Wednesday, 6 October 2010

Skating on thin ice? Liability for direct and indirect infringement in Canada

A recent Canadian Federal Court decision, Bauer Hockey Corp v Easton Sports Canada Inc (2010 FC 361), gives patent owners an extra option by affirming that a defendant can infringe both directly and, indirectly, through inducing and procuring a third party to manufacture a product in Canada (in this case, hockey skates) that incorporate the patent's invention. The action for inducement or procurement seems to be the product of a sort of reverse inference:
"In reviewing the jurisprudence, the court noted that there were no previous cases in which the court had stated clearly that a defendant could not infringe by inducement or procurement unless it knew of the patent at issue. The court commented that it is important to consider that inducing and procuring another party to make or construct a patented invention is not a tort distinct from that of direct infringement".
But what level of intention and knowledge would a patent owner need to prove?
"The court held that there was no legal rationale for requiring an intention to infringe on the part of an inducer or procurer when there was no such requirement for a direct infringer. By contrast, ...the court agreed that the inducement must be done knowingly or deliberately. In effect, it would be unjust to find a party guilty of infringement by inducement if that party did not know that its actions would induce another to do something that would later be held to constitute infringement.  ... to require infringement by inducement and procurement to be carried out not only deliberately but also with knowledge of the patent at issue would create an unwarranted and unjustifiable distinction between companies that manufacture their own products (direct infringement) and those that choose to have them manufactured by others according to their detailed specifications (inducing infringement).

... This decision establishes ... that the test for establishing infringement by inducement and procurement does not require the inducer to have prior knowledge of the patent at issue".
The decision is under appeal.

Source: "Liability for inducing infringement does not require prior knowledge of patent", article by Daniel M. Anthony (Smart & Biggar/Fetherstonhaugh) for International Law Office, 27 September 2010.

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