The Non-Infringing Alternative Defence When Assessing Damages Comes To Canada

Patent infringers in Canada may have a new argument in their arsenal against an assessment of damages: the non-infringing alternative.

Historically, Canada has rejected the notion that a non-infringing alternative is relevant to an assessment of damages for patent infringement. This history was described by the Federal Court in Merck & Co., Inc. v. Apotex Inc.,¹ as originating from the UK House of Lords decision in The United Horse Shoe and Nail Company, Limited v Stewart and Company.² The Court found that one did not consider whether an infringer could have sold an existing non-infringing alternative, or could have developed a new non-infringing process, or could have avoided infringement altogether by obtaining a licence, because it is completely irrelevant to the question of damages.