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dblp. Note that the latter does not list papers in biology and life sciences.
73. B. Vasic, E. Kurtas, A. Kuznetsov and O. Milenkovic, Structured LDPC codes, CRC Coding and Signal Processing for Magnetic Recording, CRC Press, Eds. B. Vasic and E. Kurtas, Chapter 38, pp. 1-21, 2004.
72. B. Vasic and O. Milenkovic, Detection for Multitrack Systems, CRC Coding and Signal Processing for Magnetic Recording, CRC Press, Eds. B. Vasic and E. Kurtas, Chapter 24, pp. 1-9, 2004.
71. O. Milenkovic, The Three Faces of DNA/RNA Sequence Hybridization, Systems Bioinformatics: An Engineering Case-Based Approach, pp. 285-313, Editors G. Alterovitz and M. Ramoni, Artech House, 2007.
70. O. Milenkovic, Data Processing and Storage in Cells: An Information-Theoretic Approach, in Advances in Information Recording, Editors P. Siegel, E. Soljanin, A. van Wijngaarden, and B. Vasic, DIMACS Series in Discrete Mathematics and Theoretical Computer Science, vol. 73, pp. 105-147, 2008.
68. Jeffrey G. Andrews, Alexandros G. Dimakis, Lara Dolecek, Michelle Effros, Muriel Médard, Olgica Milenkovic, Andrea Montanari, Sriram Vishwanath, Edmund M. Yeh, Randall Berry, Ken R. Duffy, Soheil Feizi, Saul Kato, Manolis Kellis, Stuart Licht, Jon Sorenson, Lav R. Varshney, Haris Vikalo, “A Perspective on Future Research Directions in Information Theory,” CoRR abs/1507.05941, 2015.
Clustering with Performance Guarantees,” submitted, 2016 (preliminary version to be presented at Infocom 2017 Link).
65. H. Dau, O. Milenkovic, G. J. Puleo, “On the Triangle Clique Cover and Kt Clique Cover Problems,” Link , submitted 2017.
64. H. Dau and O. Milenkovic, “Latent Network Features and Overlapping Community Discovery via Boolean Intersection Representations,” Link , IEEE/ACM Trans. Netw. 25(5): 3219-3234, 2017.
63. V. Ravanmehr, G. J. Puleo, S. Bolouki, O. Milenkovic, “Doubly-Threshold Graphs for Social Network Modeling,” Link , revised 2017.
62. F. Farnoud, O. Milenkovic, G. Puleo and L. Su, “Computing Similarity Distances Between Rankings,” Link , Discrete Applied Mathematics 232: 157-175, 2017.
61. S. ElRouyhaeb, S. Goparaju, H. Kiah and O. Milenkovic, “Synchronizing Edits in Distributed Storage Networks,” Link , IEEE/ACM Transactions on Networks, October 2016.
60. G. J. Puleo, O. Milenkovic, “Community Detection via Minimax Correlation Clustering and Biclustering,” Link, submitted 2016, revised 2017.
59. G. J. Puleo and O. Milenkovic,”Correlation Clustering with Bounded Cluster Sizes and New Weight Bounds,” SIAM Journal on Optimization 25(3): 1857-1872, 2015.
58. F. Farnoud, O. Milenkovic “An Axiomatic Approach to Constructing Distances for Rank Comparison and Aggregation,” IEEE Transactions on Information Theory, vol. 60, no. 10, pp. 6417-6439, 2014.
57. W. Dai, O. Milenkovic, and H. V. Pham, “Structured Sublinear Compressive Sensing via Belief Propagation,” Physical Communication, Special Issue on compressive sensing in communications, vol. 5, no. 2, pp. 76-90, November 2011 (online), June 2012.
56. F. Farnoud and O. Milenkovic, ”Sorting of Permutations by Cost-Constrained Transpositions,” IEEE Transactions on Information Theory, 58(1): 3-23, 2012.
55. W. Dai, E. Kerman, and O. Milenkovic, ”A Geometric Approach to Low-Rank Matrix Completion,” IEEE Transactions on Information Theory, 58(1): 237-247, 2012.
54. W. Dai, O. Milenkovic, and E. Kerman, ”Subspace Evolution and Transfer (SET) for Low-Rank Matrix Completion,” IEEE Transactions on Signal Processing, 59(7): 3120-3132, 2011.
53. W. Dai and O. Milenkovic, “A Comparative Study of Quantized Compressive Sensing Schemes,” IEEE Trans. on Communications, 59(7): 1857-1866, 2011.
52. W. Dai and O. Milenkovic, “Weighted Superimposed Codes and Constrained Integer Compressed Sensing,” IEEE Transactions on Information Theory, vol. 55, no. 5, pp. 2215-2230, May 2009.
51. W. Dai and O. Milenkovic, “Subspace Pursuit for Compressive Sensing Signal Reconstruction,” IEEE Transaction on Information Theory, vol. 55, no. 5, pp. 2230-2250, May 2009.
50. (New) R. Gabrys, H. M. Kiah, O. Milenkovic and H. T. Yazdi, DNA-Based Data Storage.
49. (New) S. M. Hossein Tabatabaei Yazdi, R. Gabrys, O. Milenkovic, Portable and Error-Free DNA-Based Data Storage, biorxive, Link, Nature Scientific Reports, 2017.
46. R. Gabrys, H. M. Kiah, and O. Milenkovic, “Asymmetric Lee Distance Codes for DNA-Based Storage,” Link, to appear in IEEE Transactions on Information Theory, 2017.
45. H. M. Kiah, G. J. Puleo and O. Milenkovic, “Codes for DNA Sequence Profiles,” IEEE Trans. Information Theory 62(6): 3125-3146, 2016, Link .
43. (New) S. M. Hossein Tabatabaei Yazdi, Han Mao Kiah, Ryan Gabrys, Olgica Milenkovic, Mutually Uncorrelated Primers for DNA-Based Data Storage. CoRR abs/1709.05214 (2017), to appear in IEEE Transactions on Information Theory, 2018.
42. (New) H. Dau and O. Milenkovic, MaxMinSum Steiner Systems for Access-Balancing in Distributed Storage, Link, revised, 2017.
41. (New) H. Dau, I. Duursma, H. M. Kiah and O. Milenkovic, Repairing Reed-Solomon Codes from Multiple Erasures, Link, revised, 2017.
40. Ryan Gabrys, Han Mao Kiah, Olgica Milenkovic, Asymmetric Lee Distance Codes for DNA-Based Storage. IEEE Trans. Information Theory 63(8): 4982-4995, 2017.
39. R. Gabrys, E. Yaakobi, O. Milenkovic, Codes in the Damerau Distance for Deletion and Adjacent Transposition Correction, Link, to appear in IEEE Transactions on Information Theory, 2018.
38. F. Farnoud and O. Milenkovic, “Multipermutation Codes in the Ulam Metric for Nonvolatile Memories,” Journal of Selected Areas in Communications (JSAC), Special Issue on Data Storage, IEEE Journal on Selected Areas in Communications 32(5): 919-932, 2014 (Best Student Paper Award!).
37. F. Farnoud, V. Skachek and O. Milenkovic, “Error-Correction in Flash Memories via Codes in the Ulam Metric,” IEEE Transactions on Information Theory, 59(5): 3003-3020, 2013.
36. V. Skachek, O. Milenkovic and A. Nedich, “Hybrid Noncoherent Network Coding,” IEEE Transactions on Information Theory, 59(6): 3317-333, 2013.
35. A. McGregor and O. Milenkovic, “On the Hardness of Approximating Stopping and Trapping Sets,” IEEE Trans. on Information Theory, vol. 56, (4), pp. 1640 – 1650, April 2010.
34. T. Hehn, J. Huber, O. Milenkovic, and S. Laendner, “Multiple-bases belief-propagation decoding of high-density cyclic codes,” IEEE Trans. on Comm., vol. 58 , no. 1, pp. 1-8, January 2010.
33. S. Laendner, T. Hehn, O. Milenkovic, and J. Huber, “The Trapping Redundancy of Linear Block Codes”, IEEE Transaction on Information Theory, vol. 55, no. 1, pp. 53-63, January 2009.
Errata: The authors gratefully acknowledge the correction of a proof in the paper communicated by Yu Tsunoda and Yuichiro Fujiwara, which may be found at http://arxiv.org/abs/1604.00761.
32. T. Hehn, O. Milenkovic, S. Laendner, and J. Huber, “Permutation Decoding and the Stopping Redundancy Hierarchy of Cyclic and Extended Cyclic Codes,” IEEE Transaction on Information Theory, vol. 54, no. 12, pp. 5308-5331, December 2008.
31. O. Milenkovic, E. Soljanin, and P. Whiting, “On the Asymptotic Spectrum of Trapping Sets in Random, Regular and Irregular Code Ensembles,” IEEE Transaction on InformationTheory, Vol. 53, No. 1, pp. 39-55, January 2007.
30. S. Laendner and O. Milenkovic, “Codes Based on Latin Squares: Stopping Set, Trapping Set, and Cycle-Length Distribution Analysis,” IEEE Transaction on Communications, Vol. 55, No. 2, pp. 303-312, February 2007.
29. V. Nagarajan, S. Laendner, O. Milenkovic, N. Jayakumar, and S. Khatri, “High-Throughput VLSI Implementations of Iterative Decoders and Related Code Construction Problems,” The Journal of VLSI Signal Processing, Vol. 49, No. 1, pp. 185-206, May 2007.
28. O. Milenkovic, N. Kashyap, and D. Leyba, “Shortened Array Codes of Large Girth,” IEEE Transactions on Information Theory, Vol. 5, No. 8, pp. 3707-3722, August 2006.
27. V. Kumar and O. Milenkovic, “Unequal Error Protection LDPC Codes based on Plotkin-Type Constructions,” IEEE Transactions on Communications, Vol. 54, No. 6, pp. 994-1005, June 2006.
26. O. Milenkovic and N. Kashyap, “On the Design of Codes for DNA Computing,” Lecture Notes in Computer Science 3969, pp. 100-119, Springer Verlag, Berlin-Heidelberg, 2006.
25. V. Kumar and O. Milenkovic, “On Graphical Representations of Algebraic Codes Suitable for Iterative Decoding,” IEEE Communications Letters, Vol. 9, No. 8, pp. 729-731, August 2005.
24. I. Djordjevic, O. Milenkovic, and B. Vasic, “Generalized LDPC Codes for Long-Haul Optical Communication Systems,” IEEE Journal of Lightwave Technology, Vol. 23, No. 5, pp. 1939-1946, May 2005.
23. O. Milenkovic, “Higher Weight and Coset Weight Enumerators of Formally Self-Dual Codes,” Designs, Codes and Cryptography, Vol. 35, No.1, pp. 89-101, April 2005.
22. O. Milenkovic, I. Djordjevic, and B. Vasic, “Block-Circulant Low-Density Parity-Check Codes for Optical Communication Systems,” IEEE Journal of Selected Topics in Quantum Electronics, Vol. 10, No.2, pp. 294-299, April 2004.
21. B. Vasic, O. Milenkovic, “Combinatorial Constructions of Low-Density Parity-Check Codes for Iterative Decoding,” IEEE Transactions on Information Theory, Vol. 50, No. 6, pp 1156-1176, June 2004.
20. O. Milenkovic, S. Coffey, K. Compton, “The Third Support Weight Enumerators of the [32,16,8] Doubly-Even, Self-Dual Codes,” IEEE Transactions on Information Theory, Vol. 49, No. 3, pp. 740-747, March 2003.
19. O. Milenkovic, B. Vasic, “Permutation (d,k) Codes: Efficient Enumerative Coding and Phrase Length Distribution Shaping”, IEEE Transactions on Information Theory, Vol. 46, No. 7, pp. 2671-2675, Nov. 2000.
18. B. Vasic, S. McLaughlin, O. Milenkovic, “Shannon Capacity of M-ary Redundant Multitrack Runlength Limited Codes”, IEEE Transactions on Information Theory, Vol. 44, No. 2, pp. 766-774, March 1998.
17. B. Vasic, O. Milenkovic, S. McLaughlin, “Power Spectral Density of Multitrack (0,G/I) codes,” IEE Electronics Letters, Vol. 33, No. 9, pp. 784-786, April 1997.
16. A. Emad and O. Milenkovic, “Code Construction and Decoding Algorithms for Semi-Quantitative Group Testing With Nonuniform Thresholds,” Link , IEEE Transactions on Information Theory, 62(4): 1674-1687, 2016.
15. A. Emad and O. Milenkovic, “Poisson Group Testing: A Probabilistic Model for Boolean Compressed sensing,” Link , IEEE Transactions on Signal Processing, 63 (16), pp. 4396-4410, 2015.
14. A. Emad and O. Milenkovic, “Semi-Quantitative Group Testing,” IEEE Transactions on Information Theory, Vol. 60, No. 8, pp. 4614-4636, August 2014.
13. J. Acharya, H. Das, O. Milenkovic, A. Orlitsky, S. Pan, “String Reconstruction from Substring Compositions,” Link , SIAM J. Discrete Math. 29(3): 1340-1371, 2015.
12. O. Milenkovic and K. Compton, “Average Case Analysis of Gosper ’s Algorithm,” Algorithmica, Vol. 43, No. 3, pp. 211-244, September 2005.
11. O. Milenkovic and K. Compton, “Probabilistic Transforms for Combinatorial Urn Models,” Combinatorics, Probability and Computing, pp. 645-675, Vol. 13, No. 4-5, July-September 2004.
10. V. Ravanmehr, M. Kim, Z. Wang, O. Milenkovic, “ChIPWig: A Random Access-Enabling Lossless And Lossy Compression Method For ChIP-Seq Data,” Bioinformatics, 2017.
9. J. Hou, A. Emad, G. Puleo, J. Ma, and O. Milenkovic, “A New Correlation Clustering Method for Cancer Mutation Analysis,” Link Bioinformatics 32(24): 3717-3728, 2016.
8. M. Kim, J. Zhang, J. Ligo, V. Veeravalli, O. Milenkovic, “MetaCRAM: An Integrated Pipeline for Metagenomic Data Processing and Compression,” BMC Bioinformatics 17: 94, 2016.
7. Z. Wang, T. Weissman, O. Milenkovic, “smallWig: Parallel Low-Rate Compression Algorithms for RNA-seq WIG Files,” Bioinformatics 32(2): 173-180, 2016.
6. M. Kim, F. Farnoud, and O. Milenkovic, “HyDRA: Gene Prioritization via Hybrid Distance-Score Rank Aggregation,” Bioinformatics (software link), published online 2014, Bioinformatics 31(7): 1034-1043, 2015.
5. A. Emad and O. Milenkovic, “CaSPIAN: A Causal Compressive Sensing Algorithm for Discovering Directed Interactions in Gene Networks,” Plos One, March 2014 (link).
4. J. Dingel and O. Milenkovic, “List-decoding Methods for Inferring Polynomials in Finite Dynamical Gene Network Models,” Bioinformatics 25(13): 1686-1693, doi: 10.1093/bioinformatics/btp281, 2009.
3. W. Dai, M. Sheikh, O. Milenkovic, and R. Baraniuk, “Compressed Sensing DNA Microarrays,” EURASIP Journal on Bioinformatics and Systems Biology, Article ID 162824, 12 pages doi:10.1155/2009/162824, 2009.
2. N. Alic, M. Karlsson, M. Skoeld, Milenkovic, P. A. Andrekson, and S. Radic, ”Joint Statistics and MLSD in Filtered Incoherent High-Speed Fiber Optic Communications,” IEEE – OSA Journal on Lightwave Technology, vol. 28, Issue 10, pp. 1564-1572, 2010.
1. B. Vasic, O. Milenkovic, S. McLaughlin, “Scrambling for Unequiprobable Signaling,” IEE Electronics Letters, Vol. 32, No. 17, pp. 1551-1552, Aug. 1996.

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As a result of recent developments in patent legislation, jurisprudence and improved court procedures designed to facilitate fast and effective litigation, Canada has been receiving international attention from patent owners and practitioners.
Canadian courts have recognised the need to create an environment for timely and efficient disposition of civil litigation. Over the past several years, the Federal Court, where most patent proceedings are commenced, has implemented a number of procedures to permit litigants to achieve quick and cost-effective results. This has included implementing court procedures that assist in having matters progress to trial in a timely and efficient manner, including proactive case management and imposing limitations on the discovery process. Additionally, the Court has also adopted new summary trial provisions to facilitate the summary disposition of proceedings on issues that do not require a full trial on the merits.
in the Federal Court, jury trials are not available and as such patent actions are decided by the trial judge alone.
The Canadian Patent Act provides the ability to obtain a patent, which provides protection for an invention across Canada.2 Canada does not have other forms of protection such as regional patents, utility models or short-term patents.
A patent is obtained by filing a patent application with the Canadian Intellectual Property Office (CIPO). The patent application is examined by CIPO, and if it is determined that the requirements of the Act have been met, the application issues to patent.
An action is commenced by the plaintiff filing a statement of claim, setting out the material facts that support the action and the relief claimed. In response, the defendant must file a statement of defence. A reply may be filed by the plaintiff in response to the statement of defence. In the statement of defence and reply, the party must admit or deny the allegations set out by the other party and plead any additional relevant material facts upon which the party intends to rely.
The pleadings can also include a counterclaim by the defendant (e.g., a claim seeking to expunge the patent), a cross-claim between defendants or a third-party claim by the defendant against a party not previously named in the proceeding.
Evidence relevant to patent proceeding is obtained through the discovery process. The first step is documentary discovery, wherein each party must list all relevant documents in its possession, power or control. All non-privileged documents must be produced to all adverse parties.
After documentary discovery, each party is permitted to conduct an oral examination of a representative of each adverse party. The representative must answer any relevant and proper question based upon the information of the party. In the Federal Court, a party that is adverse to the patentee is also permitted to examine the inventors of the patent.
All patent actions in Canada are heard and decided by a judge alone.
The plaintiff bears the onus of proving infringement. However, a patent is prima facie valid so the defendant bears the onus of demonstrating invalidity. The standard of proof in patent proceedings in Canada is a balance of probabilities.
Evidence is submitted at trial by testimony of witnesses, by the admission of documents or by reading in the testimony of an adverse party on oral discovery. Expert evidence is admissible in a patent proceeding in Canada provided that the party who calls the expert produces an expert report setting out the expert's evidence in advance of trial.
Is there a serious question to be tried on a preliminary assessment of the merits of the case?
Will the plaintiff suffer irreparable harm if the injunction is refused?
In a patent infringement action, a defendant will typically attack the validity of the patent as part of its defence, and if the action is in the Federal Court, the defendant will also typically counterclaim seeking to expunge the patent.
Patent proceedings in Canadian courts typically take between two and four years from the commencement of the proceeding to judgment, and cost C$0.5 million to C$1 million or more depending on the complexity and number of issues in the proceeding.
The Federal Courts Rules include summary trial and summary judgment motion provisions which aim to facilitate the summary disposition of proceedings on issues that do not require a full trial on the merits.18 These may be particularly appropriate in cases where the cost taking the matter to trial as a regular action could well exceed any monetary award that would have accrued and where the parties have worked together to narrow the issues in dispute.19 There are also summary default proceedings that are available should a defendant not respond to the commencement of an action within the time limits provided.
At any time three years after the grant of the patent, any person interested may apply to the Commissioner of Patents alleging that there has been abuse of the exclusive rights granted by the patent, and request relief.30 The remedies available in such a proceeding include the grant of a compulsory licence or revocation of the patent.31 The exclusive rights under a patent are deemed to be abused in certain circumstances enumerated in the Patent Act, although abuse may not be restricted to only those grounds.32 The abuse provisions have not been extensively used in Canada.
The definition of 'invention' includes the requirement that the invention be 'useful', and thus it must have utility.59 The Patent Act does not prescribe the degree of usefulness required but Canadian courts have held that a scintilla of utility will suffice.
'Double patenting' is not contained in the Patent Act but is a common law doctrine to prevent the improper extension or 'evergreening' of the term of a patent by a series of patents for the same invention.68 The doctrine is used in situations where the earlier patent is not citable as prior art for anticipation or obviousness.
Generally speaking, both pre- and post-judgment interest is awarded on monetary awards by Canadian courts.
The successful litigant (plaintiff or defendant) is typically awarded its 'costs', which consists of a portion of its attorney's fees and all reasonable disbursements. In exceptional circumstances, full or substantial indemnity for actual attorney's fees may be awarded.
The Federal Court and each provincial or territorial court system have their own appellate courts. An appeal to the Federal Court of Appeal is available as of right from any interlocutory or final order of the Federal Court. In some provincial court systems, leave is required to appeal interlocutory orders.
The Supreme Court of Canada hears appeals from the Federal Court of Appeal and provincial appellate courts. For patent proceedings, leave to appeal to the Supreme Court of Canada is required.
Generally, a mere 'scintilla' of utility is required to meet the requirement under the Canadian Patent Act.
In June 2017, the Supreme Court of Canada struck down the 'promise of the patent doctrine' in AstraZeneca Canada Inc v Apotex Inc.117 The promise doctrine held that where the patent specification sets out an explicit 'promise' of a specific result in clear and unambiguous terms, the utility requirement would only be met if that promise was fulfilled.118 The Supreme Court concluded that it 'is not the correct method of determining whether the utility requirement under Section 2 of the Patent Act is met'; 'it is not good law' and is 'unsound'. Rather, courts must follow a two-step analysis: first, courts must identify the subject-matter of the invention as claimed in the patent; second, courts must ask whether that subject-matter is useful – that is, is it capable of a practical purpose (i.e., an actual result)? The Supreme Court emphasised that a single use related to the nature of the subject-matter is sufficient, and that the utility must be either demonstrated or soundly predicted as of the filing date of the patent application.
The Federal Court of Appeal recently applied this new approach in Bristol-Myers Squibb Canada Co v Apotex Inc.119 Bristol-Myers Squibb (BMS) had obtained two patents with respect to its new drug dasatinib, marketed as SPRYCEL and used for treating chronic myelogenous leukemia. One of those patents, Canadian Patent No. 2,366,932 (the '932 patent), contained a claim to the compound itself, which Apotex alleged was invalid for want of utility. The Federal Court had identified three promises made in the patent, and had concluded that BMS had data supporting only the first assertion, such that BMS had 'not met the burden to show that the entire overarching promised utility was either demonstrated or soundly predicted at the relevant date'.120 On appeal, the Federal Court of Appeal acknowledged that the Supreme Court of Canada had abolished the promise doctrine after the Federal Court had rendered its decision, and proceeded to apply the new two-step test for utility.
First, the Court of Appeal established that the subject-matter of the impugned claim was merely the compound dasatinib itself – not its potential therapeutic uses. Second, the Court of Appeal determined that BMS had met the utility requirement by demonstration, as it was conceded that BMS had provided data showing dasatinib's inhibition of Src-family PTKs (the first promise identified by the applications judge). Importantly, the Court of Appeal had no doubt that establishing that a compound has the ability to inhibit a biological target implicated in disease was a useful discovery – it represented an important advance and met the minimal utility requirements established in Esomeprazole.
Accordingly, the Court of Appeal allowed the appeal regarding the '932 patent and issued an order prohibiting the Minister of Health from issuing a NOC to Apotex for its generic version of dasatinib until expiry of the '932 patent.
By contrast, the recent decision in Safe Gaming System v. Atlantic Lottery Corporation – a dispute regarding the assertion and validity of a patent for software to serve as a control interface between individuals and online gaming sites – provides an example where the utility requirement was not met. The Federal Court first observed that utility is assessed based on the whole patent, rather than on a claim-by-claim basis. More importantly, the court found that the basic utility argued by the patentee was not useful as it was not related to the nature of the subject matter, which is to monitor, regulate and terminate play of problem gamers. The asserted utility was too general: at the time of filing, a skilled person could not have applied the teachings of the patent to mitigate problem gaming, as very little was known about it at the relevant time. The court concluded that the skilled person would not be able to program a computer to do what the patent said it could, so that the patent failed the Esopremazole test for utility.
At the fourth step of the obviousness analysis, the question is whether the differences would have been obvious to persons skilled in the art or whether they require any degree of invention – not whether they are more or less self-evident. The Federal Court of Appeal found that this oversimplification was an erroneous formulation of the obviousness framework and undertook to repeat the analysis itself.
The Court of Appeal also stressed that when identifying the inventive concept, emphasis must be on the claims, commenting that the search for the inventive concept had brought considerable confusion into the law of obviousness and suggested that 'until time as the Supreme Court is able to develop a workable definition of the inventive concept', simply construing the claim would reduce uncertainty and would prove more useful to the parties and the court.
However, in Apotex Inc v Shire LLC,126 a decision regarding Shire's drug VYVANSE approved for treatment of ADHD and Binge Eating Disorder in adults, the Federal Court found that the inventive concept in that case could be grasped without difficulty: 'a sustained release formulation of a therapeutically useful dose of amphetamine that is resistant to abuse'. Therefore, there was no need to pursue the alternate course of claim construction. The Court also observed that the Ciba case could not be understood to have overruled the Supreme Court's iteration of the obviousness test in Sanofi-Synthelabo.127 The Supreme Court has not had an opportunity to consider this issue since Federal Court of Appeal decision in Ciba.
In Janssen Inc v. Teva Canada Ltd,128 the Federal Court of Appeal dismissed Teva's appeal from the Federal Court's decision regarding the quantification of damages resulting from Teva's infringement of Janssen's patent. Both Janssen Inc (Janssen Canada) and Janssen Pharmaceuticals Inc (Janssen US) claimed damages arising from the infringement. Janssen Canada was a licensee under the patent in issue whereas Janssen US was a supplier of the licensed products sold in Canada by Janssen Canada.
The Federal Court of Appeal also found that the Federal Court did not err in identifying which scenario best represented what would have happened in the 'but for' world, namely that damages arising from the infringement could extend beyond the expiry of the patent (in this case two months for losses of retail sales and one year for losses of hospital sales) and from losses caused by price suppression based on evidence that Janssen Canada had lowered its prices to compete with the infringing products. Likewise, the Court of Appeal found that the Federal Court did not err in finding that Janssen had taken appropriate steps to mitigate its loss (as is the duty of the party claiming damages). The Court of Appeal noted that in case of doubt, the plaintiff's good-faith efforts to overcome difficulties caused by the defendant's wrongdoing should not be examined too critically.
Finally, the Federal Court of Appeal confirmed the C$1 million in costs awarded to Janssen by the Federal Court, noting that the Supreme Court has affirmed that 'costs awards are quintessentially discretionary' and that they should only be set aside when they result from an error in principle or are plainly wrong, neither of which was shown in this case. The award was not considered excessive in light of the large number and high complexity of the issues raised, as well as the judgments resulting from the 10-day trial, which totalled over C$18.8 million in damages.
In two recent decisions in Dow Chemical Company v. Nova Chemicals Corporation,130 the Federal Court awarded monetary remedies totalling over C$645 million, the largest reported award in a patent infringement action in Canada. In rendering its decisions, the Federal Court considered a variety of issues relating to the quantification of monetary remedies.
During the liability phase of the action, Dow's patent for polyethylene compositions used in packaging applications was found valid and infringed by Nova's SURPASS products. As a result, Dow was awarded a number of remedies, including an election between damages and an accounting of profits. Dow elected for an accounting of Nova's profits.
Dow claimed that Nova's infringing activities provided Nova with a 'springboard' into the market. Based on the evidence, the Federal Court was satisfied that in the hypothetical 'but for' world where Nova did not enter the market until after the expiry of the patent, it would have taken approximately 20 months for Nova to attain the same level of sales of its SURPASS products that Nova enjoyed in the real world. As such, the Federal Court concluded that the profits obtained by Nova for the 20-month period after the expiry of the patent ought to be included in the accounting of profits.
The Federal Court also considered issues relating to the costs that Nova should be permitted to deduct from its revenues in an accounting of profits. Two primary issues were considered. The first related to the appropriate measure of the cost of ethylene, a key component of the infringing SURPASS products. Nova asserted that it was entitled to deduct the 'economic value' of the ethylene measured by the average price that Nova sold ethylene to third parties. The Court found that Nova was only entitled to deduct its actual costs incurred to manufacture the ethylene since the ethylene was not sold by Nova, but rather was used to manufacture the infringing products. In so concluding, the Court noted that Nova's position would result in deduction of a 'theoretical cost' that had not been actually incurred.
The second issue related to whether non-incremental fixed costs and capital depreciation expenses could be deducted from Nova's revenues. In considering this issued, the Court noted that there are several recognised approaches for an accounting for profits, namely, the differential profit approach, the incremental cost approach and the full cost approach. Nova asserted that the full cost approach was appropriate in the circumstances of this case because there were no direct non-infringing alternatives and its incremental costs would be negligible, such that the incremental costs approach would result in an inequitable outcome. The Court ultimately concluded that Nova should be entitled to deduct a proportion of certain of its claimed fixed costs and capital depreciation expenses related to the production and sale of the infringing products.
In Canada, the Currency Act131 provides that a monetary judgment must be in Canadian dollars. In this case, Nova's profits from the sale of infringing SURPASS products were largely earned in US dollars. As such, one of the issues was the appropriate date to convert US-dollar profits to Canadian dollars. The Court held that since the evidence supported that Nova's profits were primarily retained in US dollars, the date of conversion into Canadian dollars should be the date of the judgment.
As a result of its obligations under Canada-European Union Comprehensive Economic and Trade Agreement (CETA), Canada has recently made amendments to the Patent Act and implemented new regulations that will have significant implications on the pharmaceutical industry in Canada.
A new right of action following receipt of a notice of allegation, for a declaration of infringement of all claims of any patent that is the subject of the notice of allegation (formerly PMNOC proceedings were brought by way of a summary application procedure, and only the claims eligible for listing could be asserted). As such, PMNOC proceedings will now proceed by way an action, including full documentary and oral discovery. Proceeding by way of action affords both parties an equal right of appeal (under the former application procedure, if the first person lost at first instance and the Minister of Health issued the NOC to the second person, an appeal by the first person was rendered moot). Proceeding by way of action also does away with duplicative proceedings. Previously, the losing party in the application could bring a subsequent action for infringement or impeachment of a patent. The amendments also introduce a right of action against the second person for unlisted patents any time after receipt of a notice of allegation.
Prohibitions against a first person from bringing an action outside the Regulations for a listed patent that is the subject of a notice of allegation, unless the first person did not have a reasonable basis for bringing the action within the 45-day deadline to respond to the notice of allegation.
As referenced above, the first person may be liable to the second person for any loss suffered as a result of the delay in issuance of the NOC if the proceeding is unsuccessful (discontinued, dismissed, or reversed on appeal). Under the regime prior to the amendments, the end date for such damages was explicitly limited to the date of discontinuance, dismissal, or reversal, which precluded certain types of damages, such as permanent loss of market share. The new provisions no longer include express limits the end date for damages. However, the amendments also introduced the ability for a first person to renounce the application of the 24-month stay that would preclude any such liability.
In Apotex Inc v Shire LLC,134 Shire's application under the pre-amended PMNOC Regulations for an order prohibiting the Minister of Health from issuing an NOC for Apotex's generic version of lisdexamfetamine (LDX) was consolidated with Apotex's action seeking a declaration of invalidity and non-infringement of Shire's patent (the impeachment action), and Shire's counterclaim for infringement.
The validity analysis in this case was applied equally by the Court to Apotex' action for impeachment and Shire's application for a prohibition order. The Court found that the patent was valid, and dismissed Apotex' action for impeachment. The Court also found that Apotex' generic version of LDX infringed the asserted claims of Shire's patent, and granted Shire's application for an order prohibiting the Minister of Health from issuing an NOC for the generic version.
However, the Court dismissed Shire's counterclaim for infringement in respect of Apotex's prior manufacturing and retaining of its generic capsules because Apotex benefited from the experimental and regulatory use exception in respect of those activities, as recognised in Sections 55.2(1) and (6) of the Patent Act and at common law.
Relative to the previous system of 'dual litigation' whereby infringement and validity were the subject of separate proceedings from PMNOC prohibition proceedings, this case illustrates the potential streamlining and reduction of duplicative proceedings afforded by the recent amendments to the PMNOC Regulations.
In Genentech, Inc v Amgen Canada Inc,135 the Federal Court set the tone regarding how courts will approach section 6.08 motions under the new regulations. Section 6.08 allows for the second person to motion the court for the dismissal of an action, in whole or in part, brought under the new right of action for a declaration of infringement, on the basis that it is redundant, scandalous, frivolous or vexatious or is otherwise an abuse of process.
The Court commented on the purpose of motions under Section 6.08, explaining that they serve as a mechanism 'that permits a defendant to move to dismiss a claim or a portion thereof at a preliminary stage of a proceeding where the claim is clearly without merit'. The Court also observed that there is a heightened need for such a mechanism in a regulatory regime where an automatic stay of the regulatory approval process is engaged as soon as an action for a declaration of infringement is commenced, without any assessment of the merits of the patent infringement claim. The Court concluded that the defendant's Section 6.08 motion should be allowed to proceed without awaiting completion of the examination for discovery process.
As referenced above, the Patent Act was amended to add a new CSP regime that provides additional protection for a new drug after the expiry of the relevant patent. The term of the CSP is calculated by subtracting five years from the difference between the filing date of the application for the patent and the day on which the NOC is issued, up to a maximum of two years.
To be 'eligible', a patent must be in force and include at least one claim directed to the same medicinal ingredient or combination; use of the same medicinal ingredient or combination; or the same medicinal ingredient, or combination, as produced by a defined process (product-by-process). Therefore, pure process patents and patents claiming formulations are not eligible for a CSP.
The CSP application must be filed within 120 days of grant of the NOC (if the patent is granted prior to the NOC) or the grant of the patent (if the NOC is granted prior to the patent).
• 12 months, in any other case.
The CSP grants the same rights as the patent but only with respect to 'the making, constructing, using and selling of any drug that contains the medicinal ingredient or combination of medicinal ingredients set out in the certificate, by itself or in addition to any other medicinal ingredient'. The Patent Act also expressly provides that it is not an infringement of the CSP to make, use, or sell the medicinal ingredient for the purpose of export.
Over the past year, there have been significant changes in the Canadian patent litigation landscape, reaffirming Canada as an attractive jurisdiction for patent enforcement. Further changes in the patent law in Canada are expected, in particular development of the jurisprudence in the following areas.
whether there is a heightened disclosure requirement under the doctrine of sound prediction of utility.
the effect of the new PMNOC Regulations, including that new proceedings will proceed by way of a full action.
Development of the jurisprudence on issues relevant to the calculations of damages or defendant's profits including decisions from the Federal Court of Appeal on appeals from the Federal Court's recent monetary awards.
1 Steven B Garland is a partner, Kevin K Graham is counsel and Daniel J Hnatchuk is an associate at Smart & Biggar/Fetherstonhaugh. The assistance of Sebastian Beck-Watt and Isabelle St-Hilaire, articling students, and Bram Schwartz, summer student, Smart & Biggar/Fetherstonhaugh, in the preparation of this article is acknowledged with appreciation.
2 Patent Act, RSC 1985, c P-4, Section 42.
4 ibid., Sections 115 and 116.
5 ibid., Sections 54(1) and 54(2).
7 Federal Courts Act, RSC 1985, c F-7, Section 20.
8 Federal Courts Rules, SOR/98-106, r. 373, 374.
9 RJR-Macdonald Inc v. Canada (Attorney General),  1 SCR 311 at 334–347.
10 Ibid. at 340–342; and Cutter Ltd v. Baxter Travenol Laboratories of Canada Ltd (1980), 47 CPR (2d) 53 at 55–56 (FCA), leave to appeal to SCC refused (1980), 47 CPR (2d) 249.
11 RJR-Macdonald Inc v. Canada (Attorney General),  1 SCR 311 at 334–347.
12 Patent Act, RSC 1985, c P-4, Sections 55(1), 55(2).
13 Jay-Lor International Inc v. Penta Farm Systems Ltd, 2007 FC 358 at Paragraph 36.
14 Armstrong Cork Canada v. Domco Industries Ltd,  1 SCR 907; Signalisation de Montréal Inc v. Services de Béton Universels Ltée (1992), 46 CPR (3d) 199 (FCA), leave to appeal to SCC refused (1993), 48 CPR (3d) vi (note).
15 Patent Act, RSC 1985, c P-4, Section 60(1).
16 EI Du Pont de Nemours & Co v. Montecatini-Societa Generale Per L'Industria Mineraria E Chimica (1966), 49 CPR 209 at 212–218 (Ex Ct), aff'd (1967), 52 CPR 18 (SCC); Wakefield Properties Corp v. Teknion Furniture Systems Inc (1992), 44 CPR (3d) 474 at 476–477 (FCTD).
17 Patent Act, RSC 1985, c P-4, Sections 55.01 and 78.2. For patents issued from applications filed prior to 1 October 1989, the limitation period may be governed by the relevant legislation in the province in which the infringing activities take place. These limitation periods range from two to six years depending upon the province. If the infringing activities take place in more than one province, a six-year federal limitation period applies (Federal Courts Act, RSC 1985, c F-7, Section 39).
18 Federal Courts Rules, SOR/98-106, Rule 216.
19 Cascade Corporation v. Kinshofer GmbH, 2016 FC 1117.
20 Competition Act, RSC 1985, c C-34, Sections 52, 74.01(1).
21 Trade-marks Act, RSC 1985, c T-13, Section 7; S&S Industries Inc v. Rowell,  SCR 419.
22 See, for example, E Mishan & Sons v, Supertek, 2016 FC 986 and Excalibre Oil Tools Ltd v. Advantage Products Inc, 2016 FC 1279.
23 Genencor International Inc v. Canada (Commissioner of Patents), 2007 FCA 129 at Paragraphs 6–8, 55 CPR (4th) 378, leave to appeal to SCC refused,  SCCA No 272.
24 Patent Act, RSC 1985, c P-4, Section 48.2.
25 ibid., Sections 48.2 and 48.3(2).
28 ibid., Section 48.5; Genencor International Inc v. Canada (Commissioner of Patents), 2008 FC 608 at Paragraph 48; Newco Tank Corp v. Canada (Attorney General), 2015 FCA 47 at Paragraph 12.
29 Genencor International Inc v. Canada (Commissioner of Patents), 2006 FC 1021, aff'd 2007 FCA 129, leave to appeal to SCC refused,  SCCA No 272.
30 Patent Act, RSC 1985, c P-4, Section 65.
32 ibid., s. 65(2); and Torpharm Inc v. Canada (Commissioner of Patents), 2004 FC 673 at Paragraph 38; but see Torpharm Inc v. Merck & Co (2000), 9 CPR (4th) 520 at 539 (Pat App Bd).
33 Free World Trust v. Électro Santé Inc, 2000 SCC 66 at Paragraph 33.
34 Whirlpool Corp v. Camco Inc, 2000 SCC 67 at Paragraphs 42–50.
35 ibid. at Paragraphs 45–48.
36 ibid. at Paragraphs 48–49.
37 Mobil Oil Corp v. Hercules Canada Inc (1994), 57 CPR (3d) 488 at 494 (FCTD), rev'd in part (1995), 63 CPR (3d) 473 (FCA), leave to appeal SCC refused (1996), 66 CPR (3d) vi.
38 Free World Trust v. Électro Santé Inc, 2000 SCC 66 at Paragraphs 64 and 66. However, recently several Federal Court decisions have drawn a distinction between statements or admissions made in the course of patent prosecution and a change to a claim as a result of an objection from CIPO, which was characterised as an objective fact that can be properly considered when construing a claim. See: Distrimedic v. Dispill, 2013 FC 1043 at Paragraphs 209–210; Eli Lilly Canada Inc v. Mylan Pharmaceuticals ULC, 2015 FC 125 at Paragraph 154. It remains to be seen whether this approach will be approved by the Federal Court of Appeal or Supreme Court of Canada.
39 Patent Act, RSC 1985, c P-4, Section 42.
40 HG Fox, The Canadian Law and Practice Relating to Letters Patent for Inventions 349 (4th ed The Carswell Co. Ltd. 1969); Monsanto Canada Inc v. Schmeiser, 2004 SCC 34 at Paragraphs 30–58.
41 Free World Trust v. Électro Santé Inc, 2000 SCC 66 at Paragraphs 55–56; Halford v. Seed Hawk Inc, 2006 FCA 275 at Paragraphs 12–15.
42 Apotex Inc v. Nycomed Canada Inc, 2011 FC 1441 at Paragraphs 18–27, aff'd 2012 FCA 195.
43 AB Hassle v. Canada (Minister of National Health and Welfare), 2002 FCA 421 at Paragraph 17, leave to appeal to SCC refused  SCCA No 531; MacLennan v. Gilbert Inc, 2008 FCA 35 at Paragraph 13; Weatherford Canada Ltd v. Corlac Inc, 2011 FCA 228 at Paragraph 162, leave to appeal to SCC refused, 34459 (29 March 2012). However, the inducer is not required to have knowledge of the patent to be liable for inducing infringement, see Bauer Hockey Corp v. Easton Sports Canada Inc, 2010 FC 361 at Paragraphs 197–203, aff'd without comment on this issue 2011 FCA 83.
44 Mentmore Manufacturing Co v. National Merchandise Manufacturing Co Inc (1978), 40 CPR (2d) 164 at 174 (FCA); Monsanto Canada Inc v. Schmeiser, 2001 FCT 256 at 248 (FCTD), aff'd 2002 FCA 309, appeal allowed in part 2004 SCC 34.
45 Halford v. Seed Hawk Inc, 2004 FC 88 at Paragraphs 324–332, rev'd 2006 FCA 275 (but aff'd on this issue at Paragraphs 54–55).
46 Patent Act, RSC 1985, c P-4, Section 2.
47 ibid., Section 27(8); Riello Canadian Inc v. Lambert (1986), 9 CPR (3d) 324 at 338 (FCTD).
48 Calgon Carbon Corp v. North Bay (City), 2005 FCA 410 at Paragraphs 9–19, leave to appeal to SCC refused, 31306 (30 March 2006).
49 'Canadian filing date' is the date a Canadian patent application was filed with the Canadian Patent Office or the date of filing a PCT patent application.
50 Patent Act, RSC 1985, c P-4, Section 28.2.
51 671905 Alberta Inc v. Q'Max Solutions Inc, 2003 FCA 241 at Paragraph 43.
52 Almecon Industries Ltd v. Nutron Manufacturing Ltd (1996), 65 CPR (3d) 417 at 429–430 (FCTD), aff'd (1997), 72 CPR (3d) 397 (FCA); Hi-Qual Manufacturing Ltd v. Rea's Welding & Steel Supplies Ltd (1994), 55 CPR (3d) 224 at 237 (FCTD), aff'd (1995), 61 CPR (3d) 270 (FCA); Free World Trust v. Électro Santé Inc, 2000 SCC 66 at Paragraph 25.
53 Sanofi-Synthelabo Canada Inc v. Apotex Inc, 2008 SCC 61 at Paragraphs 23–30; Abbott Laboratories v. Canada (Minister of Health), 2008 FC 1359 at Paragraph 75, aff'd 2009 FCA 94.
54 Sanofi-Synthelabo Canada Inc v. Apotex Inc, 2008 SCC 61 at Paragraphs 26–27.
55 Windsurfing International Inc v. Tabur Marine (Great Britain) Ltd (1984),  RPC 59 (Eng CA).
56 Sanofi-Synthelabo Canada Inc v. Apotex Inc, 2008 SCC 61 at Paragraph 67.
57 ibid. at Paragraphs 67–68.
58 Pfizer Canada Inc v. Apotex Inc, 2009 FCA 8 at Paragraphs 22–29; Eli Lilly Canada Inc v. Mylan Pharmaceuticals ULC, 2015 FCA 286 at Paragraph 4.
59 Patent Act, RSC 1985, c P-4, Section 2 (invention); Apotex v. Wellcome Foundation Ltd, 2002 SCC 77 at Paragraph 56.
60 AstraZeneca Canada Inc v. Apotex Inc, 2017 SCC 36 at Paragraph 55.
61 ibid. at Paragraph 54.
62 Apotex v. Wellcome Foundation Ltd, ۲۰۰۲ SCC ۷۷ at Paragraphs ۵۱–۵۶; Aventis Pharma v. Apotex Inc, ۲۰۰۵ FC ۱۲۸۳ at Paragraphs ۸۲–۸۳, aff'd ۲۰۰۶ FCA ۶۴ at Paragraphs ۲۶–۳۵, leave to appeal to SCC refused,  SCCA No. ۱۳۶; GD Searle & Co v. Novopharm Limited, ۲۰۰۷ FC ۸۱ at Paragraph ۱۰۲, rev'd on other grounds ۲۰۰۷ FCA ۱۷۳, leave to appeal to SCC refused,  SCCA No. ۳۴۰.
63 Apotex Inc v. Wellcome Foundation Ltd, 2002 SCC 77 (SCC) at Paragraph 70.
64 Pfizer Canada Inc v. Novopharm Ltd, ۲۰۱۲ SCC ۶۰ at Paragraphs ۳۶–۴۴; AstraZeneca Canada Inc v. Apotex Inc, ۲۰۱۴ FC ۶۳۸ at Paragraphs ۱۴۱–۱۶۰; AstraZeneca Canada Inc v. Apotex Inc, ۲۰۱۷ SCC ۳۶ at Paragraph ۵۸; Eli Lilly Canada Inc v. Hospira Healthcare Corp, ۲۰۱۶ FC ۴۷ at Paragraphs ۴۶–۴۹.
65 Safe Gaming System v. Atlantic Lottery Corporation, 2018 FC 542 at Paragraph 132, citing Eli Lilly Canada Inc v. Hospira Health Care Corporation, 2016 FC 47 at Paragraphs 46-49, and Eurocopter v. Bell Helicopter Textron Canada Ltée, 2013 FCA 219 at Paragraphs 152-154.
66 Laboratoires Servier v. Apotex Inc, 2008 FC 825 at Paragraph 270, aff'd 2009 FCA 222, leave to appeal to SCC refused,  SCCA No 403; Consolboard Inc v. MacMillan Bloedel (Saskatchewan) Ltd,  1 SCR 504 at 160–161; Sanofi-Aventis v. Apotex Inc, 2013 FCA 186 at Paragraphs 47–49.
67 AstraZeneca Canada Inc v. Apotex Inc, 2017 SCC 36; Bristol-Myers Squibb Canada Co v Apotex Inc, 2017 FCA 190.
68 Pharmascience Inc v. Sanofi-Aventis Canada Inc, 2006 FCA 229 at Paragraphs 67–73, leave to appeal to SCC refused.
69 Commissioner of Patents v. Farbwerke Hoechst A/G,  SCR 49 at Paragraph 13; Whirlpool Corp v. Camco Inc, 2000 SCC 67 at Paragraphs 63–75; Pharmascience Inc v. Sanofi-Aventis Canada Inc, 2006 FCA 229 at Paragraph 68, leave to appeal to SCC refused,  SCCA No. 362; Mylan Pharmaceuticals ULC v. Eli Lilly Canada Inc, 2016 FCA 119 at Paragraphs 27 to 29.
70 Consolboard Inc v. MacMillian Bloedel (Saskatchewan) Ltd,  1 SCR 504; Pioneer Hi-Bred Ltd v. Canada (Commissioner of Patents),  1 SCR 1623; Mobil Oil Corp v. Hercules Canada Inc (1995), 63 CPR (3d) 473 at 484–486 (FCA); Teva Canada Ltd v. Pfizer Canada Inc, 2012 SCC 60.
71 Mobil Oil Corp v. Hercules Canada Inc (1995), 63 CPR (3d) 473 at 483–484 (FCA).
72 Farbwerke Hoechst A/G v. Commissioner of Patents,  Ex CR 91 at 106, aff'd  SCR 604; Pfizer Canada Inc v. Apotex Inc, 2007 FCA 209 at Paragraph 115, leave to appeal to SCC refused  SCCA No. 377.
73 Dutch Industries Ltd v. Commissioner of Patents, 2001 FCT 879, appeal allowed in part 2003 FCA 121, leave to appeal to SCC refused 20 CPR (4th) vii; Johnson & Johnson Inc v. Boston Scientific Ltd, 2004 FC 1672, rev'd in light of legislative amendments regarding small entity fees 2006 FCA 195. However, Small Entity Fee Payment Legislation (Bill C-29, An Act to Amend the Patent Act, 1st Sess, 38th Parl, 2005, cl 2 (came into force 1 February 2006), RSC, c P-4) provided a one-year period from the coming into force date in which to correct an incorrectly paid small entity fee with respect to fees paid prior to the coming into force date. Effective 2 June 2007, the Patent Rules, SOR/96-423, were amended to provide the Patent Office with discretion to grant an extension of time for an applicant to pay the proper fee where the small entity fee was paid in good faith and the request for the time extension is filed without undue delay.
74 Patent Act, RSC 1985, c P-4, Section 53(1).
75 Micro Chemicals Ltd v. Smith, Kline & French Inter-American Corp (1971),  SCR 506 at 520; Merck & Co v. Apotex Inc, 2006 FC 524 at Paragraphs 159–163, rev'd on other grounds, but aff'd on this issue 2006 FCA 323 at Paragraphs 105–113, leave to appeal to SCC refused,  SCCA No. 507.
76 Patent Act, RSC 1985, c P-4, Section 55.2(1). It is uncertain as to whether this provision would be limited to the pharmaceutical patents in view of the related Patented Medicines Notice of Compliance Regulations that were introduced at the same time as Section 55.2(1).
77 Patent Act, RSC 1985, c P-4, Section 56.
c if filed on or after 1 October 1996: the relevant date = Canadian filing date (or the convention priority date, if applicable).
79 Merck & Co v. Apotex Inc (1995), 60 CPR (3d) 356 at 364–374 (FCA), leave to appeal to SCC refused (1995), 63 CPR (3d) v. (note).
80 An expired licence will not provide a defence: Lubrizol Corp v. Imperial Oil Ltd (1990), 33 CPR (3d) 1 (FCTD) at 10, rev'd on other grounds, but aff'd on this issue (1992), 45 CPR (3d) 1 at 3 (FCA).
81 Canadian Marconi Co v. Nordmende Pheonix Ltd (1962), 39 CPR 185 at 201; Micro Chemicals Ltd v. Rhone-Poulenc SA, (1964) 44 CPR 193 at 208, aff'd  SCR 284.
82 Eli Lilly and Co v. Novopharm Ltd,  2 SCR 129 at 363–364.
83 Competition Act, RSC 1985, c C-34.
84 Eli Lilly & Co v. Apotex Inc, 2005 FCA 361 at Paragraphs 14, 36; Eli Lilly & Co v. Marzone Chemicals Ltd (1976), 29 CPR (2d) 253 at 255 (FCTD), aff'd (1976), 29 CPR (2d) 255 (FCA); Volkswagen Canada Inc v. Access International Automotive Ltd, 2001 FCA 79 at Paragraphs 21, 26; j2 Global Communications Inc v. Protus IP Solutions Inc, 2008 FC 759 at Paragraphs 29–36, aff'd 2009 FCA 41; Eli Lilly & Co v. Apotex Inc, 2002 FCT 1007 at 371–372 (FCTD).
85 Eli Lilly & Co v. Apotex Inc, 2009 FC 991, 80 CPR (4th) 1, aff'd without comment on this issue 2010 FCA 240, leave to appeal to SCC refused,  SCCA No 434; Laboratoires Servier v. Apotex Inc, 2008 FC 825 at Paragraphs 463–478, aff'd 2009 FCA 222 at Paragraphs 48–50, leave to appeal to SCC refused,  SCCA No. 403.
86 Patent Act, RSC 1985, c P-4, Section 55.
88 JM Voith GmbH v. Beloit Corp (1993), 47 CPR (3d) 448 at 474–478 (FCTD), rev'd on other grounds (1997), 73 CPR (3d) 321 (FCA).
89 ConsolBoard Inc v. MacMillian Bloedel (Saskatchewan) Ltd (1982), 63 CPR (2d) 1 at 7 (FCTD), var'd (1983), 74 CPR (2d) 199 (FCA).
90 Monsanto Canada Inc v. Schmeiser, 2004 SCC 34 at Paragraph 100; Teledyne Industries Inc v. Lido Industrial Products Ltd (1982), 68 CPR (2d) 204 at 208 (FCTD).
91 Beloit Canada Ltée v. Valmet Oy (1994), 55 CPR (3d) 433 at 453–55 (FCTD) rev'd on other grounds (1995), 61 CPR (3d) 271, leave to appeal to SCC refused (1996), 64 CPR (3d) vi; Merck & Co v. Apotex Inc, 2006 FC 524 at Paragraph 229, rev'd on other grounds, but aff'd on this issue 2006 FCA 323 at Paragraphs 127–1331, leave to appeal to SCC refused,  SCCA No. 507.
92 Patent Act, RSC 1985, c P-4, Sections 10, 55(1), 55(2).
93 Jay-Lor International Inc v. Penta Farm Systems Ltd, 2007 FC 358 at Paragraphs 120–123.
94 Whiten v. Pilot Insurance Co, 2002 SCC 18 at Paragraph 94; Dimplex North America Ltd v. CFM Corp, 2006 FC 586 at Paragraph 121, aff'd 2007 FCA 278; Eurocopter v. Bell Helicopter Textron Canada Limitée, 2013 FCA 219 at Paragraph 163.
95 Dimplex North America Ltd v. CFM Corp, 2006 FC 586 at Paragraph 132, aff'd 2007 FCA 278.
96 Merck & Co v. Apotex Inc (2000), 5 CPR (4th) 1 at 22 (FCTD), rev'd on other grounds 2003 FCA 234, leave to appeal to SCC refused,  SCCA No 366; Patent Act, RSC 1985, c P-4, Section 57.
97 Eurocopter v. Bell Helicopter Textron Canada Ltd, 2012 FC 113 at Paragraph 397, 100 CPR (4th) 87, aff'd on other grounds 2013 FCA 219.
98 Baxter Travenol Laboratories of Canada Ltd v. Cutter (Canada) Ltd (1983), 68 CPR (2d) 179 at 200 (FCA) leave to appeal to SCC refused (1983), 72 CPR (2d) 287; Merck & Co v. Apotex Inc, 2006 FCA 323 at Paragraphs 117–124, leave to appeal to SCC refused  SCCA No. 507.
99 Patent Act, RSC 1985, c P-4, Section 60(2).
100 The contribution of Nancy Pei, partner, and Urszula Wojtyra, associate, at Smart & Biggar/Fetherstonhaugh in co-authoring this section is acknowledged with appreciation.
101 Food and Drugs Act, RSC 1985, c F-27 and Food and Drug Regulations, CRC, c 870.
102 Patented Medicines (Notice of Compliance) Regulations, SOR/93-133, as amended.
108 The amendments to the PMNOC Regulations came into force on 21 September 2017. The new PMNOC Regulations apply to any matter relating to a notice of allegation served on a first person on or after that day. Any matter relating to a notice of allegation served prior to 21 September 2017 is governed by the former regulations.
109 Patented Medicines (Notice of Compliance) Regulations, SOR/93-133, as amended, Section 6.
113 ibid., Sections 7(5)(b), 7(6) and 8(4).
114 Patent Act, RSC 1985, c P-4, Section 75.
117 AstraZeneca Canada Inc v. Apotex Inc, 2017 SCC 36 [Esomeprazole].
118 Laboratoires Servier v. Apotex Inc, 2008 FC 825 at Paragraph 270, aff'd 2009 FCA 222, leave to appeal to SCC refused,  SCCA No 403; Consolboard Inc v. MacMillan Bloedel (Saskatchewan) Ltd,  1 SCR 504 at 160–161; Sanofi-Aventis v. Apotex Inc, 2013 FCA 186 at Paragraphs 47–49.
119 Bristol-Myers Squibb Canada Co v. Apotex Inc, 2017 FCA 190.
120 Bristol-Myers Squibb Canada Co v. Apotex Inc, 2017 FC 296 at Paragraph 112.
121 See, for example, Regents of the University of California v. I-MED Pharma Inc, 2018 FC 164 at Paragraphs 95–200; Hospira Healthcare Corporation v. Kennedy Trust for Rheumatology Research, 2018 FC 259 at Paragraphs .
122 Pfizer Canada Inc v. Apotex Inc, 2017 FC 774 at Paragraph 363; Hospira Healthcare Corporation v. Kennedy Trust for Rheumatology Research, 2018 FC 259 at Paragraph 258.
123 Ciba Specialty Chemicals Water Treatments Limited v. SNF Inc, 2017 CAF 225, leave to appeal to SCC refused, 37915 (16 January 2018).
124 The inexact summary first appeared in Eli Lilly Canada Inc v. Mylan Pharmaceuticals ULC, 2015 FC 125, and was relied upon by the Federal Court in Ciba Specialty Chemicals Water Treatments Limited v. SNF Inc, 2015 FC 997.
125 See also Mylan Pharmaceuticals ULC v. Eli Lilly Canada Inc, 2016 FCA 119 at Paragraphs; MIPS AB v. Bauer Hockey Ltd, 2018 FC 485 at Paragraph 121.
126 Apotex Inc v Shire LLC, 2017 FC 831.
127 Sanofi-Synthelabo Canada Inc v. Apotex Inc, 2008 SCC 61.
128 Janssen Inc v. Teva Canada Ltd, 2018 FCA 33, dismissing the appeal from 2016 FC 593.
d the claim must be one in respect of a use in Canada and not elsewhere in the corporate chain.
130 Dow Chemical Company v. Nova Chemicals Corporation, 2017 FC 350 and Dow Chemical Company v. Nova Chemicals Corporation, 2017 FC 637.
131 Currency Act, RSC, 1985, c C-52.
132 The contribution of Nancy Pei, partner, and Urszula Wojtyra, associate, Smart & Biggar/Fetherstonhaugh, in co-authoring this section is acknowledged with appreciation.
133 The amendments to the PMNOC Regulations came into force on 21 September 2017. The new PMNOC Regulations apply to any matter relating to a notice of allegation served on a first person on or after that day. Any matter relating to a notice of allegation served prior to 21 September 2017 is governed by the former regulations.
134 Apotex Inc v. Shire LLC, 2018 FC 637.
135 Genentech, Inc v. Amgen Canada Inc, 2017 FC 1023.
e any combination of the variations set out in bullets a to d above.
137 Register of Certificates of Supplementary Protection and Applications: https://www.canada.ca/en/health-canada/services/drugs-health-products/drug-products/applications-submissions/guidance-documents/register-certificates.html#a1.

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PENSKE TRUCK LEASING CO., L.P., Plaintiff-Appellee, v. CHEMETCO, INC., Defendant-Appellant.
Chemetco, Inc., Third-Party Plaintiff, v. United Freight Express, Inc., Third-Party Defendant.
Patrick M. Flynn,Flynn & Guymon, Belleville, for Appellant. William P. Gavin, Gavin Law Firm, Belleville, for Appellee.
Defendant and third-party plaintiff, Chemetco, Inc., appeals from a judgment of the circuit court of Madison County in favor of plaintiff, Penske Truck Leasing, Co., L.P., in the amount of $200,478.15, consisting of $53,514.76 for a lease-payment delinquency, $88,216 for liquidated damages, $32,598.07 for interest, and $26,149.32 for attorney fees. Third-party defendant, United Freight Express (UFE), was out of business at the time of trial and did not participate. Likewise, it takes no part in this appeal. The issues we are asked to address are (1) whether the liquidated-damages clause of the contract is an unenforceable penalty provision and (2) whether the trial court erred in computing the damages owed to plaintiff. We affirm in part, reverse in part, and remand with directions.
The instant case involves a default on a vehicle lease service agreement (agreement). On May 3, 1995, plaintiff and UFE entered into the agreement for a term of 36 months, covering four trucks identified as Units 141580, 141581, 141582, and 141583. Additional vehicles could be added pursuant to paragraph three of the lease agreement. Defendant's role was to guarantee performance and payment of the lease by UFE. Plaintiff would not agree to lease the vehicles to UFE without defendant's guarantee.
“15. DEFAULT AND REMEDIES. (A) If (i) CUSTOMER shall fail or refuse to pay any charges under this lease when due, or (ii) CUSTOMER shall fail or refuse to perform any other term of this lease for five (5) days after written notice thereof is sent to CUSTOMER by PENSKE TRUCK LEASING, or (iii) CUSTOMER or any guarantor of CUSTOMER's obligations shall become insolvent or make a bulk transfer of its assets to make an assignment for the benefit of creditors, or (iv) CUSTOMER or any guarantor of CUSTOMER's obligations shall file or suffer the filing against it of a petition under the Bankruptcy Code or under any other insolvency law or law providing for the relief of debtors, or (v) if any representation or warranty made by CUSTOMER herein or in any document furnished by CUSTOMER or guarantor of CUSTOMER's obligations shall prove to be incorrect in any material respect, then in any of such events PENSKE TRUCK LEASING shall be entitled to pursue the remedies specified in the following paragraph.
Upon the happening of one of the preceding Events of Default, PENSKE TRUCK LEASING may, with or without terminating this lease, with or without demand or notice to CUSTOMER, and with or without any court order or process of law, take immediate possession of, and remove, any and all Vehicles covered by this lease wherever located, and/or retain and refuse to deliver, and/or re[ ]deliver to CUSTOMER, the Vehicle(s), without PENSKE TRUCK LEASING being liable to CUSTOMER for damages caused by such taking of possession. Whether or not it shall have exercised its right to take possession of the Vehicles upon the happening of any Event of Default, PENSKE TRUCK LEASING may, with or without terminating this lease as to one (1) or more Vehicles, require CUSTOMER[,] upon five (5) days' written notice to CUSTOMER, to, at PENSKE TRUCK LEASING's option, either purchase the Vehicle(s) or make the alternative payment in accordance with Article 16[ ] and[,] in addition, pay to PENSKE TRUCK LEASING the total of the lease charges and any guaranteed mileage charges for all such Vehicles up to the date upon which CUSTOMER could have terminated this lease by exercise of its rights under Article 16, together with the sum of all charges due and unpaid to the date of PENSKE TRUCK LEASING's notice to CUSTOMER under this paragraph.
In the event that CUSTOMER shall fail to purchase the Vehicle (or, at PENSKE TRUCK LEASING's option, make the alternative payment)[ ] and pay all other sums provided in the preceding paragraph, PENSKE TRUCK LEASING may sell the Vehicle(s) at one (1) or more public or private sales, with or without notice to CUSTOMER, and with or without having the Vehicle(s) at the sale. The proceeds of the sale, less PENSKE TRUCK LEASING's expenses of retaking, storage, repair, and resale, shall be applied to payment of any obligations due to PENSKE TRUCK LEASING by CUSTOMER under this Lease or otherwise. CUSTOMER shall remain liable for the balance due PENSKE TRUCK LEASING under the preceding paragraph and for any deficiency in the balance of any sums due PENSKE TRUCK LEASING under any other lease or indebtedness. If PENSKE TRUCK LEASING is unable to sell the Vehicle upon terms and within a period of time satisfactory to it * * * or if it shall elect not to sell the vehicle, then PENSKE TRUCK LEASING may retain the Vehicle, crediting CUSTOMER with the then Net Fair Market Value of the Vehicle (defined as the highest appraisal of Fair Market Value (wholesale) received by PENSKE TRUCK LEASING from two (2) or more independent vehicle dealers, less all expenses and costs incurred by it). The Net Fair Market Value of the Vehicle shall be applied to CUSTOMER's obligations to PENSKE TRUCK LEASING[,] and CUSTOMER shall remain liable for any sums due to PENSKE TRUCK LEASING under this lease or otherwise. All amounts to be retained by PENSKE TRUCK LEASING and any balance to be paid by CUSTOMER under this lease shall not be construed as a penalty, but as liquidated damages for the breach of this lease, and as PENSKE TRUCK LEASING's reasonable return for the use of the Vehicles and for their depreciation.
In addition, PENSKE TRUCK LEASING may proceed by appropriate court action to enforce the terms of this lease or to recover damages for the breach of any of its terms.
In the event PENSKE TRUCK LEASING takes possession of or retains any Vehicle and there shall, at the time of taking or retention, be in, upon[,] or attached to the Vehicle any property or things of a value belonging to CUSTOMER or in CUSTOMER's custody or control, PENSKE TRUCK LEASING is authorized to take possession of such items and either hold the items for CUSTOMER or place them in public storage for CUSTOMER, at CUSTOMER's sole cost and risk of loss or damage.
(B) In the event PENSKE TRUCK LEASING shall fail or refuse to perform or observe any material term of this lease for thirty (30) days after written notice is sent to PENSKE TRUCK LEASING by CUSTOMER, CUSTOMER shall be entitled, as its sole remedy, to either (i) terminate this lease as to the Vehicle(s) which is (are) the subject of default (‘Defaulting Vehicle(s)’) and purchase such Defaulting Vehicle(s) for cash in accordance with Article 16 and make the other payments required to be made thereunder[ ] or (ii) in good faith and without unreasonable delay obtain a vehicle (substantially similar in the equivalent carrying capacity and design to the Defaulting Vehicle(s)) in substitution for the Defaulting Vehicle(s) and, subject to Article 20, recover damages from PENSKE TRUCK LEASING as to such Defaulting Vehicle(s).
16. TERMINATING PRIVILEGES. Either party may[,] upon sixty (60) days' prior written notice to the other, terminate this lease as to one (1) or more of the Vehicles on the annual anniversary of their respective in[-]service dates.
Upon termination by either party, CUSTOMER shall, at PENSKE TRUCK LEASING's option, purchase the Vehicle as to which the notice has been given[,] other than substitute, interim, or additional vehicle(s). Alternatively, in lieu of purchasing the Vehicle, CUSTOMER may elect to pay PENSKE TRUCK LEASING the difference, if any, between the purchase price as calculated in this Article and the Fair Market Value (defined as the highest appraisal of market value (wholesale) received by PENSKE TRUCK LEASING from two (2) or more independent vehicle dealers) of each such vehicle as of the date of termination (the ‘alternative payment’).
The purchase price of the Vehicle shall be the original agreed value of the Vehicle set forth in Schedule ‘A’ less the monthly depreciation credit of the Vehicle set forth in Schedule ‘A’ multiplied by the number of months elapsed from the in[-]service date of the Vehicle to the termination date, provided, however, that the purchase price to be paid by the CUSTOMER for the Vehicle shall not be less than fifteen percent (15%) of its original agreed value set forth in Schedule ‘A’.
Neither UFE nor defendant acceded to plaintiff's demand to pay $212,615.16. Instead, UFE returned the four leased trucks to plaintiff on August 28, 1996. On January 8, 1997, plaintiff filed suit against defendant, seeking $150,375.72, plus its collection and litigation expenses, accrued interest, and costs of suit. Defendant raised affirmative defenses, including, inter alia, that the premature-termination liquidated-damages formula provided for in the lease is actually an unenforceable penalty provision.
A bench trial was conducted on August 26, 1998. Plaintiff called David Hoff as a witness. Hoff was defendant's president and signed the lease on behalf of defendant. Hoff was employed elsewhere at the time of trial. Hoff has an undergraduate degree in industrial supervision and a master's degree in business administration (MBA). Hoff admitted that plaintiff did not take advantage of him in getting him to sign the lease of behalf of defendant.
The only other witness called was Robert Douglas, director of maintenance systems in plaintiff's corporate offices. In 1995, he was a district manager for plaintiff. His territory included southern Illinois. He stated that the trucks in question came out of plaintiff's rental fleet and were not special-ordered. He explained that plaintiff spends an extensive amount of time planning its needs and purchasing vehicles for its rental fleet. Plaintiff buys only the trucks it will need for the year and does not flood the market.
Douglas testified that after UFE returned the four trucks, plaintiff investigated the market to determine the trucks' value and discovered that the market was depressed. According to Douglas, plaintiff would have made a bad business decision if it had sold the trucks at this point because the trucks' market value was only about one half of what it should have been. Plaintiff also checked the possibility of leasing or renting the trucks to another company or individual to get some revenue to offset some of the expenses. Ultimately, plaintiff obtained bids for fair market value of the trucks from two independent wholesalers and calculated liquidated damages as per the agreement.
On cross-examination Douglas admitted that plaintiff had a duty to mitigate damages under the contract. In an attempt to do this, plaintiff rented the four trucks to other businesses after UFE returned the trucks to plaintiff. Plaintiff's records indicate that the trucks were leased again from September 26, 1996, through June 9, 1997, for a total of $32,808.45. Plaintiff's records also indicate that on March 10, 1997, the four trucks were sold to Freightliner for $30,400 each. Neither the additional $32,808.45 in lease money nor the $30,400-per-truck sale price was considered by the trial court in computing damages.
The trial court computed plaintiff's award in the following manner: The agreement set the original truck values at $45,241 each. The amount of $6,120.40 was then deducted, representing the agreed-upon monthly depreciation amount of $470.80 multiplied by 13, the number of months that elapsed between the commencement of the lease and the premature termination, for a total of $39,120.60 per truck. The appraised value of each truck was deducted. The trial court calculated the wholesale value of each truck at $17.066.60, resulting in a net fair market value of $22,054 per truck. Liquidated damages were calculated at $88,216, which is the net fair market value multiplied by four. The trial court added that amount to the amount of the past-due invoice of $53,514.76. It multiplied that amount by 1% for 23 months to determine the interest due, $32,598.07, for a total of $174,328.83. Fifteen percent of that amount, $26,149.32, was added for attorney fees, for a total award of $200,478.15. The trial court entered judgment in that amount. Defendant filed a timely notice of appeal.
I. Liquidated Damages or Penalty Provision?
The first issue we are asked to consider is whether the liquidated-damages clause of the contract is actually an unenforceable penalty provision. Defendant asserts that liquidated-damages provisions are valid and enforceable only if the stipulated amount is a reasonable estimate of actual damages and actual damages would be impossible or difficult to determine. Defendant contends that the evidence here demonstrates that in case of a breach there would be ample information to determine actual damages using the agreed-upon value of the original lease agreement, the lease depreciation credit, the company's re-lease records, and the sale-proceeds records or, in the event the vehicles are not sold, the independent wholesale appraisals. Moreover, defendant contends that the stated reasons given by Mr. Douglas as reasons for the lease do not establish an intention by the parties to agree in advance to the settlement of damages that would arise upon a breach of the agreement. Finally, defendant asserts that the language of the agreement that allows for alternative remedies makes the provision in question a penalty per se. Plaintiff responds that the provision at issue is an enforceable liquidated-damages provision because it provides for an amount of damages that is reasonable in light of the anticipated harm. The lease provides for a formula, as opposed to a specific amount, which begins with an agreed-upon original amount and takes into consideration the amount of depreciation of the trucks before they are returned and the used truck market at the time of the breach. We agree with the trial court and with plaintiff that the agreement provided for liquidated damages rather than a penalty.
“Damages for breach by either party may be liquidated in the agreement but only at an amount that is reasonable in the light of the anticipated or actual loss caused by the breach and the difficulties of proof of loss. A term fixing unreasonably large liquidated damages is unenforceable on grounds of public policy as a penalty.” Restatement (Second) of Contracts § 356 (1979).
The difficulty of proof of loss is a matter to be determined at the time of contracting, not the time of breach. See Restatement (Second) of Contracts § 356, Comment b (1979).
In considering whether the liquidated-damages formula contained in paragraph 15 of the agreement was enforceable, we consider not only the language of the provision but also the testimony of the witnesses at trial. As plaintiff indicated, the agreement does not set forth a sum certain in case of a breach by the customer, but it provides a formula for computing damages in case of a breach. Paragraph 15 of the agreement sets forth alternative methods of computing damages. The first method comes into play if plaintiff decides to sell the vehicles after default. The proceeds of the sale, less plaintiff's “expenses in retaking, storage, repair, and resale, shall be applied to payment of any obligations due to [plaintiff].” The customer, however, remains liable for the balance due under the lease. The second method comes into play if plaintiff decides not to sell the vehicles. This method requires plaintiff to credit the customer with the net fair market of the vehicles, described as “the highest appraisal of Fair Market Value (wholesale) received by [plaintiff] from two (2) or more independent vehicle dealers, less all expenses and costs incurred by it.” Under this method defendant also remains liable to plaintiff for any sums due under the lease.
Paragraph 15 specifically states that the amounts retained by plaintiff and any balance due under the agreement “shall not be construed as a penalty, but as liquidated damages for the breach of this lease.” While that language is not in itself controlling, it should be given some weight. See United Order of American Bricklayers & Stone Masons Union No. 21 v. Thorleif Larsen & Son, Inc., 519 F.2d 331, 333 (7th Cir.1975). The inclusion of the term liquidated damages indicates to us an arrangement by the parties that takes into consideration the possibility of breach and the necessity to take into account damages for such a breach. Defendant knew the risk it was undertaking by agreeing to guarantee the lease between plaintiff and UFE. Plaintiff refused to lease the vehicles to UFE without a guarantee.
At trial, plaintiff called defendant's president at the time the agreement was signed. He was not unsophisticated in business matters. He had a broad business background, including an MBA. He admitted that plaintiff did not take advantage of him in the process of getting him to sign the agreement. Defendant did not call any witnesses at trial and did not show that the liquidated-damages provision was unreasonable in light of the anticipated actual loss that would be caused by a breach or the difficulties of proof of loss. Defendant failed to rebut the testimony of Robert Douglas, who testified that the used truck market was cyclical. The record is replete with evidence that it was difficult to determine plaintiff's losses with regard to a breach of the agreement at the time the agreement was entered by the parties because the used truck market is difficult to predict in advance. Under these circumstances, the alternative formulas provided for in the agreement appear reasonable. We conclude that the agreement provided for an enforceable liquidated-damages provision and not an unenforceable penalty provision.
We move now to the second issue raised by defendant, whether the trial court erred in computing the damages owed to plaintiff. Defendant does not deny that it owes plaintiff some damages, but defendant contends that the trial court erred in computing the damages owed plaintiff because it based its computation of liquidated damages on the faulty assumption that plaintiff decided to retain the vehicles, contrary to plaintiff's pleadings and the evidence presented at trial. The evidence at trial showed that within six months of the vehicles' return to plaintiff, each of the vehicles was sold for $30,400, for a total of $121,600. Defendant contends it is entitled to have $30,400 per vehicle applied to its obligations to plaintiff rather than the wholesale value of $17,066.60 per vehicle applied by the trial court. Defendant also asserts that it is entitled to a credit for lease payments received by plaintiff prior to the sale of the trucks. Plaintiff responds that its actions with regard to the four trucks were consistent with its rights under the lease. Plaintiff chose not to sell the trucks immediately after defendant and UFE failed to respond to plaintiff's request to purchase the trucks at the depreciated value of $156,482.40, because the return at that time would have been low due to a depressed used-truck market. Likewise, plaintiff responds that the agreement does not give defendant the right to credit for the gross amount of rentals received by plaintiff after the return of the trucks. Plaintiff points out that it has the ability to lease an indeterminate amount of vehicles, limited only by customer demand. Therefore, had UFE not defaulted, plaintiff would have continued to receive not only lease income from UFE for the four trucks leased under the agreement in question, but also lease income from another party for additional trucks. Instead, the other party rented UFE's returned trucks. Both parties make convincing arguments.
Black's Law Dictionary defines liquidated damages as “[a]n amount contractually stipulated as a reasonable estimation of actual damages to be recovered by one party if the other party breaches.” Black's Law Dictionary 395 (7th ed.1999). The following general contract principles also guide us in our interpretation of the liquidated-damages provision.
“The primary object of a court in construing a contract is to give effect to the intention of the parties. [Citation.] Generally, the intention of the parties is to be determined from the final agreement executed by them rather than from preliminary negotiations and the construction placed upon the agreement by the parties [citations], but when there is an ambiguity arising from terms of a contract, meaning may be derived from extrinsic facts. [Citations.]” Hickox v. Bell, 195 Ill.App.3d 976, 989-990, 142 Ill.Dec. 392, 552 N.E.2d 1133, 1142.
In interpreting provisions that affix the amount of damages in the event of a breach, courts “lean toward a construction which excludes the idea of liquidated damages and permits the parties to recover only damages actually sustained.” Arco Bag Co. v. Facings, Inc. 18 Ill.App.2d 110, 116, 151 N.E.2d 438, 441 (1958).
In the instant case, as previously discussed, paragraph 15 of the agreement provides alternative methods of computing damages. One method is applicable if plaintiff decides to sell the vehicles, while another method is used if plaintiff retains the vehicles. The trial court awarded damages based upon the method which assumed that plaintiff retained the vehicles. While Mr. Douglas testified that plaintiff initially decided to retain the vehicles because of a depressed market, the evidence is clear that plaintiff ultimately sold all four vehicles for $30,400 each. We are certain that it was never the intention of the parties to permit plaintiff to proceed under the method of recovery used when plaintiff decides to retain the vehicle but later sell the vehicles and reap a windfall in the process. If we allowed plaintiff to proceed in this manner, the damages would be so unreasonable that we should refuse to enforce the provisions of paragraph 15, and that paragraph would have to be considered a penalty provision.
The award entered by the trial court was well in excess of the actual damages suffered by plaintiff as a result of UFE's and defendant's breach. The trial court erred in computing plaintiff's damages. It should have computed damages using the alternative method provided for in paragraph 15, in which the proceeds of the sale, here $30,400 per truck, are applied as payment toward defendant's obligations. However, we disagree with defendant's assertions that it should receive credit for the gross amount of rentals received by plaintiff on these four trucks after UFE returned them to plaintiff. A review of the contract shows that no such provision was included. After careful consideration, we agree with plaintiff's argument that had UFE not breached, plaintiff would have received rental income from both UFE and the party who later rented the returned vehicles, instead of only the party who rented UFE's returned vehicles.
We agree with the trial court's determination that the agreement provided for an enforceable liquidated-damages clause and not an unenforceable penalty provision. However, we disagree with the method used by the trial court in computing liquidated damages and reverse on this issue. We remand to the trial court with directions to credit defendant with the proceeds of the sale of the trucks. The new computation of liquidated damages will lower both the award of interest and attorney fees due plaintiff.
For the foregoing reasons, the judgment of the circuit court of Madison County is affirmed in part and reversed in part, and the cause is remanded with directions.
Affirmed in part and reversed in part; cause remanded with directions.
RARICK and KUEHN, JJ., concur.


text:
Effect of the media anisotropy on an incoming shear wave may manifest itself as splitting it into two polarized shear waves of different velocities (Shear wave splitting, SWS). Polarization of the resulting "fast" wave and the delay between the "fast" and "slow" waves provide information on the orientation and the intensity of the seismic anisotropy of the media.
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CHC 79.0 4.0 SKS 41.98 -111.01 2007 Marone, F.; Romanowicz, B.; Marone, F.; Romanowicz, B.
MQR 83.0 4.0 SKS 44.55 -114.4 2007 Marone, F.; Romanowicz, B.; Marone, F.; Romanowicz, B.
SSPA 74.0 4.0 SKS 40.64 -77.89 2017 White-Gaynor, A.L. and Nyblade, A.A.
NUG 57.0 4.0 SKS 41.83 -110.87 2007 Marone, F.; Romanowicz, B.; Marone, F.; Romanowicz, B.
CAP2 333.0 4.0 SKS 8.65 -77.36 2016 Idárraga-García, J., Kendall, J.M. and Vargas, C.A.
SJG 56.0 4.0 SKKS 18.11 -66.15 2012 Benford, B., Tikoff, B. and DeMets, C.
STVI 13.0 4.0 SKS 18.35 -64.96 2012 Benford, B., Tikoff, B. and DeMets, C.
L59A 76.0 4.0 SKS 42.19 -75.04 2017 White-Gaynor, A.L. and Nyblade, A.A.
RREF 65.0 4.0 SKS 4.9 -75.35 2016 Idarraga-Garcia, J.; Kendall, J. M.; Vargas, C. A.
RREF 71.0 4.0 SKS 4.9 -75.35 2016 Idarraga-Garcia, J.; Kendall, J. M.; Vargas, C. A.
TLY 78.0 4.0 direct S Source-Side splitting 45.464 26.183 2009 Russo, R. M.; Mocanu, V. I.
YAK 321.0 4.0 direct S Source-Side splitting 45.743 26.58 2009 Russo, R. M.; Mocanu, V. I.
BORG 47.0 4.0 direct S Source-Side splitting 45.787 26.622 2009 Russo, R. M.; Mocanu, V. I.
FURI 39.0 4.0 direct S Source-Side splitting 45.787 26.622 2009 Russo, R. M.; Mocanu, V. I.
CHC 79.0 4.0 SKS 41.9811 -111.011 1998 Schutt, D.L., Humphreys, E.D., Dueker, K.
MQR 83.0 4.0 SKS 44.549 -114.402 1998 Schutt, D.L., Humphreys, E.D., Dueker, K.
NUG 57.0 4.0 SKS 41.8311 -110.874 1998 Schutt, D.L., Humphreys, E.D., Dueker, K.
CAP2 333.0 4.0 SKS 8.65 -77.36 2016 Idarraga-Garcia, J.; Kendall, J. M.; Vargas, C. A.
RREF 65.0 4.0 SKS 4.9 -75.35 2016 Idárraga-García, J., Kendall, J.M. and Vargas, C.A.
RREF 71.0 4.0 SKS 4.9 -75.35 2016 Idárraga-García, J., Kendall, J.M. and Vargas, C.A.
QM66 25.0 4.0 SKKS 49.4878 -74.4369 2018 Chen, X., Li, Y. and Levin, V.
QM66 279.0 4.0 SKS 49.4878 -74.4369 2018 Chen, X., Li, Y. and Levin, V.
QM36 9.0 4.0 SKS 47.3909 -69.7855 2018 Chen, X., Li, Y. and Levin, V.
QM62 41.0 4.0 PKIKS 49.312 -73.875 2018 Chen, X., Li, Y. and Levin, V.
MSEY 352.0 3.95 direct S Source-Side splitting 45.464 26.183 2009 Russo, R. M.; Mocanu, V. I.
PCON 286.0 3.92 SKS 2.33 -76.4 2016 Idarraga-Garcia, J.; Kendall, J. M.; Vargas, C. A.
RREF 76.0 3.92 SKS 4.9 -75.35 2016 Idarraga-Garcia, J.; Kendall, J. M.; Vargas, C. A.
RREF 76.0 3.92 SKS 4.9 -75.35 2016 Idárraga-García, J., Kendall, J.M. and Vargas, C.A.
PCON 286.0 3.92 SKS 2.33 -76.4 2016 Idárraga-García, J., Kendall, J.M. and Vargas, C.A.
SDV 53.0 3.9 SKS 8.88 -70.63 2016 Idárraga-García, J., Kendall, J.M. and Vargas, C.A.
FS09 322.2 3.9 sSKS -12.97 -71.42 2015 Eakin, C.M., Long, M.D., Wagner, L.S., Beck, S.L. and Tavera, H.
SDV 53.0 3.9 SKS 8.88 -70.63 2016 Idarraga-Garcia, J.; Kendall, J. M.; Vargas, C. A.
RUS 62.0 3.85 SKS 5.89 -73.08 2016 Idarraga-Garcia, J.; Kendall, J. M.; Vargas, C. A.
MAJO 65.0 3.85 direct S Source-Side splitting 45.787 26.622 2009 Russo, R. M.; Mocanu, V. I.
RUS 62.0 3.85 SKS 5.89 -73.08 2016 Idárraga-García, J., Kendall, J.M. and Vargas, C.A.
SSPA 333.0 3.85 SKS 40.64 -77.89 2017 White-Gaynor, A.L. and Nyblade, A.A.
AIO 43.0 3.8 37.97 15.23 2007 Baccheschi, P.; Margheriti, L.;Steckler, M.
BRR 337.0 3.75 SKS 7.11 -73.71 2016 Idárraga-García, J., Kendall, J.M. and Vargas, C.A.
OTAV 51.0 3.75 SKS 0.24 -78.45 2016 Idarraga-Garcia, J.; Kendall, J. M.; Vargas, C. A.
OTAV 51.0 3.75 SKS 0.24 -78.45 2016 Idárraga-García, J., Kendall, J.M. and Vargas, C.A.
BRR 337.0 3.75 SKS 7.11 -73.71 2016 Idarraga-Garcia, J.; Kendall, J. M.; Vargas, C. A.
ANWB 301.0 3.7 SKKS 17.67 -61.79 2012 Benford, B., Tikoff, B. and DeMets, C.
TSK 331.0 3.7 direct S Source-Side splitting 45.841 26.668 2009 Russo, R. M.; Mocanu, V. I.
CHTO 74.0 3.65 direct S Source-Side splitting 45.787 26.622 2009 Russo, R. M.; Mocanu, V. I.
ANIL 85.0 3.65 SKS 4.49 -75.4 2016 Idárraga-García, J., Kendall, J.M. and Vargas, C.A.
SSPA 358.0 3.65 SKS 40.64 -77.89 2017 White-Gaynor, A.L. and Nyblade, A.A.
ANIL 85.0 3.65 SKS 4.49 -75.4 2016 Idarraga-Garcia, J.; Kendall, J. M.; Vargas, C. A.
SDV 50.0 3.62 SKS 8.88 -70.63 2016 Idárraga-García, J., Kendall, J.M. and Vargas, C.A.
SDV 50.0 3.62 SKS 8.88 -70.63 2016 Idarraga-Garcia, J.; Kendall, J. M.; Vargas, C. A.
STVI 66.0 3.6 SKKS 18.35 -64.96 2012 Benford, B., Tikoff, B. and DeMets, C.
PTLC 318.0 3.6 SKS -0.17 -74.8 2016 Idarraga-Garcia, J.; Kendall, J. M.; Vargas, C. A.
PTLC 318.0 3.6 SKS -0.17 -74.8 2016 Idárraga-García, J., Kendall, J.M. and Vargas, C.A.
B13 79.0 3.6 50.35 7.368 2005 Walker,K.T., Bokelmann, G.H.R., Klemperer, S.L., and Bock, G.
EYAK 84.77 3.58 60.5488 -145.75 2012 Hanna, J. and Long, M.D.
BESE 309.72 3.54 58.5792 -134.856 2012 Hanna, J. and Long, M.D.
BPAW 38.31 3.54 64.1 -150.98 2012 Hanna, J. and Long, M.D.
ANWB 280.0 3.5 SKKS 17.67 -61.79 2012 Benford, B., Tikoff, B. and DeMets, C.
POP2 67.0 3.5 SKS 2.54 -76.68 2016 Idárraga-García, J., Kendall, J.M. and Vargas, C.A.
POP2 67.0 3.5 SKS 2.54 -76.68 2016 Idarraga-Garcia, J.; Kendall, J. M.; Vargas, C. A.
DBIC 308.6 3.5 Direct S Source-side splitting 11.4 -60.9 2013 Lynner, Colton; Long, Maureen D.
CRZF 337.6 3.5 Direct S Source-side splitting -56.4 -26.9 2013 Lynner, Colton; Long, Maureen D.
ASCN 331.2 3.5 Direct S Source-side splitting -55.9 -28.2 2013 Lynner, Colton; Long, Maureen D.
LCO 64.0 3.5 Direct S source-side splitting 12.6 -89.4 2014 Lynner, Colton; Long, Maureen D.
W06 60.12 3.5 SKS and SKKS 36.7403 48.0028 2018 Sadeghi-Bagherabadi A., Margheriti L., Aoudia A. & Sobouti F.
F6_ 294.0 3.46 SKKS 11.36533 -85.8208 2010 Abt, D.L., Fischer, K.M., Abers, G.A., Protti, M., Gonzalez, V. and Strauch, W.
GCUF 46.0 3.45 SKS 1.23 -77.34 2016 Idarraga-Garcia, J.; Kendall, J. M.; Vargas, C. A.
RREF 286.0 3.45 SKS 4.9 -75.35 2016 Idárraga-García, J., Kendall, J.M. and Vargas, C.A.
GCUF 46.0 3.45 SKS 1.23 -77.34 2016 Idárraga-García, J., Kendall, J.M. and Vargas, C.A.
BJI 340.0 3.45 direct S Source-Side splitting 45.841 26.668 2009 Russo, R. M.; Mocanu, V. I.
RSSD 311.0 3.45 direct S Source-Side splitting 45.787 26.622 2009 Russo, R. M.; Mocanu, V. I.
RREF 286.0 3.45 SKS 4.9 -75.35 2016 Idarraga-Garcia, J.; Kendall, J. M.; Vargas, C. A.
RREF 67.0 3.42 SKS 4.9 -75.35 2016 Idarraga-Garcia, J.; Kendall, J. M.; Vargas, C. A.
RREF 67.0 3.42 SKS 4.9 -75.35 2016 Idárraga-García, J., Kendall, J.M. and Vargas, C.A.
ANIL 76.0 3.4 SKS 4.49 -75.4 2016 Idarraga-Garcia, J.; Kendall, J. M.; Vargas, C. A.
QM36 343.0 3.4 SKS 47.3909 -69.7855 2018 Chen, X., Li, Y. and Levin, V.
NHSC 318.2 3.4 Direct S source-side splitting 52.6 -176.1 2014 Lynner, Colton; Long, Maureen D.
DBIC 341.4 3.4 Direct S Source-side splitting -59.3 -25.9 2013 Lynner, Colton; Long, Maureen D.
FM06 301.6 3.4 sSKS -13.35 -74.46 2015 Eakin, C.M., Long, M.D., Wagner, L.S., Beck, S.L. and Tavera, H.
ANIL 76.0 3.4 SKS 4.49 -75.4 2016 Idárraga-García, J., Kendall, J.M. and Vargas, C.A.
B23 78.0 3.4 49.916 6.346 2005 Walker,K.T., Bokelmann, G.H.R., Klemperer, S.L., and Bock, G.
B24 84.0 3.4 49.921 6.574 2005 Walker,K.T., Bokelmann, G.H.R., Klemperer, S.L., and Bock, G.
B16 76.0 3.4 50.222 7.235 2005 Walker,K.T., Bokelmann, G.H.R., Klemperer, S.L., and Bock, G.
KMI 337.3 3.4 Direct S source-side splitting 52.2 -171.7 2014 Lynner, Colton; Long, Maureen D.
CLTB 87.0 3.38 37.58 13.22 2007 Baccheschi, P.; Margheriti, L.;Steckler, M.
FLO2 347.0 3.37 SKS 1.58 -75.65 2016 Idárraga-García, J., Kendall, J.M. and Vargas, C.A.
FLO2 347.0 3.37 SKS 1.58 -75.65 2016 Idarraga-Garcia, J.; Kendall, J. M.; Vargas, C. A.
53172 294.0 3.36 SKS 24.2 103.6 2015 Huang, Z., Wang, L., Xu, M., Ding, Z., Wu, Y., Wang, P., Mi, N., Yu, D. and Li, H.

matches: V. V. V. V. V. V. V. V. V. V. V. V. V. V. V. V.