Canada: Encouraging cost award trend emerging

Managing IP is part of Legal Benchmarking Limited, 1-2 Paris Gardens, London, SE1 8ND

Copyright © Legal Benchmarking Limited and its affiliated companies 2026

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Canada: Encouraging cost award trend emerging

Enforcement of IP rights can sometimes culminate in litigation. In Canada, as in most jurisdictions, litigation related to IP is rarely inexpensive, with significant costs incurred for both counsel fees and for disbursements as varied as travel, scientific testing and the engagement of expert witnesses. Fortunately, in Canada successful parties are generally entitled to compensation for the costs of bringing their case. Indeed, most IP litigation in Canada occurs in the Federal Courts which have recently evinced an increasing willingness to ensure the adequacy of that compensation even in the most complex cases.

Canada's various courts usually provide some scheme for awarding costs. In the Federal Courts, cost awards include a component compensating for a portion of counsel fees and a component for reasonable and necessary disbursements. The fee component usually follows a tariff which sets out a range of set amounts for particular litigation activities and is intended to provide predictability while also accommodating varying degrees of case complexity. The fixed amounts are usually lower than actual costs and can be viewed as a compromise between compensating a successful party and not unduly burdening the other side.

The court is not, however, bound to apply the tariff and can choose to substitute a lump sum award proportionate to the counsel fees actually incurred by the prevailing party. Nonetheless, the tariff has typically been followed historically, with the complexity of cases such as those involving patents reflected in an award tending toward the higher end of the tariff.

Recently, however, a trend appears to be emerging where the Federal Court is shifting towards awarding lump sum costs that are higher than provided for under the tariff. The recent case of The Dow Chemical Company v Nova Chemical Corporation offers a prime example.

In that case, Dow alleged that the manufacture of certain polymers by Nova infringed a patent held by Dow. Nova counterclaimed alleging the patent was invalid. Ultimately, the court held that Dow's patent was both valid and infringed and that Dow was therefore entitled to remedies and an award of costs. In determining the latter, the Court considered the tariff but found that even its highest end would be "totally inadequate" in the circumstances of the case. The Court thus declined to follow the tariff and instead awarded Dow costs of C$6.5 million ($5 million), including a lump sum of C$2.9 million for legal fees and a further C$3.6 million for reasonable and necessary disbursements including certain in-house testing. The fee award was particularly significant and amounted to approximately 30% of Dow's actual counsel fees. The cost award was upheld on appeal.

This emerging trend is encouraging and may be an indication of a new willingness on the part of Canada's courts to provide adequate compensation for costs incurred by successful litigants in complex litigation such as the enforcement of IP rights.

Neil L Padgett


Smart & Biggar/ Fetherstonhaugh55 Metcalfe Street Suite 900PO Box 2999 Station DOttawa ON  K1P 5Y6Tel: 613 232 2486Fax: 613 232 8440 ottawa@smart-biggar.cawww.smart-biggar.ca

more from across site and SHARED ros bottom lb

More from across our site

Apple’s lawsuit against OpenAI, which features Tier 1-ranked disputes firms on both sides, reflects how trade secrets litigation is becoming a prominent competition feature
Drew & Napier’s leadership appointments show one way full-service firms can back up claims about the strategic importance of IP
Strike-out application will hear claims that the copyright aspect of an IP infringement claim brought by a gambling and sports betting group should be dropped
Amongst a sea of mergers, Lathrop GPM and HG Law have set out plans to combine, positioning themselves to compete with both IP boutiques and full-service firms
Patrícia Paias explains why she loves the science and business behind an idea and why potential rights owners must avoid the ‘file and forget’ philosophy
Lawyers eagerly await news of what IP specialist Sir Colin Birss will bring to one of the England and Wales judiciary’s most important roles
María Aurora García of Berken IP explains how intellectual property rights holders can use customs monitoring and online enforcement tools to identify parallel imports and support compliance with consumer protection rules
The Jakarta-based firm says personal networks and a distinctive strategy can help it guide foreign clients through what can be a tricky IP landscape
Munich litigation boutique formed by former Taylor Wessing partners continues expansion as it seeks to cement its position in the UPC market
Yvonne Tang and Siau Wen Lim, the second and third IP specialists to sit on the firm’s management committee, say IP is ‘uniquely positioned’ to support cross-practice work
Gift this article