Canadian Court Issues First Information Technology Patent Decision Brought by Non-Practising Entity

On January 4, 2017, the Canadian Federal Court (FC) issued the first decision in Canada on the validity and infringement of an information technology patent owned by a non-practising entity (Media Tube Corp v Bell Canada, 2017 FC 6).  Media Tube Corp (Media Tube) owns Canadian Patent No. 2,339,477 (477 Patent) and Northvu Inc (Northvu) is the licensee.  The 477 Patent relates to a system allowing users to instantly access audio/video signals provided by any telecommunications or broadcast system using a single system over a single network of wires.  Media Tube and Northvu sued Bell Canada for patent infringement with respect to Bell Canada’s IPTV services called Fibe TV and FibreOP TV.  Bell Canada’s services involve sending digital signals, whereas the 477 Patent contemplates sending only analog signals.

The FC held that the 477 Patent was not infringed by Bell Canada and also dismissed Bell Canada’s invalidity attack on the grounds of anticipation, obviousness and inutility.

The FC found that the broad terms of the claims in issue are not plain and unambiguous, and therefore construed those terms in the context of the patent as a whole.  In particular, having found that the disclosure focused uniquely on analog signals and failed to make any suggestion of digital signals being the output, the FC held that the claims precluded digital signals.  The FC held that Bell Canada’s system did not contain any of the essential elements of the independent claim.

The FC did not accept that Bell Canada’s description of the plaintiffs as a “patent troll” would warrant aggravated costs, noting that this was more a question of opinion rather than fact.

Lastly, the FC ordered that the costs award to Bell Canada be elevated by 50% to reflect the plaintiffs’ weak infringement case and ordered that solicitor-client costs be awarded to Bell Canada on the unfounded punitive damages allegation made by the plaintiffs based on alleged dealings between the parties.

Summary By: Junyi Chen