Georgetown Rail Equipment Co v Tetra Tech EBA Inc 2020 FC 64 Fothergill J on remand from
2019 FCA 203 DawsonJA: Pelletier, Webb JJA rev’g 2018 FC 70 Fothergill J
2,572,082 / 2,766,249
This case is the exception that proves the rule that the presumption of validity rarely plays a
significant role in validity determinations.
At trial in Georgetown Rail v Tetra Tech Fothergill J held that Georgetown’s 082 and 249
patents were valid and infringed by Tetra Tech (see here). The FCA reversed, on the basis that
Fothergill J had “erred in law by failing to consider and analyze how the skilled worker would
have applied the common general knowledge to the prior art” [FCA 13] (and see here). The FCA
consequently held the 082 patent and several asserted claims of the 249 patent to be invalid for
obviousness [FCA 134]. The issue of validity of the remaining claims of the 249 patent was
remitted to Fothergill J.
On remand, Fothergill J found the two broadest claims (Claim 1 and 12), to be invalid for
obviousness, but there was insufficient relevant evidence to allow him to conclude that the other
remanded claims were obvious [11], [51]. This is apparently because the obviousness of these
claims was not a major issue at trial, and “neither Tetra nor Georgetown devoted much time or
effort at trial” to elucidating the inventive concept of those claims [47]. “Applying the
presumption of validity and the burden of proof,” Fothergill J therefore held that Tetra had not
established that the remanded claims were invalid [57].
A granted patent is presumed to be valid, but the presumption is very weak, and is therefore
rarely determinative. The presumption of validity was determinative in this case only because of
the unusual circumstances surrounding the issue of obviousness for these particular claims.
Showing posts with label Presumption of Validity. Show all posts
Showing posts with label Presumption of Validity. Show all posts
Friday, January 31, 2020
Friday, March 1, 2013
Miscellaneous Issues in Imatinib
Teva Canada Ltd v Novartis AG / imatinib 2013 FC 141, Snider J
GLEEVEC / imatinib mesylate / 2,093,203
As well as the promise of the patent, discussed yesterday, Snider J’s imatinib decision is the first application of the SCC Sildenafil disclosure requirement, and it also raises interesting issues related to sound prediction. I am still working on posts on those topics. In the meantime, this post discusses some miscellaneous emerging from the decision.
- Differentiated promise of utility
- What is a scintilla?
- Burden of proof
- POSITA may be an expert
Tuesday, January 22, 2013
The SCC Did Not Hold the Viagra Patent to Be Void in Rem
Apotex v Pfizer / sildenafil 2012 FC 1339 Zinn J
2,163,446 / VIAGRA
2,163,446 / VIAGRA
In this decision in an impeachment action brought by Apotex, Zinn J granted a motion for summary judgment that the ‘446 patent is invalid, on the basis that the SCC had declared the ‘446 patent to be invalid with in rem effect in its Pfizer / sildenafil 2012 SCC 60 decision. (This decision was released in late November and posted by Alan Macek on IP Practice. I missed it as I was away on vacation at the time. It is still not posted on the FC website.) It seems to have been accepted by Pfizer that the SCC did hold the ‘446 patent invalid with in rem effect when it held at [91] that “Patent 2,163,446 is void.” So in this motion, Pfizer argued that the SCC exceeded its jurisdiction, and has filed a motion seeking amendment of the judgment, or for a rehearing on the issue of remedy [10]. Pfizer also argued that “as a consequence of the Judgment of the Supreme Court declaring the ‘446 Patent void,” the impeachment action is moot [15]. Pfzier also argued that the questions at issue were questions of mixed fact and law, and so were not binding [32]. All of these arguments take it for granted that the SCC held that patent void with in rem effect. I do not agree. The question is, what did the SCC mean when it said the patent is “void”? Did it mean “void in rem,” or “void inter partes”? In my view, it is very clear that the SCC intended the latter.
Thursday, June 9, 2011
Will Microsoft v i4i Influence Canadian Law?
In its decision in Microsoft v i4i, released today, the USSC affirmed a strong presumption of patent validity, holding that an invalidity defence must be proven by “clear and convincing evidence.” The Canadian courts are very receptive to considering case-law from other jurisdictions as persuasive authority, but as Phelan J noted in Amazon.com 2010 FC 1011 “this must be done mindfully.” I suggest that the i4i decision is unlikely to be influential in Canadian law, for three reasons: the statute is different, the precedent is different, and the USSC expressly did not consider policy arguments.
In i4i the USSC noted that the US statute “includes no express articulation of the standard of proof,” so its holding did not turn on the text of the statute. The Court also refused to consider the policy arguments, on the basis that the case-law was too well established: “We find ourselves in no position to judge the comparative force of these policy arguments. For nearly 30 years, the Federal Circuit has interpreted §282 as we do today.” Thus the decision of the USSC in i4i was based entirely on affirmation of a consistent line of precedent in US law, which first as a matter of common law, and subsequently as a matter of interpretation of the statutory provision, which was understood as codifying the common law, has always required clear and convincing evidence to hold a patent invalid.
Compare this with the Canadian situation. The leading case is the decision of the FCA in Diversified Products Corp v Tye-Sil Corp (1991) 35 CPR(3d) 350 (FCA) in which the Court of Appeal held that the statutory presumption is only a prima facie presumption, which is to say that it will govern in the absence of any evidence, “but it can have no weight capable of being put in the balance against opposing evidence which is believed” (quoting Fox). Consequently, a challenge to the validity of a patent need only satisfy “the usual standard of balance of probabilities.” Prior to that decision, as the Court of Appeal explained, the preponderance of the cases applied, or at least articulated, a higher standard, but the cases were not consistent and the matter had been the subject of controversy. The standard set out in Tye-Sil has since been consistently followed in Canada. The only caveat is that in Wellcome / AZT 2002 SCC 77 at [43]-[44] the Supreme Court held that the appropriate “standard of review” of a granted patent on a question of mixed fact and law, such as validity challenge based on utility, is “reasonableness simpliciter.” This was a short discussion - two paragraphs - which had not been briefed by the parties; the Court failed to even cite Tye-Sil, the leading case. Since then, the Federal Court has refused to follow the Supreme Court on that point, with Gauthier J delivering a forceful explanation of where the Supreme Court went wrong. Of course a statement by the Supreme Court, even in passing, is strong authority in its own right. But the point is that there is not any consistent history of applying a high standard. The Supreme Court’s statement stands on its own merits, and not as affirmation of a consistent body of prior case-law. The decision of the USSC in i4i is entirely different in that respect.
The Canadian Act is also different from the US statute. The Canadian Act now provides that a granted patent shall be valid “in the absence of any evidence to the contrary.” Prior to the 1985 revisions it has similarly provided for “prima facie” validity. Both of these are consistent with a weak presumption. The US Act says simply that a patent “shall be presumed valid.” Even if the i4i decision turned on the statute, which it did not, these statutory differences are significant enough to reduce the significance of US law.
Further, while the USSC did not expressly consider policy issues, it indirectly acknowledged the force of the argument in favour of a weak presumption, at least in the context where the evidence before the court was not before the examiner. The USSC held it was bound by precedent to apply the same presumption of validity even in that context, but the Court went on to say “if the PTO did not have all material facts before it, its considered judgment may lose significant force. And, concomitantly, the challenger’s burden to persuade the jury of its invalidity defense.” It is evidently illogical to grant deference to an examiner who did not have all the facts. As Gonthier J explained, this is why the Supreme Court was wrong to consider a validity attack on a challenged patent as if it were an application for judicial review of an administrative body that had heard a full argument on the facts. This is a very strong point, and despite the US precedent, it persuaded the USSC to create a loophole in the nominally strong presumption in such a case.
Finally, it might be said that the fact of a consistent body of case-law in the US should be persuasive in itself, as reflecting the cumulative wisdom of the US courts. But against that, we should look to the cumulative wisdom of the English courts, where the standard of review is the same as that articulated in Tye-Sil.
While the strength of the presumption of validity in Canada is currently something of an open question in consequence of the SCC’s two paragraphs in the AZT decision, but I suggest that despite the high authority of the USSC, the basis for its decision in i4i decision means that that case should not and will not affect the resolution of this issue in Canadian law.
In i4i the USSC noted that the US statute “includes no express articulation of the standard of proof,” so its holding did not turn on the text of the statute. The Court also refused to consider the policy arguments, on the basis that the case-law was too well established: “We find ourselves in no position to judge the comparative force of these policy arguments. For nearly 30 years, the Federal Circuit has interpreted §282 as we do today.” Thus the decision of the USSC in i4i was based entirely on affirmation of a consistent line of precedent in US law, which first as a matter of common law, and subsequently as a matter of interpretation of the statutory provision, which was understood as codifying the common law, has always required clear and convincing evidence to hold a patent invalid.
Compare this with the Canadian situation. The leading case is the decision of the FCA in Diversified Products Corp v Tye-Sil Corp (1991) 35 CPR(3d) 350 (FCA) in which the Court of Appeal held that the statutory presumption is only a prima facie presumption, which is to say that it will govern in the absence of any evidence, “but it can have no weight capable of being put in the balance against opposing evidence which is believed” (quoting Fox). Consequently, a challenge to the validity of a patent need only satisfy “the usual standard of balance of probabilities.” Prior to that decision, as the Court of Appeal explained, the preponderance of the cases applied, or at least articulated, a higher standard, but the cases were not consistent and the matter had been the subject of controversy. The standard set out in Tye-Sil has since been consistently followed in Canada. The only caveat is that in Wellcome / AZT 2002 SCC 77 at [43]-[44] the Supreme Court held that the appropriate “standard of review” of a granted patent on a question of mixed fact and law, such as validity challenge based on utility, is “reasonableness simpliciter.” This was a short discussion - two paragraphs - which had not been briefed by the parties; the Court failed to even cite Tye-Sil, the leading case. Since then, the Federal Court has refused to follow the Supreme Court on that point, with Gauthier J delivering a forceful explanation of where the Supreme Court went wrong. Of course a statement by the Supreme Court, even in passing, is strong authority in its own right. But the point is that there is not any consistent history of applying a high standard. The Supreme Court’s statement stands on its own merits, and not as affirmation of a consistent body of prior case-law. The decision of the USSC in i4i is entirely different in that respect.
The Canadian Act is also different from the US statute. The Canadian Act now provides that a granted patent shall be valid “in the absence of any evidence to the contrary.” Prior to the 1985 revisions it has similarly provided for “prima facie” validity. Both of these are consistent with a weak presumption. The US Act says simply that a patent “shall be presumed valid.” Even if the i4i decision turned on the statute, which it did not, these statutory differences are significant enough to reduce the significance of US law.
Further, while the USSC did not expressly consider policy issues, it indirectly acknowledged the force of the argument in favour of a weak presumption, at least in the context where the evidence before the court was not before the examiner. The USSC held it was bound by precedent to apply the same presumption of validity even in that context, but the Court went on to say “if the PTO did not have all material facts before it, its considered judgment may lose significant force. And, concomitantly, the challenger’s burden to persuade the jury of its invalidity defense.” It is evidently illogical to grant deference to an examiner who did not have all the facts. As Gonthier J explained, this is why the Supreme Court was wrong to consider a validity attack on a challenged patent as if it were an application for judicial review of an administrative body that had heard a full argument on the facts. This is a very strong point, and despite the US precedent, it persuaded the USSC to create a loophole in the nominally strong presumption in such a case.
Finally, it might be said that the fact of a consistent body of case-law in the US should be persuasive in itself, as reflecting the cumulative wisdom of the US courts. But against that, we should look to the cumulative wisdom of the English courts, where the standard of review is the same as that articulated in Tye-Sil.
While the strength of the presumption of validity in Canada is currently something of an open question in consequence of the SCC’s two paragraphs in the AZT decision, but I suggest that despite the high authority of the USSC, the basis for its decision in i4i decision means that that case should not and will not affect the resolution of this issue in Canadian law.
Wednesday, March 2, 2011
Federal Court Overrules Supreme Court on Presumption of Validity
Eli Lilly Co. v. Apotex Inc. / cefaclor, 2009 FC 991, 80 C.P.R. (4th) 1, Gauthier J. aff’d 2010 FCA 240
Valence Technology, Inc. v. Phostech Lithium Inc. 2011 FC 174, Gauthier J
In Wellcome / AZT 2002 SCC 77 [44], the Supreme Court held that the appropriate “standard of review” of a granted patent on a question of mixed fact and law, such as validity challenge based on utility, is “reasonableness simpliciter.” This was a importation of administrative law principles into what had previously been dealt with in terms of the statutory presumption of validity set out in ss 43(2). The novelty of the Court’s approach is reflected even in the heading to its discussion, “The Standard of Review,” in contrast to the traditional “presumption of validity.”
In Eli Lilly / cefaclor 2009 FC 991 Gauthier J refused to follow this holding. Gauthier J’s discussion on this point is one of my favourite passages of judicial reasoning from the past year, for two reasons. First, her analysis is crushing, in terms of law and policy. In my view it is quite clear that Gauthier J is right and the Supreme Court is wrong. I have nothing to add to her thorough reasons, which I have reproduced below. Of course, neither strong reasoning in the Federal Court, nor weak reasoning in the Supreme Court, are novel in themselves. What makes Gauthier J’s analysis stand out is her willingness to face the issue directly. The more usual course when a lower court is faced with unpalatable authority is to interpret that authority narrowly, or make factual findings that avoid its application, until the inconvenient doctrine fades away from lack of use. This strategy has the advantage of formally respecting binding authority, but the corresponding disadvantage that the problematic doctrine distorts the law as the courts frame their reasons so as to avoid the doctrine, rather than to illuminate the issues. (As another example, see here.) Of course, Gauthier J’s decision not to follow the Supreme Court’s decision can be criticized as going beyond the role of a trial judge. But, as she pointed out, she did have very recent Supreme Court authority on her side, which the Supreme Court in Wellcome / AZT had not taken into account, and, moreover, the point had not been argued by the parties in Wellcome / AZT. It seems quite likely that the SCC did not realize it was making new law.
Gauthier J’s position reflects the general trend at the Federal Court. In Valence Technology Gauthier J at [179] reaffirmed the analysis she had set out in Eli Lilly / cefaclor. In Novopharm Ltd. v. Eli Lilly & Co. / tomoxetine 2010 FC 915 [29-30], Barnes J expressly followed Gauthier J in declining to follow Wellcome / AZT. While his reasons were less elaborate, they were equally pointed: “It is not entirely clear to me what was meant by Justice Ian Binnie in the discussion in AZT, above, about the administrative standard of review,” and “any deference is owed to the Commissioner in cases like this one, it is completely subsumed by the presumption of validity created by ss. 43(2) of the Patent Act, and is essentially extinguished where any evidence to the contrary is placed before the Court.” As Gauthier J pointed out in Eli Lilly / cefaclor, Snider J had also declined to apply a more deferential standard in 2007 FC 358 and 2009 FC 676, albeit without expressly disagreeing with the Supreme Court. In Eli Lilly Canada Inc. v. Novopharm Ltd. / olanzapine, 2009 FC 1018, 78 C.P.R. (4th) 1 O'Reilly J stated a deferential standard [12], citing Wellcome / AZT, but then apparently applied a balance of probabilities standard [13]. On the other hand, in Blair v Canada (Attorney General), 2010 FC 227, 81 CPR(4th) 403, Mactavish J applied a reasonableness standard, but that was a review of the Commissioner’s decision to refuse a patent, and not a validity challenge to a granted patent. There is a stronger argument for deference in such a case, as the same record is before Court as was before the Commissioner. (However, the point must be considered open, as Mactavish J ultimately held the decision to be unreasonable, so the standard of review did not affect the outcome.)
The important lesson from this decision, I suggest, is one for the Supreme Court. It should stop deciding points of law that are not argued by the parties. This is a simple step that would save the Court, and the law, from this kind of error.
I note that the presumption of validity will be addressed by the US Supreme Court in i4i Ltd. v. Microsoft Corp., 598 F.3d 831 (Fed. Cir. 2010), cert. granted, 131 S.Ct. 647 (Nov. 29, 2010) (No. 10-290). US law has traditionally has a relatively high presumption of validity which requires a showing of invalidity on the basis of “clear and convincing evidence.” That standard is the point on which cert was granted. The current US standard is high relative to the traditional Canadian rule, expressed by Gauthier J, and closer to the standard expressed by the SCC in Wellcome / AZT. My own view is that the current Canadian law, as expressed by Gauthier J, is sound in policy. It will be interesting to see whether the USSC agrees.
The relevant excerpts from cefaclor are after the break.
Valence Technology, Inc. v. Phostech Lithium Inc. 2011 FC 174, Gauthier J
In Wellcome / AZT 2002 SCC 77 [44], the Supreme Court held that the appropriate “standard of review” of a granted patent on a question of mixed fact and law, such as validity challenge based on utility, is “reasonableness simpliciter.” This was a importation of administrative law principles into what had previously been dealt with in terms of the statutory presumption of validity set out in ss 43(2). The novelty of the Court’s approach is reflected even in the heading to its discussion, “The Standard of Review,” in contrast to the traditional “presumption of validity.”
In Eli Lilly / cefaclor 2009 FC 991 Gauthier J refused to follow this holding. Gauthier J’s discussion on this point is one of my favourite passages of judicial reasoning from the past year, for two reasons. First, her analysis is crushing, in terms of law and policy. In my view it is quite clear that Gauthier J is right and the Supreme Court is wrong. I have nothing to add to her thorough reasons, which I have reproduced below. Of course, neither strong reasoning in the Federal Court, nor weak reasoning in the Supreme Court, are novel in themselves. What makes Gauthier J’s analysis stand out is her willingness to face the issue directly. The more usual course when a lower court is faced with unpalatable authority is to interpret that authority narrowly, or make factual findings that avoid its application, until the inconvenient doctrine fades away from lack of use. This strategy has the advantage of formally respecting binding authority, but the corresponding disadvantage that the problematic doctrine distorts the law as the courts frame their reasons so as to avoid the doctrine, rather than to illuminate the issues. (As another example, see here.) Of course, Gauthier J’s decision not to follow the Supreme Court’s decision can be criticized as going beyond the role of a trial judge. But, as she pointed out, she did have very recent Supreme Court authority on her side, which the Supreme Court in Wellcome / AZT had not taken into account, and, moreover, the point had not been argued by the parties in Wellcome / AZT. It seems quite likely that the SCC did not realize it was making new law.
Gauthier J’s position reflects the general trend at the Federal Court. In Valence Technology Gauthier J at [179] reaffirmed the analysis she had set out in Eli Lilly / cefaclor. In Novopharm Ltd. v. Eli Lilly & Co. / tomoxetine 2010 FC 915 [29-30], Barnes J expressly followed Gauthier J in declining to follow Wellcome / AZT. While his reasons were less elaborate, they were equally pointed: “It is not entirely clear to me what was meant by Justice Ian Binnie in the discussion in AZT, above, about the administrative standard of review,” and “any deference is owed to the Commissioner in cases like this one, it is completely subsumed by the presumption of validity created by ss. 43(2) of the Patent Act, and is essentially extinguished where any evidence to the contrary is placed before the Court.” As Gauthier J pointed out in Eli Lilly / cefaclor, Snider J had also declined to apply a more deferential standard in 2007 FC 358 and 2009 FC 676, albeit without expressly disagreeing with the Supreme Court. In Eli Lilly Canada Inc. v. Novopharm Ltd. / olanzapine, 2009 FC 1018, 78 C.P.R. (4th) 1 O'Reilly J stated a deferential standard [12], citing Wellcome / AZT, but then apparently applied a balance of probabilities standard [13]. On the other hand, in Blair v Canada (Attorney General), 2010 FC 227, 81 CPR(4th) 403, Mactavish J applied a reasonableness standard, but that was a review of the Commissioner’s decision to refuse a patent, and not a validity challenge to a granted patent. There is a stronger argument for deference in such a case, as the same record is before Court as was before the Commissioner. (However, the point must be considered open, as Mactavish J ultimately held the decision to be unreasonable, so the standard of review did not affect the outcome.)
The important lesson from this decision, I suggest, is one for the Supreme Court. It should stop deciding points of law that are not argued by the parties. This is a simple step that would save the Court, and the law, from this kind of error.
I note that the presumption of validity will be addressed by the US Supreme Court in i4i Ltd. v. Microsoft Corp., 598 F.3d 831 (Fed. Cir. 2010), cert. granted, 131 S.Ct. 647 (Nov. 29, 2010) (No. 10-290). US law has traditionally has a relatively high presumption of validity which requires a showing of invalidity on the basis of “clear and convincing evidence.” That standard is the point on which cert was granted. The current US standard is high relative to the traditional Canadian rule, expressed by Gauthier J, and closer to the standard expressed by the SCC in Wellcome / AZT. My own view is that the current Canadian law, as expressed by Gauthier J, is sound in policy. It will be interesting to see whether the USSC agrees.
The relevant excerpts from cefaclor are after the break.
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