The Alberta Court of Appeal (the “Court of Appeal”) held that the six-year limitation period in the Patent Act applies to infringement actions filed in the Alberta court, not the two-year period prescribed by provincial law. The plaintiff’s claim was not statute-barred and was remitted to the trial court for continued litigation.
JL Energy Transportation Inc v Alliance Pipeline Limited Partnership, 2025 ABCA 26
Background
The appellant, JL Energy Transportation Inc (“JL Energy”) granted Alliance Pipeline Limited Partnership (“Alliance”) a license to use its technology for the purpose of piping liquid natural gas from British Columbia to Illinois.
The license was only for the use of JL Energy’s technology in one pipeline, but JL Energy alleged that its technology is being used in lateral, connected lines without permission. JL Energy alleged theoretical misuse as far back as 2008, and the matter’s case management judge ultimately concluded that JL Energy had adequate information to bring a claim no later than November 27, 2013. This fact was not challenged on appeal.
The statement of claim was issued in Alberta’s King’s Bench on May 11, 2016. This made the claim out of time if section 3(1) of Alberta’s Limitations Act, RSA 2000, c. L-12 (“Limitations Act”) was applicable, but was well within the six-year limitation period set out in s. 55.01 of the Patent Act, RSC, 1985, c. P-4 (“Patent Act”).
In the 2022 decision Canadian Energy v Secure Energy (“Secure Energy”), the Court of Appeal had found the provincial 2-year limitation period to be the correct one to apply. As such, the chambers judge in the case at bar noted that decision was binding on her. In advance of the present appeal, JL Energy applied for and was granted a rare opportunity to re-argue the limitations issues in Secure Energy before the Court of appeal.
In Secure Energy, the claim had been brought in provincial court, not federal court. Citing s. 12 of the Limitations Act, which deals with conflict of laws, the Court of Appeal found that the Alberta and Federal Courts’ concurrent jurisdiction made it possible for the provincial limitation period to apply. The Court of Appeal further stated that this would be true irrespective of the court in which this claim was brought on the basis that the cause of action arose in Alberta.
In the case at bar, the appellant argued that the Patent Act governs the limitation period for actions alleging patent infringement, and conceded that the issues related to the breaches of its license agreements should remain governed by Alberta statute. The appellant also argued that a so-called “rolling limitation period” applied, which we will not discuss in this summary.
Issues
The only issue before the Court of Appeal was to decide which of the two limitation periods (provincial or federal) was the correct one. This question was broken into two issues;
- What is the correct interpretation of the Limitations Act; and
- What is the impact of the Patent Act and its federal nature?
Analysis
Interpretation of the Limitations Act
The Court of Appeal held that its earlier decision in Secure Energy relied on a literal interpretation of s. 12(1) of the Limitations Act. The majority had reasoned in Secure Energy that since the proceeding had been commenced in Alberta, the Limitations Act applied “without exception”.
In the current case, the Court of Appeal outlined that section 12(1) of the Limitations Act is informed by s. 2(3) and (4), which were enacted to ensure there are no gaps in the regime, but do not supersede other limitation provisions that might be in place. The provincial Limitations Act applies in cases where another law does not, to safeguard against cases of ambiguity. Section 12 of the Limitations Act was never intended to “override federal jurisdiction.” The wording of the Limitations Act and its predecessors make it clear that in the context of these acts, “conflict of law rules” deal with conflict between two territorial jurisdictions (provinces), and not between federal and provincial law.
On this basis, with the legislative history and intent in mind, the Court of Appeal concluded that the reasoning underlying its decision in Secure Energy was based on a flawed understanding of ss. 12 and 2 of the Limitations Act.
The Patent Act’s Federal Nature
In terms of the constitutional overlay of the Patent Act, the Court of Appeal outlines that provinces cannot simply enact a “choice of law” provision that overrides the provisions of the Patent Act. The preference is to interpret the provincial legislation in a way that allows the provincial Limitations Act to operate within the bounds of the federal legislation.
There is no question that patent rights are federal, and that those rights fall within the pith and substance of federal law. This means that the federal government has jurisdiction over the limitation periods for claims of patent infringement, and the federal government exercised those rights by enacting section 55.01 of the Patent Act that provides for a six-year limitation period.
From a policy and practical perspective, patent infringement claims can be brought in both federal and provincial courts, so creating a limitations regime that differs based on the court in which a claim is brought would be contrary to legislative intent in addition to being undesirable. The interpretation of the Limitations Act in the Secure Energy decision is therefore incorrect.
Conclusion
The Court of Appeal concluded that the Secure Energy decision should no longer be followed due to the flawed reasons within it pertaining to limitation periods. The matter was remitted to the trial court for further determination of the underlying intellectual property issues, which, in light of the limitation period outlined in the Patent Act, were found to have been identified in time for litigation to proceed.