Federal Court Awards Elevated Costs On The Basis Of Refusal To Bifurcate

Can a litigant be penalized with a higher cost award for its refusal to agree to bifurcate a patent infringement action? A recent Federal Court decision suggests so.

In Paid Search Engine Tools, LLC v. Google Canada Corporation, 2022 FC 519 ("Paid Search"), Justice McDonald accepted Google's argument that the increased litigation costs owing to Paid Search Engine Tools refusal to bifurcate should bear on a higher costs award. Google did not seek a lump sum, so the Court ultimately awarded costs at a higher level by reference to the upper range of Column of IV of Tariff B.

Up to this point, the Federal Court has not typically given any weight to a party's failure to seek bifurcation or refusal to agree to bifurcation as a factor relevant to increasing the ultimate costs award. In two prior cases, the successful litigants had asked the Court to consider the role of litigation conduct in the assessment of costs, including the tactical decisions of the adverse party