Supreme Court Of Canada Affirms Record-setting $645M Patent Infringement Award In Dow v Nova

• Published date: 22 November 2022
• Subject Matter: Intellectual Property, Litigation, Mediation & Arbitration, Patent, Trials & Appeals & Compensation
• Law Firm: Smart & Biggar
• Author: Mr Daniel Davies

In an 8-1 majority ruling released today, the Supreme Court of Canada (SCC) has affirmed the record-setting $645M patent infringement award in Dow v Nova.

The Supreme Court dismissed Nova's appeal of the earlier decisions of the Federal Court (2017 FC 350 and 2017 FC 637), and Federal Court of Appeal (2020 FCA 141), wherein Nova Chemicals Corporation (Nova) was ordered to pay The Dow Chemical Company (Dow) approximately $645 million as a result of Nova's infringement of Dow's patent on novel polyethylene blends (2014 FC 844). As reported previously, this was and remains the largest reported Canadian patent infringement award in history.

Broadly speaking, the Supreme Court's majority decision (2022 SCC 43) addresses the principles that should govern the calculation of a plaintiff's recovery under the accounting of profits remedy. The decision covers various aspects of the remedy, including the "differential profits" calculation approach, and the availability of springboard profits to account for an infringer's increased profits following patent expiry.

Dow was represented by Smart & Biggar with Steven Garland, Jeremy Want, Daniel Davies, Matthew Burt and Nicole Boyle acting as counsel.

Earlier decisions on infringement and validity

During the liability phase, which began in 2010, the Federal Court upheld the validity of Dow's Canadian Patent No. 2,160,705 and found that Nova's SURPASS polymers infringed the patent. Polymers are polyethylene compositions used in packaging applications including heavy-duty bags, pallet wrapping and food packaging. Dow sells such compositions under the name ELITE.

The Federal Court awarded Dow various remedies, including an election between damages and an accounting of profits, reasonable compensation for infringement that occurred between the publication date of the '705 Patent and its date of issuance, interest and costs. Dow elected for an accounting of Nova's profits.

The Federal Court of Appeal upheld the Federal Court decision on infringement (2016 FCA 216). Nova was denied leave to appeal to the Supreme Court of Canada.

Federal Court judgment on remedies

In the quantification phase of the proceedings, the Federal Court ordered Nova to disgorge profits and other relief totalling approximately $645 million as a result of its infringement of Dow's patent. Nova appealed to the Federal Court of Appeal, whose decision was released on September 18, 2020.

Federal Court of Appeal judgment on remedies

The Federal Court of Appeal...