In late July, the Canadian Federal Court of Appeal released its decision in Corlac Inc. et al. v. Weatherford Canada Limited et al.[1] in which the Court clarified the grounds upon which an issued patent can be invalidated.  In rejecting the adoption of a U.S. style "inequitable conduct" ground of invalidity, the Federal Court has given Canadian patentees a higher degree of certainty when considering issues of patent invalidity.

Background

In the 1980s, Canadian oil producers had a problem with dirt, salt and sand contamination of oil in drilling operations.  Grenke filed an application for a patent with respect to a device that sought to alleviate these concerns, naming himself and Torfs as co-inventors, which eventually issued as the '937 Patent. When Corlac Equipment Ltd. ("Corlac") began to manufacture and sell a similar device, patent sublicensee Weatherford Canada Limited brought an infringement action against Corlac.  At trial, the Court found that the patent was valid and infringed by Corlac.

Upon appeal, Corlac argued that technical non-compliance with section 73 of the Canadian Patent Act,[2] was sufficient for the abandonment of a patent both during prosecution and post-issuance. Under Section 73(1)(a), an applicant is under a statutory obligation to act in good faith in responding to all requisitions made by the Examiner and the Commissioner of Patents during prosecution of a patent application.  Corlac took the position that the failure of the applicant to meet the duty of good faith[3] and the failure to rectify the defect within the defined period, should have resulted in the deemed abandonment of the patent application and the invalidation of any subsequent patent.

The lower court concluded that section 73 as a whole is directed at regulating the patent application process and not the validity of issued patents. The crux of the issue for the Court of Appeal was whether paragraph 73(1)(a) could be utilized to invalidate an issued patent.

Court of Appeal Decision

According to the Federal Court of Appeal, the grounds for attacking the validity of a patent are delineated in the Act, such as utility, novelty, obviousness, and sufficiency of disclosure. In deciding that Corlac's position must fail, the Court of Appeal ruled that "…the concept of abandonment in paragraph 73(1)(a) operates during the prosecution of the application for a patent. Its operation is extinguished once the patent issues."(emphasis added)

Relatively recent decisions of the Federal Court suggested that an issued Canadian patent could be invalidated based on incorrect statements made during patent prosecution.  To the extent that the Federal Court decisions in G.D. Searle & Co. v. Novopharm Ltd.[4] and Lundbeck Canada Inc. v. Ratiopharm Inc.[5] could be interpreted as supporting Corlac's position, the Court of Appeal held that they should not be followed. It is for the Commissioner to determine whether an applicant's response to a requisition from an Examiner is made in good faith, not for the courts.  In citing the recent U.S. decision in Therasense, Inc. v. Becton, Dickinson and Company[6], in which the inequitable conduct doctrine was described as an "atomic bomb" of patent law, the Court of Appeal noted that U.S. courts "… found it necessary to tighten the standard 'in order to redirect a doctrine that has been overused to the detriment of the public'". The decision in Corlac, barring an appeal to the Supreme Court of Canada, will hopefully put to rest concerns that Canadian patents could be attacked on this basis.