Lawyers say rights holders with global portfolios are overlooking Canada
Newly started patent litigation in Canada’s Federal Court hit a record low of 21 cases in 2024, according to data tracked in IPPractice by Alan Macek, a partner in Toronto at DLA Piper (Canada) LLP – raising questions about what the decline means for rights holders in a jurisdiction with more to offer than its docket suggests.
The drop is broad-based and well-documented among practitioners. “Since 2017, I have not taken a single patent case through to trial in the pharma context,” says Andrew Shaughnessy, a partner at Torys LLP in Toronto who was one of the builders of the firm’s intellectual property litigation practice and serves as chair of the court practices committee of the Canadian Bar Association. “99.9 percent of pharmaceutical cases are settling in Canada.” The national IP section of the CBA has launched a review, with even the judiciary taking notice: “The judges are asking us: ‘Where are all the patent cases?’”
A well-equipped court facing a shrinking docket
The dissonance is striking because the Federal Court of Canada is, by all accounts from practitioners, an exceptionally capable venue for patent disputes. Macek says the court “actively case manages almost all IP cases” and offers early trial date assignment, with almost all Canadian patent cases starting there.
Jordan Scopa, a partner at Goodmans LLP in Toronto whose firm argued the Rovi Guides case before the Federal Court of Appeal, puts it plainly: “It’s frankly a joy to litigate a case in those courts as a patent litigator.” He points to predictable timelines, consistent case management, and the absence of the parallel validity challenges – known as inter partes review proceedings – that routinely complicate US patent litigation. “You bring a claim, you have a reasonable expectation of getting to a trial within a couple of years and a pretty direct pathway,” he says.
The decline in filings is not the court’s doing. Two decades ago, IP cases represented roughly 20 percent of the Federal Court’s new filings; that figure has fallen to about 5 percent today, driven less by a drop in IP cases than by a sharp rise in immigration and administrative proceedings that consume the same registry and judges. Decision turnaround has slowed, and the court’s recently issued guidelines on summary trials and summary judgment have yet to show up in the filing data.
Why patent cases aren’t coming
Several factors explain the volume drop, and they sit well outside the courthouse. Shaughnessy points to the dynamics of multi-jurisdictional patent disputes: “The Canadian tail rarely wags the US dog when it comes to litigation.” In a 2024 case he tried, five days of evidence preceded settlement alongside a companion case in the United States: “To some extent,” he says, “I felt we were litigating Canada to generate a transcript and a record that was going to be used in [the US].”
The broader commercialization gap also feeds this pattern. “The jump from the seed capital to commercialization is a gulf that we’re not … we don’t seem to be doing well,” Shaughnessy says. “We don’t seem to want to have anything die or fail up here in Canada.” Fewer Canadian companies scaling their innovations means fewer with Canadian patents worth defending.
Macek identifies a separate structural issue: the Canadian Patent Office’s resistance to granting patents on computer-implemented inventions. “Patent applications have been rejected on that basis,” he says, “and simply people are not filing in Canada for certain types of computer-implemented inventions – and so we’re not seeing those patents granted and therefore they’re not being litigated.” Courts have been critical of the Patent Office’s policy in recent decisions, but the pipeline from filing to courtroom is long. “The timeframe from encouraging innovation, encouraging people to file patent applications, to when they actually are being litigated can be five-plus years,” Macek says.
Accounting of profits: the underused tool in Canadian patent litigation
Despite thin filing volumes, Scopa argues that rights holders with international portfolios are leaving real money on the table by not taking Canada seriously. The accounting of profits remedy – which allows a successful plaintiff to claim the defendant’s profits from infringement rather than the plaintiff’s own losses – is not available in all jurisdictions and produced Canada’s largest known patent award: roughly $645 million in the 2022 Supreme Court decision involving Nova Chemicals Corp. and Dow Chemical Co.
The Federal Court of Appeal’s ruling in the Rovi Guides case reinforced the remedy’s reach, establishing a starting premise that plaintiffs are entitled to seek it. “You start with the premise that you’re entitled to that remedy and there have to be very good reasons to disentitle a plaintiff to that remedy,” Scopa says, adding that the decision specifically confirmed that the fact that the patentee has licenced or intends to licence its patents in Canada, as opposed to itself practising the invention, is irrelevant in determining whether to award an accounting of profits. “If you come to Canada, the default presumption is that you can get an accounting of the defendant’s profits if you can prove infringement,” he says. For general counsel with international patent portfolios, Scopa frames this as a threshold question: “Is there a large potential claim that I’m leaving on the table if I don’t … pursue the litigation in Canada?”
Shaughnessy is more cautious, warning that pursuing an accounting in practice is rarely clean: “By the time that you get through the accounting method, the legal fees will far chew up any recovery that you might have.” The real effect of large judgments, he suggests, may be less about drawing plaintiffs to court than about driving defendants to settle – businesses, he says, “hate uncertainty.”
Macek sees the Federal Court’s judicial depth as an asset that practitioners may be underselling to clients. “We are fortunate to have judges who are sophisticated in the IP space – many of them are former IP practitioners,” he says, “and the court is available and keen to get cases to trial efficiently and effectively.” The CBA review, he says, is worth pursuing to untangle how much of the decline is a court-system issue, how much is about enforceability, and how much reflects the state of Canadian innovation: “I think the more people look at these issues and try to identify where the pinch points are … the better.”
