Key Canadian Patent Law Decisions From 2022 And Some Predictions For 2023

• Jurisdiction: Canada
• Law Firm: Cassels
• Subject Matter: Intellectual Property, Patent
• Author: Mr Mark Davis, Kassandra Shortt and Steven Henderson
• Published date: 11 January 2023

2022 was another busy year in Canadian patent litigation. Canadian courts delivered a record-setting monetary award and clarified several important legal principles including the proper test for patentable subject matter. We have summarized some of the most important developments in Canadian patent law in 2022 and offer some predictions on how they will affect pending and future cases.

ACCOUNTING OF PROFITS - NOVA CHEMICALS CORP. V. DOW CHEMICAL CO., 2022 SCC 43

In the Supreme Court of Canada's only patent decision of the year, the Court clarified the test for an accounting of profits. The Court upheld the largest monetary award ever granted in a Canadian patent case: a $645 million award to Dow for infringement by Nova of Dow's patent for a type of polyethylene plastic.

A majority of the Court recognized that an accounting of profits was an important remedy that helps maintain the integrity of the patent bargain by ensuring that an infringer does not benefit from infringing a patent. The Court reformulated the test for accounting of profits as: (1) calculate the actual profits the infringer made by selling the infringing product (i.e., actual revenues minus actual costs); (2) consider whether the infringer had a non-infringing option it could have sold instead of the infringing product; and (3) subtract the profits the infringer could have made by selling the non-infringing option (if one was identified) from the actual profits it made by selling the infringing product.

Another key aspect of this decision was the Court's confirmation that "springboard profits" may be included in an accounting. Springboard profits are profits that an infringer made after the patent expired, but which are nonetheless attributable to infringement that took place during the term of the patent. The Court confirmed that springboard profits are consistent with the overall emphasis on causation that guides the accounting of profits assessment, as profits made after the patent expired may be attributable to the market share and sales capacity that the infringer built up for an infringing product during the term of the patent.

2023 will undoubtedly see many litigants working to apply these principles in their own circumstances.

APPLYING COMMON GENERAL KNOWLEDGE - PHARMASCIENCE INC. V. TEVA CANADA INNOVATION, 2022 FCA 2

In early 2022 the Federal Court of Appeal clarified the distinction between sound prediction of utility and obviousness when assessing the validity of a patent. This was an appeal of a Federal Court decision finding that a patent held by Teva Canada Innovation (Teva) was valid. One of the key arguments the appellant, Pharmascience Inc. (Pharmascience), made on appeal was that because common general knowledge...