Defences and remedies in Canadian patent law
A patent holder in Canada has the exclusive right, privilege and liberty to making, constructing, using and selling the invention for the term of the patent, from the time the patent is granted. Any person who does any of these acts in relation to an invention without permission of the patent owner is liable for patent infringement. When faced with an action for patent infringement, the defendant has a number of defences that they can use. These roughly fall into three categories: Remedies in Canadian patent law generally track both common law and  equitable remedies. Equitable remedies include injunctions (both final and interlocutory) and an accounting of profits. Common law remedies include damages aimed at putting the plaintiff in the position he would have occupied had the infringement not occurred. Invalidity defences. In order to obtain a patent, an invention must be: The Canadian "Patent Act" allows that: Therefore, if a person can show that a patent claims improper subject matter, is anticipated, inoperable or obvious, then the patent can be declared void. For example, if a defendant can show evidence that the claimed invention was known as of the claim date, and  thus the invention is not new, the patent can be declared void. Improper subject matter. Under section 2 of the "Patent Act", an invention is defined as: If the defendant can successfully show that the invention does not fall into any of these classes, then the patent will be invalid. There are a few cases where this has occurred, such as "Harvard College v. Canada (Commissioner of Patents)". In that case, it was held that while the genetically engineered plasmid and transgenic mouse cells were the proper subject of a patent, the genetically modified mouse and other higher life forms  were not. Lack of utility or inoperability. In applying for a patent, the applicant must show that the patent is operable as of the claim date. The claim itself must specify the invention in enough detail that a person skilled in the art would be able to reproduce the invention. In lieu of an operable invention, the applicant must show that there is a sound factual basis for the invention and explain why the invention should work. This defence was successfully used in "Minerals Separation North American Corp. v. Noranda Mines Ltd.", where a mining company sued another for the  use of a patented process using a xanthate frothing flotation method in order to separate minerals from ore. It failed because the patent claims included all xanthates, but it was known that not all xanthates could be used in the process. Consequently, the patent was held invalid as a person skilled in the art could not use the patent specifications in order to reproduce the effect and the patent was inoperable. However, in "Burton Parsons Chemicals, Inc. v. Hewlett-Packard (Canada) Ltd.", the same defence was not successful because a person skilled in the art would know which of the  unspecified material could and could not be used. Anticipation. An anticipation defence attempts to show that the invention was not new as of the claim date. The current test used in Canadian Patent law was enunciated in "Apotex Inc. v. Sanofi‑Synthelabo Canada Inc." The test includes two prongs: prior disclosure and enablement. The prior disclosure requirement asks whether a person skilled in the art would know that the previous disclosure covered the same material as the patent at issue. There is no trial and error permitted at this stage of the inquiry - either doing what is specified in the earlier  disclosure or patent would infringe the patent at issue, or it will not. The enablement requirement asks whether a person skilled in the art would be able to work the invention as disclosed in the prior art. Some experimentation is allowed at this stage of the inquiry, but the experimentation must not pose an undue burden. Long and arduous experimentation, for example, would indicate that the prior disclosure did not include enough information for a defence of anticipation to succeed. The earlier case "Reeves Brothers Inc. v. Toronto Quilting & Embroidery Ltd." holds that the prior disclosure must include all requisite  factors in a single document without making a mosaic. In Canadian patent law, there is a high bar for a test of anticipation to succeed. Obviousness. An obviousness defence attempts to show that the invention is an obvious or logical next step of a previously disclosed invention. In order for the defence to succeed, it must be shown that a person skilled in the art would be able to take this particular step in innovation. "Beloit Canada Ltd. et al. v. Valmet Oy" defines the person skilled in the art as a: The current approach used in Canadian patent law  was enunciated by the Supreme Court of Canada in "Apotex Inc. v. Sanofi‑Synthelabo Canada Inc." In coming to its decision, a court must consider: In some fields, experimentation is common and some experiments are considered to be "obvious-to-try". "Apotex Inc. v. Sanofi‑Synthelabo Canada Inc." outlines major considerations in fields where this occurs: whether it is self-evident that what is being tried should work, the extent of the effort required to achieve the invention, and motive in the prior art to find a solution to the problem. In some cases, this could lead to a finding that the  additional step taken was obvious and therefore the patent for the additional innovation will be considered void. Non-infringement defences. A defendant in a patent infringement case can also argue that while the plaintiff's patent is valid, they have not infringed the patent. Under section 42 of the Canadian "Patent Act", a patent holder has the exclusive right, liberty and privilege to make, construct, sell and use the invention for the duration of the patent. A defence based on these terms would typically focuses on use, which has been given special attention due to the difficulty of interpreting the  term ""use"". "Use" has been defined in "Monsanto Canada Inc. v. Schmeiser" as any activity that deprives an inventor, in whole or in part, directly or indirectly, of full enjoyment of the monopoly as conferred by law. "Monsanto Canada Inc. v. Schmeiser" sets a very high bar for a defence based on these terms, as possession of the invention leads to an rebuttable presumption of use. The presumption can be rebutted if the defendant can show that they genuinely did not intend on using the patented invention. For example, in "British United Shoe Ministry v. Simon Collier Ltd.", the patented  invention was a part of a machine which the defendant bootmaker had removed and set aside. It was possible to run the machine without using the patented part, and the defendants willingly returned the patented invention when action was commenced. If the patented invention occurred as an intermediary of a process or the patented process occurred outside of Canada, patent infringement may still be found. A court should consider the following factors in determining whether there has been infringement in these cases: In a case of secondary infringement or inducement, the plaintiff patent holder would need to show: A successful  defence could be based on any of these grounds in the case of secondary infringement or inducement. Gillette defence. The Gillette defence is a way of arguing non-infringement by proving invalidity without requiring the patent claims to be construed. The defence is based on an early 1900s decision from the House of Lords and allows the defendant to plead that their alleged infringing actions are part of the prior art, and thus either the patent is invalid for claiming the prior art or if the patent is valid, the defendant does not infringe. In view of the Supreme Court 's decision in Free World Trust, any Gillette Defence would still require that the patent claims are construed prior to determining infringement. User rights. International treaties such as "NAFTA" and "TRIPs" allow member states to create exceptions from the exclusive rights enjoyed by patent owners where the exceptions: Under the Canadian "Patent Act", legitimate user rights include prior use, experiments and research, and private non-commercial uses. Further user rights are available under the common law doctrine of exhaustion. Academics submit that user rights may extend to education. Prior uses. Section 56(1) of the Canadian "Patent Act" covers the situation  where a person has made or used an invention prior to a patent claim by another person. This would usually occur where the first person did not patent the invention or process and attempted to keep it a trade secret. Canadian patent law protects these good faith acquirers and independent inventors to a certain extent; if the patented invention is an object, then the good faith user can keep using it or sell that particular object without liability. Moreover, where a patent covers an apparatus and a method of using it, the acquisition of the apparatus before the relevant date  entitles the owner to continue to practise the method with that apparatus after the patent is issued. However, it is uncertain at present whether section 56 would apply to a patented method or process "per se" used prior to the relevant date. If the patented invention is a machine or process, then the good faith user may keep selling its output. However, the law after "NAFTA" favours patent applicants over prior good faith users, and the user may not expand his use by making and selling more of the patented product, build another machine to increase his output, or expand  his or her process. In Britain, prior use rights are more extensive. A good faith user's right begins when he has made serious preparations to do the act that would lead to patent infringement, and he may begin or continue to do the act regardless of the grant of patent. If the good faith user's act or preparations to do the act were done in the course of business, then the right may also be exercised by his business partners and transferred if the business is dissolved or sold. Experiments and research. In section 32 of the "Patent  Act", a person is permitted to patent improvements on an existing patent. Consequently, other jurisdictions such as the United Kingdom and New Zealand have held that a researcher may ignore a patent when conducting experiments. Fair research and experimentation is considered to end when the product or process is ready for commercial exploitation. Essentially, a researcher may patent the improvement of an existing patent, but cannot exploit it without the permission of the earlier patent holder until the earlier patent expires. In the United States, this exception is construed very narrowly. A person may pursue research on an existing  patent only for "amusement, satisfy[ing] idle curiosity, or for strictly philosophical inquiry." Private non-commercial uses. It is not an infringement of patent law to make the models or patented objects for private or non commercial use. The French equivalent is somewhat clearer on this exception. This exception allows users to make patented products for private use, but the exception stops short of any commercial use. Doctrine of exhaustion. In Canada, the common law doctrine of exhaustion provides that a purchaser of a patented product benefits from an implied licence to use, repair, and resell that product. The doctrine applies  only in the absence of any restriction imposed by the patentee or licensee. Although the doctrine applies to repairs, it does not apply to remanufacturers. Education. While there is no provision in the "Patent Act" allowing use of a patent for the purposes of education, Vaver in his treatise "Intellectual Property Law: Copyright, Trademark and Patent" has argued that the courts may accept an exception for educational purposes. Such an exception would be consistent with other acts such as the "Integrated Circuit Topography Act", which includes provisions protecting users who make or copy a topography for the purposes of education , and the proposed amendments to Canadian copyright law which add education to the enumerated purposes for the fair dealing exception. Remedies for patent infringement. Remedies for patent infringement track both common law and equitable remedies. Usual remedies in patent law include injunctions, damages and an accounting of profits. Injunctions. A plaintiff in a patent infringement case can ask for an injunction prohibiting the defendant from committing the infringing acts in the future. An injunction is a discretionary remedy, and the court may decide, depending on the circumstances of the case, to delay giving an injunction for the defendant to close  down his infringing operations or to refuse giving an injunction at all. In some cases, an injunction would prevent worthy innovators from entering the market. The Canadian "Patent Act" specifies: In Canadian patent law, the courts favour refusing an injunction for infringement, particularly where the patent holder would be fairly compensated through a monetary compensation award. Courts in the United States have been critical of "patent trolls", who purchase unexploited patents for the purposes of imposing licensing fees onto a trade, stating that awarding an injunction would hand over "a club to be wielded by a patentee to enhance his  negotiating stance". Interlocutory injunctions, which prevent the defendant from engaging in the allegedly infringing activity during the court proceedings, used to be "de rigueur" in intellectual property cases. However, they have more recently become rare, particularly as they are very rarely granted. In order to show that in interlocutory injunction is justified, a plaintiff must show: In the case of patent law, an interlocutory injunction would seriously inhibit the ability of an alleged infringer from developing a new invention, even if their activity did not infringe the original patent's claims. Damages. Damages in patent law track those of the  law of tort. The claimant should receive compensation that would restore it to the position it would have occupied should the patent infringement have never occurred. Some of the measures used to in considering a fair compensation for infringement include lost sales, a reasonable royalty, intangible losses, proportioning damages compared to what was infringed, whether the patent was infringed knowingly, and punitive damages. Accounting of profits. Canadian patent law also provides an accounting of profits made by the defendant infringer as a remedy. An accounting of profits is an equitable remedy entirely based on the idea that the defendant did  not have the right to benefit from the property of the plaintiff patent holder. While considerations such as intent may have a role in damage awards, they do not in an accounting of profits. Profits are calculated using a direct cost accounting method. The infringer is liable for the net profits realized as a result of the infringement, having deducted the variable expenses associated with making the infringing product. Only an "increase" in fixed expenses as a result of the infringing product can be deducted from the profits. Special cases in patent law. If a patent is granted, the patent  holder may sue for any patent infringement that occurred between the publication of the specifications of the invention and the grant of the patent. Section 55(2) of the "Patent Act" states: Note that the remedies that a patent holder can receive are of a lower standard than for a post-grant patent infringement. While s 55(2) asks for "reasonable compensation", s 55(1) asks for "all damage sustained" by the patentee. What compensation is considered reasonable will depend on the facts of the case.