The Federal Court's decision in Kobold v NCS, 2021 FC 1437 presents a few firsts. Most importantly, it is the first time the Federal Court has been asked to interpret and apply the new "prior use" defence in section 56 of the Patent Act. The Court took a thorough approach to setting out the judicial history of the provision, explaining the legislative intent behind the amendments, and interpreting the new language used in the various subsections.
Following this thorough analysis, the Court provided a roadmap to be followed in considering a defence under subsection 56(1):
- First, one must determine whether the acts being performed before and after the claim date are identical (other than wholly non-functional changes, such as colour). If yes, then there is no infringement under section 56(1), and there is no need to perform an extensive infringement analysis.
- Second, if the acts are not identical, one must determine whether the acts infringe the patent, and if they do, which claims. If the post-claim date acts do not infringe any claim, then there is no infringement. If the pre-claim date acts do not infringe any claim, then section 56(1) cannot apply. Unless the pre- and post-claim date acts infringe the same claim (or claims), section 56(1) cannot apply.
- Finally, if the pre- and post-claim date acts are not identical but only infringe the same claims, then one must determine whether the changes relate to the "inventive concept" of the patent.
The final point is interesting as it relates to the "inventive concept." Earlier in the decision, the Court seemed to focus on ensuring the "infringement elements" or "infringing aspect of the device" are identical pre- and post-claim date. However in the summarizing the road-map, the language changed to "inventive concept." While recent guidance from the Federal Court of Appeal suggests that the inventive concept is typically considered to be the claim(s) as construed (i.e., there is no difference between the claim elements and the inventive concept), there are other instances where the inventive concept is not identical to the claimed elements. In these types of cases where section 56 arises, the parties may be focusing on different aspects of the decision in Kobold.
In Kobold, the road-map was resolved as follows: (1) the pre- and post-claim date acts were not identical because the products changed over time; (2) there was insufficient evidence to determine if the post-claim date products infringed; and (3) there was insufficient evidence to determine if the changes to the products related to the "inventive concept." Due to the lack of evidence, the applicability of section 56(1) was left for trial.
The second "first" is that this decision appears to be a type of Markman hearing decided by summary judgment. As noted above, the Court did not resolve whether section 56(1) applies due to a lack of evidence. Notwithstanding, the Court proceeded with a full claim construction and issued a judgment in this regard. The effect is that, subject to any appeal, this construction will be applied by the parties at the subsequent trial. This process resembles Markman hearing in the US. It will be interesting to see if this process is followed in subsequent cases.
The third "first" is that this decision is the first to buck the recent trend of deciding patent cases on the basis of non-infringement on a summary judgment or trial motion. Since 2019, accused infringers were 3/3 on non-infringement summary disposition. That record is now 3/4.
As a final comment, the decision reads as largely successful for Kobold. However, it is notable that Kobold conceded non-infringement of the Mongoose product in the context of the summary judgment motion. Therefore, one of the accused products is no longer part of the case. This concession may have been significant to NCS, and may be the reason why the Court noted that success was divided on the motion.
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 See paras.104 and 106, respectively.