The Federal Court of Appeal has overturned the earlier finding
that Allergan and Apotex had settled their patent infringement
litigation (2015 FC 367).
Allergan had sued Apotex for patent infringement. The parties
discussed settlement for almost two years, through emails, draft
Minutes of Settlement and reporting letters to the Federal Court.
In reviewing the evidence, the Federal Court had determined that
although the parties did not have a signed agreement, they had
reached agreement on all essential terms.
The Court of Appeal began its analysis by laying out the
following requirements for a Court to find whether a settlement
agreement has been reached in a common law jurisdiction:
objectively viewed, the parties had a
mutual intention to create legal relations;
there must be consideration flowing
in return for a promise;
the terms of the agreement are
there is matching offer and
acceptance on all terms essential to the agreement; and
any other requirements, such as
In reviewing the requirements, the Court of Appeal stated that
this is an objective test, not a subjective one. The Federal Court
Judge had applied a subjective test, which was found to be in
In applying an objective view to the evidence, the Court of
Appeal found that the scope of the restrictions sought to be placed
upon Apotex was an essential term that had not been agreed upon.
Furthermore, it was found that counsel to Apotex only agreed to
recommend the terms of settlement to his client. In finding that
counsel did not have the authority to bind his client, there was no
legally-effective acceptance of Allergan's offer.
Thus, the original decision was overturned.
The Court of Appeal made a few comments of note at the end of
the appeal. First, it was noted that the patent at issue had
expired during the appeal, and Allergan moved to dismiss the appeal
as moot. The Court of Appeal held it was not moot because Apotex
would have been subject to obligations under the settlement
agreement, which if breached, could be the foundation for a future
damages claim. There was also a lack of authority on the legal
points in the appeal and some uncertainty in the state of the law,
which meant it was in the public interest to continue the
Second, it was noted that not only did the Federal Court declare
the parties had reached settlement and identified the terms of the
settlement, the Court had set out the terms and ordered Apotex to
comply. This was found to be too broad, as a breach of the
settlement agreement could now lead to proceedings for contempt. In
the Court of Appeal's view, there should only have been a
declaration that a settlement agreement had been made by reference
to the documents in the record.
When removing a named inventor, evidence that the remaining
individuals are the sole inventors is not necessary
Qualcomm sought to remove a named inventor who was added to a
patent through inadvertence or mistake. The named inventor provided
affidavit evidence that he is not an inventor and consented to
being removed as an inventor from a patent.
In removing the inventor, the Court noted that section 31(3) of
the Patent Act has two parts: i) evidence that an inventor had no
part in the invention and ii) that the remaining applicant(s) are
the sole inventors. In this proceeding, the Court only had evidence
from the named inventor and the Applicant's Patent Counsel.
That evidence did not clearly state that the remaining co-inventors
are the sole inventors.
In its view, the Court held that evidence as to the remaining
inventors is essentially a housekeeping requirement for the Patent
Office that is not relevant when an issued patent is being
considered by the Court.
Accordingly, the Order issued notwithstanding the evidence was
silent as to whether the remaining inventors were the sole
A recent Saskatchewan Court of Queen's Bench decision allowed a court-appointed receiver to sell and transfer intellectual property rights free and clear of encumbrances, finding that a license to use improvements of an invention was a contractual interest and not a property interest.
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).