A Canadian law firm has developed a three-point strategy to help companies here take a proactive step towards protecting themselves against patent infringement suits.
Ogilvy Renault, which has offices in Toronto and Montreal,
said first, companies should consider protecting their innovations with patents here and abroad. Second, they need to assess their activities for potential infringement problems. Lastly, companies need to establish what each partner is liable for in terms of intellectual property.
The high profile case between Waterloo, Ont.-based Research In Motion and holding company NTP Inc has put a spotlight on the issue for many Canadian companies. Last month a U.S. court decision ruled that Research In Motion infringed on holding company NTP Inc.’s patents.
The Court of Appeal for the Federal Circuit’s decision reversed an injunction from a Richmond, Va., trial court’s decision and passed the case back to the district court. The injunction would block the maker of the popular BlackBerry device from the North American market.
Don Cameron, intellectual property lawyer and partner at Ogilvy Renault, said the troubling part of the federal appeals court’s decision is that the signal processing and data handling activities were happening in Waterloo, Ont., where RIM is based.
“The scary part of the decision is the fact that the BlackBerry relay systems described in the NTP and RIM decision is run out of Waterloo, Ont.” said Cameron.
“The fact that you can be found to infringe U.S. patent by carrying out data processing in Canada and still be considered to be infringing a patent in the U.S. is scary. It extends U.S. patent law according to U.S. courts into the Canadian or any foreign country.”
Similarly, Martin Langlois, partner at Toronto-based law firm Stikeman Elliot said the latter is one of the main criticisms of the CAFC’s decision.
“That’s why people are a little scared,” said Langlois. “They’re feeling the United States is coming in our back door now and saying, ‘We’re going to use our laws to protect infringement and we’re stretching our arms.’”
Cameron said if the law is going to be changed then it should be carried out by the U.S. Congress and not by a judge who “decides that doing something in Canada is doing something in the U.S. according to what the U.S. patent says.”
This, in part, has prompted the Canadian government to step in, asking for RIM’s case to be heard before the 15 original judges.
But Cameron pointed out that there are some current patents on e-commerce and business methods that could incorporate activities that are carried on in Canada.
“For example if you’ve got a call centre in New Brunswick and that’s part of a system that’s patented under a U.S. patent, then you might be exposed to infringement based on the court decision.”
Cameron said the U.S. Congress has made amendments to the patent act for which Canadian firms can be held liable. Cameron gave the example of the process of baking a cake outside of the U.S. “Take component a, component b and stir it up for two hours and out pops a cake. If I ever ship that cake into the U.S., I’d be caught by U.S. patent law.”
Moreover, Cameron said many businesses don’t know about some of these e-commerce or business method patents until they are slapped with a lawsuit. “That will be strategically a little late in the game for them to plan for it,” he said.
David Paterson, national director public affairs at the Canadian Advanced Technology Alliance questions whether the patent was properly issued to NTP in the first place.
“That’s what’s going to save RIM’s bacon,” said Paterson, adding that there have been some “extremely” poor patents granted, particularly in the software area, in the past. “When it comes to things like software it took them a long time to figure out what was real innovation and what wasn’t.”
The NTP patent is currently being re-examined by the U.S. Congress to find out whether it was properly issued.