(previously ALLIED-SIGNAL INC.)
- and -
DU PONT CANADA INC.
and THE COMPLAX CORPORATION
REPORT OF REFEREE
Table of Contents
1. Lost Profits due to Lost Sales 11
|(a) Is the plaintiff entitled to claim lost profits for the film that the defendant sold outside Canada? 11|
|(b) But for the actions of the defendant, how much film would the plaintiff have sold? 13|
|(i) What portion of the defendant"s sales would the plaintiff have captured? 13|
|(ii) Should the volume that the plaintiff would have captured be adjusted for a difference in gauge? 34|
|(iii) Is the plaintiff entitled to claim lost profits for the film that was delivered to Eagle-Picher but never paid for? 36|
|(c) What costs would the plaintiff have incurred to produce the extra film? 37|
(i) Pottsville Plant Labour 38
(ii) Pottsville Plant Electricity 41
(iii) Additional Pottsville Plant Costs 46
(iv) Additional Costs " Other Plants 50
(v) Capacity to Produce Additional ER film 51
(vi) Selling Expenses 61
(vii) Sales Returns 63
(viii) Inventory Write-Offs 64
2. Reasonable Royalty 66
(a) What is a reasonable royalty rate? 66
3. Lost Profits due to Price Suppression 73
|(a) But for the actions of the defendant, would the plaintiff have been able to increase its prices? 73|
4. Interest and Currency Conversion 83
(a) What is the appropriate prejudgment interest rate? 83
(b) Should the interest be compound or simple interest? 85
(c) For what period should prejudgment interest be calculated? 87
(d) What is the appropriate currency conversion date? 88
(e) Post-judgment interest 90
Appendix " Confidential Data 93
 This reference relates to the quantum of damages suffered by the plaintiff as a result of the defendant, Du Pont Canada Inc., infringing the plaintiff"s patent for a product used in the manufacture of plastic compounds. By a decision dated May 11, 1995, the Federal Court of Appeal decided the issue of infringement in the plaintiff"s favour.
 On August 3, 1990, Lefebvre, Prothonotary, ordered that any questions as to the extent of infringement as well as facts relating to damages or profits arising out of the infringement, as necessary, be determined after trial on the merits as the subject of a reference under Rule 500 et seq. The plaintiff elected the remedy of damages, and by Order dated November 28, 1995, Denault J. ordered that this reference proceed to determine the extent of infringement, the damages arising from the said infringement, and the pre- and post-judgment interest payable.
 In its decision, the Federal Court of Appeal held that the defendant, Du Pont Canada Inc., had infringed the plaintiff"s Canadian Patent No. 1,162,012, entitled "Polyamide Release Film for Sheet Molding Compound," by the manufacture and sale of its DARTEK" S-701 and DARTEK" S-701 NY film.
 The Federal Court of Appeal did not find infringement with respect to thick moulding compound, which is produced by the second defendant, the Complax Corporation. Accordingly,and pursuant to the Order of Denault J., dated November 28, 1995, these proceedings no longer concern the Complax Corporation. Du Pont Canada Inc. remains the only defendant relevant to this reference.
 The period of infringement extends from January 1989 when DARTEK" entered the market until May 1993 when the Federal Court of Appeal rendered its decision and granted an injunction preventing further production and sale of DARTEK". The Federal Court of Appeal decided that because DARTEK" was produced in Canada, infringement occurred regardless of where the product was actually used. The record herein establishes that although the infringing product was sold and used worldwide, it was sold primarily to companies in the United States.
 The plaintiff claims damages under three general categories:
US$ 5.7 million1
US$ 5.8 million
US$ 9.8 million
US$ 21.3 million
 The defendant denies the claims under categories (i) and (ii), supra, and submits that the plaintiff can only claim a reasonable royalty of 5.8% on sales outside Canada. The defendant concedes that prejudgment interest will be payable on the royalty, but at a rate of 9.2% instead of 14%.
 The product invented by the plaintiff is a thin film used in the manufacture of sheet moulding compound (SMC), which is moulded into parts for the automotive and aerospace industries. The film, which is often referred to as a "carrier web" or "release" film, sandwiches the semi-liquid SMC during the manufacturing process, thereby allowing it to be handled. The film also prevents styrene, a colourless liquid hydrocarbon that is an essential component of SMC, from escaping during manufacture and storage. Styrene loss results in a defective SMC and is an environmental hazard as well.
Manufacture of the Product
 The plaintiff is a large manufacturing corporation that is divided into three sectors: aerospace, automotive, and engineered materials. The engineered materials sector is responsible for the production of a variety of materials, including ER film as well as other specialty films.
 The ER film is produced from a variety of raw and manufactured materials through a group of the plaintiff"s factories. The company purchases approximately one billion pounds per year of a petroleum derivative called cumene for processing at its Frankford plant in Pennsylvania. There, the cumene is converted into approximately 750 million pounds per year of phenol, as well as other derivative products. The phenol is barged to the plaintiff"s plant in Hopewell, Virginia, where it is converted into caprolactam. Hopewell produces approximately 650 million pounds of caprolactam annually. The caprolactam is then either shipped to the plaintiff"s plant in Columbia, South Carolina, or to its Chesterfield, Virginia plant across the river from Hopewell. At the Columbia and Chesterfield plants, the caprolactam is converted into nylon. The Columbia plant generally produces medium-viscosity nylon, while the Chesterfield plant produces high-viscosity nylon. Together, they produce approximately 650 million pounds of nylon per year.
 Nylon destined for film production is shipped in the form of pellets to the plaintiff"s plant in Pottsville, Pennsylvania. The Pottsville plant has eight production lines (numbered 1 through 8) which make the ER and other types of film, although line 5 was shut down in 1993. The Pottsville plant produces from 3 to 4 million pounds of ER film per year, which accounts for approximately 10% of the plant"s total film production.
 There are two types of production lines at the Pottsville plant. Production lines 1 through 7 are called "flat cast lines." Line 8 is called a "blown film line." To make the ER film on either type of production line, nylon is mixed with a polyolefin (e.g., polyethylene, polypropylene or ethylene vinyl acetate) to make a molten resin. The ratio is approximately 90% nylon to 10% polyolefin. For the flat cast lines, the molten resin is then pushed through a very thin horizontal slot and cooled back into a film, approximately 1 mil (one-thousandth of an inch) thick. For the blown film line, the resin is pushed through a circular slot to make a tube, into which air is blown "much as a child would blow a soap bubble."1 The tube is then collapsed and wound up as a film.
 Normally, resin made from high-viscosity nylon is necessary with the blown film line because if the consistency is not thick enough, the "bubble" will burst. However, the plaintiff only began making ER film on line 8 in early 1993, and later that year the company invented a method to use medium-viscosity nylon on the blown film line. Thereafter it produced a portion of its blown film with medium-viscosity nylon.
 The film is cut to the required size either "in-line" (i.e., on the production line itself), which appears to be practical only on line 8, or in the slitting department after it comes off the production line (the extrusion department). Once cut, it is essentially ready to be shipped out to customers.
Market for the Product
 The trade name of the plaintiff"s film was originally CAPRAN" ER-20 and is now CAPRAN" ER-15. The trade name of the defendant"s film is DARTEK" S-701.
 From 1989 to 1995, there were essentially four films available for manufacturers with which to make SMC: the plaintiff"s ER film, the defendant"s DARTEK" film, coextruded film, and polyethylene. Their relative market share in North America during this period was as follows:
Table 1: Summary of North American market share for SMC carrier films.1
 During the eleven days required to hear this Reference, counsel for the parties made extensive submissions as to the proper approach for determination of the measure of damages in the circumstances of this case. Before turning to a detailed analysis, I think it instructive to set out the general principles governing the calculation of damages in a patent infringement claim.
 Subsection 55(1)(a) is the relevant provision of the Patent Act.1 It states:
55. (1) Any person who infringes a patent is
|(a) liable to the patentee and to all persons claiming under the patentee for all damages sustained by the patentee or by any such person, after the grant of the patent, by reason of the infringement;|
 In addition, the common law has developed a number of principles in relation to the measure of damages. Firstly, due regard must be given to the statement of Lord Wilberforce in General Tire & Rubber Co. v. Firestone Tyre & Rubber Co.1:
|The general rule at any rate in relation to "economic" torts is that the measure of damages is to be, so far as possible, that sum of money which will put the injured party in the same position as he would have been in if he had not sustained the wrong (Livingstone v. Rawyards Coal Co., 5 A.C. 25, per Lord Blackburn at 39.)|
|In the case of infringement of a patent, an alternative remedy at the option of the plaintiff exists by way of an account of profits made by the infringer". The respondents did not elect to claim an account of profits: their claim was only for damages. There are two essential principles in valuing that claim: first, that the plaintiffs have the burden of proving their loss; second, that the defendants being wrongdoers, damages should be liberally assessed but that the object is to compensate the plaintiffs and not punish the defendants (Pneumatic Tyre Co. Ltd. v. Puncture Proof Pneumatic Tyre Co. (1899), 16 R.P.C. 209 at 215.)|
 In the words of Lord Buckley in Meters Ltd. v. Metropolitan Gas Meters Ltd.,1 the valuation of the claim is "one that is not capable of being mathematically ascertained by any exact figure." However, it is ultimately necessary to arrive at an exact figure that fairly represents the compensation due to the plaintiff. Accordingly, courts have developed a number of "practical working rules which have seemed helpful to judges in arriving at a true estimate of the compensation which ought to be awarded against an infringer to a patentee."1
 Where the patentee does not normally license use of its invention, it is entitled to the profits on the sales it would have made but for the presence of the infringing product in the market. For those sales made by the infringer that the patentee would not have made, the patentee is entitled to a reasonable royalty: Colonial Fastener Co. v. Lightning Fastener Co.,1 Watson, Laidlaw & Co. v. Pott, Cassels & Williamson.1
 It should be noted that where the patentee has licensed its invention in the past, it is "almost a rule of law" to assess damages in terms of a reasonable royalty; i.e., according to what the infringer would have paid if it had entered into a legitimate licensing agreement with the patentee: Meters Ltd. v. Metropolitan Gas Meters Ltd.;1 Catnic Components Ltd. v. Hill & Smith Ltd.1 This does not apply to the case at bar because the plaintiff has consistently manufactured and sold its own film, and there is no evidence of a license ever being issued for their patented technology.
 In addition to lost profits due to lost sales, the patentee may also claim lost profits due to price suppression if it can establish that it necessarily reduced its prices because of the competition of the infringer: Colonial Fastener Co. v. Lighting Fastener Co.,1 American Braided Wire Co. v. Thomson.1
 Based on the guidelines set out supra, it is appropriate to divide the issues into the following four categories:
|1. Lost Profits due to Lost Sales: What sales actually made by the defendant would the plaintiff have made but for the presence of the defendant"s infringing product in the market, such that it is allowed to claim lost profits on those sales?|
|2. Reasonable Royalty: What sales actually made by the defendant would the plaintiff not have made, such that it is only entitled to a reasonable royalty on those sales?|
|3. Lost Profits due to Price Suppression: Did the presence of the defendant"s infringing product in the market either force the plaintiff to reduce its prices or prevent the plaintiff from raising its prices?|
|4. Interest and Currency Conversion: Under this heading, I will consider the issues of pre- and post-judgment interest as well as the appropriate date of currency conversion.|
1. Lost Profits due to Lost Sales
|(a) Is the plaintiff entitled to claim lost profits for the film that the defendant sold outside Canada?|
 The Patent Act1 confers exclusive rights on the patentee to make, construct, use and vend the patented invention within Canada. It also confers on the patentee the right to be compensated for any infringement of these rights.
 The defendant submitted that the plaintiff is only allowed to claim profits lost on sales made within Canada because of the territorial limitations set out in the Patent Act. For those sales made outside Canada, the plaintiff is only entitled to a reasonable royalty.
 For this proposition, the defendant relies on various decisions that examine the territorial limitations of the Patent Act, including Domco Industries Ltd. v. Mannington Mills Inc. et al.;1 Beloit Canada Ltée/Ltd. v. Valmet Dominion Inc.1; and Colonial Fastener Company Ltd. v. Lightning Fastener Company Ltd.1
 These cases deal with the territorial limitation of the Patent Act in the context of determining infringement, not in respect of the calculation of damages. They support the proposition that there is no infringement of a patent if there is no making, constructing, using, or vending of the patented product within Canada.1 These decisions do not strengthen the defendant"s proposition, and the defendant could cite no decision relevant to the calculation of damages.
 The plaintiff is entitled to due compensation for all damages flowing from infringement of its patent, limited to infringement that occurs within Canada. Here, the infringement consists of the manufacture of DARTEK" film for the purpose of making SMC, whether it is sold in Canada or the United States. In her reasons for judgment at trial, Reed J. stated, "In the circumstances, I have trouble understanding how the sale of the film to SMC producers in the United States could be for any other purpose than to cause or induce a breach of the patent."1
 This is also the view taken in the United States, where the question has been addressed directly. In Schneider (Europe) A.G. v. SciMed Life Systems Inc.,1 the Federal Circuit Court of Appeal stated, "We are aware of no rule that the plaintiff cannot recover lost profits for foreign sales of infringing products manufactured in the United States."
 Therefore, if the plaintiff can prove that it would have made those sales in the United States, then the profits lost on those sales flow directly from the manufacture, and the consequent infringement of the patent, within Canada.
 Furthermore, it is important to keep in mind that the use of lost profits to measure due compensation comes from neither legislation nor a rule of law. Rather, courts have used the calculation of lost profits as one of the "practical working rules" to help determine the appropriate compensation.1 The question is whether the plaintiff would have made the sales actually made by the defendant, but for the presence of the defendant"s infringing product in the market.
 In conclusion, the right to claim lost profits is not circumscribed by the territorial limitations of the Patent Act to profits made on sales within Canada. The patentee has a right to be compensated for all damages flowing from the infringement of the patent within Canada, which may include profits lost on sales outside Canada. Furthermore, lost profits are merely a useful measure to help determine an appropriate and fair level of compensation. In the case at bar, the plaintiff is entitled to lost profits on those sales, whether in Canada or the United States, that it proves it would have made but for the presence of the defendant"s DARTEK" film in the market.
|(b) But for the actions of the defendant, how much film would the plaintiff have sold?|
|(i) What portion of the defendant"s sales would the plaintiff have captured?|
 The process of examining the hypothetical situation where one assumes that the infringing product never entered the market is an uncertain one. Nonetheless, there are several factors that serve to answer the question, "What would have happened?" The following factors have been considered in various cases:
(a) Presence of competing products in the market;
(b) Advantages of the patented product over competing products;1
(c) Advantages of the infringing product over the patented product;1
(d) Market position of the patentee;1
(e) Market position of the infringer;1
|(f) Market share of the patentee before and after the infringing product entered the market1;|
|(g) Size of the market before and after the infringing product entered the market;1 and,|
|(h) Capacity of the patentee to produce additional products1;|
 It is interesting to note that U.S. courts have taken many of the same factors and turned them into a legal test. According to the test established by the Sixth Circuit Court of Appeals in Panduit Corp. v. Stahlin Brothers Fibre Works, Inc.1 a patentee must establish (i) the existence of demand for the patented product; (ii) the absence of acceptable non-infringing substitutes; (iii) the patentee"s manufacturing and marketing capacity to meet the demand; and, (iv) the amount of profit lost per lost sale. More recently, the Federal Circuit Court of Appeals in State Industries v. Mor-Flo1 upheld a "market-share approach" that altered the second factor of the Panduit test. Essentially, this approach allows the plaintiff to claim that, notwithstanding the presence of acceptable, non-infringing substitutes in the market, it would have captured a proportion of the infringer"s sales equivalent to its market share.
 While these approaches may be interesting, it is clear that there is no equivalent "legal test" in Canada.1 However, at least two key witnesses in this case presented opinions that were clearly based on U.S. jurisprudence. For example, Mr. Rostant, the defendant"s expert accountant, relied heavily on the U.S. market-share approach. He claimed that the plaintiff would only have captured a proportion of the defendant"s sales equivalent to its market share over the entire carrier web market. However, during cross-examination, his market-share theory was successfully impeached. It became obvious from the cross-examination that, in the circumstances of the case at bar, it is necessary to look at the question on a customer-by-customer basis, instead of on a wider, "market" basis under the market-share theory.1
 It should be noted that courts usually avoid "requiring the plaintiffs to establish " that any definite number of retailers would have come to the plaintiffs if the defendants had not supplied infringing instruments."1 However, in the case at bar, there are only nine customers in question, and as a factual matter it is clear that a review of the evidence on a customer-by-customer basis is necessary. Nonetheless, this evidence can be clarified by an examination of the various market factors listed supra, and I therefore propose to canvass the general market factors before turning to the individual customers. However, due to my conclusions, infra, concerning Menzolit, the only relevant European customer, I will restrict the discussion of general market factors to North America.
a) Presence of competing products in the market
 During the period of infringement, there were four products in the North American SMC carrier film market: the plaintiff"s ER film, the defendant"s DARTEK" film, polyethylene film, and coextruded film.
 The approximate prices for these types of film over the period of infringement are as follows.
Type of Film
ER film (Plaintiff)1$2.05 - $2.25 per lb.
DARTEK" film (Defendant)1$2.35 - $2.45 per lb ($2.15 - $2.35 after gauge adjustment.)
Polyethylene film1$0.80 - $0.90 per lb.
Coextruded film1$1.40 - $1.45 per lb. ($1.75 - $1.80 after gauge adjustment.)
Table 2: Approximate market prices of SMC carrier web films. The gauge adjustment refers to an adjustment in the price of the film to account for a difference in its thickness.
 In the plaintiff"s submission, the only two relevant products are the plaintiff"s ER film and the defendant"s DARTEK" film. However, SMC can be made using any of the four films listed supra. Accordingly, all four films must be considered, although the latter two films may not be as significant competitors as the DARTEK" film.
b) Advantages of the patented product over competing products
 It is clear from the evidence that polyethylene is significantly inferior to the patented film as a carrier web film. For example, Mr. Thompson, Materials Engineering Supervisor for Molded Fibreglass Ltd., testified as follows:
|Q. And you mentioned polyethylene film, you were aware of polyethylene film as a carrier film for an SMC application.|
|A. That's correct. We were aware of polyethylene, but we were not willing to go that route. It was, in my opinion, a step backwards to the operation.|
|Q. Could you explain to the Court why you considered it a step backwards?|
|A. The polyethylene film is a very poor styrene barrier. Styrene is very critical to the processing of SMC, not only as a cross-linking agent, but also in keeping the material, for lack of a better term, wet.|
|Polyethylene that allows the styrene to evaporate causes the material to dry out, which in turn causes a lot of moulding problems, such as porosity, pits in the moulding operation. In some cases even what is called non-fills, which is a defective part and, therefore, scrap.|
|A second reason was also due to OSHA regulations and employee exposure to styrene. That was always an issue.|
|Q. You mentioned OSHA. Would you explain what that means?|
|A. OSHA is the Occupational Safety and Health Administration that regulates worker exposure to chemicals in the workplace. It's an American worker safety regulatory agency.1|
 Desjardins J.A."s summary of the disadvantages of polyethylene also accords with the evidence before me:
|Prior to the invention, it was found that during the manufacturing of the sandwich structure, and subsequent storage of the SMC roll, loss of styrene occurred through the polyethylene film, which was relatively permeable. This resulted in poor product flow and unacceptable molded parts, as well as creating an odour and health hazard in the SMC manufacturing line and storage area. In addition, polyethylene film, even though it had good peelability for SMC, had a low tear strength which resulted in tearing and stretching of the film during the SMC manufacturing process which resulted in process interruption and down time. This, in turn, increased the cost of the process.1|
 Regarding the coextruded film, the evidence suggests that this type of film was not a significant competitor until late 1994. Before that time it appears that only one company in North America, American National Can, was producing coextruded film for SMC purposes, and its output was limited to two clients: Budd Co. and Navistar. Budd Co. started using the coextruded film in early 1991.1 However, it was apparently not widely available and, for one reason or another, did not seem to perform satisfactorily on some production lines. It was not until after 1994, when Deerfield began producing significant quantities of the coextruded film that it became a significant competitor.1 Even the plaintiff now produces this type of film.
 These facts are significant, particularly because most of the defendant"s customers were originally the plaintiff"s customers, and they returned to the plaintiff either before or at the time of the injunction in 1995. The following facts are revealing of the behaviour of these customers:
|(i) During the infringing period, many customers switched from the plaintiff to the defendant and back again, thereby demonstrating a preference for the patented type of film over polyethylene and coextruded film. In addition, the plaintiff"s film had nearly replaced polyethylene entirely in the U.K. market and had captured an enormous share of the North American market, once dominated by polyethylene.1|
|(ii) Such customers demonstrated a preference for the patented film notwithstanding the fact that coextruded film and polyethylene in particular were much less expensive alternatives.1|
|(iii) This preference, as well as the trend of the market away from polyethylene towards the patented film, is reasonable considering the disadvantages associated with polyethylene and coextruded film, discussed supra.|
|(iv) Finally, although some SMC manufacturers never switched from polyethylene (apparently due mainly to its low price), there is no evidence that any customer, once having switched to the patented film, ever switched back to polyethylene.|
 Taken together, these facts are such a telling indication of the behaviour of these customers that they lead to an inference that such customers would have remained with the plaintiff but for the presence of the defendant. I found the opinion of Professor Jerry Hausman, the plaintiff"s expert economist, persuasive on this issue.
 It should be noted that counsel for the defendant objected to the admissibility of ""19-25 of Professor Hausman"s affidavit on the basis that he "understood and assumed" the facts as stated in those paragraphs to be true, and that he relied on them for the basis of his opinion.1 In my opinion, Professor Hausman properly laid out the facts that he was assuming to be true, and based his opinion on those facts. His affidavit was not intended to prove the truth of the facts contained in ""19-25, and I did not read it that way.
 In his affidavit, Professor Hausman stated:
|The actual behaviour of customers strongly supports my opinion. As discussed above, virtually all of Du Pont"s sales were made to customers who previously had been buying from AlliedSignal. In addition, virtually all of these customers returned to AlliedSignal either prior to or following the Judgment of the Federal Court of Appeal. If Du Pont had not been selling its infringing product, these customers would have continued buying from AlliedSignal without interruption, in my opinion.1|
 The inference that customers would have remained with the plaintiff but for the presence of the defendant does not vitiate the overall onus on the plaintiff to prove its case on the balance of probabilities. Rather, it is a factual inference I find from the evidence adduced by the plaintiff that, in the absence of evidence to the contrary, tips the balance of probabilities in favour of the plaintiff. The validity of such an inference depends nonetheless on an analysis of the facts on a customer-by-customer basis, particularly because there is some evidence to the contrary with respect to some customers.
|c) Advantages of the infringing product over the patented product|
 Professor Hausman testified that although the ER film may not be technically interchangeable for the DARTEK" film, it is "commercially interchangeable."1
 However, the evidence suggests that, at least from 1989 to 1991, the DARTEK" film was superior to the plaintiff"s ER film. For example, Mr. Beck, a senior employee of GenCorp, testified to various quality problems that GenCorp had with the plaintiff"s film, but they found the DARTEK" film satisfactory when GenCorp switched to it in 1989.1 Mr. Maxel, an industry consultant called on behalf of the defendant, also testified that the DARTEK" film was superior to the plaintiff"s film, at least in 1988 when he tested it.1
 After 1991, though, when both Premix and Eagle Picher returned to the plaintiff"s film exclusively, the evidence suggests that the plaintiff"s blown line film was superior to the DARTEK" film. In fact, this was the very reason given by Eagle Picher for returning to the plaintiff exclusively.1
|d) Market position of the patentee|
 Even though its product was so much more expensive than polyethylene, the plaintiff captured approximately 80% of the North American market and nearly 100% of the U.K. market. It is clear that the plaintiff was the market leader in the SMC carrier film market.
|e) Market position of the infringer|
 The defendant originally tried to make a non-infringing film, but it did not work properly. It then made its infringing film and entered the carrier film market in 1989. It is my understanding that the defendant was not in the SMC carrier film market before this, but when it entered the market, it did so with all the advantages afforded by its reputation. In the words of Professor Hausman, "Du Pont is one of the great American companies. It is well known, it is well respected and, in my experience, when Du Pont comes out with a product, the market takes it very, very seriously."1
|f) Market share of the patentee before and after the infringing product entered the market|
 With the exception of Kohler in Canada and Menzolit in France, every manufacturer who purchased from the defendant was originally the plaintiff"s customer. The evidence demonstrates that the defendant"s entry into the market affected the plaintiff"s market share directly. The effect is reflected in Table 1, supra, which details the market share of the four carrier web films in the marketplace. When the defendant entered the market in strength in 1989, for example, the plaintiff"s market share fell by 19% while the defendant"s market share rose by 14%.
 Furthermore, with the exception of Kohler, Menzolit and possibly Sterling Plumbing, every manufacturer who purchased from the defendant returned to the plaintiff either before or at the time of the injunction.1 There can be no doubt that the defendant"s entry into the market had a serious and very direct effect on the plaintiff.
 As mentioned above, coextruded film also affected the plaintiff"s market share from 1995 onwards.
|g) Size of the market before and after the infringing product entered the market|
 It is clear from a comparison of the plaintiff"s and the defendant"s sales records that the size of the SMC carrier web film market did not change significantly before or after the defendant entered the market.1 As noted supra, nearly every customer of the defendant was originally a customer of the plaintiff.
|h) Capacity of the patentee to produce additional products|
 The defendant raised this issue in the context of manufacturing costs, and I have dealt with it in that context.1 My conclusion is that the plaintiff had the capacity to produce the additional film and materials required.
 I turn now to an analysis of the facts on a customer-by-customer basis.
 None of the plaintiff"s witnesses had any knowledge about Kohler, and there is no documentary evidence that the plaintiff ever sold or attempted to sell film to this Ontario company. For this company, at least, it is clear that the plaintiff would not have made the sales that the defendant made.
 Eagle Picher used the plaintiff"s film before the defendant entered the market, but was experiencing "telescoping" problems with the rolls of film, which means that the film did not remain properly rolled. They switched to the defendant for the years 1989, 1990 and 1991 for the majority of their purchases, but also continued to buy from the plaintiff: 58% of required film in 1989, 11% in 1990 and 27% in 1991. In late 1991, with the development of the plaintiff"s superior HR film, they switched back to the plaintiff exclusively.1 It should be noted that this occurred four years before the issuance of the injunction.
 In addition, Eagle Picher had not used polyethylene film since approximately 1988.1 It is very unlikely that they would ever have switched back to polyethylene film. Furthermore, there is no evidence that coextruded film was a factor for Eagle Picher.
 This evidence is sufficient to establish that without the alternative of the defendant"s film, Eagle Picher would have stayed with the plaintiff while it worked out its quality problems.1
 Rockwell purchased approximately 6,000 pounds of DARTEK" film in 1989. This purchase corresponds to approximately 2% of the volume of film Rockwell purchased from the plaintiff in 1989. It is clear that Rockwell purchased the DARTEK" film as a trial.1 Furthermore, Rockwell never purchased any more DARTEK" film.
 Professor Hausman testified that "if Du Pont hadn"t been there, Rockwell bought before and afterwards from AlliedSignal and it is very likely, I think overwhelmingly likely they would have bought that $14,000 from AlliedSignal."1
 I accept Professor Hausman"s opinion with respect to Rockwell International. I also accept it as it relates more generally to film used for evaluation or trial purposes. Indeed, a customer would not increase its production of SMC simply to evaluate a new type of carrier film. Rather, it would use less of the carrier film it had been customarily using. In the case of Rockwell, it seems evident that Rockwell simply purchased 6,000 pounds less of the plaintiff"s film in order to evaluate the defendant"s film. If the defendant"s film had not been in the marketplace, Rockwell would have purchased an additional 6,000 pounds of the plaintiff"s film instead.
 Accordingly, it is my view that, in all likelihood, the plaintiff would have captured the defendant"s sale to Rockwell International.
 In 1989, Molded Fibreglass purchased approximately 4,800 pounds of the defendant"s DARTEK" film. There is no evidence to explain the reason for this purchase, but it is a very small amount compared to the amount Molded Fibreglass purchased from the plaintiff that year.
 In 1992, the Tray Company subdivision purchased approximately 900 pounds of DARTEK" film. Mr. Thompson, Materials Engineering Supervisor for Molded Fibreglass, testified that this 1992 purchase was to try the DARTEK" film because of a corporate edict to find a secondary source "for fear that something would happen to our current suppliers or their supply."1 Considering the very small quantity sold in 1989, the earlier sale was in all likelihood also a trial run.
 As stated supra, I accept Professor Hausman"s opinion as it relates to film purchased for evaluation purposes. Molded Fibreglass would not increase its production of SMC simply to evaluate the new type of carrier film. Rather, it would use less of the carrier film it was normally using, which was the plaintiff"s ER film. Therefore, if the defendant"s film had not been in the marketplace, Molded Fibreglass would have purchased the equivalent volume of film from the plaintiff.
 In conclusion, it is my view that the plaintiff would have captured the defendant"s two sales to Molded Fibreglass.
 Throughout the relevant period, Premix purchased film from the plaintiff. In addition, they purchased approximately 350 pounds of DARTEK" film in 1989, 10,000 pounds in 1990, and 114,000 in 1991. They did not purchase any DARTEK" film after 1991.
 However, throughout the same period Premix continued to use polyethylene film on at least one of their production lines.1 The evidence indicates that Premix used the patented film to manufacture SMC for its own moulded products, but used polyethylene to produce SMC for sale to others.1 Finally, the fact that polyethylene is approximately $1.30 per pound less expensive than the patented film is particularly significant.
 Although the point was not addressed by either of the parties, this evidence indicates that Premix did not use the patented film and polyethylene film interchangeably. The difference in price supports this conclusion. The totality of the evidence persuades me to draw the inference that Premix had set requirements for the patented type of film, and beyond those requirements, it purchased polyethylene.
 Accordingly, it is my view that Premix would have purchased the patented film from the plaintiff if the defendant"s film had not been in the market.
 In 1988 and 1989, Sterling purchased from the plaintiff. Thereafter, they switched almost exclusively to the defendant. After the injunction was issued in 1995, Sterling purchased small amounts of film from the plaintiff, but none of the witnesses could testify as to where Sterling purchased the majority of its film after the issuance of the injunction.
 The fact that Sterling Plumbing did not return to being an exclusive customer of the plaintiff does not necessarily imply that Sterling Plumbing would not have remained with the plaintiff during the infringing period.
 Indeed, the fact that Sterling Plumbing purchased the DARTEK" film over polyethylene or co-extruded film is a clear indication that this customer preferred the patented type of film, particularly considering its much higher cost over polyethylene. There is no evidence that Sterling Plumbing was actively searching for alternatives in the way that GenCorp was doing, nor is there any evidence that Sterling Plumbing would not have continued to deal with AlliedSignal.
 For the period from 1989 to 1994, then, I accept Professor Hausman"s opinion that Sterling Plumbing would have continued to buy from the plaintiff.1 However, thereafter, I am not persuaded that Professor Hausman"s opinion would continue to be valid. Due to the influence of co-extruded film on the marketplace after late 1994, it is not as clear that Sterling Plumbing would have continued to buy film from the plaintiff. Therefore, I cannot conclude that the plaintiff would have captured the defendant"s sales to Sterling Plumbing in 1995.
 Accordingly, the plaintiff is entitled to its lost profits on the defendant"s sales to Sterling Plumbing from 1989 to 1994, and is entitled to a royalty on the defendant"s sales to Sterling in 1995.
 Owens Corning purchased small amounts of carrier web film from both the plaintiff and the defendant during a portion of the relevant period, although they did not purchase from the defendant in 1991 or after 1992. They have what is called a "laboratory account," for which they purchase small quantities of film for specialized projects.
 I accept Professor Hausman"s opinion that Owens Corning would have continued to purchase from the plaintiff.1 The patented film is clearly superior to polyethylene and there is no evidence that the existence of coextruded film was a factor for Owens Corning. Furthermore, Owens Corning demonstrated a preference for the patented type of film by purchasing either it or the infringing film in spite of a significantly cheaper alternative.
 I observe that in 1988, the 1,060 pounds of film purchased from the defendant could be perceived as a trial run or an evaluation of its film. As stated, supra, with respect to Rockwell International and Molded Fibreglass, there is nothing to suggest that Owens Corning produced more SMC in order to evaluate the defendant"s film. Rather, they merely used less of the plaintiff"s film.
 On the balance of probabilities, I conclude that Owens Corning would have purchased from the plaintiff all the film that it actually purchased from the defendant between 1988 and 1995. Accordingly, the plaintiff is entitled to its lost profits on these sales.
 In 1988, GenCorp purchased over 300,000 pounds of film from the plaintiff. In 1989, it purchased about 50% of its film requirements (approximately 130,000 pounds) from the defendant and 50% from the plaintiff. Thereafter, until the injunction was issued in 1995, GenCorp purchased its film exclusively from the defendant, except for a small amount in 1990 and an insignificant amount in 1991. After the injunction was issued in 1995, GenCorp purchased exclusively from the plaintiff for the remainder of that year. In 1996, it purchased considerably less film from the plaintiff than it had been purchasing over the last few years (about one-third of its former requirements).
 GenCorp presents a difficult problem, because the defendant adduced evidence that GenCorp would not have purchased from the plaintiff under any circumstances.
 Mr. Byron Beck, a senior employee of GenCorp, testified that he continually encountered significant quality problems with the plaintiff"s film. In about 1986 or 1987, GenCorp "seriously started looking for solutions."1 They considered polyethylene, film from a small company called Keystone, an early (non-infringing) version of the defendant"s DARTEK" film, and a coextruded film made by Dow Chemical Company.
 For various reasons, none of these alternatives were satisfactory. However, when the defendant"s infringing DARTEK" film entered the market in 1989, it was "very good" and GenCorp moved to that film, even though it was more expensive than the plaintiff"s film.1 The price difference, however, was "wiped out" when the defendant changed the gauge of its film from 1.0 mil to 0.9 mil.1
 Mr. Beck also testified that from about 1990 to 1992, he continued to work with the plaintiff"s representative to try to resolve the problems GenCorp was having with the plaintiff"s product. Various proposals were made, but none of these proposals were effective. He said that at some point, probably in 1992, the plaintiff"s representative left AlliedSignal. In essence, this ended his contact with the plaintiff.1
 Mr. Beck further testified that when the injunction was issued in 1995, GenCorp was forced to react quickly.
|Q. And what did GenCorp do as a result [of the injunction]?|
|A. Well, we immediately started considering alternatives. One alternative was a company that supplies film from Italy. The company name is Air Tech. Their salesperson"s name was Malacci, as I recall, but that would have required " since we go through a scale-up program to get samples from Italy and scale-up one of these. It just wasn"t practical from a timing point of view.|
|Q. And what timing considerations are you referring to?|
|A. Well, of course, when Du Pont Canada was required to not only stop manufacturing, but stop shipping inventory that they had, we didn"t have that much inventory in house, so we had to respond very quickly. Our scale-up programs went on for months, so we didn"t have the time available to exercise many alternatives.|
|Q. Why is it that you sought out a supplier rather than Allied in 1995?|
|A. We had gone through so many years of difficulties with Allied that the trust level among myself, as well as our quality and technical and manufacturing people in the SMC operation was very low. So, we were not confident that we would be able to avoid the same kind of problems we had before.|
|Q. What film did GenCorp eventually decide on when it learned of the injunction against Du Pont?|
|A. Well, despite our concerns, the quickest alternative was to go back to Allied. As I said, to try to import from Italy would have been a long, drawn-out process, so we took the most expeditious route, which was to contact Allied and start getting a small quantity of material.1|
 Under cross-examination, Mr. Beck admitted that, had the defendant not entered the market in 1989, GenCorp would have been forced, at least for a while, to continue using the plaintiff"s film.
|Q. Is it fair to say, sir, that in 1989 but for Du Pont coming into the market, you would again have faced the same situation with polyethylene, unacceptable, and the AlliedSignal film that you were not totally satisfied with, but you were using, but you would continue to use the AlliedSignal film because Du Pont would not have been available as an alternative?|
|A. Well, until such time as I could have found another source with a product that we could ethically and legally use the search would have continued.|
|Q. Sure. But you would have continued with the AlliedSignal film in the meantime?|
|A. Yes, we would have had no choice.1|
 The plaintiff also presented some evidence to support this admission. Mr. Petty, one of the plaintiff"s senior officials, testified that in 1992 he did a film trial for GenCorp. In that trial, the plaintiff"s film was found to be acceptable.1 In addition, an AlliedSignal report in 1992 stated that "GenCorp is apparently experiencing some problems with DARTEK film. We believe they have had problems with brittleness as they are peeling film from the compound."1
 Furthermore, there are two explanations for the fact that GenCorp purchased considerably less film from the plaintiff in 1996: (i) GenCorp merged with Cambridge Industries, which purchased a significant amount of the plaintiff"s film (over 400,000 pounds in 1995, and over 500,000 pounds in 1996); (ii) GenCorp produced significantly less SMC in 1996. Mr. James Butler, a senior GenCorp employee at the time, testified that "[o]ur major downturn in SMC business was when the U-van went back to steel in "96."1
 Overall, this evidence suggests that, until GenCorp found a suitable alternative, the plaintiff would have captured some of the defendant"s sales to GenCorp. The only evidence of a reasonable alternative appearing before 1995, when Deering began producing coextruded film in significant quantities, was the coextruded film to which Budd Co. switched in 1991. However, it is clear that GenCorp"s search for an alternative was intensive, reaching beyond the North American market to European suppliers.
 We are left in a situation of utter speculation as to how soon GenCorp would have moved away from the plaintiff"s film. In my opinion, the only fair approach in these circumstances is to award the plaintiff a reasonable royalty on all of the defendant"s sales to that company. In the words of Lord Justice Fletcher Moulton in the Meters v. Metropolitan Gas Meters case, referring to the award of a reasonable royalty, "I think that in many cases that would be the safest and best way to arrive at a sound conclusion as to the proper figures."1
 Accordingly, I would award the plaintiff a reasonable royalty on the defendant"s sales to GenCorp.
 Menzolit, a French company, was the defendant"s only customer in Europe. The plaintiff sold some film to this company from 1992 to 1995 through distributors, with one direct sale in 1993. The defendant sold 2,675.2 pounds of DARTEK" film to Menzolit in 1995 at a price of $2.57 per pound. Mr. LeBlanc, a witness for the defendant, testified that this was a trial quantity, which he defined as "a small shipment that"s sent to a customer for trial on their machines to indicate whether or not the film can run."1
 As noted supra, I accept the proposition that with respect to film purchased for evaluation, the customer would have continued purchasing from its normal supplier, if the defendant"s film had not been in the market. Regarding Menzolit, there is not sufficient evidence to establish that the plaintiff was Menzolit"s normal supplier. In fact, the evidence suggests that Menzolit purchased most of their SMC carrier film from Eurozac, a European company. For example, an AlliedSignal memorandum dated April 28, 1992 states, "Thus far, we believe they [Menzolit] are satisfied with Eurozac"s product."1
 Accordingly, the plaintiff is only entitled to a reasonable royalty on the defendant"s sale to Menzolit.
 Table 3 (see Appendix) summarizes the conclusions I have reached regarding the volume of the defendant"s sales that the plaintiff would have captured but for the presence of the defendant. Table 4 (see Appendix) summarizes the volume of the defendant"s sales that the plaintiff would not have captured.
|(ii) Should the volume that the plaintiff would have captured be adjusted for a difference in gauge?|
 The film that the plaintiff produces is 1 mil (one-thousandth of an inch) in thickness. From 1989 to 1990, the defendant"s film was also 1 mil in thickness, but beginning in 1991, it began selling 0.9 mil film to some companies, such as Sterling and GenCorp. This change affected sales, because although both the plaintiff and defendant sold their film by the pound, the amount of film required by a customer is determined strictly by surface area.1
 When the defendant switched its film from 1.0 mil to 0.9 mil, companies did not require any more or less surface area of the film, but they needed fewer pounds of the film to achieve the same SMC output.1 The assumption inherent in Mr. Dovey"s report is that if they had been purchasing from the plaintiff, they also would have used the same surface area, but would have had to purchase more pounds of the film than they needed from the defendant.1
 Furthermore, it was clearly the practice in the industry to consider prices in terms of gauge differences. For example, Mr. Beck testified that GenCorp moved to the defendant"s film in 1989 even though it was considerably more expensive, but the price difference was "wiped out" when the defendant changed the gauge of its film in 1991.1 In addition, an AlliedSignal memorandum contains the following statement comparing prices of coextruded film to ER film:
|We believe the price of this product is $1.40-1.45/lb. This equates to $1.75-1.80/lb. after adjusting for differences in square feet per pound. Our price for ER-15 is $2.25/lb.1|
 Mr. Rostant did not contradict these facts, but in his opinion no gauge adjustment should be made because the plaintiff would have had to either reduce its prices or reduce the gauge of its own film.1 During cross-examination, however, he admitted that if the defendant had not been in the market, then the plaintiff would not necessarily have had to reduce either the price or the gauge of its film.1 Even without this admission, I am unable to agree with Mr. Rostant"s initial proposition. The fact that the defendant reduced the gauge of its film to effectively lower its prices does not imply that the plaintiff would have had to lower its prices or reduce its gauge. The plaintiff did not lower its prices or reduce its gauge while the defendant was present in the marketplace, and there is nothing to suggest that it would have had to do so absent the defendant in the marketplace.
 To conclude on this issue, the volume of 0.9 mil film sold by the defendant that the plaintiff would have captured should be adjusted for a difference in gauge. A comparison of Exhibit D-16, which lists sales of 0.9 mil film, to Table 3 (see Appendix), which lists the volumes that the plaintiff would have captured, shows that the volumes of 0.9 film that the plaintiff would have captured are only those sales to Sterling Plumbing from 1991 to 1994. The gauge adjustment for these sales is summarized in Table 5 (see Appendix).
|(iii) Is the plaintiff entitled to claim lost profits for the film that was delivered to Eagle-Picher but never paid for?|
 The record herein establishes that in 1991 Eagle Picher sought protection from its creditors under United States bankruptcy law, and as a result the defendant was not initially paid for the equivalent of 24,188 pounds of film that it shipped to Eagle Picher. The defendant eventually recovered $10,377, representing 4,416 pounds of film, and currently holds an unsecured note from Eagle Picher for the same amount, maturing on November 29, 1999.
 The defendant asserts that the plaintiff should not be able to claim any lost profit on the 19,772 pounds of film (the initial 24,188 pounds less the first payment for 4,416 pounds) for which it has not been paid.1
 Mr. Dovey, the plaintiff"s expert, testified that "[i]t doesn't necessarily flow that if Du Pont had a bad debt from a particular customer, that the plaintiff would have similarly had that bad debt, even had the shipments and sales been made."1 Furthermore, Mr. Petty testified that he was not aware of any difficulties the plaintiff had ever had with payments from Eagle Picher, and the plaintiff continued to supply Eagle Picher throughout their bankruptcy and reorganization.1
 I agree with Mr. Dovey that the plaintiff would not necessarily have had the same bad debt. However, bad debts are a characteristic of the marketplace, even one that is not particularly high-risk, and the defendant is not an insurer of the plaintiff"s profits. Conceptually, the question is whether the plaintiff"s profits are attached to the sale or to the seller. If the former, the only evidence is that Eagle Picher did not pay for the film. If the latter, the only evidence is that Eagle Picher managed to pay all its debts to the plaintiff.
 In the circumstances, the evidence that Eagle Picher did not pay for that amount of film is more persuasive than Mr. Petty"s testimony that he was not aware of any problems with Eagle Picher"s accounts at AlliedSignal. Whether Eagle Picher usually paid the plaintiff or not, it clearly did not pay for some of the sales the plaintiff would have captured but for the presence of the defendant, and thus the defendant should not be held liable for that portion of the sales. To hold otherwise would amount to the defendant underwriting the plaintiff"s profits.
 The question remains regarding the unsecured note for $10,377 that the defendant still holds. Eagle Picher appears to have successfully reorganized and continues to buy significant quantities of film from the plaintiff. In raising this issue, the defendant has the evidentiary burden of presenting some evidence to suggest that it will not be paid for the additional 4,416 pounds represented by the unsecured note, which it has failed to do. In the absence of any such evidence, I cannot conclude that the plaintiff should bear the cost of the unsecured note.
 Accordingly, the sales to Eagle Picher that the plaintiff would have captured in 1991 should be reduced by 15,356 pounds (which is equivalent to 19,772 pounds less the 4,416 pounds represented by the unsecured note). This reduction is made in Table 12 (see Appendix).
(c) What costs would the plaintiff have incurred to produce the extra film?
 Both parties agree that the appropriate method of determining the plaintiff"s lost profits is the differential cost accounting method. In the words of Mr. Dovey, the plaintiff"s expert accountant,
|That differential approach requires that from the lost sales revenue one deducts all the costs that would have been incurred " all the variable costs that would have incurred to produce those sales, plus any changes in fixed cost that would have resulted from the production of those additional volumes. It's essentially, in accounting terms, the sales revenue less all the variable costs.1|
 Mr. Rostant, the defendant"s expert accountant, succinctly defined variable costs and fixed costs as follows:
|The variable costs are costs which change with each unit of production. If a cost remains steady no matter how much is produced, that will be considered a fixed cost.1|
 Mr. Rostant said that both he and Mr. Dovey agree that the "Cost Centre Reports" from the plaintiff"s various factories provide a base figure for the plaintiff"s variable manufacturing costs, per year. This base figure corresponds to the "Variable manufacturing costs: Cost/lb." item on Exhibit D-41, a chart prepared by Mr. Rostant. They also agree that various additional costs must be added to the base figure, but they disagree as to the quantum thereof in the following categories:
(i) Pottsville Plant Labour
 Mr. Dovey testified that variable labour costs for the Pottsville plant are included in the base figures for the plaintiff"s costs. In Mr. Rostant"s opinion, Mr. Dovey"s calculations are incorrect by 9.2 cents per pound of ER film produced. He stated:
|My Lord, in the discoveries of AlliedSignal, they provided to Du Pont's counsel an estimate of what the labour costs were to manufacture ER-15 for the years 1989 through to 1995. We looked at that and compared it to the labour that was included in the line above, being variable manufacturing costs [of] AlliedSignal, the amount that came out of their Centre Report, and determined that there was 9.2 cents per pound that was not included in the AlliedSignal estimate of the cost of producing ER-15.|
|It was our view that that amount should be added to those costs.1|
 In his rebuttal, Mr. Dovey explained why, in his view, Mr. Rostant"s addition of 9.2 cents per pound is incorrect. During the discovery of Mr. Charles Barton, an AlliedSignal representative, counsel for the defendant asked Mr. Barton about the cost per pound of variable labour at the Pottsville plant. The answer, provided approximately one month later, is listed in Table 6 of the Appendix.
 However, questions 3962-63 from Mr. Barton"s discovery qualify these numbers.
|Mr. Renaud: Q. In respect to question 3207, you gave us what appears to be a unit cost per pound. Can you tell me what that means? You gave me 21 cents for "89, and varying to 15 cents in "95.|
|Ms. D"Iorio: Well, that" what you see in 3207 is again based on our misunderstanding of your question. 3207, as we understood it, was: What are the costs of these people year by year? So, again, we are talking about, you know, the costs of those nylon production people. So, we gave you a figure per pound. They express it in that fashion.|
|Mr. Renaud: Q. Where do the numbers come from?|
|[Mr. Barton:] A. It is simply an estimate we put together.1|
 On the other hand, the actual figures from the "standard cost sheets" are considerably lower. Mr. Dovey explained in his rebuttal affidavit that the figures that were provided in response to question 3207 include both fixed and variable labour costs. Mr. Dovey elaborated as follows.
|" The second area -- and I am back on Exhibit 1.2 of my reply affidavit -- the second area that Mr. Rostant and I disagreed on is additional Pottsville labour. In my affidavit the labour is based on the standard cost labour that is built up at Pottsville and added to the resin costs.|
|In his initial report, Mr. Rostant compared an answer on discovery of about -- the answer was that there is about 20 cents of labour in Pottsville ER-15 per pound.|
|On further reflection, Mr. Rostant looked again at the standard cost reports and realized that he had picked up only the extrusion department labour, to which you must add the slitting department labour, another six cents roughly, which then arrives at 12 cents. He is then still of the view that when one looks at total labour, as he understands it, of 20 cents, there is around eight cents a pound that has yet to be accounted for. I believe he is in error at that point.|
|THE COURT: Why?|
|THE WITNESS: The 20 cents per pound that -- an answer of Mr. Barton on discovery was not a particularly precise answer. It included both fixed and variable costs.|
|THE COURT: Well, he said what he said on discovery and I don't have that before me.|
|THE WITNESS: My lord, Mr. Rostant also indicated that he tested that 20 cent number and he tested the 20 cent number by going to the cost reports at Pottsville, which are exhibits on discovery, and took the total Pottsville ER-15 volume, took the total Pottsville costs and they work out to about 20 cents a pound total Pottsville variable costs.|
|Initially, that might suggest that in the 12 cents for ER-15 costs that there is a piece that is not accounted for. The difficulty, in my view, with the method that Mr. Rostant used to test his assumption was that we are dealing in total Pottsville plant and within the total Pottsville plant it is my understanding it is not the correct assumption to make that each product has the same labour component.|
|The Pottsville plant has a number of products of which ER-15 is one. If one took all products, all production lines, not just the ER-15 lines and did the simple average, it averages out to about 20 cents a pound.|
|But one needs to move to the ER-15 product to get the ER-15 costs and the best indication and the best record we have of those costs is the standard cost sheets that both Mr. Rostant and I relied on.1|
 I have reviewed the affidavits of both experts on this issue, as well as their testimony during trial. In addition, I have considered the summary of the standard cost sheets contained in Exhibit B-4 to Mr. Dovey"s original affidavit, as well as the actual standard cost sheets contained in Exhibit 2 to Mr. Dovey"s rebuttal affidavit. Finally, I have considered Mr. Rostant"s calculations summarized in Schedule 8 of his affidavit (Volume 2). It is clear from these calculations that Mr. Rostant has relied on the plaintiff"s response to discovery question 3207. He does not appear to have any further support for his calculations.
 On the basis of all these factors, I accept Mr. Dovey"s testimony regarding the Pottsville plant"s variable labour costs. It is my opinion that the Pottsville plant"s variable labour costs have been properly accounted for in the base figures referred to supra, and there should be no additional variable cost under this heading.
(ii) Pottsville Plant Electricity
 Both experts agreed that some adjustment is necessary to the electrical costs recorded for the Pottsville plant, but they disagreed on the amount. That is, they disagreed on the percentage of total Pottsville electrical costs that are variable. Mr. Dovey, the plaintiff"s expert, set the adjustment at roughly 3.5 cents per pound, while Mr. Rostant, the defendant"s expert, set the adjustment at roughly 5.7 cents per pound.
 Mr. Dovey explained that an adjustment is necessary because the plaintiff"s records for the period of infringement treated the Pottsville electrical costs as fixed, whereas in fact a percentage of the costs are variable.1
 Mr. Rostant explained his calculations as follows:
|AlliedSignal, in its Centre Report, does not consider electricity as a variable cost. Therefore, an adjustment was necessary. The basis for our adjustment of .057 cents (sic) per pound was to look at the production of ER-15 in Pottsville as a percentage of the overall production of all products in Pottsville and that gave us a percentage of approximately 14 per cent.|
|We applied that percentage to the electricity costs for Pottsville in order to determine the per pound basis shown under the caption of electricity. We took it on a pro rata basis on the assumption that the costs of the machines for ER-15 for electricity were similar to the costs for other machines within the plant.1|
 Mr. Dovey disagreed with the assumption that the costs of all the machines are similar. His opinion is supported by Mr. DeAntonis" testimony that the "biax" line at the plant, for example, is ten times longer and produces three times as much film as the lines used for the ER-15 film.1
 Furthermore, Mr. Dovey had the benefit of an engineering study performed by the plaintiff"s electrical engineers, who measured the actual consumption of the machines used at Pottsville for ER-15 production. The measurements, contained in Exhibit H-3 to Mr. Dovey"s affadavit,1 quantify electrical consumption by the extrusion and slitting machines during typical production of ER-15 film.
 Mr. Kubitz, a Pottsville plant engineer, testified to the accuracy of the measurements and calculations that Mr. Dovey relied on, and I accept his testimony.1 It should be noted that counsel for the defendant objected to Mr. Kubitz" testimony on the basis that he was called as a fact witness, not an expert witness.1 In the submission of counsel for the defendant, any calculations made by Mr. Kubitz bring his testimony into the domain of opinion evidence and expert testimony. With respect, I disagree.
 There are two levels of expertise at issue in Mr. Kubitz" calculations, and at both levels he clearly relied on his experience and knowledge as an electrical engineer. Firstly, the very measurements of electrical consumption took some expertise to perform. However, the fact that a layperson would not know how to make these measurements does not bring them into the realm of expert or opinion evidence. The measurements are facts to which Mr. Kubitz properly testified as a fact witness.
 Secondly, the calculations performed by Mr. Kubitz also took some expertise to perform, and there is no doubt that the average layperson would not be able to convert the measurements, expressed in amps, to kilowatts, which is a much more useful unit of measure when discussing electrical consumption. In most circumstances, conversion between units of measure is an objective exercise, and does not call for any inferences to be drawn. That would also be the case here, except that the conversion formula relies on what Mr. Kubitz called the "power factor." He stated, "Normally a power factor runs somewhere around 0.9 plus or minus a half a per cent."1 Mr. Kubitz"s choice of 0.9 instead of, for example, 0.90045 is obviously very close to the fine line between fact and opinion. Considering the imperceptible effect that one half of one per cent either way would have on the outcome of the Pottsville plant electrical costs, I am not prepared to exclude it.
 Indeed, my overall view of Mr. Kubitz" testimony is that he was relating his experience as plant engineer at Pottsville to present his measurements in a useful way to the Court. The fact that Mr. Kubitz was not called as an expert prevents him from expressing an opinion on his measurements or drawing inferences from them, but it does not prevent him from making the type of calculations that he made.1 His calculations merely allowed him to express his measurements in kilowatts, a conversion which, for an electrical engineer, is presumably no more difficult than converting inches to centimetres. The fact that he relies on his expertise as an electrical engineer does not mean that he is drawing an inference or expressing an opinion.
 I would allow Mr. Kubitz" calculations to stand. In my view, they lay a proper foundation for Mr. Dovey"s opinion on this issue. Mr. Dovey explained his conclusions as follows:
|Q. All right. Electricity, do you want to deal with that one next?|
|A. The electricity -- whereas I have relied on the consumption measurements made by the company engineer to determine what electricity costs vary with production, as one runs the extruder line an additional 20 minutes to produce the additional volumes, there is electricity consumed. I have relied on the engineering measurements to determine how much electricity is consumed in the course of producing the additional volumes and that drives the adjustment in my report, additional costs in my report for Pottsville electricity.|
|Mr. Rostant has taken total electricity charged to the total Pottsville production department and divided it by total Pottsville production of ER-15 and other products, to arrive at a pro rata measure of energy consumption that he applies only to ER-15.|
|Q. Then what do you have to say about Mr. Rostant's approach?|
|A. Reliance on the engineering measurements is a more accurate measure. Mr. Rostant's report assumes that all the products produced at Pottsville consume the same amount of energy per pound.|
|Reliance on the engineering measurements allows us to isolate the additional electrical charge that applies to additional production of ER-15 only and that in my view is a more accurate measure.1|
 Mr. Rostant disagreed with two assumptions inherent in Mr. Dovey"s approach. Firstly, he stated that "[t]here may be some additional costs in addition to the machinery, " such as equipment for moving the film around, conveyor belts, conveyors, racks, lifts."1 Secondly, he noted that Mr. Dovey"s calculation "results in ER-15 production being allocated roughly " 7 to 9 per cent of the electrical costs," but that "ER-15 accounts for between 10.8 and 15 per cent of the production. There is an inconsistency there."1
 With reference to Mr. Rostant"s initial basis of disagreement, there is some evidence that, at least, a crane or conveyor is used to place the film on a cart when it is moved from the extrusion line to the secondary slitting operation.1 Concerning his second basis of disagreement, Mr. Rostant admitted during cross-examination that he did not know what proportion of fixed costs is included in the cost centre reports that he relied on, although some portion is included. For example, he said that, "[p]resumably there would be some amount in that electricity that would include lighting."1 Both parties agreed that lighting is a fixed cost in this case.
 With reference to the evidence of the experts, as well as the written opinions contained in their affidavits, it is my opinion that Mr. Dovey"s testimony carries more weight on this issue. I consider Mr. Rostant"s final figures to be rather high. However, I find persuasive Mr. Rostant"s opinion that electrical consumption by machinery other than the extrusion and slitting lines should be taken into account. I find that Mr. Dovey"s figures are rather low in this area. Based on the totality of the evidence on this issue, it is my opinion that an average of the expert"s figures should be used. I find support for this approach in the following comment by Dickson J. in Lewis v. Todd:1
|If the Courts are to apply basic principles of the law of damages and seek to achieve a reasonable approximation to pecuniary restitutio in integrum expert assistance is vital. But the trial judge, who is required to make the decision, must be accorded a large measure of freedom in dealing with the evidence presented by the experts. If the figures lead to an award which in all the circumstances seems to the judge to be inordinately high it is his duty, as I conceive it, to adjust those figures downward; and in like manner to adjust them upward if they lead to what seems to be an unusually low award.|
 Accordingly, I conclude that the electrical costs per year should be fixed as in Table 7 (see Appendix).
(iii) Additional Pottsville Plant Costs
 The defendant"s expert witness, Mr. Rostant, testified that certain other costs incurred by the Pottsville plant are variable, including a percentage of plant maintenance, expendable tools, shipping labour, vacation and holidays, operating supplies, freight costs and hazardous waste disposal. His calculations regarding direct costs are detailed under Tabs 4 and 5 of Volume 2 of his affidavit; those regarding indirect costs are detailed under Tab 6.1 The line "Additional Costs " Pottsville: Other" of Exhibit D-41 summarizes both sets of costs.
 It should be noted that in the ordinary course of business, the plaintiff considered these costs to be fixed. Nonetheless, the plaintiff"s expert witness, Mr. Dovey, agreed to some extent that some of these miscellaneous costs could be considered variable, but stated that the contribution of these costs to the cost of producing such small amounts of additional film is too insignificant to be measurable. In addition, he stated that hazardous waste disposal does not relate to the production of ER film and that freight costs in this category are only associated with plant maintenance, which would not increase.
 The evidence on which Mr. Rostant bases his opinion is the following response to a question asked during the discovery of Charles Barton.
|Based on an informal review, the following may increase with additional ER-15 volume. It is not possible to estimate by how much:|
|91819 Vacation and Holiday Expense|
|94147 Expendable Tools|
|94151 Operating Supplies|
|95179 Maintenance Materials|
|95181 Maintenance Wages/Fringe|
|99130 Electricity Distribution|
|97295 PA Sales Tax1|
 There does not appear to be any direct evidence apart from this statement. Although the experts expressed their opinions on the subject, they did not deal with it in depth during their testimony, and it appears to be a highly speculative area. I will discuss the evidence regarding direct and indirect fixed costs separately, as follows:
Direct Fixed Costs
 The direct costs related to plant maintenance, expendable tools and operating supplies constitute the largest factors in Mr. Rostant"s calculations. His opinion is that all of the costs under the categories of expendable tools and operating supplies are variable, but that only half of the costs under the category of plant maintenance are variable.1 Not all of the plant maintenance can be seen as variable because, for example, regularly scheduled maintenance is a fixed cost.1
 With respect to expendable tools and operating supplies, Mr. Dovey stated that "[u]nlike costs related to raw materials which are directly associated with any increase in output, the relationship between expendable tools and operating supplies is far less, if at all, direct."1 For this reason, he concluded that only 25% of such costs are variable.1 With respect to maintenance costs, Mr. Dovey stated that with the small proportion of additional volume represented by the defendant"s sales, there would be no additional maintenance required:
|It is my view and it is inherent in my report that at these levels there would indeed be no additional maintenance. We have used the example of an aircraft before. If one loads an additional pound of cargo on an aircraft, one doesn't necessarily have additional maintenance of the aircraft engines.1|
 On the other hand, Mr. Rostant stated as follows during cross-examination:
|Q. For example, tools, operating supplies, these are things, buffing wheels, that are more or less considered to be fixed with this type of percentage of additional volume. Don't you agree? You are not going to use 10 per cent or 3 per cent more tools because you add 3 per cent to your production?|
|A. Tools wear out with use.|
|Q. Yes. Well, they don't use more just because you produce another three per cent or four per cent of production in your plant. Right?|
|A. If they wear out with use, they will wear out three per cent faster if you produce three per cent more.1|
 Finally, Mr. Dovey admitted that, at least on a theoretical level, some of these costs are variable. During cross-examination he stated:
|Q. All right.|
|Could you tell the Court what your view is, in any event, on this amount that Mr. Rostant has added for "Other Plants," the bottom line. What is your final opinion on that having heard Mr. Rostant's testimony?|
|A. My lord, if I could answer that with respect to the "Other Plants" "Other" and the "Pottsville Plant" "Other" and Mr. Rostant has added, depending on the year, 60 to 6, 7 or 8 cents for those two amounts. In my view, from an accounting perspective we are dealing in such small volumes relative to the total production that it is difficult to deal with this on a per-unit basis.|
|Can one say with absolute certainty there would be not one extra cent of cost incurred? I don't believe one can. But having viewed the costs, well, one might add a cent, one might add a half a cent to reflect those other minor additional costs. It is my view that Mr. Rostant's estimate is simply too large.|
|Conceptually, there could be an additional glove used. There could be an additional cleaning element used. There could be some additional minor, minor cost that I have not picked up in my initial work, but the quantum that Mr. Rostant has added I believe is excessive and it effectively would be a nominal amount, if any. But the 5 cents, 7 cents and so on that Mr. Rostant has picked up is simply too much. 1|
 With respect to plant maintenance, expendable tools and operating supplies, I was persuaded by Mr. Rostant"s opinion that expendable tools and operating supplies are variable costs, and that 50% of the costs associated with plant maintenance is variable. The fact that it is difficult to calculate the costs on a per-unit basis, as Mr. Dovey emphasized, does not vitiate the Court"s obligation to make its best estimate, and ultimately to take such costs into account.
Indirect Fixed Costs
 With respect to shipping labour, Mr. DeAntonis testified that, "[w]ithin certain limits, small increases or decreases in shipped film amounts would not change the make up of the shipping staff."1 For this reason, I accept Mr. Dovey"s opinion that, given the small amounts of film in question relative to the Pottsville plant"s total production, "there would be no measurable additional costs arising out of the shipping of the additional volume."1 This is particularly so considering my conclusion, supra, regarding the volume of the defendant"s sales that the plaintiff would have captured, that total being approximately a of the amount relied on by Mr. Dovey.
 For the same reason, I adopt the following statement by Mr. Dovey regarding vacation pay:
|To the extent that additional people were hired, there would be additional vacations. But where we have no additional people hired, there is no additional vacation pay and to that extent it is my understanding that there would be on these volumes no additional people hired anywhere in the production chain and hence if you don't hire the people you don't have more vacation time.1|
 Even where employees are paid hourly, the evidence suggests that the speed of the production lines could be increased or decreased without increasing or decreasing employee hours.1 Given the small amount of film in question, it is my opinion that there would be no additional vacation pay.
 With respect to freight costs, it is Mr. Dovey"s understanding that this category is "associated with the shipment of motors for rebuilding, movement of machinery to and from warehouses and the like."1 Both experts agree that such freight costs are not related to the "freight expenses" for transporting the film and required materials. Mr. Rostant does not explain why in his opinion freight costs are variable. I adopt Mr. Dovey"s opinion with respect to freight costs, and conclude that they should not be considered variable.
 Finally, with respect to hazardous waste disposal, I accept Mr. Dovey"s opinion. There is nothing to indicate that costs of disposing hazardous waste are related to ER-15 production, or that such costs would increase with increased production of ER-15 film.
 Table 8 (see Appendix) summarizes these findings with respect to additional Pottsville plant costs.
(iv) Additional Costs " Other Plants
 It is Mr. Rostant"s opinion that certain costs included as fixed costs from the Chesterfield, Columbia, Hopewell and Frankford plants are actually variable. Mr. Dovey, on the other hand, accepts the records produced by the plaintiff in the ordinary course of business, and states that the costs identified by Mr. Rostant are truly fixed costs, particularly considering the minimal increases in volume associated with production of the extra film. Neither expert devoted much time during oral testimony to these issues, but expressed their opinions and explanations in their affidavits.1
 Having reviewed the statements of the two experts on these issues, I must agree with the following statement by Mr. Dovey: "In my view, we are dealing with such small dollars and such small volumes that one can"t reliably come up with a per pound amount that would apply to the extra pounds."1 Indeed, at this point in the production chain, such calculations have moved from being difficult to being hypothetical.
 It is my opinion that the defendant"s assertion regarding variable costs further up the chain of production than the Pottsville plant is too speculative. In the absence of a manifest error in the company"s categorization between fixed and variable costs, I accept Mr. Dovey"s opinion that the best method of determining the variable costs is to look to the records produced by the company in the ordinary course of business. Therefore, I accept the plaintiff"s assertion that no additional costs should be added to the variable manufacturing costs for the other plants.
(v) Capacity to Produce Additional ER film
 In Mr. Rostant"s opinion, the plaintiff did not have the capacity to produce the additional quantities of caprolactam and nylon necessary for the production of additional ER film. The issue is significant because if the plaintiff did not have the capacity to produce the additional raw materials internally, it would have had to purchase them at higher prices from external sources. Both experts agreed that if the plaintiff was forced to purchase from external sources, the higher cost would be a variable cost that should be included in the plaintiff"s total variable manufacturing costs. According to Mr. Rostant"s calculations, the additional cost of the raw materials amounted to as much as 92 cents per pound in 1995, which accounts for nearly 65% of the variable manufacturing costs that year.1
 In addition, the defendant submitted that the Pottsville plant did not have the film production capacity to produce the additional film, even given sufficient raw materials. I propose to address the issues of capacity to produce additional ER film (Pottsville plant), caprolactam (Hopewell plant), and nylon (Chesterfield and Columbia plants) separately.
ER-15 Film (Pottsville Plant)
 Assuming that raw materials were available, the testimony of Mr. DeAntonis makes it clear that the Pottsville plant had plenty of capacity on its film lines to produce extra film. While reviewing Exhibit P-2, Mr. DeAntonis testified as follows:
|Q. Mr. DeAntonis, can you explain to the Court what this document represents and take the Court through it?|
|A. The cover page is a summary of the actual pounds of ER-15 or 20 that were produced year by year between the years 1989 and 1995. I calculated additional ER-15 or 20 capacity, which I will put you through as we go through the calculations and adding the two to show the total potential production of ER-15 or 20 that could have -- the pounds that could have been produced at Pottsville for those years.|
|I might point out that we didn't do a complete potential production. What we basically did was stop once we got to the point that we were showing that we had plenty of capacity. We could have added line No. 2, line No. 3 and line No. 7 to the exercise and shown even greater total potential production.|
|We could have included line No. 7 and line No. 3 which were also available and would have given us additional potential production, but it seemed senseless, since already we are away over what we would have needed.1|
 This testimony is reflected in the document Mr. DeAntonis helped to prepare, which is Exhibit P-2. I accept this testimony and evidence. In the absence of contradictory evidence, it is my opinion that the plaintiff had the capacity to produce the additional amount of ER-15 film at its Pottsville plant equivalent to all the defendant"s sales.
 However, in the defendant"s submission, there is a difference between the film produced on the Pottsville plant"s blown film line (line 8) and the other flat cast lines. It is said that clients with quality concerns would have demanded blown film exclusively. On its own, the blown film line did not have the capacity to produce the additional film. Accordingly, Mr. Rostant concluded that the plaintiff would not have been able to supply ER-15 film to GenCorp from 1992 to 1995, and "possibly Sterling" in 1995.1 He did not explain why Sterling might be included, but my understanding of his opinion is that because Sterling purchased blown film from the plaintiff in 1995 and 1996, it would have demanded that any additional film supplied by the plaintiff be blown film as well.
 Due to my conclusion that the plaintiff is only entitled to a royalty on the film sold to GenCorp, it is not necessary to consider Mr. Rostant"s conclusion regarding GenCorp. Regarding Sterling Plumbing, it is my opinion that Mr. Rostant"s conclusion is too speculative, particularly considering the contrary evidence to the effect that when Sterling Plumbing purchased ER-15 film in 1993, it purchased flat cast film.1 Sterling Plumbing"s purchase of blown film in 1995 is not particularly relevant given my conclusion that the plaintiff is only entitled to a royalty for that year.
Caprolactam (Hopewell Plant)
 The defendant submitted that the plaintiff did not have the capacity in its Hopewell plant to produce additional caprolactam. This submission appears to be based mainly on the fact that the plaintiff purchased significant quantities of caprolactam from external sources from 1992 to 1995. For ease of reference, I have summarized in Table 9 (see Appendix) the relevant figures adduced as evidence concerning caprolactam capacity.
 During discovery, the plaintiff provided to the defendant what has now become Exhibit P-4, which is a chart showing the plaintiff"s "Deliverable Caprolactam Capacity." Mr. Rostant relied on the "Maximum Production Rate" figures for his calculations, which are detailed in Schedule 33 of his affidavit.1 He took these figures from Exhibit P-4 (see Appendix, Table 9, n. 239), then essentially subtracted 5% for down time and compared the result with the actual production. As a result of this comparison, Mr. Rostant concluded that the plaintiff was running its Hopewell plant over capacity for every year except 1991.
 However, Mr. Tremper, the plaintiff"s Director of Manufacturing for Intermediate Chemicals, testified that the capacity figures from Exhibit P-4 that Mr. Rostant relied on represent planned or intended production, not capacity. He testified that these figures were calculated as part of the plaintiff"s budgeting process, and stated that the actual capacity of the plant is the "Rated Capacity" figures from Exhibit P-3.
 I accept Mr. Tremper"s testimony. In my opinion, Mr. Rostant relied on figures that do not accurately reflect the Hopewell plant capacity. I find support for this conclusion in what I see as an error in Mr. Rostant"s logic. Based on what he calculated as the Hopewell plant"s "practical attainable capacity,"1 Mr. Rostant testified that the plant did not have the capacity to produce additional caprolactam.1 According to the same calculations, though, the plaintiff in fact produced significantly more caprolactam than its "practical attainable capacity."1
 For example, according to Mr. Rostant"s calculations for 1991, the Hopewell plant produced 40.4 million pounds of caprolactam beyond its "practical attainable capacity." Assuming that this is possible, there is no reason why the plaintiff could not have produced a small amount more. Indeed, if they could produce 40.4 million pounds over capacity in 1991 (6.2% over the plaintiff"s "practical attainable capacity"), surely they could have produced the extra 900,000 pounds (another 0.1% over capacity) required for the additional ER film sold by the defendant.
 I accept that there must be a limit where the plaintiff would be so much over capacity that it simply could not produce any more film. However, Mr. Rostant did not explain why the volume of film represented by the defendant"s sales corresponds to that limit. His only response was to ask, "At what point does the camel"s back break?"1
 On the other hand, Mr. Tremper testified as follows:
|Q. " can you tell the Court for those years 1989 through 1995 did the plant at Hopewell have the capacity to produce these additional quantities of caprolactam?|
|Q. Okay. You are doing right through to 1995?|
|A. Well, the 1995 numbers are small. In the volumes that we deal with these numbers are very difficult to find.|
|Q. If we take one particular -- let's take a year, 1989, and your evidence is you produced 621 million pounds of caprolactam and this indicates sales of film of 232,000. Let's make it 300,000 pounds. What does that represent as a percentage of the production of caprolactam at Hopewell, 300,000 pounds versus 621 million?|
|A. I've gotten too used to a computer and a calculator, but it would be so small. I mean it would be less than .1 per cent.|
|Q. In each of the years then that we have been looking at is your answer the same in terms of the quantity required to produce the caprolactam supplied at these quantities of film?|
|A. Yes. These numbers are exceptionally small compared to the volumes that we deal with.|
|Q. Given -- let's take the maximum one, 1990, 725,000 pounds of nylon. Let's factor that up to a million pounds of caprolactam. How long in 1990 would it take the plant at Hopewell to produce a million pounds of caprolactam, given that you produce 655 million?|
|A. We are essentially producing at that rate in the order of magnitude of 2 million pounds a day. I mean you could make this in --|
|THE COURT: In considerably less than a day?|
|THE WITNESS: Yes, well less than a day, a half a day. 1|
 Later in his testimony, Mr. Tremper testified that "there is no question" that the Hopewell plant could have produced the additional caprolactam in 1991 and 1992 because they had actually slowed down production due to decreased demand in those years.1 Looking at the amount of caprolactam required to produce the volume of film sold by the defendant, he testified that because the additional volume would be spread out over each year, it would "translate at most to 100 pounds an hour" of additional production. He testified that because the plant averages between 90,000 and 100,000 pounds of production per hour, such an increase would not even appear on their production meter.1
 Having regard to the totality of the evidence on this issue, I was not persuaded that the Hopewell plant would be unable to produce an additional 900,000 pounds when it had already produced 40.4 million pounds over its "practical attainable capacity" that year. In my view, Mr. Rostant"s calculation of the Hopewell plant"s "practical attainable capacity" is incorrect because he based his calculations on incorrect figures. The appropriate figures are the "Rated Capacity" in Exhibit P-3, as Mr. Tremper testified.
 During cross-examination, Mr. Rostant admitted that if he had used the "Rated Capacity" in his calculations, the Hopewell plant would have had the capacity to produce the additional caprolactam.1
 However, Mr. Rostant stated, "I am still perplexed, if they had the ability to produce at roughly half the price, why they were buying externally."1 In response, Mr. Tremper testified that the plaintiff purchased the external caprolactam "to maintain a presence in those markets."1 There is no other evidence before me as to why the plaintiff purchased caprolactam externally, but it is clear that this was the plaintiff"s practice. However, given my conclusion that the Hopewell plant had the capacity to produce the additional caprolactam required, the question of why the plaintiff was purchasing caprolactam is irrelevant. Rather, the remaining issue is to determine the appropriate method of accounting for the cost of this practice.
 In the absence of evidence to the contrary, I accept Mr. Dovey"s opinion that the proper approach is to assume that the plaintiff would have continued its past practice had it needed additional caprolactam. For his calculations, Mr. Dovey did not assume that the plaintiff would produce all the required additional caprolactam internally. Rather, he accounted for the external caprolactam purchases by calculating the weighted average of internal production costs together with the costs the plaintiff incurred to purchase caprolactam externally.1 In my view, this method properly accounts for the cost of the plaintiff"s practice of purchasing some caprolactam externally, and I accept his opinion on this issue.
 In conclusion, it is my opinion that the plaintiff had the required capacity to produce the necessary additional volumes of caprolactam. Furthermore, I accept the manner in which Mr. Dovey accounted for the plaintiff"s external caprolactam purchases. Accordingly, there should be no "Fair Market Value Adjustment" for caprolactam.1
Nylon (Chesterfield and Columbia Plants)
 The defendant also submits that the plaintiff did not have the capacity at its Chesterfield and Columbia plants to produce additional nylon. This submission is founded on the following two grounds:
|(i) The plaintiff could not produce any additional caprolactam, necessary to the production of additional nylon.|
|(ii) During the infringing period, the plaintiff purchased nylon from external sources.|
 The first ground is no longer a valid basis for the defendant"s submission because of my conclusions regarding caprolactam capacity, supra. With respect to the second ground, the plaintiff sold to third parties considerably more nylon each year than it purchased. Table 10 (see Appendix) summarizes the purchases and sales of nylon by the plaintiff during the infringing period.
 Mr. Rostant accounts for the fact that the plaintiff sold considerably more nylon than it purchased as follows:
|AlliedSignal confirmed that there were certain years in which "Pottsville could not get enough internal supply of high viscosity film" and added that "AlliedSignal made the decision to sell some of its internal resin externally as opposed to using it internally and thus forced the specialty films business to purchase small amounts of external nylon 6."|
|AlliedSignal also stated that in fiscal years 1993, 1994 and 1995 it "externally purchased high viscosity nylon 6 because it chose to sell the high viscosity resin that it had itself produced." AlliedSignal added that "it had the capacity to produce more nylon 6 during this time period, had it wished to do so." AlliedSignal has not explained why it did not do so, notwithstanding the fact that its cost to manufacture nylon 6 (see Schedule 41) was significantly lower than the cost of purchasing nylon 6 externally.1|
 These statements are supported by the testimony of Mr. Terry, the plaintiff"s Polymer Leader at the Chesterfield plant.1 The plaintiff"s submission that it had excess capacity is also supported by Mr. Terry"s testimony in chief. Notwithstanding the objections of counsel for the defendant, I found Mr. Terry to be a reliable witness and I accept his testimony regarding the Chesterfield plant"s capacity figures.
 Mr. Terry testified that the Chesterfield plant"s capacity to produce additional nylon dropped from approximately 3 million pounds in 1989 to approximately 300,000 pounds in 1993. At the end of 1993, the plaintiff installed new equipment, which increased its capacity to approximately 3 million pounds excess.1
 I accept Mr. Terry"s testimony that the plaintiff had the capacity to produce the required additional nylon, particularly considering the volume of nylon that it sold each year. Mr. Terry agreed during cross-examination, however, that the plaintiff"s executive decided to sell nylon at the expense of the specialty films division, as Mr. Rostant testified.1
 The issue is therefore to determine the proper method of accounting for the cost associated with the executive decision to sell internally produced nylon.
 Mr. Rostant"s method of accounting for the cost of nylon was to assume that the plaintiff would purchase all of its additional nylon externally. One manifest error that Mr. Rostant made was to calculate the cost of the required nylon based on the price at which the plaintiff was selling nylon.1 The cost of purchasing nylon should be based on the prices the plaintiff paid for nylon, not the price at which it sold nylon. Exhibits P-17, P-18 and P-19 are samples of invoices for nylon from 1993 and 1994 which show that the plaintiff paid from 17 to 35 cents less per pound in those years than the figures that Mr. Rostant used in his calculations.
 Overall, I was not persuaded that the plaintiff would necessarily purchase all its additional nylon externally. Furthermore, I find that the method employed by Mr. Dovey properly accounts for any necessary external nylon purchases. As he did with the cost of caprolactam, Mr. Dovey applied the weighted average cost of nylon, including internal production and external purchases.1 He testified as follows:
|To produce ER-15 film Pottsville needs nylon 6. To the extent that that nylon 6, or a particular type of nylon 6, was not supplied to Pottsville, it was purchased outside by Pottsville, at prices in excess of internal productive costs. Those costs are mixed at Pottsville, and the input costs, the nylon 6 either produced internally or purchased outside, is commingled and averaged to come to a weighted average cost of nylon 6 input.1|
 This method is reasonable because it does not assume that the plaintiff will use either internally produced or externally purchased nylon exclusively. Rather, Mr. Dovey"s approach relies on the plaintiff"s past practice of purchasing some nylon externally while selling some internally produced nylon. In my view, his calculations properly take this practice and its associated costs into account.
 In conclusion, it is my view that there should be no "Fair Market Value Adjustment" for nylon.1
(vi) Selling Expenses
 Mr. Rostant testified that the plaintiff"s costs related to sales, customer service and technical service are variable costs ranging from 16 to 23 cents per pound of film sold.1 Mr. Dovey testified that these costs are fixed costs because the plaintiff"s sales and service forces would not have been increased to continue to serve the nine customers it had been serving all along, having regard to such small volumes of film compared to its overall sales.
 The following testimony by Mr. Rostant forms the basis for his opinion.
|Q. Fine. So, I suggest to you, sir, that to say that it would cost an additional 16 cents a pound for Allied to service the very customers they had already been servicing and continue to service during this period of time is not realistic?|
|A. I think there are two issues there. The first one is to be able to look and see what is included in that 16 cents a pound and absent being able to do that it is very difficult for me to say what should and shouldn't be included in that.|
|Secondly, again coming back to the use of GLS, who is a distributor, this was approximately what they were willing to pay GLS in order to service -- have GLS service GenCorp.|
|Q. Well, that's a completely different situation, is it not? You are now dealing with a distributor. The distributor wants to make some money. That is different than direct selling?|
|A. It is, but why would Allied give up that money -- that's 18 cents a pound -- if they are not getting value for it?|
|Q. Well, in any event, that is a different situation. We know that GLS was getting a distributor's commission or whatever you call it, but we know that in terms of the direct selling Allied had its own sales force. They were on salary. They were not -- they didn't get paid more if they sold more. They didn't get paid less if they sold less and we also, would you agree, there is no evidence that they laid anybody off or hired anybody during this period of time, either because the sales went down or at the end when they went back up?|
|A. Again, I have no information because I haven't been given the data.1|
 It is clear from this and other testimony that Mr. Rostant did not know whether any fixed costs were included in his calculations. Furthermore, I agree entirely with counsel for the plaintiff that evidence of an offer to pay a distributor is not relevant to the calculation of the plaintiff"s direct selling expenses.
 Moreover, the evidence supports Mr. Dovey"s opinion that no additional salespeople would have been hired. The plaintiff had been selling to the customers that the defendant captured, and there is no evidence that the plaintiff dismissed any employees when it lost those sales, nor is there evidence that it hired any additional employees when it regained the majority of the sales. For these reasons, I find that Mr. Rostant"s conclusions on this issue are not persuasive.
 Accordingly, I accept Mr. Dovey"s testimony that no additional selling expenses should be deducted from the plaintiff"s profit.
(vii) Sales Returns
 Mr. Rostant testified that, according to his calculations, approximately 5% of the film sold by the plaintiff was returned. In his opinion, this is a variable cost that should be factored in to the costs of producing and selling additional film.1 However, he admitted during cross-examination that he included all sales returns in his calculations, including those returns that could have been resold. He admitted that a "more accurate estimate" would be to factor in only the returns with quality problems because these could not be resold.1 Returns for quality problems appear to be in the order of 1% of sales, not 5%.1
 Mr. Dovey asserted in his rebuttal affidavit that "AlliedSignal"s calculation of gross sales per pound, which establishes the net selling price per pound applied by both AlliedSignal and Du Pont to lost sales volume of ER film, is net of all product returns determined after taking into account the financial impact of film return."1 However, during cross-examination, he admitted that "there should be some adjustment to reflect bad product returned and scrapped" and that he had not made any adjustment for this circumstance.1
 Because of Mr. Rostant"s testimony and Mr. Dovey"s admission during cross-examination, I accept that some percentage of sales returns should be factored in as a variable cost. Based on Mr. Rostant"s admission during his cross-examination, I also accept that returns on the order of 1% is a more accurate measure. Therefore, I accept the following statement by Mr. Dovey:
|My conclusion is that the five per cent number is not supported by the detailed analysis in Mr. Rostant's work, that one would need to take that detailed analysis further and strip out the billing adjustments which are in no way reflective of bad product. The information we have before us is the returns authorization forms, which is also included in Mr. Rostant's work, show that based on those returns authorization forms where product actually came back, that the average returns were about 1.13 per cent, not five per cent.1|
 Accordingly, 1.13% of the adjusted variable manufacturing costs should be added as the cost of sales returns.
(viii) Inventory Write-Offs
 Mr. Rostant suggested that a certain small volume of film had to be written off due to excess and obsolete inventory. He stated that such write-offs for inventory would constitute an additional cost of manufacturing and selling the film that should be factored into the plaintiff"s claim.1 His calculations are set out in Schedule 22 to his affidavit (Volume 2).
 Mr. Dovey stated that Mr. Rostant"s calculations "double-count" inventory that had to be written-off due to sales returns.1 That is, what Mr. Rostant considered to be inventory write-offs would have already been written off as sales returns. Furthermore, Mr. Dovey deposed that "no additional inventory would be written off if there was increased production of ER film."1
 I have not been persuaded that the plaintiff would have had any additional excess or obsolete inventory to write off if it had produced the additional volumes of film that were sold by the defendant. Schedule 22 to Mr. Rostant"s affidavit lists the plaintiff"s inventory write-offs during the relevant period. These figures do not appear to correlate to changes in the plaintiff"s sales each year, and there is nothing to indicate that there would be more write-offs with increased production. Inventory write-offs are a cost of manufacturing and selling a product, but in the circumstances of the case at bar, I cannot accept Mr. Rostant"s view that they are a variable cost.
 Accordingly, I would make no adjustment for inventory write-offs.
 Table 11 (see Appendix) summarizes my conclusions, supra, regarding the plaintiff"s variable costs, as well as the final calculation of its average net profit per pound of ER film sold.
 Table 12 (see Appendix) contains the calculation of the award of damages based on the volume of film that the plaintiff would have captured but for the presence of the defendant"s infringing film. Based on this calculation, it is my opinion that the plaintiff is entitled to $1,604,405 in damages for lost profits due to lost sales.
2. Reasonable Royalty
(a) What is a reasonable royalty rate?
 A reasonable royalty rate is "that which the infringer would have had to pay if, instead of infringing the patent, [the infringer] had come to be licensed under the patent": Unilever PLC v. Procter & Gamble;1 Consolboard Inc. v. MacMillan Bloedel (Saskatchewan) Ltd.1 The test is what rate would result from negotiations between a willing licensor and a willing licensee.
 The present case is difficult because the plaintiff has never licensed its ER film to anyone. It has always exploited its patent by manufacturing and selling the film itself.
 I note that evidence was adduced to the effect that after the Federal Court of Appeal granted an injunction against the defendant, the defendant agreed to pay "$1.50/lb. USF for DARTEK film sales to SMC customers who continue to ask for this product."1 However, in the words of Lord Wilberforce:
|Before a "going rate" of royalty can be taken as the basis on which an infringer should be held liable, it must be shown that the circumstances in which the going rate was paid are the same or at least comparable with those in which the patentee and the infringer are assumed to strike their bargain.1|
 In the case at bar, the offer was made after the Federal Court of Appeal found in favour of the plaintiff. Such a context is not at all comparable to the situation of a willing licensor and a willing licensee, and, therefore, this particular circumstance is not relevant to the determination of a reasonable royalty rate. Furthermore, because the statement was made in the context of litigation, it is in all likelihood privileged, as well. Given my conclusion that it is not relevant, I do not feel it necessary to pronounce my opinion on the question of privilege.
 There is, in fact, no direct evidence as to the amount the plaintiff would have considered to be a reasonable royalty. As a result, it is necessary to consider the type of evidence recommended by Lord Wilberforce in the General Tire case:1
|This evidence may consist of the practice, as regards royalty, in the relevant trade or in analogous trades; perhaps of expert opinion expressed in publications or in the witness box; possibly of the profitability of the invention; and any other factor on which the judge can decide the measure of loss. Since evidence of this kind is in its nature general and also probably hypothetical, it is unlikely to be of relevance, or if relevant, of weight, in the face of the more concrete and direct type of evidence referred to [above]. But there is no rule of law which prevents the court, even when it has evidence of licensing practice, from taking these more general considerations into account. The ultimate process is one of judicial estimation of the available indications.|
 I turn now to the opinion of Professor Hausman, the plaintiff"s expert on this issue. It should be noted that counsel for the defendant objected to Professor Hausman testifying on the question of royalties on the basis that he had not been qualified as an expert in that area.1 Counsel for the plaintiff properly qualified Professor Hausman as an expert in economics before his examination-in-chief, although he did not delineate the boundaries of that expertise. While it is true that an expert in economics cannot automatically be said to have expertise in the specific area of royalties, it is clear from Professor Hausman"s experience that he does possess considerable expertise in this area. In my view, he was properly qualified to testify on this issue.1
 Counsel for the defendant also objected to the following statement contained in Professor Hausman"s rebuttal affidavit, "To the extent that it may be relevant, Du Pont"s counsel, the forensic accountant, KPMG, and certain representatives of Du Pont have had access to Allied"s profits on its patented film and yet no mention of this evidence is made by Mr. MacKillop in his Statement."1 I agree with counsel for the defendant that this statement constitutes argument. It is improper and should be struck out.
 Professor Hausman testified that, in the circumstances of this case, a reasonable royalty rate would be 50% of profits, which corresponds to 33% of the selling price. His opinion was that the plaintiff would not be likely to license its technology to the defendant at all, because, with their patent, they were entitled to 100% of sales and profits. However, assuming that the plaintiff was willing to grant a license, he stated that 50% of profits would be the absolute minimum that the plaintiff would accept. He supported his conclusion as follows:
|THE COURT: How do you arrive at half? How do you arrive at 80 cents? Why isn't it three-quarters, a quarter?|
|THE WITNESS: Well, I think, at a minimum, it's half because why would AlliedSignal ever want to give more profits away to Du Pont than it kept for itself.|
|THE COURT: This is not a scientific result? This is --|
|THE WITNESS: Royalty rates are never scientific, your honour.|
|THE COURT: No. This is sort of a judgmental thing, from your point of view?|
|THE WITNESS: Yes, but --|
|THE COURT: Based on your experience.|
|THE WITNESS: Based on my experience, but there is also some economic theory called the Nash bargaining solution, which says that the 50/50 outcome in situations like this often happens. But the idea that AlliedSignal is going to say, "We will take a five or ten per cent [royalty]", is, in my respectful judgment, business nonsense because why would they give away $1.44 of their profits to Du Pont and only keep 16?1|
 I did not find Professor Hausman"s testimony persuasive in this area. This is partly because he relied on the evidence that the defendant offered to pay $1.50 per pound to the plaintiff after the injunction had been granted.1 Furthermore, there was little factual evidence relating to the specialty films market that supported his opinion.
 Professor Hausman brought to my attention the fact that the U.S. Federal Circuit Court of Appeals held in Rite-Hite Co. v. Kelley Co.1 that a royalty of 50% of profits was reasonable. While it may have been reasonable in the circumstances of that case, such a large royalty is not supported by the evidence in the case at bar.
 On the other hand, the defendant"s expert, Mr. MacKillop, testified that in the technology industry generally, a reasonable royalty for patented technology would be approximately 25% to 33a% of profit before tax. Mr. MacKillop then detailed a number of factors that would affect the specific percentage in each case:
|(i) Transfer of technology: There would have been no need to transfer technology, so the rate should be reduced.|
|(ii) Differences in the practice of the invention: The plaintiff and the defendant have two different processes to create their products. The defendant brings its own technology to the product development. This factor would tend to reduce the royalty rate.|
|(iii) Non-exclusive licence: The defendant is not being given an exclusive license. It is not given total control over the market. This factor would reduce the royalty rate.|
|(iv) Territorial limitations: The patent is limited to the manufacture of the product within Canada. This factor would reduce the royalty rate.|
|(v) Term of the license: The license is only for six years of infringement, not for the entire term of the patent. This factor would reduce the royalty rate.|
|(vi) Competitive technology: The availability of competing technologies, such as polyethylene and coextruded film, would reduce the royalty rate.|
(vii) Competition between licensor and licensee: The fact that the plaintiff and the defendant would be competing against each other would increase the royalty rate.
|(viii) Demand for the product: Demand for nylon film was growing. This factor would increase the royalty rate.|
|(ix) Risk: The risk that the product would not sell is very low. This factor would tend to increase the royalty rate.|
|(x) Novelty of invention: The practice of using nylon films as a barrier to gas transmission has been commercially exploited for decades, and this invention is not the result of extensive laboratory studies. This would reduce the royalty rate.|
|(xi) Compensation for research and development costs: Such costs for this product are quite low. This factor would reduce the royalty rate.|
|(xii) Displacement of business: A royalty rate will tend to be higher if it results in increased revenues to the licensee. Mr. MacKillop suggests that it would not increase revenues to the defendant, but would simply "maintain existing business."|
|(xiii) Capacity to meet market demand: The royalty rate will be reduced if the patentee does not have the capacity to produce enough of the product to satisfy the market.|
 Based on these factors, Mr. MacKillop concluded that the low end of the range, namely 25% of profits before tax, is appropriate in this case. In his view, Professor Hausman"s suggestion of 33% of the selling price is "virtually unheard of in the chemical industry."
 I am thankful to Mr. MacKillop for his helpful review of these factors. I found him to be a credible and persuasive witness, and I accept the principles as he stated them. Although I do not agree, with respect to "Displacement of business", that the defendant"s revenues would not increase, overall I agree with Mr. MacKillop"s application of the principles to the facts of this case.
 Accordingly, having regard to all of the relevant circumstances and to the testimony of the two expert witnesses, I accept Mr. MacKillop"s opinion that 25% of the plaintiff"s profits is a reasonable royalty.
 To translate this rate into a percentage of selling price, Mr. MacKillop calculated that the average profit for the plaintiff"s Engineering Materials Division is 23% of the ER film"s selling price. He concluded that 25% of this profit amounts to 5.8% of the selling price. However, during cross-examination, he admitted that he only examined the profits of the Division in general, which means that his calculations are based on both patented and non-patented products.1 He did not look at the profit margin on the ER film specifically. Furthermore, he admitted that by basing his calculations on the profits of the Division as stated in AlliedSignal"s 10K report, his conclusions rely on full cost accounting principles, not differential accounting principles.1
 It is my opinion that the translation from a percentage of profits to a percentage of selling price should be made based on the profit margin of the product in issue using differential cost accounting principles. The parties agree that this is the appropriate method to calculate lost profits, and it would be unreasonable to have one profit margin for that issue and another for the question of royalty.
 I accept Mr. MacKillop"s method of calculation, provided that one uses the appropriate figures for profit and selling price. I have set out this calculation in Table 13 (see Appendix).
 On this basis, I have concluded that the plaintiff is entitled to a royalty rate of 17.5% of the selling price on those sales that the plaintiff would not have captured. Table 14 (see Appendix) contains the calculation of the total royalty award based on this rate. Founded on this calculation, it is my conclusion that the plaintiff is entitled to $910,715 in damages for a royalty on those sales made by the defendant that the plaintiff would not have captured.
3. Lost Profits due to Price Suppression
|(a) But for the actions of the defendant, would the plaintiff have been able to increase its prices?|
 Where competition by the infringer forces the patentee to reduce the selling price of its patented product, the patentee is entitled to the profit it lost both on the sales it actually made, and the sales that it would have made, at the selling price it would have maintained but for the presence of the infringing product: Colonial Fastener Co. v. Lightning Fastener Co.;1 American Braided Wire Co. v. Thompson.1
 The plaintiff submitted that, as a general proposition, a patentee is entitled to claim lost profits upon proof that it was unable to make reasonable price increases in the ordinary course of business due to the presence of the infringer. This appears to be a novel concept, although it was not contested as a legal principle by the defendant.1 In the plaintiff"s submission, the patentee must prove that it was competition by the infringer, and not other factors, that prevented it from raising its prices.1 However, the patentee need not prove that the infringer undercut its prices or even sold any product; it will suffice if the patentee can show that its prices were affected by the infringer"s market presence through marketing schemes or other means.1 Considering my conclusion, infra, that the plaintiff has not met its case on this issue, I prefer not to express my opinion as to whether such a claim is possible in law.
 Nonetheless, the expert witnesses for both parties accepted these principles, but disagreed on their application to the facts.
 In my opinion, much of the plaintiff"s evidence on this issue is not admissible. Even if I am wrong in that opinion, I am not persuaded by the evidence in any event. For this reason, I propose to set out the crux of the plaintiff"s argument and the evidence to support that argument, and deal with the admissibility of the evidence only as a secondary matter.
 The plaintiff"s submission is that the plaintiff would have been able to raise its prices by 10" per pound in 1990 and by 20" per pound in 1992. Mr. Petty testified as the plaintiff"s sales and marketing representative. In his affidavit, he stated,
|It is my opinion that, but for the Du Pont Canada infringement of AlliedSignal"s patent, AlliedSignal would have been able to increase the price of its ER15/20 film an additional 10" per pound commencing in 1990 and a further 20" per pound commencing in 1992, without causing any customers to convert to an alternative non-infringing film such as polyethylene.1|
 The economic justification appears to be that these amounts keep pace with the rate of inflation, thus retaining the product"s "real price" constant. The essence of Professor Hausman"s verbal testimony is as follows:
|So, what I am saying here is that there are positive price increases of 10 cents, which is approximately 4.7 per cent, and 20 cents, which is approximately 9 per cent.|
|As I stated previously, over this time period inflation was running at approximately 3.6 per cent per year. So, based on my knowledge of the facts of the case, based on economic theory, based on [consulting] to many businesses, it's my opinion that, absent Du Pont Canada, they certainly could have raised their prices by these amounts, which do not keep up with inflation, because they could have gone to their customers and said, "Look, we are just keeping up with inflation or a little bit less", and everybody tries to do that.|
|But it's my actual opinion, in the absence of Du Pont Canada, that they could have raised the price perhaps significantly more. I don't know exactly how much, but I think it would have been more than either the dime or 20 cents. But certainly the dime or 20 cents are low enough and because they are below inflation, it's my conclusion that these price increases could have been instituted and they would have stuck in the industry being below the going rate of inflation and also because Du Pont Canada, with its identical or very nearly identical film would not have been out there competing.1|
 There is also some factual evidence as to the effect of the defendant"s presence in the marketplace. For example, Mr. Petty testified that on one occasion in mid-1993, a Rockwell International representative told him that "if we [the plaintiff] did not keep our prices down, he would call Du Pont."1 Although counsel for the defendant objected to this statement as hearsay, the fact that the statement was made is admissible.1 The fact that such threats were made is also supported by AlliedSignal"s June 1991 monthly report, which states, "Olinda and I visited Rockwell on June 18 to discuss price increase. Rockwell threatened to ask for quote from Du Pont Canada. We offered a price freeze until year end 1991 which was not acceptable. They will be receiving quotes from Du Pont Canada this month."1
 There is similar evidence from Mr. Butler, a senior GenCorp employee from 1994 to 1997:
|Q. During the time that you had the responsibility at GenCorp -- i.e., from July of '94 through July of '97 -- did you ever discuss price with either Du Pont or AlliedSignal?|
|Q. In what context did those discussions take place?|
|A. We were talking with both companies to drive the price down. So, we had ongoing conversations with prices and products.|
|Q. Did you ever use one company against the other in price to keep the price down; in other words, tell one that the other would give you a better price?|
|A. We certainly indicated that there was competition there, but we did not share prices.1|
 In summary, there is some evidence to suggest that customers used the defendant"s presence to try to reduce the plaintiff"s prices. However, the plaintiff did not reduce its prices, and there is no factual evidence to suggest that the plaintiff would have increased its prices any more than it did over the five year period. Furthermore, the plaintiff did not adduce any evidence in support of the figures of 10" and 20" as the proposed price increases in 1990 and 1992, respectively. The numbers simply appeared in Mr. Petty"s opinion without being substantiated.
 Mr. Ross, a consulting economist called by the defendant, properly pointed out that "the question of the existence and the magnitude of price suppression are linked questions, and without any effort to examine the available data for evidence of price suppression, it is impossible to draw reasonable conclusions with respect to both the existence and the magnitude of any such price suppression."1
 I was not persuaded by the testimony of Professor Hausman on this issue. I refer particularly to his explanation that the plaintiff could have kept its prices up with inflation. This is particularly so in face of the rebuttal, supported by factual evidence, of the defendant"s expert, Mr. Ross.
 I would observe that counsel for the plaintiff objected to the admissibility of a large portion of Mr. Ross" testimony. In his submission, section III of Mr. Ross" affidavit, entitled "Analysis of AlliedSignal Price Data," is inadmissible because this section is not in reply to Professor Hausman"s affidavit, and should have been introduced as evidence in chief.
 I do not agree with this submission. In my opinion, section III of Mr. Ross" affidavit is a proper reply to Professor Hausman"s affidavit. In section II of his affidavit, Mr. Ross concludes that Professor Hausman"s affidavit focuses "at the level of conceptual framework and hypothesis generation. They do not test the validity of their hypothesis against the available market data."1 In essence, Mr. Ross agrees with Professor Hausman"s conceptual framework, but in Section III of his affidavit, he tests the validity of the concept against AlliedSignal"s actual prices. His conclusion is that the data with which Professor Hausman should have tested his theory does not actually support his theory in the circumstances.
 In summary, Mr. Ross effectively replied to Professor Hausman"s affidavit by examining the conceptual framework in section II of his affidavit and then demonstrating in section III how that framework does not fit the facts of the case at bar. On this basis, section III of the Ross affidavit is clearly admissible.
 Mr. Ross examined the prices of the plaintiff"s film before, during and after the period of infringement. He considered a number of factors that could distort price trends, including the market price of the raw materials (nylon in particular), the entry and exit of other competitors, and the pattern of the business cycle. He concluded that there was no evidence in the price trends to support the plaintiff"s claim.
 Mr. Ross also considered and, for the same reasons, rejected Professor Hausman"s opinion that the plaintiff could have kept its prices even with inflation.
 During cross-examination, Mr. Ross agreed that the plaintiff was in a nearly monopolistic situation before the defendant entered the market. However, he responded that they had been in such a situation since 1980, and "had already maximized their prices to the level that they thought was the appropriate level in order to maximize the profitability of the product."1
 I accept Mr. Ross" version of the economics of this issue. There is not enough factual evidence to support the opinions of the plaintiff"s experts. Furthermore, I was not persuaded by Professor Hausman"s opinion on this issue, particularly when weighed against Mr. Ross" analysis. Accordingly, I conclude that the defendant"s presence in the marketplace did not prevent the plaintiff from raising its prices.
 I have reached this conclusion based on the totality of the evidence adduced by the plaintiff. However, I reserved my decision regarding the admissibility of much of this evidence, and my conclusion on the substance of this issue is reinforced considerably by the fact that, in my opinion, very little of this evidence is admissible.
 Firstly, Mr. Petty was not qualified as an expert. I have no doubt that he was the best person to testify about the plaintiff"s pricing strategies and its interaction with customers in terms of prices, but these are all factual matters. I was not persuaded by the plaintiff"s argument that Mr. Petty was so knowledgeable about the SMC carrier film industry and the defendant"s impact on it that his inferences and opinion would be useful evidence. Because he was not qualified as an expert, his statements of opinion are not admissible.
 Secondly, the thrust of Professor Hausman"s oral testimony was that the plaintiff would have had no difficulty in achieving the 10" and 20" price increases because it simply meant keeping its prices even with inflation. Counsel for the defendant objected to Professor Hausman"s reliance on inflation because there is no mention of it in his affidavit as a basis for his opinion. I permitted Professor Hausman to testify, reserving my decision on the admissibility of that portion of his testimony regarding inflation.
 Rule 482 of the Federal Court Rules1 states:
|482. (1) No evidence in chief of an expert witness shall be received at the trial (unless the Court otherwise orders in a particular case) in respect of any issue unless|
|(a) that issue has been defined by the pleadings or by agreement of the parties filed under Rule 485;|
|(b) an affidavit setting out the proposed evidence has been filed and a copy of it served on all other parties at least 30 days before the commencement of the trial; and,|
|(c) the expert witness is available at the trial for cross-examination.|
|(2) Subject to compliance with paragraph (1), evidence in chief of an expert witness may be tendered at the trial by|
|(a) the reading of the whole of the affidavit referred to in paragraph (1), or such part thereof as the party decides to use at the trial, into evidence by the witness (unless the Court, with the consent of all parties, permits it to be taken as read); and,|
|(b) if the party so elects, verbal testimony by the witness|
|(i) explaining or demonstrating what is in the affidavit or the part thereof that has been so put into evidence, as the case may be, and|
|(ii) otherwise, by special leave of the Court subject to such terms if any as seem just.|
 Rule 482(2)(b)(ii) does not apply because counsel did not request leave of the Court and I did not grant it, nor do I see a reason to grant leave at this juncture.
 In my opinion, Professor Hausman relied on inflation as a part of the foundation of his opinion, and the defendant should have had proper notice of it under Rule 482. Even counsel for the plaintiff seemed to consider inflation as part of the rationale for Professor Hausman"s opinion. Referring to Professor Hausman"s testimony, counsel made the following submission:
|The witness has spoken about inflation. This witness is competent to give an opinion as to what, in his opinion, would have been reasonable price increases that AlliedSignal could have made. That is not factual because it didn't happen, but that is opinion evidence and that is why we sought to introduce it through Mr. Petty. Mr. Petty couldn't speak to the facts because they weren't facts.|
|That's what might have happened, but did not occur and this witness, an expert economist, as he has been so qualified, has already gone through the basis on which he has considered the marketplace, considered inflation, the presence or absence of Du Pont and, in my respectful submission, is competent to give an opinion as to what, in his opinion, would have been appropriate price increases and when they occur.1|
 Professor Hausman testified later that ""it"s my actual opinion, in the absence of Du Pont Canada, that they could have raised the price perhaps significantly more." Nonetheless, so much of his oral testimony relied on inflation as a benchmark that I cannot accept it as merely an explanation or demonstration of what is contained in his affidavit. In fact, I agree entirely with Mr. Ross, the defendant"s expert, when he stated,
|I would say that Hausman has, rather than drawing on the Petty affidavit for his support for the 10 and 30 cent price suppression hypothesis, he in a sense has replaced that with what I described as the market power hypothesis, that in the absence of infringing activity by Du Pont that AlliedSignal would have been able to raise its price at the rate of inflation and that that leads to a roughly similar result as the 10 and 30 cent hypothesis.1|
 I adopt the words of Potts J. of the Ontario Supreme Court in McEachrane v. Children"s Aid Society of the County of Essex, where he stated, "The whole point of allowing an expert report is to know what the evidence of the witness will consist of, and the factual basis upon which he proposed to give his proposed evidence."1
 I also accept Huddart J."s analysis in a motion before the B.C. Supreme Court in Haida Inn Partnership v. Touche Ross & Co.1 The most relevant comment in his decision is part of a citation from the Law Reform Commission of Canada, Evidence Project (Paper No. 7), referring to the process of discovery:
|One of the more important premises of that system of fact finding is that each party in the dispute will be able not only to present his own case in its most favourable light but will also be able to thoroughly challenge his opponent"s case. But particularly with expert evidence, which is based on knowledge not possessed by the ordinary lawyer, it is extremely difficult to effectively probe for weaknesses without advanced notice of its substance and an opportunity to prepare.1|
 In fairness to the defendant and pursuant to Rule 482, Professor Hausman"s testimony should be limited to explaining the substance of his affidavit. Accordingly, I conclude that his comments regarding inflation are not admissible.
 Thirdly, notwithstanding my conclusion regarding inflation, the plaintiff did not lay a proper factual foundation for the opinion of either Mr. Petty or Professor Hausman. In the plaintiff"s submission, the relevant facts are "competition or lack of competition, the nature of the marketplace, the type of film that we are concerned with, " Du Pont Canada being present in the marketplace, the level of sales that were taking place, [and] the prices that were being charged."1
 While these facts are important, they are not particularly persuasive. They certainly do not explain how the experts arrived at 10" and 20" as reasonable price increases. There is a notable lack of evidence regarding the plaintiff"s pricing strategies, evidence of internal management discussions, including memoranda regarding pricing decisions, evidence of discussions with customers regarding pricing, etc. Such evidence is important not only to establish the alleged difficulties the plaintiff had in raising its prices, but also to provide the necessary proof that the plaintiff would actually have raised its prices if the defendant"s film had not been in the market.
 During discovery, the defendant attempted to obtain such evidence. For example:
|MR. HUGHES: I would like to have all facts and circumstances relating to any discussions within Allied including any supporting documents in which any price raise or change was considered and in context of which Du Pont was also included.|
|MR. MACKLIN: Du Pont included in what sense?|
|MR. HUGHES: As a factor in raising or not raising or whatever the price. I'd like to know about all of those discussions and considerations that may have taken place and any memoranda or notes or letters or other documents that reflect in any way those discussions.1|
 The defendant also made requests regarding evidence of discussions with customers. For example:
|Would you find out and let me know if there [were] such discussions, and, if so, what was discussed, what price did Allied offer the product at, what price did the customer want it at, were there any discussions, did Allied change its price as a result of those discussions, and did you sell product at the changed price or at any price, and, if so, what was the price?1|
 In response, counsel for the plaintiff assured counsel for the defendant that he could find no supporting documentation and that "[n]o specific conversations with any of the lost customers could be recalled."1 During argument, the plaintiff adopted the position that this issue only involved expert opinion and that the defendant"s requests were beyond the scope of the discovery.
 Nonetheless, Mr. Petty purported to testify about various conversations he had with customers, particularly Rockwell. Counsel for the defendant objected that he had not received notice from the plaintiff that one of its witnesses had subsequently recalled such conversations. I heard the witness and reserved my decision regarding the admissibility of that portion of his factual evidence that had been refused to the defendant during discovery.
 After reviewing the arguments of counsel for both parties, it is my opinion that Mr. Petty"s testimony regarding price discussions with customers is not admissible. Counsel for the plaintiff submitted that the defendant"s request during discovery only applied to conversations with lost customers, and that Rockwell was not a lost customer during the period concerning which Mr. Petty testified. I cannot accept this narrow distinction. Counsel for the defendant clearly and repeatedly asked during discovery for any factual information about pricing decisions and discussions both within AlliedSignal and with customers. All these requests were refused on the basis that no records could be found and no conversations could be recalled. However, Mr. Petty did recall such conversations. The plaintiff should have given notice to the defendant pursuant to Rule 460 of the Federal Court Rules1 that Mr. Petty was going to testify with respect to such conversations. In the absence of such notice, I find that Mr. Petty"s testimony regarding the conversations is not admissible: Rule 461(d).
 For the foregoing reasons, the plaintiff"s claim under this head of damage must fail.
4. Interest and Currency Conversion
|(a) What is the appropriate prejudgment interest rate?|
 Section 36(1) of the Federal Court Act1 states as follows:
|36. (1) Except as otherwise provided in any other Act of Parliament, and subject to subsection (2), the laws relating to prejudgment interest in proceedings between subject and subject that are in force in a province apply to any proceedings in the Court in respect of any cause of action arising in that province.|
 The cause of action in this matter arose in the province of Ontario. The relevant provisions of the Ontario Courts of Justice Act1 read as follows:
|127. (1) "Prejudgment interest rate" means the bank rate at the end of the first day of the last month of the quarter preceding the quarter in which the proceeding was commenced, rounded to the nearest tenth of a percentage point.|
|128 (1) A person who is entitled to an order for the payment of money is entitled to claim and have included in the order an award of interest thereon at the prejudgment interest rate, calculated from the date the cause of action arose to the date of the order.|
|(4) Interest shall not be awarded under subsection (1),|
(b) on interest accruing under this section;
|(g) where interest is payable by a right other than under this section.|
|130. (1) The court may, where it considers it just to do so, in respect of the whole or any part of the amount on which interest is payable under section 128 or 129,|
(a) disallow interest under either section;
(b) allow interest at a rate higher or lower than that provided in either section;
(c) allow interest for a period other than that provided in either section.
(2) For the purpose of subsection (1), the court shall take into account,
(a) changes in market interest rates;
(b) the circumstances of the case;
(c) the fact that an advance payment was made;
(d) the circumstances of medical disclosure by the plaintiff;
(e) the amount claimed and the amount recovered in the proceeding;
|(f) the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding; and,|
|(g) any other relevant consideration.|
 The present action was commenced on October 25, 1989, which is in the fourth quarter of 1989. According to the Ontario Gazette, the prejudgment interest rate for the third quarter of 1989 is 14%.1
 However, the rate of interest dropped steadily from 1989 to a low of 5.0% in 1997. Where interest rates have fluctuated widely, judges have been willing to exercise their discretion with respect to prejudgment interest and either lower the interest rate or average it over the period in question.1 The weighted average in this case amounts to 9.2%.
 Counsel for the plaintiff submitted that the plaintiff"s average return on investment over the infringing period, based on the plaintiff"s 1995 Annual Report,1 was much higher than 9.2%, and that for this reason 14% is more reasonable.1 In my opinion, this is not a relevant consideration in the circumstances of this case. An award of interest should not give an undue advantage to either party. Accepting the extreme upper limit of the range of interest rates from 1989 to 1995 clearly gives an advantage to the plaintiff, whereas the average over the range, particularly where infringement occurred continuously during the period, is fair to both parties.
 Taking into account the changes in market interest rates in particular, then, I exercise the discretion conferred on me by s. 130(1) of the Ontario Courts of Justice Act1 and accept the weighted average interest rate of 9.2% as proposed by the defendant.1
(b) Should the interest be compound or simple interest?
 In decisions involving the equitable remedy of accounting of profits, it is clear that "the decision to award compound interest, although clearly discretionary, is to be regarded as "the rule". That means that in normal circumstances an award of only simple interest requires some explanation."1 In decisions involving the legal remedy of damages, however, the law is less certain.
 The rule laid down in Reading & Bates Construction v. Baker1 applies in the context of an accounting of profits, and is inapplicable to an award of damages.1 Furthermore, I respectfully agree with the decision of Potts J. of the Ontario Court (General Division) in Bonneville v. Kurtow,1 where he held that s. 128(4)(b) of the Ontario Courts of Justice Act1 "effectively bars the plaintiff from receiving compound interest." Section 128(4)(b) states that interest shall not be awarded "on interest accruing under this section."
 Without doubt, there will be circumstances where an award of compound interest is appropriate in spite of s. 128(4)(b).1 Such circumstances depend on evidence that the parties had contemplated compound interest (e.g., evidence of a contract or past conduct) or a remedy that gives rise to the court"s equitable jurisdiction (e.g., an accounting of profits). In these circumstances, it appears that compound interest can be justified under s. 128(4)(g).1
 In the case at bar, the plaintiff elected the remedy of damages and, in my view, is not entitled to compound interest. There is no question of bad faith on the part of either party, and there is no analogy, even an imperfect one, between the infringer in this case and a trustee who has breached a fiduciary duty.
 Accordingly, I conclude that the award of prejudgment interest should be for simple interest only.
(c) For what period should prejudgment interest be calculated?
 Counsel for the defendant urged me to exercise my discretion to suspend prejudgment interest over two periods. In his submission, the plaintiff should not be entitled to interest from September 1, 1993 to April 30, 1995, which corresponds to the period between the decision of the Trial Division and the decision of the Federal Court of Appeal. He submitted that the patent was invalid during this period. In addition, he submitted that the plaintiff should not be entitled to interest from April 1, 1996 to June 30, 1997 due to what he called a lack of cooperation on the part of the plaintiff in the production of documents.
 I am unable to accept the defendant"s submissions on this issue. This reference involved a number of complex issues and required the production of an enormous number of documents. Although the defendant made a number of requests for discovery of witnesses and documents, there is nothing on the record before me to suggest that the plaintiff was not reasonably forthcoming. I have already dealt with Mr. Petty"s recollection of conversations with customers about prices, and the fact that the defendant was not given notice. In my view, these circumstances are not relevant to the determination of the prejudgment interest issue.
 It is my opinion that the circumstances at bar are such that the plaintiff should not be penalized through a reduction in the award of interest. I respectfully adopt the principles enunciated by the Ontario Court of Appeal in Royal Bank v. Roland Home Improvements Ltd.1 as follows:
|If the claimant is to be penalized, it should be in costs and the trial judge here, by awarding party-and-party costs in a case which prima facie merited solicitor-and-client costs, has already done that. Pre-judgment interest is part of the value of the award, and just as the court would not reduce the amount of the award proper because of delay in bringing the matter to court, so should it not reduce the value of the award by reducing the interest to which the claimant would otherwise be entitled. To the defendant who complains about being obliged to pay interest beyond the period within which he might reasonably have expected the dispute would be settled, the answer is twofold:|
|(a) he is not suffering an interest penalty because, during the delay period, he has the use of the money which is ultimately awarded to the claimant; and,|
|(b) he can always stop interest running by making his own estimate of damages and paying it into court without prejudice to his continued right to dispute liability and quantum.1|
 With respect to the defendant"s submission that the patent was invalid between September 1, 1993 and April 30, 1995, the judgment of the Federal Court of Appeal is the final judgment in this matter on the validity of the patent and its infringement. The cases referred to me by counsel for the defendant, regarding lapse of a patent, are not relevant.
 Accordingly, it is my conclusion that prejudgment simple interest at 9.2% per annum should be awarded for the entire period from January 1, 1989 to the date of judgment with respect to this report.
(d) What is the appropriate currency conversion date?
 Section 12 of the Currency Act1 states:
|All public accounts established or maintained in Canada shall be in the currency of Canada, and any reference to money or monetary value in any indictment or other legal proceedings shall be stated in the currency of Canada.|
 This provision requires that the award in this reference be expressed in Canadian currency.1 Because all the evidence in this case has been expressed in U.S. currency, I must decide at what date the currency should be converted into Canadian funds.
 In N.V. Bocimar, S.A. v. Century Insurance Co. of Canada,1 the Federal Court of Appeal held that until the Supreme Court of Canada revisits the question, it is not open to lower courts to depart from the "breach-date rule" adopted in The Custodian v. Blucher1 and Gatineau Power Co. v. Crown Life Insurance Co.1 This rule provides that currency must be converted as of the date of breach of contract or commission of the tort.
 In my opinion, the circumstances of the case at bar do not fall within the breach-date rule, mainly because there is no date corresponding to the infringement of the patent, which occurred over a period of six years.
 Counsel for the defendant suggested that it would be appropriate to take the mid-point of each year and convert the amount owing per year at that point. In my opinion, this method is overly cumbersome, particularly when compared to the solution of converting the currency as at the date of judgment with respect to this report. In Lee S. Wilbur & Co. v. "Martha Ingraham" (The) (10 May 1989), Ottawa T-1114-87 (F.C.T.D.), Teitelbaum J. considered the application of the breach-date rule where there was no evidence of the appropriate date. In that case, he converted the currency as at the date of judgment. Although the facts of that case are not directly analogous to the present circumstances, I find that converting the currency as at the date of judgment with respect to this report is the only practicable solution.
 Accordingly, I would set the date of currency conversion as the best buying rate available from a chartered Canadian bank for U.S. dollars as at the date of judgment with respect to this report.
(e) Post-judgment interest
 Section 37 of the Federal Court Act1 provides as follows:
|37. (1) Except as otherwise provided in any other Act of Parliament and subject to subsection (2), the laws relating to interest on judgment in causes of action between subject and subject that are in force in a province apply to judgment of the Court in respect of any cause of action arising in that province.|
 As for post-judgment interest, the applicable statute is the Ontario Courts of Justice Act.1 The relevant provisions read as follows:
|127. "Post-judgment interest rate" means the bank rate at the end of the first day of the last month of the quarter preceding the quarter in which the date of the order falls, rounded to the next higher whole number where the bank rate includes a fraction, plus 1%.|
|129. (1) Money owing under an order, including cost to be assessed or costs fixed by the Court, bears interest at the post-judgment interest rate, calculated from the date of the order.|
 According to the Ontario Gazette, the post-judgment interest rate for the fourth quarter of 1997 is 5%.1 I would therefore set the post-judgment interest rate herein at 5%, to commence from the date of judgment with respect to this report.
 In summary, I would recommend the following:
|(i) That the plaintiff be awarded damages in the amount of U.S. $1,604,405 for lost profits due to the sales made by the defendant that the plaintiff would have captured;|
|(ii) That the plaintiff be awarded damages in the amount of U.S. $910,715 as a royalty on the sales made by the defendant that the plaintiff would not have captured;|
|(iii) That the plaintiff not be awarded any damages in respect of its claim of lost profits due to price suppression;|
|(iv) That the damages I have recommended, supra, as stated in United States currency, be converted to Canadian currency at the best buying rate for U.S. dollars available from a chartered Canadian bank as at the date of judgment with respect to this report;|
|(v) That the plaintiff be awarded simple prejudgment interest at 9.2% per annum from January 1, 1989 to the date of judgment with respect to this report;|
|(vi) That the plaintiff be awarded post-judgment interest at the rate of 5%, to commence from the date of judgment with respect to this report.|
 On the question of costs, counsel for the parties may address me at a mutually convenient time following the release of this report.
 All of which is respectfully recommended to this Honourable Court.
February 13, 1998
 A draft copy of this report and appendix, both subject to the confidentiality Order of Lefebvre, Prothonotary, dated August 23, 1990, were released to counsel for the parties on February 2, 1998. Counsel were invited to make submissions before February 12, 1998 as to the confidentiality of any information contained in the report.
 Counsel for both parties have advised me that they have no objection to a public release of this report. Accordingly, this report is no longer subject to the confidentiality Order issued herein. However, the appendix will at all times remain subject to the said confidentiality Order.__________________
All the evidence regarding monetary amounts in this reference is expressed in U.S. currency. Therefore, all references to currency herein are references to U.S. currency, although the final award will be converted to Canadian currency to satisfy s. 12 of the Currency Act, R.S.C. 1985, c. C-52. See the discussion regarding this issue beginning at ", infra .
See Reed J."s analysis of these cases: AlliedSignal Inc. v. DuPont Canada Inc. (1993), 50 C.P.R (3d) 1 (F.C.T.D.) The Federal Court of Appeal agreed with her conclusions on this issue: (1995), 61 C.P.R. (3d) 417 at 444 (F.C.A.)
AlliedSignal Inc. v. DuPont Canada Inc. (1993), 50 C.P.R (3d) 1 at 19 (F.C.T.D.), per Reed J. The Federal Court of Appeal affirmed her conclusion: (1995), 61 C.P.R. (3d) 417 at 443 (F.C.A.), per Desjardins J.A.
United Horse Shore and Nail Co. Ltd. v. Stewart & Co. (1888), 5 R.P.C. 260 at 264, 13 App.Cas. 401, per the Lord Chancellor; Meters Ltd. v. Metropolitan Gas Meters Ltd. (1910), 27 R.P.C. 721 at 731 (Ch.D.), per Eve J.; aff"d (1911), 28 R.P.C. 157 (C.A.)
Meters Ltd. v. Metropolitan Gas Meters Ltd. (1910), 27 R.P.C. 721 at 731 (Ch.D.), per Eve J.; aff"d (1911), 28 R.P.C. 157 (C.A.); Catnic Components Ltd. v. Hill & Smith Ltd.,  F.S.R. 512 at 522,  R.P.C. 183 (Pat. Ct.), per Falconer J.
Domco Industries Ltd. v. Armstrong Cork Canada Ltd. (1983), 76 C.P.R. (2d) 70 at 92 (F.C.T.D.) per Preston, Prothonotary; var"d (1986), 10 C.P.R. (3d) 53, 9 C.I.P.R. 139 (F.C.T.D.); Catnic Components Ltd. v. Hill & Smith Ltd.,  F.S.R. 512 at 522,  R.P.C. 183 (Pat. Ct.), per Falconer J.
H.G. Fox, The Canadian Law and Practice Relating to Letters Patent for Inventions, 4th ed. (Toronto: Carswell, 1969) at 494, cited with approval in Domco Industries Ltd. v. Armstrong Cork Canada Ltd. (1983), 76 C.P.R. (2d) 70 at 90 (F.C.T.D.) per Preston, Prothonotary; var'd on other issues (1986), 10 C.P.R. (3d) 53, 9 C.I.P.R. 139 (F.C.T.D.)
See Table 2, supra.
Affidavit of Professor Jerry Hausman at "29 (Exhibit P-11).
Affidavit of John M. Maxel at "18 (Exhibit D-27).
From the testimony of Mr. Hoffman at trial before Reed J., read in at Transcript, vol. 3, Professor Jerry Hausman, at 708-9, cross-examination. See also Transcript, vol. 2, David R. Petty, at 437, examination-in-chief.
It is interesting to note that in 1996 Eagle Picher worked with AlliedSignal towards the development of a satisfactory coextruded film. See Exhibit D-1, an article entitled "SMC release film meets specialty requirements" from the June 1997 edition of Plastics World.
Affidavit of John Maxel at ""9-10 (Exhibit D-27), read in at Transcript, vol. 6, John Maxel, at 1216-19, examination-in-chief.
Affidavit of Professor Jerry A. Hausman at ""28-29 (Exhibit P-11).
Affidavit of Professor Jerry A. Hausman at ""28-29 (Exhibit P-11).
Affidavit of William C. Dovey at "23 (Exhibit P-15).
Affidavit of Derek A. Rostant (Volume 1) at "6.5 (Exhibit D-37).
See, e.g., Rothwell v. Canada (1985), 2 F.T.R. 6 at 10 (T.D.), per Strayer J.
Rebuttal Affidavit of William C. Dovey at "20 (Exhibit P-25).
Rebuttal Affidavit of William C. Dovey at "22 (Exhibit P-25).
Rebuttal Affidavit of William C. Dovey at "23 (Exhibit P-25).
Affidavit of Derek A. Rostant (Volume 1) at Tab 6, ""6.3.2 " 6.3.5 (Exhibit D-37); Rebuttal Affidavit of William C. Dovey at ""26-45 (Exhibit P-25).
Affidavit of Derek A. Rostant (Volume 1) at "10.6, p. 55 (Exhibit D-37).
See line 6 of Mr. Rostant"s calculations, Exhibit D-41.
Affidavit of Derek A. Rostant (Volume 1) at "10.4, p. 52 (Exhibit D-37).
Affidavit of William C. Dovey at "72 (Exhibit P-15).
See line 5 of Mr. Rostant"s calculations, Exhibit D-41.
Affidavit of Derek A. Rostant (Volume 1) at "6.6 (Exhibit D-37).
Rebuttal Affidavit of William C. Dovey at "16 (Exhibit P-25).
Affidavit of Derek Rostant (Volume 1) at "6.7 (Exhibit D-37).
Affidavit of William C. Dovey at "52 (Exhibit P-25).
Unilever PLC v. Procter & Gamble (1993), 47 C.P.R. (3d) 479 at 523 (F.C.T.D.), aff"d (1995), 61 C.P.R. (3d) 499 (F.C.A.). Note that the Court refers to my words in Consolboard Inc. v. MacMillan Bloedel (Saskatchewan) Ltd. (1983), 74 C.P.R. (2d) 199 (F.C.A.) at 206, where I was referring to the trial decision, but this citation originally comes from the words of Sargent, J. in A.G. für Autogene Aluminium Schweissung v. London Aluminium Co. Ltd. (No. 2) (1923), 40 R.P.C. 107.
See Transcript, vol. 3, Professor Jerry Hausman, at 598-99, examination-in-chief. I attach no significance to the circumstance that Professor Hausman"s qualifications on this issue are to be found in the midst of his testimony. This in no way affects the weight to be afforded that evidence: R. v. Marquard,  4 S.C.R. 223 at 244, per McLachlin J.
Affidavit of Jerry A. Hausman, at "13(p) (Exhibit P-12).
Affidavit of Jerry A. Hausman at ""48-53 (Exhibit P-11).
Indeed, the only mention of such a claim that I could find is by the South African Court of Appeal in Omega Africa Plastics Pty. Ltd. v. Swisstool Mfg. Co. (Pty.), [1978 (3)] S.A. 465 at 475 (App. Div.), per Trollip, J.A. The claim was abandoned due to a lack of evidence, but the Court accepted it as a "possibility."
See, e.g. American Braided Wire Co. v. Thomson (1890), 7 R.P.C. 152 at 160 (C.A.), per Lord Cotton.
Affidavit of David R. Petty at "26 (Exhibit P-8).
J. Sopinka, The Law of Evidence in Canada (Toronto: Butterworths, 1992) at 160-61.
Bonneville v. Kurtow (1997), 25 O.T.C. 262 (Ont. Gen. Div.), 120 Adelaide v. Thomson Rogers (1995), 38 C.P.C. (3d) 69 (Ont. Gen. Div.), Spencer v. Rosati (1985), 50 O.R. (2d) 661 (C.A.), Graham v. Rourke (1990), 75 O.R. (2d) 622 (C.A.)
Reading & Bates Construction Co. v. Baker Energy Resources Corp. (1994), 58 C.P.R. (3d) 359,  1 F.C. 483, 175 N.R. 225, 85 F.T.R. 240n, 51 A.C.W.S. (3d) 137 [leave to appeal to S.C.C. refused, 60 C.P.R. (3d) vi].
See Brock v. Cole (1983), 40 O.R. (2d) 97 (C.A.) See also Diane Saxe, "Judicial Discretion in the Calculation of Prejudgment Interest" (1986), 6 Adv. Q. 433 for a general overview of this topic.
N.V. Bocimar, S.A. v. Century Insurance Co. of Canada (1984), 53 N.R. 383 (F.C.A.), rev"d on other grounds (1987), 1 S.C.R. 1247; See also Capital Life Insurance Co. v. Canada (F.C.A.) (1988), N.R. (153),  2 C.T.C. 101, 88 D.T.C. 6352 (F.C.A.)