Looking back at 2020

I have recently published a couple of articles looking back at 2020:

The articles were originally published on Slaw.ca but are reproduced below.

Canadian IP in 2020

(originally published on Slaw.ca January 21, 2021)

Looking back on an unusual and eventful year, we can see how IP practitioners worked through the pandemic with all of its challenges. Most statistics show a significant drop in March, April and May of 2020 but by June most trends appear to be back to previous levels.

In the Federal Court and Federal Court of Appeal, where most intellectual property matters in Canada are litigated, the following chart shows a measure of activity in the Court. This is based on the number of documents being filed with the Court and directions/orders being issued – i.e. docket entries – on matters I have identified as intellectual property, per month. This shows a measureable drop in activity in March when lockdowns and court closures took effect in mid-March and were very apparent through April and May.

The Federal Court pivoted to virtual proceedings and the suspension of deadlines ended in June and July in the Federal Court, while in the Federal Court of Appeal, proceedings were re-activated weekly through the remainder of the year. Most intellectual property matters are case managed and many cases likely continued with varying degrees of delay under case management directions. I participated in the Federal Court’s first virtual trial which resumed on May 25th.

At the Canadian Intellectual Property Office (CIPO), from the currently available information, filings also dropped off in March, April and May. While production and processing at CIPO was affected by the lockdowns, this analysis focuses on the filings by practitioners.

For trademarks, a comparison of 2020 to 2019 shows a reduction in marks being filed between March and May. For trademarks, the 2019 data was affected around April 23 by Easter weekends which impose days for which no marks are filed. In June 2019, there was a significant change in the trademark regimes which resulted in a) a large number of marks being filed immediately before and after the change (see my column from September 2019, “New Era in Canadian Trademarks”) and b) the ability to receive filing dates on weekends and holidays. In 2020, various deadlines were suspended by CIPO due to the pandemic, which came to an end in early September. The data I have seen does not show a significant number of filings that took advance of the suspension of these deadlines.

Patents are not typically published publicly for 18-months after they are filed so public information on the actual patent applications filed in 2020 is not yet available. The patent office publishes monthly ‘production’ numbers that includes the number of applications filed – both direct filings as well as national phase entries from PCT international applications. This data shows a drop in production as compared to previous years in March, April and May but a large influx in June, likely catching up on the backlog. Most patent applications in Canada, around 80%, are national phase entries into Canada where the deadlines are fixed years in advance so it appears that most patent professionals continued to meet the deadlines for filing patent applications through the pandemic rather than rely on the normal or pandemic-related, extensions of time that may be available.

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Overall, the trends indicate that most of the activity bounced back relatively quickly after the initial lockdowns in March, April and May. Practitioners were able to use electronic filing systems provided by the Federal Court and CIPO to continue their practices while working remotely. The longer term trends probably won’t reveal themselves for months or years in terms of the pace of innovation as captured in new patent filings, availability of capital for new investment, the launch of new consumer products requiring branding, and burn out from practitioners and the public from long term lockdowns and uncertainty.

Developments in Patent Law in 2020

(Originally published March 17, 2021)

The Courts were busy in 2020 with some significant decisions in patent law addressing several substantive issues affecting the enforceability of patent rights in Canada. The following summary focuses on some of these decisions that may be of interest beyond those practicing patent law.

Computer-implemented Inventions – An area of significant an ongoing uncertainty has been the degree to which patents can be granted for software and ‘business method’ inventions. In Choueifaty v. Canada (Attorney General)2020 FC 837, the Federal Court rejected the approach used by the Canadian Patent Office in reviewing these types of inventions to identify the essential elements. This decision, and the subsequent guidance issued by the Canadian Patent Office in response to the decision, will likely make it easier for inventors to obtain patents for these types of inventions. The patent at issue, a computer-implemented method for providing an anti-benchmark securities portfolio, was allowed in early 2021. This court decision will also be significant for medical diagnostic inventions.

Accounting of Profits – In most patent proceedings, the patentee seeks financial remedies in the form of either its damages, such as lost sales due to the infringement, or an accounting of the defendant’s profits from the infringing activity. In, Nova Chemicals Corporation v. Dow Chemicals Company, 2020 FCA 141, the Federal Court of Appeal changed the default approach to calculating the costs, and therefore the profits, in an accounting of profits remedy. Instead of looking at incremental profits, the court said the proper approach was to consider the ‘full costs’, including the fixed costs of the defendant. This approach leads to a lower quantum for the accounting of profits remedy, particularly for defendants with significant fixed or overhead costs.

Summary judgment/trial – In 2020, the courts showed an increasing appetite to consider deciding substantive patent issues on a summary motion rather than proceeding to trial – see my earlier column Summary Determination of Claim Construction discussing ViiV Healthcare Company v. Gilead Sciences Canada, Inc., 2020 FC 486. In a decision issued in the first days of 2021, the Federal Court of Appeal joined in, saying in Canmar Foods Ltd. v. TA Foods Ltd., 2021 FCA 7, that a motion for summary determination brought at the close of pleadings, even before discoveries, was appropriate. Summary determination in appropriate circumstances can significantly reduce the typically high costs of patent litigation where there are issues of non-infringement or validity that can be readily determined without a full trial.

Contractual ownership – In a couple of decisions in 2020, the Federal Court concluded that it does have jurisdiction to hear ownership contractual and licensing issues that relate to patents. In Salt Canada Inc. v. Baker2020 FCA 127, the Federal Court of Appeal said the court can “determine who should be reflected on the records of the Patent Office as the owner of a patent—even if that involves interpreting agreements and other instruments.” As a statutory court under the Federal Courts Act, there was sometimes uncertainty as to the court’s jurisdiction over issues not directly under Federal jurisdiction, such as contract law, and as said in Mud Engineering Inc. v. Secure Energy Services Inc., 2020 FC 1049, “Salt Canada has definitively and, one hopes, finally put this issue to rest once and for all.”

Patent Demand Letters – Remedies for potential false and misleading “cease & desist” or patent infringement demand letters continue to be the subject of litigation in 2020. In Fluid Energy Group Ltd. v. Exaltexx Inc.2020 FC 81, the defendant in a patent infringement proceeding obtained an interim injunction against the plaintiff/patentee for writing to the defendant’s suppliers. See my earlier column that expands on this issue, Caution With Patent Demand Letters. It is contemplated that regulation of patent demand letters will become part of the Patent Act through section 76.2, but at this time, no regulations have been implemented.

This summary only touches on some of the many decisions of 2020 and excludes some significant developments on particular aspects of substantive patent law including obviousness, anticipation, and claim construction and remedies. So far 2021 has brought more significant patent decisions – stay tuned!