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Does Copyright Extend to “facts”? The Federal Court Sets the Story Straight on the Extent of Copyright Protection in Non-fiction Work

Posted on by Debbie Malek

INTRODUCTION

In the recent 2021 decision of Winkler v. Hendley, 2021 FC 498 [Winkler], the Federal Court (the “Court”) addressed an unusual issue of copyright protection in a nonfictional work containing descriptions of events with questionable historical accuracy. In its decision, the Court reiterated that copyright protection does not extend to facts. Moreover, when a work is presented as nonfiction, the facts are not subject to copyright protection. This case serves to reinforce the scope of copyright protection and sets an important precedent in Canada for copyright in nonfictional works.

CASE BACKGROUND AND OVERVIEW OF THE DISPUTE

In Winkler, the plaintiffs, John Winkler and the estate of the late author Thomas Kelley (“Mr. Kelley”) sued author, Nate Hendley (“Mr. Hendley”), and his publisher, James Lorimer & Company Ltd., the defendants, for copyright infringement. In 1954, Mr. Kelley published a book called The Black Donnellys, which was published and sold as a nonfictional account of a notorious family from Lucan, Ontario. In 2004, Mr. Hendley wrote and published a book called The Black Donnellys: The Outrageous Tale of Canada’s Deadliest Feud (the “Outrageous Tale”), which cited The Black Donnellys as authority for many of the historical events detailed in the book. Despite The Black Donnellys being published as nonfiction, the plaintiffs argued that some of the events described in the book were actually fictional, or contained embellishments made by the author. It was on the basis of these alleged embellishments and “fictional accounts” that the plaintiffs based their claim of copyright infringement against the defendants under sections 3[1] and 27[2] of the Copyright Act (the “Act”).

ANALYSIS AND DECISION

In its analysis, the Court began by clarifying that in Canada, copyright subsists “in every original literary work”, regardless of “whether that work is one of fiction or nonfiction”[3]. The Court further reiterated the longstanding principle that there is no copyright protection in facts or ideas, but rather, copyright protects the original expression of those ideas. What is critical for copyright infringement is whether there was a substantial taking of the work in issue, defined as the “part of the work that represents a substantial portion of the authors’ skill and judgment”[4]. Importantly, the historical accuracy of the presented facts in a work is not contemplated by the Act. Therefore, the factual aspects of The Black Donnellys were excluded from the Court’s comparison of passages from The Black Donnellys and the Outrageous Tale in its determination of whether there was copying of a “substantial part” of the originality of The Black Donnellys.

After the facts were excluded, the Court concluded that any similarities between the works were so minimal that they did not amount to a substantial taking. Therefore, the Court held that there was no copyright infringement. Moreover, the Court stressed that an author cannot publish a work as nonfiction and later claim that the facts were actually fiction for the purpose of pursuing a copyright case. There are clear public policy reasons behind this principle; the public should be able to rely upon published facts without the concern that the author will later turn around and sue for copyright infringement at a whim. The Court did leave open the possibility that future cases may arise in which asserted “facts” are so implausible that the work must be interpreted as a fiction; however, this scenario was not applicable in this case.

IMPORTANCE OF COURT DECISION AND KEY TAKEAWAYS

  • Winkler is the first Canadian decision addressing a nonfiction work that was later claimed to be fiction.
  • The law is similar in other countries; for example, in the United States, the doctrine of copyright estoppel (also known as the “asserted truths” doctrine) protects against copyright holders of a nonfiction work who subsequently seek to claim that the work is fiction as grounds for copyright infringement.
  • The Court further affirmed the longstanding principle that there is no copyright protection in facts or ideas but rather the expression of those ideas. Importantly, as a general rule, the accuracy of such facts or ideas is not contemplated for the purposes of copyright protection.

CONCLUSIONS

The decision in Winkler is an important consideration for authors who intend to publish and market a book, and highlights the need to look to the future regarding the scope of copyright protection in a published work. Of particular importance is the need to be clear about what is being presented as fact and what is embellished in a nonfictional account. Therefore, prospective authors should also consider consulting with a lawyer experienced in copyright law to discuss how they can best protect their rights in a given literary work.

 

For expert assistance with any issues pertaining to copyright in a work, please reach out to MBM for a free consultation:

Scott Miller, Co-Managing Partner, Head of the Litigation Department
T: 613-801-1099
E: smiller@mbm.com

Carly Horvath, Ph.D., Intellectual Property Lawer
T: 613-801-0456
E: chorvath@mbm.com

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.
[1] Copyright Act, R.S.C., 1985, c. C-42, s 3(1).Copyright in works3 (1) For the purposes of this Act, copyright, in relation to a work, means the sole right to produce or reproduce the work or any substantial part thereof in any material form whatever.
[2] Ibid, s 27(1).Infringement generally27 (1) It is an infringement of copyright for any person to do, without the consent of the owner of copyright, anything that by this Act only the owner of the copyright has the right to do.
[3] Winkler at paras 53-54 citing CCH Canada Ltd v Law Society of Upper Canada, 2004 SCC 13 at paras 8, 14.
[4] Cinar Corporation v Robinson, 2013 SCC 73 at para 26.

Late Report of Patent Grant leads to Irretrievable Loss of Drug Patent Register Listing Rights

Posted on by Debbie Malek

Merck Canada Inc. v Canada (Health), 2021 FC 345

The grant of a patent containing a claim that relates to a medicine or use of the medicine approved by Health Canada triggers a 30-day deadline from the date of payment of the final fee to list the patent on the Patent Register maintained by the Therapeutic Products Directorate. A careful review of the timing of the grant after payment of the Final Fee (i.e., Issue Fee) in this case and the Canadian Intellectual Property Office’s service standards offers valuable lessons.

In this decision, the Federal Court (the “FC”) dismissed an application for judicial review brought by Merck Canada Inc. (“Merck”) over the refusal by the Minister of Health (the “Minister”) to add Canadian Patent No. 2,830,806 (the “‘806 Patent”) to the Patent Register pursuant to section 4(6) of the Patented Medicines (Notice of Compliance) Regulations (the “PM(NOC) Regulations”).

BACKGROUND

Merck markets KEYTRUDA®, a biologic drug for the treatment of certain advanced-stage cancers. The ‘806 Patent was issued on May 12, 2020, and contains claims that are directed to a formulation of the drug KEYTRUDA®.

The issuance of the ‘806 Patent was not reported by the Canadian patent agent retained by Merck’s American parent company (“Merck USA”) until June 15, 2020, more than a month after the patent had issued. Merck USA had however independently learned of the issuance on June 12, 2020 and immediately instructed Merck to take the necessary next steps. Patent lists were submitted the same day, but after the close of business, and were therefore deemed to have been filed on Monday, June 15, 2020.

On June 19, 2020, the Minister informed Merck of the preliminary determination that the patent lists relating to the ‘806 Patent were ineligible for being submitted outside of the 30-day window stipulated in section 4(6) of the PM(NOC) Regulations. Merck replied with written representations and affidavit evidence.

The Minister later confirmed on November 6, 2020 that the patent lists relating to the ‘806 Patent were ineligible for inclusion on the Patent Register holding, among other elements, that the Time Limits and Other Periods Act (COVID-19) (the “Time Limits Act”) does not extend the deadline within which first persons may submit patent lists in accordance with s 4(6) of the PM(NOC) Regulations; and that the 30-day deadline in section 4(6) of the PM(NOC) Regulations is not discretionary.

ANALYSIS

Merck argued that the Minister’s refusal would deprive the patent holder of substantial protections available under the PM(NOC) Regulations. Additionally, Merck said it would suffer prejudice because a subsequent entrant would be able to file a drug submission after the expiry of the six-year “no file” period for KEYTRUDA®, on May 19, 2021.

The issues, in this case, were a) was the Minister’s determination reasonable that the Time Limits Act cannot be applied here and as a result cannot suspend the 30-day time period specified in section 4(6) of the PM(NOC) Regulations? And b) was the Minister’s determination reasonable that she had no discretion to extend the 30-day time period specified in section 4(6) of the PM(NOC) Regulations?

The FC determined that the Minister’s decision would be subject to review against the standard of reasonableness, meaning the FC would only intervene if “there are sufficiently serious shortcomings in the decision such that it cannot be said to exhibit the requisite degree of justification, intelligibility and transparency.”

With regard to the reasonableness of the Minister’s determination, that the Time Limits Act did not cause suspending of the 30-day time period specified in section 4(6) of the PM(NOC) Regulations, the FC found that the Time Limits Act applied in only three circumstances: limitation or prescription periods for commencing a proceeding before a court; time limits for doing something in a proceeding before a court; and time limits where a party makes an application for leave of a court, either to commence a court proceeding or to do something in relation to a court proceeding. Merck asserted that section 4(6) of the PM(NOC) Regulations functions as a “gateway” to the summary litigation provisions that begin at section 6(1), and therefore Merck argued that the 30-day period specified in section 4(6) of the PM(NOC) Regulations is a “limitation period within a limitation period.” The FC concluded that the listing of a patent on the Patent Register pursuant to section 4(6) of the PM(NOC) Regulations is too remote from the commencement of a court proceeding under section 6(1) to constitute a “limitation period within a limitation period” for the purpose of section 6(1) of the Time Limits Act.

With regard to the Minister’s determination that she had no discretion to extend the 30-day time period specified in section 4(6) of the PM(NOC) Regulations being reasonable, Merck relied on a previous FC decision to argue that the Minister may add a “late” patent list to the Patent Register. The FC was not convinced of this argument though, maintaining that it is well established that the timelines prescribed by the PM(NOC) Regulations are exact. The FC further added that the 2017 amendments to the PM(NOC) Regulations also did not confer any new discretionary powers to the Minister.

The FC concluded that the Minister’s decision was justified, intelligible and transparent, and therefore reasonable. No costs were awarded by agreement of the parties.

COMMENTARY

A patent will only issue in Canada following payment of the Final Fee. The Client Service Standards at CIPO for grant of a patent after payment of the Final Fee is stated as being within 12 weeks (Client Service Standards – Canadian Intellectual Property Office).

The Final Fee for the ‘806 application was paid on March 20, 2020. The ‘806 patent granted 53 days later (about 7½ weeks) well before the 12 weeks service standard. A brief review of recently issued patents in Canada indicates that the quick grant of the ‘806 patent was not an anomaly and that patents are regularly granting within 6 to 8 weeks of payment of the Final Fee.

A key takeaway from this case is that once the Final Fee is paid for applications that are eligible for listing on the Patent Register, the CIPO database should be monitored closely for grant of the patent. To help with that, CIPO now also lists “Forecast Issue Date” on the Administrative Status page for each patent application and further sends a notification by email that the patent has granted. Please note that this is also applicable when filing a divisional application after payment of the Final Fee.

For more information please contact:

Claire Palmer, Ph.D., Senior Patent Agent
T: 613.801.0450
E: cpalmer@mbm.com

Co-author: Osman Ismaili, Patent Agent & Lawyer

 

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.

Industrial Designs – Why Should You Protect Your Unique Designs?

Posted on by Debbie Malek

Industrial designs (“ID”) protect a product’s unique appearance such as shape, configuration, pattern and/or ornamental features. The protection can be obtained for the design of the entire finished article or just a part of it. Examples of industrial designs can be found everywhere, ranging from your cellphone’s overall shape and graphic user interface to the colour patterns of your clothes.

The exclusive right conferred by the Industrial Design Act does not extend to what the design is made of, how it is made, or how it works. These types of considerations are protectable through patents or trade secrets. However, too often, companies focus primarily on patent protection to the exclusion of other intellectual property rights. Simply put, industrial design protection should not be neglected where shape and configuration assist in a product’s marketability. ID protection can be used alone or in conjunction with other forms of intellectual property as a less expensive means to stop infringing activity.

HOW THE REGISTRATION SYSTEM WORKS IN CANADA

Canada employs a first-to-file system which means it is not necessarily who designed first that is entitled to an ID registration but rather it is a race of who files it first at the Canadian Intellectual Property Office (“CIPO”). To obtain an ID registration, it is necessary that the design be novel, which means that no identical or substantially similar design has ever been registered or disclosed. Therefore, if designer ‘1’ created a novel design before designer ‘2’ but designer ‘1’ did not file an application or publicly disclose the novel design (i.e., left the design prototype in their garage or computer) and designer ‘2’ independently created a substantially similar design and filed for the design within 12 months from designer ‘2’s’ public disclosure, then designer ‘2’ will be entitled to the industrial design registration. Notably, an applicant (i.e., designer ‘2’) is given a 12-month window (grace period) to file from its public disclosure or the public disclosure by a person who obtained knowledge of the ID directly or indirectly from the applicant (designer ‘2’).

Before filing, you should conduct a thorough search, preferably with professional assistance from an intellectual property lawyer, to ensure your design is novel and has not been previously registered or disclosed.

Applications are kept confidential until the earlier of either the registration date or 30 months after the application filing date or priority date. Therefore, the design disclosed in the application will become available to the public following the expiry of the confidentiality period. As such, if an applicant does not wish to disclose a design prior to a product launch, careful consideration should be given to the approximate time it typically takes from application to registration of an ID (12 to 18 months).

After registration, you only have to pay a one-time maintenance fee at the 5-year mark. The application process for an industrial design is much faster than that of a patent application. The exclusive right granted by the CIPO registration begins on the registration date and ends on the later of the end of 10 years after the registration date or the end of 15 years after the filing date. Therefore, an ID registration exclusivity is anywhere from 10 to 15 years.

CONVERTING AN INDUSTRIAL DESIGN INTO A “PERPETUAL” TRADEMARK RIGHT WHICH CAN BE USED TO ENFORCE COPYRIGHT

Through proactive and strategic planning, ID’s can be used as an effective tool to ultimately result in perpetual protection for a design.

Designs such as three-dimensional shapes can be registered as non-traditional trademarks under the Trademarks Act. However, in order to obtain a shape trademark registration, unlike a regular trademark, it is necessary to provide proof (evidence) of distinctiveness of the trademark at the date of filing of the shape trademark application. To overcome the hurdle of distinctiveness, a meaningful strategy is to first secure an industrial design registration, build up distinctiveness through the monopoly granted by the industrial design registration, and at some point, during the term of the ID registration, file an application for the shape trademark. Once registered, the shape trademark is valid for 10 years and can be renewed indefinitely every 10 years. In other words, a shape trademark can exist in perpetuity with use.

The Canadian Copyright Act permits the reverse engineering of an article if more than 50 articles are made. However, if the article (i.e., shape) is itself a trademark, then it is prohibited to reverse engineer the article without infringing copyright. Therefore, the ID can be used to support a distinctiveness claim for trademark rights and ultimately lead to enforcement through copyright.

INTERNATIONAL PROTECTION BY THE HAGUE SYSTEM

To avoid submitting individual applications in each country of interest, the Hague System for the International Registration of Industrial Designs provides an option to register an industrial design in multiple countries by filing a single international application (Hague application) with the International Bureau (IB) of World Intellectual Property Organization (WIPO).

The IB of WIPO verifies compliance with formal requirements only, without any examination for novelty. A Hague application that complies with the formal requirements is recorded in the International Register and published in the International Designs Bulletin, followed by a substantial examination by each country identified in your application under its domestic law.

In respect of Canada, the international registration is valid for the first 5 years from the date of the international registration and may be renewed twice, namely, at the 5-year mark and the 10-year mark.

SUMMARY

A valid ID registration provides the exclusive right to prevent others from making, selling or importing an article that embodies or is substantially similar to the registered ID.

Always try to think outside the box as part of your business strategy as it is important to identify all aspects of your IP assets. For example:

  • a unique design may be protected by an ID registration;
  • the new, inventive and useful functionality of the product may be covered by a patent;
  • the logo of the product may be registered as a trademark;
  • the advertising campaign video to promote your product may be protected by copyright.

In conclusion, you should always utilize a combination of IP assets to maximize your IP protection, depending on your budget and your new product development plan.

If you have any intellectual property questions, please feel free to reach out to MBM for a free consultation.

For more information please contact:
Scott Miller, Co-Managing Partner, Head of the Litigation Department
T: 613-801-1099
E: smiller@mbm.com

Grace Wang, Intellectual Property Lawyer
T: 613-801-1072
E: gwang@mbm.com

 

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.

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

Posted on by Debbie Malek

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 a 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.

For more information please contact:

Daniel Lanfranconi, Intellectual Property Lawyer
T: 613-801-1056
E: dlanfranconi@mbm.com

 

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.

What Are the Risks of Not Patenting Your Invention?

Posted on by Debbie Malek

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.

For more information, please contact:

T: 613-567-0762
E: patents@mbm.com

Author: David Fraser, Patent Agent

 

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.

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

Posted on by Debbie Malek

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

For more information please contact:

Grace Wang, Associate Lawyer
T: 613-801-1072
E: gwang@mbm.com

Co-Author: Osman Ismaili, Patent Associate

 

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.

Taste, Smell, Sound, Touch, and Sight – Appealing to All Five Senses with Non-Traditional Trademarks

Posted on by Debbie Malek

Words and logo designs tend to steal the show when it comes to what many typically associate with the term “trademark”. What is often underrepresented is that trademarks can be used to interact with consumers beyond their two-dimensional, visual components. In June of 2019, the Canadian Trademarks Act was amended and now includes a slew of non-traditional trademarks, such as three-dimensional shapes, colours in abstract, moving images, modes of packaging goods, smells, tastes, sounds, positions, textures, and holograms.

The expansion of the legal definition of a trademark in Canada, in conjunction with the potential perpetual term of protection, offers brand owners significant incentive to employ a multi-pronged approach in the protection of their products and services. Various unique elements of a product or unique features of consumer experience in the performance of a service may be protected as trademarks. By way of illustration, in practice, this can include the unusual shape of a bottle, the exclusive scent of a store, a catchy jingle, or the texture of a handbag. But like all good things, there is a catch. The Trademarks Act includes certain limitations which restrict the availability of non-traditional trademark protection.

Trademark protection cannot be extended to features which are dictated primarily by utilitarian function, in relation to the associated goods and services (s.12(2) of the Trademarks Act), nor can they unreasonably limit the development of any art or industry (s.18.1 Trademarks Act). For instance, it is unlikely that the taste of mint could be trademarked in association with gum, or a flowery scent trademarked in association with perfume, as these features are dictated by the functional aspect of the respective goods and would unreasonably limit the art and/or industry. On the contrary, the taste of mint in association with lipstick, or a flowery scent in association with stationary would likely not contravene the Trademarks Act. These provisions are also largely intended to remove the possibility of extending perpetual trademark protection to features which would otherwise be protected through a patent. In fact, the Lego® brick was famously the subject of this exact dispute before the Supreme Court of Canada.[1]

Moreover, at the examination stage, unlike in the case of a traditional trademark, the Canadian Trademarks Office will typically require evidence of distinctiveness of the applied-for non-traditional trademark. This means that the applicant would need to prove that the trademark has amassed sufficient reputation in Canada, to the point where the average Canadian consumer has been adequately educated as to its trademark status. This is often referred to as a “secondary meaning” since the evidence would need to demonstrate that the trademark’s overwhelming reputation causes consumers to dispense of its primary meaning. A classic example is the Coke® bottle. A bottle containing cola (primary meaning) is not specific to a single source, however the Coke® bottle is instantly identifiable, even when stripped of its label, because of the tremendous consumer recognition of that particular bottle shape belonging to Coca-Cola (secondary meaning). As such, it is advisable that a brand owner has several years of use of their non-traditional trademark and compile detailed evidence of the trademark’s reputation prior to formally applying for its registration with the Canadian Trademarks Office.

In creating marketing strategies, brand owners should consider the proprietary potential in thinking “outside the [traditional] box”. For example, in contemplating protecting a unique shape as a trademark, brand owners should consider taking advantage of the monopoly afforded by an industrial design in order to secure exclusivity and reputation in the shape, prior to filing for trademark protection. All things considered, creative branding strategists should venture beyond the conventional two-dimensional eye candy appeal of words and logos, and contemplate trademarks which can be perceived in three dimensions, felt, smelt, tasted or heard.

Despite the potential challenges with acquiring registrations for non-traditional trademarks, our team is accustomed to developing tailored non-traditional trademark strategies designed to properly position brand owners for success. If you are thinking of protecting a non-traditional branding element as a trademark, we would love to chat. MBM offers initial consultations at no charge.

For more information please contact:

Deborah Meltzer, Trademark Agent & Associate Lawyer
T: 613-801-1077
E: dmeltzer@mbm.com

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.

 

[1] Kirkbi AG v. Ritvik Holdings Inc. / Gestions Ritvik Inc., 2005 SCC 65

The Supreme Court of Canada May Hold Your Silence as Dishonesty in Contract Performance

Posted on by Debbie Malek

C.M. Callow Inc. v. Zollinger, 2020 SCC 45

This case is applicable to all types of contracts including those involving Intellectual Property. The duty of honest performance requires that parties must not lie or otherwise knowingly mislead each other about matters directly linked to the performance of a contract.

In a 5-3-1 split decision, the Supreme Court of Canada (the “SCC”) re-affirmed the duty of honest performance in a contract, formulated originally in Bhasin v. Hrynew, 2014 SCC 71. In this case, Callow did not deny the existence of the right of termination but argued for the wrongful manner in which Baycrest had exercised the contractual right to terminate the winter maintenance agreement with Callow.

BACKGROUND

In 2012, Callow entered into a two-year winter maintenance agreement and a separate one-year summer maintenance agreement with Baycrest. Baycrest was entitled to terminate the winter agreement unilaterally, for any reason, upon giving 10 days’ written notice.

In early 2013, Baycrest decided to terminate the winter agreement but chose not to inform Callow in a timely manner. Throughout the spring and summer of 2013, communications between Callow and Baycrest included discussions about renewing the winter agreement, in which Baycrest created a false impression that a renewal of the winter agreement was likely and that the current winter agreement would not be terminated. As a result of these communications, Callow did not bid on any other winter contract. Callow also offered extra services to Baycrest during the summer, which they hoped would be an incentive for Baycrest to renew the winter contract. Baycrest accepted the free services with silence.

In September 2013, Baycrest terminated the winter agreement by giving the required 10 days’ notice. At this point, it was too late for Callow to secure any alternative winter contract. Callow sued for breach of contract, alleging that Baycrest had acted in bad faith.

ANALYSIS

The trial-level judge found that statements and conduct by Baycrest actively deceived Callow from the time the termination decision was made to September 2013 and awarded damages to Callow in order to place it in the same position as if the breach had not occurred. The Ontario Court of Appeal (“ONCA”) reversed the trial judge’s decision and held that the judge had erred by improperly expanding the duty of honest performance beyond the terms of the winter maintenance agreement.

Callow appealed the ONCA’s decision to the SCC. The SCC looked at two critical issues when considering if Baycrest breached its duty of honest performance:

(1) did Baycrest’s conduct constitutes dishonesty; and

(2) was Baycrest’s dishonesty directly linked to the performance of the contract?

In the majority opinion, it was concluded that by knowingly misleading Callow into believing the winter maintenance agreement would not be terminated, Baycrest had breached its duty of honest performance on a matter directly linked to the performance of the contract, even if the 10-day notice requirement was satisfied, and irrespective of their motive for termination. When awarding damages, the court considered if Baycrest’s dishonesty had not deprived Callow of the opportunity to bid on other contracts, then Callow would have made an amount that was at least equal to the profit it lost under the winter maintenance agreement.

In the concurring opinion, three judges concluded that the majority’s reliance on the civilian doctrine of abuse of a right distorts the analysis in Bhasin v. Hrynew and ignores the distinction between honest performance and good faith in the exercise of contractual discretion.

The only dissenting judge concluded that Baycrest’s conduct may not be laudable, but it does not fall within the category of “active dishonesty” prohibited by the duty of honest performance. The dissenting judge found Baycrest had no obligation to speak when it became aware of Callow’s mistaken belief that the contract would not be terminated unless Baycrest had taken positive action that materially contributed to that belief. The justice further found that absent a duty to disclose, it is far from obvious when exactly one’s silence will knowingly mislead the other contracting party or at what point a permissible silence turns into a non‑permissible silence that may constitute a breach of contract.

COMMENTARY

There are a few key takeaways from this case:

First, your intention may be irrelevant. You may get sued for creating misapprehension or giving false statements, even if you do not intend the counterparty to rely on it. The counterparty may draw conclusions from your conduct as well. For example, when discussing terms of a potential renewal, they may reasonably infer that the contract is likely to be renewed. When you realize that the counterparty has a mistaken belief about the performance of the contract, and only if your conduct has caused that mistaken belief, you should immediately correct them.

Second, a key difference lies between “relevance to the contract” and “relevance to the performance of the contract”. If you fail to disclose matters relevant to the contract itself but irrelevant to the performance of the contract, this does not breach the duty of honest performance, unless there is a separate duty to disclose.

Third, whether or not a party has “knowingly misled” its counterparty is a highly fact-specific determination, and can include lies, half-truths, omissions and even silence. This merely exemplifies that dishonesty or misleading conduct is not confined to direct lies. Therefore, if you doubt whether the exercise of a contractual right or performance of contractual duty constitutes a breach of duty of honest performance, you are strongly advised to seek legal advice to reduce the risk of future litigation.

If you are dealing with Intellectual Property contracts or Intellectual Property contract disputes, please feel free to reach out to MBM for a free initial consultation.

For more information please contact:

Grace Wang, Associate Lawyer
T: 613-801-1072
E: gwang@mbm.com

Co-Author: Osman Ismaili, Patent Associate

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.

 

Software and Business Method Patents – How to Improve Your Chances?

Posted on by Debbie Malek

Some of the most valuable inventions are software implemented methods. Many software methods are business method patents designed to make business more efficient. These include Artificial Intelligence (AI) / machine learning applications and Financial Technology (Fintech) applications.

Software patents, historically, were not considered patentable. This is because mathematical algorithms (scientific principles and abstract theorems) are generally not patentable in Canada and computer programs were seen as simply an implementation of mathematical algorithms and formulas. As the patent office historically stated, if an invention did not have a physical existence or manifest a discernible physical effect or change, you could not patent it.

This changed in 2010 with the granting of the Amazon 1-click patent. Subsequently, the Canadian Intellectual Property Office (CIPO) updated their Examination practice guidance to say that given a purposive claim construction, if a computer (to execute the software) was found to be an essential element, the combination of the computer and the software, being a tangible device, could be patented.

Purposive claim construction was defined by the Supreme Court of Canada in 2000 and a two-part test was developed to determine if a claim element was essential or non-essential. A claim element is essential if:

  • Modifying or substituting the claim element would change the way the invention works
  • The inventor intended that the claim element be essential

If a claim element is essential, the patent Examiner must consider it. If a claim element is non-essential, a patent Examiner may ignore it.

Unfortunately, the guidance from CIPO only cited the first part of the test and omitted the second. This meant that many computer-implemented claims were rejected because the Examiner would determine that the computer was non-essential, ignore it, and be left with only the computer algorithm. The remaining algorithm would then be found to be an abstract theorem and be rejected.

This changed at the end of 2020 when the Federal Court ruled that CIPO’s guidance goes against the Supreme Court’s two-part test. Recently, CIPO has issued new guidance so that the full two-part test for determining essential and non-essential claim elements will be used.

This is great news for inventors and companies innovating in the field of software, financial, and business methods. No longer can the patent office so easily ignore the physical aspects of your inventions and reject your patents.

To ensure that your software inventions can be patented there are several steps you can take:

1. Make sure that there are physical elements in your claims that are essential elements. There must be an essential physical aspect of your invention. Your patent professionals can help you with this.

2. Your invention should provide a technical solution to a technical problem. It is best that your invention produces a physical effect or change.

3. If your invention improves the operation or efficiency of the computer itself, this should be highlighted.

4. Describe the physical environment in which the software operates. Don’t just describe the mathematical algorithm; include the computers, the network, servers, and the external world in which it operates.

5. If your system obtains data from external sensors or uses the results to control something in the real world, include these details.

If you have a software invention that you are considering patenting, please feel free to reach out to MBM for a free consultation.

T: 613-567-0762

E: patents@mbm.com

Author: David Fraser, Patent Agent

 

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.

Effective Consent Made Easier Under the NOC Regulations

Posted on by Debbie Malek

Case introduction:

The Patented Medicines (Notice of Compliance) Regulations (“NOC Regulations”) permit the Minister of Health (“Minister”) to issue a notice of compliance (“NOC”) to a generic company where a patentee’s effective consent is obtained. Effective consent under the NOC Regulations requires the patentee’s consent for the making, constructing, using or selling of a drug in Canada (“Activities”). This was at issue in Fresenius Kabi Canada Ltd. v. Canada (Health), 2020 FC 1013 in which the Federal Court of Canada (“Court”) determined that effective consent under the NOC Regulations requires the patentee’s consent for only one of the Activities and not all Activities.

Case background:

Fresenius Kabi Canada Ltd. (“the Applicant”) brought an application for judicial review of the Minister’s refusal to issue a NOC. The Applicant had sought an NOC for its drug adalimumab, IDACIO, which is a biosimilar of the drug, HUMIRA, owned by AbbVie Biotechnology Ltd. (“AbbVie”). AbbVie also owns a number of patents (“Patents”) in respect of HUMIRA. In seeking an NOC, the Applicant had relied on AbbVie’s consent to comply with the NOC Regulations. AbbVie had provided immediate consent to the making and constructing of IDACIO, and a delayed consent, until after February 15, 2021, to the using and selling of IDACIO. The Minister refused to issue a NOC because AbbVie’s consent was only effective after February 15, 2021, when consent to all Activities had been provided.

The Court decision:

The Court found the Minister’s refusal unreasonable partly because the Minister erred in interpreting the word “or” as conjunctive “and” in the NOC Regulations, which recites “consent to the making, constructing, using or selling of the drug in Canada.” The Court reasoned that “the word ‘or’ is presumed to be disjunctive, but inclusive, such that, as in this case, a patent owner could consent to each or a combination of the activities listed – making, constructing, using or selling – to meet the [consent] requirements” of the NOC Regulations. The Court found AbbVie’s consent as unequivocal to all Activities, despite the temporal nature of the consent. The Court overturned the Minister’s decision and ordered the Minister to issue the NOC.

The Court based its reading of the word “or” on the NOC Regulations’ dual purpose, “to balance effective patent enforcement over new and innovative drugs with the timely market entry of their lower-priced generic competitors.” The Court noted that an NOC is essential for the timely launch of a biosimilar product, which is critical for biosimilars to remain competitive and establish their market position.

Key takeaway:

The Court’s interpretation of the word “or”, as disjunctive, but inclusive, clarifies that requirements of consent, under the NOC Regulations, are met so long as the patent owner consents to at least one of the Activities.

Please feel free to reach out to MBM with regards to any Intellectual Property matters in Canada.

For more information please contact:

Jamal Hakimi, Patent Associate
T: 613-801-0509
E: jhakimi@mbm.com

 

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.
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