NOTABLE COURT DECISIONS
Canada
Bell Helicopter Textron Canada Limitée v. Eurocopter1
The trial judge's findings in Eurocopter v. Bell Helicopter Textron Canada Limitée2had attracted the interest of Canadian patent practitioners for some notable findings, including the application of the doctrine of sound prediction to a mechanical invention, and an award of punitive damages. The case also discussed infringement by a "functionally equivalent" product.
In dismissing the appeal and cross-appeal, the Federal Court of Appeal (FCA) made a number of notable comments regarding sound prediction and utility, punitive damages, and infringement based on functional equivalence.
Sound Prediction
In general, the utility of a claimed invention must be established as of the filing date of the application. This can be accomplished either by A) demonstrated utility (e.g. "I've tried it, and it works"), or B) a sound prediction of utility (e.g. "I haven't done it yet, but I predict it will work because...").
A sound prediction of utility requires (1) a factual basis for the prediction; (2) an articulate and sound line of reasoning from which the desired result can be inferred from the factual basis; and (3) proper disclosure.3
While typically applied in the pharmaceutical and chemical fields, the FCA "disagree[d] with Eurocopter's submission that the doctrine of sound prediction cannot apply to the field of mechanical inventions."4
In this case, the broadest claim of the patent recited helicopter landing gear with a number of characteristics, including an "integrated front cross piece, offset in relation to [the front of the skids]". Some dependent claims recited landing gear with the cross piece offset forwards, and other dependent claims recited landing gear with the cross piece offset rearwards.
At trial, the defendant argued that the patent was invalid for lack of utility and overbreadth on the basis that the patent "promised" a helicopter landing gear having certain useful advantages over then-conventional helicopter landing gear. The advantages found by the trial judge to be promises were reduced acceleration factors upon landing, improved frequency adaptation with respect to "ground resonance" (which may eliminate the need for mechanical anti-ground resonance systems), and reduced landing gear weight. The defendant argued that the claims covered embodiments that did not have this promised utility. Specifically, the defendant argued that the patentee had not demonstrated that all of the landing gear configurations covered by the claims provided the promised utility, and that the patentee could not rely on a sound prediction that all of the landing gear configurations covered by the claims provided the promised utility.
The trial judge rejected the patentee's argument that the utility of the patent was simply to provide a working landing gear. The judge found that, as of the Canadian filing date, the patentee had "made and tested" a landing gear with the cross piece offset forwards, and that this forward offset landing gear provided the utility promised by the patent (discussed above). Thus, the patentee had demonstrated the promised utility for a landing gear with the cross piece offset forwards, and claims directed to such landing gear were valid.
With respect to landing gear with the cross piece offset rearwards, the judge found no evidence that the patentee had made or tested such a configuration as of the Canadian filing date. The judge also concluded that the inventors did not have sufficient data to support a sound prediction that landing gear with the cross piece offset rearwards would provide any ground resonance advantage (a component of the promised utility), and in any event that the patent did not describe a line of reasoning to that effect. Thus, claims covering landing gear with the cross piece offset rearwards were held invalid.
On appeal, the defendant argued that the claims directed to landing gear with the cross piece offset forwards were invalid for the reason that the patentee had not demonstrated that all forward inclinations would provide the promised utility. The FCA rejected this argument, relying on the trial judge's finding that "once a skilled person had chosen a design where the front cross piece is offset forwards, he would have no difficulty choosing which inclination will provide the best result, depending on the general design and weight of the structure of the helicopter."5
The patentee appealed the finding of invalidity for the claims to landing gear with the cross piece offset rearwards on a number of grounds, including: i) that the doctrine of sound prediction does not apply to mechanical inventions, and ii) that in any event, the utility had been soundly predicted through mathematical calculations and a sound line of reasoning. As noted above, the FCA disagreed and held that sound prediction is applicable to mechanical inventions. The FCA also held that the patent did not disclose a sound line or reasoning that a landing gear with the cross piece offset rearwards would provide one of the promised advantages.
The FCA also made two noteworthy comments on the doctrine of sound prediction. First, the Court indicated that a "contextual approach" is appropriate when assessing whether the requirements for a sound prediction have been met for a given invention:
"[T]he factual basis, the line of reasoning and the level of disclosure required by the doctrine of sound prediction are to be assessed as a function of the knowledge that the skilled person would have to base that prediction on, and as a function of what that skilled person would understand as a logical line of reasoning leading to the utility of the invention."6
Thus, the Court suggested that where the sound prediction is based on common general knowledge in the field, and where the line of reasoning would be apparent to a skilled person – as "is often the case in mechanical inventions" - "the requirements of disclosure may readily be met by simply describing the invention in sufficient detail such that it can be practiced."7 In other words, an enabling disclosure of the invention may be sufficient in certain cases to satisfy the requirement for a sound prediction of utility.
Second, the Court appeared to be open to the theory that for certain inventions, a prediction of utility may be sufficient to demonstrate utility:
"It seems to me that calculations and mathematical modeling are, by their very essence, a prediction of a given utility. I however recognize that there may be situations where a mathematical prediction of utility may be equivalent to a demonstration of utility, depending on the nature of the technology being mathematically modeled and the degree of reliability which experts would afford to such models for such purposes. I need not however address this issue in this case."8
Punitive Damages
Punitive damage awards in Canadian patent cases are rare. The Federal Court decision to award punitive damages was particularly noteworthy in view of the finding that the defendant never actually sold the configuration of landing gear that was found to infringe.9
For example, in the case cited by the trial judge in support of an award of punitive damages in a patent infringement case, Lubrizol Corp v Imperial Oil Ltd, the FCA held that "[W]here there is a patent infringement and a wilful breach of injunction following that, the Court in a civil case may by an award of punitive damages punish that conduct in the context of the patent infringement action."10 Also, in this case, the FCA noted that it would be difficult to uphold a punitive damages award "where the infringer did not know of the existence of the patent or reasonably held that the patent was invalid".11
But after referring to the trial judge's findings regarding the defendant's conduct, his credibility concerns with certain testimony from senior officials of the defendant, and his characterization of defendant's conduct as "... a case of wilful blindness or intentional and planned misappropriation of the claimed invention", the FCA upheld the award of punitive damages, finding as follows:
"Moreover, it simply defies belief that a large and sophisticated corporation such as Bell Helicopter would not verify intellectual property rights prior to embarking, as it did, on a research program directly involving the study of the landing gear of a leased EC120 helicopter. At the very least, this would be willful blindness."12
and later added:
"Where a person infringes a patent which it knows to be valid, appropriates the invention as its own, and markets it as its own knowing this to be untrue, punitive damages may be awarded when an accounting for profits or compensatory damages would be inadequate to achieve the objectives of retribution, deterrence and denunciation of such conduct. Indeed, such conduct departs to a marked degree from ordinary standards of decent behaviour. It must be denounced in a manner that deters similar misconduct in the future and marks the community's collective condemnation"13
In awarding punitive damages in this case, the FCA appears to have imposed a heightened standard on a large and sophisticated corporation (Bell Helicopter) to verify third party intellectual property rights when it attempts to reverse engineer products made or sold by its competitor (the patentee Eurocopter). It remains to be seen whether the punitive damage award in this case was influenced by the inability of the court to award significant ordinary damages, or whether it signals a greater willingness by Canadian courts to award punitive damages in patent infringement suits.
As discussed above, based on the facts of this case, the patentee was unlikely to recover more than minimal ordinary damages:
"Considering the evidence presently on record, chances are that, in any case, an award of ordinary damages – which, as submitted by Bell, will be minimal if Eurocopter is unable to prove any losses of sales and causation as a result of the infringement – will simply not be enough to achieve the goal of punishment and deterrence."14
In this respect, as noted above the defendant did not actually sell an infringing product. Also, the trial judge held – and the FCA accepted – that this was not a case where an accounting of profits would be appropriate.
Functional Equivalence Is Not A Valid Basis For A Finding Of Infringement
Finally, the patentee had argued that patent infringement may be found where an alleged infringer had omitted or changed an essential element of the claims. The patentee took the position that "the invention should be considered and compared, for infringement purposes, from the perspective of its functional equivalence with other landing gears, such as [the defendant's] landing gear."15
This argument was summarily dismissed as an error of law. In Canada, claims are purposively construed to identify what the inventor considered to be the "essential" elements of the invention, while distinguishing what is non-essential.16 There is no resort to functional equivalence:
"[T]he ingenuity of the patent lies not in the identification of a desirable result but in teaching one particular means to achieve it. The claims cannot be stretched to allow the patentee to monopolize anything that achieves the desirable result. It is not legitimate, for example, to obtain a patent for a particular method to grow hair on bald men and thereafter claim that anything that grows hair on bald men infringes."17
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Footnotes
1 2013 FCA 219 [Eurocopter FCA].
2 2012 FC 113 [Eurocopter FC].
3 Apotex Inc. v. Wellcome Foundation Ltd., [2002] 4 S.C.R. 153 at 186.
4 Eurocopter FCA at para. 146.
5 Ibid. at para. 137.
6 Ibid. at para. 152.
7 Ibid. at para. 155.
8 Ibid. at para. 148.
9 The "Production gear" sold to customers was found not to infringe any valid claim of the patent. The 21 "Legacy gear" units made (but not sold) were found to infringe.
10 Lubrizol Corp. v. Imperial Oil Ltd., [1996] 3 FCR 40, 67 C.P.R. (3d) 1 at 21, emphasis added.
11 Eurocopter FCA at para. 185.
12 Ibid. at para. 190, emphasis added.
13 Ibid. at para. 192, emphasis added.
14 Eurocopter FC at para. 455.
15 Ibid. at 95.
16 See e.g. Eurocopter FCA at para. 85, citing Free World Trust v. Électro Santé Inc., 2000 SCC 66 at para 55 ("For an element to be considered non-essential and thus substitutable, it must be shown either (a) that on a purposive construction of the words of the claim it was clearly not intended to be essential, or (b) that at the date of publication of the patent, the skilled person would have appreciated that a particular element could be substituted without affecting the working of the invention, i.e. had the skilled person at that time been told of both the element specified in the claim and the variant, and asked whether the variant would obviously work in the same way (meaning that the variant would perform substantially the same function in substantially the same way to obtain substantially the same result), the answer would be yes").
17 Free World Trust v. Électro Santé Inc, 2000 SCC 66 at 32.
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