I Think My Intellectual Property Rights Are Being Infringed; What Now?
- Do I have a right to sue?
- If so, what remedy or remedies do I want?
- What court can help me enforce my rights and give me the remedies that I want, and if more than one, which one should I choose?
- What type of proceeding should I choose?
A discussion of each of these questions and the options available follows below.
Who Can Enforce Intellectual Property Rights?
Not just anyone can enforce intellectual property rights and sue for infringement. Enforcement rights are granted by federal statutes and the common law. If you think your intellectual property rights have been infringed, then you must first determine whether you have "standing" to sue under the law.
Who Can Sue for Patent Infringement?
The Patent Act gives a patentee (meaning the patent owner) and "persons claiming under" the patentee, including licensees, the right to sue for patent infringement. If you are not a patent owner or licensee, we can help you determine if you nonetheless have a right to sue for patent infringement as a "person claiming under" the patentee. If you can sue, but are not the patent owner, you will be required to name the patent owner as a party to any patent infringement court proceedings.
Who Can Sue for Copyright Infringement?
The Copyright Act gives the owner of copyright, and any person deriving any right, title or interest from the owner by assignment or grant in writing the right to sue for copyright infringement. The courts have clarified that exclusive licensees of copyright can sue in their own name, but non-exclusive licensees cannot. If you have standing to sue, but are not the copyright owner, you will generally be required to name the copyright owner as a party to the court proceeding.
Who Can Sue for Trademark Infringement?
The owner of a registered trademark may sue for trademark infringement. If you are a licensee of a registered trademark, you may call on the owner to sue for infringement; and if the owner does not do so within two months, you can sue in your own name. In that case you would have to make the owner a defendant in the proceeding.
What Do You Want from the Infringer?
If you are entitled to sue, you should ask yourself: "What do I want from the infringer?" The answer to this question may dictate your next steps and what court you file suit in, so it is important that you think about this at the outset. There are various remedies available to intellectual property owners whose rights have been infringed. Descriptions of the most common remedies are set out below.
I Want the Infringement to Stop
All you may want is for the infringer to stop infringing. For example, this may be the case if someone is displaying your copyrighted work on their website and all you want is for them to take it down. You have a few options if you want the infringement to stop.
Send a Cease and Desist Letter
Before jumping into litigation, you may want to send the alleged infringer a cease and desist letter informing them of your intellectual property rights, describing how their activity infringes your rights, and asking them to stop infringing. If the alleged infringer was unaware of your rights and does not want to get caught up in a legal battle they may simply comply with your request and that will be the end of it. However, sometimes the alleged infringer will not respond to your letter or will write back refusing to stop their infringing activities. If that is the case, you may need to enforce your rights in court.
If you are ready to proceed with litigation, you can commence a patent, copyright or trademark infringement proceeding in court and ask for an order that the alleged infringer stop its infringing activities. This court order is called an "injunction". An injunction is an equitable remedy, which means that the court has discretion to grant it or not depending on the circumstances of each case. Permanent injunctions are commonly granted to intellectual property owners who have proven in court that their rights have been infringed.
It is important to realize that even if you have commenced a proceeding against the alleged infringer, it may take some time to get to trial and to receive a final judgment. All the while, the alleged infringer may continue to infringe. You can ask the court to order an "interlocutory injunction" to stop the infringing activity in the meantime. Unlike permanent injunctions, interlocutory injunctions in intellectual property infringement cases are notoriously difficult to obtain. However, they may be available in certain circumstances.
Delivery-up and Destruction
You can also ask the court to order that all infringing products be delivered to you or destroyed under oath. This remedy is often granted once you have proven infringement in a court proceeding.
I Want to Be Compensated for Losses I Suffered because of the Infringement
You may want to be compensated for losses you incurred as a result of the allegedly infringing activities. If so, you likely want a damages award ordered by the court. The objective of a damages award is to put you, the plaintiff, back in the position you would have been in had the infringement not occurred. In order to prove damages, you must show that your losses were caused by the infringement and that the losses are not too remote. Assessing damages can be a complicated exercise and parties can opt to delay this assessment until after liability has been proven at trial. In such cases there is essentially a second trial dedicated solely to damages. Proceeding in this manner can save litigants time and money, because if the court finds that no infringement exists during the liability phase, then parties do not have to waste time arguing over what damages are owed.
Damages are a common remedy in patent infringement cases. If you hold rights to a patent and you sell the patented invention, damages are assessed based on lost profits on the sales you would have made if not for the infringement. On the other hand, if you license use of the invention to someone else, then damages are assessed on the basis of royalties you would have made.
Damages are often awarded in copyright infringement cases. The Copyright Act entitles a copyright owner to damages and such part of the profits that the infringer has made from the infringement that were not taken into account in calculating the damages.
You may also elect statutory damages as an alternative to general damages any time before final judgment. With statutory damages you do not have to prove what losses you suffered as a result of the infringement, which will save you a lot of time and money. Instead, if you prove infringement you are generally entitled to the following statutory damages: (a) between $500 and $20,000 for each work infringed, if the infringements are for commercial purposes; and (b) between $100 and $5,000 for all works infringed, if the infringements are for non-commercial purposes. Courts consider various factors in deciding how much to actually award in each case. These factors include: the good or bad faith of the defendant; the conduct of the parties before and during the proceedings; the need to deter other infringements of the copyright in question; and the need for an award to be proportionate to the infringements when infringements were for non-commercial purposes.
Damages are also available as a remedy for trademark infringement, but it can be more difficult to prove what amount of damages you are entitled to. Unlike with copyright and patent infringement, it can be harder to show what sales you lost as a result of the infringement (i.e., someone else using your trademark).
Accounting of Profits
You can also ask the court to order that the infringer give you the profits that they made from their infringing sales, called an "accounting of profits", as an alternative to damages (except in copyright matters, where it is available in addition to damages). This remedy may be preferable if the defendant's profits are expected to be greater than the plaintiff's losses. However, an accounting is an equitable remedy, so the court can disallow it at its discretion, which may occur when plaintiffs have delayed in commencing proceedings or as a result of their misconduct.
What Court Should I Choose?
Two court systems generally deal with intellectual property matters in Canada – the Federal Court system and the provincial courts system.
The Federal Court is Canada's national trial court and judges of this Court hear cases in various cities throughout Canada. The Federal Court can only try certain matters, including matters involving intellectual property.
Provincial courts deal with most criminal and private law cases, but they can also try certain types of intellectual property cases.
Some intellectual property matters can only be tried in the Federal Court and some can only be tried in the provincial courts, but disputes involving infringement of patents, copyright and trademarks can generally be tried in either. Therefore, choosing which court to commence your proceeding in becomes a strategic decision.
When the Federal Court Is Your Only Option
The Federal Court has the exclusive jurisdiction to decide the following types of patent cases:
- cases in which a party wants to impeach or annul a patent;
- cases in which a party wants to vary or expunge any entry in the records of the Patent Office relating to the title to a patent;
- cases involving conflicting patent applications; and
- cases in which a party wants to appeal a decision of the Commissioner of Patents refusing to grant a patent.
The Federal Court has the exclusive jurisdiction to decide the following types of copyright cases:
- cases in which a party wants an entry in the copyright register made, expunged, varied or rectified; and
- cases involving conflicting copyright registrations.
The Federal Court has the exclusive jurisdiction to decide the following types of copyright cases:
- cases involving conflicting trademark registrations; and
- cases in which a party wants an entry in the trademark register made, expunged, varied or rectified.
When a Provincial Court Is Your Only Option
Provincial courts may be the only option for disputes that are largely contractual or based on tortuous activities, including common law passing-off and breach of confidence. If your intellectual property dispute is based on any of these causes of action, you must go through the provincial courts system.
Your next step is to determine in which province or territory to bring your suit. In some cases, this is an easy decision; for example, the contract in dispute may have a clause that states all disputes are to be dealt with under Ontario law. In other cases, it may be more difficult to determine where to go. A lawyer can give you an opinion on this issue. If you choose the wrong province or territory, your claim can be struck for lack of jurisdiction and you might have to start all over again somewhere else, so it is important that you get this right the first time.
When the Choice of Court Is Yours
Patent, copyright and registered trademark infringement disputes may be tried in either the Federal Court or provincial courts, but there may be practical reasons for choosing one over the other.
Most intellectual property infringement cases are tried in Federal Court. Federal Court judges have greater exposure, experience and familiarity with intellectual property matters and, as a result, greater expertise with the subject than provincial court judges. Further, Federal Court judgments are recognized nationwide and can thus be enforced across Canada. This means, for example, that a Federal Court order for an injunction can be enforced across the country. By contrast, injunctive relief awarded in one province is not enforceable in another province because provincial court judgments are limited to the borders of the province or territory in which they are made. This said, an award for damages or an injunction is enforceable against any asset or operation of the defendant, irrespective of the province or territory.
What Type of Proceeding Should I Choose?
The most common way to sue for infringement of intellectual property rights is by commencing a proceeding called an "action" in Federal Court or provincial court. However, depending on the value of the monetary award you are seeking and how quickly you want to proceed, there may be alternatives, as discussed below.
The typical way to enforce your intellectual property rights in court is by commencing an action. In a Federal Court or provincial court action, the court can theoretically award any amount of damages and any legal or equitable remedy. However, it often takes years to get to trial and to obtain a final judgment.
An action begins when the plaintiff files a statement of claim in court and subsequently serves it upon the defendant. The defendant then serves and files a defence in response and, in some cases, may also include a counterclaim alleging that the intellectual property right being enforced is invalid, among other things. The plaintiff may serve and file a reply and defence to counterclaim.
The parties then proceed to the discovery stage where they gather information and evidence needed to make out their cases. The discovery process includes documentary and oral discovery. Documentary discovery involves exchanging relevant documents and oral discovery involves questioning a representative of each adverse party.
If the parties will be calling expert witnesses to give evidence at trial, then they must exchange expert reports beforehand. This is very common, for example, in patent cases which involve highly complex scientific concepts.
The parties will then proceed to trial, which can last days or weeks, depending on the number and complexity of issues, the number of witnesses, and the number of parties involved. Final judgment is usually reserved and can be released within weeks or months of the trial.
If you are seeking a smaller sum, you may be required to proceed by way of a simplified action. In the Federal Court any claims for less than or equal to $50,000 must be brought as a simplified action. In the Ontario Superior Court of Justice, a similar simplified procedure must be followed for claims less than or equal to $100,000. Parties can also opt into proceeding by a simplified action in certain cases where they seek more than the prescribed amounts.
Simplified actions are meant to provide a way of getting a final judgment sooner. Simplified actions involve more limited discovery than is required in an ordinary action, which saves litigants time and money. In the Federal Court, evidence in a simplified action is introduced at trial through affidavit evidence, rather than through oral testimony, although witnesses who swear an affidavit must be available for cross-examination at trial.
Small Claims Court Actions
An even quicker, easier and less expensive way for litigants to enforce their intellectual property rights in court is through an action in small claims court; a specialized branch of the provincial courts system. However, this option is only available in certain circumstances.
A small claims court proceeding is only an option for a plaintiff seeking monetary relief within the monetary limit of the respective provincial small claims court. Each province and territory has a capped monetary amount that can be claimed for damages. In Ontario, the small claims court has the jurisdiction to hear cases involving claims for $25,000 or less, while Alberta has the highest capped monetary amount in the country at $50,000.
Small claims courts typically only award monetary damages, so plaintiffs who primarily want remedies other than money might not want to use the small claims court system. For example, parties of intellectual property disputes seeking equitable remedies or relief such as injunctions should not use the small claims court system.
Generally, there is no discovery in a small claims court proceeding, therefore if you need information from the defendant to make out your case, then this may not be the right venue for you.
As a practical matter, the small claims court system should not be used for complex disputes and should be reserved for more straightforward cases of intellectual property infringement.
An application is an alternative proceeding to an action, which is only available to litigants who want to enforce their copyright and trademark rights. Applications are commenced by a notice of application, rather than a statement of claim. There is no discovery in an application proceeding and evidence is presented in writing rather than by oral testimony.
An application can be distinguished from a simplified action because applications do not involve discovery per se, whereas simplified actions do provide for a discovery process, although it is more limited than in an ordinary action.
An application can also be distinguished from a small claims court action because proceeding by way of application does not limit the types of remedies available, nor is there a cap to monetary awards.
I Want Help Deciding How I Should Proceed
If you would like to discuss how to proceed in your matter, please contact us for a complimentary and confidential telephone appointment.