In May 2008, the Federal Court issued its decision in the case
of Genencor International Inc. v. Commissioner of Patents and
Attorney General of Canada (Genencor). Genencor appears to be
the first decided case in the Federal Court in an appeal from the
result of a patent re-examination.
Re-examinations have been permitted pursuant to the Patent
Act (the Act) since 1987. A re-examination is an
administrative procedure to challenge the validity of a patent.
Traditionally, challenges to validity were undertaken by
impeachment proceedings in court, which can be a costly and
time-consuming process. The re-examination process offers a more
expeditious way to challenge a patent. Re-examinations are held
before a three-person panel: generally the chair of the panel is a
member of the Patent Appeal Board, and the other two members are
drawn from the examination branch.
In this case, the patent in dispute belonged to Genencor. The
patent covered detergent formulations that used cellulase, an
enzyme derived from a particular variety of fungus. Cellulases are
useful in detergents because they have desirable properties when
applied to cotton fabrics, but they also have drawbacks. Cellulases
are enzymes that break down cellulose, so cotton fabrics washed in
a detergent containing cellulase lose strength. Genencor's
patented formulations were constituted to reduce loss of fabric
Novozymes, a competitor of Genencor, requested re-examination of
Genencor's patent, citing prior art that allegedly either
anticipated, or rendered obvious, the claims in the Genencor
patent. After the re-examination process, the Re-examination Board
cancelled all the claims in Genecor's patent, with the result
that it was deemed never to have been granted in the first
Upon appeal by Genencor, the Federal Court declined to
intervene. However, the reasons of Gibson J. are important because
they address the standard of review for decisions of the
Re-examination Board, and raise concerns about difficulties with
the appeal process.
Gibson J. found that the standard of review as to the merits of
a decision of the Re-examination Board should be reasonableness, so
a decision would not be interfered with unless a palpable and
overriding error was found. The Court held that the nature of the
decision, and the unquestioned expertise of the Re-examination
Board, supported deference, in spite of the fact that an express
right of appeal was provided for in the legislation, which is a
factor which often leads to a more searching standard of
The Federal Court took the opportunity to express
dissatisfaction with the consequences of the re-examination and
appeal procedures. In a re-examination, the party requesting
re-examination is not a party to the proceeding, and is not
entitled to make representations. Therefore, Novozymes was not
entitled to take part in the appeal. The Commissioner of Patents
elected not to contest the proceeding. The Attorney General of
Canada did contest the appeal, but made submissions only on the
issues of standard of review and procedural fairness. Therefore,
when it came time to review the substance of the Board's
decision, the Court was left with submissions only from the
appellant. In the circumstances of this case, and considering the
appropriate standard of review, the Court considered itself able to
uphold the Board's decision even in the absence of submissions
defending it. But the Court emphasized that its position might have
been untenable if a more searching review of the reasons were
called for. Gibson J. indicated in closing that the resolution of
this difficulty is, in his opinion, a matter for Parliament.
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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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.
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