Canada: "High Stakes" Patent Action Turned "Damp Squib"

Last Updated: February 6 2017
Article by Michael Crichton

In Mediatube Corp. v. Bell Canada, 2017 FC 6, the Federal Court of Canada has rendered a patent infringement trial decision in a case involving an alleged non-practicing entity.  While in the early days of the case the plaintiffs had been seeking damages for infringement in the hundreds of millions of dollars, by the time of the trial the issues had narrowed substantially to the point that non-infringement was largely admitted by the plaintiffs and the Court was mainly just being asked to render a decision on the allocation of costs.  What was once set to be a "high stakes fight" had turned into "something of a damp squib".


The plaintiffs, Mediatube Corp. and Northvu Inc., asserted Canadian Patent No. 2,339,477 (the 477 Patent) against Bell Canada in an action commenced in 2013.  Generally, the 477 Patent relates to a system for redistributing a plurality of audio/video signals to a plurality of communications interfaces.  The plaintiffs alleged infringement based on Bell's Internet Protocol Television (IPTV) services known as Fibe TV and FibreOp TV.  The plaintiffs further sought punitive damages on the basis that Bell had knowledge of the application for the 477 Patent, worked with the plaintiffs pursuant to a confidentiality agreement for the purpose of commercializing the invention, and eventually launched Fibe TV without the plaintiffs' knowledge or involvement.

In response, Bell denied infringement and asserted invalidity.  In addition, Bell denied any impropriety and sought elevated costs for what it alleged were intentionally false claims made by the plaintiffs.

Narrowing of the issues

As the case proceeded through discovery and towards trial, a number of events occurred that had the effect of narrowing the issues in dispute:

  • By December 2015, the plaintiffs narrowed their infringement case by dropping their claim of infringement to be in respect of only fibre-to-the-node customers; fibre-to-the-home subscribers were no longer at issue;
  • By February 2016, by way of its expert reports, Bell reduced its list of asserted prior art from 753 references to a small subset thereof;
  • By summer 2016, the plaintiffs limited the asserted claims of the 477 Patent to only four claims in total;
  • Throughout 2016, including up to and during the September 2016 trial, Bell provided numerous corrections/clarifications to its discovery answers concerning the details of Bell's Fibe TV and FibreOp TV systems;
  • After their case in chief closed at trial, the plaintiffs conceded non-infringement on all outstanding matters, except that they continued to argue that the multicasting aspect of the Fibe TV service could be modified to infringe the 477 Patent; and 
  • The plaintiffs also withdrew their claim for punitive damages.

Patent not infringed

In addressing infringement, the Court concluded there was no infringement.  In this regard, multiple essential claim elements were not present in the accused system.  With respect to the claim element "audio/video signals" in particular, the Court concluded that the patentee contemplated and disclosed in its specification only analog formats for the demodulated and processed audio/video signals.  As these signals in the accused system were in digital format, there was no infringement.

On the question of whether the possibility of modifying the multicasting aspect of the Fibe TV service constituted infringement on the basis of the doctrine of stand-by utility (e.g., a patented fire extinguisher may infringe even if not used because its stand-by benefit is enjoyed), the Court found no infringement.  This is because Bell was found to have had no intention to carry out the alleged modification.  While intention to infringe is normally not relevant to a patent infringement analysis, it is relevant when considering the doctrine of stand-by utility.

Notably, with respect to expert witnesses and claim construction, and specifically the plaintiffs' argument that its expert should be preferred because he was "blinded" from the allegedly infringing systems when he construed the claims, the Court noted that blinding a witness may indeed lend weight to their testimony in some situations, but ultimately how well-reasoned the various experts' opinions are is of greatest importance. 

Patent valid

In addressing validity, and based on the claim construction adopted by the Court, the Court concluded that none of the asserted references anticipated the 477 Patent, and that the 477 Patent was non-obvious.  The allegation of lack of utility was also rejected, particularly since the 477 Patent contained no clear and unambiguous promise.

Cost consequences

Regarding costs, the plaintiffs argued that, if they had known earlier what they eventually learned about Bell's systems, they would not have pursued the matter to trial.  As such, the plaintiffs argued that they should be awarded costs regardless of any conclusions on patent infringement and validity.

Bell, on the other hand, argued that it should be awarded its costs, including elevated costs in certain situations, because of the plaintiffs' numerous late admissions.

The Court's conclusion on these arguments was that none of the updated discovery answers would have been determinative on the issue of infringement, as the essential claim elements that were missing from Bell's system were missing in any event.  The plaintiffs' arguments regarding inconsistencies in Bell's answers were also dismissed because the plaintiffs never sought further discovery to clarify those answers.  Furthermore, the Court found that Bell's updated answers were properly characterized as clarifications, and earlier-produced answers were not unreliable in any substantial way.  Bell was found to have acted in good faith in answering discovery questions and in providing updated answers.

Notwithstanding the above, the plaintiffs further argued that they were entitled to aggravated costs on the basis of an allegation made by Bell – that the plaintiffs are "patent trolls" – which had allegedly resulted in embarrassment to the plaintiffs and others associated with them.  Bell's position was that the plaintiffs were in fact "patent trolls" on the basis that they were non-practicing entities whose only business was the litigation.

In response to these "patent troll" claims, the Court acknowledged that the term "patent troll" means different things to different people. Some may use it to describe an entity that asserts patent rights it does not use, and others argue it connotes an entity that asserts patent rights that it did not develop and that are invalid and/or are asserted far beyond the scope contemplated at the time of the invention.

Ultimately, the Court concluded that the plaintiffs in the present case were not "patent trolls" in the sense that the expression is generally used, and its use to characterize the plaintiffs was found to have not been warranted.  Nevertheless, use of the expression is more a question of opinion rather than fact.  While the expression is clearly not complimentary, use of the expression does not equate to an allegation of fraud or dishonesty.  Because there was insufficient evidence of the impact of the use of the expression against the plaintiffs, no award of aggravated costs was awarded. 

Finally, the Court made some other notable findings related to costs:

  • There were no adverse cost consequences for Bell for having asserted 753 prior art references, as Bell ultimately focused its prior art assertions in its expert report, nothing suggests any references were irrelevant, and the Court was not convinced the plaintiffs were put to any unnecessary expense;
  • Costs should not be elevated against the unsuccessful plaintiffs where they cast the net broadly in formulating infringement allegations and then narrowed those allegations after obtaining information during discovery.  On the other hand, where the plaintiffs had the information they needed to conclude there was no infringement but delayed in withdrawing the infringement claim, costs should be elevated;
  • Acknowledging that providing a clear theory of infringement may have been challenging to do prior to full discovery, the Court nevertheless found that costs should be elevated on the basis that the plaintiffs commenced the action without a clear theory of infringement, and the theory they did eventually form was weak; and
  • Considerable time was spent during and preparing for trial on the issue of punitive damages when the plaintiffs' allegations in relation to such claim were found to be meritless, particularly with respect to the fact that the plaintiffs had information all along demonstrating that Bell had not engaged in any of the high handed activities the plaintiffs had alleged but ultimately withdrew before Bell called its case.  Accordingly, solicitor-client costs on this issue were awarded in favour of Bell.


This case demonstrates the need for plaintiffs in patent actions to establish as early as possible a strong case for infringement, as well as to drop well before trial any weaker claims, particularly where those claims may involve allegations of high handed conduct.  Failure to take either of these steps could result in significant adverse cost consequences.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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.

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