Wednesday, August 26, 2015

Restrictive Interpretation of Materiality Requirement under S 53 Wilful Misleading

SNF Inc v Ciba Specialty Water Treatments Ltd, 2015 FC 997 Phelan J

Phelan J's decision holding Ciba’s patent invalid for obviousness turns entirely on its facts [195-96]. The main point of interest in the decision is his obiter discussion of the argument that the 581 patent was invalid under s 53 for wilfully misleading statements.

The 581 patent concerns a method of treating mine tailings. Tailings are commonly disposed of by pumping aqueous slurry to an open lagoon and allowing it to dewater. To limits the area occupied by the tailings, it is desirable to deposit them in multiple layers. This requires that the lower layers are sufficiently solid to support the material deposited on top. One way of speeding up the process of solidification or “rigidification” is to add a polymer to the slurry which helps bind the waste particles together. Such polymers were well known in the art.

Ciba’s 581 patent claimed a process of rigidifying the tailings by adding an aqueous solution of polymer to the fluid slurry during transfer [24]. A key piece of prior art was the Gallagher patent, WO-A-0192167, which was also owned by Ciba. The Gallagher patent claimed a process of rigidifying the tailings by adding a polymer to the fluid slurry during transfer. The Gallagher patent did not anticipate the 581 patent because its disclosure focused on adding the polymer in powdered form rather than in aqueous form [169]. Nonetheless, the Gallagher patent evidently presented a validity problem for Ciba’s 581 patent, if not on anticipation, then on obviousness, as the 581 patent merely substituted an aqueous solution for powder [222] and both forms were well known in the prior art. (In the end, the 581 patent was held invalid over the common general knowledge alone, as it was not established that the Gallagher patent was part of the cgk.) Ciba, as the owner of the Gallagher patent, was well aware of this problem when the 581 application was filed.

The 581 patent directly addressed the Gallagher patent, stating (581 p6, [223]) that:

the importance of using particles of water soluble polymer is emphasised and it is stated [in the Gallagher patent] that the use of aqueous solutions of the dissolved polymer would be ineffective.

The s 53 attack was based primarily on this statement.

As summarized by Phelan J, a patent is invalid under s 53 if the impugned statement is [216]:

a) untrue;
b) material;
c) made in the drafting of the Patent with wilful intent to mislead; and,
d) the statement would be likely to mislead the Skilled Person.

In this case the statement were untrue – there was no statement to that effect in the Gallagher patent [224-25]. The statements were known by Ciba to be untrue [222] and the statement was made in order to make it seem as though the 581 invention was not obvious over Gallagher when Ciba knew it was an obvious modification to the Gallagher patent [225].

Nonetheless, the s 53 attack failed on the materiality requirement:

[229] Ciba is saved only by the issue of materiality. A statement is material if it affects how the public makes use of the invention taught by the 581 Patent (see Procter & Gamble Co v Bristol-Myers Ltd, [1978] FCJ No 812 (QL) at para 37, 39 CPR (2d) 145; Weatherford Canada Ltd v Corlac Inc, 2011 FCA 228, 95 CPR (4th) 101). 
    (my emphasis)

This is a very narrow definition of materiality which seems to make materiality almost co-extensive with sufficiency. The sources cited by Phelan J do not support such a narrow definition. The relevant statement from Procter & Gamble is that “it is really immaterial to the public whether the applicant is the inventor or one of two joint inventors as this does not got to the term or to the substance of the invention nor even to the entitlement.” To my mind this supports a much broader definition of materiality, to the effect that a statement is material if it would likely have affected the examiner’s decision to allow the patent, or at least to whom the patent should be granted. In Corlac v Weatherford 2011 FCA 228, (blogged here) in holding that the misstatement at issue was not material, the FCA did state that “Finally, the appellants have not demonstrated that inventorship is somehow relevant to the public's use of the invention in this case” [129], but this was a concluding remark in a long discussion citing a variety of factors all pointing to the same conclusion. Consequently, Phalen J’s definition is unlikely to become widely accepted as definitive, particularly given that the discussion of s 53 was expressly obiter [202].


  1. My understanding is that Canadian courts have gone back and forth to some extent on the question of how closely that want to come to adopting something like the U.S. inequitable conduct doctrine (which to my knowledge has no clear counterpart anywhere else in the world). Is that correct?

  2. Yes, more or less. Our s 53 corresponds roughly to the US inequitable conduct doctrine, in that it provides that a patent is void if "any material allegation is untrue and was wilfully made for the purpose of misleading." However, it's still not really clear what it means for an allegation to be "material" (material to what?). Most of the cases have concerned incorrect statements of inventorship, and the courts have gone both ways on this particular issue. The current leading decision Corlac (I added a link to my post on it), held on the facts the that was not material, and signaled a generally cautious approach to the whole provision. S 53 certainly is not being used as aggressively as inequitable conduct prior to Therasense - but the provision is still part of the Act, and it must mean something.