Amfac Approach to Overbreadth Applied

Aux Sable Liquid Products LP v JL Energy Transportation Inc 2019 FC 581 Southcott J
            2,205,670

The overbreadth doctrine holds that a claim that exceeds the scope of the invention disclosed in the specification is invalid. A key question in assessing overbreadth is therefore how to determine what constitutes “the invention.” In my draft paper on Overbreadth in Canadian Law, I argue that an approach to overbreadth which focuses solely on the disclosure in assessing the nature of the invention is likely to result in arbitrary and erroneous results. I particularly criticized Amfac Foods (1986), 12 CPR (3d) 193 (FCA), as being wrongly decided, both in the result and, more importantly, in its approach. In Aux Sable, Southcott J held two claims to be invalid, primarily on the basis of overbreadth. In so holding, Southcott J relied on Amfac [57], [73], and in my view, his analysis reflects the weaknesses identified in my article. While Amfac is regularly cited for the general proposition that a claim will be invalid if overbroad, I believe that Aux Sable is the first time since Amfac that the method used in Amfac has been applied.

The invention at issue in Aux Sable relates to the transportation of natural gas by pipeline. Finding ways to pump gas more efficiently, thereby using less energy, is evidently desirable. Natural gas is primarily methane, CH4, with one carbon atom. Heavier weight hydrocarbons, such as ethane and propane are referred to as C2 and C3 hydrocarbons because they have two and three carbon atoms, respectively. Ethane and propane require more energy to transport than methane because they are heavier, but they are more compressible, which makes them easier to pump. The inventors of the 670 patent discovered that because of this tradeoff, it turns out that the right amount of heavier weight hydrocarbons can provide a net benefit, so the gas requires less energy to pump [5]-[6]. Recall that Aux Sable, the accused infringer, is the plaintiff in this impeachment action, while JL Energy, the patentee, is the defendant [10].

The key parameter for determining the energy reduction is the “zMw product” (the product of the molecular weight (Mw) and the compressibility (z) [7]). Claim 1 of the 670 patent claims a method of transporting natural gas by adding sufficient C2 and C3 hydrocarbons so as to ensure the zMw product is lowered [51]. Claims 2-8 are dependent claims particularizing various parameters. All of these claims were held to be valid [2]. Claim 9 is to the gas mixture itself, specified in terms of temperature, pressure and hydrocarbon composition. Claim 10 is dependent with further particularization. Crucially, Claims 9 and 10 do not include the two elements of adding C2 and/or C3 and evaluating zMw [52]-[54].

Both Claims 9 and 10 were held to be invalid, primarily for overbreadth [2], in the sense that it was the first ground considered by Southcott J, and he remarked that “it is not strictly necessary for me to consider other grounds of invalidity” [74], though he did so nonetheless for completeness.

Most of Southcott J’s analysis of overbreadth was spent in dismissing various objections by JL Energy, such as the argument that the promise doctrine was being improperly imported [62]-[71]. The substance of the overbreadth analysis was quite brief. The key passage from Amfac was paragraph 32, quoted by Southcott J at [57] (my emphasis):

32 … The weakness in the claim in issue here is that the claim failed to mention essential elements disclosed as part of the invention. . . . 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.

This is fine so far as it goes, but the crucial question is how to determine the essential elements of the claim. This is equivalent to defining “the invention”.

[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.

Southcott J then observed that the evidence was to the effect that the addition of C2 and/or C3 and the zMw limitation were essential elements: for example, “Dr. Ramsay’s report expressly refers to each of the addition of C2 and/or C3 and the zMw limitation as an ‘essential limitation’ that is omitted from claims 9-10” [73]. Southcott J’s conclusion that the claims were invalid for overbreadth followed directly [74].

So, Claims 9-10 were held to be invalid simply because they did not contain any reference to the addition of C2/C3 and monitoring zMw. Now, in one sense it is true that adding C2/C3 and monitoring zMw were essential to the invention, for all the reasons given by Southcott J and the experts on which he relied. But they were essential in the sense that they reflect the inventive concept. Thus Southcott J’s holding amounts to saying that the inventive concept must be explicitly present in the claims. There is no such requirement.

For example, a compound with no known use is unpatentable, even if it is novel. If the inventors discover it is useful in treating cancer, the compound may be patented as such; the claim itself need not mention the use. That is true even if the compound is easy to synthesize, so that the inventive concept lies solely in the discovery of the new use; if the compound is new, it may be claimed as such, without reference to the use. As another example, if the invention is an enantiomer of a known racemic compound which was known to be useful, and the inventive step lay in discovering a way to separate the enantiomers, the enantiomer may be claimed as such, without reference to the method of separation: Sanofi 2008 SCC 61; Lundbeck [2009] UKHL 12. In Aux Sable, the discovery of the importance of the zMw product is the inventive concept, and Claims 9-10 to the gas mixture itself, as the product of that inventive method, are analogous to claims to the compound per se, which are produced by an inventive process of adjusting the zMw product. (Claims 2-8 are analogous to claims to the method of separating enantiomers.) (I should add that there is a discussion at [66]-[68], that I find difficult to understand, but which might be taken to suggest that the claimed gas mixture was not in fact the product of the inventive method of adjusting zMw. If so, then the claims should normally be invalid for lack of utility in any event, as Southcott J suggests. This was not a key point in Southcott J’s analysis.)

In the great majority of cases in which overbreadth is invoked, as discussed in my Overbreadth paper, the “essential elements” means the elements of the claim that ensure it is new, useful and non-obvious. So, in BVD Co v Canadian Celanese Ltd [1937] SCR 221, 237 the Court remarked that “the inventor did not state in his claims the essential characteristic of his actual invention,” which was the use of a thermoplastic woven into yarn, but the result was that the claims also encompassed thermoplastic in the form of sheets, and the Court went on to emphasize that the specification made it clear that the use of thermoplastic woven into yarn was an essential aspect of the invention, and that the claims themselves omitted any reference to this essential feature (228-30). But the reason all of this was relevant is that “[u]nless the claims…can properly be narrowed by the introduction of a limitation to the use of the cellulose derivative in the form of yarns, filaments or fibres, they are, we think, clearly anticipated [by two prior art patents]” (230). The Court then spent more than several pages detailing how the prior art patents anticipated the patent at issue, if the claims were not limited to the use of woven thermoplastic yarns (230-33). So, exactly the same facts which meant the claim was anticipated also meant it was overbroad. The essential element was the element that made the disclosed invention new; omitting this element was fatal to the claim because it meant the invention claimed was not new, even though the invention disclosed in the specification was new. In short, the claims were overbroad because they were anticipated, and they were anticipated because they were overbroad. A claim may similarly be overbroad because it claims material which is obvious, or useless, or not sufficiently disclosed. That is true in the great majority of cases invoking overbreadth; in effect, overbreadth is used as a compendious way of saying that the claim claims subject matter which is not an invention.

Used this way, the “essential elements” of the claim are those which would be identified as essential in a claim construction exercise under Free World. Southcott J considered this point and rejected it:

[72] I appreciate that, as explained in Free World Trust v Électro Santé Inc., 2000 SCC 66 [Free World Trust] at paras 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.

Southcott J is correct in his observations regarding Amfac. This is not inconsistent with my remarks above. The problem is how to identify the “essential elements” for the purpose of overbreadth. I said that in “the great majority of cases” the term is used to mean the elements which are essential to patentability. There is also a handful of overbreadth cases, raising the “roads to Brighton” problem, in which a patentee who has discovered one method of achieving an end result which is known to be desirable, claims the end-result itself: see eg Biogen [1996] UKHL 18, Lundbeck v Apotex 2009 FC 146, aff’d 2010 FCA 320. And then there is Amfac, which is an outlier. As I read the cases, Amfac is the only case to hold claims invalid for overbreadth based solely on the identification of the essential elements from the specification, without regard to whether the putative overbreadth also resulted in anticipation, obviousness or some other statutory ground of invalidity.

Now, in some ways, Southcott J’s approach is more principled than that in Amfac. Southcott J at least identified the essential elements with the inventive concept as identified by the expert evidence, whereas in Amfac, the essential elements were identified as those which appeared to be emphasized by the specification, without regard to whether it actually reflected the inventive concept. Nonetheless, both approaches raise the same problem, in that they potentially invalidate claims to subject-matter which is new, useful and non-obvious. If the specification sufficiently discloses how to make and use that subject matter, the patentee has fulfilled its end of the patent bargain. What justification is there for striking down the claims? The question is particularly pressing given that overbreadth has no clear basis in the Act. In cases such as BVD, the answer is clear, as the justification for striking down the claim for overbreadth is exactly the same as that for striking it down for lack of novelty. But that straighforward justification was not available in Amfac, as there was no suggestion that the claims which were held to be overbroad would otherwise have been invalid on any statutory basis.

Now, Southcott J also held Claims 9-10 to be invalid for anticipation, lack of utility, and unpatentable subject matter, but these were independent considerations, which might well have gone the other way on the facts. This is different from cases such as BVD, along with most other overbreadth cases, in which the basis for holding the claims overbroad was exactly the same as the basis for holding it to be anticipated.

In summary, the overbreadth analysis set out in Amfac can result in invalidation of claims to subject-matter which is new, useful, non-obvious and sufficiently disclosed. No justification for this result is evident. The key to the problem is the identification of “essential elements” in the context of overbreadth. Aux Sable is the first case to actually follow the Amfac approach, as opposed to simply citing Amfac for the proposition that a claim is overbroad if essential elements are omitted, and the results are similarly problematic.