The federal government’s recent omnibus budget bill, Bill C-86 tabled October 29th, 2018, proposes significant changes to Canada’s IP laws. Division 7 of the Bill is intended to implement many aspects of the government’s IP strategy, announced in April 2018. The Bill targets the Patent Act, the Trade-marks Act, and Copyright Act; provides for a new College of Patent Agents and Trade-mark Agents Act; and effects changes to diverse legislative schemes impacting the IP regime, including privacy and bankruptcy.
Below, we have outlined some of the most significant changes likely to affect the patent-intensive life sciences industries. To read more about other IP changes in Bill C-86, be sure to visit our Brand Protection Blog and watch for our forthcoming IP Monitor post.
The patent-law changes in Bill C-86 are not specifically directed at pharmaceutical patentees, but have the potential to significantly affect this area of litigation. In general, each of the changes below applies in parallel to certificates of supplementary protection (CSPs), which are either directly referenced in the new provisions or addressed by coordinated amendments in other parts of the Act. For simplicity, we have referred only to patents below.
Prosecution history (file-wrapper) admissible for claims construction
The government intends to make a patent’s file wrapper admissible on the issue of claims construction in litigation, overturning a long-standing Canadian Supreme Court precedent. Here are the details:
- The proposed new provision, section 53.1, is limited to written communications (or parts thereof) and can only be used to rebut a patentee’s representations in the action regarding claims construction.
- The prosecution history of a divisional application is deemed to include that of the original application before that divisional is filed.
- The prosecution history of a reissued patent is deemed to include both that of the application for the patent that was surrendered and from which the reissued patent results, as well as the application for reissuance.
The proposed transitional provisions indicate that litigants will be able to rely on this provision in any action or other proceeding that has not been finally disposed of on the date that it comes into force.
Revised and re-stated exceptions to infringement
The proposed amendments include two changes to the statutory exceptions to infringement provided by the Patent Act:
- Experimental use. The government proposes to add a new provision stating that an act committed for the purpose of experimentation relating to the subject-matter of a patent is not an act of infringement.
- The exception is contained in new section 55.3, and would stand alongside the existing exception to infringement for activities reasonably related to seeking government regulatory approval, which remains in subsection 55.2(1) of the Act. Although many of the details regarding implementation have been left to regulations, it appears that these amendments are intended to codify and replace an existing common law exception.
- The proposed transitional provisions indicate that the new exception will apply to any action or other proceeding that has not been finally disposed of on the date that it comes into force.
- Continued acts first undertaken prior to the claim date. The proposed amendments would replace the existing prior-use exception in section 56 with a new provision.
- Notably, the revised section 56 requires that the prior act was undertaken in good faith. It does not apply if the person claiming under the provision obtained knowledge of the subject-matter of the claim directly or indirectly from the applicant and knew that the applicant was the source of the knowledge.
- Revised section 56 also extends protection to situations where “serious and effective preparations” to commit such an act were committed prior to the claims date, and includes flow-through protection for third-party purchasers/users.
- The proposed transitional provisions indicate that the current version of section 56 will continue to apply in respect of any action of other proceeding concerning a patent filed after October 1, 1989 (i.e., “New Act” patents), provided the proceeding was commenced before October 29, 2018.
Bill C-86 provides for regulations stipulating requirements of a written demand concerning a patent, apparently addressing a concern regarding the use of IP demand letters as a means to extort funds. Bill C-86 also provides a right of action for persons who receive a written demand that does not comply with the regulations, or who are aggrieved by another person’s receipt of the same. This provision extends to letters in respect of any invention patented in Canada or elsewhere, provided the letter is received by a person in Canada and meets other prescribed requirements. Under special circumstances, a corporation’s directors, officers, agents, or mandataries may be held liable for a non-compliant written demand sent by the corporation.
New sections 52.1 and 52.2 introduce the concept of standard-essential patents (SEPs) to the Act on terms to be defined by regulation. The only substantive requirement with respect to SEPs is contained in section 52.1, which provides that an SEP patentee’s licensing commitments bind any subsequent patentee. The inclusion of CSPs as a potential form of SEP is interesting and noteworthy. Section 55.2 confers the power to make regulations concerning what constitutes (or does not constitute) an SEP or licensing commitment.