Canada: Federal Court Awards Legal Costs Of $6.5 million In Patent Infringement

Last Updated: February 4 2016
Article by Mark Biernacki and Kevin Unrau

Recently, Justice O'Keefe of t­­he Federal Court issued his public Reasons for Judgment concerning a costs award from the liability phase of a patent infringement action between the Dow Chemical Company ("Dow") and NOVA Chemicals Corporation ("Nova"), 2016 FC 91.  Dow was awarded a lump sum payment of $6.5 million for their costs consisting of $2.9 million for legal fees and $3.6 million for disbursements.  This costs award appears to be the largest reported award that the Federal Court has ever granted in an action for patent infringement.  Nova has appealed.

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

As previously reported, during the liability phase of this proceeding 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 used in packaging applications including heavy duty bags, pallet wrapping and food packaging.  An appeal was heard in December, 2015 and a decision is currently under reserve.

Dow's costs award follows a recent trend of the Federal Court of, in appropriate cases, granting costs in excess of those that might be typically calculated under the Tariff of the Federal Courts Rules (the "Rules").  This trend supports the view that the present Tariff system may not adequately compensate successful litigants for the costs of successfully prosecuting or defending intellectual property actions in the Federal Court.  This approach would also mirror that of some provincial court systems where costs awards have better reflected the actual costs of litigation.

Principles of costs awards in the Federal Court

Pursuant to Rule 400 of the Rules, a successful litigant in the Federal Court (be it plaintiff or defendant) is typically entitled to an order for payment of its legal costs.  Such an award typically has two components: a fee component to reflect a portion of the actual counsel fees billed, and a disbursement component to reflect any reasonable and necessary disbursements incurred (e.g. fees for experts, travel expenses, court reporter fees, etc.).

The Federal Court has noted in the past that, as a general rule, a costs award represents a compromise between compensating a successful party and not unduly burdening an unsuccessful party.

The fee component of a costs award is typically calculated under a Tariff in the Rules and often represents only a modest percentage of actual fees paid to legal counsel.  The Tariff consists of 5 columns arranged in ascending order.  Each column sets out a range of costs available for certain itemized activities associated with conducting a legal proceeding.  The default award under the Rules for a successful litigant is the middle of Column III.  However, the Federal Court has full discretion over costs awards and may exercise that discretion to apply a different column, or award an amount that is not based on the Tariff.

A trend towards providing increased costs awards in the Federal Court

The Federal Court's approach to costs awards has evolved over the past several years.  A number of recent decisions reflect the view that costs awards should more closely reflect the actual costs incurred by successful litigants.  In particular, the Federal Court has noted that in the context of patent infringement actions or applications made pursuant to the Patented Medicines (Notice of Compliance) Regulations, where both parties are typically sophisticated corporations, it is more appropriate to award costs in accordance with either Column IV or V than the default Column III.

Moreover, there has also been an increasing trend for the Court in some cases to depart from the Tariff entirely, instead, awarding costs based on a percentage of the actual counsel fees billed to the successful litigant.  This evolving approach is consistent with the modern practice in some provincial Superior Courts where costs awards are determined with reference to a partial, substantial or full indemnity of the actual counsel fees incurred in the proceeding.

For example, in Philip Morris Products v Marlboro Canada, 2014 FC 2, an action for trademark infringement, the Federal Court awarded Marlboro Canada $1,069,289 in costs, including over $750,000 in fees, which represented approximately one-third of Marlboro's actual fees.  

François Guay, Steven Garland and Jean-Sébastien Dupont of Smart & Biggar acted as counsel on behalf of Marlboro Canada.

As a second example, in Harley Davidson USA LLC v Berrada, 2015 FC 189, another action for trademark infringement, the Federal Court awarded Harley Davidson over $400,000 in fees, which again represented roughly one-third of its total counsel fees.  This award was over three times greater than the award that would have been available had the Federal Court applied the default Column III of the Tariff.  

Mark Evans and François Guay of Smart & Biggar acted as counsel on behalf of Harley Davidson.

As a third example, in Air Canada v Toronto Port Authority, 2010 FC 1335, an application for judicial review of decisions relating to the allocation of take-off and landing slots at Toronto's Billy Bishop Airport, the Toronto Port Authority and Porter Airlines were awarded about $700,000 and $830,000 in fees, respectively, with both awards being equivalent to about 50% of the actual fees incurred.

As a final example, in Eli Lilly v Apotex, 2011 FC 1143, a patent infringement action relating to the drug cefaclor, Eli Lilly was awarded counsel fees of $675,000 for the pre-trial period up to when a settlement offer was made, which represented about 25% of the estimated actual costs paid during that period with respect to the main action.

The decision in Dow v Nova

In making the costs award in Dow v Nova, Justice O'Keefe noted the trend in the Federal Court of awarding higher costs for fees than those typically available under the Tariff.  In particular, Justice O'Keefe noted that if the costs award was assessed under Column V of the Tariff (still higher than the default Column III) then Dow would only have recovered 11% of its $9.6 million in actual counsel fees. Instead, Justice O'Keefe awarded $2.9 million in costs for counsel fees, which represented about 30% of the actual fees incurred.  In so finding, he noted that the case and technology involved were complex, there were over 180 days of testing conducted in advance of trial, the trial lasted 32 days and the closing written submissions were 700 pages in length.  Dow was also awarded $3.6 million in costs for reasonable and necessary disbursements, bringing the total costs award to $6.5 million.

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

The preceding is intended as a timely update on Canadian intellectual property and technology law. The content is informational only and does not constitute legal or professional advice. To obtain such advice, please communicate with our offices directly.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Mark Biernacki
Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions