Canada’s Federal Court continues to stir up debate with respect to whether applicants owe a “duty of candour” during prosecution of patent applications.

As reported in Life Sciences & Law Current Issues 2010/11, in the 2009 decision of Lundbeck Canada Inc. v. Ratiopharm Inc.1 (Lundbeck), Justice Mactavish of the Federal Court addressed section 73(1)(a) of the Patent Act in her analysis of whether this provision gives rise to a duty of candour during prosecution of patent applications. This section of Canada’s Patent Act states, inter alia, that an application for a patent shall be deemed to be abandoned if the applicant does not reply in good faith to any requisition made by an examiner within the prescribed time period.2

The Court cited, with approval, earlier comments of Justice Hughes in G.D. Searle & Co. v. Novopharm Ltd.3 (Searle), wherein the Court concluded that communications with an examiner must be made in good faith. The Court in Searle also held that it was “not harsh or unreasonable, if after the patent issues, and disclosure is found to lack good faith, that the Court deems the application and thus the patent, to have been abandoned.”4 The Court drew an analogy between an application for a patent and an ex parte proceeding.

In Lundbeck, Justice Mactavish expanded on this point by noting that when an applicant presents a case to a court for ex parte relief, the applicant must state his or her own case fairly, and must inform the court of any points of fact or law known to it that favour the other side. While it is unclear whether this comparison was intended to raise the standard of disclosure in a patent application to that of an ex parte proceeding, the Court decidedly noted that section 73(1)(a) explicitly imposes a duty to reply in good faith to a requisition, and at this point, there is a duty of candour on the part of applicants in the prosecution of a patent application.5

In 2010, the Federal Court re-visited this issue in Weatherford Canada Ltd. v. Corlac Inc.6 (Weatherford). In Weatherford, the Federal Court appears to make another attempt to clarify whether a “duty of candour” can be read-in from the “good faith” requirement in section 73(1)(a) of the Patent Act. The Court dismissed an allegation that the patent at issue was invalid and appears to regress from some of the assertions in Searle and Lundbeck. In Weatherford, Justice Phelan noted:

[T]here is no right in a third party to invalidate a patent for fraud or lack of good faith during the prosecution of the application. It would be stretching the meaning of s. 73 to read in a right to strike down a patent after it is issued on the basis of deemed abandonment during its prosecution unless all the constituent elements of s. 73 are met.  

Section 73 read as a whole is not directed primarily at the validity of a patent once issued. The provision is directed at controlling the prosecution of the patent process.7  

The Court continued to state that the duty to act in good faith with the Patent Offi ce must be read in the context of other provisions such as section 28.3 (obviousness) and section 53(1) (material misstatement), and unless an examiner issued a requisition, a matter that did not fall within either of these provisions would not give rise to any duty under section 73.8

Weatherford still leaves questions unanswered, including whether the duty of good faith requires a standard of disclosure akin to an ex parte proceeding. The Court in Weatherford also referred to case law that pre-dated the enactment of section 73(1)(a) and noted that the Federal Court of Appeal had rejected the notion that a patent could be held to be invalid for an alleged breach of a duty of candour. The Searle and Lundbeck decisions created some uncertainty as to the nature and extent of any duty of candour with respect to the prosecution of patent applications.

The Weatherford decision is now on appeal, with an intervention by the Intellectual Property Institute of Canada with respect to the construction of section 73 and to whether a duty of candour exists. Unlike the U.S., which has its general duty of candor rooted in its Patent Rules, Canada has not enshrined a general duty of candour in its Patent Act or Rules. An analysis by the Court of Appeal will therefore be welcome to provide guidance to patent applicants and the patent profession in view of these three Federal Court decisions.