Canada: Intellectual Property Weekly Abstracts Bulletin - Week Of February 6, 2012

Last Updated: February 13 2012

Edited by Chantal Saunders and Beverley Moore

PATENT ACTIONS

Court Invalidates Helicopter Landing Gear Claims for Lack of Sound Prediction; However Awards Punitive Damages re Infringed Claim

Eurocopter v. Bell Helicopter Textron Canada Limitée

Infringement of several claims of a patent was alleged regarding two models of helicopter landing gear. Counterclaims alleged invalidity of the patent on the basis of anticipation, obviousness, lack of utility or of sound prediction, insufficiency, lack of best mode and overbreadth.

One model was found not to infringe, while the other was found to infringe the patent. The regulatory and common law experimental exceptions were not available, as the Court held that at least one of the twenty-one gears at issue was used on a non-test aircraft, and was in a display at a trade show, used to solicit orders amounting to $6 million in deposits. Thus, the Court held that the landing gear at issue was not used "solely for uses reasonably related to the development and submission of information required by law."

When the Court considered the validity allegations, anticipation was dismissed with the Gillette defence. With respect to obviousness, only one independent and two dependent claims were at issue. The remaining dependent claims were admitted not to disclose anything novel over claim 1. However, the claims were found not to be invalid for obviousness. The Court also held that the allegations regarding insufficiency were specious.

Regarding the allegations as to inutility, the Court held that unless a claim specifically refers to a particular use, "the requirement for utility of the patented invention should not be confused with any necessity to put it directly or by inference in the claims". In this case, the Court held that the patent promised to significantly reduce the drawbacks of the prior art. The Court held that Bell had not proven that the invention will not work. However, regarding specific allegations of a lack of sound prediction, the Court held that there was demonstrated utility of the forward embodiment as of the filing date, but not of the backwards embodiment. Thus, to the extent the claims cover the backwards embodiment, they are invalid for lack of sound prediction and/or overbreadth. The single dependant claim specifying the forward embodiment was held valid.

The Court ordered destruction of the infringing landing gear. The Court also denied an election of accounting of profits, awarding general damages to the Plaintiff. Finally, the Court awarded punitive damages to Eurocopter. The Court held that the infringement was not innocent or accidental, and that the Defendant acted with wilful blindness or intentional and planned misappropriation of the claimed invention. Furthermore, it represented to the public that it had developed the invention.

OTHER CASES OF INTEREST

New Affidavit Struck from Record in Judicial Review

Association of Universities and Colleges of Canada v. Canadian Copyright Licensing Agency (Access Copyright)

This is an interlocutory motion to strike an affidavit in a Judicial Review (JR) of the decision of the Copyright Board. The JR relates to an interim tariff issued by the Copyright Board until such time as the Board decides upon Access Copyright's proposed tariff. The applicants requested amendment of the interim tariff. The Board denied this request.

As part of the JR, the Applicants filed two affidavits. The first provides the complete record before the Board when it made its decision. The second made a number of factual assertions and discussed adverse effects from the interim tariff. This second affidavit is the subject of the within motion to strike.

The Court of Appeal held that in a JR, the Court only has limited powers to review the decision; it is not to re-decide the merits of what the Board has done. Thus, the general rule is that the evidentiary record before the Court on JR is restricted to that which was before the Board. Certain exceptions exist such as if the affidavit provides general background that might assist in understanding the issues, if the affidavit shows procedural defects, or if the affidavit serves to highlight a complete absence of evidence before the decision maker.

The Court of Appeal held that the affidavit in issue did not fall into any of these exceptions. Thus the affidavit was struck.

Doctrine of Bona Fide Purchaser for Value without Notice Applies to Patent Rights

Verdellen v. Monaghan Mushrooms

This case involves a dispute over who owned certain patent rights. There was a factual dispute over whether Verdellen and Rolland ever came to an agreement over the assignment of the patent rights. Furthermore, the Court did not decide this issue. Rather it proceeded on the assumption there was a binding agreement, and determined whether there were grounds available to support a declaration of the rights of the parties.

Rolland started CCAA proceedings and was eventually sold to Monaghan through those proceedings. The Court held that as the agreement of purchase and sale did not restrict the business to any particular locality or jurisdiction, the patent rights conveyed were not limited to North America. Furthermore, on the day of the closing, Rolland executed and delivered to Monaghan an assignment of patent rights that specifically contained world wide rights to the invention in question.

Shortly after filing of the U.S. patent application, Verdellen and his co-inventor executed written assignments in favour of Rolland which were recorded in the USPTO. In addition, a power of attorney was signed by Rolland as the assignee, indicating Rolland was the owner of the US application. This power of attorney was also recorded in the USPTO. Furthermore, the Court held that the evidence was that Monaghan's due diligence showed nothing inconsistent with this publically available information that Rolland held the ownership interest and the patent right. The due diligence included interviews with Verdellen. The Court thus held that even if Verdellen had a binding contract with Rolland covering the patent rights, Monahan acquired those patent rights as a good faith purchaser without notice and thus acquired them free and clear of any interest Verdellen might otherwise have had in them.

Thus, the Court declared that the purported agreement between Verdellen and Rolland is void as against Monahan as a bona fide purchaser for value from Rolland without notice of any such agreements.

OTHER INDUSTRY NEWS

The Supreme Court of Canada denied leave to appeal in Pfizer Canada Inc. et al. v. Apotex Inc. et al. The decision of the Federal Court can be found here. The decision of the Federal Court of Appeal can be found here.

CIPO has announced a new PPH Pilot Project Agreement between CIPO and UKIPO.

On January 31, 2012, the PMPRB launched its user-friendly Web application for New Patented Medicines Reported to the PMPRB.

The PMPRB has released its January 2012 NEWSletter.

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