NATIONWIDE - CANADA: An Introduction to Intellectual Property: Litigation

The following trends are the ones to watch in 2025.

Patent Litigation

Patentability of methods of medical treatment

The Supreme Court of Canada is slated to consider the patentability of claims to “methods of medical treatment” in 2025. Although the prohibition against claims to “methods of medical treatment” was expressly removed from Canada’s Patent Act over 50 years ago, the patentability of such claims has continued to be contested. The Supreme Court’s decision – which could issue before the end of the year – may have an impact on claims to novel dosage forms, novel dosage regimens and potentially even claims to novel uses.

Broadening inducement

In the past few years, Canada’s Federal Court and Federal Court of Appeal have provided helpful guidance on the test for inducing infringement, particularly in respect of “skinny label” pharmaceutical patent cases. Arguably, the Courts have broadened the types of activities that may constitute inducement and refocused on first principles of legal causation. Infringement by inducement is expected to continue to be a hot topic with additional “skinny label” cases progressing towards trial.

Overbreadth and indefiniteness

Classical invalidity attacks including anticipation (lack of novelty), obviousness and insufficiency continue to be routinely asserted in Canadian patent litigation. However, additional judicial focus has been applied in the past few years to less common grounds such as indefiniteness/ambiguity and overbreadth (claims broader than what is disclosed or invented). The Federal Court invalidated claims on each of these bases in different cases in 2024, with appeals to the Federal Court of Appeal pending.

Trade Secret and Copyright Litigation

Dynamic site-blocking Orders

Orders compelling third-party internet service providers (ISPs) to dynamically block access to specific websites that are illegally distributing copyrighted content (site-blocking Orders) have become prevalent over the past few years. More recently, the Federal Court has issued site-blocking Orders which extend to future content as well as site-blocking Orders which extend to “copycat” sites of infringing websites. Continued use of these tools against piracy is expected in 2025.

Data scraping

In the past six months, multiple actions have been brought in numerous provincial superior courts by several parties in respect of data scraping (using software to automatically extract data from websites and online sources) including for the purposes of training artificial intelligence (AI) models. Canada’s Federal Court has previously issued an order (on consent) declaring data scraping to constitute a breach of proprietary rights and copyrights. Further guidance on these issues is expected as the actions work their way through the various courts.

Increase in breach of confidence claims

With the advent of AI, and the restrictive approach in Canada to the patentability of claims to business methods and computer-implemented inventions, innovative companies are increasingly relying on trade secret and other proprietary rights to protect key intellectual property (IP) assets. With that, an increase in trade secret, breach of confidence and spring-boarding claims are expected to be brought in Canada.

Trade Mark Litigation

Increase in interlocutory injunctions

Interlocutory (preliminary) injunctions in trademark cases (and in other intellectual property (IP) cases) have historically been difficult – if not near impossible – to obtain due to the stringent requirement of establishing that irreparable (non-monetary) harm would result if an injunction were not issued. Provincial superior courts have been more amenable to issuing interlocutory injunctions in trade mark cases, with various such courts issuing them in the past few years. This trend is expected to continue.

Admissibility of survey evidence

Over the past several years, Canada’s Federal Court (and appellate courts) have scrutinised the design and execution of survey evidence intended to assess trademark confusion. This trend is expected to continue. In 2024, the Federal Court issued a decision finding that, to be admissible, survey evidence must be relevant – that is, reliable and valid. If the survey design is flawed in a manner that affects its reliability, then the survey may not be admissible evidence (as opposed to being a matter of the weight accorded to the evidence). The decision is under appeal to the Federal Court of Appeal.

Changes to opposition and Section 45 (non-use cancellation) procedures

Various changes to the legislation and practice guidelines governing opposition and non-use cancellation proceedings (Section 45 Proceedings) – which take place at first instance before the Registrar of Trademarks (Registrar) – will come into effect in 2025. As of 1 April, the Registrar will have the power to case manage oppositions and Section 45 Proceedings as well as issue costs awards and confidentiality orders. Separately, the Canadian Intellectual Property Office has begun a pilot project whereby the Registrar proactively sends non-use cancellation notices to registered trade mark owners requiring them to prove that they recently used their marks in Canada, or risk losing their registration. Historically, this only occurred if third parties requested initiation of Section 45 Proceedings.

Federal Court Practice and Procedure

Most Canadian IP litigation is brought in Canada’s Federal Court. IP cases brought in the Federal Court are adjudicated via bench trials – there are no juries.

Increased costs awards

In Canada, the losing party typically must pay “costs” to the winning party. Costs include a “legal fee” component (a portion of legal fees incurred by the successful party) and reasonable disbursements. Historically, legal fees have been awarded on a tariff that sets a scale of costs for specific procedural steps (which often resulted in costs orders equating to less than 20% of actual legal fees incurred). More recently, Canada’s Federal Court has been issuing costs awards in IP matters as a lump sum based on a percentage of actual incurred legal fees as opposed to being based on the tariff. Lump sum costs awards now approach amounts similar to those issued in Ontario’s Superior Court of Justice, with several lump sum awards for partial indemnity in the range of 25% to 35% of actual costs and as high as 66% of actual costs. Separately, the Federal Court is considering increasing its tariff amounts by up to 25%.

Selective summary adjudication

A significant increase in summary judgment motions and summary trials was seen in IP matters a few years ago. With several such summary motions and trials dismissed and, in some instances, resulting in “boomerang” outcomes (summary trial or judgment is granted but against the moving party), fewer parties are seeking summary adjudication in Canadian Federal Court actions. This trend is expected to continue in 2025.

Restrictions on examinations for discovery

Canada’s Federal Court recently revised its practice guidelines applicable to most IP actions as well as cases brought pursuant to Canada’s Patented Medicines (Notice of Compliance) Regulations (Canada’s ANDA litigation). One aim of the revisions is to move cases through discovery more efficiently and quickly to drive settlements earlier. The Federal Court has also signalled a desire to limit parties’ ability to refuse to answer questions on examinations for discovery (depositions) and streamline follow-up examinations.