Wednesday, May 22, 2019

When Is Utility “Related to the Nature Of” the Invention?

Aux Sable Liquid Products LP v JL Energy Transportation Inc 2019 FC 581 Southcott J

Monday’s post dealt with the issue of what constitutes the state of the art for an obviousness attack, which was raised as a pure question of law. A number of other interesting legal issues were raised on the facts. This post provides an overview of the facts and discusses one such issue, namely what it means for utility to be “related to the nature of the subject-matter” of the invention.

The invention relates to the transportation of natural gas by pipeline. Finding ways to pump gas more efficiently, thereby using less energy, is evidently desirable. Natural gas is primarily methane, CH4, with one carbon atom. Heavier weight hydrocarbons, such as ethane and propane, are heavier, and so require more energy to transport, but they are also more compressible, which makes them easier to pump. The inventors of the 670 patent discovered that because of this tradeoff, it turns out that the right amount of heavier weight hydrocarbons can provide a net benefit, so the gas requires less energy to pump [5]-[6].

Ethane and propane are referred to as C2 and C3 hydrocarbons because they have two and three carbon atoms, respectively. The key parameter for determining the energy reduction is the “zMw product” (the product of the molecular weight (Mw) and the compressibility (z) [7]). Claim 1 of the 670 patent claims a method of transporting natural gas by adding sufficient C2 and C3 hydrocarbon so as to ensure the zMw product is lowered [51]. Claims 2-8 are dependent claims particularizing various parameters. All of these claims were held to be valid [2]. Claim 9 is to the gas mixture itself, specified in terms of temperature, pressure and hydrocarbon composition. Claim 10 is dependent with further particularization. Claims 9 and 10 do not include the two elements of adding C2 and/or C3 and evaluating zMw [52]-[54]. Both Claims 9 and 10 were held to be invalid for overbreadth, inutility, anticipation and non-patentable subject matter [2].

While the obviousness issue discussed in the last post related to Claims 1-8, most of the other interesting legal issues related to Claims 9-10. One of these concerns utility. On all these points, nothing turns on the difference between Claims 9 and 10, so I will refer to Claim 9. Recall that Aux Sable, the accused infringer, is the plaintiff in this impeachment action, while JL Energy, the patentee, is the defendant [10].

Claim 9 claims “a gas mixture, for use in a pipeline,” with specified ranges of various gases, in particular “from 68 to 92% by volume of methane, from 6 to 35% by volume of ethane, from 0 to 9% by volume of propane” [50]. Ranges for other gases, as well as temperature and pressure ranges were also specified. First, “JL Energy acknowledges that if there is any combination of composition, pressure and temperature, within the ranges prescribed by either of these claims, that lacks that scintilla of utility, then the claim is invalid” [81]. I’m not sure such a concession was warranted, particularly if the inoperable embodiments could have been identified without undue effort: see here, here and here. But since it was conceded, I will accept the point for the remainder of the discussion, as did Southcott J. Moreover, because of this concession, the facts were not developed in detail, and it may be that there was a substantial range which did not deliver benefits, or that identifying the beneficial combinations would have been unduly difficult.

Recall that the aim of the 670 patent was improved efficiency in transportation of gas in pipelines. The unchallenged evidence of Aux Sables established that the mixture specified in Claim 9 did not have improved efficiency across the full range [82]. JL Energy argued that this does not matter, and that utility is established if the claimed gas mixture is capable of being transported by pipeline [83], which it clearly was. The question then, is whether, to establish utility, it is enough that the specified mixture was capable of being transported by pipeline, or was it required that the mixture had improved efficiency, at least to some modest degree.

As Southcott J noted [76], in AstraZeneca 2017 SCC 36 [53] the SCC held that only a scintilla of utility is required, but it must be a scintilla “related to the nature of the subject-matter” of the invention: “a proposed invention cannot be saved by an entirely unrelated use. It is not sufficient for an inventor seeking a patent for a machine to assert it is useful as a paperweight.”

The question then is whether usefulness in being capable of being pumped through a pipeline is related to the nature of the invention. Southcott J held not, on the view that “the subject matter of the invention . . . relates to the efficient transport of natural gas” [85]. JL Energy’s argument that the mere fact that the gas mixtures claimed are capable of being transported in a pipeline is sufficient “is not quite as extreme as submitting that an otherwise useless machine has utility as a paperweight (per paragraph 53 of AstraZeneca). However, in my view, it reaches in that direction” [87].

My intuition is Southcott J’s analysis is right, but the problem is a tricky one that raises some basic conceptual questions regarding “the nature of the invention” for the purposes of utility. It is now clear law that to be useful, the invention must have a scintilla of utility that is related to the nature of the invention. This raises two question: (1) how much is a “scintilla”? and (2) what is the nature of the invention? We have many cases exploring the first issue, but few exploring the second. In most cases in which the invention lacks utility, the only utility asserted clearly is related to the nature of the invention, and utility is lacking because it has not even a scintilla of such utility. So, with pharmaceuticals, the question is whether the drug is useful in treating a disease. In Wandscheer [1948] SCR 1, the question was whether the snow-blower could actually throw snow. These cases raise the question of how much is a “scintilla”.

The problem here concerns branch (2), the nature of the invention. The gas mixture at issue, even if it did not deliver efficiency advantages, could certainly be pumped through a pipeline and burned at the other end. This is much more than a scintilla of utility – if that type of utility is relevant. The question of the nature of the utility is normally raised using hypothetical examples, such as using the invention as a paper weight, or a throw-away utility, such as using a complex invention as landfill. These examples make the basic point, but are so extreme as to be unhelpful when it comes to nuances. As Southcott J noted, this case is more difficult. Being pumped through a pipeline is much closer to the “nature of the invention” in this case than being used as a paperweight.

The “nature of the invention” should be given a purposive interpretation, consistent with the purpose of the utility requirement, which is to prevent speculative claiming [AstraZeneca 56]. This might suggest that the mixture should be held to lack utility if it does not deliver even a scintilla of efficiency improvement. Otherwise, a patentee might patent all sorts of novel gas mixtures, so long as they could actually be pumped through a pipeline, in the hopes that some of those mixtures would later prove to have some advantageous properties. On the other hand, perhaps it is enough that the new mixture gives “a useful choice”: Consolboard [1981] 1 SCR 504, 525. I must admit that I find the approach adopted in the seminal EPO decision in T 0939/92 AgrEvo, to be very intuitively appealing, at least on these facts. AgrEvo concerned claims to a genus of compounds, some of which, at least, were said to have herbicidal activity. However, it was not plausible that all the compounds in the genus would have the alleged herbicidal activity [2.2.2], and the Board held the claims invalid, not for lack of utility (industrial applicability), but for lack of an inventive step, on the view that the compounds which were not herbicidal were not an inventive solution to the problem of providing herbicidal compounds [2.7], but rather “a mere arbitrary choice” [2.5.3]. On the AgrEvo approach, the gas mixtures at issue here would be considered to have utility, because they could be pumped through the pipeline, but would nonetheless be invalid, as being an arbitrary selection. But I won’t push this too far; maybe AgrEvo itself should have been decided on utility grounds.

I won’t pursue this further. For now, suffice it to say the facts raise a very nice example for considering what constitutes the nature of the invention for the purpose of utility.

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