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:

    1. the availability of flexible remedies, including damages, disgorgement of a defendant's profits and injunctive relief;
    2. 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;
    3. because the Federal Court has national jurisdiction, issues such as forum shopping typically do not arise in Canada;
    4. unlike other jurisdictions such as the United States, there is no doctrine of file wrapper estoppel in Canada; and
    5. 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:

    1. Is there a serious question to be tried on a preliminary assessment of the merits of the case?
    2. Will the plaintiff suffer irreparable harm if the injunction is refused?
    3. 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.

Summary disposition

The Federal Courts Rules include summary trial and summary judgment motion provisions which aim to facilitate the summary disposition of proceedings on issues that do not require a full trial on the merits.18 These may be particularly appropriate in cases where the cost taking the matter to trial as a regular action could well exceed any monetary award that would have accrued and where the parties have worked together to narrow the issues in dispute.19 There are also summary default proceedings that are available should a defendant not respond to the commencement of an action within the time limits provided.

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 Act20 and the unfair competition provisions in the Trade-marks Act21 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.22

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.23 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.24

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).25

The re-examination board then renders a decision as to patentability of the claims in issue.26 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.27 The board's decision can be appealed to the Federal Court.28 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.29

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.30 The remedies available in such a proceeding include the grant of a compulsory licence or revocation of the patent.31 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.32 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.33 The claims of a Canadian patent are construed 'purposively', not in a purely literal fashion.34 '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.35

A Canadian patent is construed based upon a review of the whole patent specification through the eyes of a 'person skilled in the art'.36 The 'person skilled in the art' may include a combination of the collective expertise of a number of skilled workers, scientists and technicians.37

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.38

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'.39 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.40

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:

    1. 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;
    2. 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
    3. 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.41

    Inducing infringement (indirect infringement)

    Although Canada does not have a doctrine of contributory infringement per se,42 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:

      1. an actual act of infringement was completed by a direct infringer;
      2. 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
      3. 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.43

    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.44 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.45

    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'.46 Mere scientific principles or abstract theorems are not patentable.47 Although a mere discovery, for example a scientific observation, is not patentable, a new and useful application of a discovery is an invention.48

    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:

      1. the invention is disclosed in a Canadian patent application that has an earlier effective filing date (either the actual Canadian filing date49 or the convention priority date, if applicable);
      2. 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
      3. 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.50

    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.51

    The legal test for lack of novelty is a rigorous one.52 Two requirements must be satisfied for a patent claim to be invalidated on the basis of anticipation, namely prior disclosure and enablement.53 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.54

    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,55 namely:

      1. identify the notional 'person skilled in the art' and the relevant common general knowledge of that person;
      2. identify the inventive concept of the claim in question or, if that cannot readily be done, construe it;
      3. 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
      4. 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?56

    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.57 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.58

    Utility

    The definition of 'invention' includes the requirement that the invention be 'useful', and thus it must have utility.59 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.60 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).61Additionally, 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.62 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:

      1. there must be a factual basis for the prediction;
      2. 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
      3. there must be proper disclosure.63

        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.64 Recent cases have held that when the sound prediction relies on data outside the common general knowledge of the skilled person, disclosure of this factual basis in the specification may be required to support the utility of the invention.65

        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.66 However, the Supreme Court of Canada has recently stated that the 'promise of the patent' doctrine is not appropriate under Canadian law.67

        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.68 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').69

        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,70 ambiguity of the disclosure or of the claims,71 claims broader than the invention made or disclosed72 and incorrect payment of fees.73 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.74

        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.75

        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.76

        Prior acquisition or prior user rights

        Section 56 of the Patent Act77 provides that any person who, before the 'relevant date',78 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.79

        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.80 However, a licence will not provide a defence for any activities that extend beyond the terms of the agreement.81

        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.82

        Unfair competition

        In Canada, the Competition Act83 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.84 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.85

        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.86 Alternatively, a patentee may be permitted to elect an accounting of the defendant's profits made as a result the infringing activity.87

        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.88 The jurisprudence has established two measures of damages, namely the loss of the plaintiff's profits or a reasonable royalty.89 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.90 However, an accounting of profits is a discretionary remedy and therefore is not granted as of right.91

        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.92 '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'.93

        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.94 Knowingly infringing a patent by itself is typically insufficient for entitlement to punitive or exemplary damages.95

        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,96 as an equitable remedy it is subject to the discretion of the Court.97

        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.98

        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.99

        ii Notice of compliance regulations for patented medicines100

        In Canada, regulatory approval in the form of a Notice of Compliance (NOC) must be obtained before a drug can be marketed.101 Pursuant to the Patented Medicines Notice of Compliance (PMNOC) Regulations,102 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.103 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.104 The list may include an expired patent but for which a CSP has taken effect.105 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.106

        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:

          1. the statement of entitlement to list of the first person is false;
          2. the patent or CSP is invalid or void;
          3. the patent or CSP is ineligible for inclusion on the register;
          4. the patent or CSP would not be infringed by the second person;
          5. the patent or CSP has expired; or
          6. in the case of a CSP, the CSP cannot take effect.107

        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 amended108 to provide that the first person can bring an action for a declaration that the second person would infringe the patent or CSP.109 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.110

        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.111 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.112 That said, the first person may renounce the statutory stay and thereby avoid such damages.113

        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:

          1. falsely marking or selling an article as patented;114
          2. making a false representation or tendering a false document for the purposes of the Patent Act;115 and
          3. failing to comply with certain provisions under the Patent Act relating to patented medicines.116

        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 Validity

        Utility

        The requirement that a patented invention have utility comes from the definition of invention in the Canadian Patent Act, namely 'invention means any new and useful art, process, machine, manufacture, or composition of matter'…

        Generally, a mere 'scintilla' of utility is required to meet the requirement under the Canadian Patent Act.

        In June 2017, the Supreme Court of Canada struck down the 'promise of the patent doctrine' in AstraZeneca Canada Inc v Apotex Inc.117 The promise doctrine held that where the patent specification sets out an explicit 'promise' of a specific result in clear and unambiguous terms, the utility requirement would only be met if that promise was fulfilled.118 The Supreme Court concluded 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'. Rather, courts must follow a two-step 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 – that is, is it capable of a practical purpose (i.e., an actual result)? The Supreme Court emphasised that a single use related to the nature of the subject-matter is sufficient, and that the utility must be either demonstrated or soundly predicted as of the filing date of the patent application.

        The Federal Court of Appeal recently applied this new approach in Bristol-Myers Squibb Canada Co v Apotex Inc.119 Bristol-Myers Squibb (BMS) had obtained two patents with respect to its new drug dasatinib, marketed as SPRYCEL and used for treating chronic myelogenous leukemia. One of those patents, Canadian Patent No. 2,366,932 (the '932 patent), contained a claim to the compound itself, which Apotex alleged was invalid for want of utility. The Federal Court had identified three promises made in the patent, and had concluded that BMS had data supporting only the first assertion, such that BMS had 'not met the burden to show that the entire overarching promised utility was either demonstrated or soundly predicted at the relevant date'.120 On appeal, the Federal Court of Appeal acknowledged that the Supreme Court of Canada had abolished the promise doctrine after the Federal Court had rendered its decision, and proceeded to apply the new two-step test for utility.

        First, the Court of Appeal established that the subject-matter of the impugned claim was merely the compound dasatinib itself – not its potential therapeutic uses. Second, the Court of Appeal determined that BMS had met the utility requirement by demonstration, as it was conceded that BMS had provided data showing dasatinib's inhibition of Src-family PTKs (the first promise identified by the applications judge). Importantly, the Court of Appeal had no doubt that establishing that a compound has the ability to inhibit a biological target implicated in disease was a useful discovery – it represented an important advance and met the minimal utility requirements established in Esomeprazole.

        Accordingly, the Court of Appeal allowed the appeal regarding the '932 patent and issued an order prohibiting the Minister of Health from issuing a NOC to Apotex for its generic version of dasatinib until expiry of the '932 patent.

        Other recent cases confirm that the new test for utility is not a demanding one.121 Notably, the Federal Court has rejected attempts at recasting the 'overpromising' line of attack as other heads of invalidity, stating, for example, that the promise doctrine should not be incorporated into insufficiency and overbreadth.122

        By contrast, the recent decision in Safe Gaming System v. Atlantic Lottery Corporation – a dispute regarding the assertion and validity of a patent for software to serve as a control interface between individuals and online gaming sites – provides an example where the utility requirement was not met. The Federal Court first observed that utility is assessed based on the whole patent, rather than on a claim-by-claim basis. More importantly, the court found that the basic utility argued by the patentee was not useful as it was not related to the nature of the subject matter, which is to monitor, regulate and terminate play of problem gamers. The asserted utility was too general: at the time of filing, a skilled person could not have applied the teachings of the patent to mitigate problem gaming, as very little was known about it at the relevant time. The court concluded that the skilled person would not be able to program a computer to do what the patent said it could, so that the patent failed the Esopremazole test for utility.

        ii Obviousness

        Correction to the Federal Court's paraphrase of the obviousness test

        In Ciba Specialty Chemicals Water Treatments Limited v. SNF Inc,123 a case regarding the validity and assertion of a patent for an improvement to a water recycling process, the Federal Court of Appeal clarified the language of the obviousness test.124 At the third step of the obviousness analysis, the inventive concept must be compared to the state of the art – not to the common general knowledge. The distinction is important: while any publicly available piece of information is part of the art, it is only considered part of the common general knowledge if it becomes generally known by persons skilled in the art at the relevant time.125

        At the fourth step of the obviousness analysis, the question is whether the differences would have been obvious to persons skilled in the art or whether they require any degree of invention – not whether they are more or less self-evident. The Federal Court of Appeal found that this oversimplification was an erroneous formulation of the obviousness framework and undertook to repeat the analysis itself.

        The Court of Appeal also stressed that when identifying the inventive concept, emphasis must be on the claims, commenting that the search for the inventive concept had brought considerable confusion into the law of obviousness and suggested that 'until time as the Supreme Court is able to develop a workable definition of the inventive concept', simply construing the claim would reduce uncertainty and would prove more useful to the parties and the court.

        However, in Apotex Inc v Shire LLC,126 a decision regarding Shire's drug VYVANSE approved for treatment of ADHD and Binge Eating Disorder in adults, the Federal Court found that the inventive concept in that case could be grasped without difficulty: 'a sustained release formulation of a therapeutically useful dose of amphetamine that is resistant to abuse'. Therefore, there was no need to pursue the alternate course of claim construction. The Court also observed that the Ciba case could not be understood to have overruled the Supreme Court's iteration of the obviousness test in Sanofi-Synthelabo.127 The Supreme Court has not had an opportunity to consider this issue since Federal Court of Appeal decision in Ciba.

        iii Monetary remedies

        Janssen Inc v. Teva Canada Ltd

        In Janssen Inc v. Teva Canada Ltd,128 the Federal Court of Appeal dismissed Teva's appeal from the Federal Court's decision regarding the quantification of damages resulting from Teva's infringement of Janssen's 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.

        The Federal Court of Appeal confirmed the Federal Court's conclusion that Janssen US was 'a person claiming under the patentee' and thus had standing to claim damages. The Federal Court had 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.129

        The Federal Court of Appeal also found that the Federal Court did not err in identifying which scenario best represented what would have happened in the 'but for' world, namely 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) and from losses caused by price suppression based on evidence that Janssen Canada had lowered its prices to compete with the infringing products. Likewise, the Court of Appeal found that the Federal Court did not err in finding that Janssen had taken appropriate steps to mitigate its loss (as is the duty of the party claiming damages). The Court of Appeal noted that in case of doubt, the plaintiff's good-faith efforts to overcome difficulties caused by the defendant's wrongdoing should not be examined too critically.

        Finally, the Federal Court of Appeal confirmed the C$1 million in costs awarded to Janssen by the Federal Court, noting that the Supreme Court has affirmed that 'costs awards are quintessentially discretionary' and that they should only be set aside when they result from an error in principle or are plainly wrong, neither of which was shown in this case. The award was not considered excessive in light of the large number and high complexity of the issues raised, as well as the judgments resulting from the 10-day trial, which totalled over C$18.8 million in damages.

        Dow Chemical Company v. Nova Chemicals Corporation

        In two recent decisions in Dow Chemical Company v. Nova Chemicals Corporation,130 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 Act131 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 Agreement132

        As a result of its obligations under Canada-European Union Comprehensive Economic and Trade Agreement (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.133 The key amendments introduced include:

          1. 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.
          2. 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. 
          3. 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 that would preclude any such liability.
        Impact of New Right of Action

        In Apotex Inc v Shire LLC,134 Shire's application under the pre-amended PMNOC Regulations for an order prohibiting the Minister of Health from issuing an NOC for Apotex's generic version of lisdexamfetamine (LDX) was consolidated with Apotex's action seeking a declaration of invalidity and non-infringement of Shire's patent (the impeachment action), and Shire's counterclaim for infringement.

        The validity analysis in this case was applied equally by the Court to Apotex' action for impeachment and Shire's application for a prohibition order. The Court found that the patent was valid, and dismissed Apotex' action for impeachment. The Court also found that Apotex' generic version of LDX infringed the asserted claims of Shire's patent, and granted Shire's application for an order prohibiting the Minister of Health from issuing an NOC for the generic version.

        However, the Court dismissed Shire's counterclaim for infringement in respect of Apotex's prior manufacturing and retaining of its generic capsules because Apotex benefited from the experimental and regulatory use exception in respect of those activities, as recognised in Sections 55.2(1) and (6) of the Patent Act and at common law.

        Relative to the previous system of 'dual litigation' whereby infringement and validity were the subject of separate proceedings from PMNOC prohibition proceedings, this case illustrates the potential streamlining and reduction of duplicative proceedings afforded by the recent amendments to the PMNOC Regulations.

        Motions to dismiss redundant, scandalous, frivolous, vexatious or abusive claims under the new PMNOC Regulations

        In Genentech, Inc v Amgen Canada Inc,135 the Federal Court set the tone regarding how courts will approach section 6.08 motions under the new regulations. Section 6.08 allows for the second person to motion the court for the dismissal of an action, in whole or in part, brought under the new right of action for a declaration of infringement, on the basis that it is redundant, scandalous, frivolous or vexatious or is otherwise an abuse of process.

        The Court commented on the purpose of motions under Section 6.08, explaining that they serve as a mechanism 'that permits a defendant to move to dismiss a claim or a portion thereof at a preliminary stage of a proceeding where the claim is clearly without merit'. The Court also observed that there is a heightened need for such a mechanism in a regulatory regime where an automatic stay of the regulatory approval process is engaged as soon as an action for a declaration of infringement is commenced, without any assessment of the merits of the patent infringement claim. The Court concluded that the defendant's Section 6.08 motion should be allowed to proceed without awaiting completion of the examination for discovery process.

        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:

          1. 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.136
          2. 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.
          3. 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).
          4. 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, 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.

        At least 11 Certificates of Supplementary Protection have been issued since the CSP regime came into force.137

        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

        Further development in the jurisprudence on:

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

        ii CETA

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

          1. the implementation of the new CSP regime; and
          2. 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.


        Footnotes

        1 Steven B Garland is a partner, Kevin K Graham is counsel and Daniel J Hnatchuk is an associate at Smart & Biggar/Fetherstonhaugh. The assistance of Sebastian Beck-Watt and Isabelle St-Hilaire, articling students, and Bram Schwartz, summer 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 Federal Courts Rules, SOR/98-106, Rule 216.

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

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

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

        22 See, for example, E Mishan & Sons v, Supertek, 2016 FC 986 and Excalibre Oil Tools Ltd v. Advantage Products Inc, 2016 FC 1279.

        23 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.

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

        25 ibid., Sections 48.2 and 48.3(2).

        26 ibid., Section 48.3.

        27 ibid., Section 48.4.

        28 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.

        29 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.

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

        31 ibid., Section 66.

        32 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).

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

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

        35 ibid. at Paragraphs 45–48.

        36 ibid. at Paragraphs 48–49.

        37 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.

        38 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.

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

        40 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.

        41 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.

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

        43 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.

        44 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.

        45 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).

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

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

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

        49 '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.

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

        51 671905 Alberta Inc v. Q'Max Solutions Inc, 2003 FCA 241 at Paragraph 43.

        52 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.

        53 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.

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

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

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

        57 ibid. at Paragraphs 67–68.

        58 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.

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

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

        61 ibid. at Paragraph 54.

        62 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.

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

        64 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.

        65 Safe Gaming System v. Atlantic Lottery Corporation, 2018 FC 542 at Paragraph 132, citing Eli Lilly Canada Inc v. Hospira Health Care Corporation, 2016 FC 47 at Paragraphs 46-49, and Eurocopter v. Bell Helicopter Textron Canada Ltée, 2013 FCA 219 at Paragraphs 152-154.

        66 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.

        67 AstraZeneca Canada Inc v. Apotex Inc, 2017 SCC 36; Bristol-Myers Squibb Canada Co v Apotex Inc, 2017 FCA 190.

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

        69 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; Mylan Pharmaceuticals ULC v. Eli Lilly Canada Inc, 2016 FCA 119 at Paragraphs 27 to 29.

        70 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.

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

        72 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.

        73 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.

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

        75 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.

        76 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).

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

        78 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).

        79 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).

        80 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).

        81 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.

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

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

        84 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).

        85 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.

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

        87 ibid., Section 57.

        88 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).

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

        90 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).

        91 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.

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

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

        94 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.

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

        96 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.

        97 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.

        98 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.

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

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

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

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

        103 ibid., Section 4(1).

        104 ibid., Section 4(2).

        105 ibid., Section 4(1.1).

        106 ibid., Section 4(4)(d).

        107 ibid., Section 5.

        108 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.

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

        110 ibid.

        111 ibid., Section 7.

        112 ibid., Section 8.

        113 ibid., Sections 7(5)(b), 7(6) and 8(4).

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

        115 ibid., Section 76.

        116 ibid., Section 76.1.

        117 AstraZeneca Canada Inc v. Apotex Inc, 2017 SCC 36 [Esomeprazole].

        118 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.

        119 Bristol-Myers Squibb Canada Co v. Apotex Inc, 2017 FCA 190.

        120 Bristol-Myers Squibb Canada Co v. Apotex Inc, 2017 FC 296 at Paragraph 112.

        121 See, for example, Regents of the University of California v. I-MED Pharma Inc, 2018 FC 164 at Paragraphs 95–200; Hospira Healthcare Corporation v. Kennedy Trust for Rheumatology Research, 2018 FC 259 at Paragraphs .

        122 Pfizer Canada Inc v. Apotex Inc, 2017 FC 774 at Paragraph 363; Hospira Healthcare Corporation v. Kennedy Trust for Rheumatology Research, 2018 FC 259 at Paragraph 258.

        123 Ciba Specialty Chemicals Water Treatments Limited v. SNF Inc, 2017 CAF 225, leave to appeal to SCC refused, 37915 (16 January 2018).

        124 The inexact summary first appeared in Eli Lilly Canada Inc v. Mylan Pharmaceuticals ULC, 2015 FC 125, and was relied upon by the Federal Court in Ciba Specialty Chemicals Water Treatments Limited v. SNF Inc, 2015 FC 997.

        125 See also Mylan Pharmaceuticals ULC v. Eli Lilly Canada Inc, 2016 FCA 119 at Paragraphs; MIPS AB v. Bauer Hockey Ltd, 2018 FC 485 at Paragraph 121.

        126 Apotex Inc v Shire LLC, 2017 FC 831.

        127 Sanofi-Synthelabo Canada Inc v. Apotex Inc, 2008 SCC 61.

        128 Janssen Inc v. Teva Canada Ltd, 2018 FCA 33, dismissing the appeal from 2016 FC 593.

        129 The Federal Court had applied, and the Federal Court of Appeal affirmed the following four-part test for 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.

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

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

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

        133 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.

        134 Apotex Inc v. Shire LLC, 2018 FC 637.

        135 Genentech, Inc v. Amgen Canada Inc, 2017 FC 1023.

        136 Prescribed variations are:

        1. 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;
        2. a variation that is an enantiomer, or a mixture of enantiomers, of a medicinal ingredient;
        3. a variation that is a solvate or polymorph of a medicinal ingredient;
        4. an in vivo or in vitro post-translational modification of a medicinal ingredient; and
        5. e any combination of the variations set out in bullets a to d above.