When Intellectual Property Proceedings Go Too Slowly

What happens when an intellectual property enforcement proceeding takes too long? Most IP cases in Canada take place in the Federal Court where the rules around dismissals for delay are different than in the provincial superior courts.

In the Ontario Superior Court, after a pandemic hiatus, the court is resuming administrative dismissals of civil cases that have not been set down for trial in a timely manner. As noted in the most recent , “Administrative dismissals under the court rules are intended to promote the timely resolution of legal disputes, discourage delays, and increase efficiencies in the court system.”

For intellectual property matters, the Federal Court has not traditionally administratively dismissed cases that are not moving along but instead uses other procedural tools to address these cases.

Under the Federal Courts Rules, there are two automatic triggers for slow moving cases. First, if no statement of defence has been filed within 180 days of the statement of claim, then a status review can be triggered under Rule 380(1)(a). Second, if 360 days have passed since the statement of claim and there has not been a requisition for a pre-trial conference, then the case is ordered into case management.

However, for intellectual property cases, most cases are already case managed. Case management of intellectual property cases in Federal Court is common with most cases entering case management early on, either on consent of all parties or upon request of one of the parties. For actions under the Patented Medicines (Notice of Compliance) Regulations, the court’s practice direction requires that a request for case management should be made within 7 days of a notice to respond so all such actions are case managed.

For those proceeding not in case management, the appointment of a case management judge will typical start with a direction for the parties to provide a status update and availability for a case conference. If a party is not moving a case forward under case management, then a status review can still be ordered under Rule 385(2).

In a status review, whichever party is in default of the timelines under the rules is required to explain why “the proceeding should not be dismissed for delay” or, if the defendant is in default, why “default judgment should not be entered.”

The Federal Courts Rules also have a provision that allows a defendant not in default to seek to have a case dismissed if there has been ‘undue delay’ by the plaintiff. The Court considers whether there has been ‘undue delay’, whether the delay is excusable, and whether the respondent are likely to be seriously prejudiced by the delay. However, the Federal Court of Appeal (see Sweet Productions Inc. v. Licensing LP International S.À.R.L., 2022 FCA 111 at 44) has found that even if there has been undue delay, dismissal is not the presumptive remedy and the court should consider appropriate remedies.

While it is rare for intellectual property cases to be dismissed for delay, because the role of case management, a recent decision showed that it can happen. In Vermillion Networks Inc. v. Green Circle Ideas Inc., 2024 FC 579, after several years, a status review resulted in the exchange of submissions and the case being dismissed for delay when the applicant could not persuade the court that there was a serious intention to advance the proceeding or overcome the finding of prejudice to the respondent.

While the Federal Court, particularly through case management is often flexible with the pace of cases, a plaintiff should continue to move the case forward as there is a risk that the case could be dismissed, particularly if significant time has passed and case management deadlines have not been met.

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