Date: 20021122
Docket: T-453-98
Neutral Citation: 2002 FCT 1217
BETWEEN:
WESTAIM CORPORATION
Plaintiff
- and -
ROYAL CANADIAN MINT
Defendant
AND BETWEEN:
ROYAL CANADIAN MINT
and THE ATTORNEY GENERAL OF CANADA
Plaintiffs by Counterclaim
- and -
WESTAIM CORPORATION
Defendants by Counterclaim
REASONS FOR ORDER
HANSEN J.
Introduction
[1] This is a patent infringement action in which The Westaim Corporation ("Westaim" or "plaintiff") alleges that claims 2, 4, and 6 of its patent, Canadian Letters Patent No. 1,198,073 ("'073 patent") have been infringed by the Royal Canadian Mint ("RCM" or "defendant") at its coin blank manufacturing operation in Winnipeg, Manitoba.
[2] The RCM denies the allegations and seeks declarations of non-infringement. As well, the RCM seeks a declaration that the '073 patent is invalid.
[3] The Attorney General of Canada is a plaintiff by counterclaim. In the counterclaim, the Attorney General also asks for a declaration of invalidity. The Attorney General, however, did not participate in the trial.
Background
[4] The '073 patent, entitled "Process for Producing Coin Blanks", was issued on December 17, 1985 to Sherritt Gordon Mines Limited ("Sherritt"). The application for the '073 patent was filed in Canada on July 8, 1982 and claims priority from a corresponding patent application filed in the United Kingdom on July 28, 1981. The named inventors are Dr. Maurice Clegg and Mr. Michael Ruscoe.
[5] Sherritt is a predecessor to Viridian Inc.. Viridian Inc. assigned the '073 patent to Westaim in 1996.
[6] Traditionally, coins were made from solid metals such as gold, silver, copper and alloys of copper and silver. In later years, nickel and nickel alloys were introduced as less expensive alternatives.
[7] During World War II and the Korean War, in an attempt to reduce the cost of producing coins and to conserve strategic materials for the war effort, Canada, the USA, Germany and other countries substituted their nickel and copper coins with coins produced from steel strip clad with metals such as nickel and zinc. For example, in Germany steel slabs with a metal coating were reduced to coinage gauge by hot and cold rolling. Blanks were punched from the clad steel strip and then minted. In Canada, steel strip was electroplated with nickel and then a thin coating of chromium. In the USA, steel strip was electroplated with zinc. For both the Canadian and USA coins, blanks were punched from the electroplated steel strip and then minted. Because the middle layer of steel was exposed, these World War II and Korean War coins were prone to rusting at the edges. As well, the plate tended to crack and peel. In the minting process, die life was significantly reduced due to the hardness of the steel.
[8] In the 1960's, Vereinige Deutsche Nickelwerke AG ("VDN") developed a process whereby two strips of nickel were metallurgically bonded to the two sides of strip steel. The strip now formed of steel sandwiched between two layers of nickel was cold rolled to the required gauge followed by the usual processes of punching, edging, deburring, annealing and burnishing to produce coin blanks. The exposed edge of the steel was still subject to rusting and corrosion particularly in equatorial countries.
[9] The dramatic increase of the price of silver in the 1960's led many countries to convert their coinage to an alloy of 75% copper and 25% nickel known as cupro-nickel. However, the rising prices of nickel and copper led a number of countries to turn to steel based coinage.
Sherritt's Nickel-Bonded-Steel Product
[10] In the early 1970's, Sherritt recognized the need for a substitute for nickel coinage. Sherritt's Director of Coinage Marketing challenged Dr. Clegg, the head of Sherritt's Department of Physical Metallurgy Research and Mr. Ruscoe a research metallurgist, to develop a new coinage product having all of the properties of nickel but at lower cost than a nickel coin. In order to meet the competition, the 1960's German roll clad steel product noted earlier, the requirements for the new coin blank included 10% nickel by weight on each face of the coin and a metallurgical bond between the nickel and steel core. To address the problem of the rusting on the edges of the German product, the edge of the coin blank had to be plated with nickel. As well, the new product had to match the properties of nickel including its ductility and softness, silver colour, corrosion resistance, metallic ream, density and vending machine discrimination. The requirement of 10% by weight of nickel was later reduced to 5% by weight on each face.
[11] Dr. Clegg and Mr. Ruscoe's subsequent work resulted in the development of Sherritt's nickel- bonded-steel ("N-B-S") coinage product and the issue of a number of US, Canadian and U.K. patents which will be referred to collectively as the N-B-S patents in these reasons.
[12] These patents relate to a process and product whereby discs, the cores, are punched from hard steel strip, deburred, rimmed, barrel electroplated with nickel or copper, and then annealed to soften the steel core. The coin blank is then minted. Of particular significance in the N-B-S process, is the formation of a metallurgical bond between the nickel or copper plate and the steel core during the annealing step.
[13] One of the concerns associated with the N-B-S process was the formation of blisters on the surface of the plated core during the post-plate anneal. In 1976, Dr. Clegg and Mr. Ruscoe began working on a solution to this problem. The result of that work is the patent at issue in these proceedings.
The '073 patent
[14] The '073 patent relates to the "production of coin blanks suitable for minting into coins". The word "coins" as defined in the patent includes "not only coins used as currency but also similar disc-like articles such as medals and medallions upon which insignia is imprinted".
[15] The patent discloses Sherritt's United States N-B-S patents as the relevant prior art regarding the production of less expensive coinage and summarizes the earlier patents as follows:
In these prior proposals, a metal such as nickel or copper is electroplated onto a disc-shaped steel core to produce a nickel or copper cladding with a thickness of at least about 0.03 - 0.05 mm on each opposed face of the core and a thickness on the circumference of the core in the range of from about 2 to about 4 times the face thickness, and the cladded core is heated to form a metallurgical bond between the nickel or copper cladding and the core and to reduce the hardness to less than about 65 on the Rockwell 30T hardness scale. The resultant blanks are then imprinted to form coins.
[16] Next, the inventive step is described which distinguishes the invention from the prior art:
The present invention is based on the discovery that satisfactory coin blanks can be produced by annealing a metal core to reduce its hardness to less than about 65 on the Rockwell 30T hardness scale, and electro-plating a metallic cladding onto the annealed core to produce a thickness of at least about 0.01 mm on each opposed face of the core and a thickness on the circumference of from about 2 to about 4 times the face thickness. In other words, the metallurgical bond formed between the cladding and the core in the prior proposals can be omitted, and the annealing of the core can be carried out before instead of after the electroplating operation.
[17] Following a detailed statement of the process as set out in the claims, the patent states that the "metallic cladding may be nickel, a nickel alloy, copper or a copper alloy, silver or gold". As well, the "cores may be of steel, nickel, zinc, zinc alloys, or other commercial coinage metals such as cupronickel".
[18] The disclosure states that the steel may have a carbon content in the range of about 0.005 to about 0.1% by weight. Where the steel has a carbon content less than about 0.01% by weight, the cores may be cooled by immersion in water. Where the steel has a carbon content greater than 0.01%, the cores should be cooled at a much slower rate to achieve the required degree of hardness of less than about 50 on the Rockwell 30 T hardness scale. Examples of the heating and cooling steps are provided.
[19] The patent also states that the metallic cladding may be applied in the manner described in the '014 patent with a face thickness of a least 0.01 mm, preferably between about 0.01 mm and 0.1 mm.
[20] The disclosure provides a list of suitable metallic cladding and core combinations which can be used with the process of the invention: "nickel on steel, silver on nickel, copper on nickel, nickel on copper, nickel on cupronickel, gold on copper on nickel, bronze on steel, bronze on nickel, copper on steel and nickel-iron on steel".
[21] Finally, the disclosure states that other embodiments of the invention will be readily apparent to a person skilled in the art.
[22] As noted earlier, only claims 2, 4, and 6 of the patent are at issue. Accordingly, only these three claims are detailed here.
[23] Claims 2, 4, and 6 are dependent upon claim 1. It reads:
A process for producing blanks suitable for minting into coins, comprising providing a plurality of appropriately disc-shaped metallic cores, heating the cores to decrease their hardness to less than about 65 on the Rockwell 30T hardness scale, cooling the heated cores to provide cooled cores with a hardness less than about 65 on the Rockwell 30T hardness scale, loading a plurality of cooled steel cores into an electrically non-conducting perforated container, placing the container in an electroplating bath, electroplating a metallic cladding onto the cores, while moving the container angularly about a horizontal axis, until a plating thickness of at least about 0.01 mm has been deposited on each face of each core and a thickness of from about 2 to about 4 times the face thickness has been deposited on the circumference of each core, and removing the cladded core pieces from the container.
[24] Claim 2 provides that the cores are steel. Claim 4 provides that the carbon content of the steel is in the range of from about 0.005 to about 0.1% by weight. Claim 6 provides for a process according to claim 4 with the steel having a carbon content higher than about 0.01% and the heated cores are cooled at a rate to provide a hardness of less than about 50 on the Rockwell 30T hardness scale.
The RCM Process
[25] In the Agreed Statement of Facts, the RCM process for the production of its coin blanks is described as follows:
a) The RCM purchases coils of cold rolled low carbon steel strip, having a hardness in the range of about 88-92 on the Rockwell B scale. The steel has a maximum carbon content of 0.06%, preferably 0.04%, and is designated generally as type SAE 1006.
b) The RCM punches disc shaped cores or "blanks" from the steel strip in a blanking press.
c) The steel blanks are deburred, and rimmed (or "upset").
d) The steel blanks are annealed in an annealing furnace, having an atmosphere of 19.5% hydrogen, to decrease their hardness and remove surface oxides. The blanks are heated from ambient temperature to 900 ° C, held and then slow cooled to ambient temperature over a period of about 120 minutes.
e) The cooled blanks have a hardness of approximately 47 on the Rockwell 30T scale.
f) The cooled blanks are then loaded into an electrically non-conducting perforated electroplating barrel, washed and electro-cleaned. After cleaning, the blanks are rinsed and acid pickled.
g) The electrically non-conductive, perforated barrel is rotated about a horizontal axis in a nickel sulphamate electroplating bath until a layer of nickel is electroplated onto the blanks to a thickness of approximately 0.006 - 0.008 mm on the face of the blanks and about 2 times that thickness on the circumference of the blanks.
h) The barrel is removed from the bath and the nickel plated blanks are rinsed, dipped in a 5% sulphuric acid solution, and rinsed.
i) The barrel containing the blanks is rotated about a horizontal axis in an acidic copper sulphate bath until a layer of copper is electroplated onto the nickel plated blanks to a thickness of approximately 0.013 - 0.017 mm on the face of these nickel electroplated blanks and about 2 times this thickness on their circumference.
j) The barrel is removed from the bath and the nickel/copper electroplated blanks are rinsed, anodically electro-cleaned, rinsed, dipped in a 5% sulphuric acid solution, and rinsed again. This is the end of the electroplating steps for coin blanks that will have an outer surface of electroplated copper.
k) Coin blanks that will have an outer surface of electroplated nickel continue on to another electroplating step wherein the barrel is rotated about a horizontal axis in a nickel sulphamate electroplating bath until a layer of nickel is electroplated to a thickness of approximately 0.006 - 0.010 mm onto the face of the nickel/electroplated blanks and about 2 times this thickness on their circumference.
l) The electroplated coin blanks from step j) or k) are rinsed and removed from the barrel and dried in a hot air dryer.
m) All coin blanks are heated in a furnace having an atmosphere of about 8.5% hydrogen to remove internal plating stress, to improve the grain structure with a grain size of the plating between ASTM grain size numbers 7 and 10.
n) The blanks are burnished in a centrifugal polishing unit.
o) The burnished blanks are inspected.
p) If acceptable, the blanks are minted into coins or sold to another mint for subsequent minting.
The Relevant Statute
[26] As the '073 patent was issued before October 1, 1989, the provisions of the Patent Act, R.S.C. 1985, c. P-4 (the "Act") apply to this proceeding.
Issues
Infringement
[27] Westaim submits that a comparison of the RCM process and claims 2, 4, and 6 of the '073 patent clearly demonstrates that the RCM has used every step of each of the relevant claims in its process.
[28] The RCM maintains that its process does not infringe any of the claims at issue for the following reasons:
a) the first layer of nickel electroplated onto the steel cores is not at least 0.01 mm thick;
b) multiple electroplating baths of different metals are used to achieve a plating thickness greater than 0.01 mm; and
c) the second copper layer and third nickel layer are not electroplated onto steel cores.
[29] Thus it can be seen that the central issue on infringement is whether the two or three electroplated layers used by the RCM in its process are within the scope of any of claims 2, 4, or 6. Westaim takes the position that while the electroplating step itself is an essential element of the invention, the details of the electroplating step are non-essential elements that permit variations.
Validity
[30] The RCM alleges that the '073 patent is invalid for the following reasons:
a) the claimed invention was anticipated;
b) the claimed invention was obvious at the date the invention was made;
c) the claimed invention lacks utility;
d) the claimed invention is broader than any invention made by the inventors;
e) the claimed invention is broader than any invention disclosed in the patent;
f) the claims are ambiguous; and
g) the patent's specification is insufficient to enable a skilled person to practice the claimed invention.
[31] As stated in Whirlpool Corp. v. Camco Inc., [2000] 2 S.C.R. 067, before considering issues of infringement and validity, the relevant claims of the patent at issue are to be construed. Since the pre-October 1989 Act applies in these proceedings, the claims are to be construed at the date the patent was granted.
Construction of the Claims
[32] In Whirlpool, supra, and Free World Trust v. Électro Santé Inc., [2000] 2 S.C.R. 1024, Binnie J. affirmed the "purposive construction" approach to claims construction. The court's task is to identify how the patentee has used various terms in the claims and what was meant by the terms. An understanding of the meaning of the terms is derived from the context of the patent specification as a whole with the assistance of the person skilled in the art to which the patent relates. An informed and knowledgeable reading of the claims will enable the court to identify as stated in Whirlpool, supra at paragraph 45 "... the particular words or phrases in the claims that describe what the inventor considered to be the "essential" elements of his invention".
[33] Three experts testified for Westaim. Mr. Douglas Hill, a metallurgist, was the manager of the Birmingham Mint, UK between 1977 and 1995. He testified as an expert in the field of metallurgy as applied to minting. Dr. John Jonas, Professor emeritus at McGill University, testified as an expert in the field of metallurgy, in particular, the deformation of ferrous metals. Mr. Allan Lee, a retired metallurgical engineer, worked at Sherritt in a number of capacities between 1962 and 1994. He testified as an expert in the field of metallurgy as applied to the coinage industry and the history of coinage development.
[34] Two experts testified for the RCM. Dr. Neil Risebrough, a consultant and Professor emeritus at the University of British Columbia, testified as an expert in the field of metallurgy. Dr. Mordechai Schlesinger, a consultant and Professor emeritus at the University of Windsor, testified as an expert in the field of electroplating.
[35] Westaim submits that the person skilled in the art of the invention, in the present case, is a person skilled in the production of coin blanks suitable for minting. Westaim notes that Mr. Hill and Mr. Lee have many years of experience in this field. In contrast, the RCM's experts do not have any experience in the production of plated blanks. Westaim argues that where there is a conflict in the evidence the opinions of Mr. Hill and Mr. Lee should be accepted over those of the RCM's experts.
[36] The RCM takes the position that it is not necessary that the notional "skilled worker" be an individual. Particularly in this instance, the appropriately skilled person is a team of people bringing together the necessary knowledge and experience regarding the production of plated blanks. As stated by Wetson J. in Mobil Oil Corp. et al. v. Hercules Canada Inc. (1994), 57 C.P.R. (3d) 488 (FCTD) at page 494, reversed but not on this point at 63 C.P.R. (3d) 473 (FCA):
The first step in any patent case is the construction of the patent. In other words, what does the patent mean. However, the audience of the patent is not the average member of the Canadian public but rather the person skilled in the art or science to which the patent pertains. Thus, before construing the patent, it is necessary to define the scope of this notional person.
. . .
The person skilled in the art need not be an individual person. Rather it can be a combination of skilled workers, scientists and technicians, each bringing their own and collective expertise to the problem. This is particularly true where the invention relates to a science or art that transcends several scientific disciplines...
[37] The RCM also relies on the following statement in Fox, Harold G. The Canadian Patent Law and Practice Relating to Letters Patent for Inventions, 4th ed. Toronto: Carswell, 1969 at pages 185-186:
¼The class of workman to be considered is, in each case, that which would carry out the invention. A specification may, therefore, be addressed to more than one class of 'ordinary workmen' and it is no objection that one person may require to call in assistance from a person in another art in order to understand it fully. It is not necessary for the patentee to instruct persons wholly ignorant of the subject-matter to which his invention relates in all that they must known before they can understand what he is talking about. As Lindley L.J. said in Edison and Swan Electric Light Co. v. Holland: "One class of persons may understand only one part of the specification and another class the other, and yet the patent may be valid." This principle was more fully discussed by Lord Parker in Osram Lamp Works Ltd. v. Popes Electric Lamp Co. Ltd.: "¼It may well be necessary to call in aid more than one art. Some of the directions contained in a specification may have to be carried out by skilled mechanics, others by competent chemists. In such case, the mechanic and chemist must be assumed to co-operate for the purpose in view, each making good any deficiency in the other's technical equipment. [references omitted]
[38] The RCM submits that knowledge in the fields of minting, metallurgy and electroplating is essential for a number of reasons. The '073 patent is directed to a process for making coin blanks suitable for minting into coins. Therefore, the skilled person must have some knowledge of the methods and equipment used in the minting process and what is "suitable" for minting. Since one step of the process of the '073 patent is the annealing of the metal cores and a number of metals are referred to in the patent as being suitable for the cores, a skilled person must be knowledgeable in the heat treatment of various metals. As well, the process of the invention includes an electroplating step. Accordingly, the skilled person must be knowledgeable about electroplating and the conditions required to electroplate one metal onto another.
[39] I accept the RCM's argument. In the present case, a reading of the '073 patent makes it clear that it is addressed to a person or a team of people who are knowledgeable in minting, metallurgy and electroplating.
[40] The key difference between the parties' positions regarding the construction of the claims at issue arises from the meaning of the words "¼ placing the container into an electroplating bath, electroplating a metallic cladding onto the cores while moving the container angularly about a horizontal axis, until a plating thickness of at least about 0.01mm has been deposited ¼". The issue is whether the meaning of these words includes a cladding consisting of multiple metallic layers.
[41] With respect to the '073 patent, Mr. Hill states in his report:
41. The '073 Patent teaches me that the annealing step can be carried out before plating the hard steel blanks so that the hard steel blanks are made soft before the plating is applied. The heat treatment costs would have been about the same for either the NBS or the method of this patent. A point made by the patent is that where the composition of the carbon in the steel is kept at a low level, the carefully controlled heat treatment and rate of cooling can soften the steel to make it an acceptable coinage substrate.
46. As of 1981 or 1985 a person skilled in the art would have understood the term "electro-plating a metallic cladding onto cores" to mean that a blank would be electro-plated with a metallic material. I would also have been well aware that it was common practice to electro-plate multi-layers of different materials. The '073 Patent does not restrict itself to the plating of one metal only and as of 1981, I would have understood that included in the concept of that patent would be not only the plating of a layer of one type of metal, but the plating of sequential layers of differing metals before the removal of the blanks from the plating barrels for any further treatments.
54. Speaking as a metallurgist, as of 1981 or 1985 or even today, the number of layers plated during the plating process is immaterial with respect to the process that we are discussing. What is important is that the plating covers the entire blank in a continuous, unbroken surface which surface is retained after minting into a coin.
[42] On cross-examination, Mr. Hill agreed that the words in the claims suggest a single electroplating bath and a single metallic cladding on the cores.
[43] The focus of Dr. Jonas' opinion regarding the claims at issue was on the carbon content of the steel core. He observes in his report that claim 4 in contrast to claim 2 specifies a range of the carbon content for the steel core (about 0.005 to about 0.1% by weight) to include ultra-low carbon steels up to conventional mild steels. Claim 6 provides that if the carbon content is higher than about 0.01% by weight then a slower rate must be used to reduce the hardness of the steel to less than about 50 on the Rockwell 30 T hardness scale.
[44] He also notes that the Rockwell 30 T value in Claim 6 is softer than in claim 2. This is significant, according to Dr. Jonas, because the softer steel causes less die wear during minting and results in a better reproduction of the design features imposed by the dies. Also, because softer steel is readily deformed, it will more likely prevent separation between the plated coat and the core during minting.
[45] Dr. Jonas' report continues with his interpretation of the essential elements of the claims. He states:
20. Overall, I would interpret the essential elements of these claims to be:
i) the use of ultralow carbon steels (0.005 to 0.01% carbon), which have lower carbon levels (and therefore lower hardness levels) than conventional low carbon (0.05 to 0.10% carbon) steels;
ii) annealing (defined below) of the cores is to be done after (rather than before) blanking and before rather than after electroplating;
iii) the annealing process carried out on the prescribed steel cores is intended to reduce the hardness to below about 65 (and indeed below about 50, claim 6) on the Rockwell 30 T hardness scale. Such hardness, particularly the latter, correspond to very soft and therefore relatively formable steels (see above); and
iv) The cores are to be barrel plated after blanking. This is in contrast to the strip plating or roll bonding prior to blanking used by earlier processes.
[46] During cross-examination, a number of questions were put to Dr. Jonas regarding the meaning of "a metallic cladding" in the context of the claims. He maintained that a metallic cladding could have a number of layers.
[47] In his expert report, Dr. Risebrough states that the expanded definition of "coin" in the '073 patent is significant. A review of the prior art cited in the patent reveals that electroplated less expensive coins had a minimum plate thickness of 0.03 to 0.05 mm on each face of the coin and 2 to 4 times that amount on the edge. The plated core was annealed to reduce the hardness of the coin blank to less than 65 Rockwell 30 T and a metallurgical bond was formed between the core and plate. The prior art also reveals that care had to be taken not to deteriorate the metal surface of the blank with the post-plate anneal.
[48] In Dr. Risebrough's opinion, the invention in the '073 patent is based first on the discovery that annealing could take place prior to the plating step and the metallurgical bond could be omitted. A skilled person would understand that a simple mechanical bond would be sufficient to withstand the force of minting and the expected wear of the coin. Second, the thickness electroplated layer can be 0.01 mm rather than the earlier requirement of 0.03 to 0.05 mm.
[49] Dr. Risebrough also notes that the patent directs the reader to use the electroplating process of the U.S. '014 patent which is a process for electroplating nickel on steel to a thickness of 0.05 mm. However, there is no information on how to electroplate other metals onto other cores.
[50] He also observes that in the examples of suitable core and cladding combinations, one of the examples has more than one layer in the cladding.
[51] Dr. Risebrough then makes the following observations:
32. A number of points arise from the claims.
a) Claim 1 describes a process of annealing to soften a metallic core and electroplating a metallic coating on it.
b) The process seems to relate to a single electroplating bath. It says
... placing the container in an electroplating bath, electroplating a metallic cladding onto the cores, moving the container angularly about a horizontal axis until a plating thickness of a metallic cladding of at least about 0.01 mm is deposited on each face of each coin...
So the barrel stays in the same bath until at least 0.01 mm is plated. This process seems to cover only the first of multiple layers such as the gold on copper on nickel example on page 5 of the patent.
c) Only Claim 3 mentions specific plating metals for steel cores.
d) Otherwise the claims relating to steel cores appear to be unrestricted regarding the plating metal.
e) Six of the twelve claims (Claims 2-7) relate to steel with various carbon contents and cooling methods to anneal steel, which suggests that the inventors thought that this information was new and an important part of the invention.
f) Claim 2 seems to cover steel with any carbon content.
[52] Following a lengthy analysis of the meaning of "suitable for minting into coins", Dr. Risebrough states:
42. This limitation allows one to restate the assertions in the patent in a more finite way, as follows:
a) It was not known that a mechanical bond obtained by annealing before electroplating, rather than a metallurgical bond obtained by annealing afterwards, and a minimum face thickness of 0.01 mm, rather than 0.03-0.05 mm, could produce a coin blank that would be formable during minting and thereafter able to resist corrosion and wear during the expected lifetime of a coin.
b) The patented process will yield coin blanks that are formable during minting and thereafter able to resist corrosion and wear during the expected lifetime of a coin.
[53] In his expert report, Dr. Schlesinger states:
118. The patent describes a process to make blanks suitable for minting into coins. A summary of the process is set out at page 2. A skilled person would have understood the process involves two basic steps: annealing disc-shaped cores to soften them, and barrel electroplating a metal coating to a minimum thickness of 0.01 mm.
[54] With respect to the number of layers in the cladding, in Dr. Schlesinger's opinion:
126. A skilled person would have understood that the process described relates to electroplating one metallic cladding, at least 0.01 mm thick, onto a core. In my opinion, the following language of the patent at issue makes this clear (emphasis added):
Page 2, line 29- Page 3, line 2: "placing the container in an electroplating bath, electroplating a metallic cladding onto the cores, which (sic) moving the container angularly about a horizontal axis, until a plating thickness of at least about 0.01 mm has been deposited on each face of each core and a thickness of from about 2 to about 4 times the face thickness has been deposited on the circumference of each core, and removing the cladded core pieces from the container."
Similar language is used throughout the description of the invention. The only exception is the reference on page 5 to gold on copper on nickel, but no process for this coin blank is described anywhere in the patent, nor is it mentioned in any claim.
[55] In his rebuttal report, Dr. Schlesinger notes that when a metal is electroplated a phenomenon known as apitxal growth causes distortion in the lattice structure of the deposited metal. Where the deposited layer is greater than about 0.015 mm these distortions are minimized at the outer surface of the deposited metal. However, where the deposited layer is less than about 0.015 mm, the distortions are not minimized. The exact thickness at which the distortions are minimized depends upon the metal being plated, however, it generally occurs at thicknesses greater than about 0.015 mm. Accordingly, where a thin layer of metal is to be electroplated with a second layer, it is important for an electroplater to know the properties of the thin layer since the distortions can affect adhesion and other properties in the finished product.
[56] Dr. Schlesinger also adds in his rebuttal report that "the electroplating process conditions used to electroplate a second metal onto a thin first metal must often be developed for each specific application". According to Dr. Schlesinger, in 1985, experimentation would have been required to determine the precise conditions. For these reasons, he concludes in his rebuttal report that:
12. ... where a process relates to multiple electroplating layers, particularly thin layers, skilled people normally expressly refer to that fact, and specify the electroplating conditions for the different steps.
13. As stated in my prior declaration, in my opinion a skilled person would read Westaim's Patent as being limited to electroplating a single metallic layer, at least 0.01 mm thick, onto a core.
[57] During cross-examination, Mr. Lee was also questioned regarding the number of layers contemplated in the cladding. Based on the earlier patents referred to in the '073 patent and in particular the '374 patent which involves multiple plating layers, in his view the patent at issue would also include a multilayered coinage product. Mr. Lee acknowledged that there was nothing in the claims language to indicate whether "it is one plating coating or more". He maintained, however, that the cladding could possibly consist of more than one layer.
[58] The RCM submits that the plain meaning of the language of the claims contemplates a cladding having a single metallic layer. The claims language refers to the plating of a single metallic layer throughout the electroplating step. In particular, the RCM points to the use of "a metallic cladding" "an electroplating bath" and "a plating thickness" in the language of the claims. The claims describe the plating step as a single continuous process until a minimum thickness is achieved. Additionally, none of the claims refer to more than one plating layer. The RCM argues that the evidence of Mr. Hill, Dr. Risebrough and Dr. Schlesinger supports this assertion.
[59] The RCM submits that since the language of the claims is clear and unambiguous Westaim must rely on a purposive construction of the claims to expand the meaning of the claims to include a variant of multiple layers within the cladding. As the elements of the claims must be taken as essential, the first question in this analysis is whether there is any language in the claims that indicates multiple layers are contemplated within the scope of the claims. Again, relying on the specific language of the claims and the evidence of Mr. Hill, Dr. Risebrough and Dr. Schlesinger, the RCM takes the position that there is nothing in the language of the claims to suggest that the variant sought by Westaim is included within the scope of the claims. The RCM also argues that the reference in the disclosure to a suitable cladding being "gold on copper on nickel" cannot be used to rewrite the claims to include multiple metallic layers.
[60] The second question is, therefore, does a variant of multiple layers make a functional difference to the working of the invention. The RCM submits that it does make a functional difference. The RCM relies on Dr. Schlesinger's evidence that the process for plating one metallic layer is materially different from the process for plating more than one layer. As well, where a process contemplates the plating of multiple layers this would be expressly specified by a skilled person. The RCM points to Westaim's earlier patents in support of this assertion.
[61] The RCM also submits that although Mr. Hill testified that the number of layers plated during the plating process is immaterial to the process, he was not qualified as an expert in electroplating. Therefore, he was not in a position to offer an opinion regarding the functional differences between the processes for plating one or multiple layers.
[62] The RCM maintains that the evidence clearly demonstrates that the variant of multiple plating layers sought by Westaim does make a functional difference to the process. Therefore, it is not necessary in the analysis to ask whether it would have been obvious to a skilled person that the variant would not make a material difference to the working of the invention.
[63] Finally, the RCM submits that Westaim has failed to discharge their onus of establishing that the elements of the claims relating to the electroplating process are non-essential. Accordingly, they must be taken as essential.
[64] Westaim submits that a construction of the claims based on a plain reading of the claims in the context of the whole specification does not differ from a construction of the claims with the assistance of a skilled person.
[65] According to Westaim, a reading of the disclosure reveals that the patent is directed to the production of plated blanks suitable for minting into coins. The principle inventive difference between the invention and the most relevant prior art is that cores, having been punched, are annealed before instead of after plating. The formation of a metallurgical bond between the core and the plating can be omitted. The disclosure provides instructions for annealing ultra low and low carbon steels. The disclosure specifies a minimum plating thickness of at least about 0.01 mm and preferably a plating thickness between about 0.01 mm and about 0.1 mm. The plating technique to be used is the barrel plating technique specified by Sherritt in its other patents such as the '014 patent. The disclosure suggests a variety of metals for the core and for the cladding. In the disclosure, the word "cladding" refers to both single and multiple metallic layers.
[66] Within this context, Westaim argues that on a plain reading of the claims it is clear that the essential elements of claim 2 are providing punched cores of steel, annealing the cores to reduce the hardness of the cooled cores to less than about 65 Rockwell 30T, and barrel plating the cores with a cladding having a thickness of at least 0.01 mm on the face and 2 to 4 times that amount on the circumference. The essential elements of claim 4 are the same as those of claim 2 except that the punched cores of steel have a carbon content of about 0.005 to about 0.1% by weight. The essential elements of claim 6 are the same as those of claim 4 except the steel cores have a carbon content higher than about 0.01% by weight and the cores are annealed to reduce the hardness of the cores to less than about 50 Rockwell 30T.
[67] Westaim submits that Mr. Hill, Dr. Jonas, Dr. Schlesinger and Dr. Risebrough all agree that the essential feature of the invention is to anneal the metal cores before instead of after plating. In this respect, a construction of the claims with the assistance of the skilled persons does not differ from the plain meaning of the language of the claims.
[68] Westaim states that the experts differed only with respect to the meaning of the word "cladding". Mr. Lee and Dr. Jonas were both of the opinion that the claimed invention contemplated a cladding consisting of multiple metallic layers. Mr. Hill was of the view that the process described in the patent included the plating of a single metallic layer and the plating of multiple layers before the blanks are removed from the plating barrels. Although Mr. Hill conceded on cross-examination that the language of the claims contemplates a single cladding, he was not asked how many metallic layers would be comprised in the cladding.
[69] Westaim argues that the RCM's experts based their opinions that the word "cladding" in the claims describes a cladding having a single metallic layer on a grammatical construction of the claims. Neither of the RCM's experts, however, stated that the number of layers in the cladding was an essential feature of the invention.
[70] Westaim stresses that the '073 patent is not an electroplating patent. Although electroplating a cladding onto the cores is an essential element of the invention, the details of the electroplating process are non-essential elements of the claims.
[71] As noted earlier, the Court's task in construing the claims is to identify the essential and non-essential elements of the claims. As stated in Whirlpool, supra in paragraph 48:
"...the scope of the monopoly remains a function of the written claims but, as before, flexibility and fairness is achieved by differentiating the essential features ("the pith and marrow") from the unessential, based on a knowledgeable reading of the whole specification through the eyes of the skilled addressee rather than on the basis of the kind of meticulous verbal analysis in which lawyers are too often tempted by their training to indulge".
[72] In Free World Trust, Binnie J. emphasized the primacy of the claims language in determining the scope of the monopoly. However, it is a purposive construction of the claims that defines the scope of the monopoly. In Free World Trust, supra at paragraph 55, Binnie J. observed that an essential element is one "where substitution of another element or omission takes the device outside the monopoly". A non-essential element is one "where substitution or omission is not necessarily fatal to an allegation of infringement". He explained that an element of an invention may be considered to be non-essential in either of two ways:
i) that on a purposive construction of the words of the claim it was clearly not intended to be essential, or (ii) that at the date of the publication of the patent, the skilled addressees would have appreciated that a particular element could be substituted without affecting the working of the invention, i.e. had the skilled worker at that time been told of both the element specified in the claim and the variant and "asked whether the variant would obviously work in the same way", the answer would be yes...
[73] The phrase "work in the same way" means that "the variant (or component) would perform substantially the same function in substantially the same way to obtain substantially the same result".
[74] Finally, Binnie J. also states that a construction of the claims is to be based on the specification itself without resort to extrinsic evidence.
[75] Having regard to the first test stated by Binnie J. to determine if an element of a claim is non-essential, in my view, the evidence falls short of establishing that on a purposive construction the electroplating details found in the language at issue were not intended to be essential elements of the claims. It is clear from a reading of the claims in the context of the entire specification that the inventors intended that the metallic cladding have a minimum thickness of 0.01 mm. Mr. Hill, Dr. Schlesinger, and Dr. Risebrough agreed that the language of the claims contemplates a cladding electroplated in a single continuous process. Although Dr. Jonas and Mr. Lee maintained that, in principle, the meaning of the word "cladding" could include multiple metallic layers, their opinions were not based on the use of the word within the context of specific language of the claims. While one of the claddings noted in the disclosure has multiple layers indicates that the inventors intended the patent to include coin blanks having a cladding consisting of more than one plated layer, this does not necessarily lead to the conclusion that where multiple layers are being applied the first plated layer may be less than 0.01 mm. It is equally consistent with the notion that where multiple layers are being deposited the first layer must have a minimum thickness of 0.01 mm. I am unable to find any language that makes it clear that the inventors did not intend that the first plated layer have a minimum thickness of 0.01 mm. In my opinion there is nothing in the language of the claims to indicate that the inventors did not clearly intend that first layer 0.01mm was a non-essential element.
[76] The second question is whether it would have been obvious to the skilled worker at the date of the publication of the patent that a cladding having multiple layers could be substituted for a cladding having a single layer without affecting the working of the invention.
[77] Although Dr. Schlesinger explained at length his conclusion that electroplating multiple layers would significantly alter the electroplating process, in my view, there is an important distinction to be drawn between the electroplating process and the process of the invention. His conclusion is limited to a functional difference to the electroplating step and not to the process of the invention itself.
[78] With respect to this second question, I find Mr. Hill's evidence to be persuasive. According to him, a plated coating may be decorative or protective. The function of the plating is to provide a continuous unbroken surface on the core that is retained after minting. In his view, the number of layers plated during the plating process does not make a functional difference to the process of the invention. Mr. Hill's evidence is that this would have been obvious at the date of the publication of the patent.
[79] The process of the claimed invention is to produce an electroplated blank suitable for minting. Although the application of more than one electroplated layer may give rise to additional problems during the electroplating process, whether the cladding consists of one or multiple metallic layers the function of the cladding remains the same. It would not make a material functional difference to the claimed process. A cladding consisting of multiple metallic layers would obtain "substantially the same result" as a cladding consisting of a single metallic layer. The result is a coin blank with a cladding able to take an imprint, that is, a coin suitable for minting.
[80] Before turning to my findings with respect to the essential elements of the claims, one additional observation is necessary regarding the steel cores. Given that each of the claims requires an annealing of the cores to reduce the hardness of the steel to the requisite degree, it is implicit in the language of the claims that the "appropriately disc-shaped metallic cores" are punched from hard steel strip.
[81] Based on the evidence and my reading of the patent with the assistance of the experts, I find that the essential elements of the claims are:
Claim 2: Providing punched cores of steel; the cores are heated and then cooled to produce cores having a hardness of less than about 65 Rockwell 30 T; and the cores are barrel electroplated with a metallic cladding having a thickness of at least 0.01 mm on each face and with 2 to 4 times that thickness on the circumference.
Claim 4: In addition to the essential elements of claim 2, the carbon content of the punched cores of steel is in the range of about 0.005 and about 0.1% by weight.
Claim 6: In addition to the essential elements of claim 4, the carbon content of the punched cores of steel is in the range of about 0.01 and 0.1% by weight; and the cores are heated and then cooled at a rate to provide a hardness of less than about 50 Rockwell 30 T.
Validity
[82] As stated earlier, the RCM challenges the validity of the patent on a number of grounds. Section 45 of the Act provides that a patent is presumed to be valid in the absence of evidence to the contrary. In Diversified Products Corp. v. Tye-Sil Corp. (1991), 35 C.R.R. (3d) 350 at 359, Décary J.A. held that the onus is on the party challenging the validity of the patent to prove on a balance of probabilities the alleged invalidity.
[83] Section 27 of the Act limits what may be patented and requires that the claimed invention must be new. The claimed invention cannot have been previously made and disclosed by another person, published in a printed publication or have been in use or on sale in Canada. The RCM submits that the claimed invention was anticipated in three ways:
a) the claimed invention was known and used by employees of the United States Mint and others working with them before the inventors invented it and that it was made public in a United States Treasury Department Report entitled "Alternative Materials for One-Cent Coinage";
b) the claimed invention was published in U.K. Patent Specification No. 1,558,803 (the "803 patent) more than two years before the Canadian filing date of the '073 patent;and
c) Sherritt gave unrestricted access to a silver plated nickel coin to an employee of an independent electroplating contractor more than two years before the Canada filing date of the '073 patent.
[84] The RCM also relies on the contents of the United States Treasury Department report and the '803 patent in its submissions with respect to obviousness.
[85] In Beloit Canada Ltd. v. Valmet Oy (1986), 8 C.P.R. (3d) 289 at 294, Hugessen J.A. (as he then was) commented that where the validity of a patent is challenged on the basis of anticipation and obviousness, the issue of obviousness should be considered first. He explained that "a patent that lacks inventiveness cannot be novel; one that lacks novelty may still be inventive".
[86] Accordingly, I will first deal with the question of obviousness.
Obviousness
[87] The relevant date to assess obviousness is the date of invention which is presumed to be the filing date of the application for the patent which in this case is the priority date. Where a patentee seeks to rely on an earlier date the onus is on the patentee to establish the claimed date of invention.
[88] In the present case, Westaim submits that the date of invention of the pre-anneal process for making coin blanks suitable for minting was as early as February/March 1976 and no later than September 1976. By this time, the inventors had conceived the idea of annealing the metallic cores before electroplating, had tested the essential steps in the process, and had confirmed that the process resulted in a coin blank that minted well.
[89] Westaim takes the position that the essence of the invention is the order in which the steps of the process are carried out. Other aspects of the claims, such as, the carbon content of the steel and the minimum thickness of the metallic cladding are not material to a determination of the date of invention.
[90] There are two aspects to the RCM's response. First, the RCM states that work done by the inventors in 1976 was insufficient to nourish the full range of the claims at issue. The RCM argues that in 1976 the inventors did not know how to use the higher carbon low cost steels in the process; with the exception of nickel on steel, they did not know how to electroplate other claddings and cores; and they did not know how to electroplate to a thickness of 0.01 mm nor to a thickness of 0.1 mm and more.
[91] Second, the RCM's position is that the inventors never invented the claimed invention, let alone in 1976. The RCM argues that with the exception of nickel, the inventors relied on outside contractors to electroplate their pre-annealed cores and did not know the electroplating process conditions for other metals. The inventors never electroplated a pre-annealed core to the minimum thickness specified in the claims not did they ever electroplate pre-annealed cores to a thickness of 0.1 mm. As well, the idea that a minimum plating thickness of 0.01 mm would be sufficient was learned from a German coin making firm.
[92] Although the inventors claimed steel having a carbon content in the range of interstitial free steel they did not use this type of steel. Nor was any testing done on steels having a carbon content higher than 0.1% by weight to determine if the annealing process would reduce the hardness of the steel to the extent necessary to be suitable for minting.
[93] Finally, the use of cupronickel as a material for the cores was suggested by the U.S. Mint in 1976 and the inventors did no work with cupronickel.
[94] In Lubrizol Corp. v. Imperial Oil Ltd. (1992), 45 C.P.R. (3d) 449 at 462-463, Mahoney J.A. summarized the principles relevant to a determination of the date of invention as follows:
An applicant for a patent is required, by s. 36(2) of the Patent Act [R.S.C. 1970, c. P-4 -- now s. 34(2)] to conclude the disclosure of his invention in the application with
...a claim or claims stating distinctly and in explicit terms the things or combinations that the applicant regards as new and in which he claims an exclusive property or privilege.
There is no requirement in law that the claims of the patent have been formulated before the invention can be found to have been made. What is required, if the inventor wishes to rely on an invention date earlier than the priority date accorded the patent by statute, is that he prove that date, on a balance of probabilities, by cogent evidence.
The principles are well established. In The Permutit Co. v. Borrowman, [1926] 4 D.L.R. 285 at p. 287, 95 L.J.P.C. 164, 43 R.P.C. 356, a Canadian appeal, the Judicial Committee of the Privy Council stated:
It is not enough for a man to say that an idea floated through his brain; he must at least have reduced it to a definite and practical shape before he can be said to have invented a process.
In Christiani & Nielsen v. Rice, [1930] 4 D.L.R. 401 at p. 412, [1930] S.C.R. 443">[1930] S.C.R. 443, it was said:
The holding here, therefore, is that by the date of discovery of the invention is meant the date at which the inventor can prove he has first formulated, either in writing or verbally, a description which affords the means of making that which is invented.
Thorson P., in Ernest Scragg & Sons Ltd. v. Leesona Corp. (1964), 45 C.P.R. 1 at p. 32, [1964] Ex. C.R. 649, 26 Fox Pat. C. 1, after considering those decisions, held that the test laid down in Christiani & Nielsen was not intended to replace the general statement in Permutit and concluded that the date of invention
...may also be proved, in the case of an invention of an apparatus, that the apparatus was made at such date or, in the case of an invention of a process, that the process was used at such date. The essential fact to be proved is that at the asserted date the invention was no longer merely an idea that floated through the inventor's brain but had been reduced to a definite and practical shape. [page463]
[95] For the purpose of considering Westaim's assertion concerning the date of invention in the context of the challenges to the validity of the patent on the basis of obviousness and anticipation, I will focus on the work done by the inventors in relation to steel plated with nickel. In my view, many of the RCM's submissions in support of their assertion that the inventors did not invent the claimed invention can be more aptly considered under other challenges to the validity of the patent.
[96] Mr. Ruscoe testified that the concept of the pre-plating anneal was first considered in early 1976 as a possible way of addressing the problem of the blisters formed on the surface of N-B-S blanks caused by the post-plate anneal.
[97] Experimental work began on February 4, 1976. A study was undertaken to compare pre-annealed blanks and coins and post-annealed N-B-S post-annealed blanks and coins. For the pre-annealed samples, steel blanks were punched from A 424 Type 1 steel having approximately 0.008% carbon content by weight. The blanks were annealed, electroplated with approximately a 0.05 mm. thickness of nickel and burnished. These blanks, identified as "SB 7" were examined and compared with N-B-S blanks made from steel having the same carbon content and electroplated with 0.05 mm. of nickel.
[98] Regarding the SB 7 coins the lab notes state:
Coins looked excellent after minting. We should now section to see if relief was as good as the standard blanks (p 31) and also how the Ni/Fe interface behaved
[99] Upon examination after sectioning, Mr. Ruscoe testified that both the pre-annealed and post-annealed samples showed good adhesion of the nickel plate to the cores. As well, both samples formed relief in the same fashion, confirming the earlier visual examination that the minted appearance looked excellent. According to Mr. Ruscoe this confirmed that the pre-annealed experiment had worked. Hardness tests also revealed that the nickel plate of the pre-annealed samples was significantly harder than the post plate samples. This suggested to Mr. Ruscoe that a better wear resistance might be expected of the harder plate.
[100] In Progress Report 1111 dated March 1976, Mr. Ruscoe, reported the results of the study. It states that both the N-B-S and SB 7 blanks:
...minted well with good surface finish and apparently similar relief. This latter point was confirmed by metallurgic sections (851-42). In both cases the nickel plate deformed in the same manner indicating that the minting stress patterns are not affected by a difference in hardness of the nickel coatings, but rather respond to the bulk hardness of the iron substrates which in this case were similar. There are, however, two strikes against the SB 7 process. First, the lack of a diffusion bond between the nickel and the iron is a marketing disadvantage as both our standard process (SB 4/5/6) and the competition (Nickel-Clad-Steel) show this bond layer clearly. Secondly, the lack of a diffusion bond in SB 7 may lead to some nickel/iron separation during minting. Under severe service conditions this might give problems. This observation is based on one blank only and clearly a much more comprehensive study is required to determine the extent of the problem if such it is.
Should the blistering problem persist in the N-B-S project then it could well be worth scaling up the SB 7 process to establish technical viability.
[101] On cross-examination, Mr. Ruscoe acknowledged that of the six SB 7 blanks, 2 had light cracks in the plated surface, one had very bad separation between the core and plated layer and three did not appear to have any cracking. He also acknowledged that at this point in time the issue of whether a diffusion bond would be necessary to avoid nickel-iron separation had not been resolved.
[102] In September 1976, the SB 7 coins produced in March 1976 were tested for bond quality using destructive tests including hack sawing, filing, indentation, and bend tests. The results were compared with similar tests conducted on N-B-S coins. In both cases, there was no nickel/iron separation. Mr. Ruscoe noted in his September 1976 Progress Report 1117:
The only difference was that in the 180 degree bend test the nickel on the outer surface, which suffers a tensile strain of about 80% fractured in the present case [the SB 7 coins] whereas it thinned uniformly with the standard coin. We would expect the unannealed nickel to be more brittle in simple tension.
[103] Mr. Ruscoe explained that the 180 degree bend test was not a test normally used for coinage. The stretching which would occur as relief is formed varies from about 10% to 30%. Thus the 80% stretching occurring in the 180 degree bend test represents an exceptional test and one not entirely relevant to minting. He confirmed that the results of this test did not alter his earlier conclusion regarding the suitability of a pre-annealed blank for minting.
[104] No work or testing was done on pre-annealed blanks in 1977 or 1978. Between 1979 and 1981, Sherritt engaged three outside contractors, to electroplate a number of metallic claddings onto steel and nickel cores prepared by Sherritt. These included bronze on nickel, bronze on steel, copper on steel, a nickel iron composition on steel, silver on nickel, and gold on copper on nickel.
[105] In January 1981, tests were conducted on a series of steel samples having different carbon contents. The samples were annealed using different cooling rates to observe the hardness response. The objective of the tests was to ascertain what the maximum level of carbon might be tolerable for the N-B-S process assuming the use of a slow cooling furnace. The results of these tests, completed in March 1981, form the basis of the annealing information contained in the disclosure of the '073 patent.
[106] With respect to plate thickness, Dr. Clegg testified that although their initial target was 0.07 mm of nickel for the N-B-S project this was soon revised due to the high cost of fabrication with this amount of nickel. It was then established that 0.05 mm was sufficient for vending machine discrimination. In markets where vending machine discrimination was not a concern, such as Central and South America, the goal was to have enough nickel to have a good coin and long service life. It was determined that 0.03 mm was more than enough for 20 years service. It was also recognized that the N-B-S process could be used to make trade dollars, tokens for parking meters and gaming machines and other less costly products. According to Dr. Clegg, it was known from experience that 0.01 mm would last a very long time. He stated that the minimum thickness was dropped to 0.01 mm to cover the eventuality of Sherritt going into the low-cost market with tokens and other medallions.
[107] Mr. Ruscoe also testified that in 1976 the thickness of nickel plate for the purposes of providing satisfactory wear and corrosion resistance and the desired magnetic properties was at least 0.05 mm. During cross examination, he was asked a number of questions concerning the source of the idea that a minimum plate thickness of 0.01 mm was sufficient to produce a coin blank suitable for minting. In particular, he was asked about a memorandum dated May 28, 1981 concerning a Sherritt meeting regarding a German patent application. According to Mr. Ruscoe, the memorandum is a report of the consensus reached during the course of the meeting. The memorandum contains a statement to the effect that VDM [a German coin maker] say they think 0.01 mm is technically feasible. Mr. Ruscoe was asked if this was the first time he had learned that somebody thought that 0.01 mm was technically feasible. Mr. Ruscoe replied that he had no recollection of what he knew in terms of "VDM and feasibility".
[108] Mr. Ruscoe was also asked about any testing that had been done on blanks having a minimum plate thickness of 0.01 mm. Mr. Ruscoe testified that N-B-S blanks tested in March 1981 had a face thickness of nickel of 0.009 mm. According to Mr. Ruscoe, the minted appearance of these coins looked good. However, he also acknowledged that they would not be adequate for circulating coinage but that they would be adequate for tokens and medallions.
[109] In my opinion, Westaim has failed to prove on a balance of probabilities their claimed date of invention. As I found earlier, the essential elements of the claims at issue include the sequence in which the steps of the process occur, the minimum thickness of the metallic cladding, and the carbon content of the steel.
[110] Regarding the minimum thickness for the metallic cladding, Dr. Clegg did not specify when it became evident that 0.01 mm would be sufficient. According to Mr. Ruscoe, no testing was done at this thickness until 1981. This evidence, taken by itself, negates Westaim's claimed date of invention. Further, it is clear from the evidence of Mr. Ruscoe and Dr. Clegg that the work in relation to the lower cost higher carbon steels was undertaken early 1981 and was completed in March 1981. Up until this time, the inventors did not know the upper range of the carbon content of the steel that would be tolerable for a coin blank suitable for minting.
[111] This evidence leads me to conclude that March 1981 is the earliest possible date of invention. With respect to their work on steel electroplated with nickel, it was not until this date that the inventors had reduced their claimed invention to a "definite and practical shape".
[112] The key question on the issue of obviousness is whether the sequence of the steps in the process disclosed in the '073 patent is new. In Beloit, supra, at 293, Hugessen J.A. framed the legal test for obviousness as follows:
The test for obviousness is not to ask what competent inventors did or would have done to solve the problem. Inventors are by definition inventive. The classical touchstone for obviousness is the technician skilled in the art but having no scintilla of inventiveness or imagination; a paragon of deduction and dexterity, wholly devoid of intuition; a triumph of the left hemisphere over the right. The question to be asked is whether this mythical creature (the man in the Clapham omnibus of patent law) would, in the light of the state of the art and of common general knowledge as at the claimed date of invention, have come directly and without difficulty to the solution taught by the patent. It is a very difficult test to satisfy.
Hugessen J.A. also cautioned:
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.
[113] As stated earlier, the RCM submits that a skilled person in light of the common general knowledge and armed with the knowledge imparted in a U.S. Treasury Report entitled "Alternative Materials For One-Cent Coinage" and U.K. Patent 1,558,803 would be led directly and without difficulty to the claimed invention.
[114] Before turning to the evidence, a question arises as to when a particular study or report can be considered to have become part of the knowledge of a skilled worker. The Federal Court of Appeal in Mahurkar v. Vas-Cath of Canada Ltd. [1988] F.C.J. No. 58 stated:
In reviewing the prior art I have also been persuaded by counsel for the plaintiff that an objective test should be applied to determine whether the hypothetical skilled workman in the art could be reasonably assumed to have knowledge of such prior art. There appears to be adequate authority in the jurisprudence for such a test. No evidence was produced by the defendants to show that the ordinary skilled workman should be assumed to have been aware of all of this prior art. Frankly I find it difficult to believe that several of the items of prior art would have been present to the mind of the ordinary skilled workman in 1981.
[115] In the present case, The U.S. Treasury Department report was obtained by a member of the public under the Freedom of Information Act in mid-December 1980. However, the research was first announced publicly in an article appearing in the December 31, 1980 edition of the magazine Coin World. The article states that the full report was released at the end of 1980. Mr. Ruscoe stated that upon reading this article he became aware, for the first time, of the U.S. Mint's work on the alternative materials for coins. Mr. Ruscoe stated that he subsequently obtained a copy of the report in "early 1981". Dr. Clegg stated on cross-examination that he received the report sometime before July 1981. No other evidence was led with respect to when the ordinary skilled worker would have been aware of the contents of the report. On this evidence alone, I am unable to find that a skilled person could reasonably be assumed to have the information contained in the report prior to March 1981. Accordingly, the contents of the report will be disregarded.
[116] The '803 patent, published January 9, 1980, is one of Westaim's N-B-S patents. The patent claims the process and the product for a blank suitable for minting composed of a steel core completely encased in copper. In the process described in the patent, cores punched from low carbon steel strip having a carbon content of less than 0.05% and preferably in the order of 0.01% by weight are barrel electroplated with copper. The thickness of the copper plate is preferably 0.05 mm on each face and 2 to 4 times that amount on the circumference. The specification also provides that an intermediate layer of another metal such as nickel or zinc may be electroplated onto the steel cores before the application of the copper layer.
[117] The specification, at page 2 lines 54 to 66, states:
After the copper coating has been electroplated onto the core, the blank is preferably heated to form a layer of interdiffused copper and steel to form a metallurgical bonding of the copper coating to the core. Where an intermediate metal coating is provided, such heating is caused to form a layer of interdiffused copper and intermediate metal and also a layer of intermediate metal and iron with consequent metallurgical bonding of the copper coating to the intermediate coating and of the intermediate coating to the core. [emphasis added]
At lines 67-72 it also states:
The heating step may also be used to decrease the hardness of the steel core to a value more suitable for minting, for example, less than about 65, and preferably less than about 45, on the Rockwell 30T hardness scale.[emphasis added]
Included in the claims of the patent, are claims for the product and process for blanks having an intermediate layer of zinc between the steel cores and the outer copper coating. The claims include the product and process with and without a metallurgical bond.
[118] The key question on the issue of obviousness is whether the sequence of the steps in the process disclosed in the '073 patent is new. For this reason, the following review of the evidence concerning the common general knowledge focuses on those matters relevant to the order in which the steps in the process are carried out.
[119] Mr. Hill testified that punching blanks from hard strip has been the standard practice for many years. Mr. Lee testified that in order to make a good quality coin it is important to punch the blanks from hard strip. He stated that punching from hard strip minimizes the burring on the edge of the blank and the "dishing" of the blank which occurs during the blanking operation. He also stated that this has been Sherritt's practice for many years.
[120] According to Dr. Risebrough, in 1975, an ordinary skilled person charged with the task of making a minted coin or medal with a steel core and an electroplated coating would have as a matter of common general knowledge the following information.
[121] In order to minimize wear on the dies and to ensure proper metal flow during the minting process, the steel used to make the core should be capable of being annealed to a hardness of less than 65 and preferably to less than 50 on the Rockwell 30 T hardness scale. This would require low-carbon steel having a carbon content of less than 0.1% by weight. Low-carbon steel strip and coils pre-annealed to a hardness of less than 65 or 50 on the Rockwell 30 T hardness scale were available commercially.
[122] It was also known that at some stage in the process cores would be punched from the steel. If punching the cores caused the steel to harden, the steel would be annealed to the required Rockwell 30 T degree of hardness. As well, at some stage prior to minting, the cores would be electroplated.
[123] Dr Risebrough acknowledges that knowing these steps would occur during the process would not determine the order in which they would occur. However, in his view, a skilled person knowing they would occur, would have certain expectations about how the steps would proceed.
[124] Cold working processes such as rolling and punching cause steel to become harder, less ductile, and to develop internal stresses. Since these are undesirable properties, it was common practice to anneal steel after cold working.
[125] It was also common practice, to fix the mechanical and metallurgical properties of a basis metal prior to electroplating. Usually, a manufacturer of an electroplated article would cold work and anneal the basis metal to the required softness before electroplating.
[126] A skilled worker would also know that annealing after electroplating could give rise to a number of problems: it could cause the plate to blister and deteriorate the surface; intermetallic compounds having an undesirable brittleness could be formed; and plating materials such as zinc and tin would melt at the temperatures required to anneal steel. Although a skilled person would be aware of potential problems arising from the formation of intermetallic compounds, a skilled person might not know which metals could create difficulties for a particular use. For these reasons, the usual practice in 1975 was to anneal a basis metal before electroplating.
[127] With respect to electroplating, it was known that the primary factors affecting adherence of the plate to the basis metal are the surface conditions of the basis metal and the conditions of the electroplating bath. Further, a mechanical bond formed between a basis metal and an electroplated metal such as nickel, copper, zinc, and tin would provide sufficient adhesion to withstand the significant force of the minting dies.
[128] Finally, Dr. Risebrough commented that it was also known to anneal after electroplating to form a metallurgical bond between the basis metal and the plate when the formation of intermetallic compounds was not a problem. In these instances, it was known that a metallurgical bond could be stronger than the mechanical bond obtained by simple electroplating and ductility would not be sacrificed.
[129] Dr. Schlesinger agreed with Dr. Risebrough that the skilled person in 1975 would have been aware of the factors that determine adherence of the plate to the basis metal and the adverse effects of high temperature heat treatments conducted after electroplating. In his opinion, because of the adverse effects of high temperature heat treatments, they would be avoided if possible.
[130] Dr. Schlesinger also observed the mechanical bond between a basis metal and the electroplated surface would normally be sufficient for high wear applications provided the basis metal was properly prepared and the appropriate electroplating bath conditions were utilized. It was also known that a metallurgical bond may promote adhesion between the plated surface and the basis metal.
[131] Dr. Schlesinger also reviewed the '803 patent. In his opinion, the use of the word "preferably" in relation to the formation of a metallurgical bond and the word "may" in relation to the heat treatment means that they are optional. He also observed that the claims included claims with and without a metallurgical bond. Dr. Risebrough agreed with this interpretation of the patent. He added that the '803 patent seems to disclose and claim a process that falls within the claims of the '073 patent.
[132] In his report, Dr. Jonas referred to the heat treatment in the '803 patent as "an optional post-plate treatment... leading to a metallurgical bond". However, he disagreed with Dr. Risebrough's statement that the '803 patent process falls within the process claimed in the '073 patent. In his opinion, given that "no annealing is specified after blanking of the cores from the strips before plating" and that "the '803 patent is primarily concerned with metallurgical bonding (post-annealing), it can be concluded that '803 and '073 are two quite distinct patents".
[133] With respect to the '803 patent, Dr. Schlesinger also stated that a skilled person would have understood that if a metallurgical bond was formed during the process, the heating could also be used to anneal the steel core. Since it was part of the common general knowledge that steel must be softened before minting and that it would have been standard practice to apply high temperature heat treatments before instead of after electroplating, a skilled person would have known that where no metallurgical bond is formed the annealing would occur before electroplating.
[134] In response, Dr. Jonas observed that the prior art does not include annealing after blanking and prior to plating. Dr. Schlesinger agreed on cross-examination that nowhere in the '803 Patent is a reader directed to anneal before electroplating.
[135] Finally, in relation to the '803 patent, Dr. Risebrough testified that if a skilled person opted to use zinc as an intermediate layer between the copper and the steel core, there would be no option but to anneal the steel before electroplating. If the annealing occurred after electroplating the copper, the zinc would melt and ruin the outer copper layer. Dr. Jonas conceded on cross-examination that annealing cores plated with zinc and then copper could cause problems
[136] Westaim acknowledges that the four key elements of the '073 patent were known to the prior art. These are: 1) hard metal strip as the starting material; 2) punching cores from the hard strip; 3) annealing the cores to the required degree of softness; and 4) barrel electroplating the cores. However, the order in which the steps of the process are taken in the '073 patent is new. Westaim maintains that there is nothing in the prior art that shows that one can anneal before electroplating after having produced the cores from hard metal strip.
[137] Westaim argues that the RCM's experts have used the gift of hindsight and the various materials available to them to piece together the key elements of the process to arrive at the sequence disclosed in the '073 patent. Westaim submits that this is not sufficient to meet the legal test for obviousness. Westaim points to Dr. Risebrough's statement in his affidavit that knowing the steps would occur would not determine the order of the steps but that a skilled person would have certain expectations about how matters would proceed and would be aware of the various options. However, on cross-examination when he was asked, with respect to this statement, whether a skilled person "would see it was worth a try", Dr. Risebrough he agreed.
[138] Westaim also argues that although Dr. Schlessinger in his report viewed the differences between processes for producing coin blanks disclosed in the prior art as selections that were mutually independent and available to the skilled person and describes four options for the order in which the steps in the process could occur that would be presented to the skilled person, none of the options is the process describe in the '073 patent.
[139] For the following reasons, I find that the '803 patent renders the claimed invention in the '073 patent obvious. The patent itself provides the following relevant information regarding the process. Cores punched from hard steel strip is the starting material. The cores are electroplated with copper. An optional intermediate layer of another metal such as nickel or zinc may be electroplated onto the steel cores before the application of the copper layer. The electroplated cores are optionally subjected to a heat treatment resulting in the formation of a metallurgical bond between the plated layers, if an intermediate layer is applied, and the plated layers and the steel cores. The heat treatment also reduces the hardness of the steel to a value more suitable for minting. Finally, both the process and product are claimed in the patent with and without a post-plate heat treatment. There is no dispute among the experts that the post-plate heat treatment is an optional step in the '803 process.
[140] There is also no dispute between the parties that the following information formed part of the common general knowledge of the worker skilled in the art at the relevant date. During the minting process, the electroplated blanks are struck by the dies with a significant force to form the design or impression on the blanks. The formation of the design during minting results in both the core and the plated surface to be deformed. Consequently, the steel core must be sufficiently soft and ductile to be deformed during minting. As well, the steel must be sufficiently soft so as not to cause undue wear on the dies. To ensure proper metal flow and to prevent undue wear on the dies, the hardness of the steel must be less than about 65 on the Rockwell 30T scale and preferably less than 50 on that scale. To obtain the requisite degree of softness, the steel cores must be annealed.
[141] It was also well known that the melting point of zinc is less than the temperature required to anneal steel. A skilled person would recognize that if an intermediate layer of zinc was applied to improve the adhesion of the copper to the steel, a subsequent annealing of the steel would cause the zinc to melt and ruin the copper layer.
[142] The only question is whether a skilled person reading the '803 patent, in the absence of any direction in the patent that the annealing step may occur before the electroplating step, would be led directly and without difficulty to the conclusion that the annealing step must be carried out before electroplating when an intermediate layer of zinc is contemplated. When this question was put to Dr. Jonas, he testified that a skilled person could opt to punch the cores from pre-annealed steel strip. However, he agreed that where cores punched from hard steel strip is the starting material, the skilled person would anneal the steel cores before electroplating. As noted earlier, Dr. Risebrough and Dr. Schlessinger reached the same conclusion.
[143] Dr. Jonas also expressed the view in his report that since the '803 patent is primarly concerned with metallurgical bonding, the '073 and '803 are two distinct patents. I do not find this assertion to be persuasive. As stated earlier, the patent claims the process and product with and without a metallurgical bond.
[144] I also wish to add that in my view the opinions expressed by the RCM's experts do not constitute an exercise of hindsight nor are they based on a selection of options flowing from the prior art. Their opinions are grounded on information found within the four corners of the '803 patent and the common general knowledge of the person skilled in the art.
[145] For these reasons, I find that a skilled person reading the '803 patent and equipped with the common general knowledge would have been led directly and without difficulty to the process claimed in the '073 patent. I, therefore, conclude that the '073 patent is invalid. Having reached this conclusion, it is not necessary to consider the RCM's arguments regarding anticipation.
Utility, Claims Broader than What the Inventors Invented, the Patent Specification is Insufficient, and Ambiguity
[146] The RCM advanced a host of arguments under these allegations of invalidity. In many instances, the factual assertions underpinning the specific arguments overlap. Apart from vigorously asserting the utility of the patent in general terms, Westaim did not respond to these other allegations of invalidity. Instead, Westaim simply maintains that the RCM failed to discharge the burden of proof of invalidity. Two of the RCM's arguments, in particular, require additional comment.
[147] The RCM submits that claim 2 is invalid because it does provide a limitation on the type steel and not all steels are capable of being annealed to a hardness of less than 65 on the Rockwell 30T scale.
[148] The RCM relies on the following statement of Pigeon J. in the Supreme Court of Canada decision in Monsanto Co. v. Commissioner of Patents (1979), 42 CPR (2d) at 179:
If the inventors have claimed more than what they have invented and included substances which are void of utility, their claims will be open to attack. But in order to succeed, such attack will have to be supported by evidence of lack of utility.
[149] The RCM also relies on the Privy Council decision in Minerals Separation North American Corporation v. Noranda Mines Ltd. (1952), 15 CPR 133 at 144 where Lord Reid held that if "the scope of a claim includes some method which is useless, the claim cannot be saved by showing that no skilled person would ever try to use that method".
[150] Dr. Jonas testified that you "could not", or "probably not" anneal tool steels to less than 65 on the Rockwell 30T scale. At another point during his cross-examination, he stated that not all steels could be softened to less than 65 Rockwell 30T. Given that the steel used for the cores must be capable of being annealed to a hardness of less than 65 on the Rockwell 30T scale, this evidence alone demonstrates that claim 2 contains subject matter that is lacking in utility and is, therefore, invalid.
[151] The RCM also submits that claim 4 is invalid on the basis that it is broader than what the inventors invented. The RCM argues that the inventors never tested or used interstitial free steels having a carbon content of 0.005% by weight although these steels are claimed. The RCM maintains that not only were interstitial-free steels not available in Canada at the material time, Westaim's own evidence discloses that the inventors only tested steel with carbon content as low as 0.008%.
[152] Dr. Jonas described the range of steels found in claim 4 as corresponding to " 'interstitial-free' (about .003% C) and type I 'enameling'(up to 0.008% C) steels, at the ultra low carbon end of the composition scale, running up to carbon levels of .05 to .10% C in conventional 'mild'steels".
[153] Dr. Jonas explained that the "conventional steels" used throughout the 60's, 70's and continuing today, are those in the range of 0.05 to 0.1 % carbon by weight. These steels are also referred to as "mild" or "low carbon" steels.
[154] In the late 70's, steels with lower carbon contents began to become available, albeit at a higher cost. This category of "ultra low steels" consists of two groups. First, there are the "type I porcelain enamelling steels"which are prepared in an "open coil decarburisation" process. These steels were being manufactured by Dofasco in Hamilton beginning around 1980. Their carbon level is given as less than 0.008%.
[155] Second, there are the "interstitial-free steels", prepared by a process of vacuum de-gassing. According to Dr. Jonas, these steels "were developed somewhat later than the type I enamelling steels and became available commercially at even lower carbon levels, as low as 0.003%.
[156] Dr. Jonas also points out that the choice of steel for the '073 patent is critical. The cooling rate has a major effect on the hardness of conventional steels (0.05 to 0.1%) but does not effect the hardness of the ultra low carbon steels to a significant extent.
[157] Contrary to the assertions of the RCM, the '073 patent does not claim the use of interstitial-free steels. The patent states that "the steel may have a carbon content in the range of from about 0.005 to about 0.1% by weight". The patent then goes on to describe the results of various tests to determine the hardness of steel blanks of varying carbon content after slow-cooling and water-quenching. The results illustrate the point that steels in the higher carbon range will require slow-cooling to achieve the desired hardness while the ultra low carbon steels will achieve the desired hardness easily in a quenching operation.
[158] Although it is evident that the inventors did not test steels having a carbon content as low as 0.005% by weight, from the evidence of Dr. Jonas and the test results outlined in the patent, however, it is clear that the inventors had every reason to believe that the invention would work, indeed would work better, at lower carbon levels. Where the carbon content of the steel is less than about 0.01 %, even rapid cooling does not have a significant effect on the hardness of the steel because the amount of carbon is not sufficient to cause an appreciable hardening effect. It is the higher end of the carbon content range for the steel which would cause problems. For these reasons, I reject this argument.
Conclusion
[159] For these reasons, Westaim's action is dismissed and the '073 patent is declared invalid. Costs are awarded to the RCM as the successful party in the action. There will be no costs in favour of the Attorney General.
"Dolores M. Hansen"
J.F.C.C.
EDMONTON, Alberta
November 22, 2002.
FEDERAL COURT OF CANADA
TRIAL DIVISION
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-453-98
STYLE OF CAUSE: WESTAIM CORPORATION
Plaintiff
-and-
ROYAL CANADIAN MINT
Defendant
and between:
ROYAL CANADIAN MINT and
THE ATTORNEY GENERAL OF CANADA
Plaintiffs by Counterclaim
-and-
WESTAIM CORPORATION
Defendants by Counterclaim
PLACE OF HEARING: EDMONTON, Alberta
DATES OF HEARING: April 30, 2001 - May 15, 2001
REASONS FOR ORDER OF HANSEN, J
DATED: November 22, 2002
APPEARANCES:
Mr. Roger Hughes
Ms. Barbara Murchie FOR PLAINTIFF
Mr. Robert McFarlane
Mr. Andrew McIntosh FOR DEFENDANT
SOLICITORS OF RECORD:
Sim, Hughes, Ashton & McKay
Toronto, Ontario FOR PLAINTIFF
Bereskin & Parr
Toronto, Ontario FOR DEFENDANT
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