In Canada, when one thinks of intellectual property disputes, the Federal Court invariably comes to mind. It may therefore be surprising to find that the Federal Court and the Provincial Courts share jurisdiction for most matters pertaining to intellectual property. The statutory basis for this concurrent jurisdiction is found in section 20(2) of the Federal Court Act, which states:
(2) The Federal Court has concurrent jurisdiction in all cases, other than those mentioned in subsection (1), in which a remedy is sought under the authority of an Act of Parliament or at law or in equity respecting any patent of invention, copyright, trademark, industrial design or topography referred to in paragraph (1)(a).
However, despite not being the only court on the block, the Federal Court continues to hear the majority of intellectual property disputes. This is largely due to three factors.
In rem versus in personam. First, only the Federal Court has the jurisdiction to impeach, invalidate or expunge intellectual property. Section 20(1) of the Federal Court Act provides that:
The Federal Court has exclusive original jurisdiction, between subject and subject as well as otherwise,
(a) in all cases of conflicting applications for any patent of invention, or for the registration of any copyright, trademark, industrial design or topography within the meaning of the Integrated Circuit Topography Act; and
(b) in all cases in which it is sought to impeach or annul any patent of invention or to have any entry in any register of copyrights, trademarks, industrial designs or topographies referred to in paragraph (a) made, expunged, varied or rectified.
This gives the Federal Court the jurisdiction to make findings that are in rem (“against the thing”), meaning that the finding is directed toward the intellectual property itself. In the case of a patent, a determination by the Federal Court that certain claims of a patent are invalid prevents the patentee from further asserting those claims against other defendants. In contrast, invalidity findings in Provincial Courts are said to be in personam (“against the person”), meaning they are directed toward the parties involved in the litigation. Taking the above example, an in personam invalidity finding does not necessarily preclude the patentee from asserting those same claims against different defendants in the future, provided the common law doctrine of abuse of process/issue estoppel is not engaged.
Thus, at least on paper, the Federal Court clearly can provide more comprehensive intellectual property remedies. However, is this really an advantage? From a plaintiff’s perspective, proceeding in the Federal Court means risking an in rem determination that their intellectual property is invalid, a scary proposition at best. Alternatively, a finding of invalidity in a Provincial Court would be on an in personam basis. Potentially, their intellectual property lives to fight another day.
Tradition and experience. The second major reason why the Federal Court is the venue of choice for intellectual property disputes is tradition. Given that the vast majority of intellectual property matters have proceeded in the Federal Court in the past, the Federal judiciary has a great deal of experience and litigants/litigators are comfortable with the forum. From the perspective of the parties involved, this means less time spent bringing judges up to speed on the relevant law and, perhaps, a more predictable experience.
National jurisdiction. Finally, the Federal Court’s jurisdiction extends to all provinces. This is helpful in the case of injunctions where an order obtained from the Federal Court can be enforced nationwide. That being said, there is some case law to suggest that, at least in Quebec, the irreparable harm component of the interlocutory injunction test is easier to meet at the provincial level (see for example, Lampe Berger Canada Inc. v. Pot Pourri Accent Inc. (2005), 49 C.P.R. (4th) 369). Thus, the provincial route may be worth investigating where the infringer’s manufacturing base is located in or the infringement is highly localized to a specific province.
So, while the Federal Court continues to be the major venue for intellectual property disputes, the Provincial Court – at least in some cases – might be an attractive alternative. In fact, the Provincial Court might be the only option for disputes that are strongly contractual in nature, such as title disputes based on employment contracts or disputes over license agreements. Also, disputes based on tortuous activities such as misappropriation of trade secrets or common law passing off must be dealt with in the Provincial Courts. However, where these issues are ancillary to predominantly intellectual property matters, they may potentially be dealt with by the Federal Court. The choice appears to be equivalent to six of one and a half dozen of the other.