Wednesday, February 2, 2022

Prior User Rights and English Law

Kobold Corporation v NCS Multistage Inc 2021 FC 1437 Zinn J

            2,919,561 / Bottomhole assembly

As outlined in last week’s post, this motion for summary judgment addresses the new prior user defence set out in s 56. The main operative provision, 56(1) provides that if a person, before the claim date, “committed an act that would otherwise constitute an infringement. . . it is not an infringement. . . if the person commits the same act on or after that claim date.” The key question is what it means for the post-claim date act to be “the same” as the pre-claim date act. Zinn J granted summary judgment on the interpretation of this provision.

My last post discussed the central holding, that the subsequent act will be the same so long as any changes do not relate to the inventive concept. In addressing that question I did not address Zinn J’s initial discussion of the meaning of the term “the same,” and whether it should be interpreted to mean “substantially the same act”, as NCS argued [82], or rather “near identicality,” as Kobold argued [88]. Zinn J agreed with Kobold that the more stringent interpretation was correct, even saying that the two acts must be “identical” [92] “in the sense that one can only perform those acts set out in section 42 of the Patent Act which were actually performed pre-patent” [97].

This might seem like a very important point to have omitted; but it is less important than it might seem. Knowing that the test is “identical” rather than “substantially the same” is not particularly helpful unless we know what those terms mean. As I discussed in my last post, it is perfectly clear from Zinn J’s subsequent discussion that when he said “the same” should be interpreted to mean “identical” [92], he did not mean that it must be exactly identical in every respect. He expressly stated that a variety of changes, from paint, to location method, to fracking fluid, would all be permitted. Indeed, after concluding that “the same” meant “identical,” began the next part by saying “[t]his interpretation then leads one to ask if the same act is the manufacture of a device, must it be an identical device that is manufactured to obtain the protection of subsection 56(1)” [99]; he clearly did not consider this question to have been settled by the holding that “the same” means “identical,” and he went on to outline many differences that would be permitted, such as a different paint colour, or the use of a more efficient fracking fluid in the claimed method. So, even though Zinn J did hold that “the same” means “identical” [92], [97], it would a misleading to take that out of context as a summary of his holding.

With that said, I’ll comment briefly on that part of Zinn J’s decision.

His reasons for holding that “the same” means “identical,” were first, “identical” is the dictionary meaning of the word the “same” [93]. Second, “substantially the same” is used in 56(6),(9) and “the same” must mean something different, and presumably more restrictive [94]. Third, the phrase “the act” in the corresponding provision of the UK Act, s 64, had been interpreted as meaning “substantially the same” and to the extent the Canadian drafters were looking to the UK Act, the decision to use “the same act” instead of simply “the act” implies they were looking for a more restrictive meaning than under the UK Act [95], [79]. Fourth, even if an identical act is required, this is still more expansive protection than under the previous provision, which restricted protection to the same specific article [98].

The most significant point is the third, as it implies that the test for similarity in Canadian law is more stringent than in UK law, which in turn means that UK caselaw will be of limited assistance at most. I am not persuaded by this point. Now, I should say that this doesn’t make much difference, as we’re not going to find much guidance in the UK cases anyway. So far there are very few UK cases discussing s 64, and none of them go into what it means to be the same acts, and they mostly turn on whether effective preparations were made. But the point perhaps worth exploring nonetheless, in case future UK decisions are more helpful.

The UK Act says a person who does “an act” before the claim date has the right “to continue to do the act.” “The” is a definite article, which, at least according to Wikipedia “denot[es] . . . things already mentioned, under discussion, implied or otherwise presumed familiar to. . . readers.” So “the act” refers to an act already mentioned, namely the prior act referred to in the first part of the provision. So I would say that as a matter of grammar “the act” in the UK provision means the same act as was previously mentioned in the sentence, which is to say the prior act. So I have a hard time giving much significance to the inclusion of the word “same” in the Canadian provision, as it seems to me to have been grammatically implicit in the UK Act.

More importantly, “the same” was interpreted as meaning “substantially the same by Jacob J in Lubrizol v Esso [1997] 114 RPC 195 (Pat)*, in a passage quoted by Zinn J at [81] (original italics, underling added by Zinn J):

In deciding whether the activity is substantially the same all the circumstances must be considered. Both technical and commercial matters must be taken into account. That is important in a case such as the present where there are inherent minor variations in starting materials or the like. If the protected act has to be exactly the same (whatever that may mean) as the prior act then the protection given by the section would be illusory. The section is intended to give a practical protection to enable a man to continue doing what in substance he was doing before.

I don’t see any real between what Jacob J was saying in this passage and Zinn J’s holding in the remainder of the decision. As noted, Zinn J explicitly held that changes in paint colour, location method, and fracking fluid, would all be permitted, even though the latter two are actually elements of the claim. This goes well beyond the example of “inherent minor variations in starting materials” given by Jacob J. So when Jacob J held that the act had to be “substantially” similar, this was by way of rejecting a requirement that the acts by strictly identical—a requirement which Zinn J also rejected, notwithstanding that he did say that “the same” means “identical” at [92]. I also note that at [97] Zinn J explained “identical” as meaning “in the sense that one can only perform those acts set out in section 42 of the Patent Act which were actually performed pre-patent” [97] and that “[o]n this interpretation [ie identical] if the person claiming the protection of subsection 56(1) had, for example, previously only manufactured and used its device, then they can continue to manufacture and use it, but they cannot now sell the device to others to use” [98]. This suggests that “identical act” means the type of infringement—whether it be the make, sell, or use—that must be identical.

On the whole, I don’t find this discussion of whether “the same” means “identical” or “substantially” the same to be helpful. The label doesn’t matter. The real question the nature and extent of the differences that are permitted. Zinn J’s lengthy discussion of that central question, discussed in Monday’s post, surely supersedes his statement that “the same” means “identical.”

*Zinn J cited the passage as “[1997] RPC 195 (Eng CA) at 216,” which is a pinpoint to the decision of Jacob J in the Patents Court. Aldous LJ in the EWCA did quote and affirm the last two sentences of that passage, [1998] 115 RPC 727 (CA) 700, but did not quote the part related to “substantially the same”.


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