Is There a s. 73 Duty of Candour and is Deemed Abandonment a Ground for Alleging Patent Invalidity?

Essien Udokang is an Articling Student at Torys LLP

The term “good faith” suggests a sincere belief or motive without any malice or the desire to defraud others. Section 73(1)(a) of the Patent Act requires that, during the prosecution of a patent, an applicant reply in good faith to any requisition made by a patent examiner in connection with an examination, within six months after the requisition is made. How broadly should the duty of good faith be interpreted? Does it extend to include a duty of candour as exists in the United States, which would suggest a higher, equitable, standard of forthrightness than that arguably provided by s. 73? Is s. 73 to be relegated to administering patent prosecution, or can it be used post patent issue to challenge validity?

An extensive judicial treatment of s. 73 was offered by Justice Hughes in G.D. Searle & Co. v. Novopharm Ltd, 2007 FC 81, a case involving an application by an innovator pharmaceutical company to prohibit the Minister of Health from issuing a Notice of Compliance to the respondent, Novopharm. Novopharm had alleged that the patent was abandoned pursuant to s.73(1) because Searle misled the CPO during the course of the prosecution of the application for the ‘576 patent by saying that the EPO had allowed claims identical to claims 1 to 16 to proceed to a patent when in fact only claims 1 to 8 had been allowed to proceed.

While s. 73 was only enacted in October 1996, Justice Hughes opined that there has been a doctrine of good faith in respect of patents in Canada for at least sixty years (citing President Thorson of the Exchequer Court in Noranda Mines Ltd. v. Minerals Separation North American Corp., [1947] Ex. C.R. 306). He also concluded that it is to be expected that there will be full, frank and fair disclosure during communications with the Patent Office.

On the question of whether an after-the-fact finding that a response made during prosecution lacked good faith could invalidate an issued patent, he concluded that “it is not harsh or unreasonable, if after the patent issues, and the disclosure is found to lack good faith, that the Court deems the application, and thus the patent, to have been abandoned.” (G.D. Searle at para. 73)

While conceding that there is no provision in the Patent Act or Rules that directly provides a third party the right to invalidate a patent for lack of good faith during application prosecution, Justice Hughes determined that evidence of prior non-compliance with section 73 could result in a retroactive deemed abandonment of an application, and invalidation of the corresponding issued patent. The trial case was overturned by the Federal Court of Appeal, but on different grounds and with no comment on Hughes J.’s s. 73 dictum.

In Janssen-Ortho Inc. v. Apotex Inc., 2008 FC 744, Justice Shore took a different position than Hughes J. He considered an allegation that a patent was void on the basis that the applicant’s agent failed to provide complete particulars of the prior art cited in the corresponding United States and EPO applications resulting in abandonment of the application and a breach of its duty of candour with the Commissioner of Patents. The applicant had only disclosed the identity, and not the particulars, of all prior art references cited in the US application.

Justice Shore concluded that it was sufficient to provide the examiner with citations to the relevant prior art; it was unnecessary to provide the documents themselves. He determined that “it is clear that there is no express duty of candour contained in the Patent Act or the Patent Rules and that the word ‘candour’ does not even appear in this legislation. While a duty of candour and good faith exists during the prosecution of patent applications in the United States Patent Office, a similar duty does not exist in Canada.” (Janssen-Ortho at para. 201)

After reviewing Shore J.’s dictum, Hughes J., in Mycogen Plant Science, Inc. v. Bayer Bioscience N.V., 2009 FC 1013, reluctantly conceded that the law as to the duty of candour is currently in a “state of flux and is not so certain.” (at para. 15)

Shortly after Hughes J.’s concession, Mactavish J. delivered a strong judgment in Lundbeck Canada Inc. v. Ratiopharm Inc., 2009 FC 1102, wherein she sided with Hughes J. in G.D. Searle and interpreted s. 73(1)(a) to mean that “it is clear that … there is a duty of candour on the part of applicants in the prosecution of a patent application in Canada.” (Lundbeck at para. 319) In this case, in response to the examiner’s requisitions the patent agents replied by citing various pieces of prior art that taught away from the invention. They had, however, omitted one relevant article that taught otherwise and lent credence to an argument of obviousness. Mactavish J. found that the applicants had failed to reply in good faith to the examiner’s requisition.

The patent agents had written to the examiner that “in light of the prior art available at the time of filing”, it would have been “counter-intuitive and definitely improbable” that a person skilled in the art would have been prompted to undertake the combination used to achieve the claimed composition.  They insisted that “the prior art clearly teaches away from the combination” and that “the teachings of the prior art as a whole” would not have prompted the skilled person “to elaborate the instant composition”, with the result that the invention claimed was not obvious. (Lundbeck at paras. 336 and 337) Mactavish J. was disturbed by the patent agents’ omission and clearly willful mislead of the examiner: the strong language of the patent agents “was not a fair representation of the teachings of the prior art.” (Lundbeck at para. 345)

In the recent infringement case of Weatherford Canada Ltd. v. Corlac Inc., 2010 FC 602, Phalen J. seemed to side with Shore J. The Defendant had claimed that the patent was invalid on the basis of abandonment by virtue of failure to deal in good faith with the Patent Office during prosecution of the patent. It had not pleaded s. 73 but relied on it by arguing that s. 73(1)(a) gave it a right to challenge the validity of the Patent on the basis of this subsection as if it were a supplement to s. 53 (material misstatement). Phalen J. corrected the Defendant’s misapprehension: “… there is no right in a third party to invalidate a patent for fraud or lack of good faith during the prosecution of the application. … [I]t would be stretching the meaning of s. 73 to read in a right to strike down a patent after it is issued on the basis of deemed abandonment during its prosecution unless all the constituent elements of s. 73 are met.” (Weatherford at para. 344) Further, “s. 73 … is directed at controlling the prosecution of the patent process. The term ‘abandonment’ itself gives an indication that the provision is not directed to post-issuance validity.” (Weatherford at para. 345) He then reminded the court that “the Federal Court of Appeal in Bourgeault Industries Ltd. v. Flexi-Coil Ltd. (1999), 86 C.P.R. (3d) 221 (F.C.A.) at paragraphs 26-31 has rejected the notion that a patent can be held to be invalid for alleged breach of the duty of candor, which goes beyond compliance with the provisions of the Act.” (Weatherford at para. 349)

Although Justice Phalen has tried to narrow the application of the s. 73 deemed abandonment provision, the issues of whether the duty of good faith extends to one of candour, as in the U.S., and the extent to which it can be used in litigation are still confusing and being hotly debated. Things are indeed, as admitted by Hughes J. in Mycogen, in a state of flux.

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