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Applying for a patent

Patentability

What are the criteria for patentability in your jurisdiction?

An invention must be novel, useful and unobvious. The subject matter must be ‘statutory’ to be patent eligible as well. 

What are the limits on patentability?

In order to be considered statutory subject matter in Canada, the subject matter must be an art, process, machine, manufacture or composition of matter. Thus, some subject matter is not patent eligible. No scientific principles or abstract theorems may be patented, such as mathematical formulas, discoveries of laws of nature or purely mental operations. Other excluded subject matter in Canada includes methods of medical treatment or surgery and higher life forms.

To what extent can inventions covering software be patented?

Software, per se, is a literary work and is excluded subject matter. However, computer-implemented inventions incorporating software that meet the statutory requirements of an invention are patentable. Such inventions are typically protected in the form of a method (eg, art, process or method of manufacture), a machine (eg, a computing device or system) and/or a manufacture (eg, a computer program product). Purposive construction is employed to determine the essential elements of the invention and whether or not the invention is statutory. For example, a method that would otherwise be excluded as non-statutory does not become statutory simply by claiming that all or part of the method is performed by a computer. The method itself, as a whole, must be a solution to a practical problem and must lie within a field of technology. A similar test is applied to a machine and a manufacture.

To what extent can inventions covering business methods be patented?

Business methods may be statutory subject matter in Canada and are not, per se, excluded. The claimed subject matter should be examined as any other, using purposive construction, to determine what was invented. Canada’s Federal Court of Appeal stated in its Amazon.com decision (Canada (Attorney General) v Amazon.com Inc (2011 FCA 328)) that the Canadian Intellectual Property Office (CIPO) should be “open to the possibility that a novel business method may be an essential element of a valid patent claim” (Amazon.com at paragraph 63).

For a business method to be found patentable, it must comprise a practical application. A business method is more likely to be found patentable when it is "not the whole invention but only one of a number of essential elements in a novel combination" (Amazon.com at paragraph 63).

To what extent can inventions relating to stem cells be patented?

In Canadian patent law, higher life forms are not patentable. Therefore, any stem cells that are totipotent (ie, have the potential to develop into a complete higher life form) are not patentable. However, stem cells which have a more limited range of potential, such as pluripotent stem cells, are considered patentable.

Are there restrictions on any other kinds of invention?

Higher life forms, methods of medical treatment, inventions requiring the exercise of professional skill, matters of aesthetics or fine art and disembodied mental processes lacking a method of practical application are not patentable.   

Grace period

Does your jurisdiction have a grace period? If so, how does it work?

There is a one-year grace period for disclosures relating to a claimed invention. The claimed subject matter must not have been disclosed more than one year before the application filing date by the applicant or someone who obtained knowledge, directly or indirectly, from the applicant in such a manner that the subject matter became available to the public. Current law provides that this one-year grace period is measured relative to the date of filing in Canada, not the priority date. New law, expected in force in late 2019, will extend the grace period to be measured from the priority date.

With respect to Patent Cooperation Treaty (PCT) applications, the Canadian filing date is deemed to be the PCT international filing date.

Oppositions

What types of patent opposition procedure are available in your jurisdiction?

There is no formal opposition procedure available in Canada.

Apart from oppositions, are there any other ways to challenge a patent outside the courts?

Yes. In respect of a granted patent, a third party may request re-examination of the patent. A re-examination proceeding is limited to issues arising from any prior art supplied by the requesting party. Upon receipt of the request, CIPO will form a re-examination board of senior personnel to determine if a substantial new question as to patentability is raised by the request. If this is determined to be the case, the patentee will have the opportunity to reply and to dispute the submissions or propose amendments to its claims. Re-examination is intended to be a relatively summary and inexpensive alternative to an impeachment process by litigation discussed further herein. A requesting third party does not further participate in the re-examination process.

Prior to patent grant, any person may file prior art and any person may file a protest. The filing of prior art is restricted to patents, applications or other printed publications and must be accompanied by an explanation as to why the prior art is pertinent to patentability. A protest submission is not restricted to prior art printed publications and may include an affidavit (or statutory declaration) regarding alleged facts. However, CIPO cautions that “Affidavits containing allegations which are not supported by dated documentation will usually be disregarded.”

Following receipt of the filing of prior art or the protest and during examination, information in the protest or filing of prior art may be taken into account and used during prosecution if found to be pertinent, for example in an examination report. The third party takes no further part in the process but may file a further submission.

How can patent office decisions be appealed in your jurisdiction?

Applicants can appeal final decisions of CIPO to the Patent Appeal Board, and subsequently, to the Federal Court of Canada.

Timescale and costs

How long should an applicant expect to wait before being granted a patent and what level of cost should it budget for?

Traditionally, after requesting examination, it has taken approximately two to three years for examination to commence, but in recent years CIPO has been processing applications more quickly, with the first office action often within one year of the request for examination. There are also options to accelerate the process by using requests for advance examination or the Patent Prosecution Highway route.

The applicant is provided with six months to respond to official actions, and there can be one or more such actions issued on a typical file. An applicant that seeks its patent expeditiously and responds before the deadline to each patent office communication may often obtain the issued patent within one to two years of requesting examination.

Following the request for examination, costs for prosecution to issuance vary widely depending on factors such as the field of technology, number of office actions issued, whether the applicant is a small entity and whether reinstatement procedures are used. Yearly maintenance fees are also payable, which can accrue during prosecution depending on how long the application is pending. It is recommended to budget C$3,000 to C$7,000 for prosecution for a typical case, but this budget should be checked periodically with the responsible agent so that it can be adjusted depending on the progress of prosecution.

Enforcement through the courts

Strategy

What are the most effective ways for a patent owner to enforce its rights in your jurisdiction?

Court proceedings before the Federal Court are the most effective and widely used avenue for enforcing patent rights in Canada. Almost all patent cases in Canada are brought before the Federal Court, as its orders are binding across Canada. Provincial courts also have concurrent jurisdiction over most patent cases, but the scope of any orders issued will be territorially limited to the province at issue.

What scope is there for forum selection?

For cases involving infringement, the claimant may choose to bring an action in either a provincial court of the province in which the alleged infringement occurred, or the Federal Court. The Federal Court is usually the preferred venue due to the nationwide scope of its orders, and because presiding judges are often more experienced in IP matters. Certain proceedings regarding judicial review of the Canadian Intellectual Property Office’s (CIPO’s) decisions or involving amendment or invalidation of a patent must be brought in the Federal Court. The Federal Court sits in all provinces and a trial venue may be determined following submissions of the parties.

Pre-trial

What are the stages in the litigation process leading up to a full trial?

Patent litigation commences with a statement of claim, and then the exchange of further pleadings through which the parties define the disputed issues for determination. This is followed by documentary discovery in which the parties produce all documents in their possession, power or control relating to any disputed issues. 

Oral examinations for discovery occur next. In Canada, this process is significantly different than in the United States, as each party produces only a single corporate representative for examination rather than multiple deponents. If the corporate representative is asked a relevant question on examination that is not within the scope of personal knowledge, they are required to make further inquiries of knowledgeable persons within the company. 

In patent cases, expert witnesses are typically employed by the parties to provide the court at trial with specialised knowledge on the meaning of disputed terms in the claims, and to provide assessments of damages and profits. Expert reports must be filed at the time of the pre-trial conference, typically several months after discoveries are concluded. Experts are not deposed in Canada prior to trial.

The final stage is trial of the action. In a typical case, the trial will be concluded three to four years from commencement of the action. 

For most pharmaceutical patent cases, there are accelerated scheduling requirements, as the applicable regulatory regime in Canada targets the resolution of patent disputes within 24 months of commencement.

How easy is it for defendants to delay proceedings and how can plaintiffs prevent them from doing so?

Defendants are limited in their ability to delay proceedings in the Federal Court if the plaintiff is diligent about bringing instances of unjustified delay to the court’s attention. Almost all patent-related disputes enter case management, through which a judicial official of the Federal Court is assigned to the case to resolve motions and other disputes and to move the case forward.

How might a party challenge the validity of a patent through the courts in anticipation of a potential suit for infringement being issued against it?

A formal court action can be commenced to impeach the patent. This route is more frequently used than re-examination before CIPO. A third party need not wait until it is approached by a patent owner regarding to license or an allegation of infringement before commencing an impeachment action. In an impeachment proceeding before the court, the third party can raise any matter of invalidity against the patent. Commonly raised invalidity allegations are anticipation, obviousness, insufficiency, inutility and material misrepresentations before CIPO prior to patent grant.     

At trial

What level of expertise can a patent owner expect from the courts?

The Federal Court has a high level of expertise in respect of the substantial and procedural aspects of patent litigation.

Are cases decided by one judge, a panel of judges or a jury?

Patent cases are decided by one judge without a jury.

If jury trials do exist, what is the process for deciding whether a case should be put to a jury?

 Jury trials are not available for patent cases.

What role can and do expert witnesses play in proceedings?

The Federal Court will generally rely on experts to provide opinion evidence on technical matters outside the experience and knowledge of the court. The court has full discretion in terms of which, if any, expert’s evidence it finds relevant and helpful in terms of the technical interpretation of the patent claims, how the invention works, the state of the prior art and whether there is infringement.

 

Does your jurisdiction apply a doctrine of equivalents and, if so, how?

The courts’ approach to infringement incorporates elements comparable to the doctrine of equivalents. The court, when construing the claims of a patent, will determine whether the elements of a claim are essential or non-essential to the invention claimed. If an allegedly infringing device or process differs only in respect of a non-essential element, the court will still find infringement. However, if an essential element is missing or varied from the defendant’s device or process, there will be no infringement.

Is it possible to obtain preliminary injunctions? If so, under what circumstances?

 It is possible, but preliminary injunctions are rarely granted in patent cases. An applicant must establish three elements: 

  • a serious question to be tried;
  • irreparable harm to the patentee if the injunction is not granted; and
  • that the balance of convenience favours a grant. 

Irreparable harm is usually the requirement that is difficult to establish, as most infringements can be adequately compensated by a monetary award following a full hearing on the evidence.

How are issues around infringement and validity treated in your jurisdiction?

Issues around infringement and validity are heard by the same court in any particular matter. These issues are determined at trial by the judge, who also determines issues of claim construction in the same proceeding. The same construction will apply to both infringement and validity. There are no Markman-type hearings in Canada to consider construction separately from infringement and validity.

Will courts consider decisions in cases involving similar issues from other jurisdictions?

The Federal Court will often consult decisions from other jurisdictions, although they are not binding. UK case law may be particularly persuasive to a Canadian court if the underlying statutory provisions on the point in dispute are similar.   

Damages and remedies

Can the successful party obtain costs from the losing party?

Yes. In a typical case the successful party is awarded its legal costs, which are determined in accordance with a tariff set by the Federal Court. While the successful party will not usually recover all amounts spent, the recovery is generally substantial, with close to 100% of reasonable disbursements and 25% to 50% of amounts spent on legal counsel. 

If the court finds that there was inequitable conduct by one or both parties, or positions taken that unnecessarily increased complexity and costs, the court may increase or decrease the cost awards.  The court has significant discretion in setting costs. 

What are the typical remedies granted to a successful plaintiff?

In Canada, unlike in the United States, a successful patentee may choose between damages or an account of profits. Damages are designed to compensate a patentee for losses incurred due to infringement, while an account of profits aims to disgorge the profits wrongfully earned from infringement. Profits will usually yield a higher award, so are chosen much of the time. In some cases, a patentee who is found by the court to have engaged in inequitable conduct may be found disentitled to choose profits. However, such a patentee will still be entitled to its damages.

As well as a monetary award, a successful patentee will typically obtain a permanent injunction to prevent continued infringement by the defendant.

How are damages awards calculated? Are punitive damages available?

Damages for infringement are calculated by determining what the patentee’s losses were as a result of the infringement. Financial experts typically provide a report to the court to assist in the calculation. A post-trial reference (after finding liability) is often conducted to review these details.

The patentee may measure its damages as its lost profits on the amount of patented product it would have sold if not for the defendant’s infringement, as well as possibly other damages due to market disruption. Alternatively, the patentee may measure its damages by using a reasonable royalty approach on its lost sales.

Punitive damages are available in Canadian patent cases and may be granted where the defendant’s conduct was particularly egregious. A high standard for the level of objectionable conduct is used and ordinary competitive activities will not meet the standard. As well, compared to other jurisdictions such as the United States, punitive damages awards are modest in Canada. They are calculated on the basis that some additional deterrence may be needed to prevent parties from engaging in immoral or otherwise egregious behaviour. However, if the award of general damages is substantial enough to constitute deterrence, additional punitive measures may not be awarded, even if the court found the losing party’s behaviour objectionable.

How common is it for courts to grant permanent injunctions to successful plaintiffs and under what circumstances will they do this?

Permanent injunctions are almost always granted when the patent has been found valid and infringed. Since it is a form of equitable relief, courts do have discretion to withhold this remedy but this is a rare circumstance.

Timescale and costs

How long does it take to obtain a decision at first instance and is it possible to expedite this process?

On average, it takes three to four years to proceed to trial for an action not involving a pharmaceutical patent. It is possible to expedite the process by using the case management procedures of the Federal Court during conduct of the proceeding.   

For pharmaceutical patent cases involving a patentee and a generic company challenging the patent, these proceed under a different regime. The court sets a target for final determination of the issues within 24 months of commencement, in accordance with an accelerated schedule.

How much should a litigant plan to pay to take a case through to a first-instance decision?

This varies greatly depending on complexity of the issues, the number of interlocutory motions brought and the length of trial. For a patent case on a relatively simple technology going to trial in the typical three to four-year timeframe, it is recommended to budget C$750,000 to C$1.25 million, with the majority of expenses being incurred in the last year of the case. However, approximately 90% of cases settle before this stage.

Appeal

Under what circumstances will the losing party in a first-instance case be granted the right to appeal? How long does an appeal typically take?

A losing party has the right to appeal to the Federal Court of Canada. Appeals typically take nine months to a year to be heard.

Options away from court

Are there other dispute resolution options open to parties that believe their patents to be infringed outside the courts?

Yes. The parties may elect to proceed with mediation or arbitration, with or without starting a court proceeding. The Federal Court also has procedures for assisting the parties to resolve cases without trial.