Canada: Recent Patent Cases

Last Updated: March 1 2006

This article was originally published in Blakes Bulletin on Intellectual Property - February 2006

Article by Laura Weinrib, ©2006 Blake, Cassels & Graydon LLP

The Federal Court of Appeal has recently released two decisions that will be instructive for many patent owners. In Calgon Carbon Corporation v. The Corporation of the City of North Bay, the Federal Court of Appeal, overturning the judgment of the motions judge, confirmed the patentability of a newly discovered use of an old method, so long as the new use has a practical application. In the second case, F. Hoffman-La Roche AG v. Canada (Commissioner of Patents), the Federal Court of Appeal upheld the Federal Court’s decision that the Commissioner of Patents has no duty to notify the patent holder that, as a result of a failure to pay maintenance fees, the patent will expire.

Calgon Carbon Corporation v. The Corporation of the City of North Bay

Background. Calgon’s patent claimed a method for preventing the replication of cryptosporidium oocysts (crypto) using low levels of ultraviolet (UV) light to irradiate affected water. Calgon sued the defendant alleging patent infringement and, in response, the defendant brought a motion for summary judgment asking that the action be dismissed on the grounds that Calgon’s patent was invalid.

In responding to the motion for summary judgment, Calgon acknowledged that low level UV light has been previously used in water treatment for the killing of bacteria and viruses, but not for the purpose of preventing the replication of crypto. Prior to the discovery which led to the Calgon patent, it was thought necessary to kill crypto in order to prevent crypto infection, and high doses of UV light were required to effect such killing. The Calgon patent showed that a much lower dose of radiation, similar to what was already being used to kill bacteria and viruses, which simply disables the crypto, was enough to prevent disease.

Federal Court Decision. The motions judge reviewed the Supreme Court of Canada case of Shell Oil v. Commissioner of Patents and found that the use of an old invention to prevent the crypto replication was a “mere discovery” and not a new invention. The motions judge held that a new discovery, or a previously unknown advantage of an existing discovery was not, in and of itself, a patentable invention. As a result, the motions judge found that the Calgon patent was invalid as it failed to disclose a patentable invention. Since an invalid patent cannot be infringed, the judge held that there were no genuine issues for trial, granted North Bay’s motion for summary judgment and dismissed Calgon’s action for patent infringement. Calgon appealed the motion judge’s decision granting summary judgment.

Federal Court of Appeal Decision. A unanimous Court of Appeal determined that the motions judge had misapplied the Shell case. According to the Court of Appeal, Shell stands for the proposition that the discovery of a new use for an old invention which is capable of practical application is a new invention. While agreeing with the motions judge that a “mere discovery”, such as a scientific observation, is not an invention, the Court of Appeal distinguished “mere discoveries” from “inventions” under the Patent Act (the Act).

The Court of Appeal explained that a discovery that UV light prevents crypto from replicating is a scientific observation for which no patent may be obtained since a scientific observation, on its own, has no practical application. However, the Court of Appeal held that finding a new, useful application for an existing method is more than a scientific observation. In Calgon, the patent claims are for what the Court of Appeal called “a practical solution to a practical problem”, which is more than a mere discovery.

While the method claimed in the Calgon patent is not a new method itself, the new application of the knowledge that irradiating water with low doses of UV light prevents crypto replication has commercial value. More costly means of treating water could be avoided. Calgon’s discovery was found to have added to the cumulative wisdom in the use of low doses of UV light in the water treatment process. Having found that the new application of the existing method was a new and useful art, which is therefore patentable, the Federal Court of Appeal allowed the appeal and dismissed the motion for summary judgment.

This case confirms that inventors are able to patent newly discovered uses for old methods, as long as the new use has a practical application. To capitalize on this broad interpretation of the Act, inventors should be on the lookout for new applications of older processes, which they may have previously thought were unpatentable.

F. Hoffman-La Roche AG v. Canada (Commissioner of Patents)

Background. The Act requires patent holders to pay annual maintenance fees. If a required fee is not paid on time, the patent holder can still make payments up until one year after the due date, along with the payment of a late fee. After that time, the Act states that the patent is deemed to have expired. In Hoffman-La Roche, Hoffman-La Roche mistakenly classified a re-issued patent as a new patent in its internal records. Accordingly, Hoffman-La Roche believed that no fee was due on the first anniversary of the re-issue. In reality, however, because it was a re-issued patent, a fee of $150 was due on the original patent’s eighth anniversary in October 1999.

Usually, the Commissioner sends out notices when a deadline is missed, which allows patent holders an opportunity to make up the missed payment within the one-year grace period and keep the patent in good standing. In this case, however, the Commissioner also appeared to make a number of record-keeping and classification errors in respect of the reissued patent. The Commissioner’s errors prevented the proper issuance of the missed deadline notices. In particular, the Commissioner’s first notice referenced the wrong patent number. Further notices were sent to the wrong law firm or listed incorrect dates regarding the missed payment or did both. As a result, Hoffman-Roche did not receive any notice that its maintenance fee was overdue until November 2001, when it was far too late to rectify its mistake. The Commissioner then advised Hoffman-La Roche that the patent had lapsed for non-payment of fees. Hoffman-La Roche brought an application to reinstate the patent.

Federal Court Decision. The Federal Court did not find any ambiguity in the Act which would have made it possible for Hoffman-LaRoche to correct its missed payment. In the absence of any flexibility in the interpretation of the Act, Hoffman-La Roche argued its case on common law principles of fairness, legitimate expectations, equity and estoppel in relation to the failure of the Commissioner to provide notice of the failure to pay the maintenance fee. None of these arguments were successful in convincing the Federal Court that the patent could be preserved.

Federal Court of Appeal Decision. At the Federal Court of Appeal, Hoffman-La Roche limited its arguments to the duty of fairness. Hoffman-La Roche argued that the Commissioner’s decision that the patent had lapsed triggered the application of the duty of fairness, namely that Hoffman-La Roche be given notice before such a decision was made. The Court of Appeal found that the Commissioner did not make any decisions that were determinative of Hoffman-La Roche’s rights. Rather, Hoffman-La Roche’s rights were affected by the operation of the Act alone. The Court of Appeal held that whatever errors the Commissioner may have committed in its own record-keeping and internal classification of the patent for administrative purposes, the errors did not have the effect of relieving Hoffman-La Roche of its statutory obligations under the Act, nor did they create a joint or shared responsibility that would avoid the serious legal consequences resulting from Hoffman-La Roche’s failure to pay the maintenance fees.

The Court of Appeal upheld the Federal Court’s conclusion that the re-issued patent expired entirely from the operation of the Act. Neither the Commissioner, nor the Court itself, has the authority to extend the time for paying the maintenance fee, as this would amount to substituting their own deadline for that enacted by Parliament.

This case highlights the importance of being extremely vigilant in adhering to the maintenance fees provisions of the Act, as an innocent error in the payment of fees could result in the early expiration of a patent. As previously reported (see Canada: IP Year in Review – Patents, Blakes Bulletin on Intellectual Property, December 2005), amendments to the Act give patent holders and applicants a limited window of opportunity to correct fees that were incorrectly paid as a result of improperly claimed small entity status. There is, however, no legislative relief on the horizon that will relieve patent holders from the consequences of missed deadlines for the payment of maintenance fees.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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