IP Litigation 2020 Year in Review

January 28, 2021
By Bruna Kalinoski, Adam Bobker and Scott MacKendrick

A flurry of jurisprudential developments marked 2020 as a significant year in Intellectual Property litigation. The Federal Court of Appeal settled the law on some crucial issues that have longed for legal certainty (e.g., the criteria for prior art to be citable for obviousness), and pivoted from established law on other issues (e.g., jurisdiction and accounting of profits assessment). Numerous rulings at the trial level also feature interesting interpretations of legal points which forecast a lively 2021 with important ramifications to be monitored.

Keep on reading our recapitulation of 10 key legal topics that were discussed in the case law during 2020 to stay abreast of the emerging legal trends affecting the IP litigation landscape in 2021 and beyond.


1. Jurisdiction

In SALT Canada, the Federal Court of Appeal held that a determination of patent ownership that hinges upon the application and interpretation of contract law principles was within the Federal Court’s jurisdiction.1 The guiding authority on this issue had been that the Federal Court lacks jurisdiction if the matter relates primarily to contract law, even if the central question is one of patent title. This has now been reversed as the court found that law “not binding on [the] Court” and “incorrectly decided.”2 Justice Stratas’ reasoned that the Federal Court’s jurisdiction derives from s. 52 of the Patent Act, which provides that the “Federal Court has jurisdiction…to order that any entry in the records of the Patent Office relating to the title to a patent be varied or expunged.” Since the application before the Court in SALT Canada sought just that, he held that the Federal Court ought to have jurisdiction.

Early this year in McCain Foods Limited v. JR Simplot Company,3 the Federal Court of Appeal had another opportunity to comment on the extent to which the Federal Court has the jurisdiction to decide contractual issues arising in the context of a patent matter. In a patent infringement action, the defendant was alleged to have infringed the plaintiff’s patent and was not permitted to bring a third-party claim against its supplier for indemnification. The Court held that it had no jurisdiction to adjudicate the indemnity issue. It was not enough that the indemnity claim was connected to a claim for patent infringement. The essential nature of the indemnity claim was held to be a claim in contract. The Patent Act was not directly relevant to the third-party claim.4


2. Summary Judgment & Default Judgment Motions

Our 2019 Litigation Year in Review discussed whether summary determination of patent infringement claims following Canmar5 was a trend for a day or here to stay. This year, the Federal Court has seen increased attempts by litigants to resolve matters more expeditiously by way of dispositive motions. Summary judgment was granted in three cases6 and two motions for default judgment were brought but dismissed based on insufficient evidence.7 Notably, in ViiV Healthcare Company v. Gilead Sciences Canada,8 the Court held that completion of discoveries is not a precondition to summary trial such that resolution may be sought at very early stages of the proceeding.

We saw the Federal Court grant summary disposition to (a) dispose of claim construction argument,9 (b) hold a patent invalid for obviousness,10 and (c) dispose of a patent infringement action recognizing that the infringing product did not fall within the scope of the asserted claims.11


3. Experts & Claim Construction

  1. Experts

In 2020, we also saw more judicial skepticism with respect to blinding of experts, particularly in respect to opinions on who is the hypothetical skilled person of ordinary skill in the art, what her common general knowledge is, and how she would construe the claims in the patent at issue. For example, in Seedlings Life Science Ventures, LLC v. Pfizer Canada ULC., Justice Grammond held that “[w]hatever the merits of blinding in other respects, I must say that it is not particularly helpful with respect to the skilled person, common general knowledge and claims construction”.12

In another case, the court signaled that this skepticism appears to arise from structural problems that impede effective blinding. A blinded expert would be expected not to have read the patent to avoid hindsight bias, but obviousness is assessed from the perspective of a skilled person and determining who the skilled person is requires reading the patent. However, a potential workaround through the sequential instruction of expert witnesses was approved by the Federal Court of Appeal in Amgen Inc. v. Pfizer Canada ULC.13 This means, for instance, having a first expert read the patent and provide an opinion on the skilled person, and having a second expert provided with that definition of the skilled person. The court recognized that this could improve the usefulness of “blinding” the experts, and that “sequential unmasking” may allow for “effective and yet properly blinded opinion”.

  1. Claim construction
  1. Resort to disclosure

On at least two occasions in 2020 the Federal Court was faced with the question of the extent to which the scope of the claims should be affected by the description of the invention and the rest of the specification (i.e., the disclosure). In ViiV Healthcare Company v. Gilead Sciences Canada, Inc.,14 the court found that recourse to disclosure to construe a claim term was permissible in the circumstances and did have an impact on the scope of the claim. Justice Manson held that “[w]hile ‘optionally substituted heterocycle’ as used in claim 1 appears on its face to be a clear and unambiguous term, I accept that recourse to the disclosure is necessary to understand the meaning given to these words by the inventors, and the intended scope of this claim language.”15

In a subsequent case that also turned primarily on claim construction, Bauer Hockey Ltd. v. Sport Maska Inc. (CCM Hockey),16 Justice Grammond also used the specification to interpret (and limit) the claims. His Honour interpreted the law of claim construction as generally allowing recourse to the disclosure in interpreting the claims, and held that this principle of claim construction was made clear in decisions of the Federal Court of Appeal.17

As 2021 gets further underway, another case has turned on claim construction and the court has once more relied on the disclosure to understand the claim language as intended by the inventors. In Allergan Inc. v. Sandoz Canada Inc.,18 the Chief Justice decided a case in which the Court was faced with the question of whether “wet granulation” was essential to the claimed invention. The Chief Justice focused his analysis on the two-prong test from paragraph 55 of Free World Trust19 that allows the patentee to show that a claim element is not essential by demonstrating either (i) that on a purposive construction of the words of the claim it was not intended that a particular element be essential, or (ii) that at the date of publication of the patent, the skilled person would have appreciated that the element in question could be substituted without affecting the working of the invention. The Court noted the uncertainty in the case law over whether the test should be conjunctive, despite the use of the word “or”, but the decision did not turn on that issue. On the first prong, the Chief Justice went beyond the objective manifestations in the patent claims and found that the disclosure taught away from the use of a dry process and explicitly towards a wet granulation process.20 On the second prong, the analysis was whether the element could be substituted without affecting the working of the invention. The Court found that, given the manner in which the 002 Patent taught away from the use of dry processes, and the evidence on the skilled person’s understanding of the properties and implications of the active ingredient for a dry process, the skilled person would not have understood that a dry process could be substituted for the wet granulation process without materially affecting the working of the invention.21

  1. Admissibility of Prosecution History

In 2020, we saw the Federal Court interpret the representations made to the Patent Office during prosecution pursuant to section 53.1 of the Patent Act in a case where the representations made by the patentee were held not to rebut the construction urged by the patentee to the court.22 In another case, the Court had recourse to the prosecution history in order to confirm an interpretation that was plain from the patent itself. The court reasoned that:

“When an issue of claims construction arises, the patentee is always making representations to the Court as to the proper construction of the claims and the defendant is always attempting to rebut those representations. Therefore, in my view, as long as the issue is one of claims construction, section 53.1 applies, and the prosecution history is admissible. In other words, there is no need to identify a particular representation and rebuttal every time a reference is made to the prosecution history. It is simply integrated in the interpretive process.”23

With respect to the admissibility of foreign prosecution history, we saw the court interpret that section 53.1 of the Patent Act covers the patentee’s communications with the Canadian examiner but the provision does not pivot from the existing rule that foreign prosecution history is inadmissible.24 This finding by Justice Lafrenière contrasted with the court’s interpretation in Canmar, where Justice Manson had suggested that foreign prosecution history may be admissible in “extraordinary circumstances.”25

The new year ushered in the appeal decision in Canmar. In the trial decision, Justice Manson had opened the door to admitting foreign file wrapper under what he found to be “extraordinary circumstances”. In the appeal decision, the Court ruled against the use of US foreign prosecution history based on a finding of “incorporation by reference” where the statement by the applicant was only that the set of amended claims correspond to claims submitted in the prosecution of a related US application. However, on the broader issue of whether the prosecution history of a foreign application can ever be considered pursuant to section 53.1 of the Patent Act as a result of incorporation by reference or otherwise, the court panel preferred to express no firm views on the matter.26 At the end, the panel of the Court upheld the summary judgment and the infringement findings of the trial judge dismissing the action.


4. Selection Patents & Patentable Subject-Matter

  1. IG Farbenindustrie factors considered

In 2020, the Court issued an interesting decision on selection patents which resulted in a patent being invalidated based on an analysis that appeared to have indirectly taken into consideration the IG Farbenindustrie requirements for a valid selection from among the members of a class of compounds, namely (i) a substantial advantage to be secured or disadvantage to be avoided; (ii) the whole of the selected members (subject to “a few exceptions here and there”) possess the advantage; and (iii) the selection must be in respect of a quality of a special character peculiar to the selected group. The court acknowledged that “[b]eing an improper selection patent by itself is not a ground for invalidity.”27 It nonetheless concluded that “the determination that a patent is not a selection patent has consequences, as the purported advantages relied upon by the patentee, if not in the claims, may not be considered in the assessment of novelty and inventiveness, as examined later on.”28 It will be interesting to see how the Federal Court of Appeal may weigh in on the impact, if any, that the IG Farbenindustrie factors may have in cases involving selection patents.

  1. Dosage and use claims found not to cover unpatentable methods of medical treatment

In 2020, we saw the Federal Court reject the argument that dosage and use claims were directed to unpatentable methods of medical treatment. In Biogen Canada Inc et al v. Taro Pharmaceuticals Inc. and Pharmascience Inc.,29 Justice Manson did not accept the submission that the Federal Court of Appeal had already decided the issue. Justice Manson held that the authorities by the Federal Court of Appeal (the Mylan and Novartis cases) do not stand for the general proposition that any patent claim to ‘how and when’ a drug is administered covers unpatentable subject matter.30 However, Justice Manson’s decision does not elaborate on what the Federal Court of Appeal effectively ruled in those two cases, or what legal principle they do support.

The Federal Court was once more called upon to decide this issue in Janssen Inc. et al v. Apotex Inc. et al.31 In that case, the patent in dispute (t
he ‘422 Patent) contained several use claims directed to dosage ranges of the two active ingredients that depended from the general use independent claim. The defendant argued that those dosage range claims amounted to methods of medical treatment that are not patentable under section 2 of the Patent Act. Despite the recent revised Patent Examination Notice published by the Canadian Patent Office (read our related articles here and here), in which dependent dosage range claims were deemed unpatentable subject matter, the Court noted that “the issue of method of medical treatment is not a settled one and therefore a court should be cautious in striking down claims on this basis”.32 Monitoring how this issue might evolve in future litigation will be worthwhile.


5. Anticipation & Obviousness

  1. Reasonably diligent search discounted

In the past year, the Federal Court of Appeal issued an important decision relating to the criteria for prior art to be citable for obviousness. It held that it was an error to exclude from the court’s consideration prior art that was available to the public at the relevant date simply because it is not shown that it would have been located in a reasonably diligent search. The statutory requirement for relevant prior art per section 28.3 of the Patent Act contemplates “information disclosed…in such a manner that the information became available to the public”. The section does not speak to the lengths a skilled person may need to go to locate the information.33 In Biogen Canada Inc et al v. Taro Pharmaceuticals Inc; Pharmascience Inc.,34 Justice Manson addressed and applied Hospira, holding that the state of the art for the purpose of an obviousness attack can include all relevant prior art, not just that which would be reasonably discoverable.

  1. Obvious & Obvious-to-try

In Amgen Inc. v. Pfizer Canada ULC,35 the court clarified the obvious-to-try test stating, in broad strokes, that if an invention would have been obvious to try, it would not per force go down under the obvious-to-try doctrine because two subsequent inquiries are required. After establishing that there was motive to try such that the decision to try would have been obvious, the party still has to establish that (a) it was more or less self-evident that what was being tried ought to work (b) without undue effort. If these two questions are answered in the negative, then there may be a non-obvious invention even if it was obvious to think about trying.

  1. Enablement branch of anticipation not satisfied

In 2020, we saw the court hold that an anticipatory prior art product that had been displayed to the public did not anticipate the invention because it was not enabling. In Bombardier Recreational Products Inc. v. Arctic Cat, Inc., the court recapitulated the law that the use of a product makes an invention part of the state of the art, i.e., equivalent to disclosure, only insofar as that use makes available the information.36 In the circumstances of the case, the evidence was that the allegedly anticipatory product, the T/S Mod snowmobile, was on display after races, and there was no evidence that reverse engineering could have made it possible for skilled person to perform the invention using the information available from a mere visual inspection of the T/S Mod snowmobile on display.

  1. Range disclosed in prior art found to anticipate claimed point within range

Innovator pharmaceutical companies may want to monitor the potential ramifications from Eli Lilly Canada Inc. v. Mylan Pharmaceuticals ULC37 as it relates to the novelty of claims that cover dosage ranges of an active pharmaceutical ingredient alleged to be disclosed in prior art. In this case, five generic drug companies challenged Lilly’s patent for tadalafil. The claims were to dosage forms of tadalafil for treating erectile disfunction (doses from 1 to about 20 mg) and specific doses within that range (2.5, 5, 10 and 20 mg strengths of tadalafil). The prior art considered by the Court was the Canadian Patent Application No. 2,226,784, which also claimed tadalafil for the treatment of erectile disfunction and disclosed doses of tadalafil from 0.2 to 400mg. Justice St-Louis found on the facts that carrying out the trials required to narrow down the doses from the .02 to 400mg range to the ranges claimed would require only routine work from the skilled team. The Court held that there was motivation to do so and the claimed invention was obvious to try.38 Interestingly, the Court also found that the ‘784 application anticipated Lilly’s patent. Justice St-Louis held that “[i]n general, dosing a drug itself does not bring anything novel, subject to exceptional circumstances, which means that a dosage patent will almost always be anticipated”.39 It will be interesting to see if and how the Federal Court of Appeal will reconcile this approach with the leading law on anticipation requiring a two-step analysis (i.e., disclosure and enablement) whereby said steps are to be analyzed separately, and the enablement step does not permit trial and experimentation by the skilled person to reach the invention.


6. Overbreadth & Sufficiency

  1. Overbreadth survives as standalone invalidity attack

In Seedlings Life Science Ventures, LLC v. Pfizer Canada ULC,40 it was argued that the overbreadth doctrine had no support in the Patent Act, and that it has frequently been criticized as a redundant doctrine. The Federal Court disagreed. It held that this ground of invalidity has a statutory basis derived “by implication, from the scheme of the Patent Act, and in particular section 27(4), which requires ‘a claim or claims defining distinctly and in explicit terms the subject-matter of the invention for which an exclusive privilege or property is claimed.’” The Court reasoned that “[i]f the subject-matter of the invention must be defined, it must be defined accurately and not in an overly broad manner. In the end, Justice Grammond invalidated the patent on the sole basis of overbreadth. In another decision, by contrast, Justice St-Louis rejected an overbreadth attack as being akin to the promise doctrine. The Court held that the way that the defendant, Apotex, had articulated the overbreadth allegation appeared to be an attempt to revive the promise doctrine abolished by the Supreme Court of Canada in AstraZeneca. The Court understood that Apotex was asking the Court to mine the disclosure for certain promises and import them into the asserted claim in the absence of any ambiguity, striking the claim as a result.41

  1. Best mode requirement limited to machine patents

From Western Oilfield Equipment Rentals Ltd. v. M-I LLC,42 an important ramification may arise affecting system and method type patents in high tech industry. In that case, the patent at issue related to an invention for a method and system for separating components of a slurry. The plaintiff/defendant by counterclaim, Western Oilfield Equipment Rentals Ltd., argued that the inventor had a duty to describe the best mode of putting the invention into practice citing the provision of section 27(3)(c) of the Patent Act.43 The best mode allegation falls under the sufficiency of disclosure invalidity attack. Justice O’Rilley interpreted that provision to relate solely to machine patents, not method and system patents. Because he understood that the patent claimed a method and a system, not a machine, His Honour held that the best mode statutory requirement did not apply.44


7. Accounting of Profits

  1. Full costs relevant to the calculation of profits to be disgorged

In 2020, the Federal Court of Appeal issued a decision45 which has been interpreted to have “effectively flipped the default approach to accounting of profits.”46 Before the panel of the court was an appeal and cross-appeal concerning the principles that should govern the calculation of the profits to be disgorged from the infringer defendant. The defendant (“Nova”) had been found liable for infringing the patent owned by the plaintiff (“Dow”) relating to metallocene linear low-density polyethylene. Nova manufactured its product, SURPASS, and sold it in competition to Dow’s product, ELITE.

When Dow elected to receive profits of Nova, the dispute became one of deciding how the calculation of the amount Dow was entitled to receive should proceed. Justice Stratas’ reasons offered a detailed analysis of the guiding principles that underlie the law regarding accounting of profits and held, more specifically, that “absent some exceptional or compelling circumstance or persuasive expert evidence to the contrary in a particular case, the full cost method is the appropriate approach to deducting costs in an accounting of profits.”47 Prior to this decision, the Court had typically used an incremental cost approach.

This exercise would involve assessing the profit to be disgorged by comparing the infringer’s actual profit against a non-infringing “baseline” which reveals the value of the invention associated with the “inventive quality” of the patented technology.48 The Federal Court of Appeal panel was unanimous on setting out the principles of an accounting of profits in an infringement. Justice Woods dissented from Justice Stratas and Justice Near only with respect to the issue of apportionment. She concluded that the Federal Court made a reviewable error by not considering the issue of causation at the heart of the legal test of apportionment. She would have accepted Nova’s argument that there should be an apportionment of SURPASS profits that removed its profit attributable to the production of the ethylene used to make the polyethylene at issue since the production of ethylene was not part of the patent. She held that the trial judge was required to consider whether a portion of SURPASS profits were attributable to something other than the infringing activity.49

The court has since interpreted the newly established guiding principle for an accounting of profits twice. In Bauer Hockey Ltd. v. Sport Maska Inc. (CCM Hockey),50 a motion was brought by the defendant one day after trial had started seeking leave to file a supplemental report of its remedies expert to address how profits should be calculated in light of the Federal Court of Appeal’s holding. Justice Grammond granted the motion reasoning that the appropriate approach to deducting costs in an accounting of profits is that “not only incremental costs, but also fixed costs, are deductible.”51 Similarly, in Rovi Guides, Inc. v. Videotron Ltd.,52 a motion was brought by the defendant, this time after trial was ended, seeking to reopen evidence to permit that expert evidence be adduced relating to the accounting of profits remedy. Justice Lafrenière doubled down and recognized that he was bound by the holding in Nova Chemicals as it “unambiguously provides that the full costs approach should be the default one.”53 In 2021, we will look to the courts for further clarification on how the full cost method will play out in calculating profits, and in particular to how the Federal Court of Appeal may clarify the causation link for deducting overhead costs.

b. Entities that are in the business of granting licenses may be presumptively disentitled to an accounting of profits

Organizations whose businesses are focused primarily on grating licenses for the lawful use of their intellectual property — as opposed to selling products or services covered by the patent — would be well advised to monitor 2021’s judicial developments on the issue of what remedies may or may not be available for these organizations. Examples of such organizations are patent assertion entities (“PAEs”), a.k.a. non-practicing entities (“NPEs”), which often own a vast patent portfolio covering inventions which they do not practice. In 2020, one trial decision held that “if the patentee made its profits by selling licenses, it should not be entitled to compensation beyond a reasonable royalty”.54 All the asserted claims were found invalid in that case, so this holding was in obiter. The Court nonetheless referenced numerous Federal Court, Federal Court of Appeal, and Supreme Court authorities in stating that it would not have allowed Seedlings to elect an accounting of Pfizer’s profits because Seedlings was a non-practicing entity.55

c. NIA “would have” analysis is informed by the infringer’s subjective perspective

In Apotex Inc. v. ADIR, the unanimous panel of the Federal Court of Appeal restated that “[t]he significance of a party’s intentions and preferences has been specifically addressed by this Court in the context of the non-infringing alternative defence, and they have been found to be relevant to the “would have” component of the test.”56

The Court was seized of an appeal by the generic pharmaceutical company, Apotex, whose founder and board chairman, Dr. Sherman, had given evidence of Apotex’s chief preference for manufacturing products in-house and its resistance to doing
it offshore through non-affilia

Subscribe to our newsletter

You can unsubscribe at any time. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

This site is registered on as a development site.