The Federal Court of Appeal recently upheld the dismissal of an appeal from a decision of a Patent Re-examination Board thus establishing that re-examination may be a viable alternative to challenge the validity of a Canadian patent.

Under s. 48.1 of the Patent Act, any person can request the re-examination of one or more claims of an issued patent by filing prior art with the Commissioner and paying a fee (currently $1,000 for small entities and $2,000 for standard entities). After receiving a re-examination request, the Commissioner is required to establish a Re-examination Board comprising at least three persons, two of which must be employees of the Patent Office.

The claims at issue in Newco Tank Corp v. Attorney General of Canada, 2015 FCA 47, aff'g 2014 FC 287 related to heating liquid storage tanks by using exhaust heat. The Commissioner received a request for re-examination supported by a number of prior art references including six U.S. patents. After consultation with the patentee, the Board rejected the claims on the basis of obviousness using the four-part test prescribed by the Supreme Court in Apotex Inc. v. Sanofi-Synthelabo Canada Inc., 2008 SCC 61.

Newco's appeal to the Federal Court was rejected by Justice Mosley who gave deference to the Board by applying the reasonableness standard mandated by Dunsmuir v. New Brunswick, 2008 SCC 9.

On Feb. 16, 2015, the Federal Court of Appeal upheld Justice Mosley's decision and confirmed that, absent an error in law, the appropriate standard to apply in reviewing decisions of a Re-examination Board is reasonableness.

The current Canadian re-examination procedure still only provides limited involvement to third parties in that representations are limited to the prior art submitted during re-examination. Additionally, re-examination may allow a patentee to strengthen claims by making amendments during the re-examination process. Given the Court of Appeal's decision, and depending upon the nature of the prior art submitted and the claims at issue, re-examination may be a cheaper alternative to a protracted and costly impeachment action. Moreover, if successful, any decision of the Re-examination Board will be given more deference than is currently ascribed to the statutory presumption of validity embodied in section 42 of the Patent Act.

Patrick Smith is an IP partner who has recently relocated to our Calgary office.