It is said that the wheels of justice turn slowly, but grind
exceedingly fine. That phrase could certainly apply to
Merck's recent win over Apotex in a damages trial for patent
infringement in Canada, in a case that started in 1997.
The liability decision finding Apotex guilty of infringement was
released in December 2010. To view the Lexpert write-up of
the liability decision click
here. It took another two years before we arrived at the
damages trial. It commenced on April 8, 2013 in
Toronto. On July 16, 2013, the public damages judgment was
released. Merck was awarded damages and interest totalling
more than $180 million. To view the Lexology write-up of the
damages decision click
In Canadian patent litigation, bifurcation of liability and
damages is common. It can take a long time to get to
trial. It can take even longer before damages are
tried. People move on. Documents and processes are
forgotten. A plaintiff claiming damages based on lost profits
must establish what they would have been. That involves proof
of lost sales, revenues and costs, as well as the intention,
resources and capacity to make them.
Here are four tips meant for plaintiff's counsel (whether
outside or in-house) in developing their patent damages cases,
which stem from our experience in this case.
Identify damages documents at the
outset: In patent infringement cases, the parties
(and the Court) tend to focus on infringement and validity.
The general view is that resources spent on developing the damages
case are wasted if the patent is not infringed or valid.
Resist the temptation to leave damages documents for another
day. Gathering them early will help ensure a well-supported
and speedy damages trial.
Work with accounting experts early:
Litigators can benefit tremendously from enlisting the support of
accounting experts early in the case. With counsel's
guidance, they can help identify key documents and deficiencies
that may become problematic issues. Also, they can be a
useful resource in planning an effective damages discovery and in
avoiding going off on a frolic.
Establish a relationship with your fact
witnesses: Damages documents need to be proved
through fact witnesses. Identify personnel familiar with the
physical and financial supply chain at the outset of the
case. Get them involved in the litigation. They will
prove to be invaluable in gathering relevant documents, assisting
your experts, and representing the organization.
Streamline where possible: No one
appreciates time wasted on unimportant technical or procedural
side-issues. By the time trial commences, the parties will
know which financial records are important, and where the shoe
pinches. Consider an agreement dispensing with the need for
formal proof of key financial records. Where there are other
ways to gain efficiencies, get the Court involved.
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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