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PATENTS - Remedies - Accounting of profits

Wednesday, October 21, 2020 @ 6:20 AM  

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Appeal by Nova Chemicals and cross-appeal by Dow Chemicals from a judgment that determined the accounting of profits Nova owed Dow for patent infringement. In an earlier judgment, Nova was found liable for infringing on Dow’s patent over metallocene linear low-density polyethylene by manufacturing the product Surpass and selling it in competition to Dow’s product, Elite. Dow elected an accounting of profits. Nova submitted that had it not infringed Dow’s patent, it would have produced ethylene anyway and made lawful profits from it.

HELD: Appeal and cross-appeal dismissed. The Federal Court did not err in rejecting Nova’s apportionment claim. Nova had not demonstrated it would have been able to sell ethylene to third parties if it did not use it to make infringing Surpass polyethylene. Nova’s submission it would have earned ethylene profits was purely hypothetical and legally irrelevant to the accounting of profits. The Federal Court did not err in awarding Dow springboard profits. Taking Nova as it was found was necessary to extract the value added to Nova by the infringement and to remove the economic incentive to infringe. While the Federal Court selected the full costs method on an incorrect basis, the full costs method was the appropriate method and the court reached the correct outcome in deducting costs. The Federal Court did not err in converting the currency at the date of judgment. Because Nova held the profits primarily in American dollars throughout the period of infringement, conversion at the time of judgment ensured the entire value of the actual profits earned because of the infringement was disgorged. Dissenting reasons were provided.

Nova Chemicals Corporation v. Dow Chemicals Co., [2020] F.C.J. No. 928, Federal Court of Appeal, D.W. Stratas, D.G. Near and J.M. Woods JJ.A., September 15, 2020. Digest No. TLD-October192020005