Article by Christopher Delamere , © 2006, Blake, Cassels & Graydon LLP
Originally published in Blakes Bulletin in Intellectual Property - Special Patent Issue, September 2006
Pason Systems Corp. v. The Commissioner of Patents and Varco, L.P. is a judicial review of a decision by the Commissioner of Patents, which had allowed the correction of "clerical errors" in a patent.
There have been cases where patentees have sought judicial review of the Commissioner of Patents’ refusal to correct clerical errors. Prior to this case, however, there was no precedent for a third party challenge to a decision made by the Commissioner pertaining to the correction of clerical errors in a patent document. This decision may particularly limit the ability of patentees to amend clerical errors in patents when the patents are the subject of ongoing litigation.
This case relates to section 8 of the Patent Act, which gives the Commissioner of Patents the discretion to correct clerical errors in patents. Under section 8, "clerical errors in any instrument of record in the Patent Office do not invalidate the instrument, but they may be corrected under the authority of the Commissioner." Although the Patent Act and Patent Rules do not provide a definition for what constitutes a clerical error, an example of a clerical error that may be corrected under section 8 is an error caused by a clerk during the process of writing or transcribing (Upjohn Co. v. Commissioner of Patents).Varco, the owner of Canadian Patent No. 2,094,313 (the ‘313 patent) directed to an automatic drilling system, instituted an infringement action against Pason alleging that Pason had infringed a number of claims of the ‘313 patent. Pason, in turn, denied infringement and counterclaimed for a declaration that the relevant claims in the ‘313 patent were invalid.During the litigation, and unbeknownst to Pason, Varco filed a request under section 8 of the Patent Act with the Commissioner of Patents to correct a number of alleged clerical errors in the description and the claims of the ‘313 patent. Varco did not inform the Commissioner that the ‘313 patent was the subject of court proceedings. In claim 9, Varco asked that the term "increases" be deleted and replaced by "decreases", and that "decreases" be deleted and replaced by "increases"; these terms had been used to describe the rate of release of a component of the invention. The Commissioner approved Varco’s section 8 request, including the changes to claim 9.After learning of the changes to the ‘313 patent, Pason sought judicial review of the Commissioner’s decision. Pason based its judicial review on section 18.1 of the Federal Courts Act, which permits "an application for judicial review … by the Attorney General of Canada or by anyone directly affected by the matter in respect of which relief is sought" (emphasis added). It was Pason’s position that allowing the alleged clerical errors in claim 9 to be changed, specifically by altering the placement of the words "increases" and "decreases" in the claim, altered the scope of the claim substantially.
Federal Court Decision
The Court found that because Pason was involved in litigation with Varco, Pason clearly qualified as an entity "directly affected" by the Commissioner’s decision to allow the amendment to claim 9. The grounds for judicial review of the Commissioner’s decision were therefore acceptable under section 18.1 of the Federal Courts Act.The Court also granted judgment quashing and setting aside the Commissioner’s decision, which had allowed the section 8 correction of clerical errors in claim 9. In the Court’s view, the changes to claim 9 were substantive in nature and clearly altered the scope of the claim. Although clerical errors are not explicitly defined in the Patent Act or Patent Rules, the amendments made to claim 9 stepped outside the scope of the intended meaning of a clerical error, which the Court characterized as errors arising out of the mechanical process of writing or transcribing.Lastly, the Court held that even if the correction of claim 9 under section 8 had been justified, the Commissioner would not have allowed this amendment had he been aware of the pending litigation involving the ‘313 patent. The Court stated that: "The applicant and its agent owe a duty of candour to the Patent Office to make a full, fair and frank disclosure of all of the relevant circumstances … Given the lack of specific statutory requirements or regulations affecting section 8, it is incumbent upon the agent and lawyer dealing with the matter to act with integrity."The Court also remarked that lawyers and patent agents who are members of the Intellectual Property Institute of Canada are obliged to adhere to its Fundamental Canon, which provides a standard of conduct and ethics for patent practitioners to follow. In particular, the Canon states: "[A]n agent must at all times conduct himself or herself with integrity and competence in accordance with the highest standards of the profession so as to retain the trust, respect and confidence of members of the profession and the public." By not disclosing the details of this litigation to the Commissioner, Varco’s agents and lawyers had violated the Canon. The Fundamental Canon also echoes the standards of ethics of the Canadian Bar Association and Law Societies of the provinces, which require that a lawyer perform his or her professional duties honourably and with integrity.
In view of the Court’s decision, there now exists precedent for third party challenges to be made under section 18.1 of the Federal Courts Act against the Commissioner of Patents’ decision to allow a section 8 correction of clerical errors in a patent. This is despite the fact that the Patent Act does not specifically provide a mechanism by which a third party may challenge such a decision.Also, if a patent is involved in litigation, the patentee’s ability to request the correction of clerical errors under section 8 may be limited, even if the grounds for correction are justifiable.Lastly, the Court has established a reference point for what will constitute ethical conduct by lawyer and non-lawyer patent agents in their practice before the Patent Office.
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