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By: Jonathan M.S. Woolley

Canada’s Patent Act gives patent-holders the exclusive right of “making, constructing and using” their inventions in Canada, for the life of the patent (20 years) ¹. Anyone who makes, constructs, or uses a patented invention, without authorization, has infringed the patent and is liable to the patentee for damages and other remedies under the Act ². But what happens if a Canadian defendant is selling the use of a patented invention to customers in Canada, but the infringing conduct was carried out by a third party, outside Canada? This was a question before the Federal Court last year in Adeia Guides Inc. v. Videotron Ltd. The Court recognized, for the first time, that two or more parties can be jointly liable for patent infringement by common design.

The plaintiff, Adeia Guides Inc., is a U.S. company that develops technologies in the field of digital entertainment. It owns, globally, thousands of patents covering various digital entertainment technologies, which it licenses to television service providers such as Bell, Rogers, Shaw, Cogeco, and the defendant, Videotron Ltd. Videotron is a Quebec company that carries on business providing cable television equipment and related services to customers in Canada.

Adeia claimed that four Videotron services infringed its patents. Among them was a service known as “Helix TV”, an internet-based television system operated by Comcast, a US-based third party to whom Videotron provides the content and associated descriptions and updates, while managing its own subscriber accounts.

The Federal Court found that Videotron’s Helix TV system infringed two Adeia patents. However, the Court had to consider whether Videotron was excused by the fact that it had sub-contracted aspects of its system architecture to a third party, Comcast. This required it to consider the “common design” theory of liability.

Under the doctrine of common design, a defendant can be held jointly liable with a principal tortfeasor if the two have combined to do acts which constitute a tort. It requires proof of two elements: the defendant must have (1) acted in a way that furthered the commission of the tort by the principal tortfeasor, and (2) done so in pursuit of a common design to commit the tort. Common design has been accepted in Canadian law in the context of legal other claims, but has never been the basis for a finding of patent infringement.

The Court found that, on the facts of the case, Videotron was liable for patent infringement on the theory of common design. Videotron had entered into an agreement with Comcast to deliver an internet-based TV service to Videotron’s customers. Comcast’s services were tailored to Videotron’s specific needs and requirements, with both Videotron and Comcast being actively engaged in providing the Helix TV system to Videotron’s customers. Videotron was thus said to be engaged in the acts of infringement. Moreover, Videotron could be held liable for patent infringement even without Comcast’s inclusion in the litigation as a defendant.

In the result, Videotron was found to have infringed two of Adeia’s patents through its contractual arrangement with Comcast. Adeia was awarded damages to be assessed, and a permanent injunction.

The Federal Court’s decision is important because it recognizes a new theory of joint liability patent infringement. The decision makes it clear that a party cannot escape liability by subcontracting out a portion of the infringing act. The Federal Court’s decision has been appealed, so this will not be the last we hear on the question of patent infringement by common design.

If you have any questions regarding this article, please contact the author, Jonathan M.S. Woolley, or any member of our Intellectual Property group.

[1] Patent Act, R.S.C. 1985, c. P-4, ss. 42 and 44.

[2] Ibid. at s. 55.