift to lump-sum costs awards in patent cases.
Table of contents
- Federal Court issues incarceration order against Defendants in case
- New Decisions on patent claim construction and essential elements
- Costs awards: percentage-based awards reign but the tariff strikes back
- Alberta Court of Appeal restores six-year limitation period for patent infringement
- Federal Court passing off action dismissed for failing to meet “threshold requirement”
- Copyright infringement action dismissed by the Federal Court for lack of standing
1. Federal Court issues incarceration order against Defendants in copyright infringement case
In Bell Media Inc v Macciacchera (2025 FC 1378), the Federal Court issued an order to incarcerate copyright pirates who defied a court order.
In the underlying action, the Plaintiffs claimed that the Defendants were key individuals behind the operation of an IPTV Service that provided unauthorized access to pirated movies, TV broadcasts and other content.
The Plaintiffs successfully obtained an “Anton Piller Order,” allowing for the search, seizure and preservation of evidence relating to the Defendants' activities. It also required the Defendants to disclose certain information regarding the IPTV Service and their financial and other assets. The Defendants refused to comply with several provisions of the Order and were found to be in contempt of court.
In sentencing the Defendants, the Court considered various factors such as the gravity of their conduct, the need for general and specific deterrence, the extent to which they profited from the contempt, and their continuing defiance of the Order. The Court sentenced one Defendant to 6 months imprisonment for past contempt, and imposed a sentence of the lesser of 5 years less one day or until the contempt is cured for ongoing contempt. The other Defendant was sentenced to 4 months imprisonment for past contempt, and the lesser of 5 years less one day or until the contempt is cured for ongoing contempt.
2. New Decisions on patent claim construction and essential elements
AGI Suretrack v Farmers Edge: is there a “presumption” that every claim element is essential? There is no “presumption” that every claim element is essential; however, the party asserting non-essentiality bears the onus to prove it. This was the guidance provided by the Federal Court of Appeal (FCA) in AGI Suretrack LLC v Farmer’s Edge Inc (2025 FCA 134), on appeal of a Federal Court decision finding that AGI’s patent was both invalid and not infringed (2024 FC 934).
It is well established that construing (interpreting) a patent claim requires distinguishing “essential” from “non-essential” elements. To infringe a patent claim, a defendant’s product must include all essential elements of the patent claim. However, non-essential elements may be omitted or substituted. AGI argued that the Federal Court had erred in determining that two claim elements were essential, resulting in the finding of non-infringement.
The FCA upheld the trial judge’s conclusion that those two claim elements were essential, although disagreed with the trial judge’s reliance on a “presumption” of essentiality. According to this latest FCA guidance, there is no “presumption” one way or another. However, the onus is on the party asserting an element is non-essential to prove it, and AGI had failed to do so.
McCain Foods v Simplot: a practical application of purposive construction. Another 2025 decision in which claim construction played a prominent role was McCain Foods Limited v J.R. Simplot Company (2025 FC 1078). In this case, the Federal Court found that the Defendant’s use of pulsed electric fields (PEF) to pretreat potatoes before further processing into French fries did not infringe the Plaintiff’s ‘841 Patent. The issue of infringement turned substantially on the construction of the term “high electric field.” The Federal Court construed the term purposively and concluded that it did not encompass PEF.
In arriving at this construction, the Federal Court found that the skilled person reading claim 1 would have understood that (i) the term “high electric field” is not a term of art, but rather a relative term used in various contexts to mean various things, and (ii) the prior art invariably used the term “pulses” when referring to PEF treatments, but no such references are found in the description of “high electric fields” in the ‘841 Patent. Further, a skilled person reading the patent would see no indication that the inventors were teaching or claiming PEF, which involved electric fields 10-100X stronger than those discussed in the ‘841 Patent, and short pulses up to 1 million times shorter than the shortest application period referred to in the patent. The Court also found that if “high electric field” were interpreted so broadly as to cover PEF, then the claims in question would be invalid for claiming more than what was invented or soundly predicted.
Read our article Crisp boundaries: Federal Court defines the scope of protection for French fry manufacturing process patent, discussing this case.
3. Costs awards: percentage-based awards reign but the tariff strikes back
Shift toward percentage-based costs. In recent years, the Federal Court has increasingly recognized that costs awards based on the default tariff rates (in Tariff B of the Federal Courts Rules) often under-compensate the successful party in complex IP cases. Instead, “lump-sum” awards based on a percentage of the successful party’s actual legal fees have become common. These awards typically range from 25% to 50% of reasonable legal fees. When combined with full reimbursement of reasonable disbursements, these percentage-based awards can often reach $1.5 to $3 million (and sometimes more) in patent cases. As of 2025, percentage-based costs have been awarded in at least the last 10 patent infringement trials in the Federal Court.
While the FCA has affirmed percentage-based costs awards made by the Federal Court, the FCA does not necessarily follow the same practice when awarding costs for an appeal. In AGI Suretrack v Farmers Edge (2025 FCA 214), the FCA declined to “migrate the practice of awarding costs based on a percentage of actual legal fees from trials to appeals.”
For more on this topic, see our article: Costs awards in Canadian IP proceedings – update and future directions.
Tariff reform. In an effort to modernize the tariff system, Tariff B of the Federal Courts Rules is being amended. The updated tariff, which came into force on December 21, 2025, is estimated to increase the amounts recoverable under the tariff by roughly 25% by accounting for more litigation steps and allowing more units for each step. Although the reform is intended to align the tariff more closely with lump-sum awards, it remains to be seen if and how this will impact the court’s approach to lump-sum awards in complex IP disputes, which typically exceed the tariff by much more than 25%.
4. Alberta Court of Appeal restores six-year limitation period for patent infringement
The Court of Appeal of Alberta (ABCA) recently clarified the limitation period applicable to patent infringement actions filed in Alberta. In JL Energy Transportation Inc v Alliance Pipeline Limited Partnership (2025 ABCA 26), the ABCA examined whether a claim for patent infringement filed in the Court of King’s Bench in Alberta was subject to the two-year limitation period in the provincial Limitations Act or the six-year limitation period in section 55.01 of the Patent Act.
The ABCA had previously held in 2022 that the provincial limitation regime applied to claims of patent infringement. This ruling was followed by the judge of the Court of King’s Bench in dismissing the appellant’s claim, as the judge concluded that the appellant had sufficient knowledge of its claim more than two years before the issuance of its statement of claim.
A five-judge panel of the ABCA reversed the trial judge’s decision and held that the appellant’s claim for patent infringement was covered by s. 55.01 of the Patent Act. The Alberta Limitations Act was not intended to apply to rights created under federal legislation, which are subject to specific federal limitation periods, such as section 55.01 of the Patent Act. In addition, since patent infringement claims can be brought either in the Federal Court or the provincial courts, an interpretation that would apply different limitation periods depending on where the action was started would be both undesirable and contrary to legislative intent.
5. Federal Court passing off action dismissed for failing to meet “threshold requirement”
In 2K4 Inc (Indican Pictures) v Indiecan Entertainment Inc (2025 FC 20), the Federal Court dismissed an action for passing off under section 7(b) of the Trademarks Act, finding that the applicant failed to meet the “threshold requirement” of demonstrating a valid and enforceable trademark at the time the alleged passing off commenced.
Section 7(b) of the Trademarks Act codifies the common law tort of passing off. It prohibits a person from “direct[ing] public attention to his goods, services or business in such a way as to cause or be likely to cause confusion … between his goods, services or business and [those] of another.” The statutory codification enables the Federal Court to adjudicate passing off claims even though it has no jurisdiction over the common law tort (which can only be brought in a Provincial Superior Court).
However, in a statutory passing off claim under section 7(b), it may not be enough to establish that there was passing off. Due to constitutional constraints on federal jurisdiction, courts have imposed a “threshold requirement” that a plaintiff must meet before section 7(b) can be relied on: the plaintiff must prove possession of a “valid and enforceable trademark,” whether registered or unregistered, at the time the defendant first began directing public attention to its own goods and services.
In the case of 2K4 Inc, the Federal Court applied the definitions of “trademark” and “use” in sections 2 and 4 of the Trademarks Act, and found that the Applicant did not meet the threshold requirement. Although the court in this case found that the passing off claim would also have been unsuccessful on other grounds, the decision serves as a reminder to parties considering a passing off action to account for the additional “threshold requirement” that will be applied under section 7(b) that does not apply to the common law tort.
6. Copyright infringement action dismissed by the Federal Court for lack of standing
Establishing standing is a crucial but sometimes complex requirement in copyright cases.
The Plaintiff in an action for copyright infringement must establish standing, either by demonstrating that it is the owner of the copyright or that it derives “rights, title or interest by assignment or grant in writing by the owner”, pursuant to section 41.23 of the Copyright Act.
In McQuaig v Enbridge Gas Inc (2025 FC 1439), the Federal Court struck out the plaintiff’s statement of claim and dismissed his action for copyright infringement in a computer software program due to lack of standing. The Court found that even if the facts alleged in the statement of claim were true, they could not result in the plaintiff being the owner of the copyright in the software, as he had either assigned his rights to his company or to his employer, pursuant to section 13(3) of the Copyright Act.
This follows several other cases in recent years where copyright claims have failed because the plaintiff did not prove subsistence or ownership of the asserted copyright (see e.g. August Image LLC v Airg Inc, 2022 FC 470).
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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.