Ontario Superior Court of Justice
Court File No.: CV-19-8265
Date: 2025-05-20
Parties
Between:
Zacon Limited, Plaintiff
– and –
Provincial Doors Inc., Pretium Resources Inc., John Doe, Jane Doe, and XYZ Corporation Ltd., Defendants
Mark Carr, Third Party
And Between:
Provincial Doors Inc., Plaintiff by Counterclaim
– and –
Zacon Limited, Defendant by Counterclaim
And Between:
Pretium Resources Inc., Plaintiff by Crossclaim
– and –
Provincial Doors Inc., Defendant by Counterclaim
Appearances
- Gordon S. Clarke, for the Plaintiff
- Mackenzie Jamieson, for the Defendant/Plaintiff by Counterclaim/Defendant by Crossclaim, Provincial Doors Inc.
- Cole Meagher and Nick Morrow, for the Defendant/Plaintiff by Crossclaim, Pretium Resources Inc.
- Daniel Davies and Nicole Boyle, for the Third Party, Mark Carr
Heard: April 30, 2025
Decision on Motion
R.D. Gordon
Overview
[1] In this action, Zacon Limited (“Zacon”) alleges patent infringement by Provincial Doors Inc. (“Provincial”) and Pretium Resources Inc. (“Pretium”) and claims damages, including an accounting of profits from them. Provincial has issued a third-party claim against Mark Carr. Pretium has cross-claimed against Provincial. Provincial, Pretium and Carr all assert affirmative defences that Zacon’s patent is invalid on the grounds of anticipation and obviousness.
[2] Zacon says these defences have been determined by a final decision of a Patent Re-Examination Board as not sustainable and that the pleadings asserting this defence should be struck as an abuse of process.
Background Facts
[3] On October 3, 2006, Zacon was issued Canadian Patent No. 2,348,348 (“348”) titled “Balanced Ventilation Doors”.
[4] In 2019 it initiated this patent infringement action. The defendants and third party have all defended the action on the basis that, among other things, the patent is invalid on the grounds of anticipation and obviousness.
[5] On May 21, 2021 and pursuant to s. 48.1 of the Patent Act, RSC 1985, c P-4 (the “Act”), a representative of Provincial requested re-examination of 348 on the basis that certain documents anticipated the patent and/or rendered it obvious. A Re-Examination Board was established to address the request. Its mandate pursuant to s. 48.2 of the Act was first to determine whether the request raised a substantial new question of patentability affecting any claim of the patent. The Board determined that no new question of patentability had been raised and therefore no re-examination would take place.
[6] Zacon says that the defences asserted in this action are identical to allegations made in the request for re-examination. Given the Board’s decision is final with no right of appeal, Zacon says to allow the defence to be pleaded would be duplicative of the re-examination request, may result in inconsistent results and provides a de facto review of the board’s decision when the same is specifically prohibited by the Act. Zacon says that had Provincial wished to contest that finding, it was obliged to pursue an application for judicial review and did not.
[7] The responding parties acknowledge that the defences they assert include allegations raised in the request for re-examination. However, they take the view that: (1) The request for re-examination did not deal with the validity of the patent, but with the patentability of Zacon’s original application; (2) The requirements for issue estoppel or res judicata have not been met because neither Pretium nor Carr was a party to the request for re-examination; and (3) The re-examination process was not a full and transparent determination of the issue.
The Applicable Law
[8] The plaintiff’s motion is brought pursuant to Rule 25.11 of the Rules of Civil Procedure which provides that the court may strike out all or part of a pleading on the ground that it, among other things, is an abuse of the process of the court.
[9] In Behn v. Moulton Contracting Ltd., 2013 SCC 26, [2013] 2 S.C.R. 227, the Supreme Court of Canada reiterated that the doctrine of abuse of process is characterized by its flexibility and that it engages the inherent power of the court to prevent the misuse of its procedure in a way that would be manifestly unfair to a party to the litigation before it or would in some other way bring the administration of justice into disrepute. One such circumstance is where the litigation before the court is found to be, in essence, an attempt to relitigate a claim that has already been determined. This is the circumstance relied upon by the plaintiff.
[10] As this motion requires, at least to some extent, the interpretation of the Act, it bears noting that the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament (Rizzo & Rizzo Shoes Ltd., Re, [1998] 1 S.C.R. 27).
Statutory Framework of the Patent Act
The Application for Patent
[11] Section 27 of the Act provides that the Commissioner shall grant a patent for an invention if an application for patent is filed in accordance with the Act and all other requirements for the issuance of a patent under the Act are met.
[12] Before an application for patent is granted, a patent examiner is assigned to conduct an examination of the application for compliance with the Act and Patent Rules. The examination focuses on the issues of substantive patentability of the claimed invention as well as compliance with the more technical requirements of the Patent Rules. The three substantive criteria examined for patentability are: (1) Novelty; (2) Utility; and (3) Inventiveness. If an application meets all requirements, the patent is allowed, subject to payment of a final fee. If the examiner has reasonable grounds to believe that the application is defective, and the applicant fails to correct the defect(s), the examiner may reject the application. A rejected application is subject to review by the Patent Appeal Board, which then makes recommendations to the Commissioner of Patents. The Commissioner decides whether the rejection was justified or not, or whether the applicant may be granted additional time to make required amendments to comply with the Act and Rules. If the Commissioner is satisfied that an applicant is not by law entitled to be granted a patent, the patent is refused.
[13] Refusals of patents by the Commissioner are reviewable by way of appeal to the Federal Court by the applicant [s. 41].
Re-examination of a Patent
[14] Section 48.1 of the Act provides that any person may request a re-examination of any claim of a patent. Upon receipt of a request the Commissioner must establish a re-examination board consisting of not fewer than three persons whose mandate is to: (1) Determine whether a substantial new question of patentability affecting any claim of the patent is raised by the request for re-examination. If no such question is raised the request is denied. The denial is final and not subject to appeal. (2) If the request for re-examination is found to raise a substantial new question affecting patentability, the board initiates the re-examination process, following the completion of which it must issue a certificate: (a) cancelling any claim of the patent determined to be unpatentable; (b) confirming any claim of the patent determined to be patentable; or (c) incorporating in the patent any proposed amended or new claim determined to be patentable. The decision, as set out in the certificate, is subject to appeal by the patentee to the Federal Court.
The Effect of the Patent Once Granted
[15] Once a patent is issued it is presumed to be valid and gives the patentee the exclusive right to make, construct and use the invention and sell it to others to be used, subject to adjudication in respect thereof before any court of competent jurisdiction [see s. 42]. A person who infringes a patent is liable to the patentee for all damage sustained by reason of the infringement.
Challenging the Validity of a Patent
[16] Generally, the validity of a patent can be challenged in two ways. First, the defendant in an action for infringement may plead as a matter of defence any fact or default which by the Act or by law renders the patent void and the court shall decide the matter [s. 59]. In such a case the court’s finding as to validity is only binding on the parties to the proceeding. Second, any interested person may bring an action in the Federal Court against the patentee for a declaration that the patent is invalid or void [s. 60]. In such a case, the court’s finding as to validity is binding at large.
Analysis
[17] The plaintiff argues that allowing the impugned defences to continue amounts to duplicative litigation that could result in inconsistent results. It cites Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44, para 18, in support of its position that finality is a compelling consideration, and judicial decisions should generally be conclusive of the issues decided unless and until reversed on appeal:
18 The law rightly seeks a finality to litigation. To advance the objective, it requires litigants to put their best foot forward to establish the truth of their allegations when first called upon to do so. A litigant, to use the vernacular, is only entitled to one bite at the cherry. The appellant chose the ESA as her forum. She lost. An issue, once decided, should not generally be re-litigated to the benefit of the losing party and the harassment of the winner. A person should only be vexed once in the same cause. Duplicative litigation, potential inconsistent results, undue costs, and inconclusive proceedings are to be avoided. The law seeks finality to litigation.
[18] The plaintiff says that Provincial chose the re-examination process as its forum, it lost, and it should not be allowed another bite at the cherry, particularly when the decision of the re-examination board is final and not subject to appeal. It says Pretium and Carr should also be bound by the determination of the re-examination board as they were interested persons who could have sought judicial review of that decision and failed to do so. It says it is an abuse of the court’s process to advance the same defences again in the context of this litigation. As additional support for its position, it cites Teva Canada Innovation v. Pharmascience Inc., 2021 FC 367 for the proposition that re-examination proceedings which consider the same issue, the same patent and substantially the same prior art as that being litigated before the court are duplicative proceedings that risk inconsistent findings.
Has the Same Question Been Decided?
[19] A request for re-examination, regardless of how it is framed, is a request that, in light of new information, the issuance of a patent be re-examined to determine whether it ought to have issued in the first place. For the re-examination to be held, the request must raise a substantial new question of patentability. As set out in the decision of the board:
“In order to raise a substantial new question of patentability the request must present an issue relating to the validity of one or more claims that was not previously considered during the prosecution of the application that resulted in the patent for which re-examination has been requested, and that was not considered during any other prior proceeding involving the patent. The issue must also not be so closely related to one previously considered such that it is not a substantial new question”.
[20] Provincial requested re-examination based upon documents it says rendered the invention unpatentable due to anticipation and/or obviousness that had not been considered by the Examiner during the examination of the patent application that was ultimately granted.
[21] The first question before the board, then, was whether the documents submitted by Provincial presented an issue relating to the validity of one or more claims that was not previously considered during the prosecution of the patent. The board decision was that the prior art defects alleged by Provincial were the same or very similar to those raised by the Examiner during the prosecution of the 348 patent and did not raise a substantial new question of patentability.
[22] The question that will be decided by this court is different. The question raised by the pleadings is whether these same prior art defects, along with others considered by the Examiner, render the patent invalid. The questions are different.
[23] Even if I was to find that the request for re-examination decision addressed the question of validity of the patent, I am of the view that it is not an abuse of process to allow these defences to be pleaded and determined in this action. I come to this conclusion because the Act draws a distinction between “patentability” and patent “validity”. It clearly provides that the patentability of an invention is to be determined through the examination and re-examination process. It just as clearly provides that patent validity is to be determined by the court. If the Act dictates that patent validity is within the sole purview of the court, it cannot be unjust to allow the defences to stand. My reasoning is as follows.
[24] First, the examination and re-examination processes are directed specifically towards the issue of patentability. With respect to examinations, Rule 86 of the Patent Rules requires the examiner to determine if there are reasonable grounds to believe that an application for a patent complies with the Patent Act and the Patent Rules. With respect to re-examinations, s. 48.2 requires the board to determine “whether a substantial new question of patentability …is raised”; and s. 48.4(1) provides that on conclusion of a re-examination, the board shall issue a certificate cancelling any claim of the patent determined to be unpatentable, confirming any claim determined to be patentable, or incorporating in the patent any proposed amended or new claim determined to be patentable. (Emphasis mine).
[25] Second, the Act specifically reserves the issue of validity of an issued patent to the court. In particular, s. 59 provides that the defendant in an action for infringement of a patent may plead as matter of defence any fact or default which by the Act or by law renders the patent void, and the court shall take cognizance of that pleading and of the relevant facts and decide accordingly. In addition, s. 60 provides that any interested person may seek a declaration that a patent is void, by way of action in the Federal Court.
[26] Third, s. 53.1 of the Act provides that in any action respecting a patent, a written communication may be admitted into evidence to rebut any representation made by the patentee in the action as to the construction of a claim in the patent if it is prepared in respect of, among other things, a request for re-examination or a re-examination proceeding. This section infers that notwithstanding a request for re-examination having been made and determined, the validity of a patent may subsequently be put in issue before the court.
[27] Fourth, s. 42 of the Act provides that a patent granted under the Act gives the patentee the exclusive rights to the invention “subject to adjudication in respect thereof before any court of competent jurisdiction”. This section infers that disputes with respect to validity are to be determined by the court.
[28] Fifth, s. 43(2) of the Act provides that after a patent is issued, it shall, in the absence of any evidence to the contrary, be valid. In Apotex Inc. v. Wellcome Foundation Ltd., 2002 SCC 77, [2002] 4 S.C.R. 153, the Supreme Court of Canada confirmed this to be no more than a statutory presumption, and a weak one at that, adding little to the onus resting with a party who wishes to have a patent rendered invalid. Again, the inference is that findings of invalidity are the role of the court.
[29] There is no debate that the validity of a patent can be challenged in court. There is no debate that the validity of a patent can be challenged in court even though an examiner has found the application to comply with the Patent Act and the Patent Rules. A request for re-examination that is denied because it raises no new substantial question surely does not make the initial examiner’s determination infallible and unchallengeable. Similarly, a finding by a re-examination board that, having regard to a substantial new issue raised, all claims in the patent are confirmed to be patentable surely does not usurp the court’s ability to determine the validity of the patent.
Conclusion
I am of the view that the question decided by the re-examination board is not the same question to be determined before this court and, in any event, it would not be an abuse of process to allow the defendants and third party to raise defences afforded them by the Patent Act.
Accordingly, the plaintiff’s motion is dismissed. If the parties are unable to agree on costs they may make written submissions to me, not to exceed three pages plus attachments each, within 45 days.
R.D. Gordon
Released: May 20, 2025