Patent Infringement: What Biofuel Producers, Blenders and Distributors should know

2008-01-01

PATENTINFRINGEMENT:WHATBIOFUELPRODUCERS,BLENDERSAND
DISTRIBUTORSSHOULDKNOW

JEREMYLAWSON*
LEGERROBICRICHARD,
LLP
L
AWYERS,PATENTANDTRADE-MARKAGENTS
Letusconsiderthefollowingscenario:AbiofuelproducerhasitsfacilitiesinQuébec
fromwhichitshipsoutitsfueltoablender.Theblendermixesthebiofuelwith
gasolineorpetrodieseltogeneratevariousconcentrations.Adistributorthen
completesthechainbydeliveringtheblendedfueltopumpsthroughoutCanadaand
theUnitedStates.
Nowletusintroduceanothervariableintotheequation.Itturnsoutthatthereisa
Canadianpatentthatrelatestothebiofuelinquestion.Thispatentprovidesa
monopolyinCanadaonthesubjectmatterdefinedinanumberofclaims(described
below).Theclaimsmaycoverabiofuelproduct,aprocessformakingaparticular
biofuelorafueladditive.
Todetermineexactlywhatitcovers,thepatentmustbeanalyzedindetail.
Dependingontheclaimsofthepatent,ourproducer,blenderanddistributormaybe
liableforinfringement.
Inmostcases,theproducerstandstobedirectlyaffectedbypatentinfringement
issues,asthemajorityofbiofuelpatentscoverproductionprocesses.Asthe
producer’sfacilitiesarelocatedinQuébec,itsuseofthepatentedtechnologyin
Canadawilllikelyconstituteinfringement.Thepatentholdermaysuefor
infringement,whichmayresultinaninjunctionanddamages.Aninjunctionwould
prohibittheproducerfromusingorsellingthepatentedtechnologyinCanada.
Damagesaregenerallycalculatedasareasonableroyaltyorlostprofits.The
infringingproductmayalsobeseizedundercertaincircumstances.
Theblendershouldalsobewaryofcertaintypesofpatents,especiallythose
pertainingtobiofuelcompositionsandadditives.Iftheblendingisperformedin
Canadaandresultsinacompositionthatfallswithinthedefinitionofthepatent
claim,theblendermaybeliableforinfringement.Eveniftheblender’soperations

©CIPS,2008.
*OfLEGERROBICRICHARD,LLP,amultidisciplinaryfirmoflawyers,andpatentandtrade-marks
agents.PublishedintheFebruary/March2008issueofBiofuelsCanadaMagazine.Publication
063.002.

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arelocatedintheU.S.,itmaybeprohibitedfromsellingitsblendedproductin
Canada.
Thoughthedistributordoesnotaltertheblendedproductenroutetofillingstations
orotherrepositories,thesaleofapatentedbiofuelinCanadawouldtechnically
makethedistributorliableforinfringement.Ignoranceisnotanexcuse.Ifonlya
Canadianpatentexists,non-infringingdistributionwouldbelimitedtotheU.S.
Giventhissimplescenario,itisclearthatproducers,blendersanddistributors
shouldbeawareofthepatentedtechnologiesrelatedtotheirbiofuels.Inreality,
however,thesituationisfarmorecomplex.Herearejustsomeofthefactorsthat
maycomeintoplay:

·›Patentapplicationsarenotenforceableuntilthepatentisgranted,butthere
isapost-grantrightto“reasonablecompensation”forinfringingacts
committedafteritspublicationbutbeforeitisgranted.

·›Manycompaniesholdextensivepatentportfolioscoveringdifferentaspects
ofasingletechnologyinvariouscountries.

·›PatentlitigationintheU.S.isjaw-droppinglycostlyandcanspelldisasterfor
smallandmediumsizedcompanies.

·›Geneticallymodifiedfeedstocksmaybepatentedorprotectedbyplant
breeders’rights.

·›CanadaandtheUnitedStateshaveregulationsprohibitingimportationofa
productthatwasproducedabroadbyaprocessthatispatenteddomestically.

Subtletiesaboundwhenconsideringwhatconstitutesinfringement.Giventhe
financialconsiderationsinvolved,infringementisalsoamatterofcontinualand
heateddebate.Inanevolvingindustrysuchasbiofuels,itisnevertooearlytofind
outaboutthepotentialrisksandstrategiesregardingpatentinfringement.

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