1 Legal framework

1.1 What are the sources of patent law in your jurisdiction?

Patent law in Canada is governed by a federal statute, the Patent Act.

1.1 What are the sources of patent law in your jurisdiction?

The Canadian Patent Act and its related regulations, such as the Patent Rules and the Patented Medicines (Notice of Compliance) Regulations, are the main sources of patent law in Canada. The Canadian federal government has exclusive jurisdiction over Canadian patents. Hence, decisions of the Federal Court, the Federal Court of Appeal and the Supreme Court of Canada are also sources of patent law in Canada. Provincial superior court decisions are also relevant, as such courts have jurisdiction to hear patent disputes, though remedies available through those courts are limited.

1.2 Who can register a patent?

In Canada, the inventor of an invention has the right to obtain a patent for the invention. However, this right can be transferred by the inventor to a legal representative (eg, another person, a company) through a transfer or assignment. Hence, any legal entity which has legal ownership of an invention can apply for and ultimately obtain a patent for an invention in Canada.

Where an invention is made by two or more inventors, an application for the invention should be filed by and in the names of all of the joint inventors, unless the Commissioner of Patents is satisfied that some of the joint inventors have refused to apply for a patent or that some of the joint inventors cannot be located after diligent inquiry.

1.2 Who can register a patent?

A patent application can be filed by the inventor or the inventor's legal representatives. An inventor's legal representatives include such individuals and entities as the inventor's heirs, executors, assignees and all other persons claiming through an applicant for a patent.

2 Rights

2.1 What rights are obtained when a patent is registered?

A patent grants the patentee and the patentee's legal representatives, for the term of the patent, the exclusive right, privilege and liberty to make, construct and use the invention and sell it to others to be used, subject to adjudication in respect thereof before any court of competent jurisdiction.

2.1 What rights are obtained when a patent is registered?

The owner of a granted Canadian patent obtains, for the term of the patent, the exclusive right in Canada to make, construct, use and sell to others to be used the invention claimed in the granted Canadian patent.

2.2 How can a patent owner enforce its rights?

A patent owner can enforce its rights by commencing an action for patent infringement before the Federal Court of Canada or the superior court of a Canadian province. Each provides slightly different remedies for the patent owner. The Federal Court is typically the preferred forum, as it is more experienced in hearing patent-related matters and has national jurisdiction.

2.2 How can a patent owner enforce its rights?

An action for infringement may be brought in Canada's Federal Court or in a court of record in a province in which the infringement is said to have occurred.

2.3 For how long are patents enforceable?

For a patent that is granted in respect of an application that was filed on or after 1 October 1989, the term begins on issuance and ends 20 years after the filing date. For a patent that is granted in respect of an application filed prior to 1 October 1989, the term is 17 years from the date on which the patent issued. In certain circumstances, a patentee may be able to obtain a certificate of supplementary protection for up to two years in respect of a patent that pertains to a medicinal ingredient or combination of medicinal ingredients contained in a drug for which marketing approval was delayed.

2.3 For how long are patents enforceable?

Patents granted from applications which are filed prior to 1 October 1989 are enforceable for up to 17 years after the patent issues. Patents granted from applications which are filed on or after 1 October 1989 are enforceable for up to 20 years after the patent application was filed.

3 Obtaining a patent

3.1 Which governing body controls the registration procedure?

The Canadian Intellectual Property Office (CIPO), an agency of Innovation, Science and Economic Development Canada, controls the patent registration procedure in Canada.

3.1 Which governing body controls the registration procedure?

The patent registration procedure is under the control of the Canadian Intellectual Property Office (CIPO), which is an agency of Innovation, Science, and Economic Development Canada.

3.2 What is the cost of registration?

The government fee for filing a patent application is C$400. In order for a patent application to be granted, it must be examined by an examiner of CIPO, which requires the filing of a request for examination and payment of the prescribed examination fee of C$800. The request for examination must be filed within a prescribed timeframe. At present, the request for examination must be filed within five years of the filing date of the application; however, this period will be reduced to three years from the date of filing once the provisions of the new Patent Act come into force (this is expected to occur in early 2019). Once the examination is completed and allowance of the application is achieved, the prescribed final fee of C$300 must be paid in order for the patent to be granted.

The above-mentioned government fees may be reduced by 50% if the applicant qualifies as a small entity. A ‘small entity' is defined in the Patent Rules as an entity that employs 50 or fewer employees or that is a university, but does not include an entity that:

  • is controlled directly or indirectly by an entity, other than a university, which employs more than 50 employees; or
  • has transferred or licensed or has an obligation, other than a contingent obligation, to transfer or license any right in the invention to an entity, other than a university, which employs more than 50 employees.

3.2 What is the cost of registration?

The government application fee for filing an application is C$400. A separate examination fee of C$800 is also required. A request for examination can be filed at the time of filing or can be delayed up to four years from the application filing date. Once an application has been allowed, a final fee of C$300 is payable prior to the issuance of the patent.

Annual maintenance fees are payable starting on the second anniversary of the filing date of the application. The maintenance fee is:

  • C$100 for each of the second, third and fourth anniversaries of the filing date of the application;
  • C$200 for each of the fifth to ninth anniversaries;
    C$250 for each of the 10th to 14th anniversaries; and
  • C$450 for each of the 15th to 19th anniversaries.

These fees are reduced by 50% if the applicant qualifies as a ‘small entity'. The Patent Rules define a ‘small entity' as one that employs 50 or fewer employees or that is a university. However, this does not include:

  • an entity that is controlled directly or indirectly by an entity, other than a university, that has more than 50 employees; or
  • an entity that has transferred or licensed, or has an obligation other than a contingent obligation to transfer or license, any right in a claimed invention to an entity, other than a university, that has more than 50 employees.

3.3 What are the grounds to reject a patent application?

A patent application can be rejected if a CIPO examiner has reasonable grounds to believe that the application does not comply with the requirements of the Patent Act or Patent Rules, and that the applicant will not amend the application to comply with the Patent Act or Patent Rules. An application will be refused if it does not define patentable subject matter, as discussed further in question 3.7.

3.3 What are the grounds to reject a patent application?

Under Section 30(2) of the Patent Rules, a patent application can be rejected if the CIPO examiner has reasonable grounds to believe that the application does not comply with the requirements of the Patent Act or Patent Rules.

3.4 What programmes or initiatives are available to accelerate or fast track examination of patent applications?

Examination of a Canadian patent application may be expedited in three ways. First, the applicant may request entry of the application into the Global Patent Prosecution Highway programme or one of the bilateral Patent Prosecution Highway programmes to which Canada is a party (collectively, ‘PPH'). Under this programme, the applicant must request entry into the PPH and amend the claims of the Canadian application to "sufficiently correspond" to one or more claims that were found allowable by a foreign patent office that is also a participant in the PPH. There is no fee for requesting entry into the PPH.

Second, the applicant or any other person may request expedited examination of an application under Paragraph 28(1)(a) of the Patent Rules if such person believes that failure to advance the application is likely to prejudice that person's rights. A request under this provision requires payment of a government fee of C$500.

Third, where an application is directed to technology that, if commercialised, would help to resolve or mitigate environmental impacts or to conserve the natural environment and resources, the applicant may request expedited examination under Paragraph 28(1)(a) of the Patent Rules. No government fee is required for filing such a request.

3.4 What programmes or initiatives are available to accelerate or fast track examination of patent applications?

There are three ways in which the examination of a Canadian patent application may be expedited:

  • Any person, upon payment of a C$500 fee with a statement indicating that failure to advance the examination of the application is likely to prejudice that person's rights, can request expedited examination of an application out of its routine order in the CIPO. Such a request can be granted only if the application has been laid open to public inspection and a request for examination has been made.
  • An applicant can request expedited examination if the application is related to ‘green technology'. The applicant must state that the application relates to technology whose commercialisation would help to resolve or mitigate environmental impacts or to conserve the natural environment or natural resources. Again, the application must be laid open to public inspection and a request for examination must have been made. No additional fee is required.
  • Canada is a participant in the Patent Prosecution Highway (PPH). An applicant can fast-track the examination of an application provided that it has a corresponding application that has been deemed allowable by one of Canada's PPH partners. In order for the application to qualify for the PPH:
    • a request must be received before examination has begun;
    • all claims must sufficiently correspond to one or more of the claims found allowable by the partner office; and
    • the application must already be published.
  • No additional fee is required.

3.5 Are there any types of claims or claiming formats that are not permissible in your jurisdiction (eg, medical method claims)?

There are no particular claim types or claiming formats that are not permissible under the Patent Act and the Patent Rules. However, claims directed to certain subject matter such as method of use claims directed to medical treatments are not permissible, as discussed in question 3.7.

3.5 Are there any types of claims or claiming formats that are not permissible in your jurisdiction (eg, medical method claims)?

There are no limitations in the Patent Act or Patent Rules on the types or formats of claims that may be included in a patent application. Thus, it is permissible for a patent application to contain any number of independent and dependent claims and multiple dependent claims. However, as discussed further in question 3.7, claims directed to certain types of subject matter, such as methods of medical treatment, are not patentable in Canada.

3.6 Are any procedural or legal mechanisms available to extend patent term (eg, adjustments for patent office delays, pharmaceutical patent term extension or supplementary protection certificates)?

Under the Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union, patent term restoration became available as of 21 September 2017 for patents directed to drugs comprising new medicinal ingredients or new combinations of medicinal ingredients. Under CETA, the patentee of a qualifying patent may apply for a certificate of supplementary protection to extend the term of the patent up to a maximum of two years as compensation for delays in obtaining regulatory approval for the patented drug.

Under the recent United States, Mexico, Canada Agreement, a patent term extension will be made possible to extend the term of a granted patent by a period attributable to unreasonable prosecution delays by CIPO in granting a patent. An ‘unreasonable delay' is defined as a delay of more than five years from filing of the application or three years from filing of a request for examination, whichever is later. The details of this provision, including the possible length of the patent term extension, have not yet been established. Canada has four and a half years to implement this provision.

3.6 Are any procedural or legal mechanisms available to extend patent term (eg, adjustments for patent office delays, pharmaceutical patent term extension or supplementary protection certificates)?

As of 21 September 2017, under the Comprehensive Economic and Trade Agreement between Canada and the European Union, a patent term extension of up to two years is available for eligible patents. The patent term extension is provided in the form of a certificate of supplementary protection, which is available for the first authorisation for sale of a drug containing a new medicinal ingredient or combination of medicinal ingredients in Canada.

Under the United States-Mexico-Canada Agreement (USMCA), a patent term adjustment will be available where there are unreasonable delays in the CIPO's issuance of a patent. ‘Unreasonable delay' is defined as a delay in the issuance of a patent of more than five years from the date of filing of the application or three years after a request for examination of the application has been made, whichever is later. Canada will have four and a half years from the date of entry into force of the USMCA to fully implement this requirement.

3.7 What subject matter is patent eligible?

The Patent Act defines an ‘invention' as any new and useful art, process, machine, manufacture or composition of matter, or any new and useful improvement in any art, process, machine, manufacture or composition of matter.

However, Section 27(8) of the Patent Act expressly states that no patent shall be granted for any mere scientific principle or abstract theorem, and the court has interpreted this section to exclude from patentability mathematical formulae, natural phenomena and laws of nature. Subject matter that is not considered to be within the scope of the meaning of ‘invention' has been found to include:

  • methods of medical treatment or surgery;
  • higher life forms;
  • forms of energy (eg, regions of the electromagnetic spectrum, electric currents);
  • features of an invention that have a purely intellectual or aesthetic significance;
  • printed matter;
  • fine arts;
  • schemes, plans, rules and mental processes; and
  • games.

3.7 What subject matter is patent eligible?

A patent may be obtained for an ‘invention'. This term is defined in Section 2 of the Patent Act as any new and useful art, process, machine, manufacture or composition of matter, or any new and useful improvement in any art, process, machine, manufacture or composition of matter. The only statutory exclusion to patentability is provided in Section 27(8) of the Patent Act, which states that a patent may not be granted for a mere scientific principle or abstract theorem. In addition, the Canadian courts have held that the following do not constitute patentable subject matter under Section 2 of the Patent Act:

  • methods of medical treatment or surgery;
  • higher life forms (including fertilised eggs and totipotent stem cells);
  • forms of energy (including electromagnetic and acoustic signals);
  • features of solely intellectual significance (eg, literary works) or aesthetic significance;
  • schemes, plans, rules and mental processes;
  • fine arts;
  • printed matter; and
  • games.

3.8 If the patent office does not grant a patent, is an appeal available and to whom?

When an impasse is reached between an applicant and an examiner with respect to the allowance of a patent application, the examiner may issue a final action stating the reasons for refusing the application. The applicant is invited to respond to the final action; should such response not overcome the examiner's grounds for refusal, the application is referred to the Patent Appeal Board (PAB) for review. The PAB will review the prosecution history, invite comments and/or amendments from the applicant, and issue a final decision. The decision of the PAB may be appealed to the Federal Court.

3.8 If the patent office does not grant a patent, is an appeal available and to whom?

An application that is rejected by a CIPO examiner will be reviewed by the Patent Appeal Board. The board will formulate a recommendation to the Commissioner of Patents, based on a review of the application prosecution history and any amendments and submissions from the applicant. The Commissioner of Patents will make a final decision based on the board's recommendation. The Commissioner's decision may allow the application, require that certain amendments be made before allowing the application or refuse the application. The Commissioner's decision may be appealed to the Federal Court of Canada. The decision of the Federal Court may be appealed to the Federal Court of Appeal and, with leave, to the Supreme Court of Canada.

4 Validity/post-grant review and/or opposition procedures

4.1 Where can the validity of an issued patent be challenged?

Patent validity can be challenged in Canada's Federal Court.

4.1 Where can the validity of an issued patent be challenged?

The Federal Court has jurisdiction, in a legal proceeding challenging the validity of a patent, to make an in rem declaration that a patent or any claim in the patent is invalid. The commissioner of patents can also declare a patent or any claim in a patent to be invalid in a re-examination proceeding.

4.2 How can the validity of an issued patent be challenged?

The attorney general of Canada or an ‘interested person' can commence an action in Federal Court seeking a declaration of invalidity of a patent or any claim in a patent. The threshold to qualify as an interested person is low. A defendant in an infringement action can also attack the validity of a patent by way of counterclaim in the infringement action. If the validity of a patent is at issue in a provincial court proceeding, any ruling made by the court on the issue of validity will be binding only as between the parties. Any person (including the patentee) can request that the commissioner of patents commence re-examination proceedings in respect of an issued patent where a substantial new issue of patentability is raised by prior art consisting of patents, patent applications and/or printed publications.

4.2 How can the validity of an issued patent be challenged?

An impeachment action to invalidate a patent or any claim in a patent may be commenced by the attorney general of Canada or an interested person in the Federal Court. ‘Interested person' has been judicially interpreted to include:

  • the patent owner's competitors (eg, parties engaged in the design and manufacture of similar products);
  • retailers (eg, traders in articles similar to the alleged invention); and
  • potential and actual infringers.

4.3 What are the grounds to invalidate an issued patent?

The grounds for invalidating an issued patent include, among others:

  • lack of utility;
  • lack of novelty;
  • obviousness;
  • failure to properly enable the invention;
  • ambiguity; and
  • double patenting.

Additionally, a patent may be found to be void if a material allegation in the applicant's petition for the patent is untrue. If the specification or drawings contain more or less than is necessary for their intended purpose, and the omission or addition of information is wilfully made for the purpose of misleading, the patent may also be found to be void.

4.3 What are the grounds to invalidate an issued patent?

There are many grounds upon which an issued patent may be invalidated, such as lack of utility, obviousness, lack of novelty, ambiguity in the claims, double patenting and the claims being broader than the invention made or disclosed.

4.4 What is the evidentiary standard to invalidate an issued patent?

Although an issued patent is entitled to a presumption of validity under the Patent Act, once the validity of a patent is challenged in a legal proceeding, the standard upon which the patent may be invalidated is by the preponderance of evidence.

4.4 What is the evidentiary standard to invalidate an issued patent?

A party seeking to invalidate an issued patent (or one or more claims of an issued patent) must establish invalidity on a balance of probabilities.

4.5 What post-grant review or opposition procedures are available for third parties to challenge the validity of a patent?

Once a patent is granted, third parties can challenge the validity of one or more claims of the patent by filing a request for re-examination of the patent with the Commissioner of Patents. Re-examination is intended to be a simpler, less expensive alternative to commencing an impeachment action in the Federal Court. Re-examination proceedings should conclude within about 18 months from the date of their initial commencement.

4.5 What post-grant review or opposition procedures are available for third parties to challenge the validity of a patent?

A third party can challenge the validity of a patent either in the courts (through commencement of an impeachment action or by way of counterclaim in an infringement action) or through a re-examination proceeding before the commissioner of patents.

4.6 Who can oppose a granted patent?

A person seeking to challenge a granted patent by way of an impeachment action must qualify as an ‘interested person'. As noted above, the threshold to qualify as an ‘interested person' is low. Any person can seek to challenge a patent by way of re-examination.

4.6 Who can oppose a granted patent?

Any person, including the patent owner, may request re-examination of a granted patent.

4.7 What are the timing requirements for filing an opposition or post-grant review petition?

Re-examination of any claims of a patent that was issued after 1 October 1989 may be requested at any time during the life of the patent.

4.7 What are the timing requirements for filing an opposition or post-grant review petition?

There are no time limits for challenging an issued patent.

4.8 What are the grounds to file an opposition?

In the case of a pending application, any third party that wishes to object to the granting of a patent can file a protest with the commissioner of patents based on patents, published patent applications and printed publications that the requesting party believes bear on the patentability of one or more claims. In the case of a granted patent, any third party can request that the commissioner of patents commence re-examination proceedings in circumstances where a substantial new question of patentability is raised by prior art consisting of patents, patent applications and/or printed publications. In the case of a court challenge to the validity of a patent, a broad range of grounds can be alleged, including not only attacks based on prior art, but also other grounds such as lack of patentable subject matter, insufficiency of the patent specification, best mode and the like.

4.8 What are the grounds to file an opposition?

Re-examination of an issued patent may be requested based on prior art which raises a substantial new question of patentability affecting any of the claims of the patent. The prior art may consist of issued patents, published patent applications and printed publications. The prior art may consist of prior art already considered during prosecution if a substantial new question of patentability is raised (eg, the prior art is applied differently from how it was applied during prosecution). The request must set out the relevance of the prior art and apply the prior art to the claim or claims for which re-examination is requested.

4.9 What are the possible outcomes when an opposition is filed?

If the request for re-examination is non-compliant or does not raise a substantial new question of patentability, the re-examination will not proceed. If the re-examination proceeds, then:

  • any claim of the patent determined to be unpatentable will be cancelled;
  • any claim of the patent determined to be patentable will be confirmed; and
  • any proposed amended or new claim determined to be patentable will be incorporated in the patent.

If all of the claims of the patent are cancelled, the patent will be deemed never to have been issued.

4.9 What are the possible outcomes when an opposition is filed?

In the case of a protest or a re-examination, the commissioner of patents will decide whether the prior art being relied upon by the requesting party affects the patentability of any claim in the patent application or patent, as the case may be. In a protest, the commissioner may reject one or more claims based on the submitted art. In a re-examination, the commissioner may declare one or more claims to be invalid based on the prior art. In a court challenge, the court may declare one or more claims of the patent to be invalid.

4.10 What legal standards will the tribunal apply to resolve the opposition or challenge, and which party bears the burden of proof?

In a protest, the commissioner will consider the submitted prior art and how it affects the patentability of any pending claim in the same manner as if the commissioner had located the prior art in a search or if the art had been submitted by the applicant. In the case of a re-examination, the commissioner establishes a re-examination board which first determines whether a substantial new question of patentability affecting any claim of the patent is raised by the request for re-examination. If the re-examination board concludes that a substantial new question of patentability has been raised, it shall then determine the patentability of the claims in the same manner as patentability would be considered during examination of a pending application. In a court challenge, although a patent is entitled to a statutory presumption of validity, if the party challenging the patent can establish on the preponderance of the evidence that the patent is invalid, the court will issue a declaration of invalidity.

4.10 What legal standards will the tribunal apply to resolve the opposition or challenge, and which party bears the burden of proof?

The party requesting re-examination must file a proper request for re-examination. If the request is non-compliant, no action will be taken until an acceptable request is submitted. If the request is partially compliant (ie, compliant for some, but not all, of the claims for which re-examination is requested), the re-examination will consider only the claims for which the request is compliant. A request may be partially compliant if it sets out the relevance of the prior art for some, but not all of the claims for which re-examination is requested.

The request must also raise a substantial new question of patentability (ie, a new issue relating to the validity of one or more of the claims that was not raised during prosecution of the patent application).

If the request is compliant and the re-examination board determines that a substantial new question of patentability has been raised, the patent owner then has the burden of demonstrating to the re-examination board why the claims in question are patentable. The patent owner may make written or oral submissions. As part of the submissions, the patent owner may propose amendments to the patent or submit new claims as long as the amendments or new claims do not expand the scope of the patent. Such submissions are similar to submissions made during prosecution of the patent application.

4.11 Can a post-grant review decision be appealed and what are the grounds to appeal?

Any decision made by the re-examination board regarding the patentability of one or more claims of a patent may be appealed by the patent owner to the Federal Court for a limited amount of time (three months). The re-examination board's determination that a re-examination request does not raise a substantial new question affecting the patentability of a claim of the patent is final and cannot be appealed.

4.11 Can a post-grant review decision be appealed and what are the grounds to appeal?

A decision by a re-examination board to cancel a claim of a patent may be appealed by the patentee to the Federal Court. On appeal, the patentee can argue that the re-examination board made errors of law, fact or mixed fact and law that require intervention by the Federal Court. A party which requests the commencement of a re-examination proceeding has no right to appeal the re-examination board's decision. In an invalidity action before the court, the losing party can appeal to the appellate court as of right and can allege that the court below made errors of law, fact or mixed fact and law that justify intervention by the appellate court.

5 Patent enforceability

5.1 What makes a patent unenforceable?

The primary grounds upon which a patent may be held to be unenforceable are laches and acquiescence on the part of the patentee.

5.1 What makes a patent unenforceable?

A patent is unenforceable if:

  • it is found to be invalid;
  • the term of the patent has expired; or
  • the maintenance fees have not been paid.

A patent may be found invalid, and therefore unenforceable, for various reasons set out in the Patent Act, including anticipation, obviousness, patent-ineligible subject matter and reasons related to disclosure.

If a patent owner fails to pay a maintenance fee and does not remedy the default, the patent will be deemed to have expired as of the due date of the maintenance fee and is unenforceable.

There are also various exceptions and defences to infringement, including prior use, development for government approval, third-party rights, laches and experimentation.

5.2 What are the inequitable conduct standards?

Canada has no doctrine of inequitable conduct. However, there are circumstances in which conduct of the patent owner may affect the validity, and therefore the enforceability, of a patent.

Per the Patent Act, a patent may be void if:

  • any material allegation in the petition of the applicant in respect of the patent is untrue; or
  • the specification and drawings contain more or less than is necessary for obtaining the end for which they purport to be made, and the omission or addition was wilfully made for the purpose of misleading.

Furthermore, in any action or proceeding regarding a patent, a written communication between the applicant and the Canadian Intellectual Property Office may be admitted into evidence to rebut any representation made by the patent owner in the action or proceeding as to the construction of a claim of the patent.

5.2 What are the inequitable conduct standards?

Canada does not have a doctrine of inequitable conduct as it applies to patents.

5.3 What duty of candour is required of the patent office?

The Patent Act provides that an applicant must reply in good faith to any requisition issued by an examiner during examination of an application. Aside from that obligation, there is no general duty of candour imposed on an applicant during prosecution of a patent application.

5.3 What duty of candour is required of the patent office?

The Patent Act requires that an applicant reply in good faith to any requisition made by an examiner in connection with examination of a patent application. Canadian courts have held that ‘good faith' means replying with complete, honest and impartial disclosure (Lundbeck v Ratiopharm, 2009 FC 1102).

Furthermore, a patent may be void if:

  • any material allegation in the petition of the applicant in respect of the patent is untrue; or
  • the specification and drawings contain more or less than is necessary for obtaining the end for which they purport to be made, and the omission or addition was wilfully made for the purpose of misleading.

Additionally, if a patent owner makes an untrue material allegation in a request for reversal of expiration of a patent which expired due to failure to pay a maintenance fee, then the patent may be declared expired as of the missed deadline to pay the maintenance fee.

6 Patent infringement

6.1 What Constitutes Patent Infringement?

The Patent Act grants the patent owner (and the patent owner's legal representatives) the exclusive right to make, construct and use the invention and sell it to others to be used. Any act that interferes in whole or in part, directly or indirectly, with the patent owner's exclusive right during the term of the patent without the consent of the patent owner constitutes infringement of the patent.

6.1 What Constitutes Patent Infringement?

The Supreme Court of Canada has held that infringement takes place when an activity deprives the patentee "in whole or in part, directly or indirectly, of full enjoyment of the monopoly conferred by law".

6.2 Does your jurisdiction apply the doctrine of equivalents?

No.

6.2 Does your jurisdiction apply the doctrine of equivalents?

Strictly speaking, Canada does not apply the doctrine of equivalents. In Canada, claims are interpreted using a ‘purposive construction'. As part of a purposive construction, elements of a claim are identified as being essential or non-essential on the basis of the common knowledge of the worker skilled in the art to which the patent relates as of the date on which the patent is published. There is no infringement if an essential element is different or omitted in the allegedly infringing device, but there may still be infringement if non‑essential elements are substituted or omitted (eg, Free World Trust v Électro Santé Inc, 2000 SCC 66).

6.3 Can a party be liable if the patent infringement takes place outside the jurisdiction?

The exclusive rights conferred by a Canadian patent are limited territorially to Canada. A person that, outside of Canada, makes, constructs, uses or and sells the invention commits no breach of the Canadian patent. However, there are several situations where an act outside of Canada can give rise to a finding of infringement of a Canadian patent because of subsequent activity in Canada that is found to be an infringement by virtue of the acts abroad. For example, making an infringing product outside of Canada would not infringe the Canadian patent, but subsequently importing the infringing product into Canada could infringe the Canadian patent. As another example, making a product outside of Canada with an infringing process would not infringe the Canadian patent, but subsequently importing the product into Canada could infringe the Canadian patent.

6.3 Can a party be liable if the patent infringement takes place outside the jurisdiction?

No, there must be an activity that occurs in Canada in order to ground an infringement claim.

6.4 What are the standards for wilful infringement?

Although Canada does not have a doctrine of wilful infringement, it is possible that an infringer's conduct in infringing a patent through bad faith or wilful blindness could justify an award of punitive damages.

6.4 What are the standards for wilful infringement?

Canadian patent law does not include a specific head of damages for wilful infringement. Instead, punitive damages may be requested by the plaintiff. Punitive damages may be awarded in exceptional cases of high-handed, malicious, arbitrary or highly reprehensible misconduct that represents a marked departure from ordinary standards of decent behaviour.

While an award of punitive damages is rare in Canadian patent infringement cases, punitive damages have been awarded. In Bell Helicopter Textron Canada Limitée v Eurocopter, société par actions simplifiée, 2013 FCA 219, the court awarded punitive damages on the basis that that there was "clear evidence of bad faith and egregious conduct on the part of Bell" and "willful blindness or intentional and planned misappropriation of the claimed invention"; and "that the infringement… was not innocent or accidental". In concluding that there was wilful blindness on the part of Bell Helicopter, the court noted that it "simply defies belief that a large and sophisticated corporation such as Bell Helicopter would not verify intellectual property rights prior to embarking, as it did, on a research program".

6.5 Which parties can bring an infringement action?

A patent infringement action can be brought by the patent owner and all persons claiming under the patent owner. ‘All persons claiming under' the patent owner has been interpreted broadly by the courts to include exclusive and non-exclusive licensees (including under an implied licence). In some circumstances, a licence may be implied from a corporate relationship between the patent owner and the claimant. The Patent Act provides that the patent owner must be made a party to a patent infringement action, either as a claimant or as a defendant.

6.5 Which parties can bring an infringement action?

Although an infringement action can be commenced by any person "claiming under the patentee" (eg, a licensee), the patentee must be made a party to the litigation unless the court orders otherwise.

6.6 How soon after learning of infringing activity must an infringement action be brought?

The Patent Act provides that a patentee cannot seek remedies in respect of acts of infringement that occurred more than six years before commencement of an infringement action.

6.6 How soon after learning of infringing activity must an infringement action be brought?

The Patent Act provides a limitation period of six years for patent infringement actions. This limitation period still allows a plaintiff to commence an action more than six years after learning of the infringing activity, although the plaintiff cannot recover damages or profits for infringing conduct that occurred more than six years prior to commencement of the infringement action.

6.7 What are the pleading standards to initiate a suit?

The Federal Court has held that patent infringement pleadings must contain facts by virtue of which the law recognises a defined right as belonging to the plaintiff and facts that constitute an encroachment by the defendant on that defined right of the plaintiff. At a minimum, this includes identifying:

  • the patent(s) at issue;
  • the specific claims of the patent(s) being asserted;
  • the basis of the right to the patent held by the plaintiff (eg, as a patent owner or as a party claiming under the patent owner); and
  • the allegations which identify the activities of the defendant which are alleged to amount to infringement of the patent(s).

While a claim chart mapping patent claim elements to the allegedly infringing product may not be strictly necessary, in some cases it may be desirable to include one nonetheless.

6.7 What are the pleading standards to initiate a suit?

A statement of claim must plead:

  • facts from which it follows that the plaintiff has the exclusive right to do certain things; and
  • facts that constitute an encroachment by the defendant on that right.

In a patent infringement action, the statement of claim must, at a minimum, identify the parties, the patent(s) and claim(s) in suit and the defendant's acts which are alleged to constitute an infringement.

6.8 In which venues may a patent infringement action be brought?

A patent infringement action may be commenced in the Federal Court or in a provincial court in a province where infringement is alleged to have occurred. The Federal Court has country-wide jurisdiction, so an action can be commenced in any office of the court regardless of where in Canada the infringement is alleged to have occurred.

6.8 In which venues may a patent infringement action be brought?

Two types of courts hear patent matters in Canada: the Federal Court and the provincial courts. An action for patent infringement can be brought in either the Federal Court or the superior courts of a Canadian province. Most patent infringement actions are brought in the Federal Court due to the national recognition of Federal Court judgments and the view that the Federal Court typically has more experience in patent matters.

Notably, while the Federal Court may impeach or declare a patent (or claims thereof) invalid or void, provincial courts may only declare a patent (or claims thereof) invalid as between parties to the litigation.

6.9 What are the jurisdictional requirements for each venue?

The Federal Court has national jurisdiction and can hear any Canadian patent infringement action.

A provincial court may hear a patent infringement action if the provincial court is of the province in which the infringement is said to have occurred or if there is a sufficient connection between the defendant and that jurisdiction.

6.9 What are the jurisdictional requirements for each venue?

As noted above, a patentee can commence an action in the Federal Court in any location where the court sits in respect of acts of infringement that have occurred anywhere in Canada. Alternatively, a patentee can commence an action in a provincial superior court in any province where acts of infringement are alleged to have occurred.

6.10 Who is the fact finder in an infringement action?

The trial judge. The Federal Court prohibits juries and although it is possible to have a jury trial in provincial courts, it is very rare for a patent case to be tried before a jury in Canada.

6.10 Who is the fact finder in an infringement action?

The fact finder for a patent infringement action is typically a single judge. No jury trials are held in the Federal Court. However, in some circumstances, it may be possible to request a jury trial in a provincial court.

6.11 Does the fact finder change based on venue?

Whether a patent infringement action in Canada is heard in the Federal Court – where jury trials are not possible – or a provincial court, the fact finder is typically a single judge. However, in some circumstances, it may be possible to request a jury trial in a provincial court. Since most patent infringement actions are heard in the Federal Court, Federal Court judges tend to have more experience with patent matters.

6.11 Does the fact finder change based on venue?

No.

6.12 What are the steps leading up to a trial?

The steps in an action are:

  • exchange of pleadings;
  • exchange of documentary productions;
  • examinations for discovery of the parties and the inventor(s) named in the patent(s) in suit;
  • exchange of expert reports;
  • pre-trial conference;
  • trial management conference; and
  • trial.

6.12 What are the steps leading up to a trial?

In both the Federal Court and provincial courts, the steps leading up to trial include the following:

  • Pleadings: The plaintiff files and serves a statement of claim (or notice of civil claim), the defendant files and serves a statement of defence (or response to civil claim) and the plaintiff may file and serve a reply.
  • Document discovery: The parties exchange copies of documents related to the proceedings.
  • Oral discovery: The parties each have an opportunity to examine a representative of the opposing party.
  • Exchange of expert reports: Parties may hire experts to prepare reports on various topics (eg, quantum of damages). These reports are exchanged prior to trial.

6.13 What remedies are available for patent infringement?

A plaintiff may be awarded financial damages. Damages are intended to compensate a patent owner for losses incurred due to infringement. Damages are typically measured as the claimant's lost profits from lost sales as a result of the infringement or a reasonable royalty for use of the patented invention by the defendant. Pre-judgment and post-judgment interest on damages is also available.

In some cases, a court may allow a plaintiff to elect for an accounting of profits instead of damages. An accounting of profits aims to disgorge the profits earned by the infringing party through its infringing actions.

The Patent Act provides that a patent owner is also entitled to reasonable compensation for any damages sustained as a result of acts that occurred between publication of the patent application and grant of the patent that would have constituted an infringement had the patent been granted. The courts have held that reasonable compensation is similar to a reasonable royalty.

Punitive damages may be awarded to a plaintiff in exceptional cases of high-handed, malicious, arbitrary or highly reprehensible misconduct by the defendant that represents a marked departure from ordinary standards of decent behaviour.

Typically, a court will grant a permanent injunction to restrain further use, manufacture or sale of the infringing product.

A successful plaintiff may be awarded an order that all infringing products in the possession of the defendant be destroyed or delivered to the plaintiff.

6.13 What remedies are available for patent infringement?

In most cases the trial judge will award a successful patentee its election between damages and infringer's profits. The trial judge, however, has wide-ranging discretion when it comes to deciding whether to grant the patentee the right to elect to recover infringer's profits instead of damages; it is not automatic that the patentee will be granted such an election. In addition to remedies for any post-grant acts of infringement, a successful patentee is entitled to ‘reasonable compensation' for acts that occurred between publication of its patent application and issuance of its patent that would have constituted infringement of the patent had the patent been issued at the time of such acts. In addition to the foregoing financial remedies, a court will in most cases grant an injunction prohibiting further acts of infringement until expiry of the patent. The court can also grant other remedies such as destruction or delivery up of infringing products.

6.14 Is an appeal available and what are the grounds to appeal?

Yes, the losing party can file an appeal as of right. On appeal, it can argue that some or all of the trial judge's judgment should be overturned on the basis that the judge committed errors of law, fact or mixed fact and law that justify the intervention of the appellate court.

6.14 Is an appeal available and what are the grounds to appeal?

Appeals from the Federal Court are available as of right to the Federal Court of Appeal. Appeals from the Federal Court of Appeal are heard by the Supreme Court of Canada, but only with the leave of the Supreme Court.

Appeals from the provincial superior courts are available generally as of right to the courts of appeal of the provinces, although leave to appeal is sometimes required to appeal interlocutory orders. Appeals from the provincial courts of appeal are also heard by the Supreme Court of Canada, but only with the leave of the Supreme Court.

The grounds of appeal include where a judge has made:

  • an error of fact (eg, the judge misinterpreted how an allegedly infringing product functions);
  • an error of law (eg, the judge erred in construing a claim); or
  • an error of mixed fact and law (eg, the judge erred in determining whether the allegedly infringing product infringes a claim).

7 Discovery

7.1 Is discovery available during litigation?

Yes, discovery is available during patent infringement litigation in the Federal Court.

The specific rules regarding discovery differ as between the various courts with jurisdiction to hear patent infringement cases in Canada. Since most patent infringement litigation in Canada is in the Federal Court, the discussion that follows in this section relates to discovery in the Federal Court, which is governed by the Federal Courts Rules.

7.1 Is discovery available during litigation?

Yes.

7.2 What kinds of discovery are available?

Each party to litigation must produce documents that are in its possession, power or control and are potentially relevant to an issue in the litigation. Each party is entitled to examine for discovery a single representative of each party that is adverse in interest. Additionally, a party that is accused of infringement is entitled to examine any inventor(s) named in the asserted patent. Lastly, in certain circumstances, the court will grant leave for the examination of a non-party.

7.2 What kinds of discovery are available?

Discovery of documents and examinations for discovery are available in patent infringement litigation in the Federal Court.

Discovery of documents involves each party serving on the other an affidavit of documents which lists all relevant documents that are or have been in the party's possession, power or control, including those for which privilege is claimed, and also those the party believes are in the possession, power or control of a person which is not a party. In a simplified action, a list of documents may be served in lieu of an affidavit of documents. Any party must allow the other parties to inspect and, where practicable, to copy any non-privileged document that is referred to in the affidavit and is in the party's possession, power or control.

A party has the right to examine for discovery any adverse party. Where an assignee is a party to an action, the assignor may also be examined for discovery. This permits examination for discovery of the inventors named on a patent in suit in a patent infringement action where the inventors are assignors.

Under certain conditions, the Federal Court may order document production from a person not party to the action and may permit a party to an action to examine for discovery any person not party to the action. Inspection of property and experimental testing on or with property and requests for admissions are also available.

7.3 Are there any limitations to the amount of discovery allowed?

The Federal Court may, on motion, relieve a party from production for inspection of any document having regard to the issues in the case and the order in which they are likely to be resolved, and whether it would be unduly onerous to require the person to produce the document.

Except with leave of the court, a party may examine for discovery any adverse party only once. On motion, the court may limit an examination for discovery that it considers to be oppressive, vexatious or unnecessary. Generally, examinations for discovery may be conducted orally or in writing; but in simplified actions, examinations for discovery must be conducted in writing and shall not exceed 50 questions.

Under a practice notice (24 June 2015) relating to increased proportionality in complex litigation before the court, unless the parties agree or the court orders otherwise, the length of oral discovery will be limited based on the number of days fixed or estimated for trial (eg, one day of oral discovery per party for a trial of one week or less; two days per party for a trial of one to two weeks; three days per party for a trial of three to four weeks; four days per party for a trial of 5-plus weeks, with any follow-up discovery limited to one day per party). The court may, in its discretion, allow exemptions to these limits based on special circumstances.

7.3 Are there any limitations to the amount of discovery allowed?

Yes. Canadian courts apply the principle of proportionality to discovery such that the potential relevance of a document or line of inquiry on an examination is weighed against the effort involved in responding to the request.

8 Claim construction

8.1 When during a patent infringement action are claim terms defined by the tribunal?

Although claim construction is usually the subject of expert reports delivered by the parties prior to trial and is also addressed in the testimony of experts given at trial, in most cases the issue of claim construction is not determined until the trial judge releases his or her reasons for judgment after trial.

8.1 When during a patent infringement action are claim terms defined by the tribunal?

Claims construction is antecedent to consideration of both validity and infringement issues. Generally, claims construction is done by the court in infringement proceedings at trial or on a motion for summary judgment when the court finds the case suitable for disposition on a summary basis, and not in a preliminary hearing dedicated solely to claims construction.

8.2 What is the legal standard used to define claim terms?

The meaning of claim terms is determined in accordance with principles of purposive construction: the claims language must read in an informed and purposive way (Free World Trust v Électro Santé Inc, 2000 SCC 66). On such a purposive construction, the claims language will show that some elements are essential, while others are non-essential. Claim elements are presumed to be essential and the party alleging that an element is non-essential bears the onus of so establishing.

The determination of whether elements of a claim are essential or non-essential is made on the basis of the common knowledge of the worker skilled in the art to which the patent relates, as of the date the patent is published. An element is essential if it is required for the invention to work as intended. An element is also essential if that is the inventor's intent, as expressed in or inferred from the claims, regardless of the element's practical effect on the working of the invention. An element is non-essential if it was obvious to the skilled reader at the relevant time that the element could be substituted or omitted without affecting the working of the invention.

While the claim language is paramount, the context of the specification as a whole is also taken into account.

8.2 What is the legal standard used to define claim terms?

The trial judge determines the meaning of claim terms based on the preponderance of evidence. Construction is to be determined as of the publication date of the patent (ie, the date when the patent application was laid open for public inspection). Claim language must be read in an informed and purposive way. Construction is objective, in that the words chosen by the inventor will be read in the sense that the inventor is presumed to have intended, and in a way that is sympathetic to accomplishment of the inventor's purpose expressed or implicit in the text of the claims. The public is entitled to rely on the words used, provided that those words are interpreted fairly and knowledgeably.

8.3 What evidence does the tribunal consider in defining claim terms?

In most cases each party will submit evidence at trial from one or more experts as to the meaning that should be ascribed to terms in a claim. Although claims are to be construed in light of the entire specification, recourse to the specification is unnecessary where words in a claim are plain and unambiguous. It is not permissible to use the prosecution history in order to construe a claim.

8.3 What evidence does the tribunal consider in defining claim terms?

File wrapper: Historically, patent claim construction was based on the patent specification itself without resort to extrinsic evidence. However, the Patent Act now explicitly permits communications between the patent owner and the Canadian Intellectual Property Office to be admitted into evidence to rebut representations made by the patent owner in a proceeding relating to claim construction. Other extrinsic evidence, such as other patents or inventor testimony, continues to be generally inadmissible when construing patent claims.

Expert witnesses: Patent construction is a matter of law for the judge. Expert evidence is necessary only where the meaning of a term is not apparent based on a reading of the patent specification.

Claim terms are to be interpreted from the perspective of a person of ordinary skill in the art. The testimony of expert witnesses is often used to help establish common knowledge of persons skilled in the relevant art at the relevant time and inform the meaning of claim terms.

Experts should be sufficiently knowledgeable of the art to which the patent relates to understand the nature and description of the invention on a technical level.

Specification: Where ambiguity exists in the language of the claims, recourse to the disclosure portion of the specification is permissible.

Other claims: A limitation in a dependent claim can be used to evidence that the corresponding independent claim need not have this feature, as otherwise the dependent claim would have been redundant.

9 Remedies

9.1 Are injunctions available?

The practice and law with regard to remedies may differ as between various Canadian courts with jurisdiction to hear patent infringement cases. The following discussion relates to remedies in the Federal Court, where most patent infringement litigation is commenced.

Yes. Permanent injunctions, interlocutory injunctions and interim injunctions are available in patent infringement cases in the Federal Court.

A permanent injunction may be granted to a successful plaintiff after trial, which will restrain the defendant from continuing to infringe the patent.

An interlocutory injunction is made after the litigation has been started and restrains the defendant from committing certain acts while the litigation is pending.

An interim injunction is made after the litigation has started and before the trial, but usually applies only for a short and defined period of time. Under the Federal Courts Rules, a judge may grant an interim injunction on an ex parte basis for up to 14 days, on certain conditions, although this may be extended on motion.

Other types of injunctions are also available, such as:

  • Mareva injunctions, which freeze assets to avoid the risk that the defendant may move or otherwise dispose of assets prior to judgment; and
  • quia timet injunctions, to restrain acts which have not yet occurred.

The Federal Court may also grant:

  • Anton Piller orders, which are in the nature of a civil search warrant that allows a plaintiff's representatives to attend another's premises and to search for and seize documents and things pertinent to the litigation; and
  • Norwich orders, which may be used to compel a third party to disclose information or documents in its possession.

9.1 Are injunctions available?

Yes.

9.2 What is the standard to obtain an injunction?

In most cases, if the trial judge finds a patent to be valid and infringed, the judge will also grant a permanent injunction restraining the defendant from infringing the patent until its expiry. A patentee which seeks an interlocutory injunction prohibiting allegedly infringing acts pending trial must satisfy the following three-part test:

  • the existence of a serious issued to be tried;
  • that the patentee will suffer irreparable harm if the injunction is not granted; and
  • that the balance of convenience favours the granting of the injunction.

However, it is rare for a plaintiff to seek an interlocutory injunction in a patent infringement action, since it is very difficult to establish the irreparable harm criterion.

9.2 What is the standard to obtain an injunction?

Injunctions are equitable remedies. The Federal Court has discretion as to whether to grant an injunction in any case.

9.3 Are damages available?

Once the plaintiff establishes infringement (and assuming that the patent is held to be valid, if validity is at issue), the Federal Court may award damages or an accounting of profits.

9.3 Are damages available?

Yes.

9.4 What types of damages are available?

A successful patentee will typically be awarded:

  • reasonable compensation for infringing acts between publication of its patent application and issuance of its patent; and
  • its election of damages for post-issuance activities or infringer's profits.

9.4 What types of damages are available?

Damages are intended to restore the plaintiff to the position it would have been in if the infringement had never occurred. Various measures of damages are available depending on the circumstances of a case, such as the plaintiff's lost profits (eg, if the plaintiff can show that it would have been able to make its own sales had it not been for the defendant's infringing sales) and reasonable royalties (eg, if the plaintiff cannot show that it would have made its own sales).

An accounting of profits is an equitable remedy which is measured based on the defendant's profits and may be granted at the court's discretion as an alternative to damages, if elected by the plaintiff.

In addition to damages or an accounting of profits for a defendant's post-grant activities, a plaintiff may seek reasonable compensation for pre-grant activities. In particular, a person is liable to pay reasonable compensation for any damage sustained by the patent owner or any persons claiming under the patent owner by reason of acts of the person during the period of time from when the patent application became open to public inspection and before it was granted, which would have constituted infringement of the patent if it had been granted on the day the application became open to public inspection (Section 55(2) of the Patent Act).

9.5 What is the standard to obtain certain types of injunctions?

To be awarded a permanent injunction in a patent infringement case, a plaintiff must establish its legal rights (eg, that the patent has been infringed and that the patent is valid, where validity is challenged). The court must also be satisfied that a permanent injunction is an appropriate remedy. The court will frequently grant a permanent injunction in a patent infringement case if a plaintiff succeeds on the issues of infringement and validity, but this is not guaranteed.

Three criteria must be demonstrated by a plaintiff before the court will grant either an interlocutory or interim injunction:

  • There is a serious question to be tried;
  • Not granting the injunction would result in irreparable harm to the plaintiff; and
  • The balance of convenience favours granting an injunction (RJR-Macdonald Inc v Canada (Attorney General), [1994] 1 SCR 311).

Historically, it has proven difficult to obtain interlocutory injunctions in patent infringement cases in the Federal Court, which has held that the threshold of establishing irreparable harm is very high.

The Federal Courts Rules further provide that unless the judge orders otherwise, a party seeking an interlocutory injunction shall undertake to abide by any order concerning damages caused by the granting or extension of the injunction.

9.5 What is the standard to obtain certain types of injunctions?

It is virtually automatic for a trial judge to award a permanent injunction where a patent is held to be valid and infringed at trial. The test for an interlocutory injunction pending trial is a three-part test that is difficult to meet.

9.6 Is it possible to increase or multiply damages due to a party's actions?

If the trial judge is of the view that the infringer's conduct warrants a remedy beyond the standard award of the patentee's damages or the infringer's profits, the judge may also make an award of punitive damages.

9.6 Is it possible to increase or multiply damages due to a party's actions?

The Federal Court does not calculate a plaintiff's damages and then multiply such damages by some factor or multiplier in order to penalise a defendant for its actions.

However, the Federal Court has discretion to award punitive damages in circumstances of high-handed, malicious, arbitrary or highly reprehensible misconduct by a defendant. In one patent infringement case, the Federal Court of Appeal upheld an award of punitive damages and noted that "[w]here a person infringes a patent which it knows to be valid, appropriates the invention as its own, and markets it as its own knowing this to be untrue, punitive damages may be awarded when an accounting for profits or compensatory damages would be inadequate to achieve the objectives of retribution, deterrence and denunciation of such conduct" (Eurocopter v Bell Helicopter Textron Canada Limitée, 2013 FCA 219).

9.7 Are sanctions available?

Yes, sanctions are available.

9.7 Are sanctions available?

Yes.

9.8 What kinds of sanctions are available?

The most common type of sanction is a finding of contempt of court if the infringer disobeys an interlocutory or permanent injunction by continuing its infringing activities.

9.8 What kinds of sanctions are available?

In addition to damages or an accounting of profits, the court may order the delivery up or destruction of all infringing products. This remedy requires that infringing products in the possession or control of the defendant be delivered to the plaintiff or destroyed.

9.9 Can a party obtain attorneys' fees?

At the conclusion of a patent infringement case, the court will usually order the unsuccessful party to pay the costs of the successful party. Costs are meant to provide some compensation to the successful party for the expense of conducting the litigation.

9.9 Can a party obtain attorneys' fees?

It is typical for the court to award a successful party the recovery of at least a portion of its legal fees and disbursements.

9.10 What is the standard to obtain attorneys' fees?

As noted above, it is typical for the court to award a successful party at least a portion of its legal fees and disbursements. The amount of the recovery can vary depending on factors such as:

  • the complexity of the case;
  • any settlement offers that were exchanged;
  • the reasonableness of the fees and disbursements; and
  • any conduct of the parties during the litigation process.

9.10 What is the standard to obtain attorneys' fees?

The Federal Court has discretion not only to award costs, but also to determine the amount of costs, and different approaches are available in this regard.

For example, costs may be calculated by reference to a tariff to the Federal Courts Rules, which involves including steps listed in the tariff where those steps were taken in the lawsuit and selecting an appropriate scale and amount of units depending on the complexity of the case, among other factors. Under this approach, in addition to the amounts selected from the tariff, the successful party may be awarded as part of its costs some or all of its disbursements.

As another approach, the court may award lump-sum costs instead of determining costs by reference to the tariff. In doing so, the court may fix the costs as some percentage of the party's legal fees actually incurred.

The court has discretion to award costs on a ‘solicitor-client' basis, where a party is awarded full recovery for its actual fees incurred. Solicitor-client costs can be awarded, for example where a party has engaged in reprehensible, scandalous or outrageous conduct. However, solicitor-client costs are awarded infrequently.

10 Licensing

10.1 What patent rights can a party obtain through a licence?

A licensee can obtain any or all of the exclusive rights that a patent owner has under a patent. A patent provides its owner with the exclusive right, privilege and liberty of making, constructing, using and selling the claimed invention. A patent owner can license any or all of these rights and the grant of the rights can be exclusive, non-exclusive or sole.

An exclusive licence grants the rights to the licensee to the exclusion of all others, including the patent owner.

A non-exclusive licence grants the rights to the licensee, but does not preclude the patent owner from granting similar licences to others.

A sole licence is a type of a non-exclusive licence where a sole licence grants the rights to the licensee to the exclusion of third parties, but does not prevent the patent owner from practising the claimed invention.

10.1 What patent rights can a party obtain through a licence?

A patentee can license any of its rights under a patent to a third party.

10.2 What limits can a patent owner impose on a licence?

As a general rule, a patentee is free to license or not license its patent as it so chooses. In some circumstances, however, a patentee's licensing activities may have consequences under competition law. For example, if a patentee's refusal to grant a licence is coupled with activity that goes beyond the scope of its patent rights, then there may be a violation of competition laws.

10.2 What limits can a patent owner impose on a licence?

A patent owner can limit a licence in many ways. For example, a licence may be limited by:

  • territory (eg, a particular province or territory in Canada);
  • types of rights (eg, the right to make, construct, use or sell);
  • duration (eg, a particular licence duration that is shorter than the life of a patent); and
  • field of use (eg, a product category, a technology application, or whether the use constitutes commercial exploitation).

Further, a patent owner may impose a sub-licensing limit so that the licensee cannot sub-license to a third party.

11 Antitrust

11.1 Are there any limits on patent protection due to antitrust laws?

The Competition Bureau generally considers patent licensing as pro-competitive because patent licensing facilitates the broader use of valuable patent rights by additional parties. However, if the terms of a licence serve to create, enhance or maintain the market power of either the licensor or the licensee, antitrust issues may arise and competition law counsel should be consulted. For more information, see the Intellectual Property Enforcement Guidelines published by the Competition Bureau: www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/eng/04401.html.

11.1 Are there any limits on patent protection due to antitrust laws?

Yes. For example, antitrust laws may be invoked in the case of some patent infringement settlements. As a general rule, where a patent infringement claim is legitimate and well founded, antitrust laws will respect the process for resolving the claim, including the settlement of such claim. If, however, an infringement claim is a sham that is designed to stop another entity from engaging in competition, or if the settlement terms go beyond the scope of the patent in duration or scope, then the patentee may be held to have engaged in anti-competitive behaviour contrary to the Competition Act.

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.