2018 Year In Review: Litigation

2018 saw many developments in the practice of Canadian intellectual property litigation. Notably, there were small but significant amendments to the Patent Act, including modification to the long-standing prohibition against using a patent's file wrapper to construe its claim(s). 2018 also marked the first full year of jurisprudence with respect to the amended Patented Medicines (Notice of Compliance) Regulations (“PM(NOC) Regulations”), which came into force in late 2017, and protective orders surviving to protect another day.

Below, we highlight some of 2018's key judicial decisions, and legislative changes affecting intellectual property litigation in Canada.

Legislative changes

Introducing File Wrapper Estoppel

Bill C-86, A second Act to implement certain provisions of the budget tabled in Parliament on February 27, 2018 and other measures, received Royal Assent on December 13, 2018.1 This Act introduces numerous changes to Canadian intellectual property legislation. Of note to litigation practice, it amends the Patent Act to introduce file wrapper estoppel into Canadian law. Previously, all extrinsic evidence, including statements made by the patentee to the Patent Office during patent prosecution, was inadmissible in litigation for the purposes of construing the patent's claims.2 Pursuant to the amendment, written communications made by the patentee during prosecution of the patent application will be admissible in litigation to rebut any representation made by a patentee as to claim construction. The amendment addresses a comment that at least one Canadian judge had made that the exclusion of a patent's file wrapper to construe the patent's claims was outdated given that the file wrapper is readily available online.3

Expansion of Prior User Rights

Bill C-86 also expanded prior user rights under the Patent Act. If a person, prior to a patent claim's claim date, commits an act that would otherwise have constituted infringement of that claim, or made “serious and effective preparations” to commit such an act, then it is not an infringement of that claim for the person to commit the same act on or after the claim date. The person must have acted in good faith, and the exemption does not apply if the person was able to commit the act or make the preparations only because they obtained knowledge of the subject matter directly or indirectly from the patent applicant, and knew that the applicant was the source of the knowledge. The amended provision will also allow the transfer of prior user rights if the prior use is carried out by a business.

2. Update on the Amended PM(NOC) Regulations

   In 2017, the PM(NOC) Regulations were amended significantly. 4 Among other things, proceedings under the PM(NOC) Regulations now finally determine issues of patent infringement and validity, subject to appeal. Parties can no longer re-litigate infringement or validity of the same patents, regardless of the outcome of the PM(NOC) proceeding. In 2018, 37 actions were commenced under the new PM(NOC) regime,5 down approximately 25% from 2017, in which a total of 48 proceedings were commenced (44 under the old Regulations and four actions under the new regime).

   In Genentech, Inc et al v Amgen Canada Inc,6 the Court considered new section 6.08 of the PM(NOC) Regulations for the first time. This section is similar to former section 6(5)(b), and permits the Court to dismiss an action under the PM(NOC) Regulations if it is “redundant, scandalous, frivolous or vexatious” or “otherwise an abuse of process”. In dismissing Amgen's motion under section 6.08, the Court noted that the language of section 6.08 is essentially the same as former section 6(5)(b) of the PM(NOC) Regulations, and the jurisprudence under that section remains relevant. However, the Court commented that in theory it should be easier for a plaintiff to resist a section 6.08 motion, because the plaintiff is now entitled to discovery of the defendant, which it was not under the former PM(NOC) Regulations. Importantly, the Court observed that the consequences of granting a motion under section 6.08 are more significant than under former section 6(5)(b). If the court strikes a claim under section 6.08, section 6.01 precludes the plaintiff from subsequently commencing an action for infringement (which was open to it under the former PM(NOC) Regulations). Therefore, the Court should exercise heightened caution in striking claims under section 6.08, and grant such motions only in the clearest of cases.

   The Court also considered the circumstances under which it would give leave to determine a PM(NOC) action (or a within issue) by way of summary judgment or trial. In Hoffmann-La Roche Limited et al v Pfizer Canada Inc,7 Pfizer brought a motion for summary judgment or summary trial, dismissing the infringement action insofar as it related to Pfizer's “skinny label” submission for its Herceptin biosimilar. Pfizer required leave from the Court to bring the motion pursuant to Rule 213 of the Federal Courts Rules,8 as the trial was already set down for hearing (the time and place for trial is fixed at an early stage in actions brought under the PM(NOC) Regulations).

   The Court denied leave after considering: (1) whether there would be a significant savings of costs, time and efficiencies by permitting the motion to proceed; (2) whether any of the parties would be prejudiced by permitting the motion to proceed; (3) the level of cooperation that the moving party exhibited in the proceeding; and (4) whether the moving party brought the motion in a timely manner. Here, the Court held that there would be no significant savings even if Pfizer were successful on the motion (as a parallel action involving the full label submission would remain), the summary proceeding would require expert evidence, and the parties had not demonstrated cooperation to date. The Court observed that PM(NOC) actions already proceed...