1. PATC Section 3 – Infringement
Remedies for Infringement

2. Remedies Standing to Sue s. 55 – Infringer is liable to:
patentee and persons claiming
under the patentee
“person claiming under patentee” is given
a broad meaning
[Apotex Inc. v. Sanofi-Aventis Canada Inc., FC 1486]

3. Remedies Standing to Sue “person claiming under patentee” includes
licensees (exclusive and non-exclusive)
[American Cyanamid Co. v. Novopharm Ltd.,
[1972 F.C. 739; Domco Industries Ltd. v.
Armstrong Cork Canada Ltd., [1982] 1 S.C.R. 907]

4. Remedies Standing to Sue Persons who have acquired interest by
way of assignment from inventors
[ Alberta Inc. v. Q'Max Solutions Inc., FCA 241]

5. Remedies Standing to Sue Licensees enjoy benefit of monopoly
[Armstrong Cork Canada Ltd. v.
Domco Industries Ltd., 66 C.P.R. (2d) 46]
Licensees may sue on their own, where
patentee declines or neglects
to enforce the patent

6. Remedies Standing to Sue Person can claim under patentee so long
as there is some factual basis for doing so
that is proven – consent or corporate
relationship alone will not suffice
[Signalisation de Montréal Inc. v. Services
de Béton Universels Ltée; 46 C.P.R. (3d) 199;
Laboratoires Servier v. Apotex Inc.,
2008 FC 825]

7. Remedies Standing to Sue But de facto corporate control of patent
may suffice if corporate structure is explained
and control is demonstrated – fact dependent
Astrazeneca Canada Inc et al v Apotex Inc,
2015 FC 322

8. Monetary Remedies: Election
Patentee plaintiff can choose (elect):
Recover damages OR
Accounting of defendant’s profits
BUT
*not both*

9. Monetary Remedies: Election
Damages:
Restore the plaintiff to a
position that it would have occupied had
there been no infringement
Accounting of Profits:
Restore the defendant to a

10. Damages entitled to recover damages for infringement
Patentee (and persons claiming under) are
entitled to recover damages for infringement
Section 55 of Patent Act :
A person who infringes a patent is
liable to the patentee and to all persons
claiming under the patentee for
all damage sustained by the patentee or
by any such person, after the grant of
the patent, by reason of the infringement

11. General Damages Restitutionary Purpose Restore the plaintiff to a
position that it would have occupied had
there been no infringement
[Lubrizol Corp. v Imperial Oil Ltd.,
67 C.P.R. (3d) 1]

12. Damages General Damages Plaintiff recovers losses
directly caused by infringement
(i.e. lost sales and (its) loss of profits
caused by price competition
with defendant)
[Allied Signal Inc. v Du Pont Canada Inc.,
78 C.P.R. (3d) 129]

13. Damages Section 55 imposes requirement of
causation - “all damage sustained”…
“by reason of the infringement…”
Permissible recovery is limited to
loss arising from act(s) of
infringement – no more, no less

14. Damages [41] The purpose of an award of damages is to
compensate a patentee (or any entity claiming under
the patentee) who has suffered loss as a result of
patent infringement. The concept of compensation
rejects both under-compensation and
over-compensation.
[Apotex Inc. v. Merck & Co., Inc., 2015 FCA 171]

15. Damages Patent Act strikes a balance Encourages Research & Development
*And*
Broader economic activity (free markets)

16. Damages Under-compensation Overcompensation Will discourage R& D
chills potential competition to the extent that a
potential infringer is uncertain about the scope
and validity of a patent.

17. Damages – “Perfect Compensation”
“The balance at the heart of the Act
requires perfect compensation.“
[Apotex Inc. v. Merck & Co., Inc., 2015 FCA 171]

18. Damages
“Goldilocks Principle”

19. Damages Objective is to achieve “perfect compensation”
Other remedies can be used to deal with
incentiving infringement
[Apotex Inc. v. Merck & Co., Inc., 2015 FCA 171;
also see Eli Lilly and Company v. Apotex Inc.,
2014 FC 1254 ]

20. Damages Look to causation – s.55
Create a “but for” world - test for causation
Plaintiff must prove that “but for”
defendant’s actions it would not have
suffered loss

21. Damages Non-infringing alternatives (NIA) are relevant
Recent case law:
Tilts away from UK approach
[see Eli Lilly and Company v.
Apotex Inc., 2014 FC 1254]
Tilts toward U.S. law (recognizes NIA)
[Apotex Inc. v. Merck & Co., Inc., 2015 FCA 171]

22. Damages If NIA, patent confers market power, not a complete monopoly
[49]           Put another way, in cases where, in the “but for”
world, the infringer could and would have made and sold a
non-infringing alternative, these sales may well reduce the
patent owner’s sales. Awarding the patentee full damages
for lost profits in every case will, therefore,
sometimes over-compensate the patentee.
[Apotex Inc. v. Merck & Co., Inc., 2015 FCA 171]

23. Damages “Perfect Compensation” asks: What NIA (if any) could have and
would have been used in the market?
Would lawful competition have reduced
patentee’s sales? To what extent?

24. Damages Defendant has burden to prove “factual relevance” of NIA:
Is the NIA a true substitute (real alternative)?
Is the NIA economically viable (real alternative)?
Could the infringer have used the NIA ?
(i.e. adequate supply of NIA product)
4. Would the infringer have used the NIA?

25. Damages The “real world” informs construction of the “but for” world.
“Real world” conduct is “very important” to deciding
what would have happened in the “but for” world.
Factual findings on liability are relevant when
constructing the “but for” world.
“Brazen” infringement in the “real world” makes it
very difficult to prove that NIA would have been used in the
“but for” world

26. Other Types of Damages Aggravated Damages
Compensatory damages over and
above “general damages” caused by
defendant’s high-handed behaviour

27. Other Types of Damages Punitive Damages Not compensatory
Intended to punish defendant for
malicious/outrageous conduct

28. Other Types of Damages Punitive Damages Serve as deterrent
Very rarely awarded
[Lubrizol Corp. v Imperial Oil Ltd.,
67 C.P.R. (3d) 1; Eurocopter v. Bell Helicopter
Textron Canada Ltée, 2012 FC 113]

29. Accounting of Profits Equitable Remedy Awarded at court’s discretion,
not as of right
No presumption in favour of plaintiff

30. Accounting of Profits [ADIR v. Apotex Inc., 2015 FC 721]
Where granted, it requires the defendant
to disgorge (pay to plaintiff) the profits
it has made from the infringing activities
[143]      The objective of an accounting of profits is to restore the
wrongdoer in the position it would have been in, had there been
no infringement. Therefore, an accounting of profits must include
the indirect profits or return made by the infringer on the profits
earned from the sale of the infringing product.
This is to prevent the unjust enrichment of the infringer who
“retains and thus is deemed to benefit from, the profits gained
from his misappropriation” (Teledyne, above at p. 226).
[ADIR v. Apotex Inc., 2015 FC 721]

31. Accounting of Profits Purpose: 1. Restitutionary
(as opposed to compensatory)
2. Deterrent
[i.e.Varco Canada Limited v. Pason Systems Corp., 2013 FC 750]

32. Accounting of Profits Factors (against) may include
- complexity & length of proceeding
- excessive delay
- misconduct
[Merck & Co. v. Apotex, 2006 FCA 323]

33. Accounting of Profits If accounting granted,
patentee only entitled to the portion of
infringer's profit which is causally
attributable to the invention.
[Monsanto Canada Inc. v. Rivett, 2010 FCA 207]
But existence of NIA is not relevant
[see ADIR v. Apotex Inc., 2015 FC 721]

34. Accounting of Profits
[118] With respect, I am of the view that the Supreme Court did not make new law in Schmeiser, nor did it suggest that in an accounting of profits, courts are bound to always consider NIA products, options or scenarios, as fanciful as they may be. In my view, the Supreme Court simply reiterated that “the inventor is only entitled to that portion of the infringer’s profit which is causally attributable to the invention” (Schmeiser, at para 101)…. [119] In that search for causation, courts have developed a variety of different formulas or used different terminologies, depending of the facts of each case, to simply decipher the use of the invention by the infringer and the extent in which this use contributed to the infringer’s gross revenues or profits.

35. Accounting of Profits
…Tracing causation is a factual endeavour. In some cases, it could almost be as complex as the invention, and it will require factual or expert evidence. In other cases, as the one before me, there is no need for a very sophisticated analysis of the causal relationship between the infringement and the infringer’s profits as the defendants merely sold perindopril, the compound covered by the 196 Patent…. [121] The defendants have asked me to deduct from their profits to be disgorged the profits that they would have made had they manufactured all of the perindopril API and finished tablet dosage that they export during the relevant period from abroad….

36. Accounting of Profits
….To accept the defendants’ position would be to provide them a perfect shelter against the consequences of any future patent infringement in Canada. Now that the Apotex group of companies own important manufacturing facilities [abroad] they would never have to disgorge any profits from infringing a Canadian patent, as they would only have to prove that their affiliates had the capacity to manufacture abroad and that they would have been willing to do so in an effort to advance a NIA defence. We know that manufacturing costs are lower [in other countries] Therefore, profits from manufacturing abroad would most likely exceed profits From manufacturing in Canada in any given scenario. These scenarios are exactly the “catch me if you can” situation contemplated by Zinn J in Rivett FC. [ADIR v. Apotex Inc., 2015 FC 721]

37. Accounting of Profits 1. Is there a causal connection
between the profits made and
the infringement?
If there is none, then there are no profits
that require an accounting. 2. If there is a causal connection,
then what were the profits made by the
infringer as a result of the infringement?
(“Gross Profits of Infringement”)

38. Accounting of Profits
3. Is there a non-infringing option that the infringer could have used? 4. If there is no non-infringing option, then the Gross Profits of Infringement are to be paid to the patentee. 5. If there is a non-infringing option, then what profit would the infringer have made, had he used it? (“Gross Profits of Non-Infringement”)

39. Accounting of Profits
6. Where there was a non-infringing option available, the amount to be paid to the patentee is: Gross Profits of Infringement minus Gross Profits of Non-Infringement. This is the profit directly attributable to and resulting from infringement [Monsanto Canada Inc. v. Rivett, 2010 FCA 207]

40. Pre-Grant Infringement
Patentee may recover for “infringing acts”
occurring after patent is laid open
but before issuance (s. 55(2))

41. Pre-Grant Infringement
Remedy is confined to
“reasonable compensation” NOT damages
“Reasonable compensation” means royalty
at rate that would result from negotiations
between willing licensor and willing licensee
[Jay-Lor International Inc. v.
Penta Farm Systems Ltd., 2007 FC 358;
Bauer Hockey Corp. v. Easton Sports Canada
Inc., 2010 FC 361]

42. Injunction Court Order that restrains defendant from
making, using, selling claimed subject matter
after trial of infringement action
Section 57, Patent Act
Court has broad jurisdiction to issue injunction
and set terms (“ … as Court sees fit…”)

43. Interlocutory Remedies
Interim/Interlocutory Injunction
Injunction that restrains infringement
between start of infringement
action and trial
Difficult to obtain

44. Interlocutory Remedies
Interlocutory Injunction
Serious question to be tried
Irreparable harm to plaintiff if not granted
(harm that is so bad, money damages
will not compensate)
Balance of convenience
[RJR Macdonald Inc. v Canada, [1994] 1 S.C.R. 311]

45. Delivery Up Equitable remedy Defendant required to account for
and hand over (deliver up) all infringing items
in his possession
Rationale: infringing items
are “property” of plaintiff