Earlier this year, the Federal Court of Appeal had the opportunity to revisit the law of contributory infringement in the case of MacLennan v. Produits Gilbert Inc.
Contributory infringement, also known as infringement by inducement, occurs when the defendant is not directly infringing a patent, but is knowingly encouraging others to do so. Under Canadian law, a plaintiff claiming contributory infringement must prove three elements: that there is direct infringement by another party using a component supplied by the defendant; that the defendant knew that infringement is taking place; and that the defendant encouraged the infringing conduct.
The patented invention was used in the logging industry. The patent in question was a combination patent that described how three different parts of a feller head (the sharp end of a saw used in logging) worked together. The three parts of the feller head are the disc, the teeth holder, and the teeth. Of these, the disk is the most expensive component, followed by the holder, followed by the teeth. When the saw is used, it is used as close to the base of a tree as possible, and the saw will often strike rocks or other objects that can damage it. The plaintiffs' patent described a method for connecting the three components so that when the saw does strike a rock, first the teeth, and then the teeth holder will break away, leaving the disc undamaged. In this way, the less valuable components are sacrificed to save the more valuable ones. The teeth are essentially disposable: their loss or damage is expected, and replacements are routinely kept on hand.
The defendant, Produits Gilbert Inc. (Gilbert), was in the business of selling replacement saw teeth. These teeth were made to fit into the plaintiffs' teeth holder, and would also break away to avoid damage to the disc. The plaintiffs did not claim that the individual teeth designs were patented, only their use in combination with the teeth holder. Therefore, on the facts of this case, if any direct infringement was occurring, it was when the loggers themselves combined the defendant's teeth with the plaintiff's teeth holder.
The Court had to decide whether the three elements of infringement by inducement were present in this case. At trial, the judge ruled that there was no direct infringement because when a patented object is purchased, the buyer is entitled to repair the effects of ordinary wear and tear. The trial judge had found that replacing broken teeth was a repair, and therefore no infringement was taking place.
The Court of Appeal disagreed, finding that the essence of the protected invention was the combination of the teeth with the teeth holder, and that combination was recreated every time the teeth were put in place. The loss and replacement of teeth during the operation of the saw was not wear and tear; it was what the patented combination was designed to do. When the loggers replaced the teeth they were remaking the combination, and when they used the defendant's teeth, they were infringing the plaintiff's patent.
The Federal Court of Appeal affirmed the more onerous test for contributory infringement under Canadian law. In Canada (unlike the United States and Great Britain), for contributory infringement to be found (assuming the direct infringement has been established using a component supplied by the alleged contributory infringer), two further elements are necessary. First, the alleged contributory infringer must know that its contribution will be used to infringe. Second, the alleged contributory infringer must encourage the infringement.
The loggers' infringement would only be Gilbert's responsibility if Gilbert had knowingly encouraged it. Since Gilbert's teeth were only suitable for use in the plaintiffs' teeth holder, there was no question that Gilbert knew that their product would be used to infringe. In considering the issue of encouragement, the Court looked to Gilbert's marketing material, and pointed to price lists that named the exact models of the plaintiffs' teeth that the Gilbert teeth were designed to replace. The Court found that this amounted to telling the loggers how to use the Gilbert teeth to infringe the plaintiffs' patent. Gilbert believed it was necessary to indicate the intended use of the teeth in order to sell them. When Gilbert informed its customers that its teeth were intended to replace the plaintiffs' teeth in making the patented combination, it encouraged them to infringe the patent.