Federal Court Of Appeal: Obviousness Is An 'Inherently Factual' Inquiry

Introduction

Recently, the Federal Court of Appeal published its decision in Packers Plus Energy Services Inc. v. Essential Energy Services Ltd.,1 in which the appellant, Packers, alleged a number of errors in the Federal Court's holding that Packers' patent was obviousness. The Federal Court of Appeal dismissed the appeal, reaffirming that obviousness is a predominantly factual determination.

The decision is the latest in a recent line of cases from the Federal Court of Appeal focusing on obviousness.2

Background

The patent in-suit claimed both a method and an apparatus for hydraulic fracturing ("fracking"), using a pipe string (lengths of well pipe joined together end-to-end) containing ports that could be opened by inserting a ball into the pipe string (the "ball drop method"). Using the ball drop method, operators could control the flow of high pressure fracking fluids into hydrocarbon-containing shale formations. The pipe string, which has a smaller diameter than the wellbore, was held in place using 'packers', a material placed between the pipe string and the wellbore.

While the ball drop method had been used in the past, Packers was the first to use the ball drop method in 'open hole' wellbores (wellbores without a concrete casing to maintain the shape of the wellbore).3

At trial, the Federal Court held that the claims at issue were obvious. The Court accepted Packers' construction of the inventive concept – "the use of the ball-drop method in an open-hole wellbore"4 – but held that neither the ball-drop method, nor its use in an open hole wellbore was inventive.5

At trial, Packers argued that the skilled person would not have foreseen various problems in deploying the ball drop method in open hole wellbores. However, the Court held that this was more a function of the particular geological formation than the alleged invention.6 The Court held that the skilled person, knowing the features of the formation, would have chosen the appropriate tools from the prior art.7 and, in reality, little effort was required to develop the alleged invention.8

Packers' commercial success – a secondary indicator of inventiveness – was discounted because it was not caused by the invention. Rather, any commercial success was driven principally by rising commodity prices that had made fracking more economical and commonplace.9

While the Court doubted whether the obvious-to-try test was applicable to the oil and gas industry, it nonetheless held that the...