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Supreme Court of Canada Denies Leave to Appeal Patent Decision on Good Faith

Today the Supreme Court of Canada denied leave to appeal the decision in Corlac Inc. et.al. v Weatherford et.al. (2011 FCA 228).

On July 18, 2011, the Federal Court of Appeal (“FCA”) dismissed Corlac’s appeal of a trial judgment declaring Canadian Patent No. 2,095,937 (“937 Patent”) to be valid and infringed.  At trial, Corlac argued that the patent was invalid on a number of grounds, including “misrepresentations to the Patent Office” pursuant to subsections 53(1) and 73(1)(a) of the Patent Act.  The trial Judge held that several claims were infringed and rejected Corlac’s allegations of invalidity.  The FCA dismissed Corlac’s appeal and upheld the validity of the 937 Patent.

In so doing, the FCA made several findings in respect of misrepresentations to the Patent Office pursuant to subsection 73(1)(a) of the Patent Act.  Subsection 73(1)(a) states:

An application for a patent in Canada shall be deemed to be abandoned if the applicant does not

(a) reply in good faith to any requisition made by an examiner in connection with an examination, within six months after the requisition is made or within any shorter period established by the Commissioner.

Corlac argued that “if it is established (at any time) that an applicant did not respond in good faith to a requisition during the prosecution of the application, then by operation of law, the application is deemed to have been abandoned. Consequently, if the application was abandoned by operation of law and was not reinstated within the requisite time, the 937 Patent could not properly have been issued and it must be declared invalid.”

The FCA rejected these arguments. It held that Canadian patent law is entirely statutory and “the grounds for attacking the validity of a patent are delineated in the [Patent] Act.”  The FCA held that the “fundamental flaw” in Corlac’s argument was its failure to differentiate between a patent application and an issued patent.  The FCA held that subsection 53(1) applies to issued patents, whereas subsection 73(1)(a) operates only during the prosecution of a patent application. The Court noted that these provisions are “mutually exclusive”. Subsection 73(1)(a) is “extinguished once the patent issues” and to find otherwise would result in “absurdity”.

The FCA held that the Commissioner of Patents is to determine whether a response to a requisition is made in good faith pursuant to subsection 73(1)(a) and not the Court.  The FCA held that to the extent that prior NOC cases had held that section 73(1)(a) can be used to attack the validity of an issued patent, “they should not be followed.”

As is the custom, the Supreme Court did not release reasons for its leave application decision.