In June 2008, in the case of Research In Motion v. Visto
Corp., the Federal Court had an opportunity to consider how an
award of costs should be varied in circumstances where the Court
was of the view that the conduct of the litigation was overzealous,
and inconsiderate of the Court's time and resources.
Research In Motion (RIM) and Visto Corp. were embroiled in
expansive patent-infringement litigation. In addition to the
Canadian lawsuit, litigation between the parties had been ongoing
in the United States and Great Britain. In Canada, RIM alleged that
Visto was infringing three of its patents, and claimed for damages,
profits and an injunction; Visto responded by alleging that the
patents were invalid.
The final result of the litigation, by contrast, was fairly modest.
The parties settled the matter shortly before trial. They agreed
that the RIM patents were valid, and had been infringed. Instead of
the substantial relief claimed by RIM at the outset, the final
settlement was only for damages, and RIM abandoned its claim to an
injunction. Finally, although the amount of damages was to be
determined later, all the evidence pointed to a small award.
Hughes J. noted that up until a few months before trial, the
parties were conducting the litigation as an "all out
war." Particularly bothersome to the Court was the
parties' refusal to narrow the issues, or focus the litigation.
RIM asked for a broad range of remedies, and alleged that almost
every claim in the three patents was being infringed. Visto raised
a large number of invalidity issues, made numerous references to
prior art, and only focused its arguments a few months before
The Court devoted significant time, effort, and resources to
this case. The parties originally reserved ninety days for the
trial, and the Court expended substantial resources to case-manage
and mediate the matter.
When the case was settled shortly before trial, the Court's
time in preparation was wasted, and the lengthy time booked for
trial was cancelled on comparatively short notice. The Court
expressed its displeasure by altering the amount that the
successful party received for costs. Costs are normally calculated
by the Federal Court on the basis of a published tariff, and can
vary depending on the length and complexity of the case, the value
of the claim, the conduct of the parties, offers to settle, and
actual disbursements. In this case, the Court calculated RIM's
entitlement to costs by its usual method, but to express its
displeasure over the conduct of the case, the Court reduced the
previously calculated cost award by half.
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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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