Federal Court Finds CIPO Examination Practice Out of Line with Supreme Court Precedents

By Claire Palmer & Kay Palmer, September 29, 2020

The Federal Court in a recent decision found a wide-reaching examination practice respecting purposive construction that was introduced by The Canadian Intellectual Property Office (CIPO) 7 years ago, to be against principles of purposive construction set forth by the Supreme Court and damaging to the prosecution of patents in several technology areas.

CIPO issued practice notice PN2013-02 entitled “Examination Practice Respecting Purposive Construction” on March 8, 2013 that instructed Examiners to frame their purposive construction of the claims through a problem and solution lens. In particular, it was CIPO’s position in this practice notice that “identification of the problem and the solution provided by the invention informs the purposive construction of the claims” and that only those elements that solved the identified problem were essential.

A second practice notice (PN2013-03) entitled Examination Practice Respecting Computer-Implemented Inventions was also issued that detailed using the problem and solution framed “purposive construction” for the examination of applications directed to computer implemented methods.

Two subsequent practice notices (PN2015-01 and PN2015-02) were also issued that detailed using the problem and solution framed “purposive construction” for the examination of applications directed to medical uses and medical diagnostic methods.

These CIPO practices significantly and negatively impacted prosecution in many areas of technology including computer implement methods, personalized medicine, diagnostics and biotechnology. In fact, to date, there have been 31 Patent Appeal Board decisions that referenced practice notice PN2013-02, ten of which included statutory subject matter objections. Of these ten, seven were refused outright.

There were also 84 Patent Appeal Board decisions that referenced practice notice PN2013-03 and 8 Patent Appeal Board decisions that reference practice notice PN2015-01.

The Federal Court in the recent Choueifaty v. Canada (Attorney General) decision (2020 FC 837) turned their eyes to CIPO’s practice of using the problem and the solution approach to inform purposive construction of the claims. This decision specifically reviewed Patent Appeal Board decision 1478 that specifically referenced PN 2013-03. Although Choueifaty v. Canada does not specifically reference the practice notices, the Court referenced the Manual of Patent of Practice 13.05.02 which incorporated the content of practice notice PN2013-02. The Court found:

[31] It is evident on a reading of the MOPOP that the Commissioner, notwithstanding stating that the patent claims are to be construed in a purposive manner, does not intend or direct patent examiners to follow the teachings of Free World Trust and Whirlpool. …

[37] The Appellant submits, and I agree, that using the problem-solution approach to claims construction is akin to using the “substance of the invention” approach discredited by the Supreme Court of Canada in Free World Trust at para 46. …

[40] For these reasons, I find that the Commissioner erred in determining the essential elements of the claimed invention by using the problem-solution approach, rather than the approach Whirlpool directs be used. (Emphasis added)

MBM welcomes this decision from the Federal Court that affirms our longstanding position that CIPO’s problem and solution framed “purposive construction” was inconsistent with the principles set forth by the Supreme Court of Canada.

New Federal Court Decision Provides for Greater Protection of Combination Drugs Under CETA

By Poonam Tauh and Carl Farah, August 18, 2020

In 2017, the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) came into force. CETA covers virtually all sectors and aspects of trade and aims to increase bilateral trade and investment between Canada and the EU. In order to comply with this agreement, Canada enacted the CETA Implementation Act (CIA) which provided for, among other things, the introduction of the Certificate of Supplementary Protection (CSP) to the Patent Act. CSPs offer up to two years of additional protection to patentees for the medicinal ingredient or the combination of medicinal ingredients in a drug and is meant to compensate for time spent researching and obtaining regulatory approvals. In order to receive a CSP, the drug must be approved by Health Canada via a Notice of Compliance (NOC).

On July 10, 2020, the Federal Court issued a decision in a judicial review on the Minister of Health’s (the “Minister”) refusal to issue a CSP to ViiV Healthcare ULC (“ViiV”) in respect of Canadian Patent No. 2,606,282 (the “282 patent”) and the drug JULUCA^®. JULUCA^® is a combination drug containing medicinal ingredients dolutegravir and rilpivirine. The 282 patent is listed on the Patent register with respect to JULUCA^®. The 282 patent, has claims directed only to dolutegravir, but does not have claims directed at the combination of dolutegravir and rilpivirine.

At issue in this judicial review, was whether the Minister had reasonably interpreted the Patent Act and the CSP Regulations (CSPR) in a manner that was consistent with CETA. The Minister was of the position that a CSP could not be granted because the 282 Patent does not pertain to the combination of the medicinal ingredients contained in JULUCA^®. In taking this position, the Minister relied primarily on the Regulatory Impact Analysis Statement (RIAS) for the CSPR and the CSP’s Guidance Document. ViiV took the position that CETA’s intellectual property provisions were intended to provide protection for single medicinal ingredients or combinations of medicinal ingredients in new drug products. In addition, ViiV contended that the Minister’s interpretation would incentivize drug manufacturer’s to continue to make separate products instead of innovating fixed-dose combination therapies. The Court held that the Minister had unreasonably considered ViiV’s submission since the CIA required that the CSP legislation be interpreted in a manner that was consistent with CETA and that the sole reliance of the Minister on the CSPR RIAS and associated Guidance Document was not adequate, as neither CSPR RIAS nor the Guidance document has legislative force. As such, the Court granted the judicial review and remitted the matter to the Minister for redetermination.

In conclusion, this decision, if not appealed by the Minister would expand the scope of combination drugs eligible for CSP protection. In addition, this decision exemplifies the importance of harmonious interpretation of Canada’s international obligations and the statutory language with respect to IP protection in Canada.

For more information please contact:

Poonam Tauh, Senior Patent Agent

T: 403.800.9018

E: This e-mail address is being protected from spambots. You need JavaScript enabled to view it.

Carl Farah, Summer Student

T: 613.801.1072

E: This e-mail address is being protected from spambots. You need JavaScript enabled to view it.

This article is general information only and is not to be taken as legal or professional advice. This article does not create a solicitor-client relationship between you and MBM Intellectual Property Law LLP. If you would like more information about intellectual property, please feel free to reach out to MBM for a free consultation.

Grey Market Goods – Coty and Costco Battle it Out in Québec

By Scott Miller and Carl Farah, September 1st, 2020

The Québec Court refuses to force Costco to disclose where it obtained genuine goods but offers a practical solution to track down the source of the goods.

Grey marketing typically consists of a retailer purchasing genuine branded products abroad for less than offered to them from a local distributor. Grey marketing is generally problematic for international brand owners, who may end up competing against their own products thereby losing control of how the brand is represented to customers.

On June 22, 2020, the Québec Superior Court, in Coty Inc. c. Costco Wholesale Canada Ltd.[1], issued a decision regarding Coty’s request for a Norwich Order asking the Court to compel Costco to disclose the identity of the supplier who sold it genuine Coty cosmetic products.

Norwich Orders are an extraordinary pre-trial discovery measure that allows the holder of a right to compel an innocent third party to disclose the identity of wrongdoers in order to commence legal proceedings against them.

Coty argued that Costco had obtained Coty products from distributors who had breached their exclusive distribution agreements and as such, Costco ought to reveal the identity of these distributors. However, Costco answered that the doctrine of exhaustion should prevail in that the intellectual property rights (trademark/copyright) embodied in a tangible object are “exhausted” after it undergoes its first sale. The Court agreed with Costco and further noted that Costco’s expectation of privacy should be upheld and there was no evidence that Costco had purchased illegal goods.

The Court refused to issue the Norwich Order. Intriguingly, the Court offered a solution to discover the identity of the alleged foreign distributor(s) who were purported to be in violation of selling outside their territorial limits by implementing a tracking system to determine the origin of the products sold by Costco instead of seeking to compel the disclosure of this information.

In conclusion, this decision further exemplifies the degree to which Norwich Orders are extraordinary measures that should only be granted when there is sufficient evidence to substantiate allegations of wrongdoing.