Wednesday, February 10, 2016

Failure to Disclosure Status as Public Servant Not Material for Purposes of s 53

Brown v Canada 2016 FCA 37 Boivin JA: Webb, de Montigny JJA rev’g 2014 FC 831 Kane J

Mr Brown was a member of the Canadian Forces Supplementary Reserve when he filed his application for the 748 patent. The patent related to technology used for decontamination and containment of biological and chemical hazards, which has military applications [9]-[10]. After the firm started by Mr Brown failed to win a contract with Public Works to supply related technology, Mr Brown launched infringement proceedings against the Crown and the winning bidder. The Crown defended by bringing a motion for summary judgement on the basis that (a) Mr Brown was a “public servant” as defined by s 2 of the Public Servants Inventions Act, and as such he was required by s 4(1)(c) of that Act to disclose that he is a public servant in his patent application; and (b) Mr Brown’s failure to make such a disclosure was an untrue material allegation which invalidated the 748 patent pursuant to s 53 of the Patent Act. In the Federal Court, Kane J held that Mr Brown was a public servant, and that the failure to make that disclosure was an untrue material allegation, but whether it was wilfully made for the purpose of misleading was a matter for trial. On appeal, the FCA held that Mr Brown was indeed a public servant, but the failure to disclose was not material to the Patent Act.

On the first issue, the FCA held that “for the purpose of the PSIA, all members of the Canadian Forces are ‘public servants’ whether they are in the Regular Force or the Reserve Force” [27]. While the English version of s 2 is somewhat ambiguous, saying that a public servant means an employee “and includes” a member of the Canadian Forces, the French version of s 2 is perfectly clear that public servant means an employee and a member of the Forces [25].

On the second issue, the FCA held that there was an “apparent conflict and lack of consistency” between the forms and regulations under the PSIA and the Patent Act, in that the former require disclosure of the public servant status and the latter do not. The FCA concluded that the Patent Act prevails and hence there was no requirement on the Patent Act for the applicant to disclose their status a public servant [45]. Moreover, even apart from this inconsistency, a reading of the two Acts together supports the conclusion that Parliament did not intend that a patent could be void for a failure to disclose public servant status [46], as penalties for failure to make that disclosure are provided by s 4(1) of the PSIA [48]. This second point strikes me as entirely compelling. Indeed, the contrary conclusion would be perverse. The purpose of the PSIA is to vest in the Crown inventions that are made by public servants: s 3. If the position advanced by the Crown was correct, then any public servant inventor could unilaterally deprive the Crown of a valid patent to which the Crown was entitled by law, simply by failing to disclose their status as a public servant. Yes, the sanction of invalidity would provide an incentive to disclose, but not a very strong one, since the inventor would not be entitled to the invention either way: if the inventor didn’t disclose, the inventor would run the risk that the patent would be held invalid, and if the inventor did disclose, the inventor would run the risk that the patent would be vested in the Crown. And in any event, the sanction of invalidity puts the victim and the wrongdoer together in front of the firing squad. The offences of s 11 of the PSIA, which are target the public servant, are a far more sensible sanction. I can’t help but think that there was a failure of communication between the Crown’s litigation team and those responsible for longer term policy.

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