In Kobold Corporation et al v NCS Multistage Inc, 2021 FC 1437, a decision dated on Jan. 7, 2022, the Canadian Federal Court released the first judicial interpretation of the current version of section 56(1) of the Patent Act, which relates to the prior-use defense of patent infringement.
The court held, in paragraphs 100-106, that in order to avoid infringement pursuant under subsection 56(1) of the Patent Act, “one can only perform those acts set out in section 42 of the Patent Act which were actually performed pre-patent, or those acts for which substantial preparations to perform were made.”
The court clarified that the prior user will be able to make changes to product as long as the changes are not related to what the patent disclosed, for example, that are part of the prior art or outside of the scope of the claims of the patent at issue.
For example, the prior user may change a method of manufacturing “when the patent is silent as to what method should be used and where that aspect of the claims does not form part of the inventive concept.” The prior user may also provide additions to the device, “provided any additions to the device do not infringe the patent.”
However, the prior user cannot change an infringing aspect of the product because it would be a different act with respect to infringing the patent claims.
The court further suggested the process for considering the defence provided in subsection 56(1) of the Patent Act in paragraphs 113-116:
First, one must determine whether the acts being performed before and after the claim date are identical (other than wholly non-functional changes, such as colour). If they are, then there is no need to consider infringement, as subsection 56(1) would always provide a defence to any potential infringement.
Second, if the acts are not identical, one must determine whether the acts infringe the patent, and if they do, which claims. If the post-claim acts do not infringe the patent, then there is no “otherwise infringing acts” and therefore no need to rely on subsection 56(1). If the pre-claim acts do not infringe the patent, subsection 56(1) cannot apply. If the post-claim date acts infringe a particular claim of the patent that the pre-claim date acts do not, subsection 56(1) cannot apply.
Finally, if the pre- and post-claim date acts are not identical but only infringe the same claims, then one must determine whether the changes relate to the inventive concept of the patent. If they do not, then subsection 56(1) will provide a defence.
Only in the clearest of cases, where the acts before the claim date are identical to those after the claim date, is there no need to construe the claims of the patent or conduct an infringement analysis. Such cases would be particularly well suited for summary judgment.
Only in the clearest of cases, where the acts before the claim date are identical to those after the claim date, is there no need to construe the claims of the patent or conduct an infringement analysis. Such cases would be particularly well suited for summary judgment.Ibid at paras 113-116
The current section 56(1) of the Patent Act, which came into effect on December 13, 2018, reads:
Subject to subsection (2), if — before the claim date of a claim in a patent — a person, in good faith, committed an act that would otherwise constitute an infringement of the patent in respect of that claim, or made serious and effective preparations to commit such an act, it is not an infringement of the patent or any certificate of supplementary protection that sets out the patent, in respect of that claim, if the person commits the same act on or after that claim date.Patent Act, section 56(1）
The version of section 56(1) of the Patent Act immediately prior to the current version, which was in effect from 2002-12-31 to 2018-12-12 reads:
56 (1) Every person who, before the claim date of a claim in a patent has purchased, constructed or acquired the subject matter defined by the claim, has the right to use and sell to others the specific article, machine, manufacture or composition of matter patented and so purchased, constructed or acquired without being liable to the patentee or the legal representatives of the patentee for so doing.Previous version of the section 56(1) of the Patent Act
According to the court, there are three primary differences between the current version and the previous version:
- The previous version limited the defense only to physical inventions and did not cover patented methods, whereas the current version broadens the defense by using the word “act”, Ibid. at para. 71;
- The previous version limited the defense to the sale or use of the “specific” physical product, whereas the current version provides defense to the “act”, which apparently covers making, constructing, using, and selling to others Ibid. at paras. 72 and 96); and
- The current version provides a defense for not only those who committed an act, but also those who made serious and effective preparations to commit such an act, Ibid. at para. 73.
In paragraphs 91, the court determined that “act” means “making, constructing and using the invention and selling it to others to be used” as defined in section 42 of the Patent Act.
The court then determined that “same” in subsection 56(1) of the Patent Act means that acts before and after the patent grant must be identical for the following reasons, Ibid. at paras 91-96:
- Dictional meaning of the word “same.”
- Subsections 56(6) and 56(9) used the words “substantially the same,” rather than “same” in subsection 56(1), suggesting an intention to differentiate.
- The different language compared with the UK Act.
- The purpose as indicated in the Budget Implementation Act.
It is worth nothing that the court used “inventive concept” in its decision, which is commonly used in determining obviousness. However, this “inventive concept” itself is a term the causes much debate in the Canadian patent practice. It is expected this term will be a point of fight in future litigation.
In addition, because this is a Federal Court decision, appeal may be taken to the Federal Court of Appeal, which may result in a contradicting opinion. We will report further if and when that happens.
Disclaimer: This article is only intended for general information. Please seek advice from a specialist regarding your specific circumstances.