Grounded: Bell Helicopter Ordered to Pay Punitive Damages for Infringement of Eurocopter Patent

Published March 1st, 2012

On January 30, 2012, the Federal Court delivered its decision in the case of Eurocopter v. Bell Helicopter Textron Canada Limitée (2012 FC 113), in which Eurocopter claimed infringement of its Canadian Patent No. 2,207,787 (the ‘787 patent) directed to helicopter landing gear.  The Court found that all but one of the 16 claims of the ‘787 patent were invalid.  However, one of two types of landing gear manufactured by Bell Helicopter Textron Canada Limitée (“Bell”) was admittedly found to infringe the one valid patent claim, namely claim 15.  As noted by Justice Martineau, this case involves a classic patent infringement/validity scenario. 

Infringement

The Court considered two different landing gears manufactured by Bell, namely an earlier “Legacy” type landing gear and a later “Production” type landing gear, with the former serving as a prototype for the latter.  Bell did not dispute the fact that its “Legacy” gear contained all of the essential elements of claims 1 and 15 of the ‘787 patent.  However, the Court found that the “Production” gear lacked several essential elements, namely a “double curvature” within a front transition zone, and an “integrated front cross piece”, and therefore did not infringe any of these claims. 

Bell attempted to defeat a finding of infringement of its “Legacy” gear by raising a defence based on a provision of Section 55.2(1) of the Patent Act, namely exemption to infringement for experimental or regulatory use.  Bell asserted that 20 of the 21 “Legacy” type gears fabricated were used for tests related to government certification.  However, because 1 of the 21 “Legacy” gears was used for display at a trade show, the Court held that Bell’s “Legacy” gears were not constructed, used or sold solely for uses reasonably related to the development and submission of information required by law.  Bell could therefore not rely on the Section 55.2(1) exemption.

Bell also attempted to defeat a finding of infringement of its “Legacy” gear by raising the Gillette defence.  Bell argued that it was merely practicing prior art when it fabricated the “Legacy” gear, and argued that features of this gear were found in documents made available to the public prior to the claim date of the ‘787 patent.  However, the Court found that diagrams and text of these documents did not satisfy the two-part test for anticipation defined by the Supreme Court of Canada in Sanofi v. Apotex (2008 SCC 61), and that the documents did not disclose subject matter which, if performed, would necessarily result in infringement of the claims of the ‘787 patent.

Validity

Bell counterclaimed by alleging that claims 1 to 16 were invalid on the grounds of obviousness, insufficient specification, and lack of utility. 

Obviousness – the Court noted that Bell’s allegation of obviousness contradicted their assertion of insufficient specification.  Regardless, the Court held that none of the prior art put forward by Bell revealed the inventive concept of claim 1 of the ‘787 patent, namely a flexible landing gear having a particular geometry that allows it to work in both flexion and torsion modes.  The Court thus determined that inventiveness was required to get from the prior art to the inventive concept.

Insufficient specification – Bell argued that the disclosure of the ’787 patent is insufficient and that the best mode is not indicated.  The Court sided with Eurocopter, and took into consideration the body of knowledge that would have been possessed by a person skilled in the art at the relevant date of the patent.  The Court held that the skilled person, upon reading the disclosure of the ‘787 patent, would know to size and generally configure the landing gear in relation to weight of the aircraft.  The Court found that the specification of the ‘787 patent is clear enough to permit the skilled person to understand the general functioning of the claimed invention and its main features, and that a skilled person desirous of working the invention disclosed in the ‘787 patent would have no difficulty in complementing the teachings of the patent with their own body of knowledge.

Lack of Utility – Bell argued that promises made in the specification are required to be met across all claimed embodiments in order for claims 1 to 16 to be valid.  Upon review, the Court found that the promise of the ‘787 patent is to remedy the drawbacks of the prior art, and specifically to remedy the drawbacks associated with: i) elevated acceleration factors, ii) difficult adaptation to ground resonance, and iii) high landing gear weight.  The Court held that the utility of an embodiment included in dependent claim 15, in which the integrated front cross piece has a forward inclination, was demonstrated within the disclosure at the filing date.  However, the Court found that there was a lack of either demonstrated utility or promised utility of an embodiment included in dependent claim 16, in which the integrated front cross piece has a rearward inclination.  The Court then deemed that the embodiment having a rearward inclination fell within the broad scope of independent claim 1, and therefore that all of the claims of the ‘787 patent, with the exception of claim 15, were invalid for lack of utility.  Bell’s further attempts to convince the Court that a landing gear made according to claim 15 would not work, or would not do what the specification promised, were unsuccessful, and the validity of this claim was upheld by the Court.

Remedy

The Court found Bell’s conduct to be “outrageous” in view of evidence showing that Bell promoted the configuration of the “Legacy” gear as resulting from its own efforts while having knowledge of the ’787 patent.  The court accepted that Bell had copied the ‘787 Patent.  The Court also considered the fact that the development of the “Production” gear would not have been possible without the development of the infringing “Legacy” gear, and awarded punitive damages sought by Eurocopter, with the quantum of damages to be later assessed in view of a pending bifurcation order.

Bell filed a request for appeal on February 29, 2012.

Practice Points

Although it is clear that intention is irrelevant to liability for infringement, this is a rare example where intention was central to the remedy issue, and where non-infringing sales were deemed relevant to punitive damages.

This decision also indicates a possible recent trend in awarding punitive damages against wilful infringement of intellectual property rights, following the decision by the Federal Court in Louis Vuitton et al. v. Singga Enterprises (Canada) Inc. et al. (2011 FC 776).  In that case, the Court awarded punitive damages totalling over $2M upon finding of wilful infringement of trade-marks, and stated that such an award was justified in the case of infringers who operate within “a culture of impunity that acts in complete contempt of the intellectual property rights of others and who earn significant sums of money as a result.”

Additionally, this is one of the first examples in Canada where the relatively recent “promise of the patent” invalidity attack was addressed in the context of a non-pharmaceutical patent.  This may be an increasingly popular ground for invalidity in Canada for all types of patents.

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