Foreign Prosecution History: To Admit, Or Not To Admit, That Remains a Puzzle To Canadian Courts

By Osman Ismaili and Grace Wang, February 16, 2021

CanMar Foods Ltd. v. TA Foods Ltd., 2021 FCA 7

Section 53.1 of the Patent Act has brought about a significant shift in the Canadian approach to file wrapper estoppel by enabling the introduction of a patent’s prosecution history during claim construction. Prosecution files are now admissible to rebut a patentee’s representation that attempts to recapture ground conceded during the patent prosecution to avoid prior art.

In a unanimous decision, the Federal Court of Appeal (“FCA”) concluded that the Federal Court (“FC”) should have refrained from considering the prosecution history of the corresponding US Application at the trial level. However, whether the prosecution history of a foreign application can ever be considered pursuant to section 53.1 of the Patent Act is still unclear.

Background

CanMar Foods Ltd. (“CanMar”) and TA Foods Ltd. (“TA”) are two Saskatchewan corporations competing in the business of manufacturing flax seed products. CanMar alleged that TA infringed its patent (the “376 Patent”) entitled “Methods for Roasting Oil Seed, and Roasted Oil Seed Products.” However, TA argued that its oil seed roasting or cooking process fell outside the claims of the ‘376 Patent. Specifically, TA’s process neither heated oil seed in a “stream of air” nor maintained the oil seed in an “insulated roasting chamber or tower.” Furthermore, these two limitations were added by CanMar during the prosecution of the corresponding US Patent Application (the “405 Application”).

In contrast, TA only used a Micronizer for heating oil seed via infrared radiation. Moreover, it was determined that the hoppers and the cooling tower of the Micronizer were clearly uninsulated. Therefore, TA claimed that no infringement could be found on the essential elements of the ‘376 Patent.

The trial judge considered two issues: first, CanMar expressly acknowledged that the claims of the ‘376 Patent had been amended to be substantially the same as the corresponding claims of the ‘405 Application in the United States; second, CanMar admitted that the amendments had limited the scope of the claims in order to overcome the novelty and obviousness concerns raised before the USPTO.

Therefore, the trial judge concluded that the language of section 53.1 generally should be limited to communications between the patentee and the Canadian Patent Office. However, consideration of foreign prosecution histories may be permissible as part of a purposive construction of the claims of the ‘376 Patent in such “extraordinary circumstances”.

Given that TA’s roasting process did not comprise the two essential elements at issue, the trial judge held that TA did not infringe any claims of the ‘376 Patent.

Analysis

In the appeal decision, the FCA considered the scope of section 53.1 and whether it should cover communications between patentees and foreign patent offices.

The FCA found that the trial judge’s heavy reliance on the US case of Abbott Labs v. Sandoz, 566 F.3d 1282 (2009) [Abbott Labs] was inappropriate. In Abbott Labs, the US patent claimed priority from the application of the foreign patent which necessarily entailed that express reference to the foreign patent was made. Such was not the case here. Another US case, Paice LLC, The Abell Foundation, Inc. v. Ford Motor Company, 881 F.3d. 894 (2018) was found to be more relevant, citing that "[t]o incorporate material by reference, the host document must identify with detailed particularity what specific material it incorporates and clearly indicate where that material is found in the various documents."

However, CanMar only mentioned briefly in a response to the Examiner that “new claims 1-19 correspond substantially to those submitted during prosecution of a related United States application.” The FCA held that it would be a far stretch to say the prosecution of the US Application was incorporated by reference when the specific application was not even cited within the document.

Furthermore, the FCA considered the public policy reasons and held that allowing foreign patent prosecution history into the analysis might lead to overly contentious and expensive litigation. While the global system has become more interconnected, some differences lie in the respective registration processes and the languages of patent claims. For example, a party may disclaim an element in one country that they do not have to disclaim in another, and the potential issues of translation may lead to major problems in the interpretation of the claims as well.

That being said, the FCA also pointed out that one should not underplay the public interest in keeping those previously disclaimed elements from being re-claimed in future infringement cases.

In conclusion, the FCA ruled that the corresponding US prosecution history should not be considered, but wished to express no firm views on the broader issue of whether the prosecution history of a foreign application can ever be considered pursuant to section 53.1 of the Patent Act. As a result, the FCA simply upheld the underlying decision that TA did not infringe the ‘376 Patent at issue and that CanMar’s appeal should be dismissed.

Commentary

Before the introduction of section 53.1 of the Canadian Patent Act, it was very clear that the prosecution history in another jurisdiction was inadmissible for the purpose of claim construction. In this case, section 53.1 of the Patent Act is perceived as a step to better align Canadian law with its UK and US counterparts.

The importance of the trial level decision was significant, as it was the first case in Canada to interpret the purpose of section 53.1 and how it compares to the application of file wrapper estoppel in the UK and the United States. The broader issue of whether the prosecution history of a foreign application can ever be considered will be left to the courts to clarify in future decisions.

If you are dealing with an IP litigation issue, please feel free to reach out to MBM for a free consultation

What Are the Risks of Not Patenting Your Invention?

By David Fraser, March 2, 2021

Companies large and small often think long and hard about whether to patent their products. For small companies and startups, it is often a question of limited time and money. For larger companies, budget is also a concern, but often it is also the time required of inventors to adequately document an invention disclosure and to work with a patent professional. Often, a patent inventor is also a company executive such as the CEO or CTO and their time is limited.

So, what happens if you decide not to patent? What are the possible drawbacks? What are the risks?

A patent can be looked at in several ways:

• It can be viewed as a type of insurance: if someone copies my invention or if someone else tries to patent the same invention or a very similar one.
• It can also be looked at as an investment.
  • It may allow you to gain access to a competitor’s patents by licensing your patents to them in return.
  • Filing a patent might be necessary or very helpful in obtaining financing from investors.
• It also allows you to license your invention to others and collect a royalty fee. Technology licensing can be very important for a small company that may lack the resources to fully benefit from their invention.

One of the first things to consider is whether a competitor or third party can figure out your invention based on seeing your product in use, by simply viewing it, or by reverse engineering it. For some inventions, it is clear what is being done as soon as you see it. For other inventions, it can take a significant amount of analysis to figure it out. The more your invention is successful and popular, the more incentive there is for someone to try to determine how it works. Without patent protection, once someone has figured it out there is nothing stopping them from using it themselves.

Another thing to consider is what happens if someone else patents your invention independently. For certain pressing problems, there may be several different teams looking for a solution simultaneously. If you decide not to patent your solution, someone else may patent theirs first and it may be sufficiently broad to encompass what you are doing as well. Luckily, if you are already practicing your invention before the other patent is filed or published, depending on the jurisdiction, you may continue to do so. However, this can quickly get complicated as you may be called upon to prove that your use of your invention predates your competitor’s patent. Things can also become more complicated if you decide to sell your business or a portion of your business. Can the buyer practice your invention, or can you continue to do so? If your exit plan involves a possible sale of your company, the lack of a patent or the presence of a competing patent could be a real barrier to you realizing your goals.

To make the right decision whether to patent or not, here are some things to consider:

1. Can a competitor easily figure out your invention from your product?

2. Would someone else obtaining a patent that covers your invention overly restrict your business plan and options?

3. Is the cost of a patent reasonable given your investment in product development and predicted sales?

4. Do you require a patent as insurance when working with partners or manufacturers?

If you do decide that filing a patent is the right decision, here are a few steps you should take:

1.Be careful not to disclose your invention or offer it for sale before filing your patent application as it may prevent you from obtaining the patent.

2.Remember that the first to file gets the patent, so don’t delay filing your patent too long or someone else might beat you to it.

3.Take advantage of any government programs that help with funding for patent applications.

No matter what you decide, we recommend that you consult with a patent professional to evaluate the risks and tradeoffs of your patenting decision.

If you are considering patenting your innovation or product, please feel free to reach out to MBM for a free consultation.

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Copyrights in Canada – Process, Timeline, Costs, and the Upcoming Proposed Changes to the Copyright Act

By Daniel Lanfranconi, March 16, 2021

Most people are familiar with patents and trademarks as the most common forms of intellectual property, however, copyrights and their importance as part of your overall portfolio of intellectual property assets are sometimes neglected. This article attempts to broadly cover the subject of copyrights in Canada in terms of process, timeline, costs, as well as the upcoming proposed changes to the Copyright Act.

What rights does a copyright holder have?

Copyright is defined by the Canadian Intellectual Property Office (CIPO) as an exclusive right to produce, reproduce, publish, or perform an original literary, artistic, dramatic, or musical work.

A common misconception is that copyright protects an idea. The truth is that copyright does not protect the idea itself but instead protects the expression of an idea. This expression needs to be “fixed” in a tangible medium (written or recorded) for you to be able to copyright it. For example, copyright gives you the right to control the expression of your original written or recorded speech. As a result, you can charge a fee for allowing another party to express themselves in the same way you expressed yourself in your copyrighted speech as well as your copyrighted literary, artistic, dramatic, and musical works.

How long do copyrights last?

Copyright in Canada currently exists for the author’s lifetime, the remainder of the calendar year in which the author dies, plus 50 years following that calendar year.

However, changes to these current time limits are coming. On February 11, 2021, the Canadian government announced that due to the Canada-United States-Mexico Agreement (CUSMA), Canada has agreed to extend, by the end of 2022, the protection period to a minimum of the author’s lifetime, the remainder of the calendar year in which the author died, plus 70 years following that calendar year.

Why register copyrights?

Copyright is automatic and protects an original work the moment the work is created. Therefore, copyright does not have to be registered for an author to have copyright rights.

However, registering copyright for your work can be very beneficial because going through the official registration process with the Canadian Intellectual Property Office (CIPO) results in a registration certificate. This registration certificate is an official Canadian government document that is proof that you have rights to your work’s expression and provides a date stamp. This registration certificate can be persuasive evidence when suing someone who is infringing your rights.

How long does it take to register a copyright?

Copyright registration can generally be obtained within a few weeks.

How much does it cost to register a copyright?

Copyright registration is relatively inexpensive. The full process from drafting the copyright application, ensuring that the work is categorized correctly, filing it, reviewing the issued certificate of registration, and sending it to the author, is approximately $400, including MBM professional fees and the required government fees.

What are the steps to register a copyright?

The first step is to draft and file a copyright application.

A crucial piece of information required at this step is the date and place of your work’s publication. It is critical to make sure that CIPO correctly records the date and place of publication if in the future you decide to litigate against an infringer and the infringer argues that their work predates your work.

The next step in the process is an examination of the application by CIPO. If the CIPO examiner determines that the application requires changes, amendments to the application will need to be filed to prevent rejection. Once all the objections are satisfied, the application will register, and the registration certificate will be issued.

What are the proposed amendments to the Canadian Copyright Act?

Two Private Member’s Bills C-272 and S-225, may result in changes to the Copyright Act.

Private Member's Bill, C-272 was introduced on February 22, 2021, to add section 41.121 to the Copyright Act to modify the treatment of technological protection measures (TPMs). TMPs reduce copyright infringement by controlling the use of a work. The Copyright Act provides stiff penalties including, imprisonment and/or fines up to $1,000,000 for circumventing TMPs. The proposed amendment can allow a person to circumvent "a technological protection measure that controls access to a computer program if the person does so for the sole purpose of diagnosing, maintaining or repairing a product in which the computer program is embedded". As a result, Bill C-272 will add an additional circumvention exception to the current circumvention exceptions allowed by the Copyright Act. The existing circumvention exceptions include exemptions for law enforcement and national security, reverse engineering for software compatibility, encryption research, verification if a TPM permits the collection or communication of personal information, security testing of computer systems, and accessibility for disabled persons.

Private members bill S-225 was introduced on February 17, 2021, to add a section to the Copyright Act to allow remuneration for journalistic works. This bill was introduced because news stories are easily shared using social media without paying a royalty to the copyright holder. As a result, news publisher’s advertising revenue has decreased significantly while at the same time, social media platforms that facilitate this sharing have significantly increased their advertising revenue. The amendment proposes to add, "[i]f a journalistic work ... is reproduced or published on a digital platform that is owned or controlled by a designated digital platform provider, the Canadian journalism organization that owns the copyright in that journalistic work is entitled to remuneration”.

This article broadly covered the process of copyrights as well as some of the upcoming suggested changes to the Copyright Act. If you have created an original literary, artistic, dramatic, or musical work and you have further questions and would like to understand your rights and file one or more copyrights, please feel free to contact MBM for a free consultation.

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