Wednesday, June 29, 2022

Anticipation and Non-Infringement Affirmed on the Facts

Swist v MEG Energy Corp 2022 FCA 118 Laskin JA: Mactavish, Monaghan JJA affg 2021 FC 10 Fothergill J

2,800,746 / Pressure Assisted Oil Recovery

Swist’s 746 patent relates to a method of extracting oil from oil sands. Swist’s infringement action against MEG Energy failed at first instance, with Fothergill J holding that the 746 patent was not infringed and invalid for anticipation and lack of utility: see here. The FCA has now affirmed on the basis that the patent was invalid for anticipation and not infringed [5].

On appeal, Swist argued that Fothergill J erred by construing only claim 1 and a single term in claim 2 when claims 1 to 8 were all in issue, and by not addressing dependent claims 3 to 6. Laskin JA noted that the most significant issue was the construction of the term “generating” in claim 1, and claims 2–8 are all dependent claims [12], [15]. He held that it is appropriate for the FC to focus on the issue in dispute [21], and when the validity of dependent claims rests on the validity of the independent claim, it is not necessary to construe elements of the dependent claim that are not actually in dispute [22]. Consequently, “[g]iven the manner in which the parties approached the construction issues, and the centrality of claim 1 in the validity analysis, the Federal Court was entitled to focus its construction on the disputed terms . . . without explicitly construing the other claims” [30].

The finding that the patent was not infringed turned largely on claim construction. On appeal, Swist also argued that Fothergill J had made a variety of other errors, but the FCA dismissed these arguments on the basis that they were supported by the evidence or involved a misunderstanding of Fothergill J’s reasons [39]–[51].

The only question on anticipation was whether the disclosure requirement was met by the three prior art patents which Fothergill J had found to be anticipatory [53]. Laskin JA held that there was evidence to support that conclusion [54]–[56] and it is not the role of the Court of Appeal to reweigh the evidence [59]. Swist again argued that Fothergill J erred by failing to consider the dependent claims, which in principle might narrow the invention to avoid anticipation. But Laskin JA observed that on the facts of this case, the focus of the argument was on claim 1 [66], and Fothergill J had in any event considered the dependent claims were relevant [62]. The general point I take from this is that if you are going to rely on a dependent claim, you need to actually pursue it at first instance, not merely plead it.

At first instance, Fothergill J had also found the claims at issue to be invalid for lack of utility, but he rejected an obviousness attack and found it unnecessary to consider MEG’s allegation of invalidity for overbreadth. In view of his conclusions on anticipation, Laskin JA declined to consider any of these issues. This limits the weight that should be given to Fothergill J’s analysis of utility, which, in my view, is somewhat problematic.

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