Canada: Supreme Court Of Canada Invalidates The Promise (Intellectual Property Weekly Abstracts - Week of July 3, 2017)

SUPREME COURT UPDATE

Supreme Court of Canada invalidates the promise doctrine

AstraZeneca Canada Inc. v. Apotex Inc., 2017 SCC 36

Drug: esomeprazole

In this decision, the Supreme Court of Canada (SCC) overturned the decision of the Federal Court of Appeal (FCA), and held the patent to be valid and infringed. In so doing, the SCC established a new test for determining utility pursuant to the Patent Act and held that the so-called 'Promise Doctrine' is not the correct approach to determine utility. Our summary of the FCA decision can be found here, and the decision is here.

The SCC held that the utility requirement in s. 2 of the Patent Act is a necessary pre-condition to patentability. However, the question was: useful for what? The Federal Courts have answered this question with the Promise Doctrine. However, the SCC held that this doctrine is excessively onerous in two ways: (1) it determines the standard of utility by reference to the promises expressed in the patent; and (2) if there are multiple expressed promises, it requires that all be fulfilled for a patent to be valid.

The SCC held that the Promise Doctrine conflated s. 2 and s. 27(3) of the Patent Act. Section 2 is the requirement that an invention be useful – a condition precedent to an invention. Section 27(3) is the requirement to disclose the invention's operation or use, which is independent of s. 2. In considering the allegation that the Promise Doctrine prevents a patentee from overpromising, the SCC held that numerous other sections of the Patent Act address this mischief.

Furthermore, the SCC held that requiring all promises to be met is also unfair. A single use makes a subject-matter useful. The Promise Doctrine risks an otherwise useful invention being deprived of patent protection because not every promised use was sufficiently demonstrated or soundly predicted by the filing date. The SCC held that such a result is punitive and has no basis in the Patent Act. In addition, the SCC held this requirement to be antagonistic to the bargain theory wherein patentees are asked to give fulsome disclosure in exchange for the limited patent monopoly.

The SCC then set out the correct approach to utility, holding that it is the subject-matter of an invention or improvement that must be useful. And this subject-matter must be capable of an actual relevant use and not be devoid of utility. To determine whether a patent discloses an invention with sufficient utility under s. 2, the following analysis is to be undertaken:

  1. Courts must identify the subject-matter of the invention as claimed in the patent.
  2. Courts must ask whether that subject-matter is useful – is it capable of a practical purpose (i.e. an actual result)?

The SCC confirmed that a scintilla of utility will do, and that a single use related to the nature of the subject-matter is sufficient. Furthermore, this utility must be established by either demonstration or sound prediction as of the filing date. The SCC held that the application of the utility requirement in s. 2 is to be interpreted in line with its purpose – to prevent the patenting of fanciful, speculative or inoperable inventions. Furthermore, a patentee is not required to disclose the utility of the invention in order to fulfill the requirements of s. 2.

PATENT DECISIONS

Motion for bifurcation of liability issues, as well as counterclaim for section 8 damages, dismissed

Alcon Canada Inc. v. Apotex Inc., 2016 FC 898

The Court dismissed the Plaintiffs' motion for a bifurcation order requesting that liability issues in this infringement action be tried separately from and before all issues of quantification, as well as all issues from Apotex's counterclaim for section 8 damages. Unlike infringement cases where there is no section 8 counterclaim, the Court noted that there was no longer a possibility that a judgment on liability would eliminate the need for a second phase of trial altogether in the present case.

Alcon argued that there was a high likelihood that the section 8 claim will be settled, which was a factor in a recent decision to bifurcate a section 8 claim (see Apotex v Alcon, 2016 FC 720). However, the Court distinguished this decision since documentary discoveries had been completed and the parties had been able to put before the Court estimates of the amounts at stake in the section 8 claim, from which the Court could form a view of the probabilities of settlement.

The Court was prepared to accept that if Alcon is unsuccessful on infringement, some of Apotex's defences would no longer have to be litigated at all. However, in the opposite scenario where Alcon is successful, the Court was not satisfied that the savings that might result would be significant enough to outweigh the inherent wastefulness of the bifurcation. The Court concluded that bifurcation was only likely to lead to appreciable savings of costs or time in the event that Alcon loses in the liability phase. Therefore, Alcon's motion for bifurcation required the Court to conclude that it was more likely than not that Alcon's action will fail. The Court noted that the determination of contested motions for bifurcation should not turn on an assessment of the relative merits of the parties' case or an evaluation of which party is most likely to prevail.

Costs thrown away as a consequence of the cancellation of the initial hearing awarded at the upper end of Column IV

Teva Canada Limited v. Pfizer Canada Inc., 2017 FC 610
Following redetermination (see 2017 FC 526, our summary here), the parties were unable to agree on Pfizer's costs. In its judgment, the Court had found that Pfizer was entitled to its reasonable costs thrown away as a consequence of the cancellation of the initial hearing of the redetermination.

Pfizer requested its costs thrown away on a full-indemnity basis, or in the alternative on a substantial or partial recovery basis, for the two week period prior to the cancellation of the originally scheduled hearing. Teva submitted that Pfizer's costs ought to be assessed at the upper end of Column IV of Tariff B.

The Court found that the authorities relied on by Pfizer in support of its request for full indemnity, being cases from the Ontario courts, were of little assistance in deciding this matter. Rather, the Court found that Teva's actions that led to the adjournment did not come close to being reprehensible, scandalous or outrageous conduct that might justify an award of full indemnity. The Court awarded Pfizer its costs incurred in the two week period preparing for the redetermination hearing, assessed at the upper end of Column IV, and any disbursements thrown away.

TRADEMARKS AND COPYRIGHT DECISION

Website meets definition of a parody but ultimately does not fall within the fair dealing exception

United Airlines, Inc. v. Cooperstock, 2017 FC 616

In this trademarks and copyright infringement action, the Court held that Dr. Jeremy Cooperstock, the owner-operator of the website www.untied.com (UNTIED.com), had infringed the trademarks and copyright owned by United Airlines, Inc.

UNTIED.com is a consumer criticism website where visitors can find information on the Plaintiff, submit complaints about the Plaintiff, and read complaints about the Plaintiff dating back to 1998. Beginning in 2011, the Court found that UNTIED.com adopted, for the first time, a design similar to the design of the United Website. UNTIED.com was updated again in 2012 to mirror the United Website design launched in 2012.

On the issue of trademark infringement, the Defendant admitted that he provides services in the form of information delivery, advice on legal rights, and publication of complaints through UNTIED.com. However, the Defendant argued that these did not constitute "services" under the Trade-marks Act because there was no commerce involved. The Court noted that there is no explicit requirement in the legislation of a monetary or commercial element to services. The Court found that the Defendant offered "services" through UNTIED.com by providing information and guidance to disgruntled flyers. The Court also found that the Defendant's use of the marks was confusing, notwithstanding the Defendant's arguments that the use of disclaimers and distinguishing additions to the marks obviated any danger of confusion. In addition, the Court found passing off of the Plaintiffs' marks and depreciation of goodwill.

The Court also found that the copyright infringement claim had been made out in this case. The Court ultimately concluded that the current version of UNTIED.com did not fall within the fair dealing for the purpose of parody exception to copyright infringement. While UNTIED.com fell within the definition of parody, the Court found that the Defendant's real purpose or motive in appropriating the copyrighted works was to defame or punish the Plaintiff, not to engage in parody. Furthermore, the Court questioned whether the parody exception may successfully be invoked when there is confusion, as was the case here. The Court also found that amount of the dealing, and effect of the dealing all weighed in favour of the conclusion that this dealing was not fair.

Finally, the Court concluded that the Defendant had not made out the defence of estoppel or acquiescence. The Court noted that the passage of time alone does not justify such a remedy, and that is all the Defendant had put forward to ground his claim.

COPYRIGHT DECISION

Judicial review of webcasting tariff dismissed

Re:Sound v. Canadian Association of Broadcasters, 2017 FCA 138

In this case, Re:Sound seeks judicial review of a decision of the Copyright Board (the Board), certifying a tariff setting royalties for the use of published sound recordings embodying musical works and performers performances of such works in non-interactive and semi-interactive webcasting for the years 2009-2012. The Court held that the standard of review was reasonableness, and that the Board's decision was reasonable. Thus, the application was dismissed with costs.

Under s. 19 of the Copyright Act, sound recording makers and performers have a right to be paid for the public performance or communication to the public by telecommunication of published sound recordings embodying performers' performances of musical works. In 1997, s. 19 also gave performers and sound recording makers a new right to receive "equitable remuneration". Any collective society that administers the right to perform musical works or sound recordings in public, or communicate them by telecommunication to the public, such as Re:Sound, is required to file with the Board proposed tariffs to receive royalties for the use of their repertoires. The Board considers the proposals in light of any objections, and certifies a tariff with any changes it deems necessary. The Court held that the Board has broad discretion when it sets equitable remuneration.

In this case, the FCA considered the factual background of the case. Re:Sound argued that the Board should have used market rates to set the equitable remuneration. The FCA was not convinced that the failure to do so was unreasonable. The FCA held that copyright protection exists because we find the work it protects to be valuable. That value is not correlated to the input costs, and as such, those costs are not relevant to the Board's analysis of the tariff in this case. Furthermore, the FCA held that it was reasonable for the Board not to perform the precise technological neutrality analysis mandated by the Supreme Court, as there was very little evidence before it on these issues.

INDUSTRY NEWS

Health Canada has announced a Consultation on Possible Changes to the Food and Drug Regulations: Generic Drug Equivalence and Related Terminology. The website indicates that the consultation is open for comment starting June 30, 2017 until October 13, 2017.

Health Canada has released an Updated Notice: Questions and Answers for the Guidance for Industry: Preparation of Drug Submissions in the eCTD Format.

About BLG

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.

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

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

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
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
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
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

Mondaq.com (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 www.mondaq.com

To Use Mondaq.com 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.

Disclaimer

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.

General

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