Swist v. MEG Energy Corp.

Swist v. MEG Energy Corp.
Court (s) Database
Federal Court Decisions
Date
2021-01-20
Neutral citation
2021 FC 10
File numbers
T-1069-14
Decision Content
Date: 20210120
Docket: T-1069-14
Citation: 2021 FC 10
Ottawa, Ontario, January 20, 2021
PRESENT: The Honourable Mr. Justice Fothergill
BETWEEN:
JASON SWIST AND
CRUDE SOLUTIONS LTD.
Plaintiffs (Defendants by Counterclaim)
and
MEG ENERGY CORP.
Defendant (Plaintiff by Counterclaim)
PUBLIC JUDGMENT AND REASONS
Table of Contents
I. Overview 3
II. Extraction Methods in the Canadian Oil Sands 6
III. Pleadings and History of the Proceedings 9
IV. 746 Patent 10
V. Claims in Issue 12
VI. Issues 14
VII. Evidence 14
A. Fact and Expert Witnesses 14
(1) Swist’s Witnesses 14
(2) MEG’s Witnesses 15
B. Observations Regarding the Evidence 16
VIII. Claim Construction 21
A. Legal Principles and Relevant Dates 21
B. Person of Ordinary Skill in the Art [PSA] 23
C. Common General Knowledge of the PSA 24
D. Claim Terms Needing Construction 26
(1) “well pairs” 27
(2) “third well” 30
(3) “zone of increased mobility” 31
(4) “communication” 32
(5) “generating” 34
(6) “depletion zone” 35
IX. Infringement 36
A. Legal Principles 36
B. Analysis 37
X. Validity 46
A. Anticipation 46
(1) Legal Principles 46
(2) Arthur Patent 48
(3) Brannan Patent 54
(4) Cyr Patent 57
(5) Ong Patent 60
(6) Coskuner Patent 63
B. Obviousness 65
(1) Legal Principles 65
(2) PSA and Common General Knowledge 67
(3) Inventive Concept 67
(4) Differences between the State of the Art and the Invention 67
(5) Are the Differences Obvious? 68
C. Inutility 71
(1) Legal Principles 71
(2) Analysis 71
D. Overbreadth 74
XI. Disposition 75
I.
Overview
[1] Canadian oil sands are a particular type of hydrocarbon reservoir. A hydrocarbon is a compound of hydrogen and carbon, the chief components of petroleum and natural gas.
[2] The oil contained in the oil sands is at an early stage of maturity. It is designated as heavy oil, and is often referred to colloquially as bitumen. Bitumen is too thick to be pumped out of the ground directly. Special methods must therefore be used to mobilize the oil in the reservoir before extracting it.
[3] Two principal techniques are employed to make heavy oil mobile in the reservoir: cyclic steam stimulation [CSS] and steam assisted gravity drainage [SAGD]. Both CSS and SAGD fall within the general class of techniques known as “steam floods”, i.e., methods of thermal recovery that involve pumping steam generated at the surface into a subterranean reservoir to reduce oil viscosity.
[4] Canadian Patent 2,800,746 [746 Patent] is titled “Pressure Assisted Oil Recovery”, and relates generally to “second stage oil recovery and more specifically to exploiting pressure gradients in oil recovery”. The named inventor of the 746 Patent is the Plaintiff Jason Swist.
[5] The invention claimed by the 746 Patent is a modification of SAGD, whereby a third well is positioned between two adjacent SAGD well pairs. Activation of the third well before the merger of adjacent steam chambers is said to generate a large singular zone of increased mobility, resulting in the more rapid and efficient extraction of oil from the reservoir.
[6] Mr. Swist assigned ownership of the 746 Patent to the Plaintiff Crude Solutions Ltd [CSL] shortly before commencing this litigation. CSL is a holding company for Mr. Swist’s patents that he owns jointly with his wife. In these reasons I refer to Mr. Swist and CSL collectively as “Swist”.
[7] MEG Energy Corp [MEG] is a company that produces oil in the southern Athabasca region of Alberta. The corporation has been in business for more than 20 years and employs hundreds of people. MEG transports and sells oil to refiners throughout North America and internationally.
[8] MEG uses two methods to extract oil at its Christina Lake operation. MEG calls these methods “enhanced modified steam and gas push” [eMSAGP] and “enhanced modified vapour extraction” [eMVAPEX]. MEG holds patents related to each of these methods. The former invention is claimed in Canadian Patent 2,776,704 [704 Patent], while the latter is claimed in Canadian Patent 2,912,159 [159 Patent].
[9] Swist alleges that MEG’s use of eMSAGP and eMVAPEX at Christina Lake infringes claims 1 to 6 and 8 of the 746 Patent. MEG denies infringement, and counterclaims that claims 1 to 8 of the 746 Patent are invalid.
[10] For the reasons that follow, I conclude that MEG’s use of eMSAGP and eMVAPEX at Christina Lake does not infringe the specified claims of the 746 Patent. Furthermore, claims 1 to 8 of the 746 Patent are anticipated by the prior art and lack utility. They are therefore invalid.
II. Extraction Methods in the Canadian Oil Sands
[11] The following summary of extraction methods in the Canadian oil sands is adapted and condensed from the technical primer provided by Dr. Vikram Rao in his initial expert report.
[12] CSS, also known as “huff and puff”, involves a three-step cycle, which is usually repeated multiple times: steam injection; a soak period; and production. In the first step, steam is injected into a well. In the second step – the soak period – steam is no longer injected, but rather the existing steam enters the formation, usually at pressures near but below the fracture pressure of the formation. In the third step, the well is used to produce oil, and the water is separated from the oil when it reaches the surface.
[13] CSS involves a fairly long period of time and high injection pressures. The injection phase and the soak period each last for weeks or months. CSS typically releases no more than 20% of the oil in place. The CSS method can be used as a stand-alone recovery process, or it may be part of a larger recovery process. For example, CSS may be used in association with the other principal recovery process, SAGD.
[14] SAGD, like CSS, falls into the class of steam floods, but is a particularly effective variant. It was invented by Dr. Roger Butler in the late 1970s and early 1980s, while he was an engineer with Imperial Oil in Canada.
[15] In SAGD, a pair of parallel horizontal wells are vertically separated by a distance that typically ranges from four to eight metres. Steam is injected in the top well of the pair [injector well] for an extended period, until a “steam chamber” is formed above and around the injector well. This chamber has a roughly triangular profile along the entire length of the injector well. The steam, and any associated gas, rise in the formation because they are lighter than the resident oil.
[16] The steam heats the oil and reduces its viscosity. The now mobile oil drains down by gravity into the bottom well of the pair [producer well], together with hot water from the condensing steam. The heated oil and water mixture can then be pumped to the surface from the producer well.
[17] New steam and associated gas, if any, occupies the space left by the departing oil and heats the remaining oil. As more steam is injected and oil flows down into the producer well, the steam chamber above the injector well expands in size, and the process continues. A SAGD operation typically takes place over several years.
[18] A vertical cross section of a traditional SAGD well pair is illustrated below (Maureen Austin-Adigio and Ian Gates, “Non-condensable gas Co-Injection with steam for oil sands recovery” (2019) 179 Energy 736 at 737, Figure 1):
[19] SAGD is usually much more effective than CSS. Recoveries with SAGD can be well in excess of 60% of the oil in place, and numbers as high as 80% have been claimed.
[20] While steam is commonly injected during SAGD, steam and non-condensable gas [NCG] can also be co-injected. The NCG is usually methane, which unlike steam does not become liquid at typical pressures and temperatures experienced in the reservoir. The NCG moves to the top of the steam chamber, where it exerts pressure on any fluids it encounters.
[21] Steam and Gas Push [SAGP] is a variant of SAGD. SAGP introduces a NCG (such as methane) with or without a portion of steam. The gas rises through the steam chamber and occupies the space vacated by steam condensation. It exerts pressure to drive oil down in the same manner as steam, but more efficiently. Vapor-assisted petroleum extraction [VAPEX] involves injecting a gas mixture comprising molecules larger than ethane or methane (e.g., propane or butane) to reduce oil viscosity.
III. Pleadings and History of the Proceedings
[22] On October 2, 2013, Mr. Swist provided written notice to MEG of his assertion of rights arising from the 746 Patent. On April 3, 2014, Mr. Swist assigned ownership of the 746 Patent to CSL.
[23] Swist commenced this action by Statement of Claim dated April 29, 2014. Initially, Swist claimed that MEG was infringing all claims of the 746 Patent. However, following amendment of its pleadings on June 23, 2014, July 27, 2018, and July 26, 2019, Swist limited the scope of the action to claims 1 to 6 and 8.
[24] MEG filed its Statement of Defence and Counterclaim on July 23, 2014. Its pleadings were subsequently amended on September 12, 2014, August 8, 2018, and July 16 and August 6, 2019. MEG’s amended Counterclaim alleged that claims 1 to 8 of the 746 Patent were invalid on the grounds of anticipation, obviousness, overbreadth, lack of utility/sound prediction, insufficiency, ambiguity, and omission under s 53 of the Patent Act, RSC 1985, c P-4. In closing submissions, MEG informed the Court that it was no longer advancing the grounds of insufficiency, ambiguity, and omission under s 53 of the Patent Act.
IV. 746 Patent
[25] The priority date of the 746 Patent is May 19, 2011, the date of Swist’s US provisional application (US201161487770P). The filing date of the 746 Patent is May 15, 2012. Its publication date is November 22, 2012. The 746 Patent was issued on September 24, 2013.
[26] In April 2011, Mr. Swist contacted Dr. Ergun Kuru of the University of Alberta to perform simulations to test the inventions described in the 746 Patent. Dr. Kuru prepared a report titled “Numerical Study of Pressure Assisted Oil Recovery Technique for Optimizing Thermal Recovery” dated February 28, 2012 [Kuru Report]. Swist paid approximately $4,000.00 for the Kuru Report. Most, but not all, of the results contained in the Kuru Report are included in the 746 Patent.
[27] Swist also retained a company in Edmonton called Alberta Innovates Technology Futures [AITF] to review the Kuru Report and perform further simulations. This resulted in a report titled “Evaluating the Performances of SAGD Processes” dated May 2012 [AITF Report]. Swist paid approximately $5,000.00 for the AITF Report. The AITF Report results are not included in the 746 Patent.
[28] The 746 Patent states that the Field of Invention “relates to oil recovery and more specifically to exploiting pressure in oil recovery.”
[29] The Background of the Invention describes the evolution of CSS and SAGD, and notes some limitations with both techniques. With respect to SAGD, the 746 Patent identifies:
[…] the need to more quickly achieve production from the SAGD wells, the need to heat the formation laterally between laterally spaced wells to increase the oil recovery percentage; and provide SAGD operating over deeper oil sand formations.
[30] The Background of the Invention concludes as follows:
[…] the inventor has established that beneficially pressure differentials may be exploited to advance production from SAGD wells by increasing the velocity of heavy oils, that pressure differentials may be exploited to adjust the evolution of the steam chambers formed laterally between laterally spaced wells to increase the oil recovery percentage, and provide SAGD operating over deeper oil sand formations.
[31] According to the Summary of the Invention, one of its objects is “to enhance second stage oil recovery and more specifically to exploiting pressure in oil recovery”. “Second stage oil recovery” refers to the injection of an external fluid, such as water or gas, into a reservoir to facilitate extraction.
[32] The 746 Patent provides a Brief Description of the Drawings and describes the embodiments of the invention “by way of example only”. The 746 Patent then provides a Detailed Description of the invention, followed by 17 claims.
V. Claims in Issue
[33] Swist alleges infringement of claims 1 to 6 and 8 of the 746 Patent. MEG denies infringement, and counterclaims that claims 1 to 8 are invalid.
[34] Claim 1 is independent, and reads as follows:
1. A method comprising:
providing first and second well pairs separated by a first predetermined separation, each well pair comprising:
a first well within an oil bearing structure; and
a second well within the oil bearing structure at a first predetermined vertical offset to the first well, substantially parallel to the first well and a first predetermined lateral offset to the first well;
providing a third well within the oil bearing structure at a predetermined location between the first and second well pairs;
selectively injecting a first fluid into the first well of each well pair according to a first predetermined schedule under first predetermined conditions to create a zone of increased mobility within the oil bearing structure; and
generating a large singular zone of increased mobility by selectively injecting a second fluid into the third well according to a second predetermined schedule under second predetermined conditions at least one of absent and prior to any communication between the zones of increased mobility.
[35] Claims 2 to 8 depend from claim 1. They are described as follows:
2. A method according to claim 1 wherein,
the second predetermined schedule begins injection of the second fluid into the third well before a depletion zone resulting from injection of the first fluid into the first well of the first well pair merges with another depletion zone resulting from concurrent operation of the second well pair disposed in mirror relationship with respect of the third well with the first well pair.
3. The method according to claim 1 wherein at least one of:
the first well in at least one of the first and second well pairs does not inject the fluid whilst the second well of the at least one the first and second well pairs is producing; and
the fluid is at least one of steam, water, carbon dioxide, nitrogen, propane and methane.
4. The method according to claim 1 wherein,
injection into the third well is made at a higher pressure than injection into the first wells of each well pair.
5. The method according to claim 1 wherein,
at least one of:
the second predetermined conditions comprise at least injecting the second fluid at a pressure that is substantially at least one of lower and higher than the pressure at that at region of the oil bearing structure within which the second well of at least one of the first and second well pairs is disposed; and
the second predetermined schedule comprises at least operating the third well to extract oil from the oil bearing structure, and operating the third well whilst injecting a second fluid into the first well of at least one of the first and second well pairs under second predetermined conditions.
6. The method according to claim 1 wherein,
at least one of the:
first and second wells form a well pair comprising a predetermined portion of an array of well pairs and the third well is disposed in predetermined relationship between two well pairs; and
the first and second wells are disposed towards the lower boundary of the oil bearing structure and the third well is disposed vertically towards the upper boundary of the oil bearing structure.
7. The method according to claim 1 further comprising;
a second injection well disposed in predetermined relationship to the third well.
8. The method according to claim 1 wherein,
the large singular zone substantially depletes the oil bearing reservoir between the first and second well pairs.
VI. Issues
[36] The issues raised in these proceedings are whether claims 1 to 6 and 8 of the 746 Patent are infringed by MEG’s Christina Lake operation, and whether claims 1 to 8 are valid.
VII. Evidence
A. Fact and Expert Witnesses
(1) Swist’s Witnesses
[37] Mr. Ronald Jason Swist is the named inventor of the 746 Patent and, together with his wife, is the owner of CSL. Mr. Swist was called as a fact witness.
[38] Dr. Vikram Rao is a metallurgist with nearly 40 years of varied experience in the oil and gas industry. He was qualified as an expert in the oil and gas industry, in particular horizontal well drilling and extraction, methods of heavy oil recovery, and evaluation of oil fields including understanding the characteristics of underground heavy oil reservoirs.
[39] Mr. Dale Walters is the Engineering Manager at the Calgary office of CGG, a geoscience consulting company. He specializes in analyzing thermal recovery processes related to bitumen and heavy oil production, and has 33 years of experience in the petroleum industry. He was qualified as an expert in reservoir analysis and modelling, computer-assisted simulations of oil-bearing reservoirs, including modelling of thermal recovery processes for heavy oil extraction, and reservoir simulation technology.
(2) MEG’s Witnesses
[40] Dr. Bruce Carey is an independent technical evaluator of Alberta heavy oil recovery processes. He is a Research and Engineering Advisor specialized in the field of thermal recovery research and industry surveillance at Peters & Co Ltd. He was qualified as an expert engineer in thermal oil recovery.
[41] Dr. Thomas Boone is an engineering consultant and registered professional engineer with the Association of Professional Engineers and Geoscientists of Alberta. He has more than 30 years of experience in the oil industry. He was qualified as an expert professional engineer in heavy oil and conventional enhanced oil recovery projects, simulations and research, including thermal recovery processes, infill well fields, and 4-D seismic monitoring of infill well fields.
[42] Mr. Chi-Tak Yee is the Chief Operating Officer of MEG. He has more than 35 years of experience in oil sands extraction, including extensive involvement in SAGD projects. He worked under Dr. Butler as a graduate student and alongside him at GravDrain, a consultancy they established together. Mr. Yee was called as a fact witness.
[43] Dr. Ian D. Gates is a Professor in the Department of Chemical and Petroleum Engineering at the University of Calgary. His research and teaching focus on key concepts related to thermal bitumen extraction, including SAGD and its modifications. He is also a consultant on SAGD, CSS and other recovery methods. He was qualified as an expert in reservoir and petroleum engineering, especially in the area of SAGD and its variants.
B. Observations Regarding the Evidence
[44] The parties largely agreed upon the qualifications of the witnesses who were called to give expert opinion evidence. However, MEG expressed reservations about Dr. Rao’s expertise, noting that he was not active in the field of bitumen recovery or SAGD as of May 2011, the priority date of the 746 Patent. At all relevant times, Dr. Rao worked at Research Triangle Energy Consortium, an organization founded in 2007 by a number of American universities and a non-profit research institute with the aim of solving technical, economical, societal and public policy problems related to the use of energy. MEG notes that Dr. Rao’s expertise in drilling is largely irrelevant to the 746 Patent, and none of Dr. Rao’s patents concern methods of practising SAGD or modifications of SAGD.
[45] While I have accepted Dr. Rao as an expert in the oil and gas industry, including methods of heavy oil recovery, I acknowledge that CSS and SAGD are not his principal areas of focus. Nevertheless, I am satisfied that he is sufficiently qualified to offer the opinions he did. The weight to be given to those opinions is another matter, and this is addressed at the appropriate juncture below.
[46] Swist maintains that Dr. Gates should not be accepted as an expert witness, or alternatively that his testimony should be given little to no weight. MEG says that Dr. Gates failed to comply with the Court’s Code of Conduct for Expert Witnesses [Code of Conduct], and demonstrated a lack of candour and a lack of impartiality.
[47] The Code of Conduct states that an expert witness “has an overriding duty to assist the Court impartially”, and an expert report shall include “particulars of any aspect of the expert’s relationship with a party to the proceeding or the subject matter of his or her proposed evidence that might affect his or her duty to the Court”. Swist asserts that Dr. Gates did not comply with the Code of Conduct by neglecting to disclose the following:
(a) Dr. Gates communicated with Mr. Swist in 2012 before this litigation was commenced to discuss simulations relating to the 746 Patent, and received information that was confidential at the time.
(b) Dr. Gates and Mr. Swist discussed avenues to commercialize Mr. Swist’s invention.
(c) Dr. Gates gave no indication at the time that he thought the 746 Patent contained any flaws, and instead conveyed a positive impression of the patent, with words of encouragement such as “congrats on the claims” and “looks good”.
(d) When asked by Mr. Swist to assist as an expert in these proceedings, Dr. Gates declined and said that he preferred to “stay out of legal jousts”.
(e) Dr. Gates met Mr. Swist in person after these proceedings were commenced to discuss another invention developed by Mr. Swist in relation to the oil and gas industry.
[48] MEG responds that Mr. Swist has not established any conflict of interest. Dr. Gates testified that, at the time of his retainer by MEG, he had simply forgotten his prior involvement with Mr. Swist. The research project he discussed with Mr. Swist did not ultimately proceed. To the extent that any documents provided to Dr. Gates by Mr. Swist were confidential at the time, they were no longer confidential when Dr. Gates was asked to provide evidence on behalf of MEG in this litigation.
[49] Dr. Gates testified that he did not review the documents provided to him by Mr. Swist in the course of their interaction. He provided words of encouragement only because he is generally supportive of people achieving things, and this should not be interpreted as any sort of endorsement. He declined to testify in support of Mr. Swist in this litigation because he was busy at the time.
[50] The failure to disclose any aspect of an expert’s prior relationship with a party to a proceeding, as required by the Code of Conduct, may affect the weight to be given to an expert’s evidence (Kwicksutaineuk Ah-Kwa-Mish First Nation v Canada (Attorney General), 2012 FC 517 at paras 69-70). However, the Court may choose to accept an expert’s explanation of forgetfulness (Amgen Inc v Pfizer Canada ULC, 2020 FC 522 at para 152).
[51] I am satisfied that Dr. Gates did not make improper use of confidential information provided to him by Mr. Swist before these proceedings were commenced. Nor is there any reason to think that Dr. Gates harbours an animus against Mr. Swist. Dr. Gates’ failure to recall his prior interaction with Mr. Swist at the time of his retainer by MEG, despite exchanging e-mail messages, discussing matters by telephone and in-person, and preparing a research proposal, is surprising. However, it is not wholly implausible. Dr. Gates explained that he is often approached by aspiring inventors seeking his input, advice and assistance with research.
[52] A more troubling aspect of Dr. Gates’ testimony is his account of the manner in which he conducted his search for prior art related to the 746 Patent. Dr. Carey and Dr. Gates, both of whom testified in support of MEG, each claimed that they had conducted their own literature search, including personally performing the searches of the USPTO databases. Both experts also testified that they had not reviewed the other’s report. However, their search terms and results were identical, including the day on which they were performed.
[53] In closing argument, counsel for MEG admitted that the literature search had been developed by Dr. Carey and then provided to Dr. Gates by counsel. Dr. Gates apparently agreed with the search string, and adopted the results as his own.
[54] Counsel’s explanation for the identical prior art searches performed by Dr. Carey and Dr. Gates is not evidence. Nor can it be reconciled with Dr. Gates’ clear statement under cross-examination that he personally formulated the search terms that produced the results appended to his expert report:
Q. What I am trying to get is who came up with the specific search string, was that you?
A. I, I came up with this set of search strings.
[55] Swist also complains that Dr. Gates demonstrated a willingness to act as an advocate for MEG rather than as an impartial witness to assist the Court. He refused to agree to simple propositions, preferring instead to engage in irrelevant speeches.
[56] There is an unfortunate tendency in some expert witnesses to provide short, direct answers in examination in chief, and considerably longer, less direct answers in cross-examination. While this may not detract from their credibility, it may nevertheless raise questions regarding their impartiality. Swist’s criticisms of Dr. Gates are well-founded, but they apply equally to Dr. Rao, who often gave long, unwieldy answers in cross-examination.
[57] Despite these reservations, I am not prepared to wholly reject or discount the evidence of any witness who was called to testify in these proceedings. My reasons for preferring some witnesses’ evidence over that of others are explained in the analysis that follows.
VIII. Claim Construction
A. Legal Principles and Relevant Dates
[58] The first step in a patent suit is to construe the claims to ascertain their meaning and determine their scope (Whirlpool Corp v Camco Inc, 2000 SCC 67 [Whirlpool] at para 43). In claim construction, the Court examines a patent’s claims to identify what the inventor considered to be their “essential elements”. This process may be aided by expert evidence regarding the meaning of specific terms (Whirlpool at paras 45, 57). The relevant date for claim construction is the date of publication of the patent application: November 22, 2012 (Whirlpool at paras 54-55).
[59] Where patent language can bear more than one equally plausible meaning, the Court must adopt a reasonable view of patent language to afford the inventor protection for that which he or she has in good faith actually invented; however, this does not mean that in all cases the Court must adopt any arguable interpretation that would uphold the patent (ABB Technology AG v Hyundai Heavy Industries Co, Ltd, 2015 FCA 181 at para 45). There is no general presumption of interpretation in favour of the inventor, but a patent should not be invalidated on a technicality (Seedlings Life Sciences Ventures, LLC v Pfizer Canada ULC, 2020 FC 1 at para 59).
[60] The canons of claim construction are found in the Supreme Court of Canada’s decisions in Whirlpool at paragraphs 49 to 55 and Free World Trust v Électro Santé Inc, 2000 SCC 66 [Free World Trust] at paragraphs 44 to 54. They are the following:
(a) The words of the claims must be read in an informed and purposive way with a mind willing to understand, viewed through the eyes of the person of ordinary skill in the art [PSA] as of the date of publication having regard to the PSA’s common general knowledge.
(b) The Patent Act promotes adherence to the language of the claims. This allows the claims to be read in the manner the inventor is presumed to have intended, and in a way that is sympathetic to accomplishing the inventor’s purpose, which promotes both fairness and predictability.
(c) The whole of the patent’s specification should be considered to ascertain the nature of the invention, and the claim construction must be neither benevolent nor harsh, but should instead be reasonable and fair to both the patentee and the public. The focus of the validity analysis is on the claims; specifications will be relevant only where there is ambiguity in the claims (AstraZeneca Canada Inc v Apotex Inc, 2017 SCC 36 [AstraZeneca SCC] at para 31).
(d) Claim construction must be the same for the purpose of validity and for the purpose of infringement.
B. Person of Ordinary Skill in the Art [PSA]
[61] In order to construe the claims in issue, the Court must define the PSA. The PSA is unimaginative and uninventive, but reasonably diligent in keeping up with advances (Pfizer Canada Inc v Teva Canada Limited, 2017 FC 777 at para 185). The PSA is not incompetent, and brings background knowledge and experience to the workbench (AstraZeneca Canada Inc v Apotex Inc, 2015 FC 322 [AstraZeneca FC] at para 276). The PSA is not stripped of the ability to pursue reasonable and logical enquiries, and can make deductions based on the information available (Jay-Lor International Inc v Penta Farm Systems Ltd, 2007 FC 358 at para 75, citing Beloit Canada Ltd v Valmet Oy (1986), 8 CPR (3d) 289 at 294 (FCA)).
[62] Swist says that the PSA is a person with a bachelor’s degree in petroleum engineering or similar technical discipline, with three to five years of practical experience of production from hydrocarbon reservoirs. Dr. Carey would extend the practical experience of the PSA to five years, and would insist on experience of thermal recovery processes. Dr. Gates similarly described the PSA as someone with an undergraduate degree in chemical or petroleum engineering with five years of work experience relating to the extraction of bitumen from oil sands, with personal experience of the operation of SAGD well pairs and/or CSS wells and an understanding of both.
[63] I agree with MEG that the PSA has practical experience of SAGD and CSS, although I see no reason why this could not be acquired in three years rather than five. I therefore conclude that the PSA is someone with an undergraduate degree in chemical or petroleum engineering and three to five years of practical experience relating to the extraction of bitumen from oil sands, including the operation of SAGD and CSS.
C. Common General Knowledge of the PSA
[64] The patent must be construed taking into account the “common general knowledge” shared by persons skilled in the art (Free World Trust at para 44; Whirlpool at para 53). This is the knowledge possessed by the PSA at the relevant time, and includes what the PSA would reasonably have been expected to know (Whirlpool at para 74). The common general knowledge of the PSA must be established with evidence on a balance of probabilities, and cannot be assumed (Uponor AB v Heatlink Group Inc, 2016 FC 320 at para 47). Common general knowledge may include the information presented as background knowledge in the patent itself (Newco Tank Corp v Canada (Attorney General), 2015 FCA 47 at para 10).
[65] The assessment of common general knowledge is governed by the principles found in Eli Lilly & Company v Apotex Inc, 2009 FC 991 at paragraph 97 (aff’d, 2010 FCA 240), citing General Tire & Rubber Co v Firestone Tyre & Rubber Co, [1972] RPC 457 (UKHL) at pages 482 to 483:
(a) the common general knowledge imputed to the PSA must be carefully distinguished from what in patent law is regarded as public knowledge;
(b) common general knowledge is a different concept derived from a common sense approach to the practical question of what would in fact be known to an appropriately skilled addressee—the sort of person, good at his or her job, who could be found in real life;
(c) individual patent specifications and their contents do not normally form part of the relevant common general knowledge, although there may be specifications which are so well known that they do form part of the common general knowledge, particularly in certain industries; and
(d) scientific papers only become general knowledge when they are generally known and accepted without question by the bulk of those who are engaged in the particular art; in other words, when they become part of their common stock of knowledge relating to the art.
[66] Swist acknowledges that the common general knowledge encompasses known heavy oil recovery techniques, such as SAGD and CSS. However, Swist cautions that not every patent specification relied upon by MEG is necessarily part of the common general knowledge. There is no dispute that United States Patent No US 7,556,099 [Arthur Patent], which is discussed in the 746 Patent, forms a part of the PSA’s common general knowledge.
[67] According to MEG:
The common general knowledge of the Skilled Person is largely undisputed – Dr. Rao agreed with MEG’s experts’ opinions, with minor, immaterial additions. The common general knowledge include[s] adjacent SAGD well pairs, wells between those well pairs, the operation of CSS, and injecting fluid into production wells prior to their operation as production wells. Dr. Rao further admitted that: (i) determining well locations based on reservoir properties is “driven by the well properties and informed by simulations. This is in the common general knowledge.”; (ii) “[a]ny well intended to become a production well will get warmed up, including the SAGD well pairs before SAGD operation. … That’s common general knowledge”; and (iii) heating up an offset well for some period of time, including days, weeks, a month or a few months, prior to operating it as a production well is common general knowledge [citations omitted].
[68] I therefore conclude that the common general knowledge of the PSA encompasses the operation of SAGD and CSS methods to recover oil, including the theoretical and practical considerations described by MEG in the preceding paragraph, and disclosed in the Arthur Patent.
D. Claim Terms Needing Construction
[69] Claim construction is a matter of law for the judge. Expert evidence is necessary only where the meaning of a term is not apparent based on a reading of the patent specification (Johnson & Johnson Inc v Boston Scientific Ltd, 2008 FC 552 at para 92).
[70] Claim 1 is the only independent claim alleged to be infringed. Claims 2 to 8 depend from claim 1. A dependent claim incorporates the elements of the independent claim by reference.
[71] I have found expert evidence to be useful in construing the following terms in claims 1 and 2:
“well pairs”
“third well”
“zone of increased mobility”
“communication”
“generating”
“depletion zone”
[72] My construction of these terms is below.
(1) “well pairs”
[73] Claim 1 describes:
1. A method comprising:
providing first and second well pairs separated by a first predetermined separation, each well pair comprising:
a first well within an oil bearing structure; and
a second well within the oil bearing structure at a first predetermined vertical offset to the first well, substantially parallel to the first well and a first predetermined lateral offset to the first well.
[74] Swist says that the first element of claim 1 describes traditional SAGD, and the PSA reading claim 1, without an eye to infringement or validity, would readily recognize the configuration of the well pairs as SAGD. As of the relevant date, SAGD was a well known and proven method that specifically used a “well pair” comprising an injector and a producer. Furthermore, the 746 Patent explicitly describes its invention as a modification of SAGD:
[…] the inventor has established that beneficially pressure differentials may be exploited to advance production from SAGD wells by increasing the velocity of heavy oils, that pressure differentials may be exploited to adjust the evolution of the steam chambers formed laterally between laterally spaced wells to increase the oil recovery percentage, and provide SAGD operating over deeper oil sand formations.
[75] In his expert report, Dr. Gates wrote that the PSA “would understand that the 746 Patent generally relates to a method of practicing SAGD with an additional well positioned between two SAGD well pairs”. He also observed that the PSA “would understand that a fluid is injected into each injection well and that the fluid injection heats the bitumen surrounding the injection well, as was commonly understood to be done in SAGD operations”. Dr. Carey expressed the view in his expert report that the PSA “would understand that this operation of the second wells is consistent with the operation of a SAGD well pair, described in the 746 Patent, which has an upper injection well (first well) and a lower production well (second well)”.
[76] In his oral testimony, Dr. Carey refined his opinion to assert that the PSA would understand that the well orientation described in claim 1 encompasses SAGD, but is not limited to SAGD:
[…] there are other gravity operations and processes that go on that use the same well pairs, the same well pair configuration, but they do not use steam. And, therefore, they would not be classified as SAGD.
[77] However, according to Dr. Carey’s expert report, “injection of steam, water, carbon dioxide, nitrogen, propane, or methane, or a mixture of those fluids via the injector well is a known component of traditional SAGD”. The Arthur Patent refers to the use of steam and natural gas as mobilizing fluids in SAGD.
[78] MEG notes that claim 1 provides for a “vertical” and “lateral” offset between the first and second wells, and this permits a “zero” offset in both instances. The disclosure of the 746 Patent describes well pairs with zero vertical offset (Figure 2268 and 2369), and zero or no horizontal offset (Figures 7A, 8, 9, 16, 19-21 and 2470), as embodiments of the invention.
[79] In oral testimony, Dr. Carey admitted that SAGD may be operated in a wide range of different configurations, including with the producer well above the injector well: “[…] in the normal understanding of it, yes, the bottom well would be the producer, but I have seen patents […] that [have] the injector at the bottom and the producer at the top.” Asked to comment on Invention-4 of the Kuru Report, Dr. Gates said: “Now, the thing is, in this case, the well pairs are – they have zero vertical offset, and they have a horizontal offset. So, you know, it is still a SAGD well pair, but this time with a horizontal zero offset and a zero vertical offset in the configuration.”
[80] The 746 Patent describes Figures 23A and 23B as follows:
Figures 23A and 23B depict simulation results for a pressure assisted oil recovery process according to an embodiment of the invention with horizontally disposed SAGD well pairs operating with injectors at lower pressure than laterally disposed intermediate wells such as depicted in Figure 2.
[81] I therefore prefer the construction of “well pairs” proposed by Swist. Read as a whole, the 746 Patent relates to a modification of traditional SAGD that is intended to increase oil recovery percentage and reduce the time required for extraction. The well pairs described in claim 1 are traditional SAGD well pairs.
(2) “third well”
[82] Claim 1 envisages:
providing a third well within the oil bearing structure at a predetermined location between the first and second well pairs;
[83] Another reference to the “third well” appears later in claim 1:
generating a large singular zone of increased mobility by selectively injecting a second fluid into the third well […]
[84] In his expert report, Dr. Rao expressed the view that the “third well” in claim 1 “is not defined to have any other necessary characteristics other than being capable of being used to inject a fluid into the oil bearing structure, as described further in the claim language.” However, in his oral testimony Dr. Rao rejected the proposition that the “third well” could potentially be a CSS well.
[85] Dr. Gates and Dr. Carey both maintained that the “third well” could indeed be a CSS well, because in the initial stage of its operation cycle,