Whether this is your first time enforcing your Canadian patent,
or you're a frequent flyer in the Canadian courts, it is
important to cover your bases before firing off a claim.
Prudent planning will help to ensure that legal and financial
resources are deployed efficiently. Although not exhaustive,
here are the top 5 things to consider before issuing your statement
In what jurisdiction should the lawsuit be
pursued? The plaintiff can choose between the
Federal Court and the provincial courts. Each has unique
rules. Consider where best to commence the action. For
example, summary judgment might be easier to obtain in Ontario with
its relatively robust and modern summary judgment rules while
Canada-wide enforcement may be simpler in the Federal Court.
Should you first threaten litigation?
Infringement lawsuits rarely come out of the blue. They are
often preceded by threats (e.g., the dreaded "cease and
desist" letter). While attempting resolution without a
lawsuit is worthwhile, such threats (when not made properly) can
have unintended consequences and should be carefully considered
before being made. For example, some threats may allow the
alleged infringer to initiate the lawsuit, select the most
favourable jurisdiction and put your patent at risk.
Furthermore, sending cease and desist letters to a wide audience
can be dangerous, as it may give rise to a claim for damages.
For more information, check out this blog on 10 steps to take when
Responding to Threats of Patent Infringement.
What does a win look like? Usually, a
win is securing the market via injunction and obtaining a monetary
award. It is going to take at least two years of litigation
to achieve that and, unless you can show irreparable harm, you
won't get an interlocutory injunction. Monetary recovery
can be further delayed, as that issue is often bifurcated from the
liability issues, and liability is tried first. Plan to
manage your business in the face of ongoing infringement during the
litigation and don't bank on the eventual award. Evaluate
the likely award early, collect the documentation necessary to
prove it, and develop a comprehensive exit strategy.
Are you prepared to see the litigation
through? It has been said that patents are only as
good as your ability to enforce them. Only commence a lawsuit
if you are prepared to see it through. Have a clear picture
of what you are getting into. Patent lawsuits take time and
resources. Discovery can be distracting. Resources will
be spent on document collection, retention and disclosure.
There will be examinations for discovery. Employees will be
required to testify at trial. Expert witnesses are almost
always needed. Develop a robust litigation plan with your
lawyers. Where available, use project management tools to create a
budget and set reasonable estimates of litigation expenses.
Who are the parties to the lawsuit? There are
two sides to consider.
(a) Plaintiffs: Patentee and licensees can sue
for patent infringement in Canada. The patentee is a
necessary party. Evaluate your physical/financial supply
chain. Identify entities harmed by the infringement. Do
they have standing to sue? Take the steps necessary steps to
properly name them as plaintiffs to maximize potential
(b) Defendants: Direct and indirect infringers
(i.e., inducers) can be sued. They are usually easy to
identify. However, other parties may be drawn in; sometimes
unintentionally. For example, a third party may have
indemnified the defendant in relation to some aspect of its
infringing technology and might get named or take over the
defence. That can be concerning when the third party has a
large war chest. Worse when it is one of your own
customers! Try to deal with any such concerns in advance.
A recent Saskatchewan Court of Queen's Bench decision allowed a court-appointed receiver to sell and transfer intellectual property rights free and clear of encumbrances, finding that a license to use improvements of an invention was a contractual interest and not a property interest.
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