Canada: Year-End Round-Up: Notable Canadian Patent Cases Of 2018

Last Updated: January 29 2019
Article by David Schwartz and Walter Chan

Earlier this month we published an exhaustive review of the life sciences and regulatory cases in the Canadian courts, and decisions on the merits for the year are summarized in our in our Rx IP Update 2018 Highlights in Canadian Life Sciences IP.

In this update, we note the following additional patent decisions by the Canadian courts in 2018, the first of which concerns a relatively rare interlocutory injunction. The others are decisions on the merits.

Thermolec ltée c. Stelpro Design Inc., 2018 QCCS 901

An interlocutory injunction was granted restraining Stelpro from selling products that allegedly infringed Thermolec's patent 2,242,829 relating to an electric air heating system. Justice Déziel held that there was a serious issue at hand, namely infringement, and Thermolec would suffer irreparable harm if the injunction was not granted, in the form of loss of goodwill and loss of distributors. The balance of convenience favoured Thermolec, since the patented products represented at least 30% of its business compared to less than 5% of Stelpro's.

Georgetown Rail Equipment Company v Rail Radar Inc. and Tetra Tech EBA Inc., 2018 FC 70

Georgetown claimed that Tetra Tech infringed its patents 2,572,082 and 2,766,249 relating to an automated system and method for inspecting railroad track. Tetra defended on the basis of obviousness. Justice Fothergill found that Georgetown's patents were valid and infringed. The decision is under appeal (A-69-18).

Regents of the University of California v I-MED Pharma Inc., 2018 FC 164

TearLab, a sublicensee of patent 2,494,540 owned by the University of California, claimed that I-MED Pharma infringed the patent, which relates to measuring the osmolarity of a sample of a bodily fluid, including particularly tear film, whereby the sample fluid is deposited on a chip. I-MED Pharma invoked the Gillette Defence (i.e. the defendant is practicing the prior art) in asserting non-infringement and invalidity. Justice Manson held that the asserted claims were infringed, but invalid for being anticipated and obvious. The decision is under appeal (A-86-18).

MIPS AB v Bauer Hockey Ltd., 2018 FC 485

MIPS claimed that Bauer infringed its patent 2,798,542 relating to rotational energy-absorbing sports helmets for minimizing brain injury, and sought to have Bauer's patent 2,784,316 and its divisional patents 2,821,540, 2,838,103 and 2,847,669 declared invalid. Bauer denied infringement and attacked the validity of MIPS's patent on the basis of anticipation and obviousness. Justice Gagné held that Claim 1 of Bauer's '316 patent was invalid for obviousness, but that the remainder of the claims were valid, as were the claims of the divisional patents. No appeal was filed.

Bauer was successfully represented by the litigation team at Smart & Biggar, including François Guay, Jeremy Want and Jean-Sébastien Dupont.

Grenke v DNOW Canada ULC, 2018 FC 564

In Weatherford Canada Ltd. v Corlac Inc., 2010 FC 602, the Court had found that patent 2,095,937, relating to seals in stuffing boxes on oil drilling equipment, was valid and had been infringed. In this decision, Justice Phelan awarded damages totaling $7,915,000 based on lost profits and reasonable royalties, as well as compound interest, but refused to award punitive damages. The decision is under appeal (A-244-18).

Safe Gaming System v Atlantic Lottery Corporation, 2018 FC 542, supplementary reasons 2018 FC 871

Safe Gaming System, a non-practicing entity and patent assertion entity, claimed that the defendants infringed its patent 2,331,238 relating to a system for controlling online gambling. The defendants counterclaimed that the '238 patent was invalid. Justice McVeigh found the '238 patent invalid for lack of utility and for providing insufficient disclosure. She also found that even if the patent were valid, it was not infringed. Appellate proceedings (A-184-18; 2018 FCA 180 granting motion for security of costs) were discontinued in January 2019.

Bombardier Recreational Products Inc. v Arctic Cat, Inc., 2018 FCA 172

Bombardier appealed Justice Roy's decision (2017 FC 207) dismissing its action for infringement against Arctic Cat and Arctic Cat Sales, Inc. with respect to four of its patents (2,293,106; 2,485,813; 2,411,964; and 2,350,264) related to snowmobiles. The Federal Court of Appeal affirmed the Federal Court's holding that the '106, '813 and '964 patents were invalid for insufficiency of disclosure, but reversed on its holding that the '264 patent was not infringed, on the grounds that it erred in using the description of the preferred embodiments to limit the claims. The Court of Appeal remitted validity of the '264 patent and remedies to the Federal Court. Arctic Cat has filed an Application for leave to appeal to the Supreme Court of Canada (38416).

AFD Petroleum Ltd. v Frac Shack Inc., 2018 FC 1047, on remand from 2018 FCA 140

At trial in Frac Shack Inc. v AFD Petroleum Ltd. (2017 FC 104, 2017 FC 274), Justice Manson found that several claims in Frac Shack's 2,693,567 patent, which related to refueling equipment at well sites during hydraulic fracturing, were valid and infringed by AFD. On appeal, the Federal Court of Appeal held that Justice Manson made a palpable and overriding error in his determination of the person of ordinary skill in the art ("POSITA"), and remitted to Justice Manson several issues related to obviousness, infringement and remedies for redetermination. Justice Manson found that the Court of Appeal's redefinition of the POSITA did not affect his conclusions on any issue. This last decision is under appeal (A-372-18).

Human Care Canada Inc. v Evolution Technologies Inc., 2018 FC 1302, supplementary reasons 2018 FC 1304

Human Care claimed that Evolution infringed claims 16 and 18 of Human Care's patent 2,492,392 relating to rollators – walkers with wheels. Evolution counterclaimed that the '392 patent was invalid. Justice Elliot concluded that the patent was valid and infringed, and ordered reasonable compensation, a permanent injunction, an accounting of profits, and interest. The decision is under appeal (A-425-18).

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.

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