What to Watch for in Canadian Intellectual Property Law in 2013

A soothsayer in front of a king: (Olaus Magnus 1555)

Here are a few things to look out for this year. These are essentially in the form of questions – for most of which there is no easy answer to predict. So, I’ll refrain from predicting.

COPYRIGHT

1. The year will no doubt kick off with the Voltage Pictures “mass litigation” campaign. It might be noted that a similar effort by Voltage involving Quebec based ISPs that did not oppose the motion to disclose their clients’ identities fizzled last year for unknown reasons – and with no individuals actually being sued. This time around, some seem to think that Voltage is more determined. Will feisty, progressive Teksavvy, the ISP that has built its reputation on being customer-friendly, actually stand up and fight for its customers’ “privacy” without taking sides on “piracy”? That’s what Shaw and Telus did vigorously and successfully in 2004, with Bell and Rogers onside if not quite as actively. What should/will Teksavvy do if it turns out to be relatively easy for it to challenge the adequacy of Voltage’s material for the motion that seeks disclosure of the names and addresses of potentially thousands of Teksavvy’s customers? The law on this, including the evidentiary concerns that could arise, was clearly laid out in the BMG case by the Federal Court of Appeal in 2005 and the background is all there on CIPPIC’s website. If Voltage’s widely circulated current material is indeed inadequate (upon which I make no comment) and an ISP as savvy as Teksavvy doesn’t challenge its adequacy at the outset, what signal will this send to future potential mass litigators and copyright “trolls”? And to Canadian ISP customers generally and Teksavvy’s customers in particular? What could CIPPIC do if it is permitted to intervene? Is this something that CIPPIC will have to do on a regular basis? What will happen if the names and addresses are eventually provided to Voltage? Will there actually be lawsuits, or will there simply be high pressure settlement demands en masse? To be continued on January 14, 2013 in the Federal Court.
2. Will the Copyright Board impose a retroactive levy on microSDs from January 1, 2012 to November 7, 2012, when the microSD exclusion regulations were published in the Canada Gazette Part II?
3. Will the Access Copyright (“AC”) post-secondary tariff hearing continue unabated towards what may be a “mandatory” tariff, despite the many “opt-outs” from the interim tariff and the widespread decision by institutions ranging from school boards to research universities that they don’t need and don’t want what they perceive as an expensive and unnecessary blanket license from AC anymore? If so, who will represent the interests of Canada’s universities, who have reportedly spent almost $2 million on this case (not counting immeasurable internal “interrogatory” and management time) and now have no ongoing role or representation in this hearing, which could turn out very badly for them?
4.  Will U of T and Western exercise their options not to extend their agreements with Access Copyright beyond 2013 by providing notice to AC before the end of June, 2013?
5. How will the various fair dealing “guidelines” be received and used by those who were intended to benefit from them? The main ones emanate so far from U of T and ACCC. The AUCC guidelines are essentially identical to those of ACCC, but do not yet appear to have been yet officially deployed. In fact, AUCC has been virtually silent on the copyright front since before C-11 was given Royal Assent on June 29, 2012 and the Supreme Court of Canada delivered its “pentalogy” on July 12, 2012.
6. Will the copyright chill in Canadian classrooms and libraries continue to thaw and will Canadian teachers, librarians, and administrators now get back to their real roles and “just do it” when it comes to education, as they have been empowered to do by Parliament and the Supreme Court of Canada?
7. Will AC actual make good on its threats of litigation, and if so, will AC finally achieve success against anyone other than “Mom and Pop” copy shops?
8. Will Rogers et al get their “ring tones” tariff payments back, either via the Copyright Board or the Federal Court or both or neither?
9. How will the SCC “pentalogy” results play out at the Copyright Board and the Federal Court of Appeal, particularly concerning the strong substantive messages about technological neutrality, layering and fair dealing – not to mention the “sempiternal” issue of “standard of review”?
10. Wll the Board allow SOCAN to continue with its quest for a new tariff for what SOCAN considers to be a new “making available right” that, in its view, renders moot and inapplicable the recent conclusion reached by the Supreme Court of Canada in ESA v. SOCAN, 2012 SCC 34? Will other collectives such as Access Copyright jump on board if this train leaves the station? What would the Federal Court of Appeal and, potentially the Supreme Court of Canada, do with this if the Board lets go forward?
11. How will the Supreme Court deal with the Cinar v. Claude Robinson case, which will be heard on February 13, 2013 and argued by some very prominent counsel, which deals, inter alia with “steps and tests for determining whether substantial part of work reproduced within meaning of ss. 2 and 3 of Copyright Act” according to the SCC summary?
12. How will Canada fare in the TPP and CETA negotiations? Can our negotiators at least “do no harm” on the copyright front? Can they resist the pressure from foreign interests to inject harmful red herrings such as “three step test” language and harmful concepts, such as term extension, into Canadian law?
13.  Are we going to see any further attempts to convince the Board and the Courts that a word such as “excludes” really means “includes”?
14.  What will happen in the Warman v. Fournier appeal, which appears to be back on track following the Fourniers’ attempt to have it dismissed? Will the Fourniers continue to be self-represented, now that the National Post is weighing in as a party on the other side with experienced and prominent copyright counsel? There are important issues at stake re what is “substantial” and what is “fair dealing”. Will there be interventions that may assist the Court in a  case involving an unusual fact situation that that could have far reaching results?
15. Will Catherine Leuthold succeed on appeal in getting $21 million+ from the CBC and recovering her legal costs or least not having to pay CBC twice its costs because she refused a settlement worth almost twice as much as the just over $19,000 that she was awarded by the Court?
16.  Will the “Canadian” record and film industries sue isoHunt under the new post C-11 law, now that their much sought after legislation is in place? What, if anything, will happen with the existing and apparently dormant litigation commenced by both sides a few years ago under the former law?
17. Will we see the beginning of a measurable correction and perhaps even a tipping point – whether through Copyright Board decisions, the Courts, the market, or ultimately the Government’s regulatory power – with respect to the increasing powers of Canadian collectives and the increasing and already enormous costs of opposing their proliferating and increasing demands?
18.   Will we see the demise of one or more of Canada’s three dozen or so collectives resulting from such factors as changes in technology (e.g. a shift from paper course packs to digital delivery, the demise of blank CDs, etc.), increased sophistication of users (e.g. educators), and legislation from Parliament and jurisprudence from the Supreme Court of Canada?
19.  Will Canada re-appear at or near its recently achieved high ranking on the “Priority Watch List” of the USA’s “Special 301” list of IP malefactors and will anyone, except some lobbyists and USTR officials, actually care?
20. Will WIPO be successful in its high-stakes effort to secure a good copyright treaty for the blind, and what role will Canada play in this effort, which is not only important for the future of blind people everywhere but for the future of WIPO?

PATENT LAW

1. Will Pfizer succeed in its very unusual attempt to get the Supreme Court of Canada (“SCC”) to change its mind following the recent ruling in the Viagra case that rendered its patent “void”- period - and not just invalid as against Teva for Notice of Compliance purposes?
2.  Will the generic drug industry suffer as a result of the CETA negotiations?
3. Will the Government use the CETA agreement – if there is to be one – as an opportunity to reform the PMNOC regime, which is taking up enormous amounts of the time of the Federal Court and the Federal Court of Appeal and is creating serious problems and immense expense for both the “innovative” and generic sides? Will we see a movement toward the American Hatch-Waxman model, which is a one-stop mechanism?
4.  Will Canada remain an island of calm in the global smart-phone patent wars?
5.  Will patent “trolls” try to bring their business model to Canada?

TRADE-MARKS LAW

Canadian trade-marks law works remarkably well – which is quite understandable for those who know its history.  However, Canada is not immune from foreign and even domestic pressures to make it work  much less well:

1. Will Canada agree via CETA or TPP to permit “ex officio” border enforcement actions – i.e. officials acting on their own with their limited legal training and without judicial oversight – to stop alleged “counterfeit” products, thereby putting legitimate parallel imports at great risk of seizure? If the nine justices of Supreme Court of Canada can’t agree on what is a legitimate “parallel import”, should customs officials be given the power to tie up millions of dollars worth of goods – perhaps even life saving medicines - on the spot on their own initiative?
2. Will Canada ban the use of “geographic indications” such as “Parmesan cheese” by Canadian consumers for the sake of a trade deal with Europe? If so, what will we ask for with our pizza or pasta in the future?
3. Will major retailers such as Wal-mart, Costco, etc. be permitted to use their federally registered trade-marks “as is” in Quebec? Or will they have to adopt trade-marks such as “Le Magasin Wal-Mart”?
4. Will Canada join the Madrid Protocol, a one-stop shop international filing process operating through WIPO that is much favoured by large international brand owners and much feared by Canadian trade-mark practitioners?

There is no doubt that we “live in interesting times” in the IP world. I should disclose that I have or have had or may have some involvement in some of the above matters. If that seems rather vague, it’s more disclosure than some of my friends in other firms and institutions are providing these days…

Welcome to 2013. And a Happy New Year to one and all….

HPK

Updated - Pfizer Seeks Amendment or Re-hearing of Supreme Court of Canada's Viagra Judgment

In the Teva v. Pfizer (“Viagra”) case, the Supreme Court of Canada on November 8, 2012 rendered a 7/0 judgment  that concluded as follows:

H. Remedy

[81] I have reached the conclusion that Patent ’446 does not comply with s. 27(3) of the Act. What is the appropriate remedy?

[82] The remedy for inadequate disclosure was stated by this Court in Pioneer Hi-Bred:

Canadian courts have stated in a number of cases the test to be applied in determining whether disclosure is complete. The applicant must disclose everything that is essential for the invention to function properly. To be complete, it must meet two conditions: it must describe the invention and define the way it is produced or built [citation omitted]. The applicant must define the nature of the invention and describe how it is put into operation. A failure to meet the first condition would invalidate the application for ambiguity, while a failure to meet the second invalidates it for insufficiency. The description must be such as to enable a person skilled in the art or the field of the invention to produce it using only the instructions contained in the disclosure . . . . [Emphasis added; citation omitted; pp. 1637-38.]

[83] In the case at bar, Patent ’446 is insufficient, because a skilled reader having only the specification would not be able to put the invention into operation. Therefore, Patent ’446 is invalid.

[84] Although s. 27 does not specify a remedy for insufficient disclosure, the logical consequence of a failure to properly disclose the invention and how it works would be to deem the patent in question invalid. This flows from the quid pro quo principle underpinning the Act. If there is no quid — proper disclosure — then there can be no quo — exclusive monopoly rights.

[85] Pfizer, however, appears to argue that the patent cannot be deemed invalid, because Teva did not argue that s. 53 applies (R.F., at para. 82). Section 53 specifically states that a patent will be void if

any material allegation in the petition of the applicant in respect of the patent is untrue, or if the specification and drawings contain more or less than is necessary for obtaining the end for which they purport to be made, and the omission or addition is wilfully made for the purpose of misleading.

[86] Pfizer submits that Teva’s argument about “concealment” of the useful compound in the patent is a thinly veiled accusation of fraud, but that Teva has never alleged that Patent ’446 contravenes s. 53 (R.F., at para. 79). Further, Pfizer states that, “s. 27(3) . . . [was never] intended to address an allegation of deliberate deception” (R.F., at para. 80).

[87] There is a very simple response to Pfizer’s submissions on this point. Even if s. 53 was not raised and its requirements were not met, this does not mean that the disclosure was adequate for the purposes of s. 27(3). These provisions can be independent of each other, as is the case here. Although wilful intent to mislead has not been alleged or proven in this case, insufficient disclosure has been alleged and I have found that it has been made out. Therefore, in light of the remedy adopted in Pioneer Hi-Bred, Patent ’446 is invalid.

I. Other Submissions

[88] Pfizer and the intervener Canada’s Research-Based Pharmaceutical Companies argue that Teva’s submissions are incompatible with Canada’s international obligations, and more specifically with the Patent Cooperation Treaty, Can. T.S. 1990 No. 22, incorporated into Canadian law by the Intellectual Property Improvement Act, S.C. 1993, c. 15, s. 29(1). The essence of this argument is that Teva is advocating for an enhanced disclosure requirement which, Pfizer and the intervener says, is contrary to Canada’s obligations under the Treaty.

[89] There is no need to address this argument at length. Since, as I have already explained, this is not a case about sound prediction, the Court does not need to consider whether a claim of utility that is based on sound prediction would impose an “enhanced” disclosure obligation on the patentee or whether such an “enhanced” disclosure obligation — if one existed — would be contrary to the Treaty. Neither the parties nor the interveners argue that the disclosure requirements of s. 27(3) violate any international obligations. The only issue in this case is whether the disclosure requirements set out in s. 27 of the Act were met. This argument must therefore fail.

[90] Finally, I will note that the delay of 13 years between the filing of the patent and Teva’s challenge is inconsequential. As Nadon J.A. found in the reasons of the Federal Court of Appeal in this case, the relevant question is whether the disclosure was sufficient as of the date of filing. Consequently, the passage of time does not bar Teva’s challenge.

V. Conclusion

[91] I would therefore allow the appeal with costs and hold that Patent 2,163,446 is void.

Pfizer has filed a motion seeking to amend the judgment, or alternatively for a re-hearing by the Supreme Court of Canada on the basis, inter alia, that:

This Court accidentally granted a remedy in this appeal that exceeds its jurisdiction. In holding that Pfizer’s 446 Patent was invalid and void, this Court overlooked the legislative context in which the proceeding was brought, and that this Court did not have jurisdiction to issue a judgment invalidating Pfizer’s 446 Patent or declaring it void.

The Supreme Court Rules do provide for the possibility of amending a judgment or a re-hearing. I am unaware of any IP decision where there has been a re-hearing pursuant to Rule 76.  According to Henry Brown’s authoritative text on Supreme Court of Canada Practice, “Motions to amend under rule 81 may only be made to correct minor technical slips or errors in the judgment or pronouncement”.

Here is Pfizer’s Notice of Motion and Factum in support of the motion.

HPK 

PS - in  a dramatic but predictable development, Justice Zinn in the Federal Court has just followed the SCC's ruling on the invalidity of the patent and went on to hold that:

[32] I reject the submission of Pfizer that the question of the sufficiency of disclosure in Teva was a mixed question of fact and law. I agree with Apotex that in Teva the sufficiency of the disclosure of the ‘446 Patent turned on three questions of law: (1) the determination of the invention or inventive concept of the patent, (2) the construction of the ‘446 Patent, and (3)
whether the ‘446 Patent, properly construed, permitted the person of skill in the art “to make the same successful use of the invention as the inventor could at the time of his application.”[33] The determinations made by the Supreme Court on those three questions of law are binding on this Court. Its finding that Pfizer, in failing to disclose which of the many compounds named in the ‘446 Patent was effective in treating erectile dysfunction, had not properly or sufficiently disclosed its invention, is a finding that this Court must respect and follow. As a consequence, when, as here, the action seeks a declaration of the invalidity of the ‘446 Patent for insufficient disclosure, there can be no genuine issue for trial because no result is possible other than a finding that the ‘446 Patent is invalid. Accordingly, Apotex is entitled to summary judgment. 

 HT to Alan Macek - whose excellent blog IPPractice is a must.