Date:
20121203
Docket: T-1417-11
T-1748-11
Citation: 2012
FC 1388
Ottawa, Ontario,
December 3, 2012
PRESENT: The
Honourable Mr. Justice O'Reilly
BETWEEN:
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BING BAKSH
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Applicant
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and
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PROBIOHEALTH, LLC
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Respondent
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REASONS FOR
JUDGMENT AND JUDGMENT
I. Overview
[1]
Mr
Bing Baksh contends that, in 2011, the Commissioner of Patents wrongfully
removed him as a named inventor on Canadian Patent Application No 2,503,510
[the ‘510 patent]. Out of caution, he has filed both an appeal and an
application for judicial review of that decision.
[2]
The
‘510 patent relates to probiotic bacteria used as nutritional supplements. In
1999, Mr Yoshiteru Kiode, managing partner of Probiohealth, LLC, told Mr Baksh
that he was attempting to encapsulate a particular bacterial strain of lactic
acid, but was having trouble maintaining its stability and viability. Mr Baksh
suggested that suspending the material in oil might solve those problems.
[3]
Eventually,
Mr Baksh and Mr Kiode agreed that Mr Baksh would provide a
nitrogen-purge-instant-bonding packaging system for the probiotic material,
while Probiohealth, through a subcontractor, Dr Satyanarayan Naidu, worked on
the oil suspension issues.
[4]
Dr
Naidu determined that certain oils had an unexpected prebiotic effect, which
stimulated the activity of the probiotic bacteria. In 2002, Probiohealth filed
an application for an invention relating to the preservative and prebiotic
potential of certain oils on probiotic bacteria encapsulated by Mr Baksh’s
process. Probiohealth was the applicant for the patent; Dr Naidu and Mr Baksh
were named as co-inventors. This eventually became the ‘510 patent application.
[5]
In
2006, the Canadian Intellectual Property Office [CIPO] asked Probiohealth to
provide evidence that it was the legal representative of the inventors. Dr
Naidu assigned his rights to Probiohealth. Mr Baksh refused.
[6]
Probiohealth
also filed a voluntary amendment to its patent application cancelling the
claims in the ‘510 patent application relating to Mr Baksh’s encapsulation
system. Mr Baksh refiled those claims in a separate divisional patent
application which, while originally turned down, was upheld on judicial review
(Vita-Herb Nutriceuticals Inc v Canada (AG), 2010 FC 1203).
[7]
In
2009, Probiohealth asked the Commissioner to remove Mr Baksh from the ‘510
patent application, and the Commissioner agreed. However, Mr Baksh objected and
noted that Probiohealth had not supported its request with affidavit evidence
as required by s 31(3) of the Patent Act, RSC 1985, c P-4 (see Annex for
provisions cited). He filed both an appeal and an application for judicial
review of the Commissioner’s decision.
[8]
Ultimately,
in 2010, the Commissioner and Mr Baksh settled the matter. Mr Baksh agreed to
discontinue his legal challenges and the Commissioner agreed to reverse his
decision removing Mr Baksh as a co-inventor of the ‘510 patent application.
[9]
However,
Probiohealth subsequently filed a second request to remove Mr Baksh as a
co-inventor on the ‘510 patent. In its letter, Probiohealth noted that its sole
authorized representative was its law firm, Gowling Lafleur Henderson and, in
accordance with s 6(1) of the Patent Rules, SOR/96-423, future
correspondence should be sent only to Gowlings and not copied to third parties.
[10]
This
time, in accordance with s 31(3) of the Patent Act, Probiohealth
supported its request with an affidavit sworn by Dr Naidu. He claimed that he
was the sole inventor of the remaining claims of the ‘510 patent. His
discoveries came about as a result of experiments he devised and carried out,
and were unrelated to Mr Baksh’s encapsulation system, which was the subject of
a separate divisional patent application.
[11]
In
2011, the Commissioner sent a letter to Probiohealth confirming that Mr Baksh
had been removed as a co-inventor on the ‘510 patent. Mr Baksh appeals and
seeks judicial review of that decision.
[12]
In
my view, the proper remedy is judicial review. However, I can find no basis for
overturning the Commissioner’s decision and must, therefore, dismiss Mr Baksh’s
application.
[13]
There
are four issues:
i.
Is
the Commissioner’s decision amenable to appeal or judicial review?
ii.
Was
the Commissioner estopped from removing Mr Baksh as a co-inventor?
iii.
Did
the Commissioner treat Mr Baksh unfairly?
iv.
Was
the Commissioner’s decision unreasonable?
[14]
These
reasons relate both to Mr Baksh’s appeal and application for judicial review
(Court files T-1417-11 and T-1748-11). The original of the reasons will be
filed in T-1417-11 and a copy will be placed in T-1748-11.
II. Issue One – is the
Commissioner’s decision amenable to appeal or judicial review?
[15]
Probiohealth
applied to the Commissioner for a decision under s 31(3) of the Patent Act.
It attempted to satisfy the Commissioner that Dr Naidu was the sole inventor of
the ‘510 patent and, therefore, that Mr Baksh should not be named as a
co-inventor. The Commissioner agreed.
[16]
A
decision under s 31(3) can be appealed to the Federal Court (s 31(6)). Had
Probiohealth failed to satisfy the Commissioner, it could have appealed that
decision.
[17]
However,
s 31(6) does not give third parties a right of appeal.
[18]
The
situation is analogous to that addressed in Ontario Association of
Architects v Association of Architectural Technologists of Ontario, 2002
FCA 218. There, in the context of the Trade-marks Act, RSC 1985, c T-13,
the Federal Court of Appeal found that persons who were not parties or
interveners in the original proceedings could not exercise a right of appeal (at
para 40-42). The proper remedy, therefore, is an application for judicial
review. The same is true for Mr Baksh.
[19]
I
will therefore dismiss Mr Baksh’s appeal and deal with his submissions only in
relation to his application for judicial review.
[20]
I
must point out, however, that, with rare exceptions, only the evidence that was
before the decision maker can be considered on an application for judicial
review. Therefore, I cannot consider the affidavit that Mr Baksh filed in his
previous application for judicial review. While this affidavit was appended to
the settlement agreement that Mr Baksh and the Commissioner reached in 2010, it
was not before the Commissioner on Probiohealth’s second request to remove Mr
Baksh from the ‘510 patent. Therefore, I cannot consider it. Nor can I
consider the subsequent cross-examination on that affidavit.
III. Issue Two – Was the
Commissioner estopped from removing Mr Baksh as a co-inventor?
[21]
Mr
Baksh argues that the Commissioner was estopped from granting Probiohealth’s
request to remove him as a co-inventor because the Commissioner, in the 2010
settlement agreement, had accepted that Mr Baksh should not be removed as a
co-inventor. The Commissioner could not, according to Mr Baksh, conclude
otherwise simply because Probiohealth presented a second request. The
settlement agreement appended Mr Baksh’s affidavit in which he claimed
inventorship; therefore, the agreement, and the Commissioner, implicitly
accepted his claim.
[22]
Accordingly,
Mr Baksh contends that the circumstances required the Commissioner, at a
minimum, to invite him to make submissions before exercising the discretion
afforded under s 31(3) of the Patent Act to remove him as an inventor.
[23]
In
my view, the settlement agreement did not prevent the Commissioner from subsequently
removing Mr Baksh as a co-inventor. The Commissioner accepted that the original
decision removing Mr Baksh was improper because Probiohealth had not supported
its request with affidavit evidence, as required by s 31(3). Accordingly, he
agreed to reverse his decision in exchange for Mr Baksh’s discontinuation of the
legal proceedings he had commenced. In a letter to Probiohealth dated May 27,
2010 (a week before the settlement), the Commissioner explained that he was
reversing his decision because “the provisions of section 31 of the Patent Act
were not strictly complied with”. This suggests that the reversal was on
technical grounds, not because the Commissioner was satisfied that Mr Baksh
actually was a co-inventor.
[24]
Therefore,
the settlement agreement did not stand in the way of Probiohealth’s second
request and did not prevent the Commissioner from granting it. The previous
agreement did not constitute a promise to Mr Baksh about how any future
requests would be decided. As such, the Commissioner was not estopped from
granting Probiohealth’s second request (Aurchem Exploration Ltd v Canada,
(1992), 91 DLR (4th) 710 (FCTD), at para 13). Indeed, it would have
been improper for the Commissioner to commit to rejecting a future request that
was supported by an affidavit, and that satisfied the Commissioner that a named
inventor had had no part in the invention.
IV. Issue Three – Did the
Commissioner treat Mr Baksh unfairly?
[25]
Mr
Baksh maintains that the Commissioner treated him unfairly by failing to give
him an opportunity to make submissions in response to Probiohealth’s request.
The settlement agreement created a legitimate expectation that he was properly
named as an inventor on the ‘510 patent. Therefore, the Commissioner had a duty
to invite Mr Baksh to make representations when the second request was under
consideration.
[26]
I
disagree.
[27]
There
was only one named applicant on the ‘510 patent – Probiohealth. Dr Naidu and Mr
Baksh were listed as co-inventors, which meant they fell within the definition
of an “applicant” in s 2 of the Patent Act. However, Dr Naidu had assigned
his interests to Probiohealth, so he was no longer an applicant. Mr Baksh
failed to assign his interests to Probiohealth, so he remained an applicant.
And, because Mr Baksh failed to assign his interests, the patent application
was stalled. Probiohealth could not prosecute the patent until Mr Baksh
assigned his interests to Probiohealth or Mr Baksh was removed as a
co-inventor.
[28]
This
is what led to Probiohealth’s efforts s 31(3) to remove Mr Baksh as a
co-inventor – he would then no longer be an “applicant” and Probiohealth could continue
to prosecute the patent on its own.
[29]
Subsection
31(3) does not contemplate the holding of a hearing or receiving submissions
from other interested parties. The question is whether the remaining applicant
(Probiohealth) could satisfy the Commissioner, by affidavit, that Mr Baksh
should be removed as a co-inventor. Therefore, the Commissioner did not err in
considering only Dr Naidu’s affidavit. He did not treat Mr Baksh unfairly, as
he was simply following the requirements of the Patent Act.
[30]
Further,
Mr Baksh could not have had a legitimate expectation that he would have an
opportunity to make submissions. First, Rule 6(1) prevented the Commissioner from
communicating with an unauthorized party. It states that the Commissioner
“shall only communicate with, and shall only have regard to communications
from, the authorized correspondent”. Here, the authorized correspondent was
Probiohealth’s legal counsel, Gowlings. Second, the Commissioner could only
consider affidavit evidence put forward by the applicant; he could not consider
Mr Baksh’s affidavit.
[31]
Finally,
the Commissioner did not have a duty to give reasons to Mr Baksh or any other unauthorized
party. Probiohealth might have been able to claim that it was owed reasons had the
Commissioner refused its request, but that issue is not before me.
[32]
I
also note that Mr Baksh had other remedies available to him. He could have
applied under s 31(4) to be added as a co-inventor, or he could have moved to
correct the patent register under s 52.
V. Issue Four – Was the
Commissioner’s decision unreasonable?
[33]
Mr
Baksh argues that the Commissioner’s decision to remove him as a co-inventor
was unreasonable because it represents an indefensible outcome based on the
facts and the law. Mr Baksh again submits that the Commissioner should have
weighed Dr Naidu’s affidavit against his own. If he had done so, the
Commissioner could not have been satisfied that Dr Naidu was the sole inventor
of the ‘510 patent.
[34]
I
cannot conclude that the Commissioner’s decision was unreasonable.
[35]
First,
the Commissioner had no obligation to weigh the two affidavits. In fact, as
explained above, he could not do so. Under the Patent Act, if the
remaining applicant satisfies the Commissioner on affidavit that it is the sole
inventor, then it can prosecute the patent on its own. In deciding this issue,
the Commissioner could not have communicated with or considered representations
from unauthorized persons, including Mr Baksh.
[36]
Second,
Dr Naidu’s affidavit provided sufficient evidence to support the Commissioner’s
decision. Dr Naidu explained that Mr Baksh’s contribution to the invention was
limited to the encapsulation system (which was the subject of a separate
divisional patent). Dr Naidu discovered the prebiotic effects of certain edible
oils when combined with probiotic bacteria. While Mr Baksh may have originally
planted the idea of using oil emulsions to solve problems with viability and
stability, this did not form part of the subject matter of the ‘510 patent application.
VI. Conclusion and
Disposition
[37]
As
explained above, Mr Baksh’s appeal is dismissed because he is not entitled to
appeal the Commissioner’s decision.
[38]
In
addition, Mr Baksh’s application for judicial review is dismissed. The prior
settlement agreement with Mr Baksh did not prevent the Commissioner from
removing Mr Baksh as a co-inventor. The Commissioner could not have considered
any submissions from Mr Baksh and, therefore, did not treat Mr Baksh unfairly
by arriving at his decision without them. Further, the Commissioner’s decision
was not unreasonable – it represented a defensible outcome based on the facts
and the law.
[39]
Accordingly,
the judicial review is dismissed, with costs.
JUDGMENT
THIS
COURT’S JUDGMENT is that:
- The appeal
is dismissed.
- The
application for judicial review is dismissed with costs.
“James W. O’Reilly”
Annex
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Patent
Act,
RSC 1985, c P-4
Procedure
when one joint applicant retires
31. (3)
Where an application is filed by joint applicants and it subsequently appears
that one or more of them has had no part in the invention, the prosecution of
the application may be carried on by the remaining applicant or applicants on
satisfying the Commissioner by affidavit that the remaining applicant or
applicants is or are the sole inventor or inventors.
Joining
applicants
(4)
Where an application is filed by one or more applicants and it subsequently
appears that one or more further applicants should have been joined, the
further applicant or applicants may be joined on satisfying the Commissioner
that he or they should be so joined, and that the omission of the further
applicant or applicants had been by inadvertence or mistake and was not for
the purpose of delay.
…
Appeal
(6)
An appeal lies to the Federal Court from the decision of the Commissioner
under this section.
Jurisdiction
of Federal Court
52.
The Federal Court has jurisdiction, on the application of the Commissioner or
of any person interested, to order that any entry in the records of the
Patent Office relating to the title to a patent be varied or expunged.
Patent
Rules,
SOR/96-423
6.
(1) Except as provided by the Act or these Rules, for the purpose of
prosecuting or maintaining an application the Commissioner shall only
communicate with, and shall only have regard to communications from, the
authorized correspondent.
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Loi
sur les brevets,
LRC 1985, ch P-4
Procédure
quand un codemandeur se retire
31. (3)
Lorsqu’une demande est déposée par des codemandeurs et qu’il apparaît par la
suite que l’un ou plusieurs d’entre eux n’ont pas participé à l’invention, la
poursuite de cette demande peut être conduite par le ou les demandeurs qui
restent, à la condition de démontrer par affidavit au commissaire que le ou
les derniers demandeurs sont les seuls inventeurs.
Codemandeurs
(4)
Lorsque la demande est déposée par un ou plusieurs demandeurs et qu’il
apparaît par la suite qu’un autre ou plusieurs autres demandeurs auraient dû
se joindre à la demande, cet autre ou ces autres demandeurs peuvent se
joindre à la demande, à la condition de démontrer au commissaire qu’ils
doivent y être joints, et que leur omission s’est produite par inadvertance
ou par erreur, et non pas dans le dessein de causer un délai.
[…]
Appel
(6)
Appel de la décision rendue par le commissaire en vertu du présent article
peut être interjeté à la Cour fédérale.
Juridiction
de la Cour fédérale
52.
La Cour fédérale est compétente, sur la demande du commissaire ou de toute
personne intéressée, pour ordonner que toute inscription dans les registres
du Bureau des brevets concernant le titre à un brevet soit modifiée ou
radiée.
Règles
sur les brevets,
DORS/96-423
6.
(1) Sauf disposition contraire de la Loi ou des présentes règles, dans le
cadre de la poursuite ou du maintien d’une demande, le commissaire ne
communique qu’avec le correspondant autorisé en ce qui concerne cette demande
et ne tient compte que des communications reçues de celui-ci à cet égard.
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