Supreme Court decisions shift Canadian intellectual property law landscape

At a time of year when many of our minds drift to tranquil lakes, cold drinks, lazy afternoons and long, quiet evenings, the Supreme Court of Canada has been busy issuing several important decisions. These are sure to have a substantial impact on Canada’s legal landscape as it relates to intellectual property rights and, as a result, the Canadian economy as a whole.

Specifically, the SCC recently released two decisions in AstraZeneca Canada Inc. v. Apotex Inc. and Google Inc. v. Equustek Solutions Inc. that are sure to be widely discussed as reverberations are felt in the near future.

The end of the Promise Doctrine

In AstraZeneca, the SCC resoundingly rejected a uniquely Canadian legal principle known as the “Promise Doctrine.” This case was closely watched across the academic, private and public sectors, with third parties making submissions to the court to assist the SCC in rendering its decision.

The Promise Doctrine effectively required that a patent deliver on the promises made in the patent disclosure, particularly about its utility. In simple terms,  the three requirements for obtaining a patent are that the proposed invention be novel, inventive and useful.

Largely developed in the context of pharmaceutical patent litigation, this approach resulted in Canadian patents being rendered invalid for not delivering on each and every one of their stated promises. This created an air of uncertainty in the world of Canadian patent law, and has trickled down to technologies outside of the pharmaceutical space.

As such, Canadian applicants were often terrified of making any laudatory statement in their patent applications that could possibly be interpreted as giving rise to a promise to be kept. This resulted in patent language that sometimes came off as non-committal or unclear.

While the doctrine was intended to prevent patentees from aggressively overstating the possible scope of its patent rights, it resulted in a system that effectively held patentees to two different standards depending on the language used.

On the one hand, if no promise was explicitly made, the invention protected by the patent needed to possess a mere threshold of utility – a historically low standard to meet.

On the other hand, if multiple promises were identified by a court, each and every one of those promises would need to be fulfilled in order to give rise to sufficient usefulness. This approach encourages patentees to keep their disclosures as limited as possible in order to avoid inadvertently making unrealistic promises.

This unintended consequence is in direct contrast to the historic policy of the patent system, which exchanges a limited-term, government-granted monopoly for a full and frank public disclosure of the inventor’s technological achievements. It is a system meant to protect openness, not discourage it.

In dispensing with the Promise Doctrine the SCC has potentially introduced the new requirement that a patent has “a single use related to the nature of the subject-matter.” Observers are sure to watch court decisions closely over the next few years to determine how exactly the Canadian courts will interpret this requirement.

A new precedent in online intellectual property

In Google, the SCC made the bold (and controversial) decision that Google was required to remove web links (known as “de-indexing”) displaying a Canadian company’s proprietary products from its international Internet search results, rather than simply its Canadian search results at Google.ca.

Once again, a large number of third-party interveners participated in this hearing to assist the SCC with this relatively unexplored issue.

The Canadian company Equustek struggled to stop an alleged intellectual property rights infringer from displaying its registered Canadian trademark on several websites, despite obtaining court orders that prevented the alleged infringer from selling these products.

As such, Equustek struggled to police its rights over the Internet and so turned to the court system in an attempt to force Google to assist with its enforcement efforts by de-indexing the infringing websites from its international search results. Google initially refused to do so.

In this case, it is important to note that Google was not an original party to the underlying action. This means the SCC upheld a worldwide provisional injunction against a third party, which is an unprecedented decision. Going forward, this could affect how intellectual property rights holders protect their interests online.

Although it is too early to predict how these changes will play out both in boardrooms and in courtrooms around the country, it is certainly safe to say that the SCC has had a busy summer shaping the future direction of intellectual property policy in Canada.

Adam Tracey is an associate lawyer at Nelligan O’Brien Payne LLP and a member of the firm’s Intellectual Property Group.

Visit www.nelligan.ca for more information.