Federal Court Denies Equitable Relief For Failure To Diligently Prosecute A Patent

• Published date: 18 November 2022
• Subject Matter: Intellectual Property, Licensing & Syndication, Patent
• Law Firm: Aird & Berlis LLP
• Author: Mr Lawrence Veregin

Overview

The Federal Court recently found that patentees may be denied equitable remedies in a patent infringement action if they fail to diligently prosecute their patents. In certain circumstances, the failure to offer to license on "fair" terms may also impact entitlement to equitable remedies.

In Rovi Guides, Inc. v. Bell Canada, 2022 FC 1388, the Federal Court found that Rovi, the patent owner in a patent infringement action, ought not to be entitled to an accounting of profits or an injunction as, among other things, they were not diligent in prosecuting their patents, with one of its patents taking over 17 years to issue from filing. The Federal Court found Rovi's patents invalid for obviousness, so its discussion on entitlement to remedies is obiter. However, the decision is nonetheless noteworthy as it shows a shift in approach from past jurisprudence that was generally indifferent to prosecution and licensing strategies. Patent owners should be mindful that delays in patent prosecution or aggressive licensing or settlement negotiations could result in a loss of equitable relief.

Entitlement to Equitable Relief

In a patent infringement action, a patentee may seek compensatory damages and royalties but may also seek equitable relief such as a permanent injunction, delivery up of any infringing articles or an accounting of profits (in lieu of damages). Although some equitable remedies, such as a permanent injunction and delivery up, are often awarded if there is a successful finding of infringement, a patentee is not automatically entitled to these remedies. The Court always maintains discretion to award equitable relief and can ' and has ' denied equitable relief where a patentee has had "unclean hands". Even if equitable relief is denied, the patentee can still obtain compensatory relief in the form of damages for past infringement and ongoing royalties.

Freedom to Prosecute

Prior to the Rovi Guides decision, the Court's mantra for prosecution as it relates to remedies was "what happens in the Patent Office, stays in the Patent Office." Aside from making fraudulent allegations,¹ a patentee generally has the freedom to prosecute its patent as it sees fit within the confines of the Patent Office's procedures.

Patentees are free to amend their claims in prosecution, including with a view to competitor products, assuming that all requirements for validity are met. Older versions of the claims are generally not relevant in subsequent patent...