Executive Summary: Key Legal and Evidentiary Issues

• Patent claims for the 502 and 236 Patents were found invalid due to ambiguity surrounding the term "depletion layer," which was not a term of art.

• Skilled readers could not distinguish between the "depletion layer" and the "native oxide layer" in the 502 Patent, nor determine the existence or parameters of a depletion layer in the 236 Patent.

• AP&C argued the Federal Court erred in effectively requiring that a valid patent claim include means of proving infringement, but the Court of Appeal found no such error.

• Under subsection 27(4) of the Patent Act, claims must define distinctly and in explicit terms the subject matter for which exclusive privilege or property is claimed.

• A patent of uncertain scope fails its notice function and is a "public nuisance" per Free World Trust v. Électro Santé Inc.

• The Federal Court of Appeal found no error of law, no palpable and overriding error of fact, and no error of mixed fact and law from which an error of law is extricable.

Background of the dispute

This case involves a patent infringement and invalidity dispute between AP&C Advanced Powders & Coatings Inc. and Tekna Plasma Systems Inc. concerning two related Canadian patents—the 502 Patent (No. 3,003,502) and the 236 Patent (No. 3,051,236). Both patents describe metal powder atomization manufacturing processes used to produce high quality powders for applications such as 3D printing, powder injection molding, hot isostatic pressing and coatings. The matter originated in the Federal Court, where Justice Nicholas McHaffie issued a decision (2024 FC 871) finding the relevant patent claims invalid for ambiguity.

The ambiguity issue

Central to the dispute was the term "depletion layer" used in the patent claims. The Federal Court found that this term was not a term of art and that the skilled reader of the patents in suit would not be able to construe this term. For the 502 Patent, the skilled reader would not be able to distinguish between the depletion layer and the native oxide layer, and hence would not be able to determine whether the former was deeper and thicker than the latter. For the 236 Patent, the skilled reader would not be able to determine the existence of a depletion layer or its parameters.

AP&C's appeal arguments

AP&C appealed to the Federal Court of Appeal, arguing that the Federal Court erred in effectively requiring that a valid (unambiguous) patent claim include means of proving infringement. However, the Court of Appeal, having carefully reviewed the decision under appeal and having considered AP&C's written and oral submissions, determined that the Federal Court made no such error.

Legal standards applied

The Court of Appeal affirmed that under subsection 27(4) of the Patent Act (R.S.C. 1985, c. P-4), the claims of a patent must define distinctly and in explicit terms the subject matter of the invention for which an exclusive privilege or property is claimed, and failure to do so may render the patent invalid for ambiguity. The Court also emphasized that the scope of a patent's prohibition should be made clear so that members of the public may know where they can go with impunity. When claims, read purposively in the context of the patent as a whole and with a mind willing to understand, do not permit the skilled reader to understand what falls within the claim and what does not, the patent does not serve its notice function and becomes a "patent of uncertain scope" that is a "public nuisance" (Free World Trust v. Électro Santé Inc., 2000 SCC 66). The Federal Court was also fully aware of the general disinclination of the courts to find a patent claim invalid for ambiguity and did not misstate the law on ambiguity.

The ruling and outcome

The Federal Court of Appeal dismissed AP&C's appeal, finding no error of law, no palpable and overriding error of fact, nor any error of mixed fact and law from which an error of law is extricable. The Court noted that the Federal Court explained its reasoning throughout and took proper account of the evidence before it. The Court rejected AP&C's argument that the Federal Court could not properly conclude that the claims in issue were ambiguous because it was able to construe them, noting that the Federal Court stated clearly that the claims in issue provided insufficient definition to understand their scope. In view of the conclusion on ambiguity, the Court found it not necessary to consider AP&C's arguments on the issues of insufficiency and infringement. Tekna Plasma Systems Inc. prevailed, with AP&C ordered to pay costs fixed in the all-inclusive amount of $30,000.