Concession Counters Apple’s Bifurcation Motion in Battle over Standards Essential Patent

Wi-Lan sued Apple, and sought an injunction, claiming that several Apple products which comply with the 4G and 5G standards necessarily infringe its ‘159 Patent. Apple pled that if its products infringe Wi-Lan’s patent by being 4G and 5G compliant, the ‘159 Patent is a “Standards Essential Patent” (“SEP”) which only entitles Wi-Lan to a royalty on “Fair, Reasonable and Non-Discriminatory” (“FRAND”) terms, and not an injunction. SEPs and FRAND royalties are US patent law concepts which have yet to be considered under Canadian law.  

Apple brought a motion seeking bifurcation of validity and infringement issues from the issue of remedies, including Wi-Lan’s right to an injunction. Wi-Lan responded by offering to forego an accounting of profits and limit its claim a reasonable royalty if bifurcation was refused.

Bifurcation was refused

While litigants are generally entitled to have all issues determined in a single trial, courts will order bifurcation where the moving party establishes a likelihood that severance will result in the just, most expeditious and least expensive determination of the proceeding on the merits. Prothonotary Tabib noted that bifurcation orders are not uncommon in patent infringement actions because courts seek to avoid the inefficiency of litigants in an un-bifurcated action conducting discoveries and spending trial time leading evidence on both parties’ revenues and expenses while not knowing whether an accounting of profits or plaintiff’s damages is available until the final judgment is rendered.  

Prothonotary Tabib cited her earlier decision in Apotex Inc. v. H. Lundbeck A/S, 2012 FC 414, in which the plaintiff made a concession similar to the one offered by Wi-Lan in the case at bar. Prothonotary Tabib held that a party’s willingness to narrow the issues in order to achieve the just, most expeditious and least expensive determination of the dispute is a weighty factor against bifurcation.

Prothonotary Tabib weighed the costs savings associated with Apple’s proposed course of action against Wi-Lan’s and concluded that the savings from a non-bifurcated trial were evident, significant, and did not depend upon a single outcome on the issue of liability.

Prothonotary Tabib concluded that the relative complexity and novelty of the SEP and FRAND royalty analyses was no reason to bifurcate. There was no suggestion that determination of the liability issues would reduce the complexity of the SEP and FRAND royalty issues.

A copy of the decision is available here.