Court also upholds interpretation of file wrapper estoppel in precedent-setting case
Prosecution files are admissible to rebut representations made by a patentee on the construction of a claim in a patent, the Federal Court of Appeal has found in dismissing an appeal in a precedent-setting patent case.
In upholding a Federal Court interpretation of file wrapper estoppel, the Federal Court of Appeal also supported summary judgment as a cost-effective procedural route to exit unmeritorious patent actions – the first time it had done so.
“This was the first case in the past two decades, to my knowledge, that the Federal Court issued a summary judgment dismissing a patent application on substantive grounds,” says Patrick S. Smith of Gowling WLG, lead counsel for the successful respondent in CanMar Foods Ltd. v. TA Foods Ltd.
“Implicit in the TA Foods decision from the Federal Court of Appeal is the acceptance that summary judgment is an available procedural route to dispose of patent matters that do not need to be decided at trial,” which can substantially reduce the cost of litigation; and since the Federal Court’s decision in this case there have been three other summary judgment decisions in other patent cases, Smith adds.
In dismissing the appeal, the Federal Court of Appeal also upheld Federal Court Justice Michael Manson’s interpretation of the recently enacted “file wrapper” (i.e., patent prosecution history) estoppel provision, Section 53.1, which was added to Canada's Patent Act in December 2018. That new provision allows prosecution histories into evidence in patent proceedings to rebut representations made by the patentee regarding claim construction, i.e., the process in which courts interpret the meaning and scope of a patent’s claims.
The leading cases concerning claim construction in Canada are a pair of Supreme Court of Canada decisions released on December 15, 2000: Free World Trust v. Électro Santé Inc. and Whirlpool Corp. v. Camco Inc. In those cases “the Supreme Court was basically laying out a set of rules about how courts should go about construing patents,” says Smith, who is leader of Gowlings’ Calgary office’s Intellectual Property Group and a member of the firm’s Patents and Life Sciences groups.
“And one of the questions was, should courts make use of the negotiations that take place in the patent office concerning the scope of claims?”
The Supreme Court decided against this, rejecting the principle of file wrapper estoppel and finding that “allow[ing] such extrinsic evidence for the purpose of defining the monopoly [of the patent] would undermine the public notice function of the claims, and increase uncertainty as well as fuelling the already overheated engines of patent litigation.”
But in amending the Patent Act in 2018, Parliament legislated that “to rebut any representation made by a patentee during the prosecution of a patent in Canada, you can introduce communications between the patentee and the commissioner of patents,” Smith notes. The TA Foods case “was the first chance that the Federal Court had to interpret the new section 53.1 of the Patent Act.”
The patent at issue in this case related to a process for roasting oil seeds, in particular flax; the litigation involved two Saskatchewan corporations that are competitors in the business of manufacturing flax seed products, including roasted flax seed products. The original claims filed by CanMar Foods Ltd. in Canada, for “Methods for Roasting Oil Seed, and Roasted Oil Seed Products,” required that the flax be heated to a certain temperature, but did not specify how the heating was to occur. In the United States, for the application corresponding to the Canadian patent at issue, the examiner cited a document by an inventor named Newton that heated oil seeds, or grain, by way of infrared radiation. Therefore, the patentee CanMar Foods Ltd. restricted its claims in the U.S. to heating by way of a stream of air, purposely exempting heating by way of “infrared radiation” from the scope of its claims. Subsequently, CanMar limited its claims in Canada to correspond to the amended U.S. claims.
TA Foods, a producer/roaster of grains, including flax, had purchased a roasting machine, the Micronizer, manufactured by the Micronizing Company founded by Newton, inventor of the infrared heating technology cited by the patent examiner in the U.S. Although it had disclaimed, or prevented the inclusion of, infrared radiation from the scope of its patent claims, CanMar Foods later sued TA Foods for patent infringement, suggesting that infrared radiation was included within the limitation of “heating by way of a stream of air.”
“The construction question was,” says Smith, “whether the court should look at what was said in the prosecution of the Canadian patent, and possibly what CanMar said during the prosecution of its United States patent?”
The Federal Court’s Justice Manson “came to the conclusion that the respondent did not infringe the [original] ‘376 Patent, and further saw no genuine issue for trial,” Federal Court of Appeal Justice Yves de Montigny wrote in his decision dismissing CanMar Food’s appeal.
“In my view, Justice Manson did not err in finding that TA Foods’ only process for roasting oil seeds such as flax does not infringe any claim of the ‘376 Patent, and in granting summary judgment dismissing CanMar’s patent infringement action,” he wrote.
“In the case at bar, Justice Manson saw two elements weighing in favour of considering the U.S. prosecution history as an admissible extrinsic aid to the construction of the ‘376 Patent. First, the appellant expressly acknowledges that the claims of the ‘376 Patent have been amended to be substantially the same as the corresponding claims of the ‘405 Application in the United States. Second, the patentee admits that the amendments have limited the scope of the claims to overcome the novelty and obviousness concerns of the type raised before the PTO …”
In supporting the Federal Court judge’s conclusions in the case, Justice de Montigny nonetheless found that “the Judge should have refrained from taking into consideration the prosecution history of the corresponding U.S. Application in the circumstances of this case. With respect to the broader issue of whether the prosecution history of a foreign application can ever be considered pursuant to section 53.1 of the Patent Act, as a result of incorporation by reference or otherwise, I wish to express no firm views on the matter.”
The Federal Court decision was recognized as the Canadian Patent Impact Case of the Year by Managing Intellectual Property (MIP) Americas Awards 2020. Gowling WLG represented TA Foods both at trial and on appeal.