Case information

Intellectual property — Patents — Infringement — Actions for infringement — When infringement arises — Applicants claiming respondents infringed patent for floating liquefied natural gas facility by sharing preliminary design incorporating patented elements — Respondents sharing concepts but not building facility — Applicants claiming infringing “use” by commercially exploiting patent advantages — Whether there can be infringing use of a patented invention under the legislation where a physical object has not been built — Patent Act, R.S.C. 1985, c. P-4, s. 42.

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(CONFIDENTIALITY ORDER) (CERTAIN INFORMATION NOT AVAILABLE TO THE PUBLIC)

The applicants (collectively “Steelhead”) own a patent, which claims a floating liquefied natural gas (“FLNG”) facility. Steelhead had disclosed confiden¬tial information pertaining to the patent, including the design of a proposed FLNG facility, to a group of natural gas producers, which included the respondents (collectively “ARC”). The group had a preliminary engineering design study for an FLNG facility prepared, which contained engineering drawings, specifications and cost estimates. The group showed the study to potential investors and other third parties.

Steelhead commenced a patent infringement action against ARC and sought monetary and decla-ratory relief, claiming ARC used the invention when it designed, developed, and marketed to potential investors and stakeholders the preliminary design for an FLNG facility that, if built, would incorporate all essential elements of Steelhead’s invention. ARC conceded that, had the FLNG facility described in its preliminary study been built, it would be within the scope of the patent. ARC countered, however, that it did not construct or operate the invention, and sharing conceptual designs was not “use” under s. 42 of the Patent Act.

The Federal Court held that ARC did not infringe the patent and dismissed Steelhead’s action in its entirety. It found that the claimed invention was an actual, physical apparatus, system, or method using such an apparatus, not a drawing of one. A drawing of an invention for promotional purposes only does not make “use” of a patented invention. The Federal Court of Appeal dismissed the appeal.