The Federal Court of Appeal in Western Oilfield Rentals Ltd. v. M-I LLC, 2021 FCA 24 recently affirmed that several claims in a patent for certain drilling technology are valid and infringed.

This appeal had everything: standard of review, claim construction (including section 53.1), infringement, inducement, the Gillette defence, anticipation, obviousness, insufficiency (including best mode!), ambiguity, inutility, overbreadth, and that thing where applicants are not supposed to add new matter during prosecution but it is not entirely clear what if anything will happen to a patent if they do.

The Court of Appeal did not, however, view quantity as a substitute for quality. Quite the opposite: the Court admonished the appellants for the “lack of wisdom of raising so many issues on appeal”, noting that this approach suggested that the appellants themselves could not identify any issues that were particularly strong, and that the approach missed the opportunity to focus on the important issues and hurt the appellants’ own case.

The appellants’ approach did, however, allow the Court of Appeal to cover a lot of legal ground, and while the Court did not fundamentally change any doctrines of patent law, it expressed its opinions on a fair number of legal issues, including anticipation and obviousness. The more important takeaways are as follows.

Standard of review on claim construction: weighing of expert evidence assisting in claim construction is reviewed on the palpable and overriding error standard

While claim construction is generally considered to be a question of law and therefore subject to appellate review on the standard of correctness, the Court agreed that claim construction is often assisted by expert evidence, and the weighing of such evidence by the trial judge is reviewed on a standard of palpable and overriding error. Accordingly, the Court held, even if the Court of Appeal would not reach the same conclusion on the expert evidence as that reached by the trial judge, the Court of Appeal must defer its weighing of the evidence on the issue of construction unless the Court finds a palpable and overriding error.

This is a reminder that while the overarching standard of review on the issue of claim construction is correctness, appellants are likely to face an uphill battle on the more difficult standard of palpable and overriding error in most cases when appealing points of claim construction.

A specific representation may likely be required to trigger section 53.1 of the Patent Act

Section 53.1 of the Patent Act allows the Court to consider on the issue of claim construction statements made by the patentee during prosecution. As I wrote earlier, on a narrower view of this section such statements may be admissible only to rebut specific representations made by the patentee, and on a broader reading such statements may be admissible whenever claim construction is engaged. As I also wrote, the Court of Appeal previously may have indicated that it may prefer the narrower view, and this new decision appears to confirm this.

In particular, the appellant in this case appears to have argued that the patentee amended its claims during the prosecution with the purpose of capturing the defendant’s devices, and that this was wrong in some way. While the precise nature of this argument is not completely clear (and the Court observed that an applicant is perfectly entitled, and indeed is well-advised, to draft claims with an eye on competitor’s products, and the motivation in amending claims is not by itself telling in terms of claim construction or patent validity), the appellant appears to have relied in part on section 53.1.

In rejecting this argument, the Court made several important observations. First, the Court wrote, while the appellant referred to section 53.1 as the “file wrapper estoppel”, it is important to note that the section does not refer to an estoppel. Second, the Court went on, section 53.1 rather provides that certain communications between an applicant and the Patent Office are admissible to rebut any representations made by the patentee in regard to the construction of a claim. Most importantly, the Court found that while the appellants argued that the Court should construe the claims in view of the claims as they appeared in the original patent application, the appellants did not identify any representation made by respondent before the Federal Court that they sought to rebut.

This again supports the view that the Court of Appeal will prefer a narrower reading of section 53.1, one requiring an identifiable representation that a party seeks to rebut.

Pre-issuance reasonable compensation applies to inducement of infringement and activities that had stopped before the patent issued

While a patentee can bring an infringement action only after the patent is issued, once the patent is issued the patentee can also ask for reasonable compensation for infringing activities that occurred during the period between when the application was published and when the patent was issued. Here, the appellant argued that reasonable compensation does not extend to infringement by inducement nor to activities that were no longer taking place when the patent issued. There seemed to have been little authority for either argument, and the Court of Appeal dismissed them both.

Consideration of the Gillette defence is discouraged in some cases

The Gillette defence is a shortcut that avoids claim construction, infringement, and validity analyses. To invoke the Gillette defence, the defendant in an infringement case argues that it is only doing what is in the prior art. The logic of this argument is this, as the Court explained: if the defendant is only doing what is in the prior art, the defendant cannot possibly infringe a valid claim, because either the defendant’s activity is not covered by the claim, or, if it is covered, the claim is invalid as it must read on prior art.

It is rare however, the Court noted, for the parties or the court to exclusively rely on the Gillette defence to the exclusion of claim construction, infringement and validity analyses. This may, the Court observed, sometimes lead to confusion over the nature of the Gillette defence, namely that the defence is an alternative to, and does not depend on the resolution of issues of claim construction, infringement and validity. Accordingly, the Court continued, where a court has resolved issues of construction, infringement, and validity, “consideration of the Gillette defence is superfluous and unnecessary”. The Court went as far as to say that

it is arguably preferrable in some cases for the court not to take the shortcut offered by the Gillette defence because the more laborious claim construction process may lead to a conclusion that the claims in question are invalid. Such a conclusion would be of interest not just to the parties, but also to the broader public.

The Court of Appeal did not specify, however, the circumstances in which it may be preferrable for the court to decline relying on the Gillette defence. In any event, the practical consequences of the Court’s views on the Gillette defence will likely be minimal, given that, as the Court observed, no one really relies on the Gillette defence alone.

Common general knowledge may fill in gaps to satisfy the disclosure requirement of the test for anticipation as long as the test is met

The test for anticipation in Canada has two parts, namely disclosure and enablement. The first part requires that (i) the disclosure “must contain so clear a direction that a skilled person reading and following it would in every case and without possibility of error be led to the claimed invention, and (ii) no trial and error or experimentation by the skilled person is allowed at this stage. Furthermore, all essential elements of the claim in issue must be disclosed and enabled in a single prior art reference. 

One of the issues considered in the present case was whether the common general knowledge of a skilled person can fill in the gaps in a prior art reference in assessing the disclosure aspect of the test for anticipation. In this regard, the appellants argued that anticipation had to be viewed from the perspective of the skilled person taking into account the common general knowledge of that person. While the Court agreed with that proposition, it also noted that it does not follow that a party attacking a patent claim is necessarily entitled to fill in gaps in a prior art reference with such common general knowledge.  Importantly however, the Court did not foreclose this very possibility: 

As stated above, the skilled person must find in the prior art reference sufficient information that he or she could not possibly fail to arrive at the claimed invention. That may nor may not be so in a case where the skilled person is required to fill in gaps with the common general knowledge.

Quite interesting. I am not quite aware of any other decision where this was expressed before.

Section 28.3 of the Patent Act is the only mandatory test for obviousness

Since the Supreme Court of Canada Sanofi decision was released in 2008, the test for obviousness in Canada has largely been thought to consist of four steps, namely (i) identify the skilled person and the relevant common general knowledge of that person, (ii) identify the inventive concept of the claim in question, (iii) identify the differences between the state of the art and the inventive concept, and (iv) determine, without any knowledge of the alleged invention as claimed, whether these differences would have been obvious to the skilled person.

If right about now you are wondering how one is to assess bridging the gap between prior art and the claims without considering the claims, well, no one ever said obviousness was not complicated. After all, pages and pages of decisions and commentary have been written, and passionate (for IP lawyers, anyway) arguments have taken place about what the test for obviousness really is. 

But perhaps, fundamentally, the legal test for obviousness is a lot less complicated. The appellant in this case argued that the trial judge erred by failing to properly carry out steps (iii) and (iv) of the Sanofi obviousness test. The Court of Appeal agreed in part, finding that the trial judge merged steps (ii), (iii) and (iv).  However, it found that the trial judge did not commit an error. The four-part Sanofi test, the Court noted, is not mandatory, and Sanofi itself warns that one should avoid “an overly rigid rule that limits the obviousness inquiry”. In the Court’s view, “the only mandatory considerations are those laid out in section 28.3 of the Patent Act, which is concerned with obviousness to a person skilled in the art or science to which the invention pertains, having regard to the “information disclosed before the [relevant date] in such a manner that the information became available to the public in Canada or elsewhere.””

While I do not expect parties to abandon reliance on the Sanofi framework any time soon, this decision suggests, and perhaps confirms, that the test for obviousness in its essence boils down to the question ‘was it obvious to a skilled person, in view of what was disclosed to the public’, and the rest is facts.

Best mode is not just for claims to machines? 

Section 27(3)(c) of the Patent Act requires that the specification of an invention must, in the case of a machine, explain the principle of the machine and the best mode in which the inventor has contemplated the application of that principle. The appellants argued that this requirement should apply to claims to a “system” and the Court of Appeal agreed with that.  Notably, the Court added that “there is considerable doubt as to whether, despite the wording of paragraph 27(3)(c), the best-mode requirement is limited to machines”.

Overbreadth is a distinct ground of invalidity

Under Canadian law, there are two ways that a patent claim can fail for overbreadth: it can be broader than the invention disclosed in the specification, or it can be broader than the invention made by the inventor.  

The Court of Appeal confirmed that, while the doctrine of overbreadth may overlap with other grounds of invalidity, overbreadth is a distinct ground of invalidity that must be considered separately.

So what if new subject matter was added during prosecution?

Section 38.2(2) of the Patent Act prohibits the addition of matter that cannot reasonably be inferred from the specification or drawings contained in the application when it was filed. The appellant argued that the applicant added to claims matter beyond that allowed by section 38.2(2) and, for this reason, the patent was invalid. The Court of Appeal rejected this argument in part on the facts, but pointing out that the Patent Act does not provide for revocation for the patent if section 38.2(2) is violated.

It remains unclear what consequences, if any, with respect to the validity of a patent, a breach of section 38.2(2) carries.