Newco Tank Corp v Canada (Attorney General) 2015 FCA 47

The Federal Court of Appeal affirmed a holding by Justice Mosley in Newco Tank Corp v Canada, 2014 FC 287, that the Board made a reasonable factual finding within its jurisdiction and expertise when it found that the background knowledge of the person skilled in the art was described in the background information found in Newco Tank Corp.’s Canadian Patent No. 2,421,384. Including this information in the common general knowledge of the skilled person was instrumental in the Board’s determination that the patent was obvious. The Federal Court and now the Federal Court of Appeal upheld this determination.

The Board had determined that the common general knowledge of the person skilled in the art included background information found in the patent, which included the problem addressed by the patent of the prior inefficient method of heating oil tanks, as well as information in the summary of the invention also describing the inefficient heating problem. [5] The Federal Court found these findings to be reasonable. [4]

The appellant Newco Tank Corp. argued that the recognition of the heating problem was actually included in the invention of the patent. [9] Thus, in making these findings, the Board erred in law by construing the problem solved by the patent to actually be an admission of the common general knowledge of the skilled person. [6] By upholding this error in law, the Federal Court should be reversed.

The Federal Court of Appeal rejected the argument, holding that the Board was not engaging in patent construction. [10] Rather, in determining that the background knowledge of the skilled person included the background knowledge of the patent itself, the Board was making a factual finding within its expertise to be reviewed on a reasonableness standard.  [10, 12] The Federal Court was thus correct when it applied the reasonableness standard to this issue. [12, 13] Furthermore, it was open to the Board to conclude that the skilled person’s common general knowledge was described in the background information in the patent. [13]

The Federal Court decision was covered in the PCK Reporter here.

Commentary

This case provides guidance to patent drafters regarding how much information should be included by way of background information in a patent. If part of the invention is meant to include the recognition of a problem, as was the case here, this case suggests not to include that recognition in the background information to avoid the risk that the recognition could be taken to be part of the common general knowledge and contribute to invalidating the patent for obviousness.

It is interesting to note that the patent drafters have increasingly been decreasing the length of their Background section, in some cases eschewing it altogether, to mitigate the exact risk that obtained in this result.  In the present case the Background of the Invention section is merely one paragraph long and entirely perfunctory, consistent with the presently popular sparse drafting style; yet it still included enough information to be used against the patentee.

While this case will further discourage exhaustive background sections, patent drafters are still faced with a careful balancing act of upholding the patent bargain by providing a fully enabling disclosure in exchange of the time limited monopoly.