On July 20, 2016, Justice Boswell released his Judgment and Reasons in SALT Canada Inc. v. John W. Baker, 2016 FC 830, dismissing SALT’s application for a declaration pursuant to section 52 of the Patent Act that the owner of Canadian patent no. 2,222,058 be changed to SALT. The 058 Patent is entitled “Method of Improved Landfill Mining”. It was filed in 1996, issued in 2005, and expired on May 24, 2016. The listed inventor/applicant is Michael Markels Jr and the listed owner is John W. Baker.
Series of Assignments
A series of assignments relating to the ownership of the 058 Patent were entered into over several years, dating back to 1997. In 1997, Markels signed an agreement purportedly assigning the 058 Patent to ECS.
In 2005, ECS signed an assignment agreement of its own with Tomann, purporting to assign the rights of the 058 Patent to Tomann.
In November 2007, the 058 Patent was to reassigned to Markels, concurrent with the wind-down of ECS. Baker attended as Markels proxy with an apparent desire to eventually obtain the 058 Patent for himself.
In December 2007, Baker entered into an agreement and assignment with Markels.
In 2008, Baker signed a separate assignment with Tomann to obtain the 058 Patent, and then took steps to register his ownership with the Patent Office.
In 2010, Markels and Baker amended their December 2007 agreement purporting to confirm the terms of the December 2007 agreement and modify the royalty payments.
In 2015, Markels signed an agreement with SALT, purporting to assign the rights of the 058 Patent as part of the agreement. Markels signed a reassignment but Baker did not.
The two 2015 agreements were filed with the Patent Office in May 2015, and Baker filed an objection. The Patent Office refused to record the reassignment because it was not executed by the listed owner, Baker. SALT then commenced the present application seeking to record the reassignment between Markels and Baker.
Generally, the Federal Court will have jurisdiction over a case that primarily concerns patent law, but not over contract law. Justice Boswell determined that the Federal Court did not have jurisdiction to consider the issue of whether the reassignment should be recorded by the Patent Office. He considered sections 20 and 52 of the Patent Act, which allow the Federal Court to vary or expunge entries in the records of the Patent Office that relate to the title of a particular patent.
In contested proceedings where the Federal Court is asked to determine the proper owner of a particular patent, it lacks jurisdiction where determining the ownership depends upon the application and interpretation of contract law principles, unlike in uncontested proceedings where the reason to vary the entry may be due to an error or technical reason).
Justice Boswell found the case indistinguishable in principle from RLP Machine & Steel Fabrication Inc v DiTullio, 2001 FCT 245), where Justice Heneghan stated:
 The Applicant is seeking a declaration of ownership of the patent. It claims to be the owner of the patent but can only refer to a series of contracts in support of its claim. It is necessary for a court to interpret those contracts to determine if indeed the Applicant acquired ownership of the patent in issue. This Court has no inherent jurisdiction to adjudicate upon private contracts which are not otherwise within its jurisdiction.
An order to vary the records of the Patent Office on its own would appear to be within the Federal Court’s jurisdiction. However, the issuance of such an order is secondary to and dependent upon a prior interpretation of the various assignment agreements. Justice Boswell concluded that the main issue relates to a matter of contract law, namely, the ownership of the 058 Patent in view of the assignment agreements, and did not relate to patent law.
Baker was awarded costs in a lump sum of $10,000.
A copy of the decision may be found here.