Defects in pre-patent issue process do not render a patent void

18 October 2017

In Apotex Inc. v Pfizer Inc. et al, 2017 FCA 201, the Federal Court of Appeal refused to void a patent based on an administrative error made during the prosecution of the patent application, confirming that pre-patent issuance defects in the administrative process for applying for a patent cannot be relied upon by an alleged infringer to render a patent void.

The facts of this case revolve around a series of errors made in relation to the payment of the final fee for the application of the Canadian Patent No. 1,339,132 (the "132 Patent"). The 132 Patent was filed on September 12, 1989, which meant that the 1989 version of the Patent Act (the "1989 Act") and applicable Patent Rules applied.

The applicant of the 132 Patent (Pfizer et al.) was, at all relevant times, considered a large entity under the Patent Rules and all prescribed fees in respect of the application and maintenance of the 132 Patent were paid on the basis that the applicant was a large entity. However, for reasons unknown, when it came time to pay the final fee for the application, which under the 1989 Act was $700 for large entities and $350 for small entities, the applicant's agent paid only $300. Some five months later, the agent wrote to the Patent Office to explain that due to a clerical error, only $300 had been paid and an additional $50 was paid. The 132 Patent was issued on July 29, 1997 and the remaining $350 owed for a large entity final fee was never paid. Despite this, in 2006, upon request by the applicant's agent, the Patent Office acknowledged receipt of payment as a large entity and confirmed that their records had been amended to indicate this status. As such, the error was never remedied.

During a proceeding under section 8 of the Patented Medicines (Notice of Compliance) Regulations, Apotex attempted to invalidate the 132 Patent on various grounds, including on the basis that the applicant had failed to pay the proper final fee and therefore the application was forfeited, thus rendering the 132 Patent void. The Court was not convinced.

Relying primarily on statutory interpretation, the Court set out to interpret various provisions of the 1989 Act, and specifically section 73. The Court found that section 73 of the 1989 Act did not expressly deal with the impact of application payment errors on an issued patent, especially when the error resulted from inadvertent mutual mistakes (i.e. mistakes on the part of both the applicant and the Patent Office). The Court went on to find that it would be an absurd result and contrary to the true purpose of the relevant provisions if any failure to meet any requirement of the Patent Act will render a patent void, as argued by Apotex. This was found to be especially true considering the importance of patents and the catastrophic consequences that a purely literal interpretation would lead to. Instead, the Court explained that the proper approach is to go beyond the literal text of the Act, and consider the context of the provision and the legislative purpose behind it.

The Court concluded that an alleged infringer cannot rely on pre-patent issuance defects in the application process to render a patent void. Indeed, the Court resolved that it would be absurd in the overall context of the 1989 Act to enable an alleged infringer to void a patent on the basis that the petitioner was "a few pennies short".

It is very unlikely that there will be another case involving section 73 of the 1989 Act, in which the validity of a patent is challenged for non-payment of fees payable before the issuance of the patent. Likewise, it is doubtful that we will see such a case under the current Patent Act, in light of the latest amendments (not yet in force) that are intended to directly address issues such as these.[1] However, this decision is likely to have broader implications in how courts approach their interpretation of the Patent Act. This is particularly true in light of the Court's concluding remarks regarding the importance of patents, and the importance given to intellectual property law in trade treaties, in which the Court cautioned against adopting an interpretation of Canadian patent law that would put Canada at odds with its trading partners, such as the Europe Union and the United States.

[1] Economic Action Plan Act, No. 2, SC 2014, c 39, s 138.

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