Canadian Patent Law: 2022 Year In Review

• Jurisdiction: Canada
• Law Firm: Gowling WLG
• Subject Matter: Intellectual Property, Patent
• Author: Mr Michael Crichton, Alex Gloor and Nevena Cekic
• Published date: 17 January 2023

Canadian courts issued many patent-related decisions in 2022. This article summarizes a number of the more notable court decisions, as well as other patent-related developments from 2022.

1. Supreme Court of Canada addresses the accounting of profits remedy
2. New patent eligibility test for computer-implemented inventions
3. Dismissal of Statutes of Monopolies claim affirmed on appeal
4. Decisions regarding summary disposition
5. Crocs' industrial design infringed and valid, and accounting of profits awarded
6. Decisions under the PM(NOC) Regulations
7. New rules and procedures for patent applicants
8. Refusals of aberrant bifurcations
9. Dismissal of Contempt of Court claim

1. Supreme Court of Canada addresses the accounting of profits remedy

The largest monetary award ever by a Canadian court for patent infringement was upheld by the Supreme Court of Canada in Nova Chemicals Corp v Dow Chemical Co in an 8-1 decision (2022 SCC 43) which provided fresh guidance and a preferred framework for conducting an accounting of profits analysis.

Lower courts had awarded and upheld on appeal a $644-million judgment in favour of Dow Chemical for Nova Chemicals' infringement of Dow's patent. In dismissing Nova Chemicals' further appeal to the Supreme Court, the Court set out a three-step framework for conducting an accounting of profits: (1) calculate the actual profits earned by selling the infringing product (i.e., revenue minus costs); (2) determine whether there is a non-infringing option that can help isolate the profits causally attributable to the invention from the portion of the infringer's profits not causally attributable to the invention; and (3) if there is a non-infringing option, subtract the profits the infringer could have made had it used the non-infringing option from its actual profits, to determine the amount to be disgorged.

The aim of the non-infringing option analysis is to determine how the patented subject matter contributed to the value of what the infringer sold, not to assess what proportion of the infringer's product fell within the patent. In the present case, the Court accepted the Federal Court's finding that customers only purchased Nova's infringing products because they contained the features captured by Dow's patent. As a result, there were no non-infringing options, such that all profits realized from the infringing products were to be disgorged.

The Court upheld the lower courts' award of springboard profits, i.e. profits that arise post-patent-expiry but are causally attributable to infringement of the invention during the period of patent protection.

Please see this article for more details and analysis regarding the Supreme Court's decision.

2. New patent eligibility test for computer-implemented inventions

The Canadian Intellectual Property Office (CIPO) had rejected two patent applications of Benjamin Moore related to computer-implemented inventions for colour selection and provision of colour combinations on the basis that they are directed at ineligible subject matter.

On appeal to the Federal Court in Benjamin Moore & Co v Canada, (2022 FC 923) the Court reiterated that the "problem-solution" test for claim construction and for patentable subject matter is incorrect. In addition, the Court set out a new test that should be followed by CIPO examiners when assessing the patentability of computer-implemented inventions: (a) purposively construe the claim; (b) ask whether the construed claim as a whole consists of only a mere scientific principle or abstract theorem, or whether it comprises a practical application that employs a scientific principle or abstract theorem; and, (c) if the construed claim comprises a practical application, assess the construed claim for the remaining patentability criteria: statutory categories and judicial exclusions, as well as novelty, obviousness, and utility.

Please see this article for more details and analysis regarding the Federal Court's decision.

3. Dismissal of Statutes of Monopolies claim affirmed on appeal

In Apotex v Eli Lilly Canada, (2022 ONCA 587) the Ontario Court of Appeal affirmed a decision...