The Federal Court of Appeal has dismissed the appeal and cross-appeal in the Bell Helicopter v. Eurocopter proceeding. The Court included discussion of inventive concept, utility, sound prediction, and punitive damages. Some quotes from the decision:
- “It seems to me that calculations and mathematical modeling are, by their very essence, a prediction of a given utility.”
- “Where a person infringes a patent which it knows to be valid, appropriates the invention as its own, and markets it as its own knowing this to be untrue, punitive damages may be awarded when an accounting for profits or compensatory damages would be inadequate to achieve the objectives of retribution, deterrence and denunciation of such conduct.”
The 70 page decision, Bell Helicopter Textron Canada Limitée v. Eurocopter, 2013 FCA 219 (PDF), was an appeal and cross-appeal from the trial decision of Justice Martineau (2012 FC 113). Justice Martineau had found only pre-production helicopters infringed and several claims were invalid, including on the basis of lack of utility. While the quantum of damages was bifurcated, the plaintiff was granted punitive damages, with an amount to be determined later.
Both parties appealed aspects of the trial decision. The unanimous decision dismissing the appeal and cross-appeal was written by Justice Mainville, with Justice Trudel and Justice Noël concurring. The Court of Appeal identified the follow issues on appeal:
a. Did the Judge err in construing the common general knowledge?
b. Did the Judge err in construing the claims of the ‘787 Patent?
c. Did the Judge err in finding that the claims of the ‘787 Patent were not invalid on the ground of anticipation and in rejecting Bell Helicopter’s Gillette defence?
d. Did the Judge err in finding that the claims of the ‘787 Patent were not invalid on the ground of obviousness?
e. Did the Judge err in finding that claim 15 was not invalid on the ground of lack of demonstrated utility or of sound prediction? Did he err in finding otherwise with respect to claims 1 to 14 and 16?
f. Did the Judge err in finding that punitive damages could be awarded?
Some aspects of the decision which are likely of interest include:
Claim construction and ‘essential’ elements – Arguments were made regarding what the essential elements were and whether there was infringement if the defendant’s product was “functionally equivalent”. From paragraph :
For an element to be considered non-essential and thus substitutable, it must be shown either (a) that on a purposive construction of the words of the claim it was clearly not intended to be essential, or (b) that at the date of publication of the patent, the skilled person would have appreciated that a particular element could be substituted without affecting the working of the invention, i.e. had the skilled person at that time been told of both the element specified in the claim and the variant, and asked whether the variant would obviously work in the same way (meaning that the variant would perform substantially the same function in substantially the same way to obtain substantially the same result), the answer would be yes: Free World Trust at para. 55.
Regarding “functional equivalence”, the Court of Appeal held the approach was not consistent with claim construction under Free World Trust.
Utility and Sound Prediction – The Court rejected Bell Helicopter’s appeal that Eurocopter had done insufficient testing regarding the forward inclined cross piece subject matter to support the claim found infringed. The Federal Court of Appeal wrote:
“It was not necessary for Eurocopter to test every minute variant of the inclination of the integrated front cross piece which was offset forwards in order to establish utility. Indeed, the Judge found (at paras. 329 and 354 of the Reasons) that once a skilled person had chosen a design where the front cross piece is offset forwards, he would have no difficulty choosing which inclination will provide the best result, depending on the general design and weight of the structure of the helicopter.”
Regarding Eurocopter’s appeal against findings of invalidity of other claims, the Court wrote: “In addition to not building and testing this embodiment, the Judge found (at para. 365 of the Reasons) that as of the Canadian filing date, the inventors had no evidence that the embodiment with the front cross piece inclined backwards had any ground resonance advantage.”.
The Court dismissed Eurocopter argument that sound prediction did not apply to mechanical inventions. Considering the mathematical testing done, the Court held it was only a prediction not a demonstration of utility. According to the Court, the description did not provide sufficient description or explanation of a front cross piece with “backward” inclination and no evidence was shown in the specification or at trial. The Court did note that if the factual basis or line of reasoning was “found in scientifically accepted laws or principles or in information forming part of the common general knowledge of the skilled person, then no disclosure of such factual basis may be required in the specification” to the support sound prediction.
Punitive damages – The Court of Appeal held that punitive damages could be available in patent cases and it was appropriate in these circumstances to consider such damages prior to determination of the quantum of damages but after determining an entitlement to damages. Cautioning that punitive damages are the exception, the Court noted it would be “difficult” to grant such damages where there is no knowledge of the patent or reasonably held belief that the patent was invalid.
Where a person infringes a patent which it knows to be valid, appropriates the invention as its own, and markets it as its own knowing this to be untrue, punitive damages may be awarded when an accounting for profits or compensatory damages would be inadequate to achieve the objectives of retribution, deterrence and denunciation of such conduct.