Dino Clarizio and Ashley Lam
Patent litigation proceedings in Canada may be brought in either the Federal Court or the provincial superior courts. However, the Federal Court is by far the most preferred due to it having: national jurisdiction; exclusive jurisdiction to impeach, vary, or expunge patents; and extensive experience hearing patent cases. The Federal Court also has comprehensive case management, assigning a case management judge to each case to promote efficiency. Part of the role of the case management judge entails scheduling, which typically occurs at the commencement of proceedings. Patent proceedings typically involve: the exchange of pleadings; documentary and examinations for discovery; the exchange of expert reports; trial; and potentially appeal. Each of these steps will be summarized below.
Pleadings: A patent infringement or impeachment proceeding is brought by way of an action, which begins with the filing and exchange of pleadings. Generally, an action is commenced when a Statement of Claim is filed and issued by the plaintiff(s). The patentee must be made a party to all actions involving a patent. Once served with a Claim, the defendant(s) must then serve and file a Statement of Defence within a specified time if they wish to defend the action. The defendant(s) may also include a Counterclaim for any claims it may have against the plaintiff(s) and/or a Third Party Claim if they have a claim against a third party. The plaintiff(s) may then serve and file a Reply to the Statement of Defence and a Defence to the Counterclaim if there is one.
The pleadings must include all material facts that support the claims and other allegations made in the pleadings. For example, a party alleging invalidity of a patent must include in its pleading a list of the prior art it alleges is relevant to the invalidity allegations.
Discovery: Once pleadings close, the next phase is discovery. Documentary discovery is the first to occur, and this is where all parties are obliged to disclose in an Affidavit of Documents and then exchange copies of all documents relevant to an unadmitted allegation in the pleadings. For example, patentees will list all documents in their possession relevant to the making of the patented invention, and defendants will have to list all documents relevant to the impugned products and/or services that are alleged to infringe the patent. The existence of privileged documents must also be listed in the Affidavit of Documents, but disclosure of these documents need not be made unless the opposing party brings a successful motion for the disclosure of such privileged documents.
Documentary discovery is followed by oral/written examinations for discovery. This phase generally comprises the opportunity for each party in the action to examine either orally, in writing or a combination of the two, all opposing parties. Answers provided during examinations for discovery will bind the party giving the answer and are admissible as evidence at trial. If a party is a corporation, a representative is selected to provide answers based on the knowledge of the corporation and that will bind the corporation. Named inventors on the patent in suit may also be examined, but their answers are non-binding on the parties. Likewise, non-parties may also be examined but this is uncommon because leave of the Court is required to do so.
Expert reports: Expert evidence is an important aspect of patent proceedings. Before a party can call an expert at trial, the party must serve a copy of the expert’s report on all other parties prior to trial. Expert reports must set out the proposed evidence and opinions that the expert will give at trial. It is essential that the expert provide unbiased opinions. Generally, topics covered by experts in patent cases include: the common general knowledge of the skilled person at the relevant date of the patent; interpretation and construction of the patent and its claims; review of the prior art; review of the impugned product or service and whether it infringes any claims; and assessment of damages/profits.
Of note, expert witnesses are not subject to pre-trial discovery and may only be cross-examined when they are called to testify at trial. However, a party is not obligated to call at trial all experts for whom the party delivered a report, and any expert reports becomes evidence at trial only if the expert is called to testify.
Other pre-trial matters: Confidentiality and protective orders are common in patent litigation. In Canada, information exchanged during discovery is subject to an implied undertaking that it will not be used or disclosed outside of the current litigation. However, formal orders can be obtained to protect each party’s confidential information.
Interlocutory injunctions to compel or prevent a party from performing certain acts pending the final determination of the action may also be obtained upon a successful motion or application. However, the test for obtaining an injunction prior to trial in a patent case has proven to be very difficult to meet in Canada, thus most patentees do not seek this relief. Rather, if a patentee believes it is suffering significant harm because of a defendant’s infringing activities, it may ask for aggressive case management with tight deadlines that lead to an early trial.
Common motions brought prior to trial also include motions for a bifurcation order, motions for particulars of pleadings, and motions to strike parts or all of a pleading. A motion for bifurcation allows issues to be split into multiple stages (such as determining liability issues first and then remedies, if necessary) and is commonly allowed upon consent from both parties. A party may move for particulars where a pleading is deficient, or move to strike a pleading if it discloses no reasonable cause of action, or is frivolous, vexatious, or an abuse of process.
Other possible motions include: motions to compel parties to answer questions asked at examinations for discovery; motions to examine third parties; and motions to produce samples of allegedly infringing products.
Trial: In the Federal Court, trials are heard by a single judge (there are no juries) and the typical duration of a patent trial is 10 to 20 days. The Federal Court strives to schedule trials within three years of the issuance of the Statement of Claim, but a trial may be scheduled sooner if the plaintiff(s) convince the court there is urgency. In proceedings relating to the Patented Medicines (Notice of Compliance) Regulations, a trial will be scheduled within 21 months since the Regulations require that a decision be rendered within 24 months.
Trial begins with opening statements, where parties outline their arguments and provide an overview of their evidence. This is followed by examinations-in-chief and cross-examinations of both fact and expert witnesses, where evidence is given by witness testimony. Sometimes, uncontested evidence will be admitted by affidavits. Other forms of evidence include read-ins from examinations for discovery, documents marked as exhibits and agreed statements of fact. After the close of evidence, parties will exchange written closing submissions and then make closing arguments orally.
Appeal: Parties will be informed of the decision and remedies granted upon the pronouncement of a judgement. A “losing” party may appeal the judgment if they are not satisfied with it by issuing a Notice of Appeal setting out the relief sought (generally, overturning the judgment) and the grounds for the relief. A respondent who wants to take part in the appeal must file and serve a Notice of Appearance and/or a Notice of Cross-Appeal.
The appeal is generally heard by a panel of three judges and the panel has the power to overturn a trial judgement, order a new trial, refer the matter back to the trial court for the continuation or redetermination of the trial, dismiss the appeal, or stop the proceedings altogether.
There is an opportunity to further appeal to the Supreme Court of Canada, but this may only be done with leave of that Court. On average, leave for appeal to the Supreme Court is only granted in less than 10% of leave applications filed and is rare for intellectual property cases.
The procedure for bringing a patent litigation proceeding in the Federal Court is structured and consistent. However, the nuances of each step of the process yield a wide ambit of potential outcomes to the litigation. At Ridout & Maybee, our team of experienced litigators can help you navigate this process.