Richard OwensCanadian courts have occasionally gone along with poor IP judgments; but they have quickly come to their senses, writes Richard Owens.

By Richard Owens, Feb. 28, 2018

A famous essay in an early issue of Wired Magazine attacked existing intellectual-property laws as inappropriate for the digital age. They were “old bottles for new wine.” Well, let’s say for the sake of argument that were so. What’s wrong with old bottles? Wine bottles are so reliable, work for such a wide variety of liquids, and are of such consistent design that a wine producer could quite safely stockpile them for ages before using them. IP laws have proven themselves equally robust and current.

Yet, to listen to Canadian and international IP commentators even today, especially voices from Canadian law schools, one would think IP laws are inadequate, outdated, poorly conceived and changing profoundly. This negativism is not about promoting creativity in Canada but, rather, law professors’ careers; still, it has an impact. Last week, the final text of the TPP agreement (officially the Comprehensive and Progressive Agreement for Trans-Pacific Partnership) was released. And it revealed that Canada cravenly led the suspension of the bulk of the IP chapter, which was in fact good for Canadian innovation.

The ongoing attacks on existing intellectual-property protections have also led to some odd and even risible legislative experiments in copyright law. Canadian courts have occasionally gone along with poor IP judgments; but they have quickly come to their senses. Take notice, potential infringers. Those expecting greater permissiveness from the courts, including the Supreme Court of Canada (SCC), will be severely disappointed. The Canadian government needs to pay attention to what the courts are saying, not what IP faddists say.

The ongoing attacks on existing intellectual-property protections have also led to some odd and even risible legislative experiments in copyright law.

Let’s look at a couple of examples.

In Access Copyright v. York University, York decided that it no longer had to pay for the vast amounts of copyright-protected material it copied for its business. To do so, it relied on an aggressive and poorly grounded interpretation of some ill-considered SCC judgments. Access Copyright had been accustomed to collecting the royalties that York now refused to pay, and it sued to recoup them. It was an almost existential quest for the copyright collective, whose revenues had declined catastrophically, since other educational institutions had also taken York’s position.

No question this dire situation was largely the doing of the SCC, whose recent precedents on copyright were, with all due respect, far from its usual standards of jurisprudence, with CCH v. Law Society of Upper Canada and Alberta (Education) being particularly egregious.

But to the rescue of the law rode the Federal Court. Justice Phelan issued a scathing, and brilliant, judgment fixing the worst excesses of these SCC deviations and finding that York was entirely responsible for large sums of royalties to Access Copyright. York is appealing, but it won’t win; its only hope is to delay execution of the original judgment. The Federal Court of Appeal will have no sympathy for York; and the SCC will readily adopt that court’s way out of this self-created mess, if it even agrees to hear an appeal from the appellate court’s judgment, for which odds are poor.

The case of the “promise doctrine” is an example of the SCC definitively reversing bad law. The promise doctrine was a rule of patent law requiring special “utility” of some patents, almost all of which were for pharmaceuticals. The rule was so baleful in its effects that it provoked drugmaker Eli Lilly and Co. to sue the government of Canada in a NAFTA challenge for $500 million, owing to three of its patents being invalidated by the promise doctrine — though valid everywhere else.

Although Lilly lost its challenge, the SCC ultimately agreed with its condemnation of the promise doctrine and in a recent case, Astrazeneca v. Apotex, simply overturned the rule and did away with it altogether. No hesitation or ambiguity. Now only one rule for utility applies, ending the nonsensical situation of having different rules for otherwise similar patents. Yet still some commentators have mourned the promise doctrine’s demise, among other reasons for taking a negotiating chip off the NAFTA table — as though we should maintain a supply of self-inflicted wounds to agree to mend in the event of trade negotiations.

And so on. In Harvard College v. Canada (Commissioner of Patents), the SCC ruled that higher life forms could not be patentable; in Schmeiser v. Monsanto, it effectively reversed that decision. Chalk up another win for IP. And, in a similar vein, the SCC stepped forward to strongly protect IP in Equustek v. Google. In Equustek the SCC required Google to de-index worldwide references to providers of equipment infringing Equustek technology.

Whether by reversal or distinguishing of prior decisions, or new law, courts are sustaining traditional IP protections. Canadian opinions that are anti-IP are being marginalized, as they should be.

Richard C. Owens is a senior Munk fellow of the Macdonald-Laurier Institute and an adjunct professor at the University of Toronto Faculty of Law.

MLI would not exist without the support of its donors. Please consider making a small contribution today.

Donate Now Through!