CHRISTOPHER GULY
Trade-mark owners seeking
relief in infringement cases will
be pleased to know they may
not always have to proceed with
an expensive, time-consuming
court action.
In BBM Canada v. Research in
Motion (RIM) Ltd., [2011] F.C.J.
No. 656, the Federal Court of
Appeal allowed the appellant to
seek damages, declaratory and
injunctive relief from the defend-
ant for infringement, depreciation
of goodwill and passing off of the
BBM trade-mark under the Trade-
marks Act by way of application.
The May 5 ruling set aside a Fed-
eral Court decision last October
that ordered the case to proceed as
an action, since s. 55 of the Trade-
marks Act gives the court jurisdic-
tion “to entertain any action or
proceeding” for the enforcement
of any right under the legislation.
That section, as Justice Roger
Hughes pointed out, “is applicable
when proceedings are instituted
that allege infringement and
unfair competition.”
However, in reasons delivered
on behalf of the federal appellate
court, Justice Eleanor Dawson
wrote that s. 55 “contemplates that
proceedings may be commenced in
the Federal Court both by action or
application.” Yet she, like Hughes,
noted that unlike the Copyright
Act, the Trade-marks Act gives no
express permission to bring an
infringement proceeding by way of
application. “How is such silence to
be interpreted?” Dawson wrote.
“If a party is allowed
to proceed by way
of application versus
action, it could
avoid the expense
and time involved
with discovery.
bid to proceed by way of application because there is “no positive
obligation” on any of the parties
to identify and disclose all relevant documents, and no oral or
documentary discovery is
involved in such a procedure, says
Trent Horne, a partner with Bennett Jones LLP in Toronto who
represents RIM.
“You can cross-examine a wit-
ness on any affidavit presented,
but you don’t have the same
opportunity to get information
out of a cross-examination as you
do out of an examination for dis-
covery,” he explains, noting that in
a cross-examination, for example,
answers provided are “evidence,
not admissions.”
Yet Wells believes that unless
some insurmountable problem
occurs in the course of a proceed-
ing that indicates it’s “too compli-
cated for an easy procedure,” an
application should be allowed.
US court redefines inequitable conduct in patent prosecution
Inequitable conduct as a
ground for unenforceability of a
patent has gone viral in the U.S.
in recent years.
The Court of Appeals for the
Federal Circuit (CAFC) recently
provided some relief for patentees by raising the standard for
materiality required to establish
this defence in Therasense, Inc.
v. Becton, Dickinson and Co.
(May 25, 2011, 2008-1511, 1512,
1513, 1514, 1595).
Originally, the defence of
inequitable conduct in patent
infringement actions had evolved
from a set of U.S. Supreme Court
decisions applying the doctrine of
unclean hands in the first half of
the 20th century. The patentees
had been involved in particularly
egregious misconduct while prosecuting their patent application
before the U.S. Patent and Trade-mark Office (PTO) by deliberately
manufacturing or overtly suppressing evidence relating to patentability. The consequence of the patentee’s conduct was dismissal of the
case for infringement.
Since then, the available
grounds for inequitable conduct
came to include mere non-disclosure of “material” information to
the PTO (based on Rule 56, 37
C.F.R. 1.56, which expressly
imposes a duty on patent appli-
JENNA
WILSON
cants to disclose information such
as prior art to the PTO material to
patentability) and the remedy for
inequitable conduct was augmented from mere dismissal of the
complaint to unenforceability of
the patent-in-suit. The Federal Circuit also created a judicial test for
inequitable conduct, requiring a
finding of a specific intent to
deceive the PTO through misrepresentation or omission of information and a finding that the deception was material.
Over the years, the required
threshold of intent and materiality
was reduced to encourage full disclosure of relevant information by
applicants to the PTO, and in
some cases a “sliding scale” was
applied such that the threshold for
showing intent was reduced where
there was a strong showing of
materiality, and vice versa. The
courts also looked to Rule
56— which itself was revised over
time to broaden the scope of
“material” information required to
be disclosed— for guidance in setting the threshold for materiality.
Rule 56, however, currently sets
a standard for materiality that
only takes into account the prima
facie impact of the information
and ignores any evidence that
might be submitted in rebuttal.
The end result of the lowering
standards and the uncertainty of
the sliding scale was an increased
burden on patent applicants, who
took to submitting any documents
even remotely relevant to an application to the PTO, even if not
material to patentability; on the
PTO, now forced to deal with an
avalanche of applicant-submitted
documents of marginal relevance;
and on patent litigants, as defendants took any opportunity to allege
prosecutorial misconduct.
In this context, Abbott Diabetes
Care, Inc. (previously known as
Therasense) found itself defending
its U.S. patent for disposable blood
glucose test strips (the ‘551 patent)
against an inequitable conduct
attack as a result of a failure to disclose to the P TO submissions made
about the prior art in the European
Patent Office. These submissions
contradicted a position taken
before the PTO.
The district court found that
claims of the ‘551 patent were
invalid due to obviousness in view
of the prior art patent and another
reference and also held that the ‘551
patent was unenforceable for
inequitable conduct because of the
failure to disclose the EPO submissions. In making this ruling, the
court applied a lower “should have
known” negligence standard for
intent and applied the Rule 56
materiality standard. After the
decision was upheld by a panel of
the CAFC, Abbott sought, and
received, a hearing en banc before
the CAFC. A majority of the full
court reversed the finding of
inequitable conduct, vacating the
district court’s findings of intent
and materiality and remanded the
case for redetermination.
The majority sought to redirect
the inequitable conduct defence to
try to reduce the rash of inequitable
conduct proceedings and the
resultant strain on litigant, court
and PTO resources. It confirmed
that the appropriate standard for
intent was in fact that of clear evi-
dence that the patentee acted with
specific intent to deceive the
PTO—the patentee must have
known of a prior art reference and
that it was material and deliber-
ately chose to withhold it from the
P TO. Further, while intent could be
inferred from circumstantial and
indirect evidence, the inference
must be the single most reasonable
inference available to be drawn.
