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Patents - Damages. Dnow Canada ULC v. Grenke Estate
In Dnow Canada ULC v. Grenke Estate (Fed CA, 2020) the Federal Court of Appeal set out some basic principles that apply to damage calculation in a patent infringement context (as opposed to remedy assessed by an accounting):[18] When the owner of a patent or anyone claiming under the patent (plaintiff), seeks damages for infringement of the patent, the following general principles apply:. The purpose of an award of damages is to compensate the plaintiff for any and all losses suffered by the plaintiff as a result of the infringement.
. When assessing damages, the plaintiff is entitled to the profits on the sales of patented wares it could and would have made but for the presence of the infringing product in the market.
. For those sales made by the defendant that the plaintiff would or could not have made, the plaintiff is entitled to a reasonable royalty based on the defendant’s sales.
. When considering what sales a plaintiff could and would have made but for the presence of the infringing product, the Court is to consider a theoretical and hypothetical "“but for”" world. What would have happened in that hypothetical world must be established on the basis of admissible evidence and any permissible inferences arising from that evidence (Pfizer Canada Inc. v. Teva Canada Limited, 2016 FCA 161, 483 N.R. 275, at paragraph 46).
. To "“prevent the hypothetical from lapsing into pure speculation”" evidence is required of both the nature of the market and the likely outcomes with infringement factored out of the market (Apotex Inc. v. Merck & Co., Inc., 2015 FCA 171, [2016] 2 F.C.R. 202, at paragraph 55).
. The task of constructing the hypothetical world for the purpose of assessing compensatory damages is a factual inquiry requiring "“robust common sense”" (Apotex, paragraph 45, Pfizer, paragraph 55, each case citing Clements v. Clements, 2012 SCC 32, [2012] 2 S.C.R. 181, at paragraphs 8 and 9).
. Because of its hypothetical nature, the "“but for”" world is not a world where "“the loss is capable of correct appreciation in stated figures.”" (Teva Canada Limited v. Janssen Inc., 2018 FCA 33, 420 D.L.R. (4th) 493, at paragraph 36, citing Watson, Laidlaw & Co. Ltd. v. Pott, Cassels, and Williamson (1914), 31 R.P.C. 104, at pages 117 to 118).
. The plaintiff bears the burden of proving the hypothetical world on the balance of probabilities (Pfizer, paragraph 54). [19] On an appeal to this Court from a judgment of the Federal Court assessing damages for patent infringement, it is inappropriate for this Court to retry the case or substitute its view for the Federal Court’s view of the evidence. As stated by this Court in Pfizer, at paragraph 69:It must be remembered that judges’ reasons—particularly after long complex trials involving many issues—are often the product of synthesis and distillation. When it comes time to draft reasons in a complex case, trial judges “are not trying to draft an encyclopedia memorializing every last [relevant] morsel.” Rather, they are trying to “distill and synthesize masses of information, separating the wheat from the chaff,” in the end “expressing only the most important…findings and justifications for them”: Canada v. South Yukon Forest Corporation, 2012 FCA 165, 431 N.R. 286 at para. 50. [20] Accordingly, reasons must be "“read as a whole, in the context of the evidence, the issues and the arguments at trial, together with ‘an appreciation of the purposes or functions for which they are delivered’”" (R. v. Villaroman, 2016 SCC 33, [2016] 1 S.C.R. 1000, at paragraph 15, citing R. v. Laboucan, 2010 SCC 12, [2010] 1 S.C.R. 397, at paragraph 16, citing R. v. R.E.M., 2008 SCC 51, [2008] 3 S.C.R. 3, at paragraph 16).
[21] Reasons must, however, provide a basis for meaningful appellate review. This requires that the decision and the basis of the decision be intelligible, or capable of being made out on a fair reading of the reasons. A logical connection between the decision and the basis for the decision must be apparent. To determine whether a logical connection between the decision and the basis for the decision is established, a reviewing court is to look at "“the evidence, the submissions of counsel and the history of the trial to determine the ‘live’ issues as they emerged during the trial.”" (R v. R.E.M., at paragraph 35).
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