50 Victoria St. confirmation by mail Gatineau, Quebec K1A 0C9

Transcription

1 - 1 - September 8, 2017 The Commissioner of Patents, submitted electronically 50 Victoria St. confirmation by mail Gatineau, Quebec K1A 0C9 Dear Commissioner: Attn: A. Lajoie Re: Proposed Patent Rules This letter is submitted in response to the Request for Public Comment in respect of the proposed new Patent Rules. The new Rules are proposed at a time of profound change and opportunity in Patent Law, and are intended to meet Canada s obligations under the Patent Law Treaty. They are also proposed against the background of a desire to enhance patent quality; and at a time when there is concern that Canada may not be advancing as quickly as other technologicallyadvanced nations in facing the challenges of technological innovation in the knowledgebased economy of the future. Our firm understands and acknowledges the very substantial effort that personnel at the Patent Branch have devoted to this large task, and commends the Office on the evident conscientiousness of that effort. The proposed Rules are of great interest to the profession. Given the effort the Office has put into preparing the Rules, review has been undertaken by the profession with corresponding attention. In that regard, our firm endorses the extensive detailed analysis prepared by, and submitted on behalf of, the Intellectual Property Institute of Canada. 1. Commentary Guided by Fundamental Principles This commentary is not intended to repeat the highly detailed points articulated in the IPIC submission, but rather to draw attention to points of general principle. First, we strongly support efforts to enhance patent quality. Separating the wheat from the chaff on substantive art-based merit is fundamental to examination. To that end, examination should focus examination on the substantive, art-based merits, and not on nonprior-art-based administrative tasks. The duty to the public is as much to grant valid claims

2 - 2 - when the requirements of the Act have been met under s. 27(1) as to reject invalid claims under s. 40. Adherence to this foundational truth is the key to advancing patent quality. Second, in our view clarity, simplicity, and ease-of-use are important objectives. It appears, however, that the proposed Rules substantially increase the complexity, number and uncertainty of due dates, and apply varying standards of care to different types of due dates. Third, the proposed new Rules retain the Problem and Solution approach to Examination. This approach merits early review in light of the recent AstraZeneca decision Avoiding Loss of Rights Due to Incorrect Correspondent We also applaud the introduction of Notice and correction periods in respect of the appointment and change of appointment of agents and representatives. Substantive property rights should not be put in danger merely because of confusion with respect to the entitlement or appointment of persons making bona fide attempts to comply with the law. This is clearly a welcome improvement over existing practice. We are concerned, however, that there may be confusion in the proposed Rules, as discussed in the IPIC submission. 3. More Due Dates; Different Standards of Care The proposed Rules reduce the times permitted to respond to requisitions from the office; introduce different levels of a standard of care to be met within the differing due dates; and, generally, introduce a much higher level of complexity to the docketing of due dates. We understand that the new Notice provisions have been introduced to comply with the Patent Law Treaty; and, as a matter of basic fairness to applicants, to prevent silent abandonment of applications. Advancing basic administrative fairness is always welcome. However, it is statistically certain that with greater complexity of the notice and reinstatement provisions; a larger number of due dates; and greater uncertainty in those due dates, the likelihood of due dates being missed, of applications being abandoned, and of substantive rights in meritorious inventions being lost on non-prior-art-based grounds may be greatly increased. Inevitably this will result in many more occurrences of substantive rights being forfeited other than through the merits of prior-art based examination. 4. The Dangers of Loss of Rights on Non-Prior-Art-Based Grounds As Dickson J., remarked in Consolboard, it is important to avoid being too astute in the making of technical objections 2 Any non-art-based invalidation results in the dedication of the patent disclosure to the public. The relevant public is almost always the inventor s competitors. When patent rights are lost on administrative grounds, the probability of loss 1 AstraZeneca Canada Inc. v. Apotex Inc., 2017 SCC 36 2 Consolboard v. MacMillan Bloedel (Sask.) Ltd., [1981] 1 SCR 504 at 517; 56 CPR (2d) 145; 122 DLR(3d) 203, at SCR , per Dickson J.

3 - 3 - falls indiscriminately, without regard to the substantive merit (or lack of merit) of the invention, contrary to the central purpose of examination to weed the wheat from the chaff. As noted in Burton Parsons, 3, the inventor s competitors are rarely misled as to the true nature of the disclosure. The Applicant has met the patent bargain by disclosing the invention. That disclosure cannot be undone. While there is some residual debate about the economic basis of patent law, there is clear consensus that patent law does not exist for the purpose of transferring an inventor s rights to their competitors as a windfall. Moreover, shortening time periods may not be to public advantage. For many applicants, including Canadian companies, the first objective is to obtain protection in their major market, most often the United States. Substantive analysis on the prior-art-based merits usually occurs earlier in the United States than Canada. This benefits Canada in several ways. Earlier US search and examination results are available on Public PAIR, often making Canadian examination easier. Roughly 30% of US applications become abandoned. When the US case is abandoned, any Canadian case is also usually abandoned. This attrition saves the Office the effort of unnecessary examination. Meanwhile, whether examined or not, the Applicant pays maintenance fees. Those fees may prompt deadwood to be cleared where the commercial prospects of the invention wither, again, saving the Office the time, effort and expense of examination. In general the customary delay is benign. The majority of applications do not become commercially contentious. Where they do, a third party wishing greater certainty can, anonymously and at low cost, not only request examination, but also expedited examination. In Summary, delaying Canadian prosecution until after the completion of US prosecution may serve substantially to conserve CIPO resources, without harming the public. Therefore, shortening time periods under the Rules may not be in Canada s interest. 5. Price, Demand, and Creating a Friendly Environment for Innovation For most applicants, an issued US patent is more valuable than a Canadian patent. Where the market is continental, US protection may be sufficient. Where there is a choice, the consequence of that economic reality may mean that the production, sales, and distribution of the product or service, and the associated employment, will be US-based. 3 Burton Parsons Chemical Inc. v. Hewlett Packard [1976] 1 SCR 555, 17 CPR (2d) 97 per Pigeon J.: It does not seem to me that inventors are to be looked upon as Shylock claiming his pound of flesh. In the present case, there was an admitted meritorious invention and [the defendant]... brazenly appropriated it. It was in no way misled as to the true nature of the disclosure nor as to the proper methods of making a competing cream....

4 - 4 - No amendments to the Patent Act or Patent Rules can change the economic truth that price is a function of demand. If the cost and difficulty of obtaining a Canadian patent is too high relative to its perceived value, potential applicants may forego that protection, and take their business and the jobs that go with it to a more friendly jurisdiction. Unlike the United States, Canada is therefore a price taking jurisdiction, rather than price setting. If Canada raises the effective price of protection either explicitly through fees or implicitly through pricklier regulatory procedures the predictable effect will be to chase the business, and jobs, of innovators out of Canada, be it to California, or Washington State, or Massachusetts. This accords with empirical observation over the last decade, and may be a factor accounting for Canada s relative under-performance in innovation. For all of these reasons, to be internationally competitive, simplicity and ease-of-use must be attributes of the Canadian patent regime. Canada needs a user-friendly regime in which prosecution typically occurs after US prosecution is complete, and that is highly forgiving in respect of non-prior-art-based administrative hurdles. Raising non-prior-artbased obstacles to protection in Canada does not raise patent quality. It merely encourages meritorious innovators to go elsewhere. 6. Reinstatement and Varying Standards of Care The establishment of a due care standard requires the submission of evidence that the Office has neither the resources nor the legal training to assess; and that inevitably place a non-prior-art-based blemish on enforceability of otherwise meritorious rights. Adding uncertainty-generating standards undermines the public notice function of granting patent rights, and the abilities of the patent owner and the public to deal with those rights. The Commissioner may recall that Conflict proceedings were abolished for exactly these reasons. They generated controversy. They were exceptionally expensive. They consumed disproportionately large resources of the Office. They undermined the public notice function. They cast a shadow on the value and enforceability of patent rights. They rarely advanced justice. Often enough, they achieved the opposite. In that light, we request that the Commissioner retain reinstatement as-of-right on payment of a penalty fee either as the only standard of care for all applicable reinstatement or time extension periods in the regulations, or as an alternative to the submission of any statement or other evidence. If the Office wishes to have a short due date (e.g., three months) on notice; and a longer (e.g., one year), fall-back date before irrevocable lapse, the Office may consider charging a higher reinstatement fee for the longer period. Verifying payment of a fee is consonant with simplicity and clarity. It does not take specialised legal expertise. It does not consume disproportionate resources to weigh evidence. It neither undermines the public

5 - 5 - notice function nor casts a shadow upon the substantive property rights defined by the claims. It is fully consistent with sound principles of patent law. Accordingly, for example, newly proposed Rule 150(4) could be amended to read: (4) In respect of an international application, if an applicant fails to comply with the requirements of subsection (1) and, if applicable, subsection (3) before the end of 30 months after the priority date, the applicant is deemed to have so complied within that time period if (a) before the end of 12 months after that time period, the applicant (i) submits to the Commissioner a request that the rights of the applicant be reinstated with respect to that international application, and either (A) a declaration that the failure was unintentional and a statement of the reasons for the failure; or (B), pays the fee set forth in Schedule II at item [... ]. It would be consistent with the requirements of the Patent Law Treaty and with existing practice. Similar amendments could be made in each place where the proposed Rules would require any such statement, such as at Rules 103 and 150(5)(b). 7. Problem and Solution Practice Notice PN , instructs the Examiner to find the invention by reading the specification. The Examiner is to identify the problem addressed by the invention and the essential elements of the solution. If any of the elements deemed essential by the Examiner are missing, the claims will be rejected as lacking utility. The draft retains Rule 59(1)(d). The proposed Rules were in final review before the recent decision in AztraZeneca v. Apotex. Every criticism in AstraZeneca of the comprehensively discredited Promise doctrine applies equally to Problem-and-Solution. AstraZeneca clearly states that the Promise doctrine is not good law. That conclusion applies equally to Problem-and-Solution. (a) Problem and Solution is inconsistent with Consolboard There is no requirement in the Patent Act that the specification include either an articulation of a Problem, or a Solution. On the contrary, under Consolboard 4, the specification is required only to answer the questions: What is your invention, and How do you do it. Given that an inventor is neither required to understand why the invention works, nor to state its utility, Problem-and-Solution is clearly contrary to Consolboard. 4 Consolboard v. MacMillan Bloedel (Sask.) Ltd., [1981] 1 SCR 504 at 517; 56 CPR (2d) 145; 122 DLR(3d) 203.

6 - 6 - (b) Problem and Solution Confuses the Specification and the Claims A cornerstone principle of peripheral claiming, embodied in s. 27(4) of the Act, and reinforced repeatedly by S.C.C. decisions, e.g., Whirlpool 5, Free World Trust 6, and Sanofi 7, is that the starting point of all purposive construction is the claims. 8 The claims, and only the claims, define the invention 9. Problem-and-Solution confuses of the role of the claims under s. 27(4), with the role of the disclosure under s. 27(3). The claims and the disclosure perform separate and distinct functions. While the claims must be supported by the disclosure, the invention is not defined by the disclosure. The disclosure provides sufficient information to a worker skilled in the art to practice the invention when the monopoly has expired 10. That is how the inventor meets his duty to inform the public. The claims define the scope of the monopoly, thereby giving public notice of where it is safe to tread 11. (c) Purposive Interpretation is About the Claims In respect of patent interpretation: It is the claims that are to be given a purposive construction. This results in a determination of which elements of the claims are essential and which are non-essential. The meaning of the words in a patent, including the claims, must be determined in context. The patent claims must be construed in the context of the specification as an whole. 5 Whirpool Corp. v. Camco Inc. (2009), 9 C.P.R. (4 th ) 129 (S.C.C.): [t]he key to purposive construction is therefore the identification by the court, with the assistance of the skilled reader, of the particular words or phrases in the claims that describe what the inventor considered to be the essential elements of his invention. (Emphasis added.) 6 Free World Trust c Electro Sant e Inc, [2000] 2 SCR 1024 [Free World Trust]. 7 Sanofi-Synthelabo Canada Inc v Apotex Inc, [2008] 3 SCR 265, 2008 SCC Free World Trust: The claims language will, on purposive construction, show that some elements of the claimed invention are essential and others are non-essential. The identification of elements as essential or nonessential is made:... (iv) according to the intent of the inventor, expressed or inferred from the claims, that a particular element is essential, irrespective of its practical effect;... (Emphasis added.) 9 the forbidden field must be found in the language of the claims, and not elsewhere. Electric & Musical Industries v. Lissen (1938), 56 PRC 23 (H.L.) per Lord Russell of Killowen, cited in Riello Canada v. Lambert (1986), 9 C.P.R. (3d) 324 (FCTD); Alberta Inc. v. Q Max Solutions Inc., (2001), 14 CPR (4 th ) 129 (FCTD). See also: The claims define the scope of the monopoly and may be read with the disclosure in the earlier part of the patent in order to understand what the claims say, but it is the claims, and the claims alone that define the monopoly. Reliance Electric Co., v. Northern Telecom Ltd. (1993), 47 CPR (3d) 55 at pp (FCTD); Hi-Qual Manufacturing Ltd. V. Rea s Welding and Supplies Ltd. (1994), 55 CPR (3d) 224 at 241 (FCTD). (Emphasis added.) 10 See Whirlpool and Consolboard. 11 Whirpool, supra at para. 42 per Binnie J.

7 - 7 - The patent specification is directed to persons skilled in the art, not to grammarians, etymologists, or to the public generally. 12 Reading claims in context does not mean adding features from of the disclosure. Rather, it means employing the disclosure to determine the meaning of the words used in the claims: [R]esort to the specification is limited to assisting in comprehending the meaning of words or expressions contained in the claim but not to changing the meaning; Recourse to the remainder of the specification is (a) permissible only to assist in understanding terms used in the claims; (b) unnecessary where the words of a claim are plain and unambiguous; and (c) improper to vary the scope or ambit of the claims 14. If the words of the claim are plain and unambiguous it will not be possible to expand or limit their scope by reference to the body of the specification. In such a case "recourse to the body of the specification for explanation, qualification or extension is neither required nor is legitimate. 15 The current procedure of seeking essential elements in the detailed disclosure is clearly contrary to long-established law. Under s. 27(4) of the Act, the Applicant chooses the language of the claims 16 : However, rejections under Problem-and-Solution, often include statements that essential elements of the disclosure must be added to the claims. This process makes the Examiner the claim draughtsman. Neither the Act or nor case law supports this practice. (e) Problem-and-Solution In Non-Art-Based The problems of non-art-based rejection all apply to Problem-and-Solution. Burton Parsons explains that when claims are rejected, or narrowed on the basis of non-prior art based grounds, the effect is typically to hand the inventor s property to his or her competitors as a windfall, without regard to the merits of the invention. Clearly, such a result is not among the known purposes of patent law. Problem-and-Solution only becomes commercially important when (a) the Applicant s claims are already clear of the prior art; and (b) the inventor s competitors are 12 Whirlpool, supra, at para 53, per Binnie J. 13 (Reliance Electric Industrial Co v Northern Telecom Ltd (1993), 47 CPR (3d) 55 (Fed TD) at pp 61-61; Hi-Qual Manufacturing Ltd v Rea s Welding & Steel Supplies Ltd (1994), 55 CPR (3d) 224 (Fed TD) at Procter & Gamble Co v Calgon Interamerican Corp (1982), 61 CPR (2d) 1 (Fed CA). 15 Hy Kramer Canada Ltd. et al. v. Lindsay Specialty Prods. Ltd. et al. (1986) 9 C.P.R. (3d) 297 (F.C.T.D) at p. 310) 16 The words chosen by the patentee are read in the sense the inventor is presumed to have intended, and in a way that is sympathetic to the accomplish the inventor s purpose expressed or implicit in the text of the claims. (Calgon Carbon Corp. v. North Bay (City) (2006), 56 CPR (4 th ) 281 FC at para. 83. (Emphasis added.) The language in which a patentee has cast his claim has been referred to by the courts as a fence within which he claims protection from trespass (Reliance Electric Co., v. Northern Telecom Ltd. (1993), 47 CPR (3d) 55 at pp (FCTD); Hi-Qual Manufacturing Ltd. v. Rea s Welding and Supplies Ltd. (1994), 55 CPR (3d) 224 at 241 (FCTD). (Emphasis added.)

8 - 8 - infringing the Applicant s otherwise allowable claims: The behaviour of the competitors belies the rejection. The injustice of Problem-and-Solution in then evident. (f) Summary Problem-and-Solution is the Promise doctrine by a different name. It has no basis in the origins or history of Canadian patent law. It is contrary to s. 27(4) of the Patent Act. It defies S.C.C. precedent in Consolboard, Whirlpool, and Free World Trust. It is contrary to the economic principles that underpin patent law generally, as explained in part in Burton Parsons. It permits meritorious inventions to be forfeited to the inventor s competitors. It allows the Examiner subjectively to second-guess not only the Applicant s claims, but also the verdict of the marketplace. It makes the Examiner the de facto draughtsman of the claims, outside the powers of the Commissioner. It may be some time before there is another opportunity to amend the Rules. In that light, and for all of these reasons, and given the evident applicability of AstraZeneca, we respectfully request that the Commissioner take this opportunity pro-actively to repeal s 59(1)(d) of the Patent Rules without further delay. 8. Concluding Commentary We again commend the Office on the very substantial effort that is evident in the draft revised Patent Rules provided for public comment. We join with the Commissioner in seeking improvement in the Regulations, and in the pursuit of patent quality more generally. We hope that these amendments may contribute to an enhancement in Canada s ability to compete as a leading technological innovator. Yours,