The Dow Chemical Company et al v Nova Chemicals Corporation, 2017 FC 350

Justice Fothergill - 2017-04-19

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In this reference decision (see liability decisions 2014 FC 844) and 2016 FCA 216) related to the appropriate calculation of the defendant's profits to be paid as a result of patent infringement for a patent directed to polyethylene. It also concerned liability for certain disputed additional grades. The Court found that the disputed grades were already encompassed by the liability decision or in the alternative, that it would not be fair and just to give effect to the equitable defence of res judicata, given Nova’s deliberate concealment of information pertaining to the disputed grades in the course of discovery. The Court determined an appropriate rate for a pre-grant reasonable royalty at 8.8%. The Court did consider a ramp up period in the but-for world. In determining Nova's costs, the Court considered Nova's actual costs to produce the ethylene used to produce the infringing product. The Court applied a full cost or absorption approach, where the profits to be disgorged are the applicable revenue less applicable variable, fixed, and a proportion of certain fixed and capital costs. The Court applied pre-judgment interest, compounding at 5% on the accounting of profits based on Nova's cost of its long-term debt. The Court found that the evidence supported the conclusion that Nova's profits were received and primarily retained in US dollars so the profits should be converted to Canadian dollars as of the date of judgment. The Court directed the parties' experts to calculate the sums owing based on the decision.

Decision relates to:


Canadian Intellectual Property