UPL NA Inc. v. AgraCity Crop & Nutrition Ltd.

UPL NA Inc. v. AgraCity Crop & Nutrition Ltd.
Court (s) Database
Federal Court Decisions
Date
2022-11-10
Neutral citation
2022 FC 1422
File numbers
T-604-19
Decision Content
Date: 20221110
Docket: T-604-19
Citation: 2022 FC 1422
Ottawa, Ontario, November 10, 2022
PRESENT: The Honourable Madam Justice Aylen
BETWEEN:
UPL NA INC., ARYSTA LIFESCIENCE NORTH AMERICA, LLC and UPL AGROSOLUTIONS CANADA INC.
Plaintiffs
and
AGRACITY CROP & NUTRITION LTD. and NEWAGCO INC.
Defendants
PUBLIC JUDGEMENT AND REASONS
(Confidential Judgement and Reasons issued on October 19, 2022)
I. Introduction
[1] The parties are competitors in the agricultural crop protection industry. The Plaintiffs assert that, in March of 2019, the Defendants jumped the gun by launching a copycat generic flucarbazone sodium herbicide to control wild oats and other grassy and broadleaf weeds in crops of wheat prior to the expiry of the Plaintiffs’ patent (Canadian Patent No. 2,346,021) [021 Patent] just six months later. The Plaintiffs assert that the Defendants are jointly and severally liable for infringement and inducement for the infringing generic herbicides sold in 2019.
[2] The Defendants defend the Plaintiffs’ allegations of infringement and inducement on the basis that the Defendants did not infringe the asserted claims of the 021 Patent and that the asserted claims of the 021 Patent are invalid. With respect to invalidity, the Defendants assert that: (i) the subject matter of the claims was obvious in view of what was already publicly known; (ii) the subject matter of the claims was anticipated by United States Patent No. 5534486 [486 Patent] and Canadian Patent No. 2,064,636 [636 Patent]; (iii) the claims are overly broad, claiming more than what the inventors actually made or disclosed; and (iv) the 021 Patent specification fails to meet the sufficiency requirements of subsection 27(3) of the Patent Act.
[3] By the conclusion of the trial, the Defendants no longer denied that one of the Defendants, AgraCity Crop & Nutrition Ltd. [AgraCity], infringed and induced infringement of the asserted claims of the 021 Patent, but continued to deny that NewAgco Inc. [NewAgco] had any liability to the Plaintiffs.
[4] For the reasons that follow, I find that the asserted claims of the 021 Patent are valid and were infringed by AgraCity. The Plaintiffs have not established any liability on the part of NewAgco. AgraCity shall pay $227,409 to the Plaintiffs as disgorgement of their profits on the sale of their infringing generic flucarbazone sodium herbicide, together with prejudgment and post-judgment interest.
II. Background
A. The Parties
[5] The Plaintiff, Arysta LifeScience North America, LLC [Arysta], is a California corporation with an office in Cary, North Carolina and was previously known as Arysta LifeScience North America Corporation and before that, as Arvesta Corporation. At all material times, Arysta was the owner of the 021 Patent.
[6] The Plaintiff, UPL AgroSolutions Canada Inc. [UPL Canada], is a British Columbia corporation with an office in Vancouver, British Columbia and was previously known as Arysta LifeScience Canada Inc. UPL Canada markets, sells and distributes in Canada a flucarbazone sodium herbicide under the brand name EVEREST and sells an identical flucarbazone sodium herbicide rebranded as SIERRA to a third party company called Syngenta.
[7] The Plaintiff, UPL NA Inc. [UPL NA], is a Delaware corporation with an office in King of Prussia, Pennsylvania. Since 2019, UPL NA has manufactured the EVEREST and SIERRA products and sold them to UPL Canada for distribution in Canada.
[8] In February of 2019, UPL Limited, an international crop protection company, acquired Arysta. UPL Limited is the parent company of UPL NA and UPL NA is the parent company to each of Arysta and UPL Canada.
[9] The Defendant, AgraCity, is a Saskatchewan corporation with an office in Saskatoon, Saskatchewan and is a distributor of generic crop protection products, including a generic flucarbazone sodium herbicide under the brand name HIMALAYA. AgraCity sells HIMALAYA directly to farmers, who must hold a membership with an organization known as Farmers of North America.
[10] The Defendant, NewAgco, is a Saskatchewan corporation with an office in Saskatoon, Saskatchewan. It holds registrations with the Pest Management Regulatory Agency for generic herbicide products, including HIMALAYA.
B. The Regulation of Herbicides in Canada
[11] Health Canada’s Pest Management Regulatory Agency [PMRA] is responsible for pesticide regulation in Canada, including conventional pesticides such as herbicides for use in agricultural crops. Companies seeking to market and sell herbicides in Canada must register the proposed herbicide with the PMRA and obtain approval of the herbicide’s proposed label. The herbicide’s label outlines who can use the herbicide and under what circumstances it can be used.
[12] The parties agree that purchasers of herbicides, such as EVEREST and HIMALAYA, are required pursuant to section 6(5)(b) of the Pest Control Products Act, SC 2002, c 28, to follow the label instructions when using the herbicides.
C. The Plaintiffs’ Flucarbazone Sodium Herbicide Business
[13] In 2000, the PMRA approved the application for two herbicidal products: (a) EVEREST Technical, which is the flucarbazone sodium active ingredient in EVEREST; and (b) EVEREST 70 WDG, which is a 70% water dispersible granule formulation. EVEREST 70 WDG is a dry formulation and was approved for pre-plant, pre-emergence and post-emergence application on spring wheat (excluding durum wheat) and for post-emergence application on spring wheat (including durum wheat) for the control of wild oats and certain other grassy and broadleaf weeds.
[14] In 2002, Arysta (then known as Arvesta Corporation) purchased from Bayer Corporation its flucarbazone sodium business for in excess of $100 million, which purchase included the pending application for the 021 Patent and the existing PMRA approvals of the EVEREST herbicides.
[15] In 2011, the Plaintiffs obtained approval for EVEREST 2.0, the second generation EVEREST product. Unlike the first generation product, this version: (a) included a safener supplied by Syngenta that further improved the herbicide’s performance by further reducing the risk of crop injury; and (b) was a liquid suspension product to be used only as a post-emergent herbicide.
[16] In 2018, the Plaintiffs obtained approval for EVEREST 3.0 AG, which is the successor product to EVEREST 2.0 and the product being manufactured, distributed and sold by the Plaintiffs at all times relevant to this action. EVEREST 3.0 AG, which is also a liquid suspension product, includes improvements that enhance the product’s shelf-life and increase product stability. EVEREST 3.0 AG was approved for post-emergent application on spring wheat for the control of wild oats and other grassy and broadleaf weeds.
[17] Since 2011, the Plaintiffs have had an agreement with Syngenta, pursuant to which Syngenta provides the Plaintiffs with the safener included in EVEREST 2.0 and EVEREST 3.0 AG and the Plaintiffs manufacture and sell to Syngenta a private label/rebranded version of EVEREST called SIERRA. Other than the difference in name, the EVEREST and SIERRA products are identical and are approved by the PMRA for the same use.
[18] Until 2019, UPL Canada and Syngenta were the sole suppliers of flucarbazone sodium herbicide products in Canada.
[19] The EVEREST products have become the Plaintiffs’ flagship product line in Canada, generating tens of millions of dollars in revenue on an annual basis from sales to wheat growers in western Canada. The EVEREST products now represent approximately one third of the Plaintiffs’ Canadian business.
D. The Defendants’ Flucarbazone Sodium Herbicide Business
[20] In 2017, Arysta was notified by the PMRA that NewAgco had filed an application to register a generic flucarbazone sodium technical and intended to rely on Arysta’s data for EVEREST Technical in support of its application.
[21] Once notified by the PMRA, the Plaintiffs contacted the Defendants regarding, among other things, the 021 Patent and demanded that the Defendants delay the launch of their generic flucarbazone sodium herbicide until the expiry of the 021 Patent in September 2019. The Defendants refused to do so, asserting that the 021 Patent was invalid.
[22] In March of 2019, NewAgco received approval from the PMRA for its HIMALAYA Technical and HIMALAYA end-use herbicide. HIMALAYA was approved for pre-plant, pre-emergence and post-emergence application on spring wheat (excluding durum wheat) and for post-emergence application on spring wheat (including durum wheat) for control of wild oats and certain other grassy and broadleaf weeds. The label for HIMALAYA lists NewAgco as the registrant and AgraCity as the distributor of the product.
[23] Following receipt of approval from the PMRA, AgraCity commenced marketing and selling HIMALAYA. On March 6, 2019, AgraCity issued a press release on their website entitled “HUGE NEWS - HIMALAYA™ Same Active As Everest Is Now Available From AgraCity”, which stated, in part:
Today, AgraCity Canada (NewAgco) announced that they have received regulatory approval through the Canadian Pest Management Regulatory Agency (PMRA) for Himalaya™, the first generic version of flucarbazone herbicide.
“We are excited to be bringing this new product to Western Canadian wheat growers, as it will give them an affordable new option to control grass and broadleaf weeds in wheat, plus it will have the same quality and high performance of the brand name flucarbazone products on the market today” says Jason Mann, CEO of AgraCity in Saskatoon. “We are looking forward to bringing even more new generic options for Canadian growers in the future”.
Himalaya™, a new product for control of wild oats plus other grass and broadleaf weeds in Spring and Durum Wheat is now available from AgraCity for 2019!
Himalaya, same active as EVEREST®, provides the same quality and high-performance control of wild oats, grass and broadleaf weeds as the brand name flucarbazone, and also offers control of Group 1 resistant wild oats and green foxtail, flushing control of wild oats, a wide window of application, excellent crop safety, and numerous tank mix options.
[24] While marketed as having the same active ingredient as EVEREST, HIMALAYA does not actually contain the safener technology included in the EVEREST products.
[25] At some point in time, NewAgco and AgraCity entered into a verbal agreement pursuant to which AgraCity agreed to pay to NewAgco a royalty in exchange for the ability to distribute products that are covered by PMRA approvals held by NewAgco, including the approvals for HIMALAYA. The royalty rate is calculated as || || of AgraCity’s gross revenue less costs of goods sold and less freight.
[26] Notwithstanding the aforementioned agreement and the sale of HIMALAYA in 2019, no royalty was actually paid by AgraCity to NewAgco in 2019 in respect of any HIMALAYA products and there was no entry made in AgraCity’s financial records of any deferral of any royalty payment for HIMALAYA products in 2019. The payment of royalties resumed in 2020 when the injunction (discussed below) was lifted.
E. The Action and the Injunction
[27] On April 9, 2019, the Plaintiffs commenced this patent infringement action and on the same day, the Plaintiffs served and filed a motion seeking an interim injunction to prevent the Defendants from selling and distributing HIMALAYA. The injunction was granted on April 25, 2019 and amended on March 18, 2020, so as to, among other things, provide for the termination of the injunction upon the expiry of the 021 Patent.
[28] The parties are in agreement that the number of jugs of HIMALAYA sold from the date of the product’s launch until the issuance of the injunction was limited to only ||| ||| jugs. The parties also agree that those jugs of HIMALAYA were sold and marketed by AgraCity for use in accordance with HIMALAYA’s end-use label.
III. The Patents at Issue in this Proceeding
[29] Three patents were addressed by the parties and are relevant to this proceeding – the 021 Patent and two related pieces of prior art upon which the Defendants rely for their allegations of obviousness and anticipation – namely, the 486 Patent and the 636 Patent. I will address them in chronological order.
A. The 486 Patent
[30] The 486 Patent, entitled “Herbicidal Sulphonylaminocarbonyltriazolinones Having Substituents Bonded Via Oxygen”, was granted on July 9, 1996 to Bayer Aktiengesellschaft and lists as inventors three of the same inventors as the 021 Patent. The priority application for the 486 Patent was German patent application P 41 10 795.0 filed April 4, 1991.
[31] Column 1 of the 486 Patent states that the invention relates to new sulphonylaminocarbonyltriazolinones [SATCs] having substituents bonded via oxygen, to a plurality of processes and novel intermediates for their preparation and to their use as herbicides. The 486 Patent states that the inventors discovered that SATCs having substituents bonded via oxygen of the general formula (I):
and their salts are distinguished by a powerful herbicidal activity and a surprisingly better herbicidal activity than the known compound 2-(2-chlorophenylsulphonylaminocarbonyl)-4,5-dimethyl-2,4-dihydro-3H-1,2,4-triazol-3-one, which has a similar structure.
[32] Column 28 of the 486 Patent states:
The active compounds, according to the invention can be used as defoliants, desiccants, agents for destroying broadleaved plants and, especially, as weed-killers. By weeds, in the broadest sense, there are to be understood all plants which grow in locations where they are undesired. Whether the substances according to the invention act as total or selective herbicides depends essentially on the amount used.
The active compounds according to the invention can be used, for example, in connection with the following plants:
Dicotyledon weeds of the genera: Sinapis, Lepidium, Galium, Stellaria, Matricaria, Anthemis, Galinsoga, Chenopodium, Urtica, Senecio, Amaranthus, Portulaca, Xanthium, Convolvulus, Ipomoea, Polygonum, Sesbania, Ambrosia, Cirsium, Carduus, Sonchus, Solanum, Rorippa, Rotala, Lindernia, Lamium, Veronica, Abutilon, Emex, Datura, Viola, Galeopsis, Papaver, Centaurea, Trifolium, Ranunculus and Taraxacum.
Dicotyledon cultures of the genera: Gossypium, Glycine, Beta, Daucus, Phaseolus, Pisum, Solanum, Linum, Ipomoea, Vicia, Nicotiana, Lycopersicon, Arachis, Brassica, Lactuca, Cucumis and Cucurbita.
Monocotyledon weeds of the genera: Echinochloa, Setaria, Panicum, Digitaria, Phleum, Poa, Festuca, Eleusine, Brachiaria, Lolium, Bromus, Avena, Cyperus, Sorghum, Agropyron, Cynodon, Monochoria, Fimbristylis, Sagittaria, Eleocharis, Scirpus, Paspalum, Ischaemum, Sphenoclea, Dactyloctenium, Agrostis, Alopecurus and Apera.
Monocotyledon cultures of the genera: Oryza, Zea, Triticum, Hordeurn, Avena, Secale, Sorghum, Panicurn, Saccharum, Ananas, Asparagus and Allium.
However, the use of the active compounds according to the invention is in no way restricted to these genera, but also extends in the same manner to other plants.
The compounds are suitable, depending on the concentration, for the total combating of weeds, for example on industrial terrain and rail tracks, and on paths and squares with or without tree plantings. Equally, the compounds can be employed for combating weeds in perennial cultures, for example afforestations, decorative tree plantings, orchards, vineyards, citrus groves, nut orchards, banana plantations, coffee plantations, tea plantations, rubber plantations, oil palm plantations, cocoa plantations, soft fruit plantings and hopfields, on lawns, turf and pasture-land, and for the selective combating of weeds in annual cultures.
Some of the compounds of the formula (I) according to the invention are suitable for total or semi-total weed control, some for the selective control of monocotyledon and dicotyledon weeds in monocotyledon and dicotyledon cultures, both pre-emergence and post-emergence.
[Emphasis added]
[33] The 486 Patent sets out 327 preparation examples of the compounds of the formula (I), with differing combinations of chemical structures for each of R₁, R₂ and R₃. Examples 79 and 321 provide the substitutions required to make the structure of the compound of formula (I) of the 021 Patent and its salt.
[34] The 486 Patent sets out two use examples (A and B), where the known compound 2-(2-chlorophenylsulphonylaminocarbonyl)-4,5-dimethyl-2,4-dihydro-3H-1,2,4-triazol-3-one is a comparative compound and is described as compound (A). Example A involved a post-emergence test. No details were provided as to which crops and which weeds were used for the testing and how many compounds were tested. No specific test data was provided, but the patent states that:
In this test, a considerably more powerful action against weeds than the known compound (A) is shown, for example, by the compounds of Preparation Examples 1, 2, 3, 53, 54, 55, 56, 57, 58, 64, 65 and 67, while having, in some cases, good crop plant compatibility.
[35] Flucarbazone sodium is not among the listed compounds and no particulars are provided as to which compounds had good crop plant compatibility and for which crops they exhibited compatibility.
[36] Example B involved a pre-emergence test. Again, no details were provided as to which crops and which weeds were used for the testing and how many compounds were tested. No specific test data was provided, but the patent states that:
In this test, a considerably more powerful action against weeds than the known compound (A) is shown, for example, by the compounds of Preparation Examples 2, 54 and 69, while having, in some cases, good crop plant compatibility.
[37] As with Example A, flucarbazone sodium is not among the listed compounds and no particulars are provided as to which compounds had good crop plant compatibility and for which crops they exhibited compatibility.
[38] The 486 Patent has 11 claims covering various compounds of the formula (I), where claim 1 is for the SATC of the formula (I). Claim 10 is directed to the compound now known as flucarbazone and its salt:
B. The 636 Patent
[39] The 636 Patent, entitled “Sulphonylaminocarbonyltriazolinones Having Substituents Bonded Via Oxygen”, was granted on December 23, 1997 to Bayer Aktiengesellschaft and lists the same inventors as the 486 Patent. The priority application for the 636 Patent was also German patent application P 41 10 795.0 filed April 4, 1991. The 636 Patent is the Canadian equivalent of the 486 Patent.
[40] The abstract of the 636 Patent states that the invention relates to novel SATCs of formula (I) having substituents bonded via oxygen and to salts thereof, to a plurality of processes and novel intermediates for their preparation and to their use as herbicides. It provides that the active substances are those of the formula (I)
[41] The 636 Patent states that the application has been divided and the 636 Patent application (parent application) relates to compounds of formula (I), processes for preparing compounds of formula (I) herbicidal composition containing compounds of formula (I) and uses of the compounds of formula (I), and compositions thereof, as herbicides.
[42] Like the 486 Patent, the 636 Patent notes that the SATCs having substituents bonded via oxygen of the general formula (I) and their salts are distinguished by a powerful herbicidal activity and a surprisingly better herbicidal action than the known compound 2-(2-chlorophenylsulphonylaminocarbonyl)-4,5-dimethyl-2,4-dihydro-3H-1,2,4-triazol-3-one, which has a similar structure.
[43] The 636 Patent contains the same language as Column 28 of the 486 Patent regarding the uses of the active compounds according to the invention.
[44] The 636 Patent sets out 186 preparation examples of the compounds of the formula (I), with differing combinations of chemical structures for each of R₁, R₂ and R₃. Example 79 provides the substitutions required to make the structure of the compound of formula (I) of the 021 Patent.
[45] The 636 Patent sets out the same two use examples as the 486 Patent, reporting identical findings and providing no additional information regarding the parameters of the testing that was conducted.
[46] The 636 Patent has 33 claims covering various compounds of the formula (I), including the compound now known as flucarbazone (claim 12). Claim 35 claims a compound of formula (I) as defined in any one of claims 1 to 33 in which the compound is in the form of a salt, and thus includes flucarbazone sodium.
[47] The 636 Patent has 16 claims directed at methods of combating weeds. For example, claims 40 and 41 provide:
40. A method for combating weeds which comprises applying to the weeds, or to a habitat thereof, a herbicidally effective amount of a compound according to any one of claims 1 to 33.
41. A method for combating weeds which comprises applying to the weeds, or to a habitat thereof, a herbicidally effective amount of a compound according to claim 35.
IV. The 021 Patent
[48] The 021 Patent, entitled “Selective Herbicides Based on a Substituted Phenylsulphonylaminocarbonyltriazolinone” relates to selective herbicidal compositions of a known compound (now named flucarbazone) and/or its salts, to their use for the selective control of weeds in crops of cereal, in particular crops of wheat, and to methods for the selective control of weeds in crops of cereals by applying the compositions together with surfactants and/or customary extenders. Dieter Feucht, Hans-Joachim Santel, Klaus Lurssen, Ingo Wetcholowsky, Peter Dahmen and Klaus-Helmet Muller are the named inventors of the 021 Patent.
[49] The 021 Patent was filed by Bayer Aktiengesellschaft on September 21, 1999, laid open for public inspection on April 13, 2000 and issued by the Canadian Patent Office on August 25, 2009 to Arysta. The priority application for the 021 Patent was German patent application DE198 45 407.4, which was filed October 2, 1998. The 021 Patent expired on September 21, 2019.
[50] The 021 Patent expressly acknowledges that SATCs, including 2-(2-trifluoromethoxy-phenylsulphonylaminocarbonyl)-4-methyl-5-methoxy-2,4-dihydro-3H-1,2,4-triazol-3-one (now known as flucarbazone), and their salts, processes for preparing these compounds and their use as herbicides are the subject of earlier patent applications, including the 486 Patent. The 021 Patent states that while these comparative SATC compounds have a molecular structure which is very similar to that of flucarbazone, these comparative compounds show shortcomings in their activity or activity gaps in the case of certain weeds.
[51] The 021 Patent goes on to state that:
Surprisingly, it has now been found that the compound [flucarbazone] and salts thereof, in particular the sodium salt of the compound of the formula (I), in comparison with the above-mentioned structurally similar compounds, show considerably stronger activity against some weeds in cereal crops which are difficult to control, combined with very good compatibility with cereal species, such as, in particular, wheat, and are therefore particularly suitable for the efficient and selective control of weeds in cereals, in particular in wheat. The activity gaps observed with the abovementioned comparative compounds which are closely related to (I) do not occur in the weed spectrum of the compound (I) and its salts.
[…]
The compound of the formula (I) and its Na salt are already known (cf. US-5 534 486 – Examples 79 and 321).
The compound of the formula (I) and its salts have a broad herbicidal activity. They can be used, for example, for controlling the following weeds:
Dicotyledonous weeds of the orders: Sinapis, Lepidium, Galium, Stellaria, Matricaria, Anthemis, Galinsoga, Chenopodium, Urtica, Senecio, Amaranthus, Portulaca, Xanthium, Convolvulus, Ipomoea, Polygonum, Sesbania, Ambrosia, Cirsium, Carduus, Sonchus, Solanum, Rorippa, Rotala, Lindernia, Lamium, Veronica, Abutilon, Emex, Datura, Viola, Galeopsis, Papaver, Centaurea, Trifolium, Ranunculus, Taraxacum.
Monocotyledonous weeds of the orders: Echinochloa, Setaria, Panicum, Digitaria, Phleum, Poa, Festuca, Eleusine, Brachiaria, Lolium, Bromus, Avena, Cyperus, Sorghum, Agropyron, Cynodon, Monochoria, Fimbristylis, Sagittaria, Eleocharis, Scirpus, Paspalum, Ischaemum, Sphenoclea, Dactyloctenium, Agrostis, Alopecurus, Apera, Aegilops, Phalaris.
However, the use of the compound (I) and its salts is by no means limited to these orders but extends in the same manner to other plants as well.
The compound of formula (I) and its salts have strong herbicidal activity and a broad spectrum of activity when used on the soil and on above-ground parts of plants. They are suitable for the selective control of monocotyledonous and dicotyledonous weeds in monocotyledonous crops, especially in cereals, in particular in wheat, both by the pre-emergence and by the post-emergence method.
Problematic weeds which can be controlled particularly well with the compound of the formula (I) and its salts, in particular its sodium salt, and whose control is less likely to succeed with both conventional herbicides and more recent compounds of a similar molecular structure are, in particular, Agropyron, Alopecurus, Amaranthus, Apera, Avena, Brassica, Bromus, Capsella, Digitaria, Echinochloa, Erysimum, Lolium, Matricaria, Phalaris, Poa, Polygonum, Setaria, Sinapsis, Thlapsi and Veronica.
[…]
The amount of active compound used can vary within a substantial range. It depends essentially on the nature of the desired effect. In general, the amounts used are between 1 g and 1 kg of active compound per hectare of soil surface, preferably between 5 g and 0.5 kg per ha.
[Emphasis added]
[52] The 021 Patent sets out four use examples (A, B, C and D) using certain comparative compounds (compounds A through H), with seven of the eight comparative compounds being compounds identified in the 486 Patent.
[53] Example A was a pre-emergence greenhouse test in which the selective-herbicidal activity of six of the comparative compounds was assessed against that of flucarbazone sodium in crops of wheat with eight weeds (including wild oats), with one additional comparative compound assessed for three weeds (including wild oats). The 021 Patent reports that flucarbazone sodium exhibited very strong activity (efficacy of 80-100%) against all eight weeds, combined with very good compatibility with the wheat crop. Comparator compounds A, C, D, E and F exhibited considerably weaker herbicidal activity, compound B was not compatible with wheat and flucarbazone sodium demonstrated considerable superiority over comparative compound G. Specific data was reported in Tables A1 and A2.
[54] Example B was a post-emergence greenhouse test in which the selective-herbicidal activity of six of the comparative compounds was assessed against that of flucarbazone sodium in crops of wheat with seven weeds (including wild oats), with two additional comparative compounds assessed for three weeds (including wild oats). The 021 Patent reports that flucarbazone sodium exhibited strong activity (efficacy of 70-100%) against seven weeds (including wild oats), combined with very good compatibility with the wheat crop. Comparative compounds A, B, C, D, E and F exhibited considerably weaker herbicidal activity and flucarbazone sodium demonstrated considerable superiority over comparative compounds G and H. Specific data was reported in Tables B1 and B2.
[55] Example C was a post-emergence field test in which the selective-herbicidal activity of comparative compounds B and D was assessed against that of flucarbazone sodium in crops of summer wheat in Canada against five economically important weeds (including wild oats). The 021 Patent reports that flucarbazone sodium exhibited considerably stronger activity against wild oats than comparative compounds B and D, combined with approximately the same crop compatibility. Specific data was reported in Table C.
[56] Example D was also a post-emergence field test, in which the selective-herbicidal activity of flucarbazone sodium was assessed in crops of summer wheat in Canada and the United States against seven economically important weeds (including wild oats). A total of 557 tests on weeds were reported (263 of which were in relation to wild oats) and 408 crop damage tests were reported. The 021 Patent states that the tests demonstrate that flucarbazone sodium is particularly suitable for controlling all seven weeds (including wild oats) in cereals. Specific data was reported in Table D.
[57] Claims 1, 3, and 6 through 10 of the 021 Patent are at issue in this action [Asserted Claims]. The relevant claims of the 021 Patent are as follows:
1. A selective-herbicidal composition, comprising an effective amount of a sodium salt of the compound 2-(2-trifluromethoxy-phenylsulphonylaminocarbonyl)-4-methyl-5-methoxy-2,4-dihydro-3H-1, 2, 4-triazol-3-one of formula (I):
formulated as 70 WP or 70 WG, 70% w/w water dispersible powder or granules, preparation.
2. Use of the sodium salt of the compound of formula (I) as defined in claim 1 for the selective control of weeds in crops of cereals.
3. The use according to claim 2, which is for the selective control of weeds in crops of wheat.
…
5. A method for the selective control of at least one weed selected from Agropyron, Avena, Brassica, Capsella, Lolium, Sinapsis, Thlapsi, Veronica and combinations thereto, in a cereal crop, comprising adding the sodium salt of the compound of formula (I) as defined in claim 1 to the crop, the crop environment or both.
6. The method according to claim 5, wherein the crop comprises spring-sown, wheat.
7. The method of claim 5 or 6, wherein the at least one weed is selected from the group consisting of Agropyron, Avena, Lolium, and Veronica.
8. The method of claim 5 or 6, wherein the at least one weed comprises Avena.
9. The method of any one of claims 5 to 8, wherein the sodium salt of the compound of formula (I) is applied at an application rate of 30 to 60 g/ha.
10. The method of claim 9, wherein the sodium salt of the compound of formula (I) is applied as 70 WP or 70 WG formulation.
[58] The Defendants did not dispute the Plaintiffs’ assertion that claims 3 and 6 through 9 of the 021 Patent would cover the use of EVEREST 3.0 AG and SIERRA 3.0 AG in accordance with their end-use product labels and I accept that, on the evidence before me, the Plaintiffs have established that to be the case.
V. The Trial
A. Fact Witnesses
[59] The Plaintiffs called one fact witness at trial, Mr. Trent McCrea. Mr. McCrea is the Country Head for UPL Canada and has worked in the agricultural industry for more than 20 years, seventeen of which were with UPL Canada. As Country Head, he has general management responsibilities for the business, including overseeing the team and the company’s marketing of products throughout Canada. Prior to holding the position of Country Head, he was the Territory Sales Manager and then the Regional Manager and Marketing Manager. He provided evidence regarding: (a) the corporate history of the Plaintiffs; (b) the sales and marketing of the EVEREST products; (c) the roles of each Plaintiff vis-à-vis the EVEREST products; (d) the various formulations of the EVEREST products sold in Canada and their properties; (e) the acquisition of Bayer’s flucarbazone business; (f) the ownership of the 021 Patent; (g) the registrations of the EVEREST products with the PMRA; (h) the labels for the EVEREST products; (i) the agreement between the Plaintiffs and Syngenta and Syngenta’s SIERRA products; and (j) the flucarbazone herbicide products sold in the Canadian market, including the launch and sale of the Defendant’s HIMALAYA product, as well as other non-flucarbazone sodium herbicides that compete with the EVEREST products.
[60] The Defendants did not raise any concerns regarding Mr. McCrea’s testimony and I find that he was a credible witness, in that he was forthright and attempted to respond honestly and accurately to the questions asked of him.
[61] The Defendants also called only one fact witness, Ms. Gail Hoshowsky. Ms. Hoshowsky is an accountant and holds the position of Vice President of Treasury and Corporate Finance of AgraCity. She provided evidence regarding: (a) the general business activities of AgraCity and its products; (b) the organization of the company; (c) the Statement of Operations for the fiscal year 2020 with a comparison to 2019, including an explanation of the various line items; (d) the royalty agreement between AgraCity and NewAgco and any royalties paid to NewAgo for HIMALAYA products for 2019; (e) invoices related to the HIMALAYA product sold in 2019; and (f) accounting services provided by AgraCity to NewAgco.
[62] The Plaintiffs did not raise any concerns regarding Ms. Hoshowsky’s testimony and I find that she was a credible witness, in that she was forthright and attempted to respond honestly and accurately to the questions asked of her.
[63] None of the inventors of the 021 Patent or representative of Bayer testified at trial, nor were any documents related to the 021 Patent invention story or the initial development of the compound now known as flucarbazone entered as exhibits at trial.
B. The Technical Expert Witnesses
[64] The Plaintiffs and the Defendants each called one technical expert witness (Dr. Franck Dayan for the Plaintiffs and Dr. Robert Blackshaw for the Defendants) and one financial expert witness (Mr. Errol Soriano for the Plaintiff and Mr. Daniel Ross for the Defendants), for which statements of proposed expertise were exchanged and filed as exhibits. There was no dispute between the parties as to the qualifications of the experts to give expert opinion evidence, nor any challenges regarding any portions of their expert reports (other than a small portion of Mr. Soriano’s second report, which was ultimately immaterial). I was satisfied that each of the expert witnesses were qualified to provide expert opinion evidence in accordance with their respective statement of proposed qualification.
(1) Dr. Franck Dayan
[65] Dr. Dayan has a Master’s degree and Ph.D. in botany/plant biology and completed post-doctoral research as a Research Plant Physiologist. He worked for 18 years as a Research Plant Physiologist at the Natural Products Utilization Unit of the United States Department of Agriculture Agricultural Research Service and is currently a professor in the Department of Agricultural Biology at Colorado State University. Dr. Dayan was qualified to provide expert opinion evidence in plant physiology and weed science, including the chemistry of herbicides, how herbicides are developed and used to control weeds, how herbicides work (mode of action) to selectively control weeds in useful crops and how weeds become resistant to herbicides.
[66] Dr. Dayan provided two expert reports for trial. In his first expert report dated April 13, 2022, he addressed the following issues:
The common general knowledge [CGK] of the person of ordinary skill in the art to whom the 021 Patent is addressed [Skilled Person] relevant to the subject matter of the 021 Patent;
How the Skilled Person would have read and understood the 021 Patent and its claims as of April 13, 2000;
Whether claims 1, 3 and 6-10 of the 021 Patent read on the HIMALAYA herbicide product and its use in accordance with the product’s end-use label;
Whether claims 1, 3 and 6-10 of the 021 Patent read on the EVEREST 3.0 AG and SIERRA 3.0 AG product and their use in accordance with their respective end-use labels; and
Whether growers that purchased HIMALAYA herbicides in 2019 were likely to have had flucarbazone sodium in their weed management program for that year and, therefore, would have been likely to purchase EVEREST 3.0 AG or SIERRA 3.0 AG if they had not purchased HIMALAYA.
[67] In his second expert report dated May 25, 2022, Dr. Dayan commented on the following:
The expert report of Dr. Robert Blackshaw dated April 13, 2022;
How the Skilled Person would view the similarities and differences between the 021 Patent and the 636 Patent/486 Patent; and
Whether German Patent Application No. DE198 45 407.4 discloses the same subject matter as the 021 Patent.
(2) Dr. Robert Blackshaw
[68] Dr. Blackshaw has a Bachelor of Science degree in Botany/Chemistry and a Master’s degree and Ph.D. in weed science. He worked for two years as an Agronomist for the Alberta Wheat Pool and two years as a Pesticide Research and Development Officer for Dupont Canada Inc. For the 31 years leading up to his retirement, he worked as a Research Scientist with Agriculture and Agri-food Canada, during which time his main research areas included weed management and agronomic cropping systems. He was qualified to provide expert opinion evidence on weed management, including the evaluation of herbicidal activity and crop tolerance of chemical compounds.
[69] He acknowledged that while he has expertise in agronomy and weed science, he did not consider himself an expert in the area of chemistry, chemical compounds or chemical structures. He also acknowledged that he had no knowledge of the EVEREST and HIMALAYA product labels.
[70] Dr. Blackshaw provided two expert reports for trial. In his first report dated April 13, 2022, he addressed the following issues:
Some background on weed science, including the type of trials that were commonly performed on herbicides in the late 1990s;
The Skilled Person for the 021 Patent;
The CGK of the Skilled Person;
How the Skilled Person would interpret certain words and phrases used in the claims of the 021 Patent; and
The differences between the 021 Patent and the 636 Patent and the 486 Patent.
[71] In his second expert report dated June 29, 2022, Dr. Blackshaw did not set out a specific list of the issues he was asked to address. However, he stated that he was provided with a copy of Dr. Dayan’s April 13, 2022 expert report and would comment on certain portions of that report. Specifically, he commented on:
His opinion regarding the accuracy of Dr. Dayan’s definition of the Skilled Person;
Whether information cited by Dr. Dayan as forming part of the CGK of the Skilled Person is information that would be generally known and accepted by the Skilled Person;
Dr. Dayan’s interpretation of the term “selective” as used in the 021 Patent; and
Whether purchasers of HIMALAYA would have purchased non-flucarbazone sodium products had HIMALAYA not been available.
(3) Observations Regarding the Technical Experts’ Evidence
[72] The Defendants submit that Dr. Dayan made fundamental errors in his determination of the characteristics and qualities of the Skilled Person and that the manner in which those errors were discovered calls into question whether Dr. Dayan truly understood that his overriding duty was to the Court. I have addressed these allegations in detail below. While there were some errors made by Dr. Dayan in his articulation of certain attributes of the Skilled Person (which I have, where appropriate, taken into consideration in determining the weight to be given to his evidence as noted below), I nonetheless generally found his evidence to be thorough, knowledgeable and of assistance to the Court.
[73] The Plaintiffs have not raised any concerns regarding Dr. Blackshaw’s impartiality and I find that, in relation to the issues to which he was asked to provide an opinion, his opinions were objective and, in many respects, were of assistance to the Court. However, I find that his evidence was not as thorough as that provided by Dr. Dayan, which in part was due to his limited mandate.
C. The Financial Expert Witnesses
(1) Mr. Errol Soriano
[74] Mr. Errol Soriano is a chartered professional accountant, a chartered business valuator and a certified fr