The year 2024 was an eventful one for patent law. As we begin 2025, we are recapping some of the key decisions and updates of last year and providing our thoughts on what to keep an eye out for this year.
- Evolving Landscape of Artificial Intelligence
- SCC to Hear Method of Medical Treatment Appeal
- Conceptual Designs Do Not Constitute Infringing Use of a Patented Object: Steelhead LNG (ASLNG) Ltd. v. Arc Resources Ltd., 2024 FCA 67
- No Infringement for Making or Using Outside of Canada and Claims Found Broader Than Invention Made: Proslide Technology Inc v Whitewater West Industries Ltd, 2024 FC 1439
- The Federal Court of Appeal Provides Clarity on Accounting for Profits in Patent Infringement Cases: Rovi Guides, Inc. v Videotron Ltd., 2024 FCA 125
- Jurisdiction of the PMPRB Does Not Extend to Non-Patented Medicines: Galderma Canada Inc. v. Canada (Attorney General), 2024 FCA 208
- Check Your Spam Folder: The Necessity of Taking "Due Care" to Overcome Missed Patent Deadlines: Taillefer v. Canada (Attorney General), 2024 FC 259
- Hot Off the Press: The Patent Act Prevails – The Court of Appeal of Alberta Clarifies the Law on Limitation Periods for Patent Infringement Claims: JL Energy Transportation Inc. v Alliance Pipeline Limited Partnership, 2025 ABCA 26
- In Case You Missed It: New Report on Mining Technology Patents
- Stay Tuned for More in 2025
Evolving Landscape of Artificial Intelligence
Use of AI in Federal Court Litigation. On May 7, 2024, the Federal Court issued an updated notice on the use of Artificial Intelligence (AI) in court proceedings. This notice expands on the Court's previous guidance on the use of AI, as we reported, which set out three guiding principles for the Court's use of AI. In the updated notice, the Court set new requirements for the use of AI in Federal Court proceedings:
- Any party, including self-represented litigants, that uses AI to prepare documents filed with the Court must include a Declaration that indicates that AI was used in the preparation of their documents. This applies to all materials that are submitted to the Court and prepared for the purpose of litigation. The Declaration shall be made in the first paragraph of the document in question.
- A Declaration is necessary if content in the material was directly provided by AI, even if it was not inserted from an external source like a web-based generative AI. A Declaration is required if the AI input resembles that of a co-author.
- A Declaration is not required if AI was used merely to suggest changes, critique content, or provide recommendations on content already created by a human who can consider and manually implement the suggested changes.
- New counsel taking on a file from prior counsel or a self-represented litigant must make best efforts to ascertain whether AI was used in the creation of past file documents and must provide a Declaration on any documents they suspect may include AI generated content.
Given the broad scope of this practice notice, parties involved in Federal Court litigation should ensure to proactively communicate with counsel about whether AI has been used in the creation of any documents that could be filed with the court.
AI as An Inventor. Some AI has advanced to the point of being capable of innovating, which has required various jurisdictions to grapple with the question of whether AI can be considered the inventor on a patent. This question has arisen in response to patent applications filed around the world by Stephen Thaler, who listed his AI system called DABUS as the inventor on the applications. The United States, United Kingdom, European Union, and Australia have each rejected the Thaler/DABUS patent applications and determined that AI cannot be an inventor under the law in their respective jurisdictions.
A Canadian court has yet to consider this issue but the Patent Appeal Board is expected to weigh in soon, in the context of reviewing the Thaler/DABUS Canadian Patent Application No. 3,137,161. In November 2021, the Canadian Intellectual Property Office issued a compliance notice finding the application non-compliant and stating that "it does not appear possible for a machine to have rights under Canadian law or transfer those rights to a human." The application has been referred to the Patent Appeal Board for review and the hearing is currently scheduled to take place in February 2025.
SCC to Hear Method of Medical Treatment Appeal
On September 19, 2024, the Supreme Court of Canada (SCC) granted Pharmascience leave to appeal a decision of the Federal Court of Appeal (FCA) which found claims of a patent to be not invalid as methods of medical treatment (Pharmascience Inc. v. Janssen Inc., 2024 FCA 23). The patent at issue relates to a dosage regimen for paliperidone palmitate (Janssen's INVEGA SUSTENNA) to treat schizophrenia.
Cassels lawyers Andrew Skodyn, Sean Jackson and Eleanor Wilson have filed a motion for leave to intervene in this appeal on behalf of the Fédération Internationale des Conseils en Propriété Intellectuelle (FICPI), an international organization of patent attorneys.
It is uncommon for the SCC to hear appeals of patent cases, and this will be one to watch for those with interest in healthcare innovations. The appeal (SCC docket no. 41209) is expected to be heard in 2025, though a date has not been scheduled.
Conceptual Designs Do Not Constitute Infringing Use of a Patented Object: Steelhead LNG (ASLNG) Ltd. v. Arc Resources Ltd., 2024 FCA 67
In this decision, the Federal Court of Appeal (FCA) provided guidance on what constitutes "use" of a patented invention for establishing infringement under section 42 of the Patent Act. More specifically, the FCA found that disclosure of a conceptual design that depicted an infringing article did not amount to infringing use of a patented invention in Canada, where the patent claimed the article itself and not the design.
By way of background, the respondents (Arc) had disclosed to prospective partners drawings and specifications of a design of a natural gas facility that, if built, would comprise all the essential elements of claims of the patent at issue. The appellants (Steelhead) argued that this disclosure constituted "use" of their invention and thus infringement of their patent, which generally claimed a system for liquefying natural gas.
The Federal Court, on a motion for summary trial, dismissed the patent infringement allegations, finding that the patent claimed a physical apparatus or system and not the conceptual design of such apparatus or system. The activities in question were not actual use of the invention as "marketing, offering, or promotional activity of the invention ... would, at best, amount to 'paper offers'" and do not constitute infringement in Canada.
The FCA upheld the Federal Court's decision, finding that there was no error in rejecting Steelhead's novel and expansive interpretation of "use" under section 42. After analyzing the jurisprudence and considering the statutory context, the FCA found that the "exclusive right, privilege and liberty of making, constructing and using the invention and selling it to others to be used" extends to the claimed invention and not the invention's goal, purpose or advantage. As the patent does not claim a conceptual design, Arc did not "use" the claimed invention. It was also noted that while the Patent Act did not offer the protection sought by Steelhead, they may be able to seek recourse through other forms of intellectual property including copyright and moral rights.
Steelhead has applied for leave to appeal to the SCC (SCC docket no. 41323).
No Infringement for Making or Using Outside of Canada and Claims Found Broader Than Invention Made: Proslide Technology Inc v Whitewater West Industries Ltd, 2024 FC 1439
In this decision, the Federal Court held that all the asserted claims of each of ProSlide's four patents relating to water slide features were invalid and were not infringed by any of WhiteWater's three water slide features. While the Court addressed many issues, this summary focuses on the findings of non-infringement and overbreadth, for the three patents referred to by the Court as the "552 Patent Family."
On infringement, ProSlide alleged that WhiteWater's activities with respect to two water slide features, the Orbiter and the Tailspin, constituted unauthorized "making" and "using" of the claimed inventions. The evidence demonstrated that WhiteWater manufactured components of its Orbiter and Tailspin features outside of Canada through subcontractors, who then delivered the components to WhiteWater's customer for final assembly and use at the customer's location. No Orbiter or Tailspin features (or components thereof) had been physically manufactured, assembled, or used in Canada. ProSlide argued that WhiteWater's conduct was still infringing because WhiteWater was doing in Canada everything to make the slides apart from the steps of the physical making (including promoting products and generating detailed designs and specifications), and that these activities created a "real and substantial connection to Canada" which should give rise to liability.
The Court concluded that the none of the Orbiter and Tailspin features were in fact "made" or "used" in Canada. The Court reasoned, citing the FCA's decision in Steelhead (summarized above), that since the 552 Patent Family claims physical objects, and not conceptual designs or drawings of those objects, ProSlide's exclusive rights of "use" under section 42 of the Patent Act extend only to the claimed objects. Furthermore, the Court stated that the finding in Steelhead that conceptual designs are not included in the scope of protection around a claim for a physical object, extends equally to what constitutes "making" under the Patent Act.
With respect to overbreadth, a claim is invalid if it is found to be either (a) broader than what was disclosed or (b) broader than what was made or contemplated by the inventor. WhiteWater argued only the latter for the asserted claims of the 552 Patent Family. The Court agreed with WhiteWater, finding that each of the asserted claims of the 552 Patent Family lacked at least one key aspect of the inventions made or contemplated by the inventor in relation to the 552 Patent Family and were therefore overbroad. This case is a good example of a successful argument of claims broader than the invention made or contemplated, as many overbreadth arguments focus on the claims only being broader than the invention disclosed.
This decision is currently under appeal. Cassels lawyers Andrew Skodyn, Sean Jackson, Eleanor Wilson and Carly Valentine acted as counsel for WhiteWater, the successful party in this case.
The Federal Court of Appeal Provides Clarity on Accounting for Profits in Patent Infringement Cases: Rovi Guides, Inc. v Videotron Ltd., 2024 FCA 125
In this decision, the FCA upheld the Federal Court's finding that Rovi Guides' (Rovi) patent was invalid and reviewed the principles for awarding remedies for patent infringement. The Court commented, in obiter, on the remedies Rovi Guides (Rovi) would have been entitled to if its patents were found valid and infringed, and clarified how courts should apply the remedy of accounting for profits.
The FCA remarked that in patent infringement cases, although plaintiffs are not entitled to accounting for profits as of right, compelling reasons are required to deny that remedy. The Court noted that "the fact that the patentee has licenced or intends to licence its patents in Canada, as opposed to itself practicing the invention, is to be afforded no weight in the determination of whether to award an accounting". However, this is not to be mistaken for situations where the plaintiff has made no attempts or plans to commercialize the invention in Canada, which will weigh against an accounting for profits.
The Court found that the Federal Court had erred in its analysis by failing to start at the point that compelling reasons were required to deny the remedy of an accounting for profits.
The FCA also noted that staunchly defending patent rights or adopting a business model of licensing were not reasons for denying an accounting for profits.
Finally, the Court found that an evidentiary basis was necessary to determine that the plaintiff had unduly delayed the patent prosecution process to its own advantage. With the proper evidentiary support, such conduct could disentitle the plaintiff to an accounting of profits. However, it was a palpable and overriding error for the Federal Court to make such a finding without any evidence about normal practice and delays typically seen before the Patent Office.
Jurisdiction of the PMPRB Does Not Extend to Non-Patented Medicines: Galderma Canada Inc. v. Canada (Attorney General), 2024 FCA 208
In December 2024, the FCA set aside an order of the Patented Medicine Prices Review Board (PMPRB) requiring Galderma to provide pricing information on its product Differin (0.1% adapalene). In granting the appeal the FCA confirmed that the PMPRB's jurisdiction to regulate pricing does not extend to unpatented medicines, or medicines previously covered by a patent, as well as provided guidance regarding what constitutes a "patentee" and an "invention pertaining to a medicine" under section 79 of the Patent Act.
Galderma owned patents that related to two of its products containing the active ingredient adapalene, Differin (0.1% adapalene) and Differin XP (0.3% adapalene). The patent relating to Differin expired in 2009, at which point Galderma stopped providing the PMPRB with pricing information on Differin. The FCA found that once the patent relating to Differin expired, Galderma was no longer entitled to the benefit of the patent for the invention and was no longer considered a "patentee" under subsection 79(1) of the Patent Act. Accordingly, the PMPRB ceased to have the power to regulate Differin's price in Canada.
With respect to the patent relating to Differin XP, a "use patent" that covers the use of 0.3% concentration of adapalene, the FCA held that that PMPRB cannot stretch this patent to cover Differin, which contains 0.1% adapalene. The reasoning of the FCA included that the use of 0.3% concentration of adapalene cannot be "intended or capable of being used" for Differin or for "the preparation or production" of Differin under subsection 79(2) of the Patent Act because Differin does not embody that use at all. The fact that Differin and Differin XP could be used interchangeably by patients was of no consequence. As the FCA noted, "[n]owhere does the Patent Act say that the [PMPRB] can regulate an unpatented medicine just because a patented medicine might be used in its place or because it shares some unpatented properties of the patented medicine (here, the unpatented ingredient adapalene)."
Check Your Spam Folder: The Necessity of Taking "Due Care" to Overcome Missed Patent Deadlines: Taillefer v. Canada (Attorney General), 2024 FC 259
In this decision, the Federal Court endorsed the position of the Canadian Intellectual Property Office (CIPO) that sending unanswered email reminders is not enough to meet the standard set out in the "due care" provisions of the Patent Act. These provisions allow an applicant to reinstate a patent or patent application if an annual maintenance fee was not paid on time.
If the annual fee is not paid by the due date, the Patent Office must send a notice to the patent agent setting a two-month deadline for reinstatement. If this further deadline is missed, the applicant must establish the deadline was missed despite "due care" being taken to meet the deadline, if it wants reinstatement.
In 2019, the Patent Act was amended to require that the patentee (or applicant in the case of a pending application) provide along with the request for reinstatement and fees, "the reasons for the failure to pay the prescribed fee and late fee before the later of the end of six months after the applicable prescribed date and the end of two months after the date of the notice." The patent office will then determine if the failure "occurred in spite of the due care required by the circumstances having been taken."
In Taillefer, the patent agent had used email correspondence to seek client instructions for many years, and in this case had sent several unanswered emails reminding the client of upcoming due dates and the requirement to pay maintenance fees. Each email reminded the client that no action would be taken without client instruction. Unfortunately, after the time periods set out in the Act had expired, the client learned that the emails had ended up in his junk email folder. He argued that it was unanticipated that emails would go to the junk folder when the same email address had been used reliably for years.
The Court found that it was reasonable for CIPO to find that due care had not been taken and suggested that there were obligations for both the patentee and the patent agent to have effective communication systems in place.
On February 4, 2025, the Federal Court of Appeal upheld the Federal Court's decision in its entirety, finding that it was reasonable for the Commissioner to conclude that the parties were required to exercise due care by having a back-up communications system in place to monitor and pay annual patent fees.
The decision highlights that it is incumbent on both patent agents and applicants to monitor their patent deadlines and have suitable back-up communication mechanisms in place and ensure that deadlines are met.
Hot Off the Press: The Patent Act Prevails – The Court of Appeal of Alberta Clarifies the Law on Limitation Periods for Patent Infringement Claims: JL Energy Transportation Inc. v Alliance Pipeline Limited Partnership, 2025 ABCA 26
Last year, we reported that JL Energy Transportation Inc. (JL) was granted leave to argue on appeal that its previous decision in Secure Energy Services Inc. v Canadian Energy Services Inc., 2022 ABCA 200 (Secure Energy) should be reconsidered. The appeal follows the summary dismissal of JL's claim for patent infringement and breach of licensing agreements, where the case management judge determined that the claim was time-barred under the two-year limitation period set out in Alberta's Limitations Act, because it had been commenced in Alberta.
On appeal, which was heard in December 2024, the Court of Appeal was asked to reconsider key principles arising out of its 2022 decision in Secure Energy where it held that:
- the two-year limitation period under the Alberta Limitations Act—rather than the six-year limitation period under the federal Patent Act—applied to patent infringement claims brought before Alberta superior courts; and
- patent infringement is not subject to a rolling limitation period whereby the continued use of intellectual property constitutes an ongoing tort.
On January 28, 2025, the Court of Appeal of Alberta released its highly anticipated decision bringing some clarity to the debate over limitation periods on patent infringement claims in provincial superior courts as opposed to claims brought in the Federal Court: JL Energy Transportation Inc. v Alliance Pipeline Limited Partnership, 2025 ABCA 26.
In its detailed decision, the Court of Appeal overturned Secure Energy on the question of which legislation applies, though it left the issue of rolling limitation periods open. Accordingly, this decision directly establishes that (i) claims for patent infringement are subject to the limitation regime established in section 55.01 of the federal Patent Act when the claim is brought before the Alberta superior court and (ii) the two-year limitation period under the Alberta Limitations Act does not apply. The nature and extent of the analysis conducted by the Court of Appeal would also make this decision very persuasive as establishing a general principle to be followed no matter what province is involved in some future case.
For more information on the latest Alberta Court of Appeal decision, see our Cassels Comment.
In Case You Missed It: New Report on Mining Technology Patents
In August 2024, Intellectual Property Ontario released the Snapshot Report: Mining Technology Patents, which provides an overview of patent rights within the global mining sector. This Report specifically focuses on patent applications related to electric vehicles and integrated circuit chips, and highlights opportunities for Canadian businesses in the mining sector by identifying potential technology gaps and providing recommendations for developing an IP strategy.
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.
