Canadian Intellectual Property Bulletin

Volume 1 - January, 1996

This newsletter is not intended to constitute a legal opinion on any of the issues discussed. Readers should seek professional legal advice on issues of concern to them - we would be pleased to elaborate on any of the articles herein and discuss how it might apply to specific problems. Contact us for more information.

Preserving Your U.S. Rights:

Maintaining your Date of Invention

Recent changes to the patent system in the United States patent system should be noted, as they impose restrictions on the ability of inventors to claim U.S. patent protection.

Following these amendments, the United States is now one of the only countries in the world to use a 'first-to-invent' patent priority system, rather than the traditional 'first-to-file' system of other countries, including Canada. As such, a patent application or an issued patent can be expunged by another inventor, later in time, if the second inventor can prove that they invented the item claimed first. On this basis, the date of invention becomes the key priority date, rather than the date of filing.

In order to prove the date of an invention, the inventor needs to keep provable records of their work. Specific procedures should be implemented to create a detailed notebook which would meet the requirements of a court of law, which is where an expungement proceeding can ultimately end up. I will be pleased to provide further specific information on a system of invention record-keeping which will satisfy the above requirements.

The date of invention also needs to be maintained. This entails a test of whether or not the inventor has worked diligently towards the commercialization of their invention since the date of invention. If a competitor can show a lack of such pursuit, the patent again lies open to expungement proceedings.

The Novelty of Combination Patents:

Cochlear Corp. v. Cosem Neurostim Ltée - October 13, 1995 - Federal Court Trial Division, Joyal J.

This was an application on the grounds of patent infringement - the plaintiff held a patent for a type of an implantable tissue-stimulating prosthesis which overcame deafness, through a method of electrical stimulation. The defendant manufactured a very similar system, which plaintiff contended was infringing their patent. The defendant argued that their item was distinguishable, as well as that the applicant's patent should not have been allowed because it was made up of a combination of previously known elements and as such did not represent novel patentable subject matter.

HELD: A combination of a number of previously known elements, where not obvious to a person skilled in the particular art at the time of the invention, was a novel and patentable idea. The defendant's device operated in the same manner as and imitated in substance the invention claimed in the plaintiff's patent, and given that the plaintiff's patent was valid since it did consist of novel matter there was an infringement.

Is It a Secret?

Trial judgment in drug companies trade secrets case set aside

Earlier this year, a Manitoba trial judge ruled that Jagroop Dahiya, a top pharmaceutical biologist formerly in the employ of Apotex Fermentation Inc., was liable for wrongful use of trade secrets belonging to his former employer. That decision has been set aside by the Manitoba Court of Appeal, and sent back for a new trial.

Dahiya became employed with Apotex in December 1989 at which time a research agreement was signed giving Apotex ownership of any inventions or patents that Dahiya might produce. While at Apotex Dahiya developed a "DNA transformation process" (DTP).

Dahiya left Apotex in October 1991 and joined Novopharm Biotech. Dahiya helped Novopharm to produce five kilograms of Lovastatin, a generic anti-cholesterol drug patented by Merck in 1984, using the DTP process that he had developed at Apotex.

Apotex was notified of Dahiya's contract breach and decided to conduct a court-ordered raid on Novopharm. It was thereby discovered that not only had Dahiya been using the DTP, but that he also had laboratory notes detailing optimal growing conditions for fungus, and a formula for growing fungus known as "Y-5". Additionally, Dahiya had shown Novopharm's researchers a "hot toluene" extraction process used to collect Lovastatin. All of this information had been developed at Apotex.

The trial court ruled that the DTP, the formula for the fungal-growing medium, the laboratory notes, and the extraction process were all Apotex trade secrets that Dahiya was under contract not to disclose. The Court also held Novopharm responsible for the information leak in that the company did nothing to deter Dahiya from using this information. Apotex was awarded $3.7 million and Novopharm received a world-wide injunction barring it and Dahiya from Lovastatin research until January 1, 1998.

Mr. Justice Monnin of the Manitoba Court of Appeal has ordered the judgment against Novopharm be set aside and the matter sent back to trial on the basis of new evidence. The new evidence, which came to light a number of days after the trial judgment, revealed that a U.S. patent had issued to Apotex on the Y-5 technology. Apotex had not revealed the existence of the patent during the initial trial.

Novopharm argued in the Court of Appeal that since the formula was in the public domain in the form of a patent document, it could not be a trade secret.

Apotex attempted to argue that they did not realize that the Y-5 formula was disclosed in the patent filed April of 1993. The appeals judge did not accept this argument.

Apotex plans to appeal the decision.

Displaying Your Claims to Trade Mark and Copyright Protection:

In notifying the public of your rights in a trade mark, the following guidelines should be observed. The symbol "" should be used for all common law trade marks and marks for which trade mark applications have been filed but have not yet registered. Once your trade mark application is allowed by the Canadian Trade Mark Office you should use the "®" symbol with the mark. Text marks should be used in all capital letters, followed by either the ® or the symbol. If other variations are used, you may expose your mark to challenge.

Copyright should be properly marked on materials to which it is claimed, in order to inform the world that it is proprietary to the owner. In written materials, the © symbol should be used followed by the name of the author (or company that owns the material), along with the date of first publication. For example, "© Company Y, 1994". Copyright should be claimed in all updates as well by using something like "© Company Y, 1994 (including updates 1994-1996)".

To indicate copyright in a computer screen, the screen should use the © symbol followed by the name of the author (or the company that owns a program written by its employees), and the date of first public use or sale of the program (e.g. "© Company X, 1995"). If updates of the program have been made since its first public use, copyright in the updates can be indicated by placing that date of first use in the copyright claim as well (e.g. "© Company X, 1995, 1996").

It is also a good idea to register your copyrighted work with the Canadian Copyright Office. Registration of your copyright is proof that copyright subsists in the work and that the person registered is the owner of the copyright.

Public Disclosure:

Starting the clock ticking against your North American patent application

Disclosure of an invention before all of the desired patent applications have been filed has significant legal ramifications. In Canada and the United States, an inventor is allowed one year from the date of the first disclosure of their idea to file for patent protection. Some common examples of such 'disclosure' are:

• showing the idea at a trade show;
• any type of scientific publication;
• sharing your idea with friends, neighbors or colleagues who are not
•  co-inventors.

In addition, a public disclosure anywhere in the world will also in most cases have the effect of collapsing the one year priority filing period between Canada and the United States. 'Disclosure' has been interpreted very widely - if you are worried that you or your client may have disclosed your invention and engaged the limitation period during which you must file, please feel free to contact me for further information.

In most countries outside of North America, including Mexico, public disclosure of an invention before a patent application is filed is fatal - it nullifies any and all patent rights.

Before a disclosure of any sort is made, an appropriate relationship of confidentiality should be created if it does not already exist with the disclosee in the existing business relationship.

Filing a Trade Mark Application:

Are You Fully Protected?

Common law trade mark rights give you the ability to restrain a competitor from pretending that your goods, business or services are theirs, if you can prove that you have established a common law property right in a given trade mark. This is weak, narrow protection, and by far the better approach to take is to file for federal trade mark registration and protection. The following are the steps which should be followed in seeking Canadian trade mark protection:

1. A trademark registrability search should be done to ensure that the Canadian trademark registry does not contain any confusingly similar marks. An additional consideration at this point, if you are seeking protection for a text mark, is to look at the search result for guidance on whether or not your proposed trademark might be held to be descriptive in nature and not registrable on that basis.

2. If the search reveals no confusing marks, and once you have finalized your proposed mark, then I would recommend that you file a trademark application at that point.

3. The Canadian Trade Mark Office will examine your application for registrability and if it is acceptable the mark will be publicly advertised. This stage generally takes about six months where there is no Examiner's objection. If further discussions with the Trade Marks Office are required, the time period can be significantly longer.

4. If no opposition to your mark is filed during the two month advertising period, your application will be allowed to go forward for registration.

Other Issues

Please feel free to contact us for further information on these or any other intellectual property issues. The following are a few other current issues of which you should be made aware:

• Changes to trade mark licensing and monitoring practices necessitated by amendments to the North American Free Trade Agreement (Bell Canada v. Unitel)
• Creating provable documentation of invention: physical requirements of a laboratory notebook

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