Summary Judgment Denied

Meridian Manufacturing Inc v Concept Industries Ltd 2023 FC 20 Zinn J

3,036,430 / Hopper Bottom for Storage Bin

In this brief decision Zinn J dismissed a motion for summary judgment, essentially on the basis that there were disputed factual issues related to both infringement and validity which would likely turn on the credibility of various witnesses [49], [54].

We have seen something of a resurgence in the use of summary disposition in patent cases, starting with Manson J’s decision in Canmar 2019 FC 1233 (here) affd 2021 FCA 7 (here), but we have also seen some pushback, notably in Gemak 2022 FCA 141 (see here): [122]–[124]. The trial judge has quite a lot of de facto discretion in deciding whether to grant summary disposition, and of course, even in a more favourable regime some summary disposition motions will be denied, and vice versa. So each case is an exercise in reading the tea leaves to try and tell whether it signals a trend.

It’s hard to get a read on those tea leaves in this case. Zinn J pointed to specific defects in the evidence, eg it was not clear whether a device that was allegedly anticipatory was part of the prior art [54]. That’s a good reason to deny summary disposition even with a more permissive regime, but on the other hand, if he had been so inclined, he might have proceeded nonetheless, relying on the principle that the parties must put their best foot forward.

Also, I must say I found some aspects of the decision a bit hard to understand. One of the issues where Zinn J found a fundamental disagreement was regarding the essential elements of the claims: “Specifically, [the parties] disagree on whether claims 3 and 7 are essential” [46]. What’s strange here is that essentiality has to be decided on a claim by claim basis, and it is claim elements that are essential or otherwise, not the claim itself: Shire 2021 FCA 52 [55]. Further, there was a dispute as to “[w]hether the ‘solid inner wall’ is an essential component,” and this was crucial to the infringement issue [47]. But so far as I can tell, the term “solid inner wall”—which Zinn J placed in quotes—does not appear in the claims, or anywhere at all in the patent. Presumably the phrase was being used as a shorthand for a claim element and the parties would know which element was at issue. But it does make the decision hard to interpret.

So, at the end of the day, we have another decision refusing to grant summary judgment, and I’m not sure how much more we can extract from those tea leaves.

Landmark FCA Decision on Summary Judgment

Canmar Foods Ltd v TA Foods Ltd 2021 FCA 7 de Montigny JA: Pelletier JA, Rivoalen JJA affg 2019 FC 1233 Manson J

            2,582,376 / method for roasting oil seed

This landmark decision from the FCA, affirming Manson J’s use of summary judgment, is a very welcome development that will improve the operation of the patent system by permitting expeditious disposition of patent cases in appropriate circumstances. The decision is also notable for its considered discussion of the interpretation of s 53.1, which permits the use of summary judgment in certain circumstances. I’ll discuss that issue in my next post.

At trial, Manson J granted summary judgment on the basis of non-infringement in a decision which turned on claim construction, and particularly whether two claim elements were essential. This was the first decision in many years to grant summary judgment on substantive grounds in a patent matter. As discussed here, Manson J was critical of the FCA decision in MacNeil Estate 2004 FCA 50, which, in his view, resulted in an approach in which “summary judgment as a just, efficient and expeditious means to resolve disputes on a proportionate basis was lost” [45]. He described the SCC decision in Hryniak v Mauldin 2014 SCC 7 as resulting in “a culture shift” that “opened the door for a more reasoned approach to the use of summary judgment motions” [46]. After Manson J’s decision, three more FC decisions granted summary judgement: see here, here and here.

In his decision for the FCA, affirming Manson J, de Montigny JA did not comment on whether there has been a “culture shift”—indeed, he did not mention MacNeil Estate at all, which may be significant in itself. Nonetheless, the fact that the FCA approved the use of summary judgment on the facts of this case sends an important message to the FC judges, who will evidently be receptive to it judging from the spate of recent decisions.

On the facts, two issues were raised in respect of summary judgment. The first is whether Manson J erred in granting summary judgment on the basis of non-infringement before any discovery had taken place [19]. Justice de Montigny noted that this was clearly permitted by Rule 213: “Whether or not discovery had taken place at this stage is not a factor contemplated by Rule 213, and ought not to be regarded as such” [26, my emphasis]. Moreover, notwithstanding the absence of discovery, the patentee in this case had sufficient information as to the defendant’s method to allow it to marshal the relevant evidence [28].

The second question was whether Manson J erred in making a determination that the two contentious elements were not essential in the absence of any expert evidence on the issue. In effect, the patentee argued that expert evidence is required for claim construction, and that it is necessarily an error of law for the Court to construe a patent in its absence [31], [33]. Justice de Montigny rejected this proposition, both because of a lack of authority to that effect [34], and as a matter of principle: “If the construction of a claim is a matter of law and the judge is entitled to adopt a construction different from that put forward by the parties and their experts, surely the judge can also construe a claim without relying on such evidence in appropriate circumstances” [36].

While de Montigny JA also held that this was an appropriate case to do so, there was an important caveat:

[37] Claims must always be construed in an informed and purposive way, and it is only in the clearest of cases that judges should feel confident enough to construe the claims of a patent as they would be understood by a skilled person, without the help of any expert evidence.

In this case, the invention is a simple mechanical system and the key terms—”stream of air” and “insulated”—and the claim construction exercise was quite straightforward [38]–[47]. This might be taken to suggest that claim construction in the absence of expert evidence is only appropriate in cases in which the claim terms are themselves easy to interpret.

But that suggestion was certainly not explicit and I don’t think it is what was intended. Justice de Montigny continued by saying, in the same paragraph:

[37] In the case at bar, the appellant had the obligation to put its best foot forward. However, it made the strategic decision not to present expert evidence on the summary judgment motion, thereby foregoing the possibility to impress upon the Judge the need to rely on such expertise to construe the patent. Be that as it may, what matters at the end of the day is not so much how and on what basis the judge came to his or her interpretation of a claim, but whether such interpretation is correct or flawed.

This indicates that it is the nature of the evidence, not the nature of the invention, that is important in determining whether a judge should feel confident enough to construe the claims. That seems right to me; even ordinary English words can take on a technical meaning when used in a patent, so it must be the evidence that is key.

I’m sure Canmar will not be the last word on summary judgment, focusing as it did on the facts of the case, but it is the first words in a promising new chapter.

Summary Judgment Granted

 Flatwork Technologies, LLC (Powerblanket) v Brierley 2020 FC 997 McVeigh J

            2,383,341 / hydraulic boom heating wrap

The 341 patent relates to a heating wrap for articulated hydraulic booms, to keep them operational in very cold temperatures such as in the oilfields of northern Alberta where the invention was developed. In this decision McVeigh J granted a motion for summary judgment, holding the 341 patent invalid for obviousness, essentially on the basis that equipment heating wraps eg for a blowout preventer, were a standard part of the prior art and it was not inventive to apply such a wrap to an articulated hydraulic boom [94].

"Foreign Prosecution History Is Inadmissible"

Gemak v Jempak 2020 FC 644 Lafrenière J

            2,276,428 / 2,337,069

After a decade in which it was almost unheard of for the Federal Court to grant a contested motion for summary trial or summary judgment in a patent case, it seems they are now raining down upon us, with Lafrenière J’s summary judgment decision in Gemak v Jempak following Manson J’s decisions in Viiv v Gilead 2020 FC 486 (here) and Canmar 2019 FC 1233 (here). Lafrenière J’s decision in this case is a good example of summary judgment being used to dispose expeditiously of a far-fetched claim construction argument. It is also notable for holding expressly that foreign prosecution history is not admissible under s 53.1. This is in tension with Manson J’s holding in Canmar that foreign prosecution history should be admissible, albeit only in “extraordinary circumstances” [73], [74], [77].

Gemak’s 428 patent at issue was to a dishwasher detergent pod. These pods commonly use percarbonate as a bleaching agent which is activated on exposure to water. Percarbonate is susceptible to degradation by contact with other detergent ingredients or by moisture. For that reason, the percarbonate must be coated to protect it prior to actual use of the pod. Claim 1 is representative [13]:

A detergent composition comprising a granulated percarbonate and a blend which encapsulates the percarbonate, the blend comprising . . . carboxymethyl cellulose [CMC]

Jempak’s detergent pods included percarbonate encapsulated in a protective coating. It was not really disputed that the use of CMC was an essential element of the claim [119]. It was also established that the protective coating used by Jempak did not comprise CMC. Gemak’s main argument was that CMC was present in the other detergent ingredients in Jempak’s pods, and that once the pod was assembled, the CMC in the other ingredients could adhere to the percarbonate coating, and that the resulting coating with CMC adhering to it would constitute “a blend” comprising CMC which encapsulates the percarbonate [121]. Lafrenière J rejected this on the view that “encapsulation refers to a protective coating (a blend) that is applied to the percarbonate during its manufacture to maintain the stability of the percarbonate and to prevent it from decomposing prematurely before use” [123]. Gemak’s position was not helped by its “evasive and defiant” expert witness [104].

It strikes me that this is an excellent example of the kind of argument that should not be allowed to proceed to a full trial. The patent system is rife with the potential for abuse, in large part due to the cost and complexity of patent litigation. The cost-effective disposition of weak claims is essential to ensuring that the patent system encourages innovation, rather than impeding it.

The other notable point is that Jampak sought to adduce evidence of the US prosecution history. Lafrenière J refused to allow this evidence, in part because it was introduced too late [77] and in part because it would not assist the court [78]. But he also held expressly that “foreign prosecution history is inadmissible” under the new s 53.1 of the Act: [86], and generally [82]-[86]. This holding was primarily based on a straightforward textual argument:

[83] Subsection 53.1(1) provides that the prosecution history may be admitted into evidence in an action to rebut any representation made by the patentee regarding claim construction, but only when specific conditions are met. In particular, subparagraph 53.1(1)(b)(ii) provides that the communication must be between the applicant and “the Commissioner, an officer or employee of the Patent Office or a member of a re-examination board.”

[84] The definition of “Commissioner” is set out in section 2 of the Patent Act as meaning the Commissioner of Patents, who is appointed by the Governor in Council and exercises the powers and performs the duties conferred and imposed on that officer by or pursuant to the Patent Act. The Patent Office described in section 3 as an office attached to the Department of Industry, or to such other department of the Government of Canada as may be determined by the Governor in Council.

Further,

[86] There is a further presumption against the legislature impliedly changing established law, particularly the common law. If Parliament had intended that communications prepared in respect of the prosecution of the application for a foreign patent could be admitted, clearer language would be required to effect that result. In the circumstances, I conclude that section 53.1 did not change the existing rule, as enunciated in Free World Trust, that foreign prosecution history is inadmissible.

I made some similar points in my blog post on Manson J’s decision in Canmar 2019 FC 1233 [77], which held that in “extraordinary” circumstances foreign prosecution history should be admissible to aid in construction of the Canadian claims.

On the other hand, “[t]he language of section 53.1 is limited to communications between the patentee and the Canadian Patent Office” [70]. In particular, per s 53.1(b)(ii), the communication must be between the applicant and “the Commissioner, an officer or employee of the Patent Office or a member of a re-examination board.”

Further, prior to the enactment of s 53.1, it was clear law that “statements made during prosecution of Canadian patent applications or corresponding foreign patent applications were neither relevant nor admissible with respect to construing terms used in issued Canadian patents” [58]; and Free World 2000 SCC 66 [66]. As a matter of statutory interpretation, “[i]t is presumed that the legislature does not intend to make any change in the existing law beyond that which is expressly stated in, or follows by necessary implication from, the language of the statute in question”: R v T (V) [1992] 1 SCR 749, quoting with approval Maxwell on the Interpretation of Statutes; and see also Parry Sound v OPSEU [2003] 2 SCR 157 [39]. This implies that s 53.1, in providing for admissibility of communications to the Canadian examiner, did not change the existing rule that foreign prosecution history is inadmissible.

I’d say that someone owes me a beer.

In any event, there is evidently some tension with Manson J’s holding in Canmar that foreign prosecution history should be admissible, albeit only in “extraordinary circumstances” [73], [74], [77]. Lafrenière J did not directly discuss Manson J’s holding on this point.

A Summary Judgment Procedure under the NOC Regulations?

Janssen Inc v Celltrion Healthcare Co, Ltd 2016 FC 651 Hughes J
            2,261,630 / infliximab / INFLECTRA / REMICADE

This decision marks either a straightforward application of s 5(1) of the NOC Regulations, or a procedurally innovative use of s 6(5)(b) of the Regulations to effectively allowing a summary disposition of an NOC proceeding. Unfortunately, Hughes J was writing under a time constraint [1], and the decision is brief and some key facts are not clear (at least to me).

Janssen’s 630 patent covers the use of infliximab in treating rheumatoid arthritis [28]. Celltrion had already received an NOC for rheumatoid arthritis and related indications (the RA indications) based on a NDS filed before the 630 patent was granted, and so it did not have to address the 630 patent at that time [8]. (An infringement action is now underway [9].) Then, after the 630 patent was granted, Celltrion sought an NOC for indications related to inflammatory bowel disease (the IBD indications) [10]. Hughes J stated that “Celltrion was required to address the 630 patent under [the PMNOC Regulations].” Celltrion sent an NOA to Janssen, which then brought an application for an order of prohibition [10]. In response, Celltrion brought a motion under s 6(5)(b) asking that Janssen’s application be dismissed as an abuse of process, evidently on the general ground that the 630 patent did not cover the indications for which the NOC was being sought..Celltrion’s motion was granted by Aalto J.

Hughes J affirmed in brief reasons, in part adopting Aalto J’s reasons as his own [25]. But Hughes J also went to on to rely on Biolyse 2005 SCC 26 to conclude that “in a case such as the present one, where a patent claims a particular use of a drug it is that use that must be compared with the intended use by the generic and not just the drug” [27].

My difficulty with this case is that it is not entirely clear to me whether Celltrion was comparing its product with Janssen’s in seeking its NOC. Celltrion’s application was apparently based on an SNDS, not an ANDS or SANDS [10], and there is no suggestion in Hughes J’s reasons that Celltrion was comparing its drug to Janssen’s. If Celltrion was not comparing its product with Janssen’s, then the reasoning in the case strikes me as a bit odd. Biolyse held that it is only necessary to address patents on the register if the party submitting the application for an NOC compares its drug with that of the another drug against which the patent is listed. In other words, a party who is relying on their own data does not need to address the listed patents, even if the submission is for the same indications; it is only “copy-cats” who need to address listed patents. This was affirmed by the subsequently amended s 5(1), which says patents listed against a drug must be addressed only if “the submission directly or indirectly compares the drug with, or makes reference to, another drug.” (See also the RIAS to the 2006 amendments, SOR2006-242 at 1519-20.) So, if Celltrion was not comparing its product to Janssen’s then it would follow directly from per s 5(1) that it would not be required to address the 630 patent at all, even if the 630 patent was listed against infliximab, and even if Janssen’s NOC covers the IBD indications. The puzzle is that on this view of the decision, it is not clear why “Celltrion was required to address the 630 patent under [the PMNOC Regulations]” [10] in the first place.

On the other hand, if Celltrion was comparing its drug to Janssen’s for the IBD indications, that would explain why Celltrion was required to address the 630 patent. In that case Biolyse would not be directly applicable, as Celltrion’s product would be a “copy-cat” drug, in the sense of relying on Janssen’s data, even if Janssen’s data were for an unpatented indication. On those facts, Hughes J’s holding would not be a direct application of Biolyse, but rather an extension, which would mean that a generic need not address a listed patent even if the generic is indeed piggy-backing off the data submitted by the patentee, so long as the indication for which an NOC was sought did not infringe. Normally that would require an NOC proceeding based on an allegation of non-infringement pursuant to s 5(1)(b)(iv)t, but perhaps the motion under s 6(5)(b) was based on the view that the non-infringement issue was so clear that it would be an abuse to proceed with the NOC proceeding. In other words, s 6(5)(b) was being used for a summary disposition of the NOC proceeding. If that is what happened, then the decision is procedurally quite significant.