Canada: Mediating Intellectual Property Disputes — Do I HAVE To? New Ontario Rules Likely Mean YES!

Last Updated: February 8 2010
Article by Brian D. Edmonds

Most Read Contributor in Canada, September 2018

What Is Mediation?

Mediation is a form of alternative dispute resolution (ADR) that can most simply be defined as "facilitated negotiation."1 The Ontario Rules of Civil Procedure describe it as a process wherein "a neutral third party facilitates communication among the parties to a dispute, to assist them in reaching a mutually acceptable resolution."2 That neutral's job is "to assist the parties to generate, evaluate and negotiate settlement options."3

Mediation can be more fully defined "as the process by which the participants, together with the assistance of a neutral person or persons, systematically isolate disputed issues in order to develop options, consider alternatives, and reach a consensual settlement that will accommodate the parties' needs."4

New Ontario Rules As Of January 1, 2010

The Law Society of Upper Canada's Rules of Professional Conduct impose the following obligation on Ontario lawyers:

"The lawyer shall consider the use of alternative dispute resolution (ADR) for every dispute, and, if appropriate, the lawyer shall inform the client of ADR options and, if so instructed, take steps to pursue those options."5

The Canadian Bar Association's Code of Professional Conduct contains a similar requirement.6

The majority of intellectual property (IP) contractual disputes are heard in the superior courts of the provinces. The Ontario Superior Court of Justice has been requiring mediation in some cases, in some regions, for over 10 years. It has expanded those cases and regions over time. The most recent amendments took effect on January 1, 2010.7 Mandatory mediation applies to actions commenced in Toronto, Ottawa and the County of Essex. It is no longer limited to case-managed actions, and so will now occur with increasing frequency.

The Federal Court Experience

In the Federal Court, where the majority of IP infringement and validity disputes are litigated, mediation is becoming more commonplace. Under that court's rules, after close of pleadings the solicitors for the parties are required to "discuss the possibility of settling any or all of the issues in the action and of bringing a motion to refer any unsettled issues to a dispute resolution conference."8 In addition, at the subsequent pre-trial conference, the parties must be prepared to discuss "the possibility of settlement of any or all of the issues in the action and of referring any unsettled issues to a dispute resolution conference."9 Such a conference is to be conducted by a case management judge or a court official called a prothonotary.10 One possible form is:

"... a mediation, to assist the parties by meeting with them together or separately to encourage and facilitate discussion between them in an attempt to reach a mutually acceptable resolution of the dispute."11

The court's rules even assist parties in availing themselves of other means of dispute resolution, including mediation before persons other than a judge or prothonotary.12

Mediation is not yet mandatory in the Federal Court. However, the court can order that a proceeding be referred to mediation,13 and has done so.14

International Perspective

Interrelated IP disputes frequently take place in the courts of numerous countries at the same time. In such cases the effect of conducting, or not conducting, mediation of a particular dispute must be considered from the points of view of a number of different legal systems. In the UK, for example, failure to meaningfully participate in mediation can have costs consequences after trial, even for the successful party.15 In other jurisdictions participation in mediation can suspend the running of a limitation period.16 In some jurisdictions ADR is mandatory.

Settlement Is Likely

In any event, as one US judge has said, "... mediation helps the inevitable happen faster. In the vast majority of cases, the parties will ultimately settle rather than go to trial."17 For example, more than 95 per cent of US Trademark Trial and Appeal Board proceedings are either settled or decided by the entry of pre-trial judgment.18

As another example, in the year ending September 30, 2008, in the US District Court system, 3727 copyright cases were terminated. Only 1.3 per cent of them were terminated during or after trial. Of 3460 terminated trade-mark cases, the figure was 1.7 per cent. For 2875 patent cases, it was 3.8 per cent.19 In every category, the vast majority of cases were resolved before trial.


Given increased focus on mediation in both the Ontario and Federal Courts, it is increasingly likely that you will have to mediate your IP dispute. Early and efficient resolution of a dispute through mediation can yield major benefits, compared to a resolution achieved on the courthouse steps after years of disruption and expense. The following statistics are noteworthy:

  1. According to the Center for Dispute Resolution in London, Ontario, over 90 per cent of cases it administered were settled, which is reflective of other settlement rates from around the world.20
  2. Since January 2008, members of the International Trademark Association's Panel of Neutrals have conducted 50 mediations; complete settlement was achieved in 44 of them.21
  3. One Canadian publication has reported that according to some lawyers, clients who use mediation save about 80 per cent of the cost of litigation.22
  4. A Pennsylvania study of thousands of law suits over a five-year period determined that most plaintiffs who passed up a settlement offer and went to trial received less money than the offer; defendants suffered less often when they rejected an offer, but when they did, they lost an average of 26 times more money than plaintiffs.23


1. Allan J. Stitt, Mediating Commercial Disputes, Canada Law Book Inc., Toronto, 2003 at 1

2. Rule 24.1.02

3. Laura E. Goldbard and Heather L. Danzig, "Alternatives to the Courthouse," INTA Bulletin, October 2002, p. 1 at 2

4. Daniele Ciraco, "Forget the Mechanics and Bring in the Gardeners: An Exploration of Mediation in Intellectual Property Disputes," 18 Canadian Intellectual Property Review, p. 433 (2001) at 437, footnote 37

5. L.S.U.C. Rules of Professional Conduct, as amended up to June 25, 2009, Rule 2.02(3)

6. C.B.A. Code of Professional Conduct, 2009, Chapter IX, Commentary 8

7. O. Reg. 438/08

8. Rule 257

9. Rule 263(a)

10. Rule 387

11. Rule 387(a)

12. Rule 390

13. Rule 386(1)

14. For example, see Merck & Co. v. Nu-Pharm Inc., 2007 Carswell Nat 1380; 2007 FC 537 (F.C. Proth.)

15. Dawn Osborne and Susan O'Neill, "Court-Facilitated Mediation: A View from Both Sides of the Atlantic," INTA Bulletin, July 15, 2007, vol. 62, No. 13, p.5

16. Goldbard and Danzig, supra, at 2

17. John E. Lyhus, "Stay Loyal to the ADR Process," INTA Bulletin, October 2002, p. 8

18. see, under "Alternative Dispute Resolution"

19. see, Table C-4 at 169

20. Ciraco, supra, at 456, footnote 168

21. Ray Geraldston, Molly Burch Richard and Jill Riota, "Mediation in Trademark Cases: Judicial Perspectives and Mediation Styles," INTA Bulletin, January 1, 2010, Vol. 65, No. 1, p. 8 at 9

22. Ciraco, supra, at 449, footnote 114

23. Mark V.B. Partridge, Alternative Dispute Resolution, Oxford University Press, New York, 2009 at 14

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.

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