Supreme Court of Canada Decisions regarding Intellectual Property

It used to be that decades would go by without any Intellectual Property cases being considered by the Supreme Court of Canada (SCC).   The fact that there have been two significant SCC decisions on Intellectual Property within a period of 3 days at the end of June, is indicative of the importance of Intellectual Property in the new economy.

It is difficult to “police” the internet, due to the fact that the internet is worldwide and Court orders are unenforceable outside of the nation that granted them. On June 28, 2017 the SCC decided the Google Inc v. Equustek Solutions Inc. case.  In that case, Equustek (E) obtained an interim injunction prohibiting an infringer, D, from selling infringing products. D disappeared and, in a blatant breach of the injunction, continued sales over the internet.  A lower Court ordered that Google de-index the website of D from the search results on Google.  Google immediately complied, de-indexing the website of D from the Canadian search results available to Canadians through the Canadian default website, google.ca.   However, D continued its infringing activities and the website of D continued to be available on Google, except for google.ca.  E sought a Court order directing Google to de-index D’s websites from ALL Google search results worldwide and not just the Canadian search results.  Google resisted on the basis that the Canadian Court Order should not be given effect outside of Canada. The matter was appealed first to the British Columbia Court of Appeal and then to the SCC.

The SCC upheld the lower court order that required Google to de-index D’s website from search results worldwide, stating as follows:
“Where it is necessary to ensure the injunction’s effectiveness, a court can grant an injunction enjoining conduct anywhere in the world. The problem in this case is occurring online and globally. The Internet has no borders — its natural habitat is global. The only way to ensure that the interlocutory injunction attained its objective was to have it apply where Google operates — globally. If the injunction were restricted to Canada alone or to google.ca, the remedy would be deprived of its intended ability to prevent irreparable harm, since purchasers outside Canada could easily continue purchasing from D’s websites, and Canadian purchasers could find D’s websites even if those websites were de‑indexed on google.ca.”

“Google’s argument that a global injunction violates international comity because it is possible that the order could not have been obtained in a foreign jurisdiction, or that to comply with it would result in Google violating the laws of that jurisdiction, is theoretical. If Google has evidence that complying with such an injunction would require it to violate the laws of another jurisdiction, including interfering with freedom of expression, it is always free to apply to the British Columbia courts to vary the interlocutory order accordingly.”

A number of patents have been found to be “invalid” by lower Courts based on the so-called “Promise Doctrine”.   The Promise Doctrine created a higher threshold for utility based on the “promises” in the patent. Under the Promise Doctrine, where the specification of a patent does not promise a specific result, a “mere scintilla” of utility is sufficient; but where the specification sets out an explicit “promise,” utility will be measured against that promise. On June 30, 2017 the SCC decided the AstraZeneca Canada v. Apotex case.  A lower Court held that the AstraZeneca patent was invalid for lack of utility under the Promise Doctrine, as it promised more than it could provide. The matter was appealed to the Federal Court of Appeal and then to the SCC. AstraZeneca argued its patent was improperly invalidated on the basis of the Promise Doctrine.

In the result, the SCC found the Promise Doctrine to be unsound and characterized it as an interpretation of the utility requirement that is incongruent with both the words and the scheme of the Patent Act. The SCC held that the Promise Doctrine is excessively onerous in two ways: (1) it determines the standard of utility that is required of a patent by reference to the promises expressed in the patent; and (2) where there are multiple expressed promises of utility, it requires that all be fulfilled for a patent to be valid.  To determine whether a patent discloses an invention with sufficient utility, courts must first identify the subject matter of the invention. Second, courts must then ask whether that subject matter is useful, that is, whether it is capable of a practical purpose. The Act does not prescribe the degree of usefulness required, or that every potential use be realized. Therefore, a single use related to the nature of the subject matter is sufficient, and that utility must be established by either demonstration or sound prediction as of the filing date.

These decisions by the SCC are most welcome by the patent profession.  A patent holder no longer has to be concerned about an attack on the validity of the patent based upon the Promise Doctrine.  Should an infringer ignore a Court injunction obtained by the patent holder, steps can be taken to have companies that control search engines, such as Google, de-index the infringer’s website so that they no longer appear in the search results.