In the recent decision of Munchkin, Inc. v. Angelcare Canada Inc., 2024 FCA 156, the Federal Court of Appeal upheld the Federal Court’s decision finding Munchkin, Inc. and its Canadian subsidiary liable for infringing several patents held by Angelcare Canada Inc. One of the issues in Munchkin’s appeal was whether the U.S.-based parent company could be held liable for actions in Canada despite not having a direct physical presence here. The Court rejected Munchkin’s argument, emphasizing that foreign entities cannot escape liability for patent infringement simply by operating from outside Canada. The Court noted that the parent company designed and marketed the infringing products, demonstrating sufficient participation in the infringement. This ruling reinforces that entities outside of Canada can be found liable when their conduct results in patent infringement in Canada.

Additionally, the Court addressed confidentiality and prior disclosure issues, affirming that there is a presumption of confidentiality when manufacturers receive prototype designs or other information from clients. Munchkin’s argument that no confidentiality existed was dismissed by the Court based on the nature of the relationship and the business practices of the manufacturer in question. The decision highlights the importance of appreciating confidentiality issues in business communications, especially in the intellectual property context.

The decision is reported here.