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PATENTS - Procedure - Costs - Assessment or fixing of costs

Wednesday, March 15, 2017 @ 9:02 AM  

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Appeal by Nova Chemicals Corporation (Nova) from a costs award in favour of the Dow Chemical companies (Dow). Dow successfully sued Nova for patent infringement and successfully defended the judgment on appeal. The Federal Court awarded Dow lump-sum costs of $2.9 million for legal fees, plus disbursements of $3.6 million. The Court found that allowable legal fees under Column V of Tariff B would have awarded 11 per cent of Dow's incurred costs, resulting in an inadequate award. The Court characterized the 33 days of discovery and 32 days of trial as an extremely complex patent case involving extensive expert testimony, thereby justifying an increased costs award. The Court awarded lump-sum costs to avoid additional delay and expense associated with an assessment of costs. The Court concluded that an award of approximately three times what was available under the Tariff was reasonable. The Court found that Dow's bill of costs and the attached schedules permitted determination of the reasonableness of the award and related disbursements. Nova appealed.

HELD: Appeal dismissed. The Court did not err in awarding costs in a lump sum, or in fixing them as a percentage of Dow’s actual expenses. The awarding of increased lump-sum costs as a percentage of actual costs reasonably incurred in departure from the Tariff amounts accorded with the jurisprudence. There was sufficient evidence to establish the actual legal fees incurred were reasonable. The Court's approach avoided the costly exercise of an assessment. Given the unique circumstances of the case, the Court did not err in allowing Dow's disbursement for in-house testing costs in the absence of a supporting affidavit, as the trial judge was well-positioned to assess the utility of the in-house testing in the context of the trial, and the reasonableness of the disbursement.

Dow Chemical Co. v. NOVA Chemicals Corp., [2017] F.C.J. No. 173, Federal Court of Appeal, E.R. Dawson, D.J. Rennie and J.M. Woods JJ.A., February 6, 2017. Digest No. 3642-009