A Pair Of SAGD Cases Highlight The Application Of Purposive Patent Claims Construction: Swist v MEG Energy Corp And Betser-Zilevitch v PetroChina Canada Ltd

• Published date: 05 March 2021
• Subject Matter: Intellectual Property, Energy and Natural Resources, Energy Law, Oil, Gas & Electricity, Patent
• Law Firm: Bereskin & Parr LLP
• Author: Mr Joshua W. Spicer

The Federal Court recently issued two trial decisions in patent infringement proceedings related to the extraction of heavy oil (or bitumen) from tar sands deposits in Alberta. Each involves a technology referred to as steam assisted gravity drainage (SAGD) and, coincidentally, was brought by the inventor of the patent in issue against a major oil producer. The Federal Court dismissed both cases. In each, it applied a purposive approach and arrived at a narrower claim construction than that sought by the inventor resulting in a finding of non-infringement. The cases illustrate the potential downfall of pursuing an overly literal construction, and the importance of considering claim language in the context of the entire patent specification.

Swist v MEG Energy Corp

On January 10, 2021, the Federal Court issued its public Judgment and Reasons in Swist v MEG Energy Corp, dismissing the plaintiffs' claim for patent infringement over the defendant's heavy oil extraction methods.¹ Justice Fothergill also held that the 746 Patent in issue was invalid on the basis that the claimed subject matter was not new or useful.²

The 746 Patent, entitled "Pressure Assisted Oil Recovery", relates to a method of injecting steam into oil wells to improve production over traditional SAGD methods. SAGD involves the injection of steam into a horizontal "injector" well positioned above and parallel to a horizontal "producer" well. The steam heats oil trapped in the formation surrounding the well pair and allows the oil to flow into the producer well where, together with water from the condensing steam, the mixture can be pumped to the surface. The process takes years. The 746 Patent claims a method where steam is injected into a third well positioned in between the injector and producer wells.³ In particular, following the injection of steam into the injector well, claim 1 of 746 Patent specifies "generating a large singular zone of increased mobility" by injecting more steam into the third well.

Construction of the term "generating" proved decisive. The parties and experts agreed that the injection of steam would create "steam chambers" surrounding the wells, and that these chambers would eventually merge to create a large singular zone of increased mobility. Swist argued that "generating" only required that the third well "positively influence" the generation of a large singular zone of increased mobility. Justice Fothergill disagreed. He held that the purpose of the invention...