Canada’s Intellectual Property Firm

Dow obtains largest Canadian patent infringement award in history

Authored byDaniel Hnatchuk

The Federal Court has issued its Further Judgment and Reasons (2017 FC 637) concerning the amount of financial compensation to be paid to the Dow Chemical Company as a result of earlier patent infringement and validity proceedings against NOVA Chemicals Corporation.

The final award totals over $645 million (including prejudgment interest), which is the largest reported award in a Canadian patent infringement case.

Steven Garland, Jeremy Want, Colin Ingram and Daniel Davies of Smart & Biggar acted as co-counsel on behalf of Dow.

Earlier Decisions on Infringement and Validity

The proceedings before the Federal Court were commenced in 2010. During the liability phase, the Federal Court upheld the validity of Dow’s Canadian Patent No. 2,160,705 and found that Nova’s SURPASS polymers infringed. The polymers are polyethylene compositions used in packaging applications including heavy duty bags, pallet wrapping and food packaging. Dow sells such compositions under the name ELITE.

As a result of the findings of infringement, the Federal Court awarded Dow various remedies, including an election between damages and an accounting of profits, reasonable compensation for infringement that occurred between the publication date of the ‘705 Patent and its date of issuance, interest and costs. Dow subsequently elected for an accounting of Nova’s profits.

On September 6, 2016, the Federal Court of Appeal upheld the Federal Court decision on the merits (2016 FCA 216). On April 20, 2017, Nova’s application for leave to appeal to the Supreme Court of Canada was dismissed.

Quantification of Award

As previously reported, Justice Fothergill’s initial reference judgment of April 7, 2017 (public reasons released April 19, 2017), decided a number of issues including the profits arising from the “springboard” into the market enjoyed by Nova as a result of its infringement of the ‘705 Patent, and the appropriate date of conversion of Nova’s profits into Canadian dollars.

Based on Justice Fothergill’s initial judgment, the parties exchanged calculations of damages and profits payable by Nova to Dow and provided the Court with a list of three further issues relating to the appropriate accounting methodologies to apply to arrive at the final judgment. Subsequently, the parties made written submissions to the Court on these issues on June 7 and June 14, 2017. Dow was ultimately successful on two of the three issues.

Nova has filed an appeal of Justice Fothergill’s initial decision.

For further information, please contact a member of our firm’s Litigation group.

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