Bifurcation Order not appropriate in action involving patent infringement and breach of Competition Act

June 9, 2010

Garford Pty Ltd. v. Dywidag Systems International, Canada, Ltd., et al., 2010 FC 581.

The plaintiff, Garford, appealed from an order of a prothonotary allowing bifurcation (separate trials) of the issue of liability from the issues of damages or accounting of profits in an action alleging patent infringement and breach of the Competition Act.

Bifurcation orders are only allowed where the Court is “satisfied, on a balance of probabilities, that bifurcation is more likely than not to result in the just, most expeditious and cost-effective determination of the proceeding.” Factors taken into account when determining whether bifurcation is appropriate include:

(i) The nature of the action and whether issues for the first trial are relatively straightforward

(ii) the extent to which the issues proposed for the first trial are interwoven with those remaining for the second;

(iii) whether a decision from the first trial regarding liability is likely to put an end to the action altogether;

(iv) the extent to which the parties have already devoted resources to all of the issues;

(v) the possibility of delay;

(vi) any advantage or prejudice the parties are likely to experience; and

(vii) whether the motion is brought on consent or over the objection of one or more of the parties.

If evidence critical to a party being able to establish liability or a defence to liability is not available to that party as a consequence of a bifurcation order, then it could not be said that the order results in the “just” determination of the proceeding, even though it may result in a more expeditious and cost-effective proceeding.

In this case, the one aspect that the prothonotary failed to explicitly consider was the potential for overlap between the financial information necessary at the remedy phase and the proof of the claim for lessening of competition under the Competition Act.    The defendants did not submit that financial information was irrelevant to the plaintiff’s competition claims.  As a result, only if there was no claim under the Competition Act would the prothonotary’s order for bifurcation have been proper.  The appeal was accordingly allowed and the order for bifurcation set aside.

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