Publication
Road to COP29: Our insights
The 28th Conference of the Parties on Climate Change (COP28) took place on November 30 - December 12 in Dubai.
Canada | Publication | May 13, 2024
Litigating intellectual property disputes, including patent, trademark, copyright, industrial design and trade secret rights, can be complex and time-consuming. An average IP infringement suit in Canada can involve several procedural steps: pleadings, document discovery, oral examinations for discovery, expert witness reports, and other related motions. The final result is a trial that can last from several days to several weeks. In Canada, IP cases are heard before a single judge – typically before the Federal Court. There is a right of appeal to the Court of Appeal, as well as a right to seek leave to appeal to Canada’s highest court, the Supreme Court of Canada. Unsuccessful parties are liable to pay at least a portion of the winning side’s legal fees. This is in addition to any other remedies owing, such as damages or an accounting of profits.
Settlement is always worth exploring. In fact, our court rules compel us to do so in the lead-up to an IP trial.
1. Who are the decision-makers?
Start by identifying who needs to provide input on settlement strategy and who needs to sign off. Are there any related entities, partners or other third-party agreements that need to be considered? It is common for IP cases, particularly large patent disputes, to be litigated in multiple countries at the same time. Consider if an extra-territorial settlement plan is required.
2. Agree on an internal objective.
A good settlement is based on an internal strategic objective. This means internal agreement on what the business wants and needs from a settlement agreement. For example, getting an injunction to stop the IP infringement may be more important than negotiating a monetary award, or vice versa. The business case for settlement then needs to align with legal reality. You will lose credibility if you start with a position that lacks a sound IP legal rationale.
3. Choose the right time.
The right time will depend on the facts of each case. However, there are common pressure points in IP litigation: a) At the beginning, when the case first starts before either party has incurred significant legal spend, b) After document or oral discovery, once each side has a better understanding of its case-to-meet, c) After expert reports, when final positions are crystallized. Expert evidence often plays a critical role in IP disputes, and d) At the end, it is never too late to look for a resolution if an issue or a witness did not present as planned at trial.
4. Who will negotiate?
Once litigation starts, or even after an initial exchange of cease-and-desist correspondence, it is typically inappropriate for legal counsel to directly contact the opposing party. As a result, most negotiating takes place between legal counsel. However, it is also common for clients/businesses to negotiate directly. This typically occurs when the parties have in-house counsel experienced in reaching settlement, where there is need to reach a global settlement, or where the opposing companies have a pre-existing business relationship.
5. Consider external settlement counsel.
In larger IP disputes, a party may also opt to retain separate counsel for settlement purposes. Retaining separate counsel can serve a couple of purposes: a) to operate in the background as a “second set of eyes” or “sober second thought,” or b) to lead settlement negotiations while permitting counsel of record to focus on pushing the case/trial forward pending agreement.
6. Enlist a neutral third party.
Parties often find it useful to enlist a neutral third party to mediate the dispute. Parties can agree to share the cost of retaining a private mediator. Federal Court IP litigants can also access free judicial mediation services, often from an associate judge.
7. Use your legal toolbox for leverage.
Under the Federal Courts Rules, making a Rule 420 offer to settle in writing can impose heightened cost consequences against the party (plaintiff or defendant) who rejects the offer to settle and fails to secure a better outcome. Heightened costs apply to activities as of the date the formal settlement offer is served. A Rule 420 offer needs to be made at least 14 days before trial.
8. Communicate clearly to avoid unwanted settlement enforcement.
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