SALT Canada Inc. v. John Baker, 2020 FCA 127 (“Salt”)

This is a huge win in the Federal Court of Appeal (FCA) that significantly changes Canadian patent law by recognizing that the Federal court has jurisdiction to determine the issue of patent title based on analysis of contracts or other written instruments.

On July 28, 2020, the Canadian Federal Court of Appeal delivered its much anticipated decision in SALT Canada Inc. v John W Baker, 2020 FCA 127 (“Salt”) with regard to the Federal Court’s ability to interpret contracts, licenses, and other contractual documents in proceedings made pursuant to statutory provisions (e.g. Section 52 of the Patent Act). The FCA held that the Federal Court has a wide power to determine issues of title to a patent, even if contractual instruments need to be interpreted as part of that exercise, which the Federal Court had previously held was outside its own jurisdiction.

The Salt decision: (i) reverses a line of Federal Court decisions stemming from the 1995 decision of Lawther, which held that contract interpretation was outside of the jurisdiction of the Federal Court; and (ii) re-affirms the Supreme Court of Canada’s 1941 decision of Kellogg and the former Exchequer Court’s 1960 decision of Clopay, which held that “the Federal Court can interpret contracts between private citizens as long as it is done under a sphere of valid federal jurisdiction vested in the Federal Court”.

The Salt decision is one that will be celebrated by Canadian patent practitioners and patent litigants alike, as it removes the spectre of litigants having to go through a cumbersome exercise of seeking judgment on contractual matters in the provincial court system before seeking other remedies before the Federal Court.

The Salt decision also provides welcomed re-affirmation that “the Federal Court can interpret contracts between private citizens as long as it is done under a sphere of valid federal jurisdiction vested in the Federal Court”.

McMillan acted for the appellant, SALT Canada Inc., in this patent infringement and patent title dispute, with a team led by Keith Bird and included Jeffrey Levine and Peter Wells (Retired Partner).

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