Estoppel based on patent prosecution history in Canada: The Pandora’s box is opened

October 31, 2019

Nearly twenty years ago, the Supreme Court of Canada¹ rejected the theory of estoppel based on a patent’s prosecution history, more commonly known as "file wrapper estoppel"²).

At the time, Justice Binnie wrote, “[…]purposive construction, which keeps the focus on the language of the claims, seems also to be inconsistent with opening the pandora's box of file wrapper estoppel”.

However, in December 2018, section 53.1 was added to the Patent Act (the "Act"), which allows for references to communications with the Canadian Intellectual Property Office ("CIPO") "to rebut any representation made by the patentee in the action or proceeding as to the construction of a claim".

In Canmar Foods Ltd v. TA Foods Ltd 2019 FC 1233, Justice Manson of the Federal Court rendered the first decision on file wrapper estoppel in Canada since this new provision came into force. The decision was handed down in the context of a motion for summary judgment.

Salient points

When a patentee amends the claims to limit their scope, the elements thus introduced are essential elements of the claims.
Section 53.1 of the Act can apply even if the patentee has not adopted a construction that contradicts a previous statement.
Where the patentee refers to the "file wrapper" of another jurisdiction (in this case, the US) during prosecution of the patent application in Canada, they make that file wrapper relevant for the purposes of applying section 53.1 of the Act.
The Federal Court appears to be loosening the jurisprudence applicable to motions for summary judgment.
The party challenging a motion for summary judgment must submit the best evidence available.
The construction of certain terms of the claims may be made by a judge even in the absence of expert evidence.

Background

Canmar Foods Ltd. ("Canmar") holds a patent on a method for roasting oil seeds as well as products derived therefrom (the "Patent"). The method claimed in the Patent consists of foursteps, including heating the seeds to a certain temperature in a "stream of air" and transferring the heated seeds "into an insulated or partially insulated roasting chamber or tower."

During prosecution of the Patent, the aforementioned steps of heating the seeds in a "stream of air" and transferring the heated seeds had been added to the claims; this amendment to the claims was made to reduce the scope thereof. While making this amendment, Canmar mentioned that the claims “correspond substantially” to those submitted during prosecution of a related US patent application.

Canmar sued TA Foods Ltd. ("TA") for patent infringement. TA made a motion for summary judgment on the grounds that the method employed by TA does not include heating the seeds in a "stream of air," nor does it include transferring the heated seeds "into an insulated or partially insulated roasting chamber or tower."

In support of the motion for summary judgment, the parties both produced affidavits. However, no expert evidence as to the construction of the terms of the Patent by a person of ordinary skill in the art ("POSITA") was presented.

Issues before the Federal Court

Should the Court grant the motion for summary judgment or leave these questions to the trial judge?
Can the Court use the file wrapper of the corresponding US patent application to construe claims under section 53.1 of the Act?
Can the Court conclude on the basis of the file wrapper that the elements "stream of air" and "into an insulated or partially insulated roasting chamber or tower" are essential elements of the patent claims?
Is the evidence presented sufficient to construe the terms in question and to conclude that they are absent from the defendant's method?

The judgment

In his judgment, Justice Manson first considers the criteria applicable to a motion for summary judgment. The case law indicates that when certain issues require assessing the credibility of witnesses, these issues should be left to the trial judge. Justice Manson refuses to apply these principles, which had been elaborated by the Federal Court of Appeal in MacNeil Estatec v. Canada (Department of Indian and Northern Affairs), 2004 FCA 50. Justice Manson further writes:

The Supreme Court held that “summary judgment rules must be interpreted broadly, favouring proportionality and fair access to the affordable, timely and just adjudication of claims” (Hryniak, above at para 5) […]There is no determinative test for summary judgment. One articulation is that the test is not whether the Plaintiff cannot possibly succeed at trial, but whether the case is so doubtful that it does not deserve consideration by the trier of fact at a future trial […]³.

He adds that the party defending an application for summary judgment cannot simply claim that the applicant has not met its burden and speculate as to grounds that could possibly be raised on the merits:

Parties are required to put their best foot forward. The responding party cannot rely on what might be adduced as evidence at a later stage, but must set out specific facts and adduce evidence showing that there is a genuine issue for trial (Federal Courts Rules, r 213; Sterling Lumber Co v Harrison, 2010 FCA 21 at para 8)⁴.

Justice Manson refers to the principles of claim construction developed by the Supreme Court in Free world trust and to the fact that Justice Binnie refused to apply the doctrine of file wrapper estoppel; however, Justice Manson then refers to the newly added section 53.1 of the Act, and adds:

This new provision is specific to using Canadian prosecution file histories to rebut any position taken on claim construction.⁵

“However, in this case, I find that 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. Accordingly, the Court may look at the US Application prosecution history as part of a purposive construction of the claims of the ‘376 Patent.”⁶

The Court in part imports the principles of US law to determine the scope of section 53.1 of the Act. Quoting the United States Supreme Court, Justice Manson adds:

"By amending the application, the inventor is deemed to concede that the patent does not extend as far as the original claim” (Festo at 737-738)⁷.

Consequently, Justice Manson concludes that the elements of heating the seeds in a "stream of air" and transferring them "into an insulated or partially insulated roasting chamber or tower" are essential elements of the claim.

The plaintiff argued that the Court cannot construe the terms of the Patent in the absence of expert evidence demonstrating how said terms would beconstrued by the POSITA.

The Court rejected this argument:

Based on the claim, the disclosure, and the prosecution history of the ‘376 Patent, I find that expert evidence is not required for me to be able to purposively construe the two elements of Claim 1 that are at issue.⁸

Although not explicitly stated in the judgment, it can be reasonably assumed that, had the plaintiff submitted expert evidence regarding claim construction by the POSITA which supported a finding of infringement, the Court would have possibly dismissed the motion for summary judgment. In the absence of such evidence, the Court seems to take for granted that it does not exist (since the plaintiff had to "put their best foot forward").

Therefore, patent agents in Canada must be cautious in their representations to CIPO and especially when referring to the prosecution of corresponding applications and patents in other jurisdictions. An admission that an amendment was made to limit the scope of a claim in response to prior art will likely result in the application of section 53.1 of the Act.

Unsurprisingly, the Federal Court interprets section 53.1 of the Act as a desire on the part of the legislature to introduce the doctrine of file wrapper estoppel into Canadian law. It will, however, be interesting to see whether its application will be limited to merely rebutting "any representation made by the patentee in the action or proceeding as to the construction of a claim in the patent," or if, as Justice Manson appears to have done, it will be used to support the notion that the "prosecution history aids in the purposive construction of the disputed elements"¹⁰ of the claims¹¹.

Free World Trust v. Électro Santé Inc., 2000 SCC 66, para 66.
Despite this clear decision, the Federal Court has accepted / refused variations of this doctrine in the past: see interalia Distrimedic Inc. v. Dispill Inc., 2013 FC 1043, para 210; Eli Lilly Canada Inc. v. Mylan Pharmaceuticals ULC, 2015 FC 125, para 154; and Pollard Banknote Limited v. BABN Technologies Corp. 2016 FC 883 paras 238 and 239.
Paras 46 and 48
Para 50
Para 62
Para 70
Para 67
Para 81
See para 79 “Regardless of the US Application prosecution history, I do not see how the process described in the Popowich Affidavit could possibly constitute heating the oil seed “in a stream of air” as that term is used in Claim 1 of the ‘376 Patent.”
Para 85
On the other hand, Justice Mansonwrites the following at paragraph 84:
The Plaintiff argued that section 53.1 is not engaged, as the Plaintiff did not make any representation as to the construction of Claim 1.Further, the Plaintiff argued that the Court is not in a position to determine whether the disputed claim elements are essential or not. However, as submitted by the Defendant, the Plaintiff made multiple representations in its written submissions to the effect that the language of Claim 1 is not limited to a particular type or source of heating.
Note, however, that these representations would have only been submitted in response to the motion for summary judgment, which would certainly have referenced the file wrapper before any representations had been made by the plaintiff.

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Written by

Alain Y. Dussault
Partner, Lawyer and Trademark Agent

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June 27, 2024

Misuse of the complaints mechanism on an e-commerce platform

At a time when Canada and many other countries are taking steps to protect users from harm online,1 a decision was handed down by the Supreme Court of British Columbia (the “Court”) on January 15, 2024, regarding the conduct of a competitor with respect to complaints about intellectual property infringement made on Amazon’s e-commerce website. Amazon’s platform is similar to many other e-commerce platforms that have a complaint mechanism for third-party use of intellectual property in violation of the rights of the real owners thereof. The complaint mechanism makes it possible for a complainant to submit an intellectual property infringement claim regarding content to which it has a good faith right in order to partially or fully remove the content in question from the pages of the alleged infringing party published on Amazon’s platform. Such a mechanism has its purpose, as it is an effective way of tracking down counterfeiters. As we will see in Keezio Group, LLC v. The Shrunks' Family Toy Company Inc.,2 the mechanism can also be used maliciously. The facts and the plaintiff’s allegations In this case, complaints were lodged by a competitor of the company that was the subject of the complaints, with both entities operating in the inflatable bed industry. Keezio Group, LLC (“Keezio”) markets the “Hiccapop Inflatable Toddler Travel Bed” (the “Hiccapop Bed”), while The Shrunks’ Family Toy Company Inc. (“The Shrunks”) offers inflatable beds consisting of a mattress placed in an inflatable bed frame. Both companies primarily sell their products on the Amazon retail platform. In February 2017, Amazon informed Keezio that it had received a report of trademark infringement regarding the Hiccapop Bed, the complainant being identified as Mr. Cirjak of The Shrunks. Subsequently, in accordance with the applicable process, Amazon removed the product from Keezio’s product-listing pages on its website. It is worth noting that assessing the substantive validity of a complaint is not part of Amazon’s complaints handling process. On or about April 17, 2017, Keezio received another notice. The complaints of 2017 were eventually withdrawn and the page featuring the Hiccapop Bed was restored. In November 2019, Keezio received two more notices of complaints from Amazon regarding violations similar to those received about two years prior. The first of these two notices, sent on November 22, 2019, referred to trademark infringement. Amazon thus removed the page in question, which contained a chart comparing Keezio’s products with The Shrunks’ products. Keezio asked for clarification of this alleged infringement but received no response from The Shrunks. Having received no details about the infringement from The Shrunks, Keezio ultimately changed its webpage to remove all mentions of “The Shrunks”, replacing them with “Rhymes with Skunks”. Although Amazon informed Keezio in a message in November 2019 that it would restore its content, the evidence does not clearly establish whether this was done. The second notice of infringement, dated November 28, 2019, concerned an allegation of copyright infringement on six webpages for the Hiccapop Bed. The pages were delisted on or about November 28, 2019, and eventually reinstated on December 2, 2019. The Shrunks denied having filed the complaints of 2019. However, the Court did not hesitate to conclude that The Shrunks was also behind these complaints. Issues at bar about the complaints There were many issues in this case, and some claims were eventually withdrawn. We will focus on the two complaints made in 2019. Specifically, Keezio argued that the complaints that The Shrunks had lodged with Amazon were unfounded, resulting in a loss of business for Keezio. In particular, the Court analyzed section 7 of the Trademarks Act.3 To succeed in such a claim, the plaintiff must prove (i) that a false or misleading statement was made (ii) that tends to discredit the business, goods or services of a competitor, (iii) resulting in damages. The Court held that the person making the statements need not know of their falsity in order to satisfy these criteria. Findings of the Court (i) The allegation of trademark infringement in the comparative chart The trademark infringement complaint concerned a comparative chart featuring both Hiccapop Bed and The Shrunks products, with comparative data on the features of both products. The data itself was not challenged. The complaint related to the unauthorized use of The Shrunks’ registered trademark in the chart. Basing itself on the landmark decision in Clairol International Corp. et al v. Thomas Supply and Equipment Co.,4 the Court concluded that Keezio’s comparative chart did not amount to “use” of The Shrunks trademark pursuant to s. 4(1) of the Trademarks Act, and that therefore said chart did not constitute trademark infringement. Accordingly, the Court determined that The Shrunks’ complaint that Keezio infringed its trademark was unfounded. The Court further concluded that the comparative chart was not contrary to section 22 of the Trademarks Act:5 The mere depiction of a competitor’s trademark in comparative advertising does not in itself depreciate the value of the goodwill attached to a product. (ii) The allegation of copyright infringement The copyright infringement notice contained six Amazon Standard Internal Catalog Identification Numbers (ASINs), which identified six webpages that were sales pages for the Hiccapop Bed. The Court ruled that the allegation of copyright infringement in question was unfounded, as it related to a bed, which is a useful article sold in a quantity of more than 50. The reproduction of the bed design was therefore not covered by subsection 64(2)6 of the Copyright Act. The Court found The Shrunks liable for the two complaints made in November 2019, which it determined to be false or misleading as the allegations of trademark and copyright infringement were unfounded. The Court stated that the complaints tended to discredit Keezio’s business because they misled Amazon into removing Keezio’s product listing pages. On this point, the Court referred to a passage from the Federal Court decision Yiwu Thousand Shores E-Commerce Co. Ltd. v. Lin.7 With regard to damages, the Court determined that Keezio’s evidence regarding the calculation of damages was inadequate on several counts, but nonetheless awarded damages based on a decrease in Keezio’s sales on the dates of delisting. The Court did not hold The Shrunks’ principal personally liable and did not grant a permanent injunction or punitive damages. It also dismissed The Shrunks’ counterclaim for copyright infringement, and ordered The Shrunks to pay Keezio costs, excluding taxes and disbursements. Comments This decision highlights how crucial it is for complainants to be serious when filing complaints. The complaints mechanism on platforms such as Amazon is an extremely useful and effective tool for reporting rights violations, provided that use of such mechanisms is made in good faith and based on solid legal foundations. Although such a mechanism is easy to use, the rights involved must absolutely be analyzed in advance, as an ill-founded complaint can result in harm—which can be considerable—especially when the platform has a global reach. In such a case, the removal of a webpage can result in significant damages. It is therefore essential to exercise due diligence, as a country-by-country analysis of rights can reveal different legal situations and rights holders from one country to another. Not only must competitors carefully consider and weigh their actions, but e commerce website operators must also be vigilant and respond promptly to requests for removal and geographic restrictions. Amazon recently experienced a situation like this when a UK court ruled against it.8 The decision dealt with a targeting operation on Amazon’s website, where sales offers or advertisements were intentionally directed at consumers in the UK where the trademarks were not owned in that country by the same company offering the products for sale. A word to the wise! See Bill C-63, the Online Harms Act, which establishes a regime to address such harm. Keezio Group, LLC v. The Shrunks' Family Toy Company Inc., 2024 BCSC 64. Section 7 of the Trademarks Act: Prohibitions 7. No person shall - make a false or misleading statement tending to discredit the business, goods or services of a competitor; - direct public attention to his goods, services or business in such a way as to cause or be likely to cause confusion in Canada, at the time he commenced so to direct attention to them, between his goods, services or business and the goods, services or business of another; - pass off other goods or services as and for those ordered or requested; or - make use, in association with goods or services, of any description that is false in a material respect and likely to mislead the public as to (i) the character, quality, quantity or composition, (ii) the geographical origin, or (iii) the mode of the manufacture, production or performance of the goods or services. Clairol International Corp. v. Thomas Supply & Equipment Co. 55 C.P.R. 176, 1968 CanLII 1280. Section 22 of the Trademarks Act: 22.Depreciation of goodwill - 22 (1) No person shall use a trademark registered by another person in a manner that is likely to have the effect of depreciating the value of the goodwill attaching thereto. Subsection 64 (2) of the Copyright Act: 64 (2) Non-infringement re certain designs Where copyright subsists in a design applied to a useful article or in an artistic work from which the design is derived and, by or under the authority of any person who owns the copyright in Canada or who owns the copyright elsewhere, - the article is reproduced in a quantity of more than fifty, or - where the article is a plate, engraving or cast, the article is used for producing more than fifty useful articles, it shall not thereafter be an infringement of the copyright or the moral rights for anyone, - to reproduce the design of the article or a design not differing substantially from the design of the article by (i) making the article, or (ii) making a drawing or other reproduction in any material form of the article, or - to do with an article, drawing or reproduction that is made as described in paragraph (c) anything that the owner of the copyright has the sole right to do with the design or artistic work in which the copyright subsists. Yiwu Thousand Shores E-Commerce Co. Ltd. v. Lin, 2021 CF 1040. See paragraph 58 of this decision: [58] I agree with ThousandShores that the Respondent made false allegations and misstatements to Amazon.ca in the Takedown Requests, at least one of which was made after the Respondent’s receipt of the October 2020 Letter. ThousandShores had no ability to respond directly to his allegations. The absence of any evidence of use of the OHUHU trademark by the Respondent and the likelihood of confusion between the parties’ marks means the Impugned Registration is invalid. Accordingly, the Respondent’s statements regarding the Impugned Registration, the inauthenticity of ThousandShores’ OHUHU Goods and its infringement of the Respondent’s rights were false. The statements clearly tended to discredit ThousandShores’ business, the OHUHU Storefront, and the OHUHU Goods. They misled Amazon.ca, causing it to remove ThousandShores’ listings for the OHUHU Goods with a resulting loss of profits. ThousandShores’ only recourse was to provide evidence of authorization or license by the Respondent, or to challenge the validity of the Impugned Registration. Lifestyle Equities CV and another v Amazon UK Services Ltd and others [2022] EWCA Civ 552, upheld by the Supreme Court on March 6, 2024 ([2024] UKSC 8).

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April 15, 2024

Can artificial intelligence be designated as an inventor in a patent application?

Artificial intelligence (“AI”) is becoming increasingly sophisticated, and the fact that this human invention can now generate its own inventions opens the door to new ways of conceptualizing the notion of “inventor” in patent law. In a recent ruling, the Supreme Court of the United Kingdom (“UK Supreme Court”) however found that an artificial intelligence system cannot be the author of an invention within the meaning of the applicable regulations under which patents are granted. This position is consistent with that of several courts around the world that have already ruled on the issue. But what of Canada, where the courts have yet to address the matter? In this bulletin, we will take a look at the decisions handed down by the UK Supreme Court and its counterparts in other countries before considering Canada’s position on the issue. In Thaler (Appellant) v Comptroller-General of Patents, Designs and Trade Mark,1 the UK Supreme Court ruled that “an inventor must be a person”. Summary of the decision In 2018, Dr. Stephen Thaler filed patent applications for two inventions described as having been generated by an autonomous AI system. The machine in question, DABUS, was therefore designated as the inventor in the applications. Dr. Thaler claimed that, as the owner of DABUS, he was entitled to file patent applications for inventions generated by his machine. That being so, he alleged that he was not required to name a natural person as the inventor. Both the High Court of Justice and the Court of Appeal dismissed Dr. Thaler’s appeal from the decision of the Intellectual Property Office of the United Kingdom not to proceed with the patent applications, in particular because the designated inventor was not valid under the Patents Act 1977. The UK Supreme Court, the country’s final court of appeal, also dismissed Dr. Thaler’s appeal. In a unanimous decision, it concluded that the law is clear in that “an inventor within the meaning of the 1977 Act must be a natural person, and DABUS is not a person at all, let alone a natural person: it is a machine”.2 Although there was no doubt that DABUS had created the inventions in question, that did not mean that the courts could extend the notion of inventor, as defined by law, to include machines. An ongoing trend The UK Supreme Court is not the first to reject Dr. Thaler’s arguments. The United States,3 the European Union4 and Australia5 have adopted similar positions, concluding that only a natural person can qualify as an inventor within the meaning of the legislation applicable in their respective jurisdictions. The UK ruling is part of the Artificial Inventor Project’s cross-border attempt to ensure that the DABUS machine—and AI in general—is recognized as a generative tool capable of generating patent rights for the benefit of AI system owners. To date, only South Africa has issued a patent to Dr. Thaler, naming DABUS as the inventor.6 This country is the exception that proves the rule. It should however be noted that the Companies and Intellectual Property Commission of South Africa does not review applications on their merits. As such, no reason was given for considering AI as the inventor. More recently, in February of this year, the United States Patent and Trademark Office issued a guidance on AI-assisted inventions. The guidance confirms the judicial position and states in particular that “a natural person must have significantly contributed to each claim in a patent application or patent”.7 What about Canada? In 2020, Dr. Thaler also filed a Canadian patent application for inventions generated by DABUS.8 The Canadian Intellectual Property Office (“CIPO”) issued a notice of non-compliance in 2021, establishing its initial position as follows: Because for this application the inventor is a machine and it does not appear possible for a machine to have rights under Canadian law or to transfer those rights to a human, it does not appear this application is compliant with the Patent Act and Rules.9 However, CIPO specified that it was open to receiving the applicant’s arguments on the issue, as follows: Responsive to the compliance notice, the applicant may attempt to comply by submitting a statement on behalf of the Artificial Intelligence (AI) machine and identify, in said statement, himself as the legal representative of the machine.10 To date, CIPO has issued no notice of abandonment and the application remains active. Its status in Canada is therefore unclear. It will be interesting to see whether Dr. Thaler will try to sway the Canadian courts to rule in his favour after many failed attempts in other jurisdictions around the world, and most recently in the UK Supreme Court. At first glance, the Patent Act11 (the “Act”) does not prevent an AI system from being recognized as the inventor of a patentable invention. In fact, the term “inventor” is not defined in the Act. Furthermore, nowhere is it stated that an applicant must be a “person,” nor is there any indication to that effect in the provisions governing the granting of patents. The Patent Rules12 offer no clarification in that regard either. The requirement implied by the clear use of the term “person” in the wording of the relevant sections of the law is important: It was a key consideration that the UK Supreme Court analyzed in Thaler. Case law on the subject is still ambiguous. According to the Supreme Court of Canada, given that the inventor is the person who took part in conceiving the invention, the question to ask is “[W]ho is responsible for the inventive concept?”13 That said, however, we note that the conclusion reached was that a legal person—as opposed to a natural person—cannot be considered an inventor.14 The fact is that the Canadian courts have never had to rule on the specific issue of recognizing AI as an inventor, and until such time as the courts render a decision or the government takes a stance on the matter, the issue will remain unresolved. Conclusion Given that Canadian law is not clear on whether AI can be recognized as an inventor, now would be a good time for Canadian authorities to clarify the issue. As the UK Supreme Court has suggested, the place of AI in patent law is a current societal issue, one that the legislator will ultimately have to settle.15 As such, it is only a matter of time before the Act is amended or CIPO issues a directive. Moreover, in addition to having to decide whether AI legally qualifies as an inventor, Canadian authorities will have to determine whether a person can be granted rights to an invention that was actually created by AI. The question as to whether an AI system owner can hold a patent on an invention generated by their machine was raised in Thaler. Once again, unlike the UK’s patent act,16 our Patent Act does not close the door to such a possibility. Canadian legislation contains no comprehensive list of the categories of persons to whom a patent may be granted, for instance. If we were to rewrite the laws governing intellectual property, given that the main purpose such laws is to encourage innovation and creativity, perhaps a better approach would be to allow AI system owners to hold patent rights rather than recognizing the AI as an inventor. Patent rights are granted on the basis of an implicit understanding: A high level of protection is provided in exchange for sufficient disclosure to enable a person skilled in the art to reproduce an invention. This ensures that society benefits from such inventions and that inventors are rewarded. Needless to say, arguing that machines need such an incentive is difficult. Designating AI as an inventor and granting it rights in that respect is therefore at odds with the very purpose of patent protection. That said, an AI system owner who has invested time and energy in designing their system could be justified in claiming such protection for the inventions that it generates. In such a case and given the current state of the law, the legislator would likely have to intervene. Would this proposed change spur innovation in the field of generative AI? We are collectively investing a huge amount of “human” resources in developing increasingly powerful AI systems. Will there come a time when we can no longer consider that human resources were involved in making AI-generated technologies? Should it come to that, giving preference to AI system owners could become counterproductive. In any event, for the time being, a sensible approach would be to emphasize the role that humans play in AI-assisted inventions, making persons the inventors rather than AI. As concerns inventions conceived entirely by an AI system, trade secret protection may be a more suitable solution. The professionals on our intellectual property team are at your disposal to assist you with patent registration and provide you with a clearer understanding of the issues involved. [2023] UKSC 49 [Thaler]. Ibid., para. 56. See the decision of the United States Court of Appeals for the Federal Circuit in Thaler v Vidal, 43 F. 4th 1207 (2022), application for appeal to the Supreme Court of the United States dismissed. See the decision of the Boards of Appeal of the European Patent Office in J 0008/20 (Designation of inventor/DABUS) (2021), request to refer questions to the Enlarged Board of Appeal denied. See the decision of the Full Court of the Federal Court of Australia in Commissioner of Patents v Thaler, [2022] FCAFC 62, application for special leave to appeal to the High Court of Australia denied. ZA 2021/03242. Federal Register: Inventorship Guidance for AI-Assisted Inventions. CA 3137161. Notice from CIPO dated February 11, 2022, in Canadian patent application 3137161. Ibid. R.S.C., 1985, c. P-4. SOR/2019-251. Apotex Inc.v. Wellcome Foundation Ltd., 2002 SCC 77 at paras. 96–97. Sarnoff Corp. v. Canada (Attorney General), 2008 FC 712, para. 9. Thaler, paras. 48–49, 79. Ibid., para. 79.

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January 8, 2024

Implicit inducement of patent infringement – The Federal Court of Appeal hands down its ruling

Can a patent be infringed even if the patented product is not manufactured, assembled, or even used? Indeed, such infringement is possible. In fact, this is known as the theory of inducement of infringement. Naturally, acts of “inducement” must meet certain conditions before inducement of infringement can be found. The Federal Court of Appeal recently clarified these conditions. Inducing infringement and the applicable test For example, if the patented invention is a solution containing components A, B, and C of a drink where component C is water, it is likely that if components A and B are sold to a consumer and said consumer is told to add a certain amount of water, mix well, and drink, the consumer can be said to have been induced to infringe the patent. To determine whether inducement of infringement has occurred, the courts apply a three-prong test. First, the acts of infringement must have been completed by the direct infringer. In the previous example, this would be the consumer. There can be no inducement of infringement if there has been no direct infringement. Second, the completion of the acts of infringement must be influenced by the acts of the alleged inducer to the point that, without the influence, direct infringement would not take place (for example, by selling the material and providing instructions). Third, influence must be knowingly exercised by the inducer; in other words, the inducer knows that this influence will result in the completion of the acts of infringement. The Federal Court case Returning to the Court of Appeal’s decision: in this case, Janssen had sued Apotex for inducing infringement of a patent. An important point is that the patent on the drug had expired. However, Janssen claimed that Apotex was inducing physicians to prescribe the drug in combination with a specific inhibitor to treat a rare condition called pulmonary arterial hypertension (PAH). Janssen’s patent covers the combination of the drug and the inhibitor to treat PAH. Apotex would have sold the drug alone, without including the inhibitor or the combination, had Health Canada authorized its drug.1 Nowhere in the product monograph is it suggested that the drug be used in combination with the inhibitor in question. However, the drug was being prescribed to treat PAH. The parties agreed that the first prong of the test had been met, namely that the drug was likely to be prescribed with the inhibitor to treat PAH. It was the second and third prongs that were actually at issue: Could Apotex be inducing infringement even though its product monograph contains no suggestion for use in combination with the inhibitor in question? The Federal Court had concluded that the second and third prongs of the test for inducing infringement had been met. It ruled that the product monograph sufficiently influenced physicians to prescribe the drug in combination with the inhibitor, and that Apotex knew that marketing the drug along with the product monograph would influence physicians to prescribe it with the inhibitor. This reasoning is based primarily on a study cited in the product monograph, which showed that the drug, whether prescribed alone or with the inhibitor, was safe and effective. The Federal Court of Appeal’s decision The Court of Appeal upheld the Federal Court’s decision, adding that influence need not be explicit. The Court thus affirmed that the absence of explicit instruction and of intention that direct infringement should result does not mean that there is no influence sufficient to satisfy the second prong. Therefore, while explicit instruction and intention may be relevant to assessing influence, they are not required. The Court of Appeal stated that: “Even without explicit reference to combination treatment, the Federal Court was entitled to find that the Apo-Macitentan PM would influence use of macitentan in that way.”2 With respect to the third prong, the Court of Appeal reiterated that the inducer must know that their actions or influence will lead another party to engage in specific activity, but that it is not necessary to prove that the inducer knows that such activity will constitute patent infringement. The Court of Appeal upheld the conclusion that, in the circumstances, Apotex knew or should have known that the product monograph for its drug would influence physicians to prescribe it in combination with the inhibitor to treat PAH. Conclusion Implicit influence can lead to findings of patent infringement when it can be said that the inducer should have been aware of the consequences of their actions. This decision confirms that Canadian courts have a flexible legal tool to protect inventions. The text is in the conditional tense because the action was brought under the Patented Medicines (Notice of Compliance) Regulations, which establish specific rules regarding litigation in the pharmaceutical industry and prevent Health Canada from authorizing the sale of a generic version of a drug that would infringe certain patents in certain circumstances. Apotex Inc. v. Janssen Inc., 2023 FCA 220 (CanLII), para. 17.

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November 30, 2023

Advancing Patent Fee Payments in Canada to Avoid Significant 2024 Fee Increases

Canadian patent government fees will increase up to 36% on January 1, 2024. The main fee increases are presented in the table below. Applicants may therefore wish to take certain actions and pay the accompanying fees in Canada by the end of 2023 to benefit from the lower 2023 rates at least in the following circumstances: Early filing of divisional applications may be especially advantageous as they involve high government fees. Retroactive maintenance fees from the second anniversary onward of the parent case are payable when divisional applications are filed, along with the filing fee. Examination fees are also typically paid at divisional filing, as they generally need to be paid within three months of filing the divisional application.1 Applicants who intend to file the national phase of international patent applications in Canada can reduce filing cost by advancing national entry in 2023. Single or multiple future maintenance fees due in 2024 or later in each patent or patent application could be anticipated and paid in 2023. Finally, examination fees due in 2024 or later may also be anticipated in 2023 to benefit from the lower rate. CIPO Fee 2023* 2024* Filing fee $421.02 $555.00 Examination or request for continued examination (RCE) fee $816.00 $1,111.00 Excess claim fee for each claim over 20 $100.00 $110.00 Advanced examination fee $526.29 $694.00 Maintenance fee: 2nd to 4th anniversary $100.00 $125.00 Maintenance fee: 5th to 9th anniversary $210.51 $277.00 Maintenance fee: 10th to 14th anniversary $263.14 $347.00 Maintenance fee: 15th to 19th anniversary $473.65 $624.00 *Undiscounted fees applicable to applicants not eligible for small entity rate Divisional practice is very strict in Canada, in that divisional applications are generally only filed to pursue a non-elected invention that was identified in a lack of unity objection in the parent case.

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