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Copyright - Costs. AGI Suretrack, LLC v. Farmers Edge Inc.
In AGI Suretrack, LLC v. Farmers Edge Inc. (Fed CA, 2025) the Federal Court of Appeal considers cost awards in intellectual property cases:[1] It is common for the Federal Court to award lump-sum costs well in excess of the Tariff in intellectual property proceedings. These awards are often fixed as a percentage of actual legal costs. The range of awards is wide but frequently settles in the 30 to 50% range (Venngo Inc. v. Concierge Connection Inc. (Perkopolis), 2017 FCA 96, at para. 85 [Venngo]; Nova Chemicals Corporation v. Dow Chemical Company, 2017 FCA 25, at para. 17 [Nova Chemicals]). Several considerations support this practice, including the greater than average complexity of intellectual property trials, the sophistication of the parties, and legal bills far in excess of what Tariff B allows (Allergan Inc. v. Sandoz Canada Inc., 2021 FC 186, at para. 26).
[2] This type of award (a percentage of actual costs) is distinct from the fixed amount awards that are routinely granted in the Federal Court and this Court. These fixed amount awards are a reasonably generous but rough approximation of what the Tariff would grant for a trial, judicial review, motion or appeal. The purpose of fixing costs peremptorily is to provide certainty to the parties, facilitate closure and reduce litigation costs. The reasons that follow do not address these types of costs orders and should not be understood to affect the continuation of this practice.
[3] In this motion, the respondent, who was successful at both trial and appeal, seeks an elevated award of costs. The respondent asks for costs of $441,195, plus interest, representing about 90% of its actual fees and disbursements for the appeal. The respondent argues that an elevated costs award is justified given the lack of merit in the appeal, the complexity of the issues and two settlement offers made in advance of the appeal hearing.
[4] The respondent seeks to migrate the practice of awarding costs based on a percentage of actual legal fees from trials to appeals. In the circumstance of this appeal, I am not convinced this practice should be followed. It is not a foregone conclusion that elevated lump-sum costs are justified in every intellectual property trial nor in every intellectual property appeal. Whether at trial or appeal, the burden is on the successful party, to "“demonstrate why their particular circumstances warrant an increased award”" (Nova Chemicals, at para. 13). While I am satisfied that an elevated award of costs is warranted, I would, in the circumstances, confine it to a modest premium over what the Tariff, B, Column V, would allow.
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[8] Lump sum awards "“cannot be justified solely on the basis that a successful party’s actual fees are significantly higher than the Tariff amounts”" (Nova Chemicals, at para. 13; see also Apotex Inc. v. Shire LLC, 2021 FCA 54, at para. 18 [Apotex]). If this argument were to succeed, there would be no need for a Tariff at all. Actual legal fees will invariably be higher than the Tariff.
[9] The respondent cites Nova Chemicals, Venngo, Apotex, and Steelhead LNG (ASLNG) Ltd. v. ARC Resources Ltd., 2025 FCA 5 [Steelhead LNG] in support of its position that actual legal fees should supersede tariff amounts. Notably, other than Steelhead LNG, none of these decisions arise in an appellate context.
[10] In Steelhead LNG, the successful party requested costs in an amount that was "“less than one-third of their actual legal costs”" (Steelhead LNG, at para. 4). Ultimately, this Court awarded less than half of the amount requested, falling well outside of the 25 to 50% range that the respondent suggests is "“generally considered”" in the context of complex patent litigations. In Steelhead LNG, Stratas J.A. characterized the appeal as "“less than a low-chance case, especially given the strict and demanding appellate standard of review of ‘palpable and overriding error’”" (Steelhead LNG, at para. 7).
[11] Costs awards in the context of intellectual property trials are not benchmarks for costs awards in the appellate context. Cost awards in intellectual property trials engage considerations that are generally not present in their counterpart appeals: parties need not prepare expert reports and lead evidence, the life span of an action can exceed two years, compared to nine months from notice of appeal to hearing in a routine appeal, there are fewer motions at an appellate level to name but a few. In appeals to this Court, timelines, page limits and the length of hearing are strictly controlled. But most importantly, appeals are constrained by the grounds of appeal, the standard of review and oral arguments are, or should be, laser-focused on questions of law or palpable and overriding errors of evidence. The considerations driving costs awards as a percentage of actual legal fees cannot be summarily transposed to an appellate context.
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