Canada

This is an informal case summary prepared for the purposes of facilitating exchange during the 2024 WIPO IP Judges Forum.

Session 6

Federal Court of Canada [2022]: Rovi Guides, Inc. v Bell Canada, 2022 FC 1388

Date of judgment: October 24, 2022

Issuing authority: Federal Court of Canada

Level of the issuing authority: First instance

Type of procedure: Judicial (Administrative)

Subject matter: Patents (Inventions); Enforcement of IP and Related Laws

Plaintiffs: Rovi Guides, Inc.; TiVo Solutions Inc.

Defendants: Bell Canada, TELUS Corporation, TELUS Communications Inc., TELUS Communications Company

Keywords: Patent infringement, Patent validity, Digital storage, Recording systems, Inventive step, Prior art, Obviousness, Anticipation

Basic facts:  Rovi Guides, Inc. and TiVo Solutions Inc. (the plaintiffs), two companies known for their extensive patent portfolios in the field of interactive television technologies, filed separate lawsuits against major Canadian telecommunications providers Bell Canada and TELUS Corporation in 2018.

The lawsuits centered on alleged infringement of four specific patents owned by Rovi and TiVo, which covered technology used in Interactive Program Guides (IPGs) and Internet Protocol Television (IPTV) services. These technologies were crucial for enabling users to manage and navigate television programming, record digital content, and interact with on-demand video services.

The technologies covered by Rovi's patents included advanced features such as the ability to:

·         Store television programming for later viewing via a digital storage system.

·         Simultaneously record multiple television programs.

·         View recorded or live content across different devices, enhancing user flexibility.

·         Use video-on-demand services with reduced latency through a caching mechanism.

·         Restart live television programs after they had already begun.

Both Bell and TELUS launched their IPTV services around 2010, with Bell Fibe TV and TELUS Optik TV, using technologies that Rovi Guides, Inc. claimed infringed on their patents.

Rovi Guides, Inc. and TiVo Solutions Inc. alleged that the IPTV services offered by Bell and TELUS made use of features that were covered under their four patents. They sought declarations that the patents were valid and infringed, as well as remedies such as damages or an accounting of profits. Rovi Guides, Inc. also sought a permanent injunction to prevent Bell and TELUS from continuing to use the technology.

In response, Bell and TELUS filed counterclaims asserting that the patents were invalid on various legal grounds. They argued that the asserted patent claims lacked novelty and were obvious in light of the prior art – existing technology and public knowledge available before the patent filing. The telecommunications companies relied on well-documented examples of earlier interactive television systems, IPG technology, and industry standards to support their position that Rovi's patents did not introduce any new or inventive steps.

Held: The court dismissed Rovi's claims, finding that none of the asserted patent claims were new or inventive. The patents were ruled invalid, and the counterclaims by Bell and TELUS for declarations of invalidity were granted.

Relevant holdings in relation to permanent injunctions: After a lengthy trial, the Court concluded that the patents were invalid and, therefore, not infringed. Nonetheless, the Court went on to address two potential remedies, should his assessment of the patents' merits prove incorrect: whether the plaintiffs, assuming the patents were valid and infringed, would be entitled to an accounting of profits and/or a permanent injunction. The Court indicated that he would have denied the plaintiffs both remedies, as he found the patent prosecution process involved unfair practices, which the court viewed as grounds to withhold such relief.

Denial of Permanent Injunction

Although permanent injunctions are typically expected in cases of patent infringement, the Court exercised his judicial discretion and denied the request for an injunction. The key factors in this decision included:

• Patent Holdup Tactics: The court identified significant delays in the prosecution of the patents in question, attributing this to "patent holdup" behavior. Rovi delayed the examination and issuance of several patents strategically waiting until competitors like Bell and TELUS had implemented the technologies before asserting claims. This was seen as a calculated tactic to extract licensing fees once competitors were deeply invested in the technology, a practice the court strongly disapproved of.

• Non-Practicing Entity (NPE): Rovi was classified as a non-practicing entity, meaning it did not directly compete with Bell or TELUS in the Canadian market. The court concluded that Rovi’s primary business model of licensing its patents did not justify an injunction, and that royalty payments would be sufficient compensation.

• Public Interest and Imminent Patent Expiration: The court highlighted the public interest, pointing out that a permanent injunction would disrupt IPTV services used by millions of Canadian consumers. Moreover, with Rovi's patents set to expire in 2024, the court deemed it unreasonable to force Bell and TELUS to redesign their systems for such a short period.

In conclusion, the court ruled that a permanent injunction would not serve the public interest and would reward Rovi's unfair practices. This decision underscores the importance of fair conduct during the patent prosecution process and signals that courts will weigh public interest and broader consequences before granting equitable remedies such as injunctions.

Relevant legislation:

·         Patent Act, RSC 1985, c P-4