Case: Corlac Inc. et al v Weatherford Canada Ltd. et al.

Nature of case: Appeal from infringement and invalidity action

Successful party: Weatherford Canada Ltd et al (on most issues)

Date of decision: July 18, 2011

Summary

On July 18, 2011, the Federal Court of Appeal (“Court of Appeal”) dismissed an appeal by Corlac Inc. et al (“Corlac”) from a Trial Judgment declaring Canadian Patent No. 2,095,937 (“937 Patent”) to be valid and infringed.

At trial, Weatherford et al (“Weatherford”) alleged patent infringement. Corlac defended the claim and counterclaimed that the patent was invalid on a number of grounds, including: anticipation; obviousness; improper inventorship; and “misrepresentations to the Patent Office” pursuant to sections 53(1) and 73(1)(a) of the Patent Act. The Trial Judge held that several claims were infringed and rejected Corlac’s allegations of invalidity.

Corlac appealed the Trial Judgment and alleged errors pertaining to the following issues: claim construction; anticipation; obviousness; inventor’s credibility; inventorship; misrepresentations to the Patent Office; and inducement of infringement. Corlac also appealed the infringement finding in respect of claim 17.

The Court of Appeal rejected each of Corlac’s allegations of error and upheld the validity of the 937 Patent. Of particular note and importance is the Court of Appeal’s findings in respect of misrepresentations to the Patent Office pursuant to section 73(1)(a) of the Patent Act, which states:

An application for a patent in Canada shall be deemed to be abandoned if the applicant does not

(a) reply in good faith to any requisition made by an examiner in connection with an examination, within six months after the requisition is made or within any shorter period established by the Commissioner.

Section 73 “generally relates to communications and steps for the prosecution of patent applications in the Patent Office.” Corlac argued that “if it is established (at any time) that an applicant did not respond in good faith to a requisition during the prosecution of the application, then by operation of law, the application is deemed to have been abandoned. Consequently, if the application was abandoned by operation of law and was not reinstated within the requisite time, the 937 Patent could not properly have been issued and it must be declared invalid.”

The Court of Appeal rejected these arguments. It held that Canadian patent law is entirely statutory and “the grounds for attacking the validity of a patent are delineated in the [Patent] Act. Specifically, they relate to: utility, section 2; novelty (anticipation), section 28.2; obviousness (inventiveness), section 28.3; and sufficiency of the disclosure, subsection27(3).” In addition, a patent can be held to be void pursuant to section 53 if, inter alia, any material allegation in the petition of the applicant in respect of the patent is untrue. Section 53 requires a wilfulness component and a materiality component which is a fact-dependent analysis.

The Court of Appeal held that the “fundamental flaw” in Corlac’s argument was its failure to differentiate between a patent application and an issued patent. This is an important distinction which is recognized and maintained throughout the Patent Act. The Court of Appeal held that section 53(1) applies to issued patents, whereas section 73(1)(a) operates during the prosecution of a patent application. The Court noted that these provisions are “mutually exclusive”. Section 73(1)(a) is “extinguished once the patent issues” and to find otherwise would result in “absurdity”. The Court of Appeal held that it is the role of the Commissioner of Patents to determine whether a response to a requisition is made in good faith pursuant to s. 73(1)(a), not the role of the court.

Implications for Pharmaceutical Litigation

Section 73(1)(a) has been used by generic manufacturers in several cases under the Patented Medicines (Notice of Compliance) Regulations to support an allegation of invalidity (Lundbeck, 2009 FC 1102 and Searle, 2007 FC 81). The Court of Appeal held that to the extent that these two cases stand for the proposition that section 73(1)(a) can be used to attack the validity of an issued patent, “they should not be followed.”

The Court of Appeal’s strongly worded findings on the application of section 73(1)(a) will be of significant effect in pharmaceutical patent litigation and should reverse the trend created by the Searle and Lundbeck decisions.

Link to decision:

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