Monetizing Canadian Patents

Canadian patents are relatively cheap to procure. Costs can be deferred by delaying the request for patent examination for five years, but expedited examination is readily available if an applicant needs a patent because it is being harmed by infringement or loss of potential investors/licensees.

The “anticipated profits” approach has been used in Canadian Federal Court to estimate a reasonable royalty. Using this method, the hypothetical licensee determines its anticipated net profits arising from the sale of the patented invention and then pays a portion of those profits to the patent owner.

If litigation is initiated, it will be much cheaper to go through to a trial in Canada than in the United States. Usually there is less document production. The pace of patent litigation is slower than in the United States, with the fastest Canadian trials typically proceeding a couple of years after the lawsuit begins. Canada is not a hot spot for non-practicing entity (patent troll) lawsuits due to the smaller market size and damage awards. There are no U.S.-style triple damages for willful infringement. Punitive damages are rare and not usually significant.

Canadian patents, trade secrets, and competition rules are not in lockstep with the United States. Canada does not have trade secret statutes. Trade secrets can still be licensed as property and are effectively protected through common law court decisions. Canadian patent monetization strategy should be considered separately where there is an opportunity to increase profit by taking advantage of unique aspects of the Canadian legal landscape.