Canadian Patent Law 2022: A Year In Review

• Jurisdiction: Canada
• Law Firm: Smart & Biggar
• Subject Matter: Intellectual Property, Litigation, Mediation & Arbitration, Patent, Trials & Appeals & Compensation
• Author: Mr David Schwartz, Michael Sgro, Hannah Mirsky (Articling Student) and Iris Ngo (Articling Student)
• Published date: 16 January 2023

2022 was an active year in Canadian patent law. Claim fees were introduced for the first time; changes were made to regulations providing remedies for excessive pricing of patented medicines; and a range of court decisions addressed important issues.

We considered over 60 patent decisions reported last year. In this article, we highlight statutory changes and a selection of interesting points addressed in the reported decisions. For a comprehensive review of Canadian pharmaceutical decisions and developments, please see the 2022 Highlights in Life Sciences IP and Regulatory Law in our Rx IP Update.

Claim fees and continued examination fees

September 2022 was a busy month in the Canadian Patent Office as applicants rushed to request examination of pending applications and file new applications with examination requests to avoid excess claim fee and continued examination fee rules that came into force on October 3, 2022. Previously, no fees associated with the number of claims were payable in Canada, nor were there fees associated with the number of Examiner's Reports that might issue.

The new rules find their genesis in the election of Donald Trump to the US presidency in 2017 and, at his initiative, the renegotiation of the North American Free Trade Agreement (NAFTA) resulting in its replacement by the Canada-United States-Mexico Agreement (CUSMA). Commencing January 1, 2025, CUSMA requires Canada to grant patent term adjustment for Patent Office delay for all applications filed on or after December 1, 2020. The claim fee and continued examination fee rules aim to reduce patent application pendency and streamline the examination process in view of the pending requirements for patent term adjustment.

Under the new rules, a government fee of CAD $100 ($50 for a small entity) is payable for each claim over 20 in applications in which examination has been requested on or after October 3, 2022. Fees are calculated based on the greatest number of claims pending at any time from when the examination is requested to when the issue fee is paid. A request for continued examination and a government fee of $816 ($408 for a small entity) are required in order to respond to the third Examiner's Report and every second subsequent Examiner's Report.

For more details about the new rules and strategies for safe and cost-effective prosecution practices under the new rules, please see our articles of June 8, 2022, October 3, 2022 and November 3, 2022.

Sequence listing requirements

The sequence listing provisions in the Patent Rules were also amended in 2022. The amended rules require compliance with the new WIPO sequence listing standard ST.26 for Canadian patent applications having a filing date on or after July 1, 2022. Transitional provisions permit patent applications having a filing date before July 1, 2022 to contain a sequence listing in either the new WIPO sequence listing standard ST.26 or the previous ST.25 format. Because the Canadian filing date of a PCT application entering the Canadian national phase is the PCT international filing date, the new sequence listing rules will have an immediate impact only on non-PCT applications.

Excessive prices of patented medicines

The Patented Medicine Prices Review Board (PMPRB) established under section 91 of the Patent Act reviews prices of patented medicines sold in Canada based on a comparison to prices in other markets. If the Canadian price is found to be excessive, the PMPRB can order patentee to do one or more of the following to offset excess revenues: reduce the price of the medicine sold in Canada; reduce the price of another medicine sold in Canada; or pay to His Majesty in right of Canada a sum specified in the order.

After consultations, delays, and court challenges concerning the constitutionality of some of the proposed changes, amendments to the Patented Medicines Regulations under which the PMPRB operates came into force on July 1, 2022. Most significantly, the countries upon which price comparisons are based have changed. The former "PMPRB7" of France, Germany, Italy, Sweden, Switzerland, the United Kingdom, and the United States has been replaced with the "PMPRB11," of Australia, Belgium, France, Germany, Italy, Japan, Netherlands, Norway, Spain, Sweden, and the United Kingdom, a basket of countries intended to be more representative, and significantly excluding Switzerland and the United States, two jurisdictions with highest prices.

A challenge to the revision of basket of comparator companies by Innovative Medicines Canada and sixteen innovative pharmaceutical companies on the basis that the revision was inconsistent with the purpose of the Patent Act and was for the improper purpose of regulating or controlling prices or setting reasonable prices was rejected by the Federal Court (Innovative Medicines Canada v Canada (Attorney General), 2020 FC 725), a decision upheld by the Federal Court of Appeal, 2022 FCA 210). The constitutionality of the revision of the basket of comparator countries was also upheld by the Court of Appeal of Quebec in Merck Canada Inc c Procureur général du Canada, 2022 QCCA 240.

For more information about the amended rules and draft PMPRB guidelines under the new rules, please see our articles of June 30, 2022 and October 11, 2022.

For more information regarding the decision of the Federal Court of Appeal in Innovative Medicines Canada v Canada (Attorney General) and the decision of the Court of Appeal of Quebec in Merck Canada Inc c Procureur général du Canada, please see our December 12, 2022 and February 22, 2022 articles.

Claim construction: Recourse to the description is necessary

The Supreme Court of Canada has emphasized the importance of adherence to the language of the patent claims to promote fairness and predictability, but at the same time that the claims must be construed in an informed and "purposive" way, the words chosen by the inventor being read in the sense the inventor is presumed to have intended. A question sometimes arises whether recourse to the specification is permissible where a claim feature appears to have an unambiguous meaning based on the plain language of the claim.

In Biogen Canada Inc v Pharmascience Inc, 2022 FCA 143, the Federal Court of Appeal confirmed that the claims are to be construed having regard to the description irrespective of whether they ostensibly have a simple and unambiguous meaning on their face. An inventor may define terms in a manner that may differ from their plain and simple meaning. If the description is not considered, then the inventor's objective intention as expressed in the specification may not be respected.

Similarly, in Google LLC v Sonos, Inc, 2022 FC 1116, the Federal Court rejected Google's assertion that "recourse to the patent disclosure to ascertain the meaning of terms in the claims is impermissible when the terms in the claim are unambiguous" (underscoring added), and relied on the description in concluding that "echo cancellation" and "noise suppression" are distinct and mutually exclusive processes. Google has appealed the decision (A-207-22).

For a further discussion of the Federal Court of Appeal's decision in Biogen Canada Inc v Pharmascience Inc, please see our August 29, 2022 article.

Claim construction: What is the impact of referring to a "use" in a claim preamble?

The preamble of a claim defines the category of the invention being claimed. However, it is also common for the preamble to refer to a purpose of the claimed invention. This is often achieved by reciting the claimed product is "for use" in a particular manner.

In Allergan Inc v Apotex Inc,2022 FC 260, the Federal Court construed a claim reciting "An oral dosage form of a bisphosphonate for use with or without food or beverage intake" as being directed to an oral dosage form that can be used (i.e., can be consumed, administered or taken) at the choice of the user/patient either with or without food or beverage intake. The Court held that the Apotex product, which is restricted to use with food, did not infringe the claim and would not induce infringement. The product monograph clearly directed that Apotex's product only be taken with food.

For a further discussion of the Federal Court's decision in Allergan Inc v Apotex Inc, please see our March 24, 2022 article.

The common general knowledge can establish a sound prediction of utility without rendering a claim obvious - Patent Act, Section 2

So that the patent bargain is met and the inventor provides to the public more than mere speculation, the utility of the claimed invention must be established at the filing date either by demonstration or sound prediction. However, arguing that the common general knowledge of a person of ordinary skill in the art at the time of filing supports a sound prediction of utility may feed into an argument that the claimed invention was obvious.

In Pharmascience Inc v Teva Canada Innovation, 2022 FCA 2, the utility of the claimed invention had not been demonstrated before filing and there were no experiments in the patent that could serve as a factual basis for a sound prediction of utility. The factual basis was therefore predicated on the common general knowledge.

The Federal Court of Appeal rejected Pharmascience's argument that, if the common general knowledge could be relied upon to establish a sound prediction, then the claimed invention must have been at least obvious to try. Noting that utility...