In Pollard Banknote Limited v BABN Technologies Corp, Justice Locke held that Canadian Patent No. 2,752,551 was invalid and, in the alternative, that it was not infringed by Pollard.
SG (the successor to BABN) owns Canadian Patent No. 2,752,551, which relates to a security feature for scratch-off lottery tickets: a two-dimensional bar code that is hidden under a scratch-off area. It issued following a lengthy and contentious prosecution in the Patent Office, including several protests filed by Pollard. After the 551 Patent issued, Pollard challenged the validity of the 551 Patent and SG counterclaimed for infringement.
Claim 1 of the 551 Patent claims a lottery ticket comprising “a removable continuous scratch-off coating” that covers both the play area and the bar code. At trial, Pollard argued that “continuous” meant that the play area and bar code had to be under a single scratch-off area. SG argued that it meant that the bar code had to be entirely covered by one or more scratch-off areas.
Justice Locke interpreted the 551 Patent without regard to information from the prosecution history of the 551 Patent, consistent with the Supreme Court’s decision in Free World Trust. Although he had difficulty with the interpretations of “continuous” advanced by both parties, Justice Locke accepted SG’s interpretation. This interpretation led Justice Locke to conclude that claim 1 of the 551 Patent is not ambiguous.
However, Justice Locke subsequently considered the impact the file wrapper of the 551 Patent would have had on its interpretation. Justice Locke noted that SG’s proposed construction was “breathtaking” in light of its prior representations to the Patent Office that “continuous” had the meaning advanced by Pollard in order to distinguish the prior art.:
 But SG went further in the March 6, 2013 Amendment. It distinguished the Camarato Application from the invention described in the 551 Patent on the basis that the Camarato Application “clearly does not teach coating the bar code and the play area indicia with a continuous scratch off coating” [emphasis in original]. Hence, SG argued that the phrase “a removable continuous scratch-off coating covering both the printed indicia in said play area and the bar code” in claim 1 excluded the form of coating shown in the Camarato Application. This can only mean that this phrase was intended to be limited to a single scratch-off coating. This argument was obviously successful, since it was followed by a notice of allowance.
 After having reviewed the March 6, 2013 Amendment which led to the issuance of a patent on a patent application which, along with the parent application, had been pending before the Patent Office for almost 17 years and which had been rejected six times, it is breathtaking to see SG now attempt not just to take a different position on the construction of claim 1, but also to argue that, by doing so, it does not reintroduce the problem of obviousness in light of the Camarato Application that it had previously argued was avoided applying its first position.
 This case highlights a potential risk in taking a simpler approach to claim construction by ignoring extrinsic evidence, such as the prosecution history of the patent in suit. As revealed in my analysis above, excluding such extrinsic evidence resulted in a very different construction of the phrase “a removable continuous scratch-off coating covering both the printed indicia in said play area and the bar code” than would otherwise have been the case.
Justice Locke ultimately concluded that both claims of the 551 Patent were invalid: claim 1 because it was obvious and claim 2 because it was ambiguous.
A copy of the decision may be found here.