Ask an IP litigator: Can I assert my Canadian patent against a manufacturer in another country?

Ed Fan (00:03): You have a Canadian patent and have just learned that one of your competitors is manufacturing the same product overseas. The first question you're likely to ask is, “Well, is there anything you can do to stop them?” I'm Ed Fan and I'm here with Yael Bienenstock to discuss if you can assert your Canadian patent against a manufacturer who's based in another country.

Yael, since the company only has a Canadian patent, is there anything they can do?

Yael Bienenstock (00:28): Short answer to the question is: yes. Their Canadian patent gives them the right to exclude other people—competitors—from making, using or selling the patented product or process in Canada. That's true. And therefore, on the face of the Patent Act itself, the patent can't be used to stop competitive activities that are taking place outside of Canada. But there's a doctrine in Canada called “The Saccharin Doctrine”, named after the artificial sweetener, that was being imported into the UK.

And what happened in the Saccharin case in the UK is that the product was being imported, the UK patentee had a patent to the process, and the product that was being imported was made using the UK-patented process. And so the court said, your UK patent gives you a right to exclude anyone else from having the benefits of your patent, the right to exclude them from making, using, selling your patented—in this case—process.

And so by importing something made with that patented process, even though the procesas happened outside of the UK, you can still sue for infringement. And that doctrine, called the Saccharin Doctrine, has been adopted by Canadian courts. The first question is: is your competitor importing that product into Canada? If the answer is “no”, if all of the activities are happening outside of Canada, then you're out of luck. But if the answer is “yes”, then you might be in luck. You just have to look at the claims.

Yael Bienenstock (02:03): So, Ed, what types of claims can clients get that can help them stop competitors outside of Canada?

Ed Fan (02:12): So, that's a great point to pick up on. So, if we had managed to get product claims then we wouldn't even be talking about Saccharin the way Yael just explained. If you have a product claim to a product, and that product is imported into Canada or sold in Canada, you would assert direct infringement based on that product claim.

But let's say you did not get a product claim in your patent. There are many types of patent claims, so you were unsuccessful or only received a process claim. As Yael has explained, if the process covers a patented process only in Canada, you only have a Canadian patent, the manufacturer could say, “Well, I only utilize this process outside of Canada.”

The product was manufactured using a patented process, but because you only had a Canadian patent, I manufactured in the country that’s not Canada. I would say, “Well, I'm not making, using or selling the patent in Canada.” This is where Saccharin comes in. If under the UK doctrine adopted in Canada, if you have a process claim in Canada, even if the manufacturer is using that process outside of Canada, you could sue them for infringement at importation.

Yael Bienenstock (03:29): And I guess there's also—sometimes courts talk about Swiss-type claims, which the Saccharin doctrine can cover. And these claims, for those of you who don't know what a Swiss-type claim is, is similar to a use claim, but it has a particular form. For example, the use of a certain composition for the preparation of a médicament is what the patents often say is patentese for medicine, I think, to be used for a particular use.

And this sounds sort of convoluted, but historically people use these kinds of claims because you couldn't actually claim the medicine themselves. And so, it was basically a workaround. And the Federal Court has applied the Saccharin doctrine to Swiss-type claims as well. And what they've said is: parties cannot escape infringement merely by housing its production overseas.

And so, Saccharin doctrine can be important for those types of claims as well.

Ed Fan (04:23): So, that makes me think about, Yael, what if there is a more, well, a very complicated supply chain, which we normally see these days, so say it's not just the Ford manufacturer importing. There is a Ford manufacturer, there is an importer of record, a shipping company, hired by that importer of record to bring the product in Canada, a marketing firm advertising in Canada, a distributor that takes it to retailers, and then the retailer that sells a product that they got from a distributor. In a complicated supply chain like that and under Saccharin, who's liable and what happens?

Yael Bienenstock (04:57): So, Ed, do you want your 20-page memo right now or in a week? Okay. This is a pretty complicated question. And it's quite fact-specific. So, I'm just going to give you a few things to think about, and then you can go away and think of it yourself, Ed. So, if the only claims in the Canadian patent are process claims, and the only activity that's infringing is manufacture overseas by a party who's not bringing it into Canada, then you might be out of luck.

In the Hospira case in 2020, Hospira brought an impeachment action about a patent that claimed the use of infliximab combined with methotrexate. And the patentees in that case counterclaim claimed against both Hospira and Celltrion, which was a South Korean pharmaceutical company. The trial judge’s analysis on infringement was a little bit fuzzy on exactly who did what, where, but he certainly focused on the activities of Hospira.

That said, he granted the patentees claim against both Celltrion and Hospira. And then on appeal, Celltrion argued that the trial judge hadn't actually made any findings of fact that Celltrion had conducted any infringing activities in Canada, and the respondents acknowledged that there was no evidence about where Celltrion actually conducted its activities. So the Federal Court of Appeal in that case overturned the trial judge's decision based on another UK decision about Saccharin.

Saccharin 2. In that case, the plaintiff sued a different defendant from the first time for infringement of its UK patent, and that defendant, unlike the first one, hadn't actually done anything in the UK. And so the infringement action was dismissed. And so in this case, the Court of Appeal said since there's no evidence that Celltrion actually did anything in Canada, the trial judge's decision on infringement was overturned.

So, getting back to your fact scenario, and notwithstanding its complexity, your client might be out of luck against the foreign manufacturer if that entity is not actually doing anything in Canada. And that gets us back to where we started this idea that patents are territorial. For all the parties down the supply chain, it's going to really depend on what they are doing, what the patent claims and if you can somehow match them up.

And once you know that, then you can see if the Saccharin doctrine is helpful.