Recovery of Loss from Displaced Sales

Arysta Lifescience North America, LLC v AgraCity Crop & Nutrition Ltd 2019 FC 530 Pentney J
            2,346,021 / flucarbazone sodium herbicide / EVEREST

In Arysta v AgraCity the patentee, Arysta, sought, and was granted, an interim injunction, on the basis that AgraCity’s sale of a generic herbicide would infringe Arysta’s 021 patent. Yesterday’s post discussed the ability-to-pay aspect of the irreparable harm issue. On a separate point, AgraCity argued Arysta would not suffer substantial damages because the 021 patent only covers the granular or powder form of the herbicide.

AgraCity’s product is a generic of the EVEREST 1.0 granular product formerly sold by Arysta [9], but Arysta no now only sells a new and improved liquid product, EVEREST 3.0 [54]. AgraCity argued that because Arysta no longer sold a product embodying the patented invention, “any losses that may flow to Arysta from the sale of its generic product must be limited to a reasonable royalty” [54]. Pentney J rejected this argument, essentially on the basis that the patentee is entitled to any losses caused by the infringement; if the sale of the generic granular product displaced sales of Arysta’s liquid product, those losses would be recoverable [68]. I won’t go through Pentney J’s analysis in detail, except to say that it strikes me as entirely correct.