Apotex Inc. v. Pfizer Inc.

Apotex Inc. v. Pfizer Inc.
Court (s) Database
Federal Court of Appeal Decisions
Date
2017-10-02
Neutral citation
2017 FCA 201
File numbers
A-78-16
Notes
A correction was made on July 19, 2019.
Reported Decision
Decision Content
Date: 20171002
Docket: A-78-16
Citation: 2017 FCA 201
CORAM:
GAUTHIER J.A.
STRATAS J.A.
BOIVIN J.A.
BETWEEN:
APOTEX INC.
Appellant
And
PFIZER INC., PHARMACIA AKTIEBOLAG AND
PFIZER CANADA INC.
Respondents
Heard at Toronto, Ontario, on February 22, 2017.
Judgment delivered at Ottawa, Ontario, on October 2, 2017.
REASONS FOR JUDGMENT BY:
GAUTHIER J.A.
CONCURRED IN BY:
STRATAS J.A.
BOIVIN J.A.
Date: 20171002
Docket: A-78-16
Citation: 2017 FCA 201
CORAM:
GAUTHIER J.A.
STRATAS J.A.
BOIVIN J.A.
BETWEEN:
APOTEX INC.
Appellant
and
PFIZER INC., PHARMACIA AKTIEBOLAG AND
PFIZER CANADA INC.
Respondents
REASONS FOR JUDGMENT
GAUTHIER J.A.
[1] This is an appeal of the decision of Diner J. of the Federal Court dismissing Apotex Inc.’s (Apotex) motion for partial summary judgment. Apotex contended that the respondents’ failure to pay the proper application fee for the issuance of Canadian Patent No. 1,339,132 (the 132 Patent) invalidated the patent. The Federal Court disagreed: 2016 FC 136, [2017] 1 F.C.R. 3. Apotex appeals.
[2] The facts relevant to this appeal are not in dispute. The main issue before us is the interpretation of various provisions of the Patent Act, R.S.C. 1985, c. P-4, as it existed on September 30, 1989 (the 1989 Act). This version of the Patent Act applies given the time of the application for the patent and its issuance. The parties have agreed that the issue can be properly determined by way of summary judgment.
[3] The version of the Patent Act at issue is important because both parties relied on case law that involved a later version of the Patent Act and the applicable Patent Rules, C.R.C., c. 1250 (as of June 1989) (the 1989 Rules) (see Book of Authorities, Vol. 1, tab 7). They also refer to amendments adopted since 1989. This even includes the latest amendment (not yet in force) in the Economic Action Plan 2014 Act, No. 2, S.C. 2014, c. 39 (Economic Action Plan Act), which makes it clear that non-payment of fees payable before the issuance of a patent will not invalidate the said patent (Economic Action Plan Act, s. 138).
[4] This is the first and most likely the last case involving section 73 of the 1989 Act. It is always dangerous and often inappropriate to consider amendments post-dating the version of the statute under review (Interpretation Act, R.S.C. 1985, c. I-21, s. 45). In fact, I believe that this resulted in the Federal Court adopting an incorrect approach in its interpretation of section 73 of the 1989 Act. It referred to a later version of section 73 of the Patent Act (R.S.C. 1985, c. P-4, s. 73, as am. by Intellectual Property Law Improvement Act, S.C. 1993, c. 15, s. 52) and to the Patent Rules, S.O.R./96-423 enacted in 1996. However, as will be seen, this error does not mean that its judgment was wrong in law.
[5] For the reasons that follow, I am of the view that the appeal should be dismissed.
I. Factual Background
[6] On September 12, 1989, the application that ultimately resulted in the issuance of the 132 Patent was filed. At the time, the applicant did not claim small entity status (see 1989 Rules, Sch. I, Form 1 and the petition filed (Appeal Book, Vol. 3, p. AB0494)). The then applicable fee payable as a large entity in the amount of $300.00 was submitted at the same time as the $100.00 payable to file an assignment (see 1989 Rules, Sch. II and the cover letter of the petition (Appeal Book, Vol. 3, p. AB0493)).
[7] There is no evidence that the status of the applicant was changed at any time before the issuance of the patent by filing a Form 30 (see 1989 Rules, Sch. I). In fact, it appears, and this is not disputed, that except for the final fee to be paid once the Notice of Allowance was issued, all the prescribed fees in respect of the application and the maintenance of the 132 Patent until its expiration in 2014 were paid on the basis that the applicant (this includes its successors in title) was a large entity as per the relevant Patent Rules.
[8] One will never know exactly how the errors occurred, but after receiving the Notice of Allowance in November 1996, the patent agent paid a fee of $300.00. This was an error. The final fee payable was $700.00 for applications filed by large entities prior to October 1, 1989. Then, on April 18, 1997, the patent agent wrote to the Patent Office to say that due to a clerical error only $300.00 had been paid and an additional $50.00 (at the time the applicable final fee for a small entity on an application filed before October 1, 1989, was $350.00) was included.
[9] Despite the expert evidence and the witnesses examined, and given the status of the applicant that should have been recorded in the Patent Office at the relevant time (i.e. large entity), it is not clear why the Patent Office accepted the $350.00 fee as full payment. Whatever the reason, the Commissioner of Patents (the Commissioner) issued the 132 Patent on July 29, 1997.
[10] After subsection 78.6(1) of the Patent Act (see Appendix) came into force on February 1, 2006, patentees had twelve months to correct past payment errors. The applicant did not correct these errors by the end of the twelve month period. After receiving from the Patent Office a list of all patents which may require a top-up payment under section 78.6, the patent agent was instructed by the patentee to ensure that any additional fees due as a large entity should be paid forthwith. Rather than forwarding an additional payment, the patent agent wrote to the Patent Office stating: “Pursuant to 78.6 of the Patent Act, be advised that the entity status of this patent is large. Confirmation of this fact would be appreciated.” Although it may be that the agent thought that the prescribed fee had been paid in full given that the status of the applicant since the filing of the petition was that of a large entity, there is no real explanation as to why the said agent did not discover that he had not paid the correct amount of the final fee due on receipt of the Notice of Allowance. When examined in 2014, he had no recollection of this file and most of his file had been destroyed sometime in 2002. Rather than clarifying why the 132 Patent was on the list of patents sent to the patent agent given that it was always a large entity, the Patent Office acknowledged receipt of payment as a large entity and that their record had been amended to indicate this status. Again two mistakes.
[11] In the end result, the proper application fee payable back in 1997 was never paid and the Federal Court so found (Federal Court Reasons at para. 37).
[12] The motion for partial summary judgment before the Federal Court arose in the context of a proceeding under section 8 of the Patented Medicines (Notice of Compliance) Regulations, S.O.R./93-133, instituted by Apotex on June 14, 2013, to claim damages resulting from the delay in obtaining its Notice of Compliance for a product which allegedly infringed the 132 Patent. In their statement of defence and counterclaim filed in response to the said section 8 proceedings, the respondents allege, among other things, that Apotex had been infringing the 132 Patent. Apotex defended the counterclaim, alleging that the 132 Patent is invalid for various reasons. One reason it asserted was the failure to pay the proper application fee.
II. Issue
[13] As mentioned, there is only one question before us: whether or not the Federal Court erred when it found that the failure to pay the proper application fee does not invalidate the 132 Patent.
[14] This is a question of law reviewable on the standard of correctness (Housen v. Nikolaisen, 2002 SCC 33 at para. 8, [2002] 2 S.C.R. 235).
III. Positions of the Parties
[15] Apotex says that the Commissioner of Patents did not have the power to issue the 132 Patent. The Commissioner could only issue the patent when all the requirements for issuing a patent under the 1989 Act had been met (section 27). Apotex contends that as the proper application fee had not been paid in full, as a matter of law under subsection 73(1) of the 1989 Act, the application was forfeited as of May 19, 1997. This is a fact or default on which Apotex can rely as a defence against allegations of infringement within the meaning of section 59 of the 1989 Act because it renders the 132 Patent void. In support of this contention, Apotex relies heavily on the reasoning of this Court in Dutch Industries Ltd. v. Canada (Commissioner of Patents), 2003 FCA 121, [2003] 4 F.C.R. 67 (leave to appeal to S.C.C. refused, 29738 (December 11, 2003)) (Dutch).
[16] The respondents urge us to be guided by the reasoning of this Court in Weatherford Canada Ltd v. Corlac Inc., 2011 FCA 228, 422 N.R. 49 (leave to appeal to S.C.C. refused, 34459 (March 29, 2012)) (Weatherford). Weatherford concerned whether an applicant’s error in fulfilling a requirement for a patent application under section 73 (as it stood in 1996) (see Appendix) can be considered a “fact or default” (section 59) an alleged infringer could rely upon as a defence to infringement after a patent has issued. Interpreting section 73 (as it stood in 1996) purposively, the Court found that the legislator did not intend such fact or default to void a patent. In reaching this conclusion, the Court relied on what it considered a long line of cases which refused to consider various acts or defaults during the prosecution of the application, i.e., the pre-patent issuance period, as acts or defaults that can be relied upon in an infringement action or a counterclaim seeking to invalidate a patent (Lovell Manufacturing Co. v. Beatty Bros. Ltd. (1962), 41 C.P.R. 18 at 40 (Ex. Ct.); Bourgault Industries Ltd. v. Flexi-Coil Ltd. (1999), 237 N.R. 74 at para. 31, 86 C.P.R. (3d) 221 (F.C.A.), leave to appeal to S.C.C. refused, 27273 (March 23, 2000); Procter and Gamble Co. v. Beecham Canada Ltd.(1982), 40 N.R. 313 at paras. 68-69, 61 C.P.R. (2d) 1 (F.C.A.), leave to appeal to S.C.C. refused, 16993 (May 10, 1982) (Procter and Gamble); Merck & Co., Inc. v. Apotex Inc., 2006 FCA 323 at para. 47, [2007] 3 F.C.R. 588, leave to appeal to S.C.C. refused, 31754 (May 10, 2007)).
[17] Apotex points out that Weatherford was based on a different pre-patent issuance error, i.e., a different branch of section 73. Thus, it should be distinguished. Alternatively, at paragraph 90 in its memorandum, Apotex submits that this Court should overrule Weatherford based on Miller v. Canada (Attorney General), 2002 FCA 370, 220 D.L.R. (4th) 149 (leave to appeal to S.C.C. refused, 29501 (April 17, 2003)) (Miller). Apotex did not pursue this submission in oral argument at the hearing. In any event, I can summarily reject this submission. Apotex did not meet its burden of establishing that Weatherford was “manifestly wrong, in the sense that the Court overlooked a relevant statutory provision, or a case that ought to have been followed” (Miller at para. 10).
[18] In oral argument at the hearing, neither party asked this Court to overrule any other cases. Rather, faced with authorities against their positions, they submitted that they be distinguished on their facts. It is worth noting that none of the cases, particularly Dutch and Weatherford, dealt with subsection 73(1) of the 1989 Act. Where the parties differ is on the relevance to the case before us of the reasoning adopted in each of those decisions. Assessing this is the task of the Court in this appeal.
[19] We have before us a question of law and so correctness is the standard of review. I will proceed with my own analysis of the relevant provisions of the 1989 Act and the most salient authorities relied upon by the parties.
IV. Legislative Provisions
[20] The most relevant provisions of the 1989 Act read as follows:
[…]
[…]
APPLICATION FOR PATENTS
DEMANDES DE BREVETS
Who may obtain patents
Qui peut obtenir des brevets
27. (1) Subject to this section, any inventor or legal representative of an inventor of an invention that was
27. (1) Sous réserve des autres dispositions du présent article, l’auteur de toute invention ou le représentant légal de l’auteur d’une 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) not known or used by any other person before he invented it,
a) connue ou utilisée par une autre personne avant que lui-même l’ait faite;
(b) not described in any patent or in any publication printed in Canada or in any other country more than two years before presentation of the petition hereunder mentioned, and
b) décrite dans un brevet ou dans une publication imprimée au Canada ou dans tout autre pays plus de deux ans avant la présentation de la pétition ci-après mentionnée;
(c) not in public use or on sale in Canada for more than two years prior to his application in Canada,
c) en usage public ou en vente au Canada plus de deux ans avant le dépôt de sa demande au 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.
[EN BLANC]
Applications for patents out of Canada
Demandes de brevets à l’étranger
(2) Any inventor or legal representative of an inventor who applies in Canada for a patent for an invention for which application for patent has been made in any other country by that inventor or his legal representative before the filing of the application in Canada is not entitled to obtain in Canada a patent for that invention unless his application in Canada is filed, either
(2) Un inventeur ou représentant légale d’un inventeur, qui a fait une demande de brevet au Canada pour une invention à l’égard de laquelle une demande de brevet a été faite dans tout autre pays par cet inventeur ou par son représentant légal avant le dépôt de sa demande au Canada, n’a pas le droit d’obtenir au Canada un brevet couvrant cette invention sauf si sa demande au Canada est déposée :
(a) before issue of any patent to that inventor or his legal representative for the same invention in any other country, or
a) soit avant la délivrance d’un brevet à cet inventeur ou à son représentant légal couvrant cette même invention dans tout autre pays;
(b) if a patent has issued in any other country, within twelve months after the filing of the first application by that inventor or his legal representative for patent for that invention in any other country.
b) soit, si un brevet a été délivré dans un autre pays, dans un délai de douze mois à compter du dépôt de la première demande, par cet inventeur ou son représentant légal, d’un brevet pour cette invention dans tout autre pays.
What may not be patented
Ce qui n’est pas brevetable
(3) No patent shall issue for an invention that has an illicit object in view, or for any mere scientific principle or abstract theorem.
(3) Il ne peut être délivré de brevet pour une invention dont l’objet est illicite, non plus que pour de simples principes scientifiques ou conceptions théoriques.
[…]
[…]
LEGAL PROCEEDINGS IN RESPECT OF PATENTS
PROCÉDURES JUDICIAIRES RELATIVES AUX BREVETS
Void in certain cases, or valid only for parts
Nul en certains cas, ou valide en partie seulement
53. (1) A patent is void if any material allegation in the petition of the applicant in respect of the patent is untrue, or if the specification and drawings contain more or less than is necessary for obtaining the end for which they purport to be made, and the omission or addition is wilfully made for the purpose of misleading.
53. (1) Le brevet est nul si la pétition du demandeur, relative à ce brevet, contient quelque allégation importante qui n’est pas conforme à la vérité, ou si le mémoire descriptif et les dessins contiennent plus ou moins qu’il n’est nécessaire pour démontrer ce qu’ils sont censés démontrer, et si l’omission ou l’addition est volontairement faite pour induire en erreur.
Exception
Exception
(2) Where it appears to a court that the omission or addition referred to in subsection (1) was an involuntary error and it is proved that the patentee is entitled to the remainder of his patent, the court shall render a judgment in accordance with the facts, and shall determine the costs, and the patent shall be held valid for that part of the invention described to which the patentee is so found to be entitled.
(2) S’il apparaît au tribunal que pareille omission ou addition est le résultat d’une erreur involontaire, et s’il est prouvé que le breveté a droit au reste de son brevet, le tribunal rend jugement selon les faits et statue sur les frais. Le brevet est réputé valide quant à la partie de l’invention décrite à laquelle le breveté est reconnu avoir droit.
Copies of judgment
Copies du jugement
(3) Two office copies of the judgment rendered under subsection (1) shall be furnished to the Patent Office by the patentee, one of which shall be registered and remain of record in the Office and the other attached to the patent and made a part of it by a reference thereto.
(3) Le breveté transmet au Bureau des brevets deux copies authentiques de ce jugement. Une copie en est enregistrée et conservée dans les archives du Bureau, et l’autre est jointe au brevet et y est incorporée au moyen d’un renvoi.
[…]
[…]
INFRINGEMENT
CONTREFAÇON
[…]
[…]
Defence
Défense
59. The defendant, in any action for infringement of a patent may plead as matter of defence any fact or default which by this Act or by law renders the patent void, and the court shall take cognizance of that pleading and of the relevant facts and decide accordingly.
59. Dans toute action en contrefaçon de brevet, le défendeur peut invoquer comme moyen de défense tout fait ou manquement qui, d’après la présente loi ou en droit, entraîne la nullité du brevet; le tribunal prend connaissance de cette défense et des faits pertinents et statue en conséquence.
[…]
[…]
FORFEITURE AND RESTORATION OF APPLICATIONS
DÉCHÉANCE ET RÉTABLISSEMENT DES DEMANDES
Forfeiture of applications
Déchéance des demandes
73. (1) Where the prescribed fees stated to be payable in a notice of allowance of patent are not paid within six months from the date of the notice, the application for patent is thereupon forfeited.
73. (1) Lorsque les taxes réglementaires déclarées être payables dans un avis d’acceptation de brevet ne sont pas acquittées dans un délai de six mois à compter de la date de l’avis, la demande de brevet est alors frappée de déchéance.
Restoration
Rétablissement
(2) A forfeited application may be restored and a patent granted thereon on application to the Commissioner within six months from the incurrence of the forfeiture, on payment with the application for restoration, in addition to the fees payable on the grant of the patent, of a further prescribed fee.
(2) Une demande frappée de déchéance peut être rétablie, et un brevet peut être accordé en conséquence sur requête adressée au commissaire dans un délai de six mois à compter du moment de la déchéance, sur versement, lors de la demande de rétablissement, outre les taxes exigibles à la concession du brevet, d’une taxe réglementaire additionnelle.
Idem
Idem
(3) A restored application is subject to amendment and re-examination.
(3) Une demande rétablie est sujette à modification et à nouvel examen.
[…]
[…]
V. Analysis
[21] At the outset, I wish to say more about the decisions of this Court in Dutch and Weatherford.
A. Dutch
[22] In Dutch, when the patent application No. 2,146,904 (the 904 application) was filed in April 1995, the applicant paid the application filing fees on the basis that it was a small entity. This was in error: all the parties acknowledged that the applicant could not claim it had a small entity status as of November 25, 1994 (Dutch at para. 18).
[23] Dutch arose on an application for judicial review of a decision of the Commissioner to accept a top-up payment and effectively reinstate the application (Dutch at para. 20).
[24] The appeal also involved a second issue regarding Patent No. 2,121,388 (the 388 Patent), in respect of which, the application was filed in April 1994 claiming a small entity status (Dutch at paras. 10, 12). With respect to 388 Patent, it was admitted that, at the time, the applicant did meet the definition of “small entity”.
[25] Considering the prescribed form for the petition (hereinafter called the application) to be filed at the relevant times (see Patent Rules, Sch. I, Form 1), the applicant in respect of both patent applications would have had to make a declaration in respect of its status as a small entity in the application.
[26] Despite the change in status as of November 25, 1994, all fees applicable to the 388 Patent both before and after its issuance were all paid at the rate applicable to a small entity (Dutch at paras. 12, 47). The Patent Office was not advised of any change in status until March 29, 2000 (Dutch at para. 18).
[27] It was argued that the Commissioner could not amend the Patent Office records upon receipt of a top-up payment made in 2000 because by that time, the application for the 388 Patent had become abandoned by the operation of law due to partial payment of the maintenance fees in 1995 (Dutch Industries Ltd. v. Canada (Commissioner of Patents), 2001 FCT 879 at para. 13, [2002] 1 F.C.R. 325). It was further argued that, in any event, the patent had expired in accordance with subsection 46(2) of the Patent Act (see Appendix), which provides that when fees for the maintenance of a patent are not paid within the time prescribed, the term of the patent shall be deemed to have expired at the end of that time.
[28] Thus, with respect to the failure to pay the proper maintenance fees applicable to both the 904 application and the application for the 388 Patent, the Court had to construe paragraph 73(1)(c) as it appeared in the newer version of the Patent Act (see Appendix). It differs from section 73 of the 1989 Act.
[29] This Court had no difficulty concluding that paragraph 73(1)(c) applied to the 904 application. The said application was deemed abandoned and had not been reinstated within the time provided for in the Patent Act. Thus, the Commissioner had no authority to amend its record and accept the top-up payment as a corrective payment (Dutch at paras. 48-49).
[30] With respect to the application for the 388 Patent and the patent itself, the Court construed the Patent Rules purposively and concluded that once an applicant properly filed its application as a small entity, it retained that status throughout the prosecution and thereafter (Dutch at para. 46). Thus, the application for the 388 Patent was never deemed abandoned, nor did the 388 Patent lapse, for the prescribed maintenance fees had been paid in full at all relevant times (Dutch at para. 47).
[31] Thus, the Court did not have to determine what would have been the effect of the failure to pay the maintenance fee of the application for the 388 Patent on the validity of the 388 Patent. Sharlow J.A. for this Court wrote in obiter that a failure to pay a maintenance fee could have catastrophic consequences (Dutch at para. 43). Parliament took notice: in 2005, it quickly adopted subsection 78.6(1) of the Patent Act (An Act to amend the Patent Act, S.C. 2005, c. 18, s. 2). This provision deals with the failure to pay large-entity fees for applications and patents (see Appendix: Patent Act, s. 46). Since then, further amendments have been adopted but are not in force yet (Economic Action Plan Act, s. 138).
[32] Be that as it may, this obiter does not change the fact this Court in Dutch did not have to deal with the validity of the 388 Patent, having found that the proper fee had been paid prior to its issuance. This Court effectively reversed the Federal Court’s findings in respect of the 388 Patent.
[33] Finally, I ought to note that in Dutch, the Commissioner argued that it was entitled to rely on an applicant’s declaration that it was a “small entity” (Dutch at para. 16). As mentioned, an applicant must claim a small entity status in the application (Patent Rules, Sch. I, Form 1). Thus, the Commissioner’s reliance on such a statement makes sense when one considers that an untrue statement in the petition (i.e., application) is subject to the application of section 53 of the Patent Act (same as section 53 of the 1989 Act).
[34] In the present case, the applicant made no untrue statement in its application for the 132 Patent. Its status as a large entity was not misrepresented and it never changed.
[35] Also, section 59 of the 1989 Act was not in play in Dutch, considering the type of proceeding involved – a judicial review instituted shortly after the decision under review was made.
B. Weatherford
[36] In Weatherford, our Court was dealing with an appeal of a decision of the Federal Court in respect of an infringement action and a counterclaim challenging the validity of the Patent No. 2,095,937 (the 937 Patent).
[37] As in Dutch, the patent application for the 937 Patent was filed after October 1, 1989 (Weatherford at para. 14). The 937 Patent issued in December 1998 (Weatherford at para. 1). Thus, the relevant provisions of the Patent Act, particularly section 73, were not the same as those that apply in the present appeal.
[38] However, paragraphs 130 to 151 of our Court’s reasons in Weatherford are relevant here. In these paragraphs, the Court addresses the issue whether the alleged infringer could rely on paragraph 73(1)(a) of the Patent Act, as it then read, to invalidate the 937 Patent.
[39] Although many paragraphs of this version of section 73 deal with the failure to pay various fees prior to the issuance of a patent, the paragraph of section 73 at issue in Weatherford provides that the application will be deemed abandoned if the applicant does not reply in good faith to any requisition by an examiner within the prescribed time period.
[40] Layden-Stevenson J.A., writing for our Court, applied the modern principles of statutory interpretation (Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27, 154 D.L.R. (4th) 193) (Rizzo). In particular, she examined the scheme of the Act and its objects, and read section 73 in its context among the other provisions of the Act, particularly section 53. Section 53 deals with untrue statements in an application and misrepresentations in a specification and their impact on the validity of issued patents. She reviewed case law where our Court has consistently distinguished between applications for patents and issued patents (Weatherford at para. 145). She considered the issuance of a patent as a significant moment such that paragraph 73(1)(a) spoke only during the prosecution of the application, not afterward. In her view, once the patent issues, paragraph 73(1)(a) no longer operates to affect the issued patent (Weatherford at para. 150). She considered the decision of our Court in Dutch and distinguished it, finding that it was not dealing with the validity of a patent. Thus, in her view, Dutch did not support the position that paragraph 73(1)(a) could be relied upon to invalidate the patent (Weatherford at para. 151).
[41] I agree with Layden-Stevenson J.A.’s treatment of Dutch and of the other authorities referred to in paragraph 151 of her reasons. As I do not find any other cases relied upon by Apotex to be of assistance, I will not discuss them in these reasons.
C. Can Apotex rely on subsection 73(1) in the 1989 Act as a fact or default under this Act that renders the patent void pursuant to section 59 in the 1989 Act?
[42] Our task is to construe the relevant words of the 1989 Act “in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the [statute]”, its objects and the intention of the legislator (Rizzo at para. 21).
[43] The ordinary meaning of the words in subsection 73(1) would normally cover situations where the prescribed fees for the patent application were not paid at all or were not paid in full, voluntarily or through an inadvertent error. However, the provision does not expressly deal with its impact on a patent issued, especially when it results from inadvertent mutual mistakes (i.e., mistakes on the part of the applicant as well as the Patent Office).
[44] I note that on such literal interpretation of this provision, if the payment in respect of the 132 Patent application had been made, let’s say within a month or two of the receipt of the Notice of Allowance, and the patent issued prior to the expiration of the six months provided for in subsection 73(1), the application would not have become forfeited before such issuance even if the payment was not made in full. Thus, to include mutual mistakes that result in the issuance of a patent could result in inconsistent consequences depending on whether the patent issues before the end of the six months or not. This appears unfair.
[45] Having considered the legislative evolution of subsection 73(1) of the 1989 Act, it becomes clearer that the object of this provision was to provide a tool for the Commissioner to collect fees. It first appeared as a note in the Tariff of Fees, then included in the statute, when Parliament decided in 1923 to lessen the financial burden required when filing an application for a patent (see Appendix: The Patent Act, S.C. 1923, c. 23, the relevant portion of s. 43) (the 1923 Act). Until then, upon filing the application, the applicant had to pay upfront the fees for the duration of the patent he was seeking (see Appendix: Patent Act, R.S.C. 1906, c. 69, s. 47) (the 1906 Act). Like maintenance fees for patent applications and for patents, it was also a means for getting rid of “deadwood”.
[46] When the Tariff of Fees was transferred to the Patent Rules later on, the note became subsection 73(1). This legislative evolution also explains why one finds this provision at the end of the 1989 Act just before the sections dealing with offences and punishment.
[47] Reading subsection 73(1) in the context of subsection 73(2), I first note that the words “may be restored and a patent granted” in subsection 73(2) suggest that the legislator did not envisage that section 73 would be relevant where a patent already issued. Second, it is clear that the legislator wanted to give a real opportunity to an applicant to rectify a failure to pay the prescribed fees within six months after the forfeiture. If a patent issues because of inadvertent mutual mistakes before the end of the period set out to restore the application, there is no realistic opportunity to discover that the fees were not properly paid. It is difficult to see how voiding the patent issued will help achieve the legislator’s intent to provide a cure in the pre-patent issuance period. The object of this provision is not particularly helpful to support the view put forth by Apotex.
[48] Now, considering the broader context, did the legislator intend that an alleged infringer be able to raise a default like the one before us, which occurred prior to the issuance of the patent and does not come within the ambit of section 53? Are we in the presence of a “fact or default which by this Act or by law renders the patent void” under section 59?
[49] Apotex’s answer to these questions is simple. It cites subsection 27(1) of the 1989 Act. That subsection provides that an “inventor […] may, on presentation to the Commissioner of a petition setting out the facts […] and on compliance with all other requirements of this Act, obtain a patent granting to him an exclusive property in the invention” (my emphasis). Section 59 of the 1989 Act provides that when defending an infringement action, a defendant “may plead […] any fact or default which by this Act or by law renders the patent void.” Thus, on Apotex’s view of the matter, any failure to meet any requirement of the Act, including the Patent Rules pursuant to subsection 12(2) of the 1989 Act (see Appendix) will render a patent void.
[50] In my view, the wording of section 59 is not as clear as Apotex suggests. One must go beyond the text of a legislative provision and consider the context of the legislative provision and the legislative purpose (Rizzo). This is so even if the words of the legislative provision seem clear (ATCO Gas & Pipelines Ltd. v. Alberta (Energy and Utilities Board), 2006 SCC 4 at para. 48, [2006] 1 S.C.R. 140) (ATCO). Once context and purpose are considered, subsection 27(1) of the 1989 Act does not mean that any failure to meet any requirement of the Act renders the patent void.
[51] The simple and literal approach advocated by Apotex to sections 27 and 59 is attractive, but in my view, it leads to an absurd result and disregards the scheme and object of the Act, and the true purpose of those provisions. This Court, in Weatherford (at para. 150) and Dutch (at paras. 41-42), made it clear that an interpretation leading to absurd results should be avoided if at all possible, considering the importance of patents and the catastrophic consequences that a purely literal interpretation would lead to. In Dutch, this led our Court to greatly restrict the type of cases in which the version of section 73 of the Patent Act at issue could apply (no change in the status of an entity after the filing).
[52] As noted in Weatherford (at para. 142), this Court has consistently construed the facts and defaults that can be raised by an alleged infringer as those relating to the patentability of the invention by the person seeking the patent and those set out in section 53 of the 1989 Act, or in similar provisions in previous versions of the patent legislation dealing expressly with the nullity or voidance of patents.
[53] Here, I ought to mention that the wording of section 59 of the 1989 Act has been in every version of the patent legislation since 1869, when the first Canadian statute was adopted after the Confederation to deal with patents for invention (see Appendix: An Act respecting Patents of Invention, S.C. 1869, c. 11, s. 26 (the 1869 Act); 1906 Act, s. 34).
[54] In substance, section 59 has been on the books since 1869. Parliament has also included, since 1869, a provision dealing with who may seek a patent which, like section 27 of the 1989 Act, included the words relied upon by Apotex: “may, on a petition […] presented to the Commissioner and on compliance with the other requirements of this Act, obtain a patent…” (see Appendix: 1869 Act, s. 6) (my emphasis). Thus, in all the precedents referred to above, it was open to the courts to adopt Apotex’s view.
[55] Thus, it is telling that as early as 1927, the Supreme Court of Canada, on an appeal involving a decision of the Exchequer Court in an infringement action where the defendant alleged as a ground of invalidity the absence of any affidavit in support of the application for a reissued patent (a requirement for the issuance of such patent), stated:
we are satisfied that any insufficiency in the material on which the Commissioner acts, the entire absence of an affidavit or any defect in the form and substance of that which is put forward as an affidavit in support of the claim, cannot, in the absence of fraud, which in this instance has not been suggested, avail an alleged infringer as a ground of attack on a new patent issued under s. 24. It is not a “fact or default, which, by this Act, or by law, renders the patent void” (Patent Act, s. 34).
(Fada Radio Ltd. v. Canadian General Electric Co. Ltd., [1927] S.C.R. 520 at 523-524.) (Fada)
[56] When it wrote its reasons, the Supreme Court of Canada in Fada was fully aware that, as the court below put it, “[t]he legal effect of a failure to strictly comply with certain formalities of the statutes and rules regarding applications for patents had not apparently been the subject of discussion in reported cases in Canada or England, but it has been the subject of discussion in many American cases” (The Canadian General Electric Co., Ltd. v. Fada Radio Ltd., [1927] Ex. C.R. 107 at 111).
[57] Thus, I consider ourselves bound by the essential concept in Fada, that pre-patent issuance defects in the administrative process for applying for a patent cannot be relied upon by an alleged infringer to render a patent void.
[58] The Patent Act and the practice of the Patent Office have evolved since Fada. But in a number of cases since, our Court has agreed with the essential holding in Fada. It has ruled that defects in the pre-patent issuance process that do not come within the ambit of provisions dealing expressly with the voidance of a patent, like section 53 of the 1989 Act, cannot be relied upon by an alleged infringer to render a patent void.
[59] For example, in Procter & Gamble, again in the context of an action for infringement and a defence of invalidity, the Court had to determine whether a failure to meet the requirement set out in subsection 63(2) of the then applicable version of the Patent Act (see Appendix: 1989 Act, s. 61(2)) was a fact or default which could be raised by an alleged infringer to void the patent.
[60] Subsection 63(2) addressed circumstances in which a patent application was made for an invention that was already covered by an existing patent. It provided that the patent application would be “deemed to have been abandoned unless the applicant” moved to set a pre-existing patent aside, which the applicant in that case had not done. The Court agreed with the trial judge “that the subsection ‘has nothing to do with an issued patent’ [as it] is not a provision to be applied after the issuance of the second patent to provide a basis for alleging the invalidity thereof” (Procter & Gamble at para. 69).
[61] There is no need to determine whether the word ‘forfeited’ (in French ‘périmée’) in subsection 73(1) has the same meaning as the word ‘abandoned’ (in French ‘abandonnée’) used in the various provisions of the 1989 Act (see Appendix for examples: 1989 Act, s. 30, 36(3), 61(2)). In all cases, the events referred to in those provisions occur in the pre-patent issuance period and the legislator provided for an opportunity to reinstate or restore the application after its status (abandoned or forfeited) was changed by the operation of the law, even if the time in which to do so and what needs to be established to do so may differ.
[62] The legislator is presumed to know the law and how it has been applied, especially where, as here, the case law of appellate courts has been consistent for such a long period of time (2747-3174 Québec Inc. v. Québec (Régie des permis d'alcool), [1996] 3 S.C.R. 919 at paras. 237-238; ATCO at para. 59).
[63] The legislator was well aware of the distinction between an application and a patent. Since 1869, Parliament has used precise wording when it intended to deal with matters that could void a patent. Section 53 of the 1989 Act is evidence of the fact that the legislator turned its mind to facts and defaults that could void a patent.
[64] Prior versions of the Patent Act contained more provisions, like section 53, dealing expressly with the nullity and voidance of patents. These reflect what the legislator considered to be so fundamental as to justify this harsh consequence. For example, for several decades, a patent would become null if the invention was not manufactured in Canada within a prescribed period. This was in line with one of the objects of the patent legislation which was to promote inventions that would be practised in Canada, i.e., to promote economic and technological development in Canada.
[65] Section 53 first