Is Divided Infringement on the Horizon in Canada?

In the companion decisions Rovi Guides v. Videotron, 2022 FC 981 and Rovi Guides v. Bell, 2022 FC 979, the Federal Court propped the door open to patent infringement by common design and infringement by attribution in Canada. Neither doctrine has been adopted into Canadian patent law but they are established in UK and US patent law.

Videotron and Bell were appeals from dismissed motions to strike allegations based on these doctrines. The appeals were heard consecutively and involved similar arguments, including that patent infringement by common design or attribution are not recognized in Canadian law and therefore Rovi’s allegations disclose no reasonable cause of action. The Court dismissed the appeals and allowed the allegations to proceed.

Common Design

Infringement by common design arises where “a party is found to be a joint tortfeasor when another party commits the tort in furtherance of a common plan. An essential element of the common design is that the parties must agree on a common action and the act of infringement must be in furtherance of that agreement. There must be a common design to do the act that is alleged to infringe.”

The reasons of the Case Management Judge (CMJ) considered the UK Supreme Court decision Fish & Fish Ltd v Sea Shepherd UK, [2015] UKSC 10 as the leading authority on the tort of common design. He found common design has been contemplated by the Court in two patent infringement matters in Canada (though no finding of infringement was made on that basis in either case; Packers Plus v Essential Energy, 2017 FC 1111 and Genentech v Celltrion, 2019 FC 293). The CMJ concluded that pleading common design in a patent infringement action is open to Rovi and declined to strike those allegations.

On appeal, Brown J. found proper application of the principles underlying allegations of common design and no errors in the CMJ’s reasons. The Court also rejected Videotron’s argument that pleading common design in Canadian and UK law requires identification of a “primary tortfeasor”. The Court thus rejected the argument that Rovi’s pleadings were insufficient for failing to identify a primary tortfeasor.

Attribution

Infringement by attribution is a similar doctrine recognized in other jurisdictions. The doctrine is aptly described in the U.S. case, Akamai Technologies Inc. v Limelight Network, 797 F.3d 1020 (2015), which the Court referred to in Videotron:

… Where more than one actor is involved in practicing the steps, a court must determine whether the acts of one are attributable to the other such that a single entity is responsible for the infringement. We will hold an entity responsible for others’ performance of method steps in two sets of circumstances: (1) where that entity directs or controls others’ performance, and (2) where the actors form a joint enterprise…

In essence, direct infringement requires a single entity to perform all of the steps of a method claim. However, as described in Akamai where the steps of a method claim are divided between two or more actors the concept of attribution arises by way of indirect infringement by one of the actors.

While the doctrine has never been considered in a patent infringement case in Canada, Brown J. affirmed the CMJ’s finding that, in addition to being recognized in U.S. patent law, it is a well-established principle in Canadian tort cases of joint and vicarious liability. Brown J. agreed that importing it into the Canadian patent infringement framework “is novel [and] should not be struck because it cannot be determined to be without any prospect of success at this stage”.

On appeal, the Court agreed with Rovi’s submissions that available infringement remedies are inadequate in Canada and that Rovi’s attribution pleading constitutes “an incremental development in the law”:

… [T]here are currently inadequate remedies available to patentees in Canada to address the harm caused when the essential elements of a claim are executed by two parties that are connected in their purpose or in other ways. This gap in jurisprudence opens the door for parties to potentially circumvent patent claims by working with a third party or relying on a third party to fully implement an invention. In a world where inventions are increasingly implemented across networks, including mobile devices and individual users’ equipment, there is a need for patent law to evolve and adapt.

The Court also dismissed Videotron’s argument that Rovi’s attribution allegations sought to import a rejected theory of contributory infringement into Canadian law, finding that “direct infringement by attribution is a distinct cause of action from contributory infringement” and that “Canadian courts have only considered limited arguments regarding contributory infringement and have not closed the door to any and all form of divided infringement in Canada”.

The Court found no error in the CMJ’s decision and underscored that: “a motion to strike is a serious remedy – often described as a ‘draconian measure’ – that should only be taken in the ‘clearest and most obvious cases’”.

Both appeals were dismissed. The decisions can be found here (Videotron) and here (Bell).