Federal Court (per McHaffie J.) dismisses motion to bifurcate a patent infringement action due to insufficient evidence.
In Canada, the default process for patent infringement actions is that all issues are heard and decided together in a single trial. However, the Federal Court has a discretionary power to order that “issues in a proceeding be determined separately”. This is known as a bifurcation order.
Bifurcation of liability (i.e., construction, infringement, and validity) and remedial (e.g., damages or disgorgement) issues in patent cases is reasonably common. A party seeking this relief must establish on “a balance of probabilities that in the light of the evidence and all the circumstances of the case (including the nature of the claim, the conduct of the litigation, the issues and the remedies sought), severance is more likely than not to result in the just, expeditious and least expensive determination of the proceeding on its merits.” The power to grant a bifurcation order is rooted in the Federal Courts Rules (3 and 107), the jurisprudence, and the Court’s inherent power to control its own process.
In the present case, the plaintiff (Dr. Bessette) asserts that the defendant (British Columbia) committed acts of infringement by using his patented invention in its electronic health records system. BC denies these allegations and asserts that the Bessette patent is invalid.
BC filed a motion to bifurcate the issues of liability and remedy. The core of BC’s position was that the liability and quantification issues are particularly complex given the number of patent claims at issue and the architecture of its electronic health records system. BC filed expert and fact evidence in support of its position. Dr. Bessette resisted BC’s motion based primarily on the increased time and cost that would be associated with getting to an ultimate judgment in a bifurcated action. The motions judge (Tabib AJ) dismissed the motion because she was not satisfied that bifurcation would: (a) lead to an earlier trial on liability; (b) likely shorten the time needed to conduct discoveries on quantification; or (c) yield a substantial savings in the preparation of expert reports on quantification or trial time so as to outweigh the “inherent inefficiencies of bifurcation.”
On appeal, BC argued that the motions judge erred in law by requiring it to quantify the magnitude of the potential savings that would be achieved through bifurcation. The Court (per McHaffie J.) disagreed with this argument and held that the motions judge applied the correct approach to bifurcation motions, and made no palpable and overriding error in her assessment of the evidence.
The Court held that “where, as here, the primary benefit alleged to arise from bifurcation is in the form of timing or cost efficiencies or savings, it is incumbent on the moving party to satisfy the Court that those expected efficiencies or savings are sufficient to justify bifurcating the proceeding… [I]t is not enough for a party seeking a bifurcation order to simply show that some efficiencies or savings may or will be realized. Any such efficiencies or savings must be sufficient to justify the requested bifurcation order in the circumstances of the case, when considered with all other relevant factors, including the inefficiencies of multiple trials and a litigant’s basic, if qualified, right to a single trial.” There is no general obligation to “precisely or exactly quantify the anticipated savings in time or cost”, but it may be difficult “for the Court to assess whether alleged efficiencies or savings in time or cost are sufficient to justify bifurcation without at least some sense of the magnitude of those savings”.
Applying the law, the Court held that BC failed to meet its burden of showing that the “savings [arising from bifurcation] are substantial enough to outweigh the inherent inefficiencies of bifurcation” or, put another way, that “bifurcation is more likely than not to lead to the just, expeditious, and least expensive outcome of the proceeding”. The appeal was dismissed with costs of $3000 payable forthwith.