Date:
20110718
Docket: A-282-10
Citation: 2011 FCA 228
CORAM: NADON
J.A.
EVANS
J.A.
LAYDEN-STEVENSON
J.A.
BETWEEN:
CORLAC INC., NATIONAL-OILWELL CANADA
LTD.,
and NATIONAL OILWELL INCORPORATED
Appellants
and
WEATHERFORD CANADA LTD.,
WEATHERFORD CANADA PARTNERSHIP,
DARIN GRENKE, as Personal Representative
of the Estate of EDWARD GRENKE,
and GRENCO INDUSTRIES LTD.
Respondents
and
THE INTELLECTUAL PROPERTY INSTITUTE OF CANADA
Intervener
REASONS FOR JUDGMENT
[1] This is an appeal from
the judgment of Justice Phelan of the Federal Court (the judge) in an
infringement action and counterclaim in relation to Canadian Letters Patent No.
2,095,937 (the '937 Patent) issued on December 22, 1998 and titled “Sealing
Assembly for Rotary Oil Pumps and Method of Using Same.”
[2] The
respondents alleged infringement of the '937 Patent in the manufacture and sale
of the appellants’ drive systems for rotary oil well pumps. The appellants
denied the allegations, attacked the validity of the patent and counterclaimed
against the respondents. The appellants alleged that, by assignment or licence,
they were the owners of the '937 Patent and the respondents had infringed the
appellants’ patent rights. The proceeding was the subject of a bifurcation
order under which damages were to be tried separately from liability.
[3] The
judge issued a declaration that the patent was valid and infringed by the
appellants jointly and severally. He ordered injunctive relief, damages to be
assessed, pre- and post-judgment interest and costs to be determined. The
judge’s reasons for judgment are reported as 2010 FC 602, 84 C.P.R. (4th) 237.
[4] The
appellants appeal from the judgment on several grounds. Intervener status was
granted to the Intellectual Property Institute of Canada (IPIC) to make
submissions with respect to a single issue. For the reasons that follow, I
would allow the appeal regarding the judge’s finding of infringement with
respect to claim 17 of the '937 Patent. In all other respects, I would dismiss
the appeal. For ease of reference, a table of contents is provided.
TABLE OF CONTENTS
Paragraph
Number
Background................................................................................................... 5
Standard of Review..................................................................................... 18
Statutory Provisions..................................................................................... 19
Issues.......................................................................................................... 20
Claims Construction..................................................................................... 21
Anticipation (Prior Disclosure)..................................................................... 36
Obviousness................................................................................................ 66
Grenke’s Credibility..................................................................................... 88
Inventorship................................................................................................. 96
Engelen........................................................................................ 100
Torfs............................................................................................. 104
Misrepresentations to the Patent Office...................................................... 111
Subsection 53(1).......................................................................... 113
Paragraph 73(1)(a)...................................................................... 130
Injunctive Relief........................................................................... 152
Adverse Inferences.................................................................................... 155
Conclusion................................................................................................ 172
Schedule “A” ..................................................................................... page
68
Background
[5] The
factual background is lengthy and complex. It is set out in detail in the
judge’s reasons for judgment (reasons). The parties identified 27 issues at
trial; there are seven issues on appeal. Only the facts essential to an
understanding of the issues before this Court will be summarized here. Further
background may be provided throughout these reasons as necessary. The summary
below is a much-abbreviated version of the factual background provided by the
judge.
[6] Conventional
oil wells were operated by vertically-reciprocating pumps that were constructed
in such a way that a stuffing box protected against leakage and loss of oil.
When rotary progressive cavity pumps (PC pumps) came on the scene, the
conventional stuffing boxes did not work well. The stuffing box (stuffed with
compressed packing) caps the flow tee (which diverts oil into pipes leading it
to storage) and seals the rotating polished rod of the PC pump.
[7] In the 1980s,
Canadian oil producers were experiencing a common problem. The oil being pumped
from the ground was not pure; it contained dirt, salt and sand. The debris
created friction and pressure. These forces caused the stuffing boxes on the PC
pumps to fail, which resulted in loss of oil, environmental damage, and
unplanned shutdowns of the wells to allow for repairs.
[8] Oil producers
were interested in a technology that would either stop stuffing boxes from
failing, or would allow them to anticipate a failure in order to schedule
planned maintenance. In late 1990, H&R Valve (H&R) was testing a
prototype stuffing box employing a static seal against the polished rod. Art
Britton (Britton), a maintenance crew foreman at Amoco (an oil producer), had
watched the prototype run. The basic idea was that the wear and tear on the
polished rod and packing could be alleviated by turning the polished rod and
packing together. Britton discussed the H&R concept with his maintenance
crew (known as the EI or CI crew), but nothing came of the discussions.
[9] Edward Grenke
(Grenke), a machinist by trade and the controlling shareholder of GrenCo
Industries Ltd. (GrenCo), was working on solving the stuffing box problem. In
early 1991, Grenke and Britton discussed the problem and a potential solution.
Grenke had his son, Wes Grenke, prepare a drawing of Grenke’s concept of a
sleeve having static seals around the polished rod, both contained within a
recess in stationary housing where dynamic seals could be placed against the
sleeve.
[10] At Grenke’s
request, Britton prepared a video of the sites and wells experiencing the
stuffing box failures. In the spring of 1991, Grenke and Britton travelled to Hamburg, Germany to
discuss the various types of available seals with Martin Merkel GmbH (Merkel),
a German engineering company. Grenke discussed his proposal with Michael
Engelen (Engelen), the seal expert at Merkel, and with other Merkel personnel.
Engelen provided suggestions regarding the types of seals that could be used in
the device.
[11] While in Germany, Grenke
tried unsuccessfully to connect with Walter Torfs (Torfs), the Canadian
representative of A. Friedr. Flender AG (Flender), a manufacturer of drive
heads for various pumps. After returning to Canada, Grenke met
with Torfs to discuss making a drive unit incorporating the seal assembly.
Around the same time, Merkel modified Grenke’s drawings to show an additional
apparatus so that when the seals failed, the static seals could be converted to
dynamic seals and vice versa.
[12] Grenke built
a prototype of the sealing arrangement. On June 21, 1991, the first prototype
was installed on one of Amoco’s oil wells. A second prototype was installed in
August. Around the same time, Grenke met Torfs and David Scott to discuss the
drive components. An off-the-shelf gearbox was not successful and Flender
agreed to design a gearbox for GrenCo. Grenke and Torfs discussed joint
inventorship and a 50-50 ownership of the ensuing patents. Grenke continued to
work on the device throughout the fall of 1991 and the spring of 1992.
[13] In April and
May, 1992, Britton was involved in sales negotiations with Pan Canadian
(another oil producer) and disclosed the inner workings of the prototype to the
Pan Canadian representatives. The negotiations resulted in the installation of
a prototype on one of Pan Canadian’s wells. On or about June 19, 1992, an
invoice relating to a packing slip, work order and credit note was issued by
GrenCo to Pan Canadian.
[14] On May 11,
1993, Grenke filed an application for a patent with respect to his device. The
claimed invention includes a plurality of dynamic seals with a leak passage for
each seal and teaches a method by which the passages are monitored for leaks. The
initial petition named Grenke and Torfs as co-inventors. On November 3, 1993,
Torfs died. Flender agreed that Grenke would take over any patents filed on its
behalf by Torfs and those jointly filed. The formal assignment from Flender is
dated March 24, 1994. By February 14, 1994, Magda Torfs, the widow of Torfs,
agreed to assign any rights to the patent to Grenke. The formal assignment from
Magda Torfs is dated November 11, 1994. On August 17, 1994, Grenke swore an
affidavit stating that he was the true sole inventor of the patent and that
Torfs should not have been named in the initial petition. This affidavit was
sent to the Commissioner of Patents (the Commissioner) on December 8, 1994.
[15] Sometime in
1999, Corlac Equipment Ltd. began to manufacture (and in 2000 sell) a rotating
stuffing box under the name “Enviro.” The respondents brought an action against
the appellants alleging that the Enviro product infringed the '937 Patent.
[16] As for the
identification of the various parties, the judge provides detailed information
in this respect at paragraphs 9 through 17 of his reasons. Briefly, Grenke is
the owner and named inventor of the '937 Patent, which he licensed to GrenCo.
The patent rights were sublicensed to Weatherford Canada Ltd. and subsequently
to Weatherford Canada Partnership (collectively Weatherford). National Oilwell
Incorporated (now National Oilwell Varco Inc.) is the parent company of
National-Oilwell Canada Ltd. (collectively National). National purchased the
shares of Corlac Equipment Ltd. (responsible for the manufacture and sale of
drive heads and stuffing boxes). Corlac Inc. was the parent company of Corlac
Equipment Ltd. (collectively Corlac). Although there were issues at trial
regarding corporate structure, control, licensing and standing, no such issues
arise on this appeal.
[17] The trial
began on April 20, 2009, concluded on June 1, 2009 and involved 21 witnesses.
The reasons comprise 380 paragraphs covering multiple issues of a wide variety.
The issues on appeal are significantly narrower than those at trial. Notably,
the judge stated at paragraph 8 of his reasons that although there were
numerous and complex technical and legal issues, the root of the matter was an
“assessment of credibility in respect of inventorship and a consideration of
the behaviour of the key actors in this case.” The judge’s reasons will be
referenced as required in relation to the issues on appeal. “Grenke” and
“GrenCo” are frequently used interchangeably throughout the judge’s reasons. I
will follow suit.
Standard of Review
[18] The
standard of review is articulated in Housen v. Nikolaison, 2002 SCC 33, [2002]
2 S.C.R. 235. There, the Supreme Court reiterated that an appeal is not a
re-trial of a case. Questions of law are to be determined on a standard of
correctness. This means that if a trial judge errs in law, an appellate court
is at liberty to replace the opinion of the trial judge with its own. The
standard of review for findings of fact is palpable and overriding error, that
is, the factual findings cannot be reversed in the absence of a material error
that is plainly seen. Findings of mixed fact and law are also to be reviewed
for palpable and overriding error unless there is an extricable question of
law, which is reviewed for correctness.
Statutory Provisions
[19] The
applicable statute is the Patent Act, R.S.C. 1985, c. P-4 (the Act). The
Patent Rules, SOR/96-423 are also relevant. The text of the provisions
referred to in these reasons is attached as Schedule “A”.
Issues
[20] The
appellants define seven issues, several of which contain one or more subsidiary
issues. The subsidiary issues will be addressed as necessary in the discussion
regarding each of the main issues. Broadly speaking, the issues can be
summarized under the following headings: claims construction; prior disclosure
(anticipation); obviousness; Grenke’s credibility; inventorship; misrepresentations
to the Patent Office; and adverse inferences (inducement).
Claims Construction
[21] The
appellants’ claims construction argument contains three distinct components.
The first component is that the judge failed to construe the claims of the '937
Patent; the second is that he did not construe the claims correctly; the third
is that he did not identify any essential elements.
[22] It
seems to me somewhat illogical to suggest the judge incorrectly construed what
he allegedly failed to construe. The appellants’ submission that the claims
were not correctly construed was not developed in their written submissions or
at the hearing of the appeal. The argument constitutes a bare assertion and the
appellants do not identify a specific error on the part of the judge. In the
absence of any particular alleged error, I do not intend to dwell on this
argument.
[23] Although
the submissions that the judge failed to construe the claims and did not
identify any essential elements contain more substance, they did not factor
heavily into the appellants’ arguments on appeal. Any analysis of these
assertions requires that they be examined in the context in which the issues
were pursued at trial.
[24] To be sure,
claims construction is a question of law: Whirlpool Corp. v. Camco Inc.,
2000 SCC 67, [2000] 2 S.C.R. 1067, para. 76 (Whirlpool). However, in
construing the claims, the judge will be assisted (but not bound) by evidence
from expert witnesses in order to be able to construe the claims in a
knowledgeable way: Whirlpool, para. 57. The judge’s assessment of the
expert evidence as well as his factual conclusions as to the state of the art
are factual findings that will not be reversed on appeal absent palpable and
overriding error: Halford v. Seed Hawk Inc., 2006 FCA 275, 54
C.P.R. (4th) 130, para. 11; Whirlpool, para. 62.
[25] Notably,
the appellants do not take issue with the judge’s recitation of the applicable
legal principles regarding claims construction as set out at paragraphs 116
through 120 of his reasons.
[26] It is true
that the trial judge did not specifically delineate the essential elements of
the claims. At trial, the appellants argued that their experts had identified
elements essential to the invention and that the failure of the respondents’
experts to do likewise constituted a “calculated attempt” to “escape
limitations in a claim that [the inventor] specifically and intentionally
included.” Relying upon Free World Trust v. Électro Santé Inc., 2000
SCC 66, [2000] 2 S.C.R. 1024 (Free World Trust), the appellants
described the respondents’ omission as a “self-inflicted wound.” Referring
specifically to paragraph 57 of Free World Trust, the appellants
informed the judge that the patentee bears the onus of proving the
non-essentiality of particular words or phrases in a claim.
[27] A
review of the expert evidence reveals that none of the experts suggested that
any of the words or phrases contained within the claims are not essential. The
respondents concur with the appellants’ articulation of the proposition that,
unless a party maintains that a claim element is not essential, it will be
considered to be essential. I agree with the parties in this respect, see: Catnic
Components Ltd. v. Hill and Smith Ltd. (1980), [1982] R.P.C. 183, p. 237
(H.L.); Eli Lilly & Co. v. O’Hara Manufacturing Ltd. (1989), 99 N.R.
60, 26 C.P.R. (3d) 1, paras. 19, 20 (F.C.A.); Free World Trust, paras.
31, 57; McKay v. Weatherford Canada Ltd., 2008 FCA 369, 74 C.P.R.
(4th) 1, para. 18. Consequently, in this case, all elements were regarded and
treated as essential.
[28] Although
the appellants maintain that the judge failed to construe the terms “leak
passage” and “plurality”, the appellants pleaded only ambiguity in relation to
those terms and did not advance their argument at trial. To the contrary, they
advised the judge in closing submissions that the ambiguity argument was not
being pursued: appeal book, vol. 20, tab 297, p. 6253. Moreover, and in any
event, the judge specifically found that the appellants had not provided any
cogent evidence suggesting that the terms were obscure or ambiguous: reasons,
para. 353. I see no error on the judge’s part.
[29] The
appellants also argue that the judge was required to construe the “geometry of
the seal cartridges and leak passages.” This issue arose in relation to the
debate regarding the meaning of “seal cartridge.” The judge succinctly
described the dispute as “whether the term seal cartridge describes a function
or describes an article.” He reviewed the evidence and concluded that the term
means a sub-assembly of elements that perform a sealing function: reasons,
paras. 128-137. The judge did not fail to construe the geometry of the seal
cartridge and no error has been demonstrated with respect to his construction
of this term.
[30] Next, the
appellants say that the judge construed only claims 1, 6, 9, 11 and 14. They
assert that because they attacked the validity of the '937 patent, all claims
had to be construed. The grounds of invalidity advanced by the appellants
related to anticipation (allegedly as a result of the sales of prototypes to
Amoco and Pan Canadian), material misrepresentation under subsection 53(1) of
the Act, abandonment under paragraph 73(1)(a) of the Act and obviousness.
Of these, only obviousness relates to claim construction.
[31] Concerning
obviousness, the appellants attack claim 1 on the basis of three pieces of
prior art and the prototype. At paragraph 127 of his reasons, the judge
construed claim 1 as follows:
Claim
1 describes and means an annular space formed between a
housing
(the stationary first member) and a sleeve (the rotary second
member)
where seal cartridges are stacked within that annular space
and
where there are leak passages in the housing for detecting seal
failures
and where a plug closes at least one passage.
Claims 2 through 16 directly or indirectly
depend on claim 1. Claim 17 is a stand-alone claim to which I will return. The
construction of claims 18 and 19 is not in issue on this appeal.
[32] As noted
earlier, the judge reviewed the evidence with respect to “seal cartridge” (in
claim 1) and construed the term. He did likewise for the term “dynamic seal”
listed as element (a) of the cartridge in claim 1: reasons, paras. 138-147. The
meaning of the term “closed” in claim 5 was in issue and the judge construed
that term: reasons, paras. 149-154. In claim 9, the phrase “packing elements
compressed within said annular cavity” was in issue and the judge construed
that term: reasons, paras. 156-164.
[33] The
appellants acknowledge that the inventiveness of claims 2 through 13 and 17 to
19 depends on the inventiveness of claim 1: appellants’ memorandum of fact and
law, para. 73. They maintain, however, that no feature of claims 14 through 16
is inventive. Consequently, they say the claims would have been obvious to a
person skilled in the art. The judge found that claims 14 and 15 depend on
claim 1: reasons, para. 192. That conclusion, in my view, is correct. The judge
was aware that he was dealing with a combination patent. The stationary
framework (claim 14) and the drive means (claim 15) are included because of use
in conjunction with the elements of the invention described in claim 1.
Additionally, the judge stated that claim 16 relied on claim 9 (which he
construed): reasons, para. 198. Again, I think the judge was correct for
essentially the same reason. I would add that claim 16 depends on claim 9
which, in turn, depends on claim 1. In these circumstances, and given the
manner in which the parties approached the construction issue, the judge was
not required to further construe what was not in issue.
[34] The
appellants’ argument with respect to claim 17 is not one of construction. They
state that claim 17 is “a method claim for using the sealing system of claim 1”:
appellants’ memorandum of fact and law, paras. 7, 73. This indicates that the
construction of claim 17 relates largely to the construction of claim 1.
However, the appellants’ real quarrel in relation to claim 17 is that the judge
was wrong to conclude that infringement of the claim existed without the
production of evidence that the appellants’ customers actually used their
stuffing boxes in a manner that infringed the method described by the claim:
appellants’ memorandum of fact and law, paras. 153-155, 157. That argument
will be addressed later in these reasons.
[35] In sum,
the judge addressed all claims construction issues raised by the parties. There
was no issue regarding the essentiality of claim elements. The meaning of
“plurality” and “leak passage” was not in issue; the judge addressed the
geometry of the seal cartridges and leak passages in his analysis dealing with
the construction of the term “seal cartridge.” The appellants have not
demonstrated any error of law or principle, or any palpable or overriding error
of fact or mixed fact and law on the judge’s part. The fact that the judge
preferred the expert evidence of the respondents’ witnesses (Dr. Salant in
particular) and adopted their views does not constitute, in and of itself, an
error of law. Here, the judge examined the evidence (on the contentious words
or phrases) of all experts before indicating his preferences. He did not
delegate the task of construction to the respondents’ experts.
Anticipation (Prior
Disclosure)
[36] Anticipation
is a question of mixed fact and law: Consolboard Inc. v. MacMillan Bloedel
(Sask.) Ltd., [1981] 1 S.C.R. 504, p. 533; Baker Petrolite
Corp. v. Canwell Enviro-Industries Ltd., 2002 FCA 158, [2003] 1 F.C.
49, para. 46 (Baker Petrolite). The appellants contend that the trial
judge erred in finding that the RSB (rotating stuffing box) was not disclosed
to the public more than one year before the filing date of the '937 Patent.
Relying on this Court’s decision in Baker Petrolite, they submit that
the sale of prototypes to Amoco and Pan Canadian resulted in the disclosure of
the subject matter of the patent.
[37] The
same argument was made to the trial judge. He found that, although it may have
been unwise for Grenke not to have established a confidentiality regime with
either company, there was an expectation of confidentiality in view of the
relationship he (Grenke) had with each company. Because such confidentiality
implicitly existed, GrenCo’s sales of prototypes to Amoco and Pan Canadian did
not constitute disclosure “to the public” and therefore did not anticipate the
patent: reasons, paras. 297-298. The judge relied on International Corona
Resources Ltd. v. LAC Minerals Ltd., [1989] 2 S.C.R. 574 (LAC Minerals),
to support his finding of implied confidentiality in the circumstances:
reasons, paras. 298-318.
[38] In
particular, the judge concluded that the parties shared a “common cause”
(solving the stuffing box problem) and had a relationship of trust and
co-operation that led to an expectation of confidence: reasons, paras. 294,
298. The disclosure to Amoco and Pan Canadian was “for a limited purpose and
certainly not disclosure to the public”: reasons, para. 297. There was no
evidence with respect to what third parties may have been told and observation
of the units would not have disclosed anything about its inner workings:
reasons, para. 307. Although the people working in the field generally did not
think there was a confidentiality obligation, those further up the corporate
ladder thought there was confidentiality: reasons, paras. 293, 301. Both Amoco
and Pan Canadian knew that Grenke lacked the ability to test his device and
provided testing facilities to him: reasons, para. 294. Grenke’s disclosure was
part of the process he had to undertake so that he could conduct field tests,
establish utility, make the necessary improvements to the design and finalize
the invention: reasons, para. 301. Both companies behaved as if the units were
confidential by not disclosing them to others: reasons, para. 297.
[39] Amoco’s
relationship with Grenke was closer than the one with Pan Canadian. Amoco,
represented by Britton, was involved in the early development discussions with
Merkel. Nonetheless, Pan Canadian had the same stuffing box problem as Amoco
and knew or ought to have known that the sale of the device to it was for a
limited purpose related to development and was not intended as a public
disclosure: reasons, paras. 295, 305. Applying LAC Minerals, the judge
found that since the sales of the prototypes took place in circumstances giving
rise to a duty of confidentiality, the sales could not constitute prior
disclosure under the Act: reasons, para. 298.
[40] The
appellants argue that LAC Minerals is inapplicable because it does not
involve the sale of confidential information or the concept of public
disclosure in the Act. They emphasize the absence of an oral or written
agreement between GrenCo and Amoco or Pan Canadian.
[41] According to
the appellants, “title to these products was transferred to these companies
without restriction and they were disclosed to the public.” Further, they state
the respondents neither led evidence regarding industry practice of
confidentiality nor demonstrated that industry practice could serve as the
basis for an implied term of contract. Consequently, in the appellants’ view,
this was not an appropriate case to impose such an implied term. Even if it
were otherwise, the respondents had to demonstrate there was an “implied term
of contract arising from a notorious custom that is so well known in the market
in which it is alleged to exist that those who conduct business in the market
contract with the usage as an implied term”: appellants’ memorandum of fact and
law, para. 78. Grenke’s assumption that the prototypes would be kept
confidential “is not sufficient to impose an obligation of confidence”:
appellants’ memorandum of fact and law, para. 86. Since the respondents failed
in this respect, imposing an obligation of confidence in such circumstances
constitutes an “error of law” in that the judge failed to appreciate the legal
test for imposing an implied contractual term.
[42] If the
appellants are correct in their position that the prototypes were sold to Amoco
and Pan Canadian without restriction (unconditionally), the patent may be
invalid for anticipation. Section 2 of the Act stipulates that an invention
must be novel. When approaching an inquiry as to novelty, the invention must
not have been anticipated. To succeed in invalidating a patent on grounds of
anticipation, an alleged infringer must satisfy the requirements of prior
disclosure and enablement, considered separately: Apotex Inc. v. Sanofi-Synthelabo
Canada Inc., 2008 SCC 61, [2008] 3 S.C.R. 265 (Sanofi). If there is
no disclosure, there can be no enablement. The evidence to be considered is
comprised solely of the prior art (here the prototype) as the skilled person
would understand it.
[43] Section 28.2
of the Act is the governing section with respect to disclosure. Among other things,
it requires that the invention not be disclosed “in such a manner that it
became available to the public in Canada or elsewhere” more than
one year before the patent was filed. Although at trial there was some question
as to whether the sale to Pan Canadian occurred prior to the one-year grace
period, on this appeal the respondents did not seriously contest that the sales
to both Amoco and Pan Canadian occurred more than one year before the filing
date.
[44] In Baker
Petrolite, this Court, at paragraph 97, stated as follows:
[I]t is the unconditional sale of
the [invention] to the purchaser that
makes the product available to the
public. If the purchaser is free to
perform reverse engineering, that is
sufficient. How a purchaser chooses
to treat the analysis, i.e. to keep it
confidential or not, is not a relevant
consideration. (my emphasis)
[45] There are two
aspects to the Baker Petrolite reasoning. Since the Act contains a
presumption of validity, it was for the appellants to establish: (1) the sales;
and (2) that the sales were unconditional. As noted, the existence of the sales
is common ground. The debate centres on whether the sales were unconditional.
[46] The
appellants accept (correctly in my view) that they bore the burden of establishing
prior disclosure. In this case that burden translates into establishing the
unconditional nature of the sales. The appellants, however, argue that once
they led evidence of unfettered sales to independent parties (that is, no oral
or written agreement), the tactical burden then shifted to the respondents to
demonstrate that the sales were restricted. The appellants maintain that the
respondents failed in this respect. However, the judge concluded otherwise. In
circumstances where a judge engages in a weighing of the evidence and arrives
at a factual determination on the basis of the totality of that evidence,
appellate interference is impermissible absent palpable and overriding error,
irrespective of tactical onus.
[47] With respect
to the “unconditional sales”, as stated earlier, the judge turned to LAC
Minerals for guidance as to whether confidentiality existed. If it did, he
reasoned that the prototypes would not have been disclosed to the public. Put
another way, if confidentiality existed, the sales would not be regarded as
“unconditional.” It seems to me that this is ultimately a factual determination
or, at its highest, a question of mixed fact and law.
[48] LAC Minerals involved
divided opinions in the Supreme Court. Despite disagreement among the
five-member panel of the Court regarding the existence of a fiduciary duty, the
Court unanimously approved and implicitly adopted the English ‘reasonable man
test’ described in Coco v. A.N. (Engineers) Ltd., [1969]
R.P.C. 41 (Ch.) (Coco), for ascertaining whether an obligation of
confidence exists in a given situation: LAC Minerals, paras. 10-11,
161-162. Information will be considered to have been exchanged in a
confidential relationship where “any reasonable man standing in the shoes of
the recipient of the information would have realised that upon reasonable
grounds the information was being given to him in confidence”: Coco, pp. 47, 48.
The following passage from Coco (p. 51) was also referred to by Sopinka
J. in LAC Minerals and cited by the judge in this case:
In particular, where
information of commercial or industrial value
is given on a business-like
basis and with some avowed common
object in mind, such as a
joint venture or the manufacture of
articles by one party for the
other, I would regard the recipient as
carrying a heavy burden if he
seeks to repel a contention that he
was bound by an obligation of
confidence.
[49] I agree with
the appellants that the facts in LAC Minerals are not similar to those
in this case. There, the issues related to a breach of confidence and potential
breach of fiduciary duty. However, I do not read the judge’s reasons as
suggesting that he considered this case to be analogous to LAC Minerals.
Rather, he turned to that authority to extract general principles in relation
to confidential communications, including the factors to be considered in
ascertaining whether confidentiality exists. No subsequent authority derogates
in substance from the principles articulated in LAC Minerals regarding
confidentiality. Given its generality in this respect, I see no principled
reason (and the appellants have not advanced any) why the judge should not have
relied upon it for the purpose that he did.
[50] The
appellants themselves rely on LAC Minerals to support their assertion
that any obligation of confidentiality based on industry practice must be
clearly “notorious.” In my view, such an assertion is overstated and incorrect.
The comments of La Forest J. were responsive to the arguments of the parties
and he was addressing the distinction between “custom” (which he interpreted
broadly and effectively equated to “practice” in Canada) and
“usage.” The word “notoriety” appeared in a definition of “usage” from Halsbury’s
Laws of England, vol. 12, 4th ed., para. 445. La Forest J. expressed
reservation regarding portions of the definition and specifically refrained
from deciding whether the “practice” established by the evidence of LAC’s
executives and experts amounted to a legal “usage.” Nonetheless, he found the
evidence of industry practice was sufficient to ground an expectation of
confidentiality in that case. If applied to the concept of confidentiality
generally, the extract, at its highest, suggests that the level of notoriety of
an industry practice may be relevant with respect to whether the reasonable
person considers himself to have an obligation of confidentiality. There is no
enunciation of a separate “notoriety” test. The test for confidentiality is the
Coco test adopted
by the Court and cited previously in these reasons.
[51] The judge did
not specifically state the ‘reasonable man test’ in determining whether the
prototypes were sold in circumstances giving rise to an obligation of
confidentiality. He did refer to the above-quoted passage from Coco at
paragraph 315 of his reasons. Although he was there dealing with the issue of
disclosure to Merkel and Flender (not in issue on this appeal), it is clear
that the judge was aware of the Coco test. Further, in view
of his specific reliance on LAC Minerals in this respect and his
references to “reasonable” at paragraphs 297 through 299 of his reasons, I am
satisfied that the judge approached the issue of confidentiality from the
perspective of the reasonable man in accordance with the Coco test.
[52] The
receipt of information in circumstances of confidentiality establishes a duty
not to use that information for any purpose other than that for which it was
conveyed: LAC Minerals, para. 16. In my view, information received in
circumstances of confidentiality cannot be considered to have been publicly
disclosed for purposes of the Act. Consequently, as noted earlier, if the judge’s
conclusion – that the sales of the prototypes to Amoco and Pan Canadian were
made in circumstances in which they had an obligation to keep the invention
confidential – was not palpably wrong, the appellants’ anticipation argument
must fail.
[53] There is no
doubt that the judge considered the absence of an oral or written communication
concerning confidentiality to be significant, but not dispositive. Equally, in
my view, there is no doubt that the prototype had a quality of confidence about
it. It was the result of the work and development of Grenke in early 1991; it
was not available to the public; no such device was on the market. The crux of
the matter is whether GrenCo sold the prototypes to Amoco in circumstances in
which an obligation of confidence arose. The judge’s various findings on this
issue are summarized above. For present purposes, it suffices to reiterate his
finding that both Amoco and Pan Canadian shared a “common cause” with Grenke
and had a relationship of trust and co-operation that led to an expectation of
confidence: reasons, paras. 294, 298. The appellants do not seriously dispute
the existence of a common cause – everyone in the industry was concerned about
the stuffing box problem. Rather, it is the finding of a relationship of trust
and confidence that the appellants contend was palpably wrong because it was
not supported by the evidence.
[54] Regarding
Amoco, there was certainly evidence to negate an expectation of confidentiality
surrounding the units. This evidence includes the testimony contained at appeal
book, volume 17 of Amoco EI maintenance team member George (tab 283, transcript
pp. 19, 20); Amoco EI maintenance team member Krucik (tab 287, transcript pp.
61-63); Amoco Elk Point worker Fair (tab 283, transcript p. 100); Amoco Elk
Point production engineer Urich (tab 287, transcript pp. 59-61, 68); and Amoco
Elk Point district foreman Johnson (tab 287, transcript p. 52). Generally, this
evidence suggests that Amoco could do what it wanted with the prototype and
there was no confidentiality attached to it.
[55] There was
also evidence pointing to the opposite conclusion. Amoco was heavily involved
in the development of the patent. An internal Amoco memo discussed the testing
of the prototypes and solutions for fixing the problems: appeal book, vol. 5,
tab 113, pp. 1581-1585. A letter from Britton thanked Amoco staff for their
involvement with the development: appeal book, vol. 9, tab 252, p. 3018. Amoco
paid for Britton’s trip to Germany to discuss the device
with Merkel: appeal book, vol. 16, tab 279, transcript p. 32. Urich said Amoco
was involved in the development of the device: appeal book, vol. 17, tab 287, transcript
pp. 57, 71, 83.
[56] Further, Wes
Grenke’s testimony indicates that he understood the prototypes were test units
and were confidential: appeal book, vol. 16, tab 277, transcript p. 116. Grenke’s
testimony was the same: appeal book, vol. 16, tab 280, transcript pp. 48, 63,
64. Amoco production foreman Dudley testified that a confidentiality obligation
existed with respect to test units: appeal book, vol. 17, tab 281, transcript
pp. 102-105.
[57] Johnson
testified in chief that there were no express confidentiality conditions
concerning Amoco’s purchase, that the prototype was not a test unit and that
Amoco could do what it wanted with the unit. He also testified that he wouldn’t
provide it “from an ethical and moral sense…to another drive head competitor”
and “wouldn’t have taken it apart and given it to [GrenCo’s competitors].” He
acknowledged that the industry was trying to work together to solve a problem:
appeal book, vol. 17, tab 287, transcript pp. 17-20. On cross-examination, he
testified that the use of the prototype was a “private test within Amoco”,
Amoco had funded the project, was doing the work, would do it for itself and had
not turned it into a “joint industry project where everybody helped fund it and
we had big meetings about it”: appeal book, vol. 17, tab 287, transcript pp.
37-40, 49-56.
[58] The
appellants point to the evidence of Matthews, the respondents’ expert on
industry practice, to support the assertion that if a test unit was sold, the
selling party must set up a confidentiality regime by at least having
verbal discussions with respect to confidentiality. The assertion is
overstated. Matthews states that he would “assume that there should be at least
a verbal understanding, verbal agreement.” He also stated that “it was not
uncommon at the time, and still today, for companies conducting trials, the oil
companies in particular, to pay for the prototype development and to support
the vendors.” Further, it “is known that the vendor owns the rights to it. The
operator, of course, is the one using it. So they do what they want with it in
the field, but there is an understanding that goes beyond the simple payment or
purchase of the device”: appeal book, vol. 15, tab 271, transcript pp. 195,
196.
[59] The judge’s
task was to balance the evidence and come to a determination. It was he who
observed the witnesses and heard their testimony. There is evidence in the
record to support the judge’s finding that Amoco and Grenke shared a common
cause and had a relationship of trust and co-operation. Since “parties acting
in a common cause and those using the prototypes…expected and received
confidential treatment” (reasons, para. 300), the judge’s conclusion that the
disclosure to Amoco was for a limited purpose and certainly not a disclosure to
the public cannot be said to be palpably wrong.
[60] The evidence
in relation to Pan Canadian is thin. There was no confidentiality agreement and
Pan Canadian was not involved in the development of the device. The judge found
that Britton disclosed the inner workings of the prototype to the Pan Canadian
representatives during their negotiations: reasons, para. 304. Former
Pan-Canadian maintenance foreman and mechanic Derewynka testified that he
thought Pan Canadian could have dismantled the unit for servicing or
replacement of the seals and could have allowed other oil producers to come
onto its site and observe the prototype. Notably, he did not say that Pan
Canadian would have allowed others to view the inner workings of the prototype:
appeal book, vol. 17, tab 286, transcript pp. 33-34, 42, 46-47. I agree
with the appellants that there was no evidence to directly support a
relationship of trust and co-operation between Grenke or GrenCo and Pan
Canadian.
[61] Notwithstanding,
the trial judge was satisfied that the units sold to or discussed with Pan
Canadian were test units and that industry practice required that test units be
kept confidential. There is evidence in the record to support that conclusion.
Pan Canadian’s letter dated February 8, 1994 acknowledged (albeit after the
fact) that GrenCo’s device had “new features and design concepts”: appeal book,
vol. 5, tab 88, p. 1399. Both Wes and Ed Grenke emphasized the prototypes were
test units: appeal book, vol. 16, tab 278, transcript p. 25; tab 279,
transcript pp. 65-66; appeal book, vol. 17, tab 281, transcript pp. 17-18.
Britton testified that the units were test units (appeal book, vol. 17, tab
184, transcript p. 190) and that testing extended into mid-1992 (reasons, para.
296). The units were a limited production: reasons, para. 296. Dudley agreed
test units were meant to be confidential: appeal book, vol. 17, tab 281,
transcript pp. 103-104.
[62] There was
also Matthews’ evidence that simply looking at a prototype externally would not
enable an observer to know its inner workings: appeal book, vol. 5, pp.
1605-1607; that having these pumps out in the field or installed by particular
rig crews would not constitute disclosure of confidential information; that it
was dangerous for observers to simply go onto drilling lands to see the
equipment; and that test units could be out in the field for any period of time
without losing their confidentiality: appeal book, vol. 15, tab 271, transcript
pp. 137-138, 141, 143-144, 172-173, 199-201.
[63] On balance,
although another judge could have concluded otherwise, given the judge’s
extensive exposure to the evidence and the fact that he had the benefit of
seeing and hearing the witnesses, it was open to him to conclude that the
prototypes sold to or discussed with Pan Canadian were test units and that
there was a general industry practice that such units were considered confidential.
There was evidence in the record to support the determinations he made. On the
basis of those findings, it was also open to him to find that the sales to or
discussions with Pan Canadian in April 1992 did not constitute prior disclosure
within the meaning of section 28.2 of the Act.
[64] It follows
from the judge’s findings and my conclusions in relation to them that Baker
Petrolite does not assist the appellants in this case.
[65] Finally, and
not insignificantly, there is the judge’s finding that the prototypes supplied
to Amoco and Pan Canadian were not the same as the RSB described in the '937
Patent. There were changes made before the design was finalized. Mindful of
Grenke’s evidence that he believed the prototype had essentially solved the
problem and that the improvements were insignificant (evidence heavily relied
upon by the appellants), the judge concluded otherwise. The evidence of
Skoczylas as to the nature of the improvements (appeal book, vol. 6, tab 129,
pp. 1969, 1987-1990) and Salant that the improvements were inventive (appeal
book, vol. 5, tab 123, pp. 1661, 1662; vol. 14 tab 272, transcript pp.17-44, 57-59)
supports the judge’s conclusion. Indeed, the judge commented, “there is a
difference between believing that one has the solution to the problem and
finalizing the design and function so that the invention operates as intended.”
He then found as a fact that “[t]he balance of work to the final design was
improvements but they were significant”: reasons, para. 309. This finding
(which in my view is an implicit finding of inventiveness) was open to the
judge on the evidence before him. In and of itself, it too is sufficient to
dispose of the appellants’ anticipation argument.
Obviousness
[66] The
appellants contend that the judge “did not conduct an obviousness analysis
and/or provided insufficient reasons for his conclusion on obviousness”:
appellants’ memorandum of fact and law, para. 41. More specifically, they
assert that he erred in law by failing to conduct a “Pozzoli analysis.”
Further, he erred in accepting the respondents’ expert evidence without
resolving evidentiary conflicts and thereby failed to come to an independent
determination on obviousness.
[67] The
appellants’ assertion with respect to the “Pozzoli analysis” is
overstated. In Sanofi, the Supreme Court stated, “[i]t will be useful
in an obviousness inquiry to follow the four-step approach first
outlined by Oliver L.J. in Windsurfing International Inc. v. Tabur
Marine (Great Britain) Ltd… [and] recently updated by Jacob
L.J. in Pozzoli SpA v. BDMO SA”: Sanofi, para. 67 (citations
omitted, my emphasis). The Court did not establish a compulsory legal test. To
the contrary, its approval of existing jurisprudence warned against adopting an
“overly rigid rule that limits the obviousness inquiry.” Rothstein J. explained
that “in most matters in which a judge or a jury is called upon to make a factual
determination, rigid rules are inappropriate unless mandated by statute”: Sanofi,
para. 63. Indeed, the “correctness of a decision upon an issue of obviousness
does not depend upon whether or not the decider has paraphrased the words of
the Act” or made use of “some particular verbal formula”: Sanofi, para.
61. Rather, an “expansive and flexible approach that would include ‘any
secondary considerations that [will] prove instructive’ will be useful”: Sanofi,
para. 63.
[68] Although
Sanofi identifies and recommends the Pozzoli framework as a
helpful tool, failure to explicitly follow the structure does not, in and of
itself, constitute an error of law. In oral argument the appellants indicated
that the Pozzoli steps need not be expressly addressed if they are
considered “in substance.” Here, the judge should be presumed to have
understood the purpose of the Pozzoli approach since he specifically
referred to Sanofi as having modified the “test” from Beloit Canada
Ltée/Ltd. v. Valmet Oy (1986), 64 N.R. 287, 8 C.P.R. (3d) 389 (F.C.A.) (Beloit):
reasons, para. 320.
[69] The
appellants agree that the judge adequately addressed the first step: the
identification of the notional person skilled in the art. Although they
maintain that the judge did not specifically identify the inventive concept of
the patent (as contemplated at Pozzoli step two), they acknowledge that he
did refer to the patent’s three “key concepts” in his reasons. In any event,
the second step indicates that it will be sufficient to construe the patent if
the inventive concept is not readily discernible from its claims. As indicated
earlier in these reasons, the judge properly construed the patent’s claims.
Moreover, the '937 Patent is a combination patent. Therefore, its essence lies
in the unique combination claimed even though individual elements of the
invention, considered in isolation, may not have been inventive. As recently
explained by this Court, “[i]t is not fair to a person claiming to have
invented a combination invention to break the combination down into its parts
and find that, because each part is well known, the combination is necessarily
obvious”: Bridgeview Manufacturing Inc. v. 931409 Alberta Ltd.,
2010 FCA 188, 87 C.P.R. (4th) 195, para. 51 (Bridgeview), leave to
appeal dismissed, [2010] S.C.C.A. No. 346; Free World Trust, para. 27.
The judge referred to that principle: reasons, paras. 240, 241. On the whole,
in my view, the judge’s analysis demonstrates that he implicitly considered the
substance of the first two Pozzoli steps.
[70] The thrust of
the appellants’ argument is directed to the judge’s purported failure to
consider the third and fourth Pozzoli steps. The appellants further
maintain there was insufficient discussion in the judge’s reasons to allow this
Court to ascertain how or why he reached his conclusions. This omission is said
to effectively preclude meaningful appellate review.
[71] As was the
case with claims construction, an appreciation of the judge’s analysis requires
an examination of the manner in which the appellants approached the issue of
obviousness at trial. Although the appellants explicitly acknowledged that the
“issues of obviousness and anticipation are quite different”, their arguments
concerning both were combined under the single subject “invalidity”: appeal
book, vol. 20, tab 297, pp. 6308-6355. It is hardly surprising that the judge
chose to examine obviousness as a reflection of the appellants’ submissions on
anticipation, particularly when the appellants relied on the “same disclosure”
and the “same prior art” for both: reasons, paras. 321, 322. The appellants’
submissions concerning the prior art were similarly interdependent. They
claimed that the invention was rendered obvious by virtue of the public
disclosure of GrenCo’s prototype, by the API reference, and by the combination
of the two: appeal book, vol. 20, tab 297, pp. 6342-6343, 6347-6348, 6354-6355.
The appellants also claimed that United States Patent No. 3,913,752 (the '752
Patent) only rendered the invention obvious in “combination with the API seal
structures and/or the [prototype]”: appeal book, vol. 20, tab 297, pp. 6350,
6355. Similarly, on this appeal, the appellants maintained that United States
Patent No. 4,372,379 (the '379 Patent) rendered only claims 14 to 16 of the '937
Patent obvious. Consequently, the judge was not required to expressly consider
the effect of these pieces of prior art separately from the prototype or the
API seal structures.
[72] The third Pozzoli
step focuses on an identification of the differences between the prior art and
the inventive concepts of the claim, or the claim as construed. Given the
structure of the appellants’ arguments, if the judge had specifically tracked
the Pozzoli framework, he would have directly considered the prototype
and the API reference. The judge’s reasons show he clearly considered the
prototype. However, in view of my earlier conclusion that the judge did not err
in finding that the sales of GrenCo’s prototype to Amoco and Pan Canadian did
not constitute public disclosure of the invention, the prototype is not prior
art and is immaterial to the issue of obviousness. The API reference warrants
further discussion.
[73] The judge did
not expressly refer to the API reference in his obviousness analysis. However,
he did explain that the appellants relied on the same prior art for purposes of
obviousness as they had for anticipation, namely, “U.S. patents,
industry handbooks and other publications”: reasons, paras. 317,
318, 322 (my emphasis). The API reference is properly described as an industry
handbook included in the prior art addressed at trial. The '752 Patent is a U.S. patent.
[74] The
appellants argue that the API reference is “a sealing system where dynamic
seals are used to seal outside a sleeve that rotates with a pump shaft.” They
note that it teaches the use of “two mechanical dynamic seals…and an
auxiliary bushing…which may also be a dynamic seal such as a lip seal” (my
emphasis). They further assert that connections placed between the seals may be
used to detect leaks: appellants’ memorandum of fact and law, paras. 59, 60.
The respondents emphasize that the '937 Patent claims non-mechanical dynamic
seals: respondents’ memorandum of fact and law, para. 33.
[75] In view of
the record, the judge’s acceptance of the respondents’ expert evidence and his
construction of the '937 Patent, the respondents’ position is correct: reasons,
paras. 127, 128, 133, 137, 138, 140, 142, 147. See also: Salant affidavit,
appeal book, vol. 5, tab 123, pp. 1646, 1647, para. 32; Salant examination in
chief, appeal book, vol. 15, tab 272, transcript pp. 32,33; Skoczylas rebuttal
report, appeal book, vol. 6, tab 129, p. 1998, para. 123; Nelson
cross-examination, appeal book, vol. 18, tab 288, transcript pp. 52-53.
Further, the respondents’ evidence stipulates that the sealing system taught by
the API reference will only operate to create redundant sequential seals if the
initial detection port is closed after the initial seal fails: Skoczylas
cross-examination, appeal book, vol. 16, tab 276, transcript pp. 53-60. The
redundant sealing system taught by the '937 Patent requires no such external
intervention.
[76] With respect
to the '752 Patent, the appellants’ evidence establishes that this piece of
prior art teaches the use of a dynamic sealing system on a sliding plunger pump
rather than on a rotary PC pump: Nelson affidavit, appeal book, vol. 11, tab
261, pp. 3416-3418, paras. 128-130. Nelson also testified that the '752 Patent
teaches the use of two seals, one leak detection passageway, and a further leak
passageway that indicates the complete failure of the sealing system: Nelson
cross-examination, appeal book, vol. 18, tab 288, transcript pp. 153-159. The
'937 Patent teaches the use of a plurality of annular dynamic seals with a leak
passageway for each seal.
[77] The
appellants submit that the '379 Patent teaches a type of rotary wellhead drive
that discloses almost all features of claims 14 to 16 of the '937 Patent. Those
claims teach the incorporation of a stationary framework, drive, and connection
means with the patent’s redundant dynamic seal system. They are unlikely to be
relevant to the obviousness analysis if the combination of the remaining
elements of the invention are not rendered obvious by the referenced prior art.
There is no suggestion that the '379 Patent would lead one to combine the drive
head and the sealing system as in the '937 Patent.
[78] Taking the
above-noted pieces of prior art together, the Pozzoli framework then
asks whether the differences identified at step three constitute steps that
would have been obvious to the person skilled in the art, without knowledge of
the invention as claimed. If the differences require some degree of
inventiveness, the prior art in question does not render the invention obvious.
The judge’s cryptic dismissal of the appellants’ obviousness argument was based
on the expert evidence he considered and accepted earlier in his reasons. The
brevity of his comments, in my view, suggests that he considered the
appellants’ submissions regarding obviousness to have little merit.
[79] The judge
generally preferred the respondents’ evidence to that of the appellants.
Significantly, the judge summarized Salant’s evidence and explained why he
preferred it to that of the appellants’ experts: reasons, paras. 37-40, 53. The
appellants have not demonstrated palpable and overriding error in the judge’s
assessment of the witnesses.
[80] The
respondents’ experts reviewed the relevant prior art and concluded, while it
contained elements similar to those taught by the '937 Patent, none of the
prior art included the combination and application of the elements contained in
the invention. They were of the view that combining the prior art in the manner
taught by the '937 Patent required a significant degree of inventiveness:
Salant report, appeal book, vol. 5, tab 123, pp. 1661-1662, paras. 85-90, 92;
Salant cross-examination, appeal book, vol. 15, tab 273, transcript pp. 36-38;
Skoczylas report, appeal book, vol. 6, tab 128, pp. 1770-1780, paras. 85-106; Skoczylas
rebuttal report, appeal book, vol. 6, tab 129, pp. 1990-2003, paras. 92-141.
The judge committed no reviewable error in preferring Salant’s evidence over
that of Nelson. In fact, Nelson considered Salant to be a recognized authority
on rotary seals: Nelson cross-examination, appeal book, vol. 18, tab 288,
transcript pp. 91-92.
[81] The judge
also noted that Nelson was unable to explain why, if the solution of the '937
Patent was so obvious, no one had discovered it previously: reasons, para. 50.
The judge found that the stuffing box problem had been experienced by heavy oil
producers since at least the early 1980s, there was increasing concern in
relation to the problem by at least the late 1980s and it plagued the heavy oil
industry prior to the introduction of Grenke’s invention: reasons, paras. 68,
264. Moreover, contrary to the appellants’ assertion that Grenke solved the
problem on his first attempt, the judge found that it took Grenke more than two
years to advance from his initial idea (through the production of the prototype
and the testing phase) to the patenting of the invention: reasons, paras. 71- 91.
As stated earlier, in my view, the judge implicitly found that the post-prototype
improvements to the final design were inventive. No reviewable error has been
demonstrated with respect to any of these findings. The judge had the benefit
of seeing and hearing the witnesses and he considered the respondents’
witnesses to be clear, credible and to have held up significantly better under
cross-examination than the appellants’ witnesses. The above-noted references
provide sufficient support for the judge’s conclusions on obviousness.
[82] With the
benefit of hindsight, it is not totally unreasonable to suggest that combining
the system of redundant mechanical seals and limited leak detection passageways
(taught by the API reference) with the multiple dynamic seal plunger pump
system (taught by the '752 Patent) renders the invention obvious. Arguably, the
invention of the '937 Patent seems a short step from those pieces of prior art
combined, particularly when both were used in the oil industry. However, key
differences exist between the prior art and the invention of the '937 Patent.
[83] The use of
mechanical seals in the API reference was problematic for the appellants. Their
expert Nelson testified that mechanical seals are used in a different field
than centrifugal and reciprocating pumps; mechanical seals “cannot operate with
a particulate such as sand”; and they would not be used in the heavy oil field:
Nelson cross-examination, appeal book, vol. 18, tab 288, transcript pp.
109-111. Britton stated that he would sooner return to using conventional
packing than use a mechanical seal in sandy, sloppy oil: Britton
cross-examination, appeal book, vol. 17, transcript pp. 148-149. The judge
considered the evidence and accepted “a mechanical seal could not properly seal
against a cylindrical surface”: reasons, para. 142.
[84] The '752
Patent claims application only in respect of a reciprocating pump, which is
fundamentally different from the rotary pump system used in the '937 Patent.
Additionally, the redundant seal system of the '752 Patent is activated only if
the initial leak port is closed, unlike the automatic redundancy created by the
seals in the '937 Patent.
[85] The oft-cited
passage at page 295 of Beloit is apt:
Every invention is obvious
after it has been made, and to no one
more so than an expert in the
field. Where the expert has been hired
for the purpose of
testifying, his infallible hindsight is even more
suspect. It is so easy, once
the teaching of a patent is known, to say
“I could have done that”;
before the assertion can be given any
weight, one must have a
satisfactory answer to the question,
“Why didn’t you?”
[86] In this
case, the respondents’ experts examined the prior art and concluded that
combining the previously known elements of the invention into the combination
claimed in the '937 Patent would not have been readily apparent to the notional
person skilled in the art. Considering the evidence in totality and the judge’s
assessment of the witnesses, I am unable to conclude that he erred in a manner
that warrants this Court’s intervention.
[87] The
judge’s reasons regarding the issue of obviousness are terse. The Supreme Court
has instructed that “courts of appeal considering the sufficiency of reasons
should read them as a whole, in the context of the evidence, the arguments and
the trial, with an appreciation of the purposes or functions for which they are
delivered”: R. v. R.E.M., 2008 SCC 51, [2008] 3 S.C.R. 3, para. 16 (REM).
Read in the context of the record and the submissions on the live issues in the
case, the reasons must show that the judge has seized the substance of the
matter: REM, para. 43. An appellate court should adopt a deferential
stance based on the propositions that the trial judge is in the best position
to determine matters of fact and is presumed to know the basic law: REM,
para. 54. The critical question is whether the trial judge’s reasons, considered
in the context of the evidentiary record, the live issues as they emerged at
trial and the submissions of counsel, deprive the appellant of the right to
meaningful appellate review: REM, para. 57. For the reasons provided in
relation to the issue of obviousness, it is readily apparent that, in this
case, the answer to the critical question is no.
Grenke’s Credibility
[88] The
appellants submit the judge made palpable and overriding errors or provided
insufficient reasons for finding that Grenke was a credible witness.
Specifically, there were instances where Grenke admitted having made
misstatements in his past correspondence and recanted evidence he had earlier
provided under oath. According to the appellants, the judge failed to address
the inconsistencies in Grenke’s testimony or explain how they were resolved in
Grenke’s favour. Consequently the appellants were prevented from understanding
why the judge accepted his evidence and were deprived of “an informed
consideration of the grounds of appeal”: appellants’ memorandum of fact and
law, para. 151. The Supreme Court has spoken on this issue at least three times
since 2006: R. v. Gagnon, 2006 SCC 17, [2006] 1 S.C.R. 621 (Gagnon);
R. v. Dinardo, 2008 SCC 24, [2008] 1 S.C.R. 788 (Dinardo); REM.
[89] In
Gagnon, at paragraph 20, the Court stated:
Assessing
credibility is not a science. It is very difficult for a trial
judge
to articulate with precision the complex intermingling of
impressions
that emerge after watching and listening to witnesses
and
attempting to reconcile the various versions of events. That is
why this Court decided, most
recently in H.L., that in the absence
of
palpable and overriding error by the trial judge, his or her perceptions
should
be respected.
[90] In Dinardo,
the Court cautioned, at paragraph 26:
Where a case turns largely on
determinations of credibility, the
sufficiency of the reasons
should be considered in light of the
deference afforded to trial
judges on credibility findings. Rarely
will the deficiencies in the
trial judge’s credibility analysis, as
expressed in the reasons for
judgment, merit intervention on appeal.
[91] In REM,
the Court reiterated the proposition expressed in Dinardo that “there is
no general requirement that reasons be so detailed that they allow an appeal
court to retry the entire case on appeal. There is no need to prove that the
trial judge was alive to and considered all of the evidence, or answered each
and every argument of counsel”: REM, para. 32.
[92] As noted early
in these reasons, the judge identified the “root” of the matter as an
“assessment of credibility in respect of inventorship and a consideration of
the behaviour of the key actors”: reasons, para. 8. In general terms, he
described Grenke’s testimony as “vague about some details”: reasons, para. 43.
The judge stated that he approached Grenke’s evidence “with some caution”, but
found the “core of his narrative was consistent with other evidence and was
more believable than that of other witnesses”: reasons, para. 44.
[93] For
example, the judge explained that Grenke’s evidence was supported by:
(1)
his
visits to Germany to meet
Merkel and Flender: reasons, para. 245;
(2)
the
fact he sought out others for advice: reasons, para. 245;
(3)
his
leadership role in the project: reasons, para. 246;
(4)
the
documents supporting the position that he came up with the idea and turned it
into a practical device: reasons, para. 246;
(5)
his
redesign of the units in late 1992 and 1993: reasons, para. 251.
[94] The judge did
not always accept Grenke’s evidence. One rejection of his evidence is discussed
later in these reasons. Further, there is a “recantation” addressed at
paragraphs 308 and 309 of the judge’s reasons.
[95] The
appellants have not established that the judge made palpable and overriding
errors in his credibility assessment or that the deficiency in his reasons (if
any) with respect to Grenke’s credibility fall within the category of those
rare cases that merit intervention on appeal.
Inventorship
[96] The
appellants submit that the judge incorrectly required a demonstration of
utility for purposes of inventorship. They argue that if the judge had not
required Engelen to be able to demonstrate utility, he would have found that
Engelen is an inventor of the '937 Patent because of his contribution to the
sealing arrangement and his suggestion of multiple leak detection passageways.
They further submit it was Torfs who conceived of and developed the integration
of the drive and sealing system set out in claims 14-16 of the patent.
[97] The
respondents take issue with the judge’s finding that Torfs is a co-inventor of
the '937 Patent. The crux of their argument is based on the judge’s statement
that “[w]ere it not for Grenke’s arrangement with Torfs that they would share
in the patents equally, the Court would be uncomfortable with concluding that
Torfs contributed any creative concept to the '937 Patent”: reasons, para. 281.
The respondents contend that the judge erred in law in relying on an agreement
between Grenke and Torfs to resolve the issue of inventorship in relation to
them.
[98] Both
the appellants’ and the respondents’ arguments in this respect can be addressed
summarily.
[99] The
judge did not misapprehend the law regarding inventorship. Although he misspoke
at paragraph 239 of his reasons with respect to utility, the misstep did not
factor into his analysis. The judge in all other respects correctly cited the
law regarding inventorship as articulated in Apotex v. Wellcome Foundation
Ltd., 2002 SCC 77, [2002] 4 S.C.R. 153, paras. 97, 98 (Wellcome):
reasons, paras. 236, 237. Briefly, the ultimate question – who is responsible
for the inventive concept – was specifically identified: reasons, para. 236. The
judge recognized that a person “who contributes to the inventive concept may be
a co-inventor while those who help the invention to completion, but whose
ingenuity is directed to verification rather than original inventive concept,
are not co-inventors”: reasons, para. 237. He noted the necessity of reducing
the idea to a definite and practical shape and considered it inappropriate to
break the combination into its various elements (and attribute contribution by
various persons to each of those elements) in resolving the issue of
inventorship: reasons, paras. 239, 241. The appellants have not persuaded me
that the judge failed to appreciate and apply the proper law with respect to
inventorship.
Engelen
[100] After
reviewing Grenke’s evidence and that of Reincke, Engelen, Britton and the
evidence with respect to Torfs (the appellants took the position that all
except Grenke are co-inventors), the judge concluded that Grenke is one of the
inventors of the '937 Patent. The others (except Torfs) are not. In arriving at
his conclusion, he made a number of factual determinations.
[101] Specifically,
the judge found Engelen was asked to suggest the appropriate type of dynamic
seal after Grenke contacted Merkel to discuss his idea. However, he (Engelen)
did not contribute to the core inventive concept of using dynamic seals around
the rotating sleeve. The seals he proposed came from Merkel’s standard
catalogue: reasons, para. 256. Although Engelen met with Grenke, it was Grenke
who made the changes to the proposal that eventually led to the design to be
tested: reasons, para. 257. While Engelen discussed with Grenke the possibility
of using multiple leak detection passageways, he confirmed that, at the time,
the prevailing view was that a single leak detection port was sufficient and
having more than one such port had several disadvantages: reasons, para. 258.
While Engelen made some suggestions, he did not contribute “inventive
concepts”: reasons, para. 260. Grenke’s role in coming up with the idea and
turning it into a practical device is supported by the documents: reasons,
para. 246 (including references to the specific documents).
[102] On
cross-examination, Engelen acknowledged that he did not contribute the idea of
using dynamic seals in the annular space to seal around the rotating sleeve,
but was asked by Grenke to specify a type of dynamic seal: appeal book, vol. 17,
tab 282, transcript pp. 112-114, 143. Engelen said that he was of the opinion
that one leak passage was sufficient because using multiple leak passages would
require the use of multiple seals which had the disadvantage of increasing
friction: appeal book, vol. 17, tab 282, transcript pp. 135-136. He may have suggested
the idea of multiple leak passages, but he did not advocate it. Further, he
stated that Grenke made all the design decisions as to how many seals would be
included: appeal book, vol. 17, tab 282, transcript pp. 109-112.
[103] This court’s
interference with the judge’s finding on the evidence that Engelen is not an
inventor of the '937 Patent is warranted only if palpable and overriding error
in the judge’s assessment of the facts is established. That is not the case.
Torfs
[104] As noted
above, the respondents’ submissions relating to Torfs focus on the role that
the arrangement between Torfs and Grenke played in the judge’s analysis. I
agree with the respondents that an “agreement” between the parties does not
resolve the issue of inventorship. An individual either contributes an
inventive idea or does not. If the judge concluded that Torfs was an inventor
by virtue of his agreement with Grenke, then the judge erred. The question is
whether that is what the judge did. My review of the judge’s reasons leads me
to conclude that the respondents’ criticism is misplaced.
[105] The judge’s
description of the evidence concerning Torfs as “enigmatic” and the fact that
the judge viewed a great deal of it as “speculation” suggests that his
conclusion that Torfs was a co-inventor fell near the figurative midpoint of
the balance of probabilities. However, the judge’s analysis of the agreement
between Torfs and Grenke does not indicate that he considered the agreement to
be determinative in law for the purpose of deciding inventorship. To the
contrary, it was the totality of the evidence, including the factual
significance of the agreement, that led the judge to his conclusion.
[106] Although
Grenke did not have in mind a connection between the sealing system and drive
means prior to his first attempt to meet with Torfs in Germany, the judge found
that Grenke initiated the work on the integration by making that attempt:
appeal book, vol. 16, tab 279, transcript pp. 35-37; reasons, paras. 79, 276.
Read in context, the judge’s finding implies that the inventive aspects of
claims 14-16 were not completed as a result of Grenke merely having commenced
his working relationship with Torfs. The judge accepted that the two worked
together in developing the manner of integration claimed in the '937 Patent:
reasons, para. 250. He also considered Torfs’ drive head expertise to be
“essential” to integrating the drive head with the sealing assembly: reasons,
para. 276.
[107] Further, the
fact that Grenke and Torfs agreed to share equally in patents that resulted
from their work, and that this agreement survived the course of their working
relationship, constitutes evidence of each individual’s recognition of the
other’s contribution. Indeed, under cross-examination, Grenke himself
recognized Torfs’ involvement in inventing the device: reasons, para. 98;
appeal book, vol. 16, tab 280, transcript pp. 135-136, 149-150, 155-156, 159;
see also: Grenke affidavit, appeal book, vol. 5, tab 91, p. 90, paras. 4, 5;
letter from Grenke to Flender, appeal book, vol. 9, tab 233, pp. 2765-2767. I
determined earlier that there was no palpable and overriding error in the
judge’s appreciation of Grenke’s evidence.
[108] Whether
Grenke believed that it was possible to agree to co-inventorship or merely to
co-ownership is immaterial to this ground of appeal. The evidence before the
judge provides a reasonable basis from which to infer that Torfs was a
co-inventor. Since the judge did not regard the arrangement between Torfs and
Grenke as governing the issue of inventorship, he did not err in the manner the
respondents suggest.
[109] The
respondents also claim that Torfs’ involvement was “merely the application of…
common general knowledge” in the art: respondents’ memorandum of fact and law,
para. 65. The judge found otherwise. As discussed earlier in these reasons, it
is the unique combination of the device’s essential elements that constitutes the
invention in a combination patent. The integration of claims 14-16 in the '937
Patent is essential to the invention in this case. Although the evidence on the
issue of inventorship may have been lacking in several respects, the judge
found that it was consistent with the conclusion that Torfs was a co-inventor
given his contribution to the integration of the drive head. This finding
reflects the judge’s view that Grenke and Torfs worked together to reduce the
invention to a definite and practical shape.
[110] The judge’s
findings were open to him on the evidence. The respondents have not
demonstrated any error in his conclusion that warrants intervention.
Misrepresentations to
the Patent Office
[111] The
appellants allege that the trial judge erred in failing to find that the
misrepresentations made by Grenke in his August 17, 1994 affidavit and in the
petitions for the '937 Patent had no impact on the validity, abandonment or
enforceability of the '937 Patent or the entitlement to an injunction. This submission
is founded on two discrete subsidiary issues both of which rely on provisions
of the Act, specifically subsection 53(1) and paragraph 73(1)(a).
[112] The issue
concerns Grenke’s affidavit regarding one United States and three
Canadian patent applications. The Canadian patent applications related to: (1)
the flow-tee; (2) the sealing system; and (3) the drive which turns the rod
string: Grenke affidavit, appeal book, vol. 8, tab 227, p. 2635. Paragraphs 8 -
10 of the affidavit state as follows:
THAT
Mr. Torfs indicated to Mr. Rieder that he was himself the sole
inventor
of the Canadian and U.S. patent applications entitled
“Improvements
in Rotary Drive Assemblies, and that he and myself
were
joint inventors for the other applications. Mr. Torfs and I had
previously
agreed that Flender and GrenCo would jointly own all
patent
rights, and I believe it was that agreement which led Mr. Torfs
to
erroneously indicate himself as joint or sole inventor (as the case
may
be), despite the fact that I had already reduced the various
inventions
to practice at a time prior to my first meeting with Mr. Torfs.
THAT
the inclusion of Mr. Torfs as a sole or joint inventor, and the
failure
to identify me as the sole inventor on all of the applications,
were
the result [sic] inadvertence or mistake, and were not for the
purpose
of delay.
THAT
Mr. Walter Torfs passed away during the month of June, 1993, and
it
is therefore not possible to obtain his Affidavit.
Since this case concerns only the '937
Patent, the consequences of Grenke’s statements with respect to any other
patents are not relevant to this appeal.
Subsection 53(1)
[113] Subsection
53(1) provides, among other things, that a patent is void if any material
allegation in the petition of the applicant in respect of the patent is untrue.
The appellants argue that Grenke intentionally misled the Patent Office by
removing Torfs and by failing to list Engelen as inventors of the '937 Patent.
Given my conclusion that the judge did not err in his determination that
Engelen is not a co-inventor, nothing further need be said about Engelen.
[114] The judge
rejected the notion that Grenke’s affidavit was based on Grenke’s confusion
between “inventorship” and “ownership” and found that it was motivated by
Grenke’s perception that Torfs had ‘cut him out’ of the other patents which he
believed should be in their joint names: reasons, para. 335. The judge noted
that “[w]hile there may be debate that s. 53(1) always requires willfulness to
mislead, the weight of authority suggests that the focus is on materiality”:
reasons, para. 331. After considering the evidence before him, the judge
concluded that Grenke’s misstatement was not material for purposes of
subsection 53(1). His conclusion was based in part on his finding that Grenke
had acquired whatever interest Torfs or his employer Flender had in the patent
at the time it was issued. The judge suggested that naming Torfs as a
co-inventor (after his death) would be “a nice gesture of recognition” but
would have “no relevance to the validity of the Patent, its ownership or any
rights of inventorship”: reasons, para. 337. It is implicit in the judge’s
conclusion that naming Torfs as a co-inventor would have no impact on how the
public makes use of the art taught by the '937 Patent.
[115] The
appellants do not seriously challenge these subsidiary factual findings.
Rather, they maintain that an intentional misstatement as to inventorship will
always be material for purposes of subsection 53(1). The primary issue is
whether the judge erred in concluding that Grenke’s purported
misrepresentations were not material. This entails a finding of mixed fact and
law reviewable only for palpable and overriding error.
[116] Before
turning to this issue, two observations are in order. First, with respect to
the wilfulness requirement, in 671905 Alberta Inc. v. Q’Max Solutions Inc.,
2003 FCA 241, [2003] 4 F.C. 713 (Q’Max), Stone J.A., writing for a
unanimous court, considered this issue and concluded at paragraph 31 that “an
untrue ‘material allegation’ that consists of a failure to name co-inventors in
a petition for a patent will not render the patent void if the allegation was
not ‘wilfully made for the purpose of misleading’.” This brings me to my second
observation.
[117] The
appellants say the judge “found that Grenke wilfully mislead sic the
Patent Office with respect to the involvement of Torfs in the development of
the '937 Patent”: appellants’ memorandum of fact and law, para. 89. The
respondents counter that the judge specifically found, at paragraph 351 of his
reasons, that Grenke did not make a wilfully misleading statement as
contemplated in subsection 53(1): respondents’ memorandum of fact and law,
para. 73.
[118] The
appellants’ position is overstated. The judge did not make a specific finding
that Grenke made a wilful misleading statement. The judge’s comments at
paragraphs 335 of his reasons, relied upon by the appellants, deal with the
judge’s rejection of Grenke’s explanation as to his motive for submitting his
affidavit to the Patent Office, an explanation that the judge found was not
credible. The judge does not provide any reasons for the “reiteration” at
paragraph 351 of his reasons that Grenke did not make a wilfully misleading
statement.
[119] The basis of
Grenke’s case throughout trial was that he conceived the invention (the key
concepts of which he described as sealing over a rotating shaft having multiple
leak passages and including the system integrally with a drive shaft). The
judge ultimately concluded otherwise. However, that conclusion emanates from
litigation some 15 years after the submission of the affidavit. Until such time
as the judgment was rendered, neither the appellants nor the respondents could
know what the judge’s conclusions would be with respect to the various issues.
It is common ground that the relevant date for interpreting subsection 53(1) is
the date of issue, although untrue allegations made prior to issue that are not
corrected as of the date of issue may be included: Jules Gilbert Ltd.
v. Sandoz Ltd. (1970), 64 C.P.R. 14, p. 74 (Ex. Ct.), rev’d on other
grounds, [1974] S.C.R. 1336.
[120] It might be
said that the judge’s rejection of Grenke’s explanation constitutes an implicit
finding that Grenke made a wilful misleading statement. However, in my view,
the judge’s finding with respect to motive does not translate into a finding of
a wilful misleading statement particularly given the judge’s express statement
at paragraph 351 to the contrary. Under such circumstances, this Court is loath
to conclude that Grenke made a wilful misleading statement at the relevant date
– leading to what was described at paragraph 32 in Q’Max as the
“draconian remedy” provided for in subsection 53(1) – in the absence of an
analysis by the judge as to Grenke’s belief regarding inventorship at the
relevant time.
[121] Turning to
the appellants’ arguments concerning the materiality of inventorship, as
regards Torfs, they submit that Grenke’s misstatements were material for three
reasons: (1) they led to a proper inventor being removed from the petition; (2)
they prevented the Commissioner from carrying out his obligations under
subsection 31(3) of the Act; and (3) they caused the public to lose the benefit
of knowing that Torfs was an inventor: appellants’ memorandum of fact and law,
para. 103.
[122] The first and
second submissions can be addressed summarily. The first justification begs the
question as to whether a misstatement of inventorship is material in the
circumstances. The second justification concerns a procedural provision of the
Act that permits a jointly-filed application to be carried on by one or more of
the applicants where it appears that certain of the other initial applicants
had no part in the invention. To continue with the application, the remaining
applicants must satisfy the Commissioner, by way of affidavit, they are the
inventors. Since this is precisely the course of action that Grenke took, it
can hardly be said that the Commissioner was prevented from exercising
jurisdiction under the Act.
[123] The third
justification is founded on various public policy arguments and provisions of
the Act that address the identification of inventors, the need to promote
integrity of the Commissioner’s office and the Canadian patent system, Canada’s
international obligations, and the personal benefits to which inventors are
entitled in respect of their inventions. While the appellants’ arguments are
not to be minimized, it is highly doubtful, in my view, that they will be determinative
for purposes of interpreting materiality in the context of subsection 53(1). I
refer again to Q’Max where the absolute voiding of the patent on the
basis of misstated inventorship was regarded as a “draconian remedy.” The
appellants’ policy arguments must be balanced against this result. If the
appellants’ position is correct, it would yield an anomalous result. That is,
other inventors would effectively lose their interests in the patent monopoly
rather than be able to access what they had previously been denied.
[124] The most
compelling of the appellants’ arguments in this regard is their point that
accurate disclosure of the inventors’ identity provides a number of benefits to
the public. They maintain that the identification of inventors permits members
of the public to contact those inventors to discuss the invention and possible
improvements which, in turn, will assist in advancing the art. Further, they
argue that parties to a patent infringement action are entitled to examine
inventors as assignors of their patent rights under rule 237(4) of the Federal
Courts Rules, SOR/98-106 (the Federal Courts Rules). Failure to disclose
the inventors’ identity is said to inhibit a defendant’s right to make full
answer and defence to allegations of infringement in such circumstances.
[125] These
arguments, while interesting, are far from conclusive. The appellants do not
suggest that members of the public have any particular right to communicate
with inventors listed in the patent registry or that inventors are in any way
obliged to respond to attempted communications. The examination of an inventor
pursuant to rule 237(4) of the Federal Courts Rules may prove useful, but it is
a pre-trial questioning of a potential witness, unlike an examination for discovery
of a party: Teledyne Industries Inc. v. Lido Industrial Products Ltd.
(1978), [1979] 1 F.C. 310, para. 11 (C.A.). Recourse to rule 238
remains available to litigants.
[126] The judge’s
conclusion with respect to subsection 53(1) rests on the notion that
materiality is a fact-specific determination. I agree with the judge’s
observation in this respect. I am mindful of the appellants’ submission that
misstating inventors has previously been considered sufficient to invalidate a
patent: Comstock Canada v. Electec Ltd. (1991), 38 C.P.R. (3d), 29, paras.
61, 98 (F.C.T.D.). Also, in Merck & Co. v. Canada (Minister of
Health), 2010 FC 1042, 88 C.P.R. (4th) 98, at paragraph 56, the judge
explained that a subsection 53(1) argument “would have had considerable force”
had he not found that there was no untrue allegation concerning inventorship.
[127] However,
courts in Canada have also
found inventorship to be immaterial in other cases. The appellants acknowledge
that in Proctor & Gamble Co. v. Bristol-Myers Ltd. (1978), 39 C.P.R.
(2d) 145, paras. 31-37 (F.C.T.D.) (Proctor & Gamble), aff’d (1979),
28 N.R. 273, 42 C.P.R. (2d) 33 (F.C.A.), Addy J. found a misstatement as to
inventorship to be immaterial on the facts of that case. Notably, he reasoned
that inventorship was immaterial since the facts demonstrated that it “does not
[go] to the term or to the substance of the invention nor even to entitlement”:
Proctor & Gamble, para. 37. This Court, in Wellcome, after
concluding that Drs. Broder and Mitsuya were not co-inventors, assumed for
purposes of the invalidity argument under subsection 53(1) that they were
co-inventors and concluded that the failure to name them in the petition was
not fatal.
[128] The
appellants argue that the Supreme Court recently considered the issue of
inventorship and left the question of its materiality to be decided in future
cases: Wellcome, paras. 107-109. While that is correct, Wellcome
does not lead to the conclusion for which it is offered by the appellants (that
the question of the materiality of inventorship was left to be decided in a
case where wilful misrepresentations are made in respect to inventorship –
facts which are allegedly present in this case). In my view, the guidance to be
taken from Wellcome is that the materiality of inventorship will depend
on the circumstances of any particular case. Regarding the American authorities
relied upon by the appellants, apart from highlighting the problems associated
with and experienced by the courts in the United States as a result
of an ever-expanding doctrine of inequitable conduct, the cases are of no
assistance.
[129] The judge’s
conclusion that Grenke’s misstatement concerning Torfs was immaterial was
grounded in the circumstances of this case. His fact-specific analysis accords
with the jurisprudence concerning the materiality of inventorship. The
appellants have not demonstrated, as a matter of law, that inventorship is
material in all circumstances. Nor have they established that any particular
combination of facts will necessarily render the identity of an inventor
material for the purpose of subsection 53(1). Regarding the judge’s
appreciation of the evidence, I am not persuaded that the appellants have shown
palpable and overriding error in relation to the judge’s findings concerning
the ownership of the invention at the relevant time. Finally, the appellants
have not demonstrated that inventorship is somehow relevant to the public’s use
of the invention in this case. There is no basis upon which this Court should
interfere with the judge’s conclusion.
Paragraph 73(1)(a)
[130] Paragraph
73(1)(a) of the Act provides that an application for a patent shall be
deemed to be abandoned if the applicant does not reply in good faith to any
requisition made by an examiner in connection with an examination within six
months after the requisition is made or within any shorter period established
by the Commissioner.
[131] The
appellants’ argument in relation to this provision is again grounded on
Grenke’s August 17, 1994 affidavit and the petitions for the '937 Patent. They
submit that an applicant is under a statutory obligation to act in good faith
in responding to all requisitions made by the Examiner and the Commissioner of
Patents during prosecution of the patent. (In this case, the Patent Office
asked for an affidavit to support Grenke’s request to remove Torfs as an
inventor.) The failure of an applicant to meet the duty of good faith will
result in the deemed abandonment of the patent application unless the defects
are rectified within a defined period. According to the appellants, technical
non-compliance with the provisions of section 73 of the Act is sufficient for
the abandonment of a patent both during prosecution and post-issuance:
appellants’ memorandum of fact and law, para. 112.
[132] IPIC appears
as an intervener in relation to this issue. Both the respondents and IPIC argue
that the appellants’ interpretation of paragraph 73(1)(a) would require
the imposition of a general duty of good faith, as a condition of the validity
of a patent, analogous to the American doctrine of inequitable conduct, which
has never been the law in Canada. They submit that Parliament did not intend to
change, and did not change, the substantive law by enacting paragraph 73(1)(a).
[133] The judge
concluded that section 73 of the Act as a whole is not directed primarily at
the validity of a patent once issued, but at regulating the patent application process:
reasons, para. 345. The good faith requirement in paragraph 73(1)(a) of
the Act must be read together with the Act’s requirements in relation to
obviousness in section 28.3 and material misstatement in subsection 53(1):
reasons, para. 347. There was no evidence the Examiner made a requisition about
inventorship: reasons, para. 348. Grenke was entitled to respond to the Patent
Office through his patent agent; his statement was neither a material
misstatement nor wilfully misleading: reasons, para. 351.
[134] The
appellants take issue with the judge’s findings regarding material misstatement
and wilful misleading. However, given my conclusions earlier in these reasons,
the life of those arguments has expired. The crux of the issue is whether paragraph
73(1)(a) can be utilized to invalidate a patent once it has issued. The
matter can be resolved solely on that basis. Although the respondents raise a
question as to whether rule 151 of the Patent Rules was in effect at the
relevant time, I am prepared to assume, for purposes of the analysis, that it
was in effect, notwithstanding the retroactivity concerns expressed by the
respondents.
[135] There is no
debate regarding the applicable principles of statutory interpretation. Rizzo
& Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27 and its progeny
dictate that the words of an Act are to be read in their entire context and in
their grammatical and ordinary sense harmoniously with the scheme of the Act,
the object of the Act and the intention of Parliament. In Canada Trustco
Mortgage Co. v. R., 2005 SCC 54, [2005] 2 S.C.R. 601 (Canada Trustco),
the Supreme Court emphasized the dominant role the ordinary meaning of the
words plays in the interpretive process when the words are precise: Canada
Trustco, para. 10. More recently, in Celgene Corp. v. Canada (Attorney
General), 2011 SCC 1, [2011] 1 S.C.R. 3 (Celgene), the Court stated,
“[t]he words, if clear, will dominate; if not, they yield to an interpretation
that best meets the overriding purpose of the statute”: Celgene, para.
10.
[136] For ease of
reference, paragraph 73(1)(a) reads as follows:
|
73. (1) An application for a patent in Canada shall be deemed to be abandoned if the applicant does not
(a) reply in good faith to any requisition made by an
examiner in connection with an examination, within six months after the
requisition
is made or within
any shorter period established by the Commissioner;
|
73. (1) La demande de brevet est considérée comme abandonnée
si le demandeur omet, selon le cas :
a) de répondre de bonne foi, dans le
cadre d’un examen, à toute demande de l’examinateur, dans les six mois suivant
cette demande ou dans le délai
plus
court déterminé par le commissaire;
|
[137] On its face,
paragraph 73(1)(a) requires a patent applicant to reply in good faith to
an examiner’s requisition during the prosecution of a patent application. The
provision defines the person owing the duty (the applicant) and the
circumstances under which the duty is owed (when responding to any requisition
made by an examiner in connection with an application). Where an applicant
fails to reply in good faith to an examiner’s requisition, the application is
deemed abandoned by operation of law, subject to the applicant’s opportunity to
reinstate the application as provided for in the Act and the Rules. The
provision is situated within section 73, which generally relates to
communications and steps for the prosecution of patent applications in the
Patent Office. Other provisions within the section deal with deadlines or
requirements related to procedural steps and fees. Where any of the
requirements within section 73 is not met, the application is deemed abandoned.
Reinstatement is possible, but only if it is obtained within a prescribed time.
[138] The
appellants acknowledge that there is existing authority that does not militate
in favour of their position. They accept that in Lovell Manufacturing Co. v.
Beatty Brothers Ltd. (1962), 41 C.P.R. 18, p. 40 (Ex. Ct.) (Lovell),
it was held that an alleged misrepresentation made in the course of prosecuting
a patent could not subsequently be utilized to invalidate a patent. In Bourgault
Industries Ltd. v. Flexi-Coil Ltd. (1999), 237 N.R. 74, 86 C.P.R. (3d) 221 (F.C.A.)
(Flexi-Coil), leave to appeal refused, [1999] S.C.C.A. No. 223, this
Court held that there is no general duty of candour beyond “that which the
statute, the rules and the jurisprudence already require”: Flexi-Coil, paras.
26-31; see also: Eli Lilly v. Apotex, 2007 FC 455, [2008] 2 F.C.R. 636, aff’d
2008 FCA 44, 68 C.P.R. (4th) 167.
[139] However, the
appellants claim that the law, as stated in these authorities, was decided
under predecessor legislation. When paragraph 73(1)(a) was enacted, it
rendered prior authority in this respect no longer relevant insofar as the
obligation of good faith is concerned. As I understand the argument, if it is
established (at any time) that an applicant did not respond in good faith to a
requisition during the prosecution of the application, then by operation of
law, the application is deemed to have been abandoned. Consequently, if the
application was abandoned by operation of law and was not reinstated within the
requisite time, the '937 Patent could not properly have been issued and it must
be declared invalid.
[140] I do not accept
these arguments. The purpose of the Act is to promote the continued
advancement of research and innovation in Canada. Patent
protection rests on the concept of a bargain between the inventor and the
public. In return for disclosure of the invention to the public, the inventor
acquires, for a defined time, the exclusive right to exploit the patent: Free
World Trust, paras. 13, 42.
[141] It is well
established that Canadian patent law is entirely statutory in nature. It is
derived from the Act and the regulations enacted under it: Commissioner of
Patent v. Fabwerks Hoechst Aktiengeselschaft Vormals Meister Lucius and Bruning
(1963), [1964] S.C.R. 49, Sanofi, para. 12; Flexi-Coil, para. 31.
In DBC Marine Safety Systems Ltd. v. Canada (Commissioner of Patents),
2007 FC 1142, [2008] 2 F.C.R. 563, aff’d 2008 FCA 256, 69 C.P.R. (4th) 189, at
paragraph 2, the Act and Regulations are described by this Court as a “complete
code.”
[142] The grounds
for attacking the validity of a patent are delineated in the Act. Specifically,
they relate to: utility, section 2; novelty (anticipation), section 28.2;
obviousness (inventiveness), section 28.3; and sufficiency of disclosure,
subsection 27(3). In addition to validity grounds, a patent can be found to be
void if the conditions of subsection 53(1) are met.
[143] The
appellants put much stock in the fact that Bourgault was decided under
the predecessor legislation which is no longer in force. Specifically, they
claim there was no obligation of good faith contained in the former
legislation. It is true that the former Act did not contain a requirement of
good faith. However, the former Patent Rules, specifically rule 45(3)
required an applicant to make a bona fide attempt to advance the
application to allowance: C.R.C. 1978, c. 1250. It cannot seriously be
suggested that the phrases bona fide and good faith are anything other
than interchangeable. Further, there is an interrelationship between the
obligation in paragraph 73(1)(a) to reply to any requisition made by an
examiner within six months and the obligation to advance the application under
the former rule 45(3). Although paragraph 73(1)(a) is expressed
differently and in more modern language, the appellants’ interpretation of it
is untenable.
[144] The most
fundamental flaw in the appellants’ reasoning is that it fails to differentiate
an “application for a patent” from a “patent.” The distinction between the two
is consistently maintained throughout the Act, see for example: paragraph
12(1)(f), subsections 27(1), 29(2), 31(1), 49(1) and (2), 56(3), 78.1 and
78.2(2). Similarly, the Rules distinguish between an “application for a patent”
and a “patent”, see: rules 3(8) and (9), 3.01(1)(e), 3.01(2)(a) and (b), 4(7),
8(1), 8(2)(b) and (c), 38, 42, 100(3), 108, 133, 155(3) and 159. The Act also
treats the issuance of a patent as a decisive event which distinguishes an
“application for a patent” from a “patent”, see: section 36 and subsection
38.2(1). The rules do likewise, see: rules 160(4), 164 and 166.
[145] The
jurisprudence distinguishes between an “application for a patent” and a
“patent” and considers the issuance of the patent to be a demarcation point: Lovell,
p. 40; Flexi-Coil, para. 31; Procter & Gamble Co. v. Calgon
Interamerican Corp. (1982), 40 N.R. 313, 61 C.P.R. (2d) 1, paras. 68, 69
(F.C.A.), leave to appeal refused, [1982] S.C.C.A. No. 289 (Calgon); Merck
& Co. v. Apotex Inc., 2006 FCA 323, [2007] 3 F.C.R. 588, 55 C.P.R.
(4th) 1, para. 47, leave to appeal refused, [1982] S.C.C.A. No. 289.
[146] Given that
Parliament is presumed to know the law, can it be that with the enactment of
paragraph 73(1)(a) Parliament intended to revolutionize the law as it
then stood? I think not.
[147] Section 73
was first introduced in Bill S-17, the Intellectual Property Law Improvement
Act of 1993, which came into force on October 1, 1996. It was an omnibus
bill intended to modernize and streamline Canada’s
intellectual property laws: Research Branch, Library of Parliament, “Bill S-17:
The Intellectual Property Law Improvement Act” by Monique Hebert (19 January
1993), p. 2. Five intellectual property acts were amended, including the Act.
In relation to abandonments, among other things, Ms. Hebert explains that
technical problems had been identified under the 1987 amendments in Bill C-22.
Provisions that ought to have been deleted were retained while others required
clarification. Bill S-17 “would correct the existing deficiencies, clarify
concepts and set out the various provisions, whether existing or as revised, in
a more logical sequence.”
[148] The Hansard
record of Parliamentary debates and associated committee reports on Bill S-17
are unremarkable with respect to section 73 of the Act. The Regulatory Impact
Analysis Statement does not refer to it.
[149] In my view,
subsection 53(1) of the Act speaks to misrepresentations in relation to
patents, that is, issued patents. Paragraph 73(1)(a) speaks to good
faith in the prosecution of the patent application. The provisions are mutually
exclusive. This interpretation is consistent with the plain meaning of the
provision, its context within the Act and Canadian jurisprudence. There is no
indication that Parliament intended to alter the existing law that establishes
a dichotomy between an application for a patent and a patent.
[150] To be clear,
the concept of abandonment in paragraph 73(1)(a) operates during the
prosecution of the application for a patent. Its operation is extinguished once
the patent issues.
Post-issuance, the provisions of subsection
53(1) must be utilized with respect to allegations of misrepresentation. To
conclude otherwise would result in absurdity. An issued patent would be subject
to retroactive scrutiny by the courts in relation to the submissions made by an
applicant to the Patent Office during prosecution (generally many years prior),
judged against unknown criteria. It is for the Commissioner to determine
whether an applicant’s response to a requisition from an Examiner is made in
good faith, not for the courts. The courts do not issue patents. I note
peripherally that the United States Court of Appeals for the Federal Circuit in
Therasense, Inc. v. Becton, Dickinson and Company, 2011 U.S. App. LEXIS
a0590, 2011 WL 2028255 (Fed. Cir. 2011), addressed the “unclean hands”
inequitable conduct doctrine. Notably, that doctrine requires demonstration of
both materiality and intent to deceive, a significantly higher standard than
the general good faith requirement advanced by the appellants. The Court of
Appeals described the inequitable conduct doctrine as the “atomic bomb” of
patent law. The Court found it necessary to tighten the standard “in order to
redirect a doctrine that has been overused to the detriment of the public”:
opinion for the court, pp. 19, 21, 24.
[151] The cases
relied upon by the appellants do not assist them. DBC Marine upheld the
deemed abandonment of a patent application imposed before a patent was issued:
para. 1. In Dutch Industries Ltd. v. Canada (Commissioner
of Patents), 2003 FCA 121, [2003] 4 F.C. 67, leave to appeal refused,
[2003] S.C.C.A. No. 204. Canadian Patent Application No. 2,146,904 was deemed
abandoned: para. 3. No patent regarding that application had issued. In Johnson
& Johnson Inc. v. Boston Scientific Ltd., 2006 FCA 195, [2007] 1 F.C.R.
465, leave to appeal refused, [2006] S.C.C.A. No. 324, this Court held,
pursuant to the addition of subsection 78.6(1) to the Act, top-up payments had
a retroactive effect with the result that the patents at issue should not have
been deemed to be abandoned. Lundbeck Canada Inc. v. Ratiopharm Inc.,
2009 FC 1102, 79 C.P.R. (4th) 243 (Lundbeck) concerned proceedings under
the Patented Medicines (Notice of Compliance) Regulations,
SOR/93-133. The appellants’ argument is, in part, premised on the reasoning in
the reasons of the Federal Court in G.D. Searle & Co. v. Novopharm Ltd.,
2007 FC 81, [2008] 1 F.C.R. 477, rev’d 2007 FCA 173, [2008] 1 F.C.R. 529 (G.D.
Searle), leave to appeal refused, [2007] S.C.C.A. No. 340. To the extent
that the Federal Court decisions in G.D. Searle and Lundbeck can
be interpreted as standing for the proposition that paragraph 73(1)(a)
can be relied upon for the purpose of attacking the validity of a patent, they should
not be followed.
Injunctive Relief
[152] Last, the
appellants argue that the trial judge erred by granting injunctive relief in
the circumstances of this case. Their submission rests principally on the
allegation that Grenke lacked “clean hands” in his dealings with the Patent
Office: appellants’ memorandum of fact and law, paras. 127-130. In view of my
earlier conclusions regarding Grenke’s representations, that argument fails.
[153] In his
consideration of this issue, the judge referred to his previous determination
that Grenke’s conduct was insufficient to invalidate the '937 Patent. While
acknowledging that Grenke’s actions were not beyond reproach, the judge was of
the view that the appellants had infringed and would continue to infringe the
patent, absent the Court’s intervention: reasons, paras. 227-232. He described
the appellants’ actions as “unjustified and egregious.”
[154] Contrary to
the appellants’ assertion, the judge did not suggest that an injunction is
either necessary or appropriate in every instance of patent infringement. His
discretionary grant of injunctive relief was based on the circumstances of this
case. Discretionary orders attract significant deference. The appellants have not
satisfied the threshold required for this Court’s intervention, see: Apotex
Inc. v. Canada (Governor in Council), 2007 FCA 374, 63 C.P.R. (4th)
151, para. 15; Elders Grain Co. v. Ralph Misener (The), 2005 FCA
139, [2005] 3 F.C.R. 367, para. 13.
Adverse Inferences
[155] The
appellants appeal from two of the judge’s conclusions, each purportedly based
on an adverse inference. First, they take issue with the conclusion that the
appellants knowingly and wilfully infringed the '937 Patent as a result of hiring
Glen Schneider, a former employee of the Weatherford respondents. Second, they
dispute the judge’s finding of infringement of claim 17 and contend that the
judge, by employing an adverse inference, effectively relieved the respondents
of their burden to establish inducement.
[156] Leaving aside
claim 17, the first allegation can be disposed of summarily. I begin by noting
that intention is irrelevant to infringement. “Infringement is committed as
much in ignorance as with actual intent. Everyone is presumed to have notice of
a patent and, therefore, a patent may be infringed by one who is ignorant of
its existence”: Harold G. Fox, The Canadian Law and Practice Relating to
Letters Patent for Inventors, 4th ed. (Toronto: Carswell, 1969), p. 381; Monsanto
Canada Inc. v. Schmeiser, 2004 SCC 34, [2004] 1 S.C.R. 902, para. 49.
However, there is nothing that precludes a judge from concluding that a patent
has been intentionally infringed. The judge’s finding that the appellants
wilfully infringed was not based solely on the hiring of Glen Schneider. It was
based on a number of factors which the judge delineated before stating that
such factors had not been explained: reasons, para. 202. It was only then that
the judge drew the adverse inference that the appellants’ evidence, had it been
offered, would not have assisted them. I see no error in this respect.
[157] The
second allegation is of a different flavour. I indicated at paragraph 34 of
these reasons that the arguments with respect to claim 17 would be addressed
later. The time has come. I should note that, aside from its arguments with
respect to validity, the appellants do not challenge the judge’s
infringement conclusions other than with respect to claim 17. Therefore,
this discussion is confined to claim 17. I begin by specifying what is not
in issue. The propositions set out below are common ground.
(1)
The
respondents bore the burden of establishing infringement on a balance of
probabilities;
(2)
Claim
17 of the '937 Patent is a method claim;
(3)
The
appellants do not practise the method and therefore do not directly infringe
claim
17;
(4)
Infringement
of claim 17 by the appellants will be established by showing inducement.
[158] The judge
described claim 17 as a stand-alone claim which teaches a method of restraining
oil leakage in a PC pump: reasons, para. 175. He found that the appellants
“provided manuals with instructions on how to use the [appellants’] rotating
stuffing box. The operating instruction[s] for the [appellants’] retro and
integral Enviro stuffing boxes provides the correct information; the Griffin situation is
unclear”: reasons, para. 176. He noted that neither side called customer
witnesses and commented that he was left with only one logical conclusion,
“customers are more likely than not to follow the instructions in the manual – particularly
sophisticated customers like the oil well operators to whom the products are
directed”: reasons, para. 177. He found that the instruction manual contains
images of the retrofit and integral units, a schematic of the stuffing box, and
the operating procedures: reasons, para. 178. He noted Skoczylas’ evidence that
the manuals for the devices teach the practice in claim 17: reasons, para. 179.
[159] At paragraph
199 of his reasons, dealing specifically with the potential infringement of
claim 17, the judge noted again that the claim “is a method for restraining oil
which involves monitoring a leak passage to determine when seals fail.” He
described the method as one that “involves leaving a leak passage open” and noted
that “the Corlac devices are closed.” He then summarized the position of the respondents:
“[they] concede that they do not have evidence of actual use of the method.
They rely on the adverse inference from the [appellants’] failure to call
evidence to counter the obvious conclusion that customers would follow
instructions. They also rely on expert evidence to the same effect.”
[160] The judge
determined that claim 17, among others, had been infringed: reasons, para. 204.
His conclusion preceded his consideration as to whether the appellants “induced
third parties, the customers, to infringe the '937 Patent, as distinct from the
[appellants’] own liability for infringement by manufacture and sale”: reasons,
para. 205. Turning to the question of inducement, the judge reiterated his
concern regarding the lack of evidence and stated that it is only common sense
that sales were made to customers. He noted that the bifurcation order limited
an assessment of the extent of any inducement by the appellants: reasons, para.
205. Then, the judge concluded, “[i]n any event, the Court, having found that
there has been infringement by one or more of the appellants finds the answer
to Issue 3 is affirmative”: reasons, para. 206. For completeness, issue 3
stated: “[i]s one of more of the [appellants] liable for infringement by the
manufacture and/or sale of the [appellants’] Units in Canada, or by
inducing their customers to use the [appellants’] Units in Canada?”: reasons,
para. 115.
[161] With respect,
the appellants could not infringe claim 17 in the absence of a finding of
inducement. The judge determined that the appellants infringed claim 17 and
only then turned to the question of inducement. The analysis of inducement in
his reasons comprises the following points: there was no evidence from any
customers; it is only common sense that sales were made to customers: reasons,
para. 205. He had earlier noted that there was no evidence of use by customers
but they are more likely than not to follow the instructions in the manuals.
[162] It is settled
law that one who induces or procures another to infringe a patent is guilty of
infringement of the patent. A determination of inducement requires the
application of a three-prong test. First, the act of infringement must have
been completed by the direct infringer. 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. Third,
the influence must knowingly be exercised by the inducer, that is, the inducer
knows that this influence will result in the completion of the act of
infringement: Dableh v. Ontario Hydro, [1996] 3 F.C. 751, paras. 42, 43
(C.A.), leave to
appeal refused, [1996] S.C.C.A. No. 441; AB Hassle v. Canada (Minister
of National Health and Welfare), 2002 FCA 421, 22 C.P.R. (4th) 1,
para. 17 (C.A.), leave to
appeal refused, [2002] S.C.C.A. No. 531; MacLennan v. Les Produits Gilbert
Inc., 2008 FCA 35, 67 C.P.R. (4th) 161, para. 13. The test is a difficult
one to meet.
[163] The
appellants maintain that the judge did not apply the test. Rather, he applied
an adverse inference and ignored the fact that the respondents had not
established the requisite factors upon which to found a determination of
inducement.
[164] The issue of
adverse inference arose during the respondents’ closing submissions at trial.
The respondents conceded there was “no evidence that any operator actually
practised a method that would infringe claim 17”: appeal book, vol. 19, tab
295, p. 5917. Since the appellants had not called anyone to testify with
respect to the use of their instruction manual, the respondents suggested the
inference should be drawn that the evidence would have been that people follow
the instructions and operate their machines in accordance with the way it is
set out in the manual: appeal book, vol. 18, tab 291, transcript p. 73; vol.
19, tab 295, p. 5917. The respondents further referred to “the expert evidence
of the [appellants] who say that people would normally follow directions as to
lubrication and how to operate a machine”, as well as the evidence of the
respondents’ expert Skoczylas that the instructions “are a functional
equivalent of claim 17”: appeal book, vol. 18, tab 291, transcript p. 93; vol.
19, tab 295, p. 5918. It is not clear on what basis the expert purported to
make the first statement. I should also note that, while not conceding use, the
appellants did not appear to contest that customers would follow their
instructions. The debate centered on whether the instruction manual instructs the
practice of the method (of claim 17). The judge determined that it did.
[165] The
appellants claim they had no obligation to assist the respondents in
establishing their case. The burden was the respondents’ to meet and it was
open to them to call the appellants’ customers to establish the allegation of
use. In short, the respondents sought to establish their case through the
mouths of the appellants.
[166] The concept
of adverse inference was discussed in R. v. Jolivet, 2000 SCC 29, [2000]
1 S.C.R. 751, paras. 23-28, 29, 33. Justice Binnie, citing Wigmore on
Evidence (citation omitted) referred to the following passage at paragraph
33:
The opponent whose case is a
denial of the other party’s affirmation
has no burden of persuading
the jury. A party may legally sit inactive,
and expect the proponent to
prove his own case. Therefore, until the
burden of producing evidence
has shifted, the opponent has no call
to bring forward any evidence
at all, and may go to the jury trusting
solely to the weakness of the
first party’s evidence. Hence, though he
takes a risk in so doing, yet
his failure to produce evidence cannot
at this stage afford any
inference as to his lack of it; otherwise the
first party would
virtually be evading his legitimate burden. This
distinction has been
recognized and is reasonable. (emphasis of Binnie J.)
[167] That
said, as I read the judge’s reasons, he did not draw an adverse inference in
relation to claim 17. Rather, he stated that it is “only common sense that
sales were made to customers”: reasons, para. 205. Earlier, he commented he was
“left with the only logical conclusion…that customers are more likely than not
to follow the instructions in the manuals – particularly sophisticated
customers like the oil well operators to whom the products are directed”:
reasons, para. 177.
[168] In view
of the stringent test for inducement, I cannot determine whether the judge, had
he explicitly applied the test, would have arrived at a conclusion that the
appellants indirectly infringed claim 17 of the '937 Patent. It is clear that
the judge erred in finding infringement of claim 17 of the '937 Patent before
considering the issue of inducement. The finding of direct infringement cannot
stand. Further, although the judge is presumed to know the law, the inducement
test is a strict one and it is not clear that he appreciated its nature.
[169] There seem to
be significant gaps in the evidentiary basis needed to support what appears to
be an implicit finding of third party use. For example, although the
instruction manual may have been directed to oil well operators, were they the
customers? Who is the end-user? Was the instruction manual provided to the
end-user? Was the instruction manual provided in the normal course of the
appellants’ business? While I do not suggest that the judge was obliged to
answer these specific questions (perhaps the record did not permit him to do
so), I raise them to illustrate a factual matrix that would support the judge’s
inferences. There is an important distinction between inference and conjecture.
The dividing line between the two is often a very difficult one to draw. “A
conjecture may be plausible but it is of no legal value, for its essence is
that it is a mere guess. An inference in the legal sense, on the other hand, is
a deduction from the evidence, and if it is a reasonable deduction it may have
the validity of legal proof”: Jones v. Great Western Railway Co.
(1930), 47 T.L.R. 39, p. 45, 144 L.T. 194 (H.L.).
[170] Here, the
judge’s analysis with respect to inducement is deficient. However, the analysis
must be read in light of the other findings that he came to elsewhere in his
reasons. Regrettably, having completed the exercise, I am not satisfied that
the judge seized the substance of the critical issue in respect of inducement.
His conclusion appears to be derived from his earlier finding of direct
infringement.
[171] I agree with
the appellants that, in view of the test for inducement, the judge’s reasons do
not provide for meaningful appellate review. Consequently, given the judge’s
intimate familiarity with the record, I would return the issue of infringement of
claim 17, that is inducement, to the judge to be determined in accordance with
the established test.
Conclusion
[172] For all of
these reasons, I would allow the appeal with respect to the judge’s
determination of infringement of claim 17 of the '937 Patent. I would return
the issue of infringement of claim 17 to the judge for redetermination. In all
other respects, I would dismiss the appeal. Having concluded that the
respondents are largely successful, I would award them 80% of their costs on
appeal.
"Carolyn
Layden-Stevenson"
“I
agree.
M. Nadon J.A.”
“I
agree.
John M. Evans J.A.”
SCHEDULE “A”
to the Reasons in A-282-10
Dated July 18, 2011
|
Patent Act,
R.S.C. 1985, c. P-4
2. In this Act, except as
otherwise provided,
“invention” means any new and useful art, process, machine, manufacture or
composition of matter, or any new and useful improvement in any art, process,
machine, manufacture or composition of matter;
…
12. (1) The Governor in Council may
make rules or regulations
…
(f) prescribing the fees or the
manner of determining the fees that shall be paid to maintain in effect an
application for a patent or to maintain the rights accorded by a patent;
…
27. (1) The Commissioner shall grant a
patent for an invention to the inventor or the inventor’s legal
representative if an application for the patent in Canada is filed in
accordance with this Act and all other requirements for the issuance of a
patent under this Act are met.
…
28.2 (1) The subject-matter defined by a claim in an
application for a patent in Canada
(the “pending application”) must not have been disclosed
(a) more
than one year before the filing date by the applicant, or by a person who
obtained knowledge, directly or indirectly, from the applicant, in such a
manner that the subject-matter became available to the public in Canada or elsewhere;
(b) before
the claim date by a person not mentioned in paragraph (a) in such a
manner that the subject-matter became available to the public in Canada or elsewhere;
(c) in an
application for a patent that is filed in Canada by a person other than the
applicant, and has a filing date that is before the claim date; or
(d) in an application (the “co-pending application”)
for a patent that is filed in Canada by a person other than the applicant and
has a filing date that is on or after the claim date if
(i) the
co-pending application is filed by
(A) a
person who has, or whose agent, legal representative or predecessor in title
has, previously regularly filed in or for Canada an application for a patent
disclosing the subject-matter defined by the claim, or
(B) a
person who is entitled to protection under the terms of any treaty or
convention relating to patents to which Canada is a party and who has, or
whose agent, legal representative or predecessor in title has, previously
regularly filed in or for any other country that by treaty, convention or law
affords similar protection to citizens of Canada an application for a patent
disclosing the subject-matter defined by the claim,
(ii) the
filing date of the previously regularly filed application is before the claim
date of the pending application,
(iii) the
filing date of the co-pending application is within twelve months after the
filing date of the previously regularly filed application, and
(iv) the
applicant has, in respect of the co-pending application, made a request for
priority on the basis of the previously regularly filed application.
(2) An
application mentioned in paragraph (1)(c) or a
co-pending application mentioned in paragraph (1)(d)
that is withdrawn before it is open to public inspection shall, for the
purposes of this section, be considered never to have been filed.
…
28.3 The subject-matter defined by a
claim in an application for a patent in Canada must be subject-matter that would not
have been obvious on the claim date to a person skilled in the art or science
to which it pertains, having regard to
(a) information disclosed more
than one year before the filing date by the applicant, or by a person who
obtained knowledge, directly or indirectly, from the applicant in such a
manner that the information became available to the public in Canada or
elsewhere; and
(b) information disclosed before
the claim date by a person not mentioned in paragraph (a) in such a manner
that the information became available to the public in Canada or elsewhere.
…
29. (2) Subject to this section, a
nominee of an applicant shall be deemed to be the representative for all
purposes of this Act, including the service of any proceedings taken under
it, of the applicant and of any patentee of a patent issued on his
application who does not appear to reside or carry on business at a specified
address in Canada, and shall be recorded as such by the Commissioner.
…
31. (1) Where an invention is made by
two or more inventors and one of them refuses to make application for a
patent or his whereabouts cannot be ascertained after diligent inquiry, the
other inventors or their legal representatives may make application, and a
patent may be granted in the name of the inventors who make the application,
on satisfying the Commissioner that the joint inventor has refused to make
application or that his whereabouts cannot be ascertained after diligent
inquiry.
…
36. (1) A patent shall be granted for
one invention only but in an action or other proceeding a patent shall not be
deemed to be invalid by reason only that it has been granted for more than
one invention.
(2) Where an application (the
"original application") describes more than one invention, the
applicant may limit the claims to one invention only, and any other invention
disclosed may be made the subject of a divisional application, if the
divisional application is filed before the issue of a patent on the original
application.
(2.1) Where an application (the
"original application") describes and claims more than one
invention, the applicant shall, on the direction of the Commissioner, limit
the claims to one invention only, and any other invention disclosed may be
made the subject of a divisional application, if the divisional application
is filed before the issue of a patent on the original application.
(3) If an original application
mentioned in subsection (2) or (2.1) becomes abandoned, the time for filing a
divisional application terminates with the expiration of the time for reinstating
the original application under this Act.
(4) A divisional application shall be
deemed to be a separate and distinct application under this Act, to which its
provisions apply as fully as may be, and separate fees shall be paid on the
divisional application and it shall have the same filing date as the original
application.
…
38. (1) In all cases in which an
invention admits of representation by model, the applicant, if required by
the Commissioner, shall furnish a model of convenient size exhibiting its
several parts in due proportion, and when an invention is a composition of
matter, the applicant, if required by the Commissioner, shall furnish
specimens of the ingredients, and of the composition, sufficient in quantity
for the purpose of experiment.
(2) If the ingredients or composition
referred to in subsection (1) are of an explosive or dangerous character,
they shall be furnished with such precautions as are specified in the
requisition therefore.
…
38.2 (1) Subject to subsections (2) and
(3) and the regulations, the specification and any drawings furnished as part
of an application for a patent in Canada may be amended before the patent is
issued.
…
49. (1) A patent may be granted to any
person to whom an inventor, entitled under this Act to obtain a patent, has
assigned in writing or bequeathed by his last will his right to obtain it,
and, in the absence of an assignment or bequest, the patent may be granted to
the personal representatives of the estate of the deceased inventor.
(2) Where an applicant for a patent
has, after filing the application, assigned his right to obtain the patent,
or where the applicant has either before or after filing the application
assigned in writing the whole or part of his property or interest in the
invention, the assignee may register the assignment in the Patent Office in
such manner as may be determined by the Commissioner, and no application for
a patent may be withdrawn without the consent in writing of every such
registered assignee.
…
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.
…
53. (1) A patent is void if any material allegation in the
petition of the applicant in respect of the patent is untrue, or if the
specification and drawings contain more or less than is necessary for
obtaining the end for which they purport to be made, and the omission or
addition is wilfully made for the purpose of misleading.
(2) Where it appears to a court that
the omission or addition referred to in subsection (1) was an involuntary
error and it is proved that the patentee is entitled to the remainder of his
patent, the court shall render a judgment in accordance with the facts, and
shall determine the costs, and the patent shall be held valid for that part
of the invention described to which the patentee is so found to be entitled.
…
56. (3) Section 56 of the Patent Act,
as it read immediately before the day on which subsection (1) came into
force, applies in respect of a purchase, construction or acquisition made
before that day of an invention for which a patent is issued on the basis of
an application filed after October 1, 1989 and before the day on which
subsection (1) came into force.
…
73. (1) An application for a
patent in Canada shall be deemed to
be abandoned if the applicant does not
(a) reply in good faith to any requisition made by an
examiner in connection with an examination, within six months after the
requisition is made or within any shorter period established by the
Commissioner;
(b) comply with a notice given pursuant to subsection
27(6);
(c) pay the fees payable under section 27.1, within the
time provided by the regulations;
(d) make a request for examination or pay the
prescribed fee under subsection 35(1) within the time provided by the
regulations;
(e) comply with a notice given under subsection 35(2);
or
(f) pay the prescribed fees stated to be payable in a
notice of allowance of patent within six months after the date of the notice.
(2) An application shall also be deemed
to be abandoned in any other circumstances that are prescribed.
(3) An application deemed to be
abandoned under this section shall be reinstated if the applicant
(a) makes a request for reinstatement to the
Commissioner within the prescribed period;
(b) takes the action that should have been taken in
order to avoid the abandonment; and
(c) pays the prescribed fee before the expiration of
the prescribed period.
…
76. Every person who, in relation to
the purposes of this Act and knowing it to be false,
(a) makes any false
representation,
(b) makes or causes to be made
any false entry in any register or book,
(b.1) submits or causes to be
submitted, in an electronic form, any false document, false information or
document containing false information,
(c) makes or causes to be made
any false document or alters the form of a copy of any document, or
(d) produces or tenders any document
containing false information, is guilty of an indictable offence and liable
on conviction to a fine not exceeding five hundred dollars or to imprisonment
for a term not exceeding six months or to both.
…
78.1
Applications for patents in Canada filed before October 1,
1989 shall be dealt with and disposed of in accordance with section 38.1 and
with the provisions of this Act as they read immediately before October 1,
1989.
…
78.2 (2) Subject to subsection (3), any
matter arising on or after October 1, 1989 in respect of a patent issued on
or after that date on the basis of an application filed before that date
shall be dealt with and disposed of in accordance with sections 38.1, 45, 46
and 48.1 to 48.5 and with the provisions of this Act, other than section 46,
as they read immediately before October 1, 1989.
Patent Rules,
SOR/96-423
3. (8) In respect of a fee to maintain
under sections 100, 101, 155 and 156 the rights accorded by a patent issued
on the basis of an application filed on or after October 1, 1989, the
appropriate fee is
(a) if before the expiry of the
time prescribed for payment of the fee a small entity declaration is filed in
accordance with section 3.01, the applicable small entity fee set out in item
31 of Schedule II; and
(b) in any other case, the
applicable standard fee set out in that item.
(9) In respect of a fee to maintain
under subsections 182(1) and (3) the rights accorded by a patent issued on or
after October 1, 1989 on the basis of an application filed before that date,
the appropriate fee is
(a) if before the expiry of the
time prescribed for payment of the fee a small entity declaration is filed in
accordance with section 3.01, the applicable small entity fee set out in item
32 of Schedule II; and
(b) in any other case, the
applicable standard fee set out in that item.
3.01 (1) Subject to section 3.02, a
small entity declaration
…
(e) shall be signed by the
applicant or patentee or by a patent agent appointed by the applicant or
patentee;
…
(2) An applicant or patentee may pay
fees at the small entity level in respect of an application or patent if
(a) in respect of an application
other than a PCT national phase application or a patent issued on the basis
of such an application, on the filing date of the application the applicant
originally identified in the petition is a small entity in respect of the
invention to which the application or patent relates; and
(b) in respect of a PCT national
phase application or a patent issued on the basis of such an application, on
the date when the requirements of subsection 58(1) and, if applicable,
subsection 58(2) are complied with, the applicant who complies with those
requirements is a small entity in respect of the invention to which the
application or patent relates.
…
4. (7) Where a fee to register any
document relating to a patent or an application is received and the document
is not submitted, the fee paid shall be refunded.
…
8. (1) Subject to subsection (2),
communications addressed to the Commissioner in relation to an application or
a patent shall relate to one application or patent only.
(2) Subsection (1) does not apply in
respect of communications relating to
(a) a transfer, a licence or a
security interest;
(b) a change in the name or
address of an applicant, a patentee, a patent agent, an associate patent
agent or a representative for service; or
(c) fees to maintain an
application in effect or to maintain the rights accorded by a patent.
…
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.
…
38. No transfer of a patent or an
application to a new owner shall be recognized by the Commissioner unless a
copy of the document effecting the transfer from the currently recognized
owner to the new owner has been registered in the Patent Office in respect of
that patent or application.
…
42. Subject to sections 49 and 50 of
the Act, the Commissioner shall, upon request and on payment of the fee set
out in item 21 of Schedule II, register in the Patent Office any document
relating to a patent or an application.
…
100. (3) No fee to maintain the rights
accorded by a patent shall be payable in respect of any period for which a
fee to maintain the application for that patent was paid.
…
108. Until either a patent has been
issued on the basis of the application or the application is refused, or is
abandoned and no longer subject to reinstatement, or is withdrawn, the
Commissioner shall not make the certification referred to in subsection
107(2) in respect of a person, including an independent expert, unless the
Commissioner has received an undertaking by that person to the applicant
(a) not to make any sample of
biological material furnished by the international depositary authority or
any culture derived from such sample available to any other person before
either a patent is issued on the basis of the application or the application
is refused, or is abandoned and no longer subject to reinstatement, or is
withdrawn; and
(b) to use the sample of
biological material furnished by the international depositary authority and
any culture derived from such sample only for the purpose of experiments that
relate to the subject-matter of the application until either a patent is
issued on the basis of the application or the application is refused, or is abandoned
and no longer subject to reinstatement, or is withdrawn.
…
133. Every document filed in connection
with a patent or an application shall be presented clearly and legibly on
sheets of good quality white paper, which shall not, except in the case of
transfer documents, other documents concerning ownership and certified copies
of documents, be more than 21.6 cm x 33 cm (8 ½ inches x 13 inches).
…
151. For the purposes of subsection
73(2) of the Act, an application is deemed to be abandoned if the applicant
does not reply in good faith to any requisition of the Commissioner referred
to in section 23 or 25 within the time provided in that section.
…
155. (3) No fee to maintain the rights
accorded by a patent shall be payable in respect of any period for which a
fee to maintain the application for that patent was paid.
…
159. For the purposes of subsection
38.1(1) of the Act, where a specification in an application filed in Canada, or in a patent issued on
the basis of such an application, refers to a deposit of biological material,
the deposit shall be considered to be in accordance with these regulations if
sections 160 to 162 are complied with.
…
160. (4) The applicant may, before the
application is open to public inspection under section 10 of the Act or on or
before January 1, 1998, whichever is the later, file a notice with the
Commissioner stating the applicant’s wish that, until either a patent has
issued on the basis of the application or the application is refused, or is
abandoned and no longer subject to reinstatement, or is withdrawn, the
Commissioner only authorize the furnishing of a sample of the deposited
biological material to an independent expert nominated by the Commissioner in
accordance with section 165.
…
164. Until either a patent has been
issued on the basis of the application or the application is refused, or is
abandoned and no longer subject to reinstatement, or is withdrawn, the
Commissioner shall not make the certification referred to in subsection
163(2) in respect of a person, including an independent expert, unless the
Commissioner has received an undertaking by that person to the applicant
(a) not to make any sample of
biological material furnished by the international depositary authority or
any culture derived from such sample available to any other person before
either a patent is issued on the basis of the application or the application
is refused, or is abandoned and no longer subject to reinstatement, or is
withdrawn; and
(b) to use the sample of
biological material furnished by the international depositary authority and
any culture derived from such sample only for the purpose of experiments that
relate to the subject-matter of the application until either a patent is
issued on the basis of the application or the application is refused, or is
abandoned and no longer subject to reinstatement, or is withdrawn.
…
166. (1) Where a notice has been filed
with the Commissioner pursuant to subsection 160(4) in respect of an
application, until a patent is issued on the basis of the application or the
application is refused, or is abandoned and no longer subject to
reinstatement, or is withdrawn, a request pursuant to section 163 may only be
filed by an independent expert nominated by the Commissioner.
(2) Where the Commissioner makes a
certification pursuant to subsection 163(2) in respect of an independent
expert nominated by the Commissioner, the Commissioner shall send a copy of
the request together with the certification to the applicant and to the
person who requested the nomination of the independent expert.
|
Loi sur les brevets,
L.R.C. 1985, ch. P-4
2. Sauf disposition contraire, les définitions qui suivent
s’appliquent à la présente loi.
«
invention » Toute réalisation, tout procédé,
toute machine, fabrication ou composition de matières, ainsi que tout
perfectionnement de l’un d’eux, présentant le caractère de la nouveauté et de
l’utilité.
[…]
12. (1) Le gouverneur en conseil peut,
par règle ou règlement :
[…]
f) prescrire les taxes à payer pour le
maintien en état des demandes de brevet ainsi que des droits conférés par les
brevets ou les modalités de leur détermination;
[…]
27. (1) Le commissaire accorde un
brevet d’invention à l’inventeur ou à son représentant légal si la demande de
brevet est déposée conformément à la présente loi et si les autres conditions
de celle-ci sont remplies.
[…]
28.2 (1) L’objet que définit la revendication d’une demande de
brevet ne doit pas :
a) plus d’un an avant la date de dépôt
de celle-ci, avoir fait, de la part du demandeur ou d’un tiers ayant obtenu
de lui l’information à cet égard de façon directe ou autrement, l’objet d’une
communication qui l’a rendu accessible au public au Canada ou ailleurs ;
b) avant la date de la revendication,
avoir fait, de la part d’une autre personne, l’objet d’une communication qui
l’a rendu accessible au public au Canada ou ailleurs ;
c) avoir été divulgué dans une demande
de brevet qui a été déposée au Canada par une personne autre que le demandeur
et dont la date de dépôt est antérieure à la date de la revendication de la
demande visée à l’alinéa (1)a) ;
d) avoir été divulgué dans une demande
de brevet qui a été déposée au Canada par une personne autre que le demandeur
et dont la date de dépôt correspond ou est postérieure à la date de la
revendication de la demande visée à l’alinéa (1)a) si :
(i) cette
personne, son agent, son représentant légal ou son prédécesseur en droit,
selon le cas
(A) a antérieurement déposé de façon
régulière, au Canada ou pour le Canada, une demande de brevet divulguant
l’objet que définit la revendication de la demande visée à l’alinéa (1)a),
(B) a antérieurement déposé de façon
régulière, dans un autre pays ou pour un autre pays, une demande de brevet
divulguant l’objet que définit la revendication de la demande visée à
l’alinéa (1)a), dans le cas où ce pays protège les droits de cette personne
par traité ou convention, relatif aux brevets, auquel le Canada est partie,
et accorde par traité, convention ou loi une protection similaire aux
citoyens du Canada,
(ii) la date de dépôt de la demande
déposée antérieurement est antérieure à la date de la revendication de la
demande visée à l’alinéa a),
(iii) à la date de dépôt de la demande,
il s’est écoulé, depuis la date de dépôt de la demande déposée
antérieurement, au plus douze mois,
(iv) cette personne a présenté, à
l’égard de sa demande, une demande de priorité fondée sur la demande déposée
antérieurement.
(2) Si
la demande de brevet visée à l’alinéa (1)c) ou celle visée à l’alinéa (1)d) a
été retirée avant d’être devenue accessible au public, elle est réputée, pour
l’application des paragraphes (1) ou (2), n’avoir jamais été déposée.
[…]
28.3 L’objet que définit la
revendication d’une demande de brevet ne doit pas, à la date de la revendication,
être évident pour une personne versée dans l’art ou la science dont relève
l’objet, eu égard à toute communication :
a) qui a été faite, plus d’un an avant
la date de dépôt de la demande, par le demandeur ou un tiers ayant obtenu de
lui l’information à cet égard de façon directe ou autrement, de manière telle
qu’elle est devenue accessible au public au Canada ou ailleurs;
b) qui a été faite par toute autre
personne avant la date de la revendication de manière telle qu’elle est
devenue accessible au public au Canada ou ailleurs.
[…]
29. (2) Sous réserve des autres
dispositions du présent article, cette personne ou maison désignée est
réputée, pour toutes les fins de la présente loi, y compris la signification
des procédures prises sous son régime, le représentant de ce demandeur et de
tout titulaire d’un brevet émis sur sa demande qui ne semble pas résider ou
faire des opérations à une adresse spécifiée au Canada, et le commissaire
l’inscrit comme tel.
[…]
31. (1) Lorsqu’une invention est faite
par plusieurs inventeurs et que l’un d’eux refuse de soumettre une demande de
brevet ou que le lieu où il se trouve ne peut être déterminé après une
enquête diligente, les autres inventeurs ou leur représentant légal peuvent
soumettre une demande, et un brevet peut être accordé au nom des inventeurs
qui font la demande, si le commissaire est convaincu que l’inventeur conjoint
a refusé de soumettre une demande ou que le lieu où il se trouve ne peut être
déterminé après une enquête diligente.
[…]
36. (1) Un brevet ne peut être accordé
que pour une seule invention, mais dans une instance ou autre procédure, un
brevet ne peut être tenu pour invalide du seul fait qu’il a été accordé pour
plus d’une invention.
(2) Si une demande décrit plus d’une
invention, le demandeur peut restreindre ses revendications à une
seule invention, toute autre invention
divulguée pouvant faire l’objet d’une demande complémentaire, si celle-ci est
déposée avant la délivrance d’un brevet sur la demande originale.
(2.1) Si une demande décrit et
revendique plus d’une invention, le demandeur doit, selon les instructions du
commissaire, restreindre ses revendications à une seule invention, toute
autre invention divulguée pouvant faire l’objet d’une demande complémentaire,
si celle-ci est déposée avant la délivrance d’un brevet sur la demande
originale.
(3) Si la demande originale a été
abandonnée, le délai pour le dépôt d’une demande complémentaire se termine à
l’expiration du délai fixé pour le rétablissement de la demande originale aux
termes de la présente loi.
(4) Une demande complémentaire est
considérée comme une demande distincte à laquelle la présente loi s’applique
aussi complètement que possible. Des taxes distinctes sont acquittées pour la
demande complémentaire, et sa date de dépôt est celle de la demande
originale.
[…]
38. (1) Dans tous les cas où
l’invention est susceptible d’être représentée par un modèle, le demandeur
fournit, si le commissaire le requiert, un modèle établi sur une échelle
convenable, montrant les diverses parties de l’invention dans de justes
proportions. Lorsque l’invention consiste en une composition de matières, le
demandeur fournit, si le commissaire le requiert, des échantillons des
ingrédients et de la composition, en suffisante quantité aux fins d’expérience.
(2) Si les ingrédients ou la
composition sont d’une nature explosive ou dangereuse, ils sont fournis avec
toutes les précautions spécifiées dans la réquisition qui en est faite.
[…]
38.2 (1) Sous réserve des paragraphes
(2) et (3) et des règlements, le mémoire descriptif et les dessins faisant
partie de la demande de brevet peuvent être modifiés avant la délivrance du
brevet.
[…]
49. (1) Un brevet peut être concédé à
toute personne à qui un inventeur, ayant aux termes de la présente loi droit
d’obtenir un brevet, a cédé par écrit ou légué par son dernier testament son
droit de l’obtenir. En l’absence d’une telle cession ou d’un tel legs, le
brevet peut être concédé aux représentants personnels de la succession d’un
inventeur décédé.
(2) Si le demandeur d’un brevet a,
après le dépôt de sa demande, cédé son droit d’obtenir le brevet, ou s’il a,
avant ou après le dépôt de celle-ci, cédé par écrit tout ou partie de son
droit de propriété sur l’invention, ou de son intérêt dans l’invention, le
cessionnaire peut faire enregistrer cette cession au Bureau des brevets, en
la forme fixée par le commissaire; aucune demande de brevet ne peut dès lors
être retirée sans le consentement écrit de ce cessionnaire.
[…]
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.
[…]
53. (1) Le brevet est nul si la pétition du demandeur,
relative à ce brevet, contient quelque allégation importante qui n’est pas
conforme à la vérité, ou si le mémoire descriptif et les dessins contiennent
plus ou moins qu’il n’est nécessaire pour démontrer ce qu’ils sont censés
démontrer, et si l’omission ou l’addition est volontairement faite pour
induire en erreur.
(2) S’il apparaît au tribunal que
pareille omission ou addition est le résultat d’une erreur involontaire, et
s’il est prouvé que le breveté a droit au reste de son brevet, le tribunal
rend jugement selon les faits et statue sur les frais. Le brevet est réputé
valide quant à la partie de l’invention décrite à laquelle le breveté est
reconnu avoir droit.
[…]
56. (3) L’article 56 de la Loi sur les
brevets, dans sa version antérieure à la date d’entrée en vigueur du
paragraphe (1), s’applique à l’achat, l’exécution ou l’acquisition,
antérieurs à cette date, d’une invention pour laquelle un brevet est délivré
relativement à une demande déposée après le 1er octobre 1989 mais
avant l’entrée en vigueur du paragraphe (1).
[…]
73. (1) La demande de brevet est considérée comme abandonnée
si le demandeur omet, selon le cas :
a) de répondre de bonne foi, dans le
cadre d’un examen, à toute demande de l’examinateur, dans les six mois
suivant cette demande ou dans le délai plus court déterminé par le
commissaire ;
b) de se conformer à l’avis mentionné au
paragraphe 27(6) ;
c) de payer, dans le délai
réglementaire, les taxes visées à l’article 27.1 ;
d) de présenter la requête visée au
paragraphe 35(1) ou de payer la taxe réglementaire dans le délai
réglementaire ;
e) de se conformer à l’avis mentionné au
paragraphe 35(2) ;
f) de payer les taxes réglementaires
mentionnées dans l’avis d’acceptation de la demande de brevet dans les six
mois suivant celui-ci.
(2) Elle est aussi considérée comme abandonnée dans les
circonstances réglementaires.
(3) Elle peut être rétablie si le demandeur :
a) présente au commissaire, dans le
délai réglementaire, une requête à cet effet ;
b) prend les mesures qui s’imposaient
pour éviter l’abandon ;
c) paie les taxes réglementaires avant
l’expiration de la période réglementaire.
[…]
76. Quiconque, relativement aux fins de
la présente loi et en connaissance de cause, selon le cas :
a) fait un exposé faux;
b) effectue ou fait effectuer une fausse
inscription dans un registre ou livre;
b.1) remet ou fait remettre, sous forme
électronique, de faux documents ou renseignements ou des documents renfermant
des renseignements faux;
c) fait ou fait faire un faux document
ou altère la forme d’une copie de document;
d) produit ou présente un document
renfermant des renseignements faux, commet un acte criminel et encourt, sur
déclaration de culpabilité, une amende maximale de cinq cents dollars et un
emprisonnement maximal de six mois, ou l’une de ces peines.
[…]
78.1
La présente loi dans sa version du 30 septembre 1989 s’applique aux demandes
de brevet déposées jusqu’à cette date. Ces demandes sont également régies par
l’article 38.1.
[…]
78.2 (2) Sous réserve du paragraphe (3),
la présente loi dans sa version du 30 septembre 1989, à l’exception de
l’article 46, s’applique aux affaires survenant, le 1er octobre 1989 ou par
la suite, relativement aux brevets délivrés ce jour ou par la suite au titre
de demandes déposées avant le 1er octobre 1989. Ces affaires sont également
régies par les articles 38.1, 45, 46 et 48.1 à 48.5.
Règles sur les brevets,
DORS/96-423
3. (8) La taxe à verser en application
des articles 100, 101, 155 et 156 pour le maintien en état des droits conférés
par un brevet délivré au titre d’une demande déposée le 1er octobre 1989 ou
après cette date est :
a) si, avant l’expiration du délai prévu
pour le versement de la taxe, la déclaration du statut de petite entité est
déposée conformément à l’article 3.01, la taxe applicable aux petites entités
prévue à l’article 31 de l’annexe II;
b) dans les autres cas, la taxe générale
prévue à cet article.
(9) La taxe à verser en application des
paragraphes 182(1) et (3) pour le maintien en état des droits conférés par un
brevet délivré le 1er octobre 1989 ou après cette date au titre d’une demande
déposée avant cette date est :
a) si, avant l’expiration du délai prévu
pour le versement de la taxe, la déclaration du statut de petite entité est
déposée conformément à l’article 3.01, la taxe applicable aux petites entités
prévue à l’article 32 de l’annexe II;
b) dans les autres cas, la taxe générale
prévue à cet article.
3.01 (1) Sous réserve de l’article
3.02, la déclaration du statut de petite entité :
[…]
e) est signée par le demandeur ou le
breveté ou par un agent de brevets nommé par le demandeur ou le breveté;
[…]
(2) Le demandeur ou le breveté a le
droit de payer la taxe applicable aux petites entités à l’égard d’une demande
ou d’un brevet :
a) si, à l’égard d’une demande autre
qu’une demande PCT à la phase nationale ou d’un brevet délivré au titre d’une
telle demande, à la date de dépôt de la demande, le demandeur initialement
désigné dans la pétition est une petite entité à l’égard de l’invention visée
par la demande ou le brevet;
b) si, à l’égard d’une demande PCT à la
phase nationale ou d’un brevet délivré au titre d’une telle demande, le
demandeur était, à la date à laquelle il s’est conformé aux exigences du
paragraphe 58(1) et, s’il y a lieu, à celles du paragraphe 58(2) une petite
entité à l’égard de l’invention visée par la demande ou le brevet.
[…]
4. (7) La taxe d’enregistrement de tout
document relatif à un brevet ou à une demande est remboursée si elle est
versée et que le document n’est pas déposé par la suite.
[…]
8. (1) Sous réserve du paragraphe (2),
toute communication adressée au commissaire au sujet d’une demande ou d’un
brevet porte sur une seule demande ou un seul brevet.
(2) Le paragraphe (1) ne s’applique pas
aux communications concernant :
a) les transferts, licences ou sûretés;
b) les changements de nom ou d’adresse
d’un demandeur, d’un breveté, d’un agent de brevets, d’un coagent ou d’un
représentant pour signification;
c) les taxes versées pour le maintien en
état des demandes et des droits conférés par les brevets.
[…]
25. Sauf disposition contraire de la
Loi ou des présentes règles, le délai d’exécution de tout acte que le
commissaire exige, par avis, du demandeur pour qu’il se conforme à la Loi ou
aux présentes règles est le délai de trois mois suivant la demande.
[…]
38. Le commissaire ne reconnaît le
transfert d’un brevet ou d’une demande que si une copie de l’acte de
transfert du propriétaire actuellement reconnu au nouveau propriétaire a été
enregistrée au Bureau des brevets à l’égard du brevet ou de la demande.
[…]
42. Sous réserve des articles 49 et 50
de la Loi, le commissaire enregistre au Bureau des brevets tout document
relatif à un brevet ou à une demande, sur réception d’une demande
d’enregistrement accompagnée de la taxe prévue à l’article 21 de l’annexe II.
[…]
100. (3) Aucune taxe pour le maintien
en état des droits conférés par le brevet n’est exigible pour la période à
l’égard de laquelle a été payée une taxe pour le maintien en état de la
demande du brevet.
[…]
108. Le commissaire ne peut, jusqu’à ce
qu’un brevet ait été délivré au titre de la demande ou que celle-ci ait été
rejetée, ou ait été abandonnée et ne puisse plus être rétablie, ou ait été
retirée, faire la certification visée au paragraphe 107(2) à l’égard d’une
personne, notamment un expert indépendant, à moins d’avoir reçu l’engagement
donné par cette personne au demandeur, selon lequel :
a) elle ne mettra aucun échantillon de
matières biologiques remis par l’autorité de dépôt internationale ni aucune
culture dérivée d’un tel échantillon à la disposition d’une autre personne
avant qu’un brevet ait été délivré au titre de la demande ou que celle-ci ait
été rejetée, ou ait été abandonnée et ne puisse plus être rétablie, ou ait
été retirée;
b) elle n’utilisera l’échantillon de
matières biologiques remis par l’autorité de dépôt internationale et toute
culture dérivée d’un tel échantillon que dans le cadre d’expériences qui se
rapportent à l’objet de la demande, jusqu’à ce qu’un brevet ait été délivré
au titre de la demande ou que celle-ci ait été rejetée, ou ait été abandonnée
et ne puisse plus être rétablie, ou ait été retirée.
[…]
133. Tout document déposé à l’égard
d’un brevet ou d’une demande est présenté clairement et lisiblement sur des
feuilles de papier blanc de bonne qualité qui, sauf dans le cas des actes de
transfert, des autres documents constatant un titre de propriété et des
copies certifiées conformes de documents, mesurent au plus 21,6 cm sur 33 cm
(8 1/2 pouces sur 13 pouces).
[…]
151. Pour l’application du
paragraphe 73(2) de la Loi, la demande est considérée comme abandonnée si le
demandeur omet de répondre de bonne foi à toute demande du commissaire visée
aux articles 23 ou 25 dans le délai prévu à ces articles.
[…]
155. (3) Aucune taxe pour le maintien
en état des droits conférés par le brevet n’est exigible pour la période à
l’égard de laquelle a été payée une taxe pour le maintien en état de la
demande du brevet.
[…]
159. Pour l’application du paragraphe
38.1(1) de la Loi, lorsque le mémoire descriptif d’une demande déposée au
Canada ou du brevet délivré au titre de cette demande mentionne le dépôt d’un
échantillon de matières biologiques, le dépôt est réputé effectué
conformément au présent règlement si les exigences des articles 160 à 162
sont respectées.
[…]
160. (4) Le demandeur peut, au plus
tard le 1er janvier 1998, ou le jour précédant celui où la demande est rendue
accessible au public pour consultation sous le régime de l’article 10 de la
Loi si ce jour est postérieur, déposer un avis auprès du commissaire
indiquant qu’il veut, jusqu’à ce qu’un brevet soit délivré au titre de la
demande ou que celle-ci soit rejetée, ou soit abandonnée et ne puisse plus
être rétablie, ou soit retirée, que le commissaire n’autorise la remise d’un
échantillon des matières biologiques déposées qu’à un expert indépendant
désigné par lui conformément à l’article 165.
[…]
164. Le commissaire ne peut, jusqu’à ce
qu’un brevet ait été délivré au titre de la demande ou que celle-ci ait été
rejetée, ou ait été abandonnée et ne puisse plus être rétablie, ou ait été
retirée, faire la certification visée au paragraphe 163(2) à l’égard d’une
personne, notamment un expert indépendant, à moins d’avoir reçu l’engagement
donné par cette personne au demandeur, selon lequel :
a) elle ne mettra aucun échantillon de
matières biologiques remis par l’autorité de dépôt internationale ni aucune
culture dérivée d’un tel échantillon à la disposition d’une autre personne
avant qu’un brevet ait été délivré au titre de la demande ou que celle-ci ait
été rejetée, ou ait été abandonnée et ne puisse plus être rétablie, ou ait
été retirée;
b) elle n’utilisera l’échantillon de
matières biologiques remis par l’autorité de dépôt internationale et toute
culture dérivée d’un tel échantillon que dans le cadre d’expériences qui se
rapportent à l’objet de la demande, jusqu’à ce qu’un brevet ait été délivré
au titre de la demande ou que celle-ci ait été rejetée, ou ait été abandonnée
et ne puisse plus être rétablie, ou ait été retirée.
[…]
166. (1) Lorsque l’avis visé au
paragraphe 160(4) a été déposé à l’égard d’une demande, seul l’expert
indépendant désigné par le commissaire peut déposer la requête visée à
l’article 163 jusqu’à ce qu’un brevet soit délivré au titre de la demande ou
que celle-ci soit rejetée, ou soit abandonnée et ne puisse plus être
rétablie, ou soit retirée.
(2) Lorsque le commissaire fait la
certification visée au paragraphe 163(2) à l’égard de l’expert indépendant
qu’il a désigné, il envoie une copie de la requête, accompagnée de la
certification, au demandeur et à la personne qui a demandé la désignation de
l’expert.
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FEDERAL COURT OF APPEAL
NAMES OF COUNSEL AND
SOLICITORS OF RECORD
DOCKET: A-282-10
AN
APPEAL FROM THE JUDGMENT OF THE HONOURABLE MR. JUSTICE PHELAN OF THE FEDERAL
COURT, DATED JUNE 3, 2010, IN DOCKET
NO.
T-1236-01.
STYLE
OF CAUSE: CORLAC INC., NATIONAL-OIL WELL CANADA LTD.,
and NATIONAL
OILWELL INCORPORATED v. WEATHERFORD CANADA LTD., WEATHERFORD CANADA
PARTNERSHIP, DARIN GRENKE, as Personal
Representative
of the Estate of EDWARD gRENKE, and GRENCO INDUSTRIES LTD. and THE INTELLECTUAL PROPERTY INSTITUTE OF CANADA
PLACE OF HEARING: Toronto, Ontario
DATES OF HEARING: June 13-15, 2011
REASONS FOR JUDGMENT BY: LAYDEN-STEVENSON J.A.
CONCURRED IN BY: NADON J.A.
EVANS J.A.
DATED: July 18, 2011
APPEARANCES:
|
Christopher J. Kvas
William
D. Regan
|
FOR
THE APPELLANTS
|
|
Robert
H.C. MacFarlane
Adam
Bobker
Bruce
W. Stratton
Vincent
Man
|
FOR
THE RESPONDENT (Weatherford)
FOR
THE RESPONDENT (Darin Grenke, GrenCo Industries Ltd.)
|
|
Steven B. Garland
Colin
B. Ingram
|
FOR
THE INTERVENER (The Intellectual Property Institute of Canada)
|
SOLICITORS
OF RECORD:
|
PIASETZKI NENNIGER KVAS LLP
Barristers
& Solicitors
Toronto,
Ontario
|
FOR THE APPELLANTS
|
|
BERESKIN
& PARR LLP
Toronto, Ontario
DIMOCK
STRATTON LLP
Toronto,
Ontario
|
FOR
THE RESPONDENT (Weatherford)
FOR
THE RESPONDENT (Darin Grenke, GrenCo Industries Ltd.)
|
|
SMART & BIGGAR
Barristers
& Solicitors
Ottawa, Ontario
|
FOR
THE INTERVENER (The Intellectual Property Institute of Canada)
|
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