Thank you for your readership over the last year and welcome to what is sure to be an exciting 2017!  In this year’s first issue of the E-TIPS® Newsletter, we will recap our most noteworthy reports from 2016 covering developments in IP and IT law, under the following categories: (1) “Supreme Court of Canada Matters”, (2) “Patents”, (3) “Trademarks/Copyright”, (4) “Pharmaceutical Matters”, (5) “IT/Privacy”, (6) “Legislative, Treaty and Policy Developments” and (7) “Foreign Developments”.

This issue of E-TIPS® Newsletter’s “2016: Year in Review” is brought to you by Junyi Chen and Michael House. Remember, all of our past coverage – over 14 years’ worth – is accessible in our archive.


1.  Supreme Court of Canada Matters

SCC Heard Google Appeal from Worldwide Injunction

In February 2016, the Supreme Court of Canada (SCC) granted Google Inc leave to appeal from a decision of the British Columbia Court of Appeal (BCCA) that upheld an interim injunction restraining Google - a non-party in the underlying action - from indexing the defendants’ websites on Google’s global search engine, google.com (SCC Case: 36602). The BCCA decision garnered international attention for its finding that a foreign company can be subject to a British Columbia court order with global effect based on interactions between that foreign company and British Columbians online.  The SCC heard the appeal on December 6, 2016. For our full report, click here.

SCC Heard Arguments in Deborah Louise Douez v Facebook Inc

On November 4, 2016, the SCC heard arguments and reserved judgment in the appeal from a decision of the BCCA, which found Facebook Inc’s (Facebook’s) forum selection clause to be enforceable and granted a stay of proceedings (SCC Case: 36616).  The Applicant brought a class action against Facebook Inc, alleging it used her name and portrait in an advertisement product known as “Sponsored Stories” without her consent, contrary to the statutory tort created by British Columbia’s Privacy Act.  Facebook argued that the court should decline jurisdiction because California was the designated choice of jurisdiction according to its forum selection clause. For our full report on the decision, please click here.

SCC Heard AstraZeneca’s NEXIUM Appeal on the Promised Utility Doctrine

On November 8, 2016, the SCC heard oral arguments and reserved its decision in AstraZeneca Canada Inc v Apotex Inc (SCC Case: 36654, esomeprazole – NEXIUM®, the Federal Court of Appeal (FCA) decision previously reported in E-TIPS Newsletter here).  Key issues raised at the hearing included whether a promised utility doctrine exists and, if yes, how to construe the promised utility. A webcast of the hearing can be accessed here.  For our full report, click here.

SCC Clarified “Order Made by a Court” Exception and Conditions for Implied Consent Under PIPEDA

On November 17, 2016 the SCC released a decision clarifying the application of certain exceptions to the general prohibition of disclosure of personal information without the knowledge and consent of the affected individual under the Personal Information Protection and Electronic Documents Act (PIPEDA). The Royal Bank of Canada (RBC) was a judgment creditor of the defendants in the case and was seeking a mortgage discharge statement in order to sell the mortgaged property. RBC brought a motion to compel the Bank of Nova Scotia, the mortgagee, to produce the discharge statement. Overturning a majority ruling of the Ontario Court of Appeal, the SCC held that the order sought by RBC constituted an “order made by a court” under subsection 7(3)(c) of PIPEDA and ordered production of the discharge statement. For our full report on this decision, click here.


2.  Patents

Disclosure Requirement for Sound Prediction of Compound Patent Confirmed

In January 2016, the Federal Court (FC) dismissed a prohibition application brought by Eli Lilly Canada Inc (Lilly) against Hospira Healthcare Corporation (Hospira) regarding Hospira’s proposed generic versions of Lilly’s cancer drug ALIMTA® (pemetrexed disodium) and Lilly’s genus compound patent in Eli Lilly Canada v Hospira Healthcare, 2016 FC 47.  The key issue was whether the utility promised in the patent for the untested but claimed compounds would have been soundly predicted from the results for the tested compounds.  The FC was not persuaded by the finding in AstraZeneca v Apotex, 2014 FC 638 that the disclosure requirement for sound prediction was limited to new use patents.  It concluded that the utility of the untested compounds was not soundly predicted, noting that “small structural differences to classical antifolates can result in dramatic differences in biological activity”. For our full report, click here.

No File Wrapper Estoppel on Claim Construction in Canada Questioned

There is no equivalent in Canada of US file wrapper estoppel for claim construction.  However, in Pollard Banknote Limited v Scientific Games Products (Canada) ULC,  2016 FC 883, the FC questioned whether it was time to revisit this finding, as file wrappers, like claims, are publicly available and so give public notice of the contents of the  prosecution  history .  For our full report, click here.

Federal Court of Appeal Commented on Standard of Review for Claim Construction

In September 2016, in Nova Chemicals Corporation v The Dow Chemical Company, 2016 FCA 216, affirming 2014 FC 844, the FCA emphasized that, regarding claim construction, a trial judge was entitled to deference with respect to appreciation of the evidence, “particularly the expert evidence that affects the construction of a patent”.  The FCA held that, although the construction of the patent was to be reviewed on the standard of correctness, the trial judge was entitled to “some leeway” as trial judges are “often in a much better position than appellate judges to understand the intricacies of the art underlying the invention disclosed in a patent”.  For our full report, please click here.

Different Claims Can Have Different Utility for the Same Compound

In September 15, 2016, the FCA affirmed the FC’s construction of the promise made in Novartis’ deferasirox EXJADE® patent in Teva Canada Limited v Novartis Pharmaceuticals Canada Inc, 2016 FCA 230. The FCA determined a single issue: “did the Federal Court err in its construction of the promise of the relevant patent?” The FCA affirmed that “at law” different claims can have different utility for the same compound. For example, the promise of the compound claims may be different from that of the use claims. For our full report, please click here.

Obviousness-Type Gillette Defence Now Available in Canada

In September 2016, the FC (September 16, 2016), the FC considered the Gillette defence based on obviousness in Arctic Cat Inc v Bombardier Recreational Products Inc, 2016 FC 1047. This was the first Canadian case in which the court had confirmed that an obviousness-type Gillette defence is available even if the claims are not anticipated.  For our full report, please click here.

Summary Patent Infringement Trial Possible in Canada

In October 2016, the FC dismissed a patent infringement action brought by Cascade Corporation against Kinshofer Gmbh in Cascade Corporation v Kinshofer GmbH, 2016 FC 1117. This case illustrates that, with a suitable set of facts, for example, no allegation of patent invalidity and damages quantification having been bifurcated, it is possible to summarily adjudicate a patent infringement claim even with contentious claim construction issues.  For our full report, please click here.

Date for Assessing Obviousness-Type Double Patenting Remains Unsettled in Canada

In November 2016, the FCA maintained that the relevant date for assessing obviousness-type double patenting is an open question and commented that  “may be new ways to approach” the relevant date issue in Apotex Inc v Eli Lilly Canada Inc, 2016 FCA 267, affirming 2015 FC 875.   Previously, in April 2016, the FCA declined to determine an appropriate date for assessing obviousness-type double patenting, although it rejected the publication date of the later patent as being a relevant date for the analysis in Mylan Pharmaceuticals ULC v Eli Lilly Canada Inc, 2016 FCA 119.  For our full reports on these decisions, click here (the Apotex decision) and here (the Mylan decision).

Non-Statutory Subject Matter Rejections for Software Inventions Remain Difficult to Overcome in Canada

In 2016, computer-implemented inventions continue to face challenges to patent protection in Canada.  We illustrated this point in two recent Patent Appeal Board (PAB) decisions in our E-TIPS® Newsletter here.


3.  Trademarks/Copyright

Federal Court of Appeal Leaves Door Open for Copyright and Trademark Infringement by Metatags

In December 2015 (reported in January 2016), the FCA dismissed the appeal of a decision in which Redtag.ca had unsuccessfully alleged copyright and trademark infringement based on a competitor’s unauthorized use of the metatags contained in the source code of their websites in Red Label Vacations Inc (Redtag.ca) v 411 Travel Buys Limited, 2015 FCA 290. The judgment leaves many questions unanswered regarding the application of copyright and trademark law to the unauthorized use of metatags.  While it remains possible that some metatags may attract copyright protection in Canada, a copyright infringement claim based on unauthorized use of metatags has yet to succeed in a Canadian court.  Likewise, the FCA has left open the possibility that unauthorized use of metatags may constitute trademark infringement. For our full report, please click here.

Copyright in Documents Registered and Deposited in Land Registry System Found to Subsist with the Crown

In May 2016, the Ontario Superior Court of Justice (OSCJ) granted a motion for summary judgment dismissing a class action against Teranet Inc. (Teranet), an organization responsible for managing Ontario’s land registry system in Keatley Surveying v Teranet, 2016 ONSC 1717.  The Court found that copyright subsists in the plans of survey prepared by the land surveyors, and that Teranet made use of surveys in a manner that arguably violated the exclusive rights granted to the surveyors by the Copyright Act. However, the Court found that the provisions of the Ontario Registry Act and Land Titles Act made it clear that when plans of survey are registered or deposited at the land registry office, the province takes ownership of the property in the works (including the right to make copies). Therefore, copyright in the land surveys belonged to the province at the time they were copied and distributed by Teranet, which was determinative of the dispute. For our full report, please click here.


4.  Pharmaceutical Matters

Teva’s Venlafaxine Section 8 Award Set Aside for Improper Reliance on Hearsay Evidence

In May 2016, the FCA overturned a decision of the FC awarding Teva Canada Limited (Teva) Section 8 damages to compensate for the statutory delay triggered by Pfizer Canada Inc.’s (Pfizer) application under the Patented Medicines (Notice of Compliance) Regulations (Regulations) concerning Teva’s venlafaxine hydrochloride products (Pfizer’s EFFEXOR XR® in Pfizer Canada Inc v Teva Canada Limited, 2016 FCA 161; rev’g 2014 FC 248).  The FCA criticized the FC’s reliance on inadmissible hearsay evidence from Teva (then ratiopharm) that it could have supplied its venlafaxine products in the “but-for” world.  Because the FC’s reliance on the hearsay evidence may have affected the outcome of this case, the FCA set aside the decision and remitted the case back for redetermination, excluding the inadmissible hearsay evidence.  For our full report, please click here.

Generic’s Non-Infringement Allegation Justified but Prohibition Order Granted Due to Defective Notice of Allegation

In July 2016, the FC allowed a prohibition application by Bayer Inc (Bayer) against Fresenius Kabi Canada Ltd (Fresenius) concerning Fresenius’ generic moxifloxacin hydrochloride (HCl) injection (Bayer’s AVELOX I.V.®) and Bayer’s patent claiming moxifloxacin HCl monohydrate (the Monohydrate) in Bayer Inc v Fresenius Kabi Canada Ltd, 2016 FC 581. Although it found that Fresenius’ non-infringement allegation was justified, the FC determined that the Fresenius’ Notice of Allegation (NOA) was defective for failing to adequately disclose the factual and legal basis for the non-infringement allegation. Consequently, the FC issued a Prohibition Order against Fresenius. This decision  serves  as  a  reminder  to  generic  manufacturers  that  an  NOA  must contain sufficient factual and legal basis to make the patentee fully aware of the grounds for the generic’s allegations; failure to do so can have grave consequences.  For our full report, please click here.

Minister’s PM(NOC) Decision to be Reviewed on the Standard of Reasonableness

Under the Patented Medicine (Notice of Compliance) Regulations (the Regulations), the Minister of Health (the Minister) determines whether a generic manufacturer’s drug submission makes a comparison to a Canadian reference product (a brand product) and if yes, the generic manufacturer is required to address the patents listed on the Patent Register for the brand product.  In October 2016, the FCA upheld two decisions of the Minister to issue NOCs to generic drug manufacturers without having to address the Patent Register because no comparison had been made in Teva Canada Limited v Pfizer Canada Inc, 2016 FCA 248.  The FCA clarified that the Minister’s decision under the Regulations are to be reviewed on a standard of reasonableness. For our full report, please click here.


5.  IT/Privacy 

Ashley Madison Found to Have Failed to Provide Users with Adequate Security

In August 2016, Canada’s Privacy Commissioner released its report on the security practices of Avid Life Media Inc (ALM, rebranded as Ruby Corp), the Toronto-based parent company of the Ashley Madison dating site. Ashley Madison came under scrutiny last year after a massive data breach exposing personal information of more than 32 million Ashley Madison users worldwide. The Privacy Commissioner found that the company lacked a comprehensive privacy and security framework, despite the fact that Ashley Madison marketed itself as a “100% discreet service” for people seeking to have affairs. For our full report, please click here.

CRTC Released First Written Decision on Canadian Anti-Spam Legislation Reduces Monetary Penalty by More than 90%

On October 26, 2016, Canadian Radio-television and Telecommunications Commission (CRTC) released its first written decision under the act commonly known as the Canadian Anti-Spam Legislation (CASL). The decision involves nine messaging campaigns that took place between July 9 and September 18, 2014, in which Blackstone Learning Corp (Blackstone) sent more than 385,000 unsolicited commercial electronic messages. Although the CRTC found that Blackstone had indeed violated the provisions of CASL relating the commercial electronic messages, it reduced the Administrative Monetary Penalty set out in the relevant Notice of Violation from $640,000 to $50,000.  For our full report, please click here.


6.  Legislative, Treaty and Policy Developments

Updated IP Enforcement Guidelines Released by the Competition Bureau

On March 31, 2016, the Competition Bureau (Bureau) released further updated Intellectual Property Enforcement Guidelines (IPEGs) (Announcement) following an extensive public consultation process held in 2015. The updated IPEGs provide clarification on the Bureau’s approach to conducting investigations of alleged anti-competitive activities that relate to intellectual property. The main revisions include clarification of the Bureau’s position on patent settlements and product switching, both affecting the pharmaceutical industry. The updated IPEGs also address the conduct of patent assertion entities and conduct involving standard essential patent owners.  For our full report, please click here.

Patent and Trademark Agent Privilege Now Recognized

On June 24, 2016, statutory provisions concerning patent and trademark agent privilege came into force in Canada (see section 16.1 of the Patent Act and section 51.13 of the Trade-marks Act). These provisions protect confidential communications between clients and their patent or trademark agents where a communication meets the following conditions:

  1. it is between a registered agent (or individual acting on the agent’s behalf) and his or her client (or individual acting on the client’s behalf);
  2. it is intended to be confidential; and
  3. it is made for the purpose of seeking or giving advice with respect to any matter relating to the protection of an invention or trademark (including geographical indications and official marks).

The statutory privilege also extends to communications between a foreign agent and his or her client provided that (1) they would be privileged in the jurisdiction in which the agent is authorized to practice, and (2) the above three conditions are met.

The privilege provisions apply retroactively as long as the communication remains confidential and is not subject to litigation commenced before that date. For our full report, please click here.

CETA Signed with Implications for IP Rights in Canada

On October 30, 2016, Canada and the European Union (EU) officially signed the Comprehensive Economic and Trade Agreement (CETA).  The next day, the Canadian government tabled Bill C-30 entitled “An Act to implement the Comprehensive Economic and Trade Agreement between Canada and the European Union and its Member States and to provide for certain other measures”, outlining measures implement CETA.  Bill C-30 will impact trademark law on geographical indications and pharmaceutical patent law on patent term restoration and the conduct of litigation in Canada.  For our full report, please click here and here.

New French Language Requirements for Non-French Signage in Quebec

On November 24, 2016, amendments to the Regulation respecting the language of commerce and business (Regulation) under Québec’s Charter of the French Language (Charter) came into force. The amendments require non-French trade-marks appearing on signs or posters outside buildings and structures in Québec to be accompanied by “a sufficient presence of French”, which may be satisfied by a generic term or description of the product or services in French. The amendments apply to new signs or posters or to the replacement of existing signs or posters installed after November 24, 2016. For signs or posters existing as of November 24, 2016, businesses have until November 24, 2019 to comply.  For our full report, please click here.


7.  Foreign Developments

Uncertainty Follows in the Wake of Brexit

On June 23, 2016, the United Kingdom (UK) voted in favour of leaving the EU, in a move colloquially referred to as Brexit. The extent that Brexit will impact existing EU legislation, including intellectual property legislation, will largely depend on the political decisions that will follow. There has not yet been any official guidance on what the future may hold with respect to the legislative and trade issues caused by Brexit.  For our full report, please click here.

EU-US Privacy Shield Adopted by the European Commission and US Department of Commerce

On July 12, 2016, the European Commission reported the formal adoption of the EU-US Privacy Shield Framework (Privacy Shield), which governs the transfer of data between the EU and the US.  As previously reported in E-TIPS® Newsletter, the new privacy framework was announced earlier this year. Privacy Shield is intended to replace the Safe Harbour Privacy Agreement, which was declared to provide inadequate privacy protection by the European Court of Justice in its judgment dated October 6, 2015.  For our full report, please click here.

UK Government Announced Intention to Ratify Unified Patent Court Agreement

On November 28, 2016, the UK announced that it intends to ratify the Unified Patent Court (UPC) Agreement.  The Agreement will create a pan-European patent enforcement zone for patents issued by the European Patent Office (EPO).  This differs from the current system that requires patentees to go through national validation of their EPO patent grant in each country and then bring individual enforcement actions in each European country. It is noteworthy that ratification of the UPC Agreement and the Unitary Patent entails recognizing the supremacy of a supranational court with the power to refer questions of law to the Court of Justice of the European Union.  This appears to be at odds with the current Brexit movement in the UK and raises questions as to whether the UK will be able to remain a member of the UPC system after Brexit. For our full report, please click here.

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