The Backstory
Canada is home to a robust and innovative $60 billion dollar chemical industry, the second largest in the country by exports. It is also home to a patent system that offers unique advantages for chemical-based inventions. As part of our celebration of the 100th Anniversary of Marks & Clerk’s Canadian offices, we are using the occasion to highlight some of the benefits of pursuing patent protection for chemical inventions in Canada, while addressing some unique issues related to Canadian chemical patent practice.
The chemical industry is undergoing a period of rapid transformation to be prepared to produce the products of tomorrow while simultaneously improving on sustainability and reducing environmental impacts. Reliable patent protection is an essential piece of this transformation and several recent judicial decisions, as well as some long-established Canadian patent policies, have made Canada a very appealing jurisdiction to consider when seeking protection for chemical-based inventions.
Canada is home to 38 million people and is a signatory to 14 free trade agreements that together cover over 60% of the world’s GDP. It also shares the world’s longest open border and a highly integrated economy with the world’s largest market, the United States, whereby components regularly cross between the two countries during manufacturing and assembly. Inventors seeking protection in the U.S., or any of Canada’s other trading partners, should always consider if supply chains or manufacturing lines may result in intermediates or product components crossing the Canadian border.
Cost-Effective Patent Prosecution
The Canadian patent system is very amenable to the expansive claim sets that are often required to sufficiently protect chemical inventions. Unlike other jurisdictions, such as the U.S. or Europe, prosecution costs can be reduced in Canada as there are no government fees for excess claims or multiple dependencies.
Additionally, Canada’s approach to assessing unity of invention is also comparatively favourable to inventors, and all aspects of an invention can be claimed in a single application if the claims are so linked as to form a single, general inventive concept. For example, claims to compounds, compositions, processes for preparing the compounds, commercial packages comprising them and their uses are often all permitted in the same claim set.
The Canadian system also offers deferred prosecution which allows time to coordinate global patent strategies, and for amendments to be made at any time up until grant, providing exceptional flexibility and value to applicants.
Some Points on Subject Matter Allowability
New uses for known compounds: Considerable effort may be required to discover a new application for a known compound, and such discoveries can be rewarded with patent protection in Canada.
A 1982 Supreme Court of Canada decision found that the discovery of a new use for known compounds in regulating plant growth constituted a new and useful art and is therefore patentable subject matter (Shell Oil v. Commissioner of Patents 1982 SCC 536). This decision was applied by the court again 20 years later (Apotex v Wellcome Foundation, 2002 SCC 77) and continues to be relied upon in Canada.
Medicinal and Pharmaceutical Inventions: Inventors should note that methods of medical treatment are not patentable in Canada. As such, if a newly discovered use relates to a medical treatment, claims to “A method of treating disease X with compound Y” may be rejected. However, Swiss- and German-use format claims are permitted. In addition, claims to “kits” and “commercial packages” with instructions for use are accepted and can offer valuable protection relating to second medical uses (Update on Kit Claims).
For pharmaceuticals, Canada allows for data exclusivity and patent term extension in the form of Certificates for Supplemental Protection (CSP’s), which can be very useful in generating further value for a chemical patent.
Selection patents are allowable in Canada. Canada has followed the principles set for in IG Farbenindustrie in the 1930’s and developed its own body of case law in this area. In fact, the validity of selection patents has been affirmed by the Supreme Court of Canada (Apotex Inc. v. Sanofi-Synthelabo Canada Inc. 2008 SCC 61). A patent for a selection of compounds from a larger class claimed in a prior genus patent may be allowed if:
- the selection is based on some substantial advantage or disadvantage to be avoided;
- the whole of the selection possesses the advantage; and
- the advantage must be a quality of a special character peculiar to the whole selection.
Diagnostic methods: In November 2020, the Canadian Patent Office released new practice guidelines on assessing the patentability of diagnostic methods that allow the patenting of claims that would have previously been rejected (Diagnostics Methods Receive Better Prognosis in Canada).
A Mere Scintilla of Utility
In Canada, a single use that demonstrates a mere “scintilla” of utility related to the nature of the invention will suffice. Prior to 2017, numerous patents, primarily in the pharmaceutical space, were invalidated because courts were applying a higher utility requirement when statements in the specification set out certain utilities or “promises” that were found to not be demonstrated or soundly predicted at filing. In 2017, the Supreme Court of Canada abolished this so-called “Promise Doctrine”, concluding that the practice incorrectly conflates the disclosure requirement with the utility requirement (AstraZenca Canada v Apotex 2017 SCC 36).
There is no absolute requirement in Canada that claimed subject matter be disclosed in working examples to support the utility of the claim. The utility of properly claimed but untested subject matter may be based on a “sound prediction” stemming from data possessed by the inventors at the time of filing, so long as a line of reasoning for the prediction could be established based on that data.
Remedies for Infringement are Substantial
The largest monetary award ever received for patent infringement in Canada recently resulted in Dow Chemical being awarded over $644 million in remedies (Dow Chemical Company v. Nova Chemicals Corporation, 2017 FC 637; upheld in Nova Chemicals Corporation v. Dow Chemicals Company 2020 FCA 141). Dow’s patent, which related to polyethylene polymer compositions used in the production of packaging material, was found to be valid and infringed. This entitled the patentee to seek a remedy of either: i) an accounting of profits or ii) compensatory damages.
Dow elected for an accounting of profits which meant that the award would include reasonable compensation for activities that occurred prior to the publication date of the patent, remedies for profits obtained following grant, and an accounting of certain “springboard profits” that resulted from Nova’s accelerated opportunity to capture market share. The ability to opt for an accounting of profits protects the “patent bargain” in cases where damages amount to less than the potential profits that can be made by infringement, removing economic incentives to infringe, and providing greater protection to patentees in Canada.
Third parties cannot escape liability by housing production overseas prior to import into Canada if a process is patented but the product is not, a principle recently shown to extend to Swiss-style use claims (Hospira Healthcare Corporation v. Kennedy Trust for Rheumatology Research 2020 FCA 30, varying 2018 FC 259).
The Takeaway
Canada offers several advantages to those seeking patent protection for chemical inventions. These include an appealing market that is highly entangled with the US, liberty to draft expansive claim sets, and reduced fees. Additionally, recent decisions have reduced utility requirements and demonstrated the willingness of the Canadian court system to award substantial remedies in cases of infringement. This article discusses a small subset of issues to consider when seeking a chemical patent in Canada, but there are many other important considerations not addressed here which are best discussed with your Canadian Agent.
