EDITOR’S NOTE: This document is subject to editorial revision before its reproduction in final form in the Federal Courts Reports.
PATENTS
Infringement
Appeal from Federal Court decision (2022 FC 998) on motion for summary trial dismissing appellants’ action against respondents for patent infringement — Appeal turning on what constitutes “use” of patented invention for purposes of proving infringement of patent under Patent Act, R.S.C., 1985, c. P-4 (Act), s. 42 — Appellants pursuing development of liquefied natural gas (LNG), owning Canadian Patent No. 3027085 (‘085 Patent) — ‘085 Patent relating to apparatus, methods, systems in respect to near-shore or at-shore liquefaction of natural gas — Invention comprising floating modular design, air-cooled liquefaction process, electric-driven compressors — Appellants, 7G (predecessor to respondent ARC Resources) in talks to further appellants’ development of their LNG facilities — Appellants disclosed confidential information to group of natural gas producers (Consortium), including design for proposed LNG facility — Consortium later unilaterally ended discussions with appellants — Consortium hired third party to prepare preliminary Front End Engineering Design (pre-FEED) study for LNG facility — Showed high-level summary of pre-FEED study to potential investors, LNG off-takers (companies that use or resell LNG), large-scale industry contractors, allowed four of these third parties to see pre-FEED study itself — Appellants claimed respondents infringed ‘085 Patent through design, development, marketing to potential investors, LNG off-takers, First Nations, large-scale industry contractors of LNG project that included design for LNG facility that, if built, would comprise essential elements of invention claimed in ‘085 Patent — Respondents brought motion for summary trial pursuant to Federal Courts Rules, SOR/98-106, r. 213 — Federal Court agreed with respondents that summary trial was appropriate to decide matter — Found the allegedly infringing activities not constituting “use” of ‘085 Patent — Decided that, given claimed system not existing in Canada, respondents’ new project not infringing ‘085 Patent, respondents could not have made, constructed or sold claimed system — Also found that respondents’ promotional efforts not constituting infringement in Canada — Appellants argued that, by interpreting Act, s. 42 as requiring that an invention be built in order to establish infringement through use, Federal Court erred for three reasons: (1) it failed to apply Supreme Court’s purposive interpretation of “use” set out in Monsanto Canada Inc. v. Schmeiser, 2004 SCC 34, [2004] 1 S.C.R. 902 (Monsanto); (2) it paid insufficient attention to statutory context; (3) it failed to consider benefit allegedly derived by respondents from appellants’ invention, a factor identified in Monsanto as indicating infringing use — Whether Federal Court erred in law by requiring that patented invention be built as pre-condition to infringement by “using” under Act, s. 42 — Federal Court not erring in rejecting appellants’ novel, expansive interpretation of “use” under s. 42, finding that respondents did not use invention claimed by ‘085 Patent — In sum, appellants argued that Supreme Court’s treatment of meaning of “use” in Monsanto standing for proposition that s. 42 granting patentee exclusive right, privilege, liberty of using goal, purpose or advantage of invention for commercial benefit — Monsanto saying no such thing — Right to “use” attaches to invention described in patent claims — This is confirmed by terms used by Supreme Court to describe what is “used” under s. 42 — What is “used” under s. 42 is the claimed invention — Supreme Court not equating “object of the patent” with “purpose of the invention” — Question not whether commercial benefit relevant to analysis, but rather whether commercial benefit realized in context of defendant’s commercial activities involving the patented object — Term “patented object” designating “subject-matter of the invention” or “invention” itself as defined in patent claims — Respondents realized no commercial benefit in context of commercial activities involving patented object — To prove infringement, appellants had to show that essential element of claimed invention “utilized with a view to production or advantage” — Federal Court not erring in finding that respondents did not use claimed invention — By arguing that patent protection should extend to invention’s goal, purpose or advantage, appellants sought to prevent competitors from using idea or concept underlying their invention for commercial advantage — Finding different way to accomplish benefit of invention by designing around patent not constituting infringement since protection of patent “lies not in the identification of a desirable result but in teaching one particular means to achieve it” — Interpretive outcome sought by appellants would frustrate, not enforce, patent bargain — Subject matter, time-limited monopoly granted by Act not offering protection sought by appellants — Appeal dismissed.
Steelhead LNG (ASLNG) Ltd. v. ARC Resources Ltd. (A-210-22, 2024 FCA 67, Heckman J.A., public reasons for judgment dated April 11, 2024, 35 pp.)