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Patent Infringement by Sale of Unassembled Parts

Patent Infringement by Sale of Unassembled Parts

assembled wrench by Creative Tools licensed under CC BY 2.0

 

 

In Canada, the case law has defined patent infringement as any act that interferes with the full enjoyment of a patent owner’s exclusive rights of making, using, and vending its patented invention.

 

Where the patented invention is an assembly of well-known parts, Canadian courts have broadly interpreted the scope of the patent owner’s exclusive rights.

 

For example, signing in Canada an agreement to make and sell an allegedly infringing product may amount to infringement in Canada even if the product has not been manufactured at the time of the agreement. In other words, “vending” includes an actual sale, where the property in the goods is transferred from the seller to the buyer, as well as an agreement to sell.

 

In addition, a supplier may not avoid infringement liability by selling unassembled parts of a patented invention, where the only purpose for buying the unassembled parts is to assemble them into the patented invention.

 

Further, “making” a patented invention includes making all of the parts that are later sufficiently assembled to test the fitting of the parts. Thus, a manufacturer cannot avoid infringement liability by separating an infringing product for exporting outside Canada after the testing of the completed assembly have occurred in Canada.

 

With respect to “use”, Canadian courts have broadly held that infringement through “use” applies to patented products and processes, and may also extend to their output where the patented invention plays an important role in producing the output.

 

“It is no bar to a finding of infringement that the patented object or process is a part of or composes a broader unpatented structure or process, provided the patented invention is significant or important to the defendant’s activities that involve the unpatented structure.”

 

What is not always clear from case law, however, is whether making and exporting unpatented devices for practising abroad a Canadian patented method would constitute infringement in Canada.

 

In such context, it may be necessary to determine whether a physical device or apparatus can be a “part” of a claimed method, which generally comprises steps for performing the method and not the physical devices used in performing the method. It may also call for an analysis of whether there is a “making” of the claimed method by supplying devices for performing the method, and whether a sale of those devices is a “vending” of the method.

 

 

The Many Faces of Intellectual Property Protection

Artistic Design by Kool Cats Photography licensed under CC BY 2.0

Artistic Design by Kool Cats Photography licensed under CC BY 2.0

 

 

A single product may embody more than one types of intellectual property right. In such cases, Canadian laws generally try to compartmentalize these different rights to prevent one type of right protection from being used to extend the scope or term of another type of protection.

 

For example, the well known “look” of LEGO bricks, namely, studs on top of the brick and tubes under it, was considered by the courts as a purely functional feature, and therefore could not be used as trade-mark to prolong the already‑expired patent rights for the LEGO bricks:

 

The doctrine of functionality appears to be a logical principle of trade-marks law.  It reflects the purpose of a trade-mark, which is the protection of the distinctiveness of the product, not of a monopoly on the product … In the law of intellectual property, it prevents abuses of monopoly positions in respect of products and processes.  Once, for example, patents have expired, it discourages attempts to bring them back in another guise.

 

Similarly, copyright protection for a design work is generally limited to its pure artistic aspect. Copyright may become unenforceable if a design is lawfully applied to more than 50 reproductions of an article that has a utilitarian function other than merely serving as a substrate or carrier for the design.

 

However, the Copyright Act also provides that such “more than fifty” limitation in copyright protection does not apply in some circumstances including:

  • Graphics displayed on the face of an article.
  • Trade-mark designs or labels.
  • Textile designs.
  • Architectural designs for building or model of building.
  • Designs employed in real or fictitious merchandising characters, events or places.

 

To maximize intellectual property protection, a design that can be applied to mass production of utilitarian articles should be registered under the Industrial Designs Act.

 

 

To Patent or Not to Patent, That is The Question

#secret by Christian Ditaputratama licensed under CC BY-SA 2.0

#secret by Christian Ditaputratama licensed under CC BY-SA 2.0

 

Certain unpatented intellectual properties, such as trade secrets and proprietary information, can be of utmost importance to a business. For example, it is believed that the lasting success of The Coca-Cola Company is attributable to one of the world’s most guarded trade secrets – the Coca-Cola formula.

 

Trade secret generally means valuable business information that is not known to others and has been maintained in secrecy. In Canada, misappropriation of trade secrets may give rise to remedies in contract, property, tort laws and in equity, if there is unauthorized use of a person’s confidential information to the detriment of that person.

 

Unlike patents, trade secrets are vulnerable to a third party’s discovery. As soon as the secret is discovered through an examination of the product or other honest way, the discoverer has the full right of using it.

 

More fundamentally, because trade secrets and confidential information are rooted in the relationship of confidence, they cannot simply be characterized as “property”:

 

The word property as applied to . . . trade secrets is an unanalyzed expression of certain secondary consequences of the primary fact that the law makes some rudimentary requirements of good faith.  Whether the plaintiffs have any valuable secret or not the defendant knows the facts, whatever they are, through a special confidence that he accepted.  The property may be denied but the confidence cannot be.  Therefore the starting point for the present matter is not property . . . but that the defendant stood in confidential relations with the plaintiffs, or one of them.

 

As a patent requires full and complete disclosure of the invention, a patented product or process cannot be simultaneously protected by trade secrets. However, under some circumstances patents and trade secrets may coexist with respect to a complicated system. For example, one of the components of the system can be patented while the design parameters and process required to make and install the whole system can be maintained as secrets.

 

Trade secrets are strategic choices that are opposite to patents in nature. Therefore, any decision about going one way or the other should be assessed on a case-by-case basis.

 

 

Sufficiency of Patent Disclosure Rests on Bargain Rather Than Guessing

guess-true-patent

Gambling by Alan Cleaver licensed under CC BY 2.0

 

The patent system is based on a “bargain” between the inventor and the public: the inventor receives exclusive rights in his or her new and useful invention for a limited period in exchange for complete disclosure of the invention to the public.

 

Consistent with this policy rationale, the inventor is required to disclose everything that is essential for the invention to function properly. In particular, the patent disclosure must define the nature of the invention, and must describe how the invention is put into operation. A failure to meet the first condition would invalidate the patent application for ambiguity, while a failure to meet the second condition would invalidate it for insufficiency.

 

To meet the sufficiency requirements, the patent disclosure must correctly and fully answer each of the two questions: (1) “What is your invention?” and (2) “How does it work?”

 

Further, the disclosure must enable a person skilled in the field of the invention to produce the invention using only the instructions contained in the disclosure and to make the same successful use of the invention as the inventor did. In essence, insufficiency is a technical attack on the validity of a patent, and would succeed when the skilled person could not put the invention into practice. For example, obscuring the true invention and leaving the skilled reader guessing may amount to insufficient disclosure.

 

Thus, as noted by the Supreme Court of Canada, a key question would be:

 

“Is the public getting what it ought to be getting in exchange for exclusive monopoly rights?”

 

As one would expect, insufficient patent disclosure that fails to uphold the inventor’s end of the bargain will result in a voidable patent.

 

 

Simple ≠ Obvious, Just Ask The Person Skilled In The Art

Simple ≠ Obvious - just ask the person skilled in the art

Simple & Obvious by
Emma Jane Hogbin Westby
licensed under CC BY 2.0

 

A new and useful invention is patentable only if it is not obvious to an unimaginative person of ordinary skill in the field of the invention. Obviousness assessment is based on the “state of the art” and the common general knowledge of the skilled person at the claim date of the invention.

 

At the core of obviousness analysis is the identification of the “inventive concept” of the claimed invention, and whether the difference between the inventive concept and the state of the art would require the skilled person to take any inventive step or conduct arduous searching and testing.

 

The obviousness analysis may involve consideration of a number of factors, including:

  • The interpretation of patent claim at issue.
  • The hypothetical skilled person and the common knowledge of this person.
  • The prior art and the climate or trends in the relevant field.
  • Any motivation at relevant time to combine or modify prior art to arrive at the claimed invention.
  • The time and effort involved in the claimed invention.
  • Whether the claimed invention was obvious to try.
  • Commercial success of the claimed invention.

 

The Canadian Federal Court of Appeal has cautioned against relying on hindsight when challenging a patent for obviousness:

 

Every invention is obvious after it has been made, and to no one more so than an expert in the field. Where the expert has been hired for the purpose of testifying, his infallible hindsight is even more suspect. It is so easy, once the teaching of a patent is known, to say, “I could have done that”; before the assertion can be given any weight, one must have a satisfactory answer to the question, “Why didn’t you?”

 

Even if an invention is directed to a particular combination of well-known parts, the combination itself is not necessarily obvious. In addition, the simplicity and easiness of an invention does not render it obvious. After all, a mere scintilla of invention is sufficient to support the validity of a patent.

 

 

Anticipation: The Precise Destination Has Been Occupied

Anticipation

The angler by Riccardo Palazzani licensed under CC BY 2.0

 

To be patentable, an invention claimed in a Canadian patent application must be new. Being “new” requires that the invention must not have been made available to the public, in Canada or elsewhere, in an enabling manner by a single prior disclosure. Such a prior disclosure, if found, is said to have anticipated the invention, and can be used to invalidate the patent issued for the invention.

 

Generally, anticipation is assessed based on what was known prior to the claim date of the invention. The claim date is either the filing date of the Canadian application, or the filing date of an earlier application disclosing the same invention. As an exception in Canada, any inventor-originated disclosure of the invention occurred within one year before the Canadian filing date cannot be cited against the claimed invention.

 

A prior disclosure can be a patent document, a publication, a known product, a communication of information, or the inventor’s prior public use or sale of the invention. It is worth noting that a third party’s Canadian patent application having an earlier claim date than the claimed invention may be citable against the claimed invention for anticipation, regardless of the publication date of the third party application.

 

A disclosure would be considered as made to the public if at least one member of the public had an opportunity to access the information that is the invention without any restriction to the use of the disclosed information.

 

To establish anticipation, a single prior disclosure must include all essential elements of the claimed invention, and must provide sufficient information so that a person skilled in the field of the invention can perform the invention without undue effort.

 

Anticipation can be difficult to establish. In the words approved by the Supreme Court of Canada:

 

A signpost, however clear, upon the road to the patentee’s invention will not suffice.  The prior inventor must be clearly shown to have planted his flag at the precise destination before the patentee.

 

To avoid losing patent rights, the most prudent practice for the inventor is to never publicly disclose the details of his or her invention before filing a patent application for the invention.