Canwell Enviro-Industries Ltd. v. Baker Petrolite Corp.

Canwell Enviro-Industries Ltd. v. Baker Petrolite Corp.
Base de données – Cour (s)
Décisions de la Cour d'appel fédérale
Date
2002-04-29
Référence neutre
2002 CAF 158
Numéro de dossier
A-483-01
Notes
Décision rapportée
Contenu de la décision
Recueil des arrêts de la Cour fédérale Baker Petrolite Corp. c. Canwell Enviro-Industries Ltd. (C.A.) [2003] 1 C.F. 49
Recueil des arrêts de la Cour fédérale Baker Petrolite Corp. c. Canwell Enviro-Industries Ltd. (C.A.) [2003] 1 C.F. 49
Date: 20020429
Docket: A-483-01
(T-913-95)
Neutral citation: 2002 FCA 158
CORAM: STRAYER J.A.
ROTHSTEIN J.A.
EVANS J.A.
BETWEEN:
CANWELL ENVIRO-INDUSTRIES LTD., CLIVE TITLEY, and
THE CITY OF MEDICINE HAT
Appellants
(Defendants)
and
BAKER PETROLITE CORPORATION,
PETROLITE HOLDINGS INC., BAKER HUGHES CANADA COMPANY
Respondents
(Plaintiffs)
Heard at Toronto, Ontario, on March 20 and 21, 2002.
Judgment delivered at Ottawa, Ontario, on April 29, 2002.
REASONS FOR JUDGMENT BY: ROTHSTEIN J.A.
CONCURRED IN BY: STRAYER J.A.
EVANS J.A.
Date: 20020429
Docket: A-483-01
(T-913-95)
Neutral citation: 2002 FCA 158
CORAM: STRAYER J.A.
ROTHSTEIN J.A.
EVANS J.A.
BETWEEN:
CANWELL ENVIRO-INDUSTRIES LTD., CLIVE TITLEY, and
THE CITY OF MEDICINE HAT
Appellants
(Defendants)
and
BAKER PETROLITE CORPORATION,
PETROLITE HOLDINGS INC., BAKER HUGHES CANADA COMPANY
Respondents
(Plaintiffs)
REASONS FOR JUDGMENT
ROTHSTEIN J.A.
INTRODUCTION
[1] This is an appeal from a decision of the Trial Division. The Trial Division Judge found that patent 2005946 (the 946 Patent) of the plaintiffs (Petrolite) had been infringed by the defendants Canwell Enviro-Industries Ltd. (Canwell) and the City of Medicine Hat (Medicine Hat). The major issue on appeal, and the basis for this decision, is whether the 946 Patent is invalid by reason of anticipation. If the invention was disclosed in a manner and at a time provided in the relevant statutory provision, the invention will have been anticipated and the 946 Patent will be invalid.
DECISION OF THE TRIAL JUDGE
[2] The Trial Judge's conclusions can be summarized as follows:
1. The 946 Patent was not invalid by reason of anticipation, obviousness, insufficiency of disclosure or material misrepresentation in the patent.
2. Canwell and Medicine Hat infringed the 946 Patent.
3. Canwell induced customers to infringe the 946 Patent.
[3] The relief granted to Petrolite by the Trial Judge included:
1. Injunctions against Canwell and Medicine Hat from further infringing the 946 Patent.
2. An order for delivery up of infringing products, apparatus and documents.
3. Judgment against Canwell and Medicine Hat for the profits flowing from infringement of the 946 Patent.
4. Judgment against Clive Titley, president and sole shareholder of Canwell, as constructive trustee of Canwell's profits he received in the form of bonuses, subject to an inquiry to trace what assets in the possession of Titley represented the bonuses he received.
5. Interest.
6. Costs.
THE 946 PATENT
[4] The 946 Patent is a process patent. It covers methods for removing hydrogen sulphide from natural gas. This is sometimes called sweetening or scavenging sour gas. Because hydrogen sulphide is corrosive in the presence of water and poisonous in very small concentrations, it must be removed almost completely from natural gas streams before use and before transport in a pipeline.
[5] Several methods for sweetening sour gas had been known. They involved bringing various chemicals into contact with natural gas at the wellhead or in a scrubber tower or absorber tower, or in other locations near the origin of the natural gas. However, use of these chemicals had undesirable side effects, e.g. health hazards, non-selective reaction resulting in removal of more than hydrogen sulphide, the production of precipitates that clog pipelines or poor performance at lower temperatures.
[6] The objective of the invention under the 946 Patent is to reduce or eliminate these side effects by use of a reaction product of an alkanolamine with an aldehyde. The reaction product would be brought into contact with natural gas in a scrubber system, as a chemical solvent system, by injection into a pipeline or by other methods.
[7] The preferred embodiment of the invention is indicated to be monoethanolamine (MEA) as the alkanolamine and formaldehyde as the aldehyde. While the 946 Patent claims cover a range of molar ratios of the alkanolamine and the aldehyde, from about 1:0.25 to 1:10, the preferable molar ratio is indicated to be from about 1:1 to about 1:1.5.
[8] The 946 Patent states that the reaction product of MEA and formaldehyde is bisoxazolidine and triazine. However, the Trial Judge found that the expert testimony was unanimous that bisoxazolidine had never been conclusively identified as a reaction product of MEA and formaldehyde, and was equally unanimous that the predominant reaction product of MEA and formaldehyde was triazine.
[9] The triazine covered by the 946 Patent had been known as a reaction product of MEA and formaldehyde. Accordingly, there is no product claim in the patent. The claims are limited to the reaction product used to selectively reduce the levels of hydrogen sulphide in natural gas.
FACTS
[10] The sequence of relevant events and facts, as found by the Trial Judge, can be summarized as follows:
1987
1. August or September - Quaker Petroleum Chemical Company began marketing, in western Oklahoma, a hydrogen sulphide scavenging product that was a formaldehyde solution. It was temperature-sensitive so that as the weather became colder, difficulties were encountered.
2. November - Quaker experimented with mixing MEA and formaldehyde. The resulting product solved the temperature-sensitivity problem and showed a "pretty good" affinity for hydrogen sulphide removal.
3. December 10 - a 500-gallon batch of the MEA and formaldehyde mixture was delivered by Quaker to Standard Oil of Ohio in western Oklahoma.
4. December and subsequent months - sales and deliveries of the mixture, now called W-3053, were made to Standard Oil and other customers in western Oklahoma. The molar ratio of MEA and formaldehyde in W-3053 was 1:2.77. The sales were unconditional in that the product was not subject to any confidentiality agreement.
1988
5. December 23 - Patent Application # 4978512 was filed in the United States.
1989
6. December 19 - The 946 Patent application was filed in Canada.
1991
7. Canwell began selling Cansweet 300SX and, subsequently, CW1000. Both contain a reaction product of MEA and formaldehyde. In 300SX, the molar ratio is 1:1. In CW1000, it is 1:2.66.
1995
8. February 7 - the 946 Patent issued in Canada.
9. May 2 - statement of claim filed giving rise to the action in the Trial Division.
2001
10. August 15 - Trial Division judgment issued.
11. August 24 - Interim stay granted.
12. October 2 - Partial stay pending appeal granted on conditions and order for expedited hearing made.
[11] As often occurs, there have been corporate changes and assignments affecting the ownership of the 946 Patent. There is no controversy about this and no need to address those details. It is sufficient to say that Petrolite and the other respondents were proper plaintiffs in the Trial Division seeking relief for infringement of the 946 Patent.
SUMMARY OF THE PARTIES' POSITIONS ON ANTICIPATION BY SALE OR USE OF W-3053
[12] Canwell says that the invention covered by Petrolite's 946 Patent had been disclosed to the public with the sale of W-3053 commencing on December 10, 1987, and continuing thereafter. This was more than one year before the filing date of the 946 Patent, namely December 19, 1989. Canwell says that accurate reverse engineering of W-3053 would lead a person skilled in the art to the invention claimed in the 946 Patent, that is, triazine, as a method to selectively reduce hydrogen sulphide in natural gas. Therefore, the invention of the 946 Patent was anticipated and the patent is invalid.
[13] Petrolite concedes that W-3053 was sold in western Oklahoma commencing on December 10, 1987. However, it says that the critical date was December 23, 1987, one year before the filing of the U.S. patent. It also says that the few sales made between December 10 and December 23 were not commercial sales and were to customers on their private property and, therefore, W-3053 was not available to the public. Further, it submits that any reverse engineering would be kept confidential by anyone performing it and it would not be made public.
[14] Although Petrolite does not rule out reverse engineering as a means of proving anticipation, it says that the evidence here was insufficient to meet the stringent test for anticipation in Beloit Canada Limited v. Valmet OY (1986), 8 C.P.R. (3d) 289, at 297 (F.C.A.). Petrolite submits that the test is that a prior publication or, in this case, reverse engineering of a prior sold product must lead the person skilled in the art in every case and without the possibility of error, to the claimed invention. The evidence here does not meet the test. In any event, Petrolite says that there is no evidence that the methodology and data for accurate reverse engineering were available during the period from December 10 to December 23, 1987 or, indeed, from December 10, 1987, to December 19, 1988, if Canwell's critical date is accepted.
WHICH STATUTE APPLIES?
[15] The issue here is whether the Patent Act, R.S.C. 1985, c. P-4, as amended by R.S.C. 1985, c. 33 (3rd Supp.), brought into force on October 1, 1989 (the 1989 Act), or the Patent Act as amended by S.C. 1993, c. 15, brought into force on October 1, 1996 (the 1996 Act), is applicable. Petrolite argues that the 1989 Act is applicable. It says that under that Act, the critical date is the date on which the application for the United States patent was filed, December 23, 1988. The only time during which there could be anticipation by prior use or sale is between December 10, 1987, when W-3053 was first sold in western Oklahoma, and December 23, 1987, one year before the filing date of the United States patent. Petrolite argues that during this time the sales were experimental and, in any event, there was no evidence that the methodology and data were available to permit accurate reverse engineering to determine the contents of W-3053.
[16] Canwell says the 1996 Act is applicable. Under that Act, the critical date is December 19, 1989, the date on which the 946 Patent application was filed in Canada. In Canwell's submission, the relevant period for anticipation by prior sale or use of the W-3053 product was December 10, 1987, to December 19, 1988, during which period sales were not experimental and the methodology and data for accurate reverse engineering were available.
[17] I have some difficulty accepting Petrolite's interpretation of the 1989 Act. However, it is not necessary to deal with that argument because, in my view, the 1996 Act is applicable. The 1996 Act contains transitional provisions including section 78.4. Under subsection 78.4(1), applications for patents filed on or after October 1, 1989, are to be dealt with and disposed of in accordance with the 1996 Act. Under subsection 78.4(2), any matter arising in respect of a patent issued on the basis of an application filed on or after October 1, 1989, but before October 1, 1996, is to be dealt with in accordance with the 1996 Act. Section 78.4 of the 1996 Act provides:
78.4 (1) Applications for patents in Canada filed on or after October 1, 1989, but before this section came into force, shall be dealt with and disposed of in accordance with
(a) subsection 27(2) as it read immediately before this section came into force; and
(b) the provisions of this Act, including subsection 27(2), as they read immediately after this section came into force.
(2) Any matter arising in respect of a patent issued on the basis of an application filed on or after October 1, 1989, but before this section came into force, shall be dealt with and disposed of in accordance with
(a) subsection 27(2) as it read immediately before this section came into force; and
(b) the provision is of this Act, including subsection 27(2), as they read after this section came into force and as amended from time to time.
78.4 (1) Les demandes de brevet déposées le 1er octobre 1989 ou par la suite, mais avant l'entrée en vigueur du présent article, sont régies par le paragraphe 27(2) dans sa version antérieure à l'entrée en vigueur du présent article et par les dispositions de la présente loi, y compris le paragraphe 27(2), dans leur version ultérieure à l'entrée en vigueur du présent article.
(2) Les affaires survenant relativement au brevets délivrés au titre de demandes de brevet déposées le 1er octobre 1989 ou par la suite, mais avant l'entrée en vigueur du présent article, sont régies par la paragraphe 27(2) dans sa version antérieure à l'entrée en vigueur du présent article et par les dispositions de la présente loi, y compris le paragraphe 27(2), dans leur version modifée par la présente loi et par toute modification ultérieure.
[Restructured pursuant to S.C. 2001, c. 10, s. 4., but without substantive change.]
[18] The learned Trial Judge found that the 1996 Act was applicable to the facts of this case and I agree with him. The 946 Patent application was filed on December 19, 1989, during the period referred to in subsection 78.4(2).
[19] Section 78.4 is a provision with retroactive effect. While there is a presumption against the retroactive application of legislation, the presumption can be rebutted by express words or by necessary implication. Such legislation is described by Sullivan, R., ed., in Driedger on the Construction of Statutes, 3d ed. (London: Butterworths, 1994) at page 522:
The presumption against the retroactive application of the legislation can be rebutted by express words or by necessary implication. All that is required is some sufficient indication that the legislation is meant to apply not only to on-going and future facts but also to facts that are past. [...]
Retroactive legislation often states that it is deemed to come into force or to take effect on a date prior to the date of enactment. Or it may state that it applies to designated facts occurring from or before a particular date or time.
See also Côté, The Interpretation of Legislation in Canada, 3d ed., (Scarborough: Carswell, 2000) at page 150. Section 78.4 provides that the 1996 Act is to apply to matters occurring before a particular date and, specifically, before the coming into force of the 1996 Act. Accordingly, the 1996 Act has retroactive application.
[20] Here, the patent application was filed on December 19, 1989. Being filed after October 1, 1989 but before October 1, 1996, it is to be dealt with and disposed of in accordance with the 1996 Act. Likewise, any matter arising in respect of that patent is to be dealt with in accordance with the 1996 Act.
[21] While this conclusion seems straightforward, Petrolite makes a number of arguments to the contrary. First, it is argued that "any matter arising" must speak as of the date of the coming into force of the 1996 Act. It would apply, for example, to infringement occurring on or after October 1, 1996. However, it is said that in granting the 946 Patent on February 7, 1995, the Patent Commissioner would not have had before him the 1996 Act. Since the question of validity goes to the appropriateness of the granting of the patent, questions of validity must be decided under the 1989 Act.
[22] I see no basis for this selective interpretation of section 78.4. The terms "any matter arising" and "in respect of" are words of the widest scope. In Slattery (Trustee of) v. Slattery, [1993] 3 S.C.R. 430, Iacobucci J., for the majority, refers to the words "in respect of" as they were previously considered by the Supreme Court in Nowegijick v. The Queen, [1983] 1 S.C.R. 29. He states at page 445:
The phrase "in respect of " was considered by this Court in Nowegijick v. The Queen, [1983] 1 S.C.R. 29, at p. 39:
The words "in respect of" are, in my opinion, words of the widest possible scope. They import such meanings as "in relation to", "with reference to" or "in connection with". The phrase "in respect of" is probably the widest of any expression intended to convey some connection between two related subject matters. [Emphasis added by Iacobucci J.]
The words "in respect of" as modified by the comprehensive "any matter arising" could not be more expansive. Parliament obviously contemplated that section 78.4 would be given wide scope. Nothing in the context of the legislation suggests a more restrictive interpretation (see Sarvanis v. Canada, 2002 SCC 28, at paragraph 24). Petrolite's argument simply ignores the plain words of section 78.4.
[23] Petrolite relies on paragraphs 43(a), (b) and (c) of the Interpretation Act, R.S.C. 1985, c. I-21 which it says preclude the retroactive application of the 1996 Act:
43. Where an enactment is repealed in whole or in part, the repeal does not
(a) revive any enactment or anything not in force or existing at the time when the repeal takes effect,
(b) affect the previous operation of the enactment so repealed or anything duly done or suffered thereunder,
(c) affect any right, privilege, obligation or liability acquired, accrued, accruing or incurred under the enactment so repealed,
43. L'abrogation, en tout ou en partie, n'a pas pour conséquence_:
a) de rétablir des textes ou autres règles de droit non en vigueur lors de sa prise d'effet;
b) de porter atteinte à l'application antérieure du texte abrogé ou aux mesures régulièrement prises sous son régime;
c) de porter atteinte aux droits ou avantages acquis, aux obligations contractées ou aux responsabilités encourues sous le régime du texte abrogé;
However, Petrolite has had to acknowledge that these provisions are presumptions only and may be rebutted by express language in a statute, or by necessary implication. Subsection 3(1) of the Interpretation Act provides:
3. (1) Every provision of this Act applies, unless a contrary intention appears, to every enactment, whether enacted before or after the commencement of this Act. [Emphasis added]
3. (1) Sauf indication contraire, la présente loi s'applique à tous les textes, indépendamment de leur date d'édiction. [Je souligne]
Section 78.4 expresses a contrary intention insofar as the 1996 Act is concerned and thus rebut the presumption in section 43.
[24] Petrolite also argues that section 78.4 of the 1996 Act must be read "in congruence with Article 1709(8)(a)" of the NAFTA, and that doing so precludes retroactive application of the anticipation provisions of the 1996 Act. Article 1709(8)(a) provides:
8. A Party may revoke a patent only when:
(a) grounds exist that would have justified a refusal to grant the patent;
[...]
[25] I do not accept this argument for two reasons. First, article 1709(8) is a provision of the NAFTA. The NAFTA has been approved by An Act to Implement the North American Free Trade Agreement, S.C. 1993, c. 44, s. 10. However, this does not give the provisions of the NAFTA themselves the force of an Act of Parliament. I accept that an international treaty may, where relevant, be used to assist in interpreting domestic legislation. See, for example, Baker v. Canada (Minister of Citizenship and Immigration), [1999] 2 S.C.R. 817, at paragraphs 69 and 70. However, the international treaty cannot be used to override the clear words used in a statute enacted by Parliament. Section 78.4 is plain and obvious. Petrolite, I think, is relying on article 1709(8) of the NAFTA to give a restricted meaning to section 78.4 which its words cannot bear.
[26] Second, I do not read the words of article 1709(8) as precluding express retroactive legislation. It is true that the article provides that a patent may be revoked only when grounds exist that would have justified the refusal to grant the patent in the first place. However, the effect of the retroactive application of legislation is to make its provisions applicable as if they had existed at a prior time.
[27] It is true, as Petrolite argues, that some arbitrariness or anomalies may arise through the application of retroactive legislation. However, arbitrariness and anomalies are inherent in retroactive legislation. That is one reason why there is a presumption against interpreting legislation to have retroactive effect. However, the Court must take the statute as it finds it and interpret section 78.4 according to its words. The validity of the 946 Patent is a matter that has arisen in respect of that patent. The patent application was filed in the period referred to in section 78.4. The validity of the 946 Patent must be dealt with and disposed of in accordance with the provisions of the 1996 Act.
THE LAW RELATING TO ANTICIPATION
The Relevant Statutory Provision
[28] The application for the 946 Patent was filed December 19, 1989. According to paragraph 28.2(1)(a) of the 1996 Act, the subject matter defined by the claims in the patent must not have been disclosed prior to December 19, 1988. Paragraph 28.2(1)(a) provides:
28.2 (1) The subject-matter defined by a claim in an application for a patent in Canada (the "pending application") must not have been disclosed
a) more than one year before the filing date by the applicant, or by a person who obtained knowledge, directly or indirectly, from the applicant, in such a manner that the subject-matter became available to the public in Canada or elsewhere;
28.2 (1) L'objet que définit la revendication d'une demande de brevet ne doit pas_:
a) plus d'un an avant la date de dépôt de celle-ci, avoir fait, de la part du demandeur ou d'un tiers ayant obtenu de lui l'information à cet égard de façon directe ou autrement, l'objet d'une communication qui l'a rendu accessible au public au Canada ou ailleurs;
Anticipation by Publication
[29] In Beloit v. Valmet, supra, Hugessen J.A. (as he then was) set out the test for anticipation by publication at page 297:
It will be recalled that anticipation, or lack of novelty, asserts that the invention has been made known to the public prior to the relevant time. The inquiry is directed to the very invention in suit and not, as in the case of obviousness, to the state of the art and to common general knowledge. Also, as appears from the passage of the statute quoted above, anticipation must be found in a specific patent or other published document; it is not enough to pick bits and pieces from a variety of prior publications and to meld them together so as to come up with the claimed invention. One must, in effect, be able to look at a prior, single publication and find in it all the information which, for practical purposes, is needed to produce the claimed invention without the exercise of any inventive skill. The prior publication must contain so clear a direction that a skilled person reading and following it would in every case and without the possibility of error be led to the claimed invention.
The test for anticipation by publication in Beloit, supra, was cited with approval by the Supreme Court of Canada in Free World Trust v. Électro Santé Inc., [2000] 2 S.C.R. 1024, at paragraph 26. In Free World Trust, supra, Binnie J. explains, at paragraph 25, that anticipation by publication is a difficult test to meet because, after an invention has been disclosed, it is all too easy to find its antecedents in bits and pieces of earlier learning:
Anticipation by publication is a difficult defence to establish because courts recognize that it is all too easy after an invention has been disclosed to find its antecedents in bits and pieces of earlier learning. It takes little ingenuity to assemble a dossier of prior art with the benefit of 20-20 hindsight.
Anticipation by Prior Use or Sale
[30] The anticipation in the appeal at bar is about anticipation arising, not from prior publications or patents, but from the prior sale of Petrolite's W-3053 product. Anticipation by prior patents is also argued by Canwell, but it will not be necessary to deal with that argument.
[31] The Patent Act in force in 1986, when Beloit v. Valmet, supra, was decided, provided that anticipation could be proven by the public use or sale of the invention in Canada more than two years prior to the filing of a patent application. Before October 1, 1989, paragraph 27(1)(c) provided:
27. (1) Subject to this section, any inventor or legal representative of an inventor of an invention that was
27. (1) Sous rèserve des autres dispositions du présent article, l'auteur de toute invention ou le représentant légal de l'auteur d'une invention
(a) [...]
(b) [...]
(c) not in public use or on sale in Canada for more than two years prior to his application in Canada
may, on presentation to the Commissioner of a petition setting out the facts, in this Act termed the filing of the application, and on compliance with all other requirements of this Act, obtain a patent granting to him an exclusive property in the invention.
peut, sur présentation au commissaire d'une pétition exposant les faits, appelée dans la présente loi le « dépôt de la demande » , et en se conformant à toutes les autres prescriptions de la présente loi, obtenir un brevet qui lui accorde l'exclusive propriété d'une invention qui n'était pas:
(a) [...]
(b) [...]
(c) en usage public ou en vente au Canada plus de deux ans avant le dépôt de sa demande au Canada.
Under paragraph 27(1)(c), it appears that public use or sale of the invention was sufficient to prove anticipation even if the invention was not thereby disclosed; that is, even if it was not possible to determine the claimed invention, the invention would be anticipated simply by its use or sale. It was, therefore, not necessary, at that time, to prove more than use or sale of the invention in the relevant time period in order to prove anticipation.
[32] As a result of amendments made effective on October 1, 1989, and continued in the 1996 Act, evidence of use or sale of the invention was no longer sufficient in itself to prove anticipation. With the enactment of paragraph 27(1)(d) on October 1, 1989, which was replaced by paragraph 28.2(1)(a) on October 1, 1996, the test for anticipation by any means became disclosure of "the subject matter defined by a patent claim"(the invention) [...] "in such a manner that the subject matter became available to the public in Canada or elsewhere". The change to the legislation, inter alia:
1. reduced the relevant grace period prior to the filing of the patent application;
2. made disclosure anywhere, and not just in Canada, relevant;
3. eliminated use or sale of the invention per se as sufficient evidence of anticipation;
4. as proof of anticipation, required disclosure in such a manner that the invention became available to the public in Canada or elsewhere.
There is little Canadian jurisprudence interpreting paragraph 28.2(1)(a).
[33] At trial, Canwell referred to United Kingdom case law on the subject of anticipation by prior use or sale. The learned Trial Judge refused to engage in an analysis of that law. He was of the opinion that, although specifically referable to anticipation by prior publication, the principles in Beloit v. Valmet, supra, and Free World Trust, supra, were equally applicable to, and exhaustive of, anticipation by prior use or sale. In support of his view, he referred to the judgment of this Court in Diversified Products Corp. v. Tye-Sil Corp. (1991), 35 C.P.R. (3d) 350, at 360:
As was mentioned by Urie J. in Beecham, [...], the defences of prior knowledge, prior use, prior publication and prior sale are "very much intermingled" and are referred to as "anticipation". I have noted throughout the cases that there does not appear to be any distinction in principle between these various defences and that what is said with respect, for example, to anticipation through prior knowledge is applicable, mutatis mutandis, to anticipation through prior publication. [Citation omitted. Emphasis added in reasons of Trial Judge.]
[34] I agree with the learned Trial Judge that the United Kingdom authorities are not of assistance to the extent that they are contrary to the principles relating to anticipation articulated in Beloit v. Valmet, supra, and Free World Trust, supra. This Court is bound by Free World Trust and, to the extent it approved of Beloit v. Valmet, by Beloit. However, the U.K. authorities are useful to give content to the analysis of anticipation by prior use or sale and, to the extent they do not contradict the Canadian jurisprudence, guidance may be sought from such decisions for that purpose.
[35] I accept that, at a broad level, the principles in Beloit v. Valmet, supra, and Free World Trust, supra, relating to anticipation by prior publication are also applicable to anticipation by prior use or sale. For example, the evidence of anticipation by prior public use or sale, as well as by prior publication, should be subjected to close scrutiny. However, below a certain level of generality, the principles governing anticipation by prior publication may need to be tailored to fit the particular characteristics of anticipation by prior public use or sale. For example, the principle that the prior publication must contain so clear a direction that a skilled person reading and following it would be led, without error, to the invention claimed, applies to the specific context of prior publication. In the case of prior publication, the skilled person will read the publication. In the case of prior use or sale, reading may not be relevant. When faced with having to decide whether there has been anticipation by disclosure through prior use or sale under paragraph 28.2(1)(a), it is necessary for the Court to have regard to the circumstances of prior use or sale, in order to determine how a person skilled in the art might be led, without error, to the invention claimed. For example, was there an analytical method available at the relevant time to lead a skilled person to the invention? The United Kingdom authorities provide useful guidance in this respect.
[36] The United Kingdom authorities are also useful for another purpose. As indicated, although there is little Canadian jurisprudence interpreting paragraph 28.2(1)(a) of the 1996 Act, there is considerable United Kingdom jurisprudence interpreting provisions of the Patents Act, 1977 (U.K.), 1977, c. 37, that are, in their substance, similar to paragraph 28.2(1)(a). Courts in the United Kingdom have had occasion to deal with cases of anticipation by prior use or sale under section 2 of the United Kingdom Act and those authorities will be instructive in assisting in the interpretation of paragraph 28.2(1)(a) of the Canadian Act.
Principles Derived from United Kingdom and European Authorities with respect to Anticipation by Prior Use or Sale
[37] I turn then to the United Kingdom authorities. I shall also have regard to decisions made under the European Patent Convention because it contains provisions similar to the United Kingdom Patents Act, 1977. Courts in the United Kingdom appear to be guided by decisions under the European Patent Convention and I see no reason why, where this Court finds the United Kingdom authorities of assistance and the European legislation is similar, it may not also seek guidance from the European decisions.
[38] The United Kingdom Patents Act, 1977 contains provisions that are similar in effect to paragraph 28.2(1)(a) of the 1996 Act. Subsection 2(1) of the United Kingdom Patents Act, 1977 provides that an invention is to be taken as novel if it does not form part of the state of the art. Subsection 2(2) defines the state of the art as comprising all matter which has been made available to the public in any way:
2(1) An invention shall be taken to be new if it does not form part of the state of the art.
2(2) The state of the art in the case of an invention shall be taken to comprise all matter (whether a product, a process, information about either, or anything else) which has at any time before the priority date of that invention been made available to the public (whether in the United Kingdom or elsewhere) by written or oral description, by use or in any other way. [Emphasis added]
The European Patent Convention contains similar provisions.
54(1) An invention shall be considered to be new if it does not form part of the state of the art.
(2) The state of the art shall be held to comprise everything made available to the public by means of a written or oral description, by use, or in any other way, before the date of filing of the European patent application. [Emphasis added]
[39] The words employed in the United Kingdom and European legislation are similar, in effect, to the words in paragraph 28.2(1)(a) of the 1996 Act:
The subject matter [...] must not have been disclosed [...] in such a manner that the subject matter became available to the public in Canada or elsewhere;
[40] While conceding that the United Kingdom and European legislation is similar to the 1996 Act on this issue, Petrolite argues that a significant difference is that the former (United Kingdom and European) use the term "made available to the public" while the latter (Canadian) uses the term "became available to the public". If I understand the argument, it is that "made available" implies "on the shelf" or, in other words, that the information could be available to the public. On the other hand, "became available" implies that the public was, in fact, in possession of the information. It is argued that the difference means that reverse engineering is permitted in the United Kingdom and Europe but not under Canadian law or, at least, that if reverse engineering is permitted under Canadian law, it must, in fact, have been performed more than one year before the filing date of the patent.
[41] I am unable to agree with Petrolite's argument. Whether information is made available or became available, it is available. Whether information is considered "available" if it is only ascertainable through reverse engineering is a question for determination. But that is so under either the "made available" or "became available" terminology. I see no material distinction between the terms "made available" or "became available" in the context of this case.
[42] For the purposes of analyzing anticipation in the context of disclosure by prior sale or use under paragraph 28.2(1)(a) and without detracting from the general principles in Beloit v. Valmet, supra, and Free World Trust, supra, I deduce the following principles relevant to this appeal from the United Kingdom and European Patent Office jurisprudence:
1. Sale to the public or use by the public alone is insufficient to prove anticipation. Disclosure of the invention is required to constitute anticipation under paragraph 28.2(1)(a). In Merrell Dow Pharmaceuticals Inc. v. H.N. Norton & Co. Ltd., [1996] R.P.C. 76 (H.L.), Lord Hoffmann found that use of a product makes an invention part of the state of the art, i.e. equivalent to disclosure, only so far as that use makes available the information which describes the invention. At page 86, he stated:
[...] to be part of the state of the art, the invention must have been made available to the public. An invention is a piece of information. Making matter available to the public within the meaning of section 2(2) therefore requires the communication of information. The use of a product makes the invention part of the state of the art only so far as that use makes available the necessary information. [Emphasis in italics in original] [Other emphasis added]
2. For a prior sale or use to anticipate an invention, it must amount to "enabling disclosure". In Merrell Dow, supra, at page 87, Lord Hoffmann quoted with approval the statement of Aldous J. in PLG Research Ltd. v. Ardon International Ltd., [1993] 1 F.S.R. 197, at 225:
Under the 1977 Act, patents may be granted for an invention covering a product that has been put on the market provided the product does not provide an enabling disclosure of the invention claimed. In most cases, prior sale of the product will make available information as to its contents and its method of manufacture, but it is possible to imagine circumstances where that will not happen. [Emphasis added]
In Lux Traffic Controls Limited v. Pike Signals Limited and Faronwise Limited, [1993] R.P.C. 107, Aldous J. stated at page 133:
It is settled law that to invalidate a patent a disclosure has to be what has been called an enabling disclosure. That is to say the disclosure has to be such as to enable the public to make or obtain the invention. [Emphasis added]
3. The prior sale or use of a chemical product will constitute enabling disclosure to the public if its composition can be discovered through analysis of the product. The Board of Appeal for the European Patent Office in Fisons PLC v. Packard Instrument BV, E.P.O. case number T0952/92-3.4.1, August 17, 1994, stated at page 21:
[...] in the Board's view it is the fact that direct and unambiguous access to information concerning the composition or internal structure of a prior used product is possible, for example by means of analysis, which makes such composition or internal structure "available to the public" and thus part of the state of the art for the purpose of Article 54 (2) EPC. [Emphasis added]
4. The analysis must be able to be performed by a person skilled in the art in accordance with known analytical techniques available at the relevant time. In Fisons v. Packard, supra, the Board of Appeal stated at page 21:
If such an analysis is possible in accordance with the known analytical techniques which were available for use by a skilled person before the relevant filing date, the composition or internal structure thereby is available to the public. [Emphasis added]
This principle, in the context of enabling disclosure arising from prior use or sale, must be applied consistently with this Court's determination respecting prior publication in Beloit v. Valmet, supra. The person skilled in the art, using available analytical techniques, must be able to find the invention without the exercise of inventive skill.
5. In the context of patent anticipation under paragraph 28.2(1)(a), when reverse engineering is necessary and capable of discovering the invention, an invention becomes available to the public if a product containing the invention is sold to any member of the public who is free to use it as she or he pleases. In Bristol Myers Company ‘s application, [1969] R.P.C. 146 (Q.B.), Lord Parker C.J. stated at page 155:
[...] if the information [...] has been communicated to a single member of the public without inhibiting fetter that is enough to amount to a making available to the public [...] [Emphasis added]
In Lux, supra, Aldous J. stated at page 134:
In the present case, a light system with a prototype controller was on a number of occasions made available to contractors over five months. Those contractors were free in law and equity to examine it. [Emphasis added]
It makes sense that sale of a product to even one member of the public constitutes a making available to the public for purposes of paragraph 28.2(1)(a). The value of the patent that is sought lies in the secrecy of its subject matter. Providing enabling disclosure to even one member of the public destroys this secrecy. The grant of a patent depends on the inventor giving to the public something it did not have before. If the public already has it, then the inventor gives nothing and is not entitled to anything in return, i.e. a monopoly for a period of years. (See Free World Trust, supra, at paragraph 13.)
6. It is not necessary to demonstrate that a member of the public actually analyzed the product that was sold. In Lux, supra, Aldous J. stated at page 133:
Further it is settled law that there is no need to prove that anyb