Federal court of appeal provides welcome clarity in patent validity challenges
In its July 18, 2011 decision in Weatherford Canada Ltd v Corlac Inc (2011 FCA 228), the Canadian Federal Court of Appeal (FCA) firmly established that the validity of issued patents cannot be challenged on the basis of misrepresentations to the patent office pursuant to Section 73(1)(a) of the Patent Act.
The FCA explained that this section can only be used during the prosecution of a patent application and is unavailable once the patent issues. This resolves some uncertainty in Canadian jurisprudence regarding ‘duty of candour’ during the prosecution of patent applications.
Section 73(1)(a) provides that a patent application shall be deemed to be abandoned if the applicant does not reply in good faith to any requisition made by an examiner within the given time period. Reinstatement is possible, but only if obtained within a prescribed time.
The grounds for attacking the validity of an issued patent are set out in the Patent Act. In addition, a patent can be found void if the conditions of Section 53(1), which has components of wilfulness and materiality, are met.
The FCA noted that the “fundamental flaw” in the appellant’s arguments was the failure to distinguish between a patent application and an issued patent—a distinction that is “consistently maintained” throughout the Patent Act. Section 53(1) “speaks to misrepresentations in relation to…issued patents”, whereas Section 73(1)(a) “speaks to good faith in the prosecution of the patent application. The provisions are mutually exclusive.”
"THE FCA STATED THAT IT IS FOR THE COMMISSIONER OF PATENTS TO DETERMINE WHETHER AN APPLICANT'S RESPONSE TO A REQUISITION FROM AN EXAMINER IS MADE IN GOOD FAITH, NOT FOR THE COURTS, BECAUSE 'THE COURTS DO NOT ISSUE PATENTS'."
The FCA further commented that allowing Section 73(1)(a) to be used to invalidate a patent would “result in absurdity”, because an issued patent would be subject to retroactive scrutiny by the courts. Courts would have to scrutinise submissions made by patent applicants during prosecution that would have generally been made many years prior, and these submissions would be “judged against unknown criteria”.
The FCA stated that it is for the Commissioner of Patents to determine whether an applicant’s response to a requisition from an examiner is made in good faith, not for the courts, because “the courts do not issue patents”.
Domain name developments
In South Simcoe Railway Heritage Corp v Wakeford, the Ontario Supreme Court heard a defendant’s motion to strike a statement of claim for disclosing no reasonable cause of action. The plaintiff alleged that the defendant had misappropriated its domain name registration and claimed damages for breach of trust, detinue sur trover, wrongful conversion and misappropriation of intellectual property rights.
The defendant, a former volunteer member of the plaintiff’s board, registered the domain steamtrain.com on the plaintiff ’s behalf in 1996, identifying the plaintiff as the registrant and itself as the administrative contact, so the defendant retained exclusive control over the domain. In 2004, the plaintiff discovered that the defendant had changed the registrant’s name without its knowledge or permission.
Further unauthorised changes occurred in 2005 when the defendant made all registration and contact details private. The defendant effected these changes, together with the annual renewals of the domain, without advising the plaintiff. The defendant then denied the plaintiff’s request to change the registrant information back, and claimed ownership of the domain as well as the right to revoke the plaintiff’s ability to use the domain at any time.
The Ontario Supreme Court held that the time limit for pursuing the plaintiff’s claims for detinue sur trover, wrongful conversion and misappropriation of IP rights began when the plaintiff discovered that the defendant had changed the domain registrant’s name in 2004. These claims were therefore time-barred. However, the limitation period for the breach of trust claim had not expired and a trial was required to determine the mixed issues of fact and law relating to that.
The parties also raised the issue of whether the Ontario Supreme Court had jurisdiction over the ownership and transfer of the domain name. It noted that it could not make a specific determination on this issue in the absence of being referred to appropriate statutory materials, and so “it was not convinced that this aspect of the claim should [automatically] be dismissed for want of jurisdiction”.
