Friday, March 29, 2019

First Person & Second Person Requires Control at a Minimum and Does Not Include Additional Persons Carrying out Common Design

Genentech, Inc v Celltrion Healthcare Co, Ltd 2019 FC 293 Aylen CMJ
            HERZUMA HERCEPTIN / NOC

In this motion the plaintiffs Genentech, Inc. and Hoffmann-La Roche Ltd sought to join additional defendants and amend their statement of claim in this NOC s 6(1) action. While I don’t usually blog on procedural decisions, it raises a few interesting issues, which I will note, without engaging in a detailed analysis.

Celltrion Healthcare Co, Ltd (CTHC) is seeking to bring HERZUMA to market as a biosimilar to HERCEPTIN. CTHC filed the NDSs and served the NOAs at issue [33]. The plaintiffs alleged that CTHC entered into an exclusive partnership to commercialize HERZUMA under a Business Collaboration Agreement, with various other parties (including eg Celltrion Inc and Teva Canada Ltd) who would collectively be responsible for manufacturing, importing, marketing, and seeking regulatory approval for HERZUMA [33]. The plaintiffs sought to join these “Additional Defendants.”

The first issue was whether the Regulations permit a section 6(1) action to be brought against a person who is not a “second person” [14]. Aylen CMJ held that the answer is clearly no [24]. Her reasoning was based both on a plain reading of the regulations, which create a statutory cause of action against a second person only [15]; and on a purposive interpretation of the provision, noting that “the limitation on the claims that may be brought within the context of the Regulations is driven by a critical consideration – namely, the speed by which such actions must be determined” [19].

Given the conclusion that non-second persons cannot be joined, the next question was whether these Additional Defendants should properly be considered as second persons. This raised the question of the correct interpretation of “second person” and whether the proposed pleadings brought the Additional Defendants within that definition [24].

On the legal point, the plaintiffs had asserted that the definition of second persons is flexible enough to include the Additional Defendants by virtue of the common law concepts of agency, corporate control, inducement and common design [34]. Aylen CMJ reviewed a number of cases considering whether “control” for the purposes of being a first person under s.8 of the PMNOC can only mean “control” in the traditional sense of corporate structure, or whether “control” can have a broader meaning [26]-[32]. She concluded that the scope of the definition of a “first person” remains an unsettled issue [32], and by parallel reasoning, it remained possible that a person other than the person who filed the NDS might be considered a second person using a similar control test [32].

However, she held that the case law, while leaving the door open to a broader interpretation of the proper scope of a "first person," "is premised on the notion that the first person is controlled by the proposed additional first person, whether by virtue of corporate organization or some other means” [34]. The proposed pleading did not allege control, but merely that the parties were carrying out a common design. Aylen CMJ held that this could not satisfy the requirement for control, and hence sufficient material facts had not been pleaded to support an allegation that the Additional Defendants fell within the definition of a “second person,” even under the broader interpretation that remains an open question in the case law.

She did, however, allow the plaintiffs to plead infringement by common design against CTHC itself [38], on the view that the concept of infringement by common design, or acting in concert, has been recognized in Canadian law, even though it has not been applied in the context of a patent infringement action, and the pleading should therefore not be struck on a pleadings motion [38]-[43]. She also held that when alleging infringement by common design, it was not necessary to join all the potential joint tortfeasors in order to allow the action to proceed against one of them [44].

Wednesday, March 27, 2019

Article on Contributory Infringement in Canada

I have a new article on Contributory Infringement in Canadian Law forthcoming in the Canadian Intellectual Property Review. Here is the abstract:

Contributory infringement arises when a party knowingly supplies a direct infringer with a product especially adapted for use in a patented invention. Canadian courts have regularly stated that there is no liability for contributory infringement in Canadian law, in the absence of inducement. This article shows that there are nonetheless few cases actually refusing to impose liability on a contributory infringer, and none at the appellate level. The article argues that the reasoning and results in almost all the leading cases support a rule that supply of a product especially adapted to infringe, and with no substantial non-infringing use, constitutes indirect infringement, even in the absence of active inducement. The current shape of the law is a result of a misreading of the early leading case of The Copeland-Chatterson Company Ltd v Hatton, in combination with the problematic decision in Slater Steel Industries Ltd v R. Payer Co, which is the only prominent case refusing to impose liability in such circumstances. Slater Steel has been confined to its facts in both subsequent Court of Appeal decisions to address it, and this article argues that Slater Steel was wrongly decided on its facts. The article concludes that it is open to the courts to recognize that liability for contributory infringement may be imposed in Canadian law.

Friday, March 22, 2019

Geogrid Patent Valid but not Infringed

Tensar Technologies Ltd v. Enviro-Pro Geosynthetics Ltd 2019 FC 277 Manson J
            2,491,858 / multiaxial geogrids

Geogrids are a heavy duty plastic mesh used for applications such as holding rocks and fill in place in civil engineering projects. The 858 patent relates to multiaxial geogrids, which have a hexagonal rather than rectangular mesh pattern. In this decision Manson J held that Tensar’s 858 patent relating to was valid but not infringed. The decision turned entirely on the facts.



Geogrids were an improvement over the prior art, which primarily consisted of woven or knitted geosynthetics, like a heavy duty landscape fabric. The first generation geogrids had a primarily rectangular form. The multiaxial form had a number of advantages, such as strength in more directions [47], and defendant, Enviro-Pro, lost market share to Tensar soon after Tensar introduced its multiaxial product [61]. Enviro-Pro then reached out to its Chinese supplier of geogrids, TMP, to see if it could make a competing product [62]. In order to avoid infringing Tensar’s patent, Enviro-Pro instructed TMP to make the product according to the prior art Wyckoff patent [63]. Before launch, Enviro-Pro even asked an independent consultant to check a sample of the TMP product to make sure it was manufactured entirely in accordance with the Wyckoff patent. The consultant had been provided with the Wyckoff patent, but not with a sample of Enviro-Pro’s product, and it seems that he did not appreciate the significance of some of the fine points (or even some of the basic points) of the patent [64]. This seems like an instance of failing to consider “where the shoe pinches”.

Because it had taken these steps, Enviro-Pro tried to run a Gillette defence, on the basis that it had manufactured its product in accordance with the prior art. Unfortunately, while TMP may have been instructed to follow the Wyckoff patent, the evidence did not establish it had actually done so [139]. There were significant differences between the teaching of the Wyckoff patent and the material made by TMP and sold by Enviro-Pro [137]. Accordingly, the Gillette defence failed [140].

On claim construction there was one contentious term, “continuous orientation.” Manson J did not entirely accept the evidence of either expert in coming to his conclusion [100]-[120]. This simply illustrates the well-established rule that claim construction is a matter for the Court [70].

On obviousness, Manson J found that the prior art patents all had a significant difference from the teachings of the 858 patent [150]. Manson J took into account the need to avoid hindsight, as well as the actual course of conduct – which had required considerable experimentation by an experienced engineer who brought a novel perspective to bear, having previously designed military armour – and concluded that the differences would not have been obvious to a posita [162].

While the patentee prevailed on validity, Manson J held that Tensar had failed to establish infringement [173-74]. This was not a case in which non-infringement was established. Rather, Manson J had concluded that the element of continuous orientation required a predominant or substantial degree of uninterrupted molecular orientation in a specified area of the grid, and the testing methods used by the patentee where simply incapable of establishing the degree or direction of orientation [171]. There being no evidence to establish infringement, the defendant prevailed on the burden of proof [172]. The defendant also tendered evidence of non-infringement, but that evidence was also deficient [184], [188]. While Manson J considered that the defendant’s evidence offered “some limited additional support” for the conclusion of non-infringement [188], the case was decided primarily on the basis of lack of evidence of infringement.

Thursday, March 14, 2019

Routine Correction of Inventorship

General Transport Equipment Pty Ltd v Canada (Attorney General) 2019 FC 309 McDonald J
            2,639,371

In the third decision released this week that raises no interesting issues of law, McDonald J granted a routine uncontested application, pursuant to s 52, to amend the records to add a co-inventor to the 371 patent.

Controlled Release Dosage Form Patent Not Invalid on the Facts

Valeant Canada LP/Valeant Canada SEC v Generic Partners Canada Inc 2019 FC 253
Fothergill J
            2,412,671 / NOC

Valeant v Generic Partners is the second case released this week, and the second to raise no interesting issues of law. Valeant’s 671 patent relates to a controlled release dosage form for drugs requiring gastric retention. One known mechanism for controlled release was a polymeric matrix which swells in the stomach so the dose cannot exit into the small intestine [2]. It turns out that some of these forms, particularly those with an elongated shape for easy swallowing, could nonetheless partially exit if the pill became lodged with the long dimension protruding into the pylorus (the opening to the small intestine) [3]. The 671 patent comprises a swellable dosage form with a particular shape that avoids this problem.

In this NOC proceeding, Generic Partners conceded infringement of several claims, and attacked the validity of the 671 patent on the basis of anticipation, obviousness, double patenting and insufficiency. The main attacks were anticipation and obviousness. These both failed on the facts, essentially because nothing in the prior art suggested that shape was a central component of gastric retention [71]-[72], [106]-[108]. Rejection of the double patenting attack followed directly from the conclusion on anticipation [111], and Fothergill J easily dismissed the insufficiency allegation [116].

Tuesday, March 12, 2019

ATV Track Assemblies Patents Invalid on the Facts

Camso Inc v Soucy International Inc 2019 FC 255 Locke J
2,372,949 / 2,388,294 / 2,822,562 / 2,825,509 / ATV Track Assemblies

Camso’s patents at issue in this case concerned ATV track assemblies. In a decision which turned on claim construction and the facts, Locke J held all the claims in issue (almost 250 different claims in three patents) to be invalid for anticipation and/or obviousness [442]. 

The aim of the invention was to provide an ATV track assembly that would be easy to steer especially on hard ground. This was accomplished by reducing the size of the track belt’s contact area with the ground, both longitudinally (along the length of the track) and transversely (across its width) [5]. A smaller contact patch makes it easier to pivot the track. The contact patch was reduced longitudinally by arranging the assembly so that the bottom run of the track belt is slightly curved from front to back, “so that it rises from the ground ahead of and behind the area of ground contact which bears the weight of the assembly and the ATV” [6]. It was reduced transversely by using rodless tracks which omitted the usual transverse stiffening rods [8].

Soucy had focused its defence on non-infringement, and consequently had argued for a narrow scope of claims, conceding the validity of many claims. The patentee, Camso, had argued for broader claim construction, in order to establish infringement: [330-32]. Camso largely prevailed on claim construction, but its victory was Pyrrhic, as the result was that the broad claims were invalid. The rodless track patents were anticipated by an early kit sold by another track assembly maker. The kit had not been particularly successful – it was not clearly established that any had actually been sold [318] – but it had been publicly displayed and promoted, and any skilled person would have readily recognized that the tracks were rodless [319]. The curved track assembly patents were anticipated by one of the earliest track assemblies ever commercially sold [357-59]. In effect, the inventors had rediscovered features that had been used in some very early track assemblies and then abandoned. Some of the many claims had additional features that were not anticipated, but these variants were obvious over the same prior art, or some additional prior art.

Friday, March 1, 2019

What Does Actavis v Lilly Mean for Canadian Law?

I have a new article forthcoming in the Intellectual Property Journal, entitled “Protection Extending Beyond the Language of the Claim: What Does Actavis v Lilly Mean for Canadian Law?” The article will be published in two parts. Here is the abstract for Part I:

In its landmark decision in Actavis UK Ltd v Eli Lilly and Co, the UK Supreme Court held that the scope of protection afforded by a patent claim will sometimes “extend beyond” the meaning of the words of the claim, even when those words are read contextually. The Court also provided a structured approach to determining when extended protection is appropriate. This article considers what Actavis means for Canadian law. Part I argues that the Actavis approach represents a refinement of existing Canadian law, not a revolution. In the leading Supreme Court of Canada companion cases on claim construction, Free World Trust v √Člectro Sant√© Inc and Whirlpool Co v Camco Inc, the Court held that claim construction in Canadian law was, and always had been, based on purposive construction, including an identification of the essential elements of the claim. The extended protection of Actavis stems from the same recognition that omission of non-essential elements does not avoid infringement. Part II will argue that the Actavis approach is also sound as a matter of policy.