• Successful Defendant Awarded Costs Elevated by 50% for Most Issues and on Solicitor-and-Client Basis for Withdrawn Punitive Damages Claim
  • January 30, 2017 | Authors: Jillian Brenner; Adrian J. Howard; Beverley Moore; Chantal Saunders
  • Law Firm: Borden Ladner Gervais LLP - Ottawa Office
  • Mediatube Corp. v. Bell Canada, 2017 FC 6

    In this infringement action, the Court held the patent at issue valid and not infringed. The Court noted that there were unusual developments over the course of this litigation, which had the effect of morphing this patent infringement matter to one of allocation of costs. As a result, the Court devoted more discussion to costs than would normally be warranted.

    In awarding costs, the Court considered the factors as listed in Rule 400(3) of the Federal Courts Rules, and particularly Rules 400(3)(i) and (k). As a general rule, Bell having successfully defended itself from the patent infringement allegations, was entitled to have its costs. However, the Court addressed various arguments that might suggest straying from the general rule.

    One unusual development in this case included a series of changes to Bell's discovery answers following the second round of discoveries, referred to as the “Corrected Information”. The Court declined to make any special award of costs against Bell for the Corrected Information, First, the Court found that Bell acted in good faith in answering discovery questions and in providing the Corrected Information. Furthermore, the Court noted that the timing of Bell providing the Corrected Information made no difference between proceeding with the trial and reaching a settlement before trial. The case for non-infringement was so compelling that the Court was unprepared to accept that the Plaintiffs had a reasonable belief that they had a good arguable case before receiving the Corrected Information.

    The Court also declined to award cost consequences against Bell for the allegation in its Statement of Defence that the Plaintiffs are patent trolls, or for citing 753 prior references and waiting until about three months prior to trial (after the exchange of expert reports) to identify references on which it intended to rely at trial.

    In respect of cost consequences against the Plaintiffs, the Court awarded costs elevated by 50% to reflect the weakness of the Plaintiffs' case for infringement. The Court found that the Plaintiffs commenced and pressed forward with their infringement allegations against Bell Aliant in the face of information indicating that Bell Aliant was not infringing. Furthermore, the Plaintiffs commenced the action against Bell Canada without a clear theory of infringement, and the eventual theory they did form was weak.

    The Court also awarded Bell its costs on a solicitor-and-client basis in relation to the punitive damages claims. The Court noted that a considerable amount of time was spent during the trial, and in preparation for trial, on the Plaintiffs' claim for punitive damages. The Plaintiffs withdrew their punitive damages claim based on its own evidence, and before Bell adduced any evidence on the issue. This indicated to the Court that the Plaintiffs had access to information that Bell was neither dishonest nor fraudulent prior to commencement of this action.