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Bar Raised for Attacking Patent Validity in Canada; Duty of Candour Narrowed - by David Heller and Vanessa Komarnicki
In a decision released on July 18th, 2011, the Federal Court of Appeal found that the duty of good faith from s. 73(1)(a) of the Canadian Patent Act cannot be relied upon to attack the validity of an issued patent (Corlac Inc v Weatherford Canada Ltd (“Weatherford”), 2011 FCA 228).
S. 73(1)(a) states that “[a]n application for a patent in Canada shall be deemed to be abandoned if the applicant does not ... reply in good faith to any requisition made by an examiner in connection with an examination”.
Previous decisions of the Federal Court in GD Searle & Co v Novopharm Ltd (“GD Searle”), 2007 FC 81, and Lundbeck Canada Inc v Ratiopharm Inc (“Lundbeck”), 2009 FC 1102, held that under s. 73(1)(a) patent applicants have a duty of candour to the Patent Office akin to the duty a litigant has to be candid when bringing an ex parte proceeding, and that failure to act in good faith may result in retroactive abandonment of a patent. As an ex parte proceeding is one-sided, the applicant therefore has a high onus to present his or her position fairly and without bias.
Addressing these earlier decisions, the Court in Weatherford stated that “[t]o the extent that the Federal Court decisions in G.D. Searle and Lundbeck can be interpreted as standing for the proposition that paragraph 73(1)(a) can be relied upon for the purpose of attacking the validity of a patent, they should not be followed.”
Instead, the Court held that s.73(1)(a) only operates during the prosecution of the patent application. After the patent issues, its operation is “extinguished” and s. 53(1) must be utilized with respect to allegations of misrepresentation. SS.73(1)(a) and 53(1) are “mutually exclusive.” S. 53(1) provides that “[a] patent is void if any material allegation in the petition of the applicant in respect of the patent is untrue”.
During prosecution of the patent in Weatherford, a Mr. Grenke asked that a Mr. Torfs be removed as an inventor. On request from the Patent Office, Grenke swore an affidavit stating that he was the true sole inventor of the patent. The Trial Judge found that Torfs actually was an inventor, and that Grenke’s affidavit was motivated by his perception that Torfs had cut him out of other patents.
On applying s. 53(1), the Court in Weatherford upheld the Trial Judge’s conclusion that Mr. Grenke’s misstatement regarding inventorship was not material. The Trial Judge’s finding with respect to motive did not translate into a finding that Mr. Grenke made a wilful misleading statement. The Court was not prepared to find the patent void under s. 53(1) in the absence of an analysis of Grenke’s belief regarding inventorship at the relevant time. This decision leaves one to wonder how badly must the applicant behave before his actions can invalidate a patent? The reasons of the court are quite clear that acting contrary to s. 73(1)(a) can never invalidate an issued patent. The court found that it was the duty of the Commissioner of Patents, during the pendency of the application, to decide on s. 73(1)(a), and that s 73(1)(a) cannot be relied on for the purpose of attacking the validity of a patent.
The decision was also groundbreaking in finding that there are only 5 grounds on which one can invalidate a patent. Previously, practitioners had no clear answer guide or limit to the bases upon which validity can be attacked. Noting that the Canadian Patent Act is a “complete code”, the Court in Weatherford stated that the grounds for attacking a patent’s validity are delineated in the Patent Act and limited to: (1) utility under s. 2, (2) novelty (anticipation) under s. 28.2, (3) obviousness (inventiveness) under s. 28.3, (4) sufficiency of disclosure under s. 27(3) and (5) an untrue material allegation or a willfully misleading omission or addition under s. 53(1).
Considering the last basis for attacking a patent, it would appear that there remains a duty of candour in Canada, but that this duty is only breached if willfully breached. In the present case, the trial judge never found that Grenke’s removal of Torfs was a willful misleading statement.
In recent years, decisions of the trial courts have found patents invalid for breach of a poorly defined duty of candour. The court considered the general good faith requirement advanced by the appellants to be the “atomic bomb” of patent law, and “ever-expanding”. Just as the US doctrine of inequitable conduct has been tightened, the FCA found fit to restrict the requirement of good faith in dealings with the patent office to only clear cases of willful malfeasance.