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The Superior Court of Quebec Says Yes to the Issuance of an Interlocutory Injunction in a Patent Infringement Litigation

Fasken
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The Quebec Superior Court issues an interlocutory injunction ordering a competitor to cease marketing products alleged to infringe a patent

On January 9, 2018, the Superior Court granted an interlocutory injunction sought by a Quebec company against a competitor, who was ordered to cease manufacturing and marketing products that infringed one of the company's patented inventions. The decision adds to the very short list of patent cases in which an interlocutory injunction has been granted in recent years.

Fasken represents Thermolec Ltée, the Quebec company that successfully asserted its intellectual property rights in this case.

Background

Thermolec Ltée (Thermolec), which was founded in 1973, develops and manufactures heating, ventilation, and air conditioning systems, including electric heating coils. Thermolec's founder invented a revolutionary system that acts on the heating capacity of electric heating coils. Thermolec acquired a patent on this invention, and the application for an interlocutory injunction sought to enforce the rights under that patent.

Stelpro Design inc. and Gestion Stelpro inc. (Stelpro) are competitors of Thermolec in that they also market electric coils.

Thermolec learned of the existence of the electric coils manufactured by Stelpro when Stelpro began bidding on the same tenders as Thermolec. Thermolec realized that Stelpro was bidding at a substantially lower price, thereby drawing in the clientele that Thermolec had built up over the years.

Thermolec ordered Stelpro's electric coils and discovered that they were equipped with a system that was identical in all respects to the patent-protected system developed by Thermolec. Thermolec therefore applied to the Superior Court in order to stop this unfair competition and violation of its intellectual property rights.

In Thermolec Ltée v. Stelpro Design inc.,[1] Justice Michel Déziel granted the interlocutory injunction and ordered Stelpro to cease manufacturing and marketing any product that infringe Thermolec's patent.

Interlocutory injunction for infringement of intellectual property rights

Common law jurisdictions favour performance by equivalence and thus the award of damages. Quebec, a civil law jurisdiction, grants creditors the right to apply for specific performance of the obligation by the debtor, including by an interlocutory injunction order.

That is why, in certain circumstances and particularly when the company operates mainly in Quebec, the Quebec courts may be a better forum to put an expeditious stop to the infringement until a final judgment is rendered.

Thermolec illustrates the potential advantage of an action in the Quebec courts rather than in the Federal Court in intellectual property rights infringement cases, since the Federal Court favours hearings on the merits over interlocutory applications.

Appearance of right: presumption of validity of the patent and prima facie evidence of infringement

To demonstrate that its competitor's electric heating coils were identical in all material respects to its patented system, Thermolec called two engineers as expert witnesses. Stelpro also called an expert to support its allegations that there were sufficient distinctions between its system and the system patented by Thermolec.

Justice Déziel summarized their remarks in setting out the parties' arguments, but concluded that at the interlocutory stage, he must refrain from ruling on the merits of the case.[2] Considering the presumption of validity of the patent and the prima facie evidence of infringement that had been submitted by Thermolec, the Superior Court did not accept Stelpro's allegations. Justice Déziel concluded that Thermolec and its experts had made out a prima facie case that Thermolec's invention was protected by a patent and that it had a serious appearance of right.

Irreparable harm is shown when a patent is infringed

The Superior Court concluded that when a patent is infringed, as is the case when a trademark or a copyright is infringed, harm is shown.

The Superior Court also concluded that in addition to the infringement of its patent, Thermolec suffered a loss of clientele, given that it was no longer able to enjoy the monopoly granted by its patent. Justice Déziel therefore had no hesitation in concluding that Thermolec would suffer serious and irreparable harm if the injunction was not granted.

This decision of the Superior Court follows essentially the same reasoning as in the judgment rendered six months earlier in Cedrom SNI inc v. La Dose Pro inc.[3] In Cedrom, the Superior Court granted an interlocutory injunction ordering two media-monitoring websites to cease the use and reproduction of the copyright-protected works of employees of three major Quebec newspaper publishers. For a more complete analysis of that decision and its implications for the recognition and scope of copyright in Quebec, see our bulletin: "Quebec Superior Court Rules on the Concept of Fair Dealing in Relation to the Substantial Reproduction of Journalistic Works".

The balance of convenience favours Thermolec

Although it was not necessary for the Superior Court to address this element of the test, it analyzed the importance of the patented system to Thermolec's business and compared it to the importance of the infringing system to Stelpro's business. Because electric heating coils equipped with the patented system represent at least 30% of Thermolec's sales while the infringing coils represent less than 5% of Stelpro's, the Superior Court had no hesitation in concluding that this criterion operated in Thermolec's favour.

Since all of the criteria needed to issue an interlocutory injunction had been established, the Superior Court granted the injunction and ordered Stelpro to cease manufacturing and marketing any product that infringed Thermolec's patent.

Lessons to be learned from Thermolec

First, Thermolec is one of the rare precedents among recent patent law decisions in which an interlocutory injunction has been granted.

Thermolec also confirms that the presumption of validity applies and that a prima facie demonstration of infringement is sufficient at the interlocutory stage. This decision follows the recent decision in Cedrom and recognizes the presence of prejudice upon the demonstration that  a patent has been infringed.

Accordingly, in light of Thermolec, it appears that in some circumstances an action in the Superior Court will be a useful alternative to actions traditionally brought in the Federal Court in the case of patent or copyright infringement.



[1] 2018 QCCS 901 [Thermolec].

[2] On that point, he cited Brassard v. Société zoologique de Québec inc., JE 95-1652 (CA), Chic Optic inc v. Safilo Canada inc., JE 2004-2233 (SC) (application for leave to appeal denied), and the recent decision of the Superior Court granting an interlocutory injunction in a copyright infringement case, Cedrom SNI inc v. La Dose Pro inc., 2017 QCCS 3383.

[3] 2017 QCCS 3383 [Cedrom].

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