Principles For Awarding Remedies For Patent Infringement Clarified By Federal Court Of Appeal

On August 6, 2024, the Federal Court of Appeal of Canada (the Court) in Rovi Guides, Inc. v Videotron Ltd., 2024 FCA 125, upheld the lower court’s judgement finding that Rovi Guides Inc.’s (Rovi) patents relating to interactive television program guide (IPG) technology were invalid.  The Court also reviewed the principles for awarding remedies for patent infringement and commented, in obiter, as to the remedies Rovi would have been entitled to if its patents were found valid and infringed.

The case concerns Rovi’s patent infringement action alleging that Videotron Ltd. (Videotron) infringed four of its IPG patents in Canada.  Videotron counterclaimed and sought a declaration that Rovi’s asserted claims are invalid.  The trial judge dismissed Rovi’s infringement action and held that each of the asserted claims was invalid for anticipation or obviousness, as previously reported by the E-TIPS® Newsletter here.

Rovi appealed the trial judge’s findings with respect to two of the four IPG patents, arguing that the trial judge made three reviewable errors in its obviousness analysis by: (i) relying on the evidence provided by Videotron’s technical expert as he was misinformed as to the attributes of the skilled person; (ii) applying hindsight bias; and (iii) having a coloured view of Rovi and its patents that tainted its obviousness analysis.  The Court rejected these arguments, concluding that the trial judge did not commit reversible errors in its obviousness analysis.

Rovi further asserted that the trial judge made reviewable errors in its remedy analysis for: (i) denying Rovi’s election of an accounting for profits; and (ii) quantifying damages that Rovi would have been awarded had its patents been found valid.  While the Court agreed that the trial judge erred in several aspects of its remedy analysis, these errors did not affect the outcome of the appeal.

The Court found the correct approach was to start the analysis from the premise that a successful patentee is prima facie entitled to an accounting of profits “unless there were sufficient compelling reasons to deny the remedy”.  The Court emphasized that the damages analysis where the defendant infringer alleges it could have adopted a non-infringing alternative must consider whether the claimed alternative is a true substitute that could and would have been adopted by the defendant infringer, and whether the consumers would have accepted such alternative.  Further, the Court concluded that when determining the damages award using a reasonable royalty rate on sales made by the defendant infringer, one must consider what rate would have been agreed to by the patentee and the defendant infringer had they been a willing licensor and licensee.

The Court ultimately dismissed Rovi’s appeal with costs.

Summary By: Anna Troshchynsky