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Intellectual Property Litigation FAQ
Sections:
Choosing a Court for the Dispute
Avoiding Having to Defend Litigation
Litigation Basics
What is intellectual property litigation?
Intellectual property litigation is the process of pursuing legal action in court against a party who has infringed on your intellectual property rights.
Can I represent myself in court proceedings?
Yes, individuals can generally represent themselves at Small Claims Court, the Ontario Superior Court of Justice and the Federal Court. However, without legal education and experience it can be difficult to know which Court is best for your specific proceeding, what limitation periods apply, what causes of action or defences are available, and how to navigate the Court system. Further, except in Small Claims Court proceedings, the opposing party will likely be represented by a lawyer, so representing yourself may put you at a disadvantage.
If you are a corporate litigant, you cannot represent yourself in an Ontario Superior Court proceeding or Federal Court proceeding except with leave (permission) of the Court, which is rarely granted. Corporate litigants can, however, self-represent in Small Claims Court.
How long does it take to get to trial?
It can take anywhere between one year and several years to get to trial. This timeline depends on factors such as the type of proceeding (e.g., action, simplified action, application) and the schedule of the court.
I can’t wait for a trial; how can I stop the infringer from infringing my rights now?
There are several options at your disposal to try to immediately enforce your rights. The first is to send a cease and desist letter to the infringer that informs them of your intellectual property rights, describes how they have infringed your rights, and demands they cease the infringement. While the infringer is not bound to comply with your demand, often they will do so to avoid further legal action.
If you have already started a court proceeding against the infringer, you can bring a motion to obtain an interlocutory injunction, which prohibits the infringer from continuing their infringing activities while the case makes its way to trial. However, interlocutory injunctions are difficult to obtain in intellectual property cases.
Standing and Causes of Action
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.
Can I still sue someone who is using my invention even if I do not have a Canadian patent?
If you do not have a patent in Canada, then you cannot sue for patent infringement in Canada. However, there may be other causes of action that can form the basis of a legal claim (e.g., breach of confidence, breach of contract--see below).
Can I send a cease and desist letter if my invention is not patented in Canada?
The Patent Act allows for a cease and desist letter to be related to inventions patented in and outside of Canada as long as the letter is sent to someone residing in Canada.
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 this case, you would have to make the owner a defendant in the proceeding.
Can I still sue someone who is using my trademark even if I did not register it in Canada?
Unregistered or common law trademarks still possess a degree of legal protection. However, the scope of this protection is much narrower than for registered trademarks. If you have an unregistered trademark, you can sue for passing off, if you can prove that:
- There was sufficient goodwill or reputation attached to your goods and/or services in association with the unregistered trademark in the mind of the consumer;
- Another trader deceived the consumer through its misrepresentation; and
- You suffered actual or potential damages.
Each element of the allegation must be proven on a balance of probabilities by the owner of the unregistered trademark. Reputation must be proven to the extent that it identifies the distinctiveness of the source of the goods or services.
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 proceedings.
Can I still sue someone who has copied my work even if I did not register my copyright?
Yes. Copyright subsists automatically upon creation of an original work. The Supreme Court of Canada ruled that an “original work” under the Copyright Act is one that originates from an author, is not copied from another work, and is the product of an author’s exercise of skill and judgment (i.e., its creation was not purely mechanical).
With limited exceptions, creators of works are automatically the owners of copyright if their work is one in which copyright can subsist. However, copyright registration provides additional legitimacy in Court and strengthens your case against the infringer. Further, copyright registrants are presumed to own copyright in the work in question. If you foresee your work being ripe for infringement, it is best to obtain a copyright registration. Our lawyers will be happy to help you with the registration process.
Can I sue someone for disclosing or using a trade secret or other confidential information?
Yes. Multiple causes of action may arise in such a situation. Breach of confidence occurs where (1) the information conveyed was confidential; (2) it was communicated in circumstances of confidence; and (3) it was misused by the receiving party to the detriment of its provider. Depending on the relationship between the parties, this scenario may also involve a breach of fiduciary duty. Moreover, if the receiving party benefits from use or disclosure of the information, then the provider of the information may be able to claim unjust enrichment. Finally, any implicit or explicit (e.g., a non-disclosure agreement) contract between the parties may also provide a cause of action for breach of contract.
How does timing affect my ability to sue?
Federal legislation and provincial limitation period legislation place time limits on your ability to obtain relief. Overlapping legislation, the judicial interpretation of such legislation, the remedies sought and a case’s individual circumstances can all affect the applicable limitation period – this is not always a straightforward question to answer. Nonetheless, the following are general guidelines:
- Patents: The Patent Act provides that no remedy will be awarded for infringement that occurred more than six years before the commencement of an infringement action.
- Trademarks: The Trademarks Act does not specify a limitation period for most enforcement proceedings, including infringement, passing off and depreciation of goodwill. If brought in Federal Court, these proceedings are subject to the Federal Courts Act, which provides a limitation period based on where the cause of action arises. If all elements of a cause of action, including any damage suffered, occur in a single province, then the limitation period legislation of that province applies. For example, in Ontario, this is two years from the date upon which the plaintiff knew, or ought to have known, about the injury, loss or damage giving rise to the claim. However, where a plaintiff has suffered damage beyond the jurisdiction of a single province—for example, because of a defendant selling infringing goods across Canada—then the applicable limitation period in Federal Court is six years. If brought in provincial court, the above-noted trademark enforcement proceedings are subject to the limitation period legislation of the province in which the proceeding is commenced.
- Copyright: For a court to award a remedy for any act or omission contrary to the Copyright Act, proceedings must be commenced within the earlier of three years after the plaintiff first knew, or ought to have known, about the act or omission giving rise to the claim. In cases of ongoing infringement, plaintiffs may recover for infringement occurring within the three-year limitation period, even if the infringing activity began prior to that.
- Torts (e.g., breach of confidence, common law passing off): Actions for tortious conduct that arise from the common law rather than by authority of a federal statute are typically brought in provincial court. Accordingly, the limitation period legislation of the province in which the proceeding is commenced applies.
Procedural Questions
How do I start a lawsuit against someone who is infringing my intellectual property rights?
In a regular action, the plaintiff commences a proceeding by drafting a statement of claim, which is a document that contains a concise statement of the material facts on which the plaintiff relies to prove infringement. The plaintiff must also plead a valid cause of action within the claim, or the facts that allow them to seek judicial redress in courts.
Once the plaintiff files the statement of claim in Court and it is issued, the plaintiff must then serve the issued claim on all defendants and file an affidavit of service as proof of that service upon the defendants.
If a defendant does not defend the action, the plaintiff may seek a default judgment against that defendant. If a defendant does defend, the litigation will continue against them.
How do I determine what I want from the infringer?
This is largely up to you. Litigation is time consuming and can be costly, so you should know why and what you want before starting a legal proceeding.
If I think someone is infringing my intellectual property rights, do I have to send a cease and desist or demand letter before I sue?
No, you are not obligated to send a cease and desist letter before commencing legal proceedings. However, doing so confers several advantages. First, if the recipient complies with the letter, it will save you the time and costs of litigation. Second, even if the recipient does not comply, the letter may open a pathway for negotiation; for example, it may lead to a licensing agreement that is acceptable to both parties. Finally, evidence that you have tried to contact the infringer in attempt to reach a solution may be useful in future court proceedings.
What should go into a cease and desist letter?
A cease and desist letter should, at the very least, inform the recipient of your intellectual property rights, describe how their activity infringes your rights, and demand that they stop infringing. It does not need to take any particular form, but the more official it looks, the more likely it is that it will be taken seriously.
Please see our article on cease and desist letters for more information.
What defences are available to the individual infringing my intellectual property rights?
Defences that may be available to a defendant in an intellectual property matter will depend on the cause-of-action (the legal basis on which the action is commenced) and the intellectual property in question (whether the matter relates to patents, trademarks, or copyright).
In the case of any of patent, trademark or copyright matters, however, the defendant may dispute the plaintiff’s entitlement to the intellectual property in issue, or, where applicable, the validity of the plaintiff’s registration.
Another defence which may be raised in any number of intellectual property matters is the defence of acquiescence or laches, which rests on the plaintiff having delayed in taking action against the defendant with regard to the now-impugned activities.
Other defences are derived from the legislation governing the intellectual property in issue. For example, in certain circumstances, section 21 of the Trademarks Act permits a defendant’s concurrent use of a plaintiff’s trademark. Similarly, the Patent Act provides for a number of exceptions to what would otherwise constitute patent infringement. These include, in specific circumstances, experimental use of a patented product, as well as private prior use, where an individual independently develops an invention which is later patented by someone else.
The Copyright Act includes a defence of fair dealing, which may apply where a dealing with a copyrighted work was for an allowable purpose (for example, research) and was fair in nature. A defendant may also dispute whether infringement could be said to have occurred at all, if only a small portion of the work was involved. The Copyright Act specifies that the exclusive right of a copyright owner relates to the work or a substantial part thereof. The defendant may therefore submit that a substantial part of the copyrighted work was not in fact reproduced. For more information on defences to patent, trademark and copyright infringement, please see the respective pages on our website.
Remedies
Can I obtain an injunction against the infringer?
It depends. There are three main types of injunctions that a court can award against an infringer: interlocutory injunctions, interim injunctions and permanent injunctions.
An interlocutory injunction is awarded while the outcome of the trial is still pending and, if granted, prohibits an infringer from continuing to use your intellectual property. However, interlocutory injunctions are notoriously difficult to obtain in intellectual property proceedings.
One requirement for obtaining an interlocutory injunction is proof of irreparable harm. Since you must show irreparable harm in order to obtain the injunction, it important that you apply for the injunction quickly after learning of the infringer’s conduct. If you delay your application for many months after the infringer’s conduct has commenced, the court may infer that you will not suffer irreparable harm from the continued conduct of the infringer.
Interim injunctions also provide temporary relief, although relief is granted only until a specified date rather than until final disposition. Interim injunctions may be granted ex parte, or without notice to the defendant, where, in a case of urgency, no notice is possible or where giving notice would defeat the purpose of the motion. In Federal Court, an interim injunction on an ex parte motion may be granted for a period of no more than 14 days.
Plaintiffs often seek ancillary remedies in conjunction with an ex parte interim injunction: Anton Piller orders permit entry to private premises to secure evidence that the defendant might otherwise move or destroy; Mareva injunctions restrain defendants from moving or liquidating assets in the court’s jurisdiction. Both are considered exceptional forms of relief.
Permanent injunctions are a common remedy awarded to a successful plaintiff after trial. In intellectual property cases, Canadian courts have generally been inclined to grant permanent injunctions to remedy infringement of intellectual property rights. This is true even in cases where the plaintiff has suffered little to no actual loss. Courts are of the view that, once a plaintiff has proven that it owns valid and enforceable intellectual property rights, the defendant should be prevented from infringing those rights for as long as they continue to exist.
For more information on this topic, check out our article on court injunctions.
Can I get the infringer to give me back the offending goods?
Yes, recovery of goods that contravene the Copyright Act and/or Trademarks Act may be possible. As the plaintiff, you can ask the court to order that all infringing products be delivered to you or destroyed under oath if you are successful at trial. Note, however, that this is an equitable remedy and subject to the court’s discretion.
Can I directly stop someone from importing infringing goods?
Yes. Under both the Trademarks Act and Copyright Act, rightsowners may apply for a court order directing the Minister of Public Safety and Emergency Preparedness to detain infringing goods that are about to be imported into Canada or that have been so imported but have not been released. Such an application may be brought without notice to the defendant.
Can I recover my losses through monetary damages?
Yes – courts may award damages as compensation for a plaintiff’s losses. Damages may be calculated based on, amongst other factors, the profits the plaintiff would have made but for the defendant’s infringing activity or, alternatively, the royalty rate that the defendant would have paid for an appropriate licence.
However, proving a specific amount of compensatory damages may be difficult in certain situations, e.g., in trademark infringement or passing off disputes. In such situations, courts may instead award a nominal amount of damages.
For what other reason are damages awarded in IP litigation?
Courts may also award punitive damages where a defendant’s conduct is particularly egregious and represents a marked departure from ordinary standards of decent behaviour. Punitive damages are an exceptional remedy – their purpose is to deter the defendant and others from similar misconduct in the future rather than to compensate the plaintiff for losses suffered. Punitive damages may be awarded in addition to compensatory damages, but only where compensatory damages alone would be insufficient to deter future misconduct.
Does the infringer have to give me the money they made from selling my goods?
During a court action, you can ask the Court to order the infringer to 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). The remedy may be preferable if the defendant’s profits are expected to be greater than your losses.
However, an accounting is an equitable remedy, so the Court can disallow it at its discretion, which may occur when the plaintiffs have delayed in commencing proceedings or as a result of their misconduct.
Can I obtain multiple remedies?
Yes. Although, as noted, in all IP disputes outside of copyright matters, damages and an accounting of profits are alternative remedies – a successful plaintiff must elect one or the other.
A successful plaintiff in a copyright infringement suit may choose to recover statutory damages instead of damages and profits under subsection 35(1) of the Copyright Act. Statutory damages are awarded for infringements for commercial and non-commercial purposes. For infringements for commercial purposes, a court may award between $500 to $20,000 for all infringements for each work. This means that statutory damages are calculated based on the number of copyrighted works infringed and not the number of infringements of those works. Depending on how each “work” is defined, the overall amount of statutory damages can be substantial. For example, in Nintendo of America Inc. v. King 2017 FC 246, the court awarded $20,000 per infringed work, for five hundred and eighty-eight works, for a total of $11,760,000. Note, however, that courts may sometimes award an amount of less than $500 per infringed work for commercial purposes if the total award would be grossly out of proportion to the infringement. For infringements for non-commercial purposes, courts may award between $100 and $500 for all infringements for all works.
How can I find out how much money I could get at trial?
This can be difficult to know in advance. At the very least you need to have some idea of how many infringing sales the infringer made, how much they made as a profit on each sale, and how much you would have made on each of those sales. Sometimes the only way to figure this out is through discovery after a legal proceeding is already instituted.
If I win at trial, does the opposing party have to pay my legal costs?
Awarding costs is in the Court’s discretion. Generally, the successful party is awarded a portion of its legal costs. Full indemnity (wherein the successful party is awarded all of its legal costs) is rare and only awarded in exceptional circumstances usually related to dishonest or otherwise egregious behaviour.
In the Federal Court, legal costs are governed by Tariff B of the Federal Courts Rules: Counsel Fees and Disbursements Allowable on Assessment. A party seeking an assessment of costs in accordance with this Tariff shall file and prepare a bill of costs, which shall indicate details about the assessable service and evidence for the number of hours claimed. It provides a breakdown of the number of hours that can be claimed for services performed by legal professionals in the course of a Federal Court dispute.
Choosing a Court for the Dispute
Which courts have jurisdiction to hear my dispute?
As an intellectual property litigant, you have three courts that are potentially viable as an avenue for your dispute: the Federal Court, the provincial courts and, if available, the Small Claims Court in your province.
How do I choose a court for my dispute?
Disputes involving infringement of patents, trademarks, and copyrights can generally be tried in either Federal Court or a provincial court; however, note that only federal judgments may be enforced across Canada.
The Federal Court is your only option in the following litigation proceedings:
- 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 of patent;
- Cases involving conflicting patent applications;
- Cases in which a party wants to appeal a decision of the Commissioner of Patents refusing to grant a patent;
- Cases in which a party wants an entry in the copyright register made, expunged, varied or rectified;
- Cases involving conflicting copyright registrations;
- Cases involving conflicting trademark registrations;
- Cases in which a party wants to appeal a decision of the Registrar under the Trademarks Act (e.g., an opposition or summary expungement decision); and
- Cases in which a party wants an entry in the trademark register made, expunged, varied or rectified.
Provincial courts may be the only option for disputes that are largely contractual or based on tortious activities, including common law passing off and breach of confidence.
Small Claims Court is an option where the quantum of damages that you are claiming is relatively low. For example, in Ontario the monetary remedial jurisdiction of the Small Claims Court is limited to claims in an amount up to $35,000. Alberta has the highest capped monetary amount in Canada at $50,000.
Can I sue someone for infringing my intellectual property rights in Small Claims Court?
Intellectual property claims can be pursued in Small Claims Court only where the quantum of damages sought by the plaintiff is lower than the capped maximum which the Court in that province can award. Further, small claims courts typically do not have the jurisdiction to award injunctions.
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.
Who will decide my case?
There are no jury trials in intellectual property cases in Canada. A single judge will preside over an intellectual property trial irrespective of the court hearing the matter.
I have a business in Ontario, but someone is infringing my intellectual property rights in another province or territory – can I sue them? Where?
Yes, you can pursue legal action against an infringer that is infringing your intellectual property rights outside of Ontario. Generally, you will be able to bring a lawsuit against the defendant in the province in which they committed the infringement. Choice of jurisdiction and court will also depend on factors such as the particular nature of the dispute, as well as the residence and place of business of the defendant.
Importantly, you can commence a legal proceeding in the Federal Court in relation to intellectual property disputes that arise in any province. Further, Federal Court orders are enforceable nationwide. You can also file documents in various Federal Court registry offices across Canada.
What type of proceeding should I choose?
Different types of proceedings are available to parties seeking to enforce their intellectual property rights – the optimal choice may depend on the evidence currently available, the amount of the claim, the additional remedies sought and/or the time that a party is willing to wait to reach disposition.
The most common proceeding is an action in Federal Court or provincial court. An action is commenced when a plaintiff files a Statement of Claim and subsequently serves the same on the defendant. Actions involve a full documentary and oral discovery process, which allows each party to gather information relevant to its case. It often takes years for an action to reach trial, and the trial itself may last days or weeks.
Applications and simplified actions are two alternatives to an ordinary action, both of which often involve less time and expense. Applications are available for copyright and trademarks matters; they do not involve a discovery process and generally do not involve oral testimony upon hearing. Simplified actions are mandatory for most actions involving claims below a court-specific amount (e.g., no more than $50,000 in Federal Court) and available in select circumstances for disputes involving larger claim amounts. Simplified actions involve a more limited discovery process and, in Federal Court, no examination in chief at trial.
As noted above, Small Claims Court may be an additional option where the amount claimed is limited and the plaintiff is not seeking injunctive or equitable relief.
For more information on this topic, see our article on intellectual property enforcement.
Avoiding Having to Defend Litigation
Do I have to respond to a cease and desist or demand letter?
A cease and desist letter is not a court order and on its own is not legally enforceable. As such, it is not mandatory to respond to a letter that you have received. However, responding to the letter can open a channel of communication between you and the sender that may lead to a positive outcome. Failing to respond, on the other hand, raises the risk that the situation will escalate to litigation.
I received a Statement of Claim. Do I have to respond?
It is not strictly mandatory to respond to a statement of claim that a plaintiff has served upon you. However, if you elect not to respond, the plaintiff can ask the Court to issue a default judgment in their favour. This may result in you having to pay damages for intellectual property infringement which you could otherwise have avoided. It is best to discuss any statement of claim that you receive with a lawyer to determine the best way to proceed.
I received a Statement of Claim that is partially or entirely without merit – do I need to go through a full trial to defend myself?
Not necessarily. In both Federal Court and the provincial courts, issues may be struck from the claim or resolved summarily by a motion to strike or a motion for summary judgment/trial, respectively.
- Motion to strike: Litigants served with a defective pleading (e.g. Statement of Claim or Statement of Defence) may move to have the pleading struck, in part or in whole. If successful, the result is either default judgment or a narrowing of the issues in dispute.
For example, the Federal Court may order that a pleading be struck out, with or without leave to amend, where it (1) discloses no reasonable cause of action or defence; (2) is immaterial or redundant; (3) is scandalous, frivolous or vexatious; (4) may prejudice or delay the fair trial of the action; (5) constitutes a departure from a previous pleading; or (6) is otherwise an abuse of process. - Motion for summary judgment or trial: After the defendant has filed a defence but before a trial date and location are fixed, either party may move for summary judgment or summary trial on some or all of the issues raised in the pleadings.
In ordinary actions in Federal Court, for example, the Court may grant summary judgment where there is no genuine issue for trial or where the only issue is the amount to which the moving party is entitled or a question of law. If there is a genuine issue for trial and the Court is satisfied that there is sufficient evidence for adjudication, then it may determine the issue by way of summary trial rather than by full trial.
I got a notice from my Internet Service Provider that my account has been associated with copyright infringement. Should I ignore it?
This notice is likely part of the "Notice and Notice" regime in Canada that attempts to prevent online copyright infringement. The notice itself does not have any legal power, which means that there are no immediate consequences to not responding. However, the notice is meant to flag to the infringer that the activity in which they are partaking can have legal consequences, and that it infringes on the intellectual property of someone else.
In December of 2018, Parliament approved amendments to the Copyright Act that restrict the content of notices sent under the “Notice-and-Notice” regime. Going forward, notices of claimed infringement shall not contain: (a) an offer to settle the claimed infringement; (b) a request or demand, made in relation to the claimed infringement, for payment on or for personal information; or (c) reference, including by way of hyperlink, to such an offer, request or demand. A notice that does not comply with these new requirements does not trigger the obligation of the internet service provider or host to pass the notice on to the alleged infringer and to otherwise preserve that person’s identity for subsequent enforcement proceedings.
If you have received a notice, the best strategy is to critically evaluate your online actions and cease any behavior that infringes on others’ copyright. In most cases, if you cease the infringing activity, it may help to prevent future litigation on the matter. It may also be helpful to consult a lawyer about your potential liability and the likelihood of future litigation.
If you have any further questions, please contact us for a complimentary and confidential initial telephone appointment with a member of our team.
