Monday, November 28, 2022

IPIC Subject Matter Test Properly Subject to Appeal

Canada (Attorney General) v Benjamin Moore & Co 2022 FCA 194 Rennie JA

2,695,130 / 2,695,146 (applications)

This decision relates to a procedural wrinkle in the Benjamin Moore litigation, which is set to clarify the law relating to patentable subject matter. The Commissioner had refused two of Benjamin Moore’s applications on the basis that the claims were directed to non-statutory subject matter. Benjamin Moore appealed, and in Benjamin Moore 2022 FC 923, Gagné ACJ endorsed a particular test, proposed by the intervener, IPIC, for assessing patentable subject matter (see here). She then sent the applications back to CIPO for redetermination. The Attorney General had agreed that CIPO had used the wrong test, and that the files should be sent back for redetermination, but would have preferred that CIPO be instructed to decide the matter according to the principles set out in Choueifaty 2020 FC 837: [FC 39]. Significantly, Gagné ACJ instructed CIPO to use the IPIC test in paragraph 3 of the judgment itself.

The Attorney General then appealed. Benjamin Moore brought this motion to strike, arguing that the AG had no disagreement with the result—the files should be sent back for redetermination—and the appeal was brought to challenge the IPIC test. It is clear that the FCA, under the Federal Courts Act, s 27, only has jurisdiction to hear an appeal against the judgment, and Benjamin Moore argued that the appeal was in substance an appeal against the reasons.

The key question in this motion was therefore whether the appeal truly relates to the Federal Court’s judgment, or to its reasons for that judgment: [14]. Rennie JA noted that whether an appeal is taken from the reasons or the judgment is not always self-evident. The central policy consideration is “whether the appeal is a veiled attempt to keep the benefit of the judgment but realign the reasons for judgment. Sometimes a party will be successful in the result, but will not like the manner by which they succeeded. Courts must always be vigilant to guard against appeals brought on this basis” [25].

Rennie JA held that in this case, the appeal was an appeal against the judgment, not just the reasons, and so the motion was quashed. He discussed two prior FCA decisions, in Yansane 2017 FCA 48 and Fournier 2019 FCA 265 affg 2018 FC 464. In Yansane, the FCA had noted at [17] that “the Court often simply directs that reconsideration take place in accordance with its reasons,” and held that in such a case an appeal against the reasons was not permitted, as “only instructions explicitly stated in the judgment bind the subsequent decision-maker” [19]. In Fournier, the FC judgment stated that “The case is referred back to the Appeal Panel for reconsideration, taking into account these reasons.” The appellant asked the court to uphold the judgment, in the sense of referring the matter back to the Appeal Panel, but asked the FCA to declare that the FC had erred in its interpretation of a point of law. The FCA held that this was an impermissible attempt to appeal the reasons, and the reference to the “taking into account these reasons” did not change the essence of the appeal:

[31] I am therefore of the view that the addition of that statement in the formal judgment is not sufficient to incorporate therein the reasons in their entirety, much less to make of that statement a strict direction or even a directed verdict. If it were otherwise, reasons would always open up the possibility of an appeal.

He distinguished these decisions on the basis that they related to situations which there was a general reference to the reasons in the formal judgment [19],[20], whereas in this case “paragraph 3 of the judgment lays out a test for the Commissioner that can be uniquely enforced, separately from the accompanying reasons” [22], and

paragraph 3 of the Federal Court’s judgment is a specific direction in this respect, akin to a declaratory judgment. Consistent with [the prior cases], the specific direction in paragraph 3 forms part of the judgment and uniquely binds the Commissioner to a particular test in a way that the reasons alone do not [26].

This does distinguish the prior cases, though at first blush it might seem a bit formalistic. One response to that is simply to say that a line has to be drawn somewhere and any test that provides any degree of certainty has to be formalistic to some degree. Another response is that the distinction is by no means purely formal. Rennie JA noted that “This test responds to the only substantive consideration that was before the Federal Court, laying at the core of the Federal Court’s formal judgment in the matter” [26]. The formal point and the substantive point go hand in hand: when the particular legal test is found in the judgment itself, this is a very good indication that the court considered it to lie at the core of the decision. For both those reasons, I do find the distinction drawn by Rennie JA to be persuasive.

With all that said, it’s not entirely clear to me why the court has to be so vigilant to guard against a party seeking to “keep the benefit of the judgment but realign the reasons for judgment.” Victory on the facts in a case is always welcome, but for parties who are repeat players in the litigation system, as is true for many patent litigants, the shape of the law may be much more important in the long run. If the decision goes against a party, they have a full opportunity to reargue the law on appeal, and it’s not entirely clear to me why they should be denied that opportunity if the ruling goes in their favour, simply because the trial judge did not find the legal point important enough to put in the judgment itself. I’m sure there’s an answer to that question in the voluminous jurisprudence on the US “case or controversy” requirement, but I won’t pursue it, since the point is academic in this context, given that Rennie JA did allow the appeal to proceed.


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