The Federal Court of Appeal has upheld a finding that the Royal Canadian Legion did not infringe an author’s moral rights by selling poppy patterned puppies under allegedly false authorship information. In the early 2000s, Mr. French sold 150 000 toy stuffed dogs patterned with a poppy design to the Legion for re-sale. In 2020, Mr. French discovered the Legion still had a version of the puppy offered in their catalogue with a descriptor that the toy was “developed by the Legion.” Mr. French sued the Legion for copyright and moral right infringement. Specifically, Mr. French claimed that authorship of the design was misattributed to the Legion.

In the first instance, the Federal Court found that the Legion was not liable for copyright infringement in view of section 64(2) of the Copyright Act. Section 64(2) sets out that once a useful article is mass produced (more than 50 copies), it is not copyright or moral right infringement to reproduce the article or to do with the article anything the copyright owner has the sole right to do.  The general purpose of the section is to prevent copyright being used in the place of industrial design registration in order to take advantage of the longer term of copyright.

While Mr. French argued the Federal Court had erred in its application of section 64(2) in finding that section 64(2) applied to all aspects of infringement (including false authorship), the Federal Court of Appeal confirmed that since the Legion could not have infringed Mr. French’s copyright they also could not infringe his moral rights. The appeal was dismissed.

The full decision can be found here.

In McDowell v. A Drip of Honey, 2024 FC 453, the Plaintiff, Heather Ruth McDowell, brought an ex parte motion in writing seeking default judgment against the Defendant, A Drip of Honey.

In a statement of claim filed on 7 February 2022, the Plaintiff alleged that the Defendant’s adoption, use and promotion of the trademark A DRIP OF HONEY amounted to trademark infringement and passing off and also damaged the Plaintiff’s goodwill in her various HONEY trademarks.  The Plaintiff sought an injunction restraining the Defendant from directing public attention to its goods in a way that caused or was likely to cause confusion in Canada between its goods and those of the Plaintiff. The Plaintiff also sought delivery or destruction of any and all business, advertising, and other material within the Defendant’s control that would offend the requested injunction.

The Defendant failed to serve and file a statement of defence within the time limit set out in the Federal Courts Rules.

The Court noted that the Plaintiff’s submissions in support of default judgment were deficient, as she failed to cite the correct legal tests for the alleged causes of action and failed to substantiate the remedies sought.  However, despite an initial inclination to dismiss the motion, the Court found that the Plaintiff’s evidence was sufficient to establish infringement and passing off, contrary to Sections 7(b) and 20 of the Trademarks Act and partially granted the motion for default judgment. The Court noted that there was no doubt that the Defendant was in default.

In granting the motion, Mr. Justice Zinn noted, “Even when unopposed on a motion for default judgment, the Plaintiff must put her best foot forward… I take this final opportunity to provide a word of caution to counsel on motions for default judgment: although unopposed, they are not automatic. The Plaintiff must prove her case, not merely plead it.”

This decision emphasizes the importance of meeting applicable legal tests even on unopposed motions for default judgment.

A copy of the decision is available here.

An application for leave to appeal the decision in Apotex Inc. v. Janssen Inc., 2024 FCA 9 has been filed by Apotex in the Supreme Court of Canada (SCC).

In the Federal Court of Appeal (FCA) decision, the FCA upheld the Federal Court’s finding that Apotex would induce infringement of Janssen’s patented medicine, INVEGA SUSTENNA, by marketing its generic version. For a finding of inducement, the test generally requires: (1) direct infringement by a third party; (2) that the inducer influenced the third party to the point that the infringing act would not have occurred without the influence; and (3) that the inducer knew that its influence would bring about the infringing act. Apotex appealed to the FCA on the basis that the Federal Court erred in applying the second prong of the test. However, the FCA found that all three prongs of the test for inducement were satisfied.

Notably, in 2023, the FCA considered the test for inducement, and particularly the second prong of the test, in other two decisions: Teva Canada Limited v Janssen Inc, 2023 FCA 68 and Apotex Inc v Janssen Inc, 2023 FCA 220.  This suggests that the Corlac test, and particularly the second prong, may be an area of increasing judicial scrutiny and/or interest.  Accordingly, if leave to appeal is granted by the SCC, this would give the SCC an opportunity to consider and potentially clarify and/or develop the test for inducement.

Read the FCA’s decision here. View the Supreme Court of Canada case information for this leave to appeal here.

In Pharmascience Inc. v. Janssen Inc., 2024 FCA 10, the Federal Court of Appeal dismissed Pharmascience’s appeal of a Federal Court decision that found Pharmascience’s sale of a generic version of a drug for treating schizophrenia would infringe Janssen’s patented dosage regimen for the drug, even if some of the doses in the regimen had to be sourced from Janssen.

Janssen’s patent specifies a regimen of: a first dose of 150 mg-equivalent (mg-eq.) of the drug on day 1, a second dose of 100 mg-eq. on day 8, and monthly maintenance doses of 75 mg-eq. thereafter. Pharmascience sells products that provide the first two doses (the 150 mg-eq. and 100 mg-eq. doses) but not the 75 mg-eq. doses.

The Federal Court had found that Pharmascience would induce infringement of Janssen’s patent by selling its products. Pharmascience argued that the Federal Court erred in its assessment of the first prong of the three-prong inducement test, namely that there was direct infringement by a third party.

Pharmascience argued that, in the absence of any limitations imposed by Janssen at the time of sale, the sales by Janssen of its 75 mg-eq. doses would include an implied license to use the 75 mg-eq. doses in any way the purchaser or prescribing physician chooses, such as using them as part of the claimed dosage regimen by combining them with other doses obtained from other sources (from, for example, Pharmascience). The Federal Court was not persuaded and held that any implied license related to a patented invention itself, and the 75 mg-eq. dose alone was not a patented invention. Instead, it was only one component of a patented invention.

The Federal Court of Appeal found no error in the Federal Court’s analysis. The Federal Court of Appeal further commented that there was no reason to conclude that either Janssen or its customers would have understood that the purchase of the drug in a single dose from Janssen would include an implied licence to use the entire dosing regimen of the product in combination with other doses obtained from other sources in order to practise the patented invention.

A copy of the decision is available here.

The federal government is currently seeking public opinions on the possibility of instituting a “patent box regime”. A patent box regime provides a preferential tax rate to income derived from certain types of intellectual property in order to incentivize research and development. Patent box regimes are already in place in 13 European Union member states, among other countries.

According to the Consultation Paper, Canadian entities currently pay more money to foreign entities to use foreign intellectual property than foreign entities pay into Canada to use Canadian intellectual property. As of 2021 Canada had a net loss of more than US$5 billion for the use of intellectual property. Comparatively, the G7 average in 2021 was a net income of approximately US$20 billion. The proposed “patent box regime” is intended to encourage IP development in Canada and thereby eliminate this net loss in intellectual property licencing.

The consultation is open until April 15, 2024. Further information on the consultation may be found here.

In Taillefer v. Canada (Attorney General), 2024 FC 259, the applicant unsuccessfully sought judicial review of a decision of the Commissioner of Patents denying a request to reinstate Canadian Patent 2,690,767 that was deemed abandoned for failure to pay the tenth anniversary maintenance fee.

In this case, the Canadian patent agent sent several email reminders to the applicant regarding the tenth anniversary maintenance fee. However, the applicant did not respond to any of the agent’s emails. As the agent did not receive instructions, the agent did not pay the maintenance fee.

After informing the applicant of the deemed abandonment of the patent, the applicant found the agent’s emails in their junk email folder. The applicant then instructed the agent to seek reinstatement. In the reinstatement request, the agent indicated “[t]o the best of his knowledge, the patent owner did not take any actions which would cause [the] emails to be directed to his junk folder, and had no reason to regularly check his junk folder for relevant emails.”

The Commissioner rejected the request for reinstatement, finding that there was not “any other action that was taken, or even considered, by the agent or the patentee, to ensure that communication channels remain[ed] effective and the Fees [we]re paid on time…”

In rejecting the application for judicial review, the Federal Court stated “it is my view that it was reasonable for the Commissioner to have looked at steps that could have avoided the communication failure and to have expected that the Agent would have additional communication mechanisms in place… Similarly, in my view it was reasonable for the Commissioner to expect that a reasonably prudent patentee would have a system in place to make sure that their email was operating effectively if they were relying on this as the primary communication means to pay their maintenance fees.”

This decision is a reminder of the high bar required to show the due care necessary for reinstatement of a Canadian patent or patent application that was deemed abandoned for failure to pay a maintenance fee.

A copy of the decision is available here.

The United States Court of Appeal for the Fifth Circuit has upheld last year’s decision that Canadian band Nickelback’s song “Rockstar” did not infringe the song “Rock Star” by Snowblind Revival.

The Court of Appeal noted that any alleged similarities between the lyrics of the two songs were “mere clichés of being a rockstar that are not unique to the rock genre.”

Furthermore, the Court of Appeal upheld the findings of the court below that Nickelback did not have access to the earlier song, a necessary component to a finding of copyright infringement: “Inferring access from this evidence would require ‘leaps of logic’ that are not supported by the record…[the] chain of hypothetical transmittals is insufficient …especially in the face of testimony from Nickelback members and relevant executives that they had never heard of Johnston’s song.”

The decision is reported in further detail here. “Rock Star” by Snowblind Revival can be heard here, while “Rockstar” by Nickelback can be heard here.