2019 FC 581, 2019 FC 581

T-1612-16 2019 FC 581 Aux Sable Liquid Products LP, Aux Sable Liquid Products Inc. and Aux Sable Canada Ltd. ( Plaintiffs ) v. JL Energy Transportation Inc. ( Defendant ) Indexed as: Aux Sable Liquid Products LP v. JL Energy Transportation Inc. Federal Court, Southcott J.—Toronto, March 11-22 and 28-29; Ottawa, May 6, 2019.

Patents — Action seeking order pursuant to Patent Act ( Act ), s. 60(1) to invalidate Canadian Patent No. 2205670 ( ‘ 670 patent), related to transportation of natural gas by pipeline, held by defendant — ‘ 670 patent additive (hydrocarbon compound) leading to decrease in amount of power needed to pump gas in pipeline — Defendant licensing technology to plaintiff Aux Sable Liquid Products LP (Aux Sable LP) — Aux Sable LP then assigning licence to Aux Sable Extraction LP — D efendant bringing action for breach of contract, infringement of ‘ 670 patent — Plaintiffs commencing present action in response — Raising invalidity arguments in connection with ‘ 670 patent’s 10 claims — Main issue involving four-step analytical framework in Apotex Inc. v.

Sanofi-Synthelabo Canada Inc. (Sanofi) regarding obviousness — P arties disagreeing on proper test to be applied in third step of Sanofi analysis — Plaintiffs arguing, inter alia, introduction of Act , s. 28.3 displacing common law reasonably diligent search test, replacing it with requirement only that prior art be publicly disclosed — Defendant arguing, inter alia, s. 28.3 not changing applicable test, case law demonstrating that reasonably diligent search test continuing to apply — Relying on decision in E. Mishan & Sons, Inc. v. Supertek Canada Inc. (Mishan) — Main issue proper

interpretation of Act , s. 28.3 — Mishan n ot deciding issue surrounding

interpretation of s. 28.3 — Reasoning in Pollard Banknote Limited v.

BABN Technologies Corp. (Pollard) supporting conclusion that identical language in Act , ss. 28.2 , 28.3 invoking access to same prior art for both anticipation and obviousness analyses — Prior art reference disclosed to public prior to applicable date prescribed by s. 28.3 forming part of prior art for purposes of obviousness analysis, regardless of whether reference locatable through reasonably diligent search — All pieces of prior art herein citable references for purposes of analysis of obviousness allegation — Evidence not establishing that skilled person aware of complexities of behaviour of modified gas in absence of imagination, inference, performance of calculations — Plaintiffs not establishing obviousness of claims 1–8 of ‘ 670 patent — As to insufficiency, ‘ 670 patent providing information necessary to practice invention claimed — Not invalid simply because skilled person relying on common general knowledge to practice patent — Claims 9–10 of ‘ 670 patent invalid for overbreadth, inutility, anticipation, non-patentable subject matter — Action allowed in part.

This was an action seeking an order pursuant to subsection 60(1) of the Patent Act ( Act ) to invalidate Canadian Patent No. 2205670 (‘670 patent), held by the defendant, related to the transportation of natural gas by pipeline. The ‘670 patent is an additive (an hydrocarbon compound) added to natural gas that leads to a decrease in the amount of power needed to pump the gas or to compress it. A gas mixture that includes increased quantities of heavier molecular weight hydrocarbons becomes more compressible, a property designated by what is called the “z factor”.

A lower z factor represents a more compressible gas, and this can result in a reduction of the amount of energy required to transport the mixture in a pipeline. A reduction in the energy can be determined by calculating the product of the molecular weight (Mw) and the compressibility of the new gas mixture (

z) and comparing that product (zMw) to the zMw product of the untreated gas. Prior to filing the application for the ‘670 patent, the defendant licensed some of that technology to one of the plaintiffs, Aux Sable Liquid Products LP (Aux Sable LP). Aux Sable LP then assigned the licence, with the consent of the defendant, to Aux Sable Extraction LP. The defendant later brought an action for breach of contract and infringement of the ‘670 patent in the Court of Queen’s Bench of Alberta against the plaintiffs. In response, the plaintiffs commenced the present action.

The plaintiffs raised invalidity arguments, in connection with the patent’s 10 claims, related to obviousness, insufficiency, and unpatentable subject matter. They also argued that claims 9 and 10 were invalid for anticipation/novelty, overbreadth and lack of utility. The main issue involved the four-step analytical framework applicable to an obviousness allegation, as described by the Supreme Court in Apotex Inc. v. Sanofi-Synthelabo Canada Inc. ( Sanofi ).

The parties disagreed on the proper test to be applied in the third step of the Sanofi analysis, i.e. identifying what differences, if any, exist between the matter cited as forming part of the “state of the art” and the inventive concept of the claim or the claim as construed. The plaintiffs argued that under the obviousness provision in

section 28.3 of the Act , they only needed to show that a piece of prior art upon which they relied was disclosed, earlier than the relevant date prescribed by

section 28.3 , in such a manner that the information disclosed became available to the public, effectively the same test as applicable to an anticipation analysis under

section 28.2 of the Act . The plaintiffs further argued that the introduction of

section 28.3 displaced the common law reasonably diligent search test, replacing it with the requirement only that the prior art be publicly disclosed. The defendant took the position that the test for a reference being citable for obviousness under

section 28.3 of the Act is different from the test for a reference being citable for anticipation under

section 28.2 and requires the party wishing to rely upon a reference to establish that the reference was locatable through a reasonably diligent search by the skilled person. The defendant also argued that

section 28.3 did not change the applicable test, and that the case law subsequent to its introduction demonstrates that the reasonably diligent search test continues to apply. There were three pieces of prior art in dispute, all related to the transmission of natural gas. The defendant relied on the decision in E. Mishan & Sons, Inc. v. Supertek Canada Inc. ( Mishan ) to state that the Federal Court of Appeal therein rejected the argument that the test for determining which documents are to be included as part of the prior art is not based on whether a particular reference was locatable. The main issue was the proper

interpretation of

section 28.3 of the Act . Held , the action should be allowed in part. Mishan could not be read as having decided the issue surrounding the

interpretation of

section 28.3 that was raised in the present case. Mishan identified a live issue surrounding the

interpretation of

section 28.3 that the Federal Court of Appeal declined to address. The

Federal Court of Appeal’s decision in Ciba Specialty Chemicals Water Treatments Limited v. SNF Inc. (Ciba) did not support thedefendant’s position that the reasonably diligent search test remains unaffected by

section 28.3. While several Federal Court decisionspostdating the 1996 introduction of

section 28.3 refer to or apply the reasonably diligent search test, it did not appear that the issueherein, i.e. whether

section 28.3 eliminated the common law test that applied before its enactment, was raised in any of those cases.Therefore, it was difficult to rely upon them for a conclusion that the Court has rejected the statutory

interpretation arguments advancedby the plaintiffs. It was, however, compelling to interpret the Court’s decision in Pollard Banknote Limited v. BABN Technologies Corp.(Pollard) as rejecting the requirement for a prior art reference to be locatable through a reasonably diligent search to be citable forobviousness, but as still recognizing that, when subsequently (i.e. in step 4 of the Sanofi analysis) considering whether multiple prior artreferences can be combined to conclude that the impugned invention is obvious, their locatability may be relevant. This

interpretation isconsistent with Ciba, wherein the Federal Court of Appeal commented that the skilled person can then have recourse to the commongeneral knowledge (CGK) supplemented by those pieces of prior art that could be discovered by a reasonably diligent search. Pollardprovides that a patent monopoly should not result from an obvious advancement upon prior art, regardless of whether the prior art wouldhave been located in a diligent search.

This reasoning supports the conclusion that the identical language in sections 28.2 and 28.3invokes access to the same prior art for both anticipation and obviousness analyses. The plaintiffs were not asking the Court to changethe law, but rather to recognize that Parliament changed the law from the previously applicable common law test when it enacted section28.3. A prior art reference which was disclosed to the public, prior to the applicable date prescribed by

section 28.3, forms part of theprior art for purposes of an obviousness analysis, regardless of whether the reference would have been locatable through a reasonablydiligent search. As a result, all pieces of prior art, upon which the plaintiffs relied for purposes of their claims 1–8 obviousnessallegation, were citable references for purposes of analysis of that allegation.

Given the particular evidence and arguments advancedherein, it mattered little whether the analysis surrounding the role of the measurement of the zMw product in the obviousness analysistook place in considering whether there was a gap between the prior art and the claims or in considering whether that gap could bebridged using the CGK of the skilled person. Step 3 of Sanofi requires consideration of the differences between the prior art and theinventive concept, not the differences between the CGK and the inventive concept.

However, in the present case, the plaintiffs relied onprior art documents that are widely and frequently accessed by the skilled person. The analysis required herein was a consideration ofwhether the role of the evaluation of the zMw product in claims 1–8 of the ‘670 patent formed part of either the prior art or the CGK tomake claims 1–8 obvious. It is only the claims as construed, and not other concepts that may appear in the disclosure of the patent, thatare to be taken into account in assessing obviousness.

The evidence did not establish that the skilled person would have been aware ofthe complexities of the behaviour of zMw in the absence of imagination, inference, and the performance of calculations motivatedthereby. The plaintiffs did not establish, either through the content of the prior art or through the content of CGK intended to bridgedifferences between the prior art and the claims, that claims 1–8 of the ‘670 patent were obvious.

As to insufficiency, the fact that there are a range of operating conditions and gas compositions within which the invention described inclaims 1–8 can be achieved did not translate into a conclusion that the skilled person does not have enough information to practice theinvention. The ‘670 patent provides the information necessary to practice the invention claimed. It was not invalid simply because the skilledperson relies on the CGK to practice the patent.

Finally, claims 9–10 of the ‘670 patent were found to be invalid for overbreadth, inutility, anticipation and non-patentable subject matter.Claims 1–8 were not found invalid under any of the invalidity allegations raised by the plaintiffs. STATUTES AND REGULATIONS CITED Federal Courts Rules, SOR/98-106, r. 52.2. Intellectual Property Law Improvement Act, S.C. 1993, c. 15, s. 33. Patent Act, R.S.C., 1985, c. P-4, ss. 2 “invention”, 27(3),(4), 28.2, 28.3, 60(1). CASES CITED APPLIED: Apotex Inc. v. Sanofi-Synthelabo Canada Inc., 2008 SCC 61, [2008] 3 S.C.R. 265; Whirlpool Corp. v.

Camco Inc., 2000 SCC 67, [2000]2 S.C.R. 1067; Eli Lilly Canada Inc. v. Mylan Pharmaceuticals ULC, 2016 FCA 119, [2017] 2 F.C.R. 280; Amfac Foods Inc. v. IrvingPulp & Paper, Ltd. (1986), 12 C.P.R. (3d) 193, 9 C.I.P.R. 265 (F.C.A.); AstraZeneca Canada Inc. v. Apotex Inc., 2017 SCC 36, [2017] 1S.C.R. 943; Ciba Specialty Chemicals Water Treatments Limited v. SNF Inc., 2017 FCA 225, 152 C.P.R. (4th) 239; Pollard BanknoteLimited v. BABN Technologies Corp., 2016 FC 883, 141 C.P.R. (4th) 329; Teva Canada Ltd. v. Pfizer Canada Inc., 2012 SCC 60, [2012]3 S.C.R. 625; AbbVie Biotechnology Ltd. v.

Canada (Attorney General), 2014 FC 1251, sub nom. Abbott Laboratories (Bermuda) Ltd.,Re, 126 C.P.R. (4th) 51. CONSIDERED: Drader v. Abbotsford (City), 2012 BCSC 873, 98 M.P.L.R. (4th) 216; Apotex Inc. v. H. Lundbeck A/S, 2013 FC 192, 111 C.P.R. (4th)171; Eli Lilly and Company v. Apotex Inc., 2009 FC 991, 80 C.P.R. (4th) 1; B.V.D.Company v. Canadian Celanese Ltd., (SCC), [1937] S.C.R. 221, [1937] 2 D.L.R. 481; Hospira Healthcare Corporation v. Kennedy Trust for Rheumatology Research, 2018FC 259; Bombardier Recreational Products Inc. v. Arctic Cat, Inc., 2018 FCA 172, 159 C.P.R. (4th) 319; Free World Trust v.

ÉlectroSanté Inc., 2000 SCC 66, [2000] 2 S.C.R. 1024; Baker Petrolite Corp. v. Canwell Enviro-Industries Ltd., 2002 FCA 158, [2003] 1 F.C.49; Schering-Plough Canada Inc. v. Pharmascience Inc., 2009 FC 1128, 81 C.P.R. (4th) 9; Merck & Co., Inc. v. Pharmascience Inc.,2010 FC 510, 85 C.P.R. (4th) 179; Bell Helicopter Textron Canada Limitée v. Eurocopter, société par actions simplifié, 2013 FCA 219,499 N.R. 111, affg 2012 FC 113, 100 C.P.R. (4th) 87; Alcon Canada Inc. v. Cobalt Pharmaceuticals Company, 2014 FC 462, 119 C.P.R.(4th) 397; Procter & Gamble Co. v.

Kimberly-Clark of Canada Ltd. (1991), 49 F.T.R. 31, 40 C.P.R. (3d) 1 (F.C.T.D.); General Tire &Rubber Company v. Firestone Tyre & Rubber Company, [1972] R.P.C. 457 (Eng. C.A.); Wenzel Downhole Tools Ltd. v. National-Oilwell Canada Ltd., 2012 FCA 333, [2014] 2 F.C.R. 459; E. Mishan & Sons, Inc. v. Supertek Canada Inc., 2015 FCA 163, 134 C.P.R.

(4th) 207; Apotex Inc. v. Sanofi-Aventis, 2011 FC 1486, 101 C.P.R. (4th) 1; Pfizer Canada Inc. v. Apotex Inc., 2007 FC 971, 61 C.P.R.(4th) 305; Takeda Canada Inc. v. Canada (Health), 2015 FC 570, 131 C.P.R. (4th) 412; Eli Lilly Canada Inc. v. Apotex Inc., 2018 FC736, 156 C.P.R. (4th) 387; Allergan Inc. v. Apotex Inc., 2016 FC 344; Novartis Pharmaceuticals Canada Inc. v. Teva Canada Limited,2015 FC 770, 135 C.P.R. (4th) 211; Illinois Tool Works Inc. v. Cobra Fixations Cie Ltée. – Cobra Anchors Co. Ltd., 2002 FCT 829, 20C.P.R. (4th) 402, affd 2003 FCA 358, 29 C.P.R. (4th) 417; Axcan Pharma Inc. v.

Pharmascience Inc., 2006 FC 527, 50 C.P.R. (4th) 321. REFERRED TO: Lilly Icos LLC v. Pfizer Ltd., [2000] EWHC Patents 49, [2001] F.S.R. 16; Apotex Inc. v. Shire LLC, 2018 FC 637; Bristol-Myers SquibbCanada Co. v. Apotex Inc., 2017 FCA 190, 152 C.P.R. (4th) 265; Calgon Carbon Corporation v. North Bay (City), 2006 FC 1373, 56C.P.R. (4th) 281; Eli Lilly Canada Inc. v. Novopharm Limited, 2010 FCA 197; Windsurfing International Inc. v. Tabur Marine (GreatBritain) Ltd., [1985] R.P.C. 59 (C.A.); Pozzoli SPA v.

BDMO SA, [2007] F.S.R. 37, [2007] EWCA Civ. 588 (BAILII) (C.A.); Rizzo &Rizzo Shoes Ltd. (Re), (SCC), [1998] 1 S.C.R. 27, (1998), 36 O.R. (3d) 418; Lux Traffic Controls Ltd. v. Pike SignalsLtd. and Faronwise Ltd., [1993] R.P.C. 107 (Pat. Ct.); Godbout v. Pagé, 2017 SCC 18, [2017] 1 S.C.R. 283; Uponor AB v. HeatlinkGroup Inc., 2016 FC 320, 139 C.P.R. (4th) 393; Hoffmann-La Roche Limited v. Apotex Inc., 2011 FC 875, 104 C.P.R. (4th) 233; BeloitCanada Ltd. v. Valmet OY (1986), 8 C.P.R. (3d) 289, 7 C.I.P.R. 205 (F.C.A.); Teva Canada Limited v. Janssen Inc., 2018 FC 754, 157C.P.R. (4th) 391; Consolboard Inc. v.

MacMillan Bloedel (Sask.) Ltd., (SCC), [1981] 1 S.C.R. 504, (1981), 122 D.L.R.(3d) 203. AUTHORS CITED Engineering Data Book, 10th ed. 2 Vols. loose-leaf. Tulsa, Okla: Gas Processors Suppliers Association, 1987. International Conference on Arctic Margins, Magadan, Russia, September 6-10, 1994. Katz, Donald L. “Properties of Natural Gases and Volatile Hydrocarbon Liquids” in Handbook of Natural Gas Engineering, New York:McGraw-Hill, 1959. Katz, Donald L. “Transmission to Market” in Handbook of Natural Gas Engineering, New York: McGraw-Hill, 1959. Kratz, Donald L. and Graeme King.

Dense Phase Transmission of Natural Gas, 1973. MacOdrum, Donald H. Fox on the Canadian Law of Patents, 5th ed. loose-leaf. Toronto: Carswell, 2017. ACTION seeking an order pursuant to subsection 60(1) of the Patent Act to invalidate Canadian Patent No. 2205670 related to thetransportation of natural gas by pipeline. Action allowed in part. APPEARANCES Timothy St. J. Ellam, Q.C., Steven Tanner and Sanjaya Mendis for plaintiffs. Ariel Breitman, Jonathan Bourchier and Scott Davidson for defendant. SOLICITORS OF RECORD McCarthy Tetrault LLP, Calgary, for plaintiffs. MLT Aikins LLP, Calgary, for defendant.

The following are the reasons for judgment and judgment rendered in English by Southcott J.: Table of Contents Paragraph I. Overview 1 II. Background 3 III. Issues 13 IV. Witnesses 15 A. Dr. Stephen Ramsay 16 B. Mr. Graeme King 19 C. Dr. Mukul Sharma 24 D. Dr. Wayne Monnery 28 E. Mr. Mark Ryan 36 F. Fact Witnesses 41

V. The Skilled Person 42 VI. Claim Construction 49 VII. Are claims 9 – 10 of the ’670 patent invalid based on the following grounds? 56 A. Overbreadth 56 B. Inutility 75 C. Anticipation 89 Stinson 93 Handbook 105 D. Obviousness 123 VIII. Are claims 1 – 8 of the ’670 patent invalid for obviousness? 124 A. Analytical Framework 124 B. Common General Knowledge 126 C. Inventive Concept 132 D. Test for a Citable Prior Art Reference 135 E. Sanofi Steps 3 and 4 177 IX. Are claims 1 – 10 of the ’670 patent invalid based on the following grounds? 219 A. Insufficiency 219 B. Unpatentable subject matter 230 X.

Conclusion and Costs 239 Appendix “A” I. Overview [ 1 ] This decision relates to an action by the plaintiffs, Aux Sable Liquid Products LP, Aux Sable Liquid Products Inc., and Aux Sable Canada Ltd. (together, Aux Sable), to invalidate a patent identified as Canadian Patent No. 2205670 (the ’670 patent), related to the transportation of natural gas by pipeline, held by the defendant, JL Energy Transportation Inc. (JL Energy). [ 2 ] For the reasons explained in detail below, I find that claims 9–10 of the ’670 patent are invalid for overbreadth, inutility, anticipation and non-patentable subject matter.

I do not find claims 1–8 to be invalid under any of the invalidity allegations raised by the plaintiffs. II. Background [ 3 ] Aux Sable Liquid Products LP is a limited partnership formed under Delaware law and registered as an extra-provincial limited partnership in Alberta (Aux Sable LP). Aux Sable Liquid Products Inc. is also a Delaware company and the general partner of the limited partnership (Aux Sable GP).

Aux Sable Canada Ltd. is an Alberta company and carries on business in the province and elsewhere in Canada (Aux Sable Canada). [ 4 ] JL Energy is a company incorporated under the laws of Alberta and is the owner of the ’670 patent. By way of introduction to the technology that is the subject of this litigation, the Abstract of the Invention, set out in the ’670 patent, reads as follows: English Abstract At pressures over 1000 psia, it is advantageous to add to natural gas an additive which is a C 2 C 3 and C 4 hydrocarbon compound, CO, NH 3 or HF or a mixture of such additives.

Above a lower limit (which varies with the additive being added and the pressure), this results in a smaller Z factor, or (M w

Z) product, representing increased packing of molecules, and therefore leading to a decrease in the amount of power needed to pump the mixture or to compress it. [ 5 ] By way of further background explanation of the relevant technology, the following appears uncontroversial. Natural gas, in its naturally occurring form, is composed mainly of methane, a hydrocarbon molecule with only one carbon atom.

However, natural gas may also include smaller quantities of hydrocarbons with a larger number of carbon atoms, such as ethane (having two carbon atoms, designated as C 2 ), propane (having three carbon atoms, designated as C 3 ), butane (having four carbon atoms, designated as C 4 ), and other heavier hydrocarbons. All these heavier hydrocarbons have a higher molecular weight (a property designated by the term Mw) than methane, because their molecules are composed of more atoms. As such, the greater the concentration of such heavier hydrocarbons in a gas mixture, the greater will be its average molecular weight.

However, it is a feature of gas behaviour that, at a given temperature and

pressure, a gas mixture which includes increased quantities of the heavier molecular weight hydrocarbons C 2 and C 3 becomes more compressible, a property designated by what is called the “z factor” . A lower z factor represents a more compressible gas. [ 6 ] Directionally, heavier molecular weight hydrocarbons require more energy to be transported in a pipeline than does the lighter molecular weight methane.

However, the increased compressibility (or lower z factor) of a mixture containing increased quantities of the heavier hydrocarbons C 2 and C 3 contributes directionally to less energy being required to transport the mixture. Beyond a certain threshold of increased quantities of these heavier molecular weight hydrocarbons, and at certain temperatures and pressures, this increased compressibility can “overcome” the effect of the heavier molecular weight.

Therefore, treating a naturally occurring gas mixture (consisting primarily of methane and small quantities of ethane, propane, butane, etc.) by intentionally adding C 2 and/or C 3 can result in a reduction of the amount of energy required to transport the mixture in a pipeline. [ 7 ] Whether such a reduction in the energy required to transport the mixture in a pipeline will actually result can be determined by calculating the product of the molecular weight (Mw) and the compressibility of the new gas mixture (

z) and comparing that product (zMw) to the zMw product of the untreated gas. A lower zMw product indicates that a reduction in the energy required to achieve transport of the gas mixture will result. [ 8 ] In June 1996, prior to filing the application for the ’670 patent, JL Energy (then called 665976 Alberta Ltd.) licensed certain technology, broadly of the sort described in general terms above, to one of the plaintiffs, Aux Sable LP (then called Alliance Pipeline NGL LP) (the Licence).

In January 1999, Aux Sable LP assigned the Licence, with the consent of JL Energy, to Aux Sable Extraction LP, another limited partnership formed under Delaware law (Aux Sable Extraction). Aux Sable Extraction is not a party to this litigation. [ 9 ] In May 2016, JL Energy brought an action for breach of contract and infringement of the ’670 patent in the Court of Queen’s Bench of Alberta against several defendants, including Aux Sable LP and Aux Sable GP (the Alberta Action).

The Alberta Action has not progressed, pending the outcome of the within action before this Court, although there is a pending application in the Alberta Action to add defendants, including Aux Sable Canada and Aux Sable Extraction. [ 10 ] In response to the Alberta Action, the plaintiffs commenced the within action in September 2016, seeking an order pursuant to subsection 60(1) of the Patent Act , R.S.C., 1985, c. P-4 (the Act ) declaring that the ’670 patent is invalid, void and of no force and effect.

It is acknowledged by the defendant that each of the plaintiffs is an “interested person” for purposes of bringing a proceeding under subsection 60(1) of the Act . [ 11 ] As will be explained in more detail below, the ’670 patent sets out 10 claims. Claims 1 and 9 are independent claims, with claims 2 through 8 depending on claim 1 and claim 10 depending on claim 9. The plaintiffs raise invalidity arguments, in connection with all claims, related to obviousness, insufficiency, and unpatentable subject matter.

They also argue that claims 9 and 10 are invalid for anticipation/novelty, overbreadth and lack of utility. The defendant denies that any of the claims of the ’670 patent are invalid, for any of the reasons asserted by the plaintiffs. The defendant had also argued, as a consequence of the Licence, that the principles of licensee estoppel preclude the plaintiffs from challenging the validity of the patent, but it did not pursue this argument at trial.

The parties have agreed that, for purposes of the issues in this litigation, the ’670 patent was filed in Canada on May 16, 1997 and the claim date for the ’670 patent is November 18, 1996. [ 12 ] Much of the documentary evidence in this action was admitted by agreement of the parties. Each of the parties supported its positions on the various grounds of invalidity through the evidence of expert witnesses.

The defendant also called the inventor of the ’670 patent and several other witnesses of fact to speak to the relationship between the ’670 patent and the so-called Alliance Pipeline, a pipeline between Northwest Alberta and Chicago, Illinois, which the defendant had a role in developing and which it argues employs the technology of the patent. These witnesses also testified as to the disputed confidentiality of one of the prior art documents that the plaintiffs had been relying upon in connection with anticipation and obviousness arguments.

However, during the course of trial, the plaintiffs withdrew their reliance upon that document. As such, the confidentiality dispute and the evidence related to that issue need not be addressed any further. The evidence of the witnesses necessary to address the remaining issues in this action will be canvassed later in these reasons. III. Issues [ 13 ] The issues to be decided by the Court in this action, ordered in the same manner as presented by the plaintiffs in their closing submissions, are as follows: A. Are claims 9–10 of the ’670 patent invalid based on the following grounds: i. Overbreadth; ii.

Inutility; iii. Anticipation; or iv. Obviousness? B. Are claims 1–8 of the ’670 patent invalid for obviousness? C. Are claims 1–10 of the ’670 patent invalid based on the following grounds: i. Insufficiency; or ii. Unpatentable subject matter? [ 14 ] The allegations of invalidity necessarily require identification of the person of ordinary skill in the art (the Skilled Person), to

whom the ’670 patent is directed, and construction of the claims of the ’670 patent prior to consideration of the invalidity allegations. The obviousness allegation also raises a particular legal issue in the present case, surrounding whether the statutory amendment enacting

section 28.3 of the Act removed the requirement, found in relevant jurisprudence, that prior art references proposed by the plaintiffs in support of the obviousness allegations be locatable by a reasonably diligent search. IV. Witnesses [ 15 ] Each of the parties introduced expert evidence in support of its respective positions on construction of the claims of the ’670 patent and the various grounds of invalidity that are at issue, including opining on the credentials and characteristics of the Skilled Person, the relevant prior art, and the common general knowledge (CGK) of the Skilled Person.

Each of the experts was found by the Court, without objection from the opposing party, to be qualified to provide opinions on all these issues. While the experts’ evidence will be considered in more detail in connection with the individual issues to which it relates, the following are my general observations as to the reliability of the individual experts. A. Dr. Stephen Ramsay [ 16 ] The first expert to testify on behalf of Aux Sable was Dr. Stephen Ramsay. Dr. Ramsay is a professional engineer and senior consultant at an engineering consulting firm.

His educational qualifications include a PhD in Engineering and Applied Mathematics and Theoretical Physics (Fluid Mechanics) from the University of Cambridge. Dr. Ramsay was an Assistant Professor, and later Adjunct Professor, at the University of Western Ontario as of the claim date and publication date of the ’670 patent. He has more than 35 years of experience in consulting, teaching, and research related to pipelines, oil and gas, energy, transportation and related industries. Dr.

Ramsay submitted a principal report setting out his opinions on the issues in this action and a further report in reply to the reports of JL Energy’s experts. [ 17 ] JL Energy submits that, in areas of conflicting evidence, Dr. Ramsay’s opinion should be given little weight. JL Energy argues that during cross-examination, Dr. Ramsay acknowledged multiple errors he had made in his expert reports, retracted multiple statements, and offered evidence contradictory to his reports. In support of this position, JL Energy also refers the Court to commentary by the British Columbia Supreme Court (B.C.S.C.) on Dr.

Ramsay’s role as an expert witness in Drader v. Abbotsford (City) , 2012 BCSC 873 , 98 M.P.L.R. (4th) 216 ( Drader ). The B.C.S.C. found, at paragraphs 238 and 241, that Dr. Ramsay had tailored his calculations and analysis to achieve a particular outcome. [ 18 ] While I note these comments by the B.C.S.C., I agree with Aux Sable’s submission that, in considering concerns of the sort raised in Drader , what matters is whether Dr. Ramsay’s evidence demonstrates similar concerns in the present action. I find that it does not. Rather, as JL Energy notes, in cross-examination Dr.

Ramsay made a number of concessions surrounding the evidence in his reports. I did not regard his testimony as argumentative or as demonstrating advocacy for the parties that had retained him. However, the concessions Dr. Ramsay made in cross-examination will be taken into account where relevant to considering the individual issues to which that evidence relates. B. Mr. Graeme King [ 19 ] Aux Sable’s second expert, Mr. Graeme King, is a pipeline engineering specialist with more than 45 years’ experience as a professional engineer.

He has designed, constructed and maintained pipelines and facilities for transporting natural gas, dense phase gas, liquefied natural gas, oil, bitumen, sulphur, and steam in Canada, the United States, Mexico, Russia, Kazakhstan, the Middle East, and Australia. Mr. King has published in this area, including on the dense phase (a concept which will be explained later in these reasons), and has presented at numerous conferences. Like Dr. Ramsay, Mr.

King submitted a principal report setting out his opinions on the issues in this action and a further report in reply to the reports of JL Energy’s experts. [ 20 ] Although JL Energy does not dispute Mr. King’s credentials, it argues that he acted as an advocate for Aux Sable’s positions. JL Energy submits that, throughout his cross-examination, Mr.

King was difficult, inflexible, and intransigent, refusing to answer simple questions, and being intent on reiterating his views, regardless of whether those views were responsive to the questions he was asked. [ 21 ] I find merit to JL Energy’s characterization of Mr. King’s evidence. On many occasions throughout his cross-examination, Mr. King did not answer relatively straightforward questions, at least when initially asked, and presented as instead being focused on advancing his opinions.

For example, when asked whether the gas mixtures identified in one of the papers he authored contained butane in concentrations exceeding a particular concentration disclosed by the ’670 patent, rather than answering the question, Mr. King took issue with JL Energy’s counsel’s reading of the patent. When asked to confirm that the same paper does not expressly refer to the zMw product as a parameter to indicate when hydraulic efficiency gains are achieved though the deliberate addition of C 2 and/or C 3 , Mr.

King did not initially answer the question and instead provided an explanation of why measuring pressure loss in a pipeline amounted to the same thing. [ 22 ] Similarly, when asked to confirm that his papers did not compare the zMw product for untreated gas versus gas to which C 2 or C 3 had been added, Mr. King described the role of that product in a flow equation, effectively reiterating one of the principal opinions expressed in his expert report, rather than answering the question asked.

When asked whether he was aware of the ’670 patent’s description of features of the so-called “energy hill” (which will be further explained later in these reasons) as attributable to the rate of decrease of the z factor overcoming the rate of increase in density, Mr. King took issue with the patent’s explanation rather than answering the question asked. [ 23 ] There are other examples of this pattern in Mr. King’s cross-examination. Despite Mr.

King’s undoubted experience and expertise in the technical areas that are the subject of this action, the concerns described above do raise reservations about relying on his opinions in connection with the issues where the parties’ respective experts diverge. C. Dr. Mukul Sharma

[ 24 ] Aux Sable’s third expert, Dr. Mukul Sharma, is a professor, and past department chair, in the Hildebrand Department of Petroleum and Geosystems Engineering at the University of Texas. Dr. Sharma has taught natural gas engineering for over 32 years, including courses relating to the transportation of natural gas by pipeline and fundamental knowledge for engineers interested in such transportation. He has published more than 400 articles and conference proceedings and holds over 23 patents. Dr.

Sharma is also the recipient of prestigious technical awards presented by the Society of Petroleum Engineers (SPE). [ 25 ] JL Energy argues that Dr. Sharma’s evidence should be given little weight, submitting that he prepared his report with a fundamental misunderstanding of the legal construct of the Skilled Person. JL Energy also takes the position that Dr. Sharma lacks pipeline experience relevant to the opinions he sought to tender. [ 26 ] I find no deficit in Dr. Sharma’s experience which would adversely affect the weight to be afforded to his evidence. JL Energy refers to Dr.

Sharma’s testimony that he is not familiar with high pressure pipelines that intentionally add C 2 and C 3, in the manner contemplated by the ’670 patent, and that his experience relates to pipelines in Texas. I do not find those limitations on Dr. Sharma’s experience to undermine his qualifications to speak to the technical issues in this action. I also note that I found Dr.

Sharma to present as a knowledgeable and articulate witness, without demonstrating defensiveness or a lack of objectivity in the manner in which he responded to questions in cross-examination. [ 27 ] However, I do find merit to the concern that JL Energy raises about Dr. Sharma’s understanding of the Skilled Person. Dr. Sharma was clear in his testimony that his conception of the Skilled Person was an engineer with an average level of inventiveness. This conflicts with the description of the Skilled Person by Mr. Justice Rothstein, in Apotex Inc. v.

Sanofi-Synthelabo Canada Inc. , 2008 SCC 61 , [2008] 3 S.C.R. 265 ( Sanofi ), at paragraph 52 , as a “technician skilled in the art but having no scintilla of inventiveness or imagination” . As pointed out by Aux Sable, this concern arises in the context of an obviousness analysis, as it is the non-inventive technician through whose eyes Justice Rothstein explains the question of obviousness must be assessed. As will be addressed later in these reasons, Dr.

Sharma’s incorrect understanding of the characteristics of the notional Skilled Person is relevant to the weight that can be afforded to certain of his opinions in connection of the obviousness of the ’670 patent. However, I do not find this misunderstanding to undermine the weight to be afforded to other aspects of Dr. Sharma’s evidence. D. Dr. Wayne Monnery [ 28 ] JL Energy called two experts. The first to testify, Dr. Wayne Monnery, is a registered professional engineer and currently the principal process engineer for Chem-Pet Process Technology Ltd., which position he has held since 1996. Dr.

Monnery’s educational qualifications include a PhD in Chemical and Petroleum Engineering from the University of Calgary. He has also lectured and instructed at a number of schools and was an adjunct associate professor at the University of Calgary, Schulich School of Engineering, between 1999 and 2016, lecturing on topics including thermodynamics, phase separator design, and gas processing. Dr.

Monnery has over 30 years’ experience teaching, consulting and conducting research in the area of thermodynamics and oil and gas processing. [ 29 ] I should explain at this juncture the one dispute that arose at trial surrounding expert qualifications. While Dr. Monnery’s expertise as described above was agreed, and Aux Sable did not object to him being qualified to give expert evidence in relation to the various issues that are before the Court, JL Energy sought to include among his qualifications that Dr. Monnery is qualified to give expert evidence with respect to the transportation of gas by pipeline.

In that respect, JL Energy adduced evidence from Dr. Monnery as to his role in teaching undergraduate and graduate courses that included instruction in such transportation. Aux Sable objected to this area of qualification, not because Dr. Monnery does not have the requisite expertise, but because all his teaching in this area was subsequent to November 1996 and therefore later than the date for assessing the prior art relevant to this action. [ 30 ] I ruled at trial that Dr. Monnery’s qualifications included this disputed area, with Aux Sable entitled to cross-examine Dr.

Monnery and subsequently adduce arguments related to the weight that should be afforded to his evidence arising from the timing within which his expertise was acquired. While Aux Sable did subsequently raise arguments about the reliability of Dr. Monnery’s evidence, the argument about the timing of acquisition of his expertise was not pursued. [ 31 ] Aux Sable argues that Dr. Monnery was a combative witness and provided unresponsive answers to cross-examination questions in an effort to advocate for JL Energy’s positions. I agree that there were aspects of Dr.

Monnery’s cross-examination that raise concern about him acting somewhat as an advocate for JL Energy. Aux Sables’ counsel identified in cross-examination areas where he gave evidence that appeared prompted by consideration of the impact of his evidence rather than the particular questions being asked. For instance, when questioned about a figure in one of the prior art references relevant to the plaintiff’s anticipation allegations, Dr. Monnery volunteered his opinion that this figure was not intended to be read in conjunction with another figure.

This answer was not responsive to the question asked and appeared intended to respond to what Dr. Monnery understood to be one of the plaintiffs’ anticipation arguments. [ 32 ] Similarly, when questioned about another prior art reference that involved combining two different natural gas mixtures, Dr. Monnery referred to the term “added” , used by Aux Sable’s counsel in posing the question, as “a little bit of a loaded gun” .

In the course of the same line of questioning, when asked by counsel to confirm that, as one moved through the mixtures in the prior art reference, the concentrations of natural gas liquids increased, Dr. Monnery responded that there was an increase but not a material one. Counsel pointed out that he had not asked about the materiality of the increase, Dr.

Monnery confirmed that he had not stated in his report that there was no material increase, and he confirmed that he had heard the testimony of other experts on whether there was a material increase. [ 33 ] I agree with Aux Sable’s argument that testimony of this nature demonstrates more of an effort to advance a position than the Court would prefer to see in the experts appearing before it. I do not find this concern with Dr. Monnery’s evidence to have permeated his testimony sufficiently to undermine the reliability of his evidence.

However, I do take it into account in assessing the weight to be afforded to his evidence in areas where the opinions of the parties’ experts diverge. [ 34 ] Aux Sable also notes that Dr. Monnery testified in cross-examination that he ascribed some level of inventiveness to the Skilled Person, describing the person as “not particularly inventive” or “not very inventive” . This is an error similar to that made by Dr. Sharma, as described above. The extent to which this affects the weight to be ascribed to Dr.

Monnery’s opinions, in connection with the obviousness analysis, will be addressed when that allegation is considered later in these reasons.

[ 35 ] Aux Sable also submits that Dr. Monnery was unaware of and did not cite the legal instructions he was meant to apply, that he improperly relied on work outside of his affidavit, that he misapplied fundamental legal principles including admitting that his Skilled Person did not read all of the prior art in this case, and that he was instructed not to conduct his own independent search of the literature. To the extent necessary to address the components of the invalidity allegations to which these aspects of Dr.

Monnery’s evidence relate, those arguments can be considered in connection with the analysis of such allegations. E. Mr. Mark Ryan [ 36 ] JL Energy’s second expert, Mr. Mark Ryan, is a registered professional engineer and works for OEL Projects Ltd., with which he has been employed since 1993, currently as Vice President of Process Engineering, which position he has held for the past 11 years. He holds a Bachelor of Science in Chemical Engineering from the University of Calgary. During his time with OEL Projects Ltd., Mr.

Ryan has executed over 11 000 projects, many of which involved pipeline design either as a primary scope or in association with related facility work. [ 37 ] I found Mr. Ryan to be a forthright and straightforward witness, who testified clearly, did not appear to be defensive or to be advocating for either the party which had retained him or his own opinions. He readily acknowledged certain errors in his expert report. While those errors are relevant to the extent they relate to portions of his evidence that affect the analysis in these reasons, I generally find Mr.

Ryan to be a reliable witness, subject to certain specific concerns raised by Aux Sable as described below. [ 38 ] In challenging Mr. Ryan’s evidence, Aux Sable submits that he did not properly set out in his expert report the legal instructions which he received and was relying upon.

They also argue that he admitted to errors in software modelling that he performed, omitted from his report certain results that he was required to include pursuant to the Code of Conduct for Expert Witnesses prescribed by rule 52.2 of the Federal Courts Rules , SOR/98-106 , and failed to conduct his own prior art search before giving his opinion. To the extent necessary, these arguments can be addressed when considering the portions of the invalidity allegations to which the relevant aspects of Mr. Ryan’s evidence relate. [ 39 ] As with some of the other witnesses, concerns have also been raised about Mr.

Ryan’s approach to the role of the Skilled Person. Mr. Ryan stated in cross-examination that he considered himself a proxy for the Skilled Person, in terms of academic and career experience at the relevant time in 1996, and that in his expert report he advanced opinions based on his own personal views, applying those views to the Skilled Person. In re-examination, Mr. Ryan also confirmed that he employed

definitions of the Skilled Person supplied by JL Energy’s counsel. JL Energy submits that Mr. Ryan’s evidence indicates only that he is applying his own academic and work experience, which at the relevant time aligned with that of the Skilled Person, not that he is treating his own experience entirely as a proxy for the Skilled Person. [ 40 ] I have considered JL Energy’s submission but agree with Aux Sable’s position that this aspect of Mr. Ryan’s evidence potentially raises concerns. I do not find the re-examination evidence to particularly assist with this issue.

The fact that he was working with an accurate legal definition of the Skilled Person does not remove the question raised by his evidence that, at least to some extent, he relied on his personal views when undertaking tasks assigned by patent law to the Skilled Person. That question is whether his approach undermines the opinions expressed by Mr. Ryan in connection with those tasks. I consider that question later in these reasons where it has the potential to bear upon areas in which the opinions of the parties’ experts diverge. F.

Fact Witnesses [ 41 ] As previously noted, JL Energy called as witnesses of fact the inventor of the ’670 patent, Mr. Ian Morris, and several other witnesses to speak to the relationship between the ’670 patent and the Alliance Pipeline. I found no issues with the credibility of any of these witnesses. However, their evidence was offered as relevant to secondary factors that can be considered in assessing the obviousness of the ’670 patent and, as will be explained below, I do not find it necessary to move to secondary factors to arrive at my conclusions on obviousness.

As such, no further comment is required in relation to the witnesses of fact. V. The Skilled Person [ 42 ] As noted above, in relation to some of the parties’ experts’ opinions, there are concerns about the particular characteristics of the Skilled Person or the manner in which those characteristics were invoked by the particular expert. However, as between the parties, there does not appear to be any substantive disagreement as to the characteristics assigned by patent law to the Skilled Person.

The plaintiffs refer the Court to the following extract from the description of the Skilled Person, expressed in the particular context of the Skilled Person’s role in an obviousness analysis, in Apotex Inc. v. H. Lundbeck A/S , 2013 FC 192 , 111 C.P.R. (4th) 171, at paragraph 83 , quoting Lilly Icos LLC v. Pfizer Ltd. , [2000] EWHC Patents 49: The question of obviousness has to be assessed through the eyes of the skilled but non-inventive man in the art. This is not a real person. He is a legal creation. He is supposed to offer an objective test of whether a particular development can be protected by a patent.

He is deemed to have looked at and read publicly available documents and to know of public uses in the prior art. He understands all languages and dialects. He never misses the obvious nor stumbles on the inventive. He has no private idiosyncratic preferences or dislikes. He never thinks laterally.

He differs from all real people in one or more of these characteristics…. [ 43 ] To similar effect, JL Energy’s experts state that they were instructed by counsel for JL Energy to assume that the Skilled Person is a technician who has not a scintilla of inventiveness or imagination, is a paragon of deduction and dexterity, is wholly devoid of intuition, is not a dullard, and is a competent worker who keeps up to date with the relevant literature. [ 44 ] There is also broad, although not complete, agreement among the parties’ experts as to the credentials of the particular Skilled Person to whom the ’670 patent is directed.

Dr. Ramsay described the Skilled Person as an individual with an undergraduate degree in applied science, engineering or a related area and 1–3 years of hands-on work experience related to the transportation of natural gas by pipeline. Mr. King described the Skilled Person, in similar terms, as an individual with an undergraduate degree in engineering or applied science with undergraduate courses in thermodynamics and fluid flow and 1–3 years of hands-on work related to the pipeline transmission of fluids including natural gas. Mr.

King states that the Skilled Person may also have worked for a few years designing and

optimizing pipelines for the transportation of fluids like natural gas or possibly oil. [ 45 ] Similar to the plaintiffs’ other two experts, Dr. Sharma described the Skilled Person as an individual with an undergraduate degree in applied science, engineering or a related area with 1–3 years of practical experience related to pipeline transportation of natural gas. However, Dr.

Sharma also added a further description, stating that the Skilled Person may alternatively have an advanced degree related to the transportation of natural gas by pipeline and less work experience. [ 46 ] Turning to the defendant’s experts, Dr. Monnery states in his expert report that he was instructed by JL Energy’s counsel to adopt Mr. King’s description of the credentials of the Skilled Person, with the exception of the possibility that the Skilled Person may have worked for a few years designing and optimizing pipelines for the transportation of fluids like natural gas or possibly oil.

He also states that he was instructed to disregard Dr. Sharma’s description of the Skilled Person’s credentials, which includes the possibility of having an advanced degree related to the transportation of natural gas by pipeline. [ 47 ] Similarly, Mr. Ryan states in his expert report that he was instructed by JL Energy’s counsel to adopt a particular description of the credentials of the Skilled Person, which description appears to align with the instructions provided to Dr.

Monnery. [ 48 ] Notwithstanding some minor divergence in the above descriptions of the credentials of the Skilled Person, I agree with the submission of Aux Sable that JL Energy has not identified any difference in the knowledge of the Skilled Person relevant to this action that would depend on which description is preferred. Indeed, I note the statement by JL Energy’s expert Dr. Monnery that, even if he were to adopt the elements of the Skilled Person’s credentials that he was instructed by JL Energy’s counsel to disregard, this would not change the opinions set out in his report.

For purposes of these reasons, as neither party has identified anything material that turns on this issue, I adopt the description of the Skilled Person which is in substance common to the reports of all the experts, i.e. an individual with an undergraduate degree in engineering or applied science with undergraduate courses in thermodynamics and fluid flow and 1–3 years of hands-on work experience related to the pipeline transmission of fluids including natural gas. VI.

Claim Construction [ 49 ] Having identified the Skilled Person, the next task is to identify how the Skilled Person would construe the claims of the ’670 patent. There does not appear to be any disagreement between the parties surrounding the principles applicable to claim construction. As explained in Whirlpool Corp. v. Camco Inc. , 2000 SCC 67 , [2000] 2 S.C.R. 1067, at paragraphs 43 and 49 , the claims of a patent are to be construed once and for all purposes prior to consideration of validity issues. In Eli Lilly Canada Inc. v.

Mylan Pharmaceuticals ULC , 2016 FCA 119 , [2017] 2 F.C.R. 280 ( Mylan ), at paragraph 39 , the Federal Court of Appeal explained the process of claim construction as follows: … The rules of patent construction preclude reference to the specification when the claims are clear, and also improper if it varies the scope of the claims: Hughes and Woodley on Patents , at page 312: In construing a patent, the claims are the starting point. The claims alone define the statutory monopoly and the patentee has a statutory duty to state, in the claims, what the invention is for which protection is sought.

In construing the claims … recourse to the rest of the specifications is (1) permissible to assist in understanding the terms used in the claims; (2) unnecessary where the words and plain and unambiguous and (3) improper to vary the scope or ambit of the claims. [ 50 ] The evidence of experts offered by both parties confirms that the claims are clear and unambiguous. As such, the claims are to be construed by reference to the words of the claims themselves. Reproduced in full, the 10 claims of the ’670 patent read as follows: 1. A method of transporting natural gas by pipeline, which comprises: (

a) adding to such natural gas sufficient of at least one C2 or C3 hydrocarbon or a mixture of C2 and C3 hydrocarbons such so the hydrocarbon, together with the C2 and C3 hydrocarbon (if any) originally in the natural gas, forms a resulting mixture with a total C2 or C3 hydrocarbon content which is sufficient, at the pressure and temperature to be used for transporting, to reduce the product of the z factor and the average molecular weight of the resulting mixture to a level lower than the product of the z factor and the average molecular weight of the untreated natural gas, and (

b) transporting such resulting mixture by pipeline at a temperature of between -40° and +120° Fahrenheit and pressure greater than 1000 psia, said pressure and temperature being chosen so the resulting mixture has no coherent liquid phase at the temperature and pressure of transmission. 2. A method as claimed in claim 1, where the hydrocarbon is selected from (

a) between 26 and 40% of at least one C2 compound if the pressure is about 1000 psia, declining smoothly to about 6% to 15% of said C2 compound if the pressure is about 2200 psia, or (

b) between 12% and 5% of a C3 compound, if the pressure is about 1000 psia, declining smoothly to the C3 amount which will not cause liquefaction at the pressure used when the pressure is above 1000 psia. 3. A method as claimed in either claim 1 or claim 2, in which there is not more than 1% by volume of carbon dioxide in the resulting mixture. 4. A method as claimed in claim 1 or claim 2, in which there is not more than 2% nitrogen in the resulting mixture. 5. A method as claimed in any of claims 1 – 4, in which the temperature at which the resulting mixture is transmitted is between - 20°F and +120°F. 6.

A method as claimed in any of claims 1 – 4, in which the pressure at which the resulting mixture is transmitted is between 2160

psia and 1150 psia. 7. A method as claimed in any of claims 1 – 6 in which the C2 hydrocarbon added to the natural gas is ethane. 8. A method as claimed in any of claims 1 – 7 in which the C3 hydrocarbon added to the natural gas is propane. 9. A gas mixture, for use in a pipeline at a pressure greater than 1,000 psia and a temperature of from -40 degrees F to +120 degreesF, which comprises: (

a) from 68 to 92% by volume of methane; (

b) from 6 to 35% by volume of ethane; (

c) from 0 to 9% by volume of propane; (

d) from 0% by volume of C4 hydrocarbons to a percentage of C4 hydrocarbons which does not liquify at the pressure used; (

e) not more than 1% of carbon dioxide; (

f) not more than 2% of nitrogen, the total being 100%, and such mixture being completely gaseous with no liquid phase at thetemperature and pressure of intended operation. 10. A gas mixture as claimed in claim 9, said gas mixture being at a pressure of 1000-2200 psia and a temperature of from -20 degreesF to +120 degrees F. [51] The parties and their respective experts now appear to be substantially in agreement as to the construction of the claims.

Mostmaterial to the issues in this action, both parties agree that the independent claim 1, and claims 2 to 8 which depend upon claim 1,include the following elements: A. The intentional addition to natural gas of a C2 hydrocarbon and/or a C3 hydrocarbon; and B. Ensuring that the product of the molecular weight (Mw) and the z factor of the resulting gas mixture is lower than the zMwproduct prior to such addition. [52] I therefore adopt the above agreement between the parties related to the construction of claims 1–8.

Prior to trial, the partiesappeared to disagree on claim construction with respect to claims 9 and 10. JL Energy took the position that those claims include thesame two elements as described in the preceding paragraph, i.e. intentional addition of C2 and/or C3 and evaluation of the resultingchange in zMw. Aux Sable’s experts opined that claims 9 and 10 claim gas mixtures for transport in a pipeline, with certain composition,pressure and temperate ranges, and without any liquid phase present in the gas mixture, but do not include the two elements of adding C2and/or C3 and evaluating zMw.

However, this disagreement was resolved by the conclusion of trial. In cross-examination, JL Energy’sexperts identified no disagreements with this aspect of the claim construction by Aux Sable’s experts, and JL Energy’s closing argumentconfirmed no such disagreement. [53] I also note that I agree it would be improper to incorporate into the construction of claims 9 and 10 the requirements of claim 1related to adding C2 and/or C3 and the evaluation of the resulting change in zMw. As explained by Justice Gauthier in Eli Lilly andCompany v.

Apotex Inc., 2009 FC 991, 80 C.P.R. (4th) 1 (Eli Lilly), at paragraph 123: … If, by construing the claim, one were to limit or incorporate the elements of one independent claim into the elements of anotherindependent claim, one would disregard the right of the inventors to adopt different ways of defining their monopoly and describingdifferent aspects of an invention, which may or may not be too limited or too wide. [Footnote omitted.] [54] I therefore adopt the construction of claims 9–10 provided by Aux Sable’s experts, i.e. that claims 9 and 10 claim gas mixturesfor transport in a pipeline, with certain composition, pressure and temperate ranges, and without any liquid phase present in the gasmixture. [55] JL Energy raises an argument to the effect that Aux Sable’s experts did not conduct an essential elements analysis with respect toclaim 9 and 10, but this argument relates to the allegation of overbreadth and will be addressed when considering that ground ofinvalidity below.

VII. Are claims 9–10 of the ’670 patent invalid based on the following grounds? A. Overbreadth [56] Subsection 27(4) of the Act provides that a patent’s specification must end with a claim or claims defining distinctly and inexplicit terms the subject matter of the invention for which an exclusive privilege or property is claimed. Aux Sable refers the Court tothe explanation, by the Supreme Court of Canada in <I>B.V.D.</I> Company v.

Canadian Celanese Ltd., (SCC),[1937] S.C.R. 221, at page 237, as to how a patent can be invalid due to overbreadth of its claims: In the Canadian patent involved in this appeal before us the inventor did not state in his claims the essential characteristic of the actualinvention though it does appear in the claims in his British and United States patents. No explanation is offered. We are invited to readthrough the lengthy specification and import into the wide and general language of the claims that which is said to be the real inventivestep disclosed. But the claims are unequivocal and complete upon their face.

It is not necessary to resort to the context and as a matter ofconstruction the claims do not import the context. In no proper sense can it be said that though the essential features of the invention isnot mentioned in the claims the process defined in the claims necessarily possesses that essential feature. The Court cannot limit the

claims by simply saying that the inventor must have meant that which he has described. The claims in fact go far beyond the invention. Upon that ground the patent is invalid. [ 57 ] This principle has been described more recently by the Federal Court of Appeal, in Amfac Foods Inc. v. Irving Pulp & Paper, Ltd. (1986), 12 C.P.R. (3d) 193 (F.C.A.) ( Amfac Foods ), at paragraph 32 , as follows: .… The weakness in the claim in issue here is that the claim failed to mention essential elements disclosed as part of the invention.

As I see it, therefore, Consolboard cannot be relied on for the proposition espoused by Appellants’ counsel. While there can be no question that a patent must be fairly construed, if such fair construction reveals that an essential element (in this case a limitation) has not been claimed, the omission is fatal to the claim’s validity. [ 58 ] Aux Sable’s argument, in relation to claims 9 and 10 of the ’670 patent, is that the claims are broader than the invention disclosed in the patent.

As claims 9 and 10 claim natural gas mixtures regardless of whether ethane or propane was added to the mixture and regardless of whether the zMw product is reduced after such addition. Aux Sable argues that the elements necessary to limit claims 9 and 10 to the invention of the ’670 patent are missing. [ 59 ] In support of this position, Aux Sable refers the Court to the “Summary of the Invention” contained within the specification of the ’670 patent, which reads as follows:

Summary of the Invention It has now been found that, at pressures over 1000 psia, it is advantageous to add to natural gas an additive which is a C 2 or C 3 hydrocarbon compound or a mixture of such additives.

Above a lower limit (which varies with the additive being added and the pressure), this results in a smaller product of the z factor times the average molecular weight of the gas (hereinafter called the zMw product) than would exist with methane alone, therefore leading to a decrease in the amount of power needed to pump the mixture or to compress it. [ 60 ] Aux Sable also relies on the evidence of its experts. Dr.

Sharma states in his report that the Skilled Person reading the ’670 patent as a whole would understand that the invention disclosed in the patent generally relates to the addition of a C 2 and/or C 3 hydrocarbon to natural gas, ensuring that the product of the average molecular weight and the z factor was lower for the resulting mixture, and achieving efficiencies by transporting the resulting mixture at the claimed pressures and temperatures. Dr.

Sharma opines that claims 9 and 10 of the ’670 patent are broader than the invention described in the patent, because those claims do not require the addition of C 2 and/or C 3 hydrocarbons, do not require a comparison of the gas mixture before and after the addition, and do not require that the zMw of the mixture be reduced as a result of such addition. [ 61 ] Dr. Ramsay expresses similar conclusions in his report.

I find nothing in the cross-examinations of Aux Sable’s experts, or in the responding reports prepared by JL Energy’s experts, which meaningfully challenges the analysis or conclusions expressed by Dr. Sharma or Dr. Ramsay in relation to the overbreadth of claims 9 and 10. [ 62 ] JL Energy raises two principal arguments in response to this particular allegation of invalidity. First, it questions whether Amfac Foods remains good law, arguing that Aux Sable’s overbreadth allegation amounts to an effort to apply a version of the promise doctrine which the Supreme Court of Canada in AstraZeneca Canada Inc. v.

Apotex Inc. , 2017 SCC 36 , [2017] 1 S.C.R. 943 ( AstraZeneca ) found not to be good law. Second, JL Energy submits that Aux Sable has failed to provide the requisite evidentiary support for its argument, because its experts have not conducted an essential elements analysis necessary to support its overbreadth allegation. [ 63 ] In relation to the impact of AstraZeneca upon Amfac Foods , JL Energy notes the cautioning by Justice Phelan in Hospira Healthcare Corporation v.

Kennedy Trust for Rheumatology Research , 2018 FC 259 ( Hospira Healthcare ), at paragraph 258 , that it would be inconsistent with AstraZeneca to have the promise doctrine resurface by importing it into an overbreadth analysis. I accept this point but do not regard it as supporting a conclusion that the law surrounding overbreadth as expressed in Amfac Foods has been changed by AstraZeneca . Indeed, AstraZeneca expressly states at paragraph 46 that an overly broad claim may be declared invalid.

The jurisprudence also demonstrates allegations of overbreadth being considered subsequent to the decision in AstraZeneca (see Apotex Inc. v. Shire LLC , 2018 FC 637 , at paragraphs 146–148 ). [ 64 ] JL Energy submits that the arguments raised by Aux Sable in support of its overbreadth allegation are similar to those it asserts in connection with its inutility allegation and would be more appropriately addressed through an inutility analysis. I agree that there are similarities in the arguments. However, in Bombardier Recreational Products Inc. v.

Arctic Cat, Inc. , 2018 FCA 172 , 159 C.P.R. (4th) 319, at paragraph 64 , the Federal Court of Appeal cautioned against intermingling different invalidity allegations. I will address the inutility allegation in the next

section of these reasons but must separately address Aux Sable’s arguments surrounding overbreadth. [ 65 ] The thrust of JL Energy’s submission, to the effect that Aux Sable’s arguments represent an improper effort to import the promise doctrine into an invalidity allegation, is that Aux Sable is asking the Court to find claims 9–10 invalid because they do not meet the promise of a reduction in the zMw product resulting from addition of C 2 and/or C 3 hydrocarbons.

JL Energy submits that, independent of that method disclosed by the ’670 patent for achieving efficient transport of natural gas, the patent discloses in a particular table in the specification a set of ranges for certain natural gas constituents, as well as temperature and pressure ranges, described as “the preferred composition of the resulting gas” .

JL Energy argues that, as claims 9–10 are not broader than this preferred composition, they are not broader than the invention disclosed by the patent. [ 66 ] In response to this argument, Aux Sable submits that JL Energy is advancing this position without any evidentiary support from their experts. I agree with this submission. JL Energy’s experts do not opine that the invention disclosed by the ’670 patent is or includes the range of compositions, temperatures and pressures set out in the table of the specification relied upon by JL Energy.

Rather, the unchallenged evidence before the Court as to the nature of the invention disclosed is as described above, which includes the addition of a C 2 and/or C 3 hydrocarbon and ensuring that the zMw product is lower for the resulting mixture. I also find no merit to JL Energy’s submission that Aux Sable is improperly attempting to import the promise doctrine into an overbreadth allegation. Aux Sable’s argument

is not that the invention fails to satisfy a promise made in the specification, but rather that the claims are broader than the invention disclosed in that specification, as interpreted by the experts though the eyes of the Skilled Person. [ 67 ] I also note JL Energy’s submission that Aux Sable has not presented argument or evidence that the inventors of the ’670 patent did not use the zMw parameter when selecting the ranges specified in claims 9 and 10. This submission is perhaps more applicable to the inutility allegation and will be considered in analysing that argument as well.

However, I have also taken it into account in considering JL Energy’s overbreadth arguments, because of the possibility that it could support a conclusion that the use of the zMw parameter, while not explicitly stated in claims 9 and 10, was determinative of the ranges specified in those claims. [ 68 ] Relevant to that question, Dr.

Sharma states in his main report, albeit in the context of the utility analysis, that, because of the very wide range of temperatures, pressures and concentrations set out in claims 9–10, those claims include very inefficient selections, i.e. selections which would not achieve a more efficient transportation of a gas mixture. [ 69 ] I appreciate that the plaintiffs bear the burden of proving their allegations of overbreadth. I also recognize that Dr. Sharma has not included in his report calculations to support his conclusion that the ranges of claims 9–10 include inefficient selections.

However, this conclusion appears to be unchallenged by JL Energy’s experts. Indeed, in responding to the relevant paragraph of Dr. Sharma’s report, Dr. Monnery refers to the value of using zMw as a guide to determining which conditions and compositions would be efficient. Dr. Monnery refers to the inventors showing and discussing inefficient versus efficient selections in the specification and states his opinion that the Skilled Person would have understood that the concept of using zMw as a guide was also applicable in claims 9 and 10. I read this evidence not as disagreeing with Dr.

Sharma’s conclusion but as explaining that the zMw parameter is to be used to avoid inefficient selections within the ranges of claims 9–10.

I therefore find that the inventors of the ’670 patent did not use the zMw parameter when selecting the ranges specified in claims 9 and 10 and that concerns about overbreadth of those claims cannot be eliminated on that basis. [ 70 ] I turn now to JL Energy’s second argument, that Aux Sable failed to provide the requisite evidentiary support for its overbreadth allegation, because its experts have not conducted an essential elements analysis necessary to support that allegation.

JL Energy relies on the language from Amfac Foods quoted above, which I repeat for ease of reference [at paragraph 32]: .… The weakness in the claim in issue here is that the claim failed to mention essential elements disclosed as part of the invention. As I see it, therefore, Consolboard cannot be relied on for the proposition espoused by Appellants’ counsel.

While there can be no question that a patent must be fairly construed, if such fair construction reveals that an essential element (in this case a limitation) has not been claimed, the omission is fatal to the claim’s validity. [Emphasis added.] [ 71 ] JL Energy submits that, in performing the required claim construction antecedent to consideration of invalidity allegations, Aux Sable’s experts did not find the elements upon which the overbreadth allegation is based (i.e. addition of C 2 and/or C 3 and measurement of zMw) to be essential elements.

In my view, this argument demonstrates a misunderstanding of the use by the Federal Court of Appeal of the phrase “essential element” in the above passage from Amfac Foods . [ 72 ] I appreciate that, as explained in Free World Trust v. Électro Santé Inc. , 2000 SCC 66 , [2000] 2 S.C.R. 1024 ( Free World Trust ), at paragraphs 20–23 , it may be necessary, for consideration of both validity and infringement allegations, to identify essential and non- essential elements of the claims of a patent in the course of the antecedent claim construction.

However, this is clearly not the same analysis that is contemplated by paragraph 32 of Amfac Foods . That paragraph refers to essential elements disclosed as part of the invention and the need to consider whether such elements are mentioned in the patent’s claims.

Such analysis does not involve whether a particular element is an essential or non-essential component of the claims (the process contemplated by Free World Trust ), but rather considers whether the element is found in the claims at all. [ 73 ] I nevertheless accept that the analysis contemplated by Amfac Foods requires that the element of the invention disclosed, which is alleged to be missing from the claims, itself be an essential element of that invention. However, in that respect, I find no evidentiary deficiency in the expert reports upon which Aux Sable relies. While Dr.

Sharma does not expressly state that the elements of the invention missing from claims 9–10 are “essential elements” , this is clearly the point being conveyed by his evidence. Indeed, in introducing his opinion on overbreadth, Dr. Sharma’s report refers to the advice he has received, presumably from Aux Sable’s counsel, that claims are overly broad if an element essential to the invention is omitted from the claims. Moreover, Dr.

Ramsay’s report expressly refers to each of the addition of C 2 and/or C 3 and the zMw limitation as an “essential limitation” that is omitted from claims 9–10. [ 74 ] In conclusion on this ground of invalidity, I find that Aux Sable has met its burden of establishing that claims 9–10 of the ’670 patent are invalid for overbreadth. Given this finding, it is not strictly necessary for me to consider other grounds of invalidity raised by the plaintiffs in relation to these claims.

However, I do so where such alternative analysis is logical and beneficial to perform, in case I have erred in the course of any of my reasoning. B. Inutility [ 75 ] Pursuant to the definition of “invention” in the Act [at

section 2 ], an invention must be “useful” . Aux Sable submits that claims 9 and 10 of the ’670 patent are invalid for lack of utility, because they lack the limitation, as found in claims 1–8, of adding C 2 and/or C 3 hydrocarbons and ensuring a reduction of the zMw product in the resulting gas mixture.

Aux Sable argues that claims 9 and 10 therefore claim broad gas compositions that will result in inefficient transport and are accordingly useless and invalid. [ 76 ] The law now applicable to allegations of inutility is set out as follows in AstraZeneca [at paragraphs 52–55]: The words in s. 2 of the Act ground the type of utility that is pertinent by requiring that it is the subject-matter of an invention or improvement thereof that must be useful.

For the subject-matter to function as an inventive solution to a practical problem , the invention must be capable of an actual relevant use and not be devoid of utility. As stated by Justice Binnie in AZT , a patent “is a method by which inventive solutions to practical problems are coaxed into the public domain by the promise of a limited monopoly for a limited time” (para. 37 (emphasis added)).

Utility will differ based on the subject-matter of the invention as identified by claims construction. Thus, the scope of potentially acceptable uses to meet the s. 2 requirement is limited — not any use will do. By requiring the usefulness of the proposed invention to be related to the nature of the subject-matter, a proposed invention cannot be saved by an entirely unrelated use. It is not sufficient for an inventor seeking a patent for a machine to assert it is useful as a paperweight.

To determine whether a patent discloses an invention with sufficient utility under s. 2 , courts should undertake the following analysis. First, courts must identify the subject-matter of the invention as claimed in the patent. Second, courts must ask whether that subject- matter is useful — is it capable of a practical purpose (i.e. an actual result)? The Act does not prescribe the degree or quantum of usefulness required, or that every potential use be realized — a scintilla of utility will do.

A single use related to the nature of the subject-matter is sufficient, and the utility must be established by either demonstration or sound prediction as of the filing date ( AZT , at para. 56). [ 77 ] Aux Sable emphasizes the principle, explained in the above passage, that the requisite utility is to be measured with respect to the subject matter of the invention (see also Bristol-Myers Squibb Canada Co. v. Apotex Inc. , 2017 FCA 190 , 152 C.P.R. (4th) 265, at paragraph 35 ). [ 78 ] As previously noted, Aux Sable’s inutility arguments bear similarities to its arguments surrounding overbreadth.

The expert evidence upon which it relies is also similar. Dr. Ramsay opines in his report that the Skilled Person would understand that the subject matter of the invention claimed in the ’670 patent involves an increase in the efficiency of the transportation of a natural gas mixture, expressed alternatively as a decrease in the amount of power needed to pump the mixture or to compress it. Dr.

Ramsay further opines that the subject matter as claimed in claims 9–10 is not useful because those claims are not limited to gas mixtures that achieve any level of efficiency and include within their broad scope very inefficient gas mixtures for transportation by pipeline. [ 79 ] To similar effect, Dr. Sharma states in his report that the invention described in the ’670 patent relates to methods of transporting natural gas, using the parameters of the claims, more efficiently.

However, he opines that, because claims 9–10 do not contain the requirement of a reduction in zMw, those claims have no limitations which would require more efficient transportation. Rather, because of the very wide range of temperatures, pressures, and concentrations, very inefficient selections are included in these claims with no requirement that such inefficient selections be avoided. Dr.

Sharma therefore concludes that claims 9–10 lack utility. [ 80 ] Aux Sable submits, and I concur, that these conclusions surrounding inefficient mixtures or selections are not contradicted by the evidence of JL Energy’s experts. As explained in my analysis of the overbreadth allegation, I read Dr. Monnery’s report as explaining that the zMw parameter is to be used to avoid inefficient selections within the ranges of claims 9–10.

As the use of that parameter is absent from claims 9 and 10, his evidence supports a conclusion that those claims include inefficient compositions, temperatures and pressures, which therefore lack utility. I read Mr. Ryan’s report as being to the same effect and therefore supporting the same conclusion. [ 81 ] I appreciate that the ’670 patent is presumed to be valid and that the plaintiffs therefore bear the burden, in connection with this particular invalidity allegation, of establishing that claims 9 and 10 lack even a scintilla of utility.

However, JL Energy acknowledges that if there is any combination of composition, pressure and temperature, within the ranges prescribed by either of these claims, that lacks that scintilla of utility, then the claim is invalid.

JL Energy submits that the relevant utility is either an increased hydraulic efficiency or merely being capable of transport in a pipeline. [ 82 ] In relation to the first form of utility raised by JL Energy, increased hydraulic efficiency, my conclusion is that the evidence relied upon by Aux Sable, as described above, discharges its burden of establishing that there are inefficient combinations of gas composition, pressure and temperature within the ranges prescribed by claims 9 and 10.

As noted in my analysis of the overbreadth allegation, I recognize that Aux Sable’s experts have not included in their reports calculations demonstrating the inefficiency of a particular combination within the ranges of claims 9–10. However, their opinions on this point are clear, were not challenged in cross- examination, and are not contradicted by opinions offered by JL Energy’s experts.

Viewing utility as requiring increased efficiency, Aux Sable has established that such utility is lacking in claims 9 and 10 of the ’670 patent. [ 83 ] The second form of utility proposed by JL Energy for consideration is use in a pipeline with the compositions and under the conditions specified by claims 9 and 10. In support of that approach

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