Historically, and apparently still, many companies decide to forgo filing in Canada based upon an analysis of the costs of filing and obtaining a patent in Canada, and the significance and size of the Canadian market. We believe that it is time to revisit this analysis.
Close Links to the United States
While Canada and the US have similar laws, the court systems in each country are markedly different, especially in relation to civil litigation and the associated costs. It is possible in many circumstances to use patent litigation in Canada instead of, or in addition to, litigation in the US, to obtain a beneficial outcome across North America.
A moderately complex patent litigation action in the US can easily cost a plaintiff/patentee $3.5 to $5 million to obtain a decision at trial (with as much as $2 to $3 million necessarily spent before reaching a point where a settlement may be favorably negotiated). In contrast, a similar moderately complex patent litigation action in Canada should cost a plaintiff/patentee $1 to $2 million to obtain a decision at trial (with perhaps $500,000 to $750,000 being spent before reaching a point where a settlement may be favorably negotiated.)
As a settlement to a Canadian patent lawsuit can result in the plaintiff and defendant reaching a settlement with global effect, these potential cost savings can be a significant benefit.
Benefits of Canadian Patent Litigation
Litigants who are accustomed to US courts will be pleasantly surprised by the following advantages of Canadian patent litigation:
- No juries. This can simplify litigation and improve predictability.
- No venue shopping. Almost all actions occur before a single, Federal Court1, irrespective of the geographic location of the parties.
- Case management. Actions can be pursued quickly and efficiently with oversight from judges and court administration.
- Only one witness is deposed. Instead of deposing multiple witnesses, a single representative is designated by each party for discovery. This can significantly save time and costs compared to the US deposition process and can reduce the burden on senior management.
- Account of profits as an alternative to damages. The plaintiff may seek an accounting of profits, rather than damages, which increases the litigation burden on a defendant. Further, an accounting of profits can be significantly larger than the damages that might otherwise be awarded.
Costs of Obtaining a Canadian Patent
The lifetime costs of a Canadian Patent are significantly less than those of a corresponding US patent.
Estimates of the average lifetime cost of a US patent typically range from $25,000 to $30,000, including attorney's and government fees. A same-basis estimated lifetime cost of a Canadian patent is about $15,000. (While it is more difficult to determine the estimated lifetime costs of a European patent, estimates in excess of $70,000 are common.)
It is also possibly to reduce the $15,000 estimate for a Canadian patent by as much as $3,400, since maintenance fees for pending applications may now be paid by any entity, which can allow clients to avoid paying further fees to the agent of record.
Rethinking Global Patent Strategies
Conventional wisdom with respect to patent application filing decisions in Canada should be revisited. It is no longer appropriate to make a filing decision for Canada based solely on considerations of the size of the Canadian market. Canada's close economic relationship with the US and Canada's efficient, predictable, and inexpensive court system combine to provide a unique, viable and cost-effective method for enforcing intellectual property rights in North America and globally.
Footnote
1. It is possible to litigate a patent in one of the provincial courts but, while such a court can rule on infringement and validity, only the Federal can have the patent office invalidate a patent. Very, very few actions proceed at the provincial court level.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.