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Patents - Infringement Remedies (2). Munchkin, Inc. v. Angelcare Canada Inc.
In Munchkin, Inc. v. Angelcare Canada Inc. (Fed CA, 2024) the Federal Court of Appeal considers whether to 'remit or decide' as a remedy in patent infringement:(1) Whether to decide the outstanding infringement issues
[88] Both parties refer to this Court’s decision in Sandhu Singh Hamdard Trust v. Navsun Holdings Ltd., 2019 FCA 295, 169 C.P.R. (4th) 325 at para. 60 (Sandhu Singh Hamdard Trust), for the criteria to consider in determining whether this Court should decide the outstanding infringement issues:The factors relevant in determining whether to decide rather than remit include whether the case is factually voluminous and factually complex, whether the case involves documentary evidence or live evidence and assessments of credibility, whether the result is uncertain and factually suffused, whether the parties have made specific submissions on the issues that remain to be decided, and whether the further delay associated with remitting the matter would be contrary to the interests of justice: Pfizer Canada Inc. v. Teva Canada Limited, 2016 FCA 161 at para. 157, 400 D.L.R. (4th) 723, leave to appeal refused, [2017] 1 S.C.R. xviii; Canada v. Piot, 2019 FCA 53 at paras. 113-115, 124-128; Wells v. Newfoundland, 1999 CanLII 657 (SCC), [1999] 3 S.C.R. 199 at paras. 67-68, 177 D.L.R. (4th) 73. . Rovi Guides, Inc. v. Telus Corporation [injunctions]
In Rovi Guides, Inc. v. Telus Corporation (Fed CA, 2024) the Federal Court of Appeal dismissed a patent infringement appeal, here where the trial court "dismissed Rovi’s actions against the respondents, Bell Canada (Bell) and Telus Corporation, Telus Communications Inc., and Telus Communications Company (collectively, Telus) for patent infringement and granted the respondents’ counterclaims for declarations of invalidity and non‑infringement".
Here the court considers injunctions as a patent infringement remedy:[118] Beyond these errors, Rovi also argues that the Federal Court erred in its denial of an injunction. Rovi alleges that the Federal Court’s "“adoption of the U.S. approach”" in this case is a departure from longstanding principles around permanent injunctions in Canada which, it contends, are rarely denied a successful patentee, including those who licence their inventions in Canada.
[119] I agree with Rovi that permanent injunctions in Canada are rarely denied to a successful patentee if infringement is found. Rarely, however, is the operative word and implies that judges do have the discretion to do so in exceptional circumstances. There are a number of "“traditional concerns of equity”" that "“imbue many equitable remedies”", including the grant of mandatory injunctions: Jeffrey Berryman, The Law of Equitable Remedies, 3rd ed. (Irwin Law, 2023) at 286 [Berryman]. These concerns of equity translate into discretionary factors that may justify a court in depriving a plaintiff of an injunction, assuming the denial is not arbitrary and is done on a reasoned basis. Such factors include, but are not limited to, 1) delay, 2) unclean hands, 3) hardship, and 4) impossibility of performance: Berryman at 286-291.
[120] I also agree with Rovi that, prior to this decision, Canadian courts have not endorsed the American approach to permanent injunctions or any related principles derived from the eBay decision. In the U.S., as noted in eBay, to obtain a permanent injunction, a four-factor test requires a plaintiff to demonstrate the following: (1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardship between plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction.
[121] In light of the focus on the irreparable harm in the U.S. context, it is possible that a patentee who is merely seeking licencing revenues would not be considered to suffer irreparable harm without an injunction and could be adequately compensated by damages. Given this, although injunctions are often granted in response to patent infringement, whether a patentee practices the invention may have an important bearing on the analysis in the U.S: see generally Stacy Streur, "“The eBay Effect: Tougher Standards but Courts Return to the Prior Practice of Granting Injunctions for Patent Infringement”" (2009) 8(1) Northwestern Journal of Technology and Intellectual Property 67 for a discussion of how permanent injunctions have evolved since the eBay decision and how U.S. courts have understood irreparable harm in this context.
[122] However, in Canada, there is no separate requirement for irreparable harm nor an explicit requirement for balancing in the test for a permanent injunction as opposed to an interlocutory one. In Google Inc. v. Equustek Solutions Inc., 2017 SCC 34, [2017] S.C.R. 824, Justices Côté and Rowe, writing in dissent (on other grounds), stated "“[t]o obtain a permanent injunction, a party is required to establish: (1) its legal rights; (2) that damages are an inadequate remedy; and (3) that there is no impediment to the court's discretion to grant an injunction”": at para. 66, citing 1711811 Ontario Ltd. v. Buckley Insurance Brokers Ltd., 2014 ONCA 125, 371 D.L.R. (4th) 643 at paras. 74-80; Ian Spry, The Principles of Equitable Remedies, 9th ed. (Thomson Reuters, 2014) at 395 and 407-408.
[123] Aside from these jurisprudential differences, I also note that the focus of the eBay case is not on patent holdup. Although patent holdup was discussed by Justice Kennedy in his concurring opinion, the majority does not reference it at all. Instead, eBay is simply an example where the U.S. Supreme Court denied injunctive relief in a patent case.
[124] More importantly, even though an injunction is a discretionary remedy, it is generally accepted in this country that an injunction is the principal preventive remedy in patent law. The purpose of an injunction in this context is to prohibit an infringer from infringing the patent for the unexpired portion of the term of the patent: Donald H. MacOdrum, Fox on the Canadian Law of Patents, 5th ed. (Thomson Reuters, 2024, loose-leaf) at § 14:2; Berryman at 323, citing Roger Hughes & John Woodley, Hughes and Woodley on Patents, 2d ed. (Markham, ON: LexisNexis Butterworths, 2019, loose-leaf) at § 53; Andrew Shaughnessy & Robert H. Barrigar, Canadian Patent Act Annotated, 2d ed. (Toronto: Thomson Reuters Canada, 2022) at § 19:151.
[125] Indeed, in Valence Technology Inc. v. Phostech Lithium Inc., 2011 FC 174, 384 F.T.R. 162, aff’d 2011 FCA 237, 96 C.P.R. (4th) 207, Justice Gauthier found that in upholding the patent, "“the Court should refuse to grant a permanent injunction where there is a finding of infringement, only in very rare circumstances”": at para. 240. This was recently endorsed in three Federal Court decisions: see NCS Multistage Inc. v. Kobold Corporation, 2023 FC 1486, 204 C.P.R. (4th) 1 at para. 1658; Farmobile, LLC v. Farmers Edge Inc., 2022 FC 22, 189 C.P.R. (4th) 281 at para. 86 , aff’d 2022 FCA 116, 2022 A.C.W.S. 2398; Bombardier Recreational Products Inc. v. Arctic Cat, Inc., 2020 FC 946, 178 C.P.R. (4th) 355 at para. 37.
[126] Thus, absent circumstances that would render injunctive relief inequitable, a plaintiff can generally expect to receive injunctive relief in Canada where a valid patent has not expired and has been infringed. This includes situations where the patent is close to expiry.
[127] In addition, as with the remedy of an accounting of profits, the fact that a patentee licences its invention does not, in and of itself, disentitle a patentee to injunctive relief for the same reasons noted in Seedlings Life Science Ventures, LLC v. Pfizer Canada ULC, 2021 FCA 154, 339 A.C.W.S. (3d) 69. There Justice Locke wrote as follows at paragraph 79:I am particularly concerned about the potential effect of such a broadly defined principle on inventors who recognize that their specialty lies in inventing, and that production and marketing of their inventions are better left to different specialists. Such inventors will seek to license third parties to take their inventions to market as a matter of business efficiency. The broadly defined principle would force such inventors to choose between business efficiency and retaining a potential remedy for infringement of their patent rights. The value of a patent would therefore be reduced for specialist inventors. I see no reason to force such a choice. In my view, business efficiency should be encouraged. [128] In my view, the foregoing concerns apply equally to injunctive relief, which accordingly should not be denied merely because a patentee chooses to commercialize its patents by licencing them.
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