Patent infringement in Canadian law

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Once an invention is patented in Canada, exclusive rights are granted to the patent holder as defined by s.42 of the Patent Act (R.S.C., 1985, c. P-4). [1] Any interference with the patent holder's "full enjoyment of the monopoly granted by the patent" is considered a patent infringement. [2] Making, constructing, using, or selling a patented invention without the patent holder's permission can constitute infringement. [1] Possession of a patented object, [3] use of a patented object in a process, [4] and inducement or procurement of an infringement [5] may also, in some cases, count as infringement.

Canadian patent law is the legal system regulating the granting of patents for inventions within Canada, and the enforcement of these rights in Canada.

Canada Country in North America

Canada is a country in the northern part of North America. Its ten provinces and three territories extend from the Atlantic to the Pacific and northward into the Arctic Ocean, covering 9.98 million square kilometres, making it the world's second-largest country by total area. Canada's southern border with the United States, stretching some 8,891 kilometres (5,525 mi), is the world's longest bi-national land border. Its capital is Ottawa, and its three largest metropolitan areas are Toronto, Montreal, and Vancouver. As a whole, Canada is sparsely populated, the majority of its land area being dominated by forest and tundra. Consequently, its population is highly urbanized, with over 80 percent of its inhabitants concentrated in large and medium-sized cities, with 70% of citizens residing within 100 kilometres (62 mi) of the southern border. Canada's climate varies widely across its vast area, ranging from arctic weather in the north, to hot summers in the southern regions, with four distinct seasons.

The Patent Act is Canadian federal legislation and is one of the main pieces of Canadian legislation governing patent law in Canada. It sets out the criteria for patentability, what can and cannot be patented in Canada, the process for obtaining a Canadian patent, and provides for the enforcement of Canadian patent rights.

Contents

Canadian Statute

In Canada, patents are governed by the Patent Act. Section 42 of the Patent Act establishes the rights of a patent holder:

42. Every patent granted under this Act shall contain the title or name of the invention, with a reference to the specification, and shall, subject to this Act, grant to the patentee and the patentee’s legal representatives for the term of the patent, from the granting of the patent, the exclusive right, privilege and liberty of making, constructing and using the invention and selling it to others to be used, subject to adjudication in respect thereof before any court of competent jurisdiction. [1]

By granting the patent holder the exclusive right, privilege and liberty of making, constructing, using, and selling the invention, the patent act establishes that any other person making, constructing, using, or selling the patented invention is infringing that patent. Whether there has been an infringement of a patent is usually a question of fact. [6]

The Patent Act is a federal statute and thus bilingual. Under the Constitution Act, 1982, both the English and French versions of the statute hold equal status before the courts. [7] The terms "making, constructing, using, and selling" should be read in the context of their French counterparts, "fabriquer, construire, exploiter et vendre". [1] This has affected the interpretation of the term "use" in cases involving patent infringement. [8]

Canadian federalism involves the current nature and historical development of federal systems in Canada.

Official bilingualism in Canada mandate that the federal government of Canada conduct its business and provide services in English and French

The official languages of Canada are English and French, which "have equality of status and equal rights and privileges as to their use in all institutions of the Parliament and Government of Canada," according to Canada's constitution. "Official bilingualism" is the term used in Canada to collectively describe the policies, constitutional provisions, and laws that ensure legal equality of English and French in the Parliament and courts of Canada, protect the linguistic rights of English and French-speaking minorities in different provinces, and ensure a level of government services in both languages across Canada.

The Constitution Act, 1982 is a part of the Constitution of Canada. The Act was introduced as part of Canada's process of patriating the constitution, introducing several amendments to the British North America Act, 1867, including re-naming it the Constitution Act, 1867.. In addition to patriating the Constitution, the Constitution Act, 1982 enacted the Canadian Charter of Rights and Freedoms; guaranteed rights of the Aboriginal peoples of Canada; provided for future constitutional conferences; and set out the procedures for amending the Constitution in the future.

Making, constructing, and selling

Before an infringement can be established, it is necessary to construct the claims to determine what elements of the invention are essential and which are non-essential. Once the essential elements are established, making, constructing or selling something that copies the essential elements will be considered infringing. [6]

Purposive construction of claims

Canadian patents should be given a purposive construction. The words used by the inventor are read in a manner consistent with what it is presumed the inventor intended; the interpretation should be sympathetic to the express or implicit purpose of the patent. [9] The inventor's intent must be based on the patent, the court is not allowed to use extrinsic evidence of the inventor's intent. [10] Courts should not take a purely literal interpretation of the patent, courts should determine whether a Person Skilled in the Art would conclude that strict adherence was essential or that a substitute or slight variation would not affect the invention. [11] A person skilled in the art is a Canadian legal fiction used in patent law that is meant to denote someone of practical skill and knowledge in the subject matter of the patent, such as a technician. [12] A Person Skilled in the Art is similar to the American standard of Person Having Ordinary Skill in the Art .

A legal fiction is a fact assumed or created by courts which is then used in order to help reach a decision or to apply a legal rule. The concept is used almost exclusively in common law jurisdictions, particularly in England.

United States Federal republic in North America

The United States of America (USA), commonly known as the United States or America, is a country comprising 50 states, a federal district, five major self-governing territories, and various possessions. At 3.8 million square miles, the United States is the world's third or fourth largest country by total area and is slightly smaller than the entire continent of Europe's 3.9 million square miles. With a population of over 327 million people, the U.S. is the third most populous country. The capital is Washington, D.C., and the largest city by population is New York City. Forty-eight states and the capital's federal district are contiguous in North America between Canada and Mexico. The State of Alaska is in the northwest corner of North America, bordered by Canada to the east and across the Bering Strait from Russia to the west. The State of Hawaii is an archipelago in the mid-Pacific Ocean. The U.S. territories are scattered about the Pacific Ocean and the Caribbean Sea, stretching across nine official time zones. The extremely diverse geography, climate, and wildlife of the United States make it one of the world's 17 megadiverse countries.

A person having ordinary skill in the art, a person of (ordinary) skill in the art, a person skilled in the art, a skilled addressee or simply a skilled person is a legal fiction found in many patent laws throughout the world. This fictional person is considered to have the normal skills and knowledge in a particular technical field, without being a genius. He or she mainly serves as a reference for determining, or at least evaluating, whether an invention is non-obvious or not, or involves an inventive step or not. If it would have been obvious for this fictional person to come up with the invention while starting from the prior art, then the particular invention is considered not patentable.

A patented invention is thus separated into essential and non-essential elements. For an element to be classified as non-essential, it must be true that either:

  1. The words, interpreted purposively, make it clear that the element is not essential, or
  2. That, as of the date of publication, a person skilled in the art would have known of a substitute or variation that would not have affected how the invention works [13]

Any element that is not classified as non-essential is considered essential. It is important to note that if a patent is clear that an element is essential, then that element will be essential even if, at the time of publication of the patent, an element could be easily substituted or varied. [14]

Infringement

It is an infringement to make, construct, or sell a thing that copies the essential elements of a patented invention without permission. Substitution or omission of a non-essential elements is not sufficient to make something non-infringing. [11] The Canadian patent holder thus receives protection "against a device that performs substantially the same function in substantially the same way to obtain substantially the same result", [15] similar to the protection available to an American patent holder under the doctrine of equivalents.

Once the essential elements of the patented invention are established, determining whether there is an infringement is simply an exercise in comparison between the allegedly infringing thing and the patented invention. [6] If the essential elements of the patented invention are present in the thing in issue, then that thing is infringing.

In general, a defendant's intention is not relevant in establishing an infringement: the fact of infringement is sufficient. An exception arises in cases of infringement by possession. You can rebut a claim of infringement by possession by showing there was no intent to use or benefit from that possession. [16]

Using

Cases alleging infringement based on "use" require special attention due to the difficulty in interpreting the term "use". Interpretation of the term "use" begins with the plain meaning of the words "use" and its French complement "exploiter". "Exploiter" was found to lend clarification to the term "use" in patent law, leading to a definition of "utilization with a view to production or advantage". [17] Following the rules of statutory interpretation, this plain meaning of "use" was interpreted based on the purpose of the Patent Act, the context of the other words in the provision, and the wisdom of case law. [18] In the context of patent infringement, "use" is defined as any activity that "deprives the inventor in whole or in part, directly or indirectly, of full enjoyment of the monopoly conferred by law". [19]

The court, in Monsanto Canada Inc. v. Schmeiser , summarizes the interpretation of "use": [3]

  1. "Use" or "exploiter", in their ordinary dictionary meaning, denote utilization with a view to production or advantage.
  2. The basic principle in determining whether the defendant has "used" a patented invention is whether the inventor has been deprived, in whole or in part, directly or indirectly, of the full enjoyment of the monopoly conferred by the patent.
  3. If there is a commercial benefit to be derived from the invention, it belongs to the patent holder.
  4. It is no bar to a finding of infringement that the patented object or process is a part of or composes a broader unpatented structure or process, provided the patented invention is significant or important to the defendant's activities that involve the unpatented structure.
  5. Possession of a patented object or an object incorporating a patented feature may constitute "use" of the object's stand-by or insurance utility and thus constitute infringement.
  6. Possession, at least in commercial circumstances, raises a rebuttable presumption of "use".
  7. While intention is generally irrelevant to determining whether there has been "use" and hence infringement, the absence of intention to employ or gain any advantage from the invention may be relevant to rebutting the presumption of use raised by possession.

The court also found that "use" applies to products, processes, and their outputs - even if the output itself is unprotected. [20] This includes output where the patented invention is an intermediary in a production process. [21] This means that an imported, unpatented object may still infringe a patent if its production infringed the patent.

"Use" can also be established when the invention is not used for its intended process. It is sufficient to show that the invention was used to the defendant's benefit. Deriving a benefit from a patented invention is deemed to deprive the patent holder from full enjoyment of the monopoly. [20]

As a part or composition

It is considered an infringement to manufacture, use, or even seek to use an unpatented object without permission if part of that object is patented, and the patented part is significant or important. [22] The patented part must be significant or important because it must be shown that it is used when the encompassing unpatented object is used. In Monsanto Canada Inc. v. Schmeiser , it was found that the use of a plant which contained patented genes and cells constitutes infringing use of the patented genes and cells. [22]

Possession

Monsanto Canada Inc. v. Schmeiser [23] established that possession may be sufficient for infringement if some value is derived from the act of possession. It was found that possession can grant an "insurance value" to the possessor. Examples include emergency equipment or backups in case of failure. Monsanto also found that the defendant's use of a genetically modified crop was infringing even though the defendant did not use the genetic benefit (a resistance to a pesticide) - it was sufficient to show that the defendant had a benefit in case it became necessary to take advantage of the benefit. The benefit received by the defendant in cases of possession correspond to a deprivation of the patent holder's full enjoyment of the monopoly and is thus an infringement of the patent.

In general, a defendant's intention is not relevant in establishing an infringement; however, intent does become important when infringement is alleged through possession. There must be an intent to use the patented article for there to be a corresponding detriment to the patent holder and thus an infringement. Possession creates a presumption of intention to use; the burden is on the defendant to rebut this presumption. [24]

Output from a patented process or product

A patent holder's rights extend to articles that were manufactured in a manner that infringed the patent. This protection extends to use of patented processes or products including intermediaries. [25] The court in Pfizer Canada Inc. v. Canada (Health), [26] found that a finding of infringement should be based on the nature of the invention and the extent to which it was used in production. The court outlined the following factors in determining whether there is an infringement:

The court concludes that a "strong link" must be "established between the use of the patented process or product and the product sold into Canada."

Inducement or contributory infringement

It is a patent infringement to induce someone else to infringe a patent. A patent can be a composition of unpatented components; the patent would cover the inventive step of selecting and assembling those components. Manufacture of the unpatented components would not be an infringement of the patent unless the manufacturer induces the recipient of those components to infringe the patent.

Windsurfing International Inc. v. Trilantic Corp. [5] dealt with a manufacturer selling the unassembled components of a patented sailboard. In the court's decision, Urie J stated:

Without assembly there can be no purpose in a purchaser buying the unassembled parts since, unassembled, they cannot be used for the purpose for which they are purchased, that is, to sail. To suggest that a patent infringement suit can be successfully avoided by selling parts as components of a kit in contradistinction to their sale assembled is, in my view, errant nonsense.

In MacLennan v. Produits Gilbert Inc., [27] the court established a three-pronged test to determine whether there has been an inducement:

  1. There must be an act of infringement by the direct infringer.
  2. This act must be influenced by the seller to the point where, without this influence, infringement by the buyer would not otherwise take place.
  3. The influence must be knowingly exercised by the seller, i.e., the seller knows that this influence will result in the completion of the act of infringement.

Unlike in America and Britain, it is not an infringement to produce or sell an unpatented replacement part, even if the only possible use for that replacement part is in a patented invention. [28] To establish indirect infringement, it must be shown that the alleged inducer knowingly exercised influence that he or she knew would result in direct infringement. [29]

In MacLennan v. Produits Gilbert Inc., [30] the manufacturer of replacement parts was found to have knowingly induced patent infringement by indicating its intended use in its competitor's product when selling the components.

Standing: Right to Sue

Subsection 55(1) of the Patent Act provides standing to the patentee and any person "claiming under" the patentee to sue for damages:

55. (1) A person who infringes a patent is liable to the patentee and to all persons claiming under the patentee for all damage sustained by the patentee or by any such person, after the grant of the patent, by reason of the infringement. [31]

The question of who qualifies as a person "claiming under" a patentee has been analyzed numerous times by Canadian courts. In particular, the Supreme Court of Canada has confirmed that a non-exclusive licensee may sue for patent infringement. [32]

In another leading case, the Federal Court of Appeal broadened the pool of persons "claiming under" the patentee:

[...] a person “claiming under” the patentee is a person who derives his rights to use the patented invention, at whatever degree, from the patentee. The right to use an invention is one the monopoly to which is conferred by a patent. When a breach of that right is asserted by a person who can trace his title in a direct line back to the patentee, that person is “claiming under” the patentee. It matters not by what

technical means the acquisition of the right to use may have taken place. It may be a straightforward assignment or a licence. It may, as I have indicated, be a sale of an article embodying the invention. It may also be a lease thereof. What matters is that the claimant asserts a right in the monopoly and that the source of that right may be

traced back to the patentee. [...] [33]

Significant Canadian patent cases

See also

Related Research Articles

Patent infringement is the commission of a prohibited act with respect to a patented invention without permission from the patent holder. Permission may typically be granted in the form of a license. The definition of patent infringement may vary by jurisdiction, but it typically includes using or selling the patented invention. In many countries, a use is required to be commercial to constitute patent infringement.

Graver Tank & Manufacturing Co. v. Linde Air Products Co., 339 U.S. 605 (1950), was an important United States Supreme Court decision in the area of patent law, establishing the propriety of the doctrine of equivalents, and explaining how and when it was to be used.

The exhaustion doctrine, also referred to as the first sale doctrine, is a U.S. common law patent doctrine that limits the extent to which patent holders can control an individual article of a patented product after a so-called authorized sale. Under the doctrine, once an authorized sale of a patented article occurs, the patent holder's exclusive rights to control the use and sale of that article are said to be "exhausted," and the purchaser is free to use or resell that article without further restraint from patent law. However, under the repair and reconstruction doctrine, the patent owner retains the right to exclude purchasers of the articles from making the patented invention anew, unless it is specifically authorized by the patentee to do so.

Catnic Components Ltd. v. Hill & Smith Ltd. [1982] R.P.C. 183 is a leading House of Lords decision on the nature of a patent and in particular the methods of claim construction.

In the United Kingdom, a patent provides its proprietor with the right to exclude others from utilizing the invention claimed in that patent. Should a person utilize that invention, without the permission of the patent proprietor, they may infringe that patent.

Quanta Computer, Inc. v. LG Electronics, Inc., 553 U.S. 617 (2008), is a decision of the United States Supreme Court in which the Court reaffirmed the validity of the patent exhaustion doctrine, and in doing so made uncertain the continuing precedential value of a line of decisions in the Federal Circuit that had sought to limit Supreme Court exhaustion doctrine decisions to their facts and to require a so-called "rule of reason" analysis of all post-sale restrictions other than tie-ins and price fixes. In the course of restating the patent exhaustion doctrine, the Court held that the exhaustion doctrine is triggered by, among other things, an authorized sale of a component when the only reasonable and intended use of the component is to practice the patent and the component substantially embodies the patented invention by embodying its essential features. The Court also overturned, in passing, the part of decision below that held that the exhaustion doctrine was limited to product claims and did not apply to method claims.

United States v. Univis Lens Co., 316 U.S. 241 (1942), is a decision of the United States Supreme Court explaining the exhaustion doctrine and applying it to find an antitrust violation because Univis's ownership of patents did not exclude its restrictive practices from the antitrust laws. The Univis case stands for the proposition that when an article sold by a patent holder or one whom it has authorized to sell it embodies the essential features of a patented invention, the effect of the sale is to terminate any right of the patent holder under patent law to control the purchaser's further disposition or use of the article itself and of articles into which it is incorporated as a component or precursor.

United States v. General Electric Co., 272 U.S. 476 (1926), is a decision of the United States Supreme Court holding that a patentee who has granted a single license to a competitor to manufacture the patented product may lawfully fix the price at which the licensee may sell the product.

A post-sale restraint, also termed a post-sale restriction, as those terms are used in United States patent law and antitrust law, is a limitation that operates after a sale of goods to a purchaser has occurred and purports to restrain, restrict, or limit the scope of the buyer's freedom to utilize, resell, or otherwise dispose of or take action regarding the sold goods. Such restraints have also been termed "equitable servitudes on chattels".

In Canada, every patent application must include the “specification”. The patent specification has three parts: the disclosure, the claims, and the abstract. The contents of the specification are crucial in patent litigation.

A patent holder in Canada has the exclusive right, privilege and liberty to making, constructing, using and selling the invention for the term of the patent, from the time the patent is granted. Any person who does any of these acts in relation to an invention without permission of the patent owner is liable for patent infringement.

Morton Salt Co. v. G.S. Suppiger Co., 314 U.S. 488 (1942), is a patent misuse decision of the United States Supreme Court. It was the first case in which the Court expressly labeled as "misuse" the Motion Picture Patent/Carbice tie-in defense to a charge of patent infringement and created the present blanket remedy in infringement cases of unenforceability of the misused patent. The decision re-emphasized that misuse can be found without finding an antitrust violation.

Carbice Corp. v. American Patents Development Corp., 283 U.S. 27 (1931), is a decision of the United States Supreme Court extending the patent misuse doctrine against tie-ins to cases in which patents were used to tie the purchase of unpatented elements of patented combinations. The Court had previously held that it was unlawful to require the purchase of supplies as a condition of a patent license, where the supplies were not claimed as part of the patented combination.

Motion Picture Patents Co. v. Universal Film Mfg. Co., 243 U.S. 502 (1917), is United States Supreme Court decision that is notable as an early example of the patent misuse doctrine. It held that, because a patent grant is limited to the invention described in the claims of the patent, the patent law does not empower the patent owner, by notices attached to the patented article, to extend the scope of the patent monopoly by restricting the use of the patented article to materials necessary for their operation but forming no part of the patented invention, or to place downstream restrictions on the articles making them subject to conditions as to use. The decision overruled The Button-Fastener Case, and Henry v. A.B. Dick Co., which had held such restrictive notices effective and enforceable.

<i>Button-Fastener case</i>

The Button-Fastener Case, Heaton-Peninsular Button-Fastener Co. v. Eureka Specialty Co., also known as the Peninsular Button-Fastener Case, was for a time a highly influential decision of the United States Court of Appeals for the Sixth Circuit. Many courts of appeals, and the United States Supreme Court in the A.B. Dick case adopted its "inherency doctrine"—"the argument that, since the patentee may withhold his patent altogether from public use, he must logically and necessarily be permitted to impose any conditions which he chooses upon any use which he may allow of it." In 1917, however, the Supreme Court expressly overruled the Button-Fastener Case and the A.B. Dick case, in the Motion Picture Patents case.

Leitch Manufacturing Co. v. Barber Co., 302 U.S. 458 (1938), is a 1938 decision of the United States Supreme Court extending the tie-in patent misuse doctrine to cases in which the patentee does not use an explicit tie-in license but instead relies on grants of implied licenses to only those who buy a necessary supply from it.

The Mercoid cases—Mercoid Corp. v. Mid-Continent Investment Co., 320 U.S. 661 (1944), and Mercoid Corp. v. Minneapolis-Honeywell Regulator Co., 320 U.S. 680 (1944)—are 1944 patent tie-in misuse and antitrust decisions of the United States Supreme Court. These companion cases are said to have reached the "high-water mark of the patent misuse doctrine." The Court substantially limited the contributory infringement doctrine by holding unlawful tie-ins of "non-staple" unpatented articles that were specially adapted only for use in practicing a patent, and the Court observed: "The result of this decision, together with those which have preceded it, is to limit substantially the doctrine of contributory infringement. What residuum may be left we need not stop to consider." The Court also suggested that an attempt to extend the reach of a patent beyond its claims could or would violate the antitrust laws: "The legality of any attempt to bring unpatented goods within the protection of the patent is measured by the antitrust laws, not by the patent law."

Dawson Chemical Co. v. Rohm & Haas Co., 448 U.S. 176 (1980), is a 1980 5-4 decision of the United States Supreme Court limiting the patent misuse doctrine and explaining the scope of the 1952 amendment of the patent laws that resurrected the contributory infringement doctrine in the wake of the Mercoid cases. The Mercoid cases and a few predecessor cases had denied relief against patent infringement to patentees who were deriving revenue from the sale of unpatented products used as supplies for patented combinations or as components of patented combinations, even when the unpatented products were specially adapted for use with the patented combinations and even when they lacked any utility other than that use. The patentees used contributory infringement suits or threats of such suits to enforce their business model, which the Mercoid cases outlawed.

<i>United States v. Vehicular Parking Ltd.</i>

United States v. Vehicular Parking Ltd. is a patent–antitrust case in which the United States Government eroded the doctrine of United States v. General Electric Co. permitting patentees to fix licensee prices, but failed to persuade the court to decree royalty-free licensing as a remedy.

References

  1. 1 2 3 4 "Patent Act (R.S.C., 1985, c. P-4)". s. 42.
  2. ↑ Monsanto, par. 34
  3. 1 2 Monsanto, par. 58
  4. ↑ Pfizer, par. 90
  5. 1 2 Windsurfing International Inc. v. Trilantic Corp. (1986), 8 C.P.R. (3d) 241
  6. 1 2 3 Monsanto, par. 30
  7. ↑ "Constitution Act, 1982". s.16.
  8. ↑ Monsanto, par. 36
  9. ↑ Free World Trust, par. 50
  10. ↑ Free World Trust, par. 31
  11. 1 2 Whirlpool Corp., par. 44–48
  12. ↑ Beloit Canada Ltd. et al v Valmet Oy, (1986), 8 C.P.R. (3d) 289
  13. ↑ Free World Trust, par. 55
  14. ↑ Free World Trust, par. 51
  15. ↑ Free World Trust, par. 28
  16. ↑ Monsanto, par. 52
  17. ↑ Monsanto, par. 31
  18. ↑ Monsanto, par. 32
  19. ↑ Monsanto, par. 35
  20. 1 2 Monsanto, par. 41
  21. ↑ Pfizer, par. 78–79
  22. 1 2 Monsanto, par. 42
  23. ↑ Monsanto, par. 47–49
  24. ↑ Monsanto, par. 50–53
  25. ↑ Pfizer, par. 88
  26. ↑ Pfizer, par. 88–90
  27. ↑ MacLennan, par. 13
  28. ↑ MacLennan, par. 20
  29. ↑ MacLennan, par. 38
  30. ↑ MacLennan, par. 41–43
  31. ↑ "Patent Act (R.S.C., 1985, c. P-4)". s. 55(1).
  32. ↑ Armstrong Cork Canada v. Domco Industries Ltd. 1982 CanLII 185 , [1982] 1 SCR 907(23 June 1982)
  33. ↑ Signalisation de Montréal Inc. v. Services de Béton Universels Ltée 1992 CanLII 2427 , [1993] 1 FC 341(21 December 1992), Federal Court of Appeal (Canada)
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