Intellectual Property Law

Following a remittal from the Federal Court of Appeal, the Federal Court reconsidered the appropriateness of an accounting of profits for patent infringement.

The Court denied the defendant's proposed overhead deductions because the financial records failed to establish a causal connection between the claimed overhead costs and the infringing Canadian sales, conflating them with US expenses.

The Court awarded the plaintiffs an accounting of profits in the amount of $593,362.21, plus compound pre-judgment interest and costs.

The appellant challenged only the monetary component of a summary judgment finding of copyright infringement, arguing that the profits award failed to account for expenses such as labour, taxes, and rent.

The court held that under s. 35(2) of the Copyright Act, the defendant bore the onus of proving any deductions from revenues earned through infringing sales.

Because no evidentiary foundation was provided for the claimed expenses before the motion judge, and further calculations were advanced for the first time on appeal, there was no basis for appellate intervention.

The appeal was dismissed and appeal costs were fixed at $5,000 inclusive.

The appellant employer appealed a trial judgment that dismissed its copyright claim under s. 13(3) of the Copyright Act over competing software secretly developed by a former employee.

The trial judge found the software was not created "in the course of employment" because the employee's actual responsibilities were limited to developing the employer's existing software, he was not directed to create new products, and the employer did not expend resources on the competing software's development.

The Court of Appeal upheld the decision, holding that the proper test under s. 13(3) focuses on the employee's actual assigned responsibilities, not the class of work the employer could have directed, and found no palpable and overriding error in the trial judge's factual findings.

The moving party sought leave under subsection 56(5) of the Trademarks Act to file new evidence in a pending appeal of a Registrar of Trademarks decision.

The Federal Court allowed the motion in part, permitting a portion of the Second Bauer Affidavit relating to website access data, as it was relevant and material to the Registrar's inference regarding use in Canada.

The remainder of the proposed evidence was refused for failing to meet the materiality requirement or for lack of explanation for the delay in filing.

During a trademark infringement trial, the Plaintiff sought leave under Rule 75 to amend the Joint Statement of Issues to correct an inadvertent clerical error that listed a trademark with a colour claim instead of one without a colour claim.

The Federal Court dismissed the motion, finding that despite the threshold requirement being met, the timing was improper and the amendment would unfairly broaden the case against the Defendant after the evidentiary phase and cross-examinations had concluded, thereby causing non-compensable prejudice and not serving the interests of justice.

The applicant appealed a Trademarks Opposition Board decision refusing registration of its FILTER DESIGN trademark on the ground that its features were dictated primarily by a utilitarian function.

The applicant sought leave to file new evidence under the amended subsection 56(5) of the Trademarks Act.

The Federal Court granted leave, finding the new evidence was material and provided relevant context that clarified statements relied upon by the Board.

Reviewing the matter de novo based on the new evidence, the Court found the positioning and shape of the diamond-shaped apertures were not dictated primarily by a utilitarian function.

The appeal was allowed and the Registrar was directed to register the trademark.

The Plaintiffs brought a motion for default judgment against the Defendant for trademark infringement involving aesthetic devices.

The Court found the Defendant in default and satisfied that infringement occurred under the Trademarks Act.

The Court awarded $25,000 in lump-sum damages and $6,207.60 in costs.

The defendants brought a motion under Rule 39.03 of the Rules of Civil Procedure seeking to compel the plaintiff to produce its Chief Executive Officer as a necessary witness for an interlocutory motion hearing.

The underlying motion concerns an order for inspection of a laptop under Rule 32.01.

The court dismissed the defendants' motion, finding that the evidence sought from the CEO was not relevant to the narrow issues to be determined on the Rule 32.01 motion and that allowing the examination would constitute an improper use of Rule 39.03 as a substitute for discovery and a means to litigate the underlying claim prematurely.

The applicants, five community futures organizations, sought the appointment of MNP Ltd. as receiver over Future Health Technologies Inc. (FHT) under section 243 of the Bankruptcy and Insolvency Act and section 101 of the Courts of Justice Act.

FHT provides technology and technical support for the Community Paramedicine Remote Patient Monitoring Program (CPRPM), which delivers free tele-home monitoring services to approximately 1,500 chronically ill patients in rural Ontario.

The respondent, 2804476 Ontario Inc., opposed the application, arguing the receivership was a scheme to seize control of disputed intellectual property.

The court found that FHT was insolvent, that the appointment of a receiver was necessary to preserve critical healthcare services, and that the applicants held valid secured debt.

The court appointed the receiver and granted a stay of proceedings in related litigation, while confirming that the receiver would not take possession of disputed intellectual property without further court order.

The defendants brought a motion seeking a partial sealing order in respect of designated confidential information they wished to rely upon for a jurisdiction motion.

The confidential information related to the defendants' corporate organization and structure, web crawling and fetching processes, and model training and inference processes.

The court applied the three-part test from Sherman Estate v. Donovan and Sierra Club of Canada v. Canada (Minister of Finance) to determine whether to grant the sealing order.

The court found that disclosure of the confidential information posed a serious risk to the important public interest of fair competition in the artificial intelligence industry, that no reasonable alternative measures would prevent this risk, and that the benefits of the order outweighed its negative effects on the open court principle.

The partial sealing order was granted.

The court considered whether the plaintiff, Gaurav Tewari, should be permitted to bring a motion for an interlocutory injunction under Rule 40 of the Rules of Civil Procedure against multiple defendants, given his outstanding costs orders from previous litigation.

The court found that it would be unfair to allow further motions until the costs orders were satisfied, despite the plaintiff's claims of significant assets.

The motion was not permitted to proceed at this time.

The court considered whether the defences of anticipation and obviousness to a patent infringement claim should be struck as an abuse of process, given a prior Patent Re-Examination Board decision.

The court held that the issues before the Board (patentability) and the court (validity) are distinct, and that the Patent Act reserves validity determinations for the courts.

The motion to strike was dismissed, allowing the defences to proceed.

The Court of Appeal for Ontario allowed the appeal in part, finding that the trial judge erred in failing to address the appellants’ limitations defence to the “TCS Opportunities” claim.

The appellate court held that the TCS Opportunities claim was a new cause of action, added outside the limitation period, and was therefore statute-barred.

The damages award was reduced accordingly.

The court rejected the appellants’ other ground of appeal regarding the drawing of an adverse inference about source code production, finding no error in the trial judge’s approach.

The court considered costs following a summary judgment motion in a copyright dispute between the Lakehead District School Board and Anna Mauro o/a 807 ISC Thunder Bay.

The plaintiff sought substantial indemnity costs, arguing complete success and an entitlement to elevated costs.

The court found the plaintiff was not wholly successful, as punitive damages were not awarded and no valid Rule 49 offer was served.

The court determined the claimed costs were excessive and not proportional, ultimately awarding the plaintiff partial indemnity costs fixed at $8,000, inclusive of fees, disbursements, and HST.

The plaintiff, Arc Compute, sought an interlocutory injunction to restrain the defendants—two former senior employees and their new company—from retaining or disclosing confidential information, competing with the plaintiff, and interfering with its client and employee relationships.

The court found that the defendants, as fiduciaries, breached both contractual and common law duties by retaining confidential information and soliciting clients and employees for their competing business.

The court granted a modified injunction, requiring the return of all confidential information, the shutdown of the competing company, and a six-month worldwide non-competition order.

The Court of Appeal for Ontario dismissed Apotex Inc.'s appeal regarding its claim for damages under section 8 of the Patented Medicines (Notice of Compliance) Regulations.

Apotex sought damages for delayed market entry of its generic drug due to Eli Lilly's prohibition application.

The trial judge found that Apotex was not entitled to damages, as the prohibition application was dismissed as moot, not on the merits, and that Apotex would not have entered the market earlier in a hypothetical world without the prohibition application due to risk aversion and potential patent infringement liability.

The Court of Appeal upheld these findings, concluding that Apotex failed to demonstrate any actual entitlement to damages.

The plaintiffs brought a motion for sanctions under Rule 227 of the Federal Courts Rules, alleging that the defendant's affidavit of documents was deficient.

The Court granted the motion in part, ordering the production of the defendant's business case and an unredacted copy of a production containing third-party supplier information.

The Court found that the plaintiffs had not established the relevance of the requested sections of the defendant's Abbreviated New Drug Submission (ANDS).

This decision addresses whether software developed by an employee (Vladimir Krougly) while employed at Nexus Solutions Inc. was created in the course of employment, such that Nexus would own the copyright in the software (Limedas) later commercialized by Limesoft Inc. The court finds that although Krougly was the author of the software, it was not created in the course of his employment with Nexus, and thus Nexus is not entitled to a proprietary remedy under copyright law.

The court reviews the factual background, credibility of witnesses, expert evidence, and the legal framework for copyright ownership in the employment context.