Unilever and Procter & Gamble in $100 Million Patent Claim

The trial of what is believed to be the longest damages Reference ever heard in a patent case in Canada has just been completed. The hearing of the Reference was conducted before the Honourable George Adams, Q.C., appointed by Order of the Federal Court of Canada pursuant to the Judgement of the Honourable Mr. Justice Muldoon in this action.

The action involves the suit by Unilever PLC and Lever Brothers Limited (Unilever) against Procter & Gamble Inc. and the Procter Gamble Company (Procter & Gamble) for infringement of Unilever’s Rudy/Rapisarda patent in the production of Procter & Gamble’s successful dryer added sheet fabric conditioner, “Bounce”. The plaintiffs are claiming in excess of $100 million plus pre-judgment interest.

The trial of the liability phase of this patent infringement action was held in the Federal Court before the Honourable Mr. Justice Muldoon in October 1990–February 1991. In a judgment delivered in February 1993, Mr. Justice Muldoon held that every sheet of Bounce sold by Procter & Gamble in Canada during the statutory 17-year life of the Rudy/ Rapisarda patent infringed the patent. Muldoon J. ruled that Unilever was entitled to damages by reason of Procter & Gamble’s infringement and that the damages were to be measured in accordance with a “generous but non-confiscatory” rate of royalty on all sales of Bounce in or from Canada during the 17-year life of the patent. He directed a Reference to determine the quantum of Unilever’s damages.

The judgment of Mr. Justice Muldoon was upheld in all respects by the Federal Court of Appeal in June 1995. By Order of the Federal Court of Canada dated June 1998, the Honourable George Adams, Q.C., was appointed as Referee to hear and determine the damages payable by Procter & Gamble to Unilever by reason of Procter & Gamble’s infringement of Unilever’s patent.

The trial before the Honourable Mr. Adams commenced on September 13, 1999 and concluded January 22, 2000. Judgment is under reserve. It is believed to be the longest damages trial in a patent infringement action ever held in Canada. Expert witnesses from Canada, the United Kingdom and the United States gave evidence on behalf of both parties. It is anticipated that the judgment will treat several unprecedented issues in the law of damages for patent infringement in Canada, including the interpretation of “a generous but non-confiscatory” rate of royalty, which is a unique measure of damages, apparently unprecedented in the common law jurisdictions anywhere in the world.

Acting for Unilever are F. Paul Morrison, William H. Richardson, Timothy J. Murphy, Lisa A. Clarkson and Andrew De L. McDougall of McCarthy Tétrault. Acting for Procter & Gamble, are H. Lorne Morphy, Q.C., Sheila R. Block, Barry A. Leon, Patrick D. Flaherty, John P. Koch and John A. Terry of Torys.