snIP/ITs Insights on Canadian Technology and Intellectual Property Law

Canada’s Federal Court of Appeal Unsettles Obviousness Law

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James S. S. HoltomDavid TaitSteven Tanner

Ciba Specialty Chemicals Water Treatments Limited v. SNF Inc., 2017 FCA 225, is the Federal Court of Appeal’s latest word on obviousness in patent law. The decision appears to unsettle established approaches to assessing obviousness. For what may be the first time since the Supreme Court’s endorsement of the “inventive concept” approach to evaluating obviousness in 2008, the Federal Court of Appeal by-passed the inventive concept inquiry entirely. The court also held that all dependent claims in the patent were invalid because the independent claim was obvious without reconciling previous Federal Court of Appeal jurisprudence holding that this was legally wrong. Finally, the court split 2-1 on the issue of whether the prior art in an obviousness attack must satisfy the “reasonably diligent search” test, with one judge declining to comment.

At trial, the Federal Court held that the patent at issue was obvious. The appellant alleged a series of errors on the part of the trial judge, including errors in the court’s preference between expert witnesses, and its determination of the common general knowledge. The appeal court dismissed these arguments, holding that the high standard of review – palpable and overriding error – had not been met.[1]

Next, the Federal Court of Appeal held that the trial judge had both misstated and misapplied the obviousness framework adopted by the Supreme Court of Canada in Apotex Inc. v. Sanofi-Synthelabo Canada Inc., 2008 SCC 61.[2] Rather than remit, the Federal Court of Appeal conducted the obviousness analysis afresh.

Three aspects of the court’s decision raise interesting issues for future cases.

First, the court chose not to determine the inventive concept of the claim. The court held that it was more efficient to simply construe the claims and invited Supreme Court guidance on the definition of “inventive concept”:

There may be cases in which the inventive concept can be grasped without difficulty but it appears to me that because “inventive concept” remains undefined, the search for it has brought considerable confusion into the law of obviousness. That uncertainty can be reduced by simply avoiding the inventive concept altogether and pursuing the alternate course of construing the claim. Until such time as the Supreme Court is able to develop a workable definition of the inventive concept, that appears to me to be a more useful use of the parties’ and the Federal Court’s time than arguing about a distraction or engaging in an unnecessary satellite debate.[3]

Applying the obviousness framework to its construction of Claim 1, the court held that Claim 1 was obvious.

Second, the court held that since Claim 1 was obvious, every other claim was therefore also obvious:

The result is that Claim 1 is obvious and, since all other claims are directly or indirectly dependent on Claim 1, the ‘581 Patent is invalid.

This holding is difficult to reconcile with prior Federal Court of Appeal jurisprudence not cited by the court. In Zero Spill Systems (Int’l) Inc. v. Heide, the Federal Court of Appeal reversed the Federal Court on this very holding:

The Federal Court was obliged to consider the validity of the ’064 Patent claim-by-claim. Not doing so was a legal error. Notwithstanding that Claim 13 is actually an independent claim, the nature of dependent cascading claims is to narrow the claims upon which they depend: Purdue Pharma v. Pharmascience Inc., 2009 FC 726, 77 C.P.R. (4th) 262 at paragraph 10. The practical effect of this on anticipation or obviousness is that eventually a claim may be sufficiently narrow to escape these prior art-based attacks, even though the broader claims may be invalid.[4]

Third, Justice Woods wrote a two-paragraph concurrence, declining to endorse the “reasonably diligent search” test cited by the majority. According to that test, only prior art that would be found by the skilled person conducting a reasonably diligent search may be cited in an obviousness attack. Some have argued that section 28.3 of the Patent Act, which places temporal restrictions on the prior art citable in an obviousness attack, overruled the reasonably diligent search test. In Justice Woods’ view, endorsing the test was unnecessary and it would have been preferable to reserve comment until it was squarely raised by the parties.[5]

[1] At paras. 27-33 (preference as between expert witnesses), 34-42 (content of the common general knowledge).

[2] At para. 44

[3] At para. 77.

[4] Zero Spill Systems (Int’l) Inc. v. Heide, 2015 FCA 115 at para. 94.

[5] At paras. 99-100.