Canada: Court Awards $6.5 Million For Plaintiffs' Costs Following Successful Infringement Action (Intellectual Property Weekly Abstracts Bulletin — Week Of December 12)

PATENT DECISIONS

Court awards $6.5 million for plaintiffs' costs following successful infringement action

Dow Chemical Company v. Nova Chemicals Corporation, 2016 FC 91

The Court awarded the Plaintiffs a lump sum payment of $6.5 million for their costs in this case. The amount consisted of $2.9 million for legal fees and $3.6 million for the Plaintiffs' reasonable and necessary disbursements. In the underlying proceeding, the Plaintiffs were granted a declaration that the Defendant had infringed Canadian Patent No. 2,160,705 (2014 FC 844). There was no dispute that it was a most complex case with many complicated concepts and issues.

The Plaintiffs' submissions showed that Dow's actual total legal costs were $9.6 million. The submissions also stated that should the Plaintiffs' fees be assessed under Column V of Tariff B, their costs would only amount to $1,099,725, which was 11% of the Plaintiffs' total legal costs. The Court noted that costs pursuant to Column V of Tariff B would be totally inadequate in this case; it was not acceptable to only recoup 11% of one's costs in such a complex case.

After considering the submissions of both parties and the jurisprudence of this Court, the Court held that a lump sum award for costs was appropriate in this case. The Court found that the Plaintiffs' lump sum of $2.9 million for their costs for legal fees to be a reasonable amount. The Court was also satisfied that the disbursements were reasonable.

COPYRIGHT DECISIONS

Motion to amend Statement of Claim and motion for summary judgment allowed in part in copyright action

Davydiuk v. Internet Archive Canada and Internet Archive, 2016 FC 1313

In the within action for copyright infringement, the Plaintiff claims to be the owner of the copyright in certain cinematographic works and unfixed performances described in his original Statement of Claim. The Defendant, Internet Archive, is a California-based non-profit digital library that operates a service called the Wayback Machine, which preserves publicly available internet sites in a free, searchable archive. The Plaintiff had requested that certain webpages be removed or excluded from their archive. The Defendants advised him that the identified material had been taken down from their websites and removed from their collections. In 2011, the Plaintiff discovered that the Defendants were running a new version of one of its archiving websites with the works at issue and commenced this infringement action.

The Plaintiff brought this motion to amend his Claim to add express references to a claim for ownership of the copyright in photographs, images and audiovisual recordings created in the production of these works and performances. The Defendants brought a motion for summary judgment. The Court allowed the Plaintiff's motion as it related to the works, but not the performances, and the Defendants' motion as it related to the performances, but not the works.

On the motion to amend, the Court found that it was not plain and obvious that the proposed amendments would fail, nor would the proposed amendments cause prejudice to the Defendants that could not be compensated with costs. At the Plaintiff's request, the Defendants had deleted the webpages at issue in reliance on the pleadings as originally framed. The Defendants claimed that this had resulted in a loss of evidence relevant to its defence of the action. The Court noted that the evidence did not establish that the webpages could not be recovered. The Court was also reluctant to conclude that the Defendants could rely on the Plaintiff's request as a basis for eliminating evidence relevant to the issues in this litigation, particularly after the litigation has commenced. The Court was satisfied that the Defendants had not established prejudice resulting from the proposed amendment that should preclude the Court from granting the requested leave.

On the motion for summary judgment, the Court disagreed with the Defendants' three reasons for why there was no genuine issue for trial. First, the Court saw no basis either in law or logic to conclude that production of a copy of the original work is an absolute prerequisite to success in establishing either subsistence of copyright in the work or that a reproduction of the work represents a sufficiently substantial reproduction to constitute infringement.

The Court reached the same conclusion in respect of the Defendants' submission that without being able to show the Court an original copyrighted work, the Plaintiff could not adduce evidence necessary to conduct the comparative analysis to show that the Defendants had reproduced the works in whole or substantial part.

Third, the Court dismissed the Defendants' argument that the photographs and still images (which are the allegedly infringing reproductions) were not capable of amounting to a "substantial" reproduction of the videos for which the Plaintiff claims copyright protection. This analysis would require a qualitative assessment comparing the copyrighted work with the allegedly infringing work. Moreover, the Court noted that the analysis was highly dependent upon the facts of each individual case, which precluded a finding as a matter of law in this summary judgment motion that photographs and still images were incapable of infringing the copyright in a cinematographic work.

TRADEMARK DECISIONS

Original decision finding that the DOMAINE PINNACLE word and design mark is not confusing with the registered PINNACLES mark is restored on appeal

Domaines Pinnacle Inc. v. Constellation Brands Inc., 2016 FCA 302

The Federal Court of Appeal has restored a decision of the Register of Trademarks (2013 TMOB 153) that held that an application for a word and design mark for DOMAINE PINNACLE is unlikely to cause confusion with the registered mark PINNACLES.

Domaines Pinnacle had sought to register the word and design mark DOMAINE PINNACLE in relation with the sale of apple-based alcoholic and non-alcoholic beverages and other apple products. The Constellation respondents opposed, arguing it would be confusing with its own registered PINNACLES mark in relation with the sale of (grape) wine.

The Trademarks Opposition Board ("TMOB") held that confusion was unlikely to occur. The Federal Court, on judicial review, determined that the Board had erred in not considering the potential uses that the respondents might have made of their registered mark, as required by Masterpiece and Pizzaiolo. That Federal Court decision (2015 FC 1083) was now found to have been made on a correctness standard, which it was not entitled to do.

The Court of Appeal looked at the original TMOB decision on the reasonableness standard and held that the full scope of the rights granted for the registered PINNACLES mark would not permit them to use the distinctive graphic elements — the apple and snowflake design — that the Board identified as being central to the distinctiveness of the appellant's mark. (A distinction was also drawn between apple-based and grape-based beverages.)

The Court of Appeal noted that "Pinnacle" was a commonly used term with little distinctiveness. Therefore, the Court of Appeal held that the design context must play a greater role in distinguishing the respondents' mark from the numerous other registered marks in Canada that feature the word "Pinnacle".

As a result, the original decision of the TMOB was restored by dismissing the appeal to the Federal Court.

NOC DECISIONS

Motion to Dismiss NOC Proceeding Granted — Non-Infringement as an Abuse of Process

Valeant Canada LP v. Apotex Inc., 2016 FC 1359

Apotex's motion to dismiss Valeant's NOC Proceeding pursuant to s. 6(5)(b) of the NOC Regulations was granted with costs.

Apotex's NOA alleged non-infringement. It then advised Valeant it would be bringing the within motion. Valeant did not set a schedule in the main application, however, it engaged on the motion. Apotex filed the evidence of a law clerk, of an Apotex employee describing the contents of Apotex's ANDS for its tablets, and of an expert witness who testified as to non-infringement. Valeant filed no evidence on the motion, and did not cross-examine Apotex's witnesses. It also did not file evidence on the merits before the motion was heard.

The Court held that Apotex has provided to Valeant, each and every document requested. Furthermore, the Court held that the evidence demonstrated that Apotex's tablets do not contain the essential elements of the patent at issue. The Court also held that Valeant's allegation of non-infringement was simply a bald allegation.

The Court held that Valeant made a calculated, strategic decision not to file evidence, and must live with the consequences. In addition, as the bald statement in the application does not set out any grounds to support the infringement allegation, it is on its face, bereft of any chance of success, and should be struck. The Court held that Apotex's burden on the motion is not as high as Valeant argued, and if the application contained any information from which it could be reasonably inferred that there was some substance to the infringement allegation, the application would not be bereft of any chance of success. Valeant's right to a hearing on the merits is a qualified right. There needs to be merit to the application. Thus, the application was struck.

INDUSTRY NEWS

Health Canada has revised Part I: Health Professional Information, and Part II: Scientific Information — Guidance Document: Product Monograph and the five associated templates for prescription products.

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