Canada: Canadian Federal Court Of Appeal Says Patent Construction Findings Should Only Be Reversible For "Palpable And Overriding Error"

Last Updated: September 11 2015
Article by Daniel Davies

The Federal Court of Appeal recently opined that appellate courts should defer to trial court findings on patent construction in the absence of a "palpable and overriding error", when such findings are heavily dependent on expert testimony (Cobalt Pharmaceutical Company v Bayer Inc, 2015 FCA 116 ("Cobalt decision")). This would reflect a departure from the "correctness" standard of review that has traditionally been applied to patent construction.


When a trial decision is appealed, the appellate court must determine the standard of review it should apply in reviewing the trial decision.

Generally, there are two standards of review that an appellate court may apply in Canada:

  • Palpable and overriding error – under this standard, the appellate court will only disturb the trial decision if it finds that the trial judge made a palpable and overriding error. Otherwise, the trial decision will be upheld. This standard of review is typically applied to questions of fact and questions of mixed fact and law. In its leading decision on standard of review, Housen v Nikolaisen,  2002 SCC 33, the Supreme Court of Canada explained why this deferential standard of review is applied to issues involving questions of fact: "The trial judge is better situated to make factual findings owing to his or her extensive exposure to the evidence, the advantage of hearing  testimony viva voce, and the judge's familiarity with the case as a whole".
  • Correctness – under this standard, the appellate court is free to replace the opinion of the trial judge with its own. This standard typically applies to questions of law, so that appellate courts can ensure consistency in the legal rules that are applied in similar situations, and exercise their law-making function.

Historically, the law has held that issues of patent construction are reviewable by appellate courts on the "correctness" standard, since construction has traditionally been considered a matter of law.

However, as a practical matter, patent construction is in most cases underpinned by the trial judge's assessment of expert evidence regarding the state of the art in the technical field to which the patent relates, and as to how a "person skilled in the art" would read and understand the patent. Accordingly, jurisprudence has held that the trial judge's assessment of such expert evidence is a question of fact, and is only reviewable by an appellate court for palpable and overriding error.

Recent developments

There have recently been pertinent developments on standard of review in both Canada and the United States.

In Canada, the Supreme Court recently overhauled the standard of review for contractual interpretation. In Sattva Capital Corp v Creston Moly Corp, 2014 SCC 53 (Sattva Capital), the Supreme Court held that interpretation of contract should no longer be considered a question of law to be reviewed on a correctness standard, but instead should be treated as a matter of mixed fact and law reviewable by appellate courts only for palpable and overriding error, since it involves a consideration of the "factual matrix" surrounding the contract. The same could be said for issues of patent construction, given courts' regular reliance on expert evidence regarding the state of the art, and the understanding of skilled persons, as part of the construction exercise.

In the U.S., the Supreme Court, applying a similar approach to the Supreme Court of Canada in Sattva Capital, has recently changed the standard of review for patent construction. Pursuant to the U.S. Supreme Court's decision in Teva Pharmaceuticals USA, Inc v Sandoz, Inc, 574 U.S. __(2015), the standard of review for patent construction in the U.S. is now the more deferential "clear error" standard of review, rather than the previously applied "de novo" standard. The majority of the U.S. Supreme Court viewed the de novo standard (essentially equivalent to the "correctness" standard in Canada), which is typically applied to pure legal questions, to be inappropriate for patent construction, which is based on "evidentiary underpinnings" and thus requires "subsidiary fact finding".

Cobalt decision

In the recent Cobalt decision, the Canadian Federal Court of Appeal was dealing with an appeal from the trial judge's construction of the "promise of the patent".

Although the Court of Appeal applied the established "correctness" standard of review to the construction issues before it, the Court suggested that issues of construction ought to be subject to the "palpable and overriding error" standard of review when the trial judge's findings are heavily dependent on expert testimony.

The Court of Appeal noted the practical reality that trial judges nearly always construe patents through "goggles supplied by the experts whom the judge considers to be credible and accurate". As such, trial judges are best positioned to make the factual and credibility findings that underlie the construction exercise. The Court observed that it is often difficult for appellate courts to "cleave off those aspects of claim construction that flow from the trial judge's appreciation of expert evidence from the words of the claim per se".

The Court of Appeal also cited the growing acceptance, as reflected in the U.S. Supreme Court's decision in Teva, that deference should be accorded to the interpretation of patents reached by those who have seen and evaluated the experts.

The Court also cited the Supreme Court of Canada's Sattva Capital decision in support of the proposition that the interpretation of legal documents (such as contracts, and in the Court of Appeal's view, patents) may be subject to review on a deferential standard.


The Cobalt decision, as well as the above-noted Sattva Capital and Teva decisions from the Canadian and U.S. Supreme Courts, suggest that appellate courts' views regarding the standard of review that should be applied to construction issues are shifting in favour of greater deference to the trial judge.

The preceding is intended as a timely update on Canadian intellectual property and technology law. The content is informational only and does not constitute legal or professional advice. To obtain such advice, please communicate with our offices directly.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Daniel Davies
Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions