Prior Art Teaching Away from the Invention: Anticipated but Not Obvious

Swist v MEG Energy Corp 2021 FC 10 Fothergill J

2,800,746 / Pressure Assisted Oil Recovery

In this decision Fothergill J held Swist’s 746 patent was not infringed by MEG. He also held it to be invalid for anticipation and lack of utility, though the obviousness attack failed. The decision turns largely on the facts and on claim construction, except for the holding regarding utility. One curious aspect of the decision is that the 746 patent was anticipated by one piece of prior art, but not obvious over the same prior art. That is quite unusual, but the holding strikes me as sound on the particular facts. I am not so sure about the utility holding though.

The 746 patent relates to a method of extracting oil from oil sands. The oil contained in the oil sands, often referred to as bitumen, is too thick to be pumped out of the ground directly [2]. One standard technique is steam assisted gravity drainage [SAGD]. In SAGD, a pair of parallel horizontal wells are vertically separated by a distance of roughly four to eight metres. Steam is injected in the top “injector” well, forming a “steam chamber” that heats the oil and reduces its viscosity. The now mobile oil drains down by gravity into the bottom “production” well of the pair, and can then be pumped to the surface [15]–[16]. Several well pairs are often used in parallel for recovery from the entire reservoir. The steam chamber from adjacent well pairs will eventually merge as the reservoir is depleted.

 

There are a number of modifications of the basic SAGD method. The claimed invention is one such variant, which uses a third injector well placed between the adjacent SAGD well pairs [5].

 

The claimed invention also specified the timing of when the steam is injected into the third well [34]. In particular, the 746 patent claim a method where steam is injected into the third well prior to the merger of the steam chambers from the adjacent well pairs. 

There were several terms that required construction, but this turned on the expert evidence and I didn’t see anything noteworthy in this part of the decision. Infringement turned partly on the facts and partly on claim construction, and again I didn’t see anything of particular interest. (Which, by the way, I view as a good thing: new legal points are fun, but it's a sign that the legal system is working smoothly when a decision involves nothing more than the application of settled law to the facts at hand.)

Anticipation also turned largely on the facts, but one interesting point did arise. One piece of prior art, the “Arthur Patent” disclosed adjacent SAGD well pairs with an injection well between them [145].

Swist sought to distinguish the Arthur Patent on the basis of the timing of injection of steam into the third well [148]. In particular, while the 746 patent claimed a method with injection prior to the merger of the adjacent steam chambers, the Arthur Patent recommended injection into the third well after that merger, noting that premature injection might compromise production [153], [156]. Thus the Arthur Patent taught away from the 746 patent. However, while the Arthur Patent recommended late injection, it acknowledged that activation of the third well may occur at a “distinctly earlier stage” [154].

Fothergill J held that the Arthur Patent was anticipatory, as it disclosed all the essential elements of the relevant claims [159]. This is notwithstanding that it taught away from the 746 patent:

[151] The fact that prior art “teaches away” from an impugned patent, while potentially relevant to an obviousness allegation, is irrelevant to the anticipation analysis. The fact that a piece of prior art discloses formulations that would not infringe a patent, as well as formulations that do infringe, is irrelevant to assessing anticipation.

The point is not completely novel, but it seems the caselaw is limited. Fothergill J cited Valence v Phostech 2011 FC 174 [228], which directly supports the proposition, but with very little discussion. He also cited Aux Sable 2019 FC 581 [97]–[98] and Schering-Plough 2009 FC 1128 [86]–[90], which both support a slightly weaker proposition, that “the fact that a piece of prior art teaches formulations that would not infringe a patent, as well as formulation that do infringe, is irrelevant to assessing anticipation.” So, Fothergill J’s holding does have support, but it perhaps not well-established in the Canadian jurisprudence. (Though it does appear to be well-established in the US caselaw, as Fothergill J noted [152].)

Aside from the caselaw, it strikes me that Fothergill J’s holding is sound as a matter of principle. It is now well-established that a genus claim to a large group of chemical compounds does not in itself anticipate the species within that claim, except for those species that are specifically described. The specific identification of a species constitutes the disclosure part of the novelty requirement—planting the flag on the precise destination—and, so long as it is also enabled, it doesn’t generally matter whether the skilled person would actually choose to practice that particular species. A genus patent will often specify several especially preferred compounds, and it is clear that they will all be anticipated even if, as a practical matter, a skilled person would only actually want to make one or two of those, perhaps for manufacturability or regulatory reasons. I don’t see why it should make any difference why the skilled person would choose not to make a particular embodiment.

The fact that the Arthur Patent specifically described the method claimed in the 746 patent, yet taught away from it, led to the counter-intuitive conclusion that even though the 746 patent was anticipated by the Arthur Patent, it was not obvious over the Arthur Patent [214]. This is quite ususal, but nonetheless seems right on the unusual facts.

Fothergill J also held that the 746 patent lacked utility, essentially on the basis that the 746 patent was not in fact an improvement over the prior art SAGD method: “the claims lack utility because the subject mater of the invention is enhancement of traditional SAGD, and Swist’s invention does not provide this” [226]. This is even though the claims themselves do not specify that the claimed method is an improvement. This holding seems wrong to me. Every inventor hopes that their invention will be an improvement over the state of the art, but whether that is true in fact has long been held to be irrelevant to utility:

As Lord Herschell explained over a century ago, in BASF v Levinstein (1887) 4 RPC 449 (HL) at 466 (HL) a case dealing with a patent for a red dye:

The demand for a particular colour depends upon changing fashion and passing moods of fancy. The one which to-day may be in large demand may to-morrow be a drug in the market. Again, a process which at one time could not be worked at a profit on account of the expense of the materials employed may shortly afterwards be so worked by reason of a diminution in the cost of these materials. Is the person who patents such a process to be deprived of all benefit of his invention when it becomes a commercial success, because at the time the patent was granted it could not be worked at a profit?

And as the Supreme Court noted in Consolboard [1981] 1 SCR 504, it is enough that the invention “affords the public a useful choice.” See also Lowell v Lewis 15 F Cas 1018, 1019 (CCD Mass 1817), per Story J (rejecting the proposition that to satisfy the utility requirement the invention must supersede those in common use); Purdue Pharma v Pharmascience Inc 2009 FC 726 [8] (noting that “The inventor of a new pain killer will not be denied a patent simply because it is only half as effective as aspirin and twice as expensive”); Astrazeneca Canada Inc v Mylan Pharmaceuticals ULC / anastrozole (NOC) 2012 FCA 109 [37] (noting that a compound that is no better than existing alternatives nonetheless has patentable utility); Pfizer Canada Inc v Mylan Pharmaceuticals ULC (NOC) 2014 FC 38 [66] (“ It would not matter if other pain relievers were far more effective.”)