Federal Court of Canada Issues Rare Interim Injunction on Patent Infringement Case

On May 7, 2019, the Federal Court of Canada (Court) released the decision Arysta Lifescience North America, LLC et al v Agracity Crop et al, 2019 FC 530, granting a rare interim injunction enjoining AgraCity Crop & Nutrition Ltd. (AgraCity) from selling or distributing a disputed herbicide. 

The decision focused on two issues: 1) whether Arysta Lifescience North America LLC (Arysta) established irreparable harm; and 2) whether Arysta could claim damages based on loss of sales even though it presently sells its herbicide in a different form than what is covered by the disputed patent.

Irreparable harm is rare in patent infringement cases because the economic harm incurred can usually be remedied via compensation.  However, Arysta successfully demonstrated a serious doubt regarding AgraCity’s ability to pay damages.  In particular, Arysta led evidence on a $2.7 million claim against AgraCity.  A lack of substantial financial information from AgraCity regarding their ability to pay also factored into Justice Pentney’s decision. 

Under the second issue, Arysta sought to establish damages under s.55 of the Patent Act. The disputed patent covers the granular form of the herbicide, but Arysta’s currently marketed herbicide is in liquid form (EVEREST 3.0).  Accordingly, AgraCity argued that Arysta could not claim damages due to loss of sales from patent infringement.  However, Justice Pentney held that, as a matter of law, loss of sales of EVEREST 3.0 was encompassed in s.55 of the Patent Act because they would flow directly from AgraCity’s infringement and subsequent competition.  

Summary By: Sam Hargreaves