Session Chair--Christopher Hunter
United States Speaker--William Manson
Canadian Speaker--Margaret Ann Wilkinson
MR. HUNTER: We should get started with the afternoon session, if everyone could please take their seats. This should be an interesting discussion. My name is Chris Hunter, (1) and on my left is Bill Manson. (2) On my right is Margaret Ann Wilkinson. (3) This panel is asked to talk about intellectual property and intellectual property rights in the Canada-United States relationship, particularly examining the protection and enforcement of intellectual property rights and potential methods to achieve convergence.
Our first speaker this afternoon is Bill Manson. Bill is deputy general counsel at Lubrizol here in Cleveland, a global specialty chemical company with manufacturing facilities around the world. It is one of the stars of Cleveland. (4) Bill has been with Lubrizol since 1995, working in legal compliance contracting. Before that, he was in the litigation section of an international law firm. I should also mention he is a graduate of Bowling Green State University here in Ohio, and has a Ph.D. in Economics from Virginia Tech in 1980. Bill, the floor is yours.
UNITED STATES SPEAKER
William Manson *
MR. MANSON: Thank you. First, I guess I should begin with some disclaimers. I will do my best to keep you awake for this last hour before you head off to the cocktail hour. That is not a disclaimer; that is a goal. My disclaimer, of course, is that the opinions are my own and not necessarily those of my clients or the many fine professionals with whom I have worked. That really had to be reinforced given that one of our last speakers, Cyndee, is from Lang Michener. When I was asked to participate in this panel, I called some of my dear friends who happened to be at Lang Michener, Don MacOdrum (5) and Peter Wells, (6) in particular, and chatted with them about Canadian patent law. I spent many years working with them on patent litigation, so, to the extent I learned from them and got it wrong, it is certainly not their fault.
At my company, we are fortunate that for the last ten years, we essentially avoided patent litigation. But for many years before, Lubrizol was engaged in active litigation to enforce its patent rights. One of the things I am often asked by people from other parts of the industry is, "What value did you get from enforcing your patent rights against that company? You have spent so much in litigation." That can be a difficult question to answer. Litigation is always costly, and it is always a disruption for the business team. Even if you prevail, it can be difficult to determine if the victory was worth the cost. Many aspects of the costs and benefits are hard to quantify. However, one of the hardest things to quantify is the value, if any, of the message that is sent by companies who protect their rights. There is, of course, value in sending a message to the market that you are indeed willing to take on the costs of litigation to enforce your rights.
Today, I would like to give you a business person's perspective of enforcing patent fights. I am not an intellectual property (IP) practitioner. I am not a member of the IP Bar. I do not file patent applications. When we get into the technical subjects about what is patentable, I really cannot address those subjects; I will rely on my learned colleagues on the panel to address those issues. However, I have spent time with a very important part of patent law. Once I get a right, what can I do with it? If someone is infringing my patent, what happens and where do I go?
We have to remember that patents are creatures of national law, and like every other regulatory subject that we have addressed during this conference, there are going to be differences. The laws in Canada are different to some extent from the laws in the United States. From my perspective, there is a great deal of similarity in the fundamentals of patent law. When we look at enforcement, on the surface there appears to be a great deal of similarity between the laws of the United States and Canada. Nevertheless, there are some subtle differences, which can make significant cost differences for the party that wishes to enforce its patent rights.
Before we begin to look at enforcement, we have to understand from a business perspective why we go after patents and what the costs of getting patents are. Obtaining a patent does not come at zero cost. Patents can be expensive to obtain, expensive to maintain, and indeed expensive to enforce. The mere fact that you get a patent does not necessarily mean that you are going to be comfortable enough with your legal position to enforce that patent. Moreover, the ability to enforce varies across jurisdictions, and so a lawyer must get the business client to look and analyze where the business needs to protect its patents.
From an international perspective, the business must ask if it truly needs a patent in every jurisdiction. Will a patent in the United States suffice? Does the business need a patent in Canada? Does it need to patent in various jurisdictions in other parts of the world? If it were to, for example, go to a country that did not enforce patent rights, would it be worth the time to patent in that country?
However, before we even get to the question of enforcement, we must first examine what the nature of the market is where the goods are being made. If your industry has commodities of scale and relatively few manufacturing facilities, perhaps that will help guide your patenting strategy. If you have a competitor manufacturing on the other side of the border and you want to be able to exclude them from your invention, you may want to have a patent to ensure that they are not manufacturing something that would infringe your rights. However, if a patent in one country will effectively foreclose a competitor because of the way goods move, the company may not need to have patents in every country.
From a patent owner's perspective, when there is a belief that infringing activity may be occurring, the owner needs to start the inquiry by looking at where the claimed infringing activity is occurring, where it is expected to occur, and which courts have jurisdiction to address the issue. When we look at North America, we look to see on which side of the border the infringement is happening, where the manufacturing is occurring, and where the sales are. If there are two forums, and infringement exists in both, should I bring the litigation in one of those courts more rapidly than the other? It is important to make the decision carefully where to first pursue the action, or whether to simultaneously pursue in more than one jurisdiction. We are going to be talking about these procedures later; but as you think about enforcement decisions, you start to think about what the costs are, what is the extent of the infringement in each jurisdiction, and what is the effectiveness of the remedies that are available. If I bring a suit in Canada, will I be better off?. Will the case move more quickly, or more slowly? What kinds of remedies do I get? If I pursue my case in Canada first, will I be able to get an injunction? Will I be able to do something that affects both markets? Those are all questions we must examine.
The first thing to look at in a jurisdiction is whether you can get an injunction quickly. Can I get an interlocutory or preliminary injunction? At least from a Canada and United States perspective, these remedies are available on both sides of the border. From my perspective, there is not a huge amount of difference in terms of getting an injunction. You have the potential of achieving that level of relief in the courts of either country. However, there are differences between Canada and the United States system with respect to the type of monetary remedies that are available.
There are also differences in the nature of the process. For example, in various countries litigation procedures can be very different. If I were to bring a patent case in the United Kingdom, in principle, I can get a judge who has come out of the Patent Bar and who is a specialist in patent litigation. (7) However, if I bring the case in Canada, it could be assigned to any federal judge. (8)
In the United States, however, judges are randomly selected. You might end up drawing a judge that dislikes hearing patent cases and having to deal with the technical and tactical arguments that arise in such a case. On the other hand, you may get a judge that feels very comfortable handling patent cases. If you are the party starting litigation, you just hope to draw a judge that is comfortable handling patent cases.
The other thing that is very different in the United States is that we have the jury system. Many clients might not want to have jurors deciding whether or not their chemical structure or electrical circuitry was patentable. For many people, listening to technical discussion may be a difficult matter; and knowing that your highly technical case will be decided by jurors who are not likely to have technical skills can be scary to all of the parties involved. Jurors may not even have a university-level education; and, even if they did, they may not have a background in science. Therefore, in deciding where to bring an action, one may want to consider who the decision maker will be: will it be a generalist judge, a specialist judge, or a jury?
One of the bigger differences on the two sides of the border is the nature of discovery. I began my law practice before a lot of the great advances in electronics had happened. I remember sitting in a work room that was filled with three-ring binders containing the depositions of all the witnesses that were taken. That is the nature of American proceedings. You will get a huge number of documents and many depositions; in addition, you will work extensively with experts.
In Canada, at least...