Federal Court Freezes Out Motion To Vary Injunction In Patent Case

• Published date: 10 October 2020
• Subject Matter: Intellectual Property, Litigation, Mediation & Arbitration, Patent, Trials & Appeals & Compensation
• Law Firm: Marks & Clerk
• Author: Ms Amrita V Singh

The Backstory

In 2011, Bombardier Recreational Products Inc. ("Bombardier") sued Arctic Cat, Inc. and Arctic Cat Sales, Inc. (collectively "Arctic Cat") for infringement of four patents relating to Bombardier's new configuration of a snowmobile, which brings the rider into an improved rider position by moving the rider into a more forward position on the snowmobile. After a ten-week trial, the Federal Court held that the first three patents' claims were invalid, and that Arctic Cat had not infringed the claims of the fourth patent because its snowmobiles did not have one of the essential elements. On appeal to the Federal Court of Appeal, Bombardier succeeded in persuading the Court that Arctic Cat's snowmobiles did, in fact, have the essential element previously held missing by the Federal Court, and the case was remitted back to the Federal Court to decide whether the fourth patent was valid.

In its 2020 remand decision, the Federal Court held that the fourth patent was valid, and as part of the relief awarded (which included damages of more than $2.8 million), granted Bombardier a permanent injunction. Such injunctions are normally awarded to patentees who succeed in patent infringement cases. In response, Arctic Cat sought a stay of the judgment from the Federal Court of Appeal, which declined to grant the stay on the basis that irreparable harm had not been established, and the balance of convenience favoured Bombardier.

Arctic Cat argued that allowing the injunction would irreparably harm its competitive position in Canada; permanently harm its Canadian dealer network and relationship with customers in Canada; that serious reputational harm would follow; and that independent Canadian dealers of its products would suffer irreparable harm to their Canadian businesses. The Federal Court of Appeal held that the record was insufficient to prove dealers would have to lay off staff or be forced out of business, noting that "much of the irreparable harm alleged by [Arctic Cat] was self-inflicted and avoidable" because it had failed to make "some sort of contingency plan in case it lost the remand". The Court also observed that if there was no injunction in place, Bombardier would be deprived of its patent exclusivity, which would be "tantamount to having no patent at all."

Unsatisfied with the Federal Court of Appeal's decision on the stay, and the permanent injunction granted by the Federal Court, Arctic Cat and four of its dealers brought two motions...