April 6, 2022
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Wi-Lan Inc. (“Wi-Lan”) has brought an action for patent infringement against Apple Canada Inc. and Apple Inc. (collectively, “Apple”), alleging that various Apple products that operate with the 4G and 5G technology infringe Wi-Lan’s ‘159 Patent.
Apple brought a bifurcation motion to have the issue of whether the patent is valid and infringed determined before and separately from all issues of remedies. In particular, Apple sought to bifurcate Wi-Lan’s right to an injunction, right to delivery up of infringing devices, right to elect between profits and damages, and the calculation of profits or damages. The Court noted that it was “highly unusual” for the issue of a Plaintiff’s right to an injunction to be deferred to the second phase of a patent infringement action.
The Court noted that there are factors that may be taken into account in determining whether to use its discretion to grant a motion for bifurcation, but that these are merely factors, and not part of a “test”. The ultimate question that must be answered is whether it is more likely than not that a bifurcation order would result in the just, expeditious and least expensive determination of the proceedings on its merits, so as to justify depriving the Plaintiff from its basic right to have all its issues resolved in one trial.
In an effort to avoid bifurcation, Wi-Lan offered to forego its claim for an accounting of profits, and to limit its claim for monetary relief to damages if the matter were not bifurcated. If bifurcation were ordered, Wi-Lan indicated that it would maintain its right to seek to elect between profits and damages.
With Wi-Lan’s concession in mind, the Court considered the various outcomes and determined that bifurcation would only result in savings if Apple were entirely successful at the liability phase. If Wi-Lan were to succeed in showing that some claims of the patent were valid and infringed, then a non-bifurcated action would represent substantial savings over a bifurcated action.
The Court was thus not satisfied that the proposed bifurcation would more likely than not lead to substantial savings of time or expenses whatever the outcome of the liability trial.
The Court was similarly not satisfied that it was in the interests of justice to bifurcate.
Apple argued that “proportionality”, in the context of the amended Rule 3(b) of the Federal Courts Rules, favoured bifurcation, but the Court found that Apple was unable to articulate “how a delayed, more complex assessment of remedies might be more proportional than a streamlined, immediate assessment of remedies”.
Apple also argued that the complexity and novelty of the Standard Essential Patent[1] and FRAND[2] royalty analyses favoured bifurcation. However, the Court noted that there is no support in law for bifurcating issues merely because they are novel or difficult.
Lastly, the Court rejected Apple’s argument that bifurcation is just because it would not be in the public interest to grant an injunction at all. The Court noted that this argument presupposed a favourable determination of Apple’s arguments on the merits, which is not a factor that is to be considered on a motion to bifurcate.
Ultimately, the Court held that Apple had not met its onus to show that bifurcation would result in the just, most expeditious and least expensive determination of the issues on the merits, and the motion was dismissed.
Footnotes:
[1] The parties dispute whether the 159 Patent is a Standard Essential Patent.
[2] Fair, Reasonable and Non-Discriminatory (“FRAND”) terms. Apple submitted that at law, if a patent is a SEP, then the patent holder is not entitled to an injunction, to delivery up of the infringing devices or to an accounting of profits, and that its sole remedy for infringement is a royalty, which must meet FRAND terms.
Author: Samara Friszman