MONEY DOESN’T GROW ON TREES: Federal Court Dismisses GreenBlue’s Purported Expenses in Accounting of Profits Analysis

The Federal Court released its decision in Deeproot Green Infrastructure, LLC v Greenblue Urban North America Inc., 2026 FC 125 on January 28, 2026, in respect of the appropriateness of an accounting of profits remedy for infringement of Deeproot’s integrated tree root and storm water system patents. The issue had been remitted back to the Court following a decision of the Federal Court of Appeal in May 2023.

The specific issue before the Court was what amount, if any, of overhead expenses the infringer GreenBlue could deduct from revenue generated through infringing sales, including whether they had established an evidence-based causal connection between the claimed costs and the infringing sales. Ultimately, the Court ruled that no deductions could be made, owing to a lack of evidence distinguishing between expenses related to Canadian versus U.S. sales, as well as GreenBlue’s pure speculation of expenses without sufficient supporting evidence or expert evidence.

The Court’s decision first summarizes general principles of the accounting of profits remedies. The Court highlights that accounting of profits is an equitable remedy, requiring the plaintiff to bear the burden of proving the revenues generated from infringing sales, whereas the defendant bears the burden of proving valid deductions. The Court cannot deduct any expenses that are not supported by sufficient evidence, and doubts must be resolved in favour of the plaintiff, given both that: (i) the defendant has infringed the plaintiff’s patent ; and (ii) the defendant has the burden to provide sufficient evidence of expenses, and is in the best position to do so among the parties.

GreenBlue had provided overhead expenses for 2017-2020 and asked the court to make “common sense” inferences as to the amount of expenses that were related to infringing Canadian sales, based on testimony from the company’s General Manager, who had estimated expense allocation. The Court took issue with this evidence, finding that the financial evidence provided combined expenses for both Canadian and American sales, with insufficient evidence to disentangle the Canadian expenses from the American expenses.

Additionally, the financial information for 2019 and 2020 provided no categorical breakdown of expenses, meaning that the amounts provided included expenses that could not be considered in the analysis, such as legal expenses and amortization. While GreenBlue tried to rely upon case law in which expenses from an infringer’s previous years of business were extrapolated to time periods lacking detailed information, the Court found these decisions to be of little assistance, as expert evidence had been provided in those cases to support the extrapolation in accordance with accounting principles and practices. Here, no such evidence was adduced.

Thus, while the Court stated it had no doubt some of the expenses claimed did relate to infringing sales, to allow deductions that include irrelevant expenses or deny the Plaintiffs an accounting of profits altogether would be unfair. It therefore awarded DeepRoot with an accounting of profits for the entire amount of profits identified, plus interest.

For those found to have infringed a patent (and their counsel), this decision provides an important takeaway: get to the root of the causal connection between your expenses and the infringing sales, or risk the Court being stumped in the analysis.