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Federal Court Rules that Patent Agent Privilege Does Not Apply to Freedom to Operate Opinions

December 6, 2021

By Joshua W. Spicer and Mitchel Fleming

In Janssen Inc and Mitsubishi Tanabe Pharma Corp v Sandoz Canada Inc, Case Management Judge Horne interpreted amended section 16.1(1) of the Patent Act to exclude “a non-infringement opinion for a product” from the scope of communications with a patent agent protected by privilege under the Act.[1] This clarifies the scope of privilege to be applied to communications with a patent agent and is likely a significant curtailment of the protection many had understood came with the amendment. 

In an earlier piece, we discussed the 2016 amendments to section 16.1(1) extending privilege to communications: (a) between an individual whose name is entered on the register of patent agents and that individual’s client; (b) intended to be confidential; and (c) made for the purpose of seeking or giving advice with respect to any matter relating to the protection of an invention.[2]

In Janssen, the plaintiffs sought an order that (1) redacted portions of certain documents contained privileged information, and (2) permitting a “claw back” portions of other documents they had produced to the defendant. The plaintiffs argued that section 16.1(1) should be interpreted broadly and liberally, and not limited to communications directed to patentability. 

The defendant argued for a narrow interpretation of section 16.1(1) and that the communications were not made “with respect to any matter relating to the protection of an invention” and failed to meet the requirements for patent agent privilege. The Court agreed with the defendant, paying particular attention to the wording of Act in its analysis and drawing a distinction with the scope of protection under solicitor-client privilege. In doing so, the Court rejected the assertion that patent agent privilege should include all communications involving patentability analysis, infringement analysis and overall patent strategy.

With reference to Richards Packaging Inc. v Distrimedic Inc.,[3] the Court noted that the legal principles governing solicitor-client privilege,[4] and the exceptions to those principles, equally apply to patent agent privilege; however, the Court reasoned that due to Parliament’s express limiting of the conditions under which patent agent privilege may arise – i.e., confining patent agent privilege to communications relating to the “protection” of an invention – the legislature clearly intended a narrower class of communication than that protected under solicitor-client privilege.

The Court concluded that communications “relating to the protection of an invention” do not extend to an analysis as to whether a product infringes third-party patent rights. The Court reasoned that a non-infringement opinion merely identifies a litigation risk and does not “relate to the disclosure of the invention or otherwise contribute to the patent bargain.” For a patent strategy to be protected, it must be made for the purpose of seeking or giving advice with respect to any matter relating to the protection of an invention. A communication merely relating to patent strategy, without more, is “insufficient to meet the test for patent agent privilege.”[5]

Lastly, the Court expressly noted that the issue was not before it as to whether patent agent privilege applies to an infringement opinion of one’s own patent. In other words, although the Court held that patent agent privilege does not cover opinions relating to third-party patents (e.g. freedom to operate opinions), it remains undecided whether an infringement analysis of a competitor’s product would be protected.[6]

There does, however, appear to be room to distinguish this issue from the ratio in Janssen, and to characterize an infringement analysis as a matter “relating to the protection of an invention”, as it pertains to the enforcement of one’s patent rights. The Oxford English Dictionary definition of “protection” quoted by the Court in Janssen includes “preservation from harm, danger, damage, etc. …”.[7] Enforcement of a patent clearly protects against the harm and damage caused by an infringer in a monopoly market. In Janssen, the Court was also careful to couch its interpretation of section 16.1(1) taking into account the purpose of the Patent Act as a whole.[8] Although not referred to in Janssen, the Act includes several provisions related to the enforcement of patents, including in respect of the monetary and injunctive relief that may be available to patentees.[9] It seems at least arguable that, for these reasons, patent agent privilege would apply to an infringement opinion on one’s own patent. 

It does not appear that Janssen will be appealed, so we will need to wait for the issues it raises to be addressed in other proceedings. 

 

 


[1] 2021 FC 1265, ¶18 (“Janssen”).

[2] Patent Act (R.S.C., 1985, c. P-4), s 16.1(1) (“Patent Act”).

[3] Richards Packaging Inc. v Distrimedic Inc (unreported decision in T-1606-18 dated February 10, 2020, affirmed 2020 FC 1162).

[4] Solicitor-client privilege has broad application. A solicitor-client communication is presumptively privileged if (1) it is a communication between a solicitor and a client; (2) it entails the seeking or giving of legal advice, whether litigious or not; and (3) it is intended to be confidential by the parties.

[5] Janssen, ¶23.

[6] Janssen, ¶18.

[7] Janssen, ¶15.

[8] Janssen, ¶17.

[9] Patent Act, supra note 2 at ss 55 and 57.

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Author(s):

Joshua W. Spicer Joshua W. Spicer
B.Eng. (Chem. Eng.), LL.B.
Partner
416.957.1649  email Joshua W. Spicer