The Lexpert Guides to the Leading US/Canada Cross-Border Corporate and Litigation Lawyers in Canada profiles leading business lawyers and features articles for attorneys and in-house counsel in the US about business law issues in Canada.
Issue link: https://digital.carswellmedia.com/i/991061
www.lexpert.ca/usguide | LEXPERT • June 2018 | 49 #4 – No inter partes reviews (IPRs) Since 2012, it has become very common for a defendant in a patent infringement lawsuit in the United States to initiate an inter partes review (IPR) before the Patent Trial and Appeal Board (PTAB) to chal- lenge the validity of the patent at issue, which is a cause of concerns for many patent owners contemplat- ing litigation for many reasons. The burden on the petitioner to invali- date a patent is lower in the PTAB compared to the district courts as there is no presumption of validity and the claims of the patent are to be interpreted in the broadest reason- able sense without any consideration of infringement issues. In addition, district courts will oftentimes, but not always, stay the court proceed- ings pending resolution of the IPR, which takes between 12 and 18 months, resulting in increased costs, delays and uncertainties. The Canadian Patent Act does provide for re-examination proceed- ings before the Patent Office, but the scope of the procedure is very nar- row compared to IPRs and is there- fore very seldom used in practice, especially not in the context of litiga- tion. The most important difference is that re-examination in Canada is not inter partes; the requesting party is not involved in any way in the proceedings beyond filing the initial request for re-examination. It cannot respond to the arguments and/or amended claims submitted by the patentee and cannot appeal from the decision of the Re-exam- ination Board. A re-examination is also limited to a consideration of prior art; the Re-examination Board cannot rely on any factual or expert evidence and will not consider invalidity attacks other than those based on prior art (i.e., anticipation and obviousness). Lastly, a defendant in a pending patent infringement case cannot request re-examination in an attempt to delay the court proceedings. To the contrary, the Federal Court can order a stay of the re-examination proceedings pending determination of the broader valid- ity issues that are before the Court based on a full consideration of the factual and expert evidence. #5 - Canadian courts tend to be patent friendly Statistically speaking, the Federal Court tends to be patentee friendly, especially with regard to maintaining validity of patents. A 2009 study pre- sented by Smart & Biggar Montréal partner François Guay to the Intel- lectual Property Institute of Canada showed that patentees in Canada were successful in maintaining the validity of their non-pharma patents in ap- proximately 65% of cases (compared to 52% in the United States and 42% in the United Kingdom). An analysis of the decisions reported since 2010 shows a slight decline in the validity success rate in Canada down to ap- proximately 60% (the overall success rate for validity and infringement combined being approximately 50%) but it is expected that this rate could go up in the next few years follow- ing the 2017 decision of the Supreme Court that struck down the so-called "promise of the patent" doctrine. This judge-made doctrine held paten- tees to a higher standard of utility, and was used to successfully attack several patents (especially pharmaceutical patents) in the last 10 years. All these differences, and others, can explain why patent litigation is usually less expensive in Canada than it can be in the United States and can be as fast if not faster, especially now that the Federal Court is prepared to hear patent cases within two years without any of the delays caused by IPR-type proceedings. While damages awards have tradi- tionally been lower in Canada (most- ly because the extent of infringement is more limited in a smaller market), we have seen very substantial awards from Canadian courts in the recent years. One major advantage of pat- ent litigation in Canada is that the successful patentee can elect, in most cases, between a recovery of its damages (either by way of a reason- able royalty or lost profits damages or a combination of both) or an ac- counting of the infringer's unlawful profits. The latter option presents a number of tactical and procedural advantages, and can be very appeal- ing in situations where the infringer has been very successful and/or is selling Canadian made infringing product in jurisdictions in addition to Canada. In summary, patent litigation in Canada can be affordable, fast and patentee-friendly. Patent owners ought to consider this option, espe- cially in situations where the infring- ing products are manufactured in Canada to be sold in the US (e.g., in the automotive industry). Even if not manufactured in Canada, our experi- ence over the years has been that in situations where the same infringing goods are sold in Canada and in the United States, resolving the matter in Canada, either by way of a settlement or favorable judgment, can oftentimes assist in solving the situation in the United States as businesses will not necessarily design different products for these two closely related markets. Steven Garland Partner, Ottawa (613) 232.2486 sbgarland@smart-biggar.ca Jean-Sébastien Dupont Partner, Montreal (514) 954-1500 jsdupont@smart-biggar.ca