Recently, in Limelight Networks Inc v Akamai Technologies Inc et al (“Akamai”), 134 S Ct 2111 (2014), the U.S. Supreme Court ruled that one cannot be liable for inducing infringement of a U.S. patent when no one has directly infringed that U.S. patent. “Inducing infringement” and other forms of indirect patent infringement are of interest to patentees in situations such as that in Akamai, where multiple parties may together perform the subject matter of a single claim. The U.S. Supreme Court decision in Akamai offers an interesting opportunity to compare Canada’s laws on indirect infringement to those of its neighbour.
The United States Patent Act provides that infringement occurs when an entity makes, uses, offers to sell, sells, or imports any patented invention within the United States during the term of the patent. “Direct” infringement refers to a single party that performs all the claimed elements of a patented invention. The U.S. statute also recognizes two types of “indirect” infringement: inducing infringement (35 U.S.C. § 271(b)) and contributory infringement (35 U.S.C. § 271(c)). Inducing infringement is defined in the case law as encouraging, aiding, or otherwise causing another entity to infringe a patent, whereas contributory infringement is defined in the Patent Act as the sale, offer for sale, or importation of “a component of a patented machine, manufacture, combination or composition, or a material or apparatus for use in practicing a patented process, constituting a material part of the invention, knowing the same to be especially made or especially adapted for use in an infringement of such patent, and not … suitable for substantial noninfringing use”.
Unlike in the United States and some other jurisdictions, the concepts of “infringement”, “contributory infringement” and “inducing infringement” are not explicitly referred to in the Canadian Patent Act. Rather, infringement in Canada, whether direct or indirect, is understood to mean doing anything within the exclusive rights of the patentee as defined in section 42 of the Patent Act, which provides that a patentee has the exclusive right, privilege and liberty of making, constructing, and using the invention in Canada and selling it to others to be used.
Contributory infringement in Canada
A fairly recent consideration of whether there is a cause of action for contributory infringement under Canadian law stemmed from a comment by the Supreme Court of Canada, in Monsanto Canada Inc v Schmeiser (“Monsanto”), 2004 SCC 34. In the context of a discussion of “using” the invention under section 42, the Supreme Court of Canada stated in Monsanto that the question is: “did the defendant’s activity deprive the [patentee] in whole or in part, directly or indirectly, of full enjoyment of the monopoly conferred by law”.
In Nycomed Canada Inc et al v Teva Canada Limited (“Nycomed”), 2011 FC 1441, affd 2012 FCA 195, Justice Simpson of the Federal Court Trial Division discussed the interplay between the above-quoted portions of Monsanto, indirect infringement and the test for inducing infringement. The plaintiff argued that the approach to infringement set out by the Supreme Court in Monsanto left open the possibility of an action for contributory infringement. Justice Simpson held that because the Court in Monsanto never referred to contributory infringement and because the Court’s language could be interpreted in a manner consistent with the classic test for inducing infringement, Monsanto did not support the existence of a cause of action for contributory infringement or indicate an intention to depart from the traditional test for inducing infringement.
Thus, Nycomed suggests that there is no action for contributory patent infringement in Canada, and that the test to be met to establish indirect infringement in Canada is that of inducing infringement.
Inducing infringement in Canada
In Corlac Inc et al v Weatherford Canada Ltd et al (“Weatherford”), 2011 FCA 228, the Federal Court of Appeal considered the scope of inducing infringement in Canada, re-affirming that the test for inducing infringement has three elements:
- The act of infringement must be completed by the direct infringer.
- The completion of the acts of infringement must be influenced by the alleged inducer to the point that without the influence, direct infringement would not take place.
- The influence must be knowingly exercised by the inducer.
The Court of Appeal held that the test is “strict” and that the trial judge, Justice Phelan, had not strictly applied the first stage of the test for inducing infringement. The matter of inducement was returned to Justice Phelan for re-determination in accordance with the test.
Weatherford concerned allegations of patent infringement and inducing patent infringement of a down-hole oil pump and a patented method of restraining oil leakage in an oil pump using the plaintiff’s “stuffing box” apparatus. On remand (2012 FC 76), Justice Phelan reviewed the evidence of use, including photographs of the end users’ drive units with stuffing boxes attached, that the stuffing box components were important for the end users’ businesses, that there was no other method for using the apparatus and that the defendant provided instruction and maintenance manuals detailing the infringing methods to the end users. Justice Phelan concluded that it was more likely than not that the customers used the product in an infringing manner and found the defendant liable for inducing infringement on that basis.
Another decision of Canada’s Federal Court of Appeal similarly emphasizes the importance and necessity of the first stage of the test for inducing infringement. MacLennan v Produits Gilbert Inc, 2008 FCA 35, concerned a patent for a saw tooth and tooth holder combination connected to a circular saw disc, the combination being designed to shear away from the saw disc upon contact with an obstruction. The defendant, Produits Gilbert, was a manufacturer of saw teeth that were similar to those of the plaintiff. The defendant sold the saw teeth to end users and also provided them with a price list identifying, by part number, the saw teeth of the plaintiff that corresponded to the defendant’s saw teeth and were intended to be replaced by the defendant’s saw teeth. The plaintiff alleged that the end users in turn combined the defendant’s saw teeth with the plaintiff’s tooth holder to make the patented combination.
The Federal Court of Appeal, in its analysis of the first factor for inducement, emphasized the defendant’s provision of the parts list and the fact that the defendant’s saw teeth had no other purpose than for use in the plaintiff’s device. The Court found that there was enough evidence to conclude that the patent had been infringed and that the defendant was liable for inducing infringement.
The recent decision in Akamai emphasizes that direct infringement is essential to any finding of inducing infringement in the United States. The Canadian cases similarly emphasize the essentiality of direct infringement to any finding of inducing infringement of a Canadian patent. The Canadian authorities also indicate that, although the test for inducing patent infringement is “strict”, the nature of the evidence required to make out direct infringement varies from case to case and is highly dependant on the circumstances of the particular case.