Canada: Federal Court Of Appeal Affirms Award Of Legal Costs Of $6.5 Million In Patent Infringement Case

On February 6, 2017, the Federal Court of Appeal affirmed a decision (Docket A-43-16) of t­­he Federal Court 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.  The trial judge had awarded Dow a lump sum payment of $6.5 million for its costs consisting of $2.9 million for legal fees and $3.6 million for disbursements.  The cost award appears to be the largest reported award that the Federal Court has ever granted in an action for patent infringement.  

Steven GarlandJeremy WantColin Ingram, Kevin Graham  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.  On September 6th, 2016 the Federal Court of Appeal upheld the Federal Court decision on the merits (2016 FCA 216).

Dow's costs award follows a recent trend of the Federal Court of granting, in appropriate cases, costs on a lump sum basis and where appropriate in excess of those that might be typically calculated under the Tariff of the Federal Courts Rules (the "Rules").  The trend of granting costs in excess of the Tariff is based on 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 in some circumstances.  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 incurred, and a disbursement component to reflect any reasonable and necessary disbursements (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. 

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 Federal Court decision on costs in Dow v Nova

In making the costs award in Dow v Nova, the trial judge noted the trend in the Federal Court of awarding higher costs for fees than those typically available under the Tariff.  In particular, the court noted that if the costs award was assessed under Column V of the Tariff (still higher than the default Column III) then the cost award to Dow would be "totally inadequate" given the circumstances of the case.  As such, the trial judge 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.  The disbursements included an amount of $1.6 million for certain Dow in-house testing costs.

The Federal Court of Appeal decision on costs in Dow v Nova

In affirming the trial judge's decision on the cost award, the Federal Court of Appeal noted that lump sum awards (as opposed to engaging in a detailed cost assessment) is expressly provided for in the Rules and such lump sum awards have found increasing favour with the courts as they save the parties time and money that would otherwise be associated with a cost assessment proceeding. 

Additionally, the Court also appreciated that there will be some cases where the costs permitted pursuant to the Tariff, including the high end of Column V, will be inadequate to achieve the objective of a cost award "making a reasonable contribution to the costs of litigation", such that an award based on a percentage of actual fees billed may be appropriate.  The Court noted that based on a review of the case law, such lump sum awards tend to range between 25% and 50% of actual fees billed, though there may be cases where a higher or lower amount is warranted. 

The Court also observed that as a matter of good practice, requests for lump sum awards should generally be accompanied by a Bill of Costs and an affidavit in respect of any disbursements that are outside the knowledge of the solicitor. In this case, the $1.6 million disbursement in respect of Dow's in-house costs for conducting certain tests was not supported by an affidavit.  However, the Court observed that there were "unique circumstances" in this case, including an earlier contested motion before the trial judge that was focused on the Dow in-house testing, and a cost estimate from an independent third party.

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.

In association with
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
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). 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 & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd 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 or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

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