On September 13, 2024, the Federal Court (per Manson J.) held that four patents owned by ProSlide Technology Inc. (“ProSlide”) were invalid, and that three of those patents were not infringed by the manufacture of waterslide component parts in Canada by WhiteWater West Industries, Ltd. (“WhiteWater”). The case turned largely on the facts but raised interesting issues of construction, overbreadth, and utility that will undoubtedly be considered in future cases.
Proslide Technology, Inc. v. Whitewater West Industries, Ltd. – Federal Court (fct-cf.gc.ca)
Background
ProSlide and WhiteWater are the largest waterslide companies in the world. Both are based in Canada. This case concerned the alleged infringement and validity of four patents owned by ProSlide (“ProSlide Patents”):
- The 601 Patent. This patent claims a slide design feature for a water slide comprising a sliding surface concave about three axes.
- The 552 Patent Family. This group consists of a parent (552) and two divisionals (073 and 150). Each patent describes two embodiments pertaining to water slide features, but only the parent (552) has specific claims to this subject-matter. The divisional patents claim amusement ride features.
ProSlide alleged that the manufacture, use and sale by WhiteWater of its water slide products (AquaSphere and Orbiter) infringed several asserted claims of the ProSlide Patents. WhiteWater denied infringement and alleged that the asserted claims were invalid for obviousness, lack of utility, overbreadth, and/or ambiguity.
Decision
The trial was heard over nine days in June-July 2024. A confidential decision was released to the parties on September 13, 2024. A redacted version was made available to the public on or about September 23, 2024.
Experts
Each party led expert and fact evidence. The Court held that each of the witnesses was credible, but that ProSlide’s expert, a co-founder of the company, lacked the requisite independence to give opinion evidence because of his “long and intimate association with ProSlide and [the named inventor], his “involvement in [the] design process” that led to the 552 Patent Family, and statements made during cross-examination. The Court also held that the weight of WhiteWater’s expert evidence was undermined by “a number of material concessions [on cross-examination].”
Claim Construction
The Court construed the ProSlide Patents purposively, as of the publication date, through the eyes of the skilled person, in light of the common general knowledge, in keeping with settled law.
Of note, the Court relied on a 2019 appellate decision (Tearlab 2019 FCA 179) in holding that reference to the description “may” be made “for clarity” where “ambiguity persists in the words of a claim”, rather than more recent FCA jurisprudence holding that “a patent’s description (also referred to as the disclosure) must be considered when construing claims.” (Biogen 2022 FCA 143). While the Court held that it was “not necessary” to consult the description of either ProSlide Patent to construe the claims in this case, it nonetheless did so in respect of several elements (e.g. paras. 90, 92, 96-98, 103-104 and 109).
Infringement
The Court held that one claim of the 601 Patent was infringed because WhiteWater made a product in Canada comprising all its essential elements; however, this claim was later held to be invalid for anticipation, infra.
By contrast, none of the asserted claims of the 502 Patent Family were infringed because none of the impugned articles were in fact ‘made’ or ‘used’ in Canada. Rather, WhiteWater supplied “component parts” (or a “kit”) to subcontractors that needed to be assembled on site to create a complete water slide. This was not an act of infringement because none of the final building sites were in Canada. The Court rejected ProSlide’s legal argument that the words “making and using” in the Patent Act should be read broadly to cover acts that have a real and substantial connection to Canada. The Court relied on recent appellate law regarding the meaning of “use” (Steelhead 2024 FCA 67).
Anticipation
The Court applied the two-step methodology of disclosure and enablement from PLAVIX SCC to analyze WhiteWater’s allegations of anticipation.
The Court held that the subject-matter of each asserted claim of the 601 Patent, except one, was not anticipated because the prior art reference (a GB patent) did not disclose an essential element of the asserted claims, viz. a “ride path that is at least partially upward”. Rather, the ride paths in the prior art reference had a “downward vertical component”. By contrast, claim 20 of the 601 Patent, was anticipated by the same reference because it disclosed and enabled a sliding feature that is “spherical” and had “a shape approximating one-half of a sphere”.
WhiteWater did not make an allegation of anticipation regarding the 552 Patent Family.
Obviousness
The Court applied the four-part framework from PLAVIX SCC to assess WhiteWater’s allegation that the asserted claims of the 601 Patent and the 552 Patent Family were obvious.
Regarding the 601 Patent, the Court determined that there is a single multi-faceted inventive concept for claim 1 that also applies to each of the asserted claims. The Court held none of the asserted claims (except claim 20) was obvious because a “degree of inventiveness” would have been required to bridge the gap between the prior art and the inventive concept. Claim 20, which had been held to be anticipated, was also held to be obvious.
Regarding the 552 Patent Family, the Court conducted a claim-by-claim analysis and held that the inventive concept of each asserted claim would not have been obvious because there was no disclosure or teaching of a key element (“roll angle relative to the horizontal plane”). Inventiveness would have been required to bridge the gap between the prior art and the inventive concept.
Overbreadth
The Court noted that a patent claim is invalid if it is broader than: (a) what was disclosed; or (b) what was actually invented (para. 145). WhiteWater relied solely on the second ground.
Regarding the 601 Patent, WhiteWater asserted that each of the asserted claims is “broader than what was actually made” because “nothing was physically built” as of the relevant date. The Court disagreed with this assessment of the law and expressed the applicable principles in the following way:
“[T]he test for overbreadth is concerned with what was made or contemplated, not simply what was physically built… Although the latter serves as a good indicator of the former, it is not an exclusive measure of the actual invention. The inventor may contemplate an invention with a narrower or broader set of elements than what they physically built. It would be incorrect to disregard such work and restrict the actual invention to what was physically built. To suggest otherwise is to import a requirement of demonstration into the overbreadth analysis. This muddles the line between overbreadth and utility.” [Emphasis in original] (paras. 193-194)
The Court held, on the evidence, that the asserted claims of the 601 Patent were not overbroad (para 197), though the redactions to paragraph 196 make it impossible to assess the specific reasons for this finding.
Regarding the 552 Patent Family, the Court held each asserted claim lacks at least one key aspect of the invention made or contemplated by the inventor and is overbroad. The Court relied on testimony from the inventor regarding “the product that [he] contemplated as he conceived of the subject-matter of the 552 Patent Family”, which is “informative” but “not sufficient”, and testimony from experts expressing the view of the skilled person in coming to this conclusion (para. 246, citing 2023 FC 1684, per Manson J.). The Court rejected WhiteWater’s interpretation of the law (Seedlings 2021 FCA 154) and held that a patent arising from a divisional application is not necessarily invalid if it fails to include key elements of the parent patent. Each case must be decided on its own facts.
“[O]ne cannot conclude that a divisional patent is overbroad solely because its claims fail to include elements that are key to the contemplated invention of the parent patent. Instead, it must also be established that those aspects are key to the contemplated invention of the divisional patent as well. Indeed, the Court goes on to affirm in paragraph 55 that an overbroad patent is invalid. It would be wrong to conclude from the Court’s comments that an exception must be made with respect to divisional patents. I acknowledge that, in some cases, because the invention disclosures of divisional patents and their parent patents will overlap completely, there may be difficulty in differentiating between the key aspects of their contemplated inventions. However, such difficulty cannot displace the Court’s obligation to make findings of fact in each case.” (paras.239-240).
Based on the inventor’s testimony, the Court concluded that each of the asserted claims of the 552 Patent Family was overbroad as they omitted at least one key aspect of the invention made or contemplated by the inventor (para. 251).
Lack of Utility
The Court applied settled law and held that the subject-matter of an invention, as claimed, must have been demonstrated or soundly predicted as of the filing date. (Wellcome 2002 SCC 77 and AstraZeneca Canada Inc 2017 SCC 36). However, in applying the law to the facts, the Court made some noteworthy comments on the amount of work that must have been completed to establish the requisite “scintilla of utility”.
The issue of demonstrated utility was raised first in connection with the 601 Patent, where the Court described the legal standard in the following way:
“[I]n order for the utility of a claimed feature of the inventions to be demonstrated, [] the said features or a prototype in respect of these features, as claimed, that accurately approximates their essential elements must be built and then tested by humans or weighted dummies. Otherwise, the utility of the claims at issue must be soundly predicted.”
This bar was not met because “none of the claimed features were actually built” and “no model was accurately representative of the claimed features’ elements to allow for ‘strongly suggestive’ results for which ‘no other logical explanation is likely’. ProSlide’s computer-aided designs were not sufficient to demonstrate utility because the inventor “could not recall who made them or for what reason, and there is nothing to indicate how they were used to model a rider’s path across the sliding surface.” (para. 202).
The Court then applied the three-part test from Wellcome SCC to determine whether there was a sound prediction of utility as of the filing date: (1) was there a factual basis for the prediction, (2) was there an articulable and sound line of reasoning from the factual basis to permit an inference supporting the alleged utility, and (3) was there proper disclosure (Wellcome at para 70). Notably, in summarizing the law, the Court held that some aspects of the test must be examined through the eyes of the inventor, whereas other elements must be assessed through the eyes of the skilled person:
“[i]t is the inventor, not the skilled person, whose perspective is invoked by the first two steps of the sound prediction test. In that respect, the Court determines whether the inventor had a factual basis and a sound line of reasoning supporting the utility prior to the filing date. It is only in the third step of the test that the Court concerns itself with the perspective of the skilled person [emphasis added].” (para. 148)
On the evidence, the Court held that although the inventor had “a factual basis to serve as a starting point”, which included the common general knowledge, the inventor’s line of reasoning was speculative and there was insufficient disclosure. As such, the skilled person would not have been able to conclude that the claimed subject-matter would be useful.
Regarding the 552 Patent Family, the Court held that utility was not demonstrated because “[n]one of the features claimed by the 552 Patent Family were actually built prior to the relevant date, nor was any prototype that approximates the features’ size and elements.” However, “the inventor] and his colleagues arrived at certain design details to ensure that the inventions of the 552 Patent Family worked.” This prediction was sound because the factual basis upon which utility was predicted (i.e., computer-aided designs) and the line of reasoning were disclosed in the Patent, and the skilled person would have appreciated that the embodiments in the Patent were the result of those tests and designs.
Ambiguity
WhiteWater alleged that each of the Patents was ambiguous because the skilled person would not have been able to understand certain claim terms as of the publication date, even when read in light of the Patent as a whole and the common general knowledge. At trial, WhiteWater told the Court that it did not intend to adduce evidence or make arguments with respect to this issue, other than in presenting its case on claim construction. The Court held that WhiteWater had not met the “high threshold” to prove invalidity and rejected WhiteWater’s allegations of invalidity on this issue.
Disposition
None of the asserted claims of the 601 Patent and 552 Patent Family were valid and infringed. As such, Judgment was issued in favor of WhiteWater. The parties were invited to resolve the issue of costs or to make further submissions. The Judgment can be appealed, without leave.