Today the Supreme Court of Canada refused leave to appeal in a case that has fundamental implications for how patent law is practiced in Canada. The case in question is Corlac Inc., et al. v. Weatherford Canada Ltd., et al.,1 a decision of the Federal Court of Appeal upholding a lower court ruling that Corlac had infringed certain patent rights held by Weatherford. While a number of issues had potentially been up for consideration by the Supreme Court of Canada, one in particular sat squarely front and center – duty of candour.
Duty of Candour Before the Patent Office
Prior to 2007, duty of candour before the patent office was a relatively closed issue. It was well settled law in Canada that, absent proof of fraudulent conduct, the validity of an issued Canadian patent could not later be challenged on grounds that the patent applicant had not been entirely forthcoming in statements or submissions made to the patent office. On this basis, patent applicants were under no general obligation to disclose potentially relevant information to the patent office, unless the information was specifically requested, and provided such withholding did not constitute fraud on the applicant’s part.
Two decisions of the Federal Court broke with these long standing principles and breathed life into a debate that many had looked upon the Supreme Court of Canada to quiet. Seizing upon new language that was introduced by a 1996 law reform, the Federal Court ruled in the 2007 decision of GD Searle & Co. v. Novopharm Ltd.2 and subsequently in the 2009 decision of Lundbeck Canada Inc. v. Ratiopharm Inc.3 that, pursuant to s.73 of the Patent Act, applicants must answer every patent office communication “in good faith”. Importantly, these two decisions also held that, by operation of other provisions in the current patent law regime, failure to answer in good faith would provide basis for a court to later declare patents invalid, with retroactive force and effect. As a practical matter, applicants who were found to run afoul of the good faith requirement would in almost every case face this very hefty penalty.
Duty of candour was again argued as a basis for invalidating an issued patent at the Federal Court of Appeal in Weatherford. However, in what amounts to a substantial vitiation of the Federal Court’s earlier masterstroke, it was held that s.73 of the Patent Act is limited to procedural matters during examination before the patent office and has no ambit once a patent issues. In effect, the Federal Court of Appeal in Weatherford made the patent office solely responsible for deciding whether good faith has been shown and, in so doing, greatly circumscribed the penalties for failure. Following Weatherford, if s.73 still operates to impose a generalized duty of candour on applicants – still an open question – it is at least no longer for courts to decide whether such duty has been satisfactorily discharged.
The decision of the Federal Court of Appeal in Weatherford represents the latest and, to date, the most authoritative statement on the issue of candour before the patent office. With leave to appeal to the Supreme Court of Canada having been denied, it figures to retain this status for the foreseeable future as well. Considerable guidance on this at times thorny issue could have been provided had the Supreme Court of Canada agreed to hear Corlac’s appeal. Given the significance of the issues involved and the comparative weight of authority commanded by Supreme Court decisions, some patent practitioners are sure to be disappointed with today’s ruling.
Other Issues up for Appeal in Weatherford
With all the focus on duty of candour, it is easy to overlook the fact that several other issues raised in Weatherford had also been potentially up for review by the Supreme Court. When might it be proper to cloak an applicant’s prior disclosure of an invention in a shroud of implied confidentiality? Must a court follow a strict analytical framework in assessing the obviousness of an invention or could a more contextual approach ever be justified? What evidence may be consulted so as to establish inventorship? Is there room for adverse inferences in proving an element of infringement? Beyond good faith and candour in dealings with the patent office, these too are questions of fundamental significance to patent law in Canada and onto which the Supreme Court of Canada might have shed some light. But like the issue of candour, these questions will now also have to wait for another day to reach Canada’s top court.
Footnotes
1 2011 FCA 228 (FCA).
2 2007 FC 81, reversed 2007 FCA 173.
3 2009 FC 1102.
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