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 Appeal, Canada [2024]: Rovi Guides, Inc., et al, v Telus Corporation, et al, 2024 FCA 126
Date of judgment: August 6, 2024
Issuing authority: Federal Court of Appeal, Canada
Level of the issuing authority: Appellate instance
Type of procedure: Judicial (Administrative)
Subject matter: Patents (Inventions); Enforcement of IP and Related Laws
Appellants: Rovi Guides, Inc. and TIVO Solutions Inc.
Respondents: TELUS Corporation, TELUS Communications Inc., TELUS Communications Company, and Bell Canada
Keywords: Patent infringement, Patent validity, Obviousness, Injunctive relief, Permanent injunctions
Basic facts: Rovi Guides, Inc. and its subsidiary, TIVO Solutions Inc. (the appellants), appealed from the judgment of the Federal Court in Rovi Guides, Inc. v. Bell Canada, 2022 FC 1388.
In that dispute, the appellants initiated legal action against TELUS Corporation, TELUS Communications Inc., TELUS Communications Company, and Bell Canada (the respondents) for patent infringement. All the patents concerned interactive television program guide technology, which allows users to interact with a digital interface to browse, select, and record TV programs.
Rovi Guides, Inc. claimed that TELUS and Bell had incorporated features into their IPTV services that infringed on its patents. The respondents denied the infringement allegations and counterclaimed for declarations of invalidity and non-infringement, arguing that the patents were either anticipated by prior art or obvious based on common general knowledge in the field.
At the trial level, the Federal Court dismissed Rovi’s claims for patent infringement and granted the respondents’ counterclaims for declarations of invalidity and non‐infringement in respect of several claims in Rovi’s Canadian Patents Nos. 2,339,629, and 2,425,482, 2,336,870 (the 870 Patent), and 2,514,585 (the 585 Patent).
The court found that the patents were either anticipated or obvious, and some claims were also not infringed. In addition, the Federal Court concluded that even if the patents had been valid and infringed, Rovi Guides, Inc. would not have been entitled to an accounting of profits or a permanent injunction.
Rovi Guides, Inc. appealed the Federal Court’s decision, challenging the findings of obviousness and anticipation, particularly regarding the 870 and the 585 Patents. The appellants argued that the Federal Court had made errors in its analysis of the obviousness of the 870 and the 585 Patents and in its anticipation analysis in respect of the 585 Patent.
Rovi Guides, Inc. also contended that the trial court had erred in determining the appropriate remedies, specifically the denial of an injunction and accounting of profits.
Held: The Federal Court of Appeal (FCA) upheld the trial court's decision, affirming that the Federal Court did not make any reviewable errors in its obviousness analysis regarding the 870 Patent or in its anticipation analysis concerning the 585 Patent.
However, the FCA noted that some of the Federal Court’s provisional findings on the remedy required correction. Despite these corrections, the FCA concluded that the changes did not affect the overall outcome of the case, and the appeal was still dismissed.
Relevant holdings in relation to permanent injunctions: The FCA dismissed the appeal concerning the grounds of obviousness and anticipation, determining that there were no substantial grounds for challenge. However, the FCA took the opportunity to address significant errors made by the Federal Court in its remedial analysis, particularly in relation to the denial of an accounting of profits and injunctive relief, had the patents been deemed valid (para. [100]).
In relation to the Federal Court’s refusal to grant permanent injunction, Rovi Guides, Inc. advanced multiple arguments, asserting that the lower court erred by:
· adopting, for the first time in Canadian jurisprudence, the U.S. approach to the grant of a permanent injunction set out in eBay Inc. v. Merc-Exchange, LLC, 547 US 388 (2006);
· articulating the principle that patentees who practice their inventions in Canada through licensees should not be entitled to injunctions;
· misapplying the U.S. doctrine of patent holdup as a rationale for denying the injunction;
· denying the injunction on the basis of the imminent expiration of the 585 Patent, to spare the defendants, Bell and Telus, from compliance costs; and
· concluding that an injunction would result in “overcompensation” due to Rovi’s alleged delay (para. [102]).
The FCA agreed with Rovi’s contention that permanent injunctions are rarely denied to successful patentees in Canadian patent law when infringement is established. The term “rarely,” however, signifies that courts retain discretionary authority to refuse such relief in exceptional cases, provided the denial is not arbitrary and is grounded in sound reasoning. The court referenced established equitable principles, noting that discretionary factors such as delay, unclean hands, hardship, and impossibility of performance may justify the withholding of injunctive relief. These principles are rooted in established jurisprudence, including Berryman’s Law of Equitable Remedies and relevant case law (para. [119]).
The FCA further clarified that, while the U.S. decision in eBay Inc. v. Merc-Exchange, LLC introduced a four-factor test for granting permanent injunctions, particularly emphasizing irreparable harm, this approach has not been formally adopted by Canadian courts. The U.S. approach requires the patentee to demonstrate irreparable injury, inadequacy of monetary damages, a balance of hardships, and that the public interest would not be disserved by an injunction (para. [120]).
In contrast, in Canada, there is no separate requirement to demonstrate irreparable harm, nor is there an explicit need for balancing factors, in the legal test for granting a permanent injunction, unlike what is necessary for an interlocutory injunction (para. [122]).
The FCA emphasized that despite the discretionary nature of injunctive relief, it remains the principal remedy in patent law to prevent ongoing infringement for the remainder of a patent’s term. Absent exceptional circumstances that would render such relief inequitable, patentees in Canada generally have a legitimate expectation of being granted an injunction upon the finding of infringement, including when the patent is nearing expiry (paras. [122-126]).
Relevant legislation: