Intellectual Property Litigation
Intellectual property litigation involves allegations of the unlawful infringement of a party’s exclusive rights in:
- industrial designs;
- trade secrets; and/or
- confidential information.
Generally, the primary purpose of such a lawsuit is to seek an injunction from the courts preventing or prohibiting further infringement of the injured party’s exclusive rights. The secondary purpose is for the injured party to recover profits or damages from the infringing party for any past infringement.
Since the parties are often competitors in the marketplace, they may be highly motivated to succeed in such litigation. In some cases, the potential profits and losses are substantial. Consequently, such litigation can be highly adversarial.
Cease & Desist Letters
In most cases, a lawsuit is preceded by the exchange of correspondence between the parties to determine whether the dispute can be amicably resolved without the expense and risk of court proceedings.
The intellectual property owner (or their legal counsel) will first send a cease and desist letter to the allegedly infringing party. This letter generally serves two purposes:
- alerting them of the alleged violation; and
- requesting their voluntary compliance with a set of demands, which may or may not include the payment of a sum of money for damages or unlawful profit.
The recipient may or may not respond. Any response is then evaluated to determine whether a lawsuit is warranted or the parties should pursue settlement negotiations.
Like other forms of litigation, an intellectual property lawsuit is formally commenced when the allegedly injured party files a written claim with a court. In Canada, most intellectual property lawsuits are decided by the Federal Court and, on average, take from one to three years to complete if pursued through to the conclusion of a trial.
In intellectual property disputes, it is not uncommon for trials to be divided into two parts. This is referred to as bifurcation order.
Where such an order has been issued, the trial will address only the validity of any intellectual property registration and the liability of the defendant for infringement. If the registration is upheld as valid and the defendant is found to be infringing the plaintiff’s exclusive rights, a reference is then conducted to determine the nature of the relief to be awarded, including:
- the terms of any injunction; and
- the sum of any monetary damages to be awarded to the plaintiff.
Motions & Summary Judgment
In intellectual property litigation, the first question for the plaintiff to address is whether to seek an interlocutory injunction restraining the defendant's actions pending trial. The courts are generally reluctant to grant such injunctions unless the alleged infringement is obvious. If granted, the plaintiff will be required to compensate the defendant for any losses it suffers if the defendant successfully defends itself and the injunction is overturned after a trial.
At almost any point in a lawsuit the parties may seek interim orders from the court by way of a motion to resolve procedural disputes.
Summary judgment may also be sought by either party by way of a motion at almost any point in a lawsuit. However, such a motion will only be successful if the court is satisfied that there are no genuine issues in dispute that require a trial. Where findings of fact are dependent on the credibility of witnesses, a motion for summary judgment is unlikely to be successful.
The parties are strongly encouraged to consider the options for settlement at every stage of a lawsuit. Indeed, most lawsuits settle prior to trial.
The court rules and procedures are designed to ensure that the parties are fully aware of the risk of success or failure prior to trial and to reward parties who make reasonable offers to settle that avoid an expensive trial.
The options for the settlement of any lawsuit should be canvassed early and often.