Wednesday, November 9, 2011

The Improver Questions Resurrected

Hollick Solar Systems Ltd v Matrix Energy Inc 2011 FC 1213, Scott J

In his first patent decision, Scott J has walked right into the morass of the essential elements doctrine. Moreover, he applied the three question test approved in Free World Trust 2000 SCC 66 at [55]-[56]. These questions are normally known as the Improver questions, after the case in which Hoffmann J first set out these questions, but they might now be known as the Improver “mangle,” the term used by Lord Hoffmann when, in Kirin-Amgen Inc. v Hoechst Marion Roussel Ltd [2004] UKHL 46 at [52], he repudiated his own test. The Improver questions were applied in a few cases soon after Free World Trust, but have been almost entirely ignored by the Federal Courts in recent years. (The last case I know to apply them was Halford Seed Hawk 2004 FC 88 at [140]ff, aff’d 2006 FCA 275, though with some criticism at [14]-[15].)

The invention at issue in Hollick v Matrix was a system for solar preheating of building ventilation air. It is the last in the series of three patents granted to the same inventor. As I read the patents, in the first, 1,196,825, the inventive concept was to pre-heat incoming ventilation air by passing that air through a solar panel on the sunny wall of the building, thereby capturing both solar heat and waste heat escaping through the wall of the building. The second, US Patent 4,774,932, is for an improved collector panel with vertical corrugations. This patent at issue in this case, 1,326,619, is for a further improvement to the invention disclosed in the US patent. It divides the vertical corrugations into a series of offset panels in order to improve efficiency by preserving laminar air flow. All of these patents specify that the heated air is removed into the building through a plenum at “the top” of the panels. The defendant’s device in this case placed this air intake at the bottom of the panel. The question therefore was whether the location of the air intake at the top of the panel was an essential element.

The first Improver question asks whether the “variant” – the defendant’s device – has “a material effect on the way the invention works.” The problem with this question is deciding what constitutes “the invention.” As Lord Hoffmann pointed out in Kirin-Amgen at [66]

That is a difficult question to put through the mangle of the [Improver] questions because the answer depends entirely upon what you think the invention is. Once you have decided that question, the [Improver] questions answer themselves.

If “the invention” means “the invention as claimed” then the first Improver question becomes circular, as any variant will have a material effect. I would argue that the best reading of this first question is that it asks whether the variant has a material effect on the way the inventive concept works, as opposed to the invention as claimed. In other words, it asks the old question of whether the defendant took the “pith and marrow” of the invention. The second and third Improver questions then discipline this broader inquiry.

The plaintiffs in this case argued in effect that the defendant’s device did take the inventive concept, and used a less efficient plenum simply to avoid infringement [58]. This accords with my reading of the patents, though Scott J made no finding as to whether the inventive concept had been taken, as he considered the correct starting point to be the invention as claimed: “The criteria is not whether the variant improves the performance of the invention but rather does it have a significant effect on how the device functions, be it positive or negative” [59]. The evidence in Hollick v Matrix established that placement at the top is the most efficient location for the building air intake because the heated air naturally rises. It was also established that the defendant’s placement at the bottom reduced the efficiency of the defendant’s device as compared with the claimed invention. Since the defendant’s device worked differently from the invention as claimed, Scott J held that the location of the air intake was taken to be essential and there was no infringement. If the question was whether the placement of the air intake at the bottom of the panel had a material effect on the inventive concept, namely pre-heating air with a series of offset corrugated panels, the question might have been answered in the negative, and it would have been necessary to go on to the second and third Improver questions to determine infringement. Thus whether “the invention” in the first Improver question means “the invention as claimed” or “the inventive concept” can determine whether the element in question is essential.

The result in Hollick v Matrix may be contrasted with the decision of Thorson P. in McPhar Engineering Co. of Canada v. Sharpe Instruments Ltd., [1956 - 60] Ex CR 467, 35 CPR 105, in which the defendants’ variant similarly used a less efficient method for implementing a necessary but ancillary aspect of the invention. In a passage quoted with approval by the SCC in Whirlpool 2000 SCC 67 at [46], Thorson P stated that

Thus it is established law that if a person takes the substance of an invention he is guilty of infringement and it does not matter whether he omits a feature that is not essential to it or substitutes an equivalent for it.

He therefore held that the defendants’ device infringed. For a more detailed discussion of McPhar see my article “The Essential Elements Doctrine in Patent Infringement: Free World and Whirlpool in Light of Kirin-Amgen,” 22 I.P.J. 223 - 250 (2011) ( here for Westlaw link; here for SSRN draft).

While my own view is that Scott J’s approach is not the best interpretation of the Improver questions, the correct interpretation of the Improver questions is by no means clear, as Lord Hoffmann acknowledged when he called them a “mangle.” I have an almost complete draft article suggesting how they might be restated in a more helpful fashion, which I had abandoned since the questions have seen so little use. If Scott J’s decision marks a renewed interest in the Improver questions, I may revisit that article.

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