Saturday, October 20, 2012

Remand on Infringement Includes Factual Findings

Corlac Inc v Weatherford Canada Ltd 2012 FCA 261 Dawson JA: Nadon, Stratas JJA remanding 2012 FC 76 Phelan J

This decision is a second attempt by the FCA to have Phelan J clarify his reasoning on one issue in the Corlac v Weatherford litigation. The patent at issue relates to a seal assembly for use in oil well pumps. In Weatherford v Corlac 2010 FC 602, Phelan J held claims to the assembly itself to be infringed by Corlac, which sold seal assemblies. Claim 17 was to a method of detecting and restraining oil leaks using that assembly. While Corlac did not practice the infringing method, Corlac sold the assemblies with instruction manuals which, according to Weatherford’s expert, taught the practice described in claim 17 [175]. Phelan J held claim 17 to be infringed, but his reasoning on this point was brief and not entirely clear: see [199]. On appeal, 2011 FCA 228, a decision known primarily for its treatment of fraud on the patent office, the FCA affirmed Phelan J except in relation to claim 17. The FCA held that “the judge's reasons do not provide for meaningful appellate review” and consequently, “I would return the issue of infringement of claim 17, that is inducement, to the judge to be determined in accordance with the established test” [171, emphasis added].

On remand, in 2012 FC 76, Phelan J addressed each of the legal elements of the three-part test for inducement. However, Phelan J did not revisit a crucial factual issue, holding that it was rea judicata [6]. On appeal of that decision, in 2012 FCA 261, the FCA held that it had remanded the entire "issue of infringement of claim 17" to Phelan J, and "the issue" includes the factual issue. The FCA also pointed out that in his original reasons, Phelan J had never explicitly accepted the evidence of Weatherford’s expert: “At best, such a finding is implicit in the Judge’s finding of infringement” [36]. The FCA also pointed out that in its original decision it had never accepted this implicit factual finding; it merely pointed out how Phelan J had determined the point [33].

The FCA’s reasoning is logical. With that said, I understand why Phelan J did not address the factual issue in his original decision. While the FCA did explicitly remand “the issue of infringement," the FCA focused primarily on the legal test, and, as the FCA pointed out, the factual finding was implicit in Phelan J’s original decision. And since that factual finding was indeed implicit in his original determination, it would be surprising if his determination were to change now that he will be required to make it explicitly.

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