Federal Court of Appeal Clarifies Duty of Good Faith During Patent Prosecution

One of the most current topics in Canadian patent litigation is whether there is a general duty of good faith during the course of patent prosecution, and if so, whether a breach of that duty is a ground for invalidating a patent. In Corlac Inc. v. Weatherford Canada Ltd.¹ the Federal Court of Appeal has ruled that any lack of good faith in responding to an office action will not invalidate a patent in a subsequent court proceeding. It is for the Commissioner of Patents to determine if an applicant has responded in good faith, not the courts.

Section 73 of the Patent Act includes an obligation to reply in good faith to any office action. If a reply is not made in good faith, the consequence is a deemed abandonment of the application.

In 2009, a decision of the Federal Court in Lundbeck Canada Inc. v. Ratiopharm Inc.² invalidated an issued patent because the applicant failed to respond to an office action in good faith. When responding to an office action, Lundbeck's patent agents provided the examiner with four prior art references and argued that they "taught away" from the invention. Lundbeck's agents did not mention another prior art reference in the file which contained a directly relevant study that came to the opposite conclusion. Justice MacTavish compared patent prosecution to an ex parte court proceeding. A party seeking ex parte relief has the duty of ensuring that the court is apprised of all of the relevant facts, and must do more than simply present its own case in the best possible light, as would be the case if the other side were present. Like an ex parte litigant, patent applicants must state their case fairly and raise any points of fact or law known to it which favour the other side. Having failed to mention the article, Justice MacTavish determined that Lundbeck failed to reply in good faith to the office action. The patent was held invalid. Many defendants in patent actions began combing through file histories, particularly office action responses, to raise invalidity defences based on a lack of good faith.

Weatherford was the first opportunity for the Court of Appeal to squarely consider whether a patent may be invalidated because of a demonstrated lack of good faith in responding to an office action.

The Court determined that Lundbeck should not be followed; section 73 only applies during prosecution of the patent application. The operation of this section is extinguished once the patent issues. If there was a lack of good faith in responding to an office action, that is for the Commissioner of Patents to determine, not the courts. A defendant in a later infringement action cannot raise a lack of good faith in responding to an office action as a ground of invalidity.

Section 53 of the Patent Act provides that an issued patent may be held invalid if a material allegation in the petition is untrue. (The petition is a one-page document listing the applicant, inventors and the identity of the agent; it does not set out the substance of the invention). This was also an issue in Weatherford as the named inventor, Grenke, had filed a request to remove the name of a co-inventor, Torfs. It was determined that Grenke did this not only because he had acquired all of the rights through assignments, but because Torfs had "cut him out" of other patents. While this was a misstatement, it was not found to be material. The patent was not invalidated because Torfs was removed as an inventor.

The Weatherford decision will no doubt come as a relief to Canadian patent agents, whose past office action responses will no longer be subject to scrutiny when the validity of a patent is challenged. It is also expected that parties will pay closer attention to the patent filings of their competitors and, where appropriate, attempt to file protests to raise allegations of lack of good faith in responding to an office action while applications are still pending.

Notes

1. 2011 FCA 228
2. 2009 FC 1102