Shortened Limitation Periods for Patent Infringement in Canada

Published November 23rd, 2017

Summary

It has been suggested recently that a limitation period of less than six years could apply to a cause of action for patent infringement in Canada if all the elements of that action occur in a single province with a shorter than six year provincial limitation period. While it is true that a shorter than six year limitation period will apply under such circumstances for patents that are subject to the “old” Patent Act (i.e. patents filed before October 1, 1989), the Federal Court of Appeal has strongly suggested that the limitation period for patents that are subject to the current Patent Act will always be six years (i.e. patents filed on or after October 1, 1989).  For quick reference, patents that are subject to the old Patent Act are numbered in the one million series.

Details

Limitation periods for patent infringement in Canada have become the focus of increased scrutiny following the Federal Court of Appeal’s decision earlier this year in Apotex Inc. v. AstraZeneca Canada Inc., 2017 FCA 9 (CanLII) (“Apotex”).  In Apotex, the appellate court was tasked with interpreting section 39 of the Federal Courts Act (“FCA”), which stipulates:

39. (1) Except as expressly provided by any other Act, the laws relating to prescription and the limitation of actions in force in a province between subject and subject apply to any proceedings in the Federal Court of Appeal or the Federal Court in respect of any cause of action arising in that province.

(2) A proceeding in the Federal Court of Appeal or the Federal Court in respect of a cause of action arising otherwise than in a province shall be taken within six years after the cause of action arose.

Since the patent at issue in Apotex was subject to the old Patent Act, which is silent regarding the limitation period for patent infringement, the Federal Court of Appeal found that if all the elements of an action for patent infringement occurred in a single province, the provincial limitation period for that province would apply.  In any other case, a six year limitation period would apply as specified under s. 39(2) of the FCA.

The decision in Apotex mandates an onerous inquiry into where the elements of each cause of action for patent infringement occurred, particularly in actions alleging liability for inducing patent infringement by others.  While the Federal Court of Appeal was sympathetic to the practical challenges of such fact intensive inquiries, their decision downplays the likelihood of these inquiries by noting that “since 1993, section 55.01 [of the Patent Act] provides that a six-year time limitation periods applies to acts of infringement” and “the time limitation applicable to all acts of infringement has now been included in the [Patent] Act for more than 20 years and it is difficult to imagine that there are more than a few, if any, cases remaining involving patents subject to the old Patent Act” (see Apotex, at 8 and 123).  Unfortunately, the Federal Court of Appeal’s comments on the limitation period for patents subject to the current Patent Act are obiter dicta.

Notwithstanding the forgoing, there is significant support for the Federal Court of Appeal’s interpretation of the current Patent Act.  As alluded to, in 1993 the Patent Act was amended to include s. 55.01, which states in full:

Limitation

55.01 No remedy may be awarded for an act of infringement committed more than six years before the commencement of the action for infringement.
[emphasis in original]

It is difficult to argue that this section does not amount to an express provision as contemplated under s. 39(1) of the FCA.  Nevertheless, a zealous advocate might point out that s. 55.01 of the Patent Act and s. 39 of the FCA are not mutually exclusive and perhaps it was Parliament’s intent for both sections to apply concurrently, even though such an interpretation would give rise to the same practical challenges as the old Patent Act.

Ultimately, the question is whether or not Parliament intended for s. 55.01 of the current Patent Act to be a complete code regarding limitation periods for patent infringement.  While there is significant Federal jurisprudence supporting the proposition that the Patent Act is a complete code or a complete statutory scheme regarding patents, such jurisprudence is generally directed to obtaining a patent and not to patent infringement, see Brown v. Canada, 2016 FCA 37 (CanLII), and DBC Marine Safety Systems Ltd. v. Canada (Commissioner of Patents), 2008 FCA 256 (CanLII), for example.  Additionally, there is jurisprudence from the Supreme Court of Canada supporting the proposition that the Patent Act is not a complete code for patent remedies, see Bristol-Myers Squibb Co. v. Canada (Attorney General), 2005 SCC 26 (CanLII).

As with much of Canada’s Patent Act, the language of s. 55.01 closely resembles chapter 35 of the United States Code.  Specifically, 35 U.S.C. 286, which states in part:

§ 286. Time limitation on damages

Except as otherwise provided by law, no recovery shall be had for any infringement committed more than six years prior to the filing of the complaint or counterclaim for infringement in the action. […]
[emphasis in original]

The omission of an opening clause similar to that of 35 U.S.C. 286 may suggest that Parliament’s intent was to have s. 55.01 of the Patent Act operate as a complete code regarding limitation periods for patent infringement.  However, this question remains unsettled.

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