Canadian Patent Law 2021: A round-up of interesting developments and court decisions

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2021 saw changes in Canadian patent legislation, and a variety of court decisions addressing rarely interpreted provisions of the Patent Act, early consideration of recently enacted provisions, and new takes on central tenets of patent law.

In this article, we highlight statutory changes and a selection of the most interesting patent cases reported in the 2021 calendar year.

We also recently published our review of 2021 Canadian Trademark Law developments, and in our RxIP Update we looked back on Highlights in Life Sciences IP and Regulatory Law.

Table of contents

College of Patent Agents and Trademark Agents Act

Most professions fall under provincial jurisdiction, and many have been self-regulated for years (e.g. lawyers and physicians). But patent and trademark law are matters of federal jurisdiction, and there is little experience with regulation of professions at the federal level. Historically, patent and trademark agents were qualified for practice pursuant to provisions of the Patent Act and Trademarks Act, under the oversight of the Canadian Intellectual Property Office (CIPO). Beyond initial qualification and annual renewal fees, there were no requirements for liability insurance, continuing education, compliance with a code of conduct, or the like.

This changed last year when the College of Patent Agents and Trademark Agents Act came into force on June 28, 2021, modernizing the patent and trademark agency professions. The Act establishes the College of Patent Agents and Trademark Agents (CPATA) to regulate the patent and trademark agent profession, including maintaining the registers of agents, administering agent qualifying examinations, collecting College fees, maintaining an agent code of conduct, establishing requirements for professional liability insurance, and establishing formal complaint, investigation, and discipline processes. For more information, visit the CPATA website.

Patentable Subject Matter – Patent Act Section 2

Apotex Inc v Janssen Inc, 2021 FCA 45

The Federal Court of Appeal dismissed Apotex’s appeal of a Federal Court decision that prohibited the Minister of Health from granting a Notice of Compliance to Apotex. The patent at issue was Canadian Patent No. 2,661,422, concerning treatment of prostate cancer with the combination of abiraterone acetate and prednisone.

In addition to attacking the validity of the patent on the basis of obviousness, Apotex asserted that the claimed combination was unpatentable because it did not possess “synergy” — i.e. the result of the whole being different than the sum of the result of the components. In the absence of synergy, there would be no patentable combination providing a “unitary result” but rather an unpatentable aggregation of elements.

If this is not a matter of novelty or obviousness, such an assertion is presumably grounded in section 2 of the Patent Act which defines the term “invention” as “any new and useful art, process, machine, manufacture or composition of matter” or improvement thereof. Something that does not fall with the definition of “invention” cannot be patented.

The Federal Court of Appeal upheld the Federal Court’s findings of unobviousness and that the claimed combination achieves results in the treatment of prostate cancer that are not achieved with either drug alone. On the latter point, the Court stated that the key consideration should be whether the combination offers something that was not already available to the public. As both challenges to the patent were dismissed, the Court did not decide whether a claimed combination could be found unobvious yet nevertheless fail to constitute patentable subject matter falling within the definition of “invention.” See our article about the decision in Apotex Inc v Janssen Inc.

Hoffmann-La Roche Limited v Sandoz Canada Inc, 2021 FC 384

Canada has no statutory exclusion of methods of medical treatment from subject matter eligibility (cf. Article 53(c) of the European Patent Convention). Moreover, the seminal 1974 Supreme Court of Canada decision on this issue was based on a provision of the Patent Act requiring claims to medicines to be made only in a product-by-process form that has been repealed for many years. But a prohibition on patenting methods of medical treatment lives on in Canada.

Claims directed to “uses” are nevertheless generally permitted. Such claims can still be found to constitute an unpatentable method of medical treatment, particularly when directed to a so-called “dosage regimen,” the issue being whether they “encroach on the skill and judgment” of a physician. The issue arises daily in patent prosecution practice before CIPO.

There are relatively few court decisions on the issue, and each case in this area warrants study.

Here, Canadian Patent Nos. 2,667,654 and 2,709,997 were found to be invalid as impermissibly claiming a method of medical treatment among other reasons. See our article about the decision in Hoffmann-La Roche Limited v Sandoz Canada Inc.

Privileged Communications – Patent Act, Section 16.1

Janssen Inc et al v Sandoz Canada Inc, 2021 FC 1265

Section 16.1 of the Patent Act came into force on June 24, 2016, establishing privilege in communications between patent agents and their clients. Corresponding amendments were made to the Trademarks Act to establish privilege in communications between trademark agents and their clients. The privilege established in section 16.1 is limited to communications “made for the purpose of seeking or giving advice with respect to any matter relating to the protection of an invention.”

The Federal Court held that section 16.1 does not apply to a patent agent’s advice as to whether certain compounds were outside the scope of claims of patent rights owned by a third party. The phrase “relating to the protection of an invention” in section 16.1 of the Patent Act does not extend to an analysis as to whether a product infringes third party patent rights, and the legislature did not express an intention to attach privilege to any and all communications between patent agents and their clients.

This case appears to raise significant questions as to whether privilege attaches to validity and infringement advice provided by agents rather than only advice relating to preparation and prosecution of patent applications.

Overbreadth – Patent Act Section 27(3) and 27(4)

Seedlings Life Science Ventures, LLC v Pfizer Canada ULC, 2021 FCA 154

Can a clear and definite patent claim directed to patent-eligible subject matter that is novel, unobvious, and fully described and enabled by the specification nevertheless fail for “overbreadth”? Stated differently, can a claim that complies with the express requirements for patentability set out in the Patent Act nevertheless be invalid if it somehow is “broader than the invention made”? The singular 1986 Amfac decision appears to answer this question in the affirmative albeit on unusual facts, and the Seedlings decision may provide some further support.

The Federal Court of Appeal dismissed an appeal of a Federal Court decision finding that certain claims of Seedlings’ LifeCard patent, Canadian Patent No. 2,486,935, were invalid and not infringed by Pfizer’s next-generation EpiPen. The Court maintained that all relevant claims of the patent were invalid on grounds of overbreadth, that some claims were anticipated and obvious, and further found that Federal Court should have concluded that the relevant claims were invalid for insufficiency. Notably, the Court of Appeal also maintained that overbreadth is indeed a proper and distinct ground of invalidity that must be considered separately.

The Court held that the doctrine of “overbreadth” finds statutory basis in the combined application of subsections 27(3) and 27(4) of the Patent Act. Subsection 27(3) requires the specification to, inter alia, “correctly and fully describe the invention and its operation and use” and describe the invention in terms that “enable any person skilled in the art…to make, construct, compound, or use it.” Subsection 27(4) provides that “[t]he specification must end with a claim or claims defining distinctly and in explicit terms the subject-matter of the invention for which an exclusive privilege or property is claimed.” But given that the Court held that the relevant claims were invalid for insufficiency alone (i.e. non-compliance with the description and enablement requirements of subsection 27(3)), this case still does not demonstrate conclusively that claims can fail exclusively for “overbreadth.” See our article about the decision in Seedlings Life Science Ventures, LLC v Pfizer Canada ULC.

Best Mode – Patent Act Section 27(3)(c)

Western Oilfield Equipment Rentals Ltd V M-I LLC, 2021 FCA 24

Paragraph 27(3)(c) of the Patent Act provides that the specification of an invention must “…in the case of a machine, explain the principle of the machine and the best mode in which the inventor has contemplated the application of that principle,” seemingly limiting the requirement to disclose the inventor’s best mode for practicing an invention to inventions concerning machines. Contrast this to the corresponding United States best mode requirement in 35 USC §112(a), more broadly requiring disclosure of “the best mode contemplated by the inventor or joint inventor of carrying out the invention.” The best mode requirement does not arise often in Canadian patent matters.

Dismissing Western Oilfield’s appeal of a Federal Court decision finding that certain claims of Canadian Patent No. 2,664,173 were valid and had been infringed, the Federal Court of Appeal noted that there is “considerable doubt” as to whether, despite the wording of paragraph 27(3)(c) of the Patent Act, the best-mode requirement is limited to machines.

Anticipation – Patent Act Section 28.2

Apotex Inc v Shire LLC, 2021 FCA 52

Much has been written on the patentability of a “selection” invention, in which a particular compound or group of compounds is claimed from within a larger grouping of compounds previously disclosed in general terms and claimed in an earlier genus patent.

The Federal Court of Appeal dismissed an appeal by Apotex from a Federal Court decision holding that the claims of Canadian Patent No. 2,527,646 were valid and prohibiting a Notice of Compliance from being issued by the Minister of Health to Apotex until the expiry of the patent.

The Court affirmed that the validity analysis does not change depending on whether a patent is classified as a selection patent or not. While characterizing a patent as a “selection” invention may assist the Court in understanding “the nature of the beast,” the focus of the anticipation and obviousness analysis remains on what the patent actually claims in comparison to what is disclosed in the prior art. Read our article on the Supreme Court of Canada denying leave to appeal and our article about the Federal Court of Appeal decision.

Obviousness – Patent Act Section 28.3

Apotex Inc v Shire LLC, 2021 FCA 52

As discussed above, the Federal Court of Appeal dismissed an appeal by Apotex from a Federal Court decision holding that the claims of Canadian Patent No. 2,527,646 were valid, and prohibiting a Notice of Compliance from being issued by the Minister of Health to Apotex until the expiry of the patent.

Although the requirement for “inventiveness” or “unobviousness” has long been part of Canadian patent law, it was only on October 1, 1996 that the Patent Act was amended to set forth a statutory requirement of unobviousness, newly added section 28.3 providing that “[t]he subject-matter defined by a claim in an application for a patent in Canada must be subject-matter that would not have been obvious on the claim date to a person skilled in the art or science to which it pertains, having regard to….”

In 2008, in a case concerning a patent predating section 28.3, the Supreme Court of Canada in Apotex Inc v Sanofi-Synthelabo Canada Inc 2008 SCC 61 (“Sanofi”) adopted an obviousness analysis requiring assessment of the “inventive concept” of a claim in question.

How does the requirement in section 28.3 of the Patent Act to assess obviousness based on the “subject-matter defined by a claim” fit with the Supreme Court’s requirement in Sanofi to identify the “inventive concept of the claim”?

Here, the Court confirmed that assessment of the “inventive concept” of a claim is a discrete exercise from claim construction. This was of particular importance in this case concerning claims to bare chemical compounds per se. Construction of the claims to determine what would constitute infringement would not take into account advantageous or surprising properties of the compounds not recited in the claims. The Court of Appeal held that Federal Court had not erred in taking into account advantageous properties of the claimed compounds in determining the inventive concept of the claims. More specifically, section 28.3 of the Patent Act does not narrow the “inventive concept” to the essential elements of the claim itself.

Further, the Court reaffirmed that, while the three non-exhaustive “obvious to try” factors enumerated by the Supreme Court of Canada in Sanofi, must all be explicitly considered in order to answer the overall question of whether it is “more or less self-evident to try to obtain the invention,” they need not all be met. See our article on the Supreme Court of Canada denied leave to appeal and read more about the Federal Court of Appeal decision.

Added Matter – Patent Act Section 38.2

Western Oilfield Equipment Rentals Ltd v M-I LLC, 2021 FCA 24

Section 38.2 of the Patent Act provides (inclusive of minor amendments effective October 30, 2019) that a patent application “may not be amended to add matter that cannot reasonably be inferred from the specification or drawings contained in the application on its filing date.” The question of added matter arises regularly during prosecution before CIPO but is rarely an issue before the courts.

As noted above, the Federal Court of Appeal dismissed Western Oilfield’s appeal of a Federal Court decision finding that certain claims of Canadian Patent No. 2,664,173 (the 173 patent) were valid and had been infringed. The appellants argued that the 173 patent was invalid on various grounds, including that some of the claims included added subject matter not reasonably inferable from the patent application as filed. Cautioning against the appellants’ submission that the strict U.K. approach to the admissibility of new subject matter should apply, the Federal Court of Appeal held that subsection 38.2(2) of the Patent Act allows for reasonable inference. The Federal Court did not err in finding that the claims in question were at least reasonably inferable from the original patent application.

Re-examination – Patent Act Sections 48.1-48.5

Teva Canada Innovation v Pharmascience Inc, 2021 FC 367

Any person may request re-examination of a claim in a Canadian patent by filing with CIPO prior art consisting of patents, applications for patents open to public inspection, and printed publications. The prior art must raise a substantial new question of patentability in order for CIPO to initiate re-examination. A re-examination request may be filed at any time during the term of a patent and may be filed anonymously. A person requesting re-examination has no involvement in the procedure beyond the initial filing of prior art and the explanation of its pertinency.

But what if there is contemporaneous litigation concerning the patent? Should CIPO re-examine the patent while a court is assessing its validity? The Patent Act and Patent Rules do not contemplate this possibility and provide no answer.

The Federal Court granted Teva’s motion for a stay of the ongoing re-examination proceeding before the Re-examination Board of CIPO with respect to Canadian Patent No. 2,760,802 until the discontinuance, settlement, or conclusion of all appeals from the related Federal Court judgment. See our article on the decision in Teva Canada Innovation v Pharmascience Inc.

Admissibility of Prosecution History in Evidence – Patent Act Section 53.1

Historically, and as confirmed by the Supreme Court of Canada, the prosecution history of a Canadian patent application before CIPO has not been admissible in court as an aid to construing the patent. For instance, the fact that a response to an Examiner’s Report during prosecution amended a claim to add a limitation in order to overcome a prior art rejection would not be dispositive as to whether that limitation was an “essential element” of the claim when construing the issued patent.

Section 53.1 of the Patent Act, enacted December 13, 2018, makes the prosecution history of a Canadian patent admissible in evidence in certain circumstances. More specifically, subsection 53.1(1) provides:

In any action or proceeding respecting a patent, a written communication, or any part of such a communication, may be admitted into evidence to rebut any representation made by the patentee in the action or proceeding as to the construction of a claim in the patent if

(a) it is prepared in respect of

(i) the prosecution of the application for the patent,
(ii) a disclaimer made in respect of the patent, or
(iii) a request for re-examination, or a re-examination proceeding, in respect of the patent; and

(b) it is between

(i) the applicant for the patent or the patentee; and
(ii) the Commissioner, an officer or employee of the Patent Office or a member of a re-examination board.

This recent provision was considered in three decisions in 2021.

CanMar Foods Ltd v TA Foods Ltd, 2021 FCA 7

The Federal Court of Appeal dismissed CanMar’s appeal of a Federal Court decision granting TA Foods’ motion for summary judgment and dismissing CanMar’s patent infringement action. Holding that the Federal Court should have refrained from taking into consideration foreign prosecution history (in this instance the corresponding USPTO prosecution history) in the circumstances of this case, the Court warned against extending the detailed language of section 53.1, which is limited to communications between the patentee and the Canadian Patent Office. That said, the Court made clear that they had no firm views on whether foreign prosecution history could ever be considered under section 53.1.

Western Oilfield Equipment Rentals Ltd v M-I LLC, 2021 FCA 24

As discussed above, the Federal Court of Appeal dismissed Western Oilfield’s appeal of a Federal Court decision finding that certain claims of Canadian Patent No. 2,664,173 were valid and had been infringed. The Court clarified that, although the appellants referred to it as the “file wrapper estoppel” provision, section 53.1(1) does not refer to an estoppel. Rather, the provision provides that certain communications between a patentee or applicant and the Patent Office pertaining to a patent or a patent application may be admissible as evidence in certain circumstances.

Bauer Hockey Ltd v Sport Maska Inc (CCM Hockey), 2021 FCA 166

Although not necessary to its conclusions on obviousness, the Federal Court of Appeal discussed section 53.1. Rejecting the trial judge’s broad interpretation that section 53.1 applies provided the issue is one of claims construction, the Court stated that certain portions of a patent’s prosecution history may be admissible only "to rebut any representation made by the patentee in the action or proceeding as to the construction of a claim in the patent." The purpose of the section is to be a tool against patentees who take one position concerning the meaning of a claim during prosecution of a patent application, and another during litigation on the resulting patent.

Liability for Patent Infringement – Patent Act Subsection 55(1)

McCain Foods Limited v J.R. Simplot Company, 2021 FCA 4

Subsection 55(1) of the Patent Act provides that “[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.”

The defendants, who were alleged to have infringed McCain’s Canadian Patent No. 2,412,841, made a third party claim under subsection 55(1) against a supplier of the technology used by the defendants in the alleged infringement. Striking the third-party claim in its entirety, the Federal Court of Appeal held that the defendants lacked standing. Subsection 55(1) contemplates an infringer's liability "to the patentee and to all persons claiming under the patentee." As an infringer (according to the theory of its third-party claim), the defendants derived no rights from the patentee, and therefore could not reasonably be considered to be a person “claiming under the patentee.”

Liability for damage before patent is granted – Patent Act Subsection 55(2)

Western Oilfield Equipment Rentals Ltd v M-I LLC, 2021 FCA 24

Subsection 55(2) of the Patent Act provides that an infringer is liable to pay reasonable compensation to a patentee for any damage sustained by the patentee by reason of any act by the infringer occurring after the application is open for public inspection (18 months from the priority date) and before grant of the patent, if that act would have constituted an infringement of the patent if the patent had been granted on the date the application was open for public inspection.

As discussed above, the Federal Court of Appeal dismissed Western Oilfield’s appeal of a Federal Court decision finding that certain claims of Canadian Patent No. 2,664,173 were valid and had been infringed.

In its infringement analysis, the Court dealt with whether a party who engages in pre-grant infringement can avoid liability under subsection 55(2) by discontinuing the infringing activities prior to issuance of the patent, and whether liability under subsection 55(2) extends to a party whose pre-issuance infringement is by inducement.

The Court found that it would defeat the purpose of the provision if a party could avoid liability by discontinuing the activities before the patent issues or by inducing others to directly infringe.

Factors to be considered for Excessive Prices – Patent Act Section 85

Alexion Pharmaceuticals Inc v Canada (Attorney General), 2021 FCA 157

The Patented Medicine Prices Review Board (PMPRB) is established under the Patent Act and can make orders concerning excessive prices of patented medicines in Canada.

In 2017, the PMPRB found that Alexion’s SOLIRIS was excessively priced under section 85 of the Patent Act. In 2019, the Federal Court dismissed Alexion’s application for judicial review (see our article regarding the Federal Court decision). On appeal, The Federal Court of Appeal found that the PMPRB’s decision was unreasonable and remitted the excessive pricing decision to the PMPRB for redetermination. The Court expressed concerns that the PMPRB did not provide adequate reasons for its decision and misunderstood its mandate under the Patent Act. The excessive pricing provisions in the Patent Act are directed at controlling patent abuse, not reasonable pricing, price-regulation or consumer protection at large. Canada (Attorney General) has applied to the Supreme Court of Canada for leave to appeal. See our previous article regarding the Federal Court of Appeal decision.

30-day Time Limit – Patented Medicines (Notice of Compliance) Regulations Section 4(6)

Merck Canada Inc v Canada (Health), 2021 FCA 224

The Federal Court of Appeal affirmed a Federal Court decision ( 2021 FC 345) dismissing Merck’s application for judicial review of the Minister of Health’s refusal to list Canadian Patent No. 2,830,806 on the Patent Register pursuant to subsection 4(6) of the PM(NOC) Regulations. Subsection 4(6) requires a patent list to be submitted to Health Canada within 30 days of issuance of the patent. The Federal Court of Appeal found that the Minister’s refusal to extend the 30-day time limit was reasonable. See our article about the Federal Court of Appeal decision.

Remedies – Patented Medicines (Notice of Compliance) Regulations Section 8

Apotex Inc v Eli Lilly Canada Inc, 2021 ONSC 1588

The Ontario Superior Court of Justice granted a summary judgment motion dismissing Apotex’s claims for damages under common law, Ontario’s Statutes of Monopolies, and the Trademarks Act. The Court confirmed that the Patent Act and the Patented Medicines (Notice of Compliance) Regulations constitute a complete code and that Apotex is limited to the remedies available under section 8 of the Regulations. See our article and read more about the decision.

Apotex Inc v Pfizer Ireland Pharmaceuticals, 2021 ONSC 6345

The Ontario Superior Court of Justice granted a summary judgment motion dismissing Apotex’s claims for treble damages and double costs under statutory and common law causes of action, i.e. Ontario’s Statutes of Monopolies, and the common law of torts of conspiracy, unjust enrichment and nuisance. Again, the Court confirmed that the Patent Act and the Patented Medicines (Notice of Compliance) Regulations constitute a complete code and that Apotex is limited to the remedies available under section 8 of the Regulations. See our article about the Ontario Court decision.

Eligible Patents – Certificate of Supplementary Protection Regulations Subsection 3(2)

Canada’s Certificate of Supplementary Protection (CSP) regime came into force on September 21, 2017, consequent to Canada’s commitments under the Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union. CSPs can provide up to two years of supplementary protection for patents relating to drugs for which marketing authorization in Canada has been delayed. Canada previously did not have any form of patent term adjustment, extension, or supplementary protection. The European Union already provided supplementary protection by way of its Supplementary Protection Certificate (SPC) system.

There have now been a few cases interpreting the CSP provisions of the Patent Act and the Certificate of Supplementary Protection Regulations, including some in 2021.

Canada (Health) v Glaxosmithkline Biologicals S.A., 2021 FCA 71

Pursuant to subsection 3(2) of the Certificate of Supplementary Protection Regulations, one of the bases on which a patent may be eligible for a CSP is it contains “a claim for the medicinal ingredient or combination of all the medicinal ingredients” contained in the relevant drug.

The Federal Court had set aside the Minister of Health’s decision refusing to grant a CSP to GSK in respect of Canadian Patent No. 2,600,905 and its drug SHINGRIX, a vaccine for shingles. The Minister had concluded that patent claims reciting both the virus antigen and an adjuvant were not claims for the medicinal ingredient per se.

In its first appellate decision on Certificates of Supplementary Protection (CSP), the Federal Court of Appeal unanimously found that the Minister of Health’s refusal to grant a CSP was reasonable, setting aside the Federal Court decision (2020 FC 397). See our article about the Federal Court of Appeal decision.

12-month Prescribed Period – Certificate of Supplementary Protection Regulations Section 6(1) and Patent Act Paragraphs 106(1)(c) and (f)

Merck Canada Inc v Canada (Health), 2021 FC 1015

A CSP is available only if the Canadian application for marketing authorization is filed within 12 months of the first application for marketing authorization amongst prescribed foreign countries.

Merck’s Canadian application for marketing authorization (i.e. a new drug submission (NDS)) for the drug BELSOMRA (suvorexant) was filed within 12 months of its first application for approval filed with the United States FDA. However, Merck withdrew the NDS after it was unable to provide further data required by Health Canada and subsequently filed a second NDS, outside the 12-month window. Health Canada rejected Merck’s CSP application referencing the first NDS as it did not result in a marketing authorization.

The Federal Court found the Minister of Health’s refusal to grant Merck a CSP was unreasonable and remitted the CSP application for redetermination. The Minister of Health failed to address Merck’s arguments concerning the purpose and object of the CSP provisions in the context of Canada’s obligations under CETA. See our article here to read more about the Federal Court decision.

Civil Procedure – Summary Judgment / Summary Trial

CanMar Foods Ltd v TA Foods Ltd, 2021 FCA 7

The Federal Court of Appeal affirmed a Federal Court decision granting a summary judgment motion dismissing CanMar’s patent infringement claim on the basis of non-infringement. Notably, the Court affirmed that expert evidence is not always required for the Court to properly construe the claims of the patent at issue.

ViiV Healthcare Company v Gilead Sciences Canada, Inc, 2021 FCA 122

The Federal Court of Appeal affirmed a Federal Court decision ( 2020 FC 486) granting summary judgment, by way of summary trial, dismissing Viiv’s patent infringement claim against Gilead. The decision provided commentary on the summary trial process. See our article about the Federal Court of Appeal decision.

Stay tuned

Stay tuned to our IP Updates and RxIP Updates for Canadian patent law developments in 2022!

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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