Dockets:
T-2231-12
T-2232-12
T-2233-12
Citation: 2014 FC 80
Ottawa, Ontario, January 24, 2014
PRESENT: The Honourable Mr. Justice Beaudry
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BETWEEN:
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THE REGENTS OF THE UNIVERSITY OF CALIFORNIA
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Applicant
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and
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THE COMMISSIONER OF PATENTS
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Respondent
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REASONS FOR JUDGMENT AND JUDGMENT
[1]
This is an application for judicial review
pursuant to section 18.1 of the Federal Courts Act, RSC 1985, c F-7, of
a decision by the Commissioner of Patents [the Commissioner] dated November 15,
2012 in the course of patent conflict proceedings under section 43 of the
Patent Act RSC 1985, c P-4, as it read prior to October 1, 1989 [the Act].
[2]
For the following reasons, the
application for judicial review will be dismissed.
Background and
Facts
[3]
The Applicant filed three patent applications
over 30 years which are each the subject of Court files T-2231-12, T-2232-12,
and T-2233-12, respectively. Each of these patent applications is involved in
the conflict proceeding along with 7 other patent applications.
[4]
Under the pre-October 1989 system, when two or
more patent applications dealt with very similar subject matter the
Commissioner would initiate a conflict proceeding pursuant to section 43 of the
Act.
[5]
The conflict procedure is explained by Justice
Hughes in Mycogen Plant Science Inc v Bayer Bioscience NV, 2010 FC 124
at para 9:
9 Essentially the conflict process
began when the Patent Office examiners perceived that there were two or more
applications pending before the Office that appeared to be directed to the same
subject matter. Under the pre-October 1, 1989 system all patent applications
were confidential and not available to the public. That remains the case with
the applications at issue here. The Patent Office would select claims from the
applications that appeared best to cover the subject matter common to all
applications, or even draft such claims. These common claims would be presented
to each of the applicants who could choose to remain in the conflict
proceedings by including some or all of these claims in their application if
they were not there already. The applicants were then invited to submit
affidavits setting out facts that would establish the date of invention by
their named inventors. Some would choose to rely only on the filing date of the
application in Canada or a foreign country if the Canadian application claimed
priority from such application. When all evidence was in, the Commissioner of
Patents would review the evidence and make a determination as to which
inventors had first made the invention as described in the subject matter of
the conflict claims. Sometimes some inventors were first in respect of some of
the claims and other inventors in respect of other claims. The claims would be
awarded by the Commissioner to the application of the first inventor of each
claim at issue and all the applications would proceed to final examination.
However any party to the conflict could, after receipt of the Commissioner's
decision, if dissatisfied, commence an action in the Federal Court for a
re-determination as to first to invent and consequent award of claims. This is
not an appeal nor a judicial review but an action in which a fresh
determination is made. In such an action redrafted claims (so-called substitute
claims) could be proposed for resolution in the conflict. The Federal Court
action would proceed as any other action and would be subject to appeal in the
usual way.
[6]
Conflict applications are not available to the
public and details of the prosecution of each conflicting application are not
discussed with, or divulged to other parties to the conflict.
[7]
The steps of a conflict proceeding are set out
in section 43 of the Act:
- s. 43(1): identification of a conflict
between two or more pending applications, i.e. each of the applications
contains one or more claims defining substantially the same invention, or one
of the applications contains one or more claims defining the invention
disclosed in one of the other applications;
- s. 43(2): notification of the conflict to
the applicants together with a copy of the conflicting claims, and giving them
an opportunity to add the conflicting claims or similar claims to their
applications;
- s. 43(3): sending a preliminary notice of
conflict to the applicants who have completed their applications according to
subsection (2);
- s. 43(4): invitation to the applicants to
avoid the conflict by amending or cancelling conflicting claim(s), or by
submitting prior art to the Commissioner, whereupon the Commissioner will
re-examine the applications and decide if the subject matter of the conflicting
claims is patentable;
- s. 43(5): sending a formal declaration of
conflict once the subject matter has been found to be patentable and applicants
have elected to keep the conflicting claims in their applications. The
applicants participating in the conflict are then required to submit an
affidavit of the record of the invention, to establish the date upon which they
invented the subject matter defined by the conflicting claim(s);
- ss. 43(6) and (7): examination of affidavits
by the Commissioner and communication to the applicants of the Commissioner’s
decision regarding which applicant was the first to invent;
- s. 43(8): rejection or allowance of the
claim(s) in conflict in accordance with the Commissioner’s decision, unless one
of the applicants commences proceedings in the Federal Court to determine the
applicants’ rights.
[8]
The Commissioner, pursuant to sections 43(3) and
43(4) of the Act, notified the Applicant of the ongoing conflict claims
and invited the Applicant to submit prior art which may cause the conflicting
claims to be unpatentable in any of the applications in conflict. Sections
27(1) and 61(1) set out the requirements for patentability with respect to
prior art.
[9]
The Applicant responded with its submissions to
the Commissioner. The submissions included prior art as well as a discussion of
the patentability of certain conflict claims included in the conflict
proceedings.
[10]
The Applicant submitted that:
i)
prior art published more than two years before a
patent application was filed should be cited against certain claims and
applicants;
ii)
prior art published less than two years before a
patent application was filed, but before the priority date of the patent
applications, should also be cited against certain claims and applicants;
iii)
all categories of prior art should be assessed
both with respect to novelty and obviousness of the subject matter of the
conflict claims; and
[11]
On November 15, 2012, the Commissioner sent the
applicant a letter [the letter] in response to the Applicant’s submissions.
This letter is the subject of this judicial review.
[12]
In the letter, the Patent Examiner,
writing for the Commissioner, explained that the documents submitted by the
Applicant pursuant to section 43(4) of the Act and subject to section
27(1)(b) of the Act (i.e. published more than two years prior to the
filing dates of the applications in conflict) had been considered.
[13]
The Examiner noted in the letter that documents
subject to the provisions of section 27(1)(a) of the Act (i.e. published
less than two years prior to the filing dates) have not yet been considered as
this requires knowledge of the date of invention for the contested claims.
[14]
The Examiner further explained that issues
related to the sufficiency of disclosure can only be addressed after the
submission of affidavits pursuant to section 43(5) of the Act;
[15]
Finally, the Examiner informed the
Applicant that he is given six months from the date of the letter to file in
the Patent Office an affidavit of the record of the invention as required by
section 43(5) of the Act.
[16]
The judicial reviews in T-2231-12, T-2232-12 and
T-2233-12 were filed on December 14, 2012. The files were consolidated on April
11, 2013 by order of Prothonotary Morneau with T-2231-12 serving as the primary
Court file.
[17]
On May 13, 2013, the Respondent filed a Motion
to dismiss the application for judicial review pursuant to section 18.5 of the Federal
Courts Act.
Relevant
Legislation
[18]
The relevant sections of the Act are
reproduced as Annex A at the end of this judgment.
Standard of
Review
[19]
In Dunsmuir v New Brunswick, 2008 SCC 9
at para 54 the majority of the Supreme Court instructed that: “…Deference will
usually result where a tribunal interpreting or applying its own statute or
statutes closely connected to its function, with which it will have particular
familiarity”. This principle was reiterated in Alberta (Information and
Privacy Commissioner) v Alberta Teachers’ Association, 2011 SCC 61 at paras
30, 39 and applies to the decision in question. As the Commissioner is here
applying his home statute, deference is warranted and the applicable standard
of review is that of reasonableness.
[20]
When assessing a decision on the standard of
reasonableness, a reviewing Court will be concerned with “the existence of
justification, transparency and intelligibility within the decision-making
process” as well as “whether the decision falls within a range of possible,
acceptable outcomes which are defensible in respect of the facts and law” (Dunsmuir
at para 47). On the other hand, questions of procedural fairness are owed no
deference and are reviewable on the standard of correctness (Canada
(Minister of Citizenship and Immigration) v Khosa, 2009 SCC 12 at para
43; Sketchley v Canada (Attorney General), 2005 FCA 404 at para
53).
Applicant’s
Arguments
[21]
The Applicant argues that the Commissioner
incorrectly refused to fully assess and rule on the patentability of the
subject matter of the conflict claims before requiring that the patent
applicant submit evidence to demonstrate when he invented the subject matter.
Specifically, the Commissioner failed to review the prior art published less
than two years before the filing date, but before the priority date of the
patent applications, as well as the Applicant’s submissions on the issue of
disclosure.
[22]
The Applicant disagrees with the Commissioner’s
position in his November 15, 2012 letter that he is incapable of citing
references published less than two years before the filing date but before the
priority date of a patent application because he is unaware of the date of
invention for a given conflict claim in a given patent application. The
Applicant suggests that since the Commissioner is aware of the priority date
for a given conflict claim in a given patent application, he can presume that
the date of invention is at least as early as the priority date, until an
applicant asserts an earlier date of invention. The Commissioner is therefore
capable of citing such “less than two year” references at this time.
[23]
The Applicant suggests that section 41 of the Act
can be applied to allow the applicant to “swear back” to establish a date of
invention for the purposes of section 27(1)(a) (see para 105, Applicant’s
Memorandum of Fact and Law).
[24]
The Applicant further submits that the
Commissioner erred when he ruled that disclosure issues would not be assessed
at this time, but could be determined at a later stage in the conflict
proceeding. While the Commissioner alleges that the remaining issues raised in
the Applicant’s submissions can be reviewed at a later stage of the conflict,
no such provision is found in the Act, the Manual of Patent Office
Procedure, or the Handbook of Patent Examination. This results in the unfair
situation where if an applicant loses the conflict to another applicant who is
subsequently determined not to be entitled to a patent, for the reasons raised
in the submissions, the deserving applicant will not have any opportunity to
correct the error, other than asking the Federal Court to start the conflict
proceeding all over again.
[25]
The Commissioner’s refusal to complete a full
patentability analysis as required by section 43(5) of the Act creates
unnecessary procedural and substantive problems as the conflict proceeding will
progress, thereby frustrating the Applicant’s desire to bring an end to what is
already a 30-year patent application process. The Applicant argues that
performing a more complete patentability analysis has the potential to greatly
simplify and streamline the conflict proceedings and provides examples to that
effect.
[26]
The Applicant also alleges that the
Commissioner’s erroneous refusal to fully review the Applicant’s submissions
violates their rights of procedural fairness. Under the Act there is a
duty of procedural fairness imposed on the Commissioner to decide if the
subject matter of the conflict claims is patentable before requiring that the
patent applicant submit evidence to show when he invented the subject matter.
At the section 43(4) stage of a conflict proceeding the Commissioner is
required to invite submissions on patentability, to evaluate those submissions,
and to decide if the subject matter of the conflict claims is patentable. The
section 43(5) stage will only begin once the Commissioner has completed his
section 43(4) analysis and has decided that the subject matter is patentable (Merck
& Co v Apotex Inc, 2010 FC 1265 at para 553). The Applicant
asserts that this interpretation of requiring the patentability analysis to
precede the question of first to invent is supported by the case law (Tenneco
Chemicals Inc v Hooker Chemical Corp, [1967] 1 Ex CR 188 at para 6 [Tenneco];
General Tire & Rubber Co v Dominion Rubber Co, [1996] Ex CR 1164 at
paras 45, 46 [General Tire]; Dow Chemical Co v Richardson Co et al,
[1970] Ex CJ No 4 at para 10 [Dow Chemical]).
[27]
The Applicant submits that had the Commissioner
fully assessed and established the patentability of the subject matter of the
conflict claims, the scope of the conflict proceeding would be reduced. This
simplified conflict proceeding would clarify, inform, and facilitate the
decision that the Applicant must make about whether to continue with the
conflict proceeding and to what extent. This streamlined process has been lost.
[28]
The Applicant further asserts that since the
Commissioner has failed to rule on patentability, he will be forced to guess at
what the Commissioner will ultimately determine to be patentable and will
therefore lose the right to tailor evidence towards patentable subject matter
and will lose its right to know the case it has to meet to comply with the
subsection 43(5) request.
[29]
The Commissioner’s error in not undertaking a
full patentability analysis creates an untenable situation that erodes the
rights of the Applicant to an intelligible process and risks protracted
litigation. By proceeding with inappropriate conflict claims in violation of
his legal obligations under subsections 43(4) and (5), the Commissioner is
effectively transferring this conflict to the Federal Court by way of the de
novo determination provided for under subsection 43(8) of the Act.
This will result in a loss of the Commissioner’s particular experience and
expertise in assessing the patentability of conflict claims, which is
particularly relevant in the current context of complex biotechnological
innovations.
[30]
The Applicant requests that the Court quash the
Commissioner’s decision and order the Commissioner to review all of the
submissions on patentability and decide whether the subject matter of the
conflict claims is patentable before requesting that the patent Applicant
submit affidavit evidence to demonstrate the date of invention.
Respondent’s
Arguments
[31]
The Respondent underlines that the
judicial review proceedings were commenced prematurely as the conflict
proceedings process has not been completed and that the judicial review is
therefore barred by virtue of section 18.5 of the Federal Courts Act,
since the Applicant is entitled to a de novo appeal under section
43(8) of the Act (Turmel c Canada (Canadian Radio-Television and
Telecommunications Commission), 2008 FCA 405 at para 12).
[32]
The Applicant underscores that he would lose his
rights if the Commissioner were to proceed with determination of first
inventorship and he would be limited to the appeal available under section
43(8) of the Act. This is not accurate, since the Applicant may submit
substituted claims in a de novo appeal (Mycogen Plant Science Inc v
Bayer Bioscience NV, 2009 FC 1013 at para 9).
[33]
The Respondent submits that the Applicant’s
argument that the conflict proceedings may potentially be simplified by a full
patentability analysis is at best, opinionated and at worst, a mere conjecture,
since the Applicant is only aware of its own submission in the conflict
application. Therefore, the examples provided by the Applicant are pure
speculations.
[34]
Based on the Commissioner’s patentability
assessment in view of prior art submitted, several claims have been removed.
Section 27(1)(a) of the Act however requires knowledge of the date of
invention which in the case of conflict proceedings can only be ascertained
after the stage of affidavit submissions under section 43(5) of the Act.
Any further reduction of the number of claims in conflict can therefore only be
made after the affidavits have been submitted. Contrary to the Applicant’s
submission, the Commissioner cannot “presume the date of invention”; the basis
of conflict proceedings is to determine the inventorship of claims. In seeking
this judicial review, the Applicant is attempting to short circuit the conflict
proceeding by having the patentability assessment done in advance of the
determination of date of invention.
Analysis
[35]
The Commissioner’s letter of November 15, 2012
included a sufficient analysis of the submissions made by the Applicant in its
response. The Commissioner examined prior art published more than two years
before the patent applications in accordance with section 27(1)(b) of the Act
which resulted in a substantial reduction in the number of conflict
claims on the basis of patentability. The Commissioner noted that the
patentability analysis would necessarily be limited, since “[u]ntil first
inventors and dates of invention can be established for all claims of the
present conflict, prior disclosure or use may only be cited on the basis of documents
applicable under Section 27(1)(b) of the Patent Act as it read
immediately prior to October 1, 1989.”
[36]
The Commissioner’s interpretation of section
27(1)(a) as requiring that a date of invention be established before this
category of prior art can be considered is a reasonable one. The Court agrees
with the Respondent that it would be unreasonable to require the Commissioner
to “presume the date of invention”. Identifying the date of invention is at the
very core of conflict proceedings. As observed by Justice Snider in Sanofi-Aventis
Canada Inc v Apotex Inc, 2009 FC 676 at paras 283, 286, in the context of a
conflict proceeding, the Commissioner’s “very job was to identify the date of
invention…” and the “question of the invention date is not a minor detail”.
[37]
The cases cited by the Applicant, Tenneco,
General Tire and Dow Chemical, support a finding that the
Commissioner’s decision was reasonable and that the procedure provided for
under the Act was properly followed.
[38]
The Commissioner does not yet have information
by which he would be satisfied, based on “less than two year” citations, that
any of the subject matter would be unpatentable, since the date of invention
has not been assessed. By asking for affidavits attesting to the date of
invention, the Commissioner wants to gather all of the information that he
needs in order to complete the patentability analysis and therefore satisfy his
obligations under sections 43(4) and 43(5) of the Act.
[39]
The Court also agrees with the Respondent
that the Applicant’s allegation that conducting the patentability analysis in
the way suggested by the Applicant will result in simplification and expediency
is not sufficiently grounded in the facts. Since the conflict proceedings and
materials submitted in support of conflict claims are kept confidential, there
is no way of predicting the Commissioner’s conclusions on patentability with
any certainty.
[40]
The Commissioner has not improperly taken away
any of the Applicant’s rights in the conflict proceedings process. Both Chapter
18 of the Manual of Patent Office Practice, as it read in January 1990 and
chapter 18 of the Handbook of Patent Examination, as it read in February 1993
provide that the rejection of a conflict claim on the basis of it not being
patentable can be challenged. The Applicant has recourse to a de novo
appeal before this Court, as provided for by section 43(8) of the Act.
Furthermore, conflict proceedings do not dispose of the matter of
patentability, but rather only address patentability within the context of
determining the question of first to invent (Branchflower v Akshun
Manufacturing Co, [1965] CCS No 1305).
[41]
The Court is of the view that the Applicant has
failed to demonstrate a breach of procedural fairness here. There is no
evidence also that the Applicant has been treated differently than the other
applicants in the conflicting proceedings.
[42]
As the decision of the Commissioner was
reasonable, this Court’s intervention is not justified.
[43]
It is not therefore necessary for the Court
to address the Respondent's motion to strike the application, as the dismissal
of the judicial review is sufficient to dispose of the present matter.
[44]
The Court shall grant the Applicant’s request
for an extension for the filing of affidavit evidence pursuant to section 43(5)
of the Act in order for the Applicant to have the benefit
of the six-month deadline imposed by the Commissioner in his November 15, 2012
letter.
[45]
The parties have indicated to the Court that
they are not seeking costs.
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