Canada’s Federal Court Awards “Springboard” Profits in Patent Infringement Case

On April 19, 2017, Canada’s Federal Court (FC) issued a decision regarding how to calculate the financial remedy payable by the defendant, Nova Chemicals Corporation (Nova), to the plaintiffs (collectively Dow) as a result of Nova’s infringement of Dow’s Canadian Patent No 2,160,705 (The Dow Chemical Company v Nova Chemicals Corporation, 2017 FC 350).  Previously, the FC found that Dow’s patent was valid and was infringed by Nova’s SURPASS® metallocene linear low-density polyethylene products (reported previously in E-TIPS® Newsletter). 

The FC awarded Dow a “reasonable royalty” at 8.8% for the period between when the application became open for public inspection and the date of patent grant.  In addition, at Dow’s election, the FC awarded Dow an accounting of profits derived from the infringing products.  

For the first time, the FC awarded “springboard” profits for patent infringement, which requires an infringing party to account for their profits made after the expiration of the patent at issue.  The FC reasoned that, in a hypothetical “but for” world constructed to calculate the amount of profits improperly made by Nova, Nova would not have been able to enter the relevant market until the patent expired.  Therefore, it would have taken some time for Nova to attain the same level of sales of the infringing products that Nova enjoyed in the real world upon the expiration of the patent (known as “ramping up”).  This was because Nova would have needed some time to develop and test its products to qualify them for different applications.  The FC fixed the springboard period at approximately 20 months after the expiration of the patent based on Nova’s historical ramp-up periods.

Summary By: Junyi Chen