Date: 20100205
Docket: T-1524-08
Citation: 2010 FC 124
Toronto, Ontario, February 5, 2010
PRESENT: The Honourable Mr. Justice Hughes
BETWEEN:
MYCOGEN PLANT SCIENCE, INC.
Plaintiff
and
BAYER BIOSCIENCE N.V.,
MONSANTO TECHNOLOGY LLC
Defendants
Docket: T-1569-08
AND BETWEEN:
MONSANTO TECHNOLOGY LLC
Plaintiff
and
BAYER BIOSCIENCE N.V., MYCOGEN PLANT
SCIENCE, INC.
Defendants
REASONS FOR ORDER AND ORDER
[1]
These two
actions, which have been dealt with together along with a third action
T-1581-08, concern conflicting applications for patents filed by the various
parties in the Canadian Patent Office, all filed before October 1, 1989. This
has resulted in the present so-called conflict proceedings. Such proceedings are
no longer pertinent to applications filed after that date due to substantial
amendments made to the Patent Act, R.S.C. 1985, c. P-4 effective October
1, 1989. Very few applications filed before that date remain pending in the
Canadian Patent Office, the applications at issue are among those few.
[2]
The trial
of these actions has been fixed to begin November 15, 2010. At the present time
one of the parties, Bayer Biosciences N.V., has brought a motion for summary
judgment which affects one of the other parties, Monsanto Technology LLC. Bayer
had previously brought a similar motion which, by an Order of this Court dated
September 9, 2009, was adjourned sine die without prejudice to a
rescheduling. That Order further stated that Rule 213, which otherwise would
prevent a motion for summary judgment from being heard as a trial date had been
set, shall not act as a bar to a rescheduled motion.
[3]
In
particular Bayer’s motion for summary judgment now before the Court seeks the
following relief:
1. An Order for summary judgment declaring that Monsanto Technology LLC (“Monsanto”),
having missed the time set by the Commissioner in accordance with s. 43 of the
Patent Act:
a. has no standing to participate in
this action and is removed as a party to this action,
b. has no standing to participate in the
conflict in the Canadian Intellectual Property Office,
and must withdraw the conflict claims and
any claims not patentably distinct from its pending application;
2.
An
order for Bayer’s costs; and,
3.
Such
further and other relief as counsel may advise and this Honourable Court grant.
[4]
Monsanto
opposes the motion on a number of grounds and further submits that, given the
relative shortness of time between the hearing of this motion and the date
fixed for commencement of trial, the motion should be deferred to be heard as
part of the trial. Bayer resists such deferral. I have chosen to hear and
determine the matter now.
[5]
As to the
remaining parties, matters have been resolved between the parties in respect of
Syngenta Participation AG and that party is no longer concerned with this
motion or any of these actions. The other party, Mycogen Plant Science, Inc.,
filed no written submissions or other material in respect of Bayer’s motion for
summary judgment. Mycogen’s counsel appeared on the motion but made no
substantive submissions.
What are Conflict Proceedings
[6]
The
Canadian Patent Act, R.S.C. 1985, c. P-4 underwent profound changes
effective October 1, 1989. Prior to that date Canada awarded patents to the first person who
invented the subject matter of a patent application, the so-called “first to
invent” system. After that date a patent was awarded to the first person to
file a patent application for the subject matter the so-called “first to file”
system. At the beginnings of the patent system most countries had a “first to
invent” system, some even had a “first to invent in our country” system.
Gradually many countries, particularly the European and Far East countries,
went to a “first to file” system so that by October 1, 1989, only Canada, the United States and a few other countries remained with
a “first to invent” system. Now even the United States is gradually coming around in many but
not all respects, to a first to file system.
[7]
Under the
“first to invent” system when there was only one application for a patent
before the Patent Office, the person named as inventor was assumed to be the
first person to invent the subject matter of the application. However, as
happens from time to time, there may be two or more applications filed with the
Patent Office which appear to be directed to the same subject matter. In such
circumstances the Commissioner of Patents was required to decide who was the
first person to invent. That person was to be granted a patent for the subject
matter to the exclusion of the other applicants.
[8]
Section 43
of the pre-October 1, 1989 version of the Patent Act specifically
addressed conflict proceedings. Those provisions remain in force today to deal
with the very few remaining conflict proceedings. A copy of section 43 of the
pre-October 1, 1989 Patent Act is appended to these reasons. There are
no specific Patent Rules or Federal Courts Rules dealing with
such proceedings. Previously the pre-1998 version of the Federal Court Rules
had specific rules dealing with such proceedings but they have not been carried
forward.
[9]
Essentially
the conflict process began when the Patent Office examiners perceived that
there were two or more applications pending before the Office that appeared to
be directed to the same subject matter. Under the pre-October 1, 1989 system
all patent applications were confidential and not available to the public. That
remains the case with the applications at issue here. The Patent Office would select claims from the
applications that appeared best to cover the subject matter common to all
applications, or even draft such claims. These common claims would be presented
to each of the applicants who could choose to remain in the conflict
proceedings by including some or all of these claims in their application if
they were not there already. The applicants were then invited to submit
affidavits setting out facts that would establish the date of invention by
their named inventors. Some would choose to rely only on the filing date of the
application in Canada or a foreign country if the Canadian
application claimed priority from such application. When all evidence was in,
the Commissioner of Patents would review the evidence and make a determination
as to which inventors had first made the invention as described in the subject
matter of the conflict claims. Sometimes some inventors were first in respect
of some of the claims and other inventors in respect of other claims. The
claims would be awarded by the Commissioner to the application of the first
inventor of each claim at issue and all the applications would proceed to final
examination. However any party to the conflict could, after receipt of the
Commissioner’s decision, if dissatisfied, commence an action in the Federal
Court for a re-determination as to first to invent and consequent award of
claims. This is not an appeal nor a judicial review but an action in which a
fresh determination is made. In such an action redrafted claims (so-called
substitute claims) could be proposed for resolution in the conflict. The
Federal Court action would proceed as any other action and would be subject to
appeal in the usual way.
[10]
In the United States there are proceedings which, in only a
very general way, are similar. They are referred to as “interference”
proceedings.
[11]
The present motion
for summary judgment is concerned with an extension of time given by the
Commissioner of Patents while the conflict proceeding was still in the Patent
Office and before any final determination had been made as to an award of the
claims by the Commissioner.
Summary Judgment
[12]
Counsel for Monsanto,
other than raising an issue as to whether or not the motion for summary
judgment should be heard at all given that the trial is scheduled to being in
about nine months, did not raise an objection as to the use of the summary
judgment rules of this Court to deal with this motion. Both Counsel agreed that
the recent amendments to those rules did not affect this motion. Both Counsel
agreed that I had before me all the relevant facts necessary to dispose of the
issues on this motion and that no further pertinent facts would be forthcoming
at trial.
[13]
I find that it is
appropriate to deal with the issues before me by way of a motion for summary
judgment.
Relevant Facts
[14]
The
relevant facts are not in dispute and do not require any finding as to
credibility. The facts can be found in documents contained in the application
files of the various parties in the Canadian Patent Office which are the
subject of the conflict proceedings and in admissions made in response to a Notice
to Admit served in accordance with the Rules of this Court.
[15]
The
matters begin when each of the parties, at the time unknown to each other,
filed their applications for a patent in the Canadian Patent Office. All
applications were filed before October 1, 1989 meaning that the provisions of
the “old” Patent Act apply. At the time of making the application Bayer
was known as Plant Genetic Systems N.V. The parties to this motion are agreed
that Bayer is a successor to Plant Genetic Systems; in general I will simply
refer to that party as Bayer.
[16]
By letter
dated June 15, 2000 the Commissioner of Patents advised the patent agents
acting for Bayer, Gowling Strathy & Henderson that a conflict existed
between its application and a number of other applications identified only as
XXX,X73, XXX,X21, XXX,X90, XXX,X46, and XXX,X22. A number of claims identified
as C1 to C5 and C12 to C21 were said to define the conflicting subject matter.
The Patent Office in that letter requested that the applicant insert or retain
those claims in its application if it intended to remain in the conflict
proceedings. The opening paragraph of the letter stated that a response must be
made within 3 months (i.e. by September 15, 2000).
[17]
A similar
letter was written by the Patent Office to the patent agents for Monsanto,
McFadden, Fincham, on the same day except that somewhat different claims, C1 to
C11 and C22 to C26 were offered.
[18]
Therefore,
upon receipt of the Commissioner’s letter of June 15, 2000 each of Bayer and
Monsanto would have become aware that their patent application was in conflict
with an application or applications of others, although neither was aware of
the identity of each other or any of the others nor which claims of one were in
conflict with which claims of another.
[19]
On
September 12, 2000, the patent agents for Syngenta, Featherstonehaugh &
Co., wrote to the Patent Office requesting a six month extension of time (until
March 15, 2001) to respond as to whether their client would insert or retain
some or all of the offered conflict claims in its application. On September 29,
2000 the Patent Office wrote back granting a three month, not six month,
extension (until December 15, 2000). At this time no other party would have
been aware of this correspondence. However, as will be seen in subsequent
correspondence, each of Bayer and Monsanto quickly became aware that somebody
had asked for and received an extension of time and therefore each of them
would automatically get an extension of time to December 15, 2000 as well.
[20]
On
September 14, 2000, one day before the expiry of the first 3 month period,
Bayer’s patent agents wrote to the Patent Office stating that Bayer wished to
include conflict claims C1 to C5 and C12 to C21 in its application thus
maintaining its presence in the conflict proceedings.
[21]
On
September 29, 2000 the Patent Office wrote to Bayer’s patent agents advising
them that one of the other parties had asked for and received an extension of
time until December 15, 2000 and that Bayer would have one as well. It appears
that the Patent Office may have been unaware at that time that Bayer had in
fact filed a response on September 14, 2000.
[22]
It is
agreed by Bayer’s counsel that Bayer did not at that time or at any time until
these actions were commenced, raise an issue with the Patent Office or
otherwise as to the granting of the extension of time until December 15, 2000.
The first time such issue was raised was in the pleadings in these actions and
this motion.
[23]
On
September 13, 2000, Monsanto’s patent agents wrote to the Patent Office
requesting an extension of time until December 15, 2000 to respond to the
Commissioner’s request as to whether it would add or retain the conflict claims
so as to remain in the conflict. The letter in evidence contains a brief handwritten
note at the bottom, nobody knows who wrote it or what it means. Counsel are
agreed that the note could be ignored. On September 29, 2000 the Patent Office
responded by letter saying that the patent agent of record in the conflicting
application (without identifying who or what it was) had already requested and
been granted an extension of time therefore Monsanto’s extension of time is not
required. This is taken to mean that Monsanto had the benefit of the extension
of time until December 15, 2000 as well. Monsanto filed its reply adding
conflict claims on December 15, 2000. The Commissioner retained Monsanto as a
party to the conflict.
[24]
In the
meantime, in accordance with the custom of the Patent Office, each of the
parties to the conflict were asked by the Patent Office whether they would
agree to the disclosure to all other parties of the identity of the parties to
the conflict, the named inventors and their patent agent. They all agreed, and
on January 8, 2001 the Patent Office wrote to the patent agents for each party
disclosing that information to all parties. While the substance of the parties’
applications was not disclosed, their identity was.
[25]
Further
prosecution of the respective conflicting applications continued in the Patent
Office. In similar letters written to the patent agents for each of Bayer and
Monsanto by the Patent Office on October 20, 2003 advising, among other things,
as follows:
A recent review of the Patent Act and
Patent Rules shows that the authority for dealing with conflicting applications
resides in the Patent Act as it read immediately before October 1, 1989. There
are no regulations for dealing with conflicting applications. The only
authority for granting extension of time is found in Part I of the Patent
Rules. However, Section 26 provides a specific exception to matters in respect
of Part V which is the part applicable to applications filed before October 1,
1989. Part V itself makes no regulation governing extension of time.
Applicant is advised that henceforth an extension
of time will not be granted to respond to any letter written under Section 43
of the Patent Act as it read immediately before October 1, 1989.
There
is no evidence as to what motivated the Patent Office to make this statement.
[26]
The
conflicts proceeded and were ultimately determined by the Commissioner of
Patents in a decision dated April 14, 2008. In that decision it was determined
that Bayer’s inventors were the first to invent the subject matter of claims C1
to C5 and therefore those claims would be awarded to Bayer. Monsanto was not
awarded any claim. The decision ended by stating that further action (in the
Patent Office) would proceed on the basis of that award unless within 6 months
proceedings were commenced in the Federal Court. These actions taken by Mycogen
and Monsanto are such proceedings thus further prosecution is delayed.
Arguments of the Parties
Bayer
[27]
Bayer
argues that the Commissioner did not have the power to grant an extension of
time, beyond the three month period originally given, to the parties to decide
whether they would or would not add or retain certain claims in their
respective applications, thereby remaining a party to the conflict. The
Commissioner had originally set September 15, 2000 as the due date for a response.
Bayer filed its response on September 14, 2000 therefore was within the
original time limit and remained as a party to the conflict. Syngenta had asked
for an extension and received one with a new due date of December 15, 2000.
That meant that Bayer and Monsanto also got an extension to that time. Bayer
didn’t need it because it had already responded. Monsanto had also asked for an
extension but was told that it was unnecessary to do so since another (unnamed)
party had already made such a request and was granted an extension until
December 15, 2000. Monsanto filed a reply on December 15, 2000. Bayer argues
that the extension was a nullity therefore the reply was out of time and,
therefore, Monsanto was no longer a party to the conflict; it could no longer
make any claim to the grant of a patent containing any of the claims in
conflict.
[28]
Bayer
bases its argument essentially on a reading of the decision of the Exchequer
Court, Jackett P., in Philco Corp. v. R.C.A. Victor Corp. (1966), 50
C.P.R. 282 as affirmed by the Supreme Court of Canada (page 283 of that
report), on section 43 of the “old” Patent Act, and on sections 25 and
26(1) of the Patent Rules as applicable in the period from 2000 onward.
[29]
In Philco
the Court was dealing with an extension of time given by the Commissioner after
a final determination of the conflict had been made and a time for taking Court
proceedings had been fixed by the Commissioner. Section 45(8) of the Patent
Act, which remains the same today except for substitution of Federal Court
for Exchequer
Court says:
The claims in conflict shall be rejected
and allowed accordingly unless within a time to be fixed by the Commissioner
and notified to the several applicants one of them commences proceedings in the
Federal Court for the determination of their respective rights, in which event
the Commissioner shall suspend further action on the applications in conflict
until…
President Jackett wrote at page 286 of
the reported Philco case:
I have not been able to construe s. 45(8)
as conferring on the Commissioner not only the power to fix the time for
commencement of proceedings in the first instance, but, in addition, a power to
extend the time so fixed.
When Parliament has intended that a time
fixed for appealing can be extended, it has made express provision therefore.
Just as there can be no appeal unless Parliament has expressly provided for
one, so there can be no extension of time for an appeal unless Parliament has
provided for such an extension.
I should have not thought that a Judge of
this Court can extend the “further” that he has fixed under s. 82(3) of the
Exchequer Court Act, R.S.C. 1952, c. 98, for an appeal to the Supreme Court of
Canada, once he has fixed it; similarly, I am of opinion that the Commissioner
cannot extend the time that he has fixed for proceedings in a particular
conflict, once he has fixed it.
Bayer’s counsel argues that this analysis
applies equally to the extension of time purportedly granted during the
conflict proceedings under section 43(2) of the Patent Act.
[30]
The Patent
Rules respecting extensions of time granted by the Commissioner were Rules 125,
126, and 127 as set out at pages 287-288 of the Philco report:
“125. The Commissioner may fix a time for
the taking of any action for which a time is not prescribed by the Act or these
rules and an application may be deemed to be abandoned if such action is not
taken within the time so fixed.
“126. Except as provided in these rules,
if the Commissioner is satisfied by an affidavit setting forth the relevant
facts that having regard to all the circumstances any time prescribed by these
rules or the 1935 Rules or fixed by the Commissioner for doing any act ought to
be extended, the Commissioner may, either before or after the expiration
thereof, extend such time.
“127. Where a time prescribed by these
rules is extended pursuant to section 126, the extended time shall be deemed
for the purposes of these rules, but no extension of time shall affect any
action properly taken by the Office before such extension was granted by the
Commissioner.”
[31]
Bayer’s
counsel argues that the Patent Rules as amended and in force as of 2000 and
thereafter are even more stringent as to extensions. Rules 25 and 26(1) read as
follows (Rule 26(20 deals with shorter periods of time and is not relevant to
this discussion):
25. Except where other times are provided by the Act or these
Rules, the time within which action must be taken by an applicant where the
Commissioner, by notice, requisitions the applicant to take any action
necessary for compliance with the Act or these Rules is the three-month period
after the requisition is made.
26. (1) Subject to subsection (2) and any other provision of
these Rules, except in respect of Part V, the Commissioner is authorized to
extend the time fixed by these Rules or by the Commissioner under the Act for
doing anything, subject to both the extension being applied for
and the fee set out in item 22 of Schedule II being paid before the expiry of
that time, where the Commissioner is satisfied that the circumstances justify
the extension.
[32]
Part V of
the Rules as referred to in Rule 26(1) expressly deals with, as its title
states: “Applications
Filed Before October 1, 1989”, however nowhere in Part V is there any reference to
conflict proceedings or to section 43 of the “old” Patent Act.
Nonetheless, Bayer’s counsel argues, the reference to Part V in section 26(1)
of the Patent Rules is sufficient to say that no extensions of time in respect
of anything to do with applications filed before October 1, 1989 can be given
and that applies to conflict proceedings as well.
[33]
Bayer’s
Counsel made other elaborations on these arguments which I will not repeat
here. It is sufficient to set them out as I have. The same applies to
Monsanto’s Counsel’s arguments the main points of which I will now set out.
Monsanto
[34]
Monsanto
argues that the motion should not be granted for two reasons. The first is that
Bayer had several opportunities to raise a question as to the legitimacy of the
extension in the Patent Office and did nothing, thus it cannot raise the matter
now. The second argument is that, in any event, the Commissioner did have
proper authority to grant an extension of time. It argues that the Commissioner
extended time under the provisions of section 43(2)(b) of the “old” Patent
Act, which permits a “specified time” to be set rather than a “fixed” time
under section 43(8) as dealt with in Philco. Counsel relies on the
decision of this Court in Owens-Illinois Inc. v. Koehring Waterous Ltd. (1978),
40 C.P.R. (20) 72 (affirmed without discussion as to this point by the Federal
Court of Appeal in (1980), 52 C.P.R. (2d) 1) where Gibson J. (Hugh Gibson not
Fred Gibson) wrote at paragraphs 20 to 23:
20 The plaintiffs submitted that
there is no conflict and the plaintiffs are entitled to the claims because the
Commissioner of Patents had no jurisdiction to extend a time limit set by him
under subsection (5) of section 45 of the Patent Act.
21 The Commissioner granted the
defendant Koehring Waterous Ltd. an extension of time to file its affidavit
after it had failed to file its affidavit within the six months initially
specified by the Commissioner.
22 The plaintiffs submit that
there is no difference between sections 45(5) and 45(8) of the Patent Act; and
that the principle enunciated in respect to the latter subsection applies to
the former subsection, namely the principle enunciated in Philco Corporation v.
R.C.A. Victor Corporation affirmed in the result by the Supreme Court of Canada
that (counsel’s submission) “according to the statute the Commissioner could
fix the time under section 45(8) once and only once, after which it was as if
the time fixed, e.g. 6 months, was in the statute.”
23 In my view, the Commissioner of
Patents, unlike the situation he is in under section 45(8) of the Patent Act,
was not functus in the conflict proceedings in this matter when he fixed for
the first time, pursuant to section 45(5) of the Act, the time within which the
defendant Koehring Waterous Ltd. was to file its affidavit; and therefore, the
Commissioner has power to grant the extension of time for filing that he did.
[35]
The new Patent
Rules, Monsanto argues, makes no difference. Conflict proceedings are not
specifically dealt with anywhere in the new Rules, thus the general provisions
of Rule 25 apply so as to permit extensions.
Bayer’s Rebuttal as to
Timeliness
[36]
Bayer’s
Counsel argues, in rebuttal to Monsanto’s argument that the issue should have
been raised in the Patent Office, on two bases. First, Bayer says, it could not
have squarely raised the issue until it saw the file records of the patent
applications of Monsanto and the other parties to the conflict. Since under the
“old” Patent Act these applications were secret, Bayer could only see
the applications, in confidence, by way of discovery in this action. Second,
Bayer says that the extension decision was an interlocutory matter and could
not be addressed in Court until a final determination as to the conflict had
been made by the Commissioner.
Analysis
[37]
I will
consider the matters raised first as to whether Bayer can now raise the
extension issue, not having done so earlier and second as to whether the
Commissioner, in the year 2000, under the Patent Act and Rules as they existed,
had jurisdiction to grant the extension.
1. Can Bayer Raise the Issue
Now?
[38]
I find
that Bayer is precluded from raising the extension issue now because it did not
do so when the matter was in the Patent Office.
[39]
I start
with the general principles set out by La Forest J. in the Supreme Court of
Canada in K.M. v. H.M., [1992]
3 S.C.R. 6, where he wrote in dealing with the very sensitive issue of incest,
at pages 77 to 79:
A good discussion of the rule and of laches in general is
found in Meagher, Gummow and Lehane, supra, at pp. 755-65, where the authors
distill the doctrine in this manner, at p. 755:
It is a defence which requires that a
defendant can successfully resist an equitable (although not a legal) claim
made against him if he can demonstrate that the plaintiff, by delaying the
institution or prosecution of his case, has either (a) acquiesced in the
defendant's conduct or (b) caused the defendant to alter his position in
reasonable reliance on the plaintiff's acceptance of the status quo, or
otherwise permitted a situation to arise which it would be unjust to disturb...
.
Thus there are two distinct branches to the laches
doctrine, and either will suffice as a defence to a claim in equity. What is
immediately obvious from all of the authorities is that mere delay is
insufficient to trigger laches under either of its two branches. Rather, the
doctrine considers whether [page78] the delay of the plaintiff constitutes
acquiescence or results in circumstances that make the prosecution of the
action unreasonable. Ultimately, laches must be resolved as a matter of justice
as between the parties, as is the case with any equitable doctrine.
In this case, there is no question of the respondent's
"altering his position" because of the appellant's delay. Such
considerations obviously do not arise in a case such as this. Further, there is
nothing about the delay's here rendering further prosecution of the case
unreasonable. Therefore, if laches is to bar the appellant's claim, it must be
because of acquiescence, the first branch of the Lindsay rule.
Acquiesence is a fluid term, susceptible to various
meanings depending upon the context in which it is used. Meagher, Gummow and
Lehane, supra, at pp. 765-66, identify three different senses, the first being
a synonym for estoppel, wherein the plaintiff stands by and watches the
deprivation of her rights and yet does nothing. This has been referred to as
the primary meaning of acquiescence. Its secondary sense is as an element of
laches -- after the deprivation of her rights and in the full knowledge of
their existence, the plaintiff delays. This leads to an inference that her
rights have been waived. This, of course, is the meaning of acquiescence
relevant to this appeal. The final usage is a confusing one, as it is sometimes
associated with the second branch of the laches rule in the context of an
alteration of the defendant's position in reliance on the plaintiff's inaction.
As the primary and secondary definitions of acquiescence
suggest, an important aspect of the concept is the plaintiff's knowledge of her
rights. It is not enough that the plaintiff knows of the facts that support a
claim in equity; she must also know that the facts give rise to that claim: Re
Howlett, [1949] Ch. 767. However, this Court has held that knowledge of one's
claim is to be measured by an [page79] objective standard; see Taylor v. Wallbridge (1879), 2 S.C.R. 616,
at p. 670. In other words, the question is whether it is reasonable for a
plaintiff to be ignorant of her legal rights given her knowledge of the
underlying facts relevant to a possible legal claim.
It is interesting to observe that in practical terms the
inquiry under the heading of acquiescence comes very close to the approach one
takes to the reasonable discoverability rule in tort. As we have seen, the latter
focuses on more than mere knowledge of the tortious acts -- the plaintiff must
also know of the wrongfulness of those acts. This is essentially the same as
knowing that a legal claim is possible. That the considerations under law and
equity are similar is hardly surprising, and is a laudable development given
the similar policy imperatives that drive both inquiries.
[40]
The
instruction that I derive from K.M. pertinent to this present case is
that:
·
Mere delay
in itself is insufficient to preclude the denial of relief
·
The Court
must deal with the resolution as a matter of justice as between the parties
·
Acquiescence
can bar the grant of a remedy, it can be two fold in nature, one is where a
party stands by and watches the deprivation of its rights and does nothing, the
other is, after knowledge that rights are deprived, the party does nothing. The
party must not simply know facts, it must know that they gave rise to a claim.
However that knowledge as to rights is reviewed on an objective standard.
[41]
In the present
case Bayer, and its patent agents Gowling, Strathy & Henderson, the same
firm as represents Bayer legally in these actions, was aware in the middle of
the year 2000 that its patent application was in conflict with one or more
others, it did not know whose or how many, but they knew that a conflict
existed. As of September 2000 Bayer knew that an extension of time had been
granted to one or the other parties and, thereby, was granted by extension to
all parties. Again Bayer did not know who or how many, but it knew that one or
more parties existed. It did nothing. If it was truly intent in removing some
or all of the other parties at that time thus bringing the conflict to an end,
it could have written to the Commissioner complaining about the extension. If
the Commissioner did nothing or refused to agree with Bayer, judicial review
could have been sought.
[42]
I note
that Bayer argues in the summary judgment motion before me now that the motion
should be heard even though not all of the issues will be resolved and at least
one of party will remain if Bayer succeeds. It is content with a partial
victory now. Why not be content when it was before the Patent Office.
[43]
I am not
impressed with Bayer’s argument that it could not bring a judicial review at
that time since a final determination had not been made. The determination
would have been final if the Commissioner had agreed with Bayer and removed
some or all of the parties. In any event there are cases going both ways to
whether an intermediate decision could be judicially reviewed; certainly they
can where they are considered important which it would be if one or more
parties were removed or in peril of being removed from the conflict. The point
to be made is that Bayer did not even try. This argument is a convenient
afterthought. There is no evidence that Bayer had any intention at the relevant
time, of making an objection.
[44]
Bayer had
at least two more opportunities to make its objection. One was in January 2001
when it was advised by the Patent Office as to who the other parties were. This
knowledge was unnecessary but could have prompted Bayer into action.
[45]
The second
opportunity was when the Commissioner wrote a letter to Bayer in October 2003,
the substance of which has been set out earlier in these reasons, specifically
addressing the issue of extension of time. Again Bayer did nothing. The matter
was clearly raised, if Bayer had intended to do something about the matter it
clearly had the opportunity to address it then.
[46]
It would
bring the administration of justice into disrepute if Bayer, having had ample
opportunity to raise the matter in the Patent Office and failed to do so, could
do so now. Bayer did not need to have discovery to know that at least one other
person had an application in conflict and that an extension of time had been
granted. That is all it needed to know to raise the matter before the
Commissioner. There is nothing to suggest that the Commissioner would ignore
the matter. If Bayer succeeded the conflict was over or least some parties
removed. If it failed, recourse in the Courts could be attempted. If that
recourse had failed because a final decision should have been given before a
challenge in Court was made so be it. There is no evidence Bayer even
contemplated taking such steps. We have only Counsel’s arguments, not facts.
[47]
Further,
with respect to the delay, the Commissioner made a final decision as to the
conflict. No objection had been raised by Bayer as to the extension of time at
any point while the conflict was a time proceeding in the Patent Office. The
matter of an extension had become moot. I refer to Mahoney J. of this Court in Cyanamid
Agricultural de Puerto Rico v. Commissioner of Patents (1983), 74 C.P.R.
(2d) 133 where he wrote at page 136:
I
do not find it necessary to decide whether the decisions attacked in these
applications, refusals of adjournments and denial of opportunities to
cross-examine, fall within the contemplation of the term "any
decision" as used in subsection 41(11). The Federal Court of Appeal may
have to decide that if an appeal from such an interlocutory decision is taken.
Neither do I find it necessary to decide whether the decisions attacked would
be amenable to an application under section 18 of the Federal Court Act if the
compulsory licences had not previously been issued. It seems to me that, once
the mandated decision i.e. the decision to grant the compulsory licence has
been made, decisions of the sort under attack must be taken to have been merged
in it. They may or may not afford a basis for successful appeal against the
mandated decision but the making of the mandated decision renders any attack on
them as independent decisions entirely moot. In view of section 29 of the
Federal Court Act, no decision of the Trial Division that, for example, the
Commissioner erred in denying the Applicants an adjournment could, in any way
whatever, affect the licenses.
[48]
Therefore
I dismiss Bayer’s motion since the delay and failure to raise the issue in the Patent
Office at a proper time is factually unexplained and it would bring the
administration of justice into disrepute to grant the remedy sought now under
such circumstances. Once the final decision on the conflict was rendered the
matter became moot.
2. Did the Commissioner Have
the Authority to Grant the Extensions?
[49]
The
extension of time was granted by the Commissioner under the provisions of
section 43(2)(b) of the “old” Patent Act. That section refers to a time
“stipulated” by the Commissioner. The Philco case, previously referred
to, deals with a situation where the Commissioner had made the final
determination as to the conflict and is required to “fix” a time within which
proceedings may be commenced in the Federal Court.
[50]
In Philco
the editor of the Canadian Patent Reports Gordon F. Henderson, Q.C. where
the case was reported, expressed in an editorial note some doubt as to whether
the decision (which said that a “fixed” time under section 43(8) could not be
extended) would apply to a “stipulated” time under section 43(2):
EDITORIAL NOTE: This decision is in keeping
with the current practice in the Exchequer Court to ensure that applications
for patent do not linger in the Courts whereby the resultant patent will issue
at a time that it could be disruptive of industrial development. Once the
Commissioner of Patents has fixed the time contemplated by s. 45(8) of the Act
he can only reject and allow claims in accordance with his decision unless such
action is suspended by the commencement of an action within the time so fixed.
The time fixed by the Commissioner becomes a time fixed by statute for the
institution of an action.
Since the times to be fixed by the
Commissioner under the provisions of s. 45 preliminary to the making of an
award by him relate to proceedings within the office, it is an open question
whether they are subject to the rule applied in this case. But, as they arise
by statute, Rule 126, P.C. 1954-1855, SOR Con. 1955, Vol. 3, p. 2510 at p.
2531, would be equally applicable to them. Certainly, it is the course of
wisdom to comply strictly with the time limits defined by the Commissioner
pursuant to powers given to him by the Patent Act.
[51]
As
previously discussed in these reasons, this Court, in Owens- Illinois, held that a distinction was
to be made between section 43(8) “fixed” times where no extension is possible
and section 43(2) (b) “stipulated” times, where extensions were permissible.
The Commissioner, while still seized with the conflict, had the power to stipulate
and to extend time periods during the course of the conflict proceedings in the
Patent Office.
[52]
I do not
agree with Bayer’s Counsel that Rule 26(1) of the Patent Rules, which was
in place at the relevant time from the year 2000 onward, precludes extensions
of time in conflict matters. Rule 25 as previously set out in these reasons
sets out a general three month time period to respond to a request from the
Commissioner. Rule 26(1) permits extensions of that time period “except in
respect of Part V”. Part V does not refer to conflict proceedings at all.
It does refer to other matters respecting pre-October 1, 1989 applications and,
when dealing with time and time periods, does so only in respect of maintenance
fees (section 182) and deposit of biological material (sections 183 to 186).
[53]
I agree
that the Commissioner’s odd letter of October 20, 2003 set out earlier in these
reasons may be taken to mean that the Commissioner expressed some reservations
as to whether Rule 26 applied to conflicts however it made no express ruling on
the point. The only result was that, from that time onward no extensions would
be granted. The important point to note is that the Commissioner did not
disqualify any party because an extension of time had previously been granted.
[54]
The interpretation
of the Commissioner’s statements, which can only be inferred, is that caution
is to be applied when granting extensions, and, in the conflict before the
Patent Office at that time no future extensions would be given. Clearly, the
Commissioner did not disqualify a party on the basis of a past extension. The
interpretation of its Rules by an administrative body such as the Patent Office
is the kind of process in which the Courts should not interfere. If the
interpretation is reasonable, then the administrative authority should be
allowed to get on with its business. The Supreme Court of Canada in Canada (Citizenship and Immigration)
v. Khosa,
[2009] 1 S.C.R. 339, made this point at paragraph 44:
44
Judicial intervention is authorized where a federal board, commission or
other tribunal
·
(c) erred in law in making a decision or an order, whether or not the
error appears on the face of the record;
Errors of law are generally governed by a correctness
standard. Mugesera v. Canada (Minister of Citizenship and Immigration), 2005 SCC 40, [2005] 2 S.C.R. 100,
at para. 37, for example, held that the general questions of international law
and criminal law at issue in that case had to be decided on a standard of
correctness. Dunsmuir (at para. 54), says that if the interpretation of the
home statute or a closely related statute by an expert decision-maker is
reasonable, there is no error of law justifying intervention. Accordingly,
para. (c) provides a ground of intervention, but the common law will stay the
hand of the judge(s) in certain cases if the interpretation is by an expert
adjudicator interpreting his or her home statute or a closely related statute.
This nuance does not appear on the face of para. (c), but it is the common law
principle on which the discretion provided in s. 18.1(4) is to be exercised.
Once again, the open textured language of the Federal Courts Act is
supplemented by the common law.
[55]
In short,
the Commissioner may decide not to grant extensions in conflict matters, but
Rule 26(1) does not say that extensions cannot be granted in such matters. If
an extension was granted and the Commissioner does not say that it was improper
nor take any step to reverse it or impose consequences the Court should not
interfere. Therefore I find that the Commissioner made no error in granting the
extension at issue.
Costs
[56]
Counsel were invited to make submissions as to costs. They did so
and said that they were agreed, subject to any ruling by the Court of Appeal,
that the prevailing party should be awarded costs fixed in the sum of
$10,000.00. I will award costs to Monsanto in that sum inclusive of all
disbursements and taxes.
ORDER
FOR THE REASONS PROVIDED
THIS COURT ORDERS that:
1.
The motion
is dismissed;
2.
Monsanto
is awarded costs fixed in the sum of $10,000.00 inclusive of all taxes and
disbursements.
“Roger T. Hughes”
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