Digests

671905 Alberta Inc. v. Q'Max Solutions Inc.

T-1227-96

2001 FCT 888, Gibson J.

15/8/01

62 pp.

Action for declaration of validity of 884 patent, permanent injunction restraining defendant from making water-in-oil emulsion drilling mud, reasonable compensation--Numbered company plaintiff assignee from J.K.F. Investments Ltd. and Hour Holdings Ltd. of 884 patent--J.K.F. Investments Ltd. and Hour Holdings Ltd. in turn assignees of named inventors in 884 patent, James K. Fleming and Harold C. Fleming--James K. Fleming, Harold C. Fleming owners of Fleming Oil Field Services Ltd., and division of that company Reef Mud--From date of issuance of patent until May 28, 1998 Fleming Oil Field Services Ltd. had exclusive license to make, use, sell invention described, claimed in 884 patent--On May 28, 1998 numbered company plaintiff assigned 884 patent to Fleming Oil Field Services Ltd.--Effective July 1, 1998 Fleming Oil Field Services Ltd. amalgamated with M-1 Drilling Fluids Canada Inc.--884 patent relating to oil-based mud--Large volume of cuttings produced by drilling, brought to surface in drilling mud--Cuttings coated in oil, and significant amount of salt comprised in drilling mud, neither of which environmentally friendly--Cuttings disposed of by "land farming", i.e. removing top soil from area surrounding drilling operation, spreading cuttings, replacing top soil--Land farming raising environmental concerns--Fleming Oil Field Services Ltd., through Reef Mud formulated, supplied drilling muds to industry--Began using "fertilizer" grade calcium nitrate (ACND), capable of contributing to biodegradation of oil coating cuttings while also contributing to re-vegetation following land farming--Harold Fleming testified instructed Rick Smith, employee of Reef Mud Division, to conduct tests to determine whether ACND viable alternative salt in formulation of invert emulsion drilling muds--Smith conducted laboratory tests in 1989, and field tests in 1992--Application for 884 patent followed in summer of 1993, after Smith left Fleming Oil Field Services Ltd.--Product, "Q'Max Mud" or "Envirovert", marketed to, among others Shell Canada Limited--Defendant admitting manufactured invert mud using ACND--Conflicting testimony regarding development of Q'Max Mud--Smith's testimony that he took initiative in developing more environmentally friendly invert emulsion drilling mud preferred--(1) Construction of patent--Patent specification addressed to person skilled in relevant art--Against knowledge, perceptions of ordinary workman skilled in art, Court required to look at whole of disclosure, claims to ascertain nature of invention, being neither benevolent nor harsh, but rather seeking construction reasonable and fair to both patentee and public--(2) Validity of 884 patent--Patent Act, s. 43(2) imposing presumption of validity of patent--Onus on defendant to prove, on balance of probabilities, patent invalid--Defendants introduced evidence on five issues--(i) Anticipation--S. 28.2(1) requiring subject-matter not have been available to public more than one year before filing date--Direction in prior publication must be so clear that skilled person reading, following it would in every case, and without possibility of error be led to claimed invention--Prior art reviewed--Not enough that many publications in nature of prior art relevant to subject-matter of 884 patent known to, or readily accessible to, ordinary workman skilled in art more than one year before August 4, 1993--As noted in Beloit Canada Ltd. et al. v. Valmet Oy (1986), 8 C.P.R. (3d) 289 (F.C.A.), mythical person skilled in art cannot be required to "mosaic" prior art; not enough to pick bits and pieces from variety of prior publications and to meld them together so as to come up with claimed invention; anticipation must be found in specific patent--Defendant not meeting burden of establishing allegation 884 patent void for anticipation or lack of novelty by reason of state of prior art at relevant time--(ii) Obviousness--Test for obviousness set out in s. 28.3--Question to be answered whether invention disclosed by 884 patent was, in light of prior art, "plain as day" or "crystal clear" to person skilled in art at date of invention--Cannot conclude, based on totality of evidence, defendant discharged burden to establish invention disclosed by 884 patent obvious on claim date to person skilled in relevant art such that person would have come "directly and without difficulty" to solution taught by 884 patent--(iii) Defendant not making out case for invalidity of claims on basis of speculative claiming or lack of utility--(iv) Insufficiency--What constitutes essential element of patent must be determined in light of common general knowledge in field at date of publication of patent application, notably date at which public advised of existence of application and of possible consequences may have on activities--Neither 884 patent nor any of its claims void by reason of insufficiency of disclosure--(v) Material misrepresentation in petition--S. 27(2) providing, among other things, application for patent must be filed by inventor or inventor's legal representative and application must contain petition--Ss. 27(1), 49 dealing with question of to whom patent may be granted--S. 53(1) providing patent void if any material allegation in petition untrue--Material allegation of petition allegation applicant(s) made invention--James K. Fleming, Harold C. Fleming not employer of Rick Smith at relevant time--Smith employee of Fleming Oil Field Services Ltd.--By virtue of s. 53(1), 884 patent void by reason of untrue material allegation in petition, i.e. James K. Fleming, Harold C. Fleming "made" invention of 884 patent--884 patent void ab initio by reason only of material misrepresentation in petition--(3) Right of plaintiffs to sue on 884 patent--Patent issued to J.K.F. Investments Ltd. and Hour Holdings Ltd.--Neither acquired any interest in patent from Rick Smith, true inventor, or from his employer, Fleming Oil Field Services Ltd.--J.K.F. Investments Ltd. and Hour Holdings Ltd. never validly acquired interest in 884 patent and therefore neither ever person for time being entitled to benefit of 884 patent--Neither ever "patentee"--Plaintiffs not persons claiming under patentee--Line of title from original patentee to plaintiffs in this action not established--(4) Infringement--If 884 patent determined to be valid, and plaintiffs entitled to pursue remedies under s. 55, evidence disclosing literal infringement of claims of 884 patent, other than claim 15--(5) Relief--Action dismissed; 884 patent declared void ab initio--Patent Act, R.S.C., 1985, c. P-4, ss. 27(1) (as am. by S.C. 1993, c. 15, s. 31), (2) (as am. idem), 28.2 (as enacted by S.C. 1993, c. 15, s. 33), 28.3 (as enacted idem), 43(2) (as am. idem, s. 42), 53(1), 55 (as am. idem, s. 48).