There And Back Again: Frac Shack Once Again Victorious In Patent Infringement Case

Patents can be among the most valuable assets natural resource companies own. The time-limited monopoly right granted by a patent can preserve market exclusivity, can be used as a sword to ward off competing businesses, and are especially important for single-product companies. Despite these significant benefits, patent litigation is highly technical, involving both cutting-edge technologies and a specialized legal regime. As the Frac Shack cases show, successfully navigating the complexities of patent litigation requires experienced counsel.

In last years' edition of Mining in the Courts, we provided an overview of the Federal Court's recently released decision Frac Shack Inc. v. AFD Petroleum Ltd., 2017 FC 104. In that case, Frac Shack, a single-product company, had successfully sued a competitor for infringing a patent covering Frac Shack's innovative fracking equipment refueling system. Frac Shack's system allowed fracking equipment to be refueled without operators having to manually refill the fuel tanks in the tight quarters between the running equipment, a dangerous process known as "hot refuelling," which was the industry norm.

The competitor, AFD, conceded infringement of several patent claims, subject to attempting to invalidate them, on the theory that an invalid claim cannot be infringed.

Justice Manson rejected AFD's allegations, holding that several claims were valid and infringed. The Court awarded Frac Shack an accounting and disgorgement of AFD's profits, reasonable compensation for the period between publication of the application and patent issuance, and a permanent injunction restraining any further infringement until the patent expires in 2030.

AFD appealed to the Federal Court of Appeal, which allowed the appeal, in part (2018 FCA 140). While AFD alleged many errors on appeal, only one found favour with the Court — the Federal Court's definition of the "person skilled in the art." It is well-recognized that patents must be read and understood from the perspective of a notional person skilled in the art of the field of the patent. That person is not a member of the general public. Rather, the person skilled in the art is involved in the field of the invention and knows all of the common general knowledge of those who work in the field. They also keep up-to-date on advances in the field, in this case hydraulic fracking equipment refuelling.

The Court of Appeal held that the Federal Court had used irreconcilably...