Tuesday, September 21, 2021

Reasonable Royalty Requested Conditional on the Quantum of an Accounting

Deeproot Green Infrastructure, LLC v GreenBlue Urban North America Inc 2021 FC 501 McDonald J

2,552,348 / 2,829,599 / Integrated Tree Root and Storm Water System

Deeproot’s 348 and 599 patents relate to a landscaping system to promote healthy urban trees using a subsurface structural cell system that supports the hardscape (eg sidewalk and paving), enables stormwater retention and filtration as well as allowing tree roots to grow in uncompacted soil [227]. McDonald J held Deeproot’s patents to be valid and infringed, in a straightforward decision which turned entirely on the facts. Damages were not bifurcated, and one point of note is that “DeepRoot seeks an accounting of GreenBlue’s profits. Alternatively, if the Court determines that GreenBlue’s profits are less than $145,000.00, then DeepRoot seeks a reasonable royalty payment” [270]. I don’t think I’ve seen that kind of request in the alternative before. On the facts, McDonald J first examined the evidence related to GreenBlue’s profits. She was not satisfied that GreenBlue had in fact made a profit on the infringing sales, and she accordingly awarded reasonable royalty damages.

The determination that GreenBlue had not made any profits apparently turned in part on the holding in Nova v Dow 2020 FCA 141, discussed here, that “the ‘full costs’ approach should always be available to an infringer” [145]. Leave to the SCC has been granted in Nova v Dow and that issue may be addressed. However, the discussion was very brief and it is not clear how significant this was.

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