In Dtechs EPM Ltd. v British Columbia Hydro and Power Authority and Awesense Wireless Inc., 2021 FC 190, Justice Fothergill addressed allegations of patent infringement concerning Canadian Patent No. 2,549,087 (the “087 Patent”), which relates generally to monitoring usage of electrical utilities to detect potential instances of atypical consumption or theft, such as theft of electricity related to the indoor cultivation of marijuana.  The Defendants BC Hydro and Awesense successfully defended the claims of patent infringement.  Justice Fothergill concluded that not only had neither of the Defendants infringed any of the asserted claims of the 087 Patent, but also the 087 Patent was invalid for anticipation based on multiple prior disclosures and for obviousness.  Although the Defendants presented numerous additional defences, none of them needed to be addressed in view of the findings of non-infringement, anticipation and obviousness.

Background

As noted above, the 087 Patent relates generally to detecting atypical electricity consumption in an electrical grid, particularly at the distribution level.  The Plaintiff's founder, Mr. Roger Morrison, was a former sergeant with the Calgary Police Service, where he conducted investigations into organized crime and illegal drugs. Through his work as a police officer, Mr. Morrison became interested in the identification of marijuana grow operations by tracing the location of electricity theft.  After sharing his ideas with the Calgary Police and others and performing some limited tests while with the Calgary Police, Mr. Morrison took a leave of absence from the Police Service to pursue his work in this area further.  At around the same time, Mr. Morrison filed the application for the 087 Patent, and shortly thereafter incorporated the Plaintiff, dTechs.

The main asserted claim of the 087 Patent claimed, among other things, a method for detection of atypical electrical consumption patterns comprising connecting a meter (such as an ammeter) to a primary electrical supply line, monitoring the primary supply line at predetermined time intervals for consumption of electricity and determining patterns of consumption, comparing the patterns of consumption to known consumption patterns for identifying suspect consumption patterns, monitoring characteristics of corresponding transformers for identifying a suspect transformer, and load testing secondary lines from the suspect transformer to identify a suspect structure. 

dTechs alleged that BC Hydro used a system, supplied by Awesense, that relied on the methods described in the 087 Patent to detect electricity theft, and thereby infringed specified claims of the 087 Patent. BC Hydro and Awesense both denied infringement and alleged the 087 Patent was invalid based on anticipation, obviousness, insufficiency, inutility, overbreadth, and non-patentable subject-matter.  BC Hydro also asserted defences related to prior use, statutory authority, and lack of standing on the part of the Plaintiff, but none of those defences were considered by the Court in view of the Court's findings on non-infringement, anticipation and obviousness.

Purposive construction: The specification guides

After restating the principle that claim construction is a matter of law for the judge, and that expert evidence is necessary only where the meaning of a term is not apparent based on a reading of the patent specification, the Court addressed the key claim terms in dispute.

Construction of "known consumption patterns"

The primary dispute between the parties was the construction of "known consumption patterns".  The 087 Patent claims involved comparing measured electrical patterns to "known consumption patterns" for the detection of anomalies indicative of theft.  dTechs advanced a construction that "known consumption patterns" included measurements taken at the same time but at a different point on the electrical grid, such as same-time smart meter measurements.  The Defendants, in contrast, put forward a construction that "known consumption patterns" meant historical or predicted patterns of consumption for the location currently being measured. Using the specification as its guide, the Court agreed with the Defendants and concluded that "known consumption patterns" was limited to historical or predicted patterns of consumption.  This finding alone was sufficient to dispose of dTechs' entire infringement argument.

Transitional phrases

An ancillary construction issue to "known consumption patterns" was the construction of the transitional phrase "further comprising" in dependant claim 4. Dependant claim 4 states:

4. The method of claim 1, 2 or 3 further having a smart meter connected to secondary lines at each structure for determining consumption at each of the structures, the method further comprising:

Comparing electrical supply at the primary supply line to a sum of the consumption at all of the secondary lines for reconciling consumption to the supply.

dTechs advanced a construction that claim 4 narrowed claim 1 to the situation where the "known construction patterns" was same-time smart meter data. The Defendants argued that the language of claim 4, including the transitional phrase "further comprising" indicated that claim 4 was adding a new step to the method of claim 1.  The Defendants' position was consistent with the patent description, which described same-time smart meter energy balancing as "an additional advantage" to the disclosed method.  The Court again agreed with the Defendants and confirmed that the transitional phrase "further comprising" indeed refers to an additional step in a method claim:

[145] The dependent claims of the 087 Patent either broaden the independent claims ("further comprising"), or narrow them with specified refinements ("wherein"). Claim 4 is in the former category. The language of claim 4 ("further comprising") demonstrates that the use of a smart meter is an additional step to those described in claim 1. The smart meter in claim 4 is not intended to be an alternative means of identifying "known consumption patterns" in claim 1

Infringement and inducing infringement of a method

The Court's conclusion on the construction of "known consumption patterns" was "sufficient to dispose of dTechs' allegations of infringement". Notwithstanding there was no infringement, the Court addressed some principles of infringement of method claims and inducing of infringement of method claims.

Specifically, the Court reiterated the established principle that "in order to infringe a method claim, an alleged infringer must carry out the claimed method". While such a finding may seem self-evident, an issue that arose in the evidence advanced by the parties was whether the existence of a "system" that could be used to infringe a method was sufficient evidence to establish the "carrying out" of a claimed method. This issue was not specifically addressed by the Court.

In addition, dTechs argued that the Defendant Awesense's supply of hardware and software to BC Hydro resulted in liability for BC Hydro's alleged infringement of the asserted method claims.  The Court rejected dTechs' argument stating that the supply of hardware and software cannot in itself infringe the asserted method claims:

[178] There is no infringement of a patent in selling an article that does not in itself infringe the patent, even when the vendor knows that the purchaser buys the article for the purpose of using it in the infringement of the patent (Uponor at para 285). Awesense's supply of hardware and software to BC Hydro cannot in itself infringe the asserted claims.

[179] BC Hydro employees may use Awesense's TGI software to perform calculations and analysis, but this does not mean that Awesense performs those steps. Awesense exercises no control over the manner in which BC Hydro uses TGI. There is no evidence that Awesense ever induced BC Hydro to infringe the asserted claims, or to support an allegation of infringement by common design.

The Court's findings confirm the principle that inducing infringement requires more than the mere provision of equipment that can be used to infringe.  As the Court explains, there must be some form of "control over the manner" in which that equipment is used for inducement to even arise as a possibility.

The 087 patent found invalid on multiple grounds

Turning to validity, the Court found the asserted claims invalid for anticipation and obviousness.  In so finding, the Court agreed with the Defendants' arguments that the asserted method claims (including monitoring on the primary electrical supply line and the need for a meter with sufficient resolution to detect variations from known consumption patterns on the primary line) were known, and would in any event be self-evident, being dictated by basic and well-established electrical concepts.

Anticipation

The Court found the asserted claims were anticipated and thus invalid in three different respects, namely, based on Mr. Morrison's own "Operation Lights Out" proposal document, by BC Hydro's prior public use predating the claim date, and by a third party's publication referred to as the "De Reference". 

Inventor's own disclosure – While working as a police officer on methods to identify atypical levels of electrical consumption, the inventor prepared a summary of his findings and proposed methods entitled "Operation Lights Out", which he presented and disclosed to his superiors at the Calgary Police Service.  The summary disclosed the methods that eventually became the subject of the asserted patent claims.  The summary was then sent by the Calgary Police Service to the electrical utility ENMAX.  The Plaintiff was not able to produce a confidentiality agreement or witness from the Calgary Police or ENMAX to say that the disclosures were confidential.  

The Plaintiff claimed that the disclosure by the inventor to the Calgary Police was in the context of a proposed police operational plan, and was therefore in confidence, and that there was inherent confidentiality in the working relationship between ENMAX and the Calgary Police, because it concerned the identification of illegal drug operations.  The Court disagreed, applying the Federal Court of Appeal's decision in Baker Petrolite Corp v Canwell Enviro-Industries Ltd to the effect that disclosure to "the public" means disclosure to any single person who is "free in law and equity to examine it".  As the Court found that the inventor exercised no control over the persons to whom the document was distributed or their use of the document, at both the Calgary Police and ENMAX, the Court found that the disclosures to both Calgary Police and ENMAX were anticipatory. 

The Court's decision in this regard highlights the hazards of disclosing potentially patentable technology, even within an organization, without appropriate confidentiality protections in place.

BC Hydro's prior use – BC Hydro also adduced evidence of a BC Hydro field inspection advisor who conducted energy theft investigations on behalf of BC Hydro, and who gave evidence of instances where the asserted methods claimed in the 087 Patent were performed by BC Hydro, before the claim date.  The Court accepted that the prior use methods described by BC Hydro anticipated all essential elements of many of the asserted claims.  While the Plaintiff argued that BC Hydro's methods were not disclosed to the public, the Court accepted the witness' evidence that he had discussed BC Hydro's theft detection techniques with police officers and that was sufficient to establish that the methods were disclosed to members of the public without inhibiting fetter.  

The Court also rejected the Plaintiff's argument that the witness' viva voce evidence was uncorroborated and insufficient to invalidate the patent.  The Court held that documentary evidence showing a specific instance of the method being performed was not necessary, and it was enough that BC Hydro's witness gave evidence as to his recollection of the methods performed at that time, which was consistent with the evidence of another witness and specifications for the devices that BC Hydro's witness described using at the relevant time. 

De reference – The asserted claims were also found invalid over a 2003 academic study referred to as the De reference.  The Court found that the Plaintiff's expert conceded that the asserted claims, in his opinion, differed from the De reference only with respect to the comparison of consumption patterns with same-time data from smart meters, in a manner that tracked the Plaintiff's argument as to the proper construction of "known consumption patterns".  Having found against the Plaintiff on construction, the Court also found that the asserted claims were anticipated.

Obviousness

The Court also found all of the asserted claims would have been obvious to the person of skill in the art.  The Court found that the inventive concept of the asserted claims was monitoring on the primary, medium voltage line (as opposed to on secondary lines) to detect electricity theft or other losses.  The Court noted that concept was known – it was disclosed in the De reference, and in three other prior art references cited by BC Hydro.  The Court also noted the inventor's own admission that it was "clear and self-evident that to put the meter at the primary line instead of at the transformer level was the better way to do it", given the advantages the inventor had perceived. This admission was particularly notable because it was established that the inventor had "no electrical training, and no direct experience of maintaining an electrical distribution system", and, as a result, the inventor was "significantly less qualified than the PSA".

The Court concluded that the person of skill in the art, presented with the problem of inefficient monitoring on inaccessible secondary lines at the transformer level, would directly and without difficulty arrive at the solution of monitoring on the primary line instead, and that was within the skilled person's common general knowledge. The Court also found that the need for a meter with sufficient resolution to detect variations from known consumption patterns on the primary supply line would be "self-evident", dictated by basic and well-established electrical concepts. Relying on those findings, the Court found all of the asserted claims invalid for obviousness.

BC Hydro was successfully represented by Gowling WLG litigators Michael Crichton, Nelson Godfrey, Marc Crandall and Charlotte Dong.