Federal Court of Appeal Provides Further Guidance on Obviousness

Federal Court of Appeal Provides Further Guidance on Obviousness

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Ciba Specialty Chemicals Water Treatments Limited v SNF Inc, 2017 FCA 225

A decade ago, the Supreme Court of Canada (“SCC”) set out the following 4-part test for the obviousness analysis:

  1. Identify the notional “person skilled in the art” and the relevant common general knowledge of that person;
  2. Identify the inventive concept of the claim in question or if that cannot readily be done, construe it;
  3. Identify what, if any, differences exist between the matter cited as forming part of the “state of the art” and the inventive concept of the claim or the claim as construed;
  4. Viewed without any knowledge of the alleged invention as claimed, do those differences constitute steps which would have been obvious to the person skilled in the art or do they require any degree of invention? [45]

However, uncertainty has remained in the application of this test, particularly as the term “inventive concept” was never fully defined.

In Ciba Specialty Chemicals Water Treatments Limited v SNF Inc, 2017 FCA 225, the Federal Court of Appeal (“FCA”) elaborated on the obviousness inquiry and endorsed an approach that focuses on construing the claims rather than identifying the inventive concept. [77] The FCA was split 2-1 on whether the state of the art encompasses all prior art and whether the reasonably diligent search test is warranted. [99-100]

Additionally, the FCA upheld the Federal Court (“FC”) decision, previously reported Here, where SNF Inc. (“SNF”) succeeded in an action to invalidate Ciba Specialty Chemicals Water Treatments Limited’s (“Ciba”) Canadian Patent No. 2,515,581 (“the ‘581 Patent”) on the ground of obviousness. [1-2] The FCA held that the FC erred in its articulation and application of the obviousness test but nonetheless came to the right conclusion. [3]

The ‘581 Patent and the Obviousness Inquiry

The ‘581 Patent, entitled “Treatment of Aqueous Suspensions”, is a process patent relating to the treatment of mining waste with a water-soluble polymer to induce aggregation, which separates recyclable water from disposable particulate matter. [7-8] The ‘581 Patent teaches a process that allows the aqueous waste to be transferred as a liquid but solidify upon reaching a deposition area. [9]

The only issue in this appeal was whether the ‘581 Patent was non-obvious and therefore valid. [25]

In this appeal, Ciba argued that the FC mistakenly preferred the evidence of SNF’s experts over their expert’s evidence, and in turn erred in its determination of the scope of the common general knowledge (step 1) and the inventive concept (step 2) that led to the finding that the ‘581 Patent is obvious. [25]

Deference Given Regarding Expert Evidence Findings

The first step of the obviousness analysis requires the identification of the person skilled in the art and the relevant common general knowledge based on expert evidence. The FCA rejected Ciba’s argument that the FC’s preference for SNF’s experts was a palpable and overriding error because the FC was entitled to treat Ciba’s expert’s evidence with caution due to impartiality. [33] The FCA refused to compare the qualifications of the experts as it was not the role of an appellate court. [28]

The FCA also gave deference to the lower court on the scope of the common general knowledge, stating that it is unwise to interfere with the finding when the appellate court only has limited familiarity with the evidence that was presented over the course of the trial. [41] As such, the FCA did not interfere with the finding that “in-line” polymer treatment was part of the common general knowledge at the material time. [42]

Federal Court Applied the Wrong Test

The FCA held that the FC applied the wrong test in step 3 and step 4 of the obviousness inquiry. In step 3, the error was the substitution of “the common general knowledge” for “the matter cited as forming part of the ‘state of the art’”. [47] The FCA stated that the correct comparison is between the inventive concept and prior art, [47] and commented that common general knowledge is a subset of prior art. [50]

Step 4 was also misstated as to determine whether the differences require a degree of invention, or if they are more or less self-evident. [46] The FCA explained that the question in step 4 should ask whether the difference between the inventive concept and prior art can be bridged by the person skilled in the art. [68] Rather than remitting the matter, the FCA conducted the analysis itself. [69]

Difference Between the Inventive Concept and State of the Art was Obvious

The FCA acknowledged that the “inventive concept” remains undefined, and stated that the inventive concept can be avoided altogether to avoid uncertainty and “unnecessary satellite debate”. [76-77] Instead, the FCA construed the claims to proceed with the analysis. [77]

In this case, Claim 1 was construed and compared to the prior art, Patent No. WO0192167 (“the Gallagher Patent”). [91] The FCA found the difference between Claim 1 and the Gallagher Patent to be the notions of an “effective rigidifying amount” and of an “aqueous solution of a water soluble polymer”, [91] and held that the difference would be bridged by the person skilled in the art with common general knowledge. [95] Relying on the FC’s finding that common general knowledge included the idea that polymer-induced aggregation was dose-dependent, the FCA concluded that the knowledge that increasing the polymer dose would eventually produce the desired result required no inventiveness. [95] The FCA found Claim 1 to be obvious, and since all other claims depended on Claim 1, [19] the ‘581 Patent was found invalid. [97]

In obiter, Justice Pelletier, writing for the majority, stated that “state of the art” in step 3 of the analysis refers to prior art and this is supported by section 28.3 of the Patent Act. [51-59] Further, the person skilled in the art with common general knowledge also has the recourse of those pieces of prior art which could be discovered by a reasonably diligent search, and accordingly, step 4 of the inquiry goes beyond asking whether the differences between the inventive concept and prior art are self-evident or not. [62] However, Justice Woods, in concurring reasons, declined to opine on the effect of section 28.3 on the determination of obviousness, [99] and suggested that the issue should be left for another day. [100]

Commentary

This case is an example of where inadvertent errors were introduced through restatement of a legal test. Conveniently enough in this series of decisions, all roads did lead to Rome, but even so, the FCA took the opportunity to provide some more guidance on the obviousness inquiry so as to potentially avoid diverging paths in the future. Until the SCC delivers further guidance on what constitutes the “inventive concept”, the FCA’s approach to focus on the claims of a patent will be useful in patent litigation. This decision also adds “inventive concept” to the list of topics in patent law that are awaiting clarification from the SCC. This list also includes subjects such as whether Canadian patent law provides a “complete code” of remedies, and possibly the constitutionality of the Patented Medicines Prices Review Board provisions in the Patent Act. There is little doubt that the SCC will eventually have to provide a working definition of “inventive concept” in the near future, as it moves to demystify certain intricacies in patent law. However, as Ciba’s leave to appeal to the SCC has been dismissed, it doesn’t look like this saga of decisions will be a bringer of great change.