I OVERVIEW

As a result of recent developments in patent legislation, jurisprudence and improved court procedures designed to facilitate fast and effective litigation, Canada has been receiving international attention from patent owners and practitioners.

Canadian courts have recognised the need to create an environment for timely and efficient disposition of civil litigation. Over the past several years, the Federal Court, where most patent proceedings are commenced, has implemented a number of procedures to permit litigants to achieve quick and cost-effective results. This has included implementing court procedures that assist in having matters progress to trial in a timely and efficient manner, including proactive case management and imposing limitations on the discovery process. Additionally, the Court has also adopted new summary trial provisions to facilitate the summary disposition of proceedings on issues that do not require a full trial on the merits.

There are also several other features of the legal system in Canada that make it an attractive jurisdiction for patent litigation, including:

  • a the availability of flexible remedies, including damages, disgorgement of a defendant’s profits and injunctive relief;
  • b costs of the proceeding, namely a percentage of lawyers’ fees and reimbursement of all reasonable disbursements (e.g., expert fees), being typically awarded to the successful party;
  • c because the Federal Court has national jurisdiction, issues such as forum shopping typically do not arise in Canada;
  • d unlike other jurisdictions such as the United States, there is no doctrine of file wrapper estoppel in Canada; and
  • e in the Federal Court, jury trials are not available and as such patent actions are decided by the trial judge alone.

II TYPES OF PATENT

The Canadian Patent Act provides the ability to obtain a patent, which provides protection for an invention across Canada.2 Canada does not have other forms of protection such as regional patents, utility models or short-term patents.

A patent is obtained by filing a patent application with the Canadian Intellectual Property Office (CIPO). The patent application is examined by CIPO, and if it is determined that the requirements of the Act have been met, the application issues to patent.

A Canadian patent has a term of 20 years from the filing date.3 Historically, Canada did not have a patent term extension regime. However, as discussed in greater detail below, Canada has recently implemented a certificate of supplementary protection (CSP) regime for new pharmaceutical products that provides a sui generis term of protection for up to two years beyond the expiry of relevant patent.4

III PROCEDURE IN PATENT ENFORCEMENT AND INVALIDITY ACTIONS

i Patent proceedings before Canadian courts
Canadian court systems

There are two separate court systems in Canada: a Federal Court system with national jurisdiction and a provincial court system in each of the country’s 13 provinces and territories. A patentee can commence an action for patent infringement in either the Federal Court or the appropriate provincial or territorial court.5 However, most patent infringement actions are brought in the Federal Court because it has national jurisdiction and is more experienced with patent matters. Additionally, the Federal Court has exclusive jurisdiction to expunge a patent (invalidate a patent in rem).6 Thus, a patent expungement proceeding can only be brought in the Federal Court.7

Court procedure in Canada

Pleadings

An action is commenced by the plaintiff filing a statement of claim, setting out the material facts that support the action and the relief claimed. In response, the defendant must file a statement of defence. A reply may be filed by the plaintiff in response to the statement of defence. In the statement of defence and reply, the party must admit or deny the allegations set out by the other party and plead any additional relevant material facts upon which the party intends to rely.

The pleadings can also include a counterclaim by the defendant (e.g., a claim seeking to expunge the patent), a cross-claim between defendants or a third-party claim by the defendant against a party not previously named in the proceeding.

Discovery

Evidence relevant to patent proceeding is obtained through the discovery process. The first step is documentary discovery, wherein each party must list all relevant documents in its possession, power or control. All non-privileged documents must be produced to all adverse parties.

After documentary discovery, each party is permitted to conduct an oral examination of a representative of each adverse party. The representative must answer any relevant and proper question based upon the information of the party. In the Federal Court, a party that is adverse to the patentee is also permitted to examine the inventors of the patent.

Trial

All patent actions in Canada are heard and decided by a judge alone.

The plaintiff bears the onus of proving infringement. However, a patent is prima facie valid so the defendant bears the onus of demonstrating invalidity. The standard of proof in patent proceedings in Canada is a balance of probabilities.

Evidence is submitted at trial by testimony of witnesses, by the admission of documents or by reading in the testimony of an adverse party on oral discovery. Expert evidence is admissible in a patent proceeding in Canada provided that the party who calls the expert produces an expert report setting out the expert’s evidence in advance of trial.

Interim and interlocutory injunctions and stays

In Canada, interim or interlocutory injunctions are available.8 A tripartite test must be satisfied to obtain such an injunction, namely:

  • a Is there a serious question to be tried on a preliminary assessment of the merits of the case?
  • b Will the plaintiff suffer irreparable harm if the injunction is refused?
  • c Considering all of the circumstances, does the balance of convenience favour the granting of an injunction?9

The second element of the test, namely irreparable harm, can be difficult to establish in patent proceedings given that ‘irreparable’ harm is harm that cannot be quantified in monetary terms or which cannot be cured.10

Stays of proceedings applications in Canada are subject to the same tripartite test as applicable to interim or interlocutory injunctions.11

Standing Patent infringement proceedings

In Canada, a patent infringement action can be commenced by the patentee or any person ‘claiming under the patentee’.12 Persons ‘claiming under the patentee’ has been interpreted broadly as anyone that can trace an express or implied interest under the patent to the patentee,13 which includes exclusive, non-exclusive and implied licensees as well as distributors.14

Patent invalidity proceedings

In a patent infringement action, a defendant will typically attack the validity of the patent as part of its defence, and if the action is in the Federal Court, the defendant will also typically counterclaim seeking to expunge the patent.

The Patent Act also provides the ability for any ‘interested party’ to commence an action to expunge a patent in the Federal Court.15 The threshold to qualify as an ‘interested party’ is low as the term has been held to have a broad definition, including anyone in competition with the patentee or who has received a cease-and-desist letter from the patentee.16

Limitation periods

In Canada, remedies are only available for infringing activities that occur within a six-year limitation period prior to the commencement of the action.17

Timing and costs of patent proceedings

Patent proceedings in Canadian courts typically take between two and four years from the commencement of the proceeding to judgment, and cost C$0.5 million to C$1 million or more depending on the complexity and number of issues in the proceeding.

ii Threats of patent proceedings

The Patent Act does not include any provisions that limit how a patentee may enforce its patent (other than the abuse provisions discussed below). That said, provisions contained in the Competition Act18 and the unfair competition provisions in the Trade-marks Act19 can be used to protect against unfair competition-type behaviour by a patent owner, including making unjustified allegations of patent infringement to the public or third parties, such as to customers of a competitor.

iii Post-grant proceedings before the Canadian Patent Office
Re-examination

Pursuant the Patent Act, any person, including the patentee, may request a re-examination of an issued patent based upon prior art consisting of patents, published applications and printed publications. A re-examination has two stages.20 First, the re-examination board determines whether a substantial new question of patentability affecting any claim of the patent in issue has been raised in the re-examination request. If it is decided that a substantial new question has not been raised, the board will notify the requesting party, and the board’s decision is final and is not subject to appeal or review by a court.21

If the board decides that the re-examination request raises a substantial new question of patentability, the patentee is notified and has an opportunity to make submissions, including proposing amendments to the claims or new claims for the patent (provided the proposed amendment or new claim does not enlarge the scope of the patent).22

The re-examination board then renders a decision as to patentability of the claims in issue.23 The board has the power to cancel any unpatentable claim or incorporate in the patent any proposed amended or new claim submitted by the patentee.24 The board’s decision can be appealed to the Federal Court.25 A third party requesting re-examination has no right to be part of the second stage of the re-examination process or to appeal the re-examination board’s decision.26

Abuse proceedings

At any time three years after the grant of the patent, any person interested may apply to the Commissioner of Patents alleging that there has been abuse of the exclusive rights granted by the patent, and request relief.27 The remedies available in such a proceeding include the grant of a compulsory licence or revocation of the patent.28 The exclusive rights under a patent are deemed to be abused in certain circumstances enumerated in the Patent Act, although abuse may not be restricted to only those grounds.29 The abuse provisions have not been extensively used in Canada.

IV SUBSTANTIVE LAW

i Patent construction

In Canada, the scope of the exclusive rights granted by a patent is defined by the claims.30 The claims of a Canadian patent are construed ‘purposively’, not in a purely literal fashion.31 ‘Purposive’ construction involves identification of the particular words or phrases in the claims that describe what the inventor considered to be the ‘essential’ elements of the invention.32

A Canadian patent is construed based upon a review of the whole patent specification through the eyes of a ‘person skilled in the art’.33 The ‘person skilled in the art’ may include a combination of the collective expertise of a number of skilled workers, scientists and technicians.34

The doctrine of file wrapper estoppel does not apply in Canada as the Supreme Court of Canada has expressly stated that that Canadian or foreign file wrappers are inadmissible to construe a Canadian patent.35

ii Infringement
Direct infringement

The Patent Act does not define infringement, but does provide the patentee with ‘the exclusive right, privilege and liberty of making, constructing and using the invention and selling it to others to be used’.36 Canadian courts have held that any act, direct or indirect, that interferes in whole or in part with the full enjoyment of the exclusive rights granted to the patentee during the term of the patent constitutes an infringement.37

There is no infringement in Canada if an ‘essential’ element of the patent claim is different or omitted. However, there may be infringement if non-essential claim elements are substituted or omitted. For infringement to be established in circumstances where a variant from the claimed invention is incorporated, it must be shown that:

  • a the variant has no material effect upon the way the invention works, namely, the variant performs substantially the same function, in substantially the same way, to obtain substantially the same result;
  • b at the date of publication of the patent, it would have been obvious to a person skilled in the art that such a variant would have no material effect on the way the invention worked; and
  • c that a person skilled in the art would have understood from the language of the claim that the patentee did not intend that strict compliance was an essential requirement of the invention such that the immaterial variant of interest was not intended to be excluded from the claim.38
Inducing infringement (indirect infringement)

Although Canada does not have a doctrine of contributory infringement per se,39 a person may be liable for infringement for inducing or procuring another person to infringe the patent. Three elements are required to establish liability, namely:

  • a an actual act of infringement was completed by a direct infringer;
  • b the completed act of infringement was influenced by the alleged inducer, to the point where without such influence, infringement by the direct infringer would not otherwise have taken place; and
  • c the alleged inducer knowingly exercised the influence, such that the alleged inducer knew that the influence would result in the completion of the act of infringement.40
Director and officer liability

In Canada, officers and directors of a company are typically not personally liable for the company’s infringing activities. That said, personal liability can be established if a director or an officer engages in activities that constituted a deliberate, wilful and knowing pursuit of a course of conduct that was likely to constitute infringement or reflected an indifference to the risk of it.41 Canadian courts have stated that personal liability can be established when the behaviour of the officer or director is itself tortious or when the actions serve a personal interest rather than that of the corporation.42

iii Invalidity and other defences
Invalidity

Subject matter

Pursuant to the Patent Act, a patent may be granted for any ‘invention’, defined as ‘any new and useful art, process, machine, manufacture or composition of matter, or any new and useful improvement in any art, process, machine, manufacture or composition of matter’.43 Mere scientific principles or abstract theorems are not patentable.44 Although a mere discovery, for example a scientific observation, is not patentable, a new and useful application of a discovery is an invention.45

Novelty

As referenced above, the definition of ‘invention’ in the Patent Act requires the subject matter to be ‘new’ (referred to as ‘novelty’). When the scope of a patent claim encompasses subject matter within the relevant prior art, the claim is invalid as being ‘anticipated’. Pursuant to the Patent Act, a claimed invention is ‘new’ unless:

  • a the invention is disclosed in a Canadian patent application that has an earlier effective filing date (either the actual Canadian filing date46 or the convention priority date, if applicable);
  • b the invention was, more than one year before the Canadian filing date, disclosed by the applicant, or a person who obtained knowledge directly or indirectly from the applicant, in such a manner that it became available to the public in Canada or elsewhere; or
  • c the invention was, before the Canadian filing date (or the convention priority date, if applicable), disclosed by any third party in such a manner that it became available to the public in Canada or elsewhere.47

Anticipation can be based upon a prior publication, including a prior patent or patent application, as well as a prior public use or sale of the claimed invention. It is impermissible to rely upon multiple pieces of prior art (referred to as ‘mosaicing’) to establish lack of novelty.48

The legal test for lack of novelty is a rigorous one.49 Two requirements must be satisfied for a patent claim to be invalidated on the basis of anticipation, namely prior disclosure and enablement.50 For the ‘prior disclosure’ requirement, the prior art must disclose subject matter that, if performed, would necessarily result in the infringement of the patent. For the ‘enablement’ requirement, a person skilled in the art must be able to perform the invention, which may include trial and error experimentation.51

Obviousness

In Canada, a patent cannot be granted for subject matter that lacks inventive ingenuity (inventive step) or is ‘obvious’. In assessing ‘obviousness’, the Supreme Court of Canada has adopted the four-step approach of the House of Lords in the Windsurfing case,52 namely:

  • a identify the notional ‘person skilled in the art’ and the relevant common general knowledge of that person;
  • b identify the inventive concept of the claim in question or, if that cannot readily be done, construe it;
  • c identify what, if any, differences exist between the matter cited as forming part of the ‘state of the art’ and the inventive concept of the claim or the claim as construed; and
  • d viewed without any knowledge of the alleged invention as claimed, do those differences constitute steps that would have been obvious to the person skilled in the art or do they require any degree of invention?53

The Supreme Court of Canada has also stated that in the fourth step of the analysis for obviousness, an ‘obvious to try’ test may be appropriate, for example, in fields where advances are often won by experimentation.54 The Federal Court of Appeal has clarified that the mere possibility that something might turn up or is ‘worth a try’ is not sufficient to satisfy the ‘obvious to try’ test.55

Utility

The definition of ‘invention’ includes the requirement that the invention be ‘useful’, and thus it must have utility.56 The Patent Act does not prescribe the degree of usefulness required but Canadian courts have held that a scintilla of utility will suffice.

The Supreme Court of Canada has recently held that a single use related to the nature of the subject-matter as claimed is sufficient to satisfy the utility requirement.57 The Court also set out a two-step approach for assessing whether a patent discloses an invention with sufficient utility. First, the court must identify the subject-matter of the invention as claimed in the patent. Second, the court must ask whether that subject-matter is useful – namely, is it capable of a practical purpose (i.e., an actual result).58Additionally, utility of an invention must, as of the Canadian filing date, either be demonstrated or be soundly predicted based on the information and expertise available at that time.59 The doctrine of ‘sound prediction’ is typically used when a class of compounds are covered by the patent claims but only a few members within the class are shown to work in the patent disclosure or as of the Canadian filing date. To be able to rely upon a sound prediction of utility, a three-part test applies, namely:

  • a there must be a factual basis for the prediction;
  • b the inventor must have at the date of the patent application an articulable and sound line of reasoning from which the desired result can be inferred from the factual basis; and
  • c there must be proper disclosure.60

There is some uncertainty in the Canadian jurisprudence at the moment as to what the ‘proper disclosure’ requirement entails, and whether it requires the factual basis and sound line of reasoning to be disclosed in the patent specification.61

The Federal Court had developed a ‘promise doctrine’ for the measure of utility where, in the specification of the patent set out an explicit ‘promise’ of a specific result, utility was measured against that promise.62 However, the Supreme Court of Canada has recently stated that the ‘promise of the patent’ doctrine is not appropriate under Canadian law.63

Double patenting

‘Double patenting’ is not contained in the Patent Act but is a common law doctrine to prevent the improper extension or ‘evergreening’ of the term of a patent by a series of patents for the same invention.64 The doctrine is used in situations where the earlier patent is not citable as prior art for anticipation or obviousness.

The Canadian jurisprudence has recognised two categories of double patenting. The first category encompasses two patents that have identical or conterminous claims. The second category relates to where the claims are not identical or conterminous, but where the claims of the second patent are not patentably distinct from the first (commonly referred to as ‘obviousness double patenting’).65

Other validity attacks

In addition to novelty, obviousness, utility and double patenting, there are a number of other grounds upon which a Canadian patent can be invalidated, including sufficiency of the specification,66 ambiguity of the disclosure or of the claims,67 claims broader than the invention made or disclosed68 and incorrect payment of fees.69 A patent may also be invalidated if a ‘material’ allegation in the petition is untrue, or if the specification and drawings contain more or less than is necessary for obtaining the end for which they purport to be made, provided the omission or addition is wilfully made for the purpose of misleading.70

Other defences

Experimentation

It has been held in Canada that use of a patented invention for non-commercial experiments to determine if the patented article can be manufactured in accordance with the patent or improved upon does not constitute infringement.71

In addition, Section 55.2(1) of the Patent Act provides that it is not an infringement to make, construct, use or sell a patented invention solely for uses reasonably related to the development and submission of information required under any law of Canada or any other country that regulates the manufacture, construction, use or sale of the product.72

Prior acquisition or prior user rights

Section 56 of the Patent Act73 provides that any person who, before the ‘relevant date’,74 has purchased, constructed or acquired the subject matter defined by the claim of a patent, is permitted to use and sell to others the specific article, machine, manufacture or composition of matter so purchased, constructed or acquired, without being liable to the patentee. While this exception only applies to the ‘specific article, machine, manufacture or composition of matter’ previously purchased, constructed or acquired, the right to ‘use’ extends to any form of the invention, including the right to use and sell things produced using the article.75

Licence or exhaustion

A valid licence granted by the patentee to the defendant to engage in the acts alleged to infringe the patent is a complete defence to a patent infringement claim.76 However, a licence will not provide a defence for any activities that extend beyond the terms of the agreement.77

The sale of a patented article to a purchaser gives the purchaser an implied licence to use, sell or deal with the patented article as he or she pleases. Any restrictions that a patentee wishes to impose upon a purchaser must be brought to the attention of the purchaser when the patented article is acquired.78

Unfair competition

In Canada, the Competition Act79 regulates anticompetitive behaviour and has provisions that may impose limitations on the exercise of certain patent rights. The Federal Court has allowed allegations relating to violations of the Competition Act to be raised as a defence in patent infringement actions, provided there is a direct link or nexus between the alleged unlawful conduct and the patent right at issue in the action.80 A defendant or third party may also be able to assert causes of action against a patentee on the basis of alleged anticompetitive behaviour. To date, there have not been any cases in Canada where such a defence or cause of action has been successful at trial.81

V FINAL REMEDIES FOR INFRINGEMENT

i Monetary remedies

In Canada, an infringer of a patent is liable for any damages sustained by the patentee by reason of the infringement.82 Alternatively, a patentee may be permitted to elect an accounting of the defendant’s profits made as a result the infringing activity.83

Damages are calculated based on the principle of restoration, namely to restore the patentee to the position it would have been in had the infringement not occurred.84 The jurisprudence has established two measures of damages, namely the loss of the plaintiff’s profits or a reasonable royalty.85 In contrast, an accounting of the defendant’s profits is to be a measure of the value of the invention through a disgorgement of the profits made by the infringer in using the patent invention.86 However, an accounting of profits is a discretionary remedy and therefore is not granted as of right.87

A patentee is also entitled to ‘reasonable compensation’ for any damages sustained as a result of acts between the date the patent application became open to the inspection of the public until the grant of the patent that would have constituted an infringement if the patent had been granted.88 ‘Reasonable compensation’ is not the equivalent of ‘damages’, and thus does not include lost profits. While there may be other measures, ‘reasonable compensation’ includes a ‘reasonable royalty’.89

Generally speaking, both pre- and post-judgment interest is awarded on monetary awards by Canadian courts.

ii Punitive or exemplary damages

Punitive or exemplary damages are only awarded in Canada in exceptional circumstances, namely for high-handed, malicious, arbitrary or highly reprehensible conduct that departs to a marked degree from ordinary standards of decent behaviour.90 Knowingly infringing a patent by itself is typically insufficient for entitlement to punitive or exemplary damages.91

iii Permanent injunction and delivery up or destruction of infringing articles

Although a successful patentee is typically awarded a permanent injunction restraining the defendant from future infringing activities,92 as an equitable remedy it is subject to the discretion of the Court.93

In addition, an order that all infringing articles in the possession of the defendant be either delivered up or destroyed is typically granted in a successful patent infringement action.94

iv Costs

The successful litigant (plaintiff or defendant) is typically awarded its ‘costs’, which consists of a portion of its attorney’s fees and all reasonable disbursements. In exceptional circumstances, full or substantial indemnity for actual attorney’s fees may be awarded.

VI OTHER TYPES OF PATENT PROCEEDING

i Declaration of non-infringement

The Patent Act provides any person who has reasonable cause to believe that its activities in Canada might be alleged by a patentee to infringe a patent, with the ability to commence an action in the Federal Court for a declaration of non-infringement.95

ii Notice of compliance regulations for patented medicines96

In Canada, regulatory approval in the form of a Notice of Compliance (NOC) must be obtained before a drug can be marketed.97 Pursuant to the Patented Medicines Notice of Compliance (PMNOC) Regulations,98 a drug manufacturer who files a new drug submission or supplement thereto (a ‘first person’) may also submit to the Minister of Health a list of patents for inclusion on the Patent Register.99 To be eligible for listing on the Register, the patent must contain a claim for the medicinal ingredient, the formulation, the dosage form or the use of the medicinal ingredient.100 The list may include an expired patent but for which a CSP has taken effect.101 For each patent or CSP on the list, the first person must include a statement of entitlement to list: namely that the first person either owns the patent, has an exclusive licence to the patent or has obtained the consent of the owner to include the patent on the list.102

A ‘second person’ (typically a generic drug or biosimilar manufacturer) may file an abbreviated new drug submission that compares the new drug with a drug already marketed in Canada under an NOC (‘reference drug’). If the reference drug has patents listed on the Patent Register, the second person must, in its submission, indicate it has the consent of the first person, acknowledge that the NOC will not issue until the listed patent expires or assert in a ‘notice of allegation’ that:

  • a the statement of entitlement to list of the first person is false;
  • b the patent or CSP is invalid or void;
  • c the patent or CSP is ineligible for inclusion on the register;
  • d the patent or CSP would not be infringed by the second person;
  • e the patent or CSP has expired; or
  • f in the case of a CSP, the CSP cannot take effect.103

The first person has 45 days after being served with the notice of allegation to bring a proceeding in the Federal Court in relation to the notice of allegation. Historically, the proceeding was a summary application for an order prohibiting the Minister from issuing a NOC to the second person until after the expiration of the listed patent or patents. However, the PMNOC Regulations were recently amended104 to provide that the first person can bring an action for a declaration that the second person would infringe the patent or CSP.105 In response to the first person’s action, the second person may counterclaim for expungement of the patent or CSP, or for a declaration of non-infringement.106

The commencement of an action by a first person results in a statutory stay of up to 24 months preventing the Minister of Health from issuing the NOC to the second person until the resolution of the action.107 However, the first person may be liable to the second person for any loss suffered as a result of the delay in NOC issuance if the action is discontinued or dismissed, or a declaration of infringement is overturned on appeal.108 That said, the first person may renounce the statutory stay and thereby avoid such damages.109

iii Criminal provisions

There are no criminal provisions in Canada that pertain to infringement of a patent. The only criminal provisions contained in the Patent Act relate to:

  • a falsely marking or selling an article as patented;110
  • b making a false representation or tendering a false document for the purposes of the Patent Act;111 and
  • c failing to comply with the certain provisions under the Patent Act relating to patented medicines.112

VII APPEAL

The Federal Court and each provincial or territorial court system have their own appellate courts. An appeal to the Federal Court of Appeal is available as of right from any interlocutory or final order of the Federal Court. In some provincial court systems, leave is required to appeal interlocutory orders.

The Supreme Court of Canada hears appeals from the Federal Court of Appeal and provincial appellate courts. For patent proceedings, leave to appeal to the Supreme Court of Canada is required.

VIII THE YEAR IN REVIEW

i Patent proceedings before Canadian courts
Summary disposition of patent proceedings

Summary judgment is available in Canada to resolve proceedings lacking a genuine issue for trial or where the only genuine issue for trial is a question of law.113 However, courts in Canada have been reluctant to use this procedure to resolve patent proceedings, largely as a result of their complexity and the need for expert evidence.

Recently the Federal Courts Rules were amended to add a summary trial procedure in an effort to allow for the summary disposition of actions in a greater range of circumstances.114 The Federal Court’s recent decision in Cascade Corporation v. Kinshofer GmbH,115 in finding that the patent was not infringed, demonstrates how, in an appropriate case, the summary trial procedure can be used to dispose of a patent action.

The case turned on an issue of construction of one of the independent claims of Cascade’s Canadian Patent Number 2,587,065 – namely, whether the claim properly construed encompassed Kinshofer’s X-LOCK coupler.

The Court agreed that the cost of taking this matter to trial as a regular action could well exceed the any monetary award that would have accrued since Kinshofer’s impugned product had only recently appeared on the Canadian market. More importantly, the fact that the parties had worked together to reduce complexity and narrow the issues in this dispute to focus largely on the construction of a single element of the claim in issue, and had agreed to summary trial, strongly influenced the judge’s decision to dispose of the action by way of summary trial.

Threats of patent proceedings

Two recent decisions of the Federal Court have emphasised that statements made to third parties, such as customers, that a competitor has infringed a patent can give rise to liability if the patent is ultimately held invalid or not infringed, in particular pursuant to Section 7(a) of the Trade-marks Act, which provides that ‘no person shall make a false or misleading statement tending to discredit the business, goods or services of a competitor’.116

In E Mishan & Sons v. Supertek,117 the plaintiff had threatened legal action against Canadian Tire (a large retail store chain in Canada) if it ordered the defendant’s product. The defendant asserted that the plaintiff’s conduct was contrary to Section 7(a) of the Trade-marks Act. The Court concluded that the plaintiff had deliberately conducted itself so as to leave Canadian Tire with the impression that it would be sued by the plaintiff for patent infringement. The Court, having concluded that the patent in issue was invalid, also concluded that the plaintiff had made false and misleading statements contrary to Section 7(a). However, the Court also found that the defendant had not established that it suffered any damages as there was no evidence of a causal link between statements made by the plaintiff and the damages alleged to have been suffered by the defendant.

In Excalibre Oil Tools Ltd v. Advantage Products Inc,118 the plaintiff sent letters to the defendant’s customers, alleging that:

  • a the defendant’s competing products infringed the plaintiff’s patents;
  • b purchasers of the competing products were also liable for infringement; and
  • c the plaintiff aggressively protects its patent rights through litigation and, in some instances, threatening litigation.

The Court held the plaintiffs’ patents referenced in the letters were either invalid or not infringed. As a result, the Court found that the letters clearly contained false and misleading statements because the defendant’s products did not infringe any of the plaintiff’s patents referenced therein. Damages were also established as there was evidence connecting the plaintiff’s letters to customers’ decisions to stop purchasing the defendant’s products. As such, the Court held the plaintiff liable for making false and misleading statements contrary to Section 7(a) of the Trade-marks Act.

Patent agent privilege

Under Canadian law, communications between lawyers and their clients are protected by common law solicitor-client privilege and thus, cannot be compelled as evidence in legal proceedings. Historically, Canadian courts did not recognise privilege in communications with patent agents.119

In June 2016, amendments to Patent Act came into force introducing a new statutory privilege for patent agents. The statutory privilege applies to communications that are:

  • a between a registered Canadian patent agent and that individual’s client;
  • b intended to be confidential; and
  • c made for the purpose of seeking or giving advice with respect to any matter relating to the protection of an invention.

The statutory privilege also extends to communications between an individual who is authorised to act as a patent agent in a foreign country and that individual’s client if:

  • a that foreign country’s law also recognises privilege in the communications; and
  • b the communications would meet the above-noted requirements for privilege in Canada.
ii Validity
Utility

Disclosure of basis for ‘sound prediction’

Recently, in Eli Lilly Canada Inc v. Hospira Health Care Corporation,120 the Federal Court considered the disclosure requirements for the doctrine of sound prediction of utility (see above). The Court reviewed the legal principles from the jurisprudence in Canada on the issue. The Court recognised that there was some controversy in the Canadian jurisprudence with respect to the disclosure requirements under the sound prediction doctrine. However, after reviewing the jurisprudence and noting that it had ‘some sympathy’ for the contrary views, the Court held that ‘where utility is based on a sound prediction, there remains an obligation to disclose in the patent specification the factual basis and a sound line of reasoning supporting the prediction’. That said, the Court noted that there is no requirement to disclose that which is part of the common general knowledge.

In this case, most of the compounds claimed had not been made or tested before the filing date and thus, the patent only disclosed testing of a few examples. Based upon the evidence, the Court concluded that the skilled person would not have made a prediction of utility for the thousands of untested compounds and thus, held the claims invalid for lack of utility.

‘Promise of the patent’ doctrine

Jurisprudence in the Federal Court had developed a twofold test of utility. In particular, where the specification of the patent did not promise a specific result, no particular level of utility was required; a ‘mere scintilla’ of utility was sufficient. However, where the specification set out an explicit ‘promise’ of a specific result in clear and unambiguous terms, utility was to be measured against that promise, sometimes referred to as the ‘promise of the patent’ doctrine.121

The Supreme Court of Canada recently considered the ‘promise of the patent’ doctrine in AstraZeneca Canada Inc v. Apotex Inc.122 The patent in issue related to the compound esomeprazolein, a proton pump inhibitor that reduces gastric acid and treats maladies such as gastroesophageal reflux disease. This drug was successfully commercialised by the patentee and at trial was found novel and non-obvious. However, the patent was invalidated at trial due to lack of utility. In particular, although the trial judge concluded that the claimed invention was useful for certain purposes, the patent was invalidated because, in applying the ‘promise of the patent’ doctrine, the patent ‘promised more than it could provide’. That decision was upheld by the Federal Court of Appeal.

The Supreme Court rejected the ‘promise of the patent’ doctrine, concluding that it ‘is not the correct method of determining whether the utility requirement under Section 2 of the Patent Act is met’; ‘it is not good law’ and is ‘unsound’. The Court found the promise doctrine to be excessively onerous in two ways: namely, it determines the standard of utility that is required of a patent by reference to the promises expressed in the patent; and, where there are multiple expressed promises of utility, it requires that each of the express promises to be fulfilled.

In rejecting the ‘promise of the patent’ doctrine, the Supreme Court of Canada set forth the following principles on the proper approach to measure utility of a patented invention:

  • a Utility will differ based on the subject-matter of the invention as identified by claims construction. Thus, the scope of potentially acceptable uses to meet the Section 2 requirement is limited – not any use will do. By requiring the usefulness of the proposed invention to be related to the nature of the subject-matter as claimed, a proposed invention cannot be saved by an entirely unrelated use (e.g., it is not sufficient for a party seeking a patent for a machine to assert it is useful as a paperweight).
  • b To determine whether a patent discloses an invention with sufficient utility, courts should undertake the following analysis. First, courts must identify the subject-matter of the invention as claimed in the patent. Second, courts must ask whether that subject-matter is useful – is it capable of a practical purpose (i.e., an actual result)?
  • c The Act does not prescribe the degree or quantum of usefulness required, or that every potential use be realised – a scintilla of utility will do. A single use related to the nature of the subject-matter is sufficient, and the utility must be established by either demonstration or sound prediction as of the filing date of the patent application (see above).

Applying this approach, the Supreme Court found AstraZeneca’s patent satisfied the utility requirement and allowed the appeal.

Obviousness-type double patenting

As referenced above, one of the categories of double patenting is obviousness-type double-patenting. In Mylan Pharmaceuticals ULC v. Eli Lilly Canada Inc,123 the Federal Court of Appeal clarified the test for obviousness-type double-patenting and made some important comments on the distinction between prior art and common general knowledge.

The patent in issue was directed to the use of tadalafil for the treatment of erectile dysfunction (ED). Eli Lilly also owned an earlier Canadian patent that claimed the drug tadalafil per se and its use to treat certain disorders (e.g., hypertension), but not ED. The specification of the earlier patent also disclosed tadalafil could be used as a ‘PDE inhibitor’, but this use was not expressly included in any of the claims.

Distinction between prior art and common general knowledge

In its decision, the Federal Court of Appeal drew some important distinctions between prior art and common general knowledge. In particular, the Court noted that ‘prior art is the collection of learning in the field of the patent at issue’, which ‘comprises any publically available teaching, however obscure or not generally accepted’. In contrast, the Court stated that common general knowledge is ‘knowledge generally known by persons skilled in the relevant art at the relevant time’, and unlike prior art, ‘a piece of information only migrates into the common general knowledge if a skilled person would become aware of it and accept it as ‘a good basis for further action.’

Distinction between obviousness and obviousness-type double-patenting

The Court also commented on the distinctions between obviousness and obviousness-type double-patenting. In particular, the Court noted that while obviousness is directed to the question of whether an ‘invention’ exists, obviousness-type double-patenting deals with the prevention of the ‘evergreening’ an existing patent through an extension of the monopoly.

As a result, the Court noted two important distinctions between the tests for obviousness and obviousness-type double-patenting, namely:

  • a For obviousness, any piece of prior art, can be cited. In contrast, for obviousness-type double-patenting, only the earlier patent can be cited, and any other prior art is only relevant if it is part of the common general knowledge.
  • b For obviousness, Section 28.3(a) of the Patent Act provides that disclosures by the patentee within one year of the filing date cannot be cited as prior art. However, since double-patenting is not subject to that section, the earlier patent is citable even if it was published less than a year before the filing date of the challenged patent.

Test for obviousness-type double-patenting

The Court of Appeal also commented on the legal test for obviousness-type double-patenting. Based upon the established jurisprudence, the Court held that obviousness-type double-patenting requires a comparison of the claims of the second patent against the claims of the first patent to determine if the claims of the second patent are ‘obvious’ in view of the first patent. Applying the rules of claim construction established by Canadian courts, the Federal Court of Appeal concluded that the trial judge erred reading ‘PDE inhibition’ into the claims of the earlier patent as there was no ambiguity therein which require recourse to the specification. However, the Court also found that the error did not affect the overall conclusions of the trial judge.

Relevant date for obviousness-type double-patenting

The Federal Court of Appeal also commented on the relevant date for obviousness-type double-patenting but unfortunately did not definitively resolve the issue. The Court concluded that the publication date of the second patent was not the appropriate date but refused to make a decision in respect of the two other proposed dates, namely the priority date of the first patent or the priority date of the second patent, as both dates resulted in a conclusion that there was no double-patenting in this case.

iii Monetary remedies
Janssen Inc v. Teva Canada Ltd

In Janssen Inc v. Teva Canada Ltd,124 the Federal Court considered the quantification of damages in an action where the defendant was found to infringe the patent. Both Janssen Inc (Janssen Canada) and Janssen Pharmaceuticals Inc (Janssen US) claimed damages arising from the infringement. Janssen Canada was a licensee under the patent in issue whereas Janssen US was a supplier of the licensed products sold in Canada by Janssen Canada.

Standing

One of the issues considered by the Court was whether Janssen US had standing as a person ‘claiming under a patentee’ pursuant to Section 55(1) of the Patent Act. The Court reviewed the jurisprudence and summarised that for a conclusion that a party is a person ‘claiming under the patentee’:

  • a the person must be one who, as a user, an assignee, a licensee or lessee, has a title or a right that can be traced back to the patentee;
  • b it does not matter whether a licensee is exclusive or non-exclusive;
  • c the licence must be proved but it need not exist in writing; and
  • d the claim must be one in respect of a use in Canada and not elsewhere in the corporate chain.

On the facts, the Court found that although Janssen US did not ‘use’ the invention in Canada, it had a licence by acquiescence from the patentee to be involved in the ‘chain of sale’ of the tablets sold in Canada by Janssen Canada under licence. As such, the Court concluded Janssen US had standing to claim damages for infringement.

Calculation of damages

In assessing the quantum of damages, the Court accepted that damages arising from the infringement could extend beyond the expiry of the patent (in this case two months for losses of retail sales and one year for losses of hospital sales).

The Court also increased certain damages by allowing a claim for losses caused by price suppression based on evidence that Janssen Canada had lowered its prices to compete with the infringing product.

Mitigation

The Court found that a party claiming damages, including in a patent action, ‘bears the duty of taking all reasonable steps to mitigate those damages’. However, the Court stated that where there is an allegation of a failure to mitigate, the burden is on the defendant to prove that the plaintiff did not make reasonable efforts to mitigate and mitigation was possible. The Court also noted that there are two evidentiary considerations: (1) determine what was actually done; and (2) determine whether something more or different ought to have been done. The Court ultimately found that there was no evidence to support the assertions of what ought to have been done by Jansen, and as such, the Court was unable to conclude insufficient steps to mitigate damages had been taken.

Dow Chemical Company v. Nova Chemicals Corporation

In two recent decisions in Dow Chemical Company v. Nova Chemicals Corporation,125 the Federal Court awarded monetary remedies totalling over C$645 million, the largest reported award in a patent infringement action in Canada. In rendering its decisions, the Federal Court considered a variety of issues relating to the quantification of monetary remedies.

During the liability phase of the action, Dow’s patent for polyethylene compositions used in packaging applications was found valid and infringed by Nova’s SURPASS products. As a result, Dow was awarded a number of remedies, including an election between damages and an accounting of profits. Dow elected for an accounting of Nova’s profits.

‘Springboard’ profits

Dow claimed that Nova’s infringing activities provided Nova with a ‘springboard’ into the market. Based on the evidence, the Federal Court was satisfied that in the hypothetical ‘but for’ world where Nova did not enter the market until after the expiry of the patent, it would have taken approximately 20 months for Nova to attain the same level of sales of its SURPASS products that Nova enjoyed in the real world. As such, the Federal Court concluded that the profits obtained by Nova for the 20-month period after the expiry of the patent ought to be included in the accounting of profits.

Accounting of profits and the deduction of costs

The Federal Court also considered issues relating to the costs that Nova should be permitted to deduct from its revenues in an accounting of profits. Two primary issues were considered. The first related to the appropriate measure of the cost of ethylene, a key component of the infringing SURPASS products. Nova asserted that it was entitled to deduct the ‘economic value’ of the ethylene measured by the average price that Nova sold ethylene to third parties. The Court found that Nova was only entitled to deduct its actual costs incurred to manufacture the ethylene since the ethylene was not sold by Nova, but rather was used to manufacture the infringing products. In so concluding, the Court noted that Nova’s position would result in deduction of a ‘theoretical cost’ that had not been actually incurred.

The second issue related to whether non-incremental fixed costs and capital depreciation expenses could be deducted from Nova’s revenues. In considering this issued, the Court noted that there are several recognised approaches for an accounting for profits, namely, the differential profit approach, the incremental cost approach and the full cost approach. Nova asserted that the full cost approach was appropriate in the circumstances of this case because there were no direct non-infringing alternatives and its incremental costs would be negligible, such that the incremental costs approach would result in an inequitable outcome. The Court ultimately concluded that Nova should be entitled to deduct a proportion of certain of its claimed fixed costs and capital depreciation expenses related to the production and sale of the infringing products.

Currency conversion

In Canada, the Currency Act126 provides that a monetary judgment must be in Canadian dollars. In this case, Nova’s profits from the sale of infringing SURPASS products were largely earned in US dollars. As such, one of the issues was the appropriate date to convert US-dollar profits to Canadian dollars. The Court held that since the evidence supported that Nova’s profits were primarily retained in US dollars, the date of conversion into Canadian dollars should be the date of the judgment.

iv Implementation of Canada-European Union Comprehensive Economic and Trade Agreement (CETA)127

As a result of its obligations under CETA, Canada has recently made amendments to the Patent Act and implemented new regulations that will have significant implications on the pharmaceutical industry in Canada.

Amendments to PMNOC Regulations

As referenced above, recent amendments to the PMNOC Regulations have introduced significant changes to proceedings under these Regulations.128 The key amendments introduced include:

  • a A new right of action following receipt of a notice of allegation, for a declaration of infringement of all claims of any patent that is the subject of the notice of allegation (formerly PMNOC proceedings were brought by way of a summary application procedure, and only the claims eligible for listing could be asserted). As such, PMNOC proceedings will now proceed by way an action, including full documentary and oral discovery. Proceeding by way of action affords both parties an equal right of appeal (under the former application procedure, if the first person lost at first instance and the Minister of Health issued the NOC to the second person, an appeal by the first person was rendered moot). Proceeding by way of action also does away with duplicative proceedings. Previously, the losing party in the application could bring a subsequent action for infringement or impeachment of a patent. The amendments also introduce a right of action against the second person for unlisted patents any time after receipt of a notice of allegation.
  • b Prohibitions against a first person from bringing an action outside the Regulations for a listed patent that is the subject of a notice of allegation, unless the first person did not have a reasonable basis for bringing the action within the 45-day deadline to respond to the notice of allegation.
  • c As referenced above, the first person may be liable to the second person for any loss suffered as a result of the delay in issuance of the NOC if the proceeding is unsuccessful (discontinued, dismissed, or reversed on appeal). Under the regime prior to the amendments, the end date for such damages was explicitly limited to the date of discontinuance, dismissal, or reversal, which precluded certain types of damages, such as permanent loss of market share. The new provisions no longer include express limits the end date for damages. However, the amendments also introduced the ability for a first person to renounce the application of the 24-month stay which would preclude any such liability.
Introduction of CSP regime

As referenced above, the Patent Act was amended to add a new CSP regime that provides additional protection for a new drug after the expiry of the relevant patent. The term of the CSP is calculated by subtracting five years from the difference between the filing date of the application for the patent and the day on which the NOC is issued, up to a maximum of two years.

Regulations for the new CSP regime came into force together with the Patent Act amendments, on 21 September 2017. The key requirements for obtaining a CSP include:

  • a A CSP is only available where no other CSP has been issued with respect to the medicinal ingredient or the combination of medicinal ingredients, which excludes prescribed variations.129
  • b To be ‘eligible’, a patent must be in force and include at least one claim directed to the same medicinal ingredient or combination; use of the same medicinal ingredient or combination; or the same medicinal ingredient, or combination, as produced by a defined process (product-by-process). Therefore, pure process patents and patents claiming formulations are not eligible for a CSP.
  • c The CSP application must be filed within 120 days of grant of the NOC (if the patent is granted prior to the NOC) or the grant of the patent (if the NOC is granted prior to the patent).
  • d For a CSP to be available, the application for the NOC must be filed within a specified deadline relative to the first corresponding foreign application for authorisation. For the European Union, any country that is a member of the European Union, the United States of America, Australia, Switzerland and Japan, the prescribed period for filing the application for the authorisation for sale is:

• 24 months, if the application for a CSP was filed no later than 21 September 2018; and

• 12 months, in any other case.

The CSP grants the same rights as the patent but only with respect to ‘the making, constructing, using and selling of any drug that contains the medicinal ingredient, or combination of medicinal ingredients, set out in the certificate, by itself or in addition to any other medicinal ingredient’. The Patent Act also expressly provides that it is not an infringement of the CSP to make, use, or sell the medicinal ingredient for the purpose of export.

IX OUTLOOK

Over the past year, there have been significant changes in the Canadian patent litigation landscape, reaffirming Canada as an attractive jurisdiction for patent enforcement. Further changes in the patent law in Canada are expected, in particular development of the jurisprudence in the following areas.

i Utility

Development in the jurisprudence on:

  • a the application of the new test for utility recently enunciated by the Supreme Court of Canada; and
  • b whether there is a heightened disclosure requirement under the doctrine of sound prediction of utility.
ii CETA

The application of the new provisions implemented as a result of Canada’s obligations under the CETA, including:

  • a the implementation of the new CSP regime; and
  • b the effect of the new PMNOC Regulations, including that new proceedings will proceed by way of a full action.
iii Damages and profits

Development of the jurisprudence on issues relevant to the calculations of damages or defendant’s profits including decisions from the Federal Court of Appeal on appeals from the Federal Court’s recent monetary awards.

1 Steven B Garland is a partner and Kevin K Graham is counsel at Smart & Biggar/Fetherstonhaugh. The assistance of Sebastian Beck-Watt, articling student, Smart & Biggar/Fetherstonhaugh in the preparation of this article is acknowledged with appreciation.

2 Patent Act, RSC 1985, c P-4, Section 42.

3 Ibid., Section 44.

4 Ibid., Sections 115 and 116.

5 Ibid., Sections 54(1) and 54(2).

6 Ibid., Section 60.

7 Federal Courts Act, RSC 1985, c F-7, Section 20.

8 Federal Courts Rules, SOR/98-106, r. 373, 374.

9 RJR-Macdonald Inc v. Canada (Attorney General), [1994] 1 SCR 311 at 334–347.

10 Ibid. at 340–342; and Cutter Ltd v. Baxter Travenol Laboratories of Canada Ltd (1980), 47 CPR (2d) 53 at 55–56 (FCA), leave to appeal to SCC refused (1980), 47 CPR (2d) 249.

11 RJR-Macdonald Inc v. Canada (Attorney General), [1994] 1 SCR 311 at 334–347.

12 Patent Act, RSC 1985, c P-4, Sections 55(1), 55(2).

13 Jay-Lor International Inc v. Penta Farm Systems Ltd, 2007 FC 358 at Paragraph 36.

14 Armstrong Cork Canada v. Domco Industries Ltd, [1982] 1 SCR 907; Signalisation de Montréal Inc v. Services de Béton Universels Ltée (1992), 46 CPR (3d) 199 (FCA), leave to appeal to SCC refused (1993), 48 CPR (3d) vi (note).

15 Patent Act, RSC 1985, c P-4, Section 60(1).

16 EI Du Pont de Nemours & Co v. Montecatini-Societa Generale Per L’Industria Mineraria E Chimica (1966), 49 CPR 209 at 212–218 (Ex Ct), aff’d (1967), 52 CPR 18 (SCC); Wakefield Properties Corp v. Teknion Furniture Systems Inc (1992), 44 CPR (3d) 474 at 476–477 (FCTD).

17 Patent Act, RSC 1985, c P-4, Sections 55.01 and 78.2. For patents issued from applications filed prior to 1 October 1989, the limitation period may be governed by the relevant legislation in the province in which the infringing activities take place. These limitation periods range from two to six years depending upon the province. If the infringing activities take place in more than one province, a six-year federal limitation period applies (Federal Courts Act, RSC 1985, c F-7, Section 39).

18 Competition Act, RSC 1985, c C-34, Sections 52, 74.01(1).

19 Trade-marks Act, RSC 1985, c T-13, Section 7; S&S Industries Inc v. Rowell, [1966] SCR 419.

20 Genencor International Inc v. Canada (Commissioner of Patents), 2007 FCA 129 at Paragraphs 6–8, 55 CPR (4th) 378, leave to appeal to SCC refused, [2007] SCCA No 272.

21 Patent Act, RSC 1985, c P-4, Section 48.2.

22 Ibid., Sections 48.2 and 48.3(2).

23 Ibid., Section 48.3.

24 Ibid., Section 48.4.

25 Ibid., Section 48.5; Genencor International Inc v. Canada (Commissioner of Patents), 2008 FC 608 at Paragraph 48; Newco Tank Corp v. Canada (Attorney General), 2015 FCA 47 at Paragraph 12.

26 Genencor International Inc v. Canada (Commissioner of Patents), 2006 FC 1021, aff’d 2007 FCA 129, leave to appeal to SCC refused, [2007] SCCA No 272.

27 Patent Act, RSC 1985, c P-4, Section 65.

28 Ibid., Section 66.

29 Ibid., s. 65(2); and Torpharm Inc v. Canada (Commissioner of Patents), 2004 FC 673 at Paragraph 38; but see Torpharm Inc v. Merck & Co (2000), 9 CPR (4th) 520 at 539 (Pat App Bd).

30 Free World Trust v. Électro Santé Inc, 2000 SCC 66 at Paragraph 33.

31 Whirlpool Corp v. Camco Inc, 2000 SCC 67 at Paragraphs 42–50.

32 Ibid. at Paragraphs 45–48.

33 Ibid. at Paragraphs 48–49.

34 Mobil Oil Corp v. Hercules Canada Inc (1994), 57 CPR (3d) 488 at 494 (FCTD), rev’d in part (1995), 63 CPR (3d) 473 (FCA), leave to appeal SCC refused (1996), 66 CPR (3d) vi.

35 Free World Trust v. Électro Santé Inc, 2000 SCC 66 at Paragraphs 64 and 66. However, recently several Federal Court decisions have drawn a distinction between statements or admissions made in the course of patent prosecution and a change to a claim as a result of an objection from CIPO, which was characterised as an objective fact that can be properly considered when construing a claim. See: Distrimedic v. Dispill, 2013 FC 1043 at Paragraphs 209–210; Eli Lilly Canada Inc v. Mylan Pharmaceuticals ULC, 2015 FC 125 at Paragraph 154. It remains to be seen whether this approach will be approved by the Federal Court of Appeal or Supreme Court of Canada.

36 Patent Act, RSC 1985, c P-4, Section 42.

37 HG Fox, The Canadian Law and Practice Relating to Letters Patent for Inventions 349 (4th ed The Carswell Co. Ltd. 1969); Monsanto Canada Inc v. Schmeiser, 2004 SCC 34 at Paragraphs 30–58.

38 Free World Trust v. Électro Santé Inc, 2000 SCC 66 at Paragraphs 55–56; Halford v. Seed Hawk Inc, 2006 FCA 275 at Paragraphs 12–15.

39 Apotex Inc v. Nycomed Canada Inc, 2011 FC 1441 at Paragraphs 18–27, aff’d 2012 FCA 195.

40 AB Hassle v. Canada (Minister of National Health and Welfare), 2002 FCA 421 at Paragraph 17, leave to appeal to SCC refused [2002] SCCA No 531; MacLennan v. Gilbert Inc, 2008 FCA 35 at Paragraph 13; Weatherford Canada Ltd v. Corlac Inc, 2011 FCA 228 at Paragraph 162, leave to appeal to SCC refused, 34459 (29 March 2012). However, the inducer is not required to have knowledge of the patent to be liable for inducing infringement, see Bauer Hockey Corp v. Easton Sports Canada Inc, 2010 FC 361 at Paragraphs 197–203, aff’d without comment on this issue 2011 FCA 83.

41 Mentmore Manufacturing Co v. National Merchandise Manufacturing Co Inc (1978), 40 CPR (2d) 164 at 174 (FCA); Monsanto Canada Inc v. Schmeiser, 2001 FCT 256 at 248 (FCTD), aff’d 2002 FCA 309, appeal allowed in part 2004 SCC 34.

42 Halford v. Seed Hawk Inc, 2004 FC 88 at Paragraphs 324–332, rev’d 2006 FCA 275 (but aff’d on this issue at Paragraphs 54–55).

43 Patent Act, RSC 1985, c P-4, Section 2.

44 Ibid., Section 27(8); Riello Canadian Inc v. Lambert (1986), 9 CPR (3d) 324 at 338 (FCTD).

45 Calgon Carbon Corp v. North Bay (City), 2005 FCA 410 at Paragraphs 9–19, leave to appeal to SCC refused, 31306 (30 March 2006).

46 ‘Canadian filing date’ is the date a Canadian patent application was filed with the Canadian Patent Office or the date of filing a PCT patent application.

47 Patent Act, RSC 1985, c P-4, Section 28.2.

48 671905 Alberta Inc v. Q’Max Solutions Inc, 2003 FCA 241 at Paragraph 43.

49 Almecon Industries Ltd v. Nutron Manufacturing Ltd (1996), 65 CPR (3d) 417 at 429–430 (FCTD), aff’d (1997), 72 CPR (3d) 397 (FCA); Hi-Qual Manufacturing Ltd v. Rea’s Welding & Steel Supplies Ltd (1994), 55 CPR (3d) 224 at 237 (FCTD), aff’d (1995), 61 CPR (3d) 270 (FCA); Free World Trust v. Électro Santé Inc, 2000 SCC 66 at Paragraph 25.

50 Sanofi-Synthelabo Canada Inc v. Apotex Inc, 2008 SCC 61 at Paragraphs 23–30; Abbott Laboratories v. Canada (Minister of Health), 2008 FC 1359 at Paragraph 75, aff’d 2009 FCA 94.

51 Sanofi-Synthelabo Canada Inc v. Apotex Inc, 2008 SCC 61 at Paragraphs 26–27.

52 Windsurfing International Inc v. Tabur Marine (Great Britain) Ltd (1984), [1985] RPC 59 (Eng CA).

53 Sanofi-Synthelabo Canada Inc v. Apotex Inc, 2008 SCC 61 at Paragraph 67.

54 Ibid. at Paragraphs 67–68.

55 Pfizer Canada Inc v. Apotex Inc, 2009 FCA 8 at Paragraphs 22–29; Eli Lilly Canada Inc v. Mylan Pharmaceuticals ULC, 2015 FCA 286 at Paragraph 4.

56 Patent Act, RSC 1985, c P-4, Section 2 (invention); Apotex v. Wellcome Foundation Ltd, 2002 SCC 77 at Paragraph 56.

57 AstraZeneca Canada Inc v. Apotex Inc, 2017 SCC 36 at Paragraph 55.

58 Ibid. at Paragraph 54.

59 Apotex v. Wellcome Foundation Ltd, ۲۰۰۲ SCC ۷۷ at Paragraphs ۵۱–۵۶; Aventis Pharma v. Apotex Inc, ۲۰۰۵ FC ۱۲۸۳ at Paragraphs ۸۲–۸۳, aff’d ۲۰۰۶ FCA ۶۴ at Paragraphs ۲۶–۳۵, leave to appeal to SCC refused, [۲۰۰۶] SCCA No. ۱۳۶; GD Searle & Co v. Novopharm Limited, ۲۰۰۷ FC ۸۱ at Paragraph ۱۰۲, rev’d on other grounds ۲۰۰۷ FCA ۱۷۳, leave to appeal to SCC refused, [۲۰۰۷] SCCA No. ۳۴۰.

60 Apotex Inc v. Wellcome Foundation Ltd, 2002 SCC 77 (SCC) at Paragraph 70.

61 Pfizer Canada Inc v. Novopharm Ltd, ۲۰۱۲ SCC ۶۰ at Paragraphs ۳۶–۴۴; AstraZeneca Canada Inc v. Apotex Inc, ۲۰۱۴ FC ۶۳۸ at Paragraphs ۱۴۱–۱۶۰; AstraZeneca Canada Inc v. Apotex Inc, ۲۰۱۷ SCC ۳۶ at Paragraph ۵۸; Eli Lilly Canada Inc v. Hospira Healthcare Corp, ۲۰۱۶ FC ۴۷ at Paragraphs ۴۶–۴۹.

62 Laboratoires Servier v. Apotex Inc, 2008 FC 825 at Paragraph 270, aff’d 2009 FCA 222, leave to appeal to SCC refused, [2009] SCCA No 403; Consolboard Inc v. MacMillan Bloedel (Saskatchewan) Ltd, [1981] 1 SCR 504 at 160–161; Sanofi-Aventis v. Apotex Inc, 2013 FCA 186 at Paragraphs 47–49.

63 AstraZeneca Canada Inc v. Apotex Inc, 2017 SCC 36.

64 Pharmascience Inc v. Sanofi-Aventis Canada Inc, 2006 FCA 229 at Paragraphs 67–73, leave to appeal to SCC refused.

65 Commissioner of Patents v. Farbwerke Hoechst A/G, [1964] SCR 49 at Paragraph 13; Whirlpool Corp v. Camco Inc, 2000 SCC 67 at Paragraphs 63–75; Pharmascience Inc v. Sanofi-Aventis Canada Inc, 2006 FCA 229 at Paragraph 68, leave to appeal to SCC refused, [2006] SCCA No. 362.

66 Consolboard Inc v. MacMillian Bloedel (Saskatchewan) Ltd, [1981] 1 SCR 504; Pioneer Hi-Bred Ltd v. Canada (Commissioner of Patents), [1989] 1 SCR 1623; Mobil Oil Corp v. Hercules Canada Inc (1995), 63 CPR (3d) 473 at 484–486 (FCA); Teva Canada Ltd v. Pfizer Canada Inc, 2012 SCC 60.

67 Mobil Oil Corp v. Hercules Canada Inc (1995), 63 CPR (3d) 473 at 483–484 (FCA).

68 Farbwerke Hoechst A/G v. Commissioner of Patents, [1966] Ex CR 91 at 106, aff’d [1966] SCR 604; Pfizer Canada Inc v. Apotex Inc, 2007 FCA 209 at Paragraph 115, leave to appeal to SCC refused [2007] SCCA No. 377.

69 Dutch Industries Ltd v. Commissioner of Patents, 2001 FCT 879, appeal allowed in part 2003 FCA 121, leave to appeal to SCC refused 20 CPR (4th) vii; Johnson & Johnson Inc v. Boston Scientific Ltd, 2004 FC 1672, rev’d in light of legislative amendments regarding small entity fees 2006 FCA 195. However, Small Entity Fee Payment Legislation (Bill C-29, An Act to Amend the Patent Act, 1st Sess, 38th Parl, 2005, cl 2 (came into force 1 February 2006), RSC, c P-4) provided a one-year period from the coming into force date in which to correct an incorrectly paid small entity fee with respect to fees paid prior to the coming into force date. Effective 2 June 2007, the Patent Rules, SOR/96-423, were amended to provide the Patent Office with discretion to grant an extension of time for an applicant to pay the proper fee where the small entity fee was paid in good faith and the request for the time extension is filed without undue delay.

70 Patent Act, RSC 1985, c P-4, Section 53(1).

71 Micro Chemicals Ltd v. Smith, Kline & French Inter-American Corp (1971), [1972] SCR 506 at 520; Merck & Co v. Apotex Inc, 2006 FC 524 at Paragraphs 159–163, rev’d on other grounds, but aff’d on this issue 2006 FCA 323 at Paragraphs 105–113, leave to appeal to SCC refused, [2006] SCCA No. 507.

72 Patent Act, RSC 1985, c P-4, Section 55.2(1). It is uncertain as to whether this provision would be limited to the pharmaceutical patents in view of the related Patented Medicines Notice of Compliance Regulations that were introduced at the same time as Section 55.2(1).

73 Patent Act, RSC 1985, c P-4, Section 56.

74 Ibid., Sections 56(2), (3), (4): The ‘relevant date’ depends on the filing date of the patent application, namely:

a if filed before 1 October 1989: the relevant date = date the patent was granted;

b if filed on or after 1 October 1989 but before 1 October 1996: the relevant date = the date the application was laid open; and

c if filed on or after 1 October 1996: the relevant date = Canadian filing date (or the convention priority date, if applicable).

75 Merck & Co v. Apotex Inc (1995), 60 CPR (3d) 356 at 364–374 (FCA), leave to appeal to SCC refused (1995), 63 CPR (3d) v. (note).

76 An expired licence will not provide a defence: Lubrizol Corp v. Imperial Oil Ltd (1990), 33 CPR (3d) 1 (FCTD) at 10, rev’d on other grounds, but aff’d on this issue (1992), 45 CPR (3d) 1 at 3 (FCA).

77 Canadian Marconi Co v. Nordmende Pheonix Ltd (1962), 39 CPR 185 at 201; Micro Chemicals Ltd v. Rhone-Poulenc SA, (1964) 44 CPR 193 at 208, aff’d [1965] SCR 284.

78 Eli Lilly and Co v. Novopharm Ltd, [1998] 2 SCR 129 at 363–364.

79 Competition Act, RSC 1985, c C-34.

80 Eli Lilly & Co v. Apotex Inc, 2005 FCA 361 at Paragraphs 14, 36; Eli Lilly & Co v. Marzone Chemicals Ltd (1976), 29 CPR (2d) 253 at 255 (FCTD), aff’d (1976), 29 CPR (2d) 255 (FCA); Volkswagen Canada Inc v. Access International Automotive Ltd, 2001 FCA 79 at Paragraphs 21, 26; j2 Global Communications Inc v. Protus IP Solutions Inc, 2008 FC 759 at Paragraphs 29–36, aff’d 2009 FCA 41; Eli Lilly & Co v. Apotex Inc, 2002 FCT 1007 at 371–372 (FCTD).

81 Eli Lilly & Co v. Apotex Inc, 2009 FC 991, 80 CPR (4th) 1, aff’d without comment on this issue 2010 FCA 240, leave to appeal to SCC refused, [2010] SCCA No 434; Laboratoires Servier v. Apotex Inc, 2008 FC 825 at Paragraphs 463–478, aff’d 2009 FCA 222 at Paragraphs 48–50, leave to appeal to SCC refused, [2009] SCCA No. 403.

82 Patent Act, RSC 1985, c P-4, Section 55.

83 Ibid., Section 57.

84 JM Voith GmbH v. Beloit Corp (1993), 47 CPR (3d) 448 at 474–478 (FCTD), rev’d on other grounds (1997), 73 CPR (3d) 321 (FCA).

85 ConsolBoard Inc v. MacMillian Bloedel (Saskatchewan) Ltd (1982), 63 CPR (2d) 1 at 7 (FCTD), var’d (1983), 74 CPR (2d) 199 (FCA).

86 Monsanto Canada Inc v. Schmeiser, 2004 SCC 34 at Paragraph 100; Teledyne Industries Inc v. Lido Industrial Products Ltd (1982), 68 CPR (2d) 204 at 208 (FCTD).

87 Beloit Canada Ltée v. Valmet Oy (1994), 55 CPR (3d) 433 at 453–55 (FCTD) rev’d on other grounds (1995), 61 CPR (3d) 271, leave to appeal to SCC refused (1996), 64 CPR (3d) vi; Merck & Co v. Apotex Inc, 2006 FC 524 at Paragraph 229, rev’d on other grounds, but aff’d on this issue 2006 FCA 323 at Paragraphs 127–1331, leave to appeal to SCC refused, [2006] SCCA No. 507.

88 Patent Act, RSC 1985, c P-4, Sections 10, 55(1), 55(2).

89 Jay-Lor International Inc v. Penta Farm Systems Ltd, 2007 FC 358 at Paragraphs 120–123.

90 Whiten v. Pilot Insurance Co, 2002 SCC 18 at Paragraph 94; Dimplex North America Ltd v. CFM Corp, 2006 FC 586 at Paragraph 121, aff’d 2007 FCA 278; Eurocopter v. Bell Helicopter Textron Canada Limitée, 2013 FCA 219 at Paragraph 163.

91 Dimplex North America Ltd v. CFM Corp, 2006 FC 586 at Paragraph 132, aff’d 2007 FCA 278.

92 Merck & Co v. Apotex Inc (2000), 5 CPR (4th) 1 at 22 (FCTD), rev’d on other grounds 2003 FCA 234, leave to appeal to SCC refused, [2003] SCCA No 366; Patent Act, RSC 1985, c P-4, Section 57.

93 Eurocopter v. Bell Helicopter Textron Canada Ltd, 2012 FC 113 at Paragraph 397, 100 CPR (4th) 87, aff’d on other grounds 2013 FCA 219.

94 Baxter Travenol Laboratories of Canada Ltd v. Cutter (Canada) Ltd (1983), 68 CPR (2d) 179 at 200 (FCA) leave to appeal to SCC refused (1983), 72 CPR (2d) 287; Merck & Co v. Apotex Inc, 2006 FCA 323 at Paragraphs 117–124, leave to appeal to SCC refused [2006] SCCA No. 507.

95 Patent Act, RSC 1985, c P-4, Section 60(2).

96 The contribution of Nancy Pei, partner, and Urszula Wojtyra, associate, at Smart & Biggar/Fetherstonhaugh in co-authoring this section is acknowledged with appreciation.

97 Food and Drugs Act, RSC 1985, c F-27 and Food and Drug Regulations, CRC, c 870.

98 Patented Medicines (Notice of Compliance) Regulations, SOR/93-133, as amended.

99 Ibid., Section 4(1).

100 Ibid., Section 4(2).

101 Ibid., Section 4(1.1).

102 Ibid., Section 4(4)(d).

103 Ibid., Section 5.

104 The amendments to the PMNOC Regulations came into force on 21 September 2017. The new PMNOC Regulations apply to any matter relating to a notice of allegation served on a first person on or after that day. Any matter relating to a notice of allegation served prior to 21 September 2017 is governed by the former regulations.

105 Patented Medicines (Notice of Compliance) Regulations, SOR/93-133, as amended, Section 6.

106 Ibid.

107 Ibid., Section 7.

108 Ibid., Section 8.

109 Ibid., Sections 7(5)(b), 7(6) and 8(4).

110 Patent Act, RSC 1985, c P-4, Section 75.

111 Ibid., Section 76.

112 Ibid., Section 76.1.

113 Federal Courts Rules, SOR/98-106, r. 215; See also: r. 220, which permits a party to bring a motion before trial to request that the court determine a question of law, a question as to the admissibility of any document, exhibit or other evidence or questions stated by the parties in the form of a special case.

114 Ibid., SOR/98-106, r. 216.

115 Cascade Corporation v. Kinshofer GmbH, 2016 FC 1117.

116 See also Competition Act, RSC 1985, c C-34, Sections 52 and 74.01(1), which prohibit any person from knowingly or recklessly making a representation to the public that is false or misleading in a material respect for the purpose of promoting, directly or indirectly, the supply or use of a product or any business interest.

117 E Mishan & Sons v. Supertek, 2016 FC 986.

118 Excalibre Oil Tools Ltd v. Advantage Products Inc, 2016 FC 1279.

119 For example, see Lilly Icos LLC v. Pfizer Ireland Pharmaceuticals, 2006 FC 1465.

120 Eli Lilly Canada Inc v. Hospira Health Care Corporation, 2016 FC 47.

121 Laboratoires Servier v. Apotex Inc, 2008 FC 825 at Paragraph 270, aff’d 2009 FCA 222, leave to appeal to SCC refused, [2009] SCCA No 403; Consolboard Inc v. MacMillan Bloedel (Saskatchewan) Ltd, [1981] 1 SCR 504 at 160–161; Sanofi-Aventis v. Apotex Inc, 2013 FCA 186 at Paragraphs 47–49.

122 AstraZeneca Canada Inc v. Apotex Inc, 2017 SCC 36.

123 Mylan Pharmaceuticals ULC v. Eli Lilly Canada Inc, 2016 FCA 119.

124 Janssen Inc v. Teva Canada Ltd, 2016 FC 593.

125 Dow Chemical Company v. Nova Chemicals Corporation, 2017 FC 350 and Dow Chemical Company v. Nova Chemicals Corporation, 2017 FC 637.

126 Currency Act, RSC, 1985, c C-52.

127 The contribution of Nancy Pei, partner, and Urszula Wojtyra, associate, Smart & Biggar/Fetherstonhaugh, in co-authoring this section is acknowledged with appreciation.

128 The amendments to the PMNOC Regulations came into force on 21 September 2017. The new PMNOC Regulations apply to any matter relating to a notice of allegation served on a first person on or after that day. Any matter relating to a notice of allegation served prior to 21 September 2017 is governed by the former regulations.

129 Prescribed variations are:

a a variation in any appendage within the molecular structure of a medicinal ingredient that causes it to be an ester, salt, complex, chelate, clathrate or any non-covalent derivative;

b a variation that is an enantiomer, or a mixture of enantiomers, of a medicinal ingredient;

c a variation that is a solvate or polymorph of a medicinal ingredient;

d an in vivo or in vitro post-translational modification of a medicinal ingredient; and

e any combination of the variations set out in paragraphs a to d above.