Thursday, October 3, 2013

Line of Reasoning Supporting Sound Prediction Must Be Disclosed in the Patent

Eurocopter v. Bell Helicopter Textron Canada Limitée 2013 FCA 219 Mainville JA: Noël, Trudel JJA aff’g 2012 FC 113 Martineau J

The doctrine of sound prediction of utility is routinely applied in the context of pharmaceutical and chemical inventions, but rarely – perhaps never, before Eurocopter – applied to a mechanical invention. Nonetheless, the FCA Eurocopter decision is a significant development in the law of sound prediction, which affirms and emphasizes what I consider to be the most problematic aspects of the doctrine.

Given the novelty of applying sound prediction in the mechanical context, Eurocopter argued that the doctrine doesn’t apply to mechanical inventions at all [144]. The FCA rejected this, on the ground that there is no reason in principle why the doctrine should not apply [146]. It may generally be easier to establish demonstrate utility in the context of mechanical inventions, but I cannot think of any reason why a mechanical patentee should be precluded from establishing utility on the basis of sound prediction if it cannot establish demonstrated utility. As Snider J noted in Imatinib 2013 FC 141 [164], sound prediction “is a way of showing that an invention is useful when the invention has not been directly demonstrated to work. Its introduction into Canadian law was not, as I understand it, to give a crushing hammer to those who challenge patents.” (See more here.)

Why then was Eurocopter arguing that the doctrine does not apply? The answer is that sound prediction has become a potent weapon for attacking patents, even though Snider J was right to say that it was not originally intended as such. The reason for this is the requirement that the factual basis for sound prediction must be disclosed in the patent if, and only if, utility is based on sound prediction. This point has previously been affirmed by the FCA in the Raloxifene 2009 FCA 97 [15] and Atomoxetine 2011 FCA 220 [46-47] decisions. The consequence is to draw a sharp distinction between demonstrated utility and sound prediction, with more stringent requirements for the latter. I have argued that this distinction is inconsistent with the Act, as there is no statutory basis for this distinction; there is only one utility requirement in the Act, not two requirements with two different criteria.. Again, as Snider J stated in Imatinib “Sound prediction is not a free-standing statutory requirement” [164].

In her concurrence in Clopidogrel 2013 FCA 186, Gauthier J indicated that she would be ready to reconsider the factual basis doctrine. In my post on her reasons, I queried whether this might signal a broader change of attitude at the FCA. I concluded that “despite Gauthier J's remarks, the requirement to disclose the factual basis for a sound prediction remains the law, and it seems to me very unlikely that the FCA will reverse itself on this point.” That prediction has been fully borne out in Eurocopter, in which the FCA has re-affirmed and applied the factual basis requirement:

[149] The difficulty faced by Eurocopter . . . lies in the fact that if it accepts that a mathematical prediction may not be a demonstration of utility, it must then meet the legal requirements of the doctrine of sound prediction which, contrary to the doctrine of demonstrated utility, requires (1) a factual basis for the prediction; (2) an articulate and sound line of reasoning from which the desired result can be inferred from the factual basis; and (3) proper disclosure.

Thus the FCA has re-affirmed that the doctrine of sound prediction is fundamentally different from that of demonstrated utility. Notwithstanding the Act, there are two distinct utility doctrines. The key difference between demonstrated utility and sound prediction is the disclosure requirement. Must the factual basis and line of reasoning supporting sound prediction be disclosed in the patent itself, or is it enough that they can be established on the basis of pre-filing evidence? This is addressed in the following passage:

[152] In my opinion, the factual basis, the line of reasoning and the level of disclosure required by the doctrine of sound prediction are to be assessed as a function of the knowledge that the skilled person would have to base that prediction on, and as a function of what that skilled person would understand as a logical line of reasoning leading to the utility of the invention.

[153] Where the factual basis can be found in scientifically accepted laws or principles or in information forming part of the common general knowledge of the skilled person, then no disclosure of such factual basis may be required in the specification. On the other hand, where the factual basis is reliant on data which does not form part of the common general knowledge, then disclosure in the specification may indeed be required to support a sound prediction.

Here, the FCA is re-affirming that the factual basis must be disclosed in the specification itself, when it would not be part of the common general knowledge. This latter caveat is not significant in practice, as the litigated cases almost always turn on information that was not part of the cgk. The FCA has left a very slight wiggle room with the word “may,” but I don’t see this as holding out much hope. In [152] the FCA said that the bases for sound prediction “are” to be assessed as a function of the skilled person’s knowledge. I would understand “may” in [153] as leaving open the remote possibility that a skilled person’s knowledge may encompass information which is neither in the cgk or in the specification.

What about disclosure of the line of reasoning?

[154] As noted in the Manual of Patent Office Practice issued by the Canadian Patent Office (at paras. 12.08.04b and 12.08.04c), since a sound line of reasoning is directed to a skilled person, those elements of the doctrine of sound prediction that would be self-evident to that person in view of the common general knowledge need not be explicitly disclosed in the specification. The soundness of a line of reasoning can also be effectively assessed by asking whether the skilled person would accept the logic presented in the specification and derive from the sound prediction as a whole an expectation that the invention will provide the promised utility.

From this, in combination with [152], is it apparent that the line of reasoning must also be disclosed in the specification if it is not apparent to a skilled person on the basis of the cgk. While this conclusion has previously been implied (see 2010 FCA 197 [83]), previous cases have turned on disclosure of the factual basis, and the FCA has previously expressly stated the doctrine by reference to the factual basis specifically: see eg 2011 FCA 220 [47]; 2009 FCA 97 [15]. That the line of reasoning must also be disclosed in the specification follows logically for the reasons given in [152]. If we accept the heightened disclosure requirement for sound prediction in the first place, there is no reason to treat the line of reasoning differently from the factual basis; the question is whether the skilled person, based on the information available to them, namely the cgk and the specification, could make a sound prediction of utility. Rather than referring the "factual basis" requirement, I should start referring to the "disclosure requirement in sound prediction."

While the requirement to disclose the line of reasoning in the specification may not be a large step conceptually, it will have important practical ramifications. Most obviously, it provides another line of attack on patent validity. As importantly, it will further increase uncertainty related to patent validity. A line of reasoning is more nebulous than factual data, and the question as to what conclusions a posita would have drawn on the basis of the information available to her, is significantly more difficult than the question of what conclusions might properly be drawn from that same information. It will require a detailed inquiry into the mental capacity of a posita, which is similar to, though different from, from the characterization of the posita's inventive ingenuity. If the posita is a dullard in applying known theory to the facts disclosed in the specification, this disclosure requirement will be a potent weapon indeed.

On the issue of uncertainty, a major problem with the current state of the law is that when the relevant evidence is not found in the patent itself, the distinction between demonstrated utility and sound prediction will be crucial to the validity of the patent, even though the distinction is difficult to draw.  In Eurocopter, embodiments of the invention with a forward offset front cross piece had actually been built and tested, and utility was established based on demonstrated utility. However, no embodiments with a backward offset front cross piece had been built [142], and Eurocopter sought to establish utility through “a mathematical demonstration through calculations and mathematical modeling” [147]. (Recall that due to the application of the promise doctrine, the question was whether improved ground resonance was established.)

Mainville JA, for the FCA, stated that “It seems to me that calculations and mathematical modeling are, by their very essence, a prediction of a given utility” [148]. If this is right, it implies that only embodiments which have actually been built and tested can be demonstrated to have utility. Bell raised this argument in the context of the Claim 15, to the front offset version, arguing that Eurocopter should have been required to demonstrate the utility of that embodiment across all inclinations of the offset [135]. Since only some front offset embodiments had been tested, this would imply that the utility of all the other embodiments with a front offset different from those actually tested would be based on sound prediction, and so the utility across the scope of Claim 15 would be based on sound prediction, and the factual basis rule would kick in to defeat the claim. The FCA rejected this argument:

[136] There is no substance to these submissions, which completely ignore the factual findings of the Judge and the abundant evidence concerning the utility for improved ground resonance performance of the embodiment of the invention with the front cross piece offset forwards.

However, the evidence considered by Martineau J included “drawings, calculations and test results,” including “finite element analysis and stress calculations” [FC 353, my emphasis]. Thus calculations and mathematical modeling (finite element analysis), were clearly part of the factual basis for finding demonstrated utility of the front offset version. Perhaps the treatment of the forward and backward offset versions can be reconciled on the basis that so long as one embodiment within the claims has actually been tested, demonstrated utility across the scope of the claims can be based on calculations, while if no embodiment has been tested, the calculations are necessarily directed towards sound prediction. To my mind, this kind of convoluted distinction illustrates the demonstrates artificiality of the distinction between demonstrated utility and sound prediction; it is an epicycle on a fundamentally flawed analysis.

Indeed, Mainville JA immediately qualified his statement by saying “ I however recognize that there may be situations where a mathematical prediction of utility may be equivalent to a demonstration of utility, depending on the nature of the technology being mathematically modeled and the degree of reliability which experts would afford to such models for such purposes” [148] (and see similarly [147] “In the circumstances of this case, I disagree,” that demonstrated utility can be established by calculations). So, all we can say is that for embodiments that have not been specifically tested, it may or may not be possible to establish demonstrated utility on the basis of calculations. The distinction between demonstrated utility and sound prediction is crucial, but it could hardly be any less clear.

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