Dow Chemical Company v. Nova Chemical Corporation

Dow Chemical Company v. Nova Chemical Corporation

The Court held Nova may deduct only the costs actually incurred to obtain the ethylene used in infringing products and may not deduct capital depreciation for Western Olefins or costs for distribution, marketing, sales and R&D under subparagraph 5(a); fixed costs of the PE2 plant must be allocated to infringing products by billed volume based on discovery evidence and expert reliance; and initial PE2 capital expenditures reported in CAD should be depreciated in CAD and converted to USD annually (Soriano approach) as it is reasonable, supported by evidence and avoids punitive single-year conversion. Applying these rulings, the Court awarded Dow a judgment of $644,623,550.00 inclusive of...

Citation
2017 FC 637
Parties
Plaintiffs/defendants by Counterclaim: The Dow Chemical Company; Dow Global Technologies Inc.; Dow Chemical Canada ULC; Defendant/plaintiff by Counterclaim: Nova Chemicals Corporation
Court
Federal Court
Jurisdiction
Canada
Judgment Date
5 July 2017
Procedural Posture
Patent Infringement; Accounting of Profits Reference / Supplemental Judgment Resolving Damages and Accounting Issues
Outcome
Judgment for Plaintiffs on accounting of profits issues; monetary award against Nova
Legal Topics
Accounting of Profits, Allocation of Fixed and Capital Costs, Currency Conversion for Capital Expenditures, Damages Calculation
Source Language
English
Intellectual Property Patent Law Civil Remedies Commercial Law Accounting of Profits Allocation of Fixed and Capital Costs Currency Conversion for Capital Expenditures Damages Calculation

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Parties

The Dow Chemical Company; Dow Global Technologies Inc.; Dow Chemical Canada ULC

Plaintiffs/defendants by Counterclaim

Nova Chemicals Corporation

Defendant/plaintiff by Counterclaim

Procedural Posture

Patent Infringement; Accounting of Profits Reference / Supplemental Judgment Resolving Damages and Accounting Issues

Legal Issues

  1. 1 Whether defendant may deduct capital depreciation and fixed costs relating to ethylene used to produce infringing products
  2. 2 Proper method to allocate PE2 plant fixed costs between infringing and non-infringing products
  3. 3 Appropriate timing and method for converting initial PE2 capital expenditures reported in CAD to USD for annual depreciation calculations

Ratio Decidendi

The Court held Nova may deduct only the costs actually incurred to obtain the ethylene used in infringing products and may not deduct capital depreciation for Western Olefins or costs for distribution, marketing, sales and R&D under subparagraph 5(a); fixed costs of the PE2 plant must be allocated to infringing products by billed volume based on discovery evidence and expert reliance; and initial PE2 capital expenditures reported in CAD should be depreciated in CAD and converted to USD annually (Soriano approach) as it is reasonable, supported by evidence and avoids punitive single-year conversion. Applying these rulings, the Court awarded Dow a judgment of $644,623,550.00 inclusive of...

Court Disposition

Judgment for Plaintiffs on accounting of profits issues; monetary award against Nova

Orders

  • Nova shall pay to Dow $644,623,550.00, inclusive of pre-judgment interest to April 7, 2017, together with pre-judgment interest calculated in accordance with this Court's Judgment in Dow v Nova from April 7, 2017 to the date of this Judgment.
  • Nova shall pay to Dow post-judgment interest of 5%, not compounded, from the date of this Judgment.