Dow’s Complex Patent Case Justifies Increased Legal Fees

Justice O’Keefe has issued a costs award granting the successful party in a patent infringement action approximately 30% of its legal costs, and a total costs award of $6.5M.

Justice O’Keefe’s decision issued following a patent infringement action commenced by Dow Chemical Company and two of its related companies against Nova Chemical Corporation which manufactured and sold a polymer known as SURPASS in Canada. When Justice O’Keefe’s patent validity decision issued (see our previous post here), he permitted the parties to make submissions on costs.

In its submissions, Dow sought a lump sum award of between $4.7 to $6.5M which represented a percentage of their actual counsel fees together with their reasonable disbursements. The upper range of $6.5M represented $2.9M for legal fees (which were 30% of the actual legal fees), and $3.6M for necessary disbursement. The lower end of $4.7M represented $1.1M for legal fees based on Column V of the Tariff and $3.6M for disbursements.

Justice O’Keefe’s awarded a lump sum rather than an assessment, as the cost to the parties and time to complete the assessment would be great, and submissions on costs were already before him.  In awarding the top end of the requested range, $6.5M, to Dow, Justice O’Keefe noted the complexity of the case (22 allegations of invalidity, 32 days of trial, 3 days for closing submissions and over 700 pages of written submissions), 33 days of discovery, more than 180 days of testing which was carried out as far away as Holland and Texas, and the fact that Tariff V costs would lead to Dow obtaining only 11% of their legal costs. Justice O’Keefe stated that recouping this level of costs “in such a complex case is not acceptable.”

While the decision is dated January 22, 2016, it only recently became available on the  Federal Court’s website. A copy of Justice O’Keefe’s decision is available here.