Obvious-to-Try Clarified

Apotex Inc v Janssen Inc 2021 FCA 45 Locke JA: Webb, Boivin JJA affg Janssen Inc v Apotex Inc 2019 FC 1355 Phelan J

            2,661,422 / abiraterone acetate & prednisone / ZYTIGA / old NOC

The invention at issue in this case relates to the use of the combination of abiraterone acetate (AA) & prednisone for the treatment of prostate cancer. Wednesday’s post provides an outline of the facts and a discussion of patentable subject-matter. This post discusses the obviousness analysis, where the main point of interest is a clarification of the obvious-to-try analysis set out in Sanofi 2008 SCC 61.

Apotex argued that Phelan J had not applied the obvious-to-try analysis correctly because he had focused unduly on the question of whether it is “more or less self-evident that what is being tried ought to work” and had erroneously considered that question to be a requirement rather than merely a factor to be considered [30]. Locke JA agreed that that question is merely a factor, not a requirement, and noted that there were passages which gave the impression that Phelan J had indeed considered this to be the overarching requirement [33]. However, on a reading of the decision as a whole, Locke JA concluded that Phelan J had properly considered all of the relevant factors [34] and he therefore affirmed Phelan J’s holding that the invention was not obvious.

Locke JA noted that some confusion was understandable, as the SCC had given “mixed signals” on the issue [36]. He pointed out that the SCC in Sanofi at [65] stated that “I am of the opinion that the ‘obvious to try’ test will work only where it is […] more or less self-evident that what is being tested ought to work.” This makes it seem that being self-evident that what is being tested ought to work is a requirement, such that if the answer is no, the invention is not obvious [36]. But the SCC at [69]–[70] clearly listed the same consideration as being simply one factor among several, which is not in itself determinative. In this decision, Locke JA reaffirmed his view, previously expressed in Hospira 2020 FCA 30 [88]–[90], that read as a whole, the SCC in Sanofi intended that whether it is self-evident that what is being tried ought to work should be considered as a factor, and not a requirement [36].

I agree with Locke JA’s analysis, which strikes me as being consistent both with the purpose of the obvious-to-try analysis and with a contextual analysis of the text. In a passage in Hospira, quoted at [31], Locke JA had pointed out that the SCC in Sanofi [66] had stated that whether it is “more or less self-evident to try to obtain the invention”—as distinct from whether it is self-evident that it will work—is a requirement. If the particular solution arrived at by the inventor was not obvious to try, then it cannot have been obvious, as the inventive step lay in the very decision to try pursuing a line of research that would not have occurred to a skilled person.

If the inventor’s solution was obvious to try, things get more complicated. One might suppose that even if the solution was obvious to try, if it was not self-evident that it ought to work, the invention would therefore be non-obvious, as there is a non-obvious step along the path from the problem to the solution. That logic supports the view that being self-evident that it ought to work is a requirement. But that logic is wrong, as is illustrated by Johns-Manville’s Patent [1967] RPC 479 (CA). The claimed invention was the use of a particular compound, polyacrylamide, as a flocculating agent for filtration of cement. Flocculating agents were well known as being useful in filtration processes generally and the possibility of using such an agent to improve filtration of cement had long been appreciated, but all those previously tried had decreased the quality of the final cement product. Polyacrylamide had been recently developed by a third party as a general flocculating agent and its use in cement filtration had been suggested. Because it was particularly effective and could be used at low concentrations, there was reason to think that it would prove useful for cement where other agents had not. However, the nature of cement making is such that nothing is certain until it is tried. It was therefore self-evident to try polyacrylamide as a flocculating agent in cement, but it was not more or less self-evident that it would work. The patentee tried polyacrylamide and found that it did indeed work without difficulty.* The Court of Appeal held the invention to be obvious: there was no invention in the decision to try, and there was no invention in getting it to work. This illustrates why being “more or less self-evident that what is being tested ought to work,” should not be a requirement; and given that Johns-Manville’s was cited with approval in Sanofi [59], [61], this reinforces Locke JA’s point that read as a whole, the SCC did not intend it to be a requirement. The flaw in the logic set out at the beginning of the paragraph lies in supposing that there must be an inventive step in carrying out an experiment, simply because the outcome cannot be predicted in advance. Johns-Mansville illustrates why that assumption is not correct.

While not a requirement, whether it is self-evident that the solution ought to work is nonetheless a factor; if the invention was obvious to try, and it was self-evident that it would work, then it is almost certainly obvious. But the converse is not true; if the invention was obvious to try, and not self-evident that it would work, the other factors come into play. If it is tried and works readily with routine methods, as in Johns-Manville, or in a routine salt-screen, then it will be obvious, even if the outcome was not predictable in advance; if it is tried and eventually works, but only after long and arduous trials, or after unforeseen hurdles are overcome, then it may not be obvious. (And because being obvious to try is a requirement, if it was not obvious to try in the first place, it will not be obvious, even if it was self-evident that it would work once the idea was conceived of.)

I must say that I have always found the discussion of the obvious-to-try analysis in Sanofi to be oddly elusive; it makes sense at first, but then the more you try to pin it down to a structured test, the less sense it makes. Locke JA’s decision is very helpful in pinning down one source of the of the confusion, and properly laying it to rest.

*In fact, polyacrylamide had not worked when the patentee had initially tried it, but it was held that it would have worked had a person skilled in the art tried it, and it was the patentee’s incompetence that had led to the initial failure. The patentee was obliged to accept this position, as the patent did not disclose the particular procedure the patentee had successfully implemented and if the procedure was not obvious then the patent would have been void for insufficiency.

Patentable Subject-Matter and Combinations

Apotex Inc v Janssen Inc 2021 FCA 45 Locke JA: Webb, Boivin JJA affg Janssen Inc v Apotex Inc 2019 FC 1355 Phelan J

            2,661,422 / abiraterone acetate & prednisone / ZYTIGA / old NOC

In this decision Locke JA for the FCA has affirmed Phelan Js decision under the old NOC regulations that Janssen’s 422 patent, to a combination of abiraterone acetate and prednisone for the treatment of a prostate cancer, to be valid and infringed by Apotex’s APO-ABIRATERONE product: see here and here for discussion of Phelan J’s decision. Locke JA's decision on appeal is relatively brief, but there are important developments in respect of demonstrated utility, a significant clarification of the obvious-to-try analysis, as well as observations on patentable subject-matter as it relates to combinations.

In this post I’ll outline the facts and discuss patentable subject-matter: the key point is simply that there is an open question as to whether a synergistic effect is required for a combination to constitute patentable subject-matter.

The technology is complicated [6], and I’m not sure the facts outlined below are entirely accurate, but I believe it is good enough to understand the issues. 

Facts

The invention relates to a treatment for prostate cancer, in particular a combination of abiraterone acetate and prednisone. Testosterone, produced primarily in the testes, was known to promote the growth of cancer cells. The primary treatment for prostate cancer was therefore suppression of androgens, specifically testosterone, in the testes. [7] However, testosterone is also produced in the adrenal gland, and patients will often see a resumption in the progress of their cancer even after testicular androgen production is suppressed. This is known as castration resistant prostate cancer (CRPC) [7].

It was known that CRPC could be treated by suppressing residual androgen production in the adrenal gland using adrenal androgen inhibitors, such as ketoconazole (KC) and aminoglutethimide (AG) [8]. However, the adrenal gland also produces other hormones, such as glucocorticoids, and suppression of androgen production in the adrenal gland could cause serious side effects due to suppressed glucocorticoid production [8]. Consequently, glucocorticoid replacement therapy, by co-administration of a glucocorticoid, such as prednisone and dexamethasone, was known to be desirable to minimize the side effects [9].

Abiraterone acetate (AA) was a known adrenal androgen inhibitor, though it seems to have been relatively new at the relevant time. It was known to have a different mechanicism of action from KC and AG, and consequently was not expected to require glucocorticoid replacement therapy [10]. The 422 patent claimed the combination of AA and prednisone for the treatment of prostate cancer [FC 38]. Apotex is seeking to market AA, but the product monograph will instruct that it be used in combination with prednisone, so inducing infringement [55]–[58] if the claims are valid.

On validity, Apotex argued (inter alia) that administering prednisone with an adrenal androgen inhibitor was known to be desirable, AA was an adrenal androgen inhibitor, and so it would be obvious to administer prednisone in combination with AA. Phelan J rejected this on the basis that AA’s different mechanism of action meant that it was not obvious that AA would have side effects that would require glucocorticoid replacement therapy with prednisone [FC 197]. This is even though, as it turns out, AA does have side effects, and glucocorticoid replacement therapy is required, and that is in fact why prednisone is administered in combination with AA in clinical practice today [5].

Even so, just throwing in prednisone along with AA would not constitute invention. Janssen argued that the combination was inventive because the inventors had discovered that, surprisingly, prednisone was useful in combination with AA because of synergistic anti-cancer effects, and not merely to treat side effects. Phelan J found that even though prednisone is in fact co-administered primarily to treat the side effects, there is a scintilla of synergistic effect [221].

As I noted in my post on Phelan J’s decision, “The result is that Janssen is able to prevent Apotex from marketing abiraterone in combination with prednisone to control side effects, on the basis of a mostly wrong ‘discovery’ that prednisone acts synergistically with abiraterone.”

Patentable Subject Matter

As discussed here, at first instance Phelan J indicated that in the case of a combination invention there is a requirement for a synergistic effect as a matter of “patentable subject matter” [132]. In my post I had suggested that any requirement for synergy in a combination should be addressed as a matter of obviousness, and not by a distinct requirement of patentable subject matter. Janssen made a similar argument in the FCA [21]. Locke JA remarked that the argument “is an interesting one,” but “this is not the case to decide the issue,” as Phelan J had accepted that there was a synergistic effect, and the point would not affect the outcome [22]. This is very welcome, as it shows that there is a live issue as to whether there is a separate subject-matter requirement in respect of combination inventions. The point can therefore be addressed in a suitable case without assuming that the law is settled.

While that’s all that can be drawn from this decision, I can’t resist the urge to elaborate on the issue. As I understand it, when patentable subject matter arises as a separate requirement, it means that the claimed subject-matter is of a nature that it cannot be patented, even if it is new, useful, non-obvious and fully disclosed. That was the case, for example in Harvard Mouse 2002 SCC 76, where a claim to an a “transgenic mouse” was held to be unpatentable, even if it was new, useful, inventive and fully disclosed. Similarly, it is substantively controversial whether methods of medical treatment—such as a claim of the form “use of compound X in range from A to B to treat disorder Y”—are patentable subject-matter, but the debate itself turns on the same concept of patentable subject-matter as Harvard Mouse; whether claims to subject-matter of that nature are unpatentable, even if the claimed subject-matter is new, useful and non-obvious.

I have difficulty seeing that kind of issue here. I think it is clear that a combination of the type claimed in this case may be patented. For example, suppose the cause of castration resistant prostate cancer was entirely unknown, and in a scientific breakthrough the inventors had discovered that the source was adrenal androgen production; they realized that AA could inhibit that production, and they also did enough testing to discover the side-effects, and realized that adding prednisone would relieve those side effects. On those facts, the combination of AA and prednisone would be new, useful and inventive, and I think it is uncontroversial a claim of exactly the same form as was at issue in this case would be patentable subject-matter. If that is right, then the objection on the facts in this case is not based on the same type of subject-matter objection that was addressed in Harvard Mouse. Another type of subject-matter objection is the rule against abstract claims, set out in s 27(8); but the claims in this case are clearly not abstract. So if there is actually a subject-matter objection here somewhere, it is of an entirely new type. As suggested in my previous post, rather than making up a new kind of subject-matter objection, the better way to proceed is treat the matter as a question of obviousness.

Locke JA also remarked that “An aggregation is problematic because it does not provide more than was already available to the public,” and in this case “there is no dispute that the combination in issue provides improved results over what was previously known” [23]. This seems right to me on the facts of the case, but I would suggest that the question should be simply whether the combination was obvious; this implies that while improved results are relevant — a combination that gives exactly the same results as the individual components is unlikely to be inventive—but it is not necessarily determinative. It may be obvious that the combination will give improved results, as when an adjuvant is used in combination with a vaccine, but that does not mean that the combination of a well-known adjuvant with an existing vaccine is inventive. Alternatively, it may be obvious to use the combination for other reasons, and the improved results is a “golden bonus” that does not transform the obvious into the non-obvious. In either of these scenarios, the claimed invention might be obvious even though it gives improved results.

On appeal, Apotex argued that in the case of a combination invention, the comparison should not be with the results of either drug alone, but with “the sum of the two component drugs” [19]. I’m not sure I understand this argument, which was set out only briefly, and in any event Locke JA rejected it [22]–[23].

Essential Reading on Costs

Allergan Inc v Sandoz Canada Inc 2021 FC 186 Crampton CJ

2,507,002 / silodosin / RAPAFLO / NOC

This costs decision by Crampton CJ provides an extremely helpful summary of costs principles in patent litigation at [19]–[36] and it will no doubt be the “go to” decision for costs awards going forward. Crampton CJ's discussion will be essential reading, so I’ll simply flag it without further comment.

The underlying decision is 2020 FC 1189 (discussed in posts here and here). 

PS: The following remark is of particular interest (my emphasis):

 [28] In recognition of the fact that Tariff B no longer provides an adequate level of partial indemnification, the Federal Courts Rules Committee decided in 2016 that the amount recoverable under Tariff B should be increased by approximately 25%: Minutes of the October 28, 2016 Meeting of the Rules Committee. Following a further consultation with the bar, a sub-committee of the Rules Committee is preparing proposed amendments for publication in Part I of the Canada Gazette and approval of the Governor in Council.

Something to look forward to.

Whether Public Viewing Amounts to Enabling Disclosure is Context Dependent

Betser-Zilevitch v PetroChina Canada Ltd 2021 FC 85 Manson J

            2,584,627 / Steam-Assisted Gravity Drainage

In this decision, that turned primarily on claim construction, Manson J held the 627 patent to be valid but not infringed. There is no new law, but the decision illustrates that the claims may be construed with reference to the function of the invention, and that whether public viewing of the prior art amounts to prior disclosure is context dependent.

The 627 Patent generally relates to a modularized (Steam-Assisted Gravity Drainage) SAGD well pad for heavy oil (bitumen) production [10]. A “well pad” is a collection of well pairs used in extraction of heavy oil production. “Modularized” means that the well pad is made off-site in modules that are then transported to the well site and assembled. This is in contrast to “stick built” well pads that are entirely constructed on-site. Construction of a well pad is a major undertaking that takes months. The main advantage of modularization is reduced costs flowing from reduced on-site construction costs [7]. The well pad has several levels, which, as I understand it, are like floors in a building, except that the levels are open. The key aspect of the 627 patent was that the main flow lines were on the “first level” [12], [116], [117].

In the defendant’s allegedly infringing well pads the production flow lines were located on a higher level, which requires scaffolding for workers in the field to access, and not on the lowest level [135]. The key claim construction issue was therefore as to the meaning of “first level” in the claim. The experts disagreed as to the meaning of the term. In light of the “ambiguity” in the claims, Manson J held that the term “would be understood with reference to its functions and objects, as provided in 627 Patent specification” [116]. The object was to constrain the placement of the flow lines at a level such that they would be connected without the need for scaffolding, thus improving safety and reducing costs [116]–[118]. This illustrates that reference to objective of the invention may be useful to construe the claims.

Because Manson J held that there was ambiguity, he didn’t need to address the question of whether recourse to the disclosure is appropriate even in the absence of a finding that the claims are ambiguous. I can’t resist digressing on this point. In my view, recourse to claims is always appropriate: as Lord Hoffmann pointed out in Kirin-Amgen [2004] UKHL 46 [33], the skilled person “reads the specification on the assumption that its purpose is both to describe and to demarcate an invention.” Words take their meaning in part from the context in which they are used; the common general knowledge is part of the context, and I can’t think of any reason why the disclosure should not also be considered part of the relevant context. Since the disclosure and claims are both part of the specification, a skilled person reading the claims would have to make an effort to avoid seeing the disclosure, and I can’t think of any justification for such an artificial approach. In this case, Manson J found an ambiguity allowing recourse to the specification on the basis of a disagreement between the experts as to the meaning of the terms. If that is all it takes, then we might as well just recognize that consideration of the disclosure is always appropriate in claim construction.

An issue that arose in respect of obviousness was the relevance of prior art modularized well pads that had been transported on public roads and parked uncovered in a public parking lot [159]. The patentee argued that that “[m]erely viewing, without more” is not enough [164] relying on Bombardier 2017 FC 207 [490]. Manson J noted that “The degree of scrutiny required upon visual inspection is context specific. The level of scrutiny required to discern the external elements of a skate in a public arena, as in Bauer Hockey FC [2010 FC 361], above is evidently higher than the scrutiny required to view the components of a large SAGD module” [165]. The point, as I understand it, is that in order to be set up in an anticipation or obviousness attack, the prior art must have been become “available to the public” before the relevant date, and the information which is the quid pro quo for the patent is made available only if the requirements for enabling disclosure are satisfied. A view from a distance of a well pad in which flow lines are visible may be an enabling disclosure, even though a view from a distance of hockey skates does not provide an enabling disclosure of the details of the fabrication method.

PM(NOC) Related Rights of Action not Subject to Limitation Period

Merck Sharp & Dohme Corp v Sandoz Canada Inc 2020 FC 1180 Southcott J

2,518,435 / sitagliptin / JANUVIA

I believe this is the first decision addressing s 8.2 of the PM(NOC) Regulations, which provide for “Related rights of action,” as described by the RIAS. In particular, s 8.2 provides that “[o]n receipt of a notice of allegation” the patentee may bring an action for infringement of a patent, other than the patents that are set out in the NOA, that could result from the grant of an NOC. The RIAS explains that “Such patents can create legal uncertainty if there is risk that they could be infringed by the generic product. To facilitate legal consideration of such patents without expanding the scope of proceedings under the proposed Regulations, related rights of action are proposed.” The RIAS refers by way of example to patents claiming chemical intermediates or processes for making a drug, which may be infringed by the sale of a particular drug but which are not eligible for listing. A quick look at the patent at issue in this case suggests that it falls into both these categories, as being a process for making intermediates.

The question raised in on this motion is whether s 8.2 is subject to a limitation period, in the same manner as the primary provision, s 6, which requires the patentee to bring an action respecting the patents that are set out in the NOA within 45 days. The parties and Southcott J all agreed that the matter was appropriate for determination by summary judgment [20], [22].

Southcott J held that there is no limitation period applicable to actions brought under s 8.2 [77]. The first point, and a very powerful one, is that there is nothing in the text of s 8.2 suggesting that there is a limitation period, in contrast to the clear limitation period set out expressly in s 6 [41]–[42]. As the FCA has noted, “the clearer the ‘ordinary meaning’ of the text, the more compelling the contextual considerations must be in order to warrant a different reading of it, especially when that involves adding words to those used by the legislator” Biolyse Pharma 2003 FCA 180 [13].

The role of the text is “dominant” (Canada Trustco 2005 SCC 54 [10]), but not absolute, and accordingly Southcott J went on to consider a variety of purposive and contextual arguments made by the parties. The defendants’ basic argument was that the purpose of the Regulations generally and s 8.2 in particular is to reduce the legal uncertainty associated with generic entry [38], [46]. The plaintiffs’ argued that the purpose of s 8.2 in particular is to remove the previously existing barriers to bringing a quia timet action, but not necessarily to eliminate legal risks prior to generic product launch [46]. (And see [35], explaining the prior hurdles to a quia timet action.)

After canvassing the general principles of statutory interpretation, Southcott J considered the specific arguments made by the parties. The defendants generally relied on the RIAS and a high level assessment of the legislative purpose. The plaintiffs responded directly to this by noting that even if the we were to accept that s 8.2 incorporated a limitation period, the defendants acknowledged this would only apply to an action brought under that provision, ie a statutory quia timet action. A patentee who missed the deadline would still be free to sue on an unlisted patent following market entry, when it is no longer necessary to bring the aciton quia timet. This is in contrast to an action related to the patents that are the subject of an NOA, which, pursuant to s 6.01 cannot normally be the basis for a subsequent action [64]. The defendants did not go so far as to argue that a parallel finality provision should be read in along with the limitation provision. Consequently, it is difficult to conclude that the purpose of the provision is to eliminate the generic’s legal risk [69]. If anything, incorporating a limitation period in s 8.2 without the accompanying principle of finality would increase risk and expense, as the patentee would simply wait until launch to bring its action.

The plaintiffs also relied on several arguments turning on the way s 8.2 and a putative limitation period would interact with the Regulations as a whole. For example, the plaintiffs noted that the NOA provides the first person with sufficient information to be able to decide whether to bring an action quickly enough to meet the 45 day deadline, but the “as the NOA is not directed to unlisted patents, the first person would not be similarly equipped to commence a s 8.2 action within the same 45 days” [66]. The patentee made several other arguments of a similar nature, which Southcott J generally accepted. It would take me as much time to summarize them as the original decision, so I’ll just say that I found Southcott J’s analysis to be careful and convincing.

The cumulative weight of these contextual and purposive arguments, combined with the clear textual argument, is inescapable. Southcott J therefore concluded that there is no limitation period applicable to the actions brought under s 8.2 [78]. (Perhaps it is more accurate to say that s 8.2 does not incorporate any limitation period, as the actions brought under that provision are no doubt subject to the general limitation periods under the Act.)

Given Southcott J’s careful consideration of the provision, his statement of its purpose will be helpful if it requires interpretation on some other point in the future:

[71] I accept that the legislative purpose of s 8.2 is the removal of previously existing barriers to quia timet actions, so as to facilitate legal consideration of unlisted patents and thereby address uncertainty resulting from the risks associated with such patents. However, this purpose does not require the elimination of such uncertainty within any particular timeframe, as no interpretation of s 8.2 can eliminate the uncertainty that the potential for post-launch litigation of unlisted patents will continue to present. Rather, the elimination of the common law barrier achieved by s 8.2 permits earlier access to legal consideration, and therefore earlier resolution, of unlisted patent infringement claims. This result is in keeping with the overall objective of striking a balance between effective patent enforcement and timely generic market entry.

Caution in Following UK Caselaw Regarding Added Matter

Western Oilfield Equipment Rentals Ltd v M-I LLC 2021 FCA 24 Locke JA: Gleason, Mactavish JJA affg 2019 FC 1606 O'Reilly J

            2,664,173 / Shaker and Degasser Combination

Previous posts have provided some background on this case and addressed reasonable compensation, the Gillette defence and the “best mode” requirement. This post turns to Locke JA’s comments regarding added matter.

Section 38.2(2) of the Act provides that an application cannot be amended to add matter “that cannot reasonably be inferred” from the specification as it was on its filing date. This provision broadly corresponds to Art 123(2) of the EPC, which provides that the application or patent may not be amended to add matter “which extends beyond the content of the application as filed.” As previously noted, the claims that were infringed had been introduced during prosecution, after the patentee became aware of the appellants’ product. The appellants argued that these claims were invalid for added matter [138]. There is little Canadian caselaw dealing with our provision, and the appellants had therefore relied on UK caselaw as support for a “strict” test that “subject matter should be considered to have been added unless such matter is clearly and unambiguously disclosed in the original application either explicitly or implicitly” [140]. (See here for my discussion of O’Reilly J’s decision on this point.)

Locke JA remarked that we should be “wary” of following the UK approach, for three reasons. First, “it presumes that matter has been improperly added, and places the burden on the respondent to establish otherwise,” whereas in Canadian law a patent is presumed to be valid (s 43(2)) and accordingly the burden is on the party attacking the patent. Second, the text of the provision is different, and in particular the EPC provision* does not have any kind of “reasonableness” language: [142]. Third, the UK provision provides explicitly for patent revocation, while s 38.2 does not [143]. Accordingly, Locke JA simply applied the statutory “cannot reasonably be inferred” test and held that the feature in question was “at least reasonably inferable” from the original specification [147].

I agree with Locke JA we should not adopt the UK approach uncritically, for all the reasons he gives. On the other hand, comparative law can potentially be very useful, particularly when, as in this case, there little Canadian caselaw and a great deal of UK caselaw; the foreign caselaw can help illustrate the kinds of problems that may arise and that need to be taken into consideration, even if we do not adopt the same solutions as foreign law. For example, the problem of “intermediate generalization” arises when the specification provides a number of specific examples and the patentee seeks to claim a broader class which is said to be exemplified by those examples. This has caused considerable difficulty and has been addressed in a number of EPO Board decisions and UK cases: see eg Nokia v IPCom [2013] RPC 5 [56]ff. While the problem does not arise in this case, the European jurisprudence is likely to be useful in illuminating the issues when it does arise, even if the Canadian courts choose not to adopt the European solution.

In my view, Phelan J struck exactly the right note in Amazon.com 2010 FC 1011 [32] when he observed that it can be useful to look to other regimes when faced with a question that is novel in Canadian law, but this must be done “mindfully” [32].

A “mindful” consideration of foreign law means that we should not simply pluck a test from foreign jurisprudence. It is important to get the foreign law right before we decide whether to adapt it to the Canadian context. In the UK approach, added matter is permisible if it can be “implicitly” inferred from the original specification, and this may soften the apparently strict nature of the test. So, another articulation provided by Jacob LJ in Vector Corp [2007] EWCA Civ 805 [4] is that:

[T]he test of added matter is whether a skilled man would, upon looking at the amended specification, learn anything about the invention which he could not learn from the unamended specification.

Given that a skilled person approaches the specification with “a mind willing to understand,” it may be that the test is not so strict after all. On the one hand this suggests that UK law may provide some helpful guidance despite the differences in the text; but on the other hand, the need to understand the subtleties of foreign law is another reason to be “wary” of it.

Another point is that it may be helpful to look to the purposive considerations adverted to in foreign law. To the extent the purpose of the Canadian and UK provisions are different, that is additional reason to be wary of the same test, but to the extent the purpose is the same, that is a reason to consider the foreign test more closely, always subject to the text of the provision.

This is perhaps most relevant to Locke JA’s third point, that the UK Act provides explicitly for patent revocation while s 38.2 does not [143]. This raises the question of whether added matter contrary to s 38.2 is a basis for invalidating a claim in a granted patent, or whether it is only ground for refusing an amendment during prosecution. Some of the purposive considerations discussed by Jacob LJ in Vector Corp are potentially relevant to this issue:

[5] The reason for the rule was explained by the Enlarged Board of Appeal of the EPO in G1/93 ADVANCED SEMICONDUCTOR PRODUCTS/Limiting feature [1995] EPOR 97 at [Reasons 9]:

"With regard to Article 123(2) EPC, the underlying idea is clearly that an applicant shall not be allowed to improve his position by adding subject-matter not disclosed in the application as filed, which would give him an unwarranted advantage and could be damaging to the legal security of third parties relying upon the content of the original application."

[6] Mr Richard Arnold QC provided a clear articulation as to how the legal security of third parties would be affected if this were not the rule:

The applicant or patentee could gain an unwarranted advantage in two ways if subject-matter could be added: first, he could circumvent the "first-to-file" rule, namely that the first person to apply to patent an invention is entitled to the resulting patent; and secondly, he could gain a different monopoly to that which the originally filed subject-matter justified.

These considerations seems to me to also be relevant in the interpretation of the Canadian provision, always subject to the text.

*Note that the UK courts rely directly on Art 123(2) rather than on the somewhat differently worded s 76(3) of the Patent Act 1977, which was a “cack-handed” implementation of the EPC provision: Napp Pharma [2009] EWCA Civ 252 [69].

Is the Best Mode Requirement Restricted to Machines?

Western Oilfield Equipment Rentals Ltd v M-I LLC 2021 FCA 24 Locke JA: Gleason, Mactavish JJA affg 2019 FC 1606 O'Reilly J

            2,664,173 / Shaker and Degasser Combination

Previous posts have provided some background on this case and addressed reasonable compensation and the Gillette defence. Locke JA also made two noteworthy points with respect to the best-mode requirement set out in s 27(3)(c), which requires that the specification must “in the case of a machine,” explain the best mode of practising the invention. As discussed here, O’Reilly J had dismissed this argument on the basis that it “relates solely to machines and, as I understand the patent, it claims a method and a system, not a machine” [FC 146], [118]. Locke JA remarked that the mere fact that the claim at issue was phrased as being to “a system” did not in itself establish that it is not to a machine [119]. This makes sense to me; the question of whether the claim is to a machine should be a matter of the substance of the claim and not its form.

More importantly, Locke JA stated that “there is considerable doubt as to whether, despite the wording of paragraph 27(3)(c), the best-mode requirement is limited to machines,” citing various commentators [119]. This is interesting given that the FCA in Pfizer v. Novopharm / sildenafil (NOC) 2010 FCA 242 [72] approved Snider J’s holding in Ramipril FC 2009 FC 676 [329] that “the ‘best mode’ obligation only arises in the case of a patent to a machine.” I must say that Snider J’s textual analysis strikes me as fairly compelling, but far be it for me to dissuade the FCA from relying on commentators. Locke JA’s observation was expressly obiter, and the point made no difference to the outcome, but nonetheless the point can no longer be considered settled.

The Gillette Defence Is Typically Unhelpful

Western Oilfield Equipment Rentals Ltd v M-I LLC 2021 FCA 24 Locke JA: Gleason, Mactavish JJA affg 2019 FC 1606 O'Reilly J

            2,664,173 / Shaker and Degasser Combination

Friday’s post provided some background on this case and addressed the issue of reasonable compensation. Today’s post reviews Locke JA’s very helpful discussion of the Gillette defence. (The discussion did not turn on the way the issue arose on the facts and the issue did not affect the result.)

Locke JA began by reiterating the classic understanding of the Gillette defence, which permits a defence based on establishing that its allegedly infringing product is the same as, or not patentably distinct from, the prior art; if that can be established on the facts, the asserted claims must necessarily be invalid or not infringed: [75]–[76] citing Gillette (1913) 30 RPC 465 (HL) and JK Smit [1940] SCR 279. While this is not new law, it is important nonetheless, as Locke JA emphasized that “contrary to some of the jurisprudence of the Federal Court, the success of a Gillette defence does not depend on a conclusion that the claim in question is invalid for anticipation or obviousness. Quite the contrary, the principal benefit of a Gillette defence is to avoid the need to construe the claims and reach a conclusion on validity and infringement issues.” [79]. Locke JA noted that the FCA itself in Eurocopter had skirted with a similar misunderstanding [80]

The theory of the Gillette defence is that it permits “a shortcut around the often difficult and time-consuming process of construing the claims of a patent, and then determining whether those claims are valid and whether they have been infringed” [77]. Unfortunately, in practice the Gillette defence has often complicated rather than simplified the proceedings. The defendant will rarely risk everything on the Gillette defence, but will typically assert it as an alternative to the analysis of claim construction and validity [78]–[79]. This means that even when the Gillette defence is raised, the court will normally have to construe the claims and assess validity and infringement, in order to address the other anticipation and infringement arguments. In that case, the Gillette defence is superfluous; rather than simplifying proceedings, by obviating the need to consider infringement and validity, it complicates matters by introducing an extra and unnecessary argument, which may lead to confusion [79].

The general message is that when claim construction, validity and infringement are fully argued, it is probably preferable to avoid the Gillette defence entirely.

Questions on Reasonable Compensation Answered — and Left Open

Western Oilfield Equipment Rentals Ltd v M-I LLC 2021 FCA 24 Locke JA: Gleason, Mactavish JJA affg 2019 FC 1606 O'Reilly J

            2,664,173 / Shaker and Degasser Combination

In this decision Locke JA for the FCA affirmed O'Reilly J’s holding that certain claims of M-I’s 173 were valid and had been infringed by Western Oilfield Eqpt. The decision turned largely on the deferential standard of review applicable to questions of fact, and Locke JA pointedly remarked that the appellants had not paid sufficient attention to the standard of review [10]. The appellants raised approximately two dozen issues on appeal [7]. Locke JA was not impressed. He remarked on “the lack of wisdom of raising so many issues on appeal,” noting that this undermined the appellant’s case by obscuring the real issues and wasted the Court’s time [9]. As a result of the appellants’ “failure to reasonably limit the issues before the Court, and the respondent’s success on each argument raised,” costs were awarded at the top of Column V of the Tariff [162].

Despite the largely factual nature of the issues, the FCA did address a number of legal points. I’ll provide background and address reasonable compensation in this post, and subsequent posts will look at the Gillette defence, best mode and added matter. In addition, Locke JA reaffirmed the well-established law that the four-step Sanofi test for obviousness is not mandatory [109] and the fact that the embodiment disclosed in the specification is not commercializable does not mean that it lacks the necessary scintilla of utility needed to support a patent [124].

Background

As discussed here, the 173 patent relates to a machine called a “shale shaker,” used in the oil and gas industry to remove solids from the slurry that emerges from an active well in order to separate the drilling fluid for reuse. A shale shaker shakes the slurry over a screen to allow the fluid to fall through while the rock cuttings are carried away. Shaking alone does not remove all of the fluid, and the cuttings remain wet after passing through a standard shaker. The invention consisted of a method and system for applying a vacuum (“pressure differential generator”) to the cuttings to recover more of the drilling fluid. One point that underlay several of the appellants’ objection was that the patent was laid open on April 10, 2008, and the appellants’ activities did not infringe the claims as they were drafted at that time. The claims that were infringed were introduced during prosecution, on October 2, 2013, after the patentee became aware of the appellants’ product [53], [FC 14], [FC 89].

There were a number of contentious issues on claim construction, but these turned on the evidence and, unsurprisingly—given that the claims were added to capture the appellants’ product—O'Reilly J ultimately construed the claims in favour of the patentee. The finding on infringement followed directly. The appellant raised the motivation of the patentee in amending the claims in a couple of ways [22], [144], but Locke JA noted that the respondent’s motivation in amending the claims is in itself irrelevant to either claim construction or validity [22]. As he observed at [21], quoting his own prior decision in Camso 2019 FC 255 [197] aff’d 2020 FCA 183:

A patent applicant is perfectly entitled, and indeed is well-advised, to draft patent claims with an eye on competitors’ products. The limitation is that the applicant must respect all of the requirements for valid claims.

Reasonable Compensation

The decision raised three issues in the interpretation of s 55(2), which provides that the patentee is entitled to “reasonable compensation” for any damage sustained by the patentee after the specification was laid open and before the grant, “that would have constituted an infringement of the patent if the patent had been granted on the day the specification became open to public inspection.” For simplicity, Locke JA referred to this as “pre-issuance infringement” [52].

There were two main issues on appeal. One of the appellants, FPM, had apparently stopped doing business in 2014, prior to the issuance of the 173 patent in 2015. The first question was whether a party who engages in pre-issuance infringement “can avoid liability under subsection 55(2) by discontinuing the activities in question prior to issuance of the patent.” That is, must a party be engaged in infringing activity as of the date of issuance in order to be liable for pre-issuance infringement? The answer is no. There is nothing in the text of the provision to suggest that result [59]. Further, the purpose of s 55(2) is “to compensate inventors whose published inventions are used without permission before they can enforce their rights,” [63] and “it would defeat the purpose of the provision if the pre-issuance infringer could continue its activities, possibly for many years, and then avoid all liability by discontinuing those activities just before the patent issues” [63].

The second question was whether a party can be liable for inducement of pre-issuance infringement. The answer is yes. Inducement is “merely a form of patent infringement, not a distinct tort” [60]; there is nothing in the text to suggest liability for inducement is excluded [62]; and it would “defeat the purpose of the provision if one could avoid liability by inducing another to directly infringe. The reasons for imposing liability for infringement on one who knowingly induces a third party to infringe after a patent has issued apply equally before issuance” [63].

Neither of these issues strikes me as particularly difficult, and I agree entirely with Locke JA’s analysis.

The more difficult issue, to my mind, concerns the timing of the liability. As noted above, the appellants’ activities did not infringe the claims as they were drafted at the time the patent was laid open. The claims that were infringed were introduced five years later during prosecution, after the patentee became aware of the appellants’ product [53], [FC 240]. It was common ground on appeal, and, as I understand it, also at trial, that the appellants’ could not be liable for any of its activities prior to 2 October 2013, when the infringed claims were introduced [53]. O'Reilly J held that reasonable compensation should be awarded for the period starting 2 October 2013, and this was affirmed on appeal [66].

The difficulty is that s 55(2) makes a party liable for activity “that would have constituted an infringement of the patent if the patent had been granted on the day the specification became open to public inspection.” It was common ground that the appellants’ activities would not have constituted an infringement of the claims as of the date the patent was laid open, and it would seem to follow on a straightforward reading of the text that the appellants are therefore not liable for reasonable compensation for any part of the period prior to issuance—not even for the period after 2 October 2015 when the claims were amended to catch the appellants' product. The rule applied in this case is that a party will be liable for activities that would have constituted an infringement if the patent had been granted at any time subsequent to the date the patent was laid open, which does not seem to me to be entirely consistent with the text. That is not conclusive, of course; as discussed here, there might be contextual or purposive considerations that are also relevant one way or the other.

This point does not seem to have been argued either at trial or on appeal, and it would appear to remain open. Locke JA noted that FPM stopped doing business in 2014 which was after the claims had been amended to encompass its activities. He stated that this means that FPM could not avoid liability based on its activities being entirely prior to the amendment, “even if that were a basis for avoiding liability. I express no opinion here as to whether that would be a basis for avoiding liability” [56]. I take this to mean that the timing issue remains open. Locke JA did also state that the facts are not in dispute, “and there is no argument that either of the appellants is liable for any of its activities prior to October 2, 2013" [53]. I take this to mean simply that there was no argument, and not that Locke JA was necessarily endorsing this position as a matter of law.

Skepticism Regarding I G Farbenindustrie Test for Selection Patents

Bristol-Myers Squibb Canada Co v Pharmascience Inc 2021 FC 1 Zinn J

2,461,202 / 2,791,171 / apixaban / ELIQUIS

This decision consolidated four actions concerning the 202 patent, which claims the compound apixaban and its use in treating thromboembolic disorder, including stroke [2], [27], and the 171 patent, which claims various formulations of apixaban[2], [114]. The decision raises several legal issues, though largely as a result of some “creative” submissions by the defendants [125]. The most important point is that Zinn J expressed considerable skepticism regarding the continued vitality of the I G Farbenindustrie test for selection patents. Zinn J addressed the 202 patent first and then the 171 patent. I won’t cover every issue, but only those that caught my eye.

Date for assessing sufficiency

The first attack on the 202 patent was based on insufficiency. There was some discussion of whether the date for assessing sufficiency is the date of filing or the date of publication [36]–[42]. I’ll note that there has indeed been some debate in the case law on this issue, but the point was settled in Idenix v Gilead 2017 FCA 161 [46], holding that the correct date is the filing date, in a case that was crucial to the result. (I’d suggest that while Idenix ruled out the publication date, there remains an open question as to whether it should be the claim or the filing date, as that distinction was not at issue in Idenix—I’d argue that it should be the claim date, but that’s for another day.) Idenix was not cited by Zinn J, presumably because it was not cited to him, and consequently he appears to have considered the publication date to be the relevant date [49].

In any event, so far as I can tell, nothing turned on this point. As both filed and published the application claimed 10¹⁰⁰ compounds, and it was only just before issuance that the claims were narrowed to one compound, namely apixaban [37]. The defendants apparently argued the patent was insufficient because it did not enable all 10¹⁰⁰ compounds to be made [37]. That is, sufficiency had to be assessed in terms of the document as it existed at the relevant date (whatever that date might be). That is certainly a very creative argument, but. . . no, “The test for sufficiency is whether [the skilled person] is in a position to work the invention. The invention is that claimed in the patent, and until it is issued, there is no patent” [49]. That must be right — if it weren’t almost every granted patent would be invalid, because claims are routinely amended during prosecution in response to objections by the examiner, which necessarily takes place after filing. If anticipation, utility and obviousness all had to be assessed as of the claim date or filing date, then amendments to the claims could never cure any objection.

Studies demonstrating utility need not be referenced in the patent

The defendants also argued that the patent was invalid for lack of utility because the study demonstrating utility must be referenced in the patent. Zinn J rejected this proposition, relying primarily on statements by the SCC in Sildenafil 2012 SCC 60 [39]–[40] and AstraZeneca 2017 SCC 36 [58]. I’ll add that Gleason J (as she then was) reviewed the authorities in Lilly v Apotex 2015 FC 1016 [138]–[141]. She pointed out that the FCA authorities supporting such a requirement were obiter, and there are many cases to the contrary, and she therefore concluding that “the weight of authority is to the effect that the evidence of demonstrated utility need not be referenced in the patent for the patentee to rely on it” [142]. I think this point can now be considered settled, though it would certainly be desirable to have it addressed by the FCA to remove any lingering doubt.

A genus too large to think about does not anticipate

The most interesting issue was an anticipation attack based on 2,349,330, which disclosed and claimed a large class of compounds that were potentially useful in the treatment and prevention of thromboembolic disorders [79]. The class is very large. One of the experts for Sandoz did a calculation of the number of compounds disclosed and came up with “Some number that is just larger than I can think about.” He agreed that it was “more possibilities than stars in the universe” [80]. On the evidence provided by Sandoz’s experts, the class encompassed apixaban [77], but did not specifically disclose it, or describe how to make it [82]. On this evidence, Zinn J had no difficulty in concluding that the 330 patent did not anticipate apixaban [83].

Nor was apixaban obvious over the 330 patent, as only a small percentage of the disclosed compounds would actually be effective in treating thromboembolic disorders, and identifying which would involve “complex, time-consuming, unpredictable research” [87]. Obviousness-type double patenting failed for the same reason: [96]–[97].

IG Farbenindustrie test doubted

Apixaban is therefore a classic selection over the 330 patent. Significantly, it was only after finding that apixaban was neither anticipated nor obvious over the 330 patent that Zinn J turned to question of selection patents as such and the three-part test set out in IG Farbenindustrie (1930), 47 RPC 289 (Ch) 322-23, that was approved in Sanofi 2008 SCC 61 [9]-[11]. The factors, in summary, are: (1) a valid selection must possess some substantive advantage over the genus; (2) all of the selected members must possess the advantage; (3) the advantage must be peculiar to the selected group. Zinn J held that these three propositions are “not a stand-alone basis to find a selection patent invalid,” relying on the express holding to that effect in Olanzapine 2010 FCA 197 [33] where the FCA stated that an assessment of whether the IG Farbenindustrie conditions has been met “does not constitute an independent basis upon which to attack the validity of a patent” [104]. Despite this holding by the FCA, the IG Farbenindustrie conditions continue to resurface as an independent ground of attack, most recently in Lilly v Mylan 2020 FC 816, discussed here.

Zinn J’s contribution to this debate was to go back and quote from the explanation for these factors given by Maugham J in IG Farbenindustrie itself [100]. In the passage quoted by Zinn J, Maugham J specifically connected the first and second factors to standard grounds of attack, namely utility and insufficiency. The explanation given by Maugham J for the third factor is somewhat more obscure, and also more controversial, as it was specifically criticized in Dr Reddy’s [2009] EWCA Civ 1362 [39]. I suspect that the third factor was an imperfect attempt to avoid the problem of arbitrary selection, which is properly treated as an aspect of non-obviousness. I might also add that I am not at all convinced that the first and second factors are properly related to utility, as Maugham J indicated. But the important point here is that Maugham J did explain the factors he set out in terms of the traditional grounds of invalidity. As I read it, Maugham J considered these factors to be a helpful way of stating the standard principles in the context of a selection patent, and not as an entirely new ground of attack. I agree therefore, with Zinn J’s observation that for Maugham J, and for Rothstein J in Sanofi referencing Maugham J’s analysis, “a failure to meet his three propositions regarding selection patents does not invalidate the patent; rather its validity is subject to the usual grounds relevant to any patent” [101]. I am very pleased to note that Zinn J also cited my blog post, Time to Relegate IG Farbenindustrie to the Dustbin of History, in which I pointed out that the SCC in Sanofi did not apply the IG Farbenindustrie as an independent ground of invalidity on the facts, but rather relied on the standard grounds of anticipation and obviousness, as Zinn J did in this case. That is why it is significant that Zinn J addressed anticipation and obviousness before turning to the IG Farbenindustrie factors; having decided that the 202 patent was valid on the standard principles, there was no more role for the IG Farbenindustrie factors to play. Out of an abundance of caution, Zinn J nonetheless went on to hold that in any event, the 202 patent met the IG Farbenindustrie test [106]–[108].

Prior Art Teaching Away from the Invention: Anticipated but Not Obvious

Swist v MEG Energy Corp 2021 FC 10 Fothergill J

2,800,746 / Pressure Assisted Oil Recovery

In this decision Fothergill J held Swist’s 746 patent was not infringed by MEG. He also held it to be invalid for anticipation and lack of utility, though the obviousness attack failed. The decision turns largely on the facts and on claim construction, except for the holding regarding utility. One curious aspect of the decision is that the 746 patent was anticipated by one piece of prior art, but not obvious over the same prior art. That is quite unusual, but the holding strikes me as sound on the particular facts. I am not so sure about the utility holding though.

The 746 patent relates to a method of extracting oil from oil sands. The oil contained in the oil sands, often referred to as bitumen, is too thick to be pumped out of the ground directly [2]. One standard technique is steam assisted gravity drainage [SAGD]. In SAGD, a pair of parallel horizontal wells are vertically separated by a distance of roughly four to eight metres. Steam is injected in the top “injector” well, forming a “steam chamber” that heats the oil and reduces its viscosity. The now mobile oil drains down by gravity into the bottom “production” well of the pair, and can then be pumped to the surface [15]–[16]. Several well pairs are often used in parallel for recovery from the entire reservoir. The steam chamber from adjacent well pairs will eventually merge as the reservoir is depleted.

 

There are a number of modifications of the basic SAGD method. The claimed invention is one such variant, which uses a third injector well placed between the adjacent SAGD well pairs [5].

 

The claimed invention also specified the timing of when the steam is injected into the third well [34]. In particular, the 746 patent claim a method where steam is injected into the third well prior to the merger of the steam chambers from the adjacent well pairs. 

There were several terms that required construction, but this turned on the expert evidence and I didn’t see anything noteworthy in this part of the decision. Infringement turned partly on the facts and partly on claim construction, and again I didn’t see anything of particular interest. (Which, by the way, I view as a good thing: new legal points are fun, but it's a sign that the legal system is working smoothly when a decision involves nothing more than the application of settled law to the facts at hand.)

Anticipation also turned largely on the facts, but one interesting point did arise. One piece of prior art, the “Arthur Patent” disclosed adjacent SAGD well pairs with an injection well between them [145].

Swist sought to distinguish the Arthur Patent on the basis of the timing of injection of steam into the third well [148]. In particular, while the 746 patent claimed a method with injection prior to the merger of the adjacent steam chambers, the Arthur Patent recommended injection into the third well after that merger, noting that premature injection might compromise production [153], [156]. Thus the Arthur Patent taught away from the 746 patent. However, while the Arthur Patent recommended late injection, it acknowledged that activation of the third well may occur at a “distinctly earlier stage” [154].

Fothergill J held that the Arthur Patent was anticipatory, as it disclosed all the essential elements of the relevant claims [159]. This is notwithstanding that it taught away from the 746 patent:

[151] The fact that prior art “teaches away” from an impugned patent, while potentially relevant to an obviousness allegation, is irrelevant to the anticipation analysis. The fact that a piece of prior art discloses formulations that would not infringe a patent, as well as formulations that do infringe, is irrelevant to assessing anticipation.

The point is not completely novel, but it seems the caselaw is limited. Fothergill J cited Valence v Phostech 2011 FC 174 [228], which directly supports the proposition, but with very little discussion. He also cited Aux Sable 2019 FC 581 [97]–[98] and Schering-Plough 2009 FC 1128 [86]–[90], which both support a slightly weaker proposition, that “the fact that a piece of prior art teaches formulations that would not infringe a patent, as well as formulation that do infringe, is irrelevant to assessing anticipation.” So, Fothergill J’s holding does have support, but it perhaps not well-established in the Canadian jurisprudence. (Though it does appear to be well-established in the US caselaw, as Fothergill J noted [152].)

Aside from the caselaw, it strikes me that Fothergill J’s holding is sound as a matter of principle. It is now well-established that a genus claim to a large group of chemical compounds does not in itself anticipate the species within that claim, except for those species that are specifically described. The specific identification of a species constitutes the disclosure part of the novelty requirement—planting the flag on the precise destination—and, so long as it is also enabled, it doesn’t generally matter whether the skilled person would actually choose to practice that particular species. A genus patent will often specify several especially preferred compounds, and it is clear that they will all be anticipated even if, as a practical matter, a skilled person would only actually want to make one or two of those, perhaps for manufacturability or regulatory reasons. I don’t see why it should make any difference why the skilled person would choose not to make a particular embodiment.

The fact that the Arthur Patent specifically described the method claimed in the 746 patent, yet taught away from it, led to the counter-intuitive conclusion that even though the 746 patent was anticipated by the Arthur Patent, it was not obvious over the Arthur Patent [214]. This is quite ususal, but nonetheless seems right on the unusual facts.

Fothergill J also held that the 746 patent lacked utility, essentially on the basis that the 746 patent was not in fact an improvement over the prior art SAGD method: “the claims lack utility because the subject mater of the invention is enhancement of traditional SAGD, and Swist’s invention does not provide this” [226]. This is even though the claims themselves do not specify that the claimed method is an improvement. This holding seems wrong to me. Every inventor hopes that their invention will be an improvement over the state of the art, but whether that is true in fact has long been held to be irrelevant to utility:

As Lord Herschell explained over a century ago, in BASF v Levinstein (1887) 4 RPC 449 (HL) at 466 (HL) a case dealing with a patent for a red dye:

The demand for a particular colour depends upon changing fashion and passing moods of fancy. The one which to-day may be in large demand may to-morrow be a drug in the market. Again, a process which at one time could not be worked at a profit on account of the expense of the materials employed may shortly afterwards be so worked by reason of a diminution in the cost of these materials. Is the person who patents such a process to be deprived of all benefit of his invention when it becomes a commercial success, because at the time the patent was granted it could not be worked at a profit?

And as the Supreme Court noted in Consolboard [1981] 1 SCR 504, it is enough that the invention “affords the public a useful choice.” See also Lowell v Lewis 15 F Cas 1018, 1019 (CCD Mass 1817), per Story J (rejecting the proposition that to satisfy the utility requirement the invention must supersede those in common use); Purdue Pharma v Pharmascience Inc 2009 FC 726 [8] (noting that “The inventor of a new pain killer will not be denied a patent simply because it is only half as effective as aspirin and twice as expensive”); Astrazeneca Canada Inc v Mylan Pharmaceuticals ULC / anastrozole (NOC) 2012 FCA 109 [37] (noting that a compound that is no better than existing alternatives nonetheless has patentable utility); Pfizer Canada Inc v Mylan Pharmaceuticals ULC (NOC) 2014 FC 38 [66] (“ It would not matter if other pain relievers were far more effective.”)

Limits on Use of Foreign Prosecution History

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

Yesterday’s post the summary judgment aspects of the Canmar appeal; this post turns to the issue of s 53.1, which permits the use of prosecution history to aid in claim construction in certain circumstances. Justice Manson’s decision at first instance was the first to interpret s 53.1, and a difficult issue was raised right off the bat. The defendant, TA Foods, wanted to refer to the US prosecution history, while s 53.1 on its face only permits use of communications between the patentee and “an officer or employee of the Patent Office”—which is to say, the Canadian prosecution history. As discussed here, Manson J held that foreign prosecution history should be admissible to aid in a construction of Canadian claims only in “extraordinary circumstances” [73], [74], [77]. In general, this means that “prosecution of the foreign application is made part of the prosecution history of the Canadian patent” [77, original emphasis]. While Manson J did consider the foreign prosecution history [85]–[90], he expressly stated that he would have come to the same conclusion in any event [79].

Justice de Montigny ultimately held that Manson J should not have referred to the foreign prosecution history on the facts in this case [77]. The FCA’s restrictive approach to the use of foreign prosecution history reflects the text of s 53.1, but at this point we cannot rule out the possibility that foreign prosecution history might be admissible if made part of the Canadian prosecution history with sufficient particularity. That is a question “left for another day” [74], and de Montigny JA emphasized that “I wish to express no firm views on the matter” [77].

More generally, de Montigny JA’s decision for the FCA provides a useful discussion of a number of issues, but ultimately refrained from deciding most of them, on the view that “courts [should] refrain from deciding beyond what is strictly necessary for the resolution of the case of which they are seized” [74]. In my view this is a salutary principle—I often wish the SCC would pay more heed to it. The result is that the decision illuminates the FCA’s thinking on this issue, while leaving the specifics to be developed in future cases that raise them more directly. This is the way the law should develop.

Value of foreign jurisprudence

Justice de Montigny noted that s 53.1 appeared to respond in part to disquiet expressed in some FC decisions about always excluding consideration of prosecution history, especially in some particularly egregious cases [51]–[53], and he also noted that “it can also be perceived as a step to better align Canadian law with its British and American counterparts” [53]. That is true in broad strokes—as de Montigny JA noted, US law of course has a well-developed doctrine of prosecution history estoppel [54]–[56], and even the UK has made some steps in that direction [57]–[62]. With that said, I do not see this as an invitation to draw detailed guidance from US or UK law (which are very different from each other), as de Montigny JA noted that s 53.1 “is carefully tailored, and it would go against statutory interpretation principles to try to go beyond its original intent” [70]. Our law relating to prosecution history will therefore turn on the interpretation s 53.1.

Need there be a specific representation?

Part of that careful tailoring is that prosecution history may be admitted “to rebut any representation” made by the patentee in the action. Justice de Montigny noted that a question has arisen as to whether there must be some specific representation as to the construction of the claim [65], or whether the emphasis “is not so much on the rebuttal of a particular representation, but rather on the interpretive process itself,” as suggested in Bauer Hockey 2020 FC 624 (discussed here): [66]. Justice de Montigny left this question for another day, as it was not necessary to decide the case at hand [67]. My impression is that he was leaning to the latter interpretation, but I can’t point to anything specific in the reasons to support that view, and in any event he expressly left the matter open.

Foreign prosecution history

The main issue raised on the facts was the use of foreign prosecution history. Justice de Montigny emphasized the need to adhere to the text of the provision [70], which suggests a very limited role, if any, for foreign prosecution history. Further, he noted that “There are also public policy reasons for treading carefully in allowing extrinsic evidence” [70]. Allowing foreign patent prosecution history into the analysis “might lead to overly contentious and expensive litigation,” given different law, differences in language potentially requiring translation, and differences in the registration system. He noted that “in this case, the patent application in the United States was eventually dropped, while registration in Canada was completed” [71]. Thus both textual and purposive considerations support a restrictive approach to the use of foreign prosecution history. At the same time he acknowledged the force of the argument for “keeping those who have previously disclaimed elements from their patent from re-claiming them in future infringement cases,” both in general [72] and on the facts of this case [73].

In this case, Manson J held that foreign prosecution history would be admissible in “extraordinary circumstances” [FC 73, 74, 77]. As noted above, Manson J described such circumstances as being where “that prosecution of the foreign application is made part of the prosecution history of the Canadian patent” [FC 77, original emphasis]; Canmar referred to this as an “incorporation by reference” theory [69]. On the facts of the case, “the patentee specifically referred to the corresponding US Application prosecution history and acknowledged that the amendments to the claims in the ‘376 file history were made to overcome novelty and obviousness concerns as raised in the US Application prosecution history” [FC 70], [68].

Justice de Montigny did not dismiss the possibility that some form of incorporation by reference doctrine might permit foreign prosecution history to be used under s 53.1, but he left this question “for another day,” as he was of the view that the facts at hand “do not lend themselves to a proper finding of incorporation by reference” [74]. Justice de Montigny noted that “There is nothing in the prosecution file of the ‘376 Patent that identifies with any detailed particularity what specific ‘written communication’ from the US prosecution history is incorporated and where that written communication can be found” [75]. The only mention is a response to the Examiner stating that the new claims correspond to those submitted during prosecution “of a related United States application” [75], and he remarked that “It is a stretch to say that the prosecution of the US Application is incorporated by reference when the specific application is not even cited within the document” [76]. There is some suggestion in the decision that US doctrine of incorporation by reference might provide some guidance [76], though it remains to be seen how influential this will be, as the matter will ultimately turn on the interpretation of s 53.1.

The FCA decision in Canmar therefore establishes that the foreign prosecution history cannot be used unless the Canadian prosecution history contains some fairly specific reference to the foreign prosecution history. It should be emphasized, however, that the converse is not necessarily true: this does not mean that the foreign prosecution history will be considered if there is a sufficiently specific reference in the Canadian file. Whether foreign prosecution history will be admissible at all, and if so, exactly what kind of reference is needed, is a question left for another day [74[.

In my view the FCA was entirely right to confine itself to the holding necessary to dispose of the appeal, while leaving other questions for another day. Section 53.1 is novel—it does not appear to reflect any particular foreign jurisprudence—and it is detailed. Accordingly it will be best for the law to develop incrementally, at least for a period as we get a better understanding of the issues that will be raised by s 53.1 in different factual contexts.

Ten Year Anniversary

The first post on this blog went up ten years ago today. Blogger tells me I’ve had just over one million page views since then, and lately it’s running around 30k views per month. What’s far more satisfying than the numbers is the engagement. Thank you for making this project worthwhile!

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.