CanadaPatentBlog

The Supreme Court of Canada has issued a very contentious ruling on copyright as it affects gray market transactions. It is contentious not only because it allows gray market goods bearing copyrighted logos to be imported into Canada, but because the nine judges involved end-up in four different camps.

Kraft Foods Belgium SA (“KFB”) and Kraft Foods Schweiz AG (“KFS”) were respectively, the owners of the Côte d’Or and Toblerone copyrights at issue in this case, as well as manufacturers of chocolate bars marketed under those brand names. The subsidiary of these two corporations, Kraft Canada Inc. (“KCI”) was appointed by these two companies as their exclusive Canadian distributor of Côte d’Or and Toblerone chocolate bars in Canada.

When Euro Excellence Inc. as defendant, having purchased genuine Côte d’Or and Toblerone chocolate bars, (bearing the subject copyrighted logos) from the manufacturers and copyright owners in Europe, attempted to import such products into Canada, KCI obtained injunctions, upheld at the level of the Canadian Federal Court of Appeal, barring distribution of such chocolate bars in Canada so long as they displayed the copyrighted logos. KCI founded it’s right on its status as an exclusive licensee under the Canadian Copyright Act.

The lower court judgments were overturned. Four judges of the Supreme Court ruled that the grant of an exclusive license cannot place of the copyright owner in the category of being a copyright infringer. According to this theory, the exclusive licensee has a right of action against the owner of copyright in contract only. Since Euro Excellence had purchased the chocolate bars from the copyright owners, there were no circumstances under which the importation of bars bearing the copyrighted logos could constitute an infringement in Canada.

These four judges, essentially, made their ruling based on the technical character of the copyright privilege as established by the Copyright Act, according to their interpretation.

Three of the judges, upholding the right of Euro-Excellence to a import the subject chocolate bars, did so on the basis that the Legislature never contemplated use of copyright for incidental markings on commercial products as a vehicle to interfere with the importation of such products. Thus these judges founded their reasons on the intention of the Legislature: ” The protection offered by copyright cannot be leveraged to include protection of economic interests that are only tangentially related to the copyrighted work. … (The Act) is not meant to protect manufacturers from the unauthorized importation of consumer goods on the basis of their having a copyrighted work affixed to their wrapper, this work being merely incidental to their value as consumer goods….. only those distributions which affect the legitimate economic interests protected by copyright will be held to affect prejudicially the owner of the copyright.” Thus these three judges made their ruling based upon a higher, policy-based ground.

Two judges, however, dissented. These judges rejected the premise that there was an exception to copyright infringement for logos on the basis that they are “incidental” to a commercial product. They relied upon the definition of an exclusive license in section 2.7 of the Act which states that such a license grants: ” an authorization to do any act that is subject to copyright to the exclusion of all others including the copyright owner”. Accordingly, these two judges would’ve upheld the finding of infringement based upon a black-letter reading of the Act.

This decision is significant for the distinct approaches taken by different judges to interpreting the scope of private rights granted by the Legislature. Most significantly, three out of nine judges relied heavily on policy considerations to depart from what should judges considered a black-letter interpretation of the law. No doubt law school professors now in their old age would be proud of what their students are accomplishing.

Supreme Court of Canada – Decisions – Euro-Excellence Inc. v. Kraft Canada Inc.

Dennis Crouch’s blog posting of March 22, 2007 entitled: “The New Law of Enablement” provides a commentary on the US Court of Appeals for the Federal Circuit case of Liebel-Flarsheim v. Medrad (Fed. Cir. 2007). This posting has inspired an exceptionally long thread of commentary, giving rise to this commentary as a consequence.
Essentially, the CFCA ruled on a claim to a mechanical drive for a hypodermic needle injector for use with a disposable syringe. The patent included a description which addressed inclusion (only) of a pressure jacket to protect the disposable syringe from bursting under pressure. The CFCA ruled that such claims were invalid when the patent owner attempted to apply the claims against a competitor manufacturing a needle injector without a pressure jacket.
The patent specification indicated in the background discussion that existing disposable syringes required a pressure jacket because syringes that are able to withstand high pressures are “expensive and therefore impractical where the syringes are to be disposable.” The CFCA observed that this taught away from the use of the new style mechanical drive needle injector for use with a disposable syringe in the absence of a pressure jacket.
The competitor developed a mechanical drive hypodermic needle injector system for use with a disposable syringe that did not require a pressure jacket. Essentially, the competitor invented a disposable syringe that was strong enough. The competitor defended itself against the relevant claims on the basis that the patentee had failed to provide an enabling disclosure that would describe how its hypodermic needle injector could be made to work with a disposable syringe in the absence of a pressure jacket.

Even the patentee’s inventors admitted that they were stymied by the challenge of producing a pressure-jacketless system that would work with existing disposable syringes. The competitor succeeded where the patentees inventors said they were not able to provide a solution.
When the application was originally filed, the claims to the mechanical drive included the limitation that the needle injector was claimed in association with a pressure jacket for containing disposable syringes. That limitation was removed during the prosecution of a subsequent Continuation application after the patentees learned of the activities of the competitor in building a system that lacked a pressure jacket.
The CFCA adopted the principle that a patentee’s specification: “must enable one of ordinary skill in the art to practice the full scope of the claimed invention.” (emphasis in original).

Because in the present case the asserted claims read-on and included an injector system with and without a pressure jacket, this was held to be the full scope of the claimed invention. The claims were, on this basis, held invalid. The claims read-on the competitor’s system because the claims were silent about the presence of a pressure jacket.
The principle of this ruling is hotly contested by many of the commentators to the above blog. Some felt that it was unjust for a patentee to be the denied the benefit of claim coverage where the competitor was using all of the features of claims that could not be invalidated on the basis of the prior art. Others felt that the claims should be held invalid where the patentee had failed to provide an enabling disclosure for the full scope of patent claim coverage that the patentee was asserting.
This debate is reminiscent of the often-raise defense in Canadian patent proceedings, that the patentee has: “claimed more than he has invented”. I’’ve always been puzzled at this allegation. If a patent claim fairly describes a characteristic of the preferred embodiment using language which prevents the claim from describing anything in the prior art, then such a claim would seem to be valid. The statement that such a claim covers more than was invented is really a statement that the claim should have included further limitations. But if the claim can stand-up to novelty and obviousness tests, why can’’t such a claim be held valid?
I have always thought that it was permissible to claim a sub-component of an apparatus, focusing the claim on the aspect of an apparatus that is novel and inventive. For example: “a vehicle having a windscreen and a wiper for removing water from the windscreen wherein ……(describing the wiper) “ . If the inventor has described a highway motor vehicle as his preferred embodiment, would it be outside the scope of such a claim to cover such a wiper when carried by a boat, or an aircraft? Would it matter if the disclosure acknowledged that the rubber used in the wiper as described in the preferred embodiment would be susceptible of deterioration in the presence of saltwater, but the claim is silent as to the type of rubber to be used in the wiper?

Could a competitor then adopt the wiper for use with a boat in a saltwater environment by substituting a different rubber not ever mentioned in the original patent disclosure? Would it matter if the different rubber qualifies as a new invention?
Another analogy might be the case where the wiper inventor observed in his patent disclosure that his wiper may be susceptible to lift-off in the presence of high-speed winds. Then a competitor invents a deflector vane which remedies this defect. However, the competitor uses exactly the wiper as conceived and claimed by the patentee.
In either of such cases, could it be said that the patentee had “claimed more than he had invented”; or, as the CFCA had phrased it, failed to: “enable one of ordinary skill in the art to practice the full scope of the claimed invention”?
The key question is whether the “invention” is delimited by the claim or the “invention” is no broader than the inventor’s understanding at the time that the patent description is filed. Reference may also be made to the Canadian Patent Act section 32 which addresses the patenting of improvement inventions.
The exceptional number of commentaries forming the thread for the above blog posting shows the great disparity of opinion arising around this question. There are really two issues at stake. The first is what the law requires, and the second is what good sense would suggest to be appropriate.

(Note:blue highlighted text below is hyperlinked)

Proposed rules for amending the Canadian Patent Rules were published in the Canada Gazette on December 23, 2006. Persons concerned can send-in comments to the Canadian Intellectual Property Office – CIPO by the proposed deadline of January 16, 2007, and possibly a little bit later. The entire set of proposed amendments can be found at the following link:

Canada Gazette – Proposed Amendments to the Patent Rules

The most interesting provisions are those relating to “topping-up” erroneous payments made on a small entity basis when such payment should have been made on a large entity basis. However, the basic, relevant, provisions are essentially as follows: Read the rest of this entry »

Many US attorneys have received advisory letters from their Canadian Associates on the above subject. And many are experiencing frustration in trying to understand the situation. Their frustration is understandable. What follows now is an attempt to provide a clarifying, if not concise, explanation.

Origin of the Small Entity Concept Read the rest of this entry »

ABBOTT LABORATORIES and ABBOTT LABORATORIES LIMITED and THE MINISTER OF HEALTH and RATIOPHARM (A DIVISION OF RATIOPHARM INC.).

This post is about the meaning of “consists essentially of” as interpreted by a recent Canadian decision. This decision is not necessarily correct and is being appealed to the Canadian Federal Court of Appeal. But the logic of the trial judge shows the impact of the policy of “purposive interpretation” under Canadian, and possibly UK, patent law. Read the rest of this entry »

Summary infringement decision, United States Federal District Court for the Central District of California, August 1, 2006

The following is a summary of an interesting decision in the pharmaceutical-generic universe, according to a Biovail Corporation news release of August 2nd, 2006.

The basic patent on the essential drug, bupropion, represented by “Wellbutrin” (Biovail trademark) expired some considerable time ago. It was originally patented by Burroughs-Wellcome (later Glaxo-Wellcome,) in 1974. A competing drug, used to control tobacco craving, is “Zyban”. Biovail Corporation of Mississauga, Ontario, is particularly active in developing and patenting pre-existing drug formulations in new drug delivery formats.

The Biovail patent as reported in the Biovail news bulletin of August 2, 2006 concerns an extended release version of the antidepressant drug “bupropion”, sold by Biovail as “Wellbutrin XL”. Wellbutrin XL has supported the granting of a fresh US patent to Biovail. This additional patent is not directed to the original drug, but to a new composition in tablet form which controls the release of the drug into the bloodstream of a user. The granting of fresh patents for improved drug delivery is not uncommon in the drug industry. In this case, the granting of the further improvement patent for “Wellbutrin XL” may have been particularly justifiable because bupropion in concentrated dosage showed a tendency to invoke seizures. Read the rest of this entry »

I recently encountered a file which I took over mid-prosecution. So far we have filed two RCE’s. Based on time logged, the client has been billed several tens of thousands of dollars. The file is important, but the client is bitter; he wants a discount.

Meanwhile, I have other files where matters are handled on a perfunctory basis at highly competitive prices and I do not wish to implement a discount policy with respect to those files.

I’m toying with the following formula: after the first $5,000 of billings the next $5,000 of billings will receive a 5% discount and as cumulative billings accrue in $5,000 increments, this policy will be repeated until the client has been billed $30,000, the last $5,000 of which will be subject to a 25% discount. At that point, the discount rate could stop increasing, or could mount further to 30% or even 40%. In all events, when the bill gets large, the client eventually gets a significant discount.

I’d like to know whether anyone else thinks that this is a rational formula for addressing the special case where time spent on a file balloons out of all proportion to anybody’s expectation.

Many persons in the patent profession are calling this the most important decision that the Supreme Court will address for years on the subject of patent law. The issue is when to reject an application on the grounds that the invention is “obvious”.

Previously, the US Court of Appeals for the Federal Circuit (CAFC) has been applying the test: for an invention to be considered obvious, there must be something in the prior art that would provide a “motivation, suggestion or teaching” that elements of the prior art could be combined to produce the invention. This test has been seriously criticized by those who oppose the granting patents. This test has been applauded by those who support the granting of patents. Now the Supreme Court has undertaken to visit this issue.

Here is a suggestion for new language on the topic of invention obviousness.

The Golden Rule of patent law is that a patent, once granted, should not interfere with anything that was previously available to the public. What is previously available to the public includes, not only that which has been done or described previously, but also obvious variants on what has already been done or described. 

In other words, the test for “obviousness” is whether what is proposed as a new invention is so similar to the prior art that it was, effectively, already “available to the public”. In which case, this obvious variant is assimilated under the Golden Rule as being part of the prior art and should not be patentable.

I’m simply searching for a new perspective on the issues, even if this perspective does not provide a perfect criterion for resolving this very complex type of issue.

Comments would be most welcome.

The benefits of a priority patent filing only arise in respect of the first filing of an application describing specific features in respect of an invention. This is a stipulation in the Paris Convention which has been adopted as part of the Canadian patent law.

Consequently, US attorneys who proceed by first filing a US provisional application, followed by a US non-provisional application a year later, but without filing an application in Canada within the priority year are exposed to the following limitations under Canadian patent law.

Canada does have a one-year grace period that shelters an application from self-originating public disclosures in the previous year. This partial one-year grace period extends back from the actual Canadian filing date. It does not extend back from the priority date associated with an application. Therefore, if a client, after making an initial US provisional application, decides to publicly disclose their invention, then this sets a one-year deadline from the date of first disclosure for the filing of a patent application in Canada. Read the rest of this entry »