Monday, May 3, 2021

Claim Construction and Inducement Potpourri

Guest Tek Interactive Entertainment Ltd v Nomadix Inc 2021 FC 276 McHaffie J

2,600,760 / 2,750,345

In Guest Tek v Nomadix McHaffie J held Guest Tek’s 760 and 345 patents to be valid but not infringed [284], [437], in a very careful—and long–decision that turned almost entirely on claim construction and the facts. One thing that jumped out is a stylistic innovation, namely the use of italics to indicate claim elements: for example “In my view, the POSITA would understand the notion of user load to be a function of the number of current users and/or their demand” [340]. I love it. For whatever reason, the use of italics rather than more traditional quotation makes the sentences flow more naturally while still retaining all the same information. It also means that quotation marks are reserved for quotations from the evidence, which eliminates ambiguity when a paragraph quotes the experts about the meaning of specific claim terms.

Turning to the substance, Guest Tek and Nomadix each provide network gateway equipment and supporting software to hotels, which allows multiple hotel guests to access the internet through the gateway provided by the hotel [14]. The patented technology relates to network security and bandwidth management. I must say that after reading pharma cases for years, I found the technology at issue in this case a bit difficult to follow. McHaffie J’s decision generally simply applied established law, apart from the points discussed in Friday’s post, but a few points of some interest were raised in respect of claim construction and inducing infringement. The validity attacks on both patents do not appear to have been pursued very vigorously. It seems that Nomadix’s stronger arguments were addressed to the scenario where Guest Tek had prevailed on claim construction and infringement.

Claim Construction

Friday’s post discussed McHaffie J’s conclusion that recourse to the disclosure is always permissible in claim construction, not just when the claim term is ambiguous when read in isolation. However, this holding did not ultimately affect the analysis: there were two cases where reference to the disclosure was necessary to resolve an ambiguity, and reference to the disclosure otherwise simply confirmed the construction arrived at from the claims alone [48].

McHaffie J’s analysis otherwise applied established principles to the facts, but there are a few points of passing interest.

Claim element redundancy

McHaffie J noted that the principle against redundancy is typically applied as between claims (ie, to avoid claim redundancy) “but in my view it has some value in assessing redundancy of elements within a claim” [150]. I don’t think I’ve seen that point made before; it makes sense to me. On the facts, he nonetheless ultimately preferred a reasoning that resulted in claim element redundancy [150]; this is consistent with the general point that the principle against redundancy is an aid to construction and not a strict rule of law.

“First” and “second” distinguish rather than sequence

Nomadix had argued that the reference to “first packets” and “second packets” were used to indicate the sequence of in which the packets were sent. McHaffie J rejected this, holding that the cases “confirm that the terms ‘first’ and ‘second’ are used in the practice of patent drafting as a means of distinguishing elements rather than necessarily sequencing them” [100]. This is not very surprising (and of course there may be patents where the terms are used to indicate sequence), but McHaffie J’s discussion is a good citation on this point if one is needed.

Constructions making infringement impossible are to be avoided

McHaffie J held that a claim should not normally be construed so that no real-world product could possibly infringe [133], [135].

Balance between text and purpose

McHaffie J noted that claim construction requires “a balance between two evocative terms well known in patent law: the Court should construe a patent with ‘judicial anxiety’ to support a useful invention, but if the inventor has created troublesome limitations in the claims, this is a ‘self-inflicted wound’ the Court will not cure” [50]. The decision provided an nice illustration of this balance; at one point McHaffie J adopted a purposive construction, looking to a function of the device to clarify the meaning of an ambiguous term [188], but at the same time, when another element was clear on the text, he hewed to it, even though that might have resulted in a self-inflicted wound [166]– [167].


Guest Tek argued that Nomdix induced infringement of the 760 by hotels in Canada, and did not plead direct infringement [202]. The established law of inducement has a three-prong test Corlac 2011 FCA 228 [162], quoted at [56]:

First, the act of infringement must have been completed by the direct infringer. Second, the completion of the acts of infringement must be influenced by the acts of the alleged inducer to the point that, without the influence, direct infringement would not take place. Third, the influence must knowingly be exercised by the inducer, that is, the inducer knows that this influence will result in the completion of the act of infringement.

Ultimately, the inducement argument failed on the first step, as Guest Tek did not establish direct infringement by any Canadian hotel using a Nomadix gateway [255]. Guest Tek argued that direct infringement occurred when a Nomadix gateway is connected to a wireless access point in a network operated by a hotel, but Guest Tek did not call any witnesses from Canadian hotels, or from Nomadix resellers in Canada, to speak to network configuration in Canadian hotels. Instead, Guest Tek relied primarily on the functionality of the Nomadix gateway itself [204]. Ultimately, as I understand it, Guest Tek at most established that it was possible to configure a Nomadix device so that it would infringe, but there was no evidence that it had actually been configured to infringe in any hotel in Canada: see eg [227], [229]. (There are however, a couple of paragraphs that might suggest that the Nomadix gateway could not be configured to infringe: see eg [232], [234]. I’m sure the point would be clear if I understood the technology a bit better.) In any event, whether or not it could be configured to infringe, non-infringing configurations are certainly possible and apparently quite normal. This conclusion followed in part from claim construction; presumably Guest Tek would have had a stronger argument on direct infringement based on functionality alone if it had prevailed on some of the key claim construction issues. (Though I have to admit I didn’t go back to reverse engineer the arguments to be sure.)

Test for causation at the second branch

McHaffie J accepted that the second branch requires a “but for” test for inducement [58]. While that is certainly the standard articulation of the test, in a draft article, “Is 'But For' Causation Necessary to Establish Inducement?” available on SSRN, I have argued that a material contribution test for causation should be used at the second stage, though “but for” causation is still required to establish damages. Given McHaffie J’s holding on direct infringement, this point did not arise. Moreover, McHaffie J held that Guest Tek “has not established that Nomadix influenced Canadian hotels to configure their wireless access nodes in this way or any particular way” [245], [247], [248]. Consequently, inducement would not be established even on the material contribution test that I proposed in my article; that test comes into play, for example, where the defendant had clearly instructed the direct infringer to use the product so as to infringe, but it is not clear whether the direct infringer paid any attention to those instructions. That is, my argument is that inducement sufficient to support injunctive relief should be established if the indirect party sold a product along with instructions to infringe, and the direct infringer did in fact infringe, whether or not the direct infringer read the instructions. The effect would be that an indirect party could sell a product that could be used to infringe, but would not be allowed to provide instructions to infringe. Damages would still require “but for” causation, not as a matter of the test for inducement, but as a matter of the test for damages.

Contributory infringement

McHaffie J was also kind enough to refer to my article Contributory Infringement in Canadian Law (2020) 35 CIPR 10 (draft version here). In that article, I noted that Canadian courts have consistently expressly said that there is no liability for contributory infringement—see eg MacLennan v Produits Gilbert 2008 FCA 35 [33], but I argued that nonetheless, 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 exception is Slater Steel (1968), 55 CPR 61 (Ex Ct), which I argued was wrongly decided). McHaffie J remarked while my article was interesting, he agreed with Nomadix “that the FCA has confirmed ‘contributory infringement’ is not recognized as a cause of action in Canadian law,” citing Nycomed 2012 FCA 195 [3]. Now that’s certainly true in terms of express statements of the law; my argument is that it would be open to the FCA to recognize contributory infringement in light of the reasoning and results in the leading cases; but given the express statements of the law, such as that in Nycomed, it would probably be up to the FCA to recognize the point.

In any event, the issue didn’t arise in this case. The issue of contributory infringement arises when the product sold is not in itself patented, but is especially adapted to infringe; the question is whether indirect infringement can be established by mere sale of a product that “cannot be used for any other purpose,” as the FCA put it in MacLennan, even in the absence of a separate act of inducement. As noted above, in this case the inducement allegation failed because Guest Tek did not even establish direct infringement: “As the evidence does not establish Nomadix influenced Canadian hotels with respect to these issues, it equally does not establish any direct infringement would not have occurred but for that influence” [250]. The Nomadix gateway was clearly not a product especially adapted to infringe, or that could not be used for any other purpose; non-infringing configurations were possible and normal. Therefore the issue of contributory infringement does not arise, and it would have made no difference to the outcome or the reasoning if McHaffie J had accepted my argument.


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